Company: BKYI
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001437749-25-026549
Chunk: 11

Company: BIO KEY INTERNATIONAL INC
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 11
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 forty percent (40%) of the amount raised in such transaction and (ii) the full amount due under the 2024 Note.

       13

   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 Stockholders' Equity). 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 2024Note  pursuant to which it  partition from the 2024 Note two new promissory notes in the original principal amounts of $629,000 and $205,000, respectively, reducing the outstanding principal amount of the 2024 Note to approximately $738,400. In  May 2025 and in  June 2025, the Company entered into two Exchange Agreements with the holder of the Note pursuant to which it  partitioned the 2024 Note into two new promissory notes in the original principal amounts of $200,000 and $200,000, respectively, reducing the outstanding principal amount of