Oslo, Norway,  September 12, 2019

Thin Film Electronics ASA (“Thinfilm”) today announced that its wholly owned US subsidiary, Thin Film Electronics, Inc. (“Thinfilm Inc”), has closed an equipment term loan facility with Utica Leaseco, LLC (“Utica”) for financing of up to $13.2 million, which is expected to fund in two tranches during the month of September 2019.  Thinfilm Inc, the U.S. operating subsidiary and global headquarters of the Thin Film Electronics Group, entered into a Master Lease Agreement with Utica, securing an initial $5.6 million four-year term loan that funded on September 11, 2019.  Interest-only monthly payments are due for the first six months, followed by three months of interim payments, and thereafter a four-year amortization period during which monthly principal and interest payments are due.  Thinfilm Inc intends to borrow the second tranche of $7.6 million prior to September 30, 2019, under substantially the same terms and conditions.  The Thinfilm Group intends to use the proceeds from the loans for working capital to fund ongoing operations and to support its execution of strategic initiatives. 

“This financing strengthens our balance sheet and allows us to pursue our aggressive growth strategy to maximize the value of Thinfilm’s roll-to-roll production technology and factory and to move toward operating cash flow break even,” stated Mr. Kevin Barber, Chief Executive Officer. “We are pleased to partner with Utica as we reposition Thinfilm for growth.”

Thinfilm has been actively evaluating strategic alternatives to find new, compelling commercial applications for the San-Jose-based roll-to-roll printed dopant polysilicon (PDPS) line and believes there are opportunities to utilize the factory’s unique technology and the capabilities of its roll-to-roll (“R2R”) manufacturing plant.  The Company expects to provide more information about these opportunities in future announcements. 

While the management team is confident in the use of NFC technology for consumer engagement, brand protection and supply chain tracking in the long term, market adoption has been substantially slower than anticipated. This slower-than-expected growth rate of NFC tags on-package deployment has required the company to analyze the degree to which the Company should continue to invest in the development of this emerging market.  As a result, the decision has been made to transition away from the investment required to build the NFC market and proprietary CNECT software platform.  As a consequence, Thinfilm will begin a process to pursue monetizing its CNECT software platform and related NFC assets through potential licensing or sale of its related intellectual property.  Preliminary discussions have been initiated with potential partners who are interested in offering NFC enabled solutions supported by a robust data analytics software platform.   This can be accomplished by directly empowering the supply chain with cost-effective solutions, while allowing brands to engage consumers using Thinfilm’s underlying technology.  This allows management to focus on establishing a new path for the Company, leveraging its years of significant investment in its Roll-to-Roll manufacturing and process technology capabilities. 

The strategic shift to focus on the San Jose factory resulted in a reduction in work force in September 2019, relating to the employees focused on the software platform development and NFC go-to-market.  Thinfilm’s management would like to acknowledge and thank the employees who directly contributed to advancing awareness of NFC technology and development of the Company’s CNECT software platform. 

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Contacts:

Thin Film Electronics ASA

Mallorie Burak
Email: Mallorie.burak@thinfilmnfc.com
Tel: +1 408 503-7312

This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act.