BIO-key International, Inc.

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to Bio-key International's second quarter 2020 conference call. During the presentation, all participants will be in listen-only mode. After the speaker's remarks, you will be invited to participate in a question and answer session. As a reminder, ladies and gentlemen, this conference call is being recorded today, Friday, August 14, 2020. I would now like to turn the conference over to Scott Menken, Biokeys Vice President of Marketing. Please begin, sir.

Thank you for joining us this morning. With me today are Biokeys Chairman and CEO, Mike DePasquale, Fred Corsentino, our Chief Revenue Officer, and CeCe Welch, Chief Financial Officer. I'd like to remind everyone that today's conference call and webcast may contain forward-looking statements that are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of these statements. The words estimate, project, intend, expect, anticipate, believe, plan, may, or will, and similar expressions generally identify forward-looking statements. Such forward-looking statements are made based on management's beliefs as well as assumptions made and information currently available to management pursuant to the Safe Harbor's provisions of the Private Securities Litigation Reform Act of 1995. For a complete description of these and other risk factors that may affect the future performance of Bio-key International, see risk factors in the company's annual report on Form 10-A and its other filings with the SEC. Listeners are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date made. The company also undertakes no obligation to disclose Any revision to these forward-looking statements to reflect events or circumstances after the date made? At this time, I'd like to turn the call over to Mike DePasquale.

Mike? Thank you, Scott, and good morning, everyone. Thank you for joining the call today. While we've all been dealing with the effects of coronavirus over the past several months, I do want to thank my colleagues at BioKey and our new subsidiary, Pistol Star, and our partners and customers for their continued support and dedication during this very challenging time. While our Q2 results were substantially impacted by business shutdowns related to coronavirus, we've been able to take significant steps in advancing our strategic vision for the company during the second quarter and to date in Q3. These initiatives include the execution and closing of our acquisition of Pistol Star, the developer of the Portal Guard multi-factor identity and access management solution, just after the close of the second quarter. Additionally, we have successfully recapitalized our company by raising $24 million in gross proceeds from a public offering of common stock and equivalents plus warrants. This funding has put BioKey on a very sound financial footing for the first time in many years. Importantly, it allows us to focus our full attention on growth initiatives while also removing the risk to our company from possible business disruptions due to COVID or other economic or political impacts on our customer or customers or prospects. After repaying short-term note financings, funding our Pistol Star acquisition and addressing other working capital needs, BioKey now sits with a cash position of approximately $18 million. This financial strength allows us to make prudent investments in our business, such as building out our BioKey Africa subsidiary and enhancing our sales and marketing efforts around our expanded solution suite, while also providing a very clear and strong financial footing to support our company for many years. It will also help us demonstrate our long-term viability to larger customers who want to be assured that we will be around to serve their needs as they utilize our mission-critical solutions. We do recognize this is required meaningful dilution of our existing shareholders. However, after enduring several substantial previous challenges, it became clear to the board and management that we had no choice but to pursue the opportunity we had identified to put BioP on sound financial footing, to ensure that we're able to endure current business delays and be well-positioned to execute on our contract backlog of almost $75 million, and to fully tap the future sales potential of our expanded base of solutions, talent, and customer relationships in a market increasingly pressed to find effective and efficient solutions to their authentication and data and network security needs. Despite the impact of COVID-19 on the near-term visibility for our business and that of our customers, we believe the long-term sales outlook for our solutions in North America, Africa, Asia, and around the world has never been more promising. And the opportunity is being reflected in our rapidly growing base of channel alliance partners. I'll let CeCe review our Q2 results, which as anticipated, were clearly curtailed by the eye of COVID-19 storm and customer procurement activity ground to nearly a standstill for a couple of months. Fortunately, we are starting to see things beginning to open up and remain very optimistic regarding a substantial rebound in business over the balance of the year. Our enthusiasm is rooted in two main areas. One being the benefit of our PortalGuard acquisition, which closed on the first day of our third quarter, the quarter we're in now. As you have seen through our marketing announcements, we have seen very strong demand for their solutions over the past few months, with particular strength in their core market of higher education, as well as the range of other verticals, including financial services and state and local government. With PortalGuard, we're now able to offer a broader base of solutions that provide us relevance with a much larger base of customers, while we benefit from their engineering, product development, and sales and marketing personnel that expand our capabilities and customer reach. We also see substantial cross-selling opportunities between our two companies, as we're able to bring enhanced biometric multi-factor authentication solutions to their existing customers and we can offer their more robust multi-factor identity and access management and single sign-on capabilities to existing and prospective Bio-key customers. It really is a win-win combination that is off to a strong start and should become an increasingly important contributor to our future results. Secondly, we expect to commence work during the second half on two very large initial contracts totaling $75 million in software consulting services and hardware revenue over the expected duration of 24 months. The contracts are with a major telecommunications provider in Nigeria and with a division of the Nigerian government. As you might imagine, the COVID-19 shutdown of business in the country, as well as social distancing practices, are delaying efforts to initiate these contracts. As of today, we now expect these contracts to be launched in the second half of this year, possibly by the end of the third quarter, but into the fourth. And Fred will touch on our staffing efforts to prepare for this work to begin. And we'll learn more about the scope of timing on these deals over the coming weeks, and we'll certainly update investors as things solidify. Longer term, we believe these projects are just the beginning of a very substantial opportunity to team with local partners to deliver biometric security solutions for large-scale ID authentication needs in areas like mobile communications and payments, immigration and border security, and for social welfare programs, many of which are attracting external funding from entities such as the World Bank. Finally, with respect to our financial outlook for the current fiscal year, I'm understandably reluctant to provide any sort of guidance. And frankly, there remain too many variables regarding timing, schedules, and the path to a more normal business interactions to provide a reliable outlook. However, I can say that we have taken steps to improve our bottom line performance at the same time we have positioned BioKey for growth via Pistol Star and our large contract backlog. We also remain actively engaged in business development efforts in the U.S., Asia, and Africa. Let me now turn the call over to Fred Corcentino to review a few specific developments in our business. Fred?