SEC Comment Letter for BIO KEY INTERNATIONAL INC (BKYI) (CIK 0001019034) (BKYI) — Dec 12, 2006
BIO KEY INTERNATIONAL INC (BKYI) (CIK 0001019034)
Date: Dec. 12, 2006 · CIK: 0001019034 · Accession: 0000000000-06-060765
AI Filing Summary & Sentiment
File numbers found in text: 333-115037, 333-120104
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Mail Stop 4561
December 12, 2006
Michael W. DePasquale
Chief Executive Officer
BIO-key International, Inc.
3349 Highway 138, Building D, Suite B
Wall, NJ 07719
Re: BIO-key International, Inc.
Post-Effective Amendment No. 5 to Registration Statement on Form SB-2
Filed November 28, 2006
File No. 333-120104
Post-Effective Amendment No. 7 to Regi stration Statement on Form SB-2
Filed November 28, 2006
File No. 333-115037
Dear Mr. DePasquale:
We have reviewed your filings, whic h were revised in response to oral comments
issued November 16, 2006 and have the following comments.
Post-Effective Amendment No. 5 to Registration Statement on Form SB-2
General
1. We note that the shares being offered for resale by the selling shareholders
include shares of common stock issuable as interest in lieu of cash. We note
further that Article 3.1 of th e Secured Convertible Term Note with Laurus Master
Fund, filed as Exhibit 99.3 to the Form 8-K filed June 14, 2005, provides that the
“Holder shall have the right . . . to convert all or any portion of the then aggregate
outstanding principal amount of this No te, together with interest and fees due
hereon, into shares of Common Stock . . .” (emphasis added). As a general
matter, it is inappropriate to register the resale of securities until after the private
offering for those securities has been co mpleted. Please provide us with your
analysis as to why you believe that this tr ansaction is consiste nt with the staff’s
PIPE guidance as set forth by 3S of the Division of Corporation Finance’s Manual
of Publicly Available Telephone Interp retations Supplement of March 1999 and
whether the discretion left to the Holder to receive shares of common stock or
cash for interest and fees raises concer ns as to the completion of your private
placement consistent with Rule 152 under th e Securities Act. In this regard,
Michael W. DePasquale
BIO-key International, Inc.
December 12, 2006
Page 2
advise us of the basis for your belief that the offer and sale of the interest and fee
shares was complete when you filed the resa le registration statement. In your
analysis, please discuss whether the holders are irrevoc ably bound to receive the
common stock issuable in lieu of cash a nd whether they are entitled to make
additional investment decisions with respec t to the interest and fee payments. A
similar analysis should be provided fo r each selling security holder that is
registering shares that may be issuable upon conversion, from time to time, of
interest and fees under a c onvertible term note.
2. In light of the above comment with regard to the discretion afforded to holders of
the Note to select the form of payment, please be advised th at it does not appear
to be appropriate at this time to include in the registration statement the shares
that will be paid in lieu of interest and fees that accrue subsequent to the initial
filing date of the registration statement. Accordingly, please revi se to clarify that
the prospectus would not be available for the resale of shares issued to pay interest and fees that has not yet accrued. Note however , that shares relating to
any interest and fees that have accrued to date may be properly included in a
registration statement.
Please direct all questions to Maryse Mills-Apenteng at 202-551-3457, Jeffrey
Werbitt at 202-551-3456 or the undersigned at 202-551-3462. If you still require further
assistance, please contact Barbara C. Jac obs, Assistant Director, at 202-551-3730.
S i n c e r e l y ,
Mark P. Shuman
Branch Chief – Legal
cc: Via facsimile: 617-248-4000
Charles J. Johnson, Esq. Choate, Hall & Stewart LLP