BIO-key International Enters into $3.1 Million Warrant Inducement Transaction

Rhea-AI Summary

BIO-key (NASDAQ: BKYI) entered into a warrant inducement agreement dated Oct 27, 2025, with an existing institutional investor to induce exercise of Series A and Series B warrants originally issued Jan 15, 2025.

The investor agreed to purchase 3,091,668 shares at a reduced exercise price of $1.02 per share, producing gross proceeds of approximately $3.1 million before placement agent fees and offering expenses. Maxim Group is the exclusive placement agent.

As consideration, BIO-key will issue 6,183,336 unregistered new warrants exercisable at $1.02 per share, immediately exercisable and expiring five years from issuance, and will file an SEC registration statement covering resale of shares issuable on exercise.

Positive

• Gross proceeds of approximately $3.1 million
• Investor to purchase 3,091,668 shares at $1.02
• Issuance of 6,183,336 new warrants exercisable immediately
• New warrants expire five years from issuance

Negative

• Exercise price reduction to $1.02 may be dilutive to existing shareholders
• Gross proceeds subject to placement agent fees and offering expenses (unspecified)

Insights

Capital Markets Strategist

Raises ~$3.1 million via warrant inducement; proceeds provide near‑term liquidity but create potential dilution and contingent future share issuance.

The company negotiated a warrant inducement that converts outstanding Series A and B warrants into immediate cash of approximately $3.1 million by allowing exercise at $1.02 per share for 3,091,668 new common shares, and granted additional unregistered New Warrants for 6,183,336 shares at the same $1.02 exercise price. This transaction supplies near‑term funding and ties placement agent activity to the deal structure.

Key dependencies and risks include the dilutive impact if New Warrants are exercised, the timing and success of the planned SEC registration for resale of the New Warrant shares, and the effect of any beneficial ownership blocker provisions on when the investor may convert. The five‑year term on the New Warrants limits the window but still leaves long‑dated dilution risk.

Watch the filing and registration statement progress with the SEC and any disclosures of placement agent fees or offering expenses that reduce net proceeds; also monitor actual warrant exercises and changes to outstanding share count over the next 12 months. The immediate item to track is the SEC registration for resale and whether the investor exercises the New Warrants within five years.

HOLMDEL, N.J., Oct. 27, 2025 (GLOBE NEWSWIRE) -- BIO-key® International, Inc. (NASDAQ: BKYI), an innovator in biometric authentication and Identity and Access Management (IAM) solutions, today announced it has entered into a warrant inducement agreement with an existing institutional investor for the exercise of certain outstanding warrants that the Company issued on January 15 2025. Pursuant to the warrant inducement agreement, the investor has agreed to exercise the outstanding Series A and Series B Warrants to purchase an aggregate of 3,091,668 shares of the Company's common stock at a reduced exercise price of $1.02 per share, subject to compliance with beneficial ownership blocker provisions included in the warrants. The gross proceeds from the exercise of the warrants are expected to be approximately $3.1 million, prior to deducting placement agent fees and estimated offering expenses.

Maxim Group LLC is acting as the exclusive Placement Agent for the transaction.

In consideration for the exercise of the warrants, the Company also agreed to issue to the investor unregistered Warrants to purchase an aggregate of 6,183,336 shares of the Company's common stock with an exercise price of $1.02 per share (the “New Warrants”). The warrants are immediately exercisable, and will expire five years from the date of issuance. The Company has agreed to file a registration statement with the Securities and Exchange Commission (“SEC”) covering the resale of the shares of common stock issuable upon exercise of the New Warrants. This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, 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 state or other jurisdiction.

About BIO-key International, Inc.
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 cloud-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.

Forward-Looking Statements
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 factors set forth under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 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.

Investor Contacts
William Jones, David Collins
Catalyst IR
BKYI@catalyst-ir.com or 212-924-980

FAQ

What did BIO-key (BKYI) announce on October 27, 2025 regarding warrants?

BIO-key entered a warrant inducement agreement to have an investor exercise Series A and B warrants to buy 3,091,668 shares at $1.02 per share and issued 6,183,336 new warrants at the same price.

How much cash will BIO-key (BKYI) receive from the warrant exercise?

The exercise is expected to generate gross proceeds of approximately $3.1 million, before placement agent fees and offering expenses.

What are the terms of the new warrants issued by BIO-key (BKYI)?

The company issued 6,183,336 unregistered new warrants, exercisable immediately at $1.02 per share and expiring five years from issuance.

Will BIO-key (BKYI) register the shares related to the new warrants?

The company agreed to file a registration statement with the SEC covering resale of the shares issuable upon exercise of the new warrants.

Who is acting as placement agent for the BIO-key (BKYI) transaction?

Maxim Group LLC is acting as the exclusive placement agent for the transaction.