Company: BKYI
Filing Date: 2025-04-23
Form Type: 10-K
Source: 0001437749-25-012824
Chunk: 353

Company: BIO KEY INTERNATIONAL INC
Filing Date: 2025-04-23
Form: 10-K
Item: Item 7A
Chunk 353
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 $15,740,289 and $17,214,690 respectively.

       63

   As of  December 31, 2024, the Company has U.S. federal net operating loss carryforwards of approximately $54.6 million. Approximately $36 million are subject to expiration between 2025 and 2037, and $18.6 million net operating loss carryforwards have no expiration date. These net operating loss carryforwards could be subject to the limitations under Section 382 of the Internal Revenue Code due to changes in the equity ownership of the Company. In addition, the Company has net operating loss carry forwards from various states of approximately $5.9 million which expire from 2026 through 2043.
    
   A reconciliation of the effective income tax rate on operations reflected in the statements of operations to the US federal statutory income tax rate is presented below.

       Year ended    Year ended  
   December 31,    December 31,  
   2024    2023  
         
 Federal statutory income tax rate   21%  21%
 State taxes, net of federal benefit   0.82   (1.41)
 Permanent differences   (1.84)  1.97 
 Expiration of net operating loss and research credit carryforwards   (46.14)  (7.84)
 Expiration and forfeiture of stock options   -   - 
 foreign rate differential   (7.23)  (5.84)
 rate change   (0.41)  (1.05)
 Other   0.14   (9.08)
 Valuation allowance   33.98   (0.24)
         
 Effective tax rate   0.32%  (2.5)%

   The Company has not been audited by the Internal Revenue Service (“IRS”) or any states in connection with income taxes. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The periods from 2020 through 2024 remain open to examination by the IRS and state jurisdictions.
    
   The Company's subsidiary in Nigeria has not filed its required returns since inception. Management believes that when the returns are filed, no taxes will be owed due to the losses incurred during those periods. The Company is not subject to minimum tax during the first four years of operations. As