BIO-key(R) Reports Profitability on Strong Revenue Growth for Second Qu...(on capitalizing on this momentum toachie...)

BIO-key's gross margin for the second quarter of 2008 was 88.2% compared to 82.6% for the previous quarter. The increase in gross margin was primarily attributable to an increase in the mix of biometric revenues reflecting the software license model of the biometrics business. Operating expenses from continuing operations for the second quarter of 2008 decreased by 5.8% to $2.9 million compared to the quarter ended March 31, 2008, reflecting a continued emphasis on cost containment as the company grows.

BIO-key's net income for the quarter ended June 30, 2008 was $168,000 compared to a net loss of ($915,000) for the quarter ended March 31, 2008.

Highlights:

-- $2MM contract for biometric software from a global technology company

-- $335,000 contract with the Baltimore Police Department (an existing

customer), for additional MobileCop software

-- Contracts with the City of Erlanger, Kentucky, Police Department for

MobileCop(R) software and the Kettering, Ohio Police Department for

MobileOffice(TM) software

-- RIM, Sprint and BIO-key sponsored webinar conducted by Government

Technology Publications on "Mobile Data Solutions For Today's Police

Force," breaking prior attendance records

-- U.S. Patent & Trademark Office patent issued (No. 7,359,553) covering

BIO-key's image enhancement and data extraction core algorithm

components

-- Successful completion of Bangladesh voter list, registering over 80

million voters in preparation for upcoming national election

Six Months Consolidated Results

Total revenue from continuing operations for the six months ended Ju
'/>"/>