James Sullivan
BIO KEY INTERNATIONALAbout James Sullivan
James D. Sullivan, 57, serves as BIO-key’s Senior Vice President of Strategy and Compliance and Chief Legal Officer (since February 2020); previously SVP Strategy & Business Development (2012–2018) and SVP Global Sales (Aug 2015–Dec 2016). He holds a J.D. with Honors from Georgia State University College of Law, is a member of the Georgia Bar, and has a Computer Science degree from Brown University; he is a recognized expert in privacy, cybersecurity, and biometric authentication, with ~20 years at BIO-key and >26 years in IT across Computer Associates, Platinum Technology, and Memco Software, working with major customers including AT&T, Israel Defense Forces, LexisNexis, NCR, and Omnicell . Company performance markers during the recent period: total shareholder return (value of $100 investment) declined from $26.43 (2022) to $7.53 (2023) to $4.29 (2024), while net loss improved from $11.91M (2022) to $8.52M (2023) to $4.30M (2024) .
Company Performance (context)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Value of $100 Investment (TSR) | $26.43 | $7.53 | $4.29 |
| Net Loss ($USD) | $11,909,903 | $8,521,837 | $4,300,692 |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| BIO-key International, Inc. | SVP Strategy & Compliance; Chief Legal Officer | Feb 2020–present | Legal leadership; strategy/compliance in identity, privacy, cybersecurity |
| BIO-key International, Inc. | SVP Strategy & Business Development | Apr 2012–Dec 2018 | Led strategy and business development; engagements with major customers/projects |
| BIO-key International, Inc. | SVP Global Sales | Aug 2015–Dec 2016 | Directed global sales during dual-role period |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Computer Associates | Security/identity-related IT roles | Not disclosed | Enterprise security and identity management experience |
| Platinum Technology | Security/identity-related IT roles | Not disclosed | Enterprise software and security implementation |
| Memco Software | Security/identity-related IT roles | Not disclosed | Cybersecurity/authentication implementation experience |
Fixed Compensation
| Component | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | $212,479 | $223,250 |
| Stock Awards (Grant-date fair value, $) | $16,500 | $22,500 |
| All Other Compensation ($) | $6,433 (incl. $5,102 commissions; $1,331 life insurance) | $79,429 (incl. $78,632 commissions; $797 life insurance) |
| Total ($) | $235,412 | $325,179 |
Compensation philosophy: executives’ pay comprises base salary, annual performance-based cash bonus (historically tied to revenue milestones), and long-term equity; base comp was decreased effective Jan 16, 2023 and restored July 1, 2024, with RS awards in 2024 and 2023 recognizing revenue growth and the Swivel Secure integration .
Performance Compensation
Equity Awards (RSUs/Restricted Stock) – Grants and Vesting
| Grant Type | Grant Size | Vesting Schedule | Reference |
|---|---|---|---|
| Restricted Stock (2024 grant under 2023 Plan) | 22,500 shares | Vest in three equal annual installments starting July 31, 2025 | |
| Restricted Stock (additional award) | 1,667 shares | Vest in two equal annual installments starting August 29, 2025 | |
| Unvested Shares at 12/31/2024 | 24,166 shares | Market value $72,498 at $1.71/share on 12/31/2024 |
Option Awards – Status and Terms (as of 12/31/2024)
| Exercisable Options (#) | Exercise Price ($) | Expiration |
|---|---|---|
| 174 | 282.24 | 3/23/2025 |
| 174 | 169.92 | 3/21/2026 |
| In-the-money value at 12/31/2024 | $0 (stock at $1.71) |
Bonus metrics: historically based on revenue milestones; specific target weightings, actuals, and payouts were not disclosed .
Equity Ownership & Alignment
Beneficial Ownership – Multi-year view
| As-of Date | Shares Beneficially Owned | Percent of Class |
|---|---|---|
| Apr 26, 2021 | 38,043 | <1% |
| Apr 26, 2022 | 79,293 | <1% |
| Jun 1, 2023 | 110,500 | 1.2% |
| Oct 31, 2023 | 618,000 | 4.4% |
| Jun 20, 2025 | 57,553 | <1% (6,848,775 shares O/S) |
2023 breakdown (context): included 18,750 options, 64,125 restricted shares (51,375 unvested), and 228,000 warrants within 60 days; share figures reflect reverse splits and offering-related issuances .
Pledging/hedging: no pledging disclosed; insider trading policy exists and is filed with the 2024 Form 10-K .
Vesting and Potential Selling Pressure (calendar)
| Date | Instrument | Shares Vesting |
|---|---|---|
| Jul 31, 2025 | Restricted Stock | ~7,500 (1/3 of 22,500) |
| Aug 29, 2025 | Restricted Stock | ~833.5 (1/2 of 1,667) |
| Jul 31, 2026 | Restricted Stock | ~7,500 (2/3 cumulative of 22,500) |
| Aug 29, 2026 | Restricted Stock | ~833.5 (full of 1,667) |
| Jul 31, 2027 | Restricted Stock | ~7,500 (final tranche of 22,500) |
Options are far out-of-the-money relative to 12/31/2024 stock price ($1.71), reducing near-term exercise/selling pressure .
Employment Terms
- Agreement date: April 5, 2017; auto-renews for successive one-year terms unless the Company provides at least two months’ written notice (treated as termination without cause) .
- Base salary: $225,000 since 2021, subject to compensation committee adjustments .
- Severance (termination without cause): continuation of then-current base salary plus earned commissions for the greater of six months or the remaining months in the term .
- Restrictive covenants: confidentiality; technical invention; non-competition and non-solicitation prohibiting competitive activity or dealings with current/prospective customers during employment and for one year thereafter .
- Change-in-control: plan-level equity acceleration at the committee’s discretion—options become immediately exercisable; restricted stock fully vests; RSU/other stock-based award conditions lapse; plan definitions include asset sale, merger with <50% continuing vote, incumbent board majority change, or 40% beneficial ownership thresholds (2015 and 2023 plans) .
Related Party Transactions and Signals
- Insider participation in 2023 public offering: Sullivan purchased 12,667 shares and warrants to purchase 12,667 shares for $39,000; his spouse purchased 3,173 shares and warrants for $9,993; offering price $3.15 per unit; CEO also participated .
Investment Implications
- Pay-for-performance alignment: cash compensation includes sizable commissions; equity mix uses multi-year RS vesting through 2027, aligning incentives with longer-term value creation. Performance bonuses are revenue-milestone based, but detailed targets are not disclosed, limiting precision in pay-performance calibration .
- Near-term supply overhang: scheduled vesting of ~9k shares in 2H25 and ~8.3k in 2026 may create incremental selling pressure; options are deeply out-of-the-money (strikes $169.92–$282.24 vs $1.71 at 12/31/2024), reducing exercise-driven supply risk .
- Retention risk: severance is modest (six months plus earned commissions) with one-year non-compete/non-solicit; auto-renewal and multi-year vesting support retention, but limited severance suggests moderate transition flexibility for the company if performance goals change .
- Ownership alignment: Sullivan’s beneficial ownership is <1% as of June 20, 2025; he and his spouse added exposure via the 2023 offering and warrants, signaling commitment, though reverse splits and capital raises have materially affected share counts over time .
- Change-of-control economics: single-trigger equity acceleration subject to committee discretion is shareholder-unfriendly relative to double-trigger norms, potentially increasing payout sensitivity in M&A scenarios .