Intellicheck Announces Record Second Quarter 2023 Financial Results

SaaS Revenues Grew 19% Year Over Year

Achieves Adjusted EBITDA Positive Results for the Quarter

MELVILLE, N.Y., August 10, 2023--(BUSINESS WIRE)--Intellicheck, Inc. (Nasdaq: IDN), an industry-leading identity company delivering on-demand digital and physical identity validation solutions, today announced its financial results for the second quarter ended June 30, 2023. Total revenue for the second quarter ended June 30, 2023 grew 18% to $4,716,000 compared to $4,008,000 in the same period of 2022. SaaS revenue grew 19% and totaled $4,663,000 compared to $3,928,000 in the same period of 2022.

"This quarter marks 42 consecutive months of solid growth as trailing 12 month SaaS revenue has increased every month. We continue to refine our organization at every level to expand our penetration in key market verticals. This quarter we achieved adjusted EBITDA positive results and we continue to leverage our operating expenses. We also continue to enhance our organization with additional expertise including the promotion of Jeff Ishmael to the position of COO and the hiring of a new Vice President of Engineering, Jonathan Robins. We have evolved the finance and sales teams and our focus has now turned to engineering and product development. We believe the addition of Jonathan to the team will allow us to further distinguish ourselves as an exceptional identity validation company with the state-of-the-art technology solutions that have earned us our position as an industry leader," said Intellicheck CEO Bryan Lewis.

Gross profit as a percentage of revenues improved to 92.5% for the three months ended June 30, 2023 compared to 90.9% in the same period in 2022.

Operating expenses for the three months ended June 30, 2023, which consist of selling, general and administrative expenses and research and development expenses, increased 8% to $5,137,000 for the second quarter of 2023 compared to $4,742,000 for the same period of 2022. Included within operating expenses for the second quarters of 2023 and 2022 were $323,000 and $446,000, respectively, of non-cash equity compensation expense.

Net loss for the three months ended June 30, 2023 improved to ($777,000) or ($0.04) per diluted share compared to Net loss of ($1,098,000) or ($0.06) per diluted share for the same period in 2022.

Adjusted EBITDA (earnings before gains on debt forgiveness, non-restructuring severance expenses, interest and other income, provision for income taxes, depreciation, amortization, stock-based compensation expense and certain non-recurring charges) improved to $36,000 for the second quarter of 2023 as compared to ($583,000) for the same period of 2022. A reconciliation of adjusted EBITDA to net loss is provided in this release.

As of June 30, 2023, the Company had cash and short-term investments in the form of U.S. Treasuries that totaled $9.1 million, and stockholders’ equity totaled $17.3 million.

The unaudited financial results reported today do not consider any adjustments that may be required in connection with the completion of the Company’s quarterly review process and should be considered preliminary until Intellicheck files its Form 10-Q for the three and six months ended June 30, 2023.

Conference Call Information

The Company will hold an earnings conference call on August 10 at 4:30 p.m. ET/1:30 p.m. PT to discuss operating results. To listen to the earnings conference call, please dial 877-407-8037. For callers outside the U.S., please dial 201-689-8037.

A replay of the conference call will be available shortly after completion of the live event. To listen to the replay, please dial 877-660-6853 and use conference identification number 13734993. For callers outside the U.S., please dial 201-612-7415 and use conference identification number 13734993. The replay will be available beginning approximately three hours after the completion of the live event and will remain available until August 17, 2023.

INTELLICHECK, INC. CONDENSED BALANCE SHEETS JUNE 30, 2023 and DECEMBER 31, 2022
	June 30, 2023				December 31, 2022
	(In thousands, except per share amounts)
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	4,185			$	5,196
Short-term investments		4,882				4,880
Accounts receivable, net of allowance of $36 and $20 at June 30, 2023 and December 31, 2022, respectively		2,754				2,637
Other current assets		786				608
Total current assets		12,607				13,321
PROPERTY AND EQUIPMENT, NET		694				749
GOODWILL		8,102				8,102
INTANGIBLE ASSETS, NET		220				273
OTHER ASSETS		9				8
Total assets	$	21,632			$	22,453
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	679			$	358
Accrued expenses		1,980				2,319
Income taxes payable		17				90
Equity awards liability		79				54
Liability for shares withheld		221				221
Deferred revenue, current portion		1,319				906
Total current liabilities		4,295				3,948
OTHER LIABILITIES:
Deferred revenue, long-term portion		—				1
Total liabilities		4,295				3,949
STOCKHOLDERS’ EQUITY:
Preferred stock - $0.01 par value; 30,000 shares authorized; Series A Convertible preferred stock, zero shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		—				—
Common stock - $.001 par value; 40,000,000 shares authorized; 19,251,920 and 18,957,366 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		19				19
Additional paid-in capital		150,159				149,233
Accumulated deficit		(132,841	)			(130,748	)
Total stockholders’ equity		17,337				18,504
Total liabilities and stockholders’ equity	$	21,632			$	22,453

INTELLICHECK, INC. UNAUDITED CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022
	Three months ended June 30,								Six months ended June 30,
	(In thousands except share and per share amounts)
	2023				2022				2023					2022
REVENUES	$	4,716			$	4,008			$	8,970			$	7,403
COST OF REVENUES		(352	)			(364	)			(684	)			(680	)
Gross profit		4,364				3,644				8,286				6,723
OPERATING EXPENSES
Selling, general and administrative		3,861				3,124				7,784				6,068
Research and development		1,276				1,618				2,584				3,221
Total operating expenses		5,137				4,742				10,368				9,289
Loss from operations		(773	)			(1,098	)			(2,082	)			(2,566	)
OTHER INCOME
Interest and other income		—				—				1				—
Total other income		—				—				1				—
Net loss before provision for income taxes		(773	)			(1,098	)			(2,081	)			(2,566	)
Provision for income taxes		4				—				12				—
Net loss	$	(777	)		$	(1,098	)		$	(2,093	)		$	(2,566	)
PER SHARE INFORMATION
Loss per common share -
Basic/Diluted	$	(0.04	)		$	(0.06	)		$	(0.11	)		$	(0.14	)
Weighted average common shares used in computing per share amounts -
Basic/Diluted		19,120,327				18,812,418				19,168,534				18,736,736

INTELLICHECK, INC. UNAUDITED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(In thousands, except number of shares)
	Three months ended June 30, 2023
	Common Stock						Additional Paid-in Capital				Accumulated Deficit				Total Stockholders’ Equity
	Shares			Amount
BALANCE, March 31, 2023	19,215,863			$	19		$	149,875			$	(132,064	)		$	17,830
Stock-based compensation	–				–			338				–				338
Issuance of shares for vested restricted stock grants	60,777				–			–				–				–
Shares forfeited in exchange for withholding taxes	(24,720	)			–			(54	)			–				(54	)
Net loss	–				–			–				(777	)			(777	)
BALANCE, June 30, 2023	19,251,920			$	19		$	150,159			$	(132,841	)		$	17,337

	Three months ended June 30, 2022
	Common Stock							Additional Paid-in Capital			Accumulated Deficit				Total Stockholders’ Equity
	Shares			Amount
BALANCE, March 31, 2022	18,674,980			$	19			$	147,284		$	(128,365	)		$	18,938
Stock-based compensation	–				–				520			–				520
Issuance of shares for vested restricted stock grants	200,600				–				–			–				–
Net loss	–				–				–			(1,098	)			(1,098	)
BALANCE, June 30, 2022	18,875,580			$	19			$	147,804		$	(129,463	)		$	18,360

INTELLICHECK, INC. UNAUDITED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(In thousands, except number of shares)
	Six months ended June 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			$	(130,748	)		$	18,504
Stock-based compensation	—				—			980				—				980
Issuance of common stock for vested restricted stock units and earned performance stock units	319,274				—			—				—				—
Shares forfeited in exchange for withholding taxes	(24,720	)			–			(54	)			—				(54	)
Net loss	—				—			—				(2,093	)			(2,093	)
BALANCE, June 30, 2023	19,251,920			$	19		$	150,159			$	(132,841	)		$	17,337

	Six months ended June 30, 2022
	Common Stock					Additional Paid-in Capital			Accumulated Deficit				Total Stockholders’ Equity
	Shares		Amount
BALANCE, December 31, 2021	18,660,369		$	19		$	146,455		$	(126,897	)		$	19,577
Stock-based compensation	–			–			1,349			–				1,349
Issuance of shares for vested restricted stock grants	215,211			–			–			–				–
Net loss	–			–			–			(2,566	)			(2,566	)
BALANCE, June 30, 2022	18,875,580		$	19		$	147,804		$	(129,463	)		$	18,360

INTELLICHECK, INC. UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
	Six months ended June 30,
	(In thousands)
	2023				2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,093	)		$	(2,566	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		139				139
Stock-based compensation		1,005				1,038
Bad debt expense		16				13
Change in accrued interest and accretion of discount on short-term investments		(2	)			—
Changes in assets and liabilities:
(Increase) in accounts receivable		(133	)			(279	)
(Increase) decrease in other current assets and long-term assets		(178	)			107
(Decrease) in accounts payable and accrued expenses		(22	)			(497	)
Increase in deferred revenue		412				507
Net cash used in operating activities		(856	)			(1,538	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(31	)			(156	)
Net cash used in investing activities		(31	)			(156	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of insurance financing arrangement		49				—
Withholding taxes paid on RSU vesting		(54	)			—
Repayment of insurance financing arrangement		(119	)			—
Net cash used in financing activities		(124	)			—
Net decrease in cash		(1,011	)			(1,694	)
CASH, beginning of period		5,196				13,651
CASH, end of period	$	4,185			$	11,957
Supplemental disclosures of cash flow information:
Cash paid for interest	$	2			$	—
Cash paid for income taxes	$	87			$	—

Adjusted EBITDA

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) and certain addbacks such as non-restructuring severance expenses, 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 non-restructuring severance expenses, 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.

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 June 30,								Six Months Ended June 30,
	2023				2022				2023				2022
	(In thousands)
Net loss	$	(777	)		$	(1,098	)		$	(2,093	)		$	(2,566	)
Reconciling items:
Non-restructuring severance expenses		417				—				417				—
Provision for income taxes		4				—				12				—
Interest and other expense (income)		—				—				(1	)			—
Depreciation and amortization		69				69				139				139
Stock-based compensation including liability classified awards		323				446				1,005				1,038
Adjusted EBITDA	$	36			$	(583	)		$	(521	)		$	(1,389	)

About Intellicheck

Intellicheck (Nasdaq: IDN) is an identity company that delivers on-demand digital identity validation solutions for KYC, fraud, and age verification needs. Intellicheck validates both digital and physical identities for financial services, fintech companies, BNPL providers, e-commerce and retail commerce businesses, law enforcement and government agencies across North America. Intellicheck can be used through a mobile device, a browser, or a retail point-of-scale scanner. For more information on Intellicheck, visit us on the web and follow us on follow us on LinkedIn, Twitter, Facebook, and YouTube.

Safe Harbor Statement

Statements in this news release about Intellicheck’s future expectations, including: the advantages of our products, future demand for Intellicheck’s existing and future products, whether revenue and other financial metrics will improve in future periods, whether Intellicheck will be able to execute its turn-around plan or whether successful execution of the plan will result in increased revenues, whether sales of our products will continue at historic levels or increase, whether brand value and market awareness will grow, whether the Company can leverage existing partnerships or enter into new ones, whether there will be any impact on sales and revenues due to an epidemic, pandemic or other public health issue and all other statements in this release, other than historical facts, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). These statements, which express management’s current views concerning future events, trends, contingencies or results, appear at various places in this release and use words like "anticipate," "assume," "believe," "continue," "estimate," "expect," "forecast," "future," "intend," "plan," "potential," "predict," "project," "sense", "strategy," "target" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will" and "would" are forward-looking statements within the meaning of the PSLRA. This statement is included for the express purpose of availing Intellicheck, Inc. of the protections of the safe harbor provisions of the PSLRA. It is important to note that actual results and ultimate corporate actions could differ materially from those in such forward-looking statements based on such factors as: market acceptance of our products and the presently anticipated growth in the commercial adoption of our products and services; our ability to successfully transition pilot programs into formal commercial scale programs; continued adoption of our SaaS product offerings; changing levels of demand for our current and future products; our ability to reduce or maintain expenses while increasing sales; our ability to successfully expand the sales of our products and services into new areas including health care and auto dealerships; customer results achieved using our products in both the short and long term; success of future research and development activities; the impact of inflation on our business and customer’s businesses and any effect this has on economic activity with our customer’s businesses; our ability to successfully market and sell our products, any delays or difficulties in our supply chain coupled with the typically long sales and implementation cycle for our products; our ability to enforce our intellectual property rights; changes in laws and regulations applicable to the our products; our continued ability to access government-provided data; the risks inherent in doing business with the government including audits and contract cancellations; liability resulting from any security breaches or product failure, together with other risks detailed from time to time in our reports filed with the SEC. We do not assume any obligation to update the forward-looking information.

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Contacts

Investor Relations: Gar Jackson (949) 873-2789
Media and Public Relations: Sharon Schultz (302) 539-3747