Fingerprint Cards AB (publ) publishes interim report for January – March 2024 - Seite 2

Completing the Transformation Plan

We launched our Transformation Plan in October 2023, targeting significant financial improvement by the second half of 2024 through a phased implementation. This comprehensive plan has six key elements:

1.        Devising a new strategy,

2.        Strengthening the balance sheet,

3.        Refreshing our portfolio,

4.        Optimizing costs,

5.        Enhancing talent and organization, and

6.        Improving governance and incentives.

We are currently progressing through the Stability phase of this plan, effectively halting losses and strategically repositioning the company towards sustained profitability and enhanced cash flow in our core business areas.

Portfolio Refresh: Winding down the loss-making Mobile business

In our year-end report for 2023, we announced our decision to redirect capital and investments away from mobile sensor hardware toward more profitable business areas. We are accelerating this pivot by phasing out the loss-making Mobile business to safeguard our company's financial health and future viability. As a result, revenue from Mobile will decrease as we concentrate on more profitable sectors. We expect significant improvements in profitability as our focus shifts toward non-Mobile areas.

Continued Cost Optimization

In October 2023, we set a target for our operational expenses (OPEX) to reach approximately SEK 180 million annually, taking full effect in the second half of 2024. We are currently implementing restructuring measures aimed at achieving these savings. Through a dedicated focus, we have identified an additional SEK 30 million in savings, lowering our targeted annual OPEX to SEK 150 million by the end of this year— a significant reduction that is now fully underway.

Strengthening our balance sheet

On April 26, 2024, Fingerprints announced significant measures to address its financial position. These steps include reducing debt and increasing equity. The company will repay its outstanding convertible bonds early to provide greater financial flexibility and level the investor playing field. Fingerprints has agreed with Heights Capital Management to redeem these bonds early at their total nominal value of approximately SEK 105 million, including accrued but unpaid interest. Additionally, to ensure liquidity until the completion of the upcoming rights issue, which aims to raise up to SEK 310 million, a consortium of investors has extended a bridge loan of SEK 60 million to the company. This rights issue, offering preferential rights to existing shareholders, is pending approval at the annual general meeting scheduled for May 28, 2024.