Hi, and welcome to Carnegie and our interview with Fingerprint Cards. My name is Markus Almerud. I'm an analyst here at the bank. I've got the pleasure to have Adam Philpott and Fredrik Hedlund, who is CEO and CFO with Fingerprints, with me. Hi, gentlemen. Hi, Markus. Great to be back with you. I'll leave the word over to you. You'll have a presentation, and then we'll come back with some Q&A at the end. Without further ado, the word is all yours. Excellent. Thanks very much, Markus. Just a few slides to take you guys through today, really building on what we've shared in previous presentations throughout the rights issue. What we'll do today is we're going to talk a bit about our current assets as a company, how we're expanding, and as we do so, the new areas we're going into, but also how we leverage those existing assets in new ways. A few things we'll go through today. In terms of the agenda, we'll quickly reframe some of the content we've shared previously just to orient people around the company today. Then we're going to come back to our strategy and talk about where we're going. We're going to talk about the actions we've taken around our strategy, not just what we're saying we're going to do, but actually what we're doing about it as well. We'll go a little deeper into some of those things. We'll talk a bit about Anonybit, we'll talk about SmartEye, and we'll talk in a higher level about some of the other announcements we've made in the last few weeks and months. Let's start with who we are today. We've got a really rich history as a company. I'm not going to read all of this. I know some of the words are a bit small, so we're going to share this for you guys to have. We have a very rich history as a company. We've been in the identity space for a very, very long time, specifically in biometrics, which is really all about making things easy to access instead of using PIN codes or passwords, and very secure to access as well. Biometrics is a fantastic pillar of something I know, something I have, something I am, obviously being something I am. We're also really well known for quality as an organization, for trust, for having high efficacy in what we do, for being able to scale, and for the support that we offer to our clients too. Those are the things that have made us a great company that leading brands wish to work with. Not only are we great at what we do, we also do it in a very important and growing market. We've been very much in the access business and in the nascent payment market, but more than that, we're very adjacent to what's going on in cybersecurity. Cybersecurity is predicated on identity. It's really important that as you interact with things and information, we know who you are and we can ascertain your identity. That's not working well today with passwords, so we're in a great place to help with that, both organically and inorganically. As we come to our vision and our strategy that we've spoken about over the last year or so, any good vision shouldn't change dramatically over a short period of time. You know when you have a good vision because you know it remains a really enduring and compelling opportunity. Our vision has been for some time, you are the key to everything. That remains today. We've looked at this. I thought, should we change it? No. Really, really powerful message and really, really relevant to our customers. The reason it's relevant is because we connect to more and more services, digital services. We connect to more and more different types of devices. As we do so, there's less and less trust out there around who is actually connecting because of cybersecurity challenges. It's really important to be able to address this problem at scale. The way it's been working is based upon passwords and passcodes, and it's not working. Passwords are not secure. They're the primary threat vector. For all of us, it's a very poor user experience. I took some annual leave over Christmas, and I heard some people chatting about going back to work and how they had to then go and reset all their passwords and what a pain it was. We all lived this experience. It's not good enough. We can help with that. Biometrics is something like another really powerful way of solving that security and that usability challenge. The way that we're doing this is by continuing in the edge. What do I mean by edge? I mean the point at which a human interacts with a telemetry. It could be a camera for iris or face, could be a fingerprint sensor for fingerprint, could be many other types of modality as well. It's the point at which the human transmits a digital signal of identity. We play that today. We're going to continue to play that and expand on that and evolve what we do there as well. It's also really important to be able to orchestrate that signal, to receive it and insert it into a workflow so that instead of asking for a password, a given application or tool asks for a biometric signal instead. It is about bringing these two things together and orchestrating that all the way from the first time we see a person onboard them, through to continuous access, through to account recovery if they lose their device or their credentials, all the way through to offboarding. That is what we are going to be doing as a company. Really powerful play in a big market as we move further into cybersecurity, leveraging the great things we already do on the edge. As we think about not only what we say we are going to do, but showing the actions around it, we have taken a number of actions on this already. We are doing what we have said we are going to do. We are continuing to focus on how we are growing the business. We made some announcements last year around O-Key. I will touch on that in a moment. We recently made an announcement around a partnership with jNet. Lots of partnerships that we have in our customer base where they're consuming our technology in new ways. Infineon in the payment space. I'll touch on all of these. We continue to drive growth and leverage our existing assets in our core markets and leveraging our edge technology. It is also about then continuing to expand what we can offer there as well. I'll talk a little bit later around the announcement, for example, SmartEye, where we'll see some additional modalities coming into our portfolio. We will look at these assets above our regular go-to-market too. A number of different things that we're doing there, including monetizing our IP. All of these things I'm going to touch on just in a little bit more detail. At the same time, it's important for us to move into the cloud. That's where a lot of orchestration in today's IT systems takes place to allow any-to-any access. With our partnership that we've announced with Anonybit, that really moves us into the cloud. Let me spend a bit more time firstly on Anonybit, and then I'll come in to some of those other items as well. Anonybit is a great partnership for us. We had a great look across the market. David, our CTO, came in to help us make sure there was technical credibility in what we were looking to do and how we were looking to do it and with whom. Anonybit was a perfect partner for us to work with. They have a highly performant centralized biometric cloud. Bit of a mouthful. What does that mean? It is centralized and it is in the cloud, meaning that all templates for biometrics are stored there. It does not matter where you are connecting from in the world and what device you are transmitting that biometric signal over, we can access that in the cloud. Any-to-any. Highly performant means that when you do that, it does not take ages for you to get that signal back to give you access, millisecond performance based on the distributed cloud that they have. Great centralized assets that open up a massive number of use cases at scale. It is also what they call sharded for deep security and privacy. What does that mean? We do not just store a template in the cloud in one place. That is referred to as a honeypot in cybersecurity, a high-value asset, but we distribute it. We take a biometric template and break it up into many, many pieces and distribute it, and it cannot be put back together again through any type of breach. It makes it very, very secure, but also protects privacy also. Very unique technology there. This allows us to use biometrics at a much, much greater scale with dedicated hardware that we do today or without dedicated hardware, with software. It opens up a number of use cases for us. It allows our customers and organizations to break away from passwords, to make it easier to ascertain identity and to give them more confidence that they're getting the right authentication done. Not only that, I've talked a lot about this before. Most companies are deploying zero trust as their architecture. This massively underpins zero trust because identity is a key pillar of zero trust. It says never trust, always verify. Having this baked in is really, really powerful and addresses the weak link that many of our clients are facing today, whilst unifying that whole identity cycle that I touched on earlier. Lots of opportunity arises through that. Let me talk about a few other partnerships just quickly, and then we'll move to some Q&A. We did announce SmartEye partnership as well. Really interesting partner. Great cultural fit for us SmartEye. Actually, we're very nearly located as well, which is very helpful. Often people think SmartEye as being a driver monitoring system. In vehicle, monitoring the driver. Are they paying attention? Are they looking at the road, etc.? Do they look drowsy? It is actually much, much more than that, the software SmartEye have. They monitor the whole cabin. You'll hear this whole cabin or in-vehicle used a lot. They can see all of the passengers in the cabin. They can detect who they are. They can look at things like sentiment. They have AI. They can do eye tracking for more than just driver monitoring. It adds a lot of capability to what we're actually trying to do. It adds face as a modality, which is really powerful because it's very accessible. When you couple that with the other things we're doing, we can make triangulated decisions using multimodal biometrics. This gives us a lot of different opportunities, a lot of new edge technology that we can go and deploy with our customers. While some of the headlines in the deal SmartEye were rightly about the fact that they've scoured the market to find the best iris, they picked ours as the best iris out there, and then we've been able to monetize that with them as they bake it into their product. It's also about, for me, the asset we get back. I see the partnership much broader than just the upfront or milestone-based monetization. Lots of opportunity SmartEye also. Let me touch on a few more announcements that we've made just to refresh on some of the things we spoke about previously and add some new to it as well. We've spoken about O-Key in the past. We announced that. What O-Key represents is us moving up the value stack, not just doing wafers, not just doing sensors, but moving up with MCU. This is really powerful. This is really powerful because we're actually giving all of the tools to our customers to be able to integrate themselves. In the past, they've had to come to us. We've had to do bespoke work. We're a small company. That's a bottleneck to growth. We are now out of the way, reducing friction and giving the tools to our customers and our partners what they need to go and integrate. It is even more than that. It is actually a platform as you think about it. We've very much overpowered the MCU in this product so it can be used for a lot more than just biometrics. You can use it for different things so they can add more and more features to their product, leveraging the core system that we put in there. Very much a Swiss Army knife. Not only that, we're working on mesh networking here as well so that you can have multiple of these sensors dotted around a local area so that you can share templates across them. You don't need to enroll in each one of them, but they share information together in a fog computing or mesh network type of approach. Really powerful additional things we work on there. Finally, it includes AI. We've had AI in there. We used to call it algo. It's actually artificial intelligence to ensure that we're looking at the templates on there. As users get older or have wet fingers or have different circumstances, the system itself can automatically update to have the optimal templates on board. We see more opportunity for that in future also. Of course, we have the jNet announcement we made just a few days ago now. What jNet brings is all of what I have talked about on the O-Key, but we also add software on there for FIDO as well. It is really a ready-to-go FIDO capability that organizations can bake into different devices. Let's say, for example, you provide a keyboard and you are already using that for connecting to your typing with your laptop, you can match on that into a FIDO device or a mouse or other peripherals, just as an example of the capabilities that are out there as a turnkey solution for organizations to adopt and use. Finally, we made another couple of announcements with Infineon, a great partner of ours, recently got certified by Visa as well as we continue to build out our capability in the payments market. If you go to the next slide for me, Fredrik, please. Building out the product necessary to get that market to take off, having Visa sign off, really, really powerful step as well, manifested in an order from Infineon, which is helpful to us too. Really nice to see continual building and investment from these very large strategic partners in that space. Of course, we made an announcement about IP commercialization as well. We did some great work previously in commercializing some of our patents. We see more opportunity. Some of that monetization we made, there are other vectors that we can go and monetize that set of patents, particularly in the content management space. We are working with a new partner to then take it to the next level of customers or rather organizations that are using that where we can defend our IP. Really big opportunity for us too as we continue to drive that and leverage the great R&D work that the team have done in the past. With that, I'm going to hand over for Q&A. Just one more call I would make. Markus and I are no strangers. We've done a few videos in the past. Certainly, if you haven't seen our last video, it was about a month ago we put this one out on the wire. Do go take a look at this. You can see the topics, 15 minutes long, really good conversation to Markus and I about the broader rights issue, what we're doing, why now is a great time to invest, etc. With that, I'm going to pause. Markus, maybe we can come back to you and we'll do some Q&A. Yeah, thank you. Thank you for the presentation. Maybe I'll start off the Q&A by just asking, well, you're in the biometric market, but you're also talking some about entering the cybersecurity market and maybe a little bit about how you're planning on doing that. Yeah, great. That's a really good question. I think what I would say to start with is that we've always been cyber adjacent. We've always been in the identity space, and we've always been about biometrics as being a much better way to connect to information, applications, and devices than passwords or PIN codes, whether it's a door lock, whether it's a padlock, whether it's a mobile phone, or any other device for that matter. That's always been about identity and access. That is a subset of the identity market, and identity is a subset of the cyber market. I think what we're doing now is moving even more into cyber because it's such a vast market. The interesting thing for me is that identity is the piece that's got the most room to develop because it's so predicated on passwords today. We see a big opportunity to move more into that. We leverage what we're already doing. We're not getting out of what we're doing. We're leveraging what we're doing in order to do that, building on our strengths. There are some incremental things we need to do. That's how we're going to do it. We will partner as well as we go into that. Anonybit is a great example of a partnership. So is SmartEye. Getting more edge modalities, particularly ones that are software that are highly accessible over a common camera, great way for us to engage more broadly in the digital domain to offer an alternative, a superior alternative to passwords. That is how we are going about it. There is a question from the audience, and actually one that connects to what you just said about the edge and the cloud. Why is it important to be in both? Yeah, that is a really good question. I mean, we looked at what our customers need, right? They need much stronger identity. If we can continue to provide them with hardware through our customers, that is one way of solving it. That only meets one segment of the pie. It only meets one type of use case. If we're really going to solve it, we need to help them insert biometrics more deeply into their infrastructure, into their workflow, so that when you try to log on to something, it asks you for something other than a password. To do that, given that most systems today are in the cloud in order to be highly accessible and highly scalable and available, we had to move into that space to be able to orchestrate the receipt of that signal. It's one thing to transmit it, but there needs to be another way of receiving it and ensuring it's orchestrated into their workflow. Not only that, the cloud also opens up new opportunities for us also. It opens up opportunities in onboarding, in identity access management, in account recovery, etc. It opens up a lot of opportunities there. We need to be on both sides, not just on the delivery, but on the control as well. That is why we have made the partnership announcement with Anonybit. On the partnerships, I mean, you have announced a lot of partnerships in the recent past or several partnerships in the recent past. Is this the path you have chosen? Should we expect more of these kinds of collaborations? Yeah, I mean, I'll tell you what I would say is that we have a build-by-partner strategy as we think about how we execute. We look at this market, and what we are not going to do is announce millions of partnerships that bolster our tech stack. We are being very precise about where we think we need to go and do that. We are also being very thoughtful about which ones we are going to build, which ones we are going to partner, and in due course, which ones we are going to buy. We are trying to be very surgical about that because otherwise we will get spread so thin we cannot execute. I think we need to be a little clear on partnerships because there are product-side partnerships where we develop things, Anonybit, SmartEye, and then there are customer partnerships where we sell things, Infineon, jNet, etc., etc. We are going to do lots on the sell side, but we are going to be very selective and surgical on the product side. Fredrik, I do not know if you have any other comments you want to make on the partnership side, but that is kind of how I think about it. I think it is right. One is we are selective. Two, we spend time on them to make sure that we go in with eyes wide open. We build business cases. In the end, we have to create a return on the investment that exceeds the cost of funds. That is the type of analysis we're doing, including payback, to make sure that we are managing the funding that we have. Maybe continuing on the partnerships and maybe specifically on Anonybit, we've talked a bit about the identity lifecycle in the past. What opportunities does the identity lifecycle bring? Yeah. I mean, what I do is I kind of break it up into the stages. Stage one is onboarding. We've never seen you before. How do we ascertain who you are based on your biometrics? There is eKYC, IDV, pick your acronym. There is a market around that. Now, I'm not suggesting we're going to go into that market. It's quite fragmented globally, but there are partnership opportunities to ingest, work with some of those companies as a part of that lifecycle. That's an interesting part of the pyramid. It may not be the first one, but it's an interesting part of the pyramid. As we move forward, there's a market called Identity and Access Management, IAM. That's a very big market. It's actually very broad. I'm not saying we're going to go and take that market on, but there's lots of opportunities for us to insert in that market so that we help companies move to passwordless, for example, which is where we need that cloud orchestration piece as well. Not only that, there's a really powerful piece around continuous security. Now, if you were to do that with passwords, you'd have to keep putting your password in. What a pain that would be. That's too much friction. People would find ways to work around it, and it's not secure anyway. I think this continuous security is going to be a really interesting future dimension of identity access management. There's another segment called step-up authentication. If you're accessing some low-risk information, maybe you just need one modality, your face, for example. If you're accessing some core banking services, maybe you need a lot more than that. Maybe you need iris. Maybe you need fingerprint, for example. It allows you to have a policy based upon the nature of the user, whether they're an exec or someone lower down, and what's their risk rating and the information they're accessing. A really powerful way of thinking about a roles-based access control, which is also a market too. That's a really interesting one. Account recovery is a powerful one. People lose information or lose their device, and then they're stuck. We see a lot of that in the physical space, for example, on tokens. We can help with that so that help desk aren't trying to figure out who you are and giving your credentials to someone else. The final one is account takeover where help desk get all these calls. I'm such and such a person. I work for you. I've lost my thing. Please give me access. That's how many companies get breached because help desk are unable to ascertain that. Not only that, it's an expensive workflow because it's human-centric. Instead, we can automate that using biometrics. There are a number of different areas that we can go after in this space, but we need to be thoughtful to make sure that we're not trying to take everything on in one go, but being very targeted based on where our customers need us to go. You do have a lot of patents. I mean, you have a very, very broad patent portfolio. We talked a bit about monetization with regards to the partnership. You should be able to monetize this patent portfolio at quite a good profitability. Are the partnerships that you have announced an example of that? Yeah, I mean, here's the way I think about it. We were really successful in enforcing our IP about a year ago when we announced it publicly because we've done a great job in developing capabilities, and sometimes they find their ways to being used without any monetary return. What we're doing is working with a partner who's pretty well known, a good focus partner. We're unable to announce their name because we feel it might impact their ability to execute, honestly. If that's an elephant in the room, I'm happy to share that. What we're doing is saying, "Look, we've been successful here, but we think there's lots of other opportunities to commercialize and monetize that." With them, we're going after exactly that. Doing more of something that has been successful for us. Fredrik, I don't know if you I know you've got some passion around this too. Any thoughts from you on that one? Yeah. I mean, in some ways, Adam, I think we are lucky, right? We're sitting on a portfolio of up to 800 patents. We like the patents. We're not using all of them. Investment has gone in into the past to produce these patents. We should monetize them. Yep. Absolutely right. Like any good company does as well. Maybe finally, we're running a little bit out of time, but the rights issue. Will funds be enough to support what we just talked about, all the partnerships, and to take you to positive cash flow? Yeah. As I said on the video that I mentioned a minute ago that you and I did about a month ago, absolutely. That's why we've done this rights issue is to help us have the right fiscal path for the year ahead. We feel really good about the transformation plan we've put in place. We feel good about the revenue outlook. We feel good about how we're managing OpEx as well. I think we've done, I feel really good about the job that Fredrik and I and the whole Fingerprints team have done for us to manage that. It's not been an easy path. The team have done a fantastic job on executing what we said we would do. That is what we do: we tell the market, "Here's what we're going to do," and then we do it, and we tell the market, "Here's what we've done." I feel really good about that. In fact, I feel so good about it, and so does Fredrik, that we're putting our money where our mouth is as well. We're investing beyond pro rata in this rights issue. We communicated that because we felt it was appropriate that the market know about that. We are behind this very much also. Fredrik, again, let me bring you in on this one. No, I echo what you said. We feel good about the execution around the transformation plan. In terms of delivering or starting to deliver on the strategy, the say-do is there. You look at these six-plus recent announcements, right on track strategy. We are filling in the edge. We have the cloud. Yeah, like you. I am feeling good. Yeah. I will tell you one other thing, actually, is I think as we came into the new year, that feels like a long time ago now, but very much pivoted as a company. We did a lot of difficult things, including exits in China last year. It is becoming so this year, it is about looking forward. We're really executing on what we're doing. We're not just talking about, "Oh, this is what we're going to do." We're doing it, but we're looking forward about how we're going to then monetize this and continue to grow the company and transform the company as well. Really interesting pivot over that from one year to the next, I would say. With that, on that note, thank you very much for coming here to talk to us, and thank you for everyone who has listened. Our pleasure. Thanks, Markus. Thank you. Thank you, Markus.