The agreement gives Precise Biometrics the opportunity to penetrate the Chinese market for mobile services, and also opens up a new sales channel for its biometric security products.

Today Precise Biometrics has followed through the establishment of the above mentioned joint venture.

The company's Chinese patents have been transferred to the jointly owned company Smart Unicorn Solutions. Furthermore approx. SEK 4.4 million in available funds, which are to be used for production, expansion and the development of the operations, have been transferred to the joint venture company. Further, approx. SEK 7.8 million will be provided in 2006.

A decision has also been taken to implement the non-cash issue of 1,125,000 shares (Prec A) that constitute a part payment for Precise Biometrics' share of the ownership, and which will be done within the framework for the authorization the board obtained at the Annual General Meeting on April 27, 2005. The newly issued shares correspond to approx. 1.5 % of the total number of shares after the issue. After these transactions Precise Biometrics will own 30 % of Smart Unicorn Solutions.

This cooperation also means that Precise Biometrics will receive an initial order of approx. SEK 7.8 million for the delivery of LoqFlash licenses.

In order to meet the demand from the market for security solutions, transfer of technology and competence has already been commenced and as a result biometry and encryption technology from Precise Biometrics will be integrated in the synchronized mobile solutions that Smart Unicorn Solutions develops and markets. Precise Biometrics will also obtain a new sales channel for biometric security products, and gain the opportunity to position itself for the prospect of future broad-based ID card projects in China.

"It is very gratifying that this new cooperation will enable us to meet increasing demands from the market for both biometric security products and secure mobile services, which already during this year will generate increased sales revenue. The solutions that Smart Unicorn Solutions develops gives mobile phones an expanded functionality with secure payment transactions and the potential to store more information and download software," says Christer Bergman, President and CEO of Precise Biometrics.

"The Chinese market is huge and the requirements for security in conjunction with an increased demand for mobile services have meant that we have been looking for a competent partner with cutting-edge technology in the field of biometrics for some time. Precise Biometrics as a company, its reliable biometric technology and in particularly Precise Match-on-Card(TM) is an optimal partner for what we are targeting", says Dave Wu, CEO at Smart Unicorn Group. "Together with our market coverage in the telecom market, Precise Biometrics` global successes in the ID card market and our established network in the government market, means that we see great possibilities in the future," adds Dave Wu.