Notes for P&L
Note 23 Financial risks, other factors of uncertainty and risk management
Group and Parent Company
The Group’s activities expose it to a variety of financial risks.
Financial risks mean fluctuations in the company’s earnings and cash flow due to variations in exchange rates, interest rates and risks relating to refinancing and credit issuance. The Group’s financial policy for managing financial risks has been prepared by the Board and comprises a framework of guidelines and rules in the form of risk mandates and limits for financing activities. Financial transactions and risks are managed by the Parent Company’s Finance function.
The objectives are to:
- Manage and control financial risks.
- Minimize the negative earnings impact of market changes in currencies and interest rates.
- Plan and ensure adequate liquidity for operating activities.
- Optimize the use of capital and cash flows.
Financing and liquidity risk
The Company is exposed to liquidity and financing risk, which refers to the risk that available cash and cash equivalents are insufficient to meet the Company’s payment obligations, or that additional financing cannot be obtained on acceptable terms and in a timely manner. The liquidity situation is affected by, among other things, developments in the Company’s operating activities, changes in working capital requirements, the implementation of planned cost adjustments, and external factors such as market conditions and access to capital. Less favourable payment terms, delayed customer payments or other deviations in cash flow may further increase the need for financing. During 2025, the Group executed its IP licensing strategy, generating material cash proceeds from the licensing and sale of technology rights. IP licensing is now an established component of the Group's revenue and cash flow generation, and the Board expects continued activity in 2026.
After the reporting period, the Company secured bridge financing of SEK 20 million in order to strengthen short-term working capital until completion of the merger described below. In addition, on 23 March 2026, the Boards of Directors of Fingerprint Cards and Precise Biometrics AB (publ) adopted a joint merger plan, pursuant to which the companies are to combine through a statutory merger whereby Precise Biometrics will absorb Fingerprint Cards. The merger plan was approved by the shareholders at the extraordinary general meeting held on 30 April 2026, and completion remains subject to the receipt of the necessary regulatory approvals.
Following completion of the merger, the combined company intends to raise approximately SEK 110 million through a rights issue to accelerate growth, capture identified synergies and support continued global expansion. The rights issue is subject to guarantee commitments totaling SEK 80 million, comprising SEK 45 million in guarantee commitments from several guarantors and a SEK 35 million underwriting agreement with DNB Bank ASA, in each case on customary terms.
The Board of Directors and management continuously monitor the Company’s liquidity development and evaluate various measures to strengthen its financial position, including cost adjustments, optimization of working capital and different financing alternatives.
Available liquidity in the Group at year end amounted to SEK 27.1 M (12.1). In accordance with the Finance Policy, there should always be sufficient cash and cash equivalents and confirmed credit lines to cover short-term liquidity requirements.
The company’s accounts payable amounted to SEK 10.1 M (39.9) and has a short maturity structure within 1-2 months.
A maturity analysis of financial liabilities is presented in note 20.
Taking into account the completion of the merger, the bridge financing secured after the reporting period and the planned rights issue, the Board sees no issues with the Group’s ability to continue as a going concern.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will vary due to changes in market prices. IFRS divides market risks into three types; currency risk, interest rate risk and other price risk. It is primarily currency risk that affects the Group, while the Group is not exposed to interest rate risk following the repayment of the convertible bonds during 2024.
The Group’s aim is to manage and control market risks within specific parameters and simultaneously optimize the results of risk-taking within specific parameters. These parameters are established with the aim of ensuring that market risks have only a marginal impact on the Group’s earnings and financial position in the short term (6-12 months). However, protracted changes in exchange rates will impact consolidated earnings in the longer term.
Currency risk
The risk that the fair value and cash flows of financial instruments will fluctuate when the value of foreign currencies changes. The main exposure is derived from the Group’s sales and purchases in USD. These currency risks comprise the risk of fluctuations in the value of financial instruments, accounts receivables and accounts payable and the currency risk inherent in expected and contractual payment flows. Such risks constitute transaction exposure.
According to the Finance Policy, currency exchange risks should not be hedged. USD-denominated net surpluses are exchanged to SEK on a continuous basis. Net profit/loss for the year includes exchange rate differences amounting to a negative SEK 1,4 M (pos: 1,3) in operating profit/loss and a negative SEK 0.7 M (pos: 0.2) in the financial net.
Transaction exposure
As per the balance sheet date, the Group’s transaction exposure with regard to sales and materials was in the following currencies.
| SEK M | Net flows |
|---|---|
| 2025 | |
| USD exposure expressed in SEK and total | 48.0 |
| 2024 | |
| USD exposure expressed in SEK and total | 104.0 |
The transaction exposure has not been hedged.
Sensitivity analysis
A 10 percent change in the value of the Swedish krona against other currencies as of 31 December 2025, would result in shareholders’ equity and net profit for the period changing by SEK 5 M (11). The sensitivity analysis is based on all other factors remaining unchanged.
Credit risk
The Company does not normally use credit insurance. To limit credit risk, the Company applies established credit assessment procedures, including ongoing monitoring of customers’ payment history and financial position. To reduce exposure, where deemed appropriate, risk-mitigating measures are used such as advance payments and/or other payment terms (for example shorter payment terms or instalment payments). The Group also seeks to maintain a diversified customer base and has procedures in place to monitor and manage past-due receivables.
Capital management
The company aims to maintain a strong capital base to support the continued development of the business and to ensure financial stability. Our capital management policy aims to optimize the capital structure and ensure access to financing on competitive terms. To manage the capital, the company uses the following processes:
- Capital structure monitoring: Regularly reviewing and adjusting the capital structure to ensure that it is aligned with the company's strategic objectives and market conditions.
- Risk management: Identification and management of financial risks, including liquidity risks, to minimize potential adverse effects on the company's financial position.
- Financing strategy: Maintaining a diversified funding base through a combination of equity and other sources of funding to ensure long-term financial flexibility.
Other factors of uncertainty
The global macro environment remains volatile. The ongoing war between Russia and Ukraine, and related sanctions and countermeasures, may – even without material direct exposure – indirectly impact the Group through energy prices, inflation, interest rates, currency and market volatility, and disruptions to supply chains and logistics. In addition, escalating geopolitical tensions and armed conflicts in the Middle East – including the Israel–Palestine conflict and the ongoing military escalation between the U.S./Israel and Iran – contribute to heightened uncertainty and the risk of further volatility in energy and commodity markets. A more unpredictable trade policy environment, including new or expanded tariffs, sanctions and export restrictions, may result in higher costs, delays in supply chains, and weaker demand in certain end-markets. Developments in inflation and interest rates may also impact financing conditions, customers’ willingness to invest, and the Group’s cost base, and are monitored on an ongoing basis.