Zwipe AS — Interim / Quarterly Report 2021

Oct 26, 2021

ZWIPE AS - Third Quarter 2021 Operational Update

ZWIPE AS - Third Quarter 2021 Operational Update

OSLO, NORWAY - 26 October 2021

During the third quarter, Zwipe has continued to strengthen its foundation

for?launching pilots and?mass-volume roll out of biometric payment cards.

·

Mauritius-based ICPS,?one of Africa's leading card personalization

and?processing service providers,?partnered?with Zwipe to bring biometric

payment cards to Africa and Asia.

·

A?global Tier 1 smartcard manufacturer?started the evaluation of?the?Zwipe Pay

ONE?platform.

·

Zwipe received?an MNOK 17 (USD 1.9 million) commercial order from Beautiful Card

Corporation (BCC)?in Taiwan, which produces around 520 million cards annually,

of which?around 20?million are EMV?payment cards.

·

Middle East Payment Services?(MEPS), a Jordan-based commercial issuer of payment

cards, announced its decision?to pilot Zwipe Pay ONE with executives at?up to

20?Financial Institutions in?the?Levant?region[1].

·

Erik Selin invested?MNOK 104 in Zwipe through a private placement?to further

accelerate development and commercialization of Zwipe.

·

A European-based Global Tier 1 Bank, with several millions of payment cards

deployed globally, decided?to pilot Zwipe Pay ONE-based Biometric Payment Cards

in three European countries. The bank plans for a commercial launch?in?summer

2022, subject to positive pilot results.

·

Zwipe received?a?Commercial Order?of MNOK 3 (USD 318,000)?from?Inkript, one of

the largest payment card suppliers in the Middle East and North Africa (MENA)

region.

·

UAE-based card issuing and processing?provider?NymCard?joined

forces?with?Zwipe?to accelerate the deployment of biometric payment cards in the

Middle East and Africa.

·

Zwipe and India-based Que Processing Services (QPS)?announced collaboration?to

bring Zwipe Pay ONE biometric payment cards?in?Asia and the Middle East.

·

Zwipe and Lebanon-based Credit Card Management (CCM), who delivers payment

services to?more than 25 banks?in Lebanon, announced collaboration to launch

biometric payment card pilots in the country.

·

Norwegian?fintech?Reltime?selected?the Zwipe?Pay ONE platform to

power?its?biometric payment card offering as part of its global financial

services ecosystem,?with?the aim to launch?pilots from Q1 2022.

·

Zwipe America Inc. received full forgiveness of the second bank loan of $248 000

through the Paycheck Protection Program (PPP) which was granted and paid out in

the first quarter of 2021.

Significant Events?after the period

·

IC Payments, a Chile based fintech with offices in Uruguay and Argentina as well

as a solid network of partners across Latin America, partnered with Zwipe to

offer biometric payment solutions in the Latin American and Caribbean markets.

·

Credit Libanais, one of the largest banks in Lebanon and a principal member of

Visa and Mastercard, has chosen to pilot biometric payment card based on Zwipe

Pay ONE.

·

Zwipe has hired Claus Hansen as VP Sales and Business Development in APAC.

Claus is based in Singapore and has a long career working in the smart card

industry with more than 30 years' experience in APAC and a broad network in the

region.

Comments from the CEO

The third quarter of 2021 has been momentous for Zwipe in many ways.

On the customer side,?we?received our first commercial orders for subsequent

deployments of Zwipe Pay ONE) from BCC in Taiwan?and Inkript?in Lebanon with a

combined value of MNOK 20 (USD 2.2 million). Both players have strong regional

positions in Asia and the MENA region respectively.

We are also pleased that a?global Tier 1?Smartcard?Manufacturer decided to start

a comprehensive evaluation of the Zwipe Pay ONE platform, reflecting?the

relevance and competitiveness?of our?technology and offering.

On the issuer side, the innovativeness of Middle East Payment Services?(MEPS) to

launch a large-scale, multi-bank pilot with Zwipe Pay ONE to bank

executives across the?Levant region[1] was a great step forward and has inspired

us to develop new concepts for accelerated piloting that reduces upfront

preparation for the banks.

I was also thrilled that a European-based global Tier-1 bank decided to launch

Zwipe Pay ONE pilots in three European countries with intentions to

launch?commercially during summer 2022 subject to positive pilot

results.?Attracting global tier-1 players, not only among processors and card

manufacturers, but also among banks, is something we are very proud of at

Zwipe.

In addition, Reltime?decided to pilot and subsequently launch Zwipe Pay ONE

enabled cards?to bring world-class security?in its?decentralized financial

services ecosystem.

In parallel with all this, we further strengthened our reach, market coverage,

and implementation capabilities in Asia, Africa?and?the Middle East by

finalizing key Go-to-market partnerships with?ICPS?(part of the HPS

Group),?NymCard,?Que Processing Services?and Credit Card Management.

Partnerships such as these are vital in order to accelerate developments

and maximise the Zwipe Pay ONE opportunity.?I refer to this as "the Megaphone

effect".

To help quantify the business case for launching biometric payment cards for

issuers and further drive the biometric payment card opportunity across the

value chain, we have developed a comprehensive ROI (Return on

Investment) Calculator. The calculator demonstrates the financial value of Zwipe

Pay ONE to issuers and shows that, even without a card fee paid by the

cardholder, Zwipe Pay ONE can deliver a $15m annual net benefit for an average

US issuer with a 1 million credit card portfolio. The ROI model has been

developed together with recognized external industry experts. We were delighted

by the results and the reinforcement of the value that our offering can bring to

card issuers. The ROI calculator is now an integral part of our value

proposition to issuers to further accelerate the adoption of biometric payment

cards.

All in all, I am happy to report that we continue to experience broad-based

acknowledgement of Zwipe's competitiveness and value add for the industry from

all parts of the payment ecosystem.

Another significant highlight from the third quarter 2021 was?the MNOK

104 investment from the prominent Swedish investor Erik Selin through a private

placement of 4,000,000 new shares to further accelerate?our?ongoing

development,?commercialization?and global expansion.

As previously communicated, Zwipe's development efforts for Zwipe Pay ONE

has passed almost all critical milestones and major risk points, with piloting

and certification left before subsequent full commercialization and mass

volumes. Together with development and manufacturing partners, we are

progressing towards finalization of Zwipe Pay ONE, which will be followed by the

formal certification process by our card manufacturing customers with the

payment schemes. When verifying Zwipe Pay ONE, it is clear that we will have a

very cost competitive offering and enable our customers to launch biometric

payment cards with excellent performance resulting in a compelling user

experience for cardholders. Similar to many other companies engaged in

multinational development projects, the effects of COVID-19 have added

complexity and extended lead times to the overall Zwipe Pay ONE development

program, but I am pleased with how our organization continues to tackle and

overcome challenges and is well positioned to bring a fully commercially

available Zwipe Pay ONE offering to market as soon as we have completed the

final steps.

Finally, I am very proud of the Zwipe organization. The passion, competence,

agility, collaborativeness, responsiveness and winning culture that they live

out every day is what fuels our mission and drives us forward on our path to

market success, great customer satisfaction and creation of shareholder value.

Financial Update

·

Total revenues in Q3 2021 were 0.4 MNOK (MNOK 0.1).

·

Average monthly operational cash flow was MNOK -5.3 in Q3 2021 versus MNOK -4.4

in Q3 2020. The increase is a result of recruitments and higher activity in the

company. During 2021, Zwipe has increased its staff in response to the increased

number of customer engagements and growing demand for piloting and deployment of

our payment solutions and services.

·

The closing cash balance at the end of Q3 2021 was MNOK 183.7 (MNOK 117.3). The

development in cash balance since end of Q2 2021 (MNOK 94.9) is primarily a

result of operational cash flow of MNOK -15.8 and the private placement to Erik

Selin of MNOK 104 in August 2021.

·

As Zwipe received full forgiveness of the second PPP loan in August, Zwipe is

again debt-free.

Footnote 1: The Levant region includes Lebanon, Jordan, Palestine, Egypt, Iraq,

Libya, Syria, Turkey and Israel

###

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

continuing obligations of companies admitted to trading on Euronext Growth Oslo,

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 CEST on 26 October 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:

André Løvestam

+47?991?661 35

ir@zwipe.com