Company: BKYI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001437749-25-017209
Chunk: 37

Company: BIO KEY INTERNATIONAL INC
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 37
---
. 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 raised in such transaction and (ii) the full amount due under the 2024 Note.

       12

   The 2024 Note provides for customary events of default, including, among other things, the event of non-payment of principal, interest, fees or other amounts, a representation or warranty proving to have been incorrect when made, failure to perform or observe covenants within a specified period of time, the bankruptcy or insolvency of the Company or of all or a substantial part of its property, and monetary judgment defaults of a specified amount. Upon the occurrence of an Event of Default, Lender  may (i) cause interest on the outstanding balance to accrue at an interest rate equal to the lesser of twenty two (22%) or the maximum rate permitted under applicable law, and (ii) accelerate all amounts due under the 2024 Note plus an amount equal to (a) fifteen percent (15%) of the amount due under the 2024 Note for each default that is considered a major trigger event (as defined), and (b) five percent (5%) of the amount due under the 2024 Note for each occurrence of any default that is considered a minor trigger event (as defined), in any case not to exceed twenty five percent (25%).
    
   In the third quarter of 2024, the Company received gross proceeds of approximately $1.9 million in connection with a financing transaction (see Note 12 Warrants). In accordance with the terms of the 2024 Note, 40% of the proceeds received, or approximately $762,600, was used to prepay amounts due under the 2024 Note. 
    
   In,  January 2025, the Company entered into two Exchange Agreements with the holder of the Note and agreed to partition the original Note new Promissory Notes in the original principal amounts of $629,000 and $205,000, respectively, reducing the outstanding principal amount of the original Note to approximately $738,400.

       11. 
       EARNINGS (LOSS) PER SHARE - COMMON STOCK (“EPS”) 

   The Company’s basic EPS is calculated using net income (loss) available to common shareholders and the weighted-average number of shares outstanding during