BIO-key International, Inc. (Nasdaq: BKYI), an
innovative provider of workforce and customer identity and access
management (IAM) solutions featuring Identity-Bound Biometrics
(IBB) and large-scale identity solutions, today reported results
for its fourth quarter (Q4’21) and year ended December 31, 2021
(FY’21). BIO-key will host a conference call today at 10:00 a.m. ET
(details below) to review its results and outlook.
BIO-key’s® revenue increased 80% to $5.1M in
FY’21, from $2.8M in 2020 (FY’20), driven primarily by deployments
of its PortalGuard® IAM solution and the launch of a cloud hosted
version, PortalGuard IDaaS (IDentity-as-a-Service), in November
2020.
2021 & Recent
Highlights:
- Increased PortalGuard
Penetration of Secondary Educational Institutions -
PortalGuard now supports over 2.5M students and faculty
nationwide.
- Added or Expanded
Numerous Government Customers, including
a U.S. Department of Justice division; a Foreign Defense Ministry;
a West Coast State; and Election Boards & County Governments in
New Mexico; South Dakota; Missouri; New York; and Florida.
- Began Initial Technology and Mobile
Biometric Enrollment Equipment Deployments, for its
Large-Scale ID Projects in Africa.
- Added over 100 Channel
Alliance Partners, including: Intelisys; NGEN; Appsian;
Cyberlitica; Kristel Communications and UVS Infotech.
- Secured a
$1.2M, three-year contract extension for
fingerprint biometric security support services from a Fortune 500
telecommunications customer.
- Launched a Range of New
Products and features, including SSO Concierge; a new
PortalGuard Admin Panel; MobileAuth™ App with PalmPositive™; FIDO2
Compliant Security Keys; a Next-Generation EcoID II USB Compact
Fingerprint Scanner; and the MobilePOS Pro Android All-in-one
Terminal for biometric-secured Commerce.
- Awarded U.S.
Patent for Enabling Next-generation Continuous Biometric
User Authentication, increasing BIO-key’s IP Portfolio to 18
patents.
In March 2022, BIO-key further expanded its
global customer base and geographic reach with the acquisition of
Swivel Secure Europe, a Madrid-based IAM solutions provider serving
customers in Europe, the Middle East and Africa (EMEA). Swivel
Secure generated approximately $3.1M in revenue and $578K in
operating income in calendar 2021.
BIO-key CEO Michael DePasquale commented, “2021
was a year of transformational growth for BIO-key, as we advanced
our core Identity and Access Management business, launched a range
of new solutions, expanded our Channel Partner Program, and
commenced deployments for our large-scale Civil ID contracts in
Africa. We substantially expanded our sales & marketing reach
in 2021, adding over 100 partners to our CAP program, and launched
a Master Agent Referral Program with Intelisys, positioning
PortalGuard as the first IAM platform to be offered through their
extensive network.
“We also made excellent progress deploying our
new cloud-hosted PortalGuard IDaaS solution, which we launched late
in 2020. We are achieving solid new customer engagement,
particularly in higher education, enterprise and government
verticals that are very receptive to PortalGuard’s support for
sixteen multi-factor authentication (MFA) methods, including
BIO-key’s advanced biometric solutions. PortalGuard IDaaS continues
to gain momentum in higher education as a strong, user friendly,
attractively priced, scalable and easy-to-deploy solution for their
hybrid access needs. In the first year of deployment we migrated
approximately 7% of our existing customers to our IDaaS solution,
increasing average annual recurring revenue by roughly 300% and
forming a growing base of recurring software subscription revenue
that we look to build on in the years to come. Currently, IDaaS
revenue accounts for approximately 80% of our total software and
non-recurring service revenue.
“Our continued focus on innovation and new
product development resulted in the launch of several new products
and product upgrades. New products included our new MobilePOS Pro,
a handheld Point-of-Sale mobile commerce terminal with biometric ID
verification for secure, fraud-free transactions in banking,
healthcare and social and aid worker applications. We introduced a
line of cryptographic FIDO2 compliant security keys for expanded
authentication options and launched our new EcoID II Compact USB
fingerprint scanner with new NIST-tested algorithms. We also
introduced our Single Sign-On or SSO Concierge which eliminates the
need for passwords for thick client applications not supported by
identity federation protocols.
“I am extremely proud of the industry awards and
acknowledgements BIO-key received during the year, including for
our Technology and Best Solution Awards, and for our organization
being Certified™ by Great Place to Work® for the first
time.
“Our large-scale Africa projects kicked off in
2021 after COVID and other external delays. These projects
represent a large opportunity in terms of revenue and profits for
our company. Hardware shipments resumed in 2021 and there are
increasing signs that these projects should gain momentum in 2022.
We are currently planning on supplying tens of thousands of
Pocket10 biometric fingerprint readers in a partnership with
Specta, an online lending platform owned by Sterling Bank Nigeria
Plc. These shipments are part of the National Identity Management
Commission’s (NIMC) mandated enrollment program for Nigerian
citizens.
“Subsequent to year end we acquired Swivel
Secure Europe. The transaction substantially expands our
international team, operations, customer base, and growth
potential, and should provide a material benefit to both our top-
and bottom-line in 2022.
Outlook“Awareness of the need
for enhanced cybersecurity has never been more widespread. In 2021,
the President signed EO 14028, “Improving the Nation’s
Cybersecurity” to support defenses and protect critical
infrastructure of the Federal Government. Just last week, the White
House warned companies that we are currently in a critical moment
with a need to accelerate work to improve domestic cybersecurity
and bolster national resilience. BIO-key’s solutions and products
directly address these issues and are critical elements of a
holistic approach to cybersecurity.
“Considering this backdrop, the momentum we have
in our business, the addition of Swivel Secure Europe, and the
building progress in our African projects, we have never been more
optimistic about our prospects. Supported by our strong capital
position, our talented global management and product development
teams, we are very optimistic about our growth in 2022 and beyond.
Reflecting the visibility we have on our business, we are
initiating full-year 2022 revenue guidance in the range of $10-13M,
representing potential growth in excess of 100% over 2021. We
estimate that we can achieve break-even operations within this
revenue range, subject to our mix of hardware and higher-margin
software revenue.
Financial ResultsFY’21 revenue
increased 80% to $5.1M from $2.8M in FY’20, due primarily to
revenue from the Company’s PortalGuard IAM solutions, as well as
increased sales of biometric hardware, including fingerprint
readers. Q4’21 revenue declined to $935K from $1.1M in Q4’20, which
had benefitted from the PortalGuard IDaaS launch and strong
services and hardware sales.
Gross profit grew to $3.4M in FY’21 from $2.0M
in FY’20, due primarily to a 166% increase in higher-margin license
fee revenue to $2.5M in FY’21. Gross margin on license fee revenue
was 93% in FY’21 vs. 95% in FY’20. In Q4’21, license fee revenue
increased 52% to $544k from $357k in Q4’20 and represented 88% of
total gross profit vs. 69% in Q4’20.
Operating expenses increased to $8.4M in FY’21
(164% of revenue) from $7.2M (255% of revenue) in FY’20. The
increase reflected higher investments in research, development and
engineering expense with an increase in personnel and spending to
support new product development, as well as a full year of expenses
related to PortalGuard operations in FY’21. Total operating
expenses increased 18.% to $2.6M in Q4’21, due principally to
increased research, development and engineering expenses related to
the development of next generation solutions.
BIO-key reported a reduced operating loss of
$4.9M in FY’21 vs. $5.2M in FY’20, as revenue growth outpaced
expense growth. The company’s Q4’21 operating loss increased to $2M
from a loss of $1.4M in Q4’20, due to lower revenues and higher
expenses in Q4’21.
BIO-key reported a reduced net loss available to
common stockholders of $5.1M, or $0.65 per share, in FY’21, as
compared to $9.8M, or $2.08 per share, in FY’20. Weighted average
basic shares outstanding were approximately 7.8M in FY’21 vs. 4.7M
in FY’20, with both years reflecting a 1-for-8 reverse split in
Q4’20, following a successful capital raise in Q3’20. Due to the
offering, interest expense was reduced to just $18K in 2021 from
$4.3M in FY’21. BIO-key’s net loss to stockholders increased to $2M
in Q4’21 from $1.4M in Q4’20, primarily due to lower operating
income.
Financial StrengthBIO-key ended
the year with $14.0M of current assets; including $7.75M of cash
and cash equivalents; $11.9M of net working capital; and $15.6M of
stockholders’ equity.
Conference Call
Details |
|
Date / Time: |
Today, Tuesday, March 29th at
10 a.m. ET |
Call Dial In #: |
1-877-418-5460 U.S. or 1-412-717-9594
International |
Live Webcast / Replay: |
Investor Webcast &
Replay – Available for 3 months. |
Audio Replay: |
1-877-344-7529 U.S. or
1-412-317-0088 Int’l; code 8157908 |
|
|
About BIO-key International,
Inc. (www.BIO-key.com)BIO-key has over two decades of
expertise in providing authentication technology for thousands of
organizations and millions of users and is revolutionizing
authentication with biometric-centric, multi-factor identity and
access management (IAM) solutions, including PortalGuard that
provides convenient and secure access to devices, information,
applications, and high-value transactions. BIO-key's patented
software and hardware solutions, with industry-leading biometric
capabilities, enable large-scale on-premises and
Identity-as-a-Service (IDaaS) solutions as well as customized
enterprise and cloud solutions.
BIO-key Safe Harbor
StatementAll statements contained in this press release
other than statements of historical facts are "forward-looking
statements" as defined in the Private Securities Litigation Reform
Act of 1995 (the "Act"). The words "estimate," "project,"
"intends," "expects," "anticipates," "believes" and similar
expressions are intended to identify forward-looking statements.
Such forward-looking statements are made based on management's
beliefs, as well as assumptions made by, and information currently
available to, management pursuant to the "safe-harbor" provisions
of the Act. These statements are not guarantees of future
performance or events and are subject to risks and uncertainties
that may cause actual results to differ materially from those
included within or implied by such forward-looking statements.
These risks and uncertainties include, without limitation, our
history of losses and limited revenue; our ability to raise
additional capital; our ability to protect our intellectual
property; changes in business conditions; changes in our sales
strategy and product development plans; changes in the marketplace;
continued services of our executive management team; security
breaches; competition in the biometric technology and identity
access management industries; market acceptance of biometric
products generally and our products under development; our ability
to execute and deliver on contracts in Africa; our ability to
expand into Asia, Africa and other foreign markets; our ability to
integrate the operations and personnel of PistolStar and Swivel
Secure into our business; the duration and severity of the current
coronavirus COVID-19 pandemic and its effect on our business
operations, sales cycles, personnel, and the geographic markets in
which we operate; the duration and extent of continued hostilities
in Ukraine and its impact on our European customers, delays in the
development of products and statements of assumption underlying any
of the foregoing as well as other factors set forth under the
caption "Risk Factors" in our Annual Report on Form 10-K and other
filings with the Securities and Exchange Commission. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date made. Except as
required by law, we undertake no obligation to disclose any
revision to these forward-looking statements whether as a result of
new information, future events, or otherwise.
Engage with
BIO-key |
|
Facebook – Corporate: |
https://www.facebook.com/BIOkeyInternational/ |
LinkedIn – Corporate: |
https://www.linkedin.com/company/bio-key-international |
Twitter – Corporate: |
@BIOkeyIntl |
Twitter – Investors: |
@BIO_keyIR |
StockTwits: |
BIO_keyIR |
Media Contact |
Investor Contact |
Erin Knapp |
William Jones, David
Collins |
Matter Communications |
Catalyst IR |
BIO-key@matternow.com |
BKYI@catalyst-ir.com |
914-260-3158 |
212-924-9800 |
BIO-key International, Inc. and
SubsidiariesCONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
Three months endedDecember
31, |
|
|
Years endedDecember 31, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services |
|
$ |
288,191 |
|
|
$ |
503,667 |
|
|
$ |
1,273,354 |
|
|
$ |
1,432,228 |
|
License fees |
|
|
544,199 |
|
|
|
356,672 |
|
|
|
2,555,809 |
|
|
|
962,038 |
|
Hardware |
|
|
102,542 |
|
|
|
203,491 |
|
|
|
1,285,326 |
|
|
|
442,516 |
|
Total revenues |
|
|
934,932 |
|
|
|
1,063,830 |
|
|
|
5,114,489 |
|
|
|
2,836,782 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and other
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
|
174,815 |
|
|
|
165,274 |
|
|
|
686,175 |
|
|
|
502,214 |
|
Cost of license fees |
|
|
49,871 |
|
|
|
20,405 |
|
|
|
183,199 |
|
|
|
49,891 |
|
Cost of hardware |
|
|
147,365 |
|
|
|
124,821 |
|
|
|
803,555 |
|
|
|
242,721 |
|
Total costs and other expenses |
|
|
372,051 |
|
|
|
310,500 |
|
|
|
1,672,929 |
|
|
|
794,826 |
|
Gross Profit |
|
|
562,881 |
|
|
|
753,330 |
|
|
|
3,441,560 |
|
|
|
2,041,956 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
|
1,752,344 |
|
|
|
1,765,119 |
|
|
|
6,028,360 |
|
|
|
5,848,687 |
|
Research, development and
engineering |
|
|
809,856 |
|
|
|
409,761 |
|
|
|
2,355,056 |
|
|
|
1,396,436 |
|
Total operating expenses before impairment |
|
|
2,562,200 |
|
|
|
2,174,880 |
|
|
|
8,383,416 |
|
|
|
7,245,123 |
|
Operating
loss |
|
|
(1,999,319 |
) |
|
|
(1,421,550 |
) |
|
|
(4,941,856 |
) |
|
|
(5,203,167 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
299 |
|
|
|
3,741 |
|
|
|
4,075 |
|
|
|
30,649 |
|
Foreign Currency Loss |
|
|
- |
|
|
|
- |
|
|
|
(50,000 |
) |
|
|
- |
|
Investment-debt security
reserve |
|
|
(30,000 |
) |
|
|
- |
|
|
|
(60,000 |
) |
|
|
- |
|
Government grant – Paycheck
Protection Program |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
340,819 |
|
Interest expense |
|
|
- |
|
|
|
(19,635 |
) |
|
|
(18,000 |
) |
|
|
(4,343,212 |
) |
Loss on extinguishment of
debt |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(499,076 |
) |
Total other income (expense) |
|
|
(29,701 |
) |
|
|
(15,894 |
) |
|
|
(123,925 |
) |
|
|
(4,470,820 |
) |
Net loss |
|
|
(2,029,020 |
) |
|
|
(1,437,444 |
) |
|
|
(5,065,781 |
) |
|
|
(9,673,987 |
) |
Deemed dividend from trigger
of anti-dilution provision feature |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(112,686 |
) |
Net loss available to common
stockholders |
|
$ |
(2,029,020 |
) |
|
$ |
(1,437,444 |
) |
|
|
(5,065,781 |
) |
|
|
(9,786,673 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Loss
per Common Share |
|
$ |
(0.26 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.65 |
) |
|
$ |
(2.08 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted |
|
|
7,797,573 |
|
|
|
7,771,523 |
|
|
|
7,791,741 |
|
|
|
4,700,787 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All BIO-key shares issued and outstanding for all periods reflect
BIO-key’s 1-for-8 reverse stock split, which was effective November
20, 2020. |
BIO-key International, Inc. and
SubsidiariesCONSOLIDATED BALANCE
SHEETS |
|
|
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
ASSETS |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
7,754,046 |
|
|
$ |
16,993,096 |
|
Accounts receivable, net |
|
|
970,626 |
|
|
|
548,049 |
|
Due from factor |
|
|
49,500 |
|
|
|
60,453 |
|
Note receivable |
|
|
82,000 |
|
|
|
295,000 |
|
Inventory |
|
|
4,940,660 |
|
|
|
330,947 |
|
Prepaid expenses and
other |
|
|
216,041 |
|
|
|
201,507 |
|
Investment – debt
security |
|
|
- |
|
|
|
512,821 |
|
Total current assets |
|
|
14,012,873 |
|
|
|
18,941,873 |
|
Resalable software license
rights |
|
|
48,752 |
|
|
|
58,882 |
|
Investment – debt
security |
|
|
452,821 |
|
|
|
- |
|
Equipment and leasehold
improvements, net |
|
|
69,168 |
|
|
|
81,793 |
|
Capitalized contract costs,
net |
|
|
249,012 |
|
|
|
165,315 |
|
Deposits and other assets |
|
|
8,712 |
|
|
|
8,712 |
|
Note receivable, net |
|
|
113,000 |
|
|
|
- |
|
Operating lease right-of-use
assets |
|
|
254,100 |
|
|
|
487,325 |
|
Intangible assets, net |
|
|
1,298,077 |
|
|
|
1,514,146 |
|
Goodwill |
|
|
1,262,526 |
|
|
|
1,262,526 |
|
Total non-current assets |
|
|
3,756,168 |
|
|
|
3,578,699 |
|
TOTAL
ASSETS |
|
$ |
17,769,041 |
|
|
$ |
22,520,572 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
427,772 |
|
|
$ |
244,158 |
|
Accrued liabilities |
|
|
865,627 |
|
|
|
508,487 |
|
Note payable – PistolStar
acquisition, net of debt discount |
|
|
- |
|
|
|
232,000 |
|
Deferred revenue –
current |
|
|
565,355 |
|
|
|
657,349 |
|
Operating lease liabilities,
current portion |
|
|
177,188 |
|
|
|
234,309 |
|
Total current liabilities |
|
|
2,035,942 |
|
|
|
1,876,303 |
|
Deferred revenue – long
term |
|
|
67,300 |
|
|
|
44,987 |
|
Operating lease liabilities,
net of current portion |
|
|
86,974 |
|
|
|
264,163 |
|
Total non-current liabilities |
|
|
154,274 |
|
|
|
309,150 |
|
TOTAL
LIABILITIES |
|
|
2,190,216 |
|
|
|
2,185,453 |
|
|
|
|
|
|
|
|
|
|
Commitments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Common stock — authorized, 170,000,000 shares; issued and
outstanding; 7,814,572 and 1,812,483 of $.0001 par value at
December 31, 2020 and December 31, 2019, respectively |
|
|
786 |
|
|
|
782 |
|
Additional paid-in
capital |
|
|
120,153,509 |
|
|
|
119,844,026 |
|
Accumulated deficit |
|
|
(104,575,470 |
) |
|
|
(99,509,689 |
) |
TOTAL STOCKHOLDERS’
EQUITY |
|
|
15,578,825 |
|
|
|
20,335,119 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
$ |
17,769,041 |
|
|
$ |
22,520,572 |
|
|
All BIO-key shares issued and outstanding for all periods reflect
BIO-key’s 1-for-8 reverse stock split, which was effective November
20, 2020. |
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