William Roof - Chief Executive Officer Bill White - Chief Financial Officer Cheryl Schneider - IR, Dian Griesel Int'l

Greetings and welcome to the Intellicheck Mobilisa Fourth Quarter and 2014 Year-End Results. At this time, all participants will be in a listen-only mode. [Operator Instruction] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Cheryl Schneider with Dian Griesel Int'l. Thank you. Ms. Schneider, you may now begin.

Thank you very much. Hello and welcome everyone. Thank you for joining us today for Intellicheck Mobilisa's fourth quarter 2014 conference call to discuss its results for the fourth quarter and year ended December 31, 2014 and to discuss other business developments. In a moment, I will turn the call over to Dr. Bill Roof, CEO, to lead today's call and introduce the members of the Intellicheck Mobilisa management team who will be participating in the call. However before I do that, I will take a few minutes to read the forward-looking statement. 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, encourage 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. At this point I would like to turn the call over to Bill Roof, CEO of Intellicheck Mobilisa. Bill, please go ahead.

Thank you, Cheryl. Good day and welcome to the Intellicheck Mobilisa Q4 2014 and 2014 annual earnings call. Today we will present corporate earnings information for both the quarter and year ending December 31, 2014. As we are anticipating holding our annual meeting this year on May 6, or about six weeks from now, we hope to have the opportunity to answer shareholder questions at that time. Our financial officer Bill White will now review the 2014 Q4 and annual financial results. Bill?

Thank you, Bill and a good day to our shareholders, guests and listeners. I would like to discuss some of the financial information that was contained in our press release for the fourth quarter and year ending December 31, 2014 which we released this morning. We anticipate that our annual report on Form 10-K as well as our preliminary proxy statement relating to our planned annual meeting in May will be filed with the SEC later this week. Revenues for our fourth quarter ending December 31, 2014 decreased 19% to $1.1 million compared to $1.36 million for the same period last year. Booked orders were approximately $986,000 compared to $1.28 million in 2013. A key factor affecting our Q4 financial results was a goodwill impairment write down of approximately $4.2 million. In accounting terms, goodwill is defined as the amount the acquiring company pays for the acquired company that is deemed to be in excess of the acquired company's book value. This excess book value shows as an asset on the balance sheet and as part of our review we engaged a valuation company to test goodwill to determine the carrying value on the company's financial statements was equal to or greater than the fair value. After performing this analysis it was determined that the carrying value of exceeded the fair value and a non-cash adjustment of approximately $4.2 million was made to reduce the carrying value of goodwill on the company books. Our gross profit was $355,000 for the quarter or 32% as a percentage of revenue. For the three months ending December 31, 2013, gross profit was $889,000 or 65%. It is important to note that a non-cash adjustment of $330,000 in amortization expense was taken in Q4 to adjust intangible assets which were set up incorrectly in…

Thank you, Bill. What you just heard defines the challenges before us. Since October 1 we have worked diligently to identify and understand these challenges and we subsequently defined a strategy and planned to quickly and effectively address shortcomings of the past, and that we believe will put us on a path for long term success. We are extremely optimistic about our vision and strategy and we’ll share our progress with you today. In early October 2014, we began by defining a new company culture that focuses on employee engagement and breeds a self-starter attitude, innovation, respect, honesty and success. We planned and implemented a company restructuring in November that supported our strategic vision and removed barriers to success. We have travelled the country nearly every week since early October to meet with customers and business partners. As a result, we inaugurated a new era of mutually beneficial business relationship with a focus on economic synergy, respect, honesty and success. We concluded that the company's infrastructure was aged and insufficient to support growth so we began modernizing our infrastructure to position the company to compete and win in today's information technology markets. Over a period of many weeks, we met with current and prospective investors where we articulated our go-forward strategy for pivoting the company and positioning Intellicheck as a true leader in our space. The September and November addresses to our shareholders focused on five main areas, resources, markets, products, processes and intellectual property. At this point we will describe our progress in each of these areas. Resources. In December 2014 we hired a new Chief Revenue Officer, Bob Williamsen. Bob is a consummate sales and marketing leader and team player. He defines the five rights we require for this position. Those being, the right person with the right…

Thank you, Bill. Operator, I am turning the call back to you now.

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