Hello, and thank you for standing by, and welcome to authID Q1 Fiscal Year 2023 Earnings Conference Call and Webcast. [Operator Instructions] I would now like to hand the conference over to Graham Arad. Sir, you may begin..

Thank you, operator. Good afternoon, everyone. With me on today's call are our CEO, Rhon Daguro; our CFO, Annie Pham; and our CTO and Founder, Tom Szoke. By now, you should have access to today's press release announcing our first 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. 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 also 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.

As the operator mentioned, we will have a Q&A session after the presentation. [Operator Instructions] I'd now like to introduce our CFO, Annie Pham..

Thank you, Graham. Turning to slide number 3. The following highlights compare results from continuing operations for the quarter ended March 31, 2023, with the quarter ended March 31, 2022, unless otherwise specified.

Total revenue was $0.04 [ph] million for the first quarter ended March 31, 2023, compared with $0.2 million for the prior year, of which $0.04 million [ph] was from Verified software license revenue. The reduction was primarily attributed to revenue from the legacy authentication products that were discontinued in April 2022.

Operating expenses for the quarter totaled $4.5 million compared with $5.2 million. Loss for the quarter was $5.2 million, of which noncash and severance charges were $3 million compared with a loss of $5.1 million, of which noncash and severance charges was $2.3 million. Loss per share for the quarter was $0.21 compared with $0.22.

Adjusted EBITDA loss for the quarter improved to $2.2 million compared with $2.8 million, primarily due to cost savings from the restructuring plan that we executed in the first quarter of 2023, and that also reduced the monthly cash burn as compared to 2022.

In March, the company secured financing of up to $3.6 million under a facility agreement with Stephen Garchik, and we completed a $0.9 million initial drawdown of cash before fees and expenses.

However, in order to further implement our business plan and satisfy the working capital and NASDAQ listing requirements, the company will need to raise additional capital. With that, it gives me a great pleasure to turn the call over and introduce you to our new CEO, Rhon Daguro..

Verified Workforce and Verified Consumer. Closing security gaps for both workforce and consumer applications, verified delivers trusted identity verification and combines passwordless authentication with biometric certainty to shut down access, shut down privileges and shut down lateral movement from unauthorized users.

Directing our eyes towards the bottom of the screen, we will aggressively attack opportunities across our Verified CloudConnect identity ecosystem, essentially, it's our partner network, simply because we can be seamlessly integrated to enhance our partners' customers very quickly.

This ecosystem, which our product and engineering teams have worked extensively over the last year to build, broadens our service availability to a larger market.

This ecosystem offers our customers low-code integrations to our platforms in less than 10 minutes, thus minimizing customers' need for development resources and helping to advance revenue realization quickly. I'm going to end here on slide 11.

So in my first five weeks with authID, we have generated a tremendous amount of sales activity, categorized in three buckets. The first bucket is we're aggressively going back to our previous 600 prospects whom we met in 2022 to share the correct use cases and the correct pricing with the right people.

This will allow authID to be placed into the matrix solution set for customers who might have already moved on to a primary solution but will need a secondary solution or a backup solution in case the primary fails or is overloaded.

The second bucket we are focusing our efforts on 200 accounts that are predominantly dedicated to 2023 and our 2023 target list. We separated these top 200 accounts into two categories, strategic and tactical.

For the top 100 strategic accounts, we intend to apply the entire company's resources behind each and one of those opportunities to the point where we are willing to write new code and write new capabilities to serve our customers' request.

For our top 100 tactical accounts, our current authID offering meets their needs out of the box, and we can close those deals quicker, and we will provide better commercials for those deals.

And finally, we are actively working on more than 20 opportunities today to move through our pipeline, which includes a mixture of Fortune 500 companies in the verticals of entertainment, global payments and facilities management.

Over the next few months, we are building a high-performance sales organization really focused on executing on this proven sales framework that I'm sharing, with a sales force mindset and really a hardcore go-to-market strategy. This sales framework is actually absolutely designed to grow our pipeline and put customer wins on the board.

Nothing else matters. I look forward to sharing more details on these opportunities at our next earnings call. Thank you for your time. I would now like to turn it back to Graham and the operator..

Thank you[Operator Instructions].

Thank you, operator.

Whilst we're waiting for the question queue, Rhon, can I ask you a question about our partner integration? You mentioned them in passing, but perhaps you can go a little bit more - give a little more explanation as to the significance of our integration with companies such as [indiscernible] and others and how that's going to help in our sales efforts?.

Well, essentially, these identity authentication platforms have done a really good job in moving the world to a passwordless and a stronger authentication directive. These technologies are already in place, and our customers are built on these foundational blocks.

It is absolutely essential that our technology be able to bolt on top of these so that we can deliver really, really strong authentication while leveraging the technology they have in place.

So these prebuilt integrations allow us, again, to repeat myself before, to really simply integrate these things in less than 10 minutes, really fast, lots of value in a short period of time. And again, they still get to use their current investment and then build upon that investment with authID..

Thanks. Another question on the other side, not our partners, but our competitors. You explained how you don't think there are really direct competitors. But obviously, there is competition in the market. People are using different solutions.

Can you give a little bit of more color about how you see the competition in a competitive environment?.

Well, you can look at competition in three different levels. The first level is, is everybody trying to get rid of passwords. That could be considered as competition. How you get rid of passwords, you can use it through device and pass keys and tokens or you can use biometrics. You can consider those folks our competitors.

And then there's the sheer approach on how you're going to do it. Do you standardize the identity onto the device or you standardize the identity on who you actually really are, your face, your biometrics. And that's fundamentally the uniqueness about authID.

We do not want to centralize identity into your device because the device can still be compromised, and it's been proven. That is why the next evolution of securing the identity has to go beyond device. It has to go back to the human being. And that's where we focus and design our technology from square one.

And storing that biometric in the cloud allows us to not be pinned against a singular device, we can work on any device anytime, anywhere. And that's been our philosophy for complete flexibility for our enterprise customers..

Thank you. I am showing no further questions. I would now like to turn the call back to Rhon for closing remarks..

Well, thank you, everybody, for your time. I really appreciate it. I assure you that I will be fiercely focused on bringing my expertise, my vision and my energy to take advantage of our potential to escalate the company's performance and market presence. I look forward to working with you on our journey forward. Thank you..

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect..