Greetings, and good evening, everyone. I’m Graham Arad, the authID General Counsel. Welcome to authID Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference call is being recorded. With me on today's call are our CEO, Rhon Daguro, our CFO, Ed Sellitto, and our CTO, Tom Szoke. By now, you should have access to today's press release announcing our third quarter 2023 results. If you have not received this, the release can be found on our website at www.authid.ai under the Investor Relations section. Turning to Slide 2. Throughout this conference call, we will be presenting certain non-GAAP financial information. This information is not calculated in accordance with GAAP and may be calculated differently from other companies’ similarly titled non-GAAP information. Quantitative reconciliations of our non-GAAP adjusted EBITDA information to the most directly comparable GAAP financial information appear in today's press release. Before we begin our formal remarks, let me remind you everyone that part of our discussion today will include forward-looking statements. Such forward-looking statements are not guarantees of future performance, and therefore, you should not put undue reliance on them. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Some of these risks are mentioned in today's press release, others are discussed in our Form 10-K and other filings which were made available at www.sec.gov. And for those on the webcast, if you’re watching the slides, please know that we will be advancing the slides for you. I'd now like to introduce our CFO, Ed Sellitto.

Thanks, Graham. Before jumping into the results for this quarter, I first wanted to say I'm excited to be here today on my first earnings conference call since joining authID in August. It's a pleasure to collaborate closely with our CEO, Rhon Daguro, as well as the rest of our executive leadership team and board of directors to help the company achieve our revenue growth targets and drive value for both our customers and shareholders. Turning to Slide 3, the following highlights compare results from continuing operations for the quarter and nine-month period ended September 30, 2023, with the quarter and nine-month period ended September 30, 2022, unless otherwise specified. Total revenue for the quarter was $0.04 million compared with 0.03 million a year ago. For the nine-month period ended September 30, 2023, total revenue was $0.12 million, compared with $0.26 million a year ago. The reduction was primarily attributed to revenue from a legacy authentication product that was discontinued in April 2022. Verified license revenue was unchanged at $0.1 million in both nine-month periods. Q3 operating expenses declined by 33% to $3.8 million compared with $5.7 million a year ago. For the nine-month period in 2023, operating expenses declined by 55% to $7.6 million compared with $16.9 million for the same period last year. The reduced expenditure ref reflects the company's cost-saving measures taken in the first half of this year, resulting in lower headcount costs and lower third-party vendor costs. Net loss improved by 40% to $3.7 million for the third quarter, in line with the improvement in operating expenses, and included non-cash and one-time severance charges of $1.8 million, compared with a loss a year ago of $6.2 million, with non-cash and onetime severance charges of $2.9 million. For the nine-month period in 2023, net loss was…

Thank you, Ed. I'm very excited to have you here on the authID leadership team. So, it's been a real pleasure working with you again. Let's go to Slide 7. So, over the last few months, we've quickly built a high-performance sales machine. This is my second quarter as CEO of authID, and I'm happy to reiterate our CFO's earlier message that our Q3 was another record sales quarter for authID. Our new sales executives who joined us only in June and July, put customer wins on the scoreboard in the third quarter valued at $1 million in new BARR. Again, these BARR bookings represent more than four times the highest previous total gross BARR that my team secured in the second quarter of this year, and more than 25 times the BARR earned in Q3 of 2022. This is phenomenal for a team who only started four months ago. The highlighted customer wins include a multinational fintech and inclusive financial network that allows individuals to establish trust and credit worthiness without the need for credit history, credit score, or pay slips. The second win was a US-based telehealth company selling personal care products and over the counter and prescription drugs online. Our third win was an expansion opportunity with a fintech platform for Caribbean merchant payments. And lastly, we booked a full service commercial and consumer financial institution providing high quality banking services. Since the refresh of leadership in May of this year, the authID story has been completely rewritten in every facet of the business. We have strengthened our foundation, built on top of that foundation, applied sales discipline to our engagements to maximize how we secure wins and help our customers, and improved our efficiency in bringing customers live and successful in their deployments of authID’s products.…

Thank you, Rhon. [Operator instructions]. While we're waiting, I'd like to give a plug for an event tomorrow. Rhon Daguro will be participating in a cybersecurity panel hosted and broadcast by NASDAQ on their Trade Talks broadcast at 1:00 p.m. Eastern Time, somewhere afternoon. You can watch it on nasdaq.com or on their YouTube channel. Whilst we're waiting for questions, Ed, I think it'll be helpful, you've reported this time for the first time on RPO, and I think it's a significant number, which perhaps you could explain a little better in lay terms what this means in terms of the contractual commitments that the company has entered into and the significance looking forward to the future revenue trends.

Yes, absolutely. Thanks, Graham. So, to give a little bit more color to that, our remaining performance obligations are driven by actual committed contractual terms that our customers are required to pay us as part of the deals that we sign. So, this is important because whereas in the past we may have signed a customer with expectations of volume and revenue, we have actual firm commitments from these customers that represent what we disclosed in our RPO. We fully intend and have contractual obligations for that to be turning into revenue as we go live with those customers. And we do expect that to start showing up in our revenue soon. So, we’re excited to have this as part of something that we can report now and can watch that continue to grow and convert into revenue in the coming quarters.

Okay, thank you. And on that note, there's been a question raised about how we move from BARR to AIR to ARR. What is the process from a company point of view and from an accounting point of view? Can you give a little more color on that, please?

Sure. So, when we talked about booked ARR or BARR, that is the expectation when we sign up a new - sign a new customer or the new deal, the annual recurring revenue we expect from that customer at 18 months from signing. So, to get from the initial booking of that BARR to ARR, what typically happens is, we would need to get that customer live with our product. So, we have building a robust implementation plan with our customers and process on our end to get them live as quickly as possible, getting value out of the service. Once we go officially live, we'll start being able to recognize our committed revenues at that time. And then additionally, the volumes that that customer will put through our product will begin to ramp. As those ramp to their fully ramped expectation, we expect that to even exceed our commitments and get to the ultimate annualized recurring run rate of revenue at 18 months from signing. But we'll start seeing revenue much earlier than that.

That's great. Thank you. Rhon, we've had a question relating to the expected growth. Obviously, very positive results so far in the last quarter, but what do you see as the biggest headwinds potentially facing us in the upcoming year to ensure that the - which may prevent or restrict that growth?

Well, when you're implementing a new technology like biometrics, like I said before, the market hasn't widely adopted biometrics because of the speed. The speed simply was just too cumbersome, too slow, too clunky. And the big challenge that we have ahead of us is to get that message out to as many people as possible. And we’re small. We're still limited. Obviously, there's limited resources and we don't have - we're not as big as we would like to be, but we're getting there, and we're actually getting there way faster than we ever planned. Like I said, we revised our target. So, based off of the resources that we had and using good formulas from our previous experience and growing a business this fast, we're growing faster than even some of the previous organizations we were a part of. But our biggest challenge will be is how to get that information out there faster and to the right people who care the most.

Thank you, Rhon. I suppose the other aspect to this is competition. What are you seeing in terms of how we're managing to win deals against competition? And who do you feel are our biggest competition?

Well, the good news is, the competition that are out there that are doing biometrics and doing authentication biometrics, they've already been in the space, and they've been teaching and educating folks as much as they could around the new opportunities of introducing biometrics into their identity workflows and their identity security strategies. But simply the speed, it just wasn't there and the speed isn't there, and it would make people a little gun shy to deploy something that would bring friction to a user like five to nine seconds. That's a lot. I mean, typing in your password and doing those more archaic methodology approaches, just biometrics doesn't seem to be a lot better. The reason why we have this edge. and the reason why we welcome the competition, and the reason why we like that the competition exists is, we're just doing exactly what they want, but we're doing it at the speed that they want to do it at. And that gives us that opportunity and the edge over the competition.

Okay, thank you. We've had a question about retention rates. And I guess the specific focus there would be, what do we do? How do we manage to ensure that we do keep our customers after we've gone through the hard task of winning them? What are we doing to make sure that we keep our customers and keep them happy?

Well, we follow a really strict formula in helping our customers. One, we define our customers actually as partners. And as a partner, you do several things. So, on a quarterly basis, we work with our partners, and we actually present to our partners how we're performing, how we're not performing, what we can do better, and then share what are the things that they're trying to achieve and to make sure that we're aligned with that. And we do that quarterly, and we call them quarterly business reviews. So, we meet with our customers on those executive leadership time periods called the QBRs, but then at the same time, we're also working with our customers on a weekly basis to make sure that, one, the technology's performing. Two, it is adapting and adjusting to some of the changes that maybe our customers may need. And we're really providing that white glove treatment with our customer. Secondarily, when you become the central authentication authority for all identities across the enterprise, that, and you perform, then there's no reason to be removed from the platform. So, typically, solutions like identity solutions like ourselves, become super, super sticky, which is why we sign deals that are two to three years, because sometimes it even takes six to seven months just to implement. So, our contracts represent the investment in a time and investment that these companies want to make sure that the technology works. And as long as we perform and as long as we're great partners, it becomes a very super sticky business for us.

That's great. Thank you, Rhon. That seems to be all the questions we have right now. Do encourage investors to look at our website. All of these materials will be posted on our website, as well as a recording of this. And if there are additional questions, you can post them to us at investorrelations@authID.ai. Rhon, would you like to wrap up?

Yes. I definitely want to thank everyone for the questions and especially for your time today. I do want to assure you that the authID team continues to be absolutely maniacally focused on our mission to help the digital enterprises know exactly who's behind every device. So, thank you again. Have a great day.