Company: BKYI
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001437749-25-026549
Chunk: 9

Company: BIO KEY INTERNATIONAL INC
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 9
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 prices included within Level 1 that are either directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived from observable market data by correlation or other means.
    
   Level 3:   Inputs for the asset or liability that are not based on observable market data (unobservable inputs).     The Boumarang Shares are classified as a Level 3 asset and have been valued based on a combination of recent sales of Boumarang common stock to third parties  and a third party valuation applying a discounted cash flow analysis which included discounts for lack of control and lack of marketability, small company risk premium, and specific company risk premium based on Boumarang being an early-stage pre-revenue company. The lack of control and marketability discounts were based on published studies and transfer restrictions contained in Boumarang, Inc’s corporate governance documents.   Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Boumarang Shares  may fluctuate from period to period and the fair value of the Boumarang Shares  may differ significantly from the values that would have been used had a ready market existed for such shares and  may differ materially from the values that the Company  may ultimately realize. The early-stage pre-revenue status and unproven technology of Boumarang, Inc. raise uncertainties that could impact the recoverability of the investment in the Boumarang Shares. 
    
   ASC 321-10-35 Equity Securities - Subsequent Measurement requires annual impairment testing for equity securities without readily determinable fair values. 

       8. 
       COMMITMENTS AND CONTINGENCIES 

   Litigation
    
   From time to time, the Company  may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of  June 30, 2025, the Company was not a party to any pending lawsuits.

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       9. 
       LEASES 

   The Company’s leases office space in New Jersey, Minnesota, New Hampshire, Madrid and Hong-Kong with lease termination dates in 2027. The property leased in China is paid monthly as used, without a formal agreement. The following tables present the components of lease expense and supplemental balance