BIO-key(US:BKYI)2024-08-14 21:00Financial 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].