Intellicheck(IDN) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Unaudited Condensed Financial Statements This section presents the unaudited condensed financial statements for the three and six months ended June 30, 2025, and 2024, covering balance sheets, operations, equity, and cash flows Condensed Balance Sheets Total assets increased to $23,066 thousand by June 30, 2025, from $20,933 thousand at year-end 2024, driven by higher cash and deferred revenue, with stockholders' equity reaching $18,005 thousand Condensed Balance Sheets (in thousands) | | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | ASSETS | | | | Cash and cash equivalents | $8,573 | $4,666 | | Accounts receivable, net | $2,676 | $4,675 | | Total current assets | $12,143 | $9,912 | | Total assets | $23,066 | $20,933 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Deferred revenue | $3,038 | $1,001 | | Total current liabilities | $5,061 | $3,186 | | Total liabilities | $5,061 | $3,186 | | Total stockholders' equity | $18,005 | $17,747 | | Total liabilities and stockholders' equity | $23,066 | $20,933 | Unaudited Condensed Statements of Operations Q2 2025 revenues grew 9.6% year-over-year to $5,123 thousand, but increased operating expenses led to a wider net loss of $251 thousand, while H1 net loss remained flat at $569 thousand Condensed Statements of Operations (in thousands) | | Three months ended June 30, | Six months ended June 30, | | :--- | :--- | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | REVENUES | $5,123 | $4,672 | $10,017 | $9,352 | | Gross profit | $4,600 | $4,228 | $8,992 | $8,473 | | Total operating expenses | $4,898 | $4,443 | $9,638 | $9,197 | | Loss from operations | $(298) | $(215) | $(646) | $(724) | | Net loss | $(251) | $(127) | $(569) | $(569) | | Loss per common share - Basic/Diluted | $(0.01) | $(0.01) | $(0.03) | $(0.03) | Unaudited Condensed Statements of Stockholders' Equity Total stockholders' equity increased from $17,747 thousand at the end of 2024 to $18,005 thousand as of June 30, 2025, driven by stock-based compensation and option exercises, partially offset by net loss - For the six months ended June 30, 2025, stockholders' equity increased by $258 thousand, from $17,747 thousand to $18,005 thousand. This change was influenced by $381 thousand in stock-based compensation and $446 thousand from stock option exercises, offset by a net loss of $569 thousand[15] Unaudited Condensed Statements of Cash Flows Operating cash flow significantly improved to $3,884 thousand for H1 2025, from $312 thousand used in H1 2024, increasing cash and cash equivalents to $8,573 thousand Condensed Statements of Cash Flows (in thousands) | | Six months ended June 30, | | :--- | :--- | :--- | | | 2025 | 2024 | | Net cash provided by (used in) operating activities | $3,884 | $(312) | | Net cash (used in) provided by investing activities | $(232) | $3,592 | | Net cash provided by financing activities | $255 | $— | | Net increase in cash | $3,907 | $3,280 | | CASH, end of period | $8,573 | $7,260 | Notes to Unaudited Condensed Financial Statements Notes detail the company's identity verification business, confirm 12-month liquidity, outline key accounting policies, and highlight SaaS revenue dominance and customer concentration - The company develops, integrates, and markets identity verification solutions for fraud prevention in commercial retail and banking[21] - Management expects existing cash and future revenues to satisfy working capital requirements for at least the next 12 months from the filing date[22] Disaggregation of Revenue (in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | SaaS | $5,080 | $4,627 | $9,948 | $9,236 | | Equipment | $— | $40 | $6 | $95 | | Other | $43 | $5 | $63 | $21 | | Total | $5,123 | $4,672 | $10,017 | $9,352 | - For the six months ended June 30, 2025, three customers accounted for approximately 58% of total revenues (31%, 18%, and 9%, respectively)[65] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Q2 2025 revenue grew 10% to $5,123 thousand, but increased operating expenses led to a wider net loss of $251 thousand, while H1 net loss remained flat and liquidity improved significantly with cash from operations at $3,884 thousand - Q2 2025 vs Q2 2024 Performance: - Revenues increased by 10% ($451 thousand) to $5,123 thousand, primarily from higher SaaS revenue - Gross profit rose by 9% ($372 thousand), with the gross margin slightly decreasing from 91% to 90% - Operating expenses increased by 10% ($455 thousand), mainly due to less capitalization of R&D costs - Net loss widened to $(251) thousand from $(127) thousand[110][111][112] - Six Months 2025 vs Six Months 2024 Performance: - Revenues increased by 7% ($665 thousand) to $10,017 thousand, driven by higher SaaS transaction volumes - Gross profit grew by 6% ($519 thousand), with the gross margin slightly decreasing from 91% to 90% - Net loss remained unchanged at $(569) thousand[115][116][118] - As of June 30, 2025, the company had cash and cash equivalents of $8,573 thousand and working capital of $7,082 thousand. Cash from operations for the first six months of 2025 was $3,884 thousand, a significant improvement from a $312 thousand use of cash in the prior-year period[119][120] Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA (in thousands) | | Three Months Ended June 30 | Six Months Ended June 30 | | :--- | :--- | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | Net loss | $(251) | $(127) | $(569) | $(569) | | Reconciling items | $420 | $145 | $627 | $395 | | Adjusted EBITDA | $75 | $(70) | $58 | $(174) | Item 3. Quantitative and Qualitative Disclosures About Market Risk This disclosure is not applicable as the company qualifies as a smaller reporting company - Disclosure is not applicable to smaller reporting companies[134] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Based on an evaluation as of June 30, 2025, management, including the CEO and CFO, concluded that the company's internal control over financial reporting was effective[135] - No changes occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[137] Part II – OTHER INFORMATION Item 1. Legal Proceedings The company is not involved in material legal proceedings, and management expects no adverse financial impact from pending or threatened matters - The company is not currently involved in any material legal proceedings, and management does not expect pending matters to have a material adverse effect[139] Item 1A. Risk Factors No material changes have occurred to the risk factors previously disclosed in the company's 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[141] 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 reported for the period[142] Item 3. Defaults Upon Senior Securities No defaults upon senior securities were reported - None reported[142] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[142] Item 5. Other Information No directors or officers adopted, modified, or terminated Rule 10b5-1 trading arrangements during Q2 2025 - During the three months ended June 30, 2025, no directors or officers informed the company of the adoption, modification, or termination of a Rule 10b5-1 trading arrangement[143] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - The exhibits filed with this report include CEO and CFO certifications and XBRL interactive data files[144] Signatures The report was signed and authorized on August 12, 2025, by the President and CEO, Bryan Lewis, and the CFO, Adam Sragovicz - The report was signed on August 12, 2025, by Bryan Lewis (President and CEO) and Adam Sragovicz (CFO)[148][149]