IDEX ASA. Interim Report First Quarter IDEX ASA - Interim Report First Quarter 2008 Page 1 / 10

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1 IDEX ASA Interim Report First Quarter 2008 IDEX ASA - Interim Report First Quarter 2008 Page 1 / 10

2 Report First Quarter 2008 QUARTERLY HIGHLIGHTS The new SmartFinger IX 10-4 sensor was released in This enables IDEX to provide both License Candidates, potential Partners and Component Customers with fully functional sensors and evaluation kits. In the first quarter of 2008, development kits have been shipped to 10 potential customers. The feed-back is very positive: SmartFinger IX 10-4 is one of the best performing swipe sensors available, with a quality comparable with the much more expensive optical area sensors on the market. IDEX ASA - Interim Report First Quarter 2008 Page 2 / 10

3 OPERATIONS SALES & MARKETING In Q1, 08, IDEX has continued the focus on contact with potential customers and partners. The management has completed trips to the U.S, Japan, Korea and France where more than 30 meetings with customer accounts have taken place. Initially the main focus has been on the semiconductor industry, while IDEX lately has met also with fingerprint sensor and biometric companies. 10 development kits have been shipped to potential customers for test purposes during Q1, 08. The Development Kits will enable the customer to make an in-depth technical evaluation of the IDEX SmartFinger IX IDEX position in the market The market has continued the trend from 2007, showing fast adoption of biometric technology especially within the PC market segment. All major OEM s have embraced the fingerprint technology in their laptop products. In 2008 this market will continue this growth, the wireless market is starting to move as well as new applications such as home entertainment, external storage devices, car safety and admission control will emerge. When the wireless market adopts the technology, we expect the semiconductor manufacturers to become the main suppliers of sensors to the OEMs. To be part of this high volume market IDEX believes that its licensing is the best strategy. The high performance of the SmartFinger IX 10-4 also puts IDEX in a very strong position in a variety of medium volume/large margin markets. PRODUCTS & TECHNOLOGY The activities in Q1, 08 were focused on tests and verification the SmartFinger IX 10-4 sensor, and qualification of the Development modules and Software Development Kit for the first shipment to customers has been completed. A roadmap for cost reduction of the SmartFinger technology is under development. Product and service offerings The SmartFinger technology IDEX fingerprint sensors based on the SmartFinger technology, offers log in, authentication, navigation and pointing features by the swipe of the finger. This technology is available either as potential sensor devices ready for implementation by customers or by license enabling semiconductor customers to commercially exploit the SmartFinger IPR and technology. IDEX ASA - Interim Report First Quarter 2008 Page 3 / 10

4 The SmartFinger IX 10-4 sensor is a single-line fingerprint swipe sensor employing the cutting-edge SmartFinger technology that among other features offers a competitive advantage of swiping at high speed and at wide skew angles. These user friendly features are important as it offers high flexibility and convenience in swipe movement. IDEX offerings In addition to the SmartFinger IX 10-4 sensor and License agreements IDEX offers an extensive range of services and engineering support: Design Services for new sensor generations and reference designs. Hardware Development Kits and Software Development Kits for evaluation and integration purpose. Technical engineering support for End to End solutions. Technical partnership concepts and joint developments with partners. Employees Managing Director Fredrik Scheinert left the company in May 2008, and the CTO, Dr. Ralph W. Bernstein, was appointed Managing Director and CTO of IDEX. IDEX has 9 employees. CONSOLIDATED FINANCIAL INFORMATION 31 MARCH 2008 Basis of preparation When preparing the interim financial information, Idex has applied the same accounting principles and methods as applied in the annual financial statements The interim financial information does not represent a complete interim report under IFRS. The interim financial information has not been subject to audit. Profit and loss Absent any revenue, Idex incurred a loss of NOK 6.3 million in the first quarter. The loss was lower than in the first quarter of 2007, because manning level and reasearch and development activities ( R&D activities ) have been reduced. Financial items represented a net expense of NOK 0.4 million in contrast to NOK 0.1 million income the same quarter in This was caused by the financial loan obtained in June Balance sheet The main assets held in the balance sheet comprise cash, prepayments and a receivable from the Skattefunn government R&D grant scheme. The grant has een credited against cost of R&D activities. The patents and other intellectual property rights have not been capitalised. IDEX ASA - Interim Report First Quarter 2008 Page 4 / 10

5 Cash flow In the quarter, the cash outflow amounted to NOK 6.5 million, reflecting the net loss in the quarter. At the end of the quarter, the cash position amounted to NOK 7.9 million. Equity The share capital of the parent company has been lost and the group had negative equity at the end of The situation was not remedied in the first quarter of The board acknowledges its duty to act which follows from the loss of equity. Going concern assumption The going concern assumption have nevertheless been applied when preparing the interim financial information. The Board points out that there is significant uncertainty attached to this assumption. IDEX does not earn recurring revenue and there are limited funds and assets available for sale to cover future expenses. At the date of this report, the company does not possess funds sufficient for continued operation until the end of Idex has the right to convert its financial debt into share capital. Further, following contacts with shareholders and in the financial market, the board has found sufficient reason to take for its basis that Idex will be able to conduct a private placement which will provide funds for about twelve months operation. The financial statements have therefore been prepared under the going concern assumption. Situation at 31 May 2008 As at 31 May 2008, the cash position amounted to NOK 5.2 million. Receivables and prepayments amounted to NOK 1.9 million, and payables and accrued liabilities amounted to NOK 3.1 million. Cash available for spending thus amounted to about NOK 2.0 million, compared to a monthly ongoing cost in the region NOK million. The board is in contact with the provider of the financial loan in order to renegotiate and prolong it beyond the due date of 1 July In anticipation of the authorisation proposed to the annual general meeting on 18 June 2008, the board has also prepared for conducting a private placement which will be adequate to fund Idex operation for the period until current commercial negotiations have been completed. Next steps will depend on the outcome of those negotiations and other considerations at that time. Fornebu, 17 June 2008 The Board of Directors of Idex ASA IDEX ASA - Interim Report First Quarter 2008 Page 5 / 10

6 Consolidated Profit and Loss Statement Unaudited. Amounts in NOK 1, Jan-31 Mar 1 Jan-31 Mar 1 Jan-31 Dec Operating income Sales revenue Other operating revenue Total revenue Operating expenses Payroll expense Share-based remuneration Research and development expenses Other operating expenses Total operating expenses Profit (loss) before interest, tax, depreciation and amortization (EBITDA) (5 858) (10 305) (32 553) Depreciation Profit before interest and tax (EBIT) (5 863) (10 312) (32 565) Financial Income and Expenses Interest income Other financial income Interest expense (545) - (1 690) Other financial expense - (27) (35) Net financial items (437) 75 (1 107) Net result before tax (6 300) (10 237) (33 672) Taxes - - Net profit (loss) for the period (6 300) (10 237) (33 672) Profit (loss) per share -basic and diluted (NOK.øre) (0.22) (0.50) (1.53) IDEX ASA - Interim Report First Quarter 2008 Page 6 / 10

7 Consolidated Balance Sheet 31 Mar Mar Dec 2007 Unaudited. Amounts in NOK 1,000. ASSETS Long-term assets Fixed assets Machinery and office equipment Total fixed assets Financial assets Long-term receivables Total financial assets Total long-term assets Current assets Receivables Account receivables - 3 Other receivables Prepaid expenses Total receivables Cash and bank deposits Cash and bank deposits Total cash and bank deposits Total current assets TOTAL ASSETS (continued) IDEX ASA - Interim Report First Quarter 2008 Page 7 / 10

8 Consolidated Balance Sheet 31 Mar Mar Dec 2007 Unaudited. Amounts in NOK 1,000. EQUITY AND LIABILITIES Equity Paid-in-capital Share capital Share premium reserve Other paid-in capital Total paid-in-capital Other equity (21 507) (10 237) (15 207) Total equity (6 778) (741) Liabilities Short-term liabilities Short-term loan Account payable Public duties payable Other short-term liabilities Total short term liabilities Total liabilities TOTAL EQUITY AND LIABILITIES IDEX ASA - Interim Report First Quarter 2008 Page 8 / 10

9 Consolidated Cash Flow Statement Unaudited. Amounts in NOK 1, Jan-31 Mar 1 Jan-31 Mar 1 Jan-31 Dec Cash Flows from operating activities Profit (loss) before taxes (6 300) (10 237) (33 672) Depreciation Change in receivables (79) (414) 63 Change in payables (966) (1 182) (1 575) Net change in other items Cost of share-based remuneration Net cash flow from operational activities (6 534) (10 402) (30 813) Cash flows from investing activities Investments (40) Net cash provided by investing activities - - (40) Cash flows from financing activities Issuance of shares Change in long-term receivables 444 (45) Change in short-term loan Net cash provided by financing activities Net change in cash and cash equivalents (6 534) (9 911) (1 413) Opening cash balance Closing cash balance IDEX ASA - Interim Report First Quarter 2008 Page 9 / 10

10 Consolidated Statement of Changes in Equity Unaudited. Amounts in NOK 1, Jan-31 Mar 1 Jan-31 Mar 1 Jan-31 Dec Equity at start of period (741) Shares issued Share issuance costs (2) (347) Convertible loan 280 Share-based compensation Net result for the period (6 300) (10 237) (33 672) Equity at end of period (6 778) (741) IDEX ASA - Interim Report First Quarter 2008 Page 10 / 10