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Be Sure to See the "Conclusion - Our Take" Section at the End

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Symbol: IDN

Intellicheck Mobilisa

 

Penny Stock Corporate Logo

Stock Information

Company Location

Current Price: $0.72

Short Term Sell Target: $0.92 - $1.10

Long Term Sell Target: $1.15 - $1.35

Exchange:  NYSE 

191 Otto Street
Port Townsend, WA 98368
Phone: 360-344-3233
Fax: 360-344-3323

Don't forget to read the "Conclusion"  at the end to see why we believe IDN is a winner.

MONDAY UPDATE:Daily Penny Stock Chart

145% gain in just 3 weeks!

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 this recent spike in volume. Take the gift they are giving today and celebrate a double+ in just three weeks!

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Company Profile

Intellicheck Mobilisa, Inc. (IDN), incorporated in 1994, develos and sells wireless technology and identity (ID) systems for many platforms including mobile and handheld access control and security systems for the governments, military and commercial customers. Its biggest revenue products include ID systems and the development of wireless security applications/software. ID systems include ID card reading and sales of defense security. Among its most interesting wireless products include the 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.

Identity Systems

IDN’s ID Systems are sold to the businesses and government customers. Business ID products include ID√Check Family, data collection devices and instant credit application kiosk software applications. ID√Check technology is an advanced document/ID verification software. That software can instantly read and detect IDs such as American and Canadian driver's licenses as well as business/employee IDs and government/military issued ID.
ID/Check Mobile
IDN’s ID√Check Family includes ID√Check SDK, ID√Check POS, ID√Check BHO, ScanInn AssureScan, ID√Check PC and ID√Check Mobile.

IDN’s ID√Check POS is a software application that runs on multiple VeriFone devices.

IDN’s ID√Check BHO is a browser helper object (BHO) for Internet explorer. The BHO allows customers to integrate its core ID√Check technology into their Web-based applications.

IDN’s ScanInn is a software application that speeds up check-in and ID verification at hotels and motels.

IDN’s ID√Check PC is a standalone software solution that is designed to provide the features of ID√Check for Windows based platforms.

IDN’s ID√Check Mobile is the designation for multiple hand held devices that IDN offers customers.

IDN’s government identification offering includes defense ID system and fugitive finder.

Wireless Security

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 designation for 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.

Newest Patent

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.IDN Mobile Product

IDN's 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 military, Homeland Security, and seaport users.

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.”

IDN's Scanning Buoy This is IDN's scanning buoy.

While "how" they do it is still classified, "what" they do can be told. This buoy actively scans passing ships in waterways - and scans container shipments as well.

It uses scans in Infra-Red, Radiological and other spectrums and can see "INSIDE" containers. Operators can actively scan ships, or the buoy can passively scan and alert operators of certain conditions.

These buoys will allow ships to be scaned out in the waterway where they travel anyway to and from ports. Current technology requires sensors from cranes to hang down and be extremely close to the ship and containers. The buoys will prevent the extreme bottlenecks that occur now - allowing ALL ships to be scanned, not just a small percentage.

Latest Product

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."

Checking Driver License In Real Time

Quarterly Results

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.”

Management

CEO of IDNNelson 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.



CFO of IDNBill White
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 customers.

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.

(IDN rose 145% In Just Three Weeks.)