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BIO-key International Message from Chairman & CEO Michael W. DePasquale Dear BIO-key Stockholders, The BIO-key team has made significant progress across a range of fronts in 2025 and to date. Those efforts have benefited our financial results so far in 2026 and put us on track to reach profitability in the next few quarters and potentially for the full year. Importantly, in 2025 we completed the transition to selling only BIO-key branded solutions in the EMEA region, after phasing out the in-licensed products that enabled us to build a solid presence in these markets. Though this shift temporarily pressured license revenue, it puts us in an excellent position to build a broader pipeline of EMEA partner and channel opportunities distributing BIO-key solutions which generate materially better margins. Based on expanding customer deployments and a broadening deal pipeline, we expect growth in software license fees and overall revenues in 2026. We got off to a strong start with Q1 26 revenue growing 34% yearover-year and 74% sequentially to approximately $2.15M. Higher revenue, combined with cost management, enabled us to deliver meaningful improvement to our bottom-line results as compared to prior periods. It is a solid start to the year, which we expect to continue in future quarters and advance our goal of achieving profitability. Building Traction in Foreign Defense, Financial Enterprises, and International We see particular strength with government, defense, and financial services customers outside the U.S. These customers value the robust security, performance and cost benefits of BIO-key s biometric solutions. This interest is further supported by more favorable regulatory frameworks in key international jurisdictions and their closer proximity to escalating geopolitical tensions. In 2025, we launched our Defense & Intelligence Cybersecurity Initiative in anticipation of rising global defense budgets, particularly across Europe and the Middle East. This initiative leverages our growing base of military and defense customers, as well as our dedicated sales and support teams, to strengthen engagement with prime contractors and end users in these regions. In Q1 26, we secured $500,000 of follow-on orders from a foreign defense ministry that continues to build out its deployment of our biometric user authentication solutions. This contributed to total military and defense revenue exceeding $2.2 million over the last twelve months, including a significant new deployment with a Middle East defense Sector organization in Q4 25. Given our solutions proven effectiveness in mission-critical environments, we see excellent growth prospects within government, security and defense verticals in coming years. Beyond defense, we are expanding our geographic footprint and customer reach through new international distribution partnerships in India, Vietnam, the Middle East, and the Nordic region of Europe. These alliances provide us with access to a broader set of enterprise customers. The financial services sector remains an area of strength and focus. A long-standing foreign retail bank customer recently executed a $1 million annual license renewal for the expanded use of our biometric identity solution for their 30+ million clients. We also partnered with Run-Level to deliver our identity security via SIMO for Mozambique s national payments infrastructure, our 11th financial services customer, globally. In the U.S., we recently partnered with TD Synnex Public Sector (DLT) to bring our solutions to government agencies. These
agencies are working to comply with mandates for Zero trust infrastructure, including phish-resistant MFA. This partnership provides public sector access and a streamlined procurement path for agencies and governmentrelated entities to implement BIO-key solutions. DLT s parent, TD Synnex, is a leading technology solutions provider with annual sales of over $60B. Cost Management, Financial Strength, and Outlook Parallel with our growth initiatives, we further enhanced operational efficiency in 2025, reducing total SG&A expense by $768,000, or 11%, and total operating expenses by 7%. We were also able to strengthen our financial position, as we ended the year with $2.7M in cash and a book value of $7.6 million, substantial improvements over prior-year cash of $0.4M and a book value of $3.8 million. With our current cash position and expected cash receipts, we believe we have sufficient working capital to support our growth initiatives in 2026. In 2025, we solidified our foundation with a growing base of high-margin, recurring revenue and strong demand for BIO-key solutions that address pervasive cybersecurity vulnerabilities. Building on those accomplishments, we entered 2026 with strong momentum across several key markets. We expect top-line growth, combined with continued expense discipline, to drive us to profitability in 2026. This is an exciting time for BIO-key and our supportive, patient investors, as we feel the Company is in the strongest position ever to achieve improved operating results and create value for stockholders. Sincerely, Michael DePasquale Chairman & CEO July 24, 2026 Forward Looking Statements All statements in this Annual Report other than statements of historical facts are forward-looking statements which contain our current expectations of our future results. For additional information regarding forward forward-looking statements, please see the section captioned Private Securities Litigation Reform Act on page i of the Form 10-K included herein.
 • shareholder letter icon 7/24/2026 Letter Continued (Full PDF)
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 • Benford's Law Stocks icon BKYI Benford's Law Stock Score = 73


BKYI Shareholder/Stockholder Letter Transcript:



BIO-key International
Message from
Chairman & CEO
Michael W. DePasquale
Dear BIO-key Stockholders,
The BIO-key team has made significant progress across a range of fronts in 2025 and to date. Those efforts have
benefited our financial results so far in 2026 and put us on track to reach profitability in the next few quarters
and potentially for the full year. Importantly, in 2025 we completed the transition to selling only BIO-key branded
solutions in the EMEA region, after phasing out the in-licensed products that enabled us to build a solid
presence in these markets. Though this shift temporarily pressured license revenue, it puts us in an excellent
position to build a broader pipeline of EMEA partner and channel opportunities distributing BIO-key solutions
which generate materially better margins.
Based on expanding customer deployments and a broadening deal pipeline, we expect growth in software
license fees and overall revenues in 2026. We got off to a strong start with Q1   26 revenue growing 34% yearover-year and 74% sequentially to approximately $2.15M. Higher revenue, combined with cost management,
enabled us to deliver meaningful improvement to our bottom-line results as compared to prior periods. It is a
solid start to the year, which we expect to continue in future quarters and advance our goal of achieving
profitability.
Building Traction in Foreign Defense, Financial Enterprises, and International
We see particular strength with government, defense, and financial services customers outside the U.S. These
customers value the robust security, performance and cost benefits of BIO-key   s biometric solutions. This
interest is further supported by more favorable regulatory frameworks in key international jurisdictions and their
closer proximity to escalating geopolitical tensions.
In 2025, we launched our Defense & Intelligence Cybersecurity Initiative in anticipation of rising global defense
budgets, particularly across Europe and the Middle East. This initiative leverages our growing base of military
and defense customers, as well as our dedicated sales and support teams, to strengthen engagement with
prime contractors and end users in these regions.
In Q1   26, we secured $500,000 of follow-on orders from a foreign defense ministry that continues to build out
its deployment of our biometric user authentication solutions. This contributed to total military and defense
revenue exceeding $2.2 million over the last twelve months, including a significant new deployment with a
Middle East defense Sector organization in Q4   25. Given our solutions    proven effectiveness in mission-critical
environments, we see excellent growth prospects within government, security and defense verticals in coming
years.
Beyond defense, we are expanding our geographic footprint and customer reach through new international
distribution partnerships in India, Vietnam, the Middle East, and the Nordic region of Europe. These alliances
provide us with access to a broader set of enterprise customers.
The financial services sector remains an area of strength and focus. A long-standing foreign retail bank
customer recently executed a $1 million annual license renewal for the expanded use of our biometric identity
solution for their 30+ million clients. We also partnered with Run-Level to deliver our identity security via SIMO
for Mozambique   s national payments infrastructure, our 11th financial services customer, globally. In the U.S.,
we recently partnered with TD Synnex Public Sector (DLT) to bring our solutions to government agencies. These

agencies are working to comply with mandates for Zero trust infrastructure, including phish-resistant MFA. This
partnership provides public sector access and a streamlined procurement path for agencies and governmentrelated entities to implement BIO-key solutions. DLT   s parent, TD Synnex, is a leading technology solutions
provider with annual sales of over $60B.
Cost Management, Financial Strength, and Outlook
Parallel with our growth initiatives, we further enhanced operational efficiency in 2025, reducing total SG&A
expense by $768,000, or 11%, and total operating expenses by 7%. We were also able to strengthen our financial
position, as we ended the year with $2.7M in cash and a book value of $7.6 million, substantial improvements
over prior-year cash of $0.4M and a book value of $3.8 million. With our current cash position and expected
cash receipts, we believe we have sufficient working capital to support our growth initiatives in 2026.
In 2025, we solidified our foundation with a growing base of high-margin, recurring revenue and strong demand
for BIO-key solutions that address pervasive cybersecurity vulnerabilities. Building on those accomplishments,
we entered 2026 with strong momentum across several key markets. We expect top-line growth, combined with
continued expense discipline, to drive us to profitability in 2026.
This is an exciting time for BIO-key and our supportive, patient investors, as we feel the Company is in the
strongest position ever to achieve improved operating results and create value for stockholders.
Sincerely,
Michael DePasquale
Chairman & CEO
July 24, 2026
Forward Looking Statements
All statements in this Annual Report other than statements of historical facts are forward-looking statements which
contain our current expectations of our future results. For additional information regarding forward forward-looking
statements, please see the section captioned    Private Securities Litigation Reform Act    on page i of the Form 10-K
included herein.


shareholder letter icon 7/24/2026 Letter Continued (Full PDF)
 

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