[Filing Information and Corporate Details](index=1&type=section&id=Filing%20Information%20and%20Corporate%20Details) [Form 10-Q General Information](index=1&type=section&id=1.1.%20Form%2010-Q%20General%20Information) This section details the filing as a Quarterly Report (Form 10-Q) for the period ended June 30, 2025, for authID Inc., a Delaware corporation. It specifies the company's filing status as a non-accelerated filer and smaller reporting company, and lists the common stock trading on NASDAQ - The filing is a **Quarterly Report (Form 10-Q)** for the period ended **June 30, 2025**[1](index=1&type=chunk) Metric | Value | :-------------------------------- | :-------------------- | | Registrant Name | authID Inc. | | State of Incorporation | Delaware | | Commission File Number | 001-40747 | | Trading Symbol | AUID | | Exchange | The NASDAQ Stock Market LLC | | Filer Status | Non-accelerated filer, Smaller reporting company | | Common Stock Outstanding (Aug 12, 2025) | 13,443,740 shares | [Registrant Information](index=1&type=section&id=1.2.%20Registrant%20Information) This section provides the corporate contact details for authID Inc. and confirms its compliance with SEC filing requirements, including electronic submission of Interactive Data Files, and clarifies that it is not a shell company - The registrant's principal executive offices are located at 1580 North Logan Street, Suite 660, Unit 51767, Denver, CO 80203, with a telephone number of 516-274-8700[3](index=3&type=chunk) - The registrant has filed all required reports during the preceding **12 months** and has been subject to filing requirements for the past **90 days** (**Yes**)[4](index=4&type=chunk) - The registrant has submitted electronically every Interactive Data File required during the preceding **12 months** (**Yes**)[5](index=5&type=chunk) - The registrant is not a shell company (**No**)[7](index=7&type=chunk) [Forward-Looking Statements and Risk Factors](index=4&type=section&id=1.3.%20Forward-Looking%20Statements%20and%20Risk%20Factors) This section includes a cautionary statement regarding forward-looking information, emphasizing that actual results may differ materially due to various known and unknown risks. It lists several key risk factors, such as lack of significant revenues, market acceptance, ability to raise capital, and macroeconomic conditions - Forward-looking statements are based on current expectations and future events, but actual results may differ materially due to known and unknown risks[11](index=11&type=chunk) - Key risk factors include: lack of significant revenues, positive cash flow and history of losses; market acceptance of products and competition; ability to attract and retain customers and key personnel; reliance on third-party software; security breaches; ability to raise capital; ability to maintain Nasdaq listing; intellectual property protection; ability to operate in non-US markets; impact of global conflicts; stock price volatility; legislation and government regulation; and general economic conditions, inflation and access to capital[17](index=17&type=chunk) [Company Information and Definitions](index=4&type=section&id=1.4.%20Company%20Information%20and%20Definitions) This section defines the terms 'authID,' 'Company,' 'we,' 'our,' 'us,' and similar terms as referring to authID Inc., a Delaware corporation, and its subsidiaries. It also clarifies that information on the company's website is not part of this report - The terms 'authID,' 'Company,' 'we,' 'our,' 'us,' and similar terms refer to authID Inc., a Delaware corporation, and its subsidiaries[15](index=15&type=chunk) - Information on the company's website (www.authID.ai) is not incorporated into this report[16](index=16&type=chunk) [PART I – FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for authID Inc. and its subsidiaries, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with accompanying notes. These statements are prepared in accordance with Form 10-Q instructions and GAAP, with certain information condensed or omitted - The financial statements are **unaudited** and prepared in accordance with **Form 10-Q instructions**, including only normal recurring accruals[32](index=32&type=chunk) - Certain information and footnote disclosures normally included in GAAP consolidated financial statements have been **condensed or omitted**[32](index=32&type=chunk) - The consolidated financial statements include authID Inc. and its wholly-owned subsidiaries, with all significant intercompany balances and transactions **eliminated**[33](index=33&type=chunk) [Condensed Consolidated Balance Sheets](index=6&type=page&id=2.1.1.%20Condensed%20Consolidated%20Balance%20Sheets) Metric | June 30, 2025 | December 31, 2024 | :-------------------------- | :-------------- | :---------------- | | **ASSETS** | | | | Cash | $8,300,280 | $8,471,561 | | Accounts receivable, net | $1,079,776 | $97,897 | | Contract assets | $564,070 | $426,859 | | Deferred contract costs | $697,304 | $617,918 | | Other current assets, net | $833,875 | $460,192 | | Total current assets | $11,475,305 | $10,074,427 | | Intangible Assets, net | $154,977 | $213,718 | | Goodwill | $4,183,232 | $4,183,232 | | Total assets | $15,813,514 | $14,471,377 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Accounts payable and accrued expenses | $1,357,194 | $1,715,410 | | Commission liability | $308,194 | $459,657 | | Severance liability | $- | $325,000 | | Convertible debt, net | $- | $240,884 | | Deferred revenue | $1,154,402 | $215,237 | | Total current liabilities | $2,819,790 | $2,956,188 | | Total liabilities | $2,819,790 | $2,956,188 | | Common stock, par value $0.0001 | $1,344 | $1,092 | | Additional paid-in capital | $195,515,123 | $185,312,508 | | Accumulated deficit | $(182,532,775) | $(173,808,529) | | Accumulated comprehensive income | $10,032 | $10,118 | | Total stockholders' equity | $12,993,724 | $11,515,189 | | Total liabilities and stockholders' equity | $15,813,514 | $14,471,377 | [Condensed Consolidated Statements of Operations](index=7&type=page&id=2.1.2.%20Condensed%20Consolidated%20Statements%20of%20Operations) Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | :---------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Revenues, net | $1,444,599 | $280,438 | $1,740,855 | $437,816 | | General and administrative | $3,906,933 | $2,169,160 | $6,552,633 | $4,231,521 | | Research and development | $1,978,871 | $1,392,103 | $3,977,534 | $2,597,071 | | Depreciation and amortization | $30,249 | $44,004 | $60,441 | $87,412 | | Total operating expenses | $5,916,053 | $3,605,267 | $10,590,608 | $6,916,004 | | Loss from continuing operations | $(4,471,454) | $(3,324,829) | $(8,849,753) | $(6,478,188) | | Interest expense, net | $(171) | $(10,369) | $(12,883) | $(23,507) | | Interest income | $86,846 | $73,957 | $138,390 | $182,877 | | Other income (expense), net | $86,675 | $63,588 | $125,507 | $159,370 | | Loss from continuing operations before income taxes | $(4,384,779) | $(3,261,241) | $(8,724,246) | $(6,318,818) | | Net loss | $(4,384,779) | $(3,261,241) | $(8,724,246) | $(6,318,818) | | Net Loss Per Share - Basic and Diluted | $(0.33) | $(0.34) | $(0.72) | $(0.67) | | Weighted Average Shares Outstanding - Basic and Diluted | 13,222,454 | 9,501,691 | 12,078,039 | 9,475,956 | [Condensed Consolidated Statements of Comprehensive Loss](index=8&type=page&id=2.1.3.%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | :-------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Net Loss | $(4,384,779) | $(3,261,241) | $(8,724,246) | $(6,318,818) | | Foreign currency translation loss | $122 | $(10,594) | $(86) | $(6,516) | | Comprehensive loss | $(4,384,657) | $(3,271,835) | $(8,724,332) | $(6,325,334) | [Condensed Consolidated Statements of Stockholders' Equity](index=9&type=page&id=2.1.4.%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) - Total stockholders' equity as of **June 30, 2025**, was **$12,993,724**, compared to **$11,515,189** as of **December 31, 2024**[28](index=28&type=chunk) - During the six months ended **June 30, 2025**, the company issued common stock for cash, net of offering costs, totaling **$8,464,327**[28](index=28&type=chunk) - Stock-based compensation for the six months ended **June 30, 2025**, was **$1,001,207**[28](index=28&type=chunk) - The accumulated deficit increased to **$(182,532,775)** as of **June 30, 2025**, from **$(173,808,529)** at **December 31, 2024**, primarily due to a net loss of **$(8,724,246)**[28](index=28&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=page&id=2.1.5.%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | :---------------------------------- | :----------------------------- | :----------------------------- | | Net cash flows from operating activities | $(8,388,822) | $(5,749,651) | | Net cash flows from investing activities | $(1,700) | $(15,582) | | Net cash flows from financing activities | $8,219,327 | $10,001,398 | | Effect of Foreign Currencies | $(86) | $(5,871) | | Net Change in Cash | $(171,281) | $4,230,294 | | Cash, Beginning of the Period | $8,471,561 | $10,177,099 | | Cash, End of the Period | $8,300,280 | $14,407,393 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=page&id=2.1.6.%20Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures and explanations for the figures presented in the condensed consolidated financial statements, covering accounting policies, significant estimates, and specific financial line items [NOTE 1 – BASIS OF PRESENTATION](index=11&type=page&id=2.1.6.1.%20NOTE%201%20%E2%80%93%20BASIS%20OF%20PRESENTATION) - As of **June 30, 2025**, the Company had an accumulated deficit of approximately **$182.5 million** and incurred a net loss of approximately **$8.7 million** for the six months ended **June 30, 2025**[34](index=34&type=chunk) - The Company used approximately **$8.4 million** to fund its operations for the six months ended **June 30, 2025**[34](index=34&type=chunk) - The continuation of the Company as a going concern is dependent upon financial support, additional financing, and generating sufficient cash flows, leading to **substantial doubt about its ability to continue as a going concern**[35](index=35&type=chunk)[36](index=36&type=chunk) Potentially Dilutive Securities Excluded from Diluted Loss Per Share | Security | 2025 | 2024 | | :---------------------- | :----- | :----- | | Convertible notes payable | - | 8,277 | | Warrants | 719,965 | 697,446 | | Stock options | 2,249,454 | 1,852,819 | | **Total** | **2,969,419** | **2,558,542** | - Deferred revenue contract liabilities were approximately **$1.15 million** as of **June 30, 2025**, up from **$0.22 million** as of **December 31, 2024**, and are expected to be earned over the next twelve months[42](index=42&type=chunk) - The Company's Remaining Performance Obligation (RPO) was **$13.77 million** as of **June 30, 2025**, with approximately **39%** expected to be recognized as revenue over the next twelve months[43](index=43&type=chunk) Changes in Allowance for Credit Losses | Metric | June 30, 2025 | | :-------------------------- | :-------------- | | Balance at December 31, 2024 | $149,720 | | Provision for expected credit loss | $769,214 | | Write-offs, net | $(193,176) | | Balance at June 30, 2025 | $725,758 | - As of **June 30, 2025**, **one customer** accounted for **92%** of gross accounts receivable, and **two customers** represented **73%** of revenue for the six months ended **June 30, 2025**[48](index=48&type=chunk)[49](index=49&type=chunk) - As of **June 30, 2025**, **two customers** accounted for **78%** of the Company's Remaining Performance Obligation[51](index=51&type=chunk) [NOTE 2 – OTHER CURRENT ASSETS](index=14&type=page&id=2.1.6.2.%20NOTE%202%20%E2%80%93%20OTHER%20CURRENT%20ASSETS) Other Current Assets | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Prepaid third-party and related party services | $433,502 | $337,873 | | Prepaid insurance | $319,190 | $141,002 | | Commissions advances | $62,500 | $- | | **Total Other Current Assets** | **$833,875** | **$460,192** | [NOTE 3 – INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL)](index=14&type=page&id=2.1.6.3.%20NOTE%203%20%E2%80%93%20INTANGIBLE%20ASSETS,%20NET%20(OTHER%20THAN%20GOODWILL)) Intangible Assets Activity (Six Months Ended June 30, 2025) | Item | Acquired and Developed Software | Patents | Total | | :-------------------------- | :---------------------------- | :-------- | :-------- | | Carrying Value at Dec 31, 2024 | $99,819 | $113,899 | $213,718 | | Additions | $- | $1,700 | $1,700 | | Amortization | $(51,275) | $(9,166) | $(60,441) | | Carrying Value at June 30, 2025 | $48,544 | $106,433 | $154,977 | - Amortization expense totaled approximately **$60,000** for the six months ended **June 30, 2025**, compared to **$87,000** for the same period in **2024**[55](index=55&type=chunk) Future Expected Amortization of Intangible Assets | Year | Amount | | :-------------------------- | :------- | | 2025 (Remainder of the Year) | $26,860 | | 2026 | $37,226 | | 2027 | $30,442 | | 2028 | $18,389 | | 2029 | $18,389 | | Thereafter | $23,671 | | **Total** | **$154,977** | [NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES](index=15&type=page&id=2.1.6.4.%20NOTE%204%20%E2%80%93%20ACCOUNTS%20PAYABLE%20AND%20ACCRUED%20EXPENSES) Accounts Payable and Accrued Expenses | Item | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :-------------- | :---------------- | | Trade payables | $564,892 | $317,030 | | Accrued payroll and related obligations | $447,237 | $984,536 | | Other accrued expenses | $345,065 | $413,844 | | **Total** | **$1,357,194** | **$1,715,410** | [NOTE 5 – CONVERTIBLE NOTES PAYABLE](index=15&type=page&id=2.1.6.5.%20NOTE%205%20%E2%80%93%20CONVERTIBLE%20NOTES%20PAYABLE) - The Company issued Senior Secured Convertible Notes with an initial principal amount of approximately **$9.2 million** and a conversion price of **$3.70 per share** on **March 21, 2022**[58](index=58&type=chunk) - The Convertible Notes matured on **March 31, 2025**, and accrued interest at an annual rate of **9.75%**[59](index=59&type=chunk) - The outstanding Convertible Notes and accrued interest were **paid in full** on **March 31, 2025**[60](index=60&type=chunk) [NOTE 6 – RELATED PARTY TRANSACTIONS](index=16&type=page&id=2.1.6.6.%20NOTE%206%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) - The Company has a services agreement with The Pipeline Group, Inc. (TPG), where Ken Jisser, a Company director, is the founder and CEO. TPG provides outsourced sales services for **$70,000 per month**[61](index=61&type=chunk) - Total expense incurred under the TPG contract was approximately **$210,000** for the three months and **$420,000** for the six months ended **June 30, 2025**[61](index=61&type=chunk) - Dale Daguro, the brother of CEO Rhon Daguro, is employed as VP Sales, earning approximately **$97,000** (three months) and **$151,000** (six months) in base salary and sales commission during the period ended **June 30, 2025**[62](index=62&type=chunk) [NOTE 7 – STOCKHOLDERS' EQUITY](index=16&type=page&id=2.1.6.7.%20NOTE%207%20%E2%80%93%20STOCKHOLDERS'%20EQUITY) - During the six months ended **June 30, 2025**, the Company issued **1,811,120 shares** of common stock and pre-funded warrants for approximately **$6.8 million** net cash proceeds, and an additional **373,060 shares** for approximately **$1.6 million** net cash proceeds through registered direct offerings[63](index=63&type=chunk) - **200,000 shares** of common stock were issued under restricted stock awards (RSAs) to non-employee advisors, with a total grant-date fair value of **$1,594,000**[63](index=63&type=chunk)[66](index=66&type=chunk) Warrant Activity (Six Months Ended June 30, 2025) | Metric | Number of Warrants | Weighted Average Exercise Price | Weighted Average Remaining Life | | :-------------------------- | :----------------- | :------------------------------ | :------------------------------ | | Outstanding, December 31, 2024 | 697,446 | $11.20 | 3.2 Years | | Granted | 210,019 | $4.70 | 4.8 Years | | Exercised/Cancelled | (187,500) | $3.16 | - | | Outstanding, June 30, 2025 | 719,965 | $11.40 | 3.2 Years | - As of **June 30, 2025**, there was approximately **$3.3 million** of unrecognized compensation costs related to stock options outstanding, to be expensed through **2027**[71](index=71&type=chunk) - Stockholders approved an increase of **295,000 shares** allocated to the **2024 Equity Incentive Plan**, with **322,872 shares** available for issuance as of **June 30, 2025**[72](index=72&type=chunk) [NOTE 8 – COMMITMENTS AND CONTINGENCIES](index=19&type=page&id=2.1.6.8.%20NOTE%208%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) - The Company is a party to various legal or administrative proceedings in the ordinary course of business, but management believes the outcome will **not have a material adverse effect** on financial condition or results of operations[73](index=73&type=chunk) [NOTE 9 – SEGMENT INFORMATION](index=19&type=page&id=2.1.6.9.%20NOTE%209%20%E2%80%93%20SEGMENT%20INFORMATION) - The Company operates in a **single operating and reportable segment**, with the Chief Executive Officer (CODM) assessing overall performance and allocating resources based on consolidated net income (loss)[74](index=74&type=chunk) [NOTE 10 – SUBSEQUENT EVENTS](index=19&type=page&id=2.1.6.10.%20NOTE%2010%20%E2%80%93%20SUBSEQUENT%20EVENTS) - **There are no subsequent events to report**[75](index=75&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, and future outlook, based on the unaudited financial statements. It discusses the business overview, platform, key trends, liquidity, and the impact of macro-economic conditions - The discussion is based on financial statements prepared in accordance with **U.S. GAAP**, requiring estimates and assumptions that affect reported amounts[76](index=76&type=chunk) - Management evaluates estimates and judgments on an ongoing basis, basing them on historical experience and reasonable factors[76](index=76&type=chunk) [Overview of Business and Platform](index=20&type=page&id=2.2.1.%20Overview%20of%20Business%20and%20Platform) - authID Inc. provides a **patented, biometric identity platform** to ensure secure customer and employee logins and transactions, offering biometric identity verification (Proof), biometric identity authentication (Verified), and account/access recovery[78](index=78&type=chunk)[79](index=79&type=chunk)[81](index=81&type=chunk)[83](index=83&type=chunk) - The PrivacyKey™ solution enables biometric authentication without storing biometric data, achieving a **1-to-1-billion false match rate** at a **0.3% false rejection rate**[82](index=82&type=chunk) - The platform aims to **stop fraud at onboarding, block deepfakes, prevent account takeover, and eliminate password risks** through a faster, frictionless, and accurate user identity experience[78](index=78&type=chunk) [Key Customer Benefits](index=21&type=page&id=2.2.2.%20Key%20Customer%20Benefits) - The authID platform allows enterprise customers to verify and authenticate users, benefit from **high-speed processing (less than 700ms response time)**, and precisely identify consumers and employees[84](index=84&type=chunk) - It provides a **seamless user experience**, supports a wide variety of devices, integrates quickly and easily, offers broad identity document coverage, and performs secure biometric verification/authentication without storing biometric data via PrivacyKey technology[84](index=84&type=chunk) [Key Trends and Growth Strategy](index=22&type=page&id=2.2.3.%20Key%20Trends%20and%20Growth%20Strategy) - Financial results are **impacted by market trends** including growing concerns over identity theft, fraud (including AI-assisted fraud), the growth in the sharing economy, and the increase in electronic payments[85](index=85&type=chunk)[92](index=92&type=chunk) - The Company plans to **grow its business** by increasing existing customer usage, adding new customers through direct sales and channel partners, and expanding into new markets and innovation[86](index=86&type=chunk) [Going Concern](index=22&type=page&id=2.2.4.%20Going%20Concern) - As of **June 30, 2025**, the Company had an accumulated deficit of approximately **$182.5 million**, a net loss of approximately **$8.7 million**, and used approximately **$8.4 million** to fund operations for the six months ended **June 30, 2025**[89](index=89&type=chunk) - The Company's continuation as a going concern is dependent on financial support from stockholders, additional debt or equity financing, and generating sufficient cash flows, leading to **substantial doubt about its ability to continue**[90](index=90&type=chunk)[91](index=91&type=chunk) - In **April and May 2025**, the Company raised approximately **$8.5 million** after expenses from existing and new stockholders through registered direct offerings[90](index=90&type=chunk) [Adjusted EBITDA (Non-GAAP)](index=23&type=page&id=2.2.5.%20Adjusted%20EBITDA%20(Non-GAAP)) - **Adjusted EBITDA** is a **non-GAAP financial measure** used by management to assess the performance of fundamental business activities, excluding items like interest, taxes, depreciation, amortization, and stock-based compensation[93](index=93&type=chunk) Reconciliation of Loss from Continuing Operations to Adjusted EBITDA | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Loss from continuing operations | $(4,384,779) | $(3,261,241) | $(8,724,246) | $(6,318,818) | | Addback: Interest expense, net | $171 | $10,369 | $12,883 | $23,507 | | Addback: Interest income | $(86,846) | $(73,957) | $(138,390) | $(182,877) | | Addback: Severance cost | $- | $8,638 | $- | $14,251 | | Addback: Depreciation and amortization | $30,249 | $44,004 | $60,441 | $87,412 | | Addback: Stock compensation | $1,078,201 | $725,704 | $1,532,540 | $1,448,675 | | **Adjusted EBITDA continuing operations (Non-GAAP)** | **$(3,363,004)** | **$(2,546,483)** | **$(7,256,772)** | **$(4,927,850)** | - Adjusted EBITDA has **limitations as an analytical tool**, as it does not reflect cash expenditures, working capital needs, or cash requirements for asset replacement[96](index=96&type=chunk) [Results of Operations (Three and Six Months Ended June 30, 2025 and 2024)](index=24&type=page&id=2.2.6.%20Results%20of%20Operations%20(Three%20and%20Six%20Months%20Ended%20June%2030,%202025%20and%202024)) - Revenues, net, **increased significantly** to approximately **$1.4 million** for the three months ended **June 30, 2025** (from **$0.3 million** in **2024**), and to **$1.7 million** for the six months ended **June 30, 2025** (from **$0.4 million** in **2024**), primarily due to new customer contracts[97](index=97&type=chunk) - General and administrative expenses **increased by approximately $1.6 million** (three months) and **$2.2 million** (six months) due to employee-related expenses, shares issued to management advisors, and an **$0.8 million** provision for estimated credit loss[98](index=98&type=chunk) - Research and development expenses **increased by approximately $0.6 million** (three months) and **$1.4 million** (six months) due to continued investment in employees and contractors for product capabilities[99](index=99&type=chunk) - Depreciation and amortization expenses, and interest expense, net, **remained flat** compared to the prior year periods[100](index=100&type=chunk)[101](index=101&type=chunk) [Liquidity and Capital Resources](index=24&type=page&id=2.2.7.%20Liquidity%20and%20Capital%20Resources) - As of **June 30, 2025**, the Company had approximately **$8.3 million** of cash on hand and **$8.7 million** of working capital[102](index=102&type=chunk) - Cash used in operating activities was approximately **$8.4 million** for the six months ended **June 30, 2025**, compared to **$5.7 million** in the prior year[102](index=102&type=chunk) - Cash provided by financing activities was approximately **$8.2 million** for the six months ended **June 30, 2025**, primarily from the sale of common stock, net of offering costs[103](index=103&type=chunk) - The Company **will need to raise additional funds in 2025** to support operations and investments, with **no guarantee** that such financing will be available on acceptable terms[104](index=104&type=chunk) [Macro-Economic Conditions and Off-Balance Sheet Arrangements](index=25&type=page&id=2.2.8.%20Macro-Economic%20Conditions%20and%20Off-Balance%20Sheet%20Arrangements) - The global economy's political and economic uncertainty, including wars, inflation, and rising interest rates, **impacts spending on identity verification and security**, potentially affecting revenue growth[106](index=106&type=chunk) - The Company has **no off-balance sheet arrangements** that are reasonably likely to have a material adverse effect on its financial condition or results of operations[107](index=107&type=chunk) [Recent Accounting Policies](index=25&type=page&id=2.2.9.%20Recent%20Accounting%20Policies) - Recent material accounting policies critical to understanding financial results and conditions are discussed in **Note 1 of the financial statements**[108](index=108&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, authID Inc. is not required to include disclosures under this item - As a **smaller reporting company**, authID Inc. is **not required** to include disclosure under this item[109](index=109&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025. There were no material changes in internal control over financial reporting during the six months ended June 30, 2025 - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were **effective** as of **June 30, 2025**[110](index=110&type=chunk) - **There were no material changes** in internal control over financial reporting during the six months ended **June 30, 2025**[111](index=111&type=chunk) [PART II – OTHER INFORMATION](index=26&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal or administrative proceedings in the ordinary course of business but does not anticipate any material adverse effect on its financial condition or results of operations from these matters - The Company is a party to various legal or administrative proceedings arising in the ordinary course of business[113](index=113&type=chunk) - Management has **no reason to believe** the outcome of such proceedings will have a material adverse effect on the financial condition or results of operations[113](index=113&type=chunk) [Item 1A. Risk Factors](index=26&type=page&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors previously discussed in the company's Annual Report on Form 10-K for the year ended December 31, 2024, stating that there have been no material changes - Risk factors describing major risks to the business are found in **Item 1A, 'Risk Factors'**, of the Annual Report on Form 10-K for the year ended **December 31, 2024**[114](index=114&type=chunk) - **There has been no material change** in risk factors from those previously discussed in the Annual Report on Form 10-K[114](index=114&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the six months ended June 30, 2025, the company granted 30,000 options to a new employee, exempt from registration requirements under Rule 4(a)(2) and/or Rule 506 of Regulation D - During the six months ended **June 30, 2025**, the Company granted **30,000 options** to a new employee at an exercise price of **$5.89 per share**[115](index=115&type=chunk) - The issuance of these securities is **exempt from registration requirements** under **Rule 4(a)(2)** of the Securities Act of 1933, as amended, and/or **Rule 506** as promulgated under Regulation D[115](index=115&type=chunk) [Item 3. Defaults Upon Senior Securities](index=26&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there are no defaults upon senior securities to report - **There are no defaults upon senior securities to report**[115](index=115&type=chunk) [Item 4. Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - This item is **not applicable** to the Company's operations[116](index=116&type=chunk) [Item 5. Other Information](index=26&type=section&id=Item%205.%20Other%20Information) This section states that no director or officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the six months ended June 30, 2025 - **No director or officer** of the Company adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the six months ended **June 30, 2025**[117](index=117&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate documents, agreements, and certifications, with references to previous filings where applicable - The report includes a **comprehensive list of exhibits**, such as the Amended & Restated Certificate of Incorporation, Bylaws, various agreements (e.g., Securities Purchase Agreements, Engagement Agreements), and certifications (e.g., CEO/CFO certifications)[118](index=118&type=chunk) - Many exhibits are **incorporated by reference** from previous Form 8-K, 10-Q, and 10-K filings with the SEC[119](index=119&type=chunk)[121](index=121&type=chunk)

Core Insights - authID reported its highest quarterly revenue in the company's history for Q2 2025, achieving $1.4 million, a significant increase from $0.3 million in Q2 2024, indicating successful execution of growth strategies [3][5] - The company launched IDX, enhancing its market reach and total addressable market, alongside other product enhancements and a strong sales pipeline, positioning it for continued growth [3][7] Financial Performance - Total revenue for Q2 2025 was $1.4 million, compared to $0.3 million in Q2 2024, marking a 367% increase [5] - For the first half of 2025, total revenue reached $1.7 million, up from $0.4 million in the same period last year [5] - Operating expenses for Q2 2025 were $5.9 million, an increase from $3.6 million in Q2 2024, primarily due to increased headcount and investments in sales and R&D [6] - The net loss for Q2 2025 was $4.5 million, or $0.33 per share, compared to a loss of $3.3 million, or $0.34 per share in Q2 2024 [9][10] - Adjusted EBITDA loss for Q2 2025 was $3.4 million, compared to a loss of $2.5 million in Q2 2024 [11] Business Developments - The launch of IDX, in collaboration with NEC, significantly expands the company's total addressable market in the identity management sector [7] - A paid live production trial agreement was initiated with a Fortune Global 500 company in the UK, with expectations for a longer-term agreement upon completion [7] - The company signed an agreement with Prove, a major identity fraud platform, and is finalizing the launch with its first joint customer [7] - Enhanced PrivacyKeyTM was introduced with a one-to-many search capability, improving speed and accuracy for customers [7] Key Metrics - Remaining Performance Obligation (RPO) as of June 30, 2025, was $13.8 million, up from $4.2 million a year ago, indicating strong future revenue recognition potential [12] - Booked Annual Recurring Revenue (bARR) for Q2 2025 was $2.2 million, a significant increase from $0.6 million in Q2 2024 [13] - The net amount of bARR for the first half of 2025 was $1.8 million, compared to $0.73 million in the same period last year [14] - Annual Recurring Revenue (ARR) as of June 30, 2025, was $5.8 million, up from $1.1 million a year ago [15]

Company Overview - authID is a leading provider of biometric identity verification and authentication solutions, ensuring enterprises "Know Who's Behind the Device™" for every customer or employee login and transaction [4] - The company offers a patented biometric identity platform that powers biometric identity proofing in 700 milliseconds and biometric authentication in 25 milliseconds [4] - authID's PrivacyKey solution boasts a false match rate of 1-to-1 billion while storing no biometric data, effectively stopping fraud at onboarding and preventing account takeovers [4] Financial Results Announcement - authID will report its financial results for the second quarter ended June 30, 2025, on August 14, 2025, after market close [1] - Following the earnings release, the CEO Rhon Daguro and CFO Ed Sellitto will host a webcast at 5:00 p.m. ET to discuss the financial results and provide a corporate update [1] Conference Call Participation - Participants can access a registration link to join the live conference call, with a recommendation to dial in 15 minutes early to avoid delays [2] - A live webcast of the call will also be available on the company's website [2] Event Replay - A replay of the event and a copy of the presentation will be available for 90 days at authID's Investor Relations Events [3]

Core Insights - authID has launched the authID Identity Exchange (IDX), a platform designed to enhance identity security and support Zero Trust architecture by providing passwordless, privacy-first, and interoperable digital credentials [1][4] Group 1: Platform Features - IDX modernizes identity management by utilizing biometric-bound, passwordless credentials to prevent phishing attacks and ensure that only verified users can access sensitive systems and data [1] - The platform allows authorized personnel to create or claim a central credential that can be used across multiple subsidiaries, simplifying workforce identity management [2] - IDX eliminates ghost accounts and shared credentials, automates onboarding through secure document verification, and extends protections to both full-time employees and contractors [3] Group 2: Compliance and Security - IDX is built on the Accountable Digital Identity Association (ADI Association) specification, aligning with global interoperability and data sovereignty standards [4] - The platform employs privacy-preserving biometrics, ensuring compliance with regulations such as GDPR, HIPAA, and BIPA by not storing sensitive biometric data [6] - IDX integrates seamlessly with leading Identity and Access Management (IAM) platforms, enhancing security across devices and locations [6] Group 3: Strategic Partnerships - The development of IDX was in strategic partnership with NESIC, a subsidiary of NEC Corporation, which focuses on integrated IT and network solutions for digital transformation [2][5] - The collaboration aims to create a more secure and connected digital future, with initial use cases targeting enterprise workforce authentication and contractor onboarding [5][7] Group 4: Technological Innovations - IDX combines authID's PrivacyKey biometric protocol with FIDO2 for strong, unphishable, and passwordless logins [6] - The platform utilizes AI-driven identity lifecycle management to reduce IT overhead and ensure policy compliance from onboarding to revocation [6] - IDX is positioned as a foundational shift in enterprise identity management, emphasizing decentralization and privacy [5]

Company Overview - authID Inc. is a leading provider of biometric identity verification and authentication solutions, ensuring enterprises "Know Who's Behind the Device™" for every customer or employee login and transaction [2] - The company offers a patented biometric identity platform that powers biometric identity proofing in 700 milliseconds, biometric authentication in 25 milliseconds, and account recovery with a fast, accurate, user-friendly experience [2] - authID's PrivacyKey™ solution boasts a 1-to-1-billion false match rate while storing no biometric data, effectively stopping fraud at onboarding, blocking deepfakes, preventing account takeover, and eliminating password risks and costs [2] Recent Developments - The Annual Meeting of Shareholders for authID was held via webcast on June 26, 2025, where all nominated directors were elected and all proposed resolutions were adopted [1]

Core Insights - authID and Prove have formed a strategic partnership to combat AI-generated deepfake fraud, enhancing security for enterprise customers against synthetic identities and impersonation attacks [2][3][6] Group 1: Partnership Overview - The partnership aims to leverage advanced biometric technologies to address the growing threat of deepfake fraud, ensuring the integrity of digital identities [2][3] - Prove's CEO emphasized the need for secure, privacy-first solutions to combat the evolving nature of fraud, highlighting authID's PrivacyKey as a critical component [4] Group 2: Technology Integration - authID's biometric technologies, including Proof, Verified, and PrivacyKey, will be integrated into Prove's platform to enhance identity proofing and fraud prevention capabilities [5][7] - The partnership combines authID's industry-leading accuracy with Prove's trusted identity verification, aiming to create frictionless and secure identity experiences in the digital economy [7] Group 3: Market Impact - The collaboration is positioned as a validation of authID's technology and strategic direction, with the potential to set new standards for secure identity verification globally [6] - As Prove expands its global presence, the partnership is expected to provide the scalability and security necessary to address modern digital transformation challenges [6]

Core Insights - authID announced a new integration with Ping Identity to enhance identity proofing and biometric authentication, aiming to eliminate passwords and reduce account takeover fraud [1][2][3] Company Overview - authID provides a patented biometric identity platform that ensures enterprises "Know Who's Behind the Device™" for every login and transaction, with biometric identity proofing in 700 milliseconds and authentication in 25 milliseconds [5] - The company’s PrivacyKey™ solution boasts a false match rate of 1-to-1 billion while storing no biometric data, effectively preventing fraud during onboarding and blocking deepfakes [5] Integration Details - The integration of authID's Verified platform and PrivacyKey™ with PingOne DaVinci allows organizations to seamlessly incorporate biometrics into their onboarding and authentication workflows for both workforce and consumer applications [2][3] - This collaboration aims to improve user experience by eliminating the vulnerabilities associated with passwords and enhancing identity assurance [2][3] Strategic Goals - The CEO of authID emphasized the mission to eradicate identity fraud through secure, frictionless biometric authentication at scale, with the integration accelerating the transition to passwordless security for enterprise customers [3] - Ping Identity's commitment to expanding its technology partner ecosystem is highlighted, aiming to deliver better customer experiences through seamless orchestration [4]

Core Viewpoint - authID is enhancing its Board of Directors by nominating four highly qualified executives to drive growth and value creation for shareholders, with the 2025 Annual Meeting scheduled for June 26, 2025 [2][4]. Group 1: New Board Nominees - The new nominees include Stephen J. Garchik, Ram Menghani, Nicholas Shevelyov, and Shrikrishna Venkataraman, each bringing extensive experience in technology, cybersecurity, and business management [6][10][11][12][13]. - Garchik, as the largest shareholder, has been associated with authID for approximately 10 years and brings valuable business management and operational insights [10]. - Menghani has over 30 years of experience in unified communications and digital transformation, having partnered with major tech companies [11]. - Shevelyov has 30 years of cybersecurity experience and has held key roles in leading cybersecurity initiatives at Silicon Valley Bank [12]. - Venkataraman has a strong track record in leading IPOs and corporate transformations, with experience in finance and cybersecurity governance [13]. Group 2: Company Strategy and Vision - The CEO of authID emphasized the importance of the new nominees in supporting the company's mission to deliver market-leading biometric identity authentication solutions in an AI-driven world [4]. - The company aims to leverage biometrics as a foundational element in enhancing cybersecurity and user privacy as digital transformation accelerates [4]. - authID's biometric identity platform is designed to manage identities securely across borders and verticals while ensuring compliance with international laws [14]. Group 3: Annual Meeting Details - The 2025 Annual Meeting will be held virtually, with proposals to elect directors, ratify auditors, and increase shares allocated to the 2024 Equity Incentive Plan [5][7]. - Stockholders will receive materials related to the meeting via their brokers and are encouraged to vote by proxy [9].

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was approximately $300,000, an increase from $160,000 in the same period last year [19] - Operating expenses for Q1 were $4,700,000 compared to $3,300,000 a year ago, primarily due to increased headcount investments in sales and R&D [19] - Net loss for the quarter was $4,300,000, compared to a net loss of $3,100,000 for the same period last year [19] - Adjusted EBITDA loss was $3,900,000 for Q1, compared to a loss of $2,400,000 for the same period last year [21] - Remaining performance obligation (RPO) as of March 31, 2025, was $13,850,000, a decrease of $410,000 from the prior quarter but an increase from $4,030,000 a year ago [20] Business Line Data and Key Metrics Changes - The company is focusing on large enterprise deals and partnerships, with significant progress reported in contract negotiations with Fortune 500 companies [10][11] - A paid live production trial agreement was signed with a global Fortune 100 retailer to test the product [11] - The company is also in the final stages of contract negotiations with a global Fortune 100 biometric hardware provider [11] Market Data and Key Metrics Changes - The company reported a strong pipeline, generating $13,000,000 in new pipeline in Q1 and approaching $9,000,000 in Q2 [51] - The demand for biometric solutions is increasing due to rising cyber threats and the need for enhanced security measures [8][52] Company Strategy and Development Direction - The company aims to become a leader in the biometric authentication market, focusing on speed, accuracy, privacy, and interoperability [13][14] - Strategic investments have been made in privacy key technology, allowing biometric authentication without storing biometric data [13] - The company is expanding into the public sector and exploring opportunities in smart cities and banking sectors in India and South America [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth prospects, citing a strong pipeline and positive customer feedback [10][16] - The company anticipates signing new customers and achieving significant growth towards its $18,000,000 bookings target for 2025 [18][22] Other Important Information - The company completed two capital raises in April and May, securing nearly $9,000,000 to improve its balance sheet and broaden its investor base [17] - The company was recognized as the best ID management platform in 2025 by FinTech Breakthrough Awards [15] Q&A Session Summary Question: When will the company start seeing leverage from partnerships? - Management indicated that they are already benefiting from partnerships and expect bookings to come as they invest in channel partners [29][30] Question: Why have expenses been high compared to revenue? - Management explained that current expenses are driven by investments in headcount for sales and R&D, which are necessary for future growth [33][34] Question: How many Fortune 500 clients are needed to meet the $18,000,000 bookings target? - Management stated that signing four to five large deals could potentially cover the entire bookings target for the year [41][42] Question: What is the current demand for biometrics? - Management noted a rise in demand, with a significant increase in pipeline generation, driven by the introduction of privacy key technology [51][52]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was approximately $300,000, compared to $160,000 in the same period last year, representing an increase of 87.5% [16] - Operating expenses for Q1 were $4,700,000, up from $3,300,000 a year ago and down from $4,900,000 in the previous quarter [16] - Net loss for the quarter was $4,300,000, compared to a net loss of $3,100,000 for the same period last year [16] - Adjusted EBITDA loss was $3,900,000 for Q1, compared to a loss of $2,400,000 for the same period last year [18] - Remaining performance obligation (RPO) was $13,850,000, a decrease of $410,000 from the prior quarter but an increase from $4,030,000 a year ago [17] Business Line Data and Key Metrics Changes - The company is focusing on large enterprise deals and partnerships, with significant progress reported in contract negotiations with Fortune 500 companies [8][10] - A paid live production trial agreement was signed with a global Fortune 100 retailer, indicating a move towards long-term contracts [10] - The company is also in the final stages of contract negotiations with a major identity fraud platform [10] Market Data and Key Metrics Changes - The company reported generating $13,000,000 in new pipeline in Q1, with expectations to build on this in Q2 [46] - The demand for biometric solutions is increasing, particularly due to rising concerns over cyber attacks and fraud [6][7] Company Strategy and Development Direction - The company aims to become a leader in the biometric authentication market, focusing on speed, accuracy, privacy, and interoperability [12][13] - Strategic investments have been made in privacy key technology, allowing biometric authentication without storing biometric data [12] - The company is expanding into public sector opportunities and smart city projects in South America and India [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the $18,000,000 bookings target for 2025, despite delays in the sales process [19][16] - The macroeconomic environment is seen as dynamic, with potential for increased demand for biometric solutions due to rising fraud [6][7] Other Important Information - The company completed two capital raises in April and May, securing nearly $9,000,000 to improve its balance sheet and broaden its investor base [15] - The company received recognition as the best ID management platform in 2025 by FinTech Breakthrough Awards [14] Q&A Session Summary Question: When will the company start seeing leverage from partnerships? - Management indicated that they are already benefiting from partnerships and expect bookings to follow as they invest in channel partners [25][26] Question: Why are expenses high compared to revenue? - Management explained that current expenses are driven by investments in headcount for sales and R&D, which are necessary for future growth [29][30] Question: How many Fortune 500 clients are needed to meet the $18,000,000 goal? - Management stated that signing four to five large deals could potentially meet the target, with some deals large enough to cover the entire amount [36][37][40]