Intellicheck Inc (IDN) 2009 Q1 法說會逐字稿

Good day and welcome to the Intelli-Check Mobilisa 2009 first quarter conference call. At this time, all participants are in a listen-only mode. (Operator Instructions) As a reminder, this conference is being recorded.

At this time, I would like to turn the conference over to Mr. James Carbonara of the Investor Relations Group which is the IR and PR firm for Intelli-Check Mobilisa. Please go ahead.

Good day and welcome, everyone. Thank you for joining us today for our 2009 first quarter conference call to discuss Intelli-Check Mobilisa's results for the first quarter ending March 31, 2009 and to discuss other business developments. In a moment, I will call upon our CEO, Dr. Nelson Ludlow, to lead today's call and to introduce the other members of the Intelli-Check Mobilisa management team who will be participating in today's 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, encouraged and similar expressions as they relate to the Company or it's management as well as assumptions made by and information currently available to the Company's management identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs about future events.

As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances and the Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise. Additional information concerning forward-looking statements is contained under the heading of risk factors listed from time to time in the Company's filings with the Securities and Exchange Commission.

I would now like to introduce Dr. Nelson Ludlow, Intelli-Check Mobilisa's Chief Executive Officer, to preside over today's call.

Thanks, Jim. Good afternoon and good morning to our West Coast investors. On the call with me today is Steve Williams,, our Chief Operating Officer, Pete Mundy, our Chief Financial Officer, and John Lange, our General Counsel.

On today's call we'll discuss our first quarter revenue, which is approximately $2.1 million, which is an 84% increase as compared to the first quarter of last year. We had a relatively slow January and February. It was followed by a good March and what appears to be a good start for quarter two. Some major accomplishments during this quarter are setting up us for the future. And they include the certifications that we recently received, new pilot programs for our TWIC reader, a longstanding patent litigation that we recently settled, and an increase in business development opportunities.

Now my strategy for 2009 is to increase our top line revenues. And to take the steps necessary to make that happen. So in order to do this, we've added some new cash expenses to the Company that include hiring additional new salespeople, skills engineers. We built some new products and we've started several pilot projects. While early on these initiatives may have a somewhat negative effect on our cash flows, we see them as investments and that will pay off with increased revenues in the future.

Now some of the highlights for Q1 were mentioned on our year end call since the reporting occurs just a few days left in the first quarter, but I'd like to retouch upon those and particularly I notice that we have a lot of new investors on the call and so I may recap some of these things. In the first quarter we received an Army wide ATO, which stands for Authority To Operate. Which is an approved accreditation or certification for our defense ID product for use Army-wide. We've hired two key people into our sales team, Ms. Debbie Bainbridge and Mr. Ryan Anderson. And then in just the last few weeks we've also added another key salesperson, CJ White who comes to us from GE Money. These additional members to the sales team effectively doubled our commercial products sales force. We want our products in more retail stores and the expansion of the sales team has created additional sales prospects that we plan to execute upon.

In Q1 we also hired the Investor Relations Group to be our IR and PR firm. And we've already increased our awareness with the media from XM and Sirius radio, NPR radio about our wireless projects, to several print stories about defense ID, our TWIC reader and the commercial instant credit card approval system. We also started a nondeal road show to showcase our Company to you, the shareholders, and to new investors around the country, giving the first one just two weeks ago here in Washington state, and future events for the road show are being scheduled for California, Washington, DC, Manhattan, New York City and the Long Island area. Also IRT just released a podcast interview just today which is on IRGnews.com, that you can hear us talking about some of our other recent projects.

We're also pleased to announce a commercial sales defense ID system to Force Protection that's on NASDAQ as FRPT, to help protect their critical facilities for building military vehicles. We also announced a partnership with the Georgia Technology Authority, or GTA, to provide an online tool offered by the state of Georgia that offers a simple and instant solution to stop anyone from using a fraudulent driver's license or an identification card to access services.

Early in the quarter, we received a new patent from the US Patent Office that's a continuation of our patents related to the reading and verification of driver's licenses and other identity cards. This patent covers the reading of a driver's license, sending that information to an external computer for further processing. You can imagine the example. One is to determine if that person is authorized to enter a facility, that's listed on a watch list or to make any other match to a database. So I'm excited about that.

We announced our first TWIC reader pilot at a major port in Washington state. As a Transportation Worker Identification Credential program or TWIC, TWIC, is the Transportation Security Administration, US Coast Guard's initiative to provide a tamper resistant biometric identification card to port facility workers. As of April 15th, 2009, just about three weeks ago, an estimated 1.5 million individuals, including all Coast Guard credentialed mariners are now required to possess a TWIC card. Just yesterday we announced our second TWIC reader pilot at a very major port in California. We also received a Navy-wide Authority To Operate just one month following our Army certification. Again, this allows all naval bases the ability to purchase our product. There are approximately 59 Army forts or posts in the continental United States and approximately 57 naval bases.

I'm also pleased to say we entered into a patent settlement agreement and a license agreement with TriCom Card Technologies. As you, the ones that have been around with the Company for a long time, you may know this ends a lawsuit that we were involved in for six years. And not only were we able to settle but also set up a license fee for the future. This settlement recognizes that Intelli-Check Mobilisa has some of the earliest and strongest patents in regard to reading driver's licenses and other forms of identification. Resolving this litigation allows us to concentrate on developing new products and technology as well as to seek other opportunities to recognize the value of our intellectual property portfolio. And now for our new listeners our patent portfolio is very strong in reading drivers' licenses. Intelli-Check Mobilisa currently has nine patents and with ten others in the works.

So let us talk about the financials. Pete Mundy, our Chief Financial Officer, will provide more color on the quarter's financials. Pete.

Thank you, Nelson. Good day to everyone. I'd like to discuss some of the financial information that was contained in our press release for the quarter ending March 31, 2009 which we put out this morning. We anticipate that the complete quarterly report on Form 10-Q will be filed with the SEC this afternoon. I'd like to point out that the information I'm going to address, as well as the reported results in the financial tables of the press release, include the results of Mobilisa for the entire quarter for the 2009 period, but only for the 17-day period from March 15th, 2008, through March 31st, 2008, since the merger with Mobilisa was completed on March 14th, 2008. Revenues for the quarter ending March 31, 2009, increased 84%, to $2,121,712, compared to $1,153,134 for the previous year. Revenues from the Company's historical business decreased 34%, to $541,571, compared to $821,455, principally as a result of lower commercial sales to customers in the financial services market and lower software design fees.

Mobilisa's revenues were $1,580,141 in the first three months of 2009, compared to $331,679 in the period March 15th, 2008, through March 31st, 2008. Mobilisa's revenues in the 2009 period increased 15% on a pro forma basis over the full quarter of 2008 amount of $1,378,589. Had the merger taken place as of January 1, 2008. This increase is principally attributable to the wireless R&D projects. Total book to orders were $867,000 in the first quarter of 2009, compared to $1.1 million in the first quarter of 2008. As of March 31, 2009, our backlog, which represents non cancelable sales orders for products not yet shipped and services to be performed was approximately $9.4 million at March 31, 2009, compared to $12.7 million at March 31, 2008 . Approximately $5.3 million of the current backlog could be recognized over one to three years. Mobilisa has a significant amount of multi-year research and development contracts with the US government that will be recognized as the research is performed. In the commercial ID market the actual recognition periods are determined depending upon the release dates by the customer.

Our gross profit as a percentage of revenues was 65.8% for the three months ended March 31, 2009. Compared to 66.2% for the three months ending March 31, 2008. The gross profit percentage stayed essentially the same. Operating expenses, which consist of selling, general, administrative and selling percentages increased 57.1%, to $1,956,073 for the three months ending March 31, 2009, from $1,245,268 for the three months ending March 31, 2008. The Company's historical operating expenses in the first quarter of 2009 were $835,582, compared to $1,037,267 in the first quarter of 2008, principally due to merger-related synergy savings.

Mobilisa's operating expenses were $1,102,039 in the first quarter of 2009, compared to $2,001,494 in the short period included in 238. Merge related intangible amortization costs were $18,452 in the first three months of 2009, compared to $6,507 in the first three months of 2008. As the Company experiences sales growth, we expect that we will incur some additional operating expenses to support the growth, including the hiring of additional salespersons and the increase in marketing costs such as participation in more trade shows and the generation of marketing materials. Research and development expenses should also increase as the level of research and development projects increase. And we continue to integrate additional products and technologies with our patented ID-Check technology.

Interest income from $8,378 for the three months ended March 31, 2008 to $3,668 for the three months ending March 31, 2009. Which is principally the result of a decrease in our invested cash and short-term investments, as well as approximately 6% lower interest rates received on our investments during 2009. Our net loss was $556,366, or $0.02 per share for the three months ending March 31, 2009, as compared to a net loss of $451,464 or $0.03 per share for the three months ending March 31, 2008.

Now I'd like to focus on the Company's liquidity and capital resources. As of March 31, 2009, the Company had cash and cash equivalents and short-term investments of $2,825,661. Working capital, defined as current assets minus current liabilities, of $1,844,523, total assets of $23,470,021, and stockholders equity of $20,211,391. The Company currently has no bank financing or no long-term debt.

During the three months ending March 31, 2009, the Company used net cash and short-term investments of approximately $575,000. Net cash used in operating activities was $582,240, including an income tax payment of $145,354 in the first quarter of 2009, related to the pre-merger taxable income of Mobilisa which was recorded on the consolidated balance sheet as of December 31, 2008. Capital expenditures were minimal at $8,750. Cash proceeds from stock option exercises were $15,703 in the first three months of 2009. We currently anticipate that our available cash on hand and in marketable securities, as well as cash from the operations, will be sufficient to meet the anticipated working capital and capital expenditure requirements for at least the next 12 months.

As Nelson mentioned previously, on April 28, 2009, the Company and TriCom Card Technologies Inc. ended a long-term patent dispute litigation by entering into a patent settlement agreement and a license agreement. Intelli-Check sued TriCom in 2003 for infringement of two patents related to machine reading of identification cards, including drivers' license. Pursuant to the settlement agreement, TriCom acknowledged the validity of Intelli-Check Mobilisa's patents and that sales of TriCom's age verification products are subject to the terms of a license agreement entered into contemporaneously with the settlement agreement. The impact of this settlement is not expected to have a material impact on the financial statements.

I'll now turn it back over to Nelson.

Thank you, Pete. Let me add, I'm very pleased with the settlement. Our patents were acknowledged. We agreed to a license. And we can now focus on bigger issues. And particularly, I want to focus on new business development and sales for the Company. Now we are seeing that the United States government is rethinking the Real ID Act or certainly a delay in enforcing the Real ID Act. Now I see this as positive for Intelli-Check Mobilisa. We have a 50-state solution that reads all of the cards in all of their many and varied formats.

I also continue to believe the importance of the TWIC program. Intelli-Check Mobilisa saw the value of the TWIC program early on, we developed the product early on. And we have recently won two pilot projects for the TWIC reader in major seaports. As of three weeks ago, the TWIC card was required for all workers at major US seaports. Now we're receiving numerous calls every day from those ports about our TWIC reader. And this is not a product that someone is planning on building in the future. Our product is out, it works, it's on the Homeland Security ICE list, it's being pilot tested by ports right now. I personally foresee that the TWIC program may expand to cover airports, hazmat truck drivers, nuclear power plants, et cetera. With over 175 sea ports and the possibility of other facilities, TWIC is an important program for our Company to go after.

I do not see it happening as one big RFP. Rather it will likely be numerous smaller sales, perhaps even port by port. Where some of the larger integrator contractors may bypass smaller port by port deals, Intelli-Check Mobilisa sales force is prepared to meet with each one of the ports to demonstrate our product and make those deals and make the sales. We have an outstanding solution. It's competitive on ruggedness, on features, on price and it reads drivers' licenses plus the TWIC card, and to our knowledge, the other systems do not do that.

As you've heard, we're increasing our emphasis on sales and business development. So with that, let's have Steve Williams describe our new projects. Steve.

Thank you, Nelson. We continue to build all three business units. Wireless, government identity and commercial identity. The wireless business unit continues to successfully develop the floating area network orphan, or FAN, the littoral sensor grid, or LSG, and the radiation hazard modeling software tool or RADHAZ. The wireless team is working to complete the floating area network system and be the lead integrator for consolidated off ship wireless systems supporting Trident Warrior 2010, a large scale US navy exercise. FAN was identified in Trident Warrior 2008 as one of the most promising new technologies.

There is a recent increased interest in FAN to support several emerging operations and other areas of ongoing military operations that create a new market area within the Department of Defense. The integration of our floating area network, identifies the communications capability that allows for the integration of existing or yet to be developed hardware into a single inexpensive communication suite.

The littoral sensor grid utilizes the lessons learned during the development of the floating area network to create an even more robust communication system to protect the coastal and shoreline waterways around the globe. With our partner, the University of Washington advanced civics lab, we are creating the world's most balanced buoy communications system that allows for realtime monitoring of anything that is above, on or below the surface of the water. We are currently on target to deploy an additional four buoys this summer. In collaboration with Poolesvlle Marine Science Center we've installed an interactive demonstration to the littoral sensor grid to bring awareness to both the security and environment aspects of our system.

The radiation hazard monitoring tool, or RADHAZ, continues to show promise with regard to expanding our market to areas other than the United States Air Force. We've seen significant interest in ability to in corporate the ability to measure the effects of radio frequency on personnel in a field but to also use our tools to incorporate buildings and lay the output on Google Earth for an even greater application. We continue to research additional opportunities for both our RF modeling application, AIRchitect and our RADHAZ and received an additional $385,000 in funding.

Our government identity systems had a first, as Nelson mentioned earlier, with the approval of our transportation worker identification credential or TWIC reader, for a pilot test. Continuing on the momentum from the first, we were able to gain approval for a second pilot test., this time at a major California port. There are more than 175 seaports that can use our reader and we'll continue to seek approval for pilot testing and sales of our products and we'll update our shareholders as we do. The pilot tests vary in duration between port to port, but they are typically around 90-day tests. The main purpose of the pilot is to get product feedback for us, the port and the Department of Homeland Security as opposed to the try-before-you-buy plan. We are striving to make some initial quick sales within the next few months which is by the end of the government fiscal year, or September 30, 2009.

Receiving the Army and Navy-wide ATO, or Authority To Operate, for defense ID enables military installations to purchase and install around the country. The significance of the ATOs is they are required to operate within the Department of Defense, and these accreditations open the way for our sales force to pursue numerous opportunities. We have over 70 facilities supported by this product, adding another one this quarter. We recently submitted several additional proposals with several new military bases. Recurring revenues from subscriptions and supplies continue to provide a significant portion of our defense ID sales.

A couple of quarters ago we released Defense ID on a newly updated hardware platform with an improved scanner. Fort Dix, New Jersey just awarded us a contract to update their system to the new scanners. We also have three other bases purchasing upgraded scanner equipment.

We recently attended the Identity Protection and Management Exposition hosted by the Defense Manpower Data Center last week, the Smart Card Alliance this week, Border Security Expo next week, and the Force Protection Equipment Demonstration on May 19th to 21st. We are aggressively marketing our products and will continue to do so. We had yet another benchmark in development of sales of our Defense ID system to the first commercial identity, Force Protection Incorporated. The basics for the commercial variant of Defense Id are the same but we've customized the databases that meet the demands of the commercial marketplace. Our commercial identity systems continue to focus on Tier 1 retailers, grocers and financial institutions. Our regular customers continue to be repeat customers. L1, Cross Map technologies, Taft, Fidelity National Information Services and other financial institutions.

We continue to grow and support these customers while launching pilots in other Tier 1 partners. We have partnered with Fiserv, a leading financial services company, providing products and services to the banking industry. Our joint product that would scan a driver's license and automate the new account process is now located at over 130 stations. We posted a case study published by Fiserv about this product on our website.

We continue with several pilot projects on the credit card application processing. Successfully completion of these projects will result in rollouts to national retailers around the country. Our financial institutions create opportunities in a couple of areas with a variety of form factors from royalty programs to credit card applications. We continue to work with Barclay, GE Money, and JPMorgan Chase to support these partners. As with government identity systems, our current customers continue to purchase additional or recurring receivables.

Thank you. And I'll turn it back to Nelson. Nelson.

Thanks, Steve. I'm very excited about the banking product that we put on our website today with the case study from Fiserv. This is an application for new accounts. If you go to a bank and you show your drivers' license to open that account, it's one of our products and we're very excited about our partner doing that. And as Steve said, we're at 130 different stations right now using that. So this is shifting from an initial test to a real product that's out there. As you can see, we've really increased our business opportunity significantly from where we were a year ago. So I'm very excited about the business opportunities.

So let's recap. We've increased the revenue this quarter by 84% over first quarter of 2008. We've completed the merger, we're one company now. This will be the last quarter, I believe, that we're going to be reporting revenue separately by Mobilisa and Intelli-Check because we're one company and the year now is complete. We've added army and naval authorities to operate ATOs to our already existing certifications and accreditations. We're working closely with our new IR and PR firm, the Investor Relations Group. I'm very pleased with their performance and the media that they've got us already. We've started a nondeal road show to show case our Company to the shareholders, new investors around the country. We conducted our first one just two weeks ago.

We've added new people to our sales team. That's critical. And I am looking to add more salespeople. We've undertaken two pilot programs of our TWIC reader in major seaports in Washington state and as of yesterday, California. We've strengthened our intellectual property standing by having a new patent issued and settling that longstanding lawsuit. And we've added another contract to our Defense ID product.

So at this point, I'd like to address the questions you have and out of respect for the other listeners, please state your name, organization, try to clearly and succinctly state your comment or question and we'll be glad to answer your questions.

Thank you. We'll now be conducting the question and answer. (Operator Instructions) Our first question comes from Jack Edmund with Cohen Investments. Please state your question.

Yes, gentlemen, congratulations. Now that there is one company it sounds more exciting than other. Let me ask you a couple of questions on the TWIC card. First this is possibly a very involved question as far as locales, but how many locations would you say there are potentially out there? If there is approximately 100 United States Army and Navy bases combined, if you add 175 seaports, how many additional US Air Force bases are there, Marines, Coast Guard, National Guard and other type of public facilities that you think out there? So if we could say that potentially there is about 1,000 in the United States continentally, could you see someplace in the area of 1,000 facilities going out and looking at this product? And if we use $200,000 as an average cost for installation on these facilities are we talking about a $1 billion market potentially just from this one product alone?

Jack, thanks for your question. Let me give you some real numbers here. There's 59 Army, four posts, 57 naval, I believe. This is approximately -- because these are the larger ones that would use it. There is actually many, many more smaller facilities that do not qualify as a full base, but still have personnel and still have security concerns. We're at about 28 of those locations in the Army-Navy, and perhaps another 88 that we could go to just there. There is about 70 Air Force bases in the continental United States, 22 Marine Corp bases and 178 seaports. I don't know the exact number of Coast Guard stations off the top of my head. But I mean you're getting the numbers there. Some of the National Guard facilities that you talk about are actually co-located.

But yes, the number is actually quite large. We believe that a typical install for a military base is between $200,000 and $250,000. Additionally we've seen that bases start out at that point and then they grow a little bit more. So they'll buy additional equipment after they've used it for a while. They say, I like those 12 handhelds that we have, I'd like to buy six more. So it could grow. We believe that the TWIC seaports will actually be larger purchases. Military bases often have about three or four gates per location. Some of the seaports have as many as 10, 20 different lanes of trucks coming in and out and you certainly do not want the trucks stacked up or slowed down for any reason. So they're already set up, these seaports, with numerous locations to come in and out for personnel and vehicles. So we expect those purchases to be larger than $250,000 and our estimates are between $500,000 to $1 million per seaport.

I'll let you guys do the math. I don't like the theory of saying winning everyone one of them and then multiplying it out because that rarely happens for any company.

But you're saying there is a obviously a very large market here just on this TWIC market alone.

Absolutely.

And there is nobody out there actually selling hardware right that is doing the reading that we're doing in our tests?

On the TWIC reader, there are a couple of other companies. We were the first one to announce that we have a TWIC reader. We did get on the ICE list and to my knowledge we were the only ones that passed all 14 tests of it. And I'm jazzed by it because not only do we do TWIC, we do TWIC-plus, we read the driver's license. Yes, we'll have competition from other guys. That's okay.

But if they infringe on your patent, though.

If they infringe on the patent, and I have general counsel right here, that'll be a bad thing and we'll go after that. The TWIC card's a nonproprietary government standard open card so other guys can do the TWIC. But the driver's license, like I said, we have 19 patents or patents pending or in the works on driver's licenses. So doing TWIC-plus driver's licenses, I believe that's our space.

All right. One last question. I'll let somebody else take it. Can you talk about the wireless -- add some color to the wireless over water application as described in the recent news media with the Somali pirates, et cetera, and what we could do in that respect.

Yes, that was exciting. We got to do an interview on XM Sirius radio and then on NPR radio. Somali pirates has got in the news recently. And they contacted us because basically what we can do is provide wireless internet capability over large spaces of water, remote locations, without just relying on satellite.

You mean surveillance capabilities?

Absolutely. And so what we can do is move super high speed wireless, so video, any sensors, when boarding teams have cameras, they could have covert sensors. One of the problems that the Navy found is that these guy that board ships, they have to be special weapons trained, it's a dangerous environment. What language do these guys speak that you're going to be boarding the ship. You don't know. So instead of trying to train a different linguist for every possibility of boarding teams, they'll just have a few guys that are trained in special weapons and tactics and be able to, through video streaming, send that information back to the main ship that they can safely have linguists. Or even all the way back to the United States and have the linguist talking live at that situation.

So putting bandwidth out there. And if you go to our website, there is a very good three-minute video on the floating area network and Admiral Archie Clemins, former four-star admiral, speaking about the importance of bandwidth with the Navy. And I cannot think of anything more important to the Navy than having that bandwidth out there in the location of harm's way and that's what our technology provides.

Okay. Thanks very much.

Thank you. (Operator Instructions) Our next question comes from Richard Carp with Rockwell Global. Please state your question.

Thank you. I have a few questions but most of them are short. Congratulations, guys, on increasing your revenues. I never doubted, ever, that you'll be continuing on this path. I didn't know you had hired a Investor Relations Group. I found out recently and left a message for James and unfortunately I never got a call back. And as you know, I've been involved with Intelli-Check, I did the original private to bridge in the IPO, and my clients at one time controlled almost half of the float at one time. I've seen the Company come a long way as far as in changes and I'm very excited about directions we're going in. I do have a couple of questions though. On the patent infringement case, which on the first conference call that we had when you introduced your patent attorney, in the disclosure, what you put, you do not say that we received any money. Again we took them to court. What year was that again? Back in 19 --

2003.

All right. 2003. So 2003 up to current date, we do not receive any back monies for sales that they've done? If I remember correctly, we were in line trying to get 7/11 at one point. We were there and they came and grabbed it and got the chain at that point. I was curious, you didn't disclose any terms. Were we able to be compensated at all as shareholders for business stolen during that time frame?

Richard, and for listeners, Richard was the one that helped our Company, helped Intelli-Check go IPO. I wasn't involved with the company at that time but he and his group were absolutely instrumental in taking the company IPO and thank you for that.

Regarding the patent, you're right, 2003. Mind you, this was a very longstanding thing that should have been resolved and sorted out, and that's what we did with the help of both our general counsel, John Lange, and Mark Baughman who is the President of TriCom Card. And everyone was very cooperative and helped work towards, in my view, a good deal. The actual amounts are under non disclosure agreement so I cannot say. But let me just say it covers both past and future license agreements, so it covers both of that. So that was sorted out. I'm very pleased with it. And in addition, they did clearly state in a press release that our patents were valid. And that's critical.

That's great. It's been a long time coming. I'm glad that we're getting something for past efforts as well. And you had some great publicity very recently. And when you talk about this wireless, it's funny, I had a guy in my office who was ex Special Forces that was just offered a ludicrous amount of money to sit on an oil carrier for exactly what is going on with the pirates. And actually he was talking about technology that was out there. I kept my mouth shut but I knew it was your technology that is causing the excitement out there for not only carriers, oil carriers, but also for cruise lines.

Let me tell you one other interesting thing, our wireless technology is being used on a Navy program called Spartan, the unmanned surface vehicle, so they can drive remote controlled vehicles, without anyone aboard, with cameras and sensors, into harm's way such as where these pirates are, and even if the pirates do shoot that there is nobody aboard so it's safe. And that's our wireless technology.

I just want to make sure, I know you were working on the, I believe it was the TWIC program, one of your partners was SAIC. Is that still the case?

We are partnered with SAIC on several projects, particularly in the wireless, as well. We are not partnered with SAIC on the TWIC program.

Okay. Well I just want to congratulate you guys. You continue to plug forward. Doc, I tried to get a hold of you as well during the quarter. When did the PR firm come aboard?

The PR firm, I believe, happened March 18th. In fact it happened on basically the exact same day that we did our last conference call, which was about six weeks ago. A lot of this press that we're getting, it's to their credit. And our Company is doing a lot of cool things, but we need their help to get the word out about the technologies and the products and services that we provide. If I grade internally our Company, that's an area I want us to improve. We do have the technology, we do have the patents, we do have the products, we have to get the word out. And so that's what we're doing. And these guys are good. And I did see that you called yesterday and I think it was right as I was with a call, and so I'm confident that IRG will give you a call back.

Not a problem. Last comment, and I know you guys do not need any money but as I always say, if you ever do, give me a call. You guys are doing the right thing, I'd be glad to get you any additional funds that you might ever need, just like I have in the past.

Great. Thank you.

Great job, guys.

Thank you.

Thank you. (Operator Instructions) Our next question comes from Jack Edmund from Cohen Investments. Please state your question.

I just wanted to ask you again, since Richard brought it up, with this product for the Somalis, are you saying that you have the wireless potential to do under water or above water drones like the Air Force does now?

We do above water communications for the unmanned surface vehicle from ship to ship. And it is a drone. We do not do under water.

So potentially you could have a attack vehicle that would be under the control of a buoy, or through another source?

Exactly right. And if you Google a program called Spartan, S-P-A-R-T-A-N, an unmanned surface vehicle, we demonstrated wireless on that and that's one of our technologies.

And last question and I'll let someone else take it. Any potential for insiders to be buying stock?

We were in a blackout period, so I don't want any people to draw the conclusion that we weren't buying because we're not excited about the Company. We are excited about the Company. And I have not talked to anybody about buying or not buying. So I don't have any information on that. Other than we are going to be pulling out of the blackout period for the management team essentially just a day or two from this call.

Thank you.

Ladies and gentlemen there are no further questions at this time. I will turn the conference back over to management for closing comments.

I want to thank the shareholders, thank you for your questions. We're going to continue to do these conference calls and get information out. I'm very jazzed about the IR-PR firm and you'll see that we've had a lot more news and information to you, the shareholder, and I'll look forward to our next quarterly conference call. And we appreciate the support. Thank you.

Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you all for your participation.