William Roof - Chief Executive Officer Bill White - Chief Financial Officer Robert Williamsen - Chief Revenue Officer Paul Fisher - Vice President of Sales

Jim Kennedy - Marathon Capital Market

Good day and welcome everyone. Thank you for joining us today for the 2016 Second Quarter Conference Call to discuss Intellicheck Mobilisa’s results for the fiscal quarter ending June 30, 2016. My name is Rob and I will be your operator today. In a moment, I will call upon Intellicheck’s CEO Dr. Bill Roof, who will lead today’s call and introduce the members of the Intellicheck Mobilisa management team who will be participating in today’s conference call. Following the management’s prepared remarks, we will open the call up for questions. Before I turn the call over to management, I will take a few minutes to read the forward-looking statement. Certain statements in this conference call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. When used in this conference call, words such as will, believe, expect, anticipate, encourage and similar expressions as they relate to the company or its management, as well as assumptions made by and information currently available to the company's management, identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs about future events. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances and the company undertakes no obligation to and expressly disclaims any obligation to update or alter its forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise. Additional information concerning forward-looking statements is contained under the heading of Risk Factors listed from time to time in the company's filings within the Securities and Exchange Commission. Management will use the financial term adjusted EBITDA on today’s call. Please refer to the company’s press release issued this morning for further definition of in context to use of this term. I would now like to introduce, Dr. Bill Roof, Intellicheck Mobilisa's Chief Executive Officer. Dr. Roof.

Thank you. Good day and welcome to the Intellicheck Mobilisa Q2 2016 earnings call. Today, we will present corporate earnings information for the quarter ending June 30, 2016. After our prepared remarks, we will answer questions from shareholders. Our Chief Financial Officer, Bill White will now review the quarter ending June 30, 2016 financial results. Bill.

Thank you, Bill, and a good day to our shareholders, guests and listeners. I would like to discuss some of the financial information that was contained in our press release for the second quarter ending June 30, 2016, which we released this morning. We anticipate that our quarterly report on Form 10-Q will be filed with the SEC this afternoon. Revenue for the second quarter ending June 30, 2016 was $940,000 versus $2,292,000 for the previous year. Gross profit as a percentage of revenues was 79.6% for the quarter ending June 30, 2016, compared to 45.4% for the quarter ending June 30, 2015. The increase in percentage is due to higher revenues on our SaaS model and lower equipment sales that historically resulted in lower margins. Operating expenses, which consists of selling, general and administrative, and research and development expenses increased $269,000 or 12% to $2.528 million for the three months ending June 30, 2016 compared to $2.259 million for the three months ending June 30, 2015. This increase is primarily due to accelerated R&D efforts on two new products our Retail ID mobile product we launched in May, along with another product, we will be announcing shortly. In addition, severance package in the current quarter to the former officer pursuant to an employment agreement to repay through May 2017 impacted the quarter. Q2 2016 operating expenses reflected a decrease of approximately 400,000 in operating expenses over Q2 2016. With further significant additional cost reductions to take effect in Q3 2016. Adjusted EBITDA for the quarter ending June 30, 2016 was negative 1.293 million, compared to negative 809,000 in the quarter ending June 30, 2015. The company posted net loss of 1,775,000 for the three months ending June 30, 2016, compared to a net loss of 1,214,000 for the quarter ending June 30, 2015. Interest income and expense were insignificant for the three months period ending June 30, 2016 and 2015. Now I would like to focus on the company’s liquidity and capital resources. As of June 30, 2016, the company had cash and cash equivalents of approximately 4 million, working capital defined as current assets minus current liabilities of 3.2 million, total assets of 16.1 million and stockholders’ equity of 13.8 million. During the six months ending June 30, 2016, the company used net cash of 1,961,000, compared to generating 4,937,000 for the six months ending June 30, 2015. The use of cash takes the consideration the repurchase of 979,000 shares of the company’s common stock for approximately 1,096,000 in March of this year. Cash used by operating activities was 2,625,000 for the six months period ending June 30, 2016, compared to 2,495,000 for the same period in 2015. Net cash used in investing activities was 20,000 for the six months period ending June 30, 2016, compared to 197,000 for the same period last year and we generated cash of 684,000 in financing activities in 2016 compared to generating 7.629 million in financing activates in 2015. The 684,000 represents the profit that company recognize from costs associating with purchasing shares from the former CEO and selling those shares back into the market. On October 5, 2015, the company entered into a two-year revolving credit facility with Silicon Valley Bank secured by collateral accounts. The maximum borrowing under the facility is $2 million. At June 30, 2016, there were no outstanding borrowings under the facility. And we currently anticipate that our available cash, as well as the expected cash from operations and the availability under our credit facility will be sufficient to meet out anticipated working capital and capital expenditure requirements for at least the next 12 months. As of June 30, 2016, we had net operating loss carry forward of approximately 2.2 million. I’ll now turn the discussion back to Dr. Bill Roof, Chief Executive Officer. Bill.

Thank you, Bill. We welcome our longstanding and new investors to our call today. The world is a very different place than it was only a few short years ago and as we witnessed threats of violence to our citizens at home and abroad continue to escalate in frequency, complexity, and effectiveness. Intellicheck provides proactive solutions that help safeguard our citizens, their assets, workplaces, and the facilities that where they conduct business. We are thought leaders and focus on our mission as we design and deploy approaches that leverage our extensive pattern portfolio as well as other key technologies. We visualize and develop layers of security that interoperate seamlessly to access and identify threats at the early as possible time and as far away from their targets as possible. This is what we do and the time has never been more critical. Today, we will discuss our progress [in pivoting] (Ph) the company to take full advantage of high margin recurring revenue business from these situated and designed to identify and help counter a host of threats facing our home land and citizens across our market verticals. For example, Q2 revenues from last year included overt $1 million in low margin hardware sales to a major international telecommunications corporation and approximately 269,000 in low margin revenues from our wireless business unit that we divested later in 2015. You will see a shift from lower margin, higher revenue business from this quarter - last year to higher margin business this quarter. We have made the appropriate business adjustments to meet our goal of achieving sustained profitability and top, bottom growth within the next nine months. You might recall that in Q1 this year we articulated our plan to staff and train our new sales force and we have accomplished that goal. Q2 saw the company build a new sales force from the top down to move our new products emerging from numerous pilots into our verticals where we expect them to generate high margin recurring revenues. In Q1, we also stated that we would decrease expenses each quarter as the year progress. You can see that we have achieved a significant expense reduction in Q2 over Q1, even in the phase of one-time costs associated with activities that include employee severance and a public offering of our stock. We are on plan for expense reductions in Q3 that will be greater than reductions we implemented in Q2. We see the strategy we planned articulated to our shareholders and we now began implementing. Now entering into the next phase, many of our vertical markets are cautious of new technologies and our pilot programs were necessary to prove the value of our products and to give our early doctors time to gather data and to calculate return on investment. Our customer enthusiastically report that ROIs are both quick and significant. We know have solid live performance data from our customers that we can use as we increase market penetration and as a basis to enter pilots and to generate more quickly. For example, we are currently working with eight major retail ID customers, four are in pilot phase and four decided to skip pilots and move directly to implementation. This was based on strong supportive references from our earlier adopters. Once fully installed, these eight clients represent the potential for over $5 million in high margin, annual recurring revenues. Our installed base for Age ID continues to grow and we are now in pilot with state [owned] (Ph) alcohol control agencies in multiple states. We are excited that all our new products we developed over the past 18 months have been accepted by clients across our verticals. All clients who have completed pilots with Age ID, Law ID and Retail ID have moved to the next phase of signing licensing agreements for the products. Not a single client who participated in pilot for our new products has uninstalled the product after pilot. They are now paying customers. In previous addresses to our shareholders, I focused on five main areas and talked about progress in each. Those are resources, markets, products, processes, and intellectual property. Resources, our new product developed in 2015 in the first half of 2016 now have proven results through pilots within our verticals. For example, within our Retail ID vertical, we are moving ahead implementing with a major financial institution without the need for a pilot based upon references from our previous pilot customers. This was the plan and process we presented to shareholders in the past and we are now seeing at yield results we expected. As stated last quarter, we continue to make major enhancements in our sales and product development organizations, Paul Fisher who is online today and his new sales team has deep connections in our retail and banking verticals and the team is sharply focused and diligently working to leverage our experience and contacts. We also added a new director of Product Development, Frank Lubin to help lead our engineering organization forward with our new and innovative product that solve critical real world problems. Frank an expert in cloud based software products joined us in July and is already making significant contributions to our team, products and value propositions for our customers. Moving onto markets, in each of our core markets, defense, law enforcement, hospitality and retail we have identified and are pursuing new business segments in addition to our traditional target customers. For example, we have identified within our defense market two large segments for our Defense ID product and Law ID products. We are about to enter a pilot with a new customer, in a new segment that represents a potential for very large installed base with extremely significant initial and recurring revenues in eight figure range. A number of Law ID installations in several states are moving through the implementation stage. Recent technical evaluation of our Law ID product by federal law enforcement agency resulted in an opinion that our system meets or exceeds their standards for authentication, data security and management of personally identifiable information. This is a green light to move ahead with law enforcement customers, who are waiting for the results of this technical evaluation. We are also bundling Law ID with Defense ID in a number of instances to provide our clients with a [rolling] (Ph) capability that provides instant threat identification anywhere on the facility beyond the traditional protection at the entry points or gates. 247 customers in 17 states now use our Age ID product to stop underage drinking. Additionally, a number of law enforcement agencies from cost-to-coast use Age ID to assist their alcohol sales enforcement missions. Our digital marketing metrics indicate that awareness of the company and our products is increasing throughout our markets. We recently planned and implemented a social media presence that includes Twitter, Instagram, Facebook, LinkedIn and YouTube. You can find us under the tag IntellicheckIDN, our social media initiative is raising awareness and allowing clients and potential clients to participate in the online dialogue about the value our products bring to our defined markets. Our strategic communications initiatives continue to raise awareness of our products. We have a number of key media events from Q2 and many are referenced on our website. We invite you to visit the Newsroom on our website intellicheck.com to see how our customers use and appreciate our products. Our access to the media and their corresponding support continues to grow and evolve as we see increasing momentum and product awareness and value across markets. Products, during our Q1 earnings call, I commented that our research and development costs for that quarter were unusually high and that you will see a decrease in expenses quarter-by-quarter until we flatten. We expect the flattening to happen in Q4, our Q2 expenses were down significantly versus Q1. We expect operating expenses to decrease much further in Q3. The new products we developed in Q2 are now proven in pilots and we are moving these customers to our high margin recurring revenue model. On Wednesday, May 11, we announced release of another new product Retail ID Mobile we have develop and released Retail ID Mobile in response to our retail customers requirements for a fraud prevention solution that avoids the cost and resource expenditures associated with point-of-sale integration. Many of our customers refining got a solution allowing more store personnel to move about, and address customers in a warmer and a friendlier manner, versus being separated by a checkout counter provides a better overall customer experience. Because Retail ID Mobile can operate autonomously without the needs integrate with customer’s point-of-sale systems, we announced our sales cycle and the retail vertical compressing and enabling us to close business more quickly. Q1 costs of development this product was high due to the compressed development schedule and we are announcing the results we expected. As we move forward, we will continue to enhance our products and ensure Intellicheck maintains its leadership position in our verticals. We are pleased with our Law ID product. Intellicheck Law ID enhances an officer situation of awareness by minimizing the loss of visual contact with an unknown person during field contact. With Law ID, we also scan the context ID barcode typically a drive license and the ID s centrically authenticated on the officer’s mobile devices. Critical data fields that indicate the threat level are highlighted in red, yellow, and green and are visible at a glance. Having authenticated the context identity, the officer can act accordingly, which can immediately deescalate potentially time situation. Law ID instantly access critical authoritative data sources, increases officer and citizen safety, provide the officer with accurate relevant data at a glance and supports faster more accurate reporting. We currently have agreements with number of law enforcement agencies in seven different states and we are in the process of connecting to the state law enforcement networks. Once connected to these networks that give us access to a variety of authoritative data sources, we will begin rolling out Law ID and these agencies. Our recent green light technical evaluation from a federal law enforcement agency provides us with the support we now need to move ahead for these pending installations. Selling age restricted products like alcohol and tobacco is a compliance challenge, the risks and cost associated with non-compliance are high and rising. Our Age ID product instantly authenticates identification documents, such as driver licenses, so our retailers immediately know if the customers’ ID is fake. That reduces risks of non-compliance without slowing down the purchase transaction. Age ID works with mobile devices or integrates with existing point-of-sale solutions. With the ability to read more than 200 unique barcode formats from all U.S. States, Canadian provinces and many Mexican driver licenses. In addition to other U.S. government forms of ID, Age ID provides the market leading solution for compliance with laws and mitigating the risks associated with underage drinking. Age ID also offers regulatory compliance audit capabilities, often needed by proprietors to demonstrate compliance with state regulations or to earn discounts from their liability insurers. Our Age ID product is gaining traction within our intended market, as well as in some new and previously unforeseen ways. We now see law enforcement officers from state down alcohol control bureaus and police department fly squads using Age ID to catch underage drinkers and those who sell to them. This is happening coast-to-coast in some of our nation’s largest cities. We are pleased to support local government initiatives to curb under aged drinking and we are excite about the exposure our Law ID product and Age ID product give us to law enforcement. Processes, in Q2 we began implementing new processes within the product development, customer support organizations. For example, we are implementing lean development processes and enhancing our software quality assurance in customer support organizations. As we move out of earlier adopter stage, our most recently developed products, we also transition to processes that support sales and product scalability and support. In the area of marketing and public relations, we also implemented a social media outreach process that is building awareness and gaining measurable momentum. Off note, Joseph Gunnar recently initiated analyst coverage of our company and you can view that coverage on the Joseph Gunnar website. Intellectual property. We continue to vigorously defend our intellectual property within the legal system. This includes law suits filed with claims based upon patent infringement as well as numerous actions against [indiscernible] that were using our company name, trademarks and other intellectual property without permission. We continue to be vigilant and to protect our shareholders investments and company’s intellectual property. We expect at least one new patent to issue during Q3 this year and we will announce these events in the newsroom section of our website. Conclusion, we continue to implement our strategy defined by our five pillars as we focus on building long-term shareholder value. One, to operate as efficiently and effectively as possible. Two, to focus on developing our key competencies and to world-class products. Three, to manage our product offerings with a goal of focusing on value and scalability to our customer base. Four, to establish a position of market recognition and leadership based upon our core competencies and world-class products. And five, to define, implement and nurture a culture that supports this transformation. All five pillars support our ultimate goal of increasing value to our shareholders, our employees and our customers. We are excited and optimistic about our progress and expect our momentum to increase throughout 2016. We believe we are on schedule for breakeven and sustain profitability quarter after quarter year-after-year during the next nine months. Customers needs and appreciate our products and services. We believe our decision to invest in our five key areas were correct and are beginning to generate the returns we expected. Thank you for your attention today. Our outlook is extremely optimistic and we look forward with great enthusiasm to the second half of 2016. I will now turn the call over to Rob, who will take questions. Rob.

At this time, we will be conducting the question-and-answer session. [Operator Instructions]. Our first question comes from Jim Kennedy with Marathon Capital Market. Please proceed with your question.

Hi Bill.

Good morning Jim.

Thank you for that comprehensive update, and it’s kind of rare out of small companies, so I’m glad to hear it. I had one quick question for you, relative to Law IDE and your ability to access criminal data basis. And we talked about this before where it was a state-by-state activity and I believe you were trying to put something in place that would allow you to go to the states within having to resell that particular access ability. And I don’t know if national organizations that control that data or not. But where are you in that process that would make it easier for you to go to each state.

Thanks for the question Jim. there are ways for us to avoid the lengthy and costly state-by-state cope up and we have identified those methods and we are well down the path to achieving the scalability that we are hoping to get.

So that would essentially - I don’t want to use the shortcut but somewhat streamline your ability to approach each state and say we have already got that type of access now let’s run a pilot or let’s get going?

Absolutely, it compresses everything, it moves the revenues in more quickly and as I mentioned, that some of our other products the results of our Law ID pilots are really, really good and we are reaching a point where we think we won’t have to do pilots anymore, we are ready to go. Every time you can avoid 30 day or 60 day pilot, or 90 whatever the customer asks for and move straight to a contract that that’s generating revenues, that’s a wonderful thing and that’s our scalability goal and like I said, we are well down the path to achieving that.

And will you be able to announce such or anything?

We will, that will be this year, it won’t be next year and we are hoping to be able to that. So we are very excited about the opportunity.

Okay. Thank you very much.

Thank you.

Our next question is from [Tom McGuire] (Ph) a private investor. Please proceed with your question.

Good day. Thanks for taking my question. I have two questions on behalf of Dennis Van Zelfden because Dennis has Jury duty and he provided me with some questions. First question concerns Law ID and I do know you mentioned that in your prepared remarks that everyone or every police office department that has taken on Law ID has not uninstalled it and they are now paying customers. So back months ago, I believe you started with three pilot programs and I’m wondering did all three of those, are they paying customers now and how many more pilots do you got going now and just talk about that if you don’t mind.

Thanks for the question Tom. We have a number, we have seven states that are interested. We have a number of police departments from small from [indiscernible] officers. There are different phases of implementations for pilots. We have some who have transferred that are already generating revenues for us. This 50 point has been waiting for this federal law enforcement agency to come out with a written opinion that we meet all of their data integrity requirements. And the other issue has been that the states have different way that they define the federal data integrity requirements and to get them all aligned with the Federal Government has been a challenge that we have been able to overcome. So we have a number of states in the implementation process that includes having each state law enforcement network sit down with us and review every step of our technical process, how we encrypt our data, how we access their network to show them we can’t be hacked. We have to show them that we have spent money in penetration testing on our system and et cetera, et cetera. It’s a lengthy process. We found a way to scale around that and we are in - like I said, well down the road right now. So we are very, very excited about that number of police departments, different sizes who are in the implementation phase in many of them.

Okay. So this federal law enforcement the integrity thing, that should be approve this calendar year. Correct?

It’s already approved.

It is already approved. Okay.

It’s already approved. Yes. And we just got that approval few years ago. And that was actually at the request of state department of public safety, once the agency said we want to do this, but we are not sure, if we interpret your standards correctly. We are going to send you this whole technical package for the system and this law enforcement agency review the technical packages that it meets or exceeds our requirements. That’s the green light for us, we are very excited about that.

Okay. Thank you. Now you mentioned on the last call that there was a significant Southwestern United States Law Enforcement agency that was either piloting at or going to contract for this or whatever. Can you give me an update there?

We have an agreement with them, they are awaiting for their funding, their funding is coming from the federal level and its FY2017 money, which becomes available on October.

Okay. Now on Defense ID. You mentioned it was made either last call or a call before about a discussion with the major defense contractor regarding licensing your software and you did mention something in your prepared remarks about the eight-figure type contract potential. Are those two the same things or are they different?

They are different and the major contractor was not - that deal had nothing to do with the Defense ID that was another type of deal. We are still talking to them, they are in the process of forming a joint venture and that JV is going to license our intellectual property. So I’m not sure how long that’s going to take them, the joint venture is with the foreign company. That can take time, it’s not as easy as doing it here. But we don’t have that baked into the forecast. So it’s something that it’s going to be gravy if it comes across and it’s not taken any time or taken any of our resources, so it’s a great deal.

Okay. Good. And then finally, in terms of cash, you mentioned that you believe you can get to cash flow breakeven and sustainable profitable over the next nine months. So is that from today like so maybe by mid-year 2017 is what you are looking at something like that or maybe a little earlier like second quarter 2017. And that’s what I read from that remarks. And then the other question is do you think you will need more capital then, I know Bill White said that you got enough for a year. But you don’t want to go down into the wire either. So any way, can you just talk about cash needs between now and say when you expect to be cash flow positive.

Sure Tom. And that’s a very common question. We are going to be cash flow positive within next nine months. So we will bottom out at that point within those nine months, we will have plenty of cash at bottom point. We have some extensive forecast and we have gone over them line-by-line, we are cutting expenses. We have got all new sales force with and they are really, really wonderful. We are real happy to have them on-board. And I know a lot of folks at the same question Tom. So what I would like to do right now is introduce Paul Fisher and I think that having Paul talk about his background and what he has done to build the sales force and how he is going forward would be really, really good for the shareholders to hear. So Tom, I would like to introduce Paul, if you don’t mind.

Thank you.

Okay, thank you very much. Paul, are you ready?

I am, thank you Bill and thanks Tom for your questions. We recently added within the last quarter, four new sales veterans to our team, they bring with them significant contacts particularly in retail and are familiar with the challenges our retail partners experience in relation to fraud. They have been successfully on boarded and are well versed on our product portfolio and are already engaged with meaningful conversations with new customer prospects, particularly in the retail market. We have implemented a territorial sales strategy that plays within end market close to our customers to facilitate quick time to market and quicker revenue realization. Additionally, we performed a ton of market research across all verticals and have targeted and named countless things for prospecting across all of these verticals where we are currently engaged. This will allow us an opportunistic approach in prospecting and again bring high margin revenues more quickly to the organization.

Okay, thank you. Okay, well you know I understand that the quarter was kind of an apples versus oranges quarter. So that’s explainable, and it seems like you are making progress, so we just hope you just execute, so good luck to you.

Thank you very much. I appreciate that.

Our next question comes from Ryan Nelson with Special Situations Fund. Please proceed with your question.

Hey its actually [Alice and Ryan] (Ph). How are you guys?

Hi Alice and Ryan how are you?

Fine, thank you. Wondering if you could help us with what the annual value of contract signed today, given that you recognized one-twelfth a month. It’s hard to have any sense of what has been signed in just very recently and what the effect on the business might look like?

Hey Alice, its Bill White, I think a metric that will become more and more important as our SaaS revenue grows is the deferred revenue line in our financial statements. We should expect to see - we will expect to see growth in that which will take into consideration the deferred revenue from contracts that are amortized over the contract period whether it’s called for 24 months.

So the entire 12 months will be, will show up in deferred revenue.

Correct.

So if they are built quarterly, it’s not a quarter’s worth in deferred.

That’s correct. It will be booked at the time of contract and then amortized over the period of the contract.

And we will see that in this 10-Q?

Yes.

Okay. And when is the 10-Q expected to be filed?

[indiscernible].

Okay, and can you help us with the number of police - first off you said you had eight clients signed, four as pilots and four, four skipping the pilot. Was that specifically for Retail ID Mobile?

I’s for Retail IDE and Retail IDE Mobile. So actually Alice we have lots more done, but I was focusing on eight major that provided that big number with that $5 million of annual recurring, if we are rolled out all of their locations. Some of them want a point-of-sale integration; they want to be able to operate Retail ID from their cash register from checkout line. They have said we are going to go ahead and do it, we see the results from your other customers, we are going to go ahead and do that. And some Retail ID Mobile they want to deal with the point-of-sale integration. So there is a combination there, so some will be running it on smart devices, typically iPads and others will be, it will be fixed at the checkout counter.

Okay. If I’m looking here, it looks like on your balance sheet it looks like deferred rev is up a little bit too may be a $1.3 million call it not a lot trying to - actually in fact if you look at both deferred rev long-term portion and current portion, it looks flat relative to December 31.

As we are revenues Alice, what I was saying is that that will be a metric to focus on going forward. If you look at the revenues Q1 and Q2 it was pretty flat this year. As you see the sales growth, you will see that number grow as well.

Okay. But in terms of contract signed, it sounds like you guys converted a lot of trials in the quarter to contracts. It sounds like you signed a bunch of new clients and you are committing to being cash flow positive within nine months, which back of the envelope says is $2 million, $2.5 million a quarter of revenue, which is pretty far away from the million that you had in the quarter. I’m trying to understand how you get from here to there, is it contracts that have yet to sign?

Got it, I think I’m trying to avoid forward-looking statements here Alice and certainly want to talk to you about that. So what I would recommend is that we have a conversation like as we do from time-to-time with you guys in the near future and I’m going to avoid any forward looking statements and so forth. But I think may be some of these terms need better definition and I will be able to help you define the terms.

Okay. A traditional term used in SaaS is either billings or bookings, can you give us a bookings number for the most recent quarter?

We are looking at up, but the bookings are actually in the 10-Q.

Okay. We welts finish this offline. That’s fine.

Okay.

Thank you.

Thank you very much.

Our next question comes from [Anthony Marquize] (Ph). A private investor.

Hi, guys good afternoon. A couple of questions for you. first of all, let me back up by saying, I think you guys are doing a great job, but I think you need to be announcing a little bit more transparent about what I think are significant events. For example, you mentioned that you recently received the go ahead from these legal agencies. if I’m not mistaken, perhaps I’m using a wrong term, but you said you got that a couple of weeks ago. I think that’s very important to your business and I would suggest in the future that a press release might be appropriate. I think the problem that you have is you have a listed stock that trade for the $15 million market cap and I think anything you can do to bring attention to what I think is a phenomenal business, it would be appreciated by stockholders that’s just a general observation.

Certainly Anthony and we hear that from many folks, we appreciate your input. There is a real strategy at what we are doing here and I would love to be able to publicly announce things that are going on. But we have got some interesting opportunities that are tied in with Federal Government. And because they are tied in with the Federal Government. We are trying to avoid. I’ll just speak real honest with you. We are trying to avoid a full-blown capitation that where it’s incredibly expensive to right a proposal and then if you win any disclosed asset and it would be awarded two years later. And some of the information that’s important to us to drive the business. We don’t want to put out in the public right now, because that give somebody and opportunity to get in behind us and try to kill the deal. And so I'm balancing letting the shareholders known and you deserve to know and balancing that with trying to keep the competition at bay and have this small little company Intellicheck fill in there grab that market share without any type of legal activities stopping it.

All right. Okay. I appreciate that, but you know it sounds like that’s a great news. My two questions, talk a little bit, if you would about Visualant, you announce a deal with them. Could you just explain what you are doing and sort of what the next steps are and what you hope to accomplish. Because you mentioned that you had a contract, assuming your project was successful or collaboration successful that you had ready willing enabled buyer. So if you could just talk a little bit about Visualant?

Certainly, we are moving down the road with Visualant. They have a wonderful technology. We have the rights that technology for our verticals and for fraud prevention and anti-crime all the things that we are doing. The great thing about the Visualant technology is that the methodology to determine whether something is fake, being identification money, passports, et cetera or real can be done very, very inexpensively. There are other systems out there that can use light to identify the make-up of a document or whatever. But they are very, very expensive and a lot of them are considered intrusive and our system is not. I will be quite honest with you, the department of defense has a requirements that badge is issued and facility to have built in any kind of fit technology. This is perfect for that, we are getting ready to implement that in a pilot to this branded technology at a very large military base. And that helps them comply with the department of defense regulations. We knew this going into this deal and we were able to get this technology and license it, we have to look at what the requirements that were coming out of Federal Government would make our customers do. So we are helping there. We also have a very large commercial company in the ID space, they create identification documents for the government. And we are working with them right now and we are starting to build the catalog of signatures for the IDs that they make. We see this is a game changer and our relationship with Visualant is extremely strong. And we are always starting to implement the technology in test basis. Hope that answers your question Anthony.

No, you did. I appreciate it. The other couple of questions I had. Number one, do you work with any - I mean it seem to me - I don’t think you have cover this. But talk a little bit about your retail ID product. Are you working just with the store themselves or why wouldn’t the credit card processors be interested in this type of products. I mean, if it’s working really well, you mentioned [indiscernible] markets and a couple of others in the past or it’s on your website. Why wouldn’t the credit card processors be interested in adapting this across the Board?

Another great question Anthony. I’m going to ask Paul Fisher to responded that. He is really hitting that area hard and he is an expert in that filed. Paul, could you responded that please?

Yes, definitely. Thank you, Anthony. So your statement is very true. Credit card issuers in the space are very interest in our offering, in the retail market and particularly around addressing fraud. We are in active discussions with five of the top 15 issuers right now. And have a targeted list that the sales team is addressing or attacking aggressively both respective you get in front of those other issuers. It’s a big piece of our growth for the retail space and those conversations are being everything to-date and the remaining issuers are definite target for this quarter.

I see, okay, that’s great. And could you just elaborate a little bit more on your intellectual property initiatives. I know that you are currently filling if I’m not mistaken Honeywell. And I think, could you elaborate where you are in the process, what you are spending on that and so on?

Sure. We are filling Honeywell. We started by serving a smaller company last year. We have had the motions that we would expect from any law suit of this type through the core system already and most of our claims have been up held. As far as Honeywell goes, I think that’s an area of public record. They have asked to dismiss the case that has been rejected by the court, so we are moving ahead with Honeywell. With Honeywell, we are on a contingency basis and it’s causing us almost nothing. But it does causes time, because we have to response your requests from the defendant for information and so forth. We are handling that very well, but the cost is negligible in this case.

Okay. And final question on intellectual property. Could you talk a little bit about the recently issued patent and if I’m not mistaken its fingerprint or biometric, relating to biometric identification. What that means and what your strategy is in terms of potentially enforcing that patent?

I can tell you what it means, I don’t really want to go into strategy right now. Because we have an outline on the strategy, but I certainly don’t want to put that out in public.

Okay.

So part of that patent is very important. What the patent does is it stores an image of a fingerprint and ID card on a chip an ID card. And this is a type of card that’s called the PIV by the Federal Government or TWIC, a lot of these cards store a fingerprint of the owner, the cards owner. And when the card is presented for access to a facility, it’s inserted into a reading device and it holds that encrypted fingerprint image up and then the owner or the supposed owner is ask to put that finger onto a reader and it matches it and says yes, this is the owner of that card. So what that does is, that tells that’s not a stolen card and somebody who has stolen is trying to gain access to a facility. So that’s a very, very critical in my opinion patent for us to have and we purchased that patent last year in a portfolio from an [estate] (Ph).

Okay. And is this a technology that’s widely being used today and again I'm not trying to talk about strategy, but is this something that potentially is being infringed upon by a large number of organization that’s what it sounds to me?

We need to get you into the POW interrogation business Anthony. Yes, it is being used, we believe the technology is being used in a number of ways by the government and by commercial businesses. We haven’t done a full evaluation of that yet and we are going to be looking at that.

Great. All right, I’ll cede the floor, thanks. I appreciate you having patience in taking the questions.

No, it’s always a pleasure to speak with you Anthony. Thank you.

Ladies and gentlemen, we have reached the end of our question-and-answer session. I would now like to turn the call back to Dr. Bill Roof for closing comments.

Thank you. We continue to implement our strategy defined by our five pillars as I told you. We are going to do that through the rest of the year. We also told you that we are on course to breakeven and sustained profitability over the next nine months. I want to thank you for your attention; I want to thank you for your patience. We enjoy speaking with the shareholders and hopefully, we will be able to visit some of you over the next few months as we travel back East. Thank you very much.

That concludes today's conference.