WALL, NJ — (Marketwired) — 11/16/15 — BIO-key International, Inc. (OTCQB: BKYI), a leading fingerprint biometric identification software and technology provider, today reported results for its third quarter ended September 30, 2015. The Company will host a conference call today at 10:00 a.m. EST (details below) to review its results and it recent agreements that expand its technology base, product capabilities, global reach and provide a strong financial footing to fund future growth.

Reported Q3 and 9 month revenues of $670,000 and $3,591,000, respectively, nearly in-line with the lower end of the revenue guidance range.

Raised $7.5M in net new capital via private placement of convertible preferred securities convertible into common stock at $0.30 per share.

Secured commercial license to a portfolio of mobile and online payment software technologies from strategic partner and investor China Goldjoy Group Limited (CGG) (Hong Kong: 1282).

Shipped mobile biometric security solution for a new global payment customer.

Launched Asian sales, business development, and sourcing presence, opening offices in Hong Kong and the People–s Republic of China (PRC).

Partnered with Microsoft for its “Ignite your business with Windows 10 and Office 2016” series of events in 12 cities.

Michael DePasquale, Chairman and CEO of BIO-key, commented, “While the bulk of our recent efforts have been focused on negotiating and completing transformational technology licensing and funding transactions that have closed in recent weeks, BIO-key achieved Q3 revenue performance that was just shy of the low end of our Q3 revenue guidance. Importantly, we believe we have fundamentally reshaped BIO-key and its future growth potential through a significant cash infusion combined with a technology license agreement with an existing partner and provider of biometric and mobile payment technologies.

“These strategic agreements are already delivering tangible benefits to our company in terms of both sales opportunities and completed sales. During Q4, we have booked orders and completed an initial product shipment to a global payment company for a new mobile security application. At the same time, BIO-key is now able to pursue sales and marketing initiatives, such as our multi-city marketing partnership with Microsoft and the opening of BIO-key sales and sourcing offices in Hong Kong and in the PRC, which substantially expand the scope of our business reach.

“While we continue to expect variability in our quarterly operating results due to the size and shipment timing of orders in our pipeline, we are now even more bullish on BIO-key–s near- and long- term prospects, and remain comfortable in achieving full year 2015 results within our guidance range.”

Total revenue for Q3–15 decreased to $669,846 compared to a strong 2014 performance of $1,283,847 based on the shipment of a few large non-recurring license orders in Q3–14. Q3–15 license and other fee revenue decreased to $419,655 compared to $787,720 in Q3–14 and service revenues decreased to $250,191 in Q3–15 from $496,127 in Q3–14. The non-recurring custom services decreased due to a customer project that was completed at year-end 2014.

Q3–15 gross margin was 44% as compared to 81% in Q3–14, principally due to the decrease in higher margin license sales and higher volume hardware sales. Q3–15 operating expenses rose 5% to $1,382,566 from $1,314,513 in Q3–14, reflecting increases in both SG&A and R&D expenses related to the expanding scope of the business, costs related to the strategic transactions, and R&D efforts focused on product refresh updates and new product offerings, along with a reclassification of roughly $100,000 of Q3–14 service related R&D expenses to Cost of Goods Sold.

BIO-key reported Q3–15 net loss of ($1,079,584), or ($0.02) per basic share, compared to a net loss of ($51,526), or ($0.00) per basic share, in Q3–14. BIO-key had a weighted average number of basic shares outstanding of 66,038,941 and 58,026,262 in Q3–15 and Q3–14, respectively. Share and per-share figures have been adjusted to reflect a February, 2015 2-for-1 reverse split.

Net cash used for operations during Q3–15 was ($973,836) compared to ($1,696,817) in Q3–14. As of September 30, 2015, BIO-key reported current assets and working capital of $2,425,956 and ($604,256), respectively. Reflecting the impact of the convertible preferred placements and strategic license agreement, as of 11/12/2015 current assets and working capital were approximately $12,800,000 and $11,400,000, respectively.

The Company–s Fourth Quarter 2015 Opportunity Pipeline, representing the aggregate total of all deal opportunities that could book as revenue during the quarter, is comprised of 43 deals valued at approximately $8 million. The Company–s opportunity pipeline for the next twelve months (the aggregate total of all deal opportunities that could book as revenue over the next twelve months ending September 30, 2016) consists of 127 opportunities valued at $30 million, as compared to $25.0 million at December 31, 2014 and $25.0 million at June 30, 2015. Given the variability in the timing and size of potential contracts within the Company–s sales opportunity pipeline, BIO-key–s quarterly financial performance will likely vary significantly from quarter to quarter.

BIO-key has tightened its full year 2015 revenue guidance range to $5 million to $6 million, compared to revenue of $4.0 million in 2014. BIO-key expects Q4 revenue to range between $1.4 million and $2.2 million, versus $1.5 million in Q4 –14.

Gross margin is expected between 75% and 80% for the Fiscal Fourth Quarter and full year 2015 period. Reflecting additional dividend expense, BIO-key has revised its cash breakeven level to annual revenues of roughly $6.9 million.

Monday, November 16, 2015 at 10:00 a.m. EST
877-418-5460 or 412-717-9594, ask for BIO-key call
Available shortly after call at
877-344-7529 U.S., 855-669-9568 Canada, 412-317-0088 Intl.
Access code: 10070824

BIO-key International, Inc. develops and delivers advanced fingerprint biometric identification solutions to commercial and government enterprises, integrators, and application developers. BIO-key–s award winning, high performance, scalable, cost-effective and easy-to-deploy biometric finger identification technology accurately identifies and authenticates users of wireless and enterprise applications. Our solutions are used in local embedded OEM products as well as some of the world–s largest identification deployments to improve security, guarantee identity, and reduce identity theft. BIO-key–s technology is offered directly or by market leading partners around the world. ()

Certain statements contained in this press release and in other public statements by the Company and Company officers include or may contain certain forward-looking statements. All statements other than statements of historical facts contained in this press release, including statements regarding our future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “will,” “may,” “future,” “plan,” “intend” and “expect” and similar expressions generally identify forward-looking statements. These forward-looking statements are not guarantees and are subject to known and unknown risks, uncertainties and assumptions that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Although we believe that our plans, intentions and expectations reflected in the forward-looking statements are reasonable, we cannot be sure that they will be achieved. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: 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 between us and other companies in the biometric technology industry; market acceptance of biometric products generally and our products under development; 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 for the year ended December 31, 2014 filed with the Securities and Exchange Commission. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the foregoing. Except as required by law, we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.

The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.

Jay Meier
VP Corporate Development
BIO-key Intl, Inc.
651-789-6116

David Collins, Tanya Kamatu
Catalyst Global
212-924-9800

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