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StrikeForce Technologies, Inc. (SKFT-OTC: BB)
Interview with:
Mark L. Kay, CEO
Business News, Financial News, Stocks, Money & Investment Ideas, CEO Interview
and Information on their
total protection solution that strengthens companies’ defenses in real time against the critical points of identity theft and fraud: when accounts are opened, when they’re accessed, when they’re changed, and each time there’s a new transaction.

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With identity theft being an ongoing and growing issue worldwide, StrikeForce Technologies, Inc. (SKFT) has developed a unique suite of security products that allows you to choose the method(s) of verification and authentication, offering multi-factor protection now and in the future

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Technology
Business Software & Services
(SKFT-OTC: BB)

StrikeForce Technologies, Inc.

1090 King George’s Post Road
Suite 108
Edison, NJ 08837
Phone: 732-661-9641

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Mark L. Kay
Chief Executive Officer

Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
February 23, 2005

BIO:
Mark L. Kay, Chief Executive Officer

Mark joined SKFT in May 2003. Previously, he was an established leader, CIO and Managing Director at JPMorganChase & Co. over the past 25 years. During his employment at JPMC he led strategic and corporate business groups with global teams up to 1000 people. His responsibilities also included Chief Operating Officer and Global Technology Auditor during his tenure. His business concentrations were Securities (Fixed Income and Equities), Proprietary Trading & Treasury, Global Custody Services, Audit, Cash Management (including Money Transfer and Demand Deposit), Corporate Business Services and Web Services. Prior to JPMC, Mark was a Systems Engineer at Electronic Data Services (EDS) for over five years, where he developed his technical and people skills. He holds a B.A. in Mathematics from CUNY.

Company Profile:
About StrikeForce Technologies

StrikeForce Technologies, is a company that helps protect everyone – consumers, corporations and government agencies – in real time against identity theft and fraud at almost every access point. Its total protection solution strengthens companies’ defenses against the critical points of fraud:  when accounts are opened, when they’re accessed, when they’re changed, and each time there’s a new transaction. StrikeForce Technologies is trading on the OTC bulletin board (SKFT), is headquartered in Edison, N.J., and can be reached at www.strikeforcetech.com or at (866) 787-4542.

CEOCFO: Mr. Kay, what was your vision when you joined the company and where is StrikeForce today?
Mr. Kay: “I joined StrikeForce about three years ago after approximately 26 years at JPMorgan Chase & Co. (NYSE: JPM), where I worked as a Managing Director the majority of the time. However, I saw a great opportunity when I joined StrikeForce. They asked me to invest initially. After discussing my strong corporate background and after learning what StrikeForce was all about and their current plans as a software company to help prevent identity theft, I was very impressed with them and they were impressed with me and asked me to join as their CEO, for which I was excited about. StrikeForce’s vision at that time was to complete a suite of security products that prevent identity theft unlike anything we were aware of in the marketplace. We completed developing the majority of the authentication platform and started selling and implementing the products in late 2005 after a solid year of testing. Our vision is to be an all-purpose software product company that helps prevents identity theft that allows companies to choose the methods of authentication combined with validation and protection. We cover quite a range of products and methods of authentication and our vision is to continue to build out the platform as we see the needs arise and as the cyber thieves evolve their technology methods of stealing your identity. We can accomplish this with speed and flexibility, since we have a validation, authentication and protection platform with many products, versus only one product for one specific solution and market.”

CEOCFO: What is it that StrikeForce understands that sets you apart and gives you the capabilities you have?
Mr. Kay: “What sets us apart from the competition in regards to developing products that help prevent identity theft, is based on the talents of our management team, especially our inventor and CTO, Ram Pemmaraju with eleven years of experience from Bell Labs and Bell Core and a mind set of developing simple unique products and a platform with multiple products that can evolve over time. Many early solution vendors saw an opportunity, built a product or two for the most part and gained market share and are successful. However, my experience in building brokerage and other business systems at JP Morgan taught me that you want to build for the future while being able to process for the present. StrikeForce developed a solution and overall strategy that was not for any one product, but for the business of preventing identity theft overall across every aspect for eCommerce, corporations, the government and consumers globally. We saw the vision of allowing hard tokens and soft tokens, biometrics and combining the credit bureaus type of validation process, in terms of asking questions about people, combining validation with authentication to allow automated registration for authentication, potentially reducing the costs of the call desk or help-line. Therefore, it can result in a strong and quick ROI. Combining what the credit bureaus do along with what the authentication product companies provide, and being able to work with biometrics, tokens or even our own proprietary phone ”Out-of-Band” solution, for which we have patents pending, is what makes StrikeForce a total solution that every consumer and corporation must consider. StrikeForce once again provides validation, protection and authentication, all on one platform and allows choices and flexibility for the companies and corporations we sell to; they can pick and choose the methods that make the most sense for them. They could even add method(s) in the future when the next best method becomes available for authentication that most likely will work on our ProtectID™ platform, usually within a short period of time through our standard Application Program Interface (API), where most of our competitors would have to reinvent themselves and rebuild some of their solutions or partner with a company like us to allow new authentication types to work.”

CEOCFO: To whom have you been selling and how do you expand your reach?
Mr. Kay: “We are selling to eCommerce, corporations, government agencies and now direct to consumers. Our focus has primarily been financial services and eCommerce, moving to an emphasis direct to consumers as we complete our new Websecure™ product that I will describe later. When I say eCommerce, I am referring to companies that process various types of online real-time transactions across the Internet and typically don’t ever meet their consumers, therefore they need strong methods of validation followed by authentication that we provide without having to deploy any software or devices. We combine our validation product (VerifyID™), which  asks questions on your background similar to what the credit bureaus can provide,   with our authentication product (ProtectID™). This is a strong way to validate the consumer is who he/she says they are and then automatically register the consumer for authentication, which will then authenticate him/her at the time of completing a transaction.

The eCommerce space is an exciting market for us. We have over six contracts that are transaction based for which we provide a hosted service at Panasonic, so StrikeForce’s eCommerce clients do not have to deal with implementing or supporting our products; they just need to access them. In the financial services market, we have a great opportunity and have clients and pilots in place. In financial services, they use our products for their employees to have access to their company website and confidential data or their applications and for their consumers, to protect them as they sign into the company’s customer website and or when processing financial transactions. Our clients decide how and when the validation and authentication products will be used and to what extent. StrikeForce’s products could be leveraged in every market across the globe; wherever there are requirements for having validation and or strong authentication, beyond your basic name and password.”

CEOCFO: What is the competitive landscape and how do you reach your potential customers?
Mr. Kay: “The competitive landscape is large and there are probably hundreds of competitive vendors; anyone who sells any validation product, which includes all the credit bureaus and anyone who sells any kind of authentication product, which includes all the biometric companies, token companies and passive methodology companies. At the same time, not any of them provide, to the best of our knowledge, what our suite of security products provide across our total platform, including two and multi-factor authentication solutions with combined automatic verification capabilities. In an article a month or so ago in USA Today about Cyber Thieves, five companies including StrikeForce were mentioned that help prevent identity theft, in which case three of the five companies mentioned are our partners, since together our capabilities are stronger and provide one stop shopping for the clients. For example, the new FFIEC “strong guidelines” requires the banks to have stronger two-factor authentication and recommend “Out-of-Band” for their consumers using their Internet banking services, by the end of the year 2006. Many companies have some methods of validation, and are looking to partner with vendors like StrikeForce to add stronger, yet easy to use two-factor authentication for the average consumer, for which we anticipate concluding a co-marketing arrangement with one of them very soon. StrikeForce is strategically planning to increase it’s clients nationally and internationally by increasing it’s distribution channel; we are not planning to become a large company per se in respect to the number of employees, but rather leverage the channel to aid us in increasing our reach and revenues globally. Currently, we are also focused on direct sales for this year, which also paves the way for the channel to become more successful in the future.  An example of building the global channel is a recently signed agreement with a large known distributor in security solutions in Asia. This is in line with our global strategy for distributing our products and being able to support them on a worldwide basis without the cost of building and maintaining our own offices around the world.”

CEOCFO: Is identity theft as big a problem worldwide as it is in the US?
Mr. Kay: “Identity theft is one of the few problems I have seen that is increasing globally, thanks to the Internet. The more we talk to our relationships in Asia, the more we learn that they feel it is a bigger problem in their region. I am finding that when we talked to various groups across Europe and South America, each thinks it is a bigger problem in their country or region than the other. Everyone recognizes it as a major problem and it is hard to say which countries or regions are worse off than others. I believe identity theft is universal and part of what makes it universal is that it is occurring through the Internet, which has no boundaries. One scheme has been noted to have origins in Eastern European countries; it is a worldwide problem effecting over 50 universities in the USA. Everyone is recognizing identity theft is global and all regions across the globe seem to be starting to take stronger action relating to stopping identity theft. Many countries are looking for solutions to one degree or another and some are developing regulations. It is an endless market for us and a big problem for the world that is only going to grow as technology continues to advance and we can be sure that will occur.”

CEOCFO: You recently became a public company; how does that change StrikeForce?
Mr. Kay: “Being a public company takes more effort and money, as everyone knows. At the same time, we see it as a critical step in our success in developing a company and in supporting our investors and shareholders. We feel it is a great opportunity to be out there in the marketplace during a time when identity theft is so hot. Identity theft is a continuous problem that is growing exponentially, so public awareness is expanding globally. I give various talks at seminars and universities and every time I ask the audience if they have been affected by identity theft, a growing percentage of the people raise their hands; the percentage of raised hands is close to 100% as of late. People are looking for solutions in the corporate world as well as consumer markets and they want protection NOW.”

CEOCFO: Will you tell us about your revenue model?
Mr. Kay: “We have multiple revenue streams since we work with different types of clients across multiple markets. In the corporate enterprise market, where the corporations use our services internally, we price everything through a one-time price for each seat. They purchase the software with the appropriate products depending upon how many seats and they pay for it upfront, operate it, service it and pay the standard yearly maintenance fee . In the eCommerce market, including processors, gateways and merchants, they pay a one-time set-up fee and recurring transaction fees through the use of our managed services Application Service Provider (ASP). In respect to Financial Services, we have developed a “Protect-As-You-Go” pricing model, which provides greater flexibility requiring firms to pay a small monthly fee or transaction fees for their consumers with minimums as appropriate based on bundles purchased. This model also includes an annual maintenance fee. In all markets, our prices are very competitive. In terms of our financials, we are on a calendar basis. We closed the fourth quarter in December and our annual report on Form 10-K will be available shortly, until which time I cannot discuss the specific numbers.”

CEOCFO: Why should potential investors be interested and what do people often miss about the company that you would like to convey?
Mr. Kay: “Potential Investors always like to hear the strength of our Management Team. Once again, I got involved initially as an investor and secondly as the CEO. Having been a CIO, COO, Global Technology Auditor and with other responsibilities at JPMorgan over 25+ years, I always looked for solutions that solve the current and near term future requirements of the firm. Across the Management Team we have over 80 years of professional experience across sales, technology, design, engineering, management, banking, securities processing and accounting. We know that identity theft is growing and is constantly evolving in respect to the methods fraudsters are using to steal your identity, therefore requiring the methods of validating, protecting and authenticating your identity to evolve and strengthen, hopefully at a faster pace. You do not want to have to develop or buy a new product every time there is a new threat. StrikeForce’s products currently help prevent most if not all of the threats from becoming problems with our current suite of security products. StrikeForce’s software platform is able to evolve as new authentication methods and devices become available, because of our standard Application Program Interface (API). We see this as a major competitive advantage, and since we have three patents pending, we have a strong edge and lead-time in the marketplace.

In the enterprise market, tokens with the phone “Out-of-Band” authentication as a backup for redundancy is becoming very popular. Having alternatives and backups and pricing the combination less than some of the competitors’ primary products, we see this as a great opportunity for StrikeForce. We definitely see identity theft getting worse and even though many people feel they just will not do transactions over the internet, we believe over time there will not be an option. A simple way to determine that is to look at our sons and daughters who typically, including mine,  do everything on the computer; I am surprised they don’t get meals over the computer as of yet. That is probably the future! Everything is computerized and more transactions will be processed through the Internet and identity theft will therefore continue to grow rapidly. This direction only strengthens StrikeForce’s platform strategy. There are other companies that do similar things in part, but we have a strong competitive edge, with great products that are simple to use and written up favorably by analysts and reporters in the media. Our newest product, recently announced in February (2006) is an anti-keylogging program that a consumer will be able to buy directly that will help him or her with a key-logging program, which is a new method of identity theft that is increasing rapidly. We are anticipating that WebSecure™, will be available for distribution in the second quarter of 2006.”

CEOCFO: In closing, what should readers remember?
Mr. Kay: “StrikeForce is very well positioned to achieve our mission, which is “Protecting Corporations and Individuals from Identity Theft Worldwide” with our total platform security solution. Companies and consumers are starting to take notice and look for identity theft solutions. In addition, the regulations to prevent identity theft are increasing and strengthening, such as the Patriot Act, HIPPA, FFIEC and others. Everyone is taking notice and we are there with strong validation, protection and authentication combinations. We are bullish on our future and your security.”


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“We know that identity theft is growing and is constantly evolving in respect to the methods fraudsters are using to steal your identity, therefore requiring the methods of validating, protecting and authenticating your identity to evolve and strengthen, hopefully at a faster pace. You do not want to have to develop or buy a new product every time there is a new threat. StrikeForce’s products currently help prevent most if not all of the threats from becoming problems with our current suite of security products. StrikeForce’s software platform is able to evolve as new authentication methods and devices become available, because of our standard Application Program Interface (API). We see this as a major competitive advantage, and since we have three patents pending, we have a strong edge and lead-time in the marketplace.” - Mark L. Kay

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