Bio-Key International Inc (BKYI), a fingerprint identification biometric technology and software solutions provider, has announced financial progress in Q1 2023, reporting a reduced net loss compared to Q1 2022. According to their recent SEC report, the company’s net loss was $288,322 in Q1 2023, compared to a net loss of $999,403 in Q1 2022. The technology provider has also made notable strides in its revenue streams, witnessing a surge in total revenues from $1,941,171 in Q1 2022 to $3,083,767 in Q1 2023.
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Much of the impetus behind the gains in total revenues came from license fees, which significantly increased from $1,460,183 in Q1 2022 to $2,478,556 in Q1 2023. While hardware sales also recorded an increase from $85,184 to $72,689, service revenue witnessed a growth from $395,804 to $532,522 during the same period. Geographically, the majority of revenue in Q1 2023 came from Europe, Middle East, and South America, contributing a combined total of $1,733,681.
Despite their advances, Bio-Key International Inc. still reported substantial net losses and negative cash flows from operations in recent years. As of March 31, 2023, the company does not have enough cash for a full year of operations, raising questions about its ability to continue functioning as a going concern. Consequently, Bio-Key International has opted to lower its expenses by cutting spending on marketing and research and development.
The company has also purchased inventory for projects in Nigeria, which have experienced delays in deployment. In response, Bio-Key has been exploring other markets and opportunities to sell or return the product to generate additional cash. For now, the company is still relying on debt and equity financing to fund its operations.
Accounts Receivable and Inventory Management
The recent report showed an increase in accounts receivable, which climbed from $1,522,784 at the end of 2022 to $3,362,203 in Q1 2023. Bio-Key has been diligently managing its inventory, with finished goods increasing slightly from $4,764,643 to $4,758,089, and fabricated assemblies remaining constant at $69,726. The $400,000 inventory reserve, which covers slow-moving items purchased for projects in Nigeria, remains unchanged.
Operating Lease Liabilities
Despite financial challenges, Bio-Key has also managed to lower its operating lease liabilities, which stood at $197,494 in December 2022 and fell to $129,950 in Q1 2023. The reprieve partly stems from a reduced cash payment for operating lease liabilities, which decreased from $65,108 in Q1 2022 to $69,821 in Q1 2023.
Overall, Bio-Key International Inc. has seen positive advancements in its financial performance in Q1 2023, reducing net losses and increasing revenues compared to the same period in 2022. Despite the promising results, the company is still grappling with financial constraints and a reliance on debt and equity financing, adding to concerns around its future operational sustainability.
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