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?

Thank you, Mike. Our results were released after the market closed yesterday, along with the filing of our 10-Q. Now, let me review some of the operating highlights. As mentioned, we exited the EMEA Swivel Secure Services Agreement as related to royalty structure and fees created a fairly low margin business, and we reallocated resources towards the BioKey branded business. While the termination has created some revenue headwinds in the later half of 2024 and Q1 2025, it will strengthen our business longer term, focusing our activities on BioKey solutions with superior capabilities and enhanced margins. As Mike discussed, our Q1 revenue comparison was impacted by roughly half a million year-over-year decrease in revenue recorded in a financial services customer. The decrease resulted in the timing of revenue recognition from the customer that is actually expanding their deployment of BioKey technology. Given that impact and the transition to BioKey solutions in our EMEA territories, Our Q125 revenue decreased to $1.6 million in Q125, compared with $2.2 million in Q12024. Q125 service revenues increased to approximately $273,000 from $213,000 in Q124. Recurring support service revenue increased to 37% to $265,000 due to the incremental support services for a large customer service agreement. Non-recurring service revenue decreased by $12,000 due to rated wind down of a civil secure customer. Hardware revenue increased to $236,000 in Q125 from $18,000 in Q124, due largely to increased purchases of fingerprint biometric scanners to support expanded deployment of our identity-bound biometric solutions. Gross margin declined to 1.3 million in Q125 from 1.9 in Q124, principally due to the decrease in total revenue, as well as the modest decline in gross margin to 82.6% in Q125 versus 86.3% in Q124, reflecting an increase in lower margin hardware as a percentage of revenue in the respective periods. BioKey reduced operating expenses by approximately 18%, or $422,000, to $2 million in Q125, primarily due to reduction in SG&A expenses of 23%, or $410,000, reflecting lower admin expenses, sales personnel costs, and professional service fees. Reflecting lower revenues partially offset by lower operating costs, BioKey's Q125 net loss increased to approximately 737,000 or 16 cents per share versus a loss of 573,000 or 32 cents per share in the prior year period. The per share amounts are based on 4.7 million weighted average shares outstanding in Q1 25 compared to 1.6 million weighted average shares outstanding in Q1 24, principally reflecting the share increase pursuant to the warrant exercise in 2021-2025. In January 25, the exercise of warrants priced at $1.85 per share generated gross proceeds of approximately $3.8 million before agent fees and offering expenses. As of March 31, 2025, BioKey has current assets of $4.6 million, including $3.1 million of cash up from the current assets of $1.9 million, including $4 million in cash. This concludes my prepared remarks. Operator, please prepare for Q&A session.

Thank you. If you would like to ask a question, please press star then 1 on your telephone keypad. If your question has already been addressed and you'd like to remove yourself from queue, please press star then 2. Once again, ladies and gentlemen, that's star then 1 if you have a question. And we'll pause for just a moment to assemble our roster. And today's first question comes from Jack Mandersart with Maxim Group. Please go ahead.

Okay, good morning. Great. I appreciate the update, guys. Thanks for taking my questions. So, Mike, that large customer that you referenced contributed $690,000 in the first quarter of this year. Last year, I guess it was $1.2 million in the first quarter, $24 million. And you mentioned they upgraded, I believe, in 2020. You also expect them to renew, I guess, at a larger contract of $3 million over a two-year period. I think you said as of 1Q26. So a couple things. Is that correct, 1Q26? And then do you expect any other revenue this year from that customer? And is this your single largest customer? That's a loaded question.

Great. Great. So, thanks, Jack, and good morning. So, yes, it is now our single largest customer, so we'll get that out of the way. They've upgraded to our latest technology, which has fundamentally doubled the ARR. So, on an annual basis, they went from about $600,000 to $700,000 to approximately $1.4, $1.5 million. And so... We've been working with this customer for many, many years. This upgrade, which is what they paid for in the first quarter, right, on an annual basis, about $700,000 in Q1, will now represent in Q1 of 26, right? So fundamentally nine months from now, give or take, about a $3 million renewal. And if they do a two-year, that'll be $3 million they'll pay up front. If they do an annual contract, it may be a little bit more, and it'll be paid annually, but it'll be at least $1.5 million in ARR and revenue and cash to BioKey. And obviously, it's all margin. It's all software. So very, very positive.

Okay, great. And then maybe just to follow up on the 1Q25 revenue, so just trying to get a sense of the rest of the attribution there. So outside of 690K, that leaves about another 900,000 of revenue generated in the quarter. So what was the bulk of this? Was it Wyoming Department of Education? Was it National Bank of Egypt? Was it kind of half and half there? Or was there a bunch of other fragmented or little revenues as well? Just how I understand the rest of the revenue.

Yeah, yeah, it's a mix. So, you know, we have service and maintenance revenue. We have new customer revenue like Wyoming and National Bank of Egypt. We have upgrades to our install base. As I mentioned in my prepared remarks, we're moving customers from on-prem up into our IDAS, which is an upsell, generates more revenue for us, and again, commits customers to sometimes multi-year contracts. So it was really a mix of everything.

Okay, great. And Can you just touch on two? Will the Wyoming Department of Education and the National Bank of Egypt, will these contribute to 2Q revenue, or were these 1Q events?

They were 1Q events. And, you know, Egypt, there might be some, you know, continuing opportunity, right, for upgrades, enhancements, and all that stuff. But Wyoming, I believe, signed a multi-year agreement with and the revenue for that opportunity was taken in the first quarter. Obviously, there's deferral. There's some deferred revenue that we carve out of contracts for support, but fundamentally, it's Q1 event.

Okay, great. And then I haven't really heard it explicitly mentioned, and maybe I apologize if I missed this, but Can you maybe just touch on Passkey U again, that solution you announced originally back in June of 2024? What's the latest with Passkey U?

Well, Passkeys are getting pretty widely adopted across the board. And the unique value that we provide with our Passkey solution is that a biometric can become a Passkey and it can be a FIDO authenticator, right? So it's a very, very unique difference. from someone using a passkey with a phone or their computer. So it's something that we can sell to virtually any customer, no matter what current security infrastructure they may be using. So they may be using something from SailPoint or ForgeRock or even Okta or Ping or Duo. We can layer on our passkey solution on top of that In areas in their enterprise or their government agency where they can't use a phone, they can't use a hardware token because it's not allowed or it's just not practical, like on the manufacturing floor or in the call center where you don't want anyone using a cell phone, a mobile phone there, right? You literally disable the network inside a call center. So we have something here that's very, very unique. And that can be applied across the board throughout, again, enterprise and government opportunities. And we're starting to see some really good traction and interest for it. And we think that is a really good play for us going forward. But I think the biggest opportunity for us is really – and it's almost amazing to me because I've been at this for 20 years – the core – technology that we developed over the last 20 plus years is now being widely, widely viewed as the most secure and most convenient option for enterprises and government agencies. They realize that provisioning keys, using mobile phones, not having control over the networks, present a huge security risk. Herein lies a really big opportunity. The second thing is, think about all of, especially in EMEA, all of the countries now that are being somewhat forced by our actions here in the U.S. to step up their defense and security posture and the money that's being allocated to do that. I believe in Germany they said they would spend a trillion dollars over the next 10 years enhancing their defense. In Spain, just two weeks ago, our managing director was at a conference there with the former prime minister of Spain and the new regime there. And they are going to double their defense budgets in the coming, you know, quarters, through this year and into next year and beyond. So that is a huge opportunity. We built a really nice base of defense-related, security-related agencies, and now we can really take advantage of that and leverage that. And we have a very strong team and a very strong partner network in Europe to be able to do that.

Okay. That's really interesting, Mike. I could probably ask a bunch more questions on that front, but maybe I'll ask you, how do you see those opportunities in different regions, different governments stepping up their budgets for defense? How do you see those opportunities, the magnitude of those potential opportunities compared to, say, the largest customer that we talked about that's going to renew on a three-year contract or a $3 million contract coming up in on q26 or like the bank of egypt how did you see those opportunities i mean are these are these real game changers in your view um you know from a revenue scale um in in any any idea of like how attainable they are how quickly you can maybe penetrate some of those opportunities yeah well first of all pretty quickly um you'll hear more about that from us as we're able to

obviously discuss them. You know, one of the biggest challenges in that space is secrecy, right? It's very, very difficult to talk about those things. And those agencies are typically not desirous of disclosing that. But we have a defense ministry that's done millions with us over the last probably three or so years. And we think they can do millions with us over the next year or two. The size of these deals, you know, some of them in small countries could be a half a million dollars to start or larger. They're typically recovering revenue. They are mostly including our biometric technology, which means there's potential for not only recovering software but also hardware sales. And if you look at our, you know, gross margins, blended gross margins, you know, we're 82% this quarter. That's with hardware. So... These are sizable opportunities, game changers, and I think they could dramatically change the profile of the company. If you look at what we've been able to do in the context of scaling our expenses now, given we've invested very, very heavily in developing our technology, a little bit of scale here gets us to our end game of profitability very, very quickly. So I think these are the kinds – those are the kinds of opportunities that can get us there this year.

Okay. No, I appreciate that. Fantastic. And then, you know, I know you don't provide guidance, but, you know, we're halfway through the second quarter. Wondering if – a couple questions here on the outlook. Okay. Are there any large renewals, kind of like you had, or repeat purchase orders, renewals, kind of like we just talked about, that large defense ministry customer? Are there any of those in the second quarter or for the rest of this year that are coming up that are worth noting? And then the second part of my question is, do you have any just general comments on the second quarter seasonality-wise or how it looks compared to last year or what your expectations are? Thanks. Thanks.

Good. Okay, so on the guidance thing, you're right. We haven't provided guidance, but here's what I will say. And this applies to the second quarter and beyond. We're going to grow. And, you know, our goal and objective is to sequentially grow our business. And we have a model now. We have a really good base of customers, and we have a very strong pipeline of opportunities, albeit, you know, it's got to close, right? There's some very, very large deals. There's a whole bunch of smaller ones. but I think we're in a better position than we probably have ever been to be able to continue to grow this business on a sequential basis. Seasonality-wise, typically our third quarter, because of the August session in EMEA, in Europe in particular, August is a very, very slow month in Europe. So typically from a seasonality perspective, you might see some challenge in the third quarter. But other than that, I think our goal and objective is to sequentially grow this business this year and to get ourselves to profitability. That's our goal and objective.

Okay, great. So you expect – it sounds like you expect – I know it's not formal guidance, but just as a reasonable barometer here for investors – you're expecting sequential growth throughout the rest of this year. So Q2, Q3, Q4 should kind of kick up as we go forward each quarter. It could be lumpy maybe, but that's kind of a good framework to think about.

Absolutely. That's our goal and objective. And, again, I put the caveat in for the seasonality in Europe, right, just in the third quarter. But short of that, I think that's a fair statement and it's a fair perspective. on our objectives and our plan for this year.

Okay, great. And then if I can just sneak one more in there, Michael, this has been very helpful. So you guys did a great job of controlling the OpEx. Operating expenses definitely dipped down quite a bit, and yet you still achieved that sequential growth. And the gross margins held up very strong, especially on the hardware line even, too. So that's good to see. What's your confidence with your margins and your kind of operating expense control outlook? Is Q1 a good baseline of what to expect going forward as well with that sequential growth?

Well, on the gross margin side, I can say that, you know, this is where we like to be, right? We certainly want to be in that 80% range or higher, right? And that may depend on some very large, right? We get a very, very large software you know arr contract it could go up a little bit higher but we'd like to be in that range uh in the context of uh expenses we you know maybe i'll ask cc to answer that i mean do you believe that the q1 is a good uh is a good measure of where we'll be i mean we are very very diligent in the context of controlling uh all of our expenses all the way around um we've uh You know, we're spending money where we believe we're going to get a return, and not a long-term return, a short-term return, or a medium-term return. But anyway, Cece?

Yes, Mike, and I agree that's relatively a good rate. You know, we have a couple of shows planned, and that bumps it up a little bit. We also have, you know, a good commission plan in place, so, you know, that will rise with the tides. And then, again, we have our annual meeting, which also bumps up some of our costs. But we've been really trying to range things in, you know, new services versus hiring. So we've been, I think, really focused on that, and it's paid off.

Great. So just real quick, a follow-up to that. Do you think the second quarter has some of those one-off or, you know, seasonal kind of events or shows happening? will that incremental tick up happen in the second quarter or would it happen in the third quarter?

Well, the second quarter we have one show, so it won't be a big tick. And the meeting is usually in the third quarter. That's what we have planned right now. But I'm not expecting, you know, a big, you know, $200,000 increase or anything like that. We relatively, you know, we get a booth, we get some travel, so it's not... a huge bump, but it will be a bump.

Got it. Okay. Very helpful, guys. Thank you, C.C. Thank you, Michael. I appreciate the time. Great. Thanks, Jack.

Thank you. And our next question today comes from Dan Kamhis, a private investor. Please go ahead.

Well, hey, guys. You know, the improvement in the balance sheet is actually quite impressive. Just to ask another question on the SG&E, which... dropped to 1.37 million. I mean, I looked at the stats and it was at 3.05 in December 2022. It hasn't been this low since June 2021. Was there a drop in headcount? How did you manage that kind of, what is that, a 55% drop in a couple years?

C.C.? ?

Yes, there was a change in headcount. Like I said, we did some services versus that. We definitely reduced our marketing expenses. Oh, and we changed our audit firm, which made a big difference, too, for what we're getting versus what we're paying. And some rents. We lowered our rent expenses for our EGIN and our New Jersey, which, again, made huge differences. Cut one out and one in half.

Got it. Got it. Thank you. Also, deferred revenue looks to be at least a five-year high, from what I can tell, and increasing. Do you expect that increase to continue? Is that an indicator of increasing business, or is there some stalled delivery? How do I read that?

You read that we are converting a lot of one year contracts for a lot of our schools into three and five year contracts. So we recognize some of the revenue upfront and then the rest is deferred over that for support maintenance. You know, according to gap basically. So it is not because of we're not performing something. It's definitely because of increasing the longevity and the size of some of the contracts.

Good. Talking about cash burn, it was, I think, $835K in this quarter and $1.8 million over the last two quarters. Meanwhile, your accounts payable and accrued liabilities, I think, came down from, I don't know, between $2 and $3 million to about $1.6. So it looks like about $1.3 million of the $1.8 cash burn in operations or came from paying these down. Do you expect to continue paying down your payables that way? I'm trying to get a feel for your expected cash burn over the next couple quarters.

No, we were not in a good cash position at the end of the year to pay them, and when we were, we did pay them. So we are basically 45-day payment terms with most of our suppliers. So I don't expect that high of a burn in either one of the accrued liabilities or payables.

Okay, so we might see then decreased cash burn then in the next couple quarters? Yeah, depending on collections on AR, I would hope so. I think that $900K in current debt is due by the end of the year. Do you have any feeling when that will get paid off?

We're working on several different things that we will definitely pay it off by the term, but as you've seen, we've been paying some down as we raise money or as money comes in, so they're very happy with us. They've actually done some conversion of stock for payment of the loan. We have several opportunities, and they're a great company to work with, so I have expectations of paying it back in time, if not before.

Last question along this line is the accounts receivable are in low range relative to the last four years. Is that a harbinger that cash burn will increase in the second quarter by any chance?

No, we've had a reserve on AR, which we've kept at the level that it was, basically. We've also had some payments of some larger monies that came in, which contributed to the cash at the end of the quarter. So we'll expect them. It just depends when the orders come in. You'll see it go up and down, and also remember there's a reserve on it as well.

Okay, thanks. Mike, you said you're a You mentioned supporting a number of national and international defense and police organizations in your release, I think. You say international defense agency. Do you mean like a defense contractor, or do you mean like government defense ministry, like the British Ministry of Defense or French Armed Forces Ministry or something like that?

The latter, absolutely. It's government defense ministries. Some of those opportunities come through partners. In the EMEA region, typically they do, right, because these defense agencies and enterprises always buy through some reseller, distributor, partner, evaluated reseller, whatever. But the answer is no. It is directly related to government defense ministries, not contractors.

I see. And what is the... I know there was an international one that you mentioned, and you've had one ongoing that I think you mentioned has been worth millions of dollars or a million dollars a year. How does this new one sort of relate relative to the older one in terms of expected income? Do you expect it to kind of grow to meet the other one, or is it a smaller contract?

Well, sometimes they start off small and then they grow and develop. But we have not announced, you know, the – it's very, very difficult. I mentioned this before, so I'm not going to repeat myself. Very difficult to get these agencies to allow us to discuss anything that we're doing for them directly, right? So it's always kind of a blind announcement. And even that's a challenge. depending upon the type of agency and what we're actually engaged or involved in with them. But we have a number of these in motion right now, some closed, and more in the works.

I see. Well, the release said that the install happened in four days. Does that mean that the scope is smaller in size?

No, it just means that the partner that we work with on that opportunity and BioKey were able to very quickly deploy our portal guard technology, including the biometrics, in days. I mean, you know, some of these IAM deployments take months, and we were able to deploy in days. So that was the point we were trying to make in the release.

Yeah, I see. Any update on your investment in Boomerang?

No, nothing to speak of at this point. I know that they are heavily involved in – acquiring other technologies, and also, I guess, getting their prototypes moved to production. But beyond that, I really don't have any update.

Okay. Any update on the sale of some of your written-off inventory?

Yes. Aggressively pursuing. So we hope to to move a substantial chunk of that inventory pretty soon. That's our goal and objective.

I see. I think most of the hardware in the first quarter was not that inventory, right?

There was some of that, but the bulk of it was our traditional fingerprint scanner technology that we sell to our enterprise and government-type customers.

Oh, yeah, and talking about that, I think at some point you had a lot of inventory in China. Is that inventory still in China? And are the tariffs affecting the price of your readers?

The answer on the tariffs affecting the price of our readers, no. And we do have some inventory in China, although I don't think it's significant. But we do have inventory, parts and pieces, components that we... used to build our ecoID and our side swipe and side touch readers.

Okay, I think I got one last question maybe on valuation. It looks like your stockholders' equity is about $7.5 million. On 4.7 million shares, that's about $1.60 a share. Your stock is trading for half that. Cash is at 3.1 million, which is incredible, and that's about 66 cents a share. So the market seems to be assigning a value of about a million dollars to your company, excluding cash. I think the assumption being made there, if I could assume for the market, is that your equity in cash will trend towards zero by the end of the year, and you'll have to raise additional capital. What would you say to an investor who had that view?

The facts do not portray that. It's the only thing I can say. You know, I can't control the market nor understand the dynamics, right, up and down. I mean, you've seen our stock trade hundreds of millions of shares, you know, on an announcement and then rise dramatically. you know, exponentially and then come back down, I don't know what to say. I don't control that. But the facts don't bear that thesis. So, you know, that's it.

I appreciate it. I appreciate the time. Thanks, C.C. Thanks, Mike. Thank you, Dan.

And as a reminder, if you'd like to ask a question, please press star then 1. Showing no further questions, the Q&A session has ended. Now I'll ask Mike DiPasquale to provide closing remarks.

Thank you, everyone, for your time today and for joining the call. You may reach out to our IR team, whose contact information is in today's press release, with any follow-up, actually yesterday's press release, with any follow-up questions. Also, look for us at two upcoming conferences, first at the Aegis Capital Virtual Conference on Thursday, March May 22nd, and then at Maxim Group's 2025 Virtual Tech Conference on Wednesday, June 4th, both at 11 a.m., by the way. We expect to participate virtually and be available for investor meetings for both. We look forward to updating you on our Q2 call this summer, and we'll provide interim news and updates via press release. Thank you again, and have a great weekend.

Thanks, everybody. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.