Idex Biometrics UK Ltd

The principal activity of the company in the period under review was to conduct research and development in the field of fingerprint technology with the aim of providing saleable intellectual property, and to provide engineering, supply chain and other services related to fingerprint imaging and recognition technology and devices. Going concern As at 31 December 2024 the company had net liabilities and is dependent upon the continued financial support from its parent company, IDEX Biometrics ASA, to meet its obligations as they fall due. Per the parent company's filed 2024 accounts: "IDEX Biometrics has incurred significant operating losses and negative cash flows during the development stage of the business. The future viability of the Company is dependent on its ability to generate cash from operating activities and to raise additional capital to finance its operations. The net equity amounted to $4.7 million, less than half of the share capital, and the balance sheet solvency, defined as cash plus current receivables less current liabilities, was negative $519 thousand on December 31, 2024. During 2024, the Company implemented measures to significantly reduce staff and operating expenses, mainly in the technical functions in the US and China, while maintaining the customer support functions and supply chain capabilities. The existing cash does not fund the Company’s operating expenses and capital expenditures requirements for the next twelve months. On March 11, 2025, the company disclosed that following a strategic review, concluding that the company shall concentrate its technical and commercial efforts on serving the access market, where IDEX is believed to possess competitive advantage. IDEX Biometrics will seek to also harvest from its long-time efforts in the payment market. On the same date, the company disclosed that it had received irrevocable undertakings from certain existing shareholders and new investors to lend NOK 30 million ($2.8 million) to the Company to fund the commercialization efforts in line with the revised business strategy (“March loans”). Subject to approval by an extraordinary general meeting, the loans would be convertible to shares at NOK 0.01 per share. At the extraordinary general meeting on April 11, 2025 the shareholders resolved to (i) reduce the share capital of IDEX Biometrics ASA by decreasing the par value per existing share from NOK 0.15 per share to NOK 0.01 per share, and (ii) subject to completion of the share capital decrease, convert the March loans to shares at a subscription price per share equal to NOK 0.01 per share. The lenders have undertaken to subscribe for shares and settle the share contribution by debt conversion. The extraordinary general meeting also approved a subsequent offering of shares at the same price to the other existing shareholders, raising up to NOK 6 million ($0.6 million). These actions will cover the company’s immediate cash needs. Thirdly, the Company disclosed that it had entered into a commitment letter and term sheet for an amendment agreement with the holder of the Company’s convertible bonds amounting to NOK 67 million ($6.3 million) whereby the terms of the convertible bond will be amended such that, inter alia, (i) the principal amount will be reduced by 25%, and, (ii) subject to the company obtaining additional equity on market terms by December 31, 2025, the principal amount would be reduced by a further 25%. Certain other terms of the bonds were also amended. The extraordinary general meeting approved the change of terms. In the short term, IDEX Biometrics is dependent on the successful implementation of the foregoing. The long-term future viability depends on the Company’s ability to generate cash from operating activities and to raise additional capital to finance its operations. IDEX Biometrics existing cash and the funding described above is not sufficient to fund its operating expenses and capital expenditures requirements for the next twelve months. While the Company has been successful in the past in raising funds through private placements of shares and issuance of convertible debt, there is no assurance that IDEX Biometrics will be successful in raising capital the future. The Company’s failure to raise capital as and when needed would have a negative impact on its financial condition and its ability to pursue its business strategies. These factors cast significant doubt on the Company's ability to continue as a going concern. As an ongoing activity, the Company monitors liquidity and the Board is prepared to take appropriate measures if and when required. IDEX Biometrics has been successful in the past with implementing cost reductions and raising capital through private placements of equity. Reflecting the recent funding described above and acknowledging the significant doubt identified above, the Board has on balance concluded that the conditions for the going concern assumption are met." Despite these actions, a material uncertainty remains which may cast significant doubt on the group's and the company's ability to continue as a going concern. The directors have received confirmation of continued support from the parent company and, after assessing the group's forecasts and funding position, consider it appropriate to prepare the financial statements on a going concern basis. These financial statements do not include any adjustments that might result if the company were unable to continue as a going concern.