Zwipe AS — Interim / Quarterly Report 2024

Aug 22, 2024

Zwipe first half report 2024

Zwipe first half report 2024

OSLO, NORWAY - 22 August 2024 - Zwipe AS ("Zwipe" or "the company") today

announces its results for the first half of 2024.

Significant events H1 2024

Focusing on identity and access management, Seriline, a Sweden-based company,

has signed a distribution agreement with Zwipe that pioneers next generation

biometric cards for physical & logical access control and identification

solutions.

Plasticard - ZFT, one of the leading manufacturers for plastic cards, smart

cards and ID media has partnered with Zwipe to distribute biometric access cards

for Zwipe in Germany, Austria and Switzerland.

Ermes srl, one of the leaders in providing solutions for the identification and

security of people, has signed a distribution agreement with Zwipe, a pioneer

and world leader in the development of biometric technology on cards for

identification and access control.

Zwipe announced the appointment of PCB & Security Europe S.L., headquartered in

Barcelona, Spain, as its official distributor for Spain and Portugal. This

strategic partnership expands Zwipe's reach across Europe and positions the

company to capitalize on the growing demand for secure and convenient biometric

access solutions in the Iberian Peninsula.

Zwipe has teamed up with SCAP, the leading distributor of access control cards

and readers in France, focusing on providing advanced security RFID solutions,

to introduce the innovative "biometric system-on-card" to SCAP's customers.

Tadera and Zwipe announce that the Zwipe Access Biometric Smart Card System has

completed operational test and evaluation by National Safe Skies Alliance, Inc.

(Safe Skies) at Richmond International Airport (RIC). The report concludes that

the Zwipe access card is a highly secure and user-friendly solution that meets

the needs of the airport.

In January, Zwipe announced a company restructuring and new strategic direction,

increasing its focus on Zwipe Access and accelerating the commercialization of

its biometric authentication technology in the access control market. As a

result of the change in strategic focus, the company has initiated a

restructuring process that is expected to reduce operational costs, particularly

related to Zwipe Pay.

Significant events after the period

ZKTeco, a globally recognized leader in access control solutions, is proud to

announce a partnership with Zwipe, a leader in biometric technology for cards

used in identification, access control, and payment. Together, they aim to

deliver cutting-edge, high-security access solutions in Europe.

Zwipe the market leader in Biometric Smart Card technology for biometric access

card technology, has entered into a strategic partnership with ABC Security

Access Systems, a prominent integrator specializing in physical security

solutions. This collaboration aims to introduce Zwipe's state-of-theart

biometric smart card technology solutions to customers across the Canadian

marketplace, focusing on key sectors such as retail, government, commercial and

institutional.

Zwipe, the global leader in biometric payment and access cards, and AXYS, a

specialist in integrating access control, video surveillance, intrusion

detection, and other security technology solutions announce a strategic

partnership. This collaboration aims to deliver the groundbreaking "biometric

smartcard" technology solution to AXYS's global customer base.

Message from the CEO

During the first half of the year, we have, alongside the execution of the

restructuring program, focused on implementing the new strategy focusing on the

access control market. We intensified our efforts to establish and develop

strategic partnerships in our targeted regions that enhance our reach and

credibility within the industry with good traction and response. Collaborations

and the establishment of go-to-market partnerships with key players in the

security and technology sectors are increasing both our market presence and

growth potential and we have expanded our network of distributors and resellers,

as well as system integrators and installation companies in all geographies.

In France, during the first quarter, we signed a distribution agreement with

SCAP, a major distributor giving us access to many local system integrators and

installers, and a large pool of potential French end user enterprises.

During the second quarter we have started to see our intense work paying off as

we have been able to sign additional collaborations with, among others,

Seriline, Plasticard and Ermes. Lately we also communicated agreements with

AXYS, ABC Security Access Systems, ZKTeco Europe. Many of these partners operate

and have strong foothold in multiple countries and regions giving us an even

wider reach.

Today we have more than 60 distributors and system integration partners

throughout North America and European counties we have selected to focus on. It

also means we have continued to increase the number of distributed starter

packs/ demo kits during the second quarter of the year, so our partners can

approach an increased number of end user enterprises.

As we have stated before, we are primarily targeting three verticals. For the

Airport, Power Plants and Data Centers we have developed specific value

propositions that we are getting good response and traction on. The fourth area

we are approaching is more generic in terms of government agencies, major tech

companies and multinational enterprises in various sectors and verticals.

Three of our partners in North America are specialized in providing security

solutions to data centers. This has so far resulted in that we are engaged in a

tender process with a leading internet search company and that we have commenced

testing for a top social network and software company. Biometric access cards

and our solution have also been adopted by architects and solution providers in

future tenders when building new data centers.

On the power plant vertical we have passed product tests and are under

evaluation by a major nuclear plant in North America. We also under evaluation

by a major energy company in the USA.

Unfortunately, the airport vertical has not yet shown the development we had

expected given the positive outcome of the report by National Safe Skies

Alliance, Inc. We have two major partners in this vertical that are currently in

dialogue with more than 10 airports in the USA. It is our assessment that more

time is needed as decision processes in these potential deals take longer time

than expected.

In total we together with our partners now have around 55 ongoing unique end

user enterprise engagements. Not to say that every enterprise will ever

implement biometric access cards for all their employees, but our current 55

engagements have an average of +40.000 employees per engagement, so the

potential is huge.

We are obviously disappointed that we and our partners have not been able to

enter into material commercial deployments and generate revenue during the first

half of this year. At the same time, we are very pleased with the development in

building our partner network in the first half year and the response we are

getting from our engagements. That said, we are convinced that the work we have

been doing will pay off in the near future.

Financial review

Profit and loss Zwipe reported total revenues of NOK 0.6 million during the

first half of 2024, lower than the NOK 1.7 million reported in the first half of

2023. Net sales equalled NOK 0.1 million during the first half of 2024, and

consisted to 100 percent of Zwipe access, compared to NOK 0.05 million during

the first half of 2023.

Total operating expenses totaled NOK 29.4 million in the first half of 2024,

down NOK 28.1 million compared to the first half of 2023. Personnel expenses

were down to NOK 13.6 million compared to NOK 28.3 million in the first half of

2023, as headcount has decreased in line with the restructuring plans presented

in June 2023 as well as in January 2024. Other operating expenses of NOK 14.6

million in the first half of 2024 were also significantly lower when compared to

NOK 26.9 million in the first half of 2023, driven mainly by lower development,

certification, marketing and travel costs. Depreciation, amortization and

impairment amounted to NOK 0.7 million in the first half of 2024 versus NOK 1.0

million during the first half of 2023.

The above resulted in net income for the first half of 2024 of NOK -30.0

million, substantially better than NOK -56.1 million reported in the first half

of 2023.

Cash flow During the first half of 2024, cash flow from operations and

investments, before financing and facilitation, was NOK -40.9 million from NOK

-59.3 million in the first half of 2023, an improvement with NOK 18.4 million.

Cashflow from financing activities equalled NOK 24.1 million and represents the

remaining cash outstanding from the fundraising in the fourth quarter of 2023.

Total net cash flow for the first half of 2024, including cash flow from

financing and investing activities, was NOK -17.0 million compared to NOK 25.4

million in the first half of 2023, as Zwipe completed a rights issue raising NOK

100.1 million in gross proceeds in the first half of 2023. Investments,

liquidity, and financial position On 30 June 2024, cash and cash equivalents

were NOK 25.2 million, compared to NOK 76.0 million on 30 June 2023.

As of 30 June 2024, production equipment, machinery, and fixtures were valued at

NOK 3.7 million, and made up all long-term assets. Including cash of NOK 25.2

million, inventories of NOK 23.5 million, and receivables of NOK 1.2 million,

current assets stood at NOK 49.9 million giving total assets of NOK 53.7

million.

Total equity as of 30 June 2024 amounted to NOK 30.7 million. Liabilities

totaled NOK 22.9 million, comprising solely short-term liabilities.

Consequently, the equity ratio stood at 57%.

This disclosure contains information that Zwipe AS is obliged to make public

pursuant to the Swedish Securities Markets Act (2007:528). The information was

submitted for publication, through the agency of the contact person, on 22-08

-2024 08:00 CET.

Hugo Petit

Interim CFO and Head of IR

ir@zwipe.com

About Zwipe

Zwipe is a technology solution provider that enables battery-less, ultra-low

-power, self-contained biometric authentication solutions. Together with an

ecosystem of partners including global brands within security, financial

services and ID applications, Zwipe is "Making Convenience SecureT". Using

advanced fingerprint recognition while protecting personal information, Zwipe's

solutions address the data theft pitfalls inherent in traditional authentication

methods. Headquartered in Oslo, Norway, Zwipe has spent the last 10 years

developing its unique power harvesting technology platform in combination with

security solutions based on international infrastructure standards.

To learn more, visit www.zwipe.com