Intellicheck (IDN) risk factors, FY2024 10-K

Risks Related to Our Business and Industry (All dollar amounts are rounded to thousands, except per share data)

1. 01We have incurred losses since inception and losses may continue, which could result in a decline in the value of our securities and a loss of your investment
2. 02Our proprietary software relies on reference data provided by government and quasi-government agencies. If these governmental and quasi-government agencies were to stop sharing data with us, the utility of our proprietary software would be diminished in those jurisdictions and our business would be damaged
3. 03Disruptions at federal governmental agencies that we interact with, due to a reduction in workforce and/or inadequate funding, could prevent such agencies from performing normal functions on which our business relies, which could negatively impact our business
4. 04Our business strategy exposes us to long sales and implementation cycles for our products
5. 05The industry for our systems and software is evolving and its growth is uncertain
6. 06Failure to manage our operations if they expand could impair our future growth
7. 07Failure to protect our proprietary technology may impair our competitive position
8. 08If our future products incorporate technologies that infringe the proprietary rights of third parties, and we do not secure licenses from them, we could be liable for substantial damages
9. 09If any third party prevails in an action against us for infringement of its proprietary rights, we could be required to pay damages and either enter costly licensing arrangements or redesign our products so as to exclude any infringing use
10. 10Failure to attract and retain management and other personnel may damage our operations and financial results and cause our stock price to decline
11. 11We incur significant accounting and other control costs that impact our financial condition
12. 12Failure to maintain effective internal control over our financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could cause our financial reports to be inaccurate
13. 13Long lead times for the components used in certain products creates uncertainty in our supply chain and may prevent us from making required deliveries to our customers on time
14. 14We obtain certain hardware and services, as well as some software applications, from a limited group of suppliers, and our reliance on these suppliers involves significant risks, including reduced control over quality and delivery schedules
15. 15Security breaches and other disruptions could potentially compromise our information and expose us to liability, which would be harmful to our business
16. 16We are subject to risks associated with product failure and technological flaws
17. 17We may not be able to keep up with rapid technological change
18. 18Our percentage of revenues and customer concentration is significant
19. 19We are subject to risks related to data privacy and the storage of biometric information
20. 20trust. Additionally, evolving privacy laws and regulations specifically targeting biometric data could impose new compliance burdens on the company
21. 21The expansion of the use of artificial intelligence ("AI") within our business will pose ethical and bias mitigation challenges
22. 22Public health crises, such as COVID-19 or other similar pandemics in the future, can adversely impact our business

Risks Related to Our Common Stock and the Market for Our Common Stock

1. 23Our share price may be volatile and could decline substantially
2. 24Future capital requirements may require incurring debt or dilution of existing stockholders
3. 25Because we do not intend to pay dividends on our Common Stock, stockholders will benefit from an investment in our stock only if it appreciates in value
4. 26The Company's cash and cash equivalents could be adversely affected by bank failures or other events affecting financial institutions and could adversely affect our liquidity and financial performance