BIO KEY INTERNATIONAL INC

Sector Progress:

BIO-key CEO, Mike DePasquale commented, “Our Q1’26 results reflect the benefit of our sales, marketing and customer development initiatives over the past several quarters, combined with globally expanding appreciation for the unparalleled value that biometric identity and access management solutions provide in securing mission critical applications and data.

“In addition to solid revenue growth – both from new and existing customers – we substantially improved our bottom-line performance reflecting a blended gross margin of 82.5% and our ongoing cost management discipline.

“Our Q1’26 results benefitted from an expanded license renewal with a large foreign bank, continued follow-on orders from an existing foreign defense customer, and a new strategic, multi-year agreement with Sociedade Interbancária de Moçambique (SIMO), the operator of Mozambique’s national electronic payments network.

“We continue to see strength with foreign government, defense and financial customers that increasingly recognize the mission critical security and value of our suite of biometrically enhanced authentication solutions. This traction is supported by foreign regulatory frameworks, as well as the growing incidence of international conflicts and political tension. In Q1’26, we secured approximately $450K in follow-on orders to support a foreign defense ministry that continues to expand its deployment of our biometric authentication solutions to additional personnel. Given the success of our solutions in such mission critical applications, we expect further traction with defense ministries and international security organizations in coming quarters and years.

“Banking and financial services is another area of strength for BIO-key. Our Q1’26 revenues benefited from the expanded scope of a one-year license renewal by a long-standing foreign retail bank customer that is utilizing our biometric identity solution for over 30M of its retail clients. And as I mentioned, Mozambique’s national payments network, SIMO, became our 11 th global financial services customer and we are seeing other significant opportunities with highly-regulated government and finance customers.

“To better penetrate large Federal, state and local government agency opportunities in the U.S., we have partnered with TD Synnex Public Sector (DLT) to bring our solutions to their public sector customers, many of whom face increasing mandates to adopt secure digital infrastructure and multi-factor authentication (MFA). By integrating BIO-key’s PortalGuard® IAM platform and Passkey:YOUTM biometric solutions into DLT’s offerings, their extensive portfolio of government agency customers can now easily deploy high-assurance identity security for digital access.

“We ended the quarter with a book value of $7.6M, or approximately $7.04 per share, including $2.2M in cash and we expect improvements in our cash position and book value resulting from our expected Q2’26 performance. As we announced a few days ago, our shares were recently suspended from Nasdaq. We are actively working to return our shares to the Nasdaq Capital Market, though we cannot be certain of the timing or success of these efforts. In the interim, our shares continue to trade on the OTC Markets under the symbol BKYI.

“Our business is off to a strong start in 2026, and we are excited about our outlook for Q2 and the remainder of the year. We believe BIO-key has never been better positioned for growth and improved financial performance.”