I had a research call today with someone who used to be a C-level executive at authID ($AUID). This individual no longer works there. Providing additional identifying information would violate an agreement I made to be able to do the call. Here’s the information I collected:

 

• Almost a decade ago, he thought the company had the right product in the right space. Unfortunately, a series of CEOs were unable to properly identify viable end markets. (This is a point that featured heavily in my initiation report on the company.)

 

• In recent years, Apple made FaceID a comfortable standard for authentication and made a passive face selfie something people got used to using. The problem with the Apple approach is the data is stored on the phone. Someone who steals your phone can upload their biometric data to the phone and access everything. ($AUID regularly talks about verifying the person behind the device instead of the device.)

 

• One prior CEO focused on payment processing instead of identity verification. Wrong approach.

 

• $AUID had great technology, but some potential customers worried the company would go out of business. Aspirations > resources. Recent secondary offering helps with that.

 

• He had to use competitor ID.me to access social security payments. Said the system is terrible. It required a 15-minute phone call to authenticate. Anything that requires 15 minutes of customer time and agent time is a non-starter.

 

• Prior customer announcements introduced new customers, but meaningless revenue.

 

• Thinks new CEO, Rhon Daguro, has great sales relationships with potential customers and the ability to get the right team in place.

 

• For the first time in almost a decade, he’s seeing positive momentum. Have the right technology, the right team, and paying customers being announced. First time he’s seen things going in the right direction. First progress he’s seen on the revenue side.

 

• Company did $200k of revenue last year. Will do about $1MM this year. Did a back of the envelope calculation on the call getting to around $5MM in revenue next year (2025). That number assumes very little in the way of additional customers being signed in the next 3 quarters and very little revenue above contractual minimums (UAC). That $5MM estimate relies on conservative assumptions. Reality could be even better.

 

• Past a certain point, this is a very high margin business. (I agree.) Company not at cash flow breakeven yet, but is heading in that direction quickly. (I agree with this as well.)

 

• He’s used authID’s solution and thinks it very good, easy to use, accurate, and quick. Better than the competition he’s tried personally.

 

IR@DeepKnowledgeInvesting.com if you have any questions.

 

 

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