Company: BKYI
Filing Date: 2025-10-03
Form Type: 8-K
Source: 0001437749-25-030493
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Company: BIO KEY INTERNATIONAL INC
Filing Date: 2025-10-03
Form: 8-K
Item: Item 2.03
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Item 2.03      Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.  

On September 30, 2025, BIO-key International, Inc. (the “ Company,” “we” or “us”) entered into and closed a note purchase agreement (the “ Purchase Agreement”) with Streeterville Capital, LLC, an existing lender of the Company (the “ Lender”), which provided for the issuance of a $1,130,000 principal amount senior secured promissory note (the “ Note”). The Note carries an original issue discount of $125,000 and the Company agreed to pay $5,000 to the Lender to cover its transaction costs, which were deducted from the proceeds of the Note resulting in a total of $1,000,000 being funded to the Company at closing. The proceeds will be used for general working capital.

The principal amount of the Note is due eighteen months following the date of issuance. Interest under the Note accrues at a rate of nine percent (9%) per annum. All repayments of principal due under the Note will be subject to an exit fee of seven percent (7%) of the principal amount being repaid (the “ Exit Fee”). Commencing six months after the date of issuance of the Note (the “ Redemption Start Date”), Lender shall have the right to redeem up to $135,000 of principal amount under the Note each month which amount plus the Exit Fee will be due and payable three (3) trading days of Lender’s delivery of a redemption notice to the Company. At the end of each month following the Redemption Start Date, if the Company has not reduced the outstanding balance under the Note by at least $135,000, then by the fifth (5th) day of the following month, the Company must either pay to Lender the difference between $135,000 and the amount, if any, redeemed in such month plus the Exit Fee, or the outstanding balance due under the Note will automatically increase by one percent (1%) as of such fifth (5th) day.

The Note is secured by a lien on substantially all of the Company’s assets and properties and can be prepaid in whole or in part without penalty at any time. In the event that the Company receives any proceeds in connection with any fundraising or financing transaction (including any warrant exercises), it will be required to make a mandatory prepayment equal to the lesser of (i) forty percent (40%) of the amount