Intellicheck (IDN) grows Q2 revenue 16% but flags major customer cutback
Intellicheck, Inc. reported strong year-over-year improvement for the quarter and six months ended June 30, 2026. Revenue grew to $5.9M for the quarter and $11.5M year‑to‑date, driven mainly by higher Software‑as‑a‑Service (SaaS) transaction volumes. Gross margin remained very high at about 91%, and operating expenses declined modestly, resulting in a swing from net losses in 2025 to net income of $663K for the quarter and $1.3M for the first half of 2026.
The company ended June 30, 2026 with $11.8M in cash and no debt, working capital of $12.2M, and stockholders’ equity of $22.5M. Management expects existing cash and operating cash flow to cover working capital needs for at least 12 months and continues to report effective internal controls. However, one major customer contributed 29% of first‑half 2026 revenue and is transitioning many identity‑verification use cases to an alternative vendor. Based on the customer’s plan, Intellicheck expects a 70–75% reduction in that customer’s transaction volumes in the second half of 2026 and now anticipates total 2026 revenue will decline versus 2025, while still remaining net‑income positive and generating positive Adjusted EBITDA.
Positive
- Revenue up double digits with margin expansion: Q2 2026 revenue rose 16% to $5.94M and first‑half revenue increased 14% to $11.47M, with gross margin improving to about 91%, reflecting scalable SaaS economics.
- Return to profitability and stronger cash position: Net income reached $663K in Q2 and $1.30M year‑to‑date versus prior‑year losses, while cash and equivalents grew to $11.84M and the company carries no debt.
- Improving operating efficiency: Operating expenses for the first half fell 3% to $9.33M despite higher revenues, and Adjusted EBITDA improved to $1.99M from $58K, indicating better cost discipline.
Negative
- Major customer transition expected to cut revenue: A single customer representing 29% of first‑half 2026 revenue plans a 70–75% reduction in transaction volumes in the second half of 2026, and total 2026 revenue is now expected to decline versus 2025.
- High customer concentration risk: Three customers contributed 56% of revenue in the first half of 2026, leaving results highly sensitive to changes in a small number of large commercial accounts.
- Legal and regulatory exposure: The company disclosed a class action under Illinois’ Biometric Information Privacy Act and notes that litigation outcomes could, if unfavorable, materially affect financial results, even though no loss is currently recorded.
Filing Explained
The 10-Q confirms that, as of
Key Figures
Q2 2026 Revenue: $5,941
H1 2026 Revenue: $11,465
Q2 2026 Net Income: $663
+5 more
8 metrics
Q2 2026 Revenue
$5,941
Three months ended June 30, 2026 total revenues
H1 2026 Revenue
$11,465
Six months ended June 30, 2026 total revenues
Q2 2026 Net Income
$663
Net income for the three months ended June 30, 2026
Cash and Cash Equivalents
$11,837
Balance as of June 30, 2026
Top Customer Revenue Share
29%
Portion of total revenue from one customer in first six months of 2026
Expected Volume Reduction Range
70–75%
Planned reduction in transaction volumes from major customer in second half of 2026
Adjusted EBITDA H1 2026
$1,985
Adjusted EBITDA for six months ended June 30, 2026
Working Capital
$12,237
Current assets minus current liabilities at June 30, 2026
Key Terms
Software-as-a-Service (SaaS), breakage revenue, Adjusted EBITDA, valuation allowance, +2 more
6 terms
Software-as-a-Service (SaaS) technical
"SaaS revenue, which consists of software licensed as a service on a subscription basis, increased"
Software-as-a-service (SaaS) is a way of delivering software over the internet where customers pay a subscription to use applications hosted and maintained by a provider, like renting a tool or streaming a service rather than buying and installing it. For investors it matters because subscriptions create predictable, recurring revenue and can scale quickly with low distribution costs, while metrics like customer retention and churn directly affect future cash flow and valuation.
breakage revenue financial
"including software development costs, revenue recognition (including breakage revenue), the fair value"
Revenue that a company recognizes from prepaid customer balances, gift cards, vouchers, loyalty points, or other credits that are never redeemed. It matters to investors because breakage turns a previously recorded liability into reported income and can influence a company’s revenue timing, margins, and cash flow—similar to finding unclaimed change from prepaid services or stored-value items on a company’s books.
Adjusted EBITDA financial
"Adjusted EBITDA is calculated by adjusting net income (loss) for certain reductions such as"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
valuation allowance financial
"The Company has recorded a full valuation allowance against its net deferred tax assets"
A valuation allowance is a reserve set aside to reduce the value of certain assets on a company's financial records when there is uncertainty about whether they will generate the expected benefits. It acts like a caution sign, indicating that some assets might not be fully recoverable or worth their recorded amount. This matters to investors because it provides a more realistic picture of a company's financial health and potential risks.
primary/secondary vendor architecture technical
"it is adopting a primary/secondary vendor architecture under which an alternative vendor is expected"
Biometric Information Privacy Act regulatory
"alleging that the Company collected biometric information from users in Illinois in violation of the Illinois Biometric Information Privacy Act"
Earnings Snapshot
Revenue Q2 2026 vs Q2 2025: $5,941 vs $5,123 · Guidance included
Three and six months ended June 30, 2026
Revenue Q2 2026 vs Q2 2025
$5,941 vs $5,123
Revenues increased $818, or 16%, for the three months ended June 30, 2026 compared to 2025
Revenue H1 2026 vs H1 2025
$11,465 vs $10,017
Revenues increased $1,448, or 14%, for the six months ended June 30, 2026 compared to 2025
Net Income (Loss) Q2
$663 vs $(251)
Switched from a net loss of $(251) to net income of $663 for the quarter
Net Income (Loss) H1
$1,299 vs $(569)
Switched from a net loss of $(569) to net income of $1,299 for the six months
Adjusted EBITDA H1 2026 vs H1 2025
$1,985 vs $58
Adjusted EBITDA increased to $1,985 from $58 for the six months ended June 30
Guidance
Assuming a major customer implements its current multi-vendor plan and no additional volumes are added, management expects total revenue for 2026 to decline compared to 2025 but still anticipates remaining profitable on a net income basis and generating positive Adjusted EBITDA.
FAQ
How did Intellicheck (IDN) perform financially in Q2 2026?
Intellicheck generated $5.94M in revenue and $663K in net income for Q2 2026, compared with a $251K loss a year earlier. Gross profit was $5.42M, or roughly 91% of revenue, reflecting its SaaS‑driven business model.
What are the first-half 2026 results for Intellicheck (IDN)?
For the six months ended June 30, 2026, Intellicheck reported $11.47M in revenue and $1.30M in net income. This compares to $10.02M in revenue and a $569K net loss in the prior‑year period, with Adjusted EBITDA improving to $1.99M.
How strong is Intellicheck’s (IDN) balance sheet and liquidity?
Intellicheck held $11.84M in cash and cash equivalents at June 30, 2026, with $12.24M of working capital and no debt or credit facilities. Management expects existing cash and operating cash flows to fund working capital needs for at least the next 12 months.
What customer concentration risks does Intellicheck (IDN) face?
Three customers accounted for 56% of revenue in the first half of 2026, and one customer alone contributed 29%. That key customer is transitioning many use cases to another vendor, which is expected to materially reduce Intellicheck’s future revenue.
How will the major customer’s transition affect Intellicheck’s (IDN) 2026 outlook?
The customer’s plan implies a 70–75% cut in its transaction volumes with Intellicheck in second‑half 2026. Assuming the plan proceeds as communicated, management now expects 2026 revenue to decline versus 2025 but still anticipates positive net income and Adjusted EBITDA.
What are Intellicheck’s (IDN) key non-GAAP metrics this quarter?
Intellicheck reported Q2 2026 Adjusted gross profit of $5.56M (about 93.6% of revenue) and Adjusted EBITDA of $1.05M. For the first half, Adjusted gross profit was $10.72M and Adjusted EBITDA was $1.99M, reflecting improved profitability after adding back non‑cash items.
Does Intellicheck (IDN) still have significant tax loss carryforwards?
As of December 31, 2025, Intellicheck had $30.52M in U.S. federal net operating loss carryforwards and $3.67M in state NOLs, plus $682K of federal R&D credits. A full valuation allowance is maintained, but these attributes could offset future taxable income if realized.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ________________ to ________________ | |||||
Commission File No.: 001-15465
(Exact name of Registrant as specified in its charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of Principal Executive Offices) (Zip Code) | ||||||||
Registrant’s telephone number, including area code: ( 516) 992-1900
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||||||||
The | ||||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.) Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | Smaller reporting company | Emerging growth company | |||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of August 13, 2026, there were 20,266,743 shares of Common Stock, $0.001 par value, outstanding.
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INTELLICHECK, INC.
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| Page | |||||
PART I – FINANCIAL INFORMATION | 3 | ||||
Item 1. Unaudited Condensed Financial Statements | 3 | ||||
Condensed Balance Sheets – June 30, 2026 (Unaudited) and December 31, 2025 | 3 | ||||
Unaudited Condensed Statements of Operations for the three and six months ended June 30, 2026 and 2025 | 4 | ||||
Unaudited Condensed Statements of Stockholders’ Equity for the three and six months ended June 30, 2026 and 2025 | 6 | ||||
Unaudited Condensed Statements of Cash Flows for the six months ended June 30, 2026 and 2025 | 7 | ||||
Notes to Unaudited Condensed Financial Statements | 8 | ||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22 | ||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 27 | ||||
Item 4. Controls and Procedures | 27 | ||||
Part II – OTHER INFORMATION | 27 | ||||
Item 1. Legal Proceedings | 28 | ||||
Item 1A. Risk Factors | 28 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 28 | ||||
Item 3. Defaults Upon Senior Securities | 29 | ||||
Item 4. Mine Safety Disclosures | 29 | ||||
Item 5. Other Information | 29 | ||||
Item 6. Exhibits | 29 | ||||
Signatures | 30 | ||||
Exhibits
| 3.1 | Second Amended and Restated Bylaws of Intellicheck, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on July 23, 2026) | ||||
| 31.1 | Rule 13a-14(a) Certification of Chief Executive Officer | ||||
| 31.2 | Rule 13a-14(a) Certification of Chief Financial Officer | ||||
| 32 | 18 U.S.C. Section 1350 Certifications | ||||
| 101.INS | XBRL Instance Document | ||||
| 101.SCH | XBRL Taxonomy Extension Schema | ||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase | ||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase | ||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase | ||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase | ||||
| 104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) | ||||
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PART I – FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
INTELLICHECK, INC.
CONDENSED BALANCE SHEETS
(In thousands, except share and per share amounts)
| June 30, 2026 | December 31, 2025 | ||||||||||
| (Unaudited) | |||||||||||
| ASSETS | |||||||||||
| CURRENT ASSETS: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance for credit losses of $ | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| PROPERTY AND EQUIPMENT, NET | |||||||||||
| GOODWILL | |||||||||||
| INTANGIBLE ASSETS, NET | |||||||||||
| OTHER ASSETS | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| CURRENT LIABILITIES: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses | |||||||||||
| Deferred revenue | |||||||||||
| Total current liabilities | |||||||||||
| Total liabilities | |||||||||||
| COMMITMENTS AND CONTINGENCIES (Note 10) | |||||||||||
| STOCKHOLDERS’ EQUITY: | |||||||||||
Preferred stock - $ | |||||||||||
Common stock - $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
See accompanying notes to unaudited condensed financial statements.
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INTELLICHECK, INC.
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| REVENUES | $ | $ | $ | $ | |||||||||||||||||||
| COST OF REVENUES | ( | ( | ( | ( | |||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| OPERATING EXPENSES | |||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Income (loss) from operations | ( | ( | |||||||||||||||||||||
| OTHER INCOME (EXPENSE), NET | |||||||||||||||||||||||
| Other income, net | |||||||||||||||||||||||
| Total other income, net | |||||||||||||||||||||||
| Net income (loss) before provision for income taxes | ( | ( | |||||||||||||||||||||
| Provision for income taxes | |||||||||||||||||||||||
| Net income (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| PER SHARE INFORMATION | |||||||||||||||||||||||
| Income (loss) per common share - | |||||||||||||||||||||||
| Basic | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Diluted | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Weighted average common shares used in computing per share amounts | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See accompanying notes to unaudited condensed financial statements.
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INTELLICHECK, INC.
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except number of shares)
(Unaudited)
| Three months ended June 30, 2026 | |||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||
| BALANCE, March 31, 2026 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Stock-based compensation | – | – | – | ||||||||||||||||||||||||||
| Stock option exercises, net of cashless exercises | – | – | |||||||||||||||||||||||||||
| Issuance of shares for vested restricted stock grants | – | – | – | – | |||||||||||||||||||||||||
| Net income | – | – | – | ||||||||||||||||||||||||||
| BALANCE, June 30, 2026 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Three months ended June 30, 2025 | |||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||
| BALANCE, March 31, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Stock-based compensation | – | – | – | ||||||||||||||||||||||||||
| Stock option exercises, net of cashless exercises | – | ||||||||||||||||||||||||||||
| Issuance of shares for vested restricted stock grants | – | – | — | — | |||||||||||||||||||||||||
| Net loss | – | – | – | ( | ( | ||||||||||||||||||||||||
| BALANCE, June 30, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
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| Six months ended June 30, 2026 | |||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||
| BALANCE, December 31, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Stock-based compensation | – | – | – | ||||||||||||||||||||||||||
| Stock option exercises, net of cashless exercises | – | ||||||||||||||||||||||||||||
| Issuance of shares for vested restricted stock grants | – | – | – | – | |||||||||||||||||||||||||
| Net income | – | – | – | ||||||||||||||||||||||||||
| BALANCE, June 30, 2026 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Six months ended June 30, 2025 | |||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||
| BALANCE, December 31, 2024 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Stock-based compensation | – | – | – | ||||||||||||||||||||||||||
| Stock option exercises, net of cashless exercises | – | ||||||||||||||||||||||||||||
| Issuance of shares for vested restricted stock grants | – | – | – | – | |||||||||||||||||||||||||
| Net loss | – | – | – | ( | ( | ||||||||||||||||||||||||
| BALANCE, June 30, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
See accompanying notes to unaudited condensed financial statements.
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INTELLICHECK, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Six months ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net income (loss) | $ | $ | ( | ||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities | |||||||||||
| Depreciation and amortization | |||||||||||
| Stock-based compensation | |||||||||||
| Credit loss expense | |||||||||||
| Changes in assets and liabilities: | |||||||||||
| Decrease in accounts receivable | |||||||||||
| Decrease (Increase) in other current assets and other assets | ( | ||||||||||
| (Decrease) in accounts payable and accrued expenses | ( | ( | |||||||||
| (Decrease) Increase in deferred revenue | ( | ||||||||||
| Net cash provided by operating activities | |||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Purchases of property and equipment | ( | ( | |||||||||
| Software development costs | ( | ||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Proceeds from exercises of stock options | |||||||||||
| Repayment of insurance financing arrangements | ( | ||||||||||
| Net cash provided by financing activities | |||||||||||
| Net increase in cash | |||||||||||
| CASH AND CASH EQUIVALENTS, beginning of period | |||||||||||
| CASH AND CASH EQUIVALENTS, end of period | $ | $ | |||||||||
| Supplemental disclosures of cash flow information: | |||||||||||
| Cash paid for interest | $ | $ | ( | ||||||||
| Cash paid for income taxes | $ | $ | |||||||||
See accompanying notes to unaudited condensed financial statements.
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INTELLICHECK, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(All dollar amounts are rounded to thousands, except share and per share data)
(Unaudited)
1. NATURE OF BUSINESS
Business
Intellicheck, Inc. (the “Company” or “Intellicheck”) is a prominent technology company that is engaged in developing, integrating and marketing identity verification solutions to address challenges that include commercial retail and banking fraud prevention. Intellicheck’s products include solutions for preventing identity fraud across any industry delivered via smartphone, tablet, POS integration or other electronic devices. Intellicheck continues to develop and release innovative products based upon its rich patent portfolio consisting of ten (10 ) U.S. and one (1 ) Canadian patent.
Liquidity
For the six months ended June 30, 2026, the Company realized a net income of $1,299 and generated cash from operations of $2,242 . As of June 30, 2026, the Company had cash and cash equivalents of $11,837 , working capital (defined as current assets minus current liabilities) of $12,237 and an accumulated deficit of $(131,911 ). Based on the Company’s business plan and cash resources, Intellicheck expects its existing cash and future resources and revenues generated from operations to satisfy its working capital requirements for at least the next 12 months from the date of issuance of these unaudited condensed financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments necessary for a fair presentation of the Company’s financial position at June 30, 2026, the results of operations, and stockholders’ equity for the three and six months ended June 30, 2026 and 2025 and cash flows for the six months ended June 30, 2026 and 2025. All such adjustments are of a normal and recurring nature. Interim financial statements are prepared on a basis consistent with the Company’s annual financial statements. Results of operations for the three and six months periods ended June 30, 2026, are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2026.
The condensed balance sheet as of December 31, 2025 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements.
References in this Quarterly Report on Form 10-Q to “authoritative guidance” is to the Accounting Standards Codification ("ASC") issued by the Financial Accounting Standards Board (“FASB”).
For further information, refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Recently Adopted Accounting Pronouncements
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. We adopted ASU 2025-05 in the first quarter of 2026
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and elected to apply the practical expedient provided in ASC 326-20-30-10C. The adoption did not have a material impact on our condensed financial statements and related disclosures.
Recently Issued Accounting Pronouncements
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 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.
Use of Estimates
The preparation of the Company’s unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s unaudited condensed financial statements and accompanying notes.
Significant estimates and assumptions that affect amounts reported in the unaudited condensed financial statements include impairment consideration and valuation of goodwill and intangible assets including software development costs, revenue recognition (including breakage revenue), the fair value of stock options granted under the Company’s equity compensation plan, and the valuation allowance of our deferred tax assets. Due to the inherent uncertainties involved in making estimates, actual results reported in future periods may be different from those estimates.
Research and Development
Research and development expenses are expensed as incurred and consist primarily of employee-related expenses (such as salaries, taxes, benefits and stock-based compensation), allocated overhead costs and outside services costs related to the development and improvement of the Company's SaaS applications.
Cash and Cash Equivalents
The Company classifies time deposits and other investments that are highly liquid and have maturities of three months or less at the date of purchase as cash equivalents. Our cash and cash equivalents consist primarily of both cash on deposits with banks, which are maintained with major financial institutions in the United States, and money market funds. These money market funds are invested in cash, U.S. Treasury bills, notes and other obligations issued or guaranteed as to principal and interest by the U.S. Treasury, and repurchase agreements secured by such obligations or cash. These money market funds are rated AAAm by S&P Global Ratings. Deposit accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000, however amounts may exceed FDIC insured limits. The Company has not experienced any losses with regard to its bank accounts and other investments and believes it is not exposed to any risk of loss on its cash bank accounts or other investments.
Accounts Receivable, Net
Accounts receivable are reported on the balance sheets at the outstanding principal amount adjusted for an allowance for credit losses and any charge offs. The Company has applied a loss rate method which takes historical data as the basis for calculating the allowance amount, along with the aging out outstanding receivables. In estimating whether
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accounts receivable will be collected, the Company performs evaluations of customers and continuously monitors collections and payments and estimates an allowance for credit losses.
Property and Equipment, Net
Goodwill
Goodwill represents the excess of purchase price over the fair value of net assets acquired in business combinations. Pursuant to ASC 350, Intangibles - Goodwill and Other, the Company tests goodwill for impairment on an annual basis in the fourth quarter on December 31, or between annual tests, in certain circumstances. Under authoritative guidance, the Company first assesses qualitative factors to determine whether it is necessary to perform step one of the quantitative goodwill impairment test. An entity is not required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. Events or changes in circumstances which could trigger an impairment review include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, other entity specific events and sustained decreases in share price.
The Company performed its annual impairment test of goodwill in the fourth quarter for the year ended December 31, 2025. For the three and six months ended June 30, 2026 and 2025, the Company did not recognize any impairment charges. The Company also evaluated whether the expected volume reductions constituted a triggering event requiring an interim assessment of goodwill for impairment under ASC 350 as of June 30, 2026, and concluded that no such triggering event had occurred.
Intangible assets, net
Intangible assets include patents, copyrights, developed technology and capitalized software development costs. The Company amortizes these assets on a straight-line basis over their estimated useful lives, as it represents the pattern of economic benefits consumed. There were no
The Company capitalizes internal-use software costs which includes costs incurred in connection with the development of new software solutions and enhancements to existing software solutions that are expected to result in increased functionality. The costs incurred in the preliminary stages of development are expensed as incurred. Once the software has reached the application development stage, internal and external costs, if direct and incremental, are capitalized until the software is complete and available for its intended use. The Company evaluates the useful lives of these assets and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.
Long-Lived Assets and Impairment of Long-Lived Assets
The Company’s long-lived assets include property and equipment and intangible assets.
Advertising Costs
Advertising costs, which are expensed as incurred, were $161 and $46 for the six months ended June 30, 2026 and 2025, respectively. Advertising costs were $97 and $21 for the three months ended June 30, 2026 and 2025, respectively. These costs are recorded as a component of selling, general and administrative expenses within the condensed Statements of Operations.
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Retirement Plan
The Company has a retirement savings 401(k) plan ("Retirement Plan"). The Retirement Plan permits eligible employees to make voluntary contributions to a trust, up to a maximum of 35 % of compensation, subject to certain limitations. The Company has elected to contribute a matching contribution equal to 100 % of the first 3 % and 50 % of the next 2 % of an eligible employee’s deferral election. The Company’s matching contributions were $106 and $29 for the six months ended June 30, 2026 and 2025, respectively. The Company’s matching contributions were $58 and $29 for the three months ended June 30, 2026 and 2025, respectively. During the three and six months ended June 30, 2025, funds from the Retirement Plan's forfeiture account were used to fund matching contributions in accordance with the terms of the Retirement Plan and as such, the Company recorded no expense in certain periods related to its retirement plans. These costs are recorded as a component of selling, general and administrative expenses within the condensed Statements of Operations.
Shipping Costs
The Company’s shipping and handling costs related to equipment sales are included in cost of revenues for all periods presented. All other shipping and handling costs are included as a component of selling, general and administrative expenses within the condensed Statements of Operations.
Sales Taxes
Sales and other taxes collected from customers and remitted to governmental authorities are presented on a net basis and thus excluded from revenues.
Income Taxes
Fair Value of Financial Instruments
The Company adheres to the provisions of ASC 820, Fair Value Measurement, which requires the Company to calculate the fair value of financial instruments and include this additional information in the notes to financial statements when the fair value of those financial instruments is different than the book value. The Company’s financial instruments include cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued expenses. At June 30, 2026 and December 31, 2025, the carrying value of the Company’s financial instruments approximated fair value, due to their short-term nature.
FASB guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).
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The three levels of the fair value hierarchy are as follows:
•Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities. The Company's Level 1 assets consisted primarily of cash and cash equivalents totaling $ | ||
•Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active). Level 2 includes financial instruments that are valued using models or other valuation methodologies. The Company had no Level 2 assets or liabilities as of June 30, 2026 and December 31, 2025. | ||
•Level 3—Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when the fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The Company had no Level 3 assets or liabilities as of June 30, 2026 and December 31, 2025. | ||
Revenue Recognition and Deferred Revenue
General
Most license fees and services revenue 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 the Company’s software. Under the fixed-price revenue model customers are charged a fixed monthly fee either per device or physical business location to access the Company’s software. Under ASC 606, 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. The Company measures revenue based on the consideration specified in a customer arrangement, and revenue is recognized when the performance obligations in an arrangement are satisfied. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when, or as, the customer receives the benefit of the performance obligation. Customers typically receive the benefit of the Company’s services as they are performed. The Company's performance obligations are satisfied over time, and as a result, the Company follows the right to invoice practical expedient meaning the Company may recognize revenue monthly as invoiced based on our contract terms.
The Company has an additional revenue model where customers purchase a predetermined number of transactions for the term of the contract. Customers are charged a fixed monthly fee for a set number of scans (fixed consideration), with any overages charged on a per scan basis (variable consideration). The Company estimates the amount of unused transactions at the end of each contract period and recognizes a portion of that revenue as breakage revenue each reporting period. If the Company expects the customer to use all transactions in the specified service period, the Company will recognize the transaction price as revenue in the specified service period as the promised units of service are transferred to the customer. Alternatively, if the Company expects that the customer cannot or will not use all transactions in the specified service period (referred to as “breakage”), the Company will recognize the estimated breakage amount as revenue ratably over the service period in proportion to the revenue that the Company will recognize for actual transactions used by the customer in the service period. We do not estimate the variable consideration at any point; rather we calculate and recognize the variable portion at the end of the contract term since these contracts are considered monthly due to the termination clauses included within them. The fixed and variable performance obligations are recognized monthly based on the contract terms.
The Company has an additional 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.
Invoicing is based on schedules established in customer contracts. Payment terms are generally established from 30 to 60 days from the invoice date. Accordingly, the Company has determined that its contracts do not include a
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significant financing component. Product returns are estimated and recorded as a reduction to revenue, however, such amounts have been immaterial.
Nature of goods and services
The following is a description of the products and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each:
Software-as-a-Service (SaaS)
SaaS for hosted subscription services requires the Company to provide a stand-ready obligation and allows customers to access a set of data for a predetermined period of time. As the customer obtains access at a point in time but continues to have access for the remainder of the subscription period, the customer is considered to simultaneously receive and consume the benefits provided by the entity’s performance as the entity performs. Accordingly, the revenue should be recognized over time, under the fixed pricing model, based on the usage of the hosted subscription services, which can vary from month to month. Under the per-scan revenue model, the customer requires access to the Company's hosted subscription service but revenue is recognized over time as the customer scans an identity document.
Equipment Revenue
Revenue from the sale of equipment is recognized at a point in time. The point in time that the revenue is recognized is when the customer has control of the equipment, which is when the customer receives the benefit and the Company’s performance obligation has been satisfied. Depending on the contract terms, that could either be at the time the equipment is shipped or at the time the equipment is received.
Other Revenue
Other Revenues, which historically have not been material, consist primarily of revenues from other subscription and support services, and extended warranties. The Company’s revenues from other subscription and support services includes jurisdictional updates to certain commercial customers and support services. These subscriptions require continuing service or post contractual customer support and performance. As the customer obtains access at a point in time but continues to have access for the remainder of the subscription period, the customer is considered to simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs. Accordingly, the revenue is recognized over time based on usage, which can vary from month to month. The revenue is typically based on a formula such as number of locations in a given month multiplied by a fee per location.
Extended warranty revenues are generated when a warranty is provided to the customer separately of other performance obligations when the equipment is sold. As the customer obtains access at a point in time and continues to have access for the remainder of the warranty term, the customer is considered to simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs. The related revenue is recognized ratably over the specified term of the warranty period. The extended warranty is separate from the Company’s standard warranty that it receives from its vendor, which is typically one year .
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Disaggregation of revenue
In the following tables, revenue is disaggregated by product and service and the timing of revenue recognition.
| For the Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Products and services | |||||||||||
| SaaS | $ | $ | |||||||||
| Equipment | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
| Timing of revenue recognition | |||||||||||
| Products transferred at a point in time | $ | $ | |||||||||
| Services transferred over time | |||||||||||
| $ | $ | ||||||||||
| For the Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Products and services | |||||||||||
| SaaS | $ | $ | |||||||||
| Equipment | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
| Timing of revenue recognition | |||||||||||
| Products transferred at a point in time | $ | $ | |||||||||
| Services transferred over time | |||||||||||
| $ | $ | ||||||||||
Contract balances
The deferred revenue at June 30, 2026 and December 31, 2025 was $1,195 and $1,661 , respectively, and primarily consists of revenue to be earned that is recognized over time for software license contracts and hosted subscription services. The changes in these balances are related to purchases of a predetermined number of transactions, partially offset by the satisfaction or partial satisfaction of these contracts. Of the December 31, 2025 balance, $1,541 was recognized as revenue in the six months ended June 30, 2026. Accounts receivable, net of allowance for credit losses, at June 30, 2026 and December 31, 2025 was $2,660 and $3,365 , respectively. The allowance for credit losses at June 30, 2026 and December 31, 2025 was $157
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Transaction price allocated to the remaining performance obligations
The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period:
| Remainder 2026 | 2027 | 2028 | Total | ||||||||||||||||||||
| SaaS | $ | $ | $ | $ | |||||||||||||||||||
| Other | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
All consideration from contracts with customers is included in the amounts presented above and is classified as a short term liability.
Business Concentrations and Credit Risk
Financial instruments, which subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company maintains cash with three financial institutions. The Company performs periodic evaluations of the relative credit standing of these institutions.
The Company’s sales are principally made to large retail customers, financial institutions concentrated in the United States of America and to U.S. government entities. The Company performs ongoing credit evaluations, generally does not require collateral, and establishes an allowance for credit losses based upon factors surrounding the credit risk of customers, historical trends, and other market and economic information.
During the six-month period ended June 30, 2026, the Company made sales to three customers that accounted for approximately 56 % of total revenues, 29 %, 16 % and 11 %, respectively, for each customer. The revenue was primarily associated with commercial identity sales customers. These three customers represented 55 % of total accounts receivable at June 30, 2026, 0 %, 37 %, and 18 %, respectively, for each customer. During the six-month period ended June 30, 2025, the Company made sales to three customers that accounted for approximately 58 % of total revenues, 31 %, 18 % and 9 %, respectively for each customer. These three customers represented 42 % of total accounts receivable at June 30, 2025, 2 %, 34 %, and 6 %, respectively, for each customer.
The Company was recently informed by its customer representing 29 % of revenue for the six months ending June 30, 2026, as part of a vendor-resilience initiative, the customer is transitioning certain identity verification use cases to an alternative vendor under a primary/secondary vendor architecture in which the Company will remain the primary provider for certain use cases and will retain secondary or failover roles for certain of the transitioned use cases. The first phase of the transition commenced June 30, 2026 and did not materially affect the results for the periods presented. The customer’s communicated plans indicate a reduction of approximately 70 %–75 % in its transaction volumes with the Company during the second half of 2026 relative to the baseline reflected in those plans; the customer has indicated its plans are dependent on the alternative vendor’s performance and may be adjusted. The Company’s agreement with this customer is transaction-based and does not contain minimum purchase commitments. This customer accounted for approximately 30 % of total revenue for the three months ended June 30, 2026, and approximately 31 % for the year ended December 31, 2025, and approximately none of accounts receivable at June 30, 2026. The Company assessed whether the expected volume reductions constituted an indicator that the carrying amount of its long-lived assets, including capitalized software development costs, may not be recoverable as of June 30, 2026, and concluded that no such indicator was present. The Company expects the transition to materially reduce its revenue in future periods; the Company’s expectations assume the customer implements its current plan as communicated and that no volumes are added above the levels reflected in that plan. See Part I, Item 2. As of August 13, 2026, the transition was underway and 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.
Net Income (Loss) Per Share
Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of shares of common stock and potentially
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dilutive common stock equivalents outstanding during the period. The dilutive effect of outstanding options and restricted stock is reflected in diluted earnings per share by application of the treasury stock method. The calculation of diluted net loss per share excludes all anti-dilutive shares. In periods of a net loss, all common stock equivalents are considered anti-dilutive.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average common shares – | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
| Income (loss) per common share | |||||||||||||||||||||||
| Basic/Diluted | $ | $ | ( | $ | $ | ( | |||||||||||||||||
The following table summarizes the common stock equivalents excluded from net income (loss) per diluted share because their effect would be anti-dilutive:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Stock options | |||||||||||||||||||||||
| Restricted stock units | |||||||||||||||||||||||
Segment Information
The Company adheres to the provisions of ASC 280, Segment Reporting. The Chief Executive Officer, as the chief operating decision maker ("CODM"), reviews the financial information presented for purposes of allocating resources and evaluating its financial performance. The key measure that the CODM uses to allocate resources and in assessing performance is the Company's net income (loss). Accordingly, the Company has determined that it operates in a single reportable segment. All of the Company’s assets are located in the United States. Since the Company operates in one
3. CASH AND CASH EQUIVALENTS
Short-term investments include investments in U.S. treasury notes. Short-term investments with original maturities of approximately three months or less from the date of purchase are classified within cash and cash equivalents. Debt
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investments with original maturities at the date of purchase greater than approximately three months but less than one year are classified as short-term investments, as they represent the investment of cash available for current operations.
As of June 30, 2026 | |||||||||||||||||||||||
| Amortized cost | Gross unrealized holding gains | Gross unrealized holding losses | Estimated fair value | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | — | $ | — | $ | |||||||||||||||||
Total cash and cash equivalents | $ | $ | — | $ | — | $ | |||||||||||||||||
| As of December 31, 2025 | |||||||||||||||||||||||
| Amortized cost | Gross unrealized holding gains | Gross unrealized holding losses | Estimated fair value | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | — | $ | — | $ | |||||||||||||||||
Total cash and cash equivalents | $ | $ | — | $ | — | $ | |||||||||||||||||
4. PROPERTY AND EQUIPMENT, NET
Property and equipment, net is summarized as follows:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Computer equipment and software | $ | $ | |||||||||
| Furniture and fixtures | |||||||||||
| Office equipment | |||||||||||
| Less – Accumulated depreciation | ( | ( | |||||||||
| $ | $ | ||||||||||
Depreciation expense for the six months ended June 30, 2026 and 2025 amounted to $102 and $95 , respectively. Depreciation expense for the three months ended June 30, 2026 and 2025 amounted to $49 and $47 , respectively.
5. INTANGIBLE ASSETS, NET
The changes in the carrying amount of intangible assets, net for the six months ended June 30, 2026 were as follows:
| Net balance at December 31, 2025 | $ | ||||
| Addition | |||||
| Deduction: Amortization expense | ( | ||||
| Net balance at June 30, 2026 | $ | ||||
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The following tables set forth the components of intangible assets as of June 30, 2026 and December 31, 2025:
| As of June 30, 2026 | |||||||||||||||||||||||
| Estimated Useful Life | Adjusted Carrying Amount | Accumulated Amortization | Net | ||||||||||||||||||||
| Patents and copyrights | $ | $ | ( | $ | |||||||||||||||||||
| Developed technology | ( | ||||||||||||||||||||||
| Software development | $ | $ | ( | $ | |||||||||||||||||||
| $ | $ | ( | $ | ||||||||||||||||||||
| As of December 31, 2025 | |||||||||||||||||||||||
| Estimated Useful Life | Adjusted Carrying Amount | Accumulated Amortization | Net | ||||||||||||||||||||
| Patents and copyrights | $ | $ | ( | $ | |||||||||||||||||||
| Developed technology | ( | ||||||||||||||||||||||
| Software development | $ | $ | ( | ||||||||||||||||||||
| $ | $ | ( | $ | ||||||||||||||||||||
The following summarizes amortization of intangible assets included in the accompanying condensed Statements of Operations:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Cost of revenues | $ | $ | $ | $ | |||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||
| $ | $ | ||||||||||||||||||||||
The Company's estimated future amortization expense for intangible assets as of June 30, 2026 was as follows:
| 2026 | |||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| $ | |||||
6. DEBT
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7. ACCRUED EXPENSES
Accrued expenses are comprised of the following:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Professional fees | $ | $ | |||||||||
| Payroll and related | |||||||||||
| Incentive bonuses | |||||||||||
| Sales tax accrual and other | |||||||||||
| $ | $ | ||||||||||
8. INCOME TAXES
The Company maintains a full valuation allowance against its deferred tax assets, as management has concluded that it is not more‑likely‑than‑not that such assets will be realized. Although the Company generated pretax income during the current quarter, no income tax expense has been recognized, as the tax effect of current‑period taxable income is fully offset by the valuation allowance. The Company evaluates the realizability of its deferred tax assets each reporting period based on all available positive and negative evidence, including historical operating results and expectations of future taxable income. Although the Company has returned to profitability, management has concluded that a full valuation allowance against its deferred tax assets continues to be appropriate as of June 30, 2026. If the Company continues to generate sustained profitability and sufficient positive evidence becomes available, management may conclude in a future period that some or all of the valuation allowance is no longer necessary. Any such release would result in the recognition of a non-cash income tax benefit that could be material to the Company's results of operations in the period of release. Our available net operating loss (“NOL”) as of December 31, 2025 was approximately $30,520 , of which $10,892 expires between 2035 and 2037. The remaining $19,628 was generated after 2017 and may be carried forward indefinitely, subject to an annual limitation of 80% of taxable income under the Tax Cuts and Jobs Act of 2017.
The Company also had state NOL carryforwards of approximately $3,670 as of December 31, 2025, which expire at various dates depending on the jurisdiction.
The Company had federal research and development tax credit carryforwards of approximately $682 as of December 31, 2025, which expire at various dates through 2041 if not utilized.
9. STOCKHOLDERS' EQUITY
Stock-based Compensation
To retain and attract qualified personnel necessary for the success of the Company, the Company adopted the 2025 Omnibus Incentive Plan (the “Plan”) covering up to 2,000,000 of the Company’s common shares, pursuant to which officers, directors, key employees and consultants to the Company are eligible to receive incentive stock options, nonqualified stock options and restricted stock units. All the equity compensation plans prior to the Plan have been closed. The Compensation Committee of the Board of Directors administers this Plan and determines the terms and conditions of stock options granted, including the exercise price. The Plan generally provides that all stock options will expire within ten years of the date of grant. Incentive stock options granted under the Plan must be granted at an exercise price that is not less than the fair market value per share at the date of the grant and the exercise price must not be less than 110 % of the fair market value per share at the date of the grant for grants to persons owning more than 10 % of the voting stock of the Company. The Plan also entitles non-employee directors to receive grants of non-qualified stock options and restricted stock units as approved by the Board of Directors.
The Company accounts for the issuance of stock-based awards to employees and non-employee directors in accordance with ASC Topic 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
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companies to apply a fair value based measurement method in accounting for all stock-based compensation payment transactions with employees. All stock-based compensation is included in operating expenses as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Compensation cost recognized: | |||||||||||||||||||||||
| Selling, general and administrative | $ | $ | $ | $ | |||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
Stock Options
The Company uses the Black-Scholes option pricing model to value the options on the grant date. The table below presents the weighted average expected life of the stock options in years. The Company uses the simplified method for all stock options to estimate the expected life of the option and assumes that stock options will be exercised evenly over the period from vesting until the awards expire. Volatility is determined using changes in historical stock prices. The interest rate for periods within the expected life of the award is based on U.S. Treasury yield curve in effect on the grant date. Options, generally, vest from one year to four years . The compensation expense is recognized over the requisite service period on a straight-line basis, reduced by forfeitures as they occur.
Stock option activity under the Plan during the period indicated below is as follows:
| Number of Shares Subject to Issuance | Weighted- average Exercise Price | Weighted- average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||||||||
| Outstanding at December 31, 2025 | $ | $ | |||||||||||||||||||||
| Granted | – | – | |||||||||||||||||||||
| Forfeited, cancelled, or expired | ( | – | – | ||||||||||||||||||||
| Exercised | ( | — | — | ||||||||||||||||||||
| Outstanding at June 30, 2026 | $ | $ | |||||||||||||||||||||
| Exercisable at June 30, 2026 | $ | $ | |||||||||||||||||||||
The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they all exercised their options on June 30, 2026. This amount changes based upon the fair market value of the Company’s stock.
Restricted Stock Units (RSUs)
The Company periodically issues RSUs which are equity-based instruments that are settled in shares of common stock of the Company. The Company issues RSUs to certain directors as compensation.
The compensation expense incurred by the Company for RSUs is based on the closing market price of the Company’s common stock on the date of grant, is amortized on a straight-line basis over the requisite service period and
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charged to operating expenses with a corresponding increase to additional paid-in capital, reduced by forfeitures when they occur.
RSU activity during the period indicated below is as follows:
| Number of RSUs | Weighted Average Grant Date Fair Value | ||||||||||
| Outstanding at December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Vested and settled in shares | ( | ||||||||||
| Outstanding at June 30, 2026 | $ | ||||||||||
As of June 30, 2026, there was approximately $2,520 of total unrecognized compensation costs, related to all unvested stock options and RSUs. These costs are expected to be recognized as compensation expense over a weighted-average period of approximately 2.37 years.
The Company had 1,397,202 shares available for future grants under the Company's equity compensation plans at June 30, 2026.
10. COMMITMENTS AND CONTINGENCIES
Leases
The Company leases an office in Melville, New York, on a month-to-month basis. Rent expense, which includes utilities, was $4 and $7 for the three months ended June 30, 2026 and 2025, respectively, and $10 and $14 for the six months ended June 30, 2026 and 2025, respectively, and is included in selling, general and administrative expenses on the condensed Statements of Operations.
Loss Contingencies and Legal Costs
The Company accrues loss contingencies that are believed to be probable and can be reasonably estimated. As events evolve during the administration and litigation process and additional information becomes known, the Company reassesses its estimates related to loss contingencies. Legal costs are expensed in the period in which the costs are incurred.
Legal Proceedings
The Company is not aware of any infringement by our products or technology on the proprietary rights of others.
From time to time, the Company may be involved in lawsuits, claims, investigations and proceedings, consisting of intellectual property, commercial, employment and other matters, which arise in the ordinary course of business. In accordance with GAAP, the Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, ruling, advice of legal counsel and other information and events pertaining to a particular case. Litigation is inherently unpredictable. If any unfavorable ruling was to occur in any specific period or if a loss becomes probable and estimable, there exists the possibility of a material adverse impact on the Company’s results of operations, financial position or cash flows. As of June 30, 2026, no material amounts are recorded related to legal proceedings on the balance sheets.
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, the Company 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.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (All dollar amounts are rounded to thousands, except shares and per share data)
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, income (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. References made in this Quarterly Report on Form 10-Q to “we,” “our,” “us,” “Intellicheck,” or the “Company,” refer to Intellicheck, Inc.
The following discussion and analysis of our financial condition and results of operations constitutes management’s review of the factors that affected our financial and operating performance for the three and six months ended June 30, 2026. This discussion should be read in conjunction with the financial statements and notes thereto contained elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2025.
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.
Recent Developments — Customer’s Multi-Vendor Transition.
Our customer, representing 29% of total revenue for the first six months of 2026, 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. 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. In communicating its plans, the customer cited objectives that included improving vendor resilience, supplier rationalization in connection with its previously announced merger, cost considerations and, for a separate portion of the transition, workflow automation. This customer accounted for approximately 30% of our total revenue for the three months ended June 30, 2026 and approximately 31% for the year ended December 31, 2025.
The customer’s communicated plans 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, with implementation scheduled to proceed on a phased basis through the third quarter of 2026. As of August 13, 2026, the implementation 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 current plan. The timing and extent of future reductions remain uncertain, and we believe may be affected by a number of factors, including the performance of the alternative vendor, the customer’s evolving operational requirements and any adjustments the customer may make to its current plans. Accordingly, actual transaction volumes may be higher or lower than the levels indicated by the customer’s current plans. Assuming the customer implements its current plan substantially as communicated and no volumes are added above the levels reflected in that plan, we currently expect total revenue for the year ending December 31, 2026 to decline compared to 2025. These expectations are based on the customer’s current communicated plan and its indicated implementation schedule and are subject to change based on actual transaction volumes and other developments. The volume reductions observed to date have been smaller than the customer’s plan contemplates and we remain engaged with the customer in ongoing discussions regarding current services and potential future business opportunities. We expect to continue to be an important vendor to the customer. Notwithstanding the anticipated decline, we currently expect to remain profitable on a net income basis, and to generate positive Adjusted EBITDA, for the year ending December 31, 2026.
These expectations are forward-looking statements subject to the risks described in Part II, Item 1A, including the risks that the customer’s transition proceeds faster, extends further or results in greater volume reductions than its current plans indicate; that use cases for which we remain the primary provider are subsequently transitioned; that any retained or
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restored volumes are at lower levels or pricing than anticipated; that certain transitioned use cases do not retain us in a secondary or failover role or generate little or no transaction volume.
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), the fair value of stock options under our stock-based compensation plans and the valuation allowance of our deferred tax assets. Due to the inherent uncertainties involved in making estimates, actual results reported in future periods may be different from those estimates.
Recent Accounting Pronouncements
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. We adopted ASU 2025-05 in the first quarter of 2026. The adoption did not have a material impact on our condensed financial statements and related disclosures.
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 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.
Revenue Recognition and Deferred Revenue
SaaS fees and service revenue 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 the Company’s software. Under the fixed-price revenue model customers are charged a fixed monthly fee either per device or physical business location to access the Company’s software. Under ASC 606, 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. The Company measures revenue based on the consideration specified in a customer arrangement, and revenue is recognized when the performance obligations in an arrangement are satisfied. A performance obligation is a promise in a contract to transfer a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when, or as, the customer receives the benefit of the performance obligation. Customers typically receive the benefit of the Company’s services as they are performed. The Company's performance obligations are satisfied over time, and as a result, the Company may follow the right to invoice practical expedient meaning we recognize revenue monthly as invoiced based on our contract terms. Reference Note 2, “Significant Accounting Policies,” in the Notes to Unaudited Condensed Financial Statements for additional details on the Company’s recognized and deferred revenue.
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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 Unaudited Condensed 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 June 30, 2026, the balances of property and equipment, goodwill and intangible assets, all net of accumulated depreciation and amortization, were $351, $8,102 and $1,798, respectively. 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. Reference Note 2, “Significant Accounting Policies”; Note 4, “Property and Equipment, Net”; and Note 5, “Intangible Assets, net” in the Notes to Financial Statements of the December 31, 2025 audited 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 begin to 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.
The above listing is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by generally accepted accounting principles, with no need for management’s judgment in their application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result.
Results of Operations
(All dollar amounts are rounded to thousands, except share and per share data)
COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 2026
TO THE THREE MONTHS ENDED JUNE 30, 2025
Revenues for the three months ended June 30, 2026 increased $818, or 16%, to approximately $5,941 compared to $5,123 for the same period of 2025. The increase in revenues is primarily the result of higher SaaS revenue for the current period. SaaS revenue, which consists of software licensed as a service on a subscription basis, increased $841 or 17% to $5,921 for the three months ended June 30, 2026 compared to $5,080 for the same period of 2025.
Gross profit increased $824, or 18%, to $5,424 for three months ended June 30, 2026 from $4,600 for the same period of 2025. Our gross profit, as a percentage of revenues, was 91% and 90% for the three months ended June 30, 2026 and 2025, respectively.
Operating expenses, which consist of selling, general and administrative and research and development expenses, decreased $47, or 1%, to $4,851 for the three months ended June 30, 2026 compared to $4,898 for the same period of 2025. The decrease in operating expenses is primarily the result of a lower headcount in the three-month period ended June 30, 2026.
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As a result of the factors noted above, the Company had a net income of $663 for the three months ended June 30, 2026 as compared to a net loss of $(251) for the three months ended June 30, 2025.
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2026
TO THE SIX MONTHS ENDED JUNE 30, 2025
Revenues for the six months ended June 30, 2026 increased $1,448, or 14%, to approximately $11,465 compared to $10,017 for the same period of 2025. The increase in revenues is primarily the result of higher transaction volumes for SaaS for the current period. SaaS revenue, which consists of software licensed as a service on a subscription basis, increased $1,487 or 15% to $11,435 for the six months ended June 30, 2026 compared to $9,948 for the same period of 2025.
Gross profit increased $1,457, or 16%, to $10,449 for six months ended June 30, 2026 from $8,992 for the same period of 2025. Our gross profit, as a percentage of revenues, was 91% and 90% for the six months ended June 30, 2026 and 2025, respectively.
Operating expenses, which consist of selling, general and administrative and research and development expenses, decreased $304, or 3%, to $9,334 for the six months ended June 30, 2026 compared to $9,638 for the same period of 2025. The decrease in operating expenses is primarily the result of a lower headcount in the six-month period ended June 30, 2026.
As a result of the factors noted above, the Company had a net income of $1,299 for the six months ended June 30, 2026 as compared to a net loss of $(569) for the six months ended June 30, 2025.
Liquidity and Capital Resources
As of June 30, 2026, we had cash and cash equivalents of $11,837, working capital (defined as current assets minus current liabilities) of $12,237, total assets of $25,565 and stockholders’ equity of $22,489.
During the six months ended June 30, 2026, we generated cash of $2,242 in operating activities as compared to net cash of $3,884 generated from operating activities in the six months ended June 30, 2025. Cash used in investing activities was $(59) for the six months ended June 30, 2026 compared to cash used in investing activities of $(232) for the six months ended June 30, 2025. Cash provided by financing activities was $4 for the six months ended June 30, 2026 compared to net cash of $255 provided by financing activities for the six months ended June 30, 2025.
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 this report.
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. 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.
The specific terms of any future offering, including the prices and use of proceeds, will be determined at the time of any such offering and will be described in detail in a prospectus supplement which will be filed with the SEC at the time of the offering.
We are not currently involved in any legal or regulatory proceeding, or arbitration, the outcome of which is expected to have a material effect on our business.
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. The remaining $19,628 was generated after 2017 and may be carried forward indefinitely, subject to an annual limitation of 80% of taxable income under the Tax Cuts and Jobs Act of 2017.
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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.
The reconciliation of GAAP gross profit to Non-GAAP Adjusted Gross Profit is as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Revenues | $ | 5,941 | $ | 5,123 | $ | 11,465 | $ | 10,017 | |||||||||||||||
Cost of revenues, exclusive of amortization | 380 | 402 | 742 | 800 | |||||||||||||||||||
| Amortization allocable to cost of revenues | 137 | 121 | 274 | 225 | |||||||||||||||||||
Gross profit | 5,424 | 4,600 | 10,449 | 8,992 | |||||||||||||||||||
| Add: | |||||||||||||||||||||||
| Amortization allocable to cost of revenues | 137 | 121 | 274 | 225 | |||||||||||||||||||
Adjusted gross profit | 5,561 | 4,721 | 10,723 | 9,217 | |||||||||||||||||||
| Gross profit as a percentage of revenues | 91.3 | % | 89.8 | % | 91.1 | % | 89.8 | % | |||||||||||||||
Adjusted gross profit as a percentage of revenues | 93.6 | % | 92.2 | % | 93.5 | % | 92.0 | % | |||||||||||||||
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 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.
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The reconciliation of GAAP net income (loss) to Non-GAAP Adjusted EBITDA is as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income (loss) | $ | 663 | $ | (251) | $ | 1,299 | $ | (569) | |||||||||||||||
| Reconciling items: | |||||||||||||||||||||||
Other income, net | (90) | (47) | (184) | (77) | |||||||||||||||||||
| Depreciation and amortization | 188 | 171 | 381 | 325 | |||||||||||||||||||
| Stock-based compensation | 289 | 202 | 489 | 379 | |||||||||||||||||||
| Adjusted EBITDA | $ | 1,050 | $ | 75 | $ | 1,985 | $ | 58 | |||||||||||||||
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet financing arrangements and have not established any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable to smaller reporting companies.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 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.
Part II - Other Information
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Item 1. LEGAL PROCEEDINGS
While we are not currently involved in any legal proceedings that we believe will have a material adverse effect on our financial position or results of operations, from time-to-time we are, and we anticipate that we will be, involved in legal proceedings, claims, and litigation arising in the ordinary course of our business and otherwise. The ultimate costs to resolve any such matters could have a material adverse effect on our financial statements. The Company’s management believes, based on current information, matters currently pending or threatened are not expected to have a material adverse effect on the Company’s consolidated financial position or results of operations.
Item 1A. RISK FACTORS
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.
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.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
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Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
Item 5. OTHER INFORMATION
Insider Adoption or Termination of Trading Arrangements:
During the three-months ended June 30, 2026, none of our directors or officers informed us of the adoption termination
Item 6. EXHIBITS
(a)The following exhibits are filed as part of the Quarterly Report on Form 10-Q:
| Exhibit No. | Description | |||||||
| 3.1 | Second Amended and Restated Bylaws of Intellicheck, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on July 23, 2026) | |||||||
31.1* | Rule 13a-14(a) Certification of Chief Executive Officer | |||||||
31.2* | Rule 13a-14(a) Certification of Chief Financial Officer | |||||||
32* | 18 U.S.C. Section 1350 Certifications | |||||||
101.INS* | XBRL Instance Document | |||||||
101.SCH* | XBRL Taxonomy Extension Schema | |||||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase | |||||||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase | |||||||
101.LAB* | XBRL Taxonomy Extension Label Linkbase | |||||||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase | |||||||
104* | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) | |||||||
*Filed herewith.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: | August 13, 2026 | INTELLICHECK, INC. | |||||||||
| By: | /s/ Bryan Lewis | ||||||||||
| Bryan Lewis | |||||||||||
| President and Chief Executive Officer | |||||||||||
| (Principal Executive Officer) | |||||||||||
| By: | /s/ Adam Sragovicz | ||||||||||
| Adam Sragovicz | |||||||||||
| Chief Financial Officer | |||||||||||
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