HOLMDEL, N.J. - BIO-key International, Inc. (NASDAQ: NASDAQ:BKYI), a provider of identity and access management (IAM) solutions, has entered into an agreement with an institutional investor for the exercise of warrants issued in October 2023. The transaction is expected to generate approximately $1.9 million for the company, before fees and expenses.
Under the terms of the agreement, the investor will exercise warrants to purchase around 1.03 million shares of BIO-key common stock at a revised price of $1.85 per share. The deal is scheduled to close on or about September 13, 2024, contingent on customary closing conditions.
BIO-key has also agreed to issue new Series A and Series B Warrants for an equal number of shares, with the same exercise price and a five-year expiration from the date of issuance. The company commits to filing a registration statement with the SEC for the resale of the shares from these new warrants within 45 days.
Maxim (NASDAQ:MXIM) Group LLC is serving as the exclusive placement agent for this transaction. This move comes as BIO-key continues to expand its IAM solutions, including Identity-Bound Biometrics for secure and convenient access management.
The company's latest financial strategy is part of its ongoing efforts to strengthen its position in the cybersecurity market. BIO-key's IAM software is known for securing access for over thirty-five million users, offering a range of authentication options suitable for various use cases.
While this press release contains forward-looking statements, they are subject to various risks and uncertainties that could affect the company's actual results or performance. These include the ability to meet closing conditions for the transaction and general market conditions.
This financial activity is based on a press release from BIO-key International, Inc. and does not constitute an offer to sell or a solicitation of an offer to buy any securities.
In other recent news, BIO-key International has secured an order exceeding $500,000 from a government defense ministry, expanding its biometric user authentication solution to support over 33,000 users. This is part of a three-year purchasing agreement, with the defense ministry broadening the deployment of BIO-key's technology. The company anticipates additional awards as it extends the use of its solution.
In financial news, BIO-key reported Q2 2024 revenues of $1.1 million, a decline from the previous year's $1.9 million. This was attributed to delays in software license contracts and the non-renewal of a significant maintenance contract. However, the company's net loss improved to $1.7 million from $2.6 million, indicating potential for future profitability and growth.
In other developments, BIO-key's shareholders approved the board members and auditor at the Annual Meeting. The elected board members include Michael W. DePasquale, Wong Kwok Fong (Kelvin), Robert J. Michel, Emmanuel Alia, and Cameron E. Williams. Furthermore, Bush & Associates CPA LLC was ratified as BIO-key's independent registered public accounting firm for the upcoming fiscal year.
These are recent developments that demonstrate the company's resilience and potential for future growth.
InvestingPro Insights
As BIO-key International, Inc. (NASDAQ: BKYI) moves forward with its warrant exercise agreement, potential and current investors might find the following InvestingPro Data and Tips relevant to their assessment of the company's financial health and market performance.
InvestingPro Data highlights that BIO-key has a market capitalization of $5.47 million USD, reflecting the company's relative size in the market. Despite generating revenue of $6.96 million USD in the last twelve months as of Q2 2024, the company has experienced a revenue decline of 3.86% during the same period. This contraction, coupled with an operating income margin of -98.39%, underscores the challenges the company faces in achieving profitability.
InvestingPro Tips reveal that analysts are concerned about BIO-key's financial trajectory, noting that the company is quickly burning through cash and is not expected to be profitable this year. Additionally, the Relative Strength Index (RSI) suggests that the stock is currently in overbought territory, which could signal a potential reversal in the recent price trend. Despite a significant return over the last week, analysts anticipate a sales decline in the current year, which could impact the company's ability to sustain its current momentum.
For those interested in a deeper dive into BIO-key's financial outlook, there are additional InvestingPro Tips available at https://www.investing.com/pro/BKYI. These tips provide further insights into the company's valuation, stock performance, and financial stability, which can be crucial for making informed investment decisions.
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