Otello Corporation ASA

Annual Report (ESEF) • Apr 30, 2025

OTELLOCORPORATION - 2024 391200EWTTF186UWWH072024-01-012024-12-31391200EWTTF186UWWH072023-01-012023-12-31391200EWTTF186UWWH072024-12-31391200EWTTF186UWWH072023-12-31391200EWTTF186UWWH072023-12-31391200EWTTF186UWWH072022-12-31391200EWTTF186UWWH072023-12-31ifrs-full:IssuedCapitalMember391200EWTTF186UWWH072023-12-31ifrs-full:SharePremiumMember391200EWTTF186UWWH072023-12-31ifrs-full:TreasurySharesMember391200EWTTF186UWWH072023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember391200EWTTF186UWWH072023-12-31ifrs-full:OtherEquityInterestMember391200EWTTF186UWWH072024-01-012024-12-31ifrs-full:OtherEquityInterestMember391200EWTTF186UWWH072024-01-012024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember391200EWTTF186UWWH072024-01-012024-12-31ifrs-full:IssuedCapitalMember391200EWTTF186UWWH072024-01-012024-12-31ifrs-full:SharePremiumMember391200EWTTF186UWWH072024-01-012024-12-31ifrs-full:TreasurySharesMember391200EWTTF186UWWH072024-12-31ifrs-full:IssuedCapitalMember391200EWTTF186UWWH072024-12-31ifrs-full:SharePremiumMember391200EWTTF186UWWH072024-12-31ifrs-full:TreasurySharesMember391200EWTTF186UWWH072024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember391200EWTTF186UWWH072024-12-31ifrs-full:OtherEquityInterestMember391200EWTTF186UWWH072022-12-31ifrs-full:IssuedCapitalMember391200EWTTF186UWWH072022-12-31ifrs-full:SharePremiumMember391200EWTTF186UWWH072022-12-31ifrs-full:TreasurySharesMember391200EWTTF186UWWH072022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember391200EWTTF186UWWH072022-12-31ifrs-full:OtherEquityInterestMember391200EWTTF186UWWH072022-12-31391200EWTTF186UWWH072023-01-012023-12-31ifrs-full:OtherEquityInterestMember391200EWTTF186UWWH072023-01-012023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember391200EWTTF186UWWH072023-01-012023-12-31ifrs-full:IssuedCapitalMember391200EWTTF186UWWH072023-01-012023-12-31ifrs-full:SharePremiumMember391200EWTTF186UWWH072023-01-012023-12-31ifrs-full:TreasurySharesMemberiso4217:USDiso4217:USDxbrli:shares 2024 Annual Report Otello Corporation ASA - Annual Report 2024 Table of contents 04 CEO Letter 06 Shareholder information 10 Representation of Board of Directors 12 Report from the Board of Directors 24 Otello Group financial statements 50 Parent company financial statements 66 Auditor’s report 72 Principles of corporate governance CEO Letter In 2024, Otello continued to return cash to its share- value for our shareholders. We saw the culmination of holders and is positioned to maximize the value of its this effort in 2021 where we were able to both IPO Be- remaining asset. mobi on the Bovespa in Brazil at a significant premium to our initial purchase price, as well as sign and close a transaction selling AdColony to Digital Turbine. FINANCIAL OVERVIEW In 2024, Otello continued reducing its expenses which, were down 14% vs 2023. An unfavorable movement in FUTURE the share price of Bemobi resulted in the recognition of Otello remains the biggest shareholder in Bemobi, is pos- an impairment loss of USD 19,356 thousand, and accord- itive about the prospects of the business and actively ingly an operating loss of USD 16,260 thousand (2023: supports Bemobi. Otello will have an opportunistic view profit of 7,563 thousand). on its financial investment in the company. Otello has, as a result of the transactions above and proceeds received, As of 31 December 2024, Otello had a cash position of USD already repaid all our debt, launched and completed 10,454 thousand, a reduction from 2023 (14,576 thousand), share buybacks accessible to all shareholders of over USD largely due to share buybacks of USD 3,066 thousand. 169 million since 2021 and paid in 2022 nearly USD 200 million in dividend to our shareholders. Going forward, the goal is to maximize the value of our remaining asset RETURNING CASH TO SHAREHOLDERS The Company’s main goal is to maximize the value of its and continue to aggressively return cash to sharehold- remaining asset, its stake in Bemobi, and return cash to ers, most likely through a combination of share buybacks its shareholders. During 2024, the Company continued to and dividends. buy back shares, and a total of USD 3,066 thousand in cash was returned to shareholders through the acquisi- tion of 4,313,200 shares. Otello’s strategic focus has been to build and grow com- panies with the ambition to create the highest possible Jason Hoida 4 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 5 Investor Relations 60.4% Norway-based accounts KPI [2020-2024] 2020 2021 2022 2023 2024 Revenue ($ million) 259.0 23.4 19.1 0.1 (6.3) 4.8 0.2 (3.4) (1.6) 0.0 (3.7) (3.3) 0.0 (3.4) (2.1) Adjusted EBITDA ($ million) Operating cash flow ($ million) Adjusted EBITDA represents EBITDA excluding stock-based compensation expenses, impairment and restructuring expenses 2023 Country breakdown shareholders: 2024 62.7 % 8.5 % 2.3 % 23.4 % 2.3 % Norway-based accounts U.K.-based accounts Luxembourg-based accounts Ireland-based accounts Sweden-based account 60.4 % 25.2 % 5.5 % LARGEST SHAREHOLDERS at December 31, 2024 Shares INVESTOR RELATIONS POLICY 5.3 % 2.2 % Communication with shareholders, investors, and ana- GOLDMAN SACHS INTERNATIONAL SAND GROVE OPPORTUNITIES AS OTELLO CORPORATION ASA VERDIPAPIRFONDET DNB TEKNOLOGI AREPO AS CITIBANK, N.A. J.P. MORGAN SE BANK PICTET & CIE (EUROPE) AG SKANDINAVISKA ENSKILDA BANKEN AB GRØNLAND 23.5 % 23.0 % 8.0 % 7.0 % 5.7 % 4.9 % 3.2 % 2.1 % lysts, both in Norway and abroad, is a high priority for Otello. The company’s objective is to ensure that the financial markets have sufficient information about the company in order to be able to make informed de- cisions about the company’s underlying value. 25.2% U.K.-based accounts 2.2% Sweden-based accounts 2.1 % 1.6 % 5.3% Ireland-based accounts 5.5% Luxembourg-based accounts 6 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 7 Executive Team Otello Corporation ASA Jason Hoida Chief Executive Officer Scott Kerrison Chief Financial Officer Jason Hoida is the Chief Executive Officer at Otello Cor- Scott Kerrison was appointed Chief Financial Officer in poration ASA, a position he has held since January 2024. January 2024. He is responsible for the overall financial Mr. Hoida has extensive experience in the software and management of the Group, including consolidated fi- tech industry and has held the position of General Coun- nancial reporting, tax compliance and investor relations. sel at Opera Software ASA from 2009-2016 and at Otello Scott joined the company in 2019 and previously held the Corporation from 2016. Prior to his joining Opera he was role of Head of Accounting. an associate at the law firm Wikborg Rein in the Tech- nology, Media and Telecom department. Before joining Otello, Scott had worked with several of Australia's leading commercial property groups (includ- Mr. Hoida holds a law degree from Hamline School of ing The GPT Group, DEXUS Property Group and Colonial Law in St. Paul Minneapolis and Bachelor's Degree from First State/Gandel Retail Management) in roles spanning Notre Dame University in South Bend, Indiana. accounting, financial management and tax. Scott began his professional career working in the business services division for the mid-tier accounting firm William Buck (now part of Grant Thornton), providing accounting and tax services to small- and medium-sized businesses. Since completing an honours degree in accounting and finance with Monash University, Scott has also obtained a Master of Business Administration from Melbourne Business School and a Master of Applied Finance from Kaplan University. Scott is a Chartered Accountant and a Chartered Management Accountant. 8 Otello Corporation ASA - Annual Report 2024 Otelllo Corrpporatiion ASSA - Annual RReporrtt 2024 9 Frank Blaker Chairman Silje Christine Augustson Board Member Shahzad Abid Board Member Frank Blaker (b 1957) is a former executive and invest- ment fund manager. His career includes senior manage- ment positions in Statoil AS/Equinor ASA, Technor ASA, Procom Venture AS, EQON AS and Aria Asset Management AS. Frank served as VP of Statoil´s gas technology proj- ects, senior VP of corporate HR and director of corporate e-Business. He joined Technor ASA as executive VP in 2001 and became partner and fund manager in Procom Venture AS in 2005. Known for his strengths in leadership, strat- egy and risk management, Frank has held several board positions in both public and private companies in Norway and internationally. He holds a master´s degree in Chem- ical Engineering from NTNU (Norway), and a master´s de- gree in Technology Management from MIT Sloan Business School (USA). Silje Christine Augustson (b. 1974) has 25 years of interna- Shahzad Abid has 29 years of experience from technology tional experience in investment banking, the alternative related businesses in Norway and globally. He started his investment industry, private investment firms, as well as career as a sales rep in a mobile networks tech company leadership roles in industry and entrepreneurship. August- in 1996, followed by 10 years in Nokia Networks whereof son has over 15 years of experience as a CEO, board mem- 6 years as VP for the Middle East & Africa region. From ber and chair of the board of publicly listed and private 2010 to 2021 he was the managing director for two Norwe- companies, including serving as Chair of the Board and gian SMB tech turnaround cases, and partner in a strategy later CEO of Noreco ASA (now BlueNord ASA), Panoro En- consulting firm. Since 2020 he is on the board of public ergy ASA, Chair of EMGS ASA, Deputy Chair of Bank2 ASA. broadcaster NRK, and in tech related SMBs. Shahzad has And currently Board Member of Horisont Energi AS and also been on the board of export credit agency GIEK, and Scana ASA. She holds a master's degree in management 10 years in the corporate assembly of Norsk Hydro. He has from ESCP in Paris and a bachelor's degree in economics a bachelor's degree in economics, a bachelor's degree in from UT1, University of Toulouse. psychology, and a Master of Science in strategy. Fun fact about Shahzad is that he has released 2 music albums un- der the name shahz.com. 10 Otelllo Corrpporatiion ASSA - Annual RReporrtt 2024 Otello Corporation ASA - Annual Report 2024 11 RBepoortafrormdthe of Directors Otello’s strategic focus is to build and grow companies Cash flow with the ambition to create the highest possible value Net cash flow from operating activities in 2024 totaled for our shareholders. After the IPO of Bemobi and the -$2,075 thousand (2023: -$3,310 thousand). Cash flow sale of AdColony in 2021, Otello's remaining main asset is from investing activities amounted to $2,826 thousand its 38.2% ownership in Bemobi Mobile Tech S.A (“Bemo- in 2024, vs $2,191 thousand in 2023, comprising a div- bi”), a public company listed on the Bovespa exchange idend received from Bemobi. Cash flow from financing in Brazil. activities was -$3,147 thousand in 2024, compared to -$2,716 thousand in 2023. Use of cash for financing ac- tivities in 2024 was mainly related to share buybacks of COMPANY OVERVIEW Otello Corporation ASA, the parent company of the Group, $3,066 thousand. is domiciled in Norway. The Company’s principal offices are located at c/o Advokatfirma Schjødt, Tordenskiolds As of December 31, 2024, the Group had a cash balance of gate 12, Oslo, Norway. The company is a public limited $10,454 thousand (2023: $14,576 thousand), and no inter- company that is listed on the Oslo Stock Exchange under est-bearing debt (2023: nil). the ticker OTEC. Balance sheet As of 31 December 2024, the Group had total assets of Corporate Costs Corporate costs comprise primarily i) costs related to $80,288 thousand (2023: $110,193 thousand). Non-cur- personnel working in functions that serve the Group as rent assets represented $69,698 thousand of this to- a whole, including CEO, Board of Directors, corporate fi- tal and primarily consisted of our 38.2% ownership in nance and accounting, legal, and IT, and ii) certain costs Bemobi of $68,970 thousand. Current assets such as related to restructuring processes. FINANCIAL SUMMARY Income statement cash and receivables represented $10,590 thousand of total assets, of which $10,454 thousand was cash and cash equivalents. The Group had total liabilities of $1,330 thousand as of Otello’s operating revenue was nil in 2024 (2023: nil). Op- 31.12.2024 (2023: $1,170 thousand), of which $391 thou- erating expenses, excluding impairment gains (losses), de- sand were current liabilities and $939 thousand were creased by 14% to $3,540 thousand (2023: $4,113 thousand). non-current liabilities. Non-current liabilities relate en- Otello delivered Adj EBITDA (excluding impairment gains / tirely to deferred salary and contractual entitlements (losses)) of -$3,431 thousand (2023: -$3,705 thousand). arising from a potential future sale or other disposal of A loss before income taxes (including impairment gains all or substantially all of the Group’s shares in Bemobi. / losses)) of $16,260 thousand was recognized in 2024 (2023: profit of $7,563 thousand). Taxes were nil in 2024 Shareholders’ equity was $78,957 thousand at the end (2023: nil). The result after tax for 2024 was -$16,260 of 2024, compared with $109,024 thousand at the end thousand (2023: $7,563 thousand). Basic and diluted of the previous year. Otello’s equity ratio at year-end earnings per share were both -$0.19 (2023: $0.08). was 98.3% (2023: 98.9%). 12 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 13 BUSINESS OVERVIEW the Group’s equity was $78,957 thousand (parent compa- Since 2021, Otello has not had any operating segments. ny: $25,809 thousand). The shares in Bemobi are held through Otello Technology Investment AS, a wholly owned subsidiary of Otello Cor- Share Buyback Program poration ASA. Otello holds the chairmanship of Bemobi During 2024, Otello purchased 4,313,200 (2023: 3,180,027) with Otello’s former CEO Lars Boilesen. CORPORATE OVERVIEW Organization treasury shares for $3,201 thousand (2023: $2,610 thou- sand) and sold 0 (2023: 0) treasury shares. Shareholders The Company had 2,489 (2023: 2,764) shareholders at year- At the close of 2024, the Otello group had 3.80 full-time end. At that time, 60.4% (2023: 62.7%) of the shares were employees and equivalents; a reduction from 4.40 as at held in Norway-based accounts, 25.2% (2023: 8.5%) in UK- the end of 2023. based accounts, 5.5% (2023: 2.3%) in Luxembourg-based accounts, 5.3% (2023: 23.4%) in Ireland-based accounts, 2.2% (2023: 2.3%) in Sweden-based accounts, and 1.4% Board of Directors composition At an Extraordinary General Meeting on January 6, 2025, (2023: 0.8%) in accounts based elsewhere. Frank Blaker, Shahzad Abid and Silje Augustson were elected to the Board of Directors. The Board of Directors Dividend subsequently elected Frank Blaker as the chairman. The Board of Directors recommends that no dividend be paid for the 2024 financial year. Corporate governance The Company’s guidelines for corporate governance Going concern are in accordance with the Norwegian Code of Prac- In accordance with section 3-3a of the Norwegian Ac- tice for Corporate Governance, dated October 14, 2021, counting Act, the Board confirms that the prerequisites as required by all listed companies on the Oslo Stock for the going concern assumption exist and that the fi- Exchange. Furthermore, the guidelines meet the dis- nancial statements have been prepared based on the go- closure requirements of the Norwegian Accounting Act ing concern principle. and the Securities Trading Act. The guidelines are includ- ed separately in the annual report. Please see the sec- Events after the reporting period tion entitled “Principles of corporate governance” for For further information on subsequent events, see note further information. 20 of the “Consolidated financial statements”. Shareholders and equity-related issues For further information, please see the announce- As of December 31, 2024, Otello Corporation ASA had ments published on the Oslo Stock Exchange website 91,099,729 outstanding shares. As of December 31, 2024, (www.oslobors.no). 14 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 15 CORPORATE SOCIAL RESPONSIBILITY ruption and bribery. Corruption distorts economic deci- Creating a responsible and sustainable business is an in- sion-making, deters investment, undermines compet- tegral part of everything we do at Otello. We are commit- itiveness and, ultimately, weakens economic growth. ted to the highest standard of social responsibility and There is no single, comprehensive, universally accepted believe that transparency and openness are key elements definition of corruption. Therefore, each Otello employee in obtaining a sustainable and responsible operation. Our must adhere to the existing laws and regulations. As a efforts and results related to corporate social responsibil- minimum, Otello’s internal regulations apply to all em- ity (CSR) are focused on the following areas: Our employ- ployees. Controls are made to ensure that the rules are ees, anti-corruption and the environment. followed. Otello has put in place internal guidelines to help employees in their day-to-day operations. The fol- lowing is an extract of these guidelines. Our employees Otello’s success and innovation springs from the minds and teamwork of its employees, and we are committed Bribery to interacting with our employees, following the highest No person acting on behalf of Otello shall attempt to ethical standards and respect for individuality. influence someone in the conduct of their post, office or commission by offering an improper advantage. Nor Otello strongly condemns discrimination. We believe shall improper advantage be offered to anyone for the that people should be treated with respect and insist on purpose of influencing third parties in the conduct of fair, non-discriminative treatment, regardless of irrele- their post, office, or commission. This includes all forms vant factors such as nationality, political views, religion, of facilitation payments. sexual orientation and gender. Correspondingly, no person acting on behalf of Otello We promote cultural diversity and we are proud to have shall request, accept or receive an improper advantage 4 nationalities represented within the Group. in connection with his/ her position or assignment or for the purpose of influencing a third party. Improper ad- We continually work to improve the gender balance in vantage can take different forms, including but not lim- the company. At the end of 2024, 17% of the Group’s staff ited to money, objects, credits, discounts, travel, accom- members were women. In addition, 1 of the 3 Board of modation and other services. Directors of the Group are female. Gifts The principles of equal opportunities and non-discrimi- It is a normal part of business life to exchange business nation are present throughout the organization and in all courtesies, such as meals, transportation, recreation, fa- company activities. cilities or small gifts. Such an exchange of business cour- tesies must always follow local laws and regulations and not put any Otello employee in the position of a sense of Labor rights at Otello Otello respects and observes the fundamental labor obligation to return the favor, compromise profession- rights set out in international conventions, such as the al judgment, or create the appearance of compromise conventions of the International Labor Organization and or corruption. the United Nations. No person acting on behalf of Otello is allowed to accept any amount of cash or cash equivalents (such as gift cer- Health and safety At Otello, we strive to offer our staff members a safe, tificates or market securities and similar), regardless of healthy and inspiring workplace. All employees are expect- the sum. Correspondingly, cash or cash equivalents may ed to comply with safety and health regulations that apply never be offered by Otello employees as a business cour- to our business activities. tesy, regardless of the sum. Discrimination on the bases of sickness or disability shall Whistleblowing not occur at Otello. Otello encourages freedom of speech and blowing the whistle on malpractice, fraud, illegality, or breaches of Otello had an estimated rate of absence due to sick leave rules, regulations, and procedures or raising health and of less than 1% in the parent company in 2024 (2023: 1.7%), safety issues. Any Otello staff member making a whis- and less than 1% for the Group as a whole (2023: 1.7%). tleblowing report is protected from any repercussions, such as dismissal and other forms of reprisal. To secure an effective procedure, staff members may blow the Anti-corruption Otello abstains from and works actively to combat cor- whistle either in person or anonymously. 16 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 17 To improve communication and ensure that issues do not risks are evaluated regularly and management deter- escalate to the point where they become a whistleblow- mines appropriate strategies related to how these risks ing case, Otello focuses on the following practices: are to be handled within the Group under the approved policies. The Group is exposed to market (currency) risk, • Communicate the Company’s norms, values, and rules credit risk, and liquidity risk to varying degrees. and regulations regarding ethical conduct. • Create an open atmosphere by making sure that staff Currency risk members have the opportunity and possibility to meet The majority of the financial risk that the Group is and discuss issues in formal and informal settings. exposed to relates to currency risk due to exchange • Discuss and put questions regarding freedom of speech rate fluctuations. and whistleblowing on the agenda in internal commu- nications. The majority of the Group's operating expenses are de- nominated in Norwegian kroner (NOK) or United States dollars (USD). The Group maintains cash deposits in both The Environment Otello understands the importance of supporting the currencies, as well as in Brazilian reais (BRL), and no cap- environment and seeks to prevent any negative envi- ital controls are limiting the Group's ability to exchange ronmental impact our activities might have. Otello has between these currencies, if required. incorporated its environmental policy as a part of the Ethical Code of Conduct. The Group's largest asset, its investment in the shares of Bemobi is denominated in Brazilian reais (BRL). Ac- Otello has implemented the following guidelines and cordingly, fluctuations in the exchange rate between the reporting schemes to ensure a high ethical standard BRL and the Group's reporting currency, USD, can impact throughout the organization. The Ethical Code of Con- both the reported profit or loss and the carrying value duct is created to help employees, clients and business of that investment. A small number of BRL-denominated partners understand Otello’s values and standards. Otel- expenses are also incurred by the Group in Brazil related lo’s reputation is created by the conduct of each indi- to this investment. vidual staff member. Therefore, all staff members are obliged to familiarize themselves with the Ethical Code During 2024 the Group did not use forward exchange of Conduct when joining the company. contracts to hedge its currency risk, and Otello had not entered into any foreign exchange contracts as of The Ethical Code of Conduct focuses on the following December 31, 2024. key areas: the rights and obligations of our employees; a cash and other investments placed in Norwegian finan- possible in the form of buybacks or dividends. Whilst cial institutions are not guaranteed by the government Otello is positive about the prospects and fundamentals above NOK 2 million per institution. If the financial insti- of the business in Bemobi, in particular due to the piv- tution were to go bankrupt, a portion of Otello’s cash or ot of the business model into payment solutions, Otello healthy and safe working environment; anti-corruption; Credit risk and the external environment. Credit risk is the risk of losses that the Group may suffer if a counterparty fails to perform its financial obligations. A violation of the Ethical Code of Conduct may result in The Group's exposure to credit risk is mainly related to disciplinary action, up to and including termination of account receivables, which are immaterial, and accord- employment. Several of the guidelines concern actions ingly credit risk is not considered significant. that are also punishable offenses. investment could be lost. has an opportunistic view on its financial investment in the company. Operational risk Otello has limited operational risk as we have no oper- As a result of the sale of AdColony to Digital Turbine in ations which are consolidated into our P&L. The opera- April 2021, Otello has Material Indemnification-Relat- tional risk is limited to corporate functions as well as the ed Post-Earnout Obligations related to the transaction. The Group has limited exposure in terms of credit risk related to loans and receivables. Transparency Act Otello has published a Transparency Act report on its website at https://www.otellocorp.com management of the ownership in Bemobi. None of the Indemnification Obligations of Otello has been recognized as liabilities in the financial statement. The Indemnification Obligations of Otello do not meet Liquidity risk As of December 31, the Group had bank deposits well in excess of the recognized liabilities. Accordingly, liquidity Directors and Officers Liability Insurance RISK FACTORS Otello Corporation ASA and its subsidiaries are covered the recognition criteria in IAS 37 as it is not probable by Directors and Officers liability insurance. The insur- that an outflow of economic benefits will happen at this ance indemnifies directors and officers for defense costs stage, and it has yet to be confirmed whether Otello has and potential legal liability arising out of claims made a present obligation that could lead to an outflow of against them while serving on a board of directors and economic benefits. or as an officer. The insurance renews annually and the sum insured was USD 50 million as of December 31, 2024. Otello is exposed to a range of risks that may affect risk is not considered significant. its business. Some key risk areas are discussed and de- scribed below. Cash and cash equivalents at the end of 2024 were $10,454 thousand. As of December 31, 2024, Otello has no outstanding loans payable. Financial risk Otello has very limited financial risk as we have no op- erations which are consolidated into our P&L, nor do we The Group’s equity was $78,957 thousand at the end of have any interest-bearing debt. 2024, corresponding to an equity ratio of 98.3%. OUTLOOK Otello’s focus going forward is to maximize sharehold- er value through i) actively managing our investment in Bemobi and ii) returning capital to shareholders when Risk management in the Group is carried out by manage- Although Otello does invest its money conservatively, all ment and approved by the Board of Directors. Potential our investments are subject to risk. For example, Otello’s 18 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 19 Report from the Board of Directors — Parent company information only Below, please find financial information and commen- The Company reported a loss before income taxes of tary on Otello Corporation ASA, the parent company $8,007 thousand (restated 2023: loss of $3,229 thou- (“Company”) of the Otello Group (“Group”). Please note sand). The current year's result was driven by net FX that the numbers and comments below are only applica- losses of $7,930 thousand, and interest expenses on in- ble to the Company and not for the Group. However, the tercompany loans from Otello Technology Investment information described above for the Group is also appli- AS of $5,325 thousand, partly offset by the receipt of cable for the Company. a group contribution of $8,421 thousand from Otello Technology Investment AS. FINANCIAL SUMMARY The Company’s main activities are to serve the Group as Net cash flow from operating activities in 2024 totaled a whole, through the following functions and services: -$2,439 thousand (2023: -$3,472 thousand). Cash reserves CEO, Board of Directors, corporate finance and account- were used to continuing buying back shares, with $3,066 ing, legal, HR and IT. The Company charges some of the thousand being used to buy back shares from investors costs related to these functions to subsidiaries. There during 2024 (2023: $2,610 thousand). The cash balance was limited operational activity in both 2024 and 2023. decreased by $5,586 thousand in 2024. As of December The Company had 3.80 full-time employees and equiva- 31, 2024, the Company had a cash balance of $3,499 thou- lents in 2024 (2023: 5.35). sand (2023: $9,852 thousand). Operating expenses decreased by 14% in 2024, result- The Company has $76,314 thousand in interest-bearing debt ing from the company’s continued focus on cost con- at year-end (all owed Otello Technology Investment AS) and trol and reduced headcount. The Company’s operating the Company’s equity ratio was 25% (restated 2023: 34%). loss of $3,501 thousand (2023: loss of $4,079 thousand) is in line with operating expenses due to there being It is the Board’s opinion that the annual accounts provide no revenues. a true and fair view of the Company’s activities in 2024. Oslo, April 24, 2025 Frank Blaker Chairman of the Board Shahzad Abid Silje Augustson Jason Hoida CEO 20 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 21 Statement by the Board of Directors and the Chief Executive Officer The Board of Directors and the Chief Executive Officer • The consolidated financial statements and the finan- (CEO) have reviewed and approved the Board of Di- rectors’ report and the financial statements for Otello Group and Otello Corporation ASA as of December 31, 2024, (Annual Report for 2024). cial statements for the parent company for 2024 have been prepared in accordance with applicable account- ing standards. • The consolidated financial statements and the finan- cial statements for the parent company give a true and fair view of the assets, liabilities, financial position and profits as a whole as of December 31, 2024, for the Group and the parent company. The consolidated financial statements and the financial statements for the parent company have been prepared in accordance with accordance with IFRS® Accounting Standards as adopted by the EU and accompanying in- terpretations. The consolidated financial statements and the financial statements for the parent company • The Board of Directors’ report for the group and the also include certain disclosures in order to comply with certain regulations and paragraphs in the Norwegian Ac- counting Act and the Securities Trading Act. parent company includes a true and fair review of: • The development and performance of the business and the position of the Group and the parent company • The principal risks and uncertainties the Group and the parent company face To the best of our knowledge: Oslo, April 24, 2025 Frank Blaker Chairman of the Board Shahzad Abid Silje Augustson Jason Hoida CEO 22 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 23 CONSOLIDATED STATEMENT Consolidated statement of Comprehensive Income USD thousands, except per share amounts Note 2024 2023 Continuing operations Revenue - - Total operating revenue 0 0 Employee benefits expense Depreciation and amortization expenses Other operating expenses 3 4 5 (2,273) (109) (1,157) (2,147) (408) (1,559) Total operating expenses (3,540) (3,540) (4,113) (4,113) 5,246 1,134 Operating profit (loss), excluding impairment gains (losses) Impairment gains (losses) 6 (19,356) (22,896) Operating profit (loss) Consolidated Group Share of profit (loss) from associated companies Other net financial items 7 7 6,059 577 4,829 1,600 Financial Statements 2024 Profit (loss) before income tax Tax expense (16,260) 0 7,563 0 Otello Corporation ASA 8 Profit (loss) (16,260) 7,563 Other comprehensive income: Items that may or will be transferred to profit (loss) Foreign currency translation differences (10,245) 1,503 Items that will not be transferred to profit (loss) Foreign currency translation differences (360) (4,818) 4,247 Total comprehensive income (loss) (26,866) Profit (loss) attributable to: Owners of Otello Corporation ASA (16,260) (26,866) 7,563 4,247 Total comprehensive income (loss) attributable to: Owners of Otello Corporation ASA Earnings (loss) per share: Basic earnings per share (USD) Diluted earnings per share (USD) 9 9 (0.19) (0.19) 0.08 0.08 24 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 25 CONSOLIDATED STATEMENT Consolidated statement of Consolidated statement of Financial Position Financial Position USD thousands Note 12/31/2024 12/31/2023 USD thousands Note 12/31/2024 12/31/2023 Assets Shareholders’ equity and liabilities Equity attributable to owners of the company 78,957 109,024 Right of use assets Investments 10 11 - 109 95,215 69,698 Total equity 78,957 109,024 Total non-current assets 69,698 95,325 Liabilities Other non-current liabilities 12 939 - Accounts receivable Other receivables Cash and cash equivalents - 136 10,454 21 272 14,576 Total non-current liabilities 939 0 Lease liabilities Accounts payable Other current liabilities 10 12 - 78 313 84 13 1,073 Total current assets Total assets 10,590 80,288 14,869 110,193 Total current liabilities Total liabilities 391 1,330 1,170 1,170 Total equity and liabilities 80,288 110,193 Oslo, April 24, 2025 Frank Blaker Chairman of the Board Shahzad Abid Silje Augustson Jason Hoida CEO 26 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 27 CONSOLIDATED STATEMENT Consolidated statement of Cash Flows USD thousands Note 2024 2023 Cash flow from operating activities Profit (loss) before income tax (16,260) 7,563 Depreciation and amortization expense Impairment (gains) losses recognized in profit (loss) Changes in accounts receivable 4 6 109 19,356 21 408 (5,246) 31 Changes in accounts payable Changes in accruals 64 224 (145) 230 Other adjustments for non-cash items Other financial adjustments Share of net income (loss) from associated companies Interest income received 90 (444) (1,662) (4,829) 785 (458) (6,059) 838 7 Net cash flow from operating activities (2,075) (3,310) Cash flow from investing activities Cash flows from losing control of subsidiaries Dividends received Other cash payments to acquire equity or debt instruments of other entities - 2,826 - 740 1,480 (29) 11 11 Net cash flow from investing activities 2,826 2,191 Cash flow from financing activities Payments to acquire entity’s shares Payment of finance lease liabilities, net 19 10 (3,066) (81) (2,610) (106) Net cash flow from financing activities Net change in cash and cash equivalents (3,147) (2,716) (3,836) (2,395) Cash and cash equivalents (beginning of period) Effects of exchange rate changes on cash and cash equivalents FX differences related to changes in balance sheet items 14,576 (1,510) (216) 18,373 (675) 713 Cash and cash equivalents 1) 10,454 14,576 1) Of which $78 thousand (2023: $94 thousand) is restricted cash as of December 31, 2024. 28 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 29 CONSOLIDATED STATEMENT Consolidated statement of Consolidated statement of Changes in Equity Changes in Equity Number Number of shares outstand- ing (thou- sands) of shares outstand- ing (thou- sands) Trans- lation reserve Trans- lation reserve Issued Share Treasury Other equity Total equity Issued Share Treasury Other equity Total equity USD thousands (except number of shares) capital premium shares USD thousands (except number of shares) capital premium shares Balance as of 12/31/2023 87,920 209 114,750 (2,610) 1,035 (4,360) 109,024 Balance as of 12/31/2022 91,100 209 114,750 0 (468) (7,105) 107,386 Comprehensive income for the period Comprehensive income for the period Profit (loss) (16,260) (16,260) Profit (loss) 7,563 7,563 Other comprehensive income Other comprehensive income Foreign currency translation differences (10,245) (360) (10,605) (26,866) (3,201) Foreign currency translation differences 1,503 (4,818) (3,316) 4,247 Total comprehensive income for the period Treasury shares purchased - - - (3,201) (5,811) 10,245 (16,621) Total comprehensive income for the period Treasury shares purchased - - - (2,610) (2,610) 1,503 2,745 (4,313) (3,180) (2,610) 109,024 Balance as of 12/31/2024 83,607 209 114,750 (9,210) (20,981) 78,957 Balance as of 12/31/2023 87,920 209 114,750 1,035 (4,360) Treasury shares and ordinary share During 2024, Otello purchased 4,313,200 treasury shares for $3,201 thousand, and sold 0 treasury shares for $0 thousand. During 2024, Otello issued 0 ordinary shares related to the incentive program, 0 ordinary shares related to business combinations, and 0 ordinary shares related to an equity increase. As of December 31, 2024, Otello owned 7,493,227 treasury shares. Face value of the shares The face value of the shares is NOK 0.02. Reserve for treasury shares The reserve for the Company’s own shares comprises the face value cost and excess value of own shares held by the Company. Translation reserve The translation reserve consists of all foreign currency differences arising from the translation of the financial statements of group companies with a functional currency that is not USD, except for those differences related to the parent company, which are booked directly to other equity. Other equity Other equity consists of all other transactions, including but not limited to, total recognized income and expense for the current period. 30 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 31 CONSOLIDATED STATEMENT Note 1 General information The Group’s principal activities now involve its investment in the shares of Bemobi Mobile Tech S.A. Following the successful IPO of Bemobi on Bovespa in Brazil, the Group retained a non-controlling ownership, which currently comprises 38.2% of the outstanding shares in Bemobi. The Group also retains rights to its Rocket Optimizer™ technology and owns some minor investments in other companies. Critical accounting estimtes and significant judgments The preparation of consolidated financial statements in accordance with IFRS® Accounting Standards as adopted by the EU requires manage- ment to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, disclosures of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected within the next financial year. Management does not consider there to be any critical accounting estimates or significant judgments in these consolidated financial statements. Otello Corporation ASA (the “Company”) is a public limited company domiciled in Norway. The Company’s principal offices are located at c/o Advokatfirma Schjødt, Tordenskiolds gate 12, Oslo, Norway. The Company is listed on the Oslo Stock Exchange under the ticker OTELLO. The consolidated financial statements of the Group for the year ended December 31, 2024, comprise the Company and its subsidiaries. These consolidated financial statements have been approved and issued by the Board of Directors on April 24, 2025 for approval by the Annual General Meeting on May 26, 2025. and the New standards and intepretations not yet adopted Certain amendments to accounting standards have been published that are not mandatory for 31 December 2024 reporting periods and have not been early adopted by the Group. These amendments are not expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions. Note 2 Summary of material accounting policies Statement of compliance and basis of the consolidated financial statements The consolidated financial statements have been prepared in accordance with IFRS® Accounting Standards as adopted by the EU and accom- panying interpretations. The consolidated financial statements also include certain disclosures in order to comply with certain regulations and paragraphs in the Norwegian Accounting Act and the Securities Trading Act. Note 3 Employee benefits expense Basis of preparation The consolidated financial statements are presented in US dollars (USD), rounded to the nearest thousand, unless otherwise stated. As a result of rounding differences, amounts and percentages may not add up to the total. Transactions are converted from the functional currencies of the companies within the Group using a monthly exchange rate to US dollars. The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements. The accounting policies have been applied consistently by Group entities. Payroll expenses [USD thousands] 2024 2023 Salaries and bonuses (1,894) (1,615) Social security cost (266) (266) Pension cost (110) (115) Insurance and other employee benefits (3) (26) Payments to long-term contractual staff - (125) Total (2,273) (2,147) Average number of full time equivalents 3.80 5.35 Consolidation principles Investments in associates – associates: Associates are entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influ- ence is presumed to exist when the Group holds between 20 and 50 percent of the voting power of another entity. The Group’s investment in Bemobi Mobile Tech S.A. (Bemobi) is assessed as being an investment in an associate, with a holding as of December 31, 2024 of 38.2 percent, and is accordingly accounted for using the equity method. Impairment The carrying amounts of the Group’s assets are reviewed at least annually to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. The Group’s main asset where this has a material impact is the investment in Bemobi, where the carrying amount is assessed for each half-year and full-year reporting period. Given the materiality of the investment in Bemobi to the Group’s accounts, and the potential impact of both the share price of Bemobi and foreign exchange rates, the carrying value of the investment is both assessed and adjusted in each half-year and full-year reporting period. The recoverable amount for the investment in Bemobi is assessed as being the market value of the investment, where the market value is calculated by reference to the prevailing share price of Bemobi as of each half-year and full-year reporting date less an estimate for potential disposal costs. An impairment loss is recognized if carrying amount of the investment exceeds its recoverable amount. Impairment losses are recognized in the statement of comprehensive income. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assets carrying amount do not exceed the carrying amount that would have been determined, net of de- preciation or amortization, if no impairment loss had been recognized. An impairment is further only reversed to the extent that the recoverable amount of the investment has increased since the previous reporting date. Please see note 11 for further information. The Norwegian companies in the Group are obliged to follow the Mandatory Occupational Pensions Act and these companies' pension schemes follow the requirements as set in the Act. Compensation to the CEO and Chairman of the Board The CEO has waived his rights under Section 15-16 of the Norwegian Working Environment Act of 2005 relating to employees' protection, termi- nation of employment contracts, etc. As compensation, the CEO is entitled to receive a termination amount of twelve months’ base salary if the employment contract is terminated by the Company. As of December 31, 2024, there was no existing severance agreement between Otello and the Chairman of the Board. The Group has not given any loans or security deposits to the CEO, the Chairman of the Board or their related parties. Refer to the remuneration report for further information, available on Otello's website: https://otellocorp.com/ Operating and segment information Throughout the year ended December 31, 2024, the Group has been comprised of a single Corporate segment. 32 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 33 CONSOLIDATED STATEMENT Other compensation presented above includes an accrual for the first year of severance payment that was agreed between the board and the outgoing CEO as part of his transition into an advisor role. Other compensation also includes a severance payment to the outgoing CFO equal to nine months salary. The CEO, Jason Hoida received no remuneration during the year in his capacity as CEO. Compensation to executive management in 2024 Benefit Pension exercised Remu- Other com- comp- options/ Total com- [USD thousands] neration Salary Bonus pensation ensation RSUs pensation Executive Manangement Jason Hoida, CEO from 31 December 2023 - 257.82 - 574.00 36.32 - 868.14 Scott Kerrison, CFO from 1 January 2024 - 56.68 23.27 0.96 3.75 - 84.65 Lars Boilesen, Board and CEO Advisor from 31 December 2023 - 213.92 - 621.05 54.41 - 889.39 The Board of Directors Andre Christensen, Chairman 65.85 - - - - - 65.85 Magdalena Kadziolka, Board Member to 2 May 2024 - - - - - - - Karin Fløistad, Board Member 28.39 - - - - - 28.39 Song Lin, Board Member 27.23 - - - - - 27.23 The Nomination Committee Simon Davies, Chairman - - - - - - - Jakob Iqbal, Member 2.79 - - - - - 2.79 Kari Stautland, Member 2.79 - - - - - 2.79 Total 127.06 528.42 23.27 1,196.02 94.47 - 1,969.24 Shares owned by members of the Board and the Chief Executive Officer as of December 31, 2024 [In thousands of shares] Name Commission Shares Total Andre Christensen Chairman 42 42 Karin Fløistad Board Member - - Magdalena Kadziolka Board Member - - Song Lin Board Member 0 0 Jason Hoida CEO from 31 December 2023 12 12 54 54 Shares owned by other members of Executive Management as of December 31, 2024 [In thousands of shares, options and RSUs] Members of Executive Management are included in the Company's employee pension scheme, which is a defined contribution plan. There has been no compensation or other economic benefit provided in 2024 or 2023 to any member of the Executive Team or Board of Direc- tors from the Company or any business controlled by the Company, except that mentioned above. In 2024 and 2023, there has been no signifi- cant additional compensation given to directors with regard to special services performed outside of their normal function. In 2024, there were amounts accrued for both the CEO and the Board and CEO Advisor related to deferred salary and contractual entitlements arising from a potential future sale or other disposal of all or substantially all of the Company's shares in Bemobi. Deferred salary entitlements will continue to accrue until such a potential future sale or other disposal is completed. These accruals are reflected as part of Other compensa- tion above. These amounts have not been paid and may never be paid if the required conditions in the future do not materialize. Refer to the remuneration report for further information, available on Otello's website: https://otellocorp.com/ Title Shares Total Scott Kerrison CFO from 1 January 2024 1 1 Lars Boilesen Board and CEO Advisor from 31 December 2023 261 261 262 262 Shares owned by members of the Board and the Chief Executive Officer as of December 31, 2023 [In thousands of shares] Name Commission Shares Total Andre Christensen Chairman 42 42 Karin Fløistad Board Member - - Magdalena Kadziolka Board Member - - Song Lin Board Member 0 0 Lars Boilesen CEO to 31 December 2023 261 261 Jason Hoida CEO from 31 December 2023 12 12 315 315 Compensation to executive management in 2023 Benefit Pension exercised Remu- Other com- comp- options/ Total com- [USD thousands] neration Salary Bonus pensation ensation RSUs pensation Executive Manangement Lars Boilesen, CEO to 31 December 2023 - 462.74 - 434.09 68.56 - 965.38 Petter Lade, CFO to 31 December 2023 - 162.91 - 136.25 15.85 - 315.01 The Board of Directors Andre Christensen, Chairman 64.15 - - - - - 64.15 Magdalena Kadziolka, Board Member - - - - - - - Karin Fløistad, Board Member 28.88 - - - - - 28.88 Maria Borge Andreassen, Board Member to 1 May 2023 13.41 - - - - - 13.41 Song Lin, Board Member 26.04 - - - - - 26.04 The Nomination Committee Simon Davies, Chairman - - - - - - - Jakob Iqbal, Member 2.84 - - - - - 2.84 Kari Stautland, Member 2.84 - - - - - 2.84 Total 138.16 625.65 - 570.34 84.41 - 1,418.55 Shares owned by other members of Executive Management as of December 31, 2023 [In thousands of shares] Title Shares Total Petter Lade CFO 67 67 67 67 34 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 35 CONSOLIDATED STATEMENT Note 4 Depreciation and amortization expenses Note 6 Impairment gains (losses) and restructuring expenses Depreciation and amortization expenses [USD thousands] Note 2024 2023 Property, plant and equipment - (293) Right of use assets 10 (109) (115) Total (109) (408) Following the successful IPO of the Bemobi business on Bovespa in Brazil in 2021, the Group is now a major shareholder in Bemobi Mobile Tech S.A with an ownership of 38.2%. The investment in investment has been reassessed based on the share price of that business as of December 31, 2024. The reported value of the investment as of 12/31/2024 in the accounts (the recoverable value) is equal to the fair value of the investment less an estimate for potential disposal costs. With a price per share of 13.58 Brazilian real as of that date, a impairment loss of USD 19,356 thousand has been recognized. See Note 11 for further information regarding the Bemobi Mobile Tech S.A investment. Bemobi Mobile Tech S.A is recognized using the equity method, and the fair value of the Impairment gains (losses) and restructuring expenses [USD thousands] Note 2024 2023 Bemobi Mobile Tech S.A shares 11 (19,356) 5,246 Total (19,356) 5,246 Note 5 Other operating expenses Other operating expenses [USD thousands] 2024 2023 Audit, legal and other advisory services (485) (531) Insurance (209) (276) Hardware and software (205) (249) Rent and other office expenses (95) (82) Other expenses (164) (421) Total (1,157) (1,559) Other than the impairment testing described above, there is otherwise no indication of impairment of other assets that would require further impairment testing as of December 31, 2024 under IAS 36. Note 7 Net financial items Auditor remuneration The following table shows audit fees for the current and prior year. For all categories the reported fee is the recognized expense in other operat- ing expenses for the year to the external auditor, PwC. Audit fees [USD thousands] 2024 2023 Statutory audit (163) (151) Tax advisory services 0 (12) Other services (16) (11) Total (180) (173) [USD thousands] Note 2024 2023 Share of profit (loss) from associated companies 11 6,059 4,829 Other net financial items Interest income 838 785 Interest expenses (1) (4) Net FX gains (losses) (178) 137 Investment management expenses (81) (80) Gain (loss) sale of shares - 740 Dividends received - 22 Total other net financial items 577 1,600 Total net financial items 6,636 6,430 36 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 37 CONSOLIDATED STATEMENT Note 8 Taxes Note 10 Right-of-use assets and lease liabilities The lease liability and right of use asset relates to the Group's office in Oslo, Norway. The lease expired November 30, 2024. No new lease has been entered since this expiry. Lease liabilities (USD thousands) 2024 2023 Balance as of 1/1 84 190 Additions - 5 Translation differences (4) (9) Lease payments (81) (106) Interest expense on lease liabilities 1 4 Lease liabilities as of 12/31 - 84 Of which: Current lease liabilities (less than 1 year) - 84 Balance as of 12/31 - 84 [USD thousands] 2024 2023 Income tax expense recognized in the statement of comprehensive income: Current tax 0 0 Income tax expense 0 0 The Group’s gross tax loss carryforwards expire as follows: [USD thousands] Norway Total No expiration deadline 8,386 8,386 Total 8,836 8,386 Right of use assets (USD thousands) 2024 2023 Balance as of 1/1 109 219 Additions - 5 Depreciation (109) (115) Right of use assets as of 12/31 - 109 Depreciation for the year (109) (115) Depreciation is charged to the statement of comprehensive income on a straight-line basis over the estimated useful life of each leased asset. The estimated useful life is considered to be the term of the contract for each leased asset. Reconciliation of effective tax rate [USD thousands] 2024 2023 Profit (loss) before tax (16,260) 7,563 Income tax using the corporate income tax rate in Norway (22% in 2024 / 22% in 2023) (3,577) 1,664 Effect of tax rates outside Norway different from 22% / 22% - 1 Effect of non-taxable and non-deductible items 3,688 (3,946) Effect of non-recognition of certain deferred tax assets (111) 2,282 Other effects - (1) Total tax expense for the year 0 0 Effective tax rate 0.0% 0.0% IFRS 16 effects on the consolidated statement of comprehensive income for the year (USD thousands) 2024 2023 Operating lease expenses recognized under operating expenses decreased (81) (106) Depreciation expense increased as a result of depreciation of ROU assets 109 115 Net interest expense increased as a result of recognition of the lease liability 1 4 Translation differences (4) (9) Net effect 26 3 The effective tax rate in 2024 of 0.0% differs from the statutory rate of 22.0% due to the following key items: • The impairment of the investment in Bemobi shares and the contribution of the share of profit (loss) from associated companies are con- sidered as permanent differences and are non-taxable for income tax purposes in Norway. Future lease payments The future minimum lease payments under non-cancellable lease contracts are as follows: Payments for leased premises 2024 2023 Less than one year - 113 Between one to five years - - More than five years - Total - 113 Note 9 Earnings per share Earnings per share 2024 2023 Earnings (loss) per share: Basic earnings (loss) per share (USD) (0.19) 0.08 Diluted earnings (loss) per share (USD) (0.19) 0.08 Shares used in earnings per share calculation 86,575,218 89,875,826 Shares used in earnings per share calculation, fully diluted 86,575,218 89,875,826 Earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted ordinary shares on issue during the period. 38 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 39 CONSOLIDATED STATEMENT Note 11 Investments A reconciliation of the cumulative reported balance of the investment in Bemobi Mobile Tech S.A is as follows. [USD thousands] 2024 2023 Balance as of 1/1 Initial recognition under the equity method 133,198 133,198 Share of the profit (loss) 22,787 16,593 Amortization of excess values (6,643) (4,996) Dividends received (5,266) (2,758) Translation difference (33,384) (21,847) Impairment (41,723) (25,762) Balance as of 12/31 68,970 94,402 The table below gives a breakdown of the total amount of other investments recognized. [USD thousands] 2024 2023 Investment in Bemobi Mobile Tech S.A (associate) 68,970 94,402 Investments in other shares 729 813 Total 69,698 95,215 Investment in Bemobi Mobile Tech S.A Following the successful IPO of Bemobi on Bovespa in Brazil, the Group became a major shareholder in Bemobi Mobile Tech S.A with an own- ership of 36.0%. During 2023 and 2024, Bemobi Mobile Tech S.A cancelled the shares that it had bought back from shareholders, leading to the Group having an ownership and voting rights of 38.2% as of December 31, 2024. Key financial information regarding Bemobi Mobile Tech S.A [BRL million] 2024 2023 Revenue 1,498.1 1,307.8 EBIT 127.6 94.8 Net profit (loss) 120.2 86.9 Assets 1,627.2 1,443.4 Non-current liabilities 51.4 42.4 Current liabilities 405.8 314.6 Equity 1,170.0 1,086.3 Otello’s share of equity in BRL 447.2 408.5 Otello’s share of equity in USD 72.3 84.2 The fair value of the investment in Bemobi Mobile Tech S.A has been assessed based on the closing share price of that business as reported by Bovespa in Brazil at the end of each reporting period. The fair value is considered a Level 1 valuation. Fair value as of 12/31 71,843 94,402 The reported value of the investment as of 12/31/2024 in the accounts (the recoverable value) is equal to the fair value of the investment less an estimate for potential disposal costs. Share of profit (loss) from associated companies 2024 2023 Share of the profit (loss) 8,319 6,483 Amortization of excess values (2,260) (1,654) Share of profit (loss) from associated companies 6,059 4,829 The investment in Bemobi Mobile Tech S.A is recognized using the equity method. [USD thousands] 2024 2023 Balance as of 1/1 94,402 88,590 Initial recognition under the equity method Movements reflected through the statement of comprehensive income Share of the profit (loss) 7,913 6,660 Amortization of excess values (2,165) (1,730) Impairment (18,630 5,306 Other movements Dividends received (2,727) (1,571) Translation difference (9,824) (2,852) Balance as of 12/31 68,970 94,402 The values reported for the Share of profit (loss) and Amortization of excess values differ between the tables in this note due to the different exchange rate that is used for transalation of items in the Statement of financial position (a period-end rate) compared to that which is used for translation of items in the Statement of comprehensive income (an average rate). Investments in other shares Otello owns 1.42% of the shares in Alliance Venture Spring AS and approximately 0.05% of the shares in Life360, Inc, which merged with Zen Labs, Inc during 2019. Otello owned shares in Zen Labs Inc prior to this merger. The recognized value of the investments in other shares is $729 thousand. Management has not determined the fair value of these investments, as they are not material for the Group. Alliance Venture Spring is a Norwegian venture capital firm investing in early stage technology companies. Life360 provides location-based services, sharing and noti- fications application to consumers globally, including integrated driving safety features and tools like Crash Detection and Roadside Assistance. Investments in other shares are recognized at cost. 40 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 41 CONSOLIDATED STATEMENT Note 12 Other liabilities Note 14 Alternative performance measures Alternative performance measures Otello discloses alternative performance measures as part of its financial reporting as a supplement to the financial statements prepared in accordance with IFRS. Otello believes that the alternative performance measures provide useful supplemental information to management, investors, financial analysts and other stakeholders, and are meant to provide an enhanced insight into the financial development of Otello’s business operations and to improve comparability between periods. EBITDA and EBIT terms are presented as they are commonly used by investors and financial analysts. Certain items are excluded in the alternative performance measures Adjusted EBITDA and Normalized EBIT to provide enhanced insight into the underlying financial performance of the business operations and to improve comparability between different periods. Alternative performance measures: Gross profit: This comprises revenues minus publisher and revenue share cost. Other non-current liabilities [USD thousands] Note 2024 2023 Accrued bonuses, commission and other employee benefits 939 - Total 939 0 Other current liabilities [USD thousands] Note 2024 2023 Accrued bonuses, commission and other employee benefits 68 642 Accrued operating expenses 140 303 Public duties payable 106 108 Other current liabilities - 20 Total 313 1,073 EBITDA: This is short for Earnings before financial items, taxes, depreciation and amortization. EBITDA corresponds to Operating profit (loss), (EBIT) in the Consolidated statement of comprehensive income excluding depreciation and amortization expenses. Adjusted EBITDA: This represents EBITDA excluding stock-based compensation, impairment and restructuring expenses. Adjusted EBITDA corresponds, therefore, to Operating profit (loss), (EBIT) in the Consolidated statement of comprehensive income excluding depreciation and amortization, stock-based compensation, and impairment and restructuring expenses. Note 13 Contingent liabilities EBIT: This is short for Earnings before financial items. This is presented both including and excluding impairment and restructuring expenses in the Consolidated statement of comprehensive income. In the KPIs section of this report and the reconciliation below, EBIT represents earnings before financial items including impairment and restructuring expenses, and corresponds to Operating profit (loss), (EBIT) in the Consolidated statement of comprehensive income. See below for reconciliations from Operating profit to EBITDA and Adjusted EBITDA for all periods presented. The table below presents a reconciliation of profit (loss) to Adjusted EBITDA. GDPR complaint filed with the Norwegian Data Protection Authority (DPA) As reported in the media, on January 14, 2020, the Norwegian Consumer Council (NCC) filed a complaint to the Norwegian Data Protection Authority (DPA) against Grindr and five other companies, including AdColony, who is a supplier to Grindr. As of the date of this report, AdColony has not received any formal notification or complaint from the DPA. The Company has not recognized any contingent liabilities in the financial statements related to this matter. Reconciliation of gross profit [USD thousands] 2024 2023 Total operating revenue 0 0 Publisher and revenue share cost 0 0 Gross profit 0 0 Reconciliation of operating profit (loss) to EBITDA and adjusted EBITDA [USD thousands] 2024 2023 Operating profit (loss), (EBIT) (22,896) 1,134 Depreciation and amortization expenses 109 408 Impairment gains (losses) 19,356 (5,246) EBITDA (3,431) (3,705) Restructuring expenses 0 0 Stock-based compensation expenses 0 0 Adjusted EBITDA (3,431) (3,705) Material Indemnification-Related Post-Earnout Obligations from the Sale of AdColony Below is a summary of material indemnification-related obligations of Otello Corporation ASA (“Otello”) under that certain Share Purchase Agreement, dated February 26, 2021 (the “SPA”), between Otello, Digital Turbine, Inc., Digital Turbine Media, Inc. (“DT”) and AdColony Holding AS (“AdColony”), following the settlement of DT’s earnout obligations under the SPA. The summary below does not purport to be a com- plete and accurate summary of Otello’s obligations under the SPA. For a complete understanding of all of Otello’s obligations under the SPA, reference should be made to the full text of the SPA, which can be found at: https://ir.digitalturbine.com/sec-filings/all-sec-filings/con- tent/0001104659-21-060531/0001104659-21-060531.pdf None of the Indemnification Obligations of Otello has been recognized as liabilities in the financial statements. The Indemnification Obligations of Otello do not meet the recognition criteria in IAS 37 as it is not probable that an outflow of economic benefits will happen at this stage, and it has yet to be confirmed whether Otello has a present obligation that could lead to an outflow of economic benefits. Indemnification Obligations of Otello Otello is obligated to indemnify (subject to certain limitations) DT and its affiliates for losses related to the following matters: (i) breaches or inaccuracies of certain representations and warranties; (ii) breaches of certain covenants by Otello and AdColony; (iii) pre-closing and certain other taxes; (iv) the operations and subsequent sale of Skyfire Labs, Inc.; and (v) certain specified matters, consisting of (A) an action for a claim under the Children’s Online Privacy Protection Act; (B) fines levied by the Norwegian Data Protection Authority pursuant to certain data privacy matters; (C) fines arising from a civil investigation by the Federal Trade Commission in connection with certain data privacy matters; (D) a claim for breaches of certain non-solicitation obligations of AdColony and its subsidiaries; and (E) a harassment claim against a former executive of AdColony. 42 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 43 CONSOLIDATED STATEMENT The aggregate net foreign exchange gains/losses recognised in profit or loss were: Net foreign exchange gain/(loss) included in other gains/(losses) [USD thousands] 2024 2023 Other net financial items (178) 137 Note 15 Assets Non-current assets by location [USD thousands] 2024 2023 Non-current assets located in Brazil 68,970 94,402 Non-current assets located in Norway 498 665 Non-current assets located in United States 230 257 Total 69,698 95,325 Cash flow and interest rate risk Sensitivity Higher (lower) interest rates will have the effect of increasing the interest income on the Group's bank accounts, and accordingly increasing (decreasing) profit (loss). Price risk The Group's exposure to equity securities price risk arises from investments held by the Group and classified in the statement of financial posi- tion as at fair value through profit and loss (FVTPL). The Group's sole FVTPL investment, Bemobi, is listed on Bovespa in Brazil. Sensitivity The table below summarises the increase / (decrease) on the Company's post-tax profit for the period had the Bemobi share price been higher / (lower) than what it actually was, with all other variables held constant. For investments in shares in equity-accounted associates and unrelated parties, the location is based on where those companies are based, without any tracing of the underlying location of their assets. The vast majority of the value of non-current assets is related to the investment in Bemobi Mobile Tech S.A. See Note 11 for further information. [USD] 2024 2023 Share price +10% 6,992 9,127 Share price +5% 3,496 4,563 Share price -5% (3,496) (4,563) Share price -10% (6,992) (9,127) Note 16 Financial risk and financial instruments Foreign exchange contracts During 2024 and 2023, the Group did not use forward exchange contracts to hedge its currency risk, and Otello had not entered into any foreign exchange contracts as of December 31, 2024. Capital management The Company's policy has been to maintain a high equity-to-asset ratio and to maintain a solid capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements. Credit risk Credit risk is the risk of losses that the Group would suffer if a counterparty fails to perform its financial obligations. The Group's exposure to credit risk is mainly related to external receivables, which are immaterial, and accordingly credit risk is not considered significant. Financial risk Risk management in the Group is carried out by management and approved by the Board of Directors. Potential risks are evaluated on a regular basis and management determines appropriate strategies related to how these risks are to be handled within the Group under the approved policies. The Group is exposed to market (currency) risk, credit risk and liquidity risk to varying degrees. Loans and receivables The Group has limited exposure in terms of credit risk related to loans and receivables. Liquidity risk As of December 31, 2024, the Group had bank deposits well in excess of the recognized liabilities. Accordingly, liquidity risk is not considered significant. Currency risk The majority of the financial risk that the Group is exposed to relates to currency risk due to exchange rate fluctuations. Both revenue and operating expenses are exposed to foreign exchange rate fluctuations. The majority of the Group's operating expenses are denominated in Norwegian kroner (NOK) or United States dollars (USD). The Group maintains cash deposits in both currencies, and there are no capital controls limiting the Group's ability to exchange between these currencies, if required. The Group's largest asset, its investment in the shares of Bemobi Mobile Tech S.A, is denominated in Brazilian reais (BRL). Accordingly, fluctua- tions in the exchange rate between the BRL and the Group's reporting currency, USD, can impact both the reported profit or loss and the carry- ing value of that investment. A small number of BRL-denominated expenses are also incurred by the Group in Brazil related to this investment. Exposure The Group's exposure to foreign currency risk at the end of the reporting period, expressed in USD thousands, was as follows: Credit facility As at December 31, 2024, Otello has no outstanding loans payable. Note 17 Corporate structure Below is a list of group companies in the Otello group as at December 31, 2024: Owner and Entity name Location Country Segment voting share Otello Corporation ASA Oslo Norway Corporate Listed Directly owned subsidiaries Otello Technology Investment AS (formerly Bemobi Holding AS) Oslo Norway Corporate 100% Indirectly owned subsidiaries None 2024 2023 [USD thousands] USD BRL USD BRL Investment in Bemobi Mobile Tech S.A (associate) 0 68,970 0 94,402 Accounts receivable 0 0 19 0 Bank accounts 4,827 4,400 4,919 2,266 Accounts payable (4) 0 (9) 0 Other current liabilities 0 (38) 0 (36) 44 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 45 CONSOLIDATED STATEMENT Ownership structure The 20 largest shareholders of Otello Corporation ASA shares as of December 31, 2024, were as follows: Note 18 Related parties 2024 2024 2023 Owner’s Owner’s and voting and voting [In thousands of shares] Shares share % share % GOLDMAN SACHS INTERNATIONAL 21,430 23.5% 7.8% SAND GROVE OPPORTUNITIES AS 20,913 23.0% 31.3% OTELLO CORPORATION ASA 7,311 8.0% 3.5% VERDIPAPIRFONDET DNB TEKNOLOGI 6,385 7.0% 7.0% AREPO AS 5,199 5.7% 5.7% CITIBANK, N.A. 4,446 4.9% 20.6% J.P. MORGAN SE 2,910 3.2% 0.0% BANK PICTET & CIE (EUROPE) AG 1,921 2.1% 2.1% SKANDINAVISKA ENSKILDA BANKEN AB 1,901 2.1% 2.1% GRØNLAND 1,485 1.6% 0.0% UBS AG 1,239 1.4% 0.0% BONHEUR ASA 1,217 1.3% 1.3% CMDC AS 705 0.8% 0.6% NORDNET LIVSFORSIKRING AS 693 0.8% 0.6% BÆKKELAGET HOLDING AS 530 0.6% 0.5% AS SUKA 500 0.5% 0.5% BRYNILDSRUD 439 0.5% 0.0% WOENSEL AS 415 0.5% 0.4% J.P. MORGAN SE 413 0.5% 0.0% BKS CAPITAL AS 403 0.4% 0.0% Sum 80,454 88.3% 84.2% Other shareholders 10,646 11.7% 15.8% Total numbers of shares 91,100 100.0% 100.0% Bemobi The Group holds a 38.2% equity interest in Bemobi Mobile Tech S.A through common shares. Please see Note 11 for further details on the status of this equity interest. Members of the Board of Directors and Executive Management The Group has not engaged in any related party transactions with any members of the Board of Directors of Otello Corporation ASA or Otello Group executive management. Members of the Board of Directors and Executive Management of the Group and their immediate relatives controlled 0.3% (2023: 0.4%) of the Group's voting share as per December 31, 2024. Information regarding compensation for the Board of Directors and executive management can be found in Note 3. Note 19 Shares and shareholder information As of December 31, 2024, Otello had a share capital of NOK 1 821 994.58 (USD 160 480) divided into 91 099 729 ordinary shares with a nominal value of NOK 0.02 each (USD 0.002). All ordinary shares have equal voting rights and the right to receive dividends. The annual general meeting of the Company on June 3, 2024, authorized the Board of Directors of Otello Corporation ASA (the "Company") to acquire shares in the Company. The maximum value of the shares which the Company may acquire pursuant to the authorization is a total face value of NOK 182 199. The minimum amount which may be paid for each share acquired pursuant to this power of attorney is NOK 5, and the maximum amount is NOK 200. The shares purchased through the share buyback program may be disposed of to meet obligations under employee incentive schemes, as part of consideration payable for acquisitions made by the Company, as part of consideration for any mergers, demergers or acquisitions involving the Company, to raise funds for specific investments, for the purpose of paying down loans, or in order to strengthen the Company's capital base. The above authorization is valid up to and including June 30, 2025. Treasury shares and ordinary shares During 2024, Otello purchased 4 313 200 (2023: 3 180 027) treasury shares for $3,201 thousand (2023: $2,610 thousand), and sold 0 (2023: 0) trea- sury shares for $0.0 thousand (2023: $0.0 thousand). As of December 31, 2024, Otello owned 7 493 227 treasury shares (December 31; 2023: 3 180 027). Note 20 Events after the reporting period Dividends Otello did not pay a dividend in 2024. The Board of Directors proposes that the 2025 Annual General Meeting does not approve any dividend payment. No events have occurred after the reporting date that would require the financial statements to be adjusted. Please see stock exchange announcements for further information on any subsequent events. 46 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 47 PARENT COMPANY Statement of Comprehensive Income Restated USD thousands, except per share amounts Note 2024 2023 Revenue 0 0 0 Total operating revenue 0 Employee benefits expense Depreciation and amortization expenses Other operating expenses 2 3 4 (2,269) (109) (1,122) (2,142) (384) (1,553) Total operating expenses Operating profit (loss) Net financial items (3,501) (3,501) (4,507) (8,007) 0 (4,079) (4,079) 850 5 Profit (loss) before income tax Income taxes (3,229) 0 Parent Company 6 Financial Statements 2024 Profit (loss) (8,007) (3,229) Other comprehensive income: Otello Corporation ASA Items that may or will be transferred to profit (loss) Foreign currency translation differences (11,448) (1,986) Items that will not be transferred to profit (loss) Foreign currency translation differences 7,457 0 Total comprehensive income (loss) (11,998) (5,215) Profit (loss) attributable to: Owners of Otello Corporation ASA (8,007) (11,998) (3,229) (5,215) Total comprehensive income (loss) attributable to: Owners of Otello Corporation ASA 48 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 49 PARENT COMPANY Statement of Statement of Financial Position Financial Position Restated 12/31/2023 Restated 01/01/2023 Restated 12/31/2023 Restated 01/01/2023 USD thousands Note 12/31/2024 USD thousands Note 12/31/2024 Assets Shareholders’ equity and liabilities Equity attributable to owners of the company 25,809 41,008 41,008 48,833 48,833 Property, plant and equipment Right of use assets Investments in subsidiaries Other investments 0 - 0 109 110,492 813 284 219 114,486 808 7 8 9 Total equity 25,809 99,044 729 Liabilities Lease liabilities Other non-current liabilities 7 10 - - - 83 81,194 Total non-current assets 99,773 111,414 115,797 77,254 Accounts receivable Other receivables - 136 22 272 64 378 Total non-current liabilities 77,251 0 Cash and cash equivalents 3,499 9,852 14,988 Lease liabilities Accounts payable Other current liabilities Other current liabilities to group companies 7 - 71 274 - 84 13 1,042 79,414 108 164 845 - Total current assets Total assets 3,634 10,146 15,430 131,227 10 11 103,407 121,561 Total current liabilities Total liabilities 345 77,598 80,553 80,553 121,561 1,117 82,394 131,227 Total equity and liabilities 103,407 Oslo, April 24, 2025 Frank Blaker Chairman of the Board Shahzad Abid Silje Augustson Jason Hoida CEO 50 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 51 PARENT COMPANY Statement of Cash Flows Restated USD thousands Note 2024 2023 Cash flow from operating activities Profit (loss) before taxes (8,007) (3,229) Depreciation and amortization expense Changes in accounts receivable Changes in accounts payable 3 11 11 109 21 57 218 4,834 - 384 31 (137) 231 (11) (1,205) 465 Changes in operating accruals Other adjustments for non-cash items Other adjustments for which cash effects are investing or financing cash flow Interest income received 328 Net cash flow from operating activities (2,439) (3,472) Cash flow from investing activities Proceeds from sale of shares Other cash payments to acquire equity or debt instruments of other entities Proceeds from liquidation of group companies - - - 740 (29) 376 9 7 Net cash flow from investing activities 0 1,087 Cash flow from financing activities Payments to acquire entity’s shares Payment of finance lease liabilities, net (3,066) (81) (2,610) (106) Net cash flow from financing activities Net change in cash and cash equivalents (3,147) (2,716) (5,101) (5,586) Cash and cash equivalents (beginning of period) Effects of exchange rate changes on cash and cash equivalents FX differences related to changes in balance sheet items 9,852 (1,021) 253 14,988 (642) 607 Cash and cash equivalents 1) 3,499 9,852 1) Of which $144 thousand (2023: $167 thousand) is restricted cash as of December 31, 2024. 52 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 53 PARENT COMPANY Statement of Statement of Changes in equity Changes in equity Number Number of shares outstand- ing (thou- sands) of shares outstand- ing (thou- sands) Trans- lation reserve Trans- lation reserve Issued Share Treasury shares Other equity Total equity Issued Share Treasury Other equity Total equity USD thousands (except number of shares) capital premium USD thousands (except number of shares) capital premium shares Balance as of 12/31/2023 87,920 209 209 114,750 (2,610) (194,393) 109,722 27,678 Balance as of 12/31/2022 91,100 209 209 114,750 114,750 0 (193,137) 104,336 26,158 Adjustment to opening balance (2,379) 25,055 22,676 Adjustment to opening balance (3,109) 16,439 13,330 Restated balance as of 01/01/2023 0 (195,516) 129,390 48,833 Restated balance as of 01/01/2024 114,750 (2,610) (197,502) 126,161 41,008 Comprehensive income for the period Comprehensive income for the period Profit for the period (3,229) (3,229) Profit for the period (8,007) (8,007) Other comprehensive income Other comprehensive income Foreign currency translation differences (1,986) (1,986) (5,215) (2,610) Foreign currency translation differences (11,448) 7,457 (3,991) (11,998) (3,201) Total comprehensive income for the period - - - (1,986) (3,229) 126,161 Total comprehensive income for the period Treasury shares purchased - - - (11,448) (550) Treasury shares purchased (3,180) (2,610) (4,313) (3,201) Balance as of 12/31/2024 83,607 209 114,750 (5,811) (208,950) 125,611 25,809 Balance as of 12/31/2023 87,920 209 114,750 (2,610) (197,502) 41,008 Face value of the shares The face value of the shares is NOK 0.02. Reserve for treasury shares The reserve for the Company’s own shares comprises the face value cost and excess value of own shares held by the Company. Translation reserve The translation reserve consists of all foreign currency differences arising from the translation of the account balances that are not in USD. Other equity Other equity consists of all other transactions, including but not limited to, total recognized income and expense for the current period. Adjustment to opening balance The Company has reassessed the basis for calculating the impairment of investment in subsidiaries, with the effect that there is no longer any impairment. The Company has accordingly restated the opening balances of the translation reserve and other equity as a result of this reassessment. Following the reassessment, the balance as of 12/31/2022 of the translation reserve was decreased by USD 2,379 thousands and of other equity was increased by USD 25,055 thousands; and the balance of of 12/31/2023 of the transaltion reserve was decreased by USD 3,109 thousands and of other equity was increased by USD 16,439 thousands. This change is not expected to have any future effect. 54 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 55 PARENT COMPANY Note 1 Note 2 General information and material accounting principles Employee benefits expense Payroll expenses [USD thousands] 2024 2023 Salaries and bonuses Social security cost Pension cost Insurance and other employee benefits Payments to long-term contractual staff (1890) (266) (110) (3) (1608) (297) (115) (26) General information These are the financial statements of Otello Corporation ASA, which is the holding company for the Otello Group and includes the Group Executive Management (chief operating decision-makers) and associated staff functions. See also Note 1 in the Group’s consolidated financial statements. - (96) Statement of compliance Total (2,269) (2,142) 5.35 The parent company financial statements have been prepared in accordance with IFRS® Accounting Standards as adopted by the EU. The parent company financial statements also include certain disclosures in order to comply with certain regulations and paragraphs in the Norwegian Accounting Act and the Securities Trading Act. Average number of full time equivalents 3.80 These parent company financial statements have been approved and issued by the Board of Directors on April 24, 2025 for approval by the Annual General Meeting on May 26, 2025. The Company has incorporated the requirements set out by the Mandatory Occupational Pensions Act ("Obligatorisk Tjeneste Pensjon"). Remuneration to key management personnel Information about remuneration to key management personnel is given in the accompanying Note 3 in the consolidated financial statements. The explanation of the accounting policies in the consolidated financial statements also applies to the parent company, and the notes to the consolidated financial statements will cover the parent company, except for the below. Investments in subsidiaries – parent company Note 3 For investments in subsidiaries, associates and jointly controlled entities, the cost method is applied. The cost price is increased when funds are added through capital increases or when group contributions are made to subsidiaries. Dividends received are initially recognised as income. Dividends exceeding the portion of retained profit after the acquisition are reflected as a reduction in cost price. Dividend/group contributions from subsidiaries are reflected in the same year that the dividend is approved by the general meeting. Depreciation and amortization expenses Depreciation and amortization expenses [USD thousands] Note 2024 2023 Investments in subsidiaries are reviewed for impairment whenever the carrying amount exceeds the value of net assets in the subsidiaries. An impairment loss is reversed if the impairment situation is deemed to no longer exist. Property, plant and equipment Right of use assets - (270) (115) 7 (109) Company activities The Company’s main activities are to serve the Group as a whole, through the following functions and services: CEO/Board of Directors, corpo- rate finance and accounting, legal, HR, and IT. The Company charges some of the costs related to these functions to subsidiaries. Total (109) (384) The principal activities of the Group’s business area are described in more detail under Operating and segment information in Note 2 in the Group’s consolidated financial statements. Note 4 Restatement of previous years Other operating expenses Change in carrying value of investments in subsidiaries as at 1 January 2023 Other operating expenses [USD thousands] 2024 2023 The opening balance of the carrying value of investments in subsidiaries as at 1 January 2023 has been changed due to prior period accounting errors. The errors are due to historical impairment calculations, resulting in an understatement of the carrying value of the investment in Otello Technology Investment AS. Audit, legal and other advisory services Insurance Hardware and software Rent and other office expenses Other expenses (451) (209) (205) (95) (530) (276) (249) (82) The changes have been applied retrospectively. The impact on Otello’s financial statements for financial year 2023 is: • • • • • Impairment gains are reduced by 8,615 thousand Profit before and after tax is increased by 8,615 thousand (163) (416) Investments in subsidiaries opening balance 1 January 2023 is increased by 22,676 thousand Translation reserve opening balance 1 January 2023 is decreased by 2,379 thousand Other equity opening balance 1 January 2023 is increased by 25,055 thousand Total (1,122) (1,553) Auditor remuneration The following table shows audit fees for the current and prior year. For all categories the reported fee is the recognized expense in other operat- ing expenses for the year to the external auditor, PwC. Audit fees [USD thousands] 2024 2023 Statutory audit Tax advisory services Other services (140) - (16) (172) - (4) Total (157) (176) 56 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 57 PARENT COMPANY Note 5 Note 7 Net financial items Right-of-use assets and lease liabilities Other net financial items [USD thousands] Note 2024 2023 The lease liability and right of use asset relates to the Group's office in Oslo, Norway. The lease expired on November 30, 2024. No new lease has been entered since this expiry. Interest income, external Interest expenses, external Interest expenses, intercompany Net FX gains (losses) Group contribution Gain (loss) sale of shares Dividends received 328 (1) (5,325) (7,930) 8,421 - 465 (4) (5,401) (2,153) 7,181 12 Lease liabilities [USD thousands] 2024 2023 Balance as of 1/1 Additions 84 - 190 5 740 22 Translation differences Lease payments Interest expense on lease liabilities (4) (81) 1 (9) (106) 4 - Total other net financial items (4,507) 850 Lease liabilities as of 12/31 - 84 Of which: Current lease liabilities (less than 1 year) - 84 84 Balance as of 12/31 - Note 6 Right of use assets [USD thousands] 2024 2023 Taxes Balance as of 1/1 Additions Depreciation 109 - (109) 219 5 (115) Restated [USD thousands] 2024 2023 Right of use assets as of 12/31 - 109 Income tax expense recognized in the statement of comprehensive income: Depreciation for the year (109) (115) Current tax 0 - Total 0 0 Depreciation is calculated on a straight-line basis over the estimated useful life of each lease asset. The estimated useful life is considered to be the term of the contract for each leased asset. Recognized deferred tax assets and liabilities: The Company recognizes deferred tax assets related to tax losses in the statement of financial position when it is considered probable that taxable profit will be generated in future periods against which these tax losses carries forwards can be utilized. Management does not have objective evidence to support that sufficient future taxable profits will be generated in future periods against which these tax loss carry for- wards can be utilized, and accordingly they are not recognized in the statement of financial position as of December 31, 2024. IFRS 16 effects on the statement of comprehensive income for the year [USD thousands] 2024 2023 Operating lease expenses recognized under operating expenses decreased Depreciation expense increased as a result of depreciation of ROU assets Net interest expense increased as a result of recognition of the lease liability Translation differences (81) 109 1 (106) 115 4 (4) (9) Restated Reconciliation of effective tax rate [USD thousands] 2024 2023 Net effect 26 3 Profit (loss) before tax Income tax using the corporate income tax rate in Norway (22% in 2024 / 22% in 2023) (8,007) (1,762) (3,229) (710) Future lease payments The future minimum lease payments under non-cancellable lease contracts are as follows: Effect of non-taxable and non-deductible items Effect of deferred tax assets not recognized 5 (136) 847 Payments for leased premises 2024 2023 1,756 Total tax expense for the year Effective tax rate 0 0 Less than one year Between one to five years More than five years - - - 113 - 0.0% 0.0% The effective tax rate in 2024 of 0.0% differs from the statutory rate of 22.0% due to the following key items: Total - 113 • Deferred tax assets have not been recognised, due to the uncertainty of generating sufficient future taxable profits to utilise the tax losses. Permanent differences Permanent differences include impairment losses, dividends received, share-based remuneration, and non-deductible costs. 58 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 59 PARENT COMPANY Note 8 Note 11 Investments in subsidiaries Receivables, payables and transactions with group companies Investments in subsidiaries Below is an overview of the investments in subsidiaries directly held by Otello Corporation ASA as of December 31, 2024. [USD thousands] Otello Technology Investment AS Receivables and payables Segment (Group) Acquisition/establishment date Registered office Corporate 8/8/2016 Oslo, Norway 100% The table below presents a breakdown of receivables and payables with group companies. [USD thousands] Ownership and voting share Other receivables (non-current) 2024 Accounts receivables 2024 Other receivables (current) 2024 Equity at year end 148,631 (1,542) 2023 2023 2023 Profit (loss) for the year - - - 1 - - Information related to carrying value: Otello Technology Investment AS Total Liabilities (non-current) 2024 Accounts payable 2024 Other liabilities (current) 2024 Acquisition cost Equity increase prior to current year Translation differences 63,000 63,000 64,641 (28,597) (28,597) 2023 2023 2023 64,641 76,314 - - - - 79,414 Carrying value 99,044 99,044 All outstanding balances with the related parties are priced on an arm’s-length basis and are to be settled in cash within five years of the reporting date. None of the balances are secured. The balances outstanding are specified as follows: Shares in subsidiaries There were no shares in subsidiaries owned by other group companies, and indirectly owned by the Company, as at December 31, 2024. 2024 Receivables from group companies [USD thousands] Total receivables Payables to group companies [USD thousands] Note 9 Otello Technology Investment AS 76,314 Other investments 0 Total payables 76,314 Investments in other shares 2023 Otello owns 1.42% of the shares in Alliance Venture Spring AS and approximately 0.05% of the shares in Life360, Inc, which merged with Zen Labs, Inc during 2019. Otello owned shares in Zen Labs Inc prior to this merger. The recognized value of the investments in other shares is $729 thousand. Management has not determined the fair value of these investments, as they are not material for the Group. Alliance Venture Spring is a Norwegian venture capital firm investing in early stage technology companies. Life360 provides location-based services, sharing and noti- fications application to consumers globally, including integrated driving safety features and tools like Crash Detection and Roadside Assistance. Investments in other shares are recognized at cost. Receivables from group companies [USD thousands] Payables to group companies [USD thousands] Otello Technology Investment AS 1 Otello Technology Investment AS 79,414 Total receivables 1 Total payables 79,414 Note 10 Breakdown of intercompany payables by currency All outstanding amounts as of December 31, 2024 are denominated in USD. Other liabilities Transactions with group companies Other non-current liabilities [USD thousands] Note 2024 2023 Non-current liabilities, external Non-current liabilities, intercompany 939 76,314 - - Transactions [USD thousands] 2024 2023 11 Interest expense to related parties (5,325) (5,401) Total 77,254 0 Loans from Otello Technology Investment AS Other current liabilities [USD thousands] Note 2023 2022 As of the previous balance date, the Company had five outstanding loans from Otello Technology Investment AS, totalling $79,414k including accrued interest. The oldest of these loans was repaid during 2024 by applying part of the group contribution received from Otello Technology Investment AS in relation to the 2023 income tax return. The remainder of the group contribution was applied to the next oldest of the loans. As the loans came to their original maturity dates, the parties agreed to extend them until all the loans had matured. At that time, the parties entered into a single new loan for the remaining outstanding amounts. This new loan is subject to a written loan agreement, with an interest rate based on SOFR + 250 basis points. Other current liabilities, external Other current liabilities, intercompany 274 - 1,042 79,414 11 Total 274 80,465 60 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 61 PARENT COMPANY Foreign exchange contracts Note 12 During 2024 and 2023, the Company did not use forward exchange contracts to hedge its currency risk, and the Company had not entered any foreign exchange contracts as of December 31, 2024. Financial risk and financial instruments Credit risk Credit risk is the risk of losses that the Company would suffer if a counterparty fails to perform its financial obligations. The Company's expo- sure to credit risk is mainly related to external receivables, which are immaterial, and accordingly credit risk is not considered significant. Capital management The Company's policy has been to maintain a high equity-to-asset ratio and to maintain a solid capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Loans and receivables The Company has limited exposure in terms of credit risk related to loans and receivables with non-related parties. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements. Liquidity risk As of December 31, 2024, the Company had bank deposits well in excess of the recognized liabilities to non-related parties. Accordingly, liquidity risk is not considered significant. Financial risk Risk management in the Company is carried out by management and approved by the Board of Directors. Potential risks are evaluated on a regular basis and management determines appropriate strategies related to how these risks are to be handled within the Company under the approved policies. The Company is exposed to market (currency) risk, credit risk and liquidity risk to varying degrees. Credit facility As at December 31, 2024, the Company has no outstanding loans payable to non-related parties. The only outstanding loans payable relate to money borrowed from the Company's wholly-owned subsidiary, Otello Technology Investment AS. Currency risk The majority of the financial risk that the Company is exposed to relates to currency risk due to exchange rate fluctuations. Both revenue and operating expenses are exposed to foreign exchange rate fluctuations. The majority of the Company's operating expenses are denominated in Norwegian kroner (NOK) or United States dollars (USD). The Company maintains cash deposits in both currencies, and there are no capital controls limiting the Company's ability to exchange between these curren- cies, if required. The Company's largest asset, its investment in the shares of its subsidiary Otello Technology Investment AS, is denominated in Norwegian krone (NOK). Accordingly, fluctuations in the exchange rate between the NOK and the Company's reporting currency, USD, can impact both the reported profit or loss and the carrying value of that investment. Further, the largest asset of Otello Technology Investment AS, its investment in the shares of Bemobi Mobile Tech S.A, is denominated in Brazilian reais (BRL). Accordingly, fluctuations in the exchange rate with the BRL can also impact the reported figures. Note 13 Contingent liabilities The Group's exposure to foreign currency risk at the end of the reporting period, expressed in USD thousands, was as follows: GDPR complaint filed with the Norwegian Data Protection Authority (DPA) As reported in the media, on January 14, 2020, the Norwegian Consumer Council (NCC) filed a complaint to the Norwegian Data Protection Author- ity (DPA) against Grindr and five other companies, including AdColony, who is a supplier to Grindr. As of the date of this report, AdColony has not received any formal notification or complaint from the DPA. The Company has not recognized any contingent liabilities in the financial statements related to this matter. [USD thousands] 2024 2023 Accounts receivable Bank accounts Non-current liabilities, intercompany Current liabilities, intercompany Accounts payable 0 2,319 (76,314) 0 19 2,530 0 (79,414) (9) Refer to Note 13 of the consolidated financial statements for further information on this matter, and associated and other obligations of Otello under the Share Purchase Agreement with Digital Turbine, inc. related to the sale of AdColony. (4) Net foreign exchange gain/(loss) included in other gains/(losses) [USD thousands] 2024 2023 Net financial items (7,930) (2,153) Note 14 Cash flow and interest risk Related parties The Company's main interest rate risk arises from long-term borrowing with variable rates, which exposes the Company to cash flow interest rate risk. The Company's borrowing is entirely in USD. Bemobi The Company's exposure to interest rate changes at the end of the reporting period are as follows: The Group holds a 38.2% equity interest in Bemobi Mobile Tech S.A through common shares. Please see Note 11 in the consolidated financial state- ments for further details on the status of this equity interest. The Group ceased to provide accounting and legal support to Bemobi on a transition- al basis during 2023. [USD thousands] 2024 2023 Variable rate borrowing Maturity (77,254) 31.12.2027 (79,414) 31.12.2024 Members of the Board of Directors and Executive Management The Group has not engaged in any related party transactions with any members of the Board of Directors of Otello Corporation ASA or Otello Group executive management. Members of the Board of Directors and Executive Management of the Group and their immediate relatives controlled 0.3% (2023: 0.4%) of the Group's voting share as per December 31, 2024. See Note 3 in the consolidated financial statements for further information. Sensitivity Higher (lower) interest rates will have the effect of increasing the interest expense on the variable rate borrowing, and accordingly decreasing (increasing) profit (loss). Such movements in interest rates will be partly offset by the impact on interest income from the Company's bank accounts. Information regarding compensation for the Board of Directors and executive management can be found in Note 3 in the consolidated financial statements. 62 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 63 PARENT COMPANY Note 15 Shares and shareholder information Information regarding shares and shareholder information can be found in Note 19 in the consolidated financial statements. Information regarding shares owned by members of the Board, the Chief Executive Officer and other members of Executive Management can be found in Note 3 in the consolidated financial statements. Note 16 Events after the reporting period No events have occurred after the reporting date that would require the financial statements to be adjusted. Please see stock exchange announcements for further information on any subsequent events. 64 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 65 To the General Meeting of Otello Corporation ASA Independent Auditor’s Report Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Otello Corporation ASA, which comprise: • the financial statements of the parent company Otello Corporation ASA (the Company), which comprise the statement of financial position as at 31 December 2024, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information, and • the consolidated financial statements of Otello Corporation ASA and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at 31 December 2024, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information. Auditor's report In our opinion • • the financial statements comply with applicable statutory requirements, the financial statements give a true and fair view of the financial position of the Company as at 31 December 2024, and its financial performance and its cash flows for the year then ended in accordance with IFRS Accounting Standards as adopted by the EU, and the consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2024, and its financial performance and its cash flows for the year then ended in accordance with IFRS Accounting Standards as adopted by the EU. • Our opinion is consistent with our additional report to the Audit Committee. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided. We have been the auditor of Otello Corporation ASA for 8 years from the election by the general meeting of the shareholders on 2 June 2017 for the accounting year 2017. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. PricewaterhouseCoopers AS, Dronning Eufemias gate 71, Postboks 748 Sentrum, NO-0106 Oslo T: 02316, org. no.: 987 009 713 MVA, www.pwc.no Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap Otello Corporation ASA - Annual Report 2024 67 • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's and the Group's internal control. We have determined that there are no key audit matters to communicate in our report. Other Information The Board of Directors and the Managing Director (management) are responsible for the information in the Board of Directors’ report and the other information accompanying the financial statements. The other information comprises information in the annual report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the information in the Board of Directors’ report nor the other information accompanying the financial statements. • • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's and the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company and the Group to cease to continue as a going concern. In connection with our audit of the financial statements, our responsibility is to read the Board of Directors’ report and the other information accompanying the financial statements. The purpose is to consider if there is material inconsistency between the Board of Directors’ report and the other information accompanying the financial statements and the financial statements or our knowledge obtained in the audit, or whether the Board of Directors’ report and the other information accompanying the financial statements otherwise appears to be materially misstated. We are required to report if there is a material misstatement in the Board of Directors’ report or the other information accompanying the financial statements. We have nothing to report in this regard. • • evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves a true and fair view. Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report • • is consistent with the financial statements and contains the information required by applicable statutory requirements. obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. Our opinion on the Board of Directors' report applies correspondingly to the statement on Corporate Governance. Responsibilities of Management for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the EU, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. In preparing the financial statements, management is responsible for assessing the Company’s and the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Report on Other Legal and Regulatory Requirements Report on Compliance with Requirement on European Single Electronic Format (ESEF) As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: Opinion • identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error. We design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. As part of the audit of the financial statements of Otello Corporation ASA, we have performed an assurance engagement to obtain reasonable assurance about whether the financial statements included in the annual report, with the file name otellocorporation-2024-12-31-en.zip, have been prepared, in all material respects, in compliance with the requirements of the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to Section 5-5 of the 2 / 4 3 / 4 68 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 69 Norwegian Securities Trading Act, which includes requirements related to the preparation of the annual report in XHTML format, and iXBRL tagging of the consolidated financial statements. In our opinion, the financial statements, included in the annual report, have been prepared, in all material respects, in compliance with the ESEF regulation. Management’s Responsibilities Management is responsible for the preparation of the annual report in compliance with the ESEF regulation. This responsibility comprises an adequate process and such internal control as management determines is necessary. Auditor’s Responsibilities For a description of the auditor’s responsibilities when performing an assurance engagement of the ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger Oslo, 28 April 2025 PricewaterhouseCoopers AS Audun Bakke Andersen State Authorised Public Accountant (This document is signed electronically) 4 / 4 70 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 71 Principles of Corporate Governance at Otello Corporation ASA General principles, implementation and reporting on corporate governance Otello’s activities Otello primarily holds shares in Bemobi, a pioneering Otello Corporation ASA (“Otello” or the “Company”) technology company offering mobile solutions and plat- strongly believes that strong corporate governance forms for digital payments, customer engagement, mi- creates higher shareholder value. As a result, Otello is crofinance and digital services. The Group also retains committed to maintaining high standards of corporate rights to its Rocket Optimizer™ technology and owns governance. Otello’s principles of corporate governance some minor investments in other companies. have been developed in light of the Norwegian Code of Practice for corporate governance (the “Code”), dat- Our business is based on close relationships with cus- ed October 14, 2021, as required for all listed companies tomers, partners, investors, employees, friends, and on the Oslo Stock Exchange. The Code is available at communities all over the world — relationships we are www.nues.no. The principles are further developed and committed to developing by conducting our business are in accordance with section 3-3b and section 3-3c of openly and responsibly. Our corporate policies are devel- the Norwegian Accounting Act, which can be found at oped in order to be true to this commitment. https://lovdata.no/dokument/NL/lov/1998-07-17-56. Otello views the development of high standards of corpo- Corporate Social Responsibility guidelines rate governance as a continuous process and will continue The Board of Directors has adopted corporate social re- to focus on improving the level of corporate governance. sponsibility (“CSR”) guidelines. These guidelines cover a range of topics and are focused around the following The Board of Directors has the overall responsibility for areas: our employees, human rights, anti-corruption and corporate governance at Otello and ensures that the the environment. These general principles and guidelines Company implements sound corporate governance. The apply to all employees and officers of the Group. See the Board of Directors has defined Otello’s basic corporate Board of Directors report for further information. values, and the Company’s ethical guidelines and guide- lines on corporate social responsibility are in accordance Equity, capital structure and dividends with these values. The Company’s capital structure and financing is consid- ered to be appropriate in terms of Otello’s objectives, The Board of Directors has defined clear objectives, strategy and risk profile. strategies, and risk profiles for Otello's business activi- ties such that Otello creates value for shareholders in a Otello’s policy is to maintain a high equity ratio. Otello sustainable manner. The Board of Directors considered believes that share buybacks and dividend distributions financial, social and environmental considerations when can be undertaken as long as the Company can sustain- they carried out this work. ably fund its ongoing operating expenses. Dividend pay- ments will be subject to approval by the shareholders at The Board of Directors further will annually evaluate the Company’s Annual General Meetings. This dividend Otello's objectives, strategies and risk profiles. policy is considered clear and predictable. 72 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 73 Authorizations granted to the Board of Directors to in- where relevant, comply with the procedures set out in crease the Company’s share capital will be restricted to the Norwegian Public Limited Liability Companies Act defined purposes and will in general be limited in time (the "NPLCA"). The Board of Directors will arrange for to no later than the date of the next Annual General a valuation to be obtained from an independent third Meeting. To the extent that authorization to increase party unless the transaction, agreement or arrangement the share capital shall cover issuance of shares under in question is considered to be immaterial or covered by employee share option schemes and other purposes, the the provisions of section 3-16 of the NPLCA. Company will consider presenting the authorizations to the shareholders as separate items. If the Company should enter into a not immaterial trans- action with related parties within Otello or with compa- The Board of Directors may also be granted the author- nies in which a director or leading employee of Otello or ity to acquire own shares. Authorizations granted to the close associates of these have a material direct or indirect Board of Directors to acquire own shares will also be re- vested interest, those concerned shall immediately noti- stricted to defined purposes. To the extent that authori- fy the Board of Directors. Any such transaction must be zation to acquire own shares shall cover several purposes, approved by the Board of Directors, and where required the Company will consider presenting the authorization also as soon as possible publicly disclosed to the market. to the shareholders as separate items. Such authority may by law apply for a maximum period of two years, Insider trading and will state the maximum and minimum amount pay- The Company has an established and closely monitored able for the shares. Normally, the proposed authority insider trading policy. Otello employees are prohibited will be for one year or to the next annual general meet- from trading in Otello securities based on information ing. In addition, an authorization to acquire own shares that is material, nonpublic information; that is, the pub- will state the highest nominal value of the shares which lic does not yet have access to this information, and this Otello may acquire, and the mode of acquiring and dis- information may be deemed interesting for an investor posing of own shares. Otello may not at any time hold to use when deciding whether to buy or sell securities. more than 10% of the total issued shares as own shares. This rule also applies to other companies, where Otello employees may have access to such nonpublic informa- Equal treatment of shareholders tion. Please note that even a tip to family and friends A key concept in Otello’s approach to corporate gover- is considered illegal, if this should be used as a basis for nance is the equal treatment of shareholders. Otello has buying or selling securities. one class of shares and all shares are freely transferable (with possible exceptions due to foreign law restrictions Any transaction the Company carries out in its own on sale and offering of securities). All shares in the Com- shares will be carried out either through the stock ex- pany carry equal voting rights. The shareholders exer- change or at prevailing stock exchange prices if carried cise the highest authority in the Company through the out in any other way. General Meeting. All shareholders are entitled to submit items to the agenda, and to meet, speak, and vote at the Freely negotiable shares General Meeting. Otello has no limitations on the transferability of shares and has one class of shares. Each share entitles the hold- Any decision to waive the pre-emption rights of exist- er to one vote. ing shareholders to subscribe for shares in the event of an increase in share capital will be explained. Where the General Meetings Board of Directors resolves to carry out an increase in the Through the General Meeting, the shareholders exercise share capital and waive the pre-emption rights of the the highest authority in the Company. General Meetings existing shareholders on the basis of a mandate granted are held in accordance with the Code. All shareholders are to the board, an explanation will be publicly disclosed entitled to submit items to the agenda, meet, speak, and in a stock exchange announcement issued in connection vote at General Meetings. The Annual General Meeting is with the increase of the capital. held each year before the end of June. Extraordinary Gen- eral Meetings may be called by the Board of Directors at any time. The Company’s auditor or shareholders repre- Transactions with related parties Any transactions, agreements or arrangements between senting at least five percent of the total share capital may the Company and its shareholders, members of the demand that an Extraordinary General Meeting be called. Board, members of the executive management team or close associates of any such parties will only be entered General Meetings are convened by written notice to into as part of the ordinary course of business and on all shareholders with known addresses no later than 21 arm's length market terms. All such transactions shall, days prior to the date of the meeting. Proposed resolu- 74 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 75 tions and supporting information, including information Nomination Committee on how to be represented at the meeting, vote by proxy The Nomination Committee is a body established pur- and the right to propose items for the General Meeting, suant to the Articles of Association and shall consist of is generally made available to the shareholders no later three to five members. The members and the chairper- than the date of the notice. According to the Compa- son are elected by the General Meeting. The members ny’s Articles of Association, attachments to the calling of the Nomination Committee should be selected to notice may be posted on the Company’s website and take into account the interests of shareholders in gen- not sent to shareholders by ordinary mail. Shareholders eral. Members of the Nomination Committee serve for who wish to receive the attachments may request the a two-year period but may be re-elected. Following the Company to mail such attachments free of charge. Res- ordinary general meeting held on 3 June 2024, the cur- olutions and the supporting information are sufficiently rent members of the Nomination Committee are Simon detailed, comprehensive and specific to allow share- Davies (Chairperson), Kari Stautland and Jakob Iqbal. The holders to form a view on all matters to be considered in members of the Nomination Committee are indepen- the meeting. dent of the Board of Directors and executive manage- ment. The members of the Nomination Committee are Shareholders who are unable to be present, are encour- independent of the Board of Directors and executive aged to participate by proxy and a person who will be management. Pursuant to the Articles of Association, no available to vote on behalf of shareholders as their proxy member of the Nomination Committee can also simulta- will be nominated. Proxy forms will allow the proxy hold- neously be a member of the Board of Directors. er to cast votes for each item separately. A final dead- line for shareholders to give notice of their intention to The tasks of the Nomination Committee are to propose attend the meeting or vote by proxy will be set in the candidates for election as shareholder-elected members notice for the meeting. Such deadline will be set as close of the Board of Directors and members of the Nomina- as possible to the date of the General Meeting and under tion Committee. The Nomination Committee is encour- every circumstance, in accordance with the principles of aged to have contact with shareholders, the Board of section 5-3 of the NPLCA. Directors and the Company’s Chief Executive Officer as part of its work on proposing candidates for election to The members of the Board of Directors, Chairman of the the Board of Directors. The Committee cannot propose Nomination Committee, CEO, CFO and the auditor are all its own Committee members as candidates for the Com- required to be present at the meeting in person, unless pany’s Board of Directors. Further, the Committee shall they have valid reasons to be absent. The Board of Direc- make recommendations regarding the remuneration of tors normally proposes that the General Meeting elects an the members of the Board of Directors. Its recommenda- independent chairman for the meeting. Notice, enclosures tions will normally be explained, and information about and protocol of meetings are available on Otello’s website. proposed candidates will normally be given, no later than 21 days before the General Meeting. The tasks of The General Meeting elects the members of the Board the Nomination Committee are further described in the of Directors (excluding employee representatives), deter- Company’s Nomination Committee guidelines, as adopt- mines the remuneration of the members of the Board ed by the Annual General Meeting held on June 14, 2011. of Directors, approves the annual accounts and decides Remuneration of the members of the Nomination Com- such other matters which by law, by separate proposal mittee will be determined by the General Meeting. Infor- or according to the Company’s Articles of Association, are mation regarding deadlines for proposals for members to to be decided by the General Meeting. Shareholders will the Board of Directors and the Nomination Committee normally be able to vote on each individual candidate will be posted on Otello’s website. nominated for election to the Board of Directors, the Nomination Committee and any other corporate bodies Corporate assembly to which members are elected by the General Meeting. Otello does not have a corporate assembly as the employ- ees have voted, and the General Meeting in 2010 approved, The Board of Directors may decide to allow electronic that the Company should not have a corporate assembly. participation in General Meetings and will consider this before each General Meeting. The Board of Directors Appointed by Shareholders at the General Meeting, the The minutes from General Meetings will be posted on Board of Directors is the central governing mechanism the Company’s website within 15 days after the Gener- between shareholders and executive management. The al Meeting has been held. Information that a General members of the Board of Directors are selected in light Meeting has been held will be made public as soon as of an evaluation of the Company’s need for expertise, possible after the end of the meeting. capacity and balanced decision-making, and with the 76 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 77 aim of ensuring that the Board of Directors can operate ble for the oversight of the assets and business affairs of independently of any special interests and function ef- Otello in an honest, fair, diligent and ethical manner. The fectively as a collegial body. Members of the Board of Di- Board of Directors has adopted a Code of Conduct and rectors are encouraged to own shares in the Company. At the directors are expected to adhere to the standards of least half of the members of the Board of Directors shall loyalty, good faith, and the avoidance of conflict of in- be independent of the Company’s management and its terest that follow. The Code of Conduct should be read main business connections. Members of the Board of Di- and applied in conjunction with the Rules of Procedure rectors serve for a two-year period, or such shorter peri- as applicable at any time, and other rules and guidelines od as decided by the General Meeting, but directors may relevant to and adopted by the Board of Directors and / be re-elected. At least two of the shareholder-elected or the shareholders of Otello. members of the Board of Directors shall be independent of the Company’s main shareholder(s). The Board of Di- The Board of Directors has further established a Remu- rectors does not include executive personnel. The current neration Committee and an Audit Committee. Currently, Otello Board of Directors meets these criteria. the Remuneration Committee and the Audit Committee each consist of two members. According to the Code, a The annual report will provide information to illustrate majority of the members of each Committee should be the expertise of the members of the Board of Directors, independent from the Company. If the requirements for information on their record for attendance at board independence are not met, Otello will explain the reasons meetings and it will identify which members are consid- in our Annual Report. Currently, Silje Christine Augustson ered to be independent. (Chairperson) and Frank Blaker are members of the Audit Committee, and Shahzad Abid (Chairperson), and Frank Otello’s Board of Directors diligently performs its over- Blaker are members of the Remuneration Committee. The sight function and closely monitors major develop- requirements for independence are thus met. Further, ments. The principal tasks of the Board of Directors are according to the Public Limited Liability Companies Act, outlined below: at least one member of the Audit Committee shall have qualifications within audit or accounting, and in the Com- pany's view this requirement is met. • Ensuring compliance with applicable laws • Considering the interests of Otello’s different stake- holders The Audit Committee’s main responsibilities include fol- • Reviewing and guiding corporate strategy, major plans lowing up on the financial reporting process, monitoring of action, annual budget and business plans; setting performance objectives; monitoring implementation and corporate performance; and overseeing major capital expenditures. • Selecting, monitoring, and, when necessary, replacing key executives and overseeing succession planning • Reviewing key executive and Board remuneration • Monitoring and managing potential conflicts of interest of management, Directors and shareholders, including misuse of corporate assets and abuse in related party transactions. • Ensuring the integrity of Otello’s accounting and financial reporting systems, and that appropriate systems of control are in place. • Monitoring the effectiveness of the governance prac- tices under which it operates and making changes as needed • Overseeing the process of disclosure and communica- tions • A more in-depth description of the Board’s duties can be found in the Rules of Procedure section on the Otello website: https://www.otellocorp.com/ir/ board-of-directors/rules-of-procedure-for-the-board- of-directors-of-otello. the systems for internal control and risk management, having continuous contact with the appointed auditor, and reviewing and monitoring the independence of the auditor. The Board of Directors maintains responsibility and decision-making in all such matters. Please see be- low under the section “Remuneration of the Executive Personnel” for information regarding the tasks to be per- formed by the Remuneration Committee. The Board of Directors will consider carrying out self-evaluation processes, evaluating its work, perfor- mance and expertise annually. To the extent that such a process is carried out, it would normally also include an evaluation of the composition of the Board and the manner in which its members function, both individu- ally and as a group, in relation to the objectives set out for its work. Any report will be more comprehensive if it is not intended for publication. However, any reports or relevant extracts from there should normally be made available to the nomination committee. The Board of Directors will also consider whether to use an external person to facilitate the evaluation of its own work. In order to ensure a more independent consideration of matters of a material character in which the Chairman The Board of Directors is entrusted with and responsi- of the Board of Directors is, or has been, personally in- 78 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 79 volved, such matters will be chaired by some other mem- The Board of Directors carries out an annual review of established consisting of the CFO. The CFO’s tasks are, Other guidelines and policies among other things, to perform management’s risk as- As an extension of the general principles and guidelines, sessment and risk monitoring across the group’s activi- Otello has drawn up additional guidelines. ties, to administer the Company’s value-based manage- ment system and to coordinate planning and budgeting Information security guidelines processes and internal controls reporting to the Board of Otello has guidelines and information policies covering ber of the Board of Directors. the Company's most important areas of exposure to risk and its internal control arrangements. Risk management and internal control The Board of Directors has overall responsibility for the Executive Team management of the Company. This includes a responsi- Otello’s Board of Directors has drawn up instructions bility to supervise and exercise control of the Company’s for the Executive Team of the Company. The purpose of activities. The Board has drawn up the rules of procedure these instructions is to clarify the powers and responsi- for the Board of Directors of Otello. The purpose of these bilities of the members of the Executive Team and their rules of procedure is to set out rules on the work and duty of confidentiality. Directors and Executive Team. information security roles, responsibilities, training, con- tingency plans, etc. The finance department prepares financial reporting for the Group and ensures that reporting is in accordance with Investor relations policy administrative procedures of the Board of Directors of applicable laws, accounting standards, established ac- Otello is committed to reporting financial results and counting principles and the Board’s guidelines. The finance other relevant information based on openness and tak- department provides a set of procedures and processes ing into account the requirement for equal treatment of detailing the requirements with which local reporting all participants in the securities market. To ensure that units must comply. The Group has established processes correct information is made public, as well as ensuring and a variety of control measures that will ensure quality equal treatment and flow of information, the Company’s assurance of financial reporting. A series of risk assess- Board of Directors has approved an Investor Relations ments and control measures have been established in policy. A primary goal of Otello’s investor relations activ- Otello. The Board of Directors shall, among other things, The Executive Team conducts an annual strategy meet- ensure that the Company’s business activities are sound- ing with the Board of Directors. The strategy meeting ly organized, supervise the Company’s day-to-day man- focuses on products, sales, marketing, financial and or- agement, draw up plans and budgets for the Company’s ganizational matters, and the corporate development activities, keep itself informed on the financial position strategy for the Group. of the Company, and be responsible for ensuring that the Company’s activities, accounts, and asset management The Board of Directors has ensured that the Company has are subject to adequate control. In its supervision of the sound internal control and systems for risk management business activities of Otello, the Board of Directors will that are appropriate in relation to the extent and nature connection with the preparation of financial statements. ities is to provide investors, capital-market players, and shareholders with reliable, timely and balanced informa- ensure that: of the Company’s activities. The Company has performed a scoping of the financial risks in the Company and has established written control descriptions and process descriptions. The controls are executed on a monthly, quarterly or yearly basis, depending on the specific con- trol. The internal controls and systems also encompass the Company’s corporate values, ethical guidelines, and guidelines for corporate social responsibility. The Board of Directors carries out an annual review of the Compa- ny’s most important areas of exposure to risk and its in- ternal control arrangements. In 2023, all Board members confirmed that they had read and complied with the Code of Conduct during the term of their directorship. The CFO is responsible for (i) the ongoing financial re- tion for investors, lenders and other interested parties in porting and for implementing sufficient procedures to the securities market, to enhance their understanding of prevent errors in the financial reporting, (ii) identifying, our operations. • The Chief Executive Officer uses proper and effective management and control systems, including systems for risk management, which continuously provide a satisfactory overview of Otello’s risk exposure. • The control functions work as intended and neces- sary measures are taken to reduce extraordinary risk exposure. assessing and monitoring the risk of significant errors in the Group’s financial reporting, and (iii) implementing Remuneration of the Board of Directors appropriate and effective internal controls in accordance Remuneration for members of the Board of Directors is with specified group requirements and for ensuring com- a fixed annual sum proposed by the Nomination Com- pliance with local laws and requirements. All interim fi- mittee and approved at the Annual General Meeting. nancial statements are analyzed and assessed relative to The remuneration reflects the responsibility, qualifica- • There exist satisfactory routines to ensure the fol- low-up of principles and guidelines adopted by the Board of Directors in relation to ethical behavior, conformity to law, health, safety and working envi- ronment, and social responsibility. budgets, forecasts, and historical trends. tions, time commitment and complexity of the tasks in general. No members of the Board of Directors (or any Critical issues and events that affect the future develop- company associated with such member) elected by the ment of the business and optimal utilization of resources shareholders have assumed special tasks for the Com- are identified, and action plans are put in place, if necessary. pany beyond what is described in this document, and no such member (or any company associated with such • Otello has a competent finance department and The Group’s CFO is responsible for the Group’s control accounting systems, capable of producing reliable and functions for risk management and internal control. Otel- The Audit Committee oversees the process of financial member) has received any compensation from Otello reporting and ensures that the Group’s internal controls other than ordinary Board of Directors remuneration. and the risk management systems are operating effec- The remuneration of the Board of Directors has histori- tively. The Audit Committee performs a review of the cally not been linked to the Company's performance. The half-yearly and annual financial statements, which ulti- Company currently does not grant share options to the on-time financial reports lo publishes two interim financial statements in addition to the annual report. The financials are published on the Oslo Stock Exchange. Given the importance of providing accurate financial information, a centralized corporate control function and risk management function has been • Directives from the external auditor are obeyed and that the external auditor’s recommendations are given proper attention. mately are approved by the Board of Directors. members of the Board of Directors. Any change to the 80 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 81 remuneration of the Board of Directors is approved by press releases and stock exchange announcements, share the General Meeting. All remuneration to the Board of price and shareholder information, a financial calendar, Directors is disclosed in Note 3 to the Annual Report. an overview of upcoming investor events, and other relevant information. Members of the Board of Directors and/or companies with which they are associated will normally not take on Important events affecting the Company are reported im- specific assignments for the Company in addition to their mediately to the Oslo Stock Exchange in accordance with appointment as a member of the Board of Directors. If applicable legislation and posted on https://www.otello- they nonetheless do take on such assignments, this must corp.com/ir. All material information is disclosed to recipi- be disclosed to the full Board of Directors. The remuner- ents equally in terms of content and timing. ation for such additional duties shall be approved by the Board of Directors. The Board of Directors has further established an investor relations policy for contact with shareholders and others beyond the scope of the General Meeting. Remuneration of executive personnel A Remuneration Committee has been established by the Board of Directors. The Committee shall act as a prepa- Takeovers ratory body for the Board of Directors with respect to (i) The Board of Directors endorses the recommendations of the compensation of the CEO and other members of the the Code. Otello’s Articles of Association do not contain Executive Team and (ii) Otello’s corporate governance any restrictions, limitations or defense mechanisms on policies and procedures, which, in each case, are matters acquiring the Company’s shares. In accordance with the for which the Board of Directors maintains responsibility Securities Trading Act and the Code, the Board has ad- and decision making. opted guidelines for possible takeovers. Details concerning remuneration of the executive per- In the event of an offer, the Board of Directors will not sonnel, including all details regarding the CEO’s remu- seek to hinder or obstruct takeover bids for Otello’s activ- neration, are given in Note 3 to the Annual Report. The ities or shares. In such situations, the Board of Directors performance-related remuneration to executive person- and the Company's executive management have an in- nel has historically been subject to an absolute limit. The dependent responsibility to help ensure that sharehold- Board of Directors assesses the CEO and his terms and ers are treated equally, and that the Company's business conditions once a year. The guidelines on the salary and activities are not disrupted unnecessarily. The Board of other remuneration for executive personnel are clear and Directors has a particular responsibility to ensure that easily understandable, and they contribute to the Com- shareholders are given sufficient information and time pany's commercial strategy, long-term interests and fi- to form a view of the offer. Any agreement with the bid- nancial viability. The General Meeting is informed about der that acts to limit the Company’s ability to arrange incentive programs for employees, and, pursuant to sec- other bids for the Company’s shares will only be entered tion 6-16 b. of the NPLCA, an annual report regarding re- into where the Board believes it is in the common in- muneration for the Executive Team will be presented to terest of the Company and its shareholders. This shall normally arrange for a valuation from an independent The auditor will make himself available upon request for expert. The valuation should include an explanation, and meetings with the Board of Directors during which no will normally be made public no later than at the time of member of the executive management is present at least the public disclosure of the Board of Directors statement. once each year, as will the Board of Directors upon the auditor’s request. At meetings where the annual accounts the General Meeting. also apply to any agreement on the payment of financial compensation to the bidder if the bid does not proceed. Any financial compensation should normally be limited Information and communications Any transaction that is in effect a full disposal of the Com- are dealt with, the auditor shall report on any material pany’s activities should be decided by a General Meeting. changes in the Company’s accounting principles and key aspects of the audit, comment on any material estimat- Communication with shareholders, investors, and analysts to the costs the bidder has incurred in making the bid. is a high priority for Otello. The Company believes that objective and timely information to the market is a pre- Information about agreements entered into between requisite for a fair valuation of the Company’s shares and, the Company and the bidder that are material to the in turn, the generation of shareholder value. The Compa- market’s evaluation of the bid will be publicly disclosed ny continually seeks ways to enhance our communication no later than at the same time as the announcement of with the investment community. The Company's reporting an impending bid is published. Auditor ed accounting figures and report all material matters on The auditor participates in meetings of the Board of Direc- which there has been disagreement between the audi- tors that deal with the annual accounts, as well as upon tor and the executive management of the Company. The special request. Every year, the auditor presents to the Au- General Meeting is informed about the Company’s en- dit Committee a report outlining the audit activities in the gagement and remuneration of the auditor and for fees previous fiscal year and highlighting the areas that caused paid to the auditor for services other than the annual au- the most attention or discussions with management, as dit, and details are given in Note 6 to the Annual Report. well as a plan for the work related to the Company’s au- of financial and other information is based on openness and taking into account the requirement for equal treat- If an offer is made for the shares of Otello, the Board of ment of all participants in the securities market. Directors will make a recommendation as to whether the shareholders should or should not accept the offer. The dit. The Board of Directors will make sure that the auditor The Board of Directors has established guidelines in re- submits the main features of the plan for the audit of the spect of the use of the auditor by the Company’s execu- Company to the Audit Committee annually. The auditor tive management for services other than the audit. also reports at least annually on internal control observa- tions during the conduct of the audit, including identified weaknesses and proposals for improvement. Otello’s company website (https://www.otellocorp.com/ Board of Director's statement on the offer will make it ir) provides the investment community with information clear whether the views expressed are unanimous, and if about the Company, including a comprehensive investor this is not the case it will explain the basis on which spe- relations section. This section includes the Company’s cific members of the board have excluded themselves investor relations policy, annual and quarterly reports, from the board’s statement. The Board of Directors will 82 Otello Corporation ASA - Annual Report 2024 Otello Corporation ASA - Annual Report 2024 83 Otello Corporation ASA c/o Advokatfirma Schjødt Tordenskiolds gate 12 NO-0160 OSLO Tel: +47 9190 9145 www.otellocorp.com