Thank you, operator. Good afternoon, and thank you for joining us today for the Intellicheck First Quarter 2023 Earnings Call. Before we get started, I will take a few minutes to read the forward-looking statements. 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 with 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, May 9, 2023. 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 will 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 Q1 2023 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 Q1 2023 Earnings Call. As you saw from the earnings release, total revenue was $4.25 million, up 25% year-over-year, and SaaS revenue was $4.22 million, up 26% year-over-year. As expected, this is down 5% from Q4 2022 when our retail store revenue is typically sequenced down given the seasonality of the peak holiday shopping season. The fact that we are down less sequentially than we have been historically illustrates that we are delivering on an increasingly diversified client base, which I will be speaking about later. Adjusted EBITDA was a negative $556,000, down from a negative $807,000 in Q1 2022. As I've said on previous calls, we will be watching expenses very closely this year with the continued focus of getting back to EBITDA breakeven over time. Our top line revenues continue to grow, and I'm happy to say that our trailing 12-month SaaS revenues have increased each month for the past 39 months. In looking at the numbers, we're going to first look at the importance of the growing diversity of our client base, which is a primary growth brokerage for us and what we are seeing year-over-year with the existing and new customers across some of our major verticals. Overall, apparel stores are down 3% versus Q1 of 2022. Most of that is driven by a few retailers that I'm sure you're hearing about in the media. As you have no doubt heard, some are down as much as 30%. That has largely been offset, however, by apparel retailers that we added throughout the year and with those, who are not fully implemented in Q1 last year. Furniture is down 7% for the period comparison. It's important to recognize, however, that since these tend to be low-volume accounts, it is better for us to charge a fixed fee each month per location, so the decline does not have a significant impact on revenue. Turning to verticals where we saw growth. Cosmetics and beauty products were up 3% versus Q1 2022 as this space continues to perform well post pandemic. Automotive volumes more than doubled versus Q1 2022 and are up 117%. Revenue from a leading reseller partner in this space was up 93% for the same period comparison, and we are in discussions with them to find ways to work even more closely together as this has been a fruitful partnership for both companies. Banking and lending, which include use cases like teller workstation, online and mobile apps, call centers and buy now pay later, were up 40% versus Q1 2022. As I said on the last call, we're getting a lot of interest from title companies. In this last quarter, we signed over a dozen title companies, including a cash flow solutions provider, who will be acting as a reseller in this space. Resellers will continue to be a large focus for our growth efforts going forward. I should also point out that we continue to see strong inbound leads and interest in the title space that has also benefited from referrals from other users. Now a few updates on some of our pilot programs. Unfortunately, the regional banking pilots were delayed. That isn't surprising given all that's going on in that space currently. The 1,400 location bank looking to do the 3-month pilot with our products integrated into their bank system was not able to roll out the software update from their scanning vendor into their tech scanners for the date they initially targeted causing the delay. However, I think the delay will actually prove our worth much more quickly. We have planned on updating the software in just a few branches, turning them into a much broader solution to stop fraud attacks. The second regional bank with the 2,700 locations and a 30-day proof of concept had wanted to begin their pilot in April, but it will be delayed until the middle of May. A couple of reminders on renewal. We renewed the 2,700 location retailer to a new 2-year effective February 1 with a 20% price increase each year. And remember, financial services company #3 renewed for a guaranteed increase in volume of 20% and a price increase that was effective January 1 of this year. Also during the quarter, the omnichannel multi biometric platform for banks, marketplaces and health care systems, reselling our core ID validation products more than doubled their commitment to us. Given current transaction volumes, it appears they will use that prepaid bucket well before year-end. There are a few other new wins that also demonstrate the growing diversity of the client base. In the financial services space, we signed a financial services provider headquartered in the Northwest with branches in 5 states and 1 Canadian province. This company offers payday loans, installment loans, prepaid debit cards and money orders, amongst other financial services. They will be using our direct product to initially validate people applying to open an account online with the intent to bring us in-store at a later date. In the automotive space, we signed a customer experience, which is really so much of car buying today. They are working with a very large automotive manufacturer with 2,700 dealerships and have incorporated Intellicheck into their system to check IDs, both in-person and online. They started a pilot with 11 stores and have already caught fake licenses as we knew they would. So they are very excited about the success so far. We continue to sign with big concession companies for the hospitality space at sports and concert venues. We just added another construction company serving a big temp school in the Midwest with over 75,000 feet in its football stadium alone. Our speed and accuracy were the big winners here. The last thing they wanted were long lines for the concession stand or kids being served, who are underage. As I said earlier, we signed up over a dozen new title companies. This is in addition to over 20 bars and restaurant groups, multiple cannabis dispensaries, multiple tobacco and vape sellers, multiple auto dealerships and 2 small auto rental companies. Also of note on the last call, I spoke about our completion rates. That is the percentage of time we can render decisions on the license. It continued in Q1 at the exceptionally high rate of 99.25% of the time. This is important because it underscores our ability to deliver results over 99% of the time. These are standout numbers that we believe distinguish our technology solutions from competitors. I believe the word is getting out that we are different and we are clearly better. Our speed, accuracy, the benefit of no need for new hardware or no need for human intervention are all major differentiators that people are beginning to notice. As the sales show, we can close the larger long-cycle financial institutions while, at the same time, closing the smaller and midsized deals, increasing SaaS revenue each month. We continue to penetrate new markets. And given the amount of clients we are signing, who are either only in the digital market or choosing to start there and then move in-store substantiates that we are not just the brick-and-mortar services provider. I said this last call and nothing about it has changed since then. It’s an irrefutable fact that identity theft and identity fraud continue to spiral. As bad actors continue to expand their efforts at every turn, there is no question that what we do is becoming increasingly more necessary. At the same time, we recognize our customers and prospects want to realize 2 key value-adds. They want to improve their process and make it easier for them to gain new clients. At the same time, they are making sure they are not victims of fraud or doing business with people that they shouldn't. We believe, and my sense is that our clients would agree, that nobody does that better than Intellicheck, both in person and digitally. With that, I will turn it over to Jeff for some details on the financials.

Thank you, Bryan. I'm pleased with the continued progress that we have been making since I joined Intellicheck a year ago. Our first quarter SaaS revenue saw growth across our top accounts versus the prior year, continuing to report a higher average price per scan versus the prior year, and we continued the diversification of our business while decreasing the revenue concentration among our top accounts. As Bryan mentioned earlier, we're pleased to see the continued trailing 12-month growth progression in SaaS revenues each month, which has been achieved consecutively for the last 39 months. As we have discussed previously, to drive sales, we are shifting our expense focus to have a greater emphasis on SG&A, specifically our investment in sales and marketing. We are also maintaining our focus on our operating expenses to ensure that we achieve the expected return on our investments in this area. We believe that these efforts will drive increases in our effective price per scan, which, for the last 2 quarters, has increased on a year-over-year basis. This is especially encouraging as it speaks to the testament of value realized by our customers. We also have a focus on ensuring that renewals across the entire customer landscape are including annualized CPI increases or that we continue the rightsizing of legacy customers that are entering renewal periods. Turning now to our first quarter results. Revenue for the first quarter of 2023 increased 25% to a record $4.254 million, compared to $3.395 million in the same period of 2022. Our SaaS revenue for the first quarter of 2023 grew 26% to $4.228 million from $3.353 million during the same period of 2022. Gross profit as a percentage of revenues was 92.2% for the first quarter of 2023, compared to 90.7% for the same period of 2022. The increase was driven by a higher concentration of SaaS revenues, a nominal decrease in hardware revenue as well as an improved cloud cost structure. Operating expenses, which consist of selling, general and administrative, marketing and research and development expenses increased $685,000 or 15% from $5.232 million for the first quarter of 2023, compared to $4.547 million for the same period of 2022. This increase was primarily driven by higher general or administrative costs, specifically headcount-related expenses, as well as higher accounting and professional fees in part related to the prior restatement. Included within operating expenses for the first quarter of 2023 and 2022 were $682,000 and $592,000, respectively, of noncash equity compensation expense. It's worth noting that the current quarter noncash equity compensation figure was negatively impacted by a mark-to-market liability adjustment for certain equity awards that was approximately $40,000. With respect to our overall operating expenses, we made additional investments in our systems that we believe are now largely complete, enhanced our internal control processes, including SaaS readiness during the first quarter and incurred additional expenses tied to our full-year audit work, which are confined in the first quarter period. We do not anticipate that a continuation of these costs will impact our results going forward. The company reported a net loss of $1.316 million for the first quarter of 2023, compared to a net loss of $1.468 million for the same period of 2022. The net loss per diluted share for the first quarter of 2023 was $0.07, compared to the net loss per diluted share of $0.08 for the same period of 2022. The weighted average diluted common shares were 19.1 million for the first quarter of 2023, compared to 18.7 million for the same period of 2022. Adjusted EBITDA for the first quarter of 2023 improved by $251,000 or 31%, resulting in a loss of $556,000, compared to a loss of $807,000 for the same period of 2022. Turning to the company's liquidity and capital resources. As of March 31, 2023, the company had cash and short-term investments in the form of U.S. treasuries that totaled $10.2 million that is currently on deposit at Citibank and Capital One. Working capital, defined as current assets minus current liabilities of $8.8 million, total assets of $23.6 million and stockholders' equity of $17.8 million. The company has a $2 million revolving credit facility with Citibank that was secured by collateral accounts. There are no amounts outstanding under this facility, and the facility was not utilized during the quarter. As of March 31, 2023, we had net operating loss carryforwards of approximately $20.3 million. Our first quarter continued to maintain a focus on improving our operational effectiveness and ensuring that we have the proper foundation in place to concentrate on revenue and the path towards being EBITDA positive while continuing to invest in the business. We also continue to build out revenue and performance reporting to closely monitor the transactional health of our key customers and the key industries that we're targeting and serving. The focus will continue to be on driving revenue productivity across our key customers and ensuring that our sales team has the proper data and support they need. We have further improved our reporting capabilities to effectively track our entire quote-to-cash process from the initial recording of the marketing qualified lead through qualification by the sales department to a final closed one stage and tracking the effectiveness of our increased marketing investment. We intend to continue improving our performance in this area and ensure investments are yielding the expected results. As we continue to improve our corporate performance, we anticipate that we will see growth in our trailing 12-month revenues, growth in our price per transaction, improvement of our SQL and CAT costs and that we will shorten the ROI window for the smaller accounts that we are onboarding. We've made a very material shift in our spend towards sales and marketing and need to ensure that we realize the expected return. We look forward to sharing our Q2 '23 results in August.

Our first question is coming from Scott Buck from H.C. Wainwright.

First one, Bryan, when considering the legacy business in the store-branded card space, there are only a few players that dominate that market. As we look beyond that to some of the new verticals, are we simply aiming for small wins, or do we see significant potential customers that could really drive growth?

Outside the credit card space, is that what you're asking? Yes, I believe there are some significant opportunities. This is why I am concentrating on resellers, as there are major players who dominate various markets. Partnering with them, where identity validation is essential, is logical because it enhances their product. Our product aligns with the needs of their clients. They are motivated to sell it. I view this as a path to enter specific markets. I previously mentioned automotive, and I see it as a way to penetrate the title sector as well. There are numerous areas where the right partner could present a substantial opportunity.

Great. That's helpful. And then I wanted to ask, the progress you're making in some of those new verticals, how much credit do you give to the changes in the sales staff you made in 2022? And I'm just kind of curious how those guys are all coming along?

I believe they have opened up opportunities for us in various areas and connected us with companies that are promoting our services, like the Tennessee title initiative that sent out a letter to 500 title companies. They are definitely making progress. We are noticing this, especially with the smaller and midsized deals, which help increase revenue, while also managing the more challenging long-term contracts with the larger banks. Overall, I am satisfied with the performance of the sales team. Chris is very detail-oriented and continually seeks improvements. So far, everything looks positive.

Great. And then last one for me. I'm just curious if you're seeing any change in sales cycles, I guess, outside of banking because of the obvious issues in that space?

Outside of banking, no. I mean, those sales cycles are pretty good, again, especially when you're talking, what I'd say, midsized deals. Generally, you're not going through the same type of InfoSec scrutiny, so it's a lot easier to do. And also some of those sales that are pretty profitable for us have fairly high volume, making use of our no-integration products. So it means we can get them up and running immediately. So I think a combination of new markets that realize they have a need that they didn't know before, like title, and we realize they need something in very quickly because one mistake can be very painful. You add on top of that the fact that we've got tools to get them up and running. We can get them set up the same day; I think really helps speed that cycle up.

Congrats on the results.

Thanks, Scott.

Our next question is coming from Rudy Kessinger from D.A. Davidson.

This is an analyst on for Rudy. Congratulations on the impressive results. My first question is regarding the transition from Q4 to Q1. This appears to be the smallest sequential decline in the last four years, and tax growth increased by 20% year-over-year last quarter compared to 26% year-over-year for the next quarter. That's encouraging to observe. I'm interested in understanding what the main driver of growth was—whether it was new business acquired during the quarter or higher-than-anticipated usage from existing customers in Q1.

A lot of it had to do with new business, which I attribute to several factors. I consider new business to include resellers acquiring new clients, particularly with our multichannel partner who operates in sectors we haven't traditionally been involved in. Additionally, we continue to maintain pricing power, with note-worthy price increases from both the retailer we mentioned on the call and from financial services #3. There’s also significant growth in small and medium-sized deals. Even though each individual deal, such as those from bars and restaurants, may not seem large, their cumulative effect monthly really adds up. So, it's a blend of all these elements, and I believe we will keep seeing this trend. As our sales team becomes more experienced, I anticipate we will see even more new business coming in.

Got it. And then I guess on that point, adds to the sales reps are ramping, I guess, when should we expect them to be fully productive? And what are your sales hiring plans for the rest of the year?

I will say that finding a great salesperson is like finding a bag of gold, and I will pick it up immediately. And so we're always looking for opportunistic hiring. So if we find the right people, we're going to hire them. I know that Chris is always interviewing. It's just part of what he does to make sure that we have the right people. I think that certainly, we've got some salespeople that are much farther along the curve than others. So it's something that we're always looking at. I think it also depends on what verticals we've been chasing after. So we're always making sure that they're selling to their strengths. In a way, it's hard to always say when and where every single person is going to hit their full stride. But what I'm happy to see is that we've got a lot of them who are really showing a lot of capability. They're getting us into meetings and accounts, and that's all that we really need. If they can get those first meetings, we can get things moving. And we're getting to the point now where I'm seeing the first meetings and the new prospects coming in the door, and they all look very good.

Got it. Yes, that all makes sense. And then last one for me, just in terms of your broader hiring plans for the company as a whole, what would you say your expectations are for the rest of the year? And I guess how should we think about OpEx and EBITDA for the next year as well?

Yes. Jeff, do you want to take all the OpEx EBITDA?

Yes, I can definitely address that. As we transition from the first quarter into the second, third, and fourth quarters, we incurred quite a bit of expenses, which were primarily recorded in the first quarter. As Bryan mentioned, we are aiming for EBITDA breakeven for the remainder of the year. Therefore, the expectation regarding the EBITDA breakeven is a realistic one as we approach year-end. What was the second part of that question? I apologize, I'm currently on some cold medication.

No worries. Yes, it was just on total hiring outside of just S&M.

Yes. There is really no reason to hire anything outside of sales and marketing at this point in time.

On the headcount, one of the things that I took a look at relative to our headcount is that we stayed pretty static over the last couple of years, 50 to 53 employees. And as Bryan said, we're going to continue to add employees opportunistically. But we're also keeping a pretty keen eye on the revenue per employee metric to ensure that we continue to see growth in that. I did some further research on technology services publicly held companies in that 0 to $100 million revenue range. And there were about 65 companies, and we were in the upper quartile with that metric. And that was in an industry peer group where the midpoint was 135 and top down as high as 1,200. So as Bryan mentioned, and I concur, we feel pretty good that we're rightsized from an account perspective, but we're going to continue to watch it and make sure that we continue to see upward growth in that revenue per employee metric.

Next question is coming from Mike Grondahl from Northland Securities.

This is Luke on for Mike. Just wanted to start on the business intelligence, any sort of strategy or pricing to call out there? Or how this will be rolled out or that will be marketed to existing clients as an additional add-on? Or just any sort of color around that would be great.

Yes, that's the goal. We have all the data and want to present it in a way that is easy for clients to understand. We offer a tool for them to create their own analyses, although that can be challenging for some. We're working on how to set it up effectively. Large companies have different data requirements compared to smaller businesses like bars and restaurants. There is definitely a strong demand for data. Our clients are expressing a desire to collaborate on combining our data, as we have a comprehensive view while they have their own insights. We are exploring better ways to develop tools together. We believe there is significant value in the data and are collaborating with our clients to determine the best approach to monetize it, ensuring it meets their needs while also maintaining privacy and public protection, all while developing a tool that we believe will benefit them.

Got it. That makes sense. And then just quick to clarify on the SG&A, which looks like it was up quite a bit. Were you guys saying this was kind of a one-off thing with cost concentrated in Q1 here? Or is this a new kind of run rate we should expect going forward? How do you see that playing out throughout the year?

No. There was a fair amount of noise inside of the first quarter. As I took a look at Q1 of last year, we had some nonrecurring reductions and a few accruals of roughly $0.25 million, $235,000 that were not coming into play this year. So we have that as a bit of a hurdle. And as I mentioned, some accounting and professional fees were higher in the quarter, which partly a little bit of hangover from the restatement, but then also still continuing to bolster our accounting foundation. As it related to systems, some outside analysis related to goodwill valuations, tax provisions, also work on the proxy, but a lot of that was combined within Q1. So it will be nonrecurring. We're going to see a dip in that going into Q2, and then that will slowly ramp into the rest of the year as we continue to increase revenues. We start to see salespeople get into accelerators on commissions, what have you. As far as we'd expect, though, we're going to see that drop in Q2 and gradually rise through Q4.

Your next question is coming from Jeff Van Rhee from Craig-Hallum.

This is Daniel on for Jeff. Just wondering, in terms of the smaller customers in terms of the restaurants and the title companies and starting to bring on a greater number, talk about how the right partner can be a whale? When we're talking about these customer adds, is this individual customers that are being hunted out? Or is this a bunch of customers being acquired to, say, 1 or 2 key partners? Just sort of how does that customer count work? And then in terms of just the maturity of systems and processes, I know it's a little bit of a different motion, bringing on a bunch of smaller customers versus a few larger ones. Just where would you say you are in terms of being ready for adding the larger numbers of these smaller customers and running them through the onboarding process?

I'll answer those in order. The process with large resellers or clients who resell our product involves bringing them on board, and they handle everything else. Typically, there are one or two companies in each vertical that provide the core software for that industry. They supply all the tools necessary for businesses to operate and maintain compliance, and we integrate into that workflow managed by the reseller. We don’t need to provision those clients or turn them on; that’s all done by the reseller. This setup simplifies things for us since there's just one connection to manage. As for onboarding smaller clients, we have been preparing for that over the past few years by improving our internal systems, implementing NetSuite, and getting Salesforce operational. This allows for an almost automatic process: when a salesperson receives a prospect, they input the details into Salesforce, create the order form, send it out for automatic signing, and once it’s signed, it comes back to NetSuite for finance to process the payment, which then triggers provisioning. A lot of effort has gone into optimizing this to seamlessly onboard many small clients. Most of these smaller clients reach out to us; we prefer not to pursue every bar, restaurant, or title company on our own. Instead, we partner with others in those areas who have numerous clients that appreciate our value and are willing to sell our product, benefiting from marking it up for profit.

And then just jumping back to the banking and lending. I believe that was volumes up 40%, could you just run through again what was included in the banking and lending category specifically? Does that include a lot of the major financial services customers? Or where do they fall?

It includes financial services customers, specifically in the buy now, pay later sector. We have expanded use cases with existing clients while also onboarding new lenders, particularly in the buy now, pay later space. Typically, when we partner with a financial services company, we start with one use case. Once they see the effectiveness of our solutions in that instance, they explore additional opportunities to implement our services throughout their organization.

We reached the end of our question-and-answer session. I'd like to turn the floor back over to Bryan for any further or closing comments.

Thank you, operator. As we conclude this call, I want to highlight some key points. First, fraud remains a persistent issue. Our diversification is crucial to our growth strategy as we find that more businesses need to verify identities. We're experiencing positive results from our market expansion in sectors like automotive, where our volumes have doubled year-over-year. Our resellers are performing well, with revenues up 92%. Client renewals continue smoothly; as I mentioned in the last call, we rarely lose clients unless they go out of business. Several of our top clients have committed to renewing 3-year and 2-year agreements at increased volumes and prices. We are continuously signing new business across various sectors, including financial services and automotive, gaining significant traction. I appreciate our sales team for their contributions in achieving this. In summary, as stated in the press release, more companies across diverse sectors recognize the advantages of using Intellicheck for both in-person and digital verification. I want to emphasize the digital aspect because many believe we are focused solely on brick-and-mortar. However, we have numerous clients solely in the digital space. Our product is flexible, easy to deploy, and user-friendly, providing enhanced experiences for clients and their customers due to our accuracy, which streamlines the process. Our completion rates are among the best in the industry, and we can provide decisions faster than our competitors. I anticipate more positive developments ahead. We look forward to discussing Q2 '23 in August, and I appreciate your participation today.

Thank you. That does conclude today's teleconference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.