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an Actual Penny Stock Pick Posted for Subscribers
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Section at the End
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Current Price: $0.72
Short Term Sell Target:
$0.92 - $1.10
Long Term Sell Target:
191 Otto Street
Port Townsend, WA 98368
IDN is a
145% gain in just
Shares of IDN have rallied ahead of the expected earnings announcement tomorrow. Shares just hit an intra-day high of $1.79. That's a 145%+ rise from its price when we profiled the stock at $0.72. And all that in just three weeks.
As the old saying goes... "Buy on the Rumor and Sell on the News"
What that means is how stocks act many times, not what we want to do. Because traders will sell once news is announced to take profits and take risk off, there's a good chance that the stock could move lower once earnings are announced. If you haven't already taken nice profits
here and still have shares, it's usually best to take profits and not wait for the earnings announcement. Even if the announcement is excellent, shares could trade down as traders might have control of the price with
Intellicheck Mobilisa, Inc. (IDN), incorporated in 1994,
sells wireless technology and identity
(ID) systems for
including mobile and handheld access control and security systems for the
governments, military and commercial
ID systems and the development of wireless security applications/software.
ID systems include
ID card reading and sales of defense security.
wireless products include
Aegeus, a wireless security buoy for the government, military and oil industry. IDN’s products
also include the defense identification data and fugitive finder systems.
ID Systems are
sold to the
businesses and government
ID products include ID√Check Family, data collection devices and instant credit application kiosk software applications. ID√Check technology is
an advanced document/ID
ID√Check PC is a standalone software solution that is designed to provide the features of ID√Check for Windows based platforms.
IDN’s Wireless Security products and services include wireless over water technology (WOW), floating area network (FAN), Aegeus wireless security buoy and littoral sensor grid (LSG) and AIRchitect. WOW technology allows users to access the Internet while in motion on water. FAN provides an alternative communications for the United States Navy. LSG is the
the next evolution of WOW and FAN.
This technology allows for security monitoring of harbors and waterways both from a terrorist attack or accidental environmental conditions.
IDN competes with CardCom, TriCom Technologies, ID-Logix, Legal Age, Safran Group, ActivIdentity Corporation, EFJ, Inc., Sea-Mobile, Motorola and Honeywell.
Video: TWIC IM2600 Readers
Below is a video produced
a few months ago to introduce the
IM2600 Series TWIC Readers. The video runds about 3.5 minutes.
Early last month, IDN announced it has obtained a U.S. patent for a technology that reads the information encoded on an ID card
AND identifies a range of possible individuals whose name and description (e.g., date of birth, age, gender, etc.) either exactly or closely match that on the card, and displays one or more of the identified individuals to a system user based on environmental conditions. This is IDN’s
18th U.S. or foreign patent.
advantage over others is that the software uses information about national or local threat levels to determine which individuals to display. For example, threats generated by the Department of Homeland Security impact the level of detail of the search applied in reviewing a person’s ID card and can assist in ranking individuals whose identities are displayed. Individuals with relevant criminal activity (e.g., past terrorist activity) may be assigned a higher “score” and displayed more prominently. Furthermore, the technology
remembers where a previous match
did not belong to an individual, thus allowing the software’s matching to improve over time.
The new technology
described in the ‘446
patent is designed for
Security, and seaport
Dr. Nelson Ludlow, President and CEO of IDN, said, “This new technology substantially increases the accuracy in real-life scenarios with which a determination can be made regarding a match to wanted and criminal databases. This is expected to help law enforcement officials decrease the frequency of false positives and provide the most useful information quickly to law enforcement.”
"how" they do it
"what" they do
can be told.
passing ships in
waterways - and
scans in Infra-Red,
and can see
ships, or the
These buoys will
allow ships to
be scaned out in
to and from ports.
from cranes to
hang down and be
to the ship and
occur now -
ships to be
just a small
In late January, IDN announed it had released a new software product,
MexiScan, for authenticating Mexican driver’s licenses and IDs.
MexiScan, a new technology platform being offered by IDN allows banks, retailers and hotel chains to scan IDs issued from Mexico in order to automatically populate credit card and store loyalty club applications, check in guests, verify age and authenticate ID cards. MexiScan is similar to IDN’s ID Check software which enables retailers to parse US and Canadian driver’s licenses.
Dr. Ludlow, CEO, said, “It just made sense to create a product to read Mexican IDs. Our national retail and hospitality customers want to ensure they are safely handling personal identity information for all of their customers, not just U.S. citizens.” According to Pew Research Hispanic Trends Project, Hispanics of Mexican origin are a significant portion of the U.S. population, accounting for 11 percent overall."
Back in November,
IDN announced third quarter results.
Financial Highlights Include:
► Revenue for the quarter ended September 30 increased 21.7% compared to the prior year.
► Net income for the quarter was $16,000, or $0.00 per fully diluted share, compared to a net loss of ($381,000) or ($0.01) per share loss in the year-ago third quarter.
► Renewed $2,000,000 line of credit with Silicon Valley Bank.
Business Highlights Include:
► Launched first major iPhone application, barZapp, for alcohol servers to verify age. barZapp 2.0 for iPhone was released subsequently, and Android version released in the Google Store.
► TSA approved IDN’s two mobile TWIC card readers; first such devices to be approved by the Department of Homeland Security. Two facilities purchased these new readers so far.
► Fugitive Finder product received government FIPS-201 certification. U.S. Army Fort Polk, Louisiana purchased these new readers.
► Launched test of new State Aware Software ID-checking product, which guides data collection based on individual state laws, at a major national retailer.
Management's Comments on the Quarter
Dr. Ludlow commented, “I am very pleased with the progress we are making in rebuilding the company. This progress is due to several factors, including our new and expanded product line; a more profitable and predictable business model, namely SaaS (Software as a Service); and improved service support for our customers. These factors resulted in an expanded client base and growth in both the commercial and government sectors. Last quarter, we received certification from TSA for our new TWIC card readers; this has resulted in two locations already purchasing our products, and dozens more asking for quotes and product demonstrations. We had good initial launches with our barZapp app in the Apple Store and last week in the Google Store, which demonstrates our company’s strength in developing smartphone apps.”
Dr. Ludlow continued, “We believe our new emphasis on mobile applications will continue to be beneficial for the company and its shareholders, as there is increasing demand for mobile applications. Overall, I believe we are headed in the right direction, and I am optimistic about our future as a company.”
Nelson Ludlow, Ph.D
Chief Executive Officer
Dr. Nelson Ludlow, Ph.D., President, Chief Executive Officer, Director of IDN Inc. peviously Dr. Ludlow served as the Chairman of the Board of Directors of IDN. Dr. Ludlow previously served as President and CEO of Mobilisa as founder from 2001 through 2008, and President and CEO of IDN from the merger in 2008 to March, 2011. Dr. Ludlow is 51 years old and has over 30 years’ experience in software development for the military and corporate sectors. While in the Air Force, Dr. Ludlow served as a mathematician, a pilot, an intelligence officer at the National Air Intelligence Center, Technical Director for Artificial Intelligence at USAF Rome Laboratory, Assistant Professor of Computer Science at the Naval Postgraduate School, and the Director of Technology and Services for Radar Evaluation Squadron.
Chief Financial Officer
Mr. Bill White is Chief Financial Officer, Treasurer, Secretary of IDN, Inc., since April 1, 2012. He has more than 28 years of experience in financial management, operations and business development. Prior to joining IDN, he served 11 years as the Chief Financial Officer, Secretary and Treasurer of FocusMicro, Inc. (“FM”). As co-founder of FM, Mr. White played an integral role in growing the business from IDN's inception to over $36 million in annual revenue in a five year period.
Conclusion - Our Take
PLEASE know that IDN is most definately a micro-cap stock as it has a market value (as of the time of this report) of just slightly more than $20 million. Insiders hold more than 40% of all outstanding shares. Because of that, the total number of shares in 'float'
(that is, shares out in
public hands freely
tradeable) is less than 19 million.
► "Outstanding" shares refer to the number of stocks that a company actually has issued.
► "Restricted" shares refer to a company's issued stock that cannot be bought or sold without special permission by the SEC. Often, this type of stock is given to insiders as part of their salaries or as additional benefits.
These are the shares we used to sell for executives and make sure they followed the rules and filed all required documents.
► "Float" refers to a company's shares that are freely bought and sold without restrictions by the public and does not include closely-held shares like the restricted shares.
As IDN trades an average of 700,000 shares daily over the past three months and 1.4 million shares on average the past 10 trading days, it would seem obvious that the stock can provide a bumpy ride. Usually, high volume would mean more liquidity for larger stocks, providing less volatility (swings in price). But because IDN can (on average) trade just shy of 10% of all shares in float in one trading day, the price can move up and down quite quickly when the number of shares on the 'other side' of a buy or sell order are not adequate to fill the need.
What we see here is IDN finally beginning to break the profit and stealth bubble. Recent cost cutting has edged IDN to profits and that, as well as publicity from new products, has gathered some attention for this small company.
As the CEO, Dr. Ludlow commented, "There's no secret to get our company to profitability this quarter, we did cut some costs. We cut labor about 30%, 35%. We're doing more now with about 1/3 less people than we had before. We have not -- we're increasing in sales, and we've not scavenged the software team. So we're keeping innovation up, and we're keeping sales up, but we're a much leaner company and tougher company than we were before."
Asked about the outlook for the company, he stated "Where are we headed? The best new product that's out there is our Software as a Service. What's very, very cool about that, is it's going to be able to make my job easier for you, as investors, because we can project revenue much more intelligently, and it'll be less lumpy revenue. As we start to spread this revenue out and they pay a monthly fee, it's better for you investors. It's better for us. It's easier for us to maintain. And I'll give you the reason why. Every Motel 6 -- and you might not know this -- or nearly, like 99% of all Motel 6s, have a reader for ID made by us. It says Intellicheck Mobilisa right on it. Well, that's a lot of hardware at a lot of different places. If we have to touch every one of those devices and go to every Motel 6 to update it, that's costly for them or costly for us, however you look at it. If you have one server -- all Motel 6s can be updated."
Basically, IDN has not only won patents and released new products, but is also moving toward a Software as a Service (SaaS) model for at least a large portion of its revenue - a more even revenue stream that will bring in more customers and it requires less upfront capital
to obtain those
Finally, profits have started to hit the bottom line, revenues are still
increasing with new products and
steadier income streams will allow better projections. Add in that IDN is still lookiing for cost containment and cutting while keeping their innovation and
R&D fully funded. The future looks bright if one can handle the bumps along the frontage road before we hit the highway.
We feel that IDN could post 25-50% gains in the short-term
(2-4 weeks) and as much
as 75-100% gains in 2-4 months.
145% In Just