IDEX Biometrics ASA - Private Placement successfully placed – 15 May 2024

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Oslo, 15 May 2024.

Reference is made to the press release from IDEX Biometrics ASA ("IDEX" or the "Company") published earlier today, 15 May 2024, regarding a contemplated private placement of new shares in the Company (the "Offer Shares") to raise gross proceeds of NOK 40-50 million (the "Private Placement").

The Private Placement has been successfully placed. The transaction attracted strong interest and was significantly oversubscribed. On this basis, the Private Placement was upsized to NOK 55 million, through the issue of 33,333,333 new shares (the "Offer Shares") at a price of NOK 1.65 per Offer Share (the "Offer Price").

The net proceeds from the Private Placement will be used to fund the Company’s commercialization phase, necessary product development and market development expenses, working capital requirements, as well as other general corporate purposes.

The Company is also taking further actions to improve efficiencies as the Company progresses to a commercial phase. This further allows for streamlining the organisation, and in line with previous communication the Company expects to be below USD 4.0m in quarterly opex on a run-rate basis from the end of June 2024. Further adding to this, the Company expects to be below USD 3.0m in quarterly cash opex on a run-rate basis by the end of September 2024, with a target to reach approximately USD 2.5m in quarterly cash opex. A lower cost base combined with improved commercial momentum implies the Company is making important steps to reach profitability.

The Company is publishing its interim report for the first quarter of 2024 on 16 May 2024. The highlights from the report are summarized below:

First quarter achievements:

• Bank launch announcements with IDEX Pay in Asia and Europe
  • DenizBank, Turkey
  • Mutual Trust Bank, Bangladesh
  • Issuer with solution for visually impaired, UK
  • Opening new market in South Asia with a challenger bank
• Mobile enrolment SDK solution in market
• Market expansion of IDEX Access with AuthenTrend and Sentry
• Large South Asian card manufacturing partner for IDEX Pay and IDEX Access
• Biometric metal cards with CompoSecure

Financials:

• Revenues in the first quarter of 2024 were USD 0.4m compared to USD 1.2m in the first quarter of 2023. Revenues in the first quarter of 2024 continue to reflect the transition from component to solution sales.
• Gross margin was 36% in the first quarter of 2024.
• Operating expenses, excluding cost of materials, in the first quarter of 2024 was USD 6.1m compared to USD 7.7m in the first quarter of 2023.
• Cash balance as of 31 March 2024 was USD 3.0m

The Private Placement:

The Private Placement is divided into two tranches. Tranche 1 consists of 28,012,655 Offer Shares (representing approximately 10% of the outstanding shares in the Company) ("Tranche 1" and the "Tranche 1 Offer Shares"). Tranche 2 consists of 5,320,678 Offer Shares ("Tranche 2" and the "Tranche 2 Offer Shares"). Completion of Tranche 2 will be subject to approval by an extraordinary general meeting of the Company expected to be held on or about 12 June 2024 (the "EGM").

Notification of allocation and settlement instructions for Tranche 1 and Tranche 2 (conditional allocation for Tranche 2) will be communicated to investors on 16 May 2024.

Both Tranche 1 and Tranche 2 will be settled with existing and unencumbered shares in the Company that are already listed on the Oslo Stock Exchange, pursuant to a share lending agreement expected to be entered into between the Company, the Manager and certain existing shareholders (the "Share Lending Agreement"). The share loan in Tranche 1 will be settled with new shares in the Company to be resolved issued by the Board pursuant to an authorisation by the Company’s extraordinary general meeting held on 21 December 2023. The share loan in Tranche 2 will be settled with new shares in the Company expected to be issued following, and subject to, approval by the EGM.

Settlement of the Tranche 1 Offer Shares will be on a delivery versus payment basis on 22 May 2024. Settlement of the Tranche 2 Offer Shares is expected to take place on a delivery versus payment basis on or about 14 June 2024, subject to approval by the EGM. The Company reserves the right, at any time and for any reason, to cancel, and/or modify the terms of, the Private Placement prior to delivery of the Tranche 1 Offer Shares. Furthermore, Tranche 2 will be cancelled if the conditions for completion of Tranche 2 are not satisfied. Neither the Company nor the Manager will be liable for any losses incurred by applicants if the Private Placement is cancelled, irrespective of the reason for such cancellation.

Completion of Tranche 2 is subject to (i) completion of Tranche 1 and (ii) the approval by the EGM. Completion of Tranche 1 will not be conditional upon or otherwise affected by the completion of Tranche 2, and the applicants' acquisition of Tranche 1 Offer Shares will remain final and binding and cannot be revoked, cancelled or terminated by the respective applicants if Tranche 2, for whatever reason, is not completed. Investors being allocated shares in the Private Placement have undertaken to vote in favour of Tranche 2 at the EGM.

Following completion of Tranche 1 of the Private Placement, the Company's share capital will be NOK 46,220,881.5, divided into 308,139,210 shares, each with a nominal value of NOK 0.15. Following completion of both Tranche 1 and Tranche 2 of the Private Placement, the Company will have 313,459,888 shares outstanding.

The subscribers in the Private Placement will without cost be allocated one warrant (Nw. "frittstående tegningsrett") issued by the Company for every Offer Share allocated to, and paid by, them in the Private Placement. Each warrant will give the holder a right to subscribe for one new share in the Company at a subscription price equal to the Offer Price in the Private Placement. The warrants may be exercised during four exercise periods: (i) within the first 14 days after the Company's announcement of its first half 2024 financial report (expected on 15 August 2024), (ii) within the first 14 days after the Company's announcement of its Q3 2024 financial report (expected on 14 November 2024), (iii) within the first 14 days following the Company's announcement of its Q4 2024 financial report (expected on 27 February 2025), and (iv) within the first 14 days following the Company's announcement of its Q1 2025 financial report (expected mid-May 2025). Following expiry of the last exercise period, all Warrants not exercised will lapse without compensation to the holder. The Warrants will be registered in the VPS but will not be transferable or tradable. Issuance of Warrants is subject to approval by the EGM. In addition, issuance of Warrants for Tranche 1 Offer Shares and Tranche 2 Offer Shares, respectively, is subject to satisfaction of the other conditions for completion of the respective tranches.

The Board has considered the Private Placement in light of the equal treatment obligations under the Norwegian Public Limited Companies Act, the Norwegian Securities Trading Act, the rules on equal treatment under Oslo Rule Book II for companies listed on the Oslo Stock Exchange and the Oslo Stock Exchange's Guidelines on the rule of equal treatment, and deems that the proposed Private Placement is in compliance with these requirements. The Board holds the view that it will be in the common interest of the Company and its shareholders to raise equity through a private placement, in view of the current market conditions and the funding alternatives currently available to the Company. A private placement enables the Company to raise capital in an efficient manner, and the Private Placement is structured to ensure that a market-based subscription price is achieved. The Company is of the view that the discount in a rights issue would have to be quite significant, and that a rights issue would need to be guaranteed by a consortium of underwriters, which would entail an added cost for the Company. By structuring the equity raise as a private placement, the Company has been able to raise equity efficiently, with a 5.6 percent discount to the closing price on the Oslo Stock Exchange on 15 May 2024, and at a lower cost than in a rights issue.

The Company will carry out a subsequent repair offering of new shares at the Offer Price directed towards existing shareholders in the Company as of 15 May 2024 (as registered in the VPS on 21 May 2024), who were not allocated Offer Shares in the Private Placement and who are not resident in a jurisdiction where such offering would be unlawful or, for jurisdictions other than Norway, would require any prospectus, filing, registration or similar action. The subsequent repair offering remain subject to among other things (i) completion of the Private Placement, (ii) relevant corporate resolutions, including approval by the Board and the EGM, (iii) the prevailing market price of the Company's shares being higher than the Offer Price, and (iv) approval of a Prospectus by the Norwegian Financial Supervisory Authority. The maximum amount of the Subsequent Offering would be NOK 13,200,000.

This information in this stock exchange announcement is considered to be inside information pursuant to the EU Market Abuse Regulation and is published in accordance with section 5-12 the Norwegian Securities Trading Act.

This stock exchange announcement was published by Marianne Bøe, Head of Investor Relations on 15 May 2024 at 23:30 CEST on behalf of the Company.

Contact person:

Marianne Bøe, Head of Investor Relations
E-mail: [email protected]
Tel: +47 91 80 01 86

About IDEX Biometrics

IDEX Biometrics ASA (OSE: IDEX) is a global technology leader in fingerprint biometrics, offering authentication solutions across payments, access control, and digital identity.  Our solutions bring convenience, security, peace of mind and seamless user experiences to the world. Built on patented and proprietary sensor technologies, integrated circuit designs, and software, our biometric solutions target card-based applications for payments and digital authentication. As an industry-enabler we partner with leading card manufacturers and technology companies to bring our solutions to market.

For more information, visit www.idexbiometrics.com

IMPORTANT INFORMATION: This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase any securities. The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Copies of this announcement are not being made and may not be distributed or sent into any jurisdiction in which such distribution would be unlawful or would require registration or other measures. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.

This announcement is not an offer of securities for sale in the United States. The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and accordingly may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. Any public offering of securities to be made in the United States would be made by means of a prospectus to be obtained from the Company that would contain detailed information about the Company and management, as well as financial statements; however, the Company does not intend to register any part of the offering or their securities in the United States or to conduct a public offering of securities in the United States. Any sale in the United States of the securities mentioned in this announcement will be made to "qualified institutional buyers" as defined in Rule 144A under the Securities Act or, with respect to institutions or to any existing director or executive officer of the Company only, “accredited investors” as defined in Regulation D under the Securities Act.

In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "Prospectus Regulation" means Regulation 2017/1129 as amended together with any applicable implementing measures in any Member State. This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only for relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

Matters discussed in this announcement may constitute forward-looking statements, including in respect of the Company’s intention to conduct and consummate the Private Placement and the manner in which the Company intends to utilize the proceeds therefrom. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believe that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control.

Actual events may differ significantly from any anticipated development due to a number of factors, including without limitation, changes in public sector investment levels, changes in the general economic, political and market conditions in the markets in which the Company operate, the Company’s ability to attract, retain and motivate qualified personnel, changes in the Company’s ability to engage in commercially acceptable acquisitions and strategic investments, and changes in laws and regulation and the potential impact of legal proceedings and actions. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not provide any guarantees that the assumptions underlying the forward-looking statements in this announcement are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. You should not place undue reliance on the forward-looking statements in this document. The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm, or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement.

This announcement is made by, and is the responsibility of, the Company. Neither the Manager nor any of its affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.

This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities in the Company. Neither the Manager nor any of its affiliates accepts any liability arising from the use of this announcement.