AUID 10-K & 10-Q changes, risk factors and insider trading

There can be no assurance that we will successfully commercialize our products that are currently in development or were recently launched, or that our existing products will sustain market acceptance.

There is no assurance that we will ever successfully commercialize our platform and related solutions or that we will experience market reception for our products in development or increased market reception for our existing products. There is no guarantee that we will be able to successfully implement our new products utilizing the acquired and internally developed technology,and products,licensed technology and customer base.products. There is no assurance that our existing products or solutions will achieve market acceptance or that our new products or solutions will achieve and sustain market acceptance. Further, there can be no guarantee that we will not lose business to our existing or potential new competitors.

On March 23, 2023, RhonRhoniel A. Daguro was appointed as our Chief Executive Officer. Our success depends on the continued services of Mr. Daguro and of certain other members of the current management team. Our executive team is incentivized in part by stock compensation grants that align the interests of investors with the executive team and certain executives have employment retention agreements. The loss of key management, engineering employees or third-party contractors could have a material and adverse effect on our business operations. Additionally, the success of our operations will largely depend upon our ability to successfully attract and maintain competent and qualified key management personnel. As with any company with limited resources, there can be no guarantee that we will be able to attract such individuals or that the presence of such individuals will necessarily translate into profitability for our company. If we are successful in attracting and retaining such individuals, it is likely that our payroll costs and related expenses will increase significantly and that there will be additional dilution to existing stockholders as a result of equity incentives that may need to be issued to such management personnel. Our inability to attract and retain key personnel may materially and adversely affect our business operations. Any failure by our management to effectively anticipate, implement, and manage personnel required to sustain our growth would have a material adverse effect on our business, financial condition, and results of operations.

Jurisdictions around around the world are developing and passing new regulations that apply specifically to the use of AI. For example, the EU AI Act was adopted adopted in 2024 and will be implemented in phases through 2030, and other jurisdictions are considering similarly focused legislation. These regulations and the evolving AI regulatory environment may, among other impacts, result in inconsistencies among AI regulations and frameworks across jurisdictions, increase our compliance, governance and research and development costs, increase our exposure to claims related to our AI models and increase liability related to the use of AI by our customers or users that are beyond our control. There can be no guarantee that future AI regulationsregulations, or customer requirements relating to AI will not adversely impact us or conflict with our approach to AI, including affecting our ability to make our offerings available without costly changes, delaying or halting development of our offerings, requiring us to change our development practices, go to market strategies and indemnity protections and subjecting us to additional compliance requirements, regulatory action, competitive harm, reputational harm and legal liability. To the extent we rely on third-party AI technologies in our products, services and solutions, we will face risks inherent in how those technologies and their AI models have been developed and deployed.

Furthermore, governmental programs can experience delays or cancellation of funding and suspension of appropriations has occurred, for example the partial United States government shutdown in 2018/19October - November 2025 and current congressional uncertainty over the debt ceiling which could lead to a further shutdown, which can be unpredictable; this may make it difficult to forecast our revenues on a quarter-by-quarter basis.

We depend upon a small number of large sales with contractual commitments ranging from $500,000 up to $10,000,000,$2,000,000, which take longer to close and may result in a concentration of business and unpredictable quarterly revenue.

We derive a substantial portion of our revenues from a small number of sales with large contractual commitments ranging from $500,000 up to $10,000,000.$2,000,000. We have changed the product set of of the business and have developed a new range of software as a service (SaaS) based products and solutions, which are in a lower price range and intended to generate recurring revenue from a large number of customers. We have at the same time changed our marketing focus to target major enterprises, which involve a longer sales cycle but if we are successful in securing contracts with multi-million dollar contractual commitments with such enterprises, we believe that such contracts will generate substantial, sustainable revenue growth. At the same time, we are also focusing our efforts in expanding our channel partner relationships, in the expectation that these will bring additional sales that will be quicker and easier to close. We are still endeavoring to enter into multi-year contracts for our new products with minimum commitments ranging in price from $50,000 to $10,000,000 and we may, or may not, be successful in achieving such sales. If we are successful in securing the major contractual commitments that we are targeting, that may result in concentration of our business amongst a small number of customers, the loss of any one of which could have significant adverse effects on our revenue and financial situation. Additionally, the longer sales and implementation cycle of major enterprises may delay the recognition of revenue and adversely affect our results of operations in the meantime. Some of our large contractual commitments are from enterprises, which are at an early stage of business development and the ramp in their business and processing volumes may be unpredictable. Accordingly, our quarterly results are difficult to predict because we cannot predict in which quarter, if any, substantial sales (whether measured in commitment volumes, or number of contracts) will occur in a given year, nor when (if at all), or at what rate the ramp in sales of new products will occur. As a result, we believe that quarter-to-quarter comparisons of our sales are not a good indication of our future performance. In some future quarters, our sales may be below the expectations of securities analysts and investors, in which case the market price of our Common Stock may decrease significantly.

Overview authID Inc. (together with its subsidiaries, the “Company”, “authID”, “we” or “our”) ensures enterprises “Know Who’s Behind the Device”TM for every customer or employee login and transaction. Throughtransaction, through its easy-to-integrate, patented, biometric identity platform,platform. authID quickly and accurately verifies a user’s identity, eliminating any assumption of ‘who’ is behind a device and preventing cybercriminals from taking over accounts. authID combines digital onboarding,powers biometric passwordlessidentity authenticationproofing, biometric authentication, and account recovery,recovery with a fast, accurate, user-friendly experienceexperience. –With deliveringour identityPrivacyKey™ verificationsolution, inauthID 700ms.provides Establishinga highly accurate abiometric authentication, while storing no biometric root of trust for each user that is bound to their accounts, or provisioned devices,data. authID stops fraud at onboarding, blocks deepfakes, prevents account takeover, and eliminates password risks and costs, and providesthrough the faster, more accuratefrictionless, and privacymost preservingaccurate user identity experience demanded by operatorstoday’s of today’s digital ecosystems.ecosystem.

Biometric identity verification establishes the trusted identity of a user based on a variety of ground truth sources, including government-issued government-issued identity documents such as national IDs, driver’s licenses and passports or electronic machine-readable travel documents (or eMRTDs). Our VerifiedTM platform detects presentation attack and spoofing threats, evaluates the authenticity of security features present on a government-issued identity document, and biometrically matches the reference picture of the document with a live user’s selfie (a photograph that the user has taken of themselves). Usually occurring at account opening or onboarding, identity verification ensures that the enterprise knows that the person interacting with the enterprise is who they say they are, in real time. authID’s ProofTM identity verification product eliminates the need for costly and less accurate face-to-face, in-person ID checks and and instead provides a verified identity in seconds. Additionally, authID’s PrivacyKeyPrivacyKeyTM technology enables customers to perform perform biometric verification through the use of Public/Private Keys that is performed without storing any biometric data, which ensures individual data privacy. In a digital, online world of increasing fraud and security threats, Proof speeds up onboarding and offers our our customers confidence in the identities of consumers, employees or third-party vendors.

Biometric identity authentication provides any organization with a secure, convenient solution to validate that an individual is the verified account owner for various purposes including passwordless login and performing specific transactions, or functions. The authID Verified product allows users to confirm their identity with their facial biometric by simply taking a selfie on a mobile phone or device of their choosing (as opposed to dedicated hardware). The solution includes a patented audit trail created for each transaction, containing the digitally signed transaction details, with proof of identity authentication and consent. Verified allows users to recover, via a facial biometric, account access that is lost or blocked due to expired credentials, lockouts, lost or stolen devices, or compromised accounts. Because the account owner’s root of trust is established in the cloud, recovery is independent of any device or hardware. In this way, account recovery is instant, portable, and does not require the presence of or access to a previously provisioned device in order to secure access from a different device.

The Company’s These consolidated financial statements included in this Annual Report have been prepared in accordance with U.S.accounting principles generally accepted in the United States (“US GAAP”) assuming the Company will continue on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next year following the issuance date of these consolidated financial statements.

As of December 31, 2024,2025, the Company had an accumulated deficit of approximately $173.8$191.7 million. For the year ended December 31, 2024,2025, the Company earned net revenue of approximately $0.9$2.0 million, used $11.6$15.0 million to fund its operations, and incurred a net loss from continuing operations of approximately $14.3$17.9 million.

The continuation of the Company as a going concern is dependent upon financial support from the Company’s stockholders, the ability of the Company to obtain additional debt or equity financing to continue operations, the Company’s ability to generate sufficient revenues and cash flows from operations (both from existing and new customers), andoperations, successfully locating and negotiating with cash generatingother business entities for potential acquisition and acquiring bynew theclients Company.to generate revenues and cash flows. In JuneApril, 2024,May and November 2025, the Company raised a total of approximately $10.0$11.4 million after expenses from existing and new stockholders through the sale of Common Stock pursuant to a registered direct offering.offerings. Going forward, the Company plans to raise additional funds to support its operations and investments as it seeks to create a sustainable organization. Our growth-oriented business plan to offer products to our customers will require continued capital investment and there is no guarantee that such financing will be available, or available on acceptable terms.

There is no assurance that the Company will ever be profitable. These condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. As there can be no assurance that the Company will be able to achieve positive cash flows (become cash flow positive) and raise sufficient capital to maintain operations, there is substantial doubt about the Company’s ability to continue as a going concern. concern for a period of twelve months from the date of these consolidated financial statements were issued.

On June 6, 2023, the Company entered into a services agreement with The Pipeline Group, Inc. (“TPG”). Ken Jisser, a director of the Company, is the founder and CEO of TPG, a technology-enabled services company that aims to deliver business results for companies looking to build a predictable and profitable pipeline. The agreement provides that TPG will assist in providing outsourced sales including business development resources for outbound calling, provide support for automated dialing technology, classify customer data and other sales related services for an initial term of one year. These services and their contracted pricing has been evaluated by Management based on historical experience with similar providers and determined to be priced at fair market rates. On October 25, 2023, on December 19, 2023 and on August 26, 2024, the Company entered into amendments to the above services agreement, pursuant to which TPG will provide certain additional services to the Company. In consideration of the services, the Company will paypaid TPG $70,000 per month. monthOn duringSeptember 26, 2025, the currentCompany termsigned endinganother in June 2025. The foregoing is only a summary of the material terms of the agreements enteredamendment with TPG andto doesreduce notthe purportmonthly fees to be$42,000. The amendment is effective October 1, 2025. On September 30, 2025, the Company entered into a completeservices descriptionagreement with TPG. The agreement provides that the Company will provide biometric authentication services to TPG for an initial term of thetwo rightsyears, with an annual license fee of $2,500 and obligationsmonthly minimum offees the partiesramping thereunder.to $1,000 per month. The summary of the agreement entered with TPG is qualified in its entirety by reference to the forms of such agreements, which were filed as exhibits to certain of the Company’s Currentfilings Reportwith the SEC and are incorporated by reference herein (See “Exhibits”).

On June 26,27, 2024, Mr.Stephen Garchik, a holder of 10% of the outstanding shares, purchased 150,000 shares of the Company’s common stock at a price of $1,125,000. The purchase price of the shares issued in this transaction was the same as the purchase price paid by all other investors in the same round and represented a 24% discount to the Nasdaq Official Closing Price in effect on the date of the transaction.

Since June 2023, the Company has employed Dale Daguro, the brother of our CEO, RhonRhoniel Daguro as a VP Sales. Dale Daguro’s employment is at will and may be terminated at any time, with or without cause. Dale’s compensation is commensurate with other executives employed by the Company at a similar level of seniority and experience. During the year ended December 31, 2024,2025, Dale Daguro earned approximately $255,000 $283,000 in base salary and sales commission.

Software License – The Company recognizes revenue based on the identified performance obligations over the performance period for fixed consideration and / or variable fees generated. Variable fees are typically earned over time based on monthly users andusers, transaction volumes.volumes or a monthly flat fee rate. We allocate the selling price in a contract which has multiple performance obligations based on the contract selling price that we believe represents a fair market price for the service rendered based on estimated standalone selling price. Transaction fees are billed monthly and are constrained to transactions incurred within the month.

For contracts with minimum annual fees, the Company generally recognizes the amount of revenue ratably over the contract year and records contract assets for the amount in excess of monthly contract billings relating to variable contract consideration. For certain contracts, the Company enters into an agreement which stipulates a minimum annual fee which is generally due at the end of the contract year, in excess of the amount of monthly billings. The Company may also require pre-payment or milestone payments of the minimum annual fee. The amount of any billed fees in excess of revenue recognized is recorded as deferred revenue. The companyCompany accounts for any price concessions grantedas reductions to the transaction price under ASC 606. Price concessions represent implied or estimated future reductions in consideration that the Company expects to agrant, based on known facts and circumstances, including customer usage patterns and strategic considerations. These concessions are treated as reductions tovariable consideration underand eachare respectiveincluded contractin and subsequentlythe recognizestransaction revenueprice uponly to the amountextent that it is probable that a significant reversal of thecumulative revisedrevenue considerationwill afternot occur when the concessionuncertainty is provided.resolved. For the years-ended December 31, 2025 and 2024 the Company granted approximately $0.9 million and $0 in concessions respectively.

This discussion includes information about Adjusted EBITDA that is not prepared in accordance with U.S. GAAP. Adjusted EBITDA is not based on any standardized methodology prescribed by U.S. GAAP and is not necessarily comparable to similar measures presented by other companies. A reconciliation of this non-GAAP measure is included below. Adjusted EBITDA is a non-GAAP financial measure that represents GAAP net income (loss) adjusted to exclude (1) interest expense and debt discount and debt issuance costs amortization expense, (2) interest income, (3) provision for income taxes, (4) Amortization, (5) stock-based compensation expense and certain other items management believes affect the comparability of operating results.

Management believes that Adjusted EBITDA, when viewed with our results under U.S. GAAP and the accompanying reconciliations, provides useful information about our period-over-period results. Adjusted EBITDA is presented because management believes it provides additional information with respect to the performance of our fundamental business activities and is also frequently used by securities analysts, investors and other interested parties in the evaluation of comparable companies. We also rely on Adjusted EBITDA as a primary measure to review and assess the operating performance of our company and our management, and it will be a focus as we invest in and grow the business.

Because of these limitations, adjustedAdjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our U.S. GAAP results and using Adjusted EBITDA only as a supplement to our U.S. GAAP results.

The increase in Adjusted EBITDA Loss From ContinuingOperations Operations in 20242025 compared to 20232024 can be attributed to several factors. First, theThe Company tookinvested asignificantly strategicin approachresearch and development, and people as well as incurred credit loss expense related to increasecertain funding forcustomer its operations,contracts resulting in an increase in its overall operating expenses. Additionally, the Company invested significantly in research and development, and people.

During the year ended December 31, 2024, 2025, the CompanyCompany’s net revenues were approximately $886,000$2.0 million compared to approximately $190,000$0.9 million for the year ended December 31, 2023.2024. Revenue increased as we acquired and went live with new customers.

During the year ended December 31, 2024,2025, general and administrative expenses increased by approximately $1.1$3.3 million compared to the year ended December 31, 2023,2024. principallyThe dueincrease was driven by increases in employee related expenses, shares issued to higher stock-basedmanagement compensation expensesadvisors, as well as credit theloss Company’sexpense increaserelated into headcountcertain costscustomer andcontracts higherof third-partyapproximately vendor$0.8 costs.million

During the year ended December 31, 2024,2025, research research and development expenses increased by approximately $3.7$1.4 million compared to the year ended December 31, 2023,2024. principally due to higher stock-based compensation expenses as well as the Company’sThe increase was due to continued investment in headcount costsemployees and highercontractors third-partyto vendordeliver costs.required product capabilities and performance for existing customers and sales prospects.

Depreciation and amortizationAmortization expense

During the year ended December 31, 2024,2025, depreciationAmortization and amortization decreased by approximately $0.1 million compared to the year ended December 31, 2023,2024, as the Company’s intangible assets remaining useful life decreases.

The global economy has been undergoing a period of political and economic uncertainty and stock markets are experiencing high levels of volatility, and it is difficult to predict how long this uncertainty and volatility will continue. The frequent and sudden changes in international trade negotiations and tariffs, continuing wars in Ukraine and the Middle East, inflationary pressures, and rising energy prices and increaseshave in interest rates have impacted the United States and other major economies and have created uncertainty regardingin athe possiblemarkets. recession. As a result, many businesses, especially in the technology sector, have made significant cut-backsreductions in expenditure, including reductions in force and investment freezes. Our sales and results are also impacted by the changes in levels of spending on identity verification, management and security methods, and thus, negative trends in the global economy and other factors which negatively impact such spending may negatively impact the growth of our revenue from those products.

Net cash (used)/generated in investing activities in 2024 2025 and 20232024 was approximately ($66,000)$0.0 million and $75,000$0.1 asmillion for the Company received certain proceeds from the salepayment of itspatent discontinuedfees businesses inand 2023.purchases of intangible assets.

In 2025, 2026, the Company will continue to be opportunistic and judicious in raising additional funds to support its operations and investments as it creates a sustainable organization. There is no guarantee that such financing will be availableavailable, or if available that it will be on acceptable terms.

As of December 31, 2024,2025, the Company has thefully remainingrepaid balance of a series ofall Senior Secured Convertible Notes outstanding forand $245,000discharged duethe insecurity March 2025.interests.

See Notes Note 5 and 6 of the Consolidated Financial Statements for additional information associated with the convertible notes payable.

As of December 31, 2024,2025, the Company had theno followingoutstanding long-term contractual obligations.

Overview authID ensures enterprises “Know Who’s Behind the Device”TM for every customer or employee login and transaction, through its easy-to-integrate, patented, biometric identity platform. authID powers biometric identity proofing,proofing in 700ms, biometric authentication, authentication in 25ms, and account recovery with a fast, accurate, user-friendly experience. With our PrivacyKey™ solution, authID provides a highly1-to-1-billion accurate biometricfalse authentication,match rate, while storing no biometric data. authID stops fraud at onboarding, blocks deepfakes, prevents account takeover, and eliminates password risks and costs, through the faster, frictionless, and most accurate user identity experience demanded by today’s digital ecosystem.

Biometric Identity Verification - ProofProofTM

Biometric identity verification establishes the trusted identity of a user based on a variety of ground truth sources, including government-issued identity documents such as national IDs, driver’s licenses and passports or electronic machine-readable travel documents (or eMRTDs). Our VerifiedTM platform detects presentation attack and spoofing threats, evaluates the authenticity of security features present on a government-issued identity document, and biometrically matches the reference picture of the document with a live user’s selfie (a photograph that the user has taken of themselves). Usually occurring at account opening or onboarding, identity verification ensures that the enterprise knows that the person interacting with the enterprise is who they say they are, in real time. authID’s ProofTM identity verification product eliminates the need for costly and less accurate face-to-face, in-person ID checks and instead provides a verified identity in seconds. Additionally, authID’s PrivacyKeyTM technology enables customers to perform biometric verification through the use of Public/Private Keys that is performed without storing any biometric data, which ensures individual data privacy. In a digital, online world of increasing fraud and security threats, Proof speeds up onboarding and offers our customers confidence in the identities of consumers, employees or third-party vendors.

Biometric Identity Authentication - VerifiedVerifiedTM

Biometric identity authentication provides any organization with a secure, convenient solution to validate that an individual is the verified account owner for various purposes including passwordless login and performing specific transactions, or functions. The authID Verified product allows users to confirm their identity with their facial biometric by simply taking a selfie on a mobile phone or device of their choosing (as opposed to dedicated hardware). The solution includes a patented audit trail created for each transaction, containing the digitally signed transaction details, with proof of identity authentication and consent. Verified allows users to recover, via a facial biometric, account access that is lost or blocked due to expired credentials, lockouts, lost or stolen devices, or compromised accounts. Because the account owner’s root of trust is established in the cloud, recovery is independent of any device or hardware. In this way, account recovery is instant, portable, and does not require the presence of or access to a previously provisioned device in order to secure access from a different device.

We plan to grow our business by increasing the use of our services by our existing customers, by adding new customers through our direct salesforce, sales force, channel partners and by expanding into new markets and innovation. If we are successful in these efforts, we would expect our revenue to continue to grow.

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) assuming the Company will continue on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next year following the issuance date of these consolidated financial statements. As of MarchJune 31,30, 2026, the Company had an accumulated deficit of approximately $196.2$201.0 million. For the threesix months ended MarchJune 31,30, 2026, the Company earned revenue of approximately $0.5$1.0 million, used $3.4$6.7 million to fund its operations, and incurred a net loss from operations of approximately $4.5$9.2 million.

The continuation of the Company as a going concern is dependent upon financial support from the Company’s stockholders, the ability of the Company to obtain additional debt or equity financing to continue operations, the Company’s ability to generate sufficient cash flows from operations, successfully locating and negotiating with other business entities for potential acquisition and acquiring new clients to generate revenues and cash flows. In April 2026, the Company raised a total of cash proceeds of approximately $3.6$3.5 million after expenses from accredited investors through the sale of approximately $4.2 million Senior Secured Debentures pursuant to a private placement. Going forward, the Company plans to raise additional funds as needed to support its operations and investments as it seeks to create a sustainable organization. Our growth-oriented business plan to offer products to our customers will require continued capital investment and there is no guarantee that such financing will be available, or available on acceptable terms.

This discussion includes information about Adjusted EBITDA that is not prepared in accordance with GAAP. Adjusted EBITDA is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similar measures presented by other companies. A reconciliation of this non-GAAP measure is included below. Adjusted EBITDA is a non-GAAP financial measure that represents GAAP net income (loss) adjusted to exclude (1) interest expense, debt issuance costs and changes in fair value, (2) interest income, (3) severance cost, (4) amortization, (5) stock-based compensation expense and certain other items management believes affect the comparability of operating results. Management believes that Adjusted EBITDA, when viewed with our results under GAAP and the accompanying reconciliations, provides useful information about our period-over-period results. Adjusted EBITDA is presented because management believes it provides additional information with respect to the performance of our fundamental business activities and is also frequently used by securities analysts, investors and other interested parties in the evaluation of comparable companies. We also rely on Adjusted EBITDA as a primary measure to review and assess the operating performance of our company and our management, and it will be a focus as we invest in and grow the business. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for, analysis of our results as reported under GAAP. Some of these limitations are:

During the three and six months ended MarchJune 31,30, 2026, the Company’s revenues, net of concessions and allowancesrevenues were approximately $480,000,$0.5 million and $1.0 million, respectively, compared to approximately $296,000$1.4 million and $1.7 million, respectively, in the three and six months ended MarchJune 31,30, 2025,2025. principallyThe year over year decline was due to contract concessions made in the recognitionthird quarter of revenue2025 fromfor newtwo customer contracts.contracts which resulted in lower revenue in 2026.

During the three and six months ended MarchJune 31,30, 2026 compared to the three and six months ended MarchJune 31,30, 2025, general and administrative expensesexpense increased decreased by approximately $0.2 million. The increase for the three-month period was driven by an increase of approximately $0.4$1.4 million in stock-based compensation for employees and advisors,$1.2 partiallymillion, offset by employee and vendor expense reductions.respectively.

During the three and six months ended MarchJune 31,30, 2026 compared to the three and six months ended MarchJune 31,30, 2025, research and development expenses increased by approximately $0.1 million.million and $0.2 million, respectively. The increase for the three-month period was drivendue byto an increase of approximately $0.2 million inincreased stock-based compensation for employees and advisors,severance expense, partially offset by employeethe andinitial vendorimpact expensefrom reductions.the Q2 Cost Reduction Initiative.

Interest incomeOther Income (Expense)

The Company has approximately $1.2$1.4 million of cash on hand and approximately $0.9($2.3) million of working capital deficit as of MarchJune 31,30, 2026.2026 mostly due to the $3.8 million in short term senior secured debt.

Cash used in operating activities was approximately $3.4$6.7 million and $5.4$8.4 million in the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.

Cash used in financinginvesting activities for the threesix months ended MarchJune 31,30, 2026 and March 31, 2025 was approximately$0.0 $0million, andcompared $0.2with $0.0 million respectively, due tofor the repaymentsix months ended June 30, 2025, for the payment of apatent convertible note in 2025.costs.

The In 2026, the Company will need to raise additional funds to support its operations and investments as it seeks to create a sustainable organization. Our growth-oriented business plan to offer products to our customers will require continued capital investment and there is no guarantee that such financing will be available, or available on acceptable terms.

The global economy has been undergoing a period of political and economic uncertainty and stock markets are experiencing high levels of volatility, and it is difficult to predict how long this uncertainty and volatility will continue. The frequentcurrent and sudden changesincrease in international trade negotiationstariffs and tariffs,uncertainty over international trading conditions, continuing wars in Ukraine and the Middle East, inflationary pressures, and rising energy prices and increases in interest rates have impacted the United States and other major economies and have created uncertainty inregarding thea markets.possible recession. As a result, many businesses, especially in the technology sector, have made significant reductionscut-backs in expenditure, including reductions in force and investment freezes. Our sales and results are also impacted by the changes in levels of spending on identity verification, management and security methods, and thus, negative trends in the global economy and other factors which negatively impact such spending may negatively impact the growth of our revenue from those products. All or any of these risks separately, or in combination could have a material adverse effect on our business, financial condition, results of operations, and cash flows.