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IDEX - Enabling the Mass Market for Secure ID


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IDEX - Enabling the Mass Market for Secure ID

  1. 1. IDEX ASAEnabling the mass market for secure ID8th April 2013Hemant MardiaKristian WiermyhrCONFIDENTIAL
  2. 2. IDEX MISSIONTo be the leadingsupplier offingerprint sensortechnology for themass marketSecure and Simple IDby biometricauthentication ofevery device you ownIDEX VISIONCONFIDENTIAL 2
  3. 3. THIN & FLEXIBLELOW COST ACCURATE & SECUREIDEX’ OFFERING:SMARTFINGER®Demand for fingerprint sensors is on the cusp of explosive growthto a $multi-billion mass market driven by smartphone adoptionPrecedence on core patents for best in class sensor technologyenabling low cost, secure & accurate fingerprint recognitionTransformation of market by Apple: 80% of smartphone marketaddressable by only IDEX and 2 other principal vendorsOnly sensor technology for emerging ID and smart card marketIDEX BUSINESS PROPOSITION1234CONFIDENTIAL 3
  4. 4. 2013 -IDEX POSITIONED FOR GROWTHSwipe sensorpatentFingerprint sensordemonstratorSilicon sensorPolymer sensor R&DKey patentsCross licensing ST,UPEK & IDEXListed Oslo AxessCard demonstratorVolume MOUs forcards and bag locksSmartFinger®TechnologyPioneeringsensor IP Core patent eraCommercialisation formobile and cardsStrengthenedleadership teamMobile commspartnershipMass market cost &manufacturing set upProductisationfor CardsRemaining vendors:Apple acquire Authentec (UPEK)IDEX, Fingerprint Cards, Validity>$50M invested in best in class fingerprint sensor technologySurviving mass market technology:Capacitive: deployed in volumeMultiple sensor technologies:Capacitive, optical, thermal, pressureKey originators:IDEX, AuthenTec, ST, UPEK, Fingerprint Cards,Infineon, Fujitsu, Sony, Atmel, Hitachi,NEC, Atrua, Veridicom2010-20122008-20092000-20071996-1999CONFIDENTIAL 4
  6. 6. THE GAMECHANGER: APPLE’S PLANS?• Fingerprint-sensor in mobile devices:- Unlock phone- Authentication of the user- Mobile Payments- Bring-Your-Own-Device (BYOD)- Personalization of servicesNOW: HOME BUTTON SENSORNEXT: “HOLY GRAIL”IMAGING THROUGH GLASSONLY IDEX patented technologyenables the sensor IN the screenCONFIDENTIAL 6
  7. 7. Leverage uniquely strong IPand patent portfolio: safehavenProven low cost, thin, secureand accurate sensors andalgorithmsStrengthened leadership teamto deliver commercialexploitationDeveloping major global OEMpartners for mass marketscalingLimited competitors with highbarrier to entry in a largemarketIDEXpartnershipsMOBILEDEVICESINTERNETOFTHINGSCARDSID &SMARTIDEX GO TO MARKET STRATEGYNew MASS market services enabled by low costbiometric authenticationCONFIDENTIAL 7
  8. 8. • Smartphones 1.2B shipments by 2015• tabs/PC 0.75B 2013• Non telecoms cards 2.2B shipments 2013• Internet of Things 25B connected by 2015IDEX MASS MARKET OPPORTUNITYTHEBILLIONDOLLARPLAY:Identity is the new moneyDavid Birch, UK consultant and media personalityYour smartphone will be your wallet and biometrics willkeep your valuable information secureDaniel Burrus, leading futurist on tech trends“ ”“”CONFIDENTIAL 8
  9. 9. MOBILE PHONE MARKET SCALE1.75B mobile phones 2012 (Gartner)2.25B forecast 2017 (IDC)Rapid smartphone penetration majority now to ~70% in 2017>80% forecast share not captive to Apple1078543.516.21513.7192Mobile Sales by volume Q4 12SamsungNokiaAppleZTELGHuaweiOthers114.743.57.36.236Smartphone Sales by volume Q4 12AndroidAppleRIMMicrosoftOther1.2 Billion unit market accessible by IDEX in 2017CONFIDENTIAL 9
  10. 10. NEXT: ID AND SMART CARD REVOLUTION• Security and privacy in the digital world• IDEX SmartFinger Film®; the onlybiometric sensor thin enough to complyto ID/smartcard form factors3400420047005200 545075088010501260148016019024029035001000200030004000500060007000800090002009 2010 2011 2012f 2013fMillionunitsEurosmart Secure Device shipments estimatesOthersGovernmentBankingTelecom4 5205 5206 2957 0957 665+13%+8%CONFIDENTIAL 10
  11. 11. • Mobile communications- Unprecedented Billion unit market catalysed by Apple acquisition- Apple transforms sensor market but restricts supply internally- Other handset manufacturers rapidly developing smartphones with sensors- 80% market available: IDEX strong position with core patents & Apple Xlicence- Terms agreed with a global mobile comms partner in Q1 13• Cards: ID and contactless- Only IDEX offer thin form factor meeting Card standards- MOU for China wide ID Q4 2012; forecast $6M 2014, immense volume 2015- Gemalto: largest card manufacturer; e-Go consortium “touch access”- Multiple other partners• Internet of things:- OEM Contract for tier 1 bag lock program Q4 2012; volumes expected 2014- Future Electronics: fourth largest electronics distributor; IDEX global channel- Multiple other partnersTHE FUTURE FOR IDEXCONFIDENTIAL 11
  12. 12. • IDEX most complete patent portfolio in capacitive fingerprint sensing outside Apple• “First-to-file” patents covering the fundamentals of these low cost sensors• 14 patent families granted and 3 in filing since 1997• IDEX patents have been assessed and verified in a litigation between IDEX and UPEK(acquired by AuthenTec)/ST Microelectronics and a cross licence agreedIDEX CORE PATENT STRENGTHCORE PATENTS IDEX APPLE/AUTHENTEC APPLICATIONON THE FLY IMAGERECONSTRUCTION  Most accurate fingerprintmatching with swipe sensorANY MATERIAL SENSOR XThinnest, flexible sensor inmultiple form factorsTHROUGH MATERIAL SENSING(VIAS)  XSensor IN glass screenACTIVE ELECTRODE Fundamental to low cost , smallswipe and touch sensorsIDEX fundamental patent coverage vs competitors is highly attractive to customersCONFIDENTIAL 12
  13. 13. Picture by James SullivanHuman fingerprint : ~ 0,6 mmIDEX single line sensorarray : 0,05-0,07 mmTHE LANDSCAPE WE EXPLORECONFIDENTIAL 13
  14. 14. • SmartFinger® offers unsurpassed image quality and biometric performance• On the fly imaging: wide range of finger swipe speeds, directions and movement• Sensing through material including glass using VIAS• Thinnest sensor in flexible materials: only sensor meeting form factor for cards• Protected by extensive patent portfolioAcquirefingerprintdataReconstructimageExtractfeaturesMatch vs.templateSmartFinger®sensorImage Algorithm Processing Secure chipYES/NO1040 1045 1050 1055 1060 1065 1070 1075 1080 1085 1090020406080100120140160180200line numbersignallevelimage channelcorresponding speed channelIDEX OFFERS A COMPLETERECOGNITION SOLUTIONCONFIDENTIAL 14
  15. 15. IDEX SENSORCOMPETITIVE ADVANTAGEKEY BENEFIT FEATURE IDEX Company A Company BSENSOR CARDINTEGRATIONUltrathin Flexible sensor *** x **SENSOR MOBILE DEVICEINTEGRATIONSmall sized, low pin count surfacemount sensor*** ** xSINGLE LINE, ROBUSTON-THE-FLY IMAGINGAlgorithm handles varying fingerdirections and movements*** x **BIOMETRICPERFORMANCEImage quality: lowest falserejection/false acceptance*** ** **ON-DEVICE SECURITY Compact algorithm allows secureon-device authentication*** x xTOUCH-SCREENIMPLEMENTATIONSensor-IN-glass solution *** x xLOW POWERCOSUMPTIONLow power fingerprint imagingand processing** *** *IDEX best in class technology forlow mobile devices and cardsCONFIDENTIAL 15
  16. 16. IDEX MASS MARKET OPPORTUNITY2015 Consumer Electronics Cards Other marketsIDEX mass market volumes expected 2014; design wins 2012/2013IDEX positioned for significant market share as one of three vendorsTotal Industry Revenue 3,95 Billion USDTotal Industry Revenue 2,0 Billion USD1 billion Consumer Electronics withfingerprint sensors sold ,ASP 1,1 USD(Consumer electronics includes smart phones, tablets, laptops, gamingconsoles etc)150 million cards, ASP 2,5 USD130 million other devices, ASP 4,5 USD20171,5 billion CE with fingerprintsensor sold ,ASP 0,9 USD700 million cards,ASP 2 USD400 million other devices,ASP 3 USDCONFIDENTIAL 16
  17. 17. IDEX INVESTMENT PROPOSITION• R&D investment and focus on emerging biometric market forsmart card/ IOT where highest performance i.esecurity/accuracy/speed/thin/flexible/low power are critical– Only vendor with a ISO card solution– Now well positioned for smartphone explosion– Billion unit and billion dollar market opportunities• Best in class swipe sensor performance• Unique “holy grail” sensor in glass• Fully protected by early patents and Apple/Authentec xlicence• Now marketing to smartphone sector for the first time• Manufacturing being established for volume & low cost• Product and technology roadmap to support major partnersCONFIDENTIAL 17
  18. 18. IDEX INVESTMENT PROPOSITIONIDEX AND FINGERPRINTCARDS SHARE PRICE INCREASE SINCE APPLE BOUGHT AUTHENTECCusp of significant growth exploiting leading IP platform in fingerprint sensors• Executing a global partner strategy to exploit mobile market during 2013• Exploitation of high value added ID/smartcard and “Internet of things” following• Investment to scale team and products to support market leading partners• Significant value growth from mass market opportunity with limited competition- IDEX $100M vs Fingerprints Cards $300M market cap Mar IDEXCONFIDENTIAL 18
  19. 19. • 2012 limited R&D revenues of £0.5M• Restructuring in 2012; loss £3.6M principally R&D investment• 2013 expansion of R&D and sales channels: estimated opex• TAX LOSS CARRYFORWARD ≈£35M- 28% tax rate, no ageing restriction• LISTED IN OSLO- 1,185 shareholders, 95 percent Norwegian- 28% shareholding outside NorwayPROFIT AND LOSS STATEMENT-5000-4000-3000-2000-1000010002012 2011P&L (£k)Revenue EBIT0100020003000400050002013E 2012 2011Operating Expense (£k)R&D Sales G&ACONFIDENTIAL 19
  20. 20. • NO FINANCIAL DEBT, FUNDED BY EQUITY• CASH 31 DEC 2012 £2.2M• WORKING CAPITAL VIRTUALLY NIL• 2013 funding for business development ahead ofrevenue step change 2014CASHFLOW STATEMENT£k 2013 2012 2011Net cash flow from operational activities -£3,211 -£3,815Net cash provided by financing activities £3,090 £4,756Opening cash balance £2,204 £2,313 £1,395Closing cash balance £2,204 £2,313CONFIDENTIAL 20
  21. 21. • High barrier to entry due to fundamental patents and technology• Cross license with Apple on core patents• Building out an exciting roadmap for low cost sensors• A market ready for takeoff sparked by Apple• Mobile market now, card market tomorrow, IOT the future…• Limited competition in a multibillion volume market• Valuable IP and attractive valuation vs competitionSUMMARYCONFIDENTIAL 21
  23. 23. IDEX PATENT FAMILIES FOR “SINGLELINE” SWIPE FINGERPRINT SENSORSSENSOR MODULE• The fingerprint sensor measurementsystem• The implementation of IDEX’electronics chip• EP1292 227B1 and 7,184,581“SINGLE LINE” SWIPE SENSOR• Capacitive sensing principle• Image reconstruction based on singleline images• Measuring movement of finger• World wide exclusive licenses to IDEX• Essential for swipe sensors• EP0988614 and US 7,110,577 (andcontinuations)LIVE FINGER DETECTION• A system for characterization of thephysiological conditions of thehuman skin• A fingerprint sensor which also candetermine weather an object consistsof living skin• EP1503668 and US 7,856,262NAVIGATION AND POINTING TOOLS• Fingerprint sensor that also can beused for on-screen navigation andpointing, e.g. on mobile devices• EP1312037 and US 7,129,926• EP1328919B1 and 7,251,351FINGERPRINT SENSOR WITH SUBSTRATE VIAS• Sensing part and electronics separated• Allows for polymer and PC based sensors• Electronics optimized independent fromsensing part• Thin, bendable sensors for card integration• EP1303828 and US 7,251,351 (polymer)• SiliconCONFIDENTIAL 23
  24. 24. IDEX SINGLE LINE IMAGING VS. STITCHINGBASED ON MEASUREMENTOF FINGER MOVEMENT0 100 200 300501001502002503000 0 100 200 300 400BASED ON “STITCHING” OFPARTIAL IMAGESACCEPTEDFinger swipe direction +40Enrolled fingerprint - normal swipe directionCONFIDENTIAL 24
  25. 25. FINGERPRINT BIOMETRICS– SECURITY FOR MASS MARKETS• Added security by multifactor authentication:– Something you have; card– Something you know; password– Something you are; fingerprint• Fingerprint biometrics– Everyone has a unique fingerprint– Reliable and secure authentication– Compact readers, low cost and low powerconsumption– Simple use for every-day, personal useFINGERPRINTS IS OBVIOUS CHOICE DUE TOLOW COSTIMMUNE TO ENVIRONMENTALPROVEN HERITAGE123CONFIDENTIAL 25
  26. 26. BALANCE SHEETBalance sheet 2012 2011Amounts in NOK 1,000ASSETSMachinery and office equipment 626 939Long-term receivables 332 325Total long-term assets 958 1 264Accounts receivable 17 19Other receivables 3 715 3 161Prepaid expenses 512 343Total receivables 4 244 3 523Cash and bank deposits 19 833 21 462Total cash and bank deposits 19 833 21 462TOTAL ASSETS 25 035 26 249EQUITY AND LIABILITIESTotal paid-in-capital 143 949 111 632Other equity (125 631) (92 266)Total equity 18 318 19 366Accounts payable 2 561 2 230Public duties payable 906 471Other short-term liabilities 3 250 4 182Total liabilities 6 717 6 883TOTAL EQUITY AND LIABILITIES 25 035 26 249CONFIDENTIAL 26
  27. 27. BIOS LEADERSHIP TEAMDr. Ralph Bernstein: CEO & CTO. At IDEX from 2006 bringing Smartfinger IP technology to market and achieving listing onOslo Stock Exchange; Research Director in microsystems and nanotechnology and 15 years experience at Sintef, theleading R&D organisation in Norway. Ph.D in Physical Electronics from Norwegian Inst. Of Science and technology.Morten Opstad: Chairman at IDEX since 1997. Partner and Chairman at Advokatfirma Raeder DA. Provided legalassistance with several technology innovation companies. Directorships include Thin Film ASA and cXense AS.Erling Svela: CFO at IDEX since 2008. Extensive experience in various industries and listed companies. M.Sc in economics(Norway) and MBA from Henley. Certified European Financial Analyst.Øyvind Slogedal: VP Business Development. At IDEX since 2006 driving technology innovation, product roadmaps andsolutions with strategic partners. 15 years industrial experience. M.Sc in mechanical engineering (USA).Kristian Wiermyhr: VP Strategy. Joined IDEX in 2013 to support strategic partner projects and investor relations. 20 yearsexperience in financial sector in Norway and internationally. Served as senior partner in investment banks RS PlatouMarkets and ABG Sundal Collier.Inge Berge: IR Officer and business developer at IDEX since 2012. Formerly associated partner in the PR and consultingfirm First House. 20 years experience in the media industry as journalist, editor and owner including starting andmanaging three financial online businesses. B.Sc in finance from BI Norwegian Business School.Robert Keith: Consultant for IDEX in 2013. Extensive strategic experience in investing in technology innovation businessesparticularly in Norway and dealing with international partners. Established track record of significant value creation.Dr Hemant Mardia: Strategy Consultant for IDEX in 2013. President of Axxcss Wireless Ltd. Formerly CEO at Filtronic Plc, aUK FTSE listed telecomms company. 28 years experience in technology and commercialising start ups, with leadershippositions in the telecoms, security and defence sectors. Ph.D in signal processing from Leeds University (UK).CONFIDENTIAL 27
  28. 28. TOP 20 SHAREHOLDERSName Number of shares Per centA.S. Holding A/S 77 225 875 25Charles Street International Ltd 37 107 236 12Colargol Invest AS 17 500 318 5.7Euroclear Bank S.A./N.V. (nominee) 16 997 966 5.5MP Pensjon 7 500 000 2.4Storebrand Vekst 7 385 514 2.4Hedger Management SA 6 000 000 1.9Lars Frithjof Rønne 5 700 000 1.8Sven Christian Rønne 4 760 953 1.5Marc OPolo Norge AS 4 613 148 1.5Six Sis AG (Nominee) 4 513 073 1.5Big Top Holding AS 3 500 000 1.1Stålhe Invest AS 3 257 282 1.1Harald Voigt 3 115 443 1Jens Andre Henriksen 3 070 000 1Jon Ola Frankplads 3 014 200 1Marit Høvding 2 947 342 1Simen Falck Engelstad 2 487 788 0.8Luum AS 2 284 696 0.7Egge Gård AS 2 156 550 0.7TOTAL 215 137 384 69.5CONFIDENTIAL 28
  29. 29. IDEX ASARolfsbuktveien 17,NO-1364 Fornebu,NorwayTHANK YOUPhone:(+47) 67 83 91 19EMAIL:mailbox@idex.noCONFIDENTIAL