Material Agreement, Private Placement (Form 8-K)

Item 1.01 Entry into a Material Definitive Agreement.

On August 10, 2026, BIO-key International, Inc. (the "Company") entered into a warrant exercise agreement (the "Warrant Exercise Agreement") with an existing institutional investor (the "Investor") to exercise certain outstanding warrants to purchase an aggregate of 618,334 shares of the Company's common stock, $0.0001 par value per share (the "Common Stock"), which were originally issued to the Investor on October 28, 2025 (the "Existing Warrants"). Pursuant to the Warrant Exercise Agreement, the exercise price of the Existing Warrants was reduced from $10.20 per share to $4.06 per share.

In consideration for the exercise of the Existing Warrants, subject to compliance with the beneficial ownership limitations included in the Existing Warrants, the Investor received new unregistered warrants to purchase up to an aggregate of 1,236,668 shares of the Company's Common Stock (the "New Warrants"). The New Warrants have an exercise price of $4.06 per share and include a beneficial ownership limitation that prevents the Investor from beneficially owning more than 4.99% of the Company's outstanding common stock at any time. The exercise of the New Warrants is conditioned upon approval of the Company's stockholders as required by applicable rules of the Nasdaq Stock Market. The New Warrants terminate five years from the date, if any, that the Company's stockholders approve the exercisability of the New Warrants (the "Stockholder Approval"). The Company agreed to convene a stockholder meeting no later than 120 days following the date of the Warrant Exercise Agreement for the purpose of seeking the Stockholder Approval. If the Company does not obtain Stockholder Approval at the first meeting, the Company shall call a meeting every ninety (90) days thereafter to seek Stockholder Approval.

The Company also agreed to file a resale registration statement covering the public resale of the shares of Common Stock issuable upon exercise of the New Warrants with the Securities and Exchange Commission (the "SEC"), and to use commercially reasonable efforts to have such Resale Registration Statement declared effective by the SEC within 90 days following the date of the Warrant Exercise Agreement.

The gross proceeds to the Company under the Warrant Exercise Agreement were approximately $2.51 million, prior to deducting placement agent fees and estimated offering expenses. The closing of the Warrant Exercise Agreement occurred on August 11, 2025. The Company intends to use the net proceeds for working capital and general corporate purposes which may include repayment of a portion of the Company's outstanding secured note.

Maxim Group LLC ("Maxim") acted as the exclusive placement agent to the Company pursuant to a Placement Agency Agreement between the Company and Maxim, dated August 10, 2026. As compensation for such services, the Company agreed to pay Maxim a cash fee equal to 5.0% of the gross proceeds received by the Company under the Warrant Exercise Agreement.

The foregoing descriptions of the Warrant Exercise Agreement and the New Warrants are not complete and are qualified in their entirety by reference to the full text of the form of Warrant Exercise Agreement and the form of Common Stock Purchase Warrant, copies of which are attached hereto as Exhibits 10.1 and 4.1, respectively, to this Current Report on Form 8-K and incorporated by reference herein.

Item 3.02 Unregistered Sale of Equity Securities.

The information in Item 1.01 is incorporated herein by reference. The New Warrants were issued solely to one accredited investor in a private placement transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. The New Warrants and the shares of common stock issuable upon the exercise thereof have not been registered under the Securities Act and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from such registration requirements.

This report shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.