SecProbe.io

Filing text and metadata
Intelligence Terminal Search Probe Scores Topics IPO Watchlist Monthly Activity About API

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

Sentiment
Urgency
Document Type
Confidence
SEC Posture
Company Posture

Summary

Reasoning

File numbers found in text: 333-115037, 333-120104

Date
December 12, 2006
Author
Mark P. Shuman
Form
UPLOAD
Company
BIO KEY INTERNATIONAL INC (BKYI) (CIK 0001019034)

Letter

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 Post-Effective Amendment No. 7 to Regi stration Statement on Form SB-2 Filed November 28, 2006 File No. 333-115037

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

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

Show Raw Text
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