Good day and welcome to the Crexendo Third Quarter 2014 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Chief Executive Officer, Steve Mihaylo. Please go ahead, sir.

Thank you, Stephanie. I am Steve Mihaylo, Chairman and CEO of Crexendo. I want to welcome you to the Crexendo 2014 third quarter conference call. With me today are Doug Gaylor, our President and COO; Ron Vincent, our CFO; Satish Bhagavatula, our CTO and CIO; and Jeff Korn, our Chief Legal Officer. I am going to ask Jeff to read the Safe Harbor statement after that I will give some general comments relative to the quarter. Ron will provide some granularity on the numbers, Doug will provide a business and sales update, Satish will give an update on technology, and then we will open the call up to questions. Jeff, will you please provide the Safe Harbor statement?

Yes, Steve. Thank you. I want to take this opportunity to remind listeners that this call will contain forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995 provides a Safe Harbor for such forward-looking statements. All statements made in this conference call other than statements of historical fact are forward-looking statements. Forward-looking statements include, but are not limited to words like, belief, expect, anticipate, estimate, will and other similar statements of expectation identifying forward-looking statements. Investors should be aware that any forward-looking statements are based on assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those discussed here today. These risk factors are explained in detail in the company’s filings with the Securities and Exchange Commission, including the Form 10-K for the fiscal year ended December 31, 2013 and the forms 10-Q for the periods ending March 30, 2014 and June 30, 2014. Crexendo does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Steve?

Thank you, Jeff. Our sales trend is steadily increasing and I believe our sales are about to increase at an even faster rate. We continue to have quarter-on-quarter organic sales growth, interest in our award winning products and services remain high. There are good – these are good trends watching the enthusiasm I see from customers who have installed our products and services and the enthusiasm of our dealers and direct sales force. I believe there will be continued growth in sales. We continue to grow our backlog quarter-over-quarter. I am pleased by the fact that we have continuing improvement in backlog, which also bodes well for the company’s future. We continue to add more dealers every quarter and I am particularly excited about this channel. We hit a high watermark in dealer sales again in Q3. And I fully expect that trend to continue to improve. We have scheduled our second annual Business Partners’ Conference for January and the team and I will show our dealers the exciting developments we have and how Crexendo’s cloud products and services will increase their customers’ productivity in most cases save their money and more importantly they increase the dealers’ bottom line. Our network sales also hit a high watermark last quarter. We believe this will continue. This is a very important part of our business and it allows us to craft enterprise solutions for clients. Being a one-stop shop IP integrator enables us to expand our sales and believe that helps increase our customer retention rates as well. We believe – we continue to work to drive down costs. We are working on reducing our costs for IP phones as well as other products and services. While we work to keep costs low, we never sacrifice quality. We also changed the way…

Thank you, Steve. Consolidated revenue for the third quarter of $1.7 million compared to $2.4 million for the third quarter of the prior year. The 29% decrease of approximately $700,000 is primarily related to $1 million decrease in our web services revenue offset by a $300,000 increase in our telecommunication services revenue. Consolidated operating expenses for the third quarter decreased 21% to $3.3 million compared to $4.2 million for the third quarter of the prior year. Our pre-tax loss and net loss for the third quarter was $1.5 million for a loss per diluted common share of $0.13 compared to a pre-tax loss of $1.6 million and a net loss of $1.7 million or $0.15 loss per diluted common share for the third quarter of the prior year. For the nine months ended, consolidated revenue was $5.6 million compared to $8.2 million for the same period for the prior year. The 32% decrease of $2.6 million is primarily related to $4 million decrease in web services revenue offset by $1.4 million increase in our telecommunication services revenue. And consolidated operating expenses for the nine month period ended September 30, 2014 decreased 13% to $10.4 million compared to $12 million for the same period of the prior year. Pre-tax and net loss for the nine month period of $4.6 million or a loss per diluted common share of $0.42 compared to a pre-tax loss of $3.4 million and a net loss of $3.1 million or $0.29 loss per diluted common share for the same period of the prior year. Turning to the balance sheet and cash flow at September 30, we had cash and cash equivalents, including our restricted cash of $2.3 million compared to $3.6 million at December 31, 2013. Cash used for operations during the third quarter of $804,000…

Thanks, Ron. During Q3, we continued to see increases in both our direct and partner sales initiatives. We continue to cut expenses and decrease our cash burn and we continue to make great strides in our fulfillment, in our operations divisions as we increased our telecom backlog. We also began the process of converting over all of the customers that we acquired from the One Stop Voice acquisition that happened during Q2. On the direct sales front, we had our strongest quarter of the year with a 9% increase in sales bookings over Q2. For competitive reasons, I won’t go into specific details on the following, but our focus on larger sales opportunities and specific vertical markets returned some significant sales during the quarter, including an 18 location sale as well as sales into new verticals that we have been pursuing that will provide significant sales opportunities for us in the future. By establishing Crexendo as the preferred vendor for telecommunications for many of these vertical markets and associations, we are quickly becoming the go-to solutions provider for many of their members. Crexendo’s ability to understand the company’s communications challenges combined with the team work of our sales and engineering teams working closely together provides us unique and in some cases custom solutions for the end users, which gives us a unique advantage in the industry. The capability for our team to evaluate the customer’s needs and desires and be able to have our engineering team create custom solutions to address their challenges enhances our ability to win opportunities and expand within this particular vertical market. Our dealer partner channel continues to grow and expand posting its best quarter ever and build sales bookings as well as new dealer partners added. Our focus on adding quality partners and providing them…

Thank you, Doug. Greetings, everyone. I am glad to report that we made significant improvements to our services, products and technology during Q3. The enhancements have been in the areas of increased operational efficiencies of our cloud services, improved and new functionality in our telecom platform, maintenance of our current web hosting platform and continued improvements to our new web platform. As our telecom customers continue to increase, we have seen a remarkable growth in the traffic and stress on our infrastructure. Successful integration of KBX platform from PBX Central acquisition and continued migration of new customers from One Stop Voice acquisition into Crexendo’s native infrastructure demonstrates that our infrastructure is scalable and then it can withstand the continued growth of the Crexendo base. The cutover of new circuits from Level 3, a Tier 1 carrier, has drastically improved our network reach to our customers, premise and positions Crexendo to be able to deliver higher quality voice services to our customers through the public Internet. I am glad to report that the changes we made to our e-mail infrastructure to mitigate the demark changes enforced by large e-mail ISPs, such as Yahoo!, Google and AOL have yielded good results and prevented heavy down trades. As many of you might be aware, new security vulnerabilities such as hard fleet and Kudo were discovered, which affected much of the cloud service industry. Although we were not impacted by these vulnerabilities directly, we assessed its impact and mitigated these vulnerabilities. We continued to invest heavily in adding enhanced external monitoring capabilities, processes and regular vulnerability assessments of our infrastructure. This continuous analysis, monitoring and evaluation process better prepares us from vulnerabilities in the public internet upstream from our telecom carriers and data carriers and faulty equipment within our infrastructure. Our Stores 7.0 platform…

Thank you, Satish. Stephanie, we are now available to take questions if you would like to open it up for questions.

Thank you. (Operator Instructions)

Stephanie, I guess we did such a – or do you have someone?

No, I am sorry, there are no questions.

Okay. I guess, we did such a good job of presenting that there are no questions, but let me just wrap this up by saying we have three significant things that are going on in the company that should improve cash flow significantly. By the end of this quarter, we will have our new endpoints in place that should reduce our costs significantly. We also have increased sales, the sales in October were robust and we expect that trend to continue. And the third one is – and this is very important near the end of last quarter about halfway through September, we introduced selling of the endpoints as opposed to running them and that should significantly improve our cash flow. So, those three things, selling the endpoints, increased sales and reduced costs is going to benefit us tremendously. We should see almost every thing transitioned into those new plans by the end of the first quarter. And I expect the second quarter to start bearing fruit for us. So, with that, I am going to wish all of you a pleasant afternoon and thank you for joining the conference call and look forward to talking to you after we report year end. As you know, that’s usually takes a little longer, because we have our 10-K and proxy and other things to file, but hopefully we will be back at you pretty soon. Thank you very much and good day.