BIO-key(US:BKYI)2023-06-08 16:00Accounts Receivable - As of March 31, 2023, accounts receivable increased to $3,985,988 from $2,096,569 as of December 31, 2022, representing a growth of approximately 90%[63] - The net accounts receivable after allowance for credit losses was $3,362,203 as of March 31, 2023, compared to $1,522,784 as of December 31, 2022, indicating a significant increase of about 121%[63] - As of March 31, 2023, two customers accounted for 45% of current accounts receivable, indicating a continued reliance on a limited number of customers for revenue[79] Revenue Concentration - For the three-month periods ended March 31, 2023, two customers accounted for 48% of revenues, while one customer accounted for 27% of revenues, highlighting a concentration in revenue sources[79] Business Growth and Market Demand - The company expects to grow its business in government services and highly-regulated industries, anticipating increased demand for security solutions, including biometrics, due to heightened security and privacy requirements[59] - The company anticipates that the superior portable biometric user experience for Windows 10 users will accelerate demand for its computer network log-on solutions and fingerprint readers[59] Business Model - The company operates a SaaS business model with subscription fees based on products used and the number of users, generating annual recurring revenue through noncancelable contracts with an average duration of approximately one year[58] Financial Instruments and Capital - 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[68] Compensation and Valuation - Restricted stock compensation for the three-month period ended March 31, 2023, was $59,056, compared to $39,840 for the same period in 2022, reflecting an increase of approximately 48%[73] - The company provided a full valuation allowance against its net deferred tax assets, indicating a belief that it is more likely than not that these assets will not be realized[80]