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Nature of Business
3 Months Ended
Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of Business

1. NATURE OF BUSINESS

 

Business

 

Intellicheck, Inc. (the “Company” or “Intellicheck”) is a prominent technology company that is engaged in developing, integrating and marketing identity authentication and threat identification solutions to address challenges that include bank and retail fraud prevention, law enforcement threat identification, and mobile and handheld access control and security for the government, military and commercial markets. Intellicheck’s products include Retail ID®, a solution for preventing fraud in the retail and banking industry; Age ID®, a smartphone or tablet-based solution for preventing sale of age-restricted products to minors; and Defense ID®, a mobile and fixed infrastructure solution for threat identification, identity authentication and access control to military bases and other government facilities.

 

Intellicheck continues to develop and release innovative products based upon its rich patent portfolio consisting of twenty issued patents and five pending.

 

Liquidity

 

For the three months ended March 31, 2020, the Company had net income of $26,602 and used cash in operations of $460,657. As of March 31, 2020, the Company had cash of $3,010,089, working capital of $3,128,680 and an accumulated deficit of $116,908,510. Based on the Company’s business plan and cash resources, Intellicheck expects its existing and future resources and revenues generated from operations and current level of expenses from operations to satisfy its working capital requirements for at least the next 12 months.

 

However, if performance expectations fall short or expenses exceed expectations, the Company may need to secure additional financing or reduce expenses to continue operations. Failure to do so would have a material adverse impact on its financial condition. There can be no assurance that any contemplated additional financing will be available on terms acceptable, if at all. The Company is also closely following the COVID-19 pandemic as it effects its operations and revenues and expects to be negatively impacted by this pandemic, at least in the short term. See Part II, Item 1A for more information. If required, the Company believes it would be able to reduce expenses to a sufficient level to continue as a going concern.

 

While the Company did not incur significant disruptions during the three months ended March 31, 2020 from COVID-19, it is unable to predict the impact that this pandemic will have on the Company, including its financial position, results of operations and cash flows, the impact on its customers and the related demand for the Company’s services due to numerous uncertainties.

 

On April 9, 2020 the Company entered into an unsecured promissory note in the amount of $796,100 (the “Note”) with First Bank (the “Loan Servicer”) under the Paycheck Protection Program administered by the U.S. Small Business Administration (“SBA”) and established as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The Company received these proceeds on April 14, 2020. Under the terms of the Note, the Company can apply for forgiveness on this Note with the Loan Servicer if certain conditions including the use of the Note proceeds are met over an eight-week period commencing from the date of the Note. If all or part of this Note is not forgiven, the Note has an interest rate of 1% and must be repaid within two years from the date of the Note.