BIO-key International, Inc.

Good morning, ladies and gentlemen. Thank you for standing by and welcome to the Bio-key International second quarter conference call. During management's prepared remarks, all participants will be in a listening mode. Afterwards, listeners will be invited to participate in a question and answer session. As a reminder, this conference is being recorded today, Tuesday, November 15, 2022. I would now like to turn the call over to Kimberly Biddings, Vice President of Product Marketing. Please proceed.

Thank you and thank you for joining our call. Joining me today are BioKey's Chairman and CEO, Mike DePasquale, as well as Alex Rocha, Managing Director of BioKey EMEA, and BioKey's CFO, CeCe Welch. I will remind everyone that today's conference call and webcast and answers to questions include forward-looking statements which are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected. Words such as anticipate, believe, estimate, expect, and plan, and similar words typically identify and express forward-looking statements. Such forward-looking statements are made based on management's beliefs and assumptions using information available currently 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, please see Risk Factors in the company's annual report filed on Form 10-K with the Securities and Exchange Commission. Listeners are cautioned not to place undue reliance on forward-looking statements which speak only as of today's date. The company undertakes no obligation to revise or disclose revisions to forward-looking statements to reflect future events or circumstances after today. With that, I will turn the call over to Mike.

Thanks, Kim. Good morning and thank you for joining our call today. After my brief remarks, I want to leave plenty of time for Alex to review our efforts in Europe and the Middle East and for Kim to discuss our sales and marketing initiatives. Cici then will provide financial highlights and will open the call for investor questions. BioKey has become a global company with a global brand. We have over 80 employees, including 36 in Europe, Middle East, Africa, or EMEA region. And Q3 was our second full quarter that included operating results from our swivel secure acquisition that closed in March. The business and its integration into BioKey is proceeding according to plan. though our third quarter was affected by the normal European seasonal slowdown due to the summer holidays. We also saw continued customer delays in our large ID projects in Africa, and we did see some slippage of projects in our domestic business from Q3 to Q4, but mostly with county governments that must go through the RFP process. Despite these factors, we grew Q3 revenues by 6% and year-to-date revenues rose 26% to $5.3 million, which is higher than our full fiscal 2021 revenue. At BioKey, our success owes largely to our focus on innovation, which is core to our mission to expand passwordless and mobile IAM options. In Q3, we launched our updated mobile authenticator app, which we call MobileAuth. and we upgraded the user interface for our cloud-hosted portal guard as a service or IDAS, which Kim will discuss in a few minutes. Regarding Africa, in Q2, we secured our, in Q3 I should say, we secured our application programming interface or API key access from the Nigerian National Identity Management Commission for verification of all national identity numbers. Unfortunately, NIMC has had both technical and financial issues that led to delays in enrolling significant numbers of citizens. But we expect the situation to be resolved in the next few months. In addition to national ID programs, there is a substantial need for mobile security solutions across Africa. After two years of effort, we believe our African subsidiary is well positioned with the right technology and relationships to monetize those significant opportunities that exist across the continent. Along with Gartner and Forrester, we believe the multi-factor authentication segment of cybersecurity is one of the most attractive growth opportunities in the global software market today, as so much of the market is still mired in legacy solutions that have been compromised repeatedly. Also, cyber insurance is becoming a mandate across public companies as well as small and medium sized businesses that house consumer data. Insurance underwriters will not issue a policy to companies that do not have multi-factor authentication in place. And despite the geopolitical and economic headwinds that almost every global business is experiencing, we believe MFA solutions will remain in high demand and the opportunity for BioKey to move up the value chain to larger opportunities is now presenting itself. Strong device and server-based biometrics is our unique competitive advantage and it is getting greater visibility in the markets over the past two quarters. Again, Kim will speak to that shortly. To enhance the awareness and reach of our solutions, we've invested in an expanded team of direct and partner sales resources to complement our growing channel. These investments are enabling us to build a growing base of recurring software-as-a-service revenue with strong customer references. We're also building our pipeline of customer and project opportunities, some of which has progressed more slowly than anticipated over the past several months, which we largely attribute to macroeconomic factors. Nonetheless, we do expect a strong close to the year as some customers seek to put their IT budgets to work before it's over. Given our results through Q3, we now expect full-year revenue of $7 million to $9 million in 2022, representing growth of approximately 37% to 76% over 2021 revenue. Our outlook anticipates growth in recovering software license to roughly 70% of our total or software license revenue, supported by hardware and services revenue, which are typically in support of specific software projects. Although there's a possibility we will see our African hardware deployments begin this quarter, we are not forecasting that to begin until Q1 2023. With that, I will now turn the call to Alex Rocha to discuss our European and Middle East business.