fingerprint biometric software provider, bio-key international bkyi - investor presentation

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BIO-key International Inc. OTCQB: BKYI Technology Leader in Fingerprint Biometric ID Solutions Investor Introduction Jay Meier, VP Corporate Development June 1, 2015

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BIO-key International Inc. OTCQB: BKYI

Technology Leader in Fingerprint Biometric ID Solutions

Investor Introduction

Jay  Meier,  VP  Corporate  Development  June  1,  2015  

Safe  Harbor  Language:  Certain statements contained in this presentation are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 (the “Act”). The words “estimate,” “project,” “intends,” “expects,” “anticipates,” “believes” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are made based on management's beliefs, as well as assumptions made by, and information currently available to, management pursuant to the “safe-harbor” provisions of the Act. These statements are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of these statements. These risks and uncertainties include, without limitation, our history of losses and limited revenue, our ability to develop new products and evolve existing ones, wider market acceptance of biometric technologies, our ability to raise additional financing, and our ability to attract and retain key personnel. For a more complete description of these and other risk factors that may affect the future performance of BIO-key International, Inc., see “Risk Factors” in the Company’s Annual Report on Form 10-K and its other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this presentation. BIO-key undertakes no obligation to update nor to disclose any revision to these forward-looking statements whether to reflect events or circumstances after the date hereof or otherwise.

     

Technology  leader  in  finger-­‐based  biometric  iden5fica5on  solu5ons      Core  Technology  •  VST  TM  Algorithm-­‐  Reading/Matching  Fingerprint  Data  •  WEB-­‐key  Cloud-­‐  Transport  Fingerprint  Data    Customers  •  FBI,  LexisNexis,  Cleveland  Clinic    Partners  •  IBM,  Oracle,  CA,  Allscripts,  Epic    Strong  I.P.  Por<olio  •  10  Patents  and  Several  Pending  

     

Market  Need  For  Biometrics  

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“76%  of  all  data  breaches  were  enabled  by  weak  credenYaling    and  user  authenYcaYon”  (Verizon  Report  (2/2015)    

Electronic  healthcare  records  fetch  up  to  $60-­‐$70  in  the  black  market  compared  to  $.50  -­‐  $1.00  for  a  Social  Security  number.  (Rick  Kam  cofounder  of  ID  Experts)    Cyber  a`ack  affected  personal  records  of  80  Million  Anthem  Blue  Cross  customers  

Major  telecom  company  conducts  1.2  B  customer  authenYcaYons  per  month  and  370,000  employees  from  mulYple  devices    Numerous  access  points  to  sensi5ve  data  require  secure  user  authen5ca5on  solu5ons.      

Goode’s new report, entitled “Mobile Biometric Security – Market Forecast Report 2013 – 2018” posits that along with Touch ID, the creation of a strong supporting ecosystem for biometrics on consumer mobile devices will see an estimated 3.4 billion users leveraging mobile biometrics by 2018. To accompany this increased adoption, mobile implementations are expected to generate nearly $8.3 billion worth of revenue for the biometrics industry. Goode’s report predicts that fingerprint sensors will become a standard feature in most high-end smart phones and tablets by 2015, with the technology expected to be commonplace in all mobile devices by 2018.

Large and Growing Market Opportunity

Commercial  Biometrics  Is  Gaining  TracYon   Apple Is Considering Storing Your Fingerprints In iCloud Business Insider-Jan 15, 2015 Simply put, this means Apple is considering using its cloud hosting service iCloud ... Touch ID is the name of Apple's biometric verification tool.

The fingerprint sensor on Samsung's new Galaxy S6 is just as good ... Business Insider-Apr 2, 2015 Until now, the iPhone had a key hardware advantage over other smartphones: Its fingerprint sensor called TouchID was better and more ...

NEC combines biometrics with the Internet of Things Planet Biometrics-April 8, 2015 Our exhibit at Hannover Messe demonstrates the power of NEC's biometrics technologies combined with cloud-based services that can be ...

Windows 10 puts biometric security front and center InfoWorld-Mar 25, 2015 Windows 10 will provide a leap in biometric capabilities for the PC, built ... Windows Hello will require specialized hardware, so you'll need new ...

Ping Identity Scoops $35M To Authenticate Everywhere Forbes-Sep 18, 2014 Okta, OneLogin, JumpCloud and Ping Identity all play in the general space of “identity as applied to the cloudy world”. And they really are ...

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BIO-­‐key  offers  Device  and  Cloud  Fingerprint  AuthenYcaYon  SoluYons    On  Device:    1-­‐to-­‐1  Matching  capability  Accurate,  rapid  idenYficaYon  Low  cost,  user-­‐friendly      In  the  Cloud:    1-­‐to-­‐Many  Matching  capability  SoluYon  integraYon  for  a  seamless  user  experience  Speed:  Faster  and  more  convenient  than  passwords  

   

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Two  Func5ons  that  enable  Fingerprint  Authen5ca5on  on  device  and/or  The  Cloud  

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BIO-­‐key  Fingerprint  MatchingVST  –  Vector  Segment  Technology

Patents

We  Authenticate  Fingerprint  DataUsing  VST

We  Transport  Fingerprint  DataUsing  WEB-­‐key

BIO-­‐key  Fingerprint  MatchingVST  –  Vector  Segment  Technology

Patents

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Vector  Segment  TechnologyTM    

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VST  Algorithm  enables  accurate  extracYon  and  comparison  of  fingerprint  data  VST  Powers  BIO-­‐key’s  full  suite  of  products      Key  Features:      -­‐  1-­‐to-­‐1  and  1-­‐to-­‐Many  Matching  -­‐  Against  1.3B  fingerprints  accurately  and  quickly  -­‐  Interoperable  with  all  major  fingerprint  readers,  servers  and  operaYng  systems  -­‐  Highly  accurate  &  scalable  fingerprint-­‐based  biometric  plajorm.    

 (N.I.S.T  Tested-­‐  NaYonal  InsYtute  of  Standards  &  Technology)    

BIO-­‐key  Sensor  AgnosYc  Interoperability  BIO-­‐key  is  a  solware  company  –  Biometric  fingerprint  hardware  readers  are  a  commodity  –  BIO-­‐key  is  unique  in  that  we  are  hardware  agnos6c    and  can  analyze  any  fingerprint  hardware  reader’s  image  including:  

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Independent  Performance  Valida5on  

     

NIST's mission is to promote U.S. innovation and industrial competitiveness

by advancing measurement science, standards, and technology in ways that enhance economic security and improve

our quality of life.

www.nist.gov        

Table 1: TAR at FAR of 0.0001 Name ID DHS2 DOS POE BIO-key 2C 0.9909 0.9978 0.9990 Sagem 1C 0.9908   0.9969   0.9988  L1 1Y 0.9907   0.9994   0.9996  Sagem 1H 0.9905   0.9974   0.9989  ID Solutions Q 0.9874   0.9960   0.9975  Neuro 1T 0.9844   0.9951   0.9980  Thales 1I 0.9782   0.9920   0.9962  BioLink 1E 0.9748   0.9731   0.9880  

Table 9: Equal Error Rates Name ID DHS2 DOS POE BIO-key 2C 0.0047 0.0012 0.0005 L1 1Y 0.0051   0.0004   0.0004  Sagem 1C 0.0058   0.0017   0.0009  Sagem 1H 0.0062   0.0013   0.0008  BioLink 1E 0.0072   0.0113   0.0043  ID Solutions Q 0.0080   0.0023   0.0013  Thales 1I 0.0087   0.0036   0.0019  Neuro 1T 0.0089   0.0023   0.0014  

NIST PFT – High Rank Results

WEB-­‐key-­‐Cloud  AuthenYcaYon:  

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Key  Features:  

-­‐  Securely  transports  authenYcaYon  data  from  device  to  cloud  and  back  

-­‐  Strong  Encryp5on:  Triple  encrypYon  for  security  

-­‐  Intui5ve  graphical  interface  –  Quick  enrollment  &  authenYcaYon  

-­‐  Mul5ple  opera5ng  systems  supported    

-­‐  Core  patents  to  protect  WEB-­‐key.      

*Apple  has  applied  for  the  same  patent.    

BIO-­‐key’s  Opportunity  BIO-­‐key  owns  the  patents  associated  with  using  biometric  authen9ca9on  in  the  cloud  

BIO-­‐key  patents  cover  the  transfer  of  biometric  data  from  a  device  to  a  network  or  internet  ecosystem  

Fingerprint  template  taken  on  phone  

BIO-­‐key  Patent  Coverage  Illustra5on:  Hypothe5cal  Banking  or  Payments  App    

Encrypted  fingerprint  sent  into  the  cloud  

User  authen5ca5on    

Patent:  8,055,027  “GeneraYon  of  DirecYon  InformaYon  in  Context  of  Image  Processing”  

Patent:  7,117,356  “Systems  and  Methods  for  Secure  Biometric  AuthenYcaYon”  

Patent:  8,214,652  “Biometric  

IdenYficaYon  Network  Security”  

BIO-­‐key  Patents:  

Encrypted  fingerprint  matched  against  secure  database  in  the  cloud  

 

Binary  no5fica5on  sent  

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BIO-­‐key  Patents  •  Patent  7,117,356:  Systems/Methods  for  Secure  Biometric  AuthenYcaYon  

•  Patent  7,502,938:  Trusted  Biometric  Device  

•  Patent  7,415,605:  Biometric  IdenYficaYon  Network  Security  

•  Patent  7,454,624:  Match  Template  ProtecYon  Biometric  Security  

•  Patent  6,895,104:  Image  IdenYficaYon  System  

•  Patent  7,155,040:  GeneraYon  of  Quality  Field  Info  in  Image  Processing  

•  Patent  7,359,553:  Image  IdenYficaYon  System  

•  Patent  7,539,331:  Image  IdenYficaYon  System  

•  Patent  8,055,027:  GeneraYon  of  DirecYon  InformaYon  in  Context  of  Image  Processing  

•  Patent  8,214,652:  Biometric  IdenYficaYon  Network  Security  

•  Addi5onal  patents  pending  and  in  process    

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Broad  Suite  of  Products  Vector  Segment  Technology™  SDK  (VST)    

n  Biometric   development   kit   that   provides   developers   the   ability   to   take   advantage   of   a   highly  accurate,  device  interoperable  algorithm.  

n  Available   as   a   low   level   SDK   for   incorporaYon   into   any   applicaYon   architecture   to   increase  security  while  not  sacrificing  convenience.  

n  Runs  on  Windows,  Linux  or  Solaris  systems.  

 WEB-­‐key®    

n  Biometric  security  plajorm  for  managing  fingerprint  authenYcaYon  across  unprotected  networks  including  the  Internet.  

n  Extends   all   features   and   funcYonaliYes   of   the   VST   algorithm   to   customers   looking   to   add   an  enhanced  level  of  security  to  their  thin  client  and  client/service  applicaYons.  

n  Currently  supported  by  both  Windows,  iOS,  Droid  and  Linux  operaYng  systems.  

Biometric  Service  Provider™  

n  Support   for   the   BioAPI   (a   standards-­‐based   worldwide   soluYon)   for   a   compliant   interface   to  applicaYons  using  biometrics  for  verificaYon  and  idenYficaYon.  

n  Enhances   the   tradiYonal   use   of   the   BioAPI   by   adding   support   for   CE   devices,   supporYng  idenYficaYon  calls  and  also  providing  a  single  user  interface  for  mulYple  fingerprint  readers.  

 ID  Director™  

n  IntegraYon   with   CA’s   SiteMinder,   IBM’s   ISAM   for   Web,   Oracle’s   Access   Manager,   and   other  soluYons,  uYlizing  the  power  and  security  of  WEB-­‐key.      

n  Provides   a   simple,   custom   authenYcaYon   scheme   for   companies   looking   to   enhance  authenYcaYon.  

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Integrated  Hardware  SoluYons    

DASH SideSwipe™

EcoID

To  expand  reach,  BIO-­‐key  licensed  disrupYvely  low  cost  fingerprint  readers    The  readers  are  Plug  &  Play  with  WEB-­‐key  client  embedded  

             Target  Markets  

 Go  to  Market  Channels:    

BIO-­‐key  and  IDEX  partnered  to  co-­‐develop  processors  and  fingerprint  devices  as  an  OEM  that  u5lize  BIO-­‐key’s  algorithms  and  WEB-­‐key    

Channels  

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Direct  

Soeware  OEMS  

Hardware  OEMS  

Ver5cals  

BIO-­‐key  biometric  technology  is  integrated  with  or  embedded  in  several  third  party  Iden5ty  Access  &  Management  (IAM)  pla<orms  

BIO-­‐key’s  biometric  soeware  is  marketed  directly  along  side  applica5on  specific  partners    

Major  Clients:  

UYlize  BIO-­‐key  VST  algorithm  to  accurately  match  fingerprints  against  200M  records.    

Enrolled  and  de-­‐duped  over  100M  SIM    card  registrants,  to  deter  mobile  phone  fraud.  

ID  verificaYon  and  fraud  prevenYon  for  all  MCAT,  CPA,  FINRA  and  CAT  examinees    at  2000  Prometric  tesYng  centers.  

FBI  

1-­‐to-­‐Many  Matching  

Major  Healthcare  Partners:  

Partner: Integrated BIO-key’s biometrics for users to manage access to sensitive Electronic Health Records (E.H.R)

Partner: Use BIO-key’s advanced biometrics to authenticate clinicians, enter orders, prescribe medication and approve clinical notes.

Top  Healthcare  Electronic  Medical  Record  Plajorm  Vendors  

Marquee  Healthcare  Customers  

Real  World  Performance  Results  

#4  Ranked  Hospital  251,447authentications with a 99.34% first attempt success rate The average password or token entry takes 6-10 seconds BIO-key takes a second or less.

Month  Average  ID  

Score   Successes   Failures   Success  Rate  %  

November   89.56   251,447   1661   99.34%  

Staff  ID#   Func6on     Quan6ty  Average  ID  

Score   Low  Score     High  Score   Failures     Success  Rate  %  

xxxxxxxxx   ID  Submit   5,999   92   52   99   0   100%  

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IdenYty  Access  Management  Partners:  CA Technologies BIO-key’s fingerprint authentication is pre-integrated with CA Technologies CA SiteMinder enabling secure user access from any location.

Avnet Global Licensing Agreement BIO-key and Avnet entered into an Application Specific Licensing agreement to integrate IBM middleware into BKYI software.

IBM BIO-key’s biometric software provides secure access to IBM’s Security Access Manager (ISAM) for Web.

Oracle BIO-key enhances Oracle Access Manager security with Biometrics software.

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Key Strategic Partnership with the largest credit reporting vendor to provide “Identity Proofing” for user enrollment in Device to Cloud Identity Management System

BIO-­‐key’s  Opportunity  BIO-­‐key  owns  the  patents  associated  with  using  biometric  authen9ca9on  in  the  cloud  

BIO-­‐key  patents  cover  the  transfer  of  biometric  data  from  a  device  to  a  network  or  internet  ecosystem  

Fingerprint  template  taken  on  phone  

BIO-­‐key  Patent  Coverage  Illustra5on:  Hypothe5cal  Banking  or  Payments  App    

Encrypted  fingerprint  sent  into  the  cloud  

User  authen5ca5on    

Patent:  8,055,027  “GeneraYon  of  DirecYon  InformaYon  in  Context  of  Image  Processing”  

Patent:  7,117,356  “Systems  and  Methods  for  Secure  Biometric  AuthenYcaYon”  

Patent:  8,214,652  “Biometric  

IdenYficaYon  Network  Security”  

BIO-­‐key  Patents:  

Encrypted  fingerprint  matched  against  secure  database  in  the  cloud  

 

Binary  no5fica5on  sent  

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Key  Strategic  Partnership  with  InterDigital    BIO-­‐key  partnered  with  InterDigital  to  co-­‐develop/market  a  mobile  authen9ca9on  pla>orm  based  on  BIO-­‐key  patents    

RP

User

OpenID  Client  /Browser

Multi-­‐Factor  Auth  Proxy

Biometric  Client

SIM  /UICC

OpenID  Server

Multi-­‐Factor  Auth  Layer  (Server)  /  Master  IdP

PWD  Server

Biometric  Proxy  Function

NAF

Biometric  Auth  Server

BSF

HSS

USER  AUTH

BIOMETRIC  USER  AUTH

DEVICE  AUTH

UE  

                   Mobile  Ecosystem  

.  

Sensor Mfgs.

Hardware

Device Mfgs.

Top performing algorithm Fully interoperable

Management:  Michael  W.  DePasquale  –  CEO  25+  years  experience  in  execuYve  management,  sales  and  markeYng.  Previously  CEO  of  Prism  eSoluYons,  Inc.      Cecilia  Welch  –  CFO  20+  years  of  operaYonal  and  financial  management  experience  in  tech  companies.  Former  controller  at  Savaje  Technologies,  Crystal  Systems  and  ATN  Microwave.      Jim  Skidmore  –  SVP  Global  Sales  20+  years  sales  experience  in  IdenYty  and  access  management  channels.  IT  awards  from  IBM,  Oracle/BEA,  Microsol.      Mira  K.  LaCous  –  CTO  30+  years  soluYon  development,  project/product  management  and  company  leadership  experience.    Jay  Meier  –  VP  Corp.  Development  Former  founder  of  Sage  Capital  Advisors,  consultants  in  Security,  CredenYaling  &  IdenYty  Management.  Previously  sell-­‐side  research  analyst  on  security  technology.      

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Summary  Income  Statement:  

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Q1  ’15   Q1  ‘14   2014  A   2013  A  Services  Revenue   $0.2M   $0.3M   $1.5M   $1.0M  

License  Revenue   $0.4M   $1.1M   $2.5M   $1.0M  

       TOTAL  REVENUE   $0.6M   $1.4M   $4.0M   $2.0M  

Gross  Profit   $0.5M   $1.2M   $3.3M   $1.6M  

Net  Loss   ($0.9M)   ($0.3M)   ($1.9M)   ($2.6M)  

Per  Share   ($0.01)   ($0.00)   ($0.03)   ($0.06)  

Shares  Out*   66.0M   57.9M   59.0M   45.9M  

 *  Reflects  1  for  2  reverse  split  February  2015  

Summary  Balance  Sheet:    

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Q1  ‘15   2014  

Current  Assets   $1.2M   $1.8M  

Current  LiabiliYes   $1.5M   $1.3M  

Net  Working  Capital     ($0.3M)   $0.5M  

Stockholder’s  Equity   ($0.02M)   $0.8M  

BIO-­‐key  Growth  Outlook:  

•  12  month  Pipeline  of  Sales  OpportuniYes:  $30M  –  Up  from  $12.7M  a/o  December  2013    

•  2015  Revenue  Guidance:  $5M  -­‐  $7M  vs.  $4M  in  2014  

•  Q2  Revenue  Guidance:  $1.5M  -­‐  $3M    •  2015  Gross  Margin  Guidance:  75%  -­‐  80%  •  Breakeven  Revenue  Range:  $6.5M  -­‐  $7.0M  •  Strategic  focus  on  large  enterprise  opportuniYes  that  range  in  size  –  ($0.1M  –  $3.2M).  

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Jay M. Meier Vice President of Corporate Development BIO-Key International, Inc. [email protected] 651-789-6116 (o) 612-978-3687 (c)

Thank you!!!!