Raj Jain - Vice President-Investor Relations Jack S. Abuhoff - President and Chief Executive Officer ONeil Nalavadi - Senior Vice President and Chief Financial Officer.

Vincent A. Colicchio - Noble Financial Capital Markets Timothy Clarkson - Van Clemens & Co., Inc Charlie Pine - Van Clemens & Co. Inc..

Good day and welcome to the Innodata First Quarter 2015 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Raj Jain. Please go ahead..

Thank you, Joe. Good morning, everyone. Thank you for joining us today. Our speakers today are Jack Abuhoff, Chairman and CEO of Innodata; and O’Neil Nalavadi, our CFO. We’ll hear from O’Neil first, who will provide a detailed review our results for the first quarter and then Jack will follow with additional perspective about the business.

We’ll then take your questions. First, let me qualify the forward-looking statements that are made during the call.

These statements are based largely on our current expectations and are subject to a number of risks and uncertainties, including, without limitation, that contracts may be terminated by clients; project or committed volumes of work may not materialize; our Innodata Advanced Data Solutions segment, IADS, it’s a venture with minimal revenues that has incurred losses since inception and has recorded impairment charges for all of its fixed assets; we currently intend to continue to invest in IADS; the primary at-will nature of contracts with our Content Services clients and the ability of these clients to reduce, delay or cancel projects; continuing Content Services segment revenue concentration in a limited number of clients; continuing Content Services segment reliance on project-based work; inability to replace projects that are completed, canceled or reduced; depressed market conditions; changes in external market factors; the ability and willingness of our clients and prospective clients to execute business plans, which give rise to requirements for our services; difficulty in integrating and deriving synergies from acquisitions, joint venture and strategic investments; potential undiscovered liabilities of companies that we may acquire; changes in our business or growth strategy; the emergence of new or growing competitors; various other competitive and technological factors; and other risks and uncertainties indicated from time-to-time in our filings with the Securities and Exchange Commission.

We undertake no obligation to update forward-looking information, and actual results could differ materially. Thank you. I will now turn the call over to O’Neil..

Thank you, Raj. Good morning, everyone. Thank you for joining us today to review our financial results for the first quarter 2015. As in the past, I will review our performance on a sequential quarter-over-quarter basis. Total revenue in the first quarter was $13.8 million compared to $15.9 million in the previous quarter.

The $2.1 million decline was primarily a result of lower revenues of $2.4 million in Content Services business. Partially offset by $150,000 increase in IADS revenues and $200,000 increase in Media Intelligence revenues. Revenues from our top three clients was 42% of total revenues in both quarters.

On a segment basis Content Services reported $12.2 million in revenues this quarter, compared to $14.6 million in the previous quarter. This was an anticipated decrease which we had discussed in last quarter’s earnings call.

Approximately 50% of the decrease was attributable to lower eBook volumes from a key customer and the balance was due to lower volumes in other projects including project completions. IADS revenues increased to $400,000 this quarter compared to $250,000 in Q4.

Our first large life insurance client November 2014 fully scaled up this quarter to a steady state. Jack will talk later about the new starts and wins in the current quarter. Our Media Intelligence business reported $1.2 million in revenues this quarter, compared to $1 million in Q4.

This growth was driven by new customers acquired across all products namely MediaMiser flagship, media monitoring and analysis product and Bulldogs, journalist database and information products. MediaMiser added six net new customers this quarter and Bulldog added 65 customers.

We ended the quarter with 110 subscriber customers in MediaMiser compared to 104 at the end of Q4 with a retention rate exceeding 90%. I would like to clarify that we are restating last quarter’s customers total from 120 to 104.

Starting this quarter we are accounting each institutional relationship or independent division or subsidiary of an entity as a separate customer whereas historically MediaMiser has counted each subscription SOW or contract as a customer. We believe our new method is more conservative for reporting this key metric.

We will start reporting Bulldog customer count once the product migrations are completed to a new platform and we put processes in place to track renewals and new customer acquisitions. Let me now review our gross margins.

On a consolidated basis, gross margins in Q1 were $2.7 million or 19% of revenues compared to $4.3 million or 27% of revenues in Q4. This decline was primarily attributable to a revenue decline in Content Services.

On a segment basis, gross margin in our Content Services business was $2.8 million in Q1, compared to $2.8 million in the previous quarter. Our margin suffered because of lower revenues and the negative impact of operating leverage.

Our gross margins that also compressed in both the quarters due to project transition expenses of $200,000 in respect to the European projects we had won in the previous year.

We are experiencing the longer transition time and margin problems for these recurring revenue projects and account of client related issues, project complexities and euro depreciation. Moving over to other segments, in IADS cost of sales exceeded revenues by $700,000 this quarter compared to $900,000 in the previous quarter.

And in Media Intelligence business driven by higher revenues, the gross margins expanded to $550,000 or 46% of revenues this quarter compared to $400,000 or 40% of revenues in the previous quarter. Excluding acquisition related amortization expenses, gross margins in Media Intelligence were approximately 57% in Q1 and 52% in the previous quarter.

Our selling, general and administrative expenses decline to $4.1 million or 30% of revenues this quarter, compared to $4.5 million or 28% of revenues in the previous quarter. The lower spend was mainly due to seasonal factors and $200,000 one-time benefit from the reversal of management incentive accruals relating to the previous year.

On a segment basis, SG&A was lower in Content Services by $400,000 due to seasonal factors. SG&A expenses did not change materially in IADS segment whereas they were higher by $200,000 in Media Intelligence business. This increase was due to the integration of Bulldog Reporter business and continuing hires to drive growth.

We are making most of the new hires offshore which will eventually increase our revenue for employees as the business scales. Moving down to pretax earnings, we incurred a pretax loss of $1.4 million this quarter, compared to a pretax loss of $550,000 in the previous quarter.

Lower revenues resulted in $200,000 pretax loss in our Content Services business, compared to pretax earnings of $1 million in the previous quarter. In the IADS segment higher revenues help to lower pretax losses to $1 million from $1,350,000 million in the previous quarter.

Media Intelligence reported pretax losses of $200,000 in both quarters after taking into account $150,000 of acquisition-related amortization expenses, and $50,000 of spend to develop incremental client services capacity to serve future clients. Tax expense this quarter was $500,000 compared to a net tax benefit of $100,000 last quarter.

Our entire tax expense is an account of profits made by our overseas subsidiaries. After deducting tax expenses and minority interest net loss was $1.8 billion this quarter compared to $280,000 in the previous quarter. Let me now review our adjusted EBITDA and cash flows.

Lower revenues causes to incur an adjusted EBITDA loss of $500,000 in Q1, compared to adjusted EBITDA profits of $900,000 in the fourth quarter. Our adjusted EBITDA was the net result of $600,000 positive EBITDA in Content Services, offset by a $1 million loss in IADS and $50,000 loss in MediaMiser. I will now review our balance sheet.

We had cash and investments totaling $25.4 million at the end of Q1, compared to $24.2 million at the end of Q4. Of this approximately $2.4 million was held in the U.S. and the rest was held overseas by our international subsidiaries. We generated $1.2 million of cash this quarter, compared to $1.8 million cash used last quarter.

This cash was generated primarily from collections of our account receivable balances. As a result of collections our account receivables trended lower by $2.1 billion to approximately $8.3 million at the end of Q1, compared to $10.4 million at the end of Q4.

In terms of days sales outstanding, our AR balances averaged at 55 days this quarter, compared to 65 days in Q4. We incurred capital expenditures of $200,000 in Q1 and expect CapEx to be in the range of $300,000 to $400,000 in Q2. I will now turn to our foreign exchange hedging program.

At the end of the first quarter, we had $17.2 million in outstanding forward contracts to hedge our overseas exposures for both expenses and revenues. In Q1, the U.S. dollar more than a narrow range against the Philippine peso and the Indian rupee and it gained 8% against the euro.

Based on mark-to-market, this resulted in a $200,000 notional losses on our outstanding hedges. These losses are not recognized and any eventual losses or gains on these contracts will be recognized upon maturity. Let me now review our guidance for Q2. We expect revenues to be in the range of $13.8 million to $14.5 million.

These segment wise breakdown is Content Services in the range of $12.2 million to $12.7 million, IADS between $500,000 and $600,000 and Media Intelligence between $1.1 million and $1.2 million. We estimate our breakeven point excluding any acquisition related amortization expenses and CapEx in IADS at approximately $16 million of revenue per quarter.

On a segment basis there is no change from what we disclosed in the fourth quarter earnings call. Thank you. And now I’ll pass the call over to Jack..

Thank you, O’Neil. Good morning, everyone. Thank you for joining us today. O’Neil has just provided a detailed financial review of the quarter and our revenue outlook for Q2. I will now provide the quarter’s highlights for each of our reporting segments and along the way I will provide some context and where we are now and what we are working on.

I’ll start with the Synodex division of IADS. The first quarter of 2015 prove to be a milestone quarter for us as we secured contracts with five clients and made a strong progress with others.

In our last call, I mentioned that we were in contract negotiations with a leading life insurance company that was looking to license our proprietary technology for incorporation within their underwriting environment.

I am pleased to report that on Monday of this week John Hancock Insurance issued a press release announcing the strategic relationship with Synodex under which it would be licensing a customized version of Synodex's proprietary software which we will host and deploy.

In addition, John Hancock announced that it will be using our services to streamline its internal business processes. John Hancock is one of the largest and most highly regarded life insurers in the United States.

In its press release John Hancock expressed few that Synodex is cutting edge technology will enhance its ability to deliver timely and competitive underwriting offers to its customers, enable it to review medical records more quickly and at the same time enhance the quality of its review process and hope to keep pace with rapid advancements and technology.

Our deal with Hancock signed on March 20 as five-year term. We expected this contract will have a total revenue value of approximately $2.7 million over its five-year term. The services are expected to be in operation by mid-September 2015. We view the Hancock deal is particularly the strategic for couple of reasons.

First, Hancock is highly regarded among insurance companies and then it selected Synodex after expensive testing is a really big deal. We are already seeing the news resonating strongly in the industry. Secondly, selling a pure play technology solutions to insurance companies represents new offering for us.

We had originally designed our technology platform for the purpose of providing a technology enabled service to our customers, but what Hancock has demonstrated is that there is a second opportunity to provide a pure play technology solution to insurance companies that wish to perform the processing themselves.

While we have been working on the Hancock deal, we begun discussions with two other companies then they also be interested in similar SaaS based technology deals. We are pleased to have the Hancock announcement coincided with the first day of the life insurance industries biggest and most important annual conference.

The Annual Association of Home Office Underwriters Conference or AHOU is taking place this week in Washington DC. Synodex's key management team is there promoting Synodex 3.0 and we have a full dens card of meetings and clients centers. The Hancock news is adding sizzle to the stake.

Changing gears now, I also mentioned in our last call that we are in the final stages of putting in place an updated contract with a large reinsurance client under which we anticipated annual revenue run rate of approximately $10 million based on currently define scope which encompasses facultative review from size of its carrier clients.

In Q1 we indeed signed this updated contract and began ramp up with a first with these five carriers. Each of these five insurance carriers has to provide its consent to the reinsurer for us to handle the files that they provide.

While obtaining the consensus takes time and effort the silver lining as we get an opportunity to explore direct relationships with these companies, towards [indiscernible] and prevailed by the reinsurers strong referral.

One of these insurance carriers is an industry leading insurance company that recently concluded a due diligence visit to our production facility in India. The opportunity to work directly with this company represents a significant additional revenue opportunity for us independent of revenue from the reinsurer.

Similarly with another carrier to which we were introduced by the reinsurer this won a top side mutual insurer we have been collaborating on a two phase proof-of-concept. In the first phase concluded in February we demonstrated the efficiency value of using our product within the insurer environment.

We significantly exceeded the efficiency multiple they and we were hoping to achieve. In phase two of the proof-of-concept we are demonstrating how our data can be used in conjunction with the company’s underwriting criteria. We’ve got another few weeks before this phase is completed.

But so far the insurer has been very pleased with what we have accomplished. Working for this insurer directly would similarly represent an additional revenue opportunity for us independent of the reinsurance deal.

Well in disappointment in the quarter with - I mentioned in our last call is being a possible first quarter close ended up getting pushed off to next year.

The company leaving domestic and international insurer and financial advisor as a strong strategic emphasis on big data and we will continue our dialog with them as we sit our sites on a possible early 2016 deployment.

I also mentioned in our last call that were two other smaller companies would indicated a desire to start work with us by the end of March. On that front, I’ve got good news to report we close both these contracts.

One is within insurance provider to the education market and the other is a leading property and casualty company with a fast growing life position. This latter deal has a 90-day proof-of-concept where we built in. The annual revenue run rate for these two contracts should be approximately $350,000 per year.

In addition to these we have also signed a deal with a newly formed distribution company specializing in the high risk market, we expected this contract will start early in Q4 after the company completes some system work and remove some other dependencies.

In Q2 we will also be running pilots with the top tier insurer and an industry leading mutual insurer. We expect the other small insurers to sign contracts in the second quarter also. These contracts like the one I refer to earlier would not require a pilots, but would feature built-in 90 day proof-of-concept periods.

We clearly see momentum in our pipeline as were gets out about our solution and the value it’s provided to clients. Just this week my guys at the AHOU conference began exploratory talks with two of the largest U.S. insurers. Synodex revenue in the quarter was $330,000 up from $210,000 last quarter.

Taking into account only book to business that we anticipate starting near-term and putting aside pipeline for the moment. We expect revenue to increase to $500,000 to $600,000 in the second quarter with the further increase in the third quarter.

At this level our Synodex related losses should be approximately $700,000 for the second quarter and should trend lower in the third quarter. Although over 50% targeted contribution margins simple math suggests that we would require another $1.5 million of quarterly revenue to achieve breakeven excluding capital expenditures.

This number maybe lower as our productivity improves, but could also rise based on advanced tiring and training we may do to keep pace with our pipeline progress.

On the docGenix product side we received three new customer increase in the quarter and we kicked off another program in our large existing charter customer it can drive significant recurring revenue. We also expect to begin marketing programs related to our docGenix services next month.

Our quarterly loss in docGenix, is now approximately $125,000 successes in using our programs with lessons and eventually eliminate this loss. I will now turn to our Content Services segment. In our last call I mentioned that we were exploring ways of teaming with our clients to pursue market opportunities.

In furtherance of this strategy we’ve embarked upon a strategic relationship with Pearson a leading education company that provides instructional curriculum, services, assessments and technology for the Pre-K, higher education and professional learning markets, under this strategic relationship we will be working with Pearson’slearning solutions professional services division to jointly market our combined capabilities to prominent trade and professional associations to seek ways of efficiently monetizing their best repository of content.

This is how envision the partnership working Pearson will be bringing to the table truly world class content creation capabilities which will deploy to transform associations content into trading materials. Test and certifications, books, guides, directories, resources kits, newsletters and reference materials.

Innodata will be bringing to the table two things. First, content digitization and transformation, creating smart content that can be used simultaneously across multiple products and multiple devices.

Second, Innodata will be bringing to the table a proprietary technology delivery platform that we are calling Xenon, it’s a SaaS based hosted solution for discriminating content. We have several potential customers to whom we’re jointly marketing.

For example, we are talking to a leading North American Association that is looking for ways to add value to its members through content, decrease its current content production costs and increase its non-dues revenue by creating and selling new content products.

The associations content creation and delivery process is currently completely manual and typical and what we see at most associations, this is expensive and time consuming.

The association reached out to Pearson and Innodata to explore the possibility of introducing a more efficient digital workflow process for creating, managing and updating print and digital content.

In addition, while this association has its own ecommerce store for selling improved products, we won’t just try selling any books as eBooks through Apple’s iBooks and potentially through a granted application and eReader that we would provide.

To our partnership, Innodata will be proposing to provide the association with a digital offering and content management platform, conservation services for both xml content and Apple eBooks and a wiseness to use our new Xenon platform for branded eBook distribution. Pearson will be providing conceptual product design and related services.

Further wins of our new partnership with Pearson, Pearson invited us to present at its Annual Science Conference taking place this week in Orlando, Florida. Actually, I am speaking to you now from the science conference where I will be making a presentation to Pearson executives and customers regarding strategies for managing smart content.

In terms of new content bookings, we closed several new contracts in the quarter including a contract worth $375,000 with a leading educational profit share for whom we will provide conversion services. That said content services bookings are lighter than it should be and we are working on several new initiatives designed to change that.

Looking towards the second quarter, we are in the final stages of negotiating a significant contract with the new clients for new digital product build.

We estimate the value of this new contract to be approximately $4.8 million, we expect to predict to begin providing services on this new contract sometime this summer with the performance period of 24 months.

As you may recall, we signed letters of intent announced last July, with two divisions, of a large European information company which selected us to provide end-to-end content creation and management services. We started work on these engagements late in the third quarter of 2014 and we continued to ramp up in the first quarter.

This month we will be celebrating quest in the milestone and having produced 1 million books for the Apple iBook store. We are continuing to expand the types of work we do at Apple and in the first quarter Apple launched a new iTune supplier page and which we are prominently featured as a recommended provider of various eBook related services.

I will now turn to our Media Intelligence Solutions business. The MediaMiser team concluded another quarter growth with total revenues of $1.2 million up 20% from the previous quarter and slightly ahead of our internal budgets. In Q1, MediaMiser booked new contracts valued at approximately $275,000 per year and added six net new customers.

In addition, we saw strong renewals including a three-year renewal with one of the largest growth retains in Canada which we achieved through the competitive RFP process. Also in the first quarter MediaMiser continued to bring on integrated staff from the Philippines and India both client services team and its technology team.

We are investing in these teams to support redundancy as well as scalability. As the business grows we should see improved margins as a result of these investments. In March, we increased our investment in MediaMiser lead generation and marketing.

As a result of these increased investments we have already seen an uptick in the number of reads we are generating and the number of product demos that we are scheduling for new client prospects.

In the month of March alone we scheduled product demos for 35 new client prospects which compares quite favorably to the 14 per months that we had averaged over the 12 prior months.

In Bulldog Reporter the PR industry Media Intelligence company, MediaMiser acquired in December we relaunched its key products including the Daily Dog newsletter and the Bulldog Reporter Awards one of the PR industries most well regarded awards programs. We now have five active awards programs.

Bulldog Reporter is now in the process of receiving submissions for its convenient corporate social responsibilities and media relations awards.

In the first quarter we focused on reaching out to existing customers of Bulldog Reporter and booked $120,000 of annual contract value for Bulldog Reporter’s Media Pro database product and it’s Inside Health Media product.

In the next few quarters we will be focusing on migrating these products to a new platform and will begin targeted marketing campaigns So I’ll now open the line for questions, after which I’ll wrap up with some final comments. Operator, we’re ready for questions..

Thank you. [Operator Instructions] We will take our first question from Vincent Colicchio with Noble Financial..

Yes, Good morning, Jack. Question on Content Services side, it looks like you got some improvement there you expect to grow sequentially and added some new contracts. You mentioned in the press release that you look to add end-to-end outsourcing and technology platforms to expand your recurring revenue.

[indiscernible] new contracts in those areas and in general when should we see meaningful progress in those two areas and another question for Content Services in general can we expect to see sequential growth continue beyond this quarter/.

Hi, Vince good morning thanks for the question. Let me start with the first one we’ve been working for sometime on our E2E offering our end-to-end outsourcing as well as designing or conceptualizing designing new content platforms that we would be selling to licensing model.

The first clear win that we had in E2E outsourcing was with the two LOIs that we have spoken about now in the last two calls with the large European publisher.

So that large engagement is in fact an example of E2E or end-to-end content production outsourcing we are looking to add to that, we are looking to continue to market that capability and build upon that.

In terms of subscription products I mentioned in my prepared remarks today that we’re working within the context of our Pearson partnership bringing a new content distribution and eReader platform to associations and enterprises, if something that call Xenon we’ve been working on developing that kind of under the radar behind the scenes over the last several quarters and we are very pleased with what that looks like, it’s getting a good reception among the client prospects that we are showing it to.

So we look forward to boarding over the next few quarters and lot of successes there as well.

In terms of your follow-up question you will receive sequential revenue growth in Content Services, well I certainly hope so I think as I said the booking levels that would be ahead of last few quarters I am not satisfied with, we need to do better than that and I know that we can whether it would sequential growth I think that that will always depend upon the mix of opportunities that we are bringing in.

We go after as you know, both recurring revenue engagements as well as project engagements and we will take our large projects when we find them because of the enhancement balance sheet then they diverse strength and capabilities.

When we have large projects sequential, predictable, foreseeable always that growth is very difficult to achieve, but again that’s where we are investing in some new things within Content Services and that’s why we are investing in the things that we are doing and IADS and MediaMiser where we get that kind of visible recurring revenue..

Thanks for that and then at Synodex you had mentioned that once fully ramp the full clients will represent $2.8 million in revenue Jack you already mentioned this, but when do you anticipate that happening?.

So that’s going to take will be working that over the next several months, one of the clients I mentioned was at fourth quarter start, the John Hancock we are talking about bringing that on line at mid-September the work with the reinsure, we are bringing on five clients that were starting there and that should take place over the next couple of months and of course we already have our first large engagement well underway.

So good news there is you ended up and that’s over $5 million of ACV and represents over close to $12 million of contract values.

So what we are especially pleased about is that we are getting the traction that we always been confidence, we would be able to get the Hancock announcement especially was received very well this week at AHOU and we are bringing value to the clients that we are serving and we are very excited about that..

Yes, congratulations on the Hancock announcement. I’ll get back into the queue. Thanks, Jack..

Thanks Vince..

[Operator Instructions] And we’ll go ahead and take our next question from Tim Clarkson with Van Clemens Capital..

Okay, thanks.

I got a couple of questions, the first one kind of simple one to ONeil - made any progress in terms of getting a banker for Innodata or are we getting close to that?.

Hi, Tim good morning. Tim, we are in discussion with both our existing bankers and in new bankers approaching us and we hope to put something in place within the next couple of quarters..

Okay, is that a big deal would that change your operations much or is that just more something that’s nice to have?.

We have obviously very strong balance sheet and we feel comfortable about funding our existing business and the trajectory that it is in, obviously anything that we negotiate we want to be careful in terms of the covenants that we can comfortably live with and we don’t want to do something that is not good for the business..

All right, make sure you negotiate a buyback under [indiscernible]..

We will indeed do our best, active. Thank you..

Yes, and then a question to Jack, when you came in here with your original scenario about ramping this business from I think we’re at $14 million, $15 million up to about $18 million by fourth quarter. I think you’re projecting that IADS would be at about a $4 million annual phase.

I think that was the number that I remember, so it sounds like based on the progress we made that we’re on pace to do that..

I think, right now we’re very busy with prospects and pipeline and we are closing deals and we feel good about where we are - I think the critical thing for us is going to be to stay very focused on bringing those deals in, of course stay focused on the operations side to ensure that as we scale we continue provide the great value that is gaining us a great reputation in that industry right now and kind of keep the pedal to the metal on both trends..

One last question you mentioned a $4.8 million contract in your regular business. What’s the status of that when will that start to kick in..

We are looking to start assuming that it get signed, which we’re hoping could be over the next week or two we would probably get started producing sometime this summer..

Okay that would be relatively short-term type of stuff would that ramp up fairly quickly or is that be a slow ramp?.

No, I think that would ramp fairly quickly and we are looking at it two year 23 month, 24 month performance period on that..

Okay. All right good I am done, thanks..

Thanks Tim..

[Operator Instructions] we will move to our next question come Charlie Pine with Van Clemens..

Hi, good morning..

Good morning, Charlie..

I have three questions first of all just to circle back on one of the earlier questioners queries.

Do you answer, did I hear you say that in Synodex now that you got current annual contract value of what you signed it for roughly $5 million a year did I hear that right?.

Yes, that’s correct..

Okay. The other thing I wanted to ask about reflecting on this new partnership with Pearson can you stake that out a little bit as far as what it might potentially mean as far as dollars in your Content Services division and when you will start to recognize any revenue with Pearson..

Right now Charlie you know we are in the marketing phase where - late stage with one particular client there and medium stage within another several.

I think we’re successful there will be some element of project work, on the conversion side but then there is also the opportunity to deploy a hosted licenses services platform there to drive recurring revenue.

In terms of putting it dollar number on the market I think that would be mistake at this point I think what we need to do is get a couple of deals closed and see what kind of acceleration we can get off that, but I think clearly partnering with a company like Pearson is a great thing to do.

We get distribution value from that, they are bringing us into relationships they have got, so we’ll stay close to it and keep informed on how that progresses..

Well, let’s just hypothesize for a moment, a typical deal that you would get out of this relationship I mean what would you approximately anticipate with one of these customers through Pearson, what would be a typical deal size for something like this..

I don’t know what typical is yet, because I haven’t even won single deal yet. So it’s early to put a stake in that, the one that we are actively proposing on that I could tell you is about $300,000 and that’s there is an ACV component, excuse me recurring component and a non-recurring component within that..

All right. And then finally I like to have you - can you expand a little bit more on exactly what –lot of stuff is kind of going rather quickly can you expand this a little bit and exactly what this - what you are calling Xenon and what...

Okay, so Xenon is a, you could figure that as in - it’s a content distribution platform, it’s like an eBook store, where someone that book content and other kinds of digital content can distribute that content both in a subscription model and or in a paying model, the ecommerce model to its constituencies, to its customer sources, subscribers or members, and it’s an app.

And then there is also an eReader app that goes along with it enabling people to consume that content in a lot of advanced features built-in in terms of social media, sharing things like that. So that’s the easiest way to think about it.

That said it also has other features and functionality that enable social platforms to link in very intimately with the content and create a very rich experience in terms of consuming content..

How do you make money of it?.

We would be licensing the platform to associations or enterprises it would be like the White Label those as their portals as their ecommerce sites and selling their content..

And what do you anticipate that we saw in licenses for?.

I think we are kind of playing with marbles right now, it’s little early to say that and I am not sure from a competitive perspective that we’d be putting it out there like this anyway, but like I answered I think it was Tim’s last question, no I’m sorry that was your question, the first proposal that we are going after would be combined in terms of licensing fees and services fees probably here $200,000..

Okay, all right thanks. I am done..

Okay, thank you..

[Operator Instructions] And it seems that we all the time we have for today’s question-and-answer session. I’d like to turn the call back over to Jack Abuhoff for any closing or additional remarks..

Thanks, operator. So I guess really we couldn’t be more pleased to Monday’s announcement by John Hancock.

It’s clearly grade endorsement from the great company, we are enjoying the buzz that it’s generating for us at this week’s AHOU industry conference and it provides new products say SaaS based technology licensing opportunity that we having to originally thought.

On top of that we closed as I mentioned before Synodex contract this quarter and beyond that we are not pursued of three opportunities that we think should be Q2 closures and we are also working through sales process with many others including two large companies with significant opportunity value.

One of these companies send it auditors to our offshore production site last month. It’s good to be here in Orlando this week Pearson, we are excited about the prospect of partnering with Pearson combining our strengths to help associations and enterprises monetize their content assets and giving the benefits to scale through Pearson distribution.

And then last but not least we are excited to see the traction that we are getting from our new marketing efforts with MediaMiser and Bulldog Reporter both being our digital media intelligence assets. So get to wrap things up thanks everyone for joining us on today’s call and for your continued support and interest..

Today’s conference is available for replay by dialing 719-457-0820 or 888-203-1112 and pass code 1257527, again those numbers are 719-457-0820 or 888-203-1112 referring pass code 1257527. That concludes today’s conference. You may now disconnect..