May 17, 2017 -
BIO-key International issued financial results for Q1 2017, which saw the company’s total revenues increase 229 percent to $1.4 million compared to $0.4 million in Q1 2016.
BIO-key achieved positive cash flow for the quarter from operating activities of $116,953 compared to the negative operating cash flow of ($661,558) in Q1 2016.
The company’s net loss increased to $1,356,187 in Q1 2017 from $1,163,214 in Q1 2016. It attributes the increased net loss to non-cash expenses related to a $500,000 bad debt expense relating to a contract with payments behind schedule, as well as to non-cash expenses of $341,000 for the amortization of software license rights that began in Q1 2017.
Total revenue increased 229 percent to $1,418,335, compared to $430,592 in Q1 2016, primarily reflecting greater hardware and license sales.
Meanwhile, the operating expenses increased to $2,113,594 from $1,481,926 in Q1 2016, primarily due to a reserve against a contract whose payments are behind schedule.
BIO-key had several highlights throughout the quarter, including introducing a new line of biometric and Bluetooth enabled padlocks at the Consumer Electronic Show (CES) 2017, fully implementing a software as a service (SaaS) subscription pricing model with multi-year pricing options, and signing customer contracts with two regional banks.
In addition, the company ramped personnel and other resources at its Hong Kong subsidiary — which generated over $640,000 in revenue and $100,000 in operating profit over the past two quarters — to better support the diverse needs of the Asian market.
“As previously indicated, BIO-key had a strong start to the year, which also translated into positive operating cash flow,” said Michael DePasquale, chairman and CEO of BIO-key. “Importantly, the performance was spread across the business. It is gratifying to see the investments we have been making in the business begin to translate into higher sales activity.”
Based upon its solid first quarter performance, BIO-key is reiterating its full year 2017 revenue guidance of $6 to $12 million, with a gross margin ranging from 53 to 70 percent depending on a combination of hardware and software sales and now including software license amortization for the period.
At March 31, 2017, BIO-key had cash, cash equivalents and net receivables of $1,720,892, compared to $2,624,553 at December 31, 2016.
The company also noted that on May 3 it raised $1 million through the sale of common stock in a private placement with existing investor and member of its board, Fong Wong Kwok.
Kwok bought 277,778 shares at an average cost of $3.60 per share for a total of $1,000,000.80 on April 28th, according to a legal filing with the SEC.
According to The Markets Daily, Kwok now directly owns 1,327,737 shares of BIO-key stock, valued at $4,779,853.20.