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 utr:sqft

 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 WASHINGTON,
D.C. 20549

 FORM

 (Mark
One)

 ANNUAL
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the fiscal year ended December 31, 2024

 or

 TRANSITION
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from to

 Commission
File Number: 001-41495

 INTELLINETICS,
INC.

 (Exact
name of registrant as specified in its charter)

 Nevada

 87-0613716

 (State
 or other jurisdiction of

 incorporation
 or organization)

 (I.R.S.
 Employer

 Identification
 No.)

 2190
Dividend Drive

 Columbus,
 Ohio 43228

 (Address
of principal executive offices)

 (614) 921-8170

 (Registrant's
telephone number, including area code)

 Securities
registered pursuant to Section 12(b) of the Act:

 Title
 of each class

 Trading
 symbol

 Name
 of each exchange on which registered

 Common
 Stock, par value $0.001 per share

 INLX

 NYSE
 American

 Securities
registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer,"
"smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large
 accelerated filer

 Accelerated
 filer

 Non-accelerated
 filer

 Smaller
 reporting company

 Emerging
 growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 State
the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's
most recently completed second fiscal quarter. $ 17,355,181.

the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. 4,259,276
shares of common stock, par value $ 0.001 per share, were outstanding as of March 19, 2025.

 DOCUMENTS
INCORPORATED BY REFERENCE

 Portions
of the registrant's definitive Proxy Statement for the 2025 Annual Meeting of Stockholders, which will be filed with the Securities
and Exchange Commission no later than 120 days after the close of the registrant's fiscal year ended December 31, 2024, are incorporated
by reference in Part III hereof.

 TABLE
oF CONTENTS

 Page

 Item
 1.

 Business

 Item
 1A.

 Risk Factors

 Item
 1B.

 Unresolved Staff Comments

 2 0

 Item
 1C.

 Cybersecurity

 Item
 2.

 Properties

 Item
 3.

 Legal Proceedings

 Item
 4.

 Mine Safety Disclosure

 Item
 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item
 6.

 [Reserved]

 Item
 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item
 8.

 Financial Statements and Supplementary Data

 Item
 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item
 9A.

 Controls and Procedures

 Item
 9B.

 Other Information

 Item
 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item
 10.

 Directors, Executive Officers and Corporate Governance

 Item
 11.

 Executive Compensation

 Item
 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item
 14.

 Principal Accounting Fees and Services

 Item
 15.

 Exhibits, Financial Statement Schedules

 Signatures

 i

 CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS

 This
Annual Report on Form 10-K and the documents incorporated into this report by reference contain, and we may from time to time make, forward-looking
statements. From time to time in the future, we may make additional forward-looking statements in presentations, at conferences, in press
releases, in other reports and filings and otherwise. Forward-looking statements are all statements other than statements of historical
facts, including statements that refer to plans, intentions, objectives, goals, targets, strategies, hopes, beliefs, projections, prospects,
expectations or other characterizations of future events or performance, and assumptions underlying the foregoing. The words "may,"
"could," "should," "would," "will," "project," "intend," "continue,"
"believe," "anticipate," "estimate," "forecast," "expect," "plan,"
"potential," "opportunity," "scheduled," "goal," "target," and "future,"
variations of such words, and other comparable terminology and similar expressions and references to future periods are often, but not
always, used to identify forward-looking statements. Examples of forward-looking statements include, among other things, statements about
the following:

 the
 effects on our business, financial condition and results of operations of current and future economic, business, market and regulatory
 conditions, including the current global inflation, economic instability, and other economic and market conditions, and their effects
 on our customers and their capital spending and ability to finance purchases of our products, services, technologies and systems;

 our
 prospects, including our future business, revenues, recurring revenues, expenses, net income, earnings per share, margins, profitability,
 cash flow, cash position, liquidity, financial condition and results of operations, backlog of orders and revenue, our targeted growth
 rate, our goals for future revenues and earnings, and our expectations about realizing the revenues in our backlog and in our sales
 pipeline;

 our
 expectation that the shift from an offline to online world will continue to benefit our business;

 our
 ability to integrate our recent acquisitions and any future acquisitions, grow their businesses and obtain the expected financial
 and operational benefits from those businesses;

 the
 effects of fluctuations in sales on our business, revenues, expenses, net income, earnings per share, margins, profitability, cash
 flow, capital expenditures, liquidity, financial condition and results of operations;

 our
 products, services, technologies and systems, including their quality and performance in absolute terms and as compared to competitive
 alternatives, their benefits to our customers and their ability to meet our customers' requirements, and our ability to successfully
 develop and market new products, services, technologies and systems;

 our
 markets, including our market position and our market share;

 our
 ability to successfully develop, operate, grow and diversify our operations and businesses;

 our
 business plans, strategies, goals and objectives, and our ability to successfully achieve them;

 the
 sufficiency of our capital resources, including our cash and cash equivalents, funds generated from operations, availability credit
 and financing arrangements and other capital resources, to meet our future working capital, capital expenditure, lease and debt service
 and business growth needs;

 the
 value of our assets and businesses, including the revenues, profits and cash flow they are capable of delivering in the future;

 the
 amount and timing of revenue recognition from customer contracts with commitments for performance obligations, including our estimate
 of the remaining amount of commitments and when we expect to recognize revenues;

 industry
 trends and customer preferences and the demand for our products, services, technologies and systems; and

 the
 nature and intensity of our competition, and our ability to successfully compete in our markets.

 Any
forward-looking statements we make are based on our current plans, intentions, objectives, strategies, projections and expectations,
as well as assumptions made by and information currently available to management. Forward-looking statements are not guarantees of future
performance or events, but are subject to and qualified by substantial risks, uncertainties and other factors, which are difficult to
predict and are often beyond our control. Forward-looking statements will be affected by assumptions and expectations we might make that
do not materialize or that prove to be incorrect and by known and unknown risks, uncertainties and other factors that could cause actual
results to differ materially from those expressed, anticipated or implied by such forward-looking statements. These risks, uncertainties
and other factors include, but are not limited to, those described in "Risk Factors" as well as other risks, uncertainties
and factors discussed elsewhere in this report, in documents that we include as exhibits to or incorporate by reference in this report,
and in other reports and documents we from time to time file with or furnish to the Securities and Exchange Commission (the "SEC").
In light of these risks and uncertainties, you are cautioned not to place undue reliance on any forward-looking statements that we make.

 Any
forward-looking statements contained in this report speak only as of the date of this report, and any other forward-looking statements
we make from time to time in the future speak only as of the date they are made. We undertake no duty or obligation to update or revise
any forward-looking statement or to publicly disclose any update or revision for any reason, whether as a result of changes in our expectations
or the underlying assumptions, the receipt of new information, the occurrence of future or unanticipated events, circumstances or conditions
or otherwise.

 As
used in this Annual Report, unless the context indicates otherwise:

 the
 terms "Intellinetics," "Company," "the company," "us," "we," "our,"
 and similar terms refer to Intellinetics, Inc., a Nevada corporation, and its subsidiaries;

 "Intellinetics
 Ohio" refers to Intellinetics, Inc., an Ohio corporation and a wholly-owned subsidiary of Intellinetics;

 "Graphic
 Sciences" refers to Graphic Sciences, Inc., a Michigan corporation and a wholly-owned subsidiary of Intellinetics;

 "Yellow Folder" refers to Yellow Folder, LLC, a Texas limited liability company, the assets of which were acquired by Intellinetics;
and

 "CEO Image" refers to CEO Imaging Systems, Inc., a Michigan corporation, the assets of which were acquired by Intellinetics.

 ii

 PART
I

 ITEM
1. BUSINESS

 Company
Overview

 Intellinetics
is a Nevada holding company incorporated in 1997, with two wholly-owned subsidiaries: (i) Intellinetics Ohio and
(ii) Graphic Sciences. Intellinetics Ohio was incorporated in 1996, and on February 10, 2012, Intellinetics Ohio
became the sole operating subsidiary of Intellinetics as a result of a reverse merger and recapitalization. On March 2, 2020, Intellinetics
purchased Graphic Sciences, Inc.

 We
are a document services and software solutions company serving both the small-to-medium business and governmental sectors with their
digital transformation and process automation initiatives. Our digital transformation products and services are provided through two
reporting segments: Document Management and Document Conversion. Our Document Management segment consists primarily of solutions involving
our software platform, allowing customers to capture and manage their documents across operations such as scanned hard-copy documents
and digital documents including those from Microsoft Office 365, digital images, audio, video and emails. Our Document Conversion segment
provides assistance to customers as a part of their overall document strategy to convert documents from one medium to another, predominantly
paper to digital, including migration to our software solutions, as well as micrographics conversions and long-term storage and retrieval
services. Our solutions create value for customers by making it easy to connect business-critical documents to the people who need them
by making those documents easy to find and access, while also being secure and compliant with the customers' audit requirements.
Solutions are sold both directly to end-users and through resellers.

 Our
customers use our software by one of two methods: purchasing our software and installing it onto their own equipment, which we refer
to as a "premise" model, or licensing and accessing our platform via the Internet, which we refer to as a "software
as a service" or "SaaS" model and also as a "cloud-based" model. Licensing of our software through our
SaaS model has become increasingly popular among our customers, especially in light of the increased deployment of remote workforce policies,
and is a key ingredient in our revenue growth strategy. Our SaaS products are hosted with Amazon Web Services, Expedient, and Corespace,
providing our customers with reliable hosting services that we believe are consistent with industry best practices in data security and
performance.

 We
operate a U.S.-based business with concentrated sales to the State of Michigan for our Document Conversion segment, complemented by our
diverse set of document management software solutions and services. We hold or compete for leading positions regionally in select markets
and attribute this leadership to several factors including the strength of our brand name and reputation, our comprehensive offering
of innovative solutions, and the quality of our service support. Net growth in sales of software as a service in recent years reflects
market demand for these solutions over traditional sales of on-premise software. We expect to continue to benefit from our select niche
leadership market positions, innovative product offerings, growing customer base, and the impact of our increased spending in sales and
marketing programs. Examples of these programs include identifying and investing in growth and expanded market penetration opportunities,
more effective products and services pricing strategies, demonstrating superior value to customers, increasing our sales force effectiveness
through improved guidance and measurement, and continuing to optimize our lead generation and lead nurturing processes.

and Services

 Document
Management

 Our
flagship software platforms include a) IntelliCloud Payables Automation Solutions, b) IntelliCloud
content management, and c) YellowFolder, a specialized content management software solution for the K-12 education
market. These platforms reflect our focus, and the market's focus, on growth via cloud-based content management and process automation.
Our Document Management business also generates software-related professional services that include installation, integration, training,
and consulting services, as well as ongoing software maintenance and customer support.

 The
IntelliCloud suite of software is comprised of stand-alone and integrated modules that include:

 Image
 Processing: includes image processing modules used for capturing, transforming and managing images of paper documents, including
 support of distributed and high-volume capture, optical character recognition;

 Accounts
 Payable lifecycle automation, including advanced capture for invoice processing.

 Records
 Management: addresses needs relating to retention of content through automation and policies, ensuring legal, regulatory and industry
 compliance for our clients;

 Workflow:
 supports business processes, routing content electronically for assigning work tasks and approvals, and creating related audit trails,
 notifications, and escalations; and

 Extended
 Components: includes document composition and e-forms (via third party OEM integration partnership), search, content and web analytics
 (via third party data visualization and advanced OCR engine partnerships), email and information archiving, and packaged application
 integration.

 Document
Conversion

 We
convert images from paper to digital, paper to microfilm, microfiche to microfilm, and micrographics to digital for businesses and state,
county, and municipal governments. Our Document Conversion business also provides its clients with long-term paper and microfilm storage
and retrieval options.

 The
primary Document Conversion offerings are:

 Digital
 Scanning Services. These services include paper scanning, as well as special scanning such as newspaper, aperture card, drawing,
 and book scanning, including large format. Most government files must be retained for long terms or permanently, making such clients
 a prime candidate for digital conversion. There are four production categories for these services, consisting of document prep, scanning,
 indexing, and delivery.

 Business
 Process Outsourcing (BPO). BPO contracts provide ongoing outsourcing of customer processes such as mail room activities, where we
 pick up customer mail from the post office, open it, sort it, scan it, and upload it to the appropriate customer system.

 Micrographics.
 We provide microfilm/microfiche conversion to digital, converting scanned images to microfilm or microfiche, and microfilm/microfiche
 preservation and duplication.

 Box
 Storage Services. We provide physical document storage and retrieval services for our clients.

 Marketing
and Sales

 We
have a multi-channel sales model that directs our sales efforts through direct sales and through intermediaries, such as independent
software vendors, resellers and referral partners. Our Document Management and Document Conversion segments each use direct and reseller
channels for sales. We have developed partner-specific marketing programs with channel partners. We believe that our channel partner
strategy improvements have increased the competitive strength of our platform of products. In addition, we have established a set of
business solutions templates for specific vertical markets that provide base software configurations which we believe will facilitate
our delivery and installation of software to our customers in both our direct and reseller channels. We believe that these advancements,
in the aggregate, will allow us to license and sell our products to a targeted customer base, shortening our sales cycle, making margins
more consistent, and allowing us to expand our sales through existing and new reseller partnerships and direct customers. We continue
to devote significant efforts, in both development and marketing, in enhancing all channels to market.

 Competition
and Market Position

 The
market for our products is competitive, and we expect that competition will continue to intensify as the document solutions markets evolve
and potentially consolidate. We believe that the trend toward electronic document management, and particularly cloud solutions, which
was accelerated by the COVID-19 pandemic and subsequent increased prevalence of remote or hybrid workforces, has not diminished with
several industries recently implementing 'return to work' programs.

 We
believe the primary competitors of our Document Management segment, including payables automation, are Stampli, Nexus, DocuWare,
M-files, On-Base, FileBound, Frontline, Laserfiche, Square 9, and Harvest Technology Group, who also serve
small-to-medium business (SMB), K-12 education, and governmental sectors. The principal competitive factors affecting the market for
our solutions and services include: (i) vendor and product reputation; (ii) product quality, performance and price; (iii) the
availability of software products on multiple platforms; (iv) product scalability; (v) product integration with other enterprise
applications; (vi) software functionality and features; (vii) software ease of use; (viii) the quality of professional services,
customer support services and training; and (ix) the ability to address specific customer business problems. We believe that the
relative importance of each of these factors depends upon the concerns and needs of each specific customer.

 We
believe the competitors of our Document Conversion segment vary from local niche entities to larger entities, including Iron Mountain.
The principal competitive factors affecting the market for our software products and services include: (i) vendor and services reputation
and (ii) services quality, performance and price. We believe that the relative importance of each of these factors depends upon the concerns
and needs of each specific customer, and that, for our current and prospective customers, maintaining secure control over the customers'
information is highly valued.

 We
believe that the consolidated Company has advantages over our competitors in the small-to-medium business market, and particularly organizations
in highly regulated, risk and compliance-intensive markets, such as state and local government, non-clinical health care, and K-12 education.
In our view, we will remain competitive by remaining a focused niche provider with product offerings aligned with buyer-specific requirements.
We anticipate that we will benefit from five specific advantages already in place:

 Advanced
 cloud and premise digital transformation software and services;

 Expanded
 IntelliCloud software integration tools for independent software vendors to integrate into their ERP solutions and sell into
 their customer base;

 Modular
 solution and services that enable rapid customer activation model;

 Integrated
 on-demand solutions library as standard platform feature; and

 Expanded
 software integration tools that make it easier for independent software vendors to integrate and sell IntelliCloud software capabilities
 into their customer base.

 We
believe, with these competitive strengths, that we are well positioned as a cloud-based managed document services provider for the small-to-medium
business and governmental sectors.

 Customers

 Document
Management

 Our
Document Management segment has relatively low customer concentration. For 2024 and 2023, the two largest customers of our Document Management
segment accounted for approximately 7% and 2%, respectively, of the segment's revenues for that period.

 For
the years ended December 31, 2024, and 2023, government contracts, including K-12 education, represented approximately 78% and 84%, respectively,
of the Document Management segment's net revenues, including a significant portion of the segment's sales to resellers which
represent ultimate sales to government agencies. Due to their dependence on state, local and federal budgets, government contracts carry
short terms, typically 12 months. Since our inception, our contracts with government customers have generally renewed on the original
terms and conditions upon expiration.

 Document
Conversion

 Our
Document Conversion segment has significant customer concentration with the State of Michigan. Graphic Sciences' initial form of
the current contract with the State of Michigan was won in 2007 and currently is in its extension period beyond the five years from June
1, 2018 to May 30, 2023, which extended the contract to May 30, 2025. We are currently participating in a competitive bidding process to renew
this contract as of the date of this Report. The contract is issued to Graphic Sciences through the Michigan
Department of Management and Budget, Enterprise Procurement and managed through the Department of Management and Budget, Records Management
Services Division (RMS).

 The
contract provides local and state government agencies access to digital and micrographic conversion services. These agencies have the
option to perform these conversion services internally or go out to bid if they so choose.

 All
Michigan agencies and departments are able to use the services and prices provided under this contract. Mechanically, the work we perform
is invoiced to RMS and the end user is invoiced through the State of Michigan accounting system. We do not invoice the end user directly
when entities utilize this contract facility, and we have a single point of contact for managing billing and receipt. The state in effect
acts as a reseller of our services to the other agencies and makes a mark-up of what is charged. For 2024, the State of Michigan represented
approximately 69% of our Document Conversion segment's net revenues, and 40% of the total consolidated revenues. Our second largest
customer in 2024 was our reseller Applied Innovation, representing 7% of our Document Conversion segment's net revenues and 4%
of the total consolidated revenues. For 2023, the State of Michigan represented approximately 62% of our Document Conversion segment's
net revenues, and 35% of the total consolidated revenues. Our second largest customer in 2023 was Rocket Mortgage, representing 9% of
our Document Conversion segment's net revenues and 5% of the total consolidated revenues.

 Intellectual
Property

 Our
software and most of the underlying technologies are built on a Microsoft. Net framework. We rely on a combination of copyright, trademark
laws, non-disclosure agreements and other contractual provisions to establish and maintain our proprietary intellectual property rights.

 Customers
license the right to use our software products on a non-exclusive basis. We grant to third parties rights in our intellectual property
that allow them to market certain of our products on a non-exclusive or limited-scope exclusive basis for a particular application of
the product or to a particular geographic area.

 While
we believe that our intellectual property as a whole is valuable and our ability to maintain and protect our intellectual property rights
is important to our success, we also believe that our business as a whole is not materially dependent on any particular trademark, license,
or other intellectual property right.

Development

 We
design, develop, test, market, license, and support new software products and enhancements of current products. We continuously monitor
our software products and enhancements to remain compatible with standard platforms and file formats. We discuss our accounting for such
costs, and when we expense or capitalize, in more detail below in "Critical Accounting Policies and Estimates."

 Government
Regulation

 Other
than government procurement rules affecting sales to governmental customers and data privacy laws applicable to all businesses, we do
not believe that we are subject to any special governmental regulations or approval requirements affecting our products or services.
Complying with the regulations and requirements applicable to our business does not entail a significant cost or burden. We believe that
we are in compliance in all material respects with all applicable governmental regulations.

 Human
Capital

 As
of March 19, 2024, we employed a total of 153 individuals; all but 17 are full-time employees. Of those, Graphic Sciences employs
97 individuals, comprised of 89 full-time and 8 part-time employees, primarily located in Michigan. Graphic Sciences also utilizes
temporary employees, through various agencies, to provide labor for variable project work. Intellinetics Ohio employs 53 individuals,
comprised of 44 full-time and 9 part-time employees, primarily located in Ohio and Texas. As a combined company, 19 of our employees
work in administration and management, 42 of our employees work in software sales, maintenance and support, and software development,
and 92 of our employees work in document services and storage operations.

 We
consider the integrity, experience, dedication, creativity, and team-oriented nature of our employees to be an essential driver of our
business and a key to our future prospects. Personal relationships with our existing customers are an important part of our business,
and our customers have come to rely on the personal service and knowledge of our workforce across all functional areas. To attract and
retain qualified applicants to our company and retain our employees, we offer total benefits packages consisting of base salary or hourly
wage (depending on position), a comprehensive benefits package, and equity compensation for certain employees. Annual cash bonuses are
based on our profitability, achievement of targets, and level of responsibility. When selecting talent, we consider education, experience,
diversity, and the likelihood that a candidate will espouse our values of integrity, collaboration, dedication, creativity, and superior
customer service.

 We
are committed to fostering a diverse and inclusive workforce that attracts and retains exceptional talent. In addition, we pride ourselves
on an open culture that respects co-workers, values employees' health and well-being and fosters professional development. We support
employee growth and development in a variety of ways including with training opportunities and an overall strategy of promotion from
within. Our management conducts periodic employee engagement surveys and, for supervisors and above, annual individual employee assessments
with an emphasis on individual development for each employee.

 We
believe that relations with our employees are good. None of our employees are represented by a labor union, and we do not have collective
bargaining arrangements with any of our employees.

 Executive
Officers and Board of Directors

 On
December 31, 2024, our executive officers and directors included the following:

 Name

 Age

 Title

 James
 F. DeSocio

 President,
 Chief Executive Officer, and Director

 Matthew
 L. Chretien

 Chief
 Strategy Officer, Chief Technology Officer, Secretary, and Director

 Joseph
 D. Spain

 Chief
 Financial Officer, Treasurer

 Roger
 Kahn

 Director (Resigned as of February 18, 2025)

 John
 Guttilla

 Stanley
 Jaworski

 Paul
 Seid

 Michael
 Taglich

 Director,
 Chairman of the Board

 James
F. DeSocio, President, Chief Executive Officer, and Director. Mr. DeSocio joined Intellinetics on September 25, 2017. Prior to joining
Intellinetics, Mr. DeSocio served as Chief Revenue Officer at Relayware, LLC, a global provider of Partner Relationship Management solutions,
from January 2015 to September 2017. From January 2013 to November 2014, Mr. DeSocio served as Executive Vice President of Operations
for XRS Corporation, a fleet management software solutions provider. From October 2007 to September 2012, Mr. DeSocio served as Executive
Vice President of Sales and Business Development for Antenna Software, Inc., a business mobility solutions provider. Mr. DeSocio has
extensive experience in sales, marketing, international operations, mergers and acquisitions.

 Matthew
L. Chretien, Chief Strategy Officer, Chief Technology Officer, Director. Mr. Chretien is a co-founder of Intellinetics and has served
as Secretary since December 19, 2017, Chief Strategy Officer since September 25, 2017, and Chief Technology Officer since September 2011.
Mr. Chretien previously served as Intellinetics' President and Chief Executive Officer from July 2013 to September 2017, and from
January 1999 to September 2011; Executive Vice President from September 2011 to July 2013; Chief Financial Officer from September 2011
to September 2012; Treasurer from September 2011 to December 2016; and Vice President from 1996 until 1999. Prior to joining Intellinetics,
Mr. Chretien served as the field sales engineer for Unison Industries, a manufacturer of aircraft ignition systems.

 Joseph
D. Spain, Chief Financial Officer and Treasurer. Mr. Spain joined Intellinetics on October 31, 2016 and was appointed as its Chief Financial
Officer on December 1, 2016. Prior to joining Intellinetics, Mr. Spain worked from September 2014 to October 2016 for nChannel, Inc.,
a software solutions provider for the small-to-medium business retail sector, ultimately serving as Chief Financial Officer of the company.
From July 1995 to June 2014, Mr. Spain worked for Mettler-Toledo International, Inc., a global provider of measurement and precision
instruments, ultimately serving as Vice President of Finance & Controller for one of the company's operating units.

 Roger
Kahn, Director. On February 18, 2025, Roger Kahn resigned from the board, noting his other responsibilities required his full
attention. There were no disagreements with the board. Mr. Kahn was appointed as a member of our board of directors on October 5,
2017. Mr. Kahn has served as President and Chief Executive Officer of Bridgeline Digital, Inc. ("Bridgeline"), a web
content management solutions provider, since May 2016. Mr. Kahn received his Ph. D. in Computer
Science and Artificial Intelligence from the University of Chicago.

 John
Guttilla, Director. Mr. Guttilla was appointed as a member of our board of directors on November 10, 2022. Mr. Guttilla is a
Managing Director and shareholder of CBIZ CPA's LLC. He serves as Financial Services Partner in CBIZ's Saddle Brook, NJ
office. CBIZ acquired Mr. Guttilla's previous accounting firm, Marcum LLP, in November of 2024, in which Mr. Guttilla was a
partner. Mr. Guttilla has more than 40 years of experience in both tax consulting and auditing for both public and private
companies and his industry experience includes brokerage, private equity, foreign exchange trading, manufacturing, printing,
hospitality, consumer products, real estate and professional services. He has also served as a Director and Audit Committee
Chairman for two public companies, DecisionPoint Systems, Inc. (NYSE DPSI), and Orchids Paper Products (NYSE TIS).

 Stanley
P. Jaworski, Jr., Director. Mr. Jaworski was appointed as a member of our board of directors on June 22, 2023. In 2016, Mr. Jaworski
founded Opus2 Ventures, LLC, a management advisory firm dedicated to assisting company boards, management and functional leadership in
developing successful go-to-market strategies. He currently serves as President and Principal Advisor there. In 2014, Mr. Jaworski served
as Vice President Global Marketing for the Comodo Group, a cyber security company. Prior to Comodo, Mr. Jaworski served as Vice President,
Americas Marketing for Motorola Solutions, Inc. (NYSE:MSI) from 2009 until May 2014. From 2007 to 2009, Mr. Jaworski was Chief Marketing
Officer of VBrick Systems, Inc., which provides enterprise video streaming solutions. From 2005 to 2007, he was Vice President, Worldwide
Channel Marketing, at NetApp, Inc., a data storage and management company. Prior to NetApp, Mr. Jaworski was at Symbol Technologies,
Inc. (now Zebra Technologies) from 1986 to 2005 where he served in various areas of senior executive responsibility including Vice President
and General Manager, Worldwide Channels and Alliances and Vice President, Worldwide Marketing.

 Paul
Seid. Mr. Seid was appointed as a member of our board of directors on June 22, 2023. Starting in 2013, Mr. Seid has served as Chief Executive
Officer of RST Automation, a maker of hospital robotic devices which was established 2004. For the past eighteen years he has been President
of Strategic Data Marketing, a research and data collection company. He has also founded, bought and/or sold over twenty companies in
Asia, Europe, North, and South America. Mr. Seid graduated from Queen's College, a division of the City University of New York,
in 1968 with a Bachelor's degree in Political Science. Since 2010, Mr. Seid has served on the board of directors of BioVentrix,
a privately held medical device company, and since 2014, he has served on the board of directors of BGSF Inc. (NYSE:BGSF), a workforce
solutions company. Mr. Seid has held numerous other board of directors and consulting positions.

 Michael
Taglich, Director. Mr. Taglich was appointed as a member of our board of directors on November 2, 2023. Mr. Taglich has been
President of Taglich Brothers, Inc., since its founding in 1992. Taglich Brothers is a New York-based full-service securities
brokerage firm specializing in the micro-cap segment of the public securities markets. He is currently the Chairman of the Board of
Air Industries Group Inc., a publicly traded aerospace and defense company (NYSE AIRI). He also serves on the board of BioVentrix,
Inc., a privately held medical device company whose products are directed at heart failure treatment. He also serves as a director
on a number of other public and private companies, including DecisionPoint Systems, Inc. (NYSE DPSI), Bridgeline Digital, Inc.
(NASDAQ BLIN) (resigned as director in February 2025), and privately held Icagen Inc., a drug screening company. Mr. Taglich
received a Bachelor's Degree in Business Administration from New York University.

 Available
Information

 Our
Annual Reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all exhibits and amendments to these reports
filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act"),
are available free of charge via our website (www.intellinetics.com) as soon as reasonably practicable after they are filed with, or
furnished, to the SEC. The foregoing reports are also publicly available at the SEC's website: www.sec.gov/edgar.

 ITEM
1A. RISK FACTORS

 Our
business and future operating results may be affected by many risks, uncertainties and other factors, including those set forth below
and those contained elsewhere in this report. If any of the following risks were to occur, our business, affairs, assets, financial condition,
results of operations, cash flows and prospects could be materially and adversely affected. When we say that something could have a material
adverse effect on us or on our business, we mean that it could have one or more of these effects.

 In
addition to the other information contained in this report, the following risk factors should be considered carefully in evaluating our
company. Our business, financial condition, liquidity or results of operations could be materially adversely affected by any of these
risks.

 Risks
Relating to Our Business

 Our
largest customer awards long-term contracts through a competitive bidding process that is
open as of the date of this Report, and any loss or volume reduction of this or any other major customer or the failure to collect a large
account receivable could negatively affect our results of operations and financial condition.

 Our largest customer awards long-term contracts through
a competitive bidding process that is open as of the date of this Report. We believe we are well suited to continue to provide services
to this client, but there can be no assurance that we will be awarded continuing contracts or that our work volumes with this customer
will continue at their current levels and/or pricing. Revenues from a limited number of customers have accounted for a substantial percentage
of our total revenues. Our two largest clients account for approximately 40% and 4%, and 35% and 5%, of our revenues for the years ended
December 31, 2024 and 2023, respectively. For the years ended December 31, 2024, and 2023, government contracts, including K-12 education,
represented approximately 80% of our net revenues in each period. The loss or volume reduction of one of our clients or the loss of a
meaningful percentage of government contracts could materially affect our business and operating results.

 Uncertainty in the education industry or reduced
governmental spending on education may have a chilling effect on our prospective K-12 Education clients, making it more difficult to close
sales with new customers.

 A significant portion of our revenues comes from contracts
with local school districts. Current uncertainties relating to the activities and funding of the Department of Education may have an indirect
chilling effect on the activities of local school districts, leading our prospective new customers to delay spending decisions. This may
reduce the growth of our SaaS revenue and could materially affect our business and operating results.

 General
inflation and increases in the minimum wage and general labor costs have affected and may continue to adversely affect our business,
financial condition and results of operations.

 Labor
is a significant portion of our cost structure and is subject to many external factors, including minimum wage laws, prevailing wage
rates, unemployment levels, health insurance costs and other insurance costs and changes in employment and labor legislation or
other workplace regulation. Many companies experienced an increase in labor costs in 2024 and expect additional increases in 2025.
As the cost of labor and statutory minimum wage rates increase or related laws and regulations change, we will need to continue to
increase not only the wage rates of our minimum wage employees, but also the wages paid to our other hourly or salaried employees.
Increases in the cost of our labor could have an adverse effect on our business, financial condition and results of operations, or
if we fail to pay such higher wages we could suffer increased employee turnover. Increases in labor costs generally could force us
to increase prices for other customers, which could adversely impact our sales. For some customers with multi-year fixed pricing
contracts, increases in the minimum wage could decrease our profit margins or result in losses and could have a material adverse
effect on our business, financial condition and results of operations.

 Current
and future competitors could have a significant impact on our ability to generate future revenues and profits.

 The
markets for our products are intensely competitive, and are subject to rapid technological change and other pressures created by changes
in our industry. The convergence of many technologies has resulted in unforeseen competitors arising from companies that were traditionally
not viewed as threats to our marketplace, particularly with respect to artificial intelligence (AI). We expect competition to increase
and intensify in the future as the pace of technological change and adaptation quickens, and as additional companies enter our markets,
including those competitors who offer similar products and services to ours, but offer them through a different form of delivery. Numerous
releases of competitive products have occurred in recent history and are expected to continue in the future. We may not be able to compete
effectively with current competitors and potential entrants into our marketplace. We could lose market share if our current or prospective
competitors: (i) introduce new competitive products, (ii) add new functionality to existing products, (iii) acquire competitive products,
(iv) reduce prices, or (v) form strategic alliances with other companies. If other businesses were to engage in aggressive pricing policies
with respect to competing products, or if the dynamics in our marketplace resulted in increased bargaining power by the consumers of
our products and services, we would need to lower the prices we charge for the products we offer. This could result in lower revenues
or reduced margins, either of which could materially and adversely affect our business and operating results. Additionally, if prospective
consumers choose other methods of document solutions delivery, different from those that we offer, our business and operating results
could also be materially and adversely affected.

 If
we are unable to continue to attract new customers and increase market awareness of our company and solutions, our revenue growth could
be slower than we expect or could decline.

 We
believe that our future growth depends in part upon increasing our customer base. Our ability to achieve significant growth in revenue
in the future will depend, in part, upon continually attracting new customers and obtaining subscription renewals to our solutions from
those customers. Market awareness of our capabilities and solutions is essential to our ability to generate new leads for expanding our
business and our continued growth. If we fail to sufficiently invest in our marketing programs or they are unsuccessful in attracting
new customers by creating market awareness of our company and solutions, our business may be harmed.

 Any
significant reduction in the sales efforts or cooperative efforts from our partners could materially impact our revenues.

 We
rely on close cooperation with our distribution partners for sales and product development as well as for the optimization of opportunities
that arise in our competitive environment. In particular, the success of our ERP partner programs are entirely dependent upon our relationships
with our ERP partners. Our success will depend, in part, upon our ability to maintain access to existing channels of distribution and
to gain access to new channels if and when they develop. We may not be able to retain a sufficient number of our existing partners or
develop a sufficient number of future partners. We are unable to predict the extent to which our partners will be successful in marketing
and licensing our products. A reduction in partner cooperation or sales efforts, or a decline in the number of channels, could materially
reduce revenues.

 Reduced
IT or enterprise software spending may adversely impact our business.

 Our
business depends on the overall demand for IT and enterprise software spend and on the economic health of our current and prospective
customers. Any meaningful reduction in IT or enterprise software spending or weakness in the economic health of our current and prospective
customers could harm our business in a number of ways, including longer sales cycles and lower prices for our solutions.

 Consolidation
in the industry, particularly by large, well-capitalized companies, could place pressure on our operating margins which could, in turn,
have a material adverse effect on our business.

 Acquisitions
by large, well-capitalized technology companies have changed the marketplace for our goods and services by replacing competitors that
are comparable in size to our company with companies that have more resources at their disposal to compete with us in the marketplace.
In addition, other large corporations with considerable financial resources either have products that compete with the products we offer,
or have the ability to encroach on our competitive position within our marketplace. These companies have considerable financial resources,
channel influence, and broad geographic reach; thus, they can engage in competition with our products and services on the basis of sales
price, marketing, services, or support. They also have the ability to introduce items that compete with our maturing products and services.
The threat posed by larger competitors and their ability to use their better economies of scale to sell competing products and services
at a lower cost may materially reduce the profit margins we earn on the goods and services we provide to the marketplace. Any material
reduction in our profit margin may have a material adverse effect on the operations or finances of our business, which could hinder our
ability to raise capital in the public markets at opportune times for strategic acquisitions or general operational purposes, which may
prevent effective strategic growth or improved economies of scale or put us at a disadvantage to our better-capitalized competitors.

 We
must manage our internal resources during periods of company growth, or our operating results could be adversely affected.

 The
document solutions market has continued to evolve at a rapid pace. If we are successful with our growth plans, any growth will place
significant strains on our administrative and operational resources, and increase demands on our internal systems, procedures and controls.
Our administrative infrastructure, systems, procedures and controls may not adequately support our operations. In addition, our management
may not be able to achieve a rapid, effective execution of the product and business initiatives necessary to successfully implement our
operational and competitive strategy. If we are unable to manage growth effectively, our operating results will likely suffer which may,
in turn, adversely affect our business.

 We
may be unable to acquire other businesses, technologies or companies or engage in other strategic transactions, and we may not be able
to successfully realize the benefits of and may be exposed to a variety of risks from any such strategic transactions.

 The
acquisitions of Yellow Folder in 2022 and Graphic Sciences and CEO Imaging Systems, Inc., both in 2020, were our first strategic business
acquisitions. As part of our growth strategy, we also expect to continue to evaluate and consider potential strategic transactions, including
business combinations, acquisitions and strategic alliances, to enhance our existing businesses and to develop new products and services.
At any given time, we may be engaged in discussions or negotiations with respect to one or more of these types of transactions, and any
of these transactions could be material to our financial condition and results of operations. However, we do not know if we will be able
to identify any future opportunities that we believe will be beneficial for us. Even if we are able to identify an appropriate business
opportunity, we may not be able to successfully consummate the transaction, and even if we do consummate such a transaction we may be
unable to obtain the benefits or avoid the difficulties and risks of such transaction.

 We
cannot assure you that we will make any additional acquisitions, or that any future acquisitions will be successful, will assist us in
the accomplishment of our business strategy, or will generate sufficient revenues to offset the associated costs and other adverse effects
or will otherwise result in us receiving the intended benefits of the acquisition. In addition, we cannot assure you that any future
acquisition of new businesses or technology will lead to the successful development of new or enhanced customer relationships, products,
and services, or that any new or enhanced products and services, if developed, will achieve market acceptance or prove to be profitable.

 Risks
Related to Product Development

 We
need to continue to develop new technologically-advanced products that satisfy our customers and successfully integrate with the software
products and enhancements used by our customers.

 Our
success depends upon our ability to design, develop, test, market, license, and support new software products and enhancements of current
products on a timely basis in response to both competitive threats and marketplace demands. Our industry is subject to rapid technological
change, and a significant example of this is the rapid advancement of artificial intelligence (AI) tools. If we are unable to develop
and sell new products and services that satisfy our customers, our revenue and operating results could be adversely affected. Also, if
new industry standards emerge that we do not anticipate or adapt to, including more advanced AI-driven solutions, our software products
could be rendered obsolete and, as a result, our business and operating results, as well as our ability to compete in the marketplace,
would be materially harmed. In addition, software products and enhancements must remain compatible with standard platforms and file formats.
Often, we must integrate software licensed or acquired from third parties with our proprietary software to create or improve our products.
If we are unable to achieve a successful integration with third-party software, we may not be successful in developing and marketing
our new software products and enhancements. If we are unable to successfully integrate third-party software to develop new software products
and enhancements to existing products, or to complete products currently under development which we license or acquire from third parties,
our operating results will materially suffer.

 If
our products and services do not gain market acceptance, our operating results may be negatively affected.

 We
intend to pursue our strategy of growing the capabilities of our document solutions software offerings through our proprietary research
and the development of new product offerings. In response to customer demand, it is important to our success that we continue: (i) to
enhance our products, and (ii) to seek to set the standard for document solutions capabilities in the small-to-medium market. The primary
market for our software and services is rapidly evolving, due to the nature of the rapidly changing software industry, which means that
the level of acceptance of products and services that have been released recently or that are planned for future release by the marketplace
is not certain. If the markets for our products and services fail to develop, develop more slowly than expected or become subject to
increased competition, our business may suffer. As a result, we may be unable to: (i) successfully market our current products and services,
(ii) develop new software products, services and enhancements to current products and services, (iii) complete customer installations
on a timely basis, or (iv) complete products and services currently under development. In addition, increased competition could put significant
pricing pressures on our products, which could negatively impact our margins and profitability. If our products and services are not
accepted by our customers or by other businesses in the marketplace, our business and operating results will be materially affected.

 Our
investment in our current research and development efforts may not provide a sufficient, timely return.

 The
development of document solutions software products is a costly, complex, and time-consuming process, and the investment in document
solutions software product development often involves a long wait until a return is achieved on such an investment. When cash is available,
we make and will continue to make significant investments in software research and development and related product opportunities. Investments
in new technology and processes are inherently speculative. Commercial success depends on many factors including the degree of innovation
of the products developed through our research and development efforts, sufficient support from our strategic partners, and effective
distribution and marketing. We may determine that certain product candidates do not have sufficient
potential to warrant the continued allocation of resources. These expenditures may adversely affect our operating results if they are not offset by increased revenues. We believe
that we must continue to dedicate a significant amount of resources to our research and development efforts in order to maintain our
competitive position. However, significant revenues from new product and service investments may not be achieved for a number of years,
if at all. Moreover, new products and services may not be profitable, and even if they are profitable, operating margins for new products
and businesses may not be as high as the margins we have experienced for our current or historical products and services.

 Our
products may contain defects that could harm our reputation, be costly to correct, delay revenues, and expose us to litigation.

 Our
products are highly complex and sophisticated and, from time to time, may contain design defects or software errors that are difficult
to detect and correct. Errors may be found in new software products or improvements to existing products after delivery to our customers.
If these defects are discovered, we may not be able to successfully correct such defects in a timely manner. In addition, despite the
tests we conduct on all of our products, we may not be able to fully simulate the environment in which our products will operate and,
as a result, we may be unable to adequately detect the design defects or software errors which may become apparent only after the products
are installed in an end-user's network. The occurrence of errors and failures in our products could result in the delay or the
denial of market acceptance of our products, and alleviating such errors and failures may require us to make significant expenditure
of our resources. The harm to our reputation resulting from product errors and failures may be materially damaging. Because we regularly
provide a warranty with our products, the financial impact of fulfilling warranty obligations may be significant in the future. Our agreements
with our strategic partners and end-users typically contain provisions designed to limit our exposure to claims. These agreements regularly
contain terms such as the exclusion of all implied warranties and the limitation of the availability of consequential or incidental damages.
However, such provisions may not effectively protect us against claims and the attendant liabilities and costs associated with such claims.
Accordingly, any such claim could negatively affect our business, operating results or financial condition.

 The
use of open-source software in our products may expose us to the risk of having to disclose the source code to our product, rendering
our software no longer proprietary and reducing or eliminating its value.

 Certain
open-source software is licensed pursuant to license agreements that require a user who distributes the open-source software as a component
of the user's software to disclose publicly part or all of the source code to the user's software. This effectively renders
what was previously proprietary software open-source software. As competition in our markets increases, we must strive to be cost-effective
in our product development activities. Many features we may wish to add to our products in the future may be available as open-source
software, and our development team may wish to make use of this software to reduce development costs and speed up the development process.
While we carefully monitor the use of all open-source software and try to ensure that no open-source software is used in such a way as
to require us to disclose the source code to the related product, such use could inadvertently occur. Additionally, if a third party
has incorporated certain types of open-source software into its software but has failed to disclose the presence of such open-source
software, and we embed that third-party software into one or more of our products, we could, under certain circumstances, be required
to disclose the source code to our product. This could have a material adverse effect on our business.

 The
loss of licenses to use third-party software or the lack of support or enhancement of such software could adversely affect our business.

 We
currently depend upon a limited number of third-party software products. If such software products were not available, we might experience
delays or increased costs in the development of our products. In certain instances, we rely on software products that we license from
third parties, including software that is integrated with internally-developed software, and which is used in our products to perform
key functions. These third-party software licenses may not continue to be available to us on commercially reasonable terms, and the related
software may not continue to be appropriately supported, maintained, or enhanced by the licensors. The loss by us of the license to use,
or the inability by licensors to support, maintain, and enhance any of such software, could result in increased costs or in delays or
reductions in product shipments until equivalent software is developed or licensed and integrated with internally-developed software.
Such increased costs or delays or reductions in product shipments could adversely affect our business.

 Financial
Risks

 We
need to continue to maintain an effective system of internal controls, in order to be able to report our financial results accurately
and timely and prevent fraud.

 Effective
internal control is necessary for us to provide reliable financial reports and prevent fraud. We maintain a small accounting and reporting
staff, concentrated in a few individuals. Any future weaknesses in our internal controls and procedures over financial reporting could
result in material misstatements in our consolidated financial statements not being prevented or detected. We may experience difficulties
or delays in completing remediation or may not be able to successfully remediate material weaknesses at all. Any material weakness or
unsuccessful remediation could affect our ability to file periodic reports on a timely basis and investor confidence in the accuracy
and completeness of our consolidated financial statements, which in turn could harm our business and have an adverse effect on our stock
price and our ability to raise additional funds.

 We
may not be able to generate sufficient cash to service any indebtedness that we may incur from time to time, which could force us to
sell assets, cease operations, or take other detrimental actions for our business.

 Our
ability to make scheduled payments on or to refinance any debt or contingent transaction obligations that we have or may incur
depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions
and to certain financial, business, and other factors beyond our control. We currently have approximately $1.3 million in principal
amount of debt maturing in December of 2025. In addition, prior to 2021, we operated with a history of losses. For 2024, we had net
loss of approximately $0.5 million, including $1.4 million in total non-cash share-based compensation expense, an increase of $0.8
million from 2023. For 2023, we had net income of approximately $0.5 million. For 2022, we had a net income of approximately zero
(break-even). For 2021, we had a net income of $1.4 million, including $0.8 million of PPP forgiveness income. For 2020, we had a
net loss of $2.2 million, including a change in fair value of earnout liabilities of $1.6 million. We have an accumulated deficit of
$21.6 million as of December 31, 2024. Our ability to meet our capital needs in the future will depend on many factors, including
maintaining and enhancing our operating cash flow and successfully
retaining and growing our client base in the midst of general economic uncertainty including an inflationary environment. We cannot
ensure that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium,
if any, and interest on any indebtedness.

 If
our cash flows and capital resources are at any time insufficient to fund our obligations, we may be forced to reduce or delay investments
and capital expenditures, or to sell assets, seek additional capital, restructure or refinance our indebtedness, or reduce or cease operations.
There can be no assurance that additional capital or debt financing will be available to us at any time. Even if additional capital is
available, we may not be able to obtain debt or equity financing on terms favorable to us. In the absence of such operating results and
resources, we could face substantial liquidity problems and might be required to reduce or curtail our operations.

 The
terms of our promissory notes will restrict our financing flexibility.

 The
terms of promissory notes we issued in 2022 contain standard negative covenants customary for transactions of this type. These negative
covenants may preclude or restrict our ability to obtain future debt and convertible debt financings without the prior approval of holders
of the previous notes. The events of default are also customary for transactions of this type, including default in timely payment of
principal or interest, failure to observe or perform any covenant or agreement contained in the convertible note and other transaction
documents, the commencement of bankruptcy or insolvency proceedings, and failure to timely file Exchange Act filings.

 If
our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove to be incorrect,
our operating results could fall below expectations of securities analysts and investors,

 resulting
in a decline in our stock price.

 The
preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We
base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the
circumstances, as provided in "Management's Discussion and Analysis of Financial Condition and Results of
Operations-Critical Accounting Policies and Estimates" in this Annual Report on Form 10-K, the results of which form the basis
for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our
operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our
assumptions, which could cause our operating results to fall below the expectations of securities analysts and investors, resulting
in a decline in our stock price. Significant assumptions and estimates used in preparing our consolidated financial statements
include those related to revenue recognition, stock compensation, and deferred contract costs and commission expense.

 A
significant downturn in our business may not be immediately reflected in our operating results because of the way we recognize revenue.

 We
recognize revenue from subscription agreements ratably over the terms of these agreements, which are typically one year. As a result,
a significant portion of the revenue we report in each quarter is generated from customer agreements entered into during previous periods,
which is reflected as deferred revenue on our balance sheet. Consequently, a decline in new or renewed subscriptions, or a downgrade
of renewed subscriptions to less-expensive editions, in any one quarter may not be fully reflected in our revenue in that quarter, and
may negatively affect our revenue in future quarters. If contracts having significant value expire and are not renewed or replaced at
the beginning of a quarter or are downgraded, our revenue may decline significantly in that quarter and subsequent quarters.

 Legal
and Regulatory Risks

 Our
contracts with government clients subject us to risks including early termination, audits, investigations, sanctions, and penalties.

 A
significant portion of our revenues comes from contracts with state and local governments, school districts, and their respective agencies,
which may terminate most of these contracts at any time, without cause. As discussed above, government contracts constitute a significant
portion of our total revenues. Contracts at the state and local levels are subject to government funding authorizations. Additionally,
government contracts are generally subject to audits and investigations that could result in various civil and criminal penalties and
administrative sanctions, including termination of contracts, refund of a portion of fees received, forfeiture of profits, suspension
of payments, fines and suspensions, or debarment from future government business.

 We
are subject to the reporting requirements of federal securities laws, causing us to make significant compliance-related expenditures
that may divert resources from other projects, thus impairing its ability to grow.

 We
are subject to the information and reporting requirements of the Exchange Act, and other federal securities laws, including the Sarbanes-Oxley
Act. The costs of preparing and filing annual and quarterly reports, proxy statements and other information with the Commission and furnishing
audited reports to stockholders causes our expenses to be higher than most other similarly-sized companies that are privately held. As
a public company, we expect these rules and regulations to continue to keep our compliance costs high in 2025 and beyond, and to make
certain activities more time-consuming and costly. As a public company, we also expect that these rules and regulations may make it more
difficult and expensive for us to obtain director and officer liability insurance in the future, and we may be required to accept reduced
policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult
for us to attract and retain qualified persons to serve on our board of directors or as executive officers.

 The
elimination of monetary liability against our directors, officers, agents and employees under Nevada law, and the existence of indemnification
rights to such persons, may result in substantial expenditures by us and may discourage lawsuits against our directors, officers, agents
and employees.

 Our
articles of incorporation and bylaws contain provisions permitting us to eliminate the personal liability of our directors, officers,
agents and employees to the Company and our stockholders for damages for breach of fiduciary duty to the extent provided by Nevada law.
We may also have contractual indemnification obligations under our employment agreements with our officers. The foregoing indemnification
obligations could result in our incurring substantial expenditures to cover the cost of settlement or damage awards against directors,
officers, agents and employees, which we may be unable to recoup. These provisions and resultant costs may also discourage our Company
from bringing a lawsuit against certain individuals for breaches of their fiduciary duties, and may similarly discourage the filing of
derivative litigation by our stockholders against our directors, officers, agents and employees even though such actions, if successful,
might otherwise benefit us and our stockholders.

 Security
breaches may harm our business.

 Any
security breaches, unauthorized access, unauthorized usage, virus or similar breach or disruption could result in loss of confidential
information, damage to our reputation, early termination of our contracts, litigation, regulatory investigations or other liabilities.
Our clients may use our products and services to handle personally identifiable information, sensitive personal information, protected
health information, or information that is otherwise confidential. If our security measures or those of our third-party data centers
are breached as a result of third-party action, employee error, malfeasance or otherwise and, as a result, someone obtains unauthorized
access to customer data, our reputation could be damaged, our business may suffer and we could incur significant liability.

 We have certain
measures to protect our information systems against unauthorized access and disclosure of our confidential information and confidential
information belonging to our customers. We have policies and procedures in place dealing with data security and records retention. However,
there is no assurance that the security measures we have put in place will be effective in every case.

There has also been an increase in the incidence of data breaches and ransomware events in public companies operating in the US,
resulting in unfavorable publicity and high amounts of damages against the breached companies, including penalties, fines, litigation, remediation costs, increased insurance costs, and other potential liabilities, in each case depending upon
the nature of the information disclosed. Breaches, or perceived breaches, in security could result in a negative impact for us and for
our customers, potentially affecting our business, assets, revenues, brand, and reputation. Concerns about our practices with regard to the collection, use, disclosure, or security of personal
information or other privacy-related matters, even if unfounded and even if we are in compliance with applicable laws, could damage
our reputation and harm our business.

 We
may become involved in litigation that may materially adversely affect us.

 From
time to time in the ordinary course of our business, we may become involved in various legal proceedings, including commercial, infringement,
cybersecurity, employment, class action, workers' compensation, and other litigation and claims, as well as governmental and other
regulatory investigations and proceedings. We provide business management solutions that we believe are critical to the operations of
our customers' businesses and provide benefits that may be difficult to quantify. Any failure of a customer's system installed
by us or of the services offered by us could result in a claim for substantial damages against us, regardless of our responsibility for
the failure. Although we attempt to limit our contractual liability for damages resulting from negligent acts, errors, mistakes, or omissions
in rendering our services, we cannot assure you that the limitations on liability we include in our agreements will be enforceable in
all cases, or that those limitations on liability will otherwise protect us from liability for damages. There can be no assurance that
any insurance coverage we may have in place will be adequate or that current coverages will remain available at acceptable costs. Such
matters can be time-consuming, divert management's attention and resources, and cause us to incur significant expenses. Furthermore,
because litigation is inherently unpredictable, the results of any such actions may have a material adverse effect on our business, operating
results, or financial condition.

 Any
claim that we infringe on a third party's intellectual property could materially increase costs and materially harm our ability
to generate future revenues and profits.

 Claims
of infringement are common in the software industry and as related legal protections are applied to software products. Although we are
not aware of any infringement on the rights of third parties, third parties may assert infringement claims against us in the future.
Although most of our technology is proprietary in nature, we do include certain third-party software in our products. In these cases,
this software is licensed from the entity holding the intellectual property rights. Although we believe that we have secured proper licenses
for all third-party software that is integrated into our products, third parties may assert infringement claims against us in the future.
The third parties making these assertions and claims may include non-practicing entities (known as "patent trolls") whose
business model is to obtain IP-licensing revenues from operating companies, such as ours. Any such assertion, regardless of merit, may
result in litigation or may require us to obtain a license for the intellectual property rights of third parties. Such licenses may not
be available, or they may not be available on reasonable terms. In addition, such litigation could be time-consuming, disruptive to our
ability to generate revenues or enter into new market opportunities, and may result in significantly increased costs as a result of our
defense against those claims or our attempt to license the intellectual property rights or rework our products to avoid infringement
of third-party rights to ensure they comply with judicial decisions. Our agreements with our partners and end-users typically contain
provisions that require us to indemnify them, with certain limitations on the total amount of such indemnification, for damages sustained
by them as a result of any infringement claims involving our products. Any of the foregoing results of an infringement claim could have
a significant adverse impact on our business and operating results, as well as our ability to generate future revenues and profits.

 Risks
Relating to Our Common Stock

 We
may have to issue additional securities at prices which may result in substantial dilution to our stockholders.

 If
we raise additional funds through the sale of equity or convertible debt, our current stockholders' percentage ownership will be
reduced. In addition, these transactions may dilute the value of ordinary shares outstanding. We may have to issue securities that may
have rights, preferences, and privileges senior to our common stock. We cannot provide assurance that we will be able to raise additional
funds on terms acceptable to us, if at all. If future financing is not available or is not available on acceptable terms, we may not
be able to fund our future needs, which would have a material adverse effect on our business plans, prospects, results of operations,
and financial condition.

of our common stock that have not been registered under the Securities Act, regardless of whether such shares are restricted or unrestricted,
are subject to resale restrictions imposed by Rule 144.

 Pursuant
to Rule 144 of the Securities Act of 1933, as amended (the "Securities Act"), a "shell company" is defined as
a company that has no or nominal operations, and either no or nominal assets, assets consisting solely of cash and cash equivalents,
or assets consisting of any amount of cash and cash equivalents and nominal other assets. As such, we were a shell company pursuant to
Rule 144 prior to 2012. Even though we are no longer a shell company, investors may be reluctant to invest in our securities because
securities of a former shell company may not be as freely tradable as securities of companies that are not former "shell companies."
In addition, since we are a former shell company, shareholders with restricted securities cannot rely upon Rule 144 for sales of restricted
securities in the event that we are not current in our filing obligations under the Exchange Act.

 An
active, liquid and orderly market for our common shares may not be sustained, and you may not be able to sell your common shares.

 Our
common shares trade on the NYSE American exchange. We cannot assure you that an active trading market for our common shares will be sustained.
The lack of an active market may impair your ability to sell the common shares at the time you wish to sell them or at a price that you
consider reasonable. An inactive market may also impair our ability to raise capital by selling common shares and may impair our ability
to acquire other businesses, applications or technologies using our common shares as consideration, which, in turn, could materially
adversely affect our business.

 We
are subject to the continued listing requirements of the NYSE American. If we are unable to comply with such requirements, our common
shares would be delisted from the NYSE American, which would limit investors' ability to effect transactions in our common shares
and subject us to additional trading restrictions.

 Our
common shares are currently listed on the NYSE American. In order to maintain our listing, we must maintain certain share prices, financial
and share distribution targets, including maintaining a minimum amount of shareholders' equity and a minimum number of public shareholders.
In addition to these objective standards, the NYSE American may delist the securities of any issuer if, in its opinion, the issuer's
financial condition and/or operating results appear unsatisfactory; if an issuer fails to comply with the NYSE American's listing
requirements; or if any other event occurs or any condition exists which makes continued listing on the NYSE American, in its opinion,
inadvisable. If the NYSE American delists our common shares from trading on its exchange and we are not able to list our securities on
another national securities exchange, we expect our common shares would qualify to be quoted on an over-the-counter market. If this were
to occur, we could face significant material adverse consequences, including: a limited availability of market quotations for our securities;
reduced liquidity for our securities; a determination that our common shares are a "penny stock" which will require brokers
trading in our common shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary
trading market for our securities; a limited amount of news and analyst coverage; and a decreased ability to issue additional securities
or obtain additional financing in the future.

 The
market price of our common stock may limit the appeal of certain alternative compensation structures that we might offer to the high-quality
employees we seek to attract and retain.

 If
the market price of our common stock performs poorly, such performance may adversely affect our ability to retain or attract critical
personnel. For example, if we were to offer options to purchase shares of our common stock as part of an employee's compensation
package, the attractiveness of such a compensation package would be highly dependent upon the performance of our common stock.

 In
addition, any changes made to any of our compensation practices which are made necessary by governmental regulations or competitive pressures
could adversely affect our ability to retain and motivate existing personnel and recruit new personnel. For example, any limit to total
compensation which may be prescribed by the government, or any significant increases in personal income tax levels in the United States,
may hurt our ability to attract or retain our executive officers or other employees whose efforts are vital to our success.

eligible for future sale may adversely affect the market price of our common stock.

 From
time to time, certain of our stockholders may be eligible to sell all or some of their shares of common stock by means of ordinary brokerage
transactions in the open market pursuant to Rule 144 of the Securities Act, subject to certain limitations. Any substantial sale of our
common stock pursuant to Rule 144 may have an adverse effect on the market price of our common stock.

 The
price of our common stock may fluctuate significantly and lead to losses by stockholders.

 The
common stock of public companies can experience extreme price and volume fluctuations. These fluctuations often have been unrelated or
out of proportion to the operating performance of such companies. We expect our stock price to be similarly volatile. These broad market
fluctuations may continue and could harm our stock price. Any negative change in the public's perception of the prospects of our
business or companies in our industry could also depress our stock price, regardless of our actual results. Factors affecting the trading
price of our common stock may include:

 Variations
 in operating results;

 Announcements
 of technological innovations, new products or product enhancements, strategic alliances, or significant agreements by us or by competitors;

 Recruitment
 or departure of key personnel;

 Litigation,
 legislation, regulation, or technological developments that adversely affect our business; and

 Market
 conditions in our industry, the industries of our customers, and the economy as a whole.

 Further,
the stock market in general, and securities of smaller companies in particular, can experience extreme price and volume fluctuations.
Continued market fluctuations could result in extreme volatility in the price of our common stock, which could cause a decline in the
value of our common stock. You should also be aware that price volatility might be worse if the trading volume of our common stock is
low. Occasionally, periods of volatility in the market price of a company's securities may lead to the institution of securities
class action litigation against a company. Due to the volatility of our stock price, we may be the target of such securities litigation
in the future. Such legal action could result in substantial costs to defend our interests and a diversion of management's attention
and resources, each of which would have a material adverse effect on our business and operating results.

 FINRA
sales practice requirements may limit a shareholder's ability to buy and sell our stock.

 The
Financial Industry Regulatory Authority has adopted rules that require that in recommending an investment to a customer, a broker-dealer
must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative, low-priced
securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's
financial status, tax status, investment objectives, and other information. Under interpretations of these rules, FINRA believes that
there is a high probability that low-priced securities will not be suitable for at least some customers. The FINRA requirements make
it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and
sell our stock and have an adverse effect on the market for our shares.

 We
do not expect to pay any dividends on our common stock for the foreseeable future.

 We
do not anticipate that we will pay any cash dividends to holders of our common stock in the foreseeable future. Instead, we plan to retain
any earnings to maintain and expand our existing operations. The declaration, payment, and amount of any future dividends, if any, will
be made at the discretion of our board of directors, and will depend upon, among other things, the results of our operations, cash flows
and financial condition, operating and capital requirements, and other factors that the board of directors considers relevant. We currently
are subject to loan covenants that would require consent from our lenders in order to pay any dividends prior to repayment of certain
outstanding loans. In addition, any future credit facilities we enter into may contain terms prohibiting or limiting the amount of dividends
that may be declared or paid on our common stock.

 General
Risks

 Global
economic uncertainty is likely to affect our operating results or financing in ways that are hard to predict or to defend against.

 Our
overall performance depends on economic conditions. The United States' and world economies are currently recovering from
recent inflation and higher interest rates, although uncertainty posed by the imposition of new tariffs, ongoing conflicts in the
Middle East and Ukraine, global sanctions on Russia, and trade tensions between the US and China, may continue to adversely impact
the business community and financial markets for some time. Moreover, instability in the global economy affects countries, including
the United States, with varying levels of severity, which makes the impact on our business complex and unpredictable. As an example,
our IntelliCloud Payables Automation Solution is currently targeted to industries such as home-building and construction, which may
be adversely affected by the imposition of new tariffs. During adverse economic conditions, many customers delay or reduce
technology purchases. Contract negotiations are likely to become more protracted, or conditions could result in reductions in sales
of our products, longer sales cycles, pressure on our margins, difficulties in collection of accounts receivable or delayed
payments, increased default risks associated with our accounts receivable, slower adoption of new technologies, and increased price
competition. In addition, the current rise in interest rates in the United States and global credit markets could adversely impact
our ability to complete sales of our products and services, including subscription renewals. Any of these prolonged events, are
likely to cause a curtailment in government or corporate spending and delay or decrease customer purchases, and adversely affect our
business, financial condition, and results of operations.

 Businesses
and industries throughout the world are very tightly connected to each other. Thus, financial developments seemingly unrelated to us
or to our industry may adversely affect us over the course of time. For example, credit contraction in financial markets may hurt our
ability to access credit in the event that we require significant access to credit for other reasons. Similarly, volatility in our stock
price could hurt our ability to raise capital for the financing of acquisitions or other reasons. Any of these events, or any other events
caused by volatility in domestic or international financial markets, may have a material adverse effect on our business, operating results,
and financial condition.

 Any
disruption of service at data centers that house our data could harm our business.

 Our
users expect to be able to access our solutions 24-hours a day, seven-days a week, without interruption. We have computing and communications
hardware operations located in data centers owned and operated by third parties. We do not control the operation of these data centers
and we are therefore vulnerable to any security breaches, power outages or other issues the data centers experience. These data centers are vulnerable to damage or interruption from human error, malicious acts, earthquakes, hurricanes, tornados, floods,
fires, war, terrorist attacks, power losses, hardware failures, systems failures, telecommunications failures and similar events. The
occurrence of a natural disaster or an act of terrorism, vandalism or other misconduct, or a decision to close the data centers without
adequate notice or other unanticipated problems could result in lengthy interruptions in availability of our solutions.

 Any
changes in third-party service levels at our data centers or any errors, defects, disruptions or other performance problems with our
solutions could harm our reputation and may damage our customers' businesses. Interruptions in availability of our solutions might
reduce our revenue, cause us to issue credits to customers, subject us to potential liability, and cause customers to terminate their
subscriptions or decide not to renew their subscriptions with us.

 If
we are not able to attract and retain top employees, our ability to compete may be harmed.

 Our
performance is substantially dependent on the performance of our executive officers and key employees. The loss of the services of any
of our executive officers or other key employees could significantly harm our business. Our success is also highly dependent upon our
continuing ability to identify, hire, train, retain, and motivate highly-qualified management, technical, sales, and marketing personnel.
In particular, the recruitment of top software developers and experienced salespeople remains critical to our success. Competition for
such people is intense, substantial, and continuous, especially in the current environment of labor shortage, and we may not be able
to attract, integrate, or retain highly-qualified technical, sales, or managerial personnel in the future. In addition, in our effort
to attract and retain critical personnel, we may experience increased compensation costs that are not offset by either improved productivity
or higher prices for our products or services.

 Failure
to protect our intellectual property could harm our ability to compete effectively.

 We
are highly dependent on our ability to protect our proprietary technology. We rely on a combination of intellectual property laws, trademark
laws, as well as non-disclosure agreements and other contractual provisions to establish and maintain our proprietary rights. We intend
to protect our rights vigorously; however, there can be no assurance that these measures will be successful. Enforcement of our intellectual
property rights may be difficult or cost prohibitive. While U.S. copyright laws may provide meaningful protection against unauthorized
duplication of software, software piracy has been, and is expected to be, a persistent problem for the software industry, and piracy
of our products represents a loss of revenue to us. Certain of our license arrangements may require us to make a limited confidential
disclosure of portions of the source code for our products, or to place such source code into escrow for the protection of another party.
Although we will take considerable precautions, unauthorized third parties, including our competitors, may be able to: (i) copy certain
portions of our products, or (ii) reverse engineer or obtain and use information that we regard as proprietary. Also, our competitors
could independently develop technologies that are perceived to be substantially equivalent or superior to our technologies. Our competitive
position may be adversely affected by our possible inability to effectively protect our intellectual property.

 ITEM
1B. UNRESOLVED STAFF COMMENTS

 Not
applicable.

 ITEM
1C. CYBERSECURITY

 We
have implemented various processes designed to identify, assess and manage material risks from cybersecurity threats to our information
networks, third-party hosted services, communications systems, hardware and software (collectively, our "Systems"), and our
data and our clients' data (together, "Data").

 Our
cybersecurity risk management efforts leverage the National Institute of Standards and Technology (NIST) cybersecurity framework, that
also aligns with the SP800-53 r5 Information Security controls framework. Our cybersecurity personnel identify and assess risks using
various methods and security tools designed to help prevent, identify, protect, detect, escalate, respond, and recover from identified
vulnerabilities and security incidents in a timely manner.

 We
maintain various technical, physical, and organizational measures, in the form of policies, standards, processes, and technical capabilities,
designed to manage and mitigate material risks from cybersecurity threats to our Systems and Data, including, among other things, risk
and threat assessment, internal reporting, annual and ongoing cybersecurity awareness training for employees, mechanisms to detect and
monitor unusual network activity, as well as threat detection, containment, incident response and backup recovery tools.

 We
conduct tests of our cybersecurity program on a regular basis that are designed to identify our cybersecurity risks. We use third-party
security service providers and cybersecurity consultants to assist us from time to time to identify, assess, and manage material risks
from cybersecurity threats and review our cybersecurity program. The results of such reviews are reported to certain members of our senior
management, who evaluate material risks from cybersecurity threats against our overall business objectives and report to our board of
directors, which evaluates our overall enterprise risk. Within our senior management, our Chief Financial Officer and Chief Technology
Officer (CTO) review our cybersecurity program at least quarterly. Our CTO is one of our founders and has been in technology since 1996.
One of our board members has been employed with a cyber security company.

 We
use third-party service providers to perform a variety of functions throughout our business, such as Amazon Web Services, Expedient (Columbus,
OH), and Corespace (Dallas, TX). Depending on the nature of the services provided, certain providers are subject to cybersecurity risk
assessments at the time of onboarding. We also use various inputs to assess the risk of our third-party service providers, including
information supplied by them.

 While
we have not, as of the date of this Annual Report on Form 10-K, experienced a cybersecurity incident that resulted in a material adverse
impact to our business or operations, there can be no guarantee that we will not experience such an incident in the future. For a description
of the risks from cybersecurity threats that may materially affect the Company and how they may do so, please see "Risk Factors"
included in Part I, Item 1A of this Annual Report on Form 10-K, including "Legal and Regulatory Risks" and "General
Risks."

 ITEM
2. PROPERTIES

 On
January 1, 2010, we entered into an agreement to lease 6,000 rentable square feet of office space in Columbus, Ohio, used for our corporate
headquarters, Document Conversion operations, and a small portion of our Document Management operations. The lease commenced on January
1, 2010 and, pursuant to a lease extension dated September 18, 2021, the lease expires on December 31, 2028. The monthly rental payment
is $5,400, with gradually higher annual increases each January up to $5,850 for the final year.

 We
lease 36,000 square feet of space in Madison Heights, Michigan as the main facility for our Document Conversion operations. 20,000 square
feet is used for records storage services, with the remainder of the space used for production, sales, and administration. The monthly
rental payment is $44,929, with gradually higher annual increases each September up to $45,828 for the final year, and with a lease term
continuing until August 31, 2026.

 We
also lease a separate 37,000 square foot building in Sterling Heights, Michigan for our Document Conversion operations, with most of
the space used for document storage, except approximately 5,000 square feet, which is used for production. The monthly rental payment
is $22,312, with gradually higher annual increases each May up to $24,171 for the final year, and with a lease term continuing to April
30, 2028.

 We
lease office space in Traverse City, Michigan for Document Conversion production. The monthly rental payment is $5,100, with a lease
term continuing until January 31, 2026.

 We
also lease and use vehicles for logistics pertaining to our Document Conversion segment, primarily pickup and delivery of client materials,
including storage and retrieval operations. The monthly rental payments for these vehicles total $7,605, with lease terms continuing
until September 30, 2028.

 We
also lease and use an additional temporary office space in Madison Heights for our Document Conversion operations, with a monthly rental
payment of $1,605 and a lease term on a month-to-month basis. We have made an accounting policy election to not record a right-of-use
asset and lease liability for short-term leases, which are defined as leases with a lease term of 12 months or less. Instead, the lease
payments are recognized as rent expense in the general and administrative expenses on the statements of income.

 For
each of the above listed leases, management has determined it will utilize the base rental period and have not considered any renewal
periods.

 We
own and operate, for our Document Conversion segment, an extensive collection of the specialized equipment necessary for scanning images,
converting microfilm to digital images or microfiche or vice-versa. We also have the ability to provide on-site capture operations for
clients needing such services.

 ITEM
3. LEGAL PROCEEDINGS

 From
time to time, we are subject to ordinary routine litigation and claims incidental to our business. We are not currently involved in any
legal proceedings that we believe to be material.

 ITEM
4. MINE SAFETY DISCLOSURE

 Not
applicable.

 Part
II

 ITEM
5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Market
Information

 Our common stock trades on the NYSE American under the symbol "INLX."

 Holders

 As
of March 19, 2025 we had 79 stockholders of record. Such number of record stockholders does not include additional stockholders or
other beneficial owners whose shares are held in street or nominee name by banks, brokerage firms, and other institutions on their behalf.

 Dividends

 Dividends
may be declared and paid out of legally available funds at the discretion of our board of directors. No dividends on our common stock were paid in either of the two most recent fiscal years, and we do not anticipate
paying dividends on our common stock in the foreseeable future. The timing, amount and form of dividends, if any, will depend on, among
other things, our results of operations, financial condition, cash requirements and other factors deemed relevant by our board of directors.
We currently intend to utilize all available funds to develop our business.

 Unregistered
Securities Issuances in Fiscal Year 2024

 There
have been no unregistered securities issuances in Fiscal Year 2024 that have not previously been disclosed in Current Reports on 8-K
or Forms 10-Q.

 Issuer
Purchase of Securities

 None.

 ITEM
6. [RESERVED]

 ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 The
following management's discussion and analysis of financial conditions and results of operations for the fiscal years ended December
31, 2024, and 2023 should be read in conjunction with our consolidated financial statements and the notes to those consolidated financial
statements that are included elsewhere in this Annual Report on Form 10-K. In this Annual Report, we sometimes refer to the twelve month
period ended December 31, 2024 as 2024, and to the twelve month period ended December 31, 2023 as 2023.

 We
caution you that any forward-looking statements included in this section are not guarantees of future performance or events and are subject
to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the
statements and the projections upon which the statements are based. Factors that may affect our results include, but are not limited
to, the risk factors that are included in Part I, Item 1A of this report.

 How
We Evaluate our Business Performance and Opportunities

 The
major qualitative and quantitative factors we consider in the evaluation of our operating results include the following:

 With
 respect to our Document Management segment, our current strategy is to focus on cloud-based delivery of our software products. Our
 observation of industry trends leads us to anticipate that cloud-based delivery will continue to be our principal software business
 and a primary source of revenues for us, and we are seeing our customers migrate to cloud-based services. When we evaluate our results,
 we assess whether our cloud-based software revenues are increasing, relative to prior periods and relative to other sources of revenue.

 With
 respect to our Document Conversion segment, our strategy is to maintain and grow our core document conversion business, while simultaneously
 leveraging our software products and services to provide more attractive total digital transformation solutions for the customers
 of our Document Conversion segment. Accordingly, when we evaluate our results for Document Conversion, we will assess whether our
 revenues increase with respect to the segment's services, relative to prior periods, but we will also be assessing whether
 Document Conversion customers begin to make purchases of other products or services.

 We
 are focused upon sales of our document services and software solutions through resellers and directly to our customers, with a further
 focus on select vertical markets. We assess whether our sales resulting from relationships with resellers are increasing, relative
 to prior periods and relative to direct sales to customers, and whether reseller or direct efforts offer the best opportunities for
 growth in our targeted vertical markets.

 Our
 software sales cycle averages 1-3 months; however, large projects can be longer, lasting 4-6 months. When a software project begins,
 we generally perform pre-installation assessment, project scoping, and implementation consulting. On the other hand, our document
 conversion services often contain a very short sales cycle, but we can have a backlog of work orders not yet processed. Therefore,
 when we plan our business and evaluate our results, we consider the revenue we expect to recognize from projects in our late-stage
 software pipeline and in our document conversion services backlog queue.

 We
 monitor our costs and capital needs to ensure efficiency as well as an adequate level of support for our business plan.

 While
 we are constantly focused on organic growth, we also continually monitor potential acquisitions of complementary solutions and expertise
 that are consistent with our core business. We look for acquisitions that can add value for our customers and are expected to be
 accretive to our financial performance.

 Executive
Overview of Results

 2024 results reflected our current strategy to grow our SaaS revenue. All comparison amounts of 2024 over 2023
represent organic growth. Our most recent acquisition was in 2022 and has no comparative impact on the periods reported. Our sales
revenues in software as a service and in professional services, primarily document conversion, provided our revenue growth, more
than offsetting expected weakness in storage and retrieval and sales of direct premise software. We generated strong cash flow in
2024, enabling us to pay down our notes payable by $1,625,000.

 Operating
expenses for 2024 increased 23.7%, primarily driven by share-based compensation. In 2024, we recorded an incremental $805,955
expense related to our restricted stock awards to employees and an incremental $254,885 related to new stock option grants to
employees and directors, bringing the grand total of share-based compensation to $1,496,774 in
2024 compared to $662,653 in 2023. The balance of our operating expenses (excluding cost of revenues) increased 14.0% year over year,
primarily driven by intentional investments in sales and marketing to accelerate revenue growth and investments in general and
administrative to build structure in order to better scale, as well as expanding our development team to bring product enhancements
to market more swiftly.

 Below
are our key financial results for 2024 (consolidated unless otherwise noted):

 were $18,018,373, representing revenue growth of 6.7% year over year.

 Cost
 of revenues was $6,493,447, an increase of 2.7% year over year.

 Operating
 expenses (excluding cost of revenues) were $11,698,431, an increase of 23.7% year over year. This amount includes share-based
 compensation expense of $1,496,744 in 2024 compared to 662,653 in 2023.

 Loss
 from operations was $173,505, compared to income from operations of $1,107,469 for 2023.

 Net
 loss was $546,215 with basic and diluted net loss per share of $0.13, compared to net income of $519,266 with basic and diluted net
 income per share of $0.13 and $0.11, respectively, for 2023.

 Net
 cash provided by operating activities was $3,858,160, compared to $784,659 for 2023.

 Investing
 activities, including both capitalization of internal use software and purchases of property and equipment, were $827,773, compared
 to $548,077 for 2023.

 Financing activities included $1,625,000 in prepayments of our notes payables,
as a result of our strong operating cash flow.

 As
 of December 31, 2024, we had 154 employees, including 16
 part-time employees, compared to 171 employees, including 31 part-time employees, as of December 31, 2023.

 Financial
Impact of Current Economic Conditions

 Our
overall performance depends on economic conditions, and our continuing growth will be due in part to continued growth in the US economy
and stability of state and local governmental spending in the US. We do not have direct risk exposure to federal spending levels, but we could face exposure indirectly if federal spending reductions
have a corresponding effect on state and local budgets, particularly in the K-12 Education sector.
Our performance will also continue to be affected by uncertainty with respect to wage inflation,
as well as slowing-to-modest global growth rates.

 Volatility from increased trade protectionism is likely
to have a minimal direct impact on us because we consume relatively little in raw materials. However, we have customers in industries
that are likely to be affected, such as homebuilding and construction. Any industry-specific or macroeconomic downturn could affect our
customers' and potential customers' budgets for technology procurement and stall our growth plans. However, absent economic
disruptions, and based on the current trend of our business operations and our continued focus on strategic initiatives to grow our customer
base, we believe in the strength of our brand and our focus on our strategic priorities.

 Reportable
Segments

 We
have two reportable segments: Document Management and Document Conversion. These reportable segments are discussed above under "Item 1. Business."

 Results
of Operations

 The
following table sets forth our revenues by reportable segment for the periods indicated:

 2024

 2023

 Revenues by segment

 $
 7,523,874

 $
 7,298,264

 10,494,499

 9,588,117

 Total revenues

 $
 18,018,373

 $
 16,886,381

 Gross profit by segment

 $
 6,545,612

 $
 6,133,130

 4,979,314

 4,430,825

 Total gross profit

 $
 11,524,926

 $
 10,563,955

 The
following table sets forth our revenues by revenue source for the periods indicated:

 2024

 2023

 Revenues:

 $
 32,946

 $
 100,260

 5,688,936

 5,133,215

 1,410,387

 1,407,064

 9,985,028

 9,167,428

 901,076

 1,078,414

 Total revenues

 $
 18,018,373

 $
 16,886,381

 The
following tables sets forth our revenues by revenue source and segment for the periods indicated:

 2024

 2023

 Document management segment revenues:

 $
 32,946

 $
 100,260

 5,688,936

 5,133,215

 1,410,387

 1,407,064

 391,605

 657,725

 Total document management segment revenues

 $
 7,523,874

 $
 7,298,264

 2024

 2023

 Document conversion segment revenues:

 $
 9,593,423

 $
 8,509,703

 901,076

 1,078,414

 Total document conversion segment revenues

 $
 10,494,499

 $
 9,588,117

 Our
total revenues in 2024 increased by $1,131,992, or 6.7%, over 2023 revenues, driven by software as a service and our document
conversion professional services, more than offsetting expected weakness in storage and retrieval, expected inactivity in software
maintenance services sales, and volatility in sales of direct premise software and document management professional
services.

 Sale
of Software Revenues

from the sale of software principally consist of sales of additional or upgraded software licenses and applications to existing customers
and resellers. Revenues from the sale of software, which are reported as part of our Document Management segment decreased by $67,314,
or 67.1% during 2024 compared to 2023.

 These
period over period changes are due to timing of direct sales projects compared to the same periods in 2023. We expect the volatility
of this revenue line item to continue as the frequency of on-premise software solution sales decreases over time and project timing is
unpredictable.

as a Service Revenues

 We
provide access to our software solutions as a service, accessible through the internet. Our customers typically enter into our software
as a service agreement for periods of one year or more. Under these agreements, we generally provide access to the applicable software,
data storage and related customer assistance and support. Revenues from the sale of software as a service, which are reported as part
of our Document Management segment increased by $555,721, or 10.8% in 2024 compared to 2023. This increase was primarily the result of
new cloud-based solution sales, primarily our IntelliCloud Payables Automation Solution, as well as expanded data storage, user seats,
and hosting fees for existing customers. Those growth areas were partially offset by weakness in our content management solutions, particularly
YellowFolder in K-12, which was impacted by higher than normal churn rate in those customers.

Maintenance Services Revenues

maintenance services revenues consist of fees for post-contract customer support services provided to license (premise-based) holders
through support and maintenance agreements. These agreements allow our customers to receive technical support, enhancements and upgrades
to new versions of our software products when and if available. A substantial portion of these revenues were generated from renewals
of maintenance agreements, which typically run on a year-to-year basis. Revenues from the sale of software maintenance services, which
are reported as part of our Document Management segment, increased by $3,323, or 0.2%, in 2024 compared to 2023. The small increase in
these revenues in 2024 compared to 2023, consistent with previous years and expectation, was driven by expansion of services with existing
customers and price increases being partially offset by normal attrition.

 Professional
Services Revenues

 Professional
services revenues primarily consist of revenues from document scanning and conversion services, plus consulting, discovery,
training, and advisory services to assist customers with document management needs. These revenues include arrangements that do not
involve the sale of software. Of our professional services revenues during 2024, $9,593,423 was derived from our Document Conversion
operations and $391,605 was derived from our Document Management operations. Our overall professional services revenues increased by
$817,600, or 8.9%, in 2024 compared to 2023. This increase is the result of a significant project in our Document Conversion segment
during the year, along with realized price increases in late 2023, more than offsetting fewer projects in our Document Management
segment, which can be more volatile with its significantly smaller volumes. Our largest customer awards long-term professional
services contracts through a competitive bidding process that is open as of the date of this Report. We believe we are well suited
to continue to provide services to this client, but there can be no assurance that we will be awarded continuing contracts or that
our work volumes with this customer will continue at their current levels and/or pricing. Any reduction in contract volume or
pricing could have a significant adverse impact on our future professional services revenues as well as our overall revenues,
margins, net income and cash flows next year.

 Storage
and Retrieval Services Revenues

 We
provide document storage and retrieval services to customers, primarily in Michigan. Revenues from storage and retrieval services, which
are reported as part of our Document Conversion segment, decreased by $177,338, or 16.4%, during 2024 compared to 2023. This decrease
was the result of a reduction in volume of work from our largest storage and retrieval customer, Rocket Mortgage, due to the continued
impact of the slowdown in the home mortgage and refinancing industry.

 Costs
of Revenues and Gross Profits

 The
following table sets forth our cost of revenues by reportable segment for the periods indicated:

 2024

 2023

 Cost of revenues by segment

 $
 978,262

 $
 1,165,134

 5,515,185

 5,157,292

 Total cost of revenues

 $
 6,493,447

 $
 6,322,426

 The
following table sets forth our cost of revenues, by revenue source, for the periods indicated:

 2024

 2023

 Cost of revenues:

 $
 8,486

 $
 25,736

 856,774

 889,135

 57,667

 59,373

 5,222,517

 4,992,826

 348,003

 355,356

 Total cost of revenues

 $
 6,493,447

 $
 6,322,426

 The
following tables sets forth our cost of revenues by revenue source and segment for the periods indicated:

 2024

 2023

 Document management segment cost of revenues:

 $
 8,486

 $
 25,736

 856,774

 889,135

 57,667

 59,373

 55,335

 190,890

 Total document management segment cost of revenues

 $
 978,262

 $
 1,165,134

 2024

 2023

 Document conversion segment cost of revenues:

 $
 5,167,182

 $
 4,801,936

 348,003

 355,356

 Total document conversion segment cost of revenues

 $
 5,515,185

 $
 5,157,292

 Our
total cost of revenues during 2024 increased by $171,021 or 2.7%, over 2023. Our cost of revenues for our Document Management segment
decreased by $186,872, or 16.0%, impacted by the reduced volume in sales of software and professional services in that segment, as well
as some efficiencies from scale. Our cost of revenues for our Document Conversion segment increased by $357,893, or 6.9%, in 2024 compared
to 2023, corresponding with the increase in revenues.

 2024

 2023

 Gross profit:

 $
 24,460

 $
 74,524

 4,832,162

 4,244,080

 1,352,720

 1,347,691

 4,762,511

 4,174,602

 553,073

 723,058

 Total gross profit

 $
 11,524,926

 $
 10,563,955

 Gross profit percentage:

 74.2
 %

 74.3
 %

 84.9
 %

 82.7
 %

 95.9
 %

 95.8
 %

 47.7
 %

 45.5
 %

 61.4
 %

 67.0
 %

 Total gross profit percentage

 64.0
 %

 62.6
 %

 Our
overall gross profit increased to approximately 64.0% in 2024 from 62.6% in 2023. The revenue mix between segments did not shift significantly,
contributing to stability in margins. Price increases in the Document Conversion segment offset a less profitable project mix in professional
services within that segment, and consolidated margins were further bolstered by continued strong performance in Document Management
subscriptions services, driven by software as a service.

 Cost
of Software Revenues

 Cost
of software revenues consists primarily of labor costs of our software engineers and implementation consultants and third-party software
licenses that are sold in connection with our core software applications. During 2024, cost of software revenues decreased by $17,250,
or 67.0%, from 2023, decreasing at the same rate as the reduced revenues. Our gross margin for software revenues was consistent at approximately
74% in 2024 and 2023. Margins can vary in software revenues, driven by the level of complexity of third-party bundles or modular solutions
that required more costs to deliver.

 Cost
of Software as a Service

 Cost
of software as a service, or SaaS, consists primarily of technical support personnel, hosting services, and related costs. Cost of software
as a service decreased by $32,361, or 3.6%, from 2023. Cost of software as a service is impacted by increasing our implementations team and support desk,
as well as periodic improvements to infrastructure, which occurred in 2024 but was more than offset by a reduction in support calls. As a result, in 2024, our gross margin increased to 84.9% from 82.7% in 2023.

 Cost
of Software Maintenance Services

 Cost
of software maintenance services consists primarily of technical support personnel and related costs. Cost of software maintenance services
decreased by $1,706, or 2.9%, in 2024 from 2023, which is consistent with the relatively flat sales volume for this revenue line. As
a result, our gross margin for software maintenance services was consistent at 95.9% in 2024 compared to 95.8% in 2023.

 Cost
of Professional Services

 Cost
of professional services consists primarily of compensation for employees performing the document conversion services, compensation of
our software engineers and implementation consultants and related third-party costs. Cost of professional services increased in 2024
by $229,691, or 4.6%, over 2023, slightly lagging the increase in revenues for the year. Consolidated, our gross margin for professional
services increased to 47.7% during 2024 compared to 45.5% in 2023. In our Document Conversion segment, towards the end of the year, as
inbound document conversion project volume dipped, we adjusted our workforce accordingly, reducing temporary workers first, wherever
possible. Due to the manual nature of the prepping and scanning work required to convert documents from paper to digital, the business
has staffed to the levels of the work available. As a result, our gross margin for professional services in our Document Conversion segment
increased to 46.1% during 2024 compared to 43.6% in 2023. In our much smaller Document Management segment, our professional services
cost of professional services decreased more significantly than the sales revenue, due to the nature of the projects completed, resulting
in gross margin for professional services in our Document Management segment increasing to 85.9% during 2024 compared to 71.0% in 2023.
Gross margins may vary in professional services, depending on the type of project, such as paper scanning, micrographics, or consulting
services, as well as depending upon the nature of each project and the amount of labor required to complete that project.

 Cost
of Storage and Retrieval Services

 Cost
of storage and retrieval services consists primarily of compensation for employees performing the document storage and retrieval services,
including logistics, provided primarily by our Michigan operations and to a much lesser extent, our K-12 customers in Texas. Cost of
storage and retrieval services were relatively flat, decreasing by $7,353, or 2.1%, during 2024 compared to 2023. The decrease was less
than the revenue decrease due to an increase in document destruction, which carries a higher cost than other components of storage and
retrieval. Gross margins for our storage and retrieval services, which exclude the cost of facilities rental, maintenance, and related
overheads, decreased to 61.4% during 2024 compared to 67.0% in 2023.

 Operating
Expenses

 The
following table sets forth our operating expenses for the periods indicated:

 2024

 2023

 Operating expenses:

 General and administrative

 $
 8,166,567

 $
 6,455,088

 Sales and marketing

 2,403,251

 2,026,871

 Depreciation and amortization

 1,128,613

 974,527

 Total operating expenses

 $
 11,698,431

 $
 9,456,486

 General
and Administrative Expenses

 General
and administrative expenses increased in 2024 by 1,711,479, or 26.5%, over 2023. The primary driver of the increase is the share-based
compensation expense of $1,496,774 in 2024 compared to $662,653 in 2023. The share-based compensation expense components for 2024 and
2023 are described in the following table:

 2024

 2023

 Share based compensation expense components:

 Stock options granted 2020 and 2022

 $
 435,934

 $
 464,529

 Stock options granted third quarter 2024

 254,885

 -

 Restricted stock awards granted

 805,955

 198,124

 Total share-based compensation expense

 1,496,774

 662,653

 Less amount related to cashless exercise

 (69,525
)

 -

 Share based compensation equity impact

 $
 1,427,249

 $
 662,653

 Excluding
the share-based compensation expense, total general and administrative expenses increased by $877,358, or 13.6% in 2024 over 2023, related
to investments made in order to scale, such as development, finance, and our SOC2 process, as well as wage increases.

 Sales
and Marketing Expenses

 Sales
and marketing expenses increased by $376,380, or 18.6%, during 2024 over 2023. The increases were primarily driven by the expansion of
our sales team as part of our investments intended to accelerate our sales. Additionally, we increased in our spending on lead generation,
both internally and through an outsourced service, and on select campaigns and increased travel and trade show materials and attendance.

 Depreciation
and Amortization

 Depreciation
and amortization increased by $154,086, or 15.8%, in 2024 over 2023, driven by both increased amortization on capitalizable software,
which has increased in recent quarters as we bring new functionality to our payables automation solution, and by purchases of server
hardware in 2024 to update our infrastructure.

 Other
Items of Income and Expense

 Interest
Expense

 Interest
expense, net was $372,710 during 2024 as compared with $588,203 during 2023, representing a decrease of $215,493 or 36.6%. The decrease
resulted from principal repayments as follows: the 2020 Notes principal payments of $263,000 on February
28, 2023 and $717,500 on August 31, 2023, and the 2022 Notes principal repayments of $500,000 on March 30, 2024, $325,000 on June 30,
2024 and $800,000 on August 30, 2024. The reduced interest on lower principal balances year over year was partially offset by accelerating
amortization of debt issue costs corresponding with the prepaid notes principal. Interest expense, net, included interest income of $38,539
and $29,795 during 2024 and 2023, respectively.

 Liquidity
and Capital Resources

 We
have financed our operations primarily through a combination of cash on hand, cash generated from operations, borrowings from third parties
and related parties, and proceeds from private sales of equity. Since 2012, we have raised a net total of approximately $21.6 million
in cash through issuances of equity securities and a further $5.0 million in cash through issuances of debt securities, of which all
but approximately $1.3 million has been repaid.

 In
2024 and 2023, we engaged in several actions that significantly improved our liquidity and cash flows, including (i) effective
October 1, 2023 through May 30, 2025, securing a renewal contract with our largest customer, containing an estimated net rate
increase for all non-fixed pricing projects of approximately 21%, compared to the current rates in effect for the contract period
commencing June 1, 2018, and (ii) on March 13, 2024, we agreed with the note holders to amend the Unrelated Notes and Related Notes
to extend the maturity date to December 31, 2025, for the remaining $807,331 in 2022 Unrelated Notes and $532,169 of the 2022
Related Notes. However, we are currently engaged in a cyclical competitive bidding process with our largest customer, which process
is open as of the date of this Report. Any reduction in contract volume or pricing could have a significant adverse impact on our
future liquidity and cash flow. In the event we were to lose this contract, due to the necessary transition period to a new vendor,
we anticipate that we would still receive approximately 70% of the anticipated revenue from this contract for fiscal year 2025.
Additionally, at December 31, 2024 and 2023 we had approximately $1.3 million in unbilled accounts receivable. Due to certain image
processing inefficiencies, combined with exacting customer terms regarding acceptance for certain projects, we have a number of
projects where all of the document conversion work is completed, and the associated revenue has been recognized, but we are unable
to invoice until the customer has received and approved the images. The balance is also affected by the timing of completion of
major projects. We have initiatives in place to mitigate the bottlenecks and invoice more promptly.

 At
December 31, 2024, we had $2.5 million in cash and cash equivalents, working capital deficit of $1.1 million, of which the largest liabilities
include $3.4 million in deferred revenues and short-term debt relating to our notes payable of approximately $1.3 million due December
31, 2025. Based on our current plans and assumptions, we believe our capital resources, including our cash and cash equivalents, along
with funds expected to be generated from our operations and potential financing options, will be sufficient to meet our anticipated cash
flow needs for at least the next 12 months, including to satisfy our expected working capital needs and our capital and debt service
commitments over that period.

 Our future cash resources and capital requirements may vary materially from those now planned. For example, from time to time we
evaluate opportunities to expand our current offerings or to develop new products and services and technology or to acquire or
invest in complementary businesses, which could increase our capital needs. Our ability to meet our capital needs in the short term
will depend on many factors, including maintaining and enhancing our operating cash flow and successfully retaining and growing our
client base in the midst of continuing uncertainty regarding inflation and economic growth, the impact of contract renegotiations
with our largest customer, the timing of sales, the success of our new business partners expanding our product and service lines,
the mix of products and services, unanticipated events over which we have no control increasing our operating costs or reducing our
revenues beyond our current expectations, and other factors discussed in this Annual Report.

 We
believe we could seek additional debt or equity financing on acceptable terms. While we are confident in our ability to satisfy our current
debt requirements, we also believe that our capital resources, business operations and financial results would allow us to seek a full
or partial refinancing or other appropriate modification of the current notes payable, such as an extension or conversion to equity,
if we deem necessary or desirable. However, our ability to obtain additional capital, or to modify our existing debt arrangements, when
needed or desired, will depend on many factors, including general economic and market conditions, our operating performance and investor
and lender sentiment, and thus cannot be assured.

 Indebtedness

 As
of December 31, 2024, our outstanding long-term indebtedness consisted of the 2022 Notes issued to accredited investors on April 1, 2022,
with an aggregate outstanding principal balance of $1,339,500 and accrued interest of $0.

 Capital
Expenditures

 We anticipate capital expenditures in the range of $350,000 to $450,000 for 2025, although t here
were no material commitments for capital expenditures at December 31, 2024. This is slightly higher than recent years as we continue to enhance our security environment.

 Cash
Provided by Operating Activities.

 From
our inception, we have generated revenues from the sales, implementation, subscriptions, and maintenance of our internally generated
software applications, as well as significantly increased revenues from document conversion services beginning in 2020. Our uses of cash
from operating activities include compensation and related costs, hardware costs, rent for our corporate offices and warehouses, hosting
fees for our cloud-based software services, other general corporate expenditures, and travel costs to client sites.

 The
majority of our software as a service revenues and our maintenance support services revenues are annual contracts which are generally
invoiced and collected at the beginning of each renewal period. Of these annual renewals, we experience seasonality favoring the third
quarter each year, due to governmental entity preferences for a July to June annual period. Accordingly, our cash collections are largest
in the third quarter, and our deferred revenues are generally correspondingly at their highest during that period as well.

 Net
cash provided by operating activities during 2024 was $3,858,160, primarily attributable to the net loss adjusted for non-cash expenses
of $2,840,747, a decrease in operating assets of $812,924 and an increase in operating liabilities of $750,704. Net cash provided by
operating activities during 2023 was $784,659, primarily attributable to the net income adjusted for non-cash expenses of $1,955,715,
an increase in operating assets of $1,669,780 and a decrease in operating liabilities of $20,542.

 Cash
Used in Investing Activities.

 Net
cash used in investing activities in 2024 was $827,773, including purchases of property and equipment of $439,203, which included
server upgrades, and $388,570 in capitalized internal use software. Net cash used in investing activities in 2023 was $548,077,
primarily $436,837 in capitalized internal use software.

 Cash
Used in Provided by and Financing Activities.

 Net
cash used in financing activities during 2024 amounted to $1,625,000 in repayment of notes payable and $61,874 in payments for the
principal portion of finance lease liabilities, as well as $69,525 in payments to taxing authorities in connection with
shares directly withheld from employees. Net cash used in financing activities during 2023 amounted to $700,000 in earnout
liability payments, $980,450 in repayment of notes payable, $34,954 in payments for the principal portion of finance lease
liabilities, and $2,411 in other net changes in finance lease assets and liabilities.

 Critical
Accounting Policies and Estimates

 These
critical accounting policies and estimates made by management should be read in conjunction with Note 3 Summary of
Significant Accounting Policies to the Consolidated Financial Statements.

 The
preparation of our consolidated financial statements in accordance GAAP requires us to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in
the reporting period. We monitor and analyze these items for changes in facts and circumstances, and material changes in these estimates
could occur in the future. We base our estimates and assumptions on current facts, historical experience and various other factors that
we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values
of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Changes in estimates
are reflected in reported results for the period in which they become known. The actual results experienced by us may differ materially
from our estimates. To the extent there are material differences between our estimates and the actual results, our future results of
operations will be affected.

 We
consider the following accounting policies and estimates to be both those most important to the portrayal of our financial condition
and those that require the most subjective judgment:

 Recognition

 Business
 Acquisition, Goodwill and Intangibles, including Contingent Liability—Earnout

 Accounts
 Receivable, Unbilled

 Deferred

 Accounting
 for Costs of Computer Software to be Sold, Leased or Marketed and Accounting for Internal Use Software

 Accounting
 Stock-Based Compensation

Recognition

 In
accordance with ASC 606, "Revenue From Contracts With Customers," we follow a five-step model to assess each contract of
a sale or service to a customer: identify the legally binding contract, identify the performance obligations, determine the transaction
price, allocate the transaction price, and determine whether revenue will be recognized at a point in time or over time. Revenue is recognized
when a performance obligation is satisfied and the customer obtains control of promised goods and services. The amount of revenue recognized
reflects the consideration to which we expect to be entitled to receive in exchange for these goods and services. In addition, ASC 606
requires disclosures of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

 Our
contracts with customers often contain multiple performance obligations. For these contracts, we account for individual performance obligations
separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone
selling price ("SSP") basis. We determine the SSP based on an observable standalone selling price when it is available, as
well as other factors, including, the price charged to customers, our discounting practices, and our overall pricing objectives, while
maximizing observable inputs. In situations where pricing is highly variable or uncertain, we estimate the SSP using a residual approach.

from on-premises licenses is recognized upfront upon transfer of control of the software, which occurs at delivery, or when the license
term commences, if later. We recognize revenue from maintenance contracts ratably over the service period. Cloud services revenue is
recognized ratably over the cloud service term. Training, professional services, and storage and retrieval services are provided either
on a time and material basis, in which revenues are recognized as services are delivered, or over a contractual term, in which revenues
are recognized ratably. With respect to contracts that include customer acceptance provisions, we recognize revenue upon customer acceptance.
Our policy is to record revenues net of any applicable sales, use or excise taxes.

 Payment
terms and conditions vary by contract type, although our terms generally include a requirement of payment within 30 to 60 days. We assess
whether payment terms are customary or extended in accordance with normal practice relative to the market in which the sale is occurring.
In instances where the timing of revenue recognition differs from the timing of payment, we have determined our contracts do not include
a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable
ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing.

 We
generally do not offer rights of return or any other incentives such as concessions, product rotation, or price protection and, therefore,
do not provide for or make estimates of rights of return and similar incentives.

 We
establish allowances for doubtful accounts when available information causes us to believe that credit loss is probable.

 Business
Acquisition, Goodwill and Intangibles Assets, including Contingent Liability—Earnout

 We
have allocated the purchase price to assets acquired and liabilities assumed based on the estimated fair value of such assets and liabilities
at the date of acquisition. We estimate a fair value of any earnout which would be owed to the seller based on the terms of the earnout
and record this liability at the acquisition date. Fair value was based on future projections of metrics such as revenue or profit over
the earnout period and valuation techniques that utilize expected volatility, threshold probability, and discounting of future payments.
Evaluating the fair value involves a high degree of assumptions used within the valuation models, in particular, forecasts of projected
revenues or margins. Changes in these assumptions could have a significant impact on the fair value of the earnout liabilities.

 The
carrying value of goodwill is not amortized, but it tested for impairment annually as of December 31, as well as on an interim basis
whenever events or changes in circumstances indicate that the carrying amount of a reporting unit may not be recoverable. An impairment
charge is recognized for the amount by which the carrying amount exceeds the recorded fair value. All intangible assets have finite lives
and are stated at cost, net of amortization. Amortization is computed over the useful life of the related assets on a straight-line method.

 For
the twelve months ended December 31, 2023, we recorded a change in fair value of earnout liabilities for both Graphic Sciences and CEO
Image. The assumptions were updated to reflect the improved performance of both acquisitions against their threshold targets, a reduction
of pandemic-related uncertainty, and the decreasing impact of time value of money. In December 2022, an amendment to the Graphic Sciences
stock purchase agreement was signed, which accelerated the timing of the final Graphic Sciences earnout payment and set the amount at
$700,000. This amount was paid on January 3, 2023.

 Accounts
Receivable, Unbilled

 We
recognize professional services revenue over time as the services are delivered using an input or output method (e.g., labor hours incurred
as a percentage of total labor hours budgeted, images scanned, or similar milestones), as appropriate for the contract, provided all
other revenue recognition criteria are met. When our revenue recognition policies recognize revenue that has not yet been billed, we
record those contract asset amounts in accounts receivable, unbilled.

 Deferred

 Amounts
that have been invoiced are recognized in accounts receivable, deferred revenue or revenue, depending on whether the revenue recognition
criteria have been met. Deferred revenue represents amounts billed for which revenue has not yet been recognized. Deferred revenues typically
relate to maintenance and software-as-a-service agreements which have been paid for by customers prior to the performance of those services,
and payments received for professional services and license arrangements and software-as-a-service performance obligations that have
been deferred until fulfilled under our revenue recognition policy.

 Accounting
for Costs of Computer Software to be Sold, Leased or Marketed and Accounting for Internal Use Software

 We
design, develop, test, market, license, and support new software products and enhancements of current products. We continuously monitor
our software products and enhancements to remain compatible with standard platforms and file formats. In accordance with ASC 985-20 "Costs
of Software to be Sold, Leased or Otherwise Marketed," we expense software development costs, including costs to develop software
products or the software component of products to be sold, leased, or marketed to external users, before technological feasibility is
reached. Once technological feasibility has been established, certain software development costs incurred during the application development
stage are eligible for capitalization. Based on our software development process, technical feasibility is established upon completion
of a working model. Technological feasibility is typically reached shortly before the release of such products. No such costs were capitalized
during the periods presented in this report.

 In
accordance with ASC 350-40, "Internal-Use Software," we capitalize purchase and implementation costs of internal use software.
Once an application has reached development stage, internal and external costs, if direct and incremental, are capitalized until the
software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing.
We also capitalize costs related to specific upgrades and enhancements when it is probable that the expenditure will result in additional
functionality. Such costs in the amount of $388,570 were capitalized during 2024. Such costs in the amount of $436,837 were capitalized
during 2023.

 Capitalized
costs are stated at cost less accumulated amortization. Amortization is computed over the estimated useful lives of the related assets
on a straight-line basis, which is three years.

 Stock-Based
Compensation

 We
maintain three stock-based compensation plans. We account for stock-based payments to employees and directors in accordance with
ASC 718, "Compensation - Stock Compensation." Stock-based payments to employees include grants of stock that are recognized
in the consolidated statements of income based on their fair values at the date of grant. We account for stock-based payments to non-employees
in accordance with ASC 718, "Compensation - Stock Compensation," which requires that such equity instruments are recorded
at their fair value on the grant date.

 The
grant date fair value of stock option awards is recognized in earnings as stock-based compensation cost over the requisite service period
of the award using the straight-line attribution method. We estimate the fair value of the stock option awards using the Black-Scholes-Merton
option pricing model. The exercise price of options is specified in the stock option agreements. The expected volatility is based on
the historical volatility of our stock for the previous period equal to the expected term of the options. The expected term of options
granted is based on the midpoint between the vesting date and the end of the contractual term. The risk-free interest rate is based upon
a U.S. Treasury instrument with a life that is similar to the expected term of the options. The expected dividend yield is based upon
the yield expected on date of grant to occur over the term of the option.

 ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 Not
applicable to smaller reporting companies.

 ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

 (1)
Consolidated Financial Statements.

 Page

 Report of Independent Registered Public Accounting Firm (PCAOB ID No. 1808)

 Consolidated Balance Sheets at December 31, 2024 and 2023

 Consolidated Statements of Operations for the years ended December 31, 2024, and 2023

 Consolidated Statements of Stockholders' Equity for the years ended December 31, 2024, and 2023

 Consolidated Statements of Cash Flows for the years ended December 31, 2024, and 2023

 Notes to Consolidated Financial Statements

 (2)
Consolidated Financial Statement Schedules.

 Consolidated
Financial Statement Schedules have been omitted because they are either not required or not applicable, or because the information required
to be presented is included in the consolidated financial statements or the notes thereto included in this report.

 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To
the Stockholders and Board of Directors

 Intellinetics,
Inc. and Subsidiaries

 Columbus,
Ohio

 Opinion
on the Consolidated Financial Statements

 We
have audited the accompanying consolidated balance sheets of Intellinetics, Inc. and Subsidiaries (the "Company") as of December
31, 2024 and 2023, the related consolidated statements of operations, stockholders' equity, and cash flows for the years then ended,
and related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated
financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and
the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted
in the United States of America.

 Basis
for Opinion

 These
consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part
of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audits provide a reasonable basis for our opinion.

 Critical
Audit Matters

 Critical
audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be
communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and
(2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

 /s/
 GBQ Partners LLC

 We
 have served as the Company's auditor since 2012.

 Columbus,
 Ohio

 March
 24, 2025

 F- 1

 Part
I Financial Information

 Item
1. Financial Statements

 INTELLINETICS, INC. and
SUBSIDIARIES

 Consolidated Balance
Sheets

 2024

 2023

 ASSETS

 Current assets:

 Cash

 $
 2,489,236

 $
 1,215,248

 Accounts receivable, net

 1,111,504

 1,850,375

 Accounts receivable, unbilled

 1,296,524

 1,320,837

 Parts and supplies, net

 100,561

 110,272

 Contract assets

 139,696

 140,165

 Prepaid expenses and other current assets

 337,035

 367,478

 Total current assets

 5,474,556

 5,004,375

 Property and equipment, net

 1,093,867

 924,257

 Right of use assets, operating

 1,894,866

 2,532,928

 Right of use assets, finance

 237,741

 219,777

 Intangible assets, net

 3,399,029

 3,909,338

 Goodwill

 5,789,821

 5,789,821

 Other assets

 685,076

 645,764

 Total assets

 $
 18,574,956

 $
 19,026,260

 LIABILITIES AND STOCKHOLDERS' EQUITY

 Current liabilities:

 Accounts payable

 $
 310,623

 $
 194,454

 Accrued compensation

 493,700

 337,884

 Accrued expenses

 172,421

 164,103

 Lease liabilities, operating - current

 842,468

 712,607

 Lease liabilities, finance - current

 69,261

 49,926

 Deferred revenues

 3,411,852

 2,927,808

 Notes payable - current

 781,936

 -

 Notes payable - related party - current

 515,512

 -

 Notes payable current

 515,512

 -

 Total current liabilities

 6,597,773

 4,386,782

 Long-term liabilities:

 Notes payable

 -

 2,209,242

 Notes payable - related party

 -

 560,602

 Notes payable

 -

 560,602

 Lease liabilities, operating - net of current portion

 1,161,404

 1,942,970

 Lease liabilities, finance - net of current portion

 184,024

 175,943

 Total long-term liabilities

 1,345,428

 4,888,757

 Total liabilities

 7,943,201

 9,275,539

 Stockholders' equity:

 Common stock, $ 0.001 par value, 25,000,000 shares authorized; 4,249,735 and 4,113,621 shares issued and outstanding at December 31, 2024 and 2023, respectively

 4,250

 4,114

 Additional paid-in capital

 32,268,743

 30,841,630

 Accumulated deficit

 ( 21,641,238
)

 ( 21,095,023
)

 Total stockholders' equity

 10,631,755

 9,750,721

 Total liabilities and stockholders' equity

 $
 18,574,956

 $
 19,026,260

 See
Notes to these Consolidated financial statements

 F- 2

 INTELLINETICS, INC. and SUBSIDIARIES

 Consolidated Statements of Operations

 2024

 2023

 For the Twelve Months Ended December 31,

 2024

 2023

 Revenues:

 $
 32,946

 $
 100,260

 5,688,936

 5,133,215

 1,410,387

 1,407,064

 9,985,028

 9,167,428

 901,076

 1,078,414

 Total revenues

 18,018,373

 16,886,381

 Cost of revenues:

 8,486

 25,736

 856,774

 889,135

 57,667

 59,373

 5,222,517

 4,992,826

 348,003

 355,356

 Total cost of revenues

 6,493,447

 6,322,426

 Gross profit

 11,524,926

 10,563,955

 Operating expenses:

 General and administrative

 8,166,567

 6,455,088

 Sales and marketing

 2,403,251

 2,026,871

 Depreciation and amortization

 1,128,613

 974,527

 Total operating expenses

 11,698,431

 9,456,486

 (Loss) income from operations

 ( 173,505
)

 1,107,469

 Interest expense, net

 ( 372,710
)

 ( 588,203
)

 Net (loss) income

 $
)

 $
 519,266

 Basic net (loss) income per share:

 $
 ( 0.13
)

 $
 0.13

 Diluted net (loss) income per share:

 $
 ( 0.13
)

 $
 0.11

 Weighted average number of common shares outstanding - basic

 4,201,401

 4,074,194

 Weighted average number of common shares outstanding - diluted

 4,201,401

 4,652,058

 See Notes to these Consolidated financial statements

 F- 3

 INTELLINETICS,
INC. and SUBSIDIARIES

 Consolidated
Statement of Stockholders' Equity

 For
the Twelve Months Ended December 31, 2024 and 2023

 Amount

 Capital

 Deficit

 Total

 Common
 Stock

 Additional
 Paid-in

 Accumulated

 Amount

 Capital

 Deficit

 Total

 Balance, December 31, 2022

 4,073,757

 $
 4,074

 $
 30,179,017

 $
 ( 21,614,289
)

 $
 8,568,802

 Stock Issued to Directors

 39,864

 198,084

 -

 198,124

 Stock option compensation

 -

 -

 464,529

 -

 464,529

 Net income

 -

 -

 -

 519,266

 519,266

 Balance, December 31,
 2023

 4,113,621

 $
 4,114

 $
 30,841,630

 $
 ( 21,095,023
)

 $
 9,750,721

 Balance, December 31, 2023

 4,113,621

 $
 4,114

 $
 30,841,630

 $
 ( 21,095,023
)

 $
 9,750,721

 Balance

 4,113,621

 $
 4,114

 $
 30,841,630

 $
 ( 21,095,023
)

 $
 9,750,721

 Stock option compensation

 -

 -

 690,819

 -

 690,819

 Stock option exercise

 18,929

 ( 19
)

 -

 -

 Restricted share issuance

 117,185

 736,313

 -

 736,430

 Net loss

 -

 -

 -

)

)

 Net (loss) income

 -

 -

 -

)

)

 Balance, December 31,
 2024

 4,249,735

 $
 4,250

 $
 32,268,743

 $
 ( 21,641,238
)

 $
 10,631,755

 Balance

 4,249,735

 $
 4,250

 $
 32,268,743

 $
 ( 21,641,238
)

 $
 10,631,755

 See Notes to these Consolidated financial statements

 F- 4

 INTELLINETICS, INC. and SUBSIDIARIES

 Consolidated Statements of Cash Flows

 2024

 2023

 For the Twelve Months Ended December 31,

 2024

 2023

 Cash flows from operating activities:

 Net (loss) income

 $
)

 $
 519,266

 Adjustments to reconcile net (loss) income to net cash provided by
 operating activities:

 Depreciation and amortization

 1,128,613

 974,527

 Bad debt (recovery) expense

 ( 9,117
)

 77,211

 Loss on disposal of fixed assets

 -

 Amortization of deferred financing costs

 152,604

 177,164

 Amortization of debt discount

 -

 22,045

 Amortization of right of use assets, financing

 71,326

 42,115

 Stock issued for services

 -

 198,124

 Share-based compensation

 1,496,774

 464,529

 Changes in operating assets and liabilities:

 Accounts receivable

 747,988

 ( 806,503
)

 Accounts receivable, unbilled

 24,313

 ( 724,427
)

 Parts and supplies

 9,711

 ( 37,051
)

 Prepaid expenses and other current assets

 30,912

 ( 101,799
)

 Accounts payable and accrued expenses

 280,303

 ( 200,444
)

 Operating lease assets and liabilities, net

 ( 13,643
)

 6,158

 Deferred revenues

 484,044

 173,744

 Total adjustments

 4,404,375

 265,393

 Net cash provided by operating activities

 3,858,160

 784,659

 Cash flows from investing activities:

 Capitalization of internal use software

 ( 388,570
)

 ( 436,837
)

 Purchases of property and equipment

 ( 439,203
)

 ( 111,240
)

 Net cash used in investing activities

 ( 827,773
)

 ( 548,077
)

 Cash flows from financing activities:

 Payment of earnout liabilities

 -

 ( 700,000
)

 Other net changes in finance lease assets and liabilities

 -

 ( 2,411
)

 Principal payments on financing lease liability

 ( 61,874
)

 ( 34,954
)

 Payments to taxing authorities in connection with shares directly withheld
from employees

 ( 69,525

)

 -

 Repayment of notes payable

 ( 1,307,169
)

 ( 980,450
)

 Repayment of notes payable - related parties

 ( 317,831
)

 -

 Net cash used in financing activities

 ( 1,756,399
)

 ( 1,717,815
)

 Net increase (decrease) in cash

 1,273,988

 ( 1,481,233
)

 Cash - beginning of period

 1,215,248

 2,696,481

 Cash - end of period

 $
 2,489,236

 $
 1,215,248

 Supplemental disclosure of cash flow information:

 Cash paid during the period for interest

 $
 258,646

 $
 418,790

 Cash paid during the period for income taxes

 $
 20,259

 $
 21,667

 Supplemental disclosure of non-cash financing activities:

 Right-of-use asset obtained in exchange for finance lease liability

 $
 89,289

 $
 107,610

 See Notes to these Consolidated financial statements

 F- 5

 INTELLINETICS,
INC. AND SUBSIDIARY

 Notes
to Consolidated Financial Statements

 1.
 Business Organization and Nature of Operations

 Intellinetics,
Inc., formerly known as GlobalWise Investments, Inc., is a Nevada corporation incorporated in 1997, with two wholly-owned
subsidiaries: Intellinetics Ohio and Graphic Sciences. Intellinetics Ohio was incorporated in 1996, and on February 10, 2012,
Intellinetics Ohio became our sole operating subsidiary as a result of a reverse merger and recapitalization. On March 2, 2020, we
purchased all the outstanding capital stock of Graphic Sciences.

 Our
digital transformation products and services are provided through two reporting segments: Document Management and Document Conversion.
Our Document Management segment, which includes the Yellow Folder assets acquired in April 2022
and the CEO Image asset acquired in April 2020, consists primarily of solutions involving
our software platform, allowing customers to capture and manage their documents across operations such as scanned hard-copy documents
and digital documents including those from Microsoft Office 365, digital images, audio, video and emails. Our Document Conversion segment,
which includes and primarily consists of the Graphic Sciences acquisition, provides assistance to customers as a part of their overall
document strategy to convert documents from one medium to another, predominantly paper to digital, including migration to our software
solutions, as well as long-term storage and retrieval services. Our solutions create value for customers by making it easy to connect
business-critical documents to the people who need them by making those documents easy to find and access, while also being secure and
compliant with the customers' audit requirements. Solutions are sold both directly to end-users and through resellers.

 2.
 Basis of Presentation

 The
accompanying audited consolidated financial statements have been prepared in accordance with United States generally accepted accounting
principles ("GAAP"). We have evaluated subsequent events through the issuance of this Form 10-K.

 3.
 Summary of Significant Accounting Policies

 Principles
of Consolidation

 The
consolidated financial statements accompanying these notes include the accounts of Intellinetics and the accounts of all its subsidiaries
in which it holds a controlling interest. Under GAAP, consolidation is generally required for investments of more than 50 % of the outstanding
voting stock of an investee, except when control is not held by the majority owner. We have two subsidiaries: Intellinetics Ohio and
Graphic Sciences. We consider the criteria established under Financial Accounting Standards Board ("FASB") Accounting Standard
Codification ("ASC") 810, "Consolidations" in the consolidation process. All significant intercompany balances
and transactions have been eliminated in consolidation.

 Use
of Estimates

 The
preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions. Such
estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of revenues and expenses. By their nature, these estimates
and assumptions are subject to an inherent degree of uncertainty. The impact of inflation, as well as COVID-19, has significantly increased
economic and demand uncertainty. Because future events and their effects cannot be determined with precision, actual results could differ
significantly from estimated amounts.

 Significant
estimates and assumptions include credit loss allowances related to receivables, accounts receivable -unbilled, the recoverability of long-term
assets, depreciable lives of property and equipment, fair value for goodwill and intangibles, right-of-use assets and lease liabilities, estimates of fair value deferred taxes and related valuation allowances. Our management
monitors these risks and assesses our business and financial risks on a quarterly basis.

Recognition

 In
accordance with ASC 606, "Revenue From Contracts With Customers," we follow a five-step model to assess each contract of
a sale or service to a customer: identify the legally binding contract, identify the performance obligations, determine the transaction
price, allocate the transaction price, and determine whether revenue will be recognized at a point in time or over time. Revenue is recognized
when a performance obligation is satisfied and the customer obtains control of promised goods and services. The amount of revenue recognized
reflects the consideration to which we expect to be entitled to receive in exchange for these goods and services. In addition, ASC 606
requires disclosures of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

 We
categorize revenue as software, software as a service, software maintenance services, professional services, and storage and retrieval
services. We earn the majority of our revenue from the sale of professional services, followed by the sale of software maintenance services
and software as a service. We apply our revenue recognition policies as required in accordance with ASC 606 based on the facts and circumstances
of each category of revenue.

 a)

included in this classification typically include sales of licenses with professional services to new customers, additional software
licenses to existing customers, and sales of software with or without services to our resellers (See section j) - Reseller Agreements,
below. Our software licenses are functional intellectual property and typically provide customers with the right to use our software
in perpetuity as it exists when made available to the customer. We recognize revenue from software licenses at a point in time upon delivery,
provided all other revenue recognition criteria are met.

 F- 6

 b)
Sale of software as a service

 Sale
of software as a service ("SaaS") consists of revenues from arrangements that provide customers the use of our software applications,
as a service, typically billed on a monthly or annual basis. Advance billings of these services are not recorded to the extent that the
term of the arrangement has not commenced and payment has not been received. Revenue on these services is recognized over the contract
period.

 c)
Sale of software maintenance services

maintenance services revenues consist of revenues derived from arrangements that provide post-contract support ("PCS"), including
software support and bug fixes, to our software license holders. Advance billings of PCS are not recorded to the extent that the term
of the PCS has not commenced and payment has not been received. PCS are considered distinct services. However, these distinct services
are considered a single performance obligation consisting of a series of services that are substantially the same and have the same pattern
of transfer to the customer. These revenues are recognized over the term of the maintenance contract.

 d)
Sale of professional services

 Professional
services revenues consist of revenues from document scanning and conversion services, consulting, discovery, training, and advisory services
to assist customers with document management needs, as well as repair and maintenance services for customer equipment. We recognize professional
services revenue over time as the services are delivered using an input or output method (e.g., labor hours incurred as a percentage
of total labor hours budgeted, images scanned, or similar milestones), as appropriate for the contract, provided all other revenue recognition
criteria are met.

 e)
Sale of storage and retrieval services

 Sale
of document storage and retrieval services consist principally of secured warehouse storage of customer documents, which are typically
retained for many years, as well as retrieval per agreement terms and certified destruction if desired. We recognize revenue from document
storage and retrieval services over the term of the contract for storage and for the retrieval and destructions components, as the services
are delivered. Customers are generally billed monthly based upon contractually agreed-upon terms.

 f)
Arrangements with multiple performance obligations

 In
addition to selling software licenses, software as a service, software maintenance services, professional services, and storage and retrieval
services on a stand-alone basis, a portion of our contracts include multiple performance obligations. For contracts with multiple performance
obligations, we allocate the transaction price of the contract to each distinct performance obligation, on a relative basis using its
standalone selling price. We determine the standalone selling price based on the price charged for the deliverable when sold separately.

 F- 7

 g)
Contract balances

 When
the timing of our delivery of goods or services is different from the timing of payments made by customers, we recognize either a contract
asset (performance precedes contractual due date) or a contract liability (customer payment precedes performance). Customers that prepay
are represented by deferred revenue until the performance obligation is satisfied. Contract assets represent arrangements in which the
good or service has been delivered but payment is not yet due. Our contract assets consisted of accounts receivable, unbilled, which
are disclosed on the consolidated balance sheets, as well as contract assets which are comprised of employee sales commissions paid in
advance of contract periods ending. Our contract liabilities consisted of deferred (unearned) revenue, which is generally related to
software as a service or software maintenance contracts. We classify deferred revenue as current based on the timing of when we expect
to recognize revenue, which are disclosed on the consolidated balance sheets.

 The
following tables present changes in our accounts receivable and contract assets during the years ended December 31, 2024, and 2023:

 Schedule of Changes in Contract Assets and Liabilities

 Balance at
 Beginning of Period

 Billings

 Payments Received

 Balance at
 End of
 Period

 Year ended December 31, 2024

 Accounts receivable

 $
 1,850,375

 $
 18,712,905

 $
 ( 19,451,776
)

 $
 1,111,504

 Year ended December 31, 2023

 Accounts receivable

 $
 1,121,083

 $
 16,389,136

 $
 ( 15,659,844
)

 $
 1,850,375

 Balance at Beginning of Period

 Revenue Recognized in Advance of Billings

 Billings

 Balance at End of Period

 Year ended December 31, 2024

 Accounts receivable, unbilled

 $
 1,320,837

 $
 5,812,863

 $
 ( 5,837,176
)

 $
 1,296,524

 Year ended December 31, 2023

 Accounts receivable, unbilled

 $
 596,410

 $
 5,195,866

 $
 ( 4,471,439
)

 $
 1,320,837

 Balance at Beginning of Period

 Commissions Paid

 Commissions Recognized

 Balance at End of Period

 Year ended December 31, 2024

 Other contract assets

 $
 140,165

 $
 173,417

 $
 ( 173,886
)

 $
 139,696

 Year ended December 31, 2023

 Other contract assets

 $
 80,378

 $
 194,455

 $
 ( 134,668
)

 $
 140,165

 h)
Deferred revenue

 Amounts
that have been invoiced are recognized in accounts receivable, deferred revenue or revenue, depending on whether the revenue recognition
criteria have been met. Deferred revenue represents amounts billed for which revenue has not yet been recognized. Deferred revenues typically
relate to maintenance and software as a service agreements which have been paid for by customers prior to the performance of those services,
and payments received for professional services and license arrangements and software as a service performance obligations that have
been deferred until fulfilled under our revenue recognition policy.

 Remaining
performance obligations represent the transaction price from contracts for which work has not been performed or goods and services have
not been delivered. We expect to recognize revenue on approximately 99 % of the remaining performance obligations over the next 12 months,
with the remainder recognized thereafter. As of December 31, 2024, the aggregate amount of the transaction price allocated to remaining
performance obligations for software as a service and software maintenance contracts with a duration greater than one year was $ 44,971.
As of December 31, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations for software as
a service and software maintenance contracts with a duration greater than one year was $ 72,212. This does not include revenue related
to performance obligations that are part of a contract whose original expected duration is one year or less.

 The
following table presents changes in our contract liabilities during the years ended December 31, 2024 and 2023:

 Balance at
 Beginning
 of Period

 Billings

 Recognized

 Balance at
 End of
 Period

 Year ended December 31, 2024

 Contract liabilities: Deferred revenue

 $
 2,927,808

 $
 8,071,221

 $
 ( 7,587,177
)

 $
 3,411,852

 Year ended December 31, 2023

 Contract liabilities: Deferred revenue

 $
 2,754,064

 $
 7,808,195

 $
 ( 7,634,451
)

 $
 2,927,808

 i)
Rights of return and customer acceptance

 We
do not generally offer variable consideration, financing components, rights of return or any other incentives such as concessions, product
rotation, or price protection and, therefore, does not provide for or make estimates of rights of return and similar incentives. Our
contracts with customers generally do not include customer acceptance clauses.

 j)
Reseller agreements

 We
execute certain sales contracts through resellers. We recognize revenues relating to sales through resellers when all the recognition
criteria have been met including passing of control. In addition, we assess the credit-worthiness of each reseller, and if the reseller
is undercapitalized or in financial difficulty, any revenues expected to emanate from such resellers are deferred and recognized only
when cash is received and all other revenue recognition criteria are met.

 F- 8

 k)
Contract costs

 We
capitalize the incremental costs of obtaining a contract with a customer. We have determined that certain sales commissions meet the
requirement to be capitalized, and we amortize these costs on a consistent basis with the pattern of transfer of the goods and services
in the contract. Total capitalized costs to obtain contracts are included in contract assets on our consolidated balance sheets.

 l)
Sales taxes

 Sales
taxes charged to and collected from customers as part of our sales transactions are excluded from revenues, as well as the determination
of transaction price for contracts with multiple performance obligations, and recorded as a liability to the applicable governmental
taxing authority.

 m)
Disaggregation of revenue

 We
provide disaggregation of revenue based on product groupings in our consolidated statements of income as we believe this best depicts
how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Revenues from contracts are
primarily within the United States. International revenues were not material to the consolidated financial statements for the years ended
December 31, 2024 and 2023.

 n)
Significant financing component

 Our
customers typically do not pay in advance for goods or services to be transferred in excess of one year. As such, it is not necessary
to determine if we benefit from the time value of money and should record a component of interest income related to the upfront payment
due to the practical expedient of ASC 606-10-32-18.

 Concentrations
of Credit Risk

 We
maintain our cash with high credit quality financial institutions. At times, our cash and cash equivalents may be uninsured or in deposit
accounts that exceed the Federal Deposit Insurance Corporation insurance limit.

 We
do not generally require collateral or other security to support customer receivables; however, we may require customers to provide retainers,
up-front deposits or irrevocable letters-of-credit when considered necessary to mitigate credit risks. We estimate a current estimated
credit losses ("CECL") for accounts receivable and accounts receivable-unbilled. The CECL for receivables are estimated based
on the receivable aging category, credit risk of specific customers, past collection history, and management's evaluation of collectability.
Provisions for CECL are classified within selling, general and administrative costs.

 Upon
the adoption of FASB ASU No. 2016-13 (CECL model) effective January 1, 2023, Intellinetics, Inc. has revised its methodology for estimating
expected credit losses on financial instruments, specifically trade receivables. This model requires the recognition of lifetime expected
credit losses at each reporting date, considering past events, current conditions, and reasonable forecasts. In assessing the credit
quality of our portfolio, management utilizes a provision matrix that classifies trade receivables by customer type and age of receivable.
Government and education sector receivables carry a low risk, while a higher risk is attributed to the remaining receivables as their
aging progresses. For receivables with questionable collectability, a specific reserve is assigned. The estimated credit losses are a
reflection of these factors, with the matrix applying percentages to the receivables based on their risk profile, adjusted for current
and expected future conditions.

 During
the reporting period, the estimate of credit losses may change due to several factors including payment patterns of customers, changes
in customer creditworthiness, and broader economic conditions. Such changes are captured in the financial statements to ensure they accurately
reflect the company's assessment of credit risk and expected losses at the end of each reporting period. Credit losses have been
within management's expectations. At December 31, 2024 and 2023, our allowance for credit losses was $ 55,907 and $ 124,103, respectively.

 Changes
in the allowance for credit losses for the periods ended December 31, 2024 and 2023 were as follows:

 Schedule of Allowance for Credit Losses

 Trade Receivables

 As of December 31, 2023

 $
 ( 124,103
)

 Reductions (provisions) charged to operating results

 $
 9,117

 Account write-offs

 $
 59,079

 As of December 31, 2024

 $
 ( 55,907
)

 Trade Receivables

 As of December 31, 2022

 $
 ( 88,331
)

 (Provisions) reductions charged to operating results

 $
 ( 50,018
)

 Account write-offs

 $
 14,246

 As of December 31, 2023

 $
 ( 124,103
)

 Parts
and Supplies

 Parts
and supplies are valued at the lower of cost or net realizable value. Costs are determined using the first-in, first-out method. Parts
and supplies are used for scanning and document conversion services. A provision for potentially obsolete or slow-moving parts and supplies
inventory is made based on parts and supplies levels, future sales forecasted and management's judgment of potentially obsolete
parts and supplies. We recorded an allowance of $ 61,500 at December 31, 2024 and 2023.

 F- 9

 Property
and Equipment

 Property,
equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of the related assets on a straight-line basis. Furniture and fixtures, computer hardware
and purchased software are depreciated over three to seven years. Leasehold improvements are amortized over the life of the lease or
the asset, whichever is shorter, generally seven to ten years. Upon retirement or other disposition of these assets, the cost and related
accumulated depreciation and amortization of these assets are removed from the accounts and the resulting gains and losses are reflected
in the results of operations.

 Intangible
Assets

 All
intangible assets have finite lives and are stated at cost, net of amortization. Amortization is computed over the useful life of the
related assets on a straight-line method.

 Goodwill

 The
carrying value of goodwill is not amortized, but is tested for impairment annually as of December 31, as well as on an interim basis
whenever events or changes in circumstances indicate that the carrying amount of a reporting unit may not be recoverable. An impairment
charge is recognized for the amount by which the carrying amount exceeds the recorded fair value.

 Impairment
of Long-Lived Assets

 We
account for the impairment and disposition of long-lived assets in accordance with ASC 360, "Property, Plant, and Equipment."
We test long-lived assets or asset groups, such as property and equipment, for recoverability when events or changes in circumstances
indicate that their carrying amount may not be recoverable.

 Circumstances
which could trigger a review include, but are not limited to: significant adverse changes in the business climate or legal factors; current
period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of
the asset; and a current expectation that the asset will more likely than not be sold or disposed of before the end of its estimated
useful life.

 Recoverability
is assessed based on comparing the carrying amount of the asset to the aggregate pre-tax undiscounted cash flows expected to result from
the use and eventual disposal of the asset or asset group. Impairment is recognized when the carrying amount is not recoverable and exceeds
the fair value of the asset or asset group. The impairment loss, if any, is measured as the amount by which the carrying amount exceeds
fair value, which for this purpose is based upon the discounted projected future cash flows of the asset or asset group. There was no
impairment of long lived assets in the twelve month periods ended 2024 or 2023.

 F- 10

 Leases

 We
determine if an arrangement is a lease at inception. Operating leases in which we are the lessee are included in operating lease right-of-use
("ROU") assets and operating lease liabilities in the consolidated balance sheets. Finance leases in which we are the lessee
are included in finance lease right-of-use ("ROU") assets and finance lease liabilities in the consolidated balance sheets.
We do not have any leases for which we are the lessor.

 ROU
assets represent the right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease
payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present
value of lease payments over the reasonably certain lease term. As our leases do not provide an implicit rate, we use our incremental
borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the
implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and reduced by lease incentives,
such as tenant improvement allowances. Our lease terms include options to extend or terminate the lease only when it is reasonably certain
that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

 Stock-Based
Compensation

 We
account for stock-based payments in accordance with ASC 718, "Compensation - Stock Compensation," which requires that such
equity instruments be measured at their fair values on the grant date. Stock-based payments to employees include grants of stock that
are recognized in the consolidated statements of income based on their fair values at the date of grant.

 The
grant date fair value of stock option awards is recognized in earnings as stock-based compensation cost over the requisite service period
of the award using the straight-line attribution method. We estimate the fair value of the stock option awards using the Black-Scholes-Merton
option pricing model. The exercise price of options is specified in the stock option agreements. The expected volatility is based on
the historical volatility of our stock for the previous period equal to the expected term of the options. The expected term of options
granted is based on the midpoint between the vesting date and the end of the contractual term. The risk-free interest rate is based upon
a U.S. Treasury instrument with a life that is similar to the expected term of the options. The expected dividend yield is based upon
the yield expected on date of grant to occur over the term of the option.

Development Costs

 We
design, develop, test, market, license, and support new software products and enhancements of current products. We continuously monitor
our software products and enhancements to remain compatible with standard platforms and file formats. In accordance with ASC 985-20 "Costs
of Software to be Sold, Leased or Otherwise Marketed," we expense software development costs, including costs to develop software
products or the software component of products to be sold, leased, or marketed to external users, before technological feasibility is
reached. Once technological feasibility has been established, certain software development costs incurred during the application development
stage are eligible for capitalization. Based on our software development process, technical feasibility is established upon completion
of a working model. Technological feasibility is typically reached shortly before the release of such products. No such costs were capitalized
during the periods presented in this report.

 In
accordance with ASC 350-40, "Internal-Use Software," we capitalize purchase and implementation costs of internal use software.
Once an application has reached development stage, internal and external costs, if direct and incremental, are capitalized until the
software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing.
We also capitalize costs related to specific upgrades and enhancements when it is probable that the expenditure will result in additional
functionality. Such costs in the amount of $ 388,570 were capitalized during 2024. Such costs in the amount of $ 436,837 were capitalized
during 2023.

 Capitalized
costs are stated at cost less accumulated amortization. Amortization is computed over the estimated useful lives of the related assets
on a straight-line basis, which is three years. At December 31, 2024 and 2023, our consolidated balance sheets included $ 670,292 and
$ 630,979, respectively, in other long-term assets.

 For
the years ended December 31, 2024, and 2023, our expensed software development costs were $ 690,926 and $ 558,976, respectively.

 F- 11

 Recently Adopted Accounting Pronouncements

 In November 2023,
the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU
2023-07"). ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision
maker ("CODM") and included within each reported measure of segment profit or loss, an amount and description of its composition
for other segment items to reconcile to segment profit or loss, and the title and position of the entity's CODM. The amendments
in this update also expand the interim segment disclosure requirements. ASU 2023-07 became effective for us for the fiscal year ending
December 31, 2024 and we applied the amendments retrospectively to all prior periods presented in our consolidated financial statements.
See the Segment Information section of this Note 3 to our Consolidated Financial Statements for more information regarding
our reportable segments.

 Recently
Issued Accounting Pronouncements Not Yet Effective

 In
December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which amends the guidance in ASC 740, Income Taxes.
The ASU is intended to improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation
of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments
to improve the effectiveness of income tax disclosures. The ASU's amendments are effective for public business entities for annual
periods beginning after December 15, 2024. Entities are permitted to early adopt the standard "for annual financial statements
that have not yet been issued or made available for issuance." We are currently evaluating the impact of this ASU but do not expect
any material impact upon adoption.

 There
are no other accounting standards that have been issued but not yet adopted that we believe could have a material impact on our consolidated
financial statements.

 Advertising

 We
expense the cost of advertising as incurred. Advertising expense for the years ended December 31, 2024 and 2023 amounted to $ 70,242 and
$ 26,404, respectively.

 Earnings
Per Share

 Basic
income or loss per share is computed by dividing net income or loss by the weighted average number of shares of common stock outstanding
during the period. Diluted income or loss per share is computed by dividing net income or loss by the diluted weighted average number
of shares of common stock outstanding during the period. The diluted weighted average number of shares gives effect to all dilutive potential
common shares outstanding during the period using the treasury stock method. Diluted earnings per share exclude all diluted potential
shares if their effect is anti-dilutive, including warrants or options which are out-of-the-money and for those periods with a net loss.

 We
have outstanding warrants and stock options which have not been included in the calculation of diluted net loss per share for the twelve
months ended December 31, 2024 because to do so would be anti-dilutive. As such, the numerator and the denominator used in computing
both basic and diluted net loss per share for those periods are the same.

 Income
Taxes

 We
file a consolidated federal income tax return with our subsidiaries. The provision for income taxes is computed by applying statutory
rates to income before taxes.

 We
account for uncertainty in income taxes in our financial statements as required under ASC 740, "Income Taxes." The standard
prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position
taken or expected to be taken in a tax return. The standard also provides guidance on de-recognition, classification, interest and penalties,
accounting in interim periods, disclosure and transition accounting. Management determined there were no material uncertain positions
taken by us in our tax returns.

 Deferred
income taxes are recognized for the tax consequences in future years of temporary differences between the financial reporting and tax
bases of assets and liabilities as of each period-end based on enacted tax laws and statutory rates. Valuation allowances are established
when necessary to reduce deferred tax assets to the amount expected to be realized. A 100 % valuation allowance has been established on
deferred tax assets at December 31, 2024 and 2023, due to the uncertainty of our ability to realize future taxable income.

 The
tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented
below:

 Schedule
of Deferred Tax Assets and Liabilities

 Deferred tax assets

 Reserves and accruals not currently deductible for tax purposes

 $
 133,774

 $
 69,676

 Amortizable assets

 292,663

 109,612

 Net operating loss carryforwards

 4,508,013

 4,771,762

 Deferred tax assets, gross

 4,934,450

 4,951,050

 Deferred tax liabilities

 Amortizable assets

 ( 192,663
)

 ( 197,579
)

 Property and equipment

 ( 222,140
)

 ( 214,698
)

 Net deferred tax assets

 4,519,647

 4,538,773

 Valuation allowance

 ( 4,519,647
)

 ( 4,538,773
)

 Deferred tax assets,
 net

 $
 -

 $
 -

 As
of December 31, 2024 and 2023, we had federal net operating loss carry forwards, which can be utilized to offset future federal income tax of approximately
$ 15.8 million and $ 16.0 million, respectively. Section 382 of the Internal Revenue Code limits the utilization of net operating losses
during certain ownership changes. We have performed an analysis of our ownership changes and have determined that approximately $ 7.2 million
of our net operating losses are subject to an annual limitation. We do not expect that Section 382 will limit the utilization of
the net operating loss carry forwards in 2024. A portion of the federal
and state net operating loss carry forwards expire at various dates through 2037, and a portion of the net operating loss carry forwards
have an indefinite carry forward period. We recorded
a valuation allowance against all of our deferred tax assets as of both December 31, 2024 and 2023. We intend to continue maintaining
a full valuation allowance on our deferred tax assets until there is sufficient evidence to support the reversal of all or some portion
of these allowances. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease
to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release
are subject to change on the basis of the level of profitability that we are able to actually achieve.

 F- 12

 Segment
Information

 Operating
segments are defined in the criteria established under ASC 280, "Segment Reporting," as components of public entities that
engage in business activities from which they may earn revenues and incur expenses for which separate financial information is available
and which is evaluated regularly by our chief operating decision maker ("CODM") in deciding how to assess performance and
allocate resources. Our CODM, the President and Chief Executive Officer, assesses performance and allocates resources based on two
 operating segments: Document Management and Document
Conversion.

 The
Document Management Segment provides cloud-based and premise-based content services software, including document management and payables
automation. Its modular suite of solutions complements existing operating and accounting systems to serve a mission-critical role for
organizations to make content secure, compliant, and process-ready. This segment conducts its primary operations in the United States.
Markets served include highly regulated, risk and compliance-intensive markets in K-12 education, public safety, other public sector,
healthcare, risk management, financial services, and others. Solutions are sold both directly to end-users and through resellers.

 The
Document Conversion Segment provides services for scanning and indexing, converting images from paper to digital, paper to microfilm,
and microfiche to microfilm, as well as long-term physical document storage and retrieval. This segment conducts its primary operations
in the United States. Markets served include businesses and state, county, and municipal governments. Solutions are sold both directly
to end-users and through resellers.

 These
segments contain individual business components that have been combined on the basis of common management, customers, solutions offered,
service processes and other economic characteristics, as well as how our CODM reviews our operating results in assessing performance
and allocating resources. We currently have immaterial intersegment sales. Our CODM evaluates the performance of our segments based on
revenues and gross profits. Historically, our selling, general and administrative expenses have been stable and predictable, and further,
our CODM primarily considers such expenses in consolidation. Accordingly, our CODM has focused on growing the business while preserving
or growing our gross margins, with revenues and gross profits evaluated by segment against targets
set by management and the board of directors.

 Information
by operating segment is as follows:

 Schedule
of Segment Information

 Year ended

 Year ended

 $
 7,523,874

 $
 7,298,264

 10,494,499

 9,588,117

 Total revenues

 $
 18,018,373

 $
 16,886,381

 Cost of revenues

 $
 978,262

 $
 1,165,134

 5,515,185

 5,157,292

 Total cost of revenues

 $
 6,493,447

 $
 6,322,426

 Gross profit

 $
 6,545,612

 $
 6,133,130

 4,979,314

 4,430,825

 Total gross profit

 $
 11,524,926

 $
 10,563,955

 Capital additions, net

 $
 593,471

 $
 441,990

 234,302

 106,087

 Total capital additions, net

 $
 827,773

 $
 548,077

 Goodwill

 $
 3,989,645

 $
 3,989,645

 1,800,176

 1,800,176

 Total goodwill

 $
 5,789,821

 $
 5,789,821

 Total assets

 $
 9,641,347

 $
 10,104,004

 8,933,609

 8,922,256

 Total assets

 $
 18,574,956

 $
 19,026,260

 Statement
of Cash Flows

 For
purposes of reporting cash flows, cash includes cash on hand and demand deposits held by banks.

 4.
 Intangible Assets, Net

 At
December 31, 2024, intangible assets consisted of the following:

 Schedule of Intangible Assets

 Estimated

 Accumulated

 Useful Life

 Costs

 Amortization

 Net

 Trade names

 10 years

 $
 297,000

 $
 ( 106,467
)

 $
 190,533

 Proprietary technology

 10 years

 861,000

 ( 236,775
)

 624,225

 Customer relationships

 5 - 15 years

 4,091,000

 ( 1,506,729
)

 2,584,271

 $
 5,249,000

 $
 ( 1,849,971
)

 $
 3,399,029

 At
December 31, 2023, intangible assets consisted of the following:

 Estimated

 Accumulated

 Useful Life

 Costs

 Amortization

 Net

 Trade names

 10 years

 $
 297,000

 $
 ( 76,767
)

 $
 220,233

 Proprietary technology

 10 years

 861,000

 ( 150,675
)

 710,325

 Customer relationships

 5 - 15 years

 4,091,000

 ( 1,112,220
)

 2,978,780

 $
 5,249,000

 $
 ( 1,339,662
)

 $
 3,909,338

 Amortization
expense for the years ended December 31, 2024 and 2023, amounted to $ 510,309 and $ 510,308, respectively. The following table represents
future amortization expense for intangible assets subject to amortization.

 Schedule of Amortization Expense for Intangible Assets

 For the Years Ending December 31

 Amount

 2025

 $
 492,841

 2026

 352,441

 2027

 326,108

 2028

 309,129

 2029

 305,733

 Thereafter

 1,612,777

 Intangible
 assets

 $
 3,399,029

 5.
 Fair Value Measurements

 Under
GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value hierarchy consists of the following three levels. Level 1 inputs
are quoted prices in active markets for identical assets or liabilities. Level 2 inputs consist of quoted prices for similar assets or
liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs
other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable
market data. Level 3 inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

 F- 13

 The
carrying values of cash and equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value because of
its short maturity. Management believes that the carrying value of the 2022 Notes approximate fair value given that, while there have
been changes in the overall economic environment, including an increase in interest rates, there has not been significant net availability
of credit to the Company.

 We
had earnout liabilities related to our two 2020 acquisitions which were measured on a recurring basis and recorded at fair value, measured
using probability-weighted analysis and discounted using a rate that appropriately captures the risks associated with the obligation.
The inputs used to calculate the fair value of the earnout liabilities were considered to be Level 3 inputs due to the lack of relevant
market activity and significant management judgment. Key unobservable inputs included revenue growth rates, which ranged from 0% to 7%,
and volatility rates, which were 20% for gross profits.

 We
made the final payment of our earnout liability relating to our acquisition of Graphic Sciences in the amount of $ 700,000 in January
2023. As of December 31, 2024 and 2023, we had no earnout liabilities.

 6.
 Property and Equipment

 Property
and equipment are comprised of the following:

 Schedule of Property and Equipment

 Computer hardware and purchased software

 $
 1,867,024

 $
 1,437,023

 Leasehold improvements

 395,919

 395,919

 Furniture and fixtures

 324,296

 324,296

 Property and equipment,
 gross

 2,587,239

 2,157,238

 Less: accumulated depreciation

 ( 1,493,372
)

 ( 1,232,981
)

 Property and equipment, net

 $
 1,093,867

 $
 924,257

 Total
depreciation expense on our property and equipment for the years ended December 31, 2024 and 2023 amounted to $ 269,046 and $ 255,689,
respectively.

 F- 14

 7.
 Notes Payable – Unrelated Parties

 Summary
of Notes Payable to Unrelated Parties

 The
table below summarizes all notes payable at December 31, 2024 and 2023, respectively, other than the related party notes disclosed in
Note 8 "Notes Payable - Related Parties."

 Schedule of Notes Payable

 Notes payable – "2022 Unrelated Notes"

 $
 807,331

 $
 2,364,500

 Less unamortized debt issuance costs

 ( 25,395
)

 ( 155,258
)

 Less current portion

 ( 781,936
)

 -

 Long-term portion of notes payable

 $
 -

 $
 2,209,242

 The
principal terms of the 2022 Unrelated Notes, which are subordinated notes, as of December 31, 2024 are as follows:

 Schedule of Subordinated Notes

 Issue Date

 Interest Rate

 Interest Due

 Principal Due

 April 1, 2022

 %

 Quarterly

 December 31, 2025

 Future
minimum principal payments of the Notes Payable to Unrelated Parties of $ 807,331 are due on December 31, 2025. As of December 31, 2024
and 2023, accrued interest for these notes payable with the exception of the related party notes in Note 8, "Notes Payable - Related
Parties," was $ 0. As of December 31, 2024 and 2023, unamortized deferred financing costs were reflected within short term and long
term liabilities, respectively, on the consolidated balance sheets, netted with the corresponding notes payable balance.

 In
July 2024, a principal amount of $ 250,000 of the 2022 Unrelated Notes were sold by the unrelated noteholder to related parties at face
value. See Note 8.

 With
respect to all notes outstanding (other than the notes to related parties), interest expense, including the amortization of debt issuance
costs and debt discount for the years ended December 31, 2024 and 2023 was $ 315,133 and $ 514,480, respectively.

 2022
Unrelated Notes

 On
April 1, 2022, we sold $ 2,364,500
 in 12% Subordinated Notes ("2022 Unrelated
Notes") to unrelated accredited investors. Any accrued but unpaid quarterly installment
of interest will accrue interest at the rate of 14.0 %
per annum. Any overdue principal and accrued and unpaid interest at the maturity date will accrue a mandatory default penalty of 20 %
of the outstanding principal balance and an interest rate of 14 %
per annum from the maturity date until paid in full. We used a portion of the net proceeds from the private placement offering to finance
the acquisition of Yellow Folder and the remaining net proceeds for working capital and general corporate purposes.

 F- 15

 8.
 Notes Payable - Related Parties

 Summary
of Notes Payable to Related Parties

 The
table below summarizes all notes payable to related parties at December 31, 2024 and 2023:

 Schedule of Notes Payable

 Notes payable – "2022 Related Notes"

 $
 532,169

 $
 600,000

 Less unamortized debt issuance costs

 ( 16,657
)

 ( 39,398
)

 Less current portion

 ( 515,512
)

 -

 Long-term portion of notes payable

 $
 -

 $
 560,602

 The
principal terms of the 2022 Related Notes, which are subordinated notes, as of December 31, 2024 are as follows:

 Schedule of Subordinated Notes

 Issue Date

 Interest Rate

 Interest Due

 Principal Due

 April 1, 2022

 %

 Quarterly

 December 31, 2025

 Future
minimum principal payments of the 2022 Notes to related parties of $ 532,169 are due on December 31, 2025. As of December 31, 2024 and
2023, accrued interest for these notes payable – related parties was $ 0. As of December 31, 2024 and 2023, unamortized deferred
financing costs were reflected within long term liabilities on the condensed consolidated balance sheets, netted with the corresponding
notes payable balance.

 With
respect to all notes payable – related parties outstanding, interest expense, including the amortization of debt issuance costs,
for the years ended December 31, 2024 and 2023 was $ 96,116 and $ 103,518, respectively.

 2022
Related Note

 On
April 1, 2022, we issued a 12% Subordinated Note with a principal amount of $ 600,000
 (the "2022 Related Note") to Robert
Taglich (holding more than 5% beneficial interest in the Company's Shares). In July 2024, a principal amount of $ 250,000
 of the 2022 Unrelated Notes were sold by the unrelated noteholder to related parties at face value, comprised of $ 75,000
 sold to Michael N. Taglich, a director of the company, $ 75,000
 sold to Robert F. Taglich (each a more than 5% beneficial owner of the Company's shares), and $ 100,000
 sold to Nicholas Taglich and Juliana Taglich. Interest on the 2022 Related Note accrues at the rate of 12 %
per annum, payable quarterly in cash, beginning on September 30, 2022. Any accrued but unpaid quarterly installment of interest will
accrue interest at the rate of 14.0 %
per annum. Any overdue principal and accrued and unpaid interest at the maturity date will accrue a mandatory default penalty of 20 %
of the outstanding principal balance and an interest rate of 14 %
per annum from the maturity date until paid in full. We used a portion of the net proceeds from the private placement offering to finance
the acquisition of Yellow Folder and the remaining net proceeds for working capital and general corporate purposes.

 F- 16

 9.
 Commitments and Contingencies

 From
time to time we are involved in legal proceedings, claims and litigation related to employee claims, contractual disputes and taxes in
the ordinary course of business. Although we cannot predict the outcome of such matters, currently we have no reason to believe the disposition
of any current matter could reasonably be expected to have a material adverse impact on our financial position, results of operations
or the ability to carry on any of our business activities.

 Employment
Agreements

 We
have entered into employment agreements with three of our key executives, including one of our founders. Under their respective employment
agreements, the executives are bound by typical confidentiality, non-solicitation
and non-competition provisions. Two of the executives have severance arrangements.

 Leases

 For
each of the below listed leases, management has determined it will utilize the base rental period and have not considered any renewal
periods.

 Schedule of Operating Lease

 Location

 Square Feet

 Monthly Rent

 Lease Expiry

 Columbus, OH

 6,000

 $
 5,400

 December 31, 2028

 Madison Heights, MI

 36,000

 $
 44,930

 August 31, 2026

 Sterling Heights, MI

 37,000

 $
 22,312

 April 30, 2028

 Traverse City, MI

 5,200

 $
 5,100

 January 31, 2026

 Temporary space

 Madison Heights, MI

 3,200

 $
 1,605

 month to month

 Vehicles and equipment

 various

 n/a

 $
 10,160

 September 30, 2028

 The
following table sets forth the future minimum lease payments under our leases:

 Schedule of Future Rental Payment for Operating Lease

 For the Years Ending December 31

 Finance Lease

 Operating Leases

 2025

 $
 89,954

 $
 956,826

 2026

 81,849

 721,664

 2027

 69,624

 355,972

 2028

 49,508

 166,884

 2029

 7,533

 -

 Less imputed interest

 ( 45,183
)

 ( 197,474
)

 $
 253,285

 $
 2,003,872

 F- 17

 The
following table summarizes the components of lease expense:

 Summary of Components of Lease Expense

 For the Year Ending December 31,

 2024

 2023

 Finance lease expense:

 Amortization of ROU assets

 $
 71,326

 $
 42,115

 Interest on lease liabilities

 26,198

 16,514

 Operating lease expense

 945,001

 954,040

 Short-term lease expense

 19,254

 19,254

 The
following tables set forth additional information pertaining to our leases:

 Schedule
of Additional Information Pertaining to Leases

 For the Year Ending December 31,

 2024

 2023

 Cash paid for amounts included in the measurement of lease liabilities:

 Financing cash flows from finance leases (interest)

 $
 26,198

 $
 16,514

 Financing cash flows from finance leases (principal)

 61,874

 34,954

 Operating cash flows from operating leases

 787,537

 720,889

 ROU assets obtained in exchange for new finance lease liabilities

 89,289

 107,610

 Weighted average remaining lease term – finance leases

 3.6 years

 4.2 years

 Weighted average remaining lease term – operating leases

 2.6 years

 3.5 years

 Discount rate – finance leases

 9.72
 %

 8.87
 %

 Weighted average discount rate – operating leases

 6.89
 %

 7.01
 %

 10.
 Stockholders' Equity

 Description
of Authorized Capital

 We
are authorized to issue up to 25,000,000 shares of common stock with $ 0.001 par value. The holders of our common stock are entitled to
one vote per share. The holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board
of Directors out of legally available funds. However, the current policy of the Board of Directors is to retain earnings, if any, for
the operation and expansion of the business. Upon liquidation, dissolution or winding-up of Intellinetics, the holders of common stock
are entitled to share ratably in all assets legally available for distribution.

 Common
Stock

 As
of December 31, 2024, 4,249,735 shares of common stock were issued and outstanding, 255,958 shares of common stock were reserved for
issuance upon the exercise of outstanding warrants, 582,976 shares of common stock were reserved for issuance under our 2015 Equity Incentive
Plan, as amended (the "2015 Plan"), and our 2024 Equity Incentive Plan (the "2024 Plan"), and 110,136
shares were reserved for issuance under our 2023 Non-Employee Director Compensation Plan.

 F- 18

 Private
Placement 2022

 On
April 1, 2022, we entered into a Securities Purchase Agreement with certain accredited investors, pursuant to which we issued and sold
(i) 1,242,588 shares of the Company's Common Stock, at a price of $ 4.62 per share, for aggregate gross proceeds of $ 5,740,756 and
(ii) $ 2,964,500 in 12% Subordinated Notes, for aggregate gross proceeds of $ 8,705,256 for the combined private placement.
 We used a portion of the net proceeds of the offering to finance the acquisition of Yellow Folder, and used the remaining net
proceeds for working capital and general corporate purposes, including debt reduction.

 The
following table describes the shares and warrants issued as part of our 2022 private placement:

 Schedule of Shares and Warrants Issued

 Issuance of Common Stock

 Issue Date

 Issued

 Price per
 share

 Warrants
 Issued

 Warrant
 Exercise
 Price

 Warrant
 Fair
 Value

 Private Placement 2022

 April 1, 2022

 1,242,588

 $
 4.62

 124,258

 $
 4.62

 $
 3.91

 Amortization
of the debt issuance costs for the Private Placement 2022 offering was recorded at $ 152,604 and $ 155,724, for the years ended December
31, 2024 and 2023.

 Warrants

 The
following sets forth the warrants to purchase our common stock that were outstanding as of December 31, 2024:

 Schedule of Warrants to Purchase Common Stock

 Warrants Outstanding

 Warrant
 Exercise Price

 Warranty Expiry

 124,258

 $
 4.62

 March 30, 2027 (1)

 95,500

 $
 4.00

 March 30, 2027 (1)

 16,000

 $
 9.00

 March 30, 2027 (1)

 17,200

 $
 12.50

 March 30, 2027 (1)

 3,000

 $
 15.00

 March 30, 2027 (2)

 (1)
 Issued to the placement
agent in connection with private placements of our convertible promissory notes.

 (2)
 Issued to certain
5% stockholders.

 11.
 Stock-Based Compensation

 From
time to time, we issue stock options and restricted stock as compensation for services rendered by our directors and employees.

 Restricted
Stock

 On
March 19, 2024, we granted 127,500
shares of restricted common stock to certain employees. The grants of restricted common stock had a per share fair value of $ 8.83,
were made in accordance with the 2015 Plan, and were subject to vesting, as follows: 42,495
shares vested on March 19, 2024; 42,495
shares vest on April 2, 2025, and 42,510
shares vest on April 2, 2026. As of April 2, 2024, 10,315
shares, representing an amount of $ 69,525,
were cancelled for payment of payroll taxes as part of a cashless grant, in accordance with the 2015 Plan, resulting in a net of 32,180
shares vested. Stock compensation of $ 805,955
was recorded on the issuance of the common stock for the year ended December 31, 2024.

 On
December 28, 2023, we issued 39,864 shares of restricted common stock to our directors as part of their annual compensation plan. The
grants of restricted common stock were made in accordance with our 2023 Non-Employee Director Compensation Plan and were not subject
to vesting. Stock compensation of $ 147,500 was recorded on this issuance of restricted common stock for the year ended December 31, 2023.

 F- 19

 Stock
Options

 On
August 16, 2024, we granted non-employee directors stock options to purchase 36,000 shares at an exercise price of $ 8.78 per share, the
fair market value of the shares on the grant date, under the 2023 Non-Employee Director Compensation Plan, with 100 % vesting upon grant.
The total fair value of $ 241,735 for these stock options was recognized upon grant. On September 4, 2024, we granted employees stock
options to purchase 14,500 shares at an exercise price of $ 10.12 per share, the fair market value of the shares on the grant date, under
the 2015 Plan, with annual vesting through 2027 based on service time. The total fair value of $ 118,347 for these stock options is being
recognized over the vesting period. We did not make any stock option grants during the twelve months ended December 31, 2023.

 The
weighted-average grant date fair value of options granted during the twelve months ended December 31, 2024 was $ 7.13. The weighted average
assumptions that were used in calculating such values during the twelve months ended December 31, 2024, as well as the assumptions that
were used in calculating such values, were based on estimates at the grant date in the table as follows:

 Schedule of Estimated Values of Stock Option Grants Valuation Assumptions

 Grant Date
August 16, 2024

 Grant Date
September 4, 2024

 Risk-free interest rate

 3.77
 %

 3.61
 %

 Weighted average expected term

 5 years

 6 years

 Expected volatility

 100.97
 %

 101.00
 %

 Expected dividend yield

 0.00
 %

 0.00
 %

 A
summary of stock option activity during the years ended December 31, 2024 and 2023 is as follows:

 Schedule of Stock Options Activity

 Weighted-

 Weighted-

 Average

 Average

 Remaining

 Aggregate

 Exercise

 Contractual

 Intrinsic

 Under Option

 Price

 Life

 Value

 Outstanding at January 1, 2024

 357,887

 $
 5.69

 8 years

 $
 -

 Granted

 50,500

 9.16

 Exercised

 ( 29,976
)

 5.07

 Forfeited

 ( 4,000
)

 4.63

 -

 Outstanding at December 31, 2024

 374,411

 $
 6.22

 7 years

 $
 -

 Exercisable at December 31, 2024

 284,912

 $
 6.06

 7 years

 $
 -

 Weighted-

 Weighted-

 Average

 Average

 Remaining

 Aggregate

 Exercise

 Contractual

 Intrinsic

 Under Option

 Price

 Life

 Value

 Outstanding at January 1, 2023

 365,447

 $
 5.89

 8 years

 $
 19,200

 Forfeited

 ( 7,560
)

 15.34

 ( 19,200
)

 Outstanding at December 31, 2023

 357,887

 $
 5.69

 8 years

 $
 -

 Exercisable at December 31, 2023

 186,594

 $
 5.60

 7 years

 $
 -

 During
the years ended December 31, 2024 and 2023, stock-based compensation for options was $ 690,819 and $ 464,529, respectively.

 As
of December 31, 2024 and 2023, there was $ 213,247 and $ 547,981, respectively, of total unrecognized compensation costs related to stock
options granted under our stock option agreements. The unrecognized compensation cost is expected to be recognized over a weighted-average
period of two years. The total fair value of stock options that vested during the years ended December 31, 2024 and 2023 was $ 696,620
and $ 467,771, respectively.

 Issues
of Stock-Based Compensation

 The
following represent grants of stock options, including the fair value recognized or to be recognized over the requisite service period:

 Schedule of Stock Options Grant

 Grant date

 Shares granted
 (canceled)

 Exercise price

 Date fully vested

 Fair value

 February 10, 2016

 4,200

 $
 48.00

 February 10, 2020

 $
 174,748

 December 6, 2016

 2,000

 38.00

 December 6, 2020

 63,937

 September 25, 2017

 15,000

 15.00

 September 25, 2019

 194,149

 September 25, 2017

 10,000

 19.00

 September 25, 2019

 126,862

 January 30, 2019

 45.00

 January 30, 2019

 March 11, 2019

 ( 33,200
)

 -

 -

 -

 March 11, 2019

 33,200

 6.50

 December 6, 2020

 24,898
 (1)

 March 11, 2019

 10,100

 6.50

 March 11, 2023

 44,591

 September 2, 2020

 99,000

 4.00

 September 2, 2024

 327,181

 April 14, 2022

 220,587

 6.08

 April 14, 2025

 1,152,470

 August 16, 2024

 36,000

 8.78

 August 16, 2024

 241,735

 September 4, 2024

 14,500

 10.12

 September 4, 2027

 118,347

 (1)

 Represents
 incremental fair value of replacement shares compared to canceled shares.

 F- 20

 12.
 Concentrations

from a limited number of customers have accounted for a substantial percentage of our total revenues. During the years ended December
31, 2024 and 2023, our largest customer, the State of Michigan, accounted for 40 % and 35 %, respectively, of our total revenues for each
period.

 For
the years ended December 31, 2024, and 2023, government contracts, including K-12 education, represented approximately 80 % of our net
revenues for each period. A significant portion of our sales to resellers represent ultimate sales to government agencies.

 As
of December 31, 2024, accounts receivable concentrations from our two largest customers were 58 % and 6 % of gross accounts receivable,
respectively by customer. As of December 31, 2023, accounts receivable concentrations from our two largest customers were 62 % and 3 %
of gross accounts receivable, respectively by customer. Accounts receivable balances from our two largest customers at December 31, 2024
have been partially collected.

 13.
 Subsequent Events

 Exercise
of Warrants

 On
January 13, 2025, a warrant holder exercised 14,698 warrants at an exercise price of $ 4.62 with a fair market price on that date of $ 13.17.
Shares in the amount of 9,541 were issued in a cashless exercise.

 F- 21

 ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.

 ITEM
9A. CONTROLS AND PROCEDURES

 Evaluation
of Disclosure Controls and Procedures

 We
maintain "disclosure controls and procedures" as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are
designed to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated
and communicated to our management, including our principal executive officer and principal financial office, and Board of Directors,
as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures,
management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable
assurance of achieving the desired objectives, and we necessarily are required to apply our judgment in evaluating the cost-benefit relationship
of possible disclosure controls and procedures.

 Our
management, including our principal executive officer and principal financial officer, evaluated the effectiveness of the design and
operation of our disclosure controls and procedures as of December 31, 2024 and concluded that our disclosure controls and procedures
were effective as of December 31, 2024.

 Management's
Annual Report on Internal Control Over Financial Reporting

 Our
management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f)
and 15d-15(f) of the Exchange Act. Internal control over financial reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation and fair presentation of consolidated financial statements for external purposes,
in accordance with generally accepted accounting principles. The effectiveness of any system of internal control over financial reporting
is subject to inherent limitations and therefore, may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
of future periods are subject to the risk that the controls may become inadequate due to change in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.

 Our
management, including our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of
our internal control over financial reporting using the criteria set forth by the committee of Sponsoring Organization of the Treadway
Commission (COSO) in Internal Control-Integrated Framework (2013).

 A
material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is
a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented
or detected on a timely basis.

 Based
on our evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2024, our disclosure
controls and procedures were effective as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act and we did maintain effective
internal control over financial reporting, based on criteria issued by COSO.

 This
report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit
us to provide only management's report in this report.

 Changes
in Internal Control Over Financial Reporting

 There
were no changes in our internal control over financial reporting (as defined in Rules 13a-13(f) and 15d-15(f) under the Exchange Act)
that occurred during our fourth fiscal quarter of the fiscal year ended December 31, 2024, that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

 ITEM
9B. OTHER INFORMATION

 No t
applicable

 ITEM
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION.

 Not
applicable.

 Part
III

 ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

by reference to our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders, which will be filed with the SEC no later

 ITEM
11. EXECUTIVE COMPENSATION

by reference to our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders, which will be filed with the SEC no later

 ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

by reference to our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders, which will be filed with the SEC no later

 ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

by reference to our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders, which will be filed with the SEC no later

 ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES

by reference to our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders, which will be filed with the SEC no later

 Part
IV

 ITEM
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 Reference
is made to the Index to Financial Statements beginning on Page F-1 hereof.

 Financial
Statement Schedules.

 (a)
Documents Filed as Part of Report

 (1)
Financial Statements.

 (3)
Exhibits.

 The
exhibits listed on the accompanying Exhibit Index are filed or incorporated by reference as part of this report and such Exhibit Index
is incorporated by reference.

 Signatures

 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on March 24, 2025.

 Intellinetics,
 Inc.

 By:

 /s/
 James F. DeSocio

 James
 F. DeSocio

 President,
 Chief Executive Officer and Director

 Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on March 24, 2025.

 Name

 Title

 /s/
 James F. DeSocio

 President,
 Chief Executive Officer, and Director

 James
 F. DeSocio

 (Principal
 Executive Officer)

 /s/
 Joseph D. Spain

 Chief
 Financial Officer and Treasurer

 Joseph
 D. Spain

 (Principal
 Financial and Accounting Officer)

 /s/
 Stanley P. Jaworski, Jr.

 Stanley
 P. Jaworski, Jr.

 /s/
 Paul Seid

 Paul
 Seid

 /s/
 Michael N. Taglich

 Michael
 N. Taglich

 /s/
 John Guttilla

 John
 Guttilla

 EXHIBIT

 Exhibit

 No.

 Description

 Incorporation
 by Reference

 Form

 Exhibit

 Filing
 Date

 3.1.1

 Articles of Incorporation of Intellinetics, Inc.

 10-SB

 3.1

 10-02-2000

 3.1.2

 Certificate of Correction, effective May 22, 2007

 3.1

 06-15-2007

 3.1.3

 Certificate of Amendment to Articles of Incorporation of Intellinetics, Inc.

 99.1

 09-03-2014

 3.1.4

 Certificate of Amendment to Articles of Incorporation of Intellinetics, Inc., dated March 2, 2020

 3.1

 03-04-2020

 3.1.5

 Certificate of Amendment to Articles of Incorporation of Intellinetics, Inc., dated March 3, 2020

 3.2

 03-04-2020

 3.2.1

 Bylaws of Intellinetics, Inc.

 10-SB

 3.3

 10-02-2000

 3.2.2

 Amendment No. 1 to the Bylaws of Intellinetics, Inc.

 3.4

 03-01-2012

 3.2.2

 Amendment No. 2 to the Bylaws of Intellinetics, Inc.

 3.3

 03-04-2020

 4.1

 Form of Stock Certificate

 4.1

 3-30-2020

 4.2

 Form of Placement Agent Warrants, dated January 31, 2017

 10.3

 01-06-2017

 4.3

 Form of Warrant to Purchase Common Stock, issued October 22, 2017

 10.2

 01-06-2017

 4.4

 Form of Placement Agent Warrants

 10.5

 11-24-2017

 4.5

 Form of Placement Agent Warrants

 10.3

 09-26-18

 4.6

 Description of Registered Securities+

 4.7

 Form of Placement Agent Warrants, dated April 1, 2022

 4.1

 04-05-2022

 4.8

 Form of 12% Subordinated Notes, dated April 1, 2022

 10.2

 04-05-2022

 10.1

 Amended Employment Agreement of Matthew L. Chretien, dated September 16, 2011

 10.37

 02-13-2012

 10.2

 Amended Offer of Employment of Matthew L. Chretien, dated September 16, 2011

 10.38

 02-13-2012

 10.3

 Employment Agreement of Joseph D. Spain dated December 2, 2016

 10.3

 12-06-2016

 10.4

 Lease Renewal Agreement by and between Intellinetics, Inc. and Dividend Drive LLC, dated as of August 9, 2016

 10.6

 03-30-2017

 10.5

 Intellinetics, Inc. 2015 Equity Incentive Plan

 10.3

 04-30-2015

 10.6

 First Amendment to Intellinetics, Inc. 2015 Equity Incentive Plan, dated September 25, 2017

 10.2

 09-26-2017

 10.7

 Second Amendment to Intellinetics, Inc. 2015 Equity Incentive Plan, dated February 19, 2018

 10.2

 02-23-2018

 10.8

 Third Amendment to Intellinetics, Inc. 2015 Equity Incentive Plan, dated April 17, 2020

 10.8

 3-24-2022

 10.9

 Fourth Amendment to Intellinetics, Inc. 2015 Equity Incentive Plan, dated April 29, 2021

 10.1

 05-05-2021

 10.10

 Form of Non-Qualified Stock Option Agreement under Company's 2015 Equity Incentive Plan

 10.9

 03-28-2016

 10.11

 Form of Incentive Stock Option Agreement under Company's 2015 Equity Incentive Plan

 10.6

 01-05-2016

 10.12

 Offer Letter, dated September 25, 2017, between Intellinetics, Inc. and James F. DeSocio

 10.1

 09-26-2017

 10.13

 Intellinetics, Inc. 2018 Executive Incentive Compensation Plan

 10.3

 02-23-2018

 10.14

 Amendment, dated February 19, 2018, between Intellinetics, Inc. and Joseph D. Spain

 10.1

 02-23-2018

 10.15

 State of Michigan Enterprise Procurement Notice of Contract No 171 180000000749, between the State of Michigan and Graphic Sciences, Inc., with Standard Contract Terms, dated June 1, 2018

 10.4

 03-04-2020

 10.16

 Standard Industrial Lease Agreement, by and between KHS Properties, LLC and Graphic Sciences, Inc., dated August 30, 2018.

 10.14

 03-30-2021

 10.17

 Lease, by and between Liberty Park Commerce Center, LLC and Graphic Sciences, Inc., dated February 5, 2021.

 10.15

 03-30-2021

 10.18

 Intellinetics, Inc. 2023 Non-Employee Director Compensation Plan

 10.1

 05-15-2023

 10.19

 Contract Change Notice No. 2 and 3, by and between Graphic Sciences, Inc. and the State of Michigan Central Procurement Services, Department of Technology Management, dated August 3, 2023

 10.1

 08-14-2023

 10.20

 Intellinetics, Inc. 2024 Equity Incentive Plan

 S-8

 99.1

 03-21-2025

 10.21

 Amendment to 12% Subordinated Promissory Notes

 10.1

 03-19-2024

 10.22

 Restricted Stock Award Agreement pursuant to the 2015 Intellinetics, Inc. Equity Incentive Plan

 10.2

 03-19-2024

 10.23

 Form of Non-Qualified Stock Option Agreement under Company's 2023 Director Compensation Plan

 S-8

 99.3

 03-21-2025

 19.1

 Intellinetics, Inc. Insider Trading Policy +

 21.1

 List of Subsidiaries of Intellinetics, Inc. +

 23.1

 Consent of Independent Registered Public Accounting Firm +

 31.1

 Certification of Principal Executive Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002 +

 31.2

 Certification of Principal Financial Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002 +

 32.1

 Certification of Principal Executive Officer pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 +

 32.2

 Certification of Principal Financial Officer pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 +

 Intellinetics, Inc. Executive Compensation Clawback Policy +

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 +

 Filed
 herewith: