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Ocean Sun
Annual Report • Apr 18, 2024
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Annual Report
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ANNUAL REPORT 2023
1Page 1 Annual report 2023 Annual report 2022
Table of contents
| About Ocean Sun |
03 |
|---|---|
| CEO letter | 09 |
| Share Info |
10 |
| Shareholders (Top 20) |
11 |
| Management | 12 |
| Board of Directors | 14 |
| Board of Directors report | 16 |
| Responsibility statement | 21 |
| Group financials | 22 |
| Notes - Group |
27 |
| Parent company financials | 37 |
| Notes – Parent |
42 |
A bold solution to our global energy needs
Inspired by nature, our patented technology is based on solar modules mounted on hydro-elastic membranes and offers cost and performance benefits not seen in any other floating PV system today.
With offices in Oslo, Singapore and Shanghai, Ocean Sun is embarking on its vision to become the world's leading technology provider of floating solar.
Our values
Responsible
We develop sustainable solutions in harmony with nature
Simplicity
We create value by working smart and following the highest quality standards
Innovative
We are committed to continuous improvements to our solutions
Supportive
We bring out the best in each other, as a team and among our partners
OCEAN SUN IN BRIEF
Ocean Sun is a technology provider, offering licence agreements to developers and independent power producers worldwide. Our technology offers the lowest levelised cost of energy of any FPV solution available, thanks to the lean design and the cooling effect from the water which increases the power output from the solar modules.
Working towards a renewable energy future, we have installed ten demonstration systems on two continents. Since its foundation, Ocean Sun has been working towards its vision to be a world leading technology provider of floating solar.
The need for floating PV
According to the International Energy Agency (IEA) "solar PV is becoming the lowest-cost option for new electricity generation in most of the world". The IEA also forecasts that we will need 5,000 GWp of installed solar capacity by 2030 of installed solar capacity to reach the Net Zero Goals. This would require extensive areas of land, equivalent to almost 15 million football pitches. Finding suitable deployment space, close to existing grid and energy consumption is therefore an increasing problem for developers around the world.
On the other hand, water covers 71 per cent of our planet's surface, and a majority of the world's densely populated areas, the electricity demand centres, are located close to water.
By utilising these water assets, floating PV can facilitate a new era of large-scale solar power generation.
Studies indicate that covering only 10 per cent of the world's hydropower reservoirs with floating solar would produce 4,000 GWp of solar capacity.
Co-locating with hydropower also enables the use of existing grid infrastructure, thus reducing the overall investment cost. Adding natural lakes, rivers and the ocean to this, the potential for floating solar becomes unlimited.
However, to unlock the full potential of floating solar, the industry needs a technology that is both cheaper and more reliable, in order to reduce the investment gap between floating solar and ground-mounted PV.
Ocean Sun's solution has this potential and offers increased robustness and lower cost, bringing CAPEX closer to that of groundmounted PV.
Ocean Sun's Value proposition – The world's best FPV system
- Low CAPEX
- Lowest material use
- Fast and easy installation
- Lean transportation
- High efficiency water cooled
- Seaworthy
Benefits of FPV
- Reduced land use
- Co-sitting benefits with hydro and wind
- Production closer to consumption
- Aqua culture benefits
- Reduced evaporation
Strategy
Ocean Sun is a technology provider, licensing its patented technology to developers and EPCs. This business model facilitates rapid scalability, reduces project risk and enables the company to remain asset-light.
The company's main revenue will come from licence fees payable per Watt peak installed, in addition to engineering fees.
Ocean Sun targets utility-scale projects, collaborating globally with EPCs and developers with a local presence.
FPV market segments
Our strategic priorities
-
- Increase revenue through market focus
-
- Continuous technology improvement and cost reduction
-
- Improve the customer experience during installation and operation
| Benign waters | Reservoir | Nearshore | Offshore | ||
|---|---|---|---|---|---|
| Segment positives | |||||
| Lion's share of installed capacity -> established market |
Rising interest from HPP-operators, unlimited potential |
Proximity to demand, island nations (smaller scale) |
Strong interest from O&G and offshore wind for FEED |
||
| Segment negatives | |||||
| Multiple suppliers, primarily pontoon based |
Few installations on HPP to date |
Undefined market regulation |
Challenging operational environment |
||
| Segment potential | |||||
| Low/medium | High | High | Medium (wind farms, Power to X) |
||
| Segment readiness | |||||
| Established | Expanding but not mature near/mid-term |
Testing phase mid-term |
R&D phase long-term |
||
| Ocean Sun's position | |||||
| Important for cumulating track record |
Target segment for OS which has unique selling points |
OS has a unique commercial solution, focus mid-term |
Focus for R&D activities |
Our climate benefits
RENEWABLE ENERGY
Ocean Sun offers a technology that provides affordable renewable energy with minimal impact on the environment
NO LAND USE
Not using land resources prevents deforestation and avoids conflicts with agriculture and urbanisation, while reducing grid connection cost and power losses
MORE POWER OUTPUT
Water cooling of the solar panels enables up to 10% more power production with the same materials
WATER RESOURCE MANAGEMENT
The system reduces evaporation, underwater sunlight exposure and mitigates algae growth challenges
LESS MATERIALS
Ocean Sun uses up to 65% less plastic, 90% less aluminium and 50% less copper compared to other FPV solutions
LEAN TRANSPORTATION
Material efficiency and dense packaging of membrane results in ~10x lower packaging volume than for pontoon-based FPV systems.
Climate impact potential
A 100 MWp Ocean Sun FPV plant at SEA would:
Save 157 000 tonnes of C02 per year
That is equivalent to the emissions from the cars in a medium sized city for a whole year
Save 300 hectares of land
No need to take up valuable land or contribute to deforestation. This is the equivalent of:
~ 34 000 Cars
~ 120 football pitches
Source: https://www.irena.org/Data/View-data-by-topic/Climate-Change/Avoided-Emissions-Calculator
La Palma, Spain, 250 kWp
Letter from the CEO
Dear Shareholders and Stakeholders,
I am honoured to address you as the newly appointed CEO of Ocean Sun, succeeding Børge Bjørneklett who led the team for the past seven years. As I step into this role, I am committed to building upon the foundation he has laid and driving Ocean Sun to new heights in the international floating solar market.
Reflecting on 2023, while I was not at the helm, Ocean Sun continued its journey of innovation and progress. Despite being a year with fewer notable milestones, we spent our time improving our solutions and preparing for the upcoming phase of growth.
Our collaboration with SPIC in China provided valuable learning, as we witnessed our floaters experience storms far offshore. These experiences, through a joint R&D endeavour, have been instrumental in shaping our future strategy and refining our technology, potentially unlocking new segments for floating solar offshore.
Similarly, the completion of the BOOST project in La Palma in December 2023 underscored our commitment to continuous improvement. As we prepare for its relaunch in 2024, we are looking forward to further demonstrating the robustness of our nearshore floating solar solution.
In 2023, we also signed a strategic partnership agreement with Inseanergy, a company focused on serving the aquaculture segment with floating solar, using the patented Ocean Sun technology. This collaboration fits our strategy well and is expected to provide an additional arena to demonstrate our technology in 2024.
However, as we chart our course for the future, we need to acknowledge that the floating solar industry is still in its infancy, with regulations and standards varying greatly across different regions. Navigating this landscape presents unique challenges, resulting in delays in the development for many of our already announced projects and pipeline in general.
In light of this, we are strategically shifting our focus towards hydropower reservoirs and other benign water bodies. The nearshore market will still be relevant for pilots and single rings, but we do not anticipate utility scale installations in these waters in the short term. Therefore, concentrating on more regulatory mature water bodies will contribute to Ocean Sun's success. Going to market, we have a solid technical base to rely on. We have reached a significant milestone with 150 patents across four main families, strengthening our intellectual property protection. Key market approvals in China and India ensure safeguarding of our technologies. Moreover, in 2023, we continued patenting new innovations, reinforcing our position as a leader in the floating solar industry.
In closing, I extend my thanks to the Ocean Sun team and Board of Directors for their trust and commitment. Together with our partners, clients and shareholders, we will continue to be a solution to our global energy needs.
Sincerely, Kristian Tørvold, CEO
Share info
About our shares
Ocean Sun has been listed on Euronext Growth Oslo since 26 October 2020, under the ticker OSUN. The listing price for Ocean Sun was NOK 18 per share and the price as at 31 December 2023 was NOK 3.81 per share.
The company has 44,986,200 outstanding shares. The share capital as at 31 December 2023, amounted to NOK 449,862.
| Number of shares: | 44,986,200 |
|---|---|
| Votes: | 44,986,200 |
| Shareholders 31 Dec 2023: |
1300+ |
| Listing price: | NOK 18.00 |
| Highest price 2023: | NOK 7.24 |
| Lowest price 2023: | NOK 3.64 |
| Market cap 31 Dec 2023: | NOK 171 397 422 |
| Auditor: | Ernst & Young AS |
Contacts
| Kristian Tørvold, CEO | +47 970 88 847 |
|---|---|
| Karl Lawenius, CFO | +47 456 33 881 |
Financial calendar
| Event | Date |
|---|---|
| AGM | 7 May 2024 |
| Q1 Report | 14 May 2024 |
| Half yearly report |
29 August 2024 |
| Q3 Report | 7 November 2024 |
| Q4 Report | 13 February 2025 |
Top 20 shareholders
| Name | Holding | Stake |
|---|---|---|
| DR.ING. BØRGE BJØRNEKLETT AS | 9 242 500 | 20.55% |
| KVANTIA AS | 8 126 888 | 18.07% |
| PROGRESSI AS | 6 326 100 | 14.06% |
| UMOE AS | 4 000 000 | 8.89% |
| MP PENSJON PK | 2 017 966 | 4.49% |
| Citibank Europe plc | 2 000 000 | 4.45% |
| SAUAR INVEST AS | 1 263 281 | 2.81% |
| Morgan Stanley & Co. Int. Plc. | 1 035 120 | 2.30% |
| OPULENS INVEST AS | 1 000 000 | 2.22% |
| Bank Pictet & Cie (Europe) AG | 921 725 | 2.05% |
| UBS AG LONDON BRANCH | 666 000 | 1.48% |
| CLEARSTREAM BANKING S.A. | 557 948 | 1.24% |
| CAABY AS | 535 700 | 1.19% |
| NORDNET LIVSFORSIKRING AS | 411 969 | 0.92% |
| Bkraft Holding AS | 400 000 | 0.89% |
| Saxo Bank A/S | 359 484 | 0.80% |
| The Bank of New York Mellon SA/NV | 293 000 | 0.65% |
| Nordnet Bank AB | 243 083 | 0.54% |
| SVEUM BJORN | 202 100 | 0.45% |
| GREEN TUNDRA AS | 201 900 | 0.45% |
| Subtotal top 20 shareholders | 39 804 764 | 88.48% |
| Other | 5 181 436 | 11.52% |
| Total | 44 986 200 | 100.00% |
As at 31 December 2023
Management
KRISTIAN TØRVOLD CEO
Kristian brings over 15 years of valuable experience in manufacturing, energy and offshore industries in Europe and Asia. His past focus on building and scaling startups aligns seamlessly with our vision for Ocean Sun's global prominence.
- Master of Science in Finance & Economics, Fudan University
- No. of shares: 202,900
- No. of share options: 116,618
KARL LAWENIUS CFO
10 years of experience form working with M&A and business development related to growth companies on consulting and corporate level.
- Master of Science in Industrial Engineering, Chalmers
- No. of shares: 201,900
- No. of share options: 116,277
ALEXANDER TELJE CCO
15+ years of executive experience including as General Manager of British American Tobacco in Norway and as Director of Memetor.
- MBA in Management & Organisation, USC.
- No. of shares: 85,000
- No. of share options: 116,277
ARE GLØERSEN Director SE Asia
10+ years of experience from the solar industry as part of REC Solar. 5+ years of executive experience in SE Asia, including Director of Tronrud Engineering and CEO of Commlight.
- Master of Science in Astronautical Engineering, Nord University.
- No. of shares: 201,900
- No. of share options: 130,758
IVAR BLEKASTAD COO
15+ years of operational and executive experience from the PV industry and in-depth knowledge of the entire value chain through positions in Norwegian Crystals, REC Solar and Norsk Hydro.
- Master of Science in Reliability and Risk Analysis, University of Stavanger.
- No. of share options:115,061
Board of Directors
MAY KRISTIN SALBERG
Chairperson
Strategic and operational management experience from the food industry, IT and the transportation industry. Skilled in organisational and business process development in addition to ISO-standards related to the environment, information security and quality management. Previous board positions as chairperson and board member in both professional companies and non-profit organisations.
No. of shares: 10,113
BRIAN GLOVER Board member
Specialised in sustainable investment and has a history as project manager for renewable power supply in hydropower, wind, and solar PV. Founded multiple successful small businesses. Many years of experience from the boards of Norwegian companies in consulting and investment.
No. of shares: 400,000
KRISTIN ÅBYHOLM Board member
15+ years of experience from IT-tech companies. At Confirmit ASA she worked with global 500 brands, working at the Oslo, London and San Francisco offices. Then working for Cicero Consulting, she helped create platforms and solutions for the Norwegian financial industry. Experienced board executive. MSc in Computer Science from NTNU, and Executive Master of Management from BI.
No. of shares: 12,000 Representing Kvantia (8,126,888) and Caaby (585,700 of which 50,000 are lent out)
Banja dam, Albania, 2 MWp
17Page 15 Annual report 2023 Annual report 2022
Board of Directors report
Ocean Sun is a technology provider, offering its customers access to its proprietary technology along with engineering and design services to help them utilize it. For this, Ocean Sun charges a licence fee per Watt peak installed. This business model focuses on leveraging Ocean Sun's key strength, the technology, while simultaneously opening for competent partners to carry out project development, procurement and construction. The company continues to receive positive feedback on this revenue model from potential customers working with larger projects. However, to realise demonstrator projects and smaller systems that are important to further increase our track record, the company occasionally considers alternative revenue models. The successful delivery of the Acciona projects is a good indication that the alternative models are possible for demonstrators.
The appointment of Kristian Tørvold as the new CEO marks a strategic move for Ocean Sun. Kristian's leadership in establishing and growing our North-East Asia office, coupled with a deep understanding of the important Asian market, positions us for continued growth. His past focus on building and scaling startups aligns well with Ocean Sun's vision of becoming a world leading technology provider of floating solar. Under Kristian, Ocean Sun will work with a more defined and focused strategy. Key parts of this strategy are employee empowerment and an increased focus on targeted pipeline growth, primarily within the reservoir market segment.
Financial results
Ocean Sun's revenue in 2023 totalled NOK 3.1 million (NOK 3.7 million). Of this, NOK 0.2 million relates to licence fees for an initial delivery to the Keppel project in Singapore. NOK 1.0 million relates to service
and engineering fees from multiple customers, and NOK 2.0 million relates to revenue from a turnkey EPC (engineering, procurement and construction) contract in Spain. Revenue from this contract is recognised based on percentage of completion. Construction work started in March 2024 and was completed in the beginning of April the same year. Total recognised contributions from research grants amounted to NOK 13.7 million (NOK 6.6 million). Of this, NOK 8.2 million relates to the Horizon 2020 project BOOST and includes compensation for material costs related to the construction of the demonstrator in La Palma. NOK 2.2 million and NOK 2.6 million relate to the Green Platform project HydroSun and grant from the Research Council of Norway, respectively.
The Group posted an operating loss of NOK 21.8 million in 2023 (NOK -19.4 million). This includes a non-recurring cost of approx. NOK 1.3 million for legal fees related to the settlement of a patent infringement case. Ocean Sun reported a net financial income of NOK 3.1 million in 2023 (NOK 1.2 million), mainly relating to interest income from cash and cash equivalents and foreign exchange gains. Net cash flow for the year came in at NOK -16.2 million (NOK -14.2 million). This is primarily attributable to the period's operating loss, which was slightly offset by a positive effect on the working capital.
Cash and cash equivalents amounted to NOK 46.7 million as at 31 December 2023, of which NOK 2.0 million were restricted funds. The equity ratio was 85.5 per cent and the company had no interest-bearing debt. With this cash position Ocean Sun has sufficient funds to continue its operation in the coming years even in case of limited revenue and continued deficits.
The deficit for 2023 has been allocated to the share premium reserve.
Completed projects
Our full-scale demonstrators for Statkraft in Albania (2 MWp) and SNAP/Scatec in the Philippines (250 kWp) are important installations as they serve as excellent demonstrators of our technology. Continuous operating data from the two systems also helps Ocean Sun to improve O&M procedures and validate the long-term performance of the solution.
Ongoing active projects
During the second half of 2023 Ocean Sun worked intensely with the planning and sourcing for a 250 kWp demonstrator in Spain delivered on a turn-key basis. The system was built for ACCIONA, a global leader in sustainable infrastructure and renewable energy, as part of their testbed for floating solar. At the site, ACCIONA will test the solution in a real environment and acquire the necessary knowledge in construction, operation, maintenance, and environmental monitoring to scale up to commercial application. As such, this project has been an excellent platform to deepen our relationship with a major international customer.
The BOOST offshore floating solar demonstrator at La Palma was constructed during November and December 2023 and marked the final milestone in a comprehensive three-year R&D project supported by Horizon 2020 focusing on developing a system for exposed sea states. The system was structurally completed and formally opened in December with local dignitaries in attendance. However, electrical completion and commissioning of the system was still pending delivery of components for the land-based connection. During the time that the system was unconnected, damage occurred to parts of the panels and the membrane, and it was decided to remove all panels and conduct a root-cause investigation. This investigation has now been completed and Ocean Sun has
identified the necessary design updates to relaunch the floater. This work will continue during Q2 2024 with the ambition to commission the installation during the second half of 2024. Once completed, the system will be ideal for further development and verification of a commercial offering for exposed nearshore and coastal locations, opening new markets for the deployment of floating solar. In the meantime, Ocean Sun continues to have strong technology for the main markets on lakes, reservoirs and partly sheltered costal installations.
Backlog
Ocean Sun currently has three projects totalling 6.7 MWp in the backlog. All these projects have signed licence agreements and are partly paid. However, construction continues to drag out in time due to problems outside of Ocean Sun's control such as permits, grid connection and power sales agreements. Although delays are normal for renewable energy development, going forward, Ocean Sun will have a more dedicated focus on increasing the backlog to be less dependent on single projects delays.
Engineering and feasibility studies
Engineering and site optimised designs are an integral part of an Ocean Sun delivery and for many projects a key milestone in the sales process. Before each project, Ocean Sun prepares a feasibility study and a detailed design for the site. This is either covered by the licence agreement or sold as a separate prefeasibility study, to frontload cash flows and stress test customer interest. During 2023, Ocean Sun worked on many such prefeasibility reports and, in the last quarter, delivered four reports to important potential developers in Europe, the Middle East and Asia.
Organisation and working environment Corporate governance
On 15 February 2024, Kristian Tørvold was promoted to CEO effective immediately, replacing Ocean Sun's founder Børge Bjørneklett, who left the company. No one is better positioned than Kristian Tørvold to lead the company in scaling up, and although he has only been in the position for two months, he has already set clear objectives and a more defined operating strategy for the company in the coming years.
In the opinion of the Board of Directors, the company's working environment is good. The company had no work-related injuries in 2023.
The number of full-time equivalents (FTEs) in the Group increased to 14 (13) during 2023. Of these, 12 are men and two are women. The Board consists of three members, two women and one man.
Going concern
The renewable energy transition and year-onyear records for solar deployment provides a positive macro environment for Ocean Sun to continue its scale-up. Although Ocean Sun is currently presenting negative operating results and will most likely continue to do so during 2024, there is strong interest in the technology. The company also has a strong and sound liquidity position to finance further operations in 2024 and 2025, even with minimal revenue contribution.
In view of this financial position, the Board confirms the going concern assumption and that the 2023 financial statements have been prepared based on the assumption of a going concern.
Ocean Sun's corporate governance policy exists to ensure an appropriate division of roles among the company's owners, Board of Directors, and executive management. An appropriate division of responsibilities and satisfactory internal controls will contribute to the greatest possible value creation over time, to the benefit of shareholders and other stakeholders.
The governance policy sets the framework for how we manage our company. We set the highest standard for honesty, integrity and compliance and Ocean Sun has defined and documented the key processes in our business. Although we are not formally certified, we comply with the central elements of ISO certifications by having documented processes, fostering continuous development and facilitating reporting and follow-up procedures for deviations, accidents and improvements.
Based on the relatively simple business model and the company's small staff, the Board believes that adequate steps have been taken to mitigate the internal control risk. Good corporate governance, that is, proper Board conduct and company management, are key to Ocean Sun's efforts to build and maintain trust. Ocean Sun has compared the corporate governance requirements and recommendations for companies listed on Euronext Growth and are similar in size to Ocean Sun, with the company's own corporate governance procedures and practice. The findings show that Ocean Sun complies with these requirements and recommendations.
The company's Board is elected at the company's annual shareholders' meeting for a term of one year.
Corporate Social Responsibility (CSR)
At Ocean Sun, our CSR policy defines corporate social responsibility as achieving commercial profitability in a way that is consistent with fundamental ethical values and with respect for individuals, the environment and society. Our work with CSR, reflects all elements within ESG and helps us make sustainable and responsible choices throughout the value chain. The main pledges of our ESG work are:
Governance: We set the highest standard for honesty, integrity and compliance
HSE: We have zero-tolerance for injuries on humans and damage to the environment.
Environmentally responsible: We develop sustainable solutions in harmony with nature.
Human rights and equality: We ensure that all employees are treated with respect and have proper working conditions.
During 2023, Ocean Sun compiled an ESG review, which was published on the company's web page. In addition, we have compiled a report according to the Norwegian transparency Act.
Environmental commitment
Ocean Sun was founded on the concept of being a bold solution to our global energy needs and this concept is still deeply vested in everything we do. Ultimately, we are an enabler of the increased adoption of renewable energy.
The concept of floating solar has several inherent environmental benefits as it allows for
renewable energy production with low interreference with agriculture and forestry minimizing the environmental footprint. In many places, it also provides the only affordable alternative to fossil power plants, thereby reducing greenhouse gas emissions. As indicated by the illustration on pages 7 and 8, there are many environmental benefits with an Ocean Sun installation.
As we continue to develop our system, we always have the environmental aspect in mind, giving careful consideration to reducing the climate impact of our design. We consider the full life cycle of all the materials we use and examine the possibility of using recycled or reused material.
Directors and officers liability insurance
The company has international insurance policy for its directors and executives.
Responsibility Statement
The Board of Directors has considered and approved the consolidated financial statements of Ocean Sun AS ("the Company") for the full year ending 31 December 2023. We confirm that, to the best of our knowledge, the financial statements for the period have been prepared in accordance with applicable accounting standards and give a true and fair view of the Company's assets, liabilities, financial position and profit and loss, and that the directors' report includes a fair review of the development and performance of the business and the position of the company as a whole, together with a description of the principal risks and uncertainties facing the company.
Lysaker, 18 April 2024
May Kristin Salberg Chairperson of the Board
Brian Glover Board member Kristin Åbyholm Board member
Kristian Tørvold CEO
Group Financials
- Income statement
- Balance sheet
- Cash flow statement
- Accounting principles
Page 22 Annual report 2023
Notes
Income Statement
| Consolidated financials | |||
|---|---|---|---|
| All figures in NOK'000 | Note | 2023 | 2022 |
| Income | |||
| Revenue | 2 | 3 153 | 3 767 |
| Other income | 2 | 13 673 | 6 613 |
| Total operating income | 16 827 | 10 380 | |
| Operating expenses | |||
| Raw materials and consumables used | (5 732) | (402) | |
| Employee cost | 3 | (20 735) | (17 511) |
| Depreciation | (13) | (18) | |
| Other Operating expenses | 4,5 | (12 115) | (11 842) |
| Total operating expenses | (38 595) | (29 773) | |
| Operating result | (21 768) | (19 393) | |
| Financial income | |||
| Interest income | 6 | 2 150 | 967 |
| Other financial income | 6 | 1 275 | 489 |
| Total financial income | 3 425 | 1 456 | |
| Financial expenses | |||
| Interest expenses | 6 | (11) | (5) |
| Other financial expenses | 6 | (307) | (210) |
| Total financial expenses | (318) | (215) | |
| Net financial items | 3 107 | 1 241 | |
| Result before taxes | (18 661) | (18 152) | |
| Taxes | 7 | (4) | (1) |
| Result after taxes | (18 665) | (18 153) | |
| Profit/loss attributable to owners of the parent | (18 665) | (18 153) | |
| Total Profit/loss attributable to owners of the parent | (18 665) | (18 153) |
Balance sheet
| Consolidated financials All figures in NOK'000 |
Note | 31.12.23 | 31.12.22 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Tangible non-current assets | |||
| Office equipment | 26 | 19 | |
| Total tangible - non curent assets | 26 | 19 | |
| Total non-current assets | 26 | 19 | |
| Current assets | |||
| Receivables | |||
| Accounts receivables | 10 | 944 | 3 622 |
| Other receivables | 10 | 5 126 | 4 759 |
| Total receivables | 6 069 | 8 381 | |
| Cash and equivalents | |||
| Cash and cash equivalents | 11 | 46 745 | 62 766 |
| Total cash and equivalents | 46 745 | 62 766 | |
| Total current assets | 52 815 | 71 147 | |
| Total assets | 52 841 | 71 167 | |
Balance sheet
| Consolidated financials All figures in NOK'000 |
|||
|---|---|---|---|
| Note | 31.12.23 | 31.12.22 | |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Paid in capital | |||
| Share capital | 14,15 | 450 | 450 |
| Treasury shares | 15 | (0) | (0) |
| Share based payment reserves | 15,16 | 933 | 137 |
| Share premium | 15 | 43 786 | 62 550 |
| Total paid in capital | 45 169 | 63 137 | |
| Retained earnings | |||
| Translation reserves | 15 | 31 | 23 |
| Accumulated loss | 15 | (18 774) | (65 496) |
| Cover uncovered losses | 15 | 18 743 | 65 473 |
| Total retained earnings | - | - | |
| Total Equity | 45 169 | 63 137 | |
| Liabilities | |||
| Non-current liabilities | |||
| Total long-term liabilities | - | - | |
| Current liabilities | |||
| Accounts payables | 2 483 | 760 | |
| Taxes and public duties | 848 | 725 | |
| Other current liabilities | 13 | 4 341 | 6 546 |
| Total current liabilities | 7 672 | 8 030 | |
| Total liabilities | 7 672 | 8 030 | |
| Total Equity and liabilities | 52 841 | 71 166 | |
Lysaker, 18 April 2024
May Kristin Salberg Chairperson of the Board
Brian Glover Board member Kristin Åbyholm Board member
Page 25 Annual report 2023
Cash flow statement
Consolidated financials All figures in NOK'000
| 2023 | 2022 | |
|---|---|---|
| Operating activities | ||
| Result before tax | (18 665) | (18 153) |
| Depreciations | 13 | 18 |
| Cost of share option program | 803 | 130 |
| Provision for bad debts | - | 178 |
| Change in accounts receivables | 2 679 | (3 800) |
| Change in other current assets | (368) | 6 003 |
| Change in accounts payable | 1 724 | (1 695) |
| Change in other current liabilities | (2 267) | 3 007 |
| Cash flow from operating activities | (16 081) | (14 313) |
| Finance |
| Change in other financing activities | 20 | - |
|---|---|---|
| Cash flow from financing activities | 20 | - |
| Foreign currency effects on cash | 39 | 88 |
| Net cash flow in the period | (16 022) | (14 225) |
| Cash and cash equiv., start of period | 62 766 | 76 991 |
| Cash and cash equiv., end of period | 46 745 | 62 766 |
Notes
Note 1 – Accounting principles
Basis for preparations
The financial statements have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles. The financial statements are consolidated and contains the parent entity, Ocean Sun AS as well as the wholly owned subsidiaries: Ocean Sun Systems AS (Norway), Ocean Sun China Co. Ltd (China) and Ocean Sun Pte. Ltd (Singapore). All intercompany transactions have been eliminated for both 2023 and 2022. As a result of rounding differences numbers or percentages may not add up to the total.
Sales revenue
The company's main revenue will be licence fees from technology licensing agreements and service revenues related to design, analysis and training. Revenue from licence fees is recognised on signing of the licence agreement. However, out of precaution, no licence revenue is recognized until there is full visibility that the project will be executed. Services are recognised as revenue as they are provided. In the case of any sales of goods, the revenue is recognised at the time of delivery. For turnkey projects revenue is recognised based on guidelines in NRS 2, where revenue is recognized on an ongoing basis based on percent of completion of the underlying contract.
Raw materials and consumables
The company occasionally buy material for specific projects, based on agreements with customers, either for re-sale or as part of turnkey deliveries.
Classification and assessment of balance sheet items
Current assets and current liabilities comprise items related to the ongoing business and development projects. For items other than accounts receivable, items that fall due within one year of the transaction date are included. Fixed assets are assets intended for permanent ownership and use. Current assets are valued at the lower of cost and fair value. Short-term debt is recognised in the balance sheet at the nominal amount at the time of establishment.
Fixed assets are valued at cost. Fixed assets are depreciated according to a reasonable depreciation plan. Fixed assets are written down to fair value in the event of impairment that is not expected to be temporary.
Receivables
Accounts receivable and other receivables are stated in the balance sheet at nominal value less provisions for expected losses. Provisions for losses are made on the basis of individual assessments of the individual receivables.
Fixed assets
Tangible fixed assets are capitalized and depreciated over the useful life of the fixed assets if they have assumed a useful life of more than 3 years and have a cost price exceeding NOK 15,000. Direct maintenance of fixed assets is expensed under operating costs on an ongoing basis, while costs or improvements are added to the cost of the fixed asset and depreciated in line with the fixed asset.
Shares in subsidiaries
Shares in subsidiaries are fully eliminated in the Group accounts.
Cash flow statement
The cash flow statement has been prepared according to the indirect method. Cash and cash equivalents include cash, bank deposits and other short-term, liquid investments.
Note 1 – Accounting principles, continued
Government grants
Government grants are accounted for when there is reasonable assurance that the company will meet the conditions associated with the grants, and the grants will be received. For the operating grant, the grant is recognised in the income statement at the same time as, and is classified as, the income it is to increase. The company spends significant resources on R&D activities related to developing its novel technology. For such activities, the company partly relies on grants, which is why such grants are recognised on a gross basis. The recognition of government grants is based on the principle of Percentage of Completion (PoC) on estimated cost to complete and presented as Other Income.
In addition, the following accounting principles have been applied:
Deposits in foreign currency are valued at the exchange rate at the end of the financial year and the cost method is used for investments in subsidiaries. Own expenses for research and development and for the development of rights are expensed.
Share-based payments
Employees of the company receive remuneration in the form of share-based options, whereby employees render services as consideration for equity instruments. This programme is measured at fair value at the date of the grant. The fair value at the grant date is expensed over the vesting period, based on the company's estimate of the shares that will eventually vest, adjusted for the effect of non-market-based vesting conditions. The fair value share-based program is measured using the Black-Scholes pricing model and is expensed to employee costs over the vesting period. The expected life used in the model has been adjusted based on management's best estimate for the effects of non-transferability, exercise restrictions and behavioural considerations.
Tax
The tax expense in the income statement includes both the tax payable for the period and the change in deferred tax. Deferred tax is calculated at 22 per cent on the basis of the temporary differences that exist between accounting and tax values. Tax-increasing and tax-reducing temporary differences that reverse or can reverse in the same period are offset and the tax effect is calculated on the net basis.
Note 2 – Operating income
| 2023 | 2022 | |
|---|---|---|
| Revenue | ||
| Licence revenue | 167 | 2 816 |
| Service and engineering revenue | 1 027 | 518 |
| Turnkey projects | 1 959 | - |
| Product sales | - | 433 |
| Subtotal Revenue | 3 153 | 3 767 |
| Other income | ||
| Grants from EU (BOOST Project) | 8 196 | 53 |
| Grants from Innovation Norway (Green Platform) | 2 229 | 4 318 |
| Grants from the Research Council of Norway (SkatteFunn + IPN) | 2 695 | 2 230 |
| Other | 553 | 12 |
| Subtotal other income | 13 673 | 6 613 |
| Total operating Income | 16 827 | 10 380 |
| Note 2 – Operating income (continued) |
2023 | 2022 |
|---|---|---|
| Geographicalspread of revenue | ||
| Europe, Middle East and Africa (EMA) | 2 451 | 2 687 |
| North East Asia (incl China) |
72 | 725 |
| South East Asia |
630 | 355 |
| Total revenue | 3 153 | 3 767 |
Note 3 – Renumeration
| 2023 | 2022 | |
|---|---|---|
| Salary and personnel cost | ||
| Salary | 17 120 | 15 082 |
| Employer's contribution | 2 081 | 1 554 |
| Pension | 611 | 607 |
| Recognized cost for share option scheme | 614 | 67 |
| Other related benefits | 308 | 201 |
| Total Salary and personnel cost | 20 735 | 17 511 |
Ocean Sun AS pension scheme is 4 % of annual salary up to 7.1 G (G was NOK 118 620 from 01.05.2023) and 10% of salary between 7.1 G and 12 G
| 2023 | 2022 | ||
|---|---|---|---|
| Full- time equivalents | |||
| Ocean Sun AS | 11 | 9 | |
| Subsidiaries | 3 | 4 | |
| Total | 14 | 13 | |
| Other | |||
| Salary | Pension | renumeration | |
| Renumeration for CEO | |||
| Børge Bjørneklett | 1 967 | 90 | - |
| Renumeration for board members | |||
| Thomas Julius Moe Børseth (Chairperson)* | 190 | - | - |
| Brian James Glover (Board member) | 135 | - | - |
| Kristin Åbyholm (Board member) | 135 | - | - |
| Anne Vera Skrivarhaug (Board member)* | 135 | - | - |
| May Kristin Salberg (Board member/Chairperson)* ** | 135 | - | 132 |
| Total renumeration for board members | 730 | - | 132 |
* May Kristin Salberg replaced Thomas Julius Moe Børseth as chairperson of the board following Mr. Børseth's resignation on 09.10.2023. Anne Vera Skrivahaug left the board following the annual general meeting in May 2023.
** May Kristin Salberg has delivered consultancy services amounting to NOK 115 thousand plus travel expenses in relation to facilitating the Company's work with updated business processes.
Board renumeration represents what has been paid out during 2023. The renumeration for the period from the annual general meeting in 2023 to the annual general meeting in 2024 was set to NOK 195,000 for the chair and NOK 134,000 for board members on the annual general meeting in 2023.
Note 4 – Renumeration to Auditor
The company had the following costs (excluding VAT) related to auditor Ernst & Young AS
| 2023 | 2022 | |
|---|---|---|
| Auditor's fee Ocean Sun AS | ||
| Audit services | 335 | 315 |
| Other attestation services | 109 | 65 |
| Other services | - | - |
| Total auditor's fee Ocean Sun AS | 444 | 380 |
Note 5 – Other operating expenses
| Expense type | 2023 | 2022 |
|---|---|---|
| Consultants, testing and patents | 6 286 | 5 748 |
| Facility cost, IT, etc | 1 686 | 1 521 |
| Legal, auditors, accounting, etc | 1 487 | 1 183 |
| Interim CFO | - | 1 288 |
| Provisions for bad debt | - | 178 |
| Materials for development and testing | - | 165 |
| Other | 2 655 | 1 758 |
| Total Other Operating Expenses | 12 115 | 11 842 |
Note 6 – Financial items
| 2023 | 2022 | |
|---|---|---|
| Finance income | ||
| Interest income | 2 150 | 967 |
| Agio | 1 275 | 489 |
| Total finance income | 3 425 | 1 456 |
| Finance expenses | ||
| Interest Expenses | (11) | (5) |
| Disagio | (307) | (210) |
| Total finance expenses | (318) | (215) |
Note 7 – Taxes
| 2023 | 2022 | ||
|---|---|---|---|
| Ocean Sun AS | |||
| This year's loss | (18 419) | (18 134) | |
| +/- Permanent differences |
16 | 29 | |
| +/- This years change in temporary differences |
(171) | 196 | |
| Tax base of the year | (18 574) | (17 909) | |
| Tax expenses in the income statement | - | - | |
| Tax payable in the balance sheet | - | - | |
| Ocean China | |||
| Ocean Sun China Comp. Ltd., Tax expenses in the income statement | (4) | (1) | |
| 31.12.2023 | 31.12.2022 | Change | |
| Temporary differences | |||
| Fixed assets | 12 | 19 | 7 |
| Current assets | - | (178) | (178) |
| Loss carried forward | (95 288) | (75 785) | 19 503 |
| Net temporary differences | (95 276) | (75 943) | 19 333 |
| Loss carried forward (not recognised as DTA) | 95 276 | 75 943 | (19 333) |
| Total temporary differences | - | - | - |
| Deferred tax assets 31.12.2022 based on 22% tax rate | - | - | - |
The Group has NOK 95.3 million (2022: NOK 75.9 million) of tax losses carried forward. These losses relate to a history of losses, do not expire, and may not be used to offset taxable income elsewhere in the Group. The subsidiaries neither have any taxable temporary difference nor any tax planning opportunities available that could partly support the recognition of these losses as deferred tax assets. On this basis, the Group has determined that it cannot recognise deferred tax assets on the tax losses carried forward. Deferred tax assets related to losses carried forward can be recognized when there is convincing evidence of future usage.
Note 8 – Subsidiaries
| Company name | Office | Share | Equity | Net profit |
|---|---|---|---|---|
| Ocean Sun Systems AS | Norway | 100% | 11 | 2 |
| Ocean Sun China Co. Ltd China | China | 100% | 127 | (248) |
| Ocean Sun Pte. Ltd Singapore* | Singapore | 100% | 75 | (69) |
*Ocean Sun Pte. Ltd is owned 100 % by Ocean Sun Systems AS.
Note 9 –Transactions with related parties
| Type | Amount | Net profit | |
|---|---|---|---|
| Invoices to Ocean Sun AS, from: | |||
| Salberg MASA | Related party | 132 | n.a |
Salberg MASA is a sole proprietorship of Chairperson of the Board May Kristin Salberg. Please refer to note 3 renumeration for more information regarding these transactions.
Note 10 – Accounts receivables and other receivables
| 31.12.23 | 31.12.22 | |
|---|---|---|
| Accounts receivables | ||
| Customer receivables | 446 | 1 180 |
| BOOST project receivables | 479 | - |
| Statkraft material | 19 | 2 620 |
| Provisions for bad debt | - | (178) |
| Total accounts receivables | 944 | 3 622 |
| Other Receivables | ||
| Material for projects | 2 027 | 380 |
| Accrued income contribution projects | 2 464 | 3 303 |
| VAT | - | 251 |
| Other | 635 | 825 |
| Total | 5 126 | 4 759 |
Note 11 – Cash and cash equivalents
| 31.12.23 | 31.12.22 | |
|---|---|---|
| Restricted cash* | 860 | 860 |
| Bank Guarantee ** | 1 158 | 234 |
| Cash | 44 727 | 61 673 |
| Total cash and equivalents | 46 745 | 62 766 |
*Restricted cash is reserved withholding tax related to employees
** Bank guarantee for Statkraft Albania project, expanded in 2023 following completion of three additional floaters, amounting to 100 thousand Euro.
Note 12 – Patents and trademarks
Ocean Sun AS has put considerable effort into patenting its key technology. The patent portfolio currently consist of more than 150 patent applications for four patent families with applications in 51 countries/patent organisations. The main patent has already been accepted in several key states including the US, United Kingdom, China, India, European Patent Organization (EPO) and Norway.
Ocean Sun has also filed for Design registration and Trademark Registration in selected countries.
Note 13 – Other current liabilities
| 31.12.23 | 31.12.22 | |
|---|---|---|
| Prepayments from customers | 1 262 | - |
| Prepayment BOOST Project | 989 | 4 638 |
| Holiday allowance | 1 108 | 828 |
| Employer's contribution* | - | 399 |
| Employee bonuses | - | 171 |
| Other | 983 | 509 |
| Total Other payables | 4 341 | 6 546 |
*Included as taxes and public duties payable per 31.12.2023
Note 14 – Share capital and shareholders information
| Number of shares | |||
|---|---|---|---|
| Ocean Sun AS | |||
| Share capital | 44 986 200 | ||
| Ocean Sun AS stock of treasury shares pr. 31.12.2023 | 30 000 | ||
| Nominal value per share | 0,01 | ||
| Shareholders pr 31.12.2023 | Holdings | Ownership % | Voting rights % |
| Dr. Ing. Børge Bjørneklett AS | 9 242 500 | 21% | 21% |
| KVANTIA AS | 8 126 888 | 18% | 18% |
| PROGRESSI AS | 6 326 100 | 14% | 14% |
| UMOE AS | 4 000 000 | 9% | 9% |
| MP PENSJON PK | 2 017 966 | 4% | 4% |
| Citibank Europe plc | 2 000 000 | 4% | 4% |
| Sauar Invest AS | 1 263 281 | 3% | 3% |
| Morgan Stanley & Co. Int. Plc. | 1 035 120 | 2% | 2% |
| Opulens Invest AS | 1 000 000 | 2% | 2% |
| Bank Pictet & Cie (Europe) S.A. | 921 725 | 2% | 2% |
| Other | 9 052 620 | 20% | 20% |
| Total | 44 986 200 | 100% | 100% |
Note 15 – Equity
| Share based |
||||||
|---|---|---|---|---|---|---|
| Share | Own | Share | payment | Uncovered | ||
| capital | shares | premium | reserves | losses | Total | |
| At 1 January 2023 | 450 | (0) | 62 550 | 137 | - | 63 137 |
| Profit/Loss for the period | - | - | (18 665) | - | - | (18 665) |
| Share option program | - | - | - | 803 | - | 803 |
| Currency translation differences | - | - | (99) | (7) | - | (106) |
| At 31 December 2023 | 450 | (0) | 43 786 | 933 | - | 45 169 |
Note 16 – Share based payments
Share-based compensation benefits are provided to employees through the Long-term incentive program approved by the extraordinary general meeting held on the 11th of October 2021.
Equity-settled, share-based payments are measured at fair value (excluding the effect of non-marketbased vesting conditions) at the grant date. The fair value is expensed over the vesting period as an employee benefit expense, with a corresponding increase in equity. The vesting period is the period over which all the specified vesting conditions are to be satisfied. At the end of each period, the Group revises its estimates of the number of options that are expected to vest, based on the nonmarket vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
The fair value at the grant date is determined using the Black-Scholes-Merton option pricing model, which takes into account the exercise price, the life of the option, the current price of the underlying shares, the expected volatility of the share price, any dividends expected on the shares and risk-free interest rate for the life of the option. The expected share price volatility is based on historical volatility for a selection of comparable listed companies. The risk-free interest rate is based on zerocoupon government bonds with a term equal to the expected term of the option being valued.
Social security contributions payable in connection with an option grant are considered an integral part of the grant itself. The charges are treated as cash settled, share-based payments and remeasured at each reporting date.
Total costs and Social Security Provisions
| 2023 | |
|---|---|
| Cost of share option program | 803 210 |
| Total Social security provisions 2022 | - |
| Granted instruments 2023 | |
| Instrument | Option |
| Quantity 31.12.2023 (instruments) | 763 334 |
| Quantity 31.12.2023 (potential shares) | 763 334 |
| Contractual life* | 5.00 |
| Strike price* | 6.83 |
| Share price* | 6.20 |
| Expected lifetime* | 3.60 |
| Volatility* | 51.16% |
| Interest rate* | 3.15% |
| Dividend* | - |
| FV per instrument* | 2.33 |
*Weighted average parameters at grant of instrument
Note 16 – Share based payments (continued)
Outstanding instruments Year End (Options)
Quantity and weighted average prices
| Number of instruments | Weighted Average Strike Price |
|
|---|---|---|
| 01.01.2023 - | 31.12.2023 | |
| Outstanding OB (01.01.2023) | 246 714 | 11.56 |
| Granted | 763 334 | 6.83 |
| Exercised | - | - |
| Released | - | - |
| Adjusted | - | - |
| Performance Adjusted | - | - |
| Cancelled | - | - |
| Terminated | - | - |
| Expired | - | - |
| Outstanding CB (31.12.2023) | 1 010 048 | 7.99 |
| Vested CB | 18 083 | 15.20 |
Outstanding Instruments Overview
| Outstanding Instruments | Vested Instruments | ||||
|---|---|---|---|---|---|
| Strike price | Number of instruments |
Weighted Average remaining contractual life |
Weighted Average Strike Price |
Vested instruments 31.12.2023 |
Weighted Average Strike Price |
| 6.83 | 763 334 | 4.36 | 6.83 | - | - |
| 10.43 | 186 465 | 3.86 | 10.43 | - | - |
| 14.60 | 15 040 | 3.36 | 14.60 | - | - |
| 15.20 | 45 209 | 2.96 | 15.20 | 18 083 | 15.20 |
| Total | 1 010 048 | 18 083 |
Note 17 – Subsequent events
February 2024
Ocean Sun announces a transfer of leadership, where the Director for North-East Asia, Kristian Tørvold is appointed to the role of CEO of Ocean Sun, while the former CEO and founder, Børge Bjørneklett, leaves the company.
Parent Company Financials
- Income statement
- Balance sheet
- Cash flow statement
- Accounting principles
Page 37 Annual report 2023
Notes
Income statement
| Parent company financials | |||
|---|---|---|---|
| All figures in NOK'000 | Note | 2023 | 2022 |
| Income | |||
| Revenue | 2 | 3 081 | 3 659 |
| Other income | 2 | 13 664 | 6 610 |
| Total operating income | 16 745 | 10 269 | |
| Operating expenses | |||
| Raw materials and consumables used | (5 749) | (402) | |
| Employee cost | 3 | (16 013) | (12 970) |
| Depreciation | (13) | (18) | |
| Other Operating expenses | 4,5 | (16 420) | (16 147) |
| Total operating expenses | (38 195) | (29 538) | |
| Operating result | (21 450) | (19 269) | |
| Financial income | |||
| Interest income | 6 | 2 129 | 966 |
| Other financial income | 6 | 1 195 | 370 |
| Total financial income | 3 324 | 1 337 | |
| Financial expenses | - | ||
| Interest expenses | 6 | (11) | (5) |
| Other financial expenses | 6 | (282) | (197) |
| Total financial expenses | (293) | (202) | |
| Net financial items | 3 031 | 1 135 | |
| Result before taxes | (18 419) | (18 134) | |
| Taxes | 7 | - | - |
| Result after taxes | (18 419) | (18 134) | |
| Transferred to share premium | (18 419) | (18 134) | |
| Total transfers and allocations | (18 419) | (18 134) |
Balance sheet
| Parent company financials All figures in NOK'000 |
Note | 31.12.23 | 31.12.22 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Tangible non-current assets | |||
| Office equipment | 26 | 19 | |
| Total tangible - non current assets | 26 | 19 | |
| Other non-current assets | |||
| Investments in Subsidiaries | 8 | 280 | 280 |
| Total other non-current assets | 280 | 280 | |
| Total non-current assets | 306 | 299 | |
| Current assets | |||
| Receivables | |||
| Accounts receivables | 11 | 874 | 3 608 |
| Other receivables | 11 | 5 044 | 4 641 |
| Total receivables | 5 917 | 8 250 | |
| Cash and equivalents | |||
| Cash and cash equivalents | 12 | 46 559 | 62 509 |
| Total cash and equivalents | 46 559 | 62 509 | |
| Total current assets | 52 478 | 70 758 | |
| Total assets | 52 784 | 71 058 | |
Balance sheet
| Parent company financials All figures in NOK'000 |
Note | 31.12.23 | 31.12.22 |
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Paid in capital | |||
| Share capital | 15,16 | 450 | 450 |
| Treasury shares | 16 | (0) | (0) |
| Share based payment reserves | 16, 17 | 689 | 74 |
| Share premium | 16 | 44 055 | 62 474 |
| Total paid in capital | 45 193 | 62 998 | |
| Retained earnings | |||
| Accumulated loss | 16 | (18 419) | (65 549) |
| Cover uncovered losses | 16 | 18 419 | 65 549 |
| Total retained earnings | - | - | |
| Total Equity | 45 193 | 62 999 | |
| Liabilities | |||
| Non-current liabilities | |||
| Other long term liabilities | - | - | |
| Total long-term liabilities | - | - | |
| Current liabilities | |||
| Accounts payables | 2 860 | 1 004 | |
| Taxes and public duties | 742 | 534 | |
| Other current liabilities | 14 | 3 989 | 6 522 |
| Total current liabilities | 7 591 | 8 060 | |
| Total liabilities | 7 591 | 8 060 | |
| Total Equity and liabilities | 52 784 | 71 058 |
Cash flow statement
Parent company financials All figures in NOK'000
| 2023 | 2022 | |
|---|---|---|
| Operating activities | ||
| Result before tax | (18 419) | (18 134) |
| Depreciations | 13 | 18 |
| Cost of share option program | 614 | 67 |
| Provision for bad debts | - | 178 |
| Change in accounts receivables | 2 734 | (3 786) |
| Change in other current assets | (403) | 6 039 |
| Change in accounts payable | 1 855 | (1 574) |
| Change in other current liabilities | (2 365) | 3 172 |
| Cash flow from operating activities | (15 970) | (14 020) |
| Investments | ||
| Change in other financing activities | 20 | - |
| Cash flow from investment activities | (15 950) | (14 020) |
| Net cash flow in the period | (15 950) | (14 020) |
| Cash and cash equiv., start of period | 62 509 | 76 530 |
|---|---|---|
| Cash and cash equiv., end of period | 46 559 | 62 509 |
Notes
Note 1 – Accounting principles
Basis for preparations
The financial statements have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles. The financial statements are consolidated and contains the parent entity, Ocean Sun AS as well as the wholly owned subsidiaries: Ocean Sun Systems AS (Norway), Ocean Sun China Co. Ltd (China) and Ocean Sun Pte. Ltd (Singapore). All intercompany transactions have been eliminated for both 2023 and 2022. As a result of rounding differences numbers or percentages may not add up to the total.
Sales revenue
The company's main revenue will be licence fees from technology licensing agreements and service revenues related to design, analysis and training. Revenue from licence fees is recognised on signing of the licence agreement. However, out of precaution, no licence revenue is recognised until there is full visibility that the project will be executed. Services are recognised as revenue as they are provided. In the case of any sales of goods, the revenue is recognised at the time of delivery. For turnkey projects revenue is recognised based on guidelines in NRS 2, where revenue is recognised on an ongoing basis based on percent of completion of the underlying contract.
Raw materials and consumables
The company occasionally buy material for specific projects, based on agreements with customers, either for re-sale or as part of turnkey deliveries.
Classification and assessment of balance sheet items
Current assets and current liabilities comprise items related to the ongoing business and development projects. For items other than accounts receivable, items that fall due within one year of the transaction date are included. Fixed assets are assets intended for permanent ownership and use. Current assets are valued at the lower of cost and fair value. Short-term debt is recognised in the balance sheet at the nominal amount at the time of establishment.
Fixed assets are valued at cost. Fixed assets are depreciated according to a reasonable depreciation plan. Fixed assets are written down to fair value in the event of impairment that is not expected to be temporary.
Receivables
Accounts receivable and other receivables are stated in the balance sheet at nominal value less provisions for expected losses. Provisions for losses are made on the basis of individual assessments of the individual receivables.
Fixed assets
Tangible fixed assets are capitalised and depreciated over the useful life of the fixed assets if they have assumed a useful life of more than three years and have a cost price exceeding NOK 15,000. Direct maintenance of fixed assets is expensed under operating costs on an ongoing basis, while costs or improvements are added to the cost of the fixed asset and depreciated in line with the fixed asset.
Shares in subsidiaries
Shares in subsidiaries are recognised at face value in the parent company and fully eliminated in the Group accounts.
Cash flow statement
The cash flow statement has been prepared according to the indirect method. Cash and cash equivalents include cash, bank deposits and other short-term, liquid investments.
Note 1 – Accounting principles, continued
Government grants
Government grants are accounted for when there is reasonable assurance that the company will meet the conditions associated with the grants, and the grants will be received. For the operating grant, the grant is recognised in the income statement at the same time as, and is classified as, the income it is to increase. The company spends significant resources on R&D activities related to developing its novel technology. For such activities, the company partly relies on grants, which is why such grants are recognised on a gross basis. The recognition of government grants is based on the principle of Percentage of Completion (PoC) on estimated cost to complete and presented as Other Income.
In addition, the following accounting principles have been applied:
Deposits in foreign currency are valued at the exchange rate at the end of the financial year and the cost method is used for investments in subsidiaries. Own expenses for research and development and for the development of rights are expensed.
Share-based payments
Employees of the company receive remuneration in the form of share-based options, whereby employees render services as consideration for equity instruments. This programme is measured at fair value at the date of the grant. The fair value at the grant date is expensed over the vesting period, based on the company's estimate of the shares that will eventually vest, adjusted for the effect of non-market-based vesting conditions. The fair value share-based program is measured using the Black-Scholes pricing model and is expensed to employee costs over the vesting period. The expected life used in the model has been adjusted based on management's best estimate for the effects of non-transferability, exercise restrictions and behavioural considerations.
Tax
The tax expense in the income statement includes both the tax payable for the period and the change in deferred tax. Deferred tax is calculated at 22 per cent on the basis of the temporary differences that exist between accounting and tax values. Tax-increasing and tax-reducing temporary differences that reverse or can reverse in the same period are offset and the tax effect is calculated on the net basis.
Note 2 – Operating income
| 2023 | 2022 | |
|---|---|---|
| Revenue | ||
| Licence revenue | 167 | 2 810 |
| Service and engineering revenue | 954 | 416 |
| Turnkey projects | 1 959 | - |
| Product sales | - | 433 |
| Subtotal Revenue | 3 081 | 3 659 |
| Other income | ||
| Grants from EU (BOOST Project) | 8 196 | 53 |
| Grants from Innovation Norway (Green Platform) | 2 229 | 4 318 |
| Grants from the Research Council of Norway (SkatteFunn + IPN) | 2 695 | 2 230 |
| Other | 544 | 9 |
| Subtotal other income | 13 664 | 6 610 |
| Total operating Income | 16 745 | 10 269 |
| Total revenue | 3 081 | 3 659 |
|---|---|---|
| South East Asia |
630 | 355 |
| North East Asia (incl China) |
- | 617 |
| EMA | 2 451 | 2 687 |
| Geographicalspread of revenue | ||
| Note 2 – Operating income (continued) |
2023 | 2022 |
Note 3 – Renumeration
| 2023 | 2022 | |
|---|---|---|
| Salary and personnel cost | ||
| Salary | 12 399 | 10 483 |
| Employer's contribution | 2 081 | 1 554 |
| Pension | 611 | 556 |
| Recognised cost for share option scheme |
614 | 67 |
| Other related benefits | 308 | 311 |
| Total Salary and personnel cost | 16 013 | 12 970 |
Ocean Sun AS pension scheme is 4 % of annual salary up to 7.1 G (G was NOK 118 620 from 01.05.2023) and 10 % of salary between 7.1 G and 12 G
| 2023 | 2022 | |
|---|---|---|
| Full- time equivalents | ||
| Ocean Sun AS | 11 | 9 |
| Total | 11 | 9 |
| Other | |||
|---|---|---|---|
| Salary | Pension renumeration |
||
| Renumeration for CEO | |||
| Børge Bjørneklett | 1 967 | 90 | - |
| Renumeration for board members | |||
| Thomas Julius Moe Børseth (Chairperson)* | 190 | - | - |
| Brian James Glover (Board member) | 135 | - | - |
| Kristin Åbyholm (Board member) | 135 | - | - |
| Anne Vera Skrivarhaug (Board member)* | 135 | - | - |
| May Kristin Salberg (Board member/Chairperson)* ** | 135 | - | 132 |
| Total renumeration for board members | 730 | - | 132 |
* May Kristin Salberg replaced Thomas Julius Moe Børseth as chairperson of the board following Mr. Børseth's resignation on 09.10.2023. Anne Vera Skrivahaug left the board following the annual general meeting in May 2023.
** May Kristin Salberg has delivered consultancy services amounting to NOK 115 thousand plus travel expenses in relation to facilitating the company's work with updated business processes.
Board renumeration represents what has been paid out during 2023. The renumeration for the period from the annual general meeting in 2023 to the annual general meeting in 2024 was set to NOK 195,000 for the chair and NOK 134,000 for board members on the annual general meeting in 2023.
Note 4 – Renumeration to Auditor
The company had the following costs (excluding VAT) related to auditor Ernst & Young AS
| 2023 | 2022 | |
|---|---|---|
| Auditor's fee Ocean Sun AS | ||
| Audit services | 335 | 315 |
| Other attestation services | 109 | 65 |
| Other services | - | - |
| Total auditor's fee Ocean Sun AS | 444 | 380 |
Note 5 – Other operating expenses
| Expense type | 2023 | 2022 |
|---|---|---|
| Consultants, testing and patents | 6 286 | 5 748 |
| Cost for subsidiaries | 5 025 | 5 327 |
| Facility cost, IT, etc | 1 510 | 1 246 |
| Legal, auditors, accounting, etc | 1 366 | 1 073 |
| Interim CFO | - | 1 288 |
| Provisions for bad debt | - | 178 |
| Materials for development and testing | - | 7 |
| Other | 2 233 | 1 281 |
| Total Other Operating Expenses | 16 420 | 16 147 |
Note 6 – Financial items
| 2023 | 2022 | |
|---|---|---|
| Finance income | ||
| Interest income | 2 129 | 966 |
| Agio | 1 195 | 370 |
| Total finance income | 3 324 | 1 337 |
| Finance expenses | ||
| Interest Expenses | (11) | (5) |
| Disagio | (282) | (197) |
| Total finance expenses | (293) | (202) |
Note 7 – Taxes
| 2023 | 2022 | ||
|---|---|---|---|
| Ocean Sun AS | |||
| This year's loss | (18 419) | (18 134) | |
| +/- Permanent differences |
16 | 29 | |
| +/- This years change in temporary differences |
(171) | 196 | |
| Tax base of the year | (18 574) | (17 909) | |
| Tax expenses in the income statement | - | - | |
| Tax payable in the balance sheet | - | - | |
| Ocean China | |||
| Ocean Sun China Comp. Ltd., Tax expenses in the income statement | (4) | (1) | |
| 31.12.2023 | 31.12.2022 | Change | |
| Temporary differences | |||
| Fixed assets | 12 | 19 | 7 |
| Current assets | - | (178) | (178) |
| Loss carried forward | (95 288) | (75 785) | 19 503 |
| Net temporary differences | (95 276) | (75 943) | 19 333 |
| Loss carried forward (not recognised as DTA) | 95 276 | 75 943 | (19 333) |
| Total temporary differences | - | - | - |
| Deferred tax assets 31.12.2022 based on 22% tax rate | - | - | - |
The company has NOK 95.3 million (2022: NOK 75.9 million) of tax losses carried forward. These losses relate to a history of losses, do not expire, and may not be used to offset taxable income elsewhere in the company. The subsidiaries neither have any taxable temporary difference nor any tax planning opportunities available that could partly support the recognition of these losses as deferred tax assets. On this basis, the company has determined that it cannot recognise deferred tax assets on the tax losses carried forward. Deferred tax assets related to losses carried forward can be recognised when there is convincing evidence of future usage.
Note 8 – Subsidiaries
| Company name | Office | Share | Equity | Net profit |
|---|---|---|---|---|
| Ocean Sun Systems AS | Norway | 100% | 11 | 2 |
| Ocean Sun China Co. Ltd China | China | 100% | 127 | (248) |
| Ocean Sun Pte. Ltd Singapore* | Singapore | 100% | 75 | (69) |
*Ocean Sun Pte. Ltd is owned 100 % by Ocean Sun Systems AS.
Note 9 – Intercompany balances
Balance 31.12.2023
Ocean Sun AS, debt to: Ocean Sun Pte. Ltd Singapore 376
The foreign subsidiaries operate on a cost-plus basis.
Note 10 – Intercompany transactions and transactions with related parties
| Type | Amount | Net profit | |
|---|---|---|---|
| Invoices to Ocean Sun AS, from: | |||
| Ocean Sun Systems AS | Intercompany | 21 | 2 |
| Ocean Sun China Co. Ltd | Intercompany | 2 660 | (248) |
| Ocean Sun Pte. Ltd | Intercompany | 2 344 | (69) |
| Salberg MASA | Related party | 132 | n.a |
Salberg MASA is a sole proprietorship of Board Member May Kristin Salberg. Please refer to note 3 renumeration for more information regarding these transactions.
Note 11 – Accounts receivables and other receivables
| 31.12.23 | 31.12.22 | |
|---|---|---|
| Accounts receivables | ||
| Customer receivables | 376 | 1 165 |
| BOOST project receivables | 479 | - |
| Statkraft material | 19 | 2 620 |
| Provisions for bad debt | - | (178) |
| Total accounts receivables | 874 | 3 608 |
| Other Receivables | ||
| Material for projects | 2 027 | 380 |
| Accrued income contribution projects | 2 464 | 3 303 |
| VAT | - | 251 |
| Other | 553 | 707 |
| Total | 5 044 | 4 641 |
Note 12 – Cash and cash equivalents
| 31.12.23 | 31.12.22 | |
|---|---|---|
| Restricted cash* | 860 | 860 |
| Bank Guarantee ** | 1 158 | 234 |
| Cash | 44 541 | 61 416 |
| Total cash and equivalents | 46 559 | 62 509 |
*Restricted cash is reserved withholding tax related to employees
** Bank guarantee for Statkraft Albania project, expanded in 2023 following completion of three additional floaters, amounting to 100 thousand Euro.
Note 13 – Patents and trademarks
Ocean Sun AS has put considerable effort into patenting its key technology. The patent portfolio currently consist of more than 150 patent applications for four patent families with applications in 51 countries/patent organisations. The main patent has already been accepted in several key states including the US, United Kingdom, China, India, European Patent Organization (EPO) and Norway.
Ocean Sun has also filed for Design registration and Trademark Registration in selected countries.
Note 14 – Other current liabilities
| 31.12.23 | 31.12.22 | |
|---|---|---|
| Prepayments from customers | 1 262 | - |
| Prepayment BOOST Project | 989 | 4 638 |
| Holiday allowance | 1 108 | 828 |
| Employers contribution* | - | 399 |
| Employee bonuses | - | 171 |
| Other | 630 | 485 |
| Total Other payables | 3 989 | 6 522 |
Note 15 – Share capital and shareholders information
| Number of shares | |||
|---|---|---|---|
| Ocean Sun AS | |||
| Share capital | 44 986 200 | ||
| Ocean Sun AS stock of treasury shares pr. 31.12.2023 | 30 000 | ||
| Nominal value per share | 0,01 | ||
| Shareholders pr 31.12.2023 | Holdings | Ownership % | Voting rights % |
| Dr. Ing. Børge Bjørneklett AS | 9 242 500 | 21% | 21% |
| KVANTIA AS | 8 126 888 | 18% | 18% |
| PROGRESSI AS | 6 326 100 | 14% | 14% |
| UMOE AS | 4 000 000 | 9% | 9% |
| MP PENSJON PK | 2 017 966 | 4% | 4% |
| Citibank Europe plc | 2 000 000 | 4% | 4% |
| Sauar Invest AS | 1 263 281 | 3% | 3% |
| Morgan Stanley & Co. Int. Plc. | 1 035 120 | 2% | 2% |
| Opulens Invest AS | 1 000 000 | 2% | 2% |
| Bank Pictet & Cie (Europe) S.A. | 921 725 | 2% | 2% |
| Other | 9 052 620 | 20% | 20% |
| Total | 44 986 200 | 100% | 100% |
Note 16 – Equity
| Share | ||||||
|---|---|---|---|---|---|---|
| based | ||||||
| Share | Own | Share | payment | Uncovered | ||
| capital | shares | premium | reserves | losses | Total | |
| At 1 January 2023 | 450 | (0) | 62 474 | 74 | - | 62 999 |
| Profit/Loss for the period | - | - | (18 419) | - | - | (18 419) |
| Share option program | - | - | - | 614 | - | 614 |
| Cover uncovered losses | - | - | - | - | - | - |
| At 31 December 2023 | 450 | (0) | 44 055 | 689 | - | 45 193 |
Note 17 – Share based payments
Share-based compensation benefits are provided to employees through the Long-term incentive program approved by the extraordinary general meeting held on 11 October 2021.
Equity-settled, share-based payments are measured at fair value (excluding the effect of non-marketbased vesting conditions) at the grant date. The fair value is expensed over the vesting period as an employee benefit expense, with a corresponding increase in equity. The vesting period is the period over which all the specified vesting conditions are to be satisfied. At the end of each period, the Group revises its estimates of the number of options that are expected to vest, based on the nonmarket vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
The fair value at the grant date is determined using the Black-Scholes-Merton option pricing model, which takes into account the exercise price, the life of the option, the current price of the underlying shares, the expected volatility of the share price, any dividends expected on the shares and risk-free interest rate for the life of the option. The expected share price volatility is based on historical volatility for a selection of comparable listed companies. The risk-free interest rate is based on zerocoupon government bonds with a term equal to the expected term of the option being valued.
Social security contributions payable in connection with an option grant are considered an integral part of the grant itself. The charges are treated as cash settled, share-based payments and remeasured at each reporting date.
Total costs and Social Security Provisions
| 2023 | |
|---|---|
| Cost of share option program | 803 210 |
| Total Social security provisions 2023 | - |
| Granted instruments 2023 | |
| Instrument | Option |
| Quantity 31.12.2023 (instruments) | 763 334 |
| Quantity 31.12.2023 (potential shares) | 763 334 |
| Contractual life* | 5.00 |
| Strike price* | 6.83 |
| Share price* | 6.20 |
| Expected lifetime* | 3.60 |
| Volatility* | 51.16% |
| Interest rate* | 3.15% |
| Dividend* | - |
| FV per instrument* | 2.33 |
*Weighted average parameters at grant of instrument
Note 17 – Share based payments (continued)
Outstanding instruments Year End (Options)
Quantity and weighted average prices
| Number of instruments | Weighted Average Strike Price |
||
|---|---|---|---|
| 01.01.2023 - | 31.12.2023 | ||
| Outstanding OB (01.01.2023) | 246 714 | 11.56 | |
| Granted | 763 334 | 6.83 | |
| Exercised | - | - | |
| Released | - | - | |
| Adjusted | - | - | |
| Performance Adjusted | - | - | |
| Cancelled | - | - | |
| Terminated | - | - | |
| Expired | - | - | |
| Outstanding CB (31.12.2023) | 1 010 048 | 7.99 | |
| Vested CB | 18 083 | 15.20 |
Outstanding Instruments Overview
| Outstanding Instruments | Vested Instruments | ||||
|---|---|---|---|---|---|
| Strike price | Number of instruments |
Weighted Average remaining contractual life |
Weighted Average Strike Price |
Vested instruments 31.12.2023 |
Weighted Average Strike Price |
| 6.83 | 763 334 | 4.36 | 6.83 | - | - |
| 10.43 | 186 465 | 3.86 | 10.43 | - | - |
| 14.60 | 15 040 | 3.36 | 14.60 | - | - |
| 15.20 | 45 209 | 2.96 | 15.20 | 18 083 | 15.20 |
| Total | 1 010 048 | 18 083 |
Note 18 – Subsequent events
February 2024
Ocean Sun announces a transfer of leadership, where the Director for North-East Asia, Kristian Tørvold is appointed to the role of CEO of Ocean Sun, while the former CEO and founder, Børge Bjørneklett, leaves the company.
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