BIO-key International, Inc.

Good morning, everyone. Thank you for standing by. And welcome to BioKey International's second quarter 2023 conference call. During management's prepared remarks, all participants will be in listen-only mode. Afterwards, listeners will be invited to participate in the question and answer session. As a reminder, this conference is being recorded today, Tuesday, August 15, 2023. Now I would like to turn the call over to Mr. Bill Jones, Investor Relations. Please proceed.

Thank you, everyone, for joining today's call. Participating here today are BioKeys Chairman and CEO Mike DePasquale and CFO CeCe Welsh. As a reminder, today's conference call and webcast, as well as answers to investor questions, include forward-looking statements which are subject to certain risks and uncertainties that can cause actual results to differ from those currently expected. Words such as anticipate, believe, estimate, expect, plan, project, or similar words typically identify and express forward-looking statements. Such statements are made based on management's beliefs and assumptions as of today, using information currently available pursuant to the safe harbor from liability provisions of the Private Securities Litigation Reform Act of 1995. For a complete description of these and other risks that may affect future performance of the company, please see risk factors in the company's annual report as filed on Form 10-K with the SEC. Listeners are cautioned not to place undue reliance on forward-looking statements which speak as of today's date only. BioKey undertakes no obligation to revise or to disclose revisions to any forward-looking statements to reflect circumstances or events that occur after today. And now, let me pass the call to Mike to begin. Mike?

Thanks, Bill. Good morning, and thank everyone for taking time with us today. After my remarks, CC will review our financials, and then we will open the call to your questions. Although our Q2 revenues were roughly flat compared to Q2-22, largely reflecting the timing of larger opportunities, our first task performance reflects growing demand for our unique set of identity and access management solutions. Our first six months revenues rose 29%, reflecting solid progress in the growth in our software license and services revenue, which carry higher margins. and we were able to trim our net loss to 17 cents per share versus 34 cents per share in the year-ago first half. Importantly, we are building a growing base of annual recurring revenue in key verticals, including healthcare, government, and higher education, along with a robust pipeline of highly qualified large revenue opportunities that we expect to benefit our results in future periods. Our internal sales and marketing efforts have generated several significant IAM deployment prospects that we are working to advance to the contract stage. The scope and size of these projects typically involves longer sales cycles, so the timing is harder to predict. We believe BioKey's growing traction in the IAM space is a reflection of the strength of our flexible, scalable solutions and our leadership in identity-bound biometrics. Our suite of solutions offers a wide variety of multi-factor authentication options to uniquely address customer mandates for passwordless and phone-less authentication and are opening up larger opportunities for our company. I said last quarter that we've done particularly well in generating larger enterprise leads at recent Gartner-hosted events. proving a number of quality sales engagements with target enterprise accounts. Building on this direct sales effort, we also attended Identifers in June and the NACO CIO Summit in July and are planning to participate over the next few months in a number of security events along with our partners. We are confident that some of these larger scale opportunities should progress to formal deployments in the coming months. including a few that are already in proof-of-concept stages. Complementing these efforts is our expanding base of global technical alliances and distribution partner relationships, which position BioKey to participate in a much broader base of opportunities on a global basis. Key partners include Intellisys, which operates on a global basis, and 3i, which is focused in the financial services and healthcare verticals. In Q2, we added Savi Infotech in Ethiopia, Africa's second most populous country and one of the fastest growing economies in the world. Savi provides Ethiopian banks and government institutions with digital and banking solutions, including end-to-end card personalization, data protection, identity and access management, payment switching, and fraud management services. We also forged a partnership with Pixel Infinito to bring our innovative IAM solutions to their customers across Angola. We are also now officially in the AWS ISV Accelerate program. You'll hear more from us on that later this week or early next week, which is a very large and important ecosystem. This will provide access to all AWS financial services and healthcare selling teams. We are now working with the AWS network in Europe, the Middle East, and in Africa, helping customers to move their IAM deployments to the cloud for greater availability, scalability, resiliency, and reduced overhead costs. Working with AWS plays a critical role, particularly in this region. Due to the AWS partner network, we can now effectively extend the scope of marketing our sophisticated cloud-based IAM solutions worldwide through all of their sellers. We also have a newer effort that is focused on building technical alliances with other leaders in the IAM industry, such as Beyond Trust, ForgeRock, Ping Identity, and others. This strategy is designed to leverage our mutual strengths to enhance our ability to bring bio key solutions to our mutual customers. Through these companies, although these companies are also at times competitors, we have found ways to work together to identify and pursue significant new sales opportunities, some of which would be hard for us to pursue on our own. As partner source sales opportunities are increasing, we are expanding engagement and awareness of integrated BioKey capabilities with our channel alliance partners. We initiated what we call BioKey University for online training in BioKey solutions in the second quarter, and the next phase of the platform is targeted for October release. Our Q2 performance highlights included continuing traction with PortalGuard iDAS in supporting existing healthcare company clients, in their migration to the browser-based Epic HyperDrive patient management solution by November 2023. Recent deployments include the University of Iowa Hospitals and Clinics, Paulding Hospital, and Dayton Children's Hospital, both in Ohio. These existing BioKey biometric authentication customers are tapping the SAML capabilities of our PortalGuard iDesk platform to leverage their existing use of our identity-bound biometric solutions to provide strong authentication of healthcare personnel that are accessing shared workstation environments. PortalGuard benefits our customers by letting them extend the value of our biometric solutions while also avoiding user re-enrollment or the adoption of more cumbersome, expensive, or shared multi-factor authentication solutions. PortalGuard's industry-standard identity provider or IDP capabilities fully support HyperDrive's modern authentication approach. Importantly, BioKey's unique identity-bound biometric capabilities provide a personalized authentication solution that is both highly secure as well as frictionless for end users. Shared workstations, which are common in healthcare, customer service centers, even in manufacturing and industrial centers, provide security and access risks due to password, token, or card sharing. Biokeys IBB solutions address these vulnerabilities, supporting strong authentication capabilities in a cost-effective manner, balancing strong security, speed, and convenience. Turning to product, we recently completed the development of PortalGuard PG desktop multi-factor authentication for both Windows and Mac environments. We are currently redesigning our authentication engine and introducing certificate-based authentication to deliver an improved experience, also expected to be completed and released later this year. We also expanded PortalGuard support for managed service providers and introduced an enhanced iDesk platform with infrastructure improvements and Linux support. These are all part of continued efforts to build upon the value and functionality of our solutions. Working to strengthen our internal sales effort, we recently unified our sales and channel leadership under Galen Rogers to position our team for enhanced success in North America. New sales tactics are being deployed to enhance the quality and size of our engagements. We are starting to see progress in building our sales pipeline and improvements in sales forecasting, all benefiting from his guidance. Our goal is to grow our sales opportunity pipeline by 3X or three times in the second half of 2023. We recently onboarded a new sales engineering resource who comes to BioKey with many years of experience, most recently from Okta. It brings a new level of refinement and structure to our sales engineering capabilities that will positively influence our ability to close direct sales and support our channel partners. Our marketing effort also continues to drive demand through channel and partner marketing, supported by the recent launch of our partner channel blog. We are implementing account-based marketing, targeting larger commercial accounts, and adjusting our process to incorporate channel marketing and partners. In summary, given our progress to date and the actions we have taken for the future, we remain confident that BioKey is positioned to deliver significant top line and bottom line improvements in fiscal 2023. With those comments, I'll now turn the call over to our CFO, CeCe Welch.