Welcome to today’s Document Security Systems' Third Quarter 2016 Earnings Call. [Operator Instructions]. It is now my pleasure to turn the conference over to Mr. Jeff Ronaldi. Please go ahead, sir.

Thank you, Robbie. Good afternoon and I’d like to thank everyone for joining us today for the Document Security Systems’ third quarter 2016 earnings conference call. I’m Jeff Ronaldi, CEO of Document Security Systems. And joining me on today’s call is CFO, Philip Jones; and our Chairman of the Board, Robert Fagenson. Following our prepared remarks, we will open the call for questions. This afternoon Document Security Systems issued a press release announcing its third quarter of 2016 financial results. Before we begin, I’ll review the company’s Safe Harbor statement. Forward-looking statements on this call, including without limitations, statements related to the company’s plans, strategies, objectives, expectations, potential value, intentions and the adequacy of resources are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act and contains such words as believes, anticipates, expects, plans, intends, and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected. In addition to the factors specifically noted in the forward-looking statements, other important factors, risks and uncertainties that could result in those differences include, but are not limited to, those disclosed in the Risk Factors section of the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, previously filed with the Securities and Exchange Commission. Forward-looking statements made as part of this call are being made as of today, November 14, 2016, and the company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements. During the call today, management will discuss adjusted EBITDA. In the company’s press release issued today, you will find additional disclosures regarding this non-GAAP financial measure and reconciliations of net loss to adjusted EBITDA. I’d like to now turn the call over to Philip Jones, Chief Financial Officer of Document Security Systems. Phil?

Thank you, Jeff. Today we announced third quarter 2016 financial results which are summarized in the press release we published after market close today and detailed in the Form 10Q we filed earlier with the SEC today as well. As highlighted in our earnings press release the third quarter was a very strong quarter for DSS especially by the measurement of adjusted EBITDA which I will go into further detail in a bit. This is the second straight quarter that the company has posted positive adjusted results, adjusted EBITDA has been an important measurement of the core profitability of our operations and a new metric management uses to evaluate and measure our performance. During the third quarter of 2016 the company generated a strong adjusted EBITDA profit of approximately $397,000 which approximates 8% of sales. For both the third quarter and now the first nine months of 2016 when the company has been able to significantly improve its core profitability as measured by this metric which is a very encouraging trend for the company. Revenue for the third quarter was 4.980 million up 13% from the third quarter of 2015. Year-to-date revenues up 11% to approximately 13.4 million which represents an increase of approximately 1.3 million. This increase was driven by the growth in packaging and ID card sales slightly offset by a decrease in sales of our digital division as it focuses its resources on our AuthentiGuard product and market development. One particular area of growth is in our trusted ID card groups sales of technology based cards which were 33% higher in the third quarter compared to last year's third quarter and now are up 22% year to date. These are card in badge [ph] projects that require specialized product knowledge, technology and skills that the team at…

Thank you, Phil. I'd like to thank everyone for your continued support and interest in Document Security Systems. First, as Phil had described the third quarter continues our recent trend of strong financial performance and significantly improves results. Our business presented blend of solid and consistent performance from business lines that have strong profitable niches in their markets together with operating segments they are either at their early stage of operation that have great promise or high risk reward profiles. I believe that this combination offer strong investment opportunity for those that understand our business especially when considered in light of our recent March calculation levels. Well I continue to be very pleased with our improving adjusted EBITDA results. I'm more excited about the significant opportunity that I see before us. As I said in the past our dedication to research and new product development [indiscernible] of who DSS is and be able to maintain that focus while generating positive financial results as a significant achievement at this the company. During the quarter as expected we benefited from strong seasonal sales at our packaging group which continued to deliver significant profitability to the group and in edition our plastics group had one of the strongest quarters and is benefiting from its growing presence in the technology card market. Both divisions are strong and getting stronger, in our digital group we continue to focus most of our resources on the development and sale and marketing of our Vanguard products. We continue to see a significant interest in the capability of the AuthentiGuard like customers facing brand protection, counterfeiting and product fraud issues. Sale cycles are long but we've had successes, as we capture new customers we expect to see shortening of sales cycle and accelerated market penetration. We remain very bullish…

Thank you, Jeff and thank you, Phil. In summary before we take your questions, after many years of waiting investors can now begin to see the inherent strengths and earnings power of our core businesses. Aggressive cross control and increased sales have finally probably have long held for sequential quarters of positive adjusted EBITDA achieved without sacrificing potential for our brand protection IPS assets. In addition to the opportunities, Jeff sees in IT we've seen an expanding array of larger companies interested in testing and installing while brand protection and product tracking technology. I believe this bodes well for increased use and acceptance of our AuthentiGuard array of technology based products. We've been waiting a long time and while we continue and tell you that what's just around the corner, the company historically has made many promises that we have been able to keep. We now are waiting till ink dries on the dotted line before we formally announce things, but I can tell you that from my perspective the last few quarters in the improved results are harbinger of things to come and I'm hopeful that before the year ends in this quarter we'll be able to come back to you with other calls that will show significant progress of things that we haven't been able to talk about today. So with that let's open the call up to questions and then after that we'll have a brief closing remarks. Robbie?

[Operator Instructions]. And we will take our first question from John Whitney, Private Investor. Please go ahead.

My first question is why is there such a lack of public relations and press releases about the good things that are according to you guys going on with the company? Why are we kept in the dark, more so than any other company I've owned in 35 years of investing. It just seems like we don't matter and that we are second thoughts to the whole process. Next question is what would draw in a new investor, why would anybody possibly want to put money into DSS with a drop in price so precipitous and with no good reason that they can get their hands on of why to invest and I will wait for your answer. Thank you.

John, that’s going to be further from the truth from in terms of not wanting to respect our investors. As you know I'm one of the largest shareholder, at the end of the day unfortunately under our former CEOs the company had a history of making a significant number of promises and issuing a significant number of releases and that year with a significant number of disappointment and we made a significant change in strategy which was that we're not going to say things that we can't back up. We're not going to announce things that are going to happen, we're going to announce things that are happening or have happened and while this is resulted in a paucity of information in recent months. It's not because things have not been going on behind the scenes but it's simply not yet ready for us to be able make a public announcement with any credibility. The stock is performed awfully, there's no question about it and the lack of news and vacuum certainly creates negative speculation that's effective but we’re not going to be drawn into what the company was drawn into before by cleaning up news releases that sounded good and we’re certainly true but then with customers not finally saw it, itself had not come to materialize no matter how good safe the information was it didn't end up getting reflected in the bottom line. So we feel we're in a stage now where we have to put up or we have to shut up and we have preferred at this point and will continue to do that but we’re not going to tell you something that we don't know and at this point or you can see some of the release today is that positive things are happening.…

Can you tell me are you interested or going to hire someone who is a professional who is able to communicate with Wall Street and with the news releases to put out positive information when you're comfortable releasing it?

Absolutely. As you know we have had financial PR firms professionals in the past, they cost a good deal of money thousands, thousands, thousands, and thousands dollars a month and we didn’t see any point in staying that when we had nothing to say. The minute that we had the ability to start coming up with press releases that show absolute positive progress of substantive nature where someone can write something that is truly exciting for all the right reasons be sure to spend the money and get those people on the job again.

I don't want to interrupt you, sir. But I've been a direct sales rep selling technology for 40 years. I would love to sell your product. I think it's a no brainer. I think it's unbelievably under performing and under sold and one of the techniques I use was I put out a user's list with names and numbers or anybody could contact their user and find out exactly how the product I promoted worked and if in fact I was reliable and if it did work, I think there would be something you might consider because you do have users. They must be happy because they reorder and maybe you need a real sales professional to come in and use some techniques in how to promote technology sales as the world moves so quickly these companies are dying for answers and I don't even think they know that DSS exists.

Generally speaking from a sales perspective you certainly are correct, I will let Jeff answer this one when I finish. One of the problems that’s not unique to us but certainly we're faced with is brand protection technology, anti-counterfeiting, most often the customers' don’t want their names released and don’t want to speak to anyone because they don’t want anyone to know what they're using to protect their brands but certainly what you speak good knowledge, it makes sense and it's certainly something we would like to do and as I think as we get a little bit further along the curve our confidence level will be built, something we're certainly are going to try to do. But thus far historically [indiscernible] use company's names or customers, they have forbidden us to do it. Jeff, you want to speak to that?

John, than you for your comments and I do appreciate it and I respect the success you’ve had over the years. I've also been in the technology world for quite a while with some success and I agree with the techniques you're describing. One of the things that we've been doing over the last 18 months to two years is casing the foundation of this company specifically the financial performance. We had to stop bleeding cash, we've done that and we can now focus on actually growing and investing in things that you're describing while we have not been able to invest in high profile sales or sales tools. We now have visibility to do it. I'm excited about what we have and what we have going forward. I agree with you that this product is one that appears to be one that is bought and sold and we get a lot of interest from a lot of companies and so we have to go through the sales process, the one of the difficulties that I talked about in our prepared remarks was a long sales cycle. When you're talking to the Big Company X it takes them a long time to A, make a decision and then implement it. These companies don’t change their labels very often and if they get a yes you’ve to wait for the next time they're doing a change of logo. So I agree with you this is a product that is specifically Vanguard suite of products that show a lot of promise and you asked before about drawing in new investors. This is a prime example of a company that has all the attributes to have high growth, this product solves the problem in an economic way, it's easy to implement and we're starting from near zero.

Well the only other comment I would have your answers are fine as long as performance follows and you're not blowing smoke which has happened. I've been an investor for a long, long time and I have a lot of stock for a little guy in the Midwest. Okay? I'm not a big shooter. Every nickel I earned I earned on commission, I haven't had a salary in over fifty years, all right. I believe in being paid for what you produce. Right now I'd have to give your rating a F as a company and I really believe that it's time to fish or cut bait because next time around on voting I don't think anybody possibly would vote to put you guys back in unless something changes. I called the company over seven times and no one ever returned my call, that just led me to believe it doesn't matter what I think and I don’t know, heaven only knows how many other people called with similar results. It didn't seem to me to be the way that you would even want to treat people who believe in you. In fact I have a lot of people I could get to invest in you if we only could see some sign that we're on the right path. So I'm not here to make this difficult. I'm only here to tell you what I think, I'm very frustrated, I'm pissed off about the money I've lost but it's only money. I can make more of that but I think you've got a dynamite product and I don't see how it can be screwed up if everything is pushing in the right direction and I'm willing to give you one more round of before I think I would have to mount a great offensive against the management if nothing changes. And I'm not trying to be rude.

I don’t think you'd have to.

I'm trying to be honest I think you guys are.

It's very difficult to argue with anything that you said because we live it and it's the truth and no one here has embedded management. Certainly if we can't get this thing up or anything on a better plane in the near future. It's not going to be new, it's just been replaced by someone who can do a better job. The problem is that you know when we had to save money and we got rid of financial PR firm because they had nothing to say and then we had to save money. So we had to get rid of the receptionist who might have been answering your phone. It's painful, and it's painful because you can't get the call back you want.

If I can interject and just go a little bit the other way how have you guys earned your compensation over the last three and a half years?

Well I don’t get paid so it's easy for me.

Well somebody does. I looked at the report today. How does anybody earn their salary with that kind of performance?

: At the end of it people are struggling hard to save the company which was going down. It's been difficult. There have been a lot of false starts but the core business is a continued to build nicely. We are looking to get rid of overheads and rid of pipelines that were not as robust and didn’t have the potential that you could see and what is left and start building back and we've done some rearrangement of management. We've done a lot of cleaning and a lot of cutting we've gotten a cost into loss, now f the company can not only survive but has a chance to prosper. While you may not see that yet in the bottom line and what you see in the bottom line you may not see it reflected in the stock price. Sometimes you have to go through how to be able to come back and my gut tells me the reason I held on continue to buy stock together with my family and friends it is because we believe that we finally reached the dawning of that. If we’re sitting here six months and nine months now does it come true. You have every right to throw the bums out but it's a stage we are at.

All right. Well I hold you to it and wish you the best.

And you can have my phone number and call me anytime you want because I will answer.

I'm not making that up, I called repeatedly. I just want to know is there anything new?

I'm not saying you're wrong, my phone number in New York is 212-847-3200. And done be shy.

Is this Robert?

Yes it is. And that’s my desk phone, if I'm not there it will fall into my cell phone.

You know the big thing is we've got a dead ass winner. There's just no two ways about it and just something needs to change and all you have to do is you look at a guy like [indiscernible] and he goes from here Stanford, wins, 49ers wins, Michigan wins, they're all football players but there's a reason they win. That's all we're asking.

You should have come with me to the Jets game yesterday.

[Operator Instructions]. We have no questions at this time.

All right so we will just sum up. Jeff and Phil feel free if you want to add anything but we certainly appreciate the patience and perseverance of all of you who are not only on the phone but remained shareholders and are watching our stock languishing at these levels. From a financial performance point of view you guys have done a good job of stabilizing the company. And I think that what we've been working on in recent weeks and in recent months is beginning to show in the financials and hopefully in the weeks ahead we'll have more to tell you and it will show that we are finally what I believe is on the right track on many fronts. So while we're not going to make ridiculous promises and we're not going to tell you about things that are half baked, well it's suffice to say that the team is working hard and working on real things and nothing will make us happy or proud of been able to tell you about them in the weeks and months ahead. Our deals are signed, things come to fruition and the company continues to progress. Phil, Jeff anything you would like to add?

I would like to thank everyone for your continued support. We're excited about what we're doing. John, I want to personally apologize to you for having to call in and not get a return call, that’s not acceptable. We’re going to see why that is, I will also provide my phone number to you and other investors who do call I do answer and I do return call as quickly as possible. So my phone number is 571-334-1112. And again I apologize if you or anyone else may call and won't return that shouldn't happen. But with that I am looking forward to the future and calls like these will be much more positive, that’s all I've.

And this does conclude today's program. Thank you for your participation. You may now disconnect.