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Next Biometrics reports Q3 and Zwipe raises funds as commercialization of fingerprint smart cards nears

Next Biometrics reports Q3 and Zwipe raises funds as commercialization of fingerprint smart cards nears
 

Zwipe has announced it intends to carry out a Rights Issue which could total up to NOK 74.4 million (US$8.1 million), 90 percent of which has been covered in advance. The company has called an Extraordinary Special Meeting for December 2 to decide on the proposed increase of share capital through the partially underwritten rights issue.

The subscription price for the new shares will be NOK 7 ($0.77), and they are expected to be sold between December 5 and 19 on the Merkur Market. Up to 10,635,525 new shares will be issued.

The purpose of the share issue is to provide the required capital resources to reach the point of commercializing its smartcard technology, including its technology platform developed in collaboration with Idemia, its Z5 energy harvesting and power management chip. Zwipe has also delivered on its first order for its second generation inlay technology and been engaged by G+D to work on a wearable biometric payment device for a leading bank. CEO André Løvestam says the company now has the path and capital to reach the scale-up point for biometric cards.

“Zwipe is streamlining its product roadmap and pursuing cost saving opportunities that will reduce the current burn-rate,” says Løvestam. “This has been made possible on the back of the strategic collaboration with Idemia, the global leader in Augmented Identity and one of the world’s largest payment card manufacturers, on a disruptive technology platform that we together with our partner Idemia believe is a game changer and a catalyst for growth in the industry. The new platform will integrate and simplify component design, drastically reducing costs of the product itself and the manufacturing process. As a result, a complete biometric payment card cost of below USD 10 is becoming realistic, providing an accelerated path to mass volumes while giving Zwipe a long-term cost leadership position.”

Zwipe recently announced better than expected results for Q3.

Next Biometrics meanwhile has reported revenue of NOK 17.6 million (US$1.9 million), down 42 percent from a year earlier on reduced orders from a U.S. tier 1 customer, among its Q3 results.

The company had a gross margin of 27 percent excluding non-recurring inventory write down, and EBITDA excluding options of NOK negative NOK 34.7 million ($3.8 million). Next has recorded earnings of NOK 75.2 million ($8.2 million) in the first nine months of fiscal 2019, down 5 percent from the same period in 2018.

“As a newly appointed CEO I can note that Q3 2019 was not in line with shareholders expectations,” acknowledges Next CEO Peter Heuman. “Currently, I’m in the middle of a 100-day program and have identified both great strengths and some areas of improvements. That said, the company is currently not at a level where we may avoid a temporary revenue impact as our single-largest customer reduces sensor purchases. My initial analysis shows important areas for the company to focus on going forward to drive revenue and value creation; create a tangible growth agenda, become more customer centric, and invest selectively in new products to ensure we are positioned to meet customer demand in our target markets.”

Heuman was named chief executive in September.

Next also recently launched a pair of new fingerprint biometric products for the access control market.

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