BIO-key Repays $2.2M Senior Secured Note
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Insights
Repayment of long-term debt, particularly a $2.2M senior secured note, signifies a strategic move to strengthen BIO-key International, Inc.'s balance sheet. This action directly enhances the company's financial health by reducing interest expenses and future debt obligations. It is a positive indicator for investors, as it suggests a focus on fiscal responsibility and the potential for increased profitability.
The completion of a $550,000 private placement at a premium to market reflects investor confidence in the company's prospects. The structure of the deal, including common stock and warrants, is designed to incentivize long-term investment while potentially diluting existing shareholders. The terms of the warrants, including the exercise price, are crucial for assessing the future impact on share price and equity structure.
CEO Michael DePasquale's statement on the company's financial footing and growth trajectory for 2024 and beyond provides a forward-looking perspective. The successful equity funding of $4.3M over the past months indicates a solid cash position, which is essential for operational sustainability and investment in growth initiatives. The retirement of the note held by AJB Capital Investments removes a specific creditor relationship, potentially improving financial flexibility.
The Identity and Access Management (IAM) sector is increasingly competitive and innovation-driven. BIO-key's focus on Identity-Bound Biometric (IBB) authentication solutions positions it within a niche that is gaining traction due to heightened cybersecurity concerns. The company's ability to retire debt and secure funding is indicative of its commitment to maintaining a competitive edge within this technology segment.
Investors should consider the implications of BIO-key's financial maneuvers within the broader context of the IAM industry. The move towards passwordless, phoneless and token-less solutions is a response to market demand for more secure and user-friendly authentication methods. BIO-key's financial decisions could facilitate further research and development, enabling it to stay ahead in a market where technological advancements are rapid.
It is also important to monitor how these financial developments affect BIO-key's market share and strategic partnerships, as these are critical factors in sustaining long-term growth in the IAM industry.
The private placement of units involves complex securities regulations that must be navigated carefully. It is essential that BIO-key complies with all pertinent securities laws and regulations, including those set by the Securities and Exchange Commission (SEC) and NASDAQ listing standards. The utilization of prefunded warrants and common warrants in the transaction demonstrates a sophisticated approach to financing that aligns with legal requirements while seeking to optimize capital structure.
Investors should be aware that the issuance of new securities can lead to changes in shareholder equity and voting power. The legal structure of such deals often includes provisions that protect investors and the company, such as anti-dilution clauses and price adjustment mechanisms. These legal safeguards are designed to maintain fair market practices and investor confidence.
HOLMDEL, N.J., Dec. 21, 2023 (GLOBE NEWSWIRE) -- BIO-key® International, Inc. (NASDAQ: BKYI), an innovative provider of workforce and customer Identity and Access Management (IAM) featuring passwordless, phoneless and token-less Identity-Bound Biometric (IBB) authentication solutions, announced today that it has repaid its
BIO-key CEO Michael DePasquale commented, “We are working to put BIO-key on a strong financial footing for continued growth and improving bottom-line performance in 2024 and beyond. These efforts include the completion of
“Given our progress to date this year, we are optimistic about our outlook for 2024. Over the last four completed quarters , we grew revenues
Following the 1-for-18 reverse stock split effective with the commencement of trading on December 21, 2023, BIO-key will have approximately 1 million shares of common stock issued and outstanding and approximately 1.9 million common stock equivalents inclusive of prefunded warrants.
The securities issued in the private placement were not registered under the Securities Act of 1933, as amended. Accordingly, these securities may not be offered or sold in the United States, except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.
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 thirty-five 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 to satisfy working capital needs; our ability to continue as a going concern; our ability to regain compliance with the Nasdaq continued listing standards, market conditions and the impact of the reverse stock split on the trading price of our common stock; 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; delays in the development of products 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 Securities and Exchange Commission. 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 or 212-924-9800
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