Thank you, operator, and welcome to those of you joining our call today. Our financial results are available in the recently published news release and on Form 10-K.

For context on today's call, I will provide a brief summary of those results. Revenue for the year ended December 31, 2018 totaled $4.4 million compared to $4.3 million for 2017.

Revenue for the fourth quarter of 2018 totaled $1.1 million compared to $1.2 million for the same quarter of 2017. Revenue for both years primarily reflects our legacy business.

Gross profits for the year ended December 31, 2018 was $3.5 million as compared with $3.3 million in 2017. Gross margins increased to 80% in 2018 compared to 77% in 2017.

Gross profit for the quarter was $906,000 as compared to $975,000 in the same quarter of 2017. Gross margins for the quarter increased to 85% compared to 80% in 2017.

The 2018 net loss from continuing operations was $12.5 million as compared to $10.2 million for 2017. The fourth quarter net loss from continuing operations was $3.1 million compared to $2.4 million for the same quarter of 2017.

We ended the year with $5.7 million in cash. This concludes my financial summary, and I'll now turn the call over to Jim for the progress update of our business strategy.

Thanks Wayne, good afternoon to all. I'm very pleased to have the opportunity to speak with you all today.

Most of you on this call have been on our calls before, and you're already familiar with our technology overview and with what our patented multimodal biometric technology does, how it's different from and superior to, other competing technologies and why it's needed. For anyone who would like to drill down into that information one-on-one, our investor relations team is available to speak with you or you can visit our updated Web site at iwsinc.com, which I think you'll find extremely informative.

Speaking of biometric technology, you may have seen last week's Wall Street Journal story about the growing use of biometrics in the workplace and workers' concerns about the security of the data when companies gather employee fingerprints and retina scans. Continued data breaches like the very recent problem with FEMA have begun to frustrate the mass-market.

But this type of news only strengthens the ImageWare value proposition. We are the only company that offers true anonymous biometric security.

We do this by employing a technique we developed and patented to separate biometric matching from personal information, so that in the remote event of any security issue an intruder would only have access to useless biometric templates without knowing who they belong to. With our portfolio of patents 22 issued and 25 pending for cloud based anonymous storage, transmission and matching of multimodal biometrics, only ImageWare can provide the ultimate level of authentication assurance and security.

I'd like to take a minute from the formal presentation to point out what is fundamentally different about the ImageWare of today as compared with the ImageWare of the past few years. We've always known and as I believe that our long-time investors do that ImageWare was ahead of its time with a very powerful best-of-breed scalable and patented biometric technology.

The important question for all of this was could this technology become a successful business. As you may have seen in the two recent 8-K filing announcements that question no longer exists.

The business from our partnership with Contactable with the mobile communications carrier put ImageWare on a path to profitability. And there are a handful of new transactions in the pipeline that we expect to announce in the second quarter.

As to the question of why this is happening now when for years we've struggled to close deals. Well, our answer is that we aren't doing things very much differently and we haven't come-up with a magic formula.

What has happened is that the market, the biometric authentication market has begun to catch-up with us. Identity is the new security perimeter.

Throughout the world companies and governments spent billions of dollars to install firewalls, threat detection systems and other products that protect the perimeter of their network. But having spent those collective billions we're still left with the fact that's reported by Verizon.

8% of all security breaches are the result of compromised passwords and pins. So, they don't work.

And on top of it all, those passwords and pins are not easy to use or remember, and we change them with incredible frequency. With the introduction of the IWS Digital Identity platform, we now have all the products integrated together, which allow the customer to create a digital identity, fully vetted against the government issued document, use it thereafter for reliable biometric authentication and manage that identity through its lifecycle, all from one vendor, ImageWare.

The need for this digital identity platform is finally being understood and addressed and our value proposition and message are finally resonating in the market. That makes for a huge difference, and it's here now.

Now, I'll focus on what we and our partners are doing in terms of our sales efforts. On February 8th, we filed an 8-K, which disclosed that we had entered into a definitive agreement with a global financial services provider to provide multimodal biometric authentication solutions for a healthcare application.

Under the agreement, our GoVerifyID mobile biometric solution will be part of the system used to help ensure compliance with mandates under the 21st Century Cures Act, which require states to implement Electronic Visit Verification, or EVV, for patients, which will create a digital record of the care provider and authenticate the care provider and the patient. Our new customer is set to begin his use of the system in May.

EVV is mandated by federal law for personal care services provided under Medicare. It will be expanded over the next several years as mandatory for home care services provided under Medicare.

Using both biometrics and GPS on a laptop or mobile device, our product creates a digital record of the caregiver, the patient, the address visited and it allows access to electronic medical records, which can be protected under HIPAA by biometric authentication. Last quarter, we told you we entered into a license agreement with Contactable, a partner of ours whose products allow for the creation of a person's digital identity starting with vetting that identity against a validly issued government identity document, such as a driver's license or a passport.

Earlier this year, Contactable entered into a five-year agreement with ImageWare to resell our biometric products, which have been fully integrated as part of their offering. On March 18th, our 8-K filing disclosed that through Contactable ImageWare has been awarded a contract to provide the biometric authentication as part of the services provided to a major multinational mobile telecommunications company.

The initial phase of the agreement is for a region, which has approximately 30 million mobile customers with additional phases anticipated. Contactable will provide the IWS multimodal biometric engine for the biometric authentication.

While I'm precluded from discussing price points for the moment, the size of the contract will yield material results for IWS as we move through the various phases of implementation. The mobile carrier will use biometrics for such things as mobile payment authentication, fraud detection and prevention, et cetera.

The carrier will have a mandatory phase-in period for all existing customers and of course biometrics will become the new standard operating procedure for all new customers. Our partner will start their deployment in the second quarter and we will follow on in the second half of this year.

This particular carrier has several hundred million subscribers worldwide, so this opportunity is expected to be a game changer for our company. As important, it delivers a key ingredient to us we've been lacking.

While we have world-class references in our government space, such as the Canadian Transportation Security Administration, the U.S. Veterans Administration and State of Arizona, we've lacked those large references in our private sector business and now we'll have them.

As we stated in the past, mobile carriers are a perfect user for our products and we look forward to concluding deals with other mobile carriers this year. I'm catching you up on previously discussed deals and projects.

Our partners at CDW closed eight deals for our GoVerifyID enterprise product in 2018. Most all were for employees of small credit unions.

Of course this how one moves from small groups of employees to larger groups of credit union customers. CDW tells us that it expects to significantly increase the number of these deals in 2019.

We're very excited about our partnership with ForgeRock, a leading player in the identity management space who has integrated our GoVerifyID product and our identity proofing into ForgeRock's products. Our two companies will kick-off their joint marketing and sales of these products to ForgeRock customers at their U.S.

national sales event in Nashville, Tennessee on April 30th. On the Fujitsu front, we continue our work with Fujitsu and their partners on securing a large reference account for the MedClick product, which you'll recall is a private labeled version of our pillphone application.

We're in the process of the initial deployment for the Canadian financial institution, which we sold in last year's Q3 with Fujitsu and we continue to support Fujitsu's efforts as they work with ServiceNow to introduce a new version of a HelpDesk product, which using biometric authentication will make HelpDesk both more efficient and more secure. This effort has been a long path to travel but we continue to see evidence of why it continues to be worthy effort as it makes its way toward deployment.

IBM selected ImageWare to work with them to create the biometric authentication software for the next generation Canada TSA restricted access identity control product. This is a $2.8 million order.

We generated our first revenues in our Q4 from that effort, and we have just completed another milestone, which will generate revenue in our quarter one. We continue to anticipate completion of this entire project in this calendar year.

The question of our need for capital has been asked by a number of shareholders if we decide to raise capital to help speed our growth and strengthen our balance sheet. We believe that capital is available from existing shareholders who would like to increase their ownership.

We've also semi regularly receive questions about the 2-plus million share short position in our stock and about naked shorting in IWSY. I thought you'd like to know that one of our stockholders has recently taken action by contacting the SEC to request an inquiry into naked short selling in our stock, asking that action be taken against the people and companies involved in these security violations.

These regulatory wheels typically grind slowly, and we'll keep you posted of any future developments. But suffice it to say that we'll all be very happy to have naked shorting stopped.

And one last thing before we turn to questions and I've said this before but it's important to say it again. The process we take with each partner and potential customer is unique to that specific partner or customer.

Each has its own set of objectives, market forces, processes but these would be navigated prior to going to market. Sometimes these processes especially involving very large companies move at a glacial pace but they are in fact all moving forward towards very large markets as evidenced by our two most recent 8-K filings for agreements, the logjam has finally been broken and the market is exploding.

And now, I'd like to turn over for any questions you might have.

With respect to your two 8-K customers, can you give us more detail on number one, when they'll be starting to pay and show-up on the statements. Secondly, when you will be able to name them by name, and three, can you give us just a bit more detail in terms of their willingness to be a reference customer for future growing RFPs?

Thanks Paul for the question, let me see if I can do them let me do it in reverse order, if I could. As to reference, emphatically yes.

As you know and as I just alluded to in my remarks that has been one major thing we believe that has eluded us. Nobody likes to be first.

People are much better at being 3rd or 4th, particularly when it comes to adoption of a security product. So we have that in place now.

And yes, both companies are very happy to have this and be referenceable for us and for them. They both the companies involved are making their way to their own public disclosure of the deals in the healthcare space that will come as we go to full production deployment in the initial state, which is now scheduled end of April, 1st of May.

They are finishing up their final integration of our product into theirs and doing their tests and checks. And we will be on to that and it's our understanding that they'll announce that when it's out for deployment.

Similarly, I know that with our partner and the telecommunications company, they are actually working out the details as we speak of what would be an announcement about this. So we would expect that'll be out there fairly shortly.

It's a little frustrating for us too, as you can imagine. But in both these cases, we act effectively as subcontractor.

So the rules of the road are set by our prime or by our ultimate customer, and the penalties are too big to avoid compliance with that. So, we stay with the agreements we made.

In terms of on-boarding, similar thing, the healthcare should start in May. And when it does that as people come onto the system, it's a software-as-a-service model.

So it will yield per person per month revenue. We go into the billing cycle and the turnaround, so we're expecting to start generating those revenues in May on the healthcare one.

On the telecommunications went a little bit different there again, we're effectively a subcontractor to the contract holders, which is our partner Contactable. They'll be starting work at the end of April this year.

And so, we'll be coming on after them. But I think effectively what that's going to mean is more in the after the June timeframe, because they need to set up some things and get their on-boarding put into place.

You can't have biometric authentication until those digital identities are created and successfully put in the database. The good news is, as I said in my remarks, this is mandatory program, it's not optional.

So, all the subscribers in the system are going to be pushed onto the system. So a couple of different use cases with different paths to revenue, but that's how we're looking right now.

And then can you give more detail on your progress with some of your retailers, you alluded to Fujitsu and some of the others you've had for some time? Is there anything you're doing to maybe better engage them or motivate them to actively sell the product and yes, [your thoughts on that] [ph]?

I think one of the things that we're seeing happily is that, we've called on quite a few companies and partners. We've had quite a few partnerships as folks know.

And one of the things that people have been saying is when they initially partnered up they didn't have a complete understanding of the market. So they've had to do a little learning, that old saying, you don't know what you don't know.

And then when know it, you are way smarter, because it isn't just a lesson someone else told you you've actually lived it and learned it yourself. So we've seen a number of these companies come back to us now.

So folks like, for example CA, who we started and stopped now back we engaged with a new freshness into the partnership, which we're excited about. Similarly with Fujitsu our longest and oldest partner, I think has spent a fair amount of times, trying to figure out how to move these products to market, where we belong in a complex eco-structure called Fujitsu Corporate You also have to navigate around the changes in personnel, which we've had a few of.

But we have gone back to each and every one of the signed partnerships and a couple over the ones where we had engaged in conversation, and we're pretty gratified and excited by the reaction we're seeing. Folks who'd waved it off or folks who'd even entered a partnership agreement but just couldn't quite figure out how to get to market.

I think part of that was they were in the same place we're in that was we're early to market. And now that market is turning around for all the reasons we know and discuss, the security issues in the world have not abated, they're not going to abate.

They're only getting worse and so they are now finally demanding action. So a number of these partners now are re-engaging back with us, maybe more importantly than us reengaging with them, because that shows us that they have a desire and an interest in getting this thing going at last.

So we're in, we've got a pretty broad array. As I said, the ones that we have reported and a whole bunch of ones that we have tried to make partners in previous attempts but didn't are now coming back and we're in those discussions about those partners.

So I think there's really a fundamental change that's gone on the marketplace that's driven all this interest. And the good news is we'll be the big beneficiaries of that.

I appreciate, and I'm pretty excited about the multitude of contracts that we are currently working on. And my two questions were partly answered if you think that they were fully answered, you can just move on.

But they involve the two large contracts that we recently announced the two 8-Ks, and the first one. I wonder if you could give us a little bit more clarity and color on how that helps your product work, what does it do in terms of security, why is it needed in that healthcare area?

And the second question is, we talked about the telecommunications company, and depending on where we're looking and reading. We're talking about a huge range or an implementation of I don’t know $30 million or $40 million, if I can use that number.

And my question will be that assuming those hypothetical users, what period of time are we talking about. I mean these are not, as you said, these are mandatory sign-on.

So my question would be is that $30 million in a year once they start or $30 million in a month, or five years or what's the timeframe for that?

As I said, we are not the main contract holder. We are provider to the main contract holder.

You need to get digital identities vetted and created first before biometric authentication goes to work, so there's a little fundamental foundational work, I'll call it that goes on before we get involved. In terms of how many people can be added to the system, tens of thousands or in excess of that can be added in a single day to be candid, I don't think anybody's ever on-boarded a system of this size in the private sector in this way.

So it's a little bit of new territory for all of us. But assuming that the carrier does its part to ensure that the ultimate end users are mandatorily put on the system, let's put it that way.

There's no reason why you couldn't add thousands and thousands of hundreds of thousands of people over real short periods of time. So that's how it sets up.

I wish I had an exact date, time and place a number for you, but the fact that of the matter is that we don't have a historical record in this context to go off. So I just don't have that.

In terms of the healthcare deal, it’s really exciting. I think it's a perfect use case for biometric authentication.

It's one that we have modeled internally here well before this deal came to pass. First of all, I think what folks should understand that it's federally mandated.

That is that the notion of electronic visit verification mandated by federal legislation called the 21st Century Cures Act, which requires the states to implement an EVV program for all personal care services supply them to Medicare. And that is a mandatory deadline of January 1, 2020.

The services are expanded to include all home health care and that mandatory deadline is in 2023. And there are penalties or non-compliance every year from now until then.

So that there is a perfect storm situation, if you will where the government is creating the mandatory piece of this puzzle so this is an elective. All states in the country are going have to go on to this program.

And very simply what it does our GoVerifyID program uses biometric authentication to authenticate the healthcare provider it will also authenticate the patient as that's required. And it will use GPS to give you a location of where the care was provided in terms of a physical address, as well as a digital date and timestamp.

So it really creates the perfect record. More importantly, it creates the record required by the federal law and we are pretty excited by it.

Again, mandatory programs going to be used by all the states. Our particular customer is going to roll it out in one designated state.

They have a number of other states also under agreement. So that has started as one and rolled down the road with them to others.

And is it replicatable? Yes, emphatically yes.

Could it be used by other providers in the space? Emphatically, yes.

So again, there is a big opportunity here and we have a ready product for it. We have a customer for it.

And we believe there are other customers out there as well.

Jim, a year ago on the conference call, you said let's spend a minute reviewing how ImageWare generates its revenue, and you went through it with numbers. Those numbers may have changed.

And I wondered if you could update your statements explaining and outlining how the company is rewarded for its software?

There we have two models that we are at work with right now, one for our legacy business, which is mostly government, state, local, some federal clients and that model works traditional old school software. There's, generally speaking, some upfront license that is purchased.

And then the recurring revenue is most often in the form of maintenance and support, which typically run anywhere from 15% to 20% of the original total of the contract. And so that's one.

The second one, which we have been moving toward in our private space products with GoVerifyID, particularly is software-as-a-service. So we will be paid an agreed on price per person using the system every month that they use it.

So again, very typical software-as-a-service model, transformational potential for our financials, because you will read yourself from the one-time peak and then you go into the valley, which is really periodic maintenance payments in favor of every month you're getting paid for supplying your service. And, that's what these two deals that were announced are also important to keep in mind, because they are that model software-as-a-service per person per month.

And it's also possible to price things transitionally per month as well. So when I say per person per month, you should also think there's a possibility and we've got folks we're in conversation with who want to do this per transaction.

Every time someone comes on the system and uses biometric authentication, there is a fee paid for that service. If they come on 12 times in a month, that fee will be multiplied times 12 so again, transformational potential for the financial aspects of our company.

And we're also by the way seeing some initial positive and really hopeful signals from government. They are changing their historical bias against software-as-a-service and moving quite frankly in step with all the industry, most all the software that you can think of is either sold in hours or headed rapidly to the software as a service model.

And again, very hopeful signs that we've had some government customers reach out and ask for pricing based on our software-as-a-service model, which would be just absolutely awesome development for us to move our government customers on to that. So that's how we do it, those two models that's how it's priced, volume impacts price.

The price points can be anywhere from $1.20, to $1.40, to $1.50 first in a month down to $0.50 or $0.60. Again, it's all negotiated.

It's all dependent on volume. It won't shock you to know that the more people that are on the system, the better the price gets.

So that's how it works.

The question after we have met back in December one of the areas I was trying to focus on was the sales side. And I don't if you're able to talk today about what you're doing in terms of adding sales personnel to make sure that you're able to meet the demand of all these RFPs and interest that you're now receiving.

We are actively looking as we speak for additional experienced folks in software as a service area. We've added one individual, very accomplished veteran in SaaS business executive sales personnel here that has joined the company just in the last couple of weeks.

We will be adding a couple more, both for domestic and international markets as well. So it's an active process.

We've moved some believe folks around since you visited with us and we've added one new key sales executive on sales staff. And by that I mean active outselling not management, but actually day-to-day selling and we'll be adding a couple of more here in a very short timeframe.

You identified the need with a lot of interest and we need to put a few more folks on making sure that interest gets created to deals and therefore revenue.

Just a question about non-competes when you land a deal like the Contactable landed that cellular company or the deal with the home health care services company. Are they asking that you don't sell to any of their competitors?

Are you able to open this up to folks within that industry, or they give you any restrictions?

No, the short answer is no. These are non-exclusive deals.

I will tell you that from time-to-time folks don't ask. But the answer has historically been no and for the foreseeable future, probably will be the same.

And part of that Jeff is some of our already pre-existing contracts with our partners, so to speak, that ship has kind of sailed. Exclusivity has already been out of the possible, because we have large parts of the world under contract with partners like Fujitsu, where they can already have the right to resell the product, and in any vertical market.

So no. But again the short answer is no.

We're big believers in non-exclusivity and the product plays well in lots of spaces with lots of different customers so we have so far been pretty successful in making sure the contracts are non-exclusive.

I'm just wondering if ImageWare has ever considered selling to another company in terms of being taken over by a larger company with more resources, maybe Microsoft or Apple or one of the bigger telecommunications companies like AT&T or Sprint that has more resources to better leverage the product that ImageWare has to offer, particularly with the mobile identification, companies like AT&T who have hundreds of millions of customers rather than just 10 million or 5 million, or something like that?

We do we do look at that as that possibility. I think it would be irresponsible for certainly a public company to not bear that in mind.

But I will say to you what I think I've said before publicly and what we've certainly said here internally. With 50.1% of our shareholders decided to put the company for sale and to actually sell it, then that's what we're going to do, whether someone likes me or anybody else agrees or not, frankly.

But we're always -- I think and I've said this before too, I think the outcome of success is eventually the possibility or the probability of what you're suggesting. As you're successful in lining up these contract, as you are successful in introducing the new model successfully, as you move to profitability and those metrics, you will attract folks who want to own it.

And absolutely again when the shareholders are ready to do that our management is ready to do it too.

I noticed that Neil Goldman is one of the major shareholders for the company. Is there something that you've discussed with him at all?

Is this something that the board of directors have the actual conversations about? Or is Goldman really the guy that really decides all the stuff since he is the majority shareholder, or it's just been talks about the shareholders perhaps maybe get it done?

Mr. Goldman is a Member of Board, he is the largest shareholder.

The decision is made by the whole group of shareholders, not just any one person. And again, we have discussions at the Board level as appropriate.

So if there is someone who has indicated interest then of course we will discuss it, and with an absolute open mind, by the way. I mean, the idea is to make these decisions in best interest of all the shareholders, not just one group or one person.

So, we act that way as appropriately.

I just wondered what's if things go right, what was the two contracts, what will be the revenue in the second half of '19 and in '20 and the year of '20 from those two contracts?

John, I'd like to answer that question for you, but I really can’t. It's part of our agreements with both of those companies.

We've been told that we're really not at liberty to discuss the price point in that at least now…

I didn't ask the price point, I just asked for the revenue that will be reported…

Right absolutely, and they clearly will. But we are not in a position today to put out a projection, which you are asking for revenue on these two over those time frames that you suggested.

I just don't know. It's not that I have it sitting here with them.

I'm not willing to share. We just don't know it.

Second question is can you give us any sense of what the, since like this is March quarter is over. What the rough revenue was in the March quarter given that we've been stuck in this $1.1 million, $1.2 million a quarter for heck of a long time?

This is Wayne. We have not provided any forward-looking statements on our financial results, and it wouldn't be appropriate for us to at this time.

We'll be coming out with our financials on the first quarter fairly soon.

First of all, I have a comment and then a question. Thank you for your presentation and your recent progress.

However, for several quarters, investors have been routinely told the cash flow breakeven was just a quarter away. These are net projections can negatively impact the degree of confidence for shareholders and in management.

You are the stewards of our hard earned money, the ones we entrust for a favorable return on our investments. It's time for shareholders to have the opportunity for face-to-face interactions with ImageWare's management and director.

This will allow shareholders to get a closer sense of who you are, enhancing the level of optimism and trust. Will you make a commitment that a notice will be made within 30 days to announce the date for an Annual Shareholder Meeting?

Thanks for your question, Dan. We'll certainly make the commitment, I don't know if I can do it or we can do it within 30 days.

But we certainly agree with your statement that it's an appropriate thing to do and so no problem committing to do.

Thanks Janie. As you look around our industry and where it fits in our world changes afoot.

And life for this business changes hardly ever immediate or swift, it's time consuming and often painful. And results when the pain seeks to alleviate has reached a boiling point can no longer be tolerated, forcing change in habits and behavior.

The mobile phones, colored televisions and personal computer, staples in today's everyday life. We're not anywhere near immediate hit, taking many years to be adopted by the mass consumer market.

So it is in the identity authentication space. For ImageWare, we are seeing that change in real time, folks who over the past several years were not ready, or interested in securing their identity biometrically, are now realizing finally that the multiple levels of pain of multi-billion dollar data breaches can no longer be tolerated.

The market is finally catching up to us. They're also realizing that for the collective billions paid in network protection it has not alleviated the problem.

Identity is the new security and as that reality takes hold, ImageWare and its investors will reach significant benefits. As always, we very much appreciate your continued support, as well as your taking time for today's call.

And we look forward to speaking with you on our next one. I wish everyone very good afternoon or good evening.