SOURCE: BIO-key International, Inc.

BIO-key International, Inc.

November 02, 2015 08:13 ET

Biometric Solutions Provider BIO-key International Completes $8.45 Million Convertible Preferred Placement

WALL, NJ--(Marketwired - Nov 2, 2015) -  BIO-key International, Inc. (OTCQB: BKYI), a leading fingerprint biometric identification software and technology provider, today reported that it has raised $8.45 million through the issuance of shares of its Series A-1 Convertible Preferred Stock. 

The preferred shares are convertible into common stock at a conversion price of $0.30 per share and were issued to a Hong Kong based security technology investor. Under the terms of the preferred shares, the investor has the right to appoint one director to BIO-key's Board. Dividends on the preferred shares accrue at 6% per annum and are payable quarterly in cash for two years and thereafter, are payable, at the option of the Company, in cash or in kind through the issuance of additional shares of common stock. Conversion is at the discretion of the investor. Net proceeds to BIO-key after expenses were approximately $8.4 million and will be used primarily to fund operations and expand the Company's sales, marketing and product development efforts.

Mike DePasquale, Chairman & CEO of BIO-key, commented, "Today's strategic investment is a transformative event for BIO-key as it substantially strengthens our financial position to aggressively pursue sales and business development opportunities on a global basis. We also plan to enhance our operations, management and finance teams and processes to support future growth.

"With a solid working capital base, we are now able to fund the completion of software development for strong support of Apple's iOS 'Touch ID' and Samsung's Android smartphone technology while also enhancing the capabilities of other BIO-key solutions and developing new turnkey hardware/software products."

Potential Technology License Agreement

The investment was made in connection with BIO-key's previously announced memorandum of understanding regarding a potential equity investment in BIO-key. The Company announced that it remains in discussions regarding this potential investment and a license agreement for development software and source code for point-to-point identification using biometric encryption and decryption technologies controlled by affiliates of the potential investor. The terms of the proposed license agreement contemplate the placement of approximately $11 million of convertible preferred shares, the entire proceeds of which would be used to fund the technology license agreement. There can be no assurance that the proposed technology license or investment transaction will be completed on terms acceptable to the Company, if at all.

Mr. DePasquale added, "Clearly the future lies in online and mobile payments and secure data and information access, yet the establishment of a robust security infrastructure has substantially lagged the proliferation of biometric-enabled devices. With today's investment, we are putting in place the capital and expanded sales reach required to accelerate the commercialization of our industry-leading biometric software, with a focus on delivering full mobile and enterprise solutions."

BIO-key also recently commenced the process of establishing a presence in Asia to support its regional business development efforts. These efforts have included creating a subsidiary in Hong Kong and opening an office in the People's Republic of China that will be staffed by small teams.

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 Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC. 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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