Thank you, operator. Good afternoon and thank you for joining us today for the Intellicheck Third Quarter 2022 Earnings Call. Before we get started, I will take a few minutes to read the forward-looking statement. Certain statements in this conference call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. When used in this conference call words such as will, believe, expect, anticipate, encourage and similar expressions as they relate to the company or its management as well as assumptions made by and information currently available to the company's management, identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs about future events. As of any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances and the company undertakes no obligation to and expressly disclaims any obligation to update or alter its forward-looking statements whether resulting from such changes, new information, subsequent events or otherwise. Additional information concerning forward-looking statements is contained under the headings of Safe Harbor Statement and Risk Factors listed from time to time in the company's filings with the Securities and Exchange Commission. Statements made on today's call are as of today, November 14, 2022. Management will use the financial term adjusted EBITDA in today's call. Please refer to the company's press release issued this afternoon for further definition, reconciliation and context for the use of this term. We'll begin today's call with Bryan Lewis, Intellicheck's Chief Executive Officer; and then Jeff Ishmael, Intellicheck's Chief Financial Officer, who will discuss the Q3 2022 financial results. Following their prepared remarks, we will take questions from our analysts and institutional investors. Today's call will be limited to 1 hour. And I will now turn the call over to Bryan.

Thank you, Gar and welcome, everyone, to the third quarter 2022 Intellicheck earnings call. A couple of things to note for the numbers that we believe show that we are on the right track. First, we continue to grow with SaaS revenues up 22% over the same period a year ago. As you will hear, we continue to expand within our existing clients and we are growing customers across many use cases. And note that our gross margins remained very healthy at greater than 90%. Second, I think a concern many had that we would need to raise money to fund operations. That is not the case. Adjusted EBITDA for Q3 was a positive $75,000 compared to a negative $272,000 for the same period last year and a negative $583,000 last quarter. There are 2 things I've said many times and I stand by what I told you before, that is we see no need to raise money for working capital and we do not need legions of people to run the company or handle explosive growth. The only primary areas where I see continued increases in spending are sales and marketing and those increases should create increased growth. We'll be watching those expenses closely and aligning hiring and spending with growth. Before I get into some of the wins of the quarter, I want to remind everyone of the magnitude of the problem we are solving. I think it gives insight as to why our customers continue to expand usage and why we are seeing new prospects coming to us with growing frequency. In 2021, traditional identity theft grew 79%, with losses almost doubling over 2020 to $24 billion. The mean fraud amount loss each time increased $200 to $1,551 and that's up $500 since I started in 2018. And if you were one of the 15.3 million Americans who were hit by this crime, it cost you on average 9 hours of your life and $224 to clear your name. Account takeover fraud is the fastest-growing fraud because the bad guys found it is a much larger haul each time at a mean fraud amount of $2,169. Total takeover account fraud grew 90% to $11.4 billion. And unfortunately, if you were the victim of that crime, it cost 14 hours of your life and $515. For our clients and prospects, it is important to stop these crimes in the most simple, frictionless way possible. If they don't, not only do they suffer the monetary losses but they potentially lose a customer and their lifetime value. Studies show that up to one-third of people will move their banking relationship if their identity is stolen. Our clients and prospects need something that is accurate and fast and that is Intellicheck. I believe the fact that 26 state-level law enforcement agencies use our services to validate an ID is proof of our accuracy. And as to speed, we determine the validity of a license in 44 milliseconds. To put that in context, that's less than half the time it takes to blink. The other distinction I would like to remind everyone of is that Intellicheck's technology solutions require no new hardware. Unlike the companies that use a photo of the document to compare to a template, we work with the existing scanning devices at retail locations and the check readers at the teller workstations. At the same time, our APIs make it easy to integrate into any traditional brick-and-mortar system as well as any mobile app or website. We believe that it's quite the competitive advantage when every study shows that the vast majority of transactions still happen in person. A BusinessWeek article recently said, research from UBS shows that online shopping is back to pre-pandemic levels, so down. And data from the U.S. Census Bureau showed that online growth has trailed sales gains of the overall retail industry for the last 5 quarters. So moving on to highlights of the quarter. I am happy to say that financial services company number 3 completed their renewal and signed a 3-year term that includes a price increase and a commitment to a minimum of a 20% increase in transactions in the first year of the contract. Currently, this client does not do anything in the digital world but in addition to expanded usage on-premise, they intend to open digital channels in 2023. This leads me to believe that the larger increase in volume will be towards the back half of the year. Number 3 continues to be one of our best reference clients and I believe this 3-year renewal with a contractually committed increase in volume tells you the certainty they have in our products. Financial services company number 4 has seen a 67% increase in transaction volumes. This is coming from multiple areas. They continue to bring live retailers. They are winning from competitors which is increasing volume. They also have our technology solution now completely integrated call center software and call centers are a large vector for account takeover fraud, so we see continued usage there. We have also completed the renewal with a large Midwestern bank client with over 1,100 branches in 10 states, again, with the price increase. I was recently on a quarterly business review with this account and they spoke of the large amount of bot attacks they are seeing, aiming at account takeover. And they said, they are a nightmare for any company without accurate ID validation. The bank also said, they consider themselves a data-hungry organization. I shared that with you in light of the fact that they have just completed the migration to the new platform. So they are very interested in and are evaluating all the new signals they have access to. Remember, the first step in proper AML process is to make sure that it is, in fact, Bryan Lewis and then make sure I can and want to do business with Bryan Lewis. That is what the platform allows our clients to now do. Last quarter, we spoke about the omnichannel multi-biometric platform for banks, marketplaces and health care systems that is reselling our ID validation tools. They started with us in January of this year and purchased a bucket of 500,000 transactions which they had to replenish when we last spoke. They have since gone through that bucket and are purchasing another. On the automotive front, in addition to receiving multiple inbound leads and closing those, we've signed an agreement with a reseller working with the CRM and sales engagement software provider to the automotive space. Their software has been used over 1,000 dealerships and they feel confident that most, if not all, of those dealerships will be interested in the software. An important upsell opportunity to the existing and new auto dealership clients are those same AML signals that let me know if I can and want to do business with a person. Dealerships have told us this data is important to them. Most of them, though, were using our portal product on a handheld device for our portal plus web product which allows them to validate a person whether they're standing in front of them or thousands of miles away. We have now incorporated these signals into these products. So these dealerships now have access to another great opportunity for their sales teams. On the age-restricted front, a couple of new unique sales. We are now live with 2 companies that distribute vending machines for the sale of cannabis products. When someone wants to make a purchase, they scan a QR code which kicks off the ID validation and facial biometrics process to make sure that not only is the license real but I am holding it before the product can be dispensed. They have just begun distribution of the machine, so it will be interesting to see volumes going forward. I'd also like to say, we are now live with a nationwide consumer goods, food, and age-restricted delivery company that operates in 650 cities. Our validation tools are integrated into their delivery driver mobile app for checking on age-restricted deliveries. They've rolled out for testing purposes to 1 Northeast city but anticipate a nationwide rollout in 2023. At the same time, we are coming out with new products, particularly around data. At the end of the quarter, we introduced business intelligence. This is a tool our clients can use to dive into the patterns and usage trends of their transaction data. This is sold as an annual subscription with annual seat license fees by user. We've already made the first sale of it to the media company using us for email password resets and we are encouraged by what we are seeing in client interest. Currently, it is just each client's own data that we believe and our clients seem to agree that pooling anonymized community data for comparison purposes is worth even more and we plan to release that in 2023. The 2 regional bank prospects we spoke about last call are going well. We are working through the master services agreements with both and the top 3 banks continue to slowly move through their process. I'm also pleased to report that the reboot of the sales team is going exceptionally well. We now have 6 senior salespeople, all of whom come from identity or cybersecurity sales focusing on financial services and AML, KYC use cases. In addition, we have 3 senior account managers focusing on expanding our footprint at existing clients. While these existing clients all continue to grow, we feel those accounts should grow even faster and we believe dedicated resources will make that happen. Another area we are strengthening involves inbound leads. We have 2 hungry, motivated people handling those inbound leads which marketing continues to do a great job of bringing in. Our expanded focus on efficiencies has included a great deal of efforts spent on automating all of our processes for scale, many of which Jeff will speak about in just a few minutes. On another front, we've taken another step toward including machine learning in our systems to detect fraud pattern attempts. Again, here is an opportunity to provide data that we think will be valuable to our clients and we will be including it in Business Intelligence core fee. Sales operations are also providing insight and accountability to our processes which is a valuable step forward. Finally, we have some new certifications that are important to our clients. We are now SOC 2 Type 2 and we have received word that we have verbal confirmation that we will be receiving ISO 27001 and 27701 certification. The latitude certifications are very important as they are the first steps to compliance which is key for international client base expansion. In closing, you can see that a lot is happening here at Intellicheck as we make important strides forward with continued existing growth, the introduction of new products and the addition of new people to further our progress. This is just the beginning. We have been setting the stage for what we believe will be even greater growth and innovation in the future. I will now turn it over to Jeff.

Thank you, Bryan. Turning now to our third quarter results. Revenue for the third quarter of 2022 declined $819,000 or 17% to $4.12 million compared to $4.831 million in the same period of 2021. Last year's third quarter revenue included $1.5 million of nonrecurring hardware sales. Our SaaS revenue for the third quarter of 2022 grew $725,000 or 22% to $3.970 million from $3.245 million for the same period in 2021. Gross profit as a percentage of revenues was 91.1% for the third quarter of 2022 compared to 68.7% for the same period of 2021. The increase in gross profit percentage was primarily driven by significantly lower equipment sales for the third quarter this year versus last year. Operating expenses which consist of selling, general and administrative, marketing and research and development expenses increased $32,000 or 1% to $4.378 million in the third quarter of 2022 compared to $4.346 million for the same period of 2021. This increase is primarily driven by higher recruiting and professional fees as well as higher marketing and advertising expenses. Included within operating expenses for the third quarter of 2022 and 2021 were $729,000 and $712,000, respectively, of noncash equity compensation expense. The company reported a net loss of $724,000 for the third quarter of 2022 compared to the net loss of $1.26 million for the same period of 2021. The net loss per diluted share for the third quarter of 2022 was $0.04 compared to the net loss per diluted share of $0.06 for the same period of 2021. The weighted average diluted common shares were 18.9 million for the third quarter of 2022 compared to 18.6 million for the same period of 2021. Adjusted EBITDA for the third quarter of 2022 was a gain of $75,000 compared to a loss of $272,000 for the same period of 2021. Turning to the company's liquidity and capital resources, as of September 30, 2022, the company had cash of $11.8 million. Working capital, defined as current assets minus current liabilities, of $9.2 million. Total assets of $24.1 million and stockholders' equity of $18.3 million. The company has a $2 million revolving credit facility with Citibank that is secured by collateral accounts. There are no amounts outstanding under this facility. As of September 30, 2022, we had a net operating loss carryforward of approximately $23.4 million. It has been an exciting first 5-plus months at Intellicheck. One of my objectives after taking the CFO role was to streamline the financial processes and procedures and improve our reporting so that we can operate the business with real-time data to guide our decisions. Things move fast in our industry and we need to adapt quickly to these changes. We believe that we're close to regaining the momentum we had prior to COVID and need to be properly positioned with the right platforms in place to scale the business quickly. Let me share with you a few internal initiatives that were accomplished during the third quarter. One of our larger initiatives was to implement a robust equity management platform and I'm excited to say that this is done. The platform utilizes cloud-based technology developed by a leading global fintech company and is deployed across more than 100 countries. This new platform offers a full suite of services ranging from capital management to full equity program management as well as brokerage services. This new equity platform replaces previous internal and manual processes. In further support of increasing our internal efficiencies, we have also brought automation to our previously manual financial reporting processes. This platform will improve and support our statutory reporting requirements and allow us to operate with much more efficiency. Our chosen partner has 19 offices globally and more than 5,300 customers. We have also made some changes on the auditor front. During the third quarter, we welcomed Fortis as our new audit and tax partner among the top 10 public accounting firms. Fortis has 5,500 dedicated professionals serving clients across all 50 states. Over the last 12 weeks, we have deployed best-of-breed platforms and vendor selections that will allow the sales and executive teams to focus on driving future revenue growth which we believe has been hampered by a collection of manual processes. My commitment to Bryan, when I joined the company, was to address these legacy processes and to provide the highest quality data and metric reporting that we believe will position the team to drive growth and operate more efficiently. We believe that we are much better positioned than we were months ago to scale this business to new levels and drive shareholder value. I'll now turn the call over to the operator to take your questions.

First one, Bryan, I was hoping that you might be able to talk a little bit about the retail environment. A lot of talk about consumers pulling back in light of some heightened economic uncertainty. I'm wondering if you guys are seeing any of that as we move into the stronger fourth quarter.

So far, when I go back and compare numbers other than for some retailers that are having just certain overall issues, I'm not seeing a big pullback of any sort. And we generally can see that basically in real time as we did with COVID. Opening and closing, we get the numbers in real time. So we can see that. So not good so far, not yet.

Okay. And can you remind us how much of that legacy business makes up of total revenue?

Card applications and card-not-present transactions account for the majority of retail. It used to be in the upper 90s percentage-wise, but it's likely a bit lower now since many banks are utilizing our services at the teller workstation. This has been a significant growth driver, but it still represents the bulk of our revenue.

Okay. That's helpful. My second question is about the positive adjusted EBITDA this quarter. How should we approach business management going forward? Are we aiming for breakeven, or how are you balancing the need for additional growth investments with maintaining that positive EBITDA?

Yes. The good thing about sort of investing in that additional growth, it's not a lot of money to invest. It's really advertising and people. So managing to breakeven, slightly positive as we flesh out the sales team that I think that we need to be able to make sure that we're hitting all the verticals that we should be in. I think one of the really good things that we've done is, our salespeople are now focused on a vertical which means they understand the business and speak the language. And there are different verticals like automotive. Again, I think we're doing so well there. If we had people focused purely on automotive, from that industry, we do better. So that's how we're looking at additional spend, smart verticals, right people to speak the language and the right advertising to go after it.

On the price increases, both with, I think, Fiserv number 3 and 1 of the Midwest banks. Do those come in, in line with the past price increases that you said were low double-digit? And then secondly, on Fiserv 3, I want to be clear, you said they're committing to a 20% increase in transactions in the first year of that new contract. When did that contract renew? And so the 20% increase in transactions, I guess, as we think about the revenue increase, it would be the 20% increase in transactions plus the price increase. I want to make sure I'm understanding that right as well.

Yes. A couple of things on that. This is a contractual commitment to do more. We exchanged a slight increase for the contractual commitment, as they will either fulfill their obligations or compensate us at the end of the year if they fall short. The way to perceive these price increases during renewals is that we are aligning clients closer to market pricing. Some of the agreements that were established prior to my arrival were at much lower rates, resulting in significant price increases. Going forward, we can expect more standard EPI-type adjustments for most of our clients since virtually everyone is now aligned with market pricing.

Got it. And then as we think about Q4, as you sit here kind of halfway through the quarter, is there any kind of bound you could point us to for Q4 as it relates to kind of a more typical seasonality in Q4 as you get back to a more normal in-person Black Friday relative to maybe the last year or 2 or pre-COVID, what kind of seasonality should we expect in Q4 versus Q3?

Yes. If we look at our main clients, they seem to be getting back to where they were pre-COVID. And typically, in a normal year across all of the retailers, we get about 43% of all transactions would come in Q4 and 23% in Q2 and Q3 and 21% in Q1. So it appears, it's feeling like the world has gotten kind of back to where it was. So that, I think, is about where we should be.

Got it. And then just on the new sales reps. I know you had hired a handful that started just recently. Maybe it's a bit too early, maybe not. But just how are they ramping relative to expectations? And I guess, more importantly, how are they ramping relative to the past reps who you had hired over the last year or 2 and didn't work out?

I think that they're ramping a lot faster. Chris actually had an off-site with his team and they did a lot of training. One of the things I think that we did differently was, how we went about hiring the people and making sure we've got people with industry knowledge which makes it so that, one, the ramp is a lot quicker. You're not explaining the industry to them. Two, they all came here knowing that they would make less money than they did last year because they all had pipelines and everything but the opportunities they saw made them want to come. So that's, I think, a very exciting thing. And between the training program that Chris has put together and is working with them on their industry knowledge, I'd say that they're ramping faster.

Got it. And then just last for Jeff. How should we think about the normalized operating expense run rate from here? You decreased by about $400,000 on GAAP from Q2 to Q3 and a bit more on non-GAAP. What should be the appropriate operating expense run rate we use for Q4 going forward?

Yes, Bryan and I have discussed operational expenses extensively. We aim to be more efficient in how we allocate that spending, and we plan to closely monitor it moving forward. While we expect to increase spending as we expand our sales and marketing teams, we will strive to keep it within a similar percentage range.

This is Luke on for Mike. I just wanted to start with the new products and use cases and expanded digital applications which you guys had mentioned in the press release and touched on earlier with the business intelligence. But I was just wondering if you could expand a little more on this or give a little more color as to the types of products, use cases and how this is expanding digital applications. And just any color there would be helpful.

Yes. If you consider the drivers, mobile apps for age-restricted delivery are now utilizing our APIs and SDKs, and our banking clients have integrated us into their standard applications. One major client noted that 2023 will be a significant digital year for them, encompassing everything from their retailers' websites to their online banking tools. It's important to understand that we are continually growing in the digital space, but our growth in the on-premise sector is even more robust, as it is outpacing digital growth for many applications similar to ours. Our products are effective, and we have a substantial number of clients using them, with digital usage increasing every quarter.

Got it. That's helpful. And then I just want to touch on those 2 southern banks that I think you guys mentioned were supposed to be impacted in 3Q. I think last call, you mentioned one of them actually finished the pilot but was waiting for some software updates to the teller workstation and then the other was going through an InfoSec review. Any updates to call out there?

Both banks are currently finalizing their contracts. I spoke with Chris just a few hours ago, and they aim to be operational in early Q1. We are making a significant effort to support this process. Both banks are progressing very well and are satisfied with everything we've reviewed and tested. Now it's just about finalizing the details for the master securities agreement with the bank.

This is Daniel on for Jeff. Just first off, just looking at the billings is kind of looking at how we calculate that. Looks like it's down year-over-year. I'm just wondering about your satisfaction with the bookings and whether or not that's meeting your expectations in terms of ramp and how the sales reps are doing.

The SaaS revenue has increased, which is encouraging. We made two significant hardware purchases last year over two quarters to help client number three roll out to teller workstations more quickly since they already had a Master Services Agreement with us. They needed to negotiate on their end, but we anticipated a lengthy process based on past experiences with the bank. This situation may distort our overall picture. Additionally, we experienced a reduction in our sales team, which was not progressing quickly enough. Fortunately, we maintained a strong pipeline thanks to the skilled individuals we retained. Our clients continue to discover new use cases while our sales team is in training. The new sales team doesn't need to be experts, just capable of securing meetings, as our team, including myself and Chris, can join the calls to support them. This strategy allows us to focus on individuals with established connections in the industry since everyone is eager for meetings, and they can learn from our discussions during those calls.

Okay. And then you mentioned the pipeline. Just any color on the pipeline and how that's changed over the last 3 months?

I believe the primary change has been the introduction of new verticals. This is often due to some of the existing team members we brought in, who previously sold significant deals at our competitors. They are now reaching out to those clients and addressing past issues, which is helping us tap into new markets. However, our primary focus remains on preventing identity theft within financial services, as this area presents immediate loss mitigation opportunities. Other areas are beneficial, but for age-restricted products, the law simply requires verifying a license without needing in-depth validation. We aim to ensure that partners, like the delivery service we are collaborating with, adhere to proper practices and exceed expectations. It is typically more effective to alleviate pain points, and we have reference clients that all our competitors would desire, giving us a distinct advantage that we will continue to pursue.

We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing comments.

So I'd just like to thank everybody for attending. As always, all of us here at Intellicheck are excited about what we're doing, what we're stopping. The crime we stopped, the pain we stopped the banks and the victims from going to and we continue to do it. We've got a great team in place and I look forward to speaking to you all in the next call.

Thank you. This does conclude today's conference. You may disconnect your lines at this time and thank you for your participation.