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Zwipe AS Interim / Quarterly Report 2021
3797_rns_2021-08-26_3c0684ab-0a96-4001-b04c-bfb4c5d3d613.pdf
Interim / Quarterly Report
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Interim Report January to June 2021
Second Quarter
- Second quarter revenues at TNOK 952 (486)1.
- Second quarter results after tax at TNOK -10 514 (-15 842).
- Profit per share for the second quarter of NOK -0.32 (-0.62).
- Cash flow from operations before financing at TNOK -12 385 (-12 367).
First Half Year
- Total revenues for the first half year TNOK 1 393 (880) ².
- Results after tax at TNOK -26 935 (-31 590).
- Profit per share for the first half year of NOK -0.82 (-1.25).
- Cash flow from operations before financing and facilitation at TNOK -31 234 (-39 594).
- Cash and cash equivalents amounted to TNOK 94 860 on the day of closing, 30 June 2021.
Significant events during the period
- 03 Feb 2021: VOPY selects Zwipe Pay ONE platform for its biometric payment cards.
- 10 Feb 2021: Zwipe expands its Asia-Pacific and European footprints with four new customers.
- 02 Mar 2021: Tag Systems steps up collaboration with Zwipe on Biometric Payment Cards.
- 06 Apr 2021: Zwipe and KL HI-TECH to bring next-generation payment cards to India.
- 07 Apr 2021: Be ys Pay selects Zwipe to bring Biometric Payment Cards in France and Benelux.
- 12 Apr 2021: Zwipe Establishes Regional Presence in the Middle East & North Africa Region and India.
- 28 Apr 2021: Zwipe releases public demo of Zwipe Pay ONE.
- 10 May 2021: FSS selects Zwipe Pay ONE for Next-Generation Contactless Cards to be offered globally.
- 11 May 2021: Zwipe and Beautiful Card Corporation to bring Zwipe Pay ONE biometric payment cards to markets in Asia.
- 03 Jun 2021: MEPS selects Zwipe Pay ONE for Next-Generation Contactless Cards in the MENA region.
- 16 Jun 2021: Silkways Card & Printing Ltd selects Zwipe to deliver Biometric Payment Cards in Bangladesh.
- 18 Jun 2021: Zwipe Establishes Local Representation in Bangladesh.
- 24 Jun 2021: Zwipe and Network International to deliver biometric payment cards to banks in the Levant region.
Significant actions after the period
- 16 Jul 2021: ICPS partners with Zwipe to bring Biometric Payment Cards to Africa and Asia.
- 23 Jul 2021: Zwipe Pay ONE under evaluation with Global Tier 1 Smartcard Manufacturer.
- 03 Aug 2021: Zwipe receives USD 1.9 million commercial order from Beautiful Card Corporation.
- 16 Aug 2021: MEPS to pilot Zwipe Pay ONE Biometric Cards with key executives at multiple Financial Institutions in Levant.
1 Comparative figures in brackets are for Q2 2020.
² Comparative figures in brackets are for H1 2020.
Table of content 03 - 04
Message from the CEO Financials Market and Operational update Financial Statements Notes 05 - 07 08 - 13 14 - 19 20 - 24
Message from the CEO
Continued strong progress
During the first half of the year, Zwipe Pay ONE and our compelling end-to-end offering continued to drive interest from all stakeholders in the payment ecosystem. Thanks to continued strong and growing global interest in biometric payment cards among Smart Card Manufacturers, Personalization Bureaus, Payment Processors, and Financial Institutions, we have expanded our ecosystem in all these categories and will continue to further strengthen our foundation for future market success. During the period, we announced important new events and milestones:
• Delivery agreements with six smart card manufacturers, jointly delivering over 200 million payment cards annually in APAC, India, and Europe. We also extended our agreement with TAG Systems (part of Austria Card Group), which delivers 100 million payment cards annually in key markets worldwide.
• Go-To-Market collaboration with leading payment service providers, notably Financial Software and Systems (FSS), Network International, and Middle East Payment Services (MEPS) which together manage over 800 million payment cards.
To proactively support our new customers and partners, we've taken many steps to strengthen our organization, including:
• The appointment of Ramzi Saboury as the GM for the MENA region. He has over 25 years of financial industry experience in this market and has successfully launched many payment solutions.
• Finalized collaboration agreements with Masterline and Sonali Intellect Ltd. to drive our business in India and Bangladesh, respectively.
In April 2021, we demonstrated the Zwipe Pay ONE platform with a demo card and a home enrollment solution. We successfully carried out EMV authenticated transaction at Point-of-Sale terminals in a test environment. The feedback from the market was highly positive as we were able to demonstrate that transactions could be executed quickly and reliably, providing a considerable improvement to user experience, security, safety, and hygiene.
We have now passed almost all critical milestones and major risk points, with piloting and certification left before full commercialization and mass volumes.
Several of Zwipe's smart card manufacturing partners have completed their internal testing processes and have begun small-scale manufacturing trials. In August 2021, we received our first commercial order for the Zwipe Pay ONE platform from Beautiful Card Corporation (in Taiwan). The net contract value is \$1.9 million, marking the transition to a new phase on a very exciting journey for Zwipe. Deliveries are planned to begin in 2022. The order is a testament to how Zwipe Pay ONE is getting closer to a mass-market launch and how our global delivery set-up is getting ready to bring the next generation of payment cards to issuers, smart card manufacturers and payment processors across multiple markets.
At the same time, and as part of our global expansion plan, we have established wholly owned subsidiaries in the UK and Germany to support the global mass-market deployment of Zwipe Pay ONE powered payment cards.
Adding value through our unique and highly differentiated offer
The offer Zwipe brings to the market has proven highly attractive. It consists of the industry's most integrated secure element, offering superior energy efficiency and biometric performance at highly competitive manufacturing cost. Together with partners we manufacture our internally developed ISO module which integrates our secure element with our ISO contact plate and ultimately with our passive inlay. We provide methods and solutions for our customers to embed the fingerprint sensor during manufacturing of the biometric payment cards. Since our secure element is so advanced in its integration of capabilities that are otherwise provided by external components, our passive inlay allows for
our customers to manufacture the complete biometric card at industry-leading cost. In addition to our turnkey technology offering, we offer value-added services and insights in our end-to-end approach. The number of customers that have selected Zwipe Pay ONE is the best testament to the competitive nature of our unique and highly differentiated offer.
With strong market traction and a welcoming reaction from major industry players worldwide, Zwipe is on track to deliver on our ambitions and bring the next generation payment experience powered by biometrics to consumers globally.
André Løvestam, CEO at Zwipe
FINANCIALS
Zwipe Interim Report January to June 2021
- -
5 Zwipe 2021
Profit and Loss during First Half of 2021
Zwipe reported total revenues of TNOK 1 393 (880) during H1 2021, mostly related to the sale of payment products and services.
Operating expenses in the first half of 2021 were MNOK 28.0 compared to MNOK 32.4 in the first half of 2020. Excluding one-off costs in the first half of 2020 related to the third of four stages in our joint technology investments with Idemia (MNOK 10.6), operating expenses increased by MNOK 6.2 in the first half of 2021, according to plan. The increase in operating expenses was primarily related to higher personnel expenses of MNOK 1.9, including increased expenses to the stock option program. In addition, costs to contractors have increased with MNOK 3.9. During the second half of 2020 and the first half of 2021, Zwipe has increased its staff (employees and contractors) to meet the strong demand for the company's solutions and to prepare for piloting and deployment of our card payment solutions and services. Higher personnel and contractor expenses and depreciation are compensated by lower expenses on other operating expenses of MNOK 1.6.
During the first half of 2021, cash flow from operations and investments, before financing and facilitation, improved to MNOK -31.2 (-39.6). Adjusting for one-off payments in the first half of 2020 related to the joint technology investment with Idemia (MNOK 9.7) and the restructuring program (MNOK 2.3), the negative operating cash flow in the first half of 2021 increased by MNOK 3.6 compared to the first half of 2020. Hence, the underlying average monthly operating cash flow in the first half of 2021 was MNOK -5.2 (MNOK -4.6).
EBIT as of the first half of 2021 improved to MNOK -26.6 (-31.5). The results after tax were MNOK -26.9 (-31.6).
Investments, Liquidity and Financial Position
Zwipe has a strong portfolio of patents and in-house biometric technology development. The underlying value of these has only to a very limited degree been capitalized on the Balance Sheet. Total intangible assets are booked at MNOK 6.7. Production equipment, machinery, and fixtures are valued at MNOK 3.2.
On 30 June 2021,2021 cash and cash equivalents were MNOK 94.9, down MNOK 30.4 from the closing balance at the end of 2020 (MNOK 125.3), and down MNOK 14 from the closing balance at the end of the first quarter of 2021 (MNOK 108.9). The development in cash balance since year-end 2020 is mainly a result of the operational cash flow of MNOK -31.2 for the first half year of 2021.
Zwipe America Inc. was granted full forgiveness for the loan granted in the second quarter of 2020 of \$248 000 (MNOK 2.1) through the Paycheck Protection Program (PPP). This means that there is no requirement for repayment of the loan and interest. In addition, Zwipe America Inc. was in the first quarter of 2021 granted a second bank loan of an additional \$248 000 through the Paycheck Protection Program (PPP). This loan was also granted full forgiveness in August 2021.
Total equity was as of 30 June 2021 MNOK 98.2.
Risks and Uncertainties
Zwipe is exposed to various types of market, operational and financial risks. Zwipe continuously monitors risk factors at a corporate and subsidiary level and takes appropriate action when needed to eliminate or mitigate any potential negative impact on operational and financial performance. Please refer to the Annual Report 2020 and prospectus dated 16 October 2020 for a more detailed description of risk factors. These are available at www.zwipe.com.
Assurance by the board of directors
We confirm, to the best of our knowledge, that the condensed set of financial statements for the period 1 January to 30 June 2021 has been prepared in accordance with the Norwegian Accounting Act and accounting standards generally accepted in Norway (NGAAP) and gives a true and fair view of the Zwipe Group's assets, liabilities, financial position, and results for the period.
We also confirm, to the best of our knowledge, that the financial report includes a fair review of important events that have occurred during the first six months of the financial year and their impact on the financial statements and any major related party transactions.
JÖRGEN LANTTO (sign.) CHAIRMAN OF THE BOARD
TANYA JUUL KJÆR (sign.) BOARD MEMBER
DIDERIK SCHONHEYDER (sign.) BOARD MEMBER
DENNIS JONES (sign.) BOARD MEMBER
JOHAN BIEHL (sign.) BOARD MEMBER
STINA GRANBERG (sign.) BOARD MEMBER
ANDRÉ LØVESTAM (sign.) CEO
MARKET AND OPERATIONAL UPDATE
Zwipe Interim Report January to June 2021
8 Zwipe 2021
Market Development
Based on positive feedback from their trials of biometric payment cards, BNP Paribas and Credit Agricole recently stated that they are now expanding their offers. BNP Paribas will offer their biometric Premier VISA card in all branches to all customers, charging an additional fee of €24 per annum. BNP Paribas stated: "After a trial of the Thales biometric payment card and its positive outcome, we have now opened the offer to all our customers with confidence. This premium solution addresses several challenges such as convenience, safety and contactless".
This is good news for the entire industry as it confirms the inherent value proposition of biometric payment cards and demonstrates the market is moving in the right direction while putting increasing pressure on market players to ensure their long-term competitiveness.
It also raises the confidence level in the market potential, with a tendency towards upward revisions of market projections. For instance, leading analyst firms UBS and Goode Intelligence released new sector reports suggesting, respectively, a 15% and 20% penetration for biometric payment cards by 2026. Furthermore, according to the latest Mastercard report, 9 out of 10 consumers will consider using biometrics and new payment technologies by 2025.
Recent market observations
- Zwipe conducted independent consumer insights across the US, Canada, the UK, Romania, Norway, and Sweden to capture end users' payments preferences and views on biometric payment cards. Consumers' feedback from these different markets has been remarkably consistent:
- 7 out of 10 consumers in the US, Canada, the UK, Norway, Sweden, and Romania want a 100% touch-free payment solution at the point of sale.
- Over 75% of consumers are concerned about touching the PIN-pad of the payment terminal due to the risk of infection.
- 60% of consumers are willing to pay an additional fee for biometric cards (without any other benefits).
- Contactless cards remain the most popular means of in-store payments.
- 79% of consumers would like their next payment cards to be biometric.
These data points are consistent with other studies done by Idemia, G&D/ Goode Intelligence, and others.
- A study of 2.000 consumers in the UK by Zopa³ found that 30% of lost debit cards had money stolen through unauthorized contactless transactions. The victims lost £40 each on average on contactless fraud. As the contactless limit is due to be increased to £100 this year, UK banks now fear a potential fraudulent spending spree, and 67% of consumers are worried about contactless fraud. In this context, the biometric payment cards deliver peace of mind with their state-of-the-art security capability.
- ³ Zopa claims Brits set to lose 13 million bank cards this summer | moneynet.co.uK
COVID-19 has provided an even greater push for innovation in payments
Cards continued to grow and remain the most popular means of payment in most regions of the world, leading to a projected 32% growth in the number of cards in circulation from 2018 to 2023. This was captured in great detail by the Global Payments Repor⁴ from FIS, supported by an analysis from PYMTS and Idemia⁵ in August.
• Projections to 2023 reflect a 32.5% volume increase in card issuance.
• Contactless cards are being emphasized for health, security, and safety. Banks are issuing more contactless cards and sometimes even re-carding to add different functionalities to improve the payment experience.
⁴ Home | Global Payments Report 2021
⁵ www.pymnts.com/wp-content/uploads/2021/08/PYMNTS-Digital-Card-Usage-August-2021.pdf
Operational Development
Commercial progress
Following the significant progress in 2020, Zwipe during the first half further expanded its network of smart card manufacturing customers while also strengthening existing partnerships – here are more details:
• Swedish fintech Vopy, a provider of embedded financial services globally for telecom and financial institutions, 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, Middle East, and North America. The group delivers 100 million payment cards each year. Tag Systems also placed a small initial order for Zwipe Pay ONE.
• 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.
• FSS, Asia's largest payment processor, selected Zwipe to deploy ZPO Biometric Cards globally. FSS is one of the world's most significant actors within cards and payments services to banks managing a portfolio of >800 million cards. FSS and Zwipe will work to initiate pilots and early commercial deliveries from later in 2021.
• Beautiful Card Corporation has completed rigorous tests of Zwipe Pay ONE with very good results. They will scale up production with the aim of delivering pilots and commercial deliveries before the end of 2021.
• Middle East Payment Services (MEPS) will bring next
generation contactless payment cards in the MENA region by combining MEPS's Issuance Platform with our Zwipe Pay ONE biometric card platform. MEPS is aiming to make BPCs available for piloting and commercial deployment during H2 2021.
- Silkways Card & Printing Ltd (Silkcard) selects Zwipe to deliver Zwipe Pay ONE powered biometric payment cards in Bangladesh. Silkcard will manufacture and personalize biometric card payments for issuer clients while Zwipe will help the banks through all stages of pilot, launch, and mass-market rollout.
- Zwipe establishes local representation in Bangladesh, appointing Sonali Intellect Limited as sales and strategic business development partner to help banks, card personalization bureaus, and processors to support Zwipe Pay ONE cards with the ambition to deliver pilots later this year.
• Network International (NI) selects Zwipe to deliver biometric payment cards to banks in the Levant region. Zwipe will provide support, and cards will be delivered by a 3rd party SCM; thus, NI can focus on delivering Zwipe Pay ONE powered cards to issuers.
After the period, Zwipe also announced the following: .
- ICPS, a leading international card payment processor and card personalization bureau, will bring Zwipe Pay ONE enabled biometric payment cards to banks across Africa and Asia. Zwipe will provide a Biometric ISO contact plate module, Passive inlay, Fingerprint sensor, OS license, and enrolment sleeves.
- A Global Tier 1 smartcard manufacturer is evaluating Zwipe Pay ONE components for inhouse manufacturing of biometric payment cards.
- Zwipe receives a commercial order of USD 1.9 million from Beautiful Card Corporation. The order covers the supply of modules, sensors, and inlays, enabling BCC to be one of the first manufacturers to bring significant volumes of this next generation of biometric payment cards to market.
• MEPS and Zwipe announce the launch of a pilot of Biometric Payment Cards based on the Zwipe Pay ONE platform to top-level executives and key decision makers at up to 20 banks and issuers in the Levant region.
Technical Progress
Zwipe's engineering team continued to progress significantly with its technology platform for biometric payment cards, Zwipe Pay ONE, through the first half of 2021. The Zwipe ISO contact plate module and passive inlay have been manufactured in pilot volumes and passed successful lamination trials with lead customers. We also engaged with equipment manufacturers in the field of card production and provided components for implanting trials.
Zwipe built sample cards and publicly demonstrated enrolment and demo transactions using point-of-sale terminals with a test acquiring infrastructure.
Having multiple Enrolment Solutions is a key deliverable for Zwipe Pay ONE. Zwipe has continued to progress its development of mobile enrolment solutions, in addition to other developments such as sleeves, envelopes (pull-out cardboard enrolment solutions) and in-branch tablets.
The partnerships with Idemia and Idex are progressing well, and Zwipe has taken important steps to secure supply of all key components for its products through 2022 and beyond.
Certification and preparations for mass volume roll out
As a component and technology provider, Zwipe does not seek payment scheme certification for the finished card product. It is our customers – the smart card manufacturers – who seek card certification, called Type Approval.
To simplify the process for our customers, Zwipe plans to secure a component level certification from schemes that our customers can reference, which will significantly simplify their application process. Because Zwipe will have already performed the majority of the required testing, the customer can leverage the test results from Zwipe, hence their scope for testing will be greatly reduced.
To confirm the design before certification testing, Zwipe is undergoing pre-testing, called "debug testing". In these debug tests, the same certified laboratories perform a subset of the tests required for certification. Debug testing is typically performed for the most critical items, such as interoperability with multiple brands and generations of payment terminals. We have already performed such pre-tests at accredited test labs with excellent results.
Organizational development
At Zwipe, the team drives customer satisfaction and are viewed as the key to our ongoing success. To unify and strengthen our team, we have completed a culture-building program where all employees have shaped our core values (Innovative, Collaborative, Adaptable, and Passionate) and winning team culture. In addition, the management team and employee representatives have defined important brand attributes that will help sharpen our brand story to help us stand out from the crowd even more.
We have strengthened our team across all functions during the first half-year – commercial, technical, operational, and regional sales & support. We were particularly pleased to welcome John Goodale as our new Chief Commercial Officer. John Goodale has a long and proven track record from one of the world's largest processors, TSYS, and professional services at KPMG and DMR. He leads Zwipe's engagement and conversion efforts with smartcard manufacturers globally and supports engagement with issuers and selected go-to-market partners to strengthen Zwipe's position.
To effectively serve our growing partner network and issuers, we have strengthened our presence in MENA region, India and Bangladesh.
As we continue our path towards commercialization, we are pleased to see further strengthening of our board of directors with two leading payment and technology professionals:
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Tanya Juul Kjær is head of Payments at Tink. Previously she was leading the Checkout product area at H&M Group. She has worked in the fintech industry for most of her career, including various product and leadership roles at Klarna, and as product director at iZettle (now part of PayPal).
-
Stina Granberg has worked in the Fintech industry for the past seven years, most recently in the position as Head of Customer Services for Regional Businesses at Worldline and Chief Operating Officer at Bambora, since November part of Worldline group. Before joining Bambora in 2018, she worked at Klarna from 2014 to 2018. She also has a varied background in the Fast-Moving Consumer Goods and Retail Industries.
FINANCIAL STATEMENTS GROUP AND PARENT COMPANY
Zwipe Interim Report January to June 2021
14 Zwipe 2021
Income Statement (Amounts in 1000 NOK)
| Zwipe Group | |||||||
|---|---|---|---|---|---|---|---|
| H1 2021 | H1 2020 | FY 2020 | Note | H1 2021 | H1 2020 | FY 2020 | |
| Operating Income | |||||||
| 1 001 | 862 | 1 655 | 1 | Sales revenue | 1 001 | 862 | 1 655 |
| 392 | 18 | 182 | 1 | Other operating income | 93 | 0 | 0 |
| 1 393 | 880 | 1 837 | Operating income | 1 094 | 862 | 1 655 | |
| Operating expenses | |||||||
| 427 | 212 | 4 808 | COGS | 427 | 212 | 4 808 | |
| 8 804 | 6 900 | 18 973 | 6 | Payroll expenses | 7 532 | 3 241 | 11 894 |
| 1 198 | 766 | 2 008 | 2,3 | Depreciation, amortization & impairment | 1 107 | 766 | 1 990 |
| 17 579 28 008 |
24 511 32 389 |
37 947 63 736 |
Other operating expenses Operating expenses |
18 808 27 874 |
28 365 32 584 |
45 368 64 061 |
|
| -26 615 | -31 510 | -61 899 | Operating profit/loss | -26 780 | -31 722 | -62 405 | |
| Financial income and expenses | |||||||
| 0 | 26 | 148 | Other interest income | 0 | 26 | 148 | |
| 128 | 987 | 441 | Other financial income | 128 | 987 | 441 | |
| 1 | 2 | 3 | Other interest expenses | 1 | 2 | 3 | |
| 417 | 1 032 | 569 | Other financial expenses | 417 | 1 032 | 569 | |
| -290 | -21 | 17 | Net financial income and expenses | -290 | -22 | 17 | |
| -26 905 | -31 531 | -61 882 | Results before tax | -27 070 | -31 744 | -62 388 | |
| 30 | 59 | 191 | Tax expense | 0 | 0 | 0 | |
| -26 935 | -31 590 | -62 073 | Results for the year | -27 070 | -31 744 | -62 388 | |
| Profit(+)/Loss(-) for the year attributable from: | |||||||
| -26 935 | -31 590 | -62 073 | Share premium reserve | -27 070 | -31 744 | -62 388 | |
| 0 | 0 | 0 | Uncovered loss | 0 | 0 | 0 | |
| -26 935 | -31 590 | -62 073 | TOTAL | -27 070 | -31 744 | -62 388 | |
| 32 982 685 32 929 583 |
25 525 261 25 259 373 |
32 906 576 27 367 556 |
Number of shares end of period Average number of shares in the period before/after dilution |
||||
-0,82 -1,25 -2,27 Profit pr. share before/after dilution
Balance Sheet (Amounts in 1000 NOK)
| Zwipe Group | Zwipe AS | ||||||
|---|---|---|---|---|---|---|---|
| H1 2021 | H1 2020 | FY 2020 | Note | Assets | H1 2021 | H1 2020 | FY 2020 |
| Long-term Assets | |||||||
| Intangible Assets | |||||||
| 6 716 | 7 271 | 7 359 | 3 | Research and Development | 6 716 | 7 271 | 7 359 |
| 6 716 | 7 271 | 7 359 | Total Intangible Assets | 6 716 | 7 271 | 7 359 | |
| Fixed Assets | |||||||
| 3 192 | 2 538 | 2 568 | 2 | Equipment, fixtures and fittings | 3 117 | 2 538 | 2 487 |
| 3 192 | 2 538 | 2 568 | Total Fixed Assets | 3 117 | 2 538 | 2 487 | |
| Financial Assets | |||||||
| 0 | 0 | 0 | Investment in subsidiaries | 386 | 386 | 386 | |
| 437 | 493 | 436 | Other financial receivables | 437 | 493 | 436 | |
| 437 | 493 | 436 | Total Financial Assets | 823 | 879 | 822 | |
| 10 345 | 10 302 | 10 362 | Total Long-term Assets | 10 655 | 10 688 | 10 668 | |
| Current Assets | |||||||
| Inventories | |||||||
| 493 | 4 012 | 313 | Inventories | 493 | 4 012 | 313 | |
| 493 | 4 012 | 313 | Total Inventories | 493 | 4 012 | 313 | |
| Receivables | |||||||
| 701 | 455 | 72 | Accounts receivables | 701 | 455 | 72 | |
| 2 931 | 9 162 | 1 361 | Other receivables | 4 051 | 8 775 | 1 189 | |
| 3 632 | 9 617 | 1 433 | Total debtors | 4 752 | 9 230 | 1 261 | |
| Cash | |||||||
| 94 860 | 43 168 | 125 255 | Bank deposits, cash | 86 956 | 36 064 | 119 067 | |
| 94 860 | 43 168 | 125 255 | Total cash | 86 956 | 36 064 | 119 067 | |
| 98 984 | 56 797 | 127 001 | Total Current Assets | 92 201 | 49 306 | 120 640 | |
| 109 329 | 67 099 | 137 363 | Total Assets | 102 856 | 59 994 | 131 308 | |
Balance Sheet (Amounts in 1000 NOK)
| Zwipe Group | Zwipe AS | ||||||
|---|---|---|---|---|---|---|---|
| H1 2021 | H1 2020 | FY 2020 | Note | Equity and liabilities | H1 2021 | H1 2020 | FY 2020 |
| Equity | |||||||
| Paid-up Equity | |||||||
| 3 298 | 2 553 | 3 291 | 5 | Share capital | 3 298 | 2 553 | 3 291 |
| 94 877 | 47 251 | 119 309 | Share premium reserve | 90 129 | 42 099 | 114 691 | |
| 98 175 | 49 803 | 122 599 | Total restricted equity | 93 428 | 44 652 | 117 981 | |
| 98 175 | 49 803 | 122 599 | Total equity | 93 428 | 44 652 | 117 981 | |
| Liabilities | |||||||
| Long-term liabilities | |||||||
| 2 125 | 2 419 | 942 | 4 | Other long term liabilities | 0 | 0 | 0 |
| 2 125 | 2 419 | 942 | Total of other long term liabilities | 0 | 0 | 0 | |
| Short-term Liabilities | |||||||
| 1 375 | 11 375 | 3 119 | Accounts Payables | 2 151 | 11 369 | 3 701 | |
| 2 700 | 744 | 2 464 | Public duties payable | 2 700 | 744 | 2 464 | |
| 30 | 58 | 0 | Tax payable | 0 | 0 | 0 | |
| 4 923 | 2 699 | 8 239 | Other short term liabilities | 4 577 | 3 228 | 7 161 | |
| 9 029 | 14 876 | 13 822 | Total short-term liabilities | 9 428 | 15 342 | 13 326 | |
| 11 154 | 17 296 | 14 764 | Total liabilities | 9 428 | 15 342 | 13 326 | |
| 109 329 | 67 099 | 137 363 | Total equity and liabilities | 102 856 | 59 994 | 131 308 |
| Zwipe Group | (Amounts in 1000 NOK) | Zwipe AS | ||||||
|---|---|---|---|---|---|---|---|---|
| H1 2021 | H1 2020 | FY 2020 | Note | H1 2021 | H1 2020 | FY 2020 | ||
| -26 935 | -31 590 | -62 073 | Net Income / (Loss) before tax | -27 070 | -36 886 | -62 389 | ||
| 0 | 0 | 0 | Taxes paid | 0 | 0 | 0 | ||
| 1 669 | 763 | 1 888 | 6 | (+) Option cost no cash effect | 1 669 | 2 559 | 1 888 | |
| -93 | 0 | 0 | (-/+) Gain/Loss of on sale of assets | -93 | 0 | 0 | ||
| 1 198 | 766 | 2 008 | 2,3 | (+) Depreciation, amortisation & impairment | 1 107 | 879 | 1 990 | |
| -180 | -908 | 2 791 | (-) Change in Inventory | -180 | -459 | 2 791 | ||
| -651 | 155 | 255 | (-) Change in Accounts Receivable | -629 | 382 | 303 | ||
| -1 567 | -2 857 | 4 967 | (-) Change in Other Current Assets | -2 864 | -20 | 4 676 | ||
| -1 736 | -1 032 | -7 549 | (+) Change in Accounts Payables | -1 550 | -3 890 | -6 882 | ||
| -1 849 | -4 000 | 216 | (+) Change in Current Liabilities | -2 297 | 5 680 | -2 686 | ||
| -30 145 | -38 703 | -57 497 | Net Cash use in Operating Activities | -31 906 | -31 754 | -60 309 | ||
| Cash Flows from Investing Activities | ||||||||
| -1 089 | -891 | -2 259 | 2,3 | Intangible Assets and Capital Expenditures | -1 004 | -2 788 | -2 152 | |
| -1 089 | -891 | -2 259 | Net Cash Provided by (used in) Investing Activities | -2 788 | -2 152 | |||
| -31 234 | -39 594 | -59 756 | Operational Cash Flow | -32 910 | -34 542 | -62 461 | ||
| Cash Flows from Financing Activities | ||||||||
| 852 | 67 004 | 177 724 | Equity Issue | 852 | 120 069 | 177 724 | ||
| -52 | -8 443 | -16 313 | Transaction cost not recognized over P&L | -52 | -8 002 | -16 313 | ||
| 0 | 564 | 730 | Repayment of loan | 0 | -15 126 | 564 | ||
| 800 | 59 125 | 162 141 | Net Cash Provided by Financing Activities | 800 | 96 941 | 161 974 | ||
| 39 | 402 | -365 | Effect of Foreign Currency Translation | |||||
| -30 396 | 19 932 | 102 020 | Net Increase / (Decrease) in Cash and Cash Equivalents | 62 399 | 99 513 | |||
| 125 255 | 23 236 | 23 236 | Cash and Cash Equivalents at Beginning of Period | -32 111 119 067 |
9 302 | 19 554 | ||
| 94 860 | 43 168 | 125 255 | Cash and Cash Equivalents at End of Period | 86 956 | 71 700 | 119 067 | ||
| -30 395 | 19 932 | 102 020 | Net cash flow | -32 111 | 62 399 | 99 513 |
Cash Flow Statement
Statement of changes in equity
(Amounts in 1000 NOK)
Zwipe Group
| Share capital | Share | Uncovered | Total equity | |
|---|---|---|---|---|
| January 1st 2020 | 1 595 | premium 78 830 |
loss 0 |
80 426 |
| Proceeds from issue of shares | 1 695 | 109 024 | 110 720 | |
| Issue costs | -8 199 | -8 199 | ||
| Uncovered loss | 0 | |||
| Annual net profit/loss | -62 073 | -62 073 | ||
| Share based compensation | 1 888 | 1 888 | ||
| Other changes in equity | 0 | |||
| Currency effect | -163 | -163 | ||
| December 31st 2020 | 3 291 | 119 309 | 0 | 122 599 |
| Proceeds from issue of shares | 8 | 844 | 852 | |
| Transaction cost | -4 | -4 | ||
| Share based compensation | 1 669 | 1 669 | ||
| Other changes in equity | -20 | -20 | ||
| Net profot/loss | -26 935 | -26 935 | ||
| Currency effect | 15 | 15 | ||
| June 30th 2020 | 3 298 | 94 877 | 0 | 98 175 |
Zwipe AS
| Share capital | Share | Uncovered | Total equity | |
|---|---|---|---|---|
| January 1st 2020 | 1 595 | premium 74 366 |
loss 0 |
75 961 |
| Proceeds from issue of shares | 1 695 | 109 024 | 110 720 | |
| Unregistered capital increase/decrease | 0 | 0 | ||
| Issuance cost | -8 199 | -8 199 | ||
| Uncovered loss | 0 | 0 | ||
| Annual net profit/loss | -62 389 | -62 389 | ||
| Share based compensation | 1 888 | 1 888 | ||
| Other changes in equity | 0 | |||
| December 31st 2020 | 3 291 | 114 691 | 0 | 117 981 |
| Proceeds from issue of shares | 8 | 844 | 852 | |
| Transaction cost | -4 | -4 | ||
| Options | 1 669 | 1 669 | ||
| Net profot/loss | -27 070 | -27 070 | ||
| June 30th 2020 | 3 298 | 90 129 | 0 | 93 427 |
NOTES TO THE FINANCIAL STATEMENTS
Zwipe Interim Report January to June 2021
20 Zwipe 2021
Accounting policies
Zwipe Group and Zwipe AS
The financial statements have been prepared in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway. All notes of importance for substantiation of the accounts are included.
Changes in accounting policies
There has not been any accounting policy change in H1 2021.
NOTES
All amounts are presented in 1000 NOK
Note 1 Revenues
| Zwipe AS | Group | |||||
|---|---|---|---|---|---|---|
| Activity distribution | H1 2021 | H1 2020 | 2020 | H1 2021 | H1 2020 | 2020 |
| Revenues from sale of goods and services | 1 001 | 862 | 1 655 | 1 001 | 862 | 1 655 |
| Revenues from sub lease of offices | 0 | 0 | 0 | 299 | 0 | 141 |
| Gain on sales of fixed assets | 93 | 0 | 0 | 93 | 18 | 40 |
| Total | 1 094 | 862 | 1 655 | 1 393 | 880 | 1 836 |
| Zwipe AS & Group | |||||
|---|---|---|---|---|---|
| Revenues from sale of goods and services | H1 2021 | H1 2020 862 - |
2020 1 574 81 |
||
| Payment products Payment services |
633 | ||||
| 368 | |||||
| Total | 1 001 | 862 | 1 655 | ||
| Zwipe AS & Group | |||||
| Geographical distribution | H1 2021 | H1 2020 | 2020 | ||
| Norway | 246 | - | 81 | ||
| Other countries | 756 | 862 | 1 574 | ||
| Total | 1 001 | 862 | 1 655 |
Note 2 Fixed assets
| Zwipe AS | |||||
|---|---|---|---|---|---|
| Office machinery |
Tools | Machinery and plant in progress |
Total | ||
| Acquisition cost 01.01.2021 | 444 | 7 149 | 457 | 8 050 | |
| Additions | 89 | 949 | 273 | 1 311 | |
| Transfers | 0 | 232 | -232 | 0 | |
| Skattefunn/Horizon 2021 | 0 | -326 | 0 | -326 | |
| Disposals | 0 | 0 | 0 | 0 | |
| Acquisition cost 30.06.2021 | 533 | 8 003 | 499 | 9 035 | |
| Accumulated depreciation/ impairment 30.06.2021 | 386 | 5 532 | 0 | 5 918 | |
| Book value 30.06.2021 | 147 | 2 472 | 499 | 3 117 | |
| Depreciation in the year | 21 | 335 | 0 | 356 | |
| Impairment in the year | 0 | 0 | 0 | 0 | |
| Total Depreciation/impairment in the year | 21 | 335 | 0 | 356 | |
| Depreciation plan | Linear | Linear | |||
| Economic useful life | 3 year | 5 year |
| Zwipe Group | ||||
|---|---|---|---|---|
| Office machinery |
Tools | Machinery and plant in progress |
Total | |
| Acquisition cost 01.01.2021 | 543 | 7 149 | 457 | 8 148 |
| Additions | 174 | 949 | 273 | 1 396 |
| Transfer | 0 | 232 | -232 | 0 |
| Skattefunn/Horizon 2021 | 0 | -326 | 0 | -326 |
| Disposals | 0 | 0 | 0 | 0 |
| Acquisition cost 30.06.2021 | 717 | 8 003 | 499 | 9 218 |
| Accumulated depreciation/ impairment 30.06.2021 | 495 | 5 532 | 0 | 6 026 |
| Book value 30.06.2021 | 222 | 2 471 | 499 | 3 192 |
| Depreciation in the year | 112 | 335 | 0 | 447 |
| Impairment in the year | 0 | 0 | 0 | 0 |
| Total Depreciation/impairment in the year | 112 | 335 | 0 | 447 |
| Depreciation plan | Linear | Linear | ||
| Economic useful life | 3 year | 5 year |
Note 3 Intangible assets
| Zwipe AS & Group | ||||||
|---|---|---|---|---|---|---|
| Research and development |
Concessions, patents etc. |
Research and development in progress |
Total | |||
| Acquisition cost 01.01.2021 | 14 180 | 4 108 | 7 398 | 25 686 | ||
| Adjustment acquisution cost | -3 | 0 | 0 | -3 | ||
| Additions | 0 | 0 | 0 | 0 | ||
| Transfer | 7 398 | 0 | -7 398 | 0 | ||
| Skattefunn/Horizon 2021 | 112 | 0 | 0 | 112 | ||
| Disposals | 0 | 0 | 0 | 0 | ||
| Acquisition cost 30.062021 | 21 686 | 4 107 | 0 | 25 793 | ||
| Accumulated amotization/ impairment 30.062021 | 14 932 | 4 108 | 38 | 19 078 | ||
| Adjustment acc. Depreciation/impairment 30.06.2021 | 39 | 0 | -39 | 0 | ||
| Book value 30.062021 | 6 715 | 0 | 1 | 6 716 | ||
| 0 | ||||||
| Amortization in the year | 752 | 0 | 0 | 752 | ||
| Impairment in the year | 0 | 0 | 0 | 0 | ||
| Total Depreciation and amortization in the year | 752 | 0 | 0 | 752 | ||
| Depreciation plan | Linear | Linear | ||||
| Economic useful life | 5 year | 5 year |
Note 4 Long Term Debt
Zwipe America Inc. was granted a bank loan of \$248 000 in Q2 2020 through the Paycheck Protection Program (PPP). The loan was fully forgiven in June 2021. The loan forgiveness is accounted for as cost reduction.
Zwipe America Inc. was granted a second bank loan of \$248 000 in Q1 2021 through the Paycheck Protection Program (PPP). The loan is at 1% interest rate with maturity date February 2026 .Zwipe may be eligible for partial or full loan forgiveness given fulfilment of a set of requirements. The loan was fully forgiven August 2021.
Note 5 Share capital and shareholder information
Zwipe AS & Group
| Share capital | Holding | Nominal value | Book value |
|---|---|---|---|
| Ordinary Shares | 32 982 685 | 0,1 | 3 298 269 |
The company has one class of shares and all shares come with full voting rights.
The share capital is owned by the following shareholders as per 30.06.2021
| Shareholders | Holding | Stake |
|---|---|---|
| Vasastaden/Niclas Eriksson and related parties* | 5 583 527 | 16,93 % |
| Lars Windfeldt and related parties** | 1 936 816 | 5,87 % |
| Coeli Wealth Management AB | 1 274 149 | 3,86 % Nominee account |
| Försäkringsaktiebolaget Avanza Pension | 1 170 059 | 3,55 % |
| Energetic AS*** | 916 000 | 2,78 % |
| Jörgen Lantto*** | 866 666 | 2,63 % |
| Nordnet Pensionsförsäkring AB | 747 811 | 2,27 % |
| Skandinaviska Enskilda Banken AB | 570 640 | 1,73 % Nominee account |
| Concito AS**** | 568 260 | 1,72 % |
| Skandinaviska Enskilda Banken AB | 562 843 | 1,71 % Nominee account |
| Nordnet Bank AB | 443 587 | 1,34 % Nominee account |
| J.P Morgan Securities PLC, W8IMY/QDD | 381 848 | 1,16 % |
| Avanza Bank AB | 357 313 | 1,08 % Nominee account |
| Vätterleden AB | 350 000 | 1,06 % |
| Ålandsbanken i Ägares Ställe | 323 766 | 0,98 % Nominee account |
| Feat Invest AB* | 319 780 | 0,97 % |
| Dnb Bank ASA, Sec Lending | 300 277 | 0,91 % Nominee account |
| Telecom AS | 255 000 | 0,77 % |
| Prog Seed AS | 241 338 | 0,73 % |
| Prinvest AS | 240 307 | 0,73 % |
| Other shares | 15 572 698 | 47,21 % |
| Sum | 32 982 685 | 100,00 % |
* Vasastaden / Niclas Eriksson owns shares through various companies and is also represented by family members.
** Lars Windfeldt owns shares through various companies and is also represented by family members.
*** André Løvestam, CEO of Zwipe, owns shares through Energetic AS.
**** Zwipe chairman of the board.
***** Johan Biehl is a Zwipe board member and a board member of Feat Invest.
| Management and board holdings | Holding | Stake |
|---|---|---|
| André Løvestam, CEO (through Energetic AS) | 916 000 | 2,78 % |
| Lars Kristian Solheim, CFO | 90 000 | 0,27 % |
| Dr. Robert Müller, CTO | 48 572 | 0,15 % |
| Bishwajit Choudhary, EVP Financial Instritutions and Alliances | 25 500 | 0,08 % |
| Eric Mercer, CEO of Zwipe America, Inc. | 5 500 | 0,02 % |
| Jörgen Lantto (Chair) | 866 666 | 2,63 % |
| Johan Biehl | 212 883 | 0,65 % |
| Dennis Jones | 65 228 | 0,20 % |
| Diderik Schonheyder | 5 302 | 0,02 % |
| Sum | 2 235 651 | 6,78 % |
Note 6 Share based payments
The company has a share-based option programme covering certain employees in senior positions, members of the board and nomination committee members. Each option gives the holder the right to acquire one share from the company at a strike price defined in the individual share option agreement. All options are conditional that the grantee remains employed. All vested options may be exercised in any period prior to the expiry date. The options vest every 6 months from grant date and may be exercised at vesting. As of 30.06.2020, 29 persons were included in the option programme.
The fair value of the options is set on the grant date and expensed over the vesting period. The fair value of options awarded is estimated using the Black-Scholes option pricing model. NOK 2.5 million have been expensed per H1 2021.
| Strike price | Options | Weighted Average remaining contractual life Outstanding Instruments |
Weighted Average Strike Price |
Vested options 30.06.2021 Vested Instruments |
Weighted Average Strike Price |
|---|---|---|---|---|---|
| 6,54 205 000 |
3,00 | 6,54 | 102 498 | 6,54 | |
| 7,85 400 000 |
3,00 | 7,85 | 133 332 | 7,85 | |
| 10,00 485 723 |
1,00 | 10,00 | 478 329 | 10,00 | |
| 16,20 135 000 |
2,00 | 16,20 | 90 000 | 16,20 | |
| 19,75 160 000 |
3,51 | 19,75 | 26 665 | 19,75 | |
| 22,23 55 000 |
3,51 | 22,23 | 18 328 | 22,23 | |
| 25,00 170 000 |
1,00 | 25,00 | 170 000 | 25,00 | |
| 29,33 55 000 |
3,51 | 29,33 | 9 166 | 29,33 | |
| 30,13 251 000 |
4,00 | 30,13 | 0 | 0,00 | |
| 1 916 723 | 1 028 318 |
| Weighted Average Strike |
|||
|---|---|---|---|
| Overview of outstanding options | Options | Price | |
| Outstanding opening balance (01.01.2021) | 1 800 943 | 13,12 | |
| Granted | 312 000 | 29,60 | |
| Exercised | -78 610 | 11,35 | |
| Forfeited | -117 610 | 22,46 | |
| Expired | 0 | 0 | |
| Outstanding closing balance (30.06.2021) | 1 916 723 | 15,30 | |
| Vested closing balance | 1 028 318 | 13,04 |
The calculations are based on the following assumptions:
There is no change in assumptions as used per Annual Report 2020.
Note 7 Subsequent events
Zwipe America Inc. was granted a second bank loan of \$248 000 in Q1 2021 through the Paycheck Protection Program (PPP). The loan was fully forgiven August 2021.
Note 8 Reporting
Upcoming reporting days
Financial Year 2021 Annual Report February 23, 2022. Annual Statement Release February 23, 2022.
This report has not been reviewed by Zwipe's auditors.
The parent company Zwipe AS is a private limited liability company incorporated and existing under the laws of Norway. Zwipe AS has one wholly owned subsidiary, Zwipe America Inc., a corporation incorporated under the laws of the State of Delaware in the United States. The company has no other ownership positions.
Contact Information
Zwipe AS Rådhusgata 23 0151 Oslo, Norge
www.zwipe.com
Zwipe's Certified Adviser is FNCA AB, [email protected], +46 8 528 00399