AuthID gets another lifeline with some serious strings attached
A long-time investor in authID has cleaned house at the biometric authentication provider, including the CEO, who one year ago pulled authID’s finger out of the wringer when an investment deal crumbled.
Stephen Garchik has agreed to finance authID‘s “reduced” capital requirements through the first quarter of 2024 – anticipated to be $3.6 million.
Florida-resident Garchik is the company’s largest shareholder, and as part of the March 10 deal, approved an initial $900,000 drawdown on the $3.6 million.
He has imposed conditions beyond interest, too.
Garchik demanded and received resignation letters from CEO and board member Tom Thimot and Chairman Phillip Kumnick and board members Philip Broenniman, Michael Gorriz and Neepa Patel.
Thimot will leave “by early April,” when the company anticipates hiring his replacement, according to the company.
Garchik also put four new board members in. They are Rhon Daguro, the former chief revenue officer of Socure; Ken Jisser, president of The Pipeline Group; Thomas Szoke, founder and a former officer of authID; and Michael Thompson, a partner at Hemingway Capital
A year ago to the month, Thimot had crafted a $22.5 million working capital finance package that included a $10 million line of credit when one of the investors, who was not named, balked.
The reworked loan was to cover two years – twice as long as the newest facility, according to reporting by news site Insider, which published the slide deck that ultimately rescued the deal.
The fidgety investor tried to come back with a renegotiated deal, but Thimot had already convinced other investors (including billionaire hedge-fund manager Jamie Dinan) to refill the bucket. The Insider story states that Dinan more than doubled his holdings in authID with his investment.
Perhaps late in the process, the mystery investor saw Thimot’s budget as inflated or anticipated lower revenue in an uncertain economy.
The deal announced March 10 actually is a reworking of the upturned deal signed last March.
The end result for the publicly traded SaaS company is a smaller working capital budget.
AuthID’s biometrics were integrated with BeyondTrust’s enterprise access security platform in February.