BIO-key International, Inc.

Good morning, everyone. Thank you for standing by, and welcome to BioKey International's first quarter 2025 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, May 16, 2025. I will now turn the call over to Bill Jones, Investor Relations. You may proceed, sir.

Thank you, Rocco. Hosting today are BioKeys Chairman and CEO Mike DiPasquale and CFO C.C. Welch. As a reminder, today's conference call and webcast and answers to investor questions include forward-looking statements, which are subject to risks and uncertainties that may cause actual results to differ materially from current expectations. Words including anticipate, believe, estimate, expect, plan, and project, or similar words, generally identify and express such forward-looking statements. These forward-looking statements are made based on beliefs, assumptions, and information currently available to management today, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For a more complete description of the risks and uncertainties that affect future performance of BioKey, please see risk factors in the company's annual report as 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. The company undertakes no obligation to revise or disclose revisions to forward-looking statements to reflect circumstances or events that may occur after today's conference call. Now, I will turn the call over to Blank to begin. Mike?

Thanks, Bill, and thank you all for joining today's call. After my remarks, I'll turn the call over to CeCe for a financial overview, and then we will open the call for investor questions. Our Q125 revenue rose 10 percent to $1.6 million versus Q424 as we continue our transition to selling high-margin BioKey branded products in the EMEA region. Our year-over-year revenue comparison, however, was impacted by $1.2 million in revenue in Q1 last year for a two-year follow-on contract with a financial services customer. Importantly, the same customer has upgraded their engagement to include our more advanced one-to-many biometric authentication solution, resulting in Q125 revenue of $690,000, but accounting for much of our year-over-year revenue decrease. This enhanced fingerprint-only biometric ID system requires no card or account number for client identification, just a fingerprint scan. The solution will shave 30 seconds from each client interaction providing increased security and an improved customer experience, while also delivering substantial long-term personnel savings for our customer. This is a very compelling use case that should offer BioKey significant new revenue opportunities across a whole new plethora of opportunities, again, in the same industries and others as well. Importantly, based on the customer's expanded deployment, of our identity-bound biometric technology, we expect revenue from this customer to more than double to approximately $3 million for the next two-year license period starting in Q126, up from the $1.2 million in Q124. That is very, very positive and represents nearly half of what our total revenue number was last year. Our gross profit remained healthy in Q1 at 83% due to our high-margin software-as-a-service model, and we were able to reduce our SG&A expense by 23% year-over-year. Our cash position increased substantially in Q1-25 to over $3 million, reflecting proceeds from warrant exercises early in the quarter. We also reduced our note payable by more than half from year-end 2024 to a balance of approximately $762K on the original $2.3 million note. These balance sheet improvements provide solid support for the company as we pursue new growth opportunities. We're seeing solid traction for our identity-bound biometric solutions in key verticals, such as defense and financial services, both of which require the highest levels of security and privacy. These customers are drawn by our unique ability to authenticate the individual seeking data or network access, rather than alternate solutions that rely on alternate factors far more prone to being compromised. We now support secure biometric authentication from multiple foreign, national, and international defense and police organizations who trust BioKey solutions, and we are working to build on these powerful endorsements in our business development efforts. During the first quarter, the National Bank of Egypt began integrating BioKey's industry-leading PortalGuard IAM platform. The project was led by our partner, Raya Information Technology, leveraging PortalGuard's advanced IAM MFA and SSO capabilities to secure the digital identities of the bank's 30,000 employees. Down the road, we believe there's significant upside potential for this solution to be rolled out to the bank's end users as the bank gains more experience with our solution, and we work to progress that relationship. We're also working to build our base in the government sector, which includes federal agencies as well as state, local, and education, or SLED markets. Domestically, we serve over 100 educational institutions with over 4 million end users. These customers value BioKey security ease of use and flexibility, including our support for 17 different authentication factors, which together provide a compelling solution with an attractive return on investment. Given increasing bans on the use of cell phones in schools, there's a growing interest in our passwordless, phone-less, and token-less authentication solutions to meet pressing security and usability challenges. In Q125, the Wyoming Department of Education deployed Portal Guard IDAS to support up to 20,000 end users. Additionally, many of our existing college and university customers are migrating from our on-prem solution to Portal Guard IDAS, further expanding our base of recurring revenue. Also during Q1, we executed a strategic partnership and joint purchase agreement with California's EdTech Joint Powers Authority, enabling PortalGuard to become an approved solution for 195 K-12 schools and school districts that serve over 2.6 million students in California. Member schools are able to access the JPA website to easily purchase and deploy approved solutions. We believe BioKey is uniquely positioned to comply with the California phone-free schools regulations, which limit or prohibit smartphone use in schools by July of 2026. Whereas most competing solutions rely on phone authenticators or hardware security keys, neither of which are practical solutions in school. So this could be a significant opportunity for us. From a strategic standpoint, We are particularly encouraged about the growth opportunities in the EMEA regions of Europe, the Middle East, and Africa, where we have been seeing improving traction and a particular interest in our differentiated identity-bound biometrics capabilities. We have refocused our efforts on BioKey branded solutions in those markets, following our transition away from Swivl Secure licensed solutions and services, beginning in the latter half of 2024. While this transition has resulted in some challenging year-over-year revenue comparisons, it has focused our sales and marketing efforts while providing us greater control and much stronger margin profiles. We expect our expanding EMEA group to return to growth with enhanced margins as we progress through 2025. For many years, we've been highlighting the growing IT security risks and demonstrated vulnerabilities of many widely deployed IAM solutions, and yet we have been amazed by the limited forward movement by enterprises to address these risks. The good news is that we are finally starting to see governments and enterprises taking action to protect their data and networks with more powerful, more strong IAM solutions like our identity-bound biometrics. From our vantage point, C-suites and boards around the world are increasingly recognizing the limitations of legacy authentication methods, relying on passwords, pins, tokens, cards, or mobile devices, as well as the risks, vulnerabilities, and the cost of inaction. We are seeing this in our discussions with customers, prospects, and our channel alliance partners, and more importantly, in customer action, including some of the world's most sophisticated defense agencies, that we are serving. BioKey offers a powerful suite of IAM solutions that meet these challenges, and we expect the move to passwordless, boneless, and tokenless authentication solutions will offer continued opportunity for us to grow and gain traction in 2025 and beyond. Given this backdrop, our improved balance sheet and our expanding base of recurring IDaaS revenue we feel BioKey is well positioned to achieve improved top and bottom line results. Given our size and variable timing of large customer orders and renewals, we expect our financial performance to fluctuate quarter to quarter as it has been. But supported by this growing base of recurring revenue, which is over $6 million right now, we think we're going to become more stable. Now, I will hand the call over to CFO, to our CFO, Cece Welch, to review our financial position, and then we'll open the call to questions. Cece?