Interim Report anuary to une 2021

Interim Report January to June 2021

Second Quarter

• Second quarter revenues at TNOK 952 (486)1.• Second quarter results after tax at TNOK -10 514 (-15 842).• Profit per share for the second quarter of NOK -0.32 (-0.62).• Cash flow from operations before financing at TNOK -12 385 (-12 367).

First Half Year

• Total revenues for the first half year TNOK 1 393 (880) ².• Results after tax at TNOK -26 935 (-31 590).• Profit per share for the first half year of NOK -0.82 (-1.25).• Cash flow from operations before financing and facilitation at TNOK -31 234 (-39 594).• Cash and cash equivalents amounted to TNOK 94 860 on the day of closing, 30 June 2021.

Significant events during the period

• 03 Feb 2021: VOPY selects Zwipe Pay ONE platform for its biometric payment cards.• 10 Feb 2021: Zwipe expands its Asia-Pacific and European footprints with four new customers.• 02 Mar 2021: Tag Systems steps up collaboration with Zwipe on Biometric Payment Cards.• 06 Apr 2021: Zwipe and KL HI-TECH to bring next-generation payment cards to India.• 07 Apr 2021: Be ys Pay selects Zwipe to bring Biometric Payment Cards in France and Benelux.• 12 Apr 2021: Zwipe Establishes Regional Presence in the Middle East & North Africa Region and India.• 28 Apr 2021: Zwipe releases public demo of Zwipe Pay ONE.• 10 May 2021: FSS selects Zwipe Pay ONE for Next-Generation Contactless Cards to be offered globally.• 11 May 2021: Zwipe and Beautiful Card Corporation to bring Zwipe Pay ONE biometric payment cards to markets in Asia. • 03 Jun 2021: MEPS selects Zwipe Pay ONE for Next-Generation Contactless Cards in the MENA region.• 16 Jun 2021: Silkways Card & Printing Ltd selects Zwipe to deliver Biometric Payment Cards in Bangladesh.• 18 Jun 2021: Zwipe Establishes Local Representation in Bangladesh.• 24 Jun 2021: Zwipe and Network International to deliver biometric payment cards to banks in the Levant region.

Significant actions after the period • 16 Jul 2021: ICPS partners with Zwipe to bring Biometric Payment Cards to Africa and Asia.• 23 Jul 2021: Zwipe Pay ONE under evaluation with Global Tier 1 Smartcard Manufacturer.• 03 Aug 2021: Zwipe receives USD 1.9 million commercial order from Beautiful Card Corporation.• 16 Aug 2021: MEPS to pilot Zwipe Pay ONE Biometric Cards with key executives at multiple Financial Institutions in Levant.

1 Comparative figures in brackets are for Q2 2020.² Comparative figures in brackets are for H1 2020.

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Zwipe Interim Report January to June 2021

Message from the CEO

Financials

Market and Operational update

Financial Statements

Notes

Table of content 03 - 04

05 - 07

08 - 13

14 - 19

20 - 24

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Message from the CEO

Continued strong progress

During the first half of the year, Zwipe Pay ONE and our compelling end-to-end offering continued to drive interest from all stakeholders in the payment ecosystem. Thanks to continued strong and growing global interest in biometric payment cards among Smart Card Manufacturers, Person-alization Bureaus, Payment Processors, and Financial Insti-tutions, we have expanded our ecosystem in all these cate-gories and will continue to further strengthen our foundation for future market success. During the period, we announced important new events and milestones:

• Delivery agreements with six smart card manufacturers, jointly delivering over 200 million payment cards annu-ally in APAC, India, and Europe. We also extended our agreement with TAG Systems (part of Austria Card Group), which delivers 100 million payment cards annually in key markets worldwide.

• Go-To-Market collaboration with leading payment ser-vice providers, notably Financial Software and Systems (FSS), Network International, and Middle East Payment Services (MEPS) which together manage over 800 million payment cards.

To proactively support our new customers and partners, we’ve taken many steps to strengthen our organization, including:

• The appointment of Ramzi Saboury as the GM for the MENA region. He has over 25 years of financial industry experience in this market and has successfully launched many payment solutions.

• Finalized collaboration agreements with Masterline and Sonali Intellect Ltd. to drive our business in India and Bangladesh, respectively.

In April 2021, we demonstrated the Zwipe Pay ONE platform with a demo card and a home enrollment solution. We successfully carried out EMV authenti-cated transaction at Point-of-Sale terminals in a test environment. The feedback from the market was highly positive as we were able to demonstrate that transactions could be executed quickly and reliably, providing a considerable improvement to user expe-rience, security, safety, and hygiene.

We have now passed almost all critical milestones and major risk points, with piloting and certification left before full commercialization and mass volumes.

Several of Zwipe’s smart card manufacturing part-ners have completed their internal testing processes and have begun small-scale manufacturing trials. In August 2021, we received our first commercial order for the Zwipe Pay ONE platform from Beautiful Card Corporation (in Taiwan). The net contract value is $1.9 million, marking the transition to a new phase on a very exciting journey for Zwipe. Deliveries are planned to begin in 2022. The order is a testament to how Zwipe Pay ONE is getting closer to a mass-mar-ket launch and how our global delivery set-up is getting ready to bring the next generation of payment cards to issuers, smart card manufacturers and pay-ment processors across multiple markets.

At the same time, and as part of our global ex-pansion plan, we have established wholly owned subsidiaries in the UK and Germany to support the global mass-market deployment of Zwipe Pay ONE powered payment cards.

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André Løvestam, CEO at Zwipe

Adding value through our unique and highly differentiated offer

The offer Zwipe brings to the market has proven highly attractive. It consists of the industry’s most integrated secure element, offering superior energy efficiency and biometric performance at highly competitive manu-facturing cost. Together with partners we manufacture our internally developed ISO module which integrates our secure element with our ISO contact plate and ultimately with our passive inlay. We provide methods and solutions for our customers to embed the fingerprint sensor during manufacturing of the biometric payment cards. Since our secure element is so advanced in its integration of capabilities that are otherwise provided by external components, our passive inlay allows for

our customers to manufacture the complete biometric card at industry-leading cost. In addition to our turn-key technology offering, we offer value-added services and insights in our end-to-end approach. The number of customers that have selected Zwipe Pay ONE is the best testament to the competitive nature of our unique and highly differentiated offer.

With strong market traction and a welcoming reaction from major industry players worldwide, Zwipe is on track to deliver on our ambitions and bring the next generation payment experience powered by biometrics to consumers globally.

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FINANCIALS

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Profit and Loss during First Half of 2021

Investments, Liquidity and Financial Position

Zwipe reported total revenues of TNOK 1 393 (880) during H1 2021, mostly related to the sale of payment products and services.

Operating expenses in the first half of 2021 were MNOK 28.0 compared to MNOK 32.4 in the first half of 2020. Excluding one-off costs in the first half of 2020 related to the third of four stages in our joint technology investments with Idemia (MNOK 10.6), operating expenses increased by MNOK 6.2 in the first half of 2021, according to plan. The increase in operating expenses was primarily related to high-er personnel expenses of MNOK 1.9, including in-creased expenses to the stock option program. In addition, costs to contractors have increased with MNOK 3.9. During the second half of 2020 and the first half of 2021, Zwipe has increased its staff (em-ployees and contractors) to meet the strong demand for the company’s solutions and to prepare for pilot-ing and deployment of our card payment solutions and services. Higher personnel and contractor ex-penses and depreciation are compensated by lower expenses on other operating expenses of MNOK 1.6.

During the first half of 2021, cash flow from operations and investments, before financing and facilitation, im-proved to MNOK -31.2 (-39.6). Adjusting for one-off payments in the first half of 2020 related to the joint technology investment with Idemia (MNOK 9.7) and the restructuring program (MNOK 2.3), the negative operating cash flow in the first half of 2021 increased by MNOK 3.6 compared to the first half of 2020. Hence, the underlying average monthly operating cash flow in the first half of 2021 was MNOK -5.2 (MNOK -4.6).

EBIT as of the first half of 2021 improved to MNOK -26.6 (-31.5). The results after tax were MNOK -26.9 (-31.6).

Zwipe has a strong portfolio of patents and in-house bio-metric technology development. The underlying value of these has only to a very limited degree been capitalized on the Balance Sheet. Total intangible assets are booked at MNOK 6.7. Production equipment, machinery, and fixtures are valued at MNOK 3.2.

On 30 June 2021,2021 cash and cash equivalents were MNOK 94.9, down MNOK 30.4 from the closing balance at the end of 2020 (MNOK 125.3), and down MNOK 14 from the closing balance at the end of the first quarter of 2021 (MNOK 108.9). The development in cash balance since year-end 2020 is mainly a result of the operational cash flow of MNOK -31.2 for the first half year of 2021.

Zwipe America Inc. was granted full forgiveness for the loan granted in the second quarter of 2020 of $248 000 (MNOK 2.1) through the Paycheck Protection Program (PPP). This means that there is no requirement for repayment of the loan and in-terest. In addition, Zwipe America Inc. was in the first quarter of 2021 granted a second bank loan of an additional $248 000 through the Paycheck Protection Program (PPP). This loan was also granted full forgiveness in August 2021.

Total equity was as of 30 June 2021 MNOK 98.2.

Risks and UncertaintiesZwipe is exposed to various types of market, operational and financial risks. Zwipe continuously monitors risk factors at a corporate and subsidiary level and takes appropriate action when needed to eliminate or mitigate any potential negative impact on operational and financial performance. Please refer to the Annual Report 2020 and prospectus dated 16 October 2020 for a more detailed description of risk factors. These are available at www.zwipe.com.

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Assurance by the board of directors

We confirm, to the best of our knowledge, that the con-densed set of financial statements for the period 1 Jan-uary to 30 June 2021 has been prepared in accordance with the Norwegian Accounting Act and accounting stan-dards generally accepted in Norway (NGAAP) and gives a true and fair view of the Zwipe Group's assets, liabili-ties, financial position, and results for the period.

We also confirm, to the best of our knowledge, that the financial report includes a fair review of important events that have occurred during the first six months of the fi-nancial year and their impact on the financial statements and any major related party transactions.

JÖRGEN LANTTO (sign.) CHAIRMAN OF THE BOARD

ANDRÉ LØVESTAM (sign.) CEO

DENNIS JONES (sign.) BOARD MEMBER

TANYA JUUL KJÆR (sign.) BOARD MEMBER

JOHAN BIEHL (sign.) BOARD MEMBER

DIDERIK SCHONHEYDER (sign.) BOARD MEMBER

STINA GRANBERG (sign.) BOARD MEMBER

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MARKET AND OPERATIONAL UPDATE

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Market DevelopmentBased on positive feedback from their trials of biometric payment cards, BNP Paribas and Credit Agricole recent-ly stated that they are now expanding their offers. BNP Paribas will offer their biometric Premier VISA card in all branches to all customers, charging an additional fee of €24 per annum. BNP Paribas stated: "After a trial of the Thales biometric payment card and its positive outcome, we have now opened the offer to all our customers with confidence. This premium solution addresses several challenges such as convenience, safety and contactless".

This is good news for the entire industry as it confirms the inherent value proposition of biometric payment cards

and demonstrates the market is moving in the right direc-tion while putting increasing pressure on market players to ensure their long-term competitiveness.

It also raises the confidence level in the market poten-tial, with a tendency towards upward revisions of mar-ket projections. For instance, leading analyst firms UBS and Goode Intelligence released new sector reports suggesting, respectively, a 15% and 20% penetration for biometric payment cards by 2026. Furthermore, according to the latest Mastercard report, 9 out of 10 consumers will consider using biometrics and new pay-ment technologies by 2025.

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Recent market observations

• Zwipe conducted independent consumer insights across the US, Canada, the UK, Romania, Norway, and Sweden to capture end users’ payments preferences and views on biometric payment cards. Consumers’ feedback from these different markets has been remark-ably consistent:

- 7 out of 10 consumers in the US, Canada, the UK, Nor-way, Sweden, and Romania want a 100% touch-free pay-ment solution at the point of sale.

- Over 75% of consumers are concerned about touching the PIN-pad of the payment terminal due to the risk of infection.

- 60% of consumers are willing to pay an additional fee for biometric cards (without any other benefits).

- Contactless cards remain the most popular means of in-store payments.

- 79% of consumers would like their next payment cards to be biometric.

These data points are consistent with other studies done by Idemia, G&D/ Goode Intelligence, and others.

• A study of 2.000 consumers in the UK by Zopa³ found that 30% of lost debit cards had money stolen through un-authorized contactless transactions. The victims lost £40 each on average on contactless fraud. As the contactless limit is due to be increased to £100 this year, UK banks now fear a potential fraudulent spending spree, and 67% of consumers are worried about contactless fraud. In this context, the biometric payment cards deliver peace of mind with their state-of-the-art security capability.

³ Zopa claims Brits set to lose 13 million bank cards this summer | moneynet.co.uK

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COVID-19 has provided an even greater push for in-novation in payments

Cards continued to grow and remain the most pop-ular means of payment in most regions of the world, leading to a projected 32% growth in the number of cards in circulation from 2018 to 2023. This was cap-tured in great detail by the Global Payments Repor⁴ from FIS, supported by an analysis from PYMTS and Idemia⁵ in August.

• Projections to 2023 reflect a 32.5% volume increase in card issuance.

• Contactless cards are being emphasized for health, se-curity, and safety. Banks are issuing more contactless cards and sometimes even re-carding to add different functionalities to improve the payment experience.

⁴ Home | Global Payments Report 2021⁵ www.pymnts.com/wp-content/uploads/2021/08/PYMNTS-Digital-Card-Usage-August-2021.pdf

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Operational DevelopmentCommercial progress

Following the significant progress in 2020, Zwipe during the first half further expanded its network of smart card manufacturing customers while also strengthening ex-isting partnerships – here are more details:

• Swedish fintech Vopy, a provider of embedded fi-nancial services globally for telecom and financial in-stitutions, selected the Zwipe Pay ONE platform for its biometric payment cards.

• Zwipe announced the finalization of four new partner-ships with prominent card manufacturers in Asia-Pa-cific and Europe. The combined annual card shipment from these new customers is more than 1 billion, of which payment cards constitute more than 150 million.

• Tag Systems, a leading provider of payment cards (and part of AUSTRIACARD Group), decided to strengthen its collaboration with Zwipe to bring the most advanced new biometric payment cards to issu-ers in Europe, Middle East, and North America. The group delivers 100 million payment cards each year. Tag Systems also placed a small initial order for Zwipe Pay ONE.

• KL HI-TECH, the 2nd largest payment card manu-facturer in India selected the Zwipe Pay ONE platform to deliver biometric payment cards to its clients in In-dia, and key international markets. KL HI-TECH serves some of India's largest banks and delivers approxi-mately 30 million payment cards per year.

• French payment solutions provider be ys Pay selected Zwipe to offer biometric payment cards to the French, Bel-gian, Luxembourg, and Dutch markets. be ys Pay is an integral part of the international be ys ecosystem, present on three continents with more than 3 000 employees.

• To strengthen its strategic engagements in the Mid-dle East and Africa (MEA) and India, Zwipe has ap-pointed Ramzi Saboury as General Manager for the Middle East and North Africa (MENA) Region and Mas-terline as Strategic Business Partner in India and other selected markets in the MEA region.

• FSS, Asia's largest payment processor, selected Zwipe to deploy ZPO Biometric Cards globally. FSS is one of the world's most significant actors within cards and payments services to banks managing a portfolio of >800 million cards. FSS and Zwipe will work to ini-tiate pilots and early commercial deliveries from later in 2021.

• Beautiful Card Corporation has completed rigorous tests of Zwipe Pay ONE with very good results. They will scale up production with the aim of delivering pi-lots and commercial deliveries before the end of 2021.

• Middle East Payment Services (MEPS) will bring next

generation contactless payment cards in the MENA region by combining MEPS’s Issuance Platform with our Zwipe Pay ONE biometric card platform. MEPS is aiming to make BPCs available for piloting and com-mercial deployment during H2 2021.

• Silkways Card & Printing Ltd (Silkcard) selects Zwipe to deliver Zwipe Pay ONE powered biometric payment cards in Bangladesh. Silkcard will manufacture and personalize biometric card payments for issuer clients while Zwipe will help the banks through all stages of pilot, launch, and mass-market rollout.

• Zwipe establishes local representation in Bangla-desh, appointing Sonali Intellect Limited as sales and strategic business development partner to help banks, card personalization bureaus, and processors to sup-port Zwipe Pay ONE cards with the ambition to deliver pilots later this year.

• Network International (NI) selects Zwipe to deliver biometric payment cards to banks in the Levant region. Zwipe will provide support, and cards will be delivered by a 3rd party SCM; thus, NI can focus on delivering Zwipe Pay ONE powered cards to issuers.

After the period, Zwipe also announced the following: .

• ICPS, a leading international card payment proces-sor and card personalization bureau, will bring Zwipe Pay ONE enabled biometric payment cards to banks across Africa and Asia. Zwipe will provide a Biometric ISO contact plate module, Passive inlay, Fingerprint sensor, OS license, and enrolment sleeves.

• A Global Tier 1 smartcard manufacturer is evaluating Zwipe Pay ONE components for inhouse manufactur-ing of biometric payment cards.

• Zwipe receives a commercial order of USD 1.9 mil-lion from Beautiful Card Corporation. The order covers the supply of modules, sensors, and inlays, enabling BCC to be one of the first manufacturers to bring sig-nificant volumes of this next generation of biometric payment cards to market.

• MEPS and Zwipe announce the launch of a pilot of Biometric Payment Cards based on the Zwipe Pay ONE platform to top-level executives and key decision mak-ers at up to 20 banks and issuers in the Levant region.

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Technical Progress

Zwipe’s engineering team continued to progress signifi-cantly with its technology platform for biometric payment cards, Zwipe Pay ONE, through the first half of 2021. The Zwipe ISO contact plate module and passive inlay have been manufactured in pilot volumes and passed success-ful lamination trials with lead customers. We also engaged with equipment manufacturers in the field of card produc-tion and provided components for implanting trials.

Zwipe built sample cards and publicly demonstrated en-rolment and demo transactions using point-of-sale termi-nals with a test acquiring infrastructure.

Having multiple Enrolment Solutions is a key deliverable for Zwipe Pay ONE. Zwipe has continued to progress its development of mobile enrolment solutions, in addition to other developments such as sleeves, envelopes (pull-out cardboard enrolment solutions) and in-branch tablets.

The partnerships with Idemia and Idex are progressing well, and Zwipe has taken important steps to secure supply of all key components for its products through 2022 and beyond.

Certification and preparations for mass volume roll out

As a component and technology provider, Zwipe does not seek payment scheme certification for the finished card product. It is our customers – the smart card manufactur-ers – who seek card certification, called Type Approval.

To simplify the process for our customers, Zwipe plans to secure a component level certification from schemes that our customers can reference, which will significantly sim-plify their application process. Because Zwipe will have already performed the majority of the required testing, the customer can leverage the test results from Zwipe, hence their scope for testing will be greatly reduced.

To confirm the design before certification testing, Zwipe is undergoing pre-testing, called “debug testing”. In these debug tests, the same certified laboratories perform a subset of the tests required for certification. Debug test-ing is typically performed for the most critical items, such as interoperability with multiple brands and generations of payment terminals. We have already performed such pre-tests at accredited test labs with excellent results.

Organizational development

At Zwipe, the team drives customer satisfaction and are viewed as the key to our ongoing success. To unify and strengthen our team, we have completed a culture-build-ing program where all employees have shaped our core values (Innovative, Collaborative, Adaptable, and Pas-sionate) and winning team culture. In addition, the man-agement team and employee representatives have de-fined important brand attributes that will help sharpen our brand story to help us stand out from the crowd even more.

We have strengthened our team across all functions during the first half-year – commercial, technical, opera-tional, and regional sales & support. We were particular-ly pleased to welcome John Goodale as our new Chief Commercial Officer. John Goodale has a long and proven track record from one of the world’s largest processors, TSYS, and professional services at KPMG and DMR. He leads Zwipe’s engagement and conversion efforts with smartcard manufacturers globally and supports engage-ment with issuers and selected go-to-market partners to strengthen Zwipe’s position. To effectively serve our growing partner network and issu-ers, we have strengthened our presence in MENA region, India and Bangladesh. As we continue our path towards commercialization, we are pleased to see further strengthening of our board of directors with two leading payment and technology pro-fessionals:

- Tanya Juul Kjær is head of Payments at Tink. Previous-ly she was leading the Checkout product area at H&M Group. She has worked in the fintech industry for most of her career, including various product and leadership roles at Klarna, and as product director at iZettle (now part of PayPal).

- Stina Granberg has worked in the Fintech industry for the past seven years, most recently in the position as Head of Customer Services for Regional Businesses at Worldline and Chief Operating Officer at Bambora, since November part of Worldline group. Before joining Bambora in 2018, she worked at Klarna from 2014 to 2018. She also has a varied background in the Fast-Moving Consumer Goods and Retail Industries.

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FINANCIAL STATEMENTS GROUP AND PARENT COMPANY

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Income Statement(Amounts in 1000 NOK)

H1 2021 H1 2020 FY 2020 Note H1 2021 H1 2020 FY 2020

Operating Income1 001 862 1 655 1 Sales revenue 1 001 862 1 655

392 18 182 1 Other operating income 93 0 01 393 880 1 837 Operating income 1 094 862 1 655

Operating expenses427 212 4 808 COGS 427 212 4 808

8 804 6 900 18 973 6 Payroll expenses 7 532 3 241 11 8941 198 766 2 008 2,3 Depreciation, amortization & impairment 1 107 766 1 990

17 579 24 511 37 947 Other operating expenses 18 808 28 365 45 36828 008 32 389 63 736 Operating expenses 27 874 32 584 64 061

-26 615 -31 510 -61 899 Operating profit/loss -26 780 -31 722 -62 405

Financial income and expenses0 26 148 Other interest income 0 26 148

128 987 441 Other financial income 128 987 4411 2 3 Other interest expenses 1 2 3

417 1 032 569 Other financial expenses 417 1 032 569-290 -21 17 Net financial income and expenses -290 -22 17

-26 905 -31 531 -61 882 Results before tax -27 070 -31 744 -62 388

30 59 191 Tax expense 0 0 0-26 935 -31 590 -62 073 Results for the year -27 070 -31 744 -62 388

Profit(+)/Loss(-) for the year attributable from:-26 935 -31 590 -62 073 Share premium reserve -27 070 -31 744 -62 388

0 0 0 Uncovered loss 0 0 0-26 935 -31 590 -62 073 TOTAL -27 070 -31 744 -62 388

32 982 685 25 525 261 32 906 576 Number of shares end of period32 929 583 25 259 373 27 367 556 Average number of shares in the period before/after dilution

-0,82 -1,25 -2,27 Profit pr. share before/after dilution

Zwipe Group Zwipe AS

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Balance Sheet(Amounts in 1000 NOK)

H1 2021 H1 2020 FY 2020 Note H1 2021 H1 2020 FY 2020Assets

Long-term Assets

Intangible Assets6 716 7 271 7 359 3 Research and Development 6 716 7 271 7 3596 716 7 271 7 359 Total Intangible Assets 6 716 7 271 7 359

Fixed Assets 3 192 2 538 2 568 2 Equipment, fixtures and fittings 3 117 2 538 2 4873 192 2 538 2 568 Total Fixed Assets 3 117 2 538 2 487

Financial Assets0 0 0 Investment in subsidiaries 386 386 386

437 493 436 Other financial receivables 437 493 436437 493 436 Total Financial Assets 823 879 822

10 345 10 302 10 362 Total Long-term Assets 10 655 10 688 10 668

Current Assets

Inventories493 4 012 313 Inventories 493 4 012 313493 4 012 313 Total Inventories 493 4 012 313

Receivables701 455 72 Accounts receivables 701 455 72

2 931 9 162 1 361 Other receivables 4 051 8 775 1 1893 632 9 617 1 433 Total debtors 4 752 9 230 1 261

Cash94 860 43 168 125 255 Bank deposits, cash 86 956 36 064 119 06794 860 43 168 125 255 Total cash 86 956 36 064 119 067

98 984 56 797 127 001 Total Current Assets 92 201 49 306 120 640

109 329 67 099 137 363 Total Assets 102 856 59 994 131 308

Zwipe ASZwipe Group

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Balance Sheet(Amounts in 1000 NOK)

H1 2021 H1 2020 FY 2020 Note H1 2021 H1 2020 FY 2020Equity and liabilities

Equity

Paid-up Equity3 298 2 553 3 291 5 Share capital 3 298 2 553 3 291

94 877 47 251 119 309 Share premium reserve 90 129 42 099 114 69198 175 49 803 122 599 Total restricted equity 93 428 44 652 117 981

98 175 49 803 122 599 Total equity 93 428 44 652 117 981

Liabilities

Long-term liabilities2 125 2 419 942 4 Other long term liabilities 0 0 02 125 2 419 942 Total of other long term liabilities 0 0 0

Short-term Liabilities1 375 11 375 3 119 Accounts Payables 2 151 11 369 3 7012 700 744 2 464 Public duties payable 2 700 744 2 464

30 58 0 Tax payable 0 0 04 923 2 699 8 239 Other short term liabilities 4 577 3 228 7 1619 029 14 876 13 822 Total short-term liabilities 9 428 15 342 13 326

11 154 17 296 14 764 Total liabilities 9 428 15 342 13 326

109 329 67 099 137 363 Total equity and liabilities 102 856 59 994 131 308

Zwipe ASZwipe Group

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Cash Flow Statement(Amounts in 1000 NOK)

H1 2021 H1 2020 FY 2020 Note H1 2021 H1 2020 FY 2020

-26 935 -31 590 -62 073 Net Income / (Loss) before tax -27 070 -36 886 -62 389

0 0 0 Taxes paid 0 0 01 669 763 1 888 6 (+) Option cost no cash effect 1 669 2 559 1 888

-93 0 0 (-/+) Gain/Loss of on sale of assets -93 0 01 198 766 2 008 2,3 (+) Depreciation, amortisation & impairment 1 107 879 1 990-180 -908 2 791 (-) Change in Inventory -180 -459 2 791-651 155 255 (-) Change in Accounts Receivable -629 382 303

-1 567 -2 857 4 967 (-) Change in Other Current Assets -2 864 -20 4 676-1 736 -1 032 -7 549 (+) Change in Accounts Payables -1 550 -3 890 -6 882-1 849 -4 000 216 (+) Change in Current Liabilities -2 297 5 680 -2 686

-30 145 -38 703 -57 497 Net Cash use in Operating Activities -31 906 -31 754 -60 309

Cash Flows from Investing Activities-1 089 -891 -2 259 2,3 Intangible Assets and Capital Expenditures -1 004 -2 788 -2 152-1 089 -891 -2 259 Net Cash Provided by (used in) Investing Activities -1 004 -2 788 -2 152

-31 234 -39 594 -59 756 Operational Cash Flow -32 910 -34 542 -62 461

Cash Flows from Financing Activities852 67 004 177 724 Equity Issue 852 120 069 177 724-52 -8 443 -16 313 Transaction cost not recognized over P&L -52 -8 002 -16 313

0 564 730 Repayment of loan 0 -15 126 564800 59 125 162 141 Net Cash Provided by Financing Activities 800 96 941 161 974

39 402 -365 Effect of Foreign Currency Translation

-30 396 19 932 102 020 Net Increase / (Decrease) in Cash and Cash Equivalents -32 111 62 399 99 513125 255 23 236 23 236 Cash and Cash Equivalents at Beginning of Period 119 067 9 302 19 554

94 860 43 168 125 255 Cash and Cash Equivalents at End of Period 86 956 71 700 119 067

-30 395 19 932 102 020 Net cash flow -32 111 62 399 99 513

Zwipe Group Zwipe AS

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Zwipe Group Share capital Share

premium Uncovered

loss Total equity

January 1st 2020 1 595 78 830 0 80 426Proceeds from issue of shares 1 695 109 024 110 720Issue costs -8 199 -8 199Uncovered loss 0Annual net profit/loss -62 073 -62 073Share based compensation 1 888 1 888Other changes in equity 0Currency effect -163 -163December 31st 2020 3 291 119 309 0 122 599

Proceeds from issue of shares 8 844 852Transaction cost -4 -4Share based compensation 1 669 1 669Other changes in equity -20 -20Net profot/loss -26 935 -26 935Currency effect 15 15June 30th 2020 3 298 94 877 0 98 175

Zwipe AS Share capital Share

premium Uncovered

loss Total equity

January 1st 2020 1 595 74 366 0 75 961Proceeds from issue of shares 1 695 109 024 110 720Unregistered capital increase/decrease 0 0Issuance cost -8 199 -8 199Uncovered loss 0 0Annual net profit/loss -62 389 -62 389Share based compensation 1 888 1 888Other changes in equity 0December 31st 2020 3 291 114 691 0 117 981

Proceeds from issue of shares 8 844 852Transaction cost -4 -4Options 1 669 1 669Net profot/loss -27 070 -27 070June 30th 2020 3 298 90 129 0 93 427

Statement of changes in equity(Amounts in 1000 NOK)

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NOTES TO THE FINANCIAL STATEMENTS

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Accounting policies

Zwipe Group and Zwipe AS

Changes in accounting policies

There has not been any accounting policy change in H1 2021.

NOTESAll amounts are presented in 1000 NOK

Note 1 Revenues

Activity distribution H1 2021 H1 2020 2020 H1 2021 H1 2020 2020

Revenues from sale of goods and services 1 001 862 1 655 1 001 862 1 655

Revenues from sub lease of offices 0 0 0 299 0 141

Gain on sales of fixed assets 93 0 0 93 18 40Total 1 094 862 1 655 1 393 880 1 836

Revenues from sale of goods and services H1 2021 H1 2020 2020Payment products 633 862 1 574 Payment services 368 - 81 Total 1 001 862 1 655

Geographical distribution H1 2021 H1 2020 2020Norway 246 - 81 Other countries 756 862 1 574 Total 1 001 862 1 655

Note 2 Fixed assets

Office machinery Tools

Machinery and plant in

progress Total Acquisition cost 01.01.2021 444 7 149 457 8 050Additions 89 949 273 1 311Transfers 0 232 -232 0Skattefunn/Horizon 2021 0 -326 0 -326Disposals 0 0 0 0Acquisition cost 30.06.2021 533 8 003 499 9 035Accumulated depreciation/ impairment 30.06.2021 386 5 532 0 5 918Book value 30.06.2021 147 2 472 499 3 117

Depreciation in the year 21 335 0 356Impairment in the year 0 0 0 0Total Depreciation/impairment in the year 21 335 0 356 Depreciation plan Linear LinearEconomic useful life 3 year 5 year

Zwipe AS & Group

Zwipe AS & Group

The financial statements have been prepared in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway. All notes of importance for substantiation of the accounts are included.

Group

Zwipe AS

Zwipe AS

22 Zwipe 2021


Office machinery Tools

Machinery and plant in

progress Total Acquisition cost 01.01.2021 543 7 149 457 8 148Additions 174 949 273 1 396Transfer 0 232 -232 0Skattefunn/Horizon 2021 0 -326 0 -326Disposals 0 0 0 0Acquisition cost 30.06.2021 717 8 003 499 9 218Accumulated depreciation/ impairment 30.06.2021 495 5 532 0 6 026Book value 30.06.2021 222 2 471 499 3 192

Depreciation in the year 112 335 0 447Impairment in the year 0 0 0 0Total Depreciation/impairment in the year 112 335 0 447 Depreciation plan Linear Linear

Economic useful life 3 year 5 year

Note 3 Intangible assets

Research and development

Concessions, patents etc.

Research and development in

progress TotalAcquisition cost 01.01.2021 14 180 4 108 7 398 25 686Adjustment acquisution cost -3 0 0 -3Additions 0 0 0 0Transfer 7 398 0 -7 398 0Skattefunn/Horizon 2021 112 0 0 112Disposals 0 0 0 0Acquisition cost 30.062021 21 686 4 107 0 25 793Accumulated amotization/ impairment 30.062021 14 932 4 108 38 19 078Adjustment acc. Depreciation/impairment 30.06.2021 39 0 -39 0Book value 30.062021 6 715 0 1 6 716

0Amortization in the year 752 0 0 752Impairment in the year 0 0 0 0Total Depreciation and amortization in the year 752 0 0 752 Depreciation plan Linear Linear

Economic useful life 5 year 5 year

Note 4 Long Term Debt

Zwipe Group

Zwipe AS & Group

Zwipe America Inc. was granted a bank loan of $248 000 in Q2 2020 through the Paycheck Protection Program (PPP). The loan was fully forgiven in June 2021. The loan forgiveness is accounted for as cost reduction.

Zwipe America Inc. was granted a second bank loan of $248 000 in Q1 2021 through the Paycheck Protection Program (PPP). The loan is at 1% interest rate with maturity date February 2026 .Zwipe may be eligible for partial or full loan forgiveness given fulfilment of a set of requirements. The loan was fully forgiven August 2021.

23 Zwipe 2021


Note 5 Share capital and shareholder information

Share capital Holding Nominal value Book valueOrdinary Shares 32 982 685 0,1 3 298 269

The company has one class of shares and all shares come with full voting rights.

The share capital is owned by the following shareholders as per 30.06.2021

Shareholders Holding StakeVasastaden/Niclas Eriksson and related parties* 5 583 527 16,93 %Lars Windfeldt and related parties** 1 936 816 5,87 %Coeli Wealth Management AB 1 274 149 3,86 % Nominee accountFörsäkringsaktiebolaget Avanza Pension 1 170 059 3,55 %Energetic AS*** 916 000 2,78 %Jörgen Lantto*** 866 666 2,63 %Nordnet Pensionsförsäkring AB 747 811 2,27 %Skandinaviska Enskilda Banken AB 570 640 1,73 % Nominee accountConcito AS**** 568 260 1,72 %Skandinaviska Enskilda Banken AB 562 843 1,71 % Nominee accountNordnet Bank AB 443 587 1,34 % Nominee accountJ.P Morgan Securities PLC, W8IMY/QDD 381 848 1,16 %Avanza Bank AB 357 313 1,08 % Nominee accountVätterleden AB 350 000 1,06 %Ålandsbanken i Ägares Ställe 323 766 0,98 % Nominee accountFeat Invest AB***** 319 780 0,97 %Dnb Bank ASA, Sec Lending 300 277 0,91 % Nominee accountTelecom AS 255 000 0,77 %Prog Seed AS 241 338 0,73 %Prinvest AS 240 307 0,73 %Other shares 15 572 698 47,21 %Sum 32 982 685 100,00 %

* Vasastaden / Niclas Eriksson owns shares through various companies and is also represented by family members.

** Lars Windfeldt owns shares through various companies and is also represented by family members.

*** André Løvestam, CEO of Zwipe, owns shares through Energetic AS.

**** Zwipe chairman of the board. ***** Johan Biehl is a Zwipe board member and a board member of Feat Invest.

Management and board holdings Holding StakeAndré Løvestam, CEO (through Energetic AS) 916 000 2,78 %Lars Kristian Solheim, CFO 90 000 0,27 %Dr. Robert Müller, CTO 48 572 0,15 %Bishwajit Choudhary, EVP Financial Instritutions and Alliances 25 500 0,08 %Eric Mercer, CEO of Zwipe America, Inc. 5 500 0,02 %Jörgen Lantto (Chair) 866 666 2,63 %Johan Biehl 212 883 0,65 %Dennis Jones 65 228 0,20 %Diderik Schonheyder 5 302 0,02 %Sum 2 235 651 6,78 %

Zwipe AS & Group

24 Zwipe 2021


Note 6 Share based payments

Strike price Options

Weighted Average

remaining contractual life

Weighted Average Strike

PriceVested options

30.06.2021


Price

6,54 205 000 3,00 6,54 102 498 6,54 7,85 400 000 3,00 7,85 133 332 7,85

10,00 485 723 1,00 10,00 478 329 10,00 16,20 135 000 2,00 16,20 90 000 16,20 19,75 160 000 3,51 19,75 26 665 19,75 22,23 55 000 3,51 22,23 18 328 22,23 25,00 170 000 1,00 25,00 170 000 25,00 29,33 55 000 3,51 29,33 9 166 29,33 30,13 251 000 4,00 30,13 0 0,00

1 916 723 1 028 318

Overview of outstanding options Options


Price Outstanding opening balance (01.01.2021) 1 800 943 13,12Granted 312 000 29,60Exercised -78 610 11,35Forfeited -117 610 22,46Expired 0 0Outstanding closing balance (30.06.2021) 1 916 723 15,30 Vested closing balance 1 028 318 13,04

The calculations are based on the following assumptions: There is no change in assumptions as used per Annual Report 2020.

Note 7 Subsequent events

Note 8 Reporting

Upcoming reporting days Financial Year 2021 Annual Report February 23, 2022.Annual Statement Release February 23, 2022.

This report has not been reviewed by Zwipe's auditors.

Zwipe America Inc. was granted a second bank loan of $248 000 in Q1 2021 through the Paycheck Protection Program (PPP). The loan was fully forgiven August 2021.

The company has a share-based option programme covering certain employees in senior positions, members of the board and nomination committee members. 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. All options are conditional that the grantee remains employed. All vested options may be exercised in any period prior to the expiry date. The options vest every 6 months from grant date and may be exercised at vesting. As of 30.06.2020, 29 persons were included in the option programme.

The fair value of the options is set on the grant date and expensed over the vesting period. The fair value of options awarded is estimated using the Black-Scholes option pricing model. NOK 2.5 million have been expensed per H1 2021.

Vested InstrumentsOutstanding Instruments

Zwipe AS

Contact Information

The parent company Zwipe AS is a private limited liability company incorporated and existing under the laws of Norway. Zwipe AS has one wholly owned subsidiary, Zwipe America Inc., a corporation incorporated under the laws of the State of Delaware in the

United States. The company has no other ownership positions.

Zwipe ASRådhusgata 23

0151 Oslo, Norge

[email protected]

www.zwipe.com

Zwipe’s Certified Adviser is FNCA AB, [email protected], +46 8 528 00399

Documents

Interim Report anuary to une 2021