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BIO-key(BKYI) - 2022 Q2 - Quarterly Report
BKYIBIO-key(BKYI)2022-08-16 16:00
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Financial Performance - Total revenues for the three months ended June 30, 2022, were 1,947,115,representingasignificantincreasefrom1,947,115, representing a significant increase from 992,090 for the same period in 2021, reflecting a growth of approximately 96.5%[9] - The company reported a net loss of 1,718,957forthethreemonthsendedJune30,2022,comparedtoanetlossof1,718,957 for the three months ended June 30, 2022, compared to a net loss of 1,161,683 for the same period in 2021, indicating a deterioration in financial performance[9] - The net loss for the six months ended June 30, 2022, was 2,718,360,comparedtoanetlossof2,718,360, compared to a net loss of 2,013,114 for the same period in 2021, indicating a worsening financial performance year-over-year[15] - The company reported a comprehensive loss of 1,884,840forthethreemonthsendedJune30,2022,comparedtoacomprehensivelossof1,884,840 for the three months ended June 30, 2022, compared to a comprehensive loss of 1,161,683 for the same period in 2021, indicating a significant increase in losses[9] Assets and Liabilities - Cash and cash equivalents decreased to 4,893,042asofJune30,2022,downfrom4,893,042 as of June 30, 2022, down from 7,754,046 as of December 31, 2021, representing a decline of approximately 37.5%[7] - Total current assets decreased to 12,348,986asofJune30,2022,comparedto12,348,986 as of June 30, 2022, compared to 14,012,873 as of December 31, 2021, a reduction of about 11.9%[7] - Total liabilities increased to 4,005,366asofJune30,2022,upfrom4,005,366 as of June 30, 2022, up from 2,153,586 as of December 31, 2021, reflecting an increase of approximately 85.8%[7] - As of June 30, 2022, the total stockholders' equity was 13,619,539,adecreasefrom13,619,539, a decrease from 15,381,555 as of March 31, 2022, reflecting a net loss of 1,718,957duringthequarter[10]RevenueRecognitionandDeferredRevenue−TheCompanyappliesASC606forrevenuerecognition,whichincludesidentifyingcontracts,performanceobligations,andrecognizingrevenueasobligationsaresatisfied[32][41]−DeferredrevenuerepresentstheCompany′sremainingperformanceobligationsrelatedtoprepaidsupportandmaintenance,expectedtoberecognizedoveronetofiveyears[46]−DeferredrevenueasofJune30,2022,wasapproximately1,718,957 during the quarter[10] Revenue Recognition and Deferred Revenue - The Company applies ASC 606 for revenue recognition, which includes identifying contracts, performance obligations, and recognizing revenue as obligations are satisfied[32][41] - Deferred revenue represents the Company's remaining performance obligations related to prepaid support and maintenance, expected to be recognized over one to five years[46] - Deferred revenue as of June 30, 2022, was approximately 660,000, an increase from 633,000onDecember31,2021[47]−RevenuerecognizedfromdeferredrevenueforthethreeandsixmonthsendedJune30,2022,wasapproximately633,000 on December 31, 2021[47] - Revenue recognized from deferred revenue for the three and six months ended June 30, 2022, was approximately 153,000 and 387,000,respectively[47]OperatingExpenses−OperatingexpensesforthethreemonthsendedJune30,2022,totaled387,000, respectively[47] Operating Expenses - Operating expenses for the three months ended June 30, 2022, totaled 2,790,656, compared to 1,865,036forthesameperiodin2021,indicatinganincreaseofapproximately49.41,865,036 for the same period in 2021, indicating an increase of approximately 49.4%[9] - The company incurred 1,067,372 in goodwill from the acquisition of Swivel Secure, along with 762,860inintangibleassets,highlightingsignificantinvestmentingrowththroughacquisition[18]−Share−basedcompensationforemployeesandconsultantsamountedto762,860 in intangible assets, highlighting significant investment in growth through acquisition[18] - Share-based compensation for employees and consultants amounted to 153,370 during the same period, reflecting ongoing investment in human capital[15] - Share-based compensation expenses for the three months ended June 30, 2022, totaled 83,699,comparedto83,699, compared to 41,123 for the same period in 2021[56] Acquisition and Goodwill - The acquisition of Swivel Secure was completed for a total purchase price consideration of 2,373,487,includingacashpaymentof2,373,487, including a cash payment of 1,273,483 and common stock valued at 600,004[49][50]−ThefairvalueofassetsacquiredintheSwivelSecureacquisitiontotaled600,004[49][50] - The fair value of assets acquired in the Swivel Secure acquisition totaled 3,349,371, resulting in goodwill of 1,067,372[50]−TheCompanyhasnotidentifiedanyimpairmenttogoodwillasofthelatestassessment[26]−TheannualgoodwillimpairmenttestwillbeperformedasofDecember31stofeachyear[26]CashFlowandFinancialManagement−TheCompanygeneratedapproximately1,067,372[50] - The Company has not identified any impairment to goodwill as of the latest assessment[26] - The annual goodwill impairment test will be performed as of December 31st of each year[26] Cash Flow and Financial Management - The Company generated approximately 3,888,286 in revenue during the first half of 2022, which is below its average monthly requirement of approximately 814,000[31]−Cashandcashequivalentsattheendoftheperiodwere814,000[31] - Cash and cash equivalents at the end of the period were 4,893,042, down from 7,754,046atthebeginningoftheperiod,representinganetdecreaseof7,754,046 at the beginning of the period, representing a net decrease of 2,861,004[15] - Accounts receivable decreased by 390,660,indicatingpotentialchallengesincashflowmanagement[15]−AccountsreceivableasofJune30,2022,was390,660, indicating potential challenges in cash flow management[15] - Accounts receivable as of June 30, 2022, was 2,302,847, significantly up from $1,234,411 on December 31, 2021[55] Tax and Regulatory Matters - The Company recorded no income tax expense for the three and six months ended June 30, 2022, due to an estimated annual effective tax rate of zero[96] - The Company has a full valuation allowance against its net deferred tax assets as of June 30, 2022, indicating uncertainty in realizing these assets[97] Customer Concentration - One customer accounted for 12% of revenue for the three months ended June 30, 2022, and one customer accounted for 14% for the six months ended June 30, 2022[94]