UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q/A

Amendment No. 1

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

For the quarterly period ended September 30, 2021

☐	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

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 ☐

(Do not check if a smaller reporting company)

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 ☒

Number of shares outstanding of the issuer’s Common Stock:

Class		Outstanding at November 12, 2021
Common Stock, $.001 par value		18,652,134

EXPLANATORY NOTE

References throughout this Amendment No. 1 to the Quarterly Report on Form 10-Q/A to “we,” “us,” the “Company” or “our company” are to Intellicheck, Inc. unless otherwise noted or the context otherwise indicates.

We are filing this Amendment No. 1 (“Form 10-Q/A”) to our Form 10-Q for the fiscal quarters ended September 30, 2021 and 2020, which were originally filed (“Original Filing”) on November 12, 2021 and 2020, respectively, to restate our financial statements as of and for the three and nine months ended September 30, 2021 and 2020, and to amend related disclosures, including controls and procedures.

As described in more detail in Note 2 to the financial statements, we determined that we improperly accounted for certain option awards issued to employees commencing in the quarter ended September 30, 2020. Specifically, awards previously accounted for as equity awards should have been recorded as liability awards commencing at the date of exercise and adjusted to fair value at the end of each reporting period. In addition, the Company failed to sell shares surrendered by employees upon exercise and remit the equivalent amount of funds to the taxing authorities. These errors have caused our previously issued financial statements to understate the amount of liabilities on our balance sheets and overstate/understate our net income/loss on our statement of operations as of and for the periods affected. To correct these errors, we determined that we must restate our financial statements as of and for each of the three and nine months ended September 30, 2021 and 2020. We also are amending our unaudited financial statements for each of the quarterly periods ended June 30, 2021, and March 31, 2021, as well as the years ended December 31, 2021 and 2020. The amended quarterly financial information will be included in our amendments on Form 10-Q/A, to be filed by the Company concurrent with the filing of this Form 10-Q/A, and the amended annual financial information included in our amendment on Form 10-K/A.

Internal Control Considerations

In light of the Restatement discussed above, the Company has reassessed the effectiveness of its internal controls over financial reporting as of September 30, 2021 and has concluded that a material weakness in its internal control over financial reporting existed as of September 30, 2021 and 2020. Specifically, the Company did not maintain a complement of accounting personnel with sufficient knowledge, experience, and training in the application of U.S. GAAP as it relates to the accounting and reporting for equity compensation. This material weakness contributed to a failure to maintain effective controls over the accounting and reporting for stock options. The effects of the material weakness are discussed in more detail in Item 4, Controls and Procedures.

Items Amended in this Form 10-Q/A

For the convenience of the reader, this Form 10-Q/A sets forth the Original Filing in its entirety; however, this Form 10-Q/A amends and restates only the following items of the Original Filing with respect to the matters affected by this restatement and the matters discussed above:

Part I:

	●	Item 1 – Financial Statements
	●	Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations
	●	Item 4 – Controls and Procedures

Part II:

●

Item 6 – Exhibits

We are also filing currently dated signatures from our Directors and currently dated Certifications as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, from our Chief Executive Officer and Chief Financial Officer and Chief Operating Officer as exhibits 31.1, 31.2 and 32.

Except as provided above, this Form 10-Q/A does not reflect events occurring after the filing of the Original Filing and does not amend or otherwise update any information in the Original Filing. Accordingly, this Form 10-Q/A should be read in conjunction with our filings with the SEC subsequent to the date on which we filed the Original Filing with the SEC. For more information about the restatement and related disclosures, please see Intellicheck’s Current Report on Form 8-K (Item 4.02) filed May 20, 2022.

INTELLICHECK, INC.

Index

		Page

PART I – FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3

	Balance Sheets – September 30, 2021 (Unaudited) and December 31, 2020	3

	Statements of Operations for the three and nine months ended September 30, 2021 and 2020 (Unaudited)	4

	Statements of Stockholders’ Equity for the three months ended September 30, 2021 and 2020 (Unaudited)	5

	Statements of Stockholders’ Equity for the nine months ended September 30, 2021 and 2020 (Unaudited)	6

	Statements of Cash Flows for the nine months ended September 30, 2021 and 2020 (Unaudited)	7

	NOTES TO FINANCIAL STATEMENTS	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

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	29

Item 3.	Defaults Upon Senior Securities	29

Item 4.	Mine Safety Disclosures	29

Item 5.	Other Information	29

Item 6.	Exhibits	29

Signatures		30

Exhibits

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		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase
104		Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

INTELLICHECK, INC.

BALANCE SHEETS


	September 30,			December 31,
	2021			2020
	(Unaudited) (As Restated)
ASSETS
CURRENT ASSETS:
Cash	$	13,266,031		$	13,121,392
Accounts receivable, net of allowance of $0 and $42,974 at September 30, 2021 and December 31, 2020, respectively		2,777,222			2,119,861
Other current assets		869,583			340,718
Total current assets		16,912,836			15,581,971

PROPERTY AND EQUIPMENT, net		430,341			138,870
GOODWILL		8,101,661			8,101,661
INTANGIBLE ASSETS, net		403,856			482,591
OPERATING LEASE RIGHT-OF-USE ASSET		-			31,131
OTHER ASSETS		8,500			4,250
Total assets	$	25,857,194		$	24,340,474

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:
Accounts payable	$	231,780		$	46,171
Accrued expenses		2,445,534			1,638,798
Operating lease liability, current portion		-			32,620
Equity awards liability		782,834			-
Liability for shares withheld		1,244,458			-
Deferred revenue, current portion		1,372,311			402,782
Total current liabilities		6,076,917			2,120,371

NONCURRENT LIABILITIES:
Deferred revenue, long-term portion		9,737			8,662
Total liabilities		6,086,654			2,129,033

COMMITMENTS AND CONTINGENCIES (Note 10)		-

STOCKHOLDERS’ EQUITY:
Common stock - $.001 par value; 40,000,000 shares authorized; 18,643,281 and 18,410,458 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		18,644			18,410
Additional paid-in capital		145,657,327			141,612,140
Accumulated deficit		(125,905,431	)		(119,419,109	)
Total stockholders’ equity		19,770,540			22,211,441

Total liabilities and stockholders’ equity	$	25,857,194		$	24,340,474

See accompanying notes to financial statements.

INTELLICHECK, INC.

STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020
	(As Restated)			(As Restated)			(As Restated)			(As Restated)
REVENUES	$	4,831,229		$	2,698,975		$	12,490,911		$	7,656,442
COST OF REVENUES		(1,510,590	)		(293,699	)		(3,199,834	)		(1,196,528	)
Gross profit		3,320,639			2,405,276			9,291,077			6,459,914

OPERATING EXPENSES
Selling, general and administrative		2,930,273			4,514,488			11,688,208			7,384,379
Research and development		1,415,666			907,763			4,104,531			2,837,374
Total operating expenses		4,345,939			5,422,251			15,792,739			10,221,753

Loss from operations		(1,025,300	)		(3,016,975	)		(6,501,662	)		(3,761,839	)

OTHER INCOME (EXPENSE)
Gain on forgiveness of unsecured promissory note		-			-			10,000			-
Interest and other income (expense), net		(412	)		6,993			5,340			18,186
Total other income (expense)		(412	)		6,993			15,340			18,186

Net loss	$	(1,025,712	)	$	(3,009,982	)	$	(6,486,322	)	$	(3,743,653	)

PER SHARE INFORMATION
Loss per common share -
Basic	$	(0.06	)	$	(0.16	)	$	(0.35	)	$	(0.22	)
Diluted	$	(0.06	)	$	(0.16	)	$	(0.35	)	$	(0.22	)

Weighted average common shares used in computing per share amounts
Basic		18,642,463			18,336,107			18,580,012			16,960,770
Diluted		18,642,463			18,336,107			18,580,012			16,960,770

See accompanying notes to financial statements.

INTELLICHECK, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)


	Three months ended September 30, 2021 (As Restated)
					Additional						Total
	Common Stock				Paid-in			Accumulated			Stockholders’
	Shares		Amount		Capital			Deficit			Equity

BALANCE, June 30, 2021		18,634,918	$	18,636	$	145,018,746		$	(124,879,719	)	$	20,157,663

Equity compensation		-		-		638,589			-			638,589
Issuance of common stock, net of costs
Issuance of common stock, net of costs, shares
Exercise of stock options, net of cashless exercise of 82,161 shares
Exercise of stock options, net of cashless exercise of 82,161 shares, shares
Exercise of stock options, net of cashless exercise of 58,122 shares
Exercise of stock options, net of cashless exercise of 58,122 shares, shares
Exercise of stock options, net of cashless exercise of 93,570 shares
Exercise of stock options, net of cashless exercise of 93,570 shares,shares
Exercise of warrants
Exercise of warrants, shares
Issuance of shares for restricted stock grants		8,363		8		(8	)		-			-
Shares withheld for withholding taxes
Shares withheld for withholding taxes, shares
Settlement of executive bonuses with issuance of restricted stock units
Settlement of executive bonuses with issuance of restricted stock units, shares
Exercise of liability awards
Net loss		-		-		-			(1,025,712	)		(1,025,712	)
BALANCE, September 30, 2021		18,643,281	$	18,644	$	145,657,327		$	(125,905,431	)	$	19,770,540

	Three months ended September 30, 2020 (As Restated)
							Additional						Total
	Common Stock						Paid-in			Accumulated			Stockholders’
	Shares			Amount			Capital			Deficit			Equity

BALANCE, June 30, 2020		18,028,282		$	18,028			139,715,197		$	(117,668,783	)	$	22,064,442

Equity compensation		-			-			97,157			-			97,157
Exercise of warrants		750			1			1,649			-			1,650
Shares withheld for withholding taxes		(178,832	)		(179	)		(1,462,415	)		-			(1,462,594	)
Exercise of stock options, net of cashless exercise of 82,161 shares		527,214			527			28,823			-			29,350
Issuance of shares for restricted stock grants		7,284			7			(7	)		-			-
Settlement of executive bonuses with issuance of restricted stock units		5,531			6			31,245			-			31,251
Exercise of liability awards		-			-			3,042,394			-			3,042,394
Net loss		-			-

SEC Form 10-Q/A filed by Intellicheck Inc. (Amendment)