authID Inc. Enters Backstop Funding Agreement; $300K Drawn

What Happened
authID Inc. announced it entered a Backstop Commitment Agreement on September 9, 2026 with holders of its senior secured debentures. Under the agreement, commitment parties agreed to fund up to either $300,000 (if no strategic investor funds before the next payroll) or up to $500,000 if a strategic investor participates. The company drew $300,000 on September 11, 2026. As part of the deal, authID fixed the conversion price on its outstanding Senior Secured Debentures at $0.38 and repriced existing warrants to $0.57 per share. The company also agreed to issue 750,000 Commitment Fee Warrants as consideration.

Key Details

• Backstop terms: up to $300,000 if no strategic investor intervenes, or up to $500,000 if a strategic investor participates (with $300,000 immediately available and additional $200,000 subject to use of strategic proceeds). $300,000 was funded on Sept 11, 2026.
• Warrants issued: 750,000 Commitment Fee Warrants issued on execution; 5-year term; $0.57 exercise price. Existing warrants exercise price reduced from $1.50 to $0.57.
• Debenture conversion: conversion price for all Senior Secured Debentures fixed at $0.38 effective upon execution (director-held debentures/warrants not adjustable without shareholder approval).
• Other items: if funded, the funded amount will be reflected as a Backstop Debenture pari passu with existing debentures and exchangeable into common stock at the $0.38 conversion price; company to file a resale registration statement within 30 days and maintain effectiveness until resale restrictions lapse; Commitment Parties agreed to enter subordination agreements for a proposed strategic partner.

Why It Matters
This agreement provides immediate short-term liquidity ($300K funded) and potential additional capital under defined conditions, which can help the company cover near-term cash needs. However, the fixed $0.38 conversion price and reduced warrant exercise prices increase the potential for future dilution if debentures are converted or warrants exercised. The company also agreed to register the resale of the securities, which would make issued shares and warrants tradable once the registration becomes effective. Investors should note the 19.99% Nasdaq limit on aggregate shares issuable without shareholder approval and that director-held instruments require stockholder approval to be adjusted.