Fingerprints strengthens its financial position and ability to invest in growth

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The board of Fingerprint Cards AB (publ) (“Fingerprints” or the “Company”) has decided on an early redemption of the Company’s outstanding bond loan of MSEK 300 through a new financing amounting to at least MSEK 340 with an option to increase up to MSEK 430. As a result of the challenging market in which the Company has operated since Covid-19, the outstanding bond loan has limited the Company’s financial flexibility and opportunity to invest fully in the growth segments. As the Company now proactively chooses to carry out an early redemption of the outstanding bond loan, the bond loan’s restrictive covenants no longer apply. This will enable an increased investment in the growth segments, an improved gross margin and thus also profitability.

“We are very happy to announce that Fingerprints, in a challenging financing market, has secured new financing through convertible loans and a fully guaranteed rights issue. The funding and repayment of our outstanding bond loan significantly improves the company’s balance sheet and financial position that importantly improves our ability to execute on the Company’s growth plans, both organically and potentially by select smaller acquisitions. With this transaction and a recovering market in Q2, the board and management feels even more confident about the Company’s future as one of the global leading biometric company in existing and new markets”, says Christian Lagerling, chairman of the board.

The Company has entered into a binding agreement (the “Subscription Agreement”) with an entity managed by Heights Capital Management, Inc. (“HCM”) regarding an undertaking to subscribe for convertible bonds (the “Convertible Bonds”) for a total nominal amount of MSEK 160 (“Tranche 1”) with an option of additional Convertible Bonds with a total nominal amount of MSEK 90 that can be exercised under certain conditions and if the Company so wishes (“Tranche 2”). The Company has further resolved on a fully guaranteed rights issue of B-shares of approximately MSEK 180 (the “Fully Guaranteed Rights Issue”) and a rights issue of A-shares of approximately MSEK 3.4 (together with the Fully Guaranteed Rights Issue, the “Rights Issue” and together with Tranche 1, the “Transaction”). The proceeds from the Transaction shall be used for the redemption of the Company’s outstanding bond loan of MSEK 300 maturing in December 2024 as well as for general corporate purposes, including increased investments within the Company’s growth segment. The Company and the board have chosen to carry out the Transaction to create increased financial and operational flexibility through an early redemption of the outstanding bond loan, which enables an increased focus on growth and profitability. Through this press release, the Company also publishes certain financial information as of 30 June 2023.

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Summary

• The board of the Company has today resolved (i) to enter into the Subscription Agreement with HCM, (ii) on the Rights Issue and (ii) to propose to the General Meeting (as defined below) to authorise the board to issue the Convertible Bonds in Tranche 1 and Tranche 2. The extraordinary general meeting is planned to be held on 18 August 2023 (the “General Meeting”) and will resolve on the subsequent approval of the Rights Issue and resolve on the authorisation to the board to issue the Convertible Bonds. The notice to the General Meeting will be published separately on or around 18 July 2023. The Company’s largest shareholder has made an irrevocable undertaking to vote in favour of the proposals at the General Meeting.

  • The purpose of the Transaction is to strengthen the Company’s financial position and gain increased financial flexibility by early redemption of the outstanding senior secured bond loan 2021/2024 (ISIN: SE0017071855) of MSEK 300 maturing in December 2024 (the “Bonds”). Provided that the Transaction is approved by the General Meeting, the Company will receive proceeds of approximately MSEK 340 in total before transaction costs.

  • Pursuant to the Subscription Agreement the Convertible Bonds shall be issued in two tranches and at 92 percent of the nominal amount. Tranche 1 has a total nominal amount of MSEK 160 and the Company also has an option…