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					Securics: The science of security™




                                                                        ™
                                                 Biotopes
                                                Terrance Boult, Ph.D.
                                            Founder and CEO, Securics Inc
                                     El Pomar Professor, U. Colorado at Colorado Springs



            1
                                         The Opportunity
                                     Biometrics to grow 10x to $5B Market by „09
Securics: The science of security™




                                      9/11 changed security models accelerating
                                       Biometric passports & ID cards

                                      ID theft/Fraud are fasting growing crimes
                                       costing over $5B/48B in 2003 .
                                        Biometrics can help, however…
                                          “A lack of understanding and concerns about privacy have
                                            prevented wide scale adoption of biometric technologies by
                                            financial institutions in the past.”[1]
                                     [1] C. Carry of Celent Communications. www.biometritech.com/features/celent.htm
            2
                                     Privacy Pains
                                    UDOJ funded poll in 2002 found 88% concerned
Securics: The science of security™




                                     about misuse of biometric data. However, 80%
                                     support biometric use to prevent crime.

                                    Must trust “owner” to keep it private. Function
                                     creep explicitly feared, like SSN. Linking across
                                     databases also feared.
                                                                   Faking a finger from image:
                                                                     Just Print a transparency
                                    Biometrics are permanent        Or make a gummy finger
                                     features. If lost, shared,
                                     compromised, and/or
                                     “acquired” the privacy and
                                     security loss is permanent.
            3
                                     Privacy/Security
                                     Vulnerabilities “Levels”
Securics: The science of security™




                                     Enroll
                                      Template            Encrypt to                        Decrypt
                                      Creation            Transmit          Store
                                                                                       (do everyone for
                                                                                         identification)
                                                                         ID for
                                                                       verification
                                     MUST decrypt to match

                                     Many keep “DB” decrypted                             Compare

                                     for performance reasons.

                                                                                                  ID
                                      Template            Encrypt to        Optional
                                      Creation            Transmit          Decrypt

                                     Verify
            4
                                       Biotope™ Privacy/Security
                                       Vulnerabilities “Levels”
Securics: The science of security™




                                      Enroll
                                      Template
                                                                     Transmit               Stored
                                      Creation                                   Store
                                                                                           Biotope™
                                                      Transform to
                                                       Biotope™
                                                                      Match in encoded space!!
                                     Biotope Sensor
                                                                                            Compare

                            Biotope Sensor
                                                      Transform to
                                                       Biotope™                                   ID
                                     Template
                                                                     Transmit
                                     Creation

                                     Verify
            5
                                         The Competition
                                        Status Quo: Lip service to privacy/protection. 
Securics: The science of security™




                                            DB stolen (e.g. In past 12 months more than 40Million
                                             financial records “lost”, stolen or hacked).

                                        Traditional “encryption” improves security for
                                         biometric data, but must decrypt to match.
                                            Still strong potential for function creep/Insiders
                                            Decrypted when sold/shared, e.g. ChoicePoint example

                                        Store biometric on smart-card/RFID.
                                            Still must acquire/match
                                            Either no central “verification” or it has the same DB
                                             issues as others.
                                            Card has increased chance for “loss/capture”.
                                            High $$$

            6
                                         Biotope™ Status
                                        Components verified in Laboratory with over 1M+
Securics: The science of security™




                                         face comparisons, 500K fingerprint comparisons.
                                        All privacy goals met! Plus we achieved:
                                            Average 50-100% improvement in recognition rate for
                                             each of 3 “open source” face-recognition algorithms.
                                             Outperforms all known algorithms on Dup2 dataset.
                                            30% improvement for VeriLook
                                            30% improvement for NIST/FBI Fingerprint system.
                                                 Biotope enhance Bozorth would have placed 3rd in 2002
                                                  competition, 8th in 2000 and 9th 2004. (And there is plenty of
                                                  room for improvements too.)

                                        SDK specification/implementation in progress
                                        Embedded system currently in development.
            7
                                     Securics‟ Model
                                        Del. C Corp. Founded Nov. 2004. Now 5 employees.
Securics: The science of security™




                                         Focus is improving biometrics performance while protecting
                                         privacy. Building 3 software/middleware product lines,
                                         based on 4 Patent Pending technologies.

                                        Sales model is “middleware/licensing” with per user/use
                                         fees on top of partner‟s model.
                                        Developing embedded system to demonstrate system, but
                                         will partner/license rather than produce it.

                                        Funding :
                                            Seed Capital from Founders.
                                            Grants & Government Contracts for R&D and proof of concept.
                                                 $100,000 grant from CU TTO for Proof of Concept of Projective Invariant Hand-geometry
                                                 2 Federal proposal pending plus 4 SBIRs pending
                                            Angles and (and potentially VCs) for commercialization/scaling
            8
                                                   Biotope™ Revenue Model
                                                                                                                                                                                                                                              Biometric Revenues




                                               Securics‟ model is based on lowest growth                                                                                                                                5000
                                                                                                                                                                                                                        4500

                                                                                                                                                                                                                        4000
 Securics: The science of security™




                                               estimates from International Biometric Group                                                                                                                             3500

                                                                                                                                                                                                                        3000
                                                                                                                                                                                                                        2500

                                               (IBG) reports.                                                                                                                                                           2000

                                                                                                                                                                                                                        1500

                                                                                                                                                                                                                        1000
                                                                                                                                                                                                                        500

                                                                                                                                                                                                                          0


                                       Industry missed earlier IBC 2003 & 2004                                                                                                                                                 2003   2004        2005        2006         2007
                                                                                                                                                                                                                                        Source: International Biometric Group
                                                                                                                                                                                                                                                                                  2008




                                       market estimates. Acuity Research reports
                                       this was largely due to delays caused by the
                                       aggressive efforts of privacy groups.
                                                                                          Market penetration rising
                                      50.00%   Securics' Market Share of Biometrics Users
                                                   10.00%
                                                             2.1                  10.00
                                                                                   7.90
                                                                                  0.03
                                                                                          to 8% of the new users
                                                                                                     11.25
                                                                                                       1.25
                                                                                                      0.07
                                                                                                                           12.66
                                                                                                                            1.41
                                                                                                                            0.08
                                                                                                                                              14.24
                                                                                                                                               1.58
                                                                                                                                               0.06
                                                                                                                                                                   16.02
                                                                                                                                                                     1.78
                                                                                                                                                                    0.07
                                                                                                                                                                                      18.02
                                                                                                                                                                                       2.00
                                                                                                                                                                                       0.11
                                                                                                                                                                                                            20.27
                                                                                                                                                                                                              2.25
                                                                                                                                                                                                             0.11

                                                   8.00%
                                                                                  0.03
                                                                                          with 6% of total users by
                                                                                                      0.10
                                                                                                       67%
                                                                                                                            0.18
                                                                                                                            42%
                                                                                                                                               0.24
                                                                                                                                               24%
                                                                                                                                                                    0.31
                                                                                                                                                                    23%
                                                                                                                                                                                       0.42
                                                                                                                                                                                       27%
                                                                                                                                                                                                             0.54
                                                                                                                                                                                                             21%
                                      Percentage




                                                                                 0.34%               0.92%                1.42%              1.67%                1.93%              2.35%                  2.65%
                                                   6.00%
combine two technologies so it underestimates total number of users.
                                                   4.00%
                                                                                 0.43%
                                                                                          2009.      5.60%                5.39%              3.67%                3.96%              5.73%                  5.05%




nufactures, they would get a lower per user cost (.10) for hardware system but expect sales to quickly reach 10% of all uses, then rise to 30% over a 3 year period
                      2.00%
the software market. It is likely hardware market penetration would increase software sales too.
                                                                                                                             10%                12%                  14%                16%                    18%
                                                   0.00%                                                                   126,600            170,880              224,280           288,320                364,860
                                                            Q2 Yr. 2 Q3 Yr. 2 Q4 Yr. 2 Q1 Yr. 3 Q2 Yr. 3   Q3 Yr.3

Government ID card) the user's would quickly grow to about 10-20 Million users, or about 5X-10X thePenatration here.
                                                                                      Quarterly model presented
                                                                                                                     Q4 Yr. 3 Q1 Yr. 4 Q2 Yr. 4 Q3 Yr. 4   Q4 Yr. 4 Q1 Yr. 5 Q2 Yr. 5 Q3 'Yr. 5   Q4 Yr.5

                                                                                                                                                                                                                      Revenue approximately
  from IBG, and current market breakdown by revenues
                                                                                          Securics Market Share (Overall Users)
                                                                                          Market Share of “New User sales”
                                                                                                                                                                                                                      $1.6M in 2007 rising to
                                                                                                                                                                                                                      $14M in 2010
ed to be more realistic.
 in 2009, which is around 0.2% of the total market revenue



             9
                                      Securics‟ Team
                                     Dr. T. Boult: Founder and CEO:
Securics: The science of security™




                                           Recognized world leader in video-based security with $4 million in
                                            recent DOD funding and a dozen SBIR/STTRs.
                                           Founding CTO of ongoing intelligent surveillance company & 8 year
                                            involvement in another ongoing “startup”.


                                     Jim Wittenburg: Co-founder and President
                                           Serial Entrepreneur in Silicon Valley & Colorado Springs with 20
                                            years experience with startup & early stage companies including
                                            raising VC/Institution funding

                                     Michael Enos: VP Business Development
                                           Serial Entrepreneur, Founder H.I.S. Financial Services (sold in 2002)


                                     William Bishop: VP Engineering with 25 years experience
                                           Previously developed Electronic Check Conversion system with Mr. Enos
                                           Two Academy awards for state-of-the art imaging and special effects

       10
                                     Why XXX should invest in Securics
                                        Requesting funding to finish embedded systems demo and
Securics: The science of security™




                                         finalize software SDK product – effective use of $75K!
                                        Proven team with unique niche in an exploding market.
                                        Four patenting pending technologies leveraging
                                         DARPA/ONR investment in Dr. Boult‟s biometric research
                                        Homeland security reduced if privacy issues continue to
                                         delay/derail biometrics-based ID systems.
                                        DOD has the largest deployed Biometrics-based ID
                                         system, with the most to loose if many commercial
                                         biometrics are “lost, stolen or compromised”.
                                        CCAT‟s connections will help with DOD visibility and can
                                         improve market analysis/positioning.

        11
Slides for Q&A if needed
                           Securics: The science of security™




                                                                12
                                     Key Issues with Biometrics
                                     Privacy/Security
Securics: The science of security™




                                     Biotopes™
                                         Accuracy & Reliability
                                         RandomEyes™, FASST™ Verifier
                                         and Fusion
                                             Ease of use
                                             Projective Invariant Biometrics

                                     CO$$T of lost data and rework?
       13
                                     Biotopes: Revocable Secure Biometric
                                     Transforms
Securics: The science of security™




                                                                                                     Optional
                                                                                                   Passcode/PIN

                                                         Transformation     of   data
                                     Biometric data      Look up           Apply to each           Transformed
                                          (v)           transform            feature                 data (v‟)



                                                      Database or           residual (r)             General
                                                       smartcard                                   wrapping (g)
                                                      w/ transform
                                                      parms and             w=encrypted            Fusion module
                                                       Public Key           fusion of g, pc



                                                                     r,w to distance computation




       14
                                     Expected End Product Betas
                                     Networked FingerBiotope terminal
Securics: The science of security™




                                       – Revocable Fingerprints for POS,
                                         financial and government programs.
                                     Perspective-Hand Geometry
                                      Algorithm BioAPI compliant form,
                                      Q106
                                     Face-based Biotopes (ATM, non-
                                      integrated demo)
                                         • Based on either VeriLook or Siemens
                                           (not yet released) face recognizer.
                                           (Q1 06)
       15
                                     Industry Breakdown & Growth
Securics: The science of security™




                                     Biotopes will be applied to Face, Finger and multi-modal
                                     Combined Market (excluding AFIS):
                                                     240M 470M 800M 1.1B 1.7B 2.2B




       16
                                     Biometrics Market Evolution
Securics: The science of security™




                                        Ease of use              Large-scale Accuracy
                                        Privacy/Security         Ease of Use
                                        Reliability              Privacy
                                        Accuracy

                                      Government & Fraud uses require identification
       17
                                     Revenue Model
                                        Align fee model with that used by biometric
Securics: The science of security™




                                         partner, per-user is dominate model with per-use
                                         fees used by a few companies (e.g. Identix).
                                        Financial model for revocable biometrics
                                         presumes $1 per new user (and $0.15
                                         maintenance/y) or $0.05 per use @15 uses per
                                         year. (Average “home” system with 10 users
                                         license ~$100, complex systems $50-150/user).
                                        Model conservatively assumes less than 5% “new
                                         user” market share in 3 year and <8% in 5 years.
                                        Small Credential Service fee with only 10% of
                                         revocable biometric users subscribing
       18
                                     Capitalization Strategy
                                     Seed Capital from Founders
Securics: The science of security™




                                     Grants & Government Contracts for R&D and proof of concept.
                                            Proof of Concept – Hand-geometry
                                                 $100,000 grant/CN from CU TTO, 6 7/15/2005 1/15/2005
                                            Fusion from Failure Prediction
                                                 Department of Justice, NIJ $793,088 over 24 months,
                                                 Formal proposal submitted 3/17/2005, made preliminary cut, Decision pending.
                                            Embedded Remote Recognition
                                                 Department of Defense – Special Operations Command
                                                 $1,300,000 over 36 months
                                                 Preliminary Proposal submitted 4/18/05, forwarded to DOD Biometric Fusion
                                                  Center for further consideration, July 20
                                            NSF SBIR submitted June 8
                                            3 DOD SBIRs (SOCOM + 2 Army) submitted July 1


                                        Angles and VCs for commercial scaling
       19
                                     Use of Proceeds
Securics: The science of security™




                                                Category           Cost
                                       Personnel and Fringe         $40,016
                                       External Advisors,
                                                                     $3,750
                                       Consultants, and Services
                                       Supplies and Minor IT
                                                                     $2,200
                                       equipment
                                       Travel                        $2,000

                                       Other (Patent costs)          $8,000

                                       Overhead                     $19,028

                                       TOTAL                        $74,994
       20
                                      Business plan assumptions
                   Partner with Biometrics vendors/Integrators
Securics: The science of security™




                    for Government Systems.
                    SDK + licensing
                     “per user” or
                     “per use”
                    Credentialing
                     service
                    Phased Product
                     introductions.
                                    Non-privacy valuations discussed Identix CTO
       21
                                     Securics Tentative Financial
                                     Model
                                                                            $600K Seed, $900K Grants
Securics: The science of security™




                                                                                          Cash Balance for months 1-24
                                                                                                              Cash Flow 2005 & 2006

                                                                   $800,000

                                                                   $700,000
                                         Cash & Cash Equivalents




                                                                   $600,000

                                                                   $500,000

                                                                   $400,000

                                                                   $300,000

                                                                   $200,000

                                                                   $100,000

                                                                       $-
                                                                              1   2   3   4   5   6   7   8   9   10   11   12    13   14   15   16   17   18   19   20   21   22   23   24
                                                                                                                        Month 2005 - 2006




                                                                                  First product @8months
                                     Assuming capture only 5-8% of new users
                                      in 3 product lines should be profitable in
                                           24 month, 20M in sales in 2009
       22
                                         Biotope™ Performance
                                     FERET      PCA        LDA       EBGM        FVC      Verification
Securics: The science of security™




                                     Dataset                                    Dataset      EER
                                               Improved   Improved   Improved
                                     DUP1                                                  Improved
                                               156%       101%       109%
                                               to .866    to .889    to .912    „00 #1    30% to .029
                                     DUP2      506%       353%       254%       ‟00 #2    37% to .025
                                               to .855    to .855    to .880
                                                                                ‟02 #1    34% to .012
                                     FAFB       32%        40%        15%       ‟02 #2    30% to .031
                                               to .995    to .989    to 1.00
                                                                                ‟04 #1    39% to .086
                                     FAFC      1900%      139%       181%
                                               to 1.00    to 1.00    to 1.00    ‟04 #2    33% to .075
                   Preliminary testing on VeriLook (a commercial
                   face system) showing 30% improvement

                                       Privacy/Revocability plus a Significant
                                       improvement in both recognition and
       23
                                       verification performance !
                            Projective Invariant Hand-geometry
                                    Non-contact
Securics: The science of security™




                                    Can use existing
                                     cameras
                                    Joint-location more
                                     stable than finger
                                     widths
                                    Value Add:
                                      Ease of use
                                      Potential for
                                      recognition & Fusion!
                                      Patent Pending with
       24
                                      broader application
                                         FASST Verifier™
                                                                       How well it works
Securics: The science of security™




                                        Analyze/learn shape of
                                         “Similarity” and use it
                                         predict when failures                       Jpeg

                                         occur
                                        Can be used for fusion or
                                         in a system to gather
                                         more data (e.g. new
                                         picture)
                                                                                     Weather
                                        Applies to any “similarity-
                                         based” approach
                                         (includes all biometric
                                         plus many others)
       25
                                         RandomEyes™
Securics: The science of security™




                                        Most biometrics use
                                         a “feature” to define
                                         local coordinates,
                                         e.g., eyes. Their
                                         accuracy is critical!   FaceIT   EBGM   PCA


                                         Perturbations with
                                         predictions can
                                         improve
                                         performance.

       26
                                     Revocable Secure Biometric
                                     Transforms
                                        Makes a biotopeTM from any existing
Securics: The science of security™




                                         biometric
                                        Works on most feature types and can be
                                         integrated with most matching.
                                        Basic form supports “enrollment
                                         identification”
                                        Most secure form, as an inherently multi-
                                         factor solution, supports verification
                                         without identification (I.e. cannot be used
                                         for search!).

       27
                                     Securics Milestones/Progress
                                     Milestone                                                                                    Jan 18      June 17
                                     Execution of Option Agreement with Univ. of Colorado TTO                                     5/1         4/22 √
Securics: The science of security™




                                     Key Hires – 2 software engineers (Pending Funding)                                           6/1         8/1
                                     Prototype & Performance for Open Source Face                                                 3/15        3/1 √
                                     Neurotechmologija - Code face interface and demonstrate                                      5/15        5/27 √
                                     First Beta release Product (Neurotechmologija VeriLook)                                      7/15        12/1
                                     Prototype & Performance for Fingerprint (FBI/NIST)                                           ??          5/15 √
                                     Embedded Biotope Fingerprint Demonstration                                                   ??          10/1
                                     Establish formal relationship with one or more Financial Service                             6/1         7/15
                                         JCB VP on Advisory board. In discussions with First Data, BioPay,
                                     Department of Justice Grant ( $900,000 award announcements expected 9/1)                     2/1
                                     CU Proof of Concept (Hand Geometry) ($100,000)                                               9/1         6/10 √
                                     Other Grants                                                                                 ??          4 SBIRs

                                     Release of SDK(s) for Revocable Biometric Encryption                                         10/1        10/1

                                     Presentation at 5 International Conferences/Shows
                                     1.   IEEE Conference on Computational Intelligence for Homeland Security & Personal Safety   3/29-30 √
                                     2.   ASIS Emerging Trends in Security                                                        5/3-5 √
                                     3.   IAPR‟s Audio-and Video-based Biometric Person Authentication 2005                       7/20-22 √
                                     4.   Forth Annual Federal Information Security Conference
                                                                                                                                  6/15-16 √
                                     5.   ASIS International Seminars and Exhibits
                                                                                                                                  9/12-15



       28
                                         Securics‟ Team
                                        Co-Founder and CEO: Dr. T. Boult
Securics: The science of security™




                                            Recognized world leader in video-based security
                                            Part of DARPA HumanID program, with an extensive
                                             funding record including with over $4 million in recent
                                             academic funding and a dozen SBIR/STTRs.
                                            Founding CTO of ongoing intelligent surveillance
                                             company + 10 year involvement in another startup.
                                        Co-founder and President: Jim Wittenburg
                                            Serial Entrepreneur in Silicon Valley & Colorado Springs
                                             with 20 years experience with startup & early stage
                                             companies
                                            In prior CEO positions, successfully raised VC,
                                             Institution and Private Funding for Software & Hardware
                                             IT Companies
                                            Director Southern Colorado Investment Group
       29
                                     Other Team members
                                    Michael Enos: VP Business Development
Securics: The science of security™




                                             Founder & President H.I.S. Financial Services (sold in 2002)
                                             Experienced in Financial Services and imaging
                                             Serial Entrepreneur

                                    William Bishop: VP Engineering - 25 years experience
                                             Foundation software for Visible Human project
                                             Two Academy awards for advancement of state-of-the art imaging and
                                              special effects
                                             Previously developed Electronic Check Conversion system with Mr. Enos
                                             Currently leading Hand-Geometry Implementation, PI on 2 pending
                                              proposals.

                                    R. Woodworth:
                                        10 years Embedded system experience
                                        Finishing up MSEE with Dr. Boult at UCCS, with thesis topic doing
                                         embedded face biotopes (and recognition) in an FPGA based camera.


       30
                                     Advisory Board
                                        Gary Markle: President & CEO Colorado Springs Technology Incubator,
Securics: The science of security™




                                         Angel Investor, past CEO of 3 successful software companies.
                                        Michael Enos: President & CEO Levault Companies, Past Founder/CEO
                                         HIS Financial Services
                                        Julie Krueger: VP Infrastructure & Emerging technologies at JCB
                                         International Credit Card Company, Ltd.
                                        Laura McGuire: Chairman/Cofounder of Qgenisys, Chairman/Cofounder
                                         of deuxo, CEO/Founder Saligent, Inc. (150 employees) clients included
                                         United Technologies & Current
                                        Tony Cleberg: EVP Champion Enterprise, EVP Washington Group
                                         International, Corp. VP, Business Develop (Including M&A) Honeywell, Inc.,
                                         8 yrs. With Deloitte & Touché
                                        Margaret Cozzens: President/CEO Colorado Technology Institute, Vice
                                         Chancellor University of Colorado Denver, 7 yrs. Sr. Exec. Service at
                                         National Science Foundation, Chair Dept of Mathematics, Northwestern
                                         University
                                        Michael Semmens: President Semmens Group, Cofounder & President
                                         Austin Group Management and Investments, Corporate VP BDM
                                         International, Inc.


       31

				
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