Nelson Ludlow - Co-Founder, Chief Executive Officer, President and Director Billy Joe White - Chief Financial Officer, Principal Accounting Officer, Treasurer and Secretary Emil R. Bedard - Independent Director, Member of Audit Committee and Member of Compensation Committee Guy L. Smith - Independent Director, Chairman of Compensation Committee and Member of Corporate Governance & Nominating Committee Michael D. Malone - Chairman of The Board, Chairman of Corporate Governance & Nominating Committee, Member of Audit Committee and Member of Compensation Committee

Amy Norflus

Good afternoon, and welcome, everyone. Thank you for joining us today for our 2013 third quarter conference call to discuss Intellicheck Mobilisa's results for the quarter ended September 30, 2013, and to discuss other business developments. In a moment, I will turn the call over to the company's CEO, Dr. Nelson Ludlow, to lead today's call and introduce the members of the Intellicheck Mobilisa's management team who will be participating in today's conference call. However, before I do that, I will take a few moments 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, 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. With that behind us now, I'd like to introduce to you Dr. Nelson Ludlow, Intellicheck Mobilisa's Chief Executive Officer. Nelson, please go ahead.

Thank you, Sarah. I'll do glasses for this since I'm not able to read as easily as I used to. Well good afternoon, everyone. Thank you for being here. This is a very good opportunity to speak to you all because we did a combination -- we just completed a shareholders' meeting, and we have a few shareholders here, as well as shareholders on the line. And so this is kind of a unique opportunity to answer questions, both here in New York City at our shareholders' meeting but as well as on the earnings call. So thank you for being available. I'd like to introduce a few people. Our Chairman, Admiral Mike Malone is on the call. Directors Guy Smith, General Buck Bedard, Mrs. Bonnie Ludlow are also here, and are also available on the call. Our management team, Bill White, our Chief Financial Officer, and Russ Embry, if you want to raise your hand for the people here, is our Chief Technology Officer. And Russ has some cards for the people here in the room, so this is the advantage of attending the earnings call in person so you can got a free download of barZapp on your Android phone or your iPhone. So he'll hand some of those cards out. Also for the people that are in the room, we're going to do a demonstration of a couple of our new products here up on the screen. So sorry for the listeners that are online, but we'll be able to send you some information if you request it from our Investor Relations, but we're going to demonstrate those products live here as well. Also I would like to introduce Dr. Dian Grisel, she's the leader of DGI, our IR and PR firm; and also Christal McElroy; and Phil Bergamo, who are from our independent auditor firm of EisnerAmper. So we're all here in the same room and will be glad to help me answer any questions from shareholders we have today. Okay. So, first of all, the outline of the call, let's talk about Q3 financials, discuss new products and the business plans for Q3, and really, what's going to happen in 2014. I'll allow an opportunity for shareholders to ask questions at the end of our presentation, and let's just jump into the numbers. For Q3, our revenue grew 21.7% over Q3 last year, $2.579 million. That's about a 50% increase by $858,000 over where it was in Q2. The reason I'm reporting that is, quite frankly, we're doing a turnaround. We're taking a company that was having a difficult time, and we're turning it back in a positive direction. So you'll see that Q1 was greater than Q4, Q2 greater than that previous quarter, and now again, almost $1 million, $858,000 better than the quarter before. Adjusted EBITDA for third quarter was $287,000, $102,000 loss for Q3 the year before that. And just last quarter, the EBITDA loss was about $646,000. So it's good to be erasing those parentheses off of the books. Net income was a small profit, $16,000, a $0.00 diluted share. But that's compared to $381,000 loss before, $0.01, which was Q3 last year or just the quarter before. As I said, a $647,000 loss. We renewed -- you may have saw the press release last week, a $2 million line of credit with Silicon Valley Bank. I've worked with that bank at several companies. I like that bank, and I was pleased that they renewed our line for another year. For those of you who may have wondered, there was an August 15 conclusion of that. They extended that while they were formally renewing it for the year. So we had continuous coverage of that line. We've had a busy Q3. If you look at our press releases or press that was on our website, you'll see there's almost 30 different things from Q3. I mean that's a few every day. I had the IR/PR firm put out a copy of every piece of information and -- it's not every one -- but a piece of information that's -- basically, since been June. Some of these hit 700 different outlets. There's only 1 of them in here we didn't do 700 copies of it. You can see this thing is pretty thick. I'm going to pass it around. I just want you to get an idea of how much press that we received. A lot of that has to do, frankly, because we're inventing some new cool products on mobile applications: BarZapp. As I've said in the last conference call, I don't think barZapp is a huge revenue maker directly, but it is a very helpful one indirectly. I was meeting with the Coast Guard -- headquarters of Coast Guard. They're not going to buy barZapp unless they're trying to find drunks on a boat or something. And they were looking at it for TWIC readers and other things in that nature. But you know what? That guy had downloaded barZapp, he had showed it to his boss. I was in a retailer and this exact same thing happened. It shows that we have the capability of making mobile applications that are successful. They work and put our drivers license technology right on it. In 20 seconds you can show someone what does that company do. And so that's why I encourage you to get one of these free cards, download it on your own iPhone, and if you have the opportunity to show one of your friends what this company does, that's a really good demonstration. But not only do it for bars, we do it for a whole host of our applications I'll tell you about. So let's talk about July, about barZapp. We launched our first major smartphone application, and we decided to do that with iPhone. We called it barZapp. It basically checks if you're 21, to buy alcohol, 18 to buy cigarettes. And we launched it on Apple Store. Within that first month, it gains popularity at one point. During one of the days, it was the third most downloaded applications -- in the Apple's -- in business applications in the Apple Store. Just recently, we did an upgrade. We launched barZapp 2. It's got a lot of new features. People really like that. We actually had more downloads of that than we did of in barZapp 1. We also just last week, you may know, have added it to the Google store, so now it's on the Android platform as well. So we have both -- I remember, worked it on the press release and we said, we now have our product in the Apple Store and the Google store. I don't think I've ever written a press release like that before. So I thought that was pretty cool. The awareness campaign of barZapp is continuing, but let me just mention a couple. Investor's Business Daily, USA Today College edition, US News and World Report. The word's getting out that there's an app that's very easy to use, very quick that you can use in your bar to help underage drinking, which is a significant problem in this country. 32% of college sophomores have a fake ID. In the Wall Street Journal, they talked about China making fake IDs and how -- the Washington Post talked about how we're catching those. That is a very cool technology that now just goes on your cellphone. You can imagine the applications that can go on to that. The product also works for ID verification for other age-related products. Services such as tobacco, age-related movies, rental cars, adult magazines, gaming. Some states you can't even buy spray paint unless you show a driver's license. Certain over-the-counter medications, compliance with voter ID laws, controlled substances. It's quite a long list. We have an app that's the basis for doing that. Let's talk about a product that I am very excited about for 2014. It's called TWIC, the Transportation Worker ID Card. TSA or the group within Homeland Security, this year, asked that all the manufacturers of these TWIC card readers -- and we have a couple of them up here up front -- that they be certified by Homeland Security. They called it a QTL or a Quality Technology List. Well that's kind of nice because that means you can't just say you have a cool product. That means Homeland Security is going to test you out, 140 tests at a third-party independent lab, and you got to prove that you know what you're doing. Well no surprise to me. Our software guys were the first in the country -- first in the world to get TSA approval. And so, in July, we announced that and that product -- not 1 but 2 products, ended up on that list. There is 1 other company that has a fixed reader, so we're still the only company with the mobile reader. And so, whether you're the Coast Guard, you're at different seaports -- but did that translate into dollars? Okay, cool, you got a certification from the government. Did anybody buy it? 2 different ports already bought it just this quarter. And like I said, we're talking to the Coast Guard. I'm very excited about this one. This is a high-end product. It's the opposite of a cellphone app, and it's a ruggedized device and really, that TWIC card is the world's smartest card. it's got fingerprints in it. Smart chips, all these things. None of which you can pull the information from unless you have a reader. So very cool on the government for getting to the point where they have this QTL and very cool, and our software development team for being the first to get on that list. So we're already making sales on that, and I'm excited about more of those. Let me just throw a couple of numbers out for those of you who don't know. It's an initiative from TSA and the Coast Guard, provides tamper-resistant biometric ID card to all the port facility workers. And Coast Guard and TSA has already given guidance this year, that approximately 550 locations will require a QTL-approved TWIC reader, and approximately 1,500 other locations are on the recommended list to have TWIC readers. Okay let's talk about wireless. You know that we've done some enterprise wireless. Our team successfully completed a large wireless infrastructure in July of Q3 this year. That we also completed, what you might not know -- we completed 2 other wireless projects in Eastern Washington in Q3. Let's talk about one that -- it's dear to my heart: Military bases. We're starting to install back again at military bases. Just track the public press releases of how many this company used to do and then there was kind of a lull for a while, and you see that it's coming back up. Again the military, just like TSA, said there has to be certain certifications. A thing called FIPS-201. What does that mean? It means it has to be able to reach smart chips, and again, be certified by somebody in the government. So the military's required -- the U.S. Marine Corps put out a guidance that it has to have that. In fact, if you don't have it, get rid of the other products that don't. So, just this quarter, Fort Polk, Louisiana, purchased not just a few readers -- and they do 7 million scans a year to protect that base. It's a very cool system. They bought entirely new readers, got a whole new certification. So, again, we made a new product, and we turned it right into new revenue. What I found very interesting is, this quarter, over half of our revenue came from our new products and new innovations. Let me talk about one that we just announced yesterday: State-aware software. That's an interesting thing because the states, not only do they have different barcodes from state to state, and they do it all differently, and that's one of the things that keeps us in business because we keep track of that. They also have different laws. State of New Hampshire for example. Law enforcement can scan an ID, but you can't use it if you are adding someone to a mailing list for example. That's not allowable in New Hampshire. Not all -- not too many states have difficult rule -- or rules that constrain you. But there are a few. If you're a national retailer, you don't want it to be difficult in rolling this out to all your stores across the country. So what we did is we took all the state laws and not only just give you a policy letter, we incorporated it directly into our software. And based on what driver's license you show, what state you're in and what the use of that software is, we picked the appropriate fields that can legally be saved and which ones that cannot. And we do that for you. We're already testing that in a major retailer right now at 400 locations across the country, and they like the new software. I like it. It's one-stop shopping. They don't have to worry about it. So we've incorporated the lawyers and the software guys together into 1 product, which was a feat and a successful one I may add. Let me talk about cost a little bit. There's no secret to get our company to profitability this quarter, we did cut some costs. We cut labor about 30%, 35%. We're doing more now with about 1/3 less people than we had before. We have not -- we're increasing in sales, and we've not scavenged the software team. So we're keeping innovation up, and we're keeping sales up, but we're a much leaner company and tougher company than we were before. So let's talk about the future. Where are we headed? The best new product that's out there is our Software as a Service, S-a-a-S, SaaS. What's very, very cool about that, is it's going to be able to make my job easier for you, as investors, because we can project revenue much more intelligently, and it'll be less lumpy revenue. Because we win a big contract. We do great. We don't have one. What if the contract closes on June 28 as opposed to July 2. It could literally shift our numbers, as a small company, significant from Q2 to Q3. As we start to spread this revenue out and they pay a monthly fee, it's better for you investors. It's better for us. It's easier for us to maintain. And I'll give you the reason why. Every Motel 6 -- and you might not know this -- or nearly, like 99% of all Motel 6s, have a reader for ID made by us. It says Intellicheck Mobilisa right on it. If you ever have the situation to be in one, ask the clerk, say I want to see that Intellicheck Mobilisa ID reader. It's right there on their desk. It has our -- branded right on it. Well, that's a lot of hardware at a lot of different places. If we have to touch every one of those devices and go to every Motel 6 to update it, that's costly for them or costly for us, however you look at it. If you have 1 server -- and when the state of New York, which just a couple of months ago, came out with an entire new driver's license, and we update that and put it in the server in 1 or 2 locations across the country, all Motel 6s can be updated. That's a much better way of doing business. It saves them money. It makes it easier on us. A small company can support that in a responsible way, and it's better for us in projecting the revenue. The last part that we have found with some of the retailers, it's also more affordable to them. They don't have to come up with 1 big cost upfront, and then we get some small reoccurring revenue. It's just a monthly fee that they pay, and as long as they keep using it, they pay for it. So Software-as-a-Service, and I think that's a no-brainer to most people in the business world, is a good way to go. A lot of the other leaders in the industry are doing it, and we're doing it with our software as well. So let me talk about tablets for a second. You may see more and more people using tablets. I was in a Verizon store changing my cellphone over to their service just this weekend. They had a tablet. Well see, I already knew the answer, but I asked the young lady that was doing it. I said, do you have that cool driver's license reading software so I don't have to give you my address and name, and everything, here in the room? Much less so everyone else can hear it. And she said, I do and I love that stuff. And so she pulled out -- I gave her my ID card and scanned it, and I -- it went right into the system. But then, of course, I told here, well, you know, we're the company that built that. And she said this is very cool. It makes my life a lot easier, and it's in all the Verizon stores. Guess what? It's in all the AT&T stores now, too. That's our software. So we're putting this in more and more tablets, on iPads, on iPhones, any of the Apple-related product set, and other tablet format. Because here's what the future is going to be. There's greeters, just like you see in an Apple store that greet you at the front door, and say, how can I help you today before getting lost in the store and looking around. If they can scan your ID and find who they are and move you through the store quickly, that's better for them, but they need to ID you right upfront. Well how are you going to do that? And they don't want to buy a bunch of barcode scanners or have some tethered thing or running around and shine a light in your eye. All you just do is, with a camera -- and I say that because sometimes the barcode -- I mean, they accidentally shoot you in the eye with this laser -- all you got to do is use the same camera in your iPad or in your iPhone, but in a tablet format, and it just populates it. That's going to be the future of retailing, and we're building products right now for that. Again we're already testing one in a location. Another feature one is law enforcement. We have this in test for a while. I want to get this right. Each state does it slightly different. But, again, the same scanner -- and, Terry, do we have a demonstration of that today, that you can show?

I have it.

Okay. Well, Terry has it, so he can show you that we have the capability on an iPhone or on the tablet, to not only scan for a barZapp, but you can do it if you were a cop. And it'll actually do an FBI check. The military's looking at doing this. Law enforcement across the country can do it. Again you don't have to go back to your car or call it in. You're actually able to do a bona fide FBI check right there on the spot. So bottom line, we have a completely new focus on mobile applications. We're trying to take where people are chained to the desktop and move that computing where the action occurs. Where its mobile. Where its wireless. Where you're actually meeting the customer. And that's what we're doing. We had a major breakthrough this year, technology-wise, if you didn't track on it specifically. But those cell phones don't have barcode readers in them. It's just a camera. So we're able to convert that camera to be able to read that barcode and to be able to process it with our software. The other area that we're going to be announcing a product shortly is Mexican driver's licenses. A Mexican driver's license, since we do U.S. and Canadian right now, we already have many of the Mexican driver's license into a beta product that we've been using at a couple of locations. Mexico is a major business area. It's part of NAFTA. It's not one that we should forget. And also, there are U.S -- people living in the United States that are Mexicans that also have IDs that want to open bank accounts or want to do activities in the United States, and they have the same requirements. I want to check in this hotel. Can I show an ID? I'd like to open up this bank account. It's not illegal to open up a bank account in another country, and I was notified -- I have a bank account in Scotland, for example, where I used to live. There's nothing illegal about that. In fact, the banking industry has asked us, please, we want to process Mexican IDs. Okay, let me just say 1 last thing before I hand it over to Bill to talk about some detailed financials. On the news and PR, we really -- there's 3 reasons in my mind to do PR. One of them is it actually helps make sales. Someone reads about our product and says, you know what, I want to use that. We had someone looking at a bar app, and they were in a notary magazine in the notary world. They wanted to keep track of it, so they called us up and said, could you make a new product that works for us? Had they not read the press release and the articles about it, I've got to admit, I don't think they would have thought of that as an initial market. So that was very cool. A second one is for the investors. So they can understand what our company is doing, where we're going. And the other one is so we can attract good talent. And we've had that as well. When we're hiring people, they could say, "Look at this. Hey, here's a company that's doing some cool things." And we've had all 3 of those occur. And even though that we've had to do some downsizing this year, we have attracted some new talent for key areas like sales and software. So with that, I'll introduce my friend and CFO and fellow alumni, Bill White.

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 third quarter ending September 30, 2013, which we released today. We also released our quarterly report on Form 10-Q and filed that with the SEC this morning. Revenues for our third quarter ending September 30, 2013, were $2.579 million compared to $2.12 million for the previous year. Identity systems revenues increased to $1.641 million compared to $1.572 million. And wireless revenues increased to $938,000 compared to $551,000 last year. Revenues for our third quarter ending September 30, 2013, were up $858,000, as Nelson previously said, compared to our second quarter ended -- compared to our second quarter ending June 30. Identity system revenues increased $316,000, and wireless revenues increased $542,000. Booked orders for the 3 months ending September 30 were approximately $1.54 million compared to $1.35 million in the third quarter of 2012. Gross profits were $1.781 million for the quarter or 69% of revenues compared to $1.57 million or 74% of revenues for the third quarter of 2012. The decrease in percentage is primarily due to lower margins on the 2013 wireless revenue, which was equipment-heavy and made up the large portions of the quarterly revenues. Operating expenses, which consist of selling, general and administrative, and research and development expenses, decreased $183,000 to $1.766 million for the 3 months ending September 30, 2013, from $1.948 million for the 3 months ending last year. Adjusted EBITDA for the quarter was $287,000 compared to a negative $102,000 in the quarter ending -- last year. The company posted a net income of $16,000 for the 3 months ending September 30, 2013, compared to a net loss of $381,000 for the quarter ending September 30 last year. As of September 30, our backlog was approximately $410,000 compared to $270,000 [ph] for the prior year. Interest income and expense were negligible. We have net operating losses carryforwards of approximately $43 million. As of September 30, the company had cash and cash equivalents of $643,000. Working capital, defined as current assets minus current liabilities, minus $395,000. Total assets of $19,110,000, and stockholders' equity of $15,953,058. Our cash and receivables exceed our accounts payable by approximately $1.47 million, and we have not used any bank financing in 2013. During the 3 months ended September 30, the company generated net cash of $48,000 for the 3 months ending September 30, 2013. $81,000 was generated from operating activities, and we used cash of $33,000 in investing activities. We generated no cash financings -- we generated no cash from financing activities in 2013. During 2011, the company entered into a 2-year revolving credit agreement with Silicon Valley Bank. The maximum borrowing under the facility is $2 million. Borrowings under the facility are subject to certain limitations based on a percentage of accounts receivable as defined in the agreement and are secured substantially by all of the company assets. As of September 30, there were no outstanding borrowings. And unused availability under the facility was $957,000. We recently -- as Nelson said, we recently executed an agreement to extend that facility through October 15, 2014. We currently anticipate that our available cash, as well as expected cash from operations and availability under the revolving credit facility, will be sufficient to meet our anticipated working capital and capital expenditure requirement at least for the next 12 months. The company is also exploring cost-cutting and other measures to improve liquidity. On July 31, 2013, we renewed our universal shelf registration statement on Form S-3 with the SEC. Under the statement, the company may offer and sell, from time-to-time in the future, in 1 or more public offerings, its common stock, warrants, preferred stock and units. The aggregate initial offering price of all securities sold by the company cannot exceed $25 million. And pursuant to SEC rules, the company may only sell up to 1/3 of the market cap held by nonaffiliate stockholders in any 12-month period. I'll now turn it back over to Nelson.

Thanks, Bill. Let me just mention 1 thing for our listeners before we go into questions. We did have a shareholders' meeting, and just to make it clear, the 5 directors of General Buck Bedard, Ms. Bonnie Ludlow, myself, Guy Smith and Admiral Mike Malone were elected as directors. The second item on the proxy was that EisnerAmper, LLP, was voted as our independent auditor for the company. There was an advisory vote on compensation for the named executive officers, which was approved. And the frequency of the future advisory votes for executive compensation was approved on a 3-year cycle. So those were the items. In summary, I'm excited about the future of the company. It's been a lot of work. We're not out of the woods yet. We have more work to do. We're going to keep up innovation. We're going to see the innovation in mobile applications particularly. You're going to see more of those. And we're rebuilding in the government with TWIC in military. So after today's question session, we'll show a demonstration of some of our products. Terry Thiele, who is our Director of Government Sales, who I don't think I formally announced previously, traveled here today to show you some of those products. And then Russ will hand out some of our gift cards with pass codes so that you can download the barZapp and try it out yourself. At this point, we'll take some questions. We'll do our best to answer the questions that people have. Please clearly state your name and what organization you're with and who you are asking the question to. Also try to limit your questions to 1 or 2 so that others in the queue can ask questions. If there's time, you can ask questions on the second round. Also be aware that we're going to be taking both questions from here in the meeting room and from listeners. So you'll just have to kind of bear with us a little bit while we do that. And so at this time, how about let's begin with a question from the audience first, and then we'll go to the operator on line. So if there a question here in the audience, and if you want, give them the microphone.

My name is John Bendall of JBC Partners. It's a family hedge fund. Nelson, most of all of you know how critical I have been on the company as a shareholder for 13 -- I think this is my 13th Annual Meeting. At least I've been around 13 years. When I say critical, I have had the greatest respect, and I have told you so, for your mathematical ability and what you have done. And I have voiced that. Doesn't mean we have to always agree. You said something today that I thought was encouraging, and that is that -- maybe at least I thought I heard you right, that investors would have, going forward, easier or better time in making some estimates or perhaps it was you that the company could make an estimate. Example being yesterday, with the press release you had with -- I think it said 400 stores that you were trying out this demand. I take it also you're not going to reveal who those 400 stores are or what the entity was that you're trying them in. Will there be a point that those kinds of things will be revealed so one can get some color and be able to do some sort of extrapolation to have an idea of what that revenue would be? And after you said, it would be -- it's going to be easier for us going forward to make some sort of a forecast? I know that's a long-winded question, but I guess how do we start to, say, well, if they got X and Y, that could result in A and B as for sales?

Okay. Thanks, John, and thanks for the question. SaaS will make it easier for us to be able to predict revenue, and it will be a more steady stream, and we're going to get to a point where we will be shifting from essentially new work to more reoccurring revenue. And as that grows, you'll be able to -- we will be able to predict better and be able to pass that information onto you. Right now, truthfully, I could have a big order come in on December 30 versus January 2, and it will shift our revenue. There's no doubt about it. It just will. And so it's hard to predict what's going to happen on that. So let's talk about, well, who is it? And retailers particularly say, "Hey, I don't want you to say who I am because I'm doing something innovative." But after a while, after the technology is out there, guess what? We can talk about it. I mentioned several today. AT&T, Verizon, Motel 6. All of those ones we are talking about. This is a retailer that said, "We want to try some new innovative product with you, but we don't want you to tell our competitors who it is." I said I'd rather have the business than the press release. It's not easy, and if we can get -- but we did both. We did the press release, we just didn't get to name who it is. I should also say that some of these locations -- we said 400 locations just to be clear -- some of the stores have multiple locations, and so it's not technically 400 stores, but 400 different locations are trying this out.

I was looking at this booklet, I guess, that you and Dian put together, and it's rather impressive. And I thought to myself, the thickness of this book, I don't know if a lot of these are the same, but it is press. I wish there was a way that every time one of these was out, there was a way on your website or click for shareholders that duplicates, but that's okay. It's press. But you might be able to say, Chicago Times Page 12. It just shows that the media is still out there looking at it. I mean, I figured out that if stock went up $0.01 for every one of these releases, we'd be at around $4.50 right now.

Right on. Okay.

It's something to think about, but I know there are a lot of duplicates. But it's a lot more than I had thought. I mean, we get what everybody gets from you, and they're good. But there are some pretty impressive publications in here.

Well, maybe we could put more information on our website. We'll try to think about that as we're shifting now into social media and as the SEC has now allowed that to be an acceptable form of contact. We can push into that direction as well. The real thing is you got to do press all the time, everywhere. It is hard. You have to just keep doing it and keep doing it and doing it, and finally, the word starts getting out. Anytime companies are successful, whether it's a person, it's an actor to -- some new product, often they say, "Well, that was amazing. That was overnight that success happened." And that's never the case. The reality is, as you keep plugging away, plugging away, and the press was there. And if you did search, it was there. And for the smart investors they'll find out, "Hey, this is a cool product. Hey, there is press out there." Is it a household name yet? No. But the fact that all of the Motel 6s now have a product that has branded right on top of it, which has been a focus of mine, I want branding out there. Warren Buffett says he buys stuff that he can understand. He likes Coca-Cola. He likes train sets, so he bought Burlington Northern. Well that's his own story. The thing here is we want branding. When somebody checks into a hotel, I want to go, "Hey that was kind of cool what you just did there. Who makes that?" The problem with software is, you can't really see who makes it because it's in the air. It's wireless. It's, I don't know [ph], did something. I don't know who makes it. Well if I asked that lady in Verizon, she would go, I don't know. I mean -- so we need to do branding. That's why the hardware devices, every opportunity we can get to put our branding on it in one of these locations, we're going to do it. Because we are the driver's license scanning company.

I was hoping to perhaps see 1 downstairs today that maybe you would have snuck one in where the guy looking at our license, taking it out, going through that drill. I mean, it seems like a hell of a lot easier just to run that drill.

One of our partners, EasyLobby, which makes a lot of lobby softwares for scanning driver's licenses, does use our software. It's not a gigantic market. We, here, in New York City live that, and frankly, it's because you went through 9/11. The rest of the company -- country is a little different and don't always check IDs for going into buildings. In Seattle, they'll just say -- walk in with your Starbucks. They are not going to check. So it's -- but in the places it is, we do that with some of our partners. It's not a huge market right now.

John, we got a tracker on your car. We knew you were coming.

[indiscernible] I noticed both tires were flat by the time I got here, so I have a hint.

Well, how about we'll take a call, operator? How about we'll take a call from the line.

Our first question from the line comes from Amy Norflus from Neuberger Berman.

Can you give us an update as to what recurring revenue is? And is it possible to quantify anything between AT&T or Verizon or Motel 6, or the contract back in January that you mentioned about a retailer? Or -- I mean, can we put any numbers behind all of these great products that we have -- that we're selling?

Okay. Yes, Amy, thanks for the call. Let me try to do that. I got to be a little careful because if I start -- then the other hotel that we're talking to right now goes, "Good, now I know what the price is and I want 10% less." So -- but let me give you about the AT&T. We did a press release several years ago. AT&T, as we said before, we've sold retail licenses for approximately $0.75 million. That was approximately the deal for them in that ballpark, with a reoccurring revenue stream, so when every year, about 20% when updates occur for state driver's licenses. Again they have that model. And we also sold them approximately $3 million to $4 million worth of hardware over a 3-year period of time of barcode scanners into the AT&T store. Motel 6 is a fixed reader. We sell our fixed reader with hardware at about $8,000 a point. But let me tell you about our new software, SaaS model, which we're shifting several of these places to, is $99 a point per year. So Software-as-a-Service is a $99 per location. If you have 3 in your front lobby, then that would be $300. If you have 1, then it's $100. If you're a big store and you have 40 different locations, then it's $4,000. The cool part is you don't have to worry about updating your software and worrying about that new Indiana driver's license, or is it okay to scan it in Oregon. We take care of all of that for you.

So what's the SaaS model, what does the customer have to buy?

With the SaaS model, it's very cool. It's called the "bring your own device" model. So whatever they got as long they can take a picture and do a barcode scan, we can use our software to do it. Now there might be a couple of technical things behind it, but by and large, that's the model we do. We did something so cool now as a new product that we're talking to some hotels with. The clerk behind the counter can actually scan it with their own cell phone and have it fill it out for you. Now I don't know if that'll be acceptable or not, but that's how loose this model can be. More and more people want to bring their own device, and maybe they already have their own barcode scanners. But software is going to be the future. It's actually kind of scary to think about all these barcode scanner companies that sell hardware. Well if you can just read a barcode with a camera and a cell phone, why are you a barcode scanner hardware manufacturer? I mean it's kind of like investing -- being in an airline reservation industry. You can kind of predict somewhat what's going down and what's coming up. Software is going to be more king, and hardware is going to be less and less. So it's pretty much a "bring your own device model" with our customers, $99 a year for our software.

Can you update us on the Motorola? Anything that's going on with Motorola from some of the prior calls?

Motorola is partner of ours. We worked with them to -- since they are a barcode scanner. And we have worked with them to resell some of our software. It's been a very modest rollout. We did a project called Tire Kingdom, and that's about it. It is not moved out. We're still trying to work with them to make that a bigger and better relationship. And we think they see the value in that, and we do, too. But that's still a work in progress. Okay. How about Dave Richardson [ph]? We're going to take a call, operator, here from in the audience here.

[indiscernible] I'm a retail broker. I have a lot of people that own the intelligent stock. I've owned it for -- talking about 15, 20 years when the stock traded at $20 or $8 a share. We've been there forever. Things have changed around talking about that. But I have a lot of customers who own this stock. And I say, hey, these guys are starting to turn things around. They're doing a good job. And last quarter, we sat in here, and you brought up something that they're still pointing to and saying, I know management didn't say they were going to buy stock for themselves, or the insider said they were going to buy stock for themselves. They didn't say that exactly, but they got permission to buy stock for themselves. So we've been looking ever since. Here we are again, another quarter, and my people are saying, "You show me that management cares." I don't care if they buy their own. It's only 100 of shares. But a couple of thousand here, just 2 or 3 people, they care about their own company. It's not that much, about an $80 stock. We're talking about spending a couple of hundred dollars. Even that would show people that management cares. And I think that would be really important for any of you guys, any of you directors, or insiders, or the guys that own all the stock, show my people, hey, these guys now care. We've had a good quarter. Things sound good. We were there the other day. "Guys, listen to me. I think you've got a chance at getting some appreciation with the stock. Every other stock seems to have been going up." We need that impetus from you guys.

Okay. That's a good comment. Let me just say a couple of things about it. As you know, but I'm sure most of the callers know, the Board of Directors and executive officers are in blackout periods from time-to-time. So I couldn't have bought shares yesterday and said, "I know we're going to announce profitability tomorrow." Dian would say, "Don't do that. That's a bad idea." So would the SEC. So we're in certain blackout periods. It's actually a relatively small window, probably a little smaller than you may think for the Board.

Let's use that window just once to show if anyone of you guys cares.

Okay. And the other is, the reason that we announced that we were allowed to do that is we did have an SEC question last year, and so we wanted to make sure we got things right. We talked to counsel, and we tried to do it prudently. We tried to do it reasonably. And we tried to do it and communicate what's going on so someone wouldn't make that assumption and say, well wait a minute, they didn't buy, maybe that's a bad sign. I wouldn't jump to that conclusion, in particularly for in the past because if that time was when we announced in that 8-K, counsel advised us, let's be cautious here, let's let things settle down a little bit. Although, and let me just repeat that when the SEC did ask us for information, it involved no current employees, no directors, no officers, current people over our company. But to be safe and prudent, that was the direction we took.

I tried to do a follow-on directly. I don't know exactly what my right is in this statement. I think I bought 100,000 [ph] shares this year [indiscernible]

General Bedard spoke, and he mentioned that he had filed a Form 4 it -- I mean, he didn't mention form, but there is a Form 4 to indicate that he exercised approximately 150,000 options and bought a lot of shares this year.

Maybe that's [indiscernible]. Well, I know what you're saying. I'm talking about a new -- but that's not really a new purchase. Emil R. Bedard: That's money into the company.

Yes, that is money into the company, but it doesn't show people that, as I say, [indiscernible] they want to see that you guys are here enough to say, okay...

Well, let me address the question, directly. Yes, we do care. I care very much. Let me just add 1 quick thing. It's also, this year, I deferred some salary, and the Board of Directors also deferred salary. They had more Board meetings this year. Our IR firm dealt with more things this year. Our auditors dealt with more things this year. We're turning this company around. It wasn't less work. It was more work. And we did sell -- and even put personal gain aside to make it happen. So yes, we care. I care very much about this company as you know, I've invested in it pretty heavily. Essentially all my life savings are invested in it. I spend every waking minute worrying about and trying to do the best for this company, so I care. But Mr. Smith, you wanted to... Guy L. Smith: [indiscernible] the blackout period in some of the last year [indiscernible].

Some guy out there buys your stock, what would be smaller stocks, so let's be involved. He doesn't see that. I can say anything I want to, and you're going to say, "Show me. Just show me that..." Guy L. Smith: [indiscernible]

A couple of great examples, which is just being [indiscernible] somebody couldn't find anything unless [indiscernible].

Admiral Malone. Michael D. Malone: [indiscernible] just the same file. It's a form -- the file, they bring out the form, and it's filed every time -- it's the director part of the share.

Correct me if I'm wrong. I think what David is -- and I'm speaking for David what he means [indiscernible] I would much rather have money going into the company [indiscernible] options local broker [indiscernible] and buy 10,000 shares [indiscernible] but I think that's -- I can sleep probably well [indiscernible]. I don't have a problem...

Noah [ph], look, thank you for the question. And it's good because I want to kill that rumor because Mr. Smith has routinely bought shares prior to when we were in a blackout. General Bedard did exercise. Admiral Malone did buy. My wife and I are both directors. We own 40-some percent of the company. So no one has sold over in the last year. The last person that did is no longer with the company. So I don't know how else to say it, other than look at the facts, and yes, we care, and people have been investing. How about we take... Michael D. Malone: It has been difficult to lift the blackout period because the directors have been so involved in the recovery of the company that we know the numbers. And so while we came very close to lifting the blackout period several months ago, we just know too much. That said, we intend to lift the blackout period in 48 hours until the end of November.

That's why he's the admiral. So...

Okay. How about we take a question from the call please or from online?

The next question from the phone line is from Joe Bernini [ph], a private investor.

2 things. The current topic that just came up regarding the purchase of the stock, I do believe that General Bedard had an option to not purchase those. They were basically at market value, and he paid $0.46 for them. So that shows his interest in the company. If he was in a blackout period, and he still took the stock and purchased it, that's a positive note to make. On May 6, on June 11, when he made those transactions or when they were posted. So I look at that as a very positive, and I do understand the Board of Directors being heavily involved in management in a small company. You have knowledge of deals that are closing and potential deals, and you cross a very thin line. Of course, I like to see everyone purchase it. But I look at that as being very, very positive when he exercised those. So congratulations to him, first of all. Above and beyond that, 2 things. There was an outstanding issue, not an issue, a -- less likely did not -- a revenue that you took a hit on of about $400,000 or $500,000 or maybe close to $600,000. Is that still less likely to not or has it proceeded in any form? I think you took it in the prior quarter. The quarter -- this quarter of last year.

Right, Joe. Okay, first of all, Joe, thanks for your good questions and your comments about General Bedard. I appreciate that. Yes, we took an adjustment in Q4. What Joe Bernini is asking is we did some buoy work last year. And there were some charges that we didn't feel that the government was, definitely, likely to pay. I'll look to the CFO and others, but if it's less likely than not that we believe that it's to be paid, we want to notify you. We want you to know. You have a right as shareholders to know, and so we did that. We removed that revenue from Q4 as an adjustment. And during this year, we've recovered a small part of that, not from the Navy, but from the contractor that we were subcontracted to. With some help of our legal team, they've demonstrated that some other work that we did that we thought that we could get and we've captured that for this year, and that was in this -- part of this, a small part of a couple $100,000 of revenue for this Q. Also we did some additional work in the buoys, taking them to a different condition. Wrapping up the contract. Doing some things, which was new work that we claimed to the Navy for about $138,000, and the Navy paid for that as well. We are still pursuing legally to the Navy to demonstrate that we did complete that work last year and that some of it, we should be paid for. We have a claim for $291,000 right now with the Navy to do that. We are not changing our position from less likely than not, to more likely than not. We still don't know. And so -- but it's sitting with the Navy right now. So other than that, we're in a kind of a wait and hold. We may have an answer as early as of December. But we're working with the federal government, so it could be as late as Q1.

And just to add to that. Obviously as stockholders, we look at that as icing on the cake because if you already took the hit on that, we understand. The other item I wanted to bring up was this turning point in the company seems to be an increased revenue stream during a really awkward time in the government. You picked up government contracts during a time when the government was reaching a threshold. They shut the government down, and you still were able to pick up contracts. There were a quarter that I never expected that you would. So I think this opens an opportunity now going forward, as you said, you had several dozen that inquired after you have these recent locations. Do you see significant upside potential?

I do. So much so that I spent last week all at military bases. I was at Parris Island, Fort Leonard Wood, Missouri, at Fort Polk, Louisiana, in Washington, D.C. area. The reason that I've been visiting these military bases was that was something that we were successful with when we were Mobilisa. Something we were successful with when we first merged the 2 companies. And then if you look at the public press releases, it kind of dwindled. We had a major change in our customer support. That's noted at all the military bases. They are very pleased with our new customer support 24/7 help desk. Some of the ex-military people that we have there that are visiting these bases. But what I'm excited about with the bases that I have visited, and my favorite book, Crossing the Chasm, these are the innovators. These are the ones that are starting the new ideas. So we did the FIPS-201 compliance new idea. There's Parris Island. We're building the new Fugitive Finder devices and rolling those out. Sure enough, they ended up at Fort Polk. We have these new 2 TWIC readers, and we're at 2 new ports for this. So all -- it's not all of a sudden, but we're pushing with these guys. Fort Polk, Louisiana, is really the innovator in the Army. They're using wireless. No other army base is. They're using these new devices. They're checking smart cards. They're doing all kinds of new innovative things. That's exactly the guy I want to spend my energy with, so that other bases can look to that one and say, I want to do exactly what that guy is doing at that location. I'm noticing that's happening. Our new innovative products are going to the innovative people in the military. I think the military is -- in next Q3 and Q2 of next year, I'm hoping for some sales there. I mean you can never guarantee with the government, but they have the funding. What they're saying is we're not really worried about the cost exactly. What we're really worried about, is it certified? Is it a warranty? Is it safe to use? Does it pass all the tests? Is it going to help me get my job done, and is it going to save me money? They're very jazzed about these things. So I think we've had a major turnaround in the government. If you looked at our numbers in the government, they were going down. Every quarter they were going down. The last couple of years, they were going down. And so I'm with you, Joe. This was -- I don't want to say a surprise, but a pleasant confirmation that, yes, we are turning that around. I think I spend a lot of energy in these last couple of quarters in the government area, and those certifications that our company did led directly to that. They have to buy something that's certified. Emil R. Bedard: And Joe, General Bedard here. I'm just going to make a follow-on comment to you...

General it's hard to hear on this phone.

Can you give him the microphone. Joe, hang on, just 2 seconds here. We're going to give the microphone to General Bedard. He has a general's voice, so you might hear him anyway, but... Emil R. Bedard: Joe, good afternoon. Thank you for your comment about purchasing stock. I'd like you to meet with my CPA when it comes tax time as well.

I think you're going to have a big problem because you have a lot of gains. Emil R. Bedard: The comment I'd like to make about why the military is so strong after our products right now. One of their biggest concerns is what happens with the data that you collect, and is it properly protected, and can we ensure our audience and our military and our military families that it's going to be protected? And we do that very, very well. And you're going to see that come up time and time again, especially with now the information that's being requested under Obamacare for health products, et cetera. Securing the information that you gather every time you do a scan is a critical aspect of our product.

Thank you, General. Joe, did you have any other comments?

Just keep doing what you're doing right now. We're very happy with the progress for this quarter.

Thank you, Joe. Let's take 1 more call online, and then we have time for 2 more calls. Okay, so is there any other online questions?

Yes, we have another from the line of Ernie Copanegro [ph], a private investor.

I wanted to ask you a question about the biometric and the ability to put all this stuff together on the TWICs card. Are we trying to explore that even further to monetize that into anything potentially bigger than what we're doing now in other applications or other resources? Because there's so many folks that are saying that the bar reader -- I mean, they're saying the same thing for the last 10 years that the technology has failed and that everything is going to be fingerprints, matrix and eye retina matrix, et cetera, et cetera. How do we fit into that scheme?

Okay. Thank you, Ernie, for the comment upfront, and thanks for the question. Yes, the TWIC part, I'm going to hold up a TWIC card for the audience here. In here, fingerprints from the holder. There's also a smart chip. There's also a proximity card. There's an RFID that radiates. There's, on the back, a barcode, a magnetic stripe. Homeland Security has held it up as the world's smartest card. And when I briefed the Homeland Security committee on the Senate side, I said, yes, but it's the dumbest card without a reader. And I think they agree with that. So what are we doing with this biometric card? Here's what's cool about it. Not only did we get certified by Homeland Security, made us do these 140 tests. We call our products, and we'll show it here, TWIC Plus. Nobody else does this, so if I sell a TWIC reader, it's an open format, government, other companies could do this, too, if they spent the time, money and energy to get certified. They build a TWIC reader and you could validate this card. Oh, next truck driver shows up with a driver's license. I'm sorry, go away. They don't want to do that. That costs them money, time and energy to do that. We can. So we call it TWIC Plus. We read a TWIC card. We read a driver's license. We read a military ID. We read retired military IDs. Here's what Fort Polk and other locations want to start doing. There's another company, it's a competitor of ours, that makes their own personal card. They do a background check, and they use their own private card. The Department of Defense IG had a report just about a month ago looking at what the Navy was doing on a -- and it wasn't too flattering. It said, basically, after pretty much a dozen complaints in this report, actually, The Wall Street Journal published it after Congressman McKeon released it. Basically, it said, why is the government delegating to companies to do background checks to let people on secure military facilities in the most secure locations in the country? That doesn't makes sense. And I agree with that. What you should do is have government checks. So we read the military ID, where we check it to? The military database. It's called DEERS. There is a law that says, if a visitor goes to a military base, as of 2009, you're supposed to do an FBI background check. Well, we do that, too, with our law enforcement system. But what if you're the vendor, your the Coke delivery guy, or you're the pizza delivery guy, and before you think, well, who cares about those guys? In Fort Dix, New Jersey, a few years ago, 6 people that were Al-Qaeda pretended to be pizza delivery guys and their plan was to go on base and kill as many soldiers and family members as they possibly could. And thank God, the FBI stopped that the day before. Because of that, Fort Dix, after that investigated different systems and bought our system to read ID cards to prevent that. Well if you use this competitor's card, and you're the Coke guy, well, you have to trust that, that company is doing what it's supposed to do. How do you know? Well maybe it's a good system. Maybe it's not. What the report guided people to is let's do a government card. Let's do a government background check. There's one that already exists. It's from Homeland Security, TSA, Department of Homeland Security does a background check. It's good for 5 years, and it's 1/10 the price of these competitor background cards. I've already talked to Homeland Security about it. They love the idea. They have mobile distribution sites. In fact, companies that you've heard of and invested in, called L-1, and I know you were an investor in that, they made these cards. They did the background checks. Cool. They did it on behalf of Homeland Security, a government-controlled thing. Well we're the guys that makes the readers for that. I think that Ernie is right about this -- or his question led to this, is it is going to be -- it is going to grow. So why not have these military bases instead of having some company make up its own card, why not use a Homeland Security card? I think that's probably going to be the future. And the cool thing is we already have a product that does all 3 of those things. Ernie, any other question?

No. I just -- I guess, what do we have to do to get $30 million, $40 million, $50 million in revenue and get our stock back up. That's just -- I'd like to hear what your color is on that and where you think the next area of growth is going to be. Obviously the barZapp is very interesting, but you said that you're getting more press on it that you are going to get a lot of sales. Am I correct there? And where do you think you can really, really start to shoot out some serious revenue from?

Okay. You're right about barZapp. But I've said that last quarter, and I want to repeat that, I don't expect that to be a huge revenue maker. I view it as an indirect revenue generator. It shows other people the capability we can do to the TWIC sellers and people. Let me add, I think the Software as a Service is going to be a revenue generator. The increase in government is going to be one, and we're going to keep increasing sales force and get out to meet with more retailers. We're a small company and so when we hire more salespeople, we literally meet with customers that haven't heard of our product before. It's not they don't like the product. They haven't heard of it before. So we're going to keep doing more of that. Let me take a question from Alan [ph]?

I came up in the elevator with Dian, and one of the questions I've had on my mind, I posed to her because she's right there with public relations. And the question is, how are we doing with institutional investors and isn't it difficult as the Dickens to try to get us a serious institutional investor involved with our stock when it sells at under $0.50 a share?

Okay. It is difficult. But the way out of this is to increase revenue, increase sales and keep doing what we're doing, get the share price up, and then they will be more invested. I've kind of -- I don't know if I'm picking the right words, but throttled back a little bit on meeting with investors and doing roadshows, and meeting with new investors over the last year. Why? Because I wanted to rebuild the company. Well Bill and I are spending time this week with several investors and other groups. The time is now to start telling the story. The problem is when we first take over, and you say, hey, I'm going to do something, it's all talk. And you can talk all you want, but they'll say, "Well, I know what I'd say. Okay, well I'll see. I'll wait a few quarters and see what you're going to do. Are you really going to make your numbers? How do I know you're going to turn anything around?" So we needed to put our heads down, work hard and put a few points on the board before we could go out and talk. So that's what we did, but the IR portion of this is very critical, and now the time is right to do that. Okay. And we'll close with Mr. Bendle [ph]. You got the last questions, sir.

I hear what you're saying about you're going to wait and see how the next quarter, the next quarter. When I saw the numbers come out this morning, at 7 0 1 [ph] like it was yesterday, I was very pleased and happy to see that turnaround because I really don't care. I look at companies like this on the bottom line. I look at the top [indiscernible] sales are often growing. What -- when the SEC did, whatever they did to look at, I sometimes wonder, here we've traded well over 0.25 million shares today, and the stock was up about I think 20-some percent to $0.54. Not a lot of money even if you buy 1 million shares. And given what you've put out today, if I were, a, fund that could buy stocks under $5, I'd want a few million. And here it's come all the way back to $0.47 from $0.55. It almost seems as though, everyday that not a natural seller, and what I mean by that, that is just not mom-and-pop waking up at 3:00 and deciding to sell their 508 share -- it looks the way it trades and the way that I see it, algorithm-wise or whatever you want to call it, that its almost manipulated for someone that doesn't want it up. Now the fact, that's not correct 100%, but to see 0.25 million shares trade up as strong as it does, and then to come down after this meeting, which was a good meeting, an optimistic meeting going forward, they would have been better off selling this morning at $0.55 than they would have at $0.47. So at some point maybe the Board should say, "You know, we're going to look into this." Why this happens to the trade after the market closes, which is legal, but I noticed the other day, a 18,000, 20,000 shares print went on down $0.01 or $0.02 after 4:00. And yet it was calculated in my P&L that day after 4:00, which normally doesn't happen so. Anyway...

Okay. Well, I can't comment on a specific trade because, one, I don't even know what it was, but even still just typically that's not what we do. But some of that logic is based on, if you were a day-trader, yes, maybe it would have made sense to trade at the numbers you talked about. I'm looking at it in a more long term and also, my job is to work on revenue, work on sales and try to get the volume of the shares up and just keep doing what we're doing. If we get that going, some of the other problems take care of themselves. Well, I appreciate all of your questions. For those who want to -- we'll take a small break, and those that would like to see a demonstration, Terry Thiele is an outstanding demonstrator of our products, and he will show you. So anyway, thank you, again, for the call.