Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			For the transition period from ________________ to ________________

Commission File No.: 001-15465

Intellicheck, Inc.

(Exact name of Registrant as specified in its charter)


Delaware						11-3234779
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

200 Broadhollow Road, Suite 207, Melville, NY 11747
(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (516) 992-1900

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common stock, $0.001 par value per share

IDN

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.) Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer ☐

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 12, 2024, there were 19,762,311 shares of Common Stock, $0.001 par value, outstanding.

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INTELLICHECK, INC.

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			Page
PART I – FINANCIAL INFORMATION			3

Item 1. Unaudited Condensed Financial Statements			3

Condensed Balance Sheets – September 30, 2024 (Unaudited) and December 31, 2023			3

Unaudited Condensed Statements of Operations for the three and nine months ended September 30, 2024 and 2023			4

Unaudited Condensed Statements of Stockholders’ Equity for the three and nine months ended September 30, 2024 and 2023			6

Unaudited Condensed Statements of Cash Flows for the nine months ended S eptember 30, 2024 and 2023			7

Notes to Unaudited Condensed Financial Statements			8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			23

Item 3. Quantitative and Qualitative Disclosures About Market Risk			27

Item 4. Controls and Procedures			27

Part II – OTHER INFORMATION			28

Item 1. Legal Proceedings			28

Item 1A. Risk Factors			28

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			28

Item 3. Defaults Upon Senior Securities			28

Item 4. Mine Safety Disclosures			29

Item 5. Other Information			29

Item 6. Exhibits			29

Signatures			30

Exhibits


10.1			Separation Agreement dated as of July 12, 2024 by and between the Registrant and Jeffrey Ishmael
10.2			Employment Agreement dated as of July 31, 2024 by and between the Registrant and Adam Sragovicz
31.1			Rule 13a-14(a) Certification of Chief Executive Officer
31.2			Rule 13a-14(a) Certification of Chief Financial Officer
32			U.S.C. Section 1350 Certifications
101.INS			XBRL Instance Document
101.SCH			XBRL Taxonomy Extension Schema
101.CAL			XBRL Taxonomy Extension Calculation Linkbase
101.DEF			XBRL Taxonomy Extension Definition Linkbase
101.LAB			XBRL Taxonomy Extension Label Linkbase
101.PRE			XBRL Taxonomy Extension Presentation Linkbase
104			Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

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PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

INTELLICHECK, INC.

CONDENSED BALANCE SHEETS

(In thousands, except share and per share amounts)


	September 30, 2024		December 31, 2023
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	5,747	$	3,980
Short-term investments	—		5,000
Accounts receivable, net of allowance for credit losses of $100 and $69 at September 30, 2024 and December 31, 2023, respectively	3,374		4,703
Other current assets	525		692
Total current assets	9,646		14,375

PROPERTY AND EQUIPMENT, NET	573		666
GOODWILL	8,102		8,102
INTANGIBLE ASSETS, NET	2,271		575
OTHER ASSETS	90		90
Total assets	$	20,682	$	23,808

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:
Accounts payable	$	848	$	884
Accrued expenses	1,787		3,245
Equity awards liability	—		4
Liability for shares withheld	—		190
Deferred revenue	1,312		2,209
Total current liabilities	3,947		6,532

Total liabilities	3,947		6,532

COMMITMENTS AND CONTINGENCIES (Note 10)

STOCKHOLDERS’ EQUITY:
Preferred stock - $0.01 par value; 30,000 shares authorized; Series A convertible preferred stock, zero shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively	—		—
Common stock - $0.001 par value; 40,000,000 shares authorized;19,550,965 and 19,354,335 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively	19		19
Additional paid-in capital	151,687		150,822
Accumulated deficit	(134,971)		(133,565)
Total stockholders’ equity	16,735		17,276

Total liabilities and stockholders’ equity	$	20,682	$	23,808

See accompanying notes to unaudited condensed financial statements.

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INTELLICHECK, INC.

CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except shares and per share amounts)

(Unaudited)


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

REVENUES	$	4,709	$	4,760	$	14,060	$	13,730
COST OF REVENUES	(424)		(428)		(1,303)		(1,112)
Gross profit	4,285		4,332		12,757		12,618

OPERATING EXPENSES
Selling, general and administrative	4,018		3,677		11,562		11,609
Research and development	1,177		1,550		2,829		4,134
Total operating expenses	5,195		5,227		14,391		15,743

Loss from operations	(910)		(895)		(1,634)		(3,125)

OTHER INCOME
Interest and other income	73		179		230		181
Total other income	73		179		230		181

Net loss before provision for income taxes	(837)		(716)		(1,404)		(2,944)
Provision for income taxes	—		8		2		20

Net loss	$	(837)	$	(724)	$	(1,406)	$	(2,964)

PER SHARE INFORMATION
Loss per common share -
Basic/Diluted	$	(0.04)	$	(0.04)	$	(0.07)	$	(0.15)

Weighted average common shares used in computing per share amounts -
Basic/Diluted	19,499,174		19,278,295		19,390,258		19,209,620

See accompanying notes to unaudited condensed financial statements.

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INTELLICHECK, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except number of shares)

(Unaudited)


	Three months ended September 30, 2024
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount

BALANCE, June 30, 2024	19,492,702	$	19	$	151,422	$	(134,134)	$	17,307

Stock-based compensation	–	–		265		–		265
Stock option exercises, net of cashless exercises	7,064	–		–		–		—
Issuance of shares for vested restricted stock grants	51,199	–		–		–		–
Net loss	–	–		–		(837)		(837)
BALANCE, September 30, 2024	19,550,965	$	19	$	151,687	$	(134,971)	$	16,735


	Three months ended September 30, 2023
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount

BALANCE, June 30, 2023	19,251,920	$	19	$	150,159	$	(133,825)	$	16,353

Stock-based compensation	–	–		381		–		381
Issuance of shares for vested restricted stock grants	47,627	–		–		–		–
Shares forfeited in exchange for withholding taxes	—	–		(3)		—		(3)
Net loss	–	–		–		(724)		(724)
BALANCE, September 30, 2023	19,299,547	$	19	$	150,537	$	(134,549)	$	16,007

See accompanying notes to unaudited condensed financial statements.

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	Nine months ended September 30, 2024
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount

BALANCE, December 31, 2023	19,354,335	$	19	$	150,822	$	(133,565)	$	17,276

Stock-based compensation	–	–		865		–		865
Stock option exercises, net of cashless exercises	11,939	–		–		–		—
Issuance of common stock for vested restricted stock units and earned performance stock units	184,691	–		–		–		–
Net loss	–	–		–		(1,406)		(1,406)
BALANCE, September 30, 2024	19,550,965	$	19	$	151,687	$	(134,971)	$	16,735


	Nine months ended September 30, 2023
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount

BALANCE, December 31, 2022	18,957,366	$	19	$	149,233	$	(131,585)	$	17,667

Stock-based compensation	–	–		1,361		–		1,361
Issuance of common stock for vested restricted stock units and earned performance stock units	366,901	–		–		–		–
Shares forfeited in exchange for withholding taxes	(24,720)	–		(57)		–		(57)
Net loss	–	–		–		(2,964)		(2,964)
BALANCE, September 30, 2023	19,299,547	$	19	$	150,537	$	(134,549)	$	16,007

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INTELLICHECK, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine months ended September 30,
	2024		2023

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,406)	$	(2,964)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	275		210
Stock-based compensation	842		1,347
Allowance for credit losses	(31)		23
Change in accrued interest and accretion of discount on short-term investments	—		(154)
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable	1,360		(1,284)
Decrease in other current assets and long-term assets	167		31
(Decrease) Increase in accounts payable and accrued expenses	(1,493)		431
(Decrease) Increase in deferred revenue	(897)		1,246
(Decrease) in liability for shares surrendered	(190)		—
Net cash used in operating activities	(1,373)		(1,114)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(47)		(68)
Proceeds from maturity of short-term investments	5,000		5,000
Purchases of short-term investments	—		(4,914)
Software development costs	(1,833)		—
Net cash provided by investing activities	3,120		18

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercises of stock options	20		—
Proceeds of insurance financing arrangement	—		49
Withholding taxes paid on RSU vesting	—		(54)
Repayment of insurance financing arrangements	—		(133)
Net cash provided by (used in) financing activities	20		(138)

Net increase (decrease) in cash	1,767		(1,234)

CASH, beginning of period	3,980		5,196

CASH, end of period	$	5,747	$	3,962

Supplemental disclosures of cash flow information:
Cash paid for interest	$	—	$	2
Cash paid for income taxes	$	—	$	78

See accompanying notes to unaudited condensed financial statements.

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INTELLICHECK, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

(All dollar amounts are rounded to thousands, except share and per share data)

(Unaudited)

1. NATURE OF BUSINESS

Business

Intellicheck, Inc. (the “Company” or “Intellicheck”) is a prominent technology company that is engaged in developing, integrating and marketing identity verification solutions to address challenges that include commercial retail and banking fraud prevention. Intellicheck’s products include solutions for preventing identity fraud across any industry delivered via smartphone, tablet, POS integration or other electronic devices. Intellicheck continues to develop and release innovative products based upon its rich patent portfolio consisting of eleven (11) U.S. and one Canadian patents.

Liquidity

For the nine months ended September 30, 2024, the Company incurred a net loss of $(1,406) and used cash in operations of $(1,373). As of September 30, 2024, the Company had cash and cash equivalents of $5,747, working capital (defined as current assets minus current liabilities) of $5,699 and an accumulated deficit of $(134,971). Based on the Company’s business plan and cash resources, Intellicheck expects its existing cash and future resources and revenues generated from operations to satisfy its working capital requirements for at least the next 12 months from the date of filing.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments necessary for a fair presentation of the Company’s financial position at September 30, 2024, the results of operations, and stockholders’ equity for the three and nine months ended September 30, 2024 and 2023 and cash flows for the nine months ended September 30, 2024 and 2023. All such adjustments are of a normal and recurring nature. Interim financial statements are prepared on a basis consistent with the Company’s annual financial statements. Results of operations for the three and nine-month periods ended September 30, 2024, are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2024.

The balance sheet as of December 31, 2023 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements.

References in this Quarterly Report on Form 10-Q to “authoritative guidance” is to the Accounting Standards Codification ("ASC") issued by the Financial Accounting Standards Board (“FASB”).

For further information, refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances reporting requirements under Topic 280. The enhanced disclosure requirements include: title and position of the Chief Operating Decision Maker (CODM), significant segment expenses provided to the CODM, extending certain annual disclosures to interim periods, clarifying 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. This change is effective for fiscal years beginning after December 15, 2023 and interim periods beginning

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after December 15, 2024. This change will apply retrospectively to all periods presented. The Company is currently evaluating the impact of this ASU on its 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.

Use of Estimates

The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s financial statements and accompanying notes. Significant estimates and assumptions that affect amounts reported in the financial statements include impairment consideration and valuation of goodwill and intangible assets, deferred tax valuation allowances, capitalization of software development costs, revenue recognition (including breakage revenue), allowance for credit losses, and the fair value of stock options under the Company’s stock-based compensation plan. Due to the inherent uncertainties involved in making estimates, actual results reported in future periods may be different from those estimates.

Research and Development

Research and development expenses are expensed as incurred and consist primarily of employee-related expenses (such as salaries, taxes, benefits and stock-based compensation), allocated overhead costs and outside services costs related to the development and improvement of the Company's SaaS applications.

Allowance for Credit Losses

Effective January 1, 2023, Intellicheck applied the new standard ASU 2016-13, codified as ASC 326. This impacts how the allowance for credit losses is calculated. Prior to ASC-326, Intellicheck would not recognize bad debt expense until the loss from customer non-payment was probable of occurring. Under the new model, Intellicheck’s allowance for credit losses reflects the Company’s estimate of all expected future credit losses from its current customer balances. Under the new guidance, the Company has applied a loss rate method which takes historical data as the basis for calculating the allowance amount, along with accounting for other factors like current and forecasted market conditions, and potential future impacts to the industry. In estimating whether accounts receivable will be collected, the Company performs evaluations of customers and continuously monitors collections and payments and estimates an allowance for credit losses based on collections experience to date and any specific collection issues that have been identified. The allowance for credit losses is recorded in the period in which revenue is recorded or when collection risk is identified.

Cash and Cash Equivalents

We classify time deposits and other investments that are highly liquid and have maturities of three months or less at the date of purchase as cash equivalents. Our cash and cash equivalents consist primarily of both cash on deposits with banks, which are maintained with major financial institutions in the United States, and money market funds. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000, however amounts may exceed FDIC insured limits. The Company has not experienced any losses with regard to its bank accounts and believes it is not exposed to any risk of loss on its cash bank accounts.

Short-term investments

Short-term investments include investments in U.S. treasury notes. Debt investments with original maturities at the date of purchase greater than approximately three months but less than a year are classified as short-term investments, as they represent the investment of cash available for current operations. All short-term investments that the Company

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holds are classified as "held-to-maturity" as the Company has the intent and ability to hold these investments until maturity. See Note 3 for more detail and a breakdown of the Company's short-term investments.

Property and Equipment

Property and equipment are recorded at cost and are depreciated over their estimated useful lives ranging from three to seven years using the straight-line method. See Note 4.

Goodwill

Goodwill represents the excess of purchase price over the fair value of net assets acquired in business combinations. Pursuant to ASC 350, Intangibles - Goodwill and Other, the Company tests goodwill for impairment on an annual basis in the fourth quarter on December 31, or between annual tests, in certain circumstances. Under authoritative guidance, the Company first assesses qualitative factors to determine whether it is necessary to perform step one of the quantitative goodwill impairment test. An entity is not required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. Events or changes in circumstances which could trigger an impairment review include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, other entity specific events and sustained decreases in share price.

The Company performed its annual impairment test of goodwill in the fourth quarter for the year ended December 31, 2023. For the nine months ended September 30, 2024 and 2023, the Company determined no triggering events existed and as such no impairment charge was required.

Intangible Assets

Intangible assets include patents, copyrights, developed technology and capitalized software development costs. The Company amortizes these assets on a straight-line basis over their estimated useful lives, as it represents the pattern of economic benefits consumed. There were no impairment charges recognized during the three and nine-months ended September 30, 2024 and 2023. See Note 5.

We capitalize internal-use software costs which includes costs incurred in connection with the development of new internal-use software solutions and enhancements to existing software solutions that are expected to result in increased functionality. The costs incurred in the preliminary stages of development are expensed as incurred. Once the software has reached the application development stage, internal and external costs, if direct and incremental, are capitalized until the software is complete and available for its intended use. We evaluate the useful lives of these assets and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. There were no impairments of capitalized software development costs for the three and nine months ended September 30, 2024 and 2023.

Advertising Costs

Advertising costs, which are expensed as incurred, were $327 and $470 for the nine months ended September 30, 2024 and 2023, respectively. Advertising costs were $144 and $99 for the three months ended September 30, 2024 and 2023, respectively. These costs are recorded as a component of selling, general and administrative expenses within the condensed Statements of Operations.

Retirement Plan

The Company has a retirement savings 401(k) plan ("Retirement Plan"). The Retirement Plan permits eligible employees to make voluntary contributions to a trust, up to a maximum of 35% of compensation, subject to certain limitations. The Company has elected to contribute a matching contribution equal to 50% of the first 6% of an eligible employee’s deferral election. The Company’s matching contributions were $0 and $85 for the nine months ended September 30, 2024 and 2023, respectively. The Company’s matching contributions were $0 and $31 for the three months ended September 30, 2024 and 2023, respectively. During the three months ended September 30, 2024, funds from the Retirement Plan's forfeiture account were used to fund the matching contributions in accordance with the terms of the Retirement Plan and as such, the Company recorded no expense during the current period related to its retirement plans. These costs are recorded as a component of selling, general and administrative expenses within the condensed Statements of Operations..

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Shipping Costs

The Company’s shipping and handling costs related to sales are included in cost of revenues for all periods presented. All other shipping and handling costs are included as a component of selling, general and administrative expenses within the condensed Statements of Operations.

Loss Contingencies and Legal Costs

The Company accrues loss contingencies that are believed to be probable and can be reasonably estimated. As events evolve during the administration and litigation process and additional information becomes known, the Company reassesses its estimates related to loss contingencies. Legal costs are expensed in the period in which the costs are incurred.

Sales Taxes

Sales and other taxes collected from customers and remitted to governmental authorities are presented on a net basis and thus excluded from revenues.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes. 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 and net operating loss carryforwards. Deferred tax assets and liabilities are measured using expected tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Deferred tax assets are recognized subject to management’s judgment that realization is more likely than not. The Company has recorded a full valuation allowance against its net deferred tax assets as of September 30, 2024 and December 31, 2023, as it is more likely than not these assets may not be fully realized due to the uncertainty of the realizability of those assets.

Fair Value of Financial Instruments

The Company adheres to the provisions of ASC 820, Fair Value Measurement, which requires the Company to calculate the fair value of financial instruments and include this additional information in the notes to financial statements when the fair value of those financial instruments is different than the book value. The Company’s financial instruments include cash and cash equivalents, short-term investments, accounts receivable, other current assets, accounts payable and accrued expenses. At September 30, 2024 and December 31, 2023, the carrying value of the Company’s financial instruments approximated fair value, due to their short-term nature.

FASB guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

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The three levels of the fair value hierarchy are as follows:


•Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities. The Company's Level 1 assets consisted primarily of cash and cash equivalents as well as short-term investments totaling $5,747 and $8,980 as of September 30, 2024 and December 31, 2023, respectively.
•Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active). Level 2 includes financial instruments that are valued using models or other valuation methodologies. The Company had $0 and $4 of Level 2 liabilities as of September 30, 2024 and December 31, 2023, respectively, for the liability-classified stock options. The fair value of these awards were determined by utilizing a Black-Scholes option pricing model.
•Level 3—Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when the fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The Company had no Level 3 assets or liabilities as of September 30, 2024 and December 31, 2023.

Revenue Recognition and Deferred Revenue

General

Most license fees and services 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, we follow the right to invoice practical expedient meaning we may recognize revenue monthly as invoiced based on its contract terms.

The Company has an additional revenue model where customers purchase a predetermined number of transactions for the term of the contract. Customers are charged a fixed monthly fee for a set number of scans (fixed consideration), with any overages charged on a per scan basis (variable consideration). The Company estimates the amount of unused transactions at the end of each contract period and recognizes a portion of that revenue as breakage revenue each reporting period. If the Company expects the customer to use all transactions in the specified service period, the Company will recognize the transaction price as revenue in the specified service period as the promised units of service are transferred to the customer. Alternatively, if the Company expects that the customer cannot or will not use all transactions in the specified service period (referred to as “breakage”), the Company will recognize the estimated breakage amount as revenue ratably over the service period in proportion to the revenue that the Company will recognize for actual transactions used by the customer in the service period. We do not estimate the variable consideration at any point; rather we calculate and recognize the variable portion at the end of the contract term since these contracts are considered monthly due to the termination clauses included within them. The fixed and variable performance obligations are recognized monthly based on the contract terms.

Invoicing is based on schedules established in customer contracts. Payment terms are generally established from 30 to 60 days from the invoice date. Accordingly, the Company has determined that its contracts do not include a significant financing component. Product returns are estimated and recorded as a reduction to revenue, however, such amounts have been immaterial.

The Company has not capitalized any costs to obtain a contract as the period of amortization for these associated costs would have been recognized over a period that is one year or less and the Company elected the practical expedient to expense those costs as incurred.

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Nature of goods and services

The following is a description of the products and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each:

Software as a Service (SaaS)

Software as a service (SaaS) for hosted subscription services requires the Company to provide a stand-ready obligation and allows customers to access a set of data for a predetermined period of time. As the customer obtains access at a point in time but continues to have access for the remainder of the subscription period, the customer is considered to simultaneously receive and consume the benefits provided by the entity’s performance as the entity performs. Accordingly, the revenue should be recognized over time, under the fixed pricing model, based on the usage of the hosted subscription services, which can vary from month to month. Under the per-scan revenue model, the customer requires access to the Company's hosted subscription service but revenue is recognized over time as the customer scans an identity document.

Equipment Revenue

Revenue from the sale of equipment is recognized at a point in time. The point in time that the revenue is recognized is when the customer has control of the equipment, which is when the customer receives the benefit and the Company’s performance obligation has been satisfied. Depending on the contract terms, that could either be at the time the equipment is shipped or at the time the equipment is received.

Other Revenue

Other Revenues, which historically have not been material, consist primarily of revenues from other subscription and support services, and extended warranties. The Company’s revenues from other subscription and support services includes jurisdictional updates to certain commercial customers and support services particularly to its Defense ID® customers. These subscriptions require continuing service or post contractual customer support and performance. As the customer obtains access at a point in time but continues to have access for the remainder of the subscription period, the customer is considered to simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs. Accordingly, the revenue is recognized over time based on usage, which can vary from month to month. The revenue is typically based on a formula such as number of locations in a given month multiplied by a fee per location.

Extended warranty revenues are generated when a warranty is provided to the customer separately of other performance obligations when the equipment is sold. As the customer obtains access at a point in time and continues to have access for the remainder of the warranty term, the customer is considered to simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs. The related revenue is recognized ratably over the specified term of the warranty period. The extended warranty is separate from the Company’s standard warranty that it receives from its vendor, which is typically one year.

Disaggregation of revenue

In the following tables, revenue is disaggregated by product and service and the timing of revenue recognition.

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	For the Three Months Ended September 30,
	2024		2023
Products and services

SaaS	$	4,661	$	4,635
Equipment	13		106
Other	35		19
	$	4,709	$	4,760

Timing of revenue recognition

Products transferred at a point in time	$	48	$	125
Services transferred over time	4,661		4,635
	$	4,709	$	4,760


	For the Nine Months Ended September 30,
	2024		2023
Products and services

SaaS	$	13,896	$	13,526
Equipment	109		152
Other	55		52
	$	14,060	$	13,730

Timing of revenue recognition

Products transferred at a point in time	$	164	$	204
Services transferred over time	13,896		13,526
	$	14,060	$	13,730

Contract balances

The current portion of deferred revenue at September 30, 2024 and December 31, 2023 was $1,312 and $2,209, respectively, and primarily consists of revenue recognized over time for software license contracts and hosted subscription services. The changes in these balances are related to purchases of a predetermined number of transactions, partially offset by the satisfaction or partial satisfaction of these contracts. Of the December 31, 2023 balance, $2,106 was recognized as revenue in the nine months ended September 30, 2024.

Accounts receivable

Accounts receivable, net of allowance for credit losses, at September 30, 2024 and December 31, 2023 was $3,374 and $4,703, respectively. The allowance for credit losses at September 30, 2024 and December 31, 2023 was $100 and $69, respectively.

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Transaction price allocated to the remaining performance obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period:


	Remainder 2024		2025		2026		Total

SaaS	$	615	$	697	$	—	$	1,312
	$	615	$	697	$	—	$	1,312

All consideration from contracts with customers is included in the amounts presented above.

Business Concentrations and Credit Risk

Financial instruments, which subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company maintains cash with two financial institutions. The Company performs periodic evaluations of the relative credit standing of these institutions.

The Company’s sales are principally made to large retail customers, financial institutions concentrated in the United States of America and to U.S. government entities. The Company performs ongoing credit evaluations, generally does not require collateral, and establishes an allowance for credit losses based upon factors surrounding the credit risk of customers, historical trends, and other market and economic information.

During the nine-month period ended September 30, 2024, the Company made sales to three customers that accounted for approximately 46% of total revenues, 19%, 15% and 12%, respectively, for each customer. The revenue was primarily associated with commercial identity sales customers. These three customers, in addition with one other customer, represented 47% of total accounts receivable at September 30, 2024, 30%, 1%, 6%, and 10%, respectively, for each customer. During the nine-month period ended September 30, 2023, the Company made sales to the same three customers that accounted for approximately 49% of total revenues, 21%, 14% and 14%, respectively. These three customers represented 46% of total accounts receivable at September 30, 2023, 38%, 3%, 5%, respectively.

Net Loss Per Share

Basic net loss per share is computed by dividing the net loss for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss for the period by the weighted average number of shares of common stock and potentially dilutive common stock equivalents outstanding during the period. The dilutive effect of outstanding options and restricted stock is reflected in diluted earnings per share by application of the treasury stock method. The calculation of diluted net loss per share excludes all anti-dilutive shares. In periods of a net loss, all common stock equivalents are considered anti-dilutive.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator:
Net loss	$	(837)	$	(724)	$	(1,406)	$	(2,964)

Denominator:
Weighted average common shares –
Basic/Diluted	19,499,174		19,278,295		19,390,258		19,209,620

Loss per common share
Basic/Diluted	$	(0.04)	$	(0.04)	$	(0.07)	$	(0.15)

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The following table summarizes the common stock equivalents excluded from loss per diluted share because their effect would be anti-dilutive:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Stock options	1,483,007	1,230,905	1,483,007	1,230,905
Restricted stock units	77,869	73,182	77,869	73,182
	1,560,876	1,304,087	1,560,876	1,304,087

Segment Information

The Company adheres to the provisions of ASC 280, Segment Reporting, which establishes standards for the way public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in financial statements issued to shareholders. The Company’s Chief Operating Decision Maker, its Chief Executive Officer (CEO), reviews the financial information presented for purposes of allocating resources and evaluating its financial performance. Accordingly, the Company has determined that it operates in a single reportable segment. All of the Company’s long-lived assets are located in the United States. Since the Company operates in one operating segment, all required financial segment information can be found in the condensed financial statements.

3. CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Short-term investments include investments in U.S. treasury notes. Short-term investments with original maturities of approximately three months or less from the date of purchase are classified within cash and cash equivalents. Debt investments with original maturities at the date of purchase greater than approximately three months but less than one year are classified as short-term investments, as they represent the investment of cash available for current operations. All short-term investments that the Company holds are classified as "held-to-maturity". The Company has accounted for and disclosed the purchase of its short-term investments in accordance with ASC 320, Investments - Debt Securities. The following table summarizes the fair value of cash and cash equivalents, and short-term investments as well as any gross unrealized holding gains and losses as of September 30, 2024 and December 31, 2023. Due to the nature of these assets and

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the short-term nature of the U.S. treasury notes being held to maturity, both these cash and cash equivalents and short-term investments fall under the Level 1 fair value hierarchy as referenced in Note 2.


	As of September 30, 2024
	Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses		Estimated fair value

Cash and cash equivalents	$	5,747	$	—	$	—	$	5,747
U.S. treasury notes	—		—		—		—
Total cash, cash equivalents and short-term investments	$	5,747	$	—	$	—	$	5,747


	As of December 31, 2023
	Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses		Estimated fair value

Cash and cash equivalents	$	3,980	$	—	$	—	$	3,980
U.S. treasury notes (1)	5,000		—		—		5,000
Total cash, cash equivalents and short-term investments	$	8,980	$	—	$	—	$	8,980

(1) These U.S. treasury notes are classified as "held-to-maturity" as they were purchased in August 2023 and matured in January 2024.

The Company did not hold any securities that were in an unrealized loss position for more than 12 months as of September 30, 2024. There were no material realized gains or losses on these specific short-term investments during the three months ended September 30, 2024.

4. PROPERTY AND EQUIPMENT

Property and equipment, net is summarized as follows:


	September 30, 2024		December 31, 2023
Computer equipment and software	$	1,919	$	1,886
Furniture and fixtures	139		139
Office equipment	631		618
	2,689		2,643
Less – Accumulated depreciation	(2,116)		(1,977)
	$	573	$	666

Depreciation expense for the nine months ended September 30, 2024 and 2023 amounted to $139 and $131, respectively. Depreciation expense for the three months ended September 30, 2024 and 2023 amounted to $47 and $45, respectively.

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5. INTANGIBLE ASSETS

The changes in the carrying amount of intangible assets, net for the nine months ended September 30, 2024 were as follows:


Net balance at December 31, 2023	$	575
Addition: Capitalized software costs	1,832
Deduction: Amortization expense	(136)
Net balance at September 30, 2024	$	2,271

The following tables set forth the components of intangible assets as of September 30, 2024 and December 31, 2023:


		As of September 30, 2024
	Estimated Useful Life	Adjusted Carrying Amount		Accumulated Amortization		Net

Patents and copyrights	2-17 years	$	375	$	(319)	$	56
Developed technology	5 years	400		(367)		33
Software development	5 years	$	2,239	$	(57)	$	2,182
		$	3,014	$	(743)	$	2,271

The Company has capitalized $1,833 in software development costs as of September 30, 2024.


		As of December 31, 2023
	Estimated Useful Life	Adjusted Carrying Amount		Accumulated Amortization		Net

Patents and copyrights	2-17 years	$	375	$	(300)	$	75
Developed technology	5 years	400		(307)		93
Software development	5 years	$	407	$	—	407
		$	1,182	$	(607)	$	575

The following summarizes amortization of intangible assets included in the accompanying statements of operations:


	Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Cost of revenues	$	24	$	24	$	71	$	71
Selling, general and administrative	$	3	$	3	$	8	$	8
Research and development	$	57	$	—	$	57	$	—
	$	84	$	27	$	136	$	79

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6. DEBT

Revolving Line of Credit

On February 6, 2019, the Company entered into 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 the Company’s existing fixed income investment account with Citi Personal Wealth Management subject to certain limitations. The facility bears interest at a rate consistent with Citi Personal Wealth Management’s Base Rate (7.50% and 8.50% at September 30, 2024 and December 31, 2023, respectively) minus 2%. Interest is payable monthly and as of September 30, 2024 and December 31, 2023, there were no amounts outstanding 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.

7. ACCRUED EXPENSES

Accrued expenses are comprised of the following:


	September 30, 2024		December 31, 2023
Professional fees	$	75	$	1
Payroll and related	969		1,159
Incentive bonuses	300		824
Sales tax accrual	387		1,064
Other	56		197
	$	1,787	$	3,245

8. INCOME TAXES

Our available net operating loss (“NOL”) as of December 31, 2023 was approximately $26,300, of which $10,900 expires between 2035 and 2037. In accordance with the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), U.S. NOLs arising in a tax year ending after 2017 in the amount of $15,400 will not expire, but are subject to 80% limitation on utilization. In addition to the NOLs, the Company has approximately $708 of research and development credits.

ASC 740 requires evaluation of uncertain tax positions and as of September 30, 2024, the Company has no material uncertain tax positions.

9. STOCKHOLDERS' EQUITY

Stock-based Compensation

To retain and attract qualified personnel necessary for the success of the Company, the Company adopted the 2015 Omnibus Incentive Plan (the “Plan”) covering up to 5,236,000 of the Company’s common shares, pursuant to which officers, directors, key employees and consultants to the Company are eligible to receive incentive stock options, nonqualified stock options and restricted stock units. All the equity compensation plans prior to Company’s 2015 Omnibus Incentive Plan have been closed. The Compensation Committee of the Board of Directors administers this Plan and determines the terms and conditions of stock options granted, including the exercise price. This Plan generally provides that all stock options will expire within ten years of the date of grant. Incentive stock options granted under this Plan must be granted at an exercise price that is not less than the fair market value per share at the date of the grant and the exercise price must not be less than 110% of the fair market value per share at the date of the grant for grants to persons owning more than 10% of the voting stock of the Company. This Plan also entitles non-employee directors to receive grants of non-qualified stock options as approved by the Board of Directors.

The Company accounts for the issuance of stock-based awards to employees in accordance with ASC Topic 718, Compensation - Stock Compensation, which requires that the cost resulting from all stock-based compensation payment transactions be recognized in the financial statements. This pronouncement establishes fair value as the measurement objective in accounting for stock-based compensation payment arrangements and requires all companies to apply a fair

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value based measurement method in accounting for all stock-based compensation payment transactions with employees. All stock-based compensation is included in operating expenses as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Compensation cost recognized:
Selling, general and administrative	$	220	$	301	$	601	$	1,125
Research and development	17		41		41		222
	$	237	$	342	$	642	$	1,347

Stock Options

The Company uses the Black-Scholes option pricing model to value the options on the grant date. The table below presents the weighted average expected life of the stock options in years. The Company uses the simplified method for all restricted stock units ("RSUs") and stock options to estimate the expected life of the option and assumes that stock options will be exercised evenly over the period from vesting until the awards expire. Volatility is determined using changes in historical stock prices. The interest rate for periods within the expected life of the award is based on U.S. Treasury yield curve in effect on the grant date. Options, generally, vest from one year to four years. The compensation expense is recognized over the requisite service period on a straight-line basis, reduced by forfeitures as they occur.

Certain option awards are classified as liability awards. The fair value of these awards are determined at each reporting period utilizing a Black-Scholes option pricing model, and the associated compensation expense (credit) for the reporting period is recorded. The Company decreased stock-based compensation expense by approximately $0 and $(4) for the three and nine-months ended September 30, 2024, respectively, as a result of the change in fair value of these awards. The Company decreased stock-based compensation expense by approximately $(39) and decreased stock-based compensation expense by approximately $(14) for the three and nine-months ended September 30, 2023, respectively, as a result of the change in fair value of these awards.

Stock option activity under the 2015 Plan during the period indicated below is as follows:


	Number of Shares Subject to Issuance	Weighted- average Exercise Price		Weighted- average Remaining Contractual Term	Aggregate Intrinsic Value

Outstanding at December 31, 2023	1,152,714	$	3.07	3.18 years	$	38
Granted	620,978	1.86		–	–
Forfeited, cancelled, or expired	(184,582)	2.68		–	–
Exercised	(11,939)	$	1.87	—	—
Outstanding at September 30, 2024	1,577,171	$	2.04	1.98 years	$	181

Exercisable at September 30, 2024	478,337	$	3.68	2.78 years	$	72

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they all exercised their options on September 30, 2024. This amount changes based upon the fair market value of the Company’s stock.

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Restricted Stock Units

The Company periodically issues RSUs which are equity-based instruments that may be settled in shares of common stock of the Company. The Company issues RSUs to certain directors as compensation which vest with the passage of time. The vesting of all RSUs is contingent on continued board and employment services.

The compensation expense incurred by the Company for RSUs is based on the closing market price of the Company’s common stock on the date of grant, is amortized on a straight-line basis over the requisite service period and charged to operating expenses with a corresponding increase to additional paid-in capital, reduced by forfeitures when they occur.

RSU activity during the period indicated below is as follows:


	Number of RSUs	Weighted Average Grant Date Fair Value

Outstanding at December 31, 2023	60,500	$	4.23
Granted	202,057	2.21
Vested and settled in shares	(184,688)	3.16

Outstanding at September 30, 2024	77,869	$	1.75

As of September 30, 2024, there was approximately $871 of total unrecognized compensation costs, related to all unvested stock options and RSUs. These costs are expected to be recognized as compensation expense over a weighted-average period of approximately 2.00 years.

The Company had 506,097 shares available for future grants under the Company's equity compensation plans at September 30, 2024.

10. COMMITMENTS AND CONTINGENCIES

Leases

The Company leases an office in Melville, New York. Rent expense, which includes utilities, was $8 and $19 for the three months ended September 30, 2024 and 2023, respectively, and $23 and $54 for the nine months ended September 30, 2024 and 2023, respectively, and is included in selling, general and administrative expenses on the condensed Statements of Operations.

The Company determines if an arrangement is a lease at lease inception. The arrangement is a lease if it conveys the right to the Company to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company did not have an Operating Lease ROU or Operating Lease Liability as of September 30, 2024, as its office lease is on a month-to-month term and allows for either party to terminate the lease without a significant penalty.

Legal Proceedings

The Company is not aware of any infringement by our products or technology on the proprietary rights of others.

From time to time, the Company may be involved in lawsuits, claims, investigations and proceedings, consisting of intellectual property, commercial, employment and other matters, which arise in the ordinary course of business. In accordance with GAAP, the Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the

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impact of negotiations, settlements, ruling, advice of legal counsel and other information and events pertaining to a particular case. Litigation is inherently unpredictable. If any unfavorable ruling was to occur in any specific period or if a loss becomes probable and estimable, there exists the possibility of a material adverse impact on the Company’s results of operations, financial position or cash flows. As of September 30, 2024, no material amounts are recorded related to legal proceedings on the balance sheets.

The Company was served a class action complaint in March 2024 alleging violations of the Illinois Biometric Information Privacy Act. The litigation is currently in its early stage and the Company does not currently believe that a material loss is probable. As such, the Company has not recognized a liability and intends to fully defend the matter.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (All dollar amounts are rounded to thousands, except shares and per share data)

Forward Looking Statements

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, particularly statements anticipating future growth in revenues, loss from operations and cash flow. Words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance used in connection with any discussion of future operating or financial performance identify forward-looking statements. These forward-looking statements are based on management’s current expectations and beliefs about future events. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances, and the Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise. References made in this Quarterly Report on Form 10-Q to “we,” “our,” “us,” “Intellicheck,” or the “Company,” refer to Intellicheck, Inc.

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 months ended September 30, 2024. 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, 2023.

Overview

We are a prominent technology company engaged in developing, integrating and marketing identity verification solutions to address challenges that include commercial retail and banking fraud prevention. Our products include solutions for preventing identity fraud across any industry delivered via smartphone, tablet, POS integration or other electronic devices.

Critical Accounting Policies and the Use of Estimates

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Significant estimates and assumptions that affect amounts reported in the financial statements include impairment consideration and valuation of goodwill and intangible assets, deferred tax valuation allowances, capitalization of software development costs, revenue recognition (including breakage revenue), allowance for credit losses, and the fair value of stock options under the Company’s stock-based compensation plan. Due to the inherent uncertainties involved in making estimates, actual results reported in future periods may be different from those estimates.

We believe that there are several accounting policies that are critical to understanding our historical and future performance, as these policies affect the reported amounts of revenue and the more significant areas involving management’s judgments and estimates. These significant accounting policies relate to revenue recognition, stock-based compensation, deferred taxes, goodwill and intangible asset valuation and impairment, and commitments and contingencies. These policies and our procedures related to these policies are summarized below and described in further detail in the Notes to condensed Financial Statements.

Recent Accounting Pronouncements

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Goodwill

The excess of the purchase consideration over the fair value of the assets of acquired businesses is considered goodwill. Under authoritative guidance, goodwill is not amortized, but rather it is periodically reviewed for impairment. We had goodwill of $8,102 as of September 30, 2024.

For the year ended December 31, 2023, the Company performed its annual impairment test of goodwill in the fourth quarter of the fiscal year. Under authoritative guidance, the Company can use industry and Company specific qualitative factors to determine whether it is more likely than not that impairment exists before performing step one of the quantitative goodwill impairment test. An entity is not required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. Events or changes in circumstances which could trigger an impairment review include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, other entity specific events and sustained decrease in share price.

We determined that no events occurred or circumstances changed during the three and nine-months ended September 30, 2024 that would more likely than not reduce the fair value of the Company below its carrying amounts. We will, however, continue to monitor our stock price and operations for any potential indicators of impairment. We will conduct the 2024 annual test for goodwill impairment in the fourth quarter, or at such time where an indicator of impairment appears to exist.

Intangible Assets

Our intangible assets consist of patents, a software license, and capitalized software development costs. We determined that no events occurred, or circumstances changed during the three months ended September 30, 2024 that would more likely than not reduce our intangible assets below our carrying amounts. We will, however, continue to monitor any potential indicators of impairment. See Note 5, “Intangible Assets,” in the Notes to Unaudited Condensed Financial Statements for details on the Company’s intangible assets.

Revenue Recognition and Deferred Revenue

Most license fees and services 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, we 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.

Stock-Based Compensation

We account for the issuance of stock-based compensation awards to employees in accordance with ASC 718, Compensation – Stock Compensation, which requires that the cost resulting from all stock-based compensation payment transactions be recognized in the financial statements. This pronouncement establishes fair value as the measurement

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objective in accounting for stock-based compensation payment arrangements and requires all companies to apply a fair value-based measurement method in accounting for all stock-based compensation payment transactions with employees. Reference Note 9, “Stockholders' Equity,” in the Notes to Unaudited Condensed Financial Statements for details on the Company’s stock-based compensation plans.

Deferred Income Taxes

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 and net operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. We have recorded a full valuation allowance for our net deferred tax assets as of September 30, 2024, due to the uncertainty of our ability to realize those assets. Reference Note 8, “Income Taxes,” in the Notes to Unaudited Condensed Financial Statements for details on the Company’s income taxes.

Commitments and Contingencies

We are not currently involved in any legal or regulatory proceeding, or arbitration, the outcome of which is expected to have a material adverse effect on our business.

The above listing is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by generally accepted accounting principles, with no need for management’s judgment in their application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result.

Results of Operations

(All dollar amounts are rounded to thousands, except share and per share data)

COMPARISON OF THE THREE MONTHS ENDED September 30, 2024

TO THE THREE MONTHS ENDED September 30, 2023

Revenues for the three months ended September 30, 2024 decreased $51, or 1%, to approximately $4,709 compared to $4,760 for the same period of 2023. The decrease in revenues is primarily the result of lower Equipment revenues for the current period. Equipment revenue, which consists of the sale of equipment is recognized at a point in time, decreased $93 or 88% to $13 for the three months ended September 30, 2024 compared to $106 for the same period of 2023. SaaS revenue increased $26 or 1% to $4,661 for the three months ended September 30, 2024 compared to $4,635 for the same period of 2023.

Gross profit decreased $47, or 1%, to $4,285 for three months ended September 30, 2024 from $4,332 for the same period of 2023. Our gross profit, as a percentage of revenues, was 91% for the three months ended September 30, 2024 and 2023, respectively.

Operating expenses, which consist of selling, general and administrative and research and development expenses, decreased $32, or 0.6%, to $5,195 for the three months ended September 30, 2024 compared to $5,227 for the same period of 2023.

As a result of the factors noted above, the Company had a net loss of $(837) for the three months ended September 30, 2024 as compared to a net loss of $(724) for the three months ended September 30, 2023.

COMPARISON OF THE NINE MONTHS ENDED September 30, 2024

TO THE NINE MONTHS ENDED September 30, 2023

Revenues for the nine months ended September 30, 2024 increased $330, or 2%, to approximately $14,060 compared to $13,730 for the same period of 2023. 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 $370 or 2% to $13,896 for the nine months ended September 30, 2024 compared to $13,526 for the same period of 2023.

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Gross profit increased $139, or 1%, to $12,757 for nine months ended September 30, 2024 from $12,618 for the same period of 2023. Our gross profit, as a percentage of revenues, was 91% for the nine months ended September 30, 2024 and 2023, respectively.

Operating expenses, which consist of selling, general and administrative and research and development expenses, decreased $1,352, or 9%, to $14,391 for the nine months ended September 30, 2024 compared to $15,743 for the same period of 2023. This decrease was primarily driven by lower stock-based compensation.

As a result of the factors noted above, the Company had a net loss of $(1,406) for the nine months ended September 30, 2024 as compared to a net loss of $(2,964) for the nine months ended September 30, 2023.

Liquidity and Capital Resources

As of September 30, 2024, we had cash and cash equivalents of $5,747, working capital (defined as current assets minus current liabilities) of $5,699, total assets of $20,682 and stockholders’ equity of $16,735.

During the nine months ended September 30, 2024, we used net cash of $(1,373) in operating activities as compared to net cash of $(1,114) used by operating activities in the nine months ended September 30, 2023. Cash provided by investing activities was $3,120 for the nine months ended September 30, 2024 compared to cash provided by investing activities of $18 for the nine months ended September 30, 2023. Cash provided by financing activities was $20 for the nine months ended September 30, 2024 compared to net cash of $(138) used in financing activities for the nine months ended September 30, 2023.

We currently anticipate that our available cash, expected cash from operations and availability under the revolving line of credit, 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. Reference Note 6, “Debt,” in the Notes to Unaudited Condensed Financial Statements for details on the Company’s revolving line of credit.

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. 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.

The specific terms of any future offering, including the prices and use of proceeds, will be determined at the time of any such offering and will be described in detail in a prospectus supplement which will be filed with the SEC at the time of the offering.

We are not currently involved in any legal or regulatory proceeding, or arbitration, the outcome of which is expected to have a material effect on our business.

Net Operating Loss Carry Forwards

Adjusted EBITDA and Use of a Non-GAAP Measure

We use Adjusted EBITDA as a non-GAAP financial performance measurement. Adjusted EBITDA is calculated by adjusting net loss for certain reductions such as interest and other income (expense), 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, 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

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basis to the results of other companies. In addition, Adjusted EBITDA is one of the primary measures 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-restructuring severance expenses, 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 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 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 loss to Non-GAAP Adjusted EBITDA is as follows:


	Three Months Ended September 30				Nine Months Ended September 30
	2024		2023		2024		2023

Net loss	$	(837)	$	(724)	$	(1,406)	$	(2,964)
Reconciling items:
Restructuring severance expenses	376		131		376		548
Provision for income taxes	—		8		2		20
Interest and other income	(73)		(179)		(230)		(181)
Sales tax accrual	—		80		—		227
Depreciation and amortization	130		71		275		210
Stock-based compensation, including liability classified awards	237		342		642		1,347

Adjusted EBITDA	$	(167)	$	(271)	$	(341)	$	(793)

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet financing arrangements and have not established any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable to smaller reporting companies.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, 2024 based on the guidelines established in the "Internal Control—Integrated Framework" (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to ensure that information required to be disclosed in our reports filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to management, including the principal executive and financial officer as appropriate, to allow timely decisions regarding required disclosures. Based on its assessment,

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management concluded that the Company's internal control over financial reporting was effective as of September 30, 2024.

Remediation of Previously Disclosed Material Weakness

We previously identified and disclosed in our 2023 Annual Report, as well as in our Quarterly Report on Form 10-Q filed for the quarters ended March 31, 2024, and June 30, 2024 a material weakness in our control environment whereby the Company did not have adequate controls for its processing of sales and use tax application to certain revenue transactions. As of September 30, 2024, management has completed our remediation efforts of this material weakness. Our remediation efforts included the following:

•The Company engaged additional experienced accounting resources and implemented training to new and existing personnel.

•The Company enhanced review controls over the nexus of sales and use tax applicability for revenue transactions.

•The Company enhanced its usage of a sales and use tax application for compliance purposes.

Limitations on Effectiveness of Controls.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all controls systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving its objectives.

Changes in Internal Control over Financial Reporting

Other than described above in "Remediation of Previously Disclosed Material Weakness", there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2024 that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II - Other Information

Item 1. LEGAL PROCEEDINGS

While we are not currently involved in any material legal proceedings, from time-to-time we are, and we anticipate that we will be, involved in legal proceedings, claims, and litigation arising in the ordinary course of our business and otherwise. The ultimate costs to resolve any such matters could have a material adverse effect on our financial statements. The Company’s management believes, based on current information, matters currently pending or threatened are not expected to have a material adverse effect on the Company’s consolidated financial position or results of operations.

Item 1A. RISK FACTORS

In addition to the other information set forth in this report, investors should carefully consider the factors discussed under Part I, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year-ended December 31, 2023 (the “2023 Annual Report”). These factors could have a material adverse effect on our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in this report.
There have been no material changes to the risk factors described in Part I, Item 1A, “Risk Factors,” included in our 2023 Annual Report.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

Item 3. DEFAULTS UPON SENIOR SECURITIES

None

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Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

Insider Adoption or Termination of Trading Arrangements:

During the three and nine-months ended September 30, 2024, none of our directors or officers informed us of the adoption, modification or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408.

Item 6. EXHIBITS

(a)The following exhibits are filed as part of the Quarterly Report on Form 10-Q:


Exhibit No.						Description

10.1						Separation Agreement dated as of July 12, 2024 by and between the Registrant and Jeffrey Ishmael
10.2						Employment Agreement dated as of July 31, 2024 by and between the Registrant and Adam Sragovicz
31.1						Rule 13a-14(a) Certification of Chief Executive Officer
31.2						Rule 13a-14(a) Certification of Chief Financial Officer
32						18 U.S.C. Section 1350 Certifications
101.INS						XBRL Instance Document
101.SCH						XBRL Taxonomy Extension Schema
101.CAL						XBRL Taxonomy Extension Calculation Linkbase
101.DEF						XBRL Taxonomy Extension Definition Linkbase
101.LAB						XBRL Taxonomy Extension Label Linkbase
101.PRE						XBRL Taxonomy Extension Presentation Linkbase
104						Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

*Denotes a management contract or compensatory plan, contract or agreement.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date:	November 14, 2024	INTELLICHECK, INC.

		By:	/s/ Bryan Lewis
			Bryan Lewis
			President and Chief Executive Officer
			(Principal Executive Officer)

		By:	/s/ Adam Sragovicz
			Adam Sragovicz
			Chief Financial Officer

507965509.4 Intellicheck, Inc. Employment Agreement Intellicheck, Inc. (“Company”) and Adam Sragovicz (“Employee”) (together, the “parties”) enter into this Employment Agreement (“Agreement”) effective as of July 31, 2024. Based upon the consideration of the mutual covenants in this Agreement, and other good and valuable consideration, the sufficiency and receipt of which are acknowledged, the parties agree as follows: 1. Employment. 1.1 Employee agrees to be employed as SVP Finance beginning on August 1, 2024 (“Start Date”). Employee will then be promoted to Chief Financial Officer effective on September 1, 2024. Employee will report directly to the Chief Executive Officer (“CEO”) effective on the Start Date. Employee will comply with all rules, policies, and procedures of Company, as modified from time to time, including, without limitation, rules and procedures set forth in Company’s employee handbook as adopted and modified from time to time at Company’s sole discretion. Employee will perform all of Employee’s responsibilities in complete compliance with all applicable laws. Company may, in its discretion, modify Employee’s duties, title, and assignment. 1.2 Employee agrees to devote Employee’s full and undivided work time, energy, knowledge, skill, and ability to the purposes of Company and discharging Employee’s responsibilities for the benefit of Company’s business. In no event will Employee allow other activities to conflict or interfere with Employee’s duties to Company. Employee agrees to perform all duties faithfully and diligently and to the best of Employee’s ability. Employee recognizes that the services to be rendered under this Agreement require certain training, skills, and experience, and that this Agreement is entered into for the purpose of obtaining such service for Company. Employee agrees to provide Company with any information that Employee lawfully possesses and that will be of benefit to Company, unless providing such information would violate a third party’s rightful claim of ownership or unless such information is subject to an ongoing obligation of confidentiality to any third party, particularly any prior employers of Employee. Employee agrees to conduct himself in a way that will be a credit to the reputation and interests of Company and its Affiliates, to perform Employee’s duties in a careful, safe, loyal, and prudent manner, and to otherwise fulfill all fiduciary and other duties Employee has to Company. For purposes of this Agreement, “Affiliate” means any person or entity, including the current subsidiaries of the Company, currently existing or subsequently formed that directly or indirectly controls, is controlled by, or is under common control with Company, whether by contract, through the ownership of voting securities or otherwise. 1.3 Employee’s initial base of operations will be Employee’s home in La Jolla, California. Employee will travel the United States and internationally as necessary to fulfill the responsibilities of Employee’s position. 2. At-Will Employment. Employee understands and agrees that Employee’s employment with Company will be at will and for no specific term, and either Employee or Company may terminate the employment relationship at any time, with or without reason, with or without cause, notice, pre-termination warning or discipline, or other pre- or post-termination procedures of any kind, subject only to the provisions of Section 4 regarding payments upon Authentisign ID: C2A55F9F-6C4F-EF11-86C3-0022482708E1

507965509.4 Page 2 of 13 termination. Any representations to the contrary, whether written, verbal, or implied by any Company communication, conduct, or practice, are unauthorized and void unless contained in a formal written employment contract signed by the Company’s Chief Executive Officer, and Employee. Except as otherwise noted in this Agreement, Employee will not be entitled to any further compensation or benefits, other than compensation earned through the termination date of Employee’s employment, accrued, unused vacation, and vested benefits, if any exist, regardless of the reason for termination. 3. Compensation and Benefits. Employee will be entitled to compensation and benefits pursuant to the following subparagraphs. 3.1 Base Salary. Employee will be paid a salary at an annual gross rate for all hours worked of $357,500 per year (“Base Salary”), with the actual amount paid to be prorated for the actual period of employment and payable in equal installments in accordance with Company’s normal payroll practices, subject to appropriate deductions and withholding. 3.2 On-Target Bonus. Company will provide Employee with the opportunity to earn an On-Target Bonus under terms identified by Company and based on achievement of goals identified by the Chief Executive Officer. For 2024 and going forward, Employee is eligible to earn an On-Target Bonus of 60% based on Revenue targets set by the Board of Directors (“Board”) and the forecast in effect as of July 22, 2024, and the achievement of goals identified by the CEO, and any bonus may be in the form determined by Company (including an option to purchase Company stock). Any On- Target Bonus will be prorated for the actual period of employment and subject to Employee’s satisfaction of all eligibility criteria, as determined by the CEO. Any On-Target Bonus will not be deemed earned until paid, and Employee must be employed with the Company at the time of payment and award to be eligible to receive such payment and award. 3.3 Benefits. Employee will be eligible to participate in employee benefit programs established by Company for personnel on a basis commensurate with Employee’s position and in accordance with the terms and conditions of the governing documents and the Company’s policies from time to time, provided that Employee satisfies the eligibility requirements of any such program. Nothing herein will require the adoption or maintenance of any such plans. 3.4 Stock Option. Upon the promotion to Chief Financial Officer on September 1, 2024 (and subject to approval by the Board), Employee will receive an option to purchase 91,228 shares (subject to adjustment in the event of any recapitalization, stock split or reverse stock split), under the Company’s 2015 Omnibus Incentive Plan, as amended (“Stock Option”). The exercise price will be set as of the close of business on the first date of employment as Chief Financial Officer with vesting as follows: ½ after one year and then 1/8 of the remaining unvested options would vest on a quarterly basis in each of the next two years so that the option is fully vested after three years. 4. Termination. In addition to the provisions in Sections 4.1 through 4.5, if and as applicable, upon termination of Employee’s employment by Company or Employee for any reason, Company will pay Employee (a) salary earned on or before the termination date of Employee’s employment, (b) unpaid expenses, (c) accrued, unused vacation, and (d) vested Authentisign ID: C2A55F9F-6C4F-EF11-86C3-0022482708E1

507965509.4 Page 3 of 13 benefits, if any exist, which vested benefits will be handled in accordance with their controlling plans and documents (collectively, “Final Pay”). Employee’s last day of employment, regardless of the reason for termination (or no reason) is the “Separation Date.” 4.1 Termination by Company for Cause or Resignation by Employee. Company will have the right to terminate Employee’s services and this Agreement for Cause immediately upon notice of termination. Upon termination of Employee’s employment hereunder for Cause, or if Employee terminates Employee’s employment for any reason, all compensation described herein will cease as of the Separation Date, and Employee will have no rights to any other compensation or payments, other than the Final Pay. Any assignment of this Agreement by Company will not constitute a termination for Cause for purposes of this Section 4.1. 4.2 Termination by Company Without Cause. Company will have the right to terminate immediately Employee’s services and this Agreement without Cause and without Employee’s consent upon notice of termination, subject to the provisions of this Section 4.2. If Company terminates Employee’s employment without Employee’s consent and without Cause, Company will provide Employee the following (collectively, “Severance”), subject to the conditions below: • Severance Payments: If Employee is terminated without Cause: o Before the one-year anniversary of the Start Date, Company will continue to pay Employee’s base monthly salary (at the annual rate then in effect), subject to applicable deductions and withholdings, for six months in accordance with Company’s regular payroll schedule. o After the one-year anniversary of the Start Date, Company will continue to pay Employee’s base monthly salary (at the annual rate then in effect), for one year subject to applicable deductions and withholdings, for one year in accordance with Company’s regular payroll schedule. Each payment is a “Severance Payment.” The Severance Payments will commence with the next payment cycle after the Separation Date, provided that Employee has satisfied the conditions below and further provided that if the next payment period begins in one taxable year and ends in a subsequent taxable year, Severance Payments will commence in the subsequent taxable year. • Benefits Continuation: If Employee is terminated without Cause, Company will reimburse Employee for the full amount of premiums Employee paid for participation in Company’s medical, dental, and vision plans pursuant to Section 498B(f) of the Internal Revenue Code of 1986, as amended (COBRA) until such time as Employee becomes eligible for coverage under another employer’s insurance plan or for the following periods, whichever is shorter: Authentisign ID: C2A55F9F-6C4F-EF11-86C3-0022482708E1

507965509.4 Page 4 of 13 o If termination without Cause occurs before the one-year anniversary of this Agreement, for a period of six months; or o If termination without Cause occurs after the one-year anniversary of this Agreement, for a period of one year. The Severance is expressly conditioned upon (a) Employee’s timely execution and delivery to Company of a separation agreement in a form acceptable to Company, which will include a full waiver and release of all claims by Employee against Company, its Affiliates, and their officers, directors, employees, and agents; (b) Employee not rescinding or revoking that separation agreement; and (c) Employee being and remaining in full compliance with this Agreement (including Sections 5, 6, and 7), and all other obligations to Company. Except as provided in this Section 4.2, upon termination by Company without Employee’s consent and without Cause, Employee will not be entitled to any further compensation, payments, or severance other than the Final Pay. 4.3 Death or Disability. Employee and Company acknowledge that Employee’s ability to perform the duties specified in Section 1 or as otherwise communicated by Company are of the essence of this Agreement. This Agreement and Employee’s employment hereunder will terminate automatically upon the death or Total Disability of Employee. If Employee’s employment is terminated as a result of the Employee’s death or Total Disability, this Agreement will terminate without further obligations to Employee, other than the Final Pay. 4.4 Limitations. Employee agrees that this Section 4 details the sole consideration to which Employee may be entitled in the event of the termination of Employee’s employment. Employee expressly waives and relinquishes any claim to other or further consideration. If any consideration is owed to Employee in connection with Employee’s termination of employment under any arrangement or law (including the federal Workers Adjustment and Retraining Notification Act or other state or local laws), then amounts owed to Employee under this Section 4 will be less the amount of all such sums to the extent permitted by law. 4.5 Definitions. For purposes of this Agreement, the following definitions apply: (a) “Cause” means a good-faith determination by Company that: (i) Employee has engaged in conduct that constitutes gross negligence, flagrant disloyalty to Company, material dishonesty, fraud, theft, or embezzlement; (ii) Employee has failed to perform assigned job duties or willfully or repeatedly failed to carry out the directions of the CEO, Board, or their designee; (iii) Employee engaged in insubordination or willful dereliction of his duties hereunder; (iv) Employee has falsified any Company record or violated any law or regulation related to performance of Employee’s duties; (v) Employee has engaged in conduct in violation of material policies of Company or its Affiliates, including policies pertaining to compliance with the laws prohibiting unlawful discrimination, harassment, or insider trading; (vi) Employee has been convicted of or entered a plea of nolo contendere to any crime involving fraud, embezzlement, or any other act of moral turpitude or any felony; (vii) Employee has breached the terms of any agreement signed in connection with Employee’s employment with Company or any of its Affiliates (including this Agreement); or (viii) Employee’s employment with Company or performance of duties within that employment is found to violate Authentisign ID: C2A55F9F-6C4F-EF11-86C3-0022482708E1

507965509.4 Page 5 of 13 any obligation of Employee to any third party not to engage in such employment or duties. (b) “Total Disability” means Employee’s inability (with or without such accommodation as may be required by law protecting persons with disabilities and that places no undue burden on Company) as determined in good faith by the Board or its designee, to perform Employee’s duties hereunder for a period or periods aggregating 90 calendar days in any 12-month period as a result of physical or mental illness. 5. Confidential Information. 5.1 Confidentiality Obligations and Confidential Information. Employee may obtain, receive, or gain access to Confidential Information in connection with Employee’s work for Company. Employee acknowledges that disclosure of Confidential Information outside of Company would severely affect Company or its Affiliates and provide the recipient of the Confidential Information with an unfair competitive advantage. During Employee’s relationship with Company and at all times thereafter, Employee will hold all Confidential Information in strictest confidence and will not copy, acquire, use, publish, disclose, or communicate any Confidential Information except as necessary for Employee to perform Employee’s employment duties for (and while employed by) Company. “Confidential Information” means all information, data, and materials in whatever form, tangible or intangible, and whether or not marked or otherwise designated as confidential, that is not generally known to the public and that relates to the business, technology, practices, projects, products, services, inventions, ideas, trade secrets, developments, marketing, sales, customers, finances, or legal affairs of Company or its Affiliates, including without limitation information regarding business plans, marketing and sales data and plans, budgets, pricing information, suppliers, customer lists and information, data (equipment, operational, and other data), concepts, techniques, processes, methods, know-how, designs, technology, computer programs, licenses, formulas, and development or experimental work. Company also provides the following notice to Employee under the Defend Trade Secrets Act: An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made (1) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney, and (2) solely for the purpose of reporting or investigating a suspected violation of law. An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (1) files any document containing the trade secret under seal; and (2) does not disclose the trade secret, except pursuant to court order. 5.2 Confidential Information of Third Parties. Employee will preserve as confidential any information that Employee learns or obtains from a third party or relating to a third party (such as a client, customer, affiliate, partner, or vendor) that is not readily available to the public or that Company is obligated to treat as confidential, and Employee will treat such information as Confidential Information. Authentisign ID: C2A55F9F-6C4F-EF11-86C3-0022482708E1

507965509.4 Page 6 of 13 5.3 Return of Confidential Information. Upon the Separation Date, or sooner if so requested, Employee will immediately return all Confidential Information and other things belonging to Company, including tools, equipment, devices, keys, identification, or other property, and all documents, records, notebooks, and tangible articles containing or embodying any Confidential Information, including any copies (whether stored in paper, electronic, magnetic, or other form) then in Employee’s possession, custody, or control, whether prepared by Employee or others. Employee understands that all such documents and materials are Company’s sole property and that Employee cannot make any copies thereof. 6. Intellectual Property. 6.1 Employee acknowledges that all developments, including, without limitation, the creation of products, services, source-code, applications, projects, strategies, tactics, promotions or publications, inventions, patentable or otherwise, discoveries, improvements, patents, trademarks, trade names, copyrights, trade secrets, designs, works, reports, computer software, flow charts and diagrams, procedures and business methods, data, documentation and writings and applications thereof relating to the actual or planned business of Company or any of its Affiliates from and after the date of his association with Company, that, alone or jointly with others, the Employee may have discovered, conceived, created, made, developed, reduced to practice or acquired (“Developments”), are works made for hire and will remain the sole and exclusive property of Company, and Employee hereby assigns to Company all of Employee’s right, title, and interest in and to all such Developments. Employee agrees promptly and fully to disclose all future Developments to Company and, at any time upon request and at the sole expense of Company, execute, acknowledge, and deliver to Company all instruments that Company will prepare, give evidence, and take all other actions that are necessary or desirable in the reasonable opinion of Company to enable Company to file and prosecute applications for and to acquire, maintain, and enforce all letters patent, trademark registrations, or copyrights covering the Developments in all countries in which the same are deemed necessary by Company. All data, memoranda, notes, lists, drawings, records, files, customer lists, exhibitor lists, and other documentation (and all copies thereof) made or compiled by Employee or made available to Employee concerning the Developments or otherwise concerning the actual or planned business of Company or any of its Affiliates will be the property of Company or such Affiliate, as the case may be, and will be delivered to Company promptly upon the termination of Employee’s employment with Company. 6.2 Employee understands that Developments (as defined above) do not include, and the obligations of Section 6 do not apply to, subject matter that meets all of the following criteria: (a) is conceived, developed, and created by Employee on Employee’s own time without using Company’s equipment, supplies, or facilities, or any Confidential Information, (b) is unrelated to the actual or reasonably anticipated business or research and development of Company of which Employee is or becomes aware, and (c) does not result from any work performed by Employee for Company; provided, further, nothing in this Agreement will be construed to require Employee to assign to Company Developments that are excluded from any such assignment under California Labor Code section 2870. A copy of California Labor Code section 2870 will be provided to Employee upon written request or may be located on the internet and is reproduced under Exhibit A. Employee will be deemed to be aware of all activities of Company. Authentisign ID: C2A55F9F-6C4F-EF11-86C3-0022482708E1

507965509.4 Page 7 of 13 6.3 To avoid any misunderstanding, Employee has listed on Exhibit B the following: (a) all materials, creations, designs, technology, discoveries, inventions, ideas, information, and other subject matter, including, but not limited to, copyrights, trade secrets, patents, trademarks, and other intellectual property rights, if any, developed or created by Employee, alone or with others, before the period of Employee’s employment with Company in which Employee claims any ownership or rights, and (b) all agreements or arrangements that may affect the rights to any such subject matter or Employee’s ability to be employed by and perform services for Company and comply with the requirements of this Agreement. Employee acknowledges and agrees that (a) by not listing particular subject matter, Employee is warranting that the subject matter was not conceived, developed, or created before commencement of Employee’s employment, and (b) by not listing particular agreements or arrangements, Employee is warranting that no such agreements or arrangements exist. 7. .Nonsolicitation and Nondisparagement. 7.1 Nonsolicitation. During Employee’s employment with Company and for a period of six months after the Separation Date (which term will be increased to 12 months after the second anniversary of the Start Date), Employee will not, directly or indirectly, except for on behalf of Company or except with the prior written approval of Company, use the Company’s Confidential Information to (a) solicit or otherwise encourage any employee, contractor, or consultant of Company or its Affiliates (“Covered Workers”) to terminate any employment or contractual relationship with Company or its Affiliates; or (b) otherwise interfere with the performance of current or former Covered Workers of their obligations or responsibilities to Company or its Affiliates. 7.2 Nondisparagement. For a period from the Separation Date until two years after the Separation Date, to the maximum extent permitted by law, Employee will not, directly or indirectly, disparage Company, its Affiliates, or any of its or their officers, directors, or employees (“Covered Group”). As used in this Agreement, the term “disparage” means any communication, oral or written, that is reckless or maliciously untrue. Despite the foregoing, nothing in this Agreement is intended to prevent Employee from testifying truthfully in response to any lawfully issued subpoena, court order, or arbitral order, or providing truthful information in response to any governmental or administrative agency investigation. Nothing in this Agreement is intended to prohibit Employee from initiating communications with or filing charges with any federal, state, or local regulatory authority or agency, including but not limited to the Equal Employment Opportunity Commission (“EEOC”) or the U.S. Securities and Exchange Commission for matters for which such agency has jurisdiction, or participating in or cooperating with the EEOC or similar agency. 7.3 Nothing in this Section 7 will prohibit Employee from (a) working in the industry, engaging in academic research or teaching, or using Employee’s skills and experience, in each case in compliance with the restrictions contained in this Agreement, (b) holding up to one percent of the issued and outstanding securities of any class of securities of any entity that is publicly traded and quoted on a recognized securities exchange, so long as Employee does not, directly or indirectly, exercise any management or control with respect to, or have any active participation in the business of, such entity, or (c) discussing or disclosing information about unlawful acts in the workplace, such as harassment, discrimination, retaliation or any other conduct that Authentisign ID: C2A55F9F-6C4F-EF11-86C3-0022482708E1

507965509.4 Page 8 of 13 Employee has reason to believe is unlawful. 8. Disclosure. Employee agrees fully and completely to reveal the terms of Sections 5, 6, and 7 of this Agreement to any new or prospective employee, business partner, or investor of Employee and authorizes Company, at its election, to make such disclosure and provide a copy of this Agreement to any new or prospective employee, business partner, or investor. 9. Representations Regarding Existing Obligations. Employee represents and certifies as follows: (a) Employee is not in possession or control of any document or other tangible thing that in any way constitutes confidential, proprietary, or trade secret information of any third party (including any former employer); (b) Employee is not subject to a noncompetition or other agreement that precludes Employee’s work for Company; (c) Employee has identified all confidentiality, nonsolicitation, or similar agreements or obligations Employee has with any third party, and Employee will not violate any such agreements or obligations in the course of Employee’s work for Company; and (d) Employee will not use or disclose any tangible or intangible information that constitutes a trade secret of any third party (including any former employer) in the course of Employee’s employment, except pursuant to written authorization to do so. 10. Remedies for Breach and Right to Injunction. Any breach of Sections 5, 6, 7, 8, or 9 of this Agreement may cause Company irreparable harm for which there is no adequate remedy at law and, as a result, Company will be entitled to the issuance by a court of competent jurisdiction of an injunction, restraining order, or other equitable relief in favor of itself, without the necessity of posting a bond, restraining Employee from committing or continuing to commit any such violation. Any right to obtain an injunction, restraining order, or other equitable relief under this Agreement will not be considered a waiver of any right to assert any other remedy Company may have at law or in equity. Nothing in this Agreement will limit the remedies available to Company. Rather, the terms of this Agreement supplement, and do not replace, any other obligations Employee has under applicable law, including laws regarding trade secrets, confidentiality, non-disclosure, assignment of inventions, or the protection of intellectual property or business interests. The restrictions in this Agreement are independent of any other provision of this Agreement and will be enforceable whether or not Employee may have or purport to have any claim against Company. 11. Conditions of Employment. Company’s obligations to Employee under this Agreement are conditioned upon Employee’s timely compliance with requirements of the U.S. immigration laws. 12. Miscellaneous. 12.1 Fees. In any suit or action brought to enforce this Agreement, or to obtain an adjudication, declaratory or otherwise, of rights hereunder, the losing party will pay to the prevailing party reasonable attorneys’ fees and all other costs and expenses that may be incurred by the prevailing party in such suit or action. 12.2 Assignability. This Agreement will be binding upon Employee, Employee’s heirs, personal representatives, and permitted assigns and on Company, its successors, and assigns. During Employee’s employment hereunder, this Agreement may not be assigned by either party without the written consent of the other; provided, however, Authentisign ID: C2A55F9F-6C4F-EF11-86C3-0022482708E1

507965509.4 Page 9 of 13 that Company may in its sole discretion assign its rights and obligations under this Agreement, without Employee’s consent, to any Affiliate or to a successor by sale, merger, or liquidation. 12.3 Notices. Any notice required or permitted to be given hereunder will be sufficient if in writing, by registered or certified mail, addressed to Employee at: or such other address as Employee may provide to Company in writing; or addressed to Company to the attention of Chief Executive Officer, or such other address as may be provided in writing by Company. Notices to the Employee may, at the discretion of Company, alternatively be hand delivered to Employee. 12.4 Severability. If any provision of this Agreement or compliance by any of the parties with any provision of this Agreement will constitute a violation of any law, or be deemed unenforceable or void, then such provision, to the extent only that it is in violation of law, or is deemed void or unenforceable, will be deemed modified to the extent necessary so that it is no longer unenforceable, void or in violation of law and will be enforced to the fullest extent permitted by law. If such modification is not possible, said provision, to the extent that it is in violation of law, void or unenforceable, will be deemed severable from the remaining provisions of this Agreement, which provisions will remain binding on the parties. 12.5 Entire Agreement. This Agreement contains the entire agreement of the parties and supersedes any prior or contemporaneous statements or understandings by or between the parties. Notwithstanding the foregoing, nothing in this Agreement supersedes or restricts any of Employee’s existing obligations to Company or under other agreements between Employee and Company (including all Employee’s obligations to protect the confidentiality of information of Company and to assign intellectual property rights to it or otherwise protect its intellectual property and/or business interests), which remain in full force and effect. This Agreement may be changed only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension, or discharge is sought. 12.6 Governing Law/Jurisdiction. This Agreement will be governed by and construed in accordance with the laws of the State of California, excluding choice of law provisions. The parties hereby irrevocably and unconditionally agree to submit any legal action or proceeding relating to this Agreement to the non- exclusive general jurisdiction of the courts of the State of California, and the courts of the United States located in the County of San Diego and, in any such action or proceeding, consent to jurisdiction in such courts and waive any objection to the venue in any such court. 12.7 Third-Party Beneficiaries. Affiliates of Company are and will be third-party beneficiaries of this Agreement. 12.8 Survival. Sections 4 through 13 will survive the termination of this Agreement or Employee’s employment relationship with Company. 12.9 Nonwaiver. Failure of Company to insist upon strict adherence to any provision of this Agreement or to enforce any provision, on one or more occasions, will not be deemed to be a waiver of its right to enforce any provision in the future. Authentisign ID: C2A55F9F-6C4F-EF11-86C3-0022482708E1

507965509.4 Page 10 of 13 12.10Code Section 409A. Company and Employee agree that this Agreement will be interpreted to comply with or be exempt from Section 409A of the Code and the regulations and guidance promulgated thereunder to the extent applicable (collectively “Section 409A”) and all provisions of this Agreement will be construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral will be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Agreement will be treated as a separate payment. Any payments to be made under this Agreement upon a termination of employment will only be made if such termination of employment constitutes a “separation from service” under Section 409A. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A and in no event will the Company be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by the Employee on account of non-compliance with Section 409A. (a) Notwithstanding any other provision of this Agreement, if at the time of Employee’s termination of employment, he is a “specified employee,” determined in accordance with Section 409A, any payments and benefits provided under this Agreement that constitute “nonqualified deferred compensation” subject to Section 409A that are provided to Employee on account of his separation from service will not be paid until the first payroll date to occur following the six-month anniversary of Employee’s termination date (“Specified Employee Payment Date”). The aggregate amount of any payments that would otherwise have been made during such six-month period will be paid in a lump sum on the Specified Employee Payment Date without interest and thereafter, any remaining payments will be paid without delay in accordance with their original schedule. If Employee dies during the six- month period, any delayed payments will be paid to Employee’s estate in a lump sum upon Employee’s death. (b) To the extent required by Section 409A, each reimbursement or in-kind benefit provided under this Agreement will be provided in accordance with the following: (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar year cannot affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (ii) any reimbursement of an eligible expense will be paid to Employee on or before the last day of the calendar year following the calendar year in which the expense was incurred; and (iii) any right to reimbursements or in-kind benefits under this Agreement will not be subject to liquidation or exchange for another benefit. 12.11Counterparts; Headings. This Agreement may be executed in one or more counterparts, each of which will be treated as an original, but all of which taken together will be treated as one and the same instrument. The headings in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement. 13. Employee’s Recognition of Agreement. Employee acknowledges with execution of this Authentisign ID: C2A55F9F-6C4F-EF11-86C3-0022482708E1

507965509.4 Page 11 of 13 Agreement that: (a) Employee has read and understood this Agreement and agrees that its terms are necessary for the reasonable and proper protection of Company’s business, (b) Company has been induced to employ Employee by his representation that he will abide by and be bound by each of the covenants and restraints in this Agreement, and (c) each and every covenant and restraint is reasonable, and (d) Employee has been advised by Company that Employee is entitled to have this Agreement reviewed by an attorney of Employee’s selection, at Employee’s expense, before signing, and that Employee has either done so or elected to forgo that right. Employee Intellicheck, Inc. Adam Sragovicz By Bryan Lewis, CEO Authentisign ID: C2A55F9F-6C4F-EF11-86C3-0022482708E1

507965509.4 Page 12 of 13 EXHIBIT A CALIFORNIA LABOR CODE SECTION 2870 ( a ) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or (2) Result from any work performed by the employee for the employer. ( b ) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable. Authentisign ID: C2A55F9F-6C4F-EF11-86C3-0022482708E1

507965509.4 Page 13 of 13 Page 13 of 13 EXHIBIT B RESERVED DEVELOPMENTS: RELATED AGREEMENTS OR ARRANGEMENTS [none, unless otherwise specified] Authentisign ID: C2A55F9F-6C4F-EF11-86C3-0022482708E1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bryan Lewis, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Intellicheck, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15I and 15d-15I) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.


Date:	November 14, 2024	/s/ Bryan Lewis
		Name:	Bryan Lewis
		Title:	President and Chief Executive Officer
			(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Adam Sragovicz, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Intellicheck, Inc.;

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.


Date:	November 14, 2024	/s/ Adam Sragovicz
		Name:	Adam Sragovicz
		Title:	Chief Financial Officer

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Intellicheck, Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the period ended September 30, 2024 of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated:	November 14, 2024	/s/ Bryan Lewis
		Name:	Bryan Lewis
		Title:	President and Chief Executive Officer
			(Principal Executive Officer)
Dated:	November 14, 2024	/s/ Adam Sragovicz
		Name:	Adam Sragovicz
		Title:	Chief Financial Officer

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document.

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Nov. 12, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-15465
Entity Registrant Name	Intellicheck, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	11-3234779
Entity Address, Address Line One	200 Broadhollow Road
Entity Address, Address Line Two	Suite 207
Entity Address, City or Town	Melville
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	11747
City Area Code	(516)
Local Phone Number	992-1900
Title of 12(b) Security	Common stock, $0.001 par value per share
Trading Symbol	IDN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		19,762,311
Amendment Flag	false
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity Central Index Key	0001040896

CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
CURRENT ASSETS:
Cash and cash equivalents	$ 5,747	$ 3,980
Short-term investments	0	5,000
Accounts receivable, net of allowance for credit losses of $100 and $69 at September 30, 2024 and December 31, 2023, respectively	3,374	4,703
Other current assets	525	692
Total current assets	9,646	14,375
PROPERTY AND EQUIPMENT, NET	573	666
GOODWILL	8,102	8,102
INTANGIBLE ASSETS, NET	2,271	575
OTHER ASSETS	90	90
Total assets	20,682	23,808
CURRENT LIABILITIES:
Accounts payable	848	884
Accrued expenses	1,787	3,245
Equity awards liability	0	4
Liability for shares withheld	0	190
Deferred revenue	1,312	2,209
Total current liabilities	3,947	6,532
Total liabilities	3,947	6,532
COMMITMENTS AND CONTINGENCIES (Note 10)
STOCKHOLDERS’ EQUITY:
Preferred stock - $0.01 par value; 30,000 shares authorized; Series A convertible preferred stock, zero shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively	0	0
Common stock - $0.001 par value; 40,000,000 shares authorized;19,550,965 and 19,354,335 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively	19	19
Additional paid-in capital	151,687	150,822
Accumulated deficit	(134,971)	(133,565)
Total stockholders’ equity	16,735	17,276
Total liabilities and stockholders’ equity	$ 20,682	$ 23,808

CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Accounts receivable, allowance for credit losses	$ 100	$ 69
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	30,000	30,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	19,550,965	19,354,335
Common stock, shares outstanding (in shares)	19,550,965	19,354,335

CONDENSED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
CONDENSED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Statement [Abstract]
REVENUES	$ 4,709	$ 4,760	$ 14,060	$ 13,730
COST OF REVENUES	(424)	(428)	(1,303)	(1,112)
Gross profit	4,285	4,332	12,757	12,618
OPERATING EXPENSES
Selling, general and administrative	4,018	3,677	11,562	11,609
Research and development	1,177	1,550	2,829	4,134
Total operating expenses	5,195	5,227	14,391	15,743
Loss from operations	(910)	(895)	(1,634)	(3,125)
OTHER INCOME
Interest and other income	73	179	230	181
Total other income	73	179	230	181
Net loss before provision for income taxes	(837)	(716)	(1,404)	(2,944)
Provision for income taxes	0	8	2	20
Net loss	$ (837)	$ (724)	$ (1,406)	$ (2,964)
Loss per common share -
Basic (in dollars per share)	$ (0.04)	$ (0.04)	$ (0.07)	$ (0.15)
Diluted (in dollars per share)	$ (0.04)	$ (0.04)	$ (0.07)	$ (0.15)
Weighted average common shares used in computing per share amounts -
Basic (in shares)	19,499,174	19,278,295	19,390,258	19,209,620
Diluted (in shares)	19,499,174	19,278,295	19,390,258	19,209,620

CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2022		18,957,366
Beginning balance at Dec. 31, 2022	$ 17,667	$ 19	$ 149,233	$ (131,585)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	1,361		1,361
Issuance of common stock for vested restricted stock units and earned performance stock units (in shares)		366,901
Shares forfeited in exchange for withholding taxes (in shares)		(24,720)
Shares forfeited in exchange for withholding taxes	(57)		(57)
Net loss	(2,964)			(2,964)
Ending balance (in shares) at Sep. 30, 2023		19,299,547
Ending balance at Sep. 30, 2023	16,007	$ 19	150,537	(134,549)
Beginning balance (in shares) at Jun. 30, 2023		19,251,920
Beginning balance at Jun. 30, 2023	16,353	$ 19	150,159	(133,825)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	381		381
Issuance of shares for vested restricted stock grants (in shares)		47,627
Shares forfeited in exchange for withholding taxes	(3)		(3)
Net loss	(724)			(724)
Ending balance (in shares) at Sep. 30, 2023		19,299,547
Ending balance at Sep. 30, 2023	16,007	$ 19	150,537	(134,549)
Beginning balance (in shares) at Dec. 31, 2023		19,354,335
Beginning balance at Dec. 31, 2023	17,276	$ 19	150,822	(133,565)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	865		865
Stock option exercises, net of cashless exercises (in shares)		11,939
Issuance of common stock for vested restricted stock units and earned performance stock units (in shares)		184,691
Net loss	(1,406)			(1,406)
Ending balance (in shares) at Sep. 30, 2024		19,550,965
Ending balance at Sep. 30, 2024	16,735	$ 19	151,687	(134,971)
Beginning balance (in shares) at Jun. 30, 2024		19,492,702
Beginning balance at Jun. 30, 2024	17,307	$ 19	151,422	(134,134)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	265		265
Stock option exercises, net of cashless exercises (in shares)		7,064
Issuance of shares for vested restricted stock grants (in shares)		51,199
Net loss	(837)			(837)
Ending balance (in shares) at Sep. 30, 2024		19,550,965
Ending balance at Sep. 30, 2024	$ 16,735	$ 19	$ 151,687	$ (134,971)

CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1,406)	$ (2,964)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	275	210
Stock-based compensation	842	1,347
Allowance for credit losses	(31)	23
Change in accrued interest and accretion of discount on short-term investments	0	(154)
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable	1,360	(1,284)
Decrease in other current assets and long-term assets	167	31
(Decrease) Increase in accounts payable and accrued expenses	(1,493)	431
(Decrease) Increase in deferred revenue	(897)	1,246
(Decrease) in liability for shares surrendered	(190)	0
Net cash used in operating activities	(1,373)	(1,114)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(47)	(68)
Proceeds from maturity of short-term investments	5,000	5,000
Purchases of short-term investments	0	(4,914)
Software development costs	(1,833)	0
Net cash provided by investing activities	3,120	18
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercises of stock options	20	0
Proceeds of insurance financing arrangement	0	49
Withholding taxes paid on RSU vesting	0	(54)
Repayment of insurance financing arrangements	0	(133)
Net cash provided by (used in) financing activities	20	(138)
Net increase (decrease) in cash	1,767	(1,234)
CASH, beginning of period	3,980	5,196
CASH, end of period	5,747	3,962
Supplemental disclosures of cash flow information:
Cash paid for interest	0	2
Cash paid for income taxes	$ 0	$ 78

NATURE OF BUSINESS	9 Months Ended
NATURE OF BUSINESS	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF BUSINESS	NATURE OF BUSINESS Business Intellicheck, Inc. (the “Company” or “Intellicheck”) is a prominent technology company that is engaged in developing, integrating and marketing identity verification solutions to address challenges that include commercial retail and banking fraud prevention. Intellicheck’s products include solutions for preventing identity fraud across any industry delivered via smartphone, tablet, POS integration or other electronic devices. Intellicheck continues to develop and release innovative products based upon its rich patent portfolio consisting of eleven (11) U.S. and one Canadian patents. Liquidity For the nine months ended September 30, 2024, the Company incurred a net loss of $(1,406) and used cash in operations of $(1,373). As of September 30, 2024, the Company had cash and cash equivalents of $5,747, working capital (defined as current assets minus current liabilities) of $5,699 and an accumulated deficit of $(134,971). Based on the Company’s business plan and cash resources, Intellicheck expects its existing cash and future resources and revenues generated from operations to satisfy its working capital requirements for at least the next 12 months from the date of filing.

SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

References in this Quarterly Report on Form 10-Q to “authoritative guidance” is to the Accounting Standards Codification ("ASC") issued by the Financial Accounting Standards Board (“FASB”).

For further information, refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Recent Accounting Pronouncements

after December 15, 2024. This change will apply retrospectively to all periods presented. The Company is currently evaluating the impact of this ASU on its financial statements.

Use of Estimates

Research and Development

Allowance for Credit Losses

Cash and Cash Equivalents

Short-term investments

Property and Equipment

Property and equipment are recorded at cost and are depreciated over their estimated useful lives ranging from three to seven years using the straight-line method. See Note 4.

Goodwill

Intangible Assets

Advertising Costs

Retirement Plan

Shipping Costs

Loss Contingencies and Legal Costs

Sales Taxes

Sales and other taxes collected from customers and remitted to governmental authorities are presented on a net basis and thus excluded from revenues.

Income Taxes

Fair Value of Financial Instruments

The three levels of the fair value hierarchy are as follows:


•Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities. The Company's Level 1 assets consisted primarily of cash and cash equivalents as well as short-term investments totaling $5,747 and $8,980 as of September 30, 2024 and December 31, 2023, respectively.
•Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active). Level 2 includes financial instruments that are valued using models or other valuation methodologies. The Company had $0 and $4 of Level 2 liabilities as of September 30, 2024 and December 31, 2023, respectively, for the liability-classified stock options. The fair value of these awards were determined by utilizing a Black-Scholes option pricing model.
•Level 3—Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when the fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The Company had no Level 3 assets or liabilities as of September 30, 2024 and December 31, 2023.

Revenue Recognition and Deferred Revenue

General

Nature of goods and services

Software as a Service (SaaS)

Equipment Revenue

Other Revenue

Disaggregation of revenue

In the following tables, revenue is disaggregated by product and service and the timing of revenue recognition.


	For the Three Months Ended September 30,
	2024		2023
Products and services

SaaS	$	4,661	$	4,635
Equipment	13		106
Other	35		19
	$	4,709	$	4,760

Timing of revenue recognition

Products transferred at a point in time	$	48	$	125
Services transferred over time	4,661		4,635
	$	4,709	$	4,760


	For the Nine Months Ended September 30,
	2024		2023
Products and services

SaaS	$	13,896	$	13,526
Equipment	109		152
Other	55		52
	$	14,060	$	13,730

Timing of revenue recognition

Products transferred at a point in time	$	164	$	204
Services transferred over time	13,896		13,526
	$	14,060	$	13,730

Contract balances

Accounts receivable

Transaction price allocated to the remaining performance obligations


	Remainder 2024		2025		2026		Total

SaaS	$	615	$	697	$	—	$	1,312
	$	615	$	697	$	—	$	1,312

All consideration from contracts with customers is included in the amounts presented above.

Business Concentrations and Credit Risk

Net Loss Per Share


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator:
Net loss	$	(837)	$	(724)	$	(1,406)	$	(2,964)

Denominator:
Weighted average common shares –
Basic/Diluted	19,499,174		19,278,295		19,390,258		19,209,620

Loss per common share
Basic/Diluted	$	(0.04)	$	(0.04)	$	(0.07)	$	(0.15)

The following table summarizes the common stock equivalents excluded from loss per diluted share because their effect would be anti-dilutive:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Stock options	1,483,007	1,230,905	1,483,007	1,230,905
Restricted stock units	77,869	73,182	77,869	73,182
	1,560,876	1,304,087	1,560,876	1,304,087

Segment Information

CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

9 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS


	As of September 30, 2024
	Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses		Estimated fair value

Cash and cash equivalents	$	5,747	$	—	$	—	$	5,747
U.S. treasury notes	—		—		—		—
Total cash, cash equivalents and short-term investments	$	5,747	$	—	$	—	$	5,747


	As of December 31, 2023
	Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses		Estimated fair value

Cash and cash equivalents	$	3,980	$	—	$	—	$	3,980
U.S. treasury notes (1)	5,000		—		—		5,000
Total cash, cash equivalents and short-term investments	$	8,980	$	—	$	—	$	8,980

(1) These U.S. treasury notes are classified as "held-to-maturity" as they were purchased in August 2023 and matured in January 2024.

PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Property and equipment, net is summarized as follows:


	September 30, 2024		December 31, 2023
Computer equipment and software	$	1,919	$	1,886
Furniture and fixtures	139		139
Office equipment	631		618
	2,689		2,643
Less – Accumulated depreciation	(2,116)		(1,977)
	$	573	$	666

INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

The changes in the carrying amount of intangible assets, net for the nine months ended September 30, 2024 were as follows:


Net balance at December 31, 2023	$	575
Addition: Capitalized software costs	1,832
Deduction: Amortization expense	(136)
Net balance at September 30, 2024	$	2,271

The following tables set forth the components of intangible assets as of September 30, 2024 and December 31, 2023:


		As of September 30, 2024
	Estimated Useful Life	Adjusted Carrying Amount		Accumulated Amortization		Net

Patents and copyrights	2-17 years	$	375	$	(319)	$	56
Developed technology	5 years	400		(367)		33
Software development	5 years	$	2,239	$	(57)	$	2,182
		$	3,014	$	(743)	$	2,271

The Company has capitalized $1,833 in software development costs as of September 30, 2024.


		As of December 31, 2023
	Estimated Useful Life	Adjusted Carrying Amount		Accumulated Amortization		Net

Patents and copyrights	2-17 years	$	375	$	(300)	$	75
Developed technology	5 years	400		(307)		93
Software development	5 years	$	407	$	—	407
		$	1,182	$	(607)	$	575

The following summarizes amortization of intangible assets included in the accompanying statements of operations:


	Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Cost of revenues	$	24	$	24	$	71	$	71
Selling, general and administrative	$	3	$	3	$	8	$	8
Research and development	$	57	$	—	$	57	$	—
	$	84	$	27	$	136	$	79

DEBT	9 Months Ended
DEBT	Sep. 30, 2024
Debt Disclosure [Abstract]
DEBT	DEBT Revolving Line of Credit On February 6, 2019, the Company entered into 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 the Company’s existing fixed income investment account with Citi Personal Wealth Management subject to certain limitations. The facility bears interest at a rate consistent with Citi Personal Wealth Management’s Base Rate (7.50% and 8.50% at September 30, 2024 and December 31, 2023, respectively) minus 2%. Interest is payable monthly and as of September 30, 2024 and December 31, 2023, there were no amounts outstanding 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.

ACCRUED EXPENSES

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

ACCRUED EXPENSES

Accrued expenses are comprised of the following:


	September 30, 2024		December 31, 2023
Professional fees	$	75	$	1
Payroll and related	969		1,159
Incentive bonuses	300		824
Sales tax accrual	387		1,064
Other	56		197
	$	1,787	$	3,245

INCOME TAXES	9 Months Ended
INCOME TAXES	Sep. 30, 2024
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES Our available net operating loss (“NOL”) as of December 31, 2023 was approximately $26,300, of which $10,900 expires between 2035 and 2037. In accordance with the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), U.S. NOLs arising in a tax year ending after 2017 in the amount of $15,400 will not expire, but are subject to 80% limitation on utilization. In addition to the NOLs, the Company has approximately $708 of research and development credits. ASC 740 requires evaluation of uncertain tax positions and as of September 30, 2024, the Company has no material uncertain tax positions.

STOCKHOLDERS’ EQUITY

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

STOCKHOLDERS' EQUITY

Stock-based Compensation

value based measurement method in accounting for all stock-based compensation payment transactions with employees. All stock-based compensation is included in operating expenses as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Compensation cost recognized:
Selling, general and administrative	$	220	$	301	$	601	$	1,125
Research and development	17		41		41		222
	$	237	$	342	$	642	$	1,347

Stock Options

Stock option activity under the 2015 Plan during the period indicated below is as follows:


	Number of Shares Subject to Issuance	Weighted- average Exercise Price		Weighted- average Remaining Contractual Term	Aggregate Intrinsic Value

Outstanding at December 31, 2023	1,152,714	$	3.07	3.18 years	$	38
Granted	620,978	1.86		–	–
Forfeited, cancelled, or expired	(184,582)	2.68		–	–
Exercised	(11,939)	$	1.87	—	—
Outstanding at September 30, 2024	1,577,171	$	2.04	1.98 years	$	181

Exercisable at September 30, 2024	478,337	$	3.68	2.78 years	$	72

Restricted Stock Units

RSU activity during the period indicated below is as follows:


	Number of RSUs	Weighted Average Grant Date Fair Value

Outstanding at December 31, 2023	60,500	$	4.23
Granted	202,057	2.21
Vested and settled in shares	(184,688)	3.16

Outstanding at September 30, 2024	77,869	$	1.75

The Company had 506,097 shares available for future grants under the Company's equity compensation plans at September 30, 2024.

COMMITMENTS AND CONTINGENCIES	9 Months Ended
COMMITMENTS AND CONTINGENCIES	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Leases The Company leases an office in Melville, New York. Rent expense, which includes utilities, was $8 and $19 for the three months ended September 30, 2024 and 2023, respectively, and $23 and $54 for the nine months ended September 30, 2024 and 2023, respectively, and is included in selling, general and administrative expenses on the condensed Statements of Operations. The Company determines if an arrangement is a lease at lease inception. The arrangement is a lease if it conveys the right to the Company to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company did not have an Operating Lease ROU or Operating Lease Liability as of September 30, 2024, as its office lease is on a month-to-month term and allows for either party to terminate the lease without a significant penalty. Legal Proceedings The Company is not aware of any infringement by our products or technology on the proprietary rights of others. From time to time, the Company may be involved in lawsuits, claims, investigations and proceedings, consisting of intellectual property, commercial, employment and other matters, which arise in the ordinary course of business. In accordance with GAAP, the Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, ruling, advice of legal counsel and other information and events pertaining to a particular case. Litigation is inherently unpredictable. If any unfavorable ruling was to occur in any specific period or if a loss becomes probable and estimable, there exists the possibility of a material adverse impact on the Company’s results of operations, financial position or cash flows. As of September 30, 2024, no material amounts are recorded related to legal proceedings on the balance sheets. The Company was served a class action complaint in March 2024 alleging violations of the Illinois Biometric Information Privacy Act. The litigation is currently in its early stage and the Company does not currently believe that a material loss is probable. As such, the Company has not recognized a liability and intends to fully defend the matter.

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net loss	$ (837)	$ (724)	$ (1,406)	$ (2,964)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Basis of Presentation

References in this Quarterly Report on Form 10-Q to “authoritative guidance” is to the Accounting Standards Codification ("ASC") issued by the Financial Accounting Standards Board (“FASB”).

Recent Accounting Pronouncements

after December 15, 2024. This change will apply retrospectively to all periods presented. The Company is currently evaluating the impact of this ASU on its financial statements.

Use of Estimates

Research and Development

Allowance for Credit Losses

Cash and Cash Equivalents

Short-term investments

Property and Equipment

Property and equipment are recorded at cost and are depreciated over their estimated useful lives ranging from three to seven years using the straight-line method.

Shipping Costs and Sales Taxes and Revenue Recognition and Deferred Revenue

Shipping Costs

Sales Taxes

Sales and other taxes collected from customers and remitted to governmental authorities are presented on a net basis and thus excluded from revenues.

Revenue Recognition and Deferred Revenue

General

Nature of goods and services

Software as a Service (SaaS)

Equipment Revenue

Other Revenue

Loss Contingencies and Legal Costs

Income Taxes

Fair Value of Financial Instruments

The three levels of the fair value hierarchy are as follows:


•Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities. The Company's Level 1 assets consisted primarily of cash and cash equivalents as well as short-term investments totaling $5,747 and $8,980 as of September 30, 2024 and December 31, 2023, respectively.
•Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active). Level 2 includes financial instruments that are valued using models or other valuation methodologies. The Company had $0 and $4 of Level 2 liabilities as of September 30, 2024 and December 31, 2023, respectively, for the liability-classified stock options. The fair value of these awards were determined by utilizing a Black-Scholes option pricing model.
•Level 3—Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when the fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The Company had no Level 3 assets or liabilities as of September 30, 2024 and December 31, 2023.

Business Concentrations and Credit Risk

Net Loss Per Share

Segment Information

SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Schedule of Revenue Disaggregated by Product and Service and Timing of Revenue Recognition

In the following tables, revenue is disaggregated by product and service and the timing of revenue recognition.


	For the Three Months Ended September 30,
	2024		2023
Products and services

SaaS	$	4,661	$	4,635
Equipment	13		106
Other	35		19
	$	4,709	$	4,760

Timing of revenue recognition

Products transferred at a point in time	$	48	$	125
Services transferred over time	4,661		4,635
	$	4,709	$	4,760


	For the Nine Months Ended September 30,
	2024		2023
Products and services

SaaS	$	13,896	$	13,526
Equipment	109		152
Other	55		52
	$	14,060	$	13,730

Timing of revenue recognition

Products transferred at a point in time	$	164	$	204
Services transferred over time	13,896		13,526
	$	14,060	$	13,730

Schedule of Revenue Expected to be Recognized Related to Performance Obligations


	Remainder 2024		2025		2026		Total

SaaS	$	615	$	697	$	—	$	1,312
	$	615	$	697	$	—	$	1,312

Schedule of Basic and Diluted Earnings Per Share


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator:
Net loss	$	(837)	$	(724)	$	(1,406)	$	(2,964)

Denominator:
Weighted average common shares –
Basic/Diluted	19,499,174		19,278,295		19,390,258		19,209,620

Loss per common share
Basic/Diluted	$	(0.04)	$	(0.04)	$	(0.07)	$	(0.15)

Summary of Common Stock Equivalents Excluded from Loss Per Diluted Share

The following table summarizes the common stock equivalents excluded from loss per diluted share because their effect would be anti-dilutive:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Stock options	1,483,007	1,230,905	1,483,007	1,230,905
Restricted stock units	77,869	73,182	77,869	73,182
	1,560,876	1,304,087	1,560,876	1,304,087

CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Tables)

9 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

Schedule of Cash and Cash Equivalents and Short-Term Investments

The following table summarizes the fair value of cash and cash equivalents, and short-term investments as well as any gross unrealized holding gains and losses as of September 30, 2024 and December 31, 2023. Due to the nature of these assets and


	As of September 30, 2024
	Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses		Estimated fair value

Cash and cash equivalents	$	5,747	$	—	$	—	$	5,747
U.S. treasury notes	—		—		—		—
Total cash, cash equivalents and short-term investments	$	5,747	$	—	$	—	$	5,747


	As of December 31, 2023
	Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses		Estimated fair value

Cash and cash equivalents	$	3,980	$	—	$	—	$	3,980
U.S. treasury notes (1)	5,000		—		—		5,000
Total cash, cash equivalents and short-term investments	$	8,980	$	—	$	—	$	8,980

(1) These U.S. treasury notes are classified as "held-to-maturity" as they were purchased in August 2023 and matured in January 2024.

PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net

Property and equipment, net is summarized as follows:


	September 30, 2024		December 31, 2023
Computer equipment and software	$	1,919	$	1,886
Furniture and fixtures	139		139
Office equipment	631		618
	2,689		2,643
Less – Accumulated depreciation	(2,116)		(1,977)
	$	573	$	666

INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in Carrying Amount of Intangible Assets, Net

The changes in the carrying amount of intangible assets, net for the nine months ended September 30, 2024 were as follows:


Net balance at December 31, 2023	$	575
Addition: Capitalized software costs	1,832
Deduction: Amortization expense	(136)
Net balance at September 30, 2024	$	2,271

Schedule of Components of Intangible Assets

The following tables set forth the components of intangible assets as of September 30, 2024 and December 31, 2023:


		As of September 30, 2024
	Estimated Useful Life	Adjusted Carrying Amount		Accumulated Amortization		Net

Patents and copyrights	2-17 years	$	375	$	(319)	$	56
Developed technology	5 years	400		(367)		33
Software development	5 years	$	2,239	$	(57)	$	2,182
		$	3,014	$	(743)	$	2,271

The Company has capitalized $1,833 in software development costs as of September 30, 2024.


		As of December 31, 2023
	Estimated Useful Life	Adjusted Carrying Amount		Accumulated Amortization		Net

Patents and copyrights	2-17 years	$	375	$	(300)	$	75
Developed technology	5 years	400		(307)		93
Software development	5 years	$	407	$	—	407
		$	1,182	$	(607)	$	575

Schedule of Amortization Expense of Intangible Assets

The following summarizes amortization of intangible assets included in the accompanying statements of operations:


	Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Cost of revenues	$	24	$	24	$	71	$	71
Selling, general and administrative	$	3	$	3	$	8	$	8
Research and development	$	57	$	—	$	57	$	—
	$	84	$	27	$	136	$	79

ACCRUED EXPENSES (Tables)

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses are comprised of the following:


	September 30, 2024		December 31, 2023
Professional fees	$	75	$	1
Payroll and related	969		1,159
Incentive bonuses	300		824
Sales tax accrual	387		1,064
Other	56		197
	$	1,787	$	3,245

STOCKHOLDERS’ EQUITY (Tables)

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Schedule of Stock-Based Compensation Included in Operating Expenses

All stock-based compensation is included in operating expenses as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Compensation cost recognized:
Selling, general and administrative	$	220	$	301	$	601	$	1,125
Research and development	17		41		41		222
	$	237	$	342	$	642	$	1,347

Schedule of Stock Option Activity

Stock option activity under the 2015 Plan during the period indicated below is as follows:


	Number of Shares Subject to Issuance	Weighted- average Exercise Price		Weighted- average Remaining Contractual Term	Aggregate Intrinsic Value

Outstanding at December 31, 2023	1,152,714	$	3.07	3.18 years	$	38
Granted	620,978	1.86		–	–
Forfeited, cancelled, or expired	(184,582)	2.68		–	–
Exercised	(11,939)	$	1.87	—	—
Outstanding at September 30, 2024	1,577,171	$	2.04	1.98 years	$	181

Exercisable at September 30, 2024	478,337	$	3.68	2.78 years	$	72

Schedule of Restricted Stock Unit (RSU) Activity

RSU activity during the period indicated below is as follows:


	Number of RSUs	Weighted Average Grant Date Fair Value

Outstanding at December 31, 2023	60,500	$	4.23
Granted	202,057	2.21
Vested and settled in shares	(184,688)	3.16

Outstanding at September 30, 2024	77,869	$	1.75

NATURE OF BUSINESS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
NATURE OF BUSINESS (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net loss	$ (837)	$ (724)	$ (1,406)	$ (2,964)
Net cash provided by operations			(1,373)	$ (1,114)
Cash and cash equivalents	5,747		5,747		$ 3,980
Working capital	5,699		5,699
Accumulated deficit	$ (134,971)		$ (134,971)		$ (133,565)

SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details)	3 Months Ended		9 Months Ended
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) financial_institution segment	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Product Information [Line Items]
Goodwill, impairment charges			$ 0	$ 0
Intangible assets, impairment charges	$ 0	$ 0	0	0
Capitalized software development costs, impairment charges	0	0	0	0
Advertising costs	144,000	99,000	327,000	$ 470,000
Equity awards liability	0		0		$ 4,000
Deferred revenue	1,312,000		1,312,000		2,209,000
Revenue recognized			2,106,000
Accounts receivable, net of allowance for doubtful accounts	3,374,000		3,374,000		4,703,000
Accounts receivable, allowance for doubtful accounts	100,000		$ 100,000		69,000
Number of financial institutions \| financial_institution			2
Number of reportable segments \| segment			1
Number of operating segments \| segment			1
Three Customers \| Revenue from Contract with Customer Benchmark \| Customer Concentration Risk
Product Information [Line Items]
Business concentration risk, percent			46.00%	49.00%
Three Customers \| Accounts Receivable \| Customer Concentration Risk
Product Information [Line Items]
Business concentration risk, percent				46.00%
Customer One \| Revenue from Contract with Customer Benchmark \| Customer Concentration Risk
Product Information [Line Items]
Business concentration risk, percent			19.00%	21.00%
Customer One \| Accounts Receivable \| Customer Concentration Risk
Product Information [Line Items]
Business concentration risk, percent			30.00%	38.00%
Customer Two \| Revenue from Contract with Customer Benchmark \| Customer Concentration Risk
Product Information [Line Items]
Business concentration risk, percent			15.00%	14.00%
Customer Two \| Accounts Receivable \| Customer Concentration Risk
Product Information [Line Items]
Business concentration risk, percent			1.00%	3.00%
Customer Three \| Revenue from Contract with Customer Benchmark \| Customer Concentration Risk
Product Information [Line Items]
Business concentration risk, percent			12.00%	14.00%
Customer Three \| Accounts Receivable \| Customer Concentration Risk
Product Information [Line Items]
Business concentration risk, percent			6.00%	5.00%
Four Customers \| Accounts Receivable \| Customer Concentration Risk
Product Information [Line Items]
Business concentration risk, percent			47.00%
Customer Four \| Accounts Receivable \| Customer Concentration Risk
Product Information [Line Items]
Business concentration risk, percent			10.00%
Fair Value, Inputs, Level 1
Product Information [Line Items]
Cash, cash equivalents and short-term investments	5,747,000		$ 5,747,000		8,980,000
Fair Value, Inputs, Level 2
Product Information [Line Items]
Equity awards liability	0		$ 0		$ 4,000
Retirement Savings 401k Plan
Product Information [Line Items]
Retirement plan, maximum employee contribution, percent			35.00%
Retirement plan, employer matching contribution, percent of match			50.00%
Retirement plan, employer matching contribution, percent of employees' gross pay			6.00%
Retirement plan, matching contributions	$ 0	$ 31,000	$ 0	$ 85,000
Minimum
Product Information [Line Items]
Property and equipment, useful life	3 years		3 years
Maximum
Product Information [Line Items]
Property and equipment, useful life	7 years		7 years

SIGNIFICANT ACCOUNTING POLICIES - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Product Information [Line Items]
Revenue	$ 4,709	$ 4,760	$ 14,060	$ 13,730
Products transferred at a point in time
Product Information [Line Items]
Revenue	48	125	164	204
Services transferred over time
Product Information [Line Items]
Revenue	4,661	4,635	13,896	13,526
SaaS
Product Information [Line Items]
Revenue	4,661	4,635	13,896	13,526
Equipment
Product Information [Line Items]
Revenue	13	106	109	152
Other
Product Information [Line Items]
Revenue	$ 35	$ 19	$ 55	$ 52

SIGNIFICANT ACCOUNTING POLICIES - Schedule of Revenue Performance Obligations (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 1,312
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 615
Revenue, remaining performance obligation, period	3 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 697
Revenue, remaining performance obligation, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 0
Revenue, remaining performance obligation, period	12 months
SaaS
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 1,312
SaaS \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 615
Revenue, remaining performance obligation, period	3 months
SaaS \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 697
Revenue, remaining performance obligation, period	12 months
SaaS \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 0
Revenue, remaining performance obligation, period	12 months

SIGNIFICANT ACCOUNTING POLICIES - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Numerator:
Net loss	$ (837)	$ (724)	$ (1,406)	$ (2,964)
Weighted average common shares –
Basic (in shares)	19,499,174	19,278,295	19,390,258	19,209,620
Diluted (in shares)	19,499,174	19,278,295	19,390,258	19,209,620
Loss per common share
Basic (in dollars per share)	$ (0.04)	$ (0.04)	$ (0.07)	$ (0.15)
Diluted (in dollars per share)	$ (0.04)	$ (0.04)	$ (0.07)	$ (0.15)

SIGNIFICANT ACCOUNTING POLICIES - Summary of Common Stock Equivalents Excluded from Loss Per Diluted Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from loss per diluted share (in shares)	1,560,876	1,304,087	1,560,876	1,304,087
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from loss per diluted share (in shares)	1,483,007	1,230,905	1,483,007	1,230,905
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from loss per diluted share (in shares)	77,869	73,182	77,869	73,182

CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS - Schedule of Cash and Cash Equivalents and Short Term Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Amortized cost
Cash and cash equivalents	$ 5,747	$ 3,980
Fair Value, Inputs, Level 1
Amortized cost
Cash and cash equivalents	5,747	3,980
Total cash, cash equivalents and short-term investments	5,747	8,980
Gross unrealized holding gains
Total cash, cash equivalents and short-term investments	0	0
Gross unrealized holding losses
Total cash, cash equivalents and short-term investments	0	0
Estimated fair value
Cash and cash equivalents	5,747	3,980
Total cash, cash equivalents and short-term investments	5,747	8,980
U.S. treasury notes \| Fair Value, Inputs, Level 1
Amortized cost
U.S. treasury notes	0	5,000
Gross unrealized holding gains
Total cash, cash equivalents and short-term investments	0	0
Gross unrealized holding losses
Total cash, cash equivalents and short-term investments	0	0
Estimated fair value
U.S. treasury notes	$ 0	$ 5,000

CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS - Narrative (Details) - U.S. treasury notes - Fair Value, Inputs, Level 1	3 Months Ended
	Sep. 30, 2024 USD ($) number_security
Schedule of Held-to-Maturity Securities [Line Items]
Number of securities in unrealized loss position for more than 12 months \| number_security	0
Short-term investments, realized gains or losses \| $	$ 0

PROPERTY AND EQUIPMENT - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 2,689	$ 2,643
Less – Accumulated depreciation	(2,116)	(1,977)
Property and equipment, net	573	666
Computer equipment and software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,919	1,886
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	139	139
Office equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 631	$ 618

PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 47	$ 45	$ 139	$ 131

INTANGIBLE ASSETS - Schedule of Changes in Carrying Amount of Intangible Assets, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Goodwill [Roll Forward]
Beginning balance			$ 575
Addition: Capitalized software costs			1,832
Deduction: Amortization expense	$ (84)	$ (27)	(136)	$ (79)
Ending balance	$ 2,271		$ 2,271

INTANGIBLE ASSETS - Schedule of Intangible Asset Components (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Adjusted Carrying Amount	$ 3,014	$ 1,182
Accumulated Amortization	(743)	(607)
Net	2,271	575
Patents and copyrights
Finite-Lived Intangible Assets [Line Items]
Adjusted Carrying Amount	375	375
Accumulated Amortization	(319)	(300)
Net	$ 56	$ 75
Patents and copyrights \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	2 years	2 years
Patents and copyrights \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	17 years	17 years
Developed technology
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	5 years	5 years
Adjusted Carrying Amount	$ 400	$ 400
Accumulated Amortization	(367)	(307)
Net	$ 33	$ 93
Software development
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	5 years	5 years
Adjusted Carrying Amount	$ 2,239	$ 407
Accumulated Amortization	(57)	0
Net	$ 2,182	$ 407

INTANGIBLE ASSETS - Narrative (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Capitalized computer software costs	$ 1,833

INTANGIBLE ASSETS - Schedule of Intangible Assets Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Goodwill [Line Items]
Amortization expense	$ 84	$ 27	$ 136	$ 79
Cost of revenues
Goodwill [Line Items]
Amortization expense	24	24	71	71
Selling, general and administrative
Goodwill [Line Items]
Amortization expense	3	3	8	8
Research and development
Goodwill [Line Items]
Amortization expense	$ 57	$ 0	$ 57	$ 0

DEBT (Details) - Citi Personal Wealth Management - Revolving Credit Facility - Line of Credit - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023	Feb. 06, 2019
Line of Credit Facility [Line Items]
Maximum borrowing capacity (up to)			$ 2,000,000
Amount outstanding	$ 0	$ 0
Unused availability	$ 2,000,000	$ 2,000,000
Variable Rate Component One
Line of Credit Facility [Line Items]
Interest rate, basis spread	7.50%	8.50%
Variable Rate Component Two
Line of Credit Facility [Line Items]
Interest rate, basis spread	(2.00%)	(2.00%)

ACCRUED EXPENSES - Schedule of Components of Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Professional fees	$ 75	$ 1
Payroll and related	969	1,159
Incentive bonuses	300	824
Sales tax accrual	387	1,064
Other	56	197
Accrued expenses	$ 1,787	$ 3,245

INCOME TAXES (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Income Tax Disclosure [Abstract]
Available net operating loss	$ 26,300
Available net operating loss, expires between 2035 and 2037	10,900
Net operating loss carryforwards, not subject to expiration	15,400
Research and development tax credits	$ 708

STOCKHOLDERS’ EQUITY - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Class of Stock [Line Items]
Shares available for future grants (in shares)	506,097		506,097
Unvested Employee Stock Options and RSUs
Class of Stock [Line Items]
Unrecognized compensation cost	$ 871		$ 871
Weighted average period of recognition			2 years
2015 Omnibus Incentive Plan
Class of Stock [Line Items]
Increased (decrease) in stock-based compensation	$ 0	$ (39)	$ (4)	$ (14)
2015 Omnibus Incentive Plan \| Maximum
Class of Stock [Line Items]
Shares authorized (up to) (in shares)	5,236,000		5,236,000
2015 Omnibus Incentive Plan \| Stock options
Class of Stock [Line Items]
Expiration period			10 years
2015 Omnibus Incentive Plan \| Stock options \| Maximum
Class of Stock [Line Items]
Vesting period			4 years
2015 Omnibus Incentive Plan \| Stock options \| Minimum
Class of Stock [Line Items]
Percentage of fair value per share granted (not less than)	110.00%		110.00%
Percentage of grants owning more than voting stock	10.00%		10.00%
Vesting period			1 year

STOCKHOLDERS’ EQUITY - Schedule of Stock-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Compensation cost recognized	$ 237	$ 342	$ 642	$ 1,347
Selling, general and administrative
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Compensation cost recognized	220	301	601	1,125
Research and development
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Compensation cost recognized	$ 17	$ 41	$ 41	$ 222

STOCKHOLDERS' EQUITY - Schedule of Stock Option Activity (Details) - Stock Option Plans $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2024 USD ($) $ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares
Number of Shares Subject to Issuance
Outstanding, beginning balance (in shares) \| shares	1,152,714
Granted (in shares) \| shares	620,978
Forfeited, cancelled, or expired (in shares) \| shares	(184,582)
Exercised (in shares) \| shares	(11,939)
Outstanding, ending balance (in shares) \| shares	1,577,171	1,152,714
Exercisable at end of period (in shares) \| shares	478,337
Weighted- average Exercise Price
Outstanding, beginning balance (in dollars per share) \| $ / shares	$ 3.07
Granted (in dollars per share) \| $ / shares	1.86
Forfeited, cancelled, or expired (in dollars per share) \| $ / shares	2.68
Exercised (in dollars per share) \| $ / shares	1.87
Outstanding, ending balance (in dollars per share) \| $ / shares	2.04	$ 3.07
Exercisable at end of period (in dollars per share) \| $ / shares	$ 3.68
Weighted- average Remaining Contractual Term
Outstanding	1 year 11 months 23 days	3 years 2 months 4 days
Exercisable at end of period	2 years 9 months 10 days
Aggregate Intrinsic Value
Outstanding \| $	$ 181	$ 38
Exercisable at end of period \| $	$ 72

STOCKHOLDERS' EQUITY - Schedule of Restricted Stock Unit (RSU) Activity (Details) - Restricted stock units	9 Months Ended
	Sep. 30, 2024 $ / shares shares
Number of RSUs
Outstanding, beginning balance (in shares) \| shares	60,500
Granted (in shares) \| shares	202,057
Vested and settled in shares (in shares) \| shares	(184,688)
Outstanding, ending balance (in shares) \| shares	77,869
Weighted Average Grant Date Fair Value
Outstanding, beginning of period (in dollars per share) \| $ / shares	$ 4.23
Granted (in dollars per share) \| $ / shares	2.21
Vested and settled in shares (in dollars per share) \| $ / shares	3.16
Outstanding, end of period (in dollars per share) \| $ / shares	$ 1.75

COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	3 Months Ended		9 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Rent expense	$ 8,000	$ 19,000	$ 23,000	$ 54,000
Operating lease, right of use asset	0		0
Operating lease, liability	$ 0		$ 0

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