Good morning, ladies and gentlemen. Thank you for standing by. Welcome to BIO-key International’s Fourth Quarter and Full Year 2017 Conference Call. During the presentation, all participants will be in listen-only mode. After the speakers' remarks, you will be invited to participate in a question-and-answer session. As a reminder, ladies and gentlemen, this conference is being recorded today, March 29, 2018. I would now like to turn the conference over to today's host, Scott Mahnken, BIO-key's Vice President of Marketing. You may begin, sir.

Good morning and thank you for joining us on today's call. With me this morning are Mike DePasquale, BIO-key's Chairman and CEO; Barbara Rivera, Chief Operating Officer and Ceci Welch, BIO-key's Chief Financial Officer. I'd like to remind everyone that today's conference call and webcast may contain forward-looking statements that are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of these statements. The words estimate, projects, 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 Private Securities Litigation Reform Act of 1995. For a complete description of these and other risk factors that may affect the future performance of BIO-key International, see Risk Factors in the company's Annual Report on Form 10-K and its other filings with the SEC. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. The company also undertakes no obligation to disclose any revision to these forward-looking statements to reflect events or circumstances after the date made. At this time, I'd like to turn the call over to Mike DePasquale. Mike?

Thank you, Scott. Good morning, everyone and thank you for joining us today. 2017 was a milestone year for BIO-key. Our year-over-year revenues improved 110%, having completed the year with a very strong fourth quarter in which we recorded positive net income from operations. Key to our improved performance was strong growth across all lines of business. Software license revenue rose 167%; hardware finger reader sales improved 50% and the debut of our new line of biometric and Bluetooth enabled locks made a solid first year contribution to 2017, reflecting about 5.5% of our full year revenues. Overall, these results underpin our belief that after years of effort, our business and the biometrics industry at large are now approaching an inflection point. Building on the success of 2017, we remain confident, not only in our long term growth potential, but also our prospects for improved financial performance in 2018. Supporting our outlook is a growing enterprise appreciation for secure, scalable and affordable biometric authentication technology, with each additional high profile breach, demonstrating that passwords alone are insufficient to protect networks and critical customer and enterprise data. Our overarching strategy is to position BIO-key as the preferred provider of secured biometric authentication solutions across an expanding range of end user markets. Our go to market strategy is focused on hardware and application OEMs, expanding our Asia market presence and expanding our distribution relationships for our hardware solutions. BIO-key has had solid success forging relationships with hardware OEMs and software application OEMs, enabling them to incorporate our state-of-the-art biometric solutions into theirs. These relationships provide BIO-key with an established footprint in several key sectors, including manufacturing, healthcare, financial services, retail and human resource management, via partners including NCR, OmniCell and a number of healthcare solution providers. Additionally, there have been growing security…

Thank you, Mike. Research and development remains critical to our operations as it is crucial that our solutions anticipate tomorrow’s security needs, while also remaining compatible with changing technical requirements. During 2017, we added a number of enhancements to our core software and debut new releases that we believe will help drive customer interest and sales in 2018 and beyond. We released WEB-key 4.0, a major upgrade to our core software solution that enables the secure transmission of biometric data within cloud hosted environments and on premise, enabling enhanced security and strong authentication. WEB-key software enhancements streamlined operational elements of the software, enabling greater speed, flexibility and seamless device operations. Key enhancements include a new browser plug-out design for client support like chrome, Linux support, new authentication methods such as device based authorization and database encryption of personal data areas. WEB-key customers include government agencies, insurance companies, international banks and OEM partners. Now, these and future customers can reap the benefits of our next generation identity access management solution, while streamlining their user experience. We also released VST 6.6, which is our industry leading NIST evaluated core fingerprint algorithm. Our VST algorithm is utilized in some of our largest biometric customer deployments, operating and financial services, manufacturing, call centers, education, healthcare and government. VST has demonstrated industry leading speed and accuracy over two decades of active use in some of the largest and most complex biometric identity databases. New VST features include Windows, Mac OS X, Linux and support for biometric reader hardware and virtual environments. These enhancements expand the potential uses and benefits from our biometric solutions to a broader base of widely deployed operating systems and expanded capability that will help drive additional sales. Our ongoing objective is to sell the capabilities and reach of our technology and solutions, while also working to streamline their footprint and efficiency to better serve enterprise customers, which historically have contributed over 85% of our revenue. These customers must often adhere to their corporate, governance, risk and compliance policies to support their business and technology processes that require the utmost security. We have also stressed in all our initiatives BIO-key’s biometric inclusive strategy, which seeks to enable our solutions to support multiple modes of authentication and to operate on almost any device or operating system. This strategy is an important differentiator in the market and makes BIO-key a particularly compelling choice for the enterprise. And with that, I turn the call over to Ceci for some remarks regarding our 2017 financial performance. Ceci?

Thank you, Barbara. I will focus my remarks on our full 2017 results, however, I'm happy to answer any specific questions on Q4. Full year revenue rose 110% in 2017 to 6.3 million versus 3 million in 2016, primarily due to an expanded software license agreement from an existing Fortune 500 customer recorded in Q4 of 2017. Hardware, including readers and locks, grew to 1.9 million in 2017 and represented 30% of total revenues versus the revenue of 1 million or 32% of total revenue in 2016. Gross margin declined to approximately 49% in 2017 compared to 75% in 2016, principally due to the 1.5 million in non-cash amortization of intangible assets related to our FingerQ IP, which we began amortizing in Q1 of 2017. Absent this amortization, 2017 gross margin would have been approximately 72%. Operating expenses rose to 7.3 million in 2017 compared to 6.4 million in 2016, including 400,000 increase in expenses relating to the supporting growth of our Hong Kong subsidiary, higher sales levels in 2017 and $531,000 in costs related to our June 2017 NASDAQ uplisting. BIO-key’s 2017 net loss was 4.3 million or $0.76 per share after preferred dividends, compared to a loss of 4.2 million or $0.89 per share after preferred dividends in 2016. Per share results in 2017 and 2016 are based on weighted average shares of 6.6 million and 5.5 million basic shares outstanding, respectively, reflecting the impact of the company’s 1-for-12 reverse split effected December 2016. It's important to note from a cash flow standpoint, we reduced our net cash used from operations significantly from 4.4 million in 2016 to 2.5 million in 2017, about 43%. At December 31, 2017, our total cash and cash equivalents plus current receivables were 3.2 million as compared to approximately 2.6 million at December 31, 2016. We ended the year with total stockholder equity of 13.8 million with approximately 7.7 million shares of common stock outstanding. We now have 9.5 million shares of common stock outstanding. After the March 23, 2018 conversions of 6 million in principal and the principal amount of the company's Series B-1 preferred convertible shares into 1.8 million shares of BIO-key’s common stock, based on a conversion price of $3.60 per share. It's important to note that the preferred stock conversion reduces future dividend obligations and the conversion price of 3.6 per share represents over 80% premium to the recently traded price of BIO-key’s common stock. Since payment of accrued dividends was accepting the use of 3.6 per share pricing, we think it is a strong show to support the Series B-1 investors. For these reasons, we view this conversion as a very positive development for the BIO-key shareholders. And now operator, let’s start with questions-and-answers session.

[Operator Instructions] The first question comes from Brian Kinstlinger with Maxim Group.

Hi. Good morning, guys. Nice results for the fourth quarter. In terms of revenue guidance, can you talk about the visibility to that range? Maybe, what kind of revenues already committed if any and then how much of that revenue guidance depends on, it could be a large order or two such as the healthcare protection of medical records that you described.

Well, Brian, good morning. It's Mike. It's a mix of all of what you just mentioned. Clearly, we have a recurring revenue that is based on, for example, maintenance and support, some existing professional services engagements we have, which will continue through 2018. Clearly, our hardware sales are especially at the consumer level are relatively consistent through Amazon and our online channel. So, there's some recurring revenue there. As it relates to our software license business, clearly, it's new opportunities. We have a number of large opportunities in the pipeline, similar in nature to what happened in the fourth quarter where we closed one of them. So it's really a mix of both. We're not providing quarterly guidance, because as we stated both in our earnings press release and I just stated before, the variability of our business, but we're feeling really good that we have lined up, both from a hardware and a software perspective, the pipeline and the opportunities to achieve our objectives.

Great. And then in terms of the outlook, can you highlight maybe touchlocks in readers [ph] versus maybe software sales, is there a mix that you see and where one is growing faster and makes up a greater proportion of revenues than others.

Well, that's a great question. If you go back to Ceci’s comments, it appears that -- not appears, factually, hardware was about a third of our business, give or take, in 2016 and 2017. Now that we’re in volume production for our consumer products, the touchlocks, that ratio could change. We love obviously the software business because the gross margins are significantly higher, but we think that all segments will grow. So we clearly think our software license business is going to grow and our hardware business, not only the finger scanners, but the touchlock series has the potential, right. We'll see, but has the potential to grow even faster. So, that mix might change.

Now, what is the company doing to get into brick and mortar stores like the Home Depots of the world for the touchlocks?

We're definitely going to rely on our distribution partners to do that. We've set up and you'll hear more about this in the near term, a couple of OEM relationships as well as we're using D&H, which is a very large product and software distributor that has direct connections with all of, not only the online e-tail channels, but also the brick and mortar channels. So, we're not trying, for example, you know, Scott is -- Scott Mahnken who is our VP of marketing is helping to spearhead our initiatives in that area here in the US. We're not going to try to call directly on Home Depot to try to sell them something. We're really going through the distribution channels that we already have in place because they have the connections to those outlets. So that's our strategy there.

And where are the margins now that you're selling those products on average. You know, there are different ones. What is the rough gross margin on that touchlock?

It's kind of all over the map because we have different versions of the product. So the Bluetooth versions of the lock have a higher gross margin obviously because there's a lower builder material cost than the fingerprint locks. So it's variable, but, if you look at our blended gross margin, it's about 75%. And so if you were to contemplate our software, generally carries a 90 plus percent gross margin, the hardware is probably in the 50% to 60% range. And again that really depends on the model of product. Also, this is another variable. Now, we're getting into -- this month, we're actually shipping the first, I’ll call it, sets of volume production product. As that increases, as our volume production increases, our margins will also increase. So, we're going to start to catch some efficiency. So we'll see, as we evolve through the year, what the ultimate gross margins will be.

And then a simple search on Amazon shows a couple of different touchlocks and one or two Bluetooth enablement locks, I mean, the reviews are mixed. Can you kind of talk about how you think your product is superior.

Well, we think we have really three big advantages. The first is, we have a full line of locks, which address everything from travel to, I’ll call it, medium duty exterior capability to light duty fund and designer type locks as well. So we have a full and complete line of products and you're going to see that continue to evolve. We're going to be introducing and begin selling our bike lock product as well in the second quarter. So that's one. The second is distribution. We really have set up a number of very strong distribution channels that should get us to more aggressively to brick and mortar and to e-tail. So that's our second advantage. The third is, we are really very, very price competitive across the board and it's our goal and objective to make these products affordable and available to virtually anyone here in the United States because we all -- every one of us, whether you're 12-years old or 95-years old, you have used or you are using some form of a padlock and we think again that there's tremendous opportunity to grow this business, but the product has to be available, it has to be affordable and it also has to meet the quality standards that consumers expect. And, we have spent the last, I would call, 6 to 8 months, refining all of those things, making sure that when we find a glitch or an issue, we fix it. And we wanted to get all of that done before we went into volume production and volume manufacturing.

Okay. And two more quick ones. First of all, your expansion to Asia. What's the impact on operating expenses from these investments?

Well, it’s interesting. Obviously, our cost to support our operations in both Hong Kong and China are dramatically lower than the cost to support operations here in the United States. That's no secret. And potential now for biometrics in the Asian market is also significantly greater and larger just from a numbers perspective than it is here in the US. So I believe that from an efficiency perspective, investment perspective and a return perspective, we're going to see really good results from our investments there, very, very positive results.

And how much is the company spending to build out those resources?

Well, we're pretty well built out at this point. And if you think about what Ceci mentioned in her comments, I believe our expenses were about $0.5 million higher in 2017 than ’16 as a result of the investments we've made there. But we run a really, really efficient operation again with two offices, one in Jiangmen [indiscernible] and one in Hong Kong.

Okay. Last question maybe for Ceci. Can you break down the fourth quarter revenue from license fees and other, how much was hardware and how much was software and software related revenue?

Sure. We had approximately 2.5 million in the license fees and a little more than 100,000 in hardware was kind of -- that was probably our lightest quarter and then in services, probably around $350,000, so a total of a little over 3 million for the quarter.

[Operator Instructions] The next question comes from Dan Camus, a Private Investor. Please go ahead.

Hey. Good quarter, guys. What would you say is the breakeven revenue for 2018?

Ceci, I’ll let you answer that.

Okay. Again, this is all depending on the mix. We’re forecasting somewhere between 7.5 to 8, 8.25, somewhere around there in million, 7.5 million to 8 million, 8.25 million, depending on the mix.

Okay. And that's net income?

Correct.

Would you break – okay? How much in accrued dividends was converted? Can you say?

It was a little over 300,000. Basically, everything, through till February of this year. So all of the B-1.

Okay. And how much is -- I'm sorry.

That's all. So dividend. Yeah.

Okay. How much was left in, how much is left in the preferred shares and are those expected to be converted as well?

That is their intention in order to do that. They've asked for -- we have a blocker provision for only being able to convert 9.9%, that is in order to do that. One of the B-1 shareholders is much less than the other. So one is going to stay at the block of provision and the other has asked for a 19.99% provision to finish converting all their shares.

I see. And are you guys -- you guys want to do that or is that going to --?

Yeah. Dan, this is Mike. Absolutely. Those shares are on the cap table. We want to see those shares converted for two reasons. Number one, to reduce or eliminate our debt burden and our dividend burden. So we definitely want to see them converted and again they're on the cap table, they're there, we believe that it makes perfect sense for the company to see those shares converted. Absolutely.

Okay. Good. Do you have an estimate or do you have -- something you can tell us about what the actual revenues out of the Hong Kong office were in 2017?

Ceci, I don't know. Do you have that broken out in the -- will it be broken out in the 10-K?

No. It is not broken out in the 10-K. But I do have that. I don’t have it readily in front of me. I want to say it's a little under 0.5 million off the top of my head.

Okay. And does that include any sales of the Finger Q licenses?

The Finger Q licenses, it does –included in both US and internationally. There are sales, but it’s small compared to the amortization expense.

Is it about in the order of the year before I think, which was pretty minimal?

It actually was a lot more than the year before. It was probably close to $60,000 as far as the expense.

Are we including a sizable increase this year or would we expect a small amount this year as well?

Well, first of all, we're not providing again any guidance broken out at that level, but we do expect to take advantage of the investment we made in those licenses and we think this year, we're going to begin to see significant return on that. So that's our goal and intention.

The next question comes from Richard Pugh with Richard Pugh Investment Capital.

Good morning, Mike. Congratulations on an excellent quarter. I have a -- my first question is, do you have any plans for a new type of touchlock, for example, it would seem to be an obvious application for automobiles and I don't know if it would work for home entry because of the need for electricity to read the fingerprint.

It’s a great question, Richard and thank you on the complement for the fourth quarter. The answer to that question is yes. I think I’ve mentioned this before on one of our previous calls, we didn't necessarily get into the lock business because we wanted to solely in, for example, in the padlock component to that industry. The module that's inside our Bluetooth lock and the module that's inside our fingerprint lock can fundamentally be put and installed anywhere on any device. It's all self-contained, which means that it's battery operated, it's battery driven, it can be recharged and so the application for those modules is pretty broad. So, the answer to that question is yes, we are pursuing OEM opportunities where those modules can be utilized for various and sundry applications.

Excellent. China is -- could be conceivably a concern. We all know that China loves to steal intellectual property. Is your Relationship with China positive in that event because of the fact that since you're already related to them, [indiscernible] intellectual property.

Well, I think there's two ways to answer that. The first is obviously we have offices there, we have executives there and we have relationships there. So that's positive. Second, we deal fundamentally and only in the commercial markets. So, we're only in the commercial markets and we're very limited with regard to the technology that we can market and sell there. So for example, we can sell our one-to-one verification technology there, but we cannot sell our one-to-many technology, which is, for example, what’s used by the FBI and some other government based kind of applications that we've been installed in. So we're very restricted in that regard and we're also very focused on certain segments of the market there. So, we're really protected in a significant way from anyone waylaying our technology. I mean, again, because we have control over that and we limit what we make available.

All right. So as part of your report, a relationship with NCR, does that mean that finally we're going to see ATMs with fingerprint readers on them?

Well, our relationship with NCR is ongoing. I mean, it's a long relationship. We've been doing business with them for eight years. We are doing business with them on the POS side, point of sale side. So, not on the ATM side, but on the point of sale side, but could there be the introduction of a greater number of biometrically enabled ATMs in the US, it could be. We're seeing it on a widespread basis in Africa and beginning in Europe, maybe, it will happen here in the United States over time.

[Operator Instructions] The next question is a follow-up from Brian Kinstlinger with Maxim Group.

Yeah. Great. Sorry, just one more. Well, not giving quarterly guidance is understandable, [indiscernible] the quarter is closed now in a day or two, can you give us a sense for what revenues and mix might have looked like in the first quarter since it's really completed already.

No. I think we mentioned that we weren’t providing quarterly guidance and we're not. So I really can't provide any color.

Wouldn’t provide guidance. I thought the quarter was really over. I mean, is there an unusual event where we have already finished a quarter and reporting the last one.

Yeah. Well, we -- I think, we had the similar scenario last year where we were reasonably close as well and so we didn't do that and it's not something we're going to do this year.

The next question is from Gary Surenian, a private investor.

A question about touchlock. From everything I know that it is Bluetooth enabled, is there any plan to have a WiFi enabled product available?

Gary, good morning. Good to hear from you. Number one, touchlock comes in two versions. One is a Bluetooth version and the other is fingerprint version. So it can be opened via fingerprint or we have Bluetooth models. We're introducing a combination model, which will operate both Bluetooth and fingerprint, so you'll be able to open it either way. We are working on and will likely be introducing networked versions of these products as we evolve through the year. So the answer to that question is yes.

Okay. All right. Great. Because I seem to think there's a fairly significant market for a WiFi version of that product.

Well, and not just WiFi, but networked in general. So in the commercial markets, that could be a nice opportunity for us.

Okay. All right. Great. Also, it seems to me there was a press release out recently regarding a -- it wasn't prepared to asses, but I just thought it was a SecuGen that for a password, password manager.

Oh, OmniPass, yes. Yeah. That is a password manager that we are now bundling with our finger scanners, because you may recall even a year and a half or two years ago, we introduced our line of products in particular the SideTouch, the SideSwipe and the EcoID to go along with Windows Hello, which is the native authentication -- biometric identification option in Windows 10. Microsoft was planning to introduce a whole series of, I'll call it, add-ons and upgrades and additions that would allow Windows 10 users to use that biometric technology to access different port holes and applications and so forth and they’ve been slow on the draw there. So we decided to package, we didn't develop it, it's not something we feel compelled to develop on our own, nor do we need -- we believe the market needs another one, but we decided to package the OmniPass password vault with our finger scanners because what we get, we get a lot of feedback from our customers, in particular our consumer customers who love the fingerprint technology, but want to use it for other things and so this, a little password vault allows them to be able to use the biometric for access to their bank accounts, healthcare accounts, web portals, social media accounts and so forth. So that's why we did it and we're getting good feedback on it as well. There are a number of password vaults out there again, which is why we decided we weren't going to develop our own, but this is really a -- it potentially could be a stopgap if Microsoft steps up and again provides those add-ons, upgrades and enhancements or if not, we're providing OmniPass today, but it could be any product going forward.

Okay. So here's the million dollar question. I literally believe it's a million dollar question. Right now, is Microsoft -- Microsoft a Windows based, when or will there be an iOS version on that, that would be in our operable?

Well, it's interesting you say that. There are two segments to your question. The first is many people who use a password manager want to be able to use the password manager on their phone as well as on their PC, so they want to have access to that capability at the same time and on both devices and we're looking at different versions of the product that would provide that capability. The second part to that question is really not necessarily iOS, but Mac OS. I think Barbara mentioned in her comments that we are now going to be supporting Mac OS for our WEB-key, our core WEB-key client and product based on the demand requirements from a number of our customers. So we are going to be supporting that. There is a limited number of fingerprint scanners that have the drivers to support Mac OS, but we have a number of them that we do support and we're going to be doing that. So, I hope that answers the question. The higher end OmniPass product does not operate across both platforms, but we're looking at different options right now.

Okay. Well, of course I did miss the first part of the call, so I didn't hear Barbara's comments on Mac OS, but I think the real limiting factor is not being able to have that ability to cross platforms. I do actually use a password manager and I think one of the things I've learned and the one I do use works on both iOS and Windows. The problem is most of these password managers are set up to only operate at once or in other words, if I were to try to use the OmniPass, I would have to disable and delete the other password manager I use. So – anyway, it seems to me to be a rather important feature to get that iOS in there somewhere if possible.

Yeah. We agree and we're looking at that.

The next question in a follow up from Dan Camus, a Private Investor.

Yeah. Has Microsoft advanced at all in making web based biometrics native to Windows and is there a licensing opportunity there.

That's a good question. I think I just talked about what they're doing in the Windows 10 venue. In terms of cloud based or web based biometrics, they’ve supported that for years, many of our customers use Windows Server and also use the Microsoft cloud and as long as -- along with everyone else's cloud. So biometrics are supported by Microsoft in that venue and have been supported for many, many years. Is there a licensing opportunity directly with Microsoft? I think that's the other part of your question. And, I guess over time, we'll see.

Oh, I didn't realize. So that means that Microsoft basically competes with you guys or what's your edge over or they have a limited capability compared to WEB-key or I wasn’t aware of that?

Not at all. There's no competition at all. It's complimentary quite frankly, because as I mentioned, Microsoft supports the platform for biometrics across their entire product line. They got a little more aggressive with Windows Hello to support it at the desktop level for consumers, but we've been operating on the Microsoft Windows server platform for 15 years. So I mean, there's no competition, if anything, it's just the supports scenario.

Okay. Another question on the OmniPass. Is there any data on the uptake of OmniPass consumer for customers who purchase BIO-key rears and how do you monetize that? What’s the marketing concept behind that?

Well, first of all, anyone who purchases one of our finger scanners has access to it. So we would assume and we track obviously the sales that most people who buy the reader take advantage of the password vault. They don’t have to, but they can. And the idea here was to offer this as an option so that it is not only maintained, but accelerates the sale and sales of our finger scanner products and it's doing that. So we're very pleased with that. And again it's, the monetization comes really in the context of volume and increasing our sales of our products and the new products that we're going to be introducing, new form factors to replace ultimately SideTouch and SideSwipe.

Okay. I have one last question along this line. When I searched for biometrics in the cloud last night or fingerprint biometrics, BIO-key in the first ten pages didn't come up. What's your view on this and the importance of net searches for your business?

I'm going to let Scott answer that, because we're doing an awful lot of work around that. In one regard, I'm surprised, you've not seen any of our pop up ads come up on your desktop after you've done a search, but in any event, I'll turn it over Scott.

Yeah. Dan, thanks for the question. As a matter of fact, we just revisited our SEO strategy about two weeks ago and we feel that it was vital. In this day and age of marketing, we're all getting lambasted with e-mail solicitation. So reaching out to the customer and pulling them in is not as effective electronically as it was say five years ago. So we're making a real strong commitment to search engine optimization. We've got some things planned for our website in regard to search engine marketing and obviously our remarketing banners, we just rebranded all of them, those should have a strong presence in the market. So keep an eye on us out there on Google. We feel as though it's a primary source.

The next question is a follow-up from Richard Pugh with Richard Pugh Investment Capital.

Mike, I'm curious what are your source of recurring revenues and I'm talking about things that are sort of passive, in other words, you make sales of your software, that's a piece by piece sale and you've gone to this new model which I think is wonderful of the subscription model. But other than that, do you have any source of recurring revenues that are coming in that are basically like someone’s using your product and you're getting paid each time they use the fingerprint software. Is there anything like that?

The answer is yes. So we sell our software as a subscription and in fact we're moving to that model, which will create more of a recurring revenue stream, but we also have a solid recurring revenue stream from maintenance, which comes from our OEM customers and our traditional perpetual license customers as well and that is going to grow -- definitely is going to grow across the years 2017 into 2018. So that’s another source. So there are really two sources of recurring revenue, subscription and maintenance that we can count on.

So you're not getting paid for anybody on a user basis, in other words, if I use your software to -- for my password and I use it daily, I'm not paying a penny or something like that to BIO-key to use that?

Well, in a subscription model, that's exactly what you're doing. You're paying on a time basis right, not a per click basis, but a time basis. So for example, the reason we like the subscription business is, let's say, a perpetual license would cost a dollar forever, we can make the same technology available for perhaps $0.30 a year, making it much more affordable for that particular client or customer to procure and deploy our technology, but instead of paying us $1, they pay us $0.30 a year for as long as they use the software. And generally speaking, subscribers sign up for anywhere from one to three years. So, we get a commitment obviously to go across time, but that's a little bit different than what you were saying on a per click bases, subscription, again the way we are selling it in enterprise is just as I described.

Okay. I understood that. I guess I didn’t phrase my question as well as I should have. Is there any way that you see even if it's not current that you would be getting paid by consumers on a subscription basis? Is there any part of your product -- market that you would be -- consumers would be paying you on a recurring basis for the use of your software?

The answer to that is yes and that would be through our identity and access management partners and that's why the OEM business is so important for us. So we're not in a federated identity business per se that would touch consumers directly, but a number of our partners and prospects are. And so the answer to that question is, it’s possible.

This concludes our question-and-answer session. I would like to turn the conference back over to Mike DePasquale for any closing remarks.

We look forward to updating you on our business progress and outlook on our next call. Please be sure to follow us on social media and our website blog where we provide ongoing updates on products and our activities. Our social media information is at the end of today's release. Again, thank you for your interest in BIO-key and for your participation in today's call.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.