Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 14, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-15465 | |
Entity Registrant Name | Intellicheck, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 11-3234779 | |
Entity Address, Address Line One | 200 Broadhollow Road | |
Entity Address, Address Line Two | Suite 207 | |
Entity Address, City or Town | Melville | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11747 | |
City Area Code | (516) | |
Local Phone Number | 992-1900 | |
Title of 12(b) Security | Common stock, $0.001 par value per share | |
Trading Symbol | IDN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 19,354,335 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001040896 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 3,962 | $ 5,196 |
Short-term investments | 4,948 | 4,880 |
Accounts receivable, net of allowance of $43 and $20 at September 30, 2023 and December 31, 2022, respectively | 3,898 | 2,637 |
Other current assets | 577 | 608 |
Total current assets | 13,385 | 13,321 |
PROPERTY AND EQUIPMENT, NET | 686 | 749 |
GOODWILL | 8,102 | 8,102 |
INTANGIBLE ASSETS, NET | 194 | 273 |
OTHER ASSETS | 9 | 8 |
Total assets | 22,376 | 22,453 |
CURRENT LIABILITIES: | ||
Accounts payable | 572 | 358 |
Accrued expenses | 2,350 | 2,319 |
Income taxes payable | 0 | 90 |
Equity awards liability | 40 | 54 |
Liability for shares withheld | 190 | 221 |
Deferred revenue, current portion | 2,153 | 906 |
Total current liabilities | 5,305 | 3,948 |
OTHER LIABILITIES: | ||
Deferred revenue, long-term portion | 0 | 1 |
Total liabilities | 5,305 | 3,949 |
COMMITMENTS AND CONTINGENCIES (Note 10) | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock - $0.01 par value; 30,000 shares authorized; Series A Convertible preferred stock, zero shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 0 | 0 |
Common stock - $.001 par value; 40,000,000 shares authorized; 19,299,547 and 18,957,366 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 19 | 19 |
Additional paid-in capital | 150,537 | 149,233 |
Accumulated deficit | (133,485) | (130,748) |
Total stockholders’ equity | 17,071 | 18,504 |
Total liabilities and stockholders’ equity | $ 22,376 | $ 22,453 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 43 | $ 20 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 30,000 | 30,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 19,299,547 | 18,957,366 |
Common stock, shares outstanding (in shares) | 19,299,547 | 18,957,366 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
REVENUES | $ 4,760 | $ 4,012 | $ 13,730 | $ 11,415 |
COST OF REVENUES | (428) | (358) | (1,112) | (1,038) |
Gross profit | 4,332 | 3,654 | 12,618 | 10,377 |
OPERATING EXPENSES | ||||
Selling, general and administrative | 3,597 | 2,917 | 11,382 | 8,985 |
Research and development | 1,550 | 1,461 | 4,134 | 4,682 |
Total operating expenses | 5,147 | 4,378 | 15,516 | 13,667 |
Loss from operations | (815) | (724) | (2,898) | (3,290) |
OTHER INCOME | ||||
Interest and other income | 179 | 0 | 181 | 0 |
Total other income | 179 | 0 | 181 | 0 |
Net loss before provision for income taxes | (636) | (724) | (2,717) | (3,290) |
Income tax expense | 8 | 0 | 20 | 0 |
Net loss | $ (644) | $ (724) | $ (2,737) | $ (3,290) |
Loss per common share - | ||||
Basic (in dollars per share) | $ (0.03) | $ (0.04) | $ (0.14) | $ (0.17) |
Diluted (in dollars per share) | $ (0.03) | $ (0.04) | $ (0.14) | $ (0.17) |
Weighted average common shares used in computing per share amounts - | ||||
Basic (in shares) | 19,278,295 | 18,918,596 | 19,209,620 | 18,802,892 |
Diluted (in shares) | 19,278,295 | 18,918,596 | 19,209,620 | 18,802,892 |
CONDENSED STATEMENTS OF STOCKHO
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 18,660,369 | |||
Beginning balance at Dec. 31, 2021 | $ 19,577 | $ 19 | $ 146,455 | $ (126,897) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation | 2,045 | 2,045 | ||
Issuance of shares for vested restricted stock grants (in shares) | 270,143 | |||
Net loss | (3,290) | (3,290) | ||
Ending balance (in shares) at Sep. 30, 2022 | 18,930,512 | |||
Ending balance at Sep. 30, 2022 | 18,332 | $ 19 | 148,500 | (130,187) |
Beginning balance (in shares) at Jun. 30, 2022 | 18,875,580 | |||
Beginning balance at Jun. 30, 2022 | 18,360 | $ 19 | 147,804 | (129,463) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation | 696 | 696 | ||
Issuance of shares for vested restricted stock grants (in shares) | 54,932 | |||
Net loss | (724) | (724) | ||
Ending balance (in shares) at Sep. 30, 2022 | 18,930,512 | |||
Ending balance at Sep. 30, 2022 | 18,332 | $ 19 | 148,500 | (130,187) |
Beginning balance (in shares) at Dec. 31, 2022 | 18,957,366 | |||
Beginning balance at Dec. 31, 2022 | 18,504 | $ 19 | 149,233 | (130,748) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation | 1,361 | 1,361 | ||
Issuance of common stock for vested restricted stock units and earned performance stock units (in shares) | 366,901 | |||
Shares forfeited in exchange for withholding taxes (in shares) | (24,720) | |||
Shares forfeited in exchange for withholding taxes | (57) | (57) | ||
Net loss | (2,737) | (2,737) | ||
Ending balance (in shares) at Sep. 30, 2023 | 19,299,547 | |||
Ending balance at Sep. 30, 2023 | 17,071 | $ 19 | 150,537 | (133,485) |
Beginning balance (in shares) at Jun. 30, 2023 | 19,251,920 | |||
Beginning balance at Jun. 30, 2023 | 17,337 | $ 19 | 150,159 | (132,841) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation | 381 | 381 | ||
Issuance of shares for vested restricted stock grants (in shares) | 47,627 | |||
Shares forfeited in exchange for withholding taxes | (3) | (3) | ||
Net loss | (644) | (644) | ||
Ending balance (in shares) at Sep. 30, 2023 | 19,299,547 | |||
Ending balance at Sep. 30, 2023 | $ 17,071 | $ 19 | $ 150,537 | $ (133,485) |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (2,737) | $ (3,290) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 210 | 209 |
Stock-based compensation | 1,347 | 1,768 |
Allowance for credit losses | 23 | 6 |
Change in accrued interest and accretion of discount on short-term investments | (154) | 0 |
Changes in assets and liabilities: | ||
(Increase) in accounts receivable | (1,284) | (449) |
(Increase) decrease in other current assets and long-term assets | 31 | 176 |
(Decrease) in accounts payable and accrued expenses | 204 | (588) |
Increase in deferred revenue | 1,246 | 457 |
Net cash used in operating activities | (1,114) | (1,711) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (68) | (165) |
Proceeds from maturity of short-term investments | 5,000 | 0 |
Purchases of short-term investments | (4,914) | 0 |
Net cash provided by (used in) investing activities | 18 | (165) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds of insurance financing arrangement | 49 | 0 |
Withholding taxes paid on RSU vesting | (54) | 0 |
Repayment of insurance financing arrangements | (133) | 0 |
Net cash used in financing activities | (138) | 0 |
Net decrease in cash | (1,234) | (1,876) |
CASH, beginning of period | 5,196 | 13,651 |
CASH, end of period | 3,962 | 11,775 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 2 | 0 |
Cash paid for income taxes | $ 78 | $ 0 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS | NATURE OF BUSINESS Business Intellicheck, Inc. (the “Company” or “Intellicheck”) is a prominent technology company engaged in developing, integrating and marketing identity verification solutions to address challenges that include commercial retail and banking fraud prevention. Intellicheck’s products include solutions for preventing identity fraud across any industry delivered via smartphone, tablet, POS integration or other electronic devices. Intellicheck continues to develop and release innovative products based upon its rich patent portfolio consisting of ten (10) U.S. and one Canadian patents. Liquidity For the nine months ended September 30, 2023, the Company incurred a net loss of $(2,737) and used cash in operations of $(1,114). As of September 30, 2023, the Company had cash and cash equivalents of $3,962, short-term investments of $4,948, working capital (defined as current assets minus current liabilities) of $8,080 and an accumulated deficit of $(133,485). Based on the Company’s business plan and cash resources, Intellicheck expects its existing and future resources and revenues generated from operations to satisfy its working capital requirements for at least the next 12 months from the date of filing. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments necessary for a fair presentation of the Company’s financial position at September 30, 2023, the results of operations, and stockholders’ equity for the three and nine-months ended September 30, 2023 and 2022 and cash flows for the nine months ended September 30, 2023 and 2022. All such adjustments are of a normal and recurring nature. Interim financial statements are prepared on a basis consistent with the Company’s annual financial statements. Results of operations for the three and nine-month periods ended September 30, 2023, are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2023. The balance sheet as of December 31, 2022 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements. References in this Quarterly Report on Form 10-Q to “authoritative guidance” is to the Accounting Standards Codification ("ASC") issued by the Financial Accounting Standards Board (“FASB”). An adjustment has been made to the Consolidated Balance Sheet and Consolidated Statements of Cash Flows for fiscal year ended October 31, 2019, to reclassify the Value Added Tax (VAT) receivable. For further information, refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") to measure credit losses on financial instruments, including trade receivables. The guidance eliminates the probable initial recognition threshold that was previously required prior to recognizing a credit loss on financial instruments. The credit loss estimate can now reflect an entity’s current estimate of all future expected credit losses. Under the previous guidance, an entity only considered past events and current conditions. The guidance is effective for smaller reporting companies for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of certain amendments of this guidance must be applied on a modified retrospective basis and the adoption of the remaining amendments must be applied on a prospective basis. The Company concluded that the adoption of this standard, on January 1, 2023, did not have a material impact on its financial statements because of the short-term nature of its outstanding accounts receivable and there have been no significant forward-looking economic conditions identified by the Company that would impact its short-term investments. Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s financial statements and accompanying notes. Significant estimates and assumptions that affect amounts reported in the financial statements include impairment consideration and valuation of goodwill and intangible assets, deferred tax valuation allowances, allowance for credit losses, revenue recognition (including breakage revenue) and the fair value of stock options under the Company’s stock-based compensation plan. Due to the inherent uncertainties involved in making estimates, actual results reported in future periods may be different from those estimates. Research and Development Research and development expenses are expensed as incurred and consist primarily of employee-related expenses (such as salaries, taxes, benefits and stock-based compensation), allocated overhead costs and outside services costs related to the development and improvement of the Company's SaaS applications. Allowance for Credit Losses Effective January 1, 2023 Intellicheck applied the new standard ASU 2016-13, codified as ASC 326. This impacts how the allowance for doubtful accounts is calculated. Prior to ASC-326, Intellicheck would not recognize bad debt expense until the loss from customer non-payment was probable of occurring. Under the new model, Intellicheck’s allowance for doubtful accounts reflects the Company’s estimate of all expected future losses from its current customer balances. Under the new guidance, the Company has applied a loss rate method which takes historical data as the basis for calculating the allowance amount, along with accounting for other factors like current and forecasted market conditions, and potential future impacts to the industry. In estimating whether accounts receivable will be collected, the Company performs evaluations of customers and continuously monitors collections and payments and estimates an allowance for credit losses based on collections experience to date and any specific collection issues that have been identified. The allowance for credit losses is recorded in the period in which revenue is recorded or when collection risk is identified. Cash and Cash Equivalents We classify time deposits and other investments that are highly liquid and have maturities of three months or less at the date of purchase as cash equivalents. Our cash and cash equivalents consist primarily of both cash on deposits with banks, which are maintained with major financial institutions in the United States, and money market funds. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000, however amounts may exceed FDIC insured limits. Short-term investments Short-term investments include investments in U.S. treasury notes. Debt investments with original maturities at the date of purchase greater than approximately three months but less than a year are classified as short-term investments, as they represent the investment of cash available for current operations. All short-term investments that the Company holds are classified as "held-to-maturity". See Note 3 for more detail and a breakdown of the Company's short-term investments. Property and Equipment Property and equipment are recorded at cost and are depreciated over their estimated useful lives ranging from three Goodwill Goodwill represents the excess of purchase price over the fair value of net assets acquired in business combinations. Pursuant to ASC 350, Intangibles - Goodwill and Other , the Company tests goodwill for impairment on an annual basis in the fourth quarter on December 31st, or between annual tests, in certain circumstances. Under authoritative guidance, the Company first assesses qualitative factors to determine whether it is necessary to perform step one of the quantitative goodwill impairment test. An entity is not required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. Events or changes in circumstances which could trigger an impairment review include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, other entity specific events and sustained decreases in share price. The Company performed its annual impairment test of goodwill in the fourth quarter for the year ended December 31, 2022. For the nine months ended September 30, 2023 and 2022, the Company determined no triggering events existed and as such no impairment charge was required. Intangible Assets Intangible assets include patents, copyrights, and developed technology. The Company amortizes these assets on a straight-line basis over their estimated useful lives, as it represents the pattern of economic benefits consumed. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be fully recoverable in accordance with ASC 360, Property, Plant and Equipment . To determine recoverability of its long-lived assets, the Company evaluates the probability that future undiscounted net cash flows will be less than the carrying amount of the assets. There were no impairment charges recognized during the three and nine-months ended September 30, 2023 and 2022. Advertising Costs Advertising costs, which are expensed as incurred, were $470 and $545 for the nine months ended September 30, 2023 and 2022, respectively. Advertising costs were $99 and $155 for the three months ended September 30, 2023 and 2022, respectively. These costs are recorded as a component of selling, general and administrative expenses within the Statements of Operations. Retirement Plan The Company has a retirement savings 401(k) plan ("Retirement Plan"). The Retirement Plan permits eligible employees to make voluntary contributions to a trust, up to a maximum of 35% of compensation, subject to certain limitations. The Company has elected to contribute a matching contribution equal to 50% of the first 6% of an eligible employee’s deferral election. The Company’s matching contributions were $85 and $90 for the nine months ended September 30, 2023 and 2022, respectively. The Company’s matching contributions were $31 and $30 for the three months ended September 30, 2023 and 2022, respectively. These costs were recorded as a component of selling, general and administrative expenses within the Statements of Operations. Shipping Costs The Company’s shipping and handling costs related to sales are included in cost of revenues for all periods presented. All other shipping and handling costs are included as a component of selling, general and administrative expenses within the Statements of Operations. Income Taxes The Company accounts for income taxes in accordance with ASC 740, “ Income Taxes .” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The Company has recorded a full valuation allowance for its net deferred tax assets as of September 30, 2023 and December 31, 2022, as it is more likely than not these assets may not be fully realized due to the uncertainty of the realizability of those assets. Fair Value of Financial Instruments The Company adheres to the provisions of ASC 820, “ Fair Value Measurement ” which requires the Company to calculate the fair value of financial instruments and include this additional information in the notes to financial statements when the fair value of those financial instruments is different than the book value. The Company’s financial instruments include cash and cash equivalents, short-term investments, accounts receivable, other current assets, accounts payable and accrued expenses. At September 30, 2023 and December 31, 2022, the carrying value of the Company’s financial instruments approximated fair value, due to their short-term nature. FASB guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: • Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities. The Company's Level 1 assets consisted primarily of cash and cash equivalents as well as short-term investments totaling $8.9 and $10.1 million as of September 30, 2023 and December 31, 2022 respectively. • Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active). Level 2 includes financial instruments that are valued using models or other valuation methodologies. The Company had $40 and $54 of Level 2 liabilities as of September 30, 2023 and December 31, 2022 respectively, for the liability-classified stock options. The fair value of these awards were determined by utilizing a Black-Scholes option pricing model. • Level 3—Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when the fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The Company had no Level 3 assets or liabilities as of September 30, 2023 and December 31, 2022. Revenue Recognition and Deferred Revenue General Most license fees and services revenue are generated from a combination of fixed-price and per-scan contracts. Under the per-scan revenue model, customers are charged a fee each time the customer scans an identity document, such as a driver’s license, with the Company’s software. Under the fixed-price revenue model customers are charged a fixed monthly fee either per device or physical business location to access the Company’s software. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company measures revenue based on the consideration specified in a customer arrangement, and revenue is recognized when the performance obligations in an arrangement are satisfied. A performance obligation is a promise in a contract to transfer a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as, the customer receives the benefit of the performance obligation. Customers typically receive the benefit of the Company’s services as they are performed. Substantially all customer contracts provide that the Company is compensated for services performed to date. The Company has adopted an additional revenue model where customers purchase a predetermined number of transactions for the term of the contract. Revenue for these transactions is recognized on a per transaction basis. The Company estimates the amount of unused transactions at the end of each contract period and recognizes a portion of that revenue as breakage revenue each reporting period. If the Company expects the customer to use all transactions in the specified service period, the Company will recognize the transaction price as revenue in the specified service period as the promised units of service are transferred to the customer. Alternatively, if the Company expects that the customer cannot or will not use all transactions in the specified service period (referred to as “breakage”), the Company will recognize the estimated breakage amount as revenue ratably over the service period in proportion to the revenue that the Company will recognize for actual transactions used by the customer in the service period. Actual results could differ from estimates and as such differences may be material to the financial statements. Invoicing is based on schedules established in customer contracts. Payment terms are generally established from 30 to 60 days from the invoice date. Product returns are estimated and recorded as a reduction to revenue, however, such amounts have been immaterial. Nature of goods and services The following is a description of the products and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each: Software as a Service (SaaS) Software as a service (SaaS) for hosted subscription services requires the Company to provide a stand-ready obligation and allows customers to access a set of data for a predetermined period of time. As the customer obtains access at a point in time but continues to have access for the remainder of the subscription period, the customer is considered to simultaneously receive and consume the benefits provided by the entity’s performance as the entity performs. Accordingly, the revenue should be recognized over time, under the fixed pricing model, based on the usage of the hosted subscription services, which can vary from month to month. Under the per-scan revenue model, the customer requires access to the Company's hosted subscription service but revenue is recognized each time the customer scans an identity document. Equipment Revenue Revenue from the sale of equipment is recognized at a point in time. The point in time that the revenue is recognized is when the customer has control of the equipment which is when the customer receives the benefit and the Company’s performance obligation has been satisfied. Depending on the contract terms, that could either be at the time the equipment is shipped or at the time the equipment is received. When sales of equipment occur, we recognize shipping and handling costs with the sales of equipment that are recognized as revenue. Other Revenue Other Revenues, which historically have not been material, consist primarily of revenues from other subscription and support services, and extended warranties. The Company’s revenues from other subscription and support services includes jurisdictional updates to certain commercial customers and support services particularly to its Defense ID® customers. These subscriptions require continuing service or post contractual customer support and performance. As the customer obtains access at a point in time but continues to have access for the remainder of the subscription period, the customer is considered to simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs. Accordingly, the revenue should be recognized over time based on usage, which can vary from month to month. The revenue is typically based on a formula such as number of locations in a given month multiplied by a fee per location. Extended warranty revenues are generated when a warranty is provided to the customer separately of other performance obligations when the equipment is sold. As the customer obtains access at a point in time and continues to have access for the remainder of the warranty term, the customer is considered to simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs. The related revenue is recognized ratably over the specified term of the warranty period. The extended warranty is separate to the Company’s standard warranty of usually one year that it receives from its vendor. Disaggregation of revenue In the following tables, revenue is disaggregated by product and service and the timing of revenue recognition. For the Three Months Ended September 30, 2023 2022 Products and services Software as a Service (SaaS) $ 4,635 $ 3,970 Equipment 106 39 Other 19 3 $ 4,760 $ 4,012 Timing of revenue recognition Products transferred at a point in time $ 125 $ 42 Services transferred over time 4,635 3,970 $ 4,760 $ 4,012 For the Nine Months Ended September 30, 2023 2022 Products and services Software as a Service (SaaS) $ 13,526 $ 11,249 Equipment 152 155 Other 52 11 $ 13,730 $ 11,415 Timing of revenue recognition Products transferred at a point in time $ 204 $ 166 Services transferred over time 13,526 11,249 $ 13,730 $ 11,415 Contract balances The current portion of deferred revenue at September 30, 2023, December 31, 2022 and December 31, 2021 was $2,153, $906 and $1,266, respectively, and primarily consists of revenue recognized over time for software license contracts and hosted subscription services. The changes in these balances are related to purchases of a predetermined number of transactions, partially offset by the satisfaction or partial satisfaction of these contracts. Of the December 31, 2022 balance, $224 and $816 were recognized as revenue in the three and nine months ended September 30, 2023, respectively. The noncurrent deferred revenue balances were $0, $1 and $8 as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively. Accounts Receivable Accounts Receivable, net of allowance for doubtful accounts, at September 30, 2023, December 31, 2022 and December 31, 2021 was $3,898, $2,637, and $2,192, respectively. The allowance for doubtful accounts at September 30, 2023, December 31, 2022 and December 31, 2021 was $43, $20 and $3, respectively. Transaction price allocated to the remaining performance obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period: Remainder 2024 2025 Total Software as a Service (SaaS) $ 427 $ 1,721 $ — $ 2,148 Other 5 — — 5 $ 432 $ 1,721 $ — $ 2,153 All consideration from contracts with customers is included in the amounts presented above. Business Concentrations and Credit Risk Financial instruments, which subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company maintains cash with two financial institutions. The Company performs periodic evaluations of the relative credit standing of these institutions. The Company’s sales are principally made to large retail customers, financial institutions concentrated in the United States of America and to U.S. government entities. The Company performs ongoing credit evaluations, generally does not require collateral, and establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of customers, historical trends, and other market and economic information. During the nine-month period ended September 30, 2023, the Company made sales to three customers that accounted for approximately 49% of total revenues, 21%, 14% and 14%, respectively. The revenue was primarily associated with commercial identity sales customers. These three customers, in addition with one other customer, represented 58% of total accounts receivable at September 30, 2023, 38%, 3%, 5%, and 12% respectively. During the nine-month period ended September 30, 2022, the Company made sales to three customers that accounted for approximately 52% of total revenues, 22%, 17% and 13%, respectively. These three customers, in addition with two other customers, represented 70% of total accounts receivable at September 30, 2022, 32%, 7%, 1%, 11% and 19%, respectively. The revenue on those five customers was also associated with commercial identity sales customers. Net Loss Per Share Basic net loss per share is computed by dividing the net loss for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss for the period by the weighted average number of shares of common stock and potentially dilutive common stock equivalents outstanding during the period. The dilutive effect of outstanding options, warrants, and restricted stock is reflected in diluted earnings per share by application of the treasury stock method. The calculation of diluted net loss per share excludes all anti-dilutive shares. In periods of a net loss, all common stock equivalents are considered anti-dilutive. Three Months Ended Nine Months Ended 2023 2022 2023 2022 Numerator: Net Loss $ (644) $ (724) $ (2,737) $ (3,290) Denominator: Weighted average common shares – Basic/Diluted 19,278,295 18,918,596 19,209,620 18,802,892 Net Loss per share – Basic/Diluted $ (0.03) $ (0.04) $ (0.14) $ (0.17) The following table summarizes the common stock equivalents excluded from loss per diluted share because their effect would be anti-dilutive: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Stock options 1,230,905 1,164,676 1,230,905 1,164,676 Restricted stock 73,182 203,492 73,182 203,492 Performance stock units — 177,688 — 177,688 1,304,087 1,545,856 1,304,087 1,545,856 Reclassification of Prior Year Presentation Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on net earnings. An adjustment has been made to the Condensed Statements of Cash Flows to reclassify the allowance for credit losses. This change in classification does not affect previously reported cash flows from operating activities in the Condensed Statements of Cash Flows. |
CASH EQUIVALENTS AND SHORT-TERM
CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS Short-term investments include investments in U.S. treasury notes. Short-term investments with original maturities of approximately three months or less from the date of purchase are classified within cash and cash equivalents. Debt investments with original maturities at the date of purchase greater than approximately three months but less than one year are classified as short-term investments, as they represent the investment of cash available for current operations. All short-term investments that the company holds are classified as "held-to-maturity". The Company has accounted for and disclosed the purchase of its short-term investments in accordance with ASC 320 ( "Investments - Debt Securities "). The following table summarizes the fair value of cash and cash equivalents, and short-term investments as well as any gross unrealized holding gains and losses as of September 30, 2023. Due to the nature of these assets and the short-term nature of the U.S. treasury notes being held to maturity, both these cash and cash equivalents and short-term investments fall under the Level 1 fair value hierarchy as referenced in Note 2. As of September 30, 2023 Amortized cost Gross unrealized holding gains Gross unrealized holding losses Estimated fair value Cash and cash equivalents $ 3,962 $ — $ — $ 3,962 U.S. treasury notes (1) 4,948 — (5) 4,943 Total cash, cash equivalents and short-term investments $ 8,910 $ — $ (5) $ 8,905 (1) These U.S. treasury notes are classified as "held-to-maturity" as they were purchased in August 2023 and mature in December 2023. Since these securities are intended to be held until maturity and mature in less than a year from their purchase date, any unrealized gains or losses are not realized until their maturity date and the amortized cost of these securities can be found on this Form 10-Q's balance sheet under Current Assets - "Short-term investments". Any coupon payments from these short-term investments fall under "Interest and other (expense) income" within the Company's Statement of Operations. The Company did not hold any securities that were in an unrealized loss position for more than 12 months as of September 30, 2023 and 2022. There were no material realized gains or losses on these specific short-term investments during the quarters ended September 30, 2023 and September 30, 2022. The Company recognized $120 in realized gains on short-term investments that matured within the quarter during the quarter ended September 30, 2023. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment is summarized as follows: September 30, December 31, Computer equipment and software $ 1,865 $ 1,796 Furniture and fixtures 139 139 Office equipment 614 614 2,618 2,549 Less – Accumulated depreciation (1,932) (1,800) $ 686 $ 749 Depreciation expense for the nine months ended September 30, 2023 and 2022 amounted to $131 respectively. Depreciation expense for the three months ended September 30, 2023 and 2022 amounted to $45 and $44, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS The changes in the carrying amount of intangible assets for the nine months ended September 30, 2023 were as follows: Net balance at December 31, 2022 $ 273 Deduction: Amortization expense (79) Net balance at September 30, 2023 $ 194 The following tables set forth the components of intangible assets as of September 30, 2023 and December 31, 2022: As of September 30, 2023 Estimated Adjusted Accumulated Net Patents and copyrights 2-17 years $ 375 $ (294) $ 81 Developed technology 5 years 400 (287) 113 $ 775 $ (581) $ 194 As of December 31, 2022 Estimated Adjusted Accumulated Net Patents and copyrights 2-17 years $ 375 $ (275) $ 100 Developed technology 5 years 400 (227) 173 $ 775 $ (502) $ 273 The following summarizes amortization of intangible assets included in the accompanying statements of operations: Three Months Ended For the Nine Months Ended September 30, 2023 2022 2023 2022 Cost of sales $ 24 $ 23 $ 71 $ 71 General and administrative 3 3 8 8 $ 27 $ 26 $ 79 $ 79 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Revolving Line of Credit On February 6, 2019, the Company entered into a revolving credit facility with Citi Personal Wealth Management that allows for borrowings up to the lesser of (i) $2,000 or (ii) the collateralized balance in the Company’s existing fixed income investment account with Citi Personal Wealth Management subject to certain limitations. The facility bears interest at a rate consistent with Citi Personal Wealth Management’s Base Rate (8.50% and 7.50% at September 30, 2023 and December 31, 2022, respectively) minus 2%. Interest is payable monthly and as of September 30, 2023 and December 31, 2022, there were no amounts outstanding and unused availability under this facility was $2,000. The Company is not subject to any financial covenants related to this revolving line of credit. This line will remain open as long as the Company keeps a depository relationship with the financial institution. Insurance Financing Arrangement |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses are comprised of the following: September 30, December 31, Professional fees $ 110 $ 259 Payroll and related 1,536 1,040 Incentive bonuses 617 846 Other 87 174 $ 2,350 $ 2,319 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our available net operating loss (“NOL”) as of December 31, 2022 was approximately $20.8 million, of which $10.9 million expires between 2035 and 2037. In accordance with the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), U.S. NOLs arising in a tax year ending after 2017 will not expire. ASC 740 requires evaluation of uncertain tax positions and as of September 30, 2023, the Company has no material uncertain tax positions. The Company’s interim income tax provision consists of U.S. federal and state income taxes based on the estimated annual effective tax rate that the Company expects for the full year together with the tax effect of discrete items. Each quarter the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as necessary. As of September 30, 2023, the Company was in a pre-tax loss position, and is anticipated to remain so throughout the year. The effective tax rate for the three and nine months ended September 30, 2023 is different from the tax benefit that would result from applying the statutory tax rates primarily due to the recognition of valuation allowances. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Stock-based Compensation To retain and attract qualified personnel necessary for the success of the Company, the Company adopted the 2015 Omnibus Incentive Plan (the “Plan”) covering up to 5,236,000 of the Company’s common shares, pursuant to which officers, directors, key employees and consultants to the Company are eligible to receive incentive stock options, nonqualified stock options and restricted stock units. All the equity compensation plans prior to Company’s 2015 Omnibus Incentive Plan have been closed. The Compensation Committee of the Board of Directors administers this Plan and determines the terms and conditions of stock options granted, including the exercise price. This Plan generally provides that all stock options will expire within ten years of the date of grant. Incentive stock options granted under this Plan must be granted at an exercise price that is not less than the fair market value per share at the date of the grant and the exercise price must not be less than 110% of the fair market value per share at the date of the grant for grants to persons owning more than 10% of the voting stock of the Company. This Plan also entitles non-employee directors to receive grants of non-qualified stock options as approved by the Board of Directors. The Company accounts for the issuance of stock-based awards to employees in accordance with ASC Topic 718, "Compensation - Stock Compensation" , which requires that the cost resulting from all stock-based compensation payment transactions be recognized in the financial statements. This pronouncement establishes fair value as the measurement objective in accounting for stock-based compensation payment arrangements and requires all companies to apply a fair value based measurement method in accounting for all stock-based compensation payment transactions with employees. All stock-based compensation is included in operating expenses as follows: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Compensation cost recognized: Selling, general & administrative $ 301 $ 561 $ 1,125 $ 1,270 Research & development 41 168 222 498 $ 342 $ 729 $ 1,347 $ 1,768 Stock Options The Company uses the Black-Scholes option pricing model to value the options on the grant date. The table below presents the weighted average expected life of the stock options in years. The Company uses the simplified method for all restricted stock units and stock options to estimate the expected life of the option and assumes that stock options will be exercised evenly over the period from vesting until the awards expire. Volatility is determined using changes in historical stock prices. The interest rate for periods within the expected life of the award is based on U.S. Treasury yield curve in effect on the grant date. Options, generally, vest from one year to four years. The compensation expense is recognized over the requisite service period on a straight-line basis, reduced by forfeitures as they occur. Certain option awards are classified as liability awards. The fair value of these awards are determined at each reporting period utilizing a Black-Scholes option pricing model, and the associated compensation expense (credit) for the reporting period is recorded. The Company decreased stock-based compensation expense by approximately $(39) and decreased by approximately $(14) for the three and nine-months ended September 30, 2023, respectively, as a result of the change in fair value of these awards. The Company increased and decreased stock-based compensation expense by approximately $33 and $(277) for the three and nine-months ended September 30, 2022, respectively, as a result of the change in fair value of these awards. Stock option activity under the 2015 Plan during the period indicated below is as follows: Number of Weighted- Weighted- Aggregate Outstanding at December 31, 2022 1,120,244 $ 3.68 3.50 years $ 84 Granted 627,507 2.91 – – Forfeited, cancelled, or expired (516,846) 3.89 – – Outstanding at September 30, 2023 1,230,905 $ 2.33 3.08 years $ 135 Exercisable at September 30, 2023 593,494 $ 3.69 2.10 years $ 73 The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they all exercised their options on September 30, 2023. This amount changes based upon the fair market value of the Company’s stock. Restricted Stock Units The Company issues restricted stock units (“RSUs”) which are equity-based instruments that may be settled in shares of common stock of the Company. During the nine months ended September 30, 2023, the Company issued RSUs to certain directors as compensation. RSU agreements can vest immediately or with the passage of time. The vesting of all RSUs is contingent on continued board and employment services. The compensation expense incurred by the Company for RSUs is based on the closing market price of the Company’s common stock on the date of grant, is amortized on a straight-line basis over the requisite service period and charged to operating expenses with a corresponding increase to additional paid-in capital, reduced by forfeitures when they occur. Restricted stock unit activity during the period indicated below is as follows: Number of Weighted Outstanding at December 31, 2022 214,892 $ 8.43 Granted 207,306 2.43 Forfeited or surrendered (70,959) 10.04 Vested and settled in shares (278,057) 4.42 Outstanding at September 30, 2023 73,182 $ 5.11 Performance Stock Units On August 7, 2020, the Company issued 265,942 performance stock units (PSUs) to its officers and certain employees as compensation ("PSU Plan"). 50% of the PSUs were to vest based on the Company’s market price and 50% were to vest based on the Company’s Adjusted EBITDA. Both the conditions were to occur over a specified time frame and were contingent on continued employment services. On November 4, 2021, the Company amended its PSU Plan so that 100% of the PSUs vest based on the Company’s market price as the sole vesting criteria. As a result of this amendment, the Adjusted EBITDA performance metric is no longer a vesting criterion. The fair value of these awards with a market condition was estimated, at the date of grant, using the Monte Carlo Simulation model with compensation expense being determined on the closing market price of the Company’s common stock on the date of grant and is amortized ratably on a straight-line basis over the requisite service period. With the amendment mentioned above such that the Company's market price is the sole vesting criteria for these awards, compensation expense is charged to operating expenses with a corresponding increase to additional paid-in capital and is not reversed if the vesting criteria is not met. As of September 30, 2023, there were no outstanding PSUs. Number of Weighted Outstanding at December 31, 2022 177,688 $ 7.91 Forfeited (88,844) 7.91 Vested and settled in shares (88,844) 7.91 Outstanding at September 30, 2023 — $ 7.91 As of September 30, 2023, there was approximately $1,028 of total unrecognized compensation costs, related to all unvested stock options and RSUs. These costs are expected to be recognized as compensation expense over a weighted-average period of approximately 2.01 years. The Company had 1,175,031 shares available for future grants under the Company's equity compensation plans at September 30, 2023. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company is not aware of any infringement by the Company’s products or technology on the proprietary rights of others. The Company is not currently involved in any legal or regulatory proceeding, or arbitration, the outcome of which is expected to have a material effect on its business. As of September 30, 2023, we are reviewing our historical state sales and use tax liabilities. The Company is subject to sales and use taxes in jurisdictions where it has economic nexus. These reviews, in addition to our conversations with state taxing authorities, may lead to adjustments to the reporting of transactional taxes. We are currently assessing the outcomes that may result from these reviews, which may lead to adjustments to our taxes or net operating losses with respect to the years under review, as well as the current period. We may be subject to additional accruals for the expected outcome of these sales and use tax matters. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments necessary for a fair presentation of the Company’s financial position at September 30, 2023, the results of operations, and stockholders’ equity for the three and nine-months ended September 30, 2023 and 2022 and cash flows for the nine months ended September 30, 2023 and 2022. All such adjustments are of a normal and recurring nature. Interim financial statements are prepared on a basis consistent with the Company’s annual financial statements. Results of operations for the three and nine-month periods ended September 30, 2023, are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2023. The balance sheet as of December 31, 2022 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements. References in this Quarterly Report on Form 10-Q to “authoritative guidance” is to the Accounting Standards Codification ("ASC") issued by the Financial Accounting Standards Board (“FASB”). |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") to measure credit losses on financial instruments, including trade receivables. The guidance eliminates the probable initial recognition threshold that was |
Use of Estimates | Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s financial statements and accompanying notes. Significant estimates and assumptions that affect amounts reported in the financial statements include impairment consideration and valuation of goodwill and intangible assets, deferred tax valuation allowances, allowance for credit losses, revenue recognition (including breakage revenue) and the fair value of stock options under the Company’s stock-based compensation plan. Due to the inherent uncertainties involved in making estimates, actual results reported in future periods may be different from those estimates. |
Research and Development | Research and Development Research and development expenses are expensed as incurred and consist primarily of employee-related expenses (such as salaries, taxes, benefits and stock-based compensation), allocated overhead costs and outside services costs related to the development and improvement of the Company's SaaS applications. |
Allowance for Credit Losses | Allowance for Credit Losses Effective January 1, 2023 Intellicheck applied the new standard ASU 2016-13, codified as ASC 326. This impacts how the allowance for doubtful accounts is calculated. Prior to ASC-326, Intellicheck would not recognize bad debt expense until the loss from customer non-payment was probable of occurring. Under the new model, Intellicheck’s allowance for doubtful accounts reflects the Company’s estimate of all expected future losses from its current customer balances. Under the new guidance, the Company has applied a loss rate method which takes historical data as the basis for calculating the allowance amount, along with accounting for other factors like current and forecasted market conditions, and potential future impacts to the industry. In estimating whether accounts receivable will be collected, the Company performs evaluations of customers and continuously monitors collections and payments and estimates an allowance for credit losses based on collections experience to date and any specific collection issues that have been identified. The allowance for credit losses is recorded in the period in which revenue is recorded or when collection risk is identified. |
Cash and Cash Equivalents | Cash and Cash Equivalents We classify time deposits and other investments that are highly liquid and have maturities of three months or less at the date of purchase as cash equivalents. Our cash and cash equivalents consist primarily of both cash on deposits with banks, which are maintained with major financial institutions in the United States, and money market funds. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000, however amounts may exceed FDIC insured limits. |
Short-term investments | Short-term investmentsShort-term investments include investments in U.S. treasury notes. Debt investments with original maturities at the date of purchase greater than approximately three months but less than a year are classified as short-term investments, as they represent the investment of cash available for current operations. All short-term investments that the Company holds are classified as "held-to-maturity". |
Property and Equipment | Property and EquipmentProperty and equipment are recorded at cost and are depreciated over their estimated useful lives ranging from three |
Goodwill | Goodwill Goodwill represents the excess of purchase price over the fair value of net assets acquired in business combinations. Pursuant to ASC 350, Intangibles - Goodwill and Other , the Company tests goodwill for impairment on an annual basis in the fourth quarter on December 31st, or between annual tests, in certain circumstances. Under authoritative guidance, the Company first assesses qualitative factors to determine whether it is necessary to perform step one of the quantitative goodwill impairment test. An entity is not required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. Events or changes in circumstances which could trigger an impairment review include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, other entity specific events and sustained decreases in share price. |
Intangible Assets | Intangible Assets Intangible assets include patents, copyrights, and developed technology. The Company amortizes these assets on a straight-line basis over their estimated useful lives, as it represents the pattern of economic benefits consumed. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be fully recoverable in accordance with ASC 360, Property, Plant and Equipment |
Advertising Costs | Advertising Costs Advertising costs, which are expensed as incurred, were $470 and $545 for the nine months ended September 30, 2023 and 2022, respectively. Advertising costs were $99 and $155 for the three months ended September 30, 2023 and 2022, respectively. These costs are recorded as a component of selling, general and administrative expenses within the Statements of Operations. |
Retirement Plan | Retirement Plan The Company has a retirement savings 401(k) plan ("Retirement Plan"). The Retirement Plan permits eligible employees to make voluntary contributions to a trust, up to a maximum of 35% of compensation, subject to certain limitations. The Company has elected to contribute a matching contribution equal to 50% of the first 6% of an eligible employee’s deferral election. The Company’s matching contributions were $85 and $90 for the nine months ended September 30, 2023 and 2022, respectively. The Company’s matching contributions were $31 and $30 for the three months ended September 30, 2023 and 2022, respectively. These costs were recorded as a component of selling, general and administrative expenses within the Statements of Operations. |
Shipping Costs and Revenue Recognition and Deferred Revenue | Shipping Costs The Company’s shipping and handling costs related to sales are included in cost of revenues for all periods presented. All other shipping and handling costs are included as a component of selling, general and administrative expenses within the Statements of Operations. Revenue Recognition and Deferred Revenue General Most license fees and services revenue are generated from a combination of fixed-price and per-scan contracts. Under the per-scan revenue model, customers are charged a fee each time the customer scans an identity document, such as a driver’s license, with the Company’s software. Under the fixed-price revenue model customers are charged a fixed monthly fee either per device or physical business location to access the Company’s software. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company measures revenue based on the consideration specified in a customer arrangement, and revenue is recognized when the performance obligations in an arrangement are satisfied. A performance obligation is a promise in a contract to transfer a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as, the customer receives the benefit of the performance obligation. Customers typically receive the benefit of the Company’s services as they are performed. Substantially all customer contracts provide that the Company is compensated for services performed to date. The Company has adopted an additional revenue model where customers purchase a predetermined number of transactions for the term of the contract. Revenue for these transactions is recognized on a per transaction basis. The Company estimates the amount of unused transactions at the end of each contract period and recognizes a portion of that revenue as breakage revenue each reporting period. If the Company expects the customer to use all transactions in the specified service period, the Company will recognize the transaction price as revenue in the specified service period as the promised units of service are transferred to the customer. Alternatively, if the Company expects that the customer cannot or will not use all transactions in the specified service period (referred to as “breakage”), the Company will recognize the estimated breakage amount as revenue ratably over the service period in proportion to the revenue that the Company will recognize for actual transactions used by the customer in the service period. Actual results could differ from estimates and as such differences may be material to the financial statements. Invoicing is based on schedules established in customer contracts. Payment terms are generally established from 30 to 60 days from the invoice date. Product returns are estimated and recorded as a reduction to revenue, however, such amounts have been immaterial. Nature of goods and services The following is a description of the products and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each: Software as a Service (SaaS) Software as a service (SaaS) for hosted subscription services requires the Company to provide a stand-ready obligation and allows customers to access a set of data for a predetermined period of time. As the customer obtains access at a point in time but continues to have access for the remainder of the subscription period, the customer is considered to simultaneously receive and consume the benefits provided by the entity’s performance as the entity performs. Accordingly, the revenue should be recognized over time, under the fixed pricing model, based on the usage of the hosted subscription services, which can vary from month to month. Under the per-scan revenue model, the customer requires access to the Company's hosted subscription service but revenue is recognized each time the customer scans an identity document. Equipment Revenue Revenue from the sale of equipment is recognized at a point in time. The point in time that the revenue is recognized is when the customer has control of the equipment which is when the customer receives the benefit and the Company’s performance obligation has been satisfied. Depending on the contract terms, that could either be at the time the equipment is shipped or at the time the equipment is received. When sales of equipment occur, we recognize shipping and handling costs with the sales of equipment that are recognized as revenue. Other Revenue Other Revenues, which historically have not been material, consist primarily of revenues from other subscription and support services, and extended warranties. The Company’s revenues from other subscription and support services includes jurisdictional updates to certain commercial customers and support services particularly to its Defense ID® customers. These subscriptions require continuing service or post contractual customer support and performance. As the customer obtains access at a point in time but continues to have access for the remainder of the subscription period, the customer is considered to simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs. Accordingly, the revenue should be recognized over time based on usage, which can vary from month to month. The revenue is typically based on a formula such as number of locations in a given month multiplied by a fee per location. Extended warranty revenues are generated when a warranty is provided to the customer separately of other performance obligations when the equipment is sold. As the customer obtains access at a point in time and continues to have access for the remainder of the warranty term, the customer is considered to simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs. The related revenue is recognized ratably over the specified term of the warranty period. The extended warranty is separate to the Company’s standard warranty of usually one year that it receives from its vendor. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740, “ Income Taxes .” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company adheres to the provisions of ASC 820, “ Fair Value Measurement ” which requires the Company to calculate the fair value of financial instruments and include this additional information in the notes to financial statements when the fair value of those financial instruments is different than the book value. The Company’s financial instruments include cash and cash equivalents, short-term investments, accounts receivable, other current assets, accounts payable and accrued expenses. At September 30, 2023 and December 31, 2022, the carrying value of the Company’s financial instruments approximated fair value, due to their short-term nature. FASB guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: • Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities. The Company's Level 1 assets consisted primarily of cash and cash equivalents as well as short-term investments totaling $8.9 and $10.1 million as of September 30, 2023 and December 31, 2022 respectively. • Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active). Level 2 includes financial instruments that are valued using models or other valuation methodologies. The Company had $40 and $54 of Level 2 liabilities as of September 30, 2023 and December 31, 2022 respectively, for the liability-classified stock options. The fair value of these awards were determined by utilizing a Black-Scholes option pricing model. • Level 3—Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when the fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The Company had no Level 3 assets or liabilities as of September 30, 2023 and December 31, 2022. |
Business Concentrations and Credit Risk | Business Concentrations and Credit Risk Financial instruments, which subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company maintains cash with two financial institutions. The Company performs periodic evaluations of the relative credit standing of these institutions. The Company’s sales are principally made to large retail customers, financial institutions concentrated in the United States of America and to U.S. government entities. The Company performs ongoing credit evaluations, generally does not require collateral, and establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of customers, historical trends, and other market and economic information. During the nine-month period ended September 30, 2023, the Company made sales to three customers that accounted for approximately 49% of total revenues, 21%, 14% and 14%, respectively. The revenue was primarily associated with commercial identity sales customers. These three customers, in addition with one other customer, represented 58% of total accounts receivable at September 30, 2023, 38%, 3%, 5%, and 12% respectively. During the nine-month period ended September 30, 2022, the Company made sales to three customers that accounted for approximately 52% of total revenues, 22%, 17% and 13%, respectively. These three customers, in addition with two other customers, represented 70% of total accounts receivable at September 30, 2022, 32%, 7%, 1%, 11% and 19%, respectively. The revenue on those five customers was also associated with commercial identity sales customers. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by dividing the net loss for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss for the period by the weighted average number of shares of common stock and potentially dilutive common stock equivalents outstanding during the period. The dilutive effect of outstanding options, warrants, and restricted stock is reflected in diluted earnings |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Revenue Disaggregated by Product and Service and Timing of Revenue Recognition | In the following tables, revenue is disaggregated by product and service and the timing of revenue recognition. For the Three Months Ended September 30, 2023 2022 Products and services Software as a Service (SaaS) $ 4,635 $ 3,970 Equipment 106 39 Other 19 3 $ 4,760 $ 4,012 Timing of revenue recognition Products transferred at a point in time $ 125 $ 42 Services transferred over time 4,635 3,970 $ 4,760 $ 4,012 For the Nine Months Ended September 30, 2023 2022 Products and services Software as a Service (SaaS) $ 13,526 $ 11,249 Equipment 152 155 Other 52 11 $ 13,730 $ 11,415 Timing of revenue recognition Products transferred at a point in time $ 204 $ 166 Services transferred over time 13,526 11,249 $ 13,730 $ 11,415 |
Scheduled of Revenue Expected to be Recognized Related to Performance Obligations | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period: Remainder 2024 2025 Total Software as a Service (SaaS) $ 427 $ 1,721 $ — $ 2,148 Other 5 — — 5 $ 432 $ 1,721 $ — $ 2,153 |
Schedule of Basic and Diluted Earnings Per Share | Three Months Ended Nine Months Ended 2023 2022 2023 2022 Numerator: Net Loss $ (644) $ (724) $ (2,737) $ (3,290) Denominator: Weighted average common shares – Basic/Diluted 19,278,295 18,918,596 19,209,620 18,802,892 Net Loss per share – Basic/Diluted $ (0.03) $ (0.04) $ (0.14) $ (0.17) |
Summary of Common Stock Equivalents Excluded from Loss Per Diluted Share | The following table summarizes the common stock equivalents excluded from loss per diluted share because their effect would be anti-dilutive: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Stock options 1,230,905 1,164,676 1,230,905 1,164,676 Restricted stock 73,182 203,492 73,182 203,492 Performance stock units — 177,688 — 177,688 1,304,087 1,545,856 1,304,087 1,545,856 |
CASH EQUIVALENTS AND SHORT-TE_2
CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Cash and Cash Equivalents and Short-Term Investments | The following table summarizes the fair value of cash and cash equivalents, and short-term investments as well as any gross unrealized holding gains and losses as of September 30, 2023. Due to the nature of these assets and the short-term nature of the U.S. treasury notes being held to maturity, both these cash and cash equivalents and short-term investments fall under the Level 1 fair value hierarchy as referenced in Note 2. As of September 30, 2023 Amortized cost Gross unrealized holding gains Gross unrealized holding losses Estimated fair value Cash and cash equivalents $ 3,962 $ — $ — $ 3,962 U.S. treasury notes (1) 4,948 — (5) 4,943 Total cash, cash equivalents and short-term investments $ 8,910 $ — $ (5) $ 8,905 (1) These U.S. treasury notes are classified as "held-to-maturity" as they were purchased in August 2023 and mature in December 2023. Since these securities are intended to be held until maturity and mature in less than a year from their purchase date, any unrealized gains or losses are not realized until their maturity date and the amortized cost of these securities can be found on this Form 10-Q's balance sheet under Current Assets - "Short-term investments". Any coupon payments from these short-term investments fall under "Interest and other (expense) income" within the Company's Statement of Operations. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment is summarized as follows: September 30, December 31, Computer equipment and software $ 1,865 $ 1,796 Furniture and fixtures 139 139 Office equipment 614 614 2,618 2,549 Less – Accumulated depreciation (1,932) (1,800) $ 686 $ 749 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Intangible Assets | The changes in the carrying amount of intangible assets for the nine months ended September 30, 2023 were as follows: Net balance at December 31, 2022 $ 273 Deduction: Amortization expense (79) Net balance at September 30, 2023 $ 194 |
Schedule of Components of Intangible Assets | The following tables set forth the components of intangible assets as of September 30, 2023 and December 31, 2022: As of September 30, 2023 Estimated Adjusted Accumulated Net Patents and copyrights 2-17 years $ 375 $ (294) $ 81 Developed technology 5 years 400 (287) 113 $ 775 $ (581) $ 194 As of December 31, 2022 Estimated Adjusted Accumulated Net Patents and copyrights 2-17 years $ 375 $ (275) $ 100 Developed technology 5 years 400 (227) 173 $ 775 $ (502) $ 273 |
Schedule of Amortization Expense of Intangible Assets | The following summarizes amortization of intangible assets included in the accompanying statements of operations: Three Months Ended For the Nine Months Ended September 30, 2023 2022 2023 2022 Cost of sales $ 24 $ 23 $ 71 $ 71 General and administrative 3 3 8 8 $ 27 $ 26 $ 79 $ 79 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses are comprised of the following: September 30, December 31, Professional fees $ 110 $ 259 Payroll and related 1,536 1,040 Incentive bonuses 617 846 Other 87 174 $ 2,350 $ 2,319 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Stock-Based Compensation Included in Operating Expenses | All stock-based compensation is included in operating expenses as follows: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Compensation cost recognized: Selling, general & administrative $ 301 $ 561 $ 1,125 $ 1,270 Research & development 41 168 222 498 $ 342 $ 729 $ 1,347 $ 1,768 |
Schedule of Stock Option Activity | Stock option activity under the 2015 Plan during the period indicated below is as follows: Number of Weighted- Weighted- Aggregate Outstanding at December 31, 2022 1,120,244 $ 3.68 3.50 years $ 84 Granted 627,507 2.91 – – Forfeited, cancelled, or expired (516,846) 3.89 – – Outstanding at September 30, 2023 1,230,905 $ 2.33 3.08 years $ 135 Exercisable at September 30, 2023 593,494 $ 3.69 2.10 years $ 73 |
Schedule of Restricted Stock Unit (RSU) Activity | Restricted stock unit activity during the period indicated below is as follows: Number of Weighted Outstanding at December 31, 2022 214,892 $ 8.43 Granted 207,306 2.43 Forfeited or surrendered (70,959) 10.04 Vested and settled in shares (278,057) 4.42 Outstanding at September 30, 2023 73,182 $ 5.11 |
Schedule of Performance Stock Unit (PSU) Activity | Number of Weighted Outstanding at December 31, 2022 177,688 $ 7.91 Forfeited (88,844) 7.91 Vested and settled in shares (88,844) 7.91 Outstanding at September 30, 2023 — $ 7.91 |
NATURE OF BUSINESS (Details)
NATURE OF BUSINESS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Net loss | $ (644) | $ (724) | $ (2,737) | $ (3,290) | |
Net cash used in operations | (1,114) | $ (1,711) | |||
Cash and cash equivalents | 3,962 | 3,962 | $ 5,196 | ||
Short-term investments | 4,948 | 4,948 | 4,880 | ||
Working capital | 8,080 | 8,080 | |||
Accumulated deficit | $ (133,485) | $ (133,485) | $ (130,748) |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) financial_institution | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Product Information [Line Items] | ||||||
Goodwill, impairment charges | $ 0 | $ 0 | ||||
Intangible assets, impairment charges | $ 0 | $ 0 | 0 | 0 | ||
Advertising costs | 99,000 | 155,000 | 470,000 | $ 545,000 | ||
Equity awards liability | 40,000 | 40,000 | $ 54,000 | |||
Deferred revenue, current portion | 2,153,000 | 2,153,000 | 906,000 | $ 1,266,000 | ||
Revenue recognized | 224,000 | 816,000 | ||||
Deferred revenue, long-term portion | 0 | 0 | 1,000 | 8,000 | ||
Accounts receivable, net of allowance for doubtful accounts | 3,898,000 | 3,898,000 | 2,637,000 | 2,192,000 | ||
Accounts receivable, allowance for doubtful accounts | 43,000 | $ 43,000 | 20,000 | $ 3,000 | ||
Number of financial institutions | financial_institution | 2 | |||||
Three Customers | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||||||
Product Information [Line Items] | ||||||
Business concentration risk, percent | 49% | 52% | ||||
Customer One | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||||||
Product Information [Line Items] | ||||||
Business concentration risk, percent | 21% | 22% | ||||
Customer One | Accounts Receivable | Customer Concentration Risk | ||||||
Product Information [Line Items] | ||||||
Business concentration risk, percent | 38% | 32% | ||||
Customer Two | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||||||
Product Information [Line Items] | ||||||
Business concentration risk, percent | 14% | 17% | ||||
Customer Two | Accounts Receivable | Customer Concentration Risk | ||||||
Product Information [Line Items] | ||||||
Business concentration risk, percent | 3% | 7% | ||||
Customer Three | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||||||
Product Information [Line Items] | ||||||
Business concentration risk, percent | 14% | 13% | ||||
Customer Three | Accounts Receivable | Customer Concentration Risk | ||||||
Product Information [Line Items] | ||||||
Business concentration risk, percent | 5% | 1% | ||||
Four Customers | Accounts Receivable | Customer Concentration Risk | ||||||
Product Information [Line Items] | ||||||
Business concentration risk, percent | 58% | |||||
Customer Four | Accounts Receivable | Customer Concentration Risk | ||||||
Product Information [Line Items] | ||||||
Business concentration risk, percent | 12% | 11% | ||||
Five Customers | Accounts Receivable | Customer Concentration Risk | ||||||
Product Information [Line Items] | ||||||
Business concentration risk, percent | 70% | |||||
Customer Five | Accounts Receivable | Customer Concentration Risk | ||||||
Product Information [Line Items] | ||||||
Business concentration risk, percent | 19% | |||||
Fair Value, Inputs, Level 1 | ||||||
Product Information [Line Items] | ||||||
Cash, cash equivalents and short-term investments | 8,910,000 | $ 8,910,000 | 10,100,000 | |||
Fair Value, Inputs, Level 2 | ||||||
Product Information [Line Items] | ||||||
Equity awards liability | 40,000 | $ 40,000 | $ 54,000 | |||
Retirement Savings 401k Plan | ||||||
Product Information [Line Items] | ||||||
Retirement plan, maximum employee contribution, percent | 35% | |||||
Retirement plan, employer matching contribution, percent of match | 50% | |||||
Retirement plan, employer matching contribution, percent of employees' gross pay | 6% | |||||
Retirement plan, matching contributions | $ 31,000 | $ 30,000 | $ 85,000 | $ 90,000 | ||
Minimum | ||||||
Product Information [Line Items] | ||||||
Property and equipment, useful life | 3 years | 3 years | ||||
Maximum | ||||||
Product Information [Line Items] | ||||||
Property and equipment, useful life | 7 years | 7 years |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Product Information [Line Items] | ||||
Revenue | $ 4,760 | $ 4,012 | $ 13,730 | $ 11,415 |
Products transferred at a point in time | ||||
Product Information [Line Items] | ||||
Revenue | 125 | 42 | 204 | 166 |
Services transferred over time | ||||
Product Information [Line Items] | ||||
Revenue | 4,635 | 3,970 | 13,526 | 11,249 |
Software as a Service (SaaS) | ||||
Product Information [Line Items] | ||||
Revenue | 4,635 | 3,970 | 13,526 | 11,249 |
Equipment | ||||
Product Information [Line Items] | ||||
Revenue | 106 | 39 | 152 | 155 |
Other | ||||
Product Information [Line Items] | ||||
Revenue | $ 19 | $ 3 | $ 52 | $ 11 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Revenue Performance Obligations (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 2,153 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 432 |
Revenue, remaining performance obligation, period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 1,721 |
Revenue, remaining performance obligation, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 0 |
Revenue, remaining performance obligation, period | 12 months |
Software as a Service (SaaS) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 2,148 |
Software as a Service (SaaS) | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 427 |
Revenue, remaining performance obligation, period | 3 months |
Software as a Service (SaaS) | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 1,721 |
Revenue, remaining performance obligation, period | 12 months |
Software as a Service (SaaS) | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 0 |
Revenue, remaining performance obligation, period | 12 months |
Other | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 5 |
Other | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 5 |
Revenue, remaining performance obligation, period | 3 months |
Other | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 0 |
Revenue, remaining performance obligation, period | 12 months |
Other | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 0 |
Revenue, remaining performance obligation, period | 12 months |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||
Net Loss | $ (644) | $ (724) | $ (2,737) | $ (3,290) |
Weighted average common shares – | ||||
Basic (in shares) | 19,278,295 | 18,918,596 | 19,209,620 | 18,802,892 |
Diluted (in shares) | 19,278,295 | 18,918,596 | 19,209,620 | 18,802,892 |
Net Loss per share – | ||||
Basic (in dollars per share) | $ (0.03) | $ (0.04) | $ (0.14) | $ (0.17) |
Diluted (in dollars per share) | $ (0.03) | $ (0.04) | $ (0.14) | $ (0.17) |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - Summary of Common Stock Equivalents Excluded from Loss Per Diluted Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from loss per diluted share (in shares) | 1,304,087 | 1,545,856 | 1,304,087 | 1,545,856 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from loss per diluted share (in shares) | 1,230,905 | 1,164,676 | 1,230,905 | 1,164,676 |
Restricted stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from loss per diluted share (in shares) | 73,182 | 203,492 | 73,182 | 203,492 |
Performance stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from loss per diluted share (in shares) | 0 | 177,688 | 0 | 177,688 |
CASH EQUIVALENTS AND SHORT-TE_3
CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS - Schedule of Cash and Cash Equivalents and Short Term Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Amortized cost | ||
Cash and cash equivalents | $ 3,962 | $ 5,196 |
Fair Value, Inputs, Level 1 | ||
Amortized cost | ||
Cash and cash equivalents | 3,962 | |
Total cash, cash equivalents and short-term investments | 8,910 | $ 10,100 |
Gross unrealized holding gains | ||
Total cash, cash equivalents and short-term investments | 0 | |
Gross unrealized holding losses | ||
Total cash, cash equivalents and short-term investments | (5) | |
Estimated fair value | ||
Cash and cash equivalents | 3,962 | |
Total cash, cash equivalents and short-term investments | 8,905 | |
U.S. treasury notes | Fair Value, Inputs, Level 1 | ||
Amortized cost | ||
U.S. treasury notes | 4,948 | |
Gross unrealized holding gains | ||
Total cash, cash equivalents and short-term investments | 0 | |
Gross unrealized holding losses | ||
Total cash, cash equivalents and short-term investments | (5) | |
Estimated fair value | ||
U.S. treasury notes | $ 4,943 |
CASH EQUIVALENTS AND SHORT-TE_4
CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS - Narrative (Details) $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 USD ($) number_security | Sep. 30, 2022 USD ($) number_security | |
Schedule of Held-to-Maturity Securities [Line Items] | ||
Short-term investments, matured, realized gains | $ 120 | |
U.S. treasury notes | Fair Value, Inputs, Level 1 | ||
Schedule of Held-to-Maturity Securities [Line Items] | ||
Number of securities in unrealized loss position for more than 12 months | number_security | 0 | 0 |
Short-term investments, realized gains or losses | $ 0 | $ 0 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,618 | $ 2,549 |
Less – Accumulated depreciation | (1,932) | (1,800) |
Property and equipment, net | 686 | 749 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,865 | 1,796 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 139 | 139 |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 614 | $ 614 |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 45 | $ 44 | $ 131 | $ 131 |
INTANGIBLE ASSETS - Schedule of
INTANGIBLE ASSETS - Schedule of Changes in Carrying Amount of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill [Roll Forward] | ||||
Beginning balance | $ 273 | |||
Deduction: Amortization expense | $ (27) | $ (26) | (79) | $ (79) |
Ending balance | $ 194 | $ 194 |
INTANGIBLE ASSETS - Schedule _2
INTANGIBLE ASSETS - Schedule of Intangible Asset Components (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Adjusted Carrying Amount | $ 775 | $ 775 |
Accumulated Amortization | (581) | (502) |
Net | 194 | 273 |
Patents and copyrights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Adjusted Carrying Amount | 375 | 375 |
Accumulated Amortization | (294) | (275) |
Net | $ 81 | $ 100 |
Patents and copyrights | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 2 years | 2 years |
Patents and copyrights | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 17 years | 17 years |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 5 years | 5 years |
Adjusted Carrying Amount | $ 400 | $ 400 |
Accumulated Amortization | (287) | (227) |
Net | $ 113 | $ 173 |
INTANGIBLE ASSETS - Schedule _3
INTANGIBLE ASSETS - Schedule of Intangible Assets Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill [Line Items] | ||||
Amortization expense | $ 27 | $ 26 | $ 79 | $ 79 |
Cost of sales | ||||
Goodwill [Line Items] | ||||
Amortization expense | 24 | 23 | 71 | 71 |
General and administrative | ||||
Goodwill [Line Items] | ||||
Amortization expense | $ 3 | $ 3 | $ 8 | $ 8 |
DEBT (Details)
DEBT (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Feb. 28, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Feb. 06, 2019 | |
Insurance Financing Arrangement, February 2023 | ||||
Line of Credit Facility [Line Items] | ||||
Debt, face amount | $ 49,000 | |||
Interest rate | 9.47% | |||
Monthly loan payments | $ 5,000 | |||
Debt, term | 11 months | |||
Remaining commitment | $ 14,000 | |||
Citi Personal Wealth Management | Revolving Credit Facility | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity (up to) | $ 2,000,000 | |||
Amount outstanding | 0 | $ 0 | ||
Unused availability | $ 2,000,000 | $ 2,000,000 | ||
Citi Personal Wealth Management | Revolving Credit Facility | Line of Credit | Base Rate | Variable Rate Component One | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate, basis spread | 8.50% | 7.50% | ||
Citi Personal Wealth Management | Revolving Credit Facility | Line of Credit | Base Rate | Variable Rate Component Two | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate, basis spread | (2.00%) | (2.00%) |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Professional fees | $ 110 | $ 259 |
Payroll and related | 1,536 | 1,040 |
Incentive bonuses | 617 | 846 |
Other | 87 | 174 |
Accrued expenses | $ 2,350 | $ 2,319 |
INCOME TAXES (Details)
INCOME TAXES (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Income Tax Disclosure [Abstract] | |
Available net operating loss | $ 20.8 |
Available net operating loss, expires between 2035 and 2037 | $ 10.9 |
STOCKHOLDERS_ EQUITY - Narrativ
STOCKHOLDERS’ EQUITY - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Aug. 07, 2020 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Nov. 04, 2021 | |
Class of Stock [Line Items] | |||||||
Shares available for future grants (in shares) | 1,175,031 | 1,175,031 | |||||
Performance Stock Units (PSUs) | |||||||
Class of Stock [Line Items] | |||||||
Issued in period (in shares) | 265,942 | ||||||
Vesting percentage, based on company's market price percentage | 50% | 100% | |||||
Vesting percentage, based on company's adjusted EBITDA | 50% | ||||||
Outstanding (in shares) | 0 | 0 | 177,688 | ||||
Unvested Employee Stock Options and RSUs | |||||||
Class of Stock [Line Items] | |||||||
Unrecognized compensation cost | $ 1,028 | $ 1,028 | |||||
Weighted average period of recognition | 2 years 3 days | ||||||
2015 Omnibus Incentive Plan | |||||||
Class of Stock [Line Items] | |||||||
Increased (decrease) in stock-based compensation | $ (39) | $ 33 | $ (14) | $ (277) | |||
2015 Omnibus Incentive Plan | Maximum | |||||||
Class of Stock [Line Items] | |||||||
Shares authorized (up to) (in shares) | 5,236,000 | 5,236,000 | |||||
2015 Omnibus Incentive Plan | Stock options | |||||||
Class of Stock [Line Items] | |||||||
Expiration period | 10 years | ||||||
2015 Omnibus Incentive Plan | Stock options | Maximum | |||||||
Class of Stock [Line Items] | |||||||
Vesting period | 4 years | ||||||
2015 Omnibus Incentive Plan | Stock options | Minimum | |||||||
Class of Stock [Line Items] | |||||||
Percentage of fair value per share granted (not less than) | 110% | 110% | |||||
Percentage of grants owning more than voting stock | 10% | 10% | |||||
Vesting period | 1 year |
STOCKHOLDERS_ EQUITY - Schedule
STOCKHOLDERS’ EQUITY - Schedule of Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Compensation cost recognized | $ 342 | $ 729 | $ 1,347 | $ 1,768 |
Selling, general & administrative | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Compensation cost recognized | 301 | 561 | 1,125 | 1,270 |
Research & development | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Compensation cost recognized | $ 41 | $ 168 | $ 222 | $ 498 |
STOCKHOLDERS' EQUITY - Schedule
STOCKHOLDERS' EQUITY - Schedule of Stock Option Activity (Details) - Stock Option Plans - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Number of Shares Subject to Issuance | ||
Outstanding, beginning balance (in shares) | 1,120,244 | |
Granted (in shares) | 627,507 | |
Forfeited, cancelled, or expired (in shares) | (516,846) | |
Outstanding, ending balance (in shares) | 1,230,905 | 1,120,244 |
Exercisable at end of period (in shares) | 593,494 | |
Weighted- average Exercise Price | ||
Outstanding, beginning balance (in dollars per share) | $ 3.68 | |
Granted (in dollars per share) | 2.91 | |
Forfeited, cancelled, or expired (in dollars per share) | 3.89 | |
Outstanding, ending balance (in dollars per share) | 2.33 | $ 3.68 |
Exercisable at end of period (in dollars per share) | $ 3.69 | |
Weighted- average Remaining Contractual Term | ||
Outstanding | 3 years 29 days | 3 years 6 months |
Exercisable at end of period | 2 years 1 month 6 days | |
Aggregate Intrinsic Value | ||
Outstanding | $ 135 | $ 84 |
Exercisable at end of period | $ 73 |
STOCKHOLDERS' EQUITY - Schedu_2
STOCKHOLDERS' EQUITY - Schedule of Restricted Stock Unit (RSU) and Performance Stock Unit (PSU) Activity (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Restricted Stock Units (RSUs) | |
Number of Shares | |
Outstanding, beginning balance (in shares) | shares | 214,892 |
Granted (in shares) | shares | 207,306 |
Forfeited (in shares) | shares | (70,959) |
Vested and settled in shares (in shares) | shares | (278,057) |
Outstanding, ending balance (in shares) | shares | 73,182 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 8.43 |
Granted (in dollars per share) | $ / shares | 2.43 |
Forfeited (in dollars per share) | $ / shares | 10.04 |
Vested and settled in shares (in dollars per share) | $ / shares | 4.42 |
Outstanding, end of period (in dollars per share) | $ / shares | $ 5.11 |
Performance Stock Units (PSUs) | |
Number of Shares | |
Outstanding, beginning balance (in shares) | shares | 177,688 |
Forfeited (in shares) | shares | (88,844) |
Vested and settled in shares (in shares) | shares | (88,844) |
Outstanding, ending balance (in shares) | shares | 0 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 7.91 |
Forfeited (in dollars per share) | $ / shares | 7.91 |
Vested and settled in shares (in dollars per share) | $ / shares | 7.91 |
Outstanding, end of period (in dollars per share) | $ / shares | $ 7.91 |