Intellicheck Mobilisa

Kurta Law is investigating potentially unsuitable recommendations of Intellicheck Mobilisa stock to investors. Brokers are obligated to make suitable investment recommendations, meaning that an investment matches an investor’s desired degree of risk. Recommendations of overly risky stocks can violate securities regulations.

Speak to a securities attorney today by contacting our team at (877) 600-0098 or emailing info@kurtalawfirm.com for a free case evaluation.

What is Intellicheck Mobilisa?

According to the prospectus, Intellicheck Mobilisa, Inc. (IDN) develops and markets wireless technology and identity-verification systems for commercial clients as well as government and military applications. The prospectus states that the company offers the following types of products:

• Technology preventing commercial credit/debt card and check cashing fraud and identity theft involving fraudulent IDs
• ID-scanning technology to get instant approval of store-branded cards from card issuers
• Anti-terrorism security software and other systems designed for use in airports, rail and bus stations, military installations, and other high-security locations
• Technology that auto-fills information in certain forms and applications by reading the bar code or magnetic stripe of a customer’s ID
• Wireless Over Water technology, which provides instantaneous long-distance communication primarily designed for usage at sea and in Fresnel zones where radio communication is impractical
• AIRchitect tool, for designing wireless networks
• RADHAZ radiation-detecting device, designed to detect radio frequencies

What are the Risks Associated with Intellicheck Mobilisa?

Investors should know that Intellicheck Mobilisa disclosed extensive risks in its stock prospectus that could severely affect stockholders’ investments. For example, the company states that it has suffered losses since its inception and expects to “incur additional expenditures in with the sales growth of [its] business,” which could depress its stock price.

Dependence on Government Contracts

According to the prospectus, Intellicheck Mobilisa depends on government research and development contracts for a “significant portion” of its revenue. Unlike commercial contracts, government contracts typically involve a competitive bidding process where bidders who were not awarded contracts can contest the decision, potentially resulting in financial loss for the winning bidder.

As noted in the prospectus, government agencies and the U.S. military “require long sales and implementation cycles for products,” which can jeopardize Intellicheck Mobilisa’s revenues.

Government contractors are also subject to audits and other routine investigations by various agencies, such as the Defense Contract Audit Agency. A negative audit can have serious consequences, ranging from termination of the contract to criminal sanctions.

Risks Associated with Defense ID System

Intellicheck Mobilisa’s Defense ID system, which reads and verifies data from ID cards, depends on access to more than 100 government and law enforcement agency databases. Loss of access to these databases would seriously compromise the Defense ID system’s value.

Other risks include branches of the U.S. military revoking the company’s Authority to Operate (ATO) on their bases and a potential data breach leaking sensitive personal or government information.

Share Price Volatility

Intellicheck Mobilisa discloses that its stock has experienced volatility in the past: “From January 1, 2002 to January 8, 2014, the closing price of our common stock has varied from a high of $19.45 to a low of $0.28 per share.”

This volatility may continue in the future, influenced by the company’s financial situation, product or acquisition announcements by competitors, and general market conditions.

Aegis Capital Corp. Underwriting  

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm. 

What Can I Do If I Suffered Losses?

If you have concerns about your investment in Intellicheck Mobilisa, reach out to a Kurta Law securities attorney today. Kurta Law attorneys regularly secure fair settlements in cases of broker misconduct and unsuitable investment recommendations. Call (877) 600-0098 or email info@kurtalawfirm.com.