WISeKey Announces H1 2021 Preliminary Results; Reports Revenue of $9.9 Million, a 24% Increase from H1 2020

WISeKey's strong cash reserves of $35.9 million, as of July 9, 2021, support investment in Artificial Intelligence as well as new products, IP and faster-growing IoT/Cybersecurity markets

ZUG, Switzerland - July 9, 2021: Ad-Hoc announcements pursuant to SIX reporting requirements -- WISeKey International Holding Ltd (NASDAQ: WKEY / SIX: WIHN) ("WISeKey" or the "Company"), a leading Swiss cybersecurity and IoT company announced today its preliminary unaudited financial results for the six-month period ended June 30, 2021 ("H1 2021"). All H1 2021 figures in this release are unaudited and estimated due to the preliminary nature of the announcement.

Carlos Moreira, WISeKey's Founder and CEO, noted, "Since the beginning of the year, we made tremendous progress in our efforts to overcome the challenges of COVID-19 pandemic. We invested in new technologies and talent, expanded our client base and geographic reach and we are proud to say that due to our leading technologies, dedicated and talented staff, and our dedication to the cybersecurity business, we have emerged from this pandemic stronger than ever. The acquisition of a controlling interest in arago has provided us with a new, higher-margin revenue source for AI-based Knowledge Automation and new synergies for our IoT revenue generation. We believe that due to our solid revenue pipeline for existing product offerings and new opportunities in the emerging Cybersecure Automation for the AIoT market, WISeKey is well positioned to take advantage of several growth opportunities, create new revenue streams, improve margins and increase revenues, and continue its growth organically and through acquisitions, thus gradually providing higher returns to its shareholders."

Preliminary H1 2021 Financial and Operational Highlights: 


   -- Revenue of $9.9 million increased by 24% as compared to H1 2020 revenue 
      of $8.0 million. 
 
   -- Strong cash position: cash and cash equivalents increased to $27.9 
      million at June 30, 2021, as compared to cash and cash equivalents 
      together with restricted cash of $17.4 million at June 30, 2020, and 
      $21.8 million at December 31, 2020. As of July 9, 2021, WISeKey's cash 
      reserves amount to $35.9 million. This improved financial position 
      enables WISeKey to make investments in growth initiatives and support its 
      development into Artificial Intelligence of Things ("AIoT"). 
 
   -- Made significant investments in R&D and new microchips design in order to 
      maintain our leading-edge technology position and the competitive 
      advantage of our product offerings. 
 
   -- Put strong requirements in place to reduce general corporate spending and 
      effectively manage the needs for working capital to maintain a positive 
      free cash flow position. 
 
   -- Completed the acquisition of a controlling interest in arago GmbH 
      ("arago"), investing a further $4.7 million cash in the first half of 
      2021, bringing our total investment to $8.2 million of cash into the 
      arago operations. This investment led to a combination of the businesses 
      of WISeKey and arago and the consolidation of revenues starting February 
      2021. arago provides Artificial Intelligence to enterprise customers 
      globally through Knowledge Automation. Knowledge Automation and Data 
      platform HIRO(TM), developed by arago, takes a unique approach to process 
      automation by using AI to autonomously and independently determine how to 
      complete and then automate end-to-end tasks based on real time contextual 
      data. Fully auditable and only using steps defined and approved by the 
      customer, Knowledge Automation delivers significantly higher automation 
      rates at a much lower operational cost. This acquisition was strategic 
      for WISeKey to establish a foothold into the AIoT market. 
 
   -- Took urgent and decisive actions to reduce the operational costs of arago 
      and streamline their processes with significant reductions of G&A. 
 
   -- Made significant investments in new talent and have expanded our sales 
      force including the appointment of a new CRO to take advantage of higher 
      demand for strong security, authentication, brand protection and 
      anti-counterfeiting services for segments such as connected devices, 
      connected cars, luxury products, pharmaceuticals, and banking/financial 
      sector. 
 
   -- Developed WISe.ART, an NFT platform for the collectible and luxury market 
      under the brand name WISe.ART ( https://www.wise.art 
      https://www.wise.art). The global market for non-fungible tokens (NFTs) 
      surged to new highs in the second quarter of 2021, with $2.5 billion in 
      sales so far this year, up from just $13.7 million in the first half of 
      2020, as marketplace data showed. Although the NFT market decreased last 
      month, it is expected to surge again especially on the high-end NFT 
      market which is the market segment where the WISe.ART platform operates. 
      WISeKey's WISe.ART NFT platform follows a series of market tests -- 
      selling high value NFTs and testing the appetite of the art and 
      collectible community -- and incorporates the needs of this exclusive and 
      high-volume marketplace.  Following the needs of buyers and sellers of 
      high-value goods the WISe.ART platform evolves the original collection 
      of WISe.Art and is a fully fledged marketplace with its own digital 
      currency, the ability to include curators and multipliers, white-labeling 
      options and a special NFT design.  The NFT design of 
      the WISe.ART platform ensures that besides an authenticated and signed 
      version of the actual digital asset, an irreversible link to a physical 
      object is set up, in addition to proof of ownership, provenance and a set 
      of contracts describing future use and monetization streams. NFTs and 
      platform are secured by WISeKey's various security technologies enabling 
      the authentication of physical objects as well as digital assets in a 
      safe end-to-end process.  The WISe.ART platform allows trading of NFTs 
      into WISeKey's own TrustECoin cryptocurrency, enabling market 
      participants to stay anonymous -- if they so choose -- while ensuring the 
      necessary KYC processes to avoid unwanted activity on the marketplace. 
 
   -- Adapted to the new teleworking environment by developing a special 
      edition of WISeID Digital Identification and Cloud that is now available 
      as a free download. The WISeID app secures interactions of locked-down 
      teleworkers around the globe and help companies reduce cybersecurity 
      risks. PKI and Digital Certificates secure email messages and reduce 
      risks by ensuring authenticity of messages and enabling encryption of 
      confidential data. The WISeID Platform is available for anyone to obtain 
      a digital certificate and immediately protect their email. 
 
   -- Developed NanoSealRT, an NFC Forum Type 5 semiconductor chip that works 
      with both Android and IOS 12 (and above) devices: 1 essential patent has 
      been granted in March 2021 to this product by the E.U. and the Chinese 
      Patent Offices, which will further reinforce our position as a major 
      Smart Label system provider, in traceability, anti-counterfeiting and 
      consumer engagement applications. 
 
   -- Reinforced our strategic partnerships as we joined the SAP(R) 
      PartnerEdge Program. The program gives partners access to resources, 
      services and benefits that will help WISeKey build and maintain a 
      successful partnership with SAP and optimize business results for 
      clients. WISeKey has been working on IoT security by integrating 
      OISTE/WISeKey's Managed Cryptographic Root of Trust secure IoT Devices 
      with devices leveraging SAP Leonardo(R) IoT.

We are quickly recovering from the negative effects of the COVID-19 pandemic which resulted in a global slowdown of the semiconductors market and global manufacturing shortage due to substantial swings in demand. We are now seeing higher demand for semiconductors especially in areas such as advanced vehicles such as connected vehicles and drones. We have renewed and signed new agreements on semiconductors and/or AI Automation with leading global companies such as CISCO, SAP, Parrot, Legic, Accenture, Dentsu, Ineltek, Ismosys, Exaware, Neoris, etc.

As anticipated, Cybersecurity companies like WISeKey with strong technology-IP assets, are recovering much faster from the current crisis due to the ability to diversify sales from Semiconductors to Cybersecurity or AI/Automation. Overall, continued adoption of IoT technologies connected to secure clouds, AI and ultimately 5G, will be tremendous catalysts for cybersecurity companies given the related risk of adoption.

According to 'Markets and Markets' .... the global IoT security market is expected to grow from $12,5 billion in 2020 to $36,6 billion in 2025, at an annual rate of 24%; the market growth is linked to the high adoption of IoT hardware enhancing the need for efficient security.

Indeed, these massively deployed connected objects face regular attacks, hence generating a large need for trusted end-to end cybersecurity solutions. The increasing AI and IoT convergence is one of the primary factors driving the growth. Over the past five years, a rapid surge in the adoption of AIoT cloud services has been witnessed. It is driven by its capabilities to provide an enterprise-wide array of resources they can utilize to scale, orchestrate, and support their operations.

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July 09, 2021 12:00 ET (16:00 GMT)