Greetings and welcome to the Intellicheck Mobilisa First Quarter and 2014 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Enrique Briz, from Dian Griese International. Thank sir please go ahead.

Thank you, operator. Hello and welcome everyone. Thank you for joining us today for our 2014 first quarter conference call to discuss Intellicheck Mobilisa’s results for the quarter ending March 31, 2014 and to discuss other business developments. In a moment I will call upon our CEO, Dr. Nelson Ludlow to lead today's call and introduce the members of the Intellicheck Mobilisa management team who will be participating in today's conference call. Before I do that, I will take a few minutes to read the forward-looking statements. Certain statements in this conference call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended. When used in this conference call, words such as will, believe, expect, anticipate, encouraged and similar expressions as they relate to the Company or its management, as well as assumptions made by and information currently available to the Company's management, identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs about future events. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances and the Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of such changes, new information, subsequent events or otherwise. Additional information concerning forward-looking statements is contained under the heading of Risk Factors listed from time-to-time in the Company's filings with the Securities and Exchange Commission. Management will use the defined financial term adjusted EBITDA in today's call. Please refer to the Company's press release issued this morning for further definition of, and context for the use of this term. I would now like to introduce Dr. Nelson Ludlow, Intellicheck Mobilisa's Chief Executive Officer. Dr. Ludlow?

Thank you. Welcome to our shareholders and investors. Now let me introduce who I have with me on the call today. From our Board of Directors on line is both our Chairman, Admiral Mike Malone and Mrs. Bonnie Ludlow. From our management team and speaking with me today is Mr. Bill White, our Chief Financial Officer, also on the management team we have Mr. Russ Embry, our Chief Technology Officer; and Ms. Heather Flanagan, our Director of Marketing joining me on this call. Mr. Robert Streett, our Director of Sales is trying to make the call but he’s out traveling and importantly out making sales. So the outline for today’s call, what I’d like to is I’d like to present Q1 results, the financials particularly the initial progress that we had in Q2, I’d like to discuss our new products and our business plans to 2014 and particularly to discuss the markets that we’re focusing on. I think that’s important to investors, I think it gives you better insight into the areas that we’re focusing on and why and which markets matter. And then at the end of the call we’ll allow an opportunity for shareholders to ask questions. So let’s talk about the Q1 financials, the revenue for the quarter ended March 31, 2014 is about 1.1 million compared to 1.6 million revenue the year before. Overall that means the revenue is down about a third, as you may remember last year at this time we had a significant component of enterprise wireless revenue, and as you know we’re now focusing our attention on identity systems and not wireless, not [indiscernible] systems, we’re an identity systems company and that’s where we’re going to focus on. Let me just add one quick comment, as typically our revenue is seasonal, it’s…

Yes, thank you, Nelson. Good day to our shareholders, guests and listeners. I’d like to discuss some of the financial information that was contained in our press release for the first quarter ending March 31, 2014 which we released this morning. We anticipate that our quarterly report on Form 10-Q will be filed with the SEC this afternoon. Revenues for our first quarter ending March 31, 2014 were 1.92 million compared to 1.633 million for the previous year. Identity system revenues decreased to 1.74 million compared to 1.36 million and wireless revenues decreased to 18,000 compared to 273,000 last year. Booked orders for the three months ending 3/31/2014 were approximately 1.95 million, up 18% compared to the 928,000 for the first quarter of 2013. Our gross profit was 729,000 for the quarter or 67% of revenues compared to 895,000 or 55% of revenues for the first quarter of 2013. The increases in percentage is primarily due to the focus on identity systems that Nelson briefly mentioned earlierwhich typically have higher margins. Operating expenses which consist of selling, general and administrative and research and development expenses decreased 10% or $176,000 to 1.639 million for the three months ending 3/31/2014 from 1.816 million for the three months ending March 31, 2013. Adjusted EBITDA for the quarter ending March 31, 2014 was a negative 710,000 compared to a negative 646,000 in the quarter ending last year. The company posted a net loss of 910,000 for the three months in the current quarter compared to a net loss of 921,000 for the quarter ending March 31, 2013. As of March 31, 2014 our backlog which represents non-cancellable sales orders for products not yet shipped and services to be performed was approximately 358,000 decreasing 54% from [indiscernible] at March 31, 2013, and 6% from the…

Thank you, Bill. Let’s summarize. So, for this quarter, and start of 2014 we raised funds to significantly beef up our sales and marketing team. We hired two new directors, a director of sales and a director of marketing. We organized into 10 vertical markets, we nearly tripled the sales team and will focus more on identity systems in the path and wireless abilities. We are on track with this plan and we expect to see initial results in Q3 and Q4 of this year. We received an 18 and a 19 patent, we launched the Mexican ID scanning product called MexiScan, Apple just approved our law enforcement app called Fugitive Finder, just last Thursday for on their Apple Store for more than 1.1 million law enforcement personnel to scan an ID and can get a law-enforcement check on the spot. We closed on approximately $400,000 deal with United States Army for adding law-enforcement checks for their ID scanning which will primarily recognize its revenue in Q2. Thus we have a team on location today at that base. We sold nearly 300K and additional scanning software products to a major grocery store chain in March and in April. And today we announced a restaurant chain of 16 restaurantsthat are now going to be using barZapp via subscription to safely ensure that their customers who purchase alcohol are of legal age. We spent some time in this call to discuss the size of the total available marketsthat our new sales team is going after. We were on track with our business plan that we shared with shareholders in January. I’m particularly excited about our new law-enforcement product. So let’s take questions. We’ll do our best to answer any questions that people may have. Please clearly state your name and what organization you are with, and who you are asking the question to on our end. Also please limit to one or two questions, and if you have a follow-up question, please rejoin the queue so that others may have an opportunity to ask questions as well. So I’ll turn it over to the operator.

(Operator Instructions). Our first question comes from the line of (Robert Lambert) [ph] with [indiscernible] Capital. Please go ahead with your question.

Hi good morning. As you heard, (Robert Lambert) [ph] In your new product in the law-enforcement, number one, do you find there is prejudice with Apple phones that because it’s an American company, more police officers are buying Apple phones and the second part of that would be obvious, would be will you have this application ready for android phones?

Robert, thank you for the question. Right now we've launched it on the iPhone. We would intend to launch it on Android which is in our barZapp product that we’ve done for age verification, as it'sessentially the same technology in it. With just a camera in the cellphone it’s capable of converting that into a barcode, we process it, and pull the information out of it. The additional part is that we also send it wirelessly and securely to a state switch for the FBI's server. So it’s essentially [indiscernible] help people, it’s essentially if we can get it to work for barZapp on an Android, we can get it to work for Android for law-enforcement. The only slight difference is that there is some encryption capability that’s required for law-enforcement. We intend to place this on Android, we’re also looking at a third app format which is a Microsoft smartphone platform, that would be a later one, and one that we do not intend to do at this time is BlackBerry. And you can see, while with our barZapp, there was almost 3:1, 4:1 ratio of selling more on our Apple products than on our Android.

Thank you. And our next question comes from the line of Amy Norflus with Neuberger Berman. Please go ahead with your questions.

Hi. Great quarter and great progress that you’re making. My question is kind of long. Nelson you did a great job explaining what the tam is and what markets are available. Can you take a moment and talk about the probability of achieving this, a timeline, some of the competitive advantages because we’re seeing some other competitive products out there. And what we should expect now, because now we have a SaaS model, so with a SaaS model it’s lower revenues initially but it’s a much longer duration of the revenues. So how should we understand what that means? Neuberger Berman: Hi. Great quarter and great progress that you’re making. My question is kind of long. Nelson you did a great job explaining what the tam is and what markets are available. Can you take a moment and talk about the probability of achieving this, a timeline, some of the competitive advantages because we’re seeing some other competitive products out there. And what we should expect now, because now we have a SaaS model, so with a SaaS model it’s lower revenues initially but it’s a much longer duration of the revenues. So how should we understand what that means?

Okay, thanks Amy, but very good questions. Right because anytime somebody hears tam and we’re not good investor and start ups in other companies and someone says, hey look it’s a billion dollar tam and if we could just get 10% of that market we’ll be making 100 million a year, that’s a hand waiving and just not realistic when people say things like that. And then typically that goes within, there is a huge hockey stick curve and over here it’s all going to just work out. I am not a fan of that type of thing. So the first step was we needed to add the sales team and I know this wasn’t your question but it does need to be said, we just were not touching the customers that we needed to touch. We just were too small of a company and had not enough focus on sales. The Company did very well in new product development and very cool in technology, very cool in patent protection, not so cool on touching the customers and we had no marketing previously and we had too small sales force. With the help of the investors, we put the funds that they gave us directly into those two areas, and into anywhere else, totally into those two areas. So it’s exactly the right thing. Now the competitive advantages we have are there other people that could enter on to a cellphone and maybe run an FBI check, yes there are, not with a drivers license, no one else can scan the drivers license and do it, could you hand jam into a cell phone somebody’s drivers license number and run a query, yes there are a couple other companies that do that, but not with the ease of doing with…

Thank you. And our next question comes from the line of Steve Roth with USIT. Please go ahead with your questions.

Hi. First off thanks for all the hard work it’s no easy of course you’ve undertaken that I know you’ve got your extremely high intellect and work ethic in it. I think the part that’s troubling me is I have been on a number of these calls over the years and each one almost recklessness on how fantastic the products are and you’re still so 1.1 million in revenue and I now you have a sales force coming on and that supposed to bring us over somewhere but why should we really think we’re going to get that I’ve been hearing this for a long time? USIT: Hi. First off thanks for all the hard work it’s no easy of course you’ve undertaken that I know you’ve got your extremely high intellect and work ethic in it. I think the part that’s troubling me is I have been on a number of these calls over the years and each one almost recklessness on how fantastic the products are and you’re still so 1.1 million in revenue and I now you have a sales force coming on and that supposed to bring us over somewhere but why should we really think we’re going to get that I’ve been hearing this for a long time?

Right, Steve, good question and that’s exactly that’s both questions and we are good at good products the products are good their own are good markets where we’re failing in the past is putting the emphasis in the sales team. So when I invest in companies of this type and I am invested in this company I look for two things, a killer app that has wide application across everything not just one small slice that kind of makes sense but has a huge -- and it touches a lot of people and this one does. Every man, women and teenager in North America has an ID card in their wallet and we are the ones with the patents on that so how do we capitalize that and convert that into revenue how -- I mean the costs in this Company as you know the last year I reduced a lot of the costs we had to turn this around those aren’t along, it’s top-line growth is what we have to have and when you investment enough at hi-tech company like this you don’t want to have your CEO say while we’re going to try to grow at 6% more efficiently than a year before and during if you are in a disco or something maybe you can squeeze out 6% and it will be a good thing. This is has to be more explosive growth but with higher risk and so to do that we have to take some risks and the risks that we’ve done is we went out did a raise, that’s something new that we had not done in this company before took those funds hired two new directors and completely revamped the sales team and tripled the size of it. Those are all new things I think most of the investors and all the ones that we’ve spoke to in person and the plan that we have talked about we didn’t say expect Q1 revenue and we are raising money in Q1 in fact Bill and I some of our upwards were around that activity and not what our activity should be each and every day which is sales. And so with that behind us we’re back focused our -- the two of us as well as this new sales teams we have every day on the sales. So and we didn’t even say that Q2 you are going to see any in this whole huge results because in reality when we hire new sales person and everyone that I’ve hired done this well but really takes them about six months until you really start to see numbers actually coming in and orders coming in based on it. We’re generating a lot of activities but it takes a good six months for that to happen I expect to see results in Q3 and Q4 that’s what we said in January and I still believe that’s on-track.

Thank you. And our next question comes from the line of Joe Brunini, who is a Private Investor. Please go ahead with your questions.

Hello Nelson, regarding the you did a [indiscernible] one thing you brought up which I don’t think a lot of people are aware but I know I wasn’t, what was the cost of the information related to the check now that varies from $7 to $29 currently if I am correct?

Yes, in fact I’ll let Bill talk about that we was the one of have sheriff’s offices and if you want to talk about the entire budget just for doing this.

Yes, I own a small Sheriff’s office in Washington City shared with us that they have third-party dispatch oral dispatch and it was $29 per dispatch and the budget for the year was about 350,000 for that dispatch, so he was very excited to be able to do that same thing with our Fugitive Finder application.

Thank you. And our next question comes from the line of Robert Limper with RTO Capital. Please go ahead with your question.

Hi, going back to your law enforcement product, I would expect that state police that deal with high-speed roads and traffic would enjoy this technique since they don’t have to lead the person that they pulled over on the side of the road and they can actually scan them right there as they are talking or looking at them, so that these people don’t do anything crazy. Can you just talk about what you would expect as far as, I hate to say percentages since you said about that methodology but I mean if we got 4% of the police that would mean some very significant revenue to Intellicheck.

Yes, Robert, thank you for the question. What you are seeing here and you are hitting right on it is we have added marketing into the Company and what you are seeing is we are focusing more on the areas that have larger payout, the larger markets, so we are concentrating more on retail. Now, we are adding and having a real product that’s available for law enforcement. We didn’t have that before. Those two markets without a doubt are our biggest ones, some of the others that we have and we have some people working on them but with less effort are things like rental car companies and hotels, yes, good products but the total available market is much smaller. So, we have shifted to that. Also the way these things are going to rollout is probably and my favorite book is crossing the chasm technology sells by word of mouth. It’s hard to believe, you do trade shows, you do marketing, you do all these other things but what happens is if one county sheriff office, if one large city starts using it and his friend that’s the cheaper place and another comes to visit and he sees them using it, and he says what is that that’s how it works for us when we start selling military basis. We pick up one base and then another and the base commander of another base would drive through on the sister base across the state over there and go what is that thing scanning IDs that’s pretty cool, I want that at my base that’s what’s going to happen here. There is a technology component where you have to tie into the FBI’s switch state-by-state and that’s a little bit of a requirement but that’s okay, it doesn’t scare…

Thank you. And our next question comes from the line of Amy Norflus with Neuberger Berman. Please go ahead with your question.

Hi, Nelson, you stated that on the third quarter, one-third of the sales should probably be the army and then you also stated that we should start to see the fruits of all of the sales people in the third and fourth quarter. How do we -- can you I don’t know I don’t know if quantify or somehow give us some understanding as how we should understand that? And then also you didn’t mention anything about Homeland Security and airports and stuff like that? Neuberger Berman: Hi, Nelson, you stated that on the third quarter, one-third of the sales should probably be the army and then you also stated that we should start to see the fruits of all of the sales people in the third and fourth quarter. How do we -- can you I don’t know I don’t know if quantify or somehow give us some understanding as how we should understand that? And then also you didn’t mention anything about Homeland Security and airports and stuff like that?

Okay, thanks Amy, yes let’s talk about that one first, okay Homeland Security, I’m not, yes, I didn’t mention that in this, I don’t believe that’s a great market for example are they going to be scanning drivers’ licenses from a Homeland Security point of view, they had a program called credential authentication technology boarding pass, I am forgetting one of the last letters on it, but Homeland Security tried four times to launch a program like that and each and every time some other company protested and it stopped and we’re partnered with some large companies out there, I believe there is a bias within Homeland Security to issue contracts like this to large companies. I’ve had Homeland Security officials right out say that, I believe that is the truth whether the government wants to do that or not I believe that they are more comfortable with initiating contracts with very large companies with respect to things like this. So we would be partnered with someone. I’m not going to hold my breath if they’re going to do that. I think we had a press conference a few years ago with Senator Chuck Schumer and he said right after the Times Square Bomber and we demonstrated how we could scan the guys Connecticut driver’s license and pop up the No Fly list and could have prevented easily that guy from getting on an airplane and almost flew out of the country. All the site system CEOs are gaining Deepak Chopra and Deepak told me that the government is not the best of customers and I tend to agree with that, they buy lumpy, they don’t plan out their programs very well, they cancel in the last second when another company can -- it’s, I don’t want to give shareholders…

Thank you. And our next question comes from the line of Joe Brunini who’s a Private Investor please go ahead with your questions. Sir, your line is live.

Hello.

Yes, hi Joe we can hear you.

Okay, I’m sorry Nelson I was cut off before.

Okay.

You’ve already in the Fugitive Finder, I know the subsequent caller came up with a good comment I just wanted to add a similar question, I mean every 1% comes out about $500,000 a month in revenue and I’m sure your margins are significantly high in that area. I believed in the products I believe in your patents, and having a vertical sales force now is one of the best opportunities that ever existed with your company, it truly is, most people have the sales push but no product, you had a product with no sales force, so take this as a compliment, it’s meant to be, but the Fugitive Finder, every percent of that market is $0.5 million a month potential, am I correct with that?

We believe that the market is 615 million, about total available market of that of 615 million a year. And so the other number is absolutely very large. And I mean we want to -- and you know these things don’t grow winterly, again they tend to as you skip through the innovators into early adopter format and again there is a cross in the [indiscernible] meaning to make sure that you don’t adjust with the innovators you need to be a standard, you need to have clear warranties, there needs to be a clean understanding of the process, and you need all the requirements. It’s a safe professional product to buy and that’s what the early adopters go after. Late adopters go after ten month, price after -- lots of competition in comparing between two and your 10% cheaper. That’s not where we are at. We need to go after these early adopters, maybe get into that market. That probably going to get adopted and we’re about -- and the growth in that tends to start out slower, and tends to be more explosive once it becomes adopted as a standard. That’s the goal right now and that’s where we are going to be with. Thank you for the compliment, Joe, and I am very excited that we brought this product out, that Apple has agreed to be the reseller for us. And I am very glad with the new sales people we have and how aggressive they are at getting the word out.

Thank you. And your next question from the line of Gus Allen with GA Financial, please proceed with your question.

Thank you, Nelson that was a wonderful description of the things that you’re so excited about, right now. And with our question I think everybody who has asked the question, this law enforcement product is outstanding. What struck me, I wondered, since you had -- your research took you across the country and speaking with a lot of different kinds of law enforcement groups, I’m just curious outside of the state of Washington, has anybody else showed enough interest to really do some homework on it, are they looking at it seriously?

Thank you, Nelson that was a wonderful description of the things that you’re so excited about, right now. And with our question I think everybody who has asked the question, this law enforcement product is outstanding. What struck me, I wondered, since you had -- your research took you across the country and speaking with a lot of different kinds of law enforcement groups, I’m just curious outside of the state of Washington, has anybody else showed enough interest to really do some homework on it, are they looking at it seriously?

Yes. We were in Ohio, just last week. We believe the Sheriff’s Officer is going to be using it. We have also talked to Boston. We have talked to people in New York. No, now we’re not just doing Washington. I am concentrating on certain states. Again because if we can get a foothold in the state, then other agencies around it will be able to deal this, because literally what we do because we provide a server within one of those, and then other agencies wirelessly will hook into their server. And I am talking a little bit of the technical thing here, but what I am trying to say is, you probably will see us getting into a state and then put more emphasis into growing other agencies within that same space as opposed to this randomly going all over. And as we do this, we’re going to have to grow our sales force within these states. And then again, that’s a good thing. I am very jazzed about this -- I didn’t answer Joe’s question properly. He talked about margins. Yes we have very high margins on this. We’ve sunk all the costs upfront. The technology, and how to convert a image to a camera into a barcode, that’s what we had to do. The software, all of the patent protection, all of the drivers’ license, to all of the software for the interstate into a state switches, all of the encryption and protection, so that we can do it safely. All that had to be put in there as well as all of the testing. And I did. The focused group included John Hopkins University which is graduates more piece of police than any other university in the country. Their Dean of the Public Safety Group…

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time and thank you for your participation.