Company: BKYI
Filing Date: 2025-04-23
Form Type: 10-K
Source: 0001437749-25-012824
Chunk: 160

Company: BIO KEY INTERNATIONAL INC
Filing Date: 2025-04-23
Form: 10-K
Item: Item 1B
Chunk 160
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 is greater. There were no impairments in 2024 and 2023.
    
   10. Advertising Expense 
    
   The Company expenses the costs of advertising as incurred. Advertising expenses for 2024 and 2023 were approximately $353,000 and $340,000, respectively.
    
   11. Research and Development Expenditures
    
   Research and development expenses include costs directly attributable to the conduct of research and development programs primarily related to the development of our software products and improving the efficiency and capabilities of our existing software. Such costs include salaries, payroll taxes, employee benefit costs, materials, supplies, depreciation on research equipment, services provided by outside contractors, and the allocable portions of facility costs, such as rent, utilities, insurance, repairs and maintenance, depreciation and general support services. All costs associated with research and development are expensed as incurred.

       50

   12. Earnings Per Share of Common Stock (“EPS”)
    
   The Company’s EPS is calculated by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the reporting period. Diluted EPS includes the effect from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options and warrants, when the effect of their inclusion is dilutive. All BIO-key shares issued and outstanding for all periods reflect BIO-key’s 1-for-18 reverse stock split, which was effective  December 21, 2023.
    
   13. Accounting for Stock-Based Compensation 
    
   The Company accounts for share based compensation in accordance with the provisions of ASC 718-10, “Compensation — Stock Compensation,” which requires measurement of compensation cost for all stock awards at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The majority of its share-based compensation arrangements vest over a three year vesting schedule. The Company expenses its share-based compensation under the ratable method, which treats each vesting tranche as if it were an individual grant. The fair value of stock options is determined using the Black-Scholes valuation model and requires the input of certain assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (the “expected option term”), the estimated volatility of its common stock price over the option’s expected term, the risk-free interest rate over the option’s expected term, and the Company’s expected annual dividend yield. Changes