Great. Good afternoon, everybody. My name is Rudy Kessinger. For those of you who don't know me, I cover software here at D.A. Davidson, and with us today, we have Intellicheck. We have CEO Bryan Lewis and CFO Bill White joining us, and so we'll jump right into it and try to make the best use of our time, so, Bryan, I think if you could maybe just start out and give a brief overview of how you guys do ID verification and how you're able to do it with such a high accuracy rate versus competitors, 99% versus competitors at about 60%. And then what are the barriers to competitors replicating how you do it? Yeah. I think there's a major difference between what we do and what most people would consider our competitors do. The vast majority of people out there, what they do is they take a photo of the front of the license, and they think that through templating or what's called OCR, they can tell you if the license is real or not. They're going to look for the holograms and the placement of words and those types of things. But what I'll tell you is our law enforcement clients tell us that they can't tell it apart. These fakes that are coming in from overseas are really, really good. You can't look at them and know. So what we do, and it really comes from being in the business for 20 some odd years now and working with the DMVs. We had a relationship and still do with AAMVA that allows us with a courtesy verification program. States can send us when they change their format of their barcode. They'll send us the specs, the security features, and then a couple hundred licenses or so, and we give them back a report card on how well they have programmed their machines to print that barcode. Now, what I'll say is that also we've learned so much that even if we didn't have the AAMVA relationship, we'd be the world's best criminals because we can reverse engineer these barcodes just given what we know from having this 20-plus-year relationship. Knowing what's in the barcode, the hidden security features, and all those things, that's what makes it so accurate. I'd like to point out, is that before the New York State DMV gave us to their law enforcement officers, they ran over 1,000 fakes against our system. We caught every single one of them. The Mississippi ABC, as part of their renewal process, had to go out and retest us against other handheld devices to check IDs. We scored 100% on their test as well. So we are exceptionally accurate. And I'd say that the barriers to entry are AAMVA is not looking for anybody else to help with this courtesy verification program. And that means that even if somebody wanted to and they spent a ton of money trying to crack the code on one license, the problem is there's 250 valid formats out there still. So that's just across the states. It doesn't include our territories. It doesn't include Canada. It doesn't include Mexico. So you can't just say, "I cracked one." You have to have all the formats, or you might as well have none. Right. Right. That's very helpful. And I think it's 94% of your revenue currently comes from in physical channels. I know that digital is accelerating. I'll touch on that in a bit. But in physical channels, you're effectively not seeing any competitors compete for that space. Why is that? Could they compete there if they wanted to, or what's stopping them from competing there? Yeah. The main thing that stops them is the difference between what they do and what we do. We work with the existing hardware, whether it's at the retail teller workstation, being the machine that will read a check that can read a barcode. In a retail store, it's the same scanning gun that they use to ring up the merchandise, can also, with a configuration change, very simple to do, read a 2D barcode that's on the back of the license. Now, if somebody decided that they wanted to use one of these other OCR vendors, the people doing the photo of the front, that means they would have to buy an optical scanner, take a photo of it for each and every one of their workstations. And we've done the math on this. And we've got retailers over 1,100 locations, 25 point-of-sale workstations in each store. And those scanners are three or four hundred dollars each. You do the math on that, and it's a $10 million investment, and they're not going to take it. Why spend $10 million for something that our clients tell us is 60%-65% accurate when two weeks' worth of coding and you've got something much, much more accurate and no hardware costs? Right. Right. Apple, about a week ago, they announced these first couple of states that signed up to adopt their driver's licenses and the Apple Wallet. What does that mean to you guys? I mean, does that kind of impede on what the secret sauce, if you will, that you guys are doing with the physical IDs over the long term? How do you view that as a potential threat? I look at that as more of something that can store an image of your license. It doesn't mean that it's real. You still have to authenticate it. They haven't said anything about how they're going to authenticate it, make sure it's real, and the same way that the states, the handful of states that offer a Mobile Driver's License, it still has a barcode, which we can scan and authenticate. Secondly, every state that is an MDL requires that you carry your physical license with you as well. Because what we've certainly heard from law enforcement, and they don't all seem to be too happy with the MDL, you look at it from both sides of the equation. Do you want to hand your unlocked phone over to law enforcement? I think a lot of people would say no to that. Secondly, if you're the law enforcement officer, do you want to take somebody's iPhone with a broken screen? Because I'm probably then going to say to you, "Well, you dropped my phone and broke my screen. I want a new phone." So there's some technical issues there with what's going on. And the other thing I would say is that since you have a choice, the bad guys are going to go with the fake license made out of plastic that they're going to get from overseas that's so real. So I don't see it changing the dynamic. The states that have the MDLs, the uptick isn't that great. We work with all the states that have them, so our retailers can scan them and authenticate them if they want. But at this point in time, still barcode technology, it's on your license, I mean, on your phone, does not automatically mean that it's real, and I think it'll just continue that our retailers are going to want to scan the physical license, make sure it's real. Yeah. Yeah. And another thing that I frequently get all the time is, "What about digital channels? They do this in physical channels. Isn't brick and mortar dead, et cetera, this and that?" And clearly, you guys have demonstrated that you have a decent-sized opportunity in the physical channels. But talk about digital. What are your digital capabilities? How are you going after digital channels and approaching that market? Yeah. I would say that our digital is the same that we can do in the physical world. The only difference, we can add other options that we can charge for. In the physical world, all you need to do is get the license, make sure that the photo on it matches you after we've authenticated it. In the digital world, it's really simple. Whether you initiate it yourself, you're going to a website and you want to apply for something, or you're in a call center, what'll happen is it'll ask for your cell phone number, and a text gets sent to your phone. And then our clients decide how much friction they want to put into the process. It might just be as simple as all they want to do is validate that the barcode is real. All right? Simple, easy one. Or they can say, "I want to make it a two-step. I want to validate that the barcode is real, and I want you to take a photo of the front of the license, and we're going to, through OCR, make sure the words that are printed on the front of the license match what is encoded in the validated barcode." And if they want to go one step further in friction, we can also do facial recognition with liveness so that make sure it's not a picture of a picture and compare it to the photo on the license so that we know that, yes, the plastic is in fact real, and it is still me who's holding it. So we're across a number of different industries now where people are doing digital authentication. So we've got some loan companies that do it. There are certainly call centers that our banks are doing it. One of our credit card issuers that has no brick-and-mortar, they use it. Some of the background check companies we have in play, they use it. So it's becoming part of our revenue portfolio. Yeah. Got it. You guys have talked a lot about the opportunity with the top 10 banks plus Discover and Amex in the U.S., the top 12 kind of credit card issuers. Five of those are already signed customers. Could you talk to us about what you're doing with those customers? What are the primary use cases you're solving? And then can you give us a sense of how penetrated you are with them and how you get to full penetration from here? Yeah. I would say that if we look across what we could be doing with any one of those clients, I'm going to say that I feel that we probably aren't more than about 15% penetrated through every use case that we could. Certainly, they continue to roll out retailers. So there's a time aspect to that. What I like is our bank partners become our resellers. They're the ones doing the sale. They'll bring us in maybe at the last bit to explain how easy it is to do. But then within the banks themselves, we're still in rollout phases with several of them to get onto their teller workstations. Some were doing their automotive loans. Some were not. Some were already in their call centers. Others were not. So that's certainly one of the things that we work with the salesforce on is how we're going to make sure that we penetrate and get every dollar out of our clients that we can. Now, some banks, it's a lot easier because they have a centralized identity function. In others, it's a little bit harder because they've got multiple each department almost has their own. So where it's centralized, they're looking to roll it out everywhere they can as fast as they can. That's like financial services company number four. Whereas number three, it's decentralized. So we're getting references from where we're doing well, and they're putting us into the new group. So that moves a little bit slower. So certainly a focus of ours. It's one of, I think, the pillars of where we're looking to get our growth off of is to really expand into the clients that we have. Right. The remaining seven. So you got five of the top 12. There's seven left. I don't know what you can share. What's your confidence levels that you'll sign some of those remaining seven? How are you targeting them, et cetera? Yeah. Very high. We partly think the problem for at least my poor salespeople were they were so overworked. We didn't have enough salespeople, in my opinion, to be able to handle the opportunity that was put in front of them. But since end of 2021, we have nearly doubled the size of the team. And I think that we'll continue to grow the salesforce as we can bring them on with knowing that we're training them properly. I don't want to bring on 20-some-odd salespeople, and half of them fail because you didn't get a chance to train them right. So working very closely with Bruce, our head of sales, to make sure that we've got a pipeline of people to bring in because I just see more and more opportunity in not only our existing clients, but new markets to get into. And I need the feet on the ground to be able to attack all of those. So getting people is going to certainly help us get into those, and certainly references help. And the other thing I'd like to do is when people change jobs, move from one of our clients where they're using us to love us to one that doesn't. So I think all those things are certainly going to help us get into the remaining seven. I look at it as very much a land grab because I want to get in there. Because once we're in, say somebody was able to replicate everything that we do somehow magically, are they going to pull me out to put somebody else in? We're their enterprise solution, and we're now in the guts of everything the bank itself does. And then we're also the system that the retailers are using. And they don't want to go back to the retailers and say, "All right. By the way, all that work you did, you got to rip it out and put in new." Because the retailers don't like to touch their point-of-sale systems all that often. So I think once we're in, given our efficacy, we're in for. So to me, it's grab as much of the land as we can and then expand once we've landed there. Helpful. And you touched on briefly there the sales reps and too much for them to handle. Talk about kind of the emerging use cases and the inbound demand you're seeing for stuff like background checks, rental applications, age-restricted products, stuff like that. Just what's the kind of traction you're seeing there, the opportunity, and maybe the percentage mix in the pipeline now versus 6 to 12 months ago that's coming from that kind of broad category of emerging use cases? Yeah. I'd say other than age-restricted products, most of these in the pipeline six months ago would be near zero. We have some introductions, and we're talking to people. But we've already signed some in every one of those categories. And I think it's going to continue to grow. I think certain of those categories make sense to do through partnership plays. If you look at the background check industry, there are sort of two software vendors that provide the backbone for most of the background check companies out there. Perfect partners for us. Same thing in cannabis. Partner with the folks that do the point-of-sale inventory control systems. Just embed and be part of what they're doing. So we've had some very, very fruitful discussions with those types of potential resellers. Other areas, the companies that are doing rental agreements, we've signed several of those. Because again, COVID changed things. Where now so much is done remotely, we're just a perfect fit for it. Because I'm not standing in front of you, so how do you make sure it really is me and that I'm the right person? So it is a small but certainly growing portion of where I see our sales coming from in the future. Got it, and touching kind of on that, you were just talking about resellers and partners. You signed your first two resellers last quarter. What's kind of the update on that front? Have you done any sales through them yet? I think you had said one already kind of had one deal lined up. But what's the traction like with those two that you already signed? And then as you look at kind of the pipe for additional resellers, how's that grown over the last three to six months? Yeah. Well, just to be clear, we've had some resellers in the past. We've got some people that resell our HID product, but not a ton of scale. We signed a deal with Dealer Safeguard Solutions, who's in multiple types of auto dealerships, and they're selling it. These are new areas for us. We're dealing with companies that are sort of the backbone of small banks, credit unions, or they provide loan origination software, those types of things. So the two of them that we signed, one had done the integration, and they're about to bring live their first client. I think after they see that go really well, we'll gain traction, and we should see a lot more out of them. The other one is doing the integration to us now, and hopefully, we start to see things from them in the near future. Certainly, everybody that we're talking to as being part of this reseller ecosystem we're looking to build certainly see the value, and the closer it is to paying, the more that they want to, they're interested in doing it. And if they can stop losses or potential fines because we did some research into what the fines could be in Canada's world, they can go up to $50,000 and potentially felonies for selling people underage, so that's something you got to make sure that you're not doing. So we're working really hard to make sure that we're identifying the right people. I think Bruce and the team are doing a good job on it and making initial introductions and talking to them and working out the rev share opportunity and how that will work. But once we get it in place, I think we should see significant uptick because they're already in. They've already got the clients. It's just a matter now of turning the switch because they're the software backbone for them. No other work has to be done other than what we've already did in the beginning of the relationship with the reseller. And kind of expanding on that point, Bryan, we've talked about the kind of companies that people think of as your typical competitors. So the Mitek, Jumio's, Onfido's, those kind of players. How do you view those? Do you view them more as competitors or more as potential partners where you can plug in and serve that first step of verifying the ID? If you think about so many of them, they're really platforms of other products that they bring in, right, in the same way that we are. We're a platform, and we bring in other products. I look at them, again, they do something entirely differently than we do. They could add that on if they want, if you want to add the OCR templating on top of what we do. I would say that given our accuracy, we're the best first step on anything. After it passes us, if you want to go do other checks and tests and things, you can. I view them as very much could be potential partners to us. If they're already in places and it's easier for the client for them to just digest us through one of those channels, I'm wide open to it. I'm all in favor of making it very easy for the client and stopping as many criminals as we can as fast as we can. So those kind of partnerships, I think, are very interesting. Got it. While online is growing as a percentage of the revenue, it's only 6% today. So your business is still, for the most part, largely predicated on retail foot traffic. And obviously, you saw the headwinds from that in 2020. How has foot traffic been trending so far in Q3? Has there been any second dip, or I guess at this point, a third or a fourth dip in the recovery from the Delta variant? Yeah. I'd say that throughout the entire thing, I think there's certainly a percentage of the population that's still afraid to go out shopping and do things like they did. I think there's a lot of people that are still going out and doing things. I would say that when the news gets a little scary, we certainly see a little bit of a dip. There's a lot more people wearing masks and things now than there were before. And that does, in my mind, impact what's going on. What I will say, though, is that even though foot traffic might be down, the people that are going out are going out to shop. So you're kind of slightly offsetting each other, but I would say that we're still not back pre-pandemic, but we continue to creep towards it. Got it. And then I guess when I look at the business, just at a high level, SaaS revenue grew over 100% in 2019. And obviously, that was off small numbers. But you still grew SaaS revenue 54% in a really tough 2020 with COVID. You've shown a lot of leverage in the model to date. But just at a high level, what kind of annual growth rate are you guys kind of targeting? And how should we think about what kind of further operating leverage you'll show from here? What's kind of the framework growth versus profitability that you're looking for? Yeah. The way that I look at this is we don't need legions of people to run it, right? I'm hiring salespeople because I see opportunity. We're spending money on marketing because we need to get our story out there. And we're hiring in engineering because I wanted to build our platform sort of bigger, better, stronger. But I don't see, other than adding salespeople, I don't see a lot of other expense coming into the equation. We don't give guidance on these things, but I can tell you this. I know where we've been growing. And having discussions with my head of sales, I don't look to expand the sales team almost 2x and grow at the same rate that we were. So I would say that either somebody's not going to get a job if we don't continue to increase the growth trajectory. I'm confident what I see in the pipeline, what I see the sales team doing, that we should continue to execute per person what we were doing. As I said, we had six salespeople before, three of them relatively junior, three senior, and we were growing at a pretty good clip with that. Now with a lot more senior salespeople, I would expect to see an increase in that growth rate. What's the total headcount on the sales team right now? What's the split senior versus? 11. 11. Got it. Got it. And is that eight senior, three junior? Yeah. Pretty much the way it is. Got it. Got it. Got it. And then I guess we got time for maybe just one more. When you look at the online digital channels, I guess, how is that? Are you seeing more digital-only use cases coming in? Or just how do you envision that growing as a percentage of revenue? What are the drivers that slice the business to grow? I think you're seeing on more and more websites Buy Now, Pay Later opportunities, and the credit card companies are putting in apply for the credit card and those types of things, so I think that that is growing, but I also think that it's some of the other areas that we're going to see it. Again, things like remote authentication for rental properties, the background checks. It's things probably a little bit farther away than just a traditional credit application, where I think we'll see more of that. That's where I'm very interested. Online gaming, those types of things are where I see a lot of digital opportunity. Got it. Good. We've come up on time. Bryan, Bill, it was a pleasure to have you guys. We'll go ahead and wrap it up here. Thanks, Rudy. Great. Thanks, guys.