authID Inc.

Previous wording

We have an accumulated deficit of approximately $173.8 million as of December 31, 2024 and incurred an operating loss of approximately $14.3 million for the year ended December 31, 2024. We have had net losses in most of our quarters since our inception. We expect that we will continue to incur net losses in 2025. We may incur losses in the future for a number of reasons, including the other risks described in this report, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown events. Accordingly, we may not be able to achieve or maintain profitability. Our management is developing plans and executing certain programs to alleviate the negative trends and conditions described above, however there is no guarantee that such plans will be successfully implemented. Our ability to curtail our operating losses or generate a profit may be further impacted by the fact that our business plan is largely unproven. There is no assurance that even if we successfully implement our business plan, that we will be able to curtail our losses. If we incur significant additional operating losses, our stock price may decline, perhaps significantly and the Company will need to raise substantial additional capital in order to be able to continue to operate, which will dilute the existing stockholders and such dilution may be significant. Additional capital may not be available on terms acceptable to the Company, or at all. As there can be no assurance that the Company will be able to achieve positive cash flows (become cash flow positive) and raise sufficient capital to maintain operations, there is substantial doubt about the Company’s ability to continue as a going concern.

Current wording

We have an accumulated deficit of approximately $191.7 million as of December 31, 2025 and incurred an operating loss of approximately $17.9 million for the year ended December 31, 2025. We have had net losses in most of our quarters since our inception. We expect that we will continue to incur net losses in 2026. We may incur losses in the future for a number of reasons, including the other risks described in this report, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown events. Accordingly, we may not be able to achieve or maintain profitability. Our management is developing plans and executing certain programs to alleviate the negative trends and conditions described above, however there is no guarantee that such plans will be successfully implemented. Our ability to curtail our operating losses or generate a profit may be further impacted by the fact that our business plan is largely unproven. There is no assurance that even if we successfully implement our business plan, that we will be able to curtail our losses. If we incur significant additional operating losses, our stock price may decline, perhaps significantly and the Company will need to raise substantial additional capital in order to be able to continue to operate, which will dilute the existing stockholders and such dilution may be significant. Additional capital may not be available on terms acceptable to the Company, or at all. As there can be no assurance that the Company will be able to achieve positive cash flows (become cash flow positive) and raise sufficient capital to maintain operations, there is substantial doubt about the Company’s ability to continue as a going concern.

Previous wording

We have had negative cash flow from operating activities of approximately $11.6 million and approximately $8.4 million for the years ended December 31, 2024 and 2023, respectively. We anticipate that we will continue to have negative cash flows from operating activities through at least the next 12 months as we expect to incur increased research and development, sales and marketing, and general and administrative expenses. Our business will require significant amounts of working capital to support our growth, particularly as we seek to introduce our new offered products. An inability to generate positive cash flow from operations may adversely affect our ability to raise needed capital for our business on reasonable terms, if at all. It may also diminish supplier or customer willingness to enter into transactions with us, and have other adverse effects that may impact our long-term viability. There can be no assurance we will achieve positive cash flows in the foreseeable future.

Current wording

We have had negative cash flow from operating activities of approximately $15.0 million and approximately $11.6 million for the years ended December 31, 2025 and 2024, respectively. We anticipate that we will continue to have negative cash flows from operating activities through at least the next 12 months as we expect to incur increased research and development, sales and marketing, and general and administrative expenses. Our business will require significant amounts of working capital to support our growth, particularly as we seek to introduce our new offered products. An inability to generate positive cash flow from operations may adversely affect our ability to raise needed capital for our business on reasonable terms, if at all. It may also diminish supplier or customer willingness to enter into transactions with us, and have other adverse effects that may impact our long-term viability. There can be no assurance we will achieve positive cash flows in the foreseeable future.

Previous wording

Our growth-oriented business plan to offer products to our customers will require continued capital investment. Our research and development activities will also require continued investment. We raised approximately $10.0 million and $15.4 million net proceeds after expenses in 2024 and 2023, respectively, through equity and debt financing at varying terms.

Current wording

Our growth-oriented business plan to offer products to our customers will require continued capital investment. Our research and development activities will also require continued investment. We raised approximately $11.4 million and $10.0 million net proceeds after expenses in 2025 and 2024, respectively, through equity and debt financing at varying terms.

Previous wording

There can be no assurance that we will successfully commercialize our products that are currently in development or that our existing products will sustain market acceptance.

Current wording

There can be no assurance that we will successfully commercialize our products that are currently in development or were recently launched, or that our existing products will sustain market acceptance.

Previous wording

There is no assurance that we will ever successfully commercialize our platform and related solutions or that we will experience market reception for our products in development or increased market reception for our existing products. There is no guarantee that we will be able to successfully implement our new products utilizing the acquired and internally developed technology, products, and customer base. There is no assurance that our existing products or solutions will achieve market acceptance or that our new products or solutions will achieve market acceptance. Further, there can be no guarantee that we will not lose business to our existing or potential new competitors.

Current wording

There is no assurance that we will ever successfully commercialize our platform and related solutions or that we will experience market reception for our products in development or increased market reception for our existing products. There is no guarantee that we will be able to successfully implement our new products utilizing the internally developed and licensed technology and products. There is no assurance that our existing or new products or solutions will achieve and sustain market acceptance. Further, there can be no guarantee that we will not lose business to our existing or potential new competitors.

Previous wording

Our ability to grow depends significantly on whether organizations of various types and sizes adopt our technology and solutions as part of their new standards. If these organizations do not adopt our technology, we may not be able to penetrate some of the new markets we are targeting, or we may lose some of our existing customer base.

Current wording

Our ability to grow depends on whether organizations of various types and sizes adopt our technology and solutions as part of their business processes. If these organizations do not adopt our technology, we may not be able to increase revenues, penetrate some of the new markets we are targeting, or we may lose some of our existing customer base.

Previous wording

In order for us to achieve our growth objectives, our identity verification and authentication technologies and solutions must be adapted to and adopted in a variety of areas including, among others, computer and online systems access control, and identity verification for transaction authentication purposes.

Current wording

In order for us to achieve our growth objectives, our identity verification and authentication technologies and solutions must be adapted to and adopted in a variety of areas including, among others, computer and online systems access control, and identity verification for onboarding new workforce members or consumers and for transaction authentication purposes.

Previous wording

We cannot accurately predict the future growth rate, if any, or the ultimate size of these markets. The growth of the market for our products and services depends on a number of factors such as the cost, performance and reliability of our products and services compared to the products and services of our competitors, customer perception of the benefits of our products and solutions, public perception of the intrusiveness of these solutions and the manner in which organizations use the information collected, customer satisfaction with our products and services and marketing efforts and publicity for our products and services. Our products and services may not adequately address market requirements and may not gain wide market acceptance. If our solutions or our products and services do not gain wide market acceptance, our business and our financial results will suffer.

Current wording

We cannot accurately predict the future growth rate, if any, or the ultimate size of these markets, or our penetration of these markets. The growth of the market for our products and services depends on a number of factors such as the cost, performance and reliability of our products and services compared to the products and services of our competitors, customer perception of the benefits of our products and solutions, public perception of the intrusiveness of these solutions and the manner in which organizations use the information collected, customer satisfaction with our products and services and marketing efforts and publicity for our products and services. Our products and services may not adequately address market requirements and may not gain wide market acceptance. If our solutions or our products and services do not gain wide market acceptance, our business and our financial results will suffer.

Previous wording

On March 23, 2023, Rhon Daguro was appointed as our Chief Executive Officer. Our success depends on the continued services of Mr. Daguro and of certain other members of the current management team. Our executive team is incentivized by stock compensation grants that align the interests of investors with the executive team and certain executives have employment retention agreements. The loss of key management, engineering employees or third-party contractors could have a material and adverse effect on our business operations. Additionally, the success of our operations will largely depend upon our ability to successfully attract and maintain competent and qualified key management personnel. As with any company with limited resources, there can be no guarantee that we will be able to attract such individuals or that the presence of such individuals will necessarily translate into profitability for our company. If we are successful in attracting and retaining such individuals, it is likely that our payroll costs and related expenses will increase significantly and that there will be additional dilution to existing stockholders as a result of equity incentives that may need to be issued to such management personnel. Our inability to attract and retain key personnel may materially and adversely affect our business operations. Any failure by our management to effectively anticipate, implement, and manage personnel required to sustain our growth would have a material adverse effect on our business, financial condition, and results of operations.

Current wording

On March 23, 2023, Rhoniel A. Daguro was appointed as our Chief Executive Officer. Our success depends on the continued services of Mr. Daguro and of certain other members of the current management team. Our executive team is incentivized in part by stock compensation grants that align the interests of investors with the executive team and certain executives have employment retention agreements. The loss of key management, engineering employees or third-party contractors could have a material and adverse effect on our business operations. Additionally, the success of our operations will largely depend upon our ability to successfully attract and maintain competent and qualified key management personnel. As with any company with limited resources, there can be no guarantee that we will be able to attract such individuals or that the presence of such individuals will necessarily translate into profitability for our company. If we are successful in attracting and retaining such individuals, it is likely that our payroll costs and related expenses will increase significantly and that there will be additional dilution to existing stockholders as a result of equity incentives that may need to be issued to such management personnel. Our inability to attract and retain key personnel may materially and adversely affect our business operations. Any failure by our management to effectively anticipate, implement, and manage personnel required to sustain our growth would have a material adverse effect on our business, financial condition, and results of operations.

Previous wording

We do not have or require any approval from government authorities or agencies in order to operate our regular business and operations. However, data protection legislation in various countries in which the Company does business (including India and the EEA) may require it to register its databases with governmental authorities in those countries and to comply with additional disclosure and consent requirements with regard to the collection, storage and use of personal information of individuals resident in those countries. To the extent that our contracts are with Governmental or regulated entities, the relevant government authorities will need to approve us as a supplier and the terms of those contracts. However, it is possible that any proposed expansion to our business and operations in the future would require government approvals. Due to the security applications and biometric technology associated with our products and platforms the activities and operations of our company are or could become subject to license restrictions and other regulations, such as (without limitation) export controls and other security regulation by government agencies. As indicated in, “We are exposed to risks in operating in foreign markets” above, the imposition of sanctions on particular countries, entities or individuals would prevent us from doing business with such countries, entities or individuals. If our existing and proposed products become subject to licensing, export control and other regulations, we may incur increased costs necessary to comply with existing and newly adopted or amended laws and regulations or penalties for any failure to comply. Our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations (and amendments thereto) relating to our business or industry.

Current wording

We do not have or require any approval from government authorities or agencies in order to operate our regular business and operations. However, data protection legislation in various countries in which the Company or its customers do business may require it to register its databases with governmental authorities in those countries and to comply with additional disclosure and consent requirements with regard to the collection, storage and use of personal information of individuals in those countries. To the extent that our contracts are with Governmental or regulated entities, the relevant government authorities will need to approve us as a supplier and the terms of those contracts. However, it is possible that any proposed expansion to our business and operations in the future would require government approvals. Due to the security applications and biometric technology associated with our products and platforms the activities and operations of our company are or could become subject to license restrictions and other regulations, such as (without limitation) export controls and other security regulation by government agencies. As indicated in, “We are exposed to risks in operating in foreign markets”below, the imposition of sanctions on particular countries, entities or individuals would prevent us from doing business with such countries, entities or individuals. If our existing and proposed products become subject to licensing, export control and other regulations, we may incur increased costs necessary to comply with existing and newly adopted or amended laws and regulations or penalties for any failure to comply. Our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations (and amendments thereto) relating to our business or industry.

Previous wording

Jurisdictions around the world are developing and passing new regulations that apply specifically to the use of AI. For example, the EU AI Act was adopted in 2024 and will be implemented in phases through 2030, and other jurisdictions are considering similarly focused legislation. These regulations and the evolving AI regulatory environment may, among other impacts, result in inconsistencies among AI regulations and frameworks across jurisdictions, increase our compliance, governance and research and development costs, increase our exposure to claims related to our AI models and increase liability related to the use of AI by our customers or users that are beyond our control. There can be no guarantee that future AI regulations will not adversely impact us or conflict with our approach to AI, including affecting our ability to make our offerings available without costly changes, delaying or halting development of our offerings, requiring us to change our development practices, go to market strategies and indemnity protections and subjecting us to additional compliance requirements, regulatory action, competitive harm, reputational harm and legal liability. To the extent we rely on third-party AI technologies in our products, services and solutions, we will face risks inherent in how those technologies and their AI models have been developed and deployed.

Current wording

Jurisdictions around the world are developing and passing new regulations that apply specifically to the use of AI. For example, the EU AI Act was adopted in 2024 and will be implemented in phases through 2030, and other jurisdictions are considering similarly focused legislation. These regulations and the evolving AI regulatory environment may, among other impacts, result in inconsistencies among AI regulations and frameworks across jurisdictions, increase our compliance, governance and research and development costs, increase our exposure to claims related to our AI models and increase liability related to the use of AI by our customers or users that are beyond our control. There can be no guarantee that future AI regulations, or customer requirements relating to AI will not adversely impact us or conflict with our approach to AI, including affecting our ability to make our offerings available without costly changes, delaying or halting development of our offerings, requiring us to change our development practices, go to market strategies and indemnity protections and subjecting us to additional compliance requirements, regulatory action, competitive harm, reputational harm and legal liability. To the extent we rely on third-party AI technologies in our products, services and solutions, we will face risks inherent in how those technologies and their AI models have been developed and deployed.

Previous wording

We depend upon a small number of large sales with contractual commitments ranging from $500,000 up to $10,000,000, which take longer to close and may result in a concentration of business and unpredictable quarterly revenue.

Current wording

We depend upon a small number of large sales with contractual commitments ranging from $500,000 to $2,000,000, which take longer to close and may result in a concentration of business and unpredictable quarterly revenue.

Previous wording

We derive a substantial portion of our revenues from a small number of sales with large contractual commitments ranging from $500,000 up to $10,000,000. We have changed the product set of the business and have developed a new range of software as a service (SaaS) based products and solutions, which are in a lower price range and intended to generate recurring revenue from a large number of customers. We have at the same time changed our marketing focus to target major enterprises, which involve a longer sales cycle but if we are successful in securing contracts with multi-million dollar contractual commitments with such enterprises, we believe that such contracts will generate substantial, sustainable revenue growth. At the same time, we are also focusing our efforts in expanding our channel partner relationships, in the expectation that these will bring additional sales that will be quicker and easier to close. We are still endeavoring to enter into multi-year contracts for our new products with minimum commitments ranging in price from $50,000 to $10,000,000 and we may, or may not, be successful in achieving such sales. If we are successful in securing the major contractual commitments that we are targeting, that may result in concentration of our business amongst a small number of customers, the loss of any one of which could have significant adverse effects on our revenue and financial situation. Additionally, the longer sales and implementation cycle of major enterprises may delay the recognition of revenue and adversely affect our results of operations in the meantime. Some of our large contractual commitments are from enterprises, which are at an early stage of business development and the ramp in their business and processing volumes may be unpredictable. Accordingly, our quarterly results are difficult to predict because we cannot predict in which quarter, if any, substantial sales (whether measured in commitment volumes, or number of contracts) will occur in a given year, nor when (if at all), or at what rate the ramp in sales of new products will occur. As a result, we believe that quarter-to-quarter comparisons of our sales are not a good indication of our future performance. In some future quarters, our sales may be below the expectations of securities analysts and investors, in which case the market price of our Common Stock may decrease significantly.

Current wording

We derive a substantial portion of our revenues from a small number of sales with large contractual commitments ranging from $500,000 to $2,000,000. We have changed the product set of the business and have developed a new range of SaaS based products and solutions, which are in a lower price range and intended to generate recurring revenue from a large number of customers. We have at the same time changed our marketing focus to target major enterprises, which involve a longer sales cycle but if we are successful in securing contracts with multi-million dollar contractual commitments with such enterprises, we believe that such contracts will generate substantial, sustainable revenue growth. At the same time, we are also focusing our efforts in expanding our channel partner relationships, in the expectation that these will bring additional sales that will be quicker and easier to close. We are still endeavoring to enter into multi-year contracts for our new products with minimum commitments ranging in price and we may, or may not, be successful in achieving such sales. If we are successful in securing the major contractual commitments that we are targeting, that may result in concentration of our business amongst a small number of customers, the loss of any one of which could have significant adverse effects on our revenue and financial situation. Additionally, the longer sales and implementation cycle of major enterprises may delay the recognition of revenue and adversely affect our results of operations in the meantime. Some of our large contractual commitments are from enterprises, which are at an early stage of business development and the ramp in their business and processing volumes may be unpredictable. Accordingly, our quarterly results are difficult to predict because we cannot predict in which quarter, if any, substantial sales (whether measured in commitment volumes, or number of contracts) will occur in a given year, nor when (if at all), or at what rate the ramp in sales of new products will occur. As a result, we believe that quarter-to-quarter comparisons of our sales are not a good indication of our future performance. In some future quarters, our sales may be below the expectations of securities analysts and investors, in which case the market price of our Common Stock may decrease significantly.

Previous wording

Our officers and directors and the holders of at least 5% of the outstanding shares of the Company currently beneficially own approximately 20% of our outstanding Common Stock, and 24% on a fully diluted basis assuming the exercise of both vested and unvested options and warrants. As such, they have a significant influence over most matters requiring approval by stockholders, including the election of directors and approval of significant corporate transactions. This concentration of ownership may also have the effect of delaying or preventing a change in control, which in turn could have a material adverse effect on the market price of the Company’s Common Stock or prevent stockholders from realizing a premium over the market price for their Shares.

Current wording

Our officers and directors and the holders of at least 5% of the outstanding shares of the Company currently beneficially own approximately 10% of our outstanding Common Stock, and 15% on a fully diluted basis assuming the exercise of both vested and unvested options and warrants. As such, they have a significant influence over most matters requiring approval by stockholders, including the election of directors and approval of significant corporate transactions. This concentration of ownership may also have the effect of delaying or preventing a change in control, which in turn could have a material adverse effect on the market price of the Company’s Common Stock or prevent stockholders from realizing a premium over the market price for their Shares.

Previous wording

The market price of our common stock has experienced significant price and volume fluctuations. For example, during the three-year period ended December 31, 2024, the closing price of our common stock ranged from $2.40 to $114.64. In addition, the stock market has from time-to-time experienced significant price and volume fluctuations that have particularly affected the market prices for the common stock of technology companies and that have often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the market price of our common stock. You may not be able to resell your shares at or above the price you paid for them due to fluctuations in the market price of our stock caused by changes in our operating performance or prospects and other factors.

Current wording

The market price of our common stock has experienced significant price and volume fluctuations. For example, during the three-year period ended December 31, 2025, the closing price of our common stock ranged from $0.86 to $11.95. In addition, the stock market has from time-to-time experienced significant price and volume fluctuations that have particularly affected the market prices for the common stock of technology companies and that have often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the market price of our common stock. You may not be able to resell your shares at or above the price you paid for them due to fluctuations in the market price of our stock caused by changes in our operating performance or prospects and other factors.