Intellicheck Inc (IDN) 2003 Q3 法說會逐字稿

Good morning, ladies and gentlemen, my name is Tramika, and I will be your conference facilitator today. Following remarks from the company, there will be a question-and-answer session. If you have a question, please press the star key followed by the number one on your telephone keypad and your line will be unmuted in the order received. We would like to ask that questions be brief so that all telephone participants will have the opportunity to ask questions. If you have additional questions, you are certainly invited to press star one again. Copies of the press release have been faxed or E-mailed to you. If you have not received a copy, please call Gillian at 212-371-5999. This call is being recorded and is copyrighted. Therefore, please note that it cannot be recorded, transcribed or rebroadcast without Intelli-Check's permission. Your participation is appreciated during the call. If you do not agree to these terms, simply drop off the line. I will now turn the call over to Gillian Angstadt of the Abernathy McGregor Group who will introduce the company and read the forward looking language.

Thank you Tamika, and good afternoon, everyone. And thank you for joining us today, to discuss Intelli--Check's financial results for the 3rd quarter and the nine months ended September 30, 2003. Today's call will be led by Frank Mandelbaum, Intelli-Check's Chairman and Chief Executive Officer, Edwin Winiarz, Senior Executive Vice President and Chief Financial Officer, and Ralph Thomas, Senior Vice President of Sales and Marketing. Joining them for the question-and-answer session are Rus Embry, Senior Vice President of the company's chief technology officer, and Bernie Robert, Intelli-Check's Director of Corporate and Government sales.

Before we get started I'd like to read the following statement -- certain statements on this conference call could constitute forward-looking statements with in the meaning of the private security's litigation reform act of 1995 as amended. When used on this conference call, words such as believe, intend, expect, and similar expressions as they relate to the company or its management as well as assumptions made by and information currently made to the company's management identify forward looking statements. Actual results could differ materially from those in the forward looking statements. 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, I'll turn the call over to Frank.

Good morning, everyone. And welcome to Intelli-Check's 3rd quarter conference call. Some of the significant things that took place in the quarter was the beginning of the process of raising capital which puts us in a very strong financial position to execute our game plan. Additionally, during the quarter, we were fortunate to talk to and engage and then complete and just recently bring on board Ralph Thomas. Ralph brings a world of experience and marketplaces to the company. You'll hear a little bit what Ralph's plans are a little further on. And we continue to move the sales down the road. We move closer and closer to some significant entry into government and private industry. The quarter and sales -- the quarter itself has been more or less in line with our own expectations, and we are very optimistic as to where we will go now that we have the capital to move forward. Having said that, I'll turn the call over to Ed, who will give you some of the highlights of the recent quarter.

Thank you, Frank. Good morning, everyone. As Frank mentioned, the most significant financial event that happened to the company on October 8th, 2003, which is not included in our financials as of September 30th, was the closing of our secondary offering of 1.1 million shares and we received approximately $7.9 million after our underwriter fees and commissions but before other offering expenses, the company now has strengthened its balance sheet and is well positioned and has enough capital to grow our business in the future.

I'd like to discuss in the financial information that is contained in our 10Q which we filed this morning. Revenues increased by $114,000 from the prior year's quarter. Included in the revenue's for the second and 3rd quarters of 2003 were royalty fees of approximately $42,000 from the 3-year royalty license we signed with Carcomm effective March 2003. Rob will walk you through some of the details of our current sales initiatives later in the presentation.

Our gross profit increasing to about 70% for the quarter ended 2003, compared to [54%] for the 3rd quarter in 2002. Resulting from a shift of our sales mix, comprising licensing and software sales at very high margins, compared to our margins and hardware sales. Total operating expenses decreased by about $75,000 from the 3rd quarter of 2002 to 1.2 million for the 3rd quarter ended 2003. This decrease resulted primarily from the reduction in legal expenses. Of this amount, approximately $80,000 was from net noncash valuation adjustment, from the granting of options in 2002 and 2003. Additionally, 126,000 was included as interest expense from the sale of our redeemable preferred stock in March 2003, resulting from our adoption of FESB number 150 which was previously records as a dividend.

Our cash expense burn rate has remained constant for the past year at approximately 400,000 per month. The reasons I just stated, we reported a net loss for the 3rd quarter ended September 30th, 2003, of $1.2 million or about 13 cents per share, which includes noncash expenses of about 190,000 compared with a net loss of 14 cents per share, worth 1.224 million for the 3rd quarter ending 2002 which included noncash expenses of 184,00 dollars.

At this point I'd like to review the company's liquidity and capital resources. Net cash decreased for the 9 months ended September 2003, by $472,000. The principal reason for this decrease resulted from the net cash loss from operations, which was partially offset by the net proceeds we received from the $3 million financing closing margins from Griffin partners. After setting aside approximately $1 million for the early bird award, we currently have approximately $8.8 million in cash after inclusion of the proceeds we received from the secondary offering, and we have an -- invested these proceeds in high quality short-term securities.

We anticipate that our current available cash in hand, cash resources from expected revenues from the the sales units and inventory, along with sales from our ancillary products, such as ceiling and [watchee] programs and licensing of our technology it would be sufficient to anticipated to meet our working capital and capital expenditure requirements for at least the next 18 months. Ralph will explain. We have been actively marketing our technology for licensing integration into our complimentary systems and technologies. These potential markets could result in additional cashflow for the company. Based on our expectations, we project that the company will be cashflow positive for the 1st quarter of 2004. I will now turn the discussion over to Ralph Thomas, our Senior VP of Sales and Marketing.

Thank you, Ed. During my first week with Intelli-check, I had an opportunity to evaluate all the current initiatives, and I can say to you that they all have merit in my opinion and represent some significant growth opportunities for the company. My challenge is going to be to capitalize on these previous efforts and produce some very strong revenue results from them, while in the process of developing a more effective sales process, expanding our present pipeline and improving our closure rates on all opportunities we have under evaluation. Is there any -- Frank, I want to turn it over to Frank.

Okay, Ralph. Thank you very kindly. As you can see, the company remains optimistic as to its future. We believe we're right at the cusp of starting to see some significant results from the initiatives we have to date. And with completion of the formal part, I would now like to turn the call over to the operator and we will take any questions that you may have.

Thank you. Gentlemen, today's question-and-answer session will be conducted electronically. If you have a question, please signal by pressing the star key followed by the number one on your touch-tone telephone. We ask that I please limit your questions to one. If you have a follow-up, please cue up again. Once again, that is star one for questions.

Your first question comes from Steve Boom with Smith Barney.

Frank, how is the initiative coming with the airline operation?

What are you talking specifically with the airline operation? We have many initiatives going right now with the TSA and with airports themselves, but I don't know what you're referring to by the airline?

I just drew a blank, the -- at the annual meeting, the exhibition that you put on -- I forgot the name of the company, I feel like an imbecile.

Northrup.

Northrup Grumman, that's right.

That's not the airline.

No, my terminology was wrong.

That initiative is moving right along. Ernie, do you want to answer that question?

That initiative deals with our partner, Northrup Grumman and the defense department. In that initiative, our process has been completed, and the defense department and Northrup Grumman are in the process of debugging and doing the integration piece in terms of IT. And so far, the pilot's going very well. I think we have all the major issues debugged, and it is going to be expanded. And after the first of the year, they anticipate the beginning of a rollout.

Thank you.

Your next question comes from John Vindel with Harmitag Capital.

Good morning, guys.

Good morning.

Could you tell us, you came from [Symbol], and we have heard for the last two years that [Symbol] is the only company out there that really has the goods, and that Intelli-Check is not real, but yet you left a big company like [Symbol] to company to Intelli-Check, so, perhaps you could tell us a little bit why you made that decision and what you saw by leaving the company like [Symbol] to come to Intelli-Check.

Okay. Well, first of all, [Symbol] and Intelli-Check are really two different companies in terms of the products they offer in the business models that they both employee. But I was at symbol at the time that PDF-417 was essentially invented and put into the public domain. [Symbol] is still a very good company in terms of providing laser scanner devices, and when I was there, the reason why they placed the code into the public domain and walked away from some significant patent pro -- protection in my opinion was so they could create some demand for their laser products.

However, I can tell you honestly that the laser is not the best technology for reading the two D-bar code, imaging, whether it's CCD or DMoss is a much-preferred technology for doing that. Essentially they haven't enjoyed the success they were looking for in the very beginning. So to sum it up, we're talking about two totally different types of companies doing two different types of businesses, what I find exciting about Intelli-Check is we're providing a total solution in three particular areas: access, control, age verification, and document verification, and I believe this is not the end of the beginning, it's just the beginning.

Yeah, I'm not saying that, you know, I think what you're saying is right, but we keep hearing that all through any kind -- in account of the bare case about Intelli-Check, where you can't do it, because you have to compete with someone like [Symbol]. And I always scratch my head and say, I'm not sure [Symbol] is in the same business as Intelli-Check, and what you're saying is they certainly are.

Absolutely. And I think the key point here is the technology, the laser technology which is something that they have been supportive of since the beginning of the company's existence is not well suited to the kinds of things that we need to do, for example, reading the driver's license. The CCD and CMoss put out by other companies is a much preferred way of doing that.

Thanks.

Your next question comes from Trey Snow with [inaudible] Capital.

If I recall from prior calls and some press releases, that this was supposed to be, I guess, sort of the kickoff quarter for the relationship with the credit unions? Can you tell us -- can you update us on that? Have you seen any particular success this quarter? Any channel penetration there?

The answer is, yes, it did kickoff in the credit union magazine. A full page ad was run recommending it. It's an impressive ad. They're actively pursuing that. That's an initiative with one of our marketing partners that we believe will bear pretty good fruit as we move down the road. They actively are actually marketing the product. They're doing mailings, they're putting out these ads, full-page ad in the credit union magazine, and we have gotten some good leads out of it that were currently working.

Okay. And it appears that accounts receivable have almost tripled this quarter, is that in relation to any one customer, or just a swell of demand or --

There's a couple of customers. One is Northrup Grumman, our initiative there. We've had some nice sales.

Okay. And one quick last question. Could you comment at all on the departure of Mr. Davis?

Well, Mr. Davis had been with the board for quite a while. Mr. Davis was helpful to the company, in his tenure with the board. Howard lives on the west coast, he's our furtherest geographic director and he resigned for -- to pursue matters on the coast. The board, as I stated in the press release, thanks him for his efforts and there's really nothing further to that.

Okay. Thanks, guys.

Sure.

Your next question comes from Al Michaelson with 118 Partners.

Ed, my question is, on technology in the future. Some people say there has to be a finger print or other physical component, an entry system or other systems, what's our position in that arena?

You are talking about complimentary technology. I think that -- well, as you know --

Specifically, fingerprint or other physical component in our systems.

Okay. We are working with the leaders in the biometric field and have concluded relationships with what I would consider the best of breed as far as those folks are concerned and whatever it takes to complement our technology to provide a better total solution, we are in the process of investigating today.

Okay. Thank you.

If you have a question, please signal by pressing the star key, followed by the number one on your touch-tone telephone. We ask that you please limit your questions to one. If you have a follow-up, please cue up again. Once again, that is star one for questions. Your next question comes from Dan Morris with [All Air Velocity].

Good morning, everyone,. Good morning, Frank.

Good morning, Dan.

I wonder if you could -- I was at the annual meeting and left so excited. I just wish -- maybe you could further explain the significance of the Northrup order and how big this could be once it gets rolling?

Well, what Northrup said at our annual meeting, and I'll let Ernie follow up after I finish. It's a credentialing program. We have partnered with Northrup on this particular initiative; we're the front end of that system. The intent of the defense department is to roll this out internationally and you all heard what Northrup said in our annual meeting. What Northrup has stated is that as low as a penny a transaction, they projected revenue of $600 million. Not the first day. When it's fully employed throughout all the initiative in the defense -- let's call it realm.

However, we won't say that we're going to get as they said, the lion's chunk or a good part of that as partners with them. But even if we were only to get. We don't have to look that far out. If we were to get 5% of that $600 million. That would be very significant to our bottom line. We're very optimistic. The tests have started. It's rolled out--Ernie, do you want to add to that.

Yes, sir. If you look back at the reason for the defense department wanting to make a change, they analyzed and were actually on the committee that did the analysis, that they were spending a significant portion of the money dedicated to this. And the threat was from outside. What has been established is they are going to enroll a thumbprint and index finer and a photo to be filed through a web-based address.

Not only for the military, people on active duty, retirees, reservists, dependents, anyone that would have a common access card, but they would also request that the contractors and subcontractors that do business with the defense department which is a significant portion of corporate America, that they too would have the same system and agree in a memorandum of understanding to provide this functionality that is enrolling their employees, so that if somebody from Arkansas Best Freight or Boeing or Lockheed or any other number of contractors or subcontractors, they enroll their people, they come to the Pentagon, that they would do a fingerprint touch.

It would validate that the person is who they say they are, and they would pin against the employee database of the particular company to validate that that person is still in good stead, he or she is still employed and they haven't been terminated yesterday-- they haven't gone postal. It's constantly upgrading a background screen. And the bottom line is, they're going to request that those people that do business with the defense department have this functional capability, so they in effect become our sales agent and we are the enrollment device for this.

Thanks, Ernie.

Your next question comes from Mort Langer with Langer Partners Incorporated.

Unless I heard it wrong, I thought Edwin Winiarz said you would be cashflow positive in the 1st quarter, if that's true, that would come from, not just Northrup, but from other initiatives as well? Can you discuss those as narrowly as you can?

Well, based upon what we know, Mort, that are in the -- we believe are in the pipeline and some of these initiatives with government that we've discussed prior, with a large quasi-government agency and other government departments, senior staff of the Congress, senators, where our technology is getting more and more recognition for the value it brings, we have looked at that and went -- that's when we believe, by the end of the 1st quarter, some of these initiatives will start to become more hanging fruit, and that's why we have projected internally that we will be cashflow positive in the 1st quarter. Well, naturally, when Ed has mentioned our filings that we had sufficient capital to last 18 months, it's pretty obvious if that happens, we have sufficient capital to last quite a bit longer than that if we're not burning cash, if we're cashflow positive.

So I think this is accumulation of the initiatives that we have in house and the initiatives that we will start to bring -- call it across the finish line -- with the help of Ralph and his sales team. Without being very specific, when these are ready to be released, we will announce the significance of these to the public.

And I will just caution everybody that thinks that we run the company by press releases. We put out press releases when we consider them significant and when we have permission from the comparable party that placed the order or did something, because today, of everything that's been going on, when you have another large public company or a government initiative, every one of these contracts has a publicity clause. We can be sitting here, and unless we get the permission of the other side, or go through all kinds of legal rigamarole to get it out, we cannot put that press release out until such time that we jointly put it out. That's part of the agreement. We didn't put out anything last quarter, yet sales are up 50% from the prior. I don't want people to get the impression, because we're not putting out any news that nothing is happening within the company. On the contrary, we're pretty excited about the things that are happening.

At the annual meeting, you mentioned a company called Choice Point rather promisingly. Do they fit into this latter category you're talking about now?

Well, we do have initiatives as we discussed we would have with Choice Point. And part of the projection is, some of the things we're doing jointly, we believe this is all part of the total mix. Without breaking down why specifically we believe we'll be cashflow positive, suffice it to say, that on good information, we believe that some of these things are close enough that we will be cashflow positive.

Thank you.

Your next question comes from David Taylor with Taylor Capital.

Frank, good morning. Question directed at Richard -- Ralph Thomas. To the extent that you can, at this early stage I believe these are areas you must have evaluated before making a decision to join the company, could you just discuss with us or for us those areas of the marketing program that you embrace and think are positive?

And those areas that you would envision, perhaps requiring some alteration or modification, and any new initiatives that you might want to undertake on your own, and if we were to look back 18 months ago, what would you like to have seen achieved to tell you that, you know, you accomplish your objectives in the company.

Okay. There are several questions in that one question, and we'll try to break it down and deal with them one at a time. You asked what I found attractive about the company, as far as the solutions that they bring to market. First and foremost, they are widely recognized by a lot of people as having the best solution within our respective spaces. For example, the Supreme Court recently decided that Intelli-Check was the product of choice to use. That is not a --

I wasn't talking about the product. I was talking about the areas of the marketing approach that you think are right. We know the product's right.

When you talk about the marketing approach, are you talking about the distribution channels, the sale process ?

I'd say the sales process. And distribution, anything that you -- just what you observed in terms of what's working in your -- from your perspective, and then what things might you want to change, and then what new approaches might you bring to the party.

Okay. Well, the first thing I need to concentrate on is reducing the sales cycle and turning the initiative into, as I said earlier into our conversation, into a revenue generating enterprise. And that, I think, is the first area that I have to concentrate on.

I think that we have a lot of opportunity that we have to turn into orders. Frank characterized low-hanging fruit as one place to start, and I think that we have to capitalize on some of those, and turn those into orders. I any the sales cycles probably are a little longer than they need to be. That's something I need to try to reduce. As far as the direct and indirect channel issues, I believe we need to get more out of the indirect channel as well as improve our effectiveness on the direct side.

Any thoughts as to how you might approach both of those?

Well, I'm in the process of evaluating the people on the sales force side. Remember it's my first week, so I have to spend some significant time with each and every one of them to determine we have the right people in the right place. I also have to look at the geographic coverage issues as well as where we are relative to the reseller channels, and who the productive resellers are, and what we can do to make them more productive; who we have to sign up to get us into coverage areas that we are not in today, and the kind of plans and programs that are going to support both.

Great. Thanks very much.

Sure.

Your next question comes from John Hoop with CSFB.

Good morning, Frank.

Good morning, John.

I have a question regarding the GAO report that came out earlier this year, talking about the prevalence of reader documents and the ease of access of agents thwarting the system. Has that added any traction to the efforts you've been working on, in particular regarding the patriot act or quasigovernment entity that you have been prospecting?

Well, one, we continue to pursue it, everybody has seen in the paper the patriot act as the current regs state don't really have much teeth in them. It's left everyone out on a limb as to what they have to do to avoid that million dollar penalty. And yet in areas, there are a few banks that have, some major regional banks certainly, we currently have ongoing tests because of their concern not only for the patriot act, but because of the results we had mass merchandiser that literally reduced their losses to zero. They're getting hit with enormous amounts of fraud losses, bad checks, bad credit cards, so we continue to monitor everything that's coming out of the government from the GAO, there are initiatives going on that we're hoping to participate in, such as the exit entry visa system.

That's probably going to be let -- I had heard, I was in Washington yesterday, potentially as early as December 31 this year. That's a multibillion dollar initiative, and with some of the companies that we have partnering agreements--they're bidding on that, if they're successful, well, hopefully we'll also be successful. So the opportunities our plate gets fuller and fuller, and what we're trying to do, John, is to take a look at which of the lowest hanging fruit, and now through a team effort to close them, and that's why we're fairly optimistic that going-forward that we're at the cusp of delivering for the shareholders that which they've been patiently waiting for.

Can you highlight or bring us up to speed on where you are on that retail initiative?

Well, we've received an order from them for a test. They're evaluating it right now, and they're talking, Ernie, if you wanted to add a little bit to that.

Okay, I think we're talking two different issues. We have two different retailers, and the first retailer, they did a test, and it was a situation regarding true name credit card fraud in which someone would come into the retailer, open an account in someone else's name by having a driver's license with the other person's name and the bad guy's photo on the driver's license, we integrated two functions in that, we integrated our function and we integrated the ability to ask questions that only the real person could possibly know. And with that integration of those two things, the questions were asked, and the license was not valid.

In five stores there--four stores in the country-- New York, Chicago, Los Angeles and Miami. We completely eliminated creating credit fraud in which a credit card would be falsely obtained in somebody else's name. That same application can be applied from screening breeder documents. In the second initiative, major retailer has obtained 22 of our units for testing and evaluation purposes, but what they ultimately want to do is put our software in two situations-- one in the registers and two in a kiosk operation.

In the kiosk operation, they want to process credit applications and get what's now a 10-minute, 30-second process down to under 3 minutes, and in the register application, they want to reduce losses from refund fraud, check fraud, credit fraud, instant credit fraud, gift card fraud, pharmacy fraud and WIC fraud. All of which are contributing to significant losses. Plus, it would speed up customer -- right now it takes them 2:18 to process a check, they'll get that down to under 15 seconds. They have a lot of benefits and they anticipate getting significant cost reductions, but saving of time and better customer experience. And better employee experience. So we're very excited about those.

So they're continuing to move forward. Can you highlight what efforts you have going on with the DMV?

The DMV, John, we continue to work with them very closely, and what I mean by work with them very closely, we do have our technology. This whole issue, by the way, the hot button in areas of government today is false breeder documents. How easy it is to get a false breeder document and then create an identity to go forward.

We believe very strongly, and we have shown it to -- that we now have a solution that not only could prevent false breeder documents from coming forward, but to identify those documents that have been issued with false breeder documents and this is in conjunction with some of our companies that we have alliances and teaming agreements and partnerships with.

In other words, our technology, there's nothing quite like it in our opinion, I think we've proven that, because of the reputation we enjoy throughout the country. However, having just the ability to verify the document in light of the fact that there are -- that we know of, false documents that created valid driver's license, state issued IDs, whatever, we now have and we have been showing it, and Ernie, perhaps you want to say the kind of reception that you're getting in the halls of Congress and whatever for this technology.

Yes, sir. It's resonating extraordinarily strongly, that a significant problem that had not had a solution before was breeder documents. They can take one of three forms: I either attempt to gain a false I.D. by using somebody else's identity, or I just create a second new person that's never existed before and/or from the internet I obtain identification which I then purport to be that person.

The beauty of integrating our system together with a series of questions that are obtained randomly from various public database sources is that it gives a screening for all of those together with our technology and it automates the process, and we've got the test that showed we went from extraordinary number of problems at this one very large retailer down to absolute zero.

When I was at Walgreens I used to get excited about a 1/10 of 1% reduction in some areas when we redesigned programs. The significant thing was, we completely eliminated the problems with breeder documents and got down to a problem that the GAO is concerned about, the DMVs are concerned about, and House and Senate committees are concerned about. We recently have had a series of meetings with house and Senate accounts committees that have done hearings on identity fraud, and they're extremely excited about, that this is a solution that heretofore had not been available to deal with this specific issue before.

Thank you, Ernie.

Thank you.

Your next --

We'll take two more questions.

Thank you. Your next question comes from Richard Richard Carr with Gun Allen financial.

Good morning, gentlemen. Most of my questions I have have been answered by the questions that have come up in the brokers concerning Northrup and Choice Point and Qunis and this ridiculously long sales cycle getting cut down, because it has been ridiculously long. I do have a couple questions, the patriot act that was mentioned by another broker, I know as a broker, the requirements upon me have been become extensive on opening up newer accounts and identification. Are brokerage firms and banks with the changes that we've had, been as aggressive with you?

Some have, some have not. They want to see more teeth in the rules, I personally met with the head of the Senate judiciary committee; other people in the committee met with members of the staff. They're not pleased with the regulations as they exist, because it leaves too much uncertainty to the major companies. It's very difficult for a broker who has accounts all over the country that he got through recommendations to verify their identity. And that's some of the things that we're working on with the quasigovernment agency as a service that could be provided as a service with our technology very well incorporated into it.

So as far as the patriot act, the kind of traction that will come has not come. There's lots of interest, I don't want to say there's not, but they're not running around because there's such uncertainty like what do I have to do to verify it, and we are working with our consultants to try to get a little more specificity out of the government as what -- as to what is required.

Last question, I have to ask this one delicately. As far as you did have a secondary that was done and yes, you have your money. As a -- somebody who's been in the industry for better than a decade now, do you have any comments on how the secondary was handled?

I really don't have any comments, we receive the money. Would we have liked to have seen the activity post the thing-- be a little more positive than it was? Of course, we would. We're here to enhance shareholder value, not hurt shareholder value. We do have the money, that was the important part. We're pleased we got the money, and we believe that we will deliver the kind of results that will order very well for the stockholders going-forward, and the secondary we did is really behind us now. We want to move on, and there's really nothing further to talk about.

All right. Thank you.

Okay. We'll take one more if you have one, operator.

Your next question comes from Mort Langer with Langer Partners Incorporated.

Hi, identity theft, credit card fraud are all over the newspapers, on television, and we have a tremendous solutions to that. Inside the industry, everybody knows that, but the investment community broadly does not. What initiatives are we taking to really get our story out to the investment community in more aggressive fashion?

Well, I believe, Mort, that: one, you're absolutely right, as we well known in the investment industry as we are by government and large commercial players, it would probably put a lot more interest into the company, and you're talking strictly as far as the company's recognition by the investment company, I presume?

Yes.

Okay. However, we recently made a change in our public relations firm where working with them on a plan to get the story out to effectively tell everybody where we are because we believe where we are, it's really exciting times for the company.

Great. Thank you.

Okay. This concludes the 3rd quarter presentation on the part of the company. On behalf of all senior management, we thank you for attending and we look forward to hearing from you in the future. Thank you very much.

Thank you for participating in the Intelli-Check's 3rd quarter 2003 earnings conference call. You may all now disconnect.