BIO-key International, Inc.

Thank you for standing by, and welcome to BioKey International's second quarter 2025 call. During management's prepared remarks, all participants will be in a list of only notes. Afterwards, listeners will be invited to participate in a question and answer session. As a reminder, this conference is being recorded today, Wednesday, August 13, 2025. I will now turn the call over to Bo Jones, Investor Relations. You may proceed.

Thank you, Betsy. Hosting today are BioKeys Chairman and CEO, Mike DiPasquale, and its CFO, CeCe Welch. As a reminder, today's call and webcast, as well as 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 like anticipate, believe, expect, plan, and project, or any similar words, identify and express forward-looking statements. These statements are made based on the beliefs, assumptions, and information currently available to management as of today and are 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 may affect future performance, please see risk factors in the company's annual report on Form 10-K as filed with the Securities Exchange Commission. Listeners are cautioned not to place undue reliance on forward-looking statements made as of today, and the company makes no obligation to revise or disclose revisions to such statements to reflect circumstances or events that may occur after this call. Now, I will turn the call over to Mike to begin. Mike?

Thanks, Bill, and thank you all for joining us today. After my brief remarks and CC's financial review, we will open the call to investor questions. BioKey had a solid Q2 performance with revenue rising 49% versus last year and 6% on a sequential basis. We also advanced our expense reduction initiatives, trimming SG&A expenses by 13.5% versus last year more than offsetting increased investments in R&D to further enhance the capabilities of our solutions. We've also reduced our note payable to a balance of $447,000 from $1.5 million at the end of December 2024. Turning to business highlights in the quarter, BioKey and our partner RunLevel secured a major identity and access management deployment with the National Bank of Mozambique, Also in Q2, we extended our penetration of the defense intelligence market based on the capabilities and strength of our IAM, and in particular, our biometric-enabled solutions. We are highly limited in what we can say about security and defense customer engagements. But what I can say is that we completed the first phase of a deployment for a new international defense agency customer, and a respected Middle East police force commenced a three-year portal guard deployment. In addition, we secured $600,000 of follow-on orders for a prominent foreign defense ministry that bring this ongoing project to over $3 million in total revenue over the last few years. Building on our success with a growing list of foreign military and defense customers, Today we announce the formation of the BioKey Cyber Defense Initiative. We plan to staff this effort with sales and support executives that have strong military and intelligence experience to guide our efforts and to expand our market reach by building engagement with leading defense industry contractors. The initial focus of the Cyber Defense Initiatives will be in the EU, in Europe, where we have key reference accounts and member countries have committed to substantially expanding military and defense investments. Europe's Readiness 2030 framework and ReArm Europe plans aim to mobilize over 800 billion euros in defense investment over the next four years. Included within these efforts is the Security Action for Europe, or SAFE, loan mechanism, raising 150 billion euros for defense readiness including missile, defense, drones, and, of course, cybersecurity. Similarly, NATO members recently agreed to increase their defense and security spending to at least 5% of their GDP by 2035, more than doubling the previous longstanding target of 2% of GDP. Of the new 5% spending target, 1.5% is explicitly allocated to cybersecurity and security-related investments, including strengthening network defenses against cyberattacks. The EU complements these efforts through initiatives to secure 5G networks and critical infrastructures, as well as a dedicated action plan for cybersecurity in vital services like hospitals and healthcare providers. This unprecedented increase in spending is deemed essential for deterring aggression and countering complex hybrid threats. Outside the defense sector, we are particularly encouraged about overall growth opportunities in the EMEA regions of Europe, the Middle East, and Africa, where we have been seeing improved traction and a particular interest in our differentiated identity-bound biometric capabilities. We've refocused our efforts on BioKey branded solutions in those markets, following our transition away from the former licensed Swivl Secure solutions and services that we were selling in 2024 and previous to that. Though it takes time to rebuild the opportunity pipeline and channel strategy to focus solely on the BioKey product suite, we are seeing good traction and positive year-over-year revenue comparisons as we progress through the year. From a margin perspective, our focus on BioKey solutions provides us greater control and stronger gross margins, supporting our expectations for growth and enhanced margins from the EMEA group in the back half of 2025. Finally, across the business, we have been developing a new marketing program to better articulate our unique capabilities and compelling value proposition. Given the complexity and competition that exists in our space, we realized it was time to bring a new voice and focus to our core value proposition to better support our channel partners and direct sales efforts. In North America, we continue to build on our strong position in higher ed, healthcare, and other public sector segments, as well as finance and insurance. Benefiting from our growing base of reference accounts and IT professionals who have experienced firsthand the competitive strengths and value that we provide, in particular with our biometrics. In addition, we are taking steps to revitalize our North American direct and channel sales efforts by recruiting new leadership and cultivating a more collaborative and competitive sales culture to drive improved results. We are also moving back to an in-office model for our sales, business development, and marketing teams once again, which is identical to the way we operated before the COVID pandemic. In closing, we believe these strategic business development initiatives, coupled with our growing base of global channel partners, customers, and reference accounts, put BioKey in a strong position to deliver improved top and bottom line results in 2025 and beyond. We also continue to seek opportunities to reduce costs across the business, to lower our break-even level, and support our path to positive cash flow and profitability. I am excited about our potential over the coming quarters and appreciate the patience and support of our investors who have helped us get to this place. Now I will pass the call to CeCe Welch to review BioKey Financials.