Anoto Group, January – June 2006 Interim Report

• Second quarter sales were SEK 15 million (29). January-June sales totalled SEK 55 million (58). • The Group’s second quarter gross margin was 79% (68), or SEK 11 million (20). The Group’s gross margin for January-June was 79% (66), or SEK 43 million (39). • Earnings before depreciation and amortization for the second quarter were SEK –36 million (–9). The Content and Applications business unit (Anoto Inc., US) accounted for SEK –13 million (0) of the loss. Earnings before depreciation and amortization for January-June were SEK –47 million (–17). The Content and Applications business unit accounted for SEK –22 million (0) of the January-June loss. • Earnings after taxes were SEK –46 million (–20) for the second quarter and SEK –60 million (–35) for January-June. • Earnings per share totalled SEK –0.36 (–0.17) for the second quarter and SEK –0.47 (–0.30) for January-June. • Cash flow amounted to SEK –30 million (36) for the second quarter and SEK 35 million (35) for January-June. • The Company no longer anticipates a profit before depreciation and amortization for 2006. Operations • The new CEO as of today is Anders Norling, former CEO of Sensys Traffic AB. He succeeds Mats Blom who has been acting CEO since June 19. Mats Blom resumes his role as the Company’s CFO. • The Forms Solutions application area continues its growth. The number of active forms users grew to approximately 37,000, up 26% from the previous quarter and 144% from a year ago. • The third consecutive Anoto Functionality Conference was held in Copenhagen. The conference attracted close to 200 participants, more than ever before, from 29 countries. • The Anoto Technology application area has signed a new contract with a global manufacturer of mobile phone platforms. • Anoto has continued to build its Content and Applications business unit, Anoto Inc., US. The Company is currently in discussion with potential strategic partners to drive the Pentop market.