SOURCE: BIO-key International, Inc.

BIO-key International, Inc.

November 11, 2015 08:25 ET

BIO-key Completes Investment and Software License Purchase Agreement With China Goldjoy Group Limited and Certain Investors

Advancing Its Biometric Solutions Into Mobile Payments and Into Asia

WALL, NJ--(Marketwired - Nov 11, 2015) -  BIO-key International, Inc. (OTCQB: BKYI), a leading fingerprint biometric identification software and technology provider, today reported that it has executed a strategic technology license agreement with affiliates of China Goldjoy Group Limited (CGG), formerly World Wide Touch Technology (Holdings) Limited (WWTT) (Hong Kong: 1282), and purchase agreements in connection with a $10.5 million private placement of convertible preferred equity with a wholly-owned indirect subsidiary of CGG and a third investor, and an additional $550,000 investment in its Series A-1 Convertible Preferred Shares.

In conjunction with the private placement transactions, BIO-key Hong Kong Ltd. has secured a commercial license to a portfolio of mobile and online payment and security software technologies from certain subsidiaries of CGG for a one-time payment of $12 million. BIO-key's strategy is to leverage its biometric matching solutions and WEB-key secure biometric cloud transport offerings along with the mobile and online payment technologies licensed from such subsidiaries of CGG.

Mike DePasquale, Chairman & CEO of BIO-key, commented, "Today's strategic investment and licensing agreement substantially strengthens our technology solutions portfolio to aggressively pursue sales and business development opportunities in new markets on a global basis. This along with our recent $8.45 million capital raise allows us to enhance the capabilities of other BIO-key solutions while developing new turnkey hardware/software products."

"Importantly, BIO-key has been actively supporting sales and marketing efforts for CGG's FingerQ mobile security products which utilize our biometric technology. We have already closed our first joint FingerQ solution sale for an International mobile payment application," continued DePasquale.

Yao Jianhui, Chairman and Chief Executive Officer of CGG, said, "Substantial synergy exists between our respective companies and technologies that together make us stronger competitors on the global stage. Our strategic, financial and license partnership enables research, development and sales and marketing efforts while also expanding our respective technology and customer reach. We are pleased to strengthen our involvement with BIO-key and initiate our strategic investment in the Company."

Software License Purchase Agreement:
Pursuant to the software license purchase agreement, BIO-key has secured exclusive rights to CGG's subsidiaries' development software and source code for point-to-point identification using biometric encryption & decryption technologies protected by CGG's subsidiaries' FingerQ product patent portfolio. This portfolio includes 16 patents focused on, among other things, mobile payment systems and mobile payment methods based on biometric authentication as well finger print authentication systems and a finger print authentication method based on NFC. The license arrangement also allows BIO-key to create new, innovative solutions to address the growing demand for secure mobile transactions.

Private Placement Terms:

  • $550,000 of Series A-1 Convertible Preferred Shares (with the existing Series A-1holder) convertible at $0.30 per common share at the discretion of the holder.
  • $10,500,000 of Series B-1 Convertible Preferred Shares convertible at $0.30 per common share at the discretion of the holder.
  • Dividends on the Series A-1 Shares accrue at 6% per annum and are payable quarterly in cash for the first two years and thereafter in cash or common stock at BIO-key's discretion. 
  • Dividends on the Series B-1 Shares accrue at 2.5% per annum and are payable quarterly in cash.
  • Holders of preferred shares vote on an "as converted to common stock basis" and have registration rights.
  • Holders of the Series A-1 Shares have the right to appoint one director to BIO-key's Board.
  • Holders of the Series B-1 Shares have the right to appoint one director to BIO-key's Board.

About China Goldjoy Group
China Goldjoy Group (CGG) is an investment holding company with subsidiaries principally engaged in the development of a range of high-technology products, trading and providing services with respect to automation related equipment, and strategic investment and development in technologies mainly relating to biometric security, high-speed wireless data transmission and communications, and securities investment. Since July 2013, the CGG group has expanded its biometric service offerings and launched the world's first biometric fingerprint privacy protection platform and devices -- FingerQ and PrivacQ -- to strengthen its position as the leading provider of patented biometric security solutions for both the consumer and enterprise markets. On October 8, 2015, shareholders of WWTT approved the changing of the company's name to China Goldjoy Group Limited (Hong Kong: 1282).

About BIO-key (www.bio-key.com)
BIO-key International, Inc. develops and delivers advanced fingerprint biometric identification solutions to commercial and government enterprises, integrators, and application developers. BIO-key's award winning, high performance, scalable, cost-effective and easy-to-deploy biometric finger identification technology accurately identifies and authenticates users of wireless and enterprise applications. Our solutions are embedded in OEM products and applications and used in some of the world's largest identification deployments to improve security, guarantee identity, and reduce identity theft. BIO-key's technology is offered directly or by market leading partners around the world.

BIO-key Safe Harbor Statement
Certain statements contained in this press release and in other public statements by the Company and Company officers include or may contain certain forward-looking statements. All statements other than statements of historical facts contained in this press release, including statements regarding our future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words "anticipate," "believe," "estimate," "will," "may," "future," "plan," "intend" and "expect" and similar expressions generally identify forward-looking statements. These forward-looking statements are not guarantees and are subject to known and unknown risks, uncertainties and assumptions that may cause our actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Although we believe that our plans, intentions and expectations reflected in the forward-looking statements are reasonable, we cannot be sure that they will be achieved. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: our history of losses and limited revenue; our ability to raise additional capital; our ability to protect our intellectual property; changes in business conditions and partner relationships; changes in our sales strategy and product development plans; changes in the marketplace; continued services of our executive management team; security breaches; competition with companies in the biometric technology industry; market acceptance of biometric products generally and our products under development; 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 2014 Annual Report on Form 10-K filed with the S.E.C. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the foregoing. Except as required by law, we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

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