Precise Biometrics implements rights issue of SEK 50 million to finance expansion

- New issue of shares of approximately SEK 50 million with preferential rights for Precise Biometrics' shareholders - The new issue of shares will be implemented to finance further expansion and increase market penetration in prioritized market segments - Following approval at the extraordinary general meeting on August 21, the subscription period will run from August 31 - September 14, 2009 - The terms and conditions for the new issue of shares, including the subscription price and ratio basis, will be established and announced on August 20, 2009 "The order recently received from the US authorities is further evidence of our successful offer. The new issue of shares is expected to produce the financial flexibility required to take new orders of a similar size and to focus on long-term and profitable transactions, and to further reinforce the position of the company in the market" says Thomas Marschall, President and CEO of Precise Biometrics AB. Background and rationale On July 8, 2009, Precise Biometrics reported the largest order in the history of the company. The value of the order amounts to USD 6.1 million and refers to fingerprint readers and software for the US authorities to be delivered in 2009. The US order will give Precise Biometrics excellent prospects of achieving the target communicated in 2006 for the company to become profitable in the fiscal year of 2009. To continue to maintain a high rate of expansion and enable the next stage in the development of the company, it is necessary to increase the company's working capital; partly because there has been a radical decline in opportunities to obtain order financing from the banks in the last nine months in the current financial climate, and partly because suppliers are demanding shorter payment terms, which is affecting the liquidity. The company also intends to increase its marketing efforts in prioritized market segments and in geographic markets by expanding its resources in marketing and sales. A strong financial position is also expected to result in a higher credit rating, which will further improve prospects of obtaining new orders in line with the recently advised record US order. In this context, the board of directors has therefore decided to implement a new issue of shares to an amount of SEK 50 million. Terms and conditions for the new issue of shares The board of directors of Precise Biometrics decided on July 30, 2009, conditional on approval at an extraordinary general meeting on August 21, to implement a rights issue with preferential right for existing shareholders of approximately SEK 50 million. In the event that all shares are not subscribed for on basis of subscription rights, allocation of shares shall be made within the scope of the maximum amount of the share issue, at which the Board of Directors shall allocate the shares primarily to those who have subscribed for shares on basis of subscription rights, pro rata in relation to their subscription on the basis of subscription rights and secondarily to those who have declared their interest to subscribe for shares without subscription rights, pro rata in relation to their declared interest. The subscription period runs from August 31 - September 14, 2009, following approval at an extraordinary meeting on August 21, 2009. The board of directors will on August 20, 2009 establish and publish the subscription price for the new shares and the ratio basis. Preliminary timetable for the rights issue The subscription price and ratio basis will be determined on August 20, 2009 Extraordinary general meeting in Precise Biometrics August 21, 2009 Prospectus is published around Aug 24, 2009 Last day of trading in the share with right to participate in the new issue August 24, 2009 First day of trading in the share without right to participate in the new issue August 25, 2009 Record day for participation in the new issue of shares August 27, 2009 Trading in subscription rights Aug 31 - Sept 9, 2009 Trading in paid subscribed shares August 31, 2009 until the share issue is registered at the Swedish Companies Registration Office Subscription period for the new issue Aug 31 - Sept14, 2009 Otherwise refer to the notice of the extraordinary general meeting in Precise Biometrics and the pending prospectus concerning the rights issue. Financial advisor Remium AB is acting as financial adviser to Precise Biometrics in conjunction with the rights issue. For more information: Thomas Marschall, CEO, Precise Biometrics AB Tel: +46 46 31 11 10 or +46 734 35 11 10 E-mail thomas.marschall@precisebiometrics.com Patrik Norberg, CFO, Precise Biometrics AB Tel. +46 (0)46 31 11 47 or +46 (0) 734 35 11 47 E-mail patrik.norberg@precisebiometrics.com Precise Biometrics is a market-leading provider of products and solutions for fingerprint recognition. The technology proves people's identities in a fast and secure way, while it reduces costs related to password management, identity theft and fraud. Precise Biometrics serves business and government organizations throughout the world and its technology is licensed to close to 100 million users. Precise Biometrics is listed on NASDAQ OMX Stockholm small cap list (PREC). For more information, please visit www.precisebiometrics.com or view an information video at www.precisebiometrics.com/share-issue-video Important information The publication or distribution of this press release may in certain jurisdictions be subject to restriction by law, and persons in the jurisdictions where this press release has been published or distributed should inform themselves of and follow such legal restrictions. This press release may not be made public, published or distributed, either directly or indirectly in the United States, Canada, Japan, New Zealand, South Africa, Australia or any other country where such procedures are subject in full or in part to legal restrictions. Nor may the information in this press release may not be communicated, reproduced or presented in any way that is in conflict with such restrictions. Failure to follow this instruction may involve a breach of the United States Securities Act from 1933 ("Securities Act") or applicable laws in other jurisdictions. This press release does not contain or constitute an invitation or offer to acquire, subscribe to or otherwise trade with shares, subscription rights or other securities in Precise Biometrics. The invitation to the persons concerned to subscribe to shares in Precise Biometrics will only take place through the Prospectus that Precise Biometrics intends to publish around August 24, 2009, and this Prospectus will contain financial statements and other information on Precise Biometrics' board of directors and auditors. Neither the subscription rights, paid subscribed shares or the new shares will be registered in accordance with the Securities Act or any other act in Canada, and may not be transferred or offered for sale in the United States or Canada, or to persons domiciled there, or on behalf of such persons, other than in such exceptional cases where registering in accordance with the Securities Act or other act in Canada is not required.