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Huddly AS — Audit Report / Information 2021
Mar 22, 2022
3625_rns_2022-03-22_59f7886e-0ce8-49df-b4d7-ec7c9a6cdec0.pdf
Audit Report / Information
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Huddly
Table of Contents
Report from the Board of Directors
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
Report from the Board of Directors
Annual Summary of Consolidated results for the year ending 31 December 2021
The board of directors present their annual summary of consolidated financial results and board report for the year ending 31 December 2021.
About the Company
Founded in Oslo, Norway in 2013, Huddly 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.
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 first quarter revenue. Huddly AS was approved for admission to trading on Euronext Growth.
In the same quarter, Huddly launched the Huddly L1, an AI collaboration camera that delivers smart user experiences in large and medium meeting rooms to make video meetings inclusive and productive for the whole team. Huddly Canvas, an AI camera whiteboard solution, received both the Red Dot Award and the iF Award for its outstanding product design.
The second quarter of 2021 saw the first shipments of Huddly L1 and overall was defined by significant growth in channel partner revenue year over year.
Later in the same quarter, the global pandemic situation resulted in severe global supply chain disturbances during the quarter, due to logistical backlogs, port congestion in the US, as well as a global semiconductor shortage. Huddly did not have an adverse direct impact from this, as Huddly had buffered up critical components. However, Huddly experienced an indirect adverse impact from strategic and channel partners.
Nils Stangnes was appointed as Huddly's Executive Vice President of Global Channel Sales in both EMEA and the Americas.
Huddly launched the software feature Gallery View in the third quarter of 2021 to cater the market demand for equity and inclusion in the new collaborative workplace. A feature which supports composite people feed in Microsoft Teams Rooms. A growing backlog validated Huddly's product position in the global marketplace.
For the first time in 2021, Huddly experienced a direct adverse supply chain impact, and orders requested for shipping in the third quarter of 2021 were delivered early in the fourth quarter of 2021. Huddly cooperated closely with all partners to mitigate supply chain risks throughout.
The fourth quarter of 2021 closed out a challenging year for Huddly with the dramatic pandemic surge followed by the Omikron variant. Direct and indirect supply chain issues continued to affect revenue and earnings as did a strong NOK to USD conversion and purchase price variances on long lead time components.
Overview of development and results (continued)
The final quarter of 2021 ended with no backorders and with standard lead time for all products. The backlog remained healthy, and having continued to invest in the organization, growing the team with 45%, Huddly accelerated its progress on the product roadmap.
Huddly's L1 camera was very well received and starting shipping in volume throughout the final quarter of 2021. In October of the same year, Huddly's strategic partner Crestron added the Huddly L1 to the Crestron Flex camera lineup. The Huddly L1 camera was also certified by Microsoft for Microsoft Teams and Skype for business.
The Huddly IQ was the first camera to offer Gallery View, a smart experience that helps give everyone an equal presence in video meetings.
In 2021, Crestron and Google continued to be strong partners and Huddly is progressing with other strategic accounts. Huddly continued with planned growth activities in Products, Go-To-Market, and support functions. Alexander Woxen was appointed CEO of Huddly to accelerate this scaling in December 2021, starting on February 1, 2022.
Results and dividends
The Group had a net loss before tax of TNOK (331,475) in 2021 compared to a net profit before tax of TNOK 100,755 in prior year. Revenue decreased by TNOK 28,626 in 2021 to TNOK 336,929. Total equity was TNOK 446,047 in 2021 and TNOK 216,307 in 2020. Total assets were TNOK 636,385 in 2021 and TNOK 300,807 in prior year.
The parent company had a net loss before tax of TNOK of (274,517) in 2021 compared to a net gain of TNOK 104,433 in prior year, of which all is allocated to retained earnings. Revenue decreased by TNOK 28,296 in 2021 to TNOK 336,838. Total equity was TNOK 505,823 in 2021 and TNOK 217,295 in 2020. Total assets were TNOK 695,883 in 2021 and TNOK 300,299 in prior year.
No dividend payments have been made during 2021 and the directors do not recommend payment of a final dividend for 2021.
Adjusted Operating results
The Group had an operating loss of TNOK (331,361) in 2021 compared to an operating profit of TNOK 105,020 in prior year. The operating costs Includes valuation of granted options with TNOK 286,001 and TNOK 3,515 in 2021 and 2020 respectively. The operating costs in 2021 include TNOK 80,994 in settlement for synthetic options. Adjusted for option valuation and the synthetic option settlement, the Group had an operating profit of TNOK 35,635 in 2021 compared to an operating profit of TNOK 108,536 In prior year.
The parent company, Huddly AS had an operating loss of TNOK (308,529) In 2021 compared to an operating profit of TNOK 117,791 In prior year. The operating costs Includes valuation of granted options with TNOK 286,001 and TNOK 3,515 in 2021 and 2020 respectively. The operating costs in 2021 includes TNOK 80,994 in settlement for synthetic options. Adjusted for option valuation and the synthetic option settlement, the parent company had an operating profit of TNOK 58,466 in 2021 compared to an operating profit of TNOK 121,306 In prior year.
Refer to Note 4: Employee share-based compensation in the Group's consolidated and the parent company's financial statements respectively for further details about option valuation and the synthetic option settlement.
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 2021 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 Simplified International Financial Reporting Standards valid as of December 31, 2021.
Basis of preparation
The financial statements of the consolidated group and the parent company have been prepared in accordance with Simplified International Financial Reporting Standards valid as of December 31, 2021. The consolidated financial statements have been prepared under the historical cost convention.
All numbers are in NOK thousands unless otherwise stated.
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 2021 received a grant from Skattefunn through The Research Council of Norway. The direct research and development costs are capitalized and amortized over 3 years.
Workplace culture
The Board believes the workplace culture is satisfactory. There have been no accidents or injuries in 2021. Huddly has strengthened its focus on culture, establishing a dedicated team and creating an Employee Sounding Board.
Equal opportunity
The Group has 103 employees as of December 31, 2021, 78 men and 25 women. The Board is composed of 4 men. The Board promotes equal opportunity, has reviewed the number of employees and positions, and found no cause to develop additional programs to address equal opportunity.
Environment
The Group does not pollute and actively seeks to recycle and minimize electronic waste.
Directors and Officers liability insurance
The Directors and management are covered by a standard D&O insurance policy with a liability limit deemed sufficient by the Board in relation to the risk and nature of the business of Huddly.
Events after the balance sheet date
Refer to Note 18 and Note 20: Events after the balance sheet date in the Group's consolidated and the parent company's financial statements respectively.
There have been no other material events subsequent to the reporting period that might have a significant effect on these financial statements for 2021.
Auditors
Huddly have appointed Mazars as the Group's auditors for the financial year 2021.
Outlook 2022
With the unique approach to software and artificial intelligence, Huddly is well positioned to take continued part in the fast-growing Unified Communication and Collaboration market that is expanding in the New Hybrid Workplace. Huddly's product roadmap is being strongly received in the market.
Huddly forecasts revenue to be in the range from MNOK 450 to MNOK 550 in FY 2022. The midpoint of MNOK 500 indicates growth of approximately 50 % YOY.
Huddly forecasts gross margin percentage to be around 50 % in FY 2022. Huddly expects global tightness in the supply chain to continue throughout 2022 and the continued increase cost for components to be partially offset by limited price increases on Huddly products. Huddly will continue to invest in Products, Go-To-Market, and support functions, to accommodate for future product launches and long-term revenue growth.
Oslo, 15 March, 2022
Graham Spencer Williams Jostein Devold Per Kåre Haug Kogstad Chairman Board member Board member
Kristian Kolberg Fredrik Alexander Woxen Board member CEO
This document is signed electronically.
Huddly Accounting policies – Huddly Group
Corporate information
Huddly Group (Huddly) 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.
Huddly is a public limited liability Company incorporated and domiciled in Norway. The address of its registered office is Haakon VIIs gate 5, 0161 Oslo, Norway.
These consolidated financial statements were approved by the Board of Directors on March 15, 2021.
Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with simplified IFRS valid as of December 31, 2021. 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 change 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.
Use of judgements and estimates
In preparing these consolidated financial statements, management has made judgements and estimates that affect the application of the Group's accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.
Principal rules for evaluation and classification of assets and liabilities
Assets intended for long term ownership or use, are classified as non-current 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. Non-current assets are valued at purchase cost. Non-current assets whose value will decline are depreciated on a straight-line basis over the asset's estimated useful life. Non-current 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 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 Group'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
The tax expense/(Income) 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.
Consolidated Statement of comprehensive income
| Notes | 2021 | 2020 | ||
|---|---|---|---|---|
| Total revenue | 336,929 | 365,555 | ||
| Gross profit | 167,720 | 205,842 | ||
| Total operating costs | (499,081) | (100,822) | ||
| Operating result | (331,361) | 105,020 | ||
| Total finance income | 6,713 | 10,829 | ||
| Total finance expense | (6,827) | (15,095) | ||
| Net financial income/(expense) | (115) | (4,266) | ||
| Net profit before tax | (331,475) | 100,755 | ||
| Tax expenses | ||||
| Net profit/(loss) for the year | (313,111) | 97,167 | ||
| Other comprehensiv income | ||||
| Total comprehensive profit for the year | (314,940) | 99,245 | ||
| Earnings per share | ||||
Consolidated Statement of financial position at 31 December
| Notes | 2021 | 2020 | ||
|---|---|---|---|---|
| ASSETS | ||||
| Total intangible assets | 122,778 | 84,214 | ||
| Total tangible assets | 18,716 | 9,437 | ||
| Total non-current assets | 141,494 | 93,651 | ||
| Total receivables | 157,615 | 80,785 | ||
| Total cash and cash equivalents | 337,276 | 126,371 | ||
| Total current assets | 494,891 | 207,156 | ||
| Total assets | 636,385 | 300,807 |
Consolidated Statement of financial position at 31 December (continued)
| Notes | 2021 | 2020 | ||
|---|---|---|---|---|
| EQUITY AND LIABILITY | ||||
| Total issued capital | 786,892 | 242,212 | ||
| Total retained earnings | (340,845) | (25,905) | ||
| Total equity | 446,047 | 216,307 | ||
| Long term liabilities | 32,132 | 8,956 | ||
| Total current liabilities | 158,206 | 75,545 | ||
| Total liabilities | 190,338 | 84,500 | ||
| Total equity and liabilities | 636,385 | 300,807 |
Oslo, 15 March, 2022
Graham Spencer Williams Jostein Devold Per Kåre Haug Kogstad Chairman Board member Board member
Kristian Kolberg Fredrik Alexander Woxen Board member CEO
This document is signed electronically.
Huddly Group Consolidated Statement of changes in equity
| Issued capital |
Share preimum |
Other equity |
FX difference |
Retained earnings |
Total equity | |
|---|---|---|---|---|---|---|
| Balance at 1 January 2020 | 120 | 230,502 | 11,360 | (1,394) | (123,756) | 116,831 |
| Balance at 31 December 2020 | 120 | 230,502 | 11,591 | 684 | (26,589) | 216,307 |
| Balance at 1 January 2021 | 120 | 230,502 | 11,591 | 684 | (26,589) | 216,307 |
| Balance at 31 December 2021 | 135 | 508,285 | 278,472 | (1,146) | (339,700) | 446,047 |
Huddly Group Consolidated Statement of cashflow
| Cashflow from operations Net change in cash from operations 21,570 131,730 Cashflow from investments Net change in cash from investments (93,453) (60,491) Cashflow from financing Net change in cash from financing 282,789 1,147 Net change in cash |
Notes | 2021 | 2020 | |
|---|---|---|---|---|
| End balance bank deposits | 337,276 | 126,371 |
Notes to the Consolidated financial statements
Note 1: Revenue and segment information
The market for Huddly's smart cameras is global. The Management team has therefore determined the operating segments on this basis. The Group considers the business as one operational segment.
The Group's operating profit arises from activities in this segment which is the only revenue generating segment across the entire operation irrespective of geographic location.
Performance is measured by the Management team based on the operating segment's revenue and profitability on a global basis.
The Management team allocates resources in assessing performance as well as making strategic decisions. This is consistent with the internal reporting submitted to the chief operating decision maker, as defined by the Management team.
Principles of revenue recognition are stated in accounting principles to the consolidated financial statements, section: revenue recognition.
Revenue by customer segment
In the following table, revenue is disaggregated by customer segment, as defined by the Management team.
| Revenue by customer segment | 2021 |
|---|---|
| Total Revenue | |
| Total Revenue |
Note 2: Government grants
The Group's project: 331274 for 2021 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 2021 during the autumn of 2022. The deduction percentage for 2021 and 2020 for all internal research and development is set at 19 percent of the allowed total project limit.
| Reduced | Reduced | ||
|---|---|---|---|
| Grants from | Amount | salary cost | other cost |
| Total | 4,750 | 4,165 | 585 |
Note 3: Salary and related
| 2021 | 2020 | |
|---|---|---|
| Total personnel costs | 407,626 | 40,014 |
The Group had an average of 87 full time employees on payroll in 2021, compared to 65 employees in 2020.
The Group's pension schemes satisfy the requirements in local country legislation regarding mandatory occupational pension act.
98 employees are registered in pension schemes as of December 31, 2021, compared to 64 employees in 2020.
Employee overview by country as of December 31, 2021.
| 2021 | 2020 | |
|---|---|---|
| Total | 103 | 71 |
Compensation for the management team
| Board | ||||||
|---|---|---|---|---|---|---|
| compen- | Option | Pension | ||||
| sation | Salary | exercise | cost | Other | Total | |
| Key management employees | ||||||
| Board of directors | ||||||
| Total | 450 | 7,113 | 25,343 | 194 | 2,048 | 35,148 |
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 in August 2019. The agreement has been active for full year 2021 with a compensation of TNOK 2,000.
All members of the management and the board are part of the company's 2021 incentive plan. Management and two board members participated in the option exercise and sale of shares as described in the Information Document published 15 February 2021, and the gain from sale of shares are shown in the table above.
| Note 3: Salary and related (continued) | |
|---|---|
| Shares owned / controlled by Management, Board, and their related parties | Total |
| Total | 61,948,134 |
Note 4: Employee share-based compensation Employee options
The Group's only active incentive program is the 2021 incentive plan implemented in January 2021, directed at employees and directors. Existing employees were offered to convert synthetic options to options under the 2021 incentive plan under certain criteria. 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. This implies that the participant may only exercise a number of options each year equal to 20% of its total number of options. Average exercise price is NOK 3.25 per share. As at 31 December there are 72 employees and 4 directors participating in the 2021 incentive plan.
The Group has historically issued a limited number of options to employees and directors under the 2017 Incentive Plan. These options are subject to a three-year vesting schedule. Exercise price is NOK 0.000625 per share. As at 31 December there are 7 employees participating in the 2017 incentive plan and the plan is closed for new grants.
Fair value of the equity instruments are measured at grant date and is recognized over the vesting period, for both incentive plans. All equity instruments expire after five years from grant date. Share-based payments included in salary costs are TNOK 286,001 and TNOK 3,515 in 2021 and 2020 respectively.
Overview outstanding options:
| 2017 incentive plan | 2021 | 2020 |
|---|---|---|
| Options granted, outstanding 31.12 | 266,672 | 173,123 |
| 2021 incentive plan | 2021 | 2020 |
| Options granted, outstanding 31.12 | 18,992,588 | - |
Note 4: Employee share-based compensation (continued)
Synthetic options
The Group had per December 2020 2,362,333 outstanding synthetic options. 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 Huddly AS to a single buyer or two or more buyers acting in concert, over a continuous period of 12 months. In February 2021 the board offered existing employees to convert synthetic options to options under the 2021 incentive plan under certain criteria and this plan got closed for new grants. As outlined in the stock exchange announcement dated 21 May 2021, Huddly AS was sued by a group of former employees for compensation based on certain synthetic options. The company reached a settlement with the group as set out in the stock exchange notice 7 December 2021. The settlement totals TNOK 75,000 plus social security tax. The first instalment of TNOK 25,000 was paid in December 2021. Operational expenses in 2021 also include accrued social security tax of TNOK 1,878 for the first instalment. Total expensed for the second and third instalment is TNOK 26,487 and TNOK 25,897 respectively, based on NPV calculation which is discounted with a risk-free interest rate of 3 %. Operational expenses also include legal expenses of TNOK 1,731 directly related to this case. Total Operational expenses of TNOK 80,994 from this settlement is included in operational expenses in 2021. After the settlement and at 31 December, there are 5 prior employees participating in the plan.
| Overview synthetic options | 2021 |
|---|---|
| Options granted, outstanding 31.12 | 5,871,111 |
| Shares held by the board and management | |
| See Note 3: Salary and related for shares held by the management, board, and their related parties. |
Shares held by the board and management
Note 5: Intangible assets
| Development costs | Licenses | Domains | Goodwill | Total | |
|---|---|---|---|---|---|
| Balance at 1 January 2021 | |||||
| Balance at 31 December 2021 | 92,458 | 163 | 61 | 8,018 | 100,700 |
| At 1 January 2021 | |||||
| Ending balance | 70,126 | 2,297 | 61 | 8,018 | 80,501 |
| At 31 December 2021 | |||||
| Balance at 31 December 2021 | 92,458 | 163 | 61 | 8,018 | 100,700 |
| Development costs | Licenses | Domains | Goodwill | Total | |
| Balance at 1 January 2020 | |||||
| Balance at 31 December 2020 | 70,126 | 2,297 | 61 | 8,018 | 80,501 |
| At 1 January 2020 | |||||
| Ending balance | 4,625 | 61 | 8,018 | 66,175 | |
| 53,472 | |||||
| At 31 December 2020 | |||||
| Economic life | 3 years 3 years / Undecided Undecided Undecided | |
|---|---|---|
| Depreciation method | Straightline Straightline / IA | IA. |
Work performed by departments that is in relation to research and development was TNOK 76,074 and TNOK 52,309 in 2021 and 2020 respectively.
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 6: Fixed assets
| Office | ||||||
|---|---|---|---|---|---|---|
| Machines | equipment | Tools | Fixture etc. | Right-to-use | Total | |
| Balance at 1 January 2021 | ||||||
| Balance at 31 December 2021 | - | 2,032 | 2,328 | 472 | 13,883 | 18,716 |
| At 1 January 2021 | ||||||
| Ending balance | 7 1,098 |
2,965 | 631 | 4,737 | 9,437 | |
| At 31 December 2021 | ||||||
| Balance at 31 December 2021 | - | 2,032 | 2,328 | 472 | 13,883 | 18,716 |
| Office | Fixture | Right-to- | ||||
|---|---|---|---|---|---|---|
| Machines | equipment | Tools | etc. | use | Total | |
| Balance at 1 January 2020 | ||||||
| Balance at 31 December 2020 | 7 | 1,098 | 2,965 | 631 | 4,737 | 9,437 |
| At 1 January 2020 | ||||||
| Ending balance | 31 | 591 | 1,610 | 627 | 3,301 | 6,160 |
| At 31 December 2020 | ||||||
| Balance at 31 December 2020 | 7 | 1,098 | 2,965 | 631 | 4,737 | 9,437 |
| Economic life | 3 vears | 3 vears 3 and 5 vears | 5 vears 2 vears |
|---|---|---|---|
| Depreciation method | Straightline Straightline Straightline Straightline Straightline |
Note 7: Other costs
| 2021 | 2020 | |
|---|---|---|
| Total other costs | 19,490 | 14,432 |
| Audit fee | 2021 | 2020 |
| Total | 238 | 267 |
Positions are presented exclusive of VAT.
Note 8: 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 | 2021 | 2020 | |
|---|---|---|---|
| Current tax basis | (118,495) | 105,948 | |
| Tax costs in results | (18,365) | 3,588 | |
| (18,365) | |||
| Reconciliation between profit before tax and tax expense | 2021 | 2020 | |
| Profit/(loss) before tax | (331,475) | 100,755 | |
| Tax income/(expense) | 18,365 | (3,588) | |
| Specification of temporary differences due to deferred tax liabilities/(assets): | 1/1/2021 | 31/12/2021 | Change |
| Total deferred tax assets | (7,178) | (27,274) | 20,096 |
| 3,465 | 5,196 | (1,732) | |
| Net deferred tax assets recognized in the balance sheet | (3,713) | (22,077) | 18,365 |
Deferred tax assets are recognized for tax loss carryforward 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 criteria in IAS 12 were not met for Huddly Inc.
Note 9: Earnings per share
Ordinary earnings per share is calculated by taking the net profit/(loss) for the year, divided by outstanding shares at year end deducted by treasury shares.
| 2021 | 2020 | |
|---|---|---|
| Result for the year attributable to the shareholders in the consolidated company | ||
| Result for the year attributable to the shareholders | (313,111) | 97,167 |
| Basic shares | (1.45) | 8.14 |
| Fully diluted shares | (1.30) | 6.72 |
| Fully diluted shares | ||
| Fully diluted shares | 241,158,403 | 14,468,419 |
See Note 4: Employee share-based compensation for a description of options and synthetic options.
Note 10: Leases
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 | Total |
|---|---|
| Acquisition cost 1 January 2021 | |
| Acquisition cost 31 December 2021 | 23,226 |
| Accumulated depreciation and impairment 1 January 2021 | |
| Accumulated depreciation and impairment 31 December 2021 | 9,342 |
| Book value right-of-use assets 31 December 2021 | 13,883 |
| Lease liability | |
| Changes in lease liability | |
| Lease liability 31 December 2021 | 13,911 |
| Current lease liability | 13,911 |
| Non-current lease liability | - |
| Net cash flow from lease liability | 6,278 |
Right of use asset and lease liability additions during the year represent the new office premises in Oslo.
Note 11: Inventory
| 2021 | 2020 | |
|---|---|---|
| Total inventory |
The Group buys finished goods from Hapro Electronics AS and Flextronics Industrials Ltd which purchases components and produces finished goods. Normally the Group purchase finished goods for direct sale, but some goods and components are purchased for strategic reasons. The change in inventory during 2021 increased following investments in supply chain to limit future component and manufacturing risk. These are strategic purchases to optimize the supply chain and ensure the most efficient logistic. Components/products are assessed for obsolescence on a continual basis.
Note 12: Accounts receivable
The table below summarizes the accounts receivable position according to their maturity at 31 December:
| Sum | Not due | 30-60 d | 60-90 d | >90 d | |
|---|---|---|---|---|---|
| 2021 | |||||
| 2020 |
Payment terms are on average 30 to 45 days. Accounts receivables due are not interest bearing
It is accrued TNOK 250 for loss on accounts receivable in both 2021 and 2020.
Note 13: Other short-term receivables
| 2020 |
|---|
| 18,233 |
Other short-term receivables are primarily made up of Skattefunn grant and receivable on value added tax. Deposits compromise of deposit for office premises and demo room space.
Note 14: Cash and cash equivalents
| 2021 | 2020 | |
|---|---|---|
| Ending cash and equivalents | 337,276 | 126,371 |
Restricted cash at year end 2021 was TNOK 10,569 and is related to advance payment of social taxes and deposit for office premises. In 2020, restricted cash was TNOK 5,693 and included cash collateral guarantee to Polish VAT fiscal representative.
Capital raised in connection with listing on the Euronext Growth in 2021 was TNOK 277,799 net of transactions cost.
Note 15: Share capital and shareholders Huddly AS has 216,328,048 outstanding shares, with par value NOK 0.000625, which give a total share capital of NOK 135,205.
The Company has one share class, common shares, which all have the same voting and dividend rights.
The Company has 1,909 shareholders at end December 2021. Below are the 20 largest shareholders.
| Shareholder name | Number of shares | Ownerhip |
|---|---|---|
| Total | 216,328,048 | 100.0 % |
Issue of share capital
In conjunction with new shares in the Primary offering and subsequent listing on Euronext Growth in Q1 2021, the share capital increased by NOK 11,952 by issuing 19,123,200 new shares, each at a nominal value of NOK 0.000625. The subscription price was NOK 15.50 per share.
On new shares based on the 2017 Incentive Plan, share capital increased with NOK 1,547.89 by issuing 2,476,624 new shares each at a nominal value of NOK 0.000625. The subscription price was NOK 0.000625 per share. Of the total proceeds of NOK 1,547.89, all was allocated as share capital in the statement of financial position.
On new shares based on the new 2021 Incentive Plan, share capital was increased with NOK 2,188 by issuing 3,500,800 new shares, each at a nominal value of NOK 0.000625. The subscription price was NOK 2.046655164533821 per share.
Total issued share capital during the year was total NOK 15,688 and closed at NOK 135,205 at 31 Dec 2021. Share capital at 31 Dec 2020 was NOK 119,517.
Note 16: Long term liability
| 2021 | 2020 | |
|---|---|---|
| Total long term liability | 32,132 | 8,956 |
Other long-term liabilities include accrued settlement of synthetic option claim inclusive of associated social taxes. Further details on synthetic option settlement as outlined in the stock exchange notice on 7th December 2021 can be found in Note 4: Employee share-based compensation.
The Group has two years product warranty on all products and has recognized a provision of 3% on all direct manufacturing costs occurred over the last 2 years at 31 December 2021. This compared to 4% in 2020.
Note 17: Other short-term liabilities
| 2021 | 2020 | |
|---|---|---|
| Total | 55,040 | 15,622 |
Other short-term liabilities include accrued social security tax, accrued social security tax on option expense, and accrued settlement of synthetic option claim inclusive of associated social taxes.
Further details on synthetic option settlement as outlined in the stock exchange notice on 7th December 2021 can be found in Note 4: Employee share-based compensation.
Note 18: Events after the balance sheet date
On 11 Jan 2022, The board of directors of Huddly AS resolved a program for repurchase of own shares. The board of directors of Huddly AS (the "Company") has, based on the authorization from the Extraordinary General Meeting on 29 January 2021, resolved that the Company shall repurchase own shares on Euronext Growth Oslo.
Reporting of completed repurchases of own shares
Completed repurchases of own shares will be reported in accordance with applicable laws and regulations as well as Euronext Growth Oslo Rule Book – Part II and the Guidelines.
On 12 Jan, Huddly appoints new CFO. Huddly appointed Ragnar Kjos as Chief Financial Officer (CFO). He will start
in his new position on April 1 2022. On 31 Jan, New office lease agreement signed. A new office lease agreement was signed on Stortorvet 7, 0155 Oslo, commencing 1 July 2023. The lease period is 6 years.
On 15 Feb, Office lease agreement extension. An extension to the current lease agreement at the registered office in Oslo was signed, the new lease agreement ends on 31 July 2023.
On 28 Feb, Huddly launches Networked AI Camera Platform. Huddly introduced the S1, a new state-of-the-art camera for small and medium meeting rooms and Speaker Framing, a powerful AI software, that will be made available for Huddly S1 and Huddly L1, Huddly's large-room camera.
On 8 March, GJEH Pty Ltd ATF GJEH Family Trust acquired 300,000 shares in Huddly AS at NOK 6.9193 per share. GJEH Pty Ltd ATF GJEH Family Trust is represented on the board of Huddly AS by Executive Chairman Graham Spencer Williams. Following the transaction, Graham Spencer Williams and related parties as per the MAR definition, jointly hold 21,744,655 shares in Huddly AS, representing 10.05 % of the share capital.
The current worldwide political and military environment continues to create apprehension and risk. At the presentation of the annual accounts, there is uncertainty regarding the effects of the armed hostilities in eastern Europe and sanctions imposed upon Russia, both in the short and long term. The board recognizes that this may affect the activity of the Group.
There have been no other material events subsequent to the reporting period that might have a significant effect on these financial statements.
Huddly Accounting policies – Huddly AS
Corporate information
Huddly AS is the parent company in the Huddly Group. Huddly 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.
Huddly AS is a public limited liability Company incorporated and domiciled in Norway. The address of its registered office is Haakon VIIs gate 5, 0161 Oslo, Norway.
These financial statements were approved by the Board of Directors on March 15, 2022.
Basis of preparation
The financial statements of Huddly AS (the "Company") has been prepared in accordance with simplified International Financial Reporting Standards (simplified IFRS) valid as of December 31, 2021. 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 Company has evaluated any such change to either be not applicable or with immaterial impact.
Use of judgements and estimates
In preparing these consolidated financial statements, management has made judgements and estimates that affect the application of the Company's accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.
Principal rules for evaluation and classification of assets and liabilities
Assets intended for long term ownership or use, are classified as non-current 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. Non-current assets are valued at purchase cost. Non-current assets whose value will decline are depreciated on a straight-line basis over the asset's estimated useful life. Non-current 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. 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.
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 Company 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
The tax expense/(Income) 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 Norway.
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
| Notes | 2021 | 2020 | ||
|---|---|---|---|---|
| Total revenue | 336,838 | 365,134 | ||
| Gross profit | 167,630 | 205,422 | ||
| Total operating costs | (476,159) | (87,631) | ||
| Operating result | (308,529) | 117,791 | ||
| Total finance income | 40,834 | 10,838 | ||
| Total finance expense | (6,822) | (24,196) | ||
| Net financial income/(expense) | 34,012 | (13,358) | ||
| Net profit/(loss) before tax | (274,517) | 104,433 | ||
| Tax expenses | ||||
| Net Profit/(loss) for the year | (256,152) | 100,846 | ||
| Earnings per share |
Huddly AS Statement of financial position at 31 December
| Notes | 2021 | 2020 | ||
|---|---|---|---|---|
| ASSETS | ||||
| Total intangible assets | 122,778 | 84,214 | ||
| Total tangible assets | 18,479 | 9,419 | ||
| Total financial assets | 73,025 | - | ||
| Total non-current assets | 214,281 | 93,632 | ||
| Total receivables | 157,574 | 80,705 | ||
| Total cash and cash equivalents | 324,028 | 125,962 | ||
| Total current assets | 481,602 | 206,667 | ||
| Total assets | 695,883 | 300,299 |
Huddly AS Statement of financial position at 31 December (continued)
| EQUITY AND LIABILITY Total issued capital 786,892 242,212 Total retained earnings (281,069) (24,917) Total equity 505,823 217,295 Long term liabilities 32,132 8,956 Total current liabilities 157,928 74,048 Total liabilities 190,060 83,003 Total equity and liabilities 695,883 300,299 |
Notes | 2021 | 2020 | |
|---|---|---|---|---|
Oslo, 15 March, 2022
Graham Spencer Williams Jostein Devold Per Kåre Haug Kogstad
Kristian Kolberg Fredrik Alexander Woxen Board member CEO
Chairman Board member Board member
This document is signed electronically.
Huddly AS Statement of changes in equity
| Issued capital |
Share preimum |
Other equity |
FX difference |
Retained earnings |
Total equity |
|
|---|---|---|---|---|---|---|
| Balance at 1 January 2020 | 120 | 230,502 | 11,360 | - | (125,763) | 116,219 |
| Balance at 31 December 2020 | 120 | 230,502 | 11,591 | - | (24,917) | 217,295 |
| Balance at 1 January 2021 | 120 | 230,502 | 11,591 | - | (24,917) | 217,295 |
| Balance at 31 December 2021 | 135 | 508,285 | 278,472 | - | (281,069) | 505,823 |
Huddly AS Statement of cashflow
| Notes | 2021 | 2020 | ||
|---|---|---|---|---|
| Cashflow from operations | ||||
| Net change in cash from operations | 81,489 | 142,455 | ||
| Cashflow from investments | ||||
| Net change in cash from investments | (166,211) | (71,102) | ||
| Cashflow from financing | ||||
| Net change in cash from financing | 282,789 | 1,147 | ||
| End balance bank deposits | 324,028 | 125,962 | ||
Huddly AS
Notes to the financial statements
Note 1: Revenue and segment information
The market for Huddly's smart cameras is global. The Management team has therefore determined the operating segments on this basis. The Company considers the business as one operational segment.
The Company's operating profit arises from activities in this segment which is the only revenue generating segment across the entire operation irrespective of geographic location.
Performance is measured by the Management team based on the operating segment's revenue and profitability on a global basis.
The Management team allocates resources in assessing performance as well as making strategic decisions. This is consistent with the internal reporting submitted to the chief operating decision maker, as defined by the Management team.
Principles of revenue recognition are stated in accounting principles to the consolidated financial statements, section: revenue recognition.
Revenue by customer segment
In the following table, revenue is disaggregated by customer segment, as defined by the Management team.
| Revenue by customer segment | 2021 |
|---|---|
| Total Revenue | |
| Total Revenue |
Note 2: Government grants
The Company's project: 331274 for 2021 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 2021 during the autumn of 2022. The deduction percentage for 2021 and 2020 for all internal research and development is set at 19 percent of the allowed total project limit.
| Reduced | Reduced | ||
|---|---|---|---|
| Grants from | Amount | salary cost | other cost |
| Total | 4,750 | 4,165 | 585 |
Note 3: Salary and related
| 2021 | 2020 | |
|---|---|---|
| Total personnel costs | 393,570 | 27,975 |
The Company had an average of 77 full time employees on payroll in 2021, compared to 58 employees in 2020.
The Company's pension schemes satisfy the requirements in local country legislation regarding mandatory occupational pension act.
84 employees are registered in the pension scheme as of December 31, 2021, compared to 57 employees as of December 31, 2020.
Employee overview by country as of December 31, 2021.
| 2021 | 2020 | |
|---|---|---|
| Total |
Compensation for the management team
| Board | ||||||
|---|---|---|---|---|---|---|
| compen- | Option | Pension | ||||
| sation | Salary | exercise | cost | Other | Total | |
| Key management employees | ||||||
| Board of directors | ||||||
| Total | 450 | 7,113 | 25,343 | 194 | 2,048 | 35,148 |
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 in August 2019. The agreement has been active for full year 2021 with a compensation of TNOK 2,000.
All members of the management and the board are part of the company's 2021 incentive plan. Management and two board members participated in the option exercise and sale of shares as described in the Information Document published 15 February 2021, and the gain from sale of shares are shown in the table above.
Note 3: Salary and related (continued)
| Shares owned / controlled by Management, Board, and their related parties | Total |
|---|---|
| Total | 61,948,134 |
The company's only active incentive program is the 2021 incentive plan implemented in January 2021, directed at employees and directors. Existing employees were offered to convert synthetic options to options under the 2021 incentive plan under certain criteria. 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. This implies that the participant may only exercise a number of options each year equal to 20% of its total number of options. Average exercise price is NOK 3.25 per share. As at 31 December there are 72 employees and 4 directors participating in the 2021 incentive plan.
The company has historically issued a limited number of options to employees and directors under the 2017 Incentive Plan. These options are subject to a three-year vesting schedule. Exercise price is NOK 0.000625 per share. As at 31 December there are 7 employees participating in the 2017 incentive plan and the plan is closed for new grants.
Fair value of the equity instruments are measured at grant date and is recognized over the vesting period, for both incentive plans. All equity instruments expire after five years from grant date. Share-based payments included in salary costs are TNOK 286,001 and TNOK 3,515 in 2021 and 2020 respectively.
Overview outstanding options:
| 2017 incentive plan | 2021 | 2020 |
|---|---|---|
| Options granted, outstanding 31.12 | 266,672 | 173,123 |
| 2021 incentive plan | 2021 | 2020 |
| Options granted, outstanding 31.12 | 18,992,588 | - |
Note 4: Employee share-based compensation (continued)
Synthetic options The company had per December 2020 2,362,333 outstanding synthetic options. 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 concert, over a continuous period of 12 months. In February 2021 the board offered existing employees to convert synthetic options to options under the 2021 incentive plan under certain criteria and this plan got closed for new grants. As outlined in the stock exchange announcement dated 21 May 2021, the Company was sued by a group of former employees for compensation based on certain synthetic options. The company reached a settlement with the group as set out in the stock exchange notice 7 December 2021. The settlement totals TNOK 75,000 plus social security tax. The first instalment of TNOK 25,000 was paid in December 2021. Operational expenses in 2021 also include accrued social security tax of TNOK 1,878 for the first instalment. Total expensed for the second and third instalment is TNOK 26,487 and TNOK 25,897 respectively, based on NPV calculation which is discounted with a risk-free interest rate of 3 %. Operational expenses also include legal expenses of TNOK 1,731 directly related to this case. Total Operational expenses of TNOK 80,994 from this settlement is included in operational expenses in 2021. After the settlement and at 31 December, there are 5 prior employees participating in the plan.
| Overview synthetic options | 2021 |
|---|---|
| Options granted, outstanding 31.12 | 5,871,111 |
Shares held by the board and management
See Note 3: Salary and related for shares held by the management, board, and their related parties.
Note 5: Intangible assets
| Development costs | Licenses | Domains | Goodwill | Total | |
|---|---|---|---|---|---|
| Balance at 1 January 2021 | |||||
| Balance at 31 December 2021 | 92,458 | 163 | 61 | 8,018 | 100,700 |
| At 1 January 2021 | |||||
| Ending balance | 70,126 | 2,297 | 61 | 8,018 | 80,501 |
| At 31 December 2021 | |||||
| Balance at 31 December 2021 | 92,458 | 163 | 61 | 8,018 | 100,700 |
| Development costs | Licenses | Domains | Goodwill | Total | |
| Balance at 1 January 2020 | |||||
| Balance at 31 December 2020 | 70,126 | 2,297 | 61 | 8,018 | 80,501 |
| At 1 January 2020 | |||||
| Ending balance | 53,472 | 4,625 | 61 | 8,018 | 66,175 |
| At 31 December 2020 | |||||
| Balance at 31 December 2020 | 70,126 | 2,297 | 61 | 8,018 | 80,501 |
Work performed by departments that is in relation to research and development was TNOK 76,074 and TNOK 52,309 in 2021 and 2020 respectively.
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 6: Fixed assets
| Office | ||||||
|---|---|---|---|---|---|---|
| Machines | equipment | Tools | Fixture etc. | Right-to-use | Total | |
| Balance at 1 January 2021 | ||||||
| Balance at 31 December 2021 | - | 1,796 | 2,328 | 472 | 13,883 | 18,479 |
| At 1 January 2021 | ||||||
| Ending balance | 7 1,079 |
2,965 | 631 | 4,737 | 9,419 | |
| At 31 December 2021 | ||||||
| Balance at 31 December 2021 | - | 1,796 | 2,328 | 472 | 13,883 | 18,479 |
| Office | Fixture | |||||
|---|---|---|---|---|---|---|
| Machines | equipment | Tools | etc. | Right-to-use | Total | |
| Balance at 1 January 2020 | ||||||
| Balance at 31 December 2020 | 7 | 1,079 | 2,965 | 631 | 4,737 | 9,419 |
| At 1 January 2020 | ||||||
| Ending balance | 31 584 |
1,610 | 627 | 3,301 | 6,153 | |
| At 31 December 2020 | ||||||
| Balance at 31 December 2020 | 7 | 1,079 | 2,965 | 631 | 4,737 | 9,419 |
| Economic life | 3 vears | 3 years 3 and 5 years | 5 vears | 2 years |
|---|---|---|---|---|
| Depreciation method | Straightline Straightline Straightline Straightline Straightline |
Note 7: Other costs
Positions are presented exclusive of VAT.
For further information on accrued loss on receivable Huddly Inc see Note 8: Intercompany balances and Note 12: Overview of subsidiary.
(3,713) (22,077) 18,365
Note 8: Intercompany balances
| 2021 | 2020 | |
|---|---|---|
Huddly AS ("AS") is 100% owner of Huddly Inc. (INC). In 2021, AS entered into an agreement with INC on a debtto-equity conversion of total outstanding debt. After the conversion, AS does not have any remaining receivables to INC and the related accrued losses have been reversed.
In 2020, receivables and long-term loan was 100% accrued for. As a result of the debt-to-equity conversion, the accrual was reversed and the investment in Huddly Inc. increased. Investment in Huddly Inc. amounts to TNOK 73,025 at 31 December 2021.
Note 9: 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 | 2021 | 2020 | ||
|---|---|---|---|---|
| Current tax basis | (96,082) | 119,331 | ||
| Tax costs in results | (18,365) | 3,588 | ||
| Reconciliation between profit before tax and tax expense | 2021 | 2020 | ||
| Profit/(loss) before tax | (274,517) | 104,433 | ||
| Tax income/(expense) | 18,365 | (3,588) | ||
| Specification of temporary differences due to deferred tax liabilities/(assets): | 1/1/2021 | 31/12/2021 | Change | |
| (16,876) | (100,352) | 83,476 | ||
| Total deferred tax assets | (3,713) | (22,077) | 18,365 |
Deferred tax assets are recognized for tax loss carryforwards and deductible temporary differences to the extent that the realization of the tax benefit through taxable profits is probable.
Note 10: Earnings per share
Ordinary earnings per share is calculated by taking the net profit/(loss) for the year, divided by outstanding shares at year end deducted by treasury shares.
| 2021 | 2020 | |
|---|---|---|
| Result for the year attributable to the shareholders in the parent company | ||
| Result for the year attributable to the shareholders | (256,152) | 100,846 |
| Basic shares | (1.19) | 8.45 |
| Fully diluted shares | (1.06) | 6.97 |
| Fully diluted shares | ||
| Fully diluted shares | 241,158,403 | 14,468,419 |
See Note 4: Employee share-based compensation for a description of options and synthetic options.
Note 11: Leases
Right-of-use assets The Company's leased assets include offices. The Group's right-of-use assets are categorized and presented in the table below.
| Right-of-use assets | Total |
|---|---|
| Acquisition cost 1 January 2021 | |
| Acquisition cost 31 December 2021 | 23,226 |
| Accumulated depreciation and impairment 1 January 2021 | |
| Accumulated depreciation and impairment 31 December 2021 | 9,342 |
| Book value right-of-use assets 31 December 2021 | 13,883 |
| Lease liability | |
| Changes in lease liability | |
| Lease liability 31 December 2021 | 13,911 |
| Current lease liability Non-current lease liability |
13,911 - |
Right of use asset and lease liability additions during the year represent the new office premises in Oslo.
Note 12: Overview of subsidiary
The following subsidiary is included in the consolidated financial statements.
| Company | Location | Purpose | Ownership | Voting Rights |
Book value | Result | Equity |
|---|---|---|---|---|---|---|---|
Note 13: Inventory
| 2021 | 2020 | |
|---|---|---|
| Total inventory |
The company buys finished goods from Hapro Electronics AS and Flextronics Industrials Ltd which purchases components and produces finished goods. Normally Huddly AS purchase finished goods for direct sale, but some goods and components are purchased for strategic reasons. The change in inventory during 2021 increased following investments in supply chain to limit future component and manufacturing risk. These are strategic purchases to optimize the supply chain and ensure the most efficient logistic. Components/products are assessed for obsolescence on a continual basis.
Note 14: Accounts receivable The table below summarizes the accounts receivable position according to their maturity at 31 December:
| Sum | Not due | 30-60 d | 60-90 d | >90 d | |
|---|---|---|---|---|---|
| 2021 | |||||
| 2020 |
Payment terms are on average 30 to 45 days. Accounts receivables due are not interest bearing
It is accrued TNOK 250 for loss on accounts receivable in both 2021 and 2020.
Note 15: Other short-term receivables
| 2021 | 2020 | |
|---|---|---|
| Total other receivables | 29,472 | 18,197 |
Other short-term receivables are primarily made up of Skattefunn grant and receivable on value added tax. Deposits compromise deposit for office premises and demo room space.
Note 16: Cash and cash equivalents
| 2021 | 2020 | |
|---|---|---|
| Ending cash and equivalents | 324,028 | 125,962 |
Restricted cash at year end 2021 was TNOK 10,569 and is related to advance payment of social taxes and deposit for office premises. In 2020, restricted cash was TNOK 5,693 and included cash collateral guarantee to Polish VAT fiscal representative.
Capital raised in connection with listing on the Euronext Growth in 2021 was TNOK 277,799 net of transactions cost.
Note 17: Share capital and shareholders The Company has 216,328,048 outstanding shares, with par value NOK 0.000625, which give a total share capital of NOK 135,205.
The Company has one share class, common shares, which all have the same voting and dividend rights.
The Company has 1,909 shareholders at end December 2021. Below are the 20 largest shareholders.
| Shareholder name | Number of shares | Ownerhip |
|---|---|---|
| Total | 216,328,048 | 100.0 % |
Issue of share capital
In conjunction with new shares in the Primary offering and subsequent listing on Euronext Growth in Q1 2021, the share capital increased by NOK 11,952 by issuing 19,123,200 new shares, each at a nominal value of NOK 0.000625. The subscription price was NOK 15.50 per share.
On new shares based on the 2017 Incentive Plan, share capital increased with NOK 1,547.89 by issuing 2,476,624 new shares each at a nominal value of NOK 0.000625. The subscription price was NOK 0.000625 per share. Of the total proceeds of NOK 1,547.89, all was allocated as share capital in the statement of financial position.
On new shares based on the new 2021 Incentive Plan, share capital was increased with NOK 2,188 by issuing 3,500,800 new shares, each at a nominal value of NOK 0.000625. The subscription price was NOK 2.046655164533821 per share.
Total issued share capital during the year was total NOK 15,688 and closed at NOK 135,205 at 31 Dec 2021. Share capital at 31 Dec 2020 was NOK 119,517.
Note 18: Long term liability
| 2021 | 2020 | |
|---|---|---|
| Total long term liability | 32,132 | 8,956 |
Other long-term liabilities include accrued settlement of synthetic option claim inclusive of associated social taxes. Further details on synthetic option settlement as outlined in the stock exchange notice on 7th December 2021 can be found in Note 4: Employee share-based compensation.
The Company has two years product warranty on all products and has recognized a provision of 3% on all direct manufacturing costs occurred over the last 2 years at 31 December 2021, this compared to 4% in 2020.
| 2021 | 2020 | |
|---|---|---|
| Total | 54,875 | 14,131 |
accrued settlement of synthetic option claim inclusive of associated social taxes.
Further details on synthetic option settlement as outlined in the stock exchange notice on 7th December 2021 can be found in Note 4: Employee share-based compensation.
Note 20: Events after the balance sheet date
On 11 Jan, The board of directors of Huddly AS resolved a programme for repurchase of own shares. The board of directors of Huddly AS (the "Company") has, based on the authorization from the Extraordinary General Meeting on 29 January 2021, resolved that the Company shall repurchase own shares on Euronext Growth Oslo.
Reporting of completed repurchases of own shares
Completed repurchases of own shares will be reported in accordance with applicable laws and regulations as well as Euronext Growth Oslo Rule Book – Part II and the Guidelines.
On 12 Jan, Huddly appoints new CFO. Huddly appointed Ragnar Kjos as Chief Financial Officer (CFO). He will start in his new position on April 1 2022.
On 31 Jan, New office lease agreement signed. A new office lease agreement was signed on Stortorvet 7, 0155 Oslo, commencing 1 July 2023. The lease period is 6 years.
On 15 Feb, Office lease agreement extension. An extension to the current lease agreement at the registered office in Oslo was signed, the new lease agreement ends on 31 July 2023.
On 28 Feb, Huddly launches Networked AI Camera Platform. Huddly introduces the S1, a new state-of-the-art camera for small and medium meeting rooms and Speaker Framing, a powerful AI software, that will be made available for Huddly S1 and Huddly L1, Huddly's large-room camera.
On 8 March, GJEH Pty Ltd ATF GJEH Family Trust acquired 300,000 shares in Huddly AS at NOK 6.9193 per share. GJEH Pty Ltd ATF GJEH Family Trust is represented on the board of Huddly AS by Executive Chairman Graham Spencer Williams. Following the transaction, Graham Spencer Williams and related parties as per the MAR definition, jointly hold 21,744,655 shares in Huddly AS, representing 10.05 % of the share capital.
The current worldwide political and military environment continues to create apprehension and risk. At the presentation of the annual accounts, there is uncertainty regarding the effects of the armed hostilities in eastern Europe and sanctions imposed upon Russia, both in the short and long term. The board recognizes that this may affect the activity of the group.
There have been no other material events subsequent to the reporting period that might have a significant effect on these financial statements.
To the General Meeting of Huddly AS Independent auditor`s report
Opinion
We have audited the financial statements of Huddly AS (the Company), which comprise:
- The financial statements of the group, which comprise the balance sheet as at 31 December 2021, and the income statement, statement of changes in equity and cash flow statement for the year then ended, and notes to the financial statements, including a
- summary of significant accounting policies, and The financial statements of the company, which comprise the balance sheet as at 31 December 2021, and the income statement, statement of changes in equity and cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. The financial statements give a true and fair view of the financial position of the group as at
In our opinion:
- The financial statements comply with applicable statutory requirements,
- 31 December 2021, and of its financial performance and its cash flows for the year then ended in accordance with simplified application of international accounting standards according to section 3-9 of the Norwegian Accounting Act, and
- The financial statements give a true and fair view of the financial position of the company as at 31 December 2021, and of its financial performance and its cash flows for the year then ended in accordance with simplified application of international accounting standards according to section 3-9 of the Norwegian Accounting Act.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by laws and regulations and the International Ethics Standards Board for Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other Information
The Board of Directors and the Managing Director (management) are responsible for the information
In connection with our audit of the financial statements, our responsibility is to read the information and the financial statements or our otherwise appears to be materially misstated. We are required to report that fact if there is a material misstatement in the
- is consistent with the financial statements and
- contains the information required by applicable legal requirements
Responsibilities of the management for the Financial Statements
The Board of Directors and the Managing Director (management) are responsible for the preparation of financial statements that give a true and fair view in accordance with Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and for the preparation and fair presentation of the financial statements of the group in accordance with simplified application of international accounting standards according to section 3-9 of the Norwegian Accounting Act, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
going concern. The financial statements of the Company use the going concern basis of accounting insofar as it is not likely that the enterprise will cease operations. The consolidated financial statements of the Group use the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free fr report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Oslo, Norge, 15. mars 2022 Marvin Torres
Side 2 av 2 Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
reference is made to: https://revisorforeningen.no/revisjonsberetninger
Mazars AS
State Authorised Public Accountant (This document is signed electronically)