Financial Data and Key Metrics Changes - Company reported a solid Q2 performance with revenue rising 49% year-over-year to $1.7 million from $1.1 million in Q2 2024, and a sequential increase of 6% [4][12] - Gross profit increased by $354,000 or 40% to $1.2 million, although gross margin declined to 73% from 77% due to a higher percentage of lower-margin hardware sales [13] - Net loss improved to $1.2 million or $0.20 per share from a net loss of $1.7 million or $1 per share in Q2 2024 [13][14] Business Line Data and Key Metrics Changes - Hardware revenue increased significantly by $458,000, primarily due to additional deployments of biometric scanners for a long-time customer [12] - License fee revenue grew by 4%, reflecting an increase in subscription contracts, while service revenue rose by 11% due to customer service for a large upgrade [12] Market Data and Key Metrics Changes - The company is focusing on expanding its presence in the defense intelligence market, particularly in Europe, where military and defense investments are expected to increase significantly [6][8] - The EU plans to mobilize over €800 billion in defense investment over the next four years, with NATO members agreeing to increase defense spending to at least 5% of GDP by 2035 [6][7] Company Strategy and Development Direction - The company announced the formation of the BIO key cyber defense initiatives to expand market reach and engage with leading defense contractors [6] - There is a strategic refocus on BIO key branded solutions, moving away from previous licensed solutions, which is expected to enhance margins and growth opportunities [9] - The company is revitalizing its North American sales efforts and returning to an in-office model for sales and marketing teams [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for growth in the defense and intelligence markets, citing robust contract activity and a strong pipeline [21][30] - The company believes that the current stock price does not reflect its performance and future opportunities, with expectations for revenue generation from contracts already closed [26][29] Other Important Information - The company is actively seeking opportunities to reduce costs to lower its breakeven level and support a path to positive cash flow and profitability [11] - Current assets as of June 30, 2025, were reported at $4 million, including $2.3 million in cash, an increase from $1.9 million at year-end 2024 [15] Q&A Session Summary Question: Should we expect the recent trend towards reduced operating expenses to reverse? - Management indicated that the recent increase in expenses was a temporary blip due to restructuring and event timing, and they expect to maintain the expense run rate moving forward [17][19] Question: Can you provide additional color on meaningful contract activity in the first half of next year? - Management confirmed that they have closed contracts that will generate revenue in Q3 and emphasized the robust market for their specific solutions [20][21] Question: Do you expect these contracts to ramp up significantly? - Management affirmed that they expect iterative growth from these contracts, with opportunities increasing in size and quantity [30][31] Question: How much of the reserve inventory did you sell? - Management stated that they are selling inventory every quarter and aim to move the bulk of it by the end of the year [36] Question: Do you think you have enough cash to get through the end of the year? - Management confirmed that they have sufficient cash and equivalents to sustain operations through the end of the year [44]