Core Insights - Facephi's biometric technology has achieved Grade 1 certification in South Korea, validating its compliance with national software quality standards for public-sector procurement [1][2][5] - The Hancom Auth v1.1 platform utilizes Facephi's advanced facial recognition and passive liveness detection technology, enhancing identity verification security and user experience [3][4] - The certification underscores the strategic partnership between Facephi and Hancom, with Hancom holding exclusive licensing rights to Facephi's technology in the Asia-Pacific region [5][6] Company Overview - Facephi specializes in digital identity protection and verification, focusing on data security and integrity [6][7] - The company has over a decade of experience and operates in 30 countries, providing innovative solutions to address digital security challenges [7]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 increased to $5.1 million from $4.7 million in the prior year, representing a 10% growth [5][26] - Adjusted EBITDA improved by $145,000 year-over-year, reaching $75,000 for the quarter [5][26] - Cash at the end of the quarter was $8.6 million, an increase of $3.5 million from $5.1 million at the end of Q1 [5][29] - Gross profit margin was 89.8% for the quarter, down from 90.5% in the previous year, while adjusted gross margin improved to 92.2% from 91% [27][28] Business Line Data and Key Metrics Changes - SaaS revenue for Q2 2025 was up 10% to $5.08 million, accounting for over 99% of total revenue [27] - Retail revenue decreased by 20% year-over-year, contributing approximately 25% to total revenue, while banking and lending contributed about 38% [20][44] - Pricing power was evident with average price per scan and new business price per scan increasing by 25% and 36% respectively [10] Market Data and Key Metrics Changes - Banking sector showed a 12% increase quarter-over-quarter and an 85% increase year-over-year, offsetting the decline in retail [42] - Retail scan volumes were down 2% quarter-over-quarter and down 20% year-over-year [42][44] - Interest from banking and finance users increased by 79% on Google Analytics over Q1, indicating growing market interest [18] Company Strategy and Development Direction - The company is focusing on expanding relationships with major clients and entering new verticals such as title insurance and automotive [8][10] - A new channel manager has been appointed to enhance coverage in strategic verticals and drive revenue through existing partners [14][15] - The company is committed to modernizing its technology stack, having migrated approximately 95% of clients to the AWS platform, expecting annual savings of over $300,000 [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the banking sector's growth and the potential for retail to recover with anticipated interest rate cuts [42][59] - The company is addressing integration issues with a major social media client, emphasizing the importance of resolving these to unlock significant revenue potential [36][67] - Management highlighted the successful signing of multiyear renewal agreements with the four largest clients, indicating strong validation of the company's technology [71] Other Important Information - The company plans to participate in several upcoming conferences to raise visibility among investors and prospects [23][24] - A shelf registration filing is anticipated, allowing the company to sell shares efficiently if needed [30][31] Q&A Session Summary Question: Update on the Southeastern Regional Bank deal - The company started invoicing for the bank branches in July, and revenue from this deal is expected to be present for all of Q3 [35] Question: Timeline for resolution of social media client integration issues - The company is actively working with the client's engineering team to resolve issues, but no specific timeline for resolution was provided [36][40] Question: Retail scan volumes in the quarter - Retail was down 2% quarter-over-quarter and down 20% year-over-year, but banking growth has more than offset this decline [42] Question: Correlation of SaaS and total revenue with retail revenue - Retail revenue was down 20% year-over-year, contributing approximately 25% to total revenue [44] Question: Update on the sales pipeline and performance under new leadership - The sales pipeline is robust, with significant improvements in lead generation and marketing effectiveness noted [51]

Core Points - Comerica Bank is hosting its 16th annual Metro Detroit Shred Day on June 14, 2025, at its Great Lakes Campus, offering free document shredding and electronics recycling to the public [1][2] - The event aims to securely dispose of sensitive documents and electronics while also collecting non-perishable food donations for Gleaners Community Food Bank [3][10] Group 1: Event Details - The Shred Day will take place from 8 a.m. to 1 p.m. and is open to residents, small businesses, and nonprofit organizations [1][2] - Last year, over 1,100 vehicles participated, resulting in approximately 169,000 pounds of paper and 17,000 pounds of electronics being recycled [4][7] Group 2: Community Impact - The event not only focuses on fraud prevention but also contributes to sustainability and food security, with over 2,000 non-perishable food donations and approximately $4,500 in cash donations collected in 2024 [5][6] - In its 15-year history, the event has collected nearly 1.3 million pounds of shredded documents, significantly reducing environmental impact by generating 74% less air pollution and using 50% less water compared to traditional paper production [6][7] Group 3: Partnerships and Support - Comerica is partnering with Iron Mountain and Information Systems Resources to provide secure disposal services [3][4] - Gleaners Community Food Bank has been involved for 10 years, receiving over 17,000 pounds of food and approximately $23,000 in cash donations, resulting in over 95,000 meals provided [7][11]

Fraud & Identity Theft Problem - In 2024, U S fraud impacted 18 million people, costing $27 billion[9] - Account takeover fraud increased by 22%, reaching $16 billion[9] - New account creation accounted for 29% of identity misuse in 2024[9] - 79% of auto dealerships experienced identity fraud-related losses in the past year[9] Intellicheck Overview & Technology - Intellicheck authenticates close to 100 million documents annually in North America[16] - The company's SaaS solutions are used across various industries, both in-person and digitally[15] - Intellicheck works with 28 state-level law enforcement agencies for ID validation[16] - The company's technology validates IDs in less than one second[26] Financial Performance & Outlook - Q1 2025 saw 100% renewal rates with an ACV exceeding $10 million[21] - The company consistently maintains gross margins of 90%+[21] - Intellicheck anticipates positive Adjusted EBITDA for 2025[22] - Q4 2024 total revenue was $5,936,000, with SaaS revenue at $5,913,000[39] - Q4 2024 net income was $488,000 and Adjusted EBITDA was $860,000[39]

Financial Data and Key Metrics Changes - Fourth quarter revenues increased by 15% year-over-year, reaching a record $5,936,000 compared to $5,176,000 in Q4 2023 [31] - SaaS revenues for Q4 grew 17% quarter-over-quarter, totaling $5,900,000, while full-year SaaS revenues increased by 7% to $19,800,000 [8][32] - Adjusted EBITDA for the full year improved to a positive $520,000 compared to a loss of $377,000 in 2023 [39] Business Line Data and Key Metrics Changes - The automotive vertical saw significant growth, with volumes increasing by 2,500% year-over-year, while title insurance grew by 54% [9] - The company achieved a gross profit margin of 91% for both Q4 and the full year, down from 95% and 93% respectively in the prior year [33][37] - Operating expenses increased by 21% in Q4, totaling $4,928,000, primarily due to higher R&D costs [34] Market Data and Key Metrics Changes - Retail still represents approximately 75% of the company's scan volume, although transaction volumes in retail were down about 2.5% year-over-year [29][49] - The company is diversifying away from retail, focusing on verticals such as automotive and title insurance, which have higher transaction values [11][80] Company Strategy and Development Direction - The company is focused on vertical channel diversification and enhancing ID validation services, with a strong emphasis on technology solutions that outperform competitors [5][6] - Ongoing investments in IT initiatives, including a migration from Azure to AWS, are expected to improve efficiency and reduce costs [19][20] - The company aims to leverage marketing and customer service capabilities to enhance customer experience and drive growth [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth in the second half of 2025, driven by rollout schedules and proof of concepts [44][45] - The company is cautious about the retail environment, noting that consumer confidence and spending have declined, impacting transaction volumes [29][54] - Management anticipates continued improvements in adjusted EBITDA and gross margins, with a focus on maintaining operating expenses below revenue growth [41][60] Other Important Information - The company reported a GAAP loss of $918,000 for the full year, an improvement from a loss of $1,980,000 in 2023 [38] - The company has a $2,000,000 revolving credit facility with Citibank, which was not utilized during 2024 [39] Q&A Session Summary Question: Visibility on stronger back half of the year - Management indicated that visibility is based on rollout schedules and proof of concepts, with some delays due to IT integration [44][45] Question: Impact of macroeconomic conditions on sales - Management noted that sales conversations have not been disrupted, as fraud remains a consistent issue across industries [47][48] Question: Clarification on Q4 revenue strength and Q1 expectations - Management explained that Q4 strength was driven by non-retail sectors, while Q1 is expected to see a decline in retail transaction volumes [53][54] Question: Update on large social media customer - Management stated that procurement processes are ongoing, with testing completed and positive feedback received [58][59] Question: Future EBITDA expectations - Management expects continued improvement in EBITDA for 2025, with a focus on maintaining positive growth [60] Question: Sales team structure and focus - Management highlighted the addition of three new sales associates, emphasizing a consultative selling approach across various verticals [62][63] Question: Top priorities for 2025 - Management identified sales growth and enhancing customer success as top priorities for the year [64][66]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights the evolving fraud landscape post-pandemic, emphasizing the need for businesses to adapt to new fraud techniques and consumer behavior shifts [3][7] - Fraud continues to escalate across various channels, particularly in digital and automated transactions, indicating a growing threat to ecommerce and retail sectors [15][48] - The financial and operational impacts of fraud extend beyond direct losses, affecting customer retention and increasing compliance burdens [16][68] Summary by Sections Section 1: Customer Experience - Managing customer friction is critical for fraud prevention success, as excessive measures can lead to increased customer churn [14][25] - 62% of U.S. ecommerce businesses and 53% of Canadian ecommerce businesses report increased customer churn due to fraud prevention measures [25][32] - Improving customer trust and loyalty through seamless experiences is a top priority for U.S. ecommerce (28%) and Canadian retail (43%) [27][42] Section 2: Fraud Attacks - Synthetic identity fraud is a growing concern, accounting for around 30% of fraud losses in U.S. businesses during new account creation [48][55] - Purchase transactions are the primary target for fraud, with identity-related fraud accounting for 45% of cases in U.S. ecommerce [49][51] - Malicious bot activity is on the rise, with over one-third of businesses reporting increased attacks in the past year [50][62] Section 3: Merchant Losses - The LexisNexis Fraud Multiplier indicates that every dollar lost to fraud costs U.S. merchants $4.61 and Canadian merchants $4.52, highlighting the extensive impact of fraud [73][68] - Fraud costs are concentrated in purchase transactions, with U.S. ecommerce reporting the highest percentage at 49% [69][70] - Mobile transactions contribute significantly to fraud costs, with U.S. ecommerce seeing a combined 30% share [80][83] Section 4: Obstacles - Identity verification remains a top challenge across all key stages, with businesses struggling to authenticate legitimate users while preventing fraud [92][96] - Many businesses express optimism about future fraud detection improvements, but this may overlook evolving fraud tactics [103][105] - Organizations are cautious about increasing fraud prevention budgets, with many expecting to maintain current levels [107][108]