Company: BKYI
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001437749-25-035227
Chunk: 19

Company: BIO KEY INTERNATIONAL INC
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 19
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. The New Warrants each include a beneficial ownership limitation that prevents the Investor from beneficially owning more than 4.99% of the Company’s outstanding common stock at any time. The Company realized gross proceeds under the Warrant Exercise Agreement of approximately $3.8 million, prior to deducting placement agent fees and estimated offering expenses. Net proceeds are being used for working capital and general corporate purposes, including repayment of a portion of the 2024 Note.
    
   There were 777,666 prefunded warrants exercised during the nine-month period ended  September 30, 2024 and the Company received proceeds of approximately $1,600.
    
   Partitioned Notes
    
   During the nine-month period ended  September 30, 2025, partitioned notes in the aggregate principal amount of $600,000 were exchanged for 753,084 shares of common stock (See Note 10 Note Payable).

    13.  FAIR VALUES OF FINANCIAL INSTRUMENTS 

   Cash and cash equivalents, accounts receivable, due from factor, accounts payable and accrued liabilities are carried at, or approximate, fair value because of their short-term nature. The carrying value of the Company’s government loan payable approximates fair value as the interest rate related to the financial instruments approximated market.

    14.  MAJOR CUSTOMERS AND ACCOUNTS RECEIVABLE 

   During each of the three-month periods ended  September 30, 2025, and 2024, two customers accounted for 42% and three customers accounted for 47% of the revenue, respectively. 
    
   Two customers accounted for 45% of current accounts receivable at  September 30, 2025. At  December 31, 2024, two customers accounted for 36% of current accounts receivable.

    15.  INCOME TAXES 

   United States, Hong Kong and Nigeria
   The Company recorded no income tax expense for the three and nine months ended  September 30, 2025 and 2024 because the estimated annual effective tax rate was zero. In determining the estimated annual effective income tax rate, the Company analyzes various factors, including projections of the Company’s annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the ability to use tax credits and net operating loss carry forwards, and available tax planning alternatives.
    
   As of  September 30,