===== SIDA 1 ===== 1 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 Q1 PRECISE BIOMETRICS INTERIM REPORT JAN-MAR 2024 ===== SIDA 2 ===== 2 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 times/second all year round Precise technology is used 100K Precise Biometrics (Precise) is a global pioneer in the field of biometric IT security solutions. The offering includes algorithm products for fingerprint, facial and hand recognition, as well as end -customer products for biometric access (YOUNiQ Access) and visitor management (YOUNiQ Visit). Our focus areas are biometric authentication for mobile phones, laptops, security keys and smart locks, vehicle applications for in -car payment, driver authentication and personal settings/access – as well as specialized systems for visitor management and physical biometric access control. Precise operates through two main business areas, Digital Identity and Biometric Technologies, and operates from its offices in Lund (HQ) and Stockholm, Sweden, Potsdam NY, USA, Seoul, South Korea, Taipei, Taiwan and Shanghai, China. The Precise share is listed on the Nasdaq Stockholm (PREC). Find out more at www.precisebiometrics.com. ===== SIDA 3 ===== 3 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 TABLE OF CONTENTS Q1 2024 IN BRIEF ............................................................................................................................................................................. 4 PRESENTATION AND Q&A ........................................................................................................................................................... 5 CEO COMMENTS .............................................................................................................................................................................. 6 UPDATE FROM THE BUSINESS AREAS ..................................................................................................................................... 8 CUSTOMER OFFERING ................................................................................................................................................................. 11 NET SALES AND OPERATING PROFIT/LOSS ........................................................................................................................ 13 CONSOLIDATED INCOME STATEMENT, IN SUMMARY ................................................................................................. 16 CONSOLIDATED BALANCE SHEET, IN SUMMARY ............................................................................................................ 17 CONSOLIDATED CASH FLOW STATEMENT ......................................................................................................................... 18 CHANGE IN EQUITY (GROUP) ................................................................................................................................................... 19 NOTES ................................................................................................................................................................................................. 20 PARENT COMPANY INCOME STATEMENT, IN SUMMARY ........................................................................................... 23 PARENT COMPANY BALANCE SHEET, IN SUMMARY ..................................................................................................... 24 CONSOLIDATED KEY INDICATORS .......................................................................................................................................... 25 ALTERNATIVE CONSOLIDATED KEY INDICATORS ............................................................................................................. 26 ANALYSIS OF RESULTS ................................................................................................................................................................. 27 FINANCIAL GLOSSARY ............................................................................................................................................................... 28 ===== SIDA 4 ===== 4 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 Q1 2024 IN BRIEF INCREASED REVENUE AND POSITIVE EBITDA FIRST QUARTER ▪ Net sales totaled SEK 21.7 (19.2) million. ▪ EBITDA totaled SEK 3.1 (–0.6) million. ▪ The operating profit/loss for the quarter totaled SEK –2.8 (–6.9) million. ▪ Earnings for the period totaled SEK –3.0 (–6.9) million. ▪ Earnings per share totaled SEK –0.0 (–0.2). ▪ Cash flow from operations totaled SEK –2.8 (–5.3) million. ▪ Cash and cash equivalents totaled SEK 41.1 (34.4) million. ▪ ARR (Annual Recurring Revenue) at the end of the period was SEK 18.3 (17.3 million) SIGNIFICANT EVENTS DURING THE QUARTER ▪ Signed commercial agreement with Korean sensor manufacturer LaserSemicon (formerly CanvasBio) ▪ Launched palm recognition – a new addition to the company’s product portfolio ▪ Showcased the biometric security solutions of the future at the Confederation of Swedish Enterprise’s Företagardagarna 2024 event ▪ Strengthened position in Benelux through local sales team SIGNIFICANT EVENTS AFTER THE QUARTER ▪ Extended partnership with Flowscape Technology and signed new customer agreement ▪ Demonstrated biometric recognition solutions at ISC West and Embedded World FINANCIAL DATA AND KEY INDICATORS Amounts in SEK thousands unless otherwise stated See the Financial Glossary for definitions. 2024 2023 2023 Rolling Amounts in SEK thousands unless otherwise stated Jan-Mar Jan-Mar Full-year 12 months Net sales 21 684 19 150 75 069 77 603 Net sales growth, % 13,2% -32,4% -17,5% -5,2% EBITDA 3 069 -625 -1 691 2 002 Gross margin, % 72,2% 64,8% 63,7% 65,8% Operating profit/loss -2 826 -6 862 -26 458 -22 423 Operating margin, % -13,0% -35,8% -35,2% -28,9% Cash flow from the operating activities -2 832 -5 810 -10 760 -7 781 Cash and cash equivalents 41 148 34 434 47 534 41 148 Annual Recurring Revenue* 18 317 17 274 18 307 18 317 ===== SIDA 5 ===== 5 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 PRESENTATION AND Q&A Precise Biometrics has published a video in connection with today’s interim report, which includes an interview with CEO Joakim Nydemark. The video is available on the Investor Relations page: https://precisebiometrics.com/sv/investerare/ The material in the video is designed to complement the report and provide additional depth and better understanding of the stock market for the company’s business operations. The company also invites you to a live Q&A that starts at 10:00 AM (CET) on May 14, 2024. To take part in the Q&A session, access it via the interactive video player on the Investor Relations page here: https://precisebiometrics.com/investors Questions can be asked directly in the chat function in the interactive player or submitted in advance to investor@precisebiometrics.com. ===== SIDA 6 ===== 6 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 CEO COMMENTS 2024 has hit the ground running, characterized by intensive customer -focused and marketing activities, including attendance at most trade fairs in Europe and the USA, the opening of a sales office in the Netherlands, and new customer and partnership agreements. I am pleased that the positive trend from Q4 continued during Q1, with an increase in net sales to SEK 21.7 (19.2) million and a noticeable improvement in the operating profit before depreciation (EBITDA) to SEK 3.1 ( –0.6) million. Had it not been for two slightly delayed customer payments totaling SEK 11 million (the payments were registered at the beginning of April), cash flow for the quarter would also have been strong. With net sales moving in the right direction and a positive profit before depreciation, I have an optimistic view of the future. In addition to a strong focus on customers and intensive marketing within our two business areas, we have continued to work on streamlining our processes in order to further accelerate our progress towards profitable growth. Precise Biometrics has consolid ated its world - leading position in biometrics with several new partner agreements and collaborations, and is in a stronger position than ever. We now have a well -positioned, diversified product portfolio focused on products including ultrasound sensors, wh ich have both higher growth and better margins than other types of sensors, which bodes well for the future. OUR BUSINESS AREAS AND OUR BUSINESS In our Digital Identity business area, where we offer visitor and access systems with biometrics, we have boosted our strength with additional sales resources in the USA through our partners Genetec and Flowscape Technologies, resulting in a significant in crease in our pipeline of potential new customers. We have also opened a local sales office in Amsterdam to target Benelux, and in due course other parts of Europe. Safety and security are becoming increasingly important, driving demand for biometric access systems such as YOUNiQ Access in workplaces, public buildings and homes. We are also seeing more secure, more efficient visitor systems contributing to increased security and a better customer experience, which we feel has increased demand for YOUNiQ Visit. The mobile market has started to show signs of growth, especially when it comes to demand for more complex ultrasound sensors and software solutions that meet increased security requirements, which benefits our business in the Biometric Technologies business area. Our positioning with algorithms for the latest generation of fingerprint sensors based on ultrasound continues to create good conditions for growth in 2024 and beyond. The launch of our latest product and modality for palm recognition also strengthens our offering going forward, and enables us to address even more customers, verticals, and areas of application. Plam recognition is currently available as a software algorithm product , but is also seamlessly integrated into our products for access management (YOUNiQ Access) and visitor management (YOUNiQ Visit) . Adding palm recognition to the company’s biometric product portfolio further enables biometric multi -factor authentication (MFA), further increasing the level of security and prov iding organizations with customizable authentication and identification options tailored to their specific needs and meeting various regulatory requirements. NEW PARTNER AGREEMENTS New partner agreements and extended partnerships are naturally important components in the company’s journey of growth, and there are two partnerships that I am particularly proud of and would like to highlight. One is the extended partnership with Flowscape Technology, a listed building technology company. The agreement gives Flowscape the right to sell YOUNiQ Visit globally and entails a significant expansion of Precise Biometrics’ international selling power. “We are delighted to further deepen our collaboration with Precise, which is a leader in its category. In our efforts to offer innovative, high-quality solutions to our customers in the area of Smart Office, this type of high-tech system is an important competitive advantage that strengthens our offering to customers. The fact that we have already signed an agreement with a customer in the UK as a result of the collaboration is a clear confirmation of this.” Peter Reigo, CEO of Flowscape Technology ===== SIDA 7 ===== 7 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 The second is the partnership with Infineon Technologies, which has been further strengthened during the quarter. This has included several joint marketing activities such as the Consumer Electronics Show (CES) in the USA and Embedded World in Germany. Dis cussions are also underway about further deepening the collaboration in order to win more joint business. There is a lot going on in the automotive industry in general, where many new services in the vehicles of the future will require payment and biometri c authentication. Biometrics in the automotive industry is expected to grow by more than 23% a year over the next five years, which creates excellent opportunities for Precise Biometrics, as Infineon’s only Premium partner in biometrics in the automotive vertical. MARKET DEVELOPMENT Safety and security are important values that Precise delivers hundreds of thousands of times every single second when our world-leading biometric technology makes the individual the key to unlock doors, mobile phones, computers, and cars, or to create secure authentication when making a payment. There is no doubt that biometrics represents the way ahead for personal identification and authentication in a number of different areas. As a pure software company, we have the opportunity to quickly adapt to mark et requirements, and thus further strengthen our position in this future, as many of our competitors who also build hardware do not have the facility to make the switch as quickly. You can rely on the entire Precise team working incredibly hard to take the company to new heights. I am looking forward to the continuation of 2024, as we, with increased market presence, high -quality products, and more efficient sales and delivery proces ses, will maintain a full focus on creating both growth and profitability. Joakim Nydemark CEO “My top three: ▪ Biometrics are more in demand than ever. ▪ Our focus on sales and cost savings has paid off. ▪ The positive trend from Q4 is continuing, and 2024 looks promising with new customer projects and an extended offering with palm recognition.” CEO Joakim Nydemark ===== SIDA 8 ===== 8 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 UPDATE FROM THE BUSINESS AREAS BIOMETRIC TECHNOLOGIES Precise is experiencing increased interest in biometric solutions, where increased security, multi -factor authentication and a good user experience are driving factors. Collaboration with important partners continues to be deepened, and new partners are being added on an ongoing basis, driving business in the right direction. Equally important is the fact that the company is well positioned for the future and the next generation of products, for example with algorithms for ultrasound sensors and hand recognition. THE AUTOMOTIVE INDUSTRY The collaboration with Infineon Technologies is developing well, and the first vehicles with the shared fingerprint solution are expected to reach the market before the end of the year. Interest in biometric authentication in vehicles is growing, and one important reason for this is that in -vehicle payment will become increasingly common and important. In addition, vehicles are increasingly becoming a software product – SDV (Software Defined Vehicle). SDV is a central concept and means that the hardware is installed during the manufacture of the vehicle, after which continuous updates of functions are made by downloading new software. Vehicles are also being fitted with more and more senso rs, which, combined with new, stricter requirements for road safety and safety in the vehicle, opens up new opportunities for authentication and for Precise. PALM RECOGNITION During the quarter, Precise launched its latest modality, palm recognition. This product is available both as algorithm technology for sensor manufacturers and as an end-customer product integrated into the access and visitor systems YOUNiQ Access and YOUNiQ Visit. The benefits of palm recognition include a clear intention when used, the fact that the technology is touchless, and that it offers a simple user experience. Examples of applications are payment and door access. Precise palm recognition was presented to customers for the first time at a security fair in the USA in April, where it was extremely well received. INCREASED SECURITY WITH LIVENESS AND MFA Liveness and fraud detection, where the Precise product BioLive has a unique position on the market, are more relevant than ever. When biometrics are used in systems with a high level of security, there is also an increased need to protect against fraud, for example in the form of impressions of fingerprints or photos of faces. Biometrics generally has a very high level of security, but with Precise BioLive, which is optimized to detect false impressions and images, and to verify that the biometric impressi on belongs to a living individual, the very highest security demands in the world can be met. In addition to increased security, BioLive also contributes to a better and faster user experience. Precise has also been investing resources in Multi Factor Authentication (MFA) for some time now, which means that more than one identification method is required for physical or digital access. Precise has three modalities (face, hand and finger) that, to gether with the company’s expertise and technology, offer great opportunities in the field of MFA – an area that is included in, among others, the EU’s new NIS2 regulations on cyber security. ===== SIDA 9 ===== 9 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 MOBILE MARKET AND ULTRASOUND SENSORS After a period of lower volumes in mobile phones, the number of mobile phones manufactured has now started to rise again. Precise is well positioned in the mobile market, with strong partners such as Qualcomm and EgisTech, but has also created a strong and strategic position as one of the very few suppliers in the world of fingerprint algorithms for ultrasound sensors. The new generation of mobile screens requires the more advanced ultrasound sensors to read the fingerprint through the m obile screen, as ver y little light passes through. Together with its partners, Precise has an almost unique opportunity to take new market shares, and there is also a higher margin in the ultrasound sensors segment. There are already products on the market with Precise’s ultrasound algorithm, but with more of the new generation of displays, demand will increase. MORE VERTICALS With a long history as a supplier to the mobile industry, Precise is now continuing to expand its offering into new verticals. The automotive industry, smart locks, security tokens and laptops are all important segments. One concrete example of this is Inf ineon, but the partnership agreement with the Korean sensor manufacturer LaserSemicon (formerly CanvasBio) is also exciting, with the first laptops with a shared solution coming to market shortly. ===== SIDA 10 ===== 10 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 DIGITAL IDENTITY The current security situation strengthens Precise’s position in the fields of both access and visitor systems, and the business area is a hive of activity. The fourth quarter was the best ever, while sales in the first quarter were slightly lower, which was expected and normal for Q1. Sales are, however, largely on track, and we see extremely high levels of interest and potential going forward. EXTENDED COLLABORATION WITH FLOWSCAPE Precise extended its collaboration with Flowscape through a global partnership agreement covering all markets in which they operate. This extended collaboration has already resulted in one new customer – a large global consultancy company. MORE SALES RESOURCES AND OPENING OF SALES OFFICE IN THE NETHERLANDS During the quarter, a sales office was opened in the Netherlands, which will initially target the Benelux countries, and in due course additional markets as well. The level of interest and activity has been good, and the first customer has already implemen ted a pilot project. Precise has also boosted its strength with additional sales resources in the USA, as well as further extending its collaboration with existing partners such as Genetec. NEW CUSTOMERS In recent months, Precise has signed many new customers up for YOUNiQ Visit, several of whom are large international companies that are implementing YOUNiQ across the majority of their offices. We are seeing a general increased level of interest in YOUNiQ Visit, the main reasons for such investment being stricter requirements for security, an ambition to become more customer -friendly, and a need to create more efficient administration. PALM RECOGNITION The new palm recognition modality is also being integrated into YOUNiQ Access and Visit as a complement to facial and QR codes. One major benefit of palm recognition is that the hand movement indicates a clear intention. When YOUNiQ Access with palm recognition was presented at one of the world’s largest security fairs, ISC in Las Vegas, there was a great deal of interest. The product is hardware -independent, needing just a sufficiently good camera, but we are also collaborating with hardware partners such as American Hand.ID to create an optimal user experience. “We are proud to be working with Precise, as they are the global leader in premium biometric technologies. Precise is the natural choice for collaboration for our hand-held reader unit, and their performance and expertise in the field of biometrics has impressed us a lot. Together, we are ready to deliver solutions that take biometric authentication to the next level.” Ken Brownlee, CEO of Hand.ID NEW RELEASES AND ROADMAP New releases of both YOUNiQ products were launched during the quarter, and there is a clear roadmap going forward, which includes both new functionality and further improved security and compatibility with different security standards. PERSONAL PRIVACY AND SECURITY Both of these areas are important to us, and we work continuously to both increase our customers’ security and at the same time ensure customers’ personal privacy. We also work to comply with the various industry standards and regulations that are in place . More information about this work is available at precisebiometrics.com. ===== SIDA 11 ===== 11 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 CUSTOMER OFFERING In a society where security is becoming increasingly central, Precise Biometrics helps to create increased peace of mind. This is done by developing innovative technological solutions in the field of biometric recognition, where simplicity and a first-class user experience are combined with a very high level of security because “YOU are the key”. Instead of using a PIN code, password, key, card, etc. to authenticate yourself, you use your finger, face, or palm. There are areas of application in both digital and physical access, and the applications can be found in, for example, mobile phones, laptops, smart locks, security keys and vehicles, and in visitor and access systems. The offering consists of algorithm products, basic technology, which component manufacturers use in their products, and also end -customer products for access and visitor management. The focus of all solutions is to combine high security with a first -class user experience through outstanding technology, based on AI and Deep Learning. – YOU ARE THE KEY WHY PRECISE? ▪ Unique knowledge, as biometrics has been our core business for 25 years. ▪ Established on the global market, our technology is used more than 100,000 times per second, all year round. ▪ Large customer base and a global footprint in the world of biometrics. ▪ Hardware-independent, handling several different biometric modalities such as finger, hand, and face. ▪ Public company are the key ccess visitor management systems Other embedded use cases Smart locks Security tokens Laptops obile phones utomotive are the key ===== SIDA 12 ===== 12 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 THE COMMERCIAL BENEFIT OF BIOMETRIC RECOGNITION The commercial benefit of biometric recognition solutions can be divided into internal company factors and external environmental factors. The internal factors relate to areas such as security, efficiency, user -friendliness, customer service, compliance, and scalability, while the external factors primarily concern the rapid development of technology and AI, and the uncertain security situation. OUR PRODUCTS End-customer products for access and visitor management Algorithm products for biometric recognition ▪ YOUNiQ Access is our access solution for doors based on biometrics, such as facial recognition. ▪ YOUNiQ Visit (EastCoast Visit in Sweden) is our visitor management solution. ▪ BioMatch is our fingerprint matching product. ▪ BioLive is our product to prevent fraud using false fingerprints. ▪ BioEnhance is our product for image enhancement, e.g., regarding fingerprints before matching. ega acro icro Trends Scalability Compliance User Experience educed isk of raud Convenience Security are the key ===== SIDA 13 ===== 13 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 NET SALES AND OPERATING PROFIT/LOSS NET SALES FOR THE QUARTER Net sales during the quarter increased to SEK 21.7 (19.2) million, representing an increase of 13.2%, and net sales were divided between royalty revenues of SEK 10.5 (4.1) million, license fees (including support and maintenance) of SEK 9.8 (13.2) million and other revenues of SEK 1.4 (1.9) million. Royalty revenues have been at a low level over the past two years, but we are seeing an increase to a royalty level that we have not seen since Q1 2022. License fees decreased compared with the same period last year, mainly due to changes in the composition of customers and renegotiated license agreements. The reduction in Other is primarily expla- ined by the fact that less hardware is sold in Digital Identity. BIOMETRIC TECHNOLOGIES Net sales for Biometric Technologies totaled SEK 16.7 (14.0) million and are reported under royalties at SEK 10.5 (4.1) million, licenses at SEK 5.3 (8.8) million, and Other at SEK 0.9 (1.1) million. After a period of low royalty levels towards the end of 2022 and the first part of 2023, as a consequence of low demand and low production volumes in the mobile market, royalty levels increased during Q4 2023 and increased further during Q1 2024. This increase is partly due to Precise being correctly positioned in the area of new sensor technologies such as ultrasound. License fees decreased compared with the same period last year, mainly due to changes in the composition of customers and renegotiated license agreements. The gross margin during the quarter totaled 85.3% (82.3). The increase in gross margin is primarily due to higher sales. Royalty revenues are based on the customers’ sales volumes, and increased royalty revenues therefore have a positive impact on margins as they do not entail any extra costs for Precise. DIGITAL IDENTITY Net sales for Digital Identity totaled SEK 5.0 (5.1) million and are reported under licenses at SEK 4.5 (4.3) million, and other at SEK 0.5 (0.8) million. The proportion of recurring revenues (Annual Recurring Revenue, ARR) increased, while revenues of a non-recurring nature decreased. The ARR at the end of the quarter was SEK 18.3 (17.3) million. The gross margin during the quarter totaled 28.7% (16.9). The higher gross margin is mainly due to a lower proportion of hardware sales, where the margin is lower. The margin in Q1 2023 was also very low due to non -recurring costs in connection with the integration of EastCoast. EARNINGS FOR THE QUARTER The gross margin during the quarter totaled 72.2% (64.8). The increase is primarily caused by increased sales and a changed product mix, as sales in Biometric Technologies increased and this product segment has higher margins. Total amortization of capitalized development expenses was SEK 4.3 (4.5) million. Amortization of acquired intangible assets totaled SEK 0.6 (0.6) million. Operating expenses for the quarter fell slightly to SEK 18.5 (19.3) million due to a strong focus on cost control. The profit/loss at EBITDA level improved to SEK 3.1 (–0.6) million. The improved EBITDA is primarily attributable to higher net sales combined with lower operating expenses. The operating profit/loss for the quarter totaled SEK –2.8 (– 6.9) million. Earnings for the quarter totaled SEK –3.0 (–6.9) million. Total depreciation/amortization totaled SEK 5.9 (6.2) million. Earnings per share (average number of shares) for the quarter totaled SEK –0.0 (–0.2). ===== SIDA 14 ===== 14 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 NET FINANCIAL ITEMS & TAX Net financial items for the quarter totaled SEK –0.2 ( –0.2) million and the tax expense totaled SEK 0.1 (0.1) million. Net financial items are attributable to exchange rate differences in cash and cash equivalents, interest income, interest on the lease liability in accordance with IFRS 16, as well as interest expense on the deferred fixed purchase price related to the acquisition of EastCoast. CASH FLOW & INVESTMENTS The cash flow for the quarter from operating activities totaled SEK –2.8 ( –5.8) million, of which SEK –5.8 ( –5.1) million is attributable to changes in working capital caused by increased accounts receivable. Working capital accumulation was negatively impacted by delayed payments from two large customers of SEK 11 million, which were paid during the first week of Q2. During the quarter, the Group invested SEK 0.o (0.0) million in intangible assets. Total cash flow for the quarter was SEK –6.5 (–12.0) million. CAPITALIZATION & AMORTIZATION OF DEVELOPMENT WORK Development expenses of SEK 3.0 (5.2) million were capitalized during the quarter, and amortization of capitalized development expenses in respect of Digital Identity and Biometric Technologies totaled SEK 4.3 (4.5) million. FINANCIAL POSITION AND LIQUIDITY Cash and cash equivalents at the end of the period totaled SEK 41.1 (34.4) million. Total equity at the end of the period totaled SEK 156.5 (138.9) million, and equity per share was SEK 2.0 (2.9). THE PARENT COMPANY The parent company's net sales for the quarter totaled SEK 17.7 (14.2) million. The operating profit/loss for the quarter totaled SEK –3.1 ( –7.8) million and was affected by amortization of goodwill totaling SEK 0.6 (0.6) million. Cash and cash equivalents at the end of the interim period totaled SEK 26.7 (22.6) million, and equity SEK 146.1 (129.1) million. ORGANIZATION AND STAFF The organization consists of the head office in Lund, Sweden, and offices in Stockholm, Sweden, Potsdam, USA, and Shanghai, China. At the end of the quarter, the Group had a workforce of 43 (50) people, including on -site consultants. The number of employees was 32 (32), of which 24 (26) were located in Sweden. Precise works in an agile way together with several partners, creating a fast -moving, scalable organization. The number of employees does not include partners. FINANCIAL CALENDAR Annual General Meeting 2024 in Lund – May 22, 2024 Q2 Interim Report 2024 – August 16, 2024 Q3 Interim Report 2024 – November 15, 2024 RISK FACTORS The Group and parent company’s business risks and risk management as well as the management of financial risks are described in detail in the Annual Report for 2023, which was issued in April 2024. There have been no incidents of significant importance since then that would affect or change these descriptions of the Group or parent company’s risks and how they are managed. OWNERSHIP STRUCTURE Precise Biometrics AB (publ), corporate ID number 556545 - 6596, is the parent company in the Precise Biometrics Group. Precise Biometrics B’s shares are listed on the Small Cap list of the Nasdaq OMX Nordic. The number of shareholders at the end of the qua rter was 16,270 (17,189), of which the proportion of foreign shareholders is 14.7%. 13,305,644 PREC shares were traded during the quarter. The closing price on March 28 was SEK 1.11, and during the quarter the share price fluctuated between SEK 0.80 and SEK 1.17. ===== SIDA 15 ===== 15 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 This interim report has not been audited by the company’s auditors. The undersigned certifies that the interim report provides a true and fair view of the parent company and Group’s operations, financial position and financial results, and describes the significant risks and uncertainty factors faced by the parent com pany and the companies that belong to the Group. Lund, May 14, 2024 Torgny Hellström Chairman of the Board Jimmy Hsu Mats Lindoff Maria Rydén Åsa Schwarz Peter Gullander Board member Board member Board member Board member Board member Joakim Nydemark CEO For further information, please contact: Joakim Nydemark, CEO Email: joakim.nydemark@precisebiometrics.com This information is information that Precise Biometrics AB is obligated to disclose pursuant to the EU Market Abuse Regulation. The information was submitted for publication on May 14, 2024 at 08:00 AM (CET). ===== SIDA 16 ===== 16 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 CONSOLIDATED INCOME STATEMENT, IN SUMMARY *Dilution effects are only considered in the event that the earnings per share become worse. Dilution effects have not been considered, as the average price is below the price in current option programs. 2024 2023 2023 Rolling Amounts in SEK thousand Note Jan-Mar Jan-Mar Full year 12 months Net sales 2,3 21 684 19 150 75 069 77 603 Cost of goods sold -6 027 -6 741 -27 246 -26 532 Gross profit 15 657 12 409 47 823 51 071 Marketing and sales expenses -8 484 -6 806 -27 420 -29 098 Administrative expenses -3 850 -3 516 -14 150 -14 484 R&D expenses -6 808 -8 911 -32 105 -30 002 Other operating income/expenses 658 -39 -606 91 -18 483 -19 271 -74 281 -73 493 Operating profit/loss -2 826 -6 862 -26 458 -22 423 Finacial income/expenses 4 -229 -166 -291 -354 Profit/Loss before tax -3 055 -7 028 -26 749 -22 776 Tax 86 87 346 345 Profit/loss for the period attributable to parent company shareholders -2 969 -6 941 -26 403 -22 431 Earnings per share, remaining operations, SEK* - before dilution -0,04 -0,15 -0,34 -0,23 - after dilution -0,04 -0,15 -0,34 -0,23 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Profit/Loss for the period -2 969 -6 941 -26 403 -22 431 Other comprehensive income: Items that may be reclassified to profit or loss Changes in accumulated exchange rate differences 158 -13 -127 44 Other comprehensive income for the period 158 -13 -127 44 Profit/Loss total attributable to holders of participations in the parent company -2 811 -6 954 -26 530 -22 387 ===== SIDA 17 ===== 17 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 CONSOLIDATED BALANCE SHEET, IN SUMMARY Amounts in SEK thousand 2024 2023 2023 ASSETS Note March March December FIXED ASSETS Material assets 11 312 8 700 6 447 Goodwill and immaterial assets 130 804 138 931 132 751 TOTAL FIXED ASSETS 142 116 147 631 139 198 CURRENT ASSETS Inventories 292 311 359 Accounts receivable 26 845 16 355 19 173 Other current receivabels 3 016 3 400 3 499 Accruals and deferred income 3 056 2 620 2 903 Cash and cash equivalents 4,6 41 148 34 434 47 534 TOTAL CURRENT ASSETS 74 357 57 120 73 467 TOTAL ASSETS 216 473 204 751 212 665 EQUITY AND LIABILITIES EQUITY Equity 156 509 138 925 159 319 TOTAL EQUITY ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS 156 509 138 925 159 319 LONG-TERM DEBT Long term debt 6 22 614 25 237 17 460 TOTAL LONG-TERM DEBT 22 614 25 237 17 460 SHORT-TERM LIABILITIES Short-term liabilities 4,6 37 350 40 589 35 886 Total Short-term liabilities 37 350 40 589 35 886 TOTAL EQUITY AND LIABILITIES 216 473 204 751 212 665 ===== SIDA 18 ===== 18 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 CONSOLIDATED CASH FLOW STATEMENT 1) The balance sheet item Cash & Cash Equivalents only includes bank balances at both the beginning and end of the period. 2024 2023 2023 Rullande Amounts in SEK thousand Note Jan-Mar Jan-Mar Full year 12 months Cash flow from operating activities Operating profit/loss -2 826 -6 862 -26 458 -22 422 Adjustments for items not included in cash flow 6 011 6 241 24 843 24 613 Interest payments, net -229 -44 386 201 Tax paid -7 -4 -9 -12 Cash flow from operating activities 2 949 -669 -1 238 2 380 before changes in working capital Cash flow from changes in working capital Change in inventories 66 0 -48 18 Change in current receivables -7 306 -3 868 -7 083 -10 521 Change in current liabilities 1 459 -1 273 -2 392 341 -5 781 -5 141 -9 522 -10 162 Cash flow from operating activities -2 832 -5 810 -10 760 -7 781 Acquisition of subsidiaries 6 0 0 -10 000 -10 000 Investment in fixed assets 31 -17 -1 215 -1 167 Investment in intangible assets -3 055 -5 191 -14 101 -11 965 Cash flow from investing activities -3 024 -5 208 -25 316 -23 132 New share issue 0 0 49 523 49 523 Commission expenses 0 -423 -9 979 -9 556 Repurchase of own shares -1 0 0 -1 Payment for sale/buy-back of options 0 0 0 0 Payment of lease liability -622 -529 -2 258 -2 351 Cash flow from financing activities -623 -952 37 287 37 616 Total Cash flow -6 478 -11 969 1 211 6 703 Cash & cash equivalents at beginning of year 47 534 46 405 46 405 34 434 Exchange rate differences in cash & cash equivalents 91 -2 -83 10 Cash & cash equivalents at end of period 1) 41 148 34 434 47 534 41 148 ===== SIDA 19 ===== 19 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 CHANGE IN EQUITY (GROUP) Amounts in SEK thousand 2024 2023 2023 Rolling Note Jan-Mar Jan-Mar Full year 12 months Equity at start of period 159 319 146 302 146 302 138 925 Comprehensive income Profit/loss for the period -2 969 -6 941 -26 403 -22 431 Other comprehensive income Exchange differences 158 -13 -127 44 Total other comprehensive income 158 -13 -127 44 Total comprehensive income -2 811 -6 954 -26 530 -22 387 Transactions with shareholders Stockoptions 5 0 0 0 0 LTI programme 5 1 0 3 4 Repurchase of own shares 5 0 0 0 0 New share issue 0 0 49 523 49 523 New issue cost 0 -423 -9 979 -9 556 Total transactions with shareholders 1 -423 39 547 39 971 Equity end of period 156 509 138 925 159 319 156 509 ===== SIDA 20 ===== 20 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 NOTES NOTE 1 – ACCOUNTING POLICIES This interim report has been prepared in accordance with I S 34 Interim inancial eporting. The parent company’s financial statements have been prepared in accordance with the Swedish nnual ccounts ct and the Swedish nnual eporting Board’s recommendation RFR 2, Accounting for Legal Entities. The recognition and measurement policies and bases of estimates applied in the Annual Report for 2023 report have also been used in this interim report. NOTE 2 – REVENUE ALLOCATION * Sale at a certain time means that revenue is recognized point-in-time at the start of the agreement period, when control has been transferred to the customer. ** Sales over time means that revenue is accrued on a straight-line basis over the term of the agreement. 2024 2023 2023 Rolling Amounts in SEK thousand Jan-Mar Jan-Mar Helår 12 months Segment Biometric Technologies (fd Algo) Royalty 10 488 4 085 17 654 24 057 Licenses, incl. support & maintenance 5 281 8 838 31 500 27 943 Other 911 1 103 3 658 3 466 Digital Identity Licenses, incl. support & maintenance 4 515 4 329 18 308 18 493 Other 489 795 3 949 3 643 Total 21 684 19 150 75 069 77 603 Timing of revenue recognition At point in time* 1 396 1 965 7 740 7 170 Over time** 20 288 17 185 67 329 70 433 Total 21 684 19 150 75 069 77 603 Region/Country Europe 5 824 7 237 29 054 27 641 - w hereof Sw eden 4 819 5 393 20 982 20 408 Asia 8 125 8 406 31 205 30 924 - w hereof China 361 1 320 3 152 2 194 - w hereof Taiw an 6 871 6 067 25 224 26 028 USA 7 735 3 520 14 811 19 025 Total 21 684 19 150 75 069 77 603 ===== SIDA 21 ===== 21 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 NOTE 3 – SEGMENT REPORTING Amounts in SEK thousand Biometric Technologies Digital Identity Total Segment Biometric Technologies Digital Identity Total Segment Net sales 16 680 5 004 21 684 14 026 5 124 19 150 Cost of goods sold -2 459 -3 569 -6 027 -2 484 -4 257 -6 741 Gross profit 14 221 1 435 15 657 11 542 867 12 409 Biometric Technologies Digital Identity Total Segment Biometric Technologies Digital Identity Total Segment Net sales 52 812 22 258 75 069 55 466 22 137 77 603 Cost of goods sold -10 171 -17 075 -27 246 -10 146 -16 387 -26 533 Gross profit 42 641 5 182 47 823 45 320 5 750 51 071 Other information 2024 2023 2023 Rullande Reconciliation profit/Loss Jan-Mar Jan-Mar Full year 12 months Segment profit/Loss 15 657 12 409 47 823 51 071 Marketing and sales expenses -8 484 -6 806 -27 420 -29 098 Administrative expenses -3 850 -3 516 -14 150 -14 484 R&D expenses -6 808 -8 911 -32 105 -30 002 Other operating income/expenses 658 -39 -606 91 Finacial income/expenses -229 -166 -291 -354 Profit/Loss before tax -3 055 -7 028 -26 749 -22 776 Only net sales and product costs are allocated to each segment. Other costs are not allocated at segment level as these items relate to group operations Jan-Mar 2024 2023 jan-mar 2023 Rolling Full-year 12 months ===== SIDA 22 ===== 22 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 NOTE 4 – FINANCIAL INSTRUMENTS The fair value in respect of financial assets and liabilities corresponds in all material respects with the carrying amount in the balance sheet. INTEREST-BEARING LIABILITIES As of November 30, 2021, the Group acquired 100% of the shares in EastCoast Solutions AB and Besökssystem Sverige AB. The purchase price totaled SEK 86,203,000, of which SEK 24,466,000 was paid as at 31 December 2021, partly via a cash payment of SEK 18,000,000 and partly via the issuing of new shares totaling SEK 6,466,000. An additional SEK 8,268 thousand was paid in cash in January 2022. On November 30, 2022, a supplementary agreement was signed that changed the terms and conditions for the remaining liability of SEK 55,000 thousand for the acquisition of EastCoast Solutions AB. On December 1, 2022, SEK 30,000 thousand was paid and on November 30, 2023, SEK 10,000 thousand was paid. SEK 5,000 thousand will be paid on November 30, 2024, SEK 5,000 thousand on November 30, 2025, and SEK 5,000 thousand on November 30, 2026. Interest will be added to the amounts of SEK 5,000 thousand due on November 30, 2025 and SEK 5,000 thousand due on November 30, 2026. The interest, of 3 months STIBOR + 8%, is added from November 30, 2023 until the amounts have been paid. The liability is recognized as an interest-bearing liability as of March 31, 2024. The liability has been calculated at current value at the original effective interest rate of 1.8% and is recognized as other current liabilities (SEK 6,128 thousand) and other non-current liabilities (SEK 11,351 thousand). The effect on earnings of the translation of the liability was estimated at SEK 2,112 thousand and was reported under financial items as other financial expenses during 2023. Precise has the option to pay off the entire remaining purchase price early without incurring any interest expenses. IMPACT ON CASH AND CASH EQUIVALENTS IN 2024 (REPORTED IN INVESTING ACTIVITIES): There is no impact on the Group’s cash and cash equivalents during Q1 2024. NOTE 5 – LTI PROGRAM The nnual General eeting 2022 resolved, in accordance with the Board’s proposal, to establish a long-term share bonus program (LTI 2022/2028) for all employees in Precise Biometrics. In order to facilitate the implementation of LTI 2022/2028 and to ensure the delivery of shares to the participants, and to cover the company’s costs for social security contributions, the meeting also decided to amend the Articles of Association in the form of the introduction of new Class C shares, authorization for the Board of Directors to issue Class C shares, authorization for the Board of Directors to buy back Class C shares, and approval of the transfer of shares to participants in LTI 2022/2028. The implementation of Class C shares took place in Q4 2022. As of March 31, 2024, Precise Biometrics held 1,085,000 Class C shares. ===== SIDA 23 ===== 23 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 PARENT COMPANY INCOME STATEMENT, IN SUMMARY 2024 2023 2023 Rolling Amounts in SEK thousand Note Jan-Mar Jan-Mar Full year 12 mån Net sales 1 17 710 14 177 53 787 57 320 Cost of goods sold -8 214 -8 450 -32 709 -32 473 Gross profit 9 496 5 727 21 078 24 848 Marketing and sales expenses -5 684 -4 891 -18 552 -19 345 Administrative expenses -3 727 -3 269 -13 203 -13 661 R&D expenses -3 803 -5 271 -19 813 -18 345 Other operating income/expenses 655 -85 -626 114 -12 559 -13 516 -52 194 -51 237 Operating profit/loss -3 063 -7 789 -31 116 -26 390 Financial income/expenses -140 -103 -109 -146 Group contributions received 0 0 3 487 3 488 Profit/loss before tax -3 202 -7 892 -27 738 -23 048 Tax 0 0 0 0 Profit/loss for the period -3 202 -7 892 -27 738 -23 048 ===== SIDA 24 ===== 24 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 PARENT COMPANY BALANCE SHEET, IN SUMMARY Amounts in SEK thousand 2023 2022 2023 ASSETS Note March March December Fixed assets Fixed assets 1 776 2 510 2 056 Immaterial assets 29 282 39 126 31 630 Deferred tax assets 90 558 90 558 90 558 TOTAL FIXED ASSETS 121 616 132 194 124 244 CURRENT ASSETS Inventories 64 311 64 Accounts receivable 24 467 12 667 13 704 Accounts receivable Group 2 074 844 1 076 Other receivables 11 656 8 795 12 162 Accruals and deferred income 2 635 2 214 2 488 Cash and cash equivalents 26 655 22 613 35 618 TOTAL CURRENT ASSETS 67 551 47 444 65 112 TOTAL ASSETS 189 167 179 638 189 356 EQUITY AND LIABILITIES Restricted Equity Share capital 23 539 14 254 23 539 Paid-in unregistered share capital 0 0 0 Statutory reserve 1 445 1 445 1 445 Reserve for development expenses 20 002 26 672 21 556 Total restricted equity 44 986 42 370 46 540 Unrestricted Equity Share premium reserve 168 316 137 635 168 316 Retained earnings -64 033 -42 965 -37 849 Profit/loss for the year -3 203 -7 892 -27 738 Total non-restricted equity 101 081 86 777 102 729 Total Equity 146 066 129 147 149 269 LONG-TERM DEBT Long term debt 11 351 16 866 11 302 TOTAL LONG-TERM DEBT 11 351 16 866 11 302 SHORT-TERM LIABILITIES Short-term liabilities 31 750 33 625 28 785 Total Short-term liabilities 31 750 33 625 28 785 TOTAL EQUITY AND LIABILITIES 189 167 179 638 189 356 ===== SIDA 25 ===== 25 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 CONSOLIDATED KEY INDICATORS * The key indicator is calculated excluding current liabilities to RM International. 2024 2023 2023 Rolling Amounts in SEK thousands unless otherwise stated Jan-Mar Jan-Mar Full-year 12 months Net sales 21 684 19 150 75 069 77 603 Net sales growth, % 13,2% -32,4% -17,5% -5,2% Gross margin, % 72,2% 64,8% 63,7% 65,8% EBITDA 3 069 -625 -1 691 2 002 Operating profit/loss -2 826 -6 862 -26 458 -22 423 Working capital * 43 135 26 410 43 683 43 135 Capital employed 173 988 138 925 176 724 173 988 Liquidity ratio, % 198,3% 140% 203,7% 198% Equity/assets ratio, % 72,3% 67,9% 74,9% 72,3% Earnings per share before dilution, SEK -0,04 -0,15 -0,34 -0,23 Earnings per share after dilution, SEK -0,04 -0,15 -0,34 -0,23 Equity per share, SEK 1,99 2,92 2,03 1,99 Number of shares (thousands) 78 464 47 513 78 464 78 464 Weighted avg. number of shares, adjusted for dilution effect (thousands) 78 464 47 513 65 568 73 306 Number of employees at the end of the period 32 32 31 32 Average number of employees during the period 31 31 30 31 Annual Recurring Revenue 18 317 17 274 18 307 18 317 ===== SIDA 26 ===== 26 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 ALTERNATIVE CONSOLIDATED KEY INDICATORS Amounts in SEK thousands 2024 2023 2023 Rolling unless otherwise stated Jan-Mar Jan-Mar Full-year 12 months Net sales 21 684 19 150 75 069 77 603 Net sales growth, % 13,2% -32,4% -17,5% -5,2% Gross profit 15 657 12 409 47 823 51 071 Net sales 21 684 19 150 75 069 77 603 Gross margin, % 72,2% 64,8% 63,7% 65,8% Operating profit/loss -2 826 -6 862 -26 458 -22 423 Net sales 21 684 19 150 75 069 77 603 Operating margin, % -13,0% -35,8% -35,2% -28,9% EBITDA 3 069 -625 -1 691 2 002 Depreciation and amortization -5 895 -6 237 -24 767 -24 425 Operating profit/loss -2 826 -6 862 -26 458 -22 423 Current assets 74 357 57 120 73 467 90 704 Current liabilities excl. current liabilities EastCoast International* 31 222 30 710 29 784 30 296 Working capital 43 135 26 410 43 683 60 408 Sales expenses -8 484 -6 806 -27 420 -29 098 Administrative expenses -3 850 -3 516 -14 150 -14 484 R&D expenses -6 808 -8 911 -32 105 -30 002 Other operating income/expenses 658 -39 -606 91 Total operating expenses -18 483 -19 271 -74 281 -73 493 Cost of goods and services sold -6 027 -6 741 -27 246 -26 532 Depreciation Cost of goods sold 4 744 5 035 20 244 19 952 Cost of goods and services sold excluding depreciation -1 283 -1 706 -7 002 -6 580 Operating expenses -18 483 -19 271 -74 281 -73 493 Depreciation Operating expenses 1 152 1 202 4 523 4 473 Operating costs excluding depreciation -17 331 -18 069 -69 758 -80 823 Balance sheet total 216 473 204 751 212 665 216 473 Non-interest-bearing liabilities 42 485 65 826 35 941 42 485 Capital employed 173 988 138 925 176 724 173 988 Closing equity 156 509 138 925 159 319 156 509 Average equity 163 176 140 939 158 780 163 176 Current assets minus inventories 74 065 56 809 73 109 74 065 Current liabilities 37 350 40 589 35 886 37 350 Liquidity ratio, % 198% 140% 204% 198% Equity 156 509 138 925 159 319 156 509 Total assets 216 473 204 751 212 665 216 473 Equity/assets ratio, % 72,3% 67,9% 74,9% 72,3% ===== SIDA 27 ===== 27 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 ANALYSIS OF RESULTS 2024 2023 2023 Rullande Amounts in SEK thousand Note Jan-Mar Jan-Mar Full year 12 months Net sales 2,3 21 684 19 150 75 069 77 603 Cost of goods and services sold excluding depreciation -1 284 -1 706 -7 003 -6 581 Operating costs excluding depreciation -17 331 -18 069 -69 758 -69 020 EBITDA 3 069 -625 -1 691 2 002 Total depreciation -5 895 -6 237 -24 767 -24 425 Operating profit/loss -2 826 -6 862 -26 458 -22 423 ===== SIDA 28 ===== 28 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 FINANCIAL GLOSSARY NET SALES GROWTH Percentage change compared with the corresponding period in the previous year. A measure of whether a company’s net sales are increasing. GROSS MARGIN Gross profit/loss divided by net sales. Indicates the proportion of sales that is left over to cover wages, other operating expenses, interest and profit. OPERATING PROFIT/LOSS Profit loss before financial net and tax. measure of a company’s profit before interest and taxes, i.e., the difference between operating income and operating expenses. OPERATING EXPENSES Operating expenses excluding cost of goods sold. Operating expenses are expenses that do not belong directly to a particular product or product group. Common operating expenses include, for example, wages and other personnel expenses, as well as rental of premises. EBITDA Profit loss before financial items and depreciation. This key figure shows the Group’s profit loss before depreciation/amortization of capitalized assets. This measure makes it possible to make comparisons with other companies, regardless of whether the operation is based on acquisitions or through organic growth. OPERATING MARGIN Operating profit/loss divided by net sales. Defines what proportion of each Swedish krona of sales is left over to cover interest, taxes and any possible profit. CASH FLOW Cash flow from operating activities after changes in working capital. The operating cash flow indicates whether a company can generate a sufficiently positive cash flow to maintain and expand its operation, or whether it needs external financing. WORKING CAPITAL Current assets less current liabilities. This measure shows the capital a company needs to finance operating activities. CAPITAL EMPLOYED Total assets less non-interest-bearing liabilities and provisions. This measure shows how much capital is used in operations and is thus one component of measuring the return from operations. ===== SIDA 29 ===== 29 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 EQUITY Equity at the end of the period. Equity is the difference between the Group’s assets and liabilities, which corresponds to the Group’s equity that has been contributed by shareholders and the Group’s accumulated profit. AVERAGE EQUITY The average equity was calculated as equity for the last four quarters divided by four. LIQUIDITY RATIO Current assets excluding inventories divided by current liabilities. This key figure shows the group’s ability to pay in the short term. EQUITY/ASSETS RATIO Equity divided by assets on the balance sheet date. This key indicator shows what proportion of assets is funded by equity. This measure can be of interest when assessing the Group’s ability to pay in the long term. RETURN ON EQUITY Profit loss after tax divided by average equity. This key figure shows the business’s return on shareholders’ capital invested and is thus a measure of how profitable the Group is. Investors can compare this measure with the current bank interest rate or return from alternative investments. The measure can also be used to compare profitability between companies in the same industry. EARNINGS PER SHARE BEFORE DILUTION Profit/loss for the period divided by average number of shares. EARNINGS PER SHARE AFTER DILUTION Profit/loss for the period divided by the weighted average number of shares adjusted for potential shares that give rise to a dilution effect. EQUITY PER SHARE Equity on the balance sheet date divided by the number of shares on the balance sheet date. A measure of the value of equity per share, which is used when valuing the share in relation to the share price. ANNUAL RECURRING REVENUE (ARR) ARR is defined as repeat revenues at the end of the quarter for Digital Identity, converted to a 12-month period. Consequently, there is no direct link between the ARR figure and future software revenues for Digital Identity. The ARR metric is used for contractual recurring revenues for the Digital Identity segment, as Digital Identity has a large customer base based on SaaS revenues. There are a small number of large customers in Biometric Technologies (formerly Algo), and therefore license fees are not followed up using the definition of ARR in this segment. ===== SIDA 30 ===== 30 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 ===== SIDA 31 ===== 31 Interim Report Jan-Mar 2024 Precise Biometrics AB (publ), corp. ID no. 556545-6596 precisebiometrics.com