BIO-key(US:BKYI)2022-05-22 16:00Financial Performance - Total revenues for the three months ended March 31, 2022, were $1,941,171, representing an increase from $1,888,638 in the same period of 2021, a growth of approximately 2.8%[12] - Gross profit for the three months ended March 31, 2022, was $1,603,730, compared to $1,122,003 for the same period in 2021, indicating a significant increase of approximately 43%[12] - Operating loss for the three months ended March 31, 2022, was $(999,534), compared to $(836,046) for the same period in 2021, reflecting a deterioration in operating performance[12] - Net loss for the three months ended March 31, 2022, was $(999,403), compared to $(851,431) in the same period of 2021, representing an increase in net loss of approximately 17.4%[12] - Cash flow from operating activities showed a net cash used of $1,952,925, a decrease from $3,464,575 in the previous year[17] - The company generated approximately $5,114,000 in revenue during 2021, which is below its average monthly operational requirement of $814,000[31] Assets and Liabilities - Cash and cash equivalents as of March 31, 2022, were $5,801,121, down from $7,754,046 as of December 31, 2021, a decrease of approximately 25.2%[9] - Total current assets as of March 31, 2022, were $13,806,139, slightly down from $14,012,873 as of December 31, 2021, a decrease of about 1.5%[9] - Total liabilities increased to $4,021,432 as of March 31, 2022, from $2,153,586 as of December 31, 2021, an increase of approximately 86.8%[9] - Total stockholders' equity as of March 31, 2022, was $15,381,555, down from $15,615,455 as of December 31, 2021, a decrease of about 1.5%[9] - The company reported a significant increase in accounts payable, which rose to $175,341 from $65,165 year-over-year[17] - The company recorded an allowance for doubtful accounts of $213,785 as of March 31, 2022, remaining unchanged from December 31, 2021[54] Accounts Receivable and Revenue Recognition - The company reported an increase in accounts receivable, net, to $2,553,331 as of March 31, 2022, compared to $970,626 as of December 31, 2021, an increase of approximately 163%[9] - Accounts receivable as of March 31, 2022, totaled $2,817,116, significantly higher than $1,234,411 at December 31, 2021, marking an increase of approximately 128%[54] - The company recognized revenue of approximately $234,000 from deferred revenue during the three months ended March 31, 2022, compared to $305,000 in the same period of 2021[47] - Deferred revenue increased to approximately $854,000 as of March 31, 2022, compared to $633,000 at December 31, 2021, reflecting a growth of around 35%[47] Expenses - Research, development, and engineering expenses for the three months ended March 31, 2022, were $805,266, up from $441,651 in the same period of 2021, an increase of approximately 82.2%[12] - Share-based compensation expenses for the three months ended March 31, 2022, were $109,697, a decrease from $141,148 in the same period of 2021, reflecting a reduction of about 22%[55] - The company recorded a depreciation expense of $11,220 for the three months ended March 31, 2022, down from $25,115 in the same period of 2021[17] - Factoring fees incurred during the three months ended March 31, 2022, amounted to $18,727, compared to $13,347 in the same period of 2021, representing an increase of approximately 40%[56] Acquisitions - The company acquired Swivel Secure for a total purchase price of $1,379,589 in estimated intangible assets and $450,643 in estimated goodwill[19] - The company completed the acquisition of Swivel Secure Europe, SA for a total purchase price consideration of $2,373,487, including a cash payment of $1,273,483 and common stock valued at $600,004[49][50] - The earn-out from the acquisition of Swivel Secure is contingent upon generating $3,000,000 in revenue and $1,000,000 in operating profit during the earn-out period[49] Inventory and Operating Costs - As of March 31, 2022, total inventory increased to $4,956,472 from $4,940,660 as of December 31, 2021, with finished goods at $4,854,866[59] - The company recorded a total operating lease cost of $55,219 for the three months ended March 31, 2022, compared to $63,973 for the same period in 2021[73] - As of March 31, 2022, operating lease liabilities totaled $211,440, down from $264,162 as of December 31, 2021[73] Strategic Focus and Risks - The company acknowledges the presence of forward-looking statements in its quarterly report, which are subject to risks and uncertainties that may lead to actual results differing materially from those anticipated[94] - The company has a history of losses and limited revenue, which poses a risk to its future financial position[94] - The ability to raise additional capital is crucial for the company's ongoing operations and growth[94] - The company faces competition in the biometric technology and identity access management industries, impacting market acceptance of its products[94] - The ongoing COVID-19 pandemic has affected the company's business operations, sales cycles, and personnel[94] - The company is focused on expanding into Asia, Africa, and other foreign markets, which presents both opportunities and challenges[94] - Integration of operations and personnel from acquisitions, such as PistolStar and Swivel Secure, is a key strategic focus[94] - The company is monitoring the impact of geopolitical events, such as the hostilities in Ukraine, on its European customers[94] - Delays in product development could hinder the company's ability to execute its business strategy effectively[94] - The company does not undertake any obligation to revise forward-looking statements unless required by law[94]