BIO-key International, Inc.

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to Bio-key International's fourth quarter and full year 2020 conference call. During management's prepared remarks, all participants will be in listen-only mode. Afterwards, listeners will be invited to participate in a Q&A session. As a reminder, this conference is being recorded today, Thursday, March 25, 2021. I would now like to turn the call over to Kimberly Johnson, BioKeys Vice President of Product Marketing. Please begin.

Thank you, and thank you for joining us this morning. Participating on today's call are BioKeys Chairman and CEO Mike DePasquale, Chief Revenue Officer Fred Corcentino, and CFO CeCe Welch. 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. Words such as estimate, project, expect, anticipate, believe, think, plan, may, will, or similar words generally identify and express forward-looking statements. Such forward-looking statements are made based on management's beliefs and assumptions made based on information currently available. pursuant to the safe harbor 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, please see Risk Factors in the company's annual report filed on Form 10-K and in its other filings with the Securities and Exchange Commission. Listeners are cautioned not to place undue reliance on forward-looking statements which speak only as of the date hereof. The company undertakes no obligation to disclose any revision to forward-looking statements to reflect events or circumstances that occur after today. Now, I'd like to turn the call over to Mike DePasquale. Mike?

Thank you, Kim, and good morning, everyone, and thank you for joining our call today. As I begin, I want to thank the entire BioKey team for their hard work and commitment during a very challenging year. I want to also acknowledge our customers who have stepped up to secure their assets in what has been an unprecedented time in our history. Speaking on behalf of the entire Bio-key global organization, we have never been more enthusiastic and opportunistic and optimistic about our future as we are today. Despite the challenges posed by the COVID pandemic, 2020 was a transformational year for Bio-key. And importantly, during 2020, we were able to accomplish a major recapitalization of the company, putting us on a very sound financial footing for years to come. And we also completed the acquisition and integration of Pistol Star, the developer of PortalGuard Identity and Access Management Solutions. The purchase substantially enhanced our suite of security, ID, and authentication solutions, our talent pool, customer base, and our addressable market, and also provided a very significant contribution to our second-half performance. In late 2020, we began to see business activity gradually moving towards more normalized levels following COVID-related disruptions to our sales and marketing dialogues. Our business benefits from IT security challenges driven by the shift to remote work and studies, which obviously grew very rapidly in response to the pandemic. As a result, we believe virtually all enterprises have been irreversibly altered to allow for a broader variety of workflow paradigms and the resulting far more complex demands on security, authentication, ID and access management, challenges that BioKey is uniquely positioned to provide. Now with the gradual normalization of business activity, we are ramping our sales and marketing initiatives to build and engage with a growing list of customer prospects that can benefit from our biometric and identity and access management solutions. We're developing growing interest and engagement for our portal guard solution across enterprise markets and in higher education. particularly now that we are able to offer it as an on-off-premise solution as well, meaning hosted in the cloud. Identity as a service solution, as we call it. We launched PortalGuard IDaaS in the fourth quarter, less than six months after closing the acquisition, and it has been very well received in the market as more and more enterprises are transitioning their IT infrastructure to an asset-light cloud model that better supports remote users. We believe this trend has been accelerated by the pandemic's impact on work-from-home and study-from-home trends. And having let the genie out of the bottle, it seems that such hybrid work models are here to stay, creating significant IT security challenges as more users require access to mission-critical data and applications outside the enterprise firewall. These challenges complicate cybersecurity for companies of all sizes and across all industries. A recent study by Infosys suggests that it has not just lost revenue or profits, but hundreds of billions of dollars of brand value are at risk from security breaches. Unfortunately, prominent security breaches like SolarWinds continue to occupy headlines. But these terrible events do serve to keep IT security risks top of mind and have led to high-profile endorsements that value solutions like ours can provide. In the wake of the SolarWinds breach, the cybersecurity and infrastructure security agent, CISA, recommended the use of multi-factor authentication strategies essentially everywhere. Separately, FBI private industry notifications and advisory alerts suggest incorporating a biometric into multi-factor authentication strategies. Microsoft also continues to use growing passwordless as a central theme for their enterprise messaging, including alternatives such as biometrics and FIDO2 tokens. In practice, many use mobile phones as FIDO tokens, but last year the FIDO Alliance recommended providing users with multiple FIDO token options. We think this posture builds on the value proposition as PortalGuard now accommodates FIDO2 tokens amongst a total of over 15 different authentication factors. We're also looking at other factors to add to our already robust platform in the coming year that will be easily integrated and provide the broadest possible universe of customer application implementation capability. One constant that continues to differentiate BioKey in the market is our core strength in biometrics. We have unique capabilities as the central biometric management system for enterprise or school system, and our technology is scalable to any size ID platform, such as those required in mobile communication networks, large bank networks, and even enormous national or Civil ID programs. To that end, BioKey has established a beachhead in some very large projects in Africa, and we are pursuing other opportunities across the continent, both direct as well as through our channel partner program. We just recently initiated commercial hardware deployments in support of our large contracts in Nigeria, whereby we provided fingerprint reader hardware to support biometric enrollment. As a result of a range of factors outside of our control, primarily related to the pandemic and some protests in Nigeria, these initiatives were delayed in 2020 but are now moving into gear, and we expect activity to grow in future periods. These projects represent what can have significant upside to our revenue plan in 2021 and beyond. We entered 2021 with a very strong balance sheet and cash position that positions us to execute on our growth strategies and fully tap the sales potential of our expanded team, enhanced product portfolio, and growing partner and customer relationships. Our sound financial position also serves us well when dealing with large enterprise and government customer prospects and partners regarding our ability to support them over the long term. Financial strength also allows us to make prudent investments in our business, including potential tuck-in acquisitions, new product development, as well as sales and marketing resources and initiatives. As CeCe will review shortly, our Q4 and fiscal 2020 top-line results show year-over-year improvements, and we expect these positive trends to accelerate in 2021. supported by a pipeline of opportunities, recurring revenue, contract backlog, and strong outlook for our solutions on a global basis with particular emphasis in North America, Africa, and Asia. For the full year 2021, we anticipate revenues of $8 to $12 million with potential upside primarily related to our Africa business as well as some other opportunities. The midpoint of this range would represent more than 250% growth over fiscal 2020 revenue and approximately 150% growth over the $4 million annualized revenue run rate based on our 2020 second half performance, which benefited from the PortalGuard acquisition. Let me now turn the call over to Fred Corsentino. are CRO to highlight a few key developments and opportunities that we see in our business. Fred?