bkyi20250630

bkyi20250630_10q.htm

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from to

Commission file number 1-13463

BIO-KEY INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	41-1741861
(State or Other Jurisdiction of Incorporation of Organization)	(IRS Employer Identification Number)

101 CRAWFORDS CORNER ROAD, SUITE 4116, HOLMDEL, NJ 07733

(Address of Principal Executive Offices) (Zip Code)

(732) 359-1100

(Registrant’s telephone number, including area code)

Securities registered pursuance to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which

registered

Common Stock, par value $0.0001 per share

BKYI

Nasdaq Capital Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☐

Non-accelerated filer ☒		Smaller Reporting Company ☒

		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by rule 12b-2 of the Exchange Act) Yes ☐ No ☒

Number of shares of Common Stock, $.0001 par value per share, outstanding as of August 12, 2025, is 6,863,776.

Table of Contents

BIO-KEY INTERNATIONAL, INC. AND SUBSIDIARIES

INDEX

PART I. FINANCIAL INFORMATION	3

Item 1— Financial Statements:
Condensed Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024	3
Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2025 and 2024 (Unaudited)	4
Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2025 and 2024 (Unaudited)	5
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 (Unaudited)	7
Notes to Condensed Consolidated Financial Statements	9

Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.	16

Item 3—Quantitative and Qualitative Disclosures about Market Risk.	23

Item 4—Controls and Procedures.	23

PART II. OTHER INFORMATION	24

Item 1—Legal Proceedings.	24

Item 1A—Risk Factors.	24

Item 2—Unregistered Sales of Equity Securities and Use of Proceeds.	24

Item 3—Defaults upon Senior Securities.	24

Item 4—Mine Safety Disclosures.	24

Item 5—Other Information.	24

Item 6—Exhibits.	24

Signatures	25

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PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BIO-KEY INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	*June 30,*			*December 31,*
	*2025*			*2024*
	(Unaudited)
ASSETS
Cash and cash equivalents	$	2,275,344		$	437,604
Accounts receivable, net		983,534			718,229
Due from factor		154,769			74,170
Inventory		318,538			378,307
Prepaid expenses and other		303,045			278,648
Total current assets		4,035,230			1,886,958
Equipment and leasehold improvements, net		102,499			140,198
Capitalized contract costs, net		367,125			409,426
Deposits and other assets		7,976			7,976
Operating lease right-of-use assets		60,829			73,372
Investments		5,000,000			5,000,000
Intangible assets, net		942,892			1,097,630
Total non-current assets		6,481,321			6,728,602
TOTAL ASSETS	$	10,516,551		$	8,615,560

LIABILITIES
Accounts payable	$	889,026		$	818,187
Accrued liabilities		1,170,889			1,278,732
Note payable		447,153			1,525,977
Government loan – BBVA Bank, current portion		125,562			132,731
Deferred revenue, current		873,394			773,267
Operating lease liabilities, current portion		25,886			24,642
Total current liabilities		3,531,910			4,553,536
Deferred revenue, long term		96,729			196,237
Government loan – BBVA Bank – net of current portion		-			44,762
Operating lease liabilities, net of current portion		35,735			48,994
Total non-current liabilities		132,464			289,993
TOTAL LIABILITIES		3,664,374			4,843,529

Commitments and Contingencies

STOCKHOLDERS’ EQUITY

Common stock — authorized, 170,000,000 shares; issued and outstanding; 6,848,776 and 3,715,483 of $.0001 par value at June 30, 2025 and December 31, 2024, respectively		685			372
Additional paid-in capital		137,948,437			133,030,271
Accumulated other comprehensive income		114,898			49,290
Accumulated deficit		(131,211,843	)		(129,307,902	)
TOTAL STOCKHOLDERS’ EQUITY		6,852,177			3,772,031
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	10,516,551		$	8,615,560

See accompanying notes to the condensed consolidated financial statements.

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BIO-KEY INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

	*Three Months Ended*						*Six Months Ended*
	*June 30,*						*June 30,*
	*2025*			*2024*			*2025*			*2024*
Revenues
Services	$	321,996		$	283,569		$	594,594		$	496,690
License fees		806,087			774,225			1,904,845			2,724,659
Hardware		568,824			83,492			804,627			101,140
Total revenues		1,696,907			1,141,286			3,304,066			3,322,489
Costs and other expenses
Cost of services		118,301			73,385			216,445			212,234
Cost of license fees		86,488			148,432			159,373			296,652
Cost of hardware		536,806			40,455			645,275			53,029
Cost of hardware - reserve		(277,415	)		-			(277,415	)		-
Total costs and other expenses		464,180			262,272			743,678			561,915
Gross profit		1,232,727			879,014			2,560,388			2,760,574

Operating expenses
Selling, general and administrative		1,680,550			1,941,866			3,053,074			3,724,839
Research, development and engineering		636,027			591,234			1,231,802			1,198,755
Total operating expenses		2,316,577			2,533,100			4,284,876			4,923,594
Operating loss		(1,083,850	)		(1,654,086	)		(1,724,488	)		(2,163,020	)
Other income (expense)
Interest income		2,092			46			2,095			51
Loan fee amortization		(60,000	)		(4,000	)		(120,000	)		(4,000	)
Change in fair value of convertible note
Interest expense		(25,638	)		(8,910	)		(61,548	)		(10,267	)
Total other income (expense), net		(83,546	)		(12,864	)		(179,453	)		(14,216	)

Loss before provision for income tax		(1,167,396	)		(1,666,950	)		(1,903,941	)		(2,177,236	)

Provision for (income tax) tax benefit		-			-			-			-

Net loss	$	(1,167,396	)	$	(1,666,950	)	$	(1,903,941	)	$	(2,177,236	)

Comprehensive loss:
Net loss	$	(1,167,396	)	$	(1,666,950	)	$	(1,903,941	)	$	(2,177,236	)
Other comprehensive income (loss) – foreign currency translation adjustment		58,805			24,220			65,608			(38,055	)
Comprehensive loss	$	(1,108,591	)	$	(1,642,730	)	$	(1,838,333	)	$	(2,215,291	)

Basic and diluted loss per common share	$	(0.20	)	$	(1.00	)	$	(0.36	)	$	(1.33	)

Weighted average common shares outstanding:
Basic and diluted		5,821,133			1,663,042			5,267,109			1,639,183

See accompanying notes to the condensed consolidated financial statements.

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BIO-KEY INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

										*Accumulated*
							*Additional*			*Other*
	*Common Stock*						*Paid-in*			*Comprehensive*		*Accumulated*
		*Shares*			*Amount*		*Capital*			*Income (Loss)*		*Deficit*				*Total*
Balance as of January 1, 2025		3,715,483		$	372		$	133,030,271		$	49,290	$	(129,307,902	)	$	3,772,031
Issuance of common stock for directors’ fees		8,913			1			9,001			-		-			9,002
Issuance of restricted stock to employees		2,500			-			-			-		-			-
Issuance of common stock for repayment of debt		504,605			50			858,950			-		-			859,000
Restricted stock forfeited		(7,572	)		-			-			-		-			-
Exercise of warrants		1,590,112			159			3,812,898			-		-			3,813,057
Foreign currency translation adjustment		-			-			-			6,803		-			6,803
Share-based compensation		-			-			52,488			-		-			52,488
Issuance costs		-			-			(248,783	)		-		-			(248,783	)
Net loss		-			-			-			-		(736,545	)		(736,545	)
Balance as of March 31, 2025		5,814,041		$	582		$	137,514,825		$	56,093	$	(130,044,447	)	$	7,527,053
Issuance of common stock for directors’ fees		14,223			1			11,001			-		-			11,002
Issuance of common stock for repayment of debt		498,437			50			399,950			-		-			400,000
Restricted stock forfeited		(18,176	)		(2	)		2			-		-			-
Issuance of restricted common stock to employees and directors		68,000			7			(7	)		-		-			-
Share-based compensation for Employee Stock Purchase Plan		-			-			876			-		-			876
Issuance of common stock for Employee Stock Purchase Plan		1,251			-			-			-		-			-
Foreign currency translation adjustment		-			-			-			58,805		-			58,805
Share-based compensation		-			-			21,837			-		-			21,837
Exercise of warrants		471,000			47			(47	)		-		-			-
Net loss		-			-			-			-		(1,167,396	)		(1,167,396	)
Balance as of June 30, 2025

SEC Form 10-Q filed by BIO-key International Inc.