RDP License Server (Device Based CALs) is not issuing licenses to Devices.

Hello,

My RDP license server is not issuing licenses at all. Here are my environment details:
 
This is workgroup environment
RDP license is Device based CALs and is installed on Windows 2012
RD Session host server is Windows 2008R2.
Full communication is allowed both ways between license server and RD session host server.
Windows firewall is turned off on both license server as well as on RD session host server.
The Local Administrator’s password on license server as well as on RD session host server is same.


Now, on RD session host, when I run tlsbln.exe manually, it pops up the usual xxx days left balloon warning.
However when I run the License diagnostic utility under RD session host Snap-in, the utility connects to the license server fine and shows me the stats. However, in these stats, it show installed licenses are 20 and available license also as 20.
On the License server, under License server snap-in, My license server also shows that installed licenses are 20 and available are also 20.

This is not right. The installed should show 20 but the available license should show 19 as my desktop should have consumed one license.
I had 2 more laptops connecting fine to the RD session host sever and still the available licenses number was still 20.

Besides, on license server under the license manager snap-in, it did not mention any device names connected. Meaning, it is not aware of it at all.

Could you please help me understand what am I missing here. Why my license server is not issuing licenses?

Thanks.