Profits, Right Before Your Eyes. Instant Image Verification

Agenda The True ID ® Service Face-to-Face Online Next Steps The Investment Opportunity Business model and strategy Financial projections 2

3 “Fastest growing financial crime” Dept. of Justice The $25 Billion Problem: Identity Fraud “96% of bank card fraud losses traceable to identity fraud” Mastercard “1.4 million fraudulent checks valued a $27.3 million written daily. $9.9 billion losses annually” Create a Check

4 Types of Identity Fraud Face-to-Face Online

5 The Market: Face-to-Face Identity Verification Services The Market: Face-to-Face Identity Verification Services Travel Rental cars Airlines/Travel agents Other Banks/Credit unions Cargo theft/Logistics Retail High-value specialty stores Grocery/Supermarkets Department stores

6 Effective Loss Prevention: Combating Face-to-Face Identity Fraud Need to Have Proactive deterrent Efficient through put at POS Easy system integration Complete consumer acceptance Effective user identity verification Nice to Have Employee audit capability Enable dispute resolution Online usability

7 Existing Loss Prevention Solutions Fall Short Existing Loss Prevention Solutions Fall Short False Rejects

8 Introducing the True ID ® Solution Proven face-to-face effectiveness Portability across channels and markets Unmatched consumer acceptance

Initial Consumer Contact Consumer Enrolled, Photo ID Scanned Real-time Cross-market Image Verification Instant Image Verification Stops Fraud 9

10 True ID Stops Face-to-Face ID Fraud A Proven Solution… Successful pilots in travel, retail, banking & logistics Eliminated fraud cost-effectively Unmatched consumer acceptance …in an Important Market 16 billion POS check transactions in 1999 $5.9 B annual losses from retail check fraud

11 Instant Image Verification Provides Secure Audit Trail Instant Image Verification Provides Secure Audit Trail Efficient dispute resolution Proactive employee fraud prevention Effective loss prevention investigations

12 The Other Problem: Online Identity Fraud By 2005, half of all fraud will be perpetrated online ( Source?) Online fraud 12 times greater than face-to-face (Gartner Group) Online losses are 10% of online retail spending (Meridien Research) Average chargeback rate for online merchants is 15% compared to 1% for face-to-face transactions (Gartner Group) 52% of consumers who don’t shop online cite security concern (Forrester Research)

13 The Market: Online Identity Verification Services The Market: Online Identity Verification Services Travel Rental cars Airlines/Travel agents Other Banks/Credit unions Retail High-value specialty stores Brick to Click retailers

14 Online Identity Fraud Solutions: The Needs are Similar Online Identity Fraud Solutions: The Needs are Similar Need to Have Efficient through put at web site Easy system integration Effective user verification Complete consumer acceptance Nice to Have Proactive deterrent Efficient dispute resolution High volume cost effectiveness Seamless cross-channel portability

15 Online Identity Verification Solutions Fall Short False Rejects

The True ID Online Solution At POS Consumer Enrolled, Identity Verified In- person At POS Issue One- time Passcode on Receipt for Digital Certificate Download Consumer at Home Enters Passcode on their PC Data Validated and True ID Digital Certificate Issued Strong Authentication, Real-time Security, Full Audit Capabilities for In-person AND Online Transactions + = 16

17 The True ID Online Solution Leverages strong face-to-face authentication Builds on existing consumer acceptance Aligns costs with risks Strong compatibility with existing channels Secure cross-channel audit capability Reduces e-tail checkout hassles For best “Brick to Click to Brick” shopping experience!

18 Instant Image Verification: The Effective Solution to Identity Fraud Instant Image Verification: The Effective Solution to Identity Fraud False Rejects

19 The Image Data Investment Opportunity Image Data Strategic Advantages First mover advantage--no direct competitors Production-stage product Real-world market acceptance Management with proven capital efficiency Strong initial investors with industry knowledge High gross margins

20 Path to Profitability Continue to prove markets Develop channels Control burn while ramping revenue

21 The Channels: Key to Mass Deployment Hardware Channels: POS Manufacturers Thin margins A few key leaders; highly competitive Existing products easily integrate True ID functionality Holy grail: A piece of transaction fees Service Channels Processors seek added services, eg check truncation Check & credit verification DBs need higher effectiveness to reduce costs Proprietary card services need higher-margin differentiators

Burn Control Lean Management Style 4 years and production-stage product for $12M Prove-the-markets-to-Channels Strategy Keeps sales/marketing expenses low and focused 22 Minimal Manufacturing-related Capital Need On-demand outsourced manufacturing Leasing/financing option tap customer capital Strategy ensures scaleability

23 The Image Data Investment Opportunity First mover advantage--no direct competitors Production-ready product Real-world market acceptance Management with proven capital efficiency Strong initial investors with industry knowledge High gross margins

24 Growth: Margins Gross Margin 2001 Increase transactions vs. hardware revenues Increase ratio of verification to enrollment Hardware Production/sales licensing begins Hardware costs decline 2002 Increase in fully automated online verifications

25 Growth: Face-to-Face Market Terminals Deployed Terminal Revenue

26 Growth: Online Market Digital Certificates Issued Digital Certificate Revenue

27 Growth: Face-to-Face and Online Transactions Total Transactions Total Transaction Revenue

28 P & L Aug Dec 2003 P & L Aug Dec 2003