2024
Annual Report
NEXT BIOMETRICS GROUP ASA
NEXTBIOMETRICS.COM
3 Letter from the CEO
5 NEXT Biometrics at a glance
6 Report from the Board of Directors
13 Corporate Governance Report
24 Corporate Social Responsibility Report
27 Financial Statements Group
32 Notes to financial statement - Group
59 Financial Statements Parent Company
64 Notes to financial statement - Parent
73 Responsibility statement
74 Auditor's report
80 Alternative performance measures
Contents
ANNUAL REPORT 20242
Letter from the CEO
DEAR SHAREHOLDER,
2024 has been an exciting and transformational year.
In our 2023 Annual Report I promised that 2024
would bring growth to our organization, increase
the speed of NEXT’s innovation and continue the
enhancement of our innovative product portfolio.
Despite the challenges we have faced, I am proud
that NEXT has managed to stay on this path.
Integrations in Action – NEXT’s Impact in Society
The fight against the ever-increasing number and
sophistication of security threats aimed at nations,
governments and corporations continues. Millions
of people in Africa and Asia, for example, still cannot
access the basic services and benefits they are
entitled to. Meanwhile, governments are struggling
to efficiently administer to citizens’ needs and
support with services – often due to poverty and
non-existent, or poorly functioning, national ID
systems. For example, India clearly grapples with the
dual challenge of securing a sufficient security level
for its ID program and providing a system that is low
cost. Still, it is evident that providing a high security
level for its ID program is the overarching priority
exemplified by the recent L1 freeze resulting in
heightened security standards and fewer equipment
providers that can satisfy these requirements.
Hence, our purpose of providing secure
authentication through easily integrated
biometrics is more important than ever.
I am immensely proud that our work is also
concretely improving lives, securing societies,
and paving the way for the next generation
of biometric security.
Expanding and Enhancing the Portfolio
In 2024, we continued our focus on research
and development, continuing to lead on
biometric innovation.
We set out to further develop NEXT’s product
portfolio, aligning it with the evolving needs of our
customers and market dynamics. FAP20 has long
been a flagship product for us, highly regarded for
its slim form-factor and compatibility with the leading
digital identity platforms. Recognizing its potential,
this year we focused on enhancing its capabilities.
We have consistently issued updates about FAP20’s
progress during this year. To provide a wider view of
our work, I have highlighted a few achievements on
a more strategic level below.
- In 2024, we signed a Memorandum of
Understanding (MoU) with NEXT’s long-term
partner ACPL to jointly develop a new product
which targets the growing government ID market
and different national ID programs in Asia,
South America, and Africa. The MoU includes
a commitment by ACPL to place purchase orders
amounting to at least 35 MNOK over a period
of 18 months. We aim to have progressed to
launch phase and first delivery of this new
product in late 2025.
- Another important development during 2024 was
securing NEXT’s first design-win in the touchpad
sector. The customer’s end-user product is a
medical keyboard aimed at industrial use, with
NEXT supplying the customer with fingerprint
modules and touchpads for the keyboard.
We aim to deliver this medical keyboard in 2025.
We are also continuing to develop our offering
in the PC and Laptop segments, initially through
adding one of our Partner’s touchpad products
alongside our own. Our vision for the future is
to develop and sell a new fingerprint touchpad
product of our own.
2024: Transformation Achieved
Product milestones, organizational growth, and strong financial performance
– NEXT Biometrics (NEXT) had a transformational 2024. We delivered on our
commitments to customers and on the continued enhancement of our product
portfolio. The results? A remarkable 108% revenue growth, solidified partnerships,
and a strengthened market position, opening up access to the most attractive,
high-tier tenders and business areas.
ANNUAL REPORT 20243
- A new member of the FAP family also emerged
in 2024 as we demonstrated the first engineering
samples of our new FAP30 fingerprint sensor.
We are delighted to see that the market’s
reception has exceeded all expectations.
The FAP30 product is a complementary offering
to the FAP20 solution, functioning as a more
sophisticated, high-tier product targeting the
most demanding environments and use cases.
Typical use cases for FAP30 include government
and national ID programs, access control and
corporate applications. The solution’s strong
Liveness features – the sensor’s ability to
detect real fingers and stop fake fingers from
authenticating – have driven strong interest from
the market. Following product demonstrations, we
have inked a multi-year MoU for the FAP30, valued
at approximately 18 MNOK per year. This MoU is
of strategic importance for NEXT. Not only does
it ensure the market introduction of the FAP30
sensor, but the device will also target attractive
sectors, such as the law enforcement and banking
industries in Europe and South Africa, as well
as the growing MOSIP (Modular Open Source
Identity Platform) market in Asia and Africa.
Navigating Challenging Markets
India and China were our largest geographical
markets in 2024. Our growth in India was
characterized by an increase in the number of
outstanding tenders, especially in the banking and
finance sectors. This momentum was driven by the
generational security upgrade of Aadhaar, triggering
vendors to upgrade devices and verify
the compliance of integrations. NEXT is already
Aadhaar compliant, with the latest L1 certification,
and our strategic focus in India is to further
strengthen our market position to increase
our market share long-term.
Our work in India in 2024 continued in line with our
plans until late Q4, when the UIDAI (Unique Identity
Authority of India) placed a temporary ban on the
enrollment of all new L1 devices. The UIDAI’s ban
followed a security incident at a competitor and did
not concern NEXT’s technology. However, the pause
had a knock-on effect for all vendors with Aadhaar
compliance as it was effective until all vendors have
undergone further testing. This delayed NEXT’s
deliveries and resulted in heavily reduced
revenues in the fourth quarter.
Despite these temporary challenges, we continued
executing on our strategy across India and Asia.
In 2024 we grew our organization, focusing on
our key business areas such as customer support
and presales, where we doubled our headcount.
In China, one short-term goal for 2024 was for
NEXT’s FAP20 sensor to become China-ID certified.
Like India’s Aadhaar system, without this certification
we cannot penetrate the most attractive business
segments. At the start of 2024, NEXT received
its China ID certification and it also expanded its
footprint to the medical insurance, healthcare and
access control markets. The final months of 2024
were slow in China, mostly driven by temporary
delays with a software project integration and overall
slowness in the business climate. In addition to the
market segments mentioned above, NEXT is also
targeting customers in the point of sale and fintech
segments in China. The process of improving NEXT’s
position in the value-chain and transforming from
vendor sensor to a solutions provider continued
through the year.
As I look back upon the year, I am immensely
proud of what we have achieved together at NEXT.
Despite challenging economic conditions, we have
managed to drive impressive growth. And this is
only the beginning – we will continue to lead, deliver
solutions, and pave the way for biometrics in 2025.
Thank you.
Ulf Ritsvall
2024
ANNUAL REPORT 20244
LETTER FROM THE CEO
NEXT Biometrics at a glance
NEXT provides advanced fingerprint sensor technology that delivers uncompromised
security and accuracy for the best possible user experience in the banking & finance,
government ID, access control and laptop & notebook market areas. NEXT Biometrics
Group ASA is headquartered in Oslo, with sales, support, and development operations
in Seattle, Taipei, Tokyo, New Delhi and Shanghai.
Technology & Product Development
NEXT Biometrics is a pioneer in the field of Active
Thermal® technology. NEXT’s unique Active Thermal®
technology offers high-security authentication using
ultra-thin sensors with high image quality and low
energy consumption.
Compared to competing technologies, Active Thermal
sensors offer many advantages: Secure, future-proof,
Cost-effective performance & integration, Excels in
demanding environments.
NEXT’s sensor solutions have steadily gained momentum
in the industry. This is due to their large, thin FAP-
standardized sensing area combined with high image
quality, high security level and low energy consumption.
The products are used in various applications such as
point of sales terminals (POS), readers, Notebooks and
Access solutions.
Its Active Thermal® technologies are certified by entities
including Aadhaar, ChinaID, FBI-PIV, MOSIP and NIBSS,
and has been implemented in countries including
Bangladesh, China, Ghana, India, Malaysia, Pakistan,
U.S. and Vietnam.
In 2024, we continued our focus on research and
development as part of our technology leadership. We set
out to further develop NEXT’s product portfolio, aligning
it with the evolving needs of our customers. Our FAP20
has long been a flagship product, highly regarded for its
slim form-factor and compatibility with the leading digital
identity platforms. Recognizing its potential, during the
year we focused on enhancing its capabilities.
In addition, the Group has a technology roadmap that
includes the development of a FAP30 sensor product
targeted at high-end governmental ID applications that is
planned to be launched in 2025. Moreover, the roadmap
also contains a new product that targets the smartphone
market. The planned smartphone product includes
fingerprint authentication on the full display screen
of a phone.
Sales & Marketing
The Group has a dedicated global sales force that has
established relationships with stakeholders in different
ecosystems active in focused market segments.
The company has a diversified customer base, which
includes Biometric technology companies, POS
manufacturers, biometric HW manufacturers and
Government ID providers.
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 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.
ANNUAL REPORT 20245
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
Stortorvet 7, 0155 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 areas of
Government ID, Access control, Laptop&Notebook
and Banking&Finance.
NEXT’s fingerprint sensors are unique, using
thermal conductivity to read the fingerprint image,
as opposed to capacitive, ultra sonic or optical
sensing. This patented sensing principle allows
designs uniquely compatible with low temperature
polysilicon production processes (“LTPS”) used in
high-end displays. This enables significantly lower
production costs for the Group’s fingerprint sensors
compared to competing sensor technologies. The
Group has developed and markets a portfolio of
fingerprint sensors, sensor modules and readers,
which may be incorporated into a wide range of
products and solutions.
The Group has four wholly owned subsidiaries:
NEXT Biometrics AS (Norway) and its subsidiaries
NEXT Biometrics Inc. (Seattle, USA), NEXT
Biometrics Taiwan Ltd. (Taipei, Taiwan) and NEXT
Biometrics Solutions India Pvt. Ltd. (Bengaluru,
India). In addition, the group has control over and
a 50% shareholding in NEXT Biometrics China Ltd.
(Shanghai, China). In 2024 the Group sold 50% of
the shares in NEXT Biometrics China Ltd. (NEXT
China) at zero cost to the external party. A certain
part of shares in NEXT China is transferred back
to NEXT Biometrics AS at zero cost as a part of the
agreement with the external party. Hence, there is no
minority interest in relation to NEXT China. See
note 16 for further details. All five subsidiaries in the
Group are consolidated into Group accounts.
NEXT Biometrics Group ASA’s shares are listed on
the Oslo Stock Exchange.
Highlights 2024
Key 2024 developments in NEXT:
- Revenues for 2024 of NOK 71.6 million compared to NOK 34.4 million
in 2023
- Gross profit of 55% for 2024 compared to 21% in 2023
- Adjusted gross profit
1
of 55% for 2024 compared to 33% in 2023
- Adjusted EBITDA
1
of NOK -35.1 million in 2024 compared to
NOK -43.7 million in 2023
- 18 new design-wins in 2024 and accumulated 64 design-wins as per
December 2024, which will contribute to future revenues
- Break-through in China with launch of new China ID product and
FAP30 engineering samples demonstrated to partners and customers
1 Please see section Alternative Performance measures on page 80 for further details
ANNUAL REPORT 20246
Business overview
Biometric fingerprint sensing technology continues
to gain traction across the world. Biometric
technology is used in Laptop and Governmental
projects and businesses have deployed 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.
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 Banking &
Finance, Government ID, Access control, Laptops,
and POS solutions. 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. As per end of 2024,
NEXT has biometrics distributors with presence
in the Americas, Asia, Europe and Africa. NEXT is
represented in major large and growing biometric
markets with high-security needs and extensive
use of biometrics.
In India, the Aadhaar program has registered more
than one billion people fingerprints. This provides
access to different governmental services and
benefit systems. NEXT’s local partners will certify
their products, which include NEXT’s FAP20 sensors.
Hence, the Indian authorities' generational upgrade
of India’s national Aadhaar program and our local
partners are expected to trigger strong demand for
NEXT sensors in 2025 and later years.
In China, security remains a strong market driver
and being the world’s most biometrics enabled
country, the interest in our FAP20 sensor, including
our liveness feature, has been strong. Early 2024,
we announced that one of our other partners got
awarded the China ID certification for the FAP20
sensor and NEXT has already received multiple
orders in China, which were shipped during the year.
In the Americas, NEXT has two distributors covering
US, Mexico and Brazil. The focus in these markets
is to replace current installed base of bulky and
expensive optical fingerprint products.
In the Laptop 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 the FAP20 higher security
implementations.
The Group is working on a new FAP30 product,
which will offer outstanding image quality and
built-in anti-spoofing, which provides unmatched
capability to detect a live finger. The larger-sized
FAP30 is naturally also an important feature that
ensures a more complete picture of the fingerprint.
The FAP30 sensor can easily be fitted into and
integrated into various system requirements
and surroundings. The Group has presented
product samples to interested customers and the
customer feedback has been very positive and the
addressable market is sizeable. The FAP30 product
is expected to be launched in 2025.
Sustainability and transparency
NEXT meets the authorities' requirements for
sustainability reporting and further information
can be found in Corporate Social Responsibility
Report (see page 24). Reporting required by the
Norwegian Transparency Act for the 2023 financial
year was published in the 2023 financial reporting
section on the company’s website in June 2024
(www.nextbiometrics.com/investors/financial_reports_
presentations/). Transparency act reporting for 2024
will be published at the latest on 30 June 2025 at
the same web site location.
ANNUAL REPORT 20247
REPORT FROM THE BOARD OF DIRECTORS
Financial summary – The Group
Comprehensive income
Revenues were NOK 71.6 million in 2024 compared
to NOK 34.4 million in 2023.
Gross profit was NOK 39.2 million (55%) in 2024
compared to a gross profit of NOK 7.4 million
(21%) in 2023.
Adjusted Gross profit was NOK 39.5 million (55%)
in 2024 compared to an adjusted gross profit of
NOK 11.4 million (33%) in 2023.
Payroll expenses were NOK 32.8 million in 2024,
compared to NOK 42.4 million in 2023. Average
number of employees were 23 in 2024 compared to
24 employees in 2023. The Group had 24 employees
at the end of 2024, compared to 23 employees at the
end of 2023. Share-based remuneration, including
related accrued social security tax, included in payroll
expenses was, NOK 1.1 million in 2024, compared
to NOK 10.3 million in 2023. The decrease in share
based renumeration cost in 2024 is due to the lower
number of options awarded in 2024 and negative
social security remuneration cost resulting from the
decrease in the company’s stock price and lowered
social security cost for future periods from 19.1% to
14.1%. Research and development (R&D) expenses
included in payroll expenses were NOK 6.5 million in
2024 compared to NOK 6.4 million in 2023.
Other operating expenses were NOK 47.0 million in
2024, compared to NOK 23.2 million in 2023. R&D
expenses included in other operating expenses were
NOK 4.2 million in 2024, compared to NOK 2.6 million
in 2023. Moreover, allowance for expected credit loss
was NOK 7.3 million in 2024, compared to NOK 0.5
million in 2023. See note 13 for more details.
Total R&D expenses, included in both payroll and
other operating expenses, were NOK 10.7 million in
2024, compared to NOK 9.0 million in 2023.
The Group’s expenses in 2024 were mainly related
to developing the FAP30 product and fingerprint
sensor improvements.
Depreciation, amortization and impairment were NOK
5.4 million in 2024, compared to NOK 8.2 million in
2023. The decrease in 2024 is due to the impairment
losses booked in 2023 and assets reaching the end of
their depreciable life.
Net financial items amounted to a net gain of NOK
1.0 million in 2024, compared to a net gain of NOK
0.9 million in 2023. The gains in 2024 were related to
currency gains and interest income.
Income tax cost was NOK 0.2 million in 2024,
compared to NOK 0.2 million in 2023.
EBITDA for the Group was negative NOK 40.7 million in
2024, compared to negative NOK 58.2 million in 2023.
Adjusted EBITDA for the Group was negative NOK
35.1 million in 2024, compared to negative NOK 43.7
million in 2023.
Loss after taxes for the Group was NOK 45.2 million
in 2024, compared to NOK 65.7 million in 2023.
In the outlook section of NEXT’s 2023 annual report
it was stated that the company expected increased
number of design-wins, increased revenues, and
improved profitability. During 2024 NEXT increased
its number of design-wins in line with expectations.
Revenues in 2024 increased by 108%. Still, the
revenue growth was lower than the stated growth
target in the 2023 annual report due to project
and governmental approval delays relating to key
customer projects in India and China.
ANNUAL REPORT 20248
REPORT FROM THE BOARD OF DIRECTORS
Changes in accounting policies
The accounting policies applied in preparation of the
financial statements for 2024 are consistent with those
applied in the preparation of Annual Report for 2023.
Financial position and cash
Total assets as of 31 December 2024 amounted to
NOK 152.4 million, compared to NOK 118.9 million as of
31 December 2023.
Total equity was NOK 118.9 million at the end of 2024
compared to NOK 94.4 million at the end of 2023.
The Group had non-current liabilities of NOK 2.2
million and current liabilities of NOK 31.3 million at
the end of 2024, compared to non-current liabilities
of NOK 0.2 million and current liabilities of NOK 24.4
million at the end of 2023.
Cash amounted to NOK 62.9 million at the end
of 2024 compared to NOK 67.8 million at the end
of 2023.
The Group had gross account receivables of NOK
67.4 million at the end of 2024 compared to NOK 15.3
million at the end of 2023. Account receivables net of
credit loss allowance provisions was NOK 56.8 million
as of 31 December 2024 (NOK 12.3 million in 2023).
Cash flow
Net cash flow from operating activities was negative
with NOK 61.7 million in 2024 compared to negative
NOK 56.6 million in 2023. The loss after taxes for the
Group was improved by NOK 20.5 million from 2023
to 2024. Still, the lowered loss in 2024 compared to
2023 was offset by net cash flow from working capital
changes of negative NOK 24.9 million in 2024. Hence,
the decline in cash flow in 2024 relative to 2023 is
mainly due to increased working capital partially
offset by lowered loss after taxes in 2024.
Net cash flow from investing activities was negative
NOK 0.6 million in 2023 compared to negative NOK
0.0 million in 2023.
Net cash flow from financing activities was positive
NOK 58.1 million in 2024 as a result of the share issue
that was performed in October 2024. Net cash flow
from financing activities was positive NOK 54.9
million in 2023.
ANNUAL REPORT 20249
REPORT FROM THE BOARD OF DIRECTORS
Financial summary – The Parent Company
Comprehensive income
Total revenues for the parent company were NOK 9.5
million in 2024 compared to NOK 8.9 million in 2023.
The revenues were mainly resulting from management
fees and royalties charged to the subsidiary NEXT
Biometrics AS.
Payroll expenses including share-based remuneration
for the parent company were NOK 11.8 million in 2024,
compared to NOK 21.1 million in 2023. The decrease
is mainly resulting from lower number of options
awarded in 2024 reducing share-based remuneration
and a reduction in the NEXT share price and lowered
social security cost for future periods from 19.1%
to 14.1%, which triggered negative share-based
remuneration social security costs in 2024. There were
4 employees in the parent company at year-end 2024,
compared to 4 employees at the end of 2023.
Other operating expenses for the parent company
was NOK 7.7 million in 2024 compared to NOK 6.7
million in 2023.
Depreciation and amortization for the parent company
was NOK 1.4 million in 2024 compared to NOK 1.3
million in 2023.
Net financial income was NOK 1.8 million in 2024
compared to a net financial income of NOK 1.9
million in 2023.
The parent company had a loss before taxes in
2024 and 2023. Hence, no payable taxes incurred.
No deferred tax assets have been recognized
during 2024 and 2023.
Loss after taxes for 2024 was NOK 9.6 million
compared to NOK 18.2 million in 2023.
Financial position and cash
Total assets as of 31 December 2024 amounted to
NOK 369.5 million, compared to NOK 318.5 million
as of 31 December 2023.
The parent company had NOK 7.6 million in current
liabilities at the end of 2024, compared to NOK 10.6
million at the end of 2023.
Cash amounted to NOK 47.9 million at the end of 2024
compared to NOK 40.1 million at the end of 2023.
Cash flow
Net cash flow from operating activities was negative
NOK 7.7 million in 2024, compared to negative NOK
10.7 million in 2023. Net cash flow from investments
was negative NOK 44.0 million in 2024 compared
to negative NOK 43.2 million in 2023. Net cash flow
from financing was positive NOK 59.5 million in 2024
compared to positive NOK 56.5 million in 2023.
Equity and allocation of profit (loss) after taxes
Equity for the parent company was NOK 361.7 million
at the end of 2024 compared to NOK 307.9 million at
the end of 2023.
The Board of Directors proposes that the loss after
taxes of the parent company of NOK 18.2 million to
be booked to the share premium account.
ANNUAL REPORT 202410
REPORT FROM THE BOARD OF DIRECTORS
Next shares and share capital
NEXT ASA’s shares are listed at Oslo Stock
Exchange’s main list with ticker NEXT. The 2024 year-
end closing price was NOK 6.88, down from NOK 7.1
at the end of 2023. During 2024, the shares traded
in the range of NOK 6.4 to NOK 9.0.
The issued share capital of the parent company
at the end of 2024 amounted to NOK 115.2 million
consisting of 115,154,535 ordinary shares, each share
having a par value of NOK 1. At the end of 2024,
there were a total of 3,391 registered shareholder
accounts, compared to 4,079 at the end of 2023.
NEXT raised gross proceeds of NOK 40.15 million in
a private placement that was completed in October
2024. NEXT also issued new shares in relation to
exercise of employee share options in 2024, which
resulted in total gross proceeds of NOK 22.29 million.
Please see note 18 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 2024, NEXT has 10,020,579
share options outstanding. Please see note 18
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.
NEXT’s 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 2024.
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. 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 accounts receivables
increased during 2024 as a result of increased
revenues and slow collection of account receivables.
Moreover, the group increased its allowance for
expected credit loss in 2024. Please see note 13 and
20 for further details. The majority of the Group’s
receivables are currently not credit insured. Late
2024, the Group entered into a credit insurance
policy with a major insurance company whereby
account receivables credit losses for qualified
credits will be covered within certain limits.
Liability insurance
The Group has directors and officer’s liability
insurance with a NOK 50 million total coverage, and
it covers legal costs, emergency costs and multiple
other types of contingency costs.
Employees
At the end of 2024, the Group had 24 employees
(2023: 23), of which 6 are women (2023: 5).
Additionally, the Group has individual technical/
scientific specialists working at its premises on a
contract basis. The average female proportion of
group employees was 25% in 2024 (2023: 20.7%).
The parent company had 4 employees by the
end of 2024. There were 3 male employees and 1
female employee at year-end. The average female
proportion of parent company employees was 25%
in 2024 (2023: 21%). 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 2024. The average sickness
absence rate in the parent company was 1.1% in 2024
compared to 0% in 2023.
ANNUAL REPORT 202411
REPORT FROM THE BOARD OF DIRECTORS
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 separate annual report
section “Corporate Governance Report” for more
information.
Social responsibility, environment and
climate impact
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 on social responsibilities,
environment, climate impact and working
environment. The Group does not own or
operate manufacturing facilities. Manufacturing
is done through third parties. Climate impact and
potential risk is low in the short to medium term.
Please see note 21 for further details on climate risks.
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 2024 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 2024
or the value of the Group or the parent company’s
assets and liabilities as of 31 December 2024.
Outlook
The Board of Directors wishes to highlight that
any forward-looking statements and assessments
are subject to substantial uncertainty, and actual
developments may differ materially from current
expectations.
Based on signed orders and current market visibility,
NEXT is targeting a revenue of NOK 180–200 million
for 2025. We expect continued growth for our flagship
sensor FAP20 in India and China. Moreover, with
NEXT’s new FAP30 sensor launching in the second
half of 2025 we expect this to provide significant
additional revenue growth. As a result, NEXT expects
the majority of its 2025 revenue in the second half of
the year.
We expect the overall business environment and
momentum in our key markets, such as China, to be
slow in the first half of the year. We expect business
conditions to pick-up pace, however, and be strong
in the second half of the year. Another positive
development is the reopening of the India Aadhaar
market, with continued enrollment of L1 devices
expected to contribute a significant part of NEXT’s
revenues in 2025.
Within R&D, NEXT recently presented a new project
which uses NEXT Active Thermal technology to
enable fingerprint authentication on a full display
screen. This is an innovation that many market
segments like smartphone and access markets have
attempted to achieve for a long time without success.
This project will benefit both our existing product
portfolio, in addition to enabling us to target a vast new
market. The first phase will focus on production of a
prototype, and we will then engage end customers
to sign partner agreements. Following NEXT’s R&D
announcement of the project, external parties have
approached us to discuss opportunities for co-
operation. Multiple non-disclosure agreements have
been signed, one of which is with a major global
technology company.
Moving into 2025, NEXT is strategically positioned with
a compelling product lineup, established partnerships,
and a solid financial foundation. This paves the way for
continued revenue growth and strong cash flow.
Odd-Harald Hauge
Chair
/Sign/ /Sign/
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Petter Fjellstad
Board member
Ulf Ritsvall
CEO
Emine Lundkvist
Board member
Siri Gomnæs Børsum
Board member
The board of directors of NEXT
Biometrics Group ASA
Oslo, 10 April 2025
ANNUAL REPORT 202412
REPORT FROM THE BOARD OF DIRECTORS
Corporate Governance Report
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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 a
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/.
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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.
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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.
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.
ANNUAL REPORT 202413
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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.
Authorizations to the board of directors
The annual general meeting, held on 16 May 2024,
gave the board authorization to increase the
Company’s share capital by up to NOK 20,889,000
to enable the Company to conduct share issues
in an effective manner. The board of directors was
also granted authorization to deviate from the
shareholders’ 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 11,980,658, out
of which NOK 1,660,000 can be used to issue shares
to board members under options granted to board
members in 2019, 2020 and 2022. 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 2025 general meeting or 30
June 2025, whichever comes first.
As of 31 December 2024, 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 its own
shares. Any future authorizations given will be limited
in time until the next general meeting, in accordance
with the Code.
2024
ANNUAL REPORT 202414
CORPORATE GOVERNANCE REPORT
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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 for such decisions
shall be publicly disclosed in a stock exchange
announcement issued in connection with the
increase in share capital.
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 to be related parties.
All transactions with related parties will be carried
out in accordance with the arm’s length principle.
All transactions with related parties that are not
immaterial will be publicly disclosed by NEXT. In
the event that such a transaction occurs, 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
Norwegian Public Limited 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 2024 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.
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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.
ANNUAL REPORT 202415
CORPORATE GOVERNANCE REPORT
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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 in 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 chair 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 who are unable to attend the general
meeting in person will be given the opportunity to,
and encouraged to, vote by proxy or through written
voting in a period prior to the general meeting. The
Company will in this respect provide information
on the procedure for representation at the general
meeting and prepare a proxy form/written voting
form that makes voting on each individual matter
possible. The Company will nominate a person to
act as a proxy for the shareholders.
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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
chair, 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 of directors and executive
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 16 May 2024 for the
period until the annual general meeting in 2025.
All of the members of the nomination committee
have been selected to consider the interests of
shareholders in general and are independent from
both the Company’s executive management and the
Company’s board of directors. As of 31 December
2024, the nomination committee consisted of Jon
Frode Vaksvik (chair), 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
gathers input from 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.
ANNUAL REPORT 202416
CORPORATE GOVERNANCE REPORT
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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 three to nine
board members elected by the general meeting.
The chair of the board is elected by the general
meeting and among the Company’s board.
NEXT emphasizes 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 2024, the board of directors
comprises the following four members:
- Odd Harald Hauge
- Petter Fjellstad
- Emine Lundkvist
- Siri Gomnæs Børsum
All of the abovementioned board members are
elected for the period until the annual general
meeting in 2025.
A presentation of the board can be found on the
Company’s website.
The board’s independence
NEXT believes that it is in the best interests 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 chair 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 chair of the
board is elected by the general meeting.
It is the Company’s view that directors who have
developed a valuable insight into the Company
and its operations over time make important
contributions to the board. On this background,
the Company does not wish to establish time limits
in relation to the term of office for board members.
However, directors are elected each year.
To ensure that the board continues to generate new
ideas and operate effectively, the board evaluates
and assesses its performance on an annual basis.
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.
ANNUAL REPORT 202417
CORPORATE GOVERNANCE REPORT
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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 its administration
and 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.
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 5
November 2024.
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 5
November 2024.
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 section 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 that
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 major important
cases, where the decisions of the board of directors
cannot be awaited without serious detriment to the
Company. The board of directors must be notified of
the decision as soon as possible.
ANNUAL REPORT 202418
CORPORATE GOVERNANCE REPORT
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 annual 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 chair 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
on by the board. The CEO shall, in consultation
with the chair 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
its decision.
The CEO has a right and a duty to attend the board’s
deliberation of matters, unless otherwise determined
by the board with respect to each individual
matter. The CEO is not entitled to cast votes. Other
participants are called in as needed.
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
section 6-27 of the Norwegian Public Limited
Companies Act.
Chair of the board of directors
The chair of the board of directors ensures that
the board of directors operates well and carries
out its duties. In addition, the chair 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 chair, 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.
ANNUAL REPORT 202419
CORPORATE GOVERNANCE REPORT
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
in 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 consists of Petter Fjellstad
(Chair) and Emine Lundkvist.
Remuneration Committee
The remuneration committee draws up guidelines
and proposals for senior executive remuneration.
The Company’s remuneration policy, including
remuneration to 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 remuneration committee consists of Odd Harald
Hauge (Chair) and Siri Gomnæs Børsum.
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.
ANNUAL REPORT 202420
CORPORATE GOVERNANCE REPORT
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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, who continuously strive to improve
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 lead 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.
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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 prepares the
proposed remuneration to the general meeting.
The remuneration of the board of directors is not
linked to the Company’s performance. The current
board members were granted share options in 2019,
2020 and 2022, which were approved at the annual
general meetings held in 2019, 2020 and 2022.
Moreover, the board members’ options awarded
in 2020 were extended to June 2026 at the 2023
annual general meeting. The Company deviates from
the Code by granting options to board members.
For more details on the remuneration to the board,
please refer to note 19 in the annual financial
statements. Except for the one deviation above,
the Company does not deviate from the Code in
relation to remuneration of the board of directors.
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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. The general
meeting approved the remuneration guidelines
in May 2024. The guidelines are available on the
Company's website.
The main principle in the Company’s policy for
remuneration is that the leading employees should
be offered competitive terms to attract and retain
the competence that the Company needs.
The general meeting has approved the Company’s
share option programs.
For details regarding remuneration to the executive
management, see note 19 in the annual financial
statements, and for details regarding share option
arrangements, see note 18 in the annual financial
statements.
The Company deviates from the Code by not having
a cap on the performance-related remuneration
ANNUAL REPORT 202421
CORPORATE GOVERNANCE REPORT
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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 investor relations and
is the main contact person of the Company for the
capital market. 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 webcasts, is available on www.
nextbiometrics.com/investors
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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 2024.
There are no defense 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.
16
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AUDITOR
The Company’s auditor is elected by the general
meeting and is fully independent from the Company.
From 2024, RSM Norge 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 19 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.
ANNUAL REPORT 202422
CORPORATE GOVERNANCE REPORT
§ 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 115,154,535
divided into 115,154,535, 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.
ARTICLES OF ASSOCIATION FOR NEXT BIOMETRICS GROUP ASA
Per 31 December 2024
ANNUAL REPORT 202423
CORPORATE GOVERNANCE REPORT
Corporate Social
Responsibility Report
This review of NEXT Biometrics Group ASA ("NEXT"
or 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 were last approved by the board on 5
November 2024 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.
NEXT has also established a Supplier Code of
Conduct that requires NEXT Biometrics Group
suppliers to conduct business in a responsible
manner, based on the duty to respect human
rights, labor rights, protect health, safety and the
environment, prevent corruption and in general,
apply sound business practices. NEXT’s Supplier
Code of Conduct was last updated and approved
by the Board on 5 November 2024.
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
Guidelines 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.
ANNUAL REPORT 202424
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.
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 Group’s employees are
encouraged to report any incident of discrimination
to their nearest leader or through the applicable
whistle-blow channels through our HR department.
NEXT’s 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 in the
group has suffered work-related injury resulting
in sick leave. No accidents nor incidents involving
the assets of the Group have occurred. 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 2024. The average sickness absence rate in
the parent company was 1.1% in 2024 compared to
0% in 2023.
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 24 employees in the NEXT group at the
end of 2024, 6 are women. At year-end 2024, 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 environmentally 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 damage
caused by climate change. Still, NEXT is likely to
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.
25
CORPORATE SOCIAL RESPONSIBILITY REPORT
ANNUAL REPORT 2024
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 focus on these guidelines and
incorporate them into our company culture. The
Group will do this by updating and educating the
organization.
2024
26
CORPORATE SOCIAL RESPONSIBILITY REPORT
ANNUAL REPORT 2024
Financial
Statements
Group
ANNUAL REPORT 202427
The consolidated financial statements should be read in conjunction with the accompanying notes.
The Group has changed selected 2023 comparatives in order for the financial statements to be more in line with accounting
practice. See note 24 for details.
Group
|
Consolidated statement of comprehensive income 1 January - 31 December
(amounts in NOK 1,000) Notes 2024 2023
Revenues 3,24 71,574 34,383
Cost of materials 12,24 -32,416 -27,004
Gross profit 39,158 7,379
Payroll expenses 4,18 -32,791 -42,370
Other operating expenses 5,6 -47,041 -23,218
Depreciation and amortization 10,11 -5,394 -7,068
Impairment losses 10,11 - -1,139
Total operating expenses -85,227 -73,795
Operating profit (loss) -46,068 -66,416
Financial income 7 1,482 1,054
Financial expenses 7 -119 -62
Net currency gains (losses) 7 -332 -74
Net financial items 1,030 918
Profit (loss) before taxes –45,038 -65,498
Income tax expenses 8 -197 -234
Profit (loss) after taxes -45,235 -65,732
Earnings per share (in NOK)
Basic and diluted 9 -0.42 -0.69
Other comprehensive income (loss) that may be reclassified:
Translation differences on net investments in foreign operations 6,369 1,170
Other comprehensive income (loss) 6,369 1,170
Total comprehensive income (loss) -38,866 -64,562
Profit (loss) after taxes attributable to:
Owners of the parent company -45,235 -65,732
Total comprehensive income (loss) attributable to:
Owners of the parent company -38,866 -64,562
ANNUAL REPORT 202428
FINANCIAL STATEMENTS GROUP
Odd-Harald Hauge
Chair
/Sign/ /Sign/
/Sign/
/Sign/
/Sign/
Petter Fjellstad
Board member
Ulf Ritsvall
CEO
Emine Lundkvist
Board member
Siri Gomnæs Børsum
Board member
The consolidated financial statements should be read in conjunction with the accompanying notes.
Group
|
Consolidated statement of financial position As of 31 December
(amounts in NOK 1,000) Notes 2024 2023
Intangible assets 10 825 1,530
Property, plant and equipment 11 7,094 6,738
Total non-current assets 7,919 8,268
Inventories 12 17,672 23,126
Accounts receivables 13 56,754 12,303
Other current assets 14 7,138 7,451
Cash 15 62,907 67,753
Total current assets 144,471 110,632
Total assets 152,390 118,900
Share capital 18 115,155 104,025
Share premium 70,268 30,858
Other reserves 35,208 31,965
Accumulated losses -101,775 -72,498
Total equity 118,857 94,351
Non-current lease liabilities 17 2,244 194
Total non-current liabilities 2,244 194
Accounts payables 10,910 5,984
Income tax payables 8 92 33
Current lease liabilities 17 1,843 1,745
Other current liabilities 16 18,444 16,594
Total current liabilities 31,289 24,355
Total equity and liabilities 152,390 118,900
The board of directors of
NEXT Biometrics Group ASA
Oslo, 10 April 2025
ANNUAL REPORT 202429
FINANCIAL STATEMENTS GROUP
The consolidated financial statements should be read in conjunction with the accompanying notes.
Group
|
Consolidated statement of cash flow 1 January - 31 December
(amounts in NOK 1,000) Notes 2024 2023
Profit (loss) before taxes –45,038 -65,498
Share based remuneration 4,5 3,243 5,896
Share based payments social security expense 4 -1,637 4,611
Income taxes paid 8 - -26
Depreciation and amortization 10,11 5,394 7,068
Impairment losses 10,11 - 1,139
Change in inventories 12 5,817 3,852
Change in accounts receivables 13 -44,452 -6,042
Change in accounts payables 4,926 -1,792
Change in other working capital items and other 8,807 -6,590
Interests received 7 1,400 1,054
Interests paid 7 -141 -303
Net cash flow from operating activities -61,681 -56,630
Purchase of property, plant and equipment and intangible assets 10,11 -597 -13
Net cash flow from investing activities -597 -13
Net proceeds from issue of shares 18 60,129 57,016
Payment of lease liabilities 17 -2,017 -2,078
Net cash flow from financing activities 58,111 54,938
Net change in cash flow -4,167 -1,705
Cash balance as of 1 January 67,753 69,302
Effects of exchange rate changes on cash -679 155
Cash balance as of 31 December 62,907 67,753
Comprising of:
Cash 15 62,907 67,753
ANNUAL REPORT 202430
FINANCIAL STATEMENTS GROUP
The consolidated financial statements should be read in conjunction with the accompanying notes
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.
Group
|
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 2024 104,025 30,858 31,965 -72,498 94,351
Profit (loss) after taxes -45,235 -45,235
Other comprehensive income (loss) 6,369 6,369
Total comprehensive income (loss) - - - -38,866 -38,866
Share issues 19 11,130 51,313 62,442
Share issue costs 19 -2,314 -2,314
Share based remuneration 19 3,243 3,243
Transfer of loss to share premium -9,589 9,589 -
As of 31 December 2024 115,155 70,268 35,208 -101,775 118,857
As of 1 January 2023 91,981 4,049 26,069 -26,099 96,000
Profit (loss) after taxes -65,732 -65,732
Other comprehensive income (loss) 1,170 1,170
Total comprehensive income (loss) - - - -64,562 -64,562
Share issues 19 12,044 48,106 60,150
Share issue costs 19 -3,134 -3,134
Share based remuneration 19 5,896 5,896
Transfer of loss to share premium -18,163 18,163 -
As of 31 December 2023 104,025 30,858 31,965 -72,498 94,351
ANNUAL REPORT 202431
FINANCIAL STATEMENTS GROUP
Notes to financial
statement - Group
NEXT Biometrics Group ASA (“Parent company”)
is a public limited liability company, incorporated
and domiciled in Norway, with headquarter in
Stortorvet 7, 0155 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 thesmart card, government ID, access control
and notebook markets.
The Group has five operating subsidiaries. The
following four are owned 100%: NEXT Biometrics AS
(Norway) and its subsidiaries NEXT Biometrics Inc.
(Seattle, USA), NEXT Biometrics Taiwan Ltd. (Taipei,
Taiwan) and NEXT Biometrics Solutions India Pvt.
Ltd. (Bengaluru, India). NEXT Biometrics China Ltd.
(Shanghai, China) is a company that is controlled
by the Group and that NEXT Biometrics AS owns
50% of the share capital as per 31/12/2024 following
a transaction where the Group sold 50% of the
shares in NEXT Biometrics China Ltd. (NEXT China)
in 2024 for zero cost. The Group has an obligation
to repurchase 50% as a part of an agreement with
an external party. Hence, the Group controls the
subsidiary and will acquire the remaining shares in
the entity at zero cost. Consequently, the subsidiary
is fully consolidated, and no minority interest
is recorded in the balance sheet of the Group.
Please see note 16 for further details regarding this
arrangement. All of the five Group subsidiaries are
consolidated into the Group financial accounts.
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 financial statements have been approved for
issuance by the Board of Directors on 10 April 2025
and is subject to approval by the Annual General
Meeting on 9 May 2025.
Changes in accounting policies
The accounting policies applied in preparation of the
financial statements for the year ended 31 December
2024 are consistent with those applied in the
preparation of the prior year financial statements.
New and amended standards and interpretations
adopted by the Group as of 1 January 2024.
The new amendments to IAS 1 concerning new
disclosure requirements relating to liabilities with
covenants and convertible debt is not applicable
for the group.
There are no new amendments applicable for the
annual reporting period commencing 1 January 2024
that have been adopted by Next Biometrics Group.
New and amended standards and interpretations
not yet adopted.
IFRS 18 Presentation and Disclosure in Financial
Statements is effective for periods beginning on
or after 1 January 2027.
IFRS 18 will replace IAS 1 Presentation of Financial
Statements, and introduce new requirements to
help achieve comparability across companies.
Although IFRS 18 will not affect the recognition or
measurement of items in the financial statements,
changes are expected to be made to the Group’s
presentation of the Consolidated statement of
comprehensive income.
Management is currently assessing the detailed
implications of applying the new standard to the
Group’s consolidated financial statements.
NOTE 1
|
GENERAL INFORMATION
ANNUAL REPORT 202432 ANNUAL REPORT 2024
Basis of preparation
These financial statements have been prepared
in accordance with IFRS® Accounting Standards
as adopted by the EU per 31 December 2024.
Going concern
The Board of Directors confirms that the financial
statements have been prepared under the
assumption of going concern.
Currency
These financial statements are presented in
Norwegian kroner, which is also the Parent
company’s functional currency. Except for
Next Biometrics AS, which is based in Norway
and that uses USD as its functional currency,
each entity within the Group utilizes the local
currency of its domicile and operational base
as its functional currency.
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 profit and loss.
Inventory
Raw materials, work in progress and finished
products are valued at the lower of cost and net
realizable value after deduction for obsolescence.
Costs are determined using the FIFO and average
cost method.
Cash flow
The cash flow statement has been drawn up in
accordance with the indirect method and reports
cash flows during the period classified by operating,
investing and financing activities.
Significant estimates and judgements
Preparation of financial 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 accounting estimates for the Group are:
Share-based remuneration:
The cost of options granted to employees and
employee option social security costs are classified
as employee costs while cost of options granted
to consultants/contractors are classified as other
operating costs. Please see note 18 for further details.
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 financial
benefits of use or sale.
Expected credit loss on account receivables:
The Group recognizes loss allowances for expected
credit loss on account receivables, which are
measured at amortized cost. The Group applies
a provision matrix to calculate expected credit loss
(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 credit risk profile.
During 2024 the amount of significant overdue
receivables has increased. The Group has a limited
operating history with several of its major customers,
which makes it more challenging to establish
expected credit loss estimates for these receivables.
This fact, together with the significant amount of
trade receivables overdue at year-end 2024,
makes estimated ECL a critical estimate.
NOTE 2
|
SUMMARY OF MATERIAL ACCOUNTING POLICIES
ANNUAL REPORT 202433
NOTES TO FINANCIAL STATEMENT  GROUP
NOTE 3
|
Revenues and segment reporting Accounting principle
The Group manufactures and sell fingerprint
sensor technology hardware and software, both to
distributors and end-customers. The sales contract
and terms of delivery depends on the customer, but
most products are shipped ex-works. In accordance
with IFRS 15, revenue is recognized when control of
the product is transferred to the customer. Typically
when the customer picks up the products as per
contract, the Group has delivered and transferred
the products, there is no unfulfilled obligation that
could affect the customer’s acceptence of the
products. The goods are predominately sold based
on fixed prices. No significant element of financing is
deemed present as the sales are normally made with
a credit term of 30-90 days upon delivery, which is
consistent with market practice.
(amounts in NOK 1,000) 2024 2023
Fingerprint sensor technology 71,252 33,717
Other revenues 322 666
Total operating revenues 71,574 34,383
The Group targets four customer groups and
application areas for the technology:
(i) Office & Notebooks
(ii) Payment & Fintech
(iii) Access control
(iv) Public Security
The same generic fingerprint sensor technology
and products is used for all customers. Most of the
Group’s key IP, including our NEXT Active Thermal™
is shared and used in all products. The employees in
the Group work across all products and customers.
The R&D personnel are focused on technology,
rather than specific customer groups such as Office
& Notebooks or Public Security. 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 Group’s property, plant and equipment (PPE)
mainly consist of a specialized coating machine that
is located in Taipei, Taiwan. The remaining part of the
Group’s PPE consists of R&D test equipment located
in Seattle, USA and Taipei, Taiwan.
The Group’s revenues, both in 2024 and in 2023,
were mainly related to customers geographically
located in Asia (Japan, Singapore, China, Taiwan
and India). The Group has 4 major customers, which
represent 25% (0%), 20% (17%), 12% (63%) and 11%
(0%) of revenues in 2024 (2023 in brackets).
All of the group’s revenue is point in time type
of revenue.
Other revenue of NOK 0.3 million mainly relates to
sale of electronic components and other fees.
ANNUAL REPORT 202434
NOTES TO FINANCIAL STATEMENT  GROUP
NOTE 4
Payroll expenses
(amounts in NOK 1,000) 2024 2023
Salaries, fees -26,169 -26,507
Share based remuneration (salary part) -2,776 -5,729
Share based remuneration (employer's tax) 1,637 -4,611
Social security taxes -3,600 -3,515
Pension contribution -652 -804
Other personnel expenses -1,231 -1,204
Total payroll expenses -32,791 -42,370
Average numbers of employees 23 24
The cost for share based remuneration (employer's
tax) was negative NOK 1.6 million in 2024 compared
to a cost of NOK 4.6 million in 2023. The negative
cost in 2024 is due to reduction in the liability for
share option social security tax mainly triggered by
a reduction in the Group's stock price price and
lowered social security cost for future periods from
19.1% to 14.1%. Please refer to note 18 for further
information on the Group's option program.
The Group employed an average number of
employees of 23. In addition, the company has 15
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 satisfies 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 with an annual contribution
of 6% of the salary, but capped at TWD 9,000 per
month per employee (NOK 3,100 per month).
NEXT Biometrics China Ltd and NEXT Biometrics
Solutions Pvt Ltd have no local pension plans.
Termination benefits
Termination benefits 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
benefits. The Group recognizes termination benefits
when the Group can no longer withdraw the offer.
ANNUAL REPORT 202435
NOTES TO FINANCIAL STATEMENT  GROUP
NOTE 5
Other operating expenses
(amounts in NOK 1,000) 2024 2023
Product and marketing costs -6,795 -5,225
Sales and marketing incentive fees -3,631 -
Business services costs -18,084 -9,841
R&D costs -4,173 -2,600
R&D and government grants1 1,848 1,754
Fees to contractors, auditors, lawyers and others -5,382 -4,331
Allowance for expected credit loss -7,315 -462
Other expenses3 -3,057 -2,345
Share based remuneration (operating part) -452 -167
Total other operating expenses -47,041 -23,218
The Group’s business service costs increased
from NOK 9.8 million in 2023 to NOK 18.1 million
in 2024 largely due to transfer of personnel from
hired employees to contractors, increased number
of contractors in the areas of sales, product and
marketing as well as due to higher sales incentive
bonuses and travel activity.
1 R&D grants and other government grants are
related to Skattefunn grants in 2023/2024.
2 Fees to contractors, auditors, lawyers refers to
amounts paid the company’s contractors and
service providers who are working for the company
on a part time or full time basis.
3 Other expenses include software expenses,
IT cost, insurance fees, non deductable VAT
and stock exchange related fees.
Share based remuneration (operating part)
refers to share options granted to contractors
(see note 18 for further information).
ANNUAL REPORT 202436
NOTES TO FINANCIAL STATEMENT  GROUP
NOTE 6 Research and development cost
Cost related to research and development is only
recognized on projects we are confident will amount
to either a new product or a substantially improved
existing product. In general, research costs are
expensed when incurred. Research expenditures is
only capitalized when research and development
cost can be measured reliably and confidently.
Internal and external research and development
performed in 2024 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 and substantial improvement
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 10.7 million in 2024 (2023: NOK 9.0 million),
of which NOK 6.5 million (2023: NOK 6.4 million) is
presented in payroll expenses and NOK 4.2 million
(2023: NOK 2.6 million) in other operating expenses.
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.
The subsidiary NEXT Biometrics AS’ estimated
R&D public grant in connection with SkatteFUNN
(Norwegian Government tax deduction for research
and development in the innovative business
sector) for 2024 is NOK 1.8 million (2023: NOK 1.5
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 final
approval by the tax authorities.
NOTE 7
Financial items
(amounts in NOK 1,000) 2024 2023
Interest income 1,400 1,054
Interest income on sub-leases (see note 17) 81 -
Total financial income 1,482 1,054
Interest expenses -2 -157
Interest expenses leases (see note 18) -139 -146
Other financial expenses 22 241
Total financial expenses -119 -62
Realized currency gains (losses) -273 -62
Change in unrealized currency gains (losses) -59 -12
Net currency gains (losses) -332 -74
Net financial items 1,030 918
ANNUAL REPORT 202437
NOTES TO FINANCIAL STATEMENT  GROUP
(amounts in NOK 1,000) 2024 2023
Profit (loss) before taxes -45,038 -65,498
Expected income tax expenses at Norwegian nominal tax rate (22%) -9,908 -14,410
Difference between local tax rates and Norwegian nominal tax rate -336 -72
Effect of change in local tax rates - -
Tax effect of permanent differences -189 -29
Change in deferred tax assets not recognized 10,513 14,417
Prior year underaccrual/(overaccrual) of income tax -5 -5,132
Other 123 5,460
Actual income tax expenses 197 234
Effective tax rate 0% 0%
NOTE 8 Income 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 sufficient profit 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.
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.
The subsidiary NEXT Biometrics AS has applied
for R&D public grant funds in connection with
SkatteFUNN (Norwegian Government tax deduction
for research and development in the innovative
business sector) in 2023 and 2024. The amount for
2024 is NOK 1.8 million. Please see note 6 and 14 for
further details.
(amounts in NOK 1,000) 2024 2023
Current taxes (enties located in Norway) - -
Current taxes (International subsidiaries*) 197 196
Change in deferred taxes (International subsidiaries*) - 38
Total income tax expenses 197 234
* Subsidiaries in Taiwan, USA, India and China
Income tax expense reconciliation:
ANNUAL REPORT 202438
NOTES TO FINANCIAL STATEMENT  GROUP
(amounts in NOK 1,000) 2024 2023
Property, plant and equipment -1,801 -2,971
Inventories -16,938 -17,200
Accounts receivables and other assets -10,133 -2,932
Lease liabilities -875 -430
Other temporary differences -1,865 -7,193
Tax losses carried forward -1,368,912 -1,320,961
Total temporay differences and tax losses carried forward -1,400,524 -1,351,686
Deferred tax assets (amounts in NOK 1,000) 2024 2023
Property, plant and equipment 396 654
Inventories 3,726 3,784
Accounts receivables and other assets 2,229 645
Lease liabilities 192 95
Other temporary differences 410 1,614
Tax losses carried forward 301,161 290,611
Deferred tax assets not recognized -308,115 -297,403
Deferred tax assets(-)/liability(+) in the balance sheet - -
(amounts in NOK 1,000) 2024 2023
Deferred tax assets - -
Deferred tax liabilities - -
Net deferred taxes as of 31 December - -
As of 31 December 2024, NOK 1 369 million (2023: NOK 1 321 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.
Note 8 Continued
Deferred tax related to the following temporary differences:
The following table illustrates the deferred tax balance recognized in the statement of financial position:
ANNUAL REPORT 202439
NOTES TO FINANCIAL STATEMENT  GROUP
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) 2024 2023
Profit (loss) after taxes (NOK 1,000) -45,235 -65,732
Number of shares outstanding as of 1 January 104,024,929 91,980,763
New shares issued during the year (see note 19) 5,500,000 12,000,000
Excercised incentive options during the year (see note 19) 5,629,606 44,166
Number of shares outstanding as of 31 December 115,154,535 104,024,929
Weighted average number of shares for the year * 107,219,921 95,151,133
Effect of dilution option programmes - -
Weighted average number of shares adjusted for effect of dilution 107,219,921 95,151,133
Earnings per share, basic and diluted (NOK) -0.42 -0.69
Earningspershare
Earnings per share are calculated by dividing the
profit 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.
ANNUAL REPORT 202440
NOTES TO FINANCIAL STATEMENT  GROUP
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) 2024 2023
Accumulated cost as of 1 January 30,494 29,779
Additions 54 -
Disposals at cost - -
Translation differences 2,707 715
Accumulated cost as of 31 December 33,255 30,494
Accumulated amortization and impairment losses as of 1 January -28,963 -27,200
Amortization -762 -1,100
Accumulated amortization and impairment losses of disposed items - -
Translation differences -2,705 -662
Accumulated amortization and impairment losses as of 31 December -32,430 -28,963
Carrying amount as of 31 December 825 1,530
Amortization period in years (straight line) 3-12 3-12
As of 31 December 2024, in carrying amount, there
is no internally generated assets, the net book value
of intangible assets of NOK 0.8 million (2023: NOK 1.5
million) are separately acquired assets. There are
no impairments related to intangible assets in
2024 and 2023.
The patent and know-how (IP) is amortized over 12
years (equal to the patent life from initial recognition).
ANNUAL REPORT 202441
NOTES TO FINANCIAL STATEMENT  GROUP
NOTE 11 Property, plant and equipment
As of 31 December 2024, carrying amount of
equipment consists of machinery of NOK 3.1 million
(2023: NOK 4.8 million) and office equipment of
NOK 0 million (2023: NOK 0.1 million). Rental
agreement assets represent office leases and
amounted to NOK 4.0 million as per 31 December
2024 (2023: NOK 1.8 million).
The accumulated cost of equipment primarily relates
to the coating machine purchased in 2017 that is
located in Taiwan, amounting to NOK 21.2 million.
This includes the addition of additional investments
NOK 0.6 million in 2024. The remainder of the
accumulated equipment cost mainly represents
a cutting machine, that has a gross book value of
NOK 7.3 million and zero net book value. Please note
that these assets have been subject to currency
adjustments. There are no impairments related to
equipment in 2024 while the Group booked an
impairment of NOK 1.1 million in 2023.
Additions in 2024 for rental agreement assets
were mainly related to new office leases in Norway
and USA. See also note 17 for further information
regarding leases.
2024 2023
(amounts in NOK 1,000) Equipment
Rental
agreement
assets Total Equipment
Rental
agreement
assets Total
Accumulated cost as of 1 January 35,765 5,317 41,082 36,097 5,421 41,518
Additions 597 4,276 4,873 13 1,066 1,079
Disposals at cost -5 -4,755 -4,760 -1,448 -1,270 -2,718
Translation differences 2,260 553 2,813 1,103 100 1,203
Accumulated cost as of 31 December 38,616 5,392 44,008 35,765 5,317 41,082
Accumulated depreciation and impairment
losses as of 1 January -30,871 -3,473 -34,344 -26,629 -2,542 -29,171
Depreciation -2,524 -2,108 -4,632 -3,896 -2,076 -5,972
Impairment losses - - - -1,139 - -1,139
Derecognition of RoU asset due to office lease
amendment - -224 -224 - - -
Accumulated depreciation and impairment
losses of disposed items -5 4,755 4,750 1,448 1,186 2,634
Translation differences -2,128 -336 -2,464 -655 -41 -696
Accumulated depreciation and impairment
losses as of 31 December
-35,528 -1,386 -36,914 -30,871 -3,473 -34,344
Carrying amount as of 31 December 3,088 4,006 7,094 4,894 1,844 6,738
Depreciation period in years (straight line) 3-10 2-4 3-10 2-4
ANNUAL REPORT 202442
NOTES TO FINANCIAL STATEMENT  GROUP
NOTE 12
Inventories
NOTE 13
Accounts receivables
(amounts in NOK 1,000) 2024 2023
Raw material, consumables and supplies 9,382 17,143
Work in progress 2,790 2,367
Finished products 5,500 3,615
Total inventories 17,672 23,126
(amounts in NOK 1,000) 2024 2023
Accounts receivables-gross 67,424 15,269
Accounts receivables-loss allowance -10,669 -2,966
Total accounts receivables as of 31 December 56,754 12,303
(amounts in NOK 1,000) 2024 2023
Not due 10,673 11,531
30-90 days overdue 23,729 -
90-120 days overdue - -
120-180 days overdue 15,520 690
180+ days overdue 6,832 81
Total accounts receivables as of 31 December 56,754 12,303
Cost of materials is defined as cost of materials and
production service expenses.
Cost of materials includes net write-downs of
inventories. In 2024, write-downs on inventories was
NOK 0.36 million while the write-down of inventories
was NOK 4.04 million in 2023.
The total credit loss allowance provision was NOK 10.7
million as per year end 2024 (2023: NOK 3 million),
representing 15.8% (2023: 19.4%) of the total gross
value of accounts reveivables. Of the provision of NOK
10.7 million, NOK 3.3 million is related to a disputed
claim relating to a product shipment from 2020.
During 2024 the amount of significant overdue
receivables has increased. For the account
receivables outstanding as per 31 December 2024,
the Group is expecting collect approximately 50% of
the net account receivables in the first half of the year
and the remaining portion in the second half of 2025.
The Group has few, but large customers. The provision
is based on individual assessment of each customer
after thorough evaluations and discussions with each
respective customer.
ANNUAL REPORT 202443
NOTES TO FINANCIAL STATEMENT  GROUP
Note 13 Continued
ACCOUNTS RECEIVABLES AND OTHER FINANCIAL ASSETS
Initial recognition and measurement
Account receivables are initially recognized when
they are originated. An account receivable without a
significant financing component is initially measured
at the transaction price.
Accounts receivable loss allowance
The Group recognizes loss allowances on account
receivables measured at amortized cost. None of the
account receivables contain a significant financing
component and the time value of money will not
need to be considered as it is insignificant.
The Group has few, but large customers. The Group
considers reasonable and supportable information
that is relevant and available when estimating
loss allowance. This includes both quantitative
and qualitative information and analysis of each
customer and their domicile. The provision is based
on individual assessment of each customer after
thorough evaluations and discussions with each
respective customer, as well as past experience. The
Group has a limited operating history with several of
its major customers, which makes it more challenging
to establish expected credit loss estimates for these
receivables. This fact, together with the significant
amount of trade receivables overdue at year-end
2024, makes estimated ECL a critical estimate.
Account receivables write-off
The gross carrying amount of a account receivables
is written off when the Group has no reasonable
expectations of recovering it in its entirety or
a portion thereof.
NOTE 14
Other current assets
(amounts in NOK 1,000) 2024 2023
Prepayments 3,073 2,564
Government grants (see note 6) 1,776 1,527
Deposits 376 320
Income taxes and other taxes receivables 758 359
Other receivables 1,155 2,680
Total other current assets as of 31 December 7,138 7,451
NOTE 15 Cash
Cash include cash in hand, deposits held at call
with banks and bank deposits related to employee
withholding tax (restricted funds).
(amounts in NOK 1,000) 2024 2023
Cash-unrestricted 62,615 67,332
Cash-employee withholding tax deposits 293 422
Total cash 62,907 67,75 3
ANNUAL REPORT 202444
NOTES TO FINANCIAL STATEMENT  GROUP
NOTE 16
Other current liabilities
(amounts in NOK 1,000) 2024 2023
Accrued salary, vacation pay and board remuneration 3,405 1,863
Public duties payable 1,244 1,504
Share options social security tax 1,880 6,225
Other current liabilities 11,915 7,001
Total other current liabilities 18,444 16,594
Total other current liabilities was NOK 18.4 million as
per 31 December 2024 compared to NOK 16.6 million
as per 31 December 2023. The liability for share
option social security tax was reduced in 2024 due
to payment of options social security tax during the
year (as a result of options exercised in 2024) and a
reduction of the company’s stock price during 2024.
Other current liabilities was NOK 11.9 million as per
31 December 2024, of which NOK 5.3 million mainly
relates to uninvoiced goods and services that
has been received by the group while NOK 3.6
million relates to accrued sales and marketing
incentive fees.
The Group has entered into a contract with an
external party targeting to reach certain sales
targets in China. Upon reaching certain milestones,
performance fees are due to the external partner.
The sales and marketing fees liability estimate
is based on an assessment of progress of the
achivement of milestones as per 31 December 2024
and when such milestones are expected to be
fulfilled. The accrued liability for marketing incentive
fees is NOK 3.6 million as per 31 December 2024.
The Group may elect to settle the liability in cash
or in NEXT Biometrics Group ASA shares at its own
discretion. In 2024 the Group sold 50% of shares the
subsidiary in China (NEXT China) at zero cost to the
external party. A certain part of shares in NEXT China
is transferred back to NEXT Biometrics AS at zero
cost when each individual milestone is fulfilled and
settled as a part of the arrangement with the external
party. Hence, the Group will control 100% of shares in
NEXT China when all milestones have been fulfilled.
Alternatively, all remaining shares in the subsidiary
will be transferred to the Group once the agreement
has expired and some or none of the milestones
have been fulfilled. The agreement with the external
party also covers governance and operations during
the joint ownership period whereby the Group will
control the operations of NEXT China even when the
Group has a 50% shareholding.
In 2020, NEXT provided biometric products to a
former client. The client failed to meet the agreed-
upon payments, leading NEXT to decide to pursue
these payments through the courts, citing a breach
of contract. The arbitration court proceedings are
ongoing. The book value of the NEXT receivable
relating to this claim is zero as per 31 December
2024. In 2024, the former client countersued
NEXT for breach of contract and is seeking damages
from NEXT. NEXT’s management, in consultation with
its legal advisors, considers this countersuit to be
without merit and with an extremely low likelihood
of succeeding. As such, in accordance with IAS 37,
no provision has been recognized for this
potential liability in the financial statements as
of 31 December 2024.
For financial liabilities at amortised cost, the
carrying amount is assessed to be a reasonable
approximation of fair value. All items above are at
amortised cost or nominal value.
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 financial 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
reflects the best estimate of the liability. When the
effect of time is insignificant, the provisions will be
equal to the size of the expense necessary to be free
of the liability. When the effect of time is significant,
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
financial expenses.
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
outflow of resources; and obligations that cannot be
measured with sufficient reliability.
Contingent liabilities are not recognized in the
annual financial statements but will be disclosed
in the notes if applicable. A contingent asset is
not recognized in the annual financial statements
but is disclosed in the notes if there is a degree of
probability that a benefit will accrue to the Group.
ANNUAL REPORT 202445
NOTES TO FINANCIAL STATEMENT  GROUP
(amounts in NOK 1,000) 2024 2023
Property-office leases (included in "Property, plant and equipment") 4,006 1,844
Total right-of-use assets 4,006 1,844
Non-current lease liabilities 2,244 194
Current lease liabilities 1,843 1,745
Total lease liabilities 4,087 1,940
NOTE 17 Leases
The table below shows the amounts related to leases recognized in the statement of financial position:
As per 31 December 2024, the Group has office lease
agreements in Norway, China, USA and Taiwan. The
individual lease terms for the Group’s office leases
are generally 2-3 years including extension periods
at inception of the lease period. The group’s office
leases in Norway and USA were renewed in 2024.
The subsidiary in China entered into a new one-year
office lease in 2024. In accordance with IFRS 16
regulations, the lease in China is not recognized as a
right-of-use asset. Instead, it is directly recorded as
an operating expense.
See note 11 for more information regarding right-of-use assets.
(amounts in NOK 1,000) 2024 2023
Depreciation property right-of-use assets (included in "Depreciation and amortization") -2,108 -2,076
Interest income (included in "Financial income") 81 -
Interest expenses (included in "Financial expenses") -139 -146
Net expenses related to leases -2,166 -2,222
(amounts in NOK 1,000) 2024 2023
Opening balance 1,940 2,966
Changes from financing cash flows -2,017 -2,078
Changes in lease liabilities due to new/amended lease agreements or CPI adjustments 4,002 986
Other changes 22 -46
Translation differences 140 113
Closing balance as of 31 December 4,087 1,940
(amounts in NOK 1,000) 2024 2023
Within one year 1,843 1,745
More than 1 year but within 5 years 2,447 194
After 5 years - -
Total contractual cash flows related to leases 4,290 1,940
The table below shows the amounts related to leases recognized in the statement of comprehensive income:
The table below shows a reconciliation of the opening and closing balance for lease liabilities arising
from financing activities:
The table below shows the maturity profile for the lease liabilities based on contractual undisocunted payments:
The total cash outflow for leases in 2024 was NOK 2.0 million (2023: NOK 2.1 million).
ANNUAL REPORT 202446
NOTES TO FINANCIAL STATEMENT  GROUP
Leasingagreements
Currently, the Group’s only leases are office leases.
The intial fixed lease period for the office leases
are generally 1-4 years at inception of the individual
leases. Currently, no office lease extension options
have been recognized. The Group recognizes the
office lease liability and a corresponding office
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: fixed 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
reflects 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 financial 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 financial position but
recognized as an operating expense over the lease
period. Lease liabilities will be remeasured 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), which generally will be
recognized as an adjustment to the right-of-use asset.
Note 17 Continued
ANNUAL REPORT 202447
NOTES TO FINANCIAL STATEMENT  GROUP
NOTE 18 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 115,154,535 shares in the company on
31 December 2024, compared to 104,024,929 shares
on 31 December 2023. At the end of 2024 there were
3,391 shareholder accounts compared to 4,079 at
the end of 2023.
Number of shares outstanding 2024 2023
Opening balance 104,024,929 91,980,763
Share issue(s) 5,500,000 12,000,000
Exercised incentive share options 5,629,606 44,166
Closing balance 115,154,535 104,024,929
In October 2024, NEXT successfully completed
a private placement issuing 5,500,000 new
shares at a subscription price of NOK 7.3 per
share, corresponding to gross proceeds of NOK
40.2 million. Direct expenses and underwriting
commission in relation to the private placement was
NOK 2.1 million and net proceeds were NOK 38.1
million. Moreover, in February, May and August 2024,
909,606 share options were exercised at an average
subscription price of NOK 3.7 per share with total
gross proceeds of NOK 3.4 million and net proceeds
of NOK 3.3 million. Further, in September 2024,
4,720,000 share options were exercised at
an average subscription price of NOK 3.99 per
share with total gross proceeds of NOK 18.9
million and gross proceeds of NOK 18.8 million.
Total net proceeds for the year 2024 amounted
to NOK 60.1 million.
In September 2023, NEXT successfully completed
a private placement issuing 12,000,000 new
shares at a subscription price of NOK 5.0 per
share, corresponding to gross proceeds of NOK
60.0 million. Direct expenses and underwriting
commission in relation to the private placement
was NOK 3.1 million and net proceeds were NOK
56.9 million. Moreover, in May and September 2023,
44,166 share options were exercised at an average
subscription price of NOK 3.4 per share
with total gross proceeds of NOK 0.15 million.
Total net proceeds for the year 2023 amounted
to NOK 57.0 million.
There are no authorizations to the board to purchase
own shares.
Capital resources
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 no interest bearing debt by the end
of 2024.
NEXT targets to have an equity ratio above 80%,
measured as total equity divided by total assets.
ANNUAL REPORT 202448
NOTES TO FINANCIAL STATEMENT  GROUP
Equity ratio 2024 2023
Total equity 118,857 94,351
Total assets 152,390 118,900
Equity share 78% 79%
Capital resources 2024 2023
Current liabilities 31,289 24,355
Non-current liabilities 2,244 194
Less cash -62,907 -67,753
Net debt (net cash) -29,374 -43,204
Total equity 118,857 94,351
Total capital resources 89,482 51,147
Gearing ratio (%) –33% -84%
Note 18 Continued
Top 20 shareholders at 31 December 2024 Number of shares Percent of shares
Skandinaviska Enskilda Banken AB 7,413,614 6.4 %
Torstein Tvenge 6,500,000 6.2 %
SILVERCOIN INDUSTRIES AS 6,384,062 5.6 %
HAAS AS 5,953,000 5.5 %
NORUS AS 5,918,286 3.8 %
VERDIPAPIRFONDET DELPHI NORGE 5,499,912 3.7 %
EDGEWATER AS 5,385,645 3.2 %
SONGA CAPITAL AS 5,150,486 3.1 %
The Bank of New York Mellon SA/NV 3,857,313 3.0 %
UBS Switzerland AG 3,649,081 2.8 %
CAMACA AS 3,479,871 2.4 %
NORUS HOLDING DATTER AS 3,074,349 2.3 %
AS AUDLEY 2,627,027 1.8 %
VALSET INVEST AS 2,555,113 1.7 %
LUCELLUM AS 2,520,000 1.6 %
MARSTAL AS 1,786,158 1.6 %
CAMIKO AS 1,617,200 1.5 %
ECOMNEX HOLDING AS 1,494,461 1.5 %
SIX-SEVEN AS 1,438,644 1.4 %
AVEO INVEST AS 1,430,000 1.2 %
Total top 20 77,734,222 60.3 %
Others 37,420,313 39.7%
Total number of shares 115,154,535 100.0%
The largest shareholders at year end and shares owned by executive and Directors of the Board:
ANNUAL REPORT 202449
NOTES TO FINANCIAL STATEMENT  GROUP
Shares owned by Executives and Directors
of the Board
Number of
shares
Percent of
shares Held through
Ulf Ritsvall, CEO 17,000 0.01%
Eirik Underthun, CFO 119,000 0.10%
Marcus Lauren, CPO 20,000 0.02%
Digvijay Singh Kanwar, SVP Head of Sales IUEA - 0.00%
Joshua Chui, SVP Head of Sales South-East
Asia - 0.00%
Peter Heuman, former CEO 1,000,000 0.87%
Odd-Harald Hauge, Chair 548,907 0.48% Odd-Harald Hauge
Petter Fjellstad 1,032,779 0.90% Fjellstad Holding AS
Siri Gomnæs Børsum - 0.00%
Emine Lundkvist 79,738 0.07%
Jon Frode Vaksvik 35,000 0.03% Jon Frode Vaksvik & Skavak Invest AS
Haakon Sæter
1
8,370,794 7.27% Silvercoin Industries AS, Fredrikstad
Spillerinvest AS, Six-Seven AS &
Haakon Sæter
Hans Herman Horn 11,387,683 9.89% NORUS AS, Norus Holding Datter AS,
Edgewater AS & Hans Herman Horn
Total 22,610,901 19.64%
Note 18 Continued
In addition to the shares held directly through
Silvercoin Industries AS and Six-Seven AS,
Silvercoin Industries AS held futures In addition
to the shares held directly through Silvercoin
Industries AS and Six-Seven AS, Silvercoin
Industries AS held futures contracts on 2,000,000
NEXT shares as per 31 December 2024.
Senior Executives
Board of Directors
Nomination Committee
ANNUAL REPORT 202450
NOTES TO FINANCIAL STATEMENT  GROUP
Note 18 Continued
As of 31 December 2024, the Company has one share option program:
Long-term share options program
NEXT has allotted long-term share options to
employees. The options in the 2019, 2020, 2021 and
2022 program are fully vested as per 31. December
2024. The options allocated to employees in the
2023 program vest 1/3 in quarter three 2024, 1/3 in
quarter three 2025 and 1/3 in quarter one 2026. The
options allocated to employees in the 2024 program
vest 1/3 in quarter three 2025, 1/3 in quarter three
2026 and 1/3 in quarter one 2027. The options in
the 2020 and 2021 program were extended during
2023 and these options expire in 2026. The options
in the 2022 program expire in 2025. The options in
the 2023 program expire 5 years after the options
have been granted (2028) while the options in the
2024 program expire in 2029. All options allocated to
board members are fully vested.
There are currently an accumulated 10,020,579 (8.7%
of total number of shares in the Company) share
options outstanding. Out of these, 6,479,028 share
options have vested.
Each option gives the holder the right to acquire one
share from the Company at a strike price defined 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) 16 May 2024
the Board of Directors was granted authorization
to issue up to 11,980,658 shares in the company in
relation to options granted to employees and board
members.
2024 2023
Options-movement
Number of
options
Weighted average
exercise price
Number of
options
Weighted average
exercise price
Outstanding options-Beginning period 14,048,519 4.86 11,932,228 4.86
Granted 2,225,000 7.86 2,500,000 5.99
Exercised -5,629,606 3.96 -44,166 3.39
Forfeited or expired -623,334 9.74 -339,543 15.45
Outstanding options-End period 10,020,579 5.65 14,048,519 4.86
Vested options-End period 6,479,028 4.83 10,710,182 4.66
2024 2023
Number of
options
Weighted average
fair value
Number of
options
Weighted average
fair value
Granted options - During period 2,225,000 2.00 2,500,000 1.93
ANNUAL REPORT 202451
NOTES TO FINANCIAL STATEMENT  GROUP
Note 18 Continued
The fair value for the share-based options granted in
the year has been calculated by use of the Black-
Scholes and the following assumptions have been
applied in 2024 and 2023:
Exercise price:
2024: Weighted average NOK 7.86 per share
2023: Weighted average NOK 5.99 per share
Vesting period:
2024 employee options: 1/3 have 1 years, 1/3 have 2
years and 1/3 have 2.5 years
2023 employee options: 1/3 have 1 years, 1/3 have 2
years and 1/3 have 2.5 years
Volatility:
2023: 41%-42% depending on time to maturity of
individual options.
2023: 41%-68% depending on time to maturity of
individual options.
Risk free interest rate:
2024: 3.58%-4.10% depending on time to maturity of
individual options.
2023: 3.68%-4.21% depending on time to maturity of
individual options.
Attrition:
2024: Estimated 8% employee attrition for individual
non-vested share-based options.
2023: Estimated 8% employee attrition for individual
non-vested share-based options.
No expected dividend payment
2024
Net expense
in the period
(NOK 1,000)
Of which adjustment prior
periods expense because of
change in estimated number of
options that will vest
(NOK 1,000)
Remaining expense
future periods
(NOK 1,000)
Number of options
expected to vest
(number of options)
2019 grants - - - 103,418
2020 grants - - - 1,598,500
2021 grants - - - 1,803,664
2022 grants 714 - - 2,314,997
2023 grants 1,399 - 1,215 1,975,000
2024 grants 1,130 - 3,317 2,225,000
Total 3,243 - 4,532 10,020,579
2024
Range of
exercise price
Weighted average remaining
contractual life (years)
Number of options
expected to vest
(number of options)
Total number of
options outstanding
(number of options)
2019 grants 6,52-9,85 0.38 103,418 103,418
2020 grants 2,49-3,21 1.47 1,598,500 1,598,500
2021 grants 5,97-7,45 1.47 1,803,664 1,803,664
2022 grants 4,48-4,89 0.42 2,314,997 2,314,997
2023 grants 5,94-6,46 3.46 1,883,083 1,975,000
2024 grants 7,86-7,86 4.46 1,971,335 2,225,000
Total - - 9,674,997 10,020,579
ANNUAL REPORT 202452
NOTES TO FINANCIAL STATEMENT  GROUP
NOTE 19 Remuneration key personnel and audit fees
2024 (amounts in NOK 1,000)
Board
remuneration Salary Bonus Other benefits Pension cost
Fair value
granted options *
Total
remuneration
Ulf Ritsvall, CEO - 2,960 1,509 65 - 1,939 6,472
Eirik Underthun, CFO - 2,010 - 5 181 291 2,487
Marcus Lauren, CPO - 2,253 - - - 111 2,364
Digvijay Singh Kanwar, SVP Head
of Sales IUEA - 991 904 - - 206 2,100
Joshua Chui, SVP Head of Sales
South-East Asia - 1,880 1,347 - - 136 3,363
Peter Heuman, former CEO
1
- 87 - - 5 -148 -56
Odd Harald Hauge, Chair 200 - - - - - 200
Petter Fjeldstad 500 - - - - - 500
Emine Lundkvist 200 - - - - - 200
Siri Gomnæs Børsum 200 - - - - - 200
Jon Frode Vaksvik, Chair 30 - - - - - 30
Haakon Sæter 20 - - - - - 20
Hans-Herman Horn 20 - - - - - 20
Total remuneration 1,170 10,181 3,760 70 186 2,535 17,900
ACTUAL REMUNERATION  SENIOR EXECUTIVES
* 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.
Peter Heuman was NEXT Biometrics Group CEO until 30 September 2023. From 1 October 2023 to 16 May
2024 Peter Heuman was advisor to the CEO and board of directors.
Board of Directors
Nomination Committee
Senior Executives
ANNUAL REPORT 202453
NOTES TO FINANCIAL STATEMENT  GROUP
2023 (amounts in NOK 1,000)
Board
remuneration Salary Bonus Other benefits Pension cost
Fair value
granted options *
Total
remuneration
Ulf Ritsvall, CEO
2
- 2,130 100 19 - 1,650 3,900
Eirik Underthun, CFO - 1,878 100 4 172 862 3,016
Marcus Lauren, CPO
3
- 418 - - - 11 429
Digvijay Singh Kanwar, SVP Head
of Sales IUEA
4
- 684 82 - - 127 893
Joshua Chui, SVP Head of Sales
South-East Asia
5
- 313 - - - 11 325
Peter Heuman, former CEO
6
- 3,186 - 3 131 1,783 5,103
Petter Fjeldstad, Chair 500 - - - - - 500
Odd Harald Haug 200 - - - - - 200
Emine Lundkvist 200 - - - - - 200
Siri Gomnæs Børsum 200 - - - - 73 273
Jon Frode Vaksvik, Chair 30 - - - - - 30
Haakon Sæter 20 - - - - - 20
Hans-Herman Horn 20 - - - - - 20
Total remuneration 1,170 8,610 282 27 303 4,518 14,909
ACTUAL REMUNERATIONSENIOR EXECUTIVES
Note 19 Continued
Ulf Ritsvall was promoted to NEXT Biometrics Group CEO effective from 1 October 2023. Ulf Ritsvall
previously was NEXT SVP Sales and Marketing.
Marcus Lauren was hired as Chief Product Officer effective from 1 November 2023.
Digvijay Singh Kanwar was promoted to SVP Head of Sales IUEA effective from 1 November 2023.
Joshua Chui was hired as VP Head of Sales South-East Asia effective from 1 November 2023.
Peter Heuman was NEXT Biometrics Group CEO until 30 September 2023. From 1 October 2023
Peter Heuman was advisor to the CEO and board of directors.
CEO remuneration
Ulf Ritsvall (CEO) has a salary of NOK 2.6 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 benefit of 15% of annual base salary. Ulf
Ritsvall was awarded and paid a bonus in 2023, while no
bonus was paid out during 2024. During 2023 and 2024,
the company also paid pension benefits as salary, which is
reported under salary in the tables above.
Peter Heuman was NEXT Biometrics Group CEO until 30
September 2023. From 1 October 2023 to 16 May 2024
Peter Heuman was engaged as an advisor to the CEO
and board of directors. When engaged as CEO during
2023, Peter Heuman had a base salary of NOK 3.0 million
per year and 15% of annual salary in pension benefits.
In addition, he participated in the Company’s option
plan and the bonus program, which provides annual
bonuses based upon the achievement of performance
objectives established by the company. Peter Heuman
was awarded a bonus in 2023 and the company also paid
pension benefits as salary for the amount in excess of the
company’s standard pension contribution for 2023, which
is reported under salary in the tables above.
Board of Directors
Nomination Committee
Senior Executives
ANNUAL REPORT 202454
NOTES TO FINANCIAL STATEMENT  GROUP
Note 19 Continued
Severance
Ulf Ritsvall (CEO) has a severance agreement
whereby he will receive 100% pay for 6 months for
termination by the Company without cause.
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 as per 31
December 2024.
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 the
Black-Scholes 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. Share-based remuneration and
option social security 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.
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 of share
options will represent a dilution. At the end of
2024, the number of outstanding options to senior
executives amounted to 8,085,000 corresponding
to 7.0% of the share capital. At the end of 2023, the
number of outstanding options to senior executives
amounted to 11,205,000 corresponding to 10.8% of
the share capital.
For further details regarding share-based
remuneration, see note 18.
2024
Accumulated
quantity
options OB
Granted
options
Expired/
adjusted
options
Exercised
options
Average
exercise
price-A
Accumulated
quantity
options CB
Average
exercise
price-B
Ulf Ritsvall, CEO 2,725,000 1,400,000 - - - 4,125,000 6.30
Eirik Underthun, CFO 1,750,000 50,000 - -350,000 2.49 1,450,000 5.54
Marcus Lauren, CPO 75,000 150,000 - - - 225,000 7.39
Digvijay Singh Kanwar, SVP Head
of Sales IUEA 200,000 150,000 - - - 350,000 6.35
Joshua Chui, SVP Head of Sales
South-East Asia 75,000 200,000 - - - 275,000 7.48
Peter Heuman, former CEO 5,020,000 - -300,000 -4,720,000 3.99 - -
Odd Harald Hauge, Chair 200,000 - - - - 200,000 2.49
Petter Fjeldstad 1,030,000 - - - - 1,030,000 2.66
Emine Lundkvist 230,000 - - - - 230,000 3.27
Siri Gomnæs Børsum 200,000 - - - - 200,000 4.89
Total 11,505,000 1,950,000 -300,000 -5,070,000 8,085,000
OPTIONS  SHARE BASED REMUNERATION
Board of Directors
Senior Executives
ANNUAL REPORT 202455
NOTES TO FINANCIAL STATEMENT  GROUP
Note 19 Continued
2023
Accumulated
quantity
options OB
Granted
options
Expired/
adjusted
options
Exercised
options
Average
exercise
price-A
Accumulated
quantity
options CB
Average
exercise
price-B
Ulf Ritsvall, CEO 1,900,000 825,000 - - - 2,725,000 5.53
Eirik Underthun, CFO 1,500,000 250,000 - - - 1,750,000 4.86
Marcus Lauren, CPO - 75,000 - - - 75,000 6.46
Digvijay Singh Kanwar, SVP Head
of Sales IUEA 100,000 100,000 - - - 200,000 5.21
Joshua Chui, SVP Head of Sales
South-East Asia - 75,000 - - - 75,000 6.46
Peter Heuman, former CEO 4,720,000 300,000 - - - 5,020,000 4.11
Petter Fjeldstad, Chair 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
Siri Gomnæs Børsum 200,000 - - - - 200,000 4.89
Total 9,880,000 1,625,000 - - 11,505,000
A Average exercise price for options exercised during the financial year (amounts in NOK)
B Average exercise price for quantity of options by the end of the financial year (amounts in NOK)
(amounts in NOK 1,000) 2024 2023
Audit fee 780 532
Attestation 238 145
Tax services - -
Non-audit services 6 74
Total audit fees 1,024 751
Audit fees
Board of Directors
Senior Executives
ANNUAL REPORT 202456
NOTES TO FINANCIAL STATEMENT  GROUP
NOTE 20 Financial risk management
The Group is subject to various financial risks,
which are systematically monitored and managed
to mitigate potential adverse impacts. Our risk
management ensures that these risks are identified,
assessed, and controlled effectively, thereby
safeguarding the Group’s financial stability and
performance.
Credit risk
Credit risk refers to the risk that a counterparty will
default on its contractual obligations resulting in
financial loss to the Group. The Group assesses each
customer on an individual basis to estimate lifetime
expected credit losses. The credit loss estimates are
set by management based on internal and external
information. This includes qualitative information and
analysis, based on the Group’s historical experience
and including forward-looking information. These
estimates are subject to risks and uncertainties that
could cause actual results to differ from current
expectations. For example, economic and market
conditions in the geographic areas and industries
that the Group is operating can change. Moreover,
the Group is facing risks related to new customers
in existing and new markets, market acceptance
of new products and services and changes in
governmental regulations that impact the ability of
the Group's end customers to sell their products,
which may affect the Group's ability to collect its
account receivables. Further, the Group has a limited
operating history with several of its major customers
in the new markets, which makes the Group exposed
to additional credit risk. See note 13 - Accounts
receivables for more information regarding
account receivables.
.
Liquidity risk
The Group strives to maintain sufficient cash to
continue it’s operations and meet obligations.
The Group manages liquidity risk by maintaining
adequate cash reserves by continuosly monitoring
actual and forecasted cash flow by matching the
maturity profiles of financial assets and liabilities.
The Groups obligations mainly consists of supplier
liabilities and other current liabilities. See note 16 -
Liabilities for more information. The Group has no
long term liabilities or overdraft facilities with financial
institutions as of 31 December 2024.
Foreign currency risk
The primary functional currency of the Groups main
operating subsidiary NEXT Biometrics AS is USD.
The Group’s revenues outside China are incurred
in USD. The Group recognized 64% of its revenues
in USD and 36% in Chinese Yuan (CNY) in 2024
(100% and 0% respectively in 2023). The CNY/USD
rate has been quite stable in recent years. Still, the
Group is exposed to fluctuations of the CNY, which
will impact the value of account receivables that
are issued in CNY. The Group’s cost of materials
purchases are incurred in USD. Moreover, the
Group incurs employee and operating expenses
that is denominated in USD, Norwegian Kroner
(NOK), Taiwan Dollar (TWD) and CNY. The NOK/USD
exchange rate has shown some volatility in
recent years while the TWD and CNY are relatively
closely correlated to the USD. The Group has
not implemented a hedging policy to manage
currency risks as it believes the costs are larger
than the benefits.
ANNUAL REPORT 202457
NOTES TO FINANCIAL STATEMENT  GROUP
NOTE 21 Climate risk
The Group does not own or operate manufacturing
facilities. Manufacturing is done through third parties.
Climate impact and potential risk is low in the short
to medium term. The Group is not directly impacted
by physical climate risk such as potential flooding
or general increase in the sea level. Moreover, the
Group does not face any potential liabilities due
to damage caused by climate change. Still, the
Group is likely to 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.
Note 22 Related parties
The Group’s significant shareholders, board
members and management are considered related
parties. Transactions between related parties are
always aimed at being carried at 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 19.
Note 23 Events occurring after the balance sheet date
Between 31 December 2024 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 2024
or the value of the Group or the parent company’s
assets and liabilities as of 31 December 2024.
We refer to note 13. In the period from 1 January 2025
up to 1 April 2025 the Group has received NOK 4.7
million in payments on account receivables that were
outstanding as per 31 December 2024.
Note 24 Changes in reporting items in consolidated
statement of comprehensive income
There are minor changes to the consolidated
statement of comprehensive income compared
to previous years. Operating revenues and other
revenues have been combined into one financial
statement reporting line item named “Revenues”.
Similarly, Cost of goods sold and Inventory write
downs have been combined into one financial
statement reporting line item named “Cost of
materials”. These changes were implemented in
order made to be more in line with our peers and
general accounting practice.
(amounts in NOK 1,000) 2023
Operating revenue 33,717
Other revenue 666
Revenues 34,383
(amounts in NOK 1,000) 2023
Cost of goods sold -22,962
Inventory write downs -4,042
Cost of materials -27,004
ANNUAL REPORT 202458
NOTES TO FINANCIAL STATEMENT  GROUP
Financial
Statements
Parent
Company
ANNUAL REPORT 202459
Parent company
|
Statement of comprehensive income 1 January - 31 December
(amounts in NOK 1,000) Notes 2024 2023
Revenues 2 9,451 8,921
Total revenues 9,451 8,921
Payroll expenses 3 -11,361 -11,953
Share based remuneration 3 -432 -9,111
Other operating expenses 4 -7,715 -6,686
Depreciation and amortization 7,8 -1,366 -1,265
Total operating expenses -20,874 -29,014
Operating profit (loss) -11,423 -20,093
Financial income 5 1,471 1,385
Financial expenses 5 -55 -191
Net currency gains (losses) 5 418 737
Net financial items 1,834 1,930
Profit (loss) before taxes -9,589 -18,163
Income tax expenses 6 - -
Profit (loss) after taxes -9,589 -18,163
Other comprehensive income (loss) - -
Total comprehensive income (loss) -9,589 -18,163
ANNUAL REPORT 202460
FINANCIAL STATEMENTS PARENT COMPANY
Odd-Harald Hauge
Chair
/Sign/ /Sign/
/Sign/
/Sign/
/Sign/
Petter Fjellstad
Board member
Ulf Ritsvall
CEO
Emine Lundkvist
Board member
Siri Gomnæs Børsum
Board member
Parent Company
|
Statement of financial position As of 31 December
(amounts in NOK 1,000) Notes 2024 2023
Intangible assets 7 750 1,500
Property, plant and equipment 8,15 954 447
Shares in subsidiaries 9 312,790 266,616
Loans to group companies 10 5,534 6,137
Total non-current assets 320,028 274,700
Other current assets 11 1,542 3,699
Cash 12 47,924 40,091
Total current assets 49,466 43,790
Total assets 369,494 318,490
Share capital 13 115,155 104,025
Share premium 174,906 135,496
Other reserves 31,580 28,336
Retained earnings 40,060 40,060
Total equity 361,701 307,918
Non-current lease liability 15 227 -
Total non-current liabilities 227 -
Accounts payables 910 697
Current lease liabilities 15 648 430
Other current liabilities 14 6,008 9,446
Total current liabilities 7,566 10,572
Total equity and liabilities 369,494 318,490
The board of directors of
NEXT Biometrics Group ASA
Oslo, 10 April 2025
ANNUAL REPORT 202461
FINANCIAL STATEMENTS PARENT COMPANY
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
Retained
earnings
Total
equity
As of 1 January 2024 104,025 135,496 28,336 40,060 307,918
Profit (loss) after taxes -9,589 -9,589
Other comprehensive income (loss) - -
Total comprehensive income (loss) - - -9,589 -9,589
Share issues 13 11,130 51,313 62,442
Share issue costs 13 -2,314 -2,314
Share-based remuneration 13 3,243 3,243
Transfer of loss to share premium -9,589 9,589
As of 31 December 2024 115,155 174,906 31,580 40,060 361,701
As of 1 January 2023 91,981 108,687 22,440 40,060 263,169
Profit (loss) after taxes -18,163 -18,163
Other comprehensive income (loss) - -
Total comprehensive income (loss) - - -18,163 -18,163
Share issues 13 12,044 48,106 60,150
Share issue costs 13 -3,134 -3,134
Share-based remuneration 13 5,896 5,896
Transfer of loss to share premium -18,163 18,163
As of 31 December 2023 104,025 135,496 28,336 40,060 307,918
ANNUAL REPORT 202462
FINANCIAL STATEMENTS PARENT COMPANY
Parent Company
|
Statement of cash flow 1 January - 31 December
(amounts in NOK 1,000) Notes 2024 2023
Profit (loss) before taxes -9,589 -18,163
Share based remuneration 13 2,069 4,500
Accrued share option social security cost -4,345 4,611
Depreciation and amortization 7,8 1,366 1,265
Change in accounts payables 214 168
Change in other working capital items and other 1,791 -3,784
Interests received 890 733
Interests paid -54 -35
Net cash flow from operating activities -7,658 -10,705
Net financing of subsidiary 9,10 -45,000 -46,000
Repayments of intercompany loan 1,013 2,800
Net cash flow from investing activities -43,987 -43,200
Proceeds from issue of shares 60,129 57,016
Payment of lease liabilities 15 -650 -506
Net cash flow from financing activities 59,479 56,510
Net change in cash flow 7,834 2,605
Cash balance as of 1 January 40,091 37,486
Effects of exchange rate changes on cash 82 -10
Cash balance as of 31 December 47,9 24 40,091
Comprising of:
Cash 12 47,9 24 40,091
ANNUAL REPORT 202463
FINANCIAL STATEMENTS PARENT COMPANY
Notes to financial
statement - Parent
NOTE 1 General information and summary of significant accounting policies
NEXT Biometrics Group ASA is a holding company
and contains the actvities that are performed in
Norway including Group Management. These
financial statements have been prepared in
accordance with IFRS® Accounting Standards as
adopted by the EU per 31 December 2024.
NEXT Biometrics Group ASA’s accounting principles
are consistent with the accounting principles for the
Group, as described in note 2 of the consolidated
financial 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 financial
statements.
Shares in subsidiaries are accounted for using the
cost method. The investments in subsidiaries are
valued at cost unless impairment is required due
to lower fair value. Assessments of impairment on
shares in subsidiaries are done by the end of each
reporting period. 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.
NOTE 2 Revenues
Operating revenues are management fee and royalty
charged to the subsidiary NEXT Biometrics AS.
Revenues from NEXT Biometrics AS totals to NOK 9.5
million in 2024 (2023: NOK 8.9 million).
NOTE 3 Payroll expenses
(amounts in NOK 1,000) 2024 2023
Salaries, fees -9,147 -9,513
Share based remuneration (salary part) -2,069 -4,500
Share based remuneration (employer's tax) 1,637 -4,611
Social security taxes -1,625 -1,780
Pension contribution -349 -481
Other personnel expenses -240 -178
Total payroll expenses -11,793 -21,064
Average numbers of employees 4 5
The parent company, NEXT Biometrics Group ASA,
provides a contribution-based pension insurance
scheme for all employees. The scheme satisfies the
mandatory service pension (‘OTP’) in Norway.
By the end of 2024, there were 4 employees in the
parent company.
ANNUAL REPORT 20246464
NOTE 4 Other operating expenses
(amounts in NOK 1,000) 2024 2023
Fees to consultants, lawyers and others -4,361 -3,779
Travel expenses -733 -598
Other expenses -2,621 -2,309
Total other operating expenses -7,715 -6,686
Other expenses include insurance, marketing
expenses, Oslo stock exchange fees, stock register
fee and other costs.
NOTE 5 Financial items
(amounts in NOK 1,000) 2024 2023
Interest income from group companies (see note 10) 499 410
Interest income on sub-leases (see note 15) 81 -
Interest income 890 974
Total financial income 1,471 1,385
Interest expenses -2 -156
Interest expenses right-to-use assets (see note 15) -54 -35
Total financial expenses -55 -191
Realized currency gains (losses) -171 320
Change in unrealized currency gains (losses) 590 416
Net currency gains (losses) 418 737
Net financial items 1,834 1,930
(amounts in NOK 1,000) 2024 2023
Audit fee -441 -286
Attestation -202 -145
Non-audit services -53 -38
Total audit fees -696 -468
Fees to consultants, lawyers and others includes remuneration to auditor, see specification in table below:
ANNUAL REPORT 202465
NOTES TO FINANCIAL STATEMENT  PARENT
NOTE 6 Income taxes
(amounts in NOK 1,000) 2024 2023
Current taxes - -
Change in deferred taxes - -
Total income tax expenses - -
Profit (loss) before taxes -9,589 -18,163
Expected income tax expenses at Norwegian nominal tax rate (22%) -2,110 -3,996
Tax effect of permanent differences -47 309
Change in deferred tax assets not recognized 2,157 3,686
Actual income tax expenses - -
Effective tax rate 0% 0%
(amounts in NOK 1,000) 2024 2023
Property, plant and equipment 954 447
Long term loans - -
Lease receivables - -
Lease liabilities - -
Other temporary differences -2,218 -6,623
Tax losses carried forward -243,672 -228,957
Total temporary differences and tax losses carried forward -244,936 -235,133
Deferred tax assets -53,886 -51,729
Deferred tax assets not recognized 53,886 51,729
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.
Income tax expense reconciliation:
Deferred tax related to the following temporary differences:
ANNUAL REPORT 202466
NOTES TO FINANCIAL STATEMENT  PARENT
(amounts in NOK 1,000) 2024 2023
Deferred tax assets - -
Deferred tax liabilities - -
Net deferred taxes as of 31 December - -
Note 6 Continued
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) 2024 2023
Accumulated cost as of 1 January 7,458 7,458
Additions - -
Disposals at cost - -
Accumulated cost as of 31 December 7,458 7,458
Accumulated amortization and impairment losses as of 1 January -5,959 -5,209
Amortization -750 -750
Accumulated amortization and impairment losses of disposed items - -
Accumulated amortization and impairment losses as of 31 December -6,708 -5,959
Carrying amount as of 31 December 750 1,500
Amortization period in years (straight line) 12 12
The individual intangible asset is not considered
as separate cash generating units. Rather, that
assets are evaluated for impairment in combination
with other assets. Therefore, impairment tests have
been performed as part of an overall impairment
assessment. Consequently, it was concluded that
there was no need for impairment of intangible assets.
(amounts in NOK 1,000) 2024 2023
Profit (loss) before taxes -9,589 -18,163
Permanent differences -214 1,406
Change in temporary differences -4,911 4,310
Basis for current taxes -14,715 -12,446
The following table illustrates the deferred tax balance recognized in the statement of financial position:
The following table illustrates the basis for calculation of current tax:
ANNUAL REPORT 202467
NOTES TO FINANCIAL STATEMENT  PARENT
(amounts in NOK 1,000) Office
Owned directly by
Parent company
Ownership / voting
interest in % 2024
Ownership / voting
interest in % 2023
NEXT Biometrics AS Oslo, Norway x 100% 100%
NEXT Biometrics Inc. Seattle, USA 100% 100%
NEXT Biometrics China Ltd. Shanghai, China 50% 100%
NEXT Biometrics Taiwan Ltd. Taipei, Taiwan 100% 100%
NEXT Biometrics Solutions Pvt. Ltd. Bengaluru, India 100% 100%
NOTE 8 Property, plant and equipment
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 financial statements:
Right-of-use assets (RoU-assets) represent office
leases. In 2024, the company extended the Oslo
office lease by 2 years and changed its office
location with the same office lease company, which
represent the additions in 2024 for right-of-use
assets (RoU-assets). Additions in 2023 were related
to KPI adjustments of the existing lease contract
in Oslo. See also note 15 for further information
regarding leases.
The change in carrying amount from 31 December
2023 to 31 December 2024, is related to capital
increases of NOK 45.0 million and investment in
subsidiaries related to sharebased renumeration cost
(employees and contractors in subsidiaries) of NOK
1.2 million.
2024 2023
(amounts in NOK 1,000) RoU-assets Total RoU-assets Total
Accumulated cost as of 1 January 1,048 1,048 1,021 1,021
Additions 1,346 1,346 27 27
Disposals at cost -1,047 -1,047 - -
Accumulated cost as of 31 December 1,347 1,347 1,048 1,048
Accumulated depreciation and impairment losses as of 1 January -600 -600 -85 -85
Depreciation -616 -616 -515 -515
Impairment losses - - - -
Derecognition of RoU asset due to office lease amendment -224 -224 - -
Accumulated depreciation and impairment losses of disposed items 1,047 1,047 - -
Accumulated depreciation and impairment losses as of 31 December -392 -392 -600 -600
Carrying amount as of 31 December 954 954 447 447
Depreciation period in years (straight line) 2-4 2-4
(amounts in NOK 1,000) 2024 2023
NEXT Biometrics AS 312,790 266,616
Total shares in subsidiaries 312,790 266,616
The table below shows the carrying amount of shares in subsidaries for the Parent company as of 31 December:
ANNUAL REPORT 202468
NOTES TO FINANCIAL STATEMENT  PARENT
NOTE 10 Loans to group companies
NOTE 11 Other current assets
NOTE 12 Cash
(amounts in NOK 1,000) 2024 2023
Loan to NEXT Biometrics Taiwan Ltd. 5,534 6,137
Total loans group companies as of 31 December 5,534 6,137
(amounts in NOK 1,000) 2024 2023
Receivables NEXT Biometrics AS 877 2,772
Prepayments 351 496
Deposits 115 86
Other receivables 199 345
Total other current assets 1,542 3,699
(amounts in NOK 1,000) 2024 2023
Cash-unrestricted 47,631 39,669
Cash-employees withheld payroll tax deposits 293 422
Total cash 47,924 40,091
The loan to NEXT Biometrics Taiwan Ltd. was
charged with NIBOR 6 months + 1.0%. From 1st
November 2024, the loan was charged NIBOR 6
months + 3.2%. Interest for 2024 amounted to NOK
0.4 million (2023: NOK 0.4 million).
The parent company had a short-term loan to NEXT
Biometrics AS during 2024. Interest was charged
with the rate of 7.2% per annum. Interest for 2024
amounted to NOK 0.1 million. The loan was repaid in
December 2024.
ANNUAL REPORT 202469
NOTES TO FINANCIAL STATEMENT  PARENT
NOTE 13 Equity and share based remuneration
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 2024 2023
Opening balance 104,024,929 91,980,763
Share issue(s) 5,500,000 12,000,000
Exercised incentive share options 5,629,606 44,166
Closing balance 115,154,535 104,024,929
As of 31 December 2024, the Company has one
share option program. There are currently an
accumulated 10,020,579 (8.7% of total number of
shares in the Company) share options outstanding.
NEXT Biometrics Group ASA booked a share based
remuneration operating cost of NOK 2.1 million as
payroll expense and NOK 1.2 million was booked as
investment in subsidiaries.
As an alignment of principles, NEXT Biometrics
ASA, in 2023 made a material adjustment to earlier
periods share-based remuneration effect in the
equity statement, with a corresponding increase to
investments in subsidiaries, as compared to the 2022
financial statements. The total equity effect of share
based remuneration for the 2023 financial period
was NOK 5.9 million, of which NOK 4.5 million was
booked as payroll expense and NOK 1.4 million was
booked as investment in subsidiaries.
For further information regarding share capital,
shareholder’s information and share-based
options, please refer to note 18 in group
consolidated financial statement.
Net amount in the period (NOK 1,000)
2024 2023
Share based remuneration cost,
NEXT Biometrics Group ASA
2,069 4,500 See note 3, payroll expenses
Share based remuneration cost,
employees in NEXT Biometrics
Group ASA subsidiaries
716 1,229 Booked as addition to investment in
subsidiaries (Note 9, shares in subsidiaries)
Share based remuneration cost,
consultants/contractors in NEXT
Biometrics Group ASA subsidiaries
458 167 Booked as addition to investment in
subsidiaries (Note 9, shares in subsidiaries)
Total 3,243 5,896
ANNUAL REPORT 202470
NOTES TO FINANCIAL STATEMENT  PARENT
(amounts in NOK 1,000) 2024 2023
Opening balance 430 863
Changes from financing cash flows -650 -506
Changes in lease liabilities due to new/amended lease agreements or CPI adjustments 1,041 27
Other changes 53 47
Closing balance as of 31 December 875 430
NOTE 14 Other liabilities
NOTE 15 Leases
(amounts in NOK 1,000) 2024 2023
Accrued salary, vacation pay and board remuneration 2,885 1,304
Public duties payable 1,022 1,437
Share options social security tax 1,880 6,225
Other current liabilities 220 479
Total other current liabilities 6,008 9,446
For financial liabilities at amortised cost, the
carrying amount is assessed to be a reasonable
approximation of fair value. All items above are at
amortised cost or nominal value.
(amounts in NOK 1,000) 2024 2023
Depreciation property right-of-use assets (included in "Depreciation and amortization") -616 -515
Interest income (included in "Financial income") 81 -
Interest expenses (included in "Financial expenses") -54 -35
Net expenses related to leases -588 -549
See note 8 for more information regarding right-of-use assets.
The total cash outflow for leases in 2024 was NOK 0.6 million (2023: NOK 0.5 million).
(amounts in NOK 1,000) 2024 2023
Property-office leases (included in "Property, plant and equipment") 954 447
Total right-of-use assets 954 447
Non-current lease liabilities (included in "Other non-current liabilities") 227 -
Current lease liabilities (included in "Other current liabilities") 648 430
Total lease liabilities 875 430
The table below shows the amounts related to leases recognized in the statement of financial position:
The table below shows the amounts related to leases recognized in the statement of comprehensive income:
The table below shows a reconciliation of the opening and closing balance for lease liabilities arising from
financing activities:
ANNUAL REPORT 202471
NOTES TO FINANCIAL STATEMENT  PARENT
(amounts in NOK 1,000) 2024 2023
Within one year 690 352
More than 1 year but within 5 years 230 -
Total contractual cash flows related to leases 920 352
Note 15 Continued
NOTE 16 Related party transactions
The parent company’s significant shareholders,
board members and management, are considered
related parties. For overview of transactions with
these parties, please refer to note 22 in group
consolidated financial 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
Between 31 December 2024 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 2024
or the value of the Group or the parent company’s
assets and liabilities as of 31 December 2024.
The table below shows the maturity profile for the lease liabilities based on contractual undiscounted payments:
ANNUAL REPORT 202472
NOTES TO FINANCIAL STATEMENT  PARENT
Responsibility
statement
We confirm that, to the best of our knowledge, the
financial statements for the period from 1 January
to 31 December 2024 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, 10 April 2025
Odd-Harald Hauge
Chair
/Sign/ /Sign/
/Sign/
/Sign/
/Sign/
Petter Fjellstad
Board member
Siri Gomnæs Børsum
Board member
Emine Lundkvist
Board member
Ulf Ritsvall
CEO
ANNUAL REPORT 202473
RSM Norge AS (organisasjonsnummer 982316588), RSM Advokatfirma AS (organisasjonsnummer 914095573),
RSM Norge Kompetanse AS (organisasjonsnummer 925107492). RSM Norge AS er medlem av RSM-nettverket og
driver under navnet RSM. RSM er forretningsnavnet som brukes av medlemmene i RSM-nettverket. RSM
Advokatfirma AS og RSM Norge Kompetanse AS er selskaper tilknyttet RSM Norge AS. Hvert medlem i RSM-
nettverket er et selvstendig revisjons- og rådgivningsfirma med uavhengig virksomhet. RSM-
nettverket er ikke selv en
To the General Meeting of Next Biometrics Group ASA
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 balance sheet as at 31 December 2024, the income statement, 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 material accounting policy information, and
the consolidated financial statements of Next Biometrics Group ASA and its subsidiaries (the Group),
which comprise the balance sheet as at 31 December 2024, the income statement, 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 material accounting policy information.
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 2024, and its financial performance and its cash flows for the year then ended in accordance
with IFRS Accounting 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 2024, and its financial performance and its cash flows for the year then ended in
accordance with IFRS Accounting 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 relevant
laws and regulations in Norway and the International Ethics Standards Board for Accountants’ International
Code of Ethics for Professional Accountants (including International 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.
Independent Auditor’s Report
Penneo Dokumentnøkkel: 0UWH5-5WW0K-CPDY9-RUFGF-YHIP9-OEA87
Auditor's report
ANNUAL REPORT 202474
Next Biometrics Group ASA
Auditor’s Report 2024
We have been the auditor for the Company for 1 year from the election by the general meeting of the
shareholders on 16 May 2024 for the accounting year 2024.
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 Matters How our audit addressed the Key Audit Matters
Accounts receivables
Per the reporting date 2024 Next Biometrics Group
ASA has in its consolidated financial statements
recognized net accounts receivables of NOK
56 754 000, including a loss allowance provision of
NOK 10 669 000.
During 2024 the levels of overdue account
receivables have increased, and per the 2024
reporting date, accounts receivables of 120 days
overdue or more amounted to NOK 22 352 000.
The estimation of expected credit losses, and thus
the valuation of accounts receivables, involve
significant judgment. Management must consider
factors such as the aging of accounts receivables,
historic payments patterns, forward looking
information on macroeconomic factors affecting the
ability of the customers to settle the receivables, and
other relevant information that can impact the
customers creditworthiness. Management utilizes this
information to determine the loss allowance that
should be recognized per the reporting date.
Accounts receivables are considered a key audit
matter due to the estimation uncertainty for expected
credit losses.
We obtained information regarding the
management’s processes for evaluation of overdue
accounts receivables. Due to the Groups limited
operating history with several of its major customers
it is challenging to establish expected credit loss
estimates for the accounts receivables. The
assessment of provisions for loss allowances is
therefore based on an individual assessment of each
material customer per the reporting date.
Our audit approach for addressing the key audit
matter for accounts receivables involved several
audit procedures.
Our audit procedures included, among others, the
following:
- We have obtained confirmations from customers
equivalent to 85% of outstanding receivables as
of 31. December 2024.
- We have reviewed payments received after the
reporting date and considered if adjustment
based on credit notes issued after the reporting
date is necessary.
- We have conducted meetings with management
to review outstanding receivables and reviewed
management’s written assessment for each
individual accounts receivable, and information
on the expected payment date.
- We have reviewed the disclosures for accounts
receivables in the financial statement and have
considered these disclosures to be sufficient to
provide information about the estimation
uncertainty that exits related to the valuation of
accounts receivables as of 31. December 2024.
Penneo Dokumentnøkkel: 0UWH5-5WW0K-CPDY9-RUFGF-YHIP9-OEA87
ANNUAL REPORT 202475
AUDITOR'S REPORT
Next Biometrics Group ASA
Auditor’s Report 2024
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 appear 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 statutory 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 IFRS Accounting 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.
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.
Penneo Dokumentnøkkel: 0UWH5-5WW0K-CPDY9-RUFGF-YHIP9-OEA87
ANNUAL REPORT 202476
AUDITOR'S REPORT
Next Biometrics Group ASA
Auditor’s Report 2024
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 and 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's 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.
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 Requirement on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of Next Biometrics Group ASA, we have performed an assurance
engagement to obtain reasonable assurance about whether the financial statements included in the annual
report, with the file name NB_Group_ASA_Annual_report_2024-12-31.zip, have been prepared, in all material
respects, in compliance with with the requirements of the Commission Delegated Regulation (EU) 2019/815 on
the European Single Electronic Format (ESEF Regulation) and regulation pursuant to Section 5-5 of the
Norwegian Securities Trading Act, which includes requirements related to the preparation of the annual report in
XHTML format and iXBRL tagging of the consolidated financial statements.
Penneo Dokumentnøkkel: 0UWH5-5WW0K-CPDY9-RUFGF-YHIP9-OEA87
ANNUAL REPORT 202477
AUDITOR'S REPORT
Next Biometrics Group ASA
Auditor’s Report 2024
In our opinion, the financial statements, included in the annual report, have been prepared, in all material
respects, in compliance with the ESEF regulation.
Management is responsible for the preparation of the annual report in compliance with the ESEF regulation.
This responsibility comprises an adequate process and such internal control as management determines is
necessary.
Our responsibility, based on audit evidence obtained, is to express an opinion on whether, in all material
respects, the financial statements included in the annual report have been prepared in compliance with ESEF.
We conduct our work in compliance with the International Standard for Assurance Engagements (ISAE) 3000 –
“Assurance engagements other than audits or reviews of historical financial information”. The standard requires
us to plan and perform procedures to obtain reasonable assurance about whether the financial statements
included in the annual report have been prepared in compliance with the ESEF Regulation.
Management’s Responsibilities
Auditor’s Responsibilities
As part of our work, we have performed procedures to obtain an understanding of the Company’s processes for
preparing the financial statements in compliance with the ESEF Regulation. We examine whether the financial
statements are presented in XHTML-format. We evaluate the completeness and accuracy of the iXBRL tagging
of the consolidated financial statements and assess management’s use of judgement. Our procedures include
reconciliation of the iXBRL tagged data with the audited financial statements in human-readable format. We
believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Oslo, 10 April 2025
RSM Norge
Cecilie Tronstad
State Authorised Public Accountant
Penneo Dokumentnøkkel: 0UWH5-5WW0K-CPDY9-RUFGF-YHIP9-OEA87
ANNUAL REPORT 202478
AUDITOR'S REPORT
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På vegne av: RSM Norge AS
Serienummer: no_bankid:9578-5999-4-1466689
IP: 188.95.xxx.xxx
2025-04-10 09:35:37 UTC
Penneo Dokumentnøkkel: 0UWH5-5WW0K-CPDY9-RUFGF-YHIP9-OEA87
Dette dokumentet er signert digitalt via Penneo.com. De signerte dataene er
validert ved hjelp av den matematiske hashverdien av det originale dokumentet.
All kryptografisk bevisføring er innebygd i denne PDF-en for fremtidig validering.
Dette dokumentet er forseglet med et kvalifisert elektronisk segl ved bruk av et
sertifikat og et tidsstempel fra en kvalifisert tillitstjenesteleverandør.
Slik kan du bekrefte at dokumentet er originalt
Når du åpner dokumentet i Adobe Reader, kan du se at det er sertifisert
av Penneo A/S. Dette beviser at innholdet i dokumentet ikke har blitt
endret siden tidspunktet for signeringen. Bevis for de individuelle
signatørenes digitale signaturer er vedlagt dokumentet.
Du kan bekrefte de kryptografiske bevisene ved hjelp av Penneos
validator, https://penneo.com/validator, eller andre
valideringsverktøy for digitale signaturer.
Signaturene i dette dokumentet er juridisk bindende. Dokument signert med "Penneo™ - sikker digital
signatur". De signerende parter sin identitet er registrert, og er listet nedenfor.
"Med min signatur bekrefter jeg alle datoer og innholdet i dette dokument."
TTrroonnssttaadd,, CCeecciilliiee
SSttaattssaauuttoorriisseerrtt rreevviissoorr
På vegne av: RSM Norge AS
Serienummer: no_bankid:9578-5999-4-1466689
IP: 188.95.xxx.xxx
2025-04-10 09:35:37 UTC
Penneo Dokumentnøkkel: 0UWH5-5WW0K-CPDY9-RUFGF-YHIP9-OEA87
ANNUAL REPORT 202479
AUDITOR'S REPORT
Alternative
performance measures
NEXT’s financial 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 financial
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 figures are alternative performance
measures according to ESMA’s definition. How
these key figures 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
adjusted gross profit , Adjusted EBITDA and
Adjusted operating expenses.
Gross profit / gross profit (%)
Gross profit is defined as revenues less cost
of materials.
Gross profit (%) is expressed as a percentage
of revenues.
ANNUAL REPORT 202480
(amounts in NOK 1,000) 2024 2023
Revenues 71,574 34,383
Cost of materials -32,416 -27,004
Gross profit 39,158 7,379
(amounts in NOK 1,000) 2024 2023
Revenues 71,574 34,383
Cost of materials excluding inventory writedowns -32,053 -22,962
Adjusted gross profit 39,521 11,421
(amounts in NOK 1,000) 2024 2023
Cost of materials -32,416 -27,004
Deducted inventory writedowns 363 4,042
Cost of materials excluding inventory writedowns -32,053 -22,962
Gross profit (%) 39,158 7,379
Divided by revenues 71,574 34,383
Gross profit (%) 55% 21%
Adjusted gross margin 39,521 11,421
Divided by revenues 71,574 34,383
Adjusted gross profit (%) 55% 33%
Adjusted gross profit / Adjusted gross profit (%)
Adjusted gross profit is defined as revenues less cost
of materials excluding inventory write-downs.
Adjusted gross profit (%) is expressed as a
percentage of revenues.
Cost of materials excluding inventory write-downs
Cost of materials excluding inventory write-downs is
cost of materials and production service expenses
less inventory write-downs.
Inventory write-downs
Inventory write-downs are costs related to excess
inventory in relation to raw materials, semi-
finished goods, products and product lines that
are discontinued and/or in the process of being
discontinued.
ANNUAL REPORT 202481
ALTERNATIVE PERFORMANCE MEASURES
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), inventory write-
downs and sales and marketing incentive fee.
Adjusted operating expenses (Adjusted OPEX)
Adjusted operating expenses (Adjusted OPEX)
is defined as salaries and personnel cost and
other operating expenses excluding share based
remuneration as well as sales and marketing
incentive fee.
Operating expenses (OPEX)
Operating expenses (OPEX) consist of salaries and
personnel cost and other operating expenses.
Sales and marketing incentive fees
Sales and marketing incentive fees represent
accrued liabilities related to performance fees in
connection with progress on sales targets in China.
When reaching certain milestones, performance
fees are due to an external partner. The sales
and marketing fees liability estimate is based on
an assessment of progress of the achivement of
milestones as per each balance sheet date and
when such milestones are expected to be fulfilled.
(amounts in NOK 1,000) 2024 2023
Operating profit (loss) -46,068 -66,416
Added back depreciation and amortization 5,394 7,068
Added back impairment losses - 1,139
EBITDA -40,674 -58,209
(amounts in NOK 1,000) 2024 2023
Operating expenses (OPEX) 79,832 65,588
Deducted share-based remuneration (salary part) -2,776 -5,729
Deducted share-based remuneration (employer's tax) 1,637 -4,611
Deducted share-based remuneration (operating part) -452 -167
Deducted sales and marketing incentive fee -3,631 -
Adjusted operating expenses (Adjusted OPEX) 74,611 55,081
Added back share-based remuneration (salary part) 2,776 5,729
Added back share-based remuneration (employer's tax) -1,637 4,611
Added back share-based remuneration (operating part) 452 167
Added back inventory write-downs 363 4,042
Added back sales and marketing incentive fee 3,631 -
Adjusted EBITDA -35,090 -43,659
ANNUAL REPORT 202482
ALTERNATIVE PERFORMANCE MEASURES
DESIGNED BY TOTHEPOINT.CO.UK
NEXT BIOMETRICS GROUP ASA
NEXTBIOMETRICS.COM
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