Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995.

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ImageWare may, from time to time, update these publicly announced projections, but it is not obligated to do so. Any projections of future results of operations should not be construed in any manner as a guarantee that such results will in fact occur.

These projections are subject to change and could differ materially from final reported results.

For a discussion of such risks and uncertainties, see Risk Factors in ImageWare's annual report on Form 10-K for the fiscal year ended December 31, 2015, its quarterly report on Form 10-Q for the quarter ended June 30, 2016, and its other reports filed with the Securities and Exchange Commission under the Securities 3 Exchange Act of 1934 as amended.

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A webcast replay will also be available via the link provided in today's press release as well as available on the company's website at www.iwsinc.com. Any redistribution, retransmission or rebroadcast of this call in any way without the expressed written consent of ImageWare Systems Incorporated is strictly prohibited.

Now I would like to turn the call over to the Chairman and Chief Executive Officer of ImageWare systems, Mr. Jim Miller.

Sir, please go ahead.

Thanks, Kevin.

As you saw at the close of market today, we reported financial results for the second quarter ended June 30, 2016. And I'd like to begin today's call by speaking first about some specific financial results for the quarter, and afterwards, I'll walk you through some recent developments.

In the second quarter of 2016, total revenue was $1 million compared to $1.7 million in the second quarter of 2015. The difference is primarily due to the impact of nonrecurring revenue recognized in 2015 upon completion of a major identity management project for the Los Angeles World Airports.

Gross margin in the second quarter of 2016 increased significantly to 72.4% compared to 52.9% in the same quarter a year ago, primarily due to 2015 containing an uncharacteristically high cost of professional services revenue incurred with the Los Angeles World Airport project.

Net loss in the second quarter of 2016 was $2.1 million or minus $0.02 per basic share compared to $1.8 million or minus $0.02 per basic share last year. At June 30, 2016, cash and cash equivalents totaled $327,000 compared to $3.4 million at December 31, 2015.

Total debt was $1.5 million compared to no debt at December 31, 2015, and subsequent to the quarter, we borrowed an additional $500,000 but still have $3.5 million available on our line of credit. We have a number of deals in process which will provide positive cash and sufficient liquidity to operate our business.

It's unfortunate that the deal process doesn't respect the timing of our shareholder calls or quarterly reports, but given the availability of our credit line and that these deals are in process, we are comfortable with our liquidity. We have also had some recent interests from several strategic investors, and we are investigating that as well.

The bottom line is that we have a number of different opportunities that will enable us to take the necessary steps to bolster our balance sheet.

Moving on to recent developments. Given our growing network of commercial partners over the last couple of years and in the interest of time, we no longer believe it makes sense to run down the entire list of partners and provide updates on a one-by-one basis.

Instead, we'll focus on providing updates on new partner agreements signed over the last few months and comment on established partner agreements on a one-off basis, depending on the materiality of the new information. However, it's important to note that we continue to make progress with most all of our partners.

We think it's fair to say that our partners all expect that they would move things along quicker and based on their expectations, we did as well. And they have become more knowledgeable about biometrics and what is involved in the implementation of a large-scale usable system.

They, and sometimes we, have had to go back to the drawing board to rethink the product, the strategy and the steps to implementation. Keep in mind that no one, I say again, no one, let alone some of the world's largest corporations, will be taking these steps spending their time, their money and efforts and putting their world-recognizable brands on a product, a company or a service that they didn't believe would yield a sustainable return on investment.

Many of you have expressed some frustration at what you see as some lack of progress on our many significant partnerships. Some of the world's largest corporations have selected ImageWare to provide biometric authentication to their clients.

Like us, they believe industry reports from the likes of Gartner, Forrester and IDC, forecasting that biometrics will be a $30 billion-plus business by 2019. Up until now, the private sector biometric business has still been in its infancy in terms of consumer and enterprise adoption.

In order to be ready to participate in this coming market explosion, IWS and its partners have needed to build ability and capacity, sometimes brick-by-brick and step-by-step. Now some investors don't like that process, and we'll confess that our lives would be better and a bit easier if it all went quicker.

But folks, this is how a large business is built. You just don't wake up one day and decide to secure 100 million identities with biometrics.

You need to build that ability, which involves working on large networks, and integrating with sometimes many different applications and let's not forget, changing a 50-year pattern of authenticating identity with a PIN or a password.

they are seeing a global market for these products, and they are readying for mass deployment. It's the only reason a company of their statue and success would spend the capital and effort to do these things.

Last month, we expanded our partnership with FUJITSU to provide turnkey integration of GoVerifyID onto FUJITSU's RunMyProcess platform. RunMyProcess is an award-winning cloud platform provider and innovation subsidiary of FUJITSU, enabling digital transformation for hundreds of Fortune 1000 Companies in over 45 countries.

Our partnership will enable RunMyProcess to make it simpler for their customers to integrate secure and flexible biometric solutions that can work with a variety of legacy systems. FUJITSU is doing this to address its customers who are running legacy systems that cannot be moved within a workflow.

Now these customers, too, can avail themselves of biometric authentication.

Yesterday, we announced our certification with our partner, CA, for the complete integration of our GoVerifyID product into CA's authentication products. Just another partner announcement?

Hardly. What this means is that we are now a holistic part of the ID management system of CA.

If CA adds new users, they can be biometrically authenticated with IWS. If existing CA single sign-on users want to use biometrics, they can now seamlessly use IWS biometric authentication.

Since CA identity management products are one of the largest selling products in the world in that space, the seamless integration between our products and theirs is a major step on the critical path to moving these products to large-scale adoption.

with over 65 million users for the product and growing, ClearPass represents one of the largest targeted populations for biometrics in the private sector to date. ClearPass is now built so that any user wishing biometric authentication need only pull down the menu, click the IWS biometric option and enroll their biometrics to begin use.

As a result of this integration and the strength and ease-of-use of our technology, IWS was placed on the HP exchange platform, which allows other HP partners to avail themselves of this technology. So if you're using ClearPass to sign on to a product and you are an HP partner, such as AirWatch, ServiceNow, MobileIron or a number of even larger companies, you can also now use biometrics from ImageWare, a further major step on our plan to be resident and ready biometric providers of choice as the biometric market unfolds.

With 65 million customers, if only a fraction of those users elect biometrics, ImageWare will be a very successful company from just this one partnership. So you can easily see why we're so enthusiastic about our HP Aruba partnership.

An almost immediate benefit of our relationship with HP Aruba has been our newly signed reseller agreement with Telos, one of the largest resellers of ClearPass to the United States federal government and other private sector customers. Telos is a leading provider of continuous security solutions and services for both the U.S.

federal government and commercial organizations.

Under the agreement, Telos has become a reseller of GoVerifyID by offering Aruba's ClearPass integrated with our technology. Telos will be providing the integrated solution on the Amazon Web Services partner network as well as their own Telos Ghost, which is the Telos proprietary private cloud platform that offers anonymous mobile, voice, video and network access.

The Telos sales force is being trained this week, and they will then be out in the market. Telos is excited about the prospects, and since they know and lead their market, we are as well.

More recently, just last week, we signed a 5-year OEM agreement with a major mobile ID management provider. This OEM is a leader in the development of enterprise password management tools and has several high-profile Fortune 500 clients that use their software and services.

Under the agreement, this OEM will market and resell a combined solution with GoVerifyID integrated into one of their existing product lines. While we'd like very much to name this major ID management provider, it's in the best interest of our client as well as ImageWare's to hold off until this client can fully deploy its go-to-market strategy and capitalize on first-mover advantage among its rival competitors.

We hope to more formally announce this OEM agreement in the near term.

On our last call, we spoke of our development relationship with SAP, and we're pleased to report to you today that we have now completed our development and are in the final stages of clearance for putting GoVerifyID into the SAP marketplace. We believe that clearance is imminent.

And finally, you should know that during the quarter, we have started to receive small but nonetheless consistent Software-as-a-Service revenue from users of our products who have on-boarded their own users. This, in addition to regular recurring monthly revenue, produced by existing Software-as-a-Service locations such as the Baja California driver's license.

Now before delivering some closing remarks, we'd like to open this call up for your questions.

I wondered if you could just provide a little more color on the talks you've had with strategic investors with regards to liquidity and overall funding of the business.

Yes, well, it's -- they're all at different stages and all fairly sensitive. I know you'd understand that.

We were approached by a couple of different parties who, frankly, liked the company's product, disposition and what we've been doing and suggested that they might be interested in taking a more of a position in ImageWare. That's something that we were not initially seeking, but I think it's important when strategic players express that interest that you've run those to ground.

So that's kind of like -- as I said, we're in the process of looking at those. They are serious folks, and so they deserve to be taken, all of them, seriously.

So that's kind of where that is. These would involve equity positions in the company at a market price or even higher.

Okay. And then I know you spoke of the line of credit as well.

And then I may have missed the first part on this -- the deal that you guys had in the pipeline and just sort of near-term liquidity that you guys have. Could you just elaborate on that a little bit as well?

Yes. We've got a number things that we have been working on that have been longer term and some of them shorter term that have just come up.

The biometrics industry is changing radically for the better and very, very quickly at last. And so there are a number of deals in process.

Several of them are quite large, and as those fold to close, assuming they do, it will generate more than sufficient cash flow and positive cash, in fact, to drive the operations. So obviously, we're focused on that.

That's job #1 is to basically reel those in, close them out and book the revenue with them. So these are just sort of business-in-the-normal-course kinds of deals we've been working on and the kind of deals we -- we have a number of these in the pipeline at various stages.

I was wondering if you could comment on 2 things. The first is that several quarters ago, you mentioned that FUJITSU had a dedicated sales force.

Is that still the case and can you comment on any updates there?

Yes. It's a good question, and thank you for asking it.

They did have a dedicated sales force. We know the FUJITSU relationship has been transferred in terms of where it resides.

We started out with FUJITSU America, and there was a group of people that were dedicated to that process. As I think -- as we have reported to you over the quarters, our relationship now has been moved and it is now resident with the FUJITSU headquarter group in Tokyo.

And so there are different people selling the product. You can go on to the FUJITSU website and see very easily that Biometrics-as-a-Service is a big offering for FUJITSU.

They have been redoing -- my understanding is they're redoing their K5 Cloud to enhance its capabilities, and they are now in the process, just very recently, of rolling that out across the world. And hence, the upgrade of the Catalog Manager product, which will then dovetail with the new upgraded cloud capabilities.

Obviously, they compete in the cloud space with people like AWS, Amazon Web Services, and others. And so we now have personnel from FUJITSU engaged in selling in several different continents around the world.

But I think it's fair to say that the rollout was held up while they retooled the K5 Cloud. And so what you're seeing now -- what you're seeing now is these new enabling products, Catalog Manager and then the integration with RunMyProcess, come out just in advance of the unveiling of the new cloud and then I think a stronger kick off on the Biometrics-as-a-Service.

All right, great. That's helpful.

And then could you just -- on previous calls, you talked about a kind of -- an expectation for a cash breakeven and it seems like that's kind of pushed out a little bit. Any thoughts there?

Yes. I mean, it's -- look, it's been 100% determinative by the timing of some of these deals.

And as I said, our timing is largely set by our partners because that's our go-to-market strategy. I mean, while we do somewhat sell direct, we are largely a partner-selling organization, and if one of the partners says, look, we're going to hit the market and our expectations is we'll generate X, Y or Z in this time period, we have reported that along to shareholders.

To the extent that those time frames are wrong and are delayed, we sort of have to wear that, and we suffer through the delay as you do as well. So our expectations now are -- have been reset.

I think anyone can see who looks at biometrics, it's a different industry than it was a year ago. I would tell you it's Za different industry than it was a quarter ago.

There's a lot going on right now, and you don't go a day without seeing biometrics literally everywhere we look. The big article over the weekend in The Wall Street Journal about passwords, but The New York Times, The Washington Post, lots of papers around the world have carried articles very recently about the need to move away from PINs and passwords and just how vulnerable the world is using those as its security and authentication tools.

So we see now finally the real start of a movement after some false starts. And I think the partners would say that as well.

I mean, they expected to start sooner as well. But everybody's learning about a new business, and as I said in my earlier comments, while it might seem like you can just go out and sign up a couple of million people, it's not that simple.

There needs to be a number of things in place and that old habits need to be changed. The new processes need to be put in place.

The good news is, everybody's thinking now that way. So I think that while delayed, things like cash flow and those other metrics, which, believe me, are #1 in our list of things to accomplish as well, can now be accomplished

Actually, both of my questions were answered already. But as I'm looking at this, I wondered if you could give a little bit more color on the revenue model, specifically on the Aruba ClearPass and how that works.

I mean, you don't have to give me numbers on each individual adopter of it, but has it continued to be a monthly payment? And is it depending on how many users?

I mean, how does that work and what -- our expectation for that going forward?

Yes. Good question.

Thanks. Yes, the product is sold with HP Aruba as a service.

Therefore, it's per person per month. And we're not going to comment on precise numbers because the partners don't like it when we do for competitive reasons.

But you can take $65 million as a number that can be ascertained from HP's own public pronouncements. And by the way, HP is very enthusiastic that, that growth will significantly increase.

Our product, of course, is fully integrated today, and it is offered for sale today under the HP Aruba brand and trade name around the world. So what you can easily do, as I said in my remarks, I think, is just run some numbers.

I mean, you can take $65 million and just assume that some proportion of that slides over to Biometrics in the next 3, 6, 9, 12 months. And you can play with a variety of numbers.

I mean, we're not selling the product for a couple of pennies. It's obviously more than that.

And I think you can see that even at numbers that I think most people would say wouldn't represent successful deployment, I mean, at 10% of $65 million would seem to some people like, wow, that's a pretty low number, but even at that, you're talking about $6.5 million and up per month times a number. And it's a significant revenue stream from just one, one partner.

And our breakeven in this company has remained steady. It is somewhere between $3.5 million and $4 million per quarter, depending on the margins and in the software products.

By the way, we think as we sell more SaaS products, those margins that we've announced will increase. And so it does not take much to move to the goals of the cash flow positive and the profitability just based on the things the we've got in place today.

And as we've said, there are a number of these other deals that are coming online as well. So -- and Aruba is the largest targeted biometric deployment so far that I've seen to date.

It dwarfs things that other people have been -- in the private sector, not in the public sector. So I think it's a terribly significant partnership for the company.

And as I've mentioned also in the remarks, we're privileged and honored to be put on the HP exchange. That's just a very nice accolade that speaks well to our technology that HP would set it up so that other of their customers could avail themselves as well of it.

So I think Aruba is a tremendous opportunity on a number of levels.

Just a couple of questions. I want to follow up and I think the first person who asked -- when you talk about the cash position, we have a $3.5 million line left.

When you're looking at the forecast this year and into next year, do you anticipate on drawing them down further from the line? And if so, what -- to what degree?

No. I don't think that subsequent draws will be much, if at all, Bob.

We, today, have about $1.2 million in receivables that will be collected over the next year term. And in addition, we have a number of deals in process, which as I mentioned, would yield cash flow and positive cash flow.

And then the variables would be what, if anything, happens with any kind of a strategic interest out there. But I think that we're very comfortable with where we are, liquidity-wise, at the moment.

I will tell you that if for whatever reason, the people have come to us in the capital markets and have suggested investment. They've done it at market rates or better.

And so that's out there, too, but we're -- our concentration is to drive the funding of the business through our operations. Period.

And -- terrific. And then before I ask my next question, I'll stay on this -- the strategic partners for a minute.

I recognize you're probably very limited in what you can say, but are those -- because we have so many partners, are those strategic partners that have expressed interest from our existing partners? Or -- can you comment on that or not?

Some. Yes.

Kind of an interesting combination. Some present, some new.

Yes. There's a lot of folks that are kind of waking up now to the biometric market, seeing that it's finally kind of going into a dynamic state as opposed to a static, sort of slower state, which we've all painfully seen, and have -- it's sparked a lot of interest.

As I said, as you look at -- if you look at the forecasters, the pros, the Gartners, the Forresters, the IDCs, they are forecasting, as I said, $30 billion is the sort of running estimate these days in the 2019 timeframe. In order to get to that number, you're going to have to start like now.

So I think people are getting ready to place significant bets on the space and because we have amassed a very, very good catalog and group of partners, we've drawn attraction and notice and attention.

Terrific. One final question and I'll hop back in the queue then.

The -- it appeared from reading the release that several months ago, the -- Medicare approved the reimbursement for the tracking procedure -- what appeared to be the tracking procedure to obtain the necessary information that the -- from patients that at least for me reading the reviews that the pillphone seems to go -- 2 questions. Is the pillphone still the only FDA-approved tracking device?

And more importantly, have we received any traction from the reimbursement potential? Or is it status quo?

Yes. Thanks.

That's a great question. And thanks for mentioning it because it's worth, absolutely worth talking about.

Well, for the rest of our listeners, the Medicare reimbursement rules were changed over the last few months, allowing certain telehealth and software applications to qualify for reimbursement under the Federal Medicare rules. We believe they -- the pillphone and others believe the pillphone would be one of those products that would qualify for reimbursement.

So if prescribed by a doctor, so much of that prescription cost would be paid by Medicare. It's a significant breakthrough in telehealth and particularly, as it affects the pillphone product.

The pillphone is, as far as we know, today the only FDA-approved product, software product for medical adherence and reminders. Over the last couple of months, those rules were just promulgated in the last little bit end of May, I believe.

And we have had significant interest, actually, in the pillphone, a couple of different groups, some are what I would call regional. A couple are what I would call national.

And so think insurance companies and providers like that who are seeing the change in Medicare rules as an opportunity to put their name, their brands and partner up with moving this kind of medical adherence product to market. Happily, we have that product and that sort of arrangement where we would license it would be adapted to a larger company or even to a regional player that is strong in the region would be the best case, I think, for implementing and seeing the pillphone go out there.

Obviously, it would also involve licensing revenue. The idea here is again not only to sell it for some upfront licensing, but also on a per-person, per-month basis.

It would be sold as a SaaS going forward. So yes, we're seeing quite a resurgence there, actually.

It's interesting and exciting all at the same time.

And I said I'd hop back in the queue, but just one more question that popped into my mind. Could -- I know you want to go deal by deal, can you give any update on FEMSA?

Oh, yes. Thanks.

Yes. FEMSA is still in the -- it kicked off May, I want to say 19th, but middle of May.

And where it is now, it is -- FEMSA is still in the trial stage process. They are part of the group that I said -- it regularly pays the company on a monthly basis.

So we are, at some point, hopefully over the next 30 to 40 days, we'll start to move to making this more of a production-type system. But so far, so good.

The system is running as it should. And the customers's satisfied with it.

So it's all good.

Jim, you mentioned how dynamic the marketplace was. I -- this time last year, how many proof of concepts did we have in rolling out [indiscernible]?

This time last year, Bob, we probably had 1 or 2.

And what do we have [indiscernible]?

Double digits, a couple dozen. Yes, I mean, it -- like I said, we see the -- I mean, you all see -- can -- you see it in the press, just -- I used to have to -- we used to have to explain what a biometric was to people.

And now everybody knows what a biometric is. They know why it's important and why they should use it.

So we're seeing a really rapid expansion of interest, knowledge. People are getting hit in terms of being hacked.

I -- coincidentally, sadly, I just was yesterday on a credit card, where somebody fraudulently tried to do an Internet purchase on a card that they acquired from me without permission or knowledge. So this is a prevalent thing.

It used to happen to other people. It's happened to all of us now, and sometimes, it's happened to us a couple of times.

So people understand that they need to do this. As people acquire more knowledge about biometrics, they -- and this is true of all of our partners, they go through a process.

Is biometrics a technology they can use? If so, how do they acquire it?

Do they build it or do they buy it? And in our case, I think, they look at the products that are built, which are both useful, usable and great technology.

The patent position of the products plays a big role in that as well. And the products are ready to go.

So you don't -- the time to market is now. It took HP Aruba a very short time.

They did the integration on their own without us having to help them because it's easy to do. And they wanted to acquire the knowledge themselves.

So it's -- we are able to get a lot of interest, not only because the world in which we're living in generates that interest every single day, but also the products do what they say they're going to do. So when people see them, they realize that it would be much better to partner with a provider that does this for a living every day than to try to go and reinvent this, try to navigate around any IP issues and spend a whole bunch of money and time while the market goes and passes you by.

So I -- it's just a -- it is finally the market we thought we were going to see several years ago. It's happening now.

And again, you only need to look at the headlines and what the public projections are for the market analysts that cover the space to see that very, very graphically portrayed.

Jim, could you -- one thing. I don't know if you mentioned this, but can you give us an update on the German health care situation?

Yes, yes. Thanks.

I can. We are literally at the last stage, which is awaiting the purchase order to start.

The Deutsche Telekom folks and the German medical establishment folks have got the test region set. We know what needs to be delivered.

The next step is to get the purchase order and kick it off. So we'll hopefully be starting work on -- I'm certain, it'll be very, very soon, certainly in this quarter, it will start.

As I understand it, there'll be over 80 million people covered by this [indiscernible]?

Well, the first -- there's a couple of different phases. Ultimately, there are 81 million citizens in Germany.

Germany is a single-payer government-provided universal health care country. So the intention here is to replace the existing health care cards with biometrically authenticated cards so that there will be a reliable indicator that you are qualified for medical treatment and coverage under the German state health care plan.

But before we get there, we will enroll a large number of the country's doctors and this will help implement a program that will enable secure transmission of medical records between licensed physicians, which is also a part of this program to streamline processing, make diagnosis and medical treatment quicker, alleviate use of multiple doctors. So first thing's first, we do the doctors and then we move to the patients.

Yes, that's correct, 81 million is the total number.

And so can I assume then 81 million times a number will get paid annually 81 times, 81 million times x?

Yes. That's the current thinking on that.

As I said that the project has morphed a little bit. It was originally going to be set up for a mobile situation, and now it has reverted to a biometric on card, which has changed the parameters and the pricing.

I think all to the good. But yes, that's the intention, right.

And have they given you any indication how long it would take to implement the program to have it rolled out to the 81 million people?

Well, we don't have a hard date on that, Bob, but I think realistically, it's several years. I mean, that's a lot of folks, and as you've heard me say before, they only have to do it once, but they do all have to do it, and that's enroll, and that's a couple-minute process, one-time only, but nonetheless it's part of the process.

So I think in order to get all that set up and done, it would take them several years to go through the enrollment. But of course, based on per person per card, you'd be -- as these cards are generated just like in Baja California, you'll be making revenue on every card that's generated.

Annually.

Yes.

Very helpful, very informative so far. I have a couple of questions for you, maybe 2.

The first part of it is, you've talked about FEMSA and German health. Could you clarify a little bit about what's going on with Computer Associates?

I know we've been doing a lot of things and we've been into integration and so on. When do we really get into the business-deal stage with them?

Yes, we're there now. If you saw the announcement yesterday, CA was quoted in the announcement along with us.

These are products that are now ready for sale. And this is part of a process that we started 1.5 years ago with CA where we were named an advanced partner in their program as we said at the time, and it's worth saying again for context, the advanced partnership program are technologies that CA Technologies has decided that they like and they want to look at taking to the market.

And so we were selected to do that. Over the last period of time, we have proven that integration works, proven that the product works and then CA does its own brand understandably because their brand is, in fact, on the product, its own brand of very rigorous testing to make sure that the product can run and scale and operate not just in small groups of 10, 100, 10,000, but in groups of millions and hundreds of millions because that's where it's ultimately going to operate in.

And so what you saw yesterday was the 2 companies announcing that we are now done with tests and integration and all of those things and that we are moving to the market phase, so these are immediately available products from FDA.

So the economics between the CA and IWSY have been established. You -- you're now comfortable with what they're going to pay you?

We're not [indiscernible]?

Yes. CA has been a great partner in so many different ways.

But also, we dovetail very nicely because CA is one of the great pioneers in selling all of their products as a monthly service. So our models from day 1 were joined at the hip.

And that's different than converting someone who doesn't sell product that way to try to slip those into our model, but there was never an issue there. CA settles their products this way.

They will sell the joint product and remit money to us.

Okay, great. And then the second question, you've talked in your opening remarks about having some options or exploring some options to shore up the balance sheet.

Now, it would be great if a strategic partner comes in under the right deal and that would be fine. Or if everything happens on time, and we in fact, move immediately into cash flow positive, which sounds like it could be possible, but is there a contingency plan for using some kind of a financial institution to get us some additional investors so that we have a little bit of a cushion on the balance sheet to take us into what looks like a very exciting period where you have an awful lot of income and traffic on the business front.

Yes. I think -- look, I think it's fair to say that we look at these options, which will not surprise you or anyone, literally every single day.

And we are mindful of the balance between going down the road and adding additional equity in the capital market and doing it through operations or -- or other alternatives. I think it's fair to say that what we're really not interested in is sort of a basic retail-type financing.

We have enough interest in the company aside from strategic players that if we were able to do a deal, I think, on terms and conditions, that would be very satisfactory and wouldn't involve sort of the typical kind of things, warrant coverage and other things that you see in deals for companies of our size. So that's something that is really not on the table at this point.

We look to be in actually pretty good shape in terms of what is their short term and then the deals that are in process. So as I said, I think we're pretty comfortable.

Obviously, we don't want to be foolish. You don't want to risk the business for the sake of not doing something, but at the same time, I can tell you that we're also comfortable that there are a number of, I'll call them, nonretail options that are out there that would be attractive if they get one elected to do that.

So a way to interpret this would be that you have had conversations with what I'll call recognizable or legitimate banking firms and they've expressed confidence that some kind of institutional placement could be arranged if and when that appears to be appropriate to you. But it may not be something, it may not be necessary, given the cash flow picture.

Yes. We -- I think I actually, no.

That's not correct. We have not had conversations with -- with traditional banking firms about a raise at all.

It would be from -- direct from the company to an institutional or a qualified investor. If we get, if, again, they get -- we did something, yes?

Thanks, Kevin.

In closing, we continue to believe we have the right products in the right place at the right time, and we continue to see commercial and consumer adoption grow day by day. Those of you who follow the market see it as well.

Biometrics is literally everywhere one looks these days, and for good reason. The consistent security breaches are also a constant reminder of the need for biometrics.

And we remain confident, our unique multi-modal technology, combined with our robust, patented, backend biometric engine platform, which handles all types of biometric modalities in very large scale, will enable us to be a leader in the biometrics space while our wide range of commercial partners will enable us to target multiple industries and reach millions of users across the globe. The biometric market is a real and very large growing opportunity.

These markets are built step-by-step, and as we've said before, adoption is not like turning a light switch on with immediate large results. It is in its early stages, but biometrics is moving now at last, but quite quickly.

This could be judged from the actions of existing partners who are taking steps in spending their own time, their own money to move products and market along the path for large-scale adoption. It can also be judged from the veritable explosion of interest in the company's products and the increase in number of parties interested in and, in fact, now participating in proof of concepts with the company's GoVerifyID products.

As always, we'd like to thank everyone for joining the conversation today. We appreciate your time and your ongoing support.

And we're very much looking forward to speaking to you along the way and when we report our third quarter results in November.

Good afternoon to all of you.