Item 1.01Item 1.01 - Entry into Material Agreement
Item 1.01.
Entry into a Material Definitive Agreement.
Backstop
Commitment Agreement
On
September 9, 2026, authID Inc. (the “Company”) entered into a Backstop Commitment Agreement (the “Backstop Agreement”)
with certain holders of the Company’s outstanding senior secured debentures (each, a “Commitment Party” and, collectively,
the “Commitment Parties”). The senior secured debentures (the “Senior Secured Debentures”) were issued pursuant
to that certain Securities Purchase Agreement, dated as of April 29, 2026, by and between the Company and each purchaser named therein
(the “April 2026 Purchase Agreement”), together with warrants to purchase shares of the Company’s common stock, par
value $0.0001 per share (the “Common Stock”), issued to the holders of the Senior Secured Debentures in connection therewith
(the “Existing Warrants”).
Backstop
Commitment. Subject to the terms and conditions of the Backstop Agreement, each Commitment Party has agreed, severally and not jointly,
to fund its pro rata share of an aggregate backstop commitment of up to (i) $300,000, if no funding transaction with a third-party strategic
investor (or its affiliates) occurs prior to the Company’s next payroll cycle, or (ii) $500,000, if a funding transaction with
a third-party strategic investor (or its affiliates) does occur, of which $300,000 may be drawn at any time (to the extent not previously
drawn under clause (i)) and the remaining $200,000 may be drawn once fifty percent (50%) of the proceeds contemplated by the Company’s
agreement with such third-party strategic investor have been utilized (the applicable amount, the “Backstop Amount”).
Funding
Notice; Closing. The Company may call upon the backstop commitment by delivering a written funding notice to each Commitment Party
specifying the aggregate amount to be funded by each Commitment Party, subject to the satisfaction or waiver of customary closing conditions.
A total of $300,000 was funded on September 11, 2026.
Commitment
Fee Warrants. As consideration for the backstop commitment, and effective upon execution of the Backstop Agreement regardless of
whether the Backstop Amount is ultimately funded, the Company agreed to issue to the Commitment Parties, in proportion to their respective
pro rata shares, an aggregate of 750,000 warrants to purchase shares of Common Stock (the “Commitment Fee Warrants”). The
Commitment Fee Warrants have a term of five years from the date of issuance, are exercisable in whole or in part at any time during their
term, are subject to customary adjustment for stock splits, stock dividends, recapitalizations and similar events, and have an exercise
price of $0.57 per share.
Adjustment
of Conversion Price of the Senior Secured Debentures. Effective upon execution of the Backstop Agreement, and regardless of whether
the Backstop Amount is ultimately funded, the conversion price applicable to all Senior Secured Debentures issued pursuant to the April
2026 Purchase Agreement was fixed at the “Adjusted Conversion Price,” which is $0.38. This adjustment is to be made in accordance
with the terms of the Senior Secured Debentures and the April 2026 Purchase Agreement and applies to all Senior Secured Debentures outstanding
as of September 9, 2026, regardless of whether such holder is a Commitment Party under the Backstop Agreement, except that any Senior
Secured Debenture held by a Director will not be convertible without prior stockholder approval.
Repricing
of the Existing Warrants. Effective upon execution of the Backstop Agreement, and regardless of whether the Backstop Amount is ultimately
funded, the exercise price of all Existing Warrants was reduced to $0.57 per share. The Existing Warrants previously had an exercise
price of $1.50 per share. This adjustment is made in accordance with the terms of the April 2026 Purchase Agreement, except that the
exercise price of any Existing Warrant held by a Director will not be adjusted without prior stockholder approval.
Backstop
Debenture. If the Backstop Amount is funded in whole or in part, the Company will issue to the Commitment Parties, in proportion
to their respective pro rata shares of the amount actually funded, a senior secured debenture in an aggregate principal amount equal
to the amount funded (the “Backstop Debenture”). The Backstop Debenture will be effected by way of an amendment to the Commitment
Parties’ respective Senior Secured Debentures. The Backstop Debenture will rank pari passu in right of payment and security with
the Senior Secured Debentures (subject to the rights of the Strategic Partner described below), will be secured by the same collateral
and on the same basis as the Senior Secured Debentures, will bear interest at the same rate as the Senior Secured Debentures, will have
a maturity date coterminous with the Senior Secured Debentures and will be subject to the same covenants and events of default as the
Senior Secured Debentures, in each case as modified by the Subordination Agreement described below. The Backstop Debenture will be exchangeable,
at the option of the holder, into shares of Common Stock at the Adjusted Conversion Price.
Subordination
Agreement. The Company has advised the Commitment Parties that it is proposing to enter into an interim finance agreement with a
strategic partner (the “Strategic Partner”). Each Commitment Party has agreed that it will promptly enter into, execute and
deliver, upon the Company’s request and subject to review by its counsel, an agreement subordinating its rights under the Senior
Secured Debentures and related documents, and its rights under the Backstop Agreement, to the Strategic Partner, and providing certain
related consents and waivers to the Company and the Strategic Partner (the “Subordination Agreement”).
Registration
Rights. The Company agreed to file with the Securities and Exchange Commission (the “SEC”), within thirty days following
execution of the Backstop Agreement, a registration statement covering the resale of the shares of Common Stock underlying the Backstop
Debenture and the warrants issued pursuant to the Backstop Agreement, and to use commercially reasonable efforts to cause that registration
statement to become effective within thirty days following the filing thereof. The Company is required to maintain the effectiveness
of the registration statement until the earlier of the date on which all shares covered thereby have been sold and the date on which
such shares may be sold without restriction pursuant to Rule 144 under the Securities Act of 1933, as amended (the “Securities
Act”).
Nasdaq
Limitation. The Backstop Agreement provides that, in accordance with the terms of the April 2026 Purchase Agreement, the Senior Secured
Debentures and the Existing Warrants, the aggregate number of shares of Common Stock issuable pursuant to (a) any security into which
the Senior Secured Debentures may be converted or exchanged, (b) any fee shares issued under the April 2026 Purchase Agreement, (c) the
Existing Warrants and (d) the Backstop Debenture and the Commitment Fee Warrants may not exceed 19.99% of the number of shares of Common
Stock outstanding immediately prior to the date of the April 2026 Purchase Agreement, without stockholder approval in accordance with
the applicable rules of The Nasdaq Stock Market LLC.
Other
Terms. The Backstop Agreement contains customary representations, warranties and covenants of the Company and the Commitment Parties,
and provides for indemnification by the Company of the Commitment Parties and their related persons for losses arising out of the Company’s
breach of the Backstop Agreement, third-party claims relating to the transactions contemplated thereby and the Company’s failure
to comply with applicable law in connection therewith. The Backstop Agreement is governed by the laws of the State of New York.
The
foregoing descriptions of the Backstop Agreement do not purport to be complete and are qualified in their entirety by reference to the
full text of the Backstop Agreement a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and are incorporated
herein by reference.