BIO-key International, Inc. Receives Notice of Non-Compliance from Nasdaq
BIO-key International (Nasdaq: BKYI), a provider of identity and access management solutions, received a non-compliance notice from Nasdaq on May 22, 2024.
The company failed to timely file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. This delay is attributed to the ongoing restatement of financial statements for various periods in 2023. The company also remains delinquent in filing its Form 10-K for the period ended December 31, 2023.
BIO-key has until June 17, 2024, to submit a compliance plan to Nasdaq. If accepted, an extension until October 14, 2024, may be granted to regain compliance. The company intends to file the delayed reports soon to meet Nasdaq's listing requirements.
- BIO-key intends to file the delayed reports soon, indicating proactive steps toward compliance.
- Company's feature of Identity-Bound Biometrics (IBB) highlights its innovative approach in the IAM sector.
- BIO-key received a non-compliance notice from Nasdaq for failing to file its Quarterly Report on time.
- The company is also delinquent in filing its Annual Report (Form 10-K) for the period ended December 31, 2023.
- Ongoing restatement of financial statements for multiple periods in 2023 has caused delays.
- Potential risk of delisting if compliance is not achieved by October 14, 2024.
- Investors may experience uncertainty due to delayed financial disclosures.
Insights
The notice from Nasdaq regarding BIO-key International's non-compliance with filing deadlines can raise several red flags for retail investors. Delayed financial reports, especially when compounded with restatements of past financial statements, often indicate internal inefficiencies or even deeper financial management issues.
From an investor's perspective, the failure to file the Quarterly Report on time could lead to a lack of transparency, making it difficult to assess the company's financial health. The fact that BIO-key is also delinquent in filing its Annual Report for the period ended December 31, 2023, suggests systemic challenges in their financial reporting processes.
While the company has until June 17, 2024, to submit a compliance plan, the uncertainty surrounding the situation could cause market volatility. Investors should note the potential for a 180-day extension, which could offer temporary relief but may not fully address underlying issues. The restatement of financials for multiple periods adds another layer of complexity, indicating that previous financial reports may have been inaccurate or misleading.
This scenario could discourage potential investors and raise the cost of capital for BIO-key as lenders and investors could demand higher returns to compensate for increased risk.
From a legal standpoint, the notice of non-compliance brings several important considerations to light. Timely filing of financial reports is a critical regulatory requirement, ensuring transparency and adherence to securities laws. Failure to comply can lead to sanctions, including delisting from Nasdaq, which would severely impact the company's stock liquidity and valuation.
Additionally, restating financials for several periods signals potential past inaccuracies, which may expose BIO-key to risk of litigation from shareholders who may feel misled by the previous financial reports. Shareholder lawsuits could result in substantial legal fees and settlements, further straining the company's financial resources.
The company has a window to submit a compliance plan and if accepted, an extension until October 14, 2024, to regain compliance. However, the risk of not meeting this deadline remains and the consequences of potential delisting cannot be overlooked by investors.
WALL, N.J., May 24, 2024 (GLOBE NEWSWIRE) -- BIO-key International, Inc. (Nasdaq: BKYI), an innovative provider of workforce and customer identity and access management (IAM) solutions featuring Identity-Bound Biometrics (IBB), announced today that on May 22, 2024, it received a letter (the “Notification Letter”) from The Nasdaq Stock Market, LLC (“Nasdaq”) informing the Company that it was not in compliance with Nasdaq Listing Rule 5250(c)(1), which requires listed companies to timely file all required periodic financial reports with the Securities and Exchange Commission (“SEC”), due to the Company’s failure to timely file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (the “Form 10-Q”). The Notification Letter has no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Capital Market.
The Company filed a Notification of Late Filing on Form 12b-25 on May 16, 2024, indicating that the filing of the Form 10-Q would be delayed because it was unable to timely file the Form 10-Q without unreasonable effort and expense. As previously announced, the Company is in the process of restating its consolidated financial statements for the three months ended March 31, 2023, the three and six months ended June 30, 2023, and the three and nine months ended September 30, 2023 which has delayed the compilation, presentation and review of certain financial and other disclosures required to be included in the Form 10-Q.
The Notification Letter stated that the Company remains delinquent in filing its Form 10-K for the period ended December 31, 2023 (the “Form 10-K”) and has until June 17, 2024 to submit a plan to regain compliance with respect to these delinquent reports. If the plan is accepted, Nasdaq may grant an extension of up to 180 calendar days from the filing due date of the 10-K, or until October 14, 2024, to regain compliance. The Company intends to file the Form 10-Q and the Form 10-K with the SEC as soon as practicable and regain compliance with Nasdaq’s continued listing requirements.
About BIO-key International, Inc. (www.BIO-key.com)
BIO-key is revolutionizing authentication and cybersecurity with biometric-centric, multi-factor identity and access management (IAM) software securing access for over forty million users. BIO-key allows customers to choose the right authentication factors for diverse use cases, including phoneless, tokenless, and passwordless biometric options. Its hosted or on-premise PortalGuard IAM solution provides cost-effective, easy-to-deploy, convenient, and secure access to computers, information, applications, and high-value transactions.
BIO-key Safe Harbor Statement
All statements contained in this press release other than statements of historical facts are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 (the “Act”). The words “estimate,” “project,” “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 Act. These statements are not guarantees of future performance or events and are subject to risks and uncertainties that may cause actual results to differ materially from those included within or implied by such forward-looking statements. These risks and uncertainties include, without limitation, our history of losses and limited revenue; our ability to raise additional capital; our ability to continue as a going concern; our ability to protect our intellectual property; changes in business conditions; changes in our sales strategy and product development plans; changes in the marketplace; continued services of our executive management team; security breaches; competition in the biometric technology industry; market acceptance of biometric products generally and our products under development; our ability to convert sales opportunities to customer contracts; our ability to expand into Asia, Africa and other foreign markets; our ability to integrate the operations and personnel of Swivel Secure into our business; fluctuations in foreign currency exchange rates; the duration and extent of continued hostilities in Ukraine and its impact on our European customers; delays in the development of products, the nature and estimated amount of adjustments to our previously issued financial statements covering the quarterly periods in 2023, as well as the nature and estimated adjustments that may be required from our preliminary estimates of results for 2023 and first quarter of 2024, as the final adjustments may vary from the amounts estimated in our prior SEC Reports, which variance may be material; the commercial, reputational and regulatory risks to our business that may arise as a consequence of our need to restate our financial statements, including any consequences of non-compliance with Securities and Exchange Commission (“SEC”) and Nasdaq periodic reporting requirements; our temporary loss of the use of a Registration Statement on Form S-3 to register securities in the future; any disruption to our business that may occur on a longer-term basis should we be unable to remediate during fiscal year 2024 certain material weaknesses in our internal controls over financial reporting, and statements of assumption underlying any of the foregoing as well as other factors set forth under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022 and other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, we undertake no obligation to disclose any revision to these forward-looking statements whether as a result of new information, future events, or otherwise.
Engage with BIO-key:
| Facebook – Corporate: | https://www.facebook.com/BIOkeyInternational/ |
| LinkedIn – Corporate: | https://www.linkedin.com/company/bio-key-international |
| Twitter – Corporate: | @BIOkeyIntl |
| Twitter – Investors: | @BIO_keyIR |
| StockTwits: | BIO_keyIR |
Investor Contacts:
William Jones, David Collins
Catalyst IR
BKYI@catalyst-ir.com
212-924-9800
FAQ
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