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.