Good day and welcome to the SuperCom Ltd Fourth Quarter and Year 2014 Results Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Robert Fink from Hayden IR. Please go ahead sir.

Thank you and good morning everyone. Thank you for joining us today for SuperCom’s fourth quarter and full year 2014 earnings results call. Joining us on the line are Arie Trabelsi, President and Chief Executive Officer; Simona Green, Chief Financial Officer; and Ordan Trabelsi, President of SuperCom North America. Our press release detailing the results crossed the wires at approximately 9:15 AM Eastern Time this morning. Following comments by management, we will open up the floor for questions. In addition, we encourage you to visit the Company’s Web site for further information regarding solutions, services and products. Before we start, I’d like to point out that this conference call may contain certain projections or other forward-looking statements regarding future events or future performance of the Company. These statements are only predictions and SuperCom cannot guarantee that they will in fact occur. SuperCom does not assume any obligation to update that information. Actual events or results may differ materially from those projected, including as a result of changing market trends, reduced demand and the competitive nature of the security system industry, or due to risks identified by the documents filed by the Company with the Securities and Exchange Commission. In addition, following the Company’s disclosure of certain non-GAAP financial metrics in today’s earnings release, these non-GAAP financial metrics will be discussed during this call. Such non-GAAP metrics are used by management to make strategic decisions, forecast future results and evaluate the Company’s current performance. Management believes that the presentation of these non-GAAP figures help investors understanding and assess the Company’s ongoing core operations and prospects for the future. Unless otherwise stated, it should be assumed that the financials discussed in this conference call will be on a non-GAAP basis. A full reconciliation of non-GAAP to GAAP financial metrics is included in today’s press release. At this time, I would like to turn the call over to Ordan. Ordan, the call is yours.

Thank you, Rob. Good morning everyone. I’d like to welcome you to our fourth quarter and full year 2014 earnings conference call. I am pleased to report that during the fourth quarter and throughout 2014, we continued to execute on our long term growth strategy. It has been our goal to strengthen expand our EID business in order to accelerate growth while developing two additional divisions, the M2M IOT division which leverages our legacy RFID technology into an innovative fully connected fleet of solutions, and the M-Pay secure financial services division, which offers a new suite of secure mobile payment solutions which work on any mobile phone and point of sale to allow mobile payment ubiquity. I'd like to begin my prepared remarks with a high level overview of the full year and fourth quarter results. Then I will turn the call over to Simona Green, our CFO, who will review the financial results for the quarter and year ended December 31, 2014. Following Simona’s review, Arie will provide closing statements and open the floor for questions. The overall EID market continues to grow, and the addressable market that we have previously discussed and focused on, developing countries and international tenders between $10 million and $200 million represent a $1.5 billion per year segment of the general $12 billion EID market. This segment is experiencing very rapid growth, stronger than what we are seeing in the general market and the segments representing more developed countries. In 2014 we won more than $60 million in new EID contracts and generated $6.3 million in operational cash flow. The strategic benefits resulting from the acquisition of an EID competitor, the SmartID division from OTI in late 2013 has exceeded our expectations by far. In addition to significant cost synergies and added scale which…

Thank you, Ordan. I will now walk you through our financial results for the fourth quarter and full year 2014 compared year-over-year with the fourth quarter and full year 2013. Thereafter we’ll be happy to take your questions. Revenues for the fourth quarter 2014 were $8.2 million, compared to fourth quarter 2013 revenues of $1.9 million. Revenues for the full year 2014 were about $30 million compared to full year 2013 revenues of $8.8 million. I will be presenting the rest of the financial results on a non-GAAP basis, which excludes the non-cash income tax benefit we had in 2013, other note-related expenses as well as amortization of software and IP and customer contracts, considerable assets, which were created as a result of the acquisition of the SmartID division in December 2013. For a full reconciliation from GAAP to non-GAAP numbers, you can refer to the press release we issued this morning. Our gross margin in the fourth quarter of 2014 was 71%, an increase over the 65.4% in the fourth quarter of last year and slightly below the 76% margin in the third quarter of 2014 due to the contract implementation. On a full year basis, our gross margin for 2014 are 75% compared to 78% for the full year 2013. Please be reminded that the shift in gross margin relating to the proportion of the revenue it is recurring and the portion which is derived from new contracts. The recurring element tends to be at a very high gross margin, while new contracts and initial installations tend to be lower gross margins. On a normalized basis, we expect our gross margin to trend around the 70% mark. Operating income in the fourth quarter of 2014 was $2.5 million or 252% of revenues compared to an operating income of…

Thank you, Simona. Before we open the call for questions I would like to reiterate our outlook for the year 2015. For the full year ended December 2015 we expect revenue growth to exceed 40% or $42 million on a year-over-year basis. Additionally we anticipate non-GAAP EPS for the year 2015 to exceed $1.2 per share. As Ordan already indicated earlier on the call, we are optimistic about SuperCom’s future and based on our success in 2014 and our constant ability growing we are ready for a strong 2015. I would like now to open the call for questions. Operator?

Thank you. (Operator Instructions). And we’ll take our first question from Saliq Khan with Imperial Capital.

You've been incredibly successful when it comes to doing more in the emerging markets and having you here in the United States, particularly here in the New York area obviously is a great benefit for your Company. Can you talk a little bit about the strategy and what that essentially looks like for your growth here in the United States?

Ordan, I think it’s a great question for you.

So we have three different segment divisions that we focus on, in EID, M2M and m-Pay. EID we currently focus mainly on developing countries and also a lot of our track record and experience is also the segment that’s growing very rapidly in the general EID market. It's not to say that our capabilities would not allow us to also do projects in the U.S. and developed countries. It’s just with the competitive pressures and landscape different. So that is less of course current focus. But in the M2M and IOT and the payments division, the USA along with South America and other areas of Europe and Asia have a competitive landscape which is very well suited for our capabilities and our offerings and we are looking into these markets as well. Specifically in the public safety space we brought a veteran, a Jason Gilbert who has excessive experience in the tracking of vendor solutions in the United States and he's overlooking the strategy of sales through this region.

So kind of building upon that same question is that you guys have had and you've kind of mentioned with the higher [indiscernible], you've had a pretty successful past of higher competitors -- hiring away from competitors actually. What essentially does the training look like for your sales reps and the exact same time is there a verticalization process that still forces employees to make sure that they win bigger clients and more clients on an ongoing basis?

To your [indiscernible] the first part -- what sort of sales rep, I apologize, I didn’t hear you well.

You guys have been pretty successful in hiring away from your competitors. What does the new training look like for the sales reps and also from a under internal mandate that you might have or the opportunities that your sales reps see, is there some sort of vertical that they’re approaching first and then segmenting it and then going after the second and third one, to make prior [indiscernible]….

First of all, I mean, general [indiscernible] competitor, we are looking to address people or companies that can join and as I said regarding the companies. The second we are already allocated three vertical market capability that we have a very good solution program and we are competing in that. And we are not going to get this quality or strategy and I would like to leave it at this.

And the other question I have for you guys just two ones, one of them being is -- with the increase in the RFPs that you guys are seeing and particularly also in the bidding process from your end, what does your win rate look like when you actually do bid on an RFP? Are you able to kind of talk about that?

In general, as we mentioned earlier, we believe that our winning rate is going from year to year and we expect that we [indiscernible] two to three winning for our office portfolio.

And the last question I had was particularly in regards to the super payment option that you guys had, clearly there is a huge need for rest of the marketplace, particularly as they look at the increase in the information of things and the IOT space. What is your response to those people that are saying why would an end user not use something like an Apple Pay or Google Pay and why go with a solution like yours?

Ordan, I think it's again a question for you.

That’s a great question. There are many mobile payment solutions. You've noted a few such as Apple Pay, which works largely as iOS 6 and iPhone 6 with NFC capability and we have NFC readers around the region where you work. The problem with that like other solutions is that it requires NFC hardware both on the phone and the point of sale and currently in the world, you try to find the regions where everyone has NFC on their phones and not the point of sales support that. So that's a big hindrance to the development of the mobile payment. Our solution in a different way allows mobile payments for any single type of mobile phone. You don’t need any NFC hardware. Any additional special hardware works under the 2G phone, the future phones as well as the iPhones and the Android phones. And on the other side it also works on all the point of sales. So if you [indiscernible] or tablet or smartphone it will support our SuperPay technology. So by allowing solutions through software which works on all mobile phone and our point of sales, we can go to any region around the world and offer mobile payment ubiquity because now we can offer something that end user and any merchant can use and there is no hindrance in terms of hardware and a lack of capability to support the technology.

We'll take our next question from Brian Abrams with Lazarus.

Let me start with just major contracts and the last major new contract win I think was back in August. Can you talk about the sales pipeline a little bit more and are you discouraged that the Company has been able to close major new contracts since August and there is still -- what do the months or quarters ahead look like?

Thank you Brian. First of all, as we said I think in the last quarter, we [indiscernible] for contract that below $30 million and not announcing that just chance from a in. So right now we have a few large proposals out there. We are very close to have a large contract awarded in November, December, which we believe was just a delay, and we believe that it should be somehow confident in the user in just 90 days. But we are ready for that with our improvement in software. And right now as I look at our pipeline proposal opportunity, it's just amazing and we see a large amount of opportunity in EID, India, M2M, and also on [indiscernible]. So I'm very excited about the potential we see in the vertical markets. As you know we added the cyber security capability during the fiscal 2015. So when we say we believe that we have great years of 2016, which over 42 million of revenue and $1.2 EPS, you can be slight confident that we have all the information in hand to support these numbers we believe revenue and margin. So I believe that in the near future we will be able announce some contracts that are larger in the $7 million attritional in the market.

And to your point on the outlook, the guidance obviously is encouraging. I assume it's on the conservative side of things. Can you give us a sense for what the bulk case might be? What is the upsize if you see the expectations?

As you know our markets, because there are very large proposal out there that comes in $200 million. So the upsize can be huge. If our company would be able to order that with our contract, our revenue can double from the number that we just expected. Now we cannot talk about a number but if we were in one of the contract the number is going to be completely different both in revenue and in EPS number. So we are very optimistic also on the upside.

Small things add on. We are progressing well in large and small contracts. In many ways we see same level difficultly in winning either. So we are progressing in the senders very well and it gives us a lot of belief that some of these big ones could be a nice surprise as well.

I think it's important to say the fact that we have a broader ability both in the m-Pay, cyber security and M2M together EID has been [indiscernible] right now where we contact government as a public against we have more to offer to our customers and it's increasing our proposal or opportunity, increasing our ability we're seeing in this country.

And in terms of timing, do you have an idea of when you expect these other new contracts or new businesses to hit or ramp up, or it is something that could just happen any time that’s hard to predict?

When you deal with governmental agency and when you deal with some of the public expansion, they have their own time to make the decision. But sometimes it takes longer but I will not be surprised if it will have won award in the next four weeks. So it is greater than that. So I view that more to concentrate on a year revenue or look at year over year because, it may be a fluctuation on quarter but still we may be announcing the last contract in few weeks. It would be awarded. And there is not a lot of it before that.

We will take our next question from Josh Nicolaus with B. Riley.

So organic growth has been comparatively strong sequentially for the first three quarters, but Q4 was the sequential decrease, although still quite strong year-over-year. Given that there hasn’t been any contract towards pretty much through March, is that -- are we looking at a Q1 that's probably flat to possibly down as well on the top-line revenue? Are those still up year-over-year?

As I said, we -- in general we’re not going to provide -- we’re not providing a guidance from a quarterly basis. We have provided for the year. So we would like to remain with our policy and not talk about quarterly revenue or growth.

I would like to say generally though that when we deploy the contracts, there is different phases of the contract and we recognize revenues based on the milestones and progress that we've had in those quarters. It’s hard to specify what happens each quarter. So in Q4 it could have been more or less than there is no impact on the actual deployment of the project just what as it falls into our deadline. So we would like to look more at our annual basis when talking about revenues and project deployment recognition.

But as I mentioned earlier to Brian, our focus could have been $13 million or $14 million of revenue, we just contacted. We're ready be awarded [indiscernible] was awarded on time. We are ready for that. And that is going to impact and shift form a quarter to other and I will not be surprised if one quarter is going to be much higher number than the process in the 2015. So really I would like our investors to touch more on a yearly basis, which really more affecting our business other than on a quarterly [indiscernible] business.

And then looking here is I’m going to say that looking at the organic growth and the guidance, so if there's $25 million built into revenue from contracts won in 2014 and guidance for 2015 and some recurring revenue as well, it doesn’t a leave a whole lot -- there's not a lot of additional revenue guidance in there for two or three contract wins?

You are right. We do analysis and we are as I said very, very conservative on the number and it's going to be -- new contract, the number is going to be higher.

And then I was just looking here at the future earn-out payments. It looks like those have changed recently a bit. And then I was wondering what exactly has happen to hit those milestones where those earn-outs will be paid?

In general what we do with the earn-out is really a percentage out of revenue related to a contract opportunity being sponsored from OTI business. And the earn-out expectation that you see there is some of the calculations of what we expect from revenue point of view that are related to the OTI marketing division.

Last question from me is, I see there is a lot of restricted cash, like a bit over 5 million now. Unrestricted cash is bit under 5 million as well, and I was wondering any guidance on what size contract the companies would be able to rollout given its current cash situation?

In general I don’t think there is a limit. In general when we get a large contract, there is a part that is being cash in the advance from customers that allows to have a very positive cash flow on the contract. So we have enough working capital right now both in cash and other to support to get a $100 million of contract.

And then real quick, what exactly is the restricted cash balance increase for.

The restricted bank cash is directly the amount that we've taken advance from our customer and related to some guarantee and they are being deducted -- they are being released to free cash upon the completion of the milestone on the project.

Okay, so it’s similar to like a deferred revenue but.

Yes, I can say that after the debt of the financial part of this amount was already released.

And we’ll take our next question from Bob Schnell with Dougherty.

The question was just asked around Q4 revenues being down from Q3, but I thought I heard the answer somewhat around a contract that you had been awarded that was pushed out that causes revenues to be fairly less than our expectations. Is that accurate?

I know again the world's expectation is your work. In general I would like to say we’re always pushing to have a on a yearly basis than a quarter, but I would say we’re very close to applying that -- the first quarter would show [indiscernible] instead of the numbers [indiscernible]. You may see these numbers in 2016.

No, I guess the expectations I mean, just estimates that were out there for your Company.

For 2015, about the estimation.

When I said expectations I was referring to the earnings estimates and revenue estimates that were published by the [indiscernible] Company.

And we are not reselling to analysts' expectation of this this with our win-win -- with our guidelines and right now we cannot defer to analyst expectations.

That’s fair. In Q4 for revenues to be down from Q3, given the recurring nature of lot of your contracts and the large awards that you had announced earlier in the year, can you help me understand how Q4 has played out from a cross revenue perspective?

Arie, I can answer this one. There is a big part of our revenues, which is recurring because we’re in deployment of two large projects. There's also a big part which are from deployment. And there's many milestones in the deployment and some milestones take longer and some milestones are shorter. And so we’re working on a large milestone and do not finish by the end of the quarter. We can recognize the revenues for it. So then it just moves from quarters to quarters.

Okay.

That’s why these things happen.

We’ll take our next question from John Rolfe with Argonne Capital.

It seems like folks are -- a number of folks are struggling a bit with trying to figure out how contract announced revenues flow into the quarterly top line quarter-to-quarter here. So let me try it one other way. Between February and August of 2014 you announced a total of 54.5 million of new contract wins and you’ve given some broad guidance including on this call regarding how that typically flows into revenue and I think the number you gave was 75% or 60% in the first nine months, something like that.

The majority in the first nine months -- the majority in the first nine months with the deployment.

So if I look at that $54.5 million that was announced -- of new contract wins that were announced in 2014, can you tell me how much of that $54.5 million in new contracts was included in the roughly $30 million of revenues that you announced for the full year of 2014?

We don’t have the exact calculation here but I would say that the [indiscernible] is already in the year 2015 and going forward with this $5 million.

Let me clarify the numbers that we did share from that -- not from $54 million but from a full $60 million. $25 million is to be recognized in 2015 at least, when we gave our preliminary projection. The remainder of that, a large portion was in ’14 and there is some residual which is all into ’16 and forward.

Okay, so just so I have that right, of the 60 million total how much is going to be in 2015? $25 million?

$25 million in the first nine months -- in the first nine months of 2015.

We’ll take our next question from Walter Ramsley with Walrus Partners.

In the fourth quarter it looks like there were 3 million in orders. Was that from an existing contract or a new one?

From a different customer.

The Company currently focuses on Asia, Africa and South America. Could you provide a revenue breakdown as to what those three represented in 2014?

Okay, we will have all these breakdown in our 20-F to be filed shortly where I would say there’s been -- a majority is from Africa and South America.

Okay, the $42 million that the guidance represents for the current year, you just said that 25 of that is from existing implementation I guess those contracts. So the other 17, is that from new contracts that you are expecting or is that from something else?

Part of this is recurring revenue and the other from new contracts mainly recurring revenue and previous customer contracts.

Okay, and just finally I guess, the currency markets and the commodity markets on a macro level have been extremely volatile essentially starting in August when you sign those big contracts, and there has been an apparent correlation anyway between the lack of new business and all of this economic uncertainty. Do you think that’s had an impact on your customers or?

I would say that in general the government and product [indiscernible] service to government, but in some cases there are delays in contracted world due to some turbulence for example countries as well [indiscernible], based on oil. For example in some African companies [indiscernible]. But in general it only delays for a quarter or two, because those services are required in the state of development. So we do not see a received [ph] stock, mainly a delays or reduction in revenue for the next quarter.

So just a follow up on that, do you think that customers are taking kind of a wait and see attitude to see how the worldwide economy develops or what are they thinking in your opinion?

What we're estimating is because this area is an idea [indiscernible] need these kind of services. They cannot really -- and a profit on generating this kind of a yield, the condition. And so when I talk about new contracts for example, sometimes these kind of economy may delay in a quarter or two. There're are of this decision to make an award. By the end of the day they cannot really offset or come to this kind of world because it's required by the government to provide -- to the citizens -- also its major income generation for the government.

And we'll take our next question from John Roginski with Diversified Financial Group.

First of all, it seems to me that you are fairly cautious and conservative in your reporting. Would you say that would be a true statement?

I believe so, especially for our guidance.

Okay. I just wanted to point that out because I'm getting that reception that when you say something, if we can take it to the banks so to speak, and I think that’s what you wanted. Especially like I said the guidance going up for 2015, that’s important for next set of observations, and I'm talking from a shareholders perspective primarily, because I think that’s what we’re all really looking to see, is how is the share going to perform. And obviously on this news this morning the shareholders didn’t like what they saw for some reason and I'm trying desperately to discern that is. But am I incorrect in seeing okay, there is a 300% year over year revenue growth. There is 500% year over year income growth. 50% margin growth year over year, 400% non-GAAP earnings growth year over year, you've got clear visibility for 2015, you’re in a high growth sector. You're properly positioned to take advantage of that growth section. You seemed to be that making acquisitions that are wise for your purpose. You have got a minimum growth of 40% to 50% non-GAAP going into 2015. You're relatively debt free. You've got a high degree of recurring revenue which should grow. You have a rich cash balance. And you're quadrupled your working capital. You didn’t grow quarter over quarter however. So I'm trying to think of other than that fact why the shares are getting hit. Do you have any idea as to what you can see what might the reason? Is it in the perhaps the disconnect with shareholders? Is it a weak shareholders base? I'd like to see your material thoughts on that subject.

You described nicely our performance and thank you for that. The reasoning why the show is less not another is help me to stay back, I can just repeat what some other people are saying is and I believe this has to go there from [indiscernible] expectations, for the fourth quarter both in revenue and other and there will be people who are listening to them more than to us. And maybe this is disappointed. We as a Company and management are very happy with the results and we believe that the performance of the Company on the business plan is much better than we anticipated a year ago, and we did expect a size about the years going forward both from a product line, revenue pipeline and et cetera. So I can only repeat that we feel great about the two advance. We think current to the measure for that achievements and we often believe that in general we find out what we all see here in the Company and the share price will reflect our performance.

I'm glad that you say that because again from perspective of a shareholder and someone who advices other people on shares, there seems to be a disconnect as far as year over year performance is concerned. And I'm wondering how some of the expectations that were said by analysts were developed. I'm wondering because I've heard some members are $0.40 plus for Q4. And just from listening personally, I can't imagine how somebody would have come up with that. It seemed to be fairly obvious at least in the last conference call that that may not be the case. And I'm wondering who would you see your shareholders base being? Are we developing more relationships with other institutions? And do you guys plan on buying more shares for yourselves? Because I know there's a very, very small of trade shares with low flow. Do you think that has a lot to do you're volatility and do you think it might help you in the future.

I would say that if I would not be in the black hawk [ph] period, we personally have stopped [indiscernible] will be buying shares. But on the other hand, [indiscernible]. but definitely we are looking for royalty investors who believe that our companies that are looking for these kind of investors and we’re aiming to them and we believe that once all these investment funds will realize that company we are, you will see a shift there and probably the share price will affect you. And Ordan you can probably give some more color on that.

Yes, we have to remember that we just recently came back to the market. We're trending that customer market and the business that we’re in is in some way slow moving in terms of new contracts and new deployments and we had an base of investors which was a mix of retail and institutional and that we've been working on over the past year together currently with our IR firm, Hayden, brig on more institutional investors, more analyst coverage and help the investors out there understand the core of our business and the projections going forward and sort of the outlook]. We’re very open across investors and we’re happy to help whoever reaches out and to speak to them, but our main focus as managers of the company is on execution and our underlying belief is that as we deliver quarters that are continuously strong and we perform on our business plan, the stock will adjust to its appropriate value and investors sooner or later depending on the type of investors will understand that path through the numbers and through the financial results.

And we will take our next question from [indiscernible].

Hi, guys. So my question is a follow-up on the new contracts revenue recognition, a question that was asked before. So we said they were about $50 million of new contract and then you mentioned that about half of it will be recognized in 2015. So that means that the other half was recognized in 2014. That’s around 25 million. And that doesn’t cope with full year revenue of $29 million because I expected at a higher portion of $29 million relates to recurring revenue. So can you put things in order a little bit here?

Let me clarify, because I think I know what he's talking about. Out of $50 million, not $60 million, $25 million will be in the first nine months of 2015. It doesn’t mean that the rest of 2014 some of the revenues fall into 2016 and into the future, as also the last quarter of 2014. I think that’s gap that you are seeing in your calculations.

Okay. So some of it will be probably in 2016 and are you willing to tell how much of it was recognized in 2014?

We aren’t share that number specifically, but if you take the project that almost started in August, deployment alone falls into 2015. So there are revenues in the $60 million which continue and not only in 2014 and 2015. And furthermore we talked about 25 million in the first nine months. There's still the last quarter, which will have some revenues as well of 2015.

You'll see there are some related to a few contracts that will be fall in all -- as we head into first quarter to 2016, mainly it has to do with royalty or maintenance or contract data being pushed into 2016.

Then another question I had is about the timing of the recurring revenues. So how long does it usually happen after you finish the initial deployment? Does it takes place in immediately after or is there some time lag between the time of project completion and time of the customer approaching to you again and not follow-on or there is some recurring revenue?

That actually starts to happen into in intra-lease fashion, as for example if we’re deploying to branches of ID capability of printing, as some branches become ready they started to print ID cards, and as they are printing ID cards, it has already in a recurring steady state. So sort of seamless transition from the product implementation to the recurring revenue as actual system becomes operational introduction. So it does not happen in one day.

And to follow-on contracts?

Follow-on contracts? That depends what type of contracts…

ID and….

If we do more modules -- if we do did ID, then there is driver license and passports. That is the processes which we've done in the past. It could be drop implementation of the first module which can be asset implementation, it could be in a breaking between for a year. It’s all depends on the needs of the customer and how strong relationships are with that customer. So it’s a variety.

We will take our next question from Tony [indiscernible] with [indiscernible].

Could you explain the other expense production tips [ph] over 2009 project [indiscernible] at $1.1 million?

Yes, I would say there is a bet that that we decided just to [indiscernible] and it has to do with a contracts to the year 2009. It has large amount of debt on this customer and we were trying over the year to connect. And there's nothing that we've done in -- the business is business that’s visible from the year 2009 and we have to decide all the ways and actions to connect. We’ve decided this year just to do it. Nothing has to do with our current business or any other operations today.

Tony. That tough part of our core systems are integrated, nationalized E-Systems, which have to do with printing a core element of identification for the government. And in that case we have not seen and the industry realities, any bad debt or people that don’t pay because the government needs to run the system, they need to print more ID cards and so forth. Once in a while, while we’re supporting our customer, they ask for additional models, which aren’t systems which have recurring revenue element. It could be adding security cameras or other elements and so forth and they’re one off things that we sometimes do to help our customers. This is an example of one of the situations. That’s why it has the characteristics which can turn into bad debt as you seen here.

Okay, can you just talk about the income tax expense for the three months? It shows 1,600 -- 1.675 million?

The tax expense indicates -- was expanded in the fourth quarter based on some analysis but as I said, the full year earnings and this only -- its non-cash expenses of course. It’s only a deduction of the deferred tax asset which was recognized in the fourth quarter of 2013. It’s a non-cash expense as I said before.

So am I right to think that it shouldn’t have been put in the first fourth quarter? You just didn’t put it in previous quarters and that to put [indiscernible]?

No it depends from the company analyzes and we felt this now assumption, we analyze it regarding the assumption between being able to -- there is more deferred tax asset going forward and by the end of the year we decided that for the Israeli part, we’ll deduct it to the P&L.

Although have additional NOLs we have decided to be very conservative this time. We expect doing both quarter. We are going to analyze our NOL and tax assets end of the year again and we’ll expect to be more conservative and start to realize some of the tax assets.

Your ’15 earnings according to my calculations of $16 million plus next year and your balance sheet is great. Could you explain why the Company hasn’t done any buybacks or the company itself especially since you said that you don’t think you need any more cash to bid on contracts?

What you are saying is something that the Company is considering right now. Because we have a nice cash flow we don’t really need direct capital right now on and we don’t see a need for that. The company at this level is considering a buyback program for the year 2015 and we are probably going to announce a program like this in the next 12 weeks.

Could you tell us exactly how many bids you have out there and the size?

How many what?

Bids you have out there for contracts?

We have about [indiscernible]…

We actually have cut the way from sharing the specific metric of [indiscernible] bids, because we believe that it’s more valuable to understand how progressed you are in the bid and the size of the bid than the number of the amount and in order to not be misleading to investors we stopped sharing that specific number?

If I just mention one important thing, our pre-sale people are working very hard to try to answer all the large amount of opportunity out there and provide proposals to our customer around the world. So they are very busy here.

You talked about in the beginning about a 100 units. I'm not sure what that -- talked about 100 units to a 1,000 plus units of the 1,000 to 3,000 units. I wasn’t understanding what that was?

Those were public safety leg or tracking units. So it’s just in the past we would sell the actual chips to track people. Now we sell a solution. And the solution is priced based units and if you are deploying into accounting in the U.S. for 100 offenders, you would denote that 100 units. If you deploy something into the full country, deployment is going to reach 2,000 units or 10,000 units. So we’re looking at a variety of deployments, some small and some large which would utilize our full solution of public safety offender tracking, and typically in the market we see between $1,000 to $3,000 of annual revenue per unit. Sometimes it's even more than that but that’s just a general trend to understand, that we're talking about millions of dollars of recurring revenue from these contracts in the M2M public safety monitoring space.

Are you actively bidding on contracts for that now and what is the competition reflecting those?

In this market we believe, and again based on feedback from our customer around the world, we believe they are among the best solutions. Right now more than 15 open [indiscernible] standards around the world, mainly in Asia and Europe because that seem the U.S system for outsource and in collection programs and other. And right now we believe that on the bids that are out there and tenders out there, that we are in an excellent position to win some new contracts. What's good about these kind of contracts that are contracts both in for five years and almost a cash out in general what we have in EID. So we are very optimistic to be awarded something in these markets.

Are the margins similar to your '15 businesses?

Yes in this case I would say that margins maybe even higher after the initial set up.

We'll take our next question from [indiscernible].

Ordan, I was more curious about seasonality I suppose in contract bids. Granted there's some of the discussion about what was going on in EID. I'm curious if there is any noticeable seasonality in the way contracts are awarded -- bid and awarded and their differences in EID, M2M and m-Pay.

There is some seasonality at the times on different regions of the world. For example in South America, the two months in January, February are summer vacation and everything slows down significantly. In the same region you would talk about other holidays or other seasons of the year where to the government activity slows down. We just see less announcements. But there is around world and we look at a general sort of diversified the environment. So we kind of neutralized much of that. Arie some more insight on that. Arie?

I think in general it sounds like the other side of implementation in general in some of the countries generating passports and travel related -- the activity is higher in the summer then in the winter. So this will make some fluctuation in concerned role and have been used from generation platform. But I think in general to lead to our deal.

Are you confident enough to perhaps offer revenue breakdown in cross EID, M2M and m-Pay maybe towards the latter part of this year and maybe give us an idea of where you think recurring revenue will fall out as a percentage of total.

We have not done it yet but in the future we'll provide more detail about the drag down between end division and it goes up. While you see most of that in [indiscernible] coming soon.

We'll take our next question from [indiscernible] with Markets Edge.

I think you kind of already answered my question. But just to be clear does your current guidance include any of the anticipated contract wins that you have mentioned?

No.

And we'll take our final question from Debra Fiakas with Crystal Equity.

I wondered if you could tell us a little bit more about the RFPs. You mentioned in your opening remarks that you're seeing more RFP activity and I wondered if you could tell us what division? Is it principally EID business or this also on the IOT business?

Okay I will say that both division, be it the M2M and the EID are very active in reach bidding further around the world. And we see many bids out there, many cases we have to decide just to not bid on founder because they are either on low level. So there is a lot of activity on that. On the m-Pay business we are working in a different way. We are working directly with banks and some other financially group. So the way we will give is not produce. It's more in direct connection with the financial groups.

And also in your opening remarks you mentioned hiring new marketing personnel. I wondered if you could give us the number of your current employees.

Right now I think we have about 150 employees.

Okay. And then are you relying principally on the RFP activity on a direct sales to find new business opportunities or are you also trying to develop a network of strategic partners or marketing partners. And you could just describe a little bit how you are penetrating your various markets?

It’s a different between the divisions on the m-Pay we’re working with a joint-venture, given some other groups. It should be with a mobile carrier or events. On the EID we mainly work with government and lots of the contracts are being generated through tenders because we're talking about contracts and governments in general will publish tenders there. With the M2M on the public safety issue is more again -- because it’s governmental or public agencies going to tender, but on some other part of the M2M, we are working also in some collaboration with them and we've vouched with large groups especially in the retail market.

And then also I wondered in January you announced an acquisition of a small company, Cyber Security. I wondered if you could give us an update on the status of that deal in terms of closing and integration and also comment on whether or not that’s included in the $1.20 earnings per share for 2015 that you guided toward.

First of all, it's not included in the $1.20. Second is we’re of course closing the deal. There's some delays in our process but we are very close and we believe this is going to be closed in the next 10 days. The CEO of these companies are already working with us as the Vice President of Cyber and will be working together around the world providing a proposal to many governments around world. Together we are trying to increase the security of our product and solution. And we’re very excited because many companies' governments are looking for this kind of solution and they are seeking help in the cyber security, both for their e-government platform and for the commodity. So we are very excited with this capability, being added to our capability and we believe that it’s going to make -- provide us with the very high competitor base as we know there is not a [indiscernible] to because do not have our capability in the cyber security.

And so the technology that they are bringing to the table, do you expect that to impact your entire product line or is it principally for the mobile payments?

The entire. It is going to affect our EID platform. It is going to affect our M payment. It is going to affect our M2M and it’s going to be also a direct test to government and critical infrastructure.

And that does conclude today’s conference. Thank you for your participation.