Jason Hart - Chief Executive Officer Brian Nelson - Chief Financial Officer.

Bryan Prohm - Cowen & Company.

Welcome to the Q1 2014 Identive Earnings Conference Call. My name is Eric, and I will be your operator for today’s call. With me on the call today are Jason Hart, CEO of Identive; and Brian Nelson, CFO. In a moment we will hear remarks from both of them and then we will take questions from sell-side analysts and registered investors.

Before we begin, please note that during this call, we will also be making reference to non-GAAP results or projections, including non-GAAP gross margin, operating expenses and adjusted EBITDA.

A complete reconciliation between each of these non-GAAP measures and the most directly comparable GAAP financial measure is included in today’s press release, which is available on the website at www.identiv.com. In addition, during our call today, we will be making forward-looking statements.

Any statement that refers to expectations, projections or other characterizations of future events, including financial projections and future market conditions is a forward-looking statement. Actual results may differ materially from those expressed in these forward-looking statements.

For more information, please refer to the risk factors discussed in the documents file from time-to-time with the SEC, including the annual report on Form 10-K for fiscal year 2013 and our subsequent quarterly reports on Form 10-Q. Identive assumes no obligation to update these forward-looking statements, which speak as of today.

At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note, this conference is being recorded. Now it is my pleasure to turn the call over to Jason Hart. Mr. Hart, you may begin..

Thanks, Eric, and good afternoon, everyone. Simplification, focus, growth, these are being the three themes over the past quarter or two quarters that we’ll use to drive the company. And today I would like to share with you an update on where we are in terms of progress against those three themes.

We will provide some analysis on our Q1 results and then provide some more color on our overall annual guidance. I am joined today here in Silicon Valley, California by our senior members of the management team and they will be available for to assist any of the questions we have at the end.

Simplification, it’s been an extremely busy period for the management team and the company as we continued to execute on the 12-point plan that I outlined when we had our Q4 earnings call.

We have been rationalizing various sub-companies, the group of companies and transforming the 37 businesses into a single Identive, a single technology, security company, delivering on a new vision that I will cover in a moment.

We are entering the final phases of the large components of the simplification project, but I do expect that the full integration will take the reminder of 2014, as we further reduce our G&A and other -- and we consolidate the remaining teams, processes and systems.

Brian will cover a little bit of that and I believe we have a few questions at the end from interested investors on what that actually means. So we will provide some more commentary on it.

Focus and our Q1 general commentary, I am pleased to report that the initial investments and focus that we made in Q4 are beginning to yield some early results in Q1. We have seen a lower cost base as we went into Q1 on a seasonal basis. We have also seen an improving revenue line year-over-year on a seasonal basis.

Q1 traditionally for the company has been pretty slow. We saw an 8% growth to $17.2 million, Brian will cover that also in some deeper a bit later on. Overall, it’s early, but I am very pleased that we are seeing some of the initial investments and some of the hard decisions that were made in Q4 are beginning to yield these early results.

Our credentials products performed very well in Q1 as did our Identiv product lines, but we did see some continued softness in the premises line and I will cover that in just a moment. Brian is going to provide some additional details on the actual financials program for these various segments.

We -- obviously in Q1 we address the number one issue that was raised with me post our Q4 earnings call and that was liquidity. Unfortunately, at the time, I couldn’t disclose many of you that we were deep in discussions with a phenomenal banking partner and Q1 saw this major achievement and it really should not be understated.

It was a significant achievement to secure a funding partner with the bank, the quality of Opus Bank. This has enabled the company to secure a $20 million commercial banking facility. The significance, as I said, just can't be understated. It is enabled the company to retire an extremely expensive and cumbersome debt facility that we secured in 2012.

By comparison, the new facility and the relationship with Opus Bank has enabled the company to reduce our debt service needs going forward, move to commercial banking terms and when we provide a best of the liquidity, as the company's revenues are increasing and we see a need for organic working capital.

This facility coupled with our expense reduction activities is helping provide a stable platform for us to turn our attentions to organic growth activities that I keep alluding to and we will cover that in just a moment. Technology, the conducting many, many face to face interviews with most of our strategic customers through Q4 and into Q1.

We determined that in addition to the overall softness in the premises business, the company was required to advance its premises product line with emerging industry and government standards, which frankly, have been required by many of our largest customers for some time.

In response to this and in response to the softness that we have seen in Q4, we launched a new class of premises products in late Q1 that exceed these compliance requirements. We will continue to release new products that meet the government standards over the next two quarters.

We believe -- I believe that this is a turnaround point for the previous softness we’ve seen in our premises business. But I caution that it will take a number of quarters to fully recover and then grow. I do see this, this will be a growth area for the business as we move into 2015. NASDAQ.

I have had many questions through the course of the quarter about NASDAQ compliance in the upcoming deadline for the $1 bid. As many of you are aware, we’d be working diligently to address the operations of the business.

But in addition, we’d be working to ensure that we have full compliance with our NASDAQ listing requirement, specifically the $1 bid rule. We’ve asked our shareholders for approval to modify the bylaws in the upcoming annual general election or the general meeting.

This will enable a reverse with the curve, which would enable the company to maintain our NASDAQ listing. We believe that NASDAQ listing and being part of the global markets is an important facility for the company and for shareholders.

And I encourage every shareholder, either on this call or otherwise to have your say over the course of the next week. It’s important that we get every vote into -- and ideally to approve the recommendations made by management and the board, important to have your say. Growth. Partnerships have been the key to grow throughout my career.

And I’m extremely pleased to announce and provide some more color on the investments that we made in Q4 to focus the sales organization to improve, not just the forward pipeline and visibility for our direct deals but also to drive additional OEM agreements. We created a new group within the company to focus specifically on this activity.

And that’s yielded the signing of two very strategic partnerships to dramatically give us market leverage on a global basis. One, with the largest security distributor in the United States for the supply of their credential product lines and the other, Verizon business for the global supply of their products under Verizon brand.

We invested substantially in Q1 to establish the infrastructure required for the Verizon business activity and have begun to see some early results of this investment in terms of new -- a new tangible order in early Q2.

We expected our Verizon business relationship has the potential for a major role in creating value for the business over the coming years and will continue to devote significant resources as we explore the global markets together. Again I cannot understate the significance of these type of relationships as we move forward.

I believe this is where growth will come from for the company. So as you can see, it’s been an extremely busy period with a substantial amount of work happening behind the scenes. I would like to hand over to Brian Nelson, our CFO, for further commentary on the financial results for Q1.

Brian?.

Thank you, Jason. As we discussed during our last call, we made the decision during the fourth quarter of 2013 to divest certain businesses that were non-core to our trust solution strategy. Certain of these businesses were divested in that quarter with the additional divesture of RockWest Technology a.k.a. Multicard U.S.

occurring in the first quarter of 2014. As a consequence, all of these businesses were accounted for as discontinued operations. And as such, results we are reporting today for the quarter-ended March 31, 2014 as well as our previous periods reflect our continuing operations. Now looking to our financial results.

Prior to beginning, a reminder that Q1 of each fiscal year is traditionally the softest quarter of the year for Identive. Revenues in the first quarter of 2014 were $17.2 million, an increase of 8% as compared with $16 million in the first quarter of 2013.

Sequentially revenue in the first quarter decreased by 14% from Q4 ‘13, however, it again reflects the seasonality of the Q1 business from Q4. Now some specific segment performance commentary.

Approximately 44% of our first quarter 2014 revenue or $7.5 million was derived from sales in our credential segment growing 36% as compared to revenue of $5.5 million in the first quarter of 2013.

The growth was primarily a result of increased demand protection inlay as to support electronic gaming, transit ticketing and other internet of things applications. Again the seasonality of the business resulted in sequential decrease of 16% from the $8.9 million achieved in the fourth quarter of 2013.

Revenue from our identity products, which include smart card readers, reader modules, and tokens in our cloud-based credential provisioning and management services was $5.0 million in the first quarter of 2014, growing 10% over the first quarter of 2013 revenues of $4.5 million.

Sequentially our identity product revenue decreased 11% from $5.7 million in the fourth quarter of 2013. The growth year-over-year reflects the continued demand to support information security and logical access programs globally.

Revenue in our other segment, which represents sales of our digital media and CHIPDRIVE products increased 29% from -- to $1.2 million from $0.9 million in the comparable quarter of 2013.

The combined year-over-year revenue growth experienced in our credential, identity and other segments has been partially offset by a 30% year-over-year decline in the sales of our premises products, $3.5 million in the first quarter of 2014 from $5 million in the first quarter of 2013.

Premises revenue also decreased sequentially by 19% from the $4.3 million achieved in the fourth quarter of 2013, again reflecting a seasonality in the business from Q4 to Q1. The results are primarily a result of weak demand from our U.S. government customers for our physical access control solutions.

The company continues to invest in its sales and marketing efforts in the U.S. federal government sector and has also recently reopened its Washington DC office to work closely with a number of our federal agencies. Now to our gross profit margin.

Our non-GAAP gross profit margin was 41% in the first quarter of 2014 as compared to 44% in the year ago quarter and with 46% in fourth quarter of 2013.

The decrease in the sales of our high margin premises products, the higher concentration of the sales of our credential products and lower manufacturing overhead utilization, all were contributing factors in the change in our margin in the period.

We believe our gross margin will improve going forward based on, one, our consolidation of manufacturing facilities; two, our focus on selling higher value and higher security trust solutions; and three, our renewed focus on our higher margin premises business, including the software component of many of our solutions.

With the consolidation of our manufacturing facilities, which we started in Q1, we anticipate lower overall production related overhead, which will result in an improved credential segment margins.

Turning now to our operating expenses, non-GAAP operating expenses in the first quarter were $9.9 million -- apologies, compared with $8.7 million in the prior quarter and $9.2 million in the comparable quarter of 2013.

R&D expenses were $1.4 million in the quarter or 8% of revenue, as compared to $1.6 million in the same quarter of 2013, a 12%, year-over-year decrease. This is primarily a result of timing of development projects as well as our headcount utilization.

R&D expenses were $1 million in the prior quarter, which reflected a one-time development tax credit of $400,000 in the period. We do expect R&D spending to remain relatively unchanged as a percentage of revenue, as we continue to invest in development projects to deliver trusted solutions to our customers globally.

Our sales and marketing expenses were $4.7 million in the quarter or 27% of revenues. This is an increase of $0.2 million sequentially and $0.5 million over the comparable quarter in 2013. This level of spending reflects our continued investment in sales and marketing program management and personnel.

We expect to continue our focus on selling and marketing, as we invest in a more robust sales and global marketing organization. Our G&A expenses were $2.9 million in the first quarter or 17% of revenues, as compared to $3.4 million, or 21% of revenues in the comparable quarter in 2013, an approximate 15% decrease year-over-year.

G&A also decreased sequentially by $300,000 or 9%. These decreases are primarily due to our cost reduction measures that we enacted in Q4 ‘13 and Q1 ’14. We expect to see G&A continue to decrease as a percentage of revenue, as a result of the actions we've previously initiated and our continued focus on cost reduction measures.

Our non-GAAP operating expenses in Q1 ‘14 exclude charges for restructuring in addition to several other items normally excluded from these results. I will touch on restructuring in a few moments. Based on our activities, we recorded negative adjusted EBITDA of $2 million in the first quarter of 2014.

This is compared with negative adjusted EBITDA of $2.1 million in the first quarter of 2013 and adjusted EBITDA of $0.4 million in the fourth quarter of 2013.

Touching on other items on the income statement, interest expense of $2.1 million in the quarter was higher than both the comparable and sequential quarter, primarily due to the additional $1.6 million and non-cash interest charges associated with payoff of the Hercules debt facility.

Depreciation and amortization remain fairly consistent with Q4 ’13, and down 10% from the comparable quarter in 2013.

The restructuring charges of $437,000 in the quarter are primarily related to severance for terminated employees in the quarter, as we continued to focus on consolidating corporate accounting and marketing functions into the U.S., and reducing the company's overall based cost structure.

As I mentioned earlier, we also began centralizing our production and manufacturing by initiating the process of closing our production facility in Sauerlach, Germany. We expect that this will be completed by the end of the second quarter and again have a positive impact on our operating results in the second half of the fiscal year.

We are continuing to evaluate our worldwide headcount and our related infrastructure and anticipate we will take further actions to streamline our operations and reduce our operating expenses further by the end of the second quarter.

Now turning to the balance sheet, our reported cash and cash equivalents were $12 million at March 31, 2014, as compared to $5.1 million at December 31, an increase of approximately $7 million. As Jason mentioned, we closed the facility with Opus Bank and this facility provided funding of $20 million, both through a credit line and a term loan.

$6 million were used in proceeds to payoff with an existing debt with Hercules Technology Capital. In addition, in the quarter, we received proceeds of approximately $2.6 million through the issuance of stock under our purchase agreement with Lincoln Park Capital.

Some use of cash in the quarter included the pay down of accrued compensation and other expenses totaling $1.4 million, $1.0 million for the service of our financial and related party liabilities and associated interest and capital investment of a $0.25 million.

On a working capital, which for us is defined as accounts receivable, plus our inventory less our accounts payable, was $12.1 million at March 31st as compared to $13 million at December 31st, a decrease of $0.9 million, an increase in inventory of $1.2 million was offset by a $0.3 million decrease in accounts receivable and a $1.8 million increase in accounts payable.

Our increase in inventory and payables are largely due to the period end build-up of stock to meet the lead times for customer order scheduled for delivery in the second quarter.

With respect to our receivables, our day sales outstanding increased to 67 days from 59 days in Q4, as we experienced significantly higher revenues in the last month of the first quarter. We expect our collection activity to bring the DSO level back to low 60 days into the second quarter.

As for inventories, $10.3 million at March 31st versus $9.1 million at December 31st, our turnover was approximately $3 million for the quarter, a slight decrease from Q4 2013. As I discussed in the working capital measurement, the company has build-up stock to meet the lead times for the customer order scheduled in Q2.

Some of the other noteworthy line items in the balance sheet, I mentioned accounts payable in my discussion of working capital. It increased to $11.2 million from $9.4 million, again as the company has build-up inventory stock at the end of the quarter.

Accrued compensation decreased from $3.4 to $3 million at the end of the quarter, primarily reflecting the pay down of liabilities associated with the former CFO. Other accrued expenses and liabilities decreased to $4.7 million at March 31st from $5.3 million at December 31, 2013.

This net change reflects payments for restructuring, professional fees and other accrued expenses associated with divested entities. On our liabilities to related parties, they decrease from $6.7 million to $6.6 million reflecting our quarterly payment partially offset by an accretion of interest.

Our short and long-term financial liabilities increased by $7.5 million to $13.5 million from $6 million at December which reflects the closing and funding of the new credit facility with Opus Bank and the payoff of the Hercules debt. The Opus facility payments are interest-only for the initial 12-month period. That is the end of my comments.

Operator, please begin the Q&A -- excuse me I will turn it back over to Jason..

Thanks, Brian. First, I would like to pass on my kudos to Brian and the team for all they have been diligently running the operations of the business and substantially reducing the G&A that has always plagued this company.

They have also been managing the peripheral activities of divesting many of the discontinued operations and streamlining our overall efficiency of the business. And as you heard from some of Brian’s commentary, we do foresee the ability to continue to improve our margins, particularly in areas such as our everyday item product lines.

So I am extremely pleased with the results as we continue to work on them. We are not internally satisfied and the rest of 2014 will continue to simplify, as we implement the systems processes for being able to manage the business more efficiently, but again I will pass on my kudos publicly to you and the team.

I think at this stage really what I would like to do is summarize the key things and then we will open the call up to question and answers. We do reaffirm our guidance and the previously guide in Q4 for the year, the full year at $80 million to $90 million and adjusted EBITDA positivity.

With the growth that we saw in the revenue for Q1 and our foresight now into where we think Q2 will be, we are still confident that that number will be met. We do continue to see simplification throughout 2014 and the idea behind that is to have a single business that can be operated and managed from a single point of command control.

We do feel that the simplification will yield additional benefits to the business in terms of creating value through improved margins, creating value through stronger relationships. We are focusing our business on delivering our cross-solutions under our new Trust Your World vision.

For more information on the Trust Your World vision I invite you all to our website and obviously contact our sales organization. Lastly, growth; growth for me in this business will come from continuing to leverage global OEM, global strategic and our global Fortune 1000 customer base.

I continue to be extremely confident that as we move over the next 24 to 36 months that this business will see significant growth. We’ve begun to see early signs, but I stress again that early it’s only been two quarters.

So the results internally begin to give us a lot more encouragement that the strategy and the investments we are making are correct. So at this time, I would invite any questions.

Operator?.

(Operator Instructions) And our first question comes from Bryan Prohm. Please go ahead..

Hi, good afternoon, Jason and Brian. Thanks for taking my questions..

No problems Bryan. Good to hear from you again..

So okay with liquidity situation securing and congratulations on that. That seems right into the ongoing integration plan which I think you stated will run through the end of the 2014.

So on that bit more simplification here to go, though I really believe it is hard consolidating what did you say 37 businesses into one is heck of lot of ground to cover. How much further then can you reduce expenses this quarter? I know that’s the objective.

And then again through year end, given your comments on R&D and investments in increased sales and marketing, that’s going to tick up as you invest in the business, especially into the higher growth areas of the business.

And I realized G&A is down meaningfully year-over-year, but how much more costing you really take out there and over what timeframe, what’s the target? Thanks..

Really good question Bryan, thanks for it. I will offer a little bit and then I will pass over to Bryan. In terms of where we are at, we are at the later stages of the big chunks of the simplification plan. We’ve divested as you’ve seen many of the non-core assets. We’ve divested almost all of the discontinued operations.

We still have a couple left that we are working on, but they are minor by comparison to the substantial debt that we cleaned up in Q4. So what we did in Q4 is we then focused on the organizational structure and as you know we board in some senior managers from external organizations. We did a reset of the corporate executive structure.

We began to collapse the internal businesses and really align the structure around sales, marketing product management so forth. So what that differ us is that allowed us to pull out a bunch of costs where they were duplicated.

As we look to the remainder of the year, the cost changes will come we believe from margin improvement by simplification of our factories as Brian mentioned. We previously announced our plans to do some consolidation there. Our internal modeling suggests that continues to be exactly the right decision.

We’ve also began to create substantial market leverage with our partners and that showed up at the higher end of our margin revenue with the high margin. So we will continue to invest in that. I think probably the big steps. We do have a number of internal systems that we move to.

I saw some of those costs being absorbed in Q1 as operating costs such as moving to global sales, CRM, retooling and retraining our sales people.

So we’ve covered a lot of what we think we need for the remainder of the year, but I do stress that simplification now is really going to fall on Brian with a lot of the internal legal entities that are collapsing underneath all being shutdown the accounting activities, the previously announced relocations of corporate headquarters from Germany to the U.S., addressing of a number of management and order identified issues, all of these things now Brian has got some extreme focus on.

And I will hand it.

Do you have any additional comments you want for Brian?.

I think you gave Bryan the full compliment, but Bryan thanks for your question. While I am not in a position today to quote you a percentage that we are targeting this quarter or for the remainder of the year nor a dollar amount.

Just a reiteration that we’re keenly focused on the consolidation of activities on a global basis and outsourcing were applicable so that we have what I’d call a variable level. As I mentioned in my earlier commentary, continuing to evaluate the worldwide headcount, all are related infrastructure.

Looking at the facilities we hold worldwide to see redundancy, space savings, et cetera. All of these actions will help us streamline and reduce our operating expense base further..

We’ve gone from 460 people approximately 325 thereabout. And as Brian said, with the consolidation activities, we do expect that there will be some changes there, but there are also add backs. As you said, we can't continue to cut, cut, cut and not have growth.

We -- Brian and I kind of [Ying Yang] (ph) he is the perfect CFO for being able to get the cost out of the business and be able to restructure. And my role predominately has been that to establish the partnerships and get the growth and it’s worked very well for the last couple of quarters..

Okay. But would say the German headquarters moving or rather for instance consolidating in the valley, there is still something taken us to move on there. One follow-up question rather related question on the P&L, sorry if I had missed it.

Is there a one timer in this quarter’s interest expense line that number was what 2.1?.

Yeah. It’s Brian. It’s about $1.6 million of non-cash associated with the payoff of the Hercules loan. Recall that their associated charges that were on the balance sheet that would be amortized over the period, the loan has been paid back.

So once that loans paid back, they all get flushed out, but the good news is it’s non-cash charge, nonrecurring, etcetera..

Okay. All right..

We think that for our savvy investors, they look at these numbers and actually realize that the non-cash expense needed to come obviously to come out. So again, I just want to highlight the Opus transaction should not be understated.

It was given the state of where the business was and it’s historical and the changes that we have made in Q4 gave the bank enough confident to be able to invest with us on commercial terms. So I think, actually Brain you asked me the question on the last call and I apologize at the time I couldn’t disclose to you.

But we were very, very close to having all that locked up and as I said very pleased with what happened..

Okay. Good. I’m mapping out the revenue guidance, what you’re reiterating $80 million to $90 million and your adjusted EBITDA positive guidance for year-end, which you’re also reiterating. Now given what your comments were Jason around the premises business that the time really going to fully recover until next year.

Is that a change from last quarter, so initially, the shape of the revenue and return to EBITDA positive, adjusted EBITDA positive.

Is that going to happen largely without a recovery in that high-margin business?.

Yeah, I think we should be cautious to provide too much guidance on the premises business because some of the things we enacted in Q4, didn’t take effect until the end of Q1, particularly, the release of our uTrust product line.

I personally just completed a range of field visits with almost strategic government customers, which is way predominantly that business is. And the feedback that I’m getting from both our customers and our team is that it’s positive.

We have seen some early science of recovery and we’ve seen -- again just very positive feedback in the section to what we’re doing in that area. So it is an area that we want to continue to invest in. We think there is substantial potential for that business beyond what that business has been which is why we kept it.

And we forward it into the overall Identive strategy. So I'm excited about it but we’ve got to be patient with it..

Understood. So does that mean that the current backlog in this is more heavily everyday weighted.

I mean, it sounds like some of the inventory related comments and balance sheet commentary suggested that’s what’s really going to drive 2Q?.

Yeah. So a great, great observation Brian, one of the things about our premises business is that we can react quickly with inventory and supplying our customers based on a relationship with our contract manufacturer. So the buildup is primarily in credential business as I mentioned.

But that shouldn't be taken as a commentary on what we’d expect in anyone quarter for the premises business because again it traditionally doesn't need to have a lot of backlog to build inventory because we can react quickly..

Okay. Very good. Hey, so Jason, what’s the current status of the gaming market? As some of these connected toys start to really proliferate in homes.

Are you starting to get calls from other interested parties? Is that where the significant growth is going to come from down the road to the end -- between now and end of the year?.

Yeah. Actually, it is interesting. I think it is a market that is driving. Our challenge continues to be to become more integrated and trusted with the community at large there.

So, we have enacted a range of internal programs, decoration of the product management group to focus on some of the more leading-edge technologies, as those customers are wanting to integrate with mobility, particularly, not just a toy on a console, but how do they use the toy with the mobile phone, how they use it with the cloud, how do they use it with other properties that they may have.

That is an area of growth. But again, I don’t want to over highlight that just say, our premises or our identity businesses. The identity business is doing well and we expect that to grow. And the premises businesses as I said, we do expect that to recover. But yes, the everyday items and the Ethernet of things has just been an incredible boom for us.

We are seeing really good growth and continue to expect to see that over the next month very easy..

All right. Great. Thanks for answering my questions, gentlemen. And I’ll pass it on to the next persons and good luck. Talk to you soon..

Thanks Brian. Appreciate it..

I appreciate it as always. So, I think at this point, we had some email questions and I’ll cover those quickly and I encourage anyone -- anyone else has question -- must answer at this time to send us an email to ir@identiv.com. The first question I have and I won’t mention the person’s name because I don’t have permission to.

You should -- you are but does management intend to invert a reverse split? The answer is yes.

At the upcoming Annual General Meeting of Shareholders of record, we've asked that the shareholders approve, provide or approve the change to the by-laws of the company that would allow the Board of Directors to enact a split that would bring us into compliance over a 10-day period with the NASDAQ $1 bid requirement.

Again, I encourage every shareholder of record, if you have not received your proxy information if you project you are broker and if you are broker then able to provide the information, please reach out to IR at identive.com to provide assistance but we would like to see as many of you having say its possible.

Second question, concerning to individual, what does management intend to do a better potential de-listing. As I mentioned for number of reasons, Identive believe it’s more favorable to remain listed on the NASDAQ capital market.

In particular maintaining the NASDAQ listing helps support the stock liquidity, but also provide recognition to the company and the company shareholders. It’s an important activity. We are very focused on it and again, at that time, please vote.

The third question, recently a Shelf was filed, what does this mean for investors? Brian would you like to take that question?.

Happy too. Shelf Registration is essentially a renewal the previous registration that was filed in May of 2011 and it had a three-year term. So it came up for expiration, better part of 10 days ago. So this filing was a renewal of that.

And having the Shelf available allows the company to continue issuing registered shares under agreement such as our purchase agreement with Lincoln Park Capital. The original Shelf allowed us to self-securities up to $100 million in the aggregate. This Shelf was reduced to allow us to sell $50 million in the aggregate..

Right. Thanks, Brian. And we have time for just one last question and all other questions we will be happy to take offline and/or the next call.

But congratulations on the new financing, how is the Opus facility better than the one that was retired? Brian, would you cover that?.

I would be happy to take that one as well. As we mentioned, during the body of the call, Opus provided a larger facility of $20 million, one of which was a term loan, the other one was a revolving loan. So it gives us a variable option.

The interest rate is more favorable then our previous facilities, 6% versus 11%, as well as providing principal repayment deferred for 12 months. So it lowers our debt service requirement in the near-term..

Right. Thanks Brian. Well, we have reached the end of our time. And again, I appreciate the support of the Board, the support of our shareholders and management team, staff and customers. And look forward to providing a further update at our next earnings call.

Stay tune for the customer Annual General Meeting, which will be next week, I mean, next Thursday. And again, full time, please vote. With that, I’d like to close the call, Operator..

Thank you. Thank you, ladies and gentlemen, this concludes today’s conference. Thank you for participating. You may now disconnect..