Company: BKYI
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001437749-25-026549
Chunk: 42

Company: BIO KEY INTERNATIONAL INC
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 8
Chunk 42
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 ended  June 30, 2025, partitioned notes in the aggregate principal amount of $400,000 were exchanged for 498,437 shares of common stock (See Note 10 Note Payable).

       13. 
       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 government loan payable approximates fair value as the interest rate related to the financial instruments approximated market.

    14.  MAJOR CUSTOMERS AND ACCOUNTS RECEIVABLE 

   During each of the three-month periods ended  June 30, 2025, and 2024, two customers accounted for 47% and one customers accounted for 59% of the revenue, respectively. 
    
   Two customers accounted for 49% of current accounts receivable at  June 30, 2025. At  December 31, 2024, two customers accounted for 36% of current accounts receivable.

    15.  INCOME TAXES 

   United States, Hong Kong and Nigeria
   The Company recorded no income tax expense for the three and six months ended  June 30, 2025 and 2024 because the estimated annual effective tax rate was zero. In determining the estimated annual effective income tax rate, the Company analyzes various factors, including projections of the Company’s annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the ability to use tax credits and net operating loss carry forwards, and available tax planning alternatives.
    
   As of  June 30, 2025 and  December 31, 2024, the Company provided a full valuation allowance against its net deferred tax assets since the Company believes it is more likely than not that its deferred tax assets will not be realized.
    
   Spain
   Due to the current loss for the six months ended  June 30, 2025, the Company did not record income taxes.  

    16  SUBSEQUENT EVENTS 

   On  August 7, 2025, the Company issued an aggregate of 15,000 shares of restricted stock to new employees with three-year vesting. All the shares were issued at $0.76 the closing price on