IDN 10-K & 10-Q changes, risk factors and insider trading
Intellicheck, Inc. · Nasdaq · Services-Prepackaged Software · CIK 1040896 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Although we achieved profitability for the fiscal year ended December 31, 2025, we have a history of operating losses, and we cannot provide assurance that we will maintain profitability.”
New heading “We rely on third-party mobile operating systems and hardware ecosystems that are outside our control.”
New heading “We rely on third-party service providers and cloud infrastructure to host our platform and process data; a cybersecurity breach, supply chain attack, or service disruption at these third parties could expose us to significant liability and disrupt our business.”
New heading “A significant portion of our revenues is concentrated among a limited number of customers, and the loss or reduced usage of our products by one or more of these customers could materially adversely affect our results of operations.”
New heading “Rapid advancements in generative artificial intelligence ("AI") and "deepfake" technology could render our identity verification solutions less effective.”
New heading “Our significant deferred tax assets are subject to a full valuation allowance, and changes in our assessment could materially affect our reported results.”
New heading “We may need to raise additional capital in the future, which may not be available to us on terms that are favorable to us, or at all, and could cause dilution to our existing stockholders”
Removed heading “We have incurred losses since inception and losses may continue, which could result in a decline in the value of our securities and a loss of your investment.”
Removed heading “Long lead times for the components used in certain products creates uncertainty in our supply chain and may prevent us from making required deliveries to our customers on time.”
Removed heading “We obtain certain hardware and services, as well as some software applications, from a limited group of suppliers, and our reliance on these suppliers involves significant risks, including reduced control over quality and delivery schedules.”
Removed heading “Security breaches and other disruptions could potentially compromise our information and expose us to liability, which would be harmful to our business.”
Removed heading “Our percentage of revenues and customer concentration is significant.”
Removed heading “The expansion of the use of artificial intelligence ("AI") within our business will pose ethical and bias mitigation challenges.”
Removed heading “Public health crises, such as COVID-19 or other similar pandemics in the future, can adversely impact our business.”
Removed heading “Future capital requirements may require incurring debt or dilution of existing stockholders.”
Largest changes
“Furthermore, any service outage, ransomware attack, or denial-of-service attack targeting our cloud providers could render our platform unavailable to customers, leading to immediate revenue loss and reputational damage. Under current laws and regulations, we may be held liable for the unauthorized disclosure of sensitive data even if the breach originates with a third-party vendor. Such an event could result in substantial fines, legal claims, termination of customer contracts, and a loss of confidence in our ability to protect sensitive identity data.”see in full comparison
“We rely on third-party service providers and cloud infrastructure to host our platform and process data; a cybersecurity breach, supply chain attack, or service disruption at these third parties could expose us to significant liability and disrupt our business.”see in full comparison
“Security breaches and other disruptions could potentially compromise our information and expose us to liability, which would be harmful to our business.”see in full comparison
“Long lead times for the components used in certain products creates uncertainty in our supply chain and may prevent us from making required deliveries to our customers on time.”see in full comparison
“In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our customers, and personally identifiable information of our customers, their customers and our employees, in our data centers and on our networks. The secure processing, maintenance, and transmission, when applicable, of this information is critical to our operations and business strategy. …”see in full comparison
“Rapid advancements in generative artificial intelligence ("AI") and "deepfake" technology could render our identity verification solutions less effective.”see in full comparison
Full comparison: every changed paragraph (50)
Although we achieved profitability for the fiscal year ended December 31, 2025, we have a history of operating losses, and we cannot provide assurance that we will maintain profitability.
We have incurred losses since inception and losses may continue, which could result in a decline in the value of our securities and a loss of your investment.
We incurredreported net lossesincome of $1,273 for the fiscal year ended December 31, 2025, compared to a net loss of $(918) and $(1,980) for the fiscal yearsyear ended December 31, 20242024. andDespite 2023,this respectively.recent Ourprofitability, we have an accumulated deficit wasof $(134,483133,210) as of December 31, 2024.2025. Since weWe expect to incurcontinue additionalincurring expendituressignificant operating expenses as we invest in lineproduct withdevelopment, thespecifically regarding our AI and fraud detection capabilities, and expand our sales growthoperations. ofThese investments may increase our business,costs faster than our revenue grows. Accordingly, we may not achievebe operatingable profitsto maintain profitability in thesubsequent nearperiods, future, and wewhich could experienceresult further losses. This could lead toin a decline in the value of our securities.
Currently, every U.S. state, ten Canadian provinces and the District of Columbia, in most instances, conform to the guidelines established by certain organizations responsible for implementing industry standards and,and cooperate with us by providing sample identification cards so that we may modify all our hardware and software products to read and analyze the encoded information found on such jurisdiction’s identification cards. If one or more of these jurisdictions do not continue to provide this reference data, the utility of our proprietary software may be diminished in those jurisdictions.
Changes in federal spending priorities, prolonged government shutdowns, constraints on agency budgets and staffing levels, or shifts in policy priorities could reduce the ability of certain governmental agencies to perform their responsibilities, including issuing and updating identification standards and sharing reference data with us, which could have a material adverse effect on our business.
The current President Trump administration (the “Trump Administration”) recently established the Department of Government Efficiency, which implemented a federal government hiring freeze and announced certain additional efforts to reduce federal government employee headcount and the size of the federal government. It is unclear how these executive actions or other potential actions by the Trump Administration or other parts of the federal government will impact the regulatory authorities that oversee our business and the governmental and quasi-governmental agencies that we interact with. These budgetary pressures may reduce the ability of certain governmental agencies to perform their responsibilities, which could have a material adverse effect on our business.
Our target customers in the commercial fraud protection, financial services, retail, access control and age verification industry sectors include banks and credit card issuers, large retailers and to a lesser extent, government agencies, which typically require longer sales and implementation cycles for our products than do our potential customer base solely interested in age verification, such as restaurant, bar and convenience store operators. The longer sales and implementation cycles for larger retail companies continue to have an adverse impact on the timing of realizing our revenues. In addition, budgetary constraints and potential economic slowdowns or inflationary pressures also may also continue to delay purchasing decisions by these prospective customers. These initiatives have costs associated with them, and we cannot assure you that they ultimately will prove successful, or result in, an increase to our revenues or profitability.
Demand and industry acceptance for recently introduced and existing systems, and software and sales from such systems, are subject to a high level of uncertainty and risk. With changing administration in government, changesChanges in government budgets, and slowly evolving government standards on use of identity products,products have impacted the development of our business serving the government sector is slowly developing.sector. The commercial sector can develop faster than the government sector, but it is also subject to a higher level of uncertainty because of potential uncertainty in the continued financial health of our commercial customers, as well as long sales cycles. Our business may suffer if the industry demand develops more slowly than anticipated and does not sustain industry acceptance.
If we can expand our operations, particularly through multiple sales to large retailers and government agencies in the document verification industry, the expansion will place significant strain on our management, financial controls, operating systems, personnel and other resources. Our ability to manage future growth, should it occur, will depend upon several factors, including our ability to do the following:
If we can grow our business but do not manage our growth successfully, we may experience increased operating expenses, loss of customers, distributors,distributors or suppliers and declining or slowed growth of revenues.
We continue to allocate significant resources to developing new and innovative technologies that are utilized in our products and systems. Because our continued success depends on, to a significant degree, our ability to offer products providing superior functionality and performance overto those offered by our competitors, we consider the protection of our technology from unauthorized use to be fundamental to our success. This is done by processes aimed at identifying and seeking appropriate protection for newly developed intellectual property, including patents, trade secrets, copyrights, and trademarks, as well as policies aimed at identifying unauthorized use of such property. These processes include:
We are not aware thatof our current products infringeinfringing the intellectual property rights of any third parties. We also are not aware of any third-party intellectual property rights that may hamper our ability to provide future products and services. However, we recognize that the development of our services or products may require that we acquire intellectual property licenses from third parties to avoid infringement of those parties’ intellectual property rights. These licenses may not be available at all or may only be available on terms that are not commercially reasonable. If third parties make infringement claims against us, even if they are not upheld, such claims could:
If any third party prevails in an action against us for infringement of its proprietary rights, we could be required to pay damages and either enter costly licensing arrangements or redesign our products so as to exclude any infringing use. As a result, we would incur substantial costs, delays in product development, sales and shipments, and our revenues may decline substantially. Additionally, we may not be able to achieve the growth necessary for our continued success.
As a result, we would incur substantial costs, delays in product development, sales and shipments, and our revenues may decline substantially. Additionally, we may not be able to achieve the growth necessary for our continued success.
We rely on third-party mobile operating systems and hardware ecosystems that are outside our control.
A significant portion of our revenue depends on our software running effectively on third-party mobile devices (iOS and Android) and Point-of-Sale ("POS") hardware. We do not control these platforms. If Apple, Google, or POS manufacturers alter their operating systems—for example, by restricting access to camera feeds or NFC (Near Field Communication) chips—our products could become non-functional. Furthermore, these platform providers may introduce competing native identity verification features (e.g., mobile IDs embedded directly in digital wallets) that could disintermediate third-party applications like ours.
We rely on third-party service providers and cloud infrastructure to host our platform and process data; a cybersecurity breach, supply chain attack, or service disruption at these third parties could expose us to significant liability and disrupt our business.
Our SaaS delivery model and internal operations depend heavily on third-party service providers, including cloud infrastructure services, data center operators, and software vendors. We also utilize third-party technology for some critical functions such as facial biometric matching and global document validation.
While we implement security measures for our own systems, we do not have direct control over the cybersecurity protocols of these third-party providers. Sophisticated cyber attackers increasingly target these "supply chain" vendors to gain access to downstream customers like us. If a third-party provider is compromised, attackers could infiltrate our systems, access sensitive personal information (PII) of our customers or their end-users or inject malicious code into our software updates.
Furthermore, any service outage, ransomware attack, or denial-of-service attack targeting our cloud providers could render our platform unavailable to customers, leading to immediate revenue loss and reputational damage. Under current laws and regulations, we may be held liable for the unauthorized disclosure of sensitive data even if the breach originates with a third-party vendor. Such an event could result in substantial fines, legal claims, termination of customer contracts, and a loss of confidence in our ability to protect sensitive identity data.
Under our current governance structure, our Board of Directors oversees cybersecurity risk management as a principal business risk. However, there is no guarantee that our oversight processes or the cybersecurity protocols of our third-party vendors will be sufficient to prevent a material breach. Any such incident would require us to disclose the event under Item 1.05 of Form 8-K, which could lead to immediate negative market reaction and long-term reputational harm.
Long lead times for the components used in certain products creates uncertainty in our supply chain and may prevent us from making required deliveries to our customers on time.
We rely exclusively on COTS technology in manufacturing our products. The lead-time for ordering certain components used in our products and the production of products can be lengthy. As a result, we must, from time to time, order products based on forecasted demand. If demand for products lags significantly behind forecasts, we may purchase more product than we can sell. Conversely, if demand exceeds forecasts, we may not have enough products to meet our obligations to our customers.
We obtain certain hardware and services, as well as some software applications, from a limited group of suppliers, and our reliance on these suppliers involves significant risks, including reduced control over quality and delivery schedules.
Any financial instability of our suppliers could result in having to find new suppliers. We may experience significant delays in manufacturing and deliveries of products and services to customers if we lose our sources or if supplies and services delivered from these sources are delayed. As a result, we may be required to incur additional development, manufacturing, and other costs to establish alternative supply sources. It may take several months to locate alternative suppliers, if required. We cannot predict whether we will be able to obtain replacement hardware within the required time frames at affordable costs, or at all. Any delays resulting from suppliers failing to deliver hardware or delays in obtaining alternative hardware, in sufficient quantities and of sufficient quality, or any significant increase in the cost of hardware from existing or alternative suppliers could result in delays on the shipment of product which, in turn, could result in the loss of customers we may not be able to successfully complete.
Security breaches and other disruptions could potentially compromise our information and expose us to liability, which would be harmful to our business.
In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our customers, and personally identifiable information of our customers, their customers and our employees, in our data centers and on our networks. The secure processing, maintenance, and transmission, when applicable, of this information is critical to our operations and business strategy. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance, or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost, or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, potential liability under laws that protect the privacy of personal information, and regulatory penalties. This in turn could disrupt our operations and the services we provide to customers, damage our reputation, and potentially cause a loss of confidence in our products and service offerings, which could adversely affect our business and competitive position.
A significant portion of our revenues is concentrated among a limited number of customers, and the loss or reduced usage of our products by one or more of these customers could materially adversely affect our results of operations.
For the fiscal years ended December 31, 2025 and 2024, our top ten customers accounted for approximately 77% and 71% of our total revenues, respectively. The loss of any one of these significant customers, or a reduction in their spending levels, could have a material adverse effect on our business, financial condition, and results of operations. Furthermore, these customers often have significant leverage in contract negotiations, which may result in pricing pressure or reduced margins. Our ability to replace these customers or comparable revenue streams is uncertain and could take significant time and investment.
Our percentage of revenues and customer concentration is significant.
We have a concentration of revenues with our ten largest customers which accounted for 71% of total revenues in 2024 and 2023. Three customers accounted for 50% of revenues in 2024 and three customers accounted for 47% of revenues in 2023. The loss of one or more significant customers could have a significant adverse impact on our business, financial condition, and results of operations.
With the growing use of biometric data in identity verification, Intellicheck faces increased risks related to the usage and protection of this highly sensitive information. Biometric data, such as facial recognition patterns, are uniquely vulnerable as they cannot be changed if compromised. The company must implement robust security measures to protect this data from breaches, as any leak could lead to severe reputational damage, legal consequences, and loss of customer trust. Additionally, evolving privacy laws and regulations specifically targeting biometric data could impose new compliance burdens on the company. Additionally, regulators are increasingly scrutinizing AI models for "algorithmic bias." If our fraud detection algorithms are found to perform differentially across demographic groups, we could face regulatory fines, reputational harm, and requirements to alter our technology under laws like federal non-discrimination statutes.
We are or may become subject to numerous state, federal and foreign laws, requirements and regulations governing the collection, use, access to, confidentiality, disclosure, storage, processing, retention and security of personal information. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation. As an example, the California Privacy Rights AceAct (the “CCPA”) requires covered businesses that process the personal information of California residents to, among other things: provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information; receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information; and enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf. Similar laws have been passed in other states and are continuing to be proposed at the state and the federal level, reflecting a trend toward more stringent privacy legislation in the United States. The CCPA and other domestic privacy and data protection laws and regulations may increase our compliance costs and potential liability.
Rapid advancements in generative artificial intelligence ("AI") and "deepfake" technology could render our identity verification solutions less effective.
The identity verification industry is characterized by a "technological arms race." Bad actors increasingly are utilizing generative AI to create highly realistic synthetic identities and "deepfakes" capable of spoofing facial recognition systems. If our technology fails to detect these sophisticated AI-driven falsifications, or if we are unable to develop countermeasures faster than fraudsters develop evasion techniques (such as camera injection attacks), our customers may lose confidence in our platform. Furthermore, the shift toward 'digital-only' onboarding has increased our exposure to Synthetic Identity Fraud, where bad actors combine real and fabricated data to create entirely new, credible personas that do not have a history of prior fraud, making them significantly harder for traditional algorithms to detect. This could result in increased liability, customer churn, and material adverse effects on our business.
Our significant deferred tax assets are subject to a full valuation allowance, and changes in our assessment could materially affect our reported results.
As of December 31, 2025, we had gross deferred tax assets of approximately $7,145, which were fully offset by a valuation allowance. These deferred tax assets consist primarily of federal and state net operating loss carryforwards of approximately $30,520 at the federal level and $3,670 at the state level.
We evaluate the realizability of our deferred tax assets on a quarterly basis in accordance with ASC 740, weighing both positive and negative evidence. Significant factors in this assessment include our cumulative results over the most recent three-year period, projected future taxable income, the nature and timing of reversals of existing temporary differences, and available tax planning strategies. As of December 31, 2025, we were in a three-year cumulative loss position, which represents significant negative evidence under ASC 740, and accordingly we concluded that a full valuation allowance was required. Changes in our future earnings would result in a release of the valuation allowance and recognized in the period which the assessments change, as deemed appropriate under ASC 740.
In future periods, if we determine that sufficient positive evidence exists to conclude that it is more likely than not that some or all of our deferred tax assets will be realized, we would reduce or eliminate the valuation allowance, resulting in a non-cash income tax benefit that could be material to our results of operations in the period of release. Any such benefit would not represent a change in cash flows or operating performance. Conversely, if we incur additional losses or determine that the expected future taxable income is insufficient to support the realization of our deferred tax assets, we could be required to increase the valuation allowance, which would result in additional income tax expense.
Our federal net operating loss carryforwards include approximately $10,892 generated prior to 2018 that will expire if unused between 2035 and 2037, and approximately $19,628 generated after 2017 that may be carried forward indefinitely but are limited to offsetting 80% of taxable income in any given year. Our ability to utilize these carryforwards could be limited or eliminated by future changes in tax law or by an ownership change as defined under Section 382 of the Internal Revenue Code. We have not completed a formal analysis to determine whether any ownership changes have occurred that could limit our ability to utilize our net operating loss and tax credit carryforwards. If such a change has occurred, or occurs in the future, the annual amount of our carryforwards available to offset taxable income could be materially limited, which could result in a significant increase in our future income tax liability.
The expansion of the use of artificial intelligence ("AI") within our business will pose ethical and bias mitigation challenges.
As Intellicheck incorporates AI in its identity verification processes, the company faces risks related to AI ethics and potential biases in its algorithms. There's a growing concern about AI systems perpetuating or amplifying existing biases, particularly in identity verification contexts. Intellicheck must ensure its AI models are fair, transparent, and free from discriminatory outcomes across diverse demographic groups. Failure to address these ethical concerns could result in regulatory scrutiny, legal challenges, and damage to the company's reputation, potentially leading to loss of business and market share. Additionally, the models used in those processes may produce output or take action that is incorrect, expose private or confidential information, infringe on the intellectual property rights of others, or be otherwise harmful. Any of these risks could expose Intellicheck to liability or adverse legal or regulatory consequences.
Public health crises, such as COVID-19 or other similar pandemics in the future, can adversely impact our business.
Public health crises, such as the COVID-19 pandemic, could lead to government shutdowns, stay-at-home orders, travel restrictions, business closures, cancellations of public gatherings, and other measures, which may have material adverse effects on our business. The level and nature of the disruption caused by a public health crisis is unpredictable, may be cyclical and long-lasting and vary from location to location. While many of the original restrictions levied by governments in response to COVID-19 have been removed, additional variants, or similar pandemics in the future, could cause governments to reinstitute some or all of the previously implemented restrictive measures. Such restrictions could lead to the cancellation of industry events which could limit our ability to meet with existing and potential new customers.
In addition, the stock market experiences extreme fluctuations in price and volume,volume that particularly affect the market price of shares of technology companies, such as ours. These price and volume fluctuations often are often unrelated or disproportionate to the operating performance of the affected companies. Because of this volatility, we may fail to meet the expectations of our stockholders or of securities analysts and our stock price could decline as a result. Furthermore, the trading price of our common stock may be adversely affected by third-parties trying to drive down the market price. Short sellers and others, some of whom post anonymously on social media, may be positioned to profit if our stock declines and their activities can negatively affect our stock price. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance. Declines in our stock price for any reason, fluctuations related to our financial results or due to macroeconomic conditions, including inflation and rising interest rates, capital market volatility and global conflicts, including the Russia-Ukraine war, the recent military action against Iran, the Israel-Hamas war and the conflict between China and Taiwan, may adversely affect your ability to sell your shares at a price equal to or above the price at which you purchased them. Decreases in the price of our common stock also may also lead to de-listing of our common stock.
We may need to raise additional capital in the future, which may not be available to us on terms that are favorable to us, or at all, and could cause dilution to our existing stockholders
We had cash and cash equivalents of $9,650 and working capital of $10,123 as of December 31, 2025. Our ability to fund our operations and execute our business strategy depends on our generating sufficient cash flows from operations and, when necessary, accessing capital markets or other financing sources. Additionally, acquisition and development opportunities and other contingencies may arise, which could also require us to raise additional capital through accessing capital markets or other financing sources. We may not be able to raise capital when the need arises on terms favorable to us, or at all. Further, adverse developments in the financial services industry, including bank failures, liquidity constraints, or significant volatility in equity markets, could limit our access to capital, increase our cost of capital, or reduce the amount of cash we can access on deposit with financial institutions, any of which could have a material adverse effect on our business, financial condition, and results of operations. Even if we are successful in raising additional capital, if we do so through the sale of equity, including preferred stock, or convertible debt securities, the percentage ownership of our then existing stockholders will be diluted. In August 2025, we filed an S-3, also know as a Shelf Registration, that would allow us to sell shares in the market if the need arises.
Future capital requirements may require incurring debt or dilution of existing stockholders.
Acquisition and development opportunities and other contingencies may arise, which could require us to raise additional capital or incur debt. If we raise additional capital through the sale of equity, including preferred stock, or convertible debt securities, the percentage ownership of our then existing stockholders will be diluted.
We regularly maintain domestic cash deposits in Federal Deposit Insurance Corporation (“FDIC”) insured banks, in amounts whichthat exceed the FDIC insurance limits. The failure or rumored failure of a bank, or events involving limited liquidity, defaults, non-performance, bankruptcy, receivership or other adverse developments in the financial or credit markets impacting financial institutions, may lead to disruptions in access to our bank deposits. These disruptions could impact our liquidity and financial performance. There can be no assurance that our deposits in excess of the FDIC or other comparable insurance limits will be backstopped by the U.S. government, or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions or by acquisition in the event of a failure or liquidity crisis. As such, those funds in bank deposit accounts in excess of the standard FDIC insurance limits are uninsured and subject to the risk of bank failure.
Management's Discussion & Analysis (MD&A)
New heading “Income Taxes and Valuation Allowance”
New heading “Adjusted Gross Profit”
New heading “Adjusted EBITDA”
Largest changes
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 othersee in full comparisonincome (expense) and certain addbacks such as non-restructuring severance expenses, sales tax accrual,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 asimpairments of long-lived assets and goodwill, sales tax accrual,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.We have included any severance-related expenses for terminated positions that will not be replaced as "non-restructuring severance expenses" within Adjusted EBITDA.In addition, Adjusted EBITDA is one of the primary measures that management uses to monitor and evaluate financial and operating results.
We consider Adjusted EBITDA to be an important indicator of our operational strength and performance of our business and a useful measure of our historical operating trends. However, there are significant limitations to the use of Adjusted EBITDA since it excludessee in full comparisonnon-restructuringrestructuring severance expenses,salesinteresttaxandaccrual,other income, provisions for income taxes,interest and other (expense) income, impairments of long-lived assets and goodwill,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.
“On February 6, 2019, we entered a revolving credit facility with Citi Personal Wealth Management that allows for borrowings up to the lesser of (i) $2,000 or (ii) the collateralized balance in our existing fixed income investment account with Citi Personal Wealth Management. The facility bears interest at a rate consistent of Citi Personal Wealth Management’s Base Rate (9.00% and 8.50% at December 31, 2024 and December 31, 2023, respectively) minus 2% subject to certain limitations. …”see in full comparison
“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. …”see in full comparison
Full comparison: every changed paragraph (33)
SaaS fees and service revenues are generated from a combination of fixed-price and per-scan contracts. Under the per-scan revenue model, customers are charged a fee each time the customer scans an identity document, such as a driver’s license, with our software. Under the fixed-price revenue model customers are charged a fixed monthly fee either per device or physical business location to access our software. In certain instances, customization services are determined to be essential to the functionality of the delivered software. Under Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers,” revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration expected to be received in exchange for those goods or services. We measure revenue based on the consideration specified in a customer arrangement, and revenue is recognized when the performance obligations in an arrangement are satisfied. The Company adopted an additional revenue model where customers purchase a predetermined number of transactions for the term of the contract, where revenue for these transactions is recognized on a per transaction basis. The Company estimates the number of transactions that will be unused by the end of each contract period and recognized a portion of that revenue as breakage revenue each reporting period. Reference Note 2, “Significant Accounting Policies,” in the Notes to Financial Statements for additional details on the Company’s recognized and deferred revenue. The Company also has a revenue model where customers purchase access to the Company's platform that includes a fixed, non-refundable annual access fee associated with a spend commitment that grants the customers stand-ready access to the platform. Revenue for this access is recognized ratably over the contract term, consistent with the nature of the stand-ready service.
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.
Income Taxes and Valuation Allowance
We account for income taxes in accordance with ASC 740, Income Taxes. Under this standard, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for net operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
We establish a valuation allowance against deferred tax assets when, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In making this determination, we consider all available positive and negative evidence, including:
•Our cumulative results for the most recent three-year period, adjusted for permanent differences between book and taxable income;
•The nature, frequency, and magnitude of current and cumulative financial reporting income and losses;
•Our forecasts of future taxable income, considering the predictability and sustainability of recent operating trends;
•The length of time net operating loss and tax credit carryforwards remain available, including the distinction between carryforwards with definite expiration dates and those that carry forward indefinitely;
•The nature and timing of reversals of existing taxable and deductible temporary differences; and
•Available tax planning strategies that could be implemented, if necessary, to accelerate taxable income.
As of December 31, 2025, we maintained a full valuation allowance of approximately $6,677 against our net deferred tax assets. Our three-year cumulative result through December 31, 2025, after adjusting for permanent differences, remained in a loss position, which constitutes significant objective negative evidence under ASC 740. While we generated pre-tax income of approximately $1,331 during the year ended December 31, 2025, representing a meaningful improvement from prior-year losses of $2,042 in 2023 and $885 in 2024, we have not yet established a sustained pattern of profitability sufficient to overcome this negative evidence.
This assessment requires significant judgment. Should we continue to generate taxable income in future periods such that the three-year cumulative result transitions to a positive position, and should we conclude that the weight of positive evidence outweighs the negative evidence, we may determine that a partial or full release of the valuation allowance is appropriate. Any such release would be recorded as a non-cash deferred income tax benefit in the period the determination is made and could be material to our results of operations. Based on the gross deferred tax assets as of December 31, 2025, a full release of the valuation allowance would result in a tax benefit of approximately $6,677.
OPERATING EXPENSES. Operating expenses, which consist of selling, general and administrative expenses and research and development expenses, decreasedincreased by $(473),$80, or (2.4)%0.4% to $19,414 for the year ended December 31, 2025 from $19,334 for the year ended December 31, 20242024. fromSelling, $19,807general and administrative expenses decreased by $(1,377), or 9%, to $14,100 for the year ended December 31, 2023.2025, Selling, general and administrative expenses increased by $350, or 2%,compared to $15,477 for the year ended December 31, 2024, compared to $15,127 for the year ended December 31, 2023.2024. This increasedecrease was primarily driven by higherlower general and administrative costs, specifically headcount-related expenses tied to severance expenses. Research and development expenses decreasedincreased $823,$1,457, or 18%,38%, to $5,314 for the year ended December 31, 2025, compared to $3,857 for the year ended December 31, 2024, compared to $4,680 for the year ended December 31, 2023.2024. This decreaseincrease was primarily due to theless capitalization of certain software development expenses, as well as lowerhigher personnel costs and their related stock-compensation expenses.
INTERESTOTHER INCOME AND OTHER INCOME.EXPENSE. Interest incomeand other income, net, was $283$245 for the year ended December 31, 2024,2025, compared to interest income of $234$283 during the year ended December 31, 2023.2024.
INCOME TAXES. Our provision for income taxes was $33$58 for the year ended December 31, 2024,2025, compared to a benefit from income taxes of $(62)$33 during the year ended December 31, 2023.2024.
NET LOSS.INCOME. As a result of the factors noted above, we had net lossesincome of $1,273, or $0.07 per share, for the year ended December 31, 2025 as compared to a net loss of $(918), or $(0.05) per share, for the year ended December 31, 2024 as compared to a net loss of $(1,980), or $(0.10) per share, for the year ended December 31, 2023.2024.
For the year ended December 31, 2024,2025, our cash increased by $686.$4,984. Cash usedprovided inby operating activities was $(2,694)$4,541 for the year ended December 31, 20242025 as compared to cash used in operating activities of $(6472,694) for the year ended December 31, 2023.2024. Cash providedused byin investing activities for the year ended December 31, 20242025 was $2,895$(265) as compared to cash usedprovided inby investing activities of $(414)$2,895 for the year ended December 31, 2023.2024. Cash provided by financing activities was $708 for the year ended December 31, 2025 as compared to cash provided by financing activities of $485 for the year ended December 31, 2024 as compared to cash used in financing activities of $(155) for the year ended December 31, 2023.2024.
On February 6, 2019, we entered a revolving credit facility with Citi Personal Wealth Management that allows for borrowings up to the lesser of (i) $2,000 or (ii) the collateralized balance in our existing fixed income investment account with Citi Personal Wealth Management. The facility bears interest at a rate consistent of Citi Personal Wealth Management’s Base Rate (9.00% and 8.50% at December 31, 2024 and December 31, 2023, respectively) minus 2% subject to certain limitations. Interest is payable monthly and as of December 31, 2023, there were no amounts outstanding under this facility and unused availability under this facility was $2,000. The Company is not subject to any financial covenants related to this revolving line of credit. This line will remain open as long as the Company keeps a depository relationship with the financial institution.
We currently anticipate that our available cash,cash and expected cash from operations and availability under the revolving credit agreement will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months from the date of filing of these financial statements.
We keep the option open to raise additional funds to respond to business contingencies which may include the need to fund more rapid expansion, fund additional marketing expenditures, develop new markets for our technology, enhance our operating infrastructure, respond to competitive pressures, or acquire complementary businesses or necessary technologies. In August 2025, we filed an S-3, also know as a Shelf Registration, that would allow us to sell shares in the market if the need arises. There can be no assurance that we will be able to secure the additional funds when needed or obtain such on terms satisfactory to us, if at all.
Adjusted EBITDA and Use as aof Non-GAAP MeasureMeasures
Adjusted Gross Profit
We use Adjusted Gross Profit as a non-GAAP financial performance measurement. Adjusted Gross Profit is calculated by adjusting gross profit for the reduction of amortization expense. Adjusted Gross Profit is provided to investors to supplement the results of operations reported in accordance with GAAP. We believe Adjusted Gross Profit is important because it focuses on the current operating performance, as amortization expense does not accurately reflect the current costs required to maintain the operational usage of our service. Rather, amortization expense reflects the allocation of historical software development costs over their estimated useful lives.
As an indicator of our operating performance, Adjusted Gross Profit should not be considered an alternative to, or more meaningful than, gross profit as determined in accordance with GAAP. Our Adjusted Gross Profit may not be comparable to a similarly titled measure of another company because other entities may not calculate Adjusted Gross Profit in the same manner.
Adjusted EBITDA
We use Adjusted EBITDA as a non-GAAP financial performance measurement. Adjusted EBITDA is calculated by adjusting net income (loss) for certain reductions such as restructuring severance expenses, interest and other income (expense) and certain addbacks such as non-restructuring severance expenses, sales tax accrual,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 impairments of long-lived assets and goodwill, sales tax accrual, 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. We have included any severance-related expenses for terminated positions that will not be replaced as "non-restructuring severance expenses" within Adjusted EBITDA. In addition, Adjusted EBITDA is one of the primary measures that management uses to monitor and evaluate financial and operating results.
We consider Adjusted EBITDA to be an important indicator of our operational strength and performance of our business and a useful measure of our historical operating trends. However, there are significant limitations to the use of Adjusted EBITDA since it excludes non-restructuringrestructuring severance expenses, salesinterest taxand accrual,other income, provisions for income taxes, interest and other (expense) income, impairments of long-lived assets and goodwill, stock-based compensation expense, all of which impact our profitability, as well as depreciation and amortization related to the use of long-term assets which benefit multiple periods. We believe that these limitations are compensated by providing Adjusted EBITDA only with GAAP net income (loss) and clearly identifying the difference between the two measures. Consequently, Adjusted EBITDA should not be considered in isolation or as a substitute for net income (loss) presented in accordance with GAAP. Adjusted EBITDA as defined by us may not be comparable with similarly named measures provided by other companies.
The reconciliation of GAAP net income (loss) to Non-GAAP Adjusted EBITDA is as follows:
In NovemberDecember 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):2023-09, Improvements to ReportableIncome SegmentTax Disclosures,Disclosures (Topic 740), which enhancesestablishes reportingnew requirementsincome under Topic 280. The enhancedtax disclosure requirements include:in titleaddition to modifying and positioneliminating certain existing requirements. The new guidance requires consistent categorization and greater disaggregation of theinformation Chief Operating Decision Maker (CODM), significant segment expenses provided toin the CODM,rate extendingreconciliation, certainas well as further disaggregation of income taxes paid. This change is effective for annual disclosuresperiods tobeginning interimafter periods,December clarifying15, single reportable segment entities must apply ASC 280 in its entirety, and permitting more than one measure of segment profit or loss to be reported under certain circumstances.2024. The Company adopted this standard effective January 1, 20242025 and was applied retrospectively. The adoption of this new standard did not have a material impact on the Company's consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. The new guidance requires consistent categorization and greater disaggregation of information in the rate reconciliation, as well as further disaggregation of income taxes paid. This change is effective for annual periods beginning after December 15, 2024. This change will apply on a prospective basis to annual financial statements for periods beginning after the effective date. However, retrospective application in all prior periods presented is permitted. The Company is currently evaluating the impact of this ASU on its financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This standard allows entities to apply a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers. The standard is effective for all the entities for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted, and the standard is to be applied prospectively. The Company will adopt this ASU in the first quarter of 2026 and adoption is not expected to have a material impact on our consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software by replacing the previous stage-based model and aligning the capitalization process with current development practices, especially agile and iterative methods. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and may be applied prospectively, retrospectively, or using a modified transition approach. The Company is in process of evaluating the impact of the adoption of this ASU on its financial statements.
What changed in the latest 10-Q
Risk Factors
New heading “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.”
Largest changes
“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.”see in full comparison
“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. …”see in full comparison
Full comparison: every changed paragraph (2)
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.
Management's Discussion & Analysis (MD&A)
New heading “Recent Developments — Customer’s Multi-Vendor Transition.”
New heading “COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2026”
New heading “TO THE SIX MONTHS ENDED JUNE 30, 2025”
Largest changes
“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. …”see in full comparison
Our long-lived assets include property and equipment, goodwill, and intangible assets. As ofsee in full comparisonMarchJune31,30, 2026, the balances of property and equipment, goodwill and intangible assets, all net of accumulated depreciation and amortization, were$374,$351, $8,102 and$1,937,$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, “Goodwill andIntangibleAssetsAssets, 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.
“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. …”see in full comparison
Full comparison: every changed paragraph (22)
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 MarchJune 31,30, 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.
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 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.
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 consolidatedcondensed financial statements and related disclosures.
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, wethe 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.
Our long-lived assets include property and equipment, goodwill, and intangible assets. As of MarchJune 31,30, 2026, the balances of property and equipment, goodwill and intangible assets, all net of accumulated depreciation and amortization, were $374,$351, $8,102 and $1,937,$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, “Goodwill and Intangible AssetsAssets, 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.
COMPARISON OF THE THREE MONTHS ENDED MARCHJUNE 31,30, 2026
TO THE THREE MONTHS ENDED MARCHJUNE 31,30, 2025
Revenues for the three months ended MarchJune 31,30, 2026 increased $630,$818, or 13%,16%, to approximately $5,524$5,941 compared to $4,894$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 $646$841 or 13%17% to $5,514$5,921 for the three months ended MarchJune 31,30, 2026 compared to $4,868$5,080 for the same period of 2025.
Gross profit increased $633,$824, or 14%,18%, to $5,025$5,424 for three months ended MarchJune 31,30, 2026 from $4,392$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 MarchJune 31,30, 2026 and 2025, respectively.
Operating expenses, which consist of selling, general and administrative and research and development expenses, decreased $257,$47, or 5%,1%, to $4,483$4,851 for the three months ended MarchJune 31,30, 2026 compared to $4,740$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 MarchJune 31,30, 2026.
As a result of the factors noted above, the Company had a net income of $636$663 for the three months ended MarchJune 31,30, 2026 as compared to a net loss of $(318251) for the three months ended MarchJune 31,30, 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.
As of MarchJune 31,30, 2026, we had cash and cash equivalents of $10,062,$11,837, working capital (defined as current assets minus current liabilities) of $11,119,$12,237, total assets of $27,109$25,565 and stockholders’ equity of $21,533.$22,489.
During the threesix months ended MarchJune 31,30, 2026, we generated cash of $445$2,242 in operating activities as compared to net cash of $750$3,884 generated from operating activities in the threesix months ended MarchJune 31,30, 2025. Cash used in investing activities was $(3359) for the threesix months ended MarchJune 31,30, 2026 compared to cash used in investing activities of $(173232) for the threesix months ended MarchJune 31,30, 2025. Cash provided by financing activities was $0$4 for the threesix months ended MarchJune 31,30, 2026 compared to net cash of $(95)$255 usedprovided inby financing activities for the threesix months ended MarchJune 31,30, 2025.
IDN insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 4 filings (2 insiders, 4 trade dates, 35,550 shares, about $268.5K; 3 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -35,550 (purchases minus sales); net value about -$268.5K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-07-15 | Ullman David E |
Grant/award | 3,149 | $3.97 | $12.5K |
| 2026-07-15 | Smith Guy L |
Grant/award | 7,557 | $3.97 | $30.0K |
| 2026-07-15 | Glenn Dylan |
Grant/award | 3,149 | $3.97 | $12.5K |
| 2026-07-15 | Black Dondi |
Grant/award | 1,259 | $3.97 | $5.0K |
| 2026-06-15 | Robins Jonathan |
Open-market sale | 5,550 | $4.22 | $23.4K |
| 2026-05-01 | Lewis Bryan |
Gift | 6,270 | — | — |
| 2026-04-27 | Lewis Bryan |
Open-market sale |
10,000 | $8.05 | $80.5K |
| 2026-04-20 | Lewis Bryan |
Open-market sale |
10,000 | $8.51 | $85.1K |
| 2026-04-13 | Lewis Bryan |
Open-market sale |
10,000 | $7.95 | $79.5K |
Well-known investors holding IDN (13F)
None of the 59 investors we track reported a position in their latest 13F.