BIO-key(US:BKYI)2025-05-15 20:31Financial Performance - For the three months ended March 31, 2025, total revenues decreased by 26% to $1,607,159 from $2,181,203 in the same period in 2024[88]. - Service revenues increased by 28% to $272,598, while license revenues decreased by 44% to $1,098,758, and hardware sales surged by 1236% to $235,803[88][90][91]. - The cost of goods sold decreased by 7% to $279,498, with service costs down by 29% and license fees down by 51%[88][92]. - Selling, general and administrative expenses decreased by 23% to $1,372,524 from $1,782,973 in the corresponding period in 2024[93]. - Research, development, and engineering costs decreased by 2% to $595,775 compared to $607,521 in the same period in 2024[94]. Cash Flow and Financing - Net cash used in operations during the three months ended March 31, 2025, was $835,312[97]. - Net cash provided by financing activities was $3,529,227, primarily from the exercise of warrants totaling $3,813,057[97]. - On January 15, 2025, the company entered into a warrant exercise agreement resulting in gross proceeds of approximately $3.8 million from the exercise of 2,061,112 shares at an exercise price of $1.85 per share[100]. - On September 12, 2024, the company reduced the exercise price of certain warrants to $1.85 per share, generating gross proceeds of approximately $1.9 million from the exercise of 1,030,556 shares[101]. - The company issued a $2,360,000 principal amount senior secured promissory note, resulting in gross proceeds of approximately $1,826,000 after deductions[102]. - As of March 31, 2025, the company had total cash and cash equivalents of $3,133,752, compared to $437,604 at December 31, 2024, and working capital of approximately $1,124,000[105]. - The company requires approximately $812,000 per month to conduct operations, which has not been consistently achieved through revenue generation[105]. - The company has entered into an accounts receivable factoring arrangement, selling a minimum of $150,000 per quarter of accounts receivable on a non-recourse basis[104]. - Negative cash flows related to changes in accounts receivable, accounts payable, and accrued liabilities amounted to approximately $583,000 due to working capital management[103]. - The company may need to obtain additional third-party financing within the next twelve months if sufficient revenue is not generated[106]. Strategic Plans - The company plans to continue expanding its role in the IAM market and expects increased demand for security solutions in government services and highly-regulated industries[80][81]. - The company aims to pursue strategic acquisitions in the IAM space to enhance its market presence and operational synergies[83]. - The company anticipates capital expenditures to be less than $100,000 during the next twelve months[99]. - The company has approximately $3.4 million of inventory reserved for projects in Nigeria and is exploring other markets to generate additional cash[105]. - The company is dependent on the successful commercialization of its technologies and obtaining adequate financing for long-term viability and growth[106].