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