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Huddly AS Audit Report / Information 2020
3625_10-k_2021-03-04_ca1c3915-cdc3-447c-8cba-beefdc4b696e.pdf
Audit Report / Information
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Huddly
Table of Contents
Annual summary of consolidated result and directors report
Consolidated Financial Statements – Huddly Group
Statement of Comprehensive Income Statement of Financial Position as of December 31 Statement of Cashflow Statement of Changes in Equity Accompanying notes to financials
Financial Statements – Huddly AS
Statement of Comprehensive Income Statement of Financial Position as of December 31 Statement of Cashflow Statement of Changes in Equity Accompanying notes to financials
Independent auditor's report
Huddly Group
Annual Summary of Consolidated results for the year ending 31 December 2020
The board of directors present their annual summary of consolidated financial results and board report for the year ended 31 December 2020.
About the Company
Founded in Oslo, Norway in 2013, Huddly is a technology company that creates tools for team collaboration. Huddly combines expertise across the fields of design, hardware, software, and artificial intelligence. Huddly's smart cameras are designed to make it easier and better for people to communicate with each other. Huddly's solutions with industry-leading partners enable high-quality video experiences on all major collaboration platforms.
Huddly has its headquarters in Oslo and a subsidiary in Palo Alto, California, USA.
Overview of development and results
Huddly opened the first quarter of the year with a record quarter. The Huddly IQ range was expanded by making the microphone array optional. The new range consists of Huddly IQ and Huddly IQ with mic. A new contract with the Company's second manufacturer was also signed, following the Company's drive to dual source components and limit manufacturing risk.
In the second quarter the Huddly IQ was certified as a Microsoft Teams Room Peripheral for small meeting rooms and focus rooms for both Microsoft Teams and Skype for Business. The camera is also certified as a Microsoft Personal Peripheral for Microsoft Teams and Skype for Business.
The Company launched Huddly GO – Work from home kit in the third quarter of the year, making high-quality video accessible to more users.
Huddly Canvas later launched and is a Microsoft-certified smart camera that makes it easy to use whiteboards in video meetings. Huddly Canvas is natively integrated with Microsoft Teams Rooms and Zoom Rooms. It is certified as a Microsoft Teams content camera.
Two all-new smart cameras made by Huddly featuring in the Google Meet Series One, a new generation of meeting room devices from Google Cloud and Lenovo was the highlight in the third quarter of 2020. Camera XL and the Series One Smart Camera are designed to deliver an excellent video experience in a compact form factor, no matter the size of the room.
Crestron and Google continue to be strong partners and Huddly is progressing with other strategic accounts. In the final quarter of the year Huddly announced a new collaboration with Shure, legendary makers of audio products, to provide a new set of meeting room bundles and bring great new audiovisual experiences to meeting rooms across the world. To kick off the partnership, Shure will be offering the Huddly IQ AI-powered camera as an add-on in a variety of bundle choices. Huddly has continuously expanded the distributor network throughout 2020.
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Results and dividends
The Group had a net profit before tax of TNOK 100,755 in 2020 compared to a net profit before tax of TNOK 2,742 in prior year. Revenue increased by TNOK 178,533 in 2020 to TNOK 365,555. Total equity was TNOK 216,307 in 2020 and TNOK 116,831 in 2019. Total assets were TNOK 300,807 in 2020 and TNOK 181,847 in prior year.
The parent company, Huddly AS, had a net profit before tax of TNOK of 104,433 in 2020 compared to a net loss of (18,523) in prior year, of which all is allocated to retained earnings. Revenue increased by TNOK 180,191 in 2020 to TNOK 365,134. Total equity was TNOK 217,295 in 2020 and TNOK 116,218 in 2019. Total assets were TNOK 300,299 in 2020 and TNOK 180,862 in prior year.
No dividend payments have been made during 2020 and the directors do not recommend payment of a final dividend for 2020.
Directors
The directors who served during the year were:
Graham Spencer Williams Jostein Devold Per Kåre Haug Kogstad Kristian Kolberg
Going concern
The financial results for 2020 are complete and assume that Huddly is a going concern. The Board confirms that the annual results are accurate and reflect the Company's assets and liabilities as well as financial position and result.
Disclosure of information to auditor
Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
· so far as the director is aware, there is no relevant audit information of which the Company's auditor are unaware, and
· the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information; and
· this confirmation is given and should be interpreted with laws, regulations, and accounting standards in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations as adopted by the European Union (EU) and valid as of December 31, 2020.
Financial risk factors
The Group's activities are exposed to a variety of financial risks: market risk (including currency risk and price risk), credit risk and liquidity risk.
The Group assess the various risks mentioned above to be moderate at the time of this report.
Research and development
The Company has in 2020 received a grant from Skattefunn through The Research Council of Norway. The R&D costs are capitalized and amortized over 3 years.
Huddly
Workplace culture
The Board believes the workplace culture is satisfactory. There have been no accidents or injuries in 2020.
Equal opportunity
The Company has 71 employees, 57 men and 14 women. The Board is composed of 4 men. The Board has reviewed the number of employees and positions and found no cause to develop additional programs to address equal opportunity.
Environment
The Company does not pollute.
Events after the balance sheet date
Refer to Note 17 in the Group's consolidated financial statements.
There have been no other material events subsequent to the reporting period that might have a significant effect on these financial statements for 2020.
Auditors
Huddly have appointed Mazars, authorized statutory audit, tax and advisory firm, as the groups auditors for the financial year 2020.
Outlook 2021
Huddly's leading engineering and design, Huddly is well positioned to take continued part in the fast-growing Unified Communication and Collaboration market.
Huddly's Go-to-Market strategy in collaboration with strategic and channel partners will create a presence in relevant channels and drive growth.
Accelerated investments in products, sales, marketing, and support functions will accommodate for growth and extended product portfolio and software features.
Huddly has revolutionized the camera experience for huddle rooms with game-changing intelligence and expects hybrid working environments will have a positive effect on the company into 2021 and beyond.
The outbreak of the coronavirus (COVID-19) continues to have a material impact on the world's economy and the short and long-term effects are not fully understood. The coronavirus may affect the overall performance of the Group, including the Group's ability to develop its products and services and implement its business plan, and may result in delays, additional costs, and liabilities, which in turn could have a material adverse effect on the Group's results, financial condition, cash flows and prospects.
The board recognizes that this may affect activity but is comfortable the group has satisfactory liquidity at the time of presentation of the accounts and considers that at the date of signing the balance sheet there is no significant risk of the assumption of continued operation not being met.
Huddly
Oslo, March 2, 2021
Graham Spencer Williams Jostein Devold Per Kåre Haug Kogstad Chairman Board member Board member
Board member CEO
Kristian Kolberg Stein Ove Eriksen
Accounting policies – Huddly Group
Corporate information
Huddly AS (the "Company") and its subsidiary Huddly Inc. (the "Group") uses its technology to create tools for team collaboration. Huddly combines expertise across the fields of design, hardware, software, and artificial intelligence. Huddly's smart cameras are designed to make it easier and better for people to communicate with each other. Huddly's solutions with industry-leading partners enable high-quality video experiences on all major collaboration platforms.
The subsidiary mentioned above is included in the consolidated financial statements as the control criteria in IFRS 10 are met.
Huddly a public limited liability Company incorporated and domiciled in Norway. The address of its registered office is Karenslyst Allé 51, 0279 Oslo, Norway.
These consolidated financial statements were approved by the Board of Directors on March 2, 2021.
Basis of preparation
The consolidated financial statements of the Parent entity and the Group have been prepared in accordance with IFRS and IFRIC interpretations as adopted by the European Union (EU) and valid as of December 31, 2018. The consolidated financial statements have been prepared under the historical cost convention.
The presentation currency of the Group is NOK which corresponds to the functional currency of the main entity in the Group.
All numbers are in NOK thousands unless otherwise stated.
Future changes in standards
The consolidated financial statements could be affected by future changes in IFRS. The Group has evaluated any such to either be not applicable or with immaterial impact.
Principles of consolidation
Subsidiaries comprise all entities over which the Group has the power to control. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and can affect those returns through its power over the investee.
Intercompany transactions, balances, and unrealized gains on transactions between group Companies are eliminated. Unrealized losses are also eliminated but considered an impairment indicator of the asset transferred.
Principal rules for evaluation and classification of assets and liabilities
Assets intended for long term ownership or use, are classified as fixed assets. Assets relating to the operating cycle are classified as current assets. Receivables are classified as current assets if they are to be repaid within one year after balance sheet date. Equivalent criteria apply to liabilities. Current assets are valued at the lower of purchase cost and net realizable value. Current liabilities are reflected in the balance sheet at nominal value at establishment date. Fixed assets are valued at purchase cost. Fixed assets whose value will decline are depreciated on a straight-line basis over the asset's estimated useful life. Fixed assets are written down to net realizable value if a value reduction occurs that is expected to be permanent. Long-term liabilities are reflected in the balance sheet at nominal value on establishment date.
Cash and cash equivalents
The Group considers all highly liquid assets with an original or remaining maturity of three months or less at the date of acquisition to be cash equivalents.
Inventories
Inventories are stated at the lower of cost or market. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. The Group provides inventory write-downs based on excess and obsolete inventories determined primarily by future demand forecasts.
Accounts receivables and allowances for doubtful accounts
Trade receivables and other receivables are reflected in the balance sheet at nominal value less provision for estimated losses. Estimated losses are provided for based on an individual assessment of each debtor.
Foreign currency translation
Assets and liabilities of U.S.-subsidiaries that operate in a local currency environment, where that local currency is the functional currency, are translated to NOK at exchange rates in effect at the balance sheet date, with the resulting translation adjustments directly recorded to a separate component of equity through OCI. Income and expense accounts are translated at average exchange rates during the year. Remeasurement adjustments are recorded in other comprehensive income (loss).
Revenue recognition
The Group recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred as well as risk and control, the fee is fixed or determinable, and collectability is reasonably assured. In instances where final acceptance of the product is specified by the customer, revenue is deferred until all acceptance criteria have been met. The Group accrues for warranty costs, sales returns, and other allowances and as there are no historical history the Group has taken a conservative estimate until such history is established. Shipping and handling fees billed to customers are included in revenue, with the associated costs included in cost of sales. Revenue is shown net of value-added tax, estimated returns, rebates, and discounts and after eliminated sales within the Group.
Intangible assets – R&D
Costs to develop the Company`s products that are incurred subsequent to the establishment of technological feasibility are capitalized if significant and when it is probable that the expected future economic benefits that are attributable to the assets will flow to the entity and when the cost of the asset can be measured reliably. Intangible assets are measured initially at cost and amortized using the straight-line amortization method over the estimated useful life.
Government grants
Government grants are recognized in profit or loss on a systematic basis over the periods in which the entity recognizes as expenses the related costs for which the grants are intended to compensate. Grants related to R&D of capitalized fixed assets are recognized as reductions in capitalized costs.
Leases
The Group has recognized assets and liabilities for all material leases with a term of more than 12 months and recognized the corresponding depreciation of the lease assets separately from interest on lease liabilities in the income statement in line with IFR16 adopted standard.
Tax expenses
The tax expense for the period comprises current and change in deferred tax. Tax is recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operate and generate taxable income.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax asset and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities.
Financial risk factors
The Group's activities are exposed to a variety of financial risks: market risk (including currency risk and price risk), credit risk and liquidity risk. The Group assess the various risks mentioned above to be moderate at the time of this report.
Huddly Group
Consolidated Statement of comprehensive income 2020
| NOK '000 | |||
|---|---|---|---|
| Sales of goods | 365,555 | 187,022 | |
| Total revenue | 365,555 | 187,022 | |
| Cost of Sales | (159,712) | (89,218) | |
| Gross profit | 205,842 | 97,804 | |
| Salary costs | 1,2,3 | (40,014) | (36,724) |
| Sales and Distribution costs | (3,479) | (4,243) | |
| Depreciation and Amortization | 7,8 | (42,896) | (39,090) |
| Other costs | 1,4,7 | (14,432) | (15,308) |
| Total operating costs | (100,822) | (95,365) | |
| Operating result | 105,020 | 2,439 | |
| Interest income | 283 | 61 | |
| Other financial income | 10,546 | 2,067 | |
| Total finance income | 10,829 | 2,128 | |
| Interest expense | (8) | - | |
| Other financial expense | (15,086) | (1,825) | |
| Total finance expense | (15,095) | (1,825) | |
| Net financial income/(expense) | (4,266) | 303 | |
| Net profit before tax | 100,755 | 2,742 | |
| Tax expenses | 5 | (3,588) | - |
| Net Profit | 97,167 | 2,742 | |
| Other comprehensiv income | |||
| Foreign exchange gains/(losses) | 2,078 | (192) | |
| Total comprehensive profit for the year | 99,245 | 2,550 | |
| Earnings per share | |||
| Basic shares | 6 | 8.14 | 0.23 |
| Fully diluted shares | 6 | 6.72 | 0.19 |
Huddly
Huddly Group
Consolidated Statement of financial position at 31 December 2020
| Notes | 2020 | 2019 |
|---|---|---|
| 7 | 8,018 | 8,018 |
| 7 | 70,126 | 53,472 |
| 4,685 | ||
| - | ||
| 66,175 | ||
| 8, 16 | 9,437 | 6,160 |
| 9,437 | 6,160 | |
| 10 | ||
| - | 10 | |
| 72,344 | ||
| 9 | 3,238 | 406 |
| 10 | 59,315 | 40,014 |
| 11 | 18,233 | 15,099 |
| 55,518 | ||
| 53,985 | ||
| 53,985 | ||
| 207,156 | 109,503 | |
| 181,847 | ||
| 7 5 12 |
2,358 3,713 84,214 - 93,651 80,785 126,371 126,371 300,807 |
Huddly Group
Consolidated Statement of financial position at 31 December 2020
| Notes | 2020 | 2019 | |
|---|---|---|---|
| NOK '000 EQUITY AND LIABILITY |
|||
| Equity | |||
| Issued capital | 120 | 120 | |
| Share premium | 230,502 | 230,502 | |
| Other components of equity | 11,591 | 11,360 | |
| Total issued capital | 13 | 242,212 | 241,981 |
| Retained earnings | |||
| Retained earnings | (25,905) | (125,150) | |
| Total retained earnings | (25,905) | (125,150) | |
| Total equity | 216,307 | 116,831 | |
| Long term liabilities | 14 | 8,956 | 6,534 |
| Current liabilities | |||
| Accounts Payable | 42,571 | 39,230 | |
| Public dues | 17,352 | 6,239 | |
| Other short term liabilities | 15, 16 | 15,622 | 13,014 |
| Total Current Liabilities | 75,545 | 58,482 | |
| Total liabilities | 84,500 | 65,015 | |
| Total equity and liabilities | 300,807 | 181,847 |
Oslo, March 2, 2021
Graham Spencer Williams Jostein Devold Per Kåre Haug Kogstad Chairman Board member Board member
Board member CEO
Kristian Kolberg Stein Ove Eriksen
Huddly
Consolidated Statement of changes in equity 2020
| Not | |||||||
|---|---|---|---|---|---|---|---|
| Issued capital |
Share premium |
registered issued capital |
Other equity | Translation reserve |
Retained earnings |
Total equity | |
| Balance at 1 January 2019 | 118 | 230,502 | - | 4,277 | (1,202) | (126,498) | 107,196 |
| Registrered capital increase | |||||||
| Issue of share capital | 1 | ||||||
| Share-based payment to employees | 2,083 | ||||||
| Share repurchase | 5,000 | ||||||
| Loss for the year | 2,742 | ||||||
| Foreign exchange differences | (192) | ||||||
| Balance at 31 December 2019 | 120 | 230,502 | - | 11,360 | (1,394) | (123,756) | 116,831 |
| Balance at 1 January 2020 | 120 | 230,502 | - | 11,360 | (1,394) | (123,756) | 116,831 |
| Share-based payment to employees | (916) | ||||||
| Share repurchase | 1,186 | ||||||
| Resale own shares | (38) | ||||||
| Result for the period | 97,167 | ||||||
| Foreign exchange differences | 2,078 | ||||||
| Balance at 31 December 2020 | 120 | 230,502 | - | 11,591 | 684 | (26,589) | 216,307 |
Huddly Group Consolidated Statement of cashflow 2020
| 2020 | 2019 | |
|---|---|---|
| NOK '000 | ||
| Cashflow from operations | ||
| Result before tax | 100,755 | 2,742 |
| Share-based payments to employees | (916) | 2,083 |
| Depreciation and amortization | 42,896 | 36,149 |
| Changes in provisions | 2,422 | 3,670 |
| Changes in working capital | (13,427) | (2,677) |
| Net change in cash from operations | 131,730 | 41,967 |
| Cashflow from investments | ||
| Changes in other long term investments | 10 | 55 |
| Changes in capitalized assets | (52,309) | (42,634) |
| Purchase of tangible assets | (8,192) | (1,656) |
| Net change in cash from investments | (60,491) | (44,235) |
| Cashflow from financing | ||
| Net proceeds own shares | 1,147 | 5,000 |
| Receipt of issued capital | - | 1 |
| Net change in cash from financing | 1,147 | 5,001 |
| Net change in cash | 72,386 | 2,733 |
| Beginning balance Bank deposits | 53,985 | 51,252 |
| End balance Bank deposits | 126,371 | 53,985 |
Huddly Group Notes to the Consolidated financial statements
Note 1: Tax grants and other government grants
Tax Grants
The Company's project: 308646 for 2020 has been approved by Norwegian Research Council as a research and development grant as per Norwegian Tax Law §16-40 (Skattefunn procedure). These funds are accounted for as a reduction of cost in accordance with IAS 20 and the receivable is included in "Other receivables". Payment of TNOK 4,750 will be received as part of the final tax settlement for 2020 during the autumn of 2021. As of 2020, the deduction percentage for all internal research and development is set at 19 percent of the allowed total project limit, reduced from 20% in prior year.
Government grants
| Reduced | Reduced other | ||
|---|---|---|---|
| Grants from | Amount | salary cost | cost |
| Skattefunn | 4,750 | 3,382 | 1,368 |
| Total | 4,750 | 3,382 | 1,368 |
Note 2: Salary and related
| 2020 | 2019 | |
|---|---|---|
| Salary | 28,337 | 27,345 |
| Share-based payment to employees | 3,515 | 1,483 |
| Pension costs | 688 | 726 |
| Other personnel costs | 7,474 | 7,169 |
| Total personnel costs | 40,014 | 36,724 |
The Company's pension schemes satisfy the requirements in local country legislation regarding mandatory occupational pension act. The Group had an average of 65 full time employees on payroll in 2020.
64 employees are registered in pension schemes as of December 31, 2020.
Employee overview by country
| 2020 | 2019 | |
|---|---|---|
| Norway | 63 | 53 |
| USA | 7 | 3 |
| United Kingdom | 1 | 1 |
| Germany | - | 1 |
| Total | 71 | 58 |
Compensation for the management team
| Board | |||||
|---|---|---|---|---|---|
| compen | |||||
| sation | Salary | Bonus Pension cost | Other | Total | |
| Key management employees | |||||
| Stein Ove Eriksen, CEO | 2,000 | 24 | 3 | 2,028 | |
| Øystein Drageset, CFO | 1,800 | 24 | 3 | 1,828 | |
| Knut Helge Teppan, CDO | 1,500 | 24 | 3 | 1,528 | |
| Vegard Hammer, CTO | 1,500 | 24 | 3 | 1,528 | |
| Board of directors | |||||
| Graham S. Williams, Chairman | 150 | 1,867 | 2,017 | ||
| Jostein Devold, Board member | 100 | 100 | |||
| Per K. H. Kogstad, Board member | 100 | 100 | |||
| Kristian Kolberg, Board member | 100 | 100 | |||
| Total | 450 | 6,800 | - 97 |
1,880 | 9,227 |
The management team does not receive reimbursement or other financial benefits outside their normal duties as leaders.
There are no loans or pledges granted to the management group.
The Board signed a consultancy agreement with Graham S. Williams as Executive Chairman relating to change of CEO in August 2019.
Note 2: Salary and related (continued)
| Shares owned / controlled by Management and Board | |
|---|---|
| Graham S. Williams, Chairman (GJEH Pty Ltd ATF GJEH Family Trust og ATF G+J Williams Super Fund) | 1,787,743 |
| Jostein Devold, Board member (Mertoun Capital AS and Leif Hübert) | 1,041,826 |
| Kristian Kolberg, Board member (Kolberg Motors AS, Multiplikator AS and Isar Invest AS) | 640,000 |
| Per K. H. Kogstad, Board member (Bjøberg Eiendom AS) | 347,037 |
| Stein Ove Eriksen, CEO (SOM Holding AS) | 700,683 |
| Knut Helge Teppan, CDO (Knut Teppan Design AS) | 150,000 |
| Total | 4,667,289 |
Note 3: Employee share-based compensation
Employee options
As at 31 December there are 20 employees participating in the option program. Employees have three years vesting period for options. Fair value of the equity instruments are measured at grant date and is recognized over the vesting period of three years respectively. Sharebased payment included in salary costs are TNOK 3,515 and TNOK 1,483 in 2020 and 2019 respectively. Exercise price is 0,01 kr per share.
Overview outstanding options:
| 2020 | 2019 | |
|---|---|---|
| Options granted, vested 01.01 | 209,790 | 383,333 |
| Options granted | - | - |
| Options exercised | - | (140,875) |
| Options expired during the year | (36,667) | (32,668) |
| Options granted, vested 31.12 | 173,123 | 209,790 |
| The outstanding options have the following expiry date: | ||
| Expiry date | Number | |
| 2020 | - | |
| 2021 | 47,233 |
2022 83,001 2023 42,889
Total 173,123 All equity-settled share-based payments expire after five years from grant date.
Fair value of the equity instruments is measured at the last known issue price.
Shares held by the board and management
See note 2 for details.
Kruse Smith share agreements
Six executives were given total 625,000 shares under the Kruse Smith provision in January 2017 based on the Kruse Smith tax judgement. The strike price was NOK 26.35 with a three year vesting period for the employee. The employee paid 10% of the strike price per share to the company upon issuance of the shares. The remaining 90% are due upon sale of the shares of the minimum price as the strike price. At termination of employement any unvested portion shall be bought back buy the company at 10% of the strike price. The company bought back 104,166 shares in 2018 and 14,585 shares in 2020 for NOK 2.635 per share. Two of the leading employees were employed by the company at the end of 2020 and have 200,000 shares under this program.
Synthetic options
The Board has as of year-end 2020 granted 2,137,333 synthetic options to employees with three year vesting period. Each synthetic option gives the owner the right to receive a one-time payment up to the value of one share in the company in a change of control event, deducted by exercise price per share. A change of control event is defined as a sale of more than 50% of the ordinary shares in the Company to a single buyer or two or more buyers acting in concent, over a continuous period of 12 months. Average exercise price per share is NOK 27.80. It is issued 225,000 synthetic options to the Board, according to remuneration for the Board approved at the Annual General Meeting in 2018 and 2020, with average exercise price NOK 39.96.
Note 4: Other costs
Other costs
| 2020 | 2019 | |
|---|---|---|
| Shipping | 519 | 510 |
| Utilities | 13 | 50 |
| Advertizing | 318 | 129 |
| Rent and leases | 908 | 746 |
| Travel | 150 | 1,758 |
| Professional services | 7,451 | 6,162 |
| Other costs | 5,072 | 5,953 |
| Total other costs | 14,432 | 15,308 |
| Audit fee | 2020 | 2019 |
| Statutory Audit | 210 | 106 |
| Other services not relating to audit | 57 | 127 |
| Total | 267 | 233 |
Positions are presented exclusive of VAT.
Note 5: Taxes
Deferred income tax assets and liabilities are offset when a legally enforceable right to offset current tax assets and current tax liabilities exists.
| Basis for tax calculation | 2020 | 2019 | |
|---|---|---|---|
| Profit(loss) before tax | 100,755 | 2,742 | |
| +/- Not deductible expenses | (1,268) | (3,371) | |
| +/- Change in temporary differences | 6,461 | 8,320 | |
| Current tax basis | 105,948 | 7,691 | |
| Tax costs in results | 3,588 | - | |
| Changes in temporary differences | (3,713) | - | |
| Taxes due | 7,300 | - | |
| Reconciliation between profit before tax and tax expense | 2020 | 2019 | |
| Profit/(loss) before tax | 100,755 | 2,742 | |
| Tax calucalated at nominal statutory tax rate | (22,166) | (603) | |
| Net expenses(income) not deductible | 279 | 742 | |
| Change in temporary differences | (1,422) | (1,830) | |
| Effect on deferred tax asset included | 3,713 | - | |
| Tax losses for which no deferred income tax assets was recognized | 16,008 | 1,692 | |
| Tax income(expense) | (3,588) | - | |
| Specifiation of temporary differences due to deferred tax liabilities/(assets): | 1/1/2020 | 12/31/2020 | Change |
| Fixed assets | (1,588) | (3,795) | 2,207 |
| Accounts receivables | (5,685) | (6,091) | 406 |
| Warranty provision | (9,835) | (14,281) | 4,446 |
| Other | - | 598 | (598) |
| Items not included in deferred tax | - | 7,292 | (7,292) |
| Losses carried forward | (114,587) | (39,793) | (74,794) |
| Net deferred tax assets base | (131,695) | (56,071) | (75,624) |
| Total deferred tax assets | (28,974) | (7,178) | (21,797) |
| Deferred tax assets not recognized in the balance sheet | 28,974 | 3,465 | 25,509 |
| Net deferred tax assets recognized in the balance sheet | - | (3,713) | 3,713 |
Deferred tax assets are recognized for tax loss carry-forwards and deductible temporary differences to the extent that the realization of the tax benefit through taxable profits is probable.
Deferred tax assets are calculated with the nominal corporate tax rate in Norway. At balance sheet date, the recognition crieria in IAS 12 were not met for Huddly Inc.
Huddly
Note 6: Earnings per share
Ordinary earnings per share is calculated by taking the net profit for the year of TNOK 97,167 (TNOK 2,742 in 2019) and outstanding shares at year end of 11,951,714 shares (11,951,714 in 2019) deducted by Treasury shares of 18,751 (4,166 in 2019).
| 2020 | 2019 | |
|---|---|---|
| Result for the year attributable to the shareholders in the consolidated company | ||
| Net profit for the year | 97,167 | 2,742 |
| Result for the year attributable to the shareholders | 97,167 | 2,742 |
| Basic shares | 8.14 | 0.23 |
| Fully diluted shares | 6.72 | 0.19 |
| Fully diluted shares | ||
| Registrated ordinary shares | 11,951,714 | 11,951,714 |
| Treasury shares | (18,751) | (4,166) |
| Employee options | 173,123 | 209,790 |
| Board synthetic options | 225,000 | 112,500 |
| Employee synthetic options | 2,137,333 | 2,063,944 |
| Fully diluted shares | 14,468,419 | 14,333,782 |
See note 3 for a description of options and synthetic options.
Note 7: Intangible assets
| Development costs | Licenses | Domains | Goodwill | Total | |
|---|---|---|---|---|---|
| Balance at 1 January 2020 | 53,472 | 4,625 | 61 | 8,018 | 66,175 |
| Additions | 52,309 | - | - | - | 52,309 |
| Amortization | (35,656) | (2,327) | - | - | (37,983) |
| Balance at 31 December 2020 | 70,126 | 2,297 | 61 | 8,018 | 80,501 |
| At 1 January 2020 | |||||
| Aquistion cost | 114,050 | 7,146 | 61 | 8,018 | 129,275 |
| Accumulated amortization | (60,579) | (2,521) | - | - | (63,100) |
| Ending balance | 53,472 | 4,625 | 61 | 8,018 | 66,175 |
| At 31 December 2020 | |||||
| Aquistion cost | 166,360 | 7,146 | 61 | 8,018 | 181,584 |
| Accumulated amortization | (96,234) | (4,849) | - | - | (101,083) |
| Balance at 31 December 2020 | 70,126 | 2,297 | 61 | 8,018 | 80,501 |
| Development costs | Licenses | Domains | Goodwill | Total | |
| Balance at 1 January 2019 | 48,241 | 6,952 | 61 | 8,018 | 63,271 |
| Additions developed internally | 37,634 | - | - | - | 37,634 |
| Amortization | (32,403) | (2,328) | - | - | (34,731) |
| Balance at 31 December 2019 | 53,472 | 4,625 | 61 | 8,018 | 66,175 |
| At 1 January 2019 | |||||
| Aquistion cost | 76,416 | 7,146 | 61 | 8,018 | 91,641 |
| Accumulated amortization | (28,175) | (194) | - | - | (28,369) |
| Ending balance | 48,241 | 6,952 | 61 | 8,018 | 63,271 |
| At 31 December 2019 | |||||
| Aquistion cost | 114,050 | 7,146 | 61 | 8,018 | 129,275 |
| Accumulated amortization | (60,579) | (2,521) | - | - | (63,100) |
| Balance at 31 December 2019 | 53,472 | 4,625 | 61 | 8,018 | 66,175 |
| Economic life | 3 years 3 years / Undecided | Undecided | Undecided | |
|---|---|---|---|---|
| Depreciation method | Straightline | Straightline / IA | IA | IA |
Work performed by departments that in relation to research and development in 2020 was TNOK 52,309.
The Company estimates the economic life to be 3 years.
In the operating result for the year, the capitalization of research and development is treated as a cost reduction.
Note 8: Fixed assets
| Office | ||||||
|---|---|---|---|---|---|---|
| Machines | equipment | Tools | Fixture etc. | Right-to-use | Total | |
| Balance at 1 January 2020 | 31 | 591 | 1,610 | 627 | 3,301 | 6,160 |
| Additions | - | 998 | 2,255 | 213 | 4,737 | 8,203 |
| Depreciation | (23) | (492) | (900) | (209) | (3,301) | (4,926) |
| Balance at 31 December 2020 | 7 | 1,098 | 2,965 | 631 | 4,737 | 9,437 |
| At 1 January 2020 | ||||||
| Aquistion cost | 136 | 1,648 | 2,906 | 936 | 6,242 | 11,868 |
| Accumulated depreciation | (106) | (1,057) | (1,296) | (309) | (2,941) | (5,708) |
| Ending balance | 31 | 591 | 1,610 | 627 | 3,301 | 6,160 |
| At 31 December 2020 | ||||||
| Aquistion cost | 136 | 2,646 | 5,161 | 1,149 | 10,979 | 20,071 |
| Accumulated depreciation | (129) | (1,549) | (2,196) | (518) | (6,242) | (10,634) |
| Balance at 31 December 2020 | 7 | 1,098 | 2,965 | 631 | 4,737 | 9,437 |
| Office | ||||||
|---|---|---|---|---|---|---|
| Machines | equipment | Tools | Fixture etc. | Right-to-use | Total | |
| Balance at 1 January 2019 | 67 | 741 | 1,213 | 601 | 6,242 | 8,863 |
| Additions | - | 404 | 1,059 | 194 | - | 1,656 |
| Depreciation | (36) | (554) | (662) | (167) | (2,941) | (4,359) |
| Balance at 31 December 2019 | 31 | 591 | 1,610 | 627 | 3,301 | 6,160 |
| At 1 January 2019 | ||||||
| Aquistion cost | 136 | 1,244 | 1,847 | 742 | 6,242 | 10,212 |
| Accumulated depreciation | (70) | (503) | (635) | (141) | - | (1,349) |
| Ending balance | 67 | 741 | 1,213 | 601 | 6,242 | 8,863 |
| At 31 December 2019 | ||||||
| Aquistion cost | 136 | 1,648 | 2,906 | 936 | 6,242 | 11,868 |
| Accumulated depreciation | (106) | (1,057) | (1,296) | (309) | (2,941) | (5,708) |
| Balance at 31 December 2019 | 31 | 591 | 1,610 | 627 | 3,301 | 6,160 |
| Economic life | 3 years | 3 years | 3 years/5 years | 5 years | 2 years | |
| Depreciation method | Straightline Straightline | Straightline | Straightline | Straightline |
Note 9: Inventory
| 2020 | 2019 | |
|---|---|---|
| Components | 3,238 | 406 |
| Total inventory | 3,238 | 406 |
The company buys finished goods from Hapro Electronics AS and Flextronics Industrials Ltd which purchases components and produces finished goods. Huddly AS purchases some components with long lead times and some finished goods. These are strategic purchases to optimize the supply chain and ensure the most efficient logistic. These components/products are assessed for obsolescence on a continual basis.
Note 10: Accounts receivable
The table below summarizes the accounts receivable position according to their maturity at 31 December:
| Sum | Not due | <30 d | 30-60 d | 60-90 d | >90 d | |
|---|---|---|---|---|---|---|
| 2020 | 59,315 | 54,051 | 3,959 | - | 1,297 | 8 |
| 2019 | 40,014 | 39,586 | 356 | - | - | 72 |
It is accrued TNOK 250 for loss on accounts receivable in 2020, and it was accrued TNOK 250 for 2019. Accounts receivebles due are not interest bearing and payment terms are on avarage 30 to 45 day's.
Note 11: Other short term receivables
| 2020 | 2019 | |
|---|---|---|
| Prepaid expenses | 3,792 | 1,971 |
| Other short term receivables | 14,441 | 13,128 |
| Total other receivables | 18,233 | 15,099 |
Other short term receivables is primarily made up of Skattefunn grant and receivable on value added tax.
Note 12: Cash and cash equivalents
| 2020 | 2019 | |
|---|---|---|
| Cash and cash equivalents | 126,371 | 53,985 |
| Ending cash and equivalents | 126,371 | 53,985 |
Restricted cash at year end 2020 was TNOK 5,693 (2019 TNOK 3,141) which is related to advance payment of social taxes, deposit for office premises, and cash collateral guarantee to Polish VAT fiscal representative.
Note 13: Sharecapital and shareholders
The Company has 11,951,714 shares, with par value NOK 0.01, which give a total share capital of NOK 119,517.14. The Company has one share class, common shares, which all have the same voting and dividend rights.
The Company has 507 shareholders. Below are the 20 largest shareholders.
| Shareholder name | Number of shares | Ownerhip |
|---|---|---|
| GJEH Pty Ltd ATF GJEH Family Trust | 1,359,101 | 11.4 % |
| MERTOUN CAPITAL AS | 941,826 | 7.9 % |
| STAFF HOLDING AS | 780,500 | 6.5 % |
| SOM HOLDING AS | 700,683 | 5.9 % |
| PORTIA AS | 520,000 | 4.4 % |
| MP PENSJON PK | 460,000 | 3.8 % |
| ATF G+J Williams Super Fund | 428,642 | 3.6 % |
| SKIPS AS TUDOR | 400,000 | 3.3 % |
| KOLBERG MOTORS AS | 383,000 | 3.2 % |
| BJØBERG EIENDOM AS | 347,037 | 2.9 % |
| HØYLANDET BYGGUTLEIE AS | 333,829 | 2.8 % |
| KORINVEST AS | 251,677 | 2.1 % |
| TVECO AS | 225,000 | 1.9 % |
| MULTIPLIKATOR AS | 217,000 | 1.8 % |
| HPA HOLDING AS | 186,000 | 1.6 % |
| SALAMANDER HOLDING AS | 166,300 | 1.4 % |
| ELECTRIC WORK AS | 160,415 | 1.3 % |
| KNUT TEPPAN DESIGN AS | 150,000 | 1.3 % |
| CRESSIDA AS | 132,500 | 1.1 % |
| The Dromoland Capital Trust | 125,052 | 1.0 % |
| All others | 3,683,152 | 30.8 % |
| Total | 11,951,714 | 100.0 % |
Note 14: Long term liability
| 2020 | 2019 | |
|---|---|---|
| Product warranty provision | 8,956 | 6,534 |
| Total long term liability | 8,956 | 6,534 |
The company has two years product warranty on all products and has recognised a provision of 4% on all direct manufacturing costs occured over the last 2 years at 31 December 2020.
Note 15: Other short term liabilities
| 2020 | 2019 | |
|---|---|---|
| Accrued vacation pay | 4,866 | 4,461 |
| Lease obligation | 5,037 | 3,301 |
| Other short term liabilities | 5,720 | 5,251 |
| Total | 15,622 | 13,014 |
Note 16: Leases
The Group as lessee
Right-of-use assets
The Group's leased assets include offices. The Group's right-of-use assets are categorized and presented in the table below.
| Right-of-use assets | Real Estate | Total |
|---|---|---|
| Acquisition cost 1 January 2020 | 3,301 | 3,301 |
| Additions | 4,737 | 4,737 |
| Disposals | - | - |
| Acquisition cost 31 December 2020 | 8,038 | 8,038 |
| Accumulated depreciation and impairment 1 January 2019 | - | - |
| Depreciation | 3,301 | 3,301 |
| Impairment | - | - |
| Disposals | - | - |
| Accumulated depreciation and impairment 31 December 2020 | 3,301 | 3,301 |
| - | - | |
| Book value Right-of-use assets 31 December 2020 | 4,737 | 4,737 |
| Remaining lease period | 1 year | |
| Amortization method | Straightline | |
| Lease liability | ||
| Changes in lease liability | ||
| Lease liability 1 January 2020 | 3,301 | |
| Acquired during the year | 5,037 | |
| Lease payments | (3,301) | |
| Interest payment | - | |
| Lease liability 31 December 2020 | 5,037 | |
| - | ||
| Current lease liability | 5,037 | |
| Non-current lease liability | - |
Net cash flow from lease liability 3,301
Note 17: Events after the balance sheet date
On 22 January, Notice of Extraordinary General Meeting. The board of directors of Huddly AS hereby called for an extraordinary general meeting to be held on 29 January 2021 at 10:00 (CET).
On 29 January, Share split. At the extraordinary general meeting a decision was passed to split each of the Huddly AS shares at a ratio of 1:16 (1 existing share give 16 new shares). After the split, the share capital of the company is NOK 119,517.14 divided into 191,227,424 shares each having a nominal value of NOK 0.000625. Last day for the Huddly AS share before the share split is Tuesday 2 February 2021. First day after the share split is Wednesday 3 February 2021 (Ex. date).The extraordinary general meeting also resolved to grant the board of directors mandate to issue new shares to fulfil the Company's option programs.
The Company's only active incentive program is the new 2021 Incentive Plan implemented by the board of directors in January 2021, directed at employees and directors. Participants are granted options to subscribe for Shares in the Company based on a pre-determined strike price. The options are as a general rule subject to a three-year vesting schedule. Further, the options may only be exercised in a coordinated process lead by the Company's board of directors. This implies that the participant may only exercise a number of options each year equal to 20% of its total number of options, and the Shares issued or bought in conjunction with such exercise event are immediately put out for sale. As of the date of the Information Document (15 February 2021), the number of options outstanding under the 2021 Incentive Plan are 21,968,000 and the average strike price is NOK 2.76. Vesting and exercise of all outstanding options will lead to a dilution of 10.2%. The 2021 Incentive Plan was established by converting previous off balance sheet synthetic options to options for current employees and directors. The conversion will have a significant impact on financial statements in 2021. It will be a non-cash impact, except for social security tax on exercised options.
On 5 February, the Company received a letter, which serves as a legal process notice, on behalf of five former employees claiming that the synthetic options issued by the Company to such persons are triggered by the Company's contemplated admission to trading on Euronext Growth. The letter indicates a claim for a cash payment from the Company in an amount around NOK 135 million (based on a share price of NOK 15.50). The Company's view is that the synthetic options pursuant to the options agreements are only exercisable at a change of control event (to be settled in cash). This view is supported by the company's external law firm and a professor of law at the faculty of law. Although the claimants appear to argue that the option agreements are to be construed more widely, it is the Company's opinion that this lacks both factual and legal basis, and that the claim raised are unfounded and without merit.
On 8 February, Contemplated private placement and listing on Euronext Growth Oslo. The Company engaged ABG Sundal Collier ASA and Pareto Securities AS as Joint Global Coordinators and Joint Bookrunners to advise on and effect a contemplated private placement of new and existing shares in the Company in connection with a listing on Euronext Growth Oslo.
On 8 February, Investor presentation. In connection with the contemplated private placement and listing on Euronext Growth Oslo, the company released an updated investor presentation.
On 9 February, Offering successfully completed. In reference to made to the announcement by the Company published on 8 February, regarding the terms for the offering of shares and subsequent admission to trading on Euronext Growth Oslo. The Offering was successfully completed.
On 9 February, Share capital increase. The issuance of 19,123,200 new shares under the offering completed and has been registered with the Norwegian Register of Business Enterprises. In addition, 3,500,800 new shares and 2,476,624 new shares have been issued under incentive schemes. Following registration, the share capital of Huddly AS is NOK 135,205.03, divided into 216,328,048 shares, each with a nominal value of NOK 0.000625. Each share represents one vote in the company's general meeting.
On 12 February, Approved for admission to trading on Euronext Growth and deregistration from NOTC. The Company was informed that Oslo Børs has approved the Company's application for Listing. The first day of trading on Euronext Growth Oslo will be Tuesday, 16 February 2021. As a consequence of this, the Company's shares will be deregistered from the NOTC on 12 February after close of trading.
On 15 February, Publication of Information Document. The Information Document prepared by the Company was published in connection with the admission to trading on Euronext Growth Oslo.
On 16 February, The first day of trading on Euronext Growth Oslo. Trading under ISIN NO 001 0776990 and trading symbol "HDLY".
On 16 February, Stabilisation and over-allotment notice. Pareto Securities AS may, on behalf of the Company, engage in stabilisation activities from 16 February 2021, to, and including, 17 March 2021. Any stabilisation transactions will be aimed to support the market price of Huddly shares traded on Euronext Growth Oslo.
There have been no other material events subsequent to the reporting period that might have a significant effect on these financial statements for 2020.
Accounting policies – Huddly AS
Corporate information
Huddly AS is the parent Company in the Huddly Group. Huddly is a technology company that creates tools for team collaboration. Based in Oslo, Norway, Huddly combines expertise across the fields of design, hardware, software, and artificial intelligence. Huddly's smart cameras are designed to make it easier and better for people to communicate with each other. Huddly's solutions with industry-leading partners enable high-quality video experiences on all major collaboration platforms.
The subsidiary mentioned above is included in the consolidated financial statements as the control criteria in IFRS 10 are met.
Huddly AS is a public limited liability Company incorporated and domiciled in Norway. The address of its registered office is Karenslyst Allé 51, 0279 Oslo, Norway.
These consolidated financial statements were approved by the Board of Directors on March 2, 2021.
Basis of preparation
The consolidated financial statements of the parent entity and the group have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations as adopted by the European Union (EU) and valid as of December 31, 2018. The consolidated financial statements have been prepared under the historical cost convention.
All numbers are in NOK thousands unless otherwise stated.
Future changes in standards
The financial statements could be affected by future changes in IFRS. The Group has evaluated any such to either be not applicable or with immaterial impact.
Principal rules for evaluation and classification of assets and liabilities
Assets intended for long term ownership or use, are classified as fixed assets. Assets relating to the operating cycle are classified as current assets. Receivables are classified as current assets if they are to be repaid within one year after balance sheet date. Equivalent criteria apply to liabilities. Current assets are valued at the lower of purchase cost and net realizable value. Current liabilities are reflected in the balance sheet at nominal value at establishment date. Fixed assets are valued at purchase cost. Fixed assets whose value will decline are depreciated on a straight-line basis over the asset's estimated useful life. Fixed assets are written down to net realizable value if a value reduction occurs that is expected to be permanent. Long-term liabilities are reflected in the balance sheet at nominal value on establishment date.
Cash and cash equivalents
The Company considers all highly liquid assets with an original or remaining maturity of three months or less at the date of acquisition to be cash equivalents.
-
Inventories
Inventories are stated at the lower of cost or market. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. The Company provides inventory write-downs based on excess and obsolete inventories determined primarily by future demand forecasts.
Accounts receivables and allowances for doubtful accounts
Trade receivables and other receivables are reflected in the balance sheet at nominal value less provision for estimated losses. Estimated losses are provided for based on an individual assessment of each debtor. Trade receivables are written off at the point when they are considered uncollectible.
Foreign currency translation
Assets and liabilities of U.S.-subsidiaries that operate in a local currency environment, where that local currency is the functional currency, are translated to NOK at exchange rates in effect at the balance sheet date, with the resulting translation adjustments directly recorded to a separate component of equity through OCI. Income and expense accounts are translated at average exchange rates during the year. Remeasurement adjustments are recorded in other comprehensive income (loss).
Revenue recognition
The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred as well as risk and control, the fee is fixed or determinable, and collectability is reasonably assured. In instances where final acceptance of the product is specified by the customer, revenue is deferred until all acceptance criteria have been met. The Company accrues for warranty costs, sales returns, and other allowances and as there are no historical history the Company has taken a conservative estimate until such history is established. Shipping and handling fees billed to customers are included in revenue, with the associated costs included in cost of sales. Revenue is shown net of value-added tax, estimated returns, rebates, and discounts and after eliminated sales within the Group.
Intangible assets – R&D
Costs to develop the Company`s products that are incurred subsequent to the establishment of technological feasibility are capitalized if significant and when it is probable that the expected future economic benefits that are attributable to the assets will flow to the entity and when the cost of the asset can be measured reliably. Intangible assets are measured initially at cost and amortized using the straight-line amortization method over the estimated useful life.
Government grants
Government grants are recognized in profit or loss on a systematic basis over the periods in which the entity recognizes as expenses the related costs for which the grants are intended to compensate. Grants related to R&D of capitalized fixed assets are recognized as reductions in capitalized costs.
Leases
The Group has recognized assets and liabilities for all material leases with a term of more than 12 months and recognized the corresponding depreciation of the lease assets separately from interest on lease liabilities in the income statement in line with IFR16 adopted standard.
-
Tax expenses
The tax expense for the period comprises current and change in deferred tax. Tax is recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax asset and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities.
Financial risk factors
The Company's activities are exposed to a variety of financial risks: market risk (including currency risk and price risk), credit risk and liquidity risk. The Company assess the various risks mentioned above to be moderate at the time of this report.
Shares in subsidiaries
Investments in subsidiaries are recorded under the cost method. Investments are written down to fair value when a reduction in value is expected to be permanent.
Huddly AS Statement of comprehensive income 2020
| Huddly | |
|---|---|
| Notes | 2020 | 2019 |
|---|---|---|
| 184,944 | ||
| 184,944 | ||
| (89,206) | ||
| 205,422 | 95,737 | |
| (30,041) | ||
| (2,795) | ||
| (38,916) | ||
| (19,127) | ||
| (87,631) | (90,880) | |
| 117,791 | 4,857 | |
| 1,073 | ||
| 2,067 | ||
| 3,140 | ||
| - | ||
| (26,520) | ||
| (26,520) | ||
| (13,358) | (23,380) | |
| 104,433 | (18,523) | |
| - | ||
| 100,846 | (18,523) | |
| 6 | 8.45 | (1.55) |
| 6 | 6.97 | (1.29) |
| 1,2,3 7,8 1,4,7 17 5 |
365,134 365,134 (159,712) (27,975) (1,936) (42,887) (14,833) 283 10,555 10,838 (8) (24,188) (24,196) (3,588) |
Huddly AS
Statement of financial position at 31 December 2020
| Notes | 2020 | 2019 | |
|---|---|---|---|
| NOK '000 | |||
| ASSETS | |||
| Non-current assets | |||
| Goodwill | 7 | 8,018 | 8,018 |
| Intangible assets | 7 | 70,126 | 53,472 |
| Patents, licenses, trademarks etc | 7 | 2,358 | 4,685 |
| Deferred tax asset | 5 | 3,713 | - |
| Total intangible assets | 84,214 | 66,175 | |
| Tangible assets | |||
| Tools, machines, fixtures etc | 8, 16 | 9,419 | 6,153 |
| Total tangible assets | 9,419 | 6,153 | |
| Financial assets | |||
| Other receivables | - | 10 | |
| Total financial assets | - | 10 | |
| Total non-current assets | 93,632 | 72,337 | |
| Current Assets | |||
| Inventory | 9 | 3,238 | 406 |
| Trade receivables | 10 | 59,270 | 39,667 |
| Other receivables | 11 | 18,197 | 14,991 |
| Total Receivables | 80,705 | 55,064 | |
| Cash and cash equivalents | 12 | 125,962 | 53,461 |
| Total cash and cash equivalents | 125,962 | 53,461 | |
| Total current assets | 206,667 | 108,525 | |
| Total assets | 300,299 | 180,862 |
Huddly AS
Statement of financial position at 31 December 2020
| Notes | 2020 | 2019 |
|---|---|---|
| 120 | 120 | |
| 230,502 | 230,502 | |
| 11,591 | 11,360 | |
| 241,981 | ||
| (125,763) | ||
| (24,917) | (125,763) | |
| 217,295 | 116,218 | |
| 14 | 8,956 | 6,534 |
| 39,031 | ||
| 17,346 | 6,173 | |
| 15, 16 | 14,131 | 12,906 |
| 74,048 | 58,110 | |
| 83,003 | 64,644 | |
| 300,299 | 180,862 | |
| 13 | 242,212 (24,917) 42,571 |
Oslo, March 2, 2021
Graham Spencer Williams Jostein Devold Per Kåre Haug Kogstad Chairman Board member Board member
Board member CEO
Kristian Kolberg Stein Ove Eriksen
Huddly
Huddly AS
Statement of changes in equity 2020
| Issued capital |
Share | Not-registered | Retained | |||
|---|---|---|---|---|---|---|
| premium | issued capital | Other equity | earnings | Total equity | ||
| Balance at 1 January 2019 | 118 | 230,502 | - | 4,277 | (107,240) | 127,657 |
| Registrered capital increase | 1 | |||||
| Share-based payment to employees | 2,083 | |||||
| Share repurchase | 5,000 | |||||
| Loss for the year | (18,523) | |||||
| Balance at 31 December 2019 | 120 | 230,502 | - | 11,360 | (125,763) | 116,219 |
| Balance at 1 January 2019 | 120 | 230,502 | - | 11,360 | (125,763) | 116,219 |
| Share-based payment to employees | (916) | |||||
| Share repurchase | 1,186 | |||||
| Resale own shares | (38) | |||||
| Result for the period | 100,846 | |||||
| Balance at 31 December 2020 | 120 | 230,502 | - | 11,591 | (24,917) | 217,295 |
Huddly AS Statement of cashflow 2020
| NOK '000 | 2020 | 2019 |
|---|---|---|
| Cashflow from operations | ||
| Result before tax | 104,433 | (18,523) |
| Impairment loss to subsidiary | 9,107 | 25,016 |
| Exchange rate differences loss | 1,526 | - |
| Share-based payments to employees | (916) | 2,083 |
| Depreciation and amortization | 42,887 | 35,975 |
| Changes in provisions | 2,422 | 3,670 |
| Changes in working capital | (17,003) | (197) |
| Net change in cash from operations | 142,455 | 48,024 |
| Cashflow from investments | ||
| Payment of intercompany loan | (10,632) | (5,704) |
| Changes in other long term investments | 10 | 55 |
| Changes in capitalized assets | (52,309) | (42,634) |
| Purchase of tangible assets | (8,170) | (1,501) |
| Net change in cash from investments | (71,102) | (49,784) |
| Cashflow from financing | ||
| Net proceeds own shares | 1,147 | 5,000 |
| Receipt of issued capital | - | 1 |
| Net change in cash from financing | 1,147 | 5,001 |
| Net change in cash | 72,501 | 3,241 |
| Beginning balance Bank deposits | 53,461 | 50,220 |
| End balance Bank deposits | 125,962 | 53,461 |
Huddly
Huddly AS Notes to the financial statements Huddly AS
Note 1: Tax grants and other government grants
Tax Grants
The Company's project: 308646 for 2020 has been approved by Norwegian Research Council as a research and development grant as per Norwegian Tax Law §16-40 (Skattefunn procedure). These funds are accounted for as a reduction of cost in accordance with IAS 20 and the receivable is included in "Other receivables". Payment of TNOK 4,750 will be received as part of the final tax settlement for 2020 during the autumn of 2021. As of 2020, the deduction percentage for all internal research and development is set at 19 percent of the allowed total project limit, reduced from 20% in prior year.
Government grants
| Reduced | Reduced | ||
|---|---|---|---|
| Grants from | Amount | salary cost | other cost |
| Skattefunn | 4,750 | 3,382 | 1,368 |
| Total | 4,750 | 3,382 | 1,368 |
Note 2: Salary and related
| 2020 | 2019 | |
|---|---|---|
| Salary | 18,461 | 21,644 |
| Share-based payment to employees | 3,515 | 1,483 |
| Pension costs | 688 | 726 |
| Other personnel costs | 5,311 | 6,188 |
| Total personnel costs | 27,975 | 30,041 |
The Company had an average of 58 full time employees on payroll in 2020.
The Company's pension schemes satisfy the requirements in local country legislation regarding mandatory occupational pension act.
57 employees are registered in the pension scheme as of December 31, 2020.
Employee overview by country
| 2020 | 2019 | |
|---|---|---|
| Norway | 63 | 53 |
| United Kingdom | 1 | 1 |
| Germany | - | 1 |
| Total | 64 | 55 |
Compensation for the management team
| Board | |||||
|---|---|---|---|---|---|
| compen | Salary | Bonus Pension cost | Other | Total | |
| sation | |||||
| Key management employees | |||||
| Stein Ove Eriksen, CEO | 2,000 | 24 | 3 | 2,028 | |
| Øystein Drageset, CFO | 1,800 | 24 | 3 | 1,828 | |
| Knut Helge Teppan, CDO | 1,500 | 24 | 3 | 1,528 | |
| Vegard Hammer, CTO | 1,500 | 24 | 3 | 1,528 | |
| Board of directors | |||||
| Graham S. Williams, Chairman | 150 | 1,867 | 2,017 | ||
| Jostein Devold, Board member | 100 | 100 | |||
| Per K. H. Kogstad, Board member | 100 | 100 | |||
| Kristian Kolberg, Board member | 100 | 100 | |||
| Total | 450 | 6,800 | - 97 |
1,880 | 9,227 |
The management team does not receive reimbursement or other financial benefits outside their normal duties as leaders.
There are no loans or pledges granted to the management group.
The Board signed a consultancy agreement with Graham S. Williams as Executive Chairman relating to change of CEO in August 2019.
Note 2: Salary and related (continued)
| Shares owned / controlled by Management and Board | |
|---|---|
| Graham S. Williams, Chairman (GJEH Pty Ltd ATF GJEH Family Trust og ATF G+J Williams Super Fund) | 1,787,743 |
| Jostein Devold, Board member (Mertoun Capital AS and Leif Hübert) | 1,041,826 |
| Kristian Kolberg, Board member (Kolberg Motors AS, Multiplikator AS and | 640,000 |
| Per K. H. Kogstad, Board member (Bjøberg Eiendom AS) | 347,037 |
| Stein Ove Eriksen, CEO (SOM Holding AS) | 700,683 |
| Knut Helge Teppan, CDO (Knut Teppan Design AS) | 150,000 |
| Total | 4,667,289 |
Note 3: Employee share-based compensation
Employee options
As at 31 December there are 20 employees participating in the option program. Employees have three years vesting period for options. Fair value of the equity instruments are measured at grant date and is recognized over the vesting period of three years respectively. Share-based payment included in salary costs are TNOK 3,515 and TNOK 1,483 in 2020 and 2019 respectively. Exercise price is 0,01 kr per share.
Overview outstanding options:
| 2020 | 2019 | |
|---|---|---|
| Options granted, vested 01.01 | 209,790 | 383,333 |
| Options granted | - | - |
| Options exercised | - | (140,875) |
| Options expired during the year | (36,667) | (32,668) |
| Options granted, vested 31.12 | 173,123 | 209,790 |
| The outstanding options have the following expiry date: Expiry date |
Number | |
| 2020 | - | |
| 2021 | 47,233 | |
| 2022 | 83,001 | |
| 2023 | 42,889 | |
| Total | 173,123 |
All equity-settled share-based payments expire after five years from grant date. Fair value of the equity instruments is measured at the last known issue price.
Shares held by the board and management
See note 2 for details.
Kruse Smith share agreements
Six executives were given total 625,000 shares under the Kruse Smith provision in January 2017 based on the Kruse Smith tax judgement. The strike price was NOK 26.35 with a three year vesting period for the employee. The employee paid 10% of the strike price per share to the company upon issuance of the shares. The remaining 90% are due upon sale of the shares of the minimum price as the strike price. At termination of employement any unvested portion shall be bought back buy the company at 10% of the strike price. The company bought back 104,166 shares in 2018 and 14,585 shares in 2020 for NOK 2.635 per share. Two of the leading employees were employed by the company at the end of 2020 and have 200,000 shares under this program.
Synthetic options
The Board has as of year-end 2020 granted 2,137,333 synthetic options to employees with three year vesting period. Each synthetic option gives the owner the right to receive a one-time payment up to the value of one share in the company in a change of control event, deducted by exercise price per share. A change of control event is defined as a sale of more than 50% of the ordinary shares in the Company to a single buyer or two or more buyers acting in concent, over a continuous period of 12 months. Average exercise price per share is NOK 27.80. It is issued 225,000 synthetic options to the Board, according to remuneration for the Board approved at the Annual General Meeting in 2018 and 2020, with average exercise price NOK 39.96.
Note 4: Other costs
Other costs
| 2020 | 2019 | |
|---|---|---|
| Shipping | 519 | 510 |
| Utilities | 13 | 27 |
| Advertizing | 318 | 129 |
| Rent and leases | 908 | 490 |
| Travel | 150 | 1,758 |
| Professional services | 7,451 | 4,806 |
| Accrued loss on receivable Huddly Inc | 401 | 5,465 |
| Other costs | 5,072 | 5,942 |
| Total other costs | 14,833 | 19,127 |
| Audit fee | 2020 | 2019 |
|---|---|---|
| Statutory Audit | 210 | 106 |
| Other services not relating to audit | 57 | 127 |
| Total | 267 | 233 |
Positions are presented exclusive of VAT.
Note 5: Taxes
Deferred income tax assets and liabilities are offset when a legally enforceable right to offset current tax assets and current tax liabilities exists.
| Basis for tax calculation | 2020 | 2019 | |
|---|---|---|---|
| Profit(loss) before tax | 104,433 | (18,523) | |
| +/- Not deductible expenses | 7,839 | 21,644 | |
| +/- Change in temporary differences | 7,059 | 8,320 | |
| Current tax basis | 119,331 | 11,441 | |
| Tax costs in results | 3,588 | - | |
| Changes in temporary differences | (3,713) | - | |
| Taxes due | 7,300 | - | |
| Reconciliation between profit before tax and tax expense | 2020 | 2019 | |
| Profit/(loss) before tax | 104,433 | (18,523) | |
| Tax calucalated at nominal statutory tax rate | (22,975) | 4,075 | |
| Net expenses(income) not deductible | (1,725) | (4,762) | |
| Change in temporary differences | (1,553) | (1,830) | |
| Effect on deferred tax asset included | 3,713 | - | |
| Tax losses for which no deferred income tax assets was recognized | 18,952 | 2,517 | |
| Tax income(expense) | (3,588) | - | |
| Specifiation of temporary differences due to deferred tax liabilities/(assets): | 1/1/2020 | 12/31/2020 | Change |
| Fixed assets | (1,588) | (3,795) | 2,207 |
| Accounts receivables | (5,685) | (6,091) | 406 |
| Warranty provision | (9,835) | (14,281) | 4,446 |
| Items not included in deferred tax | - | 7,292 | (7,292) |
| Losses carried forward | (86,148) | - | (86,148) |
| Net deferred tax assets base | (103,256) | (16,876) | (86,380) |
| Total deferred tax assets | (22,716) | (3,713) | (19,004) |
| Deferred tax assets not recognized in the balance sheet | 22,716 | - | 22,716 |
| Net deferred tax assets recognized in the balance sheet | - | (3,713) | 3,713 |
Deferred tax assets are recognized for tax loss carry-forwards and deductible temporary differences to the extent that the realization of the tax benefit through taxable profits is probable. At balance sheet date, the recognition criteria in IAS 12 were not met.
Huddly
Note 6: Earnings per share
Ordinary earnings per share is calculated by taking the net profit for the year of TNOK 100,846 (net loss TNOK (18,523) in 2019) and outstanding shares at year end of 11,951,714 shares (11,951,714 in 2019) deducted by Treasury shares of 18,751 (4,166 in 2019).
| 2019 |
|---|
| (18,523) |
| (18,523) |
| (1.55) |
| (1.29) |
| 11,951,714 |
| (4) |
| 209,790 |
| 112,500 |
| 2,063,944 |
| 14,333,782 |
See note 3 for a description of options and synthetic options.
Note 7: Intangible assets
| Development costs | Licenses | Domains | Goodwill | Total | |
|---|---|---|---|---|---|
| Balance at 1 January 2020 | 53,472 | 4,625 | 61 | 8,018 | 66,175 |
| Additions | 52,309 | - | - | - | 52,309 |
| Amortization | (35,656) | (2,327) | - | - | (37,983) |
| Balance at 31 December 2020 | 70,126 | 2,297 | 61 | 8,018 | 80,501 |
| At 1 January 2020 | |||||
| Aquistion cost | 114,050 | 7,146 | 61 | 8,018 | 129,275 |
| Accumulated amortization | (60,579) | (2,521) | - | - | (63,100) |
| Ending balance | 53,472 | 4,625 | 61 | 8,018 | 66,175 |
| At 31 December 2020 | |||||
| Aquistion cost | 166,360 | 7,146 | 61 | 8,018 | 181,584 |
| Accumulated amortization | (96,234) | (4,849) | - | - | (101,083) |
| Balance at 31 December 2020 | 70,126 | 2,297 | 61 | 8,018 | 80,501 |
| Development costs | Licenses | Domains | Goodwill | Total | |
| Balance at 1 January 2019 | 48,241 | 6,952 | 61 | 8,018 | 63,271 |
| Additions developed internally | 37,634 | - | - | - | 37,634 |
| Amortization | (32,403) | (2,328) | - | - | (34,731) |
| Balance at 31 December 2019 | 53,472 | 4,625 | 61 | 8,018 | 66,175 |
| At 1 January 2019 | |||||
| Aquistion cost | 76,416 | 7,146 | 61 | 8,018 | 91,641 |
| Accumulated amortization | (28,175) | (194) | - | - | (28,369) |
| Ending balance | 48,241 | 6,952 | 61 | 8,018 | 63,271 |
| At 31 December 2019 | |||||
| Aquistion cost | 114,050 | 7,146 | 61 | 8,018 | 129,275 |
| Accumulated amortization | (60,579) | (2,521) | - | - | (63,100) |
| Balance at 31 December 2019 | 53,472 | 4,625 | 61 | 8,018 | 66,175 |
Economic life 3 years 3 years / Undecided Undecided Undecided Depreciation method Straightline Straightline / IA IA IA
Work performed by departments that in relation to research and development in 2020 was TNOK 52,309.
The Company estimates the economic life to be 3 years.
In the operating result for the year, the capitalization of research and development is treated as a cost reduction.
Note 8: Fixed assets
| Office | ||||||
|---|---|---|---|---|---|---|
| Machines | equipment | Tools | Fixture etc. | Right-to-use | Total | |
| Balance at 1 January 2020 | 31 | 584 | 1,610 | 627 | 3,301 | 6,153 |
| Additions | - | 980 | 2,255 | 213 | 4,737 | 8,185 |
| Depreciation | (23) | (485) | (900) | (209) | (3,301) | (4,920) |
| Balance at 31 December 2020 | 7 | 1,079 | 2,965 | 631 | 4,737 | 9,419 |
| At 1 January 2020 | ||||||
| Aquistion cost | 136 | 1,417 | 2,906 | 936 | 6,242 | 11,638 |
| Accumulated depreciation | (106) | (833) | (1,296) | (309) | (2,941) | (5,484) |
| Ending balance | 31 | 584 | 1,610 | 627 | 3,301 | 6,153 |
| At 31 December 2020 | ||||||
| Aquistion cost | 136 | 2,397 | 5,161 | 1,149 | 10,979 | 19,823 |
| Accumulated depreciation | (129) | (1,319) | (2,196) | (518) | (6,242) | (10,404) |
| Balance at 31 December 2020 | 7 | 1,079 | 2,965 | 631 | 4,737 | 9,419 |
| Office | ||||||
|---|---|---|---|---|---|---|
| Machines | equipment | Tools | Fixture etc. | Right-to-use | Total | |
| Balance at 1 January 2019 | 67 | 716 | 1,213 | 601 | 6,242 | 8,838 |
| Additions | - | 248 | 1,059 | 194 | - | 1,501 |
| Depreciation | (36) | (380) | (662) | (167) | (2,941) | (4,186) |
| Balance at 31 December 2019 | 31 | 584 | 1,610 | 627 | 3,301 | 6,153 |
| At 1 January 2019 | ||||||
| Aquistion cost | 136 | 1,169 | 1,847 | 742 | 6,242 | 10,137 |
| Accumulated depreciation | (70) | (453) | (635) | (141) | - | (1,299) |
| Ending balance | 67 | 716 | 1,213 | 601 | 6,242 | 8,838 |
| Aquistion cost | 136 | 1,417 | 2,906 | 936 | 6,242 | 11,638 |
| Accumulated depreciation | (106) | (833) | (1,296) | (309) | (2,941) | (5,484) |
| Balance at 31 December 2019 | 31 | 584 | 1,610 | 627 | 3,301 | 6,153 |
| Economic life | 3 years | 3 years | 3 years/5 years | 5 years | 2 years | |
| Depreciation method | Straightline | Straightline | Straightline | Straightline | Straightline |
Note 9: Inventory
| 2020 | 2019 | |
|---|---|---|
| Components | 3,238 | 406 |
| Total inventory | 3,238 | 406 |
The company buys finished goods from Hapro Electronics AS and Flextronics Industrials Ltd which purchases components and produces finished goods. Huddly AS purchases some components with long lead times and some finished goods. These are strategic purchases to optimize the supply chain and ensure the most efficient logistic. These components/products are assessed for obsolescence on a continual basis.
Note 10: Accounts receivable
The table below summarizes the accounts receivable position according to their maturity at 31 December:
| Sum | Not due | <30 d | 30-60 d | 60-90 d | >90 d | |
|---|---|---|---|---|---|---|
| 2020 | 59,270 | 54,051 | 3,959 | - | 1,253 | 8 |
| 2019 | 39,667 | 39,540 | 127 | - | - | - |
Accounts receivebles due are not interest bearing and payment terms are on avarage 30 to 45 day's. It is accrued TNOK 250 for loss on accounts receivable in 2020, and it was accrued TNOK 250 for 2019.
Note 11: Other short term receivables
| 2020 | 2019 | |
|---|---|---|
| Prepaid expenses | 3,792 | 1,901 |
| Other short term receivables | 14,405 | 13,090 |
| Total other receivables | 18,197 | 14,991 |
Other short term receivables is primarily made up of Skattefunn grant and receivable on value added tax.
Note 12: Cash and cash equivalents
| 2020 | 2019 |
|---|---|
| Cash and cash equivalents 125,962 |
53,461 |
| Ending cash and equivalents 125,962 |
53,461 |
Restricted cash at year end 2020 was TNOK 5,693 (2019 TNOK 3,141) which is related to advance payment of social taxes, deposit for office premises, and cash collateral guarantee to Polish VAT fiscal representative.
Note 13: Sharecapital and shareholders
The Company has 11,951,714 shares, with par value NOK 0.01, which give a total share capital of NOK 119,517.14. The Company has one share class, common shares, which all have the same voting and dividend rights.
The Company has 507 shareholders. Below are the 20 largest shareholders.
| Shareholder name | Number of shares | Ownerhip |
|---|---|---|
| GJEH Pty Ltd ATF GJEH Family Trust | 1,359,101 | 11.4 % |
| MERTOUN CAPITAL AS | 941,826 | 7.9 % |
| STAFF HOLDING AS | 780,500 | 6.5 % |
| SOM HOLDING AS | 700,683 | 5.9 % |
| PORTIA AS | 520,000 | 4.4 % |
| MP PENSJON PK | 460,000 | 3.8 % |
| ATF G+J Williams Super Fund | 428,642 | 3.6 % |
| SKIPS AS TUDOR | 400,000 | 3.3 % |
| KOLBERG MOTORS AS | 383,000 | 3.2 % |
| BJØBERG EIENDOM AS | 347,037 | 2.9 % |
| HØYLANDET BYGGUTLEIE AS | 333,829 | 2.8 % |
| KORINVEST AS | 251,677 | 2.1 % |
| TVECO AS | 225,000 | 1.9 % |
| MULTIPLIKATOR AS | 217,000 | 1.8 % |
| HPA HOLDING AS | 186,000 | 1.6 % |
| SALAMANDER HOLDING AS | 166,300 | 1.4 % |
| ELECTRIC WORK AS | 160,415 | 1.3 % |
| KNUT TEPPAN DESIGN AS | 150,000 | 1.3 % |
| CRESSIDA AS | 132,500 | 1.1 % |
| The Dromoland Capital Trust | 125,052 | 1.0 % |
| All others | 3,683,152 | 30.8 % |
| Total | 11,951,714 | 100.0 % |
Note 14: Long term liability
| 2020 | 2019 | |
|---|---|---|
| Product warranty provision | 8,956 | 6,534 |
| Total long term liability | 8,956 | 6,534 |
The company has two years product warranty on all products and has recognised a provision of 4% on all direct manufacturing costs occured over the last 2 years at 31 December 2020.
Note 15: Other short term liabilities
| 2020 | 2019 | |
|---|---|---|
| Accrued vacation pay | 4,866 | 4,461 |
| Lease obligation | 5,037 | 3,301 |
| Other short term liabilities | 4,229 | 5,143 |
| Total | 14,131 | 12,906 |
Note 16: Leases
The Company as lessee
Right-of-use assets
The Group's leased assets include offices. The Group's right-of-use assets are categorized and presented in the table below.
| Right-of-use assets | Real Estate | Total |
|---|---|---|
| Acquisition cost 1 January 2020 | 3,301 | 3,301 |
| Additions | 4,737 | 4,737 |
| Disposals | - | - |
| Acquisition cost 31 December 2020 | 8,038 | 8,038 |
| Accumulated depreciation and impairment 1 January 2019 | ||
| Depreciation | 3,301 | 3,301 |
| Impairment | - | - |
| Disposals | - | - |
| Accumulated depreciation and impairment 31 December 2020 | 3,301 | 3,301 |
| Book value Right-of-use assets 31 December 2020 | 4,737 | 4,737 |
| Remaining lease period | 1 year | |
| Amortization method | Straightline | |
| Lease liability | ||
| Changes in lease liability | ||
| Lease liability 1 January 2020 | 3,301 | |
| Acquired during the year | 5,037 | |
| Lease payments | (3,301) | |
| Interest payment | - | |
| Lease liability 31 December 2020 | 5,037 | |
| Current lease liability | 5,037 | |
| Non-current lease liability | - | |
| Net cash flow from lease liability | 3,301 |
Huddly
Note 17: Intercompany balances
| 2020 | 2019 | |
|---|---|---|
| Loan to Subsidiary | - | - |
| Receivable from subsidiary | - | - |
Huddly AS has in 2020 recognised a loss on receivable of TNOK 5,865 (2019 TNOK 5,465) and loss on long term loan to its subsidiary Huddly Inc. of TNOK 34,123 (2019 TNOK 25,016)
Loss on receivable is included in other costs and loss on loan is included in finance expenses.
Note 18: Overview of subsidiary
The following subsidiary is included in the consolidated financial statements.
| Company | Location | Purpose Ownership | Voting Rights | Book value | Result | Equity | |
|---|---|---|---|---|---|---|---|
| Huddly Inc. | USA | Sales and marketing |
100% | 100% | 88 | (13,186) | (40,976) |
Note 19: Events after the balance sheet date
On 22 January, Notice of Extraordinary General Meeting. The board of directors of Huddly AS hereby called for an extraordinary general meeting to be held on 29 January 2021 at 10:00 (CET).
On 29 January, Share split. At the extraordinary general meeting a decision was passed to split each of the Huddly AS shares at a ratio of 1:16 (1 existing share give 16 new shares). After the split, the share capital of the company is NOK 119,517.14 divided into 191,227,424 shares each having a nominal value of NOK 0.000625. Last day for the Huddly AS share before the share split is Tuesday 2 February 2021. First day after the share split is Wednesday 3 February 2021 (Ex. date).The extraordinary general meeting also resolved to grant the board of directors mandate to issue new shares to fulfil the Company's option programs.
The Company's only active incentive program is the new 2021 Incentive Plan implemented by the board of directors in January 2021, directed at employees and directors. Participants are granted options to subscribe for Shares in the Company based on a pre-determined strike price. The options are as a general rule subject to a three-year vesting schedule. Further, the options may only be exercised in a coordinated process lead by the Company's board of directors. This implies that the participant may only exercise a number of options each year equal to 20% of its total number of options, and the Shares issued or bought in conjunction with such exercise event are immediately put out for sale. As of the date of the Information Document (15 February 2021), the number of options outstanding under the 2021 Incentive Plan are 21,968,000 and the average strike price is NOK 2.76. Vesting and exercise of all outstanding options will lead to a dilution of 10.2%. The 2021 Incentive Plan was established by converting previous off balance sheet synthetic options to options for current employees and directors. The conversion will have a significant impact on financial statements in 2021. It will be a non-cash impact, except for social security tax on exercised options.
On 5 February, the Company received a letter, which serves as a legal process notice, on behalf of five former employees claiming that the synthetic options issued by the Company to such persons are triggered by the Company's contemplated admission to trading on Euronext Growth. The letter indicates a claim for a cash payment from the Company in an amount around NOK 135 million (based on a share price of NOK 15.50). The Company's view is that the synthetic options pursuant to the options agreements are only exercisable at a change of control event (to be settled in cash). This view is supported by the company's external law firm and a professor of law at the faculty of law. Although the claimants appear to argue that the option agreements are to be construed more widely, it is the Company's opinion that this lacks both factual and legal basis, and that the claim raised are unfounded and without merit.
On 8 February, Contemplated private placement and listing on Euronext Growth Oslo. The Company engaged ABG Sundal Collier ASA and Pareto Securities AS as Joint Global Coordinators and Joint Bookrunners to advise on and effect a contemplated private placement of new and existing shares in the Company in connection with a listing on Euronext Growth Oslo.
On 8 February, Investor presentation. In connection with the contemplated private placement and listing on Euronext Growth Oslo, the company released an updated investor presentation.
On 9 February, Offering successfully completed. In reference to made to the announcement by the Company published on 8 February, regarding the terms for the offering of shares and subsequent admission to trading on Euronext Growth Oslo. The Offering was successfully completed.
On 9 February, Share capital increase. The issuance of 19,123,200 new shares under the offering completed and has been registered with the Norwegian Register of Business Enterprises. In addition, 3,500,800 new shares and 2,476,624 new shares have been issued under incentive schemes. Following registration, the share capital of Huddly AS is NOK 135,205.03, divided into 216,328,048 shares, each with a nominal value of NOK 0.000625. Each share represents one vote in the company's general meeting.
On 12 February, Approved for admission to trading on Euronext Growth and deregistration from NOTC. The Company was informed that Oslo Børs has approved the Company's application for Listing. The first day of trading on Euronext Growth Oslo will be Tuesday, 16 February 2021. As a consequence of this, the Company's shares will be deregistered from the NOTC on 12 February after close of trading.
On 15 February, Publication of Information Document. The Information Document prepared by the Company was published in connection with the admission to trading on Euronext Growth Oslo.
On 16 February, The first day of trading on Euronext Growth Oslo. Trading under ISIN NO 001 0776990 and trading symbol "HDLY".
On 16 February, Stabilisation and over-allotment notice. Pareto Securities AS may, on behalf of the Company, engage in stabilisation activities from 16 February 2021, to, and including, 17 March 2021. Any stabilisation transactions will be aimed to support the market price of Huddly shares traded on Euronext Growth Oslo.
There have been no other material events subsequent to the reporting period that might have a significant effect on these financial statements for 2020.
