1 unchanged sentence
Disclosure Controls and Procedures
−Removed: Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2022.
−Removed: The term “disclosure controls and procedures,”
−Removed: as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.
−Removed: Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
−Removed: Based on the evaluation of our disclosure controls and procedures as of December 31, 2022, our CEO and CFO concluded that, as of such date, our disclosure controls and procedures were not effective over the income tax provision in our financial statements.
−Removed: Management ’
−Removed: s Annual Report on Internal Control Over Financial Reporting
−Removed: Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f) and 15d-15(f).
+Added: Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023.
+Added: The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.
+Added: Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
+Added: Based on the evaluation of our disclosure controls and procedures as of December 31, 2023, our CEO and CFO concluded that, as of such date, our disclosure controls and procedures were ineffective.
+Added: Management ’ s Annual Report on Internal Control Over Financial Reporting
+Added: Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f) and 15d-15(f).
Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations.
Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures.
−Removed: Internal control over financial reporting also can be circumvented by collusion or improper management override.
−Removed: Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting.
+Added: Internal control over financial reporting can also be circumvented by collusion or improper management override.
+Added: Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis.
However, these inherent limitations are known features of the financial reporting process.
1 unchanged sentence
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
−Removed: Under the supervision and with the participation of our management, including our CEO and CFO, we have conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022, based upon the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
−Removed: Based on this evaluation, management has concluded that our internal control over financial reporting was not effective as of December 31, 2022 as a result of certain material weaknesses discovered during the course of their review.
−Removed: In particular, in connection with the audit of our financial statements as of and for the year ended December 31, 2022, our management identified a material weakness relating to the effectiveness of management’s review and controls over the income tax provision in our financial footnotes, such that management’s review procedures were not operating at a level of precision to prevent or detect a potential material misstatement in our consolidated financial statements.
−Removed: We have also identified a lack of control over our foreign subsidiaries with respect to the filing of required tax returns on a timely basis.
−Removed: We are currently assessing the actions that need to be taken to remedy each of the material weaknesses identified above which will include promptly establishing written controls and operating procedures to address these issues.
+Added: Under the supervision and with the participation of our management, including our CEO and CFO, we have conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023, based upon the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
+Added: Based on this evaluation, management has concluded that our internal control over financial reporting was not effective as of December 31, 2023 as a result of certain material weaknesses discovered during the course of their review.
+Added: In particular, in connection with the audit of our financial statements as of and for the year ended December 31, 2023, our management identified a lack of control over properly assessing revenue, allowances for accounts receivable and certain reserves for inventory.
+Added: This resulted in certain errors in the manner in which we recognized revenue generated by our European subsidiary, Swivel Secure Europe, SA, in the first quarter of 2023.
+Added: In addition, certain allowances for accounts receivable and certain reserves for inventory were understated.
+Added: We are currently working to implement appropriate corrective actions to remediate the material weakness to strengthen our internal controls over the recording of revenues.
Each of the material weaknesses noted will only be deemed to have been remediated after the new controls and procedures have been in place for a sufficient period and management has concluded through appropriate testing that the controls are operating effectively.
1 unchanged sentence
As we are a smaller reporting company, this annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.
−Removed: Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this Annual Report on Form 10-K.
+Added: Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
−Removed: No change in our internal control over financial reporting occurred during the quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
+Added: Going forward, we will change our internal control over financial reporting for the year ended December 31, 2023 to thoroughly access all accounts for potential adjustments required for proper presentation of the value of the accounts.
OTHER INFORMATION
5 unchanged sentences
Chairman of the Board of Directors and Chief Executive Officer
−Removed: Bush, III (a)* (c)
−Removed: Michel (a) (b)*
+Added: Cameron Williams (a)* (b) (c)
+Added: Michel (a) (b)*(c)
Wong Kwok Fong (Kelvin)
Director and Vice-Chairman of the Board of Directors
−Removed: Emmanuel Alia (Manny) (b) (c)
+Added: Emmanuel Alia (b) (c)*
Chief Financial Officer
4 unchanged sentences
Nominating Committee Member
−Removed: Gilley resigned from the Board of Directors effective February 9, 2023
Indicates chair of committee
−Removed: Set forth below is a brief description of the background and business experience of our directors and executive officers for the past five years. 
+Added: Set forth below is a brief description of the background and business experience of our directors and executive officers for the past five years.
DePasquale has served as our Chief Executive Officer and a Director since January 3, 2003, and Chairman of the Board since January 29, 2014.
5 unchanged sentences
We believe Mr.
−Removed: DePasquale’s qualifications to sit on the board of directors include his extensive executive management experience in the technology sector and biometric industry expertise which strengthen the board’s collective qualifications, skills and experience.   
−Removed: Bush, III has served as a Director of the Company since January 29, 2014.
−Removed: Since 2009, Mr.
−Removed: Bush has provided business consulting services through his firm, Tom Bush Consulting.
−Removed: Prior to that, Mr.
−Removed: Bush served with the Federal Bureau of Investigation for over 33 years.
−Removed: Bush joined the FBI in September 1975, ultimately becoming the Director of the CJIS division, with over 2,500 employees and a budget of approximately one billion dollars. 
−Removed: During this time, Mr.
−Removed: Bush provided critical services in support of the criminal justice community, including two significant IT projects, Next Generation Identification and N-Dex, which were awarded by CJIS during his tenure at the FBI.
−Removed: Bush has received many awards during his career, most notably a Presidential Rank Award for Meritorious Service in 2007.
+Added: DePasquale’s qualifications to sit on the board of directors include his extensive executive management experience in the technology sector and biometric industry expertise which strengthen the board’s collective qualifications, skills and experience.
+Added: Williams was appointed Director of the Company on June 2, 2023.
+Added: Williams has over 40 years of financial and executive management experience.
+Added: Since 2014, he has served as the principal of CEW Advisory Services, a consulting firm he founded which provides strategic planning and related services to the consumer lending industry.
+Added: He previously founded CEW Solutions which provided fraud investigation services to insurance companies, law firms, and third-party administrators.
+Added: From 2007 to 2009, Mr.
+Added: Williams served as COO of Asta Funding, Inc., a publicly traded diversified financial services company where he was responsible for the sourcing and financial analysis of distressed consumer assets.
+Added: From 1998 to 2007, Mr.
+Added: Williams served as President of Popular Financial Holdings, an affiliate of Popular, Inc., a $36 billion banking organization.
+Added: Williams began his career in the banking industry holding financial management positions with Security Pacific Financial Services, BankAmerica Financial, Inc., and Security Pacific Financial Services System, Inc.
+Added: Williams earned a Bachelor’s in Accounting and completed graduate coursework at San Diego State University.
We believe Mr.
−Removed: Bush’s qualifications to sit on the board of directors include his extensive experience in law enforcement, security matters, and the use of biometric technologies in the government sector, which provide the board with a unique perspective on security and public sector matters. 
−Removed: Michel  has served as a Director of the Company since April 10, 2017.
+Added: Williams’ extensive financial and executive management experience in a variety of industries strengthens the Board’s collective qualifications, skills, and experience.
+Added: Michel has served as a Director of the Company since April 10, 2017.
He has over 30 years of accounting and financial management experience.
2 unchanged sentences
Prior to Daxor, from November, 2017 until September 2018, Mr.
−Removed: Michel served as the CFO of Roadway Moving, Inc., a transportation, moving and storage company located in New York City. 
+Added: Michel served as the CFO of Roadway Moving, Inc., a transportation, moving and storage company located in New York City.
Michel spent 15 years at Asta Funding, Inc.
1 unchanged sentence
Michel is a certified public accountant, earned an MBA in Taxation from St.
−Removed: John’s University, and a BS in Business Administration from Villanova University.
+Added: John’s University, and a BS in Business Administration from Villanova University.
We believe Mr.
−Removed: Michel’s qualifications to sit on the board of directors include his substantial experience in accounting and financial management for public companies which provide the board with a deep knowledge of financial and SEC reporting and strengthen the board’s collective qualifications, skills, and experience.
−Removed: Wong Kwok Fong (Kelvin)  has served as a Director of the Company since December 4, 2015, as Managing Director of our Hong Kong Subsidiary since August 2016, and as Vice-Chairman of the Board of Directors since March 2019.
+Added: Michel’s qualifications to sit on the board of directors include his substantial experience in accounting and financial management for public companies which provide the board with a deep knowledge of financial and SEC reporting and strengthen the board’s collective qualifications, skills, and experience.
+Added: Wong Kwok Fong (Kelvin) has served as a Director of the Company since December 4, 2015, as Managing Director of our Hong Kong Subsidiary since August 2016, and as Vice-Chairman of the Board of Directors since March 2019.
He is the co-founder of China Goldjoy Group (previously World Wide Touch Technology Holdings Limited), a company listed on The Stock Exchange of Hong Kong.
3 unchanged sentences
Kelvin brings over 25 years of senior management experience in manufacturing, supply chain, and marketing functions in the electronics and technology industries, including establishing manufacturing plants in Hong Kong and China, and building an extensive network in the electronics and technology industries.
−Removed: We believe Kelvin’s qualifications to sit on the board of directors include his substantial experience in the technology industry, including biometrics and payment systems, and serving the Asian markets, which broaden and strengthen the board’s collective qualifications, skills, and experience.
−Removed: Emmanuel Alia (Manny) was appointed Director of the Company on April 3, 2020.
+Added: We believe Kelvin’s qualifications to sit on the board of directors include his substantial experience in the technology industry, including biometrics and payment systems, and serving the Asian markets, which broaden and strengthen the board’s collective qualifications, skills, and experience.
+Added: Emmanuel Alia was appointed Director of the Company on April 3, 2020.
Since 2018, Mr.
1 unchanged sentence
From 2011 to 2018, Mr.
−Removed: Alia served as an Executive Director at the Corporate and Investment division of JPMorgan, and as a Senior Vice-President at CHASE Bank’s Consumer and Community Banking specializing in the financial and banking services industry and opportunities in Africa.
−Removed: Alia’s tenure with JPMorgan, he served as head of WholeSale Operations in the Receivables Operations of the Global banking operations in the US and Canada, head of Retail Banking in the Greater Detroit area, and head of branches in the New York and New Jersey areas.
+Added: Alia served as an Executive Director at the Corporate and Investment division of JPMorgan, and as a Senior Vice-President at CHASE Bank’s Consumer and Community Banking specializing in the financial and banking services industry and opportunities in Africa.
+Added: Alia’s tenure with JPMorgan, he served as head of Wholesale Operations in the Receivables Operations of the Global banking operations in the US and Canada, head of Retail Banking in the Greater Detroit area, and head of branches in the New York and New Jersey areas.
For two years Mr.
−Removed: Alia was co-chair of the Black Organizational Leadership Development, an employee networking group in JPMorgan that works with firm’s leadership to strengthen the firm’s message, strategies and community outreach globally.
−Removed: Alia received a Bachelor of Arts in Accounting from SouthEastern University and a Master’s of Business Administration (MBA) from Cornell University.
+Added: Alia was co-chair of the Black Organizational Leadership Development, an employee networking group in JPMorgan that works with firm’s leadership to strengthen the firm’s message, strategies and community outreach globally.
+Added: Alia received a Bachelor of Arts in Accounting from Southeastern University and a Master’s of Business Administration (MBA) from Cornell University.
We believe Mr.
−Removed: Alia’s qualifications to sit on the board of directors include his extensive industry experience and connection and networking abilities in the African communities and markets which further broaden and strengthen the board’s collective qualifications, skills, and experience.
+Added: Alia’s qualifications to sit on the board of directors include his extensive industry experience and connection and networking abilities in the African communities and markets which further broaden and strengthen the board’s collective qualifications, skills, and experience.
Executive Officers
−Removed: Welch  has served as the Chief Financial Officer of the Company since December 21, 2009.
+Added: Welch has served as the Chief Financial Officer of the Company since December 21, 2009.
Welch joined the Company in 2007 as Corporate Controller.
Prior to joining the Company, Ms.
−Removed: Welch has held senior financial management positions in various industries, including software and manufacturing. 
−Removed: Welch has a Bachelor’s degree in Accounting from Franklin Pierce University.
−Removed: LaCous  has served as Chief Technology Officer of the Company since March 13, 2014, as Senior Vice President of Technology & Development since 2012, and as our Vice President of Technology and Development since 2000.
+Added: Welch has held senior financial management positions in various industries, including software and manufacturing.
+Added: Welch has a bachelor’s degree in accounting from Franklin Pierce University.
+Added: LaCous has served as Chief Technology Officer of the Company since March 13, 2014, as Senior Vice President of Technology & Development since 2012, and as our Vice President of Technology and Development since 2000.
LaCous has over 35 years of product/project management, solution architecture, software development, team leadership and customer relations experience, with a background that includes successfully bringing numerous innovative products and technologies to market, including automated voice response systems, automated building control systems, software piracy protection, internet training materials and testing, WYSIWYG page layout and design software, image scanning / recognition software and systems, biometric security systems and algorithms, automated national ID systems using biometrics, and mobile applications with secure frameworks.
−Removed: LaCous has been a speaker at multiple events/conferences and has worked with teams around the globe bringing biometric technology deployments to life. 
+Added: LaCous has been a speaker at multiple events/conferences and has worked with teams around the globe bringing biometric technology deployments to life.
LaCous is the author of eight (8) US patented technologies, multiple international patents and lead the engineering team in developing other patents and inventive technologies.
−Removed: LaCous earned a Bachelor’s in Computer Science, with mathematics and physics from North Dakota State University.
−Removed: Sullivan  has served as BIO-key’s Senior Vice President of Strategy and Compliance and BIO-key’s Chief Legal Officer since February 2020, as Senior Vice President of Strategy and Business Development from April 2012 through December 2018, and the dual role as Senior Vice President of Global Sales from August 2015 through December of 2016.
+Added: LaCous earned a bachelor’s degree in Computer Science, with mathematics and physics from North Dakota State University.
+Added: Sullivan has served as BIO-key’s Senior Vice President of Strategy and Compliance and BIO-key’s Chief Legal Officer since February 2020, as Senior Vice President of Strategy and Business Development from April 2012 through December 2018, and the dual role as Senior Vice President of Global Sales from August 2015 through December of 2016.
Sullivan is a recognized expert in privacy, cybersecurity, and biometric authentication for workforce and consumer applications.
During his twenty years with the Company, Mr.
−Removed: Sullivan has directly worked with dozens of the Company’s customers, including AT&T, Israel Defense Forces, LexisNexis, NCR and Omnicell, as well as large-scale biometric-centered identity management projects that interface daily with millions of corporate and consumer users.
−Removed: Sullivan earned a Juris Doctor with Honors from Georgia State University College of Law, is a member of the Georgia Bar, and enrolled to practice before the IRS.
+Added: Sullivan has directly worked with dozens of the Company’s customers, including AT&T, Israel Defense Forces, LexisNexis, NCR and Omnicell, as well as large-scale biometric-centered identity management projects that interface daily with millions of corporate and consumer users.
+Added: Sullivan earned a Juris Doctor with Honors from Georgia State University College of Law, is a member of the Georgia Bar, and enrolled to practice before the IRS.
Sullivan has an undergraduate degree in Computer Science from Brown University and has over 26 years of experience in IT projects and implementation, including directly working with security and identity management solutions at the Company, Computer Associates, Platinum Technology, and Memco Software.
1 unchanged sentence
Audit Committe e
−Removed: Our audit committee was comprised of Robert J.
−Removed: Michel (Chair), Pieter Knook, and Emmanuel Alia until May 13, 2023, when Pieter Knook resigned from the Board of Directors.
−Removed: Michel and Emmanuel Alia both meet the independence standards for purposes of serving on an audit committee established by NASDAQ and under the Exchange Act.
+Added: Our audit committee is comprised of Robert J.
+Added: Michel (Chair), Cameron Williams, and Emmanuel Alia each of whom meets the independence standards for purposes of serving on an audit committee established by NASDAQ and under the Exchange Act.
Our audit committee (i) assists the board of directors in its oversight of the integrity of our financial statements, compliance with legal and regulatory requirements, and corporate policies and controls, (ii) has the sole authority to retain and terminate our independent registered public accounting firm, approve all auditing services and related fees and the terms thereof, and pre-approve any non-audit services to be rendered by our independent registered public accounting firm, and (iii) is responsible for confirming the independence and objectivity of our independent registered public accounting firm.
1 unchanged sentence
Our board of directors has determined that Robert J.
−Removed: Michel qualifies as an “audit committee financial expert,”
−Removed: as such term is defined in Item 407 of Regulation S-K.
+Added: Michel qualifies as an “audit committee financial expert,” as such term is defined in Item 407 of Regulation S-K.
Our audit committee operates under a written charter that is reviewed annually.
−Removed: The charter is available on our website at 
−Removed: www.bio-key.com .
+Added: The charter is available on our website at www.bio-key.com .
Compensation Committee
−Removed: Our compensation committee is comprised of Thomas Bush, III (Chair) and Robert Michel, both of whom meet the independence standards established by NASDAQ and under the Exchange Act.
−Removed: The compensation committee’s duties include overseeing our overall compensation philosophy, policies and programs.
+Added: Our compensation committee is comprised of Cameron Williams (Chair) and Robert Michel, both of whom meet the independence standards established by NASDAQ and under the Exchange Act.
+Added: The compensation committee’s duties include overseeing our overall compensation philosophy, policies and programs.
This includes reviewing and analyzing the design and function of our various compensation components, establishing salaries, incentives and other forms of compensation for officers and non-employee directors, and administering our equity incentive plan.
1 unchanged sentence
Our compensation committee operates under a written charter that is reviewed annually.
−Removed: The charter is available on our website at 
−Removed: www.bio-key.com .
+Added: The charter is available on our website at www.bio-key.com .
Code of Ethics
1 unchanged sentence
Our Code of Ethics is designed to deter wrongdoing and promote:
−Removed: (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
−Removed: (ii) full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in our other public communications;
−Removed: (iii) compliance with applicable governmental laws, rules, and regulations;
−Removed: (iv) the prompt internal reporting of violations of the code to an appropriate person or persons identified in the code;
−Removed: and (v) accountability for adherence to the code.  We intend to disclose amendments or waivers of the Code of Ethics on our website within four business days.  Any person may obtain a copy of our Code of Ethics free of charge by sending a written request for such to the attention of the Chief Financial Officer of the Company, 3349 Highway 138, Building A Suite E, Wall, NJ 07719.  
+Added: (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
+Added: (ii) full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in our other public communications;
+Added: (iii) compliance with applicable governmental laws, rules, and regulations;
+Added: (iv) the prompt internal reporting of violations of the code to an appropriate person or persons identified in the code;
+Added: and (v) accountability for adherence to the code.
+Added: We intend to disclose amendments or waivers of the Code of Ethics on our website within four business days.
+Added: Any person may obtain a copy of our Code of Ethics free of charge by sending a written request for such to the attention of the Chief Financial Officer of the Company, 101 Crawfords Corner Road, Suite 4116, Holmdel, NJ 07733.
Term of Office
2 unchanged sentences
Delinquent Section 16(a) Reports
−Removed: Reports of all transactions in our common stock by officers, directors and ten percent (10%) stockholders are required to be filed with the SEC pursuant to Section 16(a) of the Exchange Act.
−Removed: Based solely on our review of copies of the reports received, or representations of such reporting persons, we believe that during the year ended December 31, 2022, all Section 16(a) filing requirements applicable to our officers, directors and ten percent (10%) stockholders were satisfied in a timely fashion, except for four late Form 4 filings including one late Form 4 filing by Mr.
−Removed: Michel for payment for a BOD committee meeting, and one each for Mr.
−Removed: Sullivan, Mr.
−Removed: DePasquale and Ms.
−Removed: LaCous reporting shares acquired under the BIO-key International, Inc.
−Removed: 2021 Employee Stock Purchase Plan.
+Added: Reports of all transactions in our common stock by officers, directors and ten percent (10%) stockholders are required to be filed with the SEC pursuant to Section 16(a) of the Exchange Act.
+Added: Based solely on our review of copies of the reports received, or representations of such reporting persons, we believe that during the year ended December 31, 2023, all Section 16(a) filing requirements applicable to our officers, directors and ten percent (10%) stockholders were satisfied in a timely fashion,
EXECUTIVE COMPENSATION
−Removed: The following table sets forth a summary of the compensation paid to or accrued by our chief executive officer and the two most highly compensated executive officers other than our chief executive officer, for the fiscal years ended December 31, 2022 and 2021:
+Added: The following table sets forth a summary of the compensation paid to or accrued by our chief executive officer and the two most highly compensated executive officers other than our chief executive officer, for the fiscal years ended December 31, 2023 and 2022:
SUMMARY COMPENSATION TABLE
1 unchanged sentence
Chief Executive Officer
−Removed: Chief Technology Officer
+Added: Chief Financial Officer
Chief Legal Officer
9 unchanged sentences
Cash compensation is comprised of base salary and an annual performance-based cash bonus opportunity.
−Removed: The compensation committee generally seeks to set a named executive officer’s targeted total cash compensation opportunity within a range that is the average of the applicable peer company and/or general industry compensation survey data, adjusted as appropriate for individual performance and internal pay equity and labor market conditions.
+Added: The compensation committee generally seeks to set a named executive officer’s targeted total cash compensation opportunity within a range that is the average of the applicable peer company and/or general industry compensation survey data, adjusted as appropriate for individual performance and internal pay equity and labor market conditions.
In setting cash compensation levels, we favor a balance in which base salaries are generally targeted at slightly below the peer average and a bonus opportunity that is targeted at slightly above the average.
−Removed: The base salary of our CEO has not been increased since 2018.
−Removed: Effective January 1, 2021, we increased the base salary of Mr.
−Removed: Sullivan to $225,000 to compensate for the fact that in connection with his promotion to Chief Legal Officer, he would be limited to sales commissions on only three of his existing long term accounts.  Effective January 1, 2022, we increased the base compensation of Mr.
+Added: Effective January 16, 2023, we decreased the base compensation of Mr.
+Added: DePasquale, Mr.
Sullivan and Ms.
+Added: Welch as part of the revised budget for the year.
+Added: Effective March 1, 2022, we increased the base compensation of Mr.
+Added: DePasquale, Mr.
+Added: Sullivan and Ms.
Performance-based bonuses have historically been based upon the achievement of certain revenue milestones established by the compensation committee.
−Removed: The committee believes that this higher emphasis on performance-based cash bonuses places an appropriate linkage between a named executive officer’s pay, his or her individual performance, and the achievement of specific business goals by placing a higher proportion of annual cash compensation at risk, thereby aligning executive opportunity with the interests of stockholders.
+Added: The committee believes that this higher emphasis on performance-based cash bonuses places an appropriate linkage between a named executive officer’s pay, his or her individual performance, and the achievement of specific business goals by placing a higher proportion of annual cash compensation at risk, thereby aligning executive opportunity with the interests of stockholders.
We also include an equity component as part of our compensation package because we believe that equity-based compensation aligns the long-term interests of our named executive officers with those of stockholders.
−Removed: We did not issue any stock options or restricted stock awards to our named executive officers during 2021. 
−Removed: In 2022, we issued restricted stock awards to each of our named executive officers in 
−Removed: recognition of the revenue growth of the Company in 2021 and successful integration of Portal Guard.
+Added: In 2022 and 2023, we issued restricted stock awards to each of our named executive officers in recognition of the revenue growth of the Company in 2021 and successful integration of Portal Guard, and revenue growth of the Company in 2022 and successful integration of Swivel Secure, respectively.
These cash and equity compensation components of pay are supplemented by various benefit plans that provide health, life, accident, disability and severance benefits, most of which are the same as the benefits provided to all of our US based employees.
Employment Agreements
−Removed: On March 26, 2010, we entered into an employment agreement, effective as of March 25, 2010, with Michael W.
+Added: On March 26, 2010, we entered into an employment agreement, effective as of March 25, 2010, with Michael W.
DePasquale to serve as our Chief Executive Officer until March 24, 2011.
The agreement automatically renews for subsequent one-year terms, unless the employment relationship is terminated by either party, or modified in accordance with the terms and conditions of the agreement.
−Removed: Since 2018, Mr. DePasquale’s annual base salary has been $275,000, subject to adjustment by the compensation committee.
−Removed: In addition to the base salary, a “Performance Bonus”
−Removed: may be awarded to Mr. DePasquale on the basis of the Company achieving certain corporate and strategic performance goals, as determined by the compensation committee in its sole discretion.
−Removed: The employment agreement contains standard and customary confidentiality, non-solicitation and “work made for hire”
−Removed: provisions as well as a covenant not to compete which prohibits Mr. DePasquale from doing business with any current or prospective customer of the Company or engaging in a business competitive with that of the Company during the term of his employment and for the one-year period thereafter.
−Removed: This agreement also contains a number of termination and change in control provisions as described under the captions “
−Removed: Termination Arrangements ” and “
−Removed: Change in Control Arrangements ” below.
+Added: Since 2018, Mr.
+Added: DePasquale’s annual base salary has been $275,000, subject to adjustment by the compensation committee.
+Added: In addition to the base salary, a “Performance Bonus” may be awarded to Mr.
+Added: DePasquale on the basis of the Company achieving certain corporate and strategic performance goals, as determined by the compensation committee in its sole discretion.
+Added: The employment agreement contains standard and customary confidentiality, non-solicitation and “work made for hire” provisions as well as a covenant not to compete which prohibits Mr.
+Added: DePasquale from doing business with any current or prospective customer of the Company or engaging in a business competitive with that of the Company during the term of his employment and for the one-year period thereafter.
+Added: This agreement also contains a number of termination and change in control provisions as described under the captions “ Termination Arrangements ” and “ Change in Control Arrangements ” below.
On April 5, 2017, we entered into an employment agreement with James Sullivan.
1 unchanged sentence
Since 2021, Mr.
−Removed: Sullivan’s annual base salary has been $225,000, subject to adjustment by the compensation committee.
+Added: Sullivan’s annual base salary has been $225,000, subject to adjustment by the compensation committee.
The agreement contains standard and customary confidentiality, technical invention provisions as well as non-competition and non-solicitation covenants which prohibit Mr.
Sullivan from doing business with any current or prospective customer of the Company or engaging in any business competitive with that of the Company during the term or his employment and for the one-year period thereafter.
−Removed: The agreement also contains a number of termination provisions as described under the caption “
−Removed: Termination Agreements ”
−Removed: On November 20, 2001, we entered into an employment agreement with Mira LaCous.
−Removed: The agreement automatically renews for subsequent one-year terms, unless terminated by the Company upon at least one-month prior written notice which is treated as termination without cause and provides for a discretionary bonus which shall not exceed 50% of base salary.
−Removed: The agreement contains standard and customary confidentiality, technical invention provisions as well as non-competition and non-solicitation covenants which prohibit Ms.
−Removed: LaCous from doing business with any current or prospective customer of the Company or engaging in any business competitive with that of the Company during the term or her employment and for the one-year period thereafter.
−Removed: The agreement also contains a number of termination provisions as described under the caption “
−Removed: Termination Agreements ”
+Added: The agreement also contains a number of termination provisions as described under the caption “ Termination Agreements ” below.
+Added: On May 15, 2013, we entered into an employment agreement with Cecilia Welch to serve as the Chief Financial Officer of the Company until May 2014.
+Added: The agreement automatically renews for subsequent one-year terms, unless the employment relationship is terminated by either party, or modified in accordance with the terms and conditions of the agreement.
+Added: The employment agreement contains standard and customary confidentiality, technical invention provisions, as well as a covenant not to compete, which prohibits Ms.
+Added: Welch from doing business with any current or prospective customer of the Company or engaging in a business competitive with that of the Company during the term of her employment and for the one-year period thereafter.
+Added: This agreement also contains a number of termination provisions as described in “Termination and Change in Control Arrangements” in this Item.
Stock Option Grants and Restricted Stock Awards
In the event of any change in the outstanding shares of our common stock by reason of a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, transfer of assets, reorganization, conversion or what the board deems to be similar circumstances, the number and kind of shares subject to outstanding options and restricted stock awards, and the exercise price of such options shall be appropriately adjusted.
−Removed: Restricted Furthermore, option agreements and restricted stock award agreements contain change of control provisions as described under the caption “
−Removed: Change in Control Provisions ”
+Added: Restricted Furthermore, option agreements and restricted stock award agreements contain change of control provisions as described under the caption “ Change in Control Provisions ” below.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
−Removed: The following table sets forth for each named executive officer, information regarding outstanding equity awards as at December 31, 2022.
+Added: The following table sets forth for each named executive officer, information regarding outstanding equity awards as at December 31, 2023.
Option Awards
of stock that
−Removed: Calculated based on the closing market price of the Company’s common stock on December 31, 2022 of $0.59 per share.
+Added: Calculated based on the closing market price of the Company’s common stock on December 31, 2023 of $3.00 per share.
Narrative Disclosure to Outstanding Equity Awards at Fiscal Year End Table
10 unchanged sentences
We may terminate our employment agreement with Ms.
−Removed: LaCous at any time with or without cause.
+Added: Welch at any time with or without cause.
In the event of termination by us without cause, we will continue to pay Ms.
−Removed: LaCous her then current base salary for nine months from the date of such termination.
+Added: Welch her then current base salary for the greater of six months from the date of such termination or the number of months remaining until the end of the term of the Agreement.
Change in Control Provisions
−Removed: Our 2015 Equity Incentive Plan (the “Plan”) provides for the acceleration of vesting of unvested options and termination of any restriction or forfeiture provisions applicable to restricted stock awards upon a “Change in Control”
−Removed: of the Company.
−Removed: A Change in Control is defined in the Plans to include (i) a sale or transfer of substantially all of the Company’s assets;
−Removed: (ii) the dissolution or liquidation of the Company;
−Removed: (iii) a merger or consolidation to which the Company is a party and after which the prior stockholders of the Company hold less than 50% of the combined voting power of the surviving corporation’s outstanding securities;
−Removed: (iv) the incumbent directors cease to constitute at least a majority of the Board of Directors;
−Removed: or (v) a change in control of the Company which would otherwise be reportable under Section 13 or 15(d) of the Exchange Act.
−Removed: In the event of a “Change In Control”
−Removed: the Plan provides for the immediate vesting of all options issued thereunder and termination of all forfeiture provisions applicable to restricted stock award issued thereunder.
+Added: Our 2015 Equity Incentive Plan (the “Plan”) provides for the acceleration of vesting of unvested options and termination of any restriction or forfeiture provisions applicable to restricted stock awards upon a “Change in Control” of the Company.
+Added: A Change in Control is defined in the Plans to include (i) a sale or transfer of substantially all of the Company’s assets;
+Added: (ii) the dissolution or liquidation of the Company;
+Added: (iii) a merger or consolidation to which the Company is a party and after which the prior stockholders of the Company hold less than 50% of the combined voting power of the surviving corporation’s outstanding securities;
+Added: (iv) the incumbent directors cease to constitute at least a majority of the Board of Directors;
+Added: or (v) a change in control of the Company which would otherwise be reportable under Section 13 or 15(d) of the Exchange Act.
+Added: In the event of a “Change In Control” the Plan provides for the immediate vesting of all options issued thereunder and termination of all forfeiture provisions applicable to restricted stock award issued thereunder.
Options issued to executive officers outside of the Plans contain change in control provisions substantially similar to those contained in the Plans.
2 unchanged sentences
DePasquale is not offered continued employment with us or any successor, or within five years following such Change of Control, we or any successor terminate Mr.
−Removed: DePasquale’s employment without cause.
+Added: DePasquale’s employment without cause.
If this occurs, then we will pay Mr.
1 unchanged sentence
DIRECTOR COMPENSATION
−Removed: The following table sets forth for each director, information regarding their compensation for the year ended December 31, 2022:
+Added: The following table sets forth for each director, information regarding their compensation for the year ended December 31, 2023:
Bush, III (3)
−Removed: Thomas Gilley (3)(4)
Pieter Knook (4)
−Removed: Emmanuel Alia (6)
+Added: Emmanuel Alia (6)
+Added: Cameron Williams (7)
DePasquale and Kelvin Wong have been omitted from the above table because they do not receive any additional compensation for serving on our Board of Directors.
The aggregate fair value of the common stock issued was calculated based on the closing price of our common stock on the date of issuance in accordance with FASB ASC 718.
−Removed: At December 31, 2022, Messrs.
−Removed: Bush, Gilley, Knook and Michel each held options to purchase 2,064 shares of common stock and each held 5,000 shares restricted common stock.
−Removed: Gilley resigned from the Board of Directors on February 9, 2023.
+Added: Bush resigned from the Board of Directors effective November 8, 2023.
Knook resigned from the Board of Directors effective May 13, 2023
At December 31, 2023, Mr.
−Removed: Alia held options to purchase 313 shares of common stock and held 5,000 shares restricted common stock.
+Added: Michel held options to purchase 117 shares of common stock and held 278 shares of restricted common stock.
+Added: At December 31, 2023, Mr.
+Added: Alia held options to purchase 18 shares of common stock and held 278 shares of restricted common stock.
+Added: Williams joined the Board of Directors on June 2, 2023.
+Added: At December 31, 2023 Mr.
+Added: Williams held 278 shares of restricted common stock.
Narrative Disclosure to Director Compensation Table
−Removed: During 2022, we had a policy to pay each non-employee director $3,000 per board meeting, $1,000 per telephonic board meeting, and $1,000 per board committee meeting attended.
+Added: During 2023, we had a policy to pay each non-employee director $3,000 per board meeting, $1,000 per telephonic board meeting, and $1,000 per board committee meeting attended.
Fees for attendance at regular quarterly board meetings held during the first three quarters of each fiscal year are paid through the issuance of common stock and payments for the last meeting of the year are paid in cash or, at the option of the director, in shares of common stock.
1 unchanged sentence
All directors will be indemnified by us for actions associated with being a director to the fullest extent permitted under Delaware law.
−Removed: We reimburse each of our non-employee directors for their reasonable expenses incurred in connection with attending meetings of the board of directors and related committees. 
+Added: We reimburse each of our non-employee directors for their reasonable expenses incurred in connection with attending meetings of the board of directors and related committees.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
1 unchanged sentence
The following table also sets forth, as of such date, the beneficial ownership of our common stock by all of our current executive officers and directors, both individually and as a group.
−Removed: The beneficial owners and amount of securities beneficially owned have been determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as awarded, and, in accordance therewith, include all shares of our common stock that may be acquired by such beneficial owners within 60 days of May 30, 2023 upon the exercise or conversion of any options, warrants or other convertible securities.
−Removed: This table has been prepared based on 9,234,833 shares of common stock outstanding on May 30, 2023.
−Removed: Name and Address of Beneficial Owner (1)
+Added: The beneficial owners and number of securities beneficially owned have been determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as awarded, and, in accordance therewith, include all shares of our common stock that may be acquired by such beneficial owners within 60 days of June 4, 2024 upon the exercise or conversion of any options, warrants or other convertible securities.
+Added: This table has been prepared based on 1,814,228
Amount and Nature
of Beneficial
+Added: Name and Address of Beneficial Owner (1)
Directors and Executive Officers
2 unchanged sentences
All officers and directors as a group (eight (8) persons)
−Removed: Beneficial Owners
−Removed: Lind Global Micro Fund, LP
−Removed: AJB Capital Investments LLC
−Removed: Unless otherwise indicated, the address of each person listed below is c/o BIO-key International, Inc., 3349 Highway 138, Building A, Suite E, Wall, NJ 07719.
−Removed: Includes 39,584 shares issuable on exercise of options and 39,125 shares of restricted stock of which 24,709 remain subject to vesting.
+Added: Beneficial Owner
+Added: Armistice Capital, LLC
+Added: Unless otherwise indicated, the address of each person listed below is c/o BIO-key International, Inc., 101 Crawfords Corner Rd, Suite 4116, Holmdel, NJ 07733
+Added: Includes 464 shares issuable on exercise of options, 9,167 shares issuable upon exercise of warrants, and 4,121 shares of restricted stock of which 3,242 remain subject to vesting.
Includes 348 of shares issuable upon exercise of options and 3,565 shares of restricted stock of which 2,779 remain subject to vesting.
Includes 174 of shares issuable upon exercise of options and 1,203 shares of restricted stock of which 834 remain subject to vesting.
+Added: Includes 348 of shares issuable on exercise of options, 12,667 shares issuable upon exercise of warrants, and 3,565 shares of restricted stock of which 2,779 remain subject to vesting.
Includes 470 of shares issuable on exercise of options and 278 shares of restricted stock of which 186 remain subject to vesting.
−Removed: Includes 1,960 of shares issuable on exercise of options and 5,000 shares of restricted stock of which 3,334 remain subject to vesting.
−Removed: Does not include 104 shares issuable upon exercise of options subject to vesting.
−Removed: Includes 1,960 of shares issuable on exercise of options and 5,000 shares of restricted stock of which 3,334 remain subject to vesting.
−Removed: Does not include 104 shares issuable upon exercise of options subject to vesting.
−Removed: Includes 209 of shares issuable on exercise of options and 5,000 shares of restricted stock of which 3,334 remain subject to vesting.
−Removed: Does not include 104 shares issuable upon exercise of options subject to vesting.
+Added: Includes 278 shares of restricted stock of which 278 remain subject to vesting.
+Added: Includes 278 of shares of restricted stock of which 278 remain subject to vesting.
Includes 464 of shares issuable on exercise of options and 787 shares of restricted stock of which 464 remain subject to vesting.
The address of Kelvin is Flat C, 27/F, Block 5, Grand Pacific Views, Siu Lam, Hong Kong N7.
−Removed: Consists of shares issuable upon exercise of warrants.
−Removed: The address of Lind Global Capital Micro Fund, LP is 444 Madison Ave, Floor 41, New York, NY 10022
−Removed: Includes 200,000 shares issuable upon exercise of warrants. 
−Removed: The address of AJB Capital Investments LLC is 4700 Sheridan Street, Suite J, Hollywood, FL 33021.
+Added: Armistice Capital, LLC (“Armistice Capital”) is the investment manager of Armistice Capital Master Fund Ltd.
+Added: (the “Master Fund”), the direct holder of the 121,494 shares of common stock, and pursuant to an Investment Management Agreement, Armistice Capital exercises voting and investment power over the securities held by the Master Fund and thus may be deemed to beneficially own the securities held by the Master Fund.
+Added: Steven Boyd, as the managing member of Armistice Capital, may be deemed to beneficially own the securities held by the Master Fund.
+Added: The Master Fund specifically disclaims beneficial ownership of the securities directly held by it by virtue of its inability to vote or dispose of such securities as a result of its Investment Management Agreement with Armistice Capital.
+Added: The address of Armistice Capital, LLC is 510 Madison Avenue, 7th Floor, New York, NY 10022.
EQUITY COMPENSATION PLAN INFORMATION
−Removed: The following table sets forth, as of December 31, 2022, information with respect to securities authorized for issuance under equity compensation plans.
−Removed: On January 27, 2016, the stockholders approved the 2015 Equity Incentive Plan, which was amended on June 13, 2019 by vote of stockholders, and amended and restated by vote of stockholders on June 18, 2021 (as amended and restated, the “2015 Plan”).
+Added: The following table sets forth, as of December 31, 2023, information with respect to securities authorized for issuance under equity compensation plans.
+Added: On January 27, 2016, the stockholders approved the 2015 Equity Incentive Plan, which was amended on June 13, 2019 by vote of stockholders, and amended and restated by vote of stockholders on June 18, 2021 (as amended and restated, the “2015 Plan”).
The 2015 Plan reserves 43,834 shares of common stock for issuance of options, restricted stock, and other equity based awards to employees, officers, directors, and consultants of the Company.
1 unchanged sentence
Options issued under the 2015 Plan vest pursuant to the terms of stock option agreements with the recipients.
−Removed: In the event of a change in control, certain stock awards issued under this plan may be subject to additional acceleration of vesting as may be provided in the participants’
−Removed: written agreement.
+Added: In the event of a change in control, certain stock awards issued under this plan may be subject to additional acceleration of vesting as may be provided in the participants’ written agreement.
The 2015 Plan expires in December 2025.
In addition to options issued under the 2015 Plan, we have issued options to purchase common stock to employees, officers, directors and consultants outside of the plan.
−Removed: The terms of these outstanding options are substantially similar to the provisions of the 2015 Plan and options issued thereunder. 
+Added: The terms of these outstanding options are substantially similar to the provisions of the 2015 Plan and options issued thereunder.
In the event of change in control, as defined, certain of the non-plan options outstanding vest immediately.
−Removed: On June 18, 2021, the stockholders approved the 2021 Employee Stock Purchase Plan (“ESPP”).
+Added: On June 18, 2021, the stockholders approved the 2021 Employee Stock Purchase Plan (“ESPP”).
Under the terms of this plan, 43,834 shares of common stock are reserved for issuance and sale to employees and officers of the Company at a purchase price equal to 85% of the lower of the closing price of our common stock as reported on the Nasdaq Capital Market on the first day or the last day of the offering period.
1 unchanged sentence
The Board may suspend or terminate the plan at any time, otherwise the plan expires June 17, 2031.
−Removed: Plan Category
+Added: On December 14, 2023, the stockholders approved the 2023 Stock Incentive Plan.
+Added: The 2023 Plan reserves 333,334 shares of common stock for issuance of options, restricted stock, and other equity based awards to employees, officers, directors, consultants advisors and independent contractors of the Company.
+Added: Options are issued at exercise prices which may not be below 100% of fair market value (or 110% of the fair market value if, at the time the option is granted, the participant owns, directly or indirectly, more than 10% of the total combined voting power of all classes of our stock) and have terms not to exceed ten years.
+Added: Options issued under the 2023 Plan vest pursuant to the terms of stock option agreements with the recipients.
+Added: In the event of a change in control, certain awards issued under this plan may be subject to additional acceleration of vesting as may be provided in the participants’ written agreement.
+Added: The 2023 Plan expires on December 13, 2033, unless terminated earlier.
+Added: No awards have yet been granted under the 2023 Plan.
+Added: of securities
+Added: available for
+Added: future issuance
securities to be
upon exercise
−Removed: of outstanding
exercise price
of outstanding
−Removed: of securities
−Removed: available for
−Removed: future issuance
+Added: of outstanding
+Added: Plan Category
Equity compensation plans approved by security holders
−Removed: (1)(2)  
Equity compensation plans not approved by security holders
−Removed: (1)(2)  
Consists of shares of common stock issuable upon the exercise of options outstanding as of December 31, 2023 under the 2015 Plan.
Excludes employee stock purchase rights accruing under the ESPP.
−Removed: Amount includes 280,065 shares of common stock available as of December 31, 2022 for future issuance under the 2015 Plan and 708,967 shares of common stock available as of December 31, 2022 for future issuance under the ESPP.
+Added: Amount includes 4,627 shares of common stock and 333,334 shares of common stock available as of December 31, 2023 for future issuance under the 2015 Plan and the 2023 Plan, respectively, and 36,440 shares of common stock available as of December 31, 2023 for future issuance under the ESPP.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
−Removed: Standstill Agreement with Principal Stockholder
+Added: Standstill Agreement with Principal Stockholders
Pursuant to separate securities purchase agreements dated October 29, 2015 and November 11, 2015 with Wong Kwok Fong (Kelvin), we issued and sold shares of series A-1 stock to Kelvin which were subsequently converted into shares of our common stock.
−Removed: The forgoing agreements contain a standstill provision (the “Standstill”) which prohibits Kelvin either alone or together with any other person, from acquiring additional shares of our common stock or any of our assets, soliciting proxies, or seeking representation on our board of directors.
+Added: The forgoing agreements contain a standstill provision (the “Standstill”) which prohibits Kelvin either alone or together with any other person, from acquiring additional shares of our common stock or any of our assets, soliciting proxies, or seeking representation on our board of directors.
Kelvin is the Co-Chairman of the board of directors and an executive officer.
+Added: 2023 Public Securities Offering
+Added: On October 31, 2023, we completed a public offering of shares of common stock and warrants resulting in net proceeds of approximately $3.3 million, after deducting placement agent fees and estimated offering expenses.
+Added: Units comprised of shares of common stock and warrants to purchase common stock were purchased at a per unit price of $3.15, and warrants have an exercise price of $3.15.
+Added: DePasquale, our Chairman of the Board of Directors and Chief Executive Officer, James D.
+Added: Sullivan, our Vice President of Strategy and Compliance, Chief Legal Officer, and Mr.
+Added: Sullivan’s spouse each participated in the public offering.
+Added: DePasquale purchased 9,167 shares of common stock and a warrant to purchase 9,167 shares of common stock for a total purchase price of $28,875.
+Added: Sullivan purchased 12,667 shares of common stock and a warrant to purchase 12,667 shares of common stock for a total purchase price of $39,000, and his spouse purchased 3,173 shares of common stock and a warrant to purchase 3,173 shares of common stock for a total purchase price of $9,993.
Director Independence
−Removed: As required under the NASDAQ Marketplace Rules, a majority of the members of a listed company’s board of directors must qualify as “independent,”
−Removed: as affirmatively determined by the board of directors.
−Removed: Our board considered certain relationships between our directors and us when determining each director’s status as an “independent director”
−Removed: under Rule 5605(a)(2) of the NASDAQ Marketplace Rules.
−Removed: Based upon such definition and SEC regulations, we have determined that Robert Michel, Emmanuel Alia, and Thomas Bush, III, are “independent”
−Removed: under NASDAQ standards. 
+Added: As required under the NASDAQ Marketplace Rules, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors.
+Added: Our board considered certain relationships between our directors and us when determining each director’s status as an “independent director” under Rule 5605(a)(2) of the NASDAQ Marketplace Rules.
+Added: Based upon such definition and SEC regulations, we have determined that Robert Michel, Emmanuel Alia, and Cameron Williams, are “independent” under NASDAQ standards.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
−Removed: The following table shows fees for professional services and quarterly audit fees billed to us by Marcum LLC for the audit of our annual consolidated financial statements for the year ended December 31, 2022, and reviews of our second and third quarters 2022 and Rotenberg Meril Solomon Bertiger & Guttilla, P.C.
−Removed: (“RMSBG”), prior to RMSBG’s merger with Marcum, for the audit of our annual consolidated financial statements for the year ended December 31, 2021 and for the first quarter 2022:
+Added: The following table shows fees for professional services and audit fees billed to us by Bush and Associates CPA for the audit of our annual consolidated financial statements for the year ended December 31, 2023.
+Added: The following table also shows fees for professional services and audit fees billed to us by Marcum LLC for review of our financial statements for the first, second and third quarters of 2023 and the second and third quarters of 2022, and audit of our financial statements for the year ended December 31, 2022.
+Added: The table also includes the review of our financial statements for the first quarter 2022 by Rotenberg Meril Solomon Bertiger & Guttilla, P.C.
+Added: (“RMSBG”), prior to RMSBG’s merger with Marcum:
Audit-Related Fees
−Removed: Audit Fees  consist of fees billed for professional services rendered for the audit of our financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by our auditors in connection with statutory and regulatory filings or engagements.
−Removed: Audit-Related Fees  consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and which are not reported under audit fees.
+Added: Audit Fees consist of fees billed for professional services rendered for the audit of our financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by our auditors in connection with statutory and regulatory filings or engagements.
+Added: Audit-Related Fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and which are not reported under audit fees.
These fees relate primarily to services provided in connection with registration of securities and review of documents filed with the SEC.
−Removed: Tax Fees  consist of fees billed for professional services for tax compliance assistance rendered during the fiscal year.
+Added: Tax Fees consist of fees billed for professional services for tax compliance assistance rendered during the fiscal year.
Audit Committee Pre-Approval Procedures
The audit committee approves the engagement of our independent auditors to render audit and non-audit services before they are engaged.
−Removed: All of the fees for 2022 and 2021 shown above were pre-approved by the audit committee.
+Added: All of the fees for 2023 and 2022 shown above were pre-approved by the audit committee.
The audit committee pre-approves all audit and other permitted non-audit services provided by our independent auditors.
4 unchanged sentences
In addition, our audit committee considers, among other things, whether our independent registered public accounting firm is able to provide the required services in a more or less effective and efficient manner than other available service providers.
−Removed: EXHIBITS  
−Removed: AND FINANCIAL STATEMENT SCHEDULES
−Removed: The following documents are filed as part of this Report.
+Added: – EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
+Added: (a) The following documents are filed as part of this Report.
Portions of Item 15 are submitted as separate sections of this Report:
−Removed: (1)  Financial statements filed as part of this Report:
−Removed: Report of Independent Registered Public Accounting Firm (Marcum LLP, Saddle Brook, NJ, PCAOB ID:688
−Removed: Report of Independent Registered Public Accounting Firm (Rotenberg Meril Solomon Bertiger & Guttilla, P.C., Saddle Brook, NJ, PCAOB ID:361)
−Removed: Consolidated Balance Sheets as of December 31, 2022 and 2021
−Removed: Consolidated Statements of Operations—Years ended December 31, 2022 and 2021
−Removed: Consolidated Statements of Stockholders’ Equity—Years ended December 31, 2022 and 2021
−Removed: Consolidated Statements of Cash Flows—Years ended December 31, 2022 and 2021
−Removed: Notes to Consolidated Financial Statements—December 31, 2022 and 2021
−Removed:  The exhibits listed in the Exhibits Index immediately preceding such exhibits are filed as part of this Report
+Added: (1) Financial statements filed as part of this Report:
+Added: Report of Independent Registered Public Accounting Firm (Bush and Associates CPA., PCAOB ID:6797)
+Added: Report of Independent Registered Public Accounting Firm (Marcum LLP, PCAOB ID:688)
+Added: Consolidated Balance Sheets as of December 31, 2023 and 2022
+Added: Consolidated Statements of Operations—Years ended December 31, 2023 and 2022
+Added: Consolidated Statements of Stockholders’ Equity—Years ended December 31, 2023 and 2022
+Added: Consolidated Statements of Cash Flows—Years ended December 31, 2023 and 2022
+Added: Notes to Consolidated Financial Statements—December 31, 2023 and 2022
+Added: (b) The exhibits listed in the Exhibits Index immediately preceding such exhibits are filed as part of this Report
– FORM 10-K SUMMARY
FINANCIAL STATEMENTS
−Removed: The following financial statements of BIO-key International, Inc.
−Removed: are included herein at the indicated page numbers:
−Removed: Report of Independent Registered Public Accounting Firm ( Marcum LLC.
−Removed: , Saddle Brook, NJ , PCAOB ID:
−Removed: Report of Independent Registered Public Accounting Firm ( Rotenberg Meril Solomon Bertiger & Guttilla, P.C.
−Removed: , Saddle Brook, NJ , PCAOB ID:
−Removed: Consolidated Balance Sheets as of December 31, 2022 and 2021
−Removed: Consolidated Statements of Operations and Comprehensive Loss—Years ended December 31, 2022 and 2021
−Removed: Consolidated Statements of Stockholders’ Equity —Years ended December 31, 2022 and 2021
−Removed: Consolidated Statements of Cash Flows—Years ended December 31, 2022 and 2021
−Removed: Supplementary Disclosures of Cash Flow Information—Years ended December 31, 2022 and 2021
−Removed: Notes to the Consolidated Financial Statements—December 31, 2022 and 2021
+Added: The following financial statements of BIO-key International, Inc.
+Added: are included herein at the indicated page numbers:
+Added: Report of Independent Registered Public Accounting Firm ( Bush and Associates CPA ., PCAOB ID:
+Added: Report of Independent Registered Public Accounting Firm (Marcum LLC., PCAOB ID:688) 40
+Added: Consolidated Balance Sheets as of December 31, 2023 and 2022
+Added: Consolidated Statements of Operations and Comprehensive Loss—Years ended December 31, 2023 and 2022 42
+Added: Consolidated Statements of Stockholders’ Equity —Years ended December 31, 2023 and 2022
+Added: Consolidated Statements of Cash Flows—Years ended December 31, 2023 and 2022
+Added: Supplementary Disclosures of Cash Flow Information—Years ended December 31, 2023 and 2022 45
+Added: Notes to the Consolidated Financial Statements—December 31, 2023 and 2022
Report of Independent Registered Public Accounting Firm
−Removed: To the Shareholders and Board of Directors of
+Added: To the Shareholder and the Board of Directors of
BIO-key International, Inc.
Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheet of BIO-key International, Inc.
−Removed: and Subsidiaries (the “Company”) as of December 31, 2022, and the related consolidated statements of operations and comprehensive loss, stockholders’
−Removed: equity and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
−Removed: Revision to Correct Previously Issued Financial Statements
−Removed: As discussed in Note S to the financial statements, the 2021 financial statements have been revised to correct certain previously issued disclosures related to the reconciliation of the Company’s income tax rate for the year ended December 31, 2021 and the components of the Company’s deferred tax assets and liabilities and valuation allowance as of December 31, 2021 and 2020.
−Removed: The financial statements of the Company for the year ended December 31, 2021, before the effects of the adjustments to correct the errors discussed in Note S to the financial statements, were audited by other auditors whose report, dated March 31, 2022, expressed an unqualified opinion on those statements.
−Removed: We have also audited the adjustments described in Note S that were applied to revise the 2021 financial statements to correct the errors.
−Removed: In our opinion, such adjustments are appropriate and have been properly applied.
−Removed: Except for the corrections to revise the tax footnote we were not engaged to audit, review, or apply any procedures to the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year then ended, other than stated above and, accordingly, we do not express an opinion or any other form of assurance on the 2021 financial statements taken as a whole.
−Removed: Going Concern
+Added: We have audited the retrospective adjustments related to the reverse stock split discussed in Note A, the accompanying consolidated balance sheet of BIO-key International, Inc.
+Added: (the “Company”) as of December 31, 2022.
+Added: Additionally, we have audited the accompanying consolidated balance sheet of BIO-key International, Inc.
+Added: and Subsidiaries (the “Company”) as of December 31, 2023, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).
+Added: In our opinion, the financial statements and the retrospective adjustments related to the reverse stock split present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
+Added: Substantial Doubt about the Company's ability to continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.
−Removed: As disclosed in Note A of the financial statements, the Company has suffered substantial net losses and negative cash flows from operations in recent years and is dependent on debt and equity financing to fund its operations, all of which raise substantial doubt about the Company’s ability to continue as a going concern.
−Removed: Management’s plans regarding these matters are disclosed in Note A.
+Added: As disclosed in Note A of the financial statements, the Company has suffered substantial net losses and negative cash flows from operations in recent years and is dependent on debt and equity financing to fund its operations, all of which raise substantial doubt about the Company’s ability to continue as a going concern.
+Added: Management’s plans regarding these matters are disclosed in Note A.
The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
2 unchanged sentences
Our responsibility is to express an opinion on these financial statements based on our audit.
−Removed: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.
+Added: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
2 unchanged sentences
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
−Removed: As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
+Added: As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.
6 unchanged sentences
We determined that there are no critical audit matters.
−Removed: /s/ Marcum LLP
−Removed: We have served as the Company’s auditor since 2010 (such date takes into account the acquisition of Rotenberg Meril Solomon Bertiger & Guttilla, P.C., by Marcum LLP effective February 1, 2022).
−Removed: Saddle Brook, New Jersey
+Added: /s/Bush & Associates CPA LLC
+Added: We have served as the Company’s auditor since 2024.
+Added: Henderson, Nevada
Report of Independent Registered Public Accounting Firm
2 unchanged sentences
Opinion on the Financial Statements
−Removed: We have audited, before the effects of the adjustment for the correction of the errors described in Note S, the accompanying consolidated balance sheets of BIO-key International, Inc.
−Removed: and Subsidiaries (the “Company”) as of December 31, 2021, and the related consolidated statements of operations and comprehensive loss, stockholders’
−Removed: equity and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
−Removed: We were not engaged to audit, review, or apply any procedures to the adjustments for the correction of the errors described in Note S, and accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied.
−Removed: Those adjustments were audited by Marcum LLP.
+Added: We have audited, before the effects of the retrospective adjustments related to the reverse stock split discussed in Note A, the accompanying consolidated balance sheet of BIO-key International, Inc.
+Added: (the “Company”) as of December 31, 2022, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).
+Added: In our opinion, before the effects of the retrospective adjustments related to the reverse stock split discussed in Note A, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
+Added: We were not engaged to audit, review, or apply any procedures to the effects of the retrospective adjustments related to the reverse stock split discussed in Note A and, accordingly, we do not express an opinion or any other form of assurance about whether such retrospective adjustments are appropriate and have been properly applied.
+Added: Those retrospective adjustments were audited by other auditors.
+Added: Going Concern
+Added: The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.
+Added: As disclosed in Note A of the financial statements, the Company has suffered substantial net losses and negative cash flows from operations in recent years and is dependent on debt and equity financing to fund its operations, all of which raise substantial doubt about the Company’s ability to continue as a going concern.
+Added: Management’s plans regarding these matters are disclosed in Note A.
+Added: The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
1 unchanged sentence
Our responsibility is to express an opinion on these financial statements based on our audit.
−Removed: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.
+Added: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
2 unchanged sentences
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
−Removed: As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
+Added: As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.
3 unchanged sentences
We believe that our audit provides a reasonable basis for our opinion.
−Removed: /s/ ROTENBERG MERIL SOLOMON BERTIGER & GUTTILLA, P.C.
−Removed: ROTENBERG MERIL SOLOMON BERTIGER & GUTTILLA, P.C.
−Removed: We have served as the Company's auditors from 2010 to 2022.
+Added: /s/ Marcum LLP
+Added: We served as the Company’s auditor from 2010 to 2024
Saddle Brook, New Jersey
−Removed: March 31, 2022 
−Removed: BIO-key International,  
+Added: BIO-key International, Inc.
and Subsidiaries
1 unchanged sentence
Cash and cash equivalents
+Added: $ 511,400 $ 2,635,522
Accounts receivable, net
+Added: 1,201,526 1,522,784
Due from factor
−Removed: Note receivable, net of allowance
+Added: 99,320 49,500
Inventory, net of reserve
+Added: 445,740 4,434,369
Prepaid expenses and other
+Added: 364,171 342,706
Total current assets
−Removed: Resalable software license rights
−Removed: Investment –
−Removed: debt security, net
+Added: 2,622,157 8,984,881
Equipment and leasehold improvements, net
+Added: 220,177 107,413
Capitalized contract costs, net
+Added: 229,806 283,069
Deposits and other assets
−Removed: Note receivable, net of allowance
Operating lease right-of-use assets
+Added: 36,905 197,355
Intangible assets, net
+Added: 1,407,990 1,762,825
Total non-current assets
+Added: 1,894,878 2,359,374
+Added: $ 4,517,035 $ 11,344,255
Accounts payable
+Added: $ 1,316,014 $ 1,108,279
Accrued liabilities
+Added: 1,305,848 1,009,123
Convertible note payable
−Removed: Government loan –
−Removed: BBVA Bank, current portion
+Added: Government loan – BBVA Bank, current portion
+Added: 138,730 120,000
Deferred revenue - current
+Added: 414,968 462,418
Operating lease liabilities, current portion
+Added: 37,829 159,665
Total current liabilities
+Added: 3,213,389 5,455,688
Deferred revenue, net of current portion
+Added: 28,296 52,134
Deferred tax liability
−Removed: Government loan –
−Removed: BBVA Bank, net of current portion
+Added: 22,998 170,281
+Added: Government loan – BBVA Bank, net of current portion
+Added: 188,787 326,767
Operating lease liabilities, net of current portion
Total non-current liabilities
+Added: 240,081 587,011
TOTAL LIABILITIES
+Added: 3,453,470 6,042,699
Commitments (Note O)
−Removed: STOCKHOLDERS ’
−Removed: Common stock —
−Removed: authorized, 170,000,000 shares;
+Added: STOCKHOLDERS’ EQUITY
+Added: Common stock — authorized, 170,000,000 shares;
issued and outstanding;
1 unchanged sentence
Additional paid-in capital
+Added: 126,047,851 122,029,476
Accumulated other comprehensive loss
+Added: 22,821 ( 242,602 )
Accumulated deficit
( 125,007,210 ) ( 116,485,373 )
+Added: TOTAL STOCKHOLDERS’ EQUITY
1,063,565 5,301,556
−Removed: TOTAL STOCKHOLDERS ’
−Removed: TOTAL LIABILITIES AND STOCKHOLDERS ’
−Removed: The accompanying notes are an integral part of these statements.
−Removed: BIO-key International,  
+Added: TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
+Added: $ 4,517,035 $ 11,344,255
+Added: All BIO-key shares issued and outstanding for all periods reflect BIO-key’s 1-for-18 reverse stock split, which was effective December 21, 2023.
+Added: The accompanying notes are an integral part of these statements.
+Added: BIO-key International, Inc.
and Subsidiaries
−Removed: CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
+Added: CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Years ended December 31,
+Added: $ 2,218,885 $ 1,789,720
+Added: 4,342,010 4,584,052
+Added: 1,194,010 646,486
Total revenues
+Added: 7,754,905 7,020,258
Costs and other expenses
Cost of services
+Added: 861,936 722,152
Cost of license fees
+Added: 1,174,919 906,417
Cost of hardware
+Added: 700,231 411,001
+Added: Cost of hardware reserve
+Added: 3,586,500 400,000
Total costs and other expenses
+Added: 6,323,586 2,439,570
+Added: 1,431,319 4,580,688
Operating expenses
Selling, general and administrative
+Added: 7,862,710 9,364,887
Research, development and engineering
−Removed: Reversal of earnout payable –
−Removed: Swivel acquisition
+Added: 2,394,926 3,252,236
+Added: Reversal of earnout payable – Swivel acquisition
+Added: - ( 500,000 )
Impairment of goodwill
Total operating expenses
+Added: 10,257,636 14,504,316
Operating loss
+Added: ( 8,826,317 ) ( 9,923,628 )
Other income (expense)
Interest income
+Added: Gain from sale of asset
Loss on foreign currency transactions
Investment-debt security reserve
+Added: - ( 452,821 )
Loan transaction costs
+Added: - ( 1,147,456 )
Change in fair value of convertible note
+Added: 396,203 ( 396,203 )
Interest expense
+Added: ( 218,270 ) ( 10,462 )
Total other income (expense)
+Added: 170,466 ( 2,006,709 )
Loss before provision for income tax benefit
+Added: ( 8,655,851 ) ( 11,930,337 )
Provision for income tax benefit
+Added: 134,014 20,434
+Added: $ ( 8,521,837 ) $ ( 11,909,903 )
Comprehensive loss:
+Added: $ ( 8,521,837 ) $ ( 11,909,903 )
Other comprehensive loss- Foreign translation adjustment
+Added: 265,423 ( 242,602 )
Comprehensive loss
+Added: $ ( 8,256,414 ) $ ( 12,152,505 )
Basic and Diluted Loss per Common Share
+Added: $ ( 15.21 ) $ ( 27.26 )
Weighted Average Shares Outstanding:
Basic and Diluted
−Removed: The accompanying notes are an integral part of these statements.
−Removed: BIO-key International,  
+Added: 560,278 436,821
+Added: All BIO-key shares issued and outstanding for all periods reflect BIO-key’s 1-for-18 reverse stock split, which was effective December 21, 2023.
+Added: The accompanying notes are an integral part of these statements.
+Added: BIO-key International, Inc.
and Subsidiaries
−Removed: CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’
+Added: CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY
Comprehensive
1 unchanged sentence
Balance as of December 31, 2021
−Removed: Issuance of common stock for directors’
+Added: 478,475 $ 48 $ 120,190,877 $ - $ ( 104,575,470 ) $ 15,615,455
+Added: Issuance of common stock for directors’ fees
+Added: 2,202 - 76,043 - - 76,043
Issuance of restricted common stock to employees
+Added: 15,444 1 ( 1 ) - - -
Forfeiture of restricted stock
+Added: ( 583 ) - - - - -
+Added: Issuance of common stock pursuant to Swivel purchase agreement
+Added: 14,948 2 600,001 - - 600,003
+Added: Issuance of common stock for note issuance fees
+Added: 38,889 4 699,996 - - 700,000
+Added: Issuance of warrant in conjunction with note payable
+Added: - - 94,316 - 94,316
Issuance of common stock for employee stock purchase plan
+Added: 3,364 - 56,380 - - 56,380
Share based compensation for employee stock purchase plan
+Added: - - 18,787 - - 18,787
+Added: Foreign currency translation adjustment
+Added: - - ( 242,602 ) - ( 242,602 )
Share-based compensation
+Added: - - 293,077 - - 293,077
+Added: - - - - ( 11,909,903 ) ( 11,909,903 )
Balance as of December 31, 2022
552,739 $ 55 $ 122,029,476 $ ( 242,602 ) $ ( 116,485,373 ) $ 5,301,556
−Removed: Issuance of common stock for directors’
+Added: Issuance of common stock for directors’ fees
+Added: 3,078 - 39,007 - - 39,007
Issuance of restricted common stock to employees
+Added: 16,404 1 ( 1 ) - - -
Forfeiture of restricted stock
−Removed: Issuance of common stock pursuant to Swivel purchase agreement
−Removed: Issuance of common stock for note issuance fees
−Removed: Issuance of warrant in conjunction with note payable
+Added: ( 3,752 ) - ( 3,105 ) - - ( 3,105 )
+Added: Exercise of warrants
+Added: 177,889 18 302 - - 320
+Added: Issuance of warrants
+Added: - - 3,403,322 - - 3,403,322
+Added: Issuance of stock for securities purchase agreements
+Added: 283,472 29 892,909 - - 892,938
Issuance of common stock for employee stock purchase plan
+Added: 2,947 - 17,478 - - 17,478
Share based compensation for employee stock purchase plan
+Added: - - 4,343 - - 4,343
Foreign currency translation adjustment
+Added: - - - 265,423 - 265,423
Share-based compensation
+Added: - - 225,487 - - 225,487
+Added: Issuance costs
+Added: - - ( 561,367 ) - - ( 561,367 )
+Added: - - - - ( 8,521,837 ) ( 8,521,837 )
Balance as of December 31, 2023
1,032,777 $ 103 $ 126,047,851 $ 22,821 $ ( 125,007,210 ) $ 1,063,565
−Removed: The accompanying notes are an integral part of these statements.
−Removed: BIO-key International,  
+Added: All BIO-key shares issued and outstanding for all periods reflect BIO-key’s 1-for-18 reverse stock split, which was effective December 21, 2023.
+Added: The accompanying notes are an integral part of these statements.
+Added: BIO-key International, Inc.
and Subsidiaries
2 unchanged sentences
CASH FLOW FROM OPERATING ACTIVITIES:
+Added: $ ( 8,521,837 ) $ ( 11,909,903 )
Adjustments to reconcile net loss to cash used for operating activities:
+Added: 75,136 43,794
Impairment of goodwill
−Removed: Reversal of earnout payable –
−Removed: Swivel acquisition
+Added: Reversal of earnout payable – Swivel acquisition
+Added: - ( 500,000 )
Amortization of intangible assets and write-off
+Added: 354,558 298,113
Amortization of resalable software license rights
3 unchanged sentences
Reserve for inventory
+Added: 3,586,500 400,000
Reserve for note receivable
Allowance for doubtful account
+Added: 750,000 360,000
Amortization of debt discount
Amortization of capitalized contract costs
+Added: 171,291 106,624
Share based and warrant compensation for employees and consultants
+Added: 226,725 311,864
Stock based fees to directors
+Added: 39,007 76,043
Bad debt expense
+Added: 100,000 130,111
Change in fair value of convertible note
+Added: ( 396,203 ) 396,203
Deferred income tax benefit
+Added: ( 134,014 ) ( 20,434 )
Amortization of operating lease right-of-use assets
+Added: 160,449 155,353
Change in operating assets and liabilities:
Accounts receivable
+Added: ( 428,742 ) ( 339,383 )
Due from factor
Capitalized contract costs
+Added: ( 118,028 ) ( 140,681 )
+Added: 402,129 106,291
Prepaid expenses and other
+Added: ( 21,465 ) ( 46,655 )
Accounts payable
+Added: 57,725 239,144
+Added: Income tax payable
Accrued liabilities
+Added: 275,561 167,614
Deferred revenue
+Added: ( 71,288 ) ( 120,078 )
Operating lease liabilities
+Added: ( 168,376 ) ( 165,276 )
Net cash used for operating activities
+Added: ( 3,793,456 ) ( 6,229,034 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Swivel Secure, net of cash acquired of $ 729,905
+Added: - ( 623,578 )
Receipt of cash from note receivable
Capital expenditures
+Added: ( 1,000 ) ( 82,040 )
Net cash used for investing activities
+Added: ( 1,000 ) ( 696,618 )
CASH FLOWS FROM FINANCING ACTIVITIES:
+Added: Proceeds from public offerings
+Added: Repayment of convertible notes
+Added: ( 2,200,000 ) -
+Added: Proceeds from the exercise of warrants
+Added: Costs incurred for issuance of common stock
+Added: ( 561,367 ) -
Proceeds from issuance of convertible notes
Costs incurred for issuance of convertible note
+Added: - ( 155,140 )
+Added: Repayment of government loan
+Added: ( 119,251 ) -
Proceeds from Employee Stock Purchase Plan
−Removed: Repayment of note payable - PistolStar
+Added: 17,478 56,380
Net cash (used in) provided by financing activities
+Added: 1,433,440 1,903,240
Effect of exchange rate changes
+Added: 236,894 ( 96,112 )
NET DECREASE IN CASH AND CASH EQUIVALENTS
+Added: ( 2,124,122 ) ( 5,118,524 )
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
+Added: 2,635,522 7,754,046
CASH AND CASH EQUIVALENTS, END OF YEAR
−Removed: The accompanying notes are an integral part of these statements.
+Added: $ 511,400 $ 2,635,522
+Added: All BIO-key shares issued and outstanding for all periods reflect BIO-key’s 1-for-18 reverse stock split, which was effective December 21, 2023.
+Added: The accompanying notes are an integral part of these statements.
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION
1 unchanged sentence
Cash paid during the year for:
+Added: $ 218,270 $ 10,462
Noncash investing and financing activities:
Accounts receivable acquired from Swivel Secure
+Added: $ - $ 702,886
Equipment acquired from Swivel Secure
1 unchanged sentence
Intangible assets acquired from Swivel Secure
+Added: $ - $ 762,860
Goodwill resulting from the acquisition from Swivel Secure
+Added: $ - $ 1,258,087
Accounts payable and accrued expenses acquired from Swivel Secure
+Added: $ - $ 431,884
Government loan acquired from Swivel Secure
+Added: $ - $ 544,000
Deferred tax liability from the acquisition of Swivel Secure
+Added: $ - $ 190,715
Common stock issued for acquisition of Swivel Secure
+Added: $ - $ 600,004
Common stock issued for acquisition of note payable
+Added: $ - $ 700,000
Issuance of warrant for acquisition of note payable
Operating lease right-of-use asset and liability for new lease
−Removed: The accompanying notes are an integral part of these statements.
−Removed: BIO-key International,  
+Added: $ - $ 105,893
+Added: All BIO-key shares issued and outstanding for all periods reflect BIO-key’s 1-for-18 reverse stock split, which was effective December 21, 2023.
+Added: The accompanying notes are an integral part of these statements.
+Added: BIO-key International, Inc.
and Subsidiaries
NOTES TO THE FINANCIAL STATEMENTS
−Removed: December  
−Removed: 31, 2022 and 2021
−Removed: NOTE A —
−Removed: THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+Added: December 31, 2023 and 2022
+Added: NOTE A — THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The Company, founded in 1993, develops and markets proprietary fingerprint identification biometric technology and software solutions enterprise-ready identity access management solutions to commercial, government and education customers throughout the United States and internationally.
−Removed: The Company was a pioneer in developing automated, finger identification technology that supplements or compliments other methods of identification and verification, such as personal inspection identification, passwords, tokens, smart cards, ID cards, PKI, credit cards, passports, driver’s licenses, OTP or other form of possession or knowledge-based credentialing.
−Removed: Additionally, advanced BIO-key®
−Removed: technology has been, and is, used to improve both the accuracy and speed of competing finger-based biometrics.
+Added: The Company was a pioneer in developing automated, finger identification technology that supplements or compliments other methods of identification and verification, such as personal inspection identification, passwords, tokens, smart cards, ID cards, PKI (public key infrastructure), credit cards, passports, driver’s licenses, OTP or other form of possession or knowledge-based credentialing.
+Added: Additionally, advanced BIO-key® technology has been, and is, used to improve both the accuracy and speed of competing finger-based biometrics.
Going Concern and Basis of Presentation
−Removed: The Company has historically financed our operations through access to the capital markets by issuing convertible debt securities, convertible preferred stock, common stock, and through factoring receivables.
+Added: The Company has historically financed operations through access to the capital markets by issuing convertible debt securities, convertible preferred stock, common stock, and through factoring receivables.
As of the date of this report, the Company does not have enough cash for twelve months of operations.
The history of significant losses, the negative cash flow from operations, the limited cash resources on hand and the dependence by the Company on its ability, to obtain additional financing to fund its operations after the current cash resources are exhausted raises substantial doubt about the Company's ability to continue as a going concern.
−Removed: The Company has lowered our expenses through decreasing spending in marketing, and research and development.
−Removed: In addition, the Company has purchased inventory for projects in Nigeria, which have been delayed in deployment, and therefore is looking into other markets and opportunities to sell or return the product to generate additional cash.
+Added: The Company has lowered expenses through decreasing spending in marketing, and research and development.
+Added: In addition, the Company has purchased inventory for projects in Nigeria, which have been delayed in deployment, and is, therefore looking into other markets and opportunities to sell or return the product to generate additional cash.
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"), which contemplate continuation of the Company as a going concern, and assumes continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the normal course of business.
−Removed: The Company has suffered substantial net losses and negative cash flows from operations in recent years and is dependent on debt and equity financing to fund its operations all of which raise substantial doubt about the Company’s ability to continue as a going concern.
−Removed: Recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon the Company’s ability to increase its revenue and meet its financing requirements on a continuing basis and become profitable in its future operations.
+Added: The Company has suffered substantial net losses and negative cash flows from operations in recent years and is dependent on debt and equity financing to fund its operations all of which raise substantial doubt about the Company’s ability to continue as a going concern.
+Added: Recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon the Company’s ability to increase its revenue and meet its financing requirements on a continuing basis and become profitable in its future operations.
The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
+Added: Reverse Stock Split
+Added: All references to issued and outstanding shares for all periods reflect the 1 -for- 18 reverse stock split, which was effective December 21, 2023.
+Added: As a result, all share numbers for all periods, including the number of shares underlying warrants, options, and other convertible securities, and all exercise prices applicable to such warrants, options and convertible securities have been adjusted retrospectively to reflect the 1 -for- 18 reverse stock split.
Foreign Currency
−Removed: The Company accounts for foreign currency transactions pursuant to ASC 830, Foreign Currency Matters ("ASC 830”).
+Added: The Company accounts for foreign currency transactions pursuant to ASC 830, Foreign Currency Matters ("ASC 830” ).
The functional currency of the Company is the U.S.
13 unchanged sentences
The accompanying consolidated financial statements include the accounts of BIO-key International, Inc.
−Removed: and its wholly-owned subsidiaries (collectively, the “Company”).
+Added: and its wholly-owned subsidiaries (collectively, the “Company”).
Intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
−Removed: Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) as set forth in the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) and consider the various staff accounting bulletins and other applicable guidance issued by the U.S.
+Added: Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) as set forth in the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) and consider the various staff accounting bulletins and other applicable guidance issued by the U.S.
Securities and Exchange Commission (SEC).
14 unchanged sentences
Software licenses
−Removed: Software license revenue consists of fees for perpetual and subscription licenses for one or more of the Company’s biometric fingerprint solutions or identity access management solutions.
+Added: Software license revenue consists of fees for perpetual and subscription licenses for one or more of the Company’s biometric fingerprint solutions or identity access management solutions.
Revenue is recognized at a point in time once the software is available to the customer for download.
6 unchanged sentences
Support and maintenance revenue consists of fees for unspecified upgrades, telephone assistance and bug fixes.
−Removed: The Company satisfies its support and maintenance performance obligation by providing “stand-ready”
−Removed: assistance as required over the contract period.
+Added: The Company satisfies its support and maintenance performance obligation by providing “stand-ready” assistance as required over the contract period.
The Company records deferred revenue (contract liability) at time of prepayment until the term of the contract begins.
4 unchanged sentences
Professional services revenues consist primarily of fees for deployment and optimization services, as well as training.
−Removed: The majority of the Company’s consulting contracts are billed on a time and materials basis, and revenue is recognized based on the amount billable to the customer in accordance with practical expedient ASC 606-10-55-18.
+Added: The majority of the Company’s consulting contracts are billed on a time and materials basis, and revenue is recognized based on the amount billable to the customer in accordance with practical expedient ASC 606 - 10 - 55 - 18.
For other professional services contracts, the Company utilizes an input method and recognizes revenue based on labor hours expended to date relative to the total labor hours expected to be required to satisfy its performance obligation.
32 unchanged sentences
The Company has determined that there is a single reporting unit for the purpose of conducting this goodwill impairment assessment.
−Removed: For purposes of assessing potential impairment, the Company estimates the fair value of the reporting unit, based on the Company’s market capitalization, and compares this amount to the carrying value of the reporting unit.
+Added: For purposes of assessing potential impairment, the Company estimates the fair value of the reporting unit, based on the Company’s market capitalization, and compares this amount to the carrying value of the reporting unit.
If the Company determines that the carrying value of the reporting unit exceeds its fair value, an impairment charge would be required.
8 unchanged sentences
Accounts receivable are carried at original amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis.
−Removed: Management determines the allowance for doubtful receivables by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history, and current economic conditions.
+Added: Management determines the allowance for doubtful receivables by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history, and current economic conditions.
Accounts receivable are written off when deemed uncollectible.
1 unchanged sentence
Accounts receivable
−Removed: Loss on foreign currency
+Added: $ 2,207,311 $ 2,096,569
Allowance for doubtful accounts
+Added: ( 1,005,785 ) ( 573,785 )
Accounts receivable, net of allowances for doubtful accounts
+Added: $ 1,201,526 $ 1,522,784
Bad debt expenses (if any) are recorded in selling, general, and administrative expense.
The allowance for doubtful accounts for the years ended December 31, 2023 and 2022 is as follows:
−Removed: Beginning of Year
+Added: Balance at Beginning of Year
Charged to Costs and Expenses
2 unchanged sentences
Year ended December 31, 2023 Allowance for Doubtful Accounts
−Removed: Year ended December 31, 2021 Allowance for Doubtful Accounts
+Added: $ 573,785 $ 750,000 $ ( 318,000 ) $ 1,005,785
+Added: Year ended December 31, 2022 Allowance for Doubtful Accounts
+Added: $ 213,785 $ 360,000 $ - $ 573,785
Equipment and Leasehold Improvements, Intangible Assets and Depreciation and Amortization
27 unchanged sentences
All costs associated with research and development are expensed as incurred.
−Removed: Earnings Per Share of Common Stock ( “
−Removed: The Company’s EPS is calculated by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the reporting period.
+Added: Earnings Per Share of Common Stock ( “ EPS ” )
+Added: The Company’s EPS is calculated by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the reporting period.
Diluted EPS includes the effect from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options and warrants, when the effect of their inclusion is dilutive.
+Added: All BIO-key shares issued and outstanding for all periods reflect BIO-key’s 1 -for- 18 reverse stock split, which was effective December 21, 2023.
Accounting for Stock-Based Compensation
−Removed: The Company accounts for share based compensation in accordance with the provisions of ASC 718-10, “Compensation —
−Removed: Stock Compensation,”
−Removed: which requires measurement of compensation cost for all stock awards at fair value on date of grant and recognition of compensation over the service period for awards expected to vest.
+Added: The Company accounts for share based compensation in accordance with the provisions of ASC 718 - 10, “Compensation — Stock Compensation,” which requires measurement of compensation cost for all stock awards at fair value on date of grant and recognition of compensation over the service period for awards expected to vest.
The majority of its share-based compensation arrangements vest over a three year vesting schedule.
1 unchanged sentence
The fair value of stock options is determined using the Black-Scholes valuation model and requires the input of certain assumptions.
−Removed: These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (the “expected option term”), the estimated volatility of its common stock price over the option’s expected term, the risk-free interest rate over the option’s expected term, and the Company’s expected annual dividend yield.
+Added: These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (the “expected option term”), the estimated volatility of its common stock price over the option’s expected term, the risk-free interest rate over the option’s expected term, and the Company’s expected annual dividend yield.
Changes in these subjective assumptions can materially affect the estimate of fair value of stock-based compensation and consequently, the related amount recognized as an expense in the consolidated statements of operations.
5 unchanged sentences
Options and warrants to outsiders are accounted for under ASC 718.
−Removed: The following table presents share-based compensation expenses included in the Company’s consolidated statements of operations:
+Added: The following table presents share-based compensation expenses included in the Company’s consolidated statements of operations:
Selling, general and administrative
+Added: $ 209,134 $ 310,017
Research, development and engineering
+Added: 56,598 77,890
+Added: $ 265,732 $ 387,907
The provision for, or benefit from, income taxes includes deferred taxes resulting from the temporary differences in income for financial and tax purposes using the liability method.
3 unchanged sentences
Valuation allowances are established when it is more likely than not that the tax benefit of the deferred tax asset will not be realized.
−Removed: The evaluation, as prescribed by ASC 740-10, “Income Taxes,”
−Removed: includes the consideration of all available evidence, both positive and negative, regarding historical operating results including recent years with reported losses, the estimated timing of future reversals of existing taxable temporary differences, estimated future taxable income exclusive of reversing temporary differences and carryforwards, and potential tax planning strategies which may be employed to prevent an operating loss or tax credit carryforward from expiring unused.
−Removed: Because of the Company’s historical performance and estimated future taxable income, a full valuation allowance has been established.
+Added: The evaluation, as prescribed by ASC 740 - 10, “Income Taxes,” includes the consideration of all available evidence, both positive and negative, regarding historical operating results including recent years with reported losses, the estimated timing of future reversals of existing taxable temporary differences, estimated future taxable income exclusive of reversing temporary differences and carryforwards, and potential tax planning strategies which may be employed to prevent an operating loss or tax credit carryforward from expiring unused.
+Added: Because of the Company’s historical performance and estimated future taxable income, a full valuation allowance has been established.
The Company accounts for uncertain tax provisions in accordance with ASC 740.
−Removed: The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements.
+Added: The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements.
The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
7 unchanged sentences
The implicit rate within our operating leases are generally not determinable and, therefore, the Company uses the incremental borrowing rate at the lease commencement date to determine the present value of lease payments.
−Removed: The determination of the Company’s incremental borrowing rate requires judgment.
+Added: The determination of the Company’s incremental borrowing rate requires judgment.
The Company determines the incremental borrowing rate for each lease using our estimated borrowing rate, adjusted for various factors including level of collateralization, term and currency to align with the terms of the lease.
16 unchanged sentences
supported by little or no market activity).
−Removed: The following table summarizes our financial instruments measured at fair value at December 31, 2022:
−Removed: Convertible note at fair value
−Removed: The Company issued a convertible note to which included an original issue discount, conversion features and a detachable warrant, as further discussed in Note M.
+Added: The Company issued a convertible note which included an original issue discount, conversion features and a detachable warrant, as further discussed in Note M.
The detachable warrant represents a freestanding, separable equity-linked financial instrument recorded at fair value.
6 unchanged sentences
Face amount - $ 2,200,000
−Removed: Nominal interest rate –
−Removed: Default interest rate –
−Removed: Increase in principal upon a default –
−Removed: Present value discount rate –
−Removed: Likelihood of default –
−Removed: estimated to be 50 % at the extended maturity date
+Added: Nominal interest rate – 10 % - 12 %
+Added: Default interest rate – 18 %
+Added: Increase in principal upon a default – 30 %
+Added: Present value discount rate – 15.18 %
+Added: Likelihood of default – estimated to be 50 % at the extended maturity date
The following table shows the changes in fair value measurements for the convertible note using significant unobservable inputs (Level 3 ) during the year ended December 31, 2023 :
1 unchanged sentence
Purchases and issuances
−Removed: Day one loss on value of hybrid instrument
+Added: ( 2,200,000 )
+Added: Day one change in value of hybrid instrument
Ending balance
4 unchanged sentences
The impairment allowance is a valuation account deducted from the amortized cost basis of financial assets to present the net amount expected to be collected on the financial asset.
−Removed: Once the new pronouncement is adopted by the Company, the allowance for credit losses must be adjusted for management’s current estimate at each reporting date.
+Added: Once the new pronouncement is adopted by the Company, the allowance for credit losses must be adjusted for management’s current estimate at each reporting date.
The new guidance provides no threshold for recognition of impairment allowance.
2 unchanged sentences
ASU 2016 - 13 is effective for the Company for annual periods, including interim periods within those annual periods, beginning on January 1, 2023.
−Removed: The Company is currently assessing the impact ASU 2016-13 will have on its consolidated financial statements.
−Removed: Management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying consolidated financial statements.
−Removed: NOTE B —
−Removed: REVENUE FROM CONTRACTS WITH CUSTOMERS
+Added: The Company has adopted the accounting standard.
+Added: NOTE B — REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregation of Revenue
The following table summarizes revenue from contracts with customers for the years ended December 31, 2023 and 2022 :
+Added: $ 1,971,348 $ 552,630 $ 1,801,381 $ 16,651 $ 4,342,010
+Added: 147,815 0 1,013,295 32,900 1,194,010
+Added: 1,116,935 101,816 981,848 18,286 2,218,885
Total revenues
+Added: $ 3,236,098 $ 654,446 $ 3,796,524 $ 67,837 $ 7,754,905
+Added: $ 1,856,814 $ 517,161 $ 2,124,088 $ 85,989 $ 4,584,052
+Added: 422,275 25,833 19,914 178,464 646,486
+Added: 1,270,067 83,306 436,293 54 1,789,720
Total revenues
−Removed: * EMESA –
−Removed: Europe, Middle East, South America
+Added: $ 3,549,156 $ 626,300 $ 2,580,295 $ 264,507 $ 7,020,258
+Added: * EMESA – Europe, Middle East, South America
Revenue recognized during the year ended December 31, 2023 from amounts included in deferred revenue at the beginning of the year was approximately $ 467,000 .
3 unchanged sentences
ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied.
−Removed: The guidance provides certain practical expedients that limit this requirement, which the Company’s contracts meet as follows:
+Added: The guidance provides certain practical expedients that limit this requirement, which the Company’s contracts meet as follows:
The performance obligation is part of a contract that has an original expected duration of one year or less, in accordance with ASC 606 - 10 - 50 - 14.
−Removed: Deferred revenue represents the Company’s remaining performance obligations related to prepaid support and maintenance, all of which is expected to be recognized from one to five years.
−Removed: NOTE C —
−Removed: SWIVEL SECURE EUROPE, SA ACQUISITION
+Added: Deferred revenue represents the Company’s remaining performance obligations related to prepaid support and maintenance, all of which is expected to be recognized from one to five years.
+Added: NOTE C — SWIVEL SECURE EUROPE, SA ACQUISITION
On March 8, 2022, the Company completed the acquisition of 100 % of the issued and outstanding capital stock of Swivel Secure based in Madrid, Spain, pursuant to the terms of a stock purchase agreement.
2 unchanged sentences
At the closing, the Company made a cash payment of $ 1.27 million and issued 14,948 shares of common stock of which 4,983 shares were held back by the Company to secure certain indemnification obligations under the stock purchase agreement.
−Removed: The shares of Company common stock were priced at $ 2.23 , the contractual 20 day volume-weighted average price of the Company’s common stock immediately prior to the payment date as reported on the Nasdaq Capital Market.
+Added: The shares of Company common stock were priced at $ 2.23 , the contractual 20 day volume-weighted average price of the Company’s common stock immediately prior to the payment date as reported on the Nasdaq Capital Market.
The business combination has been accounted for as an acquisition and, in accordance with ASC 805.
31 unchanged sentences
As such, the Company reversed the earnout payable of $ 500,000 and recognized the income on the reversal of the earnout payable.
−Removed: For the period from March 8, 2022 to December 31, 2022, revenue from Swivel Secure amounted to $ 2,351,975 and net loss amounted to $ 720,691 .
−Removed: NOTE D —
−Removed: FAIR VALUES OF FINANCIAL INSTRUMENTS
+Added: NOTE D — 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.
−Removed: The carrying value of the Company’s notes and loan payables approximated fair value as the interest rates related to the financial instruments approximated market.
−Removed: NOTE E —
−Removed: CONCENTRATION OF RISK
+Added: The carrying value of the Company’s notes and loan payables approximated fair value as the interest rates related to the financial instruments approximated market.
+Added: NOTE E — CONCENTRATION OF RISK
Financial instruments which potentially subject the Company to risk primarily consist of cash, and cash equivalents, investment in debt security, and accounts receivables.
1 unchanged sentence
The exposure to the Company is solely dependent upon daily bank balances and the respective strength of the financial institutions.
−Removed: The Company was in excess of coverage of approximately $ 2,000,000 and $ 7,057,000 at December 31, 2022 and 2021, respectively.
+Added: The Company was not in excess of coverage at December 31, 2023.
+Added: The Company was in excess of coverage of approximately $ 2,000,000 December 31, 2022.
The Company has not incurred any losses on these accounts.
The Company extends credit to customers on an unsecured basis in the normal course of business.
−Removed: The Company’s policy is to perform an analysis of the recoverability of its receivables at the end of each reporting period and to establish allowances where appropriate.
+Added: The Company’s policy is to perform an analysis of the recoverability of its receivables at the end of each reporting period and to establish allowances where appropriate.
The Company analyzes historical bad debts and contract losses, customer concentrations, and customer credit-worthiness when evaluating the adequacy of the allowances.
−Removed: For the year ended December 31, 2022 no  customer accounted for 10 % of total revenue.
−Removed: For the year ended December 2021, 
−Removed: one customer accounted for 
−Removed: 13 % of total revenue.
−Removed: At December 31, 2022, one customer accounted for 35 % of the total accounts receivable.
−Removed: At December 31, 2021, 
−Removed: three customers accounted for 87 % of total accounts receivable.
−Removed: NOTE F —
−Removed: NOTE RECEIVABLE
−Removed: During the third quarter of 2020, the Company loaned $ 295,000 as an advance to Technology Transfer Institute (“TTI”) to aid in fulfilling the African contracts.
+Added: For the year ended December 31, 2023 three customers accounted for 34 % of total revenue.
+Added: For the year ended December 2022 , no customer accounted for greater than 10% of total revenue.
+Added: At December 31, 2023 , three customers accounted for 66 % of the total accounts receivable.
+Added: At December 31, 2022 , one customer accounted for 35 % of total accounts receivable.
+Added: NOTE F — NOTE RECEIVABLE
+Added: During the third quarter of 2020, the Company loaned $ 295,000 as an advance to Technology Transfer Institute (“TTI”) to aid in fulfilling the African contracts.
The note did not bear any interest if paid within the nine ( 9 ) monthly installments beginning December 31, 2020.
3 unchanged sentences
On May 5, 2022, the Company amended the note to modify the payment terms to eight biweekly installments of $ 1,000 beginning February 25, 2022, nineteen consecutive monthly installments of $ 15,000 beginning on July 6, 2022, and $ 2,000 on or before February 6, 2024.
−Removed: Currently, the payments are several months behind schedule.
−Removed: Due to the delay in payments, the Company has increased the allowance for the remainder of the balance owed under the note.
−Removed: We are continuing to pursue payment and expect that we will start to receive funds in the second quarter of 2023.
−Removed: A member of our board of directors served as Chief Executive Officer of TTI until August 12, 2020.
+Added: The payments are behind schedule.
+Added: Due to the delay in payments, the Company has increased the allowance for the remainder of the balance owed under the note in 2022.
+Added: The Company is continuing to pursue payment with an outside collection agency.
+Added: A member of the Company's board of directors served as Chief Executive Officer of TTI until August 12, 2020.
Note receivable
+Added: $ - $ 195,000
Repayment of note
Allowance for doubtful account
+Added: - ( 186,000 )
Note receivable, net of allowance
1 unchanged sentence
Noncurrent portion, net of allowance
−Removed: NOTE G —
+Added: NOTE G — INVENTORY
Inventory is stated at the lower of cost, determined on a first in, first out basis, or realizable value.
1 unchanged sentence
The Company also reserves for excess quantities, slow moving goods, and for other impairment of value based upon assumptions of future demand and market conditions.
−Removed: The $ 400,000 reserve on inventory is due to slow moving inventory purchased for projects in Nigeria.
+Added: The reserve on inventory in 2022 and 2023 is due to slow moving inventory purchased for projects in Nigeria.
The Company is looking into other markets and opportunities to sell or return the product.
1 unchanged sentence
Finished goods
+Added: $ 4,373,056 $ 4,764,643
Fabricated assemblies
+Added: 59,184 69,726
Reserve on finished goods
+Added: ( 3,986,500 ) ( 400,000 )
Total inventory
−Removed: NOTE H —
−Removed: RESALABLE SOFTWARE LICENSES  
+Added: $ 445,740 $ 4,434,369
+Added: NOTE H — RESALABLE SOFTWARE LICENSES RIGHTS
On December 31, 2015, the Company purchased third -party software licenses in the amount of $ 180,000 in anticipation of a large pending deployment that has yet to materialize.
1 unchanged sentence
Since the license purchase, the actual per unit cost (actual usage) of such license rights in the cumulative amount of $ 141,190 has been charged to cost of sales.
−Removed: Since we have not received any sales for the license within the last two years, we accelerated the amortization for the balance of the license in 2022, leaving a carrying balance of $ 0 and $ 48,752 as of December 31, 2022 and 2021, respectively.
−Removed: A total of $ 48,752 and $ 10,130 was charged to cost of sales during the years ended December 31, 2022 and 2021, respectively.
−Removed: NOTE I —
−Removed: INVESTMENT IN DEBT SECURITY
−Removed: The Company purchased a 4,000,000 Hong Kong dollar denominated Bond Certificate with a financial institution in Hong Kong in September 2020 bearing interest at 5 % per annum.
+Added: Since the Company did not receive any sales for the license in 2021 or 2022, it accelerated the amortization for the balance of the license in 2022, leaving a carrying balance of $ 0 as of both December 31, 2023 and 2022 .
+Added: A total of $ 48,752 was charged to cost of sales during the year ended December 31, 2022.
+Added: NOTE I — INVESTMENT IN DEBT SECURITY
+Added: The Company purchased a 4,000,000 Hong Kong dollar denominated Bond Certificate with a financial institution in Hong Kong in September 2020 bearing interest at 5 % per annum.
The Bond Certificate translated to $ 512,821 U.S.
Dollars, based on the exchange rate at the purchase date.
−Removed:  The investment was originally recorded at amortized cost and was scheduled to mature in June 2021.
−Removed: The Company never received the proceeds and accrued interest from the investment and as such, wrote off the investment during 2022 as the bond issuer defaulted on repayment, and the Company had no recourse.
−Removed: NOTE J —
−Removed: EQUIPMENT AND LEASEHOLD IMPROVEMENTS
+Added: The investment was originally recorded at amortized cost and was scheduled to mature in June 2021.
+Added: The Company never received the proceeds and accrued interest from the investment and as such, wrote off the investment during 2022 as the bond issuer defaulted on repayment, and the Company had no recourse.
+Added: NOTE J — EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements consisted of the following as of December 31:
+Added: $ 1,012,958 $ 825,058
Furniture and fixtures
+Added: 225,978 225,978
+Added: 49,143 49,143
Leasehold improvements
+Added: 34,903 34,903
+Added: 1,322,982 1,135,082
Less accumulated depreciation and amortization
−Removed: Depreciation was $ 43,794  and $ 54,649 for 2022 and 2021, respectively.
+Added: ( 1,102,805 ) ( 1,027,669 )
+Added: $ 220,177 $ 107,413
+Added: Depreciation was $ 75,136 and $ 43,794 for 2023 and 2022 , respectively.
Amounts are recorded in selling, general, and administrative expense as well as in cost of services.
−Removed: NOTE K —
−Removed: INTANGIBLE ASSETS AND GOODWILL
+Added: NOTE K — INTANGIBLE ASSETS AND GOODWILL
Intangible assets consisted of the following as of December 31:
+Added: $ 130,000 $ 130,000
Proprietary software
+Added: 420,000 420,000
Customer relationships
+Added: 1,692,860 1,692,860
Patents and patents pending
+Added: 365,080 365,080
+Added: 2,607,940 2,607,940
Less accumulated amortization
+Added: ( 1,199,950 ) ( 845,115 )
+Added: $ 1,407,990 $ 1,762,825
Aggregate amortization expense for 2023 and 2022 was approximately $ 355,000 and $ 298,000 , respectively.
1 unchanged sentence
Years ending December 31
−Removed: The Company conducted its annual impairment analysis of its goodwill balances as at December 31, 2022.
−Removed: The Company noted the noted the cyclical downturn in technology stock values over the 2022 period, since our previous annual impairment assessment.
−Removed: The analysis showed the carrying value of the Company’s reporting segment was in excess of the Company’s market valuation as at December 31, 2022 based on a fair valuation measure as the quoted market price for the Company’s publicly traded stock as of that date.
−Removed: Accordingly, the Company concluded the amounts in goodwill had been fully impaired and accordingly wrote-off the entire balance in full as at December 31, 2022.
−Removed: NOTE L —
−Removed: ACCRUED LIABILITIES
+Added: The Company concluded the amounts in goodwill had been fully impaired and accordingly wrote-off the entire balance in full as at December 31, 2022.
+Added: NOTE L — ACCRUED LIABILITIES
Accrued liabilities consisted of the following as of December 31:
+Added: $ 326,007 $ 377,958
Compensated absences
+Added: 327,252 378,874
Accrued legal and accounting fees
−Removed: Franchise taxes
+Added: 264,976 110,008
+Added: 152,986 7,000
Employee expenses reimbursement
+Added: 124,209 114,209
Sales tax payable
−Removed: NOTE M —
−Removed: CONVERTIBLE NOTE PAYABLE
+Added: 19,282 17,594
+Added: $ 1,305,848 $ 1,009,123
+Added: NOTE M — CONVERTIBLE NOTE PAYABLE
Securities Purchase Agreement dated December 22, 2022
−Removed: On December 22, 2022, the Company entered into and closed a securities purchase agreement (the “Purchase Agreement”) which issued a $ 2,200,000 principal amount senior secured promissory note (the “Note”).
+Added: On December 22, 2022, the Company entered into and closed a securities purchase agreement (the “Purchase Agreement”) which issued a $ 2,200,000 principal amount senior secured promissory note (the “Note”).
At closing, a total of $ 2,002,000 was funded, with the proceeds to be used for general working capital.
−Removed: The principal amount of the Note is due six months following the date of issuance, subject to one six-month extension by the Company.
−Removed: Interest under the Note accrues at a rate of 10 % per annum, payable monthly through month six.
−Removed: In the event the maturity date of the Note is extended, interest will accrue at the rate of 12 % per annum in months seven through twelve, payable monthly.
−Removed: The Note is secured by a lien on substantially all of the Company’s assets and properties can be prepaid in whole or in part without penalty at any time.
−Removed: In connection with the issuance of the Note, the Company issued to the investor 700,000 shares of Common Stock (the “Commitment Shares”) valued at $ 1.00 per share and a warrant (the “Warrant”) to purchase 200,000 shares of common stock (the “Warrant Shares”) at an exercise price of $ 3.00 per share, exercisable commencing on the date of issuance with a term of five years.
+Added: The principal amount of the Note was due six months following the date of issuance, subject to one six -month extension by the Company.
+Added: Interest under the Note accrues at a rate of 10 % per annum, payable monthly through month six and at the rate of 12 % per annum in months seven through twelve, payable monthly.
+Added: The Note is secured by a lien on substantially all of the Company’s assets and properties can be prepaid in whole or in part without penalty at any time.
+Added: In connection with the issuance of the Note, the Company issued to the investor 38,889 shares of Common Stock (the “Commitment Shares”) valued at $ 18.00 per share and a warrant (the “Warrant”) to purchase 11,112 shares of common stock (the “Warrant Shares”) at an exercise price of $ 54.00 per share, exercisable commencing on the date of issuance with a term of five years.
The warrant was valued at $ 94,316 (see Note P.
−Removed: In the event the Note is paid in full within six months after the date of issuance, the Company will exercise its right to repurchase 350,000 of the Commitment Shares for aggregate payment to the Investor of $1.00.
−Removed: Upon issuance, the Note is not convertible into common stock or any other securities of the Company.
−Removed: Only after a date that is six (6) months following the issuance date of the Note and upon the occurrence of any events of default (as defined) and expiration of any applicable cure periods, all amounts due under the Note will immediately and automatically become due and payable in full, interest will accrue at the higher of 18 % per annum or the maximum amount permitted by applicable law, the outstanding principal amount due under the Note will be increased by 30 %, and the Investor will have the right to convert all amounts due under the Note into shares of common stock (the “Conversion Shares”) at a conversion price equal to the 10 day volume weighted average sales price of the Company’s common stock on the date of conversion, subject to the Share Cap described in the paragraph below.
−Removed: The aggregate number of shares of common stock issuable in the forgoing transaction consisting of the Commitment Shares, the Warrant Shares, and the Conversion Shares are capped at 1,684,576 which is 19.9 % of the Company’s issued and outstanding shares of common stock on December 22, 2022, the date the definitive transaction documents were executed (the “Share Cap”).
−Removed: During April 2023, we were in default under the Note due to our failure to timely file this annual report and timely file a registration statement covering the public resale of the shares issued to the holder of the Note in connection with the financing.
−Removed: We have obtained a waiver and, therefore, as of the date of this report we are not in default.
−Removed: As of December 31, 2022, the Note with principal balance of $ 2,200,000 , at fair value, was recorded at $ 2,596,203 .
−Removed: NOTE N —
−Removed: The Company’s leases office space in New Jersey, Minnesota, New Hampshire, Madrid and Hong-Kong with lease termination dates in 2023 and 2024.
+Added: On October 31, 2023 the Company repaid $ 1,400,000 of principal due under the Note, and on December 21, 2023 the Company repaid the remaining principal balance of $ 800,000 due under the Note.
+Added: As of December 31, 2023 , the Note was paid in full.
+Added: NOTE N — LEASES
+Added: The Company’s leases office space in New Jersey, Minnesota, New Hampshire, Madrid and Hong Kong with lease termination dates in 2023 and 2024.
The property leased in China is paid monthly as used, without a formal agreement.
1 unchanged sentence
Operating lease cost
+Added: $ 166,161 $ 254,649
Total lease cost
+Added: $ 166,161 $ 254,649
Balance sheet information
Operating right-of-use assets
+Added: $ 36,905 $ 197,355
Operating lease liabilities, current portion
+Added: $ 37,829 $ 159,665
Operating lease liabilities, non-current portion
Total operating lease liabilities
−Removed: Weighted average remaining lease term (in years) –
−Removed: operating leases
−Removed: Weighted average discount rate –
−Removed: operating leases
+Added: $ 37,829 $ 197,494
+Added: Weighted average remaining lease term (in years) – operating leases
+Added: Weighted average discount rate – operating leases
+Added: 5.50 % 5.50 %
Supplemental cash flow information related to leases were as follows:
Cash paid for amounts included in the measurement of operating lease liabilities
+Added: $ 213,783 $ 259,558
Maturities of operating lease liabilities were as follows as of December 31, 2023:
1 unchanged sentence
imputed interest
−Removed: NOTE O —
−Removed: COMMITMENTS AND CONTINGENCIES
+Added: NOTE O — COMMITMENTS AND CONTINGENCIES
Distribution Agreement
−Removed: Swivel Secure has a distribution agreement with Swivel Secure Limited (“SSL”).
+Added: Swivel Secure has a distribution agreement with Swivel Secure Limited (“SSL”).
Terms of the agreement include the following:
The initial term of the agreement ends on January 31, 2027 and will be automatically extended for additional one -year terms thereafter unless either party provides written notice to the other party not later than 30 days before the end of the term that it does not wish to extend the term.
−Removed: SSL appoints Swivel Secure as the exclusive distributor of SSL’s products, to market, sell and distribute in the EMEA (Europe, Middle East and Africa), excluding the United Kingdom and Republic of Ireland, for a defined discount on the sale price.
+Added: SSL appoints Swivel Secure as the exclusive distributor of SSL’s products, to market, sell and distribute in the EMEA (Europe, Middle East and Africa), excluding the United Kingdom and Republic of Ireland, for a defined discount on the sale price.
Swivel Secure is expected to generate a certain minimum level of orders of SSL products each year during the term of the agreement.
3 unchanged sentences
As of December 31, 2023 , the Company was not a party to any pending lawsuits.
−Removed: NOTE P —
+Added: NOTE P — EQUITY
Preferred Stock
−Removed: Within the limits and restrictions provided in the Company’s Certificate of Incorporation, the Board of Directors has the authority, without further action by the shareholders, to issue up to 5,000,000 shares of preferred stock, $ .0001 par value per share, in one or more series, and to fix, as to any such series, any dividend rate, redemption price, preference on liquidation or dissolution, sinking fund terms, conversion rights, voting rights, and any other preference or special rights and qualifications.
+Added: Within the limits and restrictions provided in the Company’s Certificate of Incorporation, the Board of Directors has the authority, without further action by the shareholders, to issue up to 5,000,000 shares of preferred stock, $.
+Added: 0001 par value per share, in one or more series, and to fix, as to any such series, any dividend rate, redemption price, preference on liquidation or dissolution, sinking fund terms, conversion rights, voting rights, and any other preference or special rights and qualifications.
Holders of common stock have equal rights to receive dividends when, as and if declared by the Board of Directors, out of funds legally available therefor.
3 unchanged sentences
All outstanding shares of common stock are fully paid and nonassessable.
−Removed: On June 18, 2021, the stockholders approved the 2021 Employee Stock Purchase Plan (“ESPP”).
−Removed: Under the terms of this plan, 789,000 shares of common stock are reserved for issuance to employees and officers of the Company at 85 % of the lower of the closing price of the common stock as reported on the Nasdaq Capital Market at the first day or the last day of the offering period.
−Removed: Eligible employees are granted an option to purchase shares under the plan funded by payroll deductions.
−Removed: The Board may suspend or terminate the plan at any time, otherwise the plan expires June 17, 2031.
Issuances of Common Stock
2 unchanged sentences
On March 8, 2022, the Company issued 14,948 shares of common stock of which 4,983 shares were held back by the Company to secure certain indemnification obligations under the Swivel Secure stock purchase agreement.
−Removed: The shares of Company common stock were issued at a total cost of $ 600,004 , priced at $ 2.23 , based on the contractual 20-day volume-weighted average price of the Company’s common stock immediately prior to the payment date as reported on the Nasdaq Capital Market
+Added: The shares of Company common stock were issued at a total cost of $ 600,004 , priced at $ 40.14 , based on the contractual 20 -day volume-weighted average price of the Company’s common stock immediately prior to the payment date as reported on the Nasdaq Capital Market.
On June 18, 2021, the stockholders approved the 2021 Employee Stock Purchase Plan.
13 unchanged sentences
During the 2023 and 2022 years, the Company issued 3,078 and 2,202 shares of common stock respectively to its directors in lieu of payment of board fees, valued at $ 39,007 and $ 76,043 respectively.
−Removed: There were no warrants issued during 2021.
Warrants Issued with Convertible Note:
−Removed: See Note M - Convertible Note Payable for the warrant issued with a convertible note in 2022.
+Added: See Note M - Convertible Note Payable for the warrant issued with a convertible note in 2022.
Valuation Assumptions for Warrants:
The Company records the warrants at their fair value which is determined using the Black-Scholes valuation model on the date of the grant.
−Removed: The fair value of the warrant issued in 2022 was estimated with the following assumptions:
+Added: The fair value of the warrants issued in 2023 and 2022 were estimated with the following assumptions:
Weighted average risk-free interest rate
+Added: 4.63 % 3.70 %
Weighted average exercise price
+Added: $ 3.15 $ 3.00
Weighted average exercise period
Weighted average Volatility of stock price
−Removed: The volatility for each issuance is determined based on the review of the experience of the weighted average of historical daily price changes of the Company’s common stock over the expected exercise period.
+Added: The volatility for each issuance is determined based on the review of the experience of the weighted average of historical daily price changes of the Company’s common stock over the expected exercise period.
The risk-free rate is based on the U.S.
2 unchanged sentences
Outstanding, as of December 31, 2021
+Added: 260,525 106.42 3.48 —
+Added: ( 965 ) 518.40
Outstanding, as of December 31, 2022
+Added: 270,672 $ 104.95 2.59 —
+Added: 2,534,148 3.15
+Added: ( 177,890 ) 0.0018
Outstanding, as of December 31, 2023
−Removed: The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $ 0.59 , $ 2.21 , and $ 3.52 as of December 31, 2022, 2021 and 2020, respectively, which would have been received by the warrant holders had all warrant holders exercised their options as of that date.
+Added: 2,626,492 $ 19.09 4.37 —
+Added: The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $ 3.00 , $ 10.62 , and $ 39.78 as of December 31, 2023, 2022 and 2021 , respectively, which would have been received by the warrant holders had all warrant holders exercised their options as of that date.
There were no in-the-money warrants exercisable as of December 31, 2023, 2022 and 2021 .
−Removed: NOTE Q —
−Removed: STOCK OPTIONS
+Added: NOTE Q — STOCK OPTIONS
+Added: 2023 Stock Incentive Plan
+Added: On December 14, 2024, the stockholders approved the 2023 Stock Incentive Plan.
+Added: The 2023 Plan reserves 333,334 shares of common stock for issuance of options, restricted stock, and other equity based awards to employees, officers, directors, consultants advisors and independent contractors of the Company.
+Added: Options are issued at exercise prices which may not be below 100 % of fair market value (or 110 % of the fair market value if, at the time the option is granted, the participant owns, directly or indirectly, more than 10% of the total combined voting power of all classes of our stock) and have terms not to exceed ten years.
+Added: Options issued under the 2023 Plan vest pursuant to the terms of stock option agreements with the recipients.
+Added: In the event of a change in control, certain awards issued under this plan may be subject to additional acceleration of vesting as may be provided in the participants’ written agreement.
+Added: The 2023 Plan expires on December 13, 2033, unless terminated earlier.
+Added: No awards have yet been granted under the 2023 Plan.
2015 Stock Option Plan
−Removed: On January 27, 2016, the stockholders approved the 2015 Equity Incentive Plan (the “2015 Plan”).
+Added: On January 27, 2016, the stockholders approved the 2015 Equity Incentive Plan (the “2015 Plan”).
The 2015 Plan initially reserved 10,417 shares of common stock for issuance of options, restricted stock, and other equity based awards to employees, officers, directors, and consultants of the Company.
1 unchanged sentence
The term of stock options granted under the 2015 Plan, may not exceed ten years, exercise prices may not be below 100 - 110 % of fair market value, and vesting occurs over time periods set forth in written agreements with the recipients.
−Removed: In the event of a change in control, certain stock awards issued under the 2015 Plan may be subject to additional acceleration of vesting as may be provided in the participants’
−Removed: written agreement.
+Added: In the event of a change in control, certain stock awards issued under the 2015 Plan may be subject to additional acceleration of vesting as may be provided in the participants’ written agreement.
The 2015 Plan expires in December 2025.
Non-Plan Stock Options
−Removed: Periodically, the Company has granted options outside of the 2015 Plan to various employees and consultants.
+Added: Periodically, the Company has granted options outside of the 2015 Plan to various employees and consultants.
In the event of change in control, as defined, certain of the non-plan options outstanding vest immediately.
3 unchanged sentences
Outstanding, as of December 31, 2021
+Added: 5,072 6,771 11,843 $ 299.61 3.03 $ 0
+Added: — ( 530 ) ( 530 ) 311.11
Outstanding, as of December 31, 2022
+Added: 5,072 6,241 11,313 $ 299.07 2.07 $ 0
+Added: ( 151 ) — ( 151 ) 94.44
+Added: ( 1,548 ) ( 348 ) ( 1,896 ) 256.30
Outstanding, as of December 31, 2023
+Added: 3.373 5,893 9,266 $ 311.16 0.96 $ 0
Vested or expected to vest at December 31, 2023
+Added: 9,266 $ 311.16 0.96 $ 0
Exercisable at December 31, 2023
+Added: 9,266 $ 311.16 0.96 $ 0
The options outstanding and exercisable at December 31, 2023 were in the following exercise price ranges:
3 unchanged sentences
life (in years)
−Removed: The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $ 0.59 , $ 2.21 , and $ 3.52 as of December 31, 2022, 2021 and 2020, respectively, which would have been received by the option holders had all option holders exercised their options as of that date.
+Added: $93.60 - 169.92
+Added: 2,205 $ 136.65 2.85 2,205 $ 136.65
+Added: $169.93 - 504.00
+Added: 7,061 365.66 0.38 7,061 365.66
+Added: $93.60 - 504.00
+Added: The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $ 3.00 , $ 10.62 , and $ 39.78 as of December 31, 2023, 2022 and 2021 , respectively, which would have been received by the option holders had all option holders exercised their options as of that date.
There were no in-the-money options exercisable as of December 31, 2023, 2022 and 2021 .
The weighted average fair value of options granted during the years ended December 31, 2023 and 2022 was $ 0 as no options were granted in either year.
−Removed: The total intrinsic value of options exercised during the years ended December 31, 2022 and 2021 was $ 0 as no options were exercised in either year.
+Added: The total intrinsic value of options exercised during the years ended December 31, 2023 and 2022 was $ 0 as no options were exercised in either year.
The total fair value of shares vested during the years ended December 31, 2023 and 2022 was $ 18,310 and $ 100,668 , respectively.
−Removed: As of December 31, 2022, future forfeiture adjusted compensation cost related to nonvested stock options is $ 17,630 and will be recognized over an estimated weighted average period of 0.64 years.
−Removed: NOTE R —
+Added: As of December 31, 2023 , there was no future forfeiture adjusted compensation costs related to nonvested stock options.
+Added: NOTE R — INCOME TAXES
The components of net loss consist of the following:
United States
+Added: $ ( 7,279,970 ) $ ( 10,416,593 )
+Added: ( 627,146 ) ( 458,839 )
+Added: ( 203,700 ) ( 143,499 )
+Added: ( 411,021 ) ( 890,972 )
+Added: $ ( 8,521,837 ) $ ( 11,909,903 )
There was no provision for current federal, foreign or state taxes for both of the years ended December 31, 2023 and 2022 as a result of taxable losses incurred in these jurisdictions.
The provision for income tax benefits consist of the following (in thousands):
−Removed: Current –
−Removed: federal, states, and foreign
+Added: Current – federal,
Deferred- Federal
−Removed: Deferred - States
−Removed: Deferred - Foreign
+Added: ( 175,000 ) ( 20,434 )
+Added: ( 134,014 ) 1,276,566
Change in valuation allowance
−Removed: Provision for income tax benefits
+Added: ( 1,297,000 )
+Added: Provision for income tax expense (benefit)
+Added: $ ( 134,014 ) $ ( 20,434 )
Significant components of deferred tax assets and liabilities are as follows at December 31, 2023 and 2022 (in thousands):
Accrued compensation
+Added: $ 112,201 $ 113,000
Allowance for doubtful accounts
+Added: 90,405 169,000
Research and development expenses
+Added: 1,017,551 633,000
Capital loss carry forward
+Added: 114,251 114,000
Stock-based compensation
+Added: 32,408 456,000
Equipment and leasehold improvements
+Added: ( 12,353 ) ( 19,000 )
Intangible assets - US
Intangible assets - Foreign
+Added: ( 145,000 ) ( 170,000 )
+Added: Reserve - Foreign
Inventory reserve
+Added: 828,668 89,000
Interest expense
Operating lease liabilities
−Removed: Reserve on debt security
Operating lease right-of-use assets
+Added: 206 ( 44,000 )
Net operating loss and research and credit carryforwards
+Added: 13,277,118 15,248,000
Valuation allowance
+Added: ( 17,214,690 ) ( 17,188,000 )
Net deferred tax liability
−Removed: During the year ended December 31, 2022, the Company determined that certain attributes of deferred tax assets and liabilities were incorrect for December 31, 2021 and 2020.
−Removed: See Note S for further information.
+Added: $ - $ ( 170,000 )
The Company has a valuation allowance against the full amount of its net deferred taxes due to the uncertainty of realization of the deferred tax assets due to operating loss history of the Company.
13 unchanged sentences
Expiration of net operating loss and research credit carryforwards
+Added: ( 7.84 ) ( 5.7 )
Expiration and forfeiture of stock options
+Added: foreign rate differential
+Added: ( 9.08 ) ( 0.5 )
Valuation allowance
+Added: ( 0.24 ) ( 10.9 )
Effective tax rate
−Removed: The Company has not been audited by the Internal Revenue Service (“IRS”) or any states in connection with income taxes.
+Added: (2.5 )% ( 0.2 )%
+Added: The Company has not been audited by the Internal Revenue Service (“IRS”) or any states in connection with income taxes.
The Company files income tax returns in the U.S.
1 unchanged sentence
The periods from 2019 through 2022 remain open to examination by the IRS and state jurisdictions.
−Removed: Our subsidiary in Nigeria has not filed its required returns since inception.
+Added: The Company's subsidiary in Nigeria has not filed its required returns since inception.
Management believes that when the returns are filed, no taxes will be owed due to the losses incurred during those periods.
−Removed: We are also not subject to minimum tax during the first four years of operations.
+Added: The Company is not subject to minimum tax during the first four years of operations.
As a result, management could not calculate the amount of net operating loss carryforwards that are available to offset future taxable income.
−Removed: Our subsidiary in Hong Kong has not filed its required returns in several years.
+Added: The Company's subsidiary in Hong Kong has not filed its required returns in several years.
Management believes that when the returns are filed, no taxes will be owed due to losses incurred during those periods.
1 unchanged sentence
The Company believes it is not subject to any tax audit risk beyond those periods.
−Removed: The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.
+Added: The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.
The Company does not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense incurred during the years ended December 31, 2023 and 2022 .
−Removed: In August 2022, the Inflation Reduction Act of 2022 was signed into law which includes a stock buyback excise tax of 1% on share repurchases, which will apply to net stock buybacks after December 31, 2022.
−Removed: We do not expect this to have a material impact if and when share repurchases occur.
−Removed: NOTE S —
−Removed: REVISION OF PREVIOUSLY ISSUED CONSOLDATED FINANCIAL STATEMENTS
−Removed: Due to errors discovered in the Company’s 2020 and 2021 tax provisions, the Company revised certain previously issued disclosures related to the components of its deferred tax assets and liabilities and valuation allowance as of December 31, 2021 and 2020.
−Removed: Additionally, the Company has revised the reconciliation of its income tax rate computed using the federal statutory rate for the year ended December 31, 2021.
−Removed: The errors related primarily to the calculation of available net operating loss carryforwards and to stock based compensation.
−Removed: Since the Company provided a full valuation allowance on its net deferred tax assets, there was no impact to the Consolidated Balance Sheet as of December 31, 2021 and the consolidated statements of operations, stockholders’
−Removed: equity and cash flows as of and for the year ended December 31, 2021.
−Removed: The Company further reviewed its disclosure of the rate reconciliation and deferred tax calculation along with the valuation allowance of its net deferred tax assets.
−Removed: Other items that were corrected in the disclosure included allowance for doubtful accounts, equipment and leasehold improvements and operating lease liability along with the associated operating lease ROU assets.
−Removed: The below table summarizes the revisions to the reconciliation of our income tax rate computed using the federal statutory rate to our actual income tax rate for the year ended December 31, 2021:
−Removed: statutory income tax rate
−Removed: State taxes, net of federal benefit
−Removed: Permanent differences
−Removed: Expiration of net operating loss and research credit carryforwards
−Removed: Expiration and forfeiture of stock options
−Removed: Valuation allowance
−Removed: Effect of net operating loss
−Removed: The table below summarizes the revisions to the attributes of the deferred tax assets and liabilities as of December 31, 2021 (in thousands):
−Removed: Accrued compensation
−Removed: Allowance for doubtful accounts
−Removed: Stock based compensation
−Removed: Equipment and leasehold improvements
−Removed: Intangible assets
−Removed: Operating lease liability
−Removed: Reserve on debt security
−Removed: Operating lease right-of -use assets
−Removed: Net operating loss and research credit carryforwards
−Removed: Valuation allowance
−Removed: Net deferred tax assets
−Removed: The table below summarizes the revisions to the attributes of the deferred tax assets and liabilities as of December 31, 2020 (in thousands):
−Removed: Accrued compensation
−Removed: Allowance for doubtful accounts
−Removed: Stock based compensation
−Removed: Equipment and leasehold improvements
−Removed: Intangible assets
−Removed: Operating lease liability
−Removed: Operating lease right-of -use assets
−Removed: Net operating loss and research credit carryforwards
−Removed: Valuation allowance
−Removed: Net deferred tax assets
−Removed: NOTE T —
−Removed: PROFIT SHARING PLAN
The Company has established a savings plan under section 401 (k) of the Internal Revenue Code.
3 unchanged sentences
The Company made no matching contributions during the years ended December 31, 2023 and 2022 .
−Removed: NOTE U —
−Removed: EARNINGS PER SHARE (EPS)
+Added: NOTE T — EARNINGS PER SHARE (EPS)
+Added: The following table summarizes the weighted average securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive.
+Added: Years ended December 31,
+Added: Stock options
Items excluded from the diluted per share calculation because the exercise price was greater than the average market price of the common shares:
1 unchanged sentence
Stock options
−Removed: NOTE V —
−Removed: SUBSEQUENT EVENTS
+Added: 270,234 270,672
+Added: 279,500 281,985
+Added: NOTE U — QUARTERLY FINANCIAL DATA (UNAUDITED AND RESTATED)
+Added: The Company is providing restated quarterly unaudited consolidated financial information for interim periods occurring within the year ended December 31, 2023.
+Added: The need for the restatement arose out of the results of certain financial analysis the Company performed in the course of preparing its fiscal year-end 2023 consolidated financial statements.
+Added: In the course of the audit of the Company’s consolidated financial statements for the fiscal year ended December 31, 2023, the Company determined that certain errors were made which require the restatement of the Company’s previously issued financial statements for the interim periods occurring within the year ended December 31, 2023.
+Added: These errors resulted in the overstatement of accounts receivable and revenue, understatements in certain allowances for accounts receivable and certain reserves for inventory, and an understatement of net loss and total stockholders’ equity which errors may also impact other amounts included in the financial statements.
+Added: The Company attributes the errors principally to a material weakness in internal controls over the recording and processing of revenues, allowances for accounts receivable and certain reserves for inventory, which the Company is working to remediate in fiscal year 2024.
+Added: The restated consolidated balance sheet line items for the first, second and third fiscal quarters of 2023 are as follows:
+Added: Originally Reported
+Added: Three Months Ended Six Months Ended Nine Months Ended Three Months Ended Six Months Ended Nine Months Ended Three Months Ended Six Months Ended Nine Months Ended
+Added: March 31, 2023
+Added: June 30, 2023
+Added: September 30, 2023
+Added: March 31, 2023
+Added: June 30, 2023
+Added: September 30, 2023
+Added: March 31, 2023
+Added: June 30, 2023
+Added: September 30, 2023
+Added: Accounts receivable, net
+Added: $ 3,362,203 $ 3,178,785 $ 2,799,218 $ ( 900,000 ) $ ( 1,100,000 ) $ ( 1,300,000 ) $ 2,462,203 $ 2,078,785 $ 1,499,218
+Added: 4,427,815 4,384,098 4,289,213 ( 500,000 ) ( 1,500,000 ) ( 2,500,000 ) 3,927,815 2,884,098 1,789,213
+Added: Total current assets
+Added: 8,936,084 8,531,330 7,820,339 ( 1,400,000 ) ( 2,600,000 ) ( 3,800,000 ) 7,536,084 5,931,330 4,020,339
+Added: Accumulated deficit
+Added: ( 116,773,695 ) ( 118,196,573 ) ( 118,834,397 ) ( 1,400,000 ) ( 2,600,000 ) ( 3,800,000 ) ( 118,173,695 ) ( 120,796,573 ) ( 122,634,397 )
+Added: Total Stockholders' Equity
+Added: 5,156,755 3,845,091 3,314,451 ( 1,400,000 ) ( 2,600,000 ) ( 3,800,000 ) 3,756,755 1,245,091 ( 485,549 )
+Added: Total Liabilities and Stockholders' Equity
+Added: 11,106,057 10,583,245 9,749,380 ( 1,400,000 ) ( 2,600,000 ) ( 3,800,000 ) 9,706,057 7,983,245 5,949,380
+Added: The restated line items of the consolidated statements of comprehensive income for the three -month periods ended March 31, 2023, June 30, 2023, and September 30, 2023 are as follow:
+Added: Originally Reported
+Added: $ 2,478,556 $ 1,235,771 $ 950,015 $ ( 900,000 ) - - $ 1,578,556 $ 1,235,771 $ 950,015
+Added: Total revenues
+Added: 3,083,767 1,928,929 1,817,108 ( 900,000 ) - - 2,183,767 1,928,929 1,817,108
+Added: Cost of hardware - Reserve
+Added: - - - 500,000 1,000,000 1,000,000 500,000 1,000,000 1,000,000
+Added: Total costs and other expenses
+Added: 820,274 606,111 476,604 500,000 1,000,000 1,000,000 1,320,274 1,606,111 1,476,604
+Added: 2,263,493 1,322,818 1,340,504 ( 1,400,000 ) ( 1,000,000 ) ( 1,000,000 ) 863,493 322,818 340,504
+Added: Selling, general and administrative
+Added: 1,931,732 1,943,164 1,547,376 - 200,000 200,000 1,931,732 2,143,164 1,747,376
+Added: Total Operating Expenses
+Added: 2,621,891 2,501,345 2,106,062 - 200,000 200,000 2,621,891 2,701,345 2,306,062
+Added: Operating loss
+Added: ( 358,398 ) ( 1,178,527 ) ( 765,558 ) ( 1,400,000 ) ( 1,200,000 ) ( 1,200,000 ) ( 1,758,398 ) ( 2,378,527 ) ( 1,965,558 )
+Added: Loss before provision for income tax
+Added: ( 288,322 ) ( 1,279,878 ) ( 638,013 ) ( 1,400,000 ) ( 1,200,000 ) ( 1,200,000 ) ( 1,688,322 ) ( 2,479,878 ) ( 1,838,013 )
+Added: ( 288,322 ) ( 1,422,878 ) ( 637,824 ) ( 1,400,000 ) ( 1,200,000 ) ( 1,200,000 ) ( 1,688,322 ) ( 2,479,878 ) ( 1,838,013 )
+Added: Comprehensive Net loss
+Added: ( 288,322 ) ( 1,422,878 ) ( 637,824 ) ( 1,400,000 ) ( 1,200,000 ) ( 1,200,000 ) ( 1,688,322 ) ( 2,479,878 ) ( 1,838,013 )
+Added: Comprehensive loss
+Added: ( 216,176 ) ( 1,402,994 ) ( 602,460 ) ( 1,400,000 ) ( 1,200,000 ) ( 1,200,000 ) ( 1,616,176 ) ( 2,459,994 ) ( 1,802,649 )
+Added: Basic and Diluted Loss per Common Share
+Added: ( 0.52 ) ( 2.56 ) ( 1.12 ) ( 2.52 ) ( 2.16 ) ( 2.11 ) ( 3.04 ) ( 4.45 ) ( 3.22 )
+Added: The restated line items of the consolidated statements of comprehensive income for the six -month period ended June 30, 2023 and nine -month period ended September 30, 2023 are as follows:
+Added: Originally Reported
+Added: Six Months Ended
+Added: Nine Months Ended
+Added: Six Months Ended
+Added: Nine Months Ended
+Added: Six Months Ended
+Added: Nine Months Ended
+Added: June 30, 2023
+Added: September 30, 2023
+Added: June 30, 2023
+Added: September 30, 2023
+Added: June 30, 2023
+Added: September 30, 2023
+Added: $ 3,714,327 $ 4,664,341 $ ( 900,000 ) $ ( 900,000 ) $ 2,814,327 $ 3,764,341
+Added: Total revenues
+Added: 5,012,696 6,829,804 ( 900,000 ) ( 900,000 ) 4,112,696 5,929,804
+Added: Cost of hardware - reserve
+Added: - - 1,500,000 2,500,000 1,500,000 2,500,000
+Added: Total costs and other expenses
+Added: 1,426,385 1,902,989 1,500,000 2,500,000 2,926,385 4,402,989
+Added: 3,586,311 4,926,815 ( 2,400,000 ) ( 3,400,000 ) 1,186,311 1,526,815
+Added: Selling, general and administrative
+Added: 3,874,896 5,422,272 200,000 400,000 4,074,896 5,822,272
+Added: Total Operating Expenses
+Added: 5,123,237 7,229,298 200,000 400,000 5,323,237 7,629,298
+Added: Operating loss
+Added: ( 1,536,926 ) ( 2,302,483 ) ( 2,600,000 ) ( 3,800,000 ) ( 4,136,926 ) ( 6,102,483 )
+Added: Loss before provision for income tax
+Added: ( 1,568,200 ) ( 2,206,212 ) ( 2,600,000 ) ( 3,800,000 ) ( 4,168,200 ) ( 6,006,212 )
+Added: ( 1,711,200 ) ( 2,349,023 ) ( 2,600,000 ) ( 3,800,000 ) ( 4,311,200 ) ( 6,149,023 )
+Added: Comprehensive net loss
+Added: ( 1,711,200 ) ( 2,349,023 ) ( 2,600,000 ) ( 3,800,000 ) ( 4,311,200 ) ( 6,149,023 )
+Added: Comprehensive loss
+Added: ( 1,619,170 ) ( 2,221,629 ) ( 2,600,000 ) ( 3,800,000 ) ( 4,219,170 ) ( 6,021,629 )
+Added: Basic and Diluted Loss per Common Share
+Added: ( 3.07 ) ( 4.12 ) ( 4.67 ) ( 6.67 ) ( 7.74 ) ( 10.79 )
+Added: NOTE V — SUBSEQUENT EVENTS
+Added: On January 4, 2024, the Company issued 347,000 shares of common stock upon the exercise of prefunded warrants.
+Added: On January 5, 2024, the Company issued 142,000 shares of common stock upon the exercise of prefunded warrants.
+Added: On January 12, 2024, the Company issued 158,000 shares of common stock upon the exercise of prefunded warrants.
+Added: On February 15, 2024, 243 shares of restricted common stock were forfeited by employees who left the Company before the lapse of the restriction period applicable to such shares.
+Added: On March 21, 2024, 73 shares of restricted common stock were forfeited by employees who left the Company before the lapse of the restriction period applicable to such shares.
On March 27, 2024, the Company issued 4,287 shares of common stock to its directors in payment of board fees.
−Removed: On March 16, 2023, the Company issued an aggregate of 40,000 shares of restricted common stock to new employees which vest in equal annual installments over a three-year period from the date of grant.
−Removed: On May 5, 2023, the Company issued 2,858 shares of common stock to its directors in payment of board committee fees.
−Removed: On May 5, 2023, the Company received 14,375  shares of restricted common stock from employees who left the Company before the vesting period was completed.
−Removed: On May 11, 2023, the Company issued 17,392 shares of common stock to its directors in payment of board fees.
−Removed: On May 11, 2023, the Company issued 2,900 shares of common stock to its directors in payment of board committee fees.
−Removed: EXHIBIT  
−Removed: Exhibit  
+Added: On May 6, 2024, 186 shares of restricted common stock were forfeited by an employee who left the Company before the lapse of the restriction period applicable to such shares.
+Added: EXHIBIT INDEX
Stock Purchase Agreement by and among the Company, Thomas J.
15 unchanged sentences
Certificate of Amendment of Certificate of Incorporation of Bio-Key International, Inc., a Delaware corporation (incorporated by reference to Exhibit 3.1 to the current report on Form 8-K, filed with the SEC on November 19, 2020)
+Added: Certificate of Amendment to Certificate of Incorporation of BIO-key International, Inc., a Delaware corporation (incorporated by reference to Exhibit 3.1 to the current report on Form 8-K filed with the SEC on December 19, 2023)
Specimen Stock Certificate (incorporated by reference to Exhibit 4.1 to the registration statement on Form SB-2, File No.
+Added: Common Stock Purchase Warrant dated May 6, 2020 (incorporated by reference to Exhibit 10.7 to the quarterly report on Form 10-Q filed with the SEC on June 8, 2020)
+Added: Common Stock Purchase Warrant dated June 29, 2020 (incorporated by reference to Exhibit 10.3 to the current report on Form 8-K filed with the SEC on July 1, 2020)
Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.3 to Amendment No.
2 unchanged sentences
1 to the Registration Statement on Form S-1/A, filed with the SEC on July 17, 2020)
+Added: Form of Common Warrant (incorporated by reference to Exhibit 4.9 to Amendment No.
+Added: 1 to Registration Statement on Form S-1 filed with the SEC on October 26, 2023)
+Added: Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.10 to Amendment No.
+Added: 1 to the Registration Statement on Form S-1, filed with the SEC on October 26, 2023)
Form of Warrant Agency Agreement (incorporated by reference to Exhibit 4.11 to Amendment No.
−Removed: 2 to the Registration Statement on Form S-1/A, filed with the SEC on July 20, 2020)
+Added: 1 to the Registration Statement on Form S-1, filed with the SEC on October 26, 2023)
+Added: Form of Common Warrant (incorporated by reference to Exhibit 4.1 to the current report on Form 8-K filed with the SEC on December 21, 2023)
+Added: Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.2 to the current report on Form 8-K filed with the SEC on December 21, 2023)
BIO-key International, Inc.
2 unchanged sentences
and Mira LaCous dated November 20, 2001 (incorporated by reference to Exhibit 10.39 to the current report on Form 8-K, filed with the SEC on January 22, 2002)
−Removed: BIO-key International, Inc.
−Removed: 2004 Stock Incentive Plan (incorporated by reference to Exhibit 10.48 to amendment no.
−Removed: 1 the registrant’s registration statement on Form SB-2, File No.
−Removed: 33-120104, filed with the SEC on December 14, 2004)***
Employment Agreement, effective March 25, 2010, by and between the Company and Michael W.
6 unchanged sentences
and BRE/DP MN LLC dated September 12, 2013 (incorporated by reference to Exhibit 10.44 to the annual report on Form 10-K, filed with the SEC on March 31, 2014)
−Removed: BIO-key International, Inc.
+Added: BIO-key International, Inc.
2015 Equity Incentive Plan (incorporated by reference to Appendix B to the definitive proxy statement filed with the SEC on December 15, 2015)
5 unchanged sentences
Securities Purchase Agreement dated May 31, 2018 by and between the Registrant and Wong Kwok Fong (Kelvin) (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K, filed with the SEC on June 4, 2018)
−Removed: Underwriting Agreement dated August 22, 2018 by and between the Registrant and Maxim Group LLP (incorporated by reference to Exhibit 1.1 to the current report on Form 8-K, filed with the SEC on August 27, 2018)
−Removed: Form of Common Stock Purchase Warrant dated August 24, 2018 (incorporated by reference to Exhibit 4.1 to the current report on Form 8-K, filed with the SEC on August 27, 2018)
GLP 2nd Amendment to Lease dated July 27, 2018 (incorporated by reference to Exhibit 10.26 to the annual report on Form 10-K, filed with the SEC on April 1, 2019)
5 unchanged sentences
(incorporated by reference to Exhibit 10.2 to the quarterly report on Form 10-Q, filed with the SEC on June 8, 2020)
−Removed: Amended and Restated Senior Secured Convertible Promissory Note, due April 13, 2020 issued by the Company to Lind Global Macro Fund, LP.
−Removed: (incorporated by reference to Exhibit 10.3 to the quarterly report on Form 10-Q, filed with the SEC on June 8, 2020)
−Removed: Amendment to Amended and Restated Senior Secured Convertible Promissory Note, due April 13, 2020 by and between the Company and Lind Global Macro Fund, LP dated April 12, 2020.
−Removed: (incorporated by reference to Exhibit 10.4 to the quarterly report on Form 10-Q, filed with the SEC on June 8, 2020)
−Removed: Securities Purchase Agreement dated May 6, 2020 by and between the Company and Lind Global Macro Fund, LP.
−Removed: (incorporated by reference to Exhibit 10.5 to the quarterly report on Form 10-Q, filed with the SEC on June 8, 2020)
−Removed: $2,415,000 Senior Secured Convertible Promissory Note dated May 6, 2020.
−Removed: (incorporated by reference to Exhibit 10.6 to the quarterly report on Form 10-Q, filed with the SEC on June 8, 2020)
Common Stock Purchase Warrant dated May 6, 2020.
(incorporated by reference to Exhibit 10.7 to the quarterly report on Form 10-Q, filed with the SEC on June 8, 2020)
−Removed: Amended and Restated Security Agreement dated May 6, 2020 by and between the Company and Lind Global Macro Fund, LP.
−Removed: (incorporated by reference to Exhibit 10.8 to the quarterly report on Form 10-Q, filed with the SEC on June 8, 2020)
−Removed: Amendment No.
−Removed: 2 to Amended and Restated Senior Secured Convertible Promissory Note, due April 13, 2020 by and between the Company and Lind Global Macro Fund, LP dated May 13, 2020.
−Removed: (incorporated by reference to Exhibit 10.9 to the quarterly report on Form 10-Q, filed with the SEC on June 8, 2020)
−Removed: Securities Purchase Agreement dated June 29, 2020 by and between the Company and Lind Global Macro Fund, LP (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K, filed with the SEC on July 1, 2020)
−Removed: $1,811,250 Senior Secured Convertible Promissory Note dated June 29, 2020.
−Removed: (incorporated by reference to Exhibit 10.2 to the current report on Form 8-K, filed with the SEC on July 1, 2020)
−Removed: Common Stock Purchase Warrant dated June 29, 2020.
−Removed: (incorporated by reference to Exhibit 10.3 to the current report on Form 8-K, filed with the SEC on July 1, 2020)
−Removed: Second Amended and Restated Security Agreement dated June 29, 2020 by and between the Company and Lind Global Macro Fund, LP (incorporated by reference to Exhibit 10.4 to the current report on Form 8-K, filed with the SEC on July 1, 2020)
−Removed: $500,000 Promissory note, dated June 30, 2020 (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on July 7, 2020)
Form of Restricted Stock Award Agreement under the BIO-key International, Inc.
9 unchanged sentences
Securities Purchase Agreement dated December 22, 2022 by and between the Company and AJB Capital Investments, LLC (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed with the SEC on December 23, 2022)
−Removed: $2,200,000 Senior Secured Promissory Note, dated December 22, 2022 (incorporated by reference to Exhibit 10.2 to the current report on Form 8-K filed with the SEC on December 23, 2022)
Common Stock Purchase Warrant, dated December 22, 2022 (incorporated by reference to Exhibit 10.3 to the current report on Form 8-K filed with the SEC on December 23, 2022)
−Removed: Security Agreement dated December 22, 2022 by and between the Company and AJB Capital Investments, LLC (incorporated by reference to Exhibit 10.4 to the current report on Form 8-K filed with the SEC on December 23, 2022)
+Added: $2,200,000 Senior Secured Promissory Note, dated December 22, 2022 (incorporated by reference to Exhibit 10.2 to the current report on Form 8-K filed with the SEC on December 23, 2022)
+Added: Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.39 to Amendment No.
+Added: 1 to Registration Statement on Form S-1 filed with the SEC on October 26, 2023)
+Added: BIO-key International, Inc.
+Added: 2023 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed with the SEC on December 19, 2023)
+Added: Securities Purchase Agreement, dated as of December 20, 2023, by and between BIO-key International, Inc.
+Added: and Dillon Hill Investment Company LLC (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed with the SEC on December 21, 2023)
List of subsidiaries of BIO-key International, Inc.
+Added: Consent of Bush and Associates CPA
Consent of Marcum LLP
−Removed: Consent of Rotenberg Meril Solomon Bertiger & Guttilla, P.C.
−Removed: Certification of the Chief Executive Officer pursuant to Section  
−Removed: 302 of the Sarbanes-Oxley Act of 2002
−Removed: Certification of the Chief Financial Officer pursuant to Section  
−Removed: 302 of the Sarbanes-Oxley Act of 2002
−Removed: Certification of the Chief Executive Officer pursuant to Section  
−Removed: 906 of the Sarbanes-Oxley Act of 2002
−Removed: Certification of the Chief Financial Officer pursuant to Section  
−Removed: 906 of the Sarbanes-Oxley Act of 2002
+Added: Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
+Added: Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
+Added: Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
+Added: Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Inline XBRL Instance
9 unchanged sentences
*** Management compensatory plan.
−Removed: + Certain portions of this exhibit (indicated by “[***]”) have been omitted as the Company has determined that such portions are (a) not material and (b) would likely cause competitive harm to the Company if publicly disclosed.
−Removed: Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
−Removed: BIO-KEY INTERNATIONAL, INC.
−Removed: /s/  MICHAEL W.
+Added: + Certain portions of this exhibit (indicated by “[***]”) have been omitted as the Company has determined that such portions are (a) not material and (b) would likely cause competitive harm to the Company if publicly disclosed.
+Added: Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
+Added: BIO-KEY INTERNATIONAL, INC.
+Added: /s/ MICHAEL W.
CHIEF EXECUTIVE OFFICER
1 unchanged sentence
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities on the dates indicated.
−Removed: /s/  MICHAEL W.
+Added: /s/ MICHAEL W.
Chairman of the Board of Directors, Chief Executive Officer and Director
(Principal Executive Officer)
−Removed: /s/  CECILIA WELCH
+Added: /s/ CECILIA WELCH
Chief Financial Officer (Principal Financial and Accounting Officer)
Cecilia Welch
−Removed: /s/  WONG KWOK FONG
+Added: /s/ WONG KWOK FONG
Wong Kwok Fong
−Removed: /s/  Thomas Bush III
−Removed: Thomas Bush III
−Removed: /s/  MANNY ALIA
+Added: /s/ CAMERON WILLIAMS
+Added: Cameron Williams
+Added: /s/ MANNY ALIA
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.