A message from our CEO – Egis investment & the upcoming EGM

Dear shareholders of Precise,

There are a lot of things happening in connection to the upcoming Extraordinary General Meeting, today September 5, which might be difficult to grasp when reading the regulatory papers. Therefore, I would like to further explain the different topics with my own words.

During the spring and summer of 2022, we have been discussing with Egis Technology how we together could develop our partnership. Egis has been an important customer to Precise for the last three years and, together, we have won important deals where Precise provides the software (fingerprint matcher) and Egis the hardware (optical sensor) in the mobile segment. Egis is a global leading sensor manufacturer (www.egistec.com) with important large customers such as Samsung, Hyundai, and Huawei, just to mention a few.

As a result of these discussions, Egis has committed to make a strategic investment in Precise. The investment has a lot of interesting rationales, of which the key aspects are:

  • Explore how we could improve our current mutual offering. The quality of our combined offering is very dependent of the understanding of each other’s delivery, i.e. the hardware and the software. If we improve the mutual product development process, we believe we would be able to improve our chances to win more business. This knowledge can also be used to improve Precise’s offerings and cooperation with other sensor manufacturers.
  • Explore new verticals and sensors. Both parties have ambitions to grow in segments beyond mobile and can benefit from each other’s success.
  • Capitalize on the growing market for Digital Identity. Precise has developed a solution for Digital Identity physical access, where an individual, through facial recognition, can be granted access to a site. Together with Egis we will explore how to develop our commercial and technical offering, e.g. leveraging their expertise in hardware to explore if the hardware we use could be simplified and less expensive.

The deal with Egis will be made through a set of share issues (please note that this is a simplification and not exhaustive, so please read the press release for specific details) in the following way:

  • The Board uses its mandate from the shareholders (AGM 2022) to do a directed issue of shares to Egis to grant a 10% stake in Precise. The price was set to 6.44 SEK per share, corresponding to a 6% discount compared to the share price the day before the deal was closed. Both parties have committed to this, and the directed issue will be concluded in parallel with the rights issue (see bullet 2).
  • The Board and management also see it as important to enable for the existing shareholders to participate in a rights issue, on the same terms as the directed share issue to Egis. Therefore, we propose that the EGM should resolve on a rights issue of up to SEK 42.5 million. This rights issue is guaranteed to approximately 25% by Egis. In total Egis will own approximately 12% in Precise after the direct issue and the rights issues (this is also secured via a proposed over-allotment option).
  • As a further recognition to the partnership Egis has committed to not sell any share within the coming 24 months. To me that shows a strong long-term commitment from Egis’ side.

Me and my colleagues in the management team of Precise, as well as the Board, has also committed to participate in the rights issue, in proportion to our current holdings. We welcome other shareholders, that can, to follow that example as it of course further strengthens Precise financial situation and ability to focus on growth. The directed share issue to Egis and Egis’ undertaking in the rights issue, without existing shareholders’ participation, will strengthen our cash situation with approximately SEK 35 million. In total, and given full subscription in the directed issue, the rights issue, and the over-allotment option, we would strengthen our cash position with approximately SEK 83.1 million before transaction costs.

During the last week, Egis’ CEO Howard Ro visited Sweden to meet some shareholders, Precise management and staff, initiate workshops, and build even stronger relationships. His visit was a good start to an extended partnership, and I look forward to travelling to Taiwan together with some Precise colleagues in mid-September, to continue the discussions.

I hope this further clarifies what we will discuss at today’s Extraordinary General Meeting.

All the best,

Patrick Höijer, CEO

 

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