Greetings and welcome to the Intellicheck Mobilisa First Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation (Operator Instruction). As a reminder, this conference is being recorded. I would now like to turn the conference over to Ms. Sharon Schultz, Strategic Communications Advisor for Intellicheck Mobilisa. Thank you. Ms. Schultz, you may now begin.

Thank you, Operator. Good day, good afternoon and welcome everyone. Thank you for joining us today for our 2015 first quarter conference call to discuss Intellicheck Mobilisa's results for the first quarter ending March 30, 2015 and to discuss other business developments. In a moment, I will call upon our CEO, Dr. William Roof, 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’d like to 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 within the Securities and Exchange Commission. Management will use financial terms in today’s call. Please refer to the Company’s press release issued this morning for further definition of in context for use of all terms. I would also like to take a minute to review…

Thank you, Sharon. Good day and welcome to the Intellicheck Mobilisa Q1 2015 earnings call. Today we will present corporate earnings information for the quarter ending 31 March 2015. After the call, we will answer questions from shareholders. Intellicheck Mobilisa’s directors and officers present today are Admiral Mike Malone, Chairman; General Buck Bedard, Director; General Jack Davis, Director; Mr. Guy Smith, Director; Mr. Bill Georges, Director; Mr. Bill White, Chief Financial Officer; Mr. Russ Embry, Chief Technology Officer; Mr. Bob Williamsen, Chief Revenue Officer and myself. Our Chief Financial Officer, Bill White will now review the Q1 2015 financial results. Bill?

Thank you, Bill and a 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, 2015 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, 2015 were $987,000 compared to $1,092,000 for the previous year. Identity system revenues decreased $928,000 compared to $1,074,000 and wireless revenues increased to $59,000 compared to $18,000 last year. Booked orders for the three months ending March 31, 2015 were approximately $791,000 compared to $1,095,000 for the first quarter of 2014. Our gross profit was $595,000 for the quarter or 60% of revenues compared to $729,000 or 67% of revenues for the first quarter of 2014. The decrease in percentage is due to fewer defense ID system contracts. Operating expenses, which consist of selling, general and administrative and research and development expenses, increased to $1,922,000 from $1,639,000 last year. Adjusted EBITDA for the quarter ending March 31, 2015 was negative $898,000 compared to a negative $710,000 in the same quarter last year. The Company posted a net loss of $1,302,000 for the three months ended March 31, 2015 compared to a net loss of $910,000 for the quarter ending March 31, 2014. As of March 31, 2015, our backlog which represents non-cancellable sales orders for products not yet shipped and services to be performed was approximately $292,000 compared to $358,000 last year. Interest income and expense were negligible and the Company has a net operating loss carry forward of approximately $44 million. Now I’d like to focus on the Company’s liquidity and capital resources. As of March 31, 2015, the Company had cash…

Thank you, Bill. Today we will report a progress since our last report six weeks ago. We are making solid progress, and the entire Intellicheck team is extremely optimistic and energized about the Company’s future. In Q4 2014, we set the Company’s strategic goal of market leadership with world-class products and sustainable profitability. This goal drives all that we do each and every day. The September, November and March 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, our new ITIL certified customer support manager is fully onboard and making enhancements in our customer support processes. We are preparing to implement a service now infrastructure and look forward to developing customer support metrics that will form the baseline for continuous process improvement as we move forward. To accelerate our product development in support of the quicker time to market, we hired a software development outsource firm that will support casual development processes, enhanced product management, more detailed engineering documentation and provide engineering surge for those times when we are required to provide quick turnaround software in support of revenue growth. We have entered into a detailed expense reduction evaluation stage with results and recommendations reported to the board earlier today. Markets, we are strategically focused on market segments that will yield the highest returns, including retail, law enforcement, hospitality and defense. We are in discussions with a number of law enforcement agencies of all sizes and capabilities with a goal of rolling out our law enforcement ID product in support of a wide range of law enforcement missions. We are in discussions with a number of alcohol control organizations, both private and governmental, to create partnerships that accelerate the…

Thank you, Bill. Thank you again for joining us today. We are now going to begin the question-and-answer period. You have heard the rules governing the call rest of this afternoon. We’ll begin with our first caller.

Thank you (Operator Instructions). The first question is from John Bendall of JBC Partners. Please go ahead.

This is I think my 28th quarterly call and if any of you’ve seen the film Groundhog Day, it sort of reminds me of what we go through every quarter. It sounds good but implementing some of the strategies never seems to come out the way that we are led to believe. What I’d like to propose, given the fact that we’ve had the founder quit a quarter before he said that he was going to turn the Company around and that the former President was -- I think he was fired because he sold his stock at a high, and a very expensive public relations for almost [indiscernible], I think we would like to see and I’d like for people on this call to support me. I think we have a very good board of directors, certainly two that will do the right thing. But given the fact that the cash, what we calculate is the carry forward and the patents we estimate the stock to be -- Company to be worth at least $3.50 a share. And what I would like to after eight years or so as a holder and seeing a lot of dilution and this-that and whatever, I would like for the Board to do what I think the right thing is and to look into having the Company sold. Again, given what is on your balance sheet, and your patents, $3.50 to $4 of stock could be worth. And I’d like for you perhaps to rather than say thank you for your comment John, I’d like for you to say a little bit more why you have it, because we have not been given what I call any type -- not only appreciation, but dilution and dilution. Once again I applaud your Board. I think if it wasn’t for two members of that Board, we might be in more shape than we are. So if I sound disappointed after eight years and seeing a higher [ph] adjusted for somewhere in the teens, I think shareholders have a right to get even. Thank you.

Thank you Mr. Bedall. This is Chairman Mike Malone. I appreciate your comments. I acknowledge your sense of direction for the Company, and the Board will take it under advisement.

Thank you. And our next question is from Ryan Nelson of Special Situations Funds. Please go ahead.

It’s actually Alex Silverman on for Ryan. Bill you walk through the update for the technology for a number of your end markets. Wondering if you can give us a little more detail on what some of the new launches look like?

Sure Alex. Thanks for your call. We launched our age identification product that has been completely redesigned and rebuilt last Friday. The look and feel, a higher level of software security to keep the hackers out, and we’re launching it through channel partners wherever possible. That’s a little bit different than what we were doing before. The law product will be launched fully operational this month. It is a complete redesign, a new feature set, new interface, new capabilities to interface with different data sets that customers may want us to interface that we haven’t done before. So what you have essentially are two brand new products. They have a higher level of security, brand new interfaces that have customer inputs. So this is an interface we can use versus this is an interface we can’t use. So I hope that answers your question Alex.

And your go to market there would be through both partners and through both [indiscernible] and direct?

Yes, we’re growing both routes direct and through partners. We’ve got channel partners identified right now and we’re in discussions with them and we feel optimistic that we’re going to be moving forward with some of these folks, and as well as we have a seasoned and trained and experienced sales force right now who know how to close deals, and know how to work with customers on the value propositions they expect. So we’re very, very happy with the way things are going. We’ve been very busy over the last six months and we think we’re starting to see some real progress.

Can you walk us through a bit. You’ve obviously had to bring on or rebuild the sales force? What’s the number quarter carrying today and what’s the plan in the relatively near to medium term?

Alex I’ve got Bob Williamsen here, I am going to ask Bob who you’ve met before.

Alex hi, it’s Bob. Thank you for your questions. It’s good to hear your voice again. Currently, I apologize, I’ve got a bit of a cold here. We’ve got four sales reps, very seasoned, very experienced that are out selling directly. We will look to expand the sales team as we start to develop these other markets and get a little penetration in the retail sector more deeply than we are currently as well as the law enforcement sector. So as we go to market with the products that Bill just talked about, we’re introducing, we’ve got the team in place that can get us there. But as soon as we start to get some scale and some momentum, then we’ll start to ramp the team that we have currently.

And then just to touch on retail, what you just mentioned can you give us any further updates on how discussions are going with both new retailers as well as existing retailers for rolling out more doors?

So retail we think is a really big market as we’ve talked about previously. We’ve had some great meetings over the last 120 days. We’ve been travelling around the country talking not only to existing customers but a number of potential new customers. As you know we’ve pivoted the Company into a different pricing model, Software as a Service model. We’ve actually gotten very good feedback, very strong feedback there. We also announced kind of our first new retailer under that relationship in Helzberg Diamonds, and what I can tell you is based on the product feature sets that we’re developing now, and our new approach, the comments and feedback so far are pretty encouraging. So we’re very optimistic. And again we expect the retail market to start to get some stronger traction later in this year and in 2016.

Thank you. The next question is from Dennis Van Zelfden of Brazos Research. Please go ahead.

First off, just a quick follow up on the question just asked. I think you said you had four sales people. That doesn’t seem like a lot. Are there any holds in there?

This is Bob again, great question. We don’t think so, currently at this point in time, the way we’ve got the team organized geographically and by segments, we think we have more than sufficient coverage. And what we need to do is start to get real penetration into those markets. And once we start to do that, and we’re validating exactly the approach, the pricing models, and the terms that are meaningful for these retailers and for those in the law enforcement space, then we’ll start to add additional sales people. As you might imagine, we’ve already built a bench. We’ve got a number of experienced professionals that we’ve known over the years, that we continue to talk to and look to for potential additions to the team. But we don’t want to go add teams until we’re really ready to start capturing the market because we don’t want to incur expense unnecessarily.

Okay, I’ll get to my main question then. I was wondering if someone there could give us an idea or to put into perspective the amount of business that is kind of sort of in the relatively near term pipeline. I don’t mean like three years from now, but maybe in the next two years. So that we just have an idea of what you’re working on in terms of dollars if you could? I’ve seen the slide shows. I’ve seen the addressable market. But something a little more narrower than that if you could?

This is Bob again. So obviously we don’t do forward looking projections. We continue to have the sales team that we just spoke about in the field working on new opportunities. We continue to expect that they’ll grow the pipeline and the opportunities and obviously as we have wins you will hear more about those.

Okay, one last question again regarded to that. In terms of timing, rather than telling me how much you’re going to do or give a projection, would it be reasonable for us to see some meaningful growth this calendar year?

I think it would be reasonable to see some measurable progress this calendar year, probably towards the end of the year, real measureable progress and doing the things we say we’re going to do. You’re going to see in channel partners added, you’re going to see new customers we expect and we anticipate that will be using our software as a service model. And so the things that we said we’re going to do, we expect to see measurable progress in that this year.

Thank you. The next question is from Kevin Gruneich, a Private Investor. Please go ahead.

Unlike Mr. Bendall this is my first quarterly conference call. So if these questions seem like they’re coming from a lay person, they are. I see that your stock comp in Q1 went up dramatically, and that’s not a surprise, given all the new executives coming on. But is that a run rate that you expect will persist going forward? Should we expect stock comp to be in the neighborhood of $350,000, $400,000 this year?

No we don’t expect to see that this year.

It won’t be that high?

We don’t expect that.

And then just a second question on the directors, and again I defer to Mr. Bendall on how well a couple of the directors have performed. I note in the proxy and this -- you lost two directors obviously last year. But if you were to have directors full time during the year, the bill for directors would have been all in the $400,000 plus, almost $500,000 range for just cash. And if you throw stock rewards and options on top of that, it would be significantly more. This is a big, big, big number for a small, small, small company. And I was just wondering what the history behind that and is that something we should expect will persist?

This is Chairman Mike Malone. The CFO is telling me -- what’s the number 320, the cash or total. The total compensation for the directors is $320,000. At the moment the directors are taking one half of their compensation in some form of equity, whether it’d be restricted stock, stock options and one half of their compensation in cash. The previous year compensation was one third cash and two thirds equity. So the directors have skin in the game as well. I don’t know what numbers you’re quoting but they’re not the numbers that I understand.

I would say that $300,000 plus number may be accurate for last year if you count the fact that you lost two directors and they’re not included in those numbers. But those are -- that's just the cash number. I would also note that in looking at the proxy, it shows director ownership of the stock at 1.9% of total shares outstanding. Most of that is options or stock rewards. If you were to strip those out, the director ownership would only be 0.6%. So that doesn’t seem consistent with having skin in the game. I would say that I applaud the management for being aggressive these last several months. I think you’ve got an Everest to climb to, to re-launch this Company but the proxy will point to a Company that’s run for its executives and directors, not the shareholders. And with two stock offerings the past year and more possible given your $25 million shelf registration, I think you should consider more shareholder friendly moves.

Thank you again for your comment. I can only reiterate that the annual total compensation for the five directors is $320,000. The fact that we lost two directors last year does not affect that because we’ve brought two more on at the same time. So, I would refer you all to our annual statement to validate the director’s fees.

I would say read the proxy and that number, even if it was $320,000 is very large for a Company this size.

Thank you very much for your comments.