Company: BKYI
Filing Date: 2025-04-23
Form Type: 10-K
Source: 0001437749-25-012824
Chunk: 335

Company: BIO KEY INTERNATIONAL INC
Filing Date: 2025-04-23
Form: 10-K
Item: Item 7A
Chunk 335
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 an 18% carve-out on subscription orders which is based on industry standards and our current maintenance and support charge for perpetual licenses. Services revenue decreased $1,110,379 from year ended  December 31, 2023 to  December 31, 2024 which was largely attributed to one customer with a 70% cost the services.  License fees increased $847,297 from year ended  December 31, 2023 to  December 31, 2024 which a trend that we expect to continue.
    
   Transaction Price Allocated to the Remaining Performance Obligations
    
   ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied. The guidance provides certain practical expedients that limit this requirement, which the Company’s contracts meet as follows:
    
     ●  The performance obligation is part of a contract that has an original expected duration of one year or less, in accordance with ASC 606-10-50-14. 

   Deferred revenue represents the Company’s remaining performance obligations related to prepaid support and maintenance, all of which is expected to be recognized from one to five years.

   NOTE C—FAIR VALUES OF FINANCIAL INSTRUMENTS
    
   Cash and cash equivalents, accounts receivable, due from factor, accounts payable and accrued liabilities are carried at, or approximate, fair value because of their short-term nature. The carrying value of the Company’s notes and loan payables approximated fair value as the interest rates related to the financial instruments approximated market.
   Warrants were valued using the Black-Scholes model. The volatility for warrants were based on the five-year term of the warrants. We also substituted the Bloomberg one year volatility resulting in approximately $10,000 less in the sensitivity analysis. 

   NOTE D—CONCENTRATION OF RISK
    
   Financial instruments which potentially subject the Company to risk primarily consist of cash, and cash equivalents, investment in debt security, and accounts receivables.
    
   The Company maintains its cash and cash equivalents with various financial institutions, which, at times  may exceed insured limits. The exposure to the Company is solely dependent upon daily bank balances and the respective strength of the financial institutions. The Company was not in excess of coverage at  December 31, 2024 and  December 31, 2023. The Company has not incurred any losses on these accounts.