CEO: Michael DePasquale
WSA: Good day from Wall Street, this is Juan Costello, Senior Analyst with the Wall Street Analyzer. Joining us today is Mike DePasquale, the CEO for BIO-key International. The company trades on the OTCQB, ticker symbol is BKYI. Thanks for joining us today there Mike.
Mike DePasquale: Well, it’s good to be with you today.
WSA: Certainly. So, starting off please give us a history and overview of the company for some of our listeners that are new to the story?
Mike DePasquale: BIO-key is a leading provider of advanced biometric authentication solutions and technology. The company has been in business for well over 20 years. We have been very focused on providing advanced finger identification technologies for virtually every sector of the economy. BIO-key has customers in the Government space, retail and in healthcare. We’re very focused these days in the Identity and Access Management space in particular working with companies like Microsoft and our solutions are widely used by a number of marquee account names like NCR and McKesson and LexisNexis and the FBI. So we have been around for as I say over 20 years serving this industry and we’re at a point here where we’re seeing a significant inflection not only in the industry in general, but also in BIO-key’s business as well and I guess we’ll talk a little bit more about that going forward.
WSA: Certainly, so what are some of the drivers there behind the recently announced yearly results, which were particularly strong?
Mike DePasquale: You know our business grew approximately 35% year-over-year 2014 to 2015 and what’s really driving that is the need and requirement for not only better security, but more convenient security for both consumers and enterprise users alike. We’re plagued with a plethora of passwords that we all need to remember every day as consumers to enter everything from our social media accounts, to our bank accounts, to our healthcare accounts and enterprise users are plagued with not only utilizing passwords, PINs, token keys and cards; but the threat of cyber security attacks is having a dramatic impact on authentication and authentication technologies that are currently being used.
We can provide a more convenient and a more secure way for these users to access information and that’s what’s really driving the industry and driving our growth. Ever since Apple put a finger scanner on the iPhone and that happened just about two years ago, there are over a 150 to 200 million consumers in the United States that are using biometrics and really liking it. So, they don’t want to give that up. They don’t want to go back to having to remember 60 plus passwords that they may use during the course of the day. Business enterprise users don’t want to go back to less secure technologies, so they really like biometrics. It provides an easy, very secure way for them to ensure access to their accounts and also the physical infrastructures in buildings and facilities.
WSA: Certainly and so what are some of the factors that you feel make the company uniquely positioned to capitalize on some of those trends that you’re seeing?
Mike DePasquale: We’ve developed a platform, our solution set called WEB-key, which allows literally any application developer or application provider the ability to replace their current authentication scheme, which is mostly passwords, PINs, tokens and cards with finger biometric, so we make it easy for those developers to integrate those technologies and our second major competitive advantage is our interoperability. We work on the finger side with virtually every finger sensor that’s available in the market today and there are over 40 of them. So, we make that interoperable and easy for our application developers and providers to build solutions that consumers and enterprise users can use on a daily basis.
We’re starting to see fingerprint sensors embedded in virtually every device. Not only smart phones, including the iPhone and the Samsung Galaxy, but all of the tablets and smart phones that are being distributed around the globe. There are over a billion units today in place around the globe that have some form of biometric capability within them and that’s going to continue to grow and that’s really going to drive growth in this business, in this market and in this industry. Also recently Microsoft announced the introduction of Windows 10 native support for biometrics within the existing Windows 10 platform.
That allows any user to take one of our finger scanners or SideSwipe or EcoID or a SideTouch; that allows them to plug it into the USB port on their computer or tablet that’s running Windows and automatically replace the PIN that they use to access that device. They don’t need any special software, they don’t need any special downloads, all they have to do is plug the device in and Microsoft makes it very, very easy to replace your PIN or your password with the biometric.
Also with a Windows 10 anniversary update, which will be available shortly you’ll be able not only to access your device with the biometric using one of our finger scanners, but you would be able to access your web accounts and also your Office 2016 platform as well. So, what we’re seeing here is the mass adoption of this technology and the acceptance not only by consumers and enterprise users, but also big technology companies that recognize that passwords are no longer the way to secure access to information and again the infrastructures.
WSA: And so what are some of the key goals and milestones that you’re hoping to accomplish over the course of the next six to twelve months?
Mike DePasquale: Well, we grew our business about 35% year-over-year 2014 to 2015. Our goal and objective is to grow by that and more into 2016 as we’ve announced our guidance to be somewhere between seven and nine and a half million dollars. We expect number one to continue to grow and develop our business. We expect to be profitable and that is a very important milestone for us to be consistently profitable and we expect that our hardware offerings are SideSwipe and SideTouch and EcoID that will be more widely available through retail outlets like for example, Amazon and Alibaba in the coming months. So, we expect that to have a dramatic impact on the growth of our business and we expect that to continue not only through 2016, but well into 2017 and ’18 and beyond. We also expect that our relationship with the likes of Microsoft and many of our other marquee customers are going to continue to grow and develop and that’s going to create new and interesting opportunities for us as well.
WSA: Sure and perhaps you can walk us through your background experience Mike and talk a little bit about key management there?
Mike DePasquale: Yeah I’ve been engaged in technology for well over 30 years. I started my career with Digital Equipment Corporation, I spent 17 years there and then through a host of smaller opportunities I ran businesses, sold or merged them for different investors. I came to BIO-key in 2003 and I’ve been at the helm here for the last 12 years. We built a very strong management team here; we’ve got a CTO in place who has been with our business for 14 years. He is probably one of the renowned experts in the biometric space who runs our technology operations. We’ve got a very strong sales and marketing infrastructure that we’ve built over the last few years and our Senior Vice President of Sales, Jim Sullivan is certainly renowned as one of the experts in this industry and business on a global basis. So we’ve a very, very strong team and we’ve been hiring resources and continuing to fill out and develop our infrastructure and our organization will continue to do that through 2016 and ’17 and beyond.
WSA: Certainly and so as far as investors and the financial community what are some of the key drivers that you wish perhaps they better understood about BIO-key?
Mike DePasquale: Well investors,those who have been following us, and maybe those who are not following us, should be cognizant of two or three things. First, as many would know we took a very significant investment on at the latter part of last year. Our partner who actually manufactures our hardware devices made a $20 million investment in the company and we licensed some software from them. They’re based in China and they will provide us access to the Asian market, so a very significant opportunity for us that we had not had before this. The second thing is that we will have access to the payments market in China where we’ll be launching some solution sets and software over the next few months that will integrate some of the licenses, software that we licensed as part of this transaction latter part of the year.
What they also should understand is that this is an industry that has a tremendous growth potential and opportunity. Biometrics has been around for a long time, they’ve been used in the forensic space in law enforcement for quite some time as maybe 34 years; but what we see here is that the big leap in the commercial space is that virtually anyone who is using a password today will not be using a password two or three years from now. Those passwords are going to be replaced with technologies; most likely biometrics, most likely finger biometrics and we are very well positioned with our mature platform and our hardware offerings to take advantage of that opportunity going forward.
WSA: Well, great and so once again joining us today is Mike DePasquale, the CEO for BIO-key International. The company trades on the OTCQB, ticker symbol is BKYI, currently trading at 17 cents a share and market cap is about $11 million. Before we conclude here to recap some of your key points Mike, why do you believe investors should consider the company as a good investment opportunity today?
Mike DePasquale: Well I think our industry is poised for a very significant growth. I believe our company and our technologies, our management teams, our product offerings, and our customer reference base are solid and provide a very good launching pad for us to not only grow, continue to grow our business, but to grow it at an advanced pace in a significant rate. So at this stage we certainly are a company within this industry that everyone should be aware of and should be considering.
Juan Costello: Well, we certainly look forward to continue to track the company’s growth and report on your upcoming progress and we would like to thank you for taking the time to join us today Mike and update our investor audience on BKYI. It’s always great having you on.
Mike DePasquale: Great, thank you Juan. It was good to be with you today.