ANNUAL
RE P ORT
2021
NEXT BIOMETRICS GROUP ASA
WWW.NEXTBIOMETRICS.COM
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TABLE OF CONTENTS
Letter from the CEO
NEXT Biometrics at a glance
Report from the Board of Directors
Corporate Governance Report
Corporate Social Responsibility Report
Financial statements - Group
Notes to the Financial Statements - Group
Financial Statements - Parent company
Notes to the Financial Statements - Parent company
Responsibility Statement
Auditor's Report
Alternative Performance Measures
3
4
5
12
23
26
30
55
59
68
69
74
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LETTER FROM THE CEO
DEAR SHAREHOLDERS,
2021 was an eventful year for NEXT. Most importantly we are now much closer to our aim of becoming a customer
focused technology company with a tangible growth agenda.
We believe the market for biometric solutions has favorable long-term growth prospects. Biometrics solutions increase its
presence in current and new market segments. As one example, Microsoft announced in September last year that the
company now permits users of the company’s products to replace passwords with biometric authentication and
authentication apps. Other leading tech companies are likely to follow, which will increase demand for biometric products
and solutions.
Still, we will remember 2021 as a year that was heavily impacted by the COVID-19 pandemic. The pandemic has severely
affected the semiconductor supply chain as certain components became scarce following a period of factory shutdowns
and an upsurge of demand. These challenges have limited NEXT delivering sensors to certain customers during 2021.
In spite of these external headwinds, we have continued our efforts to turn around this company. Our increased customer
focus is demonstrated in the growing number of design-wins that we have announced during the last 12 months. We have
now accumulated 24 design wins since Q4 2019. It is from new and existing design-wins (customers) that future revenues
will be generated.
Lately however, nearly all industries have been affected by the supply chain constraints. With 24 times more customers
compared to when we started the transformation of this company, we unfortunately see that many of our newly won
customers has severe challenges with their supply chain. This inhibits them to build and sell their products and hence to
put volume orders with us.
From a customer perspective the most significant events during the last twelve months were the FAP20 purchase order
announcement and partnership with a global tech giant and a FAP20 purchase order from an India based OEM. We have a
strong belief in the future success of our FBI certified FAP20 sensor. Together with our new partners, we are in the position
to disrupt a large and fast-growing market.
With the Q4 financial report NEXT delivered three proof-points on the way to success. 1) We continue keeping solid cost
control within guided limits, 2) We continued to add (on average) one new design-win per month and 3) booked a record
high adjusted gross margin, demonstrating the true potential of our technology and products.
We are particularly satisfied that we achieved a historical company best 47% adjusted gross margin in Q4. NEXT’s gross
margin will continue to fluctuate quarter over quarter based on the product mix, but these three positive proof-points
clearly demonstrates the potential for NEXT as soon as these new customers are able to start generating orders and
revenue.
Thank you.
Peter Heuman
CEO of NEXT Biometrics Group ASA
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NEXT BIOMETRICS AT A GLANCE
NEXT provides secure easy-to-use fingerprint sensor technology for authentication in four different market segments
Public Security, Access control, Office and Notebooks, Payments and Fintech. The Group’s patented NEXT Active
Thermal™ principle allows the development of large, high quality fingerprint sensors in both rigid and flexible formats.
PRODUCT DEVELOPMENT
Historically, NEXT has had a strong R&D focus and has made significant progress with its’ product and technology
development roadmaps. The Group has developed products for the four different market segments, they are used in
various applications such as point of sales terminals, Notebooks, Internet of Things applications etc.
As per early 2021, the Group has the following main products:
• Notebook sensor products:
o NEXT standard Notebook sensors
o NEXT Secure Bio premium sensor for Notebooks
• FAP20 sensor products used in a variety of applications such as point of sales terminals, ID devices, Bluetooth
printers and digital valets within Fintech applications.
o Readers
o Sensor Modules
• Aadhaar India products connected to the worlds' largest biometric market
o Readers
o Sensor modules
During 2021, the Group continued its product development focus working closely with customers and prospects on
improving already developed solutions and accelerate design-ins of new projects.
SALES AND MARKETING
The Group has a dedicated sales force that has established relationships with major OEMs active in selected market
segments. Historically, the company has shipped most of its sensor products to Notebook OEMs. Starting in 2020, the
company established a diversified customer base, which include Biometric technology companies, POS manufacturers,
biometric HW manufacturers and Government ID providers.
The Group has established partner agreements with a number of players in different target markets to leverage the Group’s
large-size, highly secure, easy-to-use and cost-effective sensor products to drive increased revenue. NEXT’s ongoing
business development efforts are expected to bring additional volumes from new use cases and targeted niche
applications.
MANUFACTURING
NEXT has established outsourced production with strong partners in Asia with proven ability to produce large volumes of
high quality and robust sensors at very high yield rates for mass-market deployment which is highly recognized and
appreciated by existing and potential new customers. The Group can increase production capacity rapidly when needed.
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REPORT FROM THE BOARD OF DIRECTORS
A GLOBAL LEADER IN FINGERPRINT SENSOR TECHNOLOGY
NEXT Biometrics Group ASA (“Parent Company”) is a public limited liability company incorporated and domiciled in
Norway, with headquarters in Apotekergata 10B, 0180 Oslo, Norway. The Parent company and its subsidiaries (“NEXT”
or “the Group”) provides advanced fingerprint sensor technology that delivers uncompromised security and accuracy
for the best possible user experience in the market segments Payment & Fintech Public Security, Access Control,
Office and Notebooks.
NEXT’s fingerprint sensors are unique, using active thermal conductivity to read the fingerprint image, as opposed to
capacitive or optical sensing. This patented sensing principle allows designs uniquely compatible with low temperature
polysilicon production processes (“LTPS”) used in high-end display factories. This enables significantly lower production
cost for the Group’s fingerprint sensors compared to competing sensor technologies. The Group has developed and
markets a portfolio of fingerprint sensor modules, readers, and flexible biometric subassemblies, which may be
incorporated into a wide range of products and solutions.
The Group has six wholly owned subsidiaries: NEXT Biometrics AS (Norway) and its subsidiaries NEXT Biometrics Inc.
(Seattle, USA), NEXT Biometrics China Ltd. (Shanghai, China), NEXT Biometrics Taiwan Ltd. (Taipei, Taiwan), NEXT
Biometrics Solutions India Pvt. Ltd. (Bengaluru, India) and NEXT Biometrics s.r.o. (Prague, Czech Republic).
NEXT Biometrics Group ASA’s shares are listed on the Oslo Stock Exchange.
HIGHLIGHTS 2021
Key 2021 developments in NEXT:
• Revenues for 2021 of NOK 50.8 million compared to NOK 58.1 million in 2020. 2021 revenues adjusted for
unfulfilled order backlog is NOK 60.8 million
• Adjusted gross margin
1)
of 30% for 2021 compared to 17% in 2020
• OPEX ex options
1)
reduced to NOK 47.2 million in 2021, compared to NOK 87.6 million in 2020
• Adjusted EBITDA
1)
of NOK -32.0 million in 2021 compared to NOK -77.5 million in 2020
• Announced two major FAP20 partnership contracts and started high volume production and shipments of the
FAP20 sensors
• Accumulated 24 design-wins from Q4 2019 up to December 2021, which will contribute to future revenues
• Completed a private placement in February 2021 raising gross proceeds of NOK 88.9 million
1)
Please see section Alternative Performance measures on page 74 for further details.
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BUSINESS OVERVIEW
Biometric fingerprint sensing technology continues to gain traction across the world. Biometric technology is used in
Notebooks and Governmental projects and businesses have started deploying the technology in medical services,
devices for financial inclusions such as pension payments, point of sale devices (POS), Office and facility access, voting
registration and Time and Attendance solutions. In India, the Aadhaar program holds more than one billion people
fingerprints registered. This provides access to different governmental services and benefit systems. NEXT is a key
player in this market. India’s deployment of fingerprint technology and solutions has raised interest in other developing
countries to deploy national ease of use fingerprint-based biometric infrastructure and devices for similar purposes.
The Group has developed products, established its manufacturing platform and sales and marketing to establish a
business with significant footprint and customers in key markets such as Payment & Fintech, Public Security, Access
control, Office and Notebooks and POS solutions. The Group has shipped close to 10 million units to its customers after
initiation of the company.
In the Notebook market the Group is working to increase the run rate revenues from existing clients. The Group is also
working on new business opportunities with additional laptop manufacturers, focusing both on developing new
opportunities with standard sensors and high security implementations based on the Microsoft Secure Bio standard.
Early 2021, the Group announced its first order and design-win for its new Secure Bio laptop product with its largest
existing laptop customer. The sensor product will be included in several of the customer’s laptop products. Moreover,
the Group announced a new Notebook design win with an Asia based tech group during the second half of the year. The
customer will be using the sensor in Notebook products expected to be launched during 2022.
In the Public Security and Government market, the Group has been established as a key player in India with Aadhaar
certified devices. The Group also has established a foothold in Africa and Latin America with sales of sensors and
readers. The FAP20 high security solution is used by both existing customers as well as new customers for POS solutions
for voting, financial inclusion and other solutions requiring ease of use and high security authentication.
NEXT’s FAP20 sensor has been granted Personal Identity Verification (PIV) Certification in the US following tests by the
Federal Bureau of Investigation (FBI). The Group announced two major FAP20 partnership contracts and started high
volume production and shipments of the FAP20 sensors during 2021, which form an important part of the Group’s
growth agenda. Moreover, the Group announced design-wins and shipped FAP20 sensors to multiple customers. The
FAP20 sensor is addressing a large growing market and the Group believes that the FAP20 sensor has a potential to
disrupt a sizeable portion of this market. The Group continues its dialogue with current and prospective customers to
increase sales of the FAP20 sensor technology. The product is sold both through the Group’s direct sales channels and
partner network such as fulfilment distributors as well as value added resellers.
The Group has a unique proven technology that outperforms competitive solutions in key markets from form factor (size
and thickness), biometric performance, quality, standard compliance and unit cost.
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FINANCIAL SUMMARY – THE GROUP
Comprehensive income
Revenues were NOK 50.8 million in 2021 compared to NOK 58.1 million in 2020.
Gross margin was NOK 9.0 million (18%) in 2021 compared to a gross margin of NOK 8.7 million (15%) in 2020.
Adjusted Gross margin was NOK 15.2 million (30%) in 2021 compared to an adjusted gross margin of NOK 10.1 million
(17%) in 2020.
Payroll expenses were NOK 46.0 million in 2021, down from NOK 63.2 million in 2020. Average number of employees
were 26 in 2021 compared to 40 employees in 2020. The Group had 26 employees at the end of 2021, compared to
29 employees at the end of 2020. The reduction of employees is due to the implementation of the Group’s cost
reduction program. Share-based remuneration, including related accrued social security tax, included in payroll
expenses was, NOK 12.9 million in 2021, compared to NOK 4.0 million in 2020. Research and development (R&D)
expenses included in payroll expenses were NOK 9.9 million in 2021 compared to NOK 28.9 million in 2020.
Other operating expenses were NOK 14.2 million in 2021, compared to NOK 28.9 million in 2020. R&D expenses
included in other operating expenses were NOK 5.5 million in 2021, compared to NOK 7.0 million in 2020.
Total R&D expenses, included in both payroll and other operating expenses, were NOK 15.5 million in 2021, a decrease
from NOK 35.9 million in 2020.
Depreciation, amortization and impairment were NOK 7.1 million in 2021, compared to NOK 21.9 million in 2020. The
decrease in 2021 is mainly related to impairment losses amounting to NOK 6.6 million booked in 2020 and reduced
amortization of lease costs in 2021.
Net financial items amounted to a net loss of NOK 0.1 million in 2021, compared to a net gain of NOK 0.4 million in
2020.
Income tax cost was NOK 1.6 million in 2021, compared to NOK 3.0 income tax gain in 2020. The gains in 2020 were
related to net reversal of tax costs in foreign subsidiaries in the Group.
EBITDA for the Group was negative NOK 51.2 million in 2021, compared to negative NOK 83.3 million in 2020.
Adjusted EBITDA for the Group was negative NOK 32.0 million in 2021, compared to NOK 77.5 million in 2020.
Loss after taxes for the Group was NOK 60.0 million in 2021, compared to NOK 101.8 million in 2020.
Financial position and cash
Total assets as of 31 December 2021 amounted to NOK 161.7 million, compared to NOK 131.5 million as of 31
December 2020.
Total equity was NOK 134.3 million at the end of 2021 compared to NOK 97.2 million at the end of 2020.
The Group had non-current liabilities of NOK 2.0 million and current liabilities of NOK 25.4 million at the end of 2021,
compared to non-current liabilities of NOK 6.9 million and current liabilities of NOK 27.4 million at the end of 2020.
Cash and cash equivalents amounted to NOK 102.7 million at the end of 2021 compared to NOK 68.0 million at the end
of 2020.
Cash flow
Net cash flow from operating activities was negative with NOK 47.7 million in 2021 compared to negative NOK 80.4
million in 2020. The improvement in cash flow in 2021 relative to 2020 is mainly due to the Group’s reduced operating
losses.
Net cash flow from investing activities was NOK 0.5 million in 2021 compared to NOK 0.0 million in 2020.
Net cash flow from financing activities was positive with NOK 83.3 million in 2020, mainly due to net proceeds from new
share issues of NOK 86.7 million. The cash flow from financing was positive NOK 61.3 million in 2020.
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FINANCIAL SUMMARY – THE PARENT COMPANY
Comprehensive income
Total revenues for the parent company were NOK 8.3 million in 2021, compared to NOK 9.0 million in 2020, and mainly
consisted of management fees and royalties charged to the subsidiary NEXT Biometrics AS.
Payroll expenses for the parent company were NOK 21.7 million in 2021, an increase from NOK 17.0 million in 2020.
There were 4 employees in the parent company at year-end 2021, compared to 3 employees at the end of 2020.
Other operating expenses for the parent company decreased to NOK 6.5 million in 2021 from NOK 7.9 million in 2020.
Depreciation and amortization for the parent company was NOK 1.1 million in 2021 compared to NOK 1.5 million in
2020. Impairment losses were nil in 2021 compared to NOK 0.7 million in 2020.
Net financial income was NOK 1.7 million in 2021 compared to a net financial cost of NOK 2.1 million in 2020.
The parent company had a loss before taxes in 2021 and 2020. Hence, no payable taxes incurred. No deferred tax
assets have been recognized during 2021 and 2020.
Loss after taxes for 2021 was NOK 19.3 million compared to NOK 20.3 million in 2020.
Financial position and cash
Total assets as of 31 December 2021 amounted to NOK 275.0 million, compared to NOK 201.5 million as of 31
December 2020.
The parent company had NOK 9.8 million in current liabilities at the end of 2021, compared to NOK 5.1 million at the end
of 2020.
Cash and cash equivalents amounted to NOK 77.5 million at the end of 2021 compared to NOK 43.3 million at the end
of 2020.
Cash flow
Net cash flow from operating activities was negative NOK 9.0 million in 2021, compared to negative NOK 13.8 million in
2020. Net cash flow from investments was negative NOK 42.4 million compared to negative NOK 44.4 million in 2020.
Net cash flow from financing was NOK 85.6 million in 2020 compared to NOK 54.9 million in 2020.
Equity and allocation of profit (loss) after taxes
Equity for the parent company was NOK 265.3 million at the end of 2021 compared to NOK 195.2 million at the end of
2020. The change was mainly related to net funds raised from share issues of NOK 70.9 million.
The Board of Directors proposes that the loss after taxes of the parent company to be transferred from share premium in
the amount of NOK 19.3 million.
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THE NEXT SHARE AND SHARE CAPITAL
NEXT ASA’s shares are listed at Oslo Stock Exchange’s main list with ticker NEXT. The 2021 year-end closing price was
NOK 7.9, up from NOK 2.6 at the end of 2020. During 2021, the shares traded in the range of NOK 2.7 to NOK 10.0.
The issued share capital of the parent company at the end of 2021 amounted to NOK 91.68 million consisting of
91,680,763 ordinary shares, each share having a par value of NOK 1. At the end of 2021, there were a total of 5,377
registered shareholder accounts, compared to 2,850 at the end of 2020.
In February 2021, NEXT total raised gross proceeds of NOK 88.9 million in a private placement. Moreover, NEXT raised
total gross proceeds of NOK 2.7 million in two equity issues that were performed in May and September 2021 in
relation to exercise of employee share options. Please see note 19 in group consolidated financial statement for further
details.
The Group has entered into, and plan to continue to enter into, stock option agreements to attract talented,
experienced and highly valued employees. As per 31 December 2021, NEXT has 9,828,646 long-term share options
outstanding. Please see note 19 in group consolidated financial statement for further details.
FINANCIAL RISK, CAPITAL MANAGEMENT
NEXT is exposed to certain financial risks related to exchange rates and interest levels. These are, however, insignificant
compared to the business risk. Business risk may be summarized in:
(a) NEXT currently has higher costs than revenues and has negative cash flow from operations.
(b) NEXT’s business plan assumes additional revenue from existing and new products under development.
(c) Revenue from NEXT’s products depends, among other things, on market factors which are not controlled by NEXT.
(d) Competing companies’ products have entered the commercial stage, and the competitive situation for NEXT’s
products is constantly changing.
(e) NEXT’s intended markets are undergoing rapid technological changes.
NEXT manages its liquidity passively, which means that funds are placed in floating-interest bank accounts. The majority
of cash is held in Norwegian kroner at parent company level and is distributed when appropriate to the affiliates. This is
both to have control of the overall liquidity situation and to manage expense levels in the affiliates.
NEXT has financial liabilities related to office leases in multiple locations as per 31 December 2021.
NEXT’s sales and production cost are in US dollars. Other operating expenses are mainly in Norwegian kroner (NOK) and
US dollars (USD), depending on the location. Equity transactions are in NOK. In the parent company, the majority of the
cost and all equity transactions are in NOK. NEXT does not use financial instruments to hedge this risk.
The Group is exposed to credit risk, although this has historically not resulted in significant losses. NEXT sells its
sensors to leading international distributors and original equipment manufacturers of electronic components, primarily
based in Asia, Europe and North America. The Group’s receivables are not credit insured, but credit monitoring routines
are in place for setting up credit lines and demanding advance payments when required.
LIABILITY INSURANCE
The Group has directors and officer’s liability insurance with a NOK 45 million total coverage, and it covers legal costs,
emergency costs and multiple other types of contingency costs.
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EMPLOYEES
At the end of 2021, the Group had 26 employees (2020: 29), of which 4 are women (2019: 4). Additionally, the Group
has individual technical/scientific specialists working at its premises on a contract basis. The female proportion of group
employees was 15% (2020: 14%).
The parent company had 4 employees by the end of 2021. There were 3 male employees and 1 female employee at
year-end. There are currently 4 members of the board, of which 2 are women.
The parent company had no long-term leave of absence due to illness or any work-related incidents or accidents
resulting in material damage or personal injury during 2021.
CORPORATE GOVERNANCE
NEXT’s guidelines for corporate governance are in accordance with the Norwegian Accounting Act §3-3b and seek to
comply with the Norwegian code of Practice for Corporate Governance, dated 14 October 2021. Please see annual
report section “Principles of corporate governance” Annual Report for further details.
SOCIAL RESPONSIBILITY
NEXT’s guidelines for social responsibilities are in accordance with the Norwegian Accounting Act §3-3c. Please see
separate annual report section “Corporate Social Responsibility Report” for more information.
GOING CONCERN
In accordance with § 3-3a of the Norwegian Accounting Act, the Board of Directors confirms that the financial
statements have been prepared under the assumption of going concern.
SUBSEQUENT EVENTS
Between 31 December 2021 and the resolution of these financial statements, there has not been any event which have
had any noticeable impact on the Group’s or the parent company's result for 2021 or the value of the Group or the
parent company’s assets and liabilities as of 31 December 2021, except events mentioned below.
The COVID-19 pandemic continues to affect the operation of the Group in 2022. Please see note 22 for further details.
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OUTLOOK
The announcement of the initial FAP20 order from our Tech Giant partner during the second half of 2021, and the
recent purchase order and partner agreement with an India based OEM announced in February 2022, are both
important milestones for NEXT.
In addition to this we have identified NGRAVEs Crypto Wallet as a company with volume potential. We anticipate more
orders relating to these specific customers, but also from others that already identified the benefits of NEXT Active
Thermal technology. The Group’s principal focus is to increase the number of customers choosing to design-in NEXT
FAP20 sensors in all of our main market segments.
The market for NEXT’s fingerprint sensor technology is expected to grow in 2022 and beyond. The Board’s view is that
NEXT’s unique products and patented technology has long-term revenue potential. Sales of the NEXT FAP20 sensor has
the highest priority, due to its many competitive advantages.
NEXT Notebook sensor orders were at an all-time high in 2021, and the orders for 2022 are expected to surpass the
2021 level. The limiting factor for our shipments to PC customers continues to be inadequate production capacity
among the world’s semiconductor manufacturers. We are continuously working with our suppliers to secure additional
components. However, we see challenges related to component shortages that are likely to impact NEXT’s ability to
meet this increased PC-segment demand in the short term. Longer term, we expect to solve the supply chain challenges
and catch up with increased customer demand.
The Group’s accumulated 24 design-wins from Q4 2019 up to December 2021 will contribute to future revenue growth.
We believe some design-wins will develop into successes in their respective market segments. The India based OEM
FAP20 purchase order announced in February 2022 that amounts to USD 2.2 m is an example of a likely high-growth
design-win. Existing portfolio of design-wins alone, have the potential to make NEXT profitable. Additional design wins
and purchase orders from both existing and new customers are expected to be announced during 2022.
Petter Fjellstad
Chairman
Odd Harald Hauge
Board member
Peter Heuman
CEO
Emine Lundkvist
Board member
Live Haukvik
Board member
/sign/ /sign/ /sign/
/sign/ /sign/
Oslo, 26 April 2022
The Board of directors of NEXT Biometrics Group ASA
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CORPORATE GOVERNANCE REPORT
0. INTRODUCTION
For NEXT Biometrics Group ASA ("NEXT" or the "Company"), good corporate governance is about doing the right things, and
doing the things right. The manner in which the Company is managed is vital to the development of the Company’s value
over time. The Company's corporate governance framework has been designed to provide foundation for value creation,
business risk reduction, and to ensure good control mechanisms.
NEXT believes in open and honest communication with the shareholders, and interaction between shareholders, the
board of directors and the Company’s management. NEXT aims to show respect and responsibility for shareholders as
well as with all stakeholder groups, such as co-operating partners, customers, suppliers, employees and authorities.
NEXT is subject to corporate governance reporting requirements according to section 3-3b of the Norwegian Accounting
Act and the Continuing obligations of stock exchange listed companies at Oslo Stock Exchange. Further, NEXT’s board of
directors endorses "The Norwegian Code of Practice for Corporate Governance" (the "Code"), most recently revised in
October 2021 and issued by the Norwegian Corporate Governance Policy Board. The Code is available at http://
www.nues.no/.
1. NEXT'S IMPLEMENTATION AND REPORTING ON CORPORATE GOVERNANCE
NEXT aspires to comply with the recommendations of the Code. Taking into account the size and maturity of the Company,
there may be deviations from the Code. If the Code is deviated from, the deviation is described and explained in the
relevant section of this report.
The Company’s policies, instructions and internal processes are continuously developed. A review of the Company’s
corporate governance policy is performed annually to ensure continued compliance with the Code.
2. BUSINESS
NEXT’s business is clearly described in the Company's articles of association:
“The objective of the company is to conduct research, development and commercialization of security products,
participation and investment in companies conducting similar activities as well as other activities that will naturally fall
under this”.
The Company’s articles of association are available at the Company’s homepage, www.nextbiometrics.com.
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Basic corporate values
The Company has formulated three basic corporate values to form a guideline for the Company’s business operations: (i)
innovative business models, (ii) close client relationship and (iii) global reach. ”The ethical and corporate social
responsibility guideline” has been set out in accordance with these values.
Ethics and corporate social responsibility
The Company has implemented ethical and corporate social responsibility guidelines, in accordance with its basic
corporate values. Moreover, the company promotes and ensures sustainable business operations and supply chain.
Additional information is included in the sections related to specific Environmental, Social, and Governance matters in this
report.
3. EQUITY AND DIVIDENDS
Capital structure
The board of directors and the management of the Company seek, at all times, to have a sound relation between the
Company’s capital structure and the Company’s objectives, strategies and risk profile. The board shall immediately take
adequate steps should it be apparent at any time that the Company’s equity or liquidity is less than adequate.
Dividend policy
It is a long-term objective of the Company to generate returns to shareholders in the form of dividends and capital
appreciation, at a level which is at least equal to other investment possibilities with comparable risk.
Since NEXT is in a growth-phase, no dividend has been paid so far. Further, no dividend has been proposed for the coming
year. When the Company reaches a steady state position, NEXT intends to establish a clear and predictable dividend
policy which will form the basis for any proposals on dividend payments to be resolved by the general meeting.
Authorisations to the board of directors
The annual general meeting, held on 12 May 2021, gave the board authorization to increase the Company’s share capital
by up to NOK 18,150,000 to enable the Company to conduct share issues in an effective manner. The board of directors
was also granted authorization to deviate from the shareholder’s preferential rights when using the authorization.
Moreover, the board of directors was given an authorization to increase the Company’s share capital for the option
program by up to NOK 7,930,000, out of which NOK 1,660,000 can be used to issue shares to board members under
options granted to board members in 2019 and 2020. The authorization covers capital increases by way of contributions
in kind, but does not cover capital increases in connection with mergers, and the board may decide that the shareholders’
pre-emption right to the new shares can be deviated from. The authorization is limited in time until the 2022 general
meeting or 30 June 2022, whichever comes first.
As of 31 December 2021, there are no further authorizations granted to the board of directors, neither to increase the
share capital by issuing new shares, nor to the Company to purchase own shares. Any future authorizations given will be
limited in time until the next general meeting, in accordance with the Code.
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4. EQUAL TREATMENT OF SHAREHOLDERS AND TRANSACTIONS WITH CLOSE ASSOCIATES
Class of shares
The Company has one class of shares and there are no voting restrictions. Each share represents one vote and equal
rights at the Company’s general meeting. The par value per share is NOK 1,00.
Pre-emption rights of existing shareholders
NEXT’s existing shareholders have pre-emption rights to subscribe for shares in the event of a share capital increase,
unless otherwise indicated by special circumstances. Any decision to deviate from the pre-emption rights of existing
shareholders shall be justified. The justification shall be publicly disclosed in a stock exchange announcement issued in
connection with the increase in share capital.
In February 2021, NEXT completed a private placement issuing 14,819,897 new shares at a subscription price of NOK
6.0 per share, corresponding to gross proceeds of NOK 88.9 million. Completion of the private placement implied a
deviation from the existing shareholders pre-emptive rights to subscribe for and be allocated new shares. The board of
directors carefully considered such deviation and resolved that the private Placement was in the best interests of the
Company and its shareholders. In reaching this conclusion the board took into consideration the Company's share price,
alternative financing sources, the dilutive effect of the share issue, the low subscription price discount to current market
price, the investor interest in the transaction and the strengthening of the shareholder base that will be achieved by the
private placement. The board concluded not to complete a subsequent offering. The issuance of the new shares was
approved by the board of directors under the general authorization to issue new shares approved by the general meeting
on 12 May 2020.
Direct expenses and underwriting commission in relation to the private placement was NOK 4.8 million.
Transactions with close associates
The Company’s significant shareholders, a shareholder’s parent company, board members, executive personnel and close
associates of any such parties are considered related parties. All transactions with related parties will be carried out in
accordance with the arm’s length principle.
All transactions with related parties which are not immaterial will be publicly disclosed by NEXT. In the event of such
transactions, the board will arrange for a valuation to be obtained from an independent third party. This will not apply if
the transaction requires the approval of the general meeting pursuant to the requirements of the Public Companies Act.
If NEXT should carry out any transaction in its own shares, this will be carried out either through the stock exchange or at
prevailing stock exchange prices to ensure equal treatment of all shareholders.
Other than this, the board is not aware of any transactions in 2021 between the Company and the shareholders, a
shareholder’s parent company, directors, executive personnel or parties closely related to such individuals that qualify as
material transactions.
5. SHARES AND NEGOTIABILITY
The shares in the Company are freely transferable, and the Company’s articles of association contain no restrictions on
transferability, ownership, trading or voting.
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6. GENERAL MEETINGS
The general meeting is the Company’s supreme governing body, and all shareholders are guaranteed participation and
the opportunity to exercise their rights.
The Company’s board takes steps to ensure that the shareholders can participate at the general meetings of the
Company. The board of directors will ensure that:
• the resolutions and any supporting information distributed are sufficiently detailed, comprehensive and specific to allow
shareholders to form a view on all matters to be considered at the general meeting;
• members of the board of directors, the chairman of the nomination committee and the auditor (if the items to be
considered are of such a nature that the auditor's attendance must be regarded as essential) are present at the general
meeting;
• the general meeting is able to elect an independent chairperson for the general meeting; and
• that shareholders are able to vote on each independent matter, including on each individual candidate nominated for
election.
Shareholders are encouraged to give notice of their intention to attend the AGM, with a deadline as close to the date of
the General Meeting as possible, typically one day in advance.
Shareholders that are unable to attend in person are given the opportunity to, and encouraged to, vote by proxy. The
Company will provide information on the procedure for representation at the general meeting and prepare a proxy form
including nominating a person to act as proxy for the shareholders.
Agenda and execution
In accordance with the code, the Company will make arrangements to ensure an independent chairman for the
general meeting is elected.
The Company will facilitate the use of prepare a proxy form which allow separate voting instructions to be given for
each item on the agenda.
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7. NOMINATION COMMITTEE
Article 6 of the Company’s articles of association sets out the requirements for the nomination committee.
Composition
The nomination committee shall consist of two to three members, where all members, including the chairman, are elected
by the general meeting, which also have approved guidelines for the duties and remuneration of the nomination
committee. The nomination committee members shall be independent of the board and management. The members are
elected for a period of up to two years.
The current nomination committee was elected at the annual general meeting on 12 May 2021 for the period until the
annual general meeting in 2022. All of the members of the nomination committee have been selected to take into
account the interests of shareholders in general and are independent from both the Company's management and the
Company's board. As of 31 December 2021, the nomination committee consisted of Jon Frode Vaksvik (chairman),
Haakon M. Sæter and Hans Herman Horn.
NEXT is not aware of the existence of any agreements or business partnerships between the Company and any third
parties in which members of the nomination committee have direct or indirect interests.
Instructions and work
Instructions to the nomination committee were last revised by the general meeting held on 16 May 2014. The nomination
committee is responsible for seeking out and nominating qualified candidates for the board of directors and the
nomination committee, and for proposing the remuneration to be paid to the board of directors and the nomination
committee, including an explanation of how it came to its recommendations. The nomination committee has contact with
shareholders, the board of directors and the Company’s executive personnel as part of its work on proposing candidates
for election to the board.
The Company provides information on the membership of the committee.
8. THE BOARD OF DIRECTORS: COMPOSITION AND INDEPENDENCE
Composition of the board of directors
The articles of association state that the Company's board of directors should comprise 3-9 board members elected by the
general meeting. The chairman of the board is elected by the general meeting and among the Company’s board.
NEXT emphasises that the board shall have requisite competency to independently evaluate the cases presented by the
executive management team as well as the Company's operation. It is also considered important that the board can
function well as a body of colleagues.
As of 31 December 2021, the board of directors comprises the following four members:
• Petter Fjellstad
• Odd Harald Hauge
• Emine Lundkvist
• Live Haukvik
All of the abovementioned board members are elected for the period until the annual general meeting in 2022.
A presentation of the board can be found at the Company’s website.
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The board’s independence
NEXT believes that it is in the best interest of the Company and its shareholders to have independent directors and
applies the Code's list of criteria for evaluating whether a director is considered independent.
Two out of the four board members are women, and none of the members of the Company's executive management or
main business connections are members of the board of directors. The members of the board of directors are
independent of the Company's main shareholders. The composition of the board ensures that it can attend to the
common interests of all shareholders and meet the Company's need for expertise, capacity and diversity, and that it can
operate independently of any special interests.
Each independent director who experiences a change in circumstances that could affect such director’s independence is
obligated to deliver a notice of such change to the chairman of the board.
Members of the board are encouraged to own shares in the Company.
Election of the board of directors
The general meeting appoints the members of the board of directors based on the proposal from the Company’s
nomination committee. The chairman of the board is elected by the General Meeting.
Directors are elected each year. It is the Company's view that directors who have developed a valuable insight into the
Company and its operations over time provide an important contribution to the board as a whole. On this background, the
Company does not wish to establish time limits in relation to the term of office for board members.
To ensure that the board continues to generate new ideas and operate effectively, the board evaluates and assesses their
performance annually, and takes necessary steps in order to continue their service as directors.
A member of the board is entitled to retire prior to the end of his or her term of appointment if special circumstances
arise. If possible, the board and the nomination committee shall be given reasonable prior notice thereof.
9. THE WORK OF THE BOARD OF DIRECTORS
The board’s responsibilities
Norwegian law lays down the tasks and responsibilities of the board of directors. These include the overall management
and supervision of the Company. This means that the board bears the ultimate responsibility for managing the Company
and for monitoring administration and the business activities. The board is responsible for establishing internal control
systems and for ensuring that the Company operates in compliance with the adopted value platform and Code of Ethics.
The directors of the board shall discharge their duties in a loyal manner.
The fundamental responsibility of the directors is to oversee day-to-day management and evaluate strategy, to exercise
their business judgment to act in what they reasonably believe to be the best interests of the Company and its
shareholders. The board is also to oversee such matters as are required by statutory law, the Company’s articles of
association, policies, instructions and procedures as well as resolutions of the general meeting. It is the duty of the board
to oversee the management’s performance to ensure that the Company operates in an effective, efficient and ethical
manner in order to produce value for the Company’s shareholders. The board also evaluates the Company’s overall
strategy and monitors the Company’s performance against its operating plan.
The board is responsible for supervising strategic, financial and execution risks and exposures associated with the
Company’s business strategy, product innovation and sales road map, policy matters, significant litigation and regulatory
exposures, and other current matters that may present material risk to the Company’s financial performance, operations,
infrastructure, plans, prospects or reputation, acquisitions and divestitures. Further, the board shall ensure that the
ongoing activities of the Company are subject to adequate control.
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Annual plan
The board of directors sets an annual plan for its work, with particular emphasis on financial objectives, strategy and
implementation. This plan covers the follow-up of the Company’s operations, internal control, strategy development and
other issues.
Instructions for the board of directors
The board of directors has implemented instructions for its own work. The board’s instructions are subject to review
every second year and are revised as needed. The current instruction was revised 2 November 2021.
The instructions cover the following items: appointment of the board of directors; board member independence; tenure
and retirement; by-election; the duties of the board; committees; takeovers; allocation of the work within the board; the
working procedures of the board; meeting – including meeting plan; quorum; disqualification; majority requirements;
categories of decision; minutes; safety procedures and duty of confidentiality; information concerning the work of the
board; evaluation of the work of the board and board committees; directors' liability insurance; liability for damages; new
board members or CEO awareness of instructions; waiver and amendment; approval of transactions with related parties
and communications with shareholders.
Instruction for the CEO
There is a clear segregation of duties between the board of directors and the executive management. The board has
prepared a set of instructions for the CEO. The current instruction was revised 2 November 2021.
The CEO shall follow the guidelines and instructions issued by the board of directors. The CEO is responsible for the day-
to-day management of the Company, pursuant to § 6-14 in the Norwegian Public Limited Companies Act. The CEO
ensures that the board receives relevant information in an accurate, sufficient and timely manner in order to allow the
board to carry out its duties. The CEO represents the Company externally in matters which form part of the day-to-day
management. The day-to-day management does not cover matters of extraordinary nature or of major importance.
However, the CEO is authorized to decide on matters of extraordinary nature or of major importance in cases, where the
decisions of the board of directors cannot be awaited without serious detriment for the Company. The board of directors
must be notified of the decision as soon as possible.
Financial reporting
The board is responsible for ensuring the integrity of financial information. The board evaluates the integrity of the
Company’s accounting and financial reporting systems, including the audit of the Company’s annual financial statements
by the independent auditors, and that appropriate disclosure controls and procedures and systems of internal control are
in place.
Quarterly and annually financial reports are reviewed and approved at board meetings and form the basis for external
financial reporting.
In connection with the presentation of the year-end financial statements, the CEO and the CFO declare that the accounts
have been prepared in accordance with generally accepted accounting principles, and that to the best of their knowledge
all information is accurate and no material information has been omitted.
Board meetings
The board shall deliberate matters and make decisions in meetings, unless the chairman of the board finds that the
matter may be presented in writing or be dealt with in another satisfactory manner.
The directors are free to consult the Company’s executives as needed. Any board member or the CEO can require specific
matters to be deliberated by the board. The CEO shall, in consultation with the chairman of the board, prepare matters to
be deliberated by the board. Any matter shall always be prepared and presented in such a manner as to provide the
board with a satisfactory basis for making a decision.
The CEO has a right and a duty to attend the board’s deliberation of matters, unless otherwise determined by the board
in respect of each individual matter. The CEO is not entitled to cast votes. Other participants are called in as needed.
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Conflicts of interest and disqualification
The board of directors ensures that members of the board of directors and executive personnel make the Company aware
of any material interest that they may have in items to be considered by the board of directors.
A member of the board or the executive management may not participate in the discussion or decision of issues of such
special and prominent interest to the person in question, or to any closely related party of said person, that the board
member or member of the executive management must be regarded as having a distinct personal or financial interest in
the matter. This is in compliance with §6-27 of the Norwegian Public Limited Companies Act.
Chairman of the board of directors
The chairman of the board of directors ensures that the board of directors operates well and carries out its duties. In
addition, the chairman of the board of directors also has certain specific duties in respect of the general meeting. Matters
to be considered by the board are prepared by the chief executive in collaboration with the chairman, who chairs the
meetings of the board.
Board Committees
The board has appointed a separate audit committee. The committee shall prepare, draw up and present items for
consideration by the board as a whole.
Audit Committee
The Company's audit committee is governed by the Norwegian Public Limited Companies Act and a separate instruction
adopted by the board. A majority of the members shall have qualifications within accounting or auditing. The principal
tasks of the audit committee are:
• prepare the board of directors' supervision of the Company’s financial reporting process;
• monitor the systems for internal control and risk management;
• have continuous contact with the Company's auditor regarding the audit of the annual accounts;
• review and monitor the independence of the Company's auditor, including in particular the extent to which services
other than auditing provided by the auditor or the audit firm represent a threat to the independence of the auditor;
• monitor the Company's compliance with applicable legal and regulatory requirements;
• handle and investigate concerns raised by the Company`s employees related to the internal revision or audit; and
• evaluate the audit committee`s activities.
The audit committee consist of Emine Lundkvist (Chair) and Live Haukvik.
Remuneration Committee
The remuneration committee draw up guidelines and proposals for remuneration to senior executives. The Company’s
remuneration policy, including remuneration for the CEO and the senior executives, are dealt with at one of the board
meetings and accounted for in the Board’s annual report.
The committee consist of Petter Fjeldstad (Chair) and Odd Harald Hauge.
The board of director’s evaluation of its own work
The board shall annually evaluate its activities, performance and competence, and has adopted a self-assessment
questionnaire for the purpose thereof. The assessment results shall be submitted to the nomination committee.
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10. RISK MANAGEMENT AND INTERNAL CONTROL
It is ultimately the responsibility of the board of directors to ensure that NEXT has sound internal controls and risk
management systems appropriate to the Company’s size and business. The board, and the management, have increased
focus on risk management and internal controls. The board of directors forms its opinion on the Company's internal
controls and risk management systems based on the information presented to it by the management.
The executive management closely monitors the main risk factors, to ensure the Company has proper guidelines,
processes and internal controls in place. The board of directors conducts annual reviews of the Company’s most
important areas of exposure to risk and such areas’ internal control arrangements.
NEXT has experienced finance and accounting personnel, which continuously strives for improving routines and internal
control systems. Initiatives are ongoing to ensure risks are efficiently managed, and that key controls are in place to
achieve financial goals, operational goals, and compliance with regulations. The Company's internal controls and systems
also cover the Company’s corporate values, ethical guidelines and principles of corporate social responsibility.
The size of the Group’s operations and limited staff size necessarily leads to dependence on key individuals and a
limitation on the possible implementation of internal control risk reduction measures. The Norwegian entities of NEXT
have an internal risk management, finance and accounting function.
The board presents an in-depth review of NEXT’s financial status in the “Report from the board of directors” as part of this
annual report.
11. REMUNERATION OF THE BOARD OF DIRECTORS
The remuneration of the board reflects the board’s responsibility, expertise, time commitment and the complexity of the
Company’s activities.
The general meeting approves the remuneration paid to the board of directors each year. The nomination committee
makes the proposal for remuneration.
The remuneration of the board of directors is not linked to the Company’s performance. The current board members were
granted share options in 2020, which were approved at the Annual General Meeting held in 2020.
For more details on the remuneration to the board, please refer to note 20 to the annual financial statements.
Except for the one deviation above, the Company does not deviate from the Code.
12. REMUNERATION OF EXECUTIVE MANAGEMENT
The board establishes guidelines for the remuneration of the executive management team setting out the main principles
applied in determining the salary and other remuneration of the executive management team. Following amendments to
the Public Limited Liability Companies Act, there are new and more detailed requirements for determining salaries and
other remuneration of the executive management. In accordance with this, the Board of Directors proposed new
guidelines for remuneration to executive management with effect for 2021 that was approved by the General Meeting in
May 2021. The company updated the guidelines in 2022 and the revised guidelines will be made available on the
company's website.
The main principle in the Company’s policy for remuneration is that the leading employees shall be offered competitive
terms to attract and retain the competence which the Company needs.
The general meeting has approved the Company’s share option arrangement.
For details regarding remuneration to the executive management, see note 20 in the annual financial statements, and for
details regarding share option arrangements, see note 19 in the annual financial statements.
The Company deviates from the Code by not having a cap on the performance-related remuneration.
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13. INFORMATION AND COMMUNICATIONS
NEXT believes in open and honest communication with the shareholders, and interaction between shareholders, the
board of directors and the Company’s management. The board of directors and the executive management team assign
considerable importance to giving the shareholders and other stakeholders, relevant and current information about the
Company and its activity areas.
Regular information is published through annual reports, quarterly reports, press releases, notices to the stock exchange
and investor presentations in accordance with what is deemed appropriate from time to time. Information on value
drivers and risk factors is provided through the interim reporting, which will enable investors to evaluate NEXT’s
performance and risk.
The CEO is responsible for the investor relations and is the main contact person of the Company for the capital marked.
All communication is done solely in the English language.
All reports and notices are issued and distributed according to the rules and regulations of the Oslo Stock Exchange.
Information relevant to investors is published at Oslo Stock Exchange and made available on the Company’s website.
Shareholder information, including a financial calendar and information about web casts, is available on
www.nextbiometrics.com/investors.
14. TAKE-OVERS
The Company has established guidelines for the board on how it will act in the event of a take-over bid. The board will
handle take-over bids in accordance with Norwegian law, including the Norwegian Securities Trading Act and the Code.
The Company has not been subject to any take-over bids in 2021.
There are no defence mechanisms against take-over bids in the Company's articles of association nor any underlying
steering document. In corporate take-over or restructuring situations, the board shall exercise due and proper care so
that all shareholder values and interests are preserved. During the course of a take-over process, the board and
management shall ensure that the shareholders are treated equally, and that the Company’s business activities are not
disrupted unnecessarily. The board has a particular responsibility to ensure that shareholders are given sufficient
information and time to form a view on the offer. The board of directors otherwise concurs with what is stated in the Code
regarding this issue.
15. AUDITOR
The Company's auditor is elected by the general meeting and is fully independent from the Company.
PricewaterhouseCoopers AS is the company’s auditor. NEXT represents a small share of the auditor’s business. NEXT
does not obtain significant business or tax planning advice from its auditor. For further information, see note 20 to the
group financial statements.
The board of directors is responsible for ensuring that the board and the audit committee are provided with sufficient
insight into the work of the auditor. In this regard, the board of directors ensures that the auditor submits the main
features of the plan for the audit of the Company to the audit committee annually. The board of directors invites the
auditor to participate in board meeting(s) that deal with the annual accounts. At these meetings, the auditor (i) reports on
any material changes in the Company's accounting principles and key aspects of the audit, (ii) comments on any material
estimated accounting figures, and (iii) reports all material matters on which there has been disagreement between the
auditor and the executive management of the Company.
The audit committee shall at least once a year perform a review of the Company’s internal control procedures with the
auditor, including weaknesses identified and proposals for improvement. The board and the audit committee shall review
periodically the use of the auditor for services other than the audit. At least once a year, the audit committee and the
board will meet the auditor without the presence of the CEO or other members of executive management.
At the annual general meeting, the board shall present a review of the auditor’s compensation as paid for audit work
required by law and remuneration associated with other assignments.
In connection with the auditor's presentation to the board of the annual work plan, the board considers if the auditor to a
satisfactory degree also carries out a control function.
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ARTICLES OF ASSOCIATION FOR NEXT BIOMETRICS GROUP ASA (As of 31 December 2021)
§ 1 – The Company name
The name of the company is NEXT Biometrics Group ASA. The company is organised as a public limited liability company.
§ 2 – Business office
The company's registered office is in Oslo municipality.
§ 3 – Business Activities
The objective of the company is research and development, and commercialisation of safety products, trade and
investment in such companies and what is connected with such business.
§ 4 – Share capital
The company's share capital is NOK 91,680,763, divided into 91,680,763, each with a nominal value of NOK 1. The
company's shares shall be registered in the Norwegian Central Securities Depository.
§ 5 – Board of Directors
The Company's board of directors shall consists of 3 – 9 members as appointed by the general meeting.
§ 6 – Nomination Committee
The company shall have a nomination committee. The nomination committee shall consist of two or three members
appointed by the general meeting. The members of the nomination committee, including the director, shall be elected by
the general meeting. The nomination committee shall be elected for a period of two years, if not other period is decided
upon by the general meeting.
The nomination committee makes recommendations to the general meeting regarding election of board members and
members to the nomination committee, and regarding remuneration to the board members and members of the
nomination committee. The general meeting shall resolve the remuneration to the members of the nomination
committee. The general meeting may lay down guidelines for the nomination committee.
§ 7 – Signatory Rights
Two board members jointly have the right to sign on behalf of the company. The board of directors may give power of
procuration.
§ 8 – General Meeting
Documents regarding matters to be discussed at the general meeting of the company, also applying documents that,
pursuant to law, shall be included in, or attached to the notice of the general meeting of shareholders, can be made
available at the company's website. The requirement regarding physical distribution shall then not apply. A shareholder
may in any case request to be sent documents that shall be discussed at the general meeting.
The shareholder may vote in writing, including by way of electronic communication in advance in a period prior to the
general meeting. The board of directors may establish guidelines for such advanced voting. It shall be stated in the
notice for the general meeting the guidelines laid down.
At the ordinary general meeting the following matters shall be addressed and decided upon:
1. Approval of the annual accounts and annual report, including the distribution of dividends.
2. Other matters that pursuant to law or the articles of association must be dealt with at the general meeting.
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CORPORATE SOCIAL RESPONSIBILITY REPORT
This review of the Group’s Corporate Social Responsibility principles and practice is prepared in compliance with Section
3-3c of the Norwegian Accounting Act.
NEXT’s business consists of research & development, commercialization and manufacturing of fingerprint technology and
products for a variety of uses. NEXT works closely with world class manufacturing subcontractors and distribution
partners. NEXT is committed to be a good corporate citizen and demonstrate integrity and high ethical standards in all its
business dealings.
NEXT’s board and management are committed to maintaining high ethical standards and have implemented guidelines
with regards to values and ethics. The purpose of these standards and guidelines is to create a sound corporate culture
and to preserve the integrity of NEXT by helping employees to promote standards of good business practice. NEXT’s
Ethical and Social Responsibility Guidelines was last approved by the Board on 2 November 2021 and applies to all
employees of the Group. They also apply to anyone who holds a position of trust in the Group (including membership of
boards) and hired consultants acting on behalf of the Group. They aim to provide guidance to our people for a common
platform.
The Group strives for a business culture characterized by openness. Openness is a prerequisite for motivation, trust,
confidence and safety at work. Everyone shall feel confident to raise any concern, small or large, with their manager or
another colleague.
The ethical and corporate social responsibility rules support NEXT’s vision, core values and principles. The guidelines are
instrumental for NEXT’s approach to human rights, fair working environment and equal rights, health and safety,
environment, business ethics and anti-corruption. The Group regularly reviews the guidelines and take steps to update
and educate the organization.
HUMAN RIGHTS
In addition to following national rules and regulations, NEXT conducts its business in line with fundamental international
rules. Including those described in international human rights conventions such as the UN Convention on Human Rights
and the labour rights conventions of the International Labour Organization (ILO).
The Group respects the right to freedom of association and opposes any form of child labour, forced labour or
discrimination. NEXT practices equal opportunities and rights and encourage all business relations to follow the same
principles. Any violations of basic human rights are unacceptable to the Group.
It is our goal to have no form of human rights abuse or labor issue at any stage related to production of our products.
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FAIR WORKING ENVIRONMENT
NEXT has a personnel policy designed to prevent discrimination on the grounds of race, color, gender, sexual orientation,
age, disability, language, religion, legitimate political or other opinions, national or social origin, property, birth or other
status.
The Group employs many different nationalities from a diversity of cultures and has built an international mindset for
years. Employees are encouraged to treat each other and business contacts with respect and act according to local laws
and regulations, as well as to pay attention to local values and norms for social conduct.
The Group does not tolerate degrading treatments towards any employee. The Groups employees are encouraged to
report any incident of discrimination to their nearest leader or through the applicable whistle-blow channels through our
HR department.
The NEXT board and management seek to create a working environment that is pleasant, stimulating, safe and beneficial
to all employees. The working environment complies with the existing rules and regulations. The board has not found
reason to implement special measures. No employee has suffered work-related injury resulting in sick leave. No accidents
nor incidents involving the assets of the Group have occurred.
EQUAL RIGHTS
All facilities are equally well equipped for females and males. Traditionally, fewer women than men have graduated in
NEXT’s fields of work, and the candidates available for recruiting have often predominantly been males. The management
structure reflects the composition of the technical staff. Of the 26 employees at the end of 2021, 4 are women. At year-
end 2021, the parent company has 4 board members, of which 2 are women. The parent company complies with
Norwegian legal requirement with respect to gender representation in the board of directors.
Raising awareness of employees on Human rights and Labor principles and relevant issues are regularly done by internal
training and as part of the introduction program for new employees.
HEALTH AND SAFETY
Health and safety are an indispensable component in all the Group’s activities. All hazards and risks to health and safety
must be avoided. Generally, NEXT’s business involves low safety risk in the day-to-day activities, without use of heavy
machinery or equipment that can cause damage or injuries. As a fabless biometrics company, production has been
outsourced to specialized manufacturers. NEXT is concerned for safety of employees in third party factories and it is an
integral part of the evaluation criteria which the Group applies ahead of being classified as a “NEXT certified vendor/
partner”.
None of the processes in use by the suppliers are known to be of particular hazard to the staff.
ENVIRONMENT AND CLIMATE IMPACT
NEXT does not own or operate manufacturing facilities. Manufacturing is done through third parties that comply with the
ISO 14001 environmental standard, among others. Consequently, there is little pollution associated with the Group’s
operations. NEXT seeks to limit resource consumption, prevent unnecessary environmental pollution including optimizing
transportation of goods, and manage waste in an environment friendly and resource efficient manner.
NEXT climate impact and potential risk is low in the short to medium term. The Group is not impacted by physical climate
risk such as potential flooding or general increase in the sea level. Moreover, NEXT does not face any potential liabilities
due to damages caused by climate change. Still, NEXT is likely be impacted by the regulatory and technological changes
that are to be implemented (in the future) to reach a carbon neutral society, which may lead to long term increased
electronic component purchase and manufacturing costs.
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BUSINESS ETHICS & ANTI-CORRUPTION
The Group’s operations depend on the trust of contractual parties, the authorities, shareholders, employees and society in
general. In order to gain trust, the Group is dependent upon professionalism, expertise and high ethical standards in all
aspects of the Group’s work. This applies to the way the Group operates and to the conduct of each individual. All
employees are therefore expected to behave with care, integrity and professionalism and abstain from actions that may
weaken trust in the Group.
The NEXT Biometrics’ Ethical and Corporate Social Responsibility Guidelines contain guidelines for ethical behaviour in
business relations. These clearly states that NEXT strongly oppose all forms of corruption or bribery. NEXT encourages
reporting of suspected misconduct; a «whistle-blower» communication channel. NEXT adheres to national and foreign
antitrust laws.
No one may receive benefits for themselves or for others from the Group’s business contacts if such benefits are based
on the employment relationship. Correspondingly, no one shall give such benefits to the Group’s business contacts. The
guidelines explicitly govern conflict of interests, gifts and money laundering. Business courtesies of modest value,
conforming to normal social customs and not intended for influence, are not considered bribes. All gifts with an estimated
value of more than NOK 1,000 must be reported to the Group’s CFO, who will keep a log over such gifts and assess
whether the relevant gift can be retained or provided, based on a case-by-case evaluation.
NEXT has to date not been accused of, or involved in, any cases pertaining to any form of corruption or bribery. NEXT
encourages each employee to report on possible censurable incidents. NEXT’s employees have an obligation to report on
criminal activity and on incidents which could endanger life or health. The board of directors and management are not
aware of any breach of our code of conduct.
Raising awareness of the guideline has been the Group’s main action with regard to this area. The Group is not aware of
any breach of the implemented guideline. The Group does not have any other guidelines or actions regarding Corporate
Social Responsibility due to the limited size and resources of the parent company. The Group will continue to have high
focus on these guidelines and incorporate them into our company culture. The Group will do this by updating and
educating the organization.
NEXT’s Ethical and Corporate Social Responsibility Guideline is publicly available on NEXT’ website.
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> Financial Statements
GROUP - CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - 1 JANUARY - 31 DECEMBER
(amounts in NOK 1,000) Notes 2021 2020
Operating revenues 3 49,788 57,770
Other revenues 3 967 363
Cost of goods sold 12 -35,531 -48,037
Inventory write-downs 12 -6,251 -1,350
Gross margin 8,973 8,746
Payroll expenses 4 -45,983 -63,228
Other operating expenses 5,6,18 -14,172 -28,857
Depreciation and amortization 10,11 -7,069 -15,279
Impairment losses 10,11 - -6,577
Total operating expenses -67,224 -113,941
Operating prot (loss) -58,250 -105,195
Financial income 7 1,048 2,248
Financial expenses 7 -1,299 -811
Net currency gains (losses) 7 108 -1,026
Net nancial items -143 411
Prot (loss) before taxes -58,394 -104,784
Income tax expenses 8 -1,621 2,990
Prot (loss) after taxes -60,014 -101,794
Other comprehensive income (loss) that may be reclassied subsequently to prot and loss:
Translation differences on net investments in foreign operations 1,593 3,129
Other comprehensive income (loss) 1,593 3,129
Total comprehensive income (loss) -58,422 -98,665
Prot (loss) after taxes attributable to:
Owners of the parent company -60,014 -101,794
Total comprehensive income (loss) attributable to:
Owners of the parent company -58,422 -98,665
Earnings per share (in NOK)
Basic and diluted 9 -0.67 -1.14
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ANNUAL REPORT 2021
GRO
UP - CONSOLIDATED STATEMENT OF FINANCIAL POSITION - AS OF 31 DECEMBER
(amounts in NOK 1,000) Notes 2021 2020
ASSETS
Deferred tax assets 8 32 58
Intangible assets 10 3,983 5,446
Property, plant and equipment 11 16,447 17,197
Other non-current assets 14 - 704
Total non-current assets 20,462 23,404
Inventories 12 18,987 21,725
Accounts receivables 13 11,801 4,056
Other current assets 14 7,699 14,342
Cash and cash equivalents 15 102,706 67,950
Total current assets 141,193 108,072
Total assets 161,655 131,477
EQUITY AND LIABILITIES
Share capital 19 91,681 75,944
Share premium 19 47,335 56,633
Other reserves 19 71,442 62,637
Accumulated losses -76,205 -98,027
Total equity 134,253 97,188
Deferred tax liabilities 8 - 135
Non-current interest-bearing loans 16 - 5,609
Other non-current liabilities 17,18 2,027 1,164
Total non-current liabilities 2,027 6,908
Current interest-bearing loans 16 - 2,346
Accounts payables 6,786 11,047
Income tax payables 8 317 60
Other current liabilities 17,18 18,273 13,928
Total current liabilities 25,376 27,381
Total equity and liabilities 161,655 131,477
Oslo, 26 April 2022
The board of directors of NEXT Biometrics Group ASA
Petter Fjellstad
Chairman
/Sign/ /Sign/
/Sign/
/Sign/
/Sign/
Odd-Harald Hauge
Board member
Peter Heuman
CEO
Emine Lundkvist
Board member
Live Haukvik
Board member
28
ANNUAL REPORT 2021
GROUP - CONSOLIDATED STATEMENT OF CASH FLOW - 1 JANUARY - 31 DECEMBER
(amounts in NOK 1,000) Notes 2021 2020
Prot (loss) before taxes -58,394 -104,784
Share based remuneration 19 8,805 4,376
Accrued share option social security cost 19 4,207 69
Income taxes paid 8 2,386 -408
Depreciation and amortization 10,11 7,069 15,279
Impairment losses 10,11 - 6,577
Inventory write-downs 12 6,251 1,350
Change in inventories 2,738 4,236
Change in accounts receivables -7,745 -575
Change in accounts payables -4,261 -740
Change in other working capital items and other -8,738 -5,748
Net cash ow from operating activities -47,681 -80,369
Proceeds from disposal of property, plant and equipment and intangible assets 10,11 2 11
Purchase of property, plant and equipment and intangible assets 10,11 -204 -88
Proceeds from lease receivables 18 691 117
Net cash ow from investing activities 489 40
Net proceeds from issue of shares 19 86,681 55,720
Proceeds from interest-bearing loans 16 - 10,152
Repayments of interest-bearing loans 16 -626 -
Payment of lease liabilities 18 -2,787 -4,574
Net cash ow from nancing activities 83,269 61,297
Net change in cash ow 36,076 -19,032
Cash balance as of 1 January 67,950 88,541
Effects of exchange rate changes on cash and cash equivalents -1,320 -1,559
Cash balance as of 31 December 102,706 67,950
Comprising of:
Cash and cash equivalents 15 102,706 67,950
29
ANNUAL REPORT 2021
GRO
UP - CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - 1 JANUARY - 31 DECEMBER
ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY
(amounts in NOK 1,000) Notes Share
capital
Share
premium
Other
reserves
Accumulated
losses
Total equity
As of 1 January 2021 75,944 56,633 62,637 -98,027 97,188
Prot (loss) after taxes -80,244 20,229 -60,014
Other comprehensive income (loss) 1,593 1,593
Total comprehensive income (loss) - -80,244 - 21,822 -58,422
Share issues 19 15,736 75,896 91,632
Share issue costs 19 -4,951 -4,951
Share-based remuneration 19 8,805 8,805
As of 31 December 2021 91,681 47,335 71,442 -76,205 134,253
As of 1 January 2020 42,931 53,278 58,261 -19,668 134,801
Prot (loss) after taxes -20,306 -81,488 -101,794
Other comprehensive income (loss) 3,129 3,129
Total comprehensive income (loss) - -20,306 - -78,359 -98,665
Share issues 19 33,014 33,232 66,246
Share issue costs 19 -9,570 -9,570
Share-based remuneration 19 4,376 4,376
As of 31 December 2020 75,944 56,633 62,637 -98,027 97,188
30
ANNUAL REPORT 2021
NOTE 1 – GENERAL INFORMATION
NEXT Biometrics Group ASA (“Parent company”) is a public limited liability company, incorporated
and domiciled in Norway, with headquarter in Oslo, Norway. The Parent company and its subsidiaries
(“NEXT” or “the Group”) provides advanced ngerprint sensor technology that delivers uncompromised
security and accuracy for the best possible user experience in the smart card, government ID, access
control and notebook markets.
NEXT’s ngerprint sensors are unique, using active thermal conductivity to read the ngerprint, as
opposed to capacitive or optical sensing used by others. This patented sensing principle allows simple
designs uniquely compatible with the low temperature polysilicon production processes (“LTPS”) used
in high-end display factories. This enables signicantly lower production cost for the Group’s ngerprint
sensors compared to competing sensors of similar quality. The Group has developed and markets a
portfolio of ngerprint sensor modules, readers and exible biometric subassemblies, which may be
incorporated into a wide range of products and solutions.
The Group has six wholly owned operating subsidiaries: NEXT Biometrics AS (Norway) and its
subsidiaries NEXT Biometrics Inc. (Seattle, USA), NEXT Biometrics China Ltd. (Shanghai, China),
NEXT Biometrics Taiwan Ltd. (Taipei, Taiwan), NEXT Biometrics Solutions India Pvt. Ltd. (Bengaluru,
India) and NEXT Biometrics s.r.o. (Prague, Czech Republic).
NEXT ASA’s shares are listed on the Oslo Stock Exchange.
The purpose of the company as stated in the articles of association is to conduct research,
development and commercialization of security products, as well as other activities that will naturally
fall under this.
The nancial statements have been approved for issuance by the Board of Directors on 26 April 2022
and is subject to approval by the Annual General Meeting on 19 May 2022.
CHANGES IN ACCOUNTING POLICIES
The accounting policies applied are consistent with those applied in the previous nancial year as
described below.
New and amended standards and interpretations adopted by the Group:
The Group has reviewed new and amended IASB 2021 standards that are relevant to NEXT.
The IBOR and IFRS 16 - extension of the practical expedient related to modications of leases
has been assessed by the Group, but this change does not apply to the current leases in the group.
Hence, there have not been any new and amended standards and interpretations adopted
with effect from 1 January 2021 that had a material impact on the Group.
New and amended standards and interpretations not yet adopted:
Certain new and amended standards and interpretations have been published but are not mandatory
for nancial statements as of 31 December 2021. They have not been early adopted by the Group and
are not expected to have a material impact on the Group.
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
BASIS OF PREPARATION
These nancial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRS”) as adopted by the EU, being standards and interpretations issued by the
International Accounting Standards Board (“IASB”), in force at 31 December 2021.
GOING CONCERN
In accordance with § 3-3a of the Norwegian Accounting Act, the Board of Directors conrms that the
nancial statements have been prepared under the assumption of going concern.
31
ANNUAL REPORT 2021
MEASUREMENT BASIS
The nancial statements have been prepared under the historical cost convention, unless otherwise
presented in the accounting policies below. Historical cost is generally based on the fair value of the
consideration given in exchange for assets.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. NEXT uses market observable data
to the extent possible when measuring the fair value of an asset or a liability. If the fair value of
an asset or a liability is not directly observable, it is estimated by NEXT using valuation techniques
that maximize the use of relevant observable inputs and minimize the use of unobservable inputs.
FINANCIAL RISK AND CAPITAL MANAGEMENT
NEXT is exposed to certain nancial risks related to exchange rates and interest levels. These are,
however, insignicant compared to the business risk. Business risk may be summarized in:
(a) NEXT currently has limited revenue compared to cost. The Group has reported
accumulated nancial losses.
(b) NEXT’s business plan assumes increased revenue from existing products and
new products under development.
(c) Revenue from NEXT’s products depends, among other things, on market factors
which are not controlled by NEXT.
(d) Competing companies’ products have entered the commercial stage, and
the competitive situation for NEXT’s products is constantly changing.
(e) NEXT’s intended markets are undergoing rapid technological changes.
NEXT manages its liquidity passively, which means that funds are placed in oating-interest bank
accounts. The majority of cash is held in Norwegian kroner at Parent company level and is distributed
when appropriate to the afliates. This is both to have control of the overall liquidity situation and to
manage expense levels in the afliates.
NEXT has no nancial non-current debt by the end of 2021, except for lease liabilities.
NEXT’s sales and production cost are in US dollars. Other operating expenses are mainly in Norwegian
kroner (NOK) and US dollars (USD), depending on the location. Equity transactions are in NOK. In the
Parent company, the majority of the cost and all equity transactions are in NOK. NEXT does not use
nancial instruments to hedge this risk.
Investments in xed assets are only made when mandatory for the needs of the core business.
NEXT has mainly been funded by equity and will prepare and implement comprehensive capital
management and funding policies as and when needed.
The Group is exposed to credit risk, although this has historically not resulted in signicant losses.
NEXT sells its sensors to leading international distributors of electronic components, primarily based
in Asia. The Group’s receivables are not credit insured, but credit monitoring routines are in place for
setting up credit lines and demanding advance payments when required.
CONSOLIDATION
NEXT’s consolidated nancial statements comprise of the Parent company and companies in which the
Parent company has a controlling interest. A controlling interest is normally obtained when the Group
holds more than 50 per cent of the voting rights or has decisive power on the entity’s operational and
nancial management. Minority interests are included in the Group’s equity. Intragroup transactions
and balance sheet items and any unrealized gains or losses or revenue and cost related to intragroup
transactions have been eliminated when preparing the consolidated nancial statements.
32
ANNUAL REPORT 2021
REVENUE FROM CONTRACTS WITH CUSTOMERS
The Group develops, manufactures and sell ngerprint sensors. In general, sales are recognized when
control of the products has transferred at delivery according to delivery terms. The Group delivers
products and send invoices both to distributors and directly to end customers. The Group assess
individual contracts and determines whether a distributor is a customer or a sales agent. When
making this assessment it will be considered whether the buyer could have the opportunity to return
products to the Group, whether the distributor/agent independently can set end customer prices and
sell products to any end customer. The classication of a distributor as a customer or a sales agentwill
have an impact on the timing and measurement of revenue recognition
The goods are sold based on xed prices with no variable consideration. No signicant element of
nancing is deemed present as the sales are normally made with a credit term of 30 days upon
delivery, which is consistent with market practice. A receivable is recognized when the goods are
delivered as this is the point in time that the consideration is unconditional because only the
passage of time is required before the payment is due.
CURRENCY
These nancial statements are presented in Norwegian kroner, which is also the Parent company’s
functional currency. Each entity in the Group determines its own functional currency based on local
operations, and items included in the nancial statements are measured using that functional
currency.
Monetary assets and liabilities denominated in foreign currency are converted to the functional
currency using the exchange rates of the balance sheet date. Revenues and expenses in foreign
currency are converted using the exchange rate at the transaction date.
Assets and liabilities in foreign operations are translated into the presentation currency using the
exchange rates on the balance sheet date. Incomes and expenses relating to foreign operations are
translated into the presentation currency using the average exchange rate. Translation differences
are recognized in other comprehensive income (loss). Translation differences previously recognized
in other comprehensive income (loss) are reversed and recognized in prot and loss when the foreign
operations are disposed.
INTANGIBLE ASSETS
Separately acquired intangible assets
On initial recognition, intangible assets acquired separately are measured at cost. The cost of a
separately acquired intangible asset comprises its purchase price, including import duties and non-
refundable purchase taxes, after deducting trade discounts and rebates and any directly attributable
cost of preparing the asset for its intended use.
After initial recognition, intangible assets are carried at cost less any accumulated amortization and
impairment losses. The estimated useful life and amortization method are revised at the end of each
reporting period with the effect of any changes in estimate being accounted for on a prospective basis.
An intangible asset is derecognized on disposal, or when no future economic benets are expected
from use or disposal. Gains or losses arising from derecognition of an intangible asset - measured
as the difference between the net disposal proceeds and the carrying amount of the asset - are
recognized in prot or loss when the asset is derecognized.
Internally generated intangible assets
Development costs represent typical internally generated intangible assets of relevance for the
Group. Costs incurred in relation to individual projects are capitalized only when the future economic
benet of the project is probable and the following main conditions are met: (i) the development costs
can be measured reliably, (ii) the technical feasibility of the product has been ascertained and (iii)
Management has the intention and ability to complete the intangible asset and use or sell it.
When expenditure is initially recognized as an expense, for example where it cannot be determined
whether future economic benets are probable, it cannot later be recognized as part of the cost of an
intangible asset.
Research costs are expensed as incurred.
33
ANNUAL REPORT 2021
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are held at cost less accumulated depreciation and impairment losses.
When assets are sold or disposed, the gross carrying amount and accumulated depreciations are
reversed. Any gain or loss on the sale or disposal is recognized in the prot and loss.
The gross carrying amount is the purchase price, including duties/taxes and direct acquisition costs
related to making the asset ready for use. Subsequent costs, such as repair and maintenance
expenses, are normally recognized in prot or loss as incurred. When increased future economic
benets as a result of repair/maintenance work can be proven, such expenses will be recognized
in the balance sheet as additions to property, plant and equipment.
The assets are depreciated using the straight-line method over each asset’s useful life. Estimated
useful life and residual value are reviewed at least at each nancial year end.
IMPAIRMENT OF ASSETS
Assessments of indications that assets may be impaired are made by the end of each reporting period.
If an asset’s carrying amount is higher than the asset’s recoverable amount, an impairment loss will
be recognized in prot and loss. The recoverable amount is the higher of the fair value less costs to sell
and the discounted cash ow from continued use. The fair value less costs to sell is the net amount
that can be obtained from a sale to an independent third party. The recoverable amount is determined
separately for each asset.
PROVISIONS
Provisions are recognized when, and only when, the Group has a valid liability (legal or constructive) as
a result of events that have taken place and it is more probable than not that a nancial settlement will
take place as a result of the event(s), and the size of the amount can be measured reliably. Provisions
are reviewed on each balance sheet date and their level reects the best estimate of the liability. When
the effect of time is insignicant, the provisions will be equal to the size of the expense necessary to
be free of the liability. When the effect of time is signicant, the provisions will amount to the present
value of future payments to cover the liability. Any increase in the provisions due to time is recorded as
other nancial expenses.
FINANCIAL ASSETS AND LIABILITIES
Initial recognition and measurement
Financial assets and nancial liabilities are initially recognized when the Group becomes a party to
the contractual provisions of the instrument. Trade receivables are initially recognized when they are
originated. A nancial asset or nancial liability is initially measured at fair value plus, for an item not
at fair value through prot or loss, transaction costs that are directly attributable to its acquisition
or issue. A trade receivable without a signicant nancing component is initially measured at the
transaction price.
On initial recognition, a nancial asset is classied as measured at amortized cost, fair value through
other comprehensive income (FVOCI) or fair value through prot or loss (FVTPL).
The Group makes an assessment of the objective of the business model in which a nancial asset
is held. The business model determines whether cash ows will result from collecting contractual
cash ows, selling the nancial asset or both. In assessing whether the contractual cash ows are
solely payments of principal and interest (SPPI test), the Group considers the contractual terms of the
instrument. The Groups nancial assets at amortized cost includes trade receivables. Financial assets
are not reclassied subsequent to their initial recognition unless the Group changes its business model
for managing nancial assets.
34
ANNUAL REPORT 2021
Financial asset impairment
The Group recognizes loss allowances for ECLs on nancial assets measured at amortized cost. For
trade receivables that do not contain a signicant nancing component, the simplied approach is
applied, and the Group recognize lifetime expected credit loss (ECL). The Group applies the provision
matrix as a practical expedient to calculate ECL. The provision matrix is based on historical losses and
forward-looking information and is updated at each reporting date. In addition, the trade receivables
are grouped in customer segments that have a similar loss pattern. For trade receivables which are
individually assessed the ECL is calculated as the exposure at default multiplied with the probability
of default multiplied with the exposure at default. The Group consider the rebuttable presumption that
default does not occur later than 90 days past due as its policy.
When determining whether the credit risk of a nancial asset has increased signicantly since initial
recognition and when estimating ECLs, the Group considers reasonable and supportable information
that is relevant and available without undue cost or effort. This includes both quantitative and
qualitative information and analysis, based on the Group’s historical experience and informed credit
assessment and including forward-looking information.
ECLs are discounted at the effective interest rate of the nancial asset. For trade receivables
without signicant nancing component, the time value of money will not need to be considered as
it is insignicant and the ECL will therefore not be discounted. Loss allowances for nancial assets
measured at amortized cost are deducted from the gross carrying amount of the assets.
Financial asset write-off
The gross carrying amount of a nancial asset is written off when the Group has no reasonable
expectations of recovering a nancial asset in its entirety or a portion thereof. However, nancial assets
that are written off could still be subject to enforcement activities in order to comply with the Group’s
procedures for recovery of amounts due.
INVENTORY
Raw materials, work in progress and nished products are valued at the lower of cost and net
realizable value after deduction for obsolescence. Net realizable value is estimated as the selling price
less cost of completion and the cost necessary to make the sale. Costs are determined using the FIFO
method. Work in progress and nished goods includes variable cost and non-variable cost which can
reasonably be allocated to items based on normal capacity.
Finished products, work in progress and raw materials are valued at the lower of cost and net
realizable value. Net realizable value is estimated as the selling price less cost of completion and
the cost necessary to make the sale. Costs are determined using the weighted average method. Raw
materials, work in progress and nished products includes variable cost and non-variable cost which
can be allocated to items based on normal capacity.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in hand and deposits held at call with banks.
TAXES
The tax expense consists of the tax payable and changes in deferred tax. Deferred tax has been
calculated based on the temporary differences between the recorded and tax values, as well as on
any tax loss carry-forward at the balance sheet closing date. Any temporary differences increasing
or reducing tax that will or may reverse in the same period, have been netted.
A deferred tax asset will be recognized when it is probable that the Group will have sufcient prot for
tax purposes to utilize the tax asset. At each balance sheet date, the Group reviews its unrecognized
deferred tax assets and the value it has recognized. The Group recognizes an unrecognized deferred
tax asset to the extent that is has become probable that the Group can utilize the deferred tax asset.
Similarly, the Group will reduce its deferred tax asset to the extent that it can no longer utilize it.
Deferred tax and deferred tax assets are measured on the basis of the expected future tax rates.
35
ANNUAL REPORT 2021
CONTINGENT LIABILITIES AND ASSETS
Contingent liabilities are possible obligations resulting from past events which existence depends on
future events; obligations that are not recognized because it is not probable that they will lead to an
outow of resources; and obligations that cannot be measured with sufcient reliability.
Contingent liabilities are not recognized in the annual nancial statements but will be disclosed in
the notes if applicable. A contingent asset is not recognized in the annual nancial statements but
is disclosed in the notes if there is a degree of probability that a benet will accrue to the Group.
SHARE-BASED REMUNERATION
Share-based payments are equity-settled share options granted to employees, contractors and
members of the board of directors. The options are charged against the income statements at their
fair value over the vesting period, with a corresponding increase in equity. The fair value of share-based
options is determined using a Black (1976) option-pricing model.
The social security contribution payable in connection with the exercise of the share options is accrued
on a straight-line basis as current liabilities, based on the intrinsic value of the share options at the end
of each accounting period with consequent charges to the payroll expenses.
Costs related to employees and members of the board are charged as payroll expenses, while costs
related to contractors are charged as other operating expenses.
LEASING AGREEMENTS
The Group recognizes the lease liability and a corresponding right-of-use asset at the commencement
date of the lease. Lease liabilities are measured at the present value of the remaining lease payments
not paid at the commencement date. The lease payments are discounted using the lessee’s interest
rate implicit in the lease, or incremental borrowing rate when the interest rate implicit in the lease
cannot be readily determined. Lease payments consists of the following elements: xed payments,
variable lease payment that are based on an index or a rate, amounts expected to be payable by
the lessee under residual value guarantees, the exercise price of a purchase option if the lessee
is reasonably certain to exercise that option, and payments of penalties for terminating the lease
if the lease term reects the lessee exercising that option. A corresponding asset representing the
right to use the underlying asset during the lease term (right-of-use asset) is recognized, adjusted for
prepayments done before commencement date, and initial direct costs and restoration costs if any.
The right-of-use-asset is depreciated over the lease term and the depreciation expense is recognized
as an operating expense. Interest expense on the lease liability is recognized as a nancial expense.
Lease contracts entered with a duration of less than 12 months and leases with a low value will not
be recognized in the statement of nancial position but recognized as an operating expense over the
lease period. Lessees will be also required to remeasure the lease liability upon the occurrence of
certain events (e.g., a change in the lease term, a change in future lease payments resulting from a
change in an index or rate used to determine those payments). The lessee will generally recognize
the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset.
TERMINATION BENEFITS
Termination benets are payable when the employment is terminated by the Group before the normal
retirement date or when an employee accepts voluntary redundancy in exchange for these benets.
The Group recognizes termination benets when the Group can no longer withdraw the offer.
EARNINGS PER SHARE
Earnings per share are calculated by dividing the prot or loss for the period by the weighted average
number of ordinary shares outstanding over the course of the period. Earnings per share fully diluted
are calculated based on the result or the year divided by the average number of shares fully diluted.
The effect of dilution is not counted in when the result is a decrease loss per share.
EQUITY TRANSACTIONS
Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction
from equity. Income tax relating to transaction costs of an equity transaction is accounted for in
accordance with IAS 12.
36
ANNUAL REPORT 2021
CASH FLOW
The cash ow statement has been drawn up in accordance with the indirect method and reports cash
ows during the period classied by operating, investing and nancing activities.
GOVERNMENT GRANTS
Government grants are recognized when there is reasonable assurance that the grant will be received,
and all attaching conditions will be complied with. When the grant relates to an expense item, it is
recognized as a reduction in expense. When the grant can be viewed as payment for a deliverable or
performance of service, it is recognized as other revenue.
SEGMENT REPORTING
The Group currently reports only in one business segment. Hence, all revenue and cost are related to
the ngerprint sensor technology business segment.
INCOME TAXES
Deferred tax assets related to losses carried forward is recognized when it is probable that the loss
carried forward may be utilized. Evaluation of probability is based on historical earnings, expected
future margins and the size of the order backlog. Future events may lead to these estimates being
changed. Such changes will be recognized when reliable new estimates can be made.
ESTIMATES AND JUDGEMENTS
Preparation of nancial statements in accordance with IFRS requires that the management makes
judgements and prepares estimates and assumptions which have an impact on the recognized
amounts for assets, liabilities, revenue and costs. Estimates and related assumptions have been
based on the management’s best knowledge of past and recent events, experience and other factors
which are considered reasonable under the circumstances. Actual results may deviate from such
assumptions. Estimates and underlying assumptions are subject to continuous evaluation.
Critical account estimates for the Group are:
Share-based remuneration:
The Group estimates the fair value of options at the grant date. The Group has applied a Black (1976)
option-pricing model when valuing the options. The option valuation is based on assumptions about
share price, volatility, interest rates and duration of the options. The cost of share-based remuneration
is expensed over the vesting period. Estimates with regards to future attrition are applied. Such
estimates are updated at the balance sheet date. Changes in this estimate will impact the expensed
cost of share-based remuneration in the period.
Research and development expenses/ Intangible assets:
Research costs are expensed as incurred. An intangible asset arising from the development
expenditure on an individual project is recognized only when the Group can demonstrate the technical
feasibility of completing the intangible asset so that it will be available for use or sale, the Group’s
intention and capability of completing the development and realize the assets, and the net future
nancial benets of use or sale.
37
ANNUAL REPORT 2021
NOTE 3 - REVENUES AND SEGMENT REPORTING
(amounts in NOK 1,000) 2021 2020
Fingerprint sensor technology 49,788 57,770
Total operating revenues 49,788 57,770
THE GROUP
The Group targets four markets for the technology;
(i) Notebook
(ii) Government ID
(iii) Access control
(iv) Smart Cards
The available technology is generic into the four markets. Most of the Group’s key IP, including our NEXT Active
Thermal™ is shared and used in all four markets. Most employees in the Group works broad, adding value
to all markets and technologies. The R&D personnel are focused on technology, rather than markets such
as notebook or Government ID. Based on this, the Group consider that we only operate within one business
segment, and therefore also report only within one business segment, “Fingerprint sensor technology”.
The operating revenue, both in 2021 and in 2020, was mainly related to customers geographically located in Asia.
Other revenue of NOK 1.0 million mainly relates to sale of electronical components.
NOTE 4 – PAYROLL EXPENSES AND REMUNERATION
(amounts in NOK 1,000) 2021 2020
Salaries, fees -28,563 -51,014
Share based remuneration (salary part) -8,471 -3,882
Share based remuneration (employer's tax) -4,495 -69
Social security taxes -3,002 -3,728
Pension contribution -675 -859
Other personnel expenses -779 -3,675
Total payroll expenses -45,983 -63,228
Average numbers of employees 26 40
The Group employed an average number of employees of 26. In addition, the company has 10 contractors
who are working for the company on a part time or full time basis.
The parent company, NEXT Biometrics Group ASA, provides a contribution-based pension insurance
scheme for all employees. The scheme satises the mandatory service pension (‘OTP’) in Norway.
NEXT Biometrics Inc has a 401-K plan for its employees, which allows employees to save for retirement
with pre-tax funds. The company currently does not contribute to this plan but pays for its administration.
NEXT Biometrics Taiwan Ltd offers an employee pension plan to save for retirement by paying 6% of the
salary, but capped at TWD 9000 per month per employee (NOK 2900 per month).
NEXT Biometrics China Ltd and NEXT Biometrics Solutions Pvt Ltd have no local pension plans.
38
ANNUAL REPORT 2021
NOTE 5 – OTHER OPERATING EXPENSES
(amounts in NOK 1,000) 2021 2020
R&D related operating expenses -5,500 -11,835
R&D grants and other government grants
1)
10,505 4,852
Fees to contractors
2)
-5,038 -4,962
Fees to auditors, consultants, lawyers and others -7,639 -8,166
Travel expenses -365 -302
Lease and rent expenses -149 -272
Sales and marketing expenses -975 -793
Loss allowance expected and actual credit loss 8 -3,090
Other expenses -5,055 -3,796
Share based remuneration (operating part)
3)
36 -494
Total other operating expenses -14,172 -28,857
1)
R&D grants and other government grants are related to Skattefunn grants in 2020/2021
and US-COVID-19 loan relief in 2021
2)
Fees to contractors refers to amounts paid the company’s contractors who are working for
the company on a part time or full time basis
3)
Share based remuneration (operating part) refers to share options granted to consultants
(see note 19 for further information)
NOTE 6 – RESEARCH AND DEVELOPMENT COST
In general, research costs are expensed when incurred. Internal and external researching and
development performed in 2021 do not meet the Group’s capitalization criteria.
The reported research and development (R&D) costs includes external project costs for work
and material purchased from various companies and institutions. The payroll cost of R&D staff is
included in payroll, and any capitalization reported as a credit on a separate line. The major parts
of the R&D costs are related to development of the sensor technology as well as production trials
and pilot production of new sensor modules.
Expensed R&D costs for the Group amounted to NOK 15.5 million in 2021 (2020: NOK 35.9
million), of which NOK 9.9 million (2020: NOK 28.9 million) is presented in payroll expenses
and NOK 5.5 million (2020: NOK 7.0 million) in other operating expenses.
GOVERNMENT GRANTS
The subsidiary NEXT Biometrics AS’ estimated estimated R&D public grant in connection with
SkatteFUNN (Norwegian tax deduction scheme) for 2021 is NOK 2.5 million (2020: NOK 4.9
million). The total amount is presented as part of “Other current assets” in the balance sheet and
has correspondingly led to a reduction in other operating expenses. The grant is subject to nal
approval by the tax authorities.
39
ANNUAL REPORT 2021
NOTE 7 – FINANCIAL ITEMS
(amounts in NOK 1,000) 2021 2020
Interest income 646 144
Interest income on sub-leases (see note 18) 62 22
Other nancial income 340 2,082
Total nancial income 1,048 2,248
Interest expenses -108 -428
Interest expenses right-to-use assets (see note 18) -238 -383
Other nancial expenses -953 -
Total nancial expenses -1,299 -811
Realized currency gains (losses) -339 15,065
Change in unrealized currency gains (losses) 446 -16,092
Net currency gains (losses) 108 -1,026
Net nancial items -143 411
Other nancial income in 2021 includes fair value gain of NOK 0.3 million of US government loan that was
repaid in 2021.
NOTE 8 – INCOME TAXES
(amounts in NOK 1,000) 2021 2020
Current taxes 1,730 -3,075
Change in deferred taxes -109 85
Total income tax expenses 1,621 -2,990
In 2020, NEXT’s US subsidiary recognized a tax refund of NOK 3.2 million. The tax refund was due to a
taxable loss in 2020 which can be carried back to previous nancial years and offset previously paid taxable
income, thus resulting in a refund.
INCOME TAX EXPENSE RECONCILIATION:
(amounts in NOK 1,000) 2021 2020
Prot (loss) before taxes -58,394 -104,784
Expected income tax expenses at Norwegian nominal tax rate (22%) -12,847 -23,053
Difference between local tax rates and Norwegian nominal tax rate 40 216
Effect of change in local tax rates - -
Tax effect of permanent differences -1,643 -2,167
Change in deferred tax assets not recognized 18,409 22,555
Prior year underaccrual/(overaccrual) of income tax - 3
Other -2,338 -544
Actual income tax expenses 1,621 -2,990
Effective tax rate -3% 3%
40
ANNUAL REPORT 2021
Deferred tax related to the following temporary differences:
(amounts in NOK 1,000) 2021 2020
Property, plant and equipment -3,152 -3,353
Inventories -13,207 -9,466
Accounts receivables and other assets -2,005 -3,907
Lease liabilities -1,225 -2,144
Other temporary differences -4,497 -299
Tax losses carried forward -1,213,105 -1,139,464
Total temporay differences and tax losses carried forward -1,237,190 -1,158,634
Deferred tax assets 272,184 244,333
Deferred tax assets not recognized -272,216 -244,410
Deferred tax assets(-)/liability(+) in the balance sheet -32 77
As of 31 December 2021, NOK 1,213 million (2020: NOK 1,137 million) of tax losses carried forward are
related to the Norwegian companies with no limitiations in expiry date.
Due to a history of losses, deferred tax assets are not recognized.
The following table illustrates the deferred tax balance recognized in the statement of nancial position:
(amounts in NOK 1,000) 2021 2020
Deferred tax assets 32 58
Deferred tax liabilities - -135
Net deferred taxes as of 31 December 32 -77
NOTE 9 – EARNINGS PER SHARE
The calculations of earnings per share attributable to the equity holders of the parent company are based on the following data:
(amounts in NOK 1,000 2021 2020
Prot (loss) after taxes (NOK 1,000) -60,014 -101,794
Number of shares outstanding as of 1 January 75,944,489 42,930,575
New shares issued during the year (see note 19) 14,819,897 33,013,914
Excercised incentive options during the year (see note 19) 916,377 -
Number of shares outstanding as of 31 December 91,680,763 75,944,489
Weighted average number of shares for the year * 89,246,049 89,246,049
Effect of dilution option programmes - -
Weighted average number of shares adjusted for effect of dilution 89,246,049 89,246,049
Earnings per share, basic and diluted (NOK) -0.67 -1.14
* Weighted average number of shares for 2020 has been adjusted retrospectivly as a result of share issues in 2021
When the period result is a loss, diluted earnings per share is not to be reduced by the diluted number of shares
but equals to basic earnings per share.
41
ANNUAL REPORT 2021
NOTE 10 – INTANGIBLE ASSETS
Intangible assets mainly consist of the patent and know-how (IP) described as the NEXT Active
Thermal™ Sensing principle, internally generated ASIC designs and source code license.
(amounts in NOK 1,000) 2021 2020
Accumulated cost as of 1 January 26,780 26,996
Additions - -
Disposals at cost - -216
Translation differences 649 -
Accumulated cost as of 31 December 27,429 26,780
Accumulated amortization and impairment losses as of 1 January -21,345 -15,027
Amortization -1,607 -6,534
Accumulated amortization and impairment losses of disposed items - 216
Translation differences -593 -
Accumulated amortization and impairment losses as of 31 December -23,545 -21,345
Carrying amount as of 31 December 3,884 5,435
Amortization period in years (straight line) 3-12 3-12
As of 31 December 2021, in carrying amount, there is no internally generated assets,
the NOK 3.9 million (2020: NOK 5.4) are separately acquired assets.
The patent and know-how (IP) is amortized over 12 years, equal to the patent life from
recognition as of 1 January 2012, ASIC designs are amortized over 3 years, and source
code license is amortized over 5 years.
An impairment test of intangible assets has been performed and it was concluded that
there were no need for impairment on these assets.
42
ANNUAL REPORT 2021
NOTE 11 – PROPERTY, PLANT AND EQUIPMENT
(amounts in NOK 1,000) 2021 2020
PPE RoU-
assets
Total PPE RoU-
assets
Total
Accumulated cost as of 1 January 55,251 8,769 64,020 55,435 12,118 67,553
Additions 203 3,828 4,031 88 1,141 1,229
Disposals at cost -15,548 -7,849 -23,397 -849 -4,472 -5,321
Translation differences 1,689 104 1,793 578 -19 559
Accumulated cost as of 31 December 41,595 4,852 46,447 55,251 8,769 64,020
Accumulated depreciation and impairment losses as of 1 January -39,224 -7,599 -46,823 -31,746 -4,595 -36,342
Depreciation -3,734 -1,728 -5,461 -5,205 -3,540 -8,745
Impairment losses - - -3,348 -3,229 -6,577
Accumulated depreciation and impairment losses
of disposed items
15,500 7,849 23,349 840 3,353 4,193
Translation differences -1,081 116 -965 235 412 647
Accumulated depreciation and impairment
losses as of 31 December
-28,539- -1,362 -29,901 -39,224 -7,599 -46,823
Carrying amount as of 31 December 13,056 3,490 16,547 16,027 1,170 17,197
Depreciation period in years (straight line) 3-10 2-4 3-10 2-4
As of 31 December 2021, carrying amount of property, plant and equipment consists of
machinery of NOK 12.7 million (2020: NOK 15.6 million) and ofce equipment of NOK 0.3
million (2020: NOK 0.4 million). Additions in 2021 for right-of-use assets (RoU-assets) were
mainly related to new ofce leases in Seattle, Tapei and Shanghai. See also note 18 for further
information regarding leases.
During 2020, RoU-assets were impaired by NOK 3.2 million and machineries related to
smart card were impaired by NOK 3.3 million due to limited use of the assets.
NOTE 12 – INVENTORIES
(amounts in NOK 1,000) 2021 2020
Raw material, consumables and supplies 10,587 8,834
Work in progress 3,367 4,862
Finished products 5,033 8,030
Total inventories 18,987 21,725
Cost of goods sold is dened as cost of materials and production service expenses.
Cost of goods sold includes net write-downs of inventories. In 2021, net write-downs
on inventories was NOK 6.3 million (NOK 1.4 million in 2020).
43
ANNUAL REPORT 2021
NOTE 13 – ACCOUNTS RECEIVABLES
(amounts in NOK 1,000) 2021 2020
Accounts receivables - gross 14,092 6,406
Accounts receivables - loss allowance -2,291 -2,350
Total accounts receivables as of 31 December 11,801 4,056
(amounts in NOK 1,000)
Current More than
30 days
past due
More than
60 days
past due
More than
120 days
past due
Total
Expected loss rate 0% 1% 2% 5%
Gross carrying amount (Class 1 and 2) 10,851 351 29 12
Loss allowance (Class 1 and 2) - 4 1 1 5
Gross carrying amount (Class 3) 2,540
Loss allowance (Class 3: individual assessment) 2,286 2,286
Total loss allowance as of 31 December 2021 2,291
(amounts in NOK 1,000) 2021 2020
Opening balance 2,350 180
This year's allowance for expected credit loss 5 2,673
This year actual credit loss - -637
Change in estimate previous year's expected credit loss -64 134
Total allowance for expected credit loss as of 31 December 2,291 2,350
Due to short period to maturity, the carrying amount of accounts receivables approximates fair value.
IMPAIRMENT OF FINANCIAL ASSETS
Expected credit loss for 2021 based on the Group’s provision matrix as of 31 December 2021 is immaterial.
NOTE 14 – OTHER NON-CURRENT AND CURRENT ASSETS
(amounts in NOK 1,000) 2021 2020
Lease receivables (see note 18) - 704
Total other non-current assets as of 31 December - 704
Prepayments 2,575 3,119
Government grants (see note 6) 2,525 4,852
Lease receivables (see note 18) 517 497
Deposits 896 -
Income taxes and other taxes receivables 843 -
Other receivables 343 5,874
Total other current assets as of 31 December 7,699 14,342
The carrying amount of other assets is considered approximates fair value.
44
ANNUAL REPORT 2021
NOTE 15 - CASH AND CASH EQUIVALENTS
(amounts in NOK 1,000) 2021 2020
Cash and cash equivalents - unrestricted 36,780 52,525
Cash and cash equivalents - employees withheld payroll tax deposits 708 421
Cash and cash equivalents - other restricted balances 65,218 15,004
Total cash and cash equivalents 102,706 67,950
The fair value for this class of nancial instruments is assessed to be equal to the
nominal amount.
Restricted cash and cash equivalents consists of withheld payroll tax deposits for
employees, deposits on escrow accounts and other restricted deposits that needs
to be notied one month upfront of withdrawal.
NOTE 16 – INTEREST-BEARING LOANS
(amounts in NOK 1,000) 2021 2020
Non-current interest-bearing loans - 5,609
Current interest-bearing loans - 2,346
Total interest-bearing loans as of 31 December - 7,955
In April 2020, NEXT Biometrics Inc. was granted a loan amounting to USD 1.0 million under the
COVID-19 US government sponsored loan program. NEXT qualied for loan forgiveness amounting
to NOK 8.0 million and repaid the remaining loan balance of NOK 0.6 million during 2021. Interest
expense for 2021 amounted to NOK 0.1 million (2020: NOK 0.3 million). Net fair value, interest
and exchange gain was NOK 0.7 million in 2021.
The table below shows a reconciliation of the opening and closing balance for liabilities arising
from nancing activities:
(amounts in NOK 1,000) 2021 2020
Opening balance 7,955 -
Loan relief -8,040 -
Changes from nancing cash ows -626 10,152
Fair value gain at inception of loan - -809
Amortized interest expenses - 340
Net changes in foreign exchange rates and fair value 711 -1,728
Closing balance as of 31 December - 7,955
The table below summarises the maturity prole based on contractual undiscounted payments:
(amounts in NOK 1,000) 2021 2020
In 2021 - 2,483
In 2022 - 6,095
Total undiscounted repayments as of 31 December - 8,578
45
ANNUAL REPORT 2021
NOTE 17 – OTHER NON-CURRENT AND CURRENT LIABILITIES
(amounts in NOK 1,000) Category 2021 2020
Lease liabilities (see note 18) Amortised cost 1,899 1,164
Total other non-current liabilities 1,899 1,164
Accrued salary, vacation pay and board remuneration Amortised cost 2,704 3,821
Lease liabilities (see note 18) Amortised cost 2,597 2,090
Public duties payable Non-nancial liabilities 1,825 952
Share options social security tax Non-nancial liabilities 4,277 69
Unearned revenue Non-nancial liabilities 59 243
Other current liabilities Amortised cost 6,811 6,752
Total other current liabilities 18,273 13,928
For nancial liabilities at amortised cost, the carrying amount is assessed to be a reasonable approximation of fair value.
NOTE 18 – LEASES
The table below shows the amounts related to leases recognized in the statement of nancial position:
(amounts in NOK 1,000) 2021 2020
Property - ofce leases (included in "Property, plant and equipment") 3,489 1,170
Total right-of-use assets 3,489 1,170
Non-current lease receivables (included in "Other non-current assets") - 704
Current lease receivables (included in "Other current assets") 517 497
Total lease receivables 517 1,200
Non-current lease liabilities (included in "Other non-current liabilities") 1,899 1,164
Current lease liabilities (included in "Other current liabilities") 2,597 2,090
Total lease liabilities 4,496 3,254
See note 11 for more information regarding right-of-use assets.
In 2021, NEXT the ofce lease agreements in China, USA and Taiwan expired and the Group entered into new ofce
leases with signicantly smaller individual ofce sizes and monthly cost. The individual lease terms for the new leases
are 2-3 years including extension periods. The new lease agreements were recognized with NOK 3.8 million in right-of-
use assets and NOK 3.7 million in lease liabilities.
In 2020, the ofce lease agreement in Czech was terminated, which resulted in a gain of NOK 0.5 million. In USA, the
ofce lease agreements were renegotiated, which resulted in reduced lease liabilities of NOK 0.7 million. The gains are
included in “Financial income” for 2020.
The ofce lease in Norway was subleased from October 2020. Related right-of-use asset of NOK 1.2 million was
derecognized, and a lease receivable for the sublease of NOK 1.5 million was recognized. Gain on sublease of
NOK 0.3 million was included as part of “Other revenues” in 2020.
46
ANNUAL REPORT 2021
The table below shows the amounts related to leases recognized in the statement of comprehensive income:
(amounts in NOK 1,000) 2021 2020
Gain on sub-lease (included in "Other revenues") - 347
Depreciation property right-of-use assets (included in "Depreciation and amortization") -1,728 -3,540
Impairment losses property right-of-use assets (included in "Impairment losses") - -3,229
Expenses relating to low-value leases (included in "Other operating expenses") - -13
Expenses relating to short-term leases (included in "Other operating expenses") - -37
Gain on changes in lease liabilities (included in "Other nancial income") - 1,243
Interest income (included in "Financial income") 62 22
Interest expenses (included in "Financial expenses") -238 -383
Net expenses related to leases -1,904 -5,589
The table below shows a reconciliation of the opening and closing balance for lease liabilities arising from nancing activities:
(amounts in NOK 1,000) 2021 2020
Opening balance 3,254 7,830
Implementation effect IFRS 16 - -
Changes from nancing cash ows -2,787 -4,574
Changes in lease liabilities due to new/amended lease agreements or CPI adjustments 3,774 -148
Other changes 66 -187
Translation differences 190 332
Closing balance as of 31 December 4,496 3,254
The total cash outow for leases in 2021 was NOK 2.8 million (2020: NOK 4.9 million).
The table below shows the maturity prole for the lease liabilities based on contractual undisocunted payments:
(amounts in NOK 1,000) 2021 2020
Within one year 2,725 2,456
More than 1 year but within 5 years 1,987 1,194
After 5 years - -
Total contractual cash ows related to leases 4,712 3,650
47
ANNUAL REPORT 2021
NOTE 19 – SHARE CAPITAL, SHAREHOLDER’S INFORMATION
AND SHARE-BASED OPTIONS
There is one class of shares. All shares have equal rights and are freely negotiable. The share capital is fully paid in.
The par value of the shares is NOK 1 per share.
There were 91,680,763 shares in the company on 31 December 2021, compared to 75,944,489 shares on 31 December
2020. At the end of 2021 there were 5,377 shareholder accounts compared to 2,850 at the end of 2020.
(amounts in NOK 1,000) 2021 2020
Opening balance 75,944,489 42,930,575
Share issue(s) 14,819,897 33,013,914
Exercised incentive share options 916,377 -
Closing balance 91,680,763 75,944,489
In February 2021, NEXT successfully completed a private placement issuing 14,819,897 new shares at a subscription
price of NOK 6.0 per share, corresponding to gross proceeds of NOK 89 million. Estimated expenses related to the private
placement is NOK 4.8 million and net proceeds were NOK 84 million. Total net proceeds for the year 2020 amounted to
NOK 55.7 million. Moreover, in May and September 2021, NEXT issued additional 916,377 shares and raised total gross
proceeds of NOK 2.7 million in two equity issues related to exercise of employee share options.
Total net proceeds for the year 2021 amounted to NOK 86.7 million.
There are no authorizations to the board to purchase own shares.
2020
In June 2020, NEXT completed a private placement issuing 25,000,000 new shares at a subscription price of NOK 2.00
per share, corresponding to a total gross amount of NOK 50.0 million. Direct expenses and underwriting commission in
relation to the private placement was NOK 8.7 million, of which NOK 4.5 million for the underwriting commission was
settled by issuing 2,262,027 new shares at NOK 2.00 per share. The net proceeds from the private placement were NOK
45.8 million. A subsequent share offering was completed in July 2020, issuing 5,382,887 new shares at a subscription
price of NOK 2.00 per share, corresponding to a total gross amount of NOK 10.8 million. The share issues were approved
at the extraordinary general meeting held on 19 June 2020. In July 2020, the board agreed to issue 0.37 million shares
in the company at a subscription price of NOK 2.59 per share to executive CTO/COO Dan Cronin to settle an agreed bonus
payment. Total net proceeds for the year 2020 amounted to NOK 55.7 million.
CAPITAL RESOURCES
NEXT manages its liquidity passively, which means that funds are placed in oating-interest bank accounts. The majority
of cash is held in Norwegian kroner at parent company level and is distributed when appropriate to the afliates. This is
both to have control of the overall liquidity situation and to manage expense levels in the afliates.
NEXT has no nancial debt by the end of 2021 and does not hold any other nancial instruments in the balance sheet or
any such instruments outside the balance sheet.
NEXT targets to have an equity ratio above 80%, measured as total equity divided by total assets.
Equity ratio 2021 2020
Total equity 134,253 97,188
Total assets 161,655 131,477
Equity share 83% 74%
48
ANNUAL REPORT 2021
Capital resources 2021 2020
Current debt 25,376 27,381
Non-current debt 2,027 6,908
Less cash and cash equivalents -102,706 -67,950
Net debt (net cash) -75,303 -33,661
Total equity 134,253 97,188
Total capital resources 58,949 63,527
Gearing ratio (%) -128% -53%
The largest shareholders at year end and shares owned by executive and Directors of the Board:
Top 20 shareholders at 31 December 2021 Number of
shares
Percent of
shares
Skandinaviska Enskilda Banken AB 7,413,614 8.1%
TVENGE, TORSTEIN INGVALD 6,000,000 6.5%
SILVERCOIN INDUSTRIES AS 5,202,054 5.7%
NORUS AS 4,400,000 4.8%
TVENGE, ØYSTEIN ERLING 2,544,744 2.8%
SONGA CAPITAL AS 2,505,486 2.7%
LUCELLUM AS 2,315,000 2.5%
BNP Paribas Securities Services 2,243,000 2.4%
Avanza Bank AB 1,713,542 1.9%
CORPORATE INVESTMENT CONSULTING AS 1,664,000 1.8%
ECOMNEX HOLDING AS 1,519,484 1.7%
CAMIKO AS 1,292,691 1.4%
DNB Markets Aksjehandel/-analyse 1,152,621 1.3%
HANOMA HOLDING AS 1,080,000 1.2%
SPECTER INVEST AS 1,054,000 1.1%
SIX-SEVEN AS 1,004,660 1.1%
AVEO INVEST AS 1,000,000 1.1%
Nordnet Bank AB 925,511 1.0%
APONIA AS 832,779 0.9%
KRISTIAN FALNES AS 800,000 0.9%
TOTAL top 20 46,663,186 50.9 %
Others 45,017,577 49.1%
Total number of shares 91,680,763 100.0%
49
ANNUAL REPORT 2021
Shares owned by Executives and Directors of the Board Number of
shares
Percent of
shares
Held through
Senior Executives
Peter Heuman, CEO - 0.00%
Eirik Underthun, CFO - 0.00%
Ulf Ritsvall, SVP Sales and Marketing - 0.00%
Board of Directors
Petter Fjeldstad, Chairman 832,779 0.91% Aponia AS
Odd-Harald Hauge 548,907 0.60% Odd-Harald Hauge
Live Haukvik 100,000 0.11% Spurv Invest AS
Emine Lundkvist 79,738 0.09%
Nomination Committee
Jon Frode Vaksvik 2,000 0.00%
Haakon Sæter
1)
6,230,561 6.80% Silvercoin
Industries AS,
Six-Seven AS &
Haakon Sæter
Hans Herman Horn 4,960,000 5.41% NORUS AS, Norus
Holding Datter
AS, Edgewater
Datter AS & Hans
Herman Horn
12,753,985 13.91%
1)
In addition to the shares held directly through Silvercoin Industries AS, Six-Seven AS & Haakon Sæter, Silvercoin
Industries AS held futures contracts on 2,000,000 NEXT shares as per 31 December 2021.
As of 31 December 2021, the Company has one share option program:
I)
LONG-TERM SHARE OPTIONS PROGRAM
NEXT has allotted long-term share options to employees. The options in the 2016-2019 program vest 1/3 after 1 year,
additionally 1/3 after 2 years, additionally 1/3 after 3 years. The options expire after 6 years. The options in the 2020
program are fully vested as per 31. December 2021. These options expire 3 years after the options have been granted.
The options in the 2021 program vest 1/3 in quarter three 2021, 1/3 in quarter three 2022 and 1/3 in quarter three
2023. These options expire 3 years after the options have been granted.
There are currently an accumulated 9,828,646 (10.7% of total number of shares in the Company) share options
outstanding. Out of these, 6,665,417 share options have vested.
Each option gives the holder the right to acquire one share from the Company at a strike price dened in the individual
share option agreement.
The option agreements include a clause on accelerated vesting in case of a majority of shares in the Company are (i) sold
to an acquirer, (ii) the Company is merged with another company, (iii) a demerger occurs, and (iv) if the company’s shares
are delisted.
At the Annual General Meeting (AGM) 12 May 2021 the Board of Directors was granted authorization to issue up to
7,930,000 shares shares in the company in relation to options granted to employees and board members.
50
ANNUAL REPORT 2021
2021 2020
Options - movement Number of options Weighted average
exercise price
Number of options Weighted average
exercise price
Outstanding options - Beginning period 6,682,460 5.17 1,732,476 28.90
Granted 4,649,998 6.09 5,872,000 2.49
Exercised -916,377 2.96 - -
Forfeited or expired -587,435 - -965,919 -
Modications - - 43,903 -
Outstanding options - End period 9,828,646 4.84 6,682,460 5.17
Vested options - End period 6,665,419 4.25 3,475,485 8.79
2021 2020
Number of options Weighted average
fair value
Number of options Weighted average
fair value
Granted options - During period 4,649,998 2.58 5,872,000 1.36
Net expense in the
period (NOK 1,000)
Of which adjust-
ment prior periods
expense beause of
change in esti-
mated number of
options that will
vest (NOK 1,000)
Remaining ex-
pense future peri-
ods (NOK 1,000)
Number of options
expected to vest
(number of options)
2016-2019 grants -5 -158 44 634,316
2020 grants 1,978 269 - 4,886,000
2021 grants 6,463 - 4,046 3,924,997
Total 8,435 111 4,090 9,445,313
The fair value for the share-based options granted in the year has been calculated by use of the Black (1976)
option-pricing model applying the following assumptions applied in 2021 and 2020:
EXERCISE PRICE:
2021: Weighted average NOK 6.09 per share
2020: Weighted average NOK 2.49 per share
DURATION:
2021: 1/3 have 1 years, 1/3 have 2 years and 1/3 have 3 years
2020: 1/2 have 2 years and 1/2 have 3 years
VOLATILITY:
2021: 90%
2020: 90%
RISK FREE INTEREST RATE:
2021: 0.33%-0.73% depending on time to maturity of individual options.
2020: 0.2%
ATTRITION:
2021: Estimated 10%-15% attrition depending on time to maturity of individual non-vested share-based options.
2020: Estimated 10% attrition for non-vested share-based options.
No expected dividend payment
51
ANNUAL REPORT 2021
NOTE 20 – REMUNERATION KEY PERSONNEL
AND AUDIT FEES
ACTUAL REMUNERATION - SENIOR EXECUTIVES
2021
(amounts in
NOK 1,000)
Board
remuneration
Salary Bonus Other
benets
Pension
cost
Fair value
granted
options *
Total
remuneration
Senior Executives
Peter Heuman, CEO - 3,534 1,700 4 145 3,209 8,592
Eirik Underthun, CFO - 1,731 - 5 145 1,257 3,138
Ulf Ritsvall, SVP Sales
and marketing
1)
- 366 - 5 - 180 551
Board of Directors
Petter Fjeldstad, Chairman 500 - - - - 500
Odd Harald Hauge 200 - - - - 200
Emine Lundkvist 200 - - - - 200
Live Haukvik 200 - - - - 200
-
Nomination committee
Jon Frode Vaksvik,
Chairman
30 - - - - - 30
Haakon Sæter 20 - - - - - 20
Hans-Herman Horn
2)
- - - - - - -
Total remuneration 1,150 5,631 1,700 14 290 4,646 13,431
* Fair value of granted options is equal to expensed share option remuneration for the year, which
is based on fair value at grant date and vesting period (see note 2 for further information).
Board remuneration reported above is based on paid-out amounts.
1)
Ulf Ritsvall was SVP sales and marketing effective from 18 October 2021.
2)
Hans Herman Horn was elected as new member of the nomination committee at the annual
general meeting held on 12 May 2021.
52
ANNUAL REPORT 2021
ACTUAL REMUNERATION - SENIOR EXECUTIVES
2020
(amounts in
NOK 1,000)
Board
remuneration
Salary Other
benets
Pension
cost
Fair value
granted
options *
Total
remuneration
Senior Executives
Peter Heuman, CEO - 3,525 7 110 2,594 6,236
Eirik Underthun, CFO
1)
- 1,451 7 119 987 2,564
Knut Stålen, CFO
2)
- 1,703 2 19 -678 1,046
Dan Cronin, COO
3)
- 2,732 1,030 - 722 4,484
Board of Directors
Petter Fjeldstad, Chairman 200 - - - 1,030 1,230
Odd Harald Hauge - - - - 197 197
Emine Lundkvist 200 - - - 240 440
Live Haukvik - - - - 197 197
Magnus Mandersson
4)
630 - 125 - -75 680
Brita Eilertsen
4)
200 - - - -45 155
Emanuel Lang
4)
260 - - - -45 215
Nomination committee
Jon Frode Vaksvik, Chairman - - - - - -
Haakon Sæter 20 - - - - 20
Matei Gaburici
5)
20 - - - - 20
Total remuneration 1,530 9,411 1,171 248 5,124 17,484
1)
Eirik Underthun was CFO effective from 29 February 2020.
2)
Knut Stålen was CFO until 29 February 2020.
3)
Dan Cronin was COO until 31 October 2020 and consultant to the company from 1 November 2020.
4)
Board members Magnus Manderson, Brita Eilertsen and Emanuel Lang Cronin were not elected for
a renewed term in the company’s general meeting in May 2020.
5)
Nomination committee member Matei Gaburici was not elected for a renewed term in the
company’s general meeting in May 2020.
CEO REMUNERATION
Peter Heuman has a salary of NOK 2.9 million per year. In addition, he is part of the Company’s
option plan and the bonus program, which provides annual bonuses based upon the achievement
of performance objectives established by the company. Further, the CEO is entitled to a pension
benet of 15% of annual base salary. Peter Heuman was awarded a bonus in 2021 and the company
also paid pension benets as salary for the amount in excess of the company’s standard pension
contribution for 2021.
SEVERANCE
Peter Heuman has a severance agreement whereby he will receive 100% pay for 6 months for
termination by the Company without cause.
53
ANNUAL REPORT 2021
LOANS AND GUARANTEES FOR SENIOR EXECUTIVES
The Company has not made any advance payments or issued loans to, or guarantees in favor of, any senior executives
or members of the board.
SHARE BASED REMUNERATION
Salary, pension and any bonuses will attract employer’s tax, which will be expensed simultaneously with the
remuneration. The notional cost of options as share-based remuneration is expensed, but the equity effect is nil because
the contra item is a notional equity injection of equal amount. In addition, employer’s tax is accrued on the intrinsic value
of the option on the balance sheet date.
For the shareholders, a possible exercise will represent a dilution. At the end of 2021, the number of outstanding options
to senior executives amounted to 8,080,000 corresponding to 8.8% of the share capital. At the end of 2020, the number
of outstanding options to senior executives amounted to 5,661,501 corresponding to 7.5% of the share capital.
For further details regarding share-based remuneration, see note 19.
OPTIONS - SHARE BASED REMUNERATION
2021
Accumulated
quantity
options OB
Granted
options
Expired/
adjusted
options
Exercised
options
Average
exercise
price - A
Accumulated
quantity
options CB
Average
exercise
price - B
Senior Executives
Peter Heuman, CEO 2,720,000 2,000,000 - - - 4,720,000 3.99
Eirik Underthun, CFO 1,000,000 800,000 - -500,000 2.49 1,300,000 4.63
Ulf Ritsvall, SVP Sales
and Marketing
- 400,000 - - - 400,000 7.25
Board of Directors
Petter Fjeldstad,
Chairman
1,030,000 - - - - 1,030,000 2.66
Odd Harald Hauge 200,000 - - - - 200,000 2.49
Emine Lundkvist 230,000 - - - - 230,000 3.27
Live Haukvik 200,000 - - - - 200,000 2.49
Total 5,380,000 3,200,000 - - 8,080,000
2020
Accumulated
quantity
options OB
Granted
options
Expired/
adjusted
options
Exercised
options
Average
exercise
price - A
Accumulated
quantity
options CB
Average
exercise
price - B
Senior Executives
Peter Heuman, CEO 220,000 2,500,000 - - - 2,720,000 2.55
Eirik Underthun, CFO - 1,000,000 - - - 1,000,000 2.49
Dan Cronin, COO 306,500 - -24,999 - - 281,501 24.18
Board of Directors
Petter Fjeldstad,
Chairman
30,000 1,000,000 - - 1,030,000 2.66
Odd Harald Hauge - 200,000 - - 200,000 2.49
Emine Lundkvist 30,000 200,000 - - 230,000 3.27
Live Haukvik - 200,000 - - 200,000 2.49
Total 586,500 5,100,000 -24,999 - 5,661,501
A - Average exercise price for options exercised during the nancial year (amounts in NOK)
B - Average exercise price for quantity of options by the end of the nancial year (amounts in NOK)
54
ANNUAL REPORT 2021
NOTE 21 – RELATED PARTY TRANSACTIONS
The Company’s signicant shareholders, board members and management are considered related
parties. All transactions with related parties have been carried out on arm’s length principle.
Board members have received remuneration according to the general meetings decisions.
In addition, board members have been granted options. Salary and board remuneration to
related parties have been disclosed in note 20.
NOTE 22 - EVENTS OCCURRING AFTER THE
BALANCE SHEET DATE
Between 31 December 2021 and the resolution of these nancial statements, there has not been
any event which have had any noticeable impact on the Group’s or the parent company’s result for
2021 or the value of the Group or the parent company’s assets and liabilities as of 31 December
2021, except events mentioned below.
Early 2020 and during 2021, the COVID-19 pandemic spread to multiple countries where the
Group has ofces, outsourced production facilities and customers. The COVID-19 pandemic
continues to affect the operation of the Group in 2022. In 2021 and early 2021, the Group has
had sufcient inventory to cover customer product demand. Late 2021 and early 2022, the group
has been experiencing shortages of certain types of microchips and longer lead times from its
suppliers, which has affected the Group’s ability to deliver PC sensor products to its customers.
The group carries an unfullled PC sensor backlog as per 31 December 2021. Moreover, during
2020 and 2021, the Group experienced slower demand from customers and lengthened sales
cycles. The Group has implemented measures and COVID-19 policies in line with local government
regulations in ofce locations globally to address the pandemic.
55
ANNUAL REPORT 2021
> Financial Statements
PARENT COMPANY - STATEMENT OF COMPREHENSIVE INCOME - 1 JANUARY - 31 DECEMBER
(amounts in NOK 1,000) Notes 2021 2020
Operating revenues 2 8,253 8,602
Other revenues 2 65 363
Total revenues 8,318 8,965
Payroll expenses 3 -11,532 -12,612
Share based renumeration 3 -10,166 -4,438
Other operating expenses 4 -6,527 -7,935
Depreciation and amortization 7,8 -1,139 -1,528
Impairment losses 7,8 - -656
Total operating expenses -29,364 -27,169
Operating prot (loss) -21,046 -18,204
Financial income 5 1,171 265
Financial expenses 5 -250 -133
Net currency gains (losses) 5 796 -2,234
Net nancial items 1,717 -2,102
Prot (loss) before taxes -19,329 -20,306
Income tax expenses 6 - -
Prot (loss) after taxes -19,329 -20,306
Other comprehensive income (loss) - -
Total comprehensive income (loss) -19,329 -20,306
56
ANNUAL REPORT 2021
PARENT COMPANY - STATEMENT OF FINANCIAL POSITION - AS OF 31 DECEMBER
(amounts in NOK 1,000) Notes 2021 2020
ASSETS
Intangible assets 7 3,000 3,749
Property, plant and equipment 8,15 333 705
Shares in subsidiaries 9 173,870 132,828
Loans to group companies 10 18,021 18,237
Other non-current assets 11,15 - 704
Total non-current assets 195,223 156,223
Accounts receivables 11 307 322
Other current assets 11,15 1,989 1,623
Cash and cash equivalents 12 77,523 43,329
Total current assets 79,819 45,274
Total assets 275,042 201,497
EQUITY AND LIABILITIES
Share capital 13 91,681 75,944
Share premium 13 108,250 56,633
Other reserves 13 65,337 62,637
Accumulated losses - -
Total equity 265,268 195,215
Other non-current liabilities 14,15 - 1,164
Total non-current liabilities - 1,164
Accounts payables 543 1,618
Other current liabilities 14,15 9,231 3,500
Total current liabilities 9,774 5,118
Total equity and liabilities 275,042 201,497
Oslo, 26 April 2022
The board of directors of NEXT Biometrics Group ASA
Petter Fjellstad
Chairman
Odd-Harald Hauge
Board member
Peter Heuman
CEO
Emine Lundkvist
Board member
Live Haukvik
Board member
/Sign/ /Sign/
/Sign/
/Sign/
/Sign/
57
ANNUAL REPORT 2021
PARENT COMPANY - STATEMENT OF CASH FLOW - 1 JANUARY - 31 DECEMBER
(amounts in NOK 1,000) Notes 2021 2020
Prot (loss) before taxes -19,329 -20,306
Share-based remuneration 13 5,958 4,370
Accrued share option social security cost 13 4,207 69
Depreciation and amortization 7,8 1,139 1,528
Impairment losses 7,8 - 656
Write-down on investments in subsidiaries 9 - -
Change in accounts receivables 15 -322
Change in accounts payables -1,138 339
Change in other working capital items and other 134 -144
Net cash ow from operating activities -9,013 -13,811
Net nancing of subsidiary 9,10 -43,065 -44,539
Proceeds from lease receivables 15 691 117
Net cash ow from investing activities -42,374 -44,423
Net proceeds from issue of shares 13 86,681 55,720
Payment of lease liabilities 15 -1,100 -856
Net cash ow from nancing activities 85,581 54,865
Net change in cash ow 34,194 -3,369
Cash balance as of 1 January 43,329 46,697
Effects of exchange rate changes on cash and cash equivalents 67 -1,030
Cash balance as of 31 December 77,523 43,329
Comprising of:
Cash and cash equivalents 12 77,523 43,329
58
ANNUAL REPORT 2021
PARENT COMPANY - STATEMENT OF CHANGES IN EQUITY - 1 JANUARY - 31 DECEMBER
ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY
(amounts in NOK 1,000) Notes Share
capital
Share
premium
Other
reserves
Accumulated
losses
Total equity
As of 1 January 2021 75,944 56,633 62,637 - 195,215
Prot (loss) after taxes -19,329 -19,329
Other comprehensive income (loss) - -
Total comprehensive income (loss) - -19,329 - - -19,329
Share issues 13 15,736 75,896 91,632
Share issue costs 13 -4,951 -4,951
Share-based remuneration 13 2,700 2,700
As of 31 December 2021 91,681 108,250 65,337 - 265,268
As of 1 January 2020 42,931 53,278 58,261 - 154,469
Prot (loss) after taxes -20,306 -20,306
Other comprehensive income (loss) - -
Total comprehensive income (loss) - -20,306 - - -20,306
Share issues 13 33,014 33,232 66,246
Share issue costs 13 -9,570 -9,570
Share-based remuneration 13 4,376 4,376
As of 31 December 2020 75,944 56,633 62,637 - 195,215
59
ANNUAL REPORT 2021
NOTE 1 - GENERAL INFORMATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
NEXT Biometrics Group ASA is a holding company and contains the Group Management.
The nancial statements have been prepared in accordance with International Financial Reporting Standards
(“IFRS”) as adopted by the EU, being standards and interpretations issued by the International Accounting
Standards Board (“IASB”), in force at 31 December 2021.
NEXT Biometrics Group ASA’s accounting principles are consistent with the accounting principles for the
Group, as described in note 2 of the consolidated nancial statements. Where the notes for the parent
company are substantially different from the notes for the Group, these are shown below. Otherwise, refer to
the notes to the consolidated nancial statements.
Shares in subsidiaries are accounted for using the cost method. The investments in subsidiaries are valued at
cost unless impairment is required. When the parent has an obligation to settle share-based remuneration to
employees in subsidiaries in its own equity instruments, this is accounted for as an increase in equity and a
corresponding increase in shares in subsidiaries.
Shares in subsidiaries and loans provided to subsidiaries are evaluated at the lower of cost or fair value.
Assessments of impairment on shares in subsidiaries are done by the end of each reporting period. At year-
end 2021, the market value of NEXT Biometrics Group ASA at Oslo Stock Exchange was higher than the book
value of the equity in the parent company. Hence, no indication of impairment.
NOTE 2 – REVENUES
Operating revenues are management fee and royalty charged to the subsidiary NEXT Biometrics AS.
Revenues to NEXT Biometrics AS totals to NOK 8.2 million in 2021 (2020: NOK 8.6 million).
NOTE 3 – PAYROLL EXPENSES
(amounts in NOK 1,000) 2021 2020
Salaries, fees -9,543 -10,277
Share based remuneration (salary part) -5,958 -4,370
Share based remuneration (employer's tax) -4,207 -69
Social security taxes -1,615 -1,518
Pension contribution -432 -438
Other personnel expenses 57 -379
Total payroll expenses -21,698 -17,050
Average numbers of employees 3 4
The parent company, NEXT Biometrics Group ASA, provides a contribution-based pension insurance scheme
for all employees. The scheme satises the mandatory service pension (‘OTP’) in Norway. By the end of 2021,
there were 4 employees in the parent company.
60
ANNUAL REPORT 2021
NOTE 4 – OTHER OPERATING EXPENSES
(amounts in NOK 1,000) 2021 2020
Fees to consultants, lawyers and others -3,948 -5,278
Travel expenses -90 -94
Lease expenses - -13
Other expenses -2,489 -2,551
Total other operating expenses -6,527 -7,935
Fees to consultants, lawyers and others includes remuneration to auditor, see specication in table below:
(amounts in NOK 1,000) 2021 2020
Audit fee -353 -661
Attestation - -
Tax services -241 -40
Non-audit services -22 -
Total audit fees -616 -701
NOTE 5 – FINANCIAL ITEMS
(amounts in NOK 1,000) 2021 2020
Interest income from group companies (see note 10) 527 139
Interest income on sub-leases (see note 15) 62 22
Interest income 581 103
Total nancial income 1,171 265
Interest expenses -57 -5
Interest expenses right-to-use assets (see note 15) -100 -128
Other nancial expenses (leases) -93 -
Total nancial expenses -250 -133
Realized currency gains (losses) 287 -1,048
Change in unrealized currency gains (losses) 509 -1,185
Net currency gains (losses) 796 -2,234
Write-down on investments in subsidiaries (see note 9) - -
Net nancial items 1,717 -2,102
61
ANNUAL REPORT 2021
NOTE 6 – INCOME TAXES
(amounts in NOK 1,000) 2021 2020
Current taxes - -
Change in deferred taxes - -
Total income tax expenses - -
Income tax expense reconciliation:
Prot (loss) before taxes -19,329 -20,306
Expected income tax expenses at Norwegian nominal tax rate (22%) -4,252 -4,467
Tax effect of permanent differences 224 -1,144
Change in deferred tax assets not recognized 4,028 5,611
Actual income tax expenses - -
Effective tax rate 0% 0%
Deferred tax related to the following temporary differences:
(amounts in NOK 1,000) 2021 2020
Property, plant and equipment 333 705
Long term loans - -1,353
Lease receivables -39 1,202
Lease liabilities -1,225 -2,144
Other temporary differences -4,277 -69
Tax losses carried forward -206,986 -192,221
Total temporay differences and tax losses carried forward -212,194 -193,881
Deferred tax assets -46,683 -42,654
Deferred tax assets not recognized 46,683 42,654
Deferred tax assets in the balance sheet - -
Tax losses carried forward has no limitiations in expiry date.
Due to a history of losses, deferred tax assets are not recognized.
The following table illustrates the deferred tax balance recognized in the statement of nancial position:
2021 2020
Deferred tax assets - -
Deferred tax liabilities - -
Net deferred taxes as of 31 December - -
The following table illustrates the deferred tax balance recognized in the statement of nancial position:
(amounts in NOK 1,000) 2021 2020
Prot (loss) before taxes -19,329 -20,306
Permanent differences 1,017 -5,200
Change in temporay differences 3,547 1,580
Basis for current taxes -14,765 -23,926
62
ANNUAL REPORT 2021
NOTE 7 – INTANGIBLE ASSETS
Intangible assets consist mainly of acquisition of right to use the patent and know-how (IP) described as the
NEXT Active Thermal™ Sensing principle.
(amounts in NOK 1,000) 2021 2020
Accumulated cost as of 1 January 7,458 7,458
Additions - -
Disposals at cost - -
Translation differences - -
Accumulated cost as of 31 December 7,458 7,458
Accumulated amortization and impairment losses as of 1 January -3,709 -2,959
Amortization -750 -750
Accumulated amortization and impairment losses of disposed items - -
Translation differences - -
Accumulated amortization and impairment losses as of 31 December -4,459 -3,709
Carrying amount as of 31 December 3,000 3,749
Amortization period in years (straight line) 12 12
The individual intangible asset is not considered as separate cash generating units. Rather, that assets is
evaluated for impairment in combination with other assets. Therefore, impairment test have been done as
part of an overall impairment assessment, and it was concluded that there were no need for impairment on
these assets. See note 9 for further information.
NOTE 8 – PROPERTY, PLANT AND EQUIPMENT
(amounts in NOK 1,000) 2021 2020
Ofce furniture
and equipment
RoU-
assets
Total Ofce furniture
and equipment
RoU-
assets
Total
Accumulated cost as of 1 January 532 801 1,333 532 3,117 3,649
Additions - 16 16 - 795 795
Disposals at cost - - - - -3,111 -3,111
Accumulated cost as of 31 December 532 817 1,349 532 801 1,334
Accumulated depreciation and impairment
losses as of 1 January
-532 -96 -628 -369 -779 -1,148
Depreciation - -389 -389 -163 -615 -778
Impairment losses - - - - -656 -656
Accumulated depreciation and impairment
losses of disposed items
- - - - 1,954 1,954
Accumulated depreciation and
impairment losses as of 31 December
-532 -485 -1,017 -532 -96 -628
Carrying amount as of 31 December - 332 332 - 705 705
Depreciation period in years (straight line) 3 2-4 3 2-4
Additions in 2021 for right-of-use assets (RoU-assets) were mainly related to CPI adjustments of the
existing ofce leases in Oslo. The lease term for the new ofce lease is 2 years. See also note 15 for
further information regarding leases.
63
ANNUAL REPORT 2021
NOTE 9 – SHARES IN SUBSIDIARIES AND
GROUP COMPANIES
The table below shows the subsidiaries in the Group. All subsidiaries are consolidated in the
Group’s nancial statements.
(amounts in NOK 1,000) Ofce Owned directly
by Parent
company
Ownership /
voting interest
in % 2021
Ownership /
voting interest
in % 2020
NEXT Biometrics AS Oslo, Norway x 100% 100%
NEXT Biometrics Inc. Seattle, USA 100% 100%
NEXT Biometrics China Ltd. Shanghai, China 100% 100%
NEXT Biometrics Taiwan Ltd. Taipei, Taiwan 100% 100%
NEXT Biometrics Solutions Pvt. Ltd. Bengaluru, India 100% 100%
NEXT Biometrics s.r.o Prague, Czech Republic 100% 100%
The table below shows the carrying amount of shares in subsidaries for the Parent company as of 31 December:
(amounts in NOK 1,000) 2021 2020
NEXT Biometrics AS 173,870 132,828
Total shares in subsidiaries 173,870 132,828
The change in carrying amount from 31 December 2020 to 31 December 2021, is related to capital
increases of NOK 44.3 million and share-based remuneration to employees in subsidiaries of NOK negative
3.3 million. NEXT Biometrics S.R.O. is an inactive company and is under the process of being liquidated.
The main asset in the parent company is shares in subsidiaries. The market value of equity is considered
to be the closing stock price at Oslo Stock Exchange at year-end 2021, which was NOK 7.89 per share and
equals to a total market value of NOK 723.4 million. The market value of the company was higher than book
value of equity of the parent company as per 31 December 2021, and management assessed that there was
no indication of impairment.
NOTE 10 – LOANS TO GROUP COMPANIES
(amounts in NOK 1,000) 2021 2020
Loan to NEXT Biometrics Taiwan Ltd. 13,669 18,237
Loan to NEXT Biometrics AS 4,351 -
Total loans group companies as of 31 December 18,021 18,237
Loan to NEXT Biometrics Taiwan Ltd. was charged with NIBOR 6 months + 1.0%. Interest for 2021 amounted
to NOK 0.3 million (2020: NOK 0.1 million).
The parent company also had a short-term loan to NEXT Biometrics AS. Interest was charged with NIBOR 6
months + 2.0%. Interest for 2021 amounted to NOK 0.2 million.
64
ANNUAL REPORT 2021
NOTE 11 – ACCOUNTS RECEIVABLES AND OTHER ASSETS
(amounts in NOK 1,000) 2021 2020
Lease receivables (see note 15) - 704
Total other non-current assets - 704
Accounts receivables - gross 307 322
Total accounts receivables 307 322
Receivables NEXT Biometrics AS 63 53
Lease receivables (see note 15) 517 497
Prepayments 470 344
Other receivables 939 729
Total other current assets 1,989 1,623
The carrying amount of accounts receivables and other assets is considered approximates fair value.
Impairment of nancial assets
Expected credit loss for accounts receivables is considered immaterial and is not recognized.
Accounts receivables per 31 December 2021 was not due.
NOTE 12 - CASH AND CASH EQUIVALENTS
(amounts in NOK 1,000) 2021 2020
Cash and cash equivalents - unrestricted 17,307 27,904
Cash and cash equivalents - employees withheld payroll tax deposits 708 421
Cash and cash equivalents - other restricted balances 59,507 15,004
Total cash and cash equivalents 77,523 43,329
The fair value for this class of nancial instruments is assessed to be equal to the nominal amount.
Restricted cash and cash equivalents
Restricted cash and cash equivalents consists of withheld payroll tax deposits for employees, deposits on
escrow accounts and other restricted deposits that needs to be notied one month upfront of withdrawal.
65
ANNUAL REPORT 2021
NOTE 13 - EQUITY
There is one class of shares. All shares have equal rights and are freely negotiable. The share capital
is fully paid in. The par value of the shares is NOK 1 per share.
Number of shares outstanding 2021 2020
Opening balance 75,944,489 42,930,575
Share issue(s) 14,819,897 33,013,914
Exercised incentive share options 916,377 -
Closing balance 91,680,763 75,944,489
For further information regarding share capital, shareholder’s information and share-based options,
please refer to note 19 in group consolidated nancial statement.
NOTE 14 – OTHER LIABILITIES
(amounts in NOK 1,000) Category 2021 2020
Lease liabilities (see note 15) Amortised cost - 1,164
Total other non-current liabilities - 1,164
Accrued salary, vacation pay and board remuneration Amortised cost 1,418 1,353
Lease liabilities (see note 15) Amortised cost 1,225 980
Public duties payable Non-nancial
liabilities
1,690 735
Share options social security tax Non-nancial
liabilities
4,277 69
Unearned revenue Non-nancial
liabilities
59 57
Other current liabilities Amortised cost 562 306
Total other current liabilities 9,231 3,500
For nancial liabilities at amortised cost, the carrying amount is assessed to be a reasonable
approximation of fair value.
66
ANNUAL REPORT 2021
NOTE 15 – LEASES
The table below shows the amounts related to leases recognized in the statement of nancial position:
(amounts in NOK 1,000) 2021 2020
Property - ofce leases (included in "Property, plant and equipment") 332 705
Total right-of-use assets 332 705
Non-current lease receivables (included in "Other non-current assets") - 704
Current lease receivables (included in "Other current assets") 517 497
Total lease receivables 517 1,200
Non-current lease liabilities (included in "Other non-current liabilities") - 1,164
Current lease liabilities (included in "Other current liabilities") 1,225 980
Total lease liabilities 1,225 2,144
See note 8 for more information regarding right-of-use assets.
The ofce lease in Norway was subleased from October 2020. Related right-of-use asset of NOK 1.2 million
was derecognized and lease receivable for the sublease of NOK 1.5 million was recognized in 2020.
Gain on sublease of NOK 0.3 million was included as part of “Other revenues” in 2020.
The table below shows the amounts related to leases recognized in the statement of comprehensive income:
(amounts in NOK 1,000) 2021 2020
Gain on sub-lease (included in "Other revenues") - 347
Depreciation property right-of-use assets (included in "Depreciation and amortization") -389 -615
Impairment losses property right-of-use assets (included in "Impairment losses") - -656
Expenses relating to low-value leases (included in "Other operating expenses") - -13
Expenses relating to short-term leases (included in "Other operating expenses") - -
Interest income (included in "Financial income") 62 22
Interest expenses (included in "Financial expenses") -100 -128
Net expenses related to leases -427 -1,390
The table below shows a reconciliation of the opening and closing balance for lease liabilities arising from
nancing activities:
(amounts in NOK 1,000) 2021 2020
Opening balance 2,144 2,418
Changes from nancing cash ows -1,100 -856
Changes in lease liabilities due to new/amended lease agreements or CPI adjustments 93 768
Other changes 88 -187
Closing balance as of 31 December 1,225 2,144
The total cash outow for leases in 2021 was NOK 1.1 million (2020: NOK 1.0 million).
67
ANNUAL REPORT 2021
The table below shows the maturity prole for the lease liabilities based on
contractual undisocunted payments:
(amounts in NOK 1,000) 2021 2020
Within one year 1,225 1,310
More than 1 year but within 5 years - 1,194
After 5 years - -
Total contractual cash ows related to leases 1,225 2,504
NOTE 16 – RELATED PARTY TRANSACTIONS
The parent company’s signicant shareholders, board members and management, are considered
related parties. For overview of transactions with them, please refer to note 21 in group consolidated
nancial statement.
Companies within the Group are also considered related parties. See note 2 for overview of sales to
group companies and note 10 for overview of loans to group companies.
NOTE 17 - EVENTS OCCURRING AFTER THE
BALANCE SHEET DATE
For an overview of events occured after the balance sheet date, please refer to note 22 in
group consolidated nancial statement.
68
ANNUAL REPORT 20
21
RESPONSIBILITY STATEMENT
We confirm that, to the best of our knowledge, the financial statements for the period from 1 January to 31 December
2021 have been prepared in accordance with IFRS as adopted by the EU, with such additional information as required by
the Norwegian Accounting Act, and give a true and fair view of the Group’s and Parent company’s assets, liabilities,
financial position and result of operations, and that the Board of Directors’ report gives a true and fair view of the
development, performance and financial position of the Group and the Parent company, and includes a description of the
principal risks and uncertainties that they face.
Oslo, 26 April 2022
Petter Fjellstad
Chairman
Live Haukvik
Board member
Peter Heuman
CEO
/Sign//Sign/
/Sign/ /Sign/
Odd Harald Hauge
Board member
Emine Lundkvist
Board member
/Sign/
PricewaterhouseCoopers AS, Dronning Eufemias gate 71, Postboks 748 Sentrum, NO-0106 Oslo
T: 02316, org. no.: 987 009 713 MVA, www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
To the General Meeting of Next Biometrics Group ASA
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Next Biometrics Group ASA, which comprise:
• The financial statements of the parent company Next Biometrics Group ASA (the Company),
which comprise the statement of financial position as at 31 December 2021, the statement of
comprehensive income, statement of changes in equity and statement of cash flow for the year
then ended, and notes to the financial statements, including a summary of significant
accounting policies, and
• The consolidated financial statements of Next Biometrics Group ASA and its subsidiaries (the
Group), which comprise the statement of financial position as at 31 December 2021, the
statement of comprehensive income, statement of changes in equity and statement of cash
flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies.
In our opinion:
• the financial statements comply with applicable statutory requirements,
• the financial statements give a true and fair view of the financial position of the Company as at
31 December 2021, and its financial performance and its cash flows for the year then ended in
accordance with International Financial Reporting Standards as adopted by the EU, and
• the consolidated financial statements give a true and fair view of the financial position of the
Group as at 31 December 2021, and its financial performance and its cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the
EU.
Our opinion is consistent with our additional report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company and the
Group as required by laws and regulations and the International Ethics Standards Board for
Accountants’ International Code of Ethics for Professional Accountants (including International
Independent Auditor's Report - Next Biometrics Group ASA
(2)
Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of the Company for 3 years from the election by the general meeting of the
shareholders on 21 May 2019 for the accounting year 2019.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Key Audit Matter How our audit addressed the Key Audit Matter
Revenue recognition
The Group develops and sells fingerprint
sensors for authentication in the
smartcard, government ID, access control
and notebook markets. The Group’s sales
are either handled through distributors or
sales directly to end customers.
In situations where the group sells
through a distributor it is challenging to
determine based on the terms of the
contracts and the business set up,
whether a distributor is considered an
agent or a principal for accounting
purposes. The complexity of the
arrangements with customers and
distributors lead to an inherent risk of
misinterpretation of the terms, and as a
consequence, a risk that revenue is
recorded in a financial period before
control has passed over to the customer.
Furthermore, there is a risk that revenue
is recorded net of service charge to
distributors if the distributor is
considered an agent rather than a
principal. In such a case revenue and cost
Our audit procedures included among others, a review
of customer contracts and distribution contracts and
assessment of contract terms and business set up to
understand how they relate to IFRS requirements for
revenue recognition. Further, we assessed whether the
distributor, when acting in line with the stipulations in
the agreements, was an agent or a principal and when
control of the goods was transferred from the Group.
To test whether revenue was recognized in the correct
period, we tested transactions in the period close to year
end. We also performed a review of goods shipped to the
distributor acting as agent to the Company and assessed
whether there were goods not transferred to end-
customers as per 31 December 2021. Furthermore, we
evaluated m
anagement’s assessment of probability of
return of goods. Our evaluation was also based on
testing of
credit notes after 31 December 2021 and
analysis of historical returns. Invoiced sales to the
largest customers representing 74% of total revenue in
2021, was tested by obtaining confirmations from
customers.
Independent Auditor's Report - Next Biometrics Group ASA
(3)
of goods sold would both be understated
by the same amount.
We refer to note 2 where management
describes their principle for revenue
recognition.
We read the note relevant to revenue recognition and
found that the note gave an adequate description of
how the Group applies IFRS on revenue recognition.
Other Information
The Board of Directors and the Managing Director (management) are responsible for the information
in the Board of Directors’ report and the other information accompanying the financial statements.
The other information comprises information in the annual report, but does not include the financial
statements and our auditor’s report thereon. Our opinion on the financial statements does not cover
the information in the Board of Directors’ report nor the other information accompanying the financial
statements.
In connection with our audit of the financial statements, our responsibility is to read the Board of
Directors’ report and the other information accompanying the financial statements. The purpose is to
consider if there is material inconsistency between the Board of Directors’ report and the other
information accompanying the financial statements and the financial statements or our knowledge
obtained in the audit, or whether the Board of Directors’ report and the other information
accompanying the financial statements otherwise appears to be materially misstated. We are required
to report if there is a material misstatement in the Board of Directors’ report or the other information
accompanying the financial statements. We have nothing to report in this regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report
• is consistent with the financial statements and
• contains the information required by applicable legal requirements.
Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate
Governance and Corporate Social Responsibility.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with International Financial Reporting Standards as adopted by the EU, and for such
internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Independent Auditor's Report - Next Biometrics Group ASA
(4)
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
• identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's or the Group's internal control.
• evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• conclude on the appropriateness of management’s use of the going concern basis of
accounting, and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company and the
Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company and the Group to cease to
continue as a going concern.
• evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves a true and fair view.
• obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
Independent Auditor's Report - Next Biometrics Group ASA
(5)
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Report on compliance with Regulation on European Single Electronic Format
(ESEF)
Opinion
We have performed an assurance engagement to obtain reasonable assurance that the financial
statements with file name “5967007LIEEXZXK9R405-2021-12-31-en.zip” have been prepared in
accordance with Section 5-5 of the Norwegian Securities Trading Act (Verdipapirhandelloven) and the
accompanying Regulation on European Single Electronic Format (ESEF).
In our opinion, the financial statements have been prepared, in all material respects, in accordance
with the requirements of ESEF.
Management’s Responsibilities
Management is responsible for preparing, tagging and publishing the financial statements in the single
electronic reporting format required in ESEF. This responsibility comprises an adequate process and
the internal control procedures which management determines is necessary for the preparation,
tagging and publication of the financial statements.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
Oslo, 26 April 2022
PricewaterhouseCoopers AS
Anne Kristin Huuse
State Authorised Public Accountant
(This document is signed electronically)
74
ANNUAL REPORT 2021
ALTERNATIVE PERFORMANCE MEASURES
NEXT’s nancial information has been prepared in accordance with International Financial Reporting
Standards (IFRS). In addition, it is management’s intent to provide alternative performance measures that are
regularly reviewed by management to enhance the understanding of NEXT’s performance, but not instead of,
the nancial statements prepared in accordance with IFRS. The alternative performance measures presented
may be determined or calculated differently by other companies.
DEFINITIONS
Most of these key gures are alternative performance measures according to ESMA’s denition. How these
key gures are used is described below, as is how they are calculated. The alternative performance measures
are used to provide a more comprehensive description of how the operational activities are developing, such
as gross margin and Adjusted EBITDA.
REVENUES ADJUSTED FOR UNFULFILLED ORDER BACKLOG
Revenues for the period adjusted for unfullled order backlog is dened as revenues for the year plus
unfullled purchase orders received by the company with requested customer delivery in the same year.
In most cases such unfullled orders were note delivered due to supply chain delays.
GROSS MARGIN / GROSS MARGIN (%)
Gross margin is dened as operating revenue plus other income less cost of goods sold.
Gross margin (%) is expressed as a percentage of operating revenue and other income.
(amounts in NOK 1,000)
2021 2020
Operating revenues 49,788 57,770
Other revenues 967 363
Cost of goods sold -35,531 -48,037
Inventory write-downs -6,251 -1,350
Gross margin 8,973 8,746
Gross margin 8,973 8,746
Divided by operating revenue and other revenues 50,755 58,133
Gross margin (%) 18% 15%
ADJUSTED GROSS MARGIN / ADJUSTED GROSS MARGIN (%)
Adjusted gross margin is dened as operating revenue plus other income less cost of goods sold and
excluding inventory write-downs. Adjusted gross margin (%) is expressed as a percentage of operating
revenue and other income.
(amounts in NOK 1,000)
2021 2020
Operating revenues 49,788 57,770
Other revenues 967 363
Cost of goods sold -35,531 -48,037
Inventory write-downs -6,251 -1,350
Added back inventory write-downs 6,251 1,350
Adjusted gross margin 15,224 10,096
Adjusted gross margin 15,224 10,096
Divided by operating revenue and other revenues 50,755 58,133
Adjusted gross margin (%) 30% 17%
75
ANNUAL REPORT 2021
EBITDA / ADJUSTED EBITDA
EBITDA is earnings before interest, taxes, depreciation, amortization and impairment losses.
Adjusted EBITDA ex options is equal to EBITDA excluding “share-based remuneration” (salary part,
employer’s part and operating part) and inventory write-downs.
(amounts in NOK 1,000)
2021 2020
Operating prot (loss) -58,250 -105,195
Added back depreciation and amortization 7,069 15,279
Added back impairment losses - 6,577
EBITDA -51,182 -83,339
Added back share-based remuneration (salary part) 8,471 3,882
Added back share-based remuneration (employer's tax) 4,495 69
Added back share-based remuneration (operating part) -36 494
Added back inventory write-downs 6,251 1,350
Adjusted EBITDA -32,001 -77,544
COST OF GOODS SOLD (COGS)
Cost of goods sold (COGS) is cost of materials and production service expenses.
INVENTORY WRITE-DOWNS
Inventory write-downs are costs related to excess inventory in relation to raw materials, semi-nished
goods, products and product lines that are discontinued and/or in the process of being discontinued.
OPERATING EXPENSES (OPEX)
Operating expenses (OPEX) consist of salaries and personnel cost and other operating expenses.
OPERATING EXPENSES EX. OPTIONS (OPEX EX. OPTIONS)
Operating expenses excluding options (OPEX ex options) is dened as salaries and personnel cost
and other operating expenses excluding share based renumeration.
(amounts in NOK 1,000)
2021 2020
Operating expenses (OPEX) 60,155 92,085
Deducted share-based remuneration (salary part) -8,471 -3,882
Deducted share-based remuneration (employer's tax) -4,495 -69
Deducted share-based remuneration (operating part) 36 -494
Operating expenses ex. options (OPEX ex. options) 47,225 87,640
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NEXT BIOMETRICS
WWW.NEXTBIOMETRICS.COM
One T
ouch.
One Yo
u.
NEXT Biometrics
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