NEXT Biometrics Group ASA — Share Issue/Capital Change 2019

Jan 24, 2019

NEXT – CONTEMPLATED PRIVATE PLACEMENT

NEXT – CONTEMPLATED PRIVATE PLACEMENT

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.

NEXT – CONTEMPLATED PRIVATE PLACEMENT

The board of directors (the "Board of Directors") of NEXT Biometrics Group ASA ("NEXT" or the "Company") has retained Carnegie and DNB Markets (the "Managers") to advise on and effect a private placement of new shares directed towards Norwegian and international investors after the close of Oslo Stock Exchange today, 24 January 2019 (the "Private Placement"). In the Private Placement, the Company is contemplating to raise up to NOK 160 million in gross proceeds by issuing new shares in the Company (the "Offer Shares").

The Company's largest shareholder, Greenbridge Investments Partners Limited, Acting as General Partner of Greenbridge Investment L.P., is planning to participate in the private placement on a pro-rata basis (18.8% ownership resulting in a subscription of approx. NOK 30 million based on a capital raise of NOK 160 million). Members of the Company's executive management Ritu Favre (CEO), Knut Stålen (CFO), Dan Cronin (COO), Christine Nilsen (General Counsel) and Alain Faburel (CSMO) will participate in the Private Placement by applying for Offer Shares for a total amount of approx. NOK 780,000. The Company has also received significant indications of interest from existing shareholders and new investors to apply for Offer Shares in the Private Placement.

The net proceeds from the Private Placement will be used to further scale the Company's activities within payment card development, and at the same time be able generate sufficient revenues to bring the Company into a sustainable balance of revenues and expenses.

The subscription price in the Private Placement will be determined by the Company's Board of Directors through an accelerated bookbuilding process. The minimum subscription and allocation in the Private Placement has been set to the number of Offer Shares that equals an aggregate subscription price of at least the NOK equivalent of EUR 100,000, provided that the Company may, at its sole discretion, offer and allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to applicable regulations are available.

The bookbuilding period for the Private Placement will commence today, 24 January 2019, at 16:30 hours (CET) and close on 25 January 2019 at 08:00 hours (CET). The Company may, however, at any time resolve to close or extend the bookbuilding period at its own discretion and for any reason.

The Company will announce the final number of Offer Shares placed and the final subscription price in the Private Placement in a stock exchange announcement expected to be published before opening of trading on the Oslo Stock Exchange tomorrow, 25 January 2019.

Notification of allotment and payment instructions will be communicated to the applicants by the Managers on or about 25 January 2019, subject to any shortenings or extensions of the bookbuilding period. The Private Placement will be divided into two tranches. Tranche 1 will consist of 1,923,000 Offer Shares (representing approximately 10% of the share capital of the Company) ("Tranche 1"). Tranche 2 will consist of up to the number of Offer Shares necessary to raise gross proceeds of up to NOK 160 million ("Tranche 2"). The subscribers are expected to be allocated Offer Shares pro rata between Tranche 1 and Tranche 2.

Completion of Tranche 1 of the Private Placement by the delivery of Offer Shares is subject to approval by the Board of Directors pursuant to an authorisation by the Company’s general meeting held 15 May 2018, while the completion of the potential Tranche 2 of the Private Placement by the delivery of Offer Shares is subject to the approval by an Extraordinary General Meeting expected to be held on or about 15 February 2019 (the "EGM") and a listing prospectus being approved by the Financial Supervisory Authority of Norway and published (expected within 15 February 2019). Further to this, completion of both Tranche 1 and Tranche 2 are subject to (i) the Company resolving to consummate the Private Placement and allocate the Offer Shares, and (ii) registration of the share capital increases in the Company pertaining to the issuance of Offer Shares in the relevant Tranche with the Norwegian Register of Business Enterprises. Applicants who are or become shareholders in this transaction undertake by their application to vote in favour for the approval of issuance of Offer Shares in Tranche 2 at the upcoming EGM.

Settlement of the allocated Offer Shares in Tranche 1 is expected to take place on a delivery versus payment basis on or about 29 January 2019. Settlement of the allocated Offer Shares in Tranche 2 is expected to take place on a delivery versus payment basis shortly after the approval by the EGM expected to be held on or about 15 February 2019. Settlement of Tranche 1 is not conditional upon settlement of Tranche 2 under the Private Placement, and if the EGM should not approve to issue Offer Shares in Tranche 2, or Tranche 2 for another reason should not be completed, acquisition of Offer Shares in Tranche 1 will remain final and binding and cannot be revoked or terminated by the respective applicants.

The Offer Shares allocated in Tranche 1 will be tradable upon the registration of the share capital increase pertaining to Tranche 1 of the Private Placement with the Norwegian Register of Business Enterprises (expected on or about 29 January 2019). The Offer Shares allocated in Tranche 2 will be tradable on the Oslo Stock Exchange upon registration of the share capital increase pertaining to Tranche 2 of the Private Placement with the Norwegian Register of Business Enterprises and a listing prospectus being approved by the Financial Supervisory Authority of Norway and published (the "NFSA"). The Company expects that the listing prospectus will be approved by the NFSA on or about 15 February 2019. If there is a delay in the approval process with the NFSA, the Tranche 2 Offer Shares will be registered on a separate ISIN number until the approval of a listing prospectus and will be sought listed, and thus be tradable, on Merkur Market as soon as practically possible after the EGM until a listing prospectus has been approved by the NFSA and published. However, the Tranche 2 Offer Shares will not be tradeable prior to registration of the share capital increase pertaining to Tranche 2 of the Private Placement with the Norwegian Register of Business Enterprises.

The Board has resolved to launch the contemplated share issue as a private placement based on advice from the Managers following their discussions with existing shareholders and potential investors. After having considered alternative transaction structures and the Company's liquidity needs, the Board is of the view that a private placement is in the best interest of the Company and its shareholders as an underwritten rights issue would imply a significant dilution of non-participating shareholders given today's market conditions and the NEXT share price development.

Subject to successful completion of the Private Placement, the Board of Directors may consider to carry out a subsequent offering of new shares in the Company directed towards shareholders in the Company as of 24 January 2019 (as registered in the VPS on 28 January 2019) 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. Such shareholders will be granted non-transferable preferential rights to subscribe for, and, upon subscription, be allocated new shares. The subscription price in such subsequent offering will be the same as the subscription price in the Private Placement.

Investor contacts for NEXT Biometrics Group ASA:

Ritu Favre (CEO), Ritu.Favre@NEXTbiometrics.com

Knut Stålen (CFO), Knut.Stalen@NEXTbiometrics.com

About NEXT Biometrics Group ASA:

NEXT provides advanced fingerprint sensor technology that delivers uncompromised security and accuracy for the best possible user experience in the smart card, government ID, access control and notebook markets. The company's patented NEXT Active ThermalTM principle allows the development of large, high quality fingerprint sensors in both rigid and flexible formats. NEXT Biometrics Group ASA (www.nextbiometrics.com) is headquartered in Oslo, with sales, support and development operations in Seattle, Silicon Valley, Taipei, Prague, Bengaluru and Shanghai.

IMPORTANT NOTICE:

This announcement is not and does not form a part of any offer for sale of securities.

Copies of this announcement are not being made and may not be distributed or sent into the United States, Australia, Canada, Japan or any other jurisdiction in which such distribution would be unlawful or would require registration or other measures.

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 exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any part of the offering in the United States or to conduct a public offering of securities in the United States. Any offering of the securities referred to in this announcement will be made by means of a prospectus.

This announcement is not a prospectus for the purposes of Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the "Prospectus Directive"). Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in the aforementioned prospectus. In any EEA Member State other than Norway that has implemented the Prospectus Directive, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive, i.e., only to investors who can receive the offer without an approved prospectus in such EEA 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 to 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.

The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice.