idn-20240630

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, 2024


☐			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

Intellicheck, Inc.

(Exact name of Registrant as specified in its charter)


Delaware						11-3234779
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

200 Broadhollow Road, Suite 207, Melville, NY 11747
(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

Common stock, $0.001 par value per share

IDN

The Nasdaq Stock Market LLC

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

☐

Non-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 14, 2024, there were 19,533,901 shares of Common Stock, $0.001 par value, outstanding.


			Page
PART I – FINANCIAL INFORMATION			3

Item 1. Unaudited Condensed Financial Statements			3

Condensed Balance Sheets – June 30 , 2024 (Unaudited) and December 31, 2023			3

Unaudited Condensed Statements of Operations for the three and si x months ended June 30 , 2024 and 2023			4

Unaudited Condensed Statements of Stockholders’ Equity for the three and six months ended June 30, 2024 and 2023			6

Unaudited Condensed Statements of Cash Flows for the six months ended June 30 , 2024 and 2023			7

Notes to Unaudited Condensed Financial Statements			8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			23

Item 3. Quantitative and Qualitative Disclosures About Market Risk			27

Item 4. Controls and Procedures			27

Part II – OTHER INFORMATION			28

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			28

Item 4. Mine Safety Disclosures			29

Item 5. Other Information			29

Item 6. Exhibits			29

Signatures			30


31.1			Rule 13a-14(a) Certification of Chief Executive Officer
31.2			Rule 13a-14(a) Certification of Chief Financial Officer
32			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)


	June 30, 2024		December 31, 2023
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	7,260	$	3,980
Short-term investments	—		5,000
Accounts receivable, net of allowance for credit losses of $87 and $69 at June 30, 2024 and December 31, 2023, respectively	3,315		4,703
Other current assets	645		692
Total current assets	11,220		14,375

PROPERTY AND EQUIPMENT, NET	592		666
GOODWILL	8,102		8,102
INTANGIBLE ASSETS, NET	1,912		575
OTHER ASSETS	90		90
Total assets	$	21,916	$	23,808

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:
Accounts payable	$	909	$	884
Accrued expenses	1,902		3,245
Equity awards liability	—		4
Liability for shares withheld	—		190
Deferred revenue	1,798		2,209
Total current liabilities	4,609		6,532

Total liabilities	4,609		6,532

COMMITMENTS AND CONTINGENCIES (Note 10)

STOCKHOLDERS’ EQUITY:
Preferred stock - $0.01 par value; 30,000 shares authorized; Series A convertible preferred stock, zero shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	—		—
Common stock - $0.001 par value; 40,000,000 shares authorized;19,492,702 and 19,354,335 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	19		19
Additional paid-in capital	151,422		150,822
Accumulated deficit	(134,134)		(133,565)
Total stockholders’ equity	17,307		17,276

Total liabilities and stockholders’ equity	$	21,916	$	23,808


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023

REVENUES	$	4,672	$	4,716	$	9,352	$	8,970
COST OF REVENUES	(444)		(352)		(879)		(684)
Gross profit	4,228		4,364		8,473		8,286

OPERATING EXPENSES
Selling, general and administrative	3,608		3,937		7,544		7,931
Research and development	835		1,276		1,653		2,584
Total operating expenses	4,443		5,213		9,197		10,515

Loss from operations	(215)		(849)		(724)		(2,229)

OTHER INCOME
Interest and other income	88		—		157		1
Total other income	88		—		157		1

Net loss before provision for income taxes	(127)		(849)		(567)		(2,228)
Provision for income taxes	—		4		2		12

Net loss	$	(127)	$	(853)	$	(569)	$	(2,240)

PER SHARE INFORMATION
Loss per common share -
Basic/Diluted	$	(0.01)	$	(0.04)	$	(0.03)	$	(0.12)

Weighted average common shares used in computing per share amounts -
Basic/Diluted	19,460,351		19,120,327		19,380,605		19,168,534


	Three months ended June 30, 2024
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount

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

Stock-based compensation	–	–		256		–		256
Stock option exercises, net of cashless exercises	4,875	–		–		–		—
Issuance of shares for vested restricted stock grants	83,266	–		–		–		–
Net loss	–	–		–		(127)		(127)
BALANCE, June 30, 2024	19,492,702	$	19	$	151,422	$	(134,134)	$	17,307


	Three months ended June 30, 2023
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount

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

Stock-based compensation	–	–		338		–		338
Issuance of shares for vested restricted stock grants	60,777	–		–		–		–
Shares forfeited in exchange for withholding taxes	(24,720)	–		(54)		—		(54)
Net loss	–	–		–		(853)		(853)
BALANCE, June 30, 2023	19,251,920	$	19	$	150,159	$	(133,825)	$	16,353


	Six months ended June 30, 2024
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount

BALANCE, December 31, 2023	19,354,335	$	19	$	150,822	$	(133,565)	$	17,276

Stock-based compensation	–	–		600		–		600
Stock option exercises, net of cashless exercises	4,875	–		–		–		—
Issuance of common stock for vested restricted stock units and earned performance stock units	133,492	–		–		–		–
Net loss	–	–		–		(569)		(569)
BALANCE, June 30, 2024	19,492,702	$	19	$	151,422	$	(134,134)	$	17,307


	Six months ended June 30, 2023
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount

BALANCE, December 31, 2022	18,957,366	$	19	$	149,233	$	(131,585)	$	17,667

Stock-based compensation	–	–		980		–		980
Issuance of common stock for vested restricted stock units and earned performance stock units	319,274	–		–		–		–
Shares forfeited in exchange for withholding taxes	(24,720)	–		(54)		–		(54)
Net loss	–	–		–		(2,240)		(2,240)
BALANCE, June 30, 2023	19,251,920	$	19	$	150,159	$	(133,825)	$	16,353


•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 as well as short-term investments totaling $7,260 and $8,980 as of June 30, 2024 and December 31, 2023, respectively.
•Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active). Level 2 includes financial instruments that are valued using models or other valuation methodologies. The Company had $0 and $4 of Level 2 liabilities as of June 30, 2024 and December 31, 2023, respectively, for the liability-classified stock options. The fair value of these awards were determined by utilizing a Black-Scholes option pricing model.
•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, 2024 and December 31, 2023.


	For the Three Months Ended June 30,
	2024		2023
Products and services

Software as a Service (SaaS)	$	4,627	$	4,663
Equipment	40		31
Other	5		22
	$	4,672	$	4,716

Timing of revenue recognition

Products transferred at a point in time	$	45	$	53
Services transferred over time	4,627		4,663
	$	4,672	$	4,716


	Six months ended June 30,
	2024		2023

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(569)	$	(2,240)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	145		139
Stock-based compensation	405		1,005
Allowance for credit losses	18		16
Change in accrued interest and accretion of discount on short-term investments	—		(2)
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable	1,371		(133)
Decrease (Increase) in other current assets and long-term assets	47		(178)
(Decrease) Increase in accounts payable and accrued expenses	(1,318)		125
(Decrease) Increase in deferred revenue	(411)		412
Net cash used in operating activities	(312)		(856)


CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(19)		(31)
Proceeds from maturity of short-term investments	5,000		—
Software development costs	(1,389)		—
Net cash provided by (used in) investing activities	3,592		(31)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of insurance financing arrangement	—		49
Withholding taxes paid on RSU vesting	—		(54)
Repayment of insurance financing arrangements	—		(119)
Net cash used in financing activities	—		(124)

Net increase (decrease) in cash	3,280		(1,011)

CASH, beginning of period	3,980		5,196

CASH, end of period	$	7,260	$	4,185

Supplemental disclosures of cash flow information:
Cash paid for interest	$	—	$	2
Cash paid for income taxes	$	—	$	87


	June 30, 2024		December 31, 2023
Computer equipment and software	$	1,904	$	1,886
Furniture and fixtures	139		139
Office equipment	618		618
	2,661		2,643
Less – Accumulated depreciation	(2,069)		(1,977)
	$	592	$	666


Net balance at December 31, 2023	$	575
Addition: Capitalized software costs	1,389
Deduction: Amortization expense	(52)
Net balance at June 30, 2024	$	1,912


		As of June 30, 2024
	Estimated Useful Life	Adjusted Carrying Amount		Accumulated Amortization		Net

Patents and copyrights	2-17 years	$	375	$	(313)	$	62
Developed technology	5 years	400		(347)		53
Software development	—	$	1,797	$	—	$	1,797
		$	2,572	$	(660)	$	1,912


	For the Six Months Ended June 30,
	2024		2023
Products and services

Software as a Service (SaaS)	$	9,236	$	8,891
Equipment	95		46
Other	21		33
	$	9,352	$	8,970

Timing of revenue recognition

Products transferred at a point in time	$	116	$	79
Services transferred over time	9,236		8,891
	$	9,352	$	8,970


	Remainder 2024		2025		2026		Total

Software as a Service (SaaS)	$	1,376	$	421	$	—	$	1,797
Other	1		—		—		1
	$	1,377	$	421	$	—	$	1,798


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator:
Net Loss	$	(127)	$	(853)	$	(569)	$	(2,240)

Denominator:
Weighted average common shares –
Basic/Diluted	19,460,351		19,120,327		19,380,605		19,168,534

Net Loss per share –
Basic/Diluted	$	(0.01)	$	(0.04)	$	(0.03)	$	(0.12)


	As of June 30, 2024
	Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses		Estimated fair value

Cash and cash equivalents	$	7,260	$	—	$	—	$	7,260
U.S. treasury notes	—		—		—		—
Total cash, cash equivalents and short-term investments	$	7,260	$	—	$	—	$	7,260


	As of December 31, 2023
	Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses		Estimated fair value

Cash and cash equivalents	$	3,980	$	—	$	—	$	3,980
U.S. treasury notes (1)	5,000		—		—		5,000
Total cash, cash equivalents and short-term investments	$	8,980	$	—	$	—	$	8,980


	June 30, 2024		December 31, 2023
Professional fees	$	99	$	1
Payroll and related	599		1,159
Incentive bonuses	590		824
Sales tax accrual	557		1,064
Other	57		197
	$	1,902	$	3,245


	Number of Shares Subject to Issuance	Weighted- average Exercise Price		Weighted- average Remaining Contractual Term	Aggregate Intrinsic Value

Outstanding at December 31, 2023	1,152,714	$	3.07	3.18 years	$	38
Granted	519,750	1.92		–	–
Forfeited, cancelled, or expired	(184,582)	2.68		–	–
Exercised	(4,875)	$	2.02	—	—
Outstanding at June 30, 2024	1,483,007	$	2.05	2.10 years	$	852

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


	Number of RSUs	Weighted Average Grant Date Fair Value

Outstanding at December 31, 2023	60,500	$	4.23
Granted	166,343	2.22
Vested and settled in shares	(133,492)	3.31

Outstanding at June 30, 2024	93,351	$	1.96


	Three Months Ended June 30				Six Months Ended June 30
	2024		2023		2024		2023

Net loss	$	(127)	$	(853)	$	(569)	$	(2,240)
Reconciling items:
Non-restructuring severance expenses	—		417		—		417
Provision for income taxes	—		4		2		12
Interest and other income	(88)		—		(157)		(1)
Sales tax accrual	—		76		—		147
Depreciation and amortization	73		69		145		139
Stock-based compensation including liability classified awards	72		323		405		1,005

Adjusted EBITDA	$	(70)	$	36	$	(174)	$	(521)


Exhibit No.						Description

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)

SEC Form 10-Q filed by Intellicheck Inc.