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IDEX Biometrics ASA
2023 Annual report
Statutory annual report in accordance with Norwegian requirements
for IDEX Biometrics ASA for the year ended December 31, 2023.
This annual report is published to the company’s shareholders and the general public as well
as the European Regulatory Network which includes the Oslo Børs. The document is filed with
the Norwegian Register of company accounts. This report and other public information about
IDEX Biometrics ASA are available at the company’s web site www.idexbiometrics.com.
All of the company’s disclosures to the market and the general public are available at Oslo
Børs’s web sites live.euronext.com/en or www.newspoint.no.
References included in this document or other documents are intended as an aid to where
information can be found and the documents referenced are not incorporated by reference into
this document unless explicitly stated.
IDEX Biometrics ASA prepares its consolidated and separate parent company financial
statements on a historical cost basis, and in accordance with IFRS Accounting Standards as
adopted by the EU.
Date: April 24, 2024
IDEX Biometrics ASA Annual Report 2023
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Table of contents
Report from the Board of Directors
..........................................................................................................
3
Consolidated Financial Statements with Notes
.........................................................................................
17
Parent Company Separate Financial Statements with Notes
....................................................................
45
Responsibility Statement
...........................................................................................................................
76
Report of Independent Auditor under International Standards on Auditing
.............................................
77
Articles of Association
..............................................................................................................................
82
Corporate Governance Review
.................................................................................................................
83
Board of Directors and Executive Officers
...............................................................................................
89
IDEX Biometrics ASA Annual Report 2023
Report from the Board of Directors
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REPORT FROM THE BOARD OF DIRECTORS
We were incorporated as a public limited company under the laws of the Kingdom of Norway on July 24, 1996.
Our ordinary shares have been listed for trading on the Oslo Børs under the symbol “IDEX” since March 12,
2010.
Our principal executive offices are located at Dronning Eufemias gate 16, NO-0191 Oslo, Norway, which
is also our registered office address, and our telephone number is +47 6783 9119. We currently have subsidiaries
in the United Kingdom, the United States and China.
Description of IDEX Biometrics
IDEX Biometrics is a global technology leader in biometric authentication solutions for smart cards, offering
secure and convenient solutions for payments, access control, and digital identity. Through our patented and
proprietary sensor technologies, integrated circuit designs
,
and software we make our biometric solutions unique
and innovative, delivering secure, fast and seamless user experiences to customers worldwide.
IDEX Biometrics partners with leading card manufacturers, technology companies and payment networks,
bringing solutions to the market. IDEX’s flexible technology platform supports a wide range of applications and
use cases. Together with our partners, we provide end-to-end solutions to banks and other organizations seeking
to launch their own biometric cards for payment or to support other authentication needs.
IDEX Biometrics ASA is the Group parent, headquartered in Oslo, Norway. The group also has offices in the
United Kingdom, the United States and China.
Description of Business model and Strategy
Biometrics solutions as trusted proof of identity for all
- Our commitment is to provide trusted proof of
identity for all individuals. In an era where security and trust are paramount, our advanced biometric technology
ensures that everyone, regardless of their background or circumstance, can rely on a secure and accurate means
of confirming their identity, fostering inclusivity, and safeguarding personal information in an increasingly
interconnected world.
Providing
universal authentication through scalable and trusted biometric solutions -
We offer trusted
biometric technology solutions that are scalable and meet the diverse needs of industries and applications. We
are dedicated to market and consumer relevant innovation, research, and development, to provide resource
optimized state-of the-art biometric platforms.
IDEX is uniquely positioned as a provider of completely decentralized authentication solutions for card- based
fingerprint biometric sensing technology. The IDEX Biometrics technology was purpose-built for biometric
payment and access smart cards in response to the highest security standards and other requirements of these
markets, such as power harvesting, transaction speed, durability, and cost effectiveness. The IDEX Biometrics
technology is based on the biological markers of a person’s unique fingerprint and confirms the user’s identity
through a ‘handshake procedure’ with the payment terminal, access reader or mobile phone. The biometric card
solution eliminates the need for less secure credentials such as passwords, pins or the many costly and
cumbersome multifactor authentication methods used today.
IDEX fingerprint biometrics card solution is an industry leading authentication solution based on trust,
providing a secure and frictionless user experience. IDEX Biometrics has evolved from a component company to
an end-to-end solution company.
With our own card operating system capabilities, the product offering supports
additional market verticals, broadening the target markets and creating new market opportunities.
A standard-format smart card, utilizing our fingerprint authentication solution, offered by Rocker AB and manufactured by our customer,
IDEMIA France SAS
IDEX Biometrics ASA Annual Report 2023
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Market Overview and Global Market Trends and Regulatory
IDEX Biometrics addresses large and well-established markets, with exposure to market mega-trends as
trusted identity is a top priority in payments and for enterprises. There is demand for secure online transactions
and convenient multi factor authentication solutions.
Credentials are increasingly stored online, together with other user information. This exposes people,
enterprises and society to new types of threats. The costs for cybercrimes are accelerating, especially considering
the emerging capabilities of AI and deep fake technologies. We believe this is an alarming global trend
representing an opportunity at scale for IDEX to address.
Protection of individual identity and integrity is a rising concern in today’s society, manifested by increasing
focus from regulators, governments and corporations. A proof of this is all the investments made not only by
enterprises, but by regulators and governments to promote stronger authentication, yet with the necessary
integrity and data privacy.
Regulatory landscape and industry standardization initiatives favor biometrics
The regulatory landscape world-wide strives to enhance end-user control and improve data accessibility for
consumers. EU has recently sharpened directives and regulations
1
, bringing stricter enforcement of multi factor
authentication among organizations, who must upgrade their current IT infrastructures and find the right
balancing between frictionless customer experiences and stricter security measures.
US Cybersecurity and Infrastructure Security Agency are promoting multifactor authentication including
biometrics as a key ingredient to raise the bar against cyber threats across businesses and in society. Similar
initiatives and mandates can be seen among governments globally.
Within payments, EMVCo, the industry governing body, is now intensifying efforts for global standards for
biometric payment cards. IDEX Biometrics is an engaged member and participates in EMVCo’s industry expert
group for biometric payment cards. IDEX is also an associate level member of the FIDO Alliance, a global
consortium developing standards for password-less authentication
1
.
Biometric smart cards provide multi factor authentication by design. Biometric authentication
,
using unique
physical characteristics is a solution that protects individuals and the society efficiently and represents an
untapped market potential. The user’s biometric data is encrypted and stored only on the card making the
biometric card the ultimate hack-resistant authentication device as it is never connected to the internet.
1
Examples: EU Payment Services Directive, EU Payment Services Regulation,
NIS2, DORA
Market opportunity in/and target markets
The IDEX Biometric unique biometric platform solution can be applied in multiple market segments using
smart cards with the use cases of biometrics expanding to new segments. The company has three main target
markets with an accelerating need for biometric identity solutions: banking and payment, enterprise security and
public services. IDEX Biometrics is today a fintech leader in biometrics technology offering decentralized
authentication solutions across payments and access control.
As the market matures and technology on cards gets more powerful, we expect the solution for different use
cases will converge. Our biometric card technology can already be seen in solutions that combine physical and
digital access. The abilities to attach attributes related to ID and health records are emerging. Fiat and digital
currencies could soon co-exist on the same card, and there are many other examples.
Payment
We see the market for biometric payment cards evolve in stages, with affluent consumers taking the role of
early adopters. A product segment related to this is the metal card market of more than 40 million cards/year and
a double-digit annual growth. As the IDEX biometric solution expands beyond metal and into the traditional
market of PVC cards, economy of scale will drive prices down and allow for biometric card services to become
ubiquitous.
The global market for chip enabled payment cards is currently near 3 billion cards annually and estimated to
be greater than 12 billion EMV cards in circulation today. The growth in the markets is driven by the rising
adoption of contactless payments, increased use of digital payments and growing e-commerce.
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The payment market is heavily regulated, with standardization and certifications requirements. Initiatives by
EMVCo and its members are well under way to set further industry standards, which should accelerate adoption
of biometric smart cards.
Access Control
Investments in enterprise security continue to grow double digit and biometric technologies are quickly
becoming necessities in solutions targeting access control and identity management. With growing cyber security
threats, and higher potential liabilities, enterprises are stepping up their efforts to authenticate every person they
let into their systems and onto their premises.
Biometric on-card authentication has proven to be the most secure and convenient solution for multi factor
authentication. It is economically viable and reduces the risk for cloud-based data threats putting the user in total
control of their own digital identity. In addition, the card form factor is ideal as it can also function as an
employee identity badge and be visibly worn.
In compliance with reinforced cybersecurity and data privacy regulations, biometric identity solutions protect
assets and secure access for enterprises, governments, and individuals, by removing the need for PINs and
passwords. Biometric authentication cards enable decentralized biometric identification and meet the demand for
secure identity solutions with use cases for biometric access solutions expanding. With the global cost for cyber-
crimes reaching $8 trillion in 2023, secure access control solutions have become one of the highest priorities for
CISO’s and other decision makers.
Supply Chain
IDEX has an asset light, fabless business model, using external manufacturing partners for the fabrication,
assembly and testing of its products. The majority of our card manufacturing partners are present in both
payment and access.
The IDEX Biometrics operational strategy is to maximize efficiency and cost competitiveness by using
industry standard design processes, incorporating verified high-volume components and materials, and
outsourcing manufacturing to partners using established production processes. IDEX Biometrics has established
a supply chain capable of scaling to satisfy expected future demand growth. This limits IDEX financial exposure,
while creating better economics of scale and faster path to profitability. The IDEX Biometrics solution is
developed and managed in accordance with WEEE
2
directive, following the supply chain policies and audit
requirements of the IDEX Biometrics ESG policy.
2
Waste Electrical and Electronic Equipment; EU Directive
The IDEX Biometrics go-to-market Business Model
Customers of IDEX Biometrics are manufacturers of payment cards, access cards, and other products using
fingerprint sensors as the key to prove identity. Our customers are part of a large ecosystem with a multiparty
supply chain to reach the final customer. The ecosystem is different for payments and access. IDEX Biometrics
therefore has a distinct engagement strategy to enable the eco system and have business relationships and go-to-
market models for various parties in the value chain.
Our flexible solutions for smart card manufacturers, our
implementation programs, and our user-friendly suite of enrollment solutions meet demands from various
customer types and use cases, accelerating time to market.
The IDEX Biometrics go-to-market strategy is scalable with a nimble structure effectively serving the global
market. IDEX Biometrics sells its products and solutions directly to manufacturers or enterprises and in some
cases through distributors and resellers. Our prime customers are smart card manufacturers and system
integrators of our hardware and software biometric technologies.
Our diverse employee base is one of our key success factors, and employee engagement is a critical pillar to
our ESG framework. As our solutions span from components to a full, complete end-to-end solutions, we have a
full-stack engineering team covering hardware, software system and solutions. Our executive leadership and
commercial teams have international industry experience from payments and the broader authentication
ecosystem.
IDEX Biometrics ASA Annual Report 2023
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Product development, Innovation
The company has adopted to customer needs when developing products and solutions, focusing on seamlessly
user experiences. Our industry leading solutions are software defined and we have the development expertise,
plus over 200 patents, to fully support the end-to-end solutions recently certified.
Product development
Our verticalized approach to product development covers the entire biometric smartcard technology stack
from high level solution and system architectures, through secure biometric algorithms and software, down to the
lowest level sensor and silicon hardware.
Our differentiated approach to capacitive fingerprint sensing is based on an ultra-thin polymer substrate with
an embedded array of sense electrodes along with a small, full-custom silicon chip. This approach enables the
sensing area to be an order of magnitude larger than the typical silicon footprint, enabling the use of advanced
semiconductor technology and a high-volume assembly and test supply chain. Thanks to the combination of our
large area sensor and its highly efficient, on-board image, biometric and security processor, we are able to
achieve industry leading user experience and security.
This approach to capacitive fingerprint sensing contrasts with that of the conventional all-silicon capacitive
sensor which integrates its sensing pixels directly within the silicon chip itself. These devices typically only
support small sensing areas and limited functionality due to the use of older, less efficient semiconductor
technologies.
Our biometric algorithms and software run on both the sensor’s on-board biometric processor and within our
secure biometric software stack on the smartcard’s secure microcontroller (referred to as a Secure Element, or
SE). These algorithms and software implement a wide range of both proprietary and industry-standard
cryptographic security functions for privacy and tamper protection, as well as implementing critical biometric
enrollment, liveness detection and authentication features.
Our proprietary biometric algorithms are optimized to
achieve best-in-class performance, security, and user experience within the power and processing constraints of
the battery-free smartcard platform; they are differentiated by a multitude of patented features that ensure highly
accurate and reliable biometric performance across enrollment, authentication, and liveness detection.
Since the introduction of our first fingerprint sensor and software optimized for smartcard applications in
2016, we have systematically increased the scope of our offerings to the market to add increased levels of value
while enabling market adoption. This journey has included the development of biometric algorithms, a secure
biometric stack for Secure Element integration, and biometric card operating systems and applications.
IDEX Pay is a manufacturer-agnostic end-to-end biometric smartcard solution, providing all the necessary
biometric performance, functionality and security certifications required by payment schemes such as Mastercard
and VISA. It enables our customers and partners to take their own card manufacturing processes and complete a
fast-track certification by incorporating IDEX Pay technology and leveraging our certified smartcard reference
design into their own card manufacturing lines.
The IDEX Pay biometric solution is offered with a suite of enrollment methods to enable issuers to deploy
turnkey biometric activation and on-boarding solutions allowing user to enroll via their smartphone, with a
dedicated device at home or
in a branch.
IDEX Biometrics Software Platform solution strategy supporting multiple markets
Our biometrics technology platform for payments was specifically designed and purpose built for the card
form factor to enable a seamless user experience for contactless biometric payment transactions while
significantly increasing security.
The Mastercard certification of the IDEX Pay solution marked a major milestone in the development of our
Biometric Software Platform for cards. Over the last years we have focused our engineering resources on the
development of value-added systems and solutions. We have taken the foundation of our core patented,
biometric sensor technology and enriched it, through a full-stack software approach, with advanced algorithms,
high-assurance biometric card operating system and a host of card applications.
This has yielded a versatile, software-defined biometric card platform able to address multiple applications
across payment, access, cyber-security and digital ID markets. Taking this Software Platform approach also
IDEX Biometrics ASA Annual Report 2023
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enables IDEX to remain at the forefront of driving both user experience and security through the development
and deployment of new technologies such as seamless-activation and next generation liveness detection.
IDEX biometric software platform, IDEX Pay, and access, IDEX Access are built on the same biometric
platform, serving two different markets. The solution can be layered with different applets to provide new
functions and capabilities for supporting payment, crypto wallets, and other digital authentication solutions such
as digital access. The full card solution from IDEX Biometrics is complete with hardware (sensor, secure
element modules and all accompanying components) and software (OS, applets, SDKs). The OS developed by
IDEX allows our customers to provide their own customized applet for application specific functions.
The IDEX Pay platform enables payment schemes and partners to seamlessly integrate and scale
.
Using our proprietary remote solutions for fingerprint activation, cardholders can easily scan and activate their
fingerprint on their cards remotely without the need to visit a bank branch or ATM, and without communicating
sensitive biometric information to third parties. An encrypted template of the fingerprint is stored directly on the
card’s secure encryption chip. Therefore, sensitive biometric information is never communicated to third parties
or stored in a connected database. We are committed to investing in patents and other intellectual property
protection measures that ensure our products are, and remain, the leading solution in our target markets.
Sustainability
Providing secure authentication to the world through sustainable technology solutions, IDEX Biometrics is
embedding Environmental, Social and Governance (ESG) practices into its business and operating model.
Sustainability framework based on UN SDGs
IDEX Biometrics company strategy for sustainability reporting is based on the United Nations Sustainable
Development Goals (SDGs). This framework is part of our business and operating models, aimed at contributing
to secure value, trust and predictability for our operations.
Our ESG strategy is summarized under the umbrella of Sustainable Tech and is based on seven defined
development goals from UN’s Sustainable Development Goals, relating to business relevant environmental (E),
social (S), and corporate governance (G) areas, falling into five categories:
1.
Financial and Societal Inclusion:
We provide solutions that support financial, digital, and societal
inclusion
2.
Supply Chain Responsibility:
We manage our suppliers in a responsible and transparent manner
3.
Employee Wellbeing and Diversity:
We prioritize staff wellbeing, and a diverse and inclusive
culture
4.
Ethical Responsibility:
We operate with highest ethical standards
5.
Environmental Footprint:
We minimize our environmental footprint
The regulatory environment mandates IDEX Biometrics to apply EU Sustainable Finance Legislation;
taxonomy and Corporate Reporting Directive (CSRD), as of 2026. During 2023 evaluation of the reporting
requirements for the Sustainability Accounting Standards Board (SASB) and the Sustainable Finance Disclosure
Regulation (SFRD) was initiated, alongside a scope and materiality classification. The Euronext Sustainability
Reporting was implemented during the year.
I - Governance and policies
IDEX Biometrics has, as per our governance section in our annual report and as disclosed on our website,
during the year reviewed and reinforced governance and policies within the following areas: ethics policies and
training, employee and supplier code of contact, diversity and inclusion policy, whistleblowing policy, fair pay
and leave policies, and executive remuneration policy and reporting.
IDEX Biometrics gender targets have been reached for the board, with a balanced board of directors with 50%
women. The executive team is currently at 35% female representation, with continued efforts based on our
policies and targets.
IDEX Biometrics ASA Annual Report 2023
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II - Environmental impact
IDEX Biometrics sensor solutions are being managed in accordance with the Waste Electrical and Electronic
Equipment (WEEE) EU Directive. Significant effort has been made within the scope two supply chain
management, where audits were formalized and implemented. The results have been satisfactory with close to
90% of suppliers in scope being audited and 100% of the critical supplier KPIs being met. IDEX Biometrics also
passed all partner evaluations where we were subject to audits.
Our manufacturing partners are carefully selected based on their card material policy with the criteria of being
able to produce and transition towards r-PVC. Our metal card partners are considered based on their
environmental policies including recycling readiness.
To meet growing demand of sustainable enrollment solutions, a suite of alternatives such as mobile enrollment
and rechargeable sleeves have been developed, providing banks with solutions combining user friendliness with
environmental production and waste requirements.
III Social Impact
Inclusive payments are driven by regulations, financial development
,
and technology advancements. Biometric
payment cards are a direct response to EU regulations, driving inclusivity and non-dependency on smartphones
as per pan EU directives such as PSD3 and European Accessibility Act. Our bank partners across the globe are
leveraging IDEX Pay and IDEX Access to bridge mobile and cloud-based solutions with off-cloud secure
payment safeguarding the identity and access to digital payments to all parts of society. As expressed by Ali
Reza Iftekhar, Managing Director and CEO of Eastern Bank Limited when announcing their biometric payment
card launch in December 2023: ‘
We believe biometric payment cards will become the new payment standard,
supporting secure contactless payments, and ultimately bringing financial empowerment to all’.
With biometric
smart card solutions as an accelerating driver for financial inclusivity, a variety of socially impactful use cases
are currently in motion, making payments easier and driving social impact for visually- and memory impaired,
elderly and digitally excluded and supporting women with salary cards and programs to be economically in
control and financially empowered. Several initiatives began in 2023 and will continue to develop and scale in
2024 and onwards.
OPERATING AND FINANCIAL REVIEW
IDEX has established customer relationships with innovators and early adopters sharing our vision for the
potential of fingerprint authentication in smart card applications, and, over the last three years, we have
experienced increasing strategic momentum, successfully attracting new customers and increasing our revenue
year on year since 2020.
Since we released a reference design integrating our TrustedBio™ fingerprint authentication module and
the SLC38, the latest SE from Infineon Technologies, we have marketed this reference design to smart card
manufacturers.
IDEX recorded revenue of $4.1 million for 2023, $4.1 million for 2022, and $2.8 million for 2021. Product
revenue, as a percentage of total revenue, represented 99.8 %, 95.0 % and 99.9 % for 2023, 2022, and 2021,
respectively. Revenue associated with our early-adopting customer in the digital access market represented
48.2%, 85.4%, and 89.7% of our total revenue for 2023, 2022, and 2021, respectively.
We do not own or operate manufacturing facilities, but operate as a
fabless
manufacturer, outsourcing
manufacturing and product assembly activities. We currently rely on TSMC, the leading producer of
semiconductor wafers, as the sole source of wafers for our proprietary ASICs. We also rely on a limited number
of providers of semiconductor packaging, design, and test services, including Amkor Technology, Inc., and
Silicon Precision Industries Limited, both of which are leaders in outsourced semiconductor assembly and test
services. Like many other companies in the electronics markets we experienced some disruptions in the supply
chain in 2022, which led us to order and hold relatively high values of raw materials and carry relatively large
quantities of finished goods with the aim that customer delivery schedules can be met. Following normalisation
of the supply situation in 2023, we expect to return to normal inventory levels by the end of 2024.
Variable costs are associated primarily with cost of materials, net of inventory change. Our operating cost
structure is largely fixed, reflecting our business model and strategic focus on development. Because we believe
the Company’s leadership in fingerprint authentication technologies is an important competitive differentiator,
we intend to maintain development activities to maintain this leadership.
IDEX Biometrics ASA Annual Report 2023
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We utilize a direct sales force and have customers around the world. We do not sell our products through
stocking distributors. Given the early-stage characteristics of the market segments we are targeting, including the
extended and unpredictable sales cycles frequently associated with marketing new and innovative technology-
based products, we expanded our marketing and sales staff in 2021-2022 and maintained the activity level in
2023.
As a Norwegian public company, with Ordinary Shares listed on the Oslo Børs, and an SEC registrant,
with ADSs listed on Nasdaq Capital Markets until August 2023, we were required to comply with two sets of
applicable laws, rules, and regulations. Recognising that US investors generally traded the IDEX share on Oslo
Børs, leading to small trading volume on Nasdaq, the listing on Nasdaq was voluntarily discontinued in order to
streamline internal workflows and save operating expenses.
Our largest expenses are associated with staff costs. Our total staff, consisting of employees and individual
contractors located in countries in which we do not have operations, totaled 93, 99, and 111 as of December 31,
2023, 2022, and 2021, respectively. As of December 31, 2023, 20 were assigned to our head office in Oslo, 35
were assigned to our two offices in the United States, 33 were assigned to our office in the United Kingdom, and
five were assigned to our offices in China. We expect to reduce staff in the first half of 2024 with the aim to
reach operating costs below $4 million per quarter.
The Company continues to focus on reducing expenses and as such in March 2024 provided notice to
about 25 employees and or contractors. The Company is also consolidating the majority of its engineering
functions to Europe and closing two engineering facilities in the US. These actions are part of the plan to reduce
operating expense level below $4 million per quarter. All current actions are expected to be completed by the end
of the second quarter of 2024. The Company does not expect any significant restructuring costs.
Revenue
Revenue in 2023 was $4.1 million, consisting of $4.1 million of revenue from product sales and $8
thousand from services. The increase in product sales of $0.2 million from 2022 to 2023, representing an annual
increase of 6%, is associated with growth in sales to customers in the card market, while sales to the customized
digital access solution were lower than in the previous year. Service revenue is a minor element of customer
engagement. Our two largest customers represented 47% and 20%, respectively,
of total revenue for the year.
We aim to increase shipments of our TrustedBio modules through 2024. Such shipments are expected to
contribute to important diversification of our customer base. We also expect that shipments to the access market
will increase in 2024.
Revenue in 2022 was $4.1 million consisting of $3.9 million of revenue from product sales, and $203
thousand amount of revenue from services. Our two largest customers represented 48% and 25%, respectively, of
total revenue for the year.
Revenue in 2021 was $2.8 million, consisting of revenue from product sales, and a negligible amount of
revenue from services, associated with the completion of development of a customized digital access solution to
an existing customer. As such, this single customer represented approximately 85% of our revenue for 2021. Our
second largest customer represented approximately 9% of total revenue for the year.
We categorize origin of revenue based on the billing addresses of our deliveries. Certain customers may
request delivery to other countries than the customer's domicile. Customers' contract manufacturers may place
orders with us under the terms of the customer's contract. We are potentially exposed to the risks associated with
the countries to which delivery is requested and in countries where the contract manufacturers are domiciled
(e.g., risks associated with customs delays and other logistical delays).
Cost of materials, net of inventory change
Cost of materials, net of inventory change, rose 20% from 2022 to 2023, to $3.9 million, reflecting the 6%
increase for the year in product revenue and a one-time inventory write-off for end-of-life products. For 2022,
the figure was $3.2 million, a sequential increase of 159%, reflecting a 37% increase for the year in product
revenue. For 2021, services represented 7% of total revenue, in 2022 and 2023 almost nil. Because we present
our Consolidated Financial Statements reflecting the nature of expenses, the costs of personnel delivering
engineering services associated with services revenue are not included in Cost of materials, net of inventory
change.
Certain costs typically associated with manufacturing and manufacturing overhead, such as personnel costs
and depreciation charges, are excluded from Cost of materials, net of inventory change, given the presentation of
IDEX Biometrics ASA Annual Report 2023
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operating expenses based on the nature of expenses rather than by function. These excluded costs are not
material. Because of our presentation of operating expenses based on the nature of expenses, we do not present in
our Consolidated Statements of Profit and Loss a line representing “gross margin”. We assess product-level
profitability by calculating a
proxy
gross margin based on subtraction of Cost of materials, net of inventory
change, from revenue derived from product sales. Under IFRS, the gross margin and ratio figures are alternative
performance measures (“APMs”). In 2023, such a product gross margin to product revenue was 5% . For 2022,
and 2021, the product gross margins were 17% and 56% respectively. The declining gross margin ratios reflect
sequentially higher shipment volumes and shifts in product mix. In 2022 and 2023, the margin was additionally
adversely impacted by several factors: higher component prices have not yet been passed on to customers,
manufacturing costs have not yet achieved high-volume level, and write-off of inventory of discontinued
products.
Compensation and benefits
Compensation and benefits expenses include, for all departments and activities, also cost of share-based
remuneration.
Compensation and benefits expenses for 2023 were $14.3 million, as compared to $19.2 million for 2022,
a decrease of $4.9 million or 26%, reflecting a reduction in number of employees, a lower level of share-based
compensation costs and reduction of variable incentives. Compensation and benefits expenses for 2021 were
$21.1 million. The decrease from 2021 to 2022 was due to a reduction in number of employees, and a lower level
of share-based compensation costs.
The year-end numbers of employees for 2023, 2022, and 2021 were 69, 82, and 93, respectively, reflecting
staff reductions and attrition in engineering during the three years and the expansion of our marketing and sales
team during 2021 and 2022. We expect staffing levels to be reduced in the first half of 2024 in order to reduce
operating expenses.
For more information regarding compensation and the composition of our staff, see Note 5 to our
Consolidated Financial Statements.
Research and development
Research and development expenses are presented on a net basis, reflecting the recognised government
grants. We regularly apply for and receive grants under government programs, in Norway and the United
Kingdom, supporting research and development activities.
Research and development expenses include the cost of individual contractors assigned to engineering
roles. As of December 31, 2023, December 31, 2022, and December 31, 2021, compensation for six, six, and
eight individual contractors, respectively, were included in Research and development expenses.
In 2023, research and development expenses were $2.4 million, reflecting gross expenses of $3.5 million,
offset by government grants of $1.1 million. In 2022, research and development expenses were $3.2 million,
reflecting gross expenses of $4.0 million, offset by government grants of $0.7 million. In 2021, research and
development expenses were $2.7 million, reflecting gross expenses of $3.4 million, offset by government grants
of $0.7 million.
The variations in gross research and development costs between the years reflect primarily the use of third-
party service providers for outsourced engineering activities, particularly related to ASIC development and
initiation of fabrication. Variances in the values of government grants approved reflect the amount of qualifying
projects and expenses in the respective years.
For 2023, we have focused our research and development activities on a narrower range of priorities
associated with near-term product introduction objectives. Going forward we expect gross expenses associated
with these activities will be lower than gross expenses incurred in 2023.
Other operating expenses
This category consists of costs associated with our marketing and sales activities and costs associated with
administrative activities, including external services related to these functions.
Other operating expenses in 2023, were $8.7 million, as compared to $8.4 million in 2022, an increase of
$0.3 million or 4%. Other operating expenses in 2021 were $7.3.
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The costs of individual contractors assigned to such roles are included in marketing and sales expenses.
The number of individual contractors in marketing and sales roles expanded to eleven as of December 31, 2023,
up from nine at the end of
2022 with the continued focus on strategic growth markets in Asia.
Other operating expenses increased significantly from 2020 to 2021 and into 2022 also because of higher
professional services fees associated with the Company’s listing of ADSs on the Nasdaq during the first quarter
of 2021, as well as the related expanded scope of regulatory compliance and investor relations. Expanded
liability insurance coverage for our Directors and Executive Officers caused insurance costs to rise significantly
from 2020 to the following years. Following the voluntary delisting from Nasdaq Capital Markets in July 2023,
we expect these expenses to be reduced in 2024.
Finance income and Finance cost
Finance income includes interest received on bank balances, the net gain associated with aggregated
foreign exchange translation adjustments in the period, and upward adjustments of the fair values of financial
assets or liabilities. Finance cost includes interest expenses on lease liabilities and the effective interest on the
convertible debt, and the net loss associated with aggregated foreign exchange translation adjustments for the
period, and downward revisions to the recorded fair values of financial assets or liabilities. The valuation change
on the embedded derivative in the convertible loan, is credited/expensed to finance income and cost as
applicable.
In 2023, Finance income totaled $842 thousand, consisting primarily of interest income on our bank
deposits. Finance expense was $0.6 million consisting primarily of the net amount of losses associated with
foreign exchange translation adjustments. The interest expense for the convertible loan at year end was $21
thousand, while the gain on the embedded derivative was $87 thousand.
In 2022 and 2021, Finance income of $97 thousand and $11 thousand, respectively, consisted primarily of
interest income, while Finance cost in those years, $1.4 million and $1.1 million, respectively, were net of
foreign exchange translation losses.
Income tax expense (benefit)
The provision for income tax presented in the Consolidated Statements of Profit and Loss represents the
sum of payable taxes and changes in deferred tax. Payable taxes represents the sum of income tax expense
(benefit) for our taxable entities. Income tax expense (benefit) for each entity is calculated using the income tax
rates of the tax jurisdiction in which it operates.
Changes in deferred tax represent the periodic reconciliation of differences between financial reporting
values and tax reporting values. The Company does not capitalize any deferred tax asset. Hence, any potential
gain from increase in deferred tax asset is not recognized.
For further details of tax calculations, see Note 9 to
our Consolidated Financial Statements.
In the years 2023, 2022, and 2021, the provision for income tax presented in the Consolidated Statements
of Profit and Loss was a benefit of $16 thousand, a benefit of $36 thousand and an expense of $90 thousand.
During the years 2023, 2022 and 2021, the parent company did not record or pay income taxes in Norway.
Net loss for the year
Net loss for the years 2023, 2022, and 2021 was $26.6 million, $32.7 million, and $32.6 million,
respectively.
On a per share basis for these three years, based on the shares outstanding after the 5:1 consolidation
(reverse split) of shares effective on record date January 10, 2024, these losses were $0.11, $0.16, and $0.18 per
share, respectively. Pursuant to IAS 33
Earnings per Share
, these loss per share figures are the same on a basic
and fully-diluted basis. Because the Company has recorded a loss, loss per share on a fully-diluted basis excludes
any Ordinary Shares issuable upon exercise of outstanding subscription rights, as doing so, given the loss, would
be anti-dilutive (i.e., reduce loss per share).
Liquidity and Capital Resources
Since our establishment, we have incurred significant operating losses and negative cash flows. We
anticipate we will continue to incur operating losses and consume cash at least through 2024.
IDEX Biometrics ASA Annual Report 2023
Report from the Board of Directors
12
We expect our revenue for 2024 will be higher than the level in 2023. We expect shipments of our
TrustedBio modules will expand through 2024. We aim to improve product-level profitability in 2024 compared
to 2023.
IDEX Biometrics completed one private placement transaction in the second quarter of 2023 and another
one in the fourth quarter of 2023. We also entered into a convertible loan agreement in December 2023 which
generated $8.6 million net of expenses
As of December 31, 2023, we had cash and cash equivalents of $11.4 million, representing approximately
45% of total assets.
We have no other debt to banks or financial lenders than the convertible loan that was entered into in 2023.
Other financing commitments are limited to the lease agreements we have entered into associated with our office
and lab facilities.
Cash Flows
We present our Consolidated Statements of Cash Flow following the indirect method.
Net cash flow used in operating activities
During 2023, operating activities consumed cash of $27.0 million, primarily as a consequence of our net
loss before tax of $26.6 million, and a net working capital decrease of $3.3 million, partially offset by non-cash
charges of $2.9 million included in the net loss for the year.
Operating activities during 2022 consumed cash of $31.9 million, primarily as a result of our net loss
before tax of $32.7 million and a net working capital decrease of $2.3 million partially offset by non-cash
charges of $4.1 million included in net loss for the year.
Operating activities during 2021 consumed cash of $27.5 million primarily as a result of our net loss
before tax of $32.5 million and a net working capital decrease of $0.1 million, partially offset by non-cash
charges of $4.6 million included in net loss for the year.
Net cash flow used in investing activities
During the year ended December 31, 2023, investing activities consumed cash of $4 thousand reflecting
the use of $243 thousand for capital expenditures for engineering equipment, partially offset by the receipt of
$254 thousand of interest income associated with higher interest rates for the period.
Investing activities during 2022 consumed cash of $160 thousand, reflecting the use of $267 thousand for
capital expenditures for engineering equipment, partially offset by $97 thousand interest income.
Investing activities during 2021 consumed cash of $143 thousand, reflecting the use of $141 thousand for
capital expenditures for engineering equipment.
Net cash flow provided by financing activities
During the year ended December 31, 2023, share issuance generated net cash of $14.3 million, which
included the proceeds from private placements of Ordinary Shares, as well as proceeds from share issuances
associated with our Employee Share Purchase Plan and the exercise of incentive subscription rights, partially
offset by reductions of lease liabilities totaling $671 thousand. In December 2023, IDEX Biometrics entered into
a convertible debt financing agreement with net cash received of $8.6 million.
Financing activities during 2022 generated cash of $14.0 million, which included the proceeds from a
private placement of Ordinary Shares, as well as proceeds from share issuances associated with our Employee
Share Purchase Plan and the exercise of incentive subscription rights, partially offset by reductions of lease
liabilities totaling $400 thousand.
Financing activities during 2021 generated cash of $54.1 million, which included the net proceeds from
two private placements of Ordinary Shares, as well as proceeds from share issuances associated with our
Employee Share Purchase Plan and the exercise of incentive subscription rights, partially offset by reductions of
lease liabilities totaling $844 thousand.
IDEX Biometrics ASA Annual Report 2023
Report from the Board of Directors
13
Operating and Capital Expenditure Requirements
We have not achieved profitability since our inception. While we expect our revenue for 2024 will be
higher than the revenue in 2023, we also expect to incur net losses and consume cash for the year. We aim to
reduce our operating expenses in 2024 to a level below $4 million per quarter.
We do not anticipate an increase in capital expenditures above the level incurred during 2023 and 2022.
We also are not planning to acquire intangible assets or have significant investment activities for the foreseeable
future.
Our future funding requirements will depend on many factors, including but not limited to:
•
the working capital requirements;
•
the gross margin earned on products sold;
•
the operating expenses of the Company;
Additional information on the operating and capital expenditure requirements is provided in the going
concern comment below.
Parent Company Financial Statements
The Financial Review above of the consolidated profit and loss statements, as well as the consolidated
statements of financial position, largely apply to the parent company itself. The parent company holds all
intellectual property rights. It is also the group’s party to all trade relations with manufacturing partners and
customers for the products and services offered by the Company. All revenues and cost of goods sold accrue in
the parent company. The subsidiaries provide development services, market facilitation services, supply-chain
and administrative services to IDEX Biometrics ASA and do not trade with external customers. The subsidiaries
are funded through a combination of equity and advances, as required.
Only two of the group’s 69 employees as of December 31, 2023, are employed in the parent company.
Hence, the parent has a small share of the group’s payroll expenses. The parent company purchases development
services from the subsidiaries, whose charges include the payroll cost of the development staff. Thus, the parent
company reports higher development costs than the consolidated group. The parent company purchases
marketing and other services from the subsidiaries, whose charges include the payroll cost of the staff
performing the service. In addition, most of the commercial team, who work and live in various countries where
IDEX does not have a subsidiary, are individual contractors to the parent company, and the cost is included in
Other operating expenses. Thus, the parent company reports higher Other operating expenses than the
consolidated group.
The short-term receivables from group companies are mainly from IDEX UK. IDEX UK carries its
development cost in order to qualify for SME research and development tax relief in the UK, and the parent
company has provided funding for the expenses. Other aspects of the parent company’s balance sheet are
covered by the comments for the consolidated balance sheet for the group.
Allocation of the Net Loss for the Year
The net loss for 2023 of the parent company IDEX Biometrics ASA was $25.1 million compared to a net
loss of $31.0 in 2022. The board proposes that the loss shall be added to Accumulated loss. $13 million of the
Share premium has been transferred to Capital reduction reserve to partly absorb Accumulated loss. The board
does not propose any dividend payments for 2023.
Going Concern
The going concern assumption has been applied in the preparation of the consolidated financial statements.
The going concern assumes the realization of assets and liquidation of liabilities in the normal course of business.
IDEX Biometrics has incurred significant operating losses and negative cash flows during the development
stage of the business. The accumulated losses, net of capital reduction reserve amounted to $29.5 million as of
December 31, 2023, and the net cash outflow amounted to $4.8 million after obtaining new equity and a loan
amounting to $22.9 million. Net equity amounted to $11.3 million and the balance sheet solvency, defined as
cash plus current receivables less current liabilities, amounted to $890 thousand on December 31, 2023. While
the Company has taken measures to significantly reduce operating expenses, it does not expect that its existing
cash will enable it to fund its operating expenses and capital expenditures requirements for the next twelve
IDEX Biometrics ASA Annual Report 2023
Report from the Board of Directors
14
months. The Company is exploring further options to fund its commercialization efforts. 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, we monitor liquidity and the board is prepared to take appropriate measures if and
when required. We have been successful in the past with implementing cost reductions and raising capital
through private placements of equity. Acknowledging the significant doubt,
the board has on balance concluded
that the conditions for the going concern assumption are met.
HEALTH AND SAFETY
Talented, highly-motivated contributors are important to executing the Company’s strategy. In order to
maintain our leadership position in fingerprint authentication in a highly competitive employment market,
attracting and retaining the best employees and individual contractors worldwide is a priority. Accordingly, we
offer compelling compensation and benefits, and seek to foster a culture of innovation in which personnel are
empowered to do (and are rewarded for) their best work. The board and management seek to create a working
environment that is pleasant, stimulating, safe and to the benefit of all employees. The working environment
complies with the existing rules and regulations. IDEX offers flexible working hours for all employees. The
board has not found reason to implement special measures.
As of December 31, 2023, the Company had 93 individuals on staff, consisting of 72 employees and 21
individual contractors (individual contractors typically reside in countries in which we do not have business
operations). Of this total, 20 were assigned to our Oslo office, 35 were assigned to our two offices in the United
States, 33 were assigned to our office in the United Kingdom, and five were assigned to our office in China.
Some of our staff serve on a part-time basis. We assess staffing needs based on a full-time equivalent
(“FTE”) basis. As of December 31, 2023, we had 69 FTE employees and 18 FTE individual contractors. Of this
total of 87 FTEs:
•
61 were engaged in engineering functions (hardware design, systems design, and software
development);
•
12 were engaged in marketing and sales functions;
•
seven were engaged in administrative and financial functions; and
•
seven were engaged in production planning and supply chain management.
None of our employees are represented by a labor union or covered by a collective bargaining agreement
and we have not experienced any work stoppages in 2023.
No employee has suffered work-related injury resulting in sick leave. No accidents or incidents involving
the assets of IDEX have occurred. The sick leave in the group was 1.6% in 2023, compared to 1.2% in 2022. Due
to the low number of employees, statistics for the parent company are not presented. The sick leave data are not
considered reason for concern.
IDEX practices equal opportunities in all aspects. All facilities at IDEX are equally well equipped for
females and males. Traditionally, fewer women than men have graduated in IDEX’s fields of work. The
management structure reflects the composition of the technical staff. The board has not taken any special
measures in these respects.
Our compensation program is designed to attract and reward talented individuals who possess the skills
necessary to support our business objectives, assist in the achievement of our strategic goals, and create long-
term value for our holders of our equity securities. We provide employees with compensation packages including
a competitive base salary and benefits, which may vary from country to country, such as life and health
insurance, supplemental insurance, paid time off, paid parental leave, and an Employee Share Purchase Plan
(suspended in 2024) in which eligible employee may participate. Generally (and subject to local laws), new
employees and individual contractors are awarded subscription rights for the purchase of the Company’s
Ordinary Shares. Staff members also generally are eligible to participate in an annual performance-based
variable compensation plan, as well as be eligible for periodic awards of subscription rights based on the
performance of the Company and that of the staff member. We believe a compensation program with the
IDEX Biometrics ASA Annual Report 2023
Report from the Board of Directors
15
appropriate balance of short- and long-term incentives aligns the interests of holders of our equity securities and
our personnel.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS
We acknowledge and embrace the importance of Environmental, Social, and Governance (“ESG”)
considerations in the development and execution of the Company’s strategy, which must be sustainable and
contribute to the well-being of the communities in which we operate.
Our values are set forth in our Code of Conduct and Code of Ethics (“the Code,” available on our website).
The Code states, “The purpose of the Company is to create value for the shareholders, while the business shall
also be to the benefit for the Company’s customers, staff, suppliers, other business relations and the society at
large.”
The Code also states, “IDEX makes every reasonable effort to secure a healthy, safe, and lawful work
environment, and that the Company complies with all applicable laws, rules, and regulations concerning
occupational health, safety, and environmental protection. The Company promotes equality and non-
discrimination, non-harassment, fairness, and ethical behavior. The Company offers a pleasant, well-equipped,
and safe work environment, maintains fair and balanced employment practices and equal employment
opportunity policies, and complies with all applicable labor laws. IDEX encourages and also expects similar
commitment from its suppliers, partners, and customers.”
As a
fabless
developer and supplier of high-technology products, we outsource all manufacturing
activities. We select manufacturing partners and other providers of products and services that follow responsible
practices in all ESG aspects. Our own operations do not have a significant impact on the natural environment,
and the end-products in which our fingerprint authentication solutions are used (e.g., PVC smart cards) can be
efficiently recycled. The Company is committed to minimizing use of energy, raw materials, water, and other
resources, and makes every reasonable effort to minimize the waste we generate. We have recycling programs in
place in all our facilities.
As set forth in our Code, we consider shareholders, staff, customers, business partners, authorities, and
society in general to be important stakeholders, with interests to be protected and served. We consider how we
interact with and treat our stakeholders to be the most efficient way we can have a meaningful impact on their
wellbeing. As such, IDEX is committed to fulfill its obligation to be a responsible member of society through the
conduct of its business in an ethical, socially-responsible, and transparent manner.
As of December 31, 2023, women represented 18% of our staff, and three departments are led by women.
The composition of our Board meets Norwegian statutory requirements, with three women among our seven
members.
ESG risks are not considered to be material to our financial statements.
We have not identified any such
risks that could have the potential to materially harm our business in a non-financial manner.
As our business grows, our operations and the elements of our ESG profile likely will evolve. When our
ESG profile evolves to include measurable and material matters, we will supply investors and other stakeholders
with decision-useful information regarding our ESG objectives and indicators of our progress toward those
objectives.
The current corporate governance review is included in the 2023 annual report to Norway and is also
available at the company’s website, https://www.idexbiometrics.com/about-idex/.
The Company will publish its annual due diligence review of the Company’s impact on human rights and
working conditions, pursuant to the Norwegian transparency act, by June 30, 2024. The review will be available
at the Company’s web site, https://www.idexbiometrics.com/.
MANAGEMENT REMUNERATION, DIRECTORS’ AND OFFICERS’ INSURANCE
The annual general meeting in 2021 resolved a policy for executive remuneration. The full policy is
available at the company’s website, https://www.idexbiometrics.com/about-idex/. The actual remuneration in
2023 has been disclosed in a note to the parent company financial statements. The executive remuneration report
will be presented to the 2024 annual general meeting in a separate document.
IDEX Biometrics ASA Annual Report 2023
Report from the Board of Directors
16
Since the company’s shares were admitted to listing on Oslo Børs, the company has had a conventional
Norway-based insurance policy covering directors’ and officers’ liability world wide, except for liabilities arising
from U.S. Securities Act. ADSs representing the company’s shares were listed on the Nasdaq Capital Market in
the United States from March 2021 to August 2024. The company and its directors and officers are subject to
incremental liability in the U.S. In order to attract and retain qualified individuals to the board and executive
management, the company maintains also a U.S.-based liability insurance with worldwide coverage to protect
directors and officers in the company from certain liabilities. The company has contractually obligated itself to
indemnify, and to advance expenses on behalf of, the directors and officers to the fullest extent permitted by
applicable Norwegian law so that they will serve the company free from undue concern. The U.S.-based
insurance and the indemnification agreements were authorized by the extraordinary general meeting of the
company on December 15, 2020. Subject to various terms and sub-limits, the total insured amount is up to NOK
50 million in the Norway-based policy and USD 5.0 million for liabilities exceeding USD 5.0 million or USD
10.0 million, as the case may be, in the U.S.-based policy.
OUTLOOK
2023 was a year of transformation as we continued to execute on our strategy to evolve IDEX Biometrics
from a component supplier into a biometric solution company. This year focused on laying the foundation for
biometric smart cards at scale. Bringing to market a suite of scalable enrollment solutions and working closely
with our manufacturing partners around the world getting them ready to launch solutions with IDEX Pay and
IDEX Access.
We introduced IDEX Pay, certified by Mastercard, and IDEX Access, further advancing our position as a
full solution company for biometric smart card manufacturers and partners. We are confident that IDEX Pay is
the key to unlocking the potential of this large market opportunity. We introduced IOS mobile enrollment, which
integrates seamlessly with the banks’ mobile banking app and supports banks overall digital strategies. Mobile
enrollment is a fundamental accelerator for scaling biometric payment cards. In addition to an excellent user
experience, the mobile-based enrollment solutions are further decreasing costs along with the continued
efficiency of the supply chain to enable scaled launches. The success of this strategy has led to an expanding
number of card manufacturing partners around the world who are in final stages of getting their Letters Of
Authorization (“LOA”). Early demand for biometric smart cards is coming from the premium payment card
segment and digital access solutions for multifactor authentication. Several card manufacturers and partners
across the globe are currently in the process of commercializing their biometric solutions, many of which are
based on IDEX Pay and IDEX Access.
Within the digital and physical access, the IDEX Access software platform supports the highest FIDO2
certification level, representing a product category quickly taking over as the de facto standard for digital access
control. Propelled by surging number of data breaches, costs and high-stake risks, cyber security and specifically
access control is quickly emerging as top priority for enterprises and governments. It is a dynamic and rapidly
evolving market and so is the landscape of solution providers. IDEX Biometrics has added multiple new
customers for digital and physical access during 2023, some with products just being released with prototypes
and others that are finalizing the preparations for launch. We anticipate multiple new initiatives in this space
throughout 2024.
With several of our manufacturing partners in the process of obtaining their certification, we anticipate our
partners worldwide to launch biometric payment and access authentication solutions in the coming quarters.
April 24, 2024
The board of directors of IDEX Biometrics ASA
/s/ Lawrence John Ciaccia
Lawrence John Ciaccia
Chair
/s/ Deborah Lee Davis
Deborah Lee Davis
Board member
/s/ Annika Olsson
Annika Olsson
Board member
/s/ Morten Opstad
Morten Opstad
Board member
/s/ Adriana Saitta
Adriana Saitta
Board member
/s/ Stephen Andrew Skaggs
Stephen Andrew Skaggs
Board member
/s/
Vincent Arthur Graziani
Vincent Arthur Graziani
CEO
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
17
CONSOLIDATED FINANCIAL STATEMENTS
IDEX Biometrics ASA
Consolidated Statements of Profit and Loss
($000s, except per share amounts)
Year Ended December 31,
Note
2023
2022
2021
Revenue:
Product
$
$
$
Service
Total revenue
4
Operating expenses:
Cost of materials, net of inventory change
Compensation and benefits
5
Research and development
6, 7
Other operating expenses
8, 25
Amortization and depreciation
11, 12,
13
Total operating expenses
Loss from operations
(26,847
)
(31,369
)
(31,350
)
Finance income
Finance cost
(639
)
(1,425
)
(1,123
)
Loss before tax
(26,644
)
(32,698
)
(32,462
)
Income tax expense (benefit)
9
(16
)
(36
)
Net loss for the year
$
(26,629
)
$
(32,662
)
$
(32,552
)
Loss per share, basic and diluted
10
$
(0.11
)
$
(0.16
)
$
(0.18
)
Consolidated Statements of Comprehensive Income ($000s)
Year Ended December 31,
Note
2023
2022
2021
Net loss for the year
$
(26,629
)
$
(32,662
)
$
(32,552
)
Other comprehensive income that may be reclassified to
profit (loss) in subsequent periods:
Foreign currency translation adjustment
(436
)
Total comprehensive income (loss) for the period (net of
tax)
$
(27,065
)
$
(31,981
)
$
(32,542
)
The accompanying notes are an integral part of these consolidated financial statements.
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
18
IDEX Biometrics ASA
Consolidated Statements of Financial Position ($000s)
Note
December 31,
2023
December 31,
2022
Assets
Non-current assets:
Goodwill
11
$
$
Intangible assets
11
Property, plant, and equipment
12
Right-of-use assets
13
Non-current receivables
Total non-current assets
Current assets:
Prepaid expenses
Inventory
19
Accounts receivable, other
14
Accounts receivable, trade
14
Cash and cash equivalents
20
Total current assets
Total assets
$
$
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
19
Equity and liabilities
Share capital (NOK 0.15 1,397,010,650
and 2022, respectively)
22
$
$
Share premium
Share-based payment reserve
Foreign currency translation effects
(12,068
)
(11,632
)
Capital reduction reserves
Accumulated loss
(330,030
)
(303,401
)
Total equity
Non-current liabilities:
Non-current lease liabilities
13, 16
Total non-current liabilities
Current liabilities:
Accounts payable
16
Current lease liabilities
13, 16
Public duties payable
Interest-bearing loans
17
Other current financial liabilities
17
Other current liabilities
16
Total current liabilities
Total liabilities
Total equity and liabilities
$
$
The accompanying notes are an integral part of these consolidated financial statements.
April 24, 2024
The board of directors of IDEX Biometrics ASA
/s/ Lawrence John Ciaccia
Lawrence John Ciaccia
Chair
/s/ Deborah Davis
Deborah Davis
Board member
/s/ Annika Olsson
Annika Olsson
Board member
/s/ Morten Opstad
Morten Opstad
Board member
/s/ Adriana Saitta
Adriana Saitta
Board member
/s/ Stephen A. Skaggs
Stephen A. Skaggs
Board member
/s/
Vincent Arthur Graziani
Vincent Arthur Graziani
CEO
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
20
IDEX Biometrics ASA
Consolidated Statements of Changes in Equity ($000s)
Share
capital
Share
premium
Share
based
payment
Foreign
currency
translation
effects
Capital
reduction
reserve *
Accumulated
loss *
Total
equity
Balance at December
31, 2020
$
$
$
$
(12,322
)
$
$
(238,187
)
$
Share issuance
Share-based
compensation
Net loss for the year
(32,552
)
(32,552
)
Transfer of share
premium
(46,000
)
Other comprehensive
income
Balance at December
31, 2021
$
$
$
$
(12,312
)
$
$
(270,739
)
$
Share issuance
Share-based
compensation
Net loss for the year
(32,662
)
(32,662
)
Transfer of share
premium
(18,000
)
Other comprehensive
income
Balance at December
31, 2022
$
$
$
$
(11,632
)
$
$
(303,401
)
$
Share issuance
Share-based
compensation
Net loss for the year
(26,629
)
(26,629
)
Transfer of share
premium
(13,000
)
Other comprehensive
income
(436
)
(436
)
Balance at December
31, 2023
$
$
$
$
(12,068
)
$
$
(330,030
)
$
*Refer also to Note 2: Basis of Preparation and to Note 15: Share Capital to the consolidated financial
statements.
The accompanying notes are an integral part of these consolidated financial statements.
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
21
IDEX Biometrics ASA
Consolidated Statements of Cash Flow ($000s)
Year Ended December 31,
Note
2023
2022
2021
Operating activities
Profit (loss) before tax
$
(26,644
)
$
(32,698
)
$
(32,462
)
Amortization and depreciation expense
11, 12,
13
Share-based compensation expense
23
(Increase) decrease in inventories
19
(1,937
)
(3,215
)
(375
)
(Increase) decrease in accounts receivable
14
(548
)
(314
)
Increase (decrease) in accounts payable
16
(852
)
Change in other working capital items
(899
)
Interest paid
(5
)
(33
)
(11
)
Taxes paid (received)
(372
)
Net cash flows from operating activities
(27,005
)
(31,370
)
(27,533
)
Investing activities
Purchases of property, plant, and equipment
12
(243
)
(267
)
(141
)
(Payment) collection of non-current receivables
(6
)
(13
)
Interest received
Net cash flows from investing activities
(160
)
(143
)
Financing Activities
Net proceeds from issuance of shares
22, 23
Proceeds from borrowings
17
Payment of principal portion of lease liabilities
(671
)
(400
)
(844
)
Net cash flows from financing activities
Net change in cash and cash equivalents
(4,776
)
(17,555
)
Effect of foreign exchange on cash balances
(80
)
(11
)
Opening cash and cash equivalents balance
Cash and cash equivalents at December 31
20
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
22
the design, development, and sale of fingerprint authentication solutions. The Company’s fingerprint
authentication solutions are used primarily in contactless smart cards, including financial payment cards, access
Ordinary Shares, representing the only class of equity securities issued and outstanding, are listed on the Oslo
Børs, the stock exchange in Oslo, Norway, under the ticker symbol IDEX.
IDEX Biometrics ASA’s American Depositary Shares (“ADSs’) representing its ordinary shares, were listed on
Nasdaq Capital Market until a voluntary delisting was effective on August 10, 2023. The delisting concerned
only the ADSs listed on Nasdaq. There was no impact on the ordinary shares listed on the Oslo Stock Exchange.
The ADS delisting had no impact on the Company’s accounting standards or disclosures to the Norwegian
financial market.
IDEX is comprised of the Norwegian parent company and its subsidiaries in the United States (IDEX Biometrics
Holding Company Inc. and IDEX Biometrics America Inc. (together, “IDEX America”)), the United Kingdom
(IDEX Biometrics UK Ltd. (“IDEX UK”)), and China (IDEX Electronics (Shanghai) Co., Ltd. (“IDEX China”)).
The parent company is the owner of all intellectual property of IDEX and is the contractual party to all customer
and manufacturing partner agreements. All sales are generated by the parent company, and the parent company is
the supplier to the customers. The subsidiaries provide various services to the parent company, mainly associated
"$"), and all amounts are rounded to the nearest thousand ($000), unless otherwise indicated.
The subtotals and
totals in some of the tables may not equal the sum of the amounts shown in the primary financial statements due
to rounding.
IDEX Biometrics ASA is the parent company in the IDEX group. The parent company's Financial Statements are
Significant Accounting Policies
Accounting policies that are significant to the Company’s results and financial position, in terms of the
materiality of the items to which the policy is applied, are discussed below.
The significant accounting policies described in these consolidated financial statements have been applied
consistently for all periods presented, except as otherwise noted in the disclosure related to the impact of policy
changes following the adoption of new accounting standards and voluntary changes in 2023.
The statements of profit and loss are presented by the nature of expense. The cash flow statements are presented
by the indirect method.
There have not been any changes to the Company's accounting policies applied in the financial statements for
2023 compared to those applied in the annual financial statements for 2022.
The going concern assumption has been applied in the preparation of the consolidated financial statements. The
going concern assumes the realization of assets and satisfaction of liabilities in the normal course of business.
IDEX 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 accumulated losses, net of capital reduction
reserve amounted to $29.5 million as of December 31, 2023, and the net cash outflow in 2023 amounted to $4.8
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
23
million after obtaining new equity and a loan amounting to $22.9 million combined. Net equity amounted to
$11.3 million, and the balance sheet solvency, defined as cash plus current receivables less current liabilities,
amounted to $890 thousand on December 31, 2023. While the Company has taken measures to significantly
reduce operating expenses, it does not expect that its existing cash will enable it to fund its operating expenses
and capital expenditures requirements for the next twelve months. The Company is exploring further options to
fund its commercialization efforts. 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 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 has been successful in the past with implementing cost reductions and raising capital
through private placements of equity. Acknowledging the significant doubt identified above, the Board has on
The Company’s Consolidated Financial Statements are comprised of the financial statements of IDEX
Biometrics ASA and its wholly-owned subsidiaries, with all intercompany transactions, balances, revenue,
Equity is comprised of the following:
•
Share Capital: comprised of the nominal amount of the parent’s ordinary shares. This capital is not
distributable in the form of dividends under the Norwegian Public Limited Liability Companies Act
(the “PLLC Act”) (refer to Note 15 – Share Capital and Share Premium).
•
Share Premium: comprised of: (1) the amount received attributable to Share Capital, in excess of the
nominal amount of shares issued by the parent company, reduced by; (2) issuance costs directly
attributable to the capital increase and; (3) transfers into the Capital Reduction Reserve, (refer to
Note 22 – Share Capital and Share Premium).
•
Share Based Payment Reserve: comprised of Share-based payment reserve.
•
Foreign Currency Translation Effects: comprised of Currency Translation Difference.
•
Capital Reduction Reserve: comprised of the absorption of accumulated losses of the Company by
the Share Premium, as resolved by the Board of Directors (refer to Note 15 – Share Capital and
Share Premium).
•
Cost of materials, net of inventory change, consists of the costs of raw materials, components, contract
manufacturing, and transportation associated with production and storage of products for sale to customers, net
The Company’s Financial Statements are presented in USD. The functional currency of the parent company is
USD, while the functional currency for each foreign subsidiary is its local currency. Transactions involving the
translation to the respective functional currencies of values denominated in foreign currencies are classified as
monetary or non-monetary, thereby defining the measurement and recognition of foreign currency translation
Monetary assets and liabilities generally have values fixed by explicit or implicit contract. Examples include
bank deposits, debt, accounts receivable, and accounts payable. Monetary assets and liabilities subject to foreign
currency adjustments are measured on the initial transaction date using the exchange rates in effect at that date.
At each subsequent reporting date and through the date of settlement (i.e., payment) or derecognition, such
monetary assets and liabilities are remeasured using the then-current exchange rate, and any foreign currency
translation gains or losses are recorded by the entity within Financial income or Financial cost.
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
24
Non-monetary assets and liabilities generally are those assets and liabilities for which the recorded values are not
subject to contractual or other formal definitions (i.e., those assets and liabilities that are not classified as
monetary assets or liabilities). Non-monetary assets and liabilities are not subject to foreign currency adjustments
at the entity level.
Assets and liabilities in entities with another functional currency than the USD, including goodwill and fair value
adjustments, if any, are translated into USD using the exchange rates in effect at the reporting date of the
Consolidated Statements of Financial Position. Amounts reported on the Consolidated Statements of Profit and
Loss are translated to USD using the average exchange rates in effect for the reporting period. Significant, large
transactions may be translated using the rate at the transaction date.
Foreign exchange differences arising on translation from functional currency to presentation currency are
reported in Other comprehensive income (“OCI”). Translation gains or losses previously recognized in OCI are
Expenses in this category consist primarily of the costs of services and materials used in engineering activities
and certain outsourced development activities. Payroll costs related to research and development employees are
classified as Compensation and benefit expenses, not as research and development expenses, on the Consolidated
Statement of Profit and Loss. However, the compensation paid to individual contractors serving in engineering
roles is included in Research and development expenses.
Research costs are expensed as incurred. Development expenses that do not meet the criteria of capitalization are
expensed as incurred. Development expenses are capitalized when (i) the technical feasibility of completing
development has been demonstrated, (ii) the costs of development can be measured reliably, (iii) it is probable
that IDEX will realize future economic benefits from the asset, and (iv) IDEX has committed to complete the
development. Once the development is complete and the resulting asset is available for use, the capitalized
development cost (i.e., the asset value) is amortized over its expected useful life.
projects. The recognized value of government grants applicable to research and development activities are
credited against research and development costs. Generally, the applications or claims for such grants are
submitted after completion of the qualifying activities. When it is realistic that the application or claim will be
successful and the amount can be determined reliably, the Company credit the value of the grant against research
and development expenses for that reporting period. Due to the timing difference between the completion of the
qualifying activities, the approval of our grant application or claim, and the receipt of the funds associated with
The terms of the convertible debt agreements are evaluated to determine whether the instruments contain both
liability and equity components, in which case the instrument is a compound instrument. Convertible debt
agreements are evaluated to determine whether they contain embedded derivatives, in which case the instrument
is a hybrid financial instrument. Based on evaluation of the terms in our convertible debt agreements, the
Company determined that the conversion option was an embedded derivative and, therefore, the convertible debt
was accounted for as a hybrid financial instrument. The Company has elected to assign transaction costs entirely
to the financial liability host (principal).
Estimation methods are used to determine the fair value of embedded derivatives included in hybrid financial
instruments. The determination of the effective interest used for the host contracts of hybrid financial instruments
and the liability components of compound financial instruments is dependent on the outcome of such
estimations. Evaluating the reasonableness of these estimations and the assumptions and inputs used in the
Finance income and finance cost consists of interest income, interest expense, valuation change of the embedded
derivative, and net foreign exchange losses (gains) arising from settlement of obligations denominated in foreign
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
25
The application of certain accounting standards requires management to make accounting judgments, estimates
and assumptions affecting reported amounts of assets, liabilities, income and expenses.
The main areas where the Company has made significant judgments when applying the accounting policies and
that have the most material effect on the amounts recognized in the financial statements have been described in
the following notes:
•
Revenue Recognition
•
Leases
Estimates used in the preparation of these financial statements are prepared based on bespoke models, while the
assumptions on which the estimates are based rely on historical experience and other factors that management
assesses to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates
and underlying assumptions are reviewed on an ongoing basis.
The most important matters in understanding the key sources of estimation uncertainty are described in each of
the following notes:
•
Intangible
assets
•
Inventory
•
Accounts receivable, trade
•
Share-based compensation
•
Embedded derivative in convertible debt
IDEX’s patents and other intellectual property rights created by the Company are capitalized only when they
satisfy the criteria for capitalization. No development costs have been capitalized in 2023, 2022, or 2021.
Acquired intangible assets are capitalized initially at fair value, normally the purchase price. Intangible assets are
amortized over their useful economic lives. An assessment of impairment losses on non-current assets is made
when there is an indication of a decrease in value. An intangible asset’s carrying amount is compared to the
asset’s recoverable amount. The recoverable amount is the higher of the fair value (less costs to sell to an
independent third party) or the calculated value based on the discounted estimated cash flow from continued use.
The estimate is based on judgments of when and whether there will be an economic benefit from the asset, and
assumptions about the amounts. As of December 31, 2023, the Company determined that there were no
Inventories consist of raw materials, work in process, and finished goods. Inventory is recorded at the lower of
cost and net realizable value. Impairment is assessed quarterly, based on management’s judgment of when and
whether the inventory may be sold, and assumptions about the sales price and selling costs. The estimate is
uncertain, because timing of sales are subject to many risks. Selling prices are uncertain in the market for IDEX’s
products. Reselling components or other commodity raw materials at any value may not be easily achieved, and
elements of work in progress and finished goods, if impaired (i.e., considered excess or obsolete inventory),
Trade accounts receivable consist of invoiced amounts owed by customers, net of minor prepayments received
and allowances for doubtful accounts. Regarding allowances for doubtful accounts, see section
Credit and
Liquidity Risk
IDEX estimates the fair value of incentive subscription rights (“SRs”) at the grant date by using the
Black-Scholes option pricing model, and record share-based remuneration cost over the vesting period of the
SRs. The valuation is based on share price and exercise price, share price volatility, interest rates, and the
expected term of the SRs, based on historical data. The parameters may in the future deviate from the historical
observations. The accrued cost of the employment taxes associated with the earned intrinsic value of the SRs will
vary with share price, which is a highly unpredictable parameter.
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
26
IDEX estimates the fair value of the Employee Share Purchase Plan (“ESPP”) at the grant date, i.e. the first date
of the contribution period, by using the Black-Scholes option pricing model. The share-based compensation is
expensed over the contribution period. The valuation is based on share price and exercise price, share price
volatility, interest rates, and the term of the contribution period. The parameters may in the future deviate from
Estimation methods are used to determine the fair value of the embedded derivative included in the convertible
debt. The effective interest used for the host contract and the embedded derivative is dependent on the
estimations. The estimations and the assumptions and inputs used in the valuation methods at original
recognition of the host contract and the embedded derivative, as well as revised valuation of the embedded
derivative at each balance sheet date. A significant amount of judgment is exercised in determining the inputs
Amendments to IAS 1 and IFRS Practice statement 2
–Replacing Significant accounting policies with Material
accounting policies — The amendments replace the requirement to disclose the ‘significant’ accounting policies
with a requirement to disclose the ‘material’ accounting policies. The amendments to IAS 1 are applicable for
annual periods beginning on or after 1 January 2023. The Company has revised the accounting policy
information disclosures for 2023 to become consistent with the amended IAS 1.
Other amendments to standards or interpretations of standards effective as of January 1, 2023 and adopted by the
Company were not material to the Company’s financial statements upon adoption.
Other standards, amendments to standards, and interpretations of standards, issued but not yet effective, are
either not expected to materially impact, or are not expected to be relevant to, the Company’s financial
As of December 31, 2023, the possible future financial impact to the Company resulting from climate change is
uncertain. Given the nature of the Company’s operations and products, the Company believes any such impact
not to be material. The Company is monitoring current and expected climate change effects, as well as measures
considered or implemented by government and industry, in order to minimize any negative impact and to take
risks
IDEX emphasizes capital preservation and liquidity in managing its cash, which is held in bank accounts, which
are denominated in USD, NOK, GBP, and CNY.
Short-term capital requirements include funding operating losses and supporting net working capital
requirements. Reflecting the Company’s operating model, investments in property, plant, and equipment are
modest, and have been funded with proceeds from issuance of
Ordinary Shares. IDEX has been funded through
the issuance of Ordinary Shares since it was established in 1996. In 2023, the parent company took up a
convertible loan.
The current cash position and financial forecasts indicate that in 2024, the Company will need significant
funding in the form of equity injection, debt or other. The Board is considering various funding options and
believes that the Company will obtain further financing for its planned operation, growth and working capital
requirements. Refer to the section above regarding going concern.
As of December 31, 2023, IDEX had cash of $11.4 million. The Company’s exposure to interest rate sensitivity
is influenced primarily by changes in the underlying bank interest rates in the various currencies. IDEX’s cash is
held in bank accounts, all of which are considered highly liquid. Accordingly, an immediate one percentage point
change in interest rates would not have a material effect on the fair market value the Company’s cash accounts.
The convertible loan is the only debt to financial lenders. The Company is not exposed interest rate associated
with variable rate debt because the interest rate is fixed for the duration of the loan.
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
27
When calculating the recorded and carrying values of leases, interest rates are a variable in the calculations of
these values, but do not represent a meaningful level of risk of material changes in these values.
Currency Risk
The Company’s trading transactions are denominated in U.S. Dollars (“USD”), which is the Company’s
consolidation and presentation currency. The functional currency of the parent company, IDEX Biometrics ASA,
is USD, while the functional currencies of the subsidiaries are the currency in their respective domiciles. The
Company incurs a portion of its expenses in currencies other than the USD, primarily British Pounds (“GBP”),
Norwegian Krone (“NOK”), Euro ("EUR"), and Chinese Yuan (“CNY”). The Company's cost level is exposed to
changes in the rates of exchange between the USD and these currencies. IDEX seeks to minimize this exposure
by maintaining currency cash balances at targeted levels appropriate to meet foreseeable short-term expenses in
these other currencies. The remaining cash balance is held in USD-denominated accounts. The Company does
not use forward exchange contracts or other hedging strategies to manage exchange rate exposure.
Each subsidiary's assets and liabilities are naturally hedged by being held and denominated in the functional
currency of the subsidiary.
In addition to USD, the parent company holds bank deposits in NOK and GBP; receivables in NOK, GBP and
EUR; and payables in NOK, GBP and EUR, and convertible debt in NOK. A 10% change in the relative value of
USD to NOK would have had a corresponding effect on the carrying value of the Company’s debt of
approximately $800 thousand at December 31, 2023, and was not material at December 31, 2022. A 10% change
in the value of USD to CNY or EUR was not material at December 31, 2023 or December 31, 2022l. A 10%
increase in the value of the GBP relative to the USD would have had a corresponding effect on the carrying value
of the net financial assets and liabilities in foreign currencies at December 31, 2023 of approximately $980
IDEX extends customary credit terms to customers, reflecting its assessment of their individual creditworthiness.
The Company does not believe there is significant credit risk at large associated with its Accounts receivable,
trade, balance as of December 31, 2023. (See Note 14 – Accounts receivable.) A general reserve for doubtful
accounts has not been recognized. If revenue continues to increase, receivable balances from a broadening
customer base will increase, potentially increasing the credit risk at large. Based on review of all customer
accounts as of December 31, 2023, a specific reserve for possible loss has been recognized.
The Company believes it faces minimal risk on its cash position, as IDEX’s cash is on deposit with reputable,
regulated banks.
The Company aims to increase revenue generation through sales of its products; however, it does not currently
have the cash resources to fully meet its operating commitments for the twelve months following the date of the
Revenue is recognized when control of the promised goods or services is transferred to a customer, in an amount
reflecting the consideration the Company expects to be entitled to in exchange for those goods or services. Sales,
value added, and other taxes incurred concurrent with revenue producing activities are excluded from revenue.
Shipping and handling charges to customers are included in revenue, and costs incurred associated with
outbound freight after control over a product has transferred to a customer are accounted for as revenue
reductions.
The Company’s primary source of revenue comes from the sale of its products, which principally are biometric
fingerprint modules consisting of a sensor and an ASIC in a single package. Each module also contains
embedded software. The hardware and the embedded software are interdependent in that each needs the other to
provide the intended fingerprint authentication function to the customer. The primary customers for the
Company’s products are smart card manufacturers and similar solution integrators. The Company currently does
not use distributors for the resale of its products.
The Company may license its intellectual property under right to use licenses, in which royalties due to the
Company are based upon a percentage of the licensee’s sales and/or unit volumes. For the years 2023, 2022, and
2021, the Company recognized no revenue from licensing its intellectual property.
Certain contracts with customers contain multiple performance obligations, which typically may include a
combination of non-recurring engineering (“NRE”) services, prototype units, and production units. For these
contracts, if the individual performance obligations are distinct, they are accounted for separately. Generally, the
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
28
Company has determined the NRE services and prototype units represent one distinct performance obligation,
and the production units represent a separate distinct performance obligation. For such arrangements, revenue is
allocated to each performance obligation based on its relative standalone selling price, based on prices charged to
other customers or based on expected cost plus a customary profit margin. The Company generally recognizes
revenue for NRE services and prototype units at the point in time when a defined milestone under the
arrangement is completed and control is transferred to the customer, which is generally the shipment or delivery
of the prototype units.
The Company also recognizes revenue from contracts with customers associated with the delivery of certain
services, ranging from standalone NRE to advisory services. Generally, these contracts include a single
performance obligation (i.e., service element), and revenue is recognized upon the completion of the defined
service element and final acceptance by the customer of any project deliverable. However, revenue from services
may be recognized over time, if recognition of multiple service elements is based on completion of substantive
and results-based contractual milestones, and acknowledgement by the customer of such completion.
The Company does not have material obligations or reserves for warranties, returns, or customer refunds.
The Company does not have material obligations or reserves for warranties, returns, or customer refunds. There
IDEX manages its operations as a single segment for the purposes of assessing performance and making
operating decisions. IDEX operates as one operating segment, fingerprint imaging and authentication
technology. IDEX has determined that its chief operating decision maker is its Chief Executive Officer. The
Company’s chief operating decision maker reviews the Company’s financial information on an aggregated basis
for the purposes of allocating resources and assessing financial performance.
IDEX categorizes customers by geographic region utilizing the addresses to which the Company invoices its
products or services. The Company’s product and service revenue by geographic region is as follows:
| Year Ended December 31, | |||
($000s) | 2023 | 2022 | 2021 |
Product Revenue: | |||
Europe, Middle East, and Africa | $ 3,029 | $ 3,574 | $ 2,807 |
Americas | 975 | 252 | 0 |
Asia-Pacific | 126 | 63 | 30 |
Total product revenue | 4,131 | 3,889 | 2,837 |
Service Revenue: | |||
Europe, Middle East, and Africa | 2 | 10 | 3 |
Americas | — | 193 | 0 |
Asia-Pacific | 6 | 0 | — |
Total service revenue | 8 | 203 | 3 |
Total Revenue | $ 4,138 | $ 4,091 | $ 2,840 |
The Company’s revenue has in the past come from a limited number of customers. During 2023, the top two
customers accounted for approximately 47% and 20% of the Company’s revenue, respectively, and in 2022, the
top two customers accounted for 48% and 24% of revenue, respectively. In 2021, the top two customers
Compensation and benefits expenses consist of costs for direct employees of the Company. Compensation of
individual contractors is reported as Research and development expenses or Other operating expenses, as
applicable, based on the roles assigned to the individuals.
| Year Ended December 31, | |||
($000s) | 2023 | 2022 | 2021 |
Salary, payroll tax, benefits, other | $ 13,026 | $ 17,389 | $ 18,197 |
Share-based compensation | 1,280 | 1,824 | 2,910 |
Total | $ 14,305 | $ 19,213 | $ 21,107 |
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
29
full-time equivalents. Most of the contractors live and work in countries in which the Company does not have a
formal business presence.
December 31, 2023 | December 31, 2022 | December 31, 2021 | ||||
Employees | Contractors | Employees | Contractors | Employees | Contractors | |
Research and development | 53 | 5 | 64 | 6 | 77 | 8 |
Marketing and sales | 4 | 11 | 6 | 9 | 6 | 9 |
General and administrative | 5 | 2 | 5 | 2 | 8 | 1 |
Supply chain and distribution | 7 | — | 7 | - | 2 | — |
Total staff | 69 | 18 | 82 | 17 | 93 | 18 |
The average number of employees for the years 2023, 2022, and 2021 were 76, 90 and 95 full-time equivalents,
The Company provides health and other benefits to employees consistent with common practice in the countries
in which it operates. No such benefits are provided to individual contractors.
The parent company contributes to a pension insurance plan for all its Norwegian employees. The plan satisfies
the Norwegian mandatory service pension rules. The pension plan is a fully insured, defined contribution plan.
Employees of IDEX America may participate in a health, dental, and vision insurance plan. IDEX America also
offers employer-funded plans for life insurance, short-term disability, and long-term disability. IDEX America
does not offer or plan to offer any pension plans, except for a 401(k) defined-contribution plan. The Company
currently does not match participant contributions to this plan.
IDEX China contributes to the mandatory social security plans in China, including contribution of 21% of
eligible salary to each employee’s personal retirement fund.
IDEX UK contributes up to 6% of an employee participant’s base salary to IDEX UK’s pension plan, subject to
the employee contributing the same percentage through a salary reduction arrangement. The pension plan is a
fully insured, defined-contribution plan.
Share-based compensation includes non-cash expenses associated with the recognition of the costs of share-
based awards granted pursuant to the Company’s subscription rights plans and its employee share purchase plan
(“ESPP”). See Note 16.
In 2023 and 2022 key management consisted of the Chief Executive Officer (“CEO”), Chief Financial Officer
(“CFO”), Chief Technology Officer (“CTO”), and Chief Commercial Officer (“CCO”). In 2021, key
management consisted of the CEO, CFO, and CTO.
| Year Ended December 31, | |||
2023 | 2022 | 2021 | |
(in thousands) | |||
Compensation and short-term benefits | $ 1,487 | $ 1,362 | $ 1,425 |
Medical and similar benefits, contributions to pension schemes | 52 | 62 | 73 |
Share-based compensation | 221 | 271 | 443 |
Total compensation of key management | $ 1,760 | $ 1,695 | $ 1,941 |
Compensation and other short-term benefits, whether cash or in kind, are the amounts declared for tax purposes
for the respective years. Pension cost and share-based remuneration are expensed amounts in the respective
years. Gains on exercise of incentive subscription rights, if any, are not included. Employers' tax is not included.
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
30
The variable incentive pay paid in one year relate to achievements in the previous year. No officers exercised
incentive subscription rights in 2023, 2022, or 2021.
Key management held the following subscription rights to Ordinary Shares under the subscription rights
incentive plans with the following expiration dates and exercise prices:
Number outstanding as of December 31, | |||||
Exercise Price | |||||
Grant Date | Expiration Date | (NOK) | 2023 | 2022 | 2021 |
August 14, 2019 | May 9, 2024 | 8.25 | 327,800 | 327,800 | 327,800 |
February 26, 2020 | May 9, 2024 | 5.55 | 5,000,000 | 5,000,000 | 5,000,000 |
June 17, 2020 | May 15, 2025 | 8.55 | 1,125,000 | 1,125,000 | 1,125,000 |
April 20, 2021 | May 15, 2025 | 13.55 | 2,750,000 | ||
June 3, 2021 | May 12, 2026 | 11.90 | 2,000,000 | 2,000,000 | 2,000,000 |
August 11, 2021 | May 12, 2026 | 12.00 | 1,420,700 | 1,420,700 | 1,668,100 |
March 23, 2022 | May 12, 2026 | 10.40 | 836,900 | 836,900 | |
August 10, 2022 | May 12, 2027 | 5.90 | 1,631,000 | 1,631,000 | |
August 11, 2023 | May 23, 2028 | 3.40 | 3,761,800 | ||
November 8, 2023 | May 23, 2028 | 2.30 | 500,000 | ||
Total | 16,603,200 | 12,341,400 | 12,870,900 | ||
The table above reports the number of shares and other instruments as registered as of December 31, 2023, and
on earlier dates, i.e., before the 5:1 share consolidation (reverse split) taking effect on record date January 10,
2024. The incentive subscription rights plan has adjustment clauses so that the number of subscription rights and
the exercise prices are adjusted by the same ratio. See also notes 23 – Share-based compensation and 26 –
Research costs are expensed when incurred. Development costs are capitalized and held in the balance sheet only
if they satisfy the criteria for capitalization. The same applies to IDEX’s patents and other intellectual property
rights created by IDEX. IDEX has not capitalized any development costs in 2023, 2022 or 2021. Development
costs related to creation of intellectual property have been expensed when incurred.
Research and development expenses include the cost of independent contractors assigned to engineering roles.
Government grants recognized by the Company in support of research and development activities are credited
against research and development costs when it is realistic that the application or claim will be successful and the
amount can be determined reliably.
| Year Ended December 31, | |||
($000s) | 2023 | 2022 | 2021 |
Gross research and development expenses | $ 3,495 | $ 3,959 | $ 3,356 |
Government grants credited | (1,102 ) | (709 ) | (676 ) |
Net research and development expenses | $ 2,393 | $ 3,250 | $ 2,680 |
7. Government grants
| Year Ended December 31, | |||
($000s) | 2023 | 2022 | 2021 |
Norway | $ 480 | $ 312 | $ 538 |
United Kingdom | 622 | 397 | 138 |
Total | $ 1,102 | $ 709 | $ 676 |
The Norwegian SkatteFUNN is a government program supporting research and development activities in
Norway. Under the program, the Company, in its current loss position, is eligible for a cash grant in support of
approved projects, subject to meeting the requirements of the Research Council of Norway.
The Company’s IDEX UK subsidiary participates in a program by which the government of the United Kingdom
offers financial support for qualifying research and development activities of small and medium-sized
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
31
enterprises, SME R&D tax relief. Under the program, the Company, in its current loss position, is eligible for a
The following table sets out the aggregate fees related to professional services rendered by the Company’s
independent auditor, Ernst & Young AS (“EY”), for the calendar years 2023, 2022, and 2021:
| Year Ended December 31, | |||
($000s) | 2023 | 2022 | 2021 |
Audit services | $ 176 | $ 447 | $ 352 |
Audit-related services | 37 | 43 | 22 |
Tax services | 8 | 7 | 7 |
Other services | - | 4 | 24 |
$ 221 | $ 501 | $ 405 | |
Audit services
represents the fees for the audit that must be performed by EY in order to issue an opinion on the
Company’s consolidated financial statements and to issue reports on the Company’s statutory financial
statements. The definition also includes fees for certain other audit services, which are services only the
designated independent auditor reasonably can provide, such as the auditing of non-recurring transactions, the
application of new accounting policies, and limited reviews of quarterly financial results.
Audit-related services
represents fees for other assurance and related services provided by EY, but not limited to
those that only reasonably can be provided by EY, which are reasonably related to the performance of the audit.
Tax services
represent fees, approved by our Audit Committee, for tax services not related to the audit provided
by EY.
Other services
represent other fees, approved by our Audit Committee, for services not related to the audit
The Company is subject to income taxes in the jurisdictions in which it operates. The Company’s provision for
income taxes (i.e., expense (benefit)) is based on income tax rates in the tax jurisdictions in which it operates, tax
credits available in these jurisdictions, and reconciliation of differences between financial reporting values and
tax reporting values.
As of December 31, 2023, the Company has a tax loss carryforward balance in Norway of $271.7 million,
representing a potential deferred tax asset, if recognized and calculated at the current corporate tax rate of 22.0%,
of $59.7 million. The Company also has a tax loss carryforward balance in the United Kingdom of $4.5 million,
representing a potential deferred tax asset, if recognized and calculated at the current corporate tax rate of 19.0%,
of $0.9 million. The Company does not have a tax loss carryforward balance or a deferred tax liability in China.
In the United States, the Company expects returns of prepayments totaling $60 thousand.
Because the Company has concluded there is not sufficiently convincing evidence the Company will generate
sufficient taxable profit, against which the unused tax losses could be applied, the Company has not recognized
to date any deferred tax assets in its statement of financial position, consistent with IFRS standards. A deferred
tax asset will be recognized when the Company determines it is more likely than not it will have sufficient future
taxable profit to apply the tax loss carryforward against future income taxes.
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
32
The major components of income tax provision for the years shown are:
Tax expense (benefit) for the year | Year Ended December 31, | ||
($000s) | 2023 | 2022 | 2021 |
Taxes payable on the result of the year | $ — | $ 33 | $ 90 |
Adjustment in respect to prior years | (16 ) | (69 ) | — |
Change in recorded deferred tax liability | — | — | — |
Income tax expense (benefit) | $ (16 ) | $ (36 ) | $ 90 |
Year Ended December 31, | |||||
($000s) | 2023 | 2022 | 2021 | ||
Employer’s tax on share-based compensation | $ (19 ) | $ (24 ) | $ (371 ) | ||
Fixed Assets differences | 882 | 987 | 1,154 | ||
Inventory differences | (869 ) | (131 ) | (5 ) | ||
Accruals differences | (13 ) | (993 ) | (1,152 ) | ||
Research and development tax credits | (496 ) | (1,404 ) | (1,563 ) | ||
Losses carried forward | (271,675 ) | (256,201 ) | (253,300 ) | ||
Basis for calculation of deferred tax asset | (272,190 ) | (257,766 ) | (255,237 ) | ||
Calculated net deferred tax expense (benefit), local tax rates 5- | |||||
22% | (59,743 ) | (56,592 ) | (55,953 ) | ||
Unrecognized deferred tax asset * | 59,743 | 56,592 | 55,953 | ||
Deferred tax liability (asset) in the balance sheet | $ — | $ — | $ — | ||
Reconciliation of tax expense (benefit)
| Year Ended December 31, | |||
($000s) | 2023 | 2022 | 2021 |
Loss before tax | $ (26,644 ) | $ (32,698 ) | $ (32,552 ) |
Norway statutory tax, calculated at rate of 22% | (5,862 ) | (7,194 ) | (7,132 ) |
Difference in subsidiary taxes, using local rates vs 22% | 46 | 68 | (179 ) |
Estimated tax on permanent differences | (468 ) | (267 ) | (568 ) |
Adjustment in respect of prior years | (16 ) | (69 ) | — |
Use of and change in tax loss carried forward | 6,316 | 7,426 | 7,969 |
Income tax expense (benefit) | $ 16 | $ (36 ) | $ 90 |
* As of December 31, 2023, there was not sufficiently convincing evidence the Company will generate sufficient
taxable profit, against which the unused tax losses could be applied. Consequently, no deferred tax asset has been
recognized. There are no restrictions as to how long tax losses may be carried forward in Norway or the United
Kingdom. In China, the tax loss carryforwards that had not been utilized by the end of 2022, expired as of Dec 31,
2022. Tax credits associated with research and development activities in the United States, totaling $1.4 million as of
December 31, 2023, can be applied against taxable income for the following for 20 years.
** The various deferred tax assets that have not been recognized are denominated in their respective local currencies.
As such, the change in the year-end value in USD of these unrecognized deferred tax assets includes foreign currency
translation adjustments arising from changes in the exchange rates between USD and these local currencies from the
prior year-end.
A 5:1 share consolidation (reverse split) was completed at record date January 10, 2024. The per share
calculations for all periods presented here are based on the new number of shares.
The profit or loss per share is calculated by dividing the profit (loss) for the period by the weighted average
number of ordinary shares outstanding for the period. Loss per share is calculated per basic share (i.e., without
consideration for the anti-dilutive effect of exercisable subscription rights).
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
33
| Year Ended December 31, | |||
2023 | 2022 | 2021 | |
Net loss for the year ($000s) | $ (26,629 ) | $ (32,662 ) | $ (32,552 ) |
Number of ordinary shares issued at December 31 | 279,402,130 | 233,265,317 | 202,077,691 |
Weighted average basic number of ordinary shares | 253,042,411 | 205,386,514 | 183,769,485 |
Dilution effect (treasury stock method) | 1,037,665 | 1,011,631 | 4,317,222 |
Weighted average diluted number of shares | 254,080,076 | 206,398,145 | 188,086,707 |
Loss per share for the year (basic and diluted*) | $ (0.11 ) | $ (0.16 ) | $ (0.18 ) |
* The effects of potentially dilutive Ordinary Shares issuable upon exercise of outstanding subscription rights are not
included in the calculation due to the Company’s net losses for the periods presented, as their effect would be anti-
Goodwill is the recorded difference between the consideration paid and the net value of identifiable assets
acquired and held, less impairment charges, if any. Goodwill balances as of December 31, 2023, and December
31, 2022, reflected the following activity:
Year Ended December 31, | ||
($000s) | 2023 | 2022 |
Cost at the beginning of the year | $ 968 | $ 968 |
Cost at the end of the year | $ 968 | $ 968 |
There is only one cash generating unit in the Company and goodwill is allocated to this. IDEX performed the
annual impairment test on December 31, 2023. Based on the 2023 assessment, no impairment charge has been
made. The Company used a discounted cash flow model which utilized Level 3 measures that represent
unobservable inputs. Key assumptions used to determine the estimated fair value include: (a) internal cash flows
forecasts for 4 years following the assessment date, including expected revenue growth, costs to produce,
operating profit margins and estimated capital needs; (b) an estimated terminal value using a terminal year long-
term future growth rate of 3.0% determined based on the long-term expected prospects of the Company; and (c)
a discount rate (post-tax) of 12 % which reflects the weighted-average cost of capital adjusted for the relevant
risk associated with the Company's operations. A stress-test with reasonably possible changes in the key
assumptions does not indicate that the carrying amount will exceed the recoverable amount.
Acquired identifiable intangible assets, consisting primarily of patents, are held at cost, less accumulated
amortization and impairment charges. Other intangible asset balances as of December 31, 2023, and December
31, 2022, reflected the following activity:
Year Ended December 31, | ||
($000s) | 2023 | 2022 |
Amortization period (straight-line, in years) | 10 - 17 | 10 - 17 |
Cost at the beginning of the year | $ 5,173 | $ 5,173 |
Additions | — | — |
Impact of currency translation | — | — |
Cost at the end of the year | $ 5,173 | $ 5,173 |
Accumulated Amortization at the beginning of the year | $ 3,685 | $ 3,208 |
Amortization | 477 | 477 |
Impact of currency translation | — | — |
Accumulated Amortization at the end of the year | 4,162 | 3,685 |
Carrying amount at the end of the year | $ 1,011 | $ 1,488 |
Acquired patents are capitalized and amortized over the estimated useful life, which is the lifetime of the
Property, plant, and equipment is held at cost, less accumulated depreciation and impairment charges. When
assets are sold or retired, such assets are no longer recorded in the Consolidated Statements of Financial Position.
Any gain or loss on the sale or retirement is recognized in the Consolidated Statements of Profit and Loss.
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
34
The capitalized amount of property, plant, and equipment is the purchase price, including freight, installation,
duties, taxes, and direct acquisition costs related to preparing the asset for use. Costs related to training and
commissioning are expensed as incurred. Subsequent costs, such as expenses for repair and maintenance, are
recognized as incurred in the Consolidated Statements of Profit and Loss. Subsequent enhancements creating
future economic benefits are recognized in the Consolidated Statements of Financial Position as additions to
property, plant, and equipment.
These assets are depreciated using the straight-line method over each asset’s useful life. The depreciation period
and method are assessed each year to ensure that the method and period used is consistent with the status of the
non-current asset.
Property, plant, and equipment balances as of December 31, 2023, and December 31, 2022, reflected the
following activity:
Instruments | ||||
Plant and | Office | and lab | ||
machinery, | furniture and | equipment, | ||
2023 | fixtures and | office | software | |
($000s) | fittings | equipment | tools | Total |
Depreciation period (straight line, in years) | 3-5 | 3-5 | 3-5 | |
Accumulated cost at December 31, 2022 | $ 969 | $ 803 | $ 2,348 | $ 4,120 |
Additions or (disposals) | 177 | 2 | 66 | 245 |
Disposals | — | (18 ) | (108 ) | (126 ) |
Impact of currency translation | 2 | 8 | 23 | 33 |
Accumulated cost at December 31, 2023 | 969 | 803 | 2,348 | 4,271 |
Accumulated depreciation at December 31, 2022 | $ 486 | $ 734 | $ 1,793 | $ 3,012 |
Depreciation | 272 | 40 | 236 | 548 |
Impact of currency translation | 1 | (11 ) | (91 ) | (101 ) |
Accumulated depreciation at December 31, 2023 | 759 | 764 | 1,937 | 3,459 |
Carrying amount at December 31, 2023 | $ 210 | $ 39 | $ 411 | $ 811 |
Instruments | ||||
Plant and | Office | and lab | ||
machinery, | furniture and | equipment, | ||
2022 | fixtures and | office | software | |
($000s) | fittings | equipment | tools | Total |
Depreciation period (straight line, in years) | 3-5 | 3-5 | 3-5 | |
Accumulated cost at December 31, 2021 | $ 855 | $ 782 | $ 2,281 | $ 3,918 |
Additions | 125 | 38 | 104 | 267 |
Impact of currency translation | (11 ) | (18 ) | (37 ) | (66 ) |
Accumulated cost at December 31, 2022 | 969 | 803 | 2,348 | 4,120 |
Accumulated depreciation at December 31, 2021 | $ 367 | $ 671 | $ 1,579 | $ 2,617 |
Depreciation | 125 | 73 | 246 | 443 |
Impact of currency translation | (6 ) | (10 ) | (33 ) | (48 ) |
Accumulated depreciation at December 31, 2022 | 486 | 734 | 1,793 | 3,012 |
Carrying amount at December 31, 2022 | $ 483 | $ 69 | $ 556 | $ 1,107 |
The Company’s leases are for office and laboratory space occupied by employees and contractors. There is no
exposure to future variable lease payments that are not reflected in the measurement of lease liabilities. Activity
during 2023 and 2022 related to right-of-use assets are shown below.
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
35
Year Ended December 31, | ||
($000s) | 2023 | 2022 |
Depreciation periods (straight-line, in years) | 3-5 | 3-5 |
Cost at the beginning of the year | $ 2,643 | $ 2,691 |
Additions | 844 | 1,654 |
Disposal of right to use assets | — | (1,569 ) |
Impact of currency translation | — | (133 ) |
Cost at the end of the year | $ 3,487 | $ 2,643 |
Accumulated depreciation at the beginning of the year | $ 1,098 | $ 2,334 |
Depreciation | 610 | 431 |
Accumulated depreciation of disposed right of use assets | — | (1,566 ) |
Impact of currency translation | — | (101 ) |
Accumulated depreciation at the end of the year | 1,708 | 1,098 |
Recorded value at the end of the year | $ 1,779 | $ 1,545 |
Costs related to right-of-use assets included in the Consolidated Statements of Profit and Loss include the
following:
Leases in the Consolidated Statements of Profit and Loss
| Year Ended December 31, | |||
($000s) | 2023 | 2022 | 2021 |
Depreciation | $ 610 | $ 431 | $ 818 |
Finance cost | 130 | 33 | 31 |
Lease liabilities included in the Consolidated Statements of Financial Position and related activity in the
Consolidated Statements of Profit and Loss and Consolidated Statements of Cash Flows include the following:
Leases in the Consolidated Statements of Financial Position
($000s) | 2023 | 2022 |
Balance at January 1 | $ 1,544 | $ 373 |
Additions | 844 | 1,575 |
Accretion of interest | 130 | 33 |
Payments | (739 ) | (437 ) |
Balance at December 31 | 1,779 | 1,544 |
Non-current | 1,238 | 1,142 |
Current | 624 | 402 |
Total lease liabilities | $ 1,862 | $ 1,544 |
Accounts receivable, trade, includes amounts billed and currently due from customers. The amounts due are
stated at their estimated realizable value. The Company’s payment terms vary by the type and location of its
customers and the products or services offered, although terms generally include a requirement of payment
within 30 to 60 days. When necessary, the Company maintains allowances for doubtful accounts for estimated
losses resulting from the inability of its customers to make required payments, based on assessments of
customers’ credit-risk profiles and payment histories. If the financial condition of the Company’s customers were
to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be
required. The Company does not require collateral from its customers, although there have been circumstances
when the Company has required cash in advance (i.e., a partial down-payment) to facilitate orders in excess of a
Expected credit loss accrued for at the end of 2023 was 144 thousand, no loss was expected for 2022. There were
The balances reported as Accounts receivable, other, consist primarily of amounts due to the Company
associated with Value Added Tax refund activity and amounts due to the Company from governments associated
with approved research and development grants.
Balances of accounts receivable at December 31, 2023, and December 31, 2022, are as follows:
Year ended December 31, 2023
| Maturity | ||||
Less than 3 | ||||
($000s) | months | 3-6 months | 6-12 Months | Total |
Accounts receivable, trade | $ 979 | $ — | $ — | $ 979 |
Accounts receivable, other | 90 | 392 | 467 | 949 |
Total | $ 1,069 | $ 392 | $ 467 | $ 1,928 |
Year ended December 31, 2022
| Maturity | ||||
Less than 3 | ||||
($000s) | months | 3-6 months | 6-12 Months | Total |
Accounts receivable, trade | $ 1,349 | $ 0 | $ 0 | $ 1,349 |
Accounts receivable, other | 198 | 33 | 698 | 929 |
Total | $ 1,547 | $ 33 | $ 698 | $ 2,278 |
Non-current receivables | December 31, | |
($000s) | 2023 | 2022 |
Non-current receivables | $ 81 | $ 73 |
Balance at December 31 | $ 81 | $ 73 |
The receivables are deposits for leasehold payments and are held at nominal value.
Except for the convertible debt in note 17 – Convertible debt, the Company’s payable and other financial
liabilities
at December 31, 2023, and December 31, 2022, were as follows:
Year ended December 31, 2023
Maturity | |||||||
Less | |||||||
than | 6-12 | ||||||
($000s) | 3 months | 3-6 months | months | 1-5 years | Total | ||
Non-current lease liabilities | $ — | $ — | $ — | $ 1,238 | $ 1,238 | ||
Accounts payable | 688 | — | — | — | 688 | ||
Current lease liabilities | 146 | 148 | 331 | — | 624 | ||
Other liabilities | 782 | 760 | 9,254 | — | 10,796 | ||
Total | $ 1,615 | $ 908 | $ 9,585 | $ 1,238 | $ 13,346 | ||
Year ended December 31, 2022
| Maturity | |||||
Less | |||||
than | 6-12 | ||||
($000s) | 3 months | 3-6 months | months | 1-5 years | Total |
Non-current lease liabilities | $ — | $ — | $ — | $ 1,142 | $ 1,142 |
Accounts payable | 1,540 | — | — | — | 1,540 |
Current lease liabilities | 125 | 105 | 172 | — | 402 |
Other liabilities | 838 | 1,400 | 459 | — | 2,697 |
Total | $ 2,503 | $ 1,505 | $ 631 | $ 1,142 | $ 5,781 |
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
37
Other current liabilities include accruals for earned compensation, earned vacation days not taken, potential
employer’s tax on share-based compensation, and accruals for goods and services received but not yet invoiced
by the supplier.
Other current liabilities include the estimated employer’s payroll tax liability related to share-based
compensation amounted to $19 thousand on December 31, 2023, and $24 thousand on December 31, 2022. It
will be due only when the associated subscription rights are exercised. The exercise will, in all likely
circumstances, fund the payable employer’s payroll tax.
current monetary obligations at the end of 2023 or 2022. The Company had no contingent liabilities at the end of
December 31, | |||
Amounts in USD 1,000 | Interest rate | Maturity | 2023 |
Convertible bond | 6% | Bimonthly amortization until June 28, 2027 | |
Convertible debt | $ 5,076 | ||
Embedded derivative | 3,545 | ||
Total: | $ 8,621 |
In December 2023, IDEX entered into a convertible debt financing agreement. The Company issued NOK 100
million in convertible bonds at 6.0% interest p.a. The Company received NOK 92 million after deduction of the
issue discount. The debt will be redeemed every two months in 21 equal installments of NOK 4.8 million plus
accrued interest. The lender can request up to two additional installments to be paid in each period between the
planned term dates. The loan is denominated in NOK. Transactions and balance amounts are reported in USD at
the exchange rates at the respective dates.
The bond holder may elect to convert the outstanding loans into IDEX ordinary shares at any time prior to
repayment at a conversion price of NOK 3.655, which was 125% of the Reference Share Price at December 22,
2023, when taking into account the 5:1 share consolidation (reverse split) was effective on the record date of
January 10, 2024. This share consolidation was approved by the shareholders on December 21, 2023, along with
a share capital reduction which was completed on February 26, 2024. The Company may elect to pay the interest
payments, principal payments, or both with shares in lieu of cash payments. Any repayment in shares will be
converted at 90% of the prevailing market price of the shares.
The convertible bonds are callable by the lender at any point. Because the Company does not have an
unconditional right to defer payment beyond twelve months, both the host contract and the embedded derivative
are classified as current liabilities.
The conversion option was accounted for as an embedded derivative and was recognized separately from the host
contract as a financial liability at fair value through profit or loss. The host contract is recognized at amortized
cost. At inception, the Company determined the value of the conversion option to be NOK 36.8 million and the
residual value of the host contract to be NOK 51.2 million, including NOK 4.0 million of transactions costs.
The Company has no financial assets that are measured at fair value and the only financial liability that is
measured at fair value at the end of each reporting period is the embedded conversion option in its convertible
debt.
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
38
The use of different estimation, methodologies and assumptions could have a material effect on the estimated fair
value amounts. The methodologies are as follows:
•
Cash, cash equivalents, accounts receivable, other receivables, accounts payable and accrued
liabilities: due to the short-term nature of these balances, carry amounts approximate fair value.
•
At December 31, 2023, the carrying amount of the debt component was calculated using the
effective interest rate of the debt component of the convertible note issued in December 2023.
•
The fair value of the embedded derivative related to the convertible debt is recalculated at the end of
each reporting period. The fair value measured is based on significant observable input (Level 3).
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments
by valuation technique:
•
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
•
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair
value are observable, either directly or indirectly.
•
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are
not based on observable market data
The following table provides a reconciliation of the changes in items measured at fair value and categorized
within Level 3. See Note 17 – Convertible debt. There were no items categorized as Level 3 in 2022.
Amounts in USD 1,000 | December 31, 2023 | December 31, 2022 |
Convertible debt | ||
Host contract of convertible debt | 5,076 | — |
(Gains)/Losses recognized in Consolidated Statements of Profit and | ||
Loss | — | — |
Derivative instrument related to convertible debt | 3,545 | — |
(Gains)/Losses recognized in Consolidated Statements of Profit and | ||
Loss | (87 ) | — |
Total: | 8,534 | — |
The host contract of the convertible debt, which at initial recognition was the balance of the total convertible debt
and the derivative instrument, is held at amortized cost. The valuation of the host contract, which equals its
carrying amount, assumes that the discount rate for valuation purposes is equal to the effective interest rate of the
convertible debt.
The (gains)/losses included in the Consolidated Income Statements were recognized within financial income for
Inventories consist of raw materials, work in process, and finished goods. Materials and components purchased
for use in research and development activities are expensed at the time of purchase and excluded from inventory.
Inventory is recorded at the lower of cost and net realizable value, less impairment, if any.
December 31, | |||||||
2023 | 2022 | ||||||
($000s) | Cost | Reserves | Net | Cost | Reserves | Net | |
Raw materials | $ 3,795 | $ — | $ 3,795 | $ 2,280 | $ — | $ 2,280 | |
Work in progress | 102 | — | 102 | 1,486 | — | 1,486 | |
Finished goods | 3,356 | (869 ) | 2,487 | 812 | (130 ) | 681 | |
Total Inventory | $ 7,254 | $ (869 ) | $ 6,384 | $ 4,577 | $ (130 ) | $ 4,447 | |
In 2023, 2022, and 2021, materials with values of $251 thousand, $154 thousand, and $124 thousand
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
39
USD-valued cash and cash equivalent balances by currency were as follows:
Year Ended December 31, | ||
($000s) | 2023 | 2022 |
Denominated in USD | $ 10,587 | $ 14,917 |
Denominated in NOK | 424 | 990 |
Denominated in GBP | 221 | 128 |
Denominated in CNY | 120 | 90 |
Total | $ 11,352 | $ 16,124 |
Of the amounts above, employees’ withheld payroll tax deposits amounted to $29 thousand and $26 thousand at
For office leases, the parent company and subsidiaries have placed an amount corresponding to about 3 months’
rent and allocations of its leasehold facilities in an escrow account in landlords name for the benefit of the
landlord. Such escrow accounts and other deposits amounted to $81 thousand at the end of 2023 and $73
thousand at the end of 2022 in non-current receivables. No other assets have been pledged as security or are
This note reports the number of shares as registered as of December 31, 2023, and on earlier dates, i.e., before
the 5:1 share consolidation (reverse split) taking effect on record date January 10, 2024. The incentive
subscription rights plan has adjustment clauses so that the number of subscription rights and the exercise prices
are adjusted by the same ratio. See also note 26 – Subsequent events.
There is one class of shares, and all such Ordinary Shares have equal rights. The par value of an Ordinary Share
was NOK 0.15 per share at December 31, 2023. IDEX does not hold any of its own Ordinary Shares.
During the years ended December 31, 2023, December 31, 2022, and December 31, 2021, the Board of Directors
approved the transfer of $13.0 million, $18.0 million, and $46.0 million, respectively, of Share Premium to
absorb uncovered losses as allowed under Norwegian law. As a result, Share Premium has been reduced by a
cumulative amount of $300.5 million as of December 31, 2023, $287.5 million as of December 31, 2022 and
$269.5 million as of December 31, 2021 against Capital Reduction Reserve. The transfer has no impact on the
total equity, comprehensive income (loss), assets (including cash), nor liabilities.
Number of | |
Ordinary Shares | |
Balance at December 31, 2021 | 1,010,388,454 |
Share issues (Employee Share Purchase Plan) | 4,947,546 |
Share issue (exercise of incentive subscription rights) | 990,584 |
Private placement of Ordinary Shares on November 16 | 150,000,000 |
Balance at December 31, 2022 | 1,166,326,584 |
Share issues (Employee Share Purchase Plan) | 4,583,947 |
Share issue (exercise of incentive subscription rights) | 389,608 |
Private placement of Ordinary Shares on May 24 | 116,897,492 |
Private placement of Ordinary Shares on June 16 | 30,161,332 |
Private placement of Ordinary Shares on November 16 | 78,651,685 |
Private placement of Ordinary Shares on December 22 | 2 |
Balance at December 31, 2023 | 1,397,010,650 |
Costs related to share issuance have been charged against equity and amounted to $756 thousand in 2023, $737
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
40
This note reports the number of shares and other instruments as registered as of December 31, 2023, and on
earlier dates, i.e., before the 5:1 share consolidation (reverse split) taking effect on record date January 10, 2024.
The incentive subscription rights plan has adjustment clauses so that the number of subscription rights and the
exercise prices are adjusted by the same ratio. See also note 26 – Subsequent events.
Subscription rights plans
IDEX follows the practice of renewing its subscription rights plan at each Annual General Meeting, when the
preceding plan is closed for further grants and a new plan is established. On May 23, 2023, the Annual General
Meeting resolved to adopt the 2023 Subscription Rights Incentive Plan (the “2023 Plan”). At the Extraordinary
General Meeting ("EGM") on December 21, 2023, the 2023 Plan was modified to allow a higher maximum
number of subscription rights granted, in line with the increase in the share capital in June and December 2023.
The Board is responsible for administration of subscription rights plans and approves grants under the plans and
the terms of each grant.
Under the amended 2023 Plan, the Board may grant up to 139,701,065 subscription rights, provided the total
number of outstanding subscription rights does not exceed 10 percent of the number of registered Ordinary
Shares.
Subscription rights may be granted to employees and individuals rendering services to the Company. The
exercise price shall be, at a minimum, the higher of the average closing price of an Ordinary Share, as reported
on the Oslo Børs, for the ten trading days preceding the date of the grant, or the closing price of an Ordinary
Share, as reported on the Oslo Børs, on the trading day preceding the date of the grant. The board may in cases of
particular circumstances decide that the exercise price is lower, but not less than the par value of the share. The
total number of outstanding such grants may not exceed 1 percent of the number of registered Ordinary Shares
Unless resolved otherwise by the Board, 25% of each grant of subscription rights vests per year. The annual
vesting dates are the latest of the following dates before the date of grant of the subscription rights; (i) January
15, (ii) April 15, (iii) July 15 or (iv) October 15. The subscription rights expire on the fifth anniversary of the
Annual General Meeting at which the shareholders resolved to establish the plan under which the subscription
rights were granted. Unvested subscription rights terminate on the holder’s last day of employment or, in the case
of non-employees, the last day of the individual’s service to the Company. Vested subscription rights may be
exercised up to 90 days after the holder’s last day of employment. There are no cash settlement alternatives for
the holders of subscription rights.
The Company may elect to settle in cash.
The EGM also resolved that the board could issue replacement subscription rights ("RSR") at an exercise price
not lower than NOK 0.445 per share against waiver and cancellation of existing subscription rights. The vesting
schedule for such RSRs shall be determined by the board. No RSRs had been granted by December 31, 2023.
The fair value of the subscription rights granted is calculated, for recognition of share-based compensation
expenses, using the Black-Scholes option pricing model, applying the following assumptions:
| Year Ended December 31, | |||
2023 | 2022 | 2021 | |
Exercise price (NOK) | 0.15 – 0.93 | 1.03 – 2.08 | 2.38 – 3.10 |
Weighted average exercise price per share | 1.43 | 1.54 | 2.53 |
Weighted average share price at date of grant | 0.69 | 1.42 | 2.45 |
Expected term (years) | 4.67 | 4.45 | 4.62 |
Weighted average term (years) | 3.01 | 3.27 | 3.35 |
Share price volatility (percent) | 69 – 93 | 72 – 100 | 85 – 112 |
Risk-free interest rate | 3.88% | 2.65% | 0.98% |
Expected dividend payment | - | - | - |
Forfeiture | None | None | None |
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
41
Subscription rights activity
2023 | 2022 | |||
Weighted | Weighted | |||
Number of | Average | Number of | Average | |
Subscription | Exercise Price | Subscription | Exercise Price | |
Rights | (NOK) | Rights | (NOK) | |
Outstanding as of January 1 | 81,106,631 | 1.74 | 71,756,399 | 1.84 |
Granted | 22,475,200 | 0.49 | 19,342,900 | 1.54 |
Exercised | (824,021 ) | 0.15 | (930,184 ) | 0.29 |
Terminated | (7,327,449 ) | 1.84 | (8,987,484 ) | 2.25 |
Expired | (595,700 ) | 4.97 | (75,000 ) | 8.42 |
Outstanding as of December 31 | 94,834,661 | 1.42 | 81,106,631 | 1.74 |
Subscription rights exercisable as of December 31 | 50,694,011 | 1.67 | 36,416,302 | 1.65 |
Weighted | Weighted | |||
Average Fair | Average Fair | |||
Number of | Value (NOK) | Number of | Value (NOK) | |
Subscription | per Subscr. | Subscription | per Subscr. | |
Rights | Right | Rights | Right | |
Subscription rights granted in the year | 22,475,200 | 0.45 | 19,342,900 | 0.82 |
Composition of outstanding and exercisable subscription rights at December 31, 2023
Outstanding | |||||||
Subscription Rights | Vested (Exercisable) Subscription Rights | ||||||
Weighted | Weighted | ||||||
Number of | Weighted | Weighted | Average | Number of | Weighted | Average | |
Subscription | Average | Average | Remaining | Vested | Average | Remaining | |
Rights | Exercise | Remaining | Time to | Subscription | Exercise | Term | |
Exercise Price (in NOK) | Outstanding | Price (NOK) | Term (Years) | Vest (Years) | Rights | Price (NOK) | (Years) |
0.00 - 0.49 | 11,663,861 | 0.16 | 3.38 | 1.08 | 2,662,861 | 0.15 | 0.36 |
0.50 - 0.99 | 13,755,300 | 0.70 | 4.11 | 1.98 | 420,800 | 0.71 | 0.36 |
1.00 - 1.49 | 15,749,000 | 1.13 | 2.29 | 1.35 | 6,750,350 | 1.12 | 1.51 |
1.50 - 1.99 | 32,657,600 | 1.70 | 1.16 | 0.66 | 31,666,100 | 1.70 | 1.15 |
2.00 - 2.49 | 15,545,600 | 2.28 | 2.37 | 1.01 | 6,450,400 | 2.33 | 2.37 |
2.50 - 2.99 | 4,864,000 | 2.65 | 2.37 | 1.29 | 2,432,000 | 2.65 | 2.37 |
3.00 - 4.99 | 599,300 | 3.12 | 1.33 | 0.54 | 311,500 | 3.15 | 1.30 |
5.00 - 9.99 | — | 0.00 | 0.00 | 0.00 | — | - | 0.00 |
Total | 94,834,661 | 1.43 | 2.31 | 1.39 | 50,694,011 | 1.67 | 1.37 |
Composition of outstanding and exercisable subscription rights at December 31, 2022
Outstanding | |||||||
Subscription Rights | Vested (Exercisable) Subscription Rights | ||||||
Weighted | Weighted | ||||||
Number of | Weighted | Weighted | Average | Number of | Weighted | Average | |
Subscription | Average | Average | Remaining | Vested | Average | Remaining | |
Rights | Exercise | Remaining | Time to | Subscription | Exercise | Term | |
Exercise Price (in NOK) | Outstanding | Price (NOK) | Term (Years) | Vest (Years) | Rights | Price (NOK) | (Years) |
0.00 - 0.49 | 3,486,882 | 0.15 | 1.36 | 0.00 | 3,486,882 | 0.15 | 1.35 |
0.50 - 0.99 | 720,800 | 0.71 | 1.36 | 0.22 | 515,600 | 0.71 | 0.97 |
1.00 - 1.49 | 16,507,000 | 1.14 | 3.34 | 1.48 | 2,759,850 | 1.11 | 0.68 |
1.50 - 1.99 | 36,300,174 | 1.70 | 2.15 | 0.16 | 24,589,220 | 1.70 | 1.42 |
2.00 - 2.49 | 17,218,050 | 2.28 | 3.37 | 1.27 | 2,732,625 | 2.40 | 0.87 |
2.50 - 2.99 | 5,412,900 | 2.65 | 3.37 | 1.34 | 1,353,225 | 3 | 0.84 |
3.00 - 4.99 | 960,825 | 3.34 | 1.96 | 0.48 | 479,200 | 3.52 | 0.79 |
5.00 - 9.99 | 500,000 | 5.10 | 0.36 | 0.00 | 500,000 | 5.10 | 0.35 |
Total | 81,106,631 | 1.74 | 2.68 | 0.74 | 36,416,602 | 1.65 | 1.27 |
Employee Share Purchase Plan
The Employee Share Purchase Plan (“ESPP”) is revolved each year at the Annual General Meeting. The current
ESPP was approved at the 2023 Annual General Meeting. Under the ESPP, an IDEX employee based in Norway,
the United Kingdom, or the United States may contribute up to 20% of his or her annual base salary, through
payroll deductions, toward periodic purchases of new issue Ordinary Shares. Under the ESPP, an option for the
purchase of an Ordinary Share is granted to a participating employees on the first day of a 6-months' “offering
period” to purchase new issued Ordinary Shares at the end of that offering period at a purchase price equal to
85% of the lesser of the fair market value, based on the closing price of an Ordinary Share reported by the Oslo
Børs, on either the first day or the last day of that offering period. The offering periods occur from March
through August, and from September through February. The shares are not restricted.
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
42
The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the U.S. Internal
Revenue Code, thereby affording certain tax advantages to employees who are taxpayers in the United States.
There are no tax advantages for ESPP participants who are taxpayers in Norway or the United Kingdom.
The share-based remuneration cost of the ESPP is calculated at the start of each contribution period, and
amortized over that period. The cost is based on the contribution amount and amounts to the discount of 15% at
the beginning of the period, plus the option value of an 85% call and 15% put option granted at the beginning of
the period. The option value is based on a Black-Scholes option pricing model applying prevailing interest rates
and share price volatility at the beginning of the period.
ESPP cost calculation parameters | September 1, 2023 | March 1, 2023 | September 1, 2022 |
Expected contribution amount (NOK 1,000) | 532 | 1,078 | 2,025 |
Share price on start date (NOK per share) | 0.64 | 0.96 | 0.83 |
Share price volatility | 59 % | 80 % | 68 % |
Risk-free interest rate | 4.24 % | 3.20 % | 2.82 % |
Expected dividend payment | — | — | — |
Expected number of shares | 972,698 | 1,321,462 | 2,854,899 |
Share-based compensation cost per expected share | 0.23 | 0.40 | 0.32 |
In the two offering periods completed within 2023, an average of 28 employees (2022: 43) participated in the
ESPP and purchased a total of 4,583,947 Ordinary Shares at a weighted average price of NOK 0.64 (2022:
The Company’s significant shareholders, Board members, and management, as well as their related parties, are
considered related parties of the Company.
Compensation of key management is disclosed in Note 5 – Compensation and benefits.
Board compensation
Board compensation is paid in arrears after being approved by the shareholders, generally at the Annual General
Meeting. The following amounts were paid in 2023, 2022 and 2021:
Year Ended December 31, 2023 | |||
Cash | Shared-based | ||
($000s) | Compensation | Compensation | Total |
Lawrence J. Ciaccia, Board chair | $ 48 | $ — | $ 48 |
Deborah Davis | 62 | — | 62 |
Hanne Hovding | 50 | — | 50 |
Annika Olsson | 40 | — | 40 |
Morten Opstad | 48 | — | 48 |
Thomas M. Quindlen | 50 | — | 50 |
Stephen A. Skaggs | 57 | — | 57 |
$ 355 $ | — | $ 355 | |
Year Ended December 31, 2022 | |||
Cash | Shared-based | ||
($000s) | Compensation | Compensation | Total |
Morten Opstad, Board chair | $ 53 | $ — | $ 53 |
Lawrence J. Ciaccia, Board deputy chair | 53 | — | 53 |
Deborah Davis | 68 | — | 68 |
Hanne Hovding | 55 | — | 55 |
Annika Olsson | 44 | — | 44 |
Thomas M. Quindlen | 55 | — | 55 |
Stephen A. Skaggs | 62 | 0 | 62 |
$ 390 | $ 0 | $ 390 | |
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
43
Year Ended December 31, 2021 | |||
Cash | Shared-based | ||
($000s) | Compensation | Compensation | Total |
Morten Opstad, Board chair | $ 59 $ | — | $ 59 |
Lawrence J. Ciaccia, Board deputy chair | 28 | 33 | 61 |
Deborah Davis | 67 | 0 | 67 |
Hanne Hovding | 52 | — | 52 |
Stephen A. Skaggs | 4 | 58 | 62 |
$ 124 | $ 70 | $ 194 | |
Outstanding subscription rights awarded to members of the Board under the Company’s subscription rights plans
have the following expiration dates and exercise prices. For further information describing these plans, see Note
16 – Share-based compensation.
Subscription rights outstanding as | |||||
| of December 31, | |||||
Exercise Price | |||||
Grant Date | Expiration Date | (NOK per share) | 2023 | 2022 | 2021 |
June 17, 2020 | May 15, 2025 | 8.55 | 120,000 | 120,000 | 120,000 |
The subscription rights were originally granted on August 15, 2018. They were replaced by the grant on June 17,
2020, as part of an exchange of subscription rights approved at the 2020 Annual General Meeting. This exchange
was offered to all eligible holders.
Nomination Committee
The following fees has been paid to the nomination committee in 2023 and 2022 for the services up to the 2023
annual general meeting and the 2022 annual general meeting, respectively.2023: Chair Robert Keith $2.4
thousand
, members Håvard Nilsson and Harald Voigt $1.4
thousand
each. 2022: Chair Robert Keith $
2.6
thousand
, members Håvard Nilsson and Harald Voigt $
1.6 thousand
each.
Related party transactions
Lawrence J. Ciaccia, board member 2015-2023, and chair since May 23, 2023, provides consulting services to
IDEX. The fees paid to Mr. Ciaccia for his services totaled $50 thousand in 2023, $58 thousand in 2022, and $65
thousand in 2021.
Morten Opstad, Board, chair 1997-2023 and board member since May 23, 2023, is a partner at Ræder Bing
advokatfirma AS, the Company’s primary law firm, which provided services to the Company resulting in
charges of $172 thousand in 2023, $234 thousand in 2022, and $338 thousand in 2021.
In connection with the private placements in May and November 2023, the Company entered into a share lending
agreement with certain shareholders in order to facilitate settlement of the new shares in the private placements.
As a fixed fee for the share lending, each lender received a fee equaling 5% per annum of the subscription price
per new share in the private placement multiplied by the number of borrowed shares lent by the respective
lender. The fees paid amounted to $0.7 thousand to Alden AS, $1.3 thousand to Mr. Robert Keith, $7.8 thousand
to Sundt AS, and $2.7 thousand to Sundvall Holding AS.
| Year Ended December 31, | |||
($000s) | 2023 | 2022 | 2021 |
Sales and marketing activities | $ 3,509 | $ 2,840 | $ 1,387 |
Legal, audit, accounting and other services | 1,894 | 2,073 | 2,332 |
IT expenses | 1,705 | 1,894 | 2,047 |
Travel expenses | 253 | 230 | 132 |
Other operating expenses | 1,383 | 1,364 | 1,449 |
Total other operating expenses | $ 8,743 | $ 8,402 | $ 7,347 |
IDEX Biometrics ASA Annual Report 2023
Consolidated Financial Statements and Notes
44
The Extraordinary General Meeting on December 21, 2023 resolved a five-to-one share consolidation (reverse
split). The consolidation was registered on January 8, 2024 and effective at record date January 10, 2024.
Following the consolidation, the company’s share capital remained NOK 209,551,597.50, but divided into
279,402,130 shares, each with a nominal value of NOK 0.75. The incentive subscription rights plan has
adjustment clauses so that the number of subscription rights and the exercise prices are adjusted by the same
ratio. The calculation of profit or loss per share in Note 10 – Loss per share calculation has been based on the
consolidated number of shares, while the reported number of shares and other instruments in these Financial
Statements are the number of shares or instruments as registered as of December 31, 2023, and on earlier dates,
i.e., before the 5:1 share consolidation (reverse split) took effect, unless stated otherwise.
For the avoidance of doubt, the number of shares, instruments and prices in the following paragraphs are after the
5:1 share consolidation.
The Extraordinary General Meeting on December 21, 2023 resolved a share capital reduction by reduction of the
par value of shares from NOK 0.75 to NOK 0.15 per share. The reduction was registered on February 26, 2024.
The number of shares remained unchanged. The reduction amount, NOK 167,641,278.-, was transferred to other
equity. The company’s net equity remained the same, and there was no distribution of capital. Following the
reduction, the Company’s share capital was NOK 41,910,319.50 divided into 279,402,130 shares, each with a
nominal value of NOK 0.15.
The Board resolved on February 29, 2024, to issue 358,525 shares at NOK 1.32 per share to employees
participating in the Company’s ESPP. Following the issue, the Company's share capital was NOK 41,964,098.25
divided into 279,760,655 shares, each with a nominal value of NOK 0.15.
The Board resolved on March 19, 2024, to issue in total 365,900 ordinary shares at NOK 0.75 per share to
employees who had exercised incentive subscription rights. The incentive subscription rights were issued under
the Company’s 2019 incentive subscription rights plan, which plan was approved by the Annual General
Meeting on May 9, 2019. Following the issue, the company’s share capital is NOK 42,018,983.25 divided into
280,126,555 shares each with a nominal value of NOK 0.15. Following the exercise, there are 18,601,032
incentive subscription rights outstanding.
The Board resolved on April 17, 2024, to issue 550,000 incentive subscription rights (SRs) to employees in
IDEX. The grant was made under the Company's 2023 incentive subscription rights plan as amended at the
extraordinary general meeting on December 21, 2023. The exercise price of the SRs is NOK 0.15 per share and
the SRs vest by 50% per year over two years. The SRs expire on May 23, 2028.
The repayment schedule of the convertible loan described in Note 17 - Convertible debt, accrued interest, was
initially 21 bi-monthly term payments. The lender can request up to two advanced installments to be paid in each
period between the planned term dates. After the term payment on February 28, 2024, the lender made two such
requests. All three terms were settled in cash, not shares, by a total combined amount of NOK 15.4 million or
$1.4 million in the first quarter of 2024.
The Company continues to focus on reducing expenses and as such in March 2024 provided notice to about 25
employees and or contractors. The Company is also consolidating the majority of its engineering functions to
Europe and closing two engineering facilities in the US. These actions are part of the plan to reduce operating
expense level below $4 million per quarter. All current actions are expected to be completed by the end of the
second quarter of 2024. The Company does not expect any significant restructuring costs.
There have been no events between December 31, 2023, and the date of these financial statements that have had
any material impact on the Company’s results for 2023, or the value of the Company’s assets and liabilities as of
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
45
PARENT COMPANY SEPARATE FINANCIAL STATEMENTS
IDEX Biometrics ASA
Parent Company Separate Statements of Profit and Loss
(In thousands, except per share amounts)
| Year Ended December 31, | |||
Note | 2023 | 2022 | |
Revenue: | |||
Product | $ 4,131 | $ 3,889 | |
Service | 8 | 203 | |
Total revenue | 4 | 4,138 | 4,091 |
Operating expenses: | |||
Cost of materials, net of inventory change | 3,908 | 3,244 | |
Compensation and benefits | 5 | 2,308 | 2,906 |
Research and development | 6, 7 | 12,912 | 16,079 |
Other operating expenses | 8, 25 | 9,729 | 10,943 |
Amortization and depreciation | 11, 12, 13 | 752 | 599 |
Total operating expenses | 29,609 | 33,771 | |
Loss from operations | (25,471 ) | (29,679 ) | |
Finance income | 16 | 696 | 544 |
Finance cost | 16 | (365 ) | (1,888 ) |
Loss before tax | (25,141 ) | (31,023 ) | |
Income tax expense | 9 | — | — |
Net loss for the year | $ (25,141 ) | $ (31,023 ) | |
Loss per share, basic and diluted | 10 | $ (0.11 ) | $ (0.16 ) |
Statements of Comprehensive Income | |||
Year Ended December 31, | |||
2023 | 2022 | ||
Net loss for the year | $ (25,141 ) | $ (31,023 ) | |
Other comprehensive income that may be reclassified to profit (loss) | |||
in subsequent periods: | — | — | |
Total comprehensive income (loss) for the period (net of tax) | $ (25,141 ) | (31,023 ) | |
The accompanying notes are an integral part of these financial statements.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
46
IDEX Biometrics ASA
Parent Company
Separate
Statements of Financial Position
(In thousands, except share numbers and per share amounts)
| December 31, | |||
Note | 2023 | 2022 | |
Assets | |||
Non-current assets: | |||
Goodwill | 11 | $ 968 | $ 968 |
Intangible assets | 11 | 1,011 | 1,488 |
Property, plant and equipment | 12 | 303 | 367 |
Right-of-use assets | 13 | 39 | 62 |
Shares in subsidiaries | 1, 27 | 1,749 | 1,749 |
Non-current receivables | 15 | 7 | 7 |
Total non-current assets | 4,077 | 4,641 | |
Current assets: | |||
Prepaid expenses | 15 | 463 | 562 |
Inventory | 19 | 6,384 | 4,447 |
Accounts receivable, other | 14 | 525 | 465 |
Accounts receivable, trade | 14 | 1,068 | 1,349 |
Receivables from group companies | 14 | 10,366 | 7,597 |
Cash and cash equivalents | 20 | 10,818 | 14,242 |
Total current assets | 29,625 | 28,663 | |
Total assets | $ 33,701 | $ 33,304 | |
The accompanying notes are an integral part of these financial statements.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
47
| December 31, | |||
Note | 2023 | 2022 | |
Equity and liabilities | |||
Share capital (NOK 0.15 par value per share, 1,397,010,650 and | |||
1,166,326,584 shares issued and outstanding at December 31, 2023 and | |||
2022, respectively) | 22 | $ 25,955 | $ 22,762 |
Share premium | 2,118 | 4,036 | |
Share-based payment | 24,858 | 23,575 | |
Capital reduction reserves | 300,500 | 287,500 | |
Accumulated loss | (337,510 ) | (312,369 ) | |
Total equity | 15,922 | 25,505 | |
Non-current liabilities: | |||
Non-current lease liabilities | 13 | 13 | 13 |
Total non-current liabilities | 13 | 13 | |
Current liabilities: | |||
Accounts Payable | 16 | 721 | 1,400 |
Payables to group companies | 16 | 6,794 | 5,057 |
Current lease liabilities | 13, 16 | 19 | 46 |
Public duties payable | 89 | 98 | |
Interest-bearing loans | 17 | 5,076 | — |
Other current financial liabilities | 17 | 3,545 | — |
Other current liabilities | 16 | 1,522 | 1,185 |
Total current liabilities | 17,766 | 7,786 | |
Total liabilities | 17,780 | 7,799 | |
Total equity and liabilities | $ 33,701 | $ 33,304 | |
The accompanying notes are an integral part of these financial statements.
April 24, 2024
The board of directors of IDEX Biometrics ASA
/s/ Lawrence John Ciaccia
Lawrence John Ciaccia
Chair
/s/ Deborah Davis
Deborah Davis
Board member
/s/ Annika Olsson
Annika Olsson
Board member
/s/ Morten Opstad
Morten Opstad
Board member
/s/ Adriana Saitta
Adriana Saitta
Board member
/s/ Stephen A. Skaggs
Stephen A. Skaggs
Board member
/s/
Vincent Arthur Graziani
Vincent Arthur Graziani
CEO
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
48
IDEX Biometrics ASA
Parent Company Separate Statements of Changes in Equity
(In thousands)
Foreign | |||||||
Share- | currency | Capital | |||||
Share | Share | based | translation | reduction | Accumulated | Total | |
capital | premium | payment | effects | reserve * | loss * | equity | |
Balance at January 1, 2022 | $ 20,410 | $ 9,452 | $ 21,414 | $ — | $ 269,500 | $ (281,346 ) | $ 39,431 |
Share issuance | 2,273 | 12,103 | — | — | — | — | 14,376 |
Share-based compensation | 79 | 481 | 2,161 | — | — | — | 2,721 |
Loss for the year | — | — | — | — | — | (31,023 ) | (31,023 ) |
Transfer of share premium | — | (18,000 ) | — | — | 18,000 | — | — |
Other comprehensive income | — | — | — | — | — | — | — |
Balance at December 31, 2022 | 22,762 | 4,036 | 23,576 | — | 287,500 | (312,369 ) | 25,505 |
Share issuance | 3,128 | 11,009 | — | — | — | — | 14,137 |
Share-based compensation | 65 | 73 | 1,283 | — | — | — | 1,421 |
Loss for the year | — | — | — | — | — | (25,141 ) | (25,141 ) |
Transfer of share premium | — | (13,000 ) | — | — | 13,000 | — | — |
Other comprehensive income | — | — | — | — | — | — | — |
Balance at December 31, 2023 | $ 25,955 | $ 2,118 | $ 24,858 | $ — | $ 300,500 | $ (337,510 ) | $ 15,922 |
*Refer also to Note 1: Organization, basis of presentation, and significant accounting policies and Note 15: Share
capital and share premium.
The accompanying notes are an integral part of these financial statements.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
49
IDEX Biometrics ASA
Parent Company Separate Statements of Cash Flow
(In thousands)
December 31, | |||
Note | 2023 | 2022 | |
Operating activities | |||
Profit (loss) before tax | $ (25,141 ) | $ (31,023 ) | |
Amortization and depreciation expense | 11, 12, 13 | 752 | 599 |
Share-based compensation expense | 1,421 | 2,721 | |
(Increase) in inventories | (1,937 ) | (3,213 ) | |
(Increase) in accounts receivable | (2,488 ) | (2,045 ) | |
Increase in accounts payable | 1,189 | 2,503 | |
Change in other working capital items | 235 | (1 ) | |
Other operating activities | 105 | (1,435 ) | |
Interest paid | (8 ) | (2 ) | |
Other financial items | (327 ) | 1,346 | |
Net cash flow from operating activities | (26,200 ) | (30,549 ) | |
Investing activities | |||
Purchases of property, plant and equipment | 11, 12, 13 | (187 ) | (2 ) |
Repayments on loans to subsidiaries | 0 | 1 | |
Interest received | 234 | 92 | |
Net cash flows from investing activities | 47 | 91 | |
Financing activities | |||
Net proceeds from issue of shares | 22, 23 | 14,137 | 14,376 |
Proceeds from borrowings | 17 | 8,621 | — |
Payment of principal portion of lease liabilities | (29 ) | 25 | |
Net cash flow from financing activities | 22,729 | 14,401 | |
Net change in cash and cash equivalents | (3,423 ) | (16,056 ) | |
Opening cash and cash equivalents balance | 14,242 | 30,298 | |
Cash and cash equivalents at December 31 | 20 | $ 10,818 | $ 14,242 |
The accompanying notes are an integral part of these financial statements.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
50
NOTES TO PARENT COMPANY
SEPARATE FINANCIAL STATEMENTS
1. Organization, basis of presentation, and significant accounting policies
IDEX Biometrics ASA and its wholly-owned subsidiaries (collectively, “IDEX” or the “Company”) specialize in
the design, development, and sale of fingerprint authentication solutions. The Company’s fingerprint
authentication solutions are used primarily in contactless smart cards, including financial payment cards, access
control cards, and card-based devices for the storage of digital currencies.
IDEX Biometrics ASA, the parent company, is a public limited liability company incorporated in 1996 in
Norway. The address of the head office is Dronning Eufemias gate 16, NO-0191 Oslo, Norway. The Company’s
Ordinary Shares, representing the only class of equity securities issued and outstanding, are listed on the Oslo
Børs, the stock exchange in Oslo, Norway, under the ticker symbol IDEX.
IDEX Biometrics ASA’s American Depositary Shares (“ADSs’) representing its ordinary shares, were listed on
Nasdaq Capital Market until a voluntary delisting was effective on August 10, 2023. The delisting concerned
only the ADSs listed on Nasdaq. There was no impact on the ordinary shares listed on the Oslo Stock Exchange.
The ADS delisting had no impact on the Company’s accounting standards or disclosures to the Norwegian
financial market.
IDEX Biometrics ASA has wholly-owned subsidiaries in the United States (IDEX Biometrics Holding Company
Inc. and IDEX Biometrics America Inc. (together, “IDEX America”)), the United Kingdom (IDEX Biometrics
UK Ltd. (“IDEX UK”)), and China (IDEX Electronics (Shanghai) Co., Ltd. (“IDEX China”)). The parent
company is the owner of all intellectual property of IDEX and is the contractual party to all customer and
manufacturing partner agreements. All sales are generated by the parent company
, and the parent company is the
supplier to the customers
. The subsidiaries provide various services to the parent company, mainly associated
with engineering, supply-chain administration, and customer service functions.
2. Basis of Preparation
IDEX Biometrics ASA prepares its Financial Statements on a historical cost basis, and in accordance with IFRS
Accounting Standards as adopted by the EU. The financial statements are presented in U.S. Dollars (“USD” or
"$"), and all amounts are rounded to the nearest thousand ($000), unless otherwise indicated.
The subtotals and
totals in some of the tables may not equal the sum of the amounts shown in the primary financial statements due
to rounding.
IDEX Biometrics ASA including its subsidiaries are published separately.
3. Significant Accounting Policies
Accounting policies that are significant to the Company’s results and financial position, in terms of the
materiality of the items to which the policy is applied, are discussed below.
The significant accounting policies described in these consolidated financial statements have been applied
consistently for all periods presented, except as otherwise noted in the disclosure related to the impact of policy
changes following the adoption of new accounting standards and voluntary changes in 2023.
The statements of profit and loss are presented by the nature of expense. The cash flow statements are presented
by the indirect method.
There have not been any changes to IDEX Biometrics ASA's accounting policies applied in the financial
statements for 2023 compared to those applied in the annual financial statements for 2022.
The parent company separate financial statements for 2023 were approved by the Board on April 24, 2024.
a. Going Concern
The going concern assumption has been applied in the preparation of the financial statements. The going concern
assumes the realization of assets and satisfaction of liabilities in the normal course of business.
IDEX Biometrics ASA 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
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
51
operating activities and to raise additional capital to finance its operations.
The accumulated losses, net of capital
reduction reserve amounted to $37.0 million as of December 31, 2023, and the net cash outflow in 2023
amounted to $3.4 million after obtaining new equity and a loan amounting to $22.8 million combined. Net equity
amounted to $15.9 million, and the balance sheet solvency, defined as cash plus current external receivables less
current external liabilities, amounted to $1.4 million on December 31, 2023. While the Company has taken
measures to significantly reduce operating expenses, it does not expect that its existing cash will enable it to fund
its operating expenses and capital expenditures requirements for the next twelve months. IDEX Biometrics ASA
is exploring further options to fund its commercialization efforts. 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 ASA 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 IDEX Biometrics ASA'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 has been successful in the past with implementing cost reductions and raising capital
through private placements of equity. Acknowledging the significant doubt identified above, the Board has on
balance concluded that the conditions for the going concern assumption are met.
b. Subsidiaries
Investments in subsidiaries are held at historical cost.
c. Equity
Equity is comprised of the following:
Share Capital: comprised of the nominal amount of the ordinary shares. This capital is not
distributable in the form of dividends under the Norwegian Public Limited Liability Companies Act
•
Share Premium: comprised of: (1) the amount received attributable to Share Capital, in excess of the
nominal amount of shares issued by the parent company, reduced by; (2) issuance costs directly
attributable to the capital increase and; (3) transfers into the Capital Reduction Reserve, (refer to
Note 15 – Share Capital and Share Premium).
Share Based Payment Reserve: comprised of Share-based payment reserve.
•
Capital Reduction Reserve: comprised of the absorption of accumulated losses of the parent
company by the Share Premium, as resolved by the Board of Directors (refer to Note 15 – Share
•
Accumulated Loss: is comprised of cumulative historical losses of the parent company.
d. Cost of materials, net of inventory change
Cost of materials, net of inventory change, primarily consists of the costs of raw materials, contract
manufacturing, and transportation associated with production and storage of products for sale to customers, net
of inventory change.
e. Foreign currencies
IDEX Biometrics ASA’s Consolidated Financial Statements are presented in USD. The functional currency of
the parent company is USD. , while the functional currency for each foreign subsidiary is its local currency.
Transactions involving the translation to USD of values denominated in foreign currencies are classified as
monetary or non-monetary, thereby defining the measurement and recognition of foreign currency translation
gains and losses applicable to a transaction.
Monetary assets and liabilities generally have values fixed by explicit or implicit contract. Examples include
bank deposits, debt, accounts receivable, and accounts payable. Monetary assets and liabilities subject to foreign
currency adjustments are measured on the initial transaction date using the exchange rates in effect at that date.
At each subsequent reporting date and through the date of settlement (i.e., payment) or derecognition, such
monetary assets and liabilities are remeasured using the then-current exchange rate, and any foreign currency
translation gains or losses are recorded by the entity within Financial income or Financial cost.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
52
Non-monetary assets and liabilities generally are those assets and liabilities for which the recorded values are not
subject to contractual or other formal definitions (i.e., those assets and liabilities that are not classified as
monetary assets or liabilities). Non-monetary assets and liabilities are held at historical cost.
f. Research and development expenses
Expenses in this category consist primarily of the costs of services and materials used in engineering activities
and outsourced development activities to subsidiaries or external providers. Payroll costs related to research and
development employees are classified as Compensation and benefit expenses, not as research and development
expenses, on the Statement of Profit and Loss. However, the compensation paid to individual contractors serving
in engineering roles is included in Research and development expenses.
Research costs are expensed as incurred. Development expenses that do not meet the criteria of capitalization are
expensed as incurred. Development expenses are capitalized when (i) the technical feasibility of completing
development has been demonstrated, (ii) the costs of development can be measured reliably, (iii) it is probable
that IDEX Biometrics ASA will realize future economic benefits from the asset, and (iv) IDEX Biometrics ASA
has committed to complete the development. Once the development is complete and the resulting asset is
available for use, the capitalized development cost (i.e., the asset value) is amortized over its expected useful life.
IDEX Biometrics ASA applies for and has received government grants associated with certain research and
development projects. The recognized value of government grants applicable to research and development
activities are credited against research and development costs. Generally, the applications or claims for such
grants are submitted after completion of the qualifying activities. When it is realistic that the application or claim
will be successful and the amount can be determined reliably, the company credit the value of the grant against
research and development expenses for that reporting period. Due to the timing difference between the
completion of the qualifying activities, the approval of our grant application or claim, and the receipt of the funds
associated with the grant, we may record, pending receipt of funds, the value of the grant as an Account
receivable, other.
g. Convertible Debt
The terms of the convertible debt agreements are evaluated to determine whether the instruments contain both
liability and equity components, in which case the instrument is a compound instrument. Convertible debt
agreements are evaluated to determine whether they contain embedded derivatives, in which case the instrument
is a hybrid financial instrument. Based on evaluation of the terms in our convertible debt agreements, the
company determined that the conversion option was an embedded derivative and, therefore, the convertible debt
was accounted for as a hybrid financial instrument. The company has elected to assign transaction costs entirely
to the financial liability host (principal).
Estimation methods are used to determine the fair value of embedded derivatives included in hybrid financial
instruments. The determination of the effective interest used for the host contracts of hybrid financial instruments
and the liability components of compound financial instruments is dependent on the outcome of such
estimations. Evaluating the reasonableness of these estimations and the assumptions and inputs used in the
valuation methods requires a significant amount of judgment and is therefore subject to an inherent risk of error.
h. Finance income and finance cost
Finance income and finance cost consists of interest income, interest expense, valuation change of the embedded
derivative, and net foreign exchange losses (gains) arising from settlement of obligations denominated in foreign
currencies during the period and foreign currency translation adjustments recognized at period end.
i. Accounting estimates, based on the use of judgment and assumptions
The application of certain accounting standards requires management to make accounting judgments, estimates
and assumptions affecting reported amounts of assets, liabilities, income and expenses.
The main areas where the company has made significant judgments when applying the accounting policies and
that have the most material effect on the amounts recognized in the financial statements have been described in
the following notes:
•
Revenue Recognition
•
Leases
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
53
Estimates used in the preparation of these financial statements are prepared based on bespoke models, while the
assumptions on which the estimates are based rely on historical experience and other factors that management
assesses to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates
and underlying assumptions are reviewed on an ongoing basis.
The most important matters in understanding the key sources of estimation uncertainty are described in each of
the following notes:
•
Intangible
assets
•
Inventory
•
Accounts receivable, trade
•
Share-based compensation
•
Embedded derivative in convertible debt
Intangible assets
IDEX Biometrics ASA’s patents and other intellectual property rights created by the Company are capitalized
only when they satisfy the criteria for capitalization. No development costs have been capitalized in 2023 or
2022. Acquired intangible assets from external parties are capitalized initially at fair value, normally the
purchase price. Intangible assets are amortized over their useful economic lives. An assessment of impairment
losses on non-current assets is made when there is an indication of a decrease in value. An intangible asset’s
carrying amount is compared to the asset’s recoverable amount. The recoverable amount is the higher of the fair
value (less costs to sell to an independent third party) or the calculated value based on the discounted estimated
cash flow from continued use. The estimate is based on judgments of when and whether there will be an
economic benefit from the asset, and assumptions about the amounts. As of December 31, 2023, the company
determined that there were no indicators of impairment, and no impairment was recorded.
Inventory
Inventories consist of raw materials, work in process, and finished goods. Inventory is recorded at the lower of
cost and net realizable value. Impairment is assessed quarterly, based on management’s judgment of when and
whether the inventory may be sold, and assumptions about the sales price and selling costs. The estimate is
uncertain, because timing of sales are subject to many risks. Selling prices are uncertain in the market for IDEX
Biometrics ASA’s products. Reselling components or other commodity raw materials at any value may not be
easily achieved, and elements of work in progress and finished goods, if impaired (i.e., considered excess or
obsolete inventory), generally have no resale value and are held for disposal.
Accounts receivable, trade
Trade accounts receivable consist of invoiced amounts owed by customers, net of minor prepayments received
and allowances for doubtful accounts. Regarding allowances for doubtful accounts, see section
Credit and
Liquidity Risk
below.
Share-based compensation
IDEX Biometrics ASA estimates the fair value of incentive subscription rights (“SRs”) at the grant date by using
the Black-Scholes option pricing model, and record share-based remuneration cost over the vesting period of the
SRs. The valuation is based on share price and exercise price, share price volatility, interest rates, and the
expected term of the SRs, based on historical data. The parameters may in the future deviate from the historical
observations. The accrued cost of the employment taxes associated with the earned intrinsic value of the SRs will
vary with share price, which is a highly unpredictable parameter.
IDEX Biometrics ASA estimates the fair value of the Employee Share Purchase Plan (“ESPP”) at the grant date,
i.e. the first date of the contribution period, by using the Black-Scholes option pricing model. The share-based
compensation is expensed over the contribution period. The valuation is based on share price and exercise price,
share price volatility, interest rates, and the term of the contribution period. The parameters may in the future
deviate from the historical observations.
The parent company recognizes the full notional cost of the share-based remuneration programs for the group,
and accrues the potential employer’s tax. Upon exercise or purchase, the actual employer tax is recognized by the
entity the grantee is assigned to.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
54
j. Accounting Standards
Amendments to IAS 1 and IFRS Practice statement 2
–Replacing Significant accounting policies with Material
accounting policies — The amendments replace the requirement to disclose the ‘significant’ accounting policies
with a requirement to disclose the ‘material’ accounting policies. The amendments to IAS 1 are applicable for
annual periods beginning on or after January 1, 2023. The Company has revised the accounting policy
information disclosures for 2023 to become consistent with the amended IAS 1.
Other standards, amendments to standards and interpretation of standard, effective 1 January 2023
Other amendments to standards or interpretations of standards effective as of 1 January 2023 and adopted by the
Company were not material to the Company’s financial statements upon adoption.
Other standards, amendments to standards, and interpretations of standards, issued but not yet effective, are
either not expected to materially impact, or are not expected to be relevant to, the Company’s financial
statements upon adoption.
Climate Change
As of December 31, 2023, the possible future financial impact to the Company resulting from climate change is
uncertain. Given the nature of the Company’s operations and products, the Company believes any such impact
not to be material. The Company is monitoring current and expected climate change effects, as well as measures
considered or implemented by government and industry, in order to minimize any negative impact and to take
advantage of any favorable opportunities that may arise.
Financial
risks
IDEX Biometrics ASA emphasizes capital preservation and liquidity in managing its cash, which is held in bank
accounts, which are denominated in USD, NOK, and GBP.
Short-term capital requirements include funding operating losses and supporting net working capital
requirements. Reflecting the Company’s operating model, investments in property, plant, and equipment are
modest, and have been funded with proceeds from issuance of Ordinary Shares. IDEX Biometrics ASA has been
funded through the issuance of Ordinary Shares since it was established in 1996. In 2023, the parent company
took up a convertible loan.
The current cash position and financial forecasts indicate that in 2024, the Company will need significant
funding in the form of equity injection, debt or other. The Board is considering various funding options and
believes that the Company will obtain further financing for its planned operation, growth and working capital
requirements. Refer to the comments above regarding going concern.
Interest Rate Risk
As of December 31, 2023, IDEX Biometrics ASA had cash of $10.8 million. The company’s exposure to interest
rate sensitivity is influenced primarily by changes in the underlying bank interest rates in the various currencies.
IDEX’s cash is held in bank accounts, all of which are considered highly liquid. Accordingly, an immediate one
percentage point change in interest rates would not have a material effect on the fair market value the Company’s
cash accounts.
The convertible loan is the only debt to financial lenders. The Company is not exposed interest rate associated
with variable rate debt because the interest rate is fixed for the duration of the loan.
When calculating the recorded and carrying values of leases, interest rates are a variable in the calculations of
these values, but do not represent a meaningful level of risk of material changes in these values.
Currency Risk
The Company’s trading transactions are denominated in U.S. Dollars (“USD”), which is IDEX Biometrics
ASA’s functional and presentation currency. The company incurs a portion of its expenses in currencies other
than the USD, primarily British Pounds (“GBP”), Norwegian Krone (“NOK”), Euro ("EUR"), and Chinese Yuan
(“CNY”). The company's cost level is exposed to changes in the rates of exchange between the USD and these
currencies. Reflecting its functional currency and domicile, IDEX Biometrics ASA holds cash primarily in USD
and only minor amounts in NOK and GBP. The company does not use forward exchange contracts or other
hedging strategies to manage exchange rate exposure.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
55
In addition to USD, the parent company holds bank deposits in NOK and GBP; receivables in NOK, GBP and
EUR; and payables in NOK, GBP and EUR, and convertible debt in NOK. A 10% change in the relative value of
USD to NOK would have had a corresponding effect on the carrying value of the Company’s debt of
approximately $800 thousand at December 31, 2023, and was not material at December 31, 2022. A 10% change
in the value of USD to CNY or EUR was not material at December 31, 2023 or December 31, 2022l. A 10%
increase in the value of the GBP relative to the USD would have had a corresponding effect on the carrying value
of the parent company's net financial assets and liabilities in foreign currencies at December 31, 2023 of
approximately $980 thousand.
Credit and Liquidity Risk
IDEX extends customary credit terms to customers, reflecting its assessment of their individual creditworthiness.
The Company does not believe it was exposed to significant credit risk associated with its Accounts receivable,
trade, balance as of December 31, 2023. (See Note 14 – Accounts receivable.) If revenue continues to increase,
such balances from a broadening customer base will expand, potentially increasing the credit risk at large.
As of December 31, 2023, the parent company had extended advances to IDEX UK denominated in GBP, in the
equivalent to
$10.1 million. It is expected that IDEX UK will eventually repay these advances.
The company believes it faces minimal risk on its cash position, as the cash is on deposit with reputable,
regulated banks.
IDEX Biometrics ASA aims to increase revenue generation through sales of its products; however, it does not
currently have the cash resources to fully meet its operating commitments for the twelve months following the
date of the financial statements. This casts significant doubt on the company’s ability to continue as a going
concern.
Revenue recognition
Revenue is recognized when control of the promised goods or services is transferred to a customer, in an amount
reflecting the consideration the company expects to be entitled to in exchange for those goods or services. Sales,
value added, and other taxes incurred concurrent with revenue producing activities are excluded from revenue.
Shipping and handling charges to customers are included in revenue, and costs incurred associated with
outbound freight after control over a product has transferred to a customer are accounted for as revenue
reductions.
The company’s primary source of revenue comes from the sale of its products, which principally are biometric
fingerprint modules consisting of a sensor and an ASIC in a single package. Each module also contains
embedded software. The hardware and the embedded software are interdependent in that each needs the other to
provide the intended fingerprint authentication function to the customer. The primary customers for the
company’s products are smart card manufacturers and other solution integrators. The company currently does not
use distributors for the resale of its products.
The company may license its intellectual property under right to use licenses, in which royalties due to the
company are based upon a percentage of the licensee’s sales and/or unit volumes. For the years 2023 and 2022,
the company recognized no revenue from licensing its intellectual property.
Certain contracts with customers contain multiple performance obligations, which typically may include a
combination of non-recurring engineering (“NRE”) services, prototype units, and production units. For these
contracts, if the individual performance obligations are distinct, they are accounted for separately. Generally, the
company has determined the NRE services and prototype units represent one distinct performance obligation,
and the production units represent a separate distinct performance obligation. For such arrangements, revenue is
allocated to each performance obligation based on its relative standalone selling price, based on prices charged to
other customers or based on expected cost plus a customary profit margin. The company generally recognizes
revenue for NRE services and prototype units at the point in time when a defined milestone under the
arrangement is completed and control is transferred to the customer, which is generally the shipment or delivery
of the prototype units.
The company also recognizes revenue from contracts with customers associated with the delivery of certain
services, ranging from standalone NRE to advisory services. Generally, these contracts include a single
performance obligation (i.e., service element), and revenue is recognized upon the completion of the defined
service element and final acceptance by the customer of any project deliverable. However, revenue from services
may be recognized over time, if recognition of multiple service elements is based on completion of substantive
and results-based contractual milestones, and acknowledgement by the customer of such completion.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
56
The company does not have material obligations or reserves for warranties, returns, or customer refunds.
There were no contract asset or contract liability balances at December 31, 2023 or 2022.
4.
Segment Information
IDEX manages its operations as a single segment for the purposes of assessing performance and making
operating decisions. IDEX operates as one operating segment, fingerprint imaging and authentication
technology. IDEX has determined that its chief operating decision maker is its Chief Executive Officer. The
Company’s chief operating decision maker reviews the Company’s financial information on an aggregated basis
for the purposes of allocating resources and assessing financial performance.
IDEX Biometrics ASA categorizes customers by geographic region utilizing the addresses to which it invoices
its products or services. The company’s product and service revenue by geographic region is as follows:
Year Ended December 31,
($000s)
2023
2022
Product Revenue:
Europe, Middle East, and Africa
$
3,029
$
3,574
Americas
975
252
Asia-Pacific
126
63
Total product revenue
4,131
3,889
Service Revenue:
Europe, Middle East, and Africa
2
10
Americas
—
193
Asia-Pacific
6
—
Total service revenue
8
203
Total Revenue
$
4,138
$
4,091
The Company’s revenue has historically come from a limited number of customers. During 2023, the top two
customers accounted for approximately 47% and 20% of the Company’s revenue, respectively, and in 2022, the
top two customers accounted for 48% and 24% of revenue, respectively.
5. Compensation and benefits
Year Ended December 31,
($000s)
2023
2022
Salaries
$
777
$
814
Social security taxes
100
97
Pension contribution
22
22
Other personnel expenses
130
149
Share
‐
based compensation
1,283
2,161
Net employer’s tax on share
‐
based compensation
(4
)
(337
)
Total
$
2,308
$
2,906
Average no. of employees (full-time equivalents)
In the parent company
2
2
In the group
76
88
At the end of 2023, there were 1 female and 1 male employee in IDEX Biometrics ASA (2022: 1 female and 1
male). Salary statistics per gender have not been prepared.
IDEX Biometrics ASA provides a contribution-based pension insurance plan for all its employees. The plan
satisfies the Norwegian mandatory service pension rules (obligatorisk tjenestepensjon, OTP). The contribution is
2% and 10% up to and over a threshold, respectively, of the employee’s annual eligible salary. The pension plan
is a fully insured, defined contribution plan.
In 2023, IDEX operated two share-based compensation programs: Incentive subscription rights (SRs), and an
employee share purchase plan (ESPP). The parent company recognizes the full notional cost of the programs for
the group, and accrues the potential employer’s tax. The expense is non-cash, and the same amount is added to
equity. The notional cost of SRs is based on the fair value of SRs at grant. The cost is expensed over the vesting
period of each tranche of grant, which means the cost is front-loaded over the duration. The potential employer’s
tax liability is calculated on the intrinsic value of the pro-rata earned subscription rights at year end, and the net
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
57
change from the year before is expensed or reversed. Upon exercise, the notional cost remains as recognized,
while actual employer’s tax, if any, on exercise is recognized by the relevant entity when incurred. The cost of
the ESPP is the fair value at enrolment date into ESPP, and is expensed over the six months contribution period.
The fair value is determined using a Black-Scholes option pricing model, based on share prices quoted on the
Oslo Børs, and published interest rates. Any related employer’s tax is recognized by the relevant entity on the
date the employer’s tax is incurred, which date varies by jurisdiction and employee disposition.
Remuneration to officers
2023
Remuneration to the group’s CEO and officers reporting to the CEO. All officers are employed in the subsidiary
in the country where they work, or a contractor to the parent company.
($000s)
Salary
Incentive
variable
pay
Pension
contri-
bution
Other
benefits
Share-
based
remune-
ration (1)
Total
Vince Graziani, CEO
$
360
$
62
$
—
$
28
$
108
$
558
John Kurtzweil, CFO (2)
$
55
$
—
$
—
$
—
$
1
56
Eileen Wynne, interim CFO (3)
141
—
—
—
—
141
Anthony Eaton, CTO
249
82
15
9
48
403
Catharina Eklof, CCO (4)
466
72
—
—
64
602
Total
$
1,271
$
216
$
15
$
37
$
221
$
1,760
(1)
The amount is the amortised cost in the year under IFRS 2 Share-based payments, for incentive subscription
rights. The amount for ESPP is the option value at date of enrollment earned in 2022. Both amounts
represent an upfront calculation and do not necessarily represent any gain from the plans. Any gain on
subscription rights is reported separately in the year of exercise.
(2)
Mr. Kurtzweil joined IDEX as Chief Financial Officer in September 2023.
(3)
Ms. Wynne was IDEX interim Chief Financial Officer from August 2022 to September 2023. Ms. Wynne is
an individual contractor and the salary and incentive amounts reported are the gross invoiced amounts.
(4)
Ms. Eklof is an individual contractor on assignment for IDEX as of June 1, 2021. The salary and incentive
amounts reported are the gross invoiced amounts.
Salary, bonus and other benefits, whether cash or in kind, are the amounts declared for tax purposes for
the full year 2023, while pension cost and share-based remuneration are expensed amounts in the year.
Gains on exercise of incentive subscription rights, if any, are reported separately. Employers' tax is not
included. The bonuses paid in 2023, if any, relate to achievements in 2022.
No officers exercised incentive subscription rights in 2023.
2022
($000s)
Salary
Incentive
variable
pay
Pension
contri-
bution
Other
benefits
Share-
based
remune-
ration (1)
Total
Vince Graziani, CEO
$
400
$
—
$
—
$
26
$
139
$
565
Eileen Wynne, interim CFO (2)
37
—
—
—
—
37
James A. Simms, former CFO (2)
290
—
—
21
(56
)
255
Anthony Eaton, CTO
237
—
14
—
74
325
Catharina Eklof, CCO (3)
398
—
—
—
114
512
Total
$
1,362
$
—
$
14
$
47
$
271
$
1,694
(1)
The amount is the amortised cost in the year under IFRS 2 Share-based payments, for incentive subscription
rights. The amount for ESPP is the nominal discount on shares acquired in 2021. Both amounts represent an
upfront calculation and does not necessarily represent any gain from the plans. Any gain on subscription
rights, is reported separately in the year of exercise.
(2)
Ms. Wynne joined IDEX as Interim Chief Financial Officer as of August 15, 2002. Mr. Simms left his
position with IDEX as of the same date. Ms. Wynne is an individual contractor and the salary and incentive
amounts reported are the gross invoiced amounts.
(3)
Ms. Eklof is an individual contractor on assignment for IDEX. The salary and incentive amounts reported are
the gross invoiced amounts.
Salary, bonus and other benefits, whether cash or in kind, are the amounts declared for tax purposes for
the full year 2022, while pension cost and share-based remuneration are expensed amounts in the year.
Gains on exercise of incentive subscription rights, if any, are reported separately. Employers' tax is not
included. The bonuses paid in 2022 relate to achievements in 2021.
No officers exercised incentive subscription rights in 2022.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
58
Grants of incentive subscription rights to officers
Year ended December 31,
Grant date
Exercise price
(NOK per share)
Number of
subscription
rights
2023
Vincent Graziani, CEO
August 11, 2023
0.68
2,500,000
John Kurtzweil, CFO
November 8, 2023
0.46
500,000
Eileen Wynne, former interim CFO
—
Anthony Eaton, CTO
August 11, 2023
0.68
630,900
Catharina Eklof, CCO
August 11, 2023
0.68
630,900
2022
Vincent Graziani, CEO
August 10, 2022
1.18
1, 210,400
Eileen Wynne, interim CFO
—
James A. Simms, former CFO
—
Anthony Eaton, CTO
February 23, 2022
2.08
836,900
August 10, 2022
1.18
210,300
Catharina Eklof, CCO
August 10, 2022
1.18
210,300
The table above reports the number of shares and other instruments as registered as of December 31,
2023, and on earlier dates, i.e., before the 5:1 share consolidation (reverse split) taking effect on record
date January 10, 2024. The incentive subscription rights plan has adjustment clauses so that the number
of subscription rights and the exercise prices are adjusted by the same ratio. See also notes 23 – Share-
based compensation and 28 – Subsequent events.
Guidelines for remuneration to officers
IDEX’s remuneration policy for the supervisory board and executives as well as guidelines for incentive
programs were approved at the Annual General Meeting on May 12, 2021.
Except for appropriate travel advances, IDEX has not made any advance payments or issued
loans to, or guarantees in favour of, any members of the management.
Share-based remuneration to officers
The officers participate in the same share-based programs approved by the general meeting, that are in
effect for all employees. In 2023 IDEX operated a subscription rights-based incentive program (SR
program) and an employee share purchase plan (ESPP).
SR grants are scaled based on position, results and competitive considerations. The purpose of SR grants
is to strengthen the company by providing to employees, management and individual contractors
additional performance incentive.
The ESPP allows the participant to convert up to 20% of the base salary into shares, by contributing an
amount from each paycheck during six months, and purchasing new issue shares at 15% discount on
lower of the share price at beginning and end of the contribution period.
Implementation and effect of the policies on remuneration to officers
Salary, pension and any paid bonuses will attract employer’s tax which will be expensed simultaneously
with the paid or earned remuneration.
Actual incentive payments in the respective years are reported in the tables above. The incentives may
have been earned partly or in full in the calendar year before the payment was made. Incentives are paid
only after evaluation against criteria has been conducted. Until the evaluation has taken place, an overall
accounting accrual covering all participants in the bonus plan has been made. The accrual is not
individual and therefore not included in the table of remuneration to officers.
The share-based remuneration reported in the tables is the period’s notional cost of the respective officers’
subscription rights. The equity effect of this cost is nil because the contra item is a notional equity injection of
equal amount. In addition, the cost of employer’s tax on the earned intrinsic value on the balance sheet date, is
accrued. The value varies with the share price and may entail a net reversal of cost. On exercise, the actual
employer’s tax is expensed, and the accrual adjusted to cover the remaining outstanding subscription rights. The
actual cost of the employer’s tax is normally funded by the equity paid in on exercise. Any exercises of
subscription rights by officers in the respective years are disclosed above.
For the shareholders, an actual or possible exercise will represent a dilution. At the end of 2022, the number of
outstanding subscription rights to present officers including their close associates was 12,341,400,
corresponding to 1.1 percent of the share capital (2021: 12,870,900 outstanding subscription rights to then-
present officers, corresponding to 1.3 percent of the share capital at the time).
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
59
Compensation paid to the board of directors is presented in Note 24.
6. Research and development expenses
Research costs are expensed when incurred. Development costs are capitalized and held in the balance sheet
only if they satisfy the criteria for capitalization. The same applies to IDEX Biometrics ASA’s patents and other
intellectual property rights created by IDEX. IDEX has not capitalised any development costs in 2023 or 2022.
Development costs related to creation of intellectual property have been expensed when incurred.
Research and development expenses include the cost of independent contractors assigned to engineering roles.
Government grants recognized by the Company in support of research and development activities are credited
against research and development costs when it is realistic that the application or claim will be successful and the
amount can be determined reliably.
Year Ended December 31,
($000s)
2023
2022
Gross R&D expenses
$
13,392
$
16,380
Government grants credited to cost
(480
)
(301
)
Net R&D expenses
$
12,912
$
16,079
7. Government grants
Year Ended December 31,
($000s)
2023
2022
SkatteFunn (recognized as cost reduction of R&D expenses)
$
480
$
301
The Norwegian SkatteFUNN is a government program supporting research and development
activities in Norway. Under the program, the Company, in its current loss position, is eligible for a
cash grant in support of approved projects, subject to meeting the requirements of the Research
Council of Norway.
The recognized amounts in 2023 and 2022 represent IDEX’s claim based on the cost of the approved
project applications.
8. Audit and audit fees
Ernst & Young AS (EY) is the auditor of the group as well as the parent company. The audit fees in
the
respective years are as follows:
Year ended December 31,
($000s)
2023
2022
Audit services
$
141
$
381
Audit-related services
37
43
Tax services
8
7
Other services
-
4
Total
$
186
$
435
Audit services
represents the fees for the audit that must be performed by EY in order to issue an opinion on the
parent company’s financial statements and to issue reports on the company’s statutory financial statements. The
definition also includes fees for certain other audit services, which are services only the designated independent
auditor reasonably can provide, such as the auditing of non-recurring transactions, the application of new
accounting policies, and limited reviews of quarterly financial results.
Audit-related services
represents fees for other assurance and related services provided by EY, but not limited to
those that only reasonably can be provided by EY, which are reasonably related to the performance of the audit.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
60
Tax services
represent fees, approved by the Audit Committee, for tax services not related to the audit provided
by EY.
Other services
represent other fees, approved by the Audit Committee, for services not related to the audit
provided by EY.
9. Income tax
Tax expense for the year
Year ended December 31,
($000s)
2023
2022
Payable taxes on the result of the year
$
—
$
—
Change in deferred tax asset/liability
—
—
Income tax expense
$
—
$
—
Computation of payable taxes for the year
Year ended December 31,
($000s)
2023
2022
Profit (loss) before taxes
$
(25,141
)
$
(31,023
)
Permanent differences
(227
)
1,656
Changes in temporary differences
370
(170
)
Basis for payable taxes
$
(24,998
)
$
(29,537
)
Calculated payable taxes on current year’s loss. 22 % tax,
representing payable taxes on current year’s loss in Norway
—
—
Payable taxes on current year’s result
$
—
$
—
Reconciliation of tax expense (benefit)
Year ended December 31,
($000s)
2023
2022
Profit (loss) before taxes
$
(25,141
)
$
(31,023
)
Norway statutory tax rate of 22%
(5,531
)
(6,825
)
Tax on permanent differences
(50
)
364
Change in deferred tax asset not recognized on December 31
5,581
6,461
Actual tax expense
$
—
$
—
The change in deferred tax asset not recognized contains foreign currency exchange effects on the loss carry
forward in Norway, denominated in NOK.
There are no deferred tax charges to other comprehensive income in 2023 or 2022 and no tax payable balances.
Elements of deferred tax
Year ended December 31,
($000s)
2023
2022
Employer’s tax on share
‐
based compensation
$
(19
)
$
(24
)
Fixed Assets differences
715
375
Inventory differences
(869
)
(131
)
Other differences
(13
)
(20
)
Losses carried forward
(267,104
)
(252,798
)
Basis for calculation of deferred taxes
(267,290
)
(252,598
)
Calculated net deferred tax expense (benefit) 22%
58,804
(55,572
)
Unrecognized deferred tax asset
(58,804
)
55,572
Deferred tax liability (asset) in the balance sheet
$
—
$
—
The accumulated unrecognized deferred tax assets amounting to $58,804 and $55,572 at December 31, 2023 and
2022, respectively, are related to tax losses carry forward in Norway. IDEX Biometrics ASA has not generated
taxable profits in prior years. At December 31, 2023 there was not sufficiently convincing evidence that
sufficient taxable profit will be generated, against which the unused tax losses could be applied.
Consequently, no deferred tax asset has been recognized. There are no restrictions as to how long tax losses may
be carried forward in Norway.
10. Loss per share
A 5:1 share consolidation (reverse split) was completed at record date January 10, 2024. The per share
calculations for all periods presented here are based on the new number of shares.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
61
The profit or loss per share is calculated by dividing the profit (loss) for the period by the weighted average
number of ordinary shares outstanding for the period. Loss per share is calculated per basic share (i.e., without
consideration for the anti-dilutive effect of exercisable subscription rights).
Year Ended December 31,
2023
2022
2021
Net loss for the year ($000s)
$
(26,629
)
$
(32,662
)
$
(32,552
)
Number of ordinary shares issued at December 31
279,402,130
233,265,317
202,077,691
Weighted average basic number of ordinary shares
253,042,411
205,386,514
183,769,485
Dilution effect (treasury stock method)
1,037,665
1,011,631
4,317,222
Weighted average diluted number of shares
254,080,076
206,398,145
188,086,707
Loss per share for the year (basic and diluted*)
$
(0.11
)
$
(0.16
)
$
(0.18
)
* The effects of potentially dilutive Ordinary Shares issuable upon exercise of outstanding subscription rights are not
included in the calculation due to the Company’s net losses for the periods presented, as their effect would be anti-
dilutive.
11. Goodwill and other intangible assets
Year ended December 31, 2023
($000s)
Goodwill
Acquired
patents
Total
Cost at December 31, 2022
$
968
$
5,173
$
6,141
Additions
—
—
—
Disposals at cost
—
—
—
Cost at December 31, 2023
968
5,173
6,141
Accumulated amortization at December 31, 2022
—
3,685
3,685
Amortization
—
477
477
Accumulated amortization of disposed items
—
—
—
Accumulated amortization at December 31, 2023
—
4,162
4,162
Carrying amount at December 31, 2023
$
968
$
1,011
$
1,979
Year ended December 31, 2022
($000s)
Goodwill
Acquired
patents
Total
Cost at December 31, 2021
$
968
$
5,173
$
6,141
Additions
—
—
—
Disposals at cost
—
—
—
Cost at December 31, 2022
968
5,173
6,141
Accumulated amortization at December 31, 2021
—
3,208
3,208
Amortization
—
477
477
Accumulated amortization of disposed items
—
—
—
Accumulated amortization at December 31, 2022
—
3,685
3,685
Carrying amount at December 31, 2022
$
968
$
1,488
$
2,456
There is only one cash generating unit in the Company and goodwill is allocated to this. IDEX performed the
annual impairment test on December 31, 2023. Based on the 2023 assessment, no impairment charge has been
made. The Company used a discounted cash flow model which utilized Level 3 measures that represent
unobservable inputs. Key assumptions used to determine the estimated fair value include: (a) internal cash flows
forecasts for 4 years following the assessment date, including expected revenue growth, costs to produce,
operating profit margins and estimated capital needs; (b) an estimated terminal value using a terminal year long-
term future growth rate of 3.0% determined based on the long-term expected prospects of the Company; and (c)
a discount rate (post-tax) of 12 % which reflects the weighted-average cost of capital adjusted for the relevant
risk associated with the Company's operations. A stress-test with reasonably possible changes in the key
assumptions does not indicate that the carrying amount will exceed the recoverable amount.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
62
Acquired identifiable intangible assets, consisting primarily of patents, are held at cost, less accumulated
amortization and impairment charges. Other intangible asset balances as of December 31, 2023, and December
31, 2022, reflected the following activity:
Year Ended December 31,
($000s)
2023
2022
Amortization period (straight-line, in years)
10 - 17
10 - 17
Cost at the beginning of the year
$
5,173
$
5,173
Additions
—
—
Impact of currency translation
—
—
Cost at the end of the year
$
5,173
$
5,173
Accumulated Amortization at the beginning of the year
$
3,685
$
3,208
Amortization
477
477
Impact of currency translation
—
—
Accumulated Amortization at the end of the year
4,162
3,685
Carrying amount at the end of the year
$
1,011
$
1,488
Acquired patents are capitalized and amortized over the estimated useful life, which is the lifetime of the
respective patent(s)
.
12. Property, plant and equipment
($000s)
Plant and
machinery,
fixtures and
fittings
Office
furniture
and office
equipment
Total
Depreciation period, straight line, in years
3 – 10
3 – 10
Cost at December 31, 2022
$
679
$
6
$
685
Additions
187
—
187
Disposals at cost
—
—
—
Cost at December 31, 2023
866
6
872
Accumulated amortization at December 31, 2022
315
3
318
Amortization
250
1
251
Accumulated amortization of disposed items
—
—
—
Accumulated amortization at December 31, 2023
565
4
569
Carrying amount at December 31, 2023
$
302
$
2
$
304
($000s)
Plant and
machinery,
fixtures and
fittings
Office
furniture
and office
equipment
Total
Depreciation period, straight line, in years
3 – 10
3 – 10
Cost at December 31, 2021
$
679
$
4
$
683
Additions
—
2
2
Disposals at cost
—
—
—
Cost at December 31, 2022
679
6
685
Accumulated amortization at December 31, 2021
218
2
220
Amortization
97
1
98
Accumulated amortization of disposed items
—
—
—
Accumulated amortization at
December 31, 2022
315
3
318
Carrying amount at
December 31, 2022
$
364
$
3
$
367
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
63
13. Leases
IDEX Biometrics ASA leases an office in Oslo for use by employees and contractors.
There are
no exposure to future variable lease payments that are not reflected in the measurement of lease
liabilities.
Right-of-use assets
Year ended December 31,
($000s)
2023
2022
Depreciation period, straight line, years
3 – 5
3 – 5
Cost at the beginning of the year
$
76
$
66
Additions
—
77
Disposals at cost
—
(66
)
Currency translation
—
—
Cost at December 31
76
76
Accumulated depreciation at the beginning of the year
14
54
Depreciation
24
25
Accumulated depreciation of disposed items
—
(65
)
Currency translation
—
—
Accumulated depreciation at December 31
38
14
Carrying amount at December 31
$
39
$
62
Leases included in the statements of profit and loss
Year ended December 31,
($000s)
2023
2022
Amortization and depreciation
24
25
Finance cost
3
2
Leases included in the statements of financial position
Year ended December 31,
($000s)
2023
2022
Balance at the beginning of the year
$
62
$
10
Additions
—
75
Accretion of interest
3
2
Payments
(26
)
(25
)
Balance at December 31
$
39
$
62
Non-current
13
13
Current
19
49
Balance at December 31
$
32
$
62
14. Accounts receivable
Accounts receivable, trade, includes amounts billed and currently due from customers. The amounts due are
stated at their estimated realizable value. The Company’s payment terms vary by the type and location of its
customers and the products or services offered, although terms generally include a requirement of payment
within 30 to 60 days. When necessary, the Company maintains allowances for doubtful accounts for estimated
losses resulting from the inability of its customers to make required payments, based on assessments of
customers’ credit-risk profiles and payment histories. If the financial condition of the Company’s customers were
to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be
required. The Company does not require collateral from its customers, although there have been circumstances
when the Company has required cash in advance (i.e., a partial down-payment) to facilitate orders in excess of a
customer’s established credit limit. To date, such amounts have not been material.
Expected credit loss accrued for at the end of 2023 was 144 thousand, no loss was expected for 2022. There were
no other provisions for expected credit losses in 2023 and 2022.
The balances reported as Accounts receivable, other, consist primarily of amounts due to the Company
associated with Value Added Tax refund activity and amounts due to the Company from governments associated
with approved research and development grants.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
64
Maturity of current receivables
Year ended December 31, 2023
($000s)
Less than
3 months
3-6 months
6-12
months
Total
Accounts receivable, other
$
58
$
—
$
467
$
525
Accounts receivable, trade
1,068
—
—
1,068
Receivables from group companies
10,366
—
—
10,366
Total
$
11,493
$
—
$
467
$
11,960
Maturity of current receivables
Year ended December 31, 2022
($000s)
Less than
3 months
3-6 months
6-12
months
Total
Accounts receivable, other
$
164
$
—
$
301
$
465
Accounts receivable, trade
1,349
—
—
1,349
Receivables from group companies
7,597
—
—
7,597
Total
$
9,110
$
—
$
301
$
9,412
No group or other receivables were overdue at the end of 2023 or 2022. A significant share of the receivables
from group companies is related to IDEX UK. IDEX UK operated at a loss in 2023 and 2022 but is expected to
eventually repay the receivable.
15. Other current and non-current financial assets
Non-current receivables
December 31,
($000s)
2023
2022
Long-term loans to group companies
$
—
$
—
Non-current receivables
7
7
Balance at December 31
$
7
$
7
The receivables are deposits for leasehold payments and are held at nominal value.
IDEX Biometrics ASA had no contingent assets at the end of 2023 or 2022.
16. Payables and Financial Liabilities
Except for the convertible debt in note 17 – Convertible debt, the Company’s undiscounted payables and other
financial liabilities at December 31, 2023, and December 31, 2022, were as follows:
Payables and Financial liabilities excluding
interest-bearing loans
Maturity as of December 31, 2023
($000s)
Less
than 3
months
3-6
months
6-12
months
1-5 years
More
than 5
years
Total
Non-current lease liabilities
$
—
$
—
$
—
$
—
$
—
$
—
Accounts payable
721
—
—
—
—
721
Current lease liabilities
5
5
9
—
—
19
Short-term payables to group companies
6,794
—
—
—
—
6,794
Other current liabilities
1,087
328
—
—
—
1,414
Total
$
8,606
$
332
$
9
$
—
$
—
$
8,947
Payables and Financial liabilities
Maturity as of December 31, 2022
($000s)
Less
than 3
months
3-6
months
6-12
months
1-5 years
More
than 5
years
Total
Non-current lease liabilities
$
—
$
—
$
—
$
—
$
—
$
—
Accounts payable
1,400
—
—
—
—
1,400
Current lease liabilities
12
12
23
—
—
46
Short-term payables to group companies
5,057
—
—
—
—
5,057
Other current liabilities
861
324
—
—
—
1,185
Total
$
7,330
$
335
$
23
$
—
$
—
$
7,688
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
65
Other current liabilities include accruals for earned compensation, vacation days not taken, ESPP contributions
and accruals for goods and services received but not yet invoiced by the supplier.
Interest expense including interest on lease liabilities and convertible debt in statement of profit and loss in
finance expense was $5.3 thousand in 2023 and $2 thousand in 2022. Remaining amount of finance expense is
currency losses.
Other current liabilities include the estimated employer’s tax liability related to share-based compensation
amounted to $19 on December 31, 2023 and $24 on December 31, 2022. The employer's tax will be due only if
and when the incentive subscription rights are exercised. The exercise will, in all likely circumstances, fund the
payable employer’s tax.
Except for the convertible debt in note 17 – Convertible debt, IDEX Biometrics ASA had no other significant
current or non-current financial obligations at the end of 2023 or 2022. IDEX Biometrics ASA had no contingent
liabilities at the end of 2023 or 2022.
17. Convertible debt
Amounts in USD 1,000
Interest rate
Maturity
December 31,
2023
Convertible bond
6%
Bimonthly amortization until June 28, 2027
Convertible debt
$
5,076
Embedded derivative
3,545
Total:
$
8,621
In December 2023, IDEX Biometrics ASA entered into a convertible debt financing agreement. The company
issued NOK 100 million in convertible bonds at 6.0% interest p.a. The company received NOK 92 million after
deduction of the issue discount. The debt will be redeemed every two months in 21 equal installments of NOK
4.8 million plus accrued interest. The lender can request up to two additional installments to be paid in each
period between the planned term dates. The loan is denominated in NOK. Transactions and balance amounts are
reported in USD at the exchange rates at the respective dates.
The bond holder may elect to convert the outstanding loans into IDEX ordinary shares at any time prior to
repayment at a conversion price of NOK 3.655, which is 125% of the Reference Share Price at December 22,
2023, when taking into account the 5:1 share consolidation (reverse split) was effective on the record date of
January 10, 2024. This share consolidation was approved by the shareholders on December 21, 2023, along with
a share capital reduction which was completed on February 26, 2024. The company may elect to pay the interest
payments, principal payments, or both with shares in lieu of cash payments. Any repayment in shares will be
converted at 90% of the prevailing market price of the shares.
The convertible bonds are callable by the lender at any point. Because the company does not have an
unconditional right to defer payment beyond twelve months, both the host contract and the embedded derivative
are classified as current liabilities.
The conversion option was accounted for as an embedded derivative and was recognized separately from the host
contract as a financial liability at fair value through profit or loss. The host contract is recognized at amortized
cost. At inception, the company determined the value of the conversion option to be NOK 36.8 million and the
residual value of the host contract to be NOK 51.2 million, including NOK 4.0 million of transactions costs.
During 2023, the company recognized a gain on revaluation of the embedded derivative of approximately NOK
887 thousand that was recorded in financial income, and recorded interest expense of NOK 217 thousand.
18. Fair value measurement
The Company has no financial assets that are measured at fair value and the only financial liability that is
measured at fair value at the end of each reporting period is the embedded conversion option in its convertible
debt.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
66
The use of different estimation, methodologies and assumptions could have a material effect on the estimated fair
value amounts. The methodologies are as follows:
•
Cash, cash equivalents, accounts receivable, other receivables, accounts payable and accrued
liabilities: due to the short-term nature of these balances, carry amounts approximate fair value.
•
At December 31, 2023, the carrying amount of the debt component was calculated using the
effective interest rate of the debt component of the convertible note issued in December 2023.
•
The fair value of the embedded derivative related to the convertible debt is recalculated at the end of
each reporting period. The fair value measured is based on significant observable input (Level 3).
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments
by valuation technique:
•
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
•
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair
value are observable, either directly or indirectly.
•
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are
not based on observable market data
The following table provides a reconciliation of the changes in items measured at fair value and categorized
within Level 3. See Note 17 – Convertible debt. There were no items categorized as Level 3 in 2022.
Amounts in USD 1,000
December 31, 2023
December 31, 2022
Convertible debt
Host contract of convertible debt
5,076
—
(Gains)/Losses recognized in Consolidated Statements of Profit and
Loss
—
—
Derivative instrument related to convertible debt
3,545
—
(Gains)/Losses recognized in Consolidated Statements of Profit and
Loss
(87
)
—
Total:
8,534
—
The host contract of the convertible debt, which at initial recognition was the balance of the total convertible debt
and the derivative instrument, is held at amortized cost. The valuation of the host contract, which equals its
carrying amount, assumes that the discount rate for valuation purposes is equal to the effective interest rate of the
convertible debt.
The (gains)/losses included in the Consolidated Income Statements were recognized within financial income for
gains and financial costs for losses.
19. Inventory
Inventories consist of raw materials, work in process, and finished goods. Materials and components purchased
for use in research and development activities are expensed at the time of purchase and excluded from inventory.
Inventory is recorded at the lower of cost and net realizable value, less impairment, if any.
December 31,
2023
2022
($000s)
Cost
Reserves
Net
Cost
Reserves
Net
Raw materials
$
3,795
$
—
$
3,795
$
2,280
$
—
$
2,280
Work in progress
102
—
102
1,486
—
1,486
Finished goods
3,356
(869
)
2,487
812
(130
)
681
Total
$
7,254
$
(869
)
$
6,384
$
4,577
$
(130
)
$
4,447
In 2023 and 2022, $251 thousand and $154 thousand of materials, respectively, were used in product
development and was charged to development expense.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
67
20. Cash and cash equivalents
Of the cash and cash equivalents, employees’ withheld payroll tax deposits amounted to $29
thousand
and $26
thousand
at the end of 2023 and 2022, respectively. Only the withheld payroll tax deposits were restricted.
Deposits for facilities rent or utilities are reported as Non-current receivables and have not been included in cash
equivalents.
21. Restricted assets
For the office lease, IDEX Biometrics ASA has placed an amount corresponding to about 3 months’ rent and
allocations of its leasehold facilities in an escrow account in the landlord’s name for the benefit of the landlord.
Such escrow accounts and other deposits amounted to $7
thousand
at the end of 2023 and $7
thousand
at the end
of 2022
in non-current receivables
.
No other assets have been pledged as security or are otherwise restricted.
22. Share capital and share premium
This note reports the number of shares as registered as of December 31, 2023, and on earlier dates, i.e., before
the 5:1 share consolidation (reverse split) taking effect on record date January 10, 2024. The incentive
subscription rights plan has adjustment clauses so that the number of subscription rights and the exercise prices
are adjusted by the same ratio.
There is one class of shares, and all shares have equal rights and are freely negotiable. The share capital is fully
paid in. The par value of the shares was NOK 0.15 per share on December 31. 2023. IDEX does not beneficially
own any of its own shares.
Number of
Ordinary Shares
Balance at December 31, 2021
1,010,388,454
Share issues (Employee Share Purchase Plan)
4,947,546
Share issue (exercise of incentive subscription rights)
990,584
Private placement of Ordinary Shares on November 16
150,000,000
Balance at December 31, 2022
1,166,326,584
Share issues (Employee Share Purchase Plan)
4,583,947
Share issue (exercise of incentive subscription rights)
389,608
Private placement of Ordinary Shares on May 24
116,897,492
Private placement of Ordinary Shares on June 16
30,161,332
Private placement of Ordinary Shares on November 16
78,651,685
Private placement of Ordinary Shares on December 22
2
Balance at December 31, 2023
1,397,010,650
As of December 31, 2023 there were 7,733 shareholder accounts on record, compared to 7,430 at December 31,
2022.
Costs related to share issuance have been charged against equity and amounted to $756 thousand in 2023 and
$737 in 2022.
Subscription rights are presented in note 23 – Share-based compensation.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
68
Shareholders
As of December 31, 2023
Number of
shares
Percent
of total
Robert Keith
107,813,275
7.7
Sundt AS
106,512,922
7.6
Bank Pictet & Cie (Europe) AG
54,424,605
3.9
Alden AS
52,119,353
3.7
Société Générale
48,390,420
3.5
Sundvall Holding AS
47,791,240
3.4
Euroclear Bank S.A./N.V.
37,679,351
2.7
Ragnvald Gabrielsen AS
28,623,025
2.0
F2 funds AS
22,369,000
1.6
Fender Eiendom AS
22,182,950
1.6
Guttis AS
21,010,226
1.5
RBC Investor Services Trust
17,047,195
1.2
Livermore Invest AS
15,085,800
1.1
Citibank, N.A.
14,905,768
1.1
F1 funds AS
14,873,800
1.1
Nordnet Bank AB
14,251,262
1.0
Toluma Norden AS
13,205,882
0.9
Bergskogen eiendom AS
13,115,212
0.9
Smart Riches Limited
11,968,240
0.9
Goldman Sachs International
11,905,769
0.9
Others
721,735,355
51.7
Total
1,397,010,650
100.0
For practical reasons, IDEX reports shareholders as registered in the VPS and does not combine accounts or
prepare a list of beneficial owners of holdings in nominee accounts. Mr. Robert Keith has disclosed to Oslo Børs
that, as of June 6, 2023, Mr. Keith, together with his close associates, held 157,873,873 shares in the company,
representing 12.3% of the number of shares at that time.
During the years ended December 31, 2023, and December 31, 2022, the Board of Directors approved the
transfer of $13.0 million, and $18.0 million, respectively, of Share Premium to absorb uncovered losses as
allowed under Norwegian law. As a result, Share Premium has been reduced by a cumulative amount of $300.5
million as of December 31, 2023, and $287.5 million as of December 31, 2022, against Capital Reduction
Reserve. The transfer has no impact on the total equity, comprehensive income (loss), assets (including cash),
nor liabilities.
Shares and subscription rights held or controlled
by board members,
officers and their close relations
Year Ended December 31,
2023
2022
Shares
Incentive
Subscription
Rights
Shares
Incentive
Subscription
Rights
Lawrence John Ciaccia, chair (1)
1,040,301
600,000
415,021
600,000
Deborah Davis, board member
564,479
—
564,479
—
Hanne Høvding, board member (2)
na
na
487,778
—
Annika Olsson, board member
52,631
—
52,631
—
Morten Opstad, board member (3)
7,398,916
—
7,398,916
—
Thomas M. Quindlen, board member (4)
na
na
413,981
—
Adriana Saitta, board member (5)
—
—
na
na
Stephen A. Skaggs, board member
1,018,053
—
1,018,053
—
Vincent Graziani, CEO
2,535,444
9,920,800
1,584,290
7,420,800
John Kurtzweil, CFO (6)
—
500,000
na
na
Eileen Wynne, interim CFO (7)
—
—
—
—
Anthony, Eaton, CTO
284,639
3,341,200
284,639
2,710,300
Catharina Eklof, CCO
89,684
2,841,200
89,684
2,210,300
Total
12,984,147
17,203,200
12,309,472
12,941,400
(1)
Mr. Ciaccia was board member until May 23, 2023. The grant to Mr. Ciaccia, originally on August 15,
2018, was in his capacity of service provider beyond board duty and not as board remuneration. The grant
on June 17, 2020 was made against cancellation of the 2018 grant.
(2)
Ms. Høvding left the board on May 23, 2023.
(3)
Mr. Opstad was chair of the board until May 23, 2023.
(4)
Ms. Wynne joined IDEX as interim Chief Financial Officer as of August 15, 2022. Mr. Simms left his
position with IDEX as of the same date.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
69
(5)
Mr. Quindlen left the board on May 23, 2023.
(6)
Mr. Kurtzweil joined the Company as CFO as of September 25, 2023.
(7)
Ms. Wynne was interim CFO from August 15, 2022 until September 25, 2023.
23. Share-based compensation
This note reports the number of shares and other instruments as registered as of December 31, 2023, and on
earlier dates, i.e., before the 5:1 share consolidation (reverse split) taking effect on record date January 10, 2024.
The incentive subscription rights plan has adjustment clauses so that the number of subscription rights and the
exercise prices are adjusted by the same ratio. See also note 28 – Subsequent events.
Incentive subscription rights
IDEX follows the practice of renewing its subscription rights plan at each Annual General Meeting, when the
preceding plan is closed for further grants and a new plan is established. On May 23, 2023, the Annual General
Meeting resolved to adopt the 2023 Subscription Rights Incentive Plan (the “2023 Plan”). At the Extraordinary
General Meeting ("EGM") on December 21, 2023, the 2023 Plan was modified to allow a higher maximum
number of subscription rights granted, in line with the increase in the share capital in June and December 2023.
The Board is responsible for administration of subscription rights plans and approves grants under the plans and
the terms of each grant.
Under the amended 2023 Plan, the Board may grant up to 139,701,065 subscription rights, provided the total
number of outstanding subscription rights does not exceed 10 percent of the number of registered Ordinary
Shares.
Subscription rights may be granted to employees and individuals rendering services to the Company. The
exercise price shall be, at a minimum, the higher of the average closing price of an Ordinary Share, as reported
on the Oslo Børs, for the ten trading days preceding the date of the grant, or the closing price of an Ordinary
Share, as reported on the Oslo Børs, on the trading day preceding the date of the grant. The board may in cases of
particular circumstances decide that the exercise price is lower, but not less than the par value of the share. The
total number of outstanding such grants may not exceed 1 percent of the number of registered Ordinary Shares
Unless resolved otherwise by the Board, 25% of each grant of subscription rights vests per year. The annual
vesting dates are the latest of the following dates before the date of grant of the subscription rights; (i) January
15, (ii) April 15, (iii) July 15 or (iv) October 15. The subscription rights expire on the fifth anniversary of the
Annual General Meeting at which the shareholders resolved to establish the plan under which the subscription
rights were granted. Unvested subscription rights terminate on the holder’s last day of employment or, in the case
of non-employees, the last day of the individual’s service to the Company. Vested subscription rights may be
exercised up to 90 days after the holder’s last day of employment. There are no cash settlement alternatives for
the holders of subscription rights.
The Company may elect to settle in cash.
The EGM also resolved that the board could issue replacement subscription rights ("RSR") at an exercise price
not lower than NOK 0.445 per share against waiver and cancellation of existing subscription rights. The vesting
schedule for such RSRs shall be determined by the board. No RSRs had been granted by December 31, 2023.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
70
Subscription rights activity
2023
2022
Number of
Subscription
Rights
Weighted
Average
Exercise Price
(NOK)
Number of
Subscription
Rights
Weighted
Average
Exercise
Price
(NOK)
Outstanding as of January 1
81,106,631
1.74
71,756,399
1.84
Granted
22,475,200
0.49
19,342,900
1.54
Exercised
(824,021
)
0.15
(930,184
)
0.29
Terminated
(7,327,449
)
1.84
(8,987,484
)
2.25
Expired
(595,700
)
4.97
(75,000
)
8.42
Outstanding as of December 31
94,834,661
1.42
81,106,631
1.74
Subscription rights exercisable as of December 31
50,694,011
1.67
36,416,302
1.65
Number of
Subscription
Rights
Weighted
Average Fair
Value (NOK)
per Subscr.
Right
Number of
Subscription
Rights
Weighted
Average
Fair Value
(NOK) per
Subscr.
Right
Subscription rights granted in the year
22,475,200
0.45
19,342,900
0.82
The fair value of the subscription rights granted in the year has been calculated using the Black-Scholes option
pricing model applying the following assumptions:
Black-Scholes option pricing parameters
Year ended December 31,
2023
2022
Exercise price (NOK)
0.15 – 0.93
1.03 – 2.08
Weighted average exercise price per share
1.43
1.54
Weighted average share price at date of grant
0.69
1.42
Expected term (years)
4.67
4.45
Weighted average term (years)
3.01
3.27
Share price volatility (percent)
69 – 93
72 – 100
Risk-free interest rate
3.88%
2.65%
Expected dividend payment
-
-
Forfeiture
None
None
Outstanding and vested incentive subscription rights:
December 31, 2023
Outstanding Subscription Rights
Vested (Exercisable) Subscription
Rights
Exercise Price (in NOK)
Number of
Subscription
Rights
Outstanding
Weighted
Average
Exercise
Price
(NOK)
Weighted
Average
Remaining
Term
(Years)
Weighted
Average
Remaining
Time to
Vest
(Years)
Number of
Vested
Subscription
Rights
Weighted
Average
Exercise
Price
(NOK)
Weighted
Average
Remaining
Term
(Years)
0.00 - 0.49
11,663,861
0.16
3.38
1.08
2,662,861
0.15
0.36
0.50 - 0.99
13,755,300
0.70
4.11
1.98
420,800
0.71
0.36
1.00 - 1.49
15,749,000
1.13
2.29
1.35
6,750,350
1.12
1.51
1.50 - 1.99
32,657,600
1.70
1.16
0.66
31,666,100
1.70
1.15
2.00 - 2.49
15,545,600
2.28
2.37
1.01
6,450,400
2.33
2.37
2.50 - 2.99
4,864,000
2.65
2.37
1.29
2,432,000
2.65
2.37
3.00 - 4.99
599,300
3.12
1.33
0.54
311,500
3.15
1.30
5.00 - 9.99
—
0.00
—
—
—
-
-
Total
94,834,661
1.43
2.31
1.39
50,694,011
1.67
1.37
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
71
December 31, 2022
Outstanding Subscription Rights
Vested (Exercisable) Subscription
Rights
Exercise Price (in NOK)
Number of
Subscription
Rights
Outstanding
Weighted
Average
Exercise
Price
(NOK)
Weighted
Average
Remaining
Term
(Years)
Weighted
Average
Remaining
Time to
Vest
(Years)
Number of
Vested
Subscription
Rights
Weighted
Average
Exercise
Price
(NOK)
Weighted
Average
Remaining
Term
(Years)
0.00 - 0.49
3,486,882
0.15
1.36
0.00
3,486,882
0.15
1.35
0.50 - 0.99
720,800
0.71
1.36
0.22
515,600
0.71
0.97
1.00 - 1.49
16,507,000
1.14
3.34
1.48
2,759,850
1.11
0.68
1.50 - 1.99
36,300,174
1.70
2.15
0.16
24,589,220
1.70
1.42
2.00 - 2.49
17,218,050
2.28
3.37
1.27
2,732,625
2.40
0.87
2.50 - 2.99
5,412,900
2.65
3.37
1.34
1,353,225
3
0.84
3.00 - 4.99
960,825
3.34
1.96
0.48
479,200
3.52
0.79
5.00 - 9.99
500,000
5.10
0.36
0.00
500,000
5.10
0.35
Total
81,106,631
1.74
2.68
0.74
36,416,602
1.65
1.27
Employee Share Purchase Plan (ESPP)
The Employee Share Purchase Plan (“ESPP”) is revolved each year at the Annual General Meeting. The current
ESPP was approved at the 2023 Annual General Meeting. Under the ESPP, an IDEX employee based in Norway,
the United Kingdom, or the United States may contribute up to 20% of his or her annual base salary, through
payroll deductions, toward periodic purchases of new issue Ordinary Shares. Under the ESPP, an option for the
purchase of an Ordinary Share is granted to a participating employees on the first day of a 6-months' “offering
period” to purchase new issued Ordinary Shares at the end of that offering period at a purchase price equal to
85% of the lesser of the fair market value, based on the closing price of an Ordinary Share reported by the Oslo
Børs, on either the first day or the last day of that offering period. The offering periods occur from March
through August, and from September through February. The shares are not restricted.
The share-based remuneration cost of the ESPP is calculated at the start of each contribution period, and
amortized over that period. The cost is based on the contribution amount and amounts to the discount of 15% at
the beginning of the period, plus the option value of an 85% call and 15% put option granted at the beginning of
the period. The option value is based on a Black-Scholes option pricing model applying prevailing interest rates
and share price volatility at the beginning of the period.
ESPP cost calculation parameters
September 1, 2023
March 1, 2023
September 1, 2022
Expected contribution amount (NOK 1,000)
532
1,078
2,025
Share price on start date (NOK per share)
0.64
0.96
0.83
Share price volatility
59
%
80
%
68
%
Risk-free interest rate
4.24
%
3.20
%
2.82
%
Expected dividend payment
—
—
—
Expected number of shares
972,698
1,321,462
2,854,899
Share-based compensation cost per expected share
0.23
0.40
0.32
In the two offering periods completed within 2023, an average of 28 employees (2022: 43) participated in the
ESPP and purchased a total of 4,583,947 Ordinary Shares at a weighted average price of NOK 0.64 (2022:
4,947,546 shares at average NOK 1.08 per share).
24. Related Party Transactions
The Company’s significant shareholders, board members and management, as well as related parties of
these are considered related parties. Furthermore, the subsidiaries are close relations to the parent
company. All transactions with related parties have been carried out on an arm’s length principle.
Compensation of key management is disclosed in Note 5 – Compensation and benefits.
There were no overdue balances with any related parties at the end of 2023 or 2022. See also Note 26.
Shareholders
In connection with the private placements in May and November 2023, the Company entered into a share lending
agreement with certain shareholders in order to facilitate settlement of the new shares in the private placements.
As a fixed fee for the share lending, each lender received a fee equaling 5% per annum of the subscription price
per new share in the private placement multiplied by the number of borrowed shares lent by the respective
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
72
lender. The fees paid amounted to $0.7 thousand to Alden AS, $1.3 thousand to Mr. Robert Keith, $7.8 thousand
to Sundt AS, and $2.7 thousand to Sundvall Holding AS.
Board of Directors
The following board compensation has been paid in 2023 and 2022. The board remuneration is paid in arrears,
after approval by the shareholders at the general meeting, covering the period up to that general meeting.
Year ended December 31, 2023
($000s)
Cash
Compensation
Share-based
Compensation
Total
Lawrence John Ciaccia, chair (1)
$
48
$
—
$
48
Deborah Davis (2)
62
—
62
Hanne Høvding (3)
50
—
50
Annika Olsson
40
—
40
Morten Opstad
48
—
48
Thomas M. Quindlen (4)
50
—
50
Stephen Andrew Skaggs (5)
57
—
57
Total
$
355
$
—
$
355
(1)
Mr. Ciaccia was member of the Compensation Committee in the periods that the remuneration paid in 2023 related to.
(2)
Ms. Davis was chair of the Compensation Committee and member of the Audit Committee in the period
that the remuneration paid in 2023 relates to.
(3)
Ms. Høvding was member of the Audit Committee in the period that remuneration paid in 2023 related to.
(4)
Mr. Quindlen member of the Audit Committee in the period that remuneration paid in 2023 related to.
(5)
Mr. Skaggs was chair of the Audit Committee in the period that remuneration paid in 2023 related to.
Year ended December 31, 2022
($000s)
Cash
Compensation
Shared-based
Compensation
Total
Lawrence John Ciaccia, chair (1)
$
53
$
—
$
53
Morten Opstad
53
—
53
Deborah Davis (2)
68
—
68
Hanne Høvding (3)
55
—
55
Annika Olsson
44
—
44
Thomas M. Quindlen (4)
55
—
55
Stephen Andrew Skaggs (5)
62
—
62
Total
$
390
$
—
$
390
(1)
Mr. Ciaccia was member of the Compensation Committee in the periods that the remuneration paid in 2022 related to.
(2)
Ms. Davis was chair of the Compensation Committee and member of the Audit Committee in the period
that the remuneration paid in 2022 relates to.
(3)
Ms. Høvding was member of the Audit Committee in the period that remuneration paid in 2022 related to.
(4)
Mr. Quindlen member of the Audit Committee in the period that remuneration paid in 2022 related to.
(5)
Mr. Skaggs was chair of the Audit Committee in the period that remuneration paid in 2022 related to.
The chair of the board is a partner at Ræder Bing advokatfirma AS. The law firm provided services to the
Company amounting to $172 thousand in 2023 and $234 thousand in 2022. The recognized amounts include
accruals for services received but not yet billed.
Mr. Ciaccia, who was first elected board member at the annual general meeting on May 12, 2015, served on
IDEX’s Strategy Advisory Council (SAC) from January 2014 through June 2022, when the SAC was
discontinued. Mr. Ciaccia also provides consulting services to IDEX. The fees to Mr. Ciaccia for his services
beyond board duty amounted to $50 thousand in 2023 and $58 thousand in 2022.
There were no grants of incentive subscription rights to any board member in 2023 or 2022.
Nomination Committee
The following fees has been paid to the nomination committee in 2023 and 2022 for the services up to the 2023
annual general meeting and the 2022 annual general meeting, respectively.2023: Chair Robert Keith $2.4
thousand
, members Håvard Nilsson and Harald Voigt $1.4
thousand
each. 2022: Chair Robert Keith $
2.6
thousand
, members Håvard Nilsson and Harald Voigt $
1.6 thousand
each.
Officers
Remuneration to key management is disclosed in note 5 – Compensation and benefits.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
73
Subsidiaries
The parent company purchases various services from the subsidiaries at arm’s length basis. The subsidiaries are
funded by adequate equity and interest-free advances in order not encounter thin capitalization issues. Interest-
bearing loans at arm’s length interest rate have been issued in prior years but all loans were fully repaid in
earlier periods.
($000s)
IDEX Biometrics ASA’s
cost of services from
subsidiaries
Intra-group transactions
2023
2022
IDEX Biometrics Holding Company Inc.
$
—
$
—
IDEX Biometrics America Inc.
10,251
15,256
IDEX Biometrics UK Ltd. (1)
3,594
2,133
IDEX Electronics (Shanghai) Co., Ltd.
713
1,153
Total
$
14,559
$
18,542
(1)
The amount in 2021 includes $ 8,317 thousand for the purchase of an IP package.
There were no overdue payables between any of the group companies at the end of 2023 or 2022.
25. Other operating expenses
Year ended December 31,
2023
2022
Sales and marketing activities
$
3,506
$
2,833
Legal, audit, accounting and other services
1,436
1,507
Office and other expenses, Insurance
1,013
1,215
IT expenses
613
559
Travel expenses
9
39
Intercompany charges other than R&D
3,451
4,790
Total other operating expenses
$
10,027
$
10,943
The increase in Sales and marketing activities reflects the increase in the activity level in this function from 2022
to 2023.
26. Board authorizations to issue shares or acquire own shares
This note reports the number of shares and other instruments as registered as of December 31, 2023, and on
earlier dates, i.e., before the 5:1 share consolidation (reverse split) taking effect on record date January 10, 2024.
See also note 28 – Subsequent events.
The board has been authorized by the respective annual or extraordinary general meetings to issue shares upon
exercise of incentive subscription rights granted under the various incentive subscription rights programs, and to
issue shares under the Employee Share Purchase Plan. See note 23 – Share-based compensation.
Authorizations that were in effect on December 31, 2023
Date and purpose of authorization
Authorized
number of
shares
Number of
shares issued
by Dec. 31, 2023
Extraordinary general meeting December 21, 2023:
Issue of shares in a private placement to raise additional capital *
139,701,065
—
Issue of shares in a rights issue to raise additional capital *
139,701,065
—
Issue of shares to make the total number of shares divisible by 5
4
2
Issue of shares to settle convertible bond
698,505,324
—
* The combined issue under these two authorisations may not exceed 139,701,065 shares.
At the annual general meeting on May 23, 2023, the board was authorized to acquire up to 116,897,492 of the
company's shares. The authorization had not been used by the end of 2023.
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
74
27. Subsidiaries
The subsidiaries provide various services to the parent company, mainly within technical development, supply-
chain administration and customer interface, and marketing and sales facilitation services to IDEX Biometrics
ASA. The accounting year in all subsidiaries is the calendar year, same as in the parent company and the group.
Ownership
Share of votes
Net profit
or (loss)
Equity
Dec. 31, 2023
Dec. 31, 2023
2023
Dec. 31, 2023
IDEX Biometrics Holding Co. Inc., Delaware,
USA
100
%
100
%
—
(5
)
IDEX Biometrics America Inc., Delaware, USA
100
%
100
%
351
5,487
IDEX Biometrics UK Ltd., England
100
%
100
%
(1,882
)
(8,682
)
IDEX Electronics (Shanghai) Co., Ltd, China
100
%
100
%
46
423
Dec. 31, 2022
Dec. 31, 2022
2022
Dec. 31, 2022
IDEX Biometrics Holding Co. Inc., Delaware,
USA
100
%
100
%
—
(5
)
IDEX Biometrics America Inc., Delaware, USA
100
%
100
%
1,015
5,136
IDEX Biometrics UK Ltd., England
100
%
100
%
(2,668
)
(6,505
)
IDEX Electronics (Shanghai) Co., Ltd, China
100
%
100
%
16
385
IDEX Biometrics Holding Company Inc. (IDEX Holding) is a holding company for the activities in the USA.
The operating company, IDEX Biometrics America Inc. (IDEX America), is held by IDEX Holding. IDEX
Holding and IDEX America were established in 2013 when operations commenced. IDEX America’s main
facilities are in Wilmington, Massachusetts and Rochester, New York.
IDEX Biometrics UK Ltd. (IDEX UK) was incorporated and commenced operations in 2014. The registered
office is in Manchester, England and the main facility is in Farnborough, England. IDEX UK was profitable in
2021 but had negative equity at the end of 2021, and made a loss in 2023 and 2022. The parent company has
provided funding as needed. It is expected that IDEX UK will eventually become profitable and achieve positive
equity from sale of IP development packages.
IDEX Electronics (Shanghai) Co., Ltd. (IDEX China) was established and commenced activities in 2015. The
company is registered in Shanghai and has one branch in Beijing and one branch in Shenzhen.
28. Subsequent Events
The Extraordinary General Meeting on December 21, 2023 resolved a five-to-one share consolidation (reverse
split). The consolidation was registered on January 8, 2024 and effective at record date January 10, 2024.
Following the consolidation, the company’s share capital remained NOK 209,551,597.50, but divided into
279,402,130 shares, each with a nominal value of NOK 0.75. The incentive subscription rights plan has
adjustment clauses so that the number of subscription rights and the exercise prices are adjusted by the same
ratio. The calculation of profit or loss per share in Note 10 – Loss per share calculation has been based on the
consolidated number of shares, while the reported number of shares and other instruments in these Financial
Statements are the number of shares or instruments as registered as of December 31, 2023, and on earlier dates,
i.e., before the 5:1 share consolidation (reverse split) took effect, unless stated otherwise.
For the avoidance of doubt, the number of shares, instruments and prices in the following paragraphs are after the
5:1 share consolidation.
The Extraordinary General Meeting on December 21, 2023 resolved a share capital reduction by reduction of the
par value of shares from NOK 0.75 to NOK 0.15 per share. The reduction was registered on February 26, 2024.
The number of shares remained unchanged. The reduction amount, NOK 167,641,278.-, was transferred to other
equity. The company’s net equity remained the same, and there was no distribution of capital. Following the
reduction, the Company’s share capital was NOK 41,910,319.50 divided into 279,402,130 shares, each with a
nominal value of NOK 0.15.
The Board resolved on February 29, 2024, to issue 358,525 shares at NOK 1.32 per share to employees
participating in the Company’s ESPP. Following the issue, the Company's share capital was NOK 41,964,098.25
divided into 279,760,655 shares, each with a nominal value of NOK 0.15.
The Board resolved on March 19, 2024, to issue in total 365,900 ordinary shares at NOK 0.75 per share to
employees who had exercised incentive subscription rights. The incentive subscription rights were issued under
the Company’s 2019 incentive subscription rights plan, which plan was approved by the Annual General
Meeting on May 9, 2019. Following the issue, the company’s share capital is NOK 42,018,983.25 divided into
IDEX Biometrics ASA Annual Report 2023
Parent Company Separate Financial Statements and Notes
75
280,126,555 shares each with a nominal value of NOK 0.15. Following the exercise, there are 18,601,032
incentive subscription rights outstanding.
The Board resolved on April 17, 2024, to issue 550,000 incentive subscription rights (SRs) to employees in
IDEX. The grant was made under the Company's 2023 incentive subscription rights plan as amended at the
extraordinary general meeting on December 21, 2023. The exercise price of the SRs is NOK 0.15 per share and
the SRs vest by 50% per year over two years. The SRs expire on May 23, 2028.
The repayment schedule of the convertible loan described in Note 17 - Convertible debt, accrued interest, was
initially 21 bi-monthly term payments. The lender can request up to two advanced installments to be paid in each
period between the planned term dates. After the term payment on February 28, 2024, the lender made two such
requests. All three terms were settled in cash, not shares, by a total combined amount of NOK 15.4 million or
$1.4 million in the first quarter of 2024.
The Company continues to focus on reducing expenses and as such in March 2024 provided notice to about 25
employees and or contractors. The Company is also consolidating the majority of its engineering functions to
Europe and closing two engineering facilities in the US. These actions are part of the plan to reduce operating
expense level below $4 million per quarter. All current actions are expected to be completed by the end of the
second quarter of 2024. The Company does not expect any significant restructuring costs, or impairment of the
parent company's assets.
There have been no events between December 31, 2023, and the date of these financial statements that have had
any material impact on the Company’s results for 2023, or the value of the Company’s assets and liabilities as of
December 31, 2023.
IDEX Biometrics ASA Annual Report 2023
Responsibility Statement
76
RESPONSIBILITY STATEMENT
The board and the managing director have today reviewed and approved this report from the board of directors as
well as the annual financial statements for the IDEX group and the parent company IDEX Biometrics ASA as at
December 31, 2023.
The consolidated annual financial statements and the annual financial statements for IDEX Biometrics ASA have
been prepared on a historical cost basis, and in accordance with IFRS Accounting Standards as adopted by the
EU. and the additional requirements in the Norwegian accounting act effective December 31, 2023. The notes
are an integral part of the respective financial statements. The report from the board of directors have been
prepared in accordance with the Norwegian accounting act and generally accepted accounting practice in
Norway.
We confirm, to the best of our knowledge, that the information presented in the financial statements gives a true
and fair view of the group’s and the parent company’s assets, liabilities, financial position and result for the
period viewed in their entirety, and that the report from the board of directors gives a true and fair view of the
development, performance and financial position of the group and the parent company, and includes a
description of the principal risks and uncertainties which the group and the parent company are facing.
April 24, 2024
The board of directors of IDEX Biometrics ASA
/s/ Lawrence John Ciaccia
Lawrence John Ciaccia
Chair
/s/ Deborah Davis
Deborah Davis
Board member
/s/ Annika Olsson
Annika Olsson
Board member
/s/ Morten Opstad
Morten Opstad
Board member
/s/ Adriana Saitta
Adriana Saitta
Board member
/s/ Stephen A. Skaggs
Stephen A. Skaggs
Board member
/s/
Vincent Arthur Graziani
Vincent Arthur Graziani
CEO
IDEX Biometrics ASA Annual Report 2023
Report of Independent Auditor
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REPORT OF INDEPENDENT AUDITOR
IDEX Biometrics ASA Annual Report 2023
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IDEX Biometrics ASA Annual Report 2023
Report of Independent Auditor
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IDEX Biometrics ASA Annual Report 2023
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IDEX Biometrics ASA Annual Report 2023
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IDEX Biometrics ASA Annual Report 2023
Articles of Association
82
ARTICLES OF ASSOCIATION OF IDEX BIOMETRICS ASA
Last amended on March20, 2024 – Office translation from Norwegian
§ 1
The name of the company is IDEX Biometrics ASA and it is a public limited company.
§ 2
The objective of the Company is to deliver identification systems and other activities related to this.
§ 3
The business offices are in the Oslo municipality, Norway.
§ 4
The company's shares shall be registered in the Norwegian Registry of Securities.
§ 5
The share capital is NOK 42,018,983.25 divided into 280,126,555 shares each with a nominal value of
NOK 0.15 per share and issued in name.
§ 6
The board of the Company consists of from three to seven members in accordance with the annual
general meeting’s instruction.
§ 7
The annual general meeting shall convene in or near Oslo at the board’s decision, and shall consider:
•
Determination of the annual financial statements
•
Appropriation of (net) profit or covering of losses
•
Election of chair of the board and board members
•
Election of chair and members of the nomination committee
•
Election of auditor
•
Determination of remuneration to the board of directors, members of the nomination committee
and the auditor
•
Other matters which are governed by law
•
Other matters which are mentioned in the notice of the annual general meeting.
§ 8
a. The company shall have a nomination committee. The nomination committee shall have three
members, including a chairman. Members of the nomination committee shall be elected by the annual
general meeting for a term of two years.
b. The nomination committee shall:
•
Propose candidates for election to the board of directors
•
Propose the remuneration to be paid to the board members
•
Propose candidates for election to the nomination committee
•
Propose the remuneration to be paid to the nomination committee members
c. The guidelines for the nomination committee shall be resolved by the annual general meeting.
§ 9
Documents which timely have been made available on the Internet site of the company and which deal
with matters that are to be considered at the general meeting need not be sent to the company’s
shareholders.
§ 10
As a general rule, the company's general meetings shall be conducted in Norwegian. The general meeting
may however resolve by a simple majority vote that English shall be used. Shareholders may present
their points of view in the Norwegian or English language.
§ 11
A shareholder who wishes to attend the general meeting, in person or by proxy, shall notify his/her
attendance to the company no later than 2 days prior to the general meeting. If the shareholder does not
notify the company of his/her attendance in a timely manner, the company may deny him/her access to
the general meeting.
IDEX Biometrics ASA Annual Report 2023
Corporate Governance Review
83
CORPORATE GOVERNANCE
Last updated by the board of directors on April 20, 2022 with editorial updates April 19, 2023 and April 24, 2024
1.
IMPLEMENTING AND REPORTING
This statement outlines the position of IDEX Biometrics ASA (IDEX or the Company) in relation to the
recommendations contained in the Norwegian Code of Practice for Corporate Governance dated October 14,
2021 (the Code). The Code was not updated in 2022 or 2023. The Code is publicly available at www.nues.no.
In the following, the Board of Directors (the Board) will address each recommendation of the Code and
identify any areas where the Company does not fully comply with the recommendations and explain the
underlying reasons for the deviations and any compensating measures where applicable.
2.
IDEX’S BUSINESS
In the articles of association, the Company’s business is defined as “The objective of the Company is to deliver
identification systems and other activities related to this.”
The Company’s business goals and key strategies are stated in a business plan adopted by the Board. The plan
is reviewed and revised annually by the Board. The business goals and key strategies are presented in the
annual report.
IDEX seeks to create value for the shareholders in a sustainable manner, while taking into account financial,
social and environmental considerations. The Company makes every effort to comply with the wording and
intent of the laws, rules and regulations in the countries and markets where it operates. IDEX is not aware of
being or having been in breach of any such statutory laws, rules or regulations. The Company pays due respect
to the norms of the various stakeholders in the business. In addition to the shareholders, the Company considers
its employees, the Company’s business partners, the society in general and the authorities as stakeholders.
IDEX is committed to maintain a high standard of corporate governance, be a good corporate citizen and
demonstrate integrity and high ethical standards in all its business dealings.
The Board considers that the Board and the management have adequate monitoring and control systems in
place to ensure insight in and control over the activities. The Board has resolved a code of conduct and ethical
guidelines which apply to all employees, consultants and contractors as well as the elected board members. The
code of conduct also incorporates the Company’s guidelines on corporate social responsibility. The at all times
current code of conduct is available on the Company’s website, www.idexbiometrics.com.
3.
CAPITAL STRUCTURE, EQUITY AND DIVIDENDS
IDEX was until 2021 a development company and was funded on equity until the fourth quarter 2023, when a
convertible bond was issued. The capital structure is likely to change during the commercial growth stage.
IDEX's working capital and fixed assets will most likely need to be funded by a combination of supplier credit
and borrowing from financial lenders. The Board will target an optimal capital structure that leverages the
equity while maintaining a moderate risk.
At several occasions, the Company has been in need of raising equity to fund its activities. Share issues,
hereunder private placements, have been resolved by the shareholders at general meetings or by the Board
pursuant to authorizations from the general meeting. The Board has annually proposed to the general meeting
reasonable authorizations for share issues. Such board authorizations have explicitly stated the type and
purposes of transactions in which the authorizations may be applied.
Proposed authorizations to issue shares have been considered and voted separately by each type and purpose.
The Board authorizations to issue shares have been valid until the next annual general meeting, as
recommended by the Code. The proposals have been approved by the shareholders.
The issue of the convertible bond in December 2023 was approved by the extraordinary general meeting on 21
December 2023.
Further, the Company has for many years had in place a moderate incentive scheme for its employees and
individual contractors in the form of a subscription rights program, as resolved by the general meeting. The
subscription rights program is limited to a number of subscription rights representing 10% of the Company’s
share capital. The Company implemented in 2020 an employee share purchase plan (ESPP), whereby
employees may convert a portion of cash remuneration to shares in the company. The ESPP serves to
encourage employee ownership and represents a cash saving for the company.
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The shareholders have authorized the Board to acquire up to 10% of the Company’s own shares. The
authorization ends at the next annual general meeting of shareholders. No such share purchases have been
made as yet.
IDEX has not as yet declared or paid any dividends on its shares. The Company does not anticipate paying any
cash dividends on its shares within the current planning horizon. IDEX intends to retain future earnings, to
finance operations and the growth of its business. Any future decision to pay dividends would be based on an
amended dividend policy that may be instituted in due course, which policy would reflect the Company’s
financial condition, results of operation and capital requirements.
4.
EQUAL TREATMENT OF SHAREHOLDERS AND TRANSACTIONS WITH CLOSE
ASSOCIATES
The Company places great emphasis on ensuring equal treatment of its shareholders. There are no trading
restrictions or limitations relating only to nonresidents of Norway under the articles of association.
In the authorizations to issue new shares where the shareholders resolve to waive the pre-emptive rights of
existing shareholders, the rationale for doing so shall be included as part of the decision material presented to
the general meeting. If and when such transactions are conducted, the justification will also be included in the
announcements to the market.
All related party transactions, whether completed, in effect or future, have been and will be carried out on an
arm’s length basis. Any related-party transactions shall be subject to review by the audit committee or other
independent third party valuation unless the transaction by law requires shareholder approval. The Company
takes legal and financial advice on these matters when relevant. The Company has a policy for transactions
with related parties, available at the Company's website, www.idexbiometrics.com.
There are no clauses in the articles of association about trading in the Company’s own shares. Any such trade
must be authorized by the general meeting of shareholders.
5.
FREELY NEGOTIABLE SHARES
The Company has one class of shares. Each share carries one vote. There are no restrictions on voting rights of
the shares. All shares are freely assignable. The articles of association do not contain any restrictions on the
shares.
6.
GENERAL MEETINGS
The general meeting of shareholders provides a forum for shareholders to discuss any matters with the Board.
To the maximum degree possible, all members of the Board and the chair of the nomination committee shall
attend the general meeting. The Company’s CEO and the auditor shall also attend the general meeting. The
shareholders elect a person to chair the general meeting. The Board will arrange for an independent candidate if
so requested by shareholders. Notice of a meeting of the shareholders shall be sent in a timely manner, and the
Company shall issue the notice and documents for a general meeting, including the proxy form, no later than 21
days before the date of the general meeting. Foreign residents will receive the notice and any documents in
English. The documents shall be precise and comprehensive to provide shareholders a basis for voting on the
various matters. The articles of association state that documents which deal with matters that are to be handled
at the general meeting need not be sent to the shareholders if the documents timely have been made available
on the Company's web site, www.idexbiometrics.com..
The Board endeavours to provide comprehensive information in relation to each agenda item in order to
facilitate constructive discussions and informed resolutions at the meeting.
The notice will also provide information on the procedures shareholders must observe in order to participate in
and vote at the general meeting. Pursuant to the Norwegian public limited companies act (the PLCA), the
Board may choose whether to hold a general meeting as a physical meeting or as an electronic meeting.
Shareholders who are unable to attend in person will be provided the option to vote by proxy in favor or against
each of the Board’s proposals. If a general meeting is held as a physical meeting, shareholders have a right to
attend by electronic means, unless the Board finds that there is sufficient reason to refuse this. The notice shall
contain a proxy form as well as information of the procedure for proxy representation. Advance voting has not
been introduced in the articles of association. At the meeting, votes shall be cast separately on each subject and
for each office/candidate in the elections. Consequently, the proxy form shall to the extent possible, facilitate
separate voting instructions on each subject and on each office/candidate in the elections. The notice, as well as
the Company’s website, will set out that the shareholders have the right to propose resolutions in respect of
matters to be dealt with at the general meeting.
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7.
NOMINATION COMMITTEE
The nomination committee is implemented in the Company’s articles of association, and the mandate for the
nomination committee has been resolved by the annual general meeting. The mandate is compliant with the
current version of the Code. The annual general meeting elects the chair and two committee members. No
current board member or IDEX executive may be a member of the nomination committee. Two nomination
committee members were a board members of the Company before 2008 and 2014, respectively.
The mandate states that the nomination committee shall comply with the relevant sections in the Code. The
nomination committee shall prepare and present proposals to the annual general meeting in respect of the
following matters:
•
Propose candidates for election to the Board.
•
Propose the remuneration to be paid to the Board members.
•
Propose candidates for election to the nomination committee.
•
Propose the remuneration to be paid to the nomination committee members.
The nomination committee shall give a brief account of how it has carried out its work and shall substantiate its
recommendations.
Information about the nomination committee, including deadlines and contact details, is available on the
Company's web site, www.idexbiometrics.com.
8.
BOARD OF DIRECTORS; COMPOSITION AND INDEPENDENCE
Currently there are six board members including the chair. The articles of association state that there shall be
from three to seven board members. The service period is not stated in the articles of association, hence the
Board members stand for election every two years pursuant to the PLCA. It follows from the articles of
association that the chair of the Board shall be elected separately.
All board members are required to make decisions objectively in the best interest of the Company. The
majority of the members of the Board shall be independent of the Company’s executive management, material
business contacts and the company’s larger shareholders. This is intended to ensure that sufficient independent
advice and judgment is brought to bear. The majority of the current Board meets the independence criteria of
the Code. The Board meets the statutory gender requirements. The board members’ attendance statistics is
included in the presentation of the board members in the annual report.
The Board considers that it is beneficial for the Company and its shareholders at large that the Board members
hold shares in the Company and encourages such share ownership.
The Board pays attention to ensure that ownership shall not in any way affect or interfere with proper
performance of the fiduciary duties which the Board members and the management owe the Company and all
shareholders. As and when appropriate, the Board takes independent advice in respect of its procedures,
corporate governance and other compliance matters.
9.
THE WORK OF THE BOARD OF DIRECTORS
The division of responsibility and duties between the Board and the managing director (CEO) is based on
applicable laws and well established practices, which have been stated in board instructions in accordance with
the PLCA. The Board instructions also set out the number of scheduled Board meetings per year and the
procedures in connection with the Board’s work and meetings.
The Board has the ultimate responsibility for the organization and planning of the Company, as well as a
control and supervisory function, hereunder a duty to keep itself informed. The Board shall appoint the
managing director and determine his or her remuneration, and also possibly give notice or dismiss the
managing director. The Board shall approve the CEO's hiring, termination and remuneration of his or her direct
reports. The Board shall ensure that the organization of the accounting and management of funds includes
adequate control procedures. The Board shall monitor and follow up the status and development of the
Company’s operational, financial and other results.
The Board sets out an annual plan for its work, focusing on business goals and key strategies as described.
Section 2 above. The Board instructions also list, inter alia, the following tasks:
•
Issue interim and annual financial statements and other statutory reports;
•
Issue notice of the annual general meeting;
•
Resolve the annual plan and budget, including capital expenditure budget;
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•
Resolve investment in and disposals of subsidiaries and associated companies, and in real estate;
•
Resolve and issue guarantees and other commitments and the pledging of assets;
•
Resolve customer-related or revenue-generating agreements as well as other agreements and
activities which are significant and would be expected to have a significant impact on the
Company’s results and financial position; and
•
Determine whether legal proceedings should be commenced or settled.
The Board instructions state that in situations when the chair cannot or should not lead the work of the Board,
the deputy chair shall chair the Board. If the deputy chair is also prevented from chairing the Board, the
longest-serving board member present shall chair the meeting until an interim chair has been elected by and
among the board members present.
The Board conducts a self-evaluation of its performance and expertise annually.
Any and all related party transactions are handled pursuant to the Company’s related party transaction policy,
to ensure that the Company is made aware of any possible conflicts of interest and to ensure that any such
transactions are handled in a sufficiently thorough manner.
The Board has set up an audit committee charter that is compliant with the rules that follows from the
Norwegian PLCA and the Code. The audit committee currently consists of four independent Board members.
The audit committee is advisory to the Board.
Since 2019, the Board has elected two of its members to serve as a compensation committee. The
compensation committee is advisory to the Board, and also serves as an advisory forum to the managing
director.
The Board has set up a charter for the compensation committee.
Members of the Board and the management are obliged to notify the Board if they have any material direct or
indirect interest in any transaction contemplated or entered into by the Company or any other matter that will
be considered by the Board.
10.
RISK MANAGEMENT AND INTERNAL CONTROL
The Board has adopted rules and guidelines regarding, amongst other matters, risk management and internal
control. The rules and guidelines duly take into account the extent and nature of the Company’s activities as
well as the Company’s corporate values and code of conduct, including corporate social responsibility. The
Board conducts an annual review of the Company’s most important areas of exposure to risk and its internal
control arrangements, including the reporting procedures.
The Board has set up an audit committee charter that is compliant with the rules in the Norwegian PLCA and
the Code consisting of four independent Board members. The audit committee is advisory to the Board.
IDEX issues interim financial reports each quarter and an annual financial report. The accounting policies
applied when preparing the reports satisfy regulatory requirements. The Board reviews monthly financial
reports for the group, comparing actual results to budget or plan. The size of the Company’s operation and staff
numbers necessarily leads to dependence on key individuals. However, the same factors also provide for
transparency and inherent risk reduction. The subsidiaries are operationally integrated in the parent company,
and the group works as one, unified company with staff on several sites. Legal and financial interaction
between the group companies is conducted on arm’s length terms.
IDEX’s activities and financials are controlled by the parent company. The audit committee meets separately
with the external auditor at least once per year to review risk factors and measures, and any incidents and
issues. The audit committee reviews all interim and annual financial reports before resolution by the Board.
The Board has resolved a financial manual, which sets out policies and procedures for financial management
and reporting in the group. This manual provides instructions for financial planning, treasury, accounting and
reporting. The manual is reviewed annually by the audit committee, and updated as and when appropriate. The
Board acknowledges that, having operations outside Norway that are spread over four sites on three continents,
business control is a practical challenge. In addition to the financial framework and systems, IDEX has
implemented comprehensive IT systems and quality management systems and standardised operating
procedures which are intended to ensure adequate business controls.
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IDEX does not operate a separate internal audit function or department. The CFO department conducts internal
reviews of the group companies. Each review is conducted by a staff member not involved in transaction
processing in the entity in question, and the findings are reported to the audit committee.
As regards share trading by IDEX's Board members, employees and individual contractors, as well as their
close relations and controlled entities, the Board has adopted an insider manual with ancillary documents. The
insider manual is intended to ensure that, among other things, trading in the Company’s shares by insiders are
conducted in accordance with applicable laws and regulations.
11.
REMUNERATION OF THE BOARD OF DIRECTORS
A reasonable cash remuneration to the Board members for their services from the annual general meeting in
2022 until the annual general meeting in 2023 was proposed to and resolved at the 2023 annual general
meeting. To lessen the cash outflow and stimulate shareholding among the Board members, the annual general
meeting granted an option for the Board members to receive the remuneration partly or fully in the form of
shares. No board members took up this option in 2023. The remuneration to the board members is disclosed in
the notes to the financial statements and in the annual management remuneration report presented to the annual
general meeting.
The nomination committee shall propose to the 2024 annual general meeting the board remuneration for the
period between the annual general meetings of 2023 and 2024. No share-based incentives have been granted as
board remuneration. Any Board member performing work for the Company beyond the board duty shall ensure
that such assignments do not in any way affect or interfere with proper performance of the fiduciary duties as a
board member. Moreover, the Board, without the participation of the interested member, shall approve the
terms and conditions of any such arrangements. Adequate information about the remuneration shall be
disclosed in the annual financial statements.
Ræder Bing advokatfirma AS, in which board member Morten Opstad is a partner, renders legal services to the
Company. Mr. Opstad was chair of the board until the annual general meeting on 23 May 2023. In the cases
where legal services provided by Ræder Bing are carried out by Mr. Opstad, such services, which are outside
Mr. Opstad’s duties as chair, are invoiced by Ræder Bing. The legal fees to Ræder Bing are disclosed in the
notes to the financial statements.
Larry Ciaccia, who was elected to chair of the board at the annual general meeting on 23 May 2023, has served
as board member since 2015. Mr. Ciaccia provides consulting services to IDEX for a fixed annual fee, and he
has been granted incentive subscription rights in his capacity as adviser to IDEX. The fees and share-based
remuneration to Mr. Ciaccia are disclosed in the notes to the financial statements.
12.
SALARY AND OTHER REMUNERATION FOR EXECUTIVE PERSONNEL
Salary and other remuneration to the executive personnel in the Company is determined pursuant to the
Company’s executive remuneration policy, as approved by the 2021 annual general meeting. The executive
remuneration policy is publicly available on the Company’s web site, www.idexbiometrics.com. The
remuneration to the executives is disclosed in the notes to the financial statements and in the annual
management remuneration report presented to the annual general meeting.
The executive remuneration policy seeks to align the interests of the Company’s executives and its
shareholders, and to continuously improve sustainable performance. Furthermore, the policy is designed to
align the interests of the Company and its executives to ensure its contribution to the Company’s commercial
strategy, long-term interests and financial viability.
On an annual basis the Company’s compensation committee shall review the executive remuneration policy, to
determine if any revisions are necessary. Where revisions are required, the compensation committee shall make
proposals to the Board which, if significant and subject to Board approval, are proposed by the Board to the
annual general meeting for approval. In the absence of any significant revisions, the executive remuneration
policy shall be presented and explained by the Board to the annual general meeting every four years at
minimum. At each annual general meeting, the Board shall present an executive remuneration report for the
previous financial year.
In the event of significant changes to the executive remuneration policy, these must be described and explained
in the policy document. The policy shall describe and explain how the shareholders’ views on the guidelines,
the general meeting’s vote and the salary reports since the previous vote on the policy have been taken into
account.
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13.
INFORMATION AND COMMUNICATIONS
The Board places great emphasis on the relationship and communication with the shareholders. The primary
channels for communication are the interim reports and presentations, the annual report and the associated
financial statements. IDEX also issues other notices to shareholders when appropriate. The general meeting of
shareholders and the presentations provide opportunities for shareholders to discuss any matters with the
Board.
In December, the Company publishes its annual financial calendar for the following year. All reports and other
notices are issued and distributed according to the rules and practices at Oslo Børs. The notices to the market
are published on the Oslo Børs newssite,
www.newsweb.no
. The reports and other pertinent information are
also available on the Company’s website,
www.idexbiometrics
.com.
The Board has adopted the following policies:
•
Policy for reporting of financial and other information and investor relations;
•
Policy for contact with shareholders outside general meetings; and
•
Policy for information management in unusual situations attracting or likely to attract media or other
external interest.
The financial reporting of IDEX is fully compliant with applicable laws and regulations. IDEX prepares and
presents its annual financial reports in accordance with International Financial Reporting Standards (IFRS).
The content of the interim reports is compliant with IFRS.
The current information practices are adequate under current rules. IDEX complies with the Oslo Børs at all
times current code of practice for IR information.
14.
TAKEOVERS
There are no takeover defence mechanisms in place. The Board will endeavor that shareholder value is
maximised and that all shareholders are treated equally. The Board acknowledges its duty to not obstruct
takeover bids and to not discourage or hinder competing bids. Any agreement with a bidder that acts to limit
the Company’s ability to arrange other bids should only be entered into when it is self-evident that such an
agreement is in the common best interest of the Company and its shareholders.
The Board will avoid compensation to a bidder whose bid does not complete, and limit any such compensation
to the costs the bidder has incurred in making the bid. The Board shall otherwise ensure full compliance with
section 14 of the Code.
15.
AUDITOR
IDEX’s auditor, Ernst & Young AS (EY), is fully independent of the Company. IDEX represents a minimal
share of EY’s business. IDEX does not obtain business or tax planning advice from its auditor. The auditor may
provide certain technical and clerical services in connection with the preparation of the annual tax return and
other secondary reports, for which IDEX assumes full responsibility. EY has been the auditor of the Company
since 2000. Latest partner rotation was in 2022. Audit firm rotation procedure will need to take place latest in
2026, effective 2027.
The audit committee and the Board reviews the auditor’s annual plan, and the auditor presents to the committee
and the Board the findings and recommendations after the audits. The auditor communicates in writing with the
committee and the Board on all matters brought to light by the audit of which the committee and/or the Board
should be apprised in order to be able to discharge its responsibility and functions. The auditor attends the audit
committee and board meetings when annual financial statements are considered and resolved, and the
committee as well as the board regularly meets separately with the auditor to review risk factors and measures,
and any incidents and issues. Accounting policies and any changes are subject to the statutory audit.
Annually, the auditor shall submit an additional report to the Company’s audit committee in which the auditor
declares its independence and explains the results of the statutory audit carried out by providing a range of
information about the audit. The specific information to be provided is regulated by EU’s Audit Regulation,
which is applicable in Norway in accordance with Section 12-1 of the Auditor’s Act.
The Board shall make arrangements for the auditor to attend all general meetings in the Company.
All audit and other assignments to the auditor shall be approved by the audit committee before the assignment
begins. The Board shall otherwise ensure full compliance with section 15 of the Code.
IDEX Biometrics ASA Annual Report 2023
Board of Directors and Executive Officers
89
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information concerning our executive officers and board directors as of December
31, 2023:
Name
Age
Position(s)
Executive Officers:
Vincent Graziani
63
Chief Executive Officer
John Kurtzweil
67
Chief Financial Officer
Anthony Eaton
51
Chief Technology Officer
Catharina Eklof
54
Chief Commercial Officer
Directors:
Lawrence J. Ciaccia
2
65
Chair
Deborah Davis
1,2
60
Director
Annika Olsson
47
Director
Morten Opstad
70
Director
Adriana Saitta
1
53
Director
Stephen A. Skaggs
1
61
Director
1.
Member of
Audit Committee.
2.
Member of Compen
sation Committee.
Board of Directors
Our Board held 32 meetings during the period since our Annual General Meeting on May 23, 2023, until and
including April 24, 2023. The meetings have been conducted by video conference. The very high number of
meetings in 2023 was due to the funding situation in the second half, when the the board explored many
alternatives which had to be considered on short notice.
Lawrence J. Ciaccia
has served on the Board of IDEX since May 2015 and was appointed as Deputy Chair in
May 2019. Mr. Caccia was appointed Chair at the Annual General Meeting in 2023. He has broad expertise from
the semiconductor industry, most notably playing a pivotal role in transforming AuthenTec from a start-up into a
world leading fingerprint sensor supplier. He served as AuthenTec’s CEO from September 2010 until the
company’s acquisition by Apple in October 2012. He remained with Apple through February 2013 to assist in
the acquisition integration and transition. Mr. Ciaccia holds a B.S.in Electrical Engineering from Clarkson
University and an M.B.A. from the Florida Institute of Technology. Mr. Ciaccia was born in 1958, is a United
States citizen, and resides in Florida. Mr. Ciaccia attended 30 board meetings in the period.
Deborah Davis
has served as a Board Member since May 2015. She is independent of the Company’s executive
management, material business contacts, and larger shareholders. Ms. Davis serves on the boards of directors of
International Personal Finance Plc, The Institute of Directors, Diaceutics plc, and Lloyds Banking Group
Insurance Board.
She also serves as a trustee of the Southern African Conservation Trust in South Africa.
During her career, she held senior executive leadership roles at PayPal, eBay, Verizon, and Symantec. She holds
a Sloan Masters in Science (Management) with Distinction from London Business School and a Bachelor of
Applied Science (Electronics) Honours degree from the University of Melbourne. She also holds a Diploma in
Company Direction with distinction from The Institute of Directors. Ms. Davis was born in 1963, is a dual
citizen of Australia and the United Kingdom, and divides her time between the United Kingdom, South Africa
and Australia. Ms. Davis attended 24 board meetings in the period.
Annika Olsson
was elected as a Board Member in May 2021. She is independent of the Company’s executive
management, material business contacts, and larger shareholders. Ms. Olsson is the CEO of Express Bank A/S, a
unit of the BNP Paribas Group. Ms. Olsson will step down from the CEO position during 2024. During her
20-year career in consumer financial services, Ms. Olsson has held various executive positions. Before joining
Express Bank A/S in 2010, she served as Commercial Director for Resurs Bank, a leader in retail finance in the
Nordic region. Ms. Olsson also serves on the board of directors of Finans & Leasing (the Association of Danish
Finance Houses), and she has been a board member of Finansbolagens Förening/Finansbolagens Service AB,
a
branch organization for financial companies, since May 2022.
She holds a B.S. in finance and marketing from
IHM Business School. Ms. Olsson was born in 1976, is a Swedish citizen, and resides in Copenhagen,
Denmark. Ms. Olsson attended 25 board meetings in the period.
Morten Opstad
has served as Chair of the Board in IDEX from March 1997 until the Annual general Meeting in
2023, at which time Mr. Opstad became a Board member. Mr. Opstad is a partner in Ræder Bing advokatfirma
IDEX Biometrics ASA Annual Report 2023
Board of Directors and Executive Officers
90
AS in Oslo, Norway. He has rendered legal assistance with respect to establishing and organizing several
technology and innovation companies. He is a board member in Ensurge Micropower ASA,
a publicly listed
technology company (where he served as Chair for a number of years until May 2023)
. Mr. Opstad holds a legal
degree (Cand.Jur.) from the University of Oslo and was admitted to the Norwegian Bar Association in 1986. Mr.
Opstad was born in 1953, is a Norwegian citizen, and resides in Oslo. Mr. Opstad attended 28 board meetings in
the period.
Adriana Saitta
has served as a Board Member since May 2023. She is independent of the Company’s executive
management, material business contacts, and larger shareholders. Ms Saitta has extensive experience in the
banking and business sector, both as a board member and in executive positions. She was from 2015 to 2023 the
General Manager of Intesa Sanpaolo Paris, a business operating in the larger corporate business in France. She is
currently, and has been since 2020, an independent board member at Covivio Hotels, a listed European
investment and development company. Ms. Saitta has formerly been an independent board member at Beni
Stabili (Groupe Covivio), located in Italy, chair of the supervisory board at Intesa Sanpaolo Card d.o.o., located
in Croatia, and chair of the supervisory board at Consumer Finance Holding, located in Slovakia. In addition,
Ms. Saitta has held several other positions within the Intesa Sanpaolo system, prior to this she was Associate
Principal at McKinsey. She graduated summa cum laude with a bachelor’s degree in business administration
from Università Commerciale Luigi Bocconi in 1994, and with a master in business administration from
INSEAD in 1998. Ms. Saitta was born in 1970, is an Italian citizen, and resides in France. Ms. Saittas attended
21 board meetings in the period.
Stephen A. Skaggs
has served as a Board Member since May 2019. He is independent of the Company’s
executive management, material business contacts, and larger shareholders. Mr. Skaggs has more than 25 years
of experience in the semiconductor industry and most recently served as Senior Vice President and CFO of
Atmel, a leading supplier of microcontrollers, prior to its acquisition by Microchip Technology in 2016. Mr.
Skaggs served as CEO and, earlier, as CFO of Lattice Semiconductor, a supplier of programmable logic devices
and related software. Earlier in his career, he worked for Bain & Company, a global management consulting
firm. He currently serves as a non-executive director of Coherent, a global leader in engineered materials,
optoelectronics and lasers. Mr. Skaggs holds a B.S. in Chemical Engineering from the University of California,
Berkeley, and an M.B.A. from the Harvard Business School. Mr. Skaggs was born in 1962, is a United States
citizen, and resides in Nevada. Mr. Skaggs attended 28 Board meetings in the period.
Family Relationships and Selection Arrangements
There are no family relationships between any of the Directors. There are no family relationships between any
Director and any member of senior management of our Company. There is no arrangement or understanding
with major shareholders, customers, suppliers, or others, pursuant to which Directors were elected or members of
management was selected.
Executive officers
Vincent Graziani
has served as our Chief Executive Officer (“CEO”) since February 2020. He joined IDEX from
Infineon Technologies AG, for which he was most recently Vice President of Strategy Development and
Implementation, with responsibility for leading new business development and strategic partnerships. Mr.
Graziani has also led technology companies from the pre-revenue stage to significant revenues and scale while
serving as CEO of Sand 9, Vbrick Systems, and Sandburst. Earlier in his career, he held positions of increasing
responsibility in engineering as well as marketing and sales at Intel, Broadcom, and Siemens Semiconductor. Mr.
Graziani holds a B.S. in Electrical Engineering from the University of New Hampshire and a M.S. in Electrical
Engineering from Northeastern University. Mr. Graziani is located at the Company’s offices in Wilmington,
Massachusetts.
John Kurtzweil
has served as our Chief Financial Officer since September 25, 2023. Prior to joining us, Mr.
Kurtzweil served as CFO of Metabolon, a US life science company, where he was pivotal in revitalizing the
company. Prior to Metabolon, he has served as CFO for leading technology companies such as CREE, Cirrus
Logic and ON Semiconductor where he had key roles in finance operations, leading strategic planning, mergers
and acquisitions, as well as growing shareholder value.
He currently serves as a non-executive director of
Axcelis Technologies, Inc., a global leader in semiconductor capital equipment manufacturing and as a non-
executive director of SkyWater Technology, Inc., a US semiconductor foundry.
Mr. Kurtzweil holds a B.A. in
Accounting from Arizona State University, and an M.B.A from the University of St. Thomas. Mr. Kurtzweil also
is a certified public accountant and certified management accountant. Mr. Kurtzweil is born in 1956, located in
the United States.
IDEX Biometrics ASA Annual Report 2023
Board of Directors and Executive Officers
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Anthony Eaton
has served as our Chief Technology Officer since March 2019. Mr. Eaton served as our Vice
President of Systems Engineering from February 2017 to February 2019, and our Senior Director of Engineering
from August 2016 to January 2017. Prior to joining us, he served as Director of System Engineering at Atmel,
where he was responsible for building and running the System Engineering function for the MaxTouch Business
Unit. Earlier, Mr. Eaton held senior engineering roles at NVIDIA, Mirics Semiconductor and Sony
Semiconductor. Mr. Eaton holds Bachelor’s and Master’s degrees in Engineering from Cambridge University.
He is located at the Company’s offices in Farnborough, United Kingdom.
Catharina Eklof
has served as our Chief Commercial Officer (“CCO”) since June 2021. Prior to joining us, Ms.
Eklof held the position as Chief Commercial Officer at Defentry, a cyber safety solutions provider, for which she
led marketing and sales, leading the company’s international expansion. Ms. Eklof has over 20 years of
experiences as a global executive leading global business transformation and implementing new business models
across financial services, retail, travel, and information security. Notably, she had senior executive roles across
strategy, loyalty-data insight solutions and payment technology for 12 years at Mastercard. She was instrumental
in launching Mastercard’s data SaaS offering to banks and FinTech’s globally, commercialization of digital
payment and loyalty platform solutions to the banking, retail and travel sector. Ms. Eklof has enjoyed her 4-year
tenure with Avanza Bank AB and stepped down from her position on the Board of Directors effective April 11th,
2024 to pursue more global opportunities. Ms. Eklof holds an M.B.A. in International Business and a M.S. in
Economics from the University of Uppsala, Sweden. Ms. Eklof is assigned to our office in Oslo, Norway, but
works in Belgium.
IDEX Biometrics ASA Annual Report 2023
92
IDEX Biometrics ASA
Dronning Eufemias gate 16, NO-0191 Oslo, Norway
+47 6783 9119; mailbox@idexbiometrics.com www.idexbiometrics.com
Corp. ID: NO 976 846 923 MVA/VAT