Good afternoon. Welcome to the Wireless Ronin Technologies first quarter 2014 earnings call. My name is Danielle, and I will be your conference operator this afternoon. Before we begin today's call, I would like to remind everyone that this call will be available for replay, starting later this evening. A webcast replay will also be available via the link provided in the earnings press release as well as available on the company's website at wirelessronin.com. I would now like to turn the call over to Erin Haugerud, Wireless Ronin's Manager of Communication and Investor Relations.

Thank you, and welcome to Wireless Ronin's first quarter 2014 earnings call. With me today are Scott Koller, President and CEO; and John Walpuck, COO and CFO. Following Scott's opening remarks, John will review our financial performance for the quarter and then turn the call back over to Scott for an operational update. Following Scott's remarks, we will open up the call to your questions. To access today's webcast, please go to the Investor section of our corporate website at wirelessronin.com. Please note that the information presented and discussed today includes forward-looking statements made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Our actual results in future periods may differ materially and you should not attribute undue certainties to our forward-looking statements. Risks and uncertainties that could cause our actual results to differ from those expressed or implied by forward-looking statements, including those set forth in the cautionary statements in the company's Annual Report on Form 10-K filed with Securities and Exchange Commission on March 11, 2014. In addition, our comments may contain certain non-GAAP financial measures, including non-GAAP operating loss and non-GAAP operating loss per share. For additional information, including reconciliations from GAAP results to non-GAAP measures, how the non-GAAP measures provides useful information and why we use non-GAAP measures, please see the reconciliation section of our press release, which appears on our corporate website. Now, I'd like to turn the call over to our President and CEO, Scott Koller. Scott?

Thank you, Erin. Good afternoon, everyone, and thank you for joining us on today's call. The objective of today's call is to briefly review our Q1 operational results, provide key client updates and more importantly report on the status of our merger with Broadcast International and how the business combination creates a platform for additional strategic opportunities that will position Wireless Ronin for long-term success and shareholder value. Now, I'd like to turn the call over to our new COO, CFO, John Walpuck, to take us through our results for the first quarter. John?

Thanks, Scott, and good afternoon, everyone. Now to our results for the first quarter ended March 31, 2014. Revenue increased 2% sequentially to $1.3 million and down 10% year-over-year. This sequential improvement was driven by our key clients Chrysler and ARAMARK, while the year-over-year decline was driven by a combination of order timing, seasonality and customer priorities. Recurring revenue in Q1 '14 increased 8% to $534,000 and accounted for 42% of total revenue during the quarter. The increase in recurring revenue was driven by the continued growth of our hosted platform and support services. Gross profit in Q1 '14 was $713,000 or 56% of total revenue compared to $746,000 or 53% of total revenue in Q1 '13. Non-GAAP operating loss in Q1 '14, which we define as non-GAAP operating loss less stock-based compensation, depreciation and amortization, severance and other one-time charges totaled $794,000 or a loss of $0.12 per share. This was a significant improvement from a non-GAAP operating loss of $1.2 million or $0.23 per share in Q1 2013. This completes my financial summary. For a more detailed and complete analysis of these results, please reference to our Form 10-Q for the first quarter filed today with the SEC. Now, I'd like to turn the call back over to Scott. Scott?

Thanks, John. As we communicated on our last call, we have spent the last two years analyzing a range of strategic opportunities aimed towards accelerating our growth, maximizing our technology and building shareholder value. Following an extensive review and due-diligence process, in March we signed a definitive agreement to merge with Broadcast International. We believe that the digital marketing and signage industry is at a major tipping point in terms of its growth and adoption. The Ronin/Broadcast combined company will have an incredible platform of products, services and proprietary intellectual property. This merger coupled with an A-list of key customer accounts makes us confident that we have laid the foundation to build a highly differentiated and scalable company that can support future expansion as we aggressively seek to grow by capitalizing on substantial opportunity in the digital marketing and signage. With that said, the company is company is focused on growing topline revenue and long-term profitability. Strategically, our executive team, Board of Directors and advisors are continuing to evaluate both organic and inorganic opportunities to accelerate, meeting these objectives. As a result of this effort, we recently entered into a non-binding letter of intent with a privately held marketing technology integrator and solution provider. We are confident that this potential business combination will create an industry-leading benchmark that is highly differentiated with a comprehensive portfolio of products, services and talents. We believe this transaction would accelerate our ability to achieve topline revenue growth and sustain quarter-over-quarter profitability. The letter of intent contains no binding provisions that are material to us and presently contemplates a combination transaction, in which shareholders of the private company would obtain a majority of Ronin stock due to the issuance of newly issued public common stock. We will provide an update in the event we enter…

(Operator Instructions) And we have a question from the line of Tom Pierce with Van Clemens.

A question just coming up through a meeting from my clients is about your cash situation. And you already recently said that you're out of money by the end of April and it's May now. So how is that going?

A question just coming up through a meeting from my clients is about your cash situation. And you already recently said that you're out of money by the end of April and it's May now. So how is that going?

I'll differ to John for that real quick.

So as we disclosed in the Q, there is some additional information in there. But in short, our plan and our engagement in a private placement process includes enough cash to either bridge us through to breakeven or to this business combination transaction, which we're striving to close in the near-term. That's in the Q document. And we're fine with cash or will be fine with cash in the near-term.

And our question is from the line of Jack Frid with Discovery Investments.

Anything going on with the Delphi relationship in regards to the calorie count? And also can you give us Chrysler -- it sounds like, the second half of the year, Chrysler and ARAMARK will be coming around better?

Actually, I'll just, Delphi relationship, first. It continues to be very strong. Again, we have been very transparent with the investors that this is a strong relationship we feel that will leverage a very good company, in Delphi, and their footprint, and their reach, and their client relationships and leverage our technology to grow. They are engaged in several pilots. They are actively selling a combined combination of the services they provide. We're integrated with their products. So it's a matter of just getting more sales traction and filling the pipeline, but I can tell you, it's a significant part of their business plan and they are working extremely hard to grow that network. As it relates to Chrysler and ARAMARK, you're absolutely, right. As I alluded to in the call, the last two quarters have been softer with our two big clients just really as a result of seasonality, their priorities and timing. We expect with the initiatives both of them have going on to see that return to normal levels and even exceed normal levels. We're very confident. And so again, they are bulk of our revenue, if they have a softer quarter, it affects that quarter, but it's really a matter of timing, Jack.

One more question if I could.

Sure.

I didn't realize that was the Q was out. Does the financing for Ronin depend on the closing of the Broadcast?

No, Jack, it does not. It does not depend on the closing of the Broadcast deal.

Any more timetable on the Broadcast?

I was waiting for the question to be asked. So absolutely, we have received limited comments back from the SEC. We're fully engaged with SEC and we expect to go effective in the near-term, and we will disclose that as soon as humanly possible. We're still very confident, and a lot of it's not in our control, but we're still very confident we can close on this transaction in this quarter.

And our next question is from the line of Doug Pritchard with Feltl and Company.

I guess I've got a question regarding dilution going forward and maybe that ties in with the merger with the private company that you're talking to at this time. And I guess I would assume that they're going to take control of the stock that they must be a larger company than Ronin. Could you comment on all of those?

Yes, very much so. And I'm glad, you asked the questions. This is about -- and we've been extremely transparent with the shareholders. We've been on a strategic path to get Ronin to scale. This is about accelerating, getting Ronin to scale and creating value. So it is a large entity, it positions Ronin short-term and long-term to be extremely successful. I'm very excited about the business combination and what it can bring to this market as far as the first solidification of verticals and accelerating topline revenue growth. We can not rely as we have on pure organic growth to get us to sustain profitability. We need to accelerate it and we think there is opportunity in this marketplace right now to position a business combination like this to be in a very advantageous position as far as a acquiring market share. So we're excited about it. As we have alluded on the last three calls, this has been a very objective for the executives, the Board of Directors and our advisors at hand, is to get Ronin to scale, be part of something that has a tremendous amount of upside and we can create shareholder value. And so from that standpoint, I'm extremely excited about the business combination.

Just one other question tied in with the dilution, how does that look forward to an existing shareholder? You've had some reverse splits in the past and I'm just wondering going forward how that looks?

To the existing shareholder, we have to raise our market capital and we have to show shareholder value, that the business combination has to be in the best interest of the shareholders, without a doubt. I mean we've had other opportunities that we saw and eliminated because it did not have the shareholders best interest at hand. So if there is dilution, it's because we feel there is a tremendous amount of upside to reach scale and to drive a better market cap and to get to a higher price stock. This exactly what our goal is. There were other opportunities, as I mentioned, that we walked away from because we did not feel it was in the best interest of the shareholder. The best interest of the shareholder, it was the number one driver and the strategic to our plan.

Well, it's better to have a 20% interest and something that works out than a 100% or something that doesn't.

Absolutely, and this is about getting to scale, which I think there is just a tremendous opportunity in this highly fragmented market to take leadership position and get to scale.

And our next question is from the line of Rick D'Auteuil with Columbia Management.

You've bamboozled me. I haven't read this. By the way there was no press release to hit the tape, but there is a filing out there, I've seen after the facts. So just speaking in a little bit, tell me what this company that's essentially acquiring you is doing? They're coming public through a merger with you, but they're going to be the overwhelmingly majority shareholder. And what do they bring to the table? You lost me on that.

Well, what they bring to the table is scale, topline revenue growth and scale, and the combined business, if this goes through is profitable and not burning cash and in a very advantageous position in the marketplace. It's not a overwhelming majority at all, not even close. We feel like it's a very fair discussion we've had so far on their valuation and our valuation and the combination. But this is about giving the scale, Rick, and about stock burning cash and getting to the quarter-over-quarter profitability. As a lot of topline revenue, a lot of topline revenue and a very robust pipeline that with the business combination of Broadcast and Ronin behind it with a lot of proprietary IP and the foundation of technology, the ability to support that growth. They have a tremendous list of A lists customers. They have topline revenue and they have a great pipeline. You marry that with an incredible list of customers, and we have our core customers in a foundation of intellectual property, and you have a winner.

So you called them a marketing innovator?

Integrator.

Integrator?

Marketing integrator. And just the sensitivity of it, we're just not at liberty to talk more about what they do, because it becomes pretty transparent who they are. And we're still in the nonbinding relationship and we're doing a tremendous amount of due diligence. So it does us no material good to disclose who the company is now.

I'm not asking to disclose it. When you said, they have material topline it's applied to company, so it's not going to tip anybody's hand. Are they doing $10 million or more in revenue?

No. Greater than $10 million, much greater than $10 million, and the combined unit as we look out and project in late-'14 and '15, could see and this just hypothetical, could see revenue growth $25 million, $30-plus million, but at this point in time, we just can't really discuss it. But they are bigger than us. They're growing very rapidly with topline revenue and have a great list of customers, I believe what they've done in their sales approach has been very effective.

And their people will effectively run the business?

The combination is well. The combination of the leadership teams and then the board, it will still be a combination. And the end result, this is a public company that is profitable and can grow.

So the private placement is only in the case that this doesn't go through?

The private placement is to ensure that we have enough bridge money to get this transaction done and/or get ourselves to profitability and breakeven, and at least cash flow neutral. But more importantly, as we've been pretty transparent, as I mentioned before with our shareholders, we have from a strategic standpoint, have aggressively pursued getting to some kind of strategic deal that puts Ronin in a place to take advantage of our pipeline, our IP, and what we've build here and get us to a place where we're not burning cash for profitability and the size of our company becomes less relevant as we compete for business.

So what's the terms and the size of the private placement?

We're not at liberty to discuss that, Rick.

What's the timing of it? It's like imminent?

Yes.

How much capital do you need to bridge yourself for this event?

Again, I don't know the exact timing of the events. We're not looking to go, do a bunch of dilution at this point in time. We're looking to bring the minimum cash required to get us to the event. We don't want to dilute at this level. And we're tired of dilution and that's why we sought out this type of business combination. Trying to grow organically as a sub-10 million public company in this space has put a lot of scar tissue on Ronin and has actually hurt in the competitive landscape. So getting to a business combination that has scale, topline revenue growth, and is cash flow positive and profitable is the number one endeavor and in the best interest of the shareholders.

So this isn't just a way for them to go public, right? There is more to them now?

No. Absolutely not. This is a strategic relationship that both parties are very excited about. We're in the middle of due-diligence and it's going very well.

And we do have a follow-up question from the line of Jack Frid with Discovery Investments.

John, can you comment, I know before you came to Ronin, you worked with the company by the name of AllDigital, which was working on a merger with Broadcast International that fell apart. Can you just take us back on some of the key things that you saw or the AllDigital saw before it didn't make it?

No, Jack. So I appreciate the question. There is a bunch of confidentiality considerations there, so I can't comment on anything historically. I think that would be inappropriate. And basically, I can't do that. However, I can say this, I am super excited to be here working with Ronin and this company and the company's platform. Because as Scott said, I think that we are super uniquely positioned through this business combination to become a vehicle for further consolidation opportunities, to accelerate growth, to get to cash flow breakeven, to stop burning cash and to maximize value for everybody at the table here, all of the shareholder. That's what our mission is. And the past is the past. But I can assure you, I am here because I am super excited about the technology and the intellectual property that Broadcast can bring to this party and how we can leverage that on a go forward basis.

And we having our next question is from the line of Tom Pierce with Van Clemens.

One of your key accounts that I kind of heard much about lately is Polaris. Can you give us an update there?

One of your key accounts that I kind of heard much about lately is Polaris. Can you give us an update there?

Polaris, right now, we have for the Indian brand that we have talked about working with, we have orders and have fulfilled orders for a 105 of their dealerships. That network continues to grow. They're still installing those into dealerships and they expect, as their original target was, to grow to somewhere 300 to 400 dealerships. So we're still very confident in Indian and what the technology is doing there, but more importantly it's open up other opportunities within Polaris, as anybody who falls in, they've done extremely well, a very well run company. And there is a lot of silos within that company with other product lines that provide opportunity for us. So the Indian rollout is doing fine, a little slower than we originally anticipated, but we need to have dealerships open up prior to it selling technology, and then has opened up other vehicles for us with employers.

At this time, this concludes our questions-and-answer session. I'd like to turn the call back over to Scott Koller for closing remarks.

Thanks everyone for joining us on our call today. I especially want to thank our investors for their continued support and patience as we build Wireless Ronin into the industry's leading digital marketing technologies provider. And we look forward to updating you soon. Have a great day.

Ladies and gentlemen, that does conclude the Wireless Ronin Technologies Inc. first quarter 2014 earnings conference call. Thank you all for your participation. You may now disconnect.