Registration
No. 333-______
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-3
REGISTRATION
STATEMENT
Under
THE
SECURITIES ACT OF 1933
INTELLI-CHECK-MOBILISA,
INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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11-3234779
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(State
or other jurisdiction
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(I.R.S.
Employer
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of
incorporation or
organization)
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Identification
Number)
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191
Otto Street
Port
Townsend, WA 98368
(360)
344-3233
(Address,
including zip code, and telephone number, including area code, of registrant’s
principal executive offices)
Nelson
Ludlow
Chief
Executive Officer
Intelli-Check-Mobilisa,
Inc.
191
Otto Street
Port
Townsend, WA 98368
(360)
344-3233
(Name,
address, including zip code, and telephone number, including area code, of
agent
for service)
Copies
to:
Mitchell
S. Nussbaum, Esq.
Loeb
& Loeb LLP
345
Park Avenue
New
York, NY 10154
(212)
407-4000
Approximate
date of commencement of proposed sale to the public: From
time
to time after the effective date of this Registration Statement, as determined
by the selling security holders.
If
the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box. o
If
any of
the securities being registered on this Form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. x
If
this
Form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. o
If
this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o
If
delivery of the prospectus is expected to be made pursuant to Rule 434, please
check the following box. o
CALCULATION
OF REGISTRATION FEE
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Title of Each Class of
Securities to be Registered
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Amount to
be Registered(1)
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Proposed Maximum
Offering Price
Per Share
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Proposed Maximum
Aggregate
Offering
Price
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Amount of
Registration Fee
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Common
Stock, $0.001 par value per share
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12,348,201
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$
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2.65
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(2)
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$
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32,722,732
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(2)
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$
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1,286.00
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(1)
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Pursuant
to Rule 416 of the Securities Act of 1933, as amended, the shares
of
Common Stock offered hereby also include such presently indeterminate
number of shares of our Common Stock as shall be issued by us to
the
selling shareholders upon adjustment under anti-dilution provisions
covering the additional issuance of our Class A Common Stock resulting
from stock splits, stock dividends or similar
transactions.
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(2)
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Estimated
in accordance with Rule 457(c) of the Securities Act of 1933, as
amended,
solely for the purpose of computing the amount of the registration
fee,
based on the average of the high and low sales prices of the Registrant’s
Common Stock on the American Stock Exchange on May 29,
2008.
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The
Registrant hereby amends this Registration Statement on such date or dates
as
may be necessary to delay its effective date until the Registrant shall file
a
further amendment that specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act, as amended, or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The
information in this prospectus is not complete and may be changed. The
securityholders identified in this prospectus may not sell these securities
until the registration statement filed with the Securities and Exchange
commission is effective. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitte3d.
Subject
to completion, dated May 30, 2008
PROSPECTUS
12,348,201
Shares
INTELLI-CHECK-MOBILISA,
INC.
Common
Stock
This
prospectus relates to the resale by the selling security holders named in this
prospectus of up to an aggregate of 12,348,201 shares of our common stock,
of
which 66,551 are issuable upon exercise of warrants. We will not receive any
of
the proceeds from the resale of the shares of our common stock by the selling
security holders, but we will receive the exercise price of the warrants if
they
are exercised. See “Use of Proceeds.”
Our
common stock is traded on the American Stock Exchange under the symbol
“IDN.”
On May
29, 2008, the last closing price for our common stock was $2.62.
See
“Risk Factors” beginning on page 4 of this Prospectus for factors you should
consider before buying shares of our common stock.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities, or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
Our
principal executive offices are located at 191 Otto Street, Port Townsend,
WA
98368, and our telephone number is (360) 344-3233.
The
date
of this Prospectus is May 30, 2008.
OVERVIEW
OF BUSINESS
Intelli-Check
was formed in 1994 to address a growing need for a reliable document and age
verification system that could be used to detect fraudulent driver licenses
and
other widely accepted forms of government-issued identification documents.
Since
then, our technology has been further developed for application in the
commercial fraud protection, access control and governmental security markets.
Additionally, it is currently being used to increase productivity by addressing
inefficiencies and inaccuracies associated with manual data entry. The core
of
Intelli-Check’s product offerings is our proprietary software technology that
verifies the authenticity of driver licenses and state issued non-driver and
military identification cards used as proof of identity. Our patented ID-Check®
software technology instantly reads, analyzes, and verifies the encoded format
in magnetic stripes and barcodes on government-issued IDs from over 60
jurisdictions in the U.S. and Canada to determine if the encoded format is
valid. We have served as the national testing laboratory for the American
Association of Motor Vehicle Administrators (AAMVA) since 1999 and have access
to all the currently available encoded driver license formats.
On
November 20, 2007, Intelli-Check and Mobilisa, a private company that is a
leader in identity systems and mobile and wireless technologies, entered into
a
merger agreement pursuant to which our wholly-owned subsidiary would merge
with
and into Mobilisa, resulting in Mobilisa becoming a wholly-owned subsidiary.
At
a
special meeting of stockholders held on March 14, 2008, Intelli-Check’s
stockholders voted to approve the merger, as well as to amend Intelli-Check’s
certificate of incorporation to change our name to Intelli-Check-Mobilisa,
Inc.,
increase the authorized shares of common stock and to increase the number of
shares issuable under our 2006 Equity Incentive Plan. The headquarters of
Intelli-Check was moved to Mobilisa’s offices in Port Townsend, Washington.
The
former shareholders of Mobilisa received shares of Intelli-Check common stock
such that they own 50% of Intelli-Check’s common stock and options and warrant
to purchase 2,429,932 share of Intelli-Check - Mobilisa common stock. The
aggregate value of the purchase consideration was $51,246,779, based on the
average price of our common stock on the two days prior to and after November
20, 2007.
Mobilisa,
Inc. was incorporated in the state of Washington in March 2001. Mobilisa is
designated as a woman- and veteran-owned small business. Mobilisa’s headquarters
in Port Townsend, Washington is located in a Historically Underutilized Business
Zone ("HUBZone"). Mobilisa specializes in custom software development for mobile
and wireless devices and Wireless Over Water (“WOW”) technology implementation
and is comprised of two business units—ID systems and wireless
technologies—designed to address the following issues:
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Access
Control: Mobilisa’s Defense ID®
system is designed to increase security at access points manned by
law
enforcement and military personnel.
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Marine
Environment Communications: Mobilisa’s WOW technology allows for instant
communication between multiple points, both on land and at sea, across
wide, over-water expanses and optimizes performance by taking into
account
sea state and Fresnel zones (Fresnel zones result from obstructions
in the
path of radio waves and impact the signal strength of radio
transmissions). Mobilisa is currently developing Floating Area Network
(“FAN”) and Littoral Sensor Grid technology as the next evolutionary step
in marine communications.
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Network
Design: Mobilisa’s AIRchitect™ tool designs optimum wireless networks
based on user parameters and location
architecture.
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Mobilisa
also derives its revenue from selling handheld communication devices with
patent-pending software that allows users to send various forms of
identification and compare them to information on databases. A key component
of
Mobilisa’s business strategy is its commitment to cutting-edge research and
development in both ID systems and advanced applications of wireless
technologies.
RISK
FACTORS
Investment
in our shares involves a degree of risk. You should consider the following
discussion of risks as well as other information in this prospectus and the
incorporated documents before purchasing any shares. Each of these risk factors
could adversely affect our business, operating results, prospects and financial
condition, as well as adversely affect the value of an investment in our common
stock.
Risks
Related to Our Business and Industry
We
have incurred losses since inception and losses may continue, which could result
in a decline in the value of our securities and a loss of your
investment.
We
sustained net losses of $2,673,218 and $2,879,970 for the fiscal years ended
December 31, 2007 and December 31, 2006, respectively and our accumulated
deficit was $44,661,070 as of December 31, 2007. Since we expect to incur
additional expenditures in line with the sales growth of our business, we cannot
assure you that we will achieve operating profits in the near
future.
We
may be unable to meet our future capital requirements.
Our
capital requirements have been and will continue to be significant. In the
event
that we do not generate meaningful revenue, we would need to raise additional
capital. If we are unable to raise additional capital, we plan to implement
cost
saving measures to sustain business activities on a reduced level. Acquisition
and development opportunities and other contingencies may arise, which could
require us to raise additional capital. If we raise additional capital through
the sale of equity, including preferred stock, or convertible debt securities,
the percentage ownership of our then existing stockholders will be
diluted.
We
currently do not have a credit facility or any commitments for additional
financing. We cannot be certain that additional financing, should it be needed,
will be available when and to the extent required. If adequate funds are not
available on acceptable terms, we may be unable to fund our expansion, develop
or enhance our products, or respond to competitive pressures. Such limitation
could have a material adverse effect on our business, financial condition and
results of operations.
We
may not be able to keep up with rapid technological
change.
Our
market is characterized by frequent new product announcements and rapid
advancements in hardware technology. Significant technological change could
render our existing technology obsolete. If we are unable to successfully
respond to these developments, or do not respond in a cost-effective way, our
business, financial condition and results of operations will be materially
adversely affected.
Our
proprietary software relies on reference data provided by government and
quasi-government agencies. If these governmental and quasi-government agencies
were to stop sharing data with us, the utility of our proprietary software
would
be diminished in those jurisdictions and our business would be
damaged.
Currently,
the fifty states, ten Canadian provinces and the District of Columbia, which
in
most instances conform to the guidelines established by certain organizations
responsible for implementing industry standards, cooperate with us by providing
sample identification cards so that we may modify all of our hardware and
software products to read and analyze the encoded information found on such
jurisdiction’s identification cards. We cannot assure you that each of these
jurisdictions will continue to cooperate with us. In the event that one or
more
of these jurisdictions do not continue to provide this reference data, the
utility of our proprietary software may be diminished in those
jurisdictions.
Future
government regulation restricting the capture of information electronically
stored on identification cards could adversely affect our
business.
Our
proprietary software products are designed to read, verify and capture
information from identification cards. Currently, those customers located in
Nebraska, New Hampshire, North Carolina and Texas have some restrictions on
what
can be done with this information without customer consent. Because issues
of
personal privacy continue to be a major topic of public policy debate, it is
possible that in the future additional customers in these and other
jurisdictions may be restricted from capturing this information. Therefore,
the
implementation of unfavorable regulations or unfavorable interpretations of
existing regulations by courts or regulatory bodies could require us to incur
significant compliance costs, cause the development of the affected markets
to
become impractical and reduce our revenues and potential revenues.
Our
business strategy exposes us to long sales and implementation cycles for our
products.
Our
target customers in the commercial fraud protection, access control and age
verification markets include large retailers and government agencies, which
typically require longer sales and implementation cycles for our products than
do our potential customer base solely interested in age verification, such
as
restaurant, bar and convenience store operators. The longer sales and
implementation cycles for larger retail companies continue to have an adverse
impact on the timing of realizing our revenues. In addition, budgetary
constraints and potential economic slowdowns may also continue to delay
purchasing decisions by these prospective customers. These initiatives have
costs associated with them, and we cannot assure you that they ultimately will
prove successful or result in, an increase to, our revenues or
profitability.
In
addition, the loss or significant reduction in government spending by government
entities could materially limit our ability to obtain government contracts.
These limitations, if significant, could also have a material adverse effect
on
our business, financial condition and results of operations. In addition, we
will need to develop additional strategic relationships with large government
contractors in order to successfully compete for government contracts. Should
we
lose or fail to develop these strategic relationships we may not be able to
implement our business strategy.
The
market for our systems and software is evolving and its growth is
uncertain.
Demand
and market acceptance for recently introduced and existing systems and software
and sales from such systems and software, are subject to a high level of
uncertainty and risk. Our business may suffer if the market develops more slowly
than anticipated and does not sustain market acceptance.
Failure
to manage our operations if they expand could impair our future
growth.
If
we are
able to expand our operations, particularly through multiple sales to large
retailers and government agencies in the document verification market, the
expansion will place significant strain on our management, financial controls,
operating systems, personnel and other resources. Our ability to manage future
growth, should it occur, will depend to a large extent upon several factors,
including our ability to do the following:
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build
and train our sales force;
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establish
and maintain relationships with
distributors;
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develop
customer support systems;
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develop
expanded internal management and financial controls adequate to keep
pace
with growth in personnel and sales, if they occur;
and
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manage
the use of third-party manufacturers and
suppliers.
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If
we are
able to grow our business but do not manage our growth successfully, we may
experience increased operating expenses, loss of customers, distributors or
suppliers and declining or slowed growth of revenues.
We
are subject to risks associated with product failure and technological
flaws.
Products
as complex as those offered by us may contain undetected errors or result in
failures when first introduced or when new versions are released. Despite
vigorous product testing efforts and testing by current and potential customers,
it is possible that errors will be found in a new product or enhancement after
commencement of commercial shipments. The occurrence of product defects or
errors could result in adverse publicity, delay in product introduction,
diversion of resources to remedy defects, loss of, or a delay in market
acceptance, claims by customers against us, or could cause us to incur
additional costs, any of which could adversely affect our business.
Our
failure to protect our proprietary technology may impair our competitive
position.
We
continue to allocate significant resources to develop new and innovative
technologies which we utilize in our products and systems. We consider such
allocation to be fundamental to our continued success as such success depends,
to a significant degree, upon our ability to provide products and systems that
provide superior functionality and performance compared to those of our
competitors. Accordingly, we must protect our technology from unauthorized
use.
This is done by processes aimed at identifying and seeking appropriate
protection for newly developed intellectual property, i.e., patents, trade
secrets, copyrights and trademarks, as well as policies aimed at identifying
unauthorized use of such property in the marketplace. These processes
include:
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contractual
arrangements providing for non-disclosure of proprietary
information;
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maintaining
and enforcing issued patents and filing patent applications on innovative
solutions to commercially important
problems;
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protecting
our trade secrets;
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protecting
our copyrights and trademarks by registration and other appropriate
means,
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establishing
internal processes for identifying and appropriately protecting new
and
innovative technologies; and
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establishing
practices for identifying unauthorized use of our intellectual
property.
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While
we
actively protect our intellectual property, it does not follow that others
will
not intentionally or innocently use such intellectual property. Accordingly,
at
times we may be required to bring legal proceedings to preclude such
unauthorized use. We are mindful that such measures can be costly and time
consuming and undertake such measures only as a last resort.
These
policies and practices with respect to our intellectual property rights do
not
prevent our competitors from independently developing products similar or
superior to our products and technologies. It merely protects our property
rights created as a result of our allocating significant portions of our
technical and monetary resources.
If
our future products incorporate technologies that infringe the proprietary
rights of third parties, and we do not secure licenses from them, we could
be
liable for substantial damages.
We
are
not aware that our current products infringe the intellectual property rights
of
any third parties. We also are not aware of any third party intellectual
property rights that may hamper our ability to provide future products and
services. However, we recognize that the development of our services or products
may require that we acquire intellectual property licenses from third parties
so
as to avoid infringement of those parties’ intellectual property rights. These
licenses may not be available at all or may only be available on terms that
are
not commercially reasonable. If third parties make infringement claims against
us which, whether or not they are upheld, such claims could:
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consume
substantial time and financial
resources;
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divert
the attention of management from growing our business and managing
operations; and
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disrupt
product sales and shipments.
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If
any
third party prevails in an action against us for infringement of its proprietary
rights, we could be required to pay damages and either enter into costly
licensing arrangements or redesign our products so as to exclude any infringing
use. As a result, we would incur substantial costs, delays in product
development, sales and shipments, our revenues may decline substantially and
we
may not be able to achieve the minimum, necessary growth for our continued
success.
Failure
to attract and retain management and other personnel may damage our operations
and financial results and cause our stock price to
decline.
We
depend
to a significant degree on the skills, experience and efforts of our executive
officers and other key management, technical, finance, sales and other
personnel. Our failure to attract, integrate, motivate and retain existing
or
additional personnel could disrupt or otherwise harm our operations and
financial results. We do not carry key man life insurance policies covering
any
employees. The loss of services of certain of our key employees, an inability
to
attract or retain qualified personnel in the future, or delays in hiring
additional personnel could delay the development of our business and could
cause
our stock price to decline.
Our
share
price may be volatile and could decline substantially.
The
market price of our common stock, like the price of shares of technology
companies generally, has been and may continue to be volatile. From January
1,
2002 to May 30, 2008, the closing bid price of our common stock has varied
from
a high of $19.45 to a low of $2.10 per share, as reported on the American Stock
Exchange. Many factors may cause the market price for our common stock to
decline, including:
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shortfalls
in revenues, cash flows or continued losses from
operations;
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delays
in development or roll-out of any of our
products;
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announcements
by one or more competitors of new product acquisitions or technological
innovations; and
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unfavorable
outcomes from outstanding
litigation.
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In
addition, the stock market experiences extreme fluctuations in price and volume
that particularly affect the market price of shares of emerging technology
companies, such as ours. These price and volume fluctuations are often unrelated
or disproportionate to the operating performance of the affected companies.
Because of this volatility, we may fail to meet the expectations of our
shareholders or of securities analysts and our stock price could decline as
a
result. Declines in our stock price for any reason, as well as broad-based
market fluctuations or fluctuations related to our financial results or other
developments, may adversely affect your ability to sell your shares at a price
equal to or above the price at which you purchased them. Decreases in the price
of our common stock may also lead to de-listing of our common
stock.
We
incur significant accounting and other control costs that impact our financial
condition
As
a
publicly traded corporation, we incur certain costs to comply with regulatory
requirements. If regulatory requirements were to become more stringent or if
controls thought to be effective later fail, we may be forced to make additional
expenditures, the amounts of which could be material. Some of our competitors
are privately owned so their accounting and control costs can be a competitive
disadvantage for us. Should our sales decline or if we are unsuccessful at
increasing prices to cover higher expenditures for internal controls and audits,
our costs associated with regulatory compliance will rise as a percentage of
sales.
Risks
related to Mobilisa’s Business
Currently,
Mobilisa derives a significant portion of its revenue from government
R&D (Research and Development) contracts, which are often non-standard,
involve competitive bidding, may be subject to cancellation and may produce
volatility in earnings and revenue.
In
the
years ended December 31, 2007 and 2006, Mobilisa derived 40.2% and 48.3% of
its
revenue respectively from government R&D contracts. These government
contracts often include provisions that substantially differ from those found
in
typical private commercial transactions. For instance, government contracts
may:
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include
provisions that allow the agency, in certain circumstances, to terminate
the contract without penalty;
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be
subject to purchasing decisions by agencies that are subject to political
influence;
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include
bonding requirements;
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contain
comprehensive procurement provisions that require Mobilisa to expend
substantial resources in pursuing the
contract
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specify
performance criteria that Mobilisa must satisfy before the customer
accepts the products and services;
and
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be
subject to cancellation or reduction if funding is reduced or becomes
unavailable
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Securing
government contracts typically involves a lengthy competitive bidding process.
Often, unsuccessful bidders have the ability to challenge contract awards.
Such
challenges may increase costs, result in delays and risk the loss of the
contract by the winning bidder. Protests or other delays related to material
government contracts that may be awarded to Mobilisa could result in revenue
volatility. State and local government agency contracts may depend on the
availability of matching funds from federal, state or local entities. State
and
local government agencies are subject to political, budgetary, purchasing and
delivery constraints that may result in irregular revenue and operating results.
Revenue volatility makes management of Mobilisa’s business difficult. Outright
loss of any material government contract through the protest process or
otherwise, could significantly reduce Mobilisa’s revenues.
Mobilisa
has been granted contracts based on its status as a small business in a HUBZone
and, in the future, Mobilisa may not continue to meet the qualifications for
such status.
At
times,
Mobilisa has been granted government contracts in part due to its status as
a
small business in a HUBZone. There is a possibility that, due to future growth,
Mobilisa will no longer meet the Small Business Administration’s definition of a
“small business”, that Port Townsend, WA will no longer be designated a HUBZone,
or that Mobilisa will relocate all or a portion of its operations outside of
a
HUBZone. If any of these things were to happen, Mobilisa may be at a
disadvantage when competing for future government contracts, which may in turn
reduce Mobilisa’s revenue.
Mobilisa’s
business strategy exposes it to long sales and implementation cycles for its
products.
Historically,
Mobilisa’s primary target customers have been government agencies and branches
of the United States military, both of which require long sales and
implementation cycles for products, which may result in a long period of time
prior to revenue realization. The loss or significant reduction in government
spending could limit Mobilisa’s ability to obtain government contracts. These
limitations, if significant, could significantly reduce Mobilisa’s revenues.
Mobilisa will need to develop additional strategic relationships with large
government contractors in order to successfully compete for government
contracts. Should Mobilisa lose or fail to develop these strategic
relationships, it may not be able to implement its business
strategy.
Mobilisa
cannot be certain that its backlog estimates will result in actual revenues
in
any particular fiscal period because its clients may modify or terminate
projects or may decide not to exercise contract options.
Mobilisa’s
backlog represents sales value of firm orders for products and services not
yet
delivered and, for long-term, executed contractual arrangements (contracts,
subcontract and customer commitments), the estimated future sales value of
product shipments, transactions processed and services to be provided over
the
term of the contractual arrangements, including anticipated renewal options.
For
contracts with indefinite quantities, Mobilisa’s backlog is estimated based on
current activity levels. Its backlog includes estimates of revenues, the receipt
of which require future government appropriations, depend on option exercise
by
clients or are subject to contract modification or termination. At March 31,
2008, Mobilisa’s backlog approximated $10.6 million, $3.0 million of which is
estimated to be realized in the next twelve months. These estimates are based
on
Mobilisa’s experience under such contracts and similar contracts, and it
believes that such estimates are reasonable. If Mobilisa does not realize a
substantial amount of its backlog, its operations could be harmed and future
revenues could be significantly reduced.
The
market for Mobilisa’s products is evolving and its growth is
uncertain.
Demand
and market acceptance for recently introduced and existing products and sales
from such products are subject to a high level of uncertainty and risk.
Mobilisa’s business may suffer if the market for those products develops more
slowly than anticipated or if products do not obtain market
acceptance.
Failure
to manage Mobilisa’s operations if they expand could impair future
growth.
If
Mobilisa is able to expand its operations, particularly through multiple sales
to government agencies, the expansion will place significant strain on its
existing management, financial controls, operating systems, personnel and other
resources. Mobilisa’s ability to manage future growth, should it occur, will
depend to a large extent upon several factors, including its ability to do
the
following:
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build
and train its sales force;
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· |
establish
and maintain relationships with
distributors;
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· |
develop
customer support systems;
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develop
expanded internal management and financial controls adequate to keep
pace
with growth in personnel and sales, if they occur;
and
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manage
the use of third-party manufacturers and
suppliers.
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If
Mobilisa is able to grow its business, but does not manage growth successfully,
it may experience increased operating expenses, loss of customers, distributors
or suppliers and declining or slowed growth of revenues.
Long
lead times for the components used in certain products creates uncertainty
in
Mobilisa’s supply chain and may result in Mobilisa taking a write-down for
obsolete inventory or prevent it from making required deliveries to its
customers on time.
Mobilisa
relies exclusively on commercial off-the-shelf technology in manufacturing
its
products. The lead-time for ordering certain components used in its products
and
for the production of products can be lengthy. As a result, Mobilisa must,
from
time to time, order products based on forecasted demand. If demand for products
lags significantly behind forecasts, Mobilisa may purchase more product than
it
can sell, which may result in write-downs of obsolete or excess inventory.
Conversely, if demand exceeds forecasts, Mobilisa may not have enough product
to
meet its obligations to its customers.
Mobilisa
relies on commercial off-the-shelf technology to provide hardware
products.
Although
Mobilisa believes that it can find alternative sources for hardware, any
disruption in Mobilisa’s ability to obtain required hardware could result in
delaying deliveries or in the loss of sales. Loss of suppliers may result in
delays or additional expenses, and Mobilisa may not be able to meet its
obligations to its customers.
Mobilisa
obtains certain hardware and services, as well as some software applications,
from a limited group of suppliers, and its reliance on these suppliers involves
significant risks, including reduced control over quality and delivery
schedules.
Any
financial instability of Mobilisa’s suppliers could result in having to find new
suppliers. Mobilisa may experience significant delays in manufacturing and
deliveries of products and services to customers if it loses its sources or
if
supplies and services delivered from these sources are delayed. As a result,
Mobilisa may be required to incur additional development, manufacturing and
other costs to establish alternative supply sources. It may take several months
to locate alternative suppliers, if required. Mobilisa cannot predict whether
it
will be able to obtain replacement hardware within the required time frames
at
affordable costs, or at all. Any delays resulting from suppliers failing to
deliver hardware or delays in obtaining alternative hardware, in sufficient
quantities and of sufficient quality, or any significant increase in the cost
of
hardware from existing or alternative suppliers could result in delays on the
shipment of product which, in turn, could result in the loss of customers it
may
not be able to successfully complete.
Mobilisa’s
Defense ID®
system relies on access to databases run by various government agencies. If
these governmental agencies were to stop sharing data with Mobilisa, the utility
of the Defense ID ® system would be diminished and business would be
damaged.
Currently,
Mobilisa’s Defense ID®
system
accesses over 140 separate databases run by various government and law
enforcement agencies. Mobilisa cannot be assured that each of these agencies
will continue to cooperate with it. In the event that one or more of these
agencies does not continue to provide access to these databases, the utility
of
the Defense ID®
system
may be diminished.
Mobilisa’s
Defense ID®
system manages private personal information and information related to sensitive
government functions, and a breach of the security systems protecting such
information may result in a loss of suppliers or customers or result in
litigation.
The
protective security measures designed to protect sensitive information and
contained in Mobilisa’s products may not prevent all security breaches. Failure
to prevent security breaches may disrupt Mobilisa’s business, damage its
reputation and expose it to litigation and liability. A party who is able to
circumvent protective security measures used in these systems could
misappropriate sensitive information or cause interruptions or otherwise damage
Mobilisa’s products, services and reputation and the property and privacy of
customers. If unintended parties obtain sensitive data and information, or
create bugs or viruses or otherwise sabotage the functionality of Mobilisa’s
products, Mobilisa may receive negative publicity, incur liability to its
customers or lose the confidence of its customers, any of which may cause the
termination or modification of contracts. Further, Mobilisa’s existing insurance
coverage may be insufficient to cover losses and liabilities that may result
from such events.
In
addition, Mobilisa may be required to expend significant capital and other
resources to protect against the threat of security breaches or to alleviate
problems caused by the occurrence of any such breaches. However, protective
or
remedial measures may not be available at a reasonable price or at all, or
may
not be entirely effective if commenced.
Future
government regulation restricting the capture of information electronically
stored on identification cards could adversely affect Mobilisa’s
business.
The
Defense ID®
system
is designed to read, verify and capture information from identification cards.
Currently, some jurisdictions have restrictions on what can be done with this
information without consent. Because issues of personal privacy continue to
be a
major topic of public policy debate, it is possible that, in the future, these
or other jurisdictions may introduce similar or additional restrictions on
capturing this information. Therefore, the implementation of unfavorable
regulations or unfavorable interpretations of existing regulations by courts
or
regulatory bodies could require Mobilisa to incur significant compliance costs,
cause the development of the affected markets to become impractical and reduce
revenues and potential revenues.
Future
government regulation restricting the capture of information electronically
stored on identification cards could adversely affect Mobilisa’s
business.
The
Defense ID® system is designed to read, verify and capture information from
identification cards. Currently, some jurisdictions have restrictions on what
can be done with this information without consent. Because issues of personal
privacy continue to be a major topic of public policy debate, it is possible
that, in the future, these or other jurisdictions may introduce similar or
additional restrictions on capturing this information. Therefore, the
implementation of unfavorable regulations or unfavorable interpretations of
existing regulations by courts or regulatory bodies could require Mobilisa
to
incur significant compliance costs, cause the development of the affected
markets to become impractical and reduce revenues and potential
revenues.
Mobilisa
is subject to risks associated with product failure and technological
flaws.
Products
as complex as those offered by Mobilisa may contain undetected errors or result
in failures when first introduced or when new versions are released. Despite
vigorous product testing efforts and testing by current and potential customers,
it is possible that errors will be found in a new product or enhancement after
commercial shipments have commenced. The occurrence of product defects or errors
could result in negative publicity, delays in product introduction, and the
diversion of resources to remedy defects and loss of or delay in market
acceptance or claims by customers against Mobilisa and could cause Mobilisa
to
incur additional costs, any one of which could adversely affect business.
Because of the risk of undetected error, Mobilisa may be compelled to accept
liability provisions that vary from its preferred contracting model in certain
critical transactions. There is a risk that in certain contracts and
circumstances Mobilisa may not be successful in adequately minimizing product
and related liabilities or that the protections negotiated will not ultimately
be deemed enforceable.
Mobilisa
carries product liability insurance, but existing coverage may not be adequate
to cover potential claims. The failure of Mobilisa products to perform as
promised could result in increased costs, lower margins, liquidated damage
payment obligations and harm to Mobilisa’s reputation.
Mobilisa
may not be able to keep up with rapid technological
change.
The
markets for all of Mobilisa’s products are characterized by rapid technological
advancements. Significant technological change could render existing technology
obsolete. If Mobilisa is unable to successfully respond to these developments,
or does not respond in a cost-effective manner, its business, financial
condition and results of operations will be materially adversely
affected.
Failure
to protect its proprietary technology may impair Mobilisa’s competitive
position.
Mobilisa
continues to allocate significant resources to developing new and innovative
technologies that are utilized in its products and systems. Because its
continued success depends on, to a significant degree, Mobilisa’s ability to
offer products providing superior functionality and performance over those
offered by its competitors, Mobilisa considers the protection of its technology
from unauthorized use to be fundamental to its success. This is done by
processes aimed at identifying and seeking appropriate protection for
newly-developed intellectual property, including patents, trade secrets,
copyrights and trademarks, as well as policies aimed at identifying unauthorized
use of such property in the marketplace. These processes include:
|
|
· |
contractual
arrangements providing for nondisclosure of proprietary
information;
|
|
|
· |
maintaining
and enforcing issued patents and filing patent applications on innovative
solutions to commercially important
problems;
|
|
|
· |
protecting
trade secrets;
|
|
|
· |
protecting
copyrights and trademarks by registration and other appropriate
means
|
|
|
· |
establishing
internal processes for identifying and appropriately protecting new
and
innovative technologies; and
|
|
|
· |
establishing
practices for identifying unauthorized use of intellectual
property.
|
Mobilisa
may have to litigate to enforce patents or trademarks or to determine the scope
and validity of other parties’ proprietary rights. Litigation could be very
costly and divert management’s attention. An adverse outcome in any litigation
may have a severe negative effect on Mobilisa’s financial results. To determine
the priority of inventions, Mobilisa may have to participate in interference
proceedings declared by the U.S. Patent and Trademark Office or oppositions
in
foreign patent and trademark offices, which could result in substantial cost
and
limitations on the scope or validity of Mobilisa’s patents or
trademarks.
In
addition, foreign laws treat the protection of proprietary rights differently
from laws in the United States and may not protect proprietary rights to the
same extent as U.S. laws. The failure of foreign laws or judicial systems to
adequately protect Mobilisa’s proprietary rights or intellectual property,
including intellectual property developed on Mobilisa’s behalf by foreign
contractors or subcontractors may have a material adverse effect on Mobilisa’s
business, operations and financial results.
Legal
claims regarding infringement of third-party intellectual property rights by
Mobilisa or its suppliers could result in substantial costs, diversion of
managerial resources and harm to Mobilisa’s reputation.
To
Mobilisa’s knowledge, its current products do not infringe on the intellectual
property rights of any third parties and there are no claims regarding
infringement of third-party intellectual property rights against either it
or
its supplier. If any third party were to bring such an infringement claim
against either Mobilisa or its suppliers, it may result in substantial costs
to
Mobilisa, diversion of Mobilisa’s resources and harm to Mobilisa’s
business.
If
Mobilisa’s future products incorporate technologies that infringe the
proprietary rights of third parties and it does not secure licenses from them,
Mobilisa could be liable for substantial damages.
To
Mobilisa’s knowledge, its current products do not infringe the intellectual
property rights of any third parties, and it is not aware of any third-party
intellectual property rights that may hamper Mobilisa’s ability to provide
future products and services. However, Mobilisa recognizes that the development
of services or products may require it to acquire intellectual property licenses
from third parties so as to avoid infringement of those parties’ intellectual
property rights. These licenses may not be available at all or may only be
available on terms that are not commercially reasonable. If third parties make
infringement claims against Mobilisa, whether or not they are upheld, such
claims could:
|
|
· |
consume
substantial time and financial
resources;
|
|
|
· |
divert
the attention of management from growing Mobilisa’s business and managing
operations; and
|
|
|
· |
disrupt
product sales and shipments.
|
If
any
third party prevails in an action against Mobilisa for infringement of its
proprietary rights, it could be required to pay damages and either enter into
costly licensing arrangements or redesign its products so as to exclude any
infringing use. As a result, Mobilisa would incur substantial costs; suffer
delays in product development, sales and shipments; revenues may decline
substantially; and Mobilisa may not be able to achieve the minimum, necessary
growth for continued success.
Failure
to attract and retain management and other personnel may damage operations
and
financial results and cause revenue to decline.
Mobilisa
depends, to a significant degree, on the skills, experience and efforts of
executive officers and other key management and of technical, finance, sales
and
other personnel. A failure to attract, integrate, motivate and retain existing
or additional personnel could disrupt or otherwise harm Mobilisa’s operations
and financial results. Mobilisa does not carry key employee life insurance
policies covering any employees. The loss of services of certain of key
employees, an inability to attract or retain qualified personnel in the future,
or delays in hiring additional personnel could delay the development of
Mobilisa’s business and could cause revenues to decline.
Mobilisa
is currently developing several new systems, including Floating Area Networks
(“FANs”) and Littoral Sensor Grids that rely on government funding for continued
research and development, and the failure to meet project milestones and
development targets could impact that funding.
Mobilisa
anticipates that projects currently in research and development, including
FANs
and Littoral Sensor Grids, will play a critical role in its future growth.
Because these projects are in development and being funded by various government
agencies, Mobilisa has certain ongoing milestones and development targets that
it must meet. If these milestones or development targets are not met, Mobilisa
could lose its research and development funding for these projects. In addition,
even if milestones and development targets are met, there is no guarantee that
the funding agencies will continue to grant the same level of, or any, research
and development funds. Failure to attract research and development funding
adequate to fully fund these projects could result in the termination of those
projects, which could have a significant impact on Mobilisa’s
revenue.
Mobilisa
cannot guarantee that projects currently in research and development stage,
including FANs and Littoral Sensor Grids, will result in operational systems
or
prototypes or that such systems or prototypes, if produced, will be commercially
marketable.
Projects
in the research and development stage have not yet been proven operational.
While Mobilisa anticipates that it will be able to produce operational systems
or prototypes based on its research and development, there is no guarantee
that
it will be able to do so. Furthermore, even if Mobilisa’s is able to produce
operational systems or prototypes, there is no guarantee that those systems
or
prototypes will prove commercially marketable.
Risks
of the Combined Company Post-Closing
Because
Intelli-Check does not intend to pay dividends on its Common Stock, stockholders
will benefit from an investment in Intelli-Check’s Common Stock only if it
appreciates in value.
Intelli-Check
has never declared or paid any cash dividends on its shares of Common Stock.
Post acquisition, Intelli-Check currently intends to retain all future earnings,
if any, for use in the operations and expansion of the business. As a result,
Intelli-Check does not anticipate paying cash dividends in the foreseeable
future. Any future determination as to the declaration and payment of cash
dividends will be at the discretion of Intelli-Check’s Board of Directors and
will depend on factors Intelli-Check’s Board of Directors deems relevant,
including among others, Intelli-Check’s results of operations, financial
condition and cash requirements, business prospects, and the terms of
Intelli-Check’s credit facilities and other financing arrangements. Accordingly,
realization of a gain on stockholders’ investments will depend on the
appreciation of the price of Intelli-Check’s Common Stock. There is no guarantee
that Intelli-Check’s Common Stock will appreciate in value.
If
Intelli-Check is not successful in integrating the two organizations,
Intelli-Check will not be able to operate efficiently after the
merger.
Achieving
the benefits of the merger will depend in part on the successful integration
of
Intelli-Check’s and Mobilisa’s operations, products and personnel in a timely
and efficient manner. The integration process requires coordination of different
sales forces, administrative staff and development and engineering teams, and
involves the integration of systems, applications, policies, procedures,
business processes and channel operations. This, too, will be difficult,
unpredictable, and subject to delay because of possible cultural conflicts
and
different opinions on technical decisions and product roadmaps. If Intelli-Check
cannot successfully integrate the operations and personnel of the two companies,
Intelli-Check will not realize the expected benefits of the merger.
Integrating
the companies may divert management’s attention away from
operations.
Successful
integration of Intelli-Check’s and Mobilisa’s operations, products and personnel
may place a significant burden on the management and the internal resources
of
both Intelli-Check and Mobilisa. The diversion of management attention and
any
difficulties encountered in the transition and integration process could harm
the business, financial condition and operating results of each of the
companies, and the combined company after completion of the
merger.
Intelli-Check
expects to incur significant costs integrating the companies into a single
business, and if such integration is not successful, Intelli-Check may not
realize the expected benefits of the merger.
Intelli-Check
expects to incur significant costs integrating Intelli-Check’s and Mobilisa’s
operations, products and personnel. These costs may include costs
for:
·
employee
severance;
·
conversion
of information systems;
·
combining
research and development teams and processes;
·
relocation
or disposition of excess equipment.
In
addition, Intelli-Check expects to incur significant transaction costs in
connection with the merger. Intelli-Check does not know whether it will be
successful in these integration efforts or in consummating the merger and cannot
assure its investors that it will realize the expected benefits of the
merger.
If
Intelli-Check fails to retain key employees, the benefits of the merger could
be
diminished.
The
successful combination of Intelli-Check and Mobilisa will depend in part on
the
retention of key personnel. There can be no assurance that Intelli-Check will
be
able to retain it’s or Mobilisa’s key management, technical, sales and customer
support personnel. If Intelli-Check fails to retain such key employees, it
may
not realize the anticipated benefits of the merger.
If
Intelli-Check does not integrate Mobilisa’s products, Intelli-Check may lose
customers and fail to achieve its financial objectives.
Achieving
the benefits of the merger will depend in part on the integration of
Intelli-Check’s and Mobilisa’s products in a timely and efficient manner. In
order for Intelli-Check to provide enhanced and more valuable products to its
customers after the merger, Intelli-Check will need to integrate its product
lines and development organizations with those of Mobilisa. This will be
difficult, unpredictable, and subject to delay because Intelli-Check’s and
Mobilisa’s products are highly complex, have been developed independently and
were designed without regard to such integration. If Intelli-Check cannot
successfully integrate Mobilisa’s products and continue to provide customers
with products and new product features in the future on a timely basis,
Intelli-Check may lose customers and its business and results of operations
may
be harmed.
Sales
could decline if customer or supplier relationships are disrupted by the
merger.
The
customers of Intelli-Check and Mobilisa may not continue their current buying
patterns following, the merger. Any significant delay or reduction in orders
for
Intelli-Check’s or Mobilisa’s products could harm the combined company’s
business, financial condition and results of operations. Customers may defer
purchasing decisions as they evaluate the likelihood of successful integration
of Intelli-Check’s and Mobilisa’s products and the combined company’s future
product strategy, or consider purchasing products of competitors. Customers
may
also seek to modify or terminate existing agreements, or prospective customers
may delay entering into new agreements or purchasing products. In addition,
by
increasing the breadth of Intelli-Check’s and Mobilisa’s business, the merger
may make it more difficult for the combined company to enter into or maintain
relationships, including customer relationships, with suppliers or strategic
partners, some of whom may view the combined company as a more direct competitor
than either Intelli-Check or Mobilisa as an independent
company.
The
trading price of the combined company’s stock may be affected by factors
different from those currently affecting the prices of Intelli-Check and
Mobilisa Common Stock.
Upon
completion of the merger, holders of Mobilisa’s Common Stock became holders of
the Common Stock of Intelli-Check. The results of operations of the combined
company, as well as the trading price of Intelli-Check’s Common Stock after the
merger, may be affected by factors different from those currently affecting
the
results of operations and the trading price of the Common Stock of
Intelli-Check.
DISCLOSURE
REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus, including the documents that we incorporate by reference, contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the “Securities Act”), and Section 21E
of the Exchange Act. Any statements about our expectations, beliefs, plans,
objectives, assumptions or future events or performance are not historical
facts
and may be forward-looking. These statements are often, but not always, made
through the use of words or phrases such as “anticipate,” “estimate,” “plans,”
“projects,” “continuing,” “ongoing,” “expects,” “management believes,” “we
believe,” “we intend” and similar words or phrases. Accordingly, these
statements involve estimates, assumptions and uncertainties that could cause
actual results to differ materially from those expressed in them. Any
forward-looking statements are qualified in their entirety by reference to
the
factors discussed throughout this prospectus.
Because
the risk factors referred to above, could cause actual results or outcomes
to
differ materially from those expressed in any forward-looking statements made
by
us or on our behalf, you should not place undue reliance on any forward-looking
statements. Further, any forward-looking statement speaks only as of the date
on
which it is made, and we undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which the
statement is made or to reflect the occurrence of unanticipated events. New
factors emerge from time to time, and it is not possible for us to predict
which
factors will arise. In addition, we cannot assess the impact of each factor
on
our business or the extent to which any factor, or combination of factors,
may
cause actual results to differ materially from those contained in any
forward-looking statements.
USE
OF PROCEEDS
We
will
not receive any of the proceeds from the resale of the shares of our common
stock by the selling security holders. All proceeds from the resale of these
shares will be solely for the accounts of the selling security holders. We
will,
however, receive $21,580 if all of the warrants are exercised, all of which
would be used for general working capital purposes.
SELLING
SECURITY HOLDERS
We
are
registering for resale shares of our common stock held by the selling security
holders identified below. We sometimes refer to these shares collectively as
the
“resale shares.” We are registering the resale shares to permit the security
holders and their pledgees, donees, transferees and other successors-in-interest
that receive their shares from a stockholder as a gift, partnership distribution
or other non-sale related transfer after the date of this prospectus to resell
the shares when and as they deem appropriate. The shares of our common stock
included in the resale shares were issued to the selling security holders in
exchange for shares of Mobilisa common stock, which was acquired by
Intelli-Check in March 2008. The warrants for which the underlying shares are
being registered below were issued in exchange for warrants to purchase shares
of Mobilisa common stock in the March 2008 transaction. Each of Nelson Ludlow
and Bonnie Ludlow, selling security holders listed below, entered into a lock-up
agreement with us pursuant to which they would not be able to sell any shares
pursuant to this prospectus until September 14, 2008 and that between September
14, 2008 and March 14, 2009 they would each be permitted to sell no more than
3%
of their respective holdings.
The
following table sets forth:
|
|
·
|
the
name of the security holders,
|
| |
|
|
| |
·
|
the
number and percent of shares of our common stock that the security
holders
beneficially owned prior to the offering for resale of the shares
under
this prospectus,
|
| |
|
|
| |
·
|
the
number of shares of our common stock that may be offered for resale
for
the account of the security holders under this prospectus,
and
|
| |
|
|
| |
·
|
the
number and percent of shares of our common stock to be beneficially
owned
by the security holders after the offering of the resale shares
(assuming
all of the offered resale shares are sold by the security
holders).
|
The
number of shares in the column “Number of Shares Being Offered” represents all
of the shares that each security holder may offer under this prospectus. We
do
not know how long the security holders will hold the shares before selling
them
or how many shares they will sell, and other than the lock-up agreements set
forth above, we currently have no agreements, arrangements or understandings
with any of the security holders regarding the sale of any of the resale shares.
The shares offered by this prospectus may be offered from time to time by the
security holders listed below.
This
table is prepared solely based on information supplied to us by the listed
security holders, any Schedules 13D or 13G and Forms 3 and 4, and other
public documents filed with the SEC, and assumes the sale of all of the resale
shares. The applicable percentages of beneficial ownership are based on an
aggregate of 24,658,841 shares of our common stock issued and outstanding on
May
30, 2008. Nelson Ludlow is our Chief Executive Officer and a director and Bonnie
Ludlow is an officer and one of our directors.
| |
|
Shares Beneficially
Owned Prior to Offering
|
|
Number of
Shares
Being
|
|
Shares Beneficially
Owned After Offering
|
|
|
Security Holders
|
|
Number
|
|
Percent
|
|
Offered
|
|
Number
|
|
Percent
|
|
|
Nelson
Ludlow
|
|
|
12,224,110
|
(1)
|
|
49.4
|
%
|
|
4,158,456
|
|
|
47,470
|
|
|
*
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonnie
Ludlow
|
|
|
12,224,110
|
(2)
|
|
49.4
|
%
|
|
7,996,364
|
|
|
21,820
|
|
|
*
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
Ludlow
|
|
|
109,100
|
|
|
*
|
|
|
109,100
|
|
|
-
|
|
|
*
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vaughan
Boerner
|
|
|
2,728
|
|
|
*
|
|
|
2,728
|
|
|
-
|
|
|
*
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jay
Radtke
|
|
|
6,819
|
|
|
*
|
|
|
6,819
|
|
|
-
|
|
|
*
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathleen
Shumate
|
|
|
8,183
|
|
|
*
|
|
|
8,183
|
|
|
-
|
|
|
*
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liana
Harvath
|
|
|
39,276
|
(3)
|
|
*
|
|
|
39,276
|
|
|
-
|
|
|
*
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William
& Kathy Roof
|
|
|
27,275
|
(3)
|
|
*
|
|
|
27,275
|
|
|
-
|
|
|
*
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
|
12,417,508
|
|
|
50.1
|
%
|
|
12,348,201
|
|
|
69,290
|
|
|
*
|
|
*
Indicates beneficial ownership of less than one percent of the total outstanding
common stock referenced above.
(1)
Includes 46,820 shares issuable upon exercise of stock options exercisable
within 60 days and 7,996,364 shares owned by Bonnie Ludlow, Nelson Ludlow’s
wife.
(2)
Includes 21,820 shares issuable upon exercise of stock options exercisable
within 60 days and 4,158,456 shares owned by Nelson Ludlow, Bonnie Ludlow’s
husband.
(3)
Consists of shares of common stock underlying warrants.
PLAN
OF DISTRIBUTION
The
selling security holders may sell the shares being offered from time to time
in
one or more transactions:
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·
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on
the American Stock Exchange or on another exchange;
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·
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in
the over-the-counter market;
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·
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in
negotiated transactions;
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·
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through
broker-dealers, who may act as agents or principals;
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·
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through
one or more underwriters on a firm commitment or best efforts
basis;
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·
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through
the writing of options on shares, whether the options are listed
on an
options exchange or otherwise; or
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·
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a
combination of such methods of
sale.
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The
selling security holders may sell the shares at market prices prevailing at
the
time of sale, at prices related to those market prices or at negotiated prices.
The selling security holders also may sell the shares pursuant to Rule 144
adopted under the Securities Act, as permitted by that rule. The selling
security holders may effect transactions by selling shares directly to
purchasers or to or through broker-dealers. The broker-dealers may act as agents
or principals. The broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the selling security holders or
the
purchasers of the shares. The compensation of any particular broker-dealer
may
be in excess of customary commissions. Because the selling security holders
and
broker-dealers that participate with the selling security holders in the
distribution of shares may be deemed to be “underwriters” within the meaning of
Section 2(11) of the Securities Act, the selling security holders will be
subject to the prospectus delivery requirements of the Securities Act. Any
commissions received by them and any profit on the resale of shares may be
deemed to be underwriting compensation.
The
selling security holders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities. There is no underwriter
or coordinating broker acting in connection with the proposed sale of shares
by
the selling security holders.
The
shares will be sold through registered or licensed brokers or dealers if
required under applicable state securities laws. In addition, in certain states
the shares may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
Under
applicable rules and regulations under the Exchange Act, any person engaged
in
the distribution of the shares may not simultaneously engage in market making
activities with respect to our common stock for a period of two business days
prior to the commencement of such distribution. In addition, each selling
shareholder will be subject to applicable provisions of the Exchange Act and
the
associated rules and regulations under the Exchange Act, including Regulation
M,
which provisions may limit the timing of purchases and sales of shares of our
common stock by the selling security holders. We will make copies of this
prospectus available to the selling security holders and have informed them
of
the need to deliver copies of this prospectus to purchasers at or prior to
the
time of any sale of the shares.
We
will
bear all costs, expenses and fees in connection with the registration of the
shares. The selling security holders will bear all commissions and discounts,
if
any, attributable to the sales of the shares. The selling security holders
may
agree to indemnify any broker-dealer or agent that participates in transactions
involving sales of the shares against certain liabilities, including liabilities
arising under the Securities Act. The selling security holders have agreed
to
indemnify certain persons, including broker-dealers and agents, against certain
liabilities in connection with the offering of the shares, including liabilities
arising under the Securities Act.
Upon
notification to us by a selling shareholder that any material arrangement has
been entered into with broker-dealers for the sale or purchase of shares, we
will file a supplement to this prospectus, if required, disclosing:
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·
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the
name of the participating broker-dealers;
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·
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the
number of shares involved;
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·
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the
price at which such shares were sold;
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·
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the
commissions paid or discounts or concessions allowed to such
broker-dealers, where applicable;
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·
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that
such broker-dealers did not conduct any investigation to verify
the
information set out or incorporated by reference in this prospectus;
and
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·
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other
facts material to the
transaction.
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In
addition, upon being notified by a selling shareholder that a donee or pledgee
intends to sell more than 500 shares, we will file a supplement to this
prospectus.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933
may
be permitted to directors, officers or persons controlling us, we have been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
We
incorporate by reference the filed documents listed below, except as superseded,
supplemented or modified by this prospectus, and any future filings we will
make
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 (the “Exchange Act”):
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·
|
our
Annual Report on Form 10-K for the fiscal year ended December 31,
2007 as
filed with the SEC on March 27, 2008;
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·
|
our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2008
as
filed with the SEC on May 15, 2008;
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|
|
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·
|
our
Current Report on Form 8-K dated May 14, 2008 as filed with the
SEC on May
14, 2008;
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|
|
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·
|
our
Current Report on Form 8-K dated March 14, 2008 as filed with the
SEC on
March 20, 2008;
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·
|
our
Current Report on Form 8-K dated February 21, 2008 as filed with
the SEC
on February 21, 2008;
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|
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·
|
our
Current Report on Form 8-K dated January 8, 2008 as filed with
the SEC on
January 8, 2008;
|
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|
|
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·
|
our
Definitive Proxy Statement on Schedule 14(a) as filed with the
SEC on
February 6, 2008;
|
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|
|
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·
|
our
Definitive Proxy Statement on Schedule 14(a), as amended, filed
with the
SEC on February 21, 2008; and
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|
|
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·
|
our
description of Common Stock contained in our Registration Statement
on
Form 8-A (001-15465) filed with the SEC under Section 12 of the
Exchange
Act on November 15, 1999, including any amendment or reports filed
for the
purpose of updating this
description.
|
All
documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 prior to the termination of the
offering shall be deemed to be incorporated by reference into the prospectus.
You may request and obtain a copy of these filings, at no cost, by writing
or
telephoning us at the following address or phone number:
Intelli-Check-Mobilisa,
Inc.
191
Otto
Street
Port
Townsend, WA 98368
(360)
344-3233
Attn:
Peter J. Mundy, Chief Financial Officer
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus is part of a registration statement we filed with the SEC. You should
rely only on the information contained in this prospectus or incorporated by
reference. We have not authorized anyone else to provide you with different
information. We are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front page
of
this prospectus, regardless of the time of delivery of this prospectus or any
sale of common stock.
We
file
annual, quarterly and current reports, proxy statements and other information
with the SEC. You may read, without charge, and copy the documents we file
with
the SEC at the SEC’s public reference room at 100 F Street, NE in Washington,
D.C. You can request copies of these documents by writing to the SEC and paying
a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. Our SEC filings are also available
to
the public at no cost from the SEC’s website at http://www.sec.gov.
LEGAL
MATTERS
The
validity of the issuance of the shares of common stock offered hereby will
be
passed upon for us by Loeb & Loeb LLP, 345 Park Avenue, New York, New York
10154.
EXPERTS
The
financial statements of Intelli-Check-Mobilisa, Inc. for the fiscal year ended
December 31, 2007, incorporated by reference in this prospectus and registration
statement have been audited by Amper, Politziner & Mattia, P.C., an
independent registered public accounting firm, as set forth in their report,
incorporated by reference, and are incorporated by reference in reliance upon
that report given on the authority of Amper, Politziner & Mattia, P.C., as
experts in accounting and auditing.
You
should rely only on the information contained in this prospectus. We have not
authorized anyone to provide you with information different from that contained
in this prospectus or any prospectus supplement. This prospectus is not an
offer
of these securities in any jurisdiction where an offer and sale is not
permitted. The information contained in this prospectus is accurate only as
of
the date of this prospectus, regardless of the time of delivery of this
prospectus or any sale of our common stock.
TABLE
OF CONTENTS
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Page
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|
Overview
of Business
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3
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Risk
Factors
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4
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|
Disclosure
Regarding Forward-Looking Statements
|
16
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|
Use
of Proceeds
|
17
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|
Selling
Security Holders
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17
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|
Plan
of Distribution
|
19
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|
Incorporation
of Certain Documents by Reference
|
20
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|
Where
You Can Find More Information
|
21
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|
Legal
Matters
|
21
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|
Experts
|
21
|
12,348,201
Shares
Common
Stock
INTELLI-CHECK-MOBILISA,
INC.
Prospectus
May
30, 2008
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14.
Other Expenses of Issuance and Distribution.
The
following table sets forth an estimate of the fees and expenses relating to
the
issuance and distribution of the securities being registered hereby, other
than
underwriting discounts and commissions, all of which shall be borne by
Intelli-Check-Mobilisa, Inc. (the “Registrant” or the “Company”). All of such
fees and expenses, except for the SEC Registration Fee, are
estimated:
|
SEC
registration fee
|
|
$
|
1,455
|
|
|
Legal
and accounting fees and expenses
|
|
|
10,000
|
|
|
Total
|
|
$
|
11,455
|
|
Item
15.
Indemnification of Officers and Directors
Intelli-Check-Mobilisa’s
Amended Certificate of Incorporation limits the liability of directors to the
maximum extent permitted by Section 145 of the Delaware General Corporation
Law.
Delaware law provides that the directors of a corporation will not be personally
liable to such corporation or its stockholders for monetary damages for breach
of their fiduciary duties as directors, except for liability (i) for any breach
of their duty of loyalty to the corporation or its stockholders; (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) for unlawful payments of dividends or unlawful
stock repurchases or redemptions as provided in Section 174 of the Delaware
General Corporation Law; or (iv) for any transaction from which the director
derives an improper personal benefit. Intelli-Check-Mobilisa’s By-laws provide
that the Company shall indemnify its directors and officers under certain
circumstances, including those circumstances in which indemnification would
otherwise be discretionary, and the Company is required to advance expenses
to
its officers and directors as incurred in connection with proceedings against
them for which they may be indemnified.
The
Company provides officers’ and directors’ liability insurance for its officers
and directors.
The
Company and the security holders have agreed to indemnify each other and each
other’s controlling persons, as applicable, against certain liabilities under
the Securities Act in connection with this registration statement.
Item
16. Exhibits
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Exhibit No.
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|
Description
|
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4.1
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Warrant
Issued to Liana Harvath, dated March 14, 2008.
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4.2
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|
Warrant
Issued to William & Kathy Roof, dated March 14,
2008.
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5.1
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Opinion
of Loeb & Loeb LLP as to the legality of the securities being
registered*.
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10.1
|
|
Director
Agreement between Intelli-Check - Mobilisa, Inc. and its Directors
dated,
March 14, 2008. ( 1)
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10.2
|
|
Stockholder
Agreement between Intelli-Check - Mobilisa, Inc. and Nelson Ludlow
and
Bonnie Ludlow dated March 14, 2008. (1)
|
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10.3
|
|
Lock-up
Agreement between Intelli-Check - Mobilisa, Inc. and Nelson Ludlow
dated
March 14, 2008*
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10.4
|
|
Lock-up
Agreement between Intelli-Check - Mobilisa, Inc. and Bonnie Ludlow
dated
March 14, 2008*
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23.1
|
|
Consent
of Loeb & Loeb LLP (included in Exhibit 5.1)*
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23.2
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|
Consent
of Amper, Politziner and Mattia, P.C.*
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24.1
|
|
Power
of Attorney (Included on the signature page to this registration
statement)
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*
|
|
Filed
herewith.
|
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(1)
|
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Incorporated
by reference to Registrant’s 8-K, filed on March 20,
2008.
|
Item
17. Undertakings.
The
undersigned Registrant hereby undertakes:
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(1)
|
To
file, during any period in which offers or sales are being made,
a
post-effective amendment to this registration
statement:
|
| |
(i)
|
To
include any prospectus required by Section 10(a)(3) of the Securities
Act
of 1933, as amended;
|
| |
(ii)
|
To
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent
a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease
in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation
from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant
to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate
offering
price set forth in the “Calculation of Registration Fee” table in the
effective registration statement;
and
|
| |
(iii)
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement;
|
provided,
however,
that
subparagraphs (i) and (ii) above do not apply if the information required to
be
included in a post-effective amendment by these subparagraphs is contained
in
periodic reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in this registration statement.
| |
(2)
|
That,
for the purpose of determining any liability under the Securities
Act of
1933, as amended, each such post-effective amendment shall be deemed
to be
a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed
to be the
initial bona fide offering thereof.
|
| |
(3)
|
To
remove from registration by means of a post-effective amendment any
of the
securities being registered which remain unsold at the termination
of the
offering.
|
The
undersigned registrant hereby undertakes that, for purposes of determining
any
liability under the Securities Act of 1933, as amended, each filing of the
Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933,
as
amended, may be permitted to directors, officers, and controlling persons of
the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer, or controlling person of the Registrant in
the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities
being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, as amended, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Port Townsend, State of Washington, on the
30th
day of
May, 2008.
| |
INTELLI-CHECK-MOBILISA,
INC.
|
| |
|
| |
|
| |
By:
|
/s/
Nelson Ludlow
|
|
| |
Name:
|
Dr.
Nelson Ludlow
|
|
| |
|
Chief
Executive Officer
|
|
POWER
OF ATTORNEY
KNOW
ALL
PERSONS BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Nelson Ludlow and Peter J. Mundy, as his/her true
and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for the undersigned and in his or her name, place and stead,
in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to the Registration Statement and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, full
power and authority to do and perform each and every act and thing requisite
and
necessary to be done in connection therewith, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant
to the requirements of the Securities Act of 1933, the following persons in
the
capacities and on the dates indicated have signed this Registration Statement
below.
|
/s/
Nelson Ludlow
|
|
Chief
Executive Officer and Director
|
|
May
30, 2008
|
|
Name:
Dr. Nelson Ludlow
|
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| |
|
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|
/s/Peter
J. Mundy
|
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Vice
President Finance, Chief Financial
|
|
May
30, 2008
|
|
Name:
Peter J. Mundy
|
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Officer,
Treasurer & Secretary
|
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/s/
Jeffrey Levy
|
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Chairman
and Director
|
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May
30, 2008
|
|
Name:
Jeffrey Levy
|
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|
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/s/
John W. Paxton
|
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Vice
Chairman and Director
|
|
May
30, 2008
|
|
Name:
John W. Paxton
|
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/s/
John E. Maxwell
|
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Director
|
|
May
30, 2008
|
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Name:
John E. Maxwell
|
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/s/
Arthur L. Money
|
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Director
|
|
May
30, 2008
|
|
Name:
Arthur L. Money
|
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/s/
Guy L. Smith
|
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Director
|
|
May
30, 2008
|
|
Name:
Guy L. Smith
|
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|
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/s/
Bonnie L. Ludlow
|
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Director
|
|
May
30, 2008
|
|
Name:
Bonnie L. Ludlow
|
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/s/
Emil Bedard
|
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Director
|
|
May
30, 2008
|
|
Name:
Lt. General Emil Bedard
|
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