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Item 1. Business

2024-06-05 compared with 2023-06-01 · 104 added, 127 removed, 132 unchanged (64% of the section changed)

Solely for convenience, trademarks and tradenames referred to in this Annual Report on Form 10-K appear (after the first usage) without the ®

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.

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.

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, or 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 identification based available at any end point device, making the user their own credential, not their phone or a token.

Our customers trust BIO-key®

to secure access to a variety of cloud, mobile and web applications, on-premise and cloud-based hypervisor servers from all of their devices.

Employees and contractors sign into BIO-key PortalGuard to seamlessly and securely access the applications needed to do their work, and customers sign into BIO-key PortalGuard to access online services. 

Organizations use PortalGuard to securely collaborate and communicate with their partners and to provide their customers with flexible, resilient user experiences online and while using mobile devices. 

(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 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.

Our customers trust BIO-key® to secure access to a variety of cloud, mobile and web applications, on-premise and cloud-based hypervisor servers from all of their devices.

PortalGuard can operate standalone as a comprehensive MFA, Single Sign On, and Self-Service Password Reset solution, directly authenticating for Windows sign in and application access, or as an upgraded MFA user experience within an enterprise IAM framework such as Microsoft, Okta, Ping or ForgeRock.

BIO-key’s WEB-key is a scalable biometric service management platform, incorporating key functions for regulatory compliance, enrollment, authentication or identification, and integrity in a multi-tenant private or public cloud delivery platform. 

Government agencies use BIO-key for their large-scale civil ID projects, because WEB-key underpins a biometric identity ecosystem, is cloud-ready, and provides a scalable, high-integrity trust platform which can be operated anywhere and supports over 30 fingerprint scanners interchangeably.

We also deliver biometric software integration application programming interfaces, or APIs, allowing software developers to leverage our platform to securely and efficiently embed biometric multi-factor authentication, or MFA, into their own products. 

This allows software developers to focus on their core functionality while BIO-key ensures users enter the application without requiring them to carry their phone or any token.

Even the most security-focused organizations are suffering breaches as a result of human error or improper conduct.

As enterprises scale the number of software as a service, or SaaS applications, and multi-cloud services they rely on and the interconnections between them increase, assured identity has emerged as a critical component of an organization’s security framework, directly affecting each triad of cybersecurity –

confidentiality, integrity, and availability. 

As access perimeters dissolve, organizations must evolve from network-based security models to Zero Trust and Continuous Authentication and Risk Trust Assessment (CARTA) security models, focusing on adaptive and context-aware controls. 

True server-secured biometric verification removes the human nature vulnerability at the root of many security compromises creating a more reliable means to manage user access and protect digital assets against rogue users willing to hand over their credentials to a proxy. 

Our global identity as a service, or IDaaS, hosting capability allows our customers to simplify and efficiently scale their security infrastructures across internal IT systems and external customer facing applications without installation overhead, security or uptime management efforts.

We designed BIO-key PortalGuard IDaaS and WEB-key to provide organizations an integrated approach to managing and securing all of their identities using the technologies they already use while providing capacity for future needs through the strategic use of biometrics to limit vulnerability and contain authentication costs. 

Our platform allows users to authenticate their customers, employees, contractors, and partners.

It enables any user to connect to any device, cloud or application, all with a simple, customizable, intuitive and consumer-friendly user experience. 

We utilize server-secured Identity-Bound Biometrics to support roving users without requiring them to carry their phone or a token.

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First incorporated as BBG Engineering, the company was renamed SAC Technologies in 1994 and renamed BIO-key International, Inc.

Our principal executive office is located at 3349 Highway 138, Building A, Suite E, Wall, New Jersey 07719. 

BIO-key was a pioneer in developing automated finger identification technology that supplements or compliments other methods of identification and verification, such as personal inspection identification, passwords, tokens, smart cards, ID cards, credit card, passports, driver’s licenses, or other form of possession or knowledge-based credentialing.

Our principal executive office is located at 101 Crawfords Corner Road, Suite 4116, Holmdel, NJ, 07733.

Our advanced technology and is used to improve both the accuracy and speed of fingerprint biometrics in some of the largest biometric systems in the world.

On June 30, 2020, we enhanced our product offering by acquiring PistolStar, Inc.

(“PistolStar”). 

PistolStar provides enterprise-ready identity access management solutions to commercial, government and education customers throughout the United States and internationally. 

PistolStar develops and markets our PortalGuard line of software and services.  

On March 8, 2022, we expanded our sales and support operation into Europe, Africa and the Middle East (“EMEA”) by acquiring Swivel Secure Europe, SA.

Swivel Secure Europe is a Madrid, Spain based provider of IAM solutions serving over 300 customers through a network of dozens of channel partners throughout EMEA.

Swivel Secure Europe is the exclusive distributer of AuthControl®

Sentry, AuthControl Enterprise and AuthControl MSP product line in Europe, Middle East, and Africa, excluding the United Kingdom.

(“PistolStar”).

PistolStar provides enterprise-ready identity access management solutions to commercial, government and education customers throughout the United States and internationally.

PistolStar develops and markets our PortalGuard line of software and services.

On March 8, 2022, we expanded our sales and support operation into Europe, Africa and the Middle East (“EMEA”) by acquiring Swivel Secure Europe, SA.

Swivel Secure Europe is a Madrid, Spain based provider of IAM solutions serving over 300 customers through a network of dozens of channel partners throughout EMEA.

Swivel Secure Europe is the exclusive distributer of AuthControl® Sentry, AuthControl Enterprise and AuthControl MSP product line in Europe, Middle East, and Africa, excluding the United Kingdom.

Swivel Secure maintains a direct sales force with offices in Madrid, Spain and Lisbon, Portugal.

BIO-key PortalGuard and PortalGuard IDaaS

BIO-key PortalGuard is an independent, customer-controlled and neutral-by-design cloud-based identity platform that allows our customers to integrate with any cloud or on-premise SaaS application, service or cloud host, as well as Windows device authentication through a single secure, reliable and scalable IAM platform. 

It provides identical capabilities in both a SaaS (PortalGuard IDaaS) or on-premise (PortalGuard) delivery model.

PortalGuard integrates BIO-key’s Identity Bound Biometric (IBB) authentication as what-you-are authentication options that are not tied to a device or “what you have”

authentication, allowing our customers to positively identify who is accessing their systems, not the device they might have handed off to another user.  

PortalGuard integrates BIO-key’s Identity Bound Biometric (IBB) authentication as what-you-are authentication options that are not tied to a device or “what you have” authentication, allowing our customers to positively identify who is accessing their systems, not the device they might have handed off to another user.

Our three-way IAM neutrality consists of:

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open user directory choices including on premise, hybrid or full-Azure Active Directory, LDAP, IBM Domino, or custom SQL user directory;

and  

multiple single sign on, or SSO, federation options, including SAML, Open ID Connect (OIDC), OAUTH, CAS and WS-Fed.

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PortalGuard IDaaS provides more and secure experiences for their customers and end users, which enables our customers to future-proof their environments.

PortalGuard IDaaS can be used as the central system for an organization’s connectivity, access, authentication and identity lifecycle management needs across all of its users, technology and applications.

We enable our customers to easily deploy, manage and secure applications and devices, and offer provisioning services using open source tools.

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and (ii) manage and secure the identities of users of their web properties, which we call customer identity.

BIO-key PortalGuard and PortalGuard IDaaS for Workforce Identity . 

PortalGuard streamlines the way an organization’s employees, contractors and supply chain partners connect to its applications and data from any device, while increasing user efficiency, preventing unauthorized delegation, credential sharing, and keeping digital environments secure through our MFA capabilities.

We enable organizations to provide their workforces with immediate and secure access to every application from any device they use, without maintaining multiple credentials. 

Our multi-directory support interfaces with the directories in place at an organization, while allowing SQL-based custom directories where none presently exist. 

BIO-key PortalGuard Desktop allows customers to extend the BIO-key PortalGuard IDaaS to their existing on-premises and remote workstation Windows sign in.  

BIO-key PortalGuard and PortalGuard IDaaS for Customer Identity . 

BIO-key PortalGuard allows organizations to secure access to their online properties, while upgrading their customers’

user experience by delivering self-enrollment and management for customer-facing cloud, mobile or web applications.

We enable an organization’s product team to layer BIO-key’s MFA, SSO and self-service password reset, or SSPR, functionality into their cloud, web and mobile applications through federation standards or using our APIs. 

BIO-key PortalGuard and PortalGuard IDaaS for Workforce Identity .

We enable organizations to provide their workforces with immediate and secure access to every application from any device they use, without maintaining multiple credentials.

Our multi-directory support interfaces with the directories in place at an organization, while allowing SQL-based custom directories where none presently exist.

BIO-key PortalGuard Desktop allows customers to extend the BIO-key PortalGuard IDaaS to their existing on-premises and remote workstation Windows sign in.

BIO-key PortalGuard and PortalGuard IDaaS for Customer Identity .

BIO-key PortalGuard allows organizations to secure access to their online properties, while upgrading their customers’ user experience by delivering self-enrollment and management for customer-facing cloud, mobile or web applications.

Our customers are able to centrally manage policies, audit and log access across their properties, leading to more seamless customer experiences.

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We have developed what we believe is the most discriminating and effective commercially available finger-based biometric technology.

This technology is embedded in our PortalGuard product for enterprise security, providing customers with a unique capability to authenticate users without a phone or token, where appropriate, such as manufacturing, retail, call centers, and health care workers. 

Other markets for scalable biometric engines include government markets, large scale identity projects such as voter’s registration, driver’s license, national ID programs, and SIM card registration.

We also offer a full line of easy to use finger scanners for both enterprise and consumer markets. 

Our PIV Pro, SidePass®, EcoID II®

and SideSwipes®

finger readers can be used on any laptop, tablet or other device which contains a USB A or C port.

 We market and sell these fingerprint scanners through distributors and directly to end users via Amazon.

We also offer a full line of easy to use finger scanners for both enterprise and consumer markets.

Our PIV Pro, SidePass®, EcoID II® and SideSwipes® finger readers can be used on any laptop, tablet or other device which contains a USB A or C port.

We market and sell these fingerprint scanners through distributors and directly to end users via Amazon.

AuthControl Sentry;

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AuthControl MSP

Swivel Secure is the exclusive distributer of AuthControl Sentry, AuthControl Enterprise, and AuthControl MSP product line in Europe, Africa and the Middle East, or EMEA, excluding the United Kingdom and Ireland. 

These solutions include a patented one-time-code extraction technology, helping enterprises manage the increasing data security risks posed by cloud services and bring your own device policies.

Fingerprint Readers

Our series of compact fingerprint readers, we from both commercial companies use SidePass®, SideSwipe®

or EcoID II®

to replace their Windows passwords and enable Windows Hello for Business without replacing or upgrading laptops or tablets.

Our series of compact fingerprint readers, we find commercial companies use SidePass®, SideSwipe® or EcoID II® to replace their Windows passwords and enable Windows Hello for Business without replacing or upgrading laptops or tablets.

Identity and Access Management, User Multi-Factor Authentication, Single Sign On, Privilege Entitlement and Access Control

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Both commercial enterprises and the public sector have seen a shift in the requirement for stronger authentication, and the FBI, NIST and industry thought leaders such as SalesForce and Microsoft have encouraged entities to enhance their security posture by implementing stronger 2-factor authentication (2FA) or MFA.

We believe the market for advanced user MFA, including fingerprint biometrics, extends to nearly every industry segment and the market opportunity for our products is massive, global and growing. 

Historically, our largest market has been identity and access management for highly regulated industries like government and healthcare.

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Large scale identification projects, especially in Africa and the surrounding regions.

Government funded initiatives, including the state board of elections.

International law enforcement use case applications as prospects see us as a global leader in the biometric technology space as witnessed by our agreement with the Israeli Defense Force, and the Singapore and Dubai Police departments.

Consumer mobile credentialing, including mobile payments, credit and payment card programs, data and application access, and commercial loyalty programs. 

Government funded initiatives, including the state board of elections.

International law enforcement applications where we are viewed as a global leader in the biometric technology and serve customers such as the Israeli Defense Force and the Singapore Police departments.

Consumer mobile credentialing, including mobile payments, credit and payment card programs, data and application access, and commercial loyalty programs.

Demand for BIO-key hardware products from Windows Hello for Business users and Fortune 2000 companies.

Government services and highly regulated industries including, Medicare, Medicaid, Social Security, drivers' licenses, campus and school ID, passports/visas.

Government services and highly regulated industries including, Medicare, Medicaid, Social Security, drivers' licenses, campus and school ID, passports/visas.

Remote authentication challenges, including those created by the remote work shift resulting from the pandemic.

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Our business model is focused on the following key areas:

Enterprise needs are not being met by mainstream MFA’s phone app or token approach.

Supply chain breaches, ransomware attacks, and administrative access compromises highlight the shortcomings of mainstream MFA and security approaches, which leave far too much responsibility on end-users to comply with cyber-hygiene policies. BIO-key’s biometric authentication process prevents human error and human nature from undermining secure authentication, while making the end user’s access easier than ever. The current climate of broad enterprise adoption of MFA to replace passwords presents opportunities for us to leverage our unique differentiators and exploit the gaps in existing IAM technology approaches. One of those gaps is the challenge of authenticating users that “rove” among workstations.

Enterprise needs are not being met by mainstream MFA’s phone app or token approach.

BIO-key’s biometric authentication process prevents human error and human nature from undermining secure authentication, while making the end user’s access easier than ever.

The current climate of broad enterprise adoption of MFA to replace passwords presents opportunities for us to leverage our unique differentiators and exploit the gaps in existing IAM technology approaches.

One of those gaps is the challenge of authenticating users that “rove” among workstations.

A second gap is preventing unauthorized account sharing and delegation.

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As OEM customers embed our solutions within their products, the customer benefits from the enhanced security and workflow, and frees them from investing in R&D to manage an IAM infrastructure of their own.

OEM customers’ ordering patterns are more predictable and OEM customers generally require lower service and support resourcing.

OEM customers’ ordering patterns are more predictable and OEM customers generally require lower service and support resourcing.

Government ID projects and healthcare organizations, including hospitals, clinics, and small private practices present a strong opportunity for us.

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In 2023, we continued to grow our Channel Alliance Partner program (CAP) focused on partnering with select value added resellers, integrators, and distributors.

We partner with leading application, managed service and infrastructure vendors, such as Intelisys, Insight, NGEN, Amazon Web Services, Pathify (formerly UCROO Campus), Software House International (SHI), Virtual Graffiti, Atlassian, and ProCirrus. 

We are a Microsoft Partner and our line of compact fingerprint scanners has been tested and qualified by Microsoft to support Windows Hello and Windows Hello for Business. 

Hardware products generated 9% of our revenue in 2022.

EcoID II® has emerged as our most popular scanner for enterprise deployments.

We are a Microsoft Partner and our line of compact fingerprint scanners has been tested and qualified by Microsoft to support Windows Hello and Windows Hello for Business.

Hardware products generated 15% and 9% of our revenue in 2023 and 2022, respectively.

EcoID II® has emerged as our most popular scanner for enterprise deployments.

For customers that require the highest level of security, PIV-Pro is a FIPS compliant fingerprint scanner, suitable for highly regulated industries and organizations that want a best-in-class solution.

We have grown our business through a combination of organic growth and the strategic acquisitions of PistolStar and Swivel Secure Europe.

We expect to continue to pursue strategic acquisitions of select businesses and assets in the IAM space. 

In furtherance of this strategy, we are active in the industry and regularly evaluate businesses that we believe will either provide an entry into new market verticals or be synergistic with our existing operations and in either case, be accretive to earnings. 

We cannot provide any assurance as to whether we will be able to complete any acquisition and if completed, successfully integrate any business we acquire into our operations. Please see the section captioned “

RISK FACTORS ”

for additional information regarding acquisition risks.

We expect to continue to pursue strategic acquisitions of select businesses and assets in the IAM space.

We cannot provide any assurance as to whether we will be able to complete any acquisition and if completed, successfully integrate any business we acquire into our operations.

Please see the section captioned “ RISK FACTORS ” for additional information regarding acquisition risks.

Marketing and Distribution

We sell our products directly through our field and inside sales teams, as well as indirectly through our network of channel partners.

Through our Channel Alliance Program, we have partnered with more than 40 resellers, system integrators and other distribution partners. 

Through our Channel Alliance Program, we have partnered with more than 85 resellers, system integrators and other distribution partners.

We are committed to continue to aggressively grow this program in 2024.

We partner with leading application, managed service and infrastructure vendors, such as Intelisyss, Insight, NGEN, Amazon Web Services, Pathify (formerly UCROO Campus), Software House International (SHI), Virtual Graffiti, Atlassian, and ProCirrus.

We offer our software under a SaaS term license and generate annual recurring revenue (ARR) primarily by selling multi-year subscriptions to our software.

We employ a customer success team, focused on customer satisfaction and early remediation. 

Intellectual Property Rights

We develop and own significant intellectual property and believe that our intellectual property is fundamental to our biometric and IAM product operation: We own patented technologies and trade secrets developed or acquired by us.

We develop and own significant intellectual property and believe that our intellectual property is fundamental to our biometric and IAM product operation:

We own patented technologies and trade secrets developed or acquired by us.

On December 26, 2006, we were issued US patent No.

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On November 18, 2008, we were issued US patent No.

7,454,624 for our “Match Template Protection within a Biometric Security System”

7,454,624 for our “Match Template Protection within a Biometric Security System” method.

The solution protected under this patent limits the scope of enrollment templates usage and also eliminates the need for revocation or encryption processes, which can be expensive and time consuming.

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On March 10, 2009, we were issued US patent No.

7,502,938 for our “Trusted Biometric Device”

which covers a simple, yet secure method of protecting a user’s biometric information.

It covers the transmission of information from the point the information is collected at the biometric reader until the data reaches the computer or device that is authenticating the user’s identity.

7,502,938 for our “Trusted Biometric Device” which covers a simple, yet secure method of protecting a user’s biometric information.

With the payment of all maintenance fees, this patent will expire on October 25, 2025.

On November 8, 2011, we were issued US Patent No.

8,055,027 for our “Generation of Directional Information in the Context of Image Processing”

method for image enhancement and processing.

8,055,027 for our “Generation of Directional Information in the Context of Image Processing” method for image enhancement and processing.

With the payment of all maintenance fees, this patent will expire on October 10, 2027.

On June 5, 2012, PistolStar was issued US Patent No.

8,196,193 for “Method For Retrofitting Password Enabled Computer Software with a Redirectional User Authentication Method”, where a device, method, and system may be used to integrate and control authentication and passwords among various applications and platforms.

With the payment of all maintenance fees, this patent will expire on November 1, 2030. 

On July 3, 2012, we were issued US Patent No.

8,214,652 for our “Biometric Identification Network Security”, an expanded method of network and related network authentication security systems utilizing hardware-based support for encryption and key management for authentication purposes.

With the payment of all maintenance fees, this patent will expire on April 24, 2024.

With the payment of all maintenance fees, this patent will expire on November 1, 2030.

On March 12, 2013, PistolStar was issued US Patent No.

8,397,077 for “Client Side Authentication Redirection”, where user specific attributes may be accessed and used to produce a generated password, using an algorithm and the user attributes.

With the payment of all maintenance fees, this patent will expire on August 7, 2030.

On May 3, 2017, we were issued US Patent No.

9,646,146 for our “Utilization of Biometric Data”, a method enables existing small area sensors to capture substantially more fingerprint surface area, leading to a higher degree of accuracy when performing a match.

With the payment of all maintenance fees, this patent will expire on March 6, 2035.   

On June 19, 2018, we were issued U.S.

10,002,244 for our “Utilization of Biometric Data”

to allow continuous, passive user authentication on a mobile device.

10,002,244 for our “Utilization of Biometric Data” to allow continuous, passive user authentication on a mobile device.

With the payment of all maintenance fees, this patent will expire on March 6, 2035.

On July 27, 2018, we were issued U.S.

10,025,831 for “Adaptive Short Lists and Acceleration of Biometric Database Search”, a method to quickly and iteratively search a database of biometric data.

With the payment of all maintenance fees, this patent will expire on August 10, 2036.

On September 3, 2019, we were issued U.S.

10,400,481 for “Fingerprint Lock”, a lock design method of the shackle and spring integration to electronics.

With the payment of all maintenance fees, this patent will expire on June 27, 2037.

On September 10, 2019, we were issued U.S Patent No.

10,410,040 for “Fingerprint Lock Control method and Fingerprint Lock System”, a lock design method of the control process of scanning, and server communications for user profile management.

With the payment of all maintenance fees, this patent will expire on July 26, 2037.

On April 20, 2021, we were issued U.S.

10,984,085 for “Biometric Recognition for Uncontrolled Acquisition Environments”, expected to be deployed in mobile devices, the patent provides a method of continuous capture of the users biometric data before the need of the authentication or enrollment, as well as during an active session with a user, to assure the user has not changed. With the payment of all maintenance fees, this patent will expire on March 13, 2039.

With the payment of all maintenance fees, this patent will expire on March 13, 2039.

We have also been granted parallel patents to the US Patent portfolio to certain of our patents in many foreign countries offering protection of our intellectual property rights around the world.

We have registered our trademarks “BIO-key”, “True User Identification”, “Intelligent Image Indexing”, “WEB-key”, “SideSwipe”, “SidePass”, “EcoID”, “PistolStar®”, “PortalGuard”, “MobileAuth”, “PASSIVEKEY®”

and “PISTOLSTAR®”.

with the U.S.

Patent & Trademark Office, as well as many foreign countries, protecting the names of our companies and our key technology offerings.

We also own the following unregistered trademarks:

“PortalGuard Nebula™”, “Password Power™”

and “Scooch™”.

“PortalGuard Nebula™”, “Password Power™” and “Scooch™”.

Copyrights and trade secrets

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Research and Development

Our PortalGuard IAM product line is mature, with hundreds of active customers, and we are adding additional factors and capabilities to the product, as well as enhancing the self-management for the functionally equivalent PortalGuard IDaaS offering. A significant new authentication factor set will come via our MobileAuth application for users to experience multiple biometric secure authentication via their mobile phone devices.

A significant new authentication factor set will come via our MobileAuth application for users to experience multiple biometric secure authentication via their mobile phone devices.

Our VST and WEB-key biometric platforms are mature, stable, and widely-deployed.

We concentrate our research and development efforts on enhancing the functionality, reliability and integration of our current products as well as acquiring and developing new and innovative products and solutions for providing broader access to the BIO-key user experience. 

Although we believe that our identification technology is one of the most advanced and discriminating fingerprint technologies available today, the markets in which we compete are characterized by rapid technological change and evolving standards and use-cases.

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These products are critical to support the anticipated growth in enterprise IAM.

The IAM, MFA and SSO market is characterized by multiple solution providers of solutions in either standalone or IAM suite delivery models. We believe that our unique differentiator in this market is the incorporation of an unparalleled server-secured biometric authentication capability among our 17 authentication factors. There are numerous companies involved in the development, manufacturing and marketing of fingerprint biometrics products to commercial, government, law enforcement and prison markets.

The IAM, MFA and SSO market is characterized by multiple solution providers of solutions in either standalone or IAM suite delivery models.

We believe that our unique differentiator in this market is the incorporation of an unparalleled server-secured biometric authentication capability among our seventeen authentication factors.

There are numerous companies involved in the development, manufacturing and marketing of fingerprint biometrics products to commercial, government, law enforcement and prison markets.

These companies include, but are not limited to, IDEMIA, Thales, NEC, Neurotechnology, and Innovatrics.

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After attempting to create a more sophisticated password, or more efficient token or PIN, it has become apparent that each of these methods are easily compromised, and the downside risks are significant.

We have also seen FIDO-compliant keys enter the market, led by Yubico’s YubiKey, a hardware token device that acts as a credential for access. 

FIDO officially recommends enterprises purchase two or more keys for every user, to prevent lockout in the event of a lost or misplaced FIDO token. 

We have also seen FIDO-compliant keys enter the market, led by Yubico’s YubiKey, a hardware token device that acts as a credential for access.

FIDO officially recommends enterprises purchase two or more keys for every user, to prevent lockout in the event of a lost or misplaced FIDO token.

These hardware tokens alone do not meet the needs of large organizations for which key sharing and lost keys are concerns, establishing the opportunity for our Identity Bound Biometric differentiation.

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With respect to competing biometrics technologies, each has its strengths and weaknesses and none has emerged as a market leader:

Fingerprint identification  is generally viewed as very accurate, inexpensive and non-intrusive and is the dominant biometric in use today and will be for the foreseeable future;

Palm Vein  

scanning  is expensive, technique-sensitive, and offers mobility challenges;

Iris scanning  is viewed as accurate, but the hardware is significantly more expensive;

Facial recognition  can have privacy concerns with work-from-home use, and is typically highly dependent on ambient lighting conditions, angle of view, and other factors.

Fingerprint identification is generally viewed as very accurate, inexpensive and non-intrusive and is the dominant biometric in use today and will be for the foreseeable future;

Palm Vein scanning is expensive, technique-sensitive, and offers mobility challenges;

Iris scanning is viewed as accurate, but the hardware is significantly more expensive;

Facial recognition can have privacy concerns with work-from-home use, and is typically highly dependent on ambient lighting conditions, angle of view, and other factors.

Government Regulations

Various state, federal and EU privacy laws govern the collection, storage, use and any sale of biometric-related data. 

To the extent that BIO-key’s IDaaS offerings include the collection and storage of customer users’

personal or biometric data, we operate as a processor of such data. 

Our WEB-key platform includes compliance features to ensure automated compliance with these laws including collection of informed written consent during enrollment workflows and robust auditing to control and report on the retention of biometric data and removal requests. 

Various state, federal and EU privacy laws govern the collection, storage, use and any sale of biometric-related data.

To the extent that BIO-key’s IDaaS offerings include the collection and storage of customer users’ personal or biometric data, we operate as a processor of such data.

Additionally, our customers have access to these tools to maintain their own compliance, including deletion of user data when business relationships terminate.

We believe in biometric privacy rights, and that both users and their organizations benefit from a responsibly operated biometric identity infrastructure. 

We actively participate in industry privacy workgroups as recognized biometric subject matter experts in order to influence and keep abreast of any proposed changes to these regulations.

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Human Capital Resources

As of the date of this report, we employed fifty-two individuals consisting of fifty-one individuals on a full-time basis as follows:

(i) twenty in engineering, customer support, and research and development;

(ii) nine in finance and administration;

and (iii) twenty-two in sales and marketing.

We also have two part time employees, one who provides engineering services, and one who provides administrative services, and two factory contractors in China.

As of the date of this report, we have forty-two employees consisting of forty-three individuals on a full-time basis and one part-time employee as follows:

(i) nineteen in engineering, customer support, and research and development;

(ii) ten in finance and administration;

and (iii) thirteen in sales and marketing.

We also have two factory contractors in China.

None of our employees are represented by a labor union and we believe that our relationship with our employees is good.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business