BIO-key Repays $2.2M Senior Secured Note
BIO-key International, Inc. (NASDAQ: BKYI) announced the full repayment of its $2.2M senior secured note, eliminating all long-term debt, and completing a $550,000 private placement of units at a premium to market. The company's CEO, Michael DePasquale, highlighted the efforts to strengthen the company's financial position, including the completion of $4.3M in equity funding over the past two months.
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.
12/21/2023 - 09:00 AM
HOLMDEL, N.J., Dec. 21, 2023 (GLOBE NEWSWIRE) -- BIO-key® (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 $2.2M senior secured note in full, eliminating all long-term debt and has completed a $550,000 private placement of units at a premium to market. Each unit in the placement included one share of common stock or a prefunded warrant in lieu thereof and one common warrant to purchase one and one half shares of common stock at a presplit price of $0.17 5 per unit ($3.15 on a post-split basis). Each common warrant is exercisable at a presplit price of $0.17 5 per share ($3.15 on a post-split basis).
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 $4.3M in equity funding over the past two months. Proceeds from these offerings have strengthened our cash and liquidity position while also enabling us to retire a $2.2M note issued and held by AJB Capital Investments.
“Given our progress to date this year, we are optimistic about our outlook for 2024. Over the last four completed quarters , we grew revenues 39% to $8.6M . and in Q3’23 we reduced our net loss to $638,000 from a net loss of $2.4M in Q3’22. Given our operating improvements and new capital, we believe we are well positioned to build on this progress in 2024. Our optimism is supported by increasing quote activity and deal sizing; our expanding base of recurring revenues; and our expanding global Channel Alliance Partner program.”
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.
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Investor Contacts William Jones, David CollinsBKYI@catalyst-ir.com
BIO-key International, Inc. (NASDAQ: BKYI) announced the full repayment of its $2.2M senior secured note, eliminating all long-term debt, and completing a $550,000 private placement of units at a premium to market.
The CEO of BIO-key International, Inc. (NASDAQ: BKYI) is Michael DePasquale, and he commented on the efforts to strengthen the company's financial position, including the completion of $4.3M in equity funding over the past two months.
The current stock price of BIO-key International, Inc. (NASDAQ: BKYI) is not provided in the press release.
