To OTC Journal Members: 
 

More Than You Wanted To Know

Let me apologize in advance. You're probably going to get more information that you wanted on Identity Theft in today's publication.

But, can you know enough? Did you know that if your identity is stolen, on average it requires about 116 hours to repair the damage, and 600 hours for particularly tough cases? Oprah Winfrey, Warren Buffet, Ross Perot, Ben Bernake, and Michael Jordan have all had their identity stolen, so no one is safe.

The simple purse snatching you see here is not the simple purse snatching of our parent's generation. This used to be about stealing a little cash and maybe using a credit card for a short time. No more. A stolen purse equates to a stolen identity, and there are many ways this information can be used to commit crimes over a long period of time.

Only 20% of Identity Theft is credit card fraud. The other 80% can be used for fraudulent medical care, fake IDs, government benefits, gaining employment, getting utilities, etc.

It happens every 3 seconds. 10 million cases have been reported in the US this year alone.
 

ID Watchdog (OTC QZ: IDWAF: TSX: IDW): Does It Like No Other

Here's what interested me in this company- there are really only several companies that offer "Identity Theft Repair", and for the most part their claims are borderline fraudulent. Most Identity Theft Services will help you identify the entities that have false information, and send you a list of phone numbers. From there, you're on your own.

It's like Cancer. Early detection is the key to successful treatment.  ID Watchdog is the only service that provides early detection through a vast monitoring network, and handles everything for you until all issues are resolved.

The company has developed its screening technology with the help of Federal Law Enforcement, the FTC, The US Postal Service, the Secret Service, and the Banking industry.

Once enrolled in their very moderately priced service, the company monitors all the databases you see listed on the table looking for unusual activity, and reports to you directly. In the event of Identity Theft, company guarantees a complete resolution to the problem. You give them limited power of attorney, and their specialists go to work for you until all issues are resolved- no exceptions.

As a result of the superior quality of their service, revs are growing rapidly. The $4.6 million the company delivered YTD through Q3 is a 39% improvement over the same period in '08. Customer retention rates are climbing very rapidly, suggesting recurring revenues will improve rather dramatically.

The company's customer base has changed dramatically in character for the better this year. The reason is two fold. Their marketing strategy has changed, and the back bone of their service has improved.

For starters, many "Affinity" organizations have started looking at the quality of their service, and are beginning to offer ID Watchdog as part of a benefits package. School districts are starting to adopt ID Watchdog as an option in the benefit package of their employees- Miami Dade, Frisco, Lake Worth, and others now offer the service. Through the school system benefit package alone, ID Watchdog will be offered to over 450,000 current system employees and retirees in 2010.
 

The Big Change for 2010: Enter Acxiom Corp (Nasdaq: ACXM)

In July of this year IDWAF put together the final piece of their service puzzle by forming an exclusive alliance with Acxiom Corp (NASDAQ: ACXM).

Acxiom is a behemoth is the data processing and marketing world. The company has been around since 1969, has a $1 billion market cap, and $1 billion plus in annual revenues.

Acxiom is responsible for marketing and outreach programs to 3 billion consumers. The company has 10 billion data records, 500 million global demographic records, and manages 10,000 marketing campaigns monthly. Acxiom pre processes 17% of the US mail.

Starting now, IDWAF will develop an exclusive offering of consumer identity theft and information products based on ACXM data assets. With their superior service in place and ready to roll out on a much larger scale, this is the exact marketing relationship IDWAF needed to blow sales through the roof.

Thanks to this new relationship, by the second half of 2010, IDWAF feels it can deliver about $3 million in monthly revenues, putting the company on an annual revenue run rate of $36 million, up from the current level just over $5 million. 2010 should be IDWAF's breakout year, and its first year of profitability.
 

The Other Big Change

Here's a catalytic event for the stock, and the reason it will likely be trading gangbusters Monday at the open.

On Friday, after the close, IDWAF announced it has formed a new marketing relationship with InComm, the leader in sales and marketing of prepaid products and stored-value solutions. InComm markets retail products across more than 150,000 partner locations worldwide.

Ever go into Target or Best Buy and see a special product offering or display? Many cell phone services are sold this way- in the larger stores. InComm is the company that specializes in capturing those customers in the larger retail environment.

InComm delivered $8 billion in revenues in 2008 through 150,000 retail locations. "Plans to capitalize on this partnership include the mass distribution to the retail industry of the first and only identity theft service offered on a stored value card" - this, out of the press release.
 

Outlook and More

There's a quirk to this idea. Where the stock trades. This is a Denver based company, is the wholly owned subsidiary of a Canadian Company. Therefore, it's real home exchange is the Toronto Venture Exchange (TSX): Symbol IDW on the TSX. Canadian readers can just trade it with its Canadian listing- IDW.

It also trades with a US Listing under the symbol IDWAF. The "F" at the end of the symbol designates this as a foreign issuer. The stock symbol will appear at Yahoo! as a pink sheet stock- IDWAF.PK- but it's not really a pink sheet company.

In the US, the stock trades on a new exchange known as the OTCQX- as special exchange for foreign listed companies that would normally trade as a bulletin board stock. For more information and an OTCQX quote- just "Click Here".

I normally suggest avoiding Pink Sheet stocks because they don't report their financial results. IDWAF does report- in Canada. The Canadian version of the US SEC's Edgar System is known as SEDAR- and you can find all their filings through www.sedar.com.

I pulled a chart from the Canadian side- It's not my usual chart, but since most of the activity is in Canada so far, that's the chart we want to see.

For those of you who like Moving Averages, you will see the $.30 closing price on Friday butts the stock up against the 50 day moving average. On Friday's news, I'm pretty sure the stock will gun for the 200 day moving average, which is $.44.

Sporting a rather moderate market cap of about $25 million, IDWAF turns the corner from '09 to '10 with two massive new relationship and 40% trailing growth.

Acxiom Corp and InComm are two paradigm changing relationships. Both new relationships are the product of a superior product offering, and make the goal of $3 million in monthly revenues by the back half of '10 a serious reality.

To learn more about their product offerings, you can simply visit their web site at www.idwatchdog.com. If you commit to IDWatchdog for 3 years, it's only $13 per month. $14 monthly for two years- $19.95 monthly for a year. You can do a 30 free trial.

I believe this kind of service will be viewed like insurance- something you don't want to use, but necessary and sure nice to have when you need it. When combined as a "check box" in an employee benefit program, it will be a no brainer.

I see the stock finding its way to the 200 day moving average on Friday's news: $.44 in the short term. If the company inks more deals like InComm and starts growing as I suspect they will, $1 would be a good target in 2010- about a triple from Friday's close.

I have to stop writing now I signed up with IDWatchdog Plus for the next year, and paid my $179.95. I'm going to read the first report. Likely, this was cheapest insurance policy I'll pay for this year.

Here's the complete text of Friday's post close news for your review:
 

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