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What changed in authID Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of authID Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+215 added−226 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-13)

Top changes in authID Inc.'s 2025 10-K

215 paragraphs added · 226 removed · 166 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur solution returns a very low-latency response, key to enabling high-volume use cases (such as logins and high-value transactions) and providing a frictionless user experience. ● Precisely and accurately identify their consumers and employees, giving the enterprise complete confidence in who is accessing their digital assets . ● Provide a seamless user experience in terms of speed and self-guided flow, so that even users who are not tech-savvy are easily able to complete the identity verification and authentication processes. ● Support a wide variety of devices .
Biggest changeOur solution returns a very low-latency response, key to enabling high-volume use cases (such as logins and high-value transactions) and providing a frictionless user experience. ● Precisely and accurately identify their consumers and employees.
Additionally, authID’s PrivacyKey technology enables customers to perform biometric verification through the use of Public/Private Keys that is performed without storing any biometric data, which ensures individual data privacy. In a digital, online world of increasing fraud and security threats, Proof speeds up onboarding and offers our customers confidence in the identities of consumers, employees or third-party vendors.
Additionally, authID’s PrivacyKey TM technology enables customers to perform biometric verification through the use of Public/Private Keys that is performed without storing any biometric data, which ensures individual data privacy. In a digital, online world of increasing fraud and security threats, Proof speeds up onboarding and offers our customers confidence in the identities of consumers, employees or third-party vendors.
These factors have created a hyper-growth market for the identity verification and authentication industry as well as increased buyer demand for integrated identity platforms that can provide a range of identity solutions to address the full authentication lifecycle of the user journey.
These factors have created a hyper-growth market for the identity verification and authentication industry as well as increased buyer demand for integrated identity platforms that can provide a range of identity solutions to address the full authentication lifecycle to govern the user journey.
We concentrate on enhancing or complementing legacy platforms as a top-of-funnel, high-assurance provider where appropriate. ● Accelerate onboarding and usage within our customer base.
We concentrate on enhancing or complementing legacy platforms as a top-of-funnel, high-assurance provider where appropriate. 3 ● Accelerate onboarding and usage within our customer base.
The Global Biometric Technology Market is estimated to reach a market size of $50 billion by 2024, increasing at a 20% CAGR to reach over $150 billion by 2030 (Grand View Research, Biometric Technology Market Size, Share & Trends Analysis Report, 2023 - 2030).
The Global Biometric Technology Market is estimated to reach a market size of over $50 billion by 2025, increasing at a 20% CAGR to reach over $150 billion by 2030 (Grand View Research, Biometric Technology Market Size, Share & Trends Analysis Report, 2023 - 2030).
Our employees are located primarily in the United States, with additional sub-contractors based in Europe, India and the Caribbean. We intend to continue to invest in our technology to strengthen and expand our platform to stay ahead of our competition and meet the evolving needs of our current and prospective customers.
Our employees are located primarily in the United States, with additional employees and sub-contractors based in Europe, India and Latin America. We intend to continue to invest in our technology to strengthen and expand our platform to stay ahead of our competition and meet the evolving needs of our current and prospective customers.
Our cloud-based service is device agnostic and may be used to verify or authenticate users on any device with a camera, including shared devices, digital kiosks, etc. ● Integrate quickly and easily . We offer pre-integrated OIDC connections as well as integrations with several leading Identity and Access Management solutions. ● Offer broad identity document coverage.
Our cloud-based service is device agnostic and may be used to verify or authenticate users on any device with a camera, including shared devices, digital kiosks, etc. 2 ● Integrate quickly and easily . We offer pre-integrated OpenID Connect (“OIDC”) connections as well as integrations with several leading Identity and Access Management solutions. ● Offer broad identity document coverage.
Account Access and Recovery authID’s Verified biometric identity authentication solution allows users to recover, via a facial biometric, account access that is lost or blocked due to expired credentials, lockouts, lost or stolen devices, or compromised accounts. Because the account owner’s root of trust is established in the cloud, recovery is independent of any device or hardware.
Verified allows users to recover, via a facial biometric, account access that is lost or blocked due to expired credentials, lockouts, lost or stolen devices, or compromised accounts. Because the account owner’s root of trust is established in the cloud, recovery is independent of any device or hardware.
However, we have no commitments with respect to any such acquisitions at this time. Sales and Marketing authID provides its Verified platform based on a subscription and usage-based model, with fees per transaction, enrolled or active users.
However, we have no commitments with respect to any such acquisitions at this time. Sales and Marketing authID provides its software as a service (SaaS) platform based on a subscription and usage-based model, with fees per transaction, enrolled or active users.
To power our efforts, we have built a team of subject matter experts in the identity space, and applied a regimented sales execution strategy, allowing us to win against competitors with comparable products but a sub-optimal approach to the market. Our leadership team significantly expanded our sales force and technical sales support.
To power our efforts, we have built a team of subject matter experts in the identity space, and applied a regimented sales execution strategy, allowing us to win against competitors with comparable products but a sub-optimal approach to the market.
Our Platform Our cloud-based platform was developed with internally developed software as well as acquired and licensed technology and provides the following core services: ● Biometric Identity Verification – Proof TM ● Biometric Identity Authentication - Verified TM ● PrivacyKey TM Privacy Preserving Biometrics ● Account / Access Recovery Biometric Identity Verification - Proof Biometric identity verification establishes the trusted identity of a user based on a variety of ground truth sources, including government-issued identity documents such as national IDs, driver’s licenses and passports or electronic machine-readable travel documents (or eMRTDs).
Our Platform Our cloud-based platform was developed with internally developed software as well as acquired and licensed technology and provides the following core services: ● Biometric Identity Verification – Proof TM ● Biometric Identity Authentication - Verified TM ● PrivacyKey TM Privacy Preserving Biometrics ● Identity Exchange (IDX) Platform ● authID Mandate Agentic AI Security Biometric Identity Verification - Proof Biometric identity verification establishes the trusted identity of a user based on a variety of ground truth sources, including government-issued identity documents such as national IDs, driver’s licenses and passports or electronic machine-readable travel documents (or eMRTDs).
In the 2023 Verizon Data Breach Investigation Report, 83% of 4,000 data breaches studied involved external actors, while 74% of all breaches were attributed to some form of social engineering, stolen credentials, or human error. Verizon also found that Business Email Compromise (BEC) attacks now represent more than 50% of social engineering incidents, having almost doubled in recent years.
In the 2025 Verizon Data Breach Investigation Report, 78% of 3,300 financial data breaches studied involved external actors, while 74% of all breaches were attributed to some form of social engineering, stolen credentials, or human error. Verizon also found that Business Email Compromise (BEC) attacks now represent more than 50% of social engineering incidents, having almost doubled in recent years.
Data protection legislation in various countries in which the Company does 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 resident in those countries.
Data protection legislation in various US States and foreign countries in which the Company does business require it to comply with additional disclosure and consent requirements with regard to the collection, storage and use of personal information of individuals in those States and countries, as well as register its databases with governmental authorities in those countries.
Further it is predicted that Artificial Intelligence (AI) will almost certainly increase the volume and heighten the impact of cyberattacks over the next two years (NCSC Assessment, Jan 1, 2024). 2 Financial services, ecommerce, the sharing economy, and healthcare businesses, among other industry verticals, are confronted by the challenges of identifying their customers, patients and beneficiaries with ease and certainty in the digital world.
Further it is predicted that Artificial Intelligence (AI) will almost certainly increase the volume and heighten the impact of cyberattacks. Financial services, ecommerce, the sharing economy, and healthcare businesses, among other industry verticals, are confronted by the challenges of identifying their customers, patients and beneficiaries with ease and certainty in the digital world.
These regulations could have a significant impact on our business. Human Capital As of December 31, 2024, the Company had a total of 46 employees who are located in the United States, Latvia and Colombia as well as outsourced service providers. There are 31 employees in the United States who provide overall Company strategic, business and technological leadership.
These regulations could have a significant impact on our business. Human Capital As of December 31, 2025, the Company had a total of 46 employees who are located in the United States, Latvia and Colombia as well as outsourced service providers.
We face competition from a broad range of providers with solutions across the identity management lifecycle, including: ● Vendors providing identity verification or proofing through both biometric and non-biometric solutions (such as data-based verification using identity proxies, such as DMV records and addresses), both on-premise and cloud-based. ● Vendors of passwordless identity authentication using device-based and cloud-based biometrics. ● Larger companies providing identity and access management platforms, adding identity authentication services to their offering at low/no cost. ● New entrants seeking to develop and market competing technologies.
We face competition from a broad range of providers with solutions across the identity management lifecycle, including: ● Vendors providing identity verification or proofing through both biometric and non-biometric solutions (such as data-based verification using identity proxies, such as DMV records and addresses), both on-premise and cloud-based. ● Vendors of passwordless identity authentication using device-based and cloud-based biometrics. ● Larger companies providing identity and access management platforms, adding identity authentication services to their offering at low/no cost. ● New entrants seeking to develop and market competing technologies. 4 It is also possible that, as the digital identity market continues to grow and evolve, larger companies with significant resources may increase their presence in the market and develop competing solutions through internal efforts or partnerships with existing players.
Available Information Our Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendment to these reports are filed with the SEC.
The Company is the sole shareholder of all its subsidiaries. 5 Available Information Our Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendment to these reports are filed with the SEC.
PrivacyKey verification and authentication is seamlessly delivered thru either a web or mobile applications with a response time of less than 700ms.
PrivacyKey verification and authentication is seamlessly delivered thru either a web or mobile applications with a response time of less than 700ms. Corporate Information The Company was incorporated in the State of Delaware on September 21, 2011.
The Company had one subsidiary in Colombia: MultiPay S.A.S. which was dissolved as of August 2, 2024. The Company has one subsidiary in the United Kingdom: Ipsidy Enterprises Limited. The Company is the sole shareholder of all its subsidiaries.
Subsidiaries Currently, the Company has four U.S. subsidiaries: Innovation in Motion Inc., Fin Holdings, Inc., ID Solutions Inc. and authID Gaming Inc. The Company had one subsidiary in Colombia: MultiPay S.A.S. which was dissolved as of August 2, 2024. The Company has one subsidiary in the United Kingdom: authID Enterprises Limited (formerly Ipsidy Enterprises Limited).
In this way, account recovery is instant, portable, and does not require the presence of or access to a previously provisioned device in order to secure access from a different device. 1 Key Customer Benefits Our solution allows our enterprise customers to: ● Verify and Authenticate users.
In this way, account recovery is instant, portable, and does not require the presence of or access to a previously provisioned device in order to secure access from a different device. 1 PrivacyKey Privacy Preserving Biometrics authID’s PrivacyKey solution provides biometric authentication without the requirement to store any biometric or derivative of biometric data.
We also use a lead generation service and digital marketing in order to carefully target potential customers and provide qualified leads for our sales representatives to develop.
We also use a lead generation service and digital marketing in order to carefully target potential customers and provide qualified leads for our sales representatives to develop. We also work with partners such as cybersecurity and financial technology providers who provide our services to their customers through OEM or reseller arrangements and allow us to broaden our customer reach.
Item 1. Business Overview authID Inc. (together with its subsidiaries, the “Company”, “authID”, “we” or “our”) ensures enterprises “Know Who’s Behind the Device” TM for every customer or employee login and transaction.
Item 1. Business Overview authID Inc. (the “Company”) ensures enterprises “Know Who’s Behind the Device” TM for every customer or employee login and transaction, through its easy-to-integrate, patented, biometric identity platform. authID powers biometric identity proofing, biometric authentication, and account recovery with a fast, accurate, user-friendly experience.
Passwords and device authentication alone no longer provide the security needed to fight today’s rampant cyber-attacks and account takeover schemes.
Passwords and device authentication alone no longer provide the security needed to fight today’s rampant cyber-attacks and account takeover schemes. According to Statista, cybercrime costs in the United States alone are projected to increase to approximately $900 billion in 2026 and are projected to grow to over $3.4 trillion in 2030 (Statista: Annual Cost of Cybercrime in the U.S. 2017-2030).
Employees in the U.S. and Latvia receive health benefits on a cost-sharing basis and employees in Colombia are provided the respective Government required benefits. 4 Subsidiaries Currently, the Company has four U.S. subsidiaries: Innovation in Motion Inc., Fin Holdings, Inc., ID Solutions Inc. and authID Gaming Inc.
There are 30 employees in the United States who provide overall Company strategic, business and technological leadership, as well as engineering and customer support. Employees in the U.S. and Latvia receive health benefits on a cost-sharing basis and employees in Colombia are provided the respective Government required benefits.
Establishing a biometric root of trust for each user that is bound to their accounts, or provisioned devices, authID stops fraud at onboarding, eliminates password risks and costs, and provides the faster, more accurate and privacy preserving user identity experience demanded by operators of today’s digital ecosystems.
With our PrivacyKey™ solution, authID provides highly accurate biometric authentication while storing no biometric data. authID’s goal is to stop fraud at onboarding, blocks deepfakes, prevents account takeover, and eliminates password risks and costs, through the faster, frictionless, and most accurate user identity experience demanded by today’s digital ecosystem.
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Through its easy-to-integrate, patented, biometric identity platform, authID quickly and accurately verifies a user’s identity, eliminating any assumption of ‘who’ is behind a device and preventing cybercriminals from taking over accounts. authID combines digital onboarding, biometric passwordless authentication and account recovery, with a fast, accurate, user-friendly experience – delivering identity verification in 700ms.
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Identity Exchange (IDX TM ) Platform authID’s Identity Exchange (IDX) is a next-generation platform purpose-built to allow authorized personnel to create or claim a central credential that can be leveraged across multiple subsidiaries of a large enterprise, simplifying and securing the management of workforce identities across distributed workforces that include employees, contractors, vendors, and other third parties.
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PrivacyKey Privacy Preserving Biometrics authID’s PrivacyKey solution provides biometric authentication without the requirement to store any biometric or derivative of biometric data.
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IDX modernizes identity management with centrally-managed, biometric-bound, passwordless, interoperable and reusable credentials that stop phishing attacks, ensuring only verified users can access sensitive systems and data.
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Discontinued Operations On May 4, 2022, the Board of Directors of authID (the “Board” or the “Board of Directors”) approved a plan to exit from certain non-core activities comprising the MultiPay correspondent bank payments services in Colombia and the Cards Plus cards manufacturing and printing business in South Africa (“Cards Plus business”).
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IDX is the first enterprise platform built on the Accountable Digital Identity Association (ADI Association) specification, ensuring it is aligned with global interoperability and data sovereignty standards as well as privacy regulations. authID Mandate - Agentic AI Security Framework authID Mandate is a framework for biometrically binding human sponsors to the AI agents they launched, ensuring that agentic activity is governed by the user’s own scope, while also providing an immutable audit trail of that sponsorship.
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On August 29, 2022 the Company executed and completed the sale of the Cards Plus business. On June 30, 2023, the Company completed the sale of its legacy payments software by MultiPay, which was dissolved in August 2024.
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This provides a level of governance far beyond machine IDs, or vulnerable tokens that are otherwise the basis for most agentic deployment of auditability. Key Customer Benefits Our solutions allow our enterprise customers to: ● Verify and Authenticate users.
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MultiPay S.A.S., and IDGS S.A.S. operations, together with those of Cards Plus Pty Ltd., are presented as discontinued operations in the Consolidated Statements of Operations during the year ended December 31, 2023, as they met the criteria for discontinued operations under applicable accounting guidance. Corporate Information The Company was incorporated in the State of Delaware on September 21, 2011.
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As a result, the enterprise gains complete confidence in who is accessing its digital assets. ● Provide seamless user experience in terms of speed and self-guided flow. This allows users of all technical skill levels to easily complete identity verification and authentication. ● Support a wide variety of devices .
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According to Statista, cybercrime costs in the United States alone increased to approximately $452 million in 2024 and are projected to increase to approximately $640 million in 2025 and continue rising to over $1.8 billion in 2028 (Statista: Annual Cost of Cybercrime in the U.S. 2017-2028).
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Competition The market for our service offerings is highly competitive and rapidly evolving.
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We also work with partners such as banking infrastructure or cybersecurity providers who provide our services to their customers through reseller arrangements and allow us to broaden our customer reach. 3 Competition The market for our service offerings is highly competitive and rapidly evolving.
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It is also possible that, as the digital identity market continues to grow and evolve, larger companies with significant resources may increase their presence in the market and develop competing solutions through internal efforts or partnerships with existing players.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe following factors could result in harm to our business, reputation, revenue, financial results, and prospects, among other impacts: ● We have a history of losses and we may not be able to achieve profitability going forward. ● We have yet to achieve positive cash flow and, given our projected funding needs, our ability to generate positive cash flow is uncertain. ● Our limited operating history makes it difficult for us to evaluate our future business prospects and make decisions based on those estimates of our future performance. ● 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. ● We depend upon key personnel and need additional personnel. ● Acquisitions present many risks that could have a material adverse effect on our business and results of operations. ● The market for our products is characterized by changing technology, requirements, standards and products, is impacted by the growing use of AI technologies and we may be adversely affected if we do not respond promptly and effectively to these changes. ● Issues relating to the development and use of AI, including generative AI, in our offerings may result in reputational harm, liability and adverse financial results. ● If our technology and solutions are not adopted and used by customer organizations, we will not be able to grow our business and our operations will be negatively affected. ● We have in the past entered into and may seek in the future to enter into contracts with governments, as well as state and local governmental agencies and municipalities, which subjects us to certain risks associated with such types of contracts. ● We may have to seek business through a competitive bidding process. ● We rely in part on third-party software to develop and provide our solutions. 5 ● 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. ● Our efforts to expand our international operations are subject to a number of risks, any of which could adversely reduce our future international sales and increase our losses . ● We are exposed to risks in operating in foreign markets, which may make operating in those markets difficult and thereby force us to curtail our business operations. ● Cyber-attacks, breaches of network or information technology security, presentation attacks, natural disasters, pandemics, or terrorist attacks could have an adverse effect on our business. ● The wars in Ukraine and the Middle East may impact the business of the Company, the markets in which it operates and the financial markets, in which the Company needs to raise capital. ● Interruptions, delays in service or defects in our systems could impair the delivery of our services and harm our business. ● Third parties could obtain access to our proprietary information or could independently develop similar technologies. ● Third parties may assert that we are infringing their intellectual property rights; IP litigation could require us to incur substantial costs even when our efforts are successful. ● Our officers, directors and holders of 5% of outstanding shares together beneficially own a significant portion of our Common Stock and, as a result, can exercise control over stockholder and corporate actions. ● We face competition.
Biggest changeThe following factors could result in harm to our business, reputation, revenue, financial results, and prospects, among other impacts: ● We have a history of losses and we may not be able to achieve profitability going forward. ● We have yet to achieve positive cash flow and, given our projected funding needs, our ability to generate positive cash flow is uncertain. ● Our limited operating history makes it difficult for us to evaluate our future business prospects and make decisions based on those estimates of our future performance. ● 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. ● If our technology and solutions are not adopted and used by customer organizations, we will not be able to grow our business and our operations will be negatively affected. ● We depend upon key personnel and need additional personnel. ● Government regulation, specifically that relating to data privacy protection could negatively impact the business. ● The market for our products is characterized by changing technology, requirements, standards and products, is impacted by the growing use of AI technologies and we may be adversely affected if we do not respond promptly and effectively to these changes. ● Issues relating to the development and use of AI, including generative AI, in our offerings may result in reputational harm, liability and adverse financial results. ● We have in the past entered into and may seek in the future to enter into contracts with governments, as well as state and local governmental agencies and municipalities, which subjects us to certain risks associated with such types of contracts. ● We may have to seek business through a competitive bidding process. ● We rely in part on third-party software to develop and provide our solutions. ● 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. ● Our efforts to expand our international operations are subject to a number of risks, any of which could adversely reduce our future international sales and increase our losses . ● We are exposed to risks in operating in foreign markets, which may make operating in those markets difficult and thereby force us to curtail our business operations. 6 ● Cyber-attacks, breaches of network or information technology security, presentation attacks, natural disasters, pandemics, or terrorist attacks could have an adverse effect on our business. ● Acquisitions present many risks that could have a material adverse effect on our business and results of operations. ● The wars in Ukraine and the Middle East may impact the business of the Company, the markets in which it operates and the financial markets, in which the Company needs to raise capital. ● Interruptions, delays in service or defects in our systems could impair the delivery of our services and harm our business. ● Third parties could obtain access to our proprietary information or could independently develop similar technologies. ● Third parties may assert that we are infringing their intellectual property rights; IP litigation could require us to incur substantial costs even when our efforts are successful. ● Our officers, directors and holders of 5% of outstanding shares together beneficially own a significant portion of our Common Stock and, as a result, can exercise control over stockholder and corporate actions. ● We face competition.
Our international operations could be subject to a number of risks, any of which could adversely affect our future international sales and operating results, including: ● local Data Privacy and other regulations; ● trade restrictions; ● import duties and tariffs; ● export regulations or restrictions including sanctions; ● uncertain political, regulatory and economic developments; ● labor and social unrest; ● inability to protect our intellectual property rights; ● highly aggressive competitors; ● currency issues, including currency exchange risk; ● difficulties in staffing, managing and supporting foreign operations; ● longer payment cycles; ● increased collection risks; ● impact of the Coronavirus or other pandemics; and ● impact of wars and terrorism Negative developments in any of these areas in one or more countries could result in a reduction in demand for our products, the cancellation or delay of orders already placed, difficulty in collecting receivables, and a higher cost of doing business, any of which could adversely affect our business, results of operations or financial condition.
Our international operations could be subject to a number of risks, any of which could adversely affect our future international sales and operating results, including: ● local Data Privacy and other regulations; ● trade restrictions; ● import duties and tariffs; ● export regulations or restrictions including sanctions; ● uncertain political, regulatory and economic developments; ● labor and social unrest; ● inability to protect our intellectual property rights; ● highly aggressive competitors; ● currency issues, including currency exchange risk; 13 ● difficulties in staffing, managing and supporting foreign operations; ● longer payment cycles; ● increased collection risks; ● impact of the Coronavirus or other pandemics; and ● impact of wars and terrorism Negative developments in any of these areas in one or more countries could result in a reduction in demand for our products, the cancellation or delay of orders already placed, difficulty in collecting receivables, and a higher cost of doing business, any of which could adversely affect our business, results of operations or financial condition.
Our failure to meet the continued listing requirements of the Nasdaq Capital Market could result in a de-listing of our Common Stock. ● Sales of a substantial number of shares of our Common Stock in the public market by our existing stockholders could cause our share price to fall. ● We may be subject to securities litigation, which is expensive and could divert management attention. ● If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they adversely change their recommendations or publish negative reports regarding our business or our Common Stock, our stock price and trading volume could decline. ● The market price of our common stock has been volatile and your investment in our stock could suffer a decline in value. ● We do not anticipate paying any cash dividends in the foreseeable future. 6 We have a history of losses and we may not be able to achieve profitability going forward.
Our failure to meet the continued listing requirements of the Nasdaq Capital Market could result in a de-listing of our Common Stock. ● Sales of a substantial number of shares of our Common Stock in the public market by our existing stockholders could cause our share price to fall. ● We may be subject to securities litigation, which is expensive and could divert management attention. ● If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they adversely change their recommendations or publish negative reports regarding our business or our Common Stock, our stock price and trading volume could decline. ● The market price of our common stock has been volatile and your investment in our stock could suffer a decline in value. ● We do not anticipate paying any cash dividends in the foreseeable future. 7 We have a history of losses and we may not be able to achieve profitability going forward.
In addition, any patents may be contested, circumvented, found unenforceable or invalid and we may not be able to prevent third parties from infringing on them. Despite the precautions we take, third parties may copy or obtain and use our technologies, ideas, know-how and other proprietary information without authorization or may independently develop technologies similar or superior to our technologies.
In addition, any patents may be contested, circumvented, found unenforceable or invalid and we may not be able to prevent third parties from infringing on them. 16 Despite the precautions we take, third parties may copy or obtain and use our technologies, ideas, know-how and other proprietary information without authorization or may independently develop technologies similar or superior to our technologies.
Our means of protecting our intellectual property rights in the United States or any other country in which we operate may not be adequate to fully protect our intellectual property rights. 14 Third parties may assert that we are infringing their intellectual property rights; IP litigation could require us to incur substantial costs even when our efforts are successful.
Our means of protecting our intellectual property rights in the United States or any other country in which we operate may not be adequate to fully protect our intellectual property rights. Third parties may assert that we are infringing their intellectual property rights; IP litigation could require us to incur substantial costs even when our efforts are successful.
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. Some states in the United States have adopted legislation governing the collection, use of, and storage of biometric information and other states are considering such legislation.
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. 9 Some states in the United States have adopted legislation governing the collection, use of, and storage of biometric information and other states are considering such legislation.
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. We face competition.
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. 17 We face competition.
Maintaining compliance with these rules and regulations, particularly as we have ceased to be an emerging growth company, will increase our legal, accounting and financial compliance costs, will make some activities more difficult, time-consuming and costly and may also place increased strain on our personnel, systems and resources. 16 The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and at the time we cease to be a smaller reporting company, we will be required to provide attestation that we maintain effective disclosure controls and procedures by our registered public accounting firm.
Maintaining compliance with these rules and regulations, particularly as we have ceased to be an emerging growth company, will increase our legal, accounting and financial compliance costs, will make some activities more difficult, time-consuming and costly and may also place increased strain on our personnel, systems and resources. 18 The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and at the time we cease to be a smaller reporting company, we will be required to provide attestation that we maintain effective disclosure controls and procedures by our registered public accounting firm.
In addition, our amended and restated bylaws provide that any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of and consented to the Delaware Forum Provision. 17 Section 27 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
In addition, our amended and restated bylaws provide that any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of and consented to the Delaware Forum Provision. 19 Section 27 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
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.
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.
If any analysts who may cover us were to cease coverage of the Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. 18 The market price of our common stock has been volatile and your investment in our stock could suffer a decline in value.
If any analysts who may cover us were to cease coverage of the Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. 20 The market price of our common stock has been volatile and your investment in our stock could suffer a decline in value.
Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on our future results of operations and cash flow, our capital requirements and surplus, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. 19 Item 1B. Unresolved Staff Comments None.
Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on our future results of operations and cash flow, our capital requirements and surplus, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. 21 Item 1B. Unresolved Staff Comments None.
In addition to the integration risks, we could face numerous other risks, including, but not limited to, the following: ● diversion of our management’s attention from normal daily operations of our business; ● our inability to maintain the key business relationships and the reputations of the businesses we acquire; ● dilution to stockholders resulting from any acquisitions, which are paid for with Company securities; ● increased costs related to acquired operations and continuing support and development of acquired products; ● our responsibility for the liabilities of the businesses we acquire; ● changes in how we are required to account for our acquisitions under accounting principles generally accepted in U.S.; ● our inability to apply and maintain our internal standards, controls, procedures and policies to acquired businesses; and ● potential loss of key employees of the companies we acquire.
In addition to the integration risks, we could face numerous other risks, including, but not limited to, the following: ● diversion of our management’s attention from normal daily operations of our business; ● our inability to maintain the key business relationships and the reputations of the businesses we acquire; ● dilution to stockholders resulting from any acquisitions, which are paid for with Company securities, or funded by equity capital raises; ● increased costs related to acquired operations and continuing support and development of acquired products; ● our responsibility for the liabilities of the businesses we acquire; ● changes in how we are required to account for our acquisitions under accounting principles generally accepted in U.S.; ● our inability to apply and maintain our internal standards, controls, procedures and policies to acquired businesses; and ● potential loss of key employees of the companies we acquire.
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 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.
Any failure to comply with the terms of any Governmental Contracts could result in substantial civil and criminal fines and penalties, as well as suspension from future contracts for a significant period of time, any of which could adversely affect our business by requiring us to pay significant fines and penalties or prevent us from earning revenues from Governmental Contracts during the suspension period.
Failure to comply with the terms of any Governmental Contract could result in substantial civil and criminal fines and penalties, as well as suspension from future contracts for a significant period of time, any of which could adversely affect our business by requiring us to pay fines and penalties and prohibiting us from earning revenues from Governmental Contracts during the suspension period.
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.
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.
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.
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.
We cannot accurately predict the future growth rate, if any, or the ultimate size of these markets.
We cannot accurately predict the future growth rate, if any, or the ultimate size of these markets, or our penetration of these markets.
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.
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.
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.
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.
Some of our competitors have greater financial or other resources, longer operating histories and greater name recognition than we do and one or more of these competitors could use their greater resources and/or name recognition to gain market share at our expense or could make it very difficult for us to establish market share. ● Government regulation, specifically that relating to data privacy protection could negatively impact the business. ● Our business is subject to changing regulations regarding corporate governance, disclosure controls, internal control over financial reporting and other compliance areas that will increase both our costs and the risk of noncompliance.
Some of our competitors have greater financial or other resources, longer operating histories and greater name recognition than we do and one or more of these competitors could use their greater resources and/or name recognition to gain market share at our expense or could make it very difficult for us to establish market share. ● Our business is subject to changing regulations regarding corporate governance, disclosure controls, internal control over financial reporting and other compliance areas that will increase both our costs and the risk of noncompliance.
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.
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.
We have yet to achieve positive cash flow and, given our projected funding needs, our ability to generate positive cash flow is uncertain. 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 have yet to achieve positive cash flow and, given our projected funding needs, our ability to generate positive cash flow is uncertain. 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.
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.
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.
Additionally, we are subject to the U.S. Foreign Corrupt Practices Act, or the FCPA, and other laws in the United States and elsewhere that prohibit improper payments or offers of payments to United States’, or foreign governments and their officials and political parties for the purpose of obtaining or retaining business.
Foreign Corrupt Practices Act, or the FCPA, and other laws in the United States and elsewhere that prohibit improper payments or offers of payments to United States’, or foreign governments and their officials and political parties for the purpose of obtaining or retaining business.
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.
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.
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 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.
The uncertainty impacting and potential interruption in energy and other supply chains resulting from military hostilities in Europe and the Middle East and the response of the United States and other countries to it by means of trade and economic sanctions, or other actions, may give rise to increases in costs of goods and services generally and may impact the market for our products as prospective customers reconsider additional capital expenditure, or other investment plans until the situation becomes clearer.
The Company has taken steps to diversify its sub-contractor base, which may in the short term give rise to additional costs and delays in delivering software and product upgrades. 15 The uncertainty impacting and potential interruption in energy and other supply chains resulting from military hostilities in Europe and the Middle East and the response of the United States and other countries to it by means of trade and economic sanctions, or other actions, may give rise to increases in costs of goods and services generally and may impact the market for our products as prospective customers reconsider additional capital expenditure, or other investment plans until the situation becomes clearer.
We face competition from a broad range of providers with solutions across the identity management lifecycle, including: ● Vendors providing identity verification or proofing through both biometric and non-biometric solutions (such as data-based verification using identity proxies, such as DMV records and addresses), both on-premise and cloud-based. ● Vendors of passwordless identity authentication using device-based and cloud-based biometrics. ● Larger companies providing identity and access management platforms, adding identity authentication services to their offering at low/no cost. ● New entrants seeking to develop and market competing technologies. 15 It is also possible that, as the digital identity market continues to grow and evolve, larger companies with significant resources may increase their presence in the market and develop competing solutions through internal efforts or partnerships with existing players.
We face competition from a broad range of providers with solutions across the identity management lifecycle, including: ● Vendors providing identity verification or proofing through both biometric and non-biometric solutions (such as data-based verification using identity proxies, such as DMV records and addresses), both on-premise and cloud-based. ● Vendors of passwordless identity authentication using device-based and cloud-based biometrics. ● Larger companies providing identity and access management platforms, adding identity authentication services to their offering at low/no cost. ● New entrants seeking to develop and market competing technologies.
Cyberattacks or other breaches of network or information technology (IT) security, natural disasters, pandemics such as Covid-19, terrorist acts or acts of war may cause equipment failures or disrupt our systems and operations.
Cyber-attacks, breaches of network or information technology security, presentation attacks, natural disasters, pandemics, or terrorist attacks could have an adverse effect on our business. Cyberattacks or other breaches of network or information technology (IT) security, natural disasters, pandemics such as Covid-19, terrorist acts or acts of war may cause equipment failures or disrupt our systems and operations.
Each of these competitors has the potential to capture market share in our target markets, which could have an adverse effect on our position in our industry and on our business and operating results. Government regulation, specifically that relating to data privacy protection could negatively impact the business.
Each of these competitors has the potential to capture market share in our target markets, which could have an adverse effect on our position in our industry and on our business and operating results.
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.
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.
There can be no assurance that we will successfully identify new product opportunities and develop and bring new products to market in a timely manner, or that the products and technologies developed by others will not render our products or technologies obsolete or noncompetitive.
If we are unable to respond promptly and effectively to new cybersecurity threats and attacks, changing technologies and market requirements, we will be unable to compete effectively in the future. 10 There can be no assurance that we will successfully identify new product opportunities and develop and bring new products to market in a timely manner, or that the products and technologies developed by others will not render our products or technologies obsolete or noncompetitive.
On the other hand, the threat of increased cyber-attacks from multiple threat actors, including state-sponsored organizations may prompt enterprises to adopt additional security measures such as those offered by the Company. 13 For so long as the hostilities continue and perhaps even thereafter as the situation in Europe and the Middle East unfolds, we may see increased volatility in financial markets and a flight to safety by investors, which may impact our stock price and make it more difficult for the Company to raise additional capital at the time when it needs to do so, or for financing to be available upon acceptable terms.
For so long as the hostilities continue and perhaps even thereafter as the situation in Europe and the Middle East unfolds, we may see increased volatility in financial markets and a flight to safety by investors, which may impact our stock price and make it more difficult for the Company to raise additional capital at the time when it needs to do so, or for financing to be available upon acceptable terms.
Most of our revenues historically to date are attributable to sales and business operations in jurisdictions other than the United States. Although we are now focusing our efforts in generating more United States based revenues, we continue to pursue international sales, in particular in Asia and Europe.
Although we are now focusing our efforts in generating more United States based revenues, we continue to pursue international sales, in particular in Asia and Europe.
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 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.
Any loss of the right to use any such software or other intellectual property required for the development and maintenance of our solutions, or any defects or other issues with such software could result in problems or delays in the provision of our solutions until equivalent technology is either developed by us, or, if available from others, is identified, obtained, and integrated, which could harm our business.
Any loss of the right to use any such software or other intellectual property required for the development and maintenance of our solutions, or any defects or other issues with such software could result in problems or delays in the provision of our solutions until equivalent technology is either developed by us, or, if available from others, is identified, obtained, and integrated, which could harm our business. 12 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.
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.
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.
We do not have or require any approval from government authorities or agencies in order to operate our regular business and operations.
Government regulation, specifically that relating to data privacy protection could negatively impact the business. We do not have or require any approval from government authorities or agencies in order to operate our regular business and operations.
If we make poor budgetary decisions as a result of unreliable historical data, we could be less profitable or incur additional losses, which may result in a decline in our stock price. 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.
If we make poor budgetary decisions as a result of unreliable historical data, we could be less profitable or incur additional losses, which may result in a decline in our stock price.
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.
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. We depend upon key personnel and need additional personnel. On March 23, 2023, Rhoniel A.
Failure to comply with the terms of any Governmental Contract could result in substantial civil and criminal fines and penalties, as well as suspension from future contracts for a significant period of time, any of which could adversely affect our business by requiring us to pay fines and penalties and prohibiting us from earning revenues from Governmental Contracts during the suspension period. 10 Furthermore, governmental programs can experience delays or cancellation of funding and suspension of appropriations has occurred, for example the partial United States government shutdown in 2018/19 and current congressional uncertainty over the debt ceiling which could lead to a further shutdown, which can be unpredictable; this may make it difficult to forecast our revenues on a quarter-by-quarter basis.
Furthermore, governmental programs can experience delays or cancellation of funding and suspension of appropriations has occurred, for example the partial United States government shutdown in October - November 2025 and current congressional uncertainty over the debt ceiling which could lead to a further shutdown, which can be unpredictable; this may make it difficult to forecast our revenues on a quarter-by-quarter basis.
The occurrence of any of these risks could have a material adverse effect on our business, results of operations, financial condition or cash flows, particularly in the case of a larger acquisition, or concurrent acquisitions. 8 The market for our products is characterized by changing technology, requirements, standards and products, is impacted by the growing use of AI technologies and we may be adversely affected if we do not respond promptly and effectively to these changes.
The market for our products is characterized by changing technology, requirements, standards and products, is impacted by the growing use of AI technologies and we may be adversely affected if we do not respond promptly and effectively to these changes.
Developing, testing and deploying AI systems and countermeasures to AI threats outlined above, may also increase the cost of our offerings, including due to the nature of the computing costs. 9 If our technology and solutions are not adopted and used by customer organizations, we will not be able to grow our business and our operations will be negatively affected.
Developing, testing and deploying AI systems and countermeasures to AI threats outlined above, may also increase the cost of our offerings, including due to the nature of the computing costs.
In addition, we might be required to suspend or terminate existing contracts in order to comply with such sanctions, legislation or orders, which would adversely impact our future revenues and cash flows. 12 Cyber-attacks, breaches of network or information technology security, presentation attacks, natural disasters, pandemics, or terrorist attacks could have an adverse effect on our business.
We could be exposed to fines and penalties in the event of breach any applicable sanctions legislation or orders. In addition, we might be required to suspend or terminate existing contracts in order to comply with such sanctions, legislation or orders, which would adversely impact our future revenues and cash flows.
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. 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 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.
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. 11 Our efforts to expand our international operations are subject to a number of risks, any of which could adversely reduce our future international sales and increase our losses .
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.
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.
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.
These efforts will also involve substantial accounting-related costs. We may experience difficulty in meeting these reporting requirements in a timely manner. As disclosed in our previous filings, we had a material weakness in our control over financial reporting starting with the quarter ended June 30, 2023.
These efforts will also involve substantial accounting-related costs. We may experience difficulty in meeting these reporting requirements in a timely manner.
This could cause us to lose customers, resellers, alliance partners or other business partners, thereby causing our revenues to decline. If we or our customers were to experience a breach of our internal systems, our business could be severely harmed by adversely affecting the market’s perception of our products and services.
If we or our customers were to experience a breach of our internal systems, our business could be severely harmed by adversely affecting the market’s perception of our products and services. 14 Most recently, we have considered the impact of pandemics (e.g. COVID-19) on our overall operations.
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.
There is no assurance that our existing or new products or solutions will achieve and sustain market acceptance.
Removed
Further, there can be no guarantee that we will not lose business to our existing or potential new competitors. 7 We depend upon key personnel and need additional personnel. On March 23, 2023, Rhon Daguro was appointed as our Chief Executive Officer. Our success depends on the continued services of Mr.
Added
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.
Removed
If we are unable to respond promptly and effectively to new cybersecurity threats and attacks, changing technologies and market requirements, we will be unable to compete effectively in the future.
Added
Further, there can be no guarantee that we will not lose business to our existing or potential new competitors. 8 If our technology and solutions are not adopted and used by customer organizations, we will not be able to grow our business and our operations will be negatively affected.
Removed
As a result, we believe that quarter-to-quarter comparisons of our sales are not a good indication of our future performance.
Added
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.
Removed
We could be exposed to fines and penalties in the event of breach any applicable sanctions legislation or orders.
Added
Any failure to comply with the terms of any Governmental Contracts could result in substantial civil and criminal fines and penalties, as well as suspension from future contracts for a significant period of time, any of which could adversely affect our business by requiring us to pay significant fines and penalties or prevent us from earning revenues from Governmental Contracts during the suspension period. 11 Additionally, we are subject to the U.S.
Removed
Most recently, we have considered the impact of pandemics (e.g. COVID-19) on our overall operations.
Added
Our efforts to expand our international operations are subject to a number of risks, any of which could adversely reduce our future international sales and increase our losses . Most of our revenues historically to date are attributable to sales and business operations in jurisdictions other than the United States.
Removed
The Company has taken steps to diversify its sub-contractor base, which may in the short term give rise to additional costs and delays in delivering software and product upgrades.
Added
This could cause us to lose customers, resellers, alliance partners or other business partners, thereby causing our revenues to decline.
Removed
Management has taken action to remediate the various elements of this material weakness, with immediate effect in relation to the financial statements for the year ending December 31, 2023.
Added
The occurrence of any of these risks could have a material adverse effect on our business, results of operations, financial condition or cash flows, particularly in the case of a larger acquisition, or concurrent acquisitions.
Removed
We remediated this material weakness and put in place a process to undertake an ongoing review of the Company’s activities during each quarter to identify the potential complex accounting matters and if necessary to engage a professional CPA advisory firm to review the proposed accounting treatment on these complex accounting matters that may arise in the future.
Added
On the other hand, the threat of increased cyber-attacks from multiple threat actors, including state-sponsored organizations may prompt enterprises to adopt additional security measures such as those offered by the Company.
Added
It is also possible that, as the digital identity market continues to grow and evolve, larger companies with significant resources may increase their presence in the market and develop competing solutions through internal efforts or partnerships with existing players.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk Assessment At least annually, we conduct a cybersecurity risk assessment that takes into account information from internal stakeholders, known information security vulnerabilities, and information from external sources (e.g., reported security incidents that have impacted other companies, industry trends, and evaluations by third parties and consultants).
Biggest changeWe maintain controls and procedures that are designed to ensure prompt escalation of certain cybersecurity incidents so that decisions regarding public disclosure and reporting of such incidents can be made by management and the Board in a timely manner. 22 Risk Assessment At least annually, we conduct a cybersecurity risk assessment that takes into account information from internal stakeholders, known information security vulnerabilities, and information from external sources (e.g., reported security incidents that have impacted other companies, industry trends, and evaluations by third parties and consultants).
Risk assessment is integral to all engineering, business and operational decisions and in addition to the annual reviews, is an ongoing effort, as circumstances and facts arise. 20 Self Audit At least annually we conduct a self-audit of our information security management systems (“ISMS”), in order to identify if there is any non-conformance with our ISMS policies and procedures.
Risk assessment is integral to all engineering, business and operational decisions and in addition to the annual reviews, is an ongoing effort, as circumstances and facts arise. Self Audit At least annually we conduct a self-audit of our information security management systems (“ISMS”), in order to identify if there is any non-conformance with our ISMS policies and procedures.
Our CTO has served in various roles in information technology and information security for over 35 years, which have covered operations management experience in Government Security, Identity Access Management and SaaS solutions industries. Our SVP-Engineering has over 30 years of experience in software development and engineering, starting in the U.S. Marine Corps.
Our CTO has served in various roles in information technology and information security for over 35 years, which have covered operations management experience in Government Security, Identity Access Management and SaaS solutions industries. Our SVP-Engineering has over 25 years of experience in software development and engineering.
Governance Board Oversight Our Board, in coordination with the Security Committee, oversees our management of cybersecurity risk. They receive regular reports from management about the prevention, detection, mitigation, and remediation of cybersecurity incidents, including material security risks and information security vulnerabilities. Our Security Committee directly oversees our cybersecurity program.
They receive regular reports from management about the prevention, detection, mitigation, and remediation of cybersecurity incidents, including material security risks and information security vulnerabilities. Our Security Committee directly oversees our cybersecurity program.
These assessments include a variety of activities including information security assessments, audits and independent reviews of our ISMS, control environment and operating effectiveness. For example, in 2023 and 2024, we conducted independent audits to assess our ISMS against the ISO/IEC 27001:2013 standard and received certification of compliance with the standard. We also undertake regular penetration testing of our systems.
These assessments include a variety of activities including information security assessments, audits and independent reviews of our ISMS, control environment and operating effectiveness. For example, in 2024 and 2025, we conducted independent audits to assess our ISMS against the ISO/IEC 27001:2022 standard and received certification of compliance with the standard, as well as an independent audit under SOC2 Type 2.
The Board receives periodic updates from management on cybersecurity risk resulting from risk assessments, progress of risk reduction initiatives, external auditor feedback, control maturity assessments, and relevant internal and industry cybersecurity incidents. 21 Management’s Role Our Chief Technology Officer (“CTO”), Senior Vice President of Engineering (“SVP-Engineering”), Data Engineering and Security Director and General Counsel have primary responsibility for assessing and managing material cybersecurity risks and are members of management’s Security Committee, which is a governing body that drives alignment on security decisions across our company.
Management’s Role Our Chief Technology Officer (“CTO”), Senior Vice President of Engineering (“SVP-Engineering”), Data Engineering and Security Director and General Counsel have primary responsibility for assessing and managing material cybersecurity risks and are members of management’s Security Committee, which is a governing body that drives alignment on security decisions across our company.
The results of significant assessments are reported to management and the Board. Cybersecurity processes are adjusted based on the information provided from these assessments. We have also obtained industry certifications and attestations that demonstrate our dedication to protecting the data our customers entrust to us.
We also undertake regular penetration testing of our systems. The results of significant assessments are reported to management and the Board. Cybersecurity processes are adjusted based on the information provided from these assessments.
We have established comprehensive Information Security Management Systems (“ISMS”) policies, which are independently reviewed and audited annually for conformity and effectiveness under ISO/IEC 27001. Our cybersecurity program in particular focuses on the following key areas: Collaboration Our cybersecurity risks are identified and addressed through a comprehensive, cross-functional approach.
Our cybersecurity program in particular focuses on the following key areas: Collaboration Our cybersecurity risks are identified and addressed through a comprehensive, cross-functional approach.
Removed
We maintain controls and procedures that are designed to ensure prompt escalation of certain cybersecurity incidents so that decisions regarding public disclosure and reporting of such incidents can be made by management and the Board in a timely manner.
Added
We have established comprehensive Information Security Management Systems (“ISMS”) policies, which are independently reviewed and audited annually for conformity and effectiveness under ISO/IEC 27001. In 2025, we also undertook an independent audit report on our System and Organization Controls 2 (“SOC2 Type 2”).
Added
We have also obtained industry certifications and attestations that demonstrate our dedication to protecting the data our customers entrust to us. 23 Governance Board Oversight Our Board, in coordination with the Security Committee, oversees our management of cybersecurity risk.
Added
The Board receives periodic updates from management on cybersecurity risk resulting from risk assessments, progress of risk reduction initiatives, external auditor feedback, control maturity assessments, and relevant internal and industry cybersecurity incidents.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile any litigation contains an element of uncertainty, we have no reason to believe that the outcome of such proceedings will have a material adverse effect on the financial condition or results of operations of the Company. Item 4. Mine Safety Disclosures Not applicable. 22 PART II
Biggest changeWhile any litigation contains an element of uncertainty, we have no reason to believe that the outcome of such proceedings will have a material adverse effect on the financial condition or results of operations of the Company. Item 4. Mine Safety Disclosures Not applicable. 24 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

25 edited+11 added−11 removed13 unchanged
Biggest changeOn May 12, 2023, in connection with certain recruitment services, the Company issued 187,500 common stock warrants to Madison III, LLC, an affiliate of Madison with a term of 5 years and an exercise price of $3.164 per share. 25 On November 3, 2023, the Company entered into a further engagement agreement (the “November Engagement Agreement”) with Madison, pursuant to which Madison agreed to serve as non-exclusive exclusive placement agent for the issuance and sale in a public offering of an aggregate of 1,574,990 shares (the “November Registered Shares”).
Biggest changeOn November 20, 2025, the Company entered into a further engagement agreement (the “November Madison Engagement Agreement”) with Madison, pursuant to which Madison agreed to serve as co-placement agent for the issuance and sale in a public offering of an aggregate of 284,757 shares (the “November Madison Registered Shares”) and an aggregate of 1,341,684 shares and 1,062,306 pre-funded warrants from Dominari (the “November Dominari Registered Shares”).
The options so granted are Non-ISOs and the terms of the Inducement Grants are contained in an agreement between the participant and the Company which are consistent with the Awards issued under the 2021 and 2024 Plans. 24 The Company filed a Registration Statement on Form S-8 on November 12, 2021, with respect to the 2017 Incentive Plan and all outstanding Awards set forth in the above table.
The options so granted are Non-ISOs and the terms of the Inducement Grants are contained in an agreement between the participant and the Company which are consistent with the Awards issued under the 2021 and 2024 Plans. 26 The Company filed a Registration Statement on Form S-8 on November 12, 2021, with respect to the 2017 Incentive Plan and all outstanding Awards set forth in the above table.
In addition, the Compensation Committee has from time to time approved the grant of options to purchase shares of common stock by way of Inducement Grants to new employees, which are outside the approved Plans, pursuant to Nasdaq Listing Rule 5635(c)(4). During 2024 the Company granted 300,000 such options.
In addition, the Compensation Committee has from time to time approved the grant of options to purchase shares of common stock by way of Inducement Grants to new employees, which are outside the approved Plans, pursuant to Nasdaq Listing Rule 5635(c)(4). During 2025 the Company granted 30,000 such options.
The Company has no other equity incentive plans in effect as of December 31, 2024. On September 28, 2017, the shareholders of the Company approved the 2017 Incentive Stock Plan (“2017 Incentive Plan”). On December 29, 2021 the shareholders of the Company approved the 2021 Equity Incentive Plan (“2021 Plan”).
The Company has no other equity incentive plans in effect as of December 31, 2025. 25 On September 28, 2017, the shareholders of the Company approved the 2017 Incentive Stock Plan (“2017 Incentive Plan”). On December 29, 2021 the shareholders of the Company approved the 2021 Equity Incentive Plan (“2021 Plan”).
No further awards may be made under the 2017 Incentive Plan. The 2021 Plan initially authorized Awards over 156,250 shares as well as (a) the balance of the shares which were not allocated to awards under the 2017 Incentive Plan and (b) any shares which are forfeited or cancelled under awards that lapse or expire under the prior plans.
The 2021 Plan initially authorized Awards over 156,250 shares as well as (a) the balance of the shares which were not allocated to awards under the 2017 Incentive Plan and (b) any shares which are forfeited or cancelled under awards that lapse or expire under the prior plans.
The 2024 Plan initially authorized 395,000 shares as well as (a) the balance of the shares which were not allocated to awards under the 2021 Incentive Plan and (b) any shares which are forfeited or cancelled under awards that lapse or expire under the prior plans. All plans are administered by the Compensation Committee.
The 2024 Plan initially authorized 395,000 shares as well as (a) the balance of the shares which were not allocated to awards under the 2021 Incentive Plan and (b) any shares which are forfeited or cancelled under awards that lapse or expire under the prior plans.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The high and low per share closing sales prices of the Company’s stock on the Nasdaq Market (ticker symbol AUID) for each quarter for the years ended December 31, 2024 and 2023 were as follows: Quarter Ended High Low March 31, 2023 $ 5.84 $ 2.40 June 30, 2023 $ 7.12 $ 2.80 September 30, 2023 $ 10.96 $ 6.43 December 31, 2023 $ 9.94 $ 5.78 March 31, 2024 $ 11.95 $ 7.01 June 30, 2024 $ 11.79 $ 7.16 September 30, 2024 $ 10.79 $ 6.29 December 31, 2024 $ 8.12 $ 5.21 Holders of our Common Stock As of March 10, 2025, there were approximately 128 stockholders of record of our common stock.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The high and low per share closing sales prices of the Company’s stock on the Nasdaq Market (ticker symbol AUID) for each quarter for the years ended December 31, 2025 and 2024 were as follows: Quarter Ended High Low March 31, 2024 $ 11.95 $ 7.01 June 30, 2024 $ 11.79 $ 7.16 September 30, 2024 $ 10.79 $ 6.29 December 31, 2024 $ 8.12 $ 5.21 March 31, 2025 $ 7.38 $ 4.38 June 30, 2025 $ 8.66 $ 4.40 September 30, 2025 $ 5.42 $ 2.47 December 31, 2025 $ 2.99 $ 0.86 Holders of our Common Stock As of March 6, 2026, there were approximately 128 stockholders of record of our common stock.
The Company paid Madison an aggregate cash fee equal to 7.0% of the gross proceeds received by the Company from the sale of the June Registered Shares, $80,000 cash retainer fee and issued stock purchase warrants (the “June Madison Warrants”) to purchase up to 102,547 shares of common stock of the Company with a term of 5 years at an exercise price of $7.50 per share, which equal to 7.0% of the aggregate number of Shares placed in the Offering.
The Company paid Madison cash fees and issued stock purchase warrants (the “June Madison Warrants”) to purchase up to 102,547 shares of common stock of the Company with a term of 5 years at an exercise price of $7.50 per share, which equal to 7.0% of the aggregate number of June Registered Shares placed in the offering.
On June 12, 2024, the Company entered into a further engagement agreement (the “June Engagement Agreement”) with Madison, pursuant to which Madison agreed to serve as non-exclusive exclusive placement agent for the issuance and sale in a public offering of an aggregate of 1,464,965 shares (the “June Registered Shares”).
Unregistered Sales of Equity Securities Engagement Agreements On June 12, 2024, the Company entered into an engagement agreement (the “Madison Engagement Agreement”) with Madison Global Partners, LLC (“Madison”), pursuant to which Madison agreed to serve as non-exclusive placement agent for the issuance and sale in a public offering of an aggregate of 1,464,965 shares (the “June Registered Shares”).
The issuance of the above securities is exempt from the registration requirements under Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Regulation D promulgated thereunder. Item 6. Reserved.
All the offers and sales of securities listed above were made to accredited investors. The issuance of the above securities is exempt from the registration requirements under Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Regulation D promulgated thereunder. 28 Item 6. Reserved.
Each such option is at the exercise price of $8.67 per share, exercisable for a period of ten years, vesting over a period of twelve months. On November 12, 2024, the Company made a grant of options to Mr.
Each such option is at the exercise price of $3.90 per share, exercisable for a period of ten years, vesting over a period of twelve months. On September 4, 2025, the Company made a grant of options to each of Messrs.
Mehta to acquire 13,282 shares of common stock at the exercise price of $7.78 and exercisable for a period of ten years, subject to achievement of service conditions. On August 13, 2024, the Company made a grant of options to each of Messrs. Mehta, Jisser, Koehneman, Thompson and to Ms. White to acquire 15,627 shares of common stock.
On August 13, 2024, the Company made a grant of options to each of Messrs. Mehta, Jisser, Koehneman, Thompson and to Ms. White to acquire 15,627 shares of common stock. Each such option is at the exercise price of $8.67 per share, exercisable for a period of ten years, vesting over a period of twelve months.
The summaries, however, do not purport to be a complete description of all the provisions of each plan. 23 The 2017 Incentive Plan initially authorized Awards over 604,167 shares of common stock and at the Annual Meeting of Stockholders held on March 22, 2021, the stockholders approved and ratified an increase of 312,500 shares allocated to the 2017 Incentive Plan.
The 2017 Incentive Plan initially authorized Awards over 604,167 shares of common stock and at the Annual Meeting of Stockholders held on March 22, 2021, the stockholders approved and ratified an increase of 312,500 shares allocated to the 2017 Incentive Plan. No further awards may be made under the 2017 Incentive Plan.
On June 26, 2024, the shareholders of the Company approved the 2024 Equity Incentive Plan (“2024 Plan”). The following is a summary of principal features of the 2017 Incentive Plan, the 2021 Plan, and the 2024 Plan.
On June 26, 2024, the shareholders of the Company approved the 2024 Equity Incentive Plan (“2024 Plan”). The following is a summary of principal features of the 2017 Incentive Plan, the 2021 Plan, and the 2024 Plan. The summaries, however, do not purport to be a complete description of all the provisions of each plan.
The Company filed a further Registration Statement on Form S-8 on February 1, 2022, with respect to the 2021 Plan.
The Company filed further Registration Statements on Form S-8 on February 1, 2022 and April 25, 2025 with respect to the 2021 Plan and 2024 Plan, respectively.
During the year ended December 31, 2024, the Company granted a total of 200,000 such options to certain new employees at exercise prices ranging from $5.99 per share to $9.61 per share. All the offers and sales of securities listed above were made to accredited investors.
During the year ended December 31, 2024, the Company granted a total of 200,000 such options to certain new employees at exercise prices ranging from $5.99 per share to $9.61 per share. During the year ended December 31, 2025, the Company granted a total of 30,000 such options to a new employee at an exercise price of $5.89 per share.
The Company paid Madison an aggregate cash fee equal to 7.0% of the gross proceeds received by the Company from the sale of the November Registered Shares, $80,000 cash retainer fee and issued stock purchase warrants (the “November Madison Warrants”) to purchase up to 110,249 shares of common stock of the Company with a term of 5 years at an exercise price of $6.00 per share, which equal to 7.0% of the aggregate number of Shares placed in the Offering.
The Company paid Madison cash fees and issued stock purchase warrants (the “November Madison Warrants”) to purchase up to 92,051 shares of common stock of the Company with a term of 5 years at an exercise price of $1.35 per share, which equal 7.0% of the aggregate number of November Madison Registered Shares placed in the offering to Madison investors and 3.0% of the aggregate number of November Dominari Registered Shares placed in the offering to Dominari investors.
Securities Authorized for Issuance Under Equity Compensation Plans as of December 31, 2024 Plan Number of Securities to be issued upon exercise of outstanding options, awards and rights Weighted average exercise price of outstanding options, awards and rights Number of securities remaining available for issuance under equity compensation plans (excluding) securities reflected in first column) Equity compensation plans approved by security holders - 2017 Incentive Stock Plan 403,498 32.52 - Equity compensation plans approved by security holders - 2021 Equity Incentive Plan 815,078 6.64 - Equity compensation plans approved by security holders - 2024 Equity Incentive Plan 158,135 8.67 340,262 Equity compensation plans not approved by security holders 770,689 32.38 - The Company has adopted the authID Inc. 2017 Incentive Stock Plan, 2021 Equity Incentive Plan, and 2024 Equity Incentive Plan.
Securities Authorized for Issuance Under Equity Compensation Plans as of December 31, 2025 Plan Number of Securities to be issued upon exercise of outstanding options, awards and rights Weighted average exercise price of outstanding options, awards and rights Number of securities remaining available for issuance under equity compensation plans (excluding) securities reflected in first column) Equity compensation plans approved by security holders - 2017 Incentive Stock Plan 188,745 49.63 - Equity compensation plans approved by security holders - 2021 Equity Incentive Plan 705,114 6.64 - Equity compensation plans approved by security holders - 2024 Equity Incentive Plan 951,716 5.16 193,147 Equity compensation plans not approved by security holders 546,102 16.22 - The Company has adopted the authID Inc. 2017 Incentive Stock Plan, 2021 Equity Incentive Plan, and 2024 Equity Incentive Plan.
The Company paid Madison an aggregate cash fee equal to 7.0% of the gross proceeds received by the Company from the sale of the securities in the Offering, $80,000 cash retainer fee and issued stock purchase warrants (the “Madison Warrants”) to purchase up to 156,712 shares of common stock of the Company at an exercise price of $3.664 per share, which equal to 7.0% of the aggregate number of Shares placed in the Offering.
The Company paid Madison cash fees and issued stock purchase warrants (the “April Madison Warrants”) to purchase up to 80,999 shares of common stock of the Company with a term of 5 years at an exercise price of $4.50 per share, which equal 7.0% of the aggregate number of April Madison Registered Shares placed in the offering to Madison investors and 3.0% of the aggregate number of April Dominari Registered Shares placed in the offering to Dominari investors.
Erick Soto to acquire 100,000 shares of common stock at an exercise price of $6.94, exercisable for a period of ten years, vesting over a period of thirty-six months. 26 Other Stock Option Grants In addition, the Company issued options by way of Inducement Grants to new employees, which are outside the approved Plans, pursuant to Nasdaq Listing Rule 5635(c)(4).
Other Stock Option Grants In addition, the Company issued options by way of Inducement Grants to new employees, which are outside the approved Plans, pursuant to Nasdaq Listing Rule 5635(c)(4).
Sellitto to acquire 5,000 and 7,000 shares of common stock, respectively, at an exercise price of $9.25 per share, exercisable for a period of ten years, vesting over twelve months. On May 20, 2024, the Company made a grant of options to Mr.
On November 12, 2024, the Company made a grant of options to Mr. Erick Soto to acquire 100,000 shares of common stock at an exercise price of $6.94, exercisable for a period of ten years, vesting over a period of thirty-six months. On June 4, 2025, the Company made grants of options to Mr.
Daguro to acquire 183,125 shares of common stock at an exercise price of $5.48 per share, exercisable for a period of ten years, vesting subject to achievement of performance and service conditions. On August 15, 2023, the Company made a grant of options to Mr.
Director & Executive Officer Stock Option Grants On May 20, 2024, the Company made a grant of options to Mr. Mehta to acquire 13,282 shares of common stock at the exercise price of $7.78 and exercisable for a period of ten years, subject to achievement of service conditions.
Koehneman and Trelin and to Ms. White to acquire 15,625 shares of common stock and to each of Messrs. Jisser and Thompson to acquire 3,125 shares of common stock. Each such option is at the exercise price of $5.48 per share, exercisable for a period of ten years, vesting over a period of twelve months.
All grants were made at the exercise price of $5.35 and are exercisable for a period of ten years, vesting over a period of twelve months. On September 4, 2025, the Company made a grant of options to each of Messrs. Mehta, Jisser, Koehneman, Garchik, Venkataraman, Shevelyov, Menghani and to Ms. White to acquire 38,024 shares each of common stock.
Engagement Agreements On April 20, 2023, the Company entered into an engagement agreement (the “Engagement Agreement”) with Madison Global Partners, LLC (“Madison”), pursuant to which Madison agreed to serve as non-exclusive exclusive placement agent for the issuance and sale of the Registered Shares and the PIPE Shares.
On March 25, 2025, the Company entered into an engagement agreement (the “Dominari Engagement Agreement”) with Dominari Securities LLC (“Dominari”), pursuant to which Dominari agreed to serve as exclusive placement agent for the issuance and sale in a public offering of an aggregate of 694,444 shares and 450,000 pre-funded warrants (the “April Dominari Registered Shares”).
On June 28, 2023, the Company made an additional grant of options to Mr. Szoke to acquire 50,000 shares of common stock at the exercise price of $5.48 per share, exercisable for a period of ten years, vesting subject to achievement of performance and service conditions. On June 28, 2023, the Company made an additional grant of options to Mr.
Garchik, Venkataraman, Shevelyov, Menghani to acquire 12,500 shares of common stock at the exercise price of $3.90 and exercisable for a period of ten years, vesting over a period of three years.
Removed
Unregistered Sales of Equity Securities Securities Purchase Agreement Between May 23 and June 7, 2023, the Company entered into a securities purchase agreement with accredited investors (the “Purchase Agreement”), pursuant to which the Company agreed to issue and sell, in a public offering an aggregate of 1,113,828 shares (the “Registered Shares”) of the Company’s common stock and in a concurrent private placement 1,121,482 shares (the “PIPE Shares”) of Common Stock (the “Offering”) at a price between $3.664 and $5.632 per share (or $4.00 if the purchaser is a director of the Company).
Added
At the Annual Meeting of Stockholders held on June 26, 2025, the stockholders approved and ratified an increase of 295,000 shares to the 2024 Plan. All plans are administered by the Compensation Committee.
Removed
The purchasers under the Purchase Agreement included Stephen J. Garchik (“Garchik”) and four directors of the Company, including the Chief Executive Officer and Chairman of the Board of Directors.
Added
On March 12, 2025, the Company entered into a further engagement agreement (the “March Madison Engagement Agreement”) with Madison which was amended as of March 26, 2025.
Removed
Garchik, who is a Holder (as defined below), the collateral agent for the Convertible Notes and a shareholder of the Company, entered into that certain Amended and Restated Facility Agreement, dated March 8, 2023 (the “A&R Facility Agreement”), with the Company and pursuant to the A&R Facility Agreement, loaned $900,000 to the Company on March 9, 2023, pursuant to a promissory note in favor of Garchik (the “Initial Promissory Note”).
Added
Pursuant to the amended March Madison Engagement Agreement, Madison agreed to serve as co-placement agent for the issuance and sale in a public offering of an aggregate of 666,666 shares (the “April Madison Registered Shares”) and an aggregate of 694,444 shares and 450,000 pre-funded warrants from Dominari Securities LLC (the “April Dominari Registered Shares”).
Removed
In the Offering, the Company and Garchik agreed that the Company would offset the purchase price of certain shares that Garchik agreed to purchase pursuant to the Purchase Agreement against the Company’s obligations under, and the cancellation of, the A&R Facility Agreement and the Initial Promissory Note and the related obligations of the Company’s subsidiaries ID Solutions, Inc., FIN Holdings, Inc. and Innovation in Motion, Inc.
Added
The Company paid Dominari cash fees and issued stock purchase warrants (the “April Dominari Warrants”) to purchase up to 91,556 shares of common stock of the Company with a term of 5 years at an exercise price of $4.50 per share, which equal 8.0% of the aggregate number of April Dominari Registered Shares placed in the offering.
Removed
(the “Guarantors”) under the guaranty that that the Guarantors had entered into as a condition to Garchik lending under the Initial Promissory Note. Accordingly, Garchik agreed that upon the closing of the Offering, the A&R Facility Agreement, the Initial Promissory Note and the Guaranty terminated.
Added
On May 7, 2025, Madison agreed to serve as co-placement agent for the issuance and sale in a public offering of an aggregate of 89,285 shares (the “May Madison Registered Shares”) and an aggregate of 283,775 shares from Dominari (the “May Dominari Registered Shares”).
Removed
Exchange Agreement Between May 23 and June 7, 2023, the Company entered into an exchange agreement with certain holders (“Holders”) of the March 2022 Senior Secured Convertible Notes (the “Convertible Notes”) of the Company (the “Exchange Agreement”), pursuant to which the Company issued 2,382,700 shares (the “Exchange Shares”) of common stock to the Holders in exchange for the Holders’ Convertible Notes principal balance and accrued interest (the “Note Exchange”) at a price between $3.776 and $5.80 per share or $4.12 if the Holder is a director, officer or insider of the Company.
Added
The Company paid Madison cash fees and issued stock purchase warrants (the “May Madison Warrants”) to purchase up to 14,762 shares of common stock of the Company with a term of 5 years at an exercise price of $5.60 per share, which equal 7.0% of the aggregate number of May Madison Registered Shares placed in the offering to Madison investors and 3.0% of the aggregate number of May Dominari Registered Shares placed in the offering to Dominari investors.
Removed
Pursuant to the Engagement Agreement, the Company reimbursed Madison $60,000 for fees and expenses of legal counsel and other out-of-pocket expenses. The Engagement Agreement has indemnity and other customary provisions for transactions of this nature.
Added
On May 7, 2025, Dominari also served as exclusive placement agent for the issuance and sale in a public offering of an aggregate of 283,775 shares (the “May Dominari Registered Shares”).
Removed
Pursuant to the November Engagement Agreement, the Company reimbursed Madison $60,000 for fees and expenses of legal counsel and other out-of-pocket expenses. The November Engagement Agreement has indemnity and other customary provisions for transactions of this nature.
Added
The Company paid Dominari cash fees and issued stock purchase warrants (the “May Dominari Warrants”) to purchase up to 22,702 shares of common stock of the Company with a term of 5 years at an exercise price of $5.60 per share, which equal 8.0% of the aggregate number of May Dominari Registered Shares placed in the offering.
Removed
Pursuant to the June Engagement Agreement, the Company reimbursed Madison $60,000 for fees and expenses of legal counsel and other out-of-pocket expenses. The June Engagement Agreement has indemnity and other customary provisions for transactions of this nature. Director & Executive Officer Stock Option Grants On June 28, 2023, the Company made a grant of options to each of Messrs.
Added
The Company also issued stock purchase warrants (the “November Strategic Advisor Madison Warrants”) to purchase up to 250,000 shares of common stock of the Company with a term of 5 years at an exercise price of $1.62. 27 On November 24, 2025, Dominari also served as exclusive placement agent for the issuance and sale in a public offering of an aggregate of 1,341,684 shares and 1,062,306 pre-funded warrants (the “November Dominari Registered Shares”).
Removed
Sellitto to acquire 50,000 shares of common stock at an exercise price of $8.87 per share, exercisable for a period of ten years, vesting subject to achievement of performance and service conditions. On December 21, 2023, the Company made a grant of options to Mr. Szoke and Mr.
Added
The Company paid Dominari cash fees and issued stock purchase warrants (the “November Dominari Warrants”) to purchase up to 192,319 shares of common stock of the Company with a term of 5 years at an exercise price of $1.35 per share, which equal 8.0% of the aggregate number of November Dominari Registered Shares placed in the offering.
Removed
During the year ended December 31, 2023, the Company granted a total of 100,000 such options to certain new employees at exercise prices ranging from $6.13 per share to $9.85 per share.
Added
Edward Sellitto to acquire 45,000 shares of common stock, to Mr. Thomas Szoke to acquire 33,000 shares of common stock, to Mr. Rhoniel Daguro to acquire 10,000 shares of common stock and to Mr. Erick Soto to acquire 1,000 shares of common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

56 edited+20 added−32 removed30 unchanged
Biggest changeGarchik and one director of the Company. 2023 Common Stock Transactions ● Between May 23 and June 7, 2023, the Company entered into a securities purchase agreement with accredited investors (the “Purchase Agreement”), pursuant to which the Company agreed to issue and sell, in a public offering an aggregate of 1,113,828 shares (the “Registered Shares”) of the Company’s common stock and in a concurrent private placement 1,121,482 shares (the “PIPE Shares”) of Common Stock (the “May 2023 Offering”) at a per share price between $3.664 and $5.632 per share (or $4.00 if the purchaser is a director of the Company).
Biggest changeEquity Financing See Note 7 of the Consolidated Financial Statements for additional information associated with equity financing in 2025 and 2024. 2025 Common Stock Transactions ● On April 1, 2025, pursuant to a securities purchase agreement with accredited investors (the “April Purchase Agreement”), the Company agreed to issue and sell, in a registered offering (the “April Offering”) an aggregate of 1,811,120 shares of common stock and pre-funded warrants at a per share price of $4.50. ● On May 7, 2025, pursuant to a securities purchase agreement with accredited investors (the “May Purchase Agreement”), the Company agreed to issue and sell, in a registered offering (the “May Offering”) an aggregate of 373,060 shares of common stock at a per share price of $5.60. ● On November 24, 2025, pursuant to a securities purchase agreement with accredited investors (the “November Purchase Agreement”), the Company agreed to issue and sell, in a registered offering (the “November Offering”) an aggregate of 2,688,747 shares of common stock and pre-funded warrants at a per share price of $1.35 (or $1.71 if the purchaser is a director of the Company).
Our solution returns a very low-latency response, key to enabling high-volume use cases (such as logins and high-value transactions) and providing a frictionless user experience. 28 ● Precisely and accurately identify their consumers and employees, giving the enterprise complete confidence in who is accessing their digital assets ● Provide a seamless user experience in terms of speed and self-guided flow, so that even users who are not tech-savvy are easily able to complete the identity verification and authentication processes ● Support a wide variety of devices .
Our solution returns a very low-latency response, key to enabling high-volume use cases (such as logins and high-value transactions) and providing a frictionless user experience. ● Precisely and accurately identify their consumers and employees, giving the enterprise complete confidence in who is accessing their digital assets. ● Provide a seamless user experience in terms of speed and self-guided flow, so that even users who are not tech-savvy are easily able to complete the identity verification and authentication processes. ● Support a wide variety of devices .
These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.
These condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.
Customers can use the authID platform not only to verify the identity of new users, but also to authenticate those users seamlessly on an ongoing basis to enable quick, secure logins and transaction authentications. ● Benefit from high-speed processing .
Customers can use the authID platform not only to verify the identity of new users, but also to authenticate those users seamlessly on an ongoing basis to enable quick, secure logins and transaction authentications. 30 ● Benefit from high-speed processing .
As used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” except where the context otherwise requires, the term “we,” “us,” “our,” “authID” or “the Company,” refers to the business of authID Inc. Overview authID Inc.
As used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” except where the context otherwise requires, the term “we,” “us,” “our,” “authID” or “the Company,” refers to the business of authID Inc.
Related Party Transactions On June 6, 2023, the Company entered into a services agreement with The Pipeline Group, Inc. (“TPG”). Ken Jisser, a director of the Company, is the founder and CEO of TPG, a technology-enabled services company that aims to deliver business results for companies looking to build a predictable and profitable pipeline.
Related Party Transactions Commercial Agreements On June 6, 2023, the Company entered into a services agreement with The Pipeline Group, Inc. (“TPG”). Ken Jisser, a director of the Company, is the founder and CEO of TPG, a technology-enabled services company that aims to deliver business results for companies looking to build a predictable and profitable pipeline.
Since June 2023, the Company has employed Dale Daguro, the brother of our CEO, Rhon Daguro as a VP Sales. Dale Daguro’s employment is at will and may be terminated at any time, with or without cause. Dale’s compensation is commensurate with other executives employed by the Company at a similar level of seniority and experience.
Since June 2023, the Company has employed Dale Daguro, the brother of our CEO, Rhoniel Daguro as a VP Sales. Dale Daguro’s employment is at will and may be terminated at any time, with or without cause. Dale’s compensation is commensurate with other executives employed by the Company at a similar level of seniority and experience.
The Company accounts for forfeitures of employee awards as they occur. Adjusted EBITDA This discussion includes information about Adjusted EBITDA that is not prepared in accordance with U.S. GAAP. Adjusted EBITDA is not based on any standardized methodology prescribed by U.S. GAAP and is not necessarily comparable to similar measures presented by other companies.
The Company accounts for forfeitures of employee awards as they occur. Adjusted EBITDA This discussion includes information about Adjusted EBITDA that is not prepared in accordance with GAAP. Adjusted EBITDA is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similar measures presented by other companies.
As further described in Item 13 “Certain Relationships and Related Transactions and Director Independence” and in Note 7 “Related Party Transactions” to the Consolidated Financial Statements, the Company has entered into various equity investments and employment agreements with Directors and Officers of the Company.
As further described in Item 13 “Certain Relationships and Related Transactions and Director Independence” and in Note 6 “Related Party Transactions” to the Consolidated Financial Statements, the Company has entered into various equity investments and employment agreements with Directors and Officers of the Company.
For certain contracts, the Company enters into an agreement which stipulates a minimum annual fee which is generally due at the end of the contract year, in excess of the amount of monthly billings. The Company may also require milestone payments of the minimum annual fee.
For certain contracts, the Company enters into an agreement which stipulates a minimum annual fee which is due at the end of the contract year, in excess of the amount of monthly billings. The Company may also require pre-payment or milestone payments of the minimum annual fee.
Account Access and Recovery authID’s Verified biometric identity authentication solution allows users to recover, via a facial biometric, account access that is lost or blocked due to expired credentials, lockouts, lost or stolen devices, or compromised accounts. Because the account owner’s root of trust is established in the cloud, recovery is independent of any device or hardware.
Verified allows users to recover, via a facial biometric, account access that is lost or blocked due to expired credentials, lockouts, lost or stolen devices, or compromised accounts. Because the account owner’s root of trust is established in the cloud, recovery is independent of any device or hardware.
Our Platform Our cloud-based platform was developed with internally developed software as well as acquired and licensed technology and provides the following core services: ● Biometric Identity Verification – Proof TM ● Biometric Identity Authentication - Verified TM ● PrivacyKey TM Privacy Preserving Biometrics ● Account / Access Recovery 27 Biometric Identity Verification - Proof Biometric identity verification establishes the trusted identity of a user based on a variety of ground truth sources, including government-issued identity documents such as national IDs, driver’s licenses and passports or electronic machine-readable travel documents (or eMRTDs).
Our Platform Our cloud-based platform was developed with internally developed software as well as acquired and licensed technology and provides the following core services: ● Biometric Identity Verification – Proof TM ● Biometric Identity Authentication – Verified TM ● PrivacyKey TM Privacy Preserving Biometrics ● Account / Access Recovery ● Identity Exchange (IDX) Platform ● authID Mandate Agentic AI Security Biometric Identity Verification - Proof Biometric identity verification establishes the trusted identity of a user based on a variety of ground truth sources, including government-issued identity documents such as national IDs, driver’s licenses and passports or electronic machine-readable travel documents (or eMRTDs).
Our growth-oriented business plan to offer products to our customers will require continued capital investment and there is no guarantee that such financing will be available, or available on acceptable terms.
Our growth-oriented business plan to offer products to our customers will require continued capital investment and there is no guarantee that such financing will be available, or available on acceptable terms. There is no assurance that the Company will ever be profitable.
Liquidity and Capital Resources As of December 31, 2024, current assets were $10.1 million and current liabilities outstanding amounted to $3.0 million which resulted in net working capital of $7.1 million. Net cash used by operating activities was $11.6 million for the year ended December 31, 2024 compared to $8.4 million in 2023.
Liquidity and Capital Resources As of December 31, 2025, current assets were $5.7 million and current liabilities outstanding amounted to $1.4 million which resulted in net working capital of $4.3 million. Net cash used by operating activities was $14.7 million for the year ended December 31, 2025 compared to $11.6 million in 2024.
The continuation of the Company as a going concern is dependent upon financial support from the Company’s stockholders, the ability of the Company to obtain additional debt or equity financing to continue operations, the Company’s ability to generate sufficient revenues and cash flows from operations (both from existing and new customers), and successfully locating and negotiating with cash generating business entities for potential acquisition by the Company.
The continuation of the Company as a going concern is dependent upon financial support from the Company’s stockholders, the ability of the Company to obtain additional debt or equity financing to continue operations, the Company’s ability to generate sufficient cash flows from operations, successfully locating and negotiating with other business entities for potential acquisition and acquiring new clients to generate revenues and cash flows.
GAAP and the accompanying reconciliations, provides useful information about our period-over-period results. Adjusted EBITDA is presented because management believes it provides additional information with respect to the performance of our fundamental business activities and is also frequently used by securities analysts, investors and other interested parties in the evaluation of comparable companies.
Adjusted EBITDA is presented because management believes it provides additional information with respect to the performance of our fundamental business activities and is also frequently used by securities analysts, investors and other interested parties in the evaluation of comparable companies.
During the year ended December 31, 2024, Dale Daguro earned approximately $255,000 in base salary and sales commission.
During the year ended December 31, 2025, Dale Daguro earned approximately $283,000 in base salary and sales commission.
On October 25, 2023, on December 19, 2023 and on August 26, 2024, the Company entered into amendments to the above services agreement, pursuant to which TPG will provide certain additional services to the Company. In consideration of the services, the Company will pay TPG $70,000 per month during the current term ending in June 2025.
On October 25, 2023, on December 19, 2023 and on August 26, 2024, the Company entered into amendments to the above services agreement, pursuant to which TPG will provide certain additional services to the Company. In consideration of the services, the Company paid TPG $70,000 per month.
Research and development activities and technology deployment will require continued investment. 34 The Company projects that the current and past investments in technology and systems will lead to revenue expansion, thereby reducing liquidity needs. However, to further implement its business plan and satisfy its working capital requirements, the Company will need to raise more capital.
The Company projects that the current and past investments in technology and systems will lead to revenue expansion, thereby reducing liquidity needs. However, to further implement its business plan and satisfy its working capital requirements, the Company will need to raise more capital.
The purchasers under the June Purchase Agreement included Stephen J.
The purchasers under the November Purchase Agreement included Stephen J.
Equity Financing See Note 8 of the Consolidated Financial Statements for additional information associated with equity financing in 2024 and 2023. 2024 Common Stock Transactions ● On June 27, 2024, the Company entered into a securities purchase agreement with accredited investors (the “ June Purchase Agreement ”), pursuant to which the Company agreed to issue and sell, in a registered offering (the “ June Offering ”) an aggregate of 1,464,965 shares of the Company’s common stock at a per share price of $7.50 (or $8.61 if the purchaser is a director of the Company).
Garchik. 2024 Common Stock Transactions ● On June 27, 2024, the Company entered into a securities purchase agreement with accredited investors (the “ June Purchase Agreement ”), pursuant to which the Company agreed to issue and sell, in a registered offering (the “ June Offering ”) an aggregate of 1,464,965 shares of the Company’s common stock at a per share price of $7.50 (or $8.61 if the purchaser is a director of the Company).
Some of these limitations are: ● Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; ● Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; ● Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; ● Adjusted EBITDA does not include the impact of certain charges or gains resulting from matters we consider not to be indicative of our ongoing operations.
Some of these limitations are: ● Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; ● Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; ● Although amortization are non-cash charges, the assets being amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; ● Adjusted EBITDA does not include the impact of certain charges or gains resulting from matters we consider not to be indicative of our ongoing operations. 34 Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business.
For contracts with minimum annual fees, the Company generally recognizes the amount of revenue ratably over the contract year and records contract assets for the amount in excess of monthly contract billings relating to variable contract consideration.
Transaction fees are billed monthly and are constrained to transactions incurred within the month. For contracts with minimum annual fees, the Company generally recognizes the amount of revenue ratably over the contract year and records contract assets for the amount in excess of monthly contract billings relating to variable contract consideration.
A reconciliation of this non-GAAP measure is included below. Adjusted EBITDA is a non-GAAP financial measure that represents U.S. GAAP net income (loss) adjusted to exclude (1) interest expense, (2) interest income, (3) provision for income taxes, (4) depreciation and amortization, (5) stock-based compensation expense (stock options) and (6) certain other items management believes affect the comparability of operating results.
Adjusted EBITDA is a non-GAAP financial measure that represents GAAP net income (loss) adjusted to exclude (1) interest expense and debt discount and debt issuance costs amortization expense, (2) interest income, (3) provision for income taxes, (4) Amortization, (5) stock-based compensation expense and certain other items management believes affect the comparability of operating results.
In June 2024, the Company raised approximately $10.0 million after expenses from existing and new stockholders through the sale of Common Stock pursuant to a registered direct offering. Going forward, the Company plans to raise additional funds to support its operations and investments as it seeks to create a sustainable organization.
In April, May and November 2025, the Company raised a total of approximately $11.4 million after expenses from existing and new stockholders through the sale of Common Stock pursuant to registered direct offerings. Going forward, the Company plans to raise additional funds to support its operations and investments as it seeks to create a sustainable organization.
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.
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 for a period of twelve months from the date of these consolidated financial statements were issued.
The summary of the agreement entered with TPG is qualified in its entirety by reference to the forms of such agreements, which were filed as exhibits to the Company’s Current Report and are incorporated by reference herein (See “Exhibits”). The Company has entered into various investment, credit and funding agreements with Mr.
The summary of the agreement entered with TPG is qualified in its entirety by reference to the forms of such agreements, which were filed as exhibits to certain of the Company’s filings with the SEC and are incorporated by reference herein (See “Exhibits”).
Key Trends We believe that our financial results will be impacted by several market trends in the identity verification and authentication markets, as well as expanding digital transformation efforts across a wide range of market segments.
PrivacyKey verification and authentication is seamlessly delivered thru either a web or mobile applications with a response time of less than 700ms. Key Trends We believe that our financial results will be impacted by several market trends in the identity verification and authentication markets, as well as expanding digital transformation efforts across a wide range of market segments.
The purchase price of the shares issued in this transaction was the same as the purchase price paid by all other investors in the same round and was higher than the Nasdaq Official Closing Price in effect on the date of the transaction. On June 26, 2024, Mr.
The purchase price of the shares issued in this transaction was the same as the purchase price paid by all other investors in the same round and represented a 24% discount to the Nasdaq Official Closing Price in effect on the date of the transaction. 32 On June 26, 2025 Mr Garchik was elected as a Director of the Company.
Depreciation and amortization expense During the year ended December 31, 2024, depreciation and amortization decreased by approximately $0.1 million compared to the year ended December 31, 2023, as the Company’s intangible assets useful life decreases.
Amortization expense During the year ended December 31, 2025, Amortization decreased by approximately $0.1 million compared to the year ended December 31, 2024, as the Company’s assets remaining useful life decreases. 35 Interest expense Interest expense includes interest expense, debt issuance and discount amortization expense. Interest expense remained flat during the years ended December 31, 2025 and December 31, 2024.
Further, assuming we achieve our expected growth plan, of which there is no guarantee, we will need additional capital to implement growth beyond our current business plan. As a result of these factors, there is substantial doubt about the Company’s ability to continue as a going concern.
Further, assuming we achieve our expected growth plan, of which there is no guarantee, we will need additional capital to implement growth beyond our current business plan.
Actual results could differ from those estimates. 31 Revenue Recognition Software License – The Company recognizes revenue based on the identified performance obligations over the performance period for fixed consideration and / or variable fees generated. Variable fees are typically earned over time based on monthly users and transaction volumes.
Actual results could differ from those estimates. Revenue Recognition Revenues, net is defined as gross revenues, less discounts and sales concessions. Software License – The Company recognizes revenue based on the identified performance obligations over the performance period for fixed consideration and / or variable fees generated.
We allocate the selling price in a contract which has multiple performance obligations based on the contract selling price that we believe represents a fair market price for the service rendered based on estimated standalone selling price. Transaction fees are billed monthly and are constrained to transactions incurred within the month.
Variable fees are typically earned over time based on monthly users, transaction volumes or a monthly flat fee rate. We allocate the selling price in a contract which has multiple performance obligations based on the contract selling price that we believe represents a fair market price for the service rendered based on estimated standalone selling price.
For the year ended December 31, 2024, the Company earned revenue of approximately $0.9 million, used $11.6 million to fund its operations, and incurred a net loss from continuing operations of approximately $14.3 million.
As of December 31, 2025, the Company had an accumulated deficit of approximately $191.7 million. For the year ended December 31, 2025, the Company earned net revenue of approximately $2.0 million, used $15.0 million to fund its operations, and incurred a net loss from operations of approximately $17.9 million.
We also rely on Adjusted EBITDA as a primary measure to review and assess the operating performance of our company and our management, and it will be a focus as we invest in and grow the business. 32 Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for, analysis of our results as reported under GAAP.
We also rely on Adjusted EBITDA as a primary measure to review and assess the operating performance of our company and our management, and it will be a focus as we invest in and grow the business.
Any usage-based fees in excess of the minimum contract amount are charged to the customer and allocated to the annual period in which they are earned under the contract.
For the years-ended December 31, 2025 and 2024 the Company granted approximately $0.9 million and $0 in concessions respectively. 33 Any usage-based fees in excess of the minimum contract amount are charged to the customer and allocated to the annual period in which they are earned under the contract.
Biometric Identity Authentication - Verified Biometric identity authentication provides any organization with a secure, convenient solution to validate that an individual is the verified account owner for various purposes including passwordless login and performing specific transactions, or functions.
In a digital, online world of increasing fraud and security threats, Proof speeds up onboarding and offers our customers confidence in the identities of consumers, employees or third-party vendors. 29 Biometric Identity Authentication - Verified Biometric identity authentication provides any organization with a secure, convenient solution to validate that an individual is the verified account owner for various purposes including passwordless login and performing specific transactions, or functions.
Because of these limitations, adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our U.S. GAAP results and using Adjusted EBITDA only as a supplement to our U.S. GAAP results.
We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only as a supplement to our GAAP results.
In 2025, the Company will continue to be opportunistic and judicious in raising additional funds to support its operations and investments as it creates a sustainable organization. There is no guarantee that such financing will be available if available on acceptable terms. Our growth-oriented business plan to offer products to our customers will require continued capital investment.
There is no guarantee that such financing will be available, or if available that it will be on acceptable terms. Our growth-oriented business plan to offer products to our customers will require continued capital investment. Research and development activities and technology deployment will require continued investment.
In this way, account recovery is instant, portable, and does not require the presence of or access to a previously provisioned device in order to secure access from a different device. Key Customer Benefits Our solution allows our enterprise customers to: ● Verify and Authenticate users.
In this way, account recovery is instant, portable, and does not require the presence of or access to a previously provisioned device in order to secure access from a different device. PrivacyKey Privacy Preserving Biometrics authID’s PrivacyKey solution provides biometric authentication without the requirement to store any biometric or derivative of biometric data.
Additionally, authID’s PrivacyKey technology enables customers to perform biometric verification through the use of Public/Private Keys that is performed without storing any biometric data, which ensures individual data privacy. In a digital, online world of increasing fraud and security threats, Proof speeds up onboarding and offers our customers confidence in the identities of consumers, employees or third-party vendors.
Additionally, authID’s PrivacyKey TM technology enables customers to perform biometric verification through the use of Public/Private Keys that is performed without storing any biometric data, which ensures individual data privacy.
Results of Operations and Financial Condition for the Year Ended December 31, 2024 as Compared to the Year Ended December 31, 2023 Revenues, net During the year ended December 31, 2024, the Company revenues were approximately $886,000 compared to approximately $190,000 for the year ended December 31, 2023. Revenue increased as we acquired and went live with new customers.
Results of Operations and Financial Condition for the Year Ended December 31, 2025 as Compared to the Year Ended December 31, 2024 Revenues, net During the year ended December 31, 2025, the Company’s net revenues were approximately $2.0 million compared to approximately $0.9 million for the year ended December 31, 2024.
Cash used in operations for 2024 and 2023 was primarily the result of funding the business operations as the Company invested in people and product. Net cash (used)/generated in investing activities in 2024 and 2023 was approximately ($66,000) and $75,000 as the Company received certain proceeds from the sale of its discontinued businesses in 2023.
Cash used in operations for 2025 and 2024 was primarily the result of funding the business operations as the Company invested in people and product. Net cash used in investing activities in 2025 and 2024 was approximately $0.0 million and $0.1 million for the payment of patent fees and purchases of intangible assets.
Garchik, purchased 150,000 shares of the Company’s common stock at a price of $1,125,000. The purchase price of the shares issued in this transaction was the same as the purchase price paid by all other investors in the same round and represented a 24% discount to the Nasdaq Official Closing Price in effect on the date of the transaction.
On November 24, 2025, Mr. Garchik, purchased 126,609 shares of the Company’s common stock at a price of $216,500. The purchase price of the shares issued in this transaction was equal to the Nasdaq Consolidated Closing Bid Price in effect on the date of the transaction.
For the Year Ended December 31, 2024 2023 Loss from continuing operations $ (14,227,994 ) $ (19,617,969 ) Addback: Interest expense 48,930 1,108,458 Other expense (income) (455,227 ) (98,230 ) Conversion expense 7,476,000 Loss on debt extinguishment 380,741 Severance cost 14,251 855,279 Depreciation and amortization 179,075 255,858 Non-Cash recruiting fees 438,000 Taxes 2,864 Stock compensation 2,612,164 487,398 Adjusted EBITDA continuing operations (Non-GAAP) $ (11,878,801 ) $ (8,711,601 ) The increase in Adjusted EBITDA Loss From Continuing Operations in 2024 compared to 2023 can be attributed to several factors.
For the Year Ended December 31, 2025 2024 Net Loss $ (17,932,880 ) $ (14,277,994 ) Addback: Interest expense 15,494 48,930 Other expense (income) (263,134 ) (455,227 ) Severance cost - 14,251 Amortization 88,428 179,075 Stock compensation 3,700,275 2,612,164 Adjusted EBITDA Loss from operations (Non-GAAP) $ (14,364,817 ) $ (11,878,801 ) The increase in Adjusted EBITDA Loss From Operations in 2025 compared to 2024 can be attributed to several factors.
First, the Company took a strategic approach to increase funding for its operations, resulting in an increase in its overall operating expenses. Additionally, the Company invested significantly in research and development, and people.
The Company invested significantly in research and development, and people as well as incurred credit loss expense related to certain customer contracts resulting in an increase in its overall operating expenses.
On November 20, 2023, Mr. Garchik, purchased 166,667 shares of Company’s common stock at a price of $1,000,000.
On June 27, 2024, Stephen Garchik, a holder of 10% of the outstanding shares, purchased 150,000 shares of the Company’s common stock at a price of $1,125,000.
GAAP assuming the Company will continue on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next year following the issuance date of these financial statements. As of December 31, 2024, the Company had an accumulated deficit of approximately $173.8 million.
If we are successful in these efforts, we would expect our revenue to continue to grow. 31 Going Concern These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) assuming the Company will continue on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next year following the issuance date of these consolidated financial statements.
General and administrative expenses During the year ended December 31, 2024, general and administrative expenses increased by approximately $1.1 million compared to the year ended December 31, 2023, principally due to higher stock-based compensation expenses as well as the Company’s increase in headcount costs and higher third-party vendor costs. 33 Research and development expenses During the year ended December 31, 2024, research and development expenses increased by approximately $3.7 million compared to the year ended December 31, 2023, principally due to higher stock-based compensation expenses as well as the Company’s increase in headcount costs and higher third-party vendor costs.
General and administrative expenses During the year ended December 31, 2025, general and administrative expenses increased by approximately $3.3 million compared to the year ended December 31, 2024.
The continuing wars in Ukraine and the Middle East, inflationary pressures, rising energy prices and increases in interest rates have impacted the United States and other major economies and have created uncertainty regarding a possible recession. As a result, many businesses, especially in the technology sector, have made significant cut-backs in expenditure, including reductions in force and investment freezes.
As a result, many businesses, especially in the technology sector, have made significant reductions in expenditure, including reductions in force and investment freezes.
The amount of any billed fees in excess of revenue recognized is recorded as deferred revenue. The company accounts for any price concessions granted to a customer as reductions to consideration under each respective contract and subsequently recognizes revenue up to the amount of the revised consideration after the concession is provided.
The amount of any billed fees in excess of revenue recognized is recorded as deferred revenue. The Company accounts for price concessions as reductions to the transaction price under ASC 606. Price concessions represent implied or estimated future reductions in consideration that the Company expects to grant, based on known facts and circumstances, including customer usage patterns and strategic considerations.
As of December 31, 2024, the Company has the remaining balance of a series of Senior Secured Convertible Notes outstanding for $245,000 due in March 2025. See Notes 5 and 6 of the Consolidated Financial Statements for additional information associated with the convertible notes payable.
See Note 5 of the Consolidated Financial Statements for additional information associated with the convertible notes payable.
(together with its subsidiaries, the “Company”, “authID”, “we” or “our”) ensures enterprises “Know Who’s Behind the Device” TM for every customer or employee login and transaction.
Overview authID ensures enterprises “Know Who’s Behind the Device” TM for every customer or employee login and transaction, through its easy-to-integrate, patented, biometric identity platform. authID powers biometric identity proofing, biometric authentication, and account recovery with a fast, accurate, user-friendly experience.
Off-Balance Sheet Arrangements We have no off-balance sheet financing arrangements. 35 Contractual Obligations As of December 31, 2024, the Company had the following contractual obligations.
Contractual Obligations As of December 31, 2025, the Company had no outstanding long-term contractual obligations. 37
Net cash provided by financing activities for 2024 was approximately $10.0 million, compared to $15.4 million in 2023. Cash provided by financing activities in 2024 consisted primarily of proceeds from sale of Common Stock pursuant to a registered direct offering in June 2024.
Net cash provided by financing activities for 2025 and 2024 consisted of approximately $11.2 million and $10.0 million in proceeds from the sale of common stock, net of offering costs. In 2026, the Company will continue to be opportunistic and judicious in raising additional funds to support its operations and investments as it creates a sustainable organization.
Establishing a biometric root of trust for each user that is bound to their accounts, or provisioned devices, authID stops fraud at onboarding, eliminates password risks and costs, and provides the faster, more accurate and privacy preserving user identity experience demanded by operators of today’s digital ecosystems.
With our PrivacyKey™ solution, authID provides a highly accurate biometric authentication, while storing no biometric data. authID stops fraud at onboarding, blocks deepfakes, prevents account takeover, and eliminates password risks and costs, through the faster, frictionless, and most accurate user identity experience demanded by today’s digital ecosystem.
Removed
Through its easy-to-integrate, patented, biometric identity platform, authID quickly and accurately verifies a user’s identity, eliminating any assumption of ‘who’ is behind a device and preventing cybercriminals from taking over accounts. authID combines digital onboarding, biometric passwordless authentication and account recovery, with a fast, accurate, user-friendly experience – delivering identity verification in 700ms.
Added
Identity Exchange (IDX TM ) Platform authID’s Identity Exchange (IDX) is a next-generation platform purpose-built to allow authorized personnel to create or claim a central credential that can be leveraged across multiple subsidiaries of a large enterprise, simplifying and securing the management of workforce identities across distributed workforces that include employees, contractors, vendors, and other third parties.
Removed
PrivacyKey Privacy Preserving Biometrics authID’s PrivacyKey solution provides biometric authentication without the requirement to store any biometric or derivative of biometric data.
Added
IDX modernizes identity management with centrally-managed, biometric-bound, passwordless, interoperable and reusable credentials that stop phishing attacks, ensuring only verified users can access sensitive systems and data.
Removed
PrivacyKey verification and authentication is seamlessly delivered thru either a web or mobile applications with a response time of less than 700ms.
Added
IDX is the first enterprise platform built on the Accountable Digital Identity Association (ADI Association) specification, ensuring it is aligned with global interoperability and data sovereignty standards as well as privacy regulations. authID Mandate- Agentic AI Security Framework authID Mandate is a framework for biometrically binding human sponsors to the AI agents they launched, ensuring that agentic activity is governed by the user’s own scope, while also providing an immutable audit trail of that sponsorship.
Removed
Discontinued Operations On May 4, 2022, the Board of Directors of authID (the “Board” or the “Board of Directors”) approved a plan to exit from certain non-core activities comprising the MultiPay correspondent bank payments services in Colombia and the Cards Plus cards manufacturing and printing business in South Africa (“Cards Plus business”).
Added
This provides a level of governance far beyond machine IDs or vulnerable tokens that are otherwise the basis for most agentic deployment of auditability. Key Customer Benefits Our solution allows our enterprise customers to: ● Verify and Authenticate users.
Removed
On August 29, 2022 the Company executed and completed the sale of the Cards Plus business. On June 30, 2023, the Company completed the sale of its legacy payments software by MultiPay.
Added
On September 26, 2025, the Company signed another amendment with TPG to reduce the monthly fees to $42,000. The amendment is effective October 1, 2025. On September 30, 2025, the Company entered into a services agreement with TPG.
Removed
MultiPay S.A.S., and IDGS S.A.S. operations, together with those of Cards Plus Pty Ltd., are presented as discontinued operations in the Consolidated Statements of Operations during the year ended December 31, 2023, as they met the criteria for discontinued operations under applicable accounting guidance.
Added
The agreement provides that the Company will provide biometric authentication services to TPG for an initial term of two years, with an annual license fee of $2,500 and monthly minimum fees ramping to $1,000 per month.
Removed
If we are successful in these efforts, we would expect our revenue to continue to grow. 29 Going Concern The Company’s consolidated financial statements included in this Annual Report have been prepared in accordance with U.S.
Added
These concessions are treated as variable consideration and are included in the transaction price only to the extent that it is probable that a significant reversal of cumulative revenue will not occur when the uncertainty is resolved.
Removed
As discussed in “Liquidity and Capital Resources” below, the Company secured additional financing during 2024 which provides funding for its current operations as it continues to invest in its product, people, and technology. The Company projects that the investments will lead to revenue expansion, thereby reducing liquidity needs.
Added
A reconciliation of this non-GAAP measure is included below.
Removed
However, in order to further implement its business plan and satisfy its working capital requirements, the Company will need to raise additional capital. There is no guarantee that the Company will be able to raise additional equity or debt financing at acceptable terms, if at all. There is no assurance that the Company will ever be profitable.
Added
Management believes that Adjusted EBITDA, when viewed with our results under GAAP and the accompanying reconciliations, provides useful information about our period-over-period results.
Removed
These services and their contracted pricing has been evaluated by Management based on historical experience with similar providers and determined to be priced at fair market rates.
Added
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for, analysis of our results as reported under GAAP.
Removed
The foregoing is only a summary of the material terms of the agreements entered with TPG and does not purport to be a complete description of the rights and obligations of the parties thereunder.
Added
Revenue increased as we acquired and went live with new customers. During the year ended December 31, 2025, the Company recorded approximately $0.9 million in estimated concessions related to two customer contracts, one of which included an annual minimum usage fee payable on December 31, 2025.
Removed
Stephen Garchik, which are summarized in the following paragraphs. Mr. Garchik is now a holder of more than 10% of the issued and outstanding common stock of the Company. Mr.
Added
The customers’ usage declined unexpectedly and remained significantly below the minimum commitment, despite consistent communication from the customers that their usage would increase.

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