CEO: Mark Kay
StrikeForce Technologies, Inc. (StrikeForce) is a software development and services company, which offers a range of integrated computer network security products. The Company owns the exclusive right to license and develop various identification protection software products to protect computer networks from unauthorized access and to protect network owners and users from identity theft.
WSA: Good day from Wall Street. This is Juan Costello, Senior Analyst with the Wall Street Analyzer. Joining us today is Mark Kay, the CEO for StrikeForce Technologies. The company trades on the bulletin board, Ticker symbol is SFOR. Thanks for joining us today there Mark.
Mark Kay: Thanks for having me Juan, it’s a great pleasure and opportunity.
WSA: Yeah certainly good to have you on and starting off give us a brief history and overview of the company for some of our listeners that are new to your story.
Mark Kay: Sure. Well, StrikeForce Technologies is actually been around since 2001 I joined them in 2003. I come out of 26 years JPMorgan as a managing director and systems and operations around the world. And we’ve been all about for a developing and doing research and developing and deploying software products that prevented identity theft that are very, very hot in the cyber security space. And both products are fully in production, we have some interesting large clients out there, some I can mention, some I can’t.
We’re now working on another new product the Mobile Trust, maybe I can spend a few minutes more on that a little later. And we’re getting a lot of attraction and starting to get very excited as we see these articles on all these new viruses showing up every day and then the regulations starting to get stronger and definitely with great progress on our patents.
WSA: Great. And so yeah talking about the recent patent there for your Out-of-Band technology?
Mark Kay: Yeah well we’ve prepared a press release two days ago that we actually received a second patent for Out-of-Band Authentication system called ProtectID. Out-of-Band Authentication is what many of you are starting to use now which three years ago nobody would have known what I was talking about. Where you might be signing into a bank and your cell phone rings and you have to put a pin into the cell phone or hit deny through your cell phone.
That’s considered Out-of-Band Authentication. It’s the best way to stop the thieves from stealing your information because it’s keeping it out of their reach. Your password and pin is in the telecommunication network so they cannot get it or don’t know the connection of that to your username. It’s written up at the FFIC as one of the ways to be compliant, it’s now being included in many areas especially since RSA got breached in March 2011. People started realizing using their hard tokens, their SecureID cards everyone used are more expensive, more difficult to use and less secure because they have predictable next numbers. When you’re doing Out-of-Band, it is a total randomized number, so if you get the number you cancel out the next one. So RSA when they got breached and people stole the seed, you know once they knew your number they knew the next number. And then more and more people are moving away from that kind of solution to Out-of-Band, especially as we go to millions and millions of people using it. And the patent is on top of our main patent we got it, we have announced in March of this year that we are suing and put our complaints against PhoneFactor who is now acquired by Microsoft.
Obviously that lawsuit is in progress and I cannot discuss it. There are others that are named in that lawsuits such as First Midwest Bank, Bank Corp and you know again that’s moving along and we feel very strong since we own patents now too. We have others that are pending related to that and PhoneFactor has no patent. So it’s a clear, clear case. But anyway that’s moving on very well and the other product that I think is worth two minutes to talk about is our Keystroke Encryption product called GuardedID.
We also have a patent pending on that product that we’re expecting to get granted this year and Keystroke Encryption has become one of the only ways to stop all these new malwares out there you know don’t forget data breach report and all the data breach that been announced we’d see the Fed, the City Bank, Heartland Payment Services many others got hit with these viruses and two key loggers including the RSA breach was initiated through a key logging which is a virus that gets in your computer, copies your key strokes as you type and if you’re typing your name, passwords and security number, credit card, blah blah blah you’re giving out the keys to the kingdom.
They steal it, they go out and send emails to themselves somewhere in the world and then they go in and steal your information. The anti-virus programs don’t stop this and that all these companies I mentioned use them but our product does stop them because none of the anti-virus programs the way they work as they look for the virus and they all know the virus exists they can’t find it. And the viruses are more you know smarter these days and they morph themselves and constantly change and therefore they don’t get found.
But our product doesn’t try to look for the virus it just copies your key stroke encrypts them immediate, hit your key strokes encrypts them immediately and hide them Out-of-Band in a computer again keeping the encrypted key strokes out of the reach of the bad guys. That’s been talked about as one of the only ways to stop these viruses and of course the anti-virus programs don’t talk about it much because they don’t have that capability and they don’t want the people they know that it might be missing even though the boxes that their key log in.
So we’re getting major, major deals on that we’re you know we have announced we work with intersections they have identity guard program out there that’s advertised a lot. We’re embedded in that, we were embedded in a product that was used in a major, major cable company which had over five million downloads of it. So that product has gained momentum and now we have partners around the world that we’ve announced especially in London or Europe that’s pushing this out to many banks that we’ve put a press release out about a month ago. So we’re starting to see great traction as more of these articles come out. Even the articles around all the retail, all the retailer issues, the credit cards everything all that can be stolen.
Again key loggers are involved in all this and they’re easy to put out there because that’s why they use them and they get out there through phishing attacks so you get emails that don’t make sense, that look like you’re getting something free or they’d look like it’s coming from your bank checking on you and as you type your information that’s asked for. Once you do that it’s downloading in most case a key-logging virus to your computer that you can’t prevent and that’s how it all begins. So, this product is essential to have as a layered solution on top of your anti-virus program which will occasionally sometimes clean, get something out.
And people are starting to see that and realize that and we’re gaining a lot of momentum there. So we have a lot of new deals in play in both products especially on the location. We have a major deal, couple of major deals going on in Canada through our new we saw that we had a press release on that about a couple of months back. So we’re seeing major, major progress on, and unfortunately as viruses grow and they, and cyber security grows, the opportunities for us grow as well.
WSA: Certainly. And so yeah I appreciate you talking about some of the current trends in the sector…What makes StrikeForce unique from some of the other players in the sector?
Mark Kay: Great. Well definitely bringing those two areas I mean our key stroke encryption which works on every Windows system and soon to be we’re on every Mac system it is extremely unique and again we’ll have the patent for that soon. Where, and we worked, we could protect everything you do through your IE, your Internet Explorer and Firefox browser but we could also protect anything you’re typing on your computer ever while working on anything even if you’re offline and all your desktop applications including all the windows suite, Microsoft Suite.
And no one else does that to that degree, we do and constantly growing in terms of its capabilities plus we have it in 14 languages and it works with I, you know multiple languages and two pack languages. No one else has that to that degree as well as being having the patent for it and in terms of the authentication piece you know having eight Out-of-Bands Authentication methods we’re also the only ones that include that along with token methods along with non Out-of-Band methods on one platform that people could either using the cloud, which is the only some of our competitors work or they can store locally or do a hybrid. We want to made our keys we wanted the largest student loan company for Out-of-Band because we had the largest, best capability, the most options offered that it could be in house and part of it could be through the cloud and they could migrate back and forth as they wish. No one else has that capability, that strength and the ability of any new methods along the way and that’s what, that’s that major client and major deal. And what’s really unique is now we’ve developed a new product called Mobile Trust, that’s getting very close to going for data.
It’s been very close for a while unfortunately but it’s still got a few tweaks to it and the difficulty is we’re doing things no one else has ever done. We’re adding our GuardID key stroke encryption capability to all mobile phones. Iphones, Ipads all droids and soon to be all others will be able to, the use on all your phones because they now are as you see all the articles is moving towards all the mobile device. Because that’s where the new world is and that’s what people are using and it’s easier for viruses to get in there, through SMS, through drive bys and so many different methods.
And that’s what their focus is and no one has put out a key stroke encryption capability on the phones. We have it, it’s part of our patent that hopefully gets done soon, grading soon and its part of our GuardID secrets and will be available as an SDK, Self Development Kit so other companies and developers can put it into their products. So we’re very, very excited over that plus that’ll bring soft tokens to all those devices that will worked with our protected disks to factor authentication product even though we already work with all the VASCO token methods as well seamlessly and others. So we’re very excited to get that product out that will really take us to the next level of capability on all mobile devices.
WSA: Great and perhaps you could walk us through your background and experience Mark and talk a little bit about the management side there at StrikeForce?
Mark Kay: Sure. Well a lot of really what’s key to what’s going on here and why we keep coming up with these products and have these patents is really the key players not me. The key player is Ram Pemmaraju who probably you don’t hear too much about. He’s our CTO and inventor. He owns the patents, they are in his name, he is the one that comes up with a lot of these ideas.
He comes out of 11 years at Bell Labs and Bellcore. He is the inventor of Out-of-Band Authentication that’s proven with our initial patent and he came up with the idea that used to be the SS7 in telecommunications where AT&T dial tones was stolen by a lot of my buddies in college. Then they separated the dial tones, the voice on the data and they decided to keep one of our Out-of-Band so it wasn’t easy to be stolen then, and that’s exactly where his concept was, to bring that into the authentication space to separate the two channels.
It’s much more difficult, never impossible but much more difficult and the thieves don’t go where it’s difficult to steal. So he is really the key to that. And George Waller he’s great in the marketing ideas and product development. He takes Ram’s ideas and puts them into how to sell them, how to make them work for the clients. And he’s got many, many years experience in the sales and technology relating to being an entrepreneur in this area.
I come out of 26 years as I mentioned earlier from JP Morgan as a Managing Director. Built a lot of their major systems, started their brokers business, understands investments, understands the markets, understand people and worked very well with all of our vendors and clients and shareholders as best as possible. I have a lot of experience in dealing with people around the world and making something work. And now that’s what’s kept us going here all the time. We’re always able to get what we need to move forward and now it’s getting more positive every day in terms of the opportunities for us in the market.
WSA: Well great and what are some of the goals and milestones you and your team are hoping to accomplish over the course of the next year?
Mark Kay: Well you know some of these I thought several times in the past so I would say our current milestones is really to get this new key stroke encryption patent. We will definitely defend it, we will definitely go after companies that are infringing on us, not to say who we’ll use to do that. We’re spending a lot of time and effort on the Out-of-Band Authentication patent.
We hope to get to some place this year on some level of settlement or close to it but it can have a say on that. We hope that all of our clients currently are starting to grow volume that line will continue to grow and get some very decent revenue numbers out of it. We hope to get greater market share as we’ve worked with more partners who are doing a lot more marketing and advertising. And we do hope to get to that cash flow positive line which is key to us. We thought we were there at the end of last year but we ended up having one of our partners, just let’s say, close issues that we’re suing them, for that we’ve announced in the past. We hope to get that settled and out of the way and get to that level of cash flow positive this year. But I’m tired of trying to predict when that happens because the unforeseen usually occurs so, but we’re moving hard and moving fast been a lot more traction, more people selling and we feel very good that we are going to be extremely successful especially as the market keeps getting uglier and uglier and comes at times of cyber security issues.
Juan Costello: Certainly and so in terms of investors and financial community Mark do you believe that the StrikeForce story and your message and the companies upside are completely understood and appreciated by them and if not what do you wish investors better understood about the company?
Mark Kay: Well I mean I get a lot of calls obviously from investors all the time. They give me a lot of comments what they see on the boards. There are people on the boards that actually put out full statements. I mean what investors need to understand is if they want to know if we’re for real or not check out the web site, check out some of the clients on our partner page and they’re all extremely real and some very big names. I always, always offer anyone who’s interested to know more about the company to the degree we can tell them since we went public to email me, call me.
I’m always available or 90% available to respond to anybody on any questions that are respectful and clear and that I can discuss. I think that’s very important, I think many investors stay with us, understand the values, see what we’re doing, can’t say buy more shares which shows some of the incredible buying. Like yesterday we had 85 million shares traded, that shocked the hell out of me which still not tons of money but it’s, it’s healthy volume and showing people are sticking with us and seeing the value.
And what they need to understand is we do have a lot of new deals, we are getting through these you know patent litigation processes. And we’re very confident we’ll come out very strong. You know I’ve told everybody, everybody knows and they see it publicly we have $2 million of my own money in this deal I haven’t taken any of it out. And we’re here to get this done and make it work and we feel very strong about where we’re heading.
WSA: Well good and so once again joining us today is Mark Kay, CEO for StrikeForce Technologies which trades on the bulletin board Ticker symbol SFOR. Currently trading at, on the market cap of close to 500,000 and before we conclude here Mark to briefly recap some of your key points. Why do you believe investors should consider the company as a good investment opportunity today?
Mark Kay: Well definitely the patents are very key to our future and we’re making good progress and we you know we just got another patent as we said earlier, and looking like we’ll see another patent on our keystroke encryption product coming pretty soon. And with an array of others pending I think that’s key in a market where patents are starting to gain a lot of momentum. I think it’s critical our products have more and more in line exactly where all big issues are coming up, articles plied every day about the credit card frauds, the frauds in teller machines, the data breaches and they all talk about if you had two factor authentication, 80% of what data breaches will not have occurred according to Verizon 2013 data breach report, key stroke encryption is critical, the anti-virus programs do not stop it as you can see by all the people that got breached, our product does. And our Mobile Trust picks all that into the new world of mobile security, which is super critical where all the viruses and problems that these are going. So our future, we’re a step ahead as always, sometimes too far ahead, but the market unfortunately is catching up in terms of the thefts, and we see a huge upside and it’s starting to happen through many of our resales as we built the channel, it’s starting to come through and build up the revenues. So I think we have a great future ahead of us, but no one is to know for sure where we’ll ever end up.
WSA: Well we certainly look forward to continuing to track your company’s growth and report on the upcoming progress, and we’d like to thank you for taking the time to join us today Mark and update on rest of our audience on StrikeForce.
Mark Kay: That’s great Juan. Thank you so much for the opportunity, I enjoyed doing this.