Greetings, and welcome to the Intellicheck Fourth Quarter and 2017 Yearend Earnings Conference 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, Gar Jackson, Investor Relations.

Good afternoon and thank you for joining us today for Intellicheck fourth quarter and yearend 2017 earnings call. Before we get started, 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 of any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances, and the company undertakes no obligation to and expressly disclaims any obligation to update or alter its forward-looking statements whether resulting from such changes as new information, subsequent events or otherwise. Additional information concerning forward-looking statements is contained under the headings of Safe Harbor Statement and Risk Factors listed from time to time in the company's filings with the Securities and Exchange Commission. Statements made on today's call are as of today, March 22, 2018. Management will use the financial term adjusted EBITDA in today's call. Please refer to the company's press release issued this afternoon for further definition, reconciliation and context for the use of this term. We'll begin the call with Bill White, Intellicheck’s Chief Financial Officer who will discuss the Q4 and full year financials. We’ll then hear from Bryan Lewis Intellicheck’s recently appointed Chief Executive Officer. Following their prepared remarks, we will take questions from our analysts and institutional investors. Today's call will be limited to one hour. I will now turn the call over to Bill White.

Thank you, Gar. 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 fourth quarter and fiscal year ending December 31, 2017 that we released a short while ago. We anticipate that our Form 10k will be filed with the SEC later today. I'll begin with our fourth quarter results. Revenue for the fourth quarter ended December 31, 2017, grew 32% and $968,000 versus $734,000 for the same period last year. Our Software as a Service or SaaS revenue was approximately $569,000 for Q4 2017. It's more than doubled from $277,000 in Q4 2016 and with a 9% sequential increase versus approximately $520,000 in Q3 in 2017. Gross profit as a percentage of revenues improved to 89.4% for the quarter ending December 31, 2017 compared to 80% for the quarter ending December 31, 2016. The increase in percentage was -- in 2017 is due to higher revenues on our SaaS product and less equipment sales that typically have a lower margin. Operating expenses consist of selling, G&A and research and development expenses and an impairment charge to our intangible assets. Excluding the one-time impairment charge of $1.4 million and the severance agreement for the Former CEO of $0.5 million, OpEx was $1.9 million for the three months ended December 31, 2017 versus $1.7 million for the three months ended December 31, 2016. The increase in OpEx was primarily driven by legal fees and engineering consultants. The company posted a net loss of $2.9 million for the three months ended December 31, 2017, compared to a net loss of $1.1 million for the quarter ending December 31, 2016 and net loss per diluted share was $0.19 versus $0.10 in the prior year. Adjusted…

Thank you very much, Bill. I'd like to thank you all for joining us today for my first earnings call as CEO of Intellicheck. I will start by saying how excited I am to lead the company and monetize this great technology that can be utilized across a number of key vertical markets. But before I begin with my findings after my first month here, I want to share with you why I chose to join Intellicheck, my background and what makes me fit for this position. The main attraction of Intellicheck to me was the technology and the people that I met through the interview process. We’ve created a phenomenal core technology with broad applications and a very large addressable market. The obvious problem with the Board was concerned with was the pace at which the company was able to monetize its great technology and drive growth. Board decided that the next CEO should bring in sales and marketing focus to the team and they have the ability to drive growth for this great product. I started my career in sales and have been running global and national sales teams for over 25 years. Most of my experience is in selling enterprise SaaS solutions in the trading and risk management space. So, I understand the complexity of the selling into the banking world and I understand the public markets being data driven and focused on analytics to make forecasts and business decisions. Obviously, our ability to accurately forecast and close sales hasn’t been good and we'll be evaluating the reasons why? Adapting our business model and driving improvement. Most recently I was the CEO of a global primary research firm, where I oversaw 53% compound annual growth. During my tenure and drove a reduction in cost of sales by…

Thank you. We will now be conducting a question-and-answer session [Operator Instruction]. Our first question comes from Tanner Hoban, Oppenheimer & Company. Please proceed with your question.

Hi guys and good afternoon, Brian. Congrats on the new opportunity. On the last call, you expected pipeline closures to close primarily during or be pushed back to one to second quarter. I'm wondering if this still seems like the progress that Intellicheck is going towards or are these being pushed back slightly a bit more?

I'm not sure that I follow the questions. This is Bryan. Thank you. Talking about something it was mentioned in the third quarter call?

Yes, yes. So last quarter on the call it was mentioned that some of the deals were being pushed back about a quarter or two into the first or second quarter of next year. I'm wondering if this still seems like the progress that Intellicheck is making towards closing the pipeline deals or if there is potentially any further pushback on these deals?

I think one of the things about, we are hunting in a way and when you're doing enterprise -- large enterprise sales sometimes they speed up, sometimes they move fact. One of the reasons that I want to make sure that we have a much fatter pipeline than we currently have because we've had some people come in faster than anticipated. And then we also have people who for technological reasons might get pushed back as well. And I can't say we had one of our prospects who has entirely has decided that they want to reevaluate their entire point of sales system, which is -- that is integral to what we do. That means we get pushed back with their ID, I think it goes both ways.

Got it. And also, on last call it was -- there was some EBITDA sort of guidance ending the year at least in the last quarter, ending the year with positive EBITDA. Wondering if there's anything changed on that as you begin the transition with your new sales team initiatives?

Well, I guess being here about 30 days, I'm still analyzing all of that and I have a lot more to say about it and that next Q1 call.

Got it. Thank you.

Thank you.

[Operator Instruction] Our next question comes from Mike Grondahl, Northland Securities. Please proceed with your question.

Oh yes. Thank you. Hey Bill and welcome Bryan. Another follow-up question from last quarter that, there was a large potential electronic store customer that had slipped from October to the early April timeframe I think. How is that customer looking?

Yeah. Large electronic store customer last quarter...

Mike, that is still in process, nothing more to report on that.

Got it. And then Bryan on the sales side and the engineering side, earlier we were kind of -- it was conveyed that IDN was looking for about five or six maybe sales people and maybe seven or eight engineers. Is that still something, we should be watching for and kind of what progress had been made in kind of both of those targets?

Yeah, I would say that I'm working closely with Paul to make sure that we right size the sales force. We hired what we really need. And I don't have the exact number now, but I know it's not what we have today. I can say that starting Monday we have somebody new coming on Board to help us focus on the Law ID product. And I also can say that we've slowed down the hiring before I started, so we can make sure that, it fit in with the plan that the new CEO being me, would have in terms of our strategy going forward. In the technology side, yes, we are still hiring. I think, if you talk to anybody you're firm or any firm I have ever worked at, hiring technology people tends to be one of the harder things to do. You currently have engaged a couple of search firms that are helping us with that process. But we know that we need the developers and we're going to hire them.

Got it. And then how would you -- as it fits today Bryan, how would you describe what's under pilot currently and what sort of in the pipeline to turn on?

Maybe see if I have follow the question. So, what we have about to go into pilot, what is in pilot and so what is that I am just kind of zero in on your question?

Yeah. Well hey, on prior calls there was always sort of this bucket of, here's what we have in pilot. We've never lost a customer. Everyone loves this product and as those pilots finish up, they represent X amount of annual revenue. So, I guess I'm just trying to get a feel for what's in pilot today and what can they represent, if the pilots go well? And are there any that have completed a pilot recently that are about to go live and how do we think about the next few quarters basically?

The one thing that I'm happy to say is that pilot pipeline is very useful and very robust. I can also say that we haven't definitively ever lost a pilot still to this day. However, they do move around. So, and -- very successful pilot, the company would say wait a minute, we are going to change one of the sales system. So that got pushed out a lot farther than we would like, but that's part of what we need to do is integrated to that system. I also do not have in front of me a dollar amount of the pilots. But again, what I would say is one of the things that I want to get our sales force to in our company is a much heavier pilot pipeline than we have, knowing that, when you're doing something enterprise wide, it can move both forwards and backwards. And the larger the pipeline is, the more likely you're going to have things that move up or stay the same. But there really seems to be some slowdown with installing an enterprise product. So that's why we need to get more in our pipeline. It is very healthy. I'd like to see it bigger.

Let me ask a follow up to that Bryan, the pipeline obviously you described it as very full, robust, healthy. If a year from now, if things go as you want them to go, would you expect the dollar value in the pilot stage to be 20% bigger, 50% bigger. What level would you like it to be down the road relative to today?

I am still analyzing right now in a way what has been the speed of our pipeline? So, know the milestones that we need to do to get a pilot close. So, I would expect it will have a lot more better answer for that next meeting that we have. As I said in the beginning, I am a very analytically-driven person. I do think that in sales there is a lot that you can do to predict better by looking at what we’ve done in the past. And then you can also speed it up by looking at what will be done in the past because you could figure out where we made mistakes, where we could set things up. Without having those numbers to know exactly what the pace of the pipeline has been in detail, I couldn’t say whether it needs to be 20% greater or 100% greater. All I know is that we're capable of doing more than we are doing today.

Got it. And then one question maybe for Bill. Bill, in regards to the Honeywell settlement, you've kind of said that's confidential. Will we see any disclosures in the 10-K about that settlement?

No. You won’t. Well, just a brief basically parroting what we've said in the press release Mike, that we did settlement, but that’s a little more color than that.

Okay. And can we derive that it was immaterial to you guys from that I mean I guess, I'm trying to think through if it was material, if you got X-dollar amount. would you have to disclose that?

Just in general Mike, material matters have to be reported in general.

Okay, great. Well hey guys I'll look forward to mid-May and get a little bit more data and kind of insight in the progress, so thank you.

Thank you.

Ladies and gentlemen, we have reached the end of the question-and-answer session and I would like to turn the call back to Bryan Lewis for closing remarks.

So, I would just like to say thank you very much everyone for attending our Q4 and year-end conference call. I look forward to seeing many of you in person and speaking to you all again on our Q1 earnings call in May. Thank you very much.

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