YEAR-END REPORT Q4 2019 - SaltX Technology › media › SaltX_The_Year_end... · 2020-02-21 ·...
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SaltX Technology Holding AB (publ)
YEAR-END REPORTQ4 2019This information is information which SaltX Technology is required to disclose under the EU market abuse regulation. The information has been made public on February 21, 2020 at 08.00.
THE TRANSITION TO GREEN ENERGY
INCREASING IN PACE
CONTENTS
2 SaltX Technology Holding AB (publ) Year-End Report Q4 2019
Year-end Report 2019 3The CEO’s Address 4Operations 6Business model 8Significantevents 9Financialoverview 10Consolidatedfinancialstatements 14Notes 18Note1Significantestimatesandassessmentsforaccountingpurposes 18Note 2 Income 18Note 3 Financial instruments 19Note4Transactionswithaffiliates 19Note 5 Leases 19
Parentcompanyfinancialstatements 20AffirmationbytheBoardofDirectorsandtheCEO 22OtherInformation 23
SaltX Technology Holding AB (publ) Year-End Report Q4 2019 3
YEAR-END REPORTQ4 2019
FINANCIAL EVENTS
KEY FIGURES 1
Group, TSEK Q 4 2019 Q 4 2018 FY 2019 FY 2018Netsales 867 1,671 193 6,464Operatingprofit/loss(EBIT) -10,941 -79,792 -83,830 -121,062Earningspersharebeforeandafterdilution -0.16 -1.38 -1.22 -2.14Equity 131,748 143,598 131,748 143,598Cashflowfromoperatingactivities -10,169 -15,001 -58,833 -50,556Equityratio(equity/balancesheettotal) 73% 70% 73% 70%
Q4 1
NetsalesincreasedtoMSEK0.9(1.7)
Operatingprofit/loss(EBIT)totaledMSEK-10.9(-79.8)
CashflowfromoperatingactivitiesamountedtoMSEK-10.2(-15.0)
EarningspersharebeforeandafterdilutionamountedtoSEK-0.16(-1.38)
FullyearJanuary—December1
NetsalestotaledtoMSEK0.2(6.5)
Operatingprofit/loss(EBIT)totaledMSEK-83.8(-121.1)
CashflowfromoperatingactivitiesamountedtoMSEK-58.8(-50.6)
EarningspersharebeforeandafterdilutionamountedtoSEK-1.22(-2.14)
1TheGroupappliesIFRS16LeasesfromJanuary1andallfiguresfor2019inthisinterimreportincludethischange.Comparativefiguresarenotrecalculated.
Q4
SaltXcarriedoutanewcapitalissueforapprox.MSEK80.6andistakingthenextsteptowardscommercialization
AnewstrategicpartnerinChinaisfinancingapilotproject–ShuangliangisconstructinganddevelopinganenergystoragepilotprojectinChina
Aftertheendoftheyear
TheBoardproposesnodividend
SIGNIFICANT EVENTS
OUR FOCUS NOW IS, WITH OUR PARTNERS, TO BUILD ON THE PILOT PLANT IN BERLIN AND TO OPTIMIZE THE PRO-CESS FOR DIFFERENT END-USERS. READ MORE ON PAGE 4
4 SaltX Technology Holding AB (publ) Year-End Report Q4 2019
THE CEO’S ADDRESS2019 – A YEAR OF TRANSITIONAND FOCUS ON ENERGY STORAGE
SaltX has an important role to play in the tran-sitiontoafossil-freesociety.Manycompa-nieshavetheambitiontobecomefossil-freewithinageneration;webelieveitispossibletoachievethisearlier.Thisisadevelopmentinwhichweareinspiredtopartic-ipate.However,thereareobstaclesalongtheway,bothintermsofestab-lished business structures andtime-consumingpoliticaldiscussions.
FULLY-SUBSCRIBED CAPITAL ISSUEIn order to implement the necessary changes and havesufficientresourcesforourfocus,thecom-pany decided in autumn 2019tocarryoutanewcapitalissue.Thecompa-ny’sraisingofcapitalwaswell-received—acon-fidenceweappreciate.Being able to carry out acapitalissuethatwasoversubscribedisasign
ofstrengthandshowstheattractivenessofSaltX'sbusiness.Withthiscapitalavail-
able,SaltXwillbeabletomakesignificantprogressincommercializingourofferingwithinlarge-scaleenergystorage.Duringthepastyear,
the company has made sure to build the required competence in order to beabletodevelopinthewaythemanagementandboardhavesetout.SaltX possesses leading knowledgeofenergystorage,which,togetherwithastrongnetworkofpartnersanduniversi-ties,amongotherthings,createsgoodconditionsforcommercializingourenergystorage.
OUR PARTNERSThecooperationwiththethreepartnerswithwhomwehavesignedagreementshasdevel-opedatdifferentrates.Itisinstructiveforustosee
howtheychoosetouseEnerStore in their com-mercialofferings.Incon-junctionwiththesepart-ners,wearecontinuouslydevelopingoursolutionandarestimulatedandchallengedtocontinuethisdevelopmentinawaythattakesusclosertocommercialization.Ourfocusnowis,withourpartners,tobuildonthepilot plant in Berlin and tooptimizetheprocessfordifferentend-users.
A BRIGHT FUTUREThe energy industry is inasignificanttransitionphase,wherewecansee,forexample,thattheuseofcoalinEuropefellsharplyin2019.Almost80percentofcoal-firedpowerplantsinEuropeareunprofitable.Thisis mainly because they arenotoperating,whichresultsinlowresourceutilizationandexpensiveconversioncosts.Theworldisswitchingtore-newableenergysources,andourandotherex-perts' assessment is that developmentisprogress-ingfaster.ThisisgoodnewsforSaltX.Wehaveeveryreasontoviewthefuturewithconfidence.
Thankyoufortheoppor-tunity to address you andforyourbeliefinus.
Carl-Johan LinérCEO
THE WORLD IS SWITCHING TO RENEWABLE ENERGY SOURCES, AND OUR AND OTHER EX-PERTS' AS-SESSMENT IS THAT DEVELOP-MENT ISPROGRESSING FASTER. THIS IS GOOD NEWS FOR SALTX.
2019 was a very eventful year for SaltX Technology during which we underwent major restructuring. The company's management and board of directors made the decision to focus clearly on large-scale energy storage — what we term EnerStore. This is the area we believe has the great-est commercial potential and the area where we have the best opportunity to control our development.
SaltX Technology Holding AB (publ) Year-End Report Q4 2019 5
SaltX testanläggning invigs av Marcus Witt, Vattenfall och Harald Bauer, VD SaltX, Till höger Simon Ahlin, Head of Sales SaltX.
Carl-Johan Linér
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SALTX STORES THERMAL ENERGY
THE SALTX ECOSYSTEM
OPERATIONS
Byheatingthenanocoat-ed salt using electricity or thermalheat,theenergycanbestoredforhours,daysorweeks—andthenusedwhenitisneededmost.
SaltX technology is especially suited to the marketwherehigh-qualitysteamatbetween160—450degreesCisrequired.This requirement can befound,forexample,inindustries,citiesorincogenerationplants.
THE WAY AHEADThecompany'staskistosellanddelivertheworld-patentednanocoat-edsalttogetherwithkeyknowledgeofthetech-nology to customers and partners.SaltXisdevelop-ingthefinishedsolutionwithpartnerswhoalreadysupplyenergyplants.
COMPONENTSSaltX energy storage consistsoffourkeycom-ponents:twosilosfor
storing the nanocoated salt,andtworeactorswherethesaltischargedordischarged.Thesalt,togetherwiththereac-tors,formtheverycoreoftheenergystoragesolution.Incooperationwithourpartners,areactor technology has beenidentifiedthatisconsideredtobesignifi-cantlymoreefficientandmore scalable than the oneusedinSaltX'sfirstmajorpilotplantlocatedinBerlin.Thetechnology—thefluidizedbed—iswellknownandismainlyusedincoal-firedpowerplants.Thenextstepistoprovethetechnologyin pre-commercial instal-lations.
Chargeswithsurplusenergy—electricityand/orheat
Dischargeshigh-temperaturesteamat160— 450degreesC
Endcustomersmaybeindustries,coge-nerationplantsorothercustomerswhoneedhigh-temperaturesteam.
ENERGY PRODUCTION
Ontheroadtocommercializingthecompany's large-scale energy storage solution,EnerStore,thereareanumberofpartnerswithwhomSaltXwillbeworking.Dependingonthemarketandthefinalapplication,thesepartnersmaydiffer,butinthemaintheywillhavefourdifferentfunctions.Theseareassalt suppliers that prepare and process nanocoatedsalt,OEMs(OriginalEquip-mentManufacturer)thatmanufacturekeycomponents,EPCs(Engineer,Pro-cure,Construct)thatinstallenergystor-agesystemsand,finally,endcustomers,so-calledoff-takers,whomaybeenergycompanies,industriesandcities,seetheimagetotheright.
SaltX is a technology company focusing on energy storage. Today, SaltX is developing a thermochemical energy storage solution based on nanocoated salt. The world is transitioning to renewable energy sources. This transition requires large amounts of energy storage in order to meet supply and demand at the right time.
SaltX Technology Holding AB (publ) Year-End Report Q4 2019 7
SALTX STORES THERMAL ENERGY
THE SALTX ECOSYSTEM
ENERGY PRODUCTION ENERSTORE OFF TAKERS
ENERGI ÅNGA
ORIGINAL EQUIPMENT MANUFACTURERS (OEM)KEY COMPONENTS (CHARGER/DISCHARGER ETC.)
ENGINEERING PROCURMENT CONSTRUCTION (EPC)INSTALLERS OF THE ENERGY STORAGE PLANT
SALT PRODUCERSPREPARE AND PROCESS NCS
OFF TAKERSEND CUSTOMERS (ENERGY COMPANIES, INDUSTRIES, MUNICIPALITIES)
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BUSINESS MODEL
Saltx'spositioninthevaluechainistodeliverthe nanocoated salt and knowledgearoundittoselected system partners whobuildandstarttheentireenergysolution.
THE ECOSYSTEM IS GROWINGThe company is de-pendentonfindingtherightpartnerswhocanassistwithotherpartsforacompleteplant.Animportantpartofthepuzzleisthepartner-shipwiththecompany'ssuppliersofsaltandprotectivematerial.TheNordkalkandWackercompanies are in place to
supplythefutureprojectswithnanocoatedsalt.
THREE NEW PARTNERSIn2019,thecompanyhasfocusedonworkingwithcompetentpartnerswhoareexperiencedinbuilding energy installa-tions.Threeimportantpartnersarenowinplace—GermanSteinmüller,Spanish INERCO and ChineseShuangliang.Thenextstepistobuildpre-commercialfacilitieswiththesepartnersandsetacommonplanforcommercializationandcustomeroffering.Thecompany'spartnerswillalsoplayakeyroleinthe
saleofenergystorageprojects.
OFF TAKERENERSTORE EPCOEMIPSUPPLIER
BUSINESS MODEL
SaltX develops and sells energy storage based on nanocoated salt in conjunction with its partners. The company's future revenues will consist primarily of sales of nanocoated salt, license fees and technology transfer. Revenue streams can also come from the finished plant in the form of installation and energy fees.
OEM/EPC: SPAIN
OEM/EPC: GERMANY
OEM/EPC: CHINA
SaltX Technology Holding AB (publ) Year-End Report Q4 2019 9
SIGNIFICANT EVENTS
...DURING Q4SALTX CARRIED OUT A NEW CAPITAL ISSUE FOR APPROX. MSEK 80.6 AND IS TAKING THE NEXT STEP TOWARDS COMMERCIALIZATIONThemarketforlarge-scaleenergystorageisgrowingstrongly.Overthepastyear,SaltXTech-nologyhasdemonstratedwithitspilotprojectinBerlin that the technology can be used on a large scale,andhasenteredintostrategicagreementsthatpavethewayfortakingthenextstepinthecommercializationofthecompany'senergystoragesolution.ThedecisionwasmadetocarryoutarightsissueforapproximatelyMSEK80.6,whichwasfullyguaranteedthroughasubscrip-tioncommitmentfromtheprincipalshareholder,Industrifonden,andthroughissueguaranteesfromaguaranteeconsortium.Shareholders
receivedone(1)subscriptionrightforeach(1)shareheldontherecorddateandfive(5)sub-scriptionrightsentitledtosubscribeforone(1)shareintherightsissueatanissuepriceofSEK5.55pershare.Theissuewasfullysubscribedwithshareholderswithrightssubscribingfor75percentoftheissueandshareholdersandotherinvestorswithoutrightssubscribingfortheother25percentoftheissue.Thepurposeoftherightsissueistoprovide
thecompanywithfinancialresourcestoenablecontinueddevelopmentandcommercializationofthecompany'senergystoragesolution.
A NEW STRATEGIC PARTNER IN CHINA IS FINANCING A PILOT PROJECT – SHUANGLIANG IS CONSTRUCTING AND DEVELOPING AN ENERGY STORAGE PILOT PROJECT IN CHINA
SaltXsignedapartnershipagreementwithShuangliangBoilerCo.,Ltd.OurChinesepartnerwillbuildandfinanceapilotplanttomarketSaltXenergystoragetechnologyintheChinesemarket.Thepilotplantisplannedtohaveanoutputofabout50kW/500kWh.
Shanghai, China.
10 SaltX Technology Holding AB (publ) Year-End Report Q4 2019
FINANCIAL OVERVIEW
OCTOBER – DECEMBER – Q4
REVENUE, EXPENSES AND EARNINGS*
Net salesNetsalesforthequarteramountedtoTSEK867(1,671),themajorityofwhichrelatestopaymentforworkintheformerHeatBoostapplicationcarriedoutforUStechnicalinstitu-tions.
Other income Other income in the quarter totaledTSEK295(2,827).
ExpensesExpensesduringtheyearamountedtoTSEK-12,103(-85,186),brokendownascostofgoodsforresaleTSEK-10(-1,396),otherexternalexpens-esTSEK-4,376(-10,181),per-sonnelexpensesTSEK-5,524(-9,359),anddepreciationandimpairmentoffixedassetsTSEK-2,193(-64,250).Impairmentlossesincludethescrappingoftheremainingvaluesofconclud-edpatentsofMSEK1.4.AsaconsequenceofIFRS16,
from2019expensesforrentand leasing are reported as a de-preciationandinterestexpenseinsteadofasotherexternalexpenses,seeNote5.
Operating profit/loss (EBIT)Operatingprofit/losswasTSEK-10,941(-79,792).Operatingprofits/lossex-
cludingimpairmentoffixedas-setsamountedtoTSEK-9,418(-16,658).
Financial itemsProfit/lossfromfinancialitemsamounted to TSEK -544 (419) andconsistedofinterestonliabilitiestotheSwedishEnergyAgency and Almi Företagspart-ner,aswellasonleasingliabil-ities.
Profit before taxProfit/lossbeforetaxwasTSEK-11,485(-79,373).Earningspersharebeforeand
afterdilutionamountedtoSEK-0.16(-1.38).
CASH FLOW, INVESTMENTS AND FINANCIAL POSITION
Cash flow and liquidityCashflowfromoperating activitiesinthequarterwasTSEK-10,169(-15,001).Groupcashequivalentsat
theendofthequartertotaledTSEK85,321(71,672).
Long-term liabilitiesLong-termliabilitiestotalledTSEK32,738(29,758)andcon-
sistedoflong-termelementsofloansfromtheSwedishEn-ergyAgencyforTSEK24,388andAlmiFöretagspartnerforTSEK4,200andthelong-termelementofleasingliabilities.RepaymentoftheloanfromtheSwedishEnergyAgencyisbasedoncriteriaforcom-mercializationbeingfulfilledthroughrevenuesandisdoneonthebasisofrevenueperyear.ArequestforremissionofmostoftheloanhasbeensenttotheAgency.Thefundingwasusedtodevelopapplica-tionsthatthecompanyisnolongerworkingwith.ItistheassessmentofSaltXthatthereisnofoundationforrepaymentbecausetheseapplicationsarenotexpectedtogenerateanyrevenue.TheloanfromAlmiisbeing
repaidfromJuly2019onamonthlybasisover5years.
InvestmentsEquityattheendofthepe-riodtotaledTSEK131,748(143,598)orSEK2.36(1.83)pershareandhasfallenwiththenegativeearnings.Theequityratioonthesamedatewas73percent.
* Allfiguresfor2019havebeenaffectedbytheintroductionofIFRS16.Comparativefiguresarenotrecalculated.
SaltX Technology Holding AB (publ) Year-End Report Q4 2019 11
KEY FIGURES, THE GROUP, PER QUARTER TSEK Q 4 2018 Q 1 2019 Q 2 2019 Q 3 2019 Q 4 2019Netsales 1,671 -1,706 867 165 867Operatingprofit/loss(EBIT) -79,792 -20,144 -45,762 -6,983 -10,941Cashflowfromoperatingactivities -15,001 -25,143 -11,094 -12,427 -10,156Basicearningspershare,SEK -1.38 -0.29 -0.66 -0.10 -0.16
* Allfiguresfor2019havebeenaffectedbytheintroductionofIFRS16.Comparativefiguresarenotrecalculated.
JANUARY– DECEMBER – FULL YEAR
REVENUE, EXPENSES AND EARNINGS*
Net salesOtherincomefortheyearto-taledTSEK193(6,464).InQ1,SaltX ended a licensing and cooperationagreementwithStjernbergAutomationAB.SaltXreimbursedMSEK3.2inpreviouslypaidlicensefees,whichwerepartiallyrecognizedasincome.Thisexplainsthelowturnoverin2019.Therea-sonthecooperationwasendedis that it has not produced the intendedresult.
Other incomeOther income amounted to TSEK6,144(4,023)andcon-sistedofpublicgrantsfromtheEuropeanUnion'sHorizon2020projectfortheHeatBoostprojectandfromtheSwedishEnergyAgencyforthepilotplantinBerlin.
ExpensesExpensesduringtheyearamountedtoTSEK-90,167(-146,222),brokendownascostofgoodsforresaleTSEK-126(2,070),otherexternalexpensesTSEK-24,542(-42,709),per-sonnelexpensesTSEK-27,860
(-34,063),andamortizationandimpairmentoffixedassetsTSEK-37,639(-67,380).Inthesecondquarter,impairmentlossesweremadetotallingTSEK32,160oftheremainingcapitalizedex-penditurefordevelopmentworkrelatingtoapplicationsotherthanEnerStore.AsaconsequenceofIFRS16,
from2019,expensesforrentand leasing are reported as a de-preciationandinterestexpenseinsteadofasotherexternalexpenses,seeNote5.
Operating profit/loss (EBIT)Operatingprofit/losswasTSEK-83,830(-121,062).Operatingprofits/lossexclud-
ingimpairmentoffixedassetsamountedtoTSEK-49,103(-59,928).
Financial itemsProfitorlossfromfinancialitemsamountedtoTSEK-3,867(1,224)andconsistedofthechangeinvalueofsharesinCentralDevel-opmentHoldingsLtd(formerlyZhongFaZhanHoldingsLtd),andinterestonliabilitiestotheSwedishEnergyAgencyandAlmiFöretagspartner,aswellasonleasingliabilities.
Profit/loss before taxProfit/lossbeforetaxwasTSEK-87,697(-122,286).Earningspersharebeforeand
afterdilutionamountedtoSEK-1.22(-2.14).
CASH FLOW, INVESTMENTS AND FINANCIAL POSITION
Cash flow and liquidityCashflowfromoperatingactivitiesfortheyearwasTSEK-58,833(-50,556).ThetransitiontoIFRS16hashadaneffectonthecashflowfor2019asamortizationofleasingliabilitiesisreportedaspartoffinancingactivitiesinsteadofbeingincludedinoperatingac-tivitiesintheformofarental/leasingexpense.TheprojecttodevelopHeat-
Boost,partlyfundedbytheEU'sH2020,hasbeenprematurelyendedin2019.AnadvanceofSEK9.3millionwasreceivedinJune2018,ofwhichthemajorityhasbeenusedwithintheproj-ectandtheremainingSEK2.7million is intended to be repaid inconnectionwiththefinalsettlementoftheprojectinearly2020.Groupcashequivalentsas
perDecember31totaledTSEK85,321(71,672).
InvestmentsDuringtheyear,investmentsweremadethatimpactedcashflowbyTSEK-2,038(-41,480).Theseconsistedofinvestments
12 SaltX Technology Holding AB (publ) Year-End Report Q4 2019
incapitalizedexpenditureandpatents.
PARENT COMPANYTheoperationsoftheparentcompany,SaltXTechnologyHoldingAB(publ),includecompany-wideservicesandmanagementofthesubsidiarySaltX Technology AB and main-tainingthecompany'slistingon Nasdaq First North Premier GrowthMarket.Profit/lossbeforetaxfor
theperiodwasTSEK-9,405(-5,726).Theparentcompany’savailableliquidfundsasper31DecembertotaledTSEK82,458(64,581).
SHARE CAPITALShare capital at the end oftheperiodtotaledSEK5,807,637.76consistingof72,595,472sharesatanominalvalueofSEK0.08.NewcapitalissueswerecarriedoutbeforetheendoftheyearandwereregisteredinJanuary2020.
SHARESShares in SaltX are listed on Nasdaq First North Premier GrowthMarket.
Share warrantsAcapitalissuein2018wascarriedoutintheformofunitsconsistingofoneshareandonesharewarrant.14.8sharewarrantswereissued.After
minoradjustmentsduetothe2019capitalissue,1.9555sharewarrantsarerequiredtosubscribeforoneshareattheexercisepriceofSEK12.71duringtheperiodJanuary1,2020toOctober31,2021.Withfullsubscriptionofthesewarrants,thenumberofshareswillincreaseby7.5million,correspondingtoadilutionof9percentandthecompanywillreceiveMSEK96.
Incentive programsThe Annual General Meet-inginApril2017decidedtoauthorizetheBoardtoissue750,000warrantswhichwereofferedtomanagementandotherpersonnel,primarilynewemployees,intheGroup.ThisprogramwaslaunchedinSeptember2017.Onewarrantequatestoone(1.009)share,subscriptioncantakeplaceinJune2020andthestrikepricewassetonthedayofissueat150percentofthecurrentshareprice,whichwasSEK48.36,afteraminoradjust-mentforthe2018capitalis-sue.Employeeshaveacquired725,000warrants,ofwhichthe company repurchased 260,000warrants,allatmar-ketvalue,leavinganetfigureof465,000outstandingwar-rants.Ifexercisedinfull,thecompanywillreceiveMSEK23.5.Thesesharescorrespond
toa0.7percentpotentialdilution.
Earnings per shareEarningspershareforthefullyearamountedtoSEK-1.22(-2.14)basedonanaveragefig-ureof72,126,265(56,272,121)sharesbeforedilution.Whencalculatingthenumberofsharesafterfulldilution,theadditionaloutstandingsharesfromwarrantprogramsissuedhavebeentakenintoaccountalthough this has not had any effectbecausetheresultisnegative.AsofDecember31,2019,
52shares,representinglessthan0.01percentoftotalshares,hadnotyetbeensub-scribedforfromthemergerbe-tweenthecompanyandSaltXTechnology.
Significant risks and uncertaintiesAllbusinessactivityandshareownershipisassociatedwithrisk.Risksthataremanagedwellcanentailopportunitiesandvaluecreation,whiletheopposite can lead to damage andlosses.Theriskscanbedi-videdintomarket-related,op-erations-relatedandfinancialrisks.Seealsothecompany’sannualreportonitswebsite.
Accounting policies
CHANGE OF SHARE CAPITAL IN 2019 Change Accumulated Change Accumulated in share capital share capital no. of shares no. of sharerOpeningbalance2019 — 4,911143.20 — 61,389,290Rightsissue,partof 887,764.96 5,798,908.16 11,097,062 72,486,352Directedissue,guaranteefee 8,727.28 5,807,635.44 109,091 72,595,443Issueinkind(May2019) 2.32 5,807,637.76 29 72,595,472
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TheconsolidatedfinancialstatementshavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS)suchastheyhavebeenadoptedbytheEU,andRFR1SupplementaryAccountingRulesforGroups,andtheSwedishAnnualAccountsAct.Theinter-im report has been prepared in accordancewithIAS34InterimFinancialReporting.Theparentcompany’sfi-
nancialstatementshavebeenpreparedinaccordancewiththeSwedishAnnualAccountsActandtheSwedishFinancialReportingBoard’srecommen-dationRFR2AccountingforLegalentities.TheapplicationofRFR2meansthattheparentcompany in the interim report forthelegalentityappliesallofthe IFRS and statements ad-optedbytheEUasfarasthisispossiblewithintheframeworkoftheSwedishAnnualAccountsAct,theSwedishPensionObligationsVestingActandinconsiderationoftheinter-rela-tionbetweenaccountingandtaxation.Theinterimreportforthe parent company has been preparedinaccordancewiththeSwedishAnnualAccountsAct.Theaccountingpolicies
appliedareinaccordancewiththose described in the SaltX Group'sannualreportfor2018,exceptthattheGrouphasap-pliedIFRS16LeasesfromJan-uary1,2019.Implementationofthestandardhasaspecificeffectonthefinancialreports.ForinformationontheeffectsofthetransitiontoIFRS16,seeNote5.AccountingpoliciesinaccordancewithIFRS16arelistedbelow.The parent company has chosen
nottoapplyIFRS16Leasesandhas chosen to apply the items statedinRFR2(IFRS16Leases,p.2—12)fromJanuary1,2019.
ACCOUNTING POLICIESAPPLIED FOR LEASES FROM JANUARY 1, 2019
The Group's leasing agreements consistprimarilyofarentalagreementfortheofficeprem-ises.Theleaseissignedforaperiodofsevenyears,butoppor-tunitiesforextensioncanbeex-ercised,asdescribedbelow.Thetermsarenegotiatedseparatelyforeachagreementandcontainnormalcontractualterms.
The leasing agreements arereportedasrightsofuseand a corresponding liability is reported on the date the leasedassetisavailableforusebytheGroup.Eachleasepaymentisdividedbetweenamortizationoftheliabilityandthefinancialcost.Thefinancialexpenseshallbeallocatedoverthe lease period so that each accountingperiodischargedwithanamountcorrespond-ingtoafixedinterestrateforthe liability reported during eachperiod.Therightofuseisdepreciated on a straight-line basisovertheshorteroftheasset'susefullifeandthedura-tionofthelease.Assetsandliabilitiesarising
fromleasingagreementsareinitiallyrecognizedatpresentvalue.Assetswithrightsofusearevaluedatcostandincludethefollowing: theinitialvaluationoftheleasingliability, paymentsmadeatorbefo-rethetimewhentheleased
assetismadeavailabletothelessee.
Leasingliabilitiesincludethepresentvalueofthefollowinglease payments:
fixedfees variableleasingfeeslinkedtoanindex
Leasing payments are discount-edwiththemarginalinterestrate.Leasingfeeslinkedtoleasing
agreementsregardingassetsofminorvalueareexpensedonastraight-line basis in the income statement.
Options to extend and terminate an agreementOptionstoextendandtermi-nate an agreement are included intheassetandliabilitywhenitis reasonably certain that they willbeexercised.Thetermsareusedtomaximizeflexibilityinthemanagementoftheagree-ments.
14 SaltX Technology Holding AB (publ) Year-End Report Q4 2019
CONSOLIDATED STATEMENT OF COMPREHENSIVE RESULT – SUMMARY
TSEK Q 4 2019 Q 4 2018 FY 2019 FY 2018 Netsales 867 1,671 193 6,464WorkperformedbytheCompanyforitsownuse andcapitalized — 895 — 14,672Otheroperatingincome 295 2,828 6,144 4,024TOTAL 1,162 5,394 6,337 25,160
Costofproductssold -10 -1,396 -126 -2,070Otherexternalcosts -4,376 -10,181 -24,542 -42,709Personnelcosts -5,524 -9,359 -27,860 -34,063Depreciationandimpairementoffixedassets -2,193 -64,250 -37,639 -67,380TOTAL OPERATING COSTS -12,103 -85,186 -90,167 -146,222
OPERATING PROFIT/LOSS -10 941 -79,792 -83,830 -121,062 Financialincome 8 228 8 -877Financialexpenses -552 191 -3,875 -347FINANCIAL ITEMS — NET -544 419 -3,867 -1,224
PROFIT/LOSS BEFORE INCOME TAX -11,485 -79,373 -87,697 -122,286 Incometaxexpense — — — 2,163
PROFIT/LOSS FOR THE PERIOD -11,485 -79,373 -87,697 -120,123
Earnings per share calculated on earnings attributable to parent company shareholders, SEK Basicearningspershare -0.16 -1.38 -1.22 -2.14Earningspershareafterdilution -0.16 -1.38 -1.22 -2.144
TherearenoitemsintheGroupthatarereportedinothercomprehensiveincome,whichiswhytotalcomprehensiveincomecorrespondstonetprofit.Netprofitandtotalcomprehensiveincomefortheperiodareattributableintheirentiretytoparentcompanyshareholders.
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CONSOLIDATED BALANCE SHEET – SUMMARY
TSEK Dec 31, 2019 Dec 31, 2018
ASSETS Fixed assets Intangible assets Capitalizedexpenditureondevelopmentwork 75,139 107,366Patentsandtrademarks 1,354 2,633 76,493 109,999
Tangible assets Equipment,tools,andinstallations 1,445 2,020Accessrightassets 5,443 — 6,888 2,020
Financial fixed assets Shares 6117 7800 6 117 7 800Total fixed assets 89 498 119 819 Current assets Advancepaymentstosuppliers — 204Accountsreceivable 1,077 2,633Othercurrentassets 2,346 8,666Prepaidexpensesandaccruedincome 1,462 2,350Cashandcashequivalents 85,321 71,672Total current assets 90,206 85,525TOTAL ASSETS 179,704 205,344 EQUITY AND LIABILITIES Equity Sharecapital 5,808 4,911Rightsissue,toberegistered 1,228 888Othercontributedcapital 665,851 591,241Accumulatedprofitorlossincludingprofit/lossfortheyear -541,139 -453,442Total equity 131,748 143,598
Long-term liabilities Otherliabilities 28,588 29,758Leasingliabilities 4,150 —Total long-term liabilities 32,738 29,758
Current liabilities Accountspayable 2,237 12,949Leasingliabilities 1,447 —Otherliabilities 4,954 1,443Accruedexpensedanddeferredincome 6,580 17,596Total current liabilities 15,218 31,988TOTAL EQUITY AND LIABILITIES 179,704 205,344
16 SaltX Technology Holding AB (publ) Year-End Report Q4 2019
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AttributabletoParentCompanyshareholders Accumulated Rightsissues Other profit/loss under contributed incl.profit/loss TotalTSEK Sharecapital registration capital fortheyear equity
Opening balance Jan 1, 2018 4,397 — 490,294 -333,319 161,372Period Jan-Dec 2018 Netincome/lossJan-Dec2018equaltototalcomprehensiveincome — — — -120,123 -120,123Total comprehensive income — — — -12,123 -120,123Transactions with shareholders in their capacity as shareholders:Rightsissues 514 — 48,452 — 48,966Rightsissues,underregistration — 888 60,146 — 61,034Issueexpenses — — -8,238 — -8,238Warrantssoldandrepurchased 587 — 587Closing balance Dec 31, 2018 4,911 888 591,241 -453,442 143,598
OpeningbalanceJan1,2019 4,911 888 591,241 -453,442 143,598Netincome/lossJan-Dec2019equaltototalcomprehensiveincome— — — -87,697 -87,697Total comprehensive income — — — -87,697 -87,697Transactions with shareholders in their capacity as shareholders:Rightsissues 897 -888 — — 9Rightsissues,underregistration — 1,228 84,508 — 85,736Issueexpenses — — -9,896 — -9,896Warrants repurchased — — -2 — -2Closing balance Sep 30, 2019 5,808 1,228 665,851 -541,139 131,748
SaltX Technology Holding AB (publ) Year-End Report Q4 2019 17
CONSOLIDATED CASH FLOW STATEMENT
TSEK Q 4 2019 Q 4 2018 FY 2019 FY 2018
Cash flow from operating activities Profit/lossafterfinancialitems -11,485 -79,373 -87,697 -122,286Adjustmentsfornon-cashitemsetc. 2,382 63,961 39,899 68,380 -9,103 -15,412 -47,798 -53,906Increase/decreaseinoperatingreceivables -799 -3,644 8,968 -1,993Increase/decreaseinoperatingliabilities -254 4,055 -19,990 5,343Cash flow from change of working capital -1,053 411 -11,022 3,350Cash flow from operating activities -10,169 -15,001 -58,820 -50,556 Cash flow from investing activities Acquisitionofintangibleassets -257 -26,371 -2,038 -39,518Acquisitionoftangibleassets — 9,012 — -760Acquisitionoffinancialassets — — — -1,000Merger by SunCool AB — — — 803Increase/decreaseinlong-termreceivables — — — -1,005Cash flow from investing activities -257 -17,359 -2,038 -41,480 Cash flow from financing activities Newcapitalissue,netofissueexpenses 76,182 80,955 75,847 83,062Amortizationsofdebts — — — -512Changeinlongtermleasingliabilities -370 — -1,340 —FinancingfordevelopmentfromEuropeanUnion — — — 9,321Cash flow from financing activities 75,812 80,955 74,507 91,871
Cash flow for the period 65,399 48,595 13,649 -165Cashequivalentsatbeginningofperiod 19,922 23,077 71,672 71,837Cashequivalentsatendofperiod 85,321 71,672 85,321 71,672
18 SaltX Technology Holding AB (publ) Year-End Report Q4 2019
NOTE 1 SIGNIFICANT ESTIMATES AND ASSESSMENTS FOR ACCOUNTING PURPOSES
Theestimatesandassumptionsthatrepresentasignificantriskofmaterialadjustmentsinthecarryingamountsofassetsandliabilitiesare:
Intangible assets: The largest assetrecognizedinSaltX’sbalancesheetiscapitalizeddevelopmentexpenditure.Thesearefrom30June2019,afterimpairments,relatingtothe underlying technology and theapplicationforlarge-scaleenergystorage,EnerStore.Animpairmenttestofthisassetiscarriedoutbasedonanesti-mateofwhattheCompany'stechnology can lead to in the formoffuturerevenueandcashflow.Importantcompo-nentsincalculatingthesefu-turevaluesarevolumegrowth,
profitmarginanddiscountrate.Asignificantchangeofimportant components in the calculationmaymeanthatthebalance sheet item needs to be adjusted.
DevelopmentTheGroupassesseswhentheproduct or process is technically andcommerciallyfeasibleandthecompanyhassufficientresourcestocompletedevelopmentandthereafteruseorselltheintangi-bleasset.Iftheseconditionsaremet,anintangibleassetisrecog-nizedinthebalancesheet.
Research and promotional measuresDuringtheyear,theGroupfo-cusedontheapplicationforlarge-scaleenergystorage,Ener-Store.Theactivitieshavemainlyconsistedofsearchingforamoreefficientkeycomponentfor
charging and discharging energy fromthenanocoatedsalt.Inaddi-tion,resourceshavebeenputintoinitialsalespromotionmeasuresintheformofworkonandprepa-rationofpre-commercialfacilitiesinconjunctionwithpartners.Theseactivitiesandeffortshavethecharacterofresearchandsalespromotionactivitiesandareexpensedastheyarise.Estimatesandassessments
arecontinuouslyevaluatedandarebasedonhistoricalexperi-enceandotherfactors,includingexpectationsoffutureeventsthat are considered reasonable underprevailingconditions.
NOTE 2 REVENUE
The Group has reported the followingamountsintheincomestatementrelatingtorevenue (seetablebelow).
NOTES
REVENUE Q 4 2019 Q 4 2018 FY 2019 FY 2018Revenuefromagreementswithcustomers 867 1,671 193 6,464Otherrevenue 295 2,828 6,144 4,024Total revenue 1,162 4,499 6,337 10,488
TheGrouphasrevenuesasspecifiedbelow:
Q 4 2019 Q 4 2018 FY 2019 FY 2018Productsale 12 126 393 618Licenseandroyaltyrevenue — 1,557 -2,067 2,624Developmentwork 744 -520 1,867 960Consultancyservices(technology) — 508 — 2,262Total revenue from customers 867 1,671 193 6,464
Licenserevenuereferstocompletedlicenseandcollaborationagreementsandthusreimbursedlicensefeeswhichwerepartiallyrecognizedasincome.IncomefromdevelopmentcooperationreferstopaymentsfromUSpartnersintheHeatBoostproject.
SaltX Technology Holding AB (publ) Year-End Report Q4 2019 19
NOTE 3 F INANCIAL INSTRUMENTS
TheGrouphasreportedthefol-lowingamountsintheincomestatementrelatingtorevenue: Shares in listed companies Dec 31, 2019 Dec 31, 2018
CapitalDevelopment HoldingsLtd. 6,117 7,800(formerlyZhongFaZhanHoldingsLtd)
Theassetshavebeenvaluedatlevel1inthefairvaluehierarchy.FortheGroup'sborrowing
fromAlmiFöretagspartner,thecarryingamountofthebor-rowingcorrespondstoitsfairvaluesincetheinterestrateonthisborrowingisatparitywithcurrentmarketinterestrates.However,differenceshavebeenidentifiedinregardtotheloanfromtheSwedishEnergyAgency.Thevalueoftheliabilityis
expectedtochange.ArequestforremissionofmostoftheloanhasbeensenttotheAgency.Thefundingwasusedtodevel-opapplicationsthatthecompa-nyisnolongerworkingwith.ItistheassessmentofSaltXthatthereisnofoundationforrepay-mentbecausetheseapplicationsarenotexpectedtogenerateanyrevenue.Inregardtothefairvalueof
short-termfinancialassetsandliabilities,thefairvalueisesti-mated to correspond to the car-rying amount since the discount effectisnotmaterial.
NOTE 4 TRANSACTIONS WITH AFFIL IATED PARTIES
In2019,notransactionswithaffiliatedpartieshaveoccurredother than agreed payments totheBoardofDirectorsandmanagement.
NOTE 5 EFFECT OF THE INTRODUCTION OF IFRS 16 LEASES
ThisnoteexplainstheeffectsintheGroup'sfinancialreportinconnectionwiththeapplicationofIFRS16Leases.
The Group has applied IFRS 16LeasesasofJanuary1,2019,whichhasresultedinchangedaccountingpoliciesandadjust-ments in the amounts reported inthefinancialreport.Inaccor-dancewiththetransitionrulesinIFRS16,theGrouphasappliedthesimplifiedtransitionmethodandhasthereforenotrecalculat-edthecomparativefigures.Allrightsofusearevaluedatthetimeoftransitionatanamountcorresponding to the lease liabili-ty.Inconnectionwiththetran-sition,thefollowingreliefruleswereapplied: Rightsofuseassetshavebeenclassifiedonthebasisofassetclass;officepremisesTheas-setsareonlyfoundinSweden. Thetermoftherightsofusehasbeenestablishedwiththe
aidofex-postknowledgeregar-ding,forexample,theextensi-onoptionandtheterminationclause.
Theweightedaveragemarginalinterestrateusedonthefirstdayofapplication,January1,2019,was6percent.
Effect in the balance sheetRightsofuseassetsandleasingliabilitieshavebeenincludedinthebalancesheet.Theseareshownonseparatelinesinthebalancesheet.
Effect in the income statementIFRS16hashadanegligibleimpactonoperatingincomeandprofit/lossafterfinancialitems.
Effect in the cash flow statementThetransitiontoIFRS16hashadaneffectonthecashflowfortheperiodJanuary-Sep-tember2019asamortizationofleasingliabilitiesisreportedaspartoffinancingactivitiesinsteadofbeingincludedinoperatingactivities.ThismeansthatcashflowfromoperatingactivitiesfortheperiodisTSEK1,086higherwhilecashflowfromfinancingoperationsisTSEK1,339lowercomparedwithifpreviousaccountingpoli-cieshadbeenapplied.
TRUE VALUE Dec 31, 2019 Dec 31, 2018 Carryingamount Carryingamount Carryingamount CarryingamountState Energy Agency 24,388 23,830 24,488 22,973
20 SaltX Technology Holding AB (publ) Year-End Report Q4 2019
PARENT COMPANY INCOME STATEMENT
TSEK FY 2019 FY 2018
NET SALES 2,400 3,528 Costofgoodssold — -162Otherexternalcosts -4,444 -7,307Peronnelcosts -8,876 -6,511TOTAL OPERATING EXPENSES -13,320 -13,980
OPERATING RESULT -10,920 -10,452 Financialincome 3,198 5,067Financialexpenses -1,683 -341FINANCIAL ITEMS — NET 1,515 4,726
PROFIT BEFORE TAX -9,405 -5,726 Groupcontribution -83,000 -20,000Incometax — 2,070PROFIT/LOSS FOR THE PERIOD -92,405 -23,656
SaltX Technology Holding AB (publ) Year-End Report Q4 2019 21
PARENT COMPANY BALANCE SHEET
TSEK Dec 31, 2019 Dec 31, 2018
ASSETSFINANCIAL ASSETS Participationsinsubsidiaries 197,270 197,270Shares 6,117 7,800Total fixed assets 203,387 205,070 Current assets Current receivables Otherreceivables 782 4,987AccountsreceivablefromGroupcompanies 750 32,552Prepaidexpensesandaccruedincome 265 196Cashandbankdeposits 82,458 64,581Total current assets 84,255 102,316TOTAL ASSETS 287,642 307,386 EQUITY AND LIABILITIES Equity Restricted equity Sharecapital 5,808 4,911Othercontributedcapital 1,228 888 7,036 5,799Non-restricted equity Sharepremiumreserve 447,196 372,584Retainedearnings -78,163 -54,507Profit/lossfortheyear -92,405 -23,656 276,628 294,421Total equity 283,664 300,220
Current liabilities Accountspayable 778 3,024Otherliabilities 158 758Accruedexpensesanddeferredincome 3,042 3,384Total current liabilities 3,978 7,166TOTAL EQUITY AND LIABILITIES 287,642 307,386
22 SaltX Technology Holding AB (publ) Year-End Report Q4 2019
AFFIRMATION BY THE BOARD OF DIRECTORS AND THE CEOTheBoardofDirectorsandCEOaffirmthatthisyear-endreportprovidesatrueandfairviewoftheParentCompanyandtheGroup'soperations,financialpositionandresultsfortheperiodconcerned.
Stockholm,February21,2020BoardofDirectors
ÅkeSund StaffanAndersson TonyGrimaldi Chairman board member board member
Elin Lydahl Tommy Nilsson Indra Åsander board member board member board member
Carl-Johan Linér CEO
SaltX Technology Holding AB (publ) Year-End Report Q4 2019 23
Auditor’s report
SaltX Technology Holding AB (publ) org nr 556917-6596
Introduction
We have reviewed the condensed interim financial information (interim report) of SaltX Technology Holding AB (publ) as of 31 December 2019 and the 12-month period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
Scope of Review
We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.
Stockholm February 21, 2020
Öhrlings PricewaterhouseCoopers AB
Claes Sjödin Leonard Daun Authorized Public Accountant Authorized Public Accountant Auditor in charge
24 SaltX Technology Holding AB (publ) Year-End Report Q4 2019
OTHER INFORMATION
CALENDAR TheAnnualGeneralMeeting April23,2020InterimReportQ12020 May5,2020InterimReportQ22020 August25,2020InterimReportQ32020 November4,2020Year-endReport2020 February17,2021
The2019AnnualReportisexpectedtobepublishedattheendofMarch2020.
ADDRESSSaltX Technology Holding AB (publ)Västertorpsvägen135129 44 HÄGERSTEN
Forfurtherinformation,pleasecontact:
Carl-JohanLinér,CEO+46(0)[email protected]
HaraldBauer,CFO+46(0)[email protected]