Biometric identity verification provider authID has disclosed a financing backstop with existing secured noteholders, including $300,000 already funded and a further $200,000 available only if conditions tied to strategic financing are met.
The agreement, dated September 9, provides up to $300,000 if a third-party strategic investor does not supply funding before the company’s next payroll cycle. That amount was funded on September 11, according to a current report filed with the Securities and Exchange Commission.
If strategic financing occurs, the backstop can reach $500,000 in total. The additional $200,000 can be drawn once half of the proceeds contemplated under the strategic investor agreement have been used. Additional draws remain subject to the customary closing conditions specified in the backstop agreement.
In return for the commitment, authID agreed to issue 750,000 warrants, which give their holders the right to buy common shares at a specified price. The fee warrants have a five-year term and an exercise price of $0.57 per share, regardless of whether the full backstop is funded.
The agreement also fixes the conversion price of the company’s outstanding April 2026 senior secured debentures at $0.38 per share and reduces the exercise price of related existing warrants from $1.50 to $0.57. Director-held debentures cannot be converted without shareholder approval, and repricing director-held warrants also requires approval.
Funded backstop debt carries the same collateral, interest rate and maturity as the existing secured debentures. The participating holders have also agreed to enter a subordination arrangement for proposed interim financing with a strategic partner, subject to the agreement’s conditions.
Share issuance across the related April and backstop transactions is capped at 19.99 percent of shares outstanding immediately before the April purchase agreement unless shareholders approve a larger issuance under Nasdaq rules.
authID’s commercial work includes biometric employee verification for an industrial automation business, integrating checks with Microsoft Entra ID and ServiceNow. The company has also secured an Art Sales Vault buyer-verification deployment, using identity documents, face matching and liveness during onboarding.
The financing agreement requires authID to file a resale registration statement within 30 days and use commercially reasonable efforts to make it effective within a further 30 days. Those registration rights cover shares underlying the backstop debt and commitment warrants.
Sources: SEC
–
By the ID Tech Editorial Team
