Q4 2007 Intelli-Check Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Good day and welcome to the Intelli-Check-Mobilisa 2007 year-end earnings conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Adam Lowensteiner. Please go ahead, sir.

ADAM LOWENSTEINER, CONTACT, INTELLI-CHECK-MOBILISA, INC.: Thank you very much, James. Welcome, everyone. Thank you for joining us today to discuss Intelli-Check-Mobilisa's financial results for the fiscal year ended December 31, 2007, and other business developments. In a moment, I'll call upon Dr. Nelson Ludlow, CEO, to conduct today's call and introduce the other members of the Intelli-Check-Mobilisa management team who will be participating in this conference call.

Before I do that, 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. Our actual results may differ materially from the information presented here. There's no assurance that the use of ID-Check technology by our potential customers and partners or government efforts to enhance security or curtail the sale of age-restricted products to underage buyers will lead to additional sales of ID-Check technology. 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. We do not assume any obligation to update the forward-looking information.

With that out of the way, I would now like to introduce Dr. Nelson Ludlow, Intelli-Check-Mobilisa's Chief Executive Officer, to preside over today's call. Nelson, please proceed.

DR. NELSON LUDLOW, PRESIDENT, CEO, INTELLI-CHECK-MOBILISA, INC.: Thank you very much, Adam. Good afternoon and good morning to our West Coast listeners. We welcome you to Intelli-Check-Mobilisa's fourth-quarter and end of year conference call. This is our first conference call with the new management team and since we completed the merger of the two companies.

With me today on the call and also presenting are Pete Mundy, our Chief Financial Officer, and Steve Williams, our Chief Operating Officer. Also, we have Mr. Jeffrey Levy, Intelli-Check-Mobilisa's Chairman. We are all calling in from our Washington, DC area office located in Alexandria, Virginia.

As most of you already know, on Friday, March 14, the shareholders overwhelmingly approved all five items of the proxy. Approximately 99% of the shareholders approved the terms of the merger. After the shareholders vote, we filed the necessary documents for the new incorporated, formally completing the merger at 11:59 PM that day. Immediately after the shareholders meeting, the new combined Board of Directors met and they elected Jeffrey Levy as Chairman, and Mr. John Paxton as Vice Chairman, and then selected the new committee assignments and roles.

Prior to the merger completion, we did take the steps necessary to incorporate the two companies into one fully integrated team. We've done a lot of work. We restructured the sales team; we've made some personnel changes. We combined product lines; we renamed or (inaudible) certain products and began the full integration of the technologies into each other's products. And very importantly, we started new product development.

Following the merger, we also formally appointed and announced Steve Williams as the Chief Operating Officer. Steve was Mobilisa's Senior Vice President, head of Washington D.C. Operations, and will make an excellent COO of our combined company. He is a retired Air Force Officer and he's held several positions, including working in the Pentagon, a liaison officer to the Air Force to Congress, and also as a certified government contracting officer. Steve and I have worked closely at Mobilisa for the last two years, and he was instrumental, along with several others, in continuing Mobilisa's rapid growth.

Now, further, we structured the merger so that Mobilisa would be a wholly-owned subsidiary under the parent of Intelli-Check-Mobilisa Inc. so that existing government contracts would not have to be (inaudible) to a new name, keeping the government contract items such as the tax ID numbers, the cage code, contract vehicles, such as (inaudible) and our government facility security clearances all intact. That was important to simplify the process and to ensure that the new government contracts are easily awarded.

We moved the headquarters of the new company to Port Townsend, Washington state. While not moving any employees, by placing the headquarters in Washington state, this allowed for certain advantages to include having a public company with a hub zone or historically underutilized business zone status, which allows for several government contract advantages, pretty similar to being a minority-owned business. Essentially, we've more than doubled the personnel in the Company, tripled the size of technical staff of engineers and technicians, and quadrupling the size of the customer support services.

Now, you're going to see an increased emphasis in Intelli-Check-Mobilisa on customer service. In terms of marketing, the Company can compete best on price, on best features, or best in customer service. Intelli-Check-Mobilisa will be emphasizing customer service. We intend to provide our customers with first-rate installation, training and follow-on support, and to increase our product line to have a total product offering. This will allow our customers to view us as one-stop shopping for identity and wireless security services.

We have structured the Company into three business units. One is the commercial identity systems unit, which is the traditional Woodbury Group. The second is the government identity systems unit, which will handle our Defense ID and projects like the TWIC program. The third group is our wireless programs group.

I'm very excited about the merger. Having completed the formal process, we can now truly focus on business. We have one goal -- and we are unified in that goal. That goal is to grow the Company to become cash flow positive and then profitable as quickly as possible. That's our one goal.

Now, to achieve that, we're going to emphasize three areas. First, we are going to have an increased emphasis on growing revenue by restructuring sales and bidding as a prime contractor on projects as well as the focus from the new management team that's in place. Second, we're changing the business model from selling software development kits to where we are going to develop our own applications, provide full support as a complete systems integrator. Then third, …