Bill White - Interim CEO, CFO

Mike Grondahl - Northland Capital Markets Tanner Hoban - Oppenheimer Barry Bergman - Alba Investments Greg Weaver - Invicta Capital Jim Kennedy - Marathon Capital Management

Greetings, and welcome to the Intellicheck Third Quarter 2017 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Bill White. Thank you Mr. White, you may begin.

Thank you for joining us today for Intellicheck's Q3 Earnings Call. This is Bill White, Interim CEO and CFO. Before we start, I will take a few minutes to read the forward-looking statements. 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, 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 resulting from changes, new information, subsequent events or otherwise. Additional information concerning forward-looking statements is contained under the heading of Safe Harbor Statement and Risk Factors listed from time to time in the company's filings with the SEC. Statements made on today's call are as of November 14, 2017. Management will use financial term, adjusted EBITDA, in today's call. Please refer to the company's press release issued this afternoon for further definition, reconciliation and context for the use of this term. We also anticipate that our quarterly report on Form 10-Q will be filed with the SEC later today. Before I discuss the financial information that was contained in our press release for the third quarter ending September 30, 2017, which we released a short while ago, I will begin with the statement from our Board of Directors. As you are aware, Dr. Bill Roof is no longer serving as the Chief Executive Officer of Intellicheck. The board believes that it is important to strengthen our leadership team with a Chief Executive Officer who has a combination of sales, executive leadership and technology expertise who will enable us to achieve our strategic goals both on time and on budget. We hired an executive recruiter and our search for a new CEO is well underway. Our search firm is committed to hiring a CEO by the beginning of 2018. In the interim, Bill White will serve in this critical leadership position and as a candidate for the role on a permanent basis. We will provide information regarding the search when there are appropriate details to share. We appreciate the important contributions Bill Roof made and we are pleased he will continue to advise us to ensure an effective transition. I'll turn now to the third quarter results. Revenue for the third quarter ending September 30, 2017, was $967,000 versus $1,214,000 for the same period last year. Our SaaS revenue was approximately $520,000 for Q3 of 2017, an increase of approximately 85% as compared to $280,000 for Q3 2016 and a 73% increase over approximately $300,000 in Q2 2017. Gross profit as a percentage of revenue improved to 89.1% for the quarter ending September 30, 2017, compared to 77.1% for the quarter ending September 30, 2016. Operating expenses, which consists of selling, general and administrative and research and development expenses, increased by approximately 16% or $267,000 to $1,944,000 for the 3 months ending September 30, 2017, from $1,677,000 for the 3 months ending September 30, 2016. The increase in OpEx over last year was due primarily to increased engineering, consulting, sales and engineering salaries and legal. The company posted a net loss of $1,075,000 for the 3 months ending September 30, 2017, compared to a net loss of $727,000 for the same period last year. Adjusted EBITDA for the quarter ending September 30, 2017, was a negative $888,000 compared to a negative $490,000 in the quarter ending September 30, 2016. Interest and other income was negligible for the quarter ending September 30, 2017. I'd like to now focus on the company's liquidity and capital resources. As of September 30, 2017, the company had cash of $8.9 million, working capital, defined as current assets minus current liabilities, of $8.6 million, total assets of $20.4 million and stockholders' equity of $18.8 million. During the 9 months ended September 30, 2017, the company generated net cash of $5,849,000 compared to a net use of cash of $2,419,000 for the same period last year. Net cash used in operating activities was $2,896,000 for the 9-month period ending September 30, 2017, compared to $3,471,000 for the same period in 2016. Net cash provided by investing activities was $17,000 through the quarter 2017 compared to a net cash used of $22,000 for the 9-month period ending September 30, 2016. And we generated cash of $8,728,000 from financing activities in 2017 compared to generating net cash of $1,074,000 from financing activities in 2016. On May 22, 2017, the company entered into a 1-year revolving credit facility at Northwest Bank. This agreement allows for a maximum borrowings of $2 million secured by collateral accounts and bears interest at Northwest's money market rate plus 3%. As of today, there are no amounts outstanding under this facility. We currently anticipate that our cash as well as cash from expected operations and available under our revolving credit facility will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months. On August 9, the company closed a public offering of 4,168,750 shares of its common stock at a price of $2.25 per share. Gross proceeds, before underwriting discounts, commissions and estimated offering costs, were estimated at approximately $9.4 million. Intellicheck intends to use the net proceeds from the offering for general corporate purposes, including product development in key markets, the integration of new features into existing products and expansion of our sales force and engineering staff. As of September 30, 2017, we had net operating loss carryforwards of approximately $7 million. Before I start the third quarter discussion, I would like to take a moment to reiterate what Intellicheck does in the marketplace. We have many products in our offerings such as Retail ID, Retail ID Mobile, Retail ID online, Law ID, Age ID, Defense ID and our TWIC program. The fundamental technology common amongst these product offerings is our ID check web service, which includes our database of authentic jurisdictional driver's license formats and thousands of "rules" we have developed in program for catching fraudulent documents. These proprietary rules are in part what makes our product offering unique and differentiated. That's our focus and it's basically the basis of everything we do. In the retail and financial institution verticals, our products are used to combat the ever-increasing fraud problem. For example, retailers and financial institutions use our software to ensure they are extending credit to a person with authentic credentials. Multiple concession vendors and state alcohol authorities use our product to ensure that they are not selling age-restricted products to minors. Hospitality vendors such as hotel and property owners use our solution to mitigate fraud and enhance the customer experience. Law enforcement personnel use our software to authenticate an individual's identity and to ascertain the criminal history of a person they are questioning right on their smartphone. The military uses our software to ensure that the person they are allowing access to a military base has an authentic ID and in some cases, they perform a criminal history check as well. These use cases have one thing in common, they all involve the authentication of an identity credential being provided. I am proud to say that our software is being utilized by some of the largest and most prestigious companies and agencies in the world. A recent pilot program with the top 5 bank retail client under a master services agreement showed our software saving approximately $16,000 per month per store in just the fraud that was stopped at the point of scanning the driver license. This master service agreement has now led to 5 additionally retailers using our product and there are additional pilots planned for their merchants by the end of the year. We are off to a good start and believe that there is a significant opportunity ahead for this top 5 bank's estimated 18,000 merchants that they serve. I'd like to highlight a couple of significant announcements made during the quarter that include the nationwide rollout of a prominent U.S. department store that will generate more than $825,000 in annual recurring SaaS revenue. To put this in perspective, that is more than 20% of total company revenues achieved last year and it is an excellent example of the significant impact that signing on just one large retailer can have on our business. We are approaching the retail landscape from 2 sides: major retailers are being targeted directly by our sales team and we are working with leading financial institutions that are serving as the merchant's bank for these retailers. We believe that this expansion of our retail portfolio of SaaS products allows us to work with a variety of retailers to stop their various fraud issues, be it in store or with our online authentication solution that's gaining so much traction. I would like to take a moment to clarify the different products that are being used by our retail customers. Retail ID is available on a few different platforms. The product was initially introduced and integrated into a customer's existing point-of-sale system with the major advantage of not requiring an expensive upfront hardware purchase. For those customers looking for in-store mobility, we introduced Retail ID Mobile. In fact, we recently announced that this product is currently being deployed at another luxury department store chain. Retail ID Mobile is installed on either an iOS or Android device and allows the retailer anywhere in the store to authenticate an ID prior to opening up a new credit account, engaging in a card-not-present transaction or taking a return without a receipt. For those not aware, a card-not-present transaction is when a customer who is a cardholder of a particular retailer doesn't have their card with them but still wants to charge their purchase to their account. This is an area of fraud where, historically, all criminal -- all the criminal needed was the customer's information and a fake ID matching the name. With our technology, the driver license is authenticated and the transaction thwarted when the ID is shown to be fake. This combined with not taking returned merchandise from customers who try to use fake IDs to return stolen items are 2 ways in which retailers have the opportunity to quickly and efficiently reduce fraud through the use of our technology. We are also addressing the ever-increasing fraud occurring in online e-commerce transactions. A recently deployed Retail ID online product is now being used by retailers to simply and effectively stop fraud. In one example, a customer applying for a credit is sent a text message requesting that they upload a photo of the barcode on their driver license. This photo was processed by our servers in the cloud, where upon authenticating a confirmation code is generated to be added to the application form. This quick and easy method prevents criminals from taking illegally obtained customer-specific information and using it to open fraudulent credit accounts. As you can imagine, this technology is exciting both for credit card issuers and retailers alike. The initial use of this technology for a bank merchant customer very significantly reduced online fraud. We believe that this is the right product at the right time. In another example, we recently announced that an online retailer of vaping [ph] products has integrated Retail ID online to prohibit the sale of their products to underage customers. With this implementation, our ID authentication services are enabled following a shopping cart transaction just prior to the submission of payment. The business can be assured that the transaction is with the person of legal age. The public is protected and the business will not be in jeopardy of losing their license or being fined or prosecuted. Turning now to our Law ID product. For those of you not aware, Law ID is a software platform that runs on an Android or iOS device that provides law enforcement personnel nationwide with a new level of security that helps them safely and confidently interact with persons unknown to them. This state-of-the-art technology delivers real time authentication of scanned identification documents on a smartphone or tablet and queries law enforcement data sources, enabling law enforcement personnel to quickly review highlighted final query responses without losing contact with the individual. Once the identification is authenticated, Law ID enables law enforcement personnel to quickly deal with essential information from DMVs, state and federal law enforcement data sources and Intellicheck's proprietary databases. It provides indispensable data such as wanted person information, gang involvement, known or suspected terrorist data, violent felon information and other person-related records in the FBI, National Crime Information Center, NCIC, databases. Photos of encountered subjects are also included where made available by the state as well as search results of stolen articles, boats, weapons, vehicles and vehicle license plates. It's a very powerful software tool. In August, we announced the much-anticipated integration onto the Nlets nationwide network. This was a critical first step necessary for the rollout of our Law ID product. This milestone allows us to work with each state to implement the state's individual requirements to be approved to connect to their switch. Once connected to any state switch, Law ID can be enabled and used by any law enforcement agency within that state. We are now in the process of establishing that connection to each of the states. Though it has taken longer than expected to achieve these milestones, we continue to believe that Law ID is a compelling technology that will lead to a safer environment for officers and the public and will allow them to work more securely and efficiently. We currently have approximately 30 law enforcement agencies from 10 different states that have been waiting for this integration to be completed at the state level and we are in the process of turning on these states and onboarding these agencies with annual SaaS revenue anticipated to be approximately $1.2 million. During the quarter, we raised approximately $9.4 million to fund future growth and to provide additional sales resources in addition to general corporate purposes. We recognize that our products will need to be evolved with time and incorporate additional features as the market dictates and technology becomes available and commercialized. Biometrics, as an example, will continue to become more relative in the identification, authentication space. The company purchased the biometric patent in anticipation of this trend and has developed plans to incorporate biometrics into our future product offerings. Fingerprint technology on a cell phone, as an example, is a planned enhancement for our Law ID product development road map. This feature in this app will increase the functionality of the application and enable us to up-charge for this option. Hiring additional staff. One of the objectives of the recent capital raise was to hire additional software engineers to enhance the IT side of the business. The number of barcode scans have increased significantly. A year ago, Intellicheck was scanning tens of thousands of documents. Our web service is now scanning millions and we are planning for continued growth. In order to scale to meet this demand, we are adding new software engineers and also planning on doubling the size of our sales force. These initiatives are already underway. Turning now to the sales pipeline. Last quarter, we spoke about pilots with the potential to convert to contracts with projected annual SaaS revenue in excess of $3.4 million. I'd like to take a moment to bring you up-to-date on where we stand with this pipeline. We have converted approximately $320,000 of this pipeline so far from pilot to implementation. We are actively engaged with another luxury retailer who will be deploying to their 20 high-risk stores and follow on with additional stores in 2018. Another furniture retailer has concluded its pilot with a very successful result and we anticipate their 80 corporate stores to deploy in Q1 of 2018, these 2 implementations will result in approximately $350,000 in annual SaaS revenue. Additionally, we have two large pilots that we anticipate each generating approximately $1 million in annual SaaS revenue when implemented beginning in the second quarter next year. One is for our Retail ID product in a large fashion store chain with approximately 250 locations. The other is for Age ID in the hospitality space that I will go into in more detail shortly. Although these large contracts take time to get implemented, they will significantly positively impact our revenues when they go live. Last year, a retailer we anticipated go live in 2017 has also been pushed back to 2018 and that retailer will account for approximately $800,000 in annual SaaS revenue. This is a retailer who was brought to us by a channel partner, which is a relationship I will address in more detail in a moment. We are working strategically to maximize our sales efforts, focusing on the retail, law and financial services opportunities where our products have demonstrated incredible success or where we believe our biggest markets and opportunities are. We continue to build upon our banking relationships that are utilizing both Retail ID Online and on-premise products amongst their merchant base and bank operations. As I mentioned earlier, in May, we announced that a top five bank entered into a master service agreement with us. We have subsequently rolled out to five of its merchant accounts and we have several more that are either in pilot or planning to pilot, including another furniture store chain and a 95-store chain focused on tool and equipment sales. Our plan to leverage this bank's relationship is working and I'm very excited about the traction we are seeing. We have a significant opportunity to continue to build upon our success with this bank, which has approximately 18,000 retail merchant accounts in their portfolio. The point I'm making is that there is a significant addressable market for Intellicheck products, which are currently being adopted by some of the largest banks and retailers in the world. In addition to working directly with banks and credit card issuers, there are also channel partners who we work with to offer bundled products to their customers. This relationship has opened the door to another top five bank, also providing merchant services to some of the largest retailers in the country. We originally expected the first of 4 initially identified retailers to start producing revenue on October of this year. Although we have been delayed, we are on track again a first half 2018 rollout, not a pilot, with the previously mentioned national electronics retailer that we anticipate will generate approximately $800,000 in annual SaaS revenue. The current plan is to have 3 other major retailers of similar-sized opportunities flow sequentially from this bank opportunity. Other initiatives we are working on with this bank include installing Retail ID in all of their brick-and-mortar locations, Retail ID online and other enterprise initiatives. Turning now to Defense ID. We are operational in many major seaports, army facilities and other government facilities that have generated approximately $980,000 in revenue over the trailing 12 months. We are currently working several opportunities at the federal level to deploy our Defense ID and Law ID solutions at several agencies and departments. Age ID. During the second quarter, we completed a successful Age ID pilot for a concessioner at 5 large concert and stadium venues nationwide. The pilot went well and we are looking at a couple of different solutions for them to implement our technology. We have found that deployments of this magnitude can take a year or more to implement and we will keep you posted with our progress. As I mentioned earlier in my comments, this pilot is expected to generate approximately $1 million in annual SaaS revenue. We continue to target stadiums, concert venues and large hospitality companies for Age ID products as they continue to be more and more focused and concerned about underage drinking across the country. Turning now to our intellectual property. We have settled our first IP litigation case with Wizz Systems L.L.C. Although we cannot make significant comments about the settlement because of the agreement is confidential, it does establish a royalty amount precedent that we believe will be beneficial for our other litigation cases. Regarding our pending litigation with Honeywell, we currently have a trial date set for September 10, 2018. In conclusion, I'm very excited about the prospects that we have ahead of us and the position we have to take advantage of these tremendous opportunities. Numerous times, we have been successful in head-to-head competition, winning business with national name brand companies. Although it has taken longer than we hoped, we have demonstrated our software's efficacy in the numerous verticals that we serve and are building a positive brand in the marketplace. We are focused on building our SaaS revenue, which grew sequentially 73%. And as you can tell from my commentary, we believe that we have significant opportunities in sales pipeline that will continue to grow this metric. In my new role as interim CEO, I have been meeting with more of our customers and partners. Last week, I was at one of our top five bank customers discussing the expansion of our software enterprise-wide. I'm looking forward to sharing our progress in the coming quarters. I will now turn the call back over to the operator to take questions from our institutional investors. Operator?

Thank you. [Operator Instructions] Our first question comes from the line of Mike Grondahl of Northland Capital Markets. Please proceed with your question.

Yeah, hi. Thanks, Bill. A couple of questions here. Specifically on the doubling the sales force and adding some engineers, what have you done so far on those two initiatives?

[Technical Difficulty] and into specific numbers, but it's in process. We should have a full - we should have the full complement by early 2018 of the new employees. We want to find the right people.

Got it. I think I was muted for a second there. Did you just say for both sales and engineers that by early 2018 you'll have the people hired that you want?

Yes.

Okay.

Assuming we can find the right people, Mike. Particularly, in the sales roles, we are looking for very specific talents and background, primarily in the retail and banking verticals. So it's -- we want to find the right people.

Sure. Got it. And then can you -- Nlets, I didn't quite get what you think the timing is on that $1.1 million kind of in the pipeline starting. Do you have a sense for when that starts?

Yes. Mike, we are already turning on states. We should have 7 to 10 states turned on by the end of Q1 next year. So look for press releases as we light up these states, we'll issue press releases and let everybody know what we're doing.

Okay. So I think in August, we kind of thought it would take 60 days to turn on a state and we're kind of at the 90-day point. Is that just taking longer? Or kind of what's going on there?

Well, all of that is beyond our control, Mike. We can only move as fast as our customer. So that's why we are turning these states on in parallel rather than serial. So we have several states that are in process at any time. So -- and we should have -- I'm pretty confident we should have at least 7, up to 10 turned on by the end of Q1.

Got you. Okay. And then if you look at 2Q to 3Q, you sort of picked up, I think, it was $220,000 of SaaS revenue. How was kind of the pipeline or really the carryover into 4Q? Trying to get a feel for when some of those started, so how they'll be affecting the fourth quarter?

Right. Mike, I'm not going to give guidance on that but growing our SaaS as we've talked about before is a critical element for us and that's where our focus is.

Got it. Okay. And then maybe just lastly, when you were going over the pipeline, there was a handful of statements about 2018 either first quarter or second quarter. Is it fair to say that you haven't lost anything? It's just that some of these are taking longer than you might have thought earlier in the summer.

Yes. That's right, Mike. We haven't lost -- I mean, every one of our pilots has resulted in a successful outcome either in preventing age or in stopping fraud. So we haven't lost any business. We have 7 -- 8 pilots underway currently. We have 7 new pilots being scheduled and 7 that have been completed and we are in the process of deploying those pilots into full production. It takes -- again, we can only move as fast as our customers will move. Many times it requires IT support. So we're doing it as fast as we can. It's not as fast as I want but we are doing everything we can to make the process as quick as possible.

Got it. And just - I want to make sure I heard that right, so there are 7 pilots that are completed and those are moving towards a live -- generating revenue. And what's the revenue number behind those 7, yearly SaaS?

About $2.5 million, $2.5 million or so, approximately.

Got you. And then I think you had -- you said 8 currently in pilot?

Yes.

And what's the rough revenue number behind those?

Mike, I don't have that broken out right now.

Got it. If you had to guess? Is it another $2 million to $3 million or is it...

The 8 that are underway right now are on the smaller side. I would say it's maybe a couple of hundred thousand, maybe $250,000 in SaaS. Not a huge number.

Okay. And then there sounds like 7 new pilots that are getting teed up. Is that correct?

7 new pilots that are getting teed up, yes.

Okay, great. Thanks, Bill.

You’re welcome, Mike. [Operator Instructions] Our next question comes from the line of Tanner Hoban of Oppenheimer. Please proceed with your question.

Hey, Bill. Thanks for taking my question. It appears that SaaS revenue was pretty strong for the quarter, up over 70%. Wondering if you can help us understand -- you talked a bit -- a little bit on the call but can you help us understand some of the products that are driving that, may be outside of that large deal you did in the Northeast furniture store? And additionally, license revenue was down sequentially approximately 40%. Can you help us understand what were the soft points there? And how we can look at that license revenue softness going forward, maybe out to 2018 as well?

Yes. Tanner, license revenue -- what specifically are you talking about?

Outside of SaaS revenue. Just the -- looks like you did approximately $400,000 in Q3 as compared to $650,000 in Q2.

Yes. Tanner, that's revenue other than SaaS. So that could include hardware sales and other types of revenue. So it's not only license revenue.

Right.

Yeah. No problem. With respect to the SaaS, the majority of the SaaS is being driven by -- currently being driven by our retail product. Age is about 4%. SaaS was about 75% of our total revenue stream this quarter with -- excuse me, retail and age was about 75%. And our Defense ID product was about 25%. So depending on the mix that -- which is why our margins were higher because we have lower equipment sales this quarter.

Right. So I guess moving forward, should we expect -- was it just a seasonally soft quarter for the hardware sales and the license plus hardware sales? Or is that something that we should expect going forward around that $400,000 just in the shape of the new market dynamics?

Right. The equipment sales are -- they are hard to predict because they are sporadic and they are dependent upon our customers' projects. So it's not an easy number to forecast. With respect to just overall margins, I said it a couple of years ago when we were moving to the SaaS model that I expected margins to land and settle out in the 85-point range. I still think that's about right. Maybe a little higher than 85, but right in the mid-80s is where margin should shake out.

Got it. Got it. And on the margin discussion, actually, you previously guided EBITDA to be positive here in the upcoming quarter. I believe that's -- I guess, can you provide us with additional color on any sort of profitability guidance from...

Yes, sure. We had said that we were going to be EBITDA positive midyear in '18. I still believe we're going to be EBITDA positive and I'm forecasting EBITDA positive in '18. I'm just not saying mid '18.

Got it. Got it. And lastly, just in your search for your CEO, can you help us understand some of the key strengths Intellicheck is looking to, I guess, improve in its leader?

I can't rather than what the prepared remarks from the board. I really can't add any more to that.

Got it. Well, thanks, Bill. I appreciate it.

You’re welcome, Tanner.

Our next question comes from the line of Barry Bergman of Alba Investments. Please proceed with your question.

Hi, Barry.

Hey, Bill. How are you doing? He asked one of my questions on the CEO search and things like that and what was going on. But it sounds like the board's handling that in terms of going out and trying to attract people?

Yes. As a matter of fact, they'll be interviewing candidates this month.

All right. With the cash burn of about $2 million this year, is that where we are?

Cash burn so far this year...

I saw the expenses actually creeped up this quarter as opposed to -- on an annualized basis, I think the third quarter sort of -- annualized, it looks like they creeped up. I'm just wondering.

Yes. That was as a result of -- again, I think in the -- I said that in my script that the sales and engineering salaries and consulting and then some legal where the difference is, increases.

Okay, thank you.

You’re welcome, Barry.

Our next question comes from the line of Greg Weaver of Invicta Capital. Please proceed with your question.

Hi, Bill. I appreciate the detail on the pilots, that was helpful, also the EBITDA comment, thank you for that. One further question a little bit. So you're doubling the sales force and hiring engineers. I guess was there any -- as of how much you're doing on the engineering side in terms of increasing headcount?

7 or 8 people, Greg, right now is what we've got planned, that's in our plan.

For engineering?

Yes. We're about halfway there.

Okay. And are any of those folks like FAE, field application engineers or -- I'm just trying to get a sense about your comment about trying to - customers in terms of doing some of these rollouts. I don't know if there was anything on your side there that you feel with some extra people could go a little better?

Yes. That's -- when I made the statement that we scanned tens of thousands of licenses last year and now we're scanning millions, that requires support on the back end. So some of these -- some of this resource is going to going into product support. Some of the resource is going to be going into scaling our systems to accept this -- these types of volumes of transactions. So with the growth, there's just -- there's back end and engineering work that needs to be done in addition to looking forward and looking at the biometric technology that we're looking to incorporate into our products going forward. So it's both for customer support, existing customers, existing systems and looking to the future.

Okay. But at this point in terms of the number of deals that you mentioned that were complete through the pilot phase but it's a little bit on the rollout for a number of them that's nothing on your side in terms of a staffing situation, it's kind of more on the other -- the client side?

Yes. Yes. No, we haven't dropped the ball, Greg. It's -- the delays are entirely on the customer side.

Okay. That's helpful. Appreciate that. And just a little more color maybe on the luxury retail you mentioned. So you said they're rolling out the product at their 20 high-risk stores. Is the intention for them to do it at all of them ultimately, given the ROI there?

Absolutely. And these are the stores that they will rollout before the Black Friday blackout. So there's all intention of after the end of the year here to rollout to the remainder of stores.

Got you. And that's a total of how many, roughly?

80 in their brand stores and then they have an off brand of about that many as well.

Okay, great. That’s helpful. Okay. Yeah, I think that was it from me. Thanks for the call and taking my questions.

Yeah. Thanks for the questions Greg.

Our next question comes from the line of Jim Kennedy of Marathon Capital Management. Please proceed with your question.

Hi, Bill.

Hi, Jim.

I wanted to back up to your prepared remarks for a second and you used the term brick-and-mortar in the paragraph in which you were talking about your banking relationship. Did you mean to imply that your banking customer is going to be rolling out your technology in their brick-and-mortar or in their clients, their retail brick-and-mortar store?

Jim, thank you for that clarification. This is in the -- this is for the bank brick-and-mortar -- for their banking operations. We were selected in an RFP and they selected our technology to be rolled out into their -- in their bank branches.

Okay. Very good. So when I've been in my bank and then ask for an ID before they basically look at it, they don't do a whole lot with it, so now they'll be able to scan the ID directly in the bank while the customers are there?

Yes sir.

Okay. Very good. Okay, thank you.

Thanks, Jim.

There are no further questions over the audio portion of the conference. I would now like to turn the conference back over to management for closing remarks.

Well, I thank everybody today for being on the call. And please look for press releases as we make progress on our plan. I will be issuing press releases and I look forward to a fantastic future for Intellicheck. Thank you very much.

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time. Have a wonderful rest of your day.