BIO-Key International, Inc. 425 Filing
Filed
by
BIO-key International, Inc.
Pursuant
to Rule 425 under the
Securities
Act of 1933
SEC
File
No. 1-13463
Subject
Company: Comnetix Inc.
(Comnetix
is not an SEC registrant.)
BIO-key
Announces Tender Offer For Canadian Public Safety Company
Wall,
N.J. - December 21, 2006 - BIO-key
International Inc. (OTC Bulletin Board: BKYI), a leader in wireless public
safety solutions and finger based biometric identification, today announced
that
it will make a securities exchange takeover bid by way of a take-over bid
circular for all of the issued and outstanding common shares of ComnetiX Inc.
(“ComnetiX) (TSE:CXI) in accordance with all applicable securities laws. BIO-key
will offer common shares of BIO-key for each ComnetiX share at a share exchange
ratio to be determined that will value ComnetiX shares at US $1.29 per share,
which represents a 65% premium to the closing price for ComnetiX shares on
December 20, 2006. BIO-key anticipates that the take-over bid
circular and related documents with respect to its offer will be mailed to
shareholders by mid January 2007. Based on publicly available
information from ComnetiX, there are 14,124,802 issued common shares of
ComnetiX. A Canadian merchant bank has agreed with BIO-key to tender
its approximate 12.5% common share interest in ComnetiX into the BIO-key offer,
subject to certain limited rights of withdrawal. Including its 12.5%
ownership interest, Northern has control or direction over, or has entered
into
voting agreements in connection with, 3,464,138 issued shares of ComnetiX
representing approximately 24.5% of the total issued shares of ComnetiX, and
intends to vote all such shares against L-1 Identity Solutions’ current proposal
to acquire ComnetiX. L-1 Identity Solutions proposal requires a two-thirds
approval by the ComnetiX shareholders for implementation.
In
connection with the take-over bid, BIO-key also intends to proceed with a
financing through that Canadian merchant bank in January 2007, the proceeds
of
which will be used for working capital purposes in the combined BIO-key and
ComnetiX business. The combined company will carry on business under the
name BIO-key International Inc. BIO-key believes a combination of
the two companies will result in a strong company with the industry’s most
complete end-to-end solution offering to the law enforcement market and also
enable the companies to: share and cross-sell more than 3000 customers; and
become a platform company for further business combinations that will uniquely
serve the robust and growing state, provincial and local public safety
markets.
BIO-key
will apply to list the shares of the combined company on the Toronto Stock
Exchange as a substitute listing for the currently listed ComnetiX shares on
such exchange, and the shares of the combined company will continue to have
a
market on the OTC Bulletin Board.
Full
details of the offer will be included in the take-over bid documents to be
mailed to ComnetiX shareholders. The offer will be subject to
certain conditions that are customary for transactions of this nature including
the valid tender and non-withdrawal of a majority of the issued and outstanding
shares of ComnetiX and receipt of required regulatory approvals.
About
BIO-key
BIO-key
develops and delivers advanced identification solutions and information services
to law enforcement departments, public safety agencies, government and private
sector customers. BIO-key mobile wireless technology provides first responders
with critical, reliable, real-time data and images
from
local, state and national databases. The company's high-performance, scalable,
cost-effective and easy-to-deploy biometric finger identification technology
accurately identifies and authenticates users of wireless and enterprise data
to
improve security, convenience and privacy and to reduce identity theft. Over
2,500 police, fire and emergency services departments in North America use
BIO-key solutions, making BIO-key the leading supplier of mobile and wireless
solutions for public safety worldwide. (http://www.bio-key.com)
U.S.
Regulatory Information
This
press release is neither an offer to purchase nor a solicitation of an offer
to
sell securities. In connection with the proposed transaction, a registration
statement on Form S-4 is expected to be filed with the SEC by BIO-key unless
an
exemption from the registration requirements of the Securities Act of 1933
is
applicable. STOCKHOLDERS OF COMNETIX ARE ENCOURAGED TO READ THE REGISTRATION
STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY
ARE FILED BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. All interested persons may obtain a free copy of the registration
statement and any other related documents on the SEC’s website at www.sec.gov.
Such
documents may also be obtained for free from BIO-key.
BIO-key
Safe Harbor Statement
This
news
release contains forward-looking statements that are subject to certain risks
and uncertainties that may cause actual results to differ materially from those
projected on the basis of these statements. The words "estimate," "project,"
"intends," "expects," "believes," and similar expressions are intended to
identify forward-looking statements. Such forward-looking statements are made
based on management's beliefs, as well as assumptions made by, and information
currently available to, management pursuant to the "safe-harbor" provisions
of
the Private Securities Litigation Reform Act of 1995. For a more complete
description of these and other risk factors that may affect the future
performance of BIO-key International, see "Risk Factors" in the Company's Annual
Report on Form 10-KSB and its other filings with the Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date made. The Company
also undertakes no obligation to disclose any revision to these forward-looking
statements to reflect events or circumstances after the date made or to reflect
the occurrence of unanticipated events.