Zwipe AS — Earnings Release 2021

Apr 28, 2021

Zwipe first quarter 2021 operational update

Zwipe first quarter 2021 operational update

OSLO, NORWAY - 28 APRIL 2021 -

Q1 2021 Highlights

During the first quarter 2021, Zwipe continued to strengthen its foundation for

mass-volume roll out of biometric payment cards.

·

Swedish fintech Vopy, a provider of embedded financial services for telecom and

financial institutions globally, selected the Zwipe Pay ONE platform for its

biometric payment cards.

·

Zwipe announced the finalization of four new partnerships with prominent card

manufacturers in Asia-Pacific and Europe. The combined annual card shipment from

these new customers is more than 1 billion, of which payment cards constitute

more than 150 million.

·

Tag Systems, a leading provider of payment cards (and part of AUSTRIACARD

Group), decided to strengthen its collaboration with Zwipe to bring the most

advanced new biometric payment cards to issuers in Europe and North America. The

group delivers 100 million payment cards each year across Europe, the

Middle East and the US. Tag Systems also placed a small initial order for Zwipe

Pay ONE.

Developments after the period

·

KL HI-TECH, the 2nd largest payment card manufacturer in India selected the

Zwipe Pay ONE platform to deliver biometric payment cards to its clients in

India and key international markets. KL HI-TECH serves some of India's largest

banks and delivers approximately 30 million payment cards per year.

·

French payment solutions provider be ys Pay selected Zwipe to offer biometric

payment cards to the French, Belgian, Luxembourg and Dutch markets. be ys Pay is

an integral part of the international be ys ecosystem, present on three

continents with more than 3 000 employees.

·

To strengthen its strategic engagements in the Middle East and Africa (MEA) and

India, Zwipe has appointed Ramzi Saboury as General Manager for the Middle East

and North Africa (MENA) Region and Masterline as Strategic Business Partner in

India and other selected markets in the MEA region.

CEO Comment

During the first quarter of 2021, Zwipe has seen significant progress on all

fronts - operationally, technologically and organizationally.

We continued to grow our ecosystem of smart card manufacturers and go-to-market

partners, while cementing our collaboration with key technology partners in the

payments value chain. We have taken major steps towards technology

readiness with our Zwipe Pay ONE platform, passing critical milestones and risk

points and successfully performing fully functional internal test transactions

with Zwipe Pay ONE demo cards. Consequently, we are on track to support our

partners launch pilots after the summer. We have also

onboarded key expert resources onto our team, strengthening the Zwipe

organization even further.

The first quarter was characterized by a continued high level of activity and we

finalized many key agreements. Swedish fintech Vopy, chose Zwipe Pay ONE for

issuing biometric payment cards to their global telecom and financial

institutions client network. The four agreements with prominent card

manufacturers in Asia-Pacific and Europe, with a combined yearly shipment of

more than 150 million payment cards announced during the quarter, was another

recognition of the attractiveness of our offering. Subject to positive pilot

results, mass-market rollout will follow. The renewal and strengthening of our

commercial partnership with TAG Systems, including TAG Nitecrest in the

UK, further reinforced our foundation for market success, especially in Europe

and North America.

We ended a solid quarter and kick-started the next announcing agreements with KL

HI-TECH, India's second-largest card manufacturer (delivering 30 million payment

cards annually), and French payment provider be ys Pay, which will bring

biometric payment cards based on our platform to banks in France and the Benelux

region. KL HI-TECH is now ramping up its industrialization efforts to deliver

Zwipe Pay ONE biometric payment cards to leading issuers in India and selected

markets in the Middle East and Africa.

In response to strong interest in Zwipe Pay ONE Cards from card manufacturers,

card bureaus, issuers and consumers in the Middle East and North Africa

(MENA) region and in India, we have established a local presence by appointing a

highly experienced General Manager for the MENA region and entering a

collaboration with Masterline, a well-connected player in the field of fintech

and payment solutions, as a Strategic Business Partner in India and beyond. We

have also further strengthened our organization with several top payment

industry talents both in the commercial and the R&D team. I

am particularly delighted to welcome our new Chief Sales Officer, John

Goodale, to my management team. John, who has a long and proven track record

from one of the world's largest processors, TSYS, and also from professional

services at KPMG and DMR Consulting, is leading?Zwipe's?engagement and

conversion efforts with smart card manufacturers. He is also

supporting our engagements with issuers?and?selected?go-to-market partners?to

further?strengthen?Zwipe's?position in the?global?biometric payments market.

The growing interest in biometric payment cards has been noted in?several

independent?analyst reports in recent months (notably from?UBS,?ABI

Research,?Goode Intelligence).?The common?theme?in all these reports is their

increased?volume projections for?biometric payment cards?over the next?3 to

5?years, suggesting a share of 15-20 % of issued payment cards in 2026.

Since the outbreak of the pandemic?a number of?countries raised

the?contactless?transaction limits?in?response to safety concerns from consumers

when having to touch the payment terminals (most

recently?the?UK?treasury?increased the?contactless?limit from 45 to 100

pounds).

While?increasing?the?contactless?limit is a?very pragmatic solution?in the

pandemic times, this solution is unfortunately not very sustainable?due

to?the?underlying?concerns on?the?lack of security in contactless

payments. These concerns were also obvious?from consumers' comments in

discussion forums when the UK treasure?decided to?more than double the

contactless limits.?For us, this is further proof that the natural and

sustainable step from contact-less payments is contact-free payments,

facilitated by biometric payment cards.

As we near completion of the development of Zwipe Pay ONE, which has been a

journey we embarked on together with IDEMIA and other key partners almost

two years ago, I am very excited to enter into the next phase of increased

commercial efforts and subsequent roll-out to consumers.

Zwipe has a historically strong pipeline, a highly competent, passionate and

agile organization managing a disruptive technology that is in demand in the

market, and a robust ecosystem of partners taking an increasingly proactive role

in promoting Zwipe. This is all laying a strong foundation for long-term value

creation. The journey has just begun.

Financial Update

·

Sales revenues in Q1 2021 were MNOK 0.3 (MNOK 0.4).

·

Average monthly operational cash flow was MNOK -6.3 in Q1 2021 versus MNOK -5.8

in Q1 2020. The increase is in line with higher activity in the company. During

the last quarter of 2020 and first quarter of 2021,

Zwipe has increased its staff in response to the increased?demand for piloting

and deployment of our payment solutions and services.

·

Zwipe was granted a second bank loan of MNOK 2.1 in February 2021 through the

second draw of the US Paycheck Protection Program (PPP). The loan is payable in

five years. Zwipe may be eligible for partial or full loan forgiveness given

fulfilment of a set of requirements.

·

The closing cash balance at the end of Q1 2021 was MNOK 108.9 (MNOK 54.6). The

development in cash balance since Q4 2020 is primarily a result of operational

cash flow of MNOK -18.8 and the second PPP bank loan of MNOK 2.1.

###

This is information that?Zwipe?AS is obligated to make public pursuant to the

continuing obligations of companies admitted to trading on Euronext Growth

Market Oslo, on Nasdaq First North Growth Market and the EU Market Abuse

Regulation. Certified Adviser on Nasdaq First North is FNCA Sweden

AB, info@fnca.se, +46 (0) 8528 00 399. The information was submitted for

publication, through the agency of the contact person set out below,

at?08:00?CET on?28 April 2021.

About Zwipe

Zwipe is pioneering the next generation contactless payments experience,

providing biometric payment cards components and wearables technology that

enable consumers to authorize transactions with their fingerprints without

compromising their privacy. Together with an ecosystem of partners including

global brands within digital security and financial services, Zwipe is "Making

Convenience Safe & Secure" for banks, merchants and consumers. Zwipe's solutions

address the hygiene and data theft pitfalls inherent in traditional

authentication methods. Headquartered in Oslo, Norway, with a global presence,

Zwipe is leading the next great shift in payments from contactless to contact

free. To learn more, visit www.zwipe.com

For more information, please contact:

Lars Kristian Solheim, CFO

+47?991?661 35

lars.kristian@zwipe.com