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ArcticZymes Technologies — Annual Report 2020
Apr 27, 2021
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Annual Report
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Annual Report
www.arcticzymes.com
2020
Dear Shareholders
2020 was a transforming year for the Company achieving a new status as a pure enzymes company and rebranded under the new name of ArcticZymes Technologies. As ArcticZymes Technologies, our brand is strengthened and reflects the future direction of the Company.
At the beginning of the year, we made a promise to bring the group into profitability during 2020. We are proud to have achieved this with an EBITDA of NOK 45.4 million as well as strong sales growth of 106% (NOK 93.4 million in 2020 vs. NOK 45.2 Million in 2019). Both the therapeutics and combined molecular diagnostics (MDx)/molecular research segments have contributed towards annual growth. Furthermore, our expanding product range and customer base have been instrumental in fuelling underlying growth.
The coronavirus pandemic had a positive net impact on the business. Whilst not being part of the original 2020 business plan, the Company was nimble and opportunistic in capturing supply demands associated with coronavirus related sales. Such sales are expected to become an integral part of the underlying business in the future.
The divestment of the Biotec BetaGlucans subsidiary was successfully closed and forged new directions for both
Biotec BetaGlucans and ArcticZymes. This transaction thereby allows ArcticZymes Technologies to focus exclusively on the profitable enzyme business.
As a pure enzymes company, the outlook for 2021 will continue to be towards topline sales growth and increasing profitability, as well as investing to leverage the greater growth potential of the business. Ongoing investments in new infrastructure and talented personnel will be core to the Company´s organic growth strategy. New product launches will bring the Company closer to achieving its ambition in becoming Europe's leading one-stop-shop supplier for molecular enzymes. M&A activities will also be important to achieve this goal.
I would like to take the opportunity to thank our shareholders for your utmost support, our customers for your continued loyalty, our Board of Directors for your guidance and our greatest asset, all my colleagues at ArcticZymes Technologies who are dedicated and have worked relentlessly in achieving an outstanding performance.
Sincerely Jethro Holter CEO
Index
| Board of Directors' report 2020 | 05 |
|---|---|
| FInancial statements | 23 |
| Notes to the financial statements for 2020 | 29 |
| Financial statements — parent company | 53 |
| Notes to the financial statements for 2020 — parent company | 58 |
| Statement by the Board of Directors and CEO | 64 |
| Independent auditor's report | 65 |
Board of Diretors' report 2020
1. About ArcticZymes Technologies
ArcticZymes Technologies (hereinafter "ArcticZymes" or "the Company") is a Norwegian life science company focused on the development, manufacturing, and commercialization of novel recombinant enzymes for use in molecular research, In Vitro Diagnostics (IVD) and therapeutics. Listed on the Oslo Stock Exchange since 2005 originally under the [Biotec] ticker, as Biotec Pharmacon, the Company rebranded as ArcticZymes Technologies in June 2020 under the [AZT] ticker.
The Company is creating value from innovative enzyme technologies which capitalise on more than three decades of world-class research at the Arctic University of Tromsø and in collaboration with other partners to offer niche, high-quality products. ArcticZymes Technologies' products and capabilities are protected via a large portfolio of patents.
ArcticZymes Technologies ASA
ArcticZymes Technologies ASA is the holding Company providing support functions to the ArcticZymes AS subsidiary including distribution, administration, finance, IT and quality assurance. The headquarters and laboratories are located at the SIVA Innovation Centre in Tromsø Norway, while the production facilities are in adjacent premises. Most employees work in Tromsø except for most of the sales and marketing team who are located in Central Europe, the USA and Japan. In addition, the Company has established distribution centres in the United States and the Netherlands to serve its customers more efficiently.
2. ArcticZymes
Product Offering
ArcticZymes Technologies enzymes are primarily derived from cold-water marine species and organisms from other relevant environments. Each enzyme offers novel functionality to its customers.
Products offered include:
- Salt Active Nucleases (SAN) removal of nucleic acids during manufacturing of viral vectors, recombinant proteins, and other reagents. Also used in Next Generation Sequencing (NGS) and diverse molecular biology applications.
- Shrimp Alkaline Phosphatase (SAP) utilised in clean-up prior to Sanger sequencing and NGS processes.
- Cod UNG utilised in viral and other molecular diagnostic assays.
- Double-strand specific DNases and derived kits – enable a broad range of applications and manufacturing processes that require the specific removal of double stranded DNA.
- Polymerases enable technology development for life science, MDx (Molecular Diagnostics), NGS and Synthetic biology (i.e., building of artificial DNA and genomes).
- Proteinase direct lysis and nucleic acid sample prep (i.e., isolation of DNA from cells). Enable applications in microbiological diagnostics and liquid biopsies (i.e., DNA tests using blood samples).
- Ligases join DNA fragments together. Enable a broad range of molecular biology applications (e.g., synthetic biology, NGS and molecular diagnostics).
Markets & Technologies
The total market for molecular biology enzymes is estimated at USD 986 Million with a CAGR of 5 – 19 % depending on enzyme type.
The Company focuses its efforts in providing molecular biology enzymes into three attractive and growing market segments:
- Molecular Research
- Molecular Diagnostics (MDx)
- Therapeutics (gene therapy and vaccines)
Molecular Research & MDx
The combined molecular research and MDx market segment is served by common technologies and utilise the whole range of ArcticZymes products.
The classic and most common place technologies are PCR-based methods (Polymerase Chain Reaction) where their adoption is still growing. The majority of ArcticZymes enzymes are used to support PCR- based workflows.
Alternative amplification technologies such as LAMP (Loop-mediated isothermal AMPlification) are attracting great commercial interest. With the expiry of global patents in 2020, commercial diagnostic test developers are ready to exploit LAMP technologies to innovate the next generation of MDx tests. In particular, many academic institutes and companies have already started to exploit LAMP for the development of Covid-19 MDx assays during 2020. ArcticZymes is well positioned to serve such assay developers by purposely engineering its IsoPolTM Polymerases for optimal utility in LAMP. ArcticZymes has built a rich opportunity pipeline with many of the leading MDx test developers.
At the forefront of the industry are fast-paced innovations around Next Generation Sequencing (NGS) technologies with the prospect of wider adoption, accessibility, and clinical utility. All ArcticZymes´ existing enzymes as well as its pipeline innovations are attractive and represent integral key components for adoption into NGS technologies by leading international companies. Other technology areas ArcticZymes serves through its enzymes include:
- Synthetic Biology a multidisciplinary area engaged in creating new biological parts, devices, systems, and DNA based therapeutics. ArcticZymes ligases (prototypes) and polymerases show great promise for future utility in this market.
- Liquid Biopsies DNA or other diagnostics tests are performed on blood or other body fluids. The market is growing rapidly (23 % CAGR) with an estimated market size of USD 1.4 billion. Unlike traditional invasive biopsies, liquid biopsies require a whole new set of molecular techniques to overcome the challenges of isolating very small amounts of DNA and amplifying it sufficiently to allow diagnosis. ArcticZymes´ proteinase, DNases, and SAN enzymes are already supporting customer efforts in developing such technologies.
Sales in the combined molecular biology and MDx market segment continue to grow. The key contributors to annual growth include:
- An expanding and synergistic product portfolio which serves a broadening base of over 200 customers.
- The Covid-19 pandemic also had a positive impact where numerous existing and new customers have integrated ArcticZymes´ enzymes into their COVID-19 diagnostic tests. An estimated NOK 26 million of product sales can be attributed to such sales during 2020.
Overall, the segment achieved 67 % annual growth and a contribution of 59 % towards total sales during 2020.
Therapeutics – Gene Therapy & Vaccines
ArcticZymes´ business towards serving manufacturers of viral-based gene therapies and vaccines is a relatively new business. All our customers are still in the early stages of their development programs. The Salt Active Nuclease (SAN) portfolio optimally serves customers who utilise SAN for cleaning and removing of unwanted DNA from therapeutic viruses such as Adeno-Associated Virus (AAV) and Lentivirus. This renders them safe for use in patients and greatly mitigates the risk of adverse effects.
Collectively AAV and Lentivirus represent twothirds of the vector technologies utilised in the manufacturing of gene therapies. With only two enzymes, SAN HQ and M SAN, the Company can capitalise on the most commonly utilised vector technologies.
The therapeutics segment is supporting over 100 customers. Most customers are gene therapyrelated and represent a mix of academic/hospital laboratories, small/medium biotech companies, contract manufacturing organisations (CMOs) and large Pharma. For viral vaccines, the business is more associated with medium/large companies. Several companies have integrated the SAN enzymes into their Covid-19 vaccine development programs such as ReiThera in Italy. Overall, such initiatives made a small 5 % contribution to therapeutic-related sales because customers are still in the early phases of vaccine development.
Sales to the therapeutics market have grown rapidly since 2016. Overall, the segment achieved 216 % annual growth and a contribution of 41 % towards total sales during 2020.
Customer Focus
The vast majority of ArcticZymes´ commercial efforts continues to be towards growing and driving long-term business-to-business (B2B) relationships. Today B2B customers represent 98 % of total sales.
The key advantage in serving B2B customers is the investment customers put into integrating ArcticZymes´ enzymes into their kits/products and manufacturing processes. Once customers have commercialised their products, they have a product life cycle of 5 - 10+ years which translates into mutual long-term value.
Quarterly sales to B2B customers continue to fluctuate. Such fluctuations are normal and will always be inherent risk in the business irrespective of its size. However, the business has experienced annual sales growth for the last 6 consecutive years. The Company´s strategy and business activities are orientated towards accelerating year-on-year growth. Much of the annual growth in sales is through a combination of:
- An increasing customer base of over 300+ customers.
- Expanding product range with regular product introductions.
- Serving the three aforementioned growing market segments.
ArcticZymes has local business development and customer support representatives in Europe, North America, and Asia to assist global business coverage. Local support and use of highly skilled business developers are a prerequisite for driving B2B sales and maintaining long-term customer relationships. Furthermore, efforts to expand into new geographies such as India and China are ongoing with new supply deals and partners.
To support sales activities, ArcticZymes has established strategically located warehouses and logistic centres in Europe and in the United States. These logistics centres have made it possible to build inventories and safety stocks, improve cost effectiveness of logistics, and most importantly, ensure on demand delivery to customers on a global basis. In supporting geographical expansion into China and Asia, ArcticZymes is in early discussions with potential logistic and warehousing partners.
Operations
All enzyme manufacturing is performed by recombinant production. Recombinant production is a powerful technology enabling the production of far more consistent, robust, and cleaner enzymes compared to natural sources. It also facilitates scalable manufacturing and caters for growing commercial demand.
In supporting the increase in product demand and an expanding product portfolio, ArcticZymes has been working on several production upscaling projects (see innovations section below). Furthermore, the Company has initiated a project to relocate enzyme production into a new and larger facility at the SIVA Innovation Centre. It will enhance ArcticZymes capacity and capabilities to serve IVD and cGMP requirements demanded by its growing customer base as well as support its rapidly expanding product range. New production lines, automation and new personnel will be part of a gradual investment, ensuring production grows ahead of commercial demand. It will take approximately 1 year before the expansion program is fully operational in the new facility.
The operations team has been expanded during the year with several new hires. Also restructuring is underway to ensure the Company optimally supports its customers in each of the market segments it serves.
For example, positive feedback from a three-day audit from a top tier pharmaceutical company has facilitated further optimization of operations to align with cGMP requirements. Following the audit, the customer started to source small quantities of the SAN HQ enzyme for a new therapeutic development project.
Innovations
ArcticZymes has an ambitious innovation pipeline to broaden its product range. It's goal over the next 2-3 years is to be able to provide its customers with a complete portfolio offering of synergistic enzymes.
Through both internal- and collaborative-projects with national and internal partners, ArcticZymes has a growing portfolio of new enzyme leads in the pipeline. National funding continues to support such initiatives through grants. ArcticZymes was awarded 2 new grants by Innovation Norway to advance innovation efforts around COVID-19.
Furthermore, EU funding has contributed towards development of the innovation pipeline. The Horizon 2020 funded Virus-X project was successfully concluded. Several commercially attractive prototypes resulting from the project will fuel ArcticZymes product development pipeline over the next few years.
Key innovation achievements during 2020 include:
- Launched a new formulation of dsDNase to support new business opportunities.
- Filed a new patent application related to novel ligases. The ligase offers desirable features specifically requested by customers which are not present in other commercially available ligases today.
- Successfully scaled up the production batch size of the Cod UNG product by a 4-fold factor. This was necessary to capture the growing demand in molecular diagnostics and for entering new geographical territories.
- The SAN upscaling project progressed as planned. The first medium-scale pilot batch (100 L) successfully met the desired specifications. More importantly, it has aided the implementation of changes to infrastructure and tweaking of processes required before advancing to larger-scale SAN production (> 1000 L). Assuming all goes to plan, it is anticipated that ArcticZymes will have it first large-scale SAN HQ production batch commercially available during the 1st half of 2021.
- Other upscaling projects are ongoing IsoPolTM polymerases, proteinase and HL-dsDNase enzymes.
Innovation pipeline
Much of the internal efforts during 2020 have been towards progressing the innovation pipeline. We anticipate that several products will be ready to launch in 2021. These include:
- M SAN ELISA kit: Support sales of the M SAN enzyme to the therapeutic segment. M SAN is optimised for removing contaminating DNA from non-Adeno-Associated Viruses (AAV´s) such as Lentiviruses.
- Taq Polymerase: 1st thermostable polymerase optimised for robust utility in viral based PCR tests and compatible with our other enzymes.
- Reverse Transcriptase: Like Taq Polymerase it will be optimised for use in viral diagnostic assays for both PCR and LAMP based workflows.
- Other SAN products: Capture more of the value chain beyond gene therapy and vaccine production.
- Other enzymes: Several customer specific projects are ongoing which involve tweaking existing technologies (e.g., IsoPolTM polymerases).
Also, longer-term innovations are in progress including novel ligases, DNase-like enzymes, other novel polymerases and reverse transcriptases, and non-enzyme support products.
Similar to operations, efforts are underway to expand the R&D facilities at the SIVA innovation centre. It will allow the Company to capitalize on ramping up its innovation pipeline and supports its strategic objective in becoming European's leading one-stop-shop for molecular enzymes.
In the meantime, ArcticZymes has continued to hire personnel in R&D to support its innovation efforts. Overall, more than 40 % of the Company's personnel are engaged in R&D activities. Hence, ArcticZymes has a forward leaning stand towards investing to leverage the longer-term growth potential from its innovations.
Impact of Coronavirus Pandemic
Overall, the Coronavirus pandemic had a positive net impact on the business. Whilst not being part of the original 2020 business plan, the Company was opportunistic and able to capture NOK 26 million in coronavirus-related sales. Predominantly these revenues came from the molecular diagnostics segment, with a small contribution from the therapeutics segment.
Moving forward coronavirus related sales will be considered as an integral part of the underlying business.
Strategic Aspects
2020 was a defining year for ArcticZymes Technologies where its core enzyme business has been its main focus. Rebranding the Company to ArcticZymes Technologies and the divestment of the Biotec BetaGlucans AS subsidiary has strengthened the Company's brand and market position as a pure enzymes company.
The Company delivered on its promise to bring ArcticZymes Technologies into profitability during 2020. Furthermore, the recent development in financial performance and cash position offers the Company a forward leaning stance towards its organic and inorganic growth strategies.
The main and immediate focus has been towards organic growth. A key activity has been to kickstart the infrastructure expansion of R&D and operations which is expected to be completed within 2021. The project is well underway and progressing as planned. The expansion fits timely to cater for increasing commercial demand for Company's expanding product portfolio. Also, it will allow the Company to capitalize on ramping up its innovation pipeline.
Inorganic growth opportunities remain a focus for ArcticZymes. The Company will resume M&A activities later in 2021 whilst remaining opportunistic in the meantime.
M&A activities will resume later in 2021 and remain important to our longer-term strategic objectives.
3. Consolidated financial statements
Consolidated statement of profit and loss
The financial statements for the ArcticZymes Technologies group are prepared in accordance with International Financial Reporting Standards (IFRS). The ArcticZymes Technologies group had sales revenues of NOK 93.4 million in 2020, compared to NOK 45.2 million in 2019. These figures exclude revenues from the former subsidiary Biotec BetaGlucans AS, which was divested on 31. December 2020. Sales revenues for the enzyme side of the business grew 107 % compared to 2019, explained by good underlying growth as well as an estimated NOK 26 million in COVID-19 related revenues.
Net profit after tax for the Group was NOK 84.9 million compared to NOK -5.9 million in 2019. The enzyme segment had an operating profit of NOK 53.6 million versus NOK 12.6 million in 2019. Unallocated corporate overhead expenses for 2020 were NOK 8.6 million compared to NOK 7.7 million in 2019, where the increase is primarily driven by less distribution of internal expenses.
Total recognised expenses for R&D within the Group in 2020 was NOK 19.0 million, compared to NOK 10.6 million in 2019.
R&D expenses are increased by NOK 8.4 million compared to 2019 explained by higher personnel expenses and expenses related to third party partners. None of the subsidiary's R&D expenses were capitalised in 2020.
The financial statements for 2020 are prepared under the assumption of going concern. The basis for this assumption is the Company's plans, capital situation and the long-term forecasts.
The Board is not aware of any matters of significant importance for the Company's status beyond what is disclosed in the financial statements.
Cash Flow
The Group had a cash flow from operating activities of NOK 46.9 million in 2020, compared to NOK 4.0 million in 2019. Cash flow from investing activities in 2020 was NOK 64.9 million against NOK -1.1 million in 2019. For 2020, investing activities is primarily explained by divestment of Biotec BetaGlucans AS. Net cash flow from financing activities was NOK -3.3 million compared to NOK -3.2 million in 2019.
Net change in cash during 2020 was NOK 108.5 million, compared to NOK -0.4 million in 2019.
Consolidated statement of financial position
Total equity for the Group amounted to NOK 196.3 million at the end of 2020, compared to NOK 46.5 million at the beginning of the year. Increase in equity is primarily explained by underlying performance and divestment of Biotec BetaGlucans AS. Equity ratio was 88 %. Cash and cash equivalents amounted to NOK 140.2 million per 31. December 2020, compared to NOK 31.3 million at the end of previous year. The Group has no interest-bearing debt.
The parent company
Sales revenues for the parent company Arctic-Zymes Technologies ASA was NOK 8.4 million in 2020. Net profit was a loss of NOK -2.9 million. Sales revenues are intercompany sales of services to the subsidiaries.
As of 31. December 2020, the Company has decided to recognise deferred tax assets as part of the consolidated financial position. The justification for this is the financial performance over the last 3 years, expected plans for the future and that it is probable that future profits will be offset against historic tax losses. This recognition will have a corresponding profit & loss effect of NOK 32.3 million for 2020.
The Board proposes that the 2020 loss in the parent Company ArcticZymes Technologies of NOK -2.9 million is covered by allocation from retained earnings.
4. Shareholder matters, ArcticZymes Technologies
ArcticZymes Technologies share ended 2020 with a closing price of NOK 63.6, compared to NOK 4.75 at the end of 2019. NOK 4.92 was the lowest closing price during the fiscal year, while the highest closing price was NOK 84.00 per share.
Share option programs have since 2010 been offered to certain employees in the Group. CEO Jethro Holter, CFO Børge Sørvoll and former CSO Rolf Engstad were granted a right to receive options for 200,000 shares each back in 2018. The share option program is described in note 14 to the financial statement.
Share options may in extraordinary cases be granted to the Board to attract and retain individuals with international industrial expertise and knowledge that will benefit the Company. Use of share options for Board members is not in compliance with the Norwegian Corporate Governance Board (NUES) recommendation on good corporate governance for companies listed on the Oslo Stock Exchange. The Nomination Committee recommended an award of 315,000 options to Board members at the AGM in 2020 and this was supported by the Company's shareholders.
As of 31. December 2020, the Company has 48,334,673 shares registered with a nominal value of NOK 1.00, distributed on 5,470 VPSregistered shareholders.
5. Risk
The Group is exposed to various types of financial and operational risks.
There are risks associated with development and sales in ArcticZymes. The Company has agreements with large multinational customers, but there are no purchase obligations attached to these agreements. The Company is actively entering new agreements to broaden the revenue base. Success relating to introduction of new products in the portfolio is not guaranteed and sales will be dependent on customer implementation.
Future changes in taxes and regulations may represent a risk for the Company having a global scope for both business areas.
The Group seeks to protect its intellectual property through patent protection. There will always be a risk that other companies may dispute such rights or that other players secure rights that could restrict the technological freedom. There is also a risk that the Group must take on costs to defend its rights against patent infringement.
ArcticZymes Technologies ASA is a small company, with few employees that are critical to the success of the Company's operations. Key personnel are involved in the development of products, technologies, production processes, quality control, purchasing, and marketing, as well as other activities of the Company. The Company is also dependent on recruiting new, qualified personnel. There is no guarantee that the Company will be able to retain key personnel or to be able to recruit new key personnel in the future.
Currency risks arise since most of the Company's revenues are in USD and Euro, while most expenses are accrued in NOK. A higher exchange rate for the USD and Euro against the Norwegian krone will affect the outcome in a positive direction, while lower rates will have the opposite effect. The Group's exposure to currency will in the long run be altered if new product releases provide a change in the currency mix.
The Company has no interest-bearing debt. Financial investments are carried out only in the form of bank deposits, certificates, or money market funds with short maturities. The Group is thus not very exposed to interest rate risk. The Company shall not be exposed to any financial risk in the stock market. The Group has limited credit risk and recognises no losses on accounts receivable neither in 2020 nor 2019.
Covid-19 has in general terms impacted the business positively in 2020, but there is no guarantee that the Company will continue to have positive contributions from Covid-19 moving forward. A reduction in Covid-19 testing is likely to have a negative effect on the molecular diagnostic segment, but the Company expects the Molecular Research segment to have an opposite effect when researchers are back in the research facilities again.
The Board considers the liquidity situation to be satisfactory, provided that the estimated cash flow from operations and investment activities follows established plans and budgets for 2021.
6. The working environment and staff
At the end of 2020, there were 35 full and part time employees in the Group. There were 7 employees in the parent Company ArcticZymes Technologies AS, 28 employees in ArcticZymes AS, an increase of 7 employees during the year.
6 employees in Biotec BetaGlucans subsidiary were taken out of the organisation per 31. December 2020.
Lost days due to sick leave in 2020 totalled 185 days, compared to 260 days in the previous year. Accumulated sick leave was 2.4 % compared to 3.6 % in 2019. No specific initiatives were taken during the year to influence the working environment. There were no work accidents causing injury to personnel or damage to machinery during 2020.
The Company is committed to recruit and develop employees of both genders. Equality between the genders is practiced in a way that men and women are considered equal regarding career opportunities and salary. At the end of the year, there were 19 women and 16 men employed within the Group. At the end of 2020, the Board consists of 3 directors, of which 2 are women. The employee-elected representative is a female
7. Natural environment
The Company's activities have limited negative impact on the environment. Excipients and chemicals that cannot be recycled in the production processes are collected and returned to an approved manufacturer for environmentally and sound recycling. Procedures for the collection of various types of waste from laboratories and for separation by source of waste from other operations are established. This is considered to have minimal impact on the environment. Use of energy in the production process is modest.
8. Principles of corporate governance
The Board has established principles for corporate governance in line with the Norwegian Accounting Act § 3-3b and the Norwegian Code of Practice for Corporate Governance. The Company is in breach with one of the principles described in NUES. See section 4; Shareholder matters for a description of this. A detailed description of these principles is published on the Company's website www.arcticzymes.com under About Us /Corporate information.
9. Corporate social responsibility
The Board of Directors in ArcticZymes has established and adopted ethical guidelines as well as guidelines for corporate governance in line with recommendations for this type of business. ArcticZymes considers the company's environmental contribution and impact to be important and will as far as possible include this in current reporting.
The Company has assessed established standards for sustainability reporting such as GRI and SASB. The actual internal conditions in the company are considered to be too small for these global standards to be used. ArcticZymes has therefore chosen to use only parts of the standards as input to areas that can be highlighted. ArcticZymes has not established separate guidelines, procedures or principles beyond what is presented in this section.
A summary of relevant topics with status for ArcticZymes at the end of 2020 is listed in the below.
Enzyme production
Raw materials for ArcticZymes's enzyme production are grown internally in closed systems by cultivating microorganisms that are genetically modified to make the enzymes. The Company thus does not harvest material from nature, nor does it seize natural areas for access to raw materials. Raw materials for internal cultivation are standard inorganic and organic chemicals and protein hydrolysates, a total of less than 100 kg / year. Emissions from upstream production (cultivation) are modest amounts of carbon dioxide and inactivated (autoclaved) microorganisms. After inactivation, organic waste that may contain microorganisms is delivered as hazardous waste to external recipient for correct destruction.
Raw material from the microorganisms undergoes a purification process that involves modest discharges of harmless chemicals, mostly sodium chloride in amounts below 100 kg / year. Potentially toxic / harmful waste (radioactive isotopes, solvents, etc.) from the laboratory is handled according to instructions in the HSE data sheet, marked and delivered to an external recipient for correct destruction.
ArcticZymes considers its production of enzyme products to have little or no environmental impact and is very proud of its sustainable production methods.
Shareholders
ArcticZymes is listed on Oslo Stock Exchange. At year end 5470 shareholders were registered by name in VPS. The 20 largest shareholders control 55% of the shares. 48,3 million shares are issued, and every share has equal voting right at the Annual General Meeting where the Board of Directors is appointed. Every shareholder may influence ArcticZymes strategic direction through the election of Directors to the Board, and shareholders interest in the company may be influenced by the company's performance. The Nomination Committee is obliged to consult major shareholders before proposing a nomination of directors to the Board at AGM. This far the shareholders have received no dividends from the Company.
Customers
ArcticZymes customers are widely spread in Europe, in America, and in Asia. The unique features of the Company's enzymes and the trusted manufacturing capabilities provides the highest quality & robustness demanded. To molecular kit manufacturers, molecular diagnostic companies & therapeutics, ArcticZymes is considered a critical raw material supplier of premium enzymes.
Employees
The company is strongly dependent on its employees. All innovation and manufacturing are supported by highly educated and committed personnel, as well the control and quality system. The internal procedures include involvement of employees, and the overall main expense item for the Company is employee wages.
The Company is committed to recruit and develop employment for both genders, and salaries are not influenced by gender.
Society
ArcticZymes is committed to develop socially valuable products, such as health products to improve people's life, and life science products making laboratory processes and diagnosis more efficient and cost effective. The Company avoids using scarce natural resources and emphasizes this by approving suppliers. Ethical guidelines are established, and all employees have confirmed individually in writing that they, through their position will work to prevent discrimination, promote equality, promote human rights and combat all forms of corruption.
Quality management system
ArcticZymes Technologies has implemented a comprehensive quality management system to ensure that products developed, manufactured, and sold are of high quality and are safe for users and patients. The quality management system is based on the principles of current good manufacturing practice (cGMP) and the requirements defined in the ISO 13485 standard for quality management systems in organizations involved in one or more stages of the life-cycle.
ArcticZymes Technologies' ambition is to be a leading supplier of safe, high-quality products, that meet customers' expectations as well as regulatory requirements in the markets where we operate. We achieve this ambition by maintaining an effective quality management system that systematically identify, manage and control our hazards and risks to continuously improve our performance in product development, manufacturing and sales.
The quality management system ensures that we:
- Select suppliers based on their ability to meet our requirements for safe raw materials according to our specifications.
- Conduct manufacturing and quality control using validated procedures and qualified equipment.
- Continuously follow up on any quality related deviations or customer complaints
- Assess and approve all changes that can potentially affect product quality or external or internal requirements, by following a defined change control procedure.
- Conduct periodic audits to confirm our own, as well as our suppliers' performance according to the certifications that we hold.
10. Outlook
ArcticZymes Technologies enters 2021 as a pure enzyme Company. The Company's outlook for 2021 will continue to be towards topline sales growth and increasing profitability. Furthermore, 2021 will be a year for investing to leverage the greater growth potential in the business. Investments in new and expanded facilities as well as talented personnel will be core to the Company´s organic growth strategy. New product launches during the year will bring the
Company closer to achieving the ambition in becoming Europe's leading one-stop-shop enzyme supplier over the next 2-3 years. M&A activities will also be important in achieving this ambition.
Overall, it is the Board's view that several important decisions and milestones were achieved during 2020 providing a good foundation for our 2021 ambitions.
The Board would like to thank all employees for their efforts in 2020.
Tromsø, Norway, 23. March 2021
Marie Ann Roskrow
Chairman
Volker Wedershoven
Director
Jethro Holter
CEO
Financial statements
Consolidated statement of profit & loss
- January till 31. December
| (Amounts in NOK 1 000) | Note | 2020 | 2019 |
|---|---|---|---|
| Sales revenues | 5 | 93 449 | 45 192 |
| Other income | 21 | 4 374 | 3 986 |
| Total income | 97 823 | 49 179 | |
| Change in inventory | 12 | 903 | 53 |
| Cost of goods | 12 | -2 034 | -1 252 |
| Personnel expenses | 18,20,23 | -34 564 | -32 171 |
| Depreciation and amortization | 6,7,8,22 | -2 639 | -2 547 |
| Other operating expenses | 19,20 | -16 696 | -13 670 |
| Total operating expenses | -55 029 | -49 587 | |
| Operating profit/loss(-) | 42 793 | -410 | |
| Financial income | 17 | 1 744 | 928 |
| Financial expense | 7,17 | -2 128 | -1 089 |
| Financial net | -384 | -161 | |
| Profit/loss(-) before income tax | 42 409 | -570 | |
| Income tax expense | 16 | 33 143 | |
| Net profit/loss (-) before discontinued operations | 75 552 | -570 | |
| Net profit from "Discontinued operations" | 24 | 9 356 | -5 356 |
| Net profit/loss (-) | 84 908 | -5 926 | |
| Net profit/loss(-) tributable to: | |||
| Non-controlling interests | 1 789 | 460 | |
| Equity holders of Arcticzymes Technologies ASA | 83 119 | -6 386 | |
| Earnings per share: | |||
| Basic EPS from net profit/loss | 10 | 1,76 | -0,12 |
| Diluted EPS from net profit/loss | 10 | 1,73 | -0,12 |
Consolidated statement of other comprehensive income
| (Amounts in NOK 1 000) | Note | 2020 | 2019 |
|---|---|---|---|
| Net profit/loss for the year | 84 908 | -5 926 | |
| Total comprehensive income | 84 908 | -5 926 | |
| Comprehensive income attributable to: | |||
| -shareholders of parent company | 83 119 | -6 386 | |
| -non-controlling interests | 1 789 | 460 |
Consolidated statement of financial position
As of 31. December
| (Amounts in NOK 1 000) | Note | 2020 | 2019* |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Deferred tax asset | 16 | 33 143 | |
| Machinery and equipment | 6 | 3 058 | 3 875 |
| Intangible assets | 8 | 420 | 674 |
| Lease assets | 7 | 10 515 | 14 469 |
| Other long-term assets | 5 | ||
| Total non-current assets | 47 140 | 19 018 | |
| CURRENT ASSETS | |||
| Inventory | 12 | 3 889 | 5 298 |
| Accounts receivable | 9,11 | 10 575 | 10 049 |
| Other receivables | 9,11 | 20 130 | 4 705 |
| Cash and cash equivalents | 9,13 | 140 178 | 31 289 |
| Total current assets | 174 771 | 51 341 | |
| Assets classified as "Assets held for sale" | 22 | 7 250 | |
| Total assets | 221 912 | 77 608 | |
| EQUITY AND LIABILITIES | |||
| EQUITY | |||
| Share capital | 10,14 | 48 335 | 48 335 |
| Premium paid-in capital | 151 039 | 151 039 | |
| Retained earnings | -5 009 | -154 233 | |
| Non-controlling interests | 1 966 | 1 336 | |
| Total equity | 196 330 | 46 476 | |
| LONG-TERM LIABILITIES | |||
| Lease liabilities interest-bearing | 7 | 9 595 | 12 764 |
| Total long-term lialilities | 9 595 | 12 764 | |
| CURRENT LIABILITIES | |||
| Dividends to non-controlling interests | 1 159 | ||
| Lease liabilities interest-bearing | 7 | 2 368 | 3 254 |
| Accounts payable | 9,15 | 3 456 | 3 960 |
| Other current liabilities | 9,15 | 9 004 | 10 438 |
| Liabilites attached to "Assets held for sale" | 22 | 716 | |
| Total current liabilities | 15 987 | 18 368 | |
| Total liabilities | 25 582 | 31 132 | |
| Total equity and liabilities | 221 912 | 77 608 |
* 31.12.2019 Includes discontinued operations (Biotec BetaGlucans AS)
Tromsø, 23. March 2021
Marie Roskrow Chairman
Volker Wedershoven Director
Marit Sjo Lorentzen Director – employee elected Jethro Holter CEO
Consolidated statement of changes in equity
- January till 31. December
| (Amounts in NOK 1 000) | Note | Share capital |
Premium paid-in capital |
Retained earnings |
Non controlling interest |
Total equity |
|---|---|---|---|---|---|---|
| Restated equity as of 01.01.2019 | 48 335 | 151 039 | -147 778 | 876 | 52 471 | |
| Comprehensive income 2019 | -6 386 | 460 | -5 926 | |||
| Employees' share options | 23 | -69 | -69 | |||
| Total transactions with owners | 0 | 0 | -6 455 | 460 | -5 995 | |
| Equity as of 31.12.2019 | 48 335 | 151 039 | -154 233 | 1 336 | 46 476 | |
| Comprehensive income 2020 | 73 762 | 1 789 | 75 552 | |||
| Dividends to non-controlling interests | -1 159 | -1 159 | ||||
| Divestment discontinued operations | 65 257 | 65 257 | ||||
| Result from discontinued operations | 9 356 | 9 356 | ||||
| TRANSACTIONS WITH OWNERS: | ||||||
| Employees' share options | 23 | 848 | 848 | |||
| Total transactions with owners | 0 | 0 | 149 224 | 630 | 149 854 | |
| Equity as of 31.12.2020 | 48 335 | 151 039 | -5 009 | 1 966 | 196 330 |
* 31.12.2019 Includes discontinued operations (Biotec BetaGlucans AS)
Consolidated statement of cash flow – Group
- January till 31. December
| (Amounts in NOK 1 000) | Note | 2020 | 2019* |
|---|---|---|---|
| CASH FLOW FROM OPERATING ACTIVITIES | |||
| Profit/loss(-) after tax | 84 908 | -5 926 | |
| Profit/loss adjusted for: | |||
| Taxes, not payable | 16 | -33 143 | |
| Depreciation and amortization | 6,8 | 7 398 | 2 565 |
| Depreciation IFRS 16 | 7 | 2 556 | 2 518 |
| Employees' options, share-based payment expense | 23 | 848 | -81 |
| Interest expense lease liability | 708 | 797 | |
| Changes in working capital: | |||
| Inventory | 12 | 1 932 | 739 |
| Accounts receivables and other receivables | 11 | -15 898 | 2 299 |
| Trade and other payables | 15 | -2 381 | 1 054 |
| Net cash flow from operating activities | 46 928 | 3 965 | |
| CASH FLOW FROM INVESTING ACTIVITIES | |||
| Investment in machinery and equipment | 6 | -1 912 | -688 |
| Investment in intangible assets | 8 | -412 | |
| Divestment of subsidiary (Biotec BetaGlucans) | 66 759 | ||
| Changes in long-term receivables | 4 | ||
| Net cash flow from investing activities | 64 851 | -1 100 | |
| CASH FLOW FROM FINANCING ACTIVITIES | |||
| Interest expense lease liability | -708 | -797 | |
| Payment and other adjustment on lease liabillities | 7 | -2 556 | -2 441 |
| Net cash flow from financing activities | -3 264 | -3 238 | |
| Net change in cash during the year | 108 516 | -372 | |
| Cash and cash equivalents as of 01.01 | 31 662 | 31 662 | |
| Cash and cash equivalents as of 31.12 | 140 178 | 31 289 |
*Cash flow for 2020/2019 includes discontinued operations (Biotec BetaGlucans AS)
Notes to the financial statements for 2020
Note 1 General information
ArcticZymes Technologies ASA (the Company) is a Norwegian life sciences company focused on specialised novel enzymes technology.
The ArcticZymes Technologies Group creates value from innovation in life science markets via its subsidiary ArcticZymes. Its technologies capitalise on more than three decades of world-class research at the Arctic University of Tromsø to offer niche and hightech products in several biotech segments.
ArcticZymes develops, produces and markets novel recombinant enzymes for use in molecular research, In Vitro Diagnostics (IVD) and therapeutics. The enzymes are primarily derived from cold-water marine species and organisms from other relevant environments.
Listed on the Oslo Stock Exchange since 2005 under the "AZT" ticker, ArcticZymes Technologies is headquartered in Tromsø, at the SIVA Innovation Centre.
The Board approved the consolidated financial statements on 23. March 2021.
Note 2 Summary of significant accounting policies
The following describes the principal accounting policies applied in the preparation of the consolidated financial statements. These principles have been consistently applied to all periods presented, unless otherwise stated.
Note 2.1 Financial reporting framework
The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations of IFRS as adopted by the EU. The consolidated financial statements are prepared on a historical cost basis.
The preparation of financial statements in conformity with IFRS requires the use of estimates. Furthermore, the application of the Company's accounting principles requires management to exercise judgment. For further information about this, see note 4.
The consolidated financial statements are prepared under the going concern assumption.
All new financial standards enforced over the last few years are implemented. The Company does not expect any new standards to have a significant impact on profit & loss or the financial position of the Company.
IFRS 16 Leases, was implemented 01. January 2019 and regulates matters relating to leased assets. It requires all leases to be recognised in the statement of financial position as a right to use asset with subsequent depreciation. At the commencement date, the Group recognised a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. The Group has separately recognised the interest expense on the lease liability and the depreciation expense on the right-of-use asset. The Group has adopted the new standard on the effective date using a full retrospective method and a 3%/4,6% discount rate. The lease period includes options. Overhead expenses on premises are excluded from calculations and is not recognised as a leased asset/liability. There is one contract relating to offices and lab at SIVA Innovation Centre covered in the calculations.
IFRS 15 Revenues from contracts with customers. The core principle is that revenues should be recognized dependent on the transfer of promised goods or services to the customer for an amount that reflects the consideration which should be received in exchange for those goods or services. The objective is to provide a five-step approach to revenue recognition that includes identifying contracts with customers, identifying performance obligations, determining transaction prices, allocating transaction prices to performance obligations, and recognizing revenue when or as performance obligations are satisfied. See note 5.
Note 2.2 Principles for consolidation Subsidiaries
The consolidated financial statements include the parent company ArcticZymes Technologies ASA and the 96% owned subsidiary ArcticZymes AS. The wholly owned subsidiary Biotec BetaGlucans AS was divested 31. December 2020. The consolidated statement of financial position 2019 includes Biotec BetaGlucans AS, but in the 2020 consolidated
statement of financial position, numbers for Biotec BetaGlucans AS are excluded according to IFRS 5. In the consolidated statement of profit and loss for 2020, figures associated with discontinued operations (Biotec BetaGlucans AS) is presented as a Net profit from discontinued operations. All internal transactions are eliminated from profit and loss calculations. Figures for 2019 has been recalculated accordingly for comparison purposes.
Reference is made to the parent company's note 9 for details on subsidiaries.
There is a presumption that if the group has the majority of the voting rights in an entity, the entity is considered as a subsidiary. To support this presumption and when the group has less than a majority of the voting or similar rights of an investee, the group considers all relevant facts and circumstances in assessing whether it has decision over the entity, including ownership interests, voting rights, ownership structure and relative power, as well as options controlled by the group and shareholder's agreement or other contractual agreements.
The assessments are done for each individual investment. The group reassesses whether it controls an entity if circumstances indicate that there are changes to control. Consolidation of a subsidiary begins when the group obtains control over the subsidiary and ceases when the group loses control of the subsidiary. Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of the group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated and may be considered as an impairment indicator for the asset transferred. Accounting policies of subsidiaries will be adjusted when deemed necessary to ensure consistency with the Group's accounting policies
Note 2.3 Foreign currency translation
Functional and presentation currency The accounts of the individual entities within the Group are measured by using the currency of the main economic environment in which the entity operates (its functional currency). The consolidated financial statements are presented in Norwegian kroner (NOK), which is the functional currency for all Group companies.
Transactions and financial position items
Foreign currency transactions are translated into the functional currency using the exchange rate at the transaction date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary items (assets and liabilities) in foreign currency at year-end, are recorded in the consolidated statement of profit & loss.
Foreign exchange gains and losses relating to loans, other operating expenses, cash and cash equivalents are presented (net) as financial income or expenses. Foreign exchange gains and losses relating to sales or cost of goods are presented (net) under sales revenues or cost of goods.
Note 3 Financial risk management
Note 3.1 Financial risk factors
Certain activities expose the Group to financial risks like market risk, credit risk, interest rate risk and liquidity risk. The Group's overall risk management wants to minimise potential adverse effects of any unpredictability of financial markets. For the reporting period, the Group had no interest-bearing loans. Financial instruments are not used for trading purposes. Interest-bearing investments beyond bank deposits can be made in certificates or bond funds with short maturities.
Note 3.1.1 Market risk Foreign currency risk
Revenues for 2020 to the Group are mainly denominated in USD and EUR; distributed 37% at USD and 58% at EUR. A majority of the Group's cost base is denominated in NOK with 70%, while expenses in EUR amounts to 18% and for USD 12%.
A weaker NOK against the USD or EUR will influence the operating profit in a positive direction, while a stronger NOK against the USD or EUR will have the opposite effect.
If NOK relative to USD was 5% stronger / weaker at 31 December 2020 and all other variables held constant, this would lead to a lower / higher operating profit of NOK 75 000 (2019: NOK 147 000). For EUR would such currency changes have affected the result by NOK 331 000 (2019: NOK 148 000). The impact on equity would be correspondingly. The calculated effect is based on 5% change in receivables and payables denominated in USD and EUR as of 31. December 2020.
The Group exchanges foreign currency into NOK when the balance of a foreign currency exceeds outstanding liabilities. The Group tries to minimise the balance of foreign currencies in its accounts. When applicable, the Group aims to match payment terms of revenues to corresponding expenses.
Note 3.1.2 Interest rate risk
The Group has little exposure to interest rate risk as the investment of liquid assets are in bank deposits, certificates and / or money market funds with short maturities. The Group has no interest-bearing debt.
Note 3.1.3 Credit risk
The Group is mainly exposed to credit risk related to accounts receivables. No single customer represents major outstanding credit records and the associated credit risk is considered to be low. The maximum exposure is expressed at the carrying value of accounts receivable.
Note 3.1.4 Liquidity risk
Based on planned activities and current cash position, the Group considers the liquidity risk to be low. There are no major investments or investments that will have a major impact on the Company's liquidity. If the Company moves forward with an M&A event, capital will need to be raised in order to reduce any potential liquidity risk in the short and medium term.
The Group has its cash in bank deposits or in interestbearing securities with low risk. A majority of cash is invested in Norwegian bank deposits and money market fund. At the reporting date, the Group had bank deposits and money market fund of NOK 140.2 million.
The Group's debt has maturity shorter than one year and will be settled at maturity:
| Maturity | 2020 | 2019 |
|---|---|---|
| < 3 months | 3 456 | 3 910 |
| 3 months – 12 months | 50 | |
| Total accounts payable | 3 456 | 3 960 |
| Accrued public fees and withdrawals |
12 531 | 13 692 |
| Total accounts payable and other current liabilities |
15 987 | 17 652 |
Note 3.2 Capital management
The Group's objectives when managing capital are to safeguard the continued operations of the Group to provide returns for shareholders and other stakeholders and to maintain an optimal capital structure to reduce capital costs. Presently, the Group is equity financed, but with positive cash flow in the future, the Group will consider its capital structure.
To improve the capital structure, the Group may issue new shares or sell assets. The Group has no long-term debt and pays no dividends to shareholders as long as the Group is in a development phase.
The table below shows the Group's net cash position as of 31. December:
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Cash and cash equivalents | 140 178 | 31 289 |
| Less: Restricted cash equivalents | -1 187 | -1 670 |
| Net cash position | 138 991 | 29 619 |
Note 4 Accounting estimates and judgments
Estimates and judgments undergo continuous evaluation based on historical experience and other factors, including expectations of future events believed to be reasonable under the present circumstances.
The Group makes estimates and assumptions concerning the future. Estimates and assumptions are based on parameters available when the financial statements were prepared, but these assumptions may change due to market changes or circumstances arising beyond the control of the Group. These changes are reflected in assumptions when they occur.
Estimates and assumptions that might have a significant risk for adjustment in the carrying value in the following years are addressed below:
Assessment of capitalisation of development:
Capitalisation of development expenses of a defined product assumes that future cash flows from sales of this product exceed the expenses of development. The expected future cash flows are still subject to uncertainties, and may, if reduced, result in impairment of capitalised development expenses. During most of the development phase of a new product there is a significant uncertainty whether the product under development will be suitable for commercialisation. Because of this, the development projects will usually not qualify or recognition as an intangible asset before the latest stages of the development phase. See note 20 for development projects and note 8 for projects that are capitalised.
Assessment of useful life of intangible assets:
Useful life of intangible assets are based on an assessment of each individual asset. Maximum expected useful lifetime for capitalised development expense is the remaining lifetime of any related patents.
Assessing start up for amortisation of intangible assets:
Amortisation of intangible assets related to capitalised development costs begins when the product is ready for distribution / sales, including the presence of necessary government approvals. Amortisation of other intangible assets starts with acquisitions.
Options
Options are measured at the fair value of the equity instruments at the grant date. Calculation of fair value involves estimates and assumptions. Measurement inputs include share price on measurement date, strike price, expected volatility, weighted average expected life of the instruments, expected dividends, and the risk-free interest rate. At the end of each reporting period, the group revises its estimates of the number of equity instruments that are expected to vest. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
Note 5 Segment information
Principles for accounting
The operating segments in these statements are consistent with the internal reporting provided to the chief operating decision maker. The operating decision maker, who is responsible for allocating resources and for assessing performance of the business segments, has been identified as the Board of Directors. An operating segment is engaged in providing products or services that are subject to risks and returns that are different from other operating segments.
The Group has divided its business into two operating segments; enzymes and beta-glucans. The segment enzymes consists of sales revenues and operating expenses associated with the
subsidiary ArcticZymes AS, while the segment beta-glucans is related to revenues and operating expenses of the subsidiary Biotec BetaGlucans AS. The parent company provides a range of administrative services to the subsidiaries. Invoicing is based on service agreements. Corporate overhead cost within the parent company remains unallocated.
The Group recognise revenues according to IFRS 15 when it transfers control over a good or service to a customer. Control is transferred to the customer according to the agreed delivery terms for each order. Delivery terms are based on Incoterms 2020 issued by International Chamber of Commerce, and the main term for the Company is FCA, where the customer arranges and pays for the main carriage. Control is transferred when the goods are collected by the carrier engaged by the customer.The goods are normally sold with standard warranties where the goods comply with agreed-upon specifications. AZT does not have any other significant obligations for returns or refunds. Freight services are included in sale of goods.
ArcticZymes sales revenues are enzymes for use in molecular research, In Vitro Diagnostics and therapeutics. Biotec BetaGlucans has products used for consumer- and animal health and within wound care.
Most of the goods are delivered to USA and Europe. Alle goods are invoiced when the Group transfers control of the goods to a customer, normaly when they leave the warehouse. The maturity of the invoices range from 30 to 90 days, depending on customer. Most of the revenues are from quotes or non binding supply agreements where the price has been agreed upon in advance. Other operating income are government tax grants and research grants.
Net profit/loss(-) from the operating segments:
| (Amounts in NOK 1 000) | 2020 | 2019 | ||||||
|---|---|---|---|---|---|---|---|---|
| Enzymes | Beta glucans |
Corporate | Total | Enzymes | Beta glucans |
Corporate | Total | |
| Sales revenues | 93 449 | 49 624 | 143 072 | 45 192 | 32 055 | 77 247 | ||
| Cost of goods | -1 131 | -20 800 | -21 931 | -1 199 | -17 701 | -18 900 | ||
| Gross profit | 92 318 | 28 821 | 121 139 | 43 993 | 14 354 | 58 347 | ||
| Other operating income | 4 374 | 213 | 4 586 | 3 986 | 3 162 | 7 148 | ||
| Operating expenses | -40 951 | -14 451 | -8 283 | -63 685 | -33 503 | -25 213 | -7 452 | -66 167 |
| Depreciation and amortization |
-2 161 | -7 550 | -243 | -9 954 | -1 925 | -2 900 | -259 | -5 083 |
| Operating profit/loss(-) | 53 580 | 7 033 | -8 526 | 52 087 | 12 551 | -10 597 | -7 711 | -5 756 |
| Net financial income | -250 | -102 | 29 | -323 | -56 | -248 | 134 | -170 |
| Profit/loss(-) before tax | 53 330 | 6 931 | -8 497 | 51 764 | 12 495 | -10 845 | -7 576 | -5 926 |
Assets, liabilities and investments distributed to the segments:
| (Amounts in NOK 1 000) | 2020 | 2019 | |||||
|---|---|---|---|---|---|---|---|
| Enzymes | Corporate | Total | Enzymes | Beta glucans |
Corporate | Total | |
| Assets * | 30 497 | 191 415 | 221 912 | 43 620 | 18 998 | 7 738 | 70 357 |
| Liabilities* | 15 779 | 9 804 | 25 582 | 12 093 | 11 911 | 6 412 | 30 416 |
* 2019: Assets and Liabilities excludes "Assets held for sale". See note 22 for further details.
Geographical distribution of sales revenues
| (Amounts in NOK 1 000) | 2020 | 2019 | ||
|---|---|---|---|---|
| Enzymes | Betaglucans | Enzymes | Betaglucans | |
| Norway | 112 | 19 160 | 98 | 19 321 |
| Europe | 45 685 | 13 545 | 27 158 | 10 507 |
| Asia/Australia/Africa | 7 207 | 1 772 | 2 503 | 857 |
| Americas | 40 445 | 15 148 | 15 434 | 1 369 |
| Total sales revenues | 93 449 | 49 624 | 45 192 | 32 055 |
Sales revenues from the largest customer within each segment in 2020: Beta-glucan segment NOK 14.5 million, enzymes segment NOK 13.6 million.
The consolidated statement of financial position 2019 includes Biotec BetaGlucans AS, but in the 2020 consolidated statement of financial position, numbers for Biotec BetaGlucans AS are excluded according to IFRS 5. In the consolidated statement of Profit & Loss for 2020, figures associated with discontinued operations (Biotec BetaGlucans AS) is presented as a Net profit from discontinued operations. All internal transactions are eliminated from proft and loss
calculations. Figures for 2019 has been recalculated accordingly for comparison purposes.
Reference is made to the parent company's note 9 for details on subsidiaries.
The Group's sales are impacted by COVID-19 effects. Since COVID-19 will continue in the forseeable future, effects will be presented as underlying business in presentations. Figures for COVID-19 effects are internal estimates based on historic purchasing patterns and communications with customers.
| (Amounts in NOK 1 000) | 2020 | Whereof COVID-19 related |
|---|---|---|
| Sales | 93 449 | 25 816 |
Other operating expenses related to the COVID-19 pandemic is only marginal and not reported as a seperate item
Note 6 Machinery and equipment
Principles for accounting
Machinery and equipment in the Group include primarily production equipment, office equipment and furnishing. These assets have a carrying value of historical cost less depreciation and amortisation. Acquisition cost includes expenses directly attributable to the acquisition of the asset.
Subsequent expenses are included in the asset's carrying value or recognised as a separate asset, when it is deemed probable that future economic benefits will benefit the Group and that expenses can be measured reliably. Other repair and maintenance expenses are recognised in the consolidated profit & loss statement for the period in which they are incurred.
Assets are depreciated by the linear method, depreciating the acquisition expense to the residual value over the estimated useful life, which are for each group of assets:
Machinery / Equipment 5-10 years Furniture and office equipment 2-5 years
The actual useful life and residual values of the assets are tested for impairment when there is indication of impairment and adjusted if necessary.
If the carrying value of an asset exceeds the estimated fair value, the carrying value is amortised immediately to fair value. Gains and losses on disposals are recognised as the difference between selling price less transaction costs and the carrying value.
| (Amounts in NOK 1 000) | Machinery | Equipment | Total |
|---|---|---|---|
| AS OF 01.01.2019 | |||
| Historic cost | 35 115 | 6 822 | 41 937 |
| Accumulated depreciation | -31 268 | -6 072 | -37 340 |
| Book value at 01.01.2019 | 3 847 | 750 | 4 597 |
| FINANCIAL YEAR 2019 | |||
| Addition | 660 | 29 | 689 |
| Depreciation | -1 124 | -286 | -1 410 |
| Book value at 31.12.2019 | 3 385 | 492 | 3 875 |
| AS OF 01.01.2020 | |||
| Historic cost | 35 775 | 6 851 | 42 626 |
| Accumulated depreciation | -32 392 | -6 358 | -38 750 |
| Book value at 01.01.2020 | 3 385 | 492 | 3 875 |
| FINANCIAL YEAR 2020 | |||
| Addition | 1 772 | 22 | 1 794 |
| Adjustment discontinued operations | -1 599 | -384 | -1 983 |
| Depreciation | -547 | -86 | -633 |
| Book value at 31.12.2020 | 3 011 | 44 | 3 058 |
| AS OF 31.12.2020 | |||
| Historic cost | 6 844 | 1 914 | 8 758 |
| Historic cost discontinued operations | 48 432 | 4 448 | 52 880 |
| Accumulated depreciation discontinued operations | -48 432 | -4 448 | -52 880 |
| Accumulated depreciation | -3 833 | -1 869 | -5 702 |
| Book value at 31.12.2020 | 3 011 | 44 | 3 058 |
Management considers that there are no impairment indicators at the group level, and that no write-downs of these assets are necessary.
Note 7 Leases
Principles for accounting
IFRS 16 Leases was implemented 01. January 2019 and regulates matters relating to leased assets and leased liabilities. The Lease standard requires lessees to recognise right-of-use asset and liabilities, which is a significant change from requirements under the previous accounting standard IAS 17.
At the commencement date of a lease, a lessee will recognise a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term ("right-of-use asset").
Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease or the group's incremental borrowing rate.
Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term.
At the commencement date, the Group recognised a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. The Group has separately recognised the interest expense on the lease liability and the depreciation expense on the right-of-use asset.
The Group has adopted the new standard on the effective date using a full retrospective method and a 3%/4,6% discount rate.
The lease period includes options. There is only one contract relating to offices and lab at SIVA Innovation Centre which is impacted by IFRS16.
Due to divestment of Biotec BetaGulucans on 31. December 2020, all IFRS16 calculations relating to production facilities at Nordøya is eliminated from leased assets and liabilites.
| (Amounts in NOK 1 000) | Lease assets |
|---|---|
| Historic cost | 21 555 |
| Accumulated depreciation including net present value | -5 101 |
| Book value at 31.12.2018 | 16 454 |
| Adjustment net present value 01.01 | 533 |
| Depreciation | -2 518 |
| Book value at 31.12.2019 | 14 469 |
| Adjustment net present value 01.01 | 208 |
| Adjustment discontinued operations | -1 606 |
| Depreciation | -2 556 |
| Book value at 31.12.2020 | 10 515 |
| Historic cost | 13 070 |
| Adjustment discontinued operations | 5 101 |
| Accumulated depreciation | -7 657 |
| Book value at 31.12.2020 | 10 515 |
| (Amounts in NOK 1 000) | Lease liabilities |
|---|---|
| Book value 31.12.2018 | 14 688 |
| Interest expense | 797 |
| Net present value adjustment 01.01 | 533 |
| Instalment 2020 presented under current liabilities | -3 254 |
| Book value at 31.12.2019 | 12 764 |
| Adjustment discontinued operations | -1 965 |
| Interest expense | 631 |
| Net present value adjustment 01.01 | 533 |
| Instalment 2021 presented under current liabilities | -2 368 |
| Book value at 31.12.2020 | 9 595 |
| Maturity analysis | 31.12.2020 | 31.12.2019 |
|---|---|---|
| Less than one year | 2 368 | 3 254 |
| One to five years | 9 881 | 14 851 |
| More than five years | 2 576 | 5 133 |
| Total undiscounted lease liabilities at 31.12. | 14 825 | 23 238 |
| Lease liabilites included in the statment on financial position at 31.12. | 11 963 | 16 017 |
| Current | 2 368 | 3 254 |
| Non-current | 9 595 | 12 764 |
| Summary of other leased assets presented in the consolidated Profit & Loss statement | 31.12.2020 | 31.12.2019 |
| Lease of IT equipment | 48 | |
| Overhead expenses related to premises | 921 | 494 |
| Total leased assets included in other expenses at 31.12. | 969 | 494 |
Short-term leases
The Group also lease computers and IT equipment with contract terms from 1 to 3 years. The Group has decided not to recognize leases where the underlying asset has a low value, and thus does not recognize lease obligations and lease assets for any of these
Note 8 Intangible assets
Principles for accounting
Research and development, patents and licenses Research expenses are expensed when incurred. Development of products are capitalised as intangible assets when:
- It is technically feasible to complete the intangible asset enabling it for use or sale.
- Management intends to complete the intangible asset and use or sell it.
assets. Instead, payments for leases are expensed when they occur.
Overhead expenses related to premises in the SIVA Innovation Centre contract are expensed when they occur.
- The Company has the ability to make use of the intangible asset or sell it.
- A future economic benefit to the Company for using the intangible asset may be calculated.
- Available technical, financial and other resources are sufficient to complete the development and use of or sale of the intangible asset.
- The development expense of the intangible asset can be measured reliably.
Intangible assets are depreciated by the linear method, depreciating the acquisition expense to the residual value over the estimated useful life, which are for each group of assets:
Own product development 5-10 years
Other development expenses are expensed when incurred. Previously expensed development costs are not recognised in subsequent periods. Capitalised
development costs are depreciated linearly from the date of commercialisation over the period in which they are expected to provide economic benefits. Capitalised development costs are tested by indication for impairment in accordance with IAS 36.
The Company has historically capitalised development expenses for rSAP, HL-dsDNase, SAN Elisa-kit, San HQ and Polymerases. Other development costs are expensed when incurred.
| (Amounts in NOK 1 000) | Own product development | Total |
|---|---|---|
| As of 01.01.2019 | ||
| Historic cost | 11 794 | 11 794 |
| Accumulated depreciation | -4 243 | -4 243 |
| Book value at 01.01.2019 | 7 551 | 7 551 |
| FINANCIAL YEAR 2019 | ||
| Addition | 412 | 412 |
| Book value transferred to "Assets held for sale" | -6 134 | -6 134 |
| Depreciation | -1 155 | -1 155 |
| Book value at 31.12.2019 | 674 | 674 |
| AS OF 31.12.2019 | ||
| Historic cost | 2 774 | 2 774 |
| Historic cost "Asset held for sale" | 9 432 | 9 432 |
| Accumulated depreciation | -8 234 | -8 234 |
| Accumulated depreciation "Assets held for sale" | -3 298 | -3 298 |
| Book value at 31.12.2019 | 674 | 674 |
| FINANCIAL YEAR 2020 | ||
| Addition | 0 | 0 |
| Amortization | 0 | 0 |
| Depreciation | -254 | -254 |
| Book value at 31.12.2020 | 420 | 420 |
| AS OF 31.12.2020 | ||
| Historic cost | 2 148 | 2 148 |
| Historic cost discontinued operations | 10 032 | 10 032 |
| Accumulated depreciation | -1 527 | -1 527 |
| Accumulated depreciation discontinued operations | -10 233 | -10 233 |
| Book value at 31.12.2020 | 420 | 420 |
"Assets held for sale" are fully amortized per 31.12.2020 as Biotec BetaGlucans was divested.
Note 9 Assets and liabilities
Principles for accounting
The Groups assets are initially measured at fair value. Transactions costs directly attributable to the financial assets are added to the value of the asset. The assets are subsequently measuread at amortised cost using the effective interest method, less any impairment losses. Financial assets are derecognised when the right to receive cash flows from the investments have expired or the Group have been transferred all riskand rewards to another party.
The Group´s financial assets and debts at amortised cost includes cash, accounts payable and accounts receivable. The Group recognises an allowance for expected credit losses (ECLs) for all debts instruments not held at fair value through profit or loss. ECLs are based on difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group
expects to receive, discounted at an approximation of the original effective interest rate.
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward -looking factors. See note 11.
The financial assets consits primarily of cash and cash equvalents obtained through equity issues and trade receivables.
The Group has no interest-bearing loans or debt other then leasing liabillities.
| (Amounts in NOK 1 000) | 2020 Assets at amortised cost |
2019* Assets at amortised cost |
|---|---|---|
| FINANCIAL ASSETS | ||
| Cash and cash equivalentes | 140 178 | 31 289 |
| Accounts receivable | 10 575 | 10 049 |
| Total financial assets | 150 752 | 41 337 |
| (Amounts in NOK 1 000) | 2020 Liabilities at amortised cost |
2019* Liabilities at amortised cost |
|---|---|---|
| FINANCIAL LIABILITIES | ||
| Leasing longterm | 9 595 | 12 764 |
| Accounts payable | 3 456 | 3 960 |
| Lease liabilities interest-bearing | 2 368 | 3 254 |
| Total financial liabilities | 15 419 | 19 978 |
*2019 figures excludes "Assets held for sale"
Note 10 Earnings per share
Principles for accounting
Earnings per share are calculated by dividing net profit/loss to ordinary shareholders by the weighted average number of shares outstanding during the year (see note 14).
Since the company's net profit was negative in 2019, the earnings per share and diluted earnings per share coincide.
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Net profit attributable to ordinary shareholders of the parent | 83 416 | -6 386 |
| Net profit attributable to non-controlling interests | 1 798 | 460 |
| Net profit | 85 214 | -5 926 |
| Weighted number of shares used for calculation of basic EPS (1 000 shares) | 48 335 | 48 335 |
| Dilution effect share based payment | 784 | |
| Weighted number of shares used for calculation of diluted EPS(1 000 shares) | 49 119 | 48 335 |
| Bacis and diluted earnings per share (NOK per share) | 1,76 | -0,12 |
| Diluted earnings per share (NOK per share) | 1,73 | -0,12 |
Note 11 Receivables
Principles for accounting
In determining the recoverability of receiveables, the company performs risk analysis considering the the type and the age of the outstanding receivable.
The Group is also considering historic customer payments in its evaluations.
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Accounts receivables | 10 575 | 10 049 |
| Provisions for estimated losses on accounts receivables | 0 | 0 |
| Sum accounts receivables, net | 10 575 | 10 049 |
| Research grants | 1 505 | 1 345 |
| Tax grants | 1 138 | 2 337 |
| Prepayments | 470 | 445 |
| VAT | 791 | 351 |
| Other receivables | 16 226 | 227 |
| Sum other receivables | 20 130 | 4 705 |
| Sum receivables | 30 705 | 14 754 |
Fair value for accounts receivable equals book value. There are no significant concentrations of credit risk, except for final settlement of MNOK 16.2 relating to divestment of Biotec BetaGlucans AS.
| Age breakdown of Accounts receivable per 31.12.2020: | |||||
|---|---|---|---|---|---|
| Not yet due | 1 – 30 days | 31 – 60 days | 61 – 90 days | Over 90 days | Total |
| 6 144 | 3 389 | 113 | 510 | 420 | 10 575 |
A majority of accounts receivables overdue on 31. December have been settled subsequently.
| Age breakdown of Accounts receivable per 31.12.2019: | |||||
|---|---|---|---|---|---|
| Not yet due | 1 – 30 days | 31 – 60 days | 61 – 90 days | Over 90 days | Total |
| 7 050 | 2 091 | 231 | 399 | 278 | 10 049 |
| Fair value of receivables by currency: | 2020 | 2019 |
|---|---|---|
| USD | 7 734 | 3 818 |
| EUR | 19 024 | 6 386 |
| NOK | 3 948 | 4 551 |
| Total receivables | 30 705 | 14 754 |
Accounts receivables arise from the sale of goods or services within the normal operations. Settlements that are due in 12 months or less are classified as current assets. If this is not the case, they are
classified as non current assets. The Group losses for 2020 is NOK 0 . The Group has evaluated potential losses on receivables based on historic losses /table below:
(Amounts in NOK 1 000)
| Days of maturity | Not overdue | 0-30 | 31-60 | 61-90 | Over 90- |
|---|---|---|---|---|---|
| Outstanding 31.12.2020 | 6 144 | 3 389 | 113 | 510 | 420 |
| Historical loss - % | 0 % | 0 % | 0 % | 0 % | 0 % |
| Future estimation of losses - % | 0 % | 0 % | 0 % | 0 % | 0 % |
| Expected loss | 0 | 0 | 0 | 0 | 0 |
| Provision for losses | 0 | 0 | 0 | 0 | 0 |
| Days of maturity | Not overdue | 0-30 | 31-60 | 61-90 | Over 90- |
|---|---|---|---|---|---|
| Outstanding 31.12.2019 | 7 050 | 2 091 | 231 | 399 | 278 |
| Historical loss - % | 0 % | 0 % | 0 % | 0 % | 0 % |
| Future estimation of losses - % | 0 % | 0 % | 0 % | 0 % | 0 % |
| Expected loss | 0 | 0 | 0 | 0 | 0 |
| Provision for losses | 0 | 0 | 0 | 0 | 0 |
Note 12 Inventory and cost of goods
Principles for accounting
Inventory are stated at the lower of acquisition expense and net realisable value. Acquisition expense is determined by using the first-in, first-out (FIFO) method. Value of finished goods and work in progress comprises the expense of design, raw
materials, direct labour, other direct costs and related production overheads (based on normal operating capacity). Borrowing costs are not included. Net realisable value is the estimated selling price less variable costs of completion and transaction expenses.
| (Amounts in NOK 1 000) | 2020 | 2019 * |
|---|---|---|
| Raw materials | 284 | 1 613 |
| Semi-finished goods | 639 | |
| Finished goods | 3 606 | 3 046 |
| Total inventories | 3 889 | 5 298 |
* 2019 includes discontinued operations (Biotec BetaGlucans AS)
Cost of goods
Total cost of goods include direct materials, services provided by contract manufactures and packaging suppliers, products freights and distribution costs.
Royalties for in licensing of technology and rights from other parties are excluded from cost of goods and included in other operating expenses.
Note 13 Cash and cash equivalents
Principles for accounting
Cash and cash equivalents consist of cash, bank deposits and other short-term liquid investments that can be converted into cash immediately and with a maturity no more than three months.
| (Amounts in NOK 1 000) | 2020 | 2019* |
|---|---|---|
| Cash | 129 461 | 20 178 |
| Money market fund | 9 530 | 9 439 |
| Deposits, restricted | 3 | |
| Tax withdrawal accounts | 1 187 | 1 670 |
| Total cash and cash equivalents | 140 178 | 31 289 |
* 2019 includes discontinued operations (Biotec BetaGlucans AS)
Note 14 Share capital, share premium, share options, and other equity
Principles for accounting
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options less taxes are recorded as a reduction in proceeds to equity. When purchasing own shares, the consideration paid including any transaction costs less tax, is deducted from equity (attributable to equity shareholders) until the shares are cancelled, reissued or sold.
The Group has a share-based option scheme. The fair value of the services received from the employees in return for the options granted is recognised as an expense in the consolidated profit & loss statement. Total expense for the options is accrued over the vesting period based on the fair
value of the options granted, excluding impact of any vesting conditions that are not reflected in the market. Criteria not reflected in the market, affect the assumptions about the number of options expected to be exercised. At the end of each reporting period, the Company revises its estimates of the number of options expected to be exercised. It recognises the importance of the revision of original estimates in the consolidated profit & loss statement with a corresponding adjustment in equity.
The net value of proceeds received less directly attributable transaction expenses are credited to the share capital (nominal value) and the share premium when the options are exercised.
| (Number of shares) | Shares | Whereof treasury shares |
|---|---|---|
| FINANCIAL YEAR 2019: | ||
| Per 01.01.2019 | 48 334 673 | |
| Purchase/sale own shares & issues | 0 | |
| Per 31.12.2019 | 48 334 673 | 0 |
| FINANCIAL YEAR 2020: | ||
| Purchase/sale own shares & issues | 0 | |
| Per 31.12.2020 | 48 334 673 | 0 |
All shares are fully paid up. Par value is NOK 1.00 per share.
The Annual General meeting held on 15 May 2019, granted three authorisations to the Board:
- To increase the share capital with up to 4,830,000 shares at par value. The authorisation may be used for cash capital increases or capital increases in connection with mergers but does not include non-cash share issues.
- To increase the share capital with up to 1,300,000 shares at par value. The authorisation may only be used in connection with capital increases relating to share schemes for associates.
- Authorisation to purchase up to 150,000 treasury shares with a nominal value of NOK 150.000. The authorisation may be used in connection with share schemes to associates or by offering shares to employees.
The Annual General meeting held on 14 May 2020, granted three authorisations to the Board:
• To increase the share capital with up to 4,830,000 shares at par value. The authorisation may be used for cash capital increases or capital increases in connection with mergers but does not include non-cash share issues.
- To increase the share capital with up to 1,300,000 shares at par value. The authorisation may only be used in connection with capital increases relating to share schemes for associates.
- Authorisation to purchase up to 150,000 treasury shares with a nominal value of NOK 150.000. The authorisation may be used in connection with share schemes to associates or by offering shares to employees.
Share options
Share options are intended as an incentive to stay with the company, and the assignment is graded according to the ability the employee is believed to have to contribute to a positive value development for the company's shares. In 2016, a total of 519,500 options were allocated to the employees. The options had a 2-year vesting period, and average strike is NOK 11.93. The 2016 options expired in 2019.
Per 31. December 2020, CEO Jethro Holter, CFO Børg Sørvoll and former CSO Rolf Engstad has an agreement giving them the right to receive 200 000 options each, with the following conditions.
| Awarded options | Option strike price | Options earned at share price |
|---|---|---|
| 40 000 | NOK 8.00 per share | NOK 11.00 per share |
| 40 000 | NOK 8.00 per share | NOK 14.00 per share |
| 40 000 | NOK 8.00 per share | NOK 17.00 per share |
| 40 000 | NOK 8.00 per share | NOK 20.00 per share |
| 40 000 | NOK 8.00 per share | NOK 23.00 per share |
The vesting period is 2,5 years (31.12.2018-31.05.2021), with an additional 1,5 year declaration period (until 31.12.2022).
Outstandig share options
| 2020 | 2019 | |||
|---|---|---|---|---|
| Average exercise price |
Number of share options | Average exercise price |
Number of share options | |
| As of 01 January | 0 | 11,93 | 362 000 | |
| Granted during the year | 10,19 | 315 000 | ||
| Expired | -362 000 | |||
| Outstanding at 31 December | 315 000 | 0 |
Expiry date, exercise price, and outstanding options at year end
| Expiry date | Average exercise price |
Number of share options 2020 |
Number of share options 2019 |
|---|---|---|---|
| 2019, 31. May | 11,93 | 362 000 | |
| 2025, 14. May | 10,19 | 315 000 | |
| Outstanding at 31 December | 315 000 | 0 | |
| Exercisable options at 31 December | 0 | 0 |
The fair value of employee rights to receive options are calculated according to the Black-Scholes method with barrier options. The most important parameters are share price at grant date ( NOK 3,52 per share), risk free rate (1,49%), expected term of 5 years, expected dividend yield (0%), strike (NOK 8,00 per share) and volatility last 5 years (55,25%).
The fair value of the boards options are calculated according to the Black-Scholes method. The most important parameters are share price at grant date (NOK 22.80 per share) , risk free rate (1,49%), expected term of 5 years, expected dividend yield (0%), strike (NOK 10,19 per share) and volatility last 5 years (59,02%). The fair value is expensed over the vesting period. Per 31.12.2020, a total of NOK 18.6 million had been expensed, of which NOK 0,8 million applies to 2020. The Company has no obligations, legal nor implied, to repurchase or settle the options in cash unless general assembly declines to renew its authorization to issue new shares.
| Ownership information: | Shares | Ownership |
|---|---|---|
| Skandinaviska Enskilda Banken AB | 4 259 790 | 8,81 % |
| Nordnet Bank AB | 2 763 271 | 5,72 % |
| Pro AS | 2 297 216 | 4,75 % |
| Avanza Bank AB | 2 266 784 | 4,69 % |
| Vinterstua AS | 2 066 165 | 4,27 % |
| Skandinaviska Enskilda Banken AB | 1 655 852 | 3,43 % |
| Clearstream Banking S.A. | 1 435 613 | 2,97 % |
| Danske Bank A/S | 1 386 478 | 2,87 % |
| Tellef Ormestad | 1 331 740 | 2,76 % |
| Belvedere AS | 1 215 684 | 2,52 % |
| Nordea Bank Abp | 766 314 | 1,59 % |
| Middelboe AS | 719 163 | 1,49 % |
| State Street Bank and Trust Comp | 717 009 | 1,48 % |
| Danske Bank A/S | 600 000 | 1,24 % |
| Dragesund Invest AS | 597 891 | 1,24 % |
| Avkast Invest AS | 568 566 | 1,18 % |
| DNB Markets Aksjehandel/-analyse | 467 795 | 0,97 % |
| Naudholmen AS | 461 000 | 0,95 % |
| SEB Cmu/Secfin pooled | 397 232 | 0,82 % |
| Nordnet Livsforsikring AS | 377 959 | 0,78 % |
| 20 largest shareholders aggregated | 26 351 522 | 54,52 % |
| 5450 other shareholders aggregated | 21 983 151 | 45,48 % |
| Total shares (5470 shareholders) | 48 334 673 | 100,00 % |
The 20 largest shareholders as of 31. December 2020
Note 15 Accounts payable and other current liabilities
Principles for accounting
The Group's liabilities consistes of accounts payable and other current liabilities are classified as "current liabilities". Accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers and
employees. Accountspayable is classified as current liability if payment is due within 12 months. If not, they are presented as long-term liabilities. Accounts payable are recognised initially at fair value and subsequensly measured at amortised cost using the effective interest method.
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Accounts payable | 3 456 | 3 960 |
| Dividends to non-controlling interests | 1 159 | |
| Lease liabilities interest-bearing | 2 368 | 3 254 |
| Other current liabilities | ||
| Accrued holiday pay, bonus, and salaries | 6 350 | 7 378 |
| Accrued public fees and withdrawals | 1 301 | 1 670 |
| Miscellaneous other accrued costs | 1 353 | 1 390 |
| Sum other current liabilities | 9 004 | 10 438 |
| Total accounts payable and other current liabillities | 15 987 | 17 652 |
Book value of accounts payable and other current liablities is equal to fair value.
Book value of accounts payable and other current liablities measured by currency:
| (Amounts in NOK 1 000): | 2020 | 2019 |
|---|---|---|
| NOK | 13 491 | 10 406 |
| EUR | 1 257 | 3 429 |
| USD | 1 111 | 877 |
| GBP | 104 | 144 |
| DKK | 2 787 | |
| SGD | 23 | |
| SEK | 9 | |
| Total accounts payable and other current liabillities | 15 987 | 17 652 |
Note 16 Deferred tax asset
Principles for accounting
The tax expense is comprised of current and deferred tax. Tax is recognised, except when it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income.
The tax expense is measured in accordance with the tax laws and regulations that are enacted at the balance sheet date.
Deferred tax is measured as temporary differences between tax values and consolidated accounting values of assets and liabilities, using the liability
method. If deferred tax arises from initial recognition of an asset or assets in a transaction that is not a business combination and that at the time of the transaction affects neither accounting nor taxable profit, it is not recognised. Deferred tax is determined using tax rates and laws that have been enacted or substantially enacted at the balance sheet date and are expected to apply when the deferred tax asset is realised, or the deferred tax liability is settled.
When considering recognition of profit loss carried forward as a deferred tax asset, there are objective criteria`s from IAS 12- 34/35/36 and ESMA that need to be considered before implementation.
There is strong evidence supporting recognition of profit loss carried forward as a deffered tax asset:
- The Group expect further growth in revenues and EBTDA level based on board discussions around the ArcticZymes business case moving forward
- With 2020 turnover and EBITDA levels in the future, the deferred tax asset will be fully utilised within 4 years ArcticZymes is expected to have taxable income for the next 3-4 years which can be offset,through Group
contribution against the tax loss in the parent company.
- The subsidiary Biotec BetaGlucans, which was a loss making business, was divested 31. December 2020
- The Group has an increasing and steady customer base with recurring revenues.
Based on listed evidence there are very limited negative criteria`s opposing recognition of deffered tax asset according to IAS 12 - 34/35/36 and ESMA.
| (Amounts in NOK 1 000): | 2020 | 2019 | Change |
|---|---|---|---|
| Calculation base deferred tax asset discontinued operations | -11 030 | -11 030 | |
| Non current assets | 473 | -553 | -1 026 |
| Other temporary differences | -212 | -217 | -5 |
| Gains and loss account | 10 609 | 13 262 | 2 652 |
| Total temporary differences | 10 094 | 1 281 | -8 813 |
| Discountinued operations | 11 030 | 11 030 | |
| Total temporary differences | 10 094 | 12 311 | 2 217 |
| Tax assessment loss carried forward | -160 744 | -457 424 | 296 680 |
| Discountinued operations | 252 285 | -252 285 | |
| Tax assessment loss carried forward | -160 744 | -205 139 | 44 396 |
| Calculation base deferred tax asset | -150 649 | -192 828 | 42 179 |
| Deferred tax asset, 22% | -33 143 | -42 422 |
|---|---|---|
| Profit before income tax | 42 409 | -5 926 |
| Non deductable expenses | 570 | 64 |
| Non taxable income | -800 | -2 342 |
| Changes in temporary differences | 2 217 | -2 366 |
| Profit before tax loss carried forward | 44 396 | -10 570 |
| Deffered tax loss carried forward | -44 396 | -10 570 |
| Tax base | 0 | 0 |
| Change in deferred asset | 33 143 | |
| Tax expense | 33 143 | 0 |
Note 17 Financial income and expense
Principles for accounting
The Groups's interest income and expenses mainly relates to interest received on bank deposits, lease liabilities and short-term interest rate funds. Net currency relates to gains and losses on settlements of other expenses and bank accounts.
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Interest income | 349 | 800 |
| Net currency loss(-)/gain | -22 | 128 |
| Interest expense lease liabilities | -631 | -697 |
| Other financial expense | -80 | -392 |
| Total financial income and expense, net | -384 | -161 |
Note 18 Personnel expenses
Principles for accounting
Payroll and related expenses are recognised in the statement of profit and loss in the period which the related costs are incurred or services are provided.
The Group has a defined contribution plan for all employees in Norway compliant to requirements for compulsory occupational pension in Norway under which the Group pays a fixed percentage
contribution of members' salaries. The Group has no further payment obligations once the contributions are made.
The Group recognises liabilities and expenses for bonuses based on a review of key personnel achievement. The Group recognises a provision for bonuses based on contractually and probable liabilities.
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Salaries | 29 888 | 28 094 |
| Employer's social security contribution | 1 620 | 1 709 |
| Employees options, share-based payment expense | 848 | -81 |
| Pension costs | 900 | 879 |
| Other benefits | 1 307 | 1 571 |
| Total personnel expenses | 34 564 | 32 171 |
| Numbers are adjusted for discontinued opartions | ||
| Number of employees at 31 December: | 35,0 | 32,0 |
| Number of FTEs: | 30,9 | 27,1 |
The employer's contribution to the plan is 5% for salaries between 0 G and 7.1 G, and 8% for salaries between 7.1 G and 12 G. In addition, employees
pay 2% of their salary to the pension plan. As of 31.12.2020 the Group paid for 28 members of the scheme.
Note 19 Other operating expenses
Principles for accounting
Expenses are recognised in the statement of profit and loss in the period which the related costs are incurred or services are provided.
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Marketing | 535 | 209 |
| Patent and licensing | 2 884 | 1 965 |
| Operating expenses of premises | 2 880 | 1 693 |
| Other operating expenses | 10 397 | 9 803 |
| Total other operating expenses | 16 696 | 13 670 |
Note 20 Research and development expenses
Principles for accounting
Development expenses are expensed when incurred. Previously expensed development costs are not recognised in subsequent periods. Capitalised development costs are depreciated linearly from the
date of commercialisation over the period in which they are expected to provide economic benefits. Capitalised development costs are tested by indication for impairment in accordance with IAS 36.
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| RESEARCH AND DEVELOPMENT EXPENSES: | ||
| Personnel expenses | 10 889 | 7 730 |
| Purchase of external services | 2 181 | 1 216 |
| Other operating expenses | 5 980 | 1 657 |
| Total research and development expenses, not capitalized | 19 049 | 10 603 |
According to the Group's accounting policies (note 8), no project met the criteria for capitalization in 2020.
Note 21 Other operating income
Government grants are recognised at fair value when it is reasonable sure that the grant will be received and that the Company will fulfil the conditions attached to the grant. The grants are recognised as other income in the period in order to match expenses they are intended to compensate.
Government grants relating to the purchase of fixed assets are recorded as a reduction in the carrying cost. They are expressed in the profit and loss statement through lower annual depreciation over the expected life of the relevant fixed assets.
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Government grants | 755 | 1 317 |
| Tax grants "Skattefunn" | 1 124 | 659 |
| Other grants | 2 496 | 2 009 |
| Total other operating income | 4 374 | 3 986 |
Description of awarded grants:
| (Amounts in NOK 1 000) | Grants expiry | 2020 | 2019 |
|---|---|---|---|
| FROM RESEARCH COUNCIL OF NORWAY (FORSKNINGSRÅDET): | |||
| X-press | 2020 | 755 | 1 317 |
| Cold ligases | 2022 | 57 | 34 |
| Development of components for RNA diagnostics | 2021 | 873 | |
| FROM MABIT: | |||
| Screening Pipeline for exploring a unique marine Fungi colletion | 2019 | 59 | |
| FROM INNOVASJON NORGE: | |||
| Increased protection against sea lice infestation with an activated immune system | 2020 | 7 | 39 |
| Upscaling of SAN-HQ manufacturing | 2020 | 595 | |
| Customer projects | 2020 | 132 | |
| FROM HORIZON 2020 (EU): | |||
| Virus X | 2020 | 833 | 1 878 |
| TAX GRANTS "SKATTEFUNN": | Annually | 1 124 | 659 |
| Total grants | 4 374 | 3 986 |
See note 11 Accrued revenues in association with grants in the financialy position
Note 22 Assets held for sale
Principles for accounting
In December 2019, the Group announced its intention to divest Woulgan and initiated a process with external business developers to find new owners for the wound care product. According to IFRS 5, the Group evaluated whether or not Woulgan met criterias for Assets held for sale and concluded that it should be defined as Assets held for sale. Following classification of Woulgan as an Asset held for sale, the Group conducted an inital measurement of Woulgan by impairment testing and concluded that no impairment was necessary as dicounted cash flow of Woulgan exceeds booked values relating to this asset.
The Group did not consider Woulgan as a seperate cash generating unit or that the product had material impact on the financial statments for the Group, hence it should not be considered as discontinued operations.
On 31. December 2020, Biotec BetaGlucans AS, including Woulgan, was divested to Danstar Ferment AG. See note 24 for complete details on discontinued operations.
Financial information relating to "Assets held for sale" in 2019 is presented in the tables below for information purposes.
| (Amounts in NOK 1 000) | 2019 |
|---|---|
| Revenues | 4 810 |
| Other revenues | 2 511 |
| Sum revenues | 7 321 |
| Operating expenses | -11 686 |
| Operating profit/loss (-) (EBIT) | -4 365 |
| Finanical income, net | |
| Profit/loss (-) before income tax (EBT) | -4 365 |
| Tax | |
| Net profit "Assets held for sale" | -4 365 |
| 2019 | |
| ASSETS CLASSIFIED AS "ASSETS HELD FOR SALE" | |
| Intangible assets | 6 134 |
| Inventories | 523 |
| Account receivables and other receivables | 593 |
| Total assets | 7 251 |
| LIABILITIES ATTACHED TO "ASSETS HELD FOR SALE" | |
| Accounts payable and other current liabilities | 716 |
Note 23 Related party disclosures
Former Director Martin Hunt was a member of the Board up to Annual General Meeting in 2019. Martin Hunt owns and operates Invictus Management Ltd in London. For services and expenses beyond his board remuneration, Invictus Management Ltd has invoiced NOK 0.04 million in 2019. Beyond this, the Group had no transactions with related parties.
| Remuneration of Board of Directors and Management: | |
|---|---|
| ---------------------------------------------------- | -- |
| (Amounts in NOK 1 000) | 2020 | 2019 | ||||||
|---|---|---|---|---|---|---|---|---|
| Salaries paid |
Bonus paid |
Pension costs |
Other benefits |
Salaries paid |
Bonus paid |
Pension costs |
Other benefits |
|
| Marie Ann Roskrow, Chairman | 425 | 425 | ||||||
| Volker Wedershoven, Director | 220 | 105 | ||||||
| Marit Sjo Lorentzen, Director / Employee | 120 | |||||||
| Ingrid Skjæveland, former Director / Employee |
30 | 75 | ||||||
| Inger Rydin, former Director | 180 | |||||||
| Martin Hunt, former Director | 70 | |||||||
| Arne Reinemo, former Director | 180 | |||||||
| Jethro Holter, CEO | 1 635 | 280 | 98 | 15 | 1 381 | 96 | 10 | |
| Børge Sørvoll, CFO | 1 340 | 138 | 101 | 11 | 1 224 | 96 | 11 | |
| Marit Sjo Lorentzen, Director Operations | 1 028 | 92 | 13 | 819 | 78 | 13 | ||
| Olav Lanes, VP R&D and applications | 972 | 84 | 11 | 932 | 81 | 11 | ||
| Christian Jørgensen, former CEO * | 2 499 | 42 | 3 | 2 572 | 96 | 10 | ||
* Salaries earned in 2020 were set aside in 2019 and paid out in 2020.
Shares owned or controlled by directors and senior management per 31.12.2020:
| Options | Shares | |
|---|---|---|
| Jethro Holter, CEO | * | 564 |
| Børge Sørvoll, CFO | * | 25 428 |
| Marit Sjo Lorentzen | 15 000 | 20 331 |
| Olav Lanes | 2 000 | |
* has the right to receive 200 000 options.
See note 14 in reference to share options to executives and management.
External auditor: fees and expenses ex VAT:
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Statutory audit | 330 | 201 |
| Attestation of tax papers | 12 | |
| Other attestation services | 43 | 3 |
| Other services beside auditing | 29 | 29 |
| Total auditing fees and expenses | 401 | 245 |
Note 24 Discontinued operations
(Amounts in NOK 1 000) Continued operations Discontinued operation Elimination Group before reclass, Reclas. to disc. operations Group Sales 93 449 49 624 143 073 -49 624 93 449 Other revenues 4 374 213 4 587 -213 4 374 Sum revenues 97 823 49 837 0 147 660 -49 837 97 823 Cost of goods 1 131 20 803 21 933 -20 803 1 131 Personnel expenses 33 118 8 172 -1 446 41 290 -6 726 34 564 Other operating expenses 16 115 6 280 -580 22 395 -5 699 16 695 Sum expenses 50 364 35 254 -2 026 85 617 -33 228 52 390 EBITDA 47 459 14 583 2 026 62 041 -16 609 45 432 Depreciation and amortization 2 405 7 549 -234 9 954 -7 315 2 639 Operating profit 45 055 7 034 2 260 52 087 -9 294 42 793 Financial income, net -220 102 -164 323 62 384 Profit/loss (-) before interest & tax 44 835 6 932 2 424 51 765 -9 356 42 409 Taxes 33 143 33 143 33 143 Net profit 77 978 6 932 2 424 84 908 -9 356 75 552
Figures adjusted for discontinued operations in the fiscal year 2020.
Figures adjusted for discontinued operations in the fiscal year 2019
| (Amounts in NOK 1 000) | Continued operations |
Discontinued operation |
Elimination | Group before reclass, |
Reclas. to disc. operations |
Group |
|---|---|---|---|---|---|---|
| Sales | 45 192 | 32 055 | 77 247 | -32 055 | 45 192 | |
| Other revenues | 3 986 | 3 162 | 7 148 | -3 162 | 3 986 | |
| Sum revenues | 49 179 | 35 217 | 0 | 84 395 | -35 217 | 49 179 |
| Cost of goods | 1 199 | 17 701 | 18 900 | -17 701 | 1 199 | |
| Personnel expenses | 27 794 | 16 594 | -4 377 | 44 388 | -12 218 | 32 171 |
| Other operating expenses | 13 161 | 8 618 | -509 | 21 779 | -8 109 | 13 670 |
| Sum expenses | 42 154 | 42 914 | -4 886 | 85 067 | -38 027 | 47 040 |
| EBITDA | 7 025 | -7 697 | 4 886 | -673 | -2 811 | 2 139 |
| Depreciation and amortization | 2 184 | 2 900 | -364 | 5 083 | -2 536 | 2 546 |
| Operating profit | 4 841 | -10 597 | 5 250 | -5 756 | -5 347 | -409 |
| Financial income, net | 78 | -248 | -239 | 170 | -9 | 161 |
| Profit/loss (-) before interest & tax | 4 919 | -10 845 | 5 489 | -5 926 | -5 356 | -570 |
| Taxes | 0 | |||||
| Net profit | 4 919 | -10 845 | 5 489 | -5 926 | -5 356 | -570 |
Cash flow statement of discontinued operations.
| (Amounts in NOK 1 000) | Note | 2020 |
|---|---|---|
| CASH FLOW FROM OPERATING ACTIVITIES | ||
| Profit / loss(-) before tax | 9 356 | |
| Profit / loss(-) adjusted for: | ||
| Depreciation | 377 | |
| Amortization | 6 134 | |
| Depreciation IFRS 16 | 803 | |
| Interest expense lease liability | 77 | |
| Changes in working capital | ||
| Inventory | 145 | |
| Account receivables and other receivables | 5 866 | |
| Trade and other payables | -2 606 | |
| Net cash flow from operating activities | 20 153 | |
| CASH FLOW FROM INVESTING ACTIVITIES | ||
| Investment machinery and equipment | -118 | |
| Changes in long-term receivables | 4 | |
| Net cash flow from investing activities | -114 | |
| CASH FLOW FROM FINANCING ACTIVITIES | ||
| Interest expense lease liability | -77 | |
| Payment and other adjustment on lease liabillities | -830 | |
| Net cash flow from financing activities | -907 | |
| Net change in cash during the year | 19 132 | |
| Cash and cash equivalents as of 01.01. | 335 | |
| Cash and cash equivalents as of 31.12. | 19 467 |
Note 25 Events after balance sheet date, 31. December 2020
There are no events of significance to the financial statements for the period from the financial position date to the date of approval; 23. March 2021.
Financial statements
–
parent company
Financial statement of profit & loss — parent company
- January till 31. December
| (Amounts in NOK 1 000) | Note | 2020 | 2019 |
|---|---|---|---|
| Sales revenues | 5 | 8 416 | 9 664 |
| Total revenues | 8 416 | 9 664 | |
| Personnel expenses | 7 | 9 799 | 12 954 |
| Depreciation and amortization | 2 | 243 | 259 |
| Other operating expenses | 7 | 6 900 | 4 162 |
| Total operating expenses | 16 942 | 17 375 | |
| Operating profit / loss (-) | -8 526 | -7 711 | |
| Financial income, net | 12 | 37 332 | 256 |
| Write-down /loss financial assets | 12 | -63 774 | |
| Financial expenses, net | 12 | -202 | -121 |
| Financial net | -26 644 | 135 | |
| Profit/loss(-) before income tax | -35 170 | -7 575 | |
| Income tax expense | 3 | 32 302 | |
| Net profit/loss(-) | -2 868 | -7 575 | |
| Transferrals | |||
| Transferred to other equity | -2 868 | -7 575 |
Financial statement of comprehensive income — parent company
| (Amounts in NOK 1 000) | Note | 2020 | 2019 |
|---|---|---|---|
| Net profit/loss for the year | -2 868 | -7 575 | |
| Other income & costs after tax | 0 | 0 | |
| Comprehensive income | -2 868 | -7 575 |
55
Statement of financial position — parent company
As of 31. December
| (Amounts in NOK 1 000) | Note | 2020 | 2019 |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Deferred tax asset | 3 | 32 302 | |
| Lease assets | 2 | 4 488 | 1 813 |
| Long term receivables | 2,1 | 6 699 | 11 469 |
| Investments in subsidiaries | 9 | 45 500 | 195 500 |
| Total non-current assets | 88 989 | 208 782 | |
| CURRENT ASSETS | |||
| Group receivables subsidiaries | 1 | 37 100 | 1 133 |
| Other receivables | 1,6 | 16 825 | 439 |
| Cash and cash equivalents | 4,6 | 137 567 | 28 207 |
| Total current assets | 191 492 | 29 779 | |
| Total assets | 280 481 | 238 562 | |
| EQUITY AND LIABILITIES | |||
| EQUITY | |||
| Share capital | 8 | 48 335 | 48 335 |
| Premium paid-in capital | 151 039 | 151 039 | |
| Other paid-in capital | 47 910 | 47 062 | |
| Retained earnings | -53 005 | -49 576 | |
| Total equity | 194 279 | 196 859 | |
| LONG-TERM LIABILITIES | |||
| Lease liabilities interest-bearing | 2 | 9 595 | 11 154 |
| Total long-term liabilities | 9 595 | 11 154 | |
| CURRENT LIABILITIES | |||
| Accounts payable | 6,11 | 1 172 | 115 |
| Public fees and tax withholdings | 6,11 | 445 | 484 |
| Liabilities subsidiares | 6,11 | 69 700 | 23 821 |
| Other current liabilities | 6,11 | 5 289 | 6 129 |
| Total current liabilities | 76 607 | 30 548 | |
| Total liabilities | 86 202 | 41 702 | |
| Total equity and liabilities | 280 481 | 238 562 | |
| Tromsø, 23. March 2021 |
Statement of changes in equity — parent company
- January till 31. December
| (Amounts in NOK 1 000) | Share capital | Premium paid-in capital |
Other paid-in capital |
Retained earnings |
Total |
|---|---|---|---|---|---|
| Equity as of 01.01.2019 | 48 335 | 151 039 | 47 143 | -42 004 | 204 513 |
| Employees' share options | -81 | -81 | |||
| Net profit for the year 2019 | -7 576 | -7 576 | |||
| Equity as of 31.12.2019 | 48 335 | 151 039 | 47 062 | -49 577 | 196 859 |
| Employees' share options | 848 | 848 | |||
| IFRS discontinued operations | -559 | -559 | |||
| Net profit for the year 2020 | -2 868 | -2 868 | |||
| Equity as of 31.12.2020 | 48 335 | 151 039 | 47 910 | -53 005 | 194 279 |
The Company's share capital consists of 48,334,673 shares as of 31.12.2020.
Statement of cash flow — parent company
- January till 31. December
| (Amounts in NOK 1 000) | Note | 2020 | 2019 |
|---|---|---|---|
| CASH FLOW FROM OPERATING ACTIVITIES | |||
| Profit / loss(-) after tax: | -2 868 | -7 576 | |
| Profit / loss(-) after tax adjusted for: | |||
| Taxes, not payable | 3 | -32 302 | |
| Amortization investment subsidiary | 12 | 63 774 | |
| Group contributions | 1, 10 | -37 100 | |
| Depreciation IFRS 16 | 2 | 243 | 259 |
| Employees' options, share-based payment expense | 7 | 848 | -81 |
| Interest expense lease liability | 1 | 88 | 105 |
| Changes in working capital | |||
| Account receivables and other receivables | 1, 10 | -15 253 | -565 |
| Trade and other payables | 6, 11 | 46 059 | 7 810 |
| Net cash flow from operating activities | 23 490 | -48 | |
| CASH FLOW FROM INVESTING ACTIVITIES | |||
| Divestment subsidiary | 86 226 | ||
| Changes in long-term receivables | 2 002 | 1 955 | |
| Net cash flow from investing activities | 88 228 | 1 955 | |
| CASH FLOW FROM FINANCING ACTIVITIES | |||
| Interest expense lease liability | -631 | -105 | |
| Payment and other adjustment on lease liabilities | -1 726 | -2 195 | |
| Net cash flow from financing activities | -2 358 | -2 300 | |
| Net change in cash during the year | 4, 6 | 109 360 | -392 |
| Cash and cash equivalents as of 01.01 | 4, 6 | 28 207 | 28 600 |
| Cash and cash equivalents as of 31.12 | 137 567 | 28 207 |
Notes to the financial statements for 2020 — parent company
ACCOUNTING PRINCIPLES
Arcticzymes Technologies ASA has decided to adopt simplified IFRS in the company accounts according to the Norwegian Accounting Act § 3-9. Simplified adoption of IFRS in the company accounts means that value estimates and accounting principles applied in the consolidated financial statements for the Group also apply to the parent company Arcticzymes Technologies ASA. Reference is made to the accounting principle note for the Group. Regarding lay-out and note information, a simplified
adoption of IFRS allows this to be in accordance with the Norwegian Accounting Act. The lay-out of the statement and the notes for the parent company are thus prepared in accordance with the above mentioned, with the exception of comprehensive income which is in accordance with IFRS.
Shares held in subsidiary companies are valued according to historical cost in the annual accounts.
Note 1 Receivables
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Group receivables subsidiares | 37 100 | 1 133 |
| Receiveables associated with divestment of subsidiary | 16 226 | |
| Other receivables | 599 | 439 |
| Total receivables | 53 925 | 1 572 |
The fair value of accounts receivable and other receivables equals book value.
Note 2 Leases
Principles for accounting
IFRS 16 Leases was implemented 01.01.2019 and regulates matters relating to leased assets. It requires all leases to be recognised in the statement of financial position as a right to use asset with subsequent depreciation. At the commencement date the Group recognised a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. The Group has separately recognised the interest expense on the lease liability
and the depreciation expense on the right-of-use asset. The Group has adopted the new standard on the effective date using a full retrospective method and a 3%/4,6% discount rate. The lease period includes options. Variable expenses are excluded from lease period and is not recognised. The contract is relating to offices and lab at SIVA Innovation Centre. Arcticzymes Technologies has subleased the majority of premises to subsidiaries.
| (Amounts in NOK 1 000) | Lease assets |
|---|---|
| Book value at 31.12.2018 | 1 568 |
| Adjustment net present value 01.01. | 503 |
| Depreciation | -259 |
| Book value at 31.12.2019 | 1 813 |
| Historic cost | 3 498 |
| Accumulated depreciation | -1 685 |
| Book value at 31.12.2019 | 1 813 |
| Adjustment discontinued operations | 3 030 |
| Adjustment net present value 01.01. | -112 |
| Depreciation | -243 |
| Book value at 31.12.2020 | 4 488 |
| Historic cost | 6 416 |
| Accumulated depreciation | -1 927 |
| Book value at 31.12.2020 | 4 488 |
| (Amounts in NOK 1 000) | Lease liabilities |
|---|---|
| Book value at 31.12.2018 | -12 375 |
| Interest expense | -697 |
| Net present value adjustment 01.01. | -421 |
| Instalment 2020 presented under current liabilities | 2 339 |
| Book value at 31.12.2019 | -11 154 |
| Interest expense | -631 |
| Net present value adjustment 01.01. | -177 |
| Instalment 2021 presented under current liabilities | 2 368 |
| Book value at 31.12.2020 | -9 595 |
Maturity analysis - contractual undiscounted cash flow
| (Amounts in NOK 1 000) | 31.12.2020 | 31.12.2019 |
|---|---|---|
| Less than one year | 2 368 | 2 339 |
| One to five years | 9 881 | 9 705 |
| More than five years | 2 576 | 5 109 |
| Total undiscounted lease liabilities at 31.12.2020 | 14 825 | 17 153 |
| Lease liabilites included in the statment on financial position at 31.12.2020 | 11 963 | 13 493 |
|---|---|---|
| Current | 2 368 | 2 339 |
| Non-current | 9 595 | 11 154 |
Note 3 Tax expense
Principles for accounting
When considering recognition of profit loss carried forward as a deferred tax asset, there are objective criteria`s from IAS 12- 34/35/36and ESMA that need to be considered before implementation. There is strong evidence supporting recognition of profit loss carried forward as a deffered tax asset:
- The Group expect further growth in revenues and EBTDA level based on board discussions around the ArcticZymes business case moving forward.
- With 2020 turnover and EBITDA levels in the future, the deferred tax asset will be fully utilised within 4 years. The subsidiary
- Biotec BetaGlucans, which was a loss making business, was divested 31.12.2020.
- The Group has an increasing and steady customer base with recurring revenues.
Based on listed evidence there are very limited negative criteria`s opposing recognition of deffered tax asset according to IAS 12 - 34/35/36 and ESMA. ArcticZymes Technologies has loss carried forward that can be utilized through the use of group contributions from the subsidiary Arcticzymes. The subsidiary is expected to have taxable income for the next 3-4 years which can be offset against the tax loss in the parent company. Therefore, deferred tax has been incorporated in the accounts as of 31. December 2020.
| (Amounts in NOK 1 000) | 2020 | 2019 | Change |
|---|---|---|---|
| TEMPORARY DIFFERENCES | |||
| Non current assets | -2 557 | -3 191 | 634 |
| Other temporary differences | 305 | 257 | 48 |
| Gains and loss account | -10 609 | -13 262 | 2 652 |
| Total temporary differences | -12 861 | -16 195 | 3 335 |
| Tax assessment loss carried forward | 159 688 | 192 182 | -32 494 |
| Calculation base deferred tax asset | 146 827 | 175 987 | -29 160 |
| Deferred tax asset, 22% | 32 302 | 38 717 | -6 415 |
| Profit before income tax | -35 170 | -7 576 | |
| Permanent differences | 27 230 | 12 | |
| Group contributions | 37 100 | ||
| Change temporary differeces | 3 335 | 4 249 | |
| Profit before tax loss carried forward | 32 494 | -3 315 | |
| Deferred tax loss carried forward | -32 494 | ||
| Tax base | 0 | 0 | |
| Change in deferred tax asset | 32 302 | ||
| Tax expense | 32 302 | 0 |
Note 4 Cash and cash equivalents
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Cash and cash equivalents | 136 896 | 27 334 |
| Tax withdrawal accounts | 672 | 873 |
| Total cash and cash equivalents, net | 137 567 | 28 207 |
The Company's bank deposits are included in the group account agreement with DNB. See note 13 for the Group showing the Group's net cash equivalents.
Note 5 Sales revenue
| (Amounts in NOK 1 000) | 2020 | 2019 | ||
|---|---|---|---|---|
| GEOGRAPHICAL DISTRIBUTION: | ||||
| Norway | 100 % | 8 416 | 100 % | 9 664 |
| Total sales revenues | 100 % | 8 416 | 100 % | 9 664 |
All revenues are associated with internal group sales.
Note 6 Financial assets and liabilities
The financial instruments in the financial position have been grouped as follows for subsequent measurement:
Assets
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| DEPOSITS AND RECEIVABLES AT AMORTISED COST: | ||
| Group receivables subsidiaries | 37 100 | 1 133 |
| Cash and cash equivalents | 137 567 | 28 207 |
| Total financial assets 31.12 | 174 667 | 29 340 |
Liabilities
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| LIABILITIES AT AMORTISED COST: | ||
| Leasing long term | 9 595 | 11 154 |
| Accounts payable | 1 172 | 115 |
| Liabilities subsidiares | 69 700 | 23 821 |
| Lease liabilities interest-bearing | 2 368 | 2 339 |
| Total finacial current liabilities 31.12 | 82 835 | 37 429 |
Note 7 Personnel expenses
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Salaries | 6 902 | 10 634 |
| Employer's social security contribution | 678 | 719 |
| Pension costs | 304 | 342 |
| Employees options, share-based payment expense | 848 | -81 |
| Other benefits | 1 067 | 1 341 |
| Total personnel expenses | 9 799 | 12 954 |
2020: 5.8 man-years, split between 2.9 men and 2,9 women. 2019: 6.8 man-years, split between 2.5 men and 4.3 women. The Company's pension scheme complies with the requirements in regard to compulsary occupational pensions in Norway.
pension plan compliant to requirements for compulsory occupational pension in Norway. The employer's contribution to the plan is 5% for salaries between 0 G and 7.1 G, and 8% for salaries between 7.1 G and 12 G. In addition employees pay 2% of their salary to the pension plan. As of 31.12.2020 the Company paid for 6 members of the scheme.
The Company has established a defined contribution
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Total pension costs | 304 | 342 |
External auditor: fees and expenses, ex VAT
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Statutory auditing | 259 | 169 |
| TAX provison | 12 | |
| Other services beside auditing | 29 | 28 |
| Total auditing expenses | 287 | 209 |
Remuneration of the Board of Directors and Management:
| (Amounts in NOK 1 000) | 2020 | 2019 | ||||||
|---|---|---|---|---|---|---|---|---|
| Salaries paid |
Bonus paid |
Pension costs |
Other benefits |
Salaries paid |
Bonus paid |
Pension costs |
Other benefits |
|
| Marie Ann Roskrow, Chairperson | 425 | 425 | ||||||
| Volker Wedershoven, Director | 220 | 105 | ||||||
| Ingrid Skjæveland, former Director / Employee |
30 | 75 | ||||||
| Marit Sjo Lorentzen, Director / Employee |
120 | |||||||
| Inger Rydin, former Director | 180 | |||||||
| Martin Hunt, former Director | 70 | |||||||
| Arne Reinemo, former Director | 180 | |||||||
| Jethro Holter, CEO | 1 510 | 280 | 98 | 15 | ||||
| Børge Sørvoll, CFO | 1 340 | 138 | 101 | 11 | 1 224 | 0 | 96 | 11 |
| Christian Jørgensen, former CEO* | 2 499 | 49 | 3 | 2 572 | 0 | 96 | 10 |
* Salaries earned in 2020 were set aside in 2019 and paid out in 2020.
See note 14 in the Group notes regarding share options to employees. There are no loans, prepayments or guarantees in favour of senior executives in the Company.
Note 8 Share capital
| (Actual number of shares, other amounts in NOK 1 000) | Number of shares | Whereof treasury shares |
|---|---|---|
| Share capital as of 31.12.2018 | 48 334 673 | |
| No changes during 2019 | 0 | |
| Share capital as of 31.12.2019 | 48 334 673 | 0 |
| No changes during 2020 | 0 | |
| Share capital as of 31.12.2020 | 48 334 673 | 0 |
The Annual General meeting held on 14. May 2020, granted three authorisations to the Board:
-
- To increase the share capital with up to 4,830,000 shares at par value. The authorisation may be used for cash capital increases or capital increases in connection with mergersdoes but does not include non-cash share issues.
-
- To increase the share capital with up to 1,300,000 shares at par value. The authorisation may only
be used in connection with capital increases relating to share option programs
- Authorisation to purchase up to 150,000 treasury shares with a nominal value of NOK 150.000. The authorisation may be used in connection with option programs or by offering shares to employees.
See Group note 14 for an overview over largest shareholdings.
Note 9 Investments in subsidiaries
| (Amounts in NOK 1 000) | Main office location | Share capital & premium | Shareholding | Book value | Net profit | Equity |
|---|---|---|---|---|---|---|
| ArcticZymes AS | Tromsø | 24 296 | 96 % | 45 500 | 44 727 | 48 610 |
ArcticZymes Technologies ASA divested its subsidiary Biotec BetaGlucans AS to Danstar Ferment AG on 14 December 2020 with final closing of the agreement on 31. December 2020. Biotec BetaGlucans AS was sold based on a Enterprice Valuation of NOK 70 million, cash free, debt free and with normalised working capital.
Final valuation with all adjustments is estimated at NOK 86,226 million.
Biotec BetaGlucans had a book value of NOK 150 million at 31. December 2019, hence the divesment resulted in a loss of NOK 63,774 million.
Note 10 Group internal accounts
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Receivables from subsidiaries as of 31 December | 37 100 | 1 159 |
| Liablitities to subsidiaries as of 31 December | 69 700 | 23 821 |
| Long-term receivables | 6 699 | 11 469 |
The Company has entered into service agreement with the subsidiary ArcticZymes AS where the subsidiary purchase services within management, finance, administration, quality assurance, IPR and business development. Liabilites to subisidiaries is a result of common Group liquidity. Arcticzymes Technologies ASA has long-term receivables from subsidiaries related to sublease of premises.
Note 11 Other current liabilities
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Accrued salaries and holiday payment | 2 077 | 4 273 |
| Liabilities to trade creditors | 1 172 | 115 |
| Liabilities to subsidiares | 69 700 | 23 821 |
| Other accrued costs | 3 657 | 2 339 |
| Total current liabilities | 76 607 | 30 548 |
Other accrued cost covers instalment on leasing by NOK 2.4 million in 2020 and NOK 2.3 million in 2019 Book value of current liabilities equals fair value.
Note 12 Financial income and expense
| (Amounts in NOK 1 000) | 2020 | 2019 |
|---|---|---|
| Group contributions | 37 100 | |
| Interest income | 232 | 256 |
| Total financial income | 37 332 | 256 |
| Net loss on currencies, not realised | 18 | -16 |
| Write-down/loss financial assets* | -63 774 | |
| Interest expense lease liabilities | -88 | -105 |
| Interest expense | -132 | -1 |
| Total financial expense | -63 976 | -121 |
| Total financial income and expense, net | -26 644 | 135 |
* Losses on financial assets are due to the sale of subsidiary Biotec Betaglucans AS on 31.12.2020.
Note 13 Events after balance sheet date, 31. December 2020
See Group note 25 for events after balance sheet date 31. December 2020
Statement by the Board of Directors and CEO
We confirm, to the best of our knowledge, that the financial statements for the period 1. January to the 31. December 2020 have been prepared in accordance with current accounting standards and that the information in the accounts gives a true and fair view of the Company and the Group's assets, liabilities, financial position and results of operations.
We also confirm, to the best of our knowledge, that the annual report includes a true and fair overview of the Company's and the Group's development, results and position, together with a description of the most important risks and uncertainty factors the Company and the Group are facing.
Tromsø, 23. March 2021 Board of Directors ArcticZymes Technologies ASA
| Marie Roskrow |
|---|
| Chairman |
65
66
ArcticZymes Technologies ASA
Sykehusveien 23 N-9294 Tromsø, Norway
- T (47) 7764 8900
- E [email protected]
- I www.arcticzymes.com