BIO-Key International, Inc. Secures Funding of $2,002,000 for Working Capital through Senior Secured Promissory Note

Bio-Key International Inc., a leading identity and access management (IAM) platform provider, is bolstering its general working capital with the recently issued senior secured promissory note that generated $2,002,000 in funding. The company focuses on enabling secure work-from-anywhere for enterprise, education, and government customers through the use of secure multi-factor authentication (MFA).

Details of the Note

The principal amount of the Note, backed by a lien on substantially all of the company’s assets and properties, is due six months following the issuance date of December 22, 2022, with an option for a six-month extension by the company. The interest rate is set at 10% per annum for the first six months, with a 12% interest rate for months seven through twelve if the maturity date is extended.

As part of the issuance, the company provided the investor with 700,000 shares of common stock valued at $1.00 per share and a warrant to purchase 200,000 shares of common stock at an exercise price of $3.00 per share, with a five-year term. If the Note is paid in full within six months of issuance, Bio-Key has the right to repurchase 350,000 of the Commitment Shares for an aggregate payment of $1.00.

Notably, the convertible note is not immediately convertible into common stock or any other securities of the company. However, after six months and the occurrence of any events of default, the investor will have the right to convert all amounts due under the Note into shares of common stock at a conversion price equal to the 10-day volume-weighted average sales price of the company’s common stock on the date of conversion.

Company Overview

Bio-Key’s primary Bank products encompass PortalGuard, PortalGuard Identity-as-a-Service (IDaaS), WEB-key, MobileAuth, and various fingerprint scanner and FIDO-compliant hardware. Its recently acquired subsidiary, Swivel Secure, offers AuthControl Sentry, AuthControl Enterprise, and AuthControl MSP product lines, focusing on patented one-time-code extraction technology for enterprises.

Significance of the Funding

The funding comes at a time when the demand for secure IAM solutions is increasing, with more organizations seeking to secure access to online services, workstations, and mobile applications without the need for tokens or phones. The capital infusion will significantly contribute to Bio-Key’s growth and expansion efforts as it continues to solidify its presence in the biometric technology and identity access management industries.

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