00:13 Thank you and good afternoon everyone. My name is Joe Spain and I am the Chief Financial Officer for Intellinetics, Inc. I’m pleased to welcome you to our twenty twenty one Third Quarter Conference Call. Before we begin, I would like to remind listeners that during this conference call, comments that we make may include forward-looking statements regarding Intellinetics, Inc. that are not historical facts. 00:36 These forward-looking statements are based on the current expectations and beliefs of management and they are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results. We undertake no duty to update any forward looking statements. 00:52 For information about factors that may cause actual results to differ materially from forward-looking statements please refer to the press release we issued today, as well as risks and uncertainties included in the section under the caption risk factors and management’s discussion and analysis of financial condition and results of operations in our annual report on Form ten K filed March thirty, twenty twenty one, and other risks and uncertainties discussed in our Form ten Q filed today. 01:22 Also, please note that on the call today, we will discuss adjusted EBITDA, a non-GAAP financial measure when discussing the company’s financial performance. We’ve provided a reconciliation of this non-GAAP measure to our GAAP financials in our earnings release. Our earnings release, including the non-GAAP measure reconciliation is available on our website intellinetics.com/company-news. 01:49 I would now like to turn the call over to Jim DeSocio, our President and CEO.

01:56 Thank you, Joe and good afternoon everyone. We have filed a record revenue quarter in Q2 with another record revenue quarter in Q3. I’m extremely proud of our entire team in sales to production and delivery for an outstanding quarter. We're putting in processes in people to help ensure our long-term sustainable growth. 02:20 We have full transitioned to our new warehouse facility in Michigan, which has increased capacity and provides additional office space for more production. In doing so, we did not renew leases in two other locations as part of our consolidation plan, resulting in more capacity for the same operating cost. 02:40 We've explored our production team to meet the demands of our sales growth, which we’ll see at our growing headcount. Our business process outsourcing or BPO service, which we expanded and officially launched last quarter, we'll see additional growth and provides another ongoing recurring revenue stream. 03:01 We are signing new partners on our partner channel and continue to gain traction and credibility with our ERP partners. We have plans to hire additional sales representatives in our key markets and verticals. 03:15 To support our sales team growth, cross-selling and net new business we've increased the amount of marketing initiatives and our lead generation campaigns. We are strengthening our messaging to reflect our expanded risk of offerings, as well as generally enhanced brand awareness. 03:34 For over a year and half, our leaders and employees have efficiently and effectively addressed the pandemic protocols required for the safety of our employees. We are evaluating our policies and compliance processes should the current vaccination mandate guidance be upheld with the goal to minimize disruption to customers, maximize employee retention and continue our track record of keeping employees from customers safe, while also delivering our business commitments.…

06:54 Thanks, Jim. I will now review our financial results for the third quarter of twenty twenty one ended September thirty, twenty twenty one. Total revenue for the quarter ended September thirty increased twenty six percent to three point two million as compared to two point five million for the same period last year. 07:12 In Q3 twenty twenty, our document conversion business, primarily professional services was still recovering from pandemic lows of the second quarter of twenty twenty, exacerbating the gap to a record third quarter twenty twenty one revenue. 07:28 Following are the various components of revenue in the order presented on our statements of operations. Software revenue, which is comprised of perpetual revenue, increased nine percent for the quarter ended September thirty, twenty twenty one to fifty nine thousand dollars from fifty four thousand dollars for the same period last year. 07:47 The ongoing industry shift towards cloud solutions in lieu of on premise solutions makes this small component of our overall revenue increasingly inconsistent. Recurring revenue, which is comprised of SaaS, including hosting revenue, and also software maintenance services revenue and create eleven percent to six hundred and eighty nine thousand for the quarter from six hundred and twenty two thousand for the same period last year. 08:13 Within this category of recurring revenue, SaaS is growing more rapidly than software maintenance services at twenty five percent versus minus one percent. As expected, given the continued shift toward cloud solutions. The slight decrease in software maintenance can be attributed to customers migrating from our on premise solution to our file solution, which shifts the revenue from maintenance to SaaS, but of course, has no net effect on total recurring revenue. 08:41 Professional services revenue increased thirty four percent to two point two million for the quarter…

12:38 Hi. This is Howard from [indiscernible]. How are you guys doing?

12:42 We're quite happy as you can see from the third quarter results.

12:48 Yeah. A couple of questions. One regarding the revenue that occurred in professional services in the quarter, were there any one-time projects that occurred that bolted up a little bit or is this sort of that two million area plus now going to be your baseline now that you’ve got increased capacity?

13:15 So, I would say there's always projects. So, that's a tough one. I mean in terms of one time projects. This professional service revenue line has many components. There's certainly a smaller piece in terms of the software integration side, but as you listen to me earlier, ninety plus percent is from graphic sciences doing the document conversion. And within that document conversion in, within professional services, there's really two bigger pieces contributing graphic sciences. 13:45 There's a BPO piece, the business process outsourcing, which is very recurring. In terms of, it's steady, as long as we have that customer contract, they're giving us work day-in day-out, week-in week-out, we just get work. That's great. But the other half of it, let's say, there's a significant chunk, which is business that we go get. 14:08 Jim and the sales team, and Jim can elaborate on this more, work – have worked continuously over the past many quarters to ensure that that pipeline is full to keep feeding the machine, but we do have to go out and get that business for the project work.

14:22 Okay. And… Go ahead, Jim.

14:28 Yeah. I was just going to also say, we do have another line of business, which is microfilm and microfiche conversion, which is a different group of – different process where we're allowed to double up and we've had some nice projects over there, which allowed us to drive some additional revenue as well. But one of our – one of the things the management team talks about every day and every week is, how we're growing the company, what levers do we need to pull to grow the company and the backlog and filling the backlogs to keep people working and to keep the jobs and the revenue [flow] [ph] has been very positive and that's what we're focused on going forward as well.

15:09 And in terms of increasing the sales team and support staff, what – over the next months, what kind of hiring plans do you have?

15:21 We are hiring – we just hired one sales rep. We are hiring a couple more and then next year we also have plans to add additional headcount into the sales team. And we've proven we can fill the pipeline and keep them busy and drive x amount of revenue, and we're also focusing the sales team on doing a lot more cross-selling. 15:44 We've only did the acquisitions a year and couple of months ago, so it's bringing those people up in cross-selling and penetrating some of our different Intellinetics accounts with GSI services and vice versa selling the Intellinetics document management products into the GSI customers we’re really starting to hit our stride there.

16:07 And what impact have you seen from – I know last call you hired a Director of Marketing. So, what kind of impact has she had on operations so far?

16:19 We actually found a diamond in the rough there with Sandy, she stepped right in. A little bit unfortunate, we had more work to do. We acquired two companies, we had to integrate all the websites, so we start doing campaigns in the brand. So, she spent a lot of the last couple of months. The first couple of months just bringing all of our websites together and making sure the content was all correct and that's done and we just really started ramping up all of our campaigns. 16:53 We're doing three or four campaigns as we speak. They're ongoing right now. And she's done an excellent job for us and we think that we've also rolled out a couple of national campaigns and we've already seen a number of people coming to our website for some of the different services and news services we offer. 17:16 Microfilm and microfiche conversion for one and then also the business processing outsourcing, it’s where we started to grow for us as well.

17:26 And in terms of, I guess the SaaS in school districts, what are you seeing the pipeline there and how are your partners helping you achieve some of your goals there?

17:41 Well, I think, you know Howard, one of our really good partners is Software Unlimited, which sells back office software to K12 and they continue to deliver, you know, we have no cost to sale. They do all the across of sale and they continue to deliver. We have, I believe the numbers are one hundred and fifteen, one hundred and twenty of their customers [already] [ph]. 18:03 The goal is to bring in ten to fifteen a quarter and they continue to hit that goal and the revenue stream from that group is in – it's about three hundred and fifty thousand, I believe. So, it's a good revenue stream for us. They had about twelve hundred customers. So, we barely penetrated their customer base this time. So, there's a heck of a lot of upside there for us as well.

18:32 And one last…

18:34 And by the way, just to expand on that, just to touch, we've actually taken that model and have now signed up another –we've signed up another ERP company that does the same thing for K12 can’t actually mention them yet, but it's a very similar company the SUI in a whole bunch of different states. They don't compete against SUI. So, we hope to replicate what we've done over there in the K twelve space.

19:02 Okay. And one the last one, it might be a little unfair, but bear with me on the question, with the cross-selling opportunities, especially within existing customers, over the next couple of years, how much revenue or project activity do you anticipate can come from your existing customer base?

19:28 Well, that's the plan, you know like – yeah, go ahead Joe.

19:32 I would say, a meaningful amount. So, again, I don't think we can really be specific in terms of assigning some quantifiable number, but not around here.

19:46 Okay. Okay, guys. Keep up the great work.

19:50 It's been fun [Howard] [ph].

19:53 It's been fun watching.

19:55 Thanks. Any other questions? Well, with that, we'll wrap up. We appreciate the continued support of our long time shareholders and aim to attract new investors as well by continuing to deliver results going forward. 20:15 It is our goal to continue building a business model, which in turn builds shareholder value. Thank you for joining us today. And we look forward to speaking again on our next conference call. Thank you all, and have a great day.

20:33 Goodbye.