BIO-key International, Inc.

Good morning, everyone. Thank you for standing by and welcome to BioKey International's 2024 third quarter conference call. During management's prepared remarks, all participants will be in listen-only mode. Afterwards, listeners will be invited to participate in a question and answer session. As a reminder, this conference is being recorded today, Friday, November 15th, 2024. I'll now turn the call over to Bill Jones, Investor Relations. You may proceed.

Thank you, Wyatt. Our hosts today are BioKeys Chairman and CEO, Mike DiPasquale, and its CFO, C.C. Welsh. As a reminder, today's conference call and webcast and answers to investor questions include forward-looking statements, which are subject to certain risks and uncertainties that may cause actual realized results to differ materially from those currently expected. Words such as anticipate, believe, estimate, expect, plan, and project or similar words typically express and identify forward-looking statements. These statements are made based on management's beliefs and assumptions using information currently available as of today pursuant to the safe harbor 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 also cautioned not to place undue reliance on forward-looking statements which speak only as of today. BioKey undertakes no obligation to revise or disclose any revisions to these statements to reflect circumstances or events that may occur after today. Now, I will hand the call over to Mike to begin. Mike?

Thanks, Bill. Good morning, and thank you all for joining today's call. After my prepared remarks, I will turn the call over to CeCe for a brief financial overview, and then we will open the call to investor questions. BioKey reported a solid Q3 performance, with revenue increasing 18% compared to Q3 last year to $2.1 million, which is a million-dollar improvement sequentially from last quarter. Importantly, high-margin license revenue rose 52%, to 1.4 million in Q3 24, which is a significant, significant improvement. We also received, subsequent to the close of the quarter, a number of large orders, one from a leading foreign defense ministry, as well as the province of British Columbia and Williamsburg, Virginia. Again, as I mentioned after the quarter end, we closed a large order from a long-time foreign banking and financial services customer for secure in-person identity, a portion of which will be reflected in this quarter or Q4 results and the balance in 2025. This customer has utilized BioKey technology to enroll the biometrics of more than 25 million of its banking customers in over the past few years as part of their know your customer KYC process and they have been using our fingerprint technology to verify customer identities against the bank card, account number or ID number prior to processing any transactions. They are now in the process of upgrading its system to BioKey's far more robust fingerprint only ID solution which allows them to positively identify the customer by matching solely their fingerprint against the biometric record securely stored in the cloud. This what we call one-to-many matching solution requires greater sophistication and IT resources than matching a biometric to a known account or ID number. As a result, the customer plans to host our solution entirely on the Amazon Web Services or AWS infrastructure to support the substantial technical demands of real-time one-to-many biometric ID. The customer is deploying our enhanced solution utilizing full benefit of our industry-leading biometric authentication technology to provide greater customer security, reduce fraudulent transactions, and enhance the customer experience as well as staff productivity by trimming transaction times by approximately 30 seconds. If you think about it, 30 seconds per transaction over millions of transactions is a lot of time savings. We believe this is a very exciting example of the power and efficiency of our biometric solutions to create transformational business and customer benefits. We plan to work with our customer and AWS, our partner, to develop a white paper or case study on this deployment and the significant value and benefits our advanced biometric solutions can bring to large-scale enterprise or government customers. We did have a few other large orders from existing customers recently, including a $500,000 follow-on order received in September from one of the world's most respected and tech-savvy defense ministries. The orders were pursuant to a three-year purchasing agreement under which the defense ministry has steadily expanded its deployment of BioKey solutions into new programs and user scenarios, allowing for secure phone lists, token lists, and passwordless authentication access to digital services. The deployment now encompasses over 33,000 users, and we expect additional awards as the Ministry expands the scope of our solutions to additional personnel. Likewise, as I mentioned, the province of British Columbia is adding 10,000 users to their existing deployment of our WebKey software, which is integrated with Broadcom's SiteMinder infrastructure to streamline and strengthen secure biometric access to applications via SAML2 federation standards. British Columbia is in the forefront of using biometric authentication for roving user scenarios that require advanced security. Delivered in a user-friendly way, which is where we really excel. Our biometric solutions also reduce the costs and risks of what you have solutions that only verify that a card, token, or even a password is present, but not necessarily with the authorized user. In terms of business development, I want to highlight the recent availability of our PortalGuard iDesk platform on Amazon Web Services or the AWS Marketplace. which enables Amazon customers around the world to purchase and deploy PortalGuard within their enterprise. Over 300,000 active customers find, test, buy, and deploy software solutions on the AWS marketplace. BioKey's position on AWS expands our visibility and reach into the community's substantial base of customer prospects. Though we are still in the early days and just starting to roll out marketing initiatives, we've been meeting with the Amazon sellers and partners to support this opportunity. We've already begun to source initial interest and product inquiries. The continued trend of remote work environments is likely a permanent fixture and additional regulatory requirements are increasing stringent cybersecurity underwriting standards. and they're mandating enhanced security solutions such as multi-factor authentication for employees, partners, and customers that access business systems and data, which are exactly the problems that BioKey solutions address. As with most small public companies, our performance varies on a quarter-to-quarter basis, mainly due to the timing and impact of larger customer contracts. Importantly, we are building a growing base of high-margin annual recovering revenues, or ARRs, with solid expansion potential. We will also continue to evaluate potential strategic opportunities to leverage our core expertise, products, and assets to create value for shareholders. We believe that the value of our technology, products, and our customer base with annual recovering revenues of approximately $6 million as a strategic value that significantly exceeds our current market cap. Today, millions of people use BioKey multi-factor authentication solutions on a daily basis for secure access to a variety of mobile and web applications, on-premise and in the cloud, from all of their devices. At BioKey, we go beyond just passwordless. We offer phoneless and tokenless authentication methods, which is a critical differentiator for retail, call centers, shop floor, and healthcare environments where roving workers use shared workstations. We remain very encouraged by the growing enterprise awareness of the importance of implementing secure, zero-trust identity and access management solutions, which is really the core of our business offerings. We remain focused on driving revenue growth and progressing our business to the point of profitability and positive cash flow over the coming quarters. We will support and leverage our channel alliance partners around the globe while also working to progress larger scale customer dialogues via our in-house direct sales efforts domestically. Turning to our balance sheet, we were successful in improving our cash position in Q3 with a approximately $1.9 million in gross proceeds from a warrant inducement agreement with an existing holder of BioKey warrants. The investor exercised warrants to purchase over 1 million shares of BioKey's common stock at an amended exercise price of $1.85 and received Series A and Series B warrants to purchase additional shares also at $1.85. With that, Let me turn the call to CeCe to review financials before we take questions.