Intellicheck, Inc.
For the period ended Mar 31, 2025. Filed May 13, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 13, 2025
IDN$2.04+1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001628280-24-047890
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-13.
0001628280-25-025086
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 63 previous paragraphs and 54 current paragraphs.
30 unchanged; 12 reworded; 11 added; 16 removed; 5 previous and 1 current paragraphs rearranged.
Tables are not compared: 1 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendment requires new financial statement disclosures to provide disaggregated information for certain types of expenses, including employee compensation, depreciation, and amortization in commonly presented expense captions such as cost of revenue, sales and marketing, and general and administrative expenses. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is in the process of evaluating the effect that the adoption of these standards will have on its financial statements.
Current report
Valuation of long-lived assets
Current report
Our long-lived assets include property and equipment, goodwill, and intangible assets. As of March 31, 2025, the balances of property and equipment, goodwill and intangible assets, all net of accumulated depreciation and amortization, were $497, $8,102 and $2,434, respectively. As of December 31, 2024, the balances of property and equipment, goodwill and intangible assets, all net of accumulated depreciation and amortization, were $536, $8,102 and 2,374, respectively. Reference Note 2, “Significant Accounting Policies”; Note 4, “Property and Equipment”; and Note 5, “Goodwill and Intangible Assets” in the Notes to Financial Statements for details on the Company’s valuations of our long-lived assets.
Current report
Internal Use Capitalized Software
Current report
We capitalize certain costs related to the development of our platform and other software applications for internal use. In accordance with authoritative guidance, we begin to capitalize our costs to develop software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended. We stop capitalizing these costs when the software is substantially complete and ready for its intended use, including the completion of all significant testing. These costs are amortized on a straight-line basis over the estimated useful life of the related asset. We also capitalize costs related to specific upgrades and enhancements when it is probable the expenditure will result in additional functionality and expense costs incurred for maintenance and minor upgrades and enhancements. Costs incurred prior to meeting these criteria together with costs incurred for training and maintenance are expensed as incurred and recorded within research and development expenses in the statements of operations. We exercise judgment in determining the point at which various projects may be capitalized, in assessing the ongoing value of the capitalized costs and in determining the estimated useful lives over which the costs are amortized.
Current report
Use of Non-GAAP Measures
Current report
Adjusted Gross Profit
Current report
We use Adjusted Gross Profit as a non-GAAP financial performance measurement. Adjusted Gross Profit is calculated by adjusting gross profit for the reduction of amortization expense. Adjusted Gross Profit is provided to investors to supplement the results of operations reported in accordance with GAAP. We believe Adjusted Gross Profit is important because it focuses on the current operating performance, as amortization expense does not accurately reflect the current costs required to maintain the operational usage of our service. Rather, amortization expense reflects the allocation of historical software development costs over their estimated useful lives.
Current report
As an indicator of our operating performance, Adjusted Gross Profit should not be considered an alternative to, or more meaningful than, gross profit as determined in accordance with GAAP. Our Adjusted Gross Profit may not be comparable to a similarly titled measure of another company because other entities may not calculate Adjusted Gross Profit in the same manner.
Current report
The reconciliation of GAAP gross profit to Non-GAAP Adjusted Gross Profit is as follows:
Current report
Adjusted EBITDA
Removed paragraphs (16)
Previous report
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.
Previous report
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 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.
Previous report
Goodwill
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
Intangible Assets
Previous report
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.
Previous report
Deferred Income Taxes
Previous report
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.
Previous report
Commitments and Contingencies
Previous report
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.
Previous report
COMPARISON OF THE NINE MONTHS ENDED September 30, 2024
Previous report
TO THE NINE MONTHS ENDED September 30, 2023
Previous report
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.
Previous report
Adjusted EBITDA and Use of a Non-GAAP Measure
Reworded paragraphs (12)
Previous wording
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.
Current wording
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 including software development costs, revenue recognition (including breakage revenue), and the fair value of stock options under our stock-based compensation plans. Due to the inherent uncertainties involved in making estimates, actual results reported in future periods may be different from those estimates.
Previous wording
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.
Current wording
SaaS fees and service 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.
Previous wording
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.
Current wording
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 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.
Previous wording
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.
Current wording
Revenues for the three months ended March 31, 2025 increased $214, or 5%, to approximately $4,894 compared to $4,680 for the same period of 2024. The increase in revenues is primarily the result of higher SaaS revenue for the current period. SaaS revenue, which consists of software licensed on a subscription basis, increased $259 or 6% to $4,867 for the three months ended March 31, 2025 compared to $4,609 for the same period of 2024.
Previous wording
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.
Current wording
Gross profit increased $147, or 3%, to $4,391 for three months ended March 31, 2025 from $4,245 for the same period of 2024. Our gross profit, as a percentage of revenues, was 90% and 91% for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
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.
Current wording
Operating expenses, which consist of selling, general and administrative and research and development expenses, decreased $28, or 0.6%, to $4,740 for the three months ended March 31, 2025 compared to $4,768 for the same period of 2024.
Previous wording
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.
Current wording
As a result of the factors noted above, the Company had a net loss of $(318) for the three months ended March 31, 2025 as compared to a net loss of $(442) for the three months ended March 31, 2024.
Previous wording
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.
Current wording
As of March 31, 2025, we had cash and cash equivalents of $5,148, working capital (defined as current assets minus current liabilities) of $6,574, total assets of $24,561 and stockholders’ equity of $17,608.
Previous wording
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.
Current wording
During the three months ended March 31, 2025, we generated cash of $750 in operating activities as compared to net cash of $869 generated by operating activities in the three months ended March 31, 2024. Cash used in investing activities was $(173) for the three months ended March 31, 2025 compared to cash provided by investing activities of $4,390 for the three months ended March 31, 2024. Cash used in financing activities was $(95) for the three months ended March 31, 2025 compared to net cash of $0 used in financing activities for the three months ended March 31, 2024.
Previous wording
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.
Current wording
Our available net operating loss (“NOL”) as of December 31, 2024 was approximately $28,500, 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 $17,600 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.
Previous wording
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
Current wording
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 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.
Previous wording
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.
Current wording
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
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
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.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
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
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
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.