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BIO-key Reports Reduced Net Loss and Cash Used in Operations on Lower Q2’24 Revenues; Hosts Investor Call Thu. Aug. 15th at 10am ET

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BIO-key International, Inc. (Nasdaq: BKYI) reported Q2'24 financial results, showing a reduced net loss and improved cash management despite lower revenues. Key highlights include:

- Q2'24 revenues decreased to $1.1M from $1.9M in Q2'23
- Gross profit improved to $0.9M (77.0% margin) from $0.3M (16.7% margin)
- Net loss reduced to $1.7M from $2.6M in Q2'23
- Cash used in operations improved by 48% in the first six months of 2024

The company introduced Passkey:YOU, a biometric FIDO Passkey Authentication Solution, and won the Global InfoSec Award for Multi-factor Authentication. BIO-key remains focused on driving revenue growth and progressing towards profitability in the coming quarters.

BIO-key International, Inc. (Nasdaq: BKYI) ha riportato i risultati finanziari del secondo trimestre del 2024, mostrando una riduzione della perdita netta e un miglioramento nella gestione della liquidità nonostante un calo dei ricavi. I punti salienti includono:

- I ricavi del Q2'24 sono diminuiti a 1,1 milioni di dollari rispetto ai 1,9 milioni di dollari del Q2'23
- Il profitto lordo è migliorato a 0,9 milioni di dollari (margine del 77,0%) rispetto ai 0,3 milioni di dollari (margine del 16,7%)
- La perdita netta è stata ridotta a 1,7 milioni di dollari rispetto ai 2,6 milioni di dollari del Q2'23
- La liquidità utilizzata per le operazioni è migliorata del 48% nei primi sei mesi del 2024

L'azienda ha introdotto Passkey:YOU, una soluzione di autenticazione biometrica FIDO Passkey, e ha vinto il Global InfoSec Award per l'autenticazione multi-fattore. BIO-key rimane concentrata sulla crescita dei ricavi e sul raggiungimento della redditività nei prossimi trimestri.

BIO-key International, Inc. (Nasdaq: BKYI) reportó los resultados financieros del segundo trimestre de 2024, mostrando una reducción en la pérdida neta y una mejora en la gestión de efectivo a pesar de la disminución de ingresos. Los puntos destacados incluyen:

- Los ingresos del Q2'24 disminuyeron a 1,1 millones de dólares desde 1,9 millones de dólares en el Q2'23
- El beneficio bruto mejoró a 0,9 millones de dólares (margen del 77,0%) desde 0,3 millones de dólares (margen del 16,7%)
- La pérdida neta se redujo a 1,7 millones de dólares desde 2,6 millones de dólares en el Q2'23
- El efectivo utilizado en operaciones mejoró un 48% en los primeros seis meses de 2024

La empresa presentó Passkey:YOU, una solución de autenticación biométrica FIDO Passkey, y ganó el Global InfoSec Award por autenticación multifactorial. BIO-key sigue enfocada en impulsar el crecimiento de ingresos y avanzar hacia la rentabilidad en los próximos trimestres.

BIO-key International, Inc. (Nasdaq: BKYI)는 2024년 2분기 재무 결과를 발표하며 매출 감소에도 불구하고 순손실을 줄이고 현금 관리가 향상되었음을 보여주었습니다. 주요 내용은 다음과 같습니다:

- 2024년 2분기 매출이 190만 달러에서 110만 달러로 감소
- 총 이익이 30만 달러(16.7% 마진)에서 90만 달러(77.0% 마진)로 개선
- 순손실이 260만 달러에서 170만 달러로 감소
- 2024년 상반기 운영에 사용된 현금이 48% 개선

회사는 생체 인식 FIDO 패스키 인증 솔루션인 Passkey:YOU를 도입하고, 다중 요소 인증에 대해 Global InfoSec Award를 수상했습니다. BIO-key는 수익 성장과 수익성 달성에 집중하고 있습니다.

BIO-key International, Inc. (Nasdaq: BKYI) a annoncé les résultats financiers du deuxième trimestre 2024, montrant une réduction de la perte nette et une amélioration de la gestion de la trésorerie malgré une baisse des revenus. Les points clés comprennent :

- Les revenus du T2'24 ont diminué à 1,1 million de dollars contre 1,9 million de dollars au T2'23
- Le bénéfice brut a augmenté à 0,9 million de dollars (marge de 77,0 %) contre 0,3 million de dollars (marge de 16,7 %)
- La perte nette a été réduite à 1,7 million de dollars contre 2,6 millions de dollars au T2'23
- La trésorerie utilisée dans les opérations s'est améliorée de 48 % au cours des six premiers mois de 2024

L'entreprise a introduit Passkey:YOU, une solution biométrique d'authentification FIDO Passkey, et a remporté le Global InfoSec Award pour l'authentification multi-facteurs. BIO-key reste concentré sur la croissance des revenus et l'atteinte de la rentabilité dans les trimestres à venir.

BIO-key International, Inc. (Nasdaq: BKYI) hat die finanziellen Ergebnisse des 2. Quartals 2024 veröffentlicht, die einen Rückgang des Nettoverlusts und eine verbesserte Cash-Management-Strategie trotz sinkender Einnahmen zeigen. Zu den Hauptpunkten gehören:

- Die Einnahmen im Q2'24 sanken auf 1,1 Millionen Dollar von 1,9 Millionen Dollar im Q2'23
- Der Bruttogewinn verbesserte sich auf 0,9 Millionen Dollar (77,0% Marge) von 0,3 Millionen Dollar (16,7% Marge)
- Der Nettoverlust wurde auf 1,7 Millionen Dollar von 2,6 Millionen Dollar im Q2'23 gesenkt
- Der in den ersten sechs Monaten 2024 verwendete Cashflow verbesserte sich um 48%

Das Unternehmen stellte Passkey:YOU, eine biometrische FIDO-Passwortauthentifizierungslösung, vor und gewann den Global InfoSec Award für Mehrfaktor-Authentifizierung. BIO-key bleibt darauf fokussiert, das Umsatzwachstum voranzutreiben und in den kommenden Quartalen rentabel zu werden.

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HOLMDEL, N.J., Aug. 14, 2024 (GLOBE NEWSWIRE) -- BIO-key® International, Inc. (Nasdaq: BKYI), an innovative provider of workforce and customer Identity and Access Management (IAM) solutions featuring passwordless, phoneless and token-less Identity-Bound Biometric (IBB) authentication, announced results for its second quarter ended June 30, 2024 (Q2’24). Note, BIO-key’s results for 2023 were restated at year-end and filed with the Company’s 2023 Form 10-K, and as a result Q2’23 and six months ended June 30, 2023 comparisons in this release have been restated. BIO-key will host an investor call Thursday, August 15th at 10:00am ET (details below).

Financial Highlights

  • Q2’24 revenues decreased to $1.1M from $1.9M in Q2’23, principally due to a delay in recognition of approximately $450,000 in software license fees generated by the Company’s European subsidiary and lower project-related services revenue of approximately $200,000 as compared to the year-ago period for one large customer.
  • Gross profit improved to $0.9M (77.0% gross margin) in Q2’24 vs. $0.3M (16.7% gross margin) in Q2’23, primarily reflecting the impact of a $1M hardware reserve in Q2’23.
  • BIO-key trimmed Q2’24 operating expenses by $0.2M versus Q2’23, reflecting ongoing cost management initiatives.
  • BIO-key reported a Q2’24 net loss of $1.7M compared to a Q2’23 net loss of $2.6M, primarily due to a $1M hardware reserve in Q2’23.
  • Cash used in operating activities improved 48% to $1.1M in the first six months of 2024 vs. $2.1M used in the first six months of 2023. Improved operating cash flow reflects the benefit of a Q1’24 $1.5M 2-year extension/expansion of a biometric technology license with a long-term financial services customer and continued reductions in S,G &A.

Recent Business Highlights

Commentary
BIO-key CEO, Mike DePasquale commented, “Q2 was impacted by delays we experienced in the closing of approximately $450,000 in software license contracts and lower non-recurring, project-related services revenue of approximately $200,000 versus the year-ago period for one large customer in 2023.

“Despite our lower than expected revenues this quarter, we remain very encouraged by the growing enterprise awareness of the importance of implementing secure, zero-trust Identity and Access Management solutions which form the core of our offerings. We remain focused on driving revenue growth and progressing our business to profitability and positive cash flow over the next several quarters. We are working to support our Channel Alliance Partners around the globe while also working to progress larger-scale customer dialogues via our in-house direct sales efforts.

“We are also excited by the growth potential for our new Passkey:YOU solution which we believe provides a very powerful, differentiated solution within the rapidly expanding deployment of passkey solutions by some of the largest global companies. Unlike other solutions, BIO-key’s Passkey:YOU utilizes our industry leading biometric technology to deliver a unique passwordless and device-less authentication solution able to meet a broad range of needs, including some of the most challenging use cases.

“We continue to expect to benefit from the rollout and enforcement of increasingly stringent regulatory standards and cyber insurance underwriting requirements, much of which are now mandating multi-factor authentication or passwordless security solutions that BIO-key is well positioned to provide on a very competitive basis.

“Given our size, our performance will likely remain variable on a quarter to quarter and year over year basis, based on the impact and timing of customer contracts, though we remain confident in our ability to drive sequential growth on a full year basis. Importantly, we are building a growing base of high-margin annually recurring revenues (ARRs) with solid potential to expand as we move forward. We also continue to seek and implement cost reduction opportunities and identify potential strategic opportunities to leverage our core expertise to accelerate our path to profitability and positive cash flow. For these and other reasons, we believe BIO-key is well-positioned for the future.”

Financial Results
BIO-key reported Q2’24 revenues of $1.1M compared to $1.9M in Q2’23. The current-year period was negatively impacted by the delay in recognition of approximately $450,000 in software license fees generated by the Company’s European subsidiary and the year-ago period benefitted from approximately $200,000 of non-recurring services revenue for one large customer. For the six months ended June 30, 2024, revenues were $3.3M compared to $4.1M in 2023, principally due to the factors that impacted Q2’24 results.

Q2’24 Gross profit was $0.9M (77.0% gross margin) versus $0.3M (16.7% gross margin) in Q2’23, primarily reflecting the impact of a $1M hardware reserve in 2023 and higher gross margins from services in Q2’24.

BIO-key was able to reduce operating expenses by $0.2M in Q2’24 versus Q2’23, reflecting reductions in administration, sales personnel costs and marketing show expenses, including lower headquarters expense. Partially offsetting lower SG&A costs, was a $33,000 increase in research, development and engineering expense related to new product development.

Reflecting lower costs and the $1M hardware reserve in 2023, BIO-key’s net loss improved to $1.7M, or $1.00 per share, in Q2’24, from $2.6M, or $4.71 per share, in Q2’23. Likewise, BIO-key trimmed its net loss for the first six months of 2024 to $2.2M, or $1.33 per share, compared to a net loss of $4.3M, or $7.74 per share, in the first six months of 2023. Q2’23 results included a hardware reserve of $1M and the first six months of 2023 included a hardware reserve of $1.5M.

Balance Sheet
At June 30, 2024, BIO-key had current assets of approximately $3.0M, including $1.3M of cash and cash equivalents, $932,210 of net accounts receivable and due from factor, and $433,182 of inventory. This compares to current assets of approximately $2.6M, including $511,400 of cash equivalents, $1.3M of net accounts receivable and due from factor, and $445,740 of inventory, at December 31, 2023.

Conference Call Details

Date / Time: Thursday, August 15th at 10 a.m. ET
Call Dial In #: 1-877-418-5460 U.S. or 1-412-717-9594 Int’l
Live Webcast / Replay:Webcast & Replay Link – Available for 3 months.
Audio Replay:1-877-344-7529 U.S. or 1-412-317-0088 Int’l; code 7767803


About BIO-key International, Inc.
(www.BIO-key.com)
BIO-key is revolutionizing authentication and cybersecurity with biometric-centric, multi-factor identity and access management (IAM) software securing access for over forty million users. BIO-key allows customers to choose the right authentication factors for diverse use cases, including phoneless, tokenless, and passwordless biometric options. Its hosted or on-premise PortalGuard IAM solution provides cost-effective, easy-to-deploy, convenient, and secure access to computers, information, applications, and high-value transactions.

BIO-key Safe Harbor Statement
All statements contained in this press release other than statements of historical facts are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 (the "Act"). The words "estimate," "project," "intends," "expects," "anticipates," "believes" and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are made based on management's beliefs, as well as assumptions made by, and information currently available to, management pursuant to the "safe-harbor" provisions of the Act. These statements are not guarantees of future performance or events and are subject to risks and uncertainties that may cause actual results to differ materially from those included within or implied by such forward-looking statements. These risks and uncertainties include, without limitation, our history of losses and limited revenue; our ability to raise additional capital to satisfy working capital needs; our ability to continue as a going concern; our ability to protect our intellectual property; changes in business conditions; changes in our sales strategy and product development plans; changes in the marketplace; continued services of our executive management team; security breaches; competition in the biometric technology industry; market acceptance of biometric products generally and our products under development; our ability to convert sales opportunities to customer contracts; our ability to expand into Asia, Africa and other foreign markets; our ability to integrate the operations and personnel of Swivel Secure into our business; fluctuations in foreign currency exchange rates; delays in the development of products, the commercial, reputational and regulatory risks to our business that may arise as a consequence the restatement of our financial statements, including any consequences of non-compliance with Securities and Exchange Commission and Nasdaq periodic reporting requirements; our temporary loss of the use of a Registration Statement on Form S-3 to register securities in the future; if we fail to increase our stockholders’ equity to at least $2.5 million, our common stock will be delisted from the Nasdaq Capital Market which could negatively impact the trading price of our common stock and impair our ability to raise capital, any disruption to our business that may occur on a longer-term basis should we be unable to remediate during fiscal year 2024 certain material weaknesses in our internal controls over financial reporting, and statements of assumption underlying any of the foregoing as well as other factors set forth under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023 and other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, we undertake no obligation to disclose any revision to these forward-looking statements whether as a result of new information, future events, or otherwise.

Engage with BIO-key

Facebook – Corporate:https://www.facebook.com/BIOkeyInternational/
LinkedIn – Corporate:https://www.linkedin.com/company/bio-key-international
X – Corporate: @BIOkeyIntl
X – Investors:@BIO_keyIR
StockTwits:BIO_keyIR


Investor Contacts
William Jones, David Collins
Catalyst IR
BKYI@catalyst-ir.com or 212-924-9800

  
BIO-KEY INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
 
  
    Three Months Ended  Six Months Ended 
    June 30,  June 30, 
    2024  2023  2024  2023 
Revenues                  
Services   $283,569  $620,465  $496,690  $1,152,987 
License fees    774,225   1,235,771   2,724,659   2,814,327 
Hardware    83,492   72,693   101,140   145,382 
Total revenues    1,141,286   1,928,929   3,322,489   4,112,696 
Costs and other expenses                  
Cost of services    73,385   360,156   212,234   514,957 
Cost of license fees    148,432   198,147   296,652   819,028 
Cost of hardware    40,455   47,808   53,029   92,400 
Cost of hardware - reserve    -   1,000,000   -   1,500,000 
Total costs and other expenses    262,272   1,606,111   561,915   2,926,385 
Gross profit    879,014   322,818   2,760,574   1,186,311 
                   
Operating Expenses                  
Selling, general and administrative    1,941,866   2,143,164   3,724,839   4,074,896 
Research, development and engineering    591,234   558,181   1,198,755   1,248,340 
Total Operating Expenses    2,533,100   2,701,345   4,923,594   5,323,236 
Operating loss    (1,654,086)  (2,378,527)  (2,163,020)  (4,136,925)
Other income (expense)                  
Interest income    46   23   51   27 
Loss on foreign currency transactions    -   -   -   (15,000)
Loan fee amortization    (4,000)  -   (4,000)  - 
Change in fair value of convertible note    -   (44,568)  -   97,423 
Interest expense    (8,910)  (56,806)  (10,267)  (113,725)
Total other income (expense), net    (12,864)  (101,351)  (14,216)  (31,275)
                   
Loss before provision for income tax    (1,666,950)  (2,479,878)  (2,177,236)  (4,168,200)
                   
Provision for (income tax) tax benefit    -   (143,000)  -   (143,000)
                   
Net loss   $(1,666,950) $(2,622,878) $(2,177,236) $(4,311,200)
                   
Comprehensive loss:                  
Net loss   $(1,666,950) $(2,622,878) $(2,177,236) $(4,311,200)
Other comprehensive income (loss) – Foreign currency translation adjustment    24,220   19,884   (38,530)  92,030 
Comprehensive loss   $(1,642,730) $(2,602,994) $(2,215,766) $(4,219,170)
                   
Basic and Diluted Loss per Common Share   $(1.00) $(4.71) $(1.33) $(7.74)
                   
Weighted Average Common Shares Outstanding:                  
Basic and diluted    1,663,042   556,758   1,639,183   556,758 

All BIO-key shares issued and outstanding for all periods reflect BIO-key’s 1-for-18 reverse stock split, which was effective December 21, 2023.

  
BIO-KEY INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
  
  June 30,  December 31, 
  2024  2023 
  (Unaudited)     
ASSETS        
Cash and cash equivalents $1,260,351  $511,400 
Accounts receivable, net  904,046   1,201,526 
Due from factor  28,164   99,320 
Inventory  433,182   445,740 
Prepaid expenses and other  388,786   364,171 
Total current assets  3,014,529   2,622,157 
Equipment and leasehold improvements, net  174,419   220,177 
Capitalized contract costs, net  348,617   229,806 
Operating lease right-of-use assets  9,341   36,905 
Intangible assets, net  1,252,090   1,407,990 
Total non-current assets  1,784,467   1,894,878 
TOTAL ASSETS $4,798,996  $4,517,035 
         
LIABILITIES        
Accounts payable $1,539,548  $1,316,014 
Accrued liabilities  1,164,681   1,305,848 
Note payable  2,010,293   - 
Government loan – BBVA Bank, current portion  135,400   138,730 
Deferred revenue, current  715,193   414,968 
Operating lease liabilities, current portion  9,570   37,829 
Total current liabilities  5,574,685   3,213,389 
Deferred revenue, long term  142,949   28,296 
Deferred tax liability  22,998   22,998 
Government loan – BBVA Bank – net of current portion  114,656   188,787 
Total non-current liabilities  280,603   240,081 
TOTAL LIABILITIES  5,855,288   3,453,470 
         
Commitments and Contingencies        
         
STOCKHOLDERS’ EQUITY        
         
Common stock — authorized, 170,000,000 shares; issued and outstanding; 1,815,618 and 1,032,777 of $.0001 par value at June 30, 2024 and December 31, 2023, respectively  182   103 
Additional paid-in capital  126,143,205   126,047,851 
Accumulated other comprehensive loss  (15,234)  22,821 
Accumulated deficit  (127,184,445)  (125,007,210)
TOTAL STOCKHOLDERS’ EQUITY  (1,056,292)  1,063,565 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $4,798,996  $4,517,035 

All BIO-key shares issued and outstanding for all periods reflect BIO-key’s 1-for-18 reverse stock split, which was effective December 21, 2023.

  
BIO-KEY INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
  
  Six Months Ended June 30, 
  2024  2023 
         
CASH FLOW FROM OPERATING ACTIVITIES:        
Net loss $(2,177,236) $(4,311,200)
Adjustments to reconcile net loss to net cash used for operating activities:        
Depreciation  46,069   26,637 
Amortization of intangible assets  155,900   162,166 
Change in fair value of convertible note  -   (97,423)
Amortization of capitalized contract costs  80,074   80,717 
Reserve for inventory  -   1,500,000 
Operating leases right-of-use assets  27,564   112,745 
Share and warrant-based compensation for employees and consultants  96,561   120,767 
Stock based directors’ fees  9,003   28,004 
Deferred income tax benefit      (13,000)
Bad debts      250,000 
Change in assets and liabilities:        
Accounts receivable  297,480   (757,170)
Due from factor  71,156   (24,750)
Capitalized contract costs  (198,885)  (75,096)
Inventory  12,558   50,271 
Prepaid expenses and other  (24,615)  14,799 
Accounts payable  258,384   726,657 
Accrued liabilities  (141,167)  (109,208)
Income taxes payable  -   156,000 
Deferred revenue  414,878   174,437 
Operating lease liabilities  (51,257)  (110,545)
Net cash used in operating activities  (1,123,533)  (2,095,192)
CASH FLOWS FROM INVESTING ACTIVITIES:        
Capital expenditures  (1,869)  - 
Net cash used in investing activities  (1,869)  - 
CASH FLOW FROM FINANCING ACTIVITIES:        
Proceeds from Note Payable  2,000,000   - 
Offering costs  (13,470)  - 
Proceeds for exercise of warrants  1,400   - 
Receipt of cash from Employee stock purchase plan  1,939   13,934 
Repayment of government loan  (77,461)  (56,241)
Net cash used in financing activities  1,912,408   (42,307)
         
Effect of exchange rate changes  (38,055)  67,490 
         
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS  748,951   (2,070,009)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD  511,400   2,635,522 
CASH AND CASH EQUIVALENTS, END OF PERIOD $1,260,351  $565,513 

All BIO-key shares issued and outstanding for all periods reflect BIO-key’s 1-for-18 reverse stock split, which was effective December 21, 2023.


FAQ

What were BIO-key's (BKYI) Q2 2024 financial results?

BIO-key reported Q2'24 revenues of $1.1M, down from $1.9M in Q2'23. Gross profit improved to $0.9M (77.0% margin) from $0.3M (16.7% margin). The net loss reduced to $1.7M from $2.6M in Q2'23.

How did BIO-key (BKYI) improve its cash management in 2024?

BIO-key improved its cash management by reducing cash used in operating activities by 48% to $1.1M in the first six months of 2024, compared to $2.1M used in the same period of 2023.

What new product did BIO-key (BKYI) introduce in Q2 2024?

BIO-key introduced Passkey:YOU, a phish-resistant, phoneless and tokenless biometric FIDO Passkey Authentication Solution in Q2 2024.

What award did BIO-key (BKYI) win at the RSA Conference 2024?

BIO-key won the Global InfoSec Award for Multi-factor Authentication at the RSA Conference 2024.

How does BIO-key (BKYI) plan to achieve profitability?

BIO-key is focusing on driving revenue growth, building a base of high-margin annually recurring revenues (ARRs), implementing cost reduction opportunities, and identifying strategic opportunities to leverage their core expertise.

BIO-key International, Inc.

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