BIO-key International, Inc. (NASDAQ:BKYI) Q2 2024 Earnings Conference Call August 15, 2024 10:00 AM ET Company Participants Bill Jones - Investor Relations Mike DePasquale - Chairman and Chief Executive Officer Cecilia Welch - Chief Financial Officer Conference Call Participants Jack Vander Aarde - Maxim Group Operator Good morning, everyone. Thank you for standing by and welcome to the BIO-key International First Quarter 2024 Conference Call. During management's prepared remarks, all participants will be i ...

Revenue Performance - Q2'24 revenues decreased to $1.1M from $1.9M in Q2'23, primarily due to a delay in recognizing approximately $450,000 in software license fees and lower project-related services revenue of approximately $200,000[2]. - The company reported a total of $3.3M in revenues for the first six months of 2024, down from $4.1M in the same period of 2023[7]. - Total revenues for the three months ended June 30, 2024, were $1,141,286, a decrease of 40.9% compared to $1,928,929 for the same period in 2023[13]. Profitability and Loss - Gross profit improved to $0.9M with a 77.0% gross margin in Q2'24, compared to $0.3M and a 16.7% gross margin in Q2'23, mainly due to the impact of a $1M hardware reserve in Q2'23[2][8]. - Q2'24 net loss was reduced to $1.7M, or $1.00 per share, from a net loss of $2.6M, or $4.71 per share, in Q2'23[9]. - Operating loss for the three months ended June 30, 2024, was $(1,654,086), an improvement from $(2,378,527) in the same period last year[13]. - The company reported a net loss of $(1,666,950) for the three months ended June 30, 2024, compared to $(2,622,878) for the same period in 2023[13]. - Net loss for the six months ended June 30, 2024, was $2,177,236, an improvement from a net loss of $4,311,200 for the same period in 2023, representing a 49.5% reduction in losses[15]. Cash Flow and Operating Activities - Cash used in operating activities improved by 48% to $1.1M in the first six months of 2024, compared to $2.1M in the same period of 2023[2]. - Cash used in operating activities decreased to $1,123,533 for the six months ended June 30, 2024, compared to $2,095,192 in the prior year, indicating a 46.5% improvement[15]. - Cash and cash equivalents increased to $1,260,351 as of June 30, 2024, compared to $511,400 at December 31, 2023[14]. - Cash and cash equivalents at the end of the period increased to $1,260,351, up from $565,513 at the end of June 30, 2023, reflecting a 123.5% increase[15]. Assets and Liabilities - Current assets as of June 30, 2024, were approximately $3.0M, including $1.3M in cash and cash equivalents, compared to $2.6M at the end of 2023[10]. - Total current assets rose to $3,014,529 as of June 30, 2024, up from $2,622,157 at December 31, 2023[14]. - Total liabilities increased to $5,855,288 as of June 30, 2024, compared to $3,453,470 at December 31, 2023[14]. - The company’s accumulated deficit increased to $(127,184,445) as of June 30, 2024, from $(125,007,210) at December 31, 2023[14]. - Total stockholders' equity was $(1,056,292) as of June 30, 2024, compared to $1,063,565 at December 31, 2023[14]. Cost Management and Expenses - Operating expenses were trimmed by $0.2M in Q2'24 compared to Q2'23, reflecting ongoing cost management initiatives[2][8]. - The company recorded a depreciation expense of $46,069 for the six months ended June 30, 2024, compared to $26,637 in the same period last year, representing a 73.1% increase[15]. - The company incurred capital expenditures of $1,869, a new investment compared to no capital expenditures in the same period last year[15]. Business Development and Strategy - BIO-key introduced Passkey:YOU, a biometric FIDO Passkey Authentication Solution, aimed at enhancing security in identity management[3][6]. - BIO-key is focused on building a base of high-margin annually recurring revenues (ARRs) to support future growth[7]. - The company remains optimistic about the growth potential of its new solutions amid increasing regulatory standards for cybersecurity[6]. Deferred Revenue and Inventory Management - Deferred revenue increased significantly to $414,878 from $174,437 year-over-year, indicating a 137.5% growth[15]. - Inventory changes showed a cash inflow of $12,558, contrasting with a cash outflow of $50,271 in the previous year, indicating improved inventory management[15]. Financing Activities - Proceeds from Note Payable amounted to $2,000,000, contributing positively to financing activities[15]. - The effect of exchange rate changes resulted in a cash outflow of $38,055, compared to a cash inflow of $67,490 in the prior year, highlighting currency volatility impacts[15]. - The company reported a significant increase in accounts payable, which rose to $258,384 from $726,657, indicating changes in payment terms or supplier relationships[15].

Financial Performance - Total revenues for the three months ended June 30, 2024, were $1,141,286, a decrease of 40.9% compared to $1,928,929 for the same period in 2023[7]. - For the six-month period ended June 30, 2024, total revenues were $3,322,489, down 19.2% from $4,112,696 in the same period of 2023[25]. - The company reported a gross profit of $879,014 for the three months ended June 30, 2024, compared to $322,818 for the same period in 2023, showing a substantial increase in profitability[7]. - Gross profit for the six months ended June 30, 2024, was $2,760,574, compared to $1,186,311 for the same period in 2023, indicating an increase of approximately 133.3%[7]. - The company reported a comprehensive loss of $(1,642,730) for the three months ended June 30, 2024, compared to $(2,602,994) for the same period in 2023, reflecting a reduction of approximately 37%[7]. - Basic and diluted loss per common share for the three months ended June 30, 2024, was $(1.00), compared to $(4.71) for the same period in 2023, indicating an improvement of approximately 78.8%[7]. - Operating loss for the three months ended June 30, 2024, was $(1,654,086), an improvement from $(2,378,527) for the same period in 2023, indicating a 30.5% reduction in losses[7]. - Net loss for the six months ended June 30, 2024, was $(2,177,236), compared to $(4,311,200) for the same period in 2023, showing a decrease in loss of approximately 49.6%[7]. Cash and Liquidity - Cash and cash equivalents increased to $1,260,351 as of June 30, 2024, from $511,400 as of December 31, 2023, indicating a significant liquidity improvement[5]. - The company reported cash and cash equivalents of $1,260,351 at the end of the period, an increase of $748,951 from the previous period[14]. - Total cash and cash equivalents at the end of the period were $1,260,351, up from $565,513 at the end of June 2023, reflecting a 123.5% increase[14]. - Cash used in operating activities for the first half of 2024 was $1,123,533, significantly reduced from $2,095,192 in the prior year, indicating a 46.4% decrease[14]. - The company reported a net cash increase of $748,951 for the six months ended June 30, 2024, compared to a decrease of $2,070,009 in the same period of 2023[14]. Assets and Liabilities - Total current assets rose to $3,014,529 as of June 30, 2024, compared to $2,622,157 as of December 31, 2023, reflecting a 14.9% increase[5]. - Total liabilities increased to $5,855,288 as of June 30, 2024, from $3,453,470 as of December 31, 2023, marking a 69.7% rise[5]. - The company’s total stockholders' equity decreased to $(1,056,292) as of June 30, 2024, from $1,063,565 as of December 31, 2023[5]. - Total current liabilities surged to $5,574,685, compared to $3,213,389, reflecting an increase of approximately 73.5%[5]. - The accumulated deficit widened to $(127,184,445) from $(125,007,210), an increase of approximately 1.7%[5]. Shareholder Equity and Stock - The weighted average common shares outstanding for the three months ended June 30, 2024, were 1,663,042, compared to 556,758 for the same period in 2023, reflecting a significant increase due to the reverse stock split[7]. - The total common shares outstanding as of June 30, 2024, were 1,815,618, reflecting a reverse stock split effective December 21, 2023[10]. - The company issued common stock for directors' fees amounting to $9,003 and for employee stock purchase plans totaling $1,939 during the period[14]. - The Company issued 1,390 shares of common stock to employees on June 28, 2024, resulting in a non-cash compensation expense of $456[44]. - The Company recorded share-based compensation of $96,561 for the six months ended June 30, 2024, compared to $120,767 for the same period in 2023[47]. Revenue and Deferred Revenue - Deferred revenue increased by $414,878 for the six months ended June 30, 2024[14]. - The company reported a deferred revenue of approximately $858,000 as of June 30, 2024, compared to $443,000 at the end of 2023[26]. - Revenue recognized from deferred revenue for the six months ended June 30, 2024, was approximately $431,000, compared to $335,000 for the same period in 2023, showing an increase of about 28.7%[26]. - Deferred revenue increased significantly to $715,193 from $414,968, representing a growth of about 72.5%[5]. Operational Challenges and Strategies - The company has experienced substantial net losses and negative cash flows, raising doubts about its ability to continue as a going concern[22]. - The company is facing risks related to its ability to raise additional capital and the potential delisting from Nasdaq if stockholders' equity does not reach at least $2.5 million[4]. - The company has reduced marketing, research and development, and rent expenses in response to financial challenges[23]. - The company is exploring new markets and opportunities to sell or return products to generate additional cash[23]. - The company is actively working on integrating operations and personnel from Swivel Secure as part of its market expansion strategy[4]. Notes and Agreements - The Company signed a note purchase agreement on June 24, 2024, issuing a $2,360,000 principal amount senior secured promissory note, with $2,000,000 funded at closing for general working capital[36]. - The 2024 Note carries an interest rate of 9% per annum and is due eighteen months after issuance, with an exit fee of 7% on repayments[37]. - The Company issued a $2,200,000 principal amount senior secured promissory note on December 22, 2022, with $2,002,000 funded for general working capital[41]. - The Company repaid $1,400,000 of principal on October 31, 2023, and the remaining $800,000 was repaid on December 21, 2023, resulting in the Note being paid in full as of December 31, 2023[42].

Engage with BIO-key Facebook – Corporate: https://www.facebook.com/BIOkeyInternational/ LinkedIn – Corporate: https://www.linkedin.com/company/bio-key-international Twitter – Corporate: @BIOkeyIntl Twitter – Investors : @BIO_keyIR StockTwits: BIO_keyIR About BIO-key International, Inc. (www.BIO-key.com) BIO-key is revolutionizing authentication and cybersecurity with biometric-centric, multi-factor identity and access management (IAM) software securing access for over forty million users. BIO-key allows cus ...

BIO-key International, Inc. (NASDAQ:BKYI) Q1 2024 Earnings Conference Call June 18, 2024 10:00 AM ET Corporate Participants Bill Jones - Investor Relations Mike DePasquale - Chairman and Chief Executive Officer Ceci Welch - Chief Financial Officer Jim Sullivan - Chief Legal Officer Conference Call Participants Operator Good morning, everyone. Thank you for standing by, and welcome to BIO-key International's First Quarter 2024 Conference Call. During management's prepared remarks, all participants will be in ...

Identity and Access Management Software Provider BIO-key Reports Q1'24 Revenue of $2.2M and Positive Operating Cash Flow; Hosts Investor Call Tuesday, 10am ET ● Fargo, ND and Junction City, KS Chose PortalGuard with Biometric Authentication ● Bridgetown, Barbados Credit Union Selected PortalGuard with Biometrics for Shared Workstations "We continue to pursue large enterprise opportunities through our direct sales channel, looking to build on recent successes in this area. We are also working to support our ...

Table of Contents FORM 10-Q For the quarterly period ended March 31, 2024 or ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT Commission file number 1-13463 DELAWARE 41-1741861 (State or Other Jurisdiction of Incorporation of Organization) (IRS Employer Identification Number) (Address of Principal Executive Offices) (Zip Code) Securities registered pursuance to Section 12(b) of the Act: Common Stock, par value $0.0001 per share BKYI Nasdaq Capital Market Indicate by check mark whether the r ...

| --- | --- | --- | --- | |-------------------------|-------|-----------------------------------------------------------|--------| | | | | | | Conference Call Details | | | | | Date / Time: | | Tuesday, June 18th at 10 a.m. ET | | | Call Dial In #: | | 1-877-418-5460 U.S. or 1-412-717-9594 Int'l | | | Live Webcast / Replay: | | Webcast & Replay Link – Available for 3 months. | | | Audio Replay: | | 1-877-344-7529 U.S. or 1-412-317-0088 Int'l; code 1988012 | | | BIO-key at a Glance | | | | | Recent Price | $ ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K COMMISSION FILE NUMBER: 1-13463 Securities registered pursuant to Section 12(b) of the Act: Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Table of Contents Non-accelerated filer ☒ Smaller reporting company ☒ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial st ...

NEW YORK and HOLMDEL, N.J., May 31, 2024 (GLOBE NEWSWIRE) -- BIO-key® International, Inc. (NASDAQ:BKYI), an innovative provider of workforce and customer Identity and Access Management (IAM) and Identity-Bound Biometric (IBB) solutions will participate in the 2024 Virtual Tech Conference Series, presented by Maxim Group LLC and hosted by M-Vest June 4th-5th. BIO-key's CEO Mike DePasquale will join a Fireside chat with Maxim on Tuesday, June 4th from 9:00 to 9:30 a.m. ET. The conference, including panel disc ...