Bio-Key International Inc. 2023 10-K Filed

TL;DR

Bio-Key Intl 2023 10-K: $4.6M Rev, $646K Loss, $7M Assets, $1.8M Liab. Still burning cash.

AI Summary

Bio-Key International Inc. filed its 2023 10-K on June 5, 2024, reporting total assets of $7,020,258 and total liabilities of $1,789,720 as of December 31, 2023. The company's revenue for the fiscal year ending December 31, 2023, was $4,584,052, with a net loss of $646,486. Bio-Key International Inc. is incorporated in Delaware and its principal executive offices are located in Holmdel, NJ.

Why It Matters

This filing provides a comprehensive overview of Bio-Key International Inc.'s financial health and operational performance for the fiscal year 2023, crucial for investors and stakeholders to assess the company's current standing and future prospects.

Risk Assessment

Risk Level: medium — The company reported a net loss and has significant liabilities relative to its assets, indicating potential financial instability.

Key Numbers

• $7.02M — Total Assets (As of December 31, 2023, indicating the company's total resources.)
• $1.79M — Total Liabilities (As of December 31, 2023, representing the company's total obligations.)
• $4.58M — Revenue (For the fiscal year ended December 31, 2023, showing the company's top-line performance.)
• $0.65M — Net Loss (For the fiscal year ended December 31, 2023, highlighting the company's profitability.)
• 0.0001 — Earnings Per Share (Basic) (For the fiscal year ended December 31, 2023, indicating minimal earnings or loss per share.)

Key Players & Entities

• BIO KEY INTERNATIONAL INC (company) — Filer
• 0001019034 (company) — Central Index Key
• DE (location) — State of Incorporation
• HOLMDEL, NJ (location) — Business Address City, State
• 7323591100 (phone_number) — Business Phone
• SAC TECHNOLOGIES INC (company) — Former Company Name
• 19961115 (date) — Date of Name Change
• 20231231 (date) — Fiscal Year End
• 20240605 (date) — Filing Date
• $7,020,258 (dollar_amount) — Total Assets as of December 31, 2023

FAQ

Key Financial Figures

• $0.0001 — nge on which registered Common Stock, $0.0001 par value per share BKYI Nasdaq Cap
• $13.50 — registrant's post-split common stock of $13.50 as reported by the Nasdaq Stock Market

Filing Documents

• bkyi20231231_10k.htm (10-K) — 2085KB
• ex_574538.htm (EX-21.1) — 5KB
• ex_574539.htm (EX-23.1) — 5KB
• ex_671869.htm (EX-23.2) — 3KB
• ex_574541.htm (EX-31.1) — 9KB
• ex_574542.htm (EX-31.2) — 9KB
• ex_574543.htm (EX-32.1) — 6KB
• ex_574544.htm (EX-32.2) — 6KB
• bush.jpg (GRAPHIC) — 7KB
• 0001437749-24-019357.txt ( ) — 10493KB
• bkyi-20231231.xsd (EX-101.SCH) — 85KB
• bkyi-20231231_cal.xml (EX-101.CAL) — 85KB
• bkyi-20231231_def.xml (EX-101.DEF) — 599KB
• bkyi-20231231_lab.xml (EX-101.LAB) — 521KB
• bkyi-20231231_pre.xml (EX-101.PRE) — 646KB
• bkyi20231231_10k_htm.xml (XML) — 1811KB

Business

Business 1 Item 1A

Risk Factors

Risk Factors 9 Item 1B Unresolved Staff Comments 18 Item 1C Cybersecurity 18 Item 2

Properties

Properties 18 Item 3

Legal Proceedings

Legal Proceedings 18 Item 4 Mine Safety Disclosures 18 PART II 19 Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 19 Item 6 Reserved 19 Item 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 20 Item 7A

Quantitative And Qualitative Disclosures About Market Risk

Quantitative And Qualitative Disclosures About Market Risk 25 Item 8

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 25 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 25 Item 9A

Controls and Procedures

Controls and Procedures 26 Item 9B Other Information 26 Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 26 PART III 27 Item 10 Directors, Executive Officers and Corporate Governance 27 Item 11

Executive Compensation

Executive Compensation 30 Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 34 Item 13 Certain Relationships and Related Transactions, and Director Independence 36 Item 14 Principal Accountant Fees and Services 36 PART IV 37 Item 15 Exhibits and Financial Statement Schedules 37 Item 16 Form 10-K Summary 38

Signatures

Signatures 73 Table of Contents EXPLANATORY NOTE BIO-key International, Inc., and its consolidated subsidiaries (the "Company", "we" or "us") is filing this comprehensive annual report on Form 10-K for the fiscal year ended December 31, 2023 (the "Comprehensive Form 10-K"). This Comprehensive Form 10-K contains our audited financial statements for the fiscal year ended December 31, 2023 and 2022 as well as restatement of the following previously filed periods: (i) our unaudited consolidated financial statements covering the quarterly reporting periods during fiscal year 2023, consisting of the quarters ended March 31, 2023, June 30, 2023, and September 30, 2023. Restatement Background As previously disclosed, on April 16, 2024, the Audit Committee (the "Audit Committee") of the Board of Directors of the Company determined, after consultation with the Company's management and its independent auditors, that the Company made certain errors in the manner in which it recognized revenue generated by its European subsidiary, Swivel Secure Europe, SA, in the first quarter of 2023. In addition, certain allowances for accounts receivable and certain reserves for inventory were understated. As a result, the Company concluded that its previously issued consolidated financial statements for the three months ended March 31, 2023, the three and six months ended June 30, 2023, and the three and nine months ended September 30, 2023 included in the Company's previously filed Quarterly Reports on Form 10-Q for such periods (collectively, the "Restatement Periods") should be restated to correct historical errors related principally to the of recognition of the Company's revenues, allowances for accounts receivable, and certain reserves for inventory. The need for the restatement arose out of the results of certain financial analysis the Company performed in the course of preparing its fiscal year-end 2023 consolidated financial statements. In the course of the audit of the

BUSINESS

ITEM 1. BUSINESS Solely for convenience, trademarks and tradenames referred to in this Annual Report on Form 10-K appear (after the first usage) without the and symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or that the applicable owner will not assert its rights, to these trademarks and tradenames. Overview BIO-key International, Inc. (the "Company," "BIO-key," "we," or "us") is a leading identity and access management (IAM) platform provider enabling secure work-from-anywhere for enterprise, education, and government customers using secure multi-factor authentication (MFA). Our vision is to enable any organization to secure streamlined and passwordless workforce, customer, citizen and student access to any online service, workstation, or mobile application, without a requirement to use tokens or phones for roving users and shared workstations. Our products include PortalGuard and PortalGuard Identity-as-a-Service (IDaaS) enterprise IAM, WEB-key biometric civil and large-scale ID infrastructure, MobileAuth mobile phone authentication application for iOS and Android, and high-quality, low-cost accessory fingerprint scanner and FIDO-compliant hardware to provide a full and complete solution for identity-innovating customers. BIO-key PortalGuard empowers organizations to maximize the power of cloud, mobile and web technologies by securing users' identities and connecting them with the applications they rely on, while keeping cyber-intruders and unauthorized delegates (proxy users) out. Competing MFA solutions require a phone or token for every user authentication use case, but this is expensive and ineffective for workforce users who cannot use a phone in their workplace, who rove among workstations or share kiosks for access to information systems. BIO-key's exclusive Identity-Bound Biometrics (IBB) authentication methods address this by making biometric ide

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