Half-yearly interim report, January-June 2000, Fingerprint Cards AB (publ)

Half-yearly interim report, January-June 2000, Fingerprint Cards AB (publ) General remarks on operations The Company is developing a technology for scanning and matching fingertip patterns for determination of individuals' identity, which replaces PIN codes and passwords in security applications. The technical solutions developed are intended to be licensed to companies in the fields of mobile telephony, data security, building access control and card-based solutions for e-commerce and electronic transactions. Commercial status and market Powerful factors are powering the development of the use of biometrics in various security applications. The USA too has now legislated to equate a digital signature with one on paper. A natural carrier of the former is the smart card, where the signature is protected by a PIN or biometrics. In the USA, the General Services Administration has allocated USD 1,5 billion to a programme to provide Federal agencies with multi-functional smart cards, which will individually carry the biometric identity of the holder. These cards are to be used in systems for such purposes as computer access, agency/supplier e- commerce and physical access. Fingerprint Cards is holding far advanced discussions with American companies on the implementation of the Company's technology in both PKI-based e-commerce systems and ID-cards containing a digital signature. The other developments projects, to which the Company is committed, for applications in vehicles, physical access, laptops and mobile telephony, are progressing according to plan. Technical status The continual refinement of the algorithms for registration and verification is now providing security performance beyond what can be achieved with any comparable system. The tolerance against imperfect finger placement or injured or dirty fingers has been considerably enhanced. During this summer a further 70,000 finger patterns were collected in field tests of the Company's system. The development platform for in-house, high-performance microprocessors previously announced is now in place in the Company's newly established laboratory. Here, tests are now also undertaken on hardened protective surfaces for the sensor, in order to accommodate all reasonable applications. In this endeavour, the Company collaborates with external expertise at Chalmers University of Technology in Göteborg, the Technical University in Delft in the Netherlands and others. A number of demonstration and evaluationsystems have been manufactured and supplied to clients and potential clients. Detailed design of the previously defined line senor is proceeding according to plan. This sensor aims at an even lower component price for certain applications. The development of a unique identification system, able to handle a large number of individuals in the Company's integrated systems for such applications as building access control, is in progress. Turnover and earnings Turnover totalled MSEK 1.0 (0.9). The consolidated net loss was MSEK -8,7 (- 8,5). All development costs have been written off. Financial position During the second quarter, a new issue was floated, directed towards institutional investors, as well as a preferential issue, which together netted MSEK 148,8 after issue costs. The consolidated equity/assets was 97,6%. Consolidated available liquid assets including current investments as at June 30, 2000, amounted to MSEK 165.0. Other current receivables amounted to MSEK 3,0. Consolidated operating capital amounted to MSEK 163,7. Fixed assets, investments and depreciation During the first six months of the year, MSEK 0.2 was invested in equipment. Development costs of MSEK 9.2 set up us an asst and patent rights for MSEK 5.9 were depreciated according to plan by 15% annually, equivalent to the expected economic life. Equipment is depreciated at 20% annually and personnel PCs by 30% annually. Personnel During the second quarter, a further four graduate engineers and one doctor of technology were engaged. As at the last day of June, the number of employees thus totalled twelve (seven). The project organisation includes a total of some twenty-five persons. Significant events after the end of the accounting period The Company has been accepted as a member of Radicchio, founded by Gemplus, Sonera SmartTrust, EDS and Ericsson. This organisation is expected to become a world-leading authority and set industrial standards for the field of secure e-commerce in mobile applications. Of the 300,000 options in the option programme, which corresponds to a dilution of 4.7%, all the employees subscribed for a total of 290,000. The redemption value has been set at SEK 192 for both the two- and three-year programmes. A further two people have been engaged, an assistant financial controller and a graduate engineer. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2000/08/29/20000829BIT00250/bit0001.doc The full report http://www.bit.se/bitonline/2000/08/29/20000829BIT00250/bit0002.pdf The full report

About Us

Fingerprint Cards AB (FPC) develops produces and markets biometric technology, which, through analysis and matching of an individual’s unique fingerprint, verifies the person’s identity. The technology consists of biometric sensors, processors, algorithms and modules that can be used separately or combined. The competitive advantages offered by FPC’s technology include unique image quality, extreme robustness, low power consumption and complete biometric systems. With these advantages and the ability to achieve extremely low manufacturing costs, the technology can be implemented in volume products, such as smart cards and mobile telephones, which impose extremely rigorous demands on these characteristics. FPC’s technology can also be used in such areas as IT, Internet security and access control.