Intellicheck(IDN) - 2025 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Unaudited Condensed Financial Statements The company reported increased revenues and assets in Q1 2025, with a reduced net loss and sufficient liquidity for the next 12 months Condensed Balance Sheets Total assets increased to $24.6 million by March 31, 2025, driven by higher receivables and deferred revenue, while liabilities also rose Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $5,148 | $4,666 | | Accounts receivable, net | $7,506 | $4,675 | | Total current assets | $13,527 | $9,912 | | Total assets | $24,561 | $20,933 | | Deferred revenue | $4,518 | $1,001 | | Total current liabilities | $6,953 | $3,186 | | Total stockholders' equity | $17,608 | $17,747 | Unaudited Condensed Statements of Operations Q1 2025 revenues increased by 4.6% to $4.9 million, leading to a reduced net loss of $318 thousand compared to the prior year Q1 2025 vs. Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $4,894 | $4,680 | | Gross Profit | $4,392 | $4,245 | | Total Operating Expenses | $4,740 | $4,768 | | Loss from Operations | ($348) | ($523) | | Net Loss | ($318) | ($442) | | Loss per Share (Basic/Diluted) | ($0.02) | ($0.02) | Unaudited Condensed Statements of Cash Flows Net cash from operations was $750 thousand in Q1 2025, with cash and equivalents ending at $5.1 million, impacted by investing activities Cash Flow Summary (in thousands) | Cash Flow Activity | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $750 | $869 | | Net cash (used in) provided by investing activities | ($173) | $4,390 | | Net cash (used in) financing activities | ($95) | $0 | | Net increase in cash | $482 | $5,259 | | Cash, end of period | $5,148 | $9,239 | Notes to Unaudited Condensed Financial Statements Notes detail the company's identity verification business, liquidity, revenue recognition, customer concentration, and legal matters - The company develops and markets identity verification solutions for fraud prevention, primarily in commercial retail and banking[18] - Management expects existing cash and future revenues to satisfy working capital requirements for at least the next 12 months from the filing date[19] Revenue Disaggregation by Type (in thousands) | Product/Service | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | SaaS | $4,868 | $4,609 | | Equipment | $6 | $55 | | Other | $20 | $16 | | Total | $4,894 | $4,680 | - In Q1 2025, three customers accounted for 56% of total revenues (28%, 19%, and 9% respectively) and 81% of total accounts receivable[62] - A class action complaint filed in March 2024 alleging violations of the Illinois Biometric Information Privacy Act was dismissed in April 2025, and no liability has been recognized[94] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) MD&A highlights 5% revenue growth, improved net loss, sufficient liquidity, and better non-GAAP Adjusted EBITDA in Q1 2025 Results of Operations Q1 2025 revenues increased 5% to $4.9 million, primarily from SaaS, leading to a reduced net loss despite a slight gross margin decrease - Revenues increased 5% to $4,894 thousand in Q1 2025 from $4,680 thousand in Q1 2024[109] - The increase in revenue was primarily driven by a 6% increase in SaaS revenue, which rose to $4,867 thousand[109] - Gross profit as a percentage of revenue was 90% for Q1 2025, compared to 91% for Q1 2024[110] - Net loss improved to $(318) thousand in Q1 2025 from a net loss of $(442) thousand in Q1 2024[111] Liquidity and Capital Resources The company maintains $5.1 million in cash and $6.6 million in working capital, with a $2 million unused credit facility, ensuring liquidity for 12 months - As of March 31, 2025, the company had cash and cash equivalents of $5,148 thousand and working capital of $6,574 thousand[112] - The company has an available $2,000 thousand revolving line of credit with no outstanding balance as of March 31, 2025[75][114] - Management believes current resources are sufficient to meet anticipated working capital and capital expenditure requirements for at least the next 12 months[114] Use of Non-GAAP Measures Non-GAAP measures show improved Adjusted Gross Profit of $4.5 million and a narrowed Adjusted EBITDA loss of $17 thousand in Q1 2025 Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(318) | $(442) | | Other income and expense, net | $(30) | $(83) | | Depreciation and amortization | $154 | $72 | | Stock-based compensation | $177 | $334 | | Adjusted EBITDA | $(17) | $(117) | Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross Profit | $4,392 | $4,245 | | Add: Amortization allocable to cost of revenues | $103 | $24 | | Adjusted Gross Profit | $4,495 | $4,269 | Item 3. Quantitative and Qualitative Disclosures About Market Risk This section is not applicable as the company qualifies as a smaller reporting company - Disclosure is not applicable as the company is a smaller reporting company[126] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Management concluded that the Company's internal control over financial reporting was effective as of March 31, 2025[127] - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal controls[129] Part II – OTHER INFORMATION Item 1. Legal Proceedings The company is not involved in material legal proceedings, with a previously disclosed class action lawsuit dismissed in April 2025 - The company is not currently involved in any material legal proceedings, and management does not expect pending matters to have a material adverse effect[131] - A class action complaint served in March 2024 was dismissed in April 2025[94] Item 1A. Risk Factors No material changes to risk factors were reported since the 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors described in the company's 2024 Annual Report on Form 10-K[133] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported during the period - None[134] Item 5. Other Information No directors or officers reported changes to Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - During the quarter, no directors or officers reported the adoption, modification, or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement"[135] Item 6. Exhibits This section lists key exhibits filed with the Form 10-Q, including the 2025 Omnibus Incentive Plan and required certifications - Key exhibits filed with the report include: - Intellicheck, Inc. 2025 Omnibus Incentive Plan - Rule 13a-14(a) Certifications of CEO and CFO - Section 1350 Certifications - XBRL Instance Document and related files[137]