Interim report
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Quarterly Report First quarter 2025
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INTERIM REPORT FIRST QUARTER 2025 IDEX BIOMETRICS ASA Recent highlights • On 11 March 2025 IDEX Biometrics announced a new strategy with a fundamental shift in how the company would take its unique technology and products to market • New CEO appointed – Anders Storbråten • Securing a new debt facility of NOK 30 million, converted to shares • Heights convertible bond renegotiated and amended o Outstanding principal reduced from approx NOK 66.4 million to approx NOK 50.0 million o Potential additional reduction to approx NOK 33.3 million subject to next equity issuance o Conversion price set at NOK 0.065, with ordinary adjustment mechanisms o Amortisation starting from June 2026 • Range of operational improvement initiatives under way – target quarterly run rate OPEX from end Q3 2025 in the range of $1.5-1.7 million. • Production order in Japan from the manufacturing partner Beautiful Card Corporation (BCC). The order has a value of approx. USD 50,000 • Order received from DigAware to deliver biometric sensor solution for access cards with sensor systems from IDEX • IDEX Biometrics receives IDEX Pay order for VISA biometric cards in the Middle East & Africa region of 10,000 units • KONA I granted Mastercard Letter of Approval for IDEX Pay biometric cards • Completed debt conversion, launching subsequent offering allowing investors to participate at the same terms as shareholders participating in the debt conversion Financial results Q1 2025 • Revenues of $0.1 million in the quarter. • Ordinary operating expenses amount ing to $2.4 million. • Net loss was $4.1 million. • Cash balance per 31 March 2025 at $1.1 million
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INTERIM REPORT FIRST QUARTER 2025 Strategy and business model The IDEX Biometrics’ (“IDEX”, “company”) fingerprint authentication technology leverages the unique biological markers of a person’s fingerprint to confirm their identity through a seamless ‘handshake procedure’ with payment terminals, access readers or mobile phones. By eliminating the need for passwords and pins, our solution provides a more convenient and secure way to verify identity. IDEX offers comprehensive biometric platform solutions, with proprietary software and card operating capabilities. This enables us to support additional market verticals, expand our target markets, and create new growth opportunities. The IDEX Biometrics fingerprint authentication solutions are certified by Mastercard and Visa. IDEX’ solutions leverages a JavaCard card operating system and Java-based “applets,” complying with the standards of GlobalPlatform, an independent standards body for secure channel communications and use of cryptographic data. IDEX address evolving customer and end-user requirements by leveraging continuous advances in secure technologies, innovative design, and high-performance capabilities. Since its founding, the company has focused on research and development to drive growth. The core competencies of IDEX Biometrics are characterized by deep domain expertise and a multi-disciplined, systems engineering approach, and build on organizational strengths in the following domains: biometric imaging and processing, sensor architectures, integrated circuit design, materials, manufacturing, and packaging, algorithm, firmware, and software development, encryption technologies, NFC and power management and industrial design. The company recently conducted a strategic review, resulting in an updated strategy and business plan. As a result, IDEX is focusing on accelerating new initiatives within Access, accelerating the time to profitability, and optimizing the cost structure. IDEX Biometrics continues to support its partners and is anticipating that some of our long- standing efforts in building up the IDEX Pay market materialize. IDEX product solutions The IDEX biometric software platforms, IDEX Pay and IDEX Access, are built on the same biometric platform, serving two different markets. The solutions can be layered with different applets to provide new functions and capabilities supporting payment, crypto wallets, and other digital authentication solutions, such as digital and physical access. The OS developed by IDEX allows our customers to provide their own customized applet for application specific functions. IDEX has launched both its IDEX Pay and IDEX Access solutions to the market and is currently preparing for further scaling of biometric payment and access cards with several partners. Principal markets IDEX has identified three main verticals with an accelerating need for biometric identity solutions: banking and payment, enterprise security and public services. IDEX leverages its biometrics technology platform to offer decentralized authentication solutions across payments and access control. As the market matures and technology evolves, IDEX expects the solution for different use cases to converge. The IDEX Biometrics technology can already be seen in solutions that combine physical and digital access. The ability to attach attributes related to ID and health records are
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INTERIM REPORT FIRST QUARTER 2025 emerging. Fiat and digital currencies could co-exist on the same card, and there are many other examples. Customers and business go-to-market model Customers of IDEX Biometrics are manufacturers of payment cards, access cards, and other products using fingerprint sensors as the key to prove identity. The Company’s customers are part of a large ecosystem with a multiparty supply chain to reach the final customer. Payments and access are separate ecosystems albeit with similarities in the cards’ appearance and components. The IDEX Biometrics engagement strategy is to enable the ecosystems and enter into business relationships and implement go-to-market models tailored to the respective value chains. The IDEX go-to-market strategy is scalable with a nimble structure effectively serving the global market. IDEX Biometrics sells its products and solutions directly to manufacturers or enterprises and in some cases through distributors and resellers. Customers of IDEX Biometrics are smart card manufacturers and system integrators of the Company’s hardware and software biometric technologies. Supply chain IDEX operates with an asset light, fabless business model, leveraging external manufacturing partners to produce, assemble and test products. The majority of our card manufacturing partners are present in both payment and access. While the pace of market adoption has been challenging, we are confident that our strong foundation, strategic focus and accelerating of the access business line will enable us to capitalize on the opportunities that lie ahead. The fingerprint biometric card solution as an efficient and secure way to perform Multifactor Authentication is driving growth in the years to come, with our strong IDEX portfolio of solutions, global footprint of manufacturers, and development partners positioning us for scale and growth. About IDEX Biometrics IDEX Biometrics is a global technology leader in biometric authentication solutions for smart cards, offering secure and convenient solutions for payments, access control, and digital identity. Through our patented and proprietary sensor technologies, integrated circuit designs, and software we make our biometric solutions unique and innovative, delivering secure, fast and seamless user experiences to customers worldwide. IDEX Biometrics partners with leading card manufacturers, technology companies and payment networks, bringing solutions to the market. The IDEX Biometrics flexible technology platform supports a wide range of applications and use cases. Together with our partners, we provide end-to-end solutions to banks and other organizations seeking to launch their own biometric cards for payment or to support other authentication needs.
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INTERIM REPORT FIRST QUARTER 2025 FINANCIAL REVIEW Statements of profit and loss • Revenue amounted to $0.1 million in the first quarter of 2025 , compared to $0.4 million in the first quarter of 2024. Following the lack of revenues -generating agreements in the fourth quarter of 2024, the Company announced on March 11, 2025 a new strategic shift in its business strategy. • Operating expenses excluding Cost of materials and Depreciation were $3.0 million in the first quarter of 2025 , compared to $5.7 million in the first quarter of 2024 . • The cost of materials in the quarter was $86k. The gross margin on products sold in the first quarter of 2025 was 27.5%. Due to supplementary shipments for revenue accounted in earlier periods, the gross margin was negative in the quarter. • At the end of the first quarter of 2025 the Company had 40 full -time equivalents, same as in the previous quarter. • Net Loss in the first quarter of 2025 was $4.1 million. The result includes net financial gain amounting to $3.2 million caused by value change of warrants and embedded derivative related to the convertible debt, as well as a financial loss amounting to $4.0 million caused by amended terms of the convertible loan on March 11, 2025. Adjusted for these items, the net loss would have been $3.4 million. Statements of Financial Position The largest assets held on the company’s balance sheet as of March 31, 2025, were inventory of $5.5 million and cash of $1.1 million, representing 60% and 12% of assets, respectively. Total intangible assets, acquired intellectual property, amounted to $0.5 million. The current product portfolio has been created from development work conducted in more recent years. The company holds fixed assets amounting to $0.4 million. Customer accounts receivable amounted to $0.1 million as of March 31, 2025, compared to $1.4 million as of 31 March, 2024 and $30 thousand as of December 31, 2024. The amounts are net of reserves for bad debt. IDEX continues to pursue any recoverable value. The receivable was written down in the fourth quarter of 2024. The accrual for loss on receivables amounted to $0.6 million. Total long-term liabilities amounted to $4.0 million as of March 31, 2025, compared to $1.1 million as of March 31, 2024 and $2.1 million as of December 31, 2024. Long-term liabilities consist of the convertible bond and embedded derivatives. The terms of the Convertible bond were amended on March 10, 2025, resulting in a net loss of $4.0 million, offset by value change gain in the period. Further details, see note 14. Total short-term liabilities amounted to $5.0 million as of March 31, 2025 compared to 10.0 million as of March 31, 2024, and $3.5 million as of December 31, 2024. The change in the first quarter of 2025 is mainly due to the amended terms of the convertible debt. See note 14. Net working capital (i.e., current assets, excluding cash, less short-term liabilities, excluding convertible loan) amounted to $2.2 million as of March 31, 2025, compared to $6.6 million as of March 31, 2024 and $5.9 million as of December 31, 2024 The decrease in net working capital in
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INTERIM REPORT FIRST QUARTER 2025 the first quarter of 2025 is mainly caused by increase of other current liabilities as a result from the first installment of the loan financing disclosed on March 11, 2025. Equity amounted to $0.1 million as of March 31, 2025, compared to $6.3 million as of March 31, 2024 and $4.7 million as of December 31, 2024. The reduction is caused by the net loss in the first quarter of 2025 amounting to $4.4 million. Cash flow and liquidity The company incurred an operating cash outflow of $2.7 million in the first quarter of 2025, compared to an operating cash outflow of $6.9 million in the first quarter of 2024. The primary operating cash items are the operating losses in each period, adjusted for non-cash expenses and gains such as share-based compensation, depreciation and amortization and changes in financial liabilities. The reduction in operating cash outflow is mainly due to lower operating expenses and favorable working capital movement. The company has outsourced the manufacturing activities and as such the company has minimal capital expenditures. There were no significant capital expenditures in the first quarter of 2025. Total cash flow from financing activities amounted to a net inflow of $1.8 million in the first quarter of 2025. The primary activity was cash received in the first installment of the loan on NOK 30 million. The extraordinary general meeting on April 11, 2025 approved the debt conversion of the loan at a subscription price of NOK 0.01 per share. A subsequent offering was approved and may raise up to NOK 6 million. A prospectus will be published prior to the commencement of the subscription period. The cash balance amounted to $1.1 million as of March 2024, compared to $3.0 million as of March 2024 and $2.0 million as of December 31, 2024. The company’s balance sheet solvency, defined as the value of cash plus accounts receivable, less short-term liabilities, was negative $2.9 million as of March 2025 compared to negative 4.6 million as of March 2024 and negative $0.5 million as of December 31, 2024. Going concern The Company’s liquidity is constrained and as of March 31, 2025, more than half of IDEX’s share capital was lost. The net equity amounted to only $144 thousand, and the balance sheet solvency was negative. In the short term, IDEX Biometrics is dependent on the successful implementation of Company’s strategy. The long-term future viability depends on the Company’s ability to generate cash from op- erating activities and to raise additional capital to finance its operations. IDEX Biometrics’ existing cash and the funding described above is not sufficient to fund its operating expenses and capital expenditures requirements for the next twelve months. In the short term, the planned subsequent offering is expected to add NOK 6 million ($0.6 million) in June, and the Company will need to obtain additional funding or revenues within the third quarter of 2025. While the Company has been successful in the past in raising funds through private placements of shares and issuance of convertible debt, there is no assurance that IDEX Biometrics will be suc- cessful in raising capital in the future. The Company’s failure to raise capital as and when needed
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INTERIM REPORT FIRST QUARTER 2025 would have a negative impact on its financial condition and its ability to pursue its business strate- gies. These factors cast significant doubt on the Company's ability to continue as a going concern. As an ongoing activity, the Company monitors liquidity and the Board is prepared to take appropri- ate measures if and when required. IDEX Biometrics has been successful in the past with imple- menting cost reductions and raising capital through private placements of equity. Reflecting the re- cent funding described above and acknowledging the significant doubt identified above, the Board has on balance concluded that the conditions for the going concern assumption are met. . May 20, 2025 The Board of Directors of IDEX Biometrics ASA
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INTERIM REPORT FIRST QUARTER 2025 CONSOLIDATED INTERIM FINANCIAL INFORMATION (UNAUDITED) CONSOLIDATED STATEMENTS OF PROFIT AND LOSS Quarters Full year Amounts in USD 000s Note Q1 2025 Q1 2024 2024 Operating revenue Product revenue 4 80 372 700 Service and other revenue 4 24 - 141 Total revenue 104 372 841 Operating expenses Cost of materials, net of inventory change 86 237 1,684 Compensation and benefits 5 889 3,149 8,797 Research and development 6 545 596 2,457 Other operating expenses 7 1,560 1,970 7,289 Amortization, depreciation and impairment 8 138 382 2,517 Total operating expenses 3,218 6,334 22,745 Loss from operations (3,114) (5,962) (21,903) Finance income 9 3,357 1,306 7,904 Gain (loss) on modification of financial liabilities, net 9 (3,969) - 1,841 Finance cost 9 416 763 2,411 Profit (loss) before tax (4,142) (5,420) (14,569) Income tax benefit (expense) 10 (2) - 120 Net loss for the period (4,144) (5,420) (14,449) Profit (loss) per share, basic and diluted 11 (0.00) (0.01) (0.02) CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Quarters Full year Amounts in USD 000s Q1 2025 Q1 2024 2024 Net loss for the period (4,144) (5,420) (14,449) Foreign currency translation adjustment (209) 68 108 Total comprehensive income (loss) for the pe- riod, net of tax (4,353) (5,352) (14,341)
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INTERIM REPORT FIRST QUARTER 2025 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Amounts in USD 000s Note March 31, 2025 March 31, 2024 December 31, 2024 Assets Non-current assets Goodwill - 968 - Intangible assets 545 891 569 Total intangible assets 545 1,859 569 Property, plant and equipment 99 716 122 Right-of-use assets 213 1,620 293 Non-current receivables 59 80 57 Total non-current assets 8 916 4,275 1,043 Current assets Prepaid expenses 593 1,251 764 Inventory 13 5,512 6,428 5,548 Accounts receivable, trade 101 1,374 30 Accounts receivable, other 6 965 981 901 Cash and cash equivalents 1,060 3,040 2,011 Total current assets 8,231 13,075 9,255 Total assets 9,147 17,350 10,297 Equity and liabilities Equity Share capital 12,942 10,119 12,942 Share premium 1,690 2,118 1,735 Share-based payment reserve 25,038 25,119 25,210 Foreign currency translation effects (12,168) (12,000) (11,959) Capital reduction reserves 321,264 316,341 321,264 Accumulated loss (348,622) (335,449) (344,478) Total equity 12 144 6,247 4,713 Non-current liabilities Non-current non-interest-bearing loans 14 1,812 - 1,983 Other non-current financial liabilities 14 2,194 - 139 Non-current lease liabilities - 1,115 - Total non-current liabilities 4,006 1,115 2,123 Current liabilities Accounts payable 941 740 850 Current lease liabilities 315 594 396 Public duties payable 212 237 269 Interest-bearing loans - 3,929 - Other current financial liabilities 14 1,909 2,627 652 Other current liabilities 1,620 1,861 1,294 Total current liabilities 4,997 9,988 3,461 Total liabilities 9,003 11,103 5,584 Total equity and liabilities 9,147 17,350 10,297
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INTERIM REPORT FIRST QUARTER 2025 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Amounts in USD 000s Note Share capital Share premium Share based payment Foreign currency translation effects Capital reduction reserve Accumu- lated loss Total equity Balance at January 1, 2025 12,942 1,735 25,210 (11,959) 321,264 (344,478) 4,713 Share capital reduction 5,7,12 - - - - - - - Share issuance 12 - (45) (172) - - - (217) Convertible bond settlement in shares - - - - - - - Share-based compensation 5,7,12 - - - - - - - Loss for the period - - - - - (4,144) (4,144) Transfer of share premium - - - - - - - Other comprehensive income - - - (208) - - (208) Balance at March 31, 2025 12,942 1,690 25,038 (12,168) 321,264 (348,622) 144 Balance at January 1, 2024 25,955 2,118 24,858 (12,068) 300,500 (330,030) 11,334 Share capital reduction (15,841) - - - 15,841 - - Share issuance 12 - - - - - - - Convertible bond settlement in shares - Share-based compensation 5,7,12 5 - 260 - - - 265 Loss for the period - - - - - (5,420) (5,420) Transfer of share premium - - - - - - - Other comprehensive income - - - 68 - - 68 Balance at March 31, 2024 10,119 2,118 25,119 (12,000) 316,341 (335,449) 6,247 Balance at January 1, 2024 25,955 2,118 24,858 (12,068) 300,500 (330,030) 11,334 Share capital reduction (20,764) - - - 20,764 - - Share issuance 12 7,616 (774) - - - - 6,842 Convertible bond settlement in shares 130 391 - - - - 521 Share-based compensation 5,7,12 5 - 351 - - - 356 Loss for the period - - - - - (14,449) (14,449) Transfer of share premium - - - - - - - Other comprehensive income - - - 108 - - 108 Balance at December 31, 2024 12,942 1,735 25,210 (11,959) 321,264 (344,478) 4,713
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INTERIM REPORT FIRST QUARTER 2025 CONSOLIDATED STATEMENTS OF CASH FLOWS Quarters Full year Amounts in USD 000s Note Q1 2025 Q1 2024 2024 Operating activities Profit (loss) before tax (4,142) (5,420) (14,569) Adjustments to reconcile profit before tax to net cash flows: Amortization, depreciation and impairment expense 8 138 382 2,517 Share-based compensation expense 5 (172) 260 351 (Gain) loss on modification of financial liabilities, net 3,969 - (1,841) Value change convertible loan and warrants (3,273) (918) (6,837) Other financial items 281 332 (280) Other operating cash flows: (Increase) decrease in inventories 37 (44) 836 (Increase) decrease in accounts receivables (70) (306) 1,038 Increase (decrease) in accounts payable 5 51 165 (Increase) decrease in other working capital items 516 (1,109) 1,468 Interest paid 9 (5) (99) (254) Change in income taxes (2) - (129) Net cash flow used in operating activities (2,718) (6,869) (17,534) Investing activities (Purchases) sales of property, plant and equipment 8 - (15) 114 Change in non-current receivables - - 23 Interest received 9 7 61 136 Net cash flow used in investing activities 7 46 272 Financing activities Net proceeds from issuance of shares (45) 5 11,176 Proceeds from borrowings 14 1,894 - - Repayments of borrowings 14 - (1,338) (2,657) Paid, not registered capital - 26 - Payments on lease liabilities 8 (93) (175) (596) Change in non-current payables - - - Net cash flow from financing activities 1,756 (1,482) 7,923 Net change in cash and cash equivalents (954) (8,305) (9,339) Effect of foreign exchange rate changes 4 (6) (2) Opening cash and cash equivalents balance 2,010 11,352 11,352 Cash and cash equivalents at period end 1,060 3,040 2,011
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INTERIM REPORT FIRST QUARTER 2025 NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS 1 The Company and its business IDEX Biometrics specializes in the design, development, and sale of fingerprint authentication solutions. The Company’s fingerprint authentication solutions are used primarily in contactless smart cards, including financial payment cards, access control cards, and card-based devices for the storage of digital currencies. The Company is a public limited liability company incorporated and domiciled in Norway. The address of the head office is Dronning Eufemias gate 16 at NO-0191 Oslo, Norway. There is one class of shares, and all shares have equal rights. The Company’s shares are listed on Euronext Oslo Børs, the stock exchange in Oslo, Norway, under the ticker IDEX. The technical development and supply chain activities are performed at the subsidiary in the United Kingdom. The subsidiaries in the United States and China are inactive. 2 Basis of preparation and accounting policies These Consolidated interim financial statements for the quarter ended March 31, 2025, have been prepared in accordance with IAS 34 Interim Financial Reporting and have not been subject to audit. The interim financial statements should be read in conjunction with the audited annual financial statements for the year ended December 31, 2024, which were prepared in accordance with IFRS Accounting Standards as adopted by the EU. The accounting policies applied herein are consistent with those applied in the prep aration of the annual financial statements for the year ended December 31, 2024. Amounts presented may not sum accurately due to rounding. IDEX Biometrics operates in one operating segment, fingerprint imaging and recognition technology. The going concern assumption has been applied in the preparation of this interim report. The net equity amounted to $144 thousand, less than half of the share capital, and the balance sheet solvency, defined as cash plus current receivables less current liabilities, excluding warrants and the March loans (see below) was negative $962 thousand on March 31, 2025. The existing cash does not fund the Company’s operating expenses and capital expenditures requirements for the next twelve months. On March 11, 2025, the company disclosed that following a strategic review, concluding that the company shall concentrate its technical and commercial efforts on serving the access market, where IDEX is believed to possess competitive advantage. IDEX Biometrics will seek to also harvest from its long-time efforts in the payment market. On the same date, the company disclosed that it would borrow NOK 30 million ($2.8 million) from certain shareholders, which loans were convertible to shares at NOK 0.01 per share (“the March loans”). See note 15-Events after the balance sheet date. A subsequent offering of shares at the same price to the other existing shareholders, raising up to NOK 6 million ($0.6 million) will be conducted in the second quarter of 2025. Thirdly, the Company disclosed that it had entered into a commitment letter and term sheet for an amendment agreement with the holder of the Company’s convertible bonds issued in 2023 (“the 2023 debt”) whereby, inter alia, (i) the principal amount will be reduced by 25%, and, (ii) subject to the company obtaining additional equity on market terms by December 31, 2025, the principal amount would be reduced by a further 25%. The long-term future viability depends on the Company’s ability to generate cash from operating activities and to raise additional capital to finance its operations. While the Company has been successful in the past in raising funds through private placements of shares and issuance of convertible debt, there is no
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INTERIM REPORT FIRST QUARTER 2025 assurance that IDEX Biometrics will be successful in raising capital the future. This casts significant doubt on the Company's ability to continue as a going concern. As an ongoing activity, the Company monitors liquidity and the Board is prepared to take appropri- ate measures if and when required. IDEX Biometrics has been successful in the past with imple- menting cost reductions and raising capital through private placements of equity. Reflecting the re- cent funding described above and acknowledging the significant doubt identified above, the Board has on balance concluded that the conditions for the going concern assumption are met. 3 Risks It is the duty of the Board of Directors to present the principal risks facing the Company in the conduct of its business. The Company’s major risk is its business risk, broadly meaning risks to its ability to generate revenue and earn profit. Future revenue generation will depend, among other such risks, on the Company’s ability to market and profitably deliver products on a sustained basis, its ability to raise sufficient capital to pursue its business strategies, its ability to legally protect its intellectual property rights, its ability to scale its operations to maximize efficiencies, and its ability to retain current employees and to attract new employees. The ability to generate future revenue is also highly dependent on the pace of development of the market for biometric payment and access cards, which remains in an early stage. See note 2-Basis of preparation and accounting policies regarding the going concern risk. The Company's assets primarily consist of cash, working capital, and intangible assets. The Company maintains liquidity by investing available funds in readily accessible, floating-interest rate bank accounts. The Company’s exposure to currency exchange rate changes is managed by maintaining an appropriate mix of cash deposits in the various currencies it utilizes for its operations. The Company does not engage in any active hedging strategies. The US dollar is the dominant currency of the Company’s receivables and payables. The accounts receivable are subject to credit risk. The credit risk is not insured. Receivables are held at the original value less specific reserves for possible losses. Following a decision by Zwipe AS on to file for bankruptcy on February 17, 2025, a significant credit loss was accrued for as of December 31, 2024. The inventory is valued at the lower of cost or net realizable value, reflecting reserves based on aging and obsolescence until physical disposal. The items held in inventory are substantially designed by and bespoke to IDEX. While storage is considered safe and shelf life is practically unlimited, the amount of inventory is substantially higher than short term requirements from customers. This causes a risk of technical or market obsolescence before the quantity at hand has been sold. As of March 31, 2025, the Company’s convertible 2023 debt was recognized at $4.0 million, as presented in note 14-Financial instruments. The original loan amount was NOK 100 million, and the loan is denominated in NOK. The loan agreement was last amended as of March 11, 2025. Following the amendment, the convertible debt is interest free, and the term payments will be semi-annual starting from June 28, 2026. As of March 31, 2025, the nominal debt outstanding amounted to NOK 50.0 million or $4.7 million. The debt represents a NOK/USD currency exchange rate risk, and a cash flow risk. The currency risk is not hedged. The Company may elect to make any and all term payments in shares versus cash, reducing the liquidity risk. The conversion option of the convertible 2023 debt is accounted for as an embedded derivative recognized separately from the host contract as a financial liability at fair value through profit or loss. The derivative liability will eventually amount to nil after the final term payment on the loan. The change in fair value of the derivative, which is a non-cash liability, is recognized as financial income or cost. The fair value is measured at each balance sheet date, and the value of the derivative, as estimated by option calculation, will increase or decrease with share price, share volatility and risk-free interest rate, as well as the NOK/USD exchange rate.
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INTERIM REPORT FIRST QUARTER 2025 Consequently, the non-cash financial effect may vary considerably between periods. This risk has not been hedged. The option value of the March loans was not recognized as a liability because conversion was subject to approval by the extraordinary general meeting on April 11, 2025. The currency risk related to the March loans was eliminated upon conversion to shares on the same date. The May warrants and the warrants A and B described in note 12, expiring on March 13, April 11 and late May respectively, constitute financial liabilities, recognized at fair value through profit or loss. The liability will eventually amount to nil after the exercise or expiry of the respective warrants. The change in fair value of the warrants, which are non-cash liabilities, is recognized as financial income or cost. The fair value is measured at each balance sheet date. The May warrants are valued by option calculation, while warrants A and B are valued at the observed price at Euronext Oslo Børs. Consequently, the non-cash financial effect may vary considerably between periods. This risk has not been hedged. 4 Revenue from contracts with customers Product-related revenue is recognized upon shipment, primarily on ex-works basis. Service revenue is recognized on customer acceptance of delivery. There were no contract asset or contract liability balances on March 31, 2025, or December 31, 2024. IDEX Biometrics categorizes customers by geographic region by the addresses to which IDEX Biometrics invoices its products or services. The Company’s products and service revenue by geographic region is as follows: Quarters Full year Amounts in USD 1,000 Q1 2025 Q1 2024 2024 EMEA 10 93 106 Americas - 117 248 Asia-Pacific 70 162 347 Product revenue 80 372 701 EMEA - - - Americas 24 - 72 Asia-Pacific - - 69 Service and other revenue 24 - 140 Total revenue 104 372 841 5 Compensation and benefits Quarters Full year Amounts in USD 1,000 Q1 2025 Q1 2024 2024 Salary, payroll tax, benefits, other 1,061 2,889 8,464 Capitalized cost of development work Payable payroll tax on realized share-based benefit Share-based compensation (172) 260 333 Net employer’s tax on subscr.rights Compensation and benefits 889 3,149 8,797
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INTERIM REPORT FIRST QUARTER 2025 Compensation and benefit expenses consist of costs for direct employees of the Company. The cost of individual contractors is reported as Research and development expenses or Other operating expenses, as applicable. The table below sets forth the number of employees and individual contractors by their function measured in full-time equivalents (FTE). Certain individuals are contractors because they work in countries in which the Company does not have a business presence. March 31, 2025 March 31, 2024 December 31, 2024 Full-time equivalents (FTEs) by function Employees Contractors Employees Contractors Employees Contractors Research and development 15 5 48 5 16 4 Marketing and sales 4 7 3 11 3 4 General and administrative 4 5 2 5 1 Supply chain and distribution 4 1 7 - 6 - Total 27 13 63 18 30 9 6 Research and development expenses Research costs are expensed when incurred. Development costs are expensed unless they qualify for capitalization. The Company’s patents and other intellectual property rights created are capitalized and recorded on the Statement of financial position only if they satisfy the criteria for capitalization. The Company has not capitalized development costs in any of the periods presented. Development costs related to the creation of intellectual property have been expensed when incurred. Quarters Full year Amounts in USD 1,000 Q1 2025 Q1 2024 2024 Gross R&D expenses 545 596 2,873 Government grants credited to cost - - (416) Net R&D expenses 545 596 2,457 Government support is recognized when it is probable the Company will qualify and receive support, and the amount can be measured reliably. Norwegian SkatteFUNN grants are recorded in the fourth quarter and the UK SME R&D tax relief is normally recorded at year end. 7 Related party transactions Chair of the board, formerly board member, Morten Opstad, is a partner in the law firm Ræder Bing advokatfirma AS. Ræder Bing has provided legal services to the Company resulting in charges of $54 thousand during the first quarter of 2025. Mr. Opstad’s work for the Company beyond his board duties is invoiced by Ræder Bing.
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INTERIM REPORT FIRST QUARTER 2025 8 Non-current assets Amounts in USD 1,000 Goodwill Intangible assets Property, plant and equipment Right-of- use assets Non-cur- rent receiv- ables Total non- current as- sets Balance at January 1, 2025 - 569 123 293 57 1,043 Additions - - - - - - Settlements - - - - - - Depreciation, amortization and impairment - (24) (27) (87) - (138) Effects of changes in foreign currency - - 2 7 2 11 Balance at March 31, 2025 - 545 99 213 59 916 Balance at January 1, 2024 968 1,011 812 1,779 81 4,651 Additions - - 15 - - 15 Settlements - - - - - - Depreciation and amortization - (119) (109) (154) - (382) Effects of changes in foreign currency - - (2) (5) (1) (8) Balance at March 31, 2024 968 891 716 1,620 80 4,275 Balance at January 1, 2024 968 1,011 812 1,779 81 4,651 Additions - - - - - - Settlements - - - - (23) (23) Depreciation and amortization (968) (441) (572) (535) - (2,517) Depreciation on disposed and retired assets - - (114) (948) - (1,062) Effects of changes in foreign currency - (0) (3) (3) - (6) Balance at December 31, 2024 - 569 123 293 57 1,043 The annual impairment test of goodwill at the end of 2024 concluded that the goodwill was impaired. Acquired intangible assets and intellectual property rights have been capitalized at the time of acquisition. These assets are depreciated over their respective economic lives. The major items depreciate over 9.5 years and 17 years from acquisition, through July 2024, and to the end of 2030, respectively. Internal development costs have not been capitalized. Tangible fixed assets are comprised of scientific and test equipment, engineering tools, leasehold improvements, office equipment, and furniture with useful lives of three to seven years. In connection with the closing of the activities in IDEX America and IDEX China in 2024, lease agreements were terminated which led to reduced right of use assets.
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INTERIM REPORT FIRST QUARTER 2025 9 Financial items Quarters Full year Amounts in USD 1,000 Q1 2025 Q1 2024 2024 Interest income 7 61 136 Currency exchange gain 77 546 933 Gain on modification of financial liabilities, net - 699 1,841 Change in fair value of financial instruments 3,273 - 6,837 Total financial income 3,357 1,306 9,745 Interest expenses on lease liabilities 4 28 82 Interest expenses 259 590 1,924 Currency exchange loss 152 146 406 Loss on modification of financial liabilities, net 3,969 - - Total financial expense 4,385 763 2,411 See note 14-Financial instruments regarding the gain or loss on financial instruments. 10 Income tax expense The Company has significant accumulated tax losses. No deferred tax asset associated with these accumulated tax losses has been recorded on the Statement of financial position, as there is not sufficient evidence that taxable profit will be generated, against which the unused tax losses could be applied. There are no restrictions as to how long tax losses may be carried forward in Norway. 11 Loss per share Quarters Full year Q1 2025 Q1 2024 2024 Profit (loss) attributable to the shareholders (USD 1,000) (4,144) (5,420) (14,449) Weighted average basic number of shares 831,578,316 279,570,343 414,656,727 Weighted average diluted number of shares 831,578,316 268,226,337 415,376,744 Profit (loss) per share, basic and diluted (USD) (0.00) (0.02) (0.03) The profit or loss per share is calculated by dividing the profit (loss) for the period by the weighted average number of ordinary shares outstanding for the period. Loss per share is calculated per basic share (i.e., without consideration for the anti-dilutive effect of exercisable subscription rights or warrants).
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INTERIM REPORT FIRST QUARTER 2025 12 Shares, warrants and incentive subscription rights Number of financial instruments Incentive subscription rights Warrants Shares Balance at January 1, 2025 22,569,865 526,160,419 831,576,974 Mar 13: Warrants A exercise and expiry (246,396,285) 17,258 Expired/forfeited incentive subscription rights (9,437,872) Balance at March 31, 2025 13,131,993 279,764,134 831,594,232 Balance at January 1, 2024 94,834,662 1,397,010,650 Jan 10: After 5:1 share consolidation 18,966,932 279,402,130 Employee Stock Purchase Plan 358,525 Granted incentive subscription rights Mar 20: Exercised incentive subscription rights (365,900) 365,900 Expired/forfeited incentive subscription rights (1,127,307) Balance at March 31, 2024 17,473,725 280,126,555 Balance at January 1, 2024 94,834,662 1,397,010,650 Jan 10: After 5:1 share consolidation 18,966,932 279,402,130 May 15: Share issue 27,940,213 27,940,213 Jun 19: Share issue 5,393,120 5,393,120 Aug 20: Share issue 16,166,667 Aug 29: Share issue - Convertible loan term payment settled in shares 9,123,333 Sep 16: Share issue 101,624,966 101,624,966 Oct 14: Share issue 365,041,700 365,041,700 Dec 2: Share issue 26,160,420 26,160,420 Employee Stock Purchase Plan 358,525 Granted incentive subscription rights 15,383,130 Mar 20: Exercised incentive subscription rights (532,572) 365,900 Expired/forfeited incentive subscription rights (11,247,625) Balance at December 31, 2024 22,569,865 526,160,419 831,576,974 On May 15, 2024, IDEX conducted a private placement of 33,333,333 shares at NOK 1.65 per share, raising gross proceeds of NOK 55 million or $5.1 million. In addition, the subscribers received one warrant at NOK 1.65 per share subscribed to. The May warrants are exercisable in quarterly windows after issue of interim reports and expire fourteen days after the interim report for the first quarter of 2025 has been issued. No May warrants have been exercised by the date of this interim report. On September 16, 2024, IDEX conducted a private placement of 466,666,666 shares at NOK 0.15 per share, raising gross proceeds of NOK 70.0 million or $6.6 million. For each two shares subscribed to, the subscriber received two warrants: One warrant A exercisable within the first 14 days following the disclosure this interim report, and one warrant B which is exercisable from March 31, 2025, to April 11, 2025. The warrants will lapse unless exercised within the respective periods. Following the private placement on September 16, 2024, the company conducted a subsequent offering placing 26,160,420 shares at NOK 0.15 per share, raising NOK 3.9 million. The subsequent offering was at the same terms (price, warrants) as the private placement on September 16, 2024. The warrants A and B were admitted to listing on Euronext Oslo Børs December 12, 2024. 17,258 warrants A were exercised on March 13, 2025. See also note 15-Events after the balance sheet date.
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INTERIM REPORT FIRST QUARTER 2025 From time to time, on a discretionary basis, IDEX Biometrics awards subscription rights for the purchase of shares to employees and individual contractors, pursuant to the terms of an annual subscription rights program approved by shareholders at the annual general meeting (AGM). Such subscription rights are denominated in NOK. Unless specifically resolved otherwise by the Board of Directors, 25% of each grant of subscription rights vests per year, and the grant expires on the fifth anniversary of the AGM at which the program was approved. Unvested subscription rights terminate on the holder’s last day of employment or termination of contract. Vested subscription rights may be exercised up to 90 days after such termination date. The weighted average exercise price of outstanding incentive subscription rights on March 31, 2025, was NOK 3.41 per share. The fair value at grant date of a subscription right is expensed over the vesting period of each tranche of the grant. The fair value of each tranche of a subscription right is determined using a Black -Scholes option pricing model, based on share prices quoted on the Oslo Børs and applicable volatility and interest rates. The Company’s social security tax obligations related to share-based remuneration are recorded on each balance sheet date, based on the earned value of the subscription rights outstanding, and the adjustment to the accrued balance is recorded through profit and loss. 13 Inventory Amounts in USD 1,000 March 31, 2025 March 31, 2024 December 31, 2024 Cost Reserves Net Cost Reserves Net Cost Reserves Net Raw Materials 3,890 (634) 3,256 3,796 - 3,796 3,876 (634) 3,242 Work in progress 36 - 36 53 - 53 36 - 36 Finished Goods 3,062 (842) 2,219 2,619 (40) 2,579 3,107 (836) 2,271 Total Inventory 6,988 (1,476) 5,512 6,468 (40) 6,428 7,019 (1,470) 5,548 Inventories consist of raw materials, work in process, and finished goods. Materials and components purchased for use in research and development activities are expensed at the time of purchase and excluded from inventory. Inventory is recorded at the lower of cost and net realizable value, less impairment, if any. IDEX disclosed on March 11, 2025, a strategic shift to focus on the access market, while continuing to harvest from its long-time efforts in the payment market. Consequently, parts of the material and components held in inventory became less likely to be sold, and an obsolescence provision was recognized as of December 31, 2024. Furthermore, the quantity of certain components (raw material) in inventory was deemed substantially larger than would be required for the updated business plan. Some of the invento ry may remain unused and unsold by the time the material becomes obsolete because of aging/shelf life and/or technical obsolescence. Any such obsolescence and the timing of it is uncertain. An impairment charge was recognized as of December 31, 2024, based on an assessment with horizon three years derived from the business plan and estimated usage.
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INTERIM REPORT FIRST QUARTER 2025 14 Financial instruments Convertible Bond Recognized value on the balance sheet Amounts in USD 1,000 Interest rate Maturity March 31, 2025 March 31, 2024 December 31, 2024 Convertible bond 0% Semi-annual Amortization from June 28, 2026 to December 28, 2028 Convertible debt 1,812 3,929 1,983 Embedded derivative 2,194 2,627 139 Total 4,006 6,556 2,123 In December 2023, IDEX entered into a convertible debt financing agreement. The agreement has been amended since, see below. The Company issued NOK 100 million or $9.9 million in convertible bonds at 6.0% interest p.a. The loan is denominated in NOK. IDEX Biometrics received NOK 92 million after deduction of the issue discount. Transactions and balance amounts are reported in USD at the exchange rates at the respective dates. The bondholder could elect to convert the outstanding loans into IDEX shares at any time prior to repayment at a conversion price of NOK 3.655, which price reflects the 5:1 share consolidation (reverse split) effective on the record date of January 10, 2024. The conversion option was accounted for as an embedded derivative and was recognized separately from the host contract as a financial liability at fair value through profit or loss. Under the original agreement, the debt would be redeemed in 21 equal bi-monthly instalments of NOK 4.8 million plus accrued interest. On September 17, 2024, IDEX Biometrics entered into a commitment letter to amend the terms of the convertible bond. The full agreement was entered into on November 6, 2024. The coupon interest rate on the bond was reduced to 0%. The repayment will be in four semi-annual terms starting from June 28, 2026, extending the duration of the loan until December 28, 2027. The conversion rate on the loan was reduced to NOK 0.85 per share. Conversion can, at the earliest, be done on February 28, 2026, unless the share price exceeds NOK 1.25 after June 28, 2025. The Company may elect to settle the principal payments with shares in lieu of cash payments. Any repayment in shares will be converted at 90% of the prevailing market price of the shares. The amendment represented a substantial modification of the financial liability under IFRS 9. The original host contract and embedded derivative was therefore derecognized and the amended debt was recognized at fair value of the host contract and the embedded derivative. This resulted in a gain on modification. On March 10, 2025, IDEX Biometrics entered into a commitment letter whereby the terms of the convertible bonds were amended. The amendments included, inter alia, that (i) the principal amount of the bonds will be reduced by 25%, (ii) subject to the Company’s consummation of any further equity raise on market terms latest December 31, 2025, the principal amount of the bonds would be reduced by a further 25%, (iii) the conversion period shall be the period from September 1, 2025 to two Oslo business days prior to the final maturity on December 28, 2027. If the market price of the share in the Company is NOK 0.10 or more, the bondholder shall be permitted to exercise its conversion rights under the bonds for so long as such price is maintained, (iv) the conversion price is reset to be NOK 0.065, (v) any provisions under the bonds relating to the bondholder’s rights to exercise amortized payment advancements shall not apply. The amendments to the convertible bond were approved by the extraordinary general meeting of the company on April 11, 2025. The amendment represented a substantial modification of the financial liability under IFRS 9. The host contract and embedded derivative (as previously amended) was therefore derecognized and the amended debt recognized at fair value of the host contract and the embedded derivative as of March 10, 2025. This resulted in a net loss on modification amounting to $3.969 million. Due to the change of share price in the quarter, the value of the derivative was reduced during the period, resulting in a gain amounting to $2.591 million, partly offsetting the loss on modification.
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INTERIM REPORT FIRST QUARTER 2025 Warrants Recognized value on the balance sheet Amounts in USD 1,000 Exercise price Expiry March 31, 2025 March 31, 2024 December 31, 2024 Warrants Warrants May-Jun NOK 1.65 May 29, 2025 1 1 Warrants A NOK 0.15 March 13, 2025 - 326 Warrants B NOK 0.15 April 11, 2025 14 326 Total 15 - 652 See note 12-Shares, warrants and incentive subscription rights regarding issue of warrants. The warrants were recognized on the respective dates as a financial liability denominated in NOK, at fair value through profit and loss. The valuation at initial recognition was based on option calculations, while subsequent valuation is at fair value because of the listing of warrants A and B. The financial liability represented by the warrants will eventually be nil, when the warrants have been exercised or expire, but will vary between periods. In the first quarter of 2025, IDEX recognized net $0.7 million in financial gain related to the warrants, due to expiry of warrants A and change in share price. March loan On March 10, 2025, the company took out loans from certain shareholders, in a total of NOK 30 million ($2.8 million). The loan is interest-free and – subject to approval by the extraordinary general meeting on April 11, 2025 – convertible to shares. NOK 20 million ($1.9 million) was received by March 31, 2025, and the amount was classified as a short-term financial liability. The remaining amount, NOK 10 million ($0.9 million) was received by April 11, 2025. See note 15-Events after the balance sheet date. 15 Events after the balance sheet date The March loans taken up on March 10, 2025 were converted to shares on April 11, 2025, as resolved by the extraordinary general meeting on that date. 3,000,000,000 new shares were issued and NOK 30 million ($2.8 million) of debt was thus converted to share capital. The share capital was reduced by NOK 116.4 million ($10.9 million) which amount was allocated to cover accumulated loss, as resolved by the extraordinary general meeting on April 11, 2025. As of the same date, NOK 3,653.2 million ($342.5 million) was allocated from other equity to cover accumulated loss. The reduction and allocation did not cause any effect on the result or net equity. 36,767 Warrant B shares were issued on May 2, 2025, adding NOK 5.5 thousand ($0.5 thousand) share capital. There have been no other events between March 31, 2025, and the approval of these interim financial statements by the Board of Directors that have had any material impact on the Company’s results for the three months ended March 31, 2025, or the value of the Company’s assets and liabilities as of March 31, 2025.