Coming up next at 3:00 P.M. Eastern here on today's RedChip Future Tech Investor Conference, BIO-key International, OTC BKYE. Presenting today, CEO Mike DePasquale. Mike, are you there? I am. Good afternoon. Great. Is that your presentation that I'm seeing there on the screen? You are. All righty. You're all set. Again, it's Mike DePasquale. The company is BIO-key International, OTC BKYE. Let me get some preliminaries out of the way, Mike, and then you can jump right in. Let's do the safe harbor. This segment may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements pertaining to future financial and/or operating results, along with other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management, constitute forward-looking statements. Any statements that are not historical facts should also be considered forward-looking statements. Of course, forward-looking statements involve risks and uncertainties. Mike, we're looking forward to hearing your presentation. Thank you very much, and thank you very much to RedChip and the team for inviting us to participate. We're really enthused about that. Again, we appreciate the opportunity. I'm going to spend about 10 or 15 minutes talking about BIO-key, giving you an overview of our company, our technology, some of our customers, and the business opportunity ahead. Again, our symbol is BKYE. We're trading currently on the OTC markets. Our share price has been in the $4 range. We have about a million shares outstanding and a market cap of slightly under $4 million or $5 million. Noteworthy here is if you look at the players in our space, even some of the smaller ones that are public companies, we're grossly undervalued in regard to, again, our comps. I just say that here. We'll talk a little bit more at the end of the presentation about that. We're certainly in a very good position. The company has been growing. We're expecting to achieve profitability actually in our current quarter. What do we do? BIO-key provides advanced identification and authentication solutions, which fundamentally provide a replacement for the current technologies that we're all very accustomed to using, which are passwords, pins, tokens, cards, and keys. Our technology platform is all-inclusive. It includes all of those authentication factors. Our differentiator, what differentiates BIO-key from the other participants and players there is our biometric technology. We've been in business for over 30 years. We really cut our teeth in developing this technology and maturing it and getting it to the point where it is today. It is highly scalable, it's highly accurate, and it is the only way to positively identify an individual as the person who presents themselves. The opportunity for what you keep hearing about phishing-resistant technologies, zero trust, phoneless and tokenless technologies, because we can't always use a phone to authenticate ourselves. For example, if you're in a call center or you're on the manufacturing floor. BIO-key provides 17+ ways for our customers to authenticate themselves no matter where they are or what they're doing or how they present themselves. I'll go into a little bit more detail about that as we continue and evolve along. Here's just a representation of some of our customers. We have customers in virtually every sector of the economy. Our real sweet spot are the regulated industries. If you look at defense, for example, three of the top four defense ministries on a global basis utilize BIO-key technology for access to all of their intelligence information. Very critical, highly secure information. Banks, we have a number of international and national global banks that utilize our technology for employees to access all of their information. In fact, the largest bank in South Africa, Capitec Bank, has over 30 million of their customers enrolled in the BIO-key solution. When they present themselves at the branch or at the ATM, they simply scan their finger and enter their accounts. Healthcare, the Cleveland Clinic, Nationwide Children's Hospital, a whole series of hospitals and clinics around the country utilize our biometric technology for access to EMR and EHR patient record systems. Again, in education, we have nearly 200 colleges and universities that utilize the BIO-key solution, not biometrics, but the other authentication factors for access to all of their information and all of the student and instructor portals. Anywhere that you're using a PIN, a password, a token, a card, or a key, you can utilize and take advantage of the BIO-key solution set. As you likely know, the security industry is going through just a tremendous growth curve. It has been for a long time. Cybersecurity in general is a very, very big category. We focus on what we call the front door or the access to the information and the portals that any company, enterprise, business, or government may have. There are tremendous drivers now on a global basis and also domestically here that are forcing more advanced security and multi-factor authentication to be utilized as a mandate. For example, here in the U.S., to get cyber insurance, you have to be utilizing multi-factor authentication. There's no way around it. If you're a government contractor or you do any work at all with the government, you have to meet the NIST standards for security within your own company, and that means all of your employees and your vendors and contractors have to meet those compliance requirements. BIO-key provides all of the solutions and technology for authentication to ensure all of those compliance items. I mentioned before phoneless tokenless biometric authentication. This is very advanced technology that basically can identify an individual in a very positive way. I can use your password, I can use your PIN, I can take your little token and plug that into the computer. There's no differentiation in that context. However, with our biometric technology, when you put your finger down or utilize your face on a mobile device or even your palm, we know it's you. The devices that we use, in particular for fingerprint, test for liveness and have very serious encryption to ensure that they can't be compromised from things like a man-in-the-middle attack. You're talking about the most highest level of security, and along with that, the most convenient security. You don't have to enter long passwords that you have to change every two weeks. You don't have to carry a token with you. You don't have to use multiple PINs and perhaps even other technologies to authenticate yourself, including your phone. You can do this all from your desktop or your mobile device, and you can do it in particular on a desktop or a tablet utilizing your finger. What are the real drivers in the context of the business, the industry, for governments and for enterprises? Clearly, I mentioned before reducing cyber risk, and meeting all of the compliance hurdles so that you can insure yourself, and be sure that if you have a data breach, right, or something like that is coming into or through your back door, that you can identify it, right? We can provide the technology to do that. We clearly are providing a more convenient way for users to authenticate. The least friction, right? Putting your finger down is a lot less cumbersome than again entering a 12-digit password along with a PIN or plugging a token into a USB port. We also reduce cost. For sure, enterprises have multiple technology solutions in the cybersecurity venue, and we can whittle that down so that at least access to the front door is utilizing one solution that has the flexibility to meet whatever their authentication requirements are. As I mentioned to you, we support 16 or 17 different factors of authentication. Of course, again, as I mentioned before, all of the regulatory requirements in healthcare called HIPAA, for example, all the NIST requirements for governments and government contractors, all of those items get addressed directly by what we provide our customers, both enterprise and government. It's pretty clear that biometrics in general are being much more widely accepted than they were even five years ago. They're becoming a standard, for example, for travel. The TSA is utilizing biometric technology, including facial recognition and fingerprinting, to authenticate and identify individuals, right? Crossing borders in the EU. Globally around the world, large databases of biometrics are being built by governments to ensure that they could positively identify individuals. Defense ministries are realizing that the only way they can avoid compromise, especially with sensitive information, is to utilize biometric technology. It has to be highly qualified. It has to be highly scalable. It has to be widely available and universally available. We provide the platform to be able to do that. Similar in nature in the banking business. In the regulated industries where they have those drivers, we're providing those solutions and technologies. We have a number of, I consider them emerging opportunities, in call centers, as I mentioned before, where you can't utilize a phone to authenticate yourself, in oil and gas services. We're working with many international governments in areas such as tax, similar in nature to the IRS here in the U.S., where they're enrolling citizens and ensuring that they really are who they say they are, especially if they're presenting themselves for benefits or some sort of a government program. As I mentioned at the start, we are on the verge of getting the company to profitability. Our annual recurring revenue base is growing. Our gross margins hold steady in the 75%-80% range, and sometimes that range will move a little bit depending upon the amount of hardware that we sell, along with our software. We have over 45 million global users that authenticate with BIO-key on a daily basis, and we continue to expand our business, especially through channel partners. The bulk of our business on an international basis is sold through partners and channel partners. Domestically here, it's kind of a hybrid. We're selling direct, but also building a growing base of partners who are representing our solutions, our technology to their end users. We, again, will continue to grow. We continue to manage our costs. We've invested tens of millions of dollars in building out the current platform we call PortalGuard and WEB-key that we've built over the last 10 years, and we're really starting to reap the benefit of those investments now. You're going to see the revenue grow, you're going to see the margins hold in that 80% range, and you're obviously going to start to see us become profitable this quarter and beyond. With that, I'll take any questions that anyone may have. Thank you again for allowing me to present today. Thanks a lot, Mike. One of the more differentiated aspects of your platform is the ability to provide phoneless and tokenless authentication. In conversations with customers, what types of environments tend to recognize the value of that approach most quickly? I would say for sure, as I mentioned in my prepared remarks, that the regulated industries, the ones where they have a mandate, whether it's driven, again, by the government, or it's driven by their commercial insurance, or it's driven by scalability and controlled access. Industries like banking, finance, healthcare, and of course, government, those are the ones that really benefit the most from this technology out of the gate. Are you seeing regulatory compliance increasingly becoming a catalyst for customer adoption, or is the primary driver security and operational efficiency? Well, security and operational efficiency always drive enterprise decisions, and I think we all know that, right? At the end of the day, yes, the mandates are really forcing companies and governments and government agencies to look at, especially the biometric technology that we've been developing, and we've been marketing over the last 20 or so years. The adoption rate is really about to explode. Mike, as you were mentioning in your prepared remarks, you've built traction across defense, banking, healthcare, and other highly regulated industries. What common security challenges do those organizations share and why? I'm sorry, what characteristics make them well-suited for biometric authentication? Yeah. Well, typically they have something very compelling to protect, right? In those industries, in finance and banking, for example, they're protecting customer accounts. They're protecting transactions, many high-value transactions, right? There are transactions that cut across, as I mentioned to you, international, national banks that represent hundreds and hundreds of millions, if not billions of dollars in transactions. There's a very high value in many of those regulated spaces. In healthcare, it's protecting privacy, and it's protecting individuals' access to, again, their healthcare information, and ensuring that it's not shared or compromised is very important. Records need to be very accurate, you don't want anything to breach or compromise those records. I think that's a very compelling issue in those regulated spaces. They have something very high value to protect. With that high value, they look for advanced and highly secure solutions. Many of them, because even a password, and I should have probably said this before, a password can be secure if it's 12 or 14 digits and you change it every week and a half. You don't put it on the little yellow stick 'em paper and put it up on your computer terminal or on your laptop. As long as you keep it to yourself, it could be pretty secure, but that's really hard to do. I think we all know that, right? That's why we're starting to use passkeys, right? You're starting to see passkeys and other authentications like Microsoft Authenticator. Other things come up to utilize multi-factor authentication. It's the ease of use of the biometric that really drives the personal adoption, right? I love using it because it's simple. I don't need to enter that PIN or the password. I don't need to plug anything in. I just put my finger down and I'm in. It's both convenience and it's security, and biometrics provide the highest levels of both. Thanks, Mike. Very interesting what you're talking about there. We invite you to continue to submit questions to Mike DePasquale. If you're joining us on Zoom, of course, we invite you to join us on Zoom. If you're on social media, use the link provided there to join us on Zoom. Once you're in Zoom, click on the Q&A button at the bottom of your screen, type your question into the text box. Does your installed user base influence product development or your ability to expand relationships with existing customers? Absolutely. I've always said that the easiest way to acquire a new customer is to get it referenced from an existing one. Your install base is very, very important to you. Listening to your install base, gaining a good understanding of their needs and requirements, and keeping close relationships with the people who make decisions and who can really help craft our future direction is really, really important. I think for any company that's absolutely critical. Defense and national security, Mike. How significant are they going to become as governments continue increasing spending on cybersecurity and critical infrastructure protection? That's a great question, and it's one I probably should've addressed before. I don't think it's a secret for anyone who's listening on this call that the entire geopolitical environment has been turned upside down over the last six months in particular. It's been changing over the last few years, but over the last six months, it's changed dramatically. We're seeing a tremendous increase in government defense budgets, and it doesn't matter what country. All of the EU countries. In the Middle East, we're getting tremendous traction where, again, unfortunately, they're dealing with issues that continue to evolve. Defense budgets, defense spending is certainly increasing, and because, as I mentioned before about references, because we have a good collection of customers that are utilizing us in particular for access to that secure information, that highly confidential information, it gives us a really good business opportunity going forward. Regarding the Nasdaq hearings panel appeal on June 16th, can you outline the definitive timeline for filing the delayed 2025 Form 10-K? Is the delay purely administrative, or are there underlying auditor reconciliations holding it up? Do you expect a full listing restoration by this summer? Great. That's a great question. Obviously, we are looking to file both our 10-K and our 10-Q shortly, and that's very, very quickly. I think we're very close. We expect that to happen shortly. Our hearing is scheduled for the 16th, which is Tuesday, a little less than a week away, and we are confident that the hearing panel will recommend our relisting onto the Nasdaq Capital Market. Mike, you noted that Q1 software license revenues increased 24% to $1.4 million, and your gross margin is holding firm at an elite 82%. As your first half revenue scales to that guided $5 million target, what percentage of this top-line surge is carrying over to positive net income? Is the operational profitability you are calling for sustainable into the second half of the year without sequential spikes in R&D or SG&A? Good question. Let me address the expense side first. Our expenses are pretty steady. Obviously, SG&A, as we sell more, there are things like commissions obviously that go up slightly, but our R&D budget has been basically flat since we've invested, as I mentioned before, very heavily in building out our product. We're at a steady state right now. From an expense perspective, we expect to be reasonably steady state through the year. As it relates to dropping net income to the bottom line, the first part of the question, is our growth sustainable into the second half? We believe with the pipeline that we're certainly capable of sustaining that level of growth through the second half and into the full year. The answer to that is yes, we believe we can do that. You know, the third quarter is always variable because the European business is a little bit off with the vacations early in July and August, but we have a very robust pipeline for the second half, and I'm pretty confident that we will do very well there. It relates to what drops to the bottom line, our gross margins, again, have been relatively steady. I think if we hold at this level, we will certainly achieve profitability, and I think we'll continue to achieve that as we evolve through the end of the year. Thank you very much for that, Mike. Cybersecurity is often viewed as a technology story, but there is also a strong business case around reducing friction and lowering costs. How do customers typically quantify the ROI from deploying BIO-key's solutions? There are multiple factors. For example, using advanced solutions in technology like this almost immediately eliminates all of the password resets and the IT support that's generally needed and required to be provided when you're using those traditional technologies. That's one area that almost immediately can go away, and go away very quickly, with self-service password reset, utilizing biometrics and other authentication factors to be able to supplement that. That's one. The second is quantifying a higher level of security and potentially eliminating or thwarting a breach or a cyber attack. Pretty hard to quantify that, but when it happens, we know what the numbers are. That's another level of cost savings and ROI that customers can expect. The third piece is that there's a small capital investment in buying the hardware if you're going to utilize a finger biometric solution. That's a one-time cost. You put that at the kiosk, you put that on your desktop computer, you put it on your tablet. You buy that device once. You can utilize it for years to come. More importantly, multiple individuals can use that device. It's not like buying these FIDO tokens. These YubiKey, where one person has a key. You actually have to buy two for them because the statistics show they get lost or are broken. You have to buy two keys for every individual. They get broken, they get stolen. If the person leaves, you've got to try to get them back. There's a sunk cost in that. That cost continues. With our biometric technology, it's just the licenses for the users to be able to utilize and take advantage of that technology going forward. You've highlighted opportunities in IoT, autonomous systems, and connected devices. How do you think identity management evolves when the users are not only people, but increasingly fleets of devices and autonomous systems? Certainly a very interesting question. One thing that we haven't even brought up here is AI. When we talk about autonomous, we're generally weaving in AI. We're weaving in synthetic identities, the ability to make a synthetic identity or to thwart, for example, a biometric system, or to thwart a password system, or to breach whatever. To be able to get in through the back door into your servers and your systems. What we bring to the table here is highly secure, highly encrypted. By the way, this is quantum-proof as well. Certainly we're evolving to ensure that as the quantum technologies continue to evolve, we evolve with them. We're providing solutions that meet all of the highest hurdles to thwart those kinds of attacks. As I mentioned, even on our devices, liveness detect. A synthetic or a gummy finger is not going to work on one of our devices because it's going to check for liveness. That's the way we become more secure as a society. It's the way we become more secure from an enterprise perspective and a government perspective as well. That will wrap up this segment with BIO-key. Mike DePasquale, thank you very much for a very interesting discussion indeed. Thank you very much. Wonderful to be here, and glad that we were able to participate today. Hope to see you again soon, Mike. Thanks a lot. Right. Have a great one.