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Precise Biometrics plans to boost capital with share sale

Precise Biometrics plans to boost capital with share sale
 

Funding continues to be difficult to find. Digital ID vendor Precise Biometrics is willing to dilute shareholder value to get some financial support for expansion.

Executives plan to issue new shares valued at an estimated 49.5 million Swedish kronor, or US$4.75 million. If all are sold, the executives say the company will net about SEK 40.5 million ($3.89 million) after issue costs.

This kind of corporate finance has helped Precise maintain some momentum before. It will need some juice after a disappointing fourth quarter.

“This capital injection will accelerate our ability to deliver on our growth strategy and further diversify our revenue streams,” CEO Patrick Höijer says in a statement. Top priority is expansion in the United States market.

It will be used to boost product development, too, however.

The funding, said Höijer, will “also strengthen our existing product development and our opportunities to expand our business on the mobile phone side within the Algo (fingerprint-reading software) business area to new verticals such as laptops and the automotive industry.”

Precise develops biometric software for physical access management along with its Algo line, which the company says has suffered under large phone inventories as customers hold their cash.

Either as a way of making nice with existing shareholders or prompting sales among the converted, Precise executives are adding an incentive to buy.

Shareholder will have pre-emptive rights to buy the new shares. For every three ordinary shares owned, two ordinary shares would be available for the subscription price — SEK1.6 ($0.15) per ordinary share.

The shareholder deal, called a rights issue, is secured to 100 percent through various financing commitments.

Approval of the plan will have to wait for the May 10 annual general meeting, which was moved up due to the rights issue. (The same is true for the first-quarter financials, which now will be released May 9.)

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