BIO-key raises US$8.45 million

04/11/15

BIO-key International has raised US$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 US$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 accrue at 6% per annum and are payable quarterly in cash for two years; thereafter they 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 US$8.4 million and will be used primarily to fund operations and expand the company’s sales, marketing and product development efforts.

“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,” says Mike DePasquale, chairman and CEO of BIO-key. “We also plan to enhance our operations, management and finance teams and processes to support future growth.”

He adds: “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.”  

The investment was made in connection with BIO-key's previously announced MoU regarding a potential equity investment in the company. It says it remains in discussions regarding this potential investment and a licence 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 licence agreement include the placement of approximately US$11 million of convertible preferred shares, the entire proceeds of which would be used to fund the technology licence agreement.

Mr DePasquale says: “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 behind 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 commercialisation of our industry-leading biometric software, with a focus on delivering full mobile and enterprise solutions.”

BIO-key has also recently begun establishing a presence in Asia to support its regional business development efforts. These have included creating a subsidiary in Hong Kong and opening an office in China.

 

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BIO-key raises US$8.45 million
BIO-key raises US$8.45 million

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