Company Overview - BIO-key International, Inc. is an innovative provider of workforce and customer Identity and Access Management solutions featuring passwordless, phoneless, and tokenless Identity-Bound Biometric authentication [1] - The company secures access for over forty million users through its biometric-centric, multi-factor identity and access management (IAM) software [2] Upcoming Events - BIO-key will host its second quarter 2025 investor call on August 13th at 10 a.m. ET, with results released before the stock market opens [1] - The call will be led by Mike DePasquale, Chairman & CEO, and Cecilia Welch, CFO, and will include a Q&A session [1] Call Details - The investor call can be accessed via dial-in numbers: 1-877-418-5460 for U.S. and 1-412-717-9594 for international participants [2] - A live webcast and replay will be available for three months [2] - Audio replay can be accessed at 1-877-344-7529 for U.S. and 1-412-317-0088 for international, using code 8281392 [2] Engagement Channels - BIO-key maintains a presence on various social media platforms including Facebook, LinkedIn, and X [3] - Investor contacts are available through Catalyst IR for further inquiries [3]

Core Insights - BIO-key International, Inc. has joined ISMS Forum, Spain's leading cybersecurity association, to enhance its commitment to cybersecurity resilience and robust security strategies in Spain [1][2] - The collaboration aims to drive innovation in identity and access management, Zero Trust security, and regulatory compliance [2] Company Overview - BIO-key is a leader in Identity and Access Management (IAM) and biometric authentication solutions, securing access for over 40 million users [4] - The company offers a range of authentication options, including phoneless, tokenless, and passwordless biometric solutions, through its PortalGuard IAM software [4] Industry Context - ISMS Forum promotes best practices, innovation, and knowledge-sharing to strengthen cybersecurity resilience across various industries in Spain [3] - The organization plays a key role in shaping the cybersecurity landscape through working groups, research initiatives, and conferences [3]

Core Insights - BIO-key International, Inc. has received over $600K in new orders from a prominent defense ministry for its biometric user authentication solutions, which include both hardware and software to be delivered in the current quarter [1][2]. Group 1: Company Overview - BIO-key specializes in identity and access management (IAM) solutions that utilize Identity-Bound Biometrics (IBB) for secure authentication without the need for tokens or passwords [1][5]. - The company’s biometric authentication platform is noted for being more reliable, cost-effective, and secure compared to traditional hardware security keys [3]. Group 2: Recent Developments - The defense ministry has integrated BIO-key's biometric solution into programs that provide authentication access to digital services for over 47,000 users, utilizing more than 40,000 fingerprint scanners [2]. - BIO-key anticipates further awards as the defense ministry expands its use of the biometric solutions [2]. Group 3: Strategic Importance - The deployment of BIO-key's technology is seen as a significant endorsement of its innovation and capability, as the defense ministry is recognized as a leader in cybersecurity technologies [4]. - The company aims to grow its presence in high-stakes applications within the defense sector, building on its existing customer base across various industries including government, manufacturing, finance, and retail [4].

Core Insights - BIO-key International, Inc. has formed a strategic partnership with Runlevel to enhance cybersecurity solutions in Portuguese-speaking African countries and Timor-Leste [1][2] - The partnership aims to address increasing cybersecurity challenges faced by businesses and government institutions in these regions [2][3] Company Overview - BIO-key is a leader in Identity and Access Management (IAM) solutions, focusing on Identity-Bound Biometrics (IBB) [1][5] - The company secures access for over 40 million users with its biometric-centric, multi-factor IAM software [5] Partnership Details - Runlevel joins BIO-key's Channel Alliance Partner program as a Value-Added Reseller, providing pre-sales consulting, deployment support, and technical training tailored to local regulatory requirements [2][3] - The first major deployment involves a National Bank in Mozambique, utilizing a comprehensive suite of BIO-key's biometric-based IAM solutions [3] Market Opportunity - The partnership is positioned to expand the adoption of BIO-key solutions across the region, particularly in the financial sector, which is experiencing a growing need for robust IAM solutions [3][4] - Runlevel's expertise in the local cybersecurity landscape and relationships with key enterprises and public institutions enhance BIO-key's market reach [3]

Summary of BIO-key International (BKYI) Conference Call - May 22, 2025 Company Overview - **Company Name**: BIO-key International - **Ticker Symbol**: BKYI - **Industry**: Identity and Access Management Solutions - **Market Presence**: Public for over 25 years, trading on NASDAQ - **Current Market Capitalization**: Approximately $5 million with 6.3 million shares outstanding [8] Core Business Insights - **Product Offering**: Provides phone-less, token-less solutions for authentication and access management [7] - **Revenue Growth**: LTM revenue slightly over $6 million, with an ARR of approximately $6 million, indicating strong recurring revenue growth potential [8][10] - **Gross Margins**: Blended gross margins exceed 80%, highlighting a high-margin business model [10] Market Position and Valuation - **Stock Price Range**: Traded between $0.50 and $3.60 over the past year [8] - **Valuation Comparison**: Currently trading at a 70% discount to average tech sector multiples, which range from 2.2 times sales to over 10 times [9] Industry Trends and Demand - **Cybersecurity Demand**: Increasing demand for cybersecurity solutions, particularly multi-factor authentication (MFA), driven by mandates from major tech companies like Amazon, Microsoft, and Google [12] - **Use Cases**: Solutions applicable in various sectors including banking, healthcare, education, and government, with a focus on reducing cyber risk and improving usability [13][20] Strategic Partnerships and Growth - **New Partnerships**: Recent partnership with Cloud Distribution Inc. to expand presence in the Middle East, expected to generate significant revenue [27][28] - **Customer Base Expansion**: Added significant clients such as the National Bank of Egypt, indicating growth in international markets [21] Competitive Landscape - **Competitors**: Competes with companies like Okta, SailPoint, and ForgeRock, while also partnering with them for biometric authentication solutions [33] - **Market Strategy**: Focus on capturing market share through unique biometric offerings that enhance security and usability [33] Future Outlook - **Growth Strategy**: Plans to continue launching new products, expanding channel alliances, and enhancing solutions, particularly in AI and drone-based markets [25] - **Defense Sector Opportunities**: Positioned to benefit from increased defense budgets in Europe, particularly in Germany, which plans to invest $1 trillion over the next decade [31][32] - **Operational Stability**: Reduced operating expenses and stable support structure, with no plans for additional capital raising, focusing on scaling operations [29][30] Conclusion - **Investment Opportunity**: BIO-key International presents a compelling investment opportunity due to its unique product offerings, strong market position, and growth potential in a rapidly evolving cybersecurity landscape [7][10]

Company Participation - BIO-key International, Inc. will participate in the Aegis Capital Corp. 2025 Virtual Conference on May 22, 2025, and the Maxim Virtual Tech Conference on June 4, 2025 [1][2] Conference Details - The Aegis Capital Virtual Conference presentation is scheduled for May 22, 2025, from 11:30 to 11:55 a.m. ET [2] - The Maxim Virtual Tech Conference will feature a fireside chat with Maxim Analyst Jack Vander Aarde on June 4, 2025, at 11:00 a.m. ET [2] Company Overview - BIO-key is a provider of Identity and Access Management (IAM) solutions, focusing on passwordless, phoneless, and tokenless biometric authentication, securing access for over 40 million users [4] - The company's PortalGuard IAM solution offers a cost-effective and secure way to access computers, information, applications, and high-value transactions [4]

Company Participation - BIO-key International, Inc. will participate in the Aegis Capital Corp. 2025 Virtual Conference on May 22, 2025, and the Maxim Virtual Tech Conference on June 4, 2025 [1][2] Conference Details - The Aegis Capital presentation is scheduled for May 22, 2025, from 11:30 to 11:55 a.m. ET, with a webcast link provided [2] - The Maxim conference will feature a fireside chat with Maxim Analyst Jack Vander Aarde on June 4, 2025, at 11:00 a.m. ET, requiring M-Vest membership for access [2] Company Overview - BIO-key is a provider of biometric-centric, multi-factor identity and access management (IAM) software, securing access for over 40 million users [4] - The company offers various authentication options, including phoneless, tokenless, and passwordless biometric solutions, through its PortalGuard IAM solution [4]

Core Insights - BIO-key International, Inc. has formed a strategic partnership with Cloud Distribution Co. to enhance its presence in the Middle East market, particularly in Saudi Arabia and the UAE [1][4] - Cloud Distribution Co. will allocate dedicated resources, including a Pre-Sales Engineer, a Business Development Manager, and a Project Manager, to support BIO-key's expansion efforts [2] - The partnership aims to deliver BIO-key's advanced Identity and Access Management (IAM) and biometric authentication solutions to enterprises and public institutions in the region [1][3] Company Overview - BIO-key is a leader in Identity and Access Management (IAM) and biometric authentication solutions, securing access for over 40 million users [6] - The company offers a range of authentication options, including phoneless, tokenless, and passwordless biometric solutions, through its PortalGuard IAM platform [6][8] - Cloud Distribution Co. is a prominent Value-Added Distributor in the Middle East, focusing on cybersecurity and infrastructure solutions, and is part of the Ideal Group [5]

Financial Data and Key Metrics Changes - Q1 2025 revenue increased by 10% to $1.6 million compared to Q4 2024, but decreased year-over-year due to a $1.2 million revenue from a financial services customer in Q1 2024 [5][16] - Gross profit margin remained healthy at 83%, with a reduction in SG&A expenses by 23% year-over-year [8][17] - Net loss for Q1 2025 increased to approximately $737,000 or $0.16 per share, compared to a loss of $573,000 or $0.32 per share in the prior year [17][18] Business Line Data and Key Metrics Changes - Service revenues increased to approximately $73,000 from $213,000 in Q1 2024, while recurring support service revenue rose by 37% to $265,000 [16] - Hardware revenue significantly increased to $236,000 in Q1 2025 from $18,000 in Q1 2024, driven by increased purchases of fingerprint biometric scanners [17] Market Data and Key Metrics Changes - The company is seeing solid traction in key verticals such as defense and financial services, with significant interest in identity bound biometric solutions [9][12] - The National Bank of Egypt began integrating BIO key's PortalGuard IAM platform, which could lead to further revenue opportunities [9][10] Company Strategy and Development Direction - The company is refocusing efforts on BIO key branded solutions in the EMEA region, transitioning away from Swivel Secure license solutions, which is expected to enhance margins [12][15] - There is a strong emphasis on passwordless, phoneless, and tokenless authentication solutions, which are anticipated to drive growth in 2025 and beyond [14][32] Management's Comments on Operating Environment and Future Outlook - Management noted that enterprises are beginning to recognize the limitations of legacy authentication methods, leading to increased demand for more secure IAM solutions [13][32] - The company expects to achieve improved top and bottom line results, supported by a growing base of recurring revenue [14][41] Other Important Information - The cash position increased to over $3 million, reflecting proceeds from warrant exercises [8][18] - The company has reduced its note payable by more than half, improving its balance sheet [8] Q&A Session Summary Question: Clarification on the large customer revenue and future expectations - The large customer is now the company's single largest customer, with an expected renewal of approximately $3 million over a two-year period starting in Q1 2026 [21][23] Question: Breakdown of Q1 2025 revenue sources - Revenue was a mix from service and maintenance, new customer revenue, and upgrades to the installed base [26][27] Question: Contribution of Wyoming Department of Education and National Bank of Egypt to Q2 revenue - Both were Q1 events, with potential for ongoing opportunities from the National Bank of Egypt [28] Question: Update on PassKey U solution - The PassKey solution is gaining traction and can be layered on existing security infrastructures [29][30] Question: Outlook on defense budget increases in EMEA - There are significant opportunities due to increased defense budgets in countries like Germany and Spain [33][34] Question: Expectations for cash burn and accounts receivable - Cash burn is expected to decrease, and accounts receivable levels are being managed carefully [58][60] Question: Clarification on government defense ministries as customers - The company serves government defense ministries directly, not contractors [64] Question: Update on inventory and tariffs - Inventory in China is not significantly affecting prices, and the company is actively pursuing the sale of written-off inventory [73]

Financial Data and Key Metrics Changes - In Q1 2025, the company's revenue increased by 10% to $1.6 million compared to Q4 2024, but decreased year-over-year due to a $1.2 million revenue from a financial services customer in Q1 2024 [5][17] - Gross profit remained strong at 83%, with a reduction in SG&A expenses by 23% year-over-year [7][18] - The net loss for Q1 2025 increased to approximately $737,000 or $0.16 per share, compared to a loss of $573,000 or $0.32 per share in the prior year [18][19] Business Line Data and Key Metrics Changes - Service revenues in Q1 2025 increased to approximately $73,000 from $213,000 in Q1 2024, while recurring support service revenue rose by 37% to $265,000 [17] - Hardware revenue saw a significant increase to $236,000 in Q1 2025 from $18,000 in Q1 2024, driven by increased purchases of fingerprint biometric scanners [18] Market Data and Key Metrics Changes - The company is experiencing solid traction in key verticals such as defense and financial services, with notable projects like the integration of BIO key's PortalGuard IAM platform by the National Bank of Egypt [9][10] - The Wyoming Department of Education deployed PortalGuard iDAS to support up to 20,000 end users, contributing to the company's growth in the education sector [11] Company Strategy and Development Direction - The company is focusing on expanding its BIO key branded solutions in the EMEA region, transitioning away from lower-margin Swivel Secure services [12][16] - There is a strategic emphasis on passwordless, phoneless, and tokenless authentication solutions, which are expected to drive growth and improve margins [14][32] Management's Comments on Operating Environment and Future Outlook - Management noted that there is increasing recognition among enterprises and governments of the limitations of legacy authentication methods, leading to a growing demand for more secure IAM solutions [13][32] - The company aims for sequential growth throughout 2025, despite potential seasonality challenges in Q3 due to the August holiday in Europe [41][42] Other Important Information - The cash position improved significantly to over $3 million, reflecting proceeds from warrant exercises [7][19] - The company reduced its note payable by more than half, enhancing its balance sheet and supporting growth opportunities [8] Q&A Session Summary Question: Clarification on the large customer and future revenue expectations - The large customer is now the company's single largest customer, with an expected renewal of approximately $3 million over a two-year period starting in Q1 2026 [22][24] Question: Contribution of other customers to Q1 revenue - Revenue in Q1 2025 was a mix from various sources, including service and maintenance revenue, new customer revenue, and upgrades to the installed base [27][28] Question: Outlook for the second quarter and seasonality - Management expects to grow sequentially, with Q2 showing potential for continued growth despite typical seasonality challenges in Q3 [41][42] Question: Insights on operating expenses and margin outlook - The company aims to maintain gross margins in the 80% range and is focused on controlling operating expenses [47][48] Question: Update on defense contracts and international opportunities - The company is engaged with government defense ministries, with potential for sizable recurring revenue opportunities [64][66]