ANNUAL REPORT
PROvEN IdENTITy
wITh fINgERPRINT RECOgNITION
P R E S I D E N T ’ S R E P O R T
It seems to me that we have already stepped into a new era. Fingerprint recognition is starting to become part of everyday life. Our technology is now used in gyms, banks, offices, airports, and national ID cards all over the world. But when the world around us changes, we face increasingly rigorous demands.
The efforts we made last year will be decisive for the future of Precise Biometrics. 2007 was about shifting our focus. We stopped looking down the mi- croscope at our technology to see what the world was actually interested in investing in. Precise Biometrics is no longer a company focused on technology – our Sales Directors, Research & Development department and Management Group now concentrate on their ap- proach to the market.
ENhANCEd RESULTS
The good news from 2007 is that we reported the best results since 2000. We have radically cut our costs, and even though we are still making a loss it is very encouraging to see that the measures we introduced more than one year ago are now starting to show tangible results.
Early in 2007 we promised that we would secure the procurement of two tenders for national ID cards.
I am pleased to be able to confirm that we have kept this promise. We won the tenders for the Portuguese national ID card and for a small country in the Midd- le East.
NATIONAL Id IN fOCUS
We still see great potential in the market for national ID cards. Apart from lucrative licensed sales, there are great opportunities in a profitable aftermarket.
This was confirmed by the follow-up order we recei- ved for 1,400 fingerprint readers linked to the Portu- guese national ID card.
Nevertheless, I am not satisfied with the sales re- sults. Above all the US market failed to live up to ex-
pectations for the development of PIV cards. The aut- horities could not introduce the new system within the framework of their tight budgets, which of course had a negative effect on our, as well as other players’, sales in the US market.
ASIA PUTS ON ThE PRESSURE
On the other hand I am very pleased with the conti- nuation of our establishment in the Asian market, which has shown keen interest in fingerprint techno- logy. Our cooperation with Japan’s largest chip ma- nufacturer resulted in an electronic circuit with our fingerprint technology, and as of April 2008 there are plans to produce 200,000 of these circuits every month. During this spring we also increased our hol- ding in the partly-owned company Smart Unicorn Solutions (SUS) and to further reinforce relations with SUS and the Asian market, we opened a subsi- diary in Hong Kong during the third quarter.
When a company switches its focus from techno- logy to the market this leads to natural changes in the composition of its staff and so the past year has set tough demands for our employees. At the same time there has been a general awareness that the changes taking place have been necessary for the business, and in the last few months our employees have demonstra- ted an encouraging optimism. One sign of this com- mitment is that almost all of them chose to participate in the options program introduced in the fall.
ThE vISION
We have been waiting for developments in the mar- ket to catch up with our technology, and we now seem to be on the very threshold of such events. Our fingerprint solutions are in use all over the world, in both small and large projects. We have almost 80 mil- lion contracted licenses for our Match-on-Card tech- nology. This makes us the largest supplier in the world for this type of finger recognition.
ThE fUTURE IS PRESENT
President´s Report
P R E S I D E N T ’ S R E P O R T
But this does not mean that we can rest content with what we have achieved in the past. We must look ahead and decide how we can best use the leading position we have in the market today. In consultation with the staff a vision has unfolded during the year.
While our prime objective remains firm; to reach a positive result in 2009, the vision plots the way and establishes the means by which we will achieve long-term profitability.
Id CARdS IMPORTANT IN NEXT fEw yEARS
Research shows that many countries will be introducing new natio- nal ID cards in the years to come. As in the past, we still see great potential in this market. And this interest also seems to be mutual.
Many countries whose ID cards are under procurement have reali- zed the advantages of fingerprint recognition and specified this technology as an requirement.
Of these pending national ID card procurements we expect that a large majority will also specify Match-on-Card as a requirement, since it offers extended functionality in relation to the card. As a world leader and independent supplier of Match-on-Card we are well placed to secure several national ID card projects in the next few years.
fUTURE IN BANK ANd SIM CARdS
The national ID cards are important for our future success and ex- perience from these projects paves the way for new business oppor- tunities. There are several other interesting market segments that can benefit from the advantages of fingerprint recognition and Match-on-Card. With a technology that without complications can be adapted to new platforms and a broad network of partners, I am convinced that in due course we will find our technology in use in other interesting segments such as banking and mobile telephony.
Billions of bank and SIM cards are already being manufactured every year and production is expected to further increase in the long run as additional functions are added to the cards. With ex- panded functionality there is also a need for enhanced security.
Fingerprint recognition can solve many of the problems facing these sectors and our interoperable technology can easily be transferred to both bank and SIM cards. I am also convinced that it is within these segments the challenges and opportunities of the future lies.
By focusing our operations on the vision and the targets we have plotted in 2007 I am adamant that our technology will solve many of the problems posed by the future. So let’s focus on a decisive 2008, without forgetting the promising and profitable times that lies ahead.
EvENTS dURINg ThE yEAR
• Net sales for the year amounted to SEK 24.8 million (47.7).
• Losses for the year amounted to SEK -35.3 million (-90.9).
• Result per share for the year amounted to SEK -0.35 (-1.22).
• Liquid assets at the end of the fiscal year amounted to SEK 32.5 million (76.3).
• The Company established a subsidiary in Hong Kong, Precise Biometrics Asia Ltd.
• The Company was awarded the tender for Portugal’s national ID card project, and later in the year also received a follow-up order for the fingerprint reader Precise 250 MC.
• Cooperation with OKI Electric Industry Co. Ltd. resulted in the planned production of approx. 200,000 chips per month as of April 2008.
• A business transaction with Smart Unicorn Solutions was concluded during the year and means that Precise Biometrics has a holding of 38% in the Chinese company.
• A large follow-up order was received from Swisscom, consisting of Precise 100 MC BioKeyboard at a value of SEK 2.4 million.
• At the end of the year the Company won an additional ID card project for a small country in the Middle East.
The successful cooperation around a
fingerprint solution for SAS has given the
Company a strong platform from which it can
offer other airlines and suppliers to the
aviation industry similar solutions.
2007 2006 2005
Net sales, KSEK 24,815 47,733 45,053
Operating profit/loss, KSEK -36,746 -90,470 -41,007
Gross margin, % 36 40 36
Liquid assets, KSEK 32,500 76,302 59,230
Cash flow from current operations before changes in working capital, KSEK -29,224 -54,097 -27,530
Working capital, KSEK 30,417 65,292 76,369
Acid-test ratio, % 291 293 377
Equity/assets ratio, % 83 75 83
Number of employees at year-end 38 49 69
Result per share, SEK -0.35 -1.22 -0.63
Equity per share, SEK 0.70 0.98 1.45
Factor Change
Effect on operating profit/loss
Currency, SEK/
USD -/+5% -/+0.5
MSEK
Purchase prices -/+5% -/+0.6 MSEK
Payroll expences -/+5% -/+1.5 MSEK
fINANCIAL OvERvIEw
T H E Y E A R I N F I G U R E S
SENSITIvITy ANALySIS
A priority task for sales work in 2007 has been to find cooperation with the right partners
47,733
24,800
0 10,000 20,000 30,000 40,000 50,000
13,645 30,007
45,053
2003 2004 2005 2006 2007 2003 2004 2005 2006 2007
2003 2004 2005 2006 2007 2003 2004 2005 2006 2007
TURNOVER
KSEK
-90,470 -36,746
-100,000 -80,000 -60,000 -40,000 -20,000 0
-54,406 -37,485
-41,007
OPERATING PROFIT/LOSS
KSEK40
0 10 20 30 40 50
28 43
36 36
69
38 49 43
28
0 20 40 60 80 100
GROSS MARGIN EMPLOYEES
PERCENT NUMBER
A R E V I E W O F T H E G R O U P
OPERATIONS ANd BUSINESS CONCEPT
Precise Biometrics is an innovative company that of- fers solutions for the recognition of fingerprints and to guarantee the identity of people. With cutting-edge competence in fingerprint recognition, Precise Bio- metrics offers rapid, reliable and secure verification.
The Company’s core technology Precise BioMatch
™can easily be integrated in systems for ID and bank cards, security circuits, access to computers, networks and physical access. The Company operates on a glo- bal market and the technology is licensed to almost 80 million users throughout the world.
Precise Biometrics’ business concept is, together with major partners and through global networks, to offer countries, public authorities, companies and or- ganizations, user-friendly and interoperable solu- tions to secure the identity of individuals in a cost- effective and reliable way.
OBjECTIvES OVERALL OBJECTIVES
Precise Biometrics’ overall objective is to be a world leading and independent supplier of interoperable and adaptable solutions based on fingerprint recog- nition. Our solutions are ideal for small, secure plat- forms, such as Precise Match-on-Card
™for smart cards and Precise BioCore
®for chips, and we aim to be the main supplier of this technology.
OPERATIONAL OBJECTIVES
Some of the most important operational objectives for the future are that the Company will establish even deeper relations in the important segments for natio- nal ID cards and sign even more agreements, not only with smart card companies, but also higher up in the value chain, and then license our technology to sys- tem integrators. We also see opportunities to use our experience, our existing products and our competen- ce in the context of ID cards to become established in the banking and payment markets. The creation of
new business opportunities by cooperating with ad- ditional chip manufacturers, supplementing OKI’s offering in the market for secure, cost-effective chips in large volumes, is another important objective.
The most important operational objectives also in- clude an expansion of sales activities to the public autho- rities in our geographic markets (Europe, North America, Latin America, Asia and the Middle East & Africa).
Another high-priority objective is the clarification of Precise Biometrics’ market profile as a supplier with cutting-edge competence and extensive expe- rience of demanding fingerprint solutions.
FINANCIAL OBJECTIVES
Precise Biometrics’ main financial objective is to ac- hieve a long-term increase in value for the sharehol- ders. This will be achieved through reaching a posi- tive result in 2009.
STRATEgIES BUSINESS STRATEGY
Precise Biometrics markets tools and solutions for fingerprint recognition and consultancy services via the direct processing of several different customer segments in Europe, North America, Latin America, Asia and Middle East & Africa.
Together with our partners – primarily system in- tegrators, smart card companies and chip manufactu- rers – we offer complete fingerprint solutions based on Precise Biometrics’ technology, Precise BioMatch
™and Precise Match-on-Card
™, for the populations of entire countries, employees at public authorities and companies, airline passengers, and many other user groups. Licensing of Precise BioMatch
™and Precise Match-on-Card
™generates aftermarkets for Precise Biometrics in the form of hardware sales and supple- mentary services and applications to extend the use of for example ID cards. Fingerprint solutions for em- bedded systems open up a mass market by making biometrics attractive in terms of price and availability
A REvIEw Of ThE gROUP
A R E V I E W O F T H E G R O U P
for integration in volume products such as consumer electronics.
PARTNER STRATEGY
Precise Biometrics’ partner strategy is to build up close relations with carefully selected partners who are considered to be able to effectively contribute towards the group’s achieving its operational and fi- nancial objectives. The global network of partners creates important openings in the markets, while also speeding up the establishment of Precise Biometrics’
trademark. Well-developed partner relations are im- portant for Precise Biometrics to respond to the new and tougher customer requirements that follow on from an expanding global market and are a prerequi- site for us to operate in a global context.
EXAMPLES Of REwARdINg COOPERATION wITh PARTNERS
NATIONAL ID CARDS TOGETHER WITH WORLD PLAYERS Gemalto is one of our smart card partners. By delive- ring overall solutions for smart cards and digital se- curity they are the largest company in the world in their sector. Precise Biometrics has worked with Ge- malto in several large-scale projects, including deli- very of Portugal’s national ID card. First-rate coopera- tion with prominent companies like Gemalto reinforces our relations with the smart card sector and enables us to maintain our position as a leading supplier of fingerprint recognition to the market for national ID cards.
COOPERATION LED TO NEW PRODUCT
In 2006 we initiated cooperation with the Japanese electronics company OKI Electric Industry Co. Ltd., which in the fall of 2007 resulted in an electronic circu- it with integrated fingerprint technology. The circuit has major marketing advantages in terms of price, per- formance and size, and can be integrated in different electronic products. OKI will start producing the circuit in April 2008 and the production volume is esti- mated to be 200,000 chips a month. OKI is one of Japan’s largest companies and our successful cooperation with such a player means that we will reinforce our position
in the Asian market and open up windows of oppor- tunity for future business growth.
COMPETITORS
The biometrics industry is a complex industry and there are a large number of companies in active com- petition with each other. It is not uncommon for com- petitors to be, or become, partners of Precise Biome- trics. There are competitors at several different levels, for example, in terms of smart card solutions, and the hardware and software.
In terms of the hardware, Precise Biometrics is one of the few players who can offer combined fingerprint and smart card readers with proven quality and a large number of already installed units. A competitive market has already become established, above all in Asia, for the production of fingerprint readers. This is one of the reasons why Precise Biometrics has chosen to increase the focus of its operations on licensed sales of software. Licensed sales are also more advantageo- us in terms of profitability, while this is also an area where the Company has a powerfully competitive technology and extensive expertise.
Our main competitor among the players involved
in the software, above all in relation to Match-on-Card
solutions, is the French company Sagem Défense Sécu-
rité. Sagem also offers security solutions linked to other
biometric technologies, such as iris and face recogni-
tion. Biometrics is, however, only a small part of Sagem’s
operations. Sagem has a small number of users for
Match-on-Card and has a solution linked to its own
cards and systems. It is quite clear that Precise Biome-
trics dominates the niche market for Match-on-Card in
fingerprint biometrics. In addition to Precise Biome-
trics and Sagem there are several other players in this
niche, but only a few with commercial solutions. Nor is
there any other player who focuses to the same degree
as Precise Biometrics on this field. The competing com-
panies have other product lines and offer Match-on-
Card in combination with their own hardware or smart
cards. These players include Siemens and ID3. Precise
Biometrics’ clear advantage in relation to these compe-
titors is that our solutions are fully independent of the
choice of cards, applications and readers.
A R E V I E W O F T H E G R O U P
With almost 80 million contracted licenses and four national ID card projects, Precise Biometrics is the player in the market that has the most users of Match-on-Card.
Precise Biometrics works in close cooperation with several large partners and is in other words not linked to a specific supplier, which makes us competitive and flexible.
whAT dOES PRECISE BIOMETRICS dO TO ENCOUNTER fUTURE COMPETITORS?
With almost 80 million contracted licenses and four national ID cards, Precise Biometrics is the player in the market that has the most users of Match-on-Card. With these strong references we offer a technology that is recognized and proven in both small and large projects that set rigorous demands on efficiency and security. Po- werful and reliable references are important arguments in the mar- ket in what is a relatively new area of technology and one that is characterized by innovation.
Precise Biometrics is an independent supplier of fingerprint re- cognition with a technology that is compatible with most smart cards and fingerprint readers available on the market. The customer is in other words not strained to use a specific card or reader, which means that the Company’s solution is both cost-efficient and flexible for the customer, who can choose cards or hardware that best suit their requirements. Precise Match-on-Card
™is available as an app- let on Java and Multos cards, which means that the customer can at any time during the process add the fingerprint recognition func- tionality. In projects such as national ID cards the financial under- taking is often of considerable magnitude and therefore flexibility, scalability and cost-efficiency are excellent marketing advantages.
Precise Biometrics works in close cooperation with several large partners and is not linked to a specific supplier, which makes us com- petitive and flexible. Through our global network of partners we can cover most of the world market, even though we are a relatively small company. Through first-rate cooperation with our partners in diffe- rent sectors, Precise Biometrics is paving the way for additional busi- ness opportunities and increasing our presence in the market.
ELECTRONIC SIgNATURE
PhySICAL ACCESS IT SECURITy ANd SINgLE SIgN-ON
BORdER CONTROL AUTOMATEd IdENTITy vERIfICATION
TRAvEL ANd
TICKETINg
V I S I O N, T E C H N O LO GY A N D S O LU T I O N S
V I S I O N, T E C H N O LO GY A N D S O LU T I O N S
vISION, TEChNOLOgy ANd SOLUTIONS
The world market for biometric solutions is expected to experience an annual growth of some 30 per cent to 2010 (IBG’s Biometrics Market and Industry Report 2006-2010), and of the total biometric market, solu- tions for verification with fingerprints account for ap- prox. 45 per cent. This is the segment in which Precise Biometrics operates and the Company has a leading position in the licensing of fingerprint technology in a rapidly expanding market: smart cards with inte- grated fingerprint technology.
The interest in smart card solutions is increasing on a global scale. Many countries that issue national ID cards want to use the opportunity to combine re- quirements for strong personal integrity, secure iden- tification, user-friendliness and simple access to pu- blic services with Match-on-Card technology. There is also rapidly growing interest in health cards, bank cards, and driving licenses based on smart cards, and in ID cards for large companies and organizations.
One of the main advantages of Match-on-Card in ID cards is the opportunity to expand their use for com- mercial purposes.
With 80 million contracted licenses, Precise Bio- metrics is a world leading supplier of Match-on-Card.
There is considered to be major potential for a signifi- cant increase in license sales of the Company’s solu- tions on the basis of our strong references and proven technology in the years ahead.
MANy AdvANTAgES fOR CUSTOMERS
The interoperability of Precise Match-on-Card
™has been demonstrated in several different projects, because the technology is compatible with all the smart cards and fingerprint readers available on the market.
Another factor of great importance for its accep- tance is that the interoperability not only includes the opportunity to make adjustments to both established and new standards under development, but also that Precise Match-on-Card
™can be used on smart cards
from all the smart card suppliers on the market re- gardless of card platform (Java, Multos, Microsoft .Net or ISO card) that is used.
There are many important advantages that contri- bute to making Precise Match-on-Card
™a very inte- resting solution, not only for national ID cards, but also for many other applications.
FLEXIBILITY
Smart cards with Precise Match-on-Card
™offer ex- tensive flexibility and interoperability because the technology does not rely on the type of cards, finger- print readers or applications. This means that all the components can be replaced during different phases of a project to meet changes in economic conditions, system requirements or other needs.
COST-EFFICIENCY
Flexibility also means cost-efficiency. The interopera- bility between the smart card and an application also implies autonomy in relation to suppliers, which can be utilized during the different procurement phases for a smart card project’s entire life-cycle.
SCALABILITY
Precise Match-on-Card
™can be adapted without pro- blem to large and small projects, and can easily be expanded with additional users as requirements change. Precise Match-on-Card
™is used in Thailand’s national ID card project, where more than 60 million cards will soon be issued, but the technology can also be used in much smaller corporate projects.
AVAILABILITY
With a global network of partners, Precise Biometrics’
technology is available throughout the whole world and all leading smart card companies offer cards with Precise Match-on-Card
™. Our partners include
Imagine a world without keys and PIN
global system integrators, card manufacturers and companies that have focused on Identity Management.
SECURE AND PROVEN TECHNOLOGY
With almost 80 million licensed cards, Precise Biometrics is the market leader for Match-on-Card and its references include custo- mers and projects with high demands on security and efficiency, such as the national ID cards in Thailand and Portugal, and the US Department of State.
ThE wORLd wANTS SMARTER Id hANdLINg
Demands are rapidly increasing for smarter and more secure ID handling than the use of passwords, PIN codes and traditional ID cards. The driving forces are the need for greater security and simpli- city, and the realization that it is possible to save both time and mo- ney. Smart card solutions based on Precise Match-on-Card
™satisfy these requirements and in the future the world will in all probability be using smart cards with Precise Biometrics’ technology in many different contexts. The opportunity to adapt, package and license the core technology as software components also presents a vision of the future with completely new applications for fingerprint recognition.
The list of currently established and potential future applica- tions is already a long one. For smart cards with Precise Match-on- Card
™there are at the present time several specific applications that Precise Biometrics considers to present great potential. These are bank and debit cards, travel and local transportation, health and health care, ID cards at a national level, but also for companies, pu- blic authorities and large organizations.
POTENTIAL fUTURE APPLICATIONS
• Mobile phones incorporating biometrics to replace access cards and as muli-terminals to pay bills, book arrangements and travel.
• Smart cards with Precise Match-on-Card
™used as customer loy- alty cards by chain stores, hotels and travel companies.
• Car rental by means of fingerprint recognition.
• Smart cards used as patient cards at hospitals.
• Access for students to lecture rooms, libraries and personal study information.
• Remote controls with built-in sensors to use pay-TV services.
• Membership cards in the form of smart cards for access to premi- ses and events.
• Identification in conjunction with submission of tax returns and other documents to the authorities.
fOCUS AREAS
fOR PRECISE MATCh-ON-CARd
TMBANKING ID CARDS
TRAVEL & TRANSPORTATION
HEALTH CARE
MOBILE TELEPHONY
V I S I O N, T E C H N O LO GY A N D S O LU T I O N S
NEw R&d fOCUS EXTENdS MARKET POTENTIAL fOR PRECISE BIOMETRICS’ TEChNOLOgy
Precise Biometrics has made major investments in Research and Development (R & D) since the end of the nineties for the purpose of offering fingerprint solutions at the very forefront of the biome- trics market. This is reflected in the Company’s portfolio of patents, which includes 67 registered patents in 23 patent families.
Significant parts of Precise Biometrics’ R&D resources have been aligned towards developments better adapted to its customers following the broad global penetration of the market by different biometric technologies. This change has been further reinforced in 2007.
This new focus of R&D is based on the strong technological plat- form that has previously been developed and which is symbolized by the trademarks Precise BioMatch
™, Precise BioCore
®and Precise Match-on-Card
™.
A large part of the development work is now conducted for the purpose of ensuring that an increasing proportion of the Company’s sales is based on licenses instead of focusing on the hardware. Even if the combined fingerprint and smart card readers Precise 200 MC and Precise 250 MC are included as important components in the overall solutions offered to customers, the Company will continue to increase its focus on licensed sales of software. Precise Biometrics also sees potential in the licensing of the Company’s technology to hardware manufacturers in the form of embedded solutions. This is a strategy that falls within the general objective of a greater focus on licensed sales.
In 2007 extensive resources have been assigned in cooperation with OKI for the development of an integrated solution in the form of a chip that includes Precise Biometrics’ algorithm. This chip will start to be mass produced in the spring of 2008 for companies that manufacture electronic devices such as mobile units, payment ter- minals, lock systems for cards, and satellite boxes. This complete biometric chip means that these types of companies can cut down on their development work and reduce the time it takes to launch new products on the market. Precise BioMatch
™and Precise BioCo- re enable completely new applications for fingerprint recognition.
Another development area that has continued to be prioritized during the year is Match-on-Card. The result of this work is that Precise Match-on-Card
™can now also be offered on smart cards that use the operating system Microsoft .Net. This core technology has previously been used in versions for all the other leading types of smart cards: Java, Multos and the so-called ISO card. Another important priority in 2007 has been the development of segment-
Precise BioMatch™ and Precise BioCore enable completely new applications for fingerprint recognition.
V I S I O N, T E C H N O LO GY A N D S O LU T I O N S
KO N C E R N Ö V E R S I KT
adapted tools that simplify the use of Precise Biome- trics’ technology in specific areas. Another factor that will contribute to enhanced marketing opportunities for Precise Biometrics’ different solutions is that sup- port for Windows Vista was introduced for all pro- ducts in 2007, both hardware and software.
SOfTwARE SOLUTIONS ANd PROdUCTS PRECISE BIOMATCH™
The foundation of Precise Biometrics’ strength is the Company’s unique core technology – the algorithm Precise BioMatch
™, which all of the solutions and pro- ducts are based on.
PRECISE MATCH-ON-CARD™
Precise Match-on-Card
™is the Company’s technolo- gy for storage and matching of fingerprints on smart cards. This solution provides powerful protection for both the stored information and personal integrity, since the reference image of the fingerprint never lea- ves the card. Precise Match-on-Card
™has a unique position in the market since the technology can be applied to smart cards from all the suppliers of smart cards on the market, regardless of which platform the smart card uses.
PRECISE BIOCORE
®Precise BioCore
®is the Company’s fingerprint tech- nology package in a licensed version for integration in mobile and stationary units. Precise BioCore
®is used in the electronic circuit developed by Precise Biometrics’ Japanese partner OKI. The technology can also be offered as a software component in so- called Embedded Solutions, which circuit manufac-
turers can in turn license to companies that manufac- ture lock systems and consumer products.
FINGERPRINT READERS
As one of Precise Biometrics’ fingerprint readers that can handle Match-on-Card, the Precise 250 MC is a splendid example. This combined fingerprint and smart card reader has a wide range of applications and is recommended for use in public environments.
Its large sensor makes it user-friendly even for unac- customed users. The reader is PIV-adapted, which has led to orders from NASA. In Portugal the reader is used for verification when citizens collect their new ID cards.
The 200-series also includes Precise 200 MC, which offers similar functionality as Precise 250 MC but has a smaller sensor, which makes it ideal for log- ging onto computers in office or bank environments.
67 REGISTERED PATENTS
The creation of effective protection for the Precise Match-on-Card
™technology is an important objecti- ve for Precise Biometrics’ patent strategy. The portfo- lio of patents has been successively expanded since 2001 and at the end of 2007 included 67 registered pa- tents in 23 patent families, and 50 applications for pa- tents. Precise Biometrics has twelve different patent families for the Match-on-Card technology alone.
V I S I O N, T E C H N O LO GY A N D S O LU T I O N S
KO N C E R N Ö V E R S I KT M A R K E T S A N D F U T U R E P R O S P E C T S
In 2007 Precise Biometrics initiated sales work in line with a new regional sales organization based on the five geographic markets of Europe including Scandi- navia, Asia, North America, Latin America, and the Middle East & Africa.
This reorganization has achieved a broader, more result-oriented and cost-efficient working of the mar- kets, where the group’s sales and marketing resour- ces are optimally controlled and structured according to the specific requirements of the respective markets and customers. The opportunity to adapt resources over time in a more flexible way is considered to be essential in that the global biometrics market is cha- racterized by major differences in terms of interest and maturity.
In some markets, Asia for example, there was a very rapid development of new applications in the consumer sector in 2007, which implies new market potential for Precise Biometrics. In the European market the national ID card segment is in a critical phase,
In other parts of the world, in Latin America for example, the biometrics market is in a phase of deve- lopment that resembles the situation in Asia and Eu- rope several years ago. There was extensive interest in biometrics in 2007, but so far this has not resulted in any tangible projects of any great importance. Ne- vertheless, it is extremely important to monitor and encourage developments in Latin America, the Midd- le East & Africa, and to work for an establishment of Precise Biometrics’ trademark with new regional partners.
EUROPE
The most important event in terms of orders in the geographic market that constitutes Europe is that Precise Biometrics became part of a consortium, led by Gemalto, during the second quarter and was awar-
ded the tender for the national ID card in Portugal.
This is the first order for an ID card in Europe based on Precise Match-on-Card
™. The order confirms Pre- cise Biometrics’ leading position in the market in re- lation to Match-on-Card, i.e., the technology to pro- vide smart cards such as national ID cards with the facility to both store and match fingerprints.
The fact that Precise Biometrics has previously participated in projects where Precise Match-on- Card
™-solutions were delivered to the national ID card projects in Thailand and Qatar has been of great significance in capturing the interest of the European countries still in a critical decision-making and pro- curement stage. The order from Portugal can there- fore be considered an important breakthrough in Eu- rope for Precise Biometrics’ core technology.
Portugal’s ID card project is being monitored by many of the European countries since the Citizen Card that Portugal will issue during a seven-year period to its population of 14 million is an essential component of the ambition to comply with the requirements in the EU’s plan of action for e-administration (2010).
For Portugal the choice of a smart card with Pre- cise Match-on-Card
™means it acquires several ad- vantages in terms of cost-efficiency and the opportu- nity to freely choose between different suppliers of smart cards, applications and readers. The high per- formance offered by Precise Biometrics’ fingerprint solution also means that Portugal’s Citizen Card has the advantage of a broad functionality that can be successively expanded. In its basic version the new ID card will replace several current ID documents and in the long term it can also be used for identification in association with voting, for tax and health care functions, as well as other important functions in as- sociation with the public authorities.
The perception that there is a large aftermarket potential in relation to national ID cards has also been confirmed when the Company received at the end of
MARKETS ANd fUTURE PROSPECTS
Flexible solutions – a source of strength on different markets
M A R K E T S A N D F U T U R E P R O S P E C T S
the fourth quarter a follow-up order from Portugal for the fingerprint reader Precise 250 MC.
A follow-up order from the leading Swiss telecom company, Swisscom, was received in the fourth quar- ter. The order was for the keyboard Precise 100 MC BioKeyboard, which is used for fingerprint logon in computer systems. The value of the order was SEK 2.4 million.
The successful cooperation concerning a biome- tric solution for SAS has given the Company a strong platform to offer other airlines and suppliers to the aviation industry similar solutions, and there are many reasons to believe that cooperation with new customers will be initiated in 2008. An expansion of flight security is in focus in large sections of the avia- tion sector, but new technology is also being prioriti- zed to speed up the flow of passengers during check- in, to improve cost-efficiency, and to expand customer services.
Fyrplus Teknik in Karlstad, Sweden, changed its name to Precise Biometrics Solutions at mid-year.
This was part of the refocusing of operations from more traditional consulting services to the delivery of fingerprint solutions, and also to establish it as an in- tegrator of the technology marketed by the parent company. A good balance has been achieved during the year between the traditional consulting services and operations that focus more on biometrics.
ASIA
The geographic market Asia has huge future poten- tial for Precise Biometrics. Market developments in biometrics are intensive and potential applications for Precise Biometrics’ core technology exist in many different areas, from consumer products to more in- dustrial applications such as security solutions.
A certain degree of progress was made in 2007 and this has led to expectations of significant sales opportunities in 2008, both through sales to emerging market segments via the new subsidiary in Hong Kong and via the partly-owned company Smart Uni- corn Solutions (SUS), which was initiated as a joint venture project at the beginning of 2006.
SUS continued to improve its operations in the
first quarter and therefore it is extremely gratifying that a final business transaction could be reached with the company in the second quarter, with Precise Biometrics increasing its holding from 30 to 38 per cent. This was also important in relation to the back- drop of the positive development of biometrics in the region. During the year SUS has signed agreements and initiated pilot projects with China’s largest ener- gy company, China Southern Power Grid Ltd., and one of the largest mobile operators, China Mobile, which opens the way for Precise Biometrics’ techno- logy to be used in mobile phones of the future.
Towards the end of the year there was an intensifica- tion of SUS’s marketing activities and a number of projects will be communicated to the market in 2008.
The rising tempo on the market means that the future prospects for SUS are considered to be very good in- deed.
The business operations of SUS mean that Precise Biometrics’ technology can reach out to completely new market segments and applications. There is also considerable market potential in the region in the segment where the company has had extensive pre- vious experience, which is why a new subsidiary was established in Hong Kong during the third quarter.
The objective of this establishment was to further reinforce Precise Biometrics’ position and its trade- mark in the large and important Asian market. This new presence in the region has enabled the pace of marketing activities to be increased during the latter part of the year, which has considerably simplified the work of establishing new customer relations that can result in an increase in licensed sales. Coopera- tion with existing customers and current projects, e.g., Thailand’s national ID card, has also been made easier now that Precise Biometrics has its own staff in the region.
Embedded Solutions is a market segment that has
great future potential for the Company. Cooperation
was initiated in 2006 with the global electronics group
OKI Electric Industry Co. Ltd. for the development of
a completely new chip. In the fourth quarter of 2007
OKI presented the results in the form of a unique chip
with fingerprint functionality that can be used in
M A R K E T S A N D F U T U R E P R O S P E C T S
payment terminals, door locks, satellite boxes and lock systems for cars. An important advantage for companies that develop and manufacture these types of products is that the complete chip reduces the need for them to conduct time consuming development work and also that the products can be launched on the market more quickly. OKI plans to initiate a pro- duction volume of approx. 200,000 chips every month, starting in the spring of 2008, and this volume gives an indication of the importance that licensed sales can have for Precise Biometrics in the future. Reve- nues from sales will depend on OKI’s actual sales, but nevertheless the prospects for the future are judged to be very positive.
NORTh AMERICA
The geographic market North America has not lived up to expectations in 2007. The PIV market, originally considered to be a source of high potential value, has been a disappointment for all the players in this seg- ment in the US. PIV cards are smart ID cards which, following a presidential directive, were to be issued by the federal authorities to all their employees and consultants. So far only a fraction of the employees have been included in the system since the authorities never received an extension to their budgets to imple- ment the project. In the last few years Precise Biome- trics has invested considerable resources in terms of finance and personnel to give the Company a strong position in the market prior to the expected breakth- rough for PIV.
In spite of many activities in the market and pro- jects with both the authorities and the private sector, sales have not reached the set target so that towards the end of 2006 the Company significantly reduced the number of employees in the subsidiary in the US.
Efforts to adapt the organization to the market condi- tions have continued. A new strategy was also esta- blished for 2007 involving a greater focus on sales work from the headquarters in Lund. It has therefore been possible, in spite of a small number of staff in the US, to continue to monitor market trends and to actively participate in Match-on-Card projects during the year.
Some new orders have been received in 2007, but volumes have been on a limited scale. Examples of orders during the second and third quarters include delivery of the combined fingerprint and smart card reader Precise 200 MC to the Federal Agency of Ad- ministration, an order for Precise 250 MC from NASA, a follow-up order for a fingerprint reader from Brid- gestone and Lockheed Martin, and a delivery from the Precise 200-series to the existing customer the US Department of State. There are, however, expecta- tions that sales will increase in 2008, even if it still remains very difficult to predict market develop- ments and sales trends.
The factors that had a dampening effect in 2007 on this development were that the federal authorities froze their acquisition budgets in the first quarter of the year and expectations for implementation of PIV were not realized. The growing interest in biometric solutions in the American finance and health care sectors is, however, an interesting development in the market, and during the year Precise Biometrics has been engaged in several pilot projects in these seg- ments.
LATIN AMERICA
Of Precise Biometrics’ five geographic markets, Latin America is the region where the development of bio- metrics can clearly be seen to be in an initial stage.
The market is not yet mature enough for more sub- stantial projects, even if the Company has participa- ted in a number of pilot projects during the year. Ho- wever, interest in biometrics is rapidly awakening and one segment considered to be of special im- portance in the future is smart national ID cards in the region. Some countries in Latin America are plan- ning to introduce such ID cards and therefore Precise Biometrics has intensified its marketing during the year together with local partners. One very positive development is that several leading smart card com- panies have intensified their market activities in the region, both in those countries where the introduc- tion of national ID cards may become an imminent issue, as well as in other market segments.
Precise Biometrics has also, together with its glo-
M A R K E T S A N D F U T U R E P R O S P E C T S
bal partner Gemalto, participated during the second quarter in mar- keting events to demonstrate the advantages of smart cards with integrated Precise Match-on-Card
™solutions, and also to provide information on experiences gained from the national ID card pro- jects in Thailand and Qatar.
The fact that Precise Biometrics can, in a potential future mar- ket such as Latin America, demonstrate that the Company’s techno- logy has almost 80 million contracted licenses for Precise Match-on- Card
™and has established cooperation with the world’s leading smart card companies is also considered to be extremely im- portant.
ThE MIddLE EAST & AfRICA
Precise Biometrics received an order in 2007 for a national ID card for a small country in the region. This tender was also awarded via participation in a consortium led by the Company’s partner Gemal- to, one of the world’s leading suppliers of smart cards. For reasons of business confidentiality, Precise Biometrics will not be able to name the actual country until some time in 2008. The order is signi- ficantly smaller (approx. 600,000 licenses) than the national ID card project in Portugal, but nevertheless is very important in terms of the Company’s business strategy.
There are several countries in the geographic market the Middle East & Africa that are investigating the prospects for national ID cards based on smart cards, and with its experience from other such projects Precise Biometrics, in cooperation with its partners and via consortiums, will find itself in a strong position during future nego- tiations. In terms of market strategy it is also important for the Com- pany to continue working in the coming year, even if negotiations will no doubt lie beyond 2008, to position ID cards based on smart cards with Precise Match-on-Card
™as the best technological solu- tion. The fact that Precise Biometrics’ biometric solution can be used together with smart card solutions from all the established smart card suppliers in the market is also an important advantage during its marketing activities in the Middle East & Africa. A priority task for sales work in 2007 has therefore been to find cooperation with the right partners.
Recognition of fingerprints is a rapid, secure and smart way of verifying an individual. No two fingerprints have the same pat- tern.
Recognition of fingerprints is a rapid, secure and smart way of verifying an individual. No two fingerprints have the same pattern.
M A R K E T S A N D F U T U R E P R O S P E C T S
E M P LOY E E S
EMPLOyEES
Competence and initiative are the keys to success
Precise Biometrics offers its employees many challenges through an exciting combination of products and solutions that lie at the fore- front of a relatively new area of technology in an international arena.
The corporate culture is characterized by competent and com- mitted staff, who demonstrate a strong loyalty to the Company and its business concept: to offer market-leading fingerprint solutions with special emphasis on the use of technology for small, secure platforms such as smart cards.
Precise Biometrics is a market leader in several segments of the market, which in combination with the interesting developments in the field of biometrics, means there is great potential for the perso- nal development of the members of its staff. Personal initiative is encouraged and the working environment is characterized by open- ness and an informal dialog between colleagues, corporate manage- ment and the different departments in the Company. The commit- ment of the staff has dramatically simplified the organizational changes that have been implemented in the past year to achieve further reductions in costs and to adapt Precise Biometrics’ organi- zation to the new conditions and requirements in the market. Con- firmation of the great commitment and confidence in the future that pervades the Company was also explicit in the employees´ willing- ness to participate in an incentive program with the opportunity to subscribe to options completed in the third quarter.
There were 38 (49) employees at the end of the year, of which two are based in the US and one in Hong Kong. The reduction in the number of employees in comparison with previous years is a result of structural measures. Of the total number of employees at the end of the year, 28 (35) were men and 10 (14) were women, and more than 69 per cent of the employees in the group were less than 40 years old. Approximately 92 per cent have an academic education.
The external recruitment that has been carried out in the group during the year has included both replacements and new hires as part of the reorganization process. This reorganization reflects that Precise Biometrics is in the process of adjustment from a business focusing on technology and development to one characterized by a greater focus on solution-targeted marketing and sales.
Absence due to illness was low during the year, a total of 1.2 (1.2)
Other education, 8%
Graduate engineers, 42%
Graduate economists, 8%
< 30 years, 10%
30–39 years, 58%
> 40 years, 32%
Finance and
administration, 21% Sales and marketing, 24%
Consulting, 34% Research &
development, 21%
Other academic education, 42%
EdUCATION
AgE
fUNCTION
ABSENCE dUE TO ILLNESS
1,2% 1,2%
0%
1%
2%
3%
2,4%
1,1% 1,1%
2003 2004 2005 2006 2007 E M P LOY E E S
per cent. Absence due to illness was 1.5 per cent for women, and 1.1 percent for men.
Staff turnover in the group was 35.6 per cent (38.7). New compe- tence is needed when a company changes its focus from technology to marketing, which often leads to a higher staff turnover than nor- mal.
The average age was 35.5.
Salaries and other remuneration, excluding payroll overhead, amounted to SEK 25.6 million (35.0) during the year.
INTENSIvE EffORTS TO INTROdUCE NEw wORK PROCESSES ANd ROUTINES
Precise Biometrics has been working intensively in 2007 to intro- duce new cost-efficient internal routines and work processes, as well as common work methods and values. The work of improving the efficiency of marketing and sales, increasing business perfor- mance, and achieving greater profitability has also been assigned high priority during the year. All Sales Directors have participated in sales conferences and training courses as part of the implementa- tion of a market strategy where the Company has a more prominent position in relation to end customers and a greater focus on solu- tion-targeted sales. All the Sales Directors have also been putting more effort into the establishment of long-term and profitable busi- ness relations with selected partners in the Company’s five geo- graphic markets.
On the whole the Company is now better prepared for the future as a result of an improved balance and interaction between staff engaged in technology and development work and sales staff with responsibility for marketing and sales activities.
The organization is also ready for future challenges both in
terms of the market and adaptation to new requirements for cost-
efficiency and profitability.
T H E S H A R E A N D O W N E R S
hISTORy
Precise Biometrics’ share was listed on the Stockholm Stock Exchange on October 3, 2000 at a quotation pri- ce of SEK 63.19.
On December 31, 2007 the Company had 101,220,600 shares listed on the Nordic Stock Exchan- ge Small Cap list and a round lot consists of 2,000 sha- res. They are designated PREC and the ISIN code is SE0001823303.
ShARE PRICE MOvEMENTS
In 2007 there was a total turnover of 143,049,216 PREC shares, i.e., an average turnover of 572,196 shares per day of trading. The closing price on December 28, 2007 was SEK 1.38. During the year the quotation has fluctuated from SEK 4.05 to 1.31.
OwNERShIP STRUCTURE
The number of shareholders at the end of the year was 6,719 (7,037). The proportion of foreign owners
was 26.5 per cent (29.9). See table, for ownership struc- ture as of December 31, 2007.
OPTIONS PROgRAM
During the year Precise Biometrics has issued an op- tions program that includes all its employees for the purpose of stimulating long-term commitment to the Company’s objectives to achieve positive development.
The number of options and the dilution that full uti- lization of the options would result in is 2.3 per cent. See also page 43, note 19, for further information.
ANALySIS ANd ShAREhOLdER INfORMATION An analysis has been conducted during the year by Redeye (Greger Johansson, tel. +46 (0)8-545 013 33).
Financial information on Precise Biometrics is available at www.precisebiometrics.com.
Questions can be addressed directly to the Com- pany via e-mail: investor@precisebiometrics.com. For annual reports, interim reports and other informa- tion on the Company, please call +46 (0)46 31 11 00.
ThE ShARE ANd OwNERS
6,000 12,000 18,000 24,000 30,000
Share SIX Generalindex SIX IT
Number of shares bought and sold, thousands (incl.late applications)
ShARE PRICE MOvEMENTS ANd TURNOvER 2003–2007
T H E S H A R E A N D O W N E R S
1) Issue directed to institutional investors. The subscription rate amounted to SEK 160 and Precise Biometrics received an issue amount of SEK 40 million. 2) Issue directed to institutional investors. The subscription rate amounted to SEK 225 and Precise Biometrics received an issue amount of SEK 135.3 million. 3) Issue directed to institutional investors and a small number of large private investors. The subscription rate amounted to SEK 87 and Precise Bio- metrics received an issue amount of SEK 30.5 million. 4) Issue with preferential rights to existing shareholders. The subscription rate amounted to SEK 4 and Precise Biometrics received an issue amount of SEK 31.7 million. 5) Issue with preferential rights to existing shareholders. The subscription rate amounted to SEK 1.70 and Precise Biometrics received an issue amount of SEK 40.4 million. 6) Issue directed to institutional investors and a small number of large private investors. The subscription rate amounted to SEK 3.10 and Precise Biometrics received an issue amount of SEK 15.5 million. 7) Issue with preferential rights to existing shareholders. The subscription rate amounted to SEK 2.25 and Precise Biometrics received an issue amount of SEK 45.7 million. 8) Issue directed to the Japanese partner Silex technology, Inc. The subscription rate amounted to SEK 7.04 and Precise Biometrics received an issue amount of SEK 7 million. 9) Issue directed to Loqware Sweden AB’s main shareholders for acquisition of the company for a value of SEK 8.3 million. 10) Issue directed to European institutional investors. The subscription rate amounted to SEK 7.25 and Precise Biometrics received approx. SEK 63 million before deductions for issue costs. 11) Issue for acquisition of remaining shares in Loqware Sweden AB. Precise Biometrics received approx. SEK 580,000.
12) Non-cash issue for acquisition of 30 per cent of Smart Unicorn Solutions. 13) Issue with preferential rights to existing shareholders. The subscription rate amounted to SEK 3.50 and Precise Biometrics received an issue amount of SEK 85 million. 14) Non-cash issue for acquisition of 8 percent of Smart Unicorn Solutions.
CAPITAL STOCK dEvELOPMENT
year Transaction Increase in no. of
shares Total no. shares Increase in share
capital. SEK Total share
capital. SEK Nominal amount. SEK
1997 Company registered 1.000 1.000 100.000 100.000 100
1997 New issue 220 1,220 22,000 122,000 100
1998 Split 1,218,780 1,220,000 - 122,000 0.1
1998 New issue 180,000 1,400,000 18,000 140,000 0.1
1998 New issue 223,700 1,623,700 22,370 162,370 0.1
1999 Bonus issue - 1,623,700 487,110 649,480 0.4
1999 New issue 720,000 2,343,700 288,000 937,480 0.4
2000 New issue
1)250,000 2,593,700 100,000 1,037,480 0.4
2000 Redemption of subs. options 74,000 2,667,700 29,600 1,067,080 0.4
2000 New issue
2)600,000 3,267,700 240,000 1,307,080 0.4
2000 Redemption of subs. options 204,500 3,472,200 81,800 1,388,880 0.4
2001 Redemption of subs. options 54,500 3,526,700 21,800 1,410,680 0.4
2002 New issue
3)350,000 3,876,700 140,000 1,550,680 0.4
2002 Redemption of subs. options 80,000 3,956,700 32,000 1,582,680 0.4
2002 New issue
4)7,913,400 11,870,100 3,165,360 4,748,040 0.4
2003 New issue
5)23,740,200 35,610,300 9,496,080 14,244,120 0.4
2004 New issue
6)5,000,000 40,610,300 2,000,000 16,244,120 0.4
2004 New issue
7)20,305,150 60,915,450 8,122,060 24,366,180 0.4
2005 New issue
8)1,050,00 61,965,450 420,000 24,786,180, 0.4
2005 New issue
9)1,053,750 63,019,200 421,500 25,207,680 0.4
2005 New issue
10)8,700,000 71,719,200 3,480,000 28,687,680 0.4
2005 New issue
11)71,250 71,790,450 28,500 28,716,180 0.4
2006 New issue
12)1,125,000 72,915,450 450,000 29,166,180 0.4
2006 New issue
13)24,305,150 97,220,600 9,722,060 38,888,240 0.4
2007 New issue
14)4,000,000 101,220,600 1,600,000 40,488,240 0.4
ShAREhOLdER REgISTER
Shareholder No. of shares No. in %
of share capital and votes
Storebrand fonder 4,992,666 4.9
Fjärde AP-fonden 4,500,000 4.4
Smart Unicorn Group Ltd 4,300,000 4.2
Banco fonder 3,344,199 3.3
Folksam fonder 1,900,000 1.9
HJ Byggkonsulter AB 1,420,000 1.4
Bernhard Nils bolag 1,333,333 1.3
Odin fonder 1,124,480 1.1
Silex technology Inc. 1,050,000 1.0
Others 77,255,922 76.3
Total 101,220,600 100.0
Source: SIS Ägarservice
ALLOCATION Of ShARES
No. of shares No. in %
Foreign ... 26,861,733 ... 26.5 Swedish ... 74,358,867 ... 73.5 of which Institutions ... 48.4 Private persons ... 51.6
ALLOCATION Of ShARES
No. in % of shares 10 largest shareholders ...26.3 25 largest shareholders ...33.6 100 largest shareholders ...43.8
OwNERShIP STATISTICS
No. of No. of share- No. of Prop. of shareholders holders in % shares votes in %
1–2,000 3,308 49.2 3,171,592 3.13
2,001–10,000 2,201 32.8 12,004,383 11.85
10,001–100,000 1,090 16.2 32,114,341 31.73
100,001–1,000,000 108 1.6 26,635,092 26.32
1,000,001–5,000,000 12 0.2 27,295,192 26.97
Total 6,719 100 101,220,600 100
Sweden ... 73.5%
Norway ... 7.0%
Denmark ... 5.1%
China ... 4.2%
Luxemburg ... 2.4%
Great Britain ... 2.0%
Switzerland ... 1.2%
Japan ... 1.0%
Netherlands... 0.6%
Finland ... 0.5%
Cyprus ... 0.5%
Ohters... 2.0%
gEOgRAPhIC ALLOCATION Of ShARES IN %
ALL FIGURES , AS OF 31 DECEMBER 2007
B OA R D O F D I R E C TO R S
BOARd Of dIRECTORS
LARS GRÖNBERG 1949
Chairman since: 2003, board member since 2000.
Education/qualifications: Graduated from Stockholm School of Economics.
Other assignments: Chairman of among others Actit AB, Bindomatic AB, and Matkompaniet AB.
Board member of among others XL Print Syd AB, Teracom AB and Connecta AB.
Previous assignments in last five years:
Chairman of Song Networks AB, Cash Guard AB, and ProAct IT Group AB. Board member of Finn Solvang AS and PSI Group ASA.
Shares in Precise Biometrics: 40,000.
CHRISTER FÄHRAEUS 1965
Board member since: 1997, founder of Precise Biometrics.
Education/qualifications: Bachelor of Science, Lund University. Master of Science Bioengineering, UCSD, USA. PhD h.c., Lund University.
Other assignments: Managing Director EQL Pharma AB. Chairman of Agellis Group AB, Flatfrog Labs AB and Respiratorius AB. Board member of among others Cellavision AB, Monkfish Instruments AB, Anoto Group AB and EQL Pharma AB.
Previous assignments in last five years:
President Anoto Group AB, CEO Anoto Group AB, Managing Director Agellis Group AB.
Shares in Precise Biometrics: 0.
LISA THORSTED 1967 Board member since: 2006.
Education/qualifications: Master of Science in Economics and Business Administration, Copenhagen Business School, Denmark.
Other assignments: Vice President for Commercial Planning at SAS, Scandinavian Airlines Denmark A/S.
Previous assignments in last five years:
Assignments in different business areas in SAS.
Shares in Precise Biometrics: 0.
MARC CHATEL 1955 Board member since: 2005.
Education/qualifications: Mechanical Engineering, Federal Polytechnic School, Lausanne, Switzerland.
Other assignments: CEO Finakey S.A. and board member of Neocuctis Inc.
Previous assignments in last five years: CEO and European Director for Corporate Software and COO for Logitech S.A. Board member of Eta lent S.A. and Apoxis S.A.
Shares in Precise Biometrics: 100,000.
JAN T JÖRGENSEN 1948 Board member since: 2005
Education/qualifications: Master of Science, Technical University of Norway, Norway.
Management Program, Harvard Business School, USA.
Other assignments: CEO Arbaflame AS.
Chairman of Nemko AS. Board member of BaneTele AS and Nammo AS.
Previous assignments in last five years: CEO Kitron ASA. CEO Kvaerner Oil & Gas. Vice President UMOE ASA. Chairman of Sensonor ASA.
Shares in Precise Biometrics: 0.
EVA MARIA MATELL 1958 Board member since: 2007.
Education/qualifications: Graduated from Linköpings Tekniska Högskola, Industrial economics, International marketing.
Other assignments: Sales and Marketing Director XponCard AB. Board member of XponCard OY.
Previous assignments in last five years:
Assignments in different business areas in XponCard Group AB.
Shares in Precise Biometrics: 0.
LENA WIDIN KLASÉN 1960 Board member since: 2007.
Education/qualifications: PhD in Image coding at Linköping University, Institution for System technology. Graduate engineer, Data technology Linköping University, Sweden.
Other assignments: Manager of department for Sensor systems at Swedish Defence Research Agency (FOI). Board member of Tekniskt Vetenskapliga Rådet, Institutet för Strategiska Produkter ISP and board member of Tekniska Högskolan, Linköping University.
Previous assignments in last five years:
Shares in Precise Biometrics: 0.
AUDITORS
Dan Andersson, 1956, Authorized public accountant, senior auditor Öhrlings Pricewaterhouse Coopers AB, Lund. Auditor for Precise Biometrics since 1999.
Åke Christiansson,1954, Authorized public accountant, Öhrlings PricewaterhouseCoopers AB, Malmö. Auditor for Precise Biometrics since 2004.
LARS GRÖNBERG JAN T JÖRGENSEN
MARC CHATEL CHRISTER FÅHRAEUS EVA MARIA MATELL LISA THORSTEDLENA WIDIN KLASÉN
AS OF DECEMBER 31, 2007
M A N AG E M E N T G R O U P
MANAgEMENT gROUP
THOMAS MARSCHALL 1967 President & CEO
Employed since: 2006.
Education/qualifications: Diplomaed Marketing Economist, Henley Management, Great Britain.
Other assignments: Board member of Dralle A/S and Smart Unicorn Solutions (China).
Previous assignments in last five years:
General Manager A.P. Möller Maersk, and CEO Synkron A/S.
Shares/options in Precise Biometrics: 172,000 / 800,000.
JONAS ANDERSSON 1957 Vice President, Business Development Employed since: 2002.
Education/qualifications: Graduate Engineer, Lunds Tekniska Högskola and Enseeiht, France.
Other assignments:
Previous assignments in last five years:
Director National ID Card at Precise Biometrics AB.
Shares/options in Precise Biometrics: 10,000 / 150,000.
NIKLAS ANDERSSON 1968 CFO
Employed since: 2004.
Education/qualifications: Graduate Economist., Lund University.
Other assignments:
Previous assignments in last five years:
Finance Director Lyreco AS.
Shares/options in Precise Biometrics: 55,000 / 150,000.
KARIN SVEHEIM 1975 Director Markets Employed since: 2000.
Education/qualifications: Diplomaed International Marketing Economist, iiU, Sweden/
Pace University, USA.
Other assignments:
Previous assignments in last five years:
Product Manager and Partner Manager at Precise Biometrics AB.
Shares/options in Precise Biometrics: 4,000 / 150,000.
ANN-SOFI HÖIJENSTAM 1952 Director IR & Communications Employed since: 2004.
Education/qualifications: Academic studies in economics and marketing at Lund University.
Other assignments:
Previous assignments in last five years: Public Relations Manager at TAC AB. Manager for Dialogue Communication AB and Corporate Communications Manager at Precise Biometrics AB.
Shares/options in Precise Biometrics: 10,666 / 150,000.
Ann-Sofi has left the Company during the first quarter 2008.
PATRIK LINDEBERG 1973
Director Development & Technical Sales Support (replaces Ola Svedin as of Jan. 31, 08) Employed since: 2007 (fall)
Education/qualifications: Graduate Engineer, Lunds Tekniska Högskola.
Other assignments: Board member of Smart Unicorn Solutions (China).
Previous assignments in last five years: Manager for Technical Account Management at Teleca AB, Product Manager at Precise Biometrics AB.
Shares/options in Precise Biometrics:
0/150,000.
OLA SVEDIN 1966 CTO & VP R & D Employed since: 1998.
Education/qualifications: Graduate Engineer.
Other assignments: -
Previous assignments in last five years: Vice President Research & Development at Precise Biometrics AB.
Shares/options in Precise Biometrics:
12,750 / 100,000.
Ola has left the Company during the first quarter 2008.
THOMAS MARSCHALLKARIN SVEHEIM JONAS ANDERSSON ANN-SOFI HÖIJENSTAM NIKLAS ANDERSSON
OLA SVEDIN PATRIK LINDEBERG
AS OF DECEMBER 31, 2007
