IDEX Biometrics ASA — Interim / Quarterly Report 2021

Aug 12, 2021

Interim Report for First Half 2021

12 August 2021

Disclaimer

This presentation includes forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for IDEX Biometrics ASA (the Company) and its subsidiaries. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for the Company's businesses, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time. Although the Company believes that its expectations and the information in this presentation were based upon reasonable assumptions at the time when they were made, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in this presentation. The Company is not making any representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the information in the presentation, and neither the Company nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use of the information in this presentation. The Company undertakes no obligation to publicly update or revise any forward-looking information or statements in this presentation.

IDEX Biometrics

The next evolution of payment cards

Identity protection

Top of wallet

Low cost

More convenient

Q2 '21 Financial Summary

• Continued shift to product sales; sustained shipments for network access control; initial shipments of TrustedBio
• Expenses under control
  • Incremental headcount increases
  • Q2 '21 saw higher R&D prototyping costs; no R&D credits recorded for Q2 and Q1 '21 (vs. prior years)
• U.S. registration contributing to incrementally higher OpEx
• Cash balance of \$19.3 million as of June 30, 2021
  • \$25.9 million as of March 31, 2021

Summary Profit & Loss Statement (\$000)	Q2 2021		Q1 2021		Q4 2020		Q3 2020		Q2 2020
Product	\$	696	\$	623	\$	593	\$	246	\$	121
Services		1		1		5		2		28
Total Revenue		697		624		598		248		149
Purchases, net of inventory change		304		220		178		45		32
Payroll expenses		4,682		5,101		5,206		4,275		3,515
Research and development expenses		881		608		(144)		930		1,069
Other operating expenses		1,763		1,713		2,157		1,370		1,218
Depreciation and amortization		460		454		439		430		422
Total Operating expenses		8,090		8,096		7,836		7,050		6,256
Loss from operations	\$	(7,393)	\$	(7,472)	\$	(7,238)	\$	(6,801)	\$	(6,107)

Investment Highlights

Oslo Børs: IDEX Nasdaq: IDBA

Massive addressable market

• One of only two suppliers and partnered with the ecosystem leaders; TAM of 400 million units/yr. expected by 2024
• TrustedBio™ is the only true "pure play" in the contactless card space
• First solution that enables the cost point and user experience to accelerate market activation

Accelerating commercial momentum

• Infineon/IDEX technical and commercial partnership
• High demand for Infineon/IDEX reference platform with building design win momentum
• Growing backlog from existing customers
• Multiple new design wins and orders from integrators and card manufacturers

Opportunities in adjacent markets

• DCEP hardware wallets, Crypto currency wallets, ID, Access Control
• Volume production orders from Asian customer

Large-scale certification gives us advantage in rapidly changing markets

• Certification from two leading payment networks (EMVCo® certified) represents barrier to near-term entry
• Two certifications from China UnionPay afford head start with DCEP

Q2 '21: a pivotal quarter

IDEMIA actively marketing IDEX based F.CODETM cards

• IDEMIA's first Biometric Payment Card offering based on IDEX's TrustedBio™ sensor
• Most integrated Biometric Payment Card solution available today
• Building order backlog in response to accelerating customer demand

Announced Infineon technical and commercial partnership

• Joint solution: TrustedBio Max™ + latest generation Infineon Secure Element (not possible with competitors' sensors)
• Infineon has been the leading provider of secure elements (SEs) for more than two decades
• Full transactions ~3X faster than any solution available; contactless EMV transactions in 0.5 seconds

TrustedBio Max™ product launch

• The most advanced and integrated biometric payment solution ever created
• Integrated sensor, biometric ASIC, biometric matching hardware, software, and algorithm enables groundbreaking lowcost, simplified manufacturing and industry leading performance
• Progressing as planned: Digital Currency Electronic Payment (DCEP) initiative of the People's Bank of China
  • IDEX featured in Digital RMB trials conducted by the Postal Savings Bank of China and China Construction Bank
  • Selected by Goldpac as a strategic technology partner; initial orders received for DCEP solution

IDEX TrustedBio Max™: Proprietary Advantages

The most complete solution for card-based biometric authentication

• SENSOR & ASIC
• ALGORITHMS & SOFTWARE + +
• SYSTEMS & SOLUTIONS

Wide-area polymer sensor, ASIC: MCU, PMU, Hardware accelerator, Flexible, low-cost package design

Biometric authentication algorithm Embedded software for sensor, MCU, SE

Card architecture, reference design Enrolment solutions, system concepts

TrustedBio™: A single hardware platform that enables multiple products through firmware; supports multiple Secure Element architectures and multiple applications

IDEX & Infineon: Complete solution

IDEX:

• IDX3409 Biometric SoC
  • ▬ MCU 200 Mhz
  • ▬ Power management(PMU)
  • ▬ Hardware accelerator
• Biometric Algo
• Biometric MCU Software
• SE SDK

Infineon:

• SLC38 SE ASIC
• SE Operating System

Integration:

• Hardware system
• Algorithm compiled for SLC38
• PMU synchronization and optimization
• Documentation and support

Game Changing Performance:

• Biometric process: ~250ms
• Total transaction time (including EMV): ~500ms
• Presentation attack detection (PAD)
• False Reject Rate: Less than 3%

A solution that will accelerate market activation: A seamless user experience; low card cost (~\$5)

Digital Currency Electronic Payment: "DCEP"

Regional Banks

Central Bank Issuing Digital RMB

Industrial and Commercial Bank of China Bank of China China Construction Bank* Bank of Communications Agricultural Bank of China Postal Savings Bank of China*

Hardware Wallet Opportunity

• Deployment by 2022 Olympic games
  • Financial inclusion for 225 million unbanked citizens
  • 40% of population not using a smartphone

\$1B+ potential

Card Manufacturing Partners

* Announced IDEX pilots

Digital Payment

• Digital wallet
• Hardware wallet
• Third party

IDEX is uniquely positioned to support the impending deployment of DCEP in China

Investment Highlights

Oslo Børs: IDEX Nasdaq: IDBA

• Massive addressable market for payment cards
• Accelerating commercial momentum
• Large-scale certification gives us advantage in rapidly changing markets
• Opportunities in adjacent markets
  • Digital currency, crypto-currency, ID, and access control