ANNUAL REPORT 2022

08.05.2023

Building leading, sustainable businesses in the drone market

As the Interim CEO of Nordic Unmanned, I am honored to lead a team of talented professionals who are building leading products and services positions in the global drone market. Despite challenging financial conditions in 2022, we are grateful for the support of our loyal customers, trusted suppliers, and long-term financing partners. We have taken significant steps to simplify the organization and reduce costs, while delivering on our commitments. We are proud to report commercial achievements that will benefit our shareholders, employees, and other stakeholders.

Our platform includes two standalone product companies and two service businesses, each serving distinct markets with significant growth opportunities ahead. AirRobot, our Germany-based company, has secured major contracts and partnerships for its lightweight military-grade sensors and drone systems. We acquired a controlling stake in Belgian drone-in-a-box developer DroneMatrix, highlighting our commitment to invest in innovative technologies with a short time to market. Our flight services business completed a record number of flight hours for the European Maritime and Surveillance Agency, and secured a major framework contract that could add more than EUR 20 million of backlog to the Nordun business unit from 2024. Ecoxy, our domestic business focused on measurement and verification of emissions, achieved alltime high revenues and a healthy margin contribution.

To finance investments, operating expenses and working capital, Nordic Unmanned raised equity from shareholders on two occasions last year. In March this year, we completed a refinancing with Sparebank1 SR-Bank and Export Finance Norway. The board announced a review of strategic alternatives aimed at evaluating certain options, including partnerships, to improve our balance sheet and creating a strong foundation for the future.

Our greatest strength is the quality of our people and their knowledge of advanced unmanned aerial systems. They are dedicated, diligent and it's a privilege to work at their side. Our people, together with Nordic Unmanned's strong market position, make me enthusiastic about having the opportunity to lead Nordic Unmanned into the future, securing a sustainable and healthy growth.

Sincerely,

Arne Roland

• AirRobot, the Nordic Unmanned subsidiary won its largest contract ever for the delivery of novel and modular AR-100 drones to the German armed forces of EUR 7.5 million

Nordic Unmanned reported consolidated operating income of EUR 17 million in 2022, compared to EUR 9.2 million in 2021, an increase of 85%
The Group had a negative EBITDA EUR 9 million in 2022 compared to negative EUR 5.3 million in 2021
Raised NOK 155 million in equity from new and existing shareholders through private placements in June and December
Nordic Unmanned acquired 55% share of the Belgian drone company DroneMatrix
plus MRO services over the next 10 years
On the 21st of October, Nordic Unmanned was awarded the OP/5 contract with the European Maritime Safety Agency (EMSA), with a value of up to EUR 20.5 million.
with a contract value expected to exceed EUR 5 million in 2023. The sensors are manufactured by AirRobot.
Simplification of organization and reduction of cost base started with reduction of business units from four to two and cost reduction from overhead.

• On the 16th of December, Nordic Unmanned UK Ltd received a 10-year framework contract from Lockheed Martin UK Ltd for the delivery of the Heimdal sensor and software

• In Q4 2022, Nordic Unmanned closed the Staaker drone development office in Oslo, Norway and increased the focus on existing product lines in AirRobot and DroneMatrix.

Key highlights 2022

Board of Directors' Report

Annual Report 2022

Nordic Unmanned ASA is the parent of the Nordic Unmanned Group, which is headquartered in Sandnes in Norway.

The business unit NUTech has two legal entities:

-

• Founded in 2005 and acquired by Nordic Unmanned in 2021, AirRobot® GmbH & Co. KG ("AirRobot") is a pioneer in the European drone industry. The company is an OEM with a leading product platform in lightweight drones tailored for military infantry use and is a long-standing supplier to the German Armed Forces (Bundeswehr) of both drone systems and Maintenance, Repair and Overhaul (MRO) services. The company has offices in Arnsberg, Germany.

• Following the acquisition in 2022, Nordic Unmanned holds a majority share of 55% in Belgian drone manufacturer DroneMatrix NV ("DroneMatrix") with its main product being a fully integrated and autonomous drone system (drone-in-a-box) with proprietary software. DroneMatrix is in Hasselt, Belgium.

The business unit Nordun has two legal entities:

• Founded in 2003 and acquired by Nordic Unmanned in 2021, Ecoxy AS ("Ecoxy") focuses on NOx measurements in Scandinavia, following the introduction of NOx taxes. Ecoxy has so far completed almost 1,200 measurement assignments, and has long-standing relations with environmental authorities in Norway, Sweden, Denmark, including Norwegian NOx Fund as well as shipping companies, engine builders and suppliers of emission reduction services. The company

• NUAer AS ("NUAer") supports the acceleration of the green transition in the maritime industry through control of marine air pollution. NUAer is a joint venture between Nordic Unmanned and the Finnish company Aeromon, one of the global leaders in development of emission monitoring technology. The

has their office in Molde, Norway.
company is located in Sandnes Norway.

Additionally, Nordic Unmanned has fours sales and operating companies:

• NORDIC UNMANNED UK Ltd. provides Nordic Unmanned with a local base to serve its UK customers, that includes Lockheed Martin. The company is

strategically located at Cranfield University, known for its aeronautical focus.
Nordic Unmanned DK ApS provides access to important facilities for testing and training of pilots. Offices is in Odense, Denmark.
Nordic Unmanned North America Group LLC is the North American entity of Nordic Unmanned and is in Baltimore, USA.
Luxembourg (2023).

• Nordic Unmanned holds a 35% share in the Joint Venture OMNI Unmanned together with OMNI Helicopters International. The company is registered in

Group overview

Unmanned aviation represents an alternative to legacy solutions which reduces time, costs and CO2 emissions, while increasing safety of operations. Nordic Unmanned aims to be a leading provider of drone flight services in Europe and a niche UAV technology provider with global ambitions. The operational priorities are safety, data driven decisions, services, and unique technology development and commercialization. The Group's overall objectives are to be the preferred solution provider of unmanned systems and services to its customers and to generate profitability and returns to its shareholders..

Business strategy

Although the growth trajectory was not as steep as anticipated, 2022 was another year of solid revenue growth for Nordic Unmanned. During H2 2022, significant efforts were made to simplify the business and reduce the cost base to align with the lower growth and higher cost of capital. This was achieved by reducing the number of business units from four to two and decreasing the total workforce from 123 FTEs at the beginning of the year to 161 FTEs by year-end. Nordic Unmanned maintained its position as a leading rotary wing operator passing 1357 flight hours of operations on the Schiebel S100 Camcopter of which Nordic Unmanned have a fleet of 3 modern systems. Nordic Unmanned also invested in training and obtained full operational capability on the long-endurance fixed-wing platform Textron Aerosonde. Nordic Unmanned has added two Aerosonde systems to its fleet , whereof the last parts were delivered in April 2023. The total number of flight hours with Aerosonde Fixed Wing was 1277 for the full year.

Nordic Unmanned has also established itself, through subsidiaries DroneMatrix and AirRobot, as a provider of proprietary technology by being awarded several contracts related to sale of products. The 145-unit AR-100 contract to German armed forces (The MIKADO II contract) and the contract as subcontractor to Lockheed Martin for delivery of the Heimdal sensor to the UK MOD, with initial call off of 110 units, as the two largest contracts.

Financial review

Background

BOARD OF DIRECTORS' REPORT

Nordic Unmanned reported consolidated operating income of EUR 17 million in 2022, (EUR 9.2 million), an increase of 85% from 2021. The Parent Company reported operating income of EUR 13.2 million in 2022 (EUR 8.3 million).

The Group had a negative EBITDA of EUR 9 million in 2022 (negative EUR 5.3 million), and negative EUR 8 million for the Parent Company (negative EUR 5.5 million). In Q4, Nordic Unmanned closed the Staaker development office in Oslo as part of a cost saving plan, and increased focus on the existing product lines in AirRobot and DroneMatrix. The Board decided in Q4 , based on the discontinuation of some of the drone projects (Staaker, Railway and Fuelcell), to do a write down assets related to products with EUR 2.4 million. Another 0.6 million of cost related to contract assets and inventory obsoleteness affects the results of Staaker and AirRobot.

As stated in the Q4 results published on 23 February 2023, the NUMAR business unit, which includes the interest in the NUAer JV and the share ownership of Ecoxy AS, has been merged with the Nordun business unit. As part of Nordic Unmanned's cost reduction efforts and focus on profitable businesses, the day-to-day activities of NUAer have been discontinued in 2022. Moving forward, Nordun will manage its technology portfolio and any customer prospects. Consequently, the Board has decided to write down the value of its subsidiary NUAer's shares, resulting in a EUR 1.3 million in the Parent Company.

Depreciation for the Group amounted to EUR 5.5 million, of which EUR 2.5 million is related to fixed assets and EUR 3 million to intangible assets and right-of-use assets. The Group's EBIT amounted to negative EUR 16.9 million, compared to negative EUR 7.3 million in 2021, while the Parent Company's EBIT amounted to negative EUR 14.6 million, compared to negative EUR 7.1 million in 2021.

The Group incurred a net loss of EUR 19.9 million for the year, compared to a loss of EUR 5.8 million in 2021, while the Parent Company incurred a net loss of EUR 18.6 million compared to a net loss of EUR 5.6 million in 2021.

The Contract Backlog increased by 50% from EUR 60 million to EUR 90 million, with services representing the largest portion of the backlog at 66%, while products represented the fastest growing part of the backlog, now accounting for 33%, driven by the significant awards related to the sale of the AR100-H drone and the Heimdal sensor.

Total assets for the Group were EUR 45.9 million in 2022, compared to EUR 45.5 million in 2021 and EUR 44 million, compared to EUR 42.4 million for the Parent Company. The Group's total equity decreased from EUR 27.6 million in 2021 to EUR 23.6 million in 2022, but still represents a solid equity ratio of 51%. The Parent Company had a total equity of EUR 23.7 million as of the end of 2022, compared to EUR 26.5 million in 2021.

Financial results

Numbers in brackets refer to 2021 financial unless otherwise is stated

Nordic Unmanned raised NOK 175 million in equity from new and existing shareholders through private placements in June and December.

At the year-end, the Group had available credit lines of EUR 5.1 million (compared to EUR 2.2 million in 2021), of which the Parent Company held available credit lines of EUR 5 million. The Group's cash and cash equivalents were EUR 0.8 million (compared to EUR 5.6 million in 2021).

Interest-bearing debt increased from EUR 10.0 million in 2021 to EUR 13 million in 2022 for the Group, and from EUR 9.4 million in 2021 to EUR 12.0 million in 2022 for the Parent Company. The short-term portion decreased from EUR 3.1 million to EUR 2.7 million for the Group and from EUR 2.7 million to EUR 2.7 million for the Parent Company.

The net cash flows for 2022 were negative with EUR 4.8 million for the Group and negative EUR 4.8 million for the Parent Company. The net cash from operations was negative with EUR 9 million and EUR 9.6 million for the Group and the Parent Company, respectively. The cash flows from investments for the Group were negative with EUR 13 million, and negative 12.7 million for the Parent Company. The proceeds from the equity issue of EUR 16.3 million contributed to the positive net cash flow of EUR 17.3 million for financing activities.

In the General Meeting of 2022, Nordic Unmanned converted to a public limited liability company (ASA). As of Q1 2022, Nordic Unmanned has also reported according to the IFRS standard and converted the accounts for 2021 accordingly. From 1 January 2022, the functional and reporting currency has been changed from NOK to EUR.

Financial review

BOARD OF DIRECTORS' REPORT

14th of February:

Nordic Unmanned completed a subsequent offering with subscription of 1 614 238 new shares raising NOK 9.7 million in gross proceeds.

22nd of February:

Nordic Unmanned signed a 4-year extension of the MRO contract with Bundeswehr for MRO services (Maintenance, repair and overhaul) for the original MIKADO I existing Bundeswehr drone fleet. The contract is expected to have a value of EUR 3 million.

13th of March:

Industry veteran Arne Roland appointed as interim CEO as Knut Roar Wiig steps down from his leadership role.

27th of March:

Nordic Unmanned appointed Pareto Securities AS as advisor to evaluate strategic options, including partnership, in order to support the next growth phase of Nordic Unmanned.

Nordic Unmanned signed an agreement for a new finance arrangement with Sparebank1 SR-Bank AS of up to EUR 16 million. The new financing include i) a EUR 12.4 million term-loan facility for the refinancing of existing EUR 9.6 million fleet loan, to inter alia finance new equipment to be used in multi-site campaigns for EMSA under the OP46 and OP5 contracts, and for general corporate purposes, ii) a renewal of the existing EUR 3 million working capital facility and iii) a EUR 0.6 million guarantee facility covering Nordic Unmanned's need for contractual performance guarantees related to its operations.

14th of April:

Nordic Unmanned announced new interim CFO. Trond Østerhus steps down after two years in the role and Knut Stålen becomes the interim CFO of Nordic Unmanned whilst the process for filling the position permanently has been initiated.

Events after reporting period

• Revenue from Nordic Unmanned's products depends, among other things, on market factors which are not controlled by Nordic Unmanned. Revenue generation

• Competing companies' products have entered the commercial stage, and the competitive situation for Nordic Unmanned's products is constantly changing.

Nordic Unmanned Parent Company currently have seasonality in its Nordun operations with negative cash flow from operations in low season.
Nordic Unmanned's business plan assumes additional revenue from existing and new products under development.
from existing Nordun contracts can be delayed as a result of customers delaying their missions.
Planned sale of noncore assets and Nordun fleet optimization could be delayed or generate less cash than planned
Nordic Unmanned's intended markets are undergoing rapid technological changes and Nordic Unmanned's services and products could fail to adjust.
Nordic Unmanned manages its liquidity passively, which means that funds are placed in floating-interest bank accounts.
in other currencies than EUR are limited, however a substantial part of the operational cost is related to NOK including personnel expenses representing approximately 30% of operating expenses in 2022. In addition, some capex and operational cost are related to USD. Nordic Unmanned uses financial instruments from time to time for hedging purposes.
Credit risks arise from cash and cash equivalents, deposits with banks as well as credit exposure to commercial customers. The risks arising from receivables are risk is considered low.

• Nordic Unmanned reported results and net assets denominated in currencies other than EUR are influenced by fluctuations in currency exchange rates. Revenues

monitored closely. Nordic Unmanned's commercial credit exposure is related to the B2G and B2B segment, where the B2G segment is by far the largest. The credit

Liability insurance

The Group has directors and officer's liability insurance with a NOK 50 million total coverage, and it covers legal costs, emergency costs and multiple other types of contingency costs.

Financial risk and capital management

Our management system is an integrated system that combines quality, safety, environmental and occupational health management.

The operational focus is always on safety and compliance, where safety standards are based on compliance to the regulations and to the internal Safety Management System principles. As a LUC holder, Nordic Unmanned is audited on an annual basis by the Civil Aviation Authority of Norway.

In 2022, Nordic Unmanned extended the scope of the SO 9001-2015 certificate to cover the UK and US entities and is now certified by DNV-GL for all operation, maintenance & sales of unmanned systems and sensor technology.

Nordic Unmanned implemented ISO 14001 and successfully completed the Initial Certification Program in December 2022 as planned. The updated certificate is expected to be published and effective from Q2 2023.

The production at AirRobot is one of the very few aviation-standard drone design and production facilities in Europe that is certified in accordance with EN 9100.

Ecoxy is the leading Norwegian provider of accredited emission measurements for the shipping and oil and gas industry. Ecoxy is also accredited to verify GHG reporting under EU ETS and holds an ISO 9001 certificate.

Safety and compliance

Diversity & inclusion

The management has continued to focus on diversity and inclusion and recognizes that a diverse workforce brings an essential contribution to the Group's success and its ability to be innovative. Drawing on the various experiences and perspectives of our employees adds great value. In 2022 this was formalized in an Equality, diversity and inclusion policy. Nordic Unmanned have more than 15 nationalities and all age groups are represented in the organization.

During the last year, the percentage of female employees increased from 19% to 23%.

Unfortunately, there are few female pilots and technicians available within the industry. In administrative roles there are 35% are women. In the senior management team 2 out of 7 is female (29%), and in the Board there are 3 female members out of total 7 members (43%).

Analysis is made on a regular basis to ensure no gender gap in pay occurs. No deviation in pay based on gender has been identified. Compensation for pilots and technicians follows the Union agreement, and for other personnel compensation is determined based on responsibility, qualifications and seniority. Diversity and inclusion are part of the AMU agenda. Through our JUST culture there is a low threshold to report concerns and incidents. No reports have been made regarding breach of the Equality, diversity and inclusion policy. Based on the work environment in Nordic Unmanned, no elevated risk in this area has been identified.

All employees in Nordic Unmanned are employed in full time positions, and any part time employees in the subsidiaries are offered part time positions based on their own requests.

Employees

The number of employees increased from 123 at year end 2021 to 161 at year end 2022, whereof 57 were employed in the subsidiaries (39 at year end 2021). There was a steady growth in the number of employees until a peak of 178 employees in August 2022. Natural turnover and a restructuring to leverage synergies between the acquired companies reduced the number of employees for the remainder of the year. During the restructuring of Nordic Unmanned in Q3 2022 13 employees were laid off. The full effect of this did not impact the cost base before January 2023 due to a three months notice period.

Employees who are on paid leave due to sickness or parental leave are given full salary compensation during their leave . Absence due to illness increased to 4,74% in 2022 (from 2,4% in 2021), mainly driven by not work-related long-term sick-leaves and a peak of short-term sick-leaves towards the end of the year. There have not been reported any major injuries which have caused absence from work. The Group has a pension scheme for all employees, following local legislation for each company.

The Board considers the working environment in the Group to be satisfactory. Work Committee (AMU) is functioning well, and the occupational health service have been included as a member of the committee from Q2 2022. The first union agreement for a drone company was put in place and have been effective from March 1st, 2022. The management has a close cooperation with the Union on an ongoing basis.

Nordic Unmanned has closed down all of its R&D operations in Norway. There are R&D operations in the subsidiaries AirRobot and DroneMatrix related to the product lines, including further development of the groups drone systems, payloads and sensors.

Research and development (R&D)

ESG

Nordic Unmanned is committed to sustainable business practices. Nordic Unmanned has made significant contributions to the environment and society in 2022. Our successful completion of the initial certification program for ISO 14001 and implementation of an environmental management system formalizes our existing commitment to protecting the planet and working towards our vision of guarding the lives of the many.

In 2022, Nordic Unmanned is also proud to have achieved the following accomplishments;;

Assisted in saving the lives of over 3,000 people
Conducted SOx and NOx measurements on 977 vessels
Conducted emission measurements and general maritime surveillance by flying over 1,713 vessels.
compared to manned aviation

• Flown for nearly 3000 hours, replacing higher-emission alternatives and saving our customers for an estimated 4770 tones worth of CO2

Nordic Unmanned's commitment to sustainability is a core value, and Nordic Unmanned actively seeks to increase positive impact and reduce negative impact on the economy, environment, and people, including climate and human rights. Together with the industry, Nordic Unmanned is working to make its business, and the industries it operates in, more sustainable.

Nordic Unmanned is committed to fostering a workplace culture that values diversity, equality, and inclusion, provides a safe and healthy work environment, and promotes continuous learning and development. Additionally, Nordic Unmanned has played a pivotal role in establishing the drone education at Sola high school starting in 2023 and have entered a collaboration with the local vocational school, Fagskolen, to help them establish their drone studies. Nordic Unmanned also hosted the inaugural Drone Safety Summit as part of Solakonferansen last year, which will now be a fixed conference moving forward, in partnership with Avinor. These initiatives aim to contribute to the local community and advance the latest developments and best practices in drone safety and regulations.

Nordic Unmanned is dedicated to upholding transparency and accountability in our ESG endeavors. As part of this commitment, Nordic Unmanned has updated its supplier selection process and implemented a human rights due diligence process, allowing Nordic Unmanned to identify key risks and prioritize actions to mitigate them. Nordic Unmanned has also fulfilled mandatory elements required by the transparency act, such as reporting on the supply chain due diligence efforts, reporting on efforts to address conflict minerals, and updating anti-corruption policies and procedures.

Nordic Unmanned's ESG policies are available online at Nordic Unmanned's website. These documents describe the approach to a sustainable business and outline how Nordic Unmanned manages sustainability topics. It must be seen in conjunction with other governing documents and policies, available at the online sustainability library.

The CEO, together with the executive team, is the owner of and responsible for the overarching ESG management, setting the tone from the top, ensuring that ESG is embedded across systems and functions, and ensuring that the work is in line with stakeholders' expectations.

These documents are available at https://nordicunmanned.com/investor-relations/esg-in-nordic-unmanned/

In 2023, Nordic Unmanned will have a simplified structure and clear market focus to secure profitable growth within the central business units. The NUMar business unit has become a part of Nordun in 2023, representing the drone-as-a-service offered by Nordic Unmanned. NUGlobal has developed into a sales and distribution unit for the NUTech portfolio of products.

In 2023, the focus will be on drone flight services (Nordun) and technology products (NUTech). Revenue from the two segments, operations, and technology, is expected to be of equal size in 2023 after a year with significant growth and contract award within sale of own technology. The contracts awarded in the second half of 2022 provide a strong backlog for both segments.

The 2022 awards related to Mikado II (145 AR100-H for the German Army), and the Tiquila contract (Partner with Lockheed Martin as subcontractor delivering the Heimdal sensor to the UK MOD) represent a significant part of the backlog. The Board wishes to underline that there are uncertainties related to this future guidance and that the result may differ from the guiding, both better and worse.

Nordic Unmanned will seek to drive profitability through improved efficiency, utilization of crew and assets, reduction of operational costs and the next generation of BVLOS contracts with a rate increase. The expected shift in technology product mix from reseller products only, to primarily sales and distribution of our own product portfolio will materially improve margins and profits.

Nordic Unmanned has engaged Pareto Securities AS to advise on and evaluate certain strategic options, including partnerships, in order to support the next growth phase of Nordic Unmanned and unlock shareholder value.

Nordic Unmanned is operating in a market with rapid growth and is an experienced operator of advanced drone platforms. This market is highly fragmented, has high entry barriers and with only a few large players.

Outlook

Going concern

In accordance with §3-3a of the Norwegian Accounting Act, the Board of Directors confirms that the financial statements have been prepared under the assumption of going concern.

The growth of Nordic Unmanned is capital intensive and the operation has currently a seasonality were the 2nd and 3rd quarter represent high season, while the 4th and 1st quarter represent closing down of operations, and then preparation and training for new season. This represents a challenge for operational cash flow, which is negative, especially in the 1st quarter. Also, the growth of Nordic Unmanned has been strong but also with challenges resulting in negative results and cash flow, putting pressure on our liquidity situation. Nordic Unmanned is committed to restructure, simplify its business model, and cut costs in 2023. This may lead to sale of non-strategic assets, and adjustment of the drone fleet. These conditions give rise to a material uncertainty that may cast significant doubt on the entity's ability to continue as a going concern.

As a consequence of all factors mentioned above, management and the Board of Directors have initiated processes to help solve this situation:

Nordic Unmanned raised new equity of NOK 155 million in 2022, with a subsequent offering of NOK 9.7 million in 2023.

In March 2023, Nordic Unmanned signed an agreement for a new finance arrangement with Sparebank1 SR-Bank AS of up to EUR 16 million. The refinancing included 2.7 in increased loans, and a restructured repayment schedule for the purpose financing Nordic Unmanned short-term working capital needs. The new financing facility is provided under the condition that Nordic Unmanned will raise EUR 13 million through either disposal of assets and/or equity issue within year end 2023.

Nordic Unmanned has in March 2023 appointed Pareto Securities as advisor to evaluate strategic options, including partnership, to support the next growth phase of Nordic Unmanned. Nordic Unmanned's Nordun drone flight services, as well as its technology businesses, AirRobot GmbH (military-grade lightweight drone systems) and DroneMatrix NV (drone-in-a-box solutions), are currently European leaders in their categories and set to experience significant growth in the years ahead. Disposal of assets may include both sale of parts of the modern drone fleet with a book value of EUR 22 million. The Board has acted and believe therefore that these activities will have a significant effect on the cash debt ratios and strengthen the balance sheet.

Despite the material uncertainties above, the Board's assessment is that it is appropriate to apply the going concern assumption. The Board anticipates that the Group can continue its operation activities and will have the financial resources to apply the going concern principle as the basis for the financial statements.

Consolidated statement of comprehensive income

Amounts in EUR	Notes	2022	2021
Revenues	2.1,2.2	16 097 447	9 088 767
Other operating income		888 768	97 143
Total operating income		16 986 215	9 185 911
Cost of goods sold	21	2 942 532	1 539 041
Personell expenses	2.1,23	12 795 030	6 440 359
Depreciation and amortisation expenses	3.1,3.2,3.3	5 519 030	2 066 650
I mpairments	3.2	2 417 950
Other operating expenses	2.1,2.4	10 229 747	6 460 748
Total operating expenses		33 904 289	16 506 798
Operating profit (loss)		-16 918 074	-7 320 887

Interest income	4.6	13 823	12 730
Other financial income	4.6	763 854	465 893
Interest expenses	3.3,4.2,4.6	-880 154	-227 048
Other financial expenses	4.6	-968 260	-101 676
Net financial income and expenses		-1 070 738	149 899
Income (loss) before tax		-17 988 812	-7 170 988
Income tax expense (income)	5.1	1913 589	-1 344 803
Net in come (loss)		-19 902 401	-5 826 185
Allocation of profit or loss:
Profit/loss attributable to non-controlling interests		-325 210	-42 572
Profit/loss attributable majority interest		-19 577 191	-5 783 613
Other comprehensive income:
Items that subsequently may be reclassified to profit or loss:
Currency translation differences		56 913	465 298
Total other comprehensive income for the period		56 913	465 298

Total comprehensive income for the period		-19 845 488	-5 360 887
Allocation of total comprehensive income
Total comprehensive income attributable to non-controlling interests		-325 210	-42 572
Total comprehensive income attributable to owners of the parent	4.8	-19 520 278	-5 318 315
Earnings per share ("EPS"):
Basic EPS - profit or loss attributable to equity holders of the parent	4.8	-0,67	-0,25
Diluted EPS - profit or loss attributable to equity holders of the parent	4.8	-0,67	-0,25

Consolidated statement of financial position

	Notes	2022	2021	01.01.2021
ASSETS
Non-current assets
Goodwill	32	3 307 553	1 747 063	77 817
Other intangible assets	3.2	12 507 085	11 812 673	1 593 269
Deferred tax assets	5.1		2 956 735	1 645 844
Total intangible assets		15 814 638	16 516 471	3 316 930
Aircraft and spareparts	3.1	19 115 274	8 978 943	3 934 459
Assets under construction	3.1	452 902	5 814 778
Fixtures and fittings	3.1	1 730 228	1 788 938	939 079
Right-of-use assets	3.3	985 414	1 255 568	189 588
Total tangible assets		22 283 818	17 838 227	5 063 126
Investment in associated companies	6.1		3 003	2 865
Total financial non-current assets			3 003	2 865
Other non-current assets		168 718
Total non-current assets		38 267 174	34 357 702	8 382 922
Current assets
Inventory	25	1 818 525	2 830 111	581 129
Trade receivables	2.6,6.2,7.2	908 787	433 715	387 124
Other short-term receivables	2.6.7.2	4 131 412	2 320 083	1 226 214
Total receivables		5 040 199	2 753 797	1 613 337
Cash and cash equivalents	4.5	811852	5 594 033	5 088 113
Total current assets		7 670 576	11 177 941	7 282 579

TOTAL ASSETS		45 937 750	45 535 643	નર જિટેર ૨૦૧

Consolidated statement of financial position

	Notes	2022	2021	01.01.2021
EQUITY AND LIABILITIES
Equity
Share capital	4 4	4 192 395	2 631 846	1 921 629
Treasury stock	4 4	-737 395	-213	-203
Share premium	4 4	46 867 796	33 067 697	11 423 121
Retained eamings	47	-27 399 374	-9 060 040	-2 613 782
Equity attributable to equity holders of the parent		22 923 422	26 639 291	10 730 765
Non-controlling interests	6.1	632 080	957 576
Total equity		23 555 501	27 596 866	10 730 765
Non-current liabilities

Interest bearing loans and borrowings	42	10 334 323	6 893 392	2 007 339
Non-current lease liabilities	33	715229	923 666	58 461
Other non-current liabilities	6.2	2 079 864	409 212
Deferred tax liabilities	5.1		807 477
Total non-current liabilities		13 129 416	9 033 747	2 065 800
Current liabilities
Trade payables	2.8.7.2	2 384 500	1 166 000	1 406 096
Interest bearing loans and borrowings	42	2 673 760	3 086 797	418 263
Current lease liabilities	3.3	369 242	369 242	136 253
Public duties pay able	47	1 015 045	743 818	282 296
Other current liabilities	28,4.27.2	2 810 286	3 539 173	626 028
Total current liabilities		9 252 832	8 905 030	2 868 936
Total liabilities		22 382 248	17 938 777	4 934 736
TOTAL EQUITY AND LIABILITIES		45 937 750	45 535 643	15 665 501

Consolidated statement of cash flows

For the years ended 31 December
Cash flows from operating activities (EUR)	Notes	2022	2021
Profit or loss before tax		-17 988 812	-7 170 988
Adjustments to reconcile profit before tax to net cash flows:
Net financial income/expense	4.6	892 381	-149 899
Depreciation and impairment	3.1,3.2	7 572 363	1 846 807
Amortisation and impairment of Right-of-use assets	3.3	270 154	219 843
Share-based payment expense	4.7	309 190	361 208
Working capital adjustments:
Changes in trade receivables	26	-581 474	258 765
Changes in trade payables	2.7	994 250	-458 430
Change in inventories	2.5	987 387	-1757 460
Changes in provisions and other liabilities	28	-1 466 330	538 239
Net cash flows from operating activities		-9 010 891	-6 311 916

Cash flows from investing activities
Purchase of property, plant and equipment	3.1	-8 155 007	-11 733 653
Purchase of capitalized other intangible assets	3.2	-3 290 400	-1929 740
Consideration paid in AirRobot, Ecoxy and NUAer transactions (net
of cash acquired)	6.2	-1 563 315	-6 088 149
Interest received	4.8		12 729
Net cash flow from investing activities		-13 008 723	-19 738 813
Cash flow from financing activities
Proceeds from issuance of equity	4.4	16 260 597	21 053 214
Transaction costs on issue of shares	4 4	-899 949	-901 705
Net disbursements overdraft facility
Proceeds from new debt (short/long term)		6 191 191	7 353 305
Repayment of debt (short/long term)		-3 274 171	-475 881
Payments for the principal portion of the lease liability	3.3	-273 089	-219 843
Payments for the interest portion of the lease liability	3.3	-53 377	-27 662
Interest paid	4.8	-703 185	-191 751
Net cash flows from financing activities		17 248 018	26 589 677

Net increase (decrease) in cash and cash equivalents		-4 771 596	538 948
Cash and cash equivalents at beginning of the year/period	4.6	5 594 033	5 088 113
Net foreign exchange difference		-10 585	-33 028
Cash and cash equivalents, end of year		811 852	5 594 033

Consolidated statement of changes in equity

	Share capital	Share premium	Treasury shares	Retained earnings	Shareholders Equity	Non-Controlling Interests	Total Equity
Amounts in EUR
Balance at 1 january 2021	1 921 629	11 423 121	-203	-2 613 782	10 730 765		10 730 765
Profit (loss) for the year				-5 783 613	-5 783 613	-42 572	-5 826 185
Retained earnings
Issue of share capital (Note 4.5)	614 783	20 960 678			21 575 461		21 575 46
Merger The Staaker Company AS		37 705		-37 705
Acquisition of NUAer					-	1 000 898	1 000 898
Share-based payments (Note 4.7)				361 208	361 208		361 208
Effect of put option on own shares (Note 6.2)				-737 182	-737 182		-737 182
Other				7 149	7 149		7 149
Currency translation effects (OCI)	95 433	646 193	-10	-256 114	485 502	-750	484 752
Balance at 31 December 2021	2 631 846	33 067 697	-213	-9 060 040	26 639 291	957 576	27 596 866
Profit (loss) for the year				-19 577 191	-19 577 191	-325 221	-19 902 412
Issue of share capital (Note 4.5)	1 560 550	13 800 099			15 360 648		15 360 648
Share-based payments (Note 4.7)				443 486	443 486		443 486
Purchase of own shares			-737 182	737 182
Other
Currency translation effects (OCI)				57 189	57 189	-275	56 914
Balance at 31 December 2022	4 192 395	46 867 796	-737 395	-27 399 374	22 923 422	632 080	23 555 501

Nordun

Nordun is the world's first fully integrated BVLOS (Beyond Visual Line of Sight) drone as a service pure-play business unit, incorporating all functions required to operate complex drone missions with advanced platforms and sensors. The previous maritime Data-As-A-Service (DaaS) business unit which includes the subsidiary NUAer and Ecoxy will be a part of the Nordun business unit going forward.

Nordun is the holder of a multiplatform LUC (Light Unmanned UAS Operator Certificate), allowing for operations utilizing both large tactical drones and smaller lightweight drones.

The business unit is ISO 9001 certified and has fully integrated maintenance control, operational maintenance, and training departments. In addition, the business unit includes administrative functions such as an HSEQ department, logistics department and commercial resources.

The business unit has a modern fleet of three rotary-wing Schiebel CAMCOPTER® S-100 systems (five air vehicles) and two fixed-wing Textron Aerosonde® systems (five air vehicles), in addition to a fleet of 27 smaller lightweight drones, the vast majority being Lockheed Martin Indago 3 drones. The aggregate fleet value is EUR 21 million.

Investments have been made in building an operational organization of 79 FTEs that includes trained pilots and technicians.

Nordun delivers drone services to four markets: Maritime, Defense & Security, Offshore Energy and Rail for both governmental and private enterprise clients.

BUSINESS UNITS

NUTech

The NUTech business unit is the owner of Nordic Unmanned's proprietary drone product and solutions portfolio. The current portfolio is designed, developed, and produced in European NATO countries. This includes the AirRobot product family developed and produced in Germany under AS9100 and ISO 9001 certifications, the DroneMatrix product family developed in Belgium, and the Staaker product family, developed in Norway. Technologies include UAV's ('drones') as well as technology attachments such as the Heimdal sensor, and the patent for coaxial configuration.

NUTech currently employs software developers and engineers, manufacturing and administrative resources. The size of the production facility in Germany is 1500m2. Nordic Unmanned has invested EUR 11 million in NUTech, including its own IP and the acquisition of AirRobot and DroneMatrix.

NUTech leverages a global sales and distribution network which markets Nordic Unmanned's own products, solutions, and services, as well as managing the distributors and system integration activity and our reseller activity of third-party products. The business unit represents important OEM partners such as Lockheed Martin, Textron Systems and Sky Hero.

The distribution network makes use of Nordic Unmanned established subsidiaries in Norway, the UK, Denmark, Germany, Belgium, and the US as local sales representatives, as a pathway to market.

NUTech provides products and solutions to Nordun and Nordic Unmanned's global distribution network.

BUSINESS UNITS

Notes to Financial Statement Group

1.1 General information

Corporate information

The consolidated financial statements of Nordic Unmanned ASA and its subsidiaries (collectively, "the Group" or "Nordic Unmanned") for the year ended 31 December 2022 were authorised for issue in accordance with a Board resolution on 8 May 2023. Nordic Unmanned ASA is a public limited liability company incorporated and domiciled in Norway and the whose shares are publicly traded. The Group's head office is located at Rådhusgata 3, 4306 Sandnes, Norway.

Nordic Unmanned is a global leader of high-end products and services related to drones and data capture. Through world-wide operational experience and industry leading expertise, Nordic Unmanned supports large governmental and industrial clients in the adaption of unmanned systems and services.

1.2 Basis of preparation

The consolidated financial statements of the Group comprise consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in equity, and related notes. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by The European Union ("EU"), and represents the first financial statements of the Group in accordance with IFRS. See section 8.1 for information related to first time adoption.

The consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments measured at fair value. Further, the financial statements are prepared based on the going concern assumption.

Comparative financial information is provided for the preceding period in the Consolidated statement of comprehensive income, Consolidated statement of financial position and Consolidated statement of cash flows. In extension, an additional statement of financial position as at 1 January 2021 is presented in these financial statements due to the first time adoption of IFRS.

Presentation currency and functional currency

The consolidated financial statements are presented in Euros (EUR), which is also the functional currency of the parent company effective from 1 January 2022. Prior to 1 January 2022 the functional currency of the parent was NOK. The Group has elected to present its financial statements in EUR, primairly as this is the common currency in the industry and the market that the Group operates within.

For entities in the group which have a functional currency different from the EUR, balance sheet items are translated from functional currency to presentation currency by using exchange rates at the reporting date. Items within total comprehensive income are translated from functional currency to presentation currency by applying average exchange rates for the period. If currency rates are fluctuating significantly, transaction date exchange rates are applied for significant transactions.

1.3 Significant accounting policies

Nordic Unmanned AS has selected a presentation in which the description of accounting policies as well as estimates, assumptions and judgemental considerations are disclosed in the notes to which the policies relate. Other accounting policies are presented below:

Current versus non-current classification

The Group presents assets and liabilities in the statement of financial position based on current/non-current classification.

An asset is current when it is:

Expected to be realised or intended to be sold or consumed in the normal operating cycle,
Held primarily for the purpose of trading,
Expected to be realised within twelve months after the reporting period, or
Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

It is expected to be settled in the normal operating cycle,
It is held primarily for the purpose of trading,
It is due to be settled within twelve months after the reporting period, or

There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period The Group classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

1.4 Significant accounting judgements, estimates and assumptions

The preparation of the consolidated financial statements in accordance with IFRS and applying the chosen accounting policies requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and the underlying assumptions are reviewed on an ongoing basis.

The accounting policies applied by management which includes a significant degree of estimates and assumptions or judgements that may have the most significant effect on the amounts recognised in the financial statements, are summarised below:

Estimates and assumptions:

Share based payments (note 4.7)
Recognition and measurement of deferred tax assets (note 5.1)
Purchase price allocations in acquisitions and related goodwill amounts (note 6.2)
Impairment testing of significant non-financial assets, including goodwill, other intangible assets and property, plant and equipment (note 3.2)

The Group based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

A detailed description of the significant estimates and assumptions are included in the individual note where applicable.

Accounting judgements:

Determining whether contracts with customers should be recognised over-time or point-in-time (note 2.1)
Determining to what extent deferred tax assets should be recognised (note 5.1)
Determining whether investees are controlled or jointly controlled (note 6.1). No investments held in 2021 and/or 2022 have been determined to constitute jointly controlled entities

A detailed description of the significant accounting judgements are included in the individual note where applicable.

1.5 Fair value measurement

ACCOUNTING POLICIES

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

In the principal market for the asset or liability, or
In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a nonfinancial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

Fair value disclosures

Management has assessed that the fair values of cash and short-term deposits, other receivables, trade and other payables approximate to their carrying amounts largely due to the short-term maturities of these instruments and the current risk free interest rates. The fair value of borrowings is also considered to approximate carrying values as the interest rates are floating.

2.1 Segment

Segments

The Group's operating segments are components of the business for which discrete financial information is reviewed regularly by the Chief Operating Decision Maker (or CODM) to assess performance and make decisions regarding resource allocation. The Group has assessed the CODM to be its Chief Officers team. During the year, as part of the strategic update, the CODM have reassessed the Group's operating segments, and as at 31 December 22, the Group's operating segments are Nordun, NUTech, NUGlobal and NUMar segments. Historical numbers have been allocated to the new operating segments. Assets are not allocated to segments in the reporting to CODM.

Nordun – Drone-As-A-Service Airline:

Nordun is the holder of a multiplatform LUC (Light Unmanned UAS Operator Certificate) allowing for operations utilizing both large tactical drones and smaller lightweight drones.

The business unit has a modern fleet of three rotary-wing Schiebel Camcopter S-100 systems (five air vehicles) and two fixedwing Textron Aerosonde systems (five air vehicles), in addition to a fleet of 27 smaller lightweight drones, the vast majority being Lockheed Martin Indago 3 drones.

Nordun serves four markets: Maritime, Defense & Security, Offshore Energy and Rail for both governmental and enterprise clients.

NUTech – Development and Production of own IP drone systems:

NUTech is the portfolio owner of Nordic Unmanned Group's own products, all designed, developed, and produced in European NATO countries. This includes the Staaker product family, developed in Norway, and the AirRobot product family, which is developed and produced in Germany under the AS9100 and ISO 9001 certifications. Additionally, with effect from the 30th of June, the DroneMatrix product family is also included. These products are developed in Belgium and will be produced by AirRobot in Germany.

NUTech will provide products and solutions to Group customers and Nordic Unmanned's global distribution network.

NUGlobal – Sales and Distribution:

NUGlobal is the global sales and distribution network offering Nordic Unmanned's own products, solutions, and services, as well as managing the reseller and system integration activity. The business unit represents important OEM partners such as Lockheed Martin, Textron Systems and Sky Hero. NUGlobal makes use of Nordic Unmanned established subsidiaries in Norway, UK, Denmark, Germany, Belgium and the US as local sales representatives, as a pathway to market. NUGlobal will focus on offering customers the best possible products and solutions, by direct sales, utilizing subsidiaries and the Group's global distribution network.

NUMar- Data-As-A-Service:

NUMar is a maritime Data-As-A-Service (DaaS) business unit and includes subsidiaries Ecoxy and NUAer.

Ecoxy offers accredited NOx emission monitoring services, NOx predictive emission monitoring systems (PEMS) and EU-ETS Co2 emission verification. The highly specialized environmental data company has a unique database of more than 1300 unique accredited measurements of NIS/NOR registered vessels and drilling rigs.

NUAer offers mobile maritime SOx and NOx measurement technology. NUMar serves the maritime market, which includes governmental clients, vessel owners, shipyards, and the maritime service industry

The following tables include the results for the Groups's reportable segments for the periods presented in these consolidated financial statements:

Year Ended 31 December 2022	Nordun	NUTech	NUmar	NUGlobal	Overhead	Total
Revenues	10 175 642	2 875 797	1 866 865	2 069 723	-1 811	16 986 215
Costs of goods sold	141 833	1 283 052	168 185	1 399 418	-49 956	2 942 532
Personnel Expenses	6 345 837	1 837 404	987 321	1 025 676	2 598 792	12 795 030
Impairments	0	2 417 950	0	0	0	2 417 950
Other Operating Expenses	5 249 700	1 024 133	509 302	710 273	2 736 339	10 229 747
EBITDA	-1 561 728	-3 686 742	202 057	-1 065 644	-5 286 987	-11 399 044
Year Ended 31 December 2021	Nordun	NUTech	NUmar	NUGlobal	Overhead	Total

Revenues	6 270 488	1 433 283	408 583	1 075 634	-2 077	9 185 911
Costs of goods sold	427 963	326 515	57 101	719 494	7 968	1 539 041
Personnel Expenses	3 339 018	525 848	270 453	468 423	1 836 617	6 440 359
Other Operating Expenses	3 818 931	197 466	92 581	375 442	1 976 328	6 460 748
EBITDA	-1 315 424	383 454	-11 553	-487 724	-3 822 991	-5 254 237

European Maritime Safety Agency ("EMSA") is the Group's only customer that accounts for more more than 10% of the Group's consolidated revenues in 2022 and 2021. In 2022 EMSA accounted for 50% of total consolidated revenue (62% in 2021), and is recognized in the Nordun segment.

ACCOUNTING POLICIES

Revenue

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The Group has generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods or services before transferring them to the customer.

Revenue from the sale of goods is recognised over-time to the extent the Group's performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. Progress is measured using a cost-to-cost based approach. Other sale of goods are recognised at the point-in-time when control of the asset is transferred to the customer. The determination of over-time versus point-in-time revenue recognition and determining progress requires the use of judgement. The input method is used for revenue recognition over time and measures performance based on efforts or inputs towards satisfying revenue recognition relative to the total expected inputs. Key inputs are cost of goods sold, engineering cost and production cost related to labor hour expended. The Group have remaining delivery commitments towards the MIKADO II contract of delivering 145 AR-100 drone systems to Bundeswehr.

Revenue from services is recognised over-time as the customer simultaneously receives and consumes the benefits provided by the Group's performance as the Group performs.

The Group's revenue from contracts with customers has been disaggregated and presented in the tables below:

Timing of revenue recognition:	2022	2021
Products and services transferred at point in time	16 260 213	9 185 911
Products and services transferred over time according to input method	726 002	-
Total	16 986 215	9 185 911

Per area of operation:	2022	2021

Nordun	10 175 642	6 270 488
NUTech	2 875 797	1 433 283
NUmar	1 866 865	408 583
NUGlobal	2 069 723	1 075 634
Overhead	-1 811	-2 077
Total	16 986 215	9 185 911

Per geographic market:	2022	2021
Norway	4 618 654	1 511 858
France	2 084 655	1 678 777
Spain	2 332 135	1 617 587
Germany	3 495 481	1 366 423
Estonia	1 460 503	-
Finland	1 009 267	3 410
Portugal	475 695	668 050
Romania	57 519	360 783
Lithuania	-	1 178 603
Other	1 452 307	800 420
Total	16 986 215	9 185 911

2.3 Employee benefit expenses

ACCOUNTING POLICIES

Employee benefit expenses comprise all types of remuneration to personnel employed by the Group (ie. not contracted manpower) and are expensed when earned. Ordinary salaries can be both fixed pay and hourly wages and is earned and paid periodically. Holiday pay is earned on the basis of ordinary pay and is normally paid in the holiday months of the following year. The employer's national insurance contribution (social security) is calculated and expensed for all payroll related costs including pensions. Pension contributions are earned on a monthly basis. Other employee expenses consist of other benefits such as insurance, telephones and remuneration to the Board of Directors.

Pensions

The Norwegian entities in the Group have defined contribution pension plans for its employees which satisfies the statutory requirements in the Norwegian law on required occupational pension ("lov om obligatorisk tjenestepensjon"). A total of 161 employees were part of the Group's pension plan at 31.12.22.

Contributions are made to the pension insurance plans and the related expenses are charged to the income statement in the period to which the contributions relate. Once the contributions have been paid, the group has no further pension payment obligations.

Employee benefit expenses	2022	2021
Salaries	10 810 595	5 946 816
Social security costs	2 079 284	895 372
Share-based payments (Note 4.7)	443 069	361 208
Social security costs Share-based payments	-170 200	101 835
Pension costs	499 281	90 728
Capitalized assets and work in progress	-1 678 123	-745 741
Hired Personnel*	977 742	158 932
Other employee expenses	-166 618	-368 791
Total employee benefit expenses	12 795 030	6 440 359
Average number of full time employees (FTEs)*	161	76

*Personnel Expense include short term hired crew personnel. These are not included in the number of FTE's.

At the end of the reporting period, members of the Board and management held shares and share options in Nordic Unmanned AS. For information on remuneration to Management and the Board of Directors, including also disclosures on shares and share held, see note 7.1.

Employee share program

The company has a share purchase program for all employees, including senior executives. No new awards were granted in 2022. The shares in the 2020 and 2021 programs were offered at a 30 percent discount and are subject to a three-year lock-up during which employees are not allowed to sell the shares. In connection with the share purchase program, all employees are also offered an interest free loan of 2/3 of the basic amount in the National Insurance scheme ("G"), to be repaid within one year. In total, employees subscribed for EUR 1.08 million in 2021. See note 4.7 for more information about share-based payments.

2.4 Operating expenses

ACCOUNTING POLICIES

Other operating expenses are recognised when they occur and represent a broad range of operating expenses incurred by the Group in its day-to-day activities. Other operating expenses consist of expenses that are not classified on the lines for cost of materials, employee benefit expenses, depreciation and amortisation.

Other operating expenses	2022	2021
Audit and accounting fees	770 085	406 982
HR consulting fees	39 346	135 798
Insurance expenses	964 149	334 609
Lease expenses (see note 3.3)	928 270	147 379
Legal expenses	817 913	401 737
Other consulting fees	2 023 648	1 607 229
Other operating expenses	952 736	902 637
Training expenses	1 983 464	1 694 623
Travel expenses	1 750 137	829 752
Total other operating expenses	10 229 747	6 460 748

Auditor fees	2022	2021
Audit fee	158 556	63 517
Other services	56 979	65 637
Total remuneration to the auditor	215 535	129 155

Audit fee:

The amounts above are excluding VAT.

2.5 Inventory

ACCOUNTING POLICIES

Spare parts and consumables are measured at cost on a first-in/first-out basis.

	31.12.2022	31.12.2021	01.01.2021
Work in progress and materials	1 382 693	1 063 611	563 380
Finished goods	1 026 369	2 181 966	304 274
Provision of obsolescence	-590 537	-415 465	-286 525
Total	1 818 525	2 830 111	581 129

During 2022 EUR 1 million (2021: EUR 0.11 million) was recognised as an expense for inventories carried at net realisable value. This is recognised in cost of sales.

Work in progress and finished goods include consumable spare partes, rotables and products for sale. Rotables and spareparts which have undergone maintenance, repair and overhaul (engines and related components).

ACCOUNTING POLICIES

Trade receivables

A receivable represents the Group's right to an amount of consideration that is unconditional.

Contract assets

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.

	31.12.2022	31.12.2021	01.01.2021
Trade receivables from third-party customers	908 787	433 715	387 124
VAT receivable	135 781	251 717	103 952
Contract asset	727 003	947 470	287 279
Pre-paid suppliers*	1 369 850	892 059	378 041
Other receivable**	1 898 777	228 836	456 942
Total current receivables	5 040 199	2 753 797	1 613 337

Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days. For terms and conditions relating to related party receivables, refer to Note 7.2.

* Pre-paid suppliers contains pre-payments from AirRobot, following purchases for the MIKADO II contract that amounts to 0.5 MEUR.

** Other receivable contains rewarded insurance claims for total loss of assets. Awaiting payments of 1.5 MEUR in 2023.

Guarantees

The Group has contractual guarantees totalling EUR 24 025 expiring in 2023.

Expected credit loss

The Group does not expect credit loss of current outstanding receivables. The Groups main costumers are government institutions based on contract. There are non ongoing disputes.

2.7 Provisions

ACCOUNTING POLICIES

Provisions are liabilities with uncertain timing or amount and are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the expenditure required to settle the present obligation at the balance sheet date, that is, the amount that an entity would rationally pay to settle the obligation at the balance sheet date or to transfer it to a third party. Social security provisions related to the share based payments are made based on the social security contributions expected to be paid on exercise of the share options when the options are fully vested.

A provision is made and calculated based on management's assumptions at the time the provision is made and is updated as and when new information becomes available. All provisions are reviewed at the end of each reporting period.

Other commitments and contingencies

Contingent liabilities are not recognised in the financial statements. Significant contingent liabilities are disclosed, with the exception of contingent liabilities where the possibility of an outflow of economic resources is considered remote.

Contingent assets are not recognised in the financial statements but are disclosed when an inflow of economic benefits is considered probable. The Group has no contingent assets or liabilities that meet the criteria for disclosure.

Other commitments

The Group did not provide guarantees to or on behalf of third parties or related parties. The Group has no other significant commitments to disclose.

2.8 Payables

ACCOUNTING POLICIES

Trade and other payables are liabilities, i.e. present contractual obligations arising from a result of past events where settlement is expected to result in an outflow of resources (payment). Trade payables consist of invoices for goods and services where the Group has received the significant risks and rewards of ownership as of 31.12.

Trade and other payables are measured at fair value upon initial recognition and subsequently at amortised cost. Trade and other payables are expected to be settled within the normal operating cycle within twelve months after the reporting period.

	31.12.2022	31.12.2021	01.01.2021
Trade payables	2 384 500	1 166 000	1 406 096
Total trade payables	2 384 500	1 166 000	1 406 096

			361 914
			-
Put option on own shares (see Note 6.2)	-	872 332	-
Other accrued expenses	1 500 333	827 281	264 114
Other current liabilities	2 810 286	3 539 173	626 028
Accrued salaries Short term PPA consideration	1 519 256 -209 304	1 064 247 775 314

3.1 Property, plant and equipment

ACCOUNTING POLICIES

Property, plant and equipment ("PP&E") is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. When significant parts of PP&E are required to be replaced at intervals, the Group depreciates them separately based on their specific useful lives. All other repair and maintenance costs are recognised in profit or loss as incurred.

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets. The residual values, useful lives and methods of depreciation of PP&E are reviewed at each financial year end and adjusted prospectively, if appropriate.

The Group assesses, at each reporting date, whether there is an indication that property, plant and equipment may be impaired. If such indication exists, the Group estimates the asset's or CGU's recoverable amount. The recoverable amount is the higher of an asset's or CGU's fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.

Assets under construction include assets that have not yet been fully delivered and accepted by the Group at the reporting date. The construction and delivery time of these systems are normally in the range of 6-12 months and will be transferred to Aircrafts and spareparts upon delivery and final acceptance test. No depreciation charge are regognized towards assets under construction.

Impairment

There has been no impairment losses recognised related to property, plants and equipment. However, impairment triggers has been identified related to part of the drone fleet that were not generating revenue as per year end and that were not committed to any contract or source of revenue as per year end. Sources of measurement of fair value used in impairment testing include quoted prices for similar systems from Original Equipment Manufacturer and sale / lease offers sent to potential buyers of the systems. There is not an established 2nd hand market or market prices for drone assets, and there is hence a significant uncertainty related to the book values in the balance sheet related to our drone fleet. Including market for sale and use cases for each type of drone, as well as discount rate and residual value assumptions related to net present value calculations. Relativly small changes to key assumtions will cause impairment.

	Fixtures, fittings and tools	Aircraft and spareparts	Assets under construction	Total
Cost as at 1 January 2021	1 213 809	4 371 893	-	5 585 701
Additions	1 493 816	5 494 757	5 714 103	12 702 677
Transfer	-194 246	194 246	-	-
Currency translation effects	124 829	347 553	100 675	573 057
Cost as at 31 December 2021	2 638 209	10 408 449	5 814 778	18 861 435
Additions	445 265	6 989 230	959 249	8 393 744
Transfers	-	6 321 124	-6 321 124	-
Disposals*	-	-1 352 454	-	-1 352 454
Currency translation effects	-29 275	684	-	-28 591
Cost as at 31 December 2022	3 054 199	22 367 033	452 903	25 874 135

Depreciation and impairment as at 1 January 2021	274 730	437 433	-	712 163
Depreciation for the year	294 893	949 145	-	1 244 038
Transfer	-27 733	27 733	-	-
Additions	302 116	-	-	302 116
Currency translation effects	5 265	15 194	-	20 458
Depreciation and impairment as at 31 December 2021	849 271	1 429 505	-	2 278 776
Depreciation	473 882	2 021 742	-	2 495 623
Disposals*	-	-199 488	-	-199 488
Currency translation effects	819	-	-	819
Depreciation and impairment as at 31 December 2022	1 323 971	3 251 759	-	4 575 730

Net book value:
At 1 January 2021	939 079	3 934 459	-	4 873 538
At 31 December 2021	1 788 938	8 978 943	5 814 778	16 582 659
At 31 December 2022	1 730 228	19 115 275	452 903	21 298 405
Economic life (years)	3-5	5-10
Depreciation plan	Straight-line method	Straight-line method	No depreciation

*Disposals is related to total loss of assets (drones and payloads) in are all insurance claims. Pending insurance claim at 31.12.22 is 1.5 MEUR.

3.2 Intangible assets

ACCOUNTING POLICIES

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss in the expense category that is consistent with the function of the intangible assets.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss.

Research and development costs

Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset when the Group can demonstrate:

The technical feasibility of completing the intangible asset so that the asset will be available for use or sale
Its intention to complete and its ability and intention to use or sell the asset
How the asset will generate future economic benefits
The availability of resources to complete the asset
The ability to measure reliably the expenditure during development

Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It is amortised over the period of expected future benefit. Amortisation is recorded in cost of sales. During the period of development, the asset is tested for impairment annually.

Patents and licences

The Group has, directly as well as through acquisitions of other entities, acquired patents and licences and allocated value to these in the balance sheet. The patents have generally been granted for an original period of 10 years by the relevant government agency. The licences are assessed to have economic lives from five to ten years from origination.

Goodwill

Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired.

Impairment and key assumptions

Goodwill and PPA values has been tested for impairment with Discounted Cash Flow (DCF) as main valuation method, using a weighted average cost of capital (WACC) of 15% as discount rate, and a cash flow over normally 6 years period based on next years budget with managements assumptions of future growth thereafter, and a residual value based on Gordon growth with a 3% growth rate from steady state. Conducted sensitivity analyses of the key parameters shows a reasonable headroom for changes in key parameters defined above.

The Group recognized Impairment in development where the Staaker product line, Railway drone and the Fuelcell drone are fully written off. There are no remaining CGUs categorized as development with impairment indicators at 31.12.2022

	Development	Concessions, patents and licenses	Goodwill
Cost as at 1 January 2021	750 583	1 219 897	77 817	2 048 297
Additions	5 744 266	4 889 483	1 616 621	12 250 370
Disposals	-	-	-	-
Currency translation effects	91 366	144 950	33 172	269 488
Cost as at 31 December 2021	6 586 216	6 254 330	1 747 064	14 587 609
Additions	5 130 724	473 001	1 596 130	7 199 855
Currency translation effects	-46 516	-17 765	24 838	-39 442
Cost as at 31 December 2022	11 670 424	6 709 566	3 368 032	21 748 022
Depreciation and impairment as at 1 January 2021	181 905	195 306	-	377 211
Depreciation for the year	407 176	214 352	-	621 528
Impairment for the year	-	-	-	-
Disposals	-	-	-	-
Currency translation effects	15 942	13 191	-	29 134
Amortization and impairment as at 31 December 2021	605 023	422 849	-	1 027 873
Amortization	1 736 695	847 828	-	2 584 523
Impairment	2 254 265	-	60 478	2 314 743
Currency translation effects	4 208	2 036	-	6 244
Amortization and impairment as at 31 December 2022	4 600 191	1 272 713	60 478	5 933 383

Net book value:
At 1 January 2021	568 678	1 024 591	77 817	1 671 086
At 31 December 2021	5 981 192	5 831 481	1 747 063	13 559 736
At 31 December 2022	7 070 233	5 436 852	3 307 553	15 814 638

Economic life (years) 5-10 5-10 Depreciation plan Straight-line method Straight-line method

ACCOUNTING POLICIES

At inception of a contract, The Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

The agreement creates enforceable rights of payment and obligations
The identified asset is physically distinct
The supplier does not have a substantive right to substitute the asset throughout the period of use
It has the right to obtain substantially all of the economic benefits from use of the asset
It has the decision-making rights that are most relevant to changing how and for what purpose the asset is used throughout the contract period

Group as a lessee

At the commencement date, the Group recognises a lease liability and corresponding right-of-use asset for all lease agreements in which it is the lessee, except for the following exemptions applied:

Short-term leases (defined as 12 months or less)
Low value assets (with an underlying value of less than 5 thousand EUR)

For these leases, the Group recognises the lease payments as operating expenses in the consolidated statement of comprehensive income.

Measuring the lease liability

The lease liability is initially measured at the present value of the lease payments for the right to use the underlying asset during the lease term that are not paid at the commencement date. The lease term represents the non-cancellable period of the lease, together with periods covered by an option to extend the lease when the Group is reasonably certain to exercise this option, and periods covered by an option to terminate the lease if the Group is reasonably certain not to exercise that option.

The lease payments included in the measurement comprise:

Fixed lease payments, less any lease incentives received
Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect adjustments in lease payments due to an adjustment in an index or rate.

The Group presents its lease liabilities as separate line items in the consolidated statement of financial position.

Measuring the right-of-use asset

The right-of-use asset is initially measured at cost. The cost of the right-of-use asset includes the corresponding amount of the initial measurement of the lease liability, any lease payments made at or before the commencement date and initial direct costs incurred.

The right-of-use asset is subsequently measured at cost less accumulated depreciation and impairment losses, applying the same policies for impairment as for property, plant and equipment (Note 3.1). The rightof-use asset is depreciated from the commencement date to the earlier of the lease term and the remaining useful life of the right-of-use asset. Depreciation is calculated on a straight-line basis.

The Group presents its right-of-use assets as separate line items in the consolidated statement of financial position.

The Group's leased assets

The Group has lease agreements for office buildings, located in Sandnes and Fornebu in Norway, one officebuilding in Birmingham in England and one in Germany. The Group are also leasing cars.

The Group's right-of-use assets recognised in the consolidated statement of financial position are presented in the table below:

Right-of-use assets

		Office
	Vehicles	Buildings	Total
Acquisition cost at 1 January 2021	81 238	254 007	335 245
Additions of right-of-use assets	-	1 258 387	1 258 387
Currency translation effects		22 171	22 171
Acquisition cost at 31 December 2021	81 238	1 534 565	1 615 803
Additions of right-of-use assets	0	0	0
Currency translation effects	0	0	0
Acquisition cost at 31 December 2022	81 238	1 534 565	1 615 803
Depreciation and impairment at 1 January 2021	19 366	126 292	145 658
Depreciation of right-of-use assets	20 425	196 216	216 641
Currency translation effects		-2 064	-2 064
Depreciation and impairment at 31 December 2021	39 791	320 444	360 235
Depreciation of right-of-use assets	20 785	249 369	270 154
Currency translation effects	0	-	0
Depreciation and impairment at 31 December 2022	60 576	569 813	630 389
Carrying amount at 1 January 2021	61 872	127 716	189 588
Carrying amount at 31 December 2021	41 447	1 214 121	1 255 568
Carrying amount at 31 December 2022	20 662	964 751	985 414
Remaining lease term or remaining useful life	2-5	2-8
Depreciation plan		Straight-line method

The Group's lease liabilities
Undiscounted lease liabilities and maturity of cash outflows	31.12.2022	31.12.2021	01.01.2021
Less than one year	285 703	283 449	139 617
One to two years	244 483	300 719	39 712
Two to three years	194 810	257 333	18 397
Three to four years	389 620	205 049	5 556
More than four years	169 673	383 641	0
Total undiscounted lease liabilities	1 284 290	1 430 190	203 282
Changes in the lease liabilities - 2021			Total
At first time adoption of IFRS 1 January 2021			194 714
New leases recognised during the period			1 258 386
Cash payments for the principal portion of the lease liability			-216 113
Interest expense on lease liabilities			27 684
Currency translation effects			28 237
Total lease liabilities at 31 December 2021			1 292 908
Current lease liabilities in the statement of financial position			369 242
Non-current lease liabilities in the statement of financial position			923 666
Changes in the lease liabilities - 2022			Total
At 1 January 2022			1 292 908
New leases recognised during the period			0
Cash payments for the principal portion of the lease liability			-280 218
Interest expense on lease liabilities			53 377
Currency translation effects Total lease liabilities at 31 December 2022			18 404 1 084 471
Current lease liabilities in the statement of financial position			369 242
Non-current lease liabilities in the statement of financial position			715 229

Lease commitments not included in the lease liabilities

Inflation adjustments

In addition to the lease liabilities presented above, the Group is committed to pay variable lease payments for its office buildings, mainly related to future inflation adjustments which is not included in the initial calculation of lease liabilities. The lease liability and right-of-use asset will be adjusted to reflect the inflation adjustment when the uncertainty related to the adjustment has been resolved, however, due to low inflation forecasts these adjustments are expected to be immaterial.

Extension and termination options

The Group has some lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the Group's business needs. Management applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, they considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate.

The Group did not include the renewal period for leases as part of the lease term because management were not reasonably certain to exercise the option to renew the leases. Furthermore, the periods covered by termination options are included as part of the lease term only when they are reasonably certain not to be exercised.

Other matters

The Group's leases does not contain provisions or restrictions that impacts that Group's dividend policies or financing possibilities. Further, the Group does not have significant residual value guarantees related to its leases.

4.1 Financial instruments

ACCOUNTING POLICIES

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Classification of financial instruments

The Group's financial instruments are grouped in the following categories:

Financial Assets

Financial assets measured subsequently at amortised cost: Includes mainly trade receivables, other receivables and cash equivalents

The Group's financial assets are part of the Group's business model with the sole objective to collect contractual cash flows. Additionally, the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, thereby passing the "SPPI test", constituting debt instruments measured at amortised cost.

Financial Liabilities

Financial liabilities measured subsequently at amortised cost: Represent the Group's non-interest bearing liabilities such as trade payables, and borrowings, see note 4.2.
Other liabilities measured at fair value: these are primarily contingent considerations in earn-out arrangements entered into as part of business combinations, see note 6.2.

The Group does not have derivative financial instruments measured at fair value. All financial assets and liabilities, except for the earnout arrangements are measured subsequently at amortised cost.

As part of the acquisition of AirRobot, see note 6.2, the group had a contractual obligation to purchase its own equity instruments. This gave rise to a financial liability for the present value of the redemption amount even if the obligation to purchase was conditional on the counterparty exercising the written put option that gave the counterparty the right to sell ishares in Nordic Unmanned to Nordic Unmanned for a fixed price. The financial liability was initially recognised at the present value of the redemption amount, and reclassified from equity. Subsequently, the financial liability was measured at fair value through profit or loss. Had the contract expired without delivery, the carrying amount of the financial liability would have been reclassified to equity. As at year end 2022 the put option has been exercised and the liability settled, except for an agreed deferred payment presented as other current liabilities and measured at amortised cost.

Initial recognition and subsequent measurement

Financial assets and liabilities at amortised cost

The Group's financial assets and liabilities are initially recognised at fair value plus directly attributable transaction expenses. Subsequently, these instruments are measured at amortised cost using the effective interest method (EIR). Gains and losses are recognised in profit or loss upon impairment, when the instruments are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The amortisation is included as finance costs in the consolidated statement of comprehensive income.

Impairment of financial assets

Financial assets measured at amortised cost are considered for impairment by recognising an allowance for expected credit losses (ECLs). The Group applies a simplified approach (as applicable for trade receivables) in calculating ECLs, where the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group bases its ECLs on its historical losses, adjusted for forward-looking factors specific to the debtors and the economic environment. See note 4.3 for further information related to management of credit risk.

Derecognition of financial instruments

A financial asset is derecognised when the rights to receive cash flows from the asset have expired, the Group has transferred its rights to receive cash flows from the asset or the Group has assumed an obligation to pay the received cash flows in full under a "passthrough" arrangement.

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the consolidated statement of comprehensive income.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

		Financial instruments at	Financial instruments at fair value through profit
	31.12.2022 Notes	amortised cost	or loss	Total
Assets
Trade and other receivables	2.6	5 040 199	-	5 040 199
Cash and cash equivalents	4.5	811 852	-	811 852
Total financial assets		5 852 051	-	5 852 051

Liabilities
Trade payables	2.8	2 384 500	-	2 384 500
Accruals	2.8	3 019 589	-	3 019 589
Contingent consideration - current	2.8	-	-209 304	-209 304
Contingent concideration - non-current		-	2 025 000	2 025 000
Loan from related parties		54 864		54 864
Interest bearing loans and borrowings current		2 673 760	-	2 673 760
Interest bearing loans and borrowings non-current		10 334 323	-	10 334 323
Total financial liabilities		18 467 036	1 815 696	20 282 733

	Financial Financial instruments at instruments at fair value through profit

31.12.2021	Notes	amortised cost or loss		Total
Assets
Trade and other receivables	2.6	2 753 797	-	2 753 797
Cash and cash equivalents	4.5	5 594 033	-	5 594 033
Total financial assets		8 347 830	-	8 347 830
Liabilities
Trade payables	2.8	1 166 000	-	1 166 000
Accruals	2.8	1 950 347	-	1 950 347
PPA consideration - current	2.8	-	775 314	775 314
PPA consideration - non-current	2.8	-	350 392	350 392
Effect of put option on own shares (see Note 6.2)	6.2	872 332	-	872 332
Interest bearing loans and borrowings current		3 086 797	-	3 086 797
Interest bearing loans and borrowings non-current		6 893 392	-	6 893 392
Total financial liabilities		13 968 868	1 125 706	15 094 574

		Financial Financial instruments at instruments at fair value through profit
01.01.2021	Notes	amortised cost or loss		Total
Assets
Trade and other receivables	2.6	1 613 337	-	1 613 337
Cash and cash equivalents	4.5	5 088 113	-	5 088 113
Total financial assets		6 701 450	-	6 701 450

Liabilities
Trade payables	2.8	1 406 096	-	1 406 096
Accruals	2.8	626 028	-	626 028
Interest bearing loans and borrowings current		418 263	-	418 263
Interest bearing loans and borrowings non-current		2 007 339	-	2 007 339
Total financial liabilities		4 457 726	-	4 457 726

There are no changes in classification and measurement for the Group's financial assets and liabilities.

Finance income and finance costs arising from the Group's financial instruments are disclosed separately in note 4.6.

All financial instruments measured at amortised cost are assumed to have a fair value not significantly different from the carrying amount as they are either short term or have a short term interest rate fixing period.

4.2 Maturity of financial liabilities

Contractual undiscounted cash flows from financial liabilities is presented below:

	Remaining contractual maturity
31.12.2022	1-12 months	1-2 years	2-3 years	3-4 years	4-5 years	More than 5 years	Total
Financial liabilities
Interest bearing loans and borrowings	3 180 161	4 084 104	2 933 553	2 328 864	2 021 747	-	14 548 429
Total financial liabilities	3 180 161	4 084 104	2 933 553	2 328 864	2 021 747	-	14 548 429
	Remaining contractual maturity
31.12.2021	1-12 months	1-2 years	2-3 years	3-4 years	4-5 years	More than 5 years	Total
Financial liabilities
Interest bearing loans and borrowings	3 433 273	2 880 467	2 805 902	1 311 948	-	-	10 431 590
Total financial liabilities	3 433 273	2 880 467	2 805 902	1 311 948	-	-	10 431 590

Reconciliation of changes in liabilities incurred as a result of financing activities:

			Non-cash changes
2022 Interest bearing loans and borrowings	01.01.2022	Cash flow effect	Foreign exchange movement	Other changes	31.12.2022
SR-bank	8 885 728	791 272	-	-	9 677 000
Innovasjon Norge	550 617	1 623 450	167 854	-	2 341 920
Other	543 844	445 311	-	-	989 155
Total liabilities from financing	9 980 189	2 860 032	167 854	-	13 008 075

			Non-cash changes
2020 Interest bearing loans and borrowings	01.01.2022	Cash flow effect	Foreign exchange movement	Other changes	31.12.2020
SR-bank	-	1 852 544	-	-	1 852 544
Sandnes Sparebank	455 656	-455 656	-	-	-
Innovasjon Norge	202 955	370 102	-	-	573 057
Total liabilities from financing	658 611	1 766 991	-	-	2 425 602

Credit facilities - utilised and unused amount

Drawn amount credit facility -	31.12.2021
	123 837
Undrawn amount credit facilities 5 105 971	2 178 574

Booked value of assets pledged as collateral for liabilities to financial institutions		31.12.2021
Fixed assets	21 776 209	15 861 310
Inventory	1 766 603	1 563 490
Account receivable	319 201	158 391
Investments	2 145 220	-

The following financial covenants are applicable to The Group at 31.12.22:

Equity ratio of 40%

Working capital ratio of 1,15 (No longer applicable after new financial structure in 2023) Mimimum value clause of 60% of assets

The Group is in compliance with all covenants as of 31.12.2022.

In March 2023, Nordic Unmanned ASA signed an agreement for a new finance arrangement with Sparebank1 SR-Bank AS of up to 16 MEUR. The refinancing included 2.7 MEUR in increased loans, and a restructured repayment schedule for the purpose financing Nordic Unmanned short term working capital needs until positive cash flow from operations from end of the 2nd quarter. The Agreement include financial covenants requirements related to equity ratio and loan to value ratio. The refinanced senior secured term loan has a 5 year repayment profile with maturity on the 31st of December 2024.

The weighted average effective interest rate on interest-bearing liabilities was 4,8%.

The borrowings are subject to floating interest rate and the rate fixing period is short. Consequently, fair values of the borrowings are assumed to be equal to book values. "Contractual undiscounted cash flows from financial liabilities" is presented including expected interest based of latest know applicable interest rate.

4.3 Financial risk management

Overview

The Group's principal financial liabilities, comprise liabilities to financial institutions and trade and other payables. The main purpose of these financial liabilities is to finance the Group's operations. The Group's principal financial assets include trade and other receivables, and cash and short-term deposits that derive directly from its operations.

The Group is exposed to a range of risks affecting its financial performance, including market risk, credit risk and liquidity risk. The Group seeks to minimise potential adverse effects of such risks through sound business practise, risk management and hedging.

Risk management is based on the principle that risk evalution is an integral part of all business activities. The Group has establised policies and procedures to manage risk and to face risks and uncertainties in a global marketplace.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk for the Group comprises two types of risk: interest rate risk and currency risk. Financial instruments affected by market risk include liabilities to financial institutions, accounts receivable and other currenct receivables, cash and cash and cash equivalents, lease liabilities and trade and other payables.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group is exposed to the risk of changes in market interest rates as it has interest bearing debt. The Group does not currently hedge interest rate risk exposure with the use of financial instruments, but may enter into contracts to offset some of the risk depending on the future expected interest rates.

Interest rate sensitivity

The sensitivity to a possible change in interest rates, with all other variables held constant, on the Group's profit before tax, is illustrated below. In calculating the sensitivity analyses, the Group assumes that the sensitivity of the relevant statement of profit or loss item is the effect of the assumed changes in respective financial risks.

Interest rate sensitivity	Increase / decrease in basis points	Effect on profit before tax	Effect on OCI
31 December 2022	+/- 100	88 882	-
31 December 2021	+/- 100	65 431	-
1 January 2021	+/- 100	26 081	-

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group's reported result and net assets denominated in foreign currencies are influenced by fluctuations in currency exchange rates and in particular the NOK as some of the interest bearing loans and significant expenditures are in NOK.

Some of the Group's revenues and expenses are denominated in foreign currencies, where revenues are exposed to changes in foreign currencies against the EUR. Interest-bearing debt facilities are denominated in NOK and EUR. The main strategy for mitigating risk related to volatility in cash flows is to maintain an operational hedge in the composition of the debt.

Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations.

Foreign currency sensitivity

The following table illustrates the sensitivity for a hypothetical increase or decrease in the foreign exchange rates in the

Foreign currency sensitivity	Date	Change in FX rate	Effect on profit before tax
Increase / decrease in NOK/EUR	31.12.2022	+/- 10%	234 193
Increase / decrease in EUR/NOK	31.12.2021	+/- 10%	649 211
Increase / decrease in EUR/NOK	01.01.2021	+/- 10%	490 198

Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or contract, leading to a financial loss.

The Group is exposed to credit risk arising from cash and cash equivalents, deposits with banks as well as credit exposure to commercial customers. The risk arising from receivables are monitored closely.

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or other financial assets. The Group monitors rolling forecasts of the liquidity reserves and cash and project cash flows in major currencies and estimating the level of liquid assets required.

A set of financial covenants are established with its lenders under the loan agreement linked to equity ratio and working capital. The company was in compliance with all covenants as per year end.

ACCOUNTING POLICIES

Treasury shares

Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group's own equity instruments. Any difference between the carrying amount and the consideration, if reissued, is recognised in the share premium.

Costs related to equity transactions

Transaction costs are deducted from equity, net of associated income tax.

Distribution to shareholders

The Group recognises a liability to make distributions to equity holders when the distribution is authorised and the distribution is no longer at the discretion of the Group. As per the corporate laws of Norway, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity. The annual financial statement can be obtained from the Group's head office , Rådhusgata 3, 4306 Sandnes Norway, or though the company's website: https://nordicunmanned.com/

No distributions were made to shareholders in the current or prior period.

Capital management

For the purpose of the Group's capital management, capital includes issued ordinary share capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Group's capital management is to maximise the shareholder value. The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group's policy is to keep the gearing ratio between 20% and 40%. The Group includes within net debt, interest bearing

Issued capital and reserves:

	Number of		Financial Position
	shares	Par value per share
	authorised
Share capital in Nordic Unmanned AS	and fully paid	(NOK)	(EUR)
At 1 January 2021	20 120 032	1,000	1 921 629
Issue of shares	6 168 952	1,000	614 783
Currency translation effects	-	-	95 433
At 31 December 2021	26 288 984	1,000	2 631 846
Issue of shares	16 174 861	1,000	1 560 550
Currency translation effects	-	-	-
At 31 December 2022	42 463 845	1,000	4 192 395

All shares are ordinary and have the same voting rights and rights to dividends.

Reconciliation of the Group's equity is presented in the statement of changes in equity.

		Ownership/
Shareholders in Nordic Unmanned ASA at 31.12.2022	Total shares	Voting rights
WALLCROSS AS	2 281 221	5 %
JELSA INVESTERING AS	2 273 356	5 %
HELGØ INVESTERING AS	2 273 356	5 %
SKAULEN AS	1 870 410	4 %
NORDNET LIVSFORSIKRING AS	1 456 322	3 %
DZ Privatbank S.A.	1 158 020	3 %
GH HOLDING AS	1 049 668	2 %
CLEARSTREAM BANKING S.A.	902 932	2 %
PAY EIENDOM AS	828 084	2 %
INTERVEST AS	808 867	2 %
AINO AS	791 667	2 %
DRAGESUND INVEST AS	791 667	2 %
Morgan Stanley & Co. Int. Plc.	742 348	2 %
RAVI INVESTERING AS	725 000	2 %
BJØRNØY INVEST AS	705 836	2 %
BERGEN KOMMUNALE PENSJONSKASSE	675 000	2 %
SKIPS AS TUDOR	617 500	1 %
DALLAS ASSET MANAGEMENT AS	604 888	1 %
ÅLGÅRD HOLDING AS	573 827	1 %
SUBSEA TO AIR AS	518 602	1 %
Other	20 815 274	49 %
Total	42 463 845	100 %

*Skaulen AS is controlled by former CEO Knut Roar Wiig.

The Group holds 207 423 treasury shares at a total book value of EUR 871 thousand.

Shares held by management or the Board at the end of the reporting periods are summarised in note 7.1.

4.5 Cash and cash equivalents

ACCOUNTING POLICIES

Cash and cash equivalents in the statement of financial position comprise cash at banks and short-term deposits with a maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits. Restricted bank deposits comprise of cash for withholding taxes which may not be used for other purposes.

Cash and cash equivalents	31.12.2022	31.12.2021
Bank deposits, unrestricted	396 474	5 274 183
Bank deposits, restricted	415 378	319 850
Total cash and cash equivalents	811 852	5 594 033

Bank deposits earns a low interest at floating rates based on the bank deposit rates.

4.6 Financial income and expenses

ACCOUNTING POLICIES

Interest income and interest expenses are calculated using the effective interest method.

Foreign currency gains or losses are reported as gain or loss on foreign exchange within finance income or finance costs, except for currency translation effects from investments in foreign subsidiaries which are presented within OCI. For other accounting policies related to the underlying financial instruments, reference is made to note 4.1.

Interest costs on lease liabilities represents the interest rate implicit in the lease, or the incremental borrowing rate used to measure the lease liabilities recognised in the statement of financial position, for further disclosures see note 3.3.

Finance income	2022	2021
Interest income	13 821	12 730
Other finance income	77 741	3 846
Gain on foreign exchange	686 115	462 047
Total finance income	777 677	478 624
Finance costs	2022	2021
Interest expenses	839 040	82 208
Interest expense on lease liabilities	41 252	27 662
Other finance costs	108 239	83 674
Loss on foreign exchange	859 466	135 180
Total finance costs	1 847 997	328 724

Interest income represents mainly interest income on cash deposits, and interest expenses represents mainly interest expenses on financial liabilities, measured and classified at amortised cost in the statement of financial position.

4.7 Share based payments

ACCOUNTING POLICIES

Employees (including management) of the Group receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).

Equity-settled transactions

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using the Black-Scholes-Merton valuation model.

That cost is recognised in employee benefits expense, together with a corresponding increase in equity, over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group's best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.

No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date fair value of the unmodified award, provided the original vesting terms of the award are met. An additional expense, measured as at the date of modification, is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share (further details are given in note 4.9)

Social security tax on share based payments are recorded as a liability (see note 2.7).

SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS

Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. Due to limited historical data and liquidity these assumptions include significant estimates by management. The most significant assumptions are described further below.

Share option plan - Description

Under the Share Option Plan (SOP), share options of the parent are granted to management and key employees of the Group. The exercise price of the share options is generally set equal to the market price of the underlying shares on the date of grant, but from time to time awards are made with an exercise price significantly lower than the share price. The share options were granted on the 1 December 2019, 15 December 2020 and 19 November 2021 and are split into tranches that generally vest over two or three years.

The share options can be exercised up to five years after the grant date and expire approximately three years from the balance sheet date 31 December 2022. The Group settles the share options by delivery of shares. Share options held by management at the end of the reporting period are summarised in note 7.1.

The fair value of the options were determined at the grant dates and expensed over the vesting period. EUR 443 thousand (EUR 361 thousand in 2021) has been expensed as employee benefit expenses and a reduction of expenses (credit) of EUR 170 thousand (EUR 102 thousand expense in 2021) as social security charges in the period.

Movements during the year

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during the year:

	2022 WAEP (NOK)	2022 Number	2021 WAEP (NOK)	2021 Number
Outstanding options 1 January	10,62	1 095 000	9,80	1 050 000
Options granted			14,70	125 000
Options forfeited	5,00	-15 000	5,00
Options exercised*	5,00	-155 000	5,00	-67 000
Options terminated			5,00	-13 000
Outstanding options 31 December	11,65	925 000	10,62	1 095 000
Exercisable at 31 December	11,18	400 000	5,00	55 000

* The closing share price at the date of exercise of the 155 000 options (17 January 2022) was NOK 31.80).

The weighted average remaining contractual life for the share options outstanding as at 31 December 2022 was 2.96 years (2021: 3.96 years).

The range of exercise prices for options outstanding at the end of the year was NOK 10 to NOK 14.70 (2021: NOK 5 to NOK 14.70).

No new options were granted in 2022. The weighted average fair value of options granted during 2021 was NOK 20.29).

Assumptions used to determine fair value of share option grants:

	2022	2021
Weighted average fair values at the measurement date (NOK)	N/A	20,29
Dividend yield (%)	N/A	0
Expected volatility (%)	N/A	53,59
Risk–free interest rate (%)	N/A	1,375
Expected life of share options (years)	N/A	3,0
Weighted average share price (NOK)	N/A	32,48
Model used	N/A	BSM

The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.

4.8 Earnings per share

ACCOUNTING POLICIES

Basic earnings per share (EPS) is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted EPS is calculated by dividing the profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

The following table reflects the income and share data used in the EPS calculations:

	2022	2021
Profit or loss attributable to ordinary equity holders - for basic EPS	-19 577 191	-5 783 613
Profit or loss attributable to ordinary equity holders adjusted for the effect of dilution	-19 577 191	-5 783 613
Weighted average number of ordinary shares - for basic EPS	29 040 420	22 991 203
Weighted average number of ordinary shares adjusted for the effect of dilution	N/A (*)	N/A (*)

Basic EPS - profit or loss attributable to equity holders of the parent	-0,67	-0,25
Diluted EPS - profit or loss attributable to equity holders of the parent	-0,67	-0,25

(*) Dilutive effect on number of shares not calculated because it would have antidilutive effect

5.1 Taxes

ACCOUNTING POLICIES

Current income tax

Current income tax is measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income. Current income tax relating to items recognised directly in equity is recognised in equity (OCI) and not in the statement of profit or loss.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognised for all taxable temporary differences, except:

When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future

Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies.

The Group has EUR 31 million as at 31.12.2022 (EUR 13 million as at 31.12.2021) of tax losses carried forward. The tax losses carried forward may be offset against future taxable income and will not expire. Due to significant uncertainty as to when the related deferred tax assets may be recovered, no deferred tax assets have been recognised as at year end 2022.

Current income tax expense:	2022	2021
Tax payable	0	0
Change deferred tax/deferred tax assets (ex. OCI effects)	1 913 589	-1 344 803
Total income tax expense	1 913 589	-1 344 803

Deferred tax assets:	31.12.2022	31.12.2021
Development Concessions, patents, licenses
Trade receivables	0	2 002
Other short-term receivables	0	3 645 899
Inventory	570 859	390 437
Lease liabilities	1 084 470	1 063 427
Public duties payable	0	172 162
Other current liabilities	0	230 285
Losses carried forward	30 841 810	13 132 995
Basis for deferred tax assets:	32 497 139	18 637 207
Deferred tax liabilities	31.12.2022	31.12.2021
Development Concessions, patents, licenses	6 309 374	6 404 944
Property, plant and equipment	5 006 573	2 813 202
Right-of-use assets	985 414	980 506
Basis for deferred tax liabilities	12 301 362	10 198 653

Net basis for deferred tax liabilities/(-assets)	-20 195 777	-8 438 555
Net basis for deferred tax liabilities/(-assets) at 22% tax rate	-21 207 907	-13 485 284
Net basis for deferred tax liabilities/(-assets) at foreign tax rates	1 012 130	5 046 729
Calculated net deferred tax assets	-4 666 530	-2 149 258
- Deferred tax assets not recognised	4 666 530
Net deferred tax assets recognised	-	-2 149 258
Calculated deferred tax liabilities		807 477
Deferred tax liabilities recognised in the statement of financial position	-	807 477
Deferred tax assets recognised in the statement of financial position	-	2 956 735

The Group's operations are subject to income tax in various foreign jurisdictions. The statutory income tax rates vary from 16% to 22%, which results in a difference between the statutory income tax rate in Norway and the average tax rate applicable to the Group.

A reconciliation of the differences between the theoretical tax expense under the rate applicable in Norway and the actual tax expense is as follows:

Reconciliation of income tax expense	2 022	2021
Profit or loss before tax	-17 988 811	-7 170 988
Tax expense 22% (Norwegian tax rate)	-3 957 538	-1 577 617
Change to prior period tax expense	0	-
Permanent differences*	30 708	-215 667
Effects of foreign tax rates	98 745	-21 186
Effects of changes in tax rate	0	-
Currency effects	1 033 749	-
Effect of not recognising deferred tax assets	4 707 925	469 668
Recognised income tax expense	1 913 589	-1 344 803

* The permanent differences are primarily transaction costs related to share issues which have been recognised against share premium.

6.1 Interests in other entities

ACCOUNTING POLICIES

Basis of consolidation

The consolidated financial statements comprise the financial statements of Nordic Unmanned AS and its subsidiaries as at 31 December 2022. The subsidiaries are consolidated when control is achieved as defined by IFRS 10. Specifically, the Group controls an investee if, and only if, the Group has:

Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee)
Exposure, or rights, to variable returns from its involvement with the investee
The ability to use its power over the investee to affect its returns

Generally, there is a presumption that a majority of voting rights results in control. However, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income ("OCI") are attributed to the equity holders of the parent of the Group and to non-controlling interests. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

The Group does not have ownership in joint arrangements, associates, or unconsolidated structured entities or interests in unconsolidated subsidiaries. NUAer AS has certain characteristics and similarities with a joint arrangement, but has been determined to be controlled by the Group and consequently, fully consolidated, with a 40% non-controlling interest.

The consolidated entities

The subsidiaries of Nordic Unmanned AS are presented below:

	Shareholding and
Consolidated entities			the Group's voting
31 December 2022	Office	CUR	ownership share	Date of consolidation
AirRobot® GmbH & Co. KG	Arnsberg, Germany	EUR	100 %	01.10.2021
AirRobot Beteiligungs GmbH	Arnsberg, Germany	EUR	100 %	01.10.2021
DroneMatrix NV	Hasselt, Belgium	EUR	55%*	16.06.2022
Ecoxy AS	Molde, Norway	NOK	100 %	21.09.2021
Nordic Unmanned North America Group LLC	Baltimore, USA	USD	100 %	01.10.2022
Nordic Unmanned North America LLC	Baltimore, USA	USD	92 %	01.10.2022
Nordic Unmanned UK Ltd.	Birmingham, UK	GBP	100 %	01.10.2021
Nordic Unmanned DK ApS	Odense, Denmark	DKK	100 %	07.12.2021
NUAer AS	Sandnes, Norway	NOK	60 %	01.10.2021

* Nordic Unmanned ASA has an agreement to buy the remaining 45% of the non-controlling shareholder position within 3 years of acquisition date. Nordic Unmanned will after this hold 100% of DroneMatrix NV shares. It has been assumed that Nordic Unmanned has present access to the returns of these shares and that there are no non-controlling interests related to this subsidiary.

All subsidiaries are included in the consolidated financial statements.

ACCOUNTING POLICIES

Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses.

The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.

Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9 Financial Instruments, is measured at fair value with the changes in fair value recognised in the statement of profit or loss in accordance with IFRS 9. Other contingent consideration that is not within the scope of IFRS 9 is measured at fair value at each reporting date with changes in fair value recognised in profit or loss.

Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group reassesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cashgenerating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.

Acquisitions in 2022

DroneMatrix

On 16 June 2022, Nordic Unmanned acquired 55 percent of the shares in DroneMatrix. DroneMatrix is a leading hitech company building and implementing the next generation of aerial robotic technology. These automated intelligent drone solutions are safe, reliable and flexible to implement in any kind of industrial environment. Central in the offering is a highly reliable 'drone-in-a-box' technology (YACOB), characterized by high quality and highly reliable data connectivity and controlled based on a flawless and comprehensive Command & Control UOM platform, the Aerial Robotic Worksystem (AR-WS). DroneMatrix is the founding father of the unmanned drone technology in Belgium and responsible for the development of the commercial air layer operated by aerial robotics (6th NeTWorK). DroneMatrix is committed to making its mark in a growing global unmanned market through important references and solid partnerships. Founded in 2015 by the family Vanwelkenhuyzen and located in Hasselt, Belgium. The total consideration paid was EUR 2.5 million whereof 1.5 million were an equity issue in the company and EUR 1 million was share purchase.

Assets aquired and liabilities assumed

The fair value of the identifiable assets and liabilities of DroneMatrix as at the date of acquisition were:

	Acquired assets and liabilities assumed	Fair value adjustments	Fair value recognised on acquisition
Non-current assets
Goodwill	-	1 507 952	1 507 952
Other intangible assets	630 142	1 775 165	2 405 307
Total intangible assets	630 142	3 283 117	3 913 259
Fixtures and fittings	43 338	-	43 338
Total tangible assets	43 338	-	43 338
Total non-current assets	673 480	3 283 117	3 956 597
Current assets
Inventory	125 612	-	125 612
Trade receivables	228 480	-	228 480
Intercompany	1 125 000	-	1 125 000
Other short-term receivables	154 516	-	154 516
Cash and cash equivalents	216 685	-	216 685
Total current assets	1 850 293	-	1 850 293
TOTAL ASSETS	2 523 773	3 283 117	5 806 890
Non-current liabilities
Deferred tax liabilities	-	443 791	443 791
Total non-current liabilities	-	443 791	443 791
Trade payables	195 917	-	195 917
Interest bearing loans and borrowings	200 000	-	200 000
Public duties payable	34 850	-	34 850
Other current liabilities	432 332	-	432 332
Total current liabilities	863 099	-	863 099
Total liabilities	863 099	443 791	1 306 890
Net assets and liabilities			4 500 000
Fair value of consideration of the acquisition			4 500 000

Purchase consideration
Cash			1 350 000
Deferred payment			1 125 000
Contingent consideration liability			2 025 000
Total consideration			4 500 000

Contingent consideration

Within the next three years, Nordic Unmanned will acquire the remaining shares based on a pre-agreed performance-based valuation matrix, with a minimum valuation of EUR 3 million and a maximum valuation of EUR 8 million on an enterprise value basis. Until then, the outstanding 45 per cent of the shares remain with the founders of DroneMatrix, the Vanwelkenhuyzen family.

Analysis of cash flows on acquisition

	-
Net cash flow on acquisition		1 382 798
Cash consideration (net of cash acquired with the subsidiary) - included in cash flows from inv	-	1 133 315
Transaction costs of the acquisition (included in cash flows from operating activities)	-	249 483

Contribution to the 2022 financial statements and pro forma information

The activities of DroneMatrix contributed to the consolidated statement of comprehensive income for 2022 with a total operating income of EUR 397 thousand and a net loss of EUR 358 thousand. Had the company been acquired with the control transfer date 1 January 2022, the total operating income contribution would have been EUR 484 thousand, and the net loss contribution would

Acquisitions in 2021

Ecoxy AS

On 21 September 2021, Nordic Unmanned acquired 100 percent of the shares in Ecoxy AS, the leading Norwegian provider of accredited emission measurements for the shipping and oil and gas industry. Ecoxy is also accredited to verify GHG reporting under EU ETS. Nordic Unmanned is becoming a leading authority within emission monitoring in Europe, and the acquisition of Ecoxy fits perfectly with the Group's strategy as increasing demands are expected due to new regulations both globally and through EU's green transisiton plan.

Assets aquired and liabilities assumed

The fair value of the identifiable assets and liabilities of Ecoxy AS as at the date of acquisition were:

	Acquired assets		Fair value
	and liabilities	Fair value	recognised on
	assumed	adjustments	acquisition
Non-current assets
Goodwill	-	388 018	388 018
Other intangible assets	-	1 306 208	1 306 208
Deferred tax assets	-	- 354 811	- 354 811
Total intangible assets	-	1 339 415	1 339 415
Fixtures and fittings	113 650	306 571	420 221
Total tangible assets	113 650	306 571	420 221
Total non-current assets	113 650	1 645 986	1 759 636
Current assets
Trade receivables	149 702	-	149 702
Other short-term receivables	17 437	-	17 437
Cash and cash equivalents	274 318	-	274 318
Total current assets	274 318	-	274 318
TOTAL ASSETS	555 106	1 645 986	2 201 092
Trade payables	51 482	-	51 482
Public duties payable	23 498	-	23 498
Other current liabilities	71 176	-	71 176
Total current liabilities	146 156	-	146 156
Total liabilities	146 156	-	146 156
TOTAL EQUITY AND LIABILITIES	555 106	1 645 986	2 201 092

Total consideration	2 054 936
Cash	950 132
Contingent consideration liability	613 780
Shares issued, at fair value	491 024
Purchase consideration

Contingent consideration

There are certain performance targets over the coming years which may lead to cash payments up to a total of EUR 737 thousand. As at acquisition date, the fair value of these considerations were estimated to EUR 614 thousand. Subsequent changes to this fair value estimate are being recognized through profit and loss.

Analysis of cash flows on acquisition

Transaction costs of the acquisition (included in cash flows from operating activities)	-	49 509
Cash consideration (net of cash acquired with the subsidiary) - included in cash flows from inv	-	675 814
Net cash flow on acquisition	-	725 323

AirRobot GmbH

On 14 October 2021, Nordic Unmanned acquired 100 percent of the shares in AirRobot GmbH, a leading German drone developer and manufacturer. The acquisition secures patented world-leading last-mile unmanned delivery technology and extends the product and customer portfolio as a system integrator. Nordic Unmanned plan to leverage AirRobot's German customer relationships, technical capabilities, and product portfolio to expand customer relationships and offerings.

Assets aquired and liabilities assumed

The fair value of the identifiable assets and liabilities of AirRobot GmbH as at the date of acquisition were:

	Acquired assets		Fair value
	and liabilities	Fair value	recognised on
	assumed	adjustments	acquisition
Non-current assets
Goodwill	-	1 267 567	1 267 567
Other intangible assets	-	5 089 617	5 089 617
Total intangible assets	-	6 357 184	6 357 184
Fixtures and fittings	86 502	299 389	385 891
Right-of-use assets	163 231	-	163 231
Total tangible assets	249 733	299 389	549 123
Total non-current assets	249 733	6 656 573	6 906 307
Current assets
Inventory	306 304	-	306 304
Trade receivables	627 944	-	627 944
Other short-term receivables	269 837	-	269 837
Cash and cash equivalents	425	-	425
Total current assets	1 204 511	-	1 204 511
TOTAL ASSETS	1 454 244	6 656 573	8 110 818

Non-current liabilities

Interest bearing loans and borrowings	679 668	-	679 668
Non-current lease liabilities	104 299	-	104 299
Other non-current liabilities	505 860	-	505 860
Deferred tax liabilities	-	862 241	862 241
Total non-current liabilities	1 289 827	862 241	2 152 068
Current liabilities
Trade payables	11 722	-	11 722
Interest bearing loans and borrowings	278 566	-	278 566
Current lease liabilities	58 933	-	58 933
Other current liabilities	251 372	-	251 372
Total current liabilities	600 592	-	600 592
Total liabilities	1 890 420	862 241	2 752 661
Purchase consideration
Shares issued, at fair value			747 805
Cash			3 989 595
Contingent consideration liability			620 758
Total consideration			5 358 157

Contingent consideration

There is a performance target over the coming months which may lead to a cash payment of EUR 500 thousand.As at acquisition date, the fair value of this consideration has been estimated to EUR 499 thousand. Subsequent changes to this fair value estimate will be recognized through profit and loss.

In addition the seller has a put option on Nordic Unmanned to repurchase these shares issued at a fixed price. The fair value of the put option on the acquisition date is included in the contingent consideration liability above by EUR 122 thousand. Based on the provisions of IAS 32.23, the Group has subsequent to the acquisition date, recognized a gross liability of EUR 872 thousand, which represent the gross cash outflow should the shares be purchased. The difference between the EUR 872 thousand and EUR 122 thousand was charged through Equity.

Analysis of cash flows on acquisition

Net cash flow on acquisition	-	4 365 837
Cash consideration (net of cash acquired with the subsidiary) - included in cash flows from inv	-	3 989 169
Transaction costs of the acquisition (included in cash flows from operating activities)	-	376 668

7.1 Remuneration to Management and the Board

Remuneration to the Board of Directors

Remuneration for the members of the Board is determined by the Annual General Meeting (AGM). The remuneration is not linked to the Group's performance but reflects the Board's responsibilities, expertise, time and commitment.

Remuneration to the management team

The Board of Nordic Unmanned ASA determines the principles applicable to the Group's policy for compensation to the management team. The Board is directly responsible for determining the CEO's salary and other benefits. The Group's management team includes the Chief Executive Officer, Chief Operations Officer, Chief Finance Officer, Chief Revenue Officer, Chief Legal Officer, Chief Technical Officer and Chief People Officer.

Principles for determining salary

The main principle for determining salary for each executive management member has been a fixed annual salary, bonus, Stock Options, Employee Share Subscription program and with the addition of benefits in kind such as telephone and insurance. The fixed salary has been determined based on the following factors: competitive salary level, scope of work and responsibilities. Bonus is determined 50% based on business results and 50% based on individual goal achievement and performance.

Pension

The executive management members are part of the defined contribution pension scheme. In addition, the executive management members are part of a pension savings agreement with 6% defined contribution.

Other benefits

Members of the management team have been granted share options under the Group's share option plan, described in note 4.8. The share options held by the management team is summarised further below. Members of the management team have been awarded the possibility to purchase stocks with 30% discount through the Employee Share Subscription Program made available to all employees as part of the private placement on September 29th, 2021. The members of the management team are part of a collective annuity agreement.

Severance Arrangements

If the CEO is terminated by the Board, he is entitled to severance pay of 12 months in addition to the ordinary notice period of 3 months. The severance pay shall be calculated based on the monthly pay the CEO receives at the time the termination is notified in writing and the monthly average bonus payment last 12 months.

Loans and guarantees

No loans or guarantees have been granted to any member of the management or the Board of Directors.

**Remuneration to the management team for the year ended 31 December 2022*:**

					Other	Total	shares	share options
EUR	Position	Salary	Bonus	Pension	compensation	remuneration	(number)	(number)
Knut Roar Wiig (1)	CEO**	191 124	19 794	3 822	25 548	240 288	1 922 536	310 000
Trond Østerhus	CFO***	136 323	11 691	2 726	10 165	160 905	46 565	100 000
Lars A. Landsnes	COO	154 873	27 836	3 097	25 096	210 902	223 755	240 000
Cecilie Drange	CRO	137 168	22 964	2 743	9 500	172 376	137 621	100 000
Steffan Lindsø	CTO	116 007	5 799	2 320	9 357	133 484	9 027	50 000
Thomas Alexander Ladsten	CLO	138 775	31 702	2 775	11 488	184 740	60 915	75 000
Katrine Elin Meldahl (2)	CLO	118 267	3 629	2 365	8 669	132 931	66 328	-
Arne Roland (Interim CEO, 2023)		-	-	-	-	-	1 535	-
Total		992 538	123 415	19 851	99 822	1 235 626	2 468 282	875 000

Outstanding

*All remuneration to management is paid in NOK and converted to EUR using a yearly average EUR/NOK-rate of 10.104

** Former CEO

*** Former CFO (1) Severence payments to former CEO amounts to EUR 246 590 and will be paid out through March 23 - June 24.

(2) Employment from 1 January .

**Remuneration to the management team for the year ended 31 December 2021*:**

							Outstanding
					Other	Total	shares	outstanding share
EUR	Position	Salary	Bonus	Pension	compensation	remuneration	(number)	options (number)
Knut Roar Wiig	CEO	163 081	85 470	13 295	16 844	278 68 9	2 793 62	5 315 00 0
Trond Østerhus (1)	CFO	91 820	11 621	10 649	408	114 498	27 760	100 000
Lars A. Landsnes	COO	146 342	27 669	12 174	17 276	203 461	193 75	5 245 00 0
Cecilie Drange (2)	CRO	110 676	22 827	10 684	531	144 718	50 404	100 000
Steffan Lindsø (3)	CTO	30 743	5 764	2 776	153	39 437	9 027	50 000
Thomas Alexander Ladsten (4)	CLO	38 027	31 512	3 315	153	73 007	17 249	75 000
Total		580 689	184 863	52 893	35 364	853 810	3 091 820	885 000

*All remuneration to management is paid in NOK and converted to EUR using a yearly average EUR/NOK-rate of 10.164

(1) Employment from 1 April 2021

(2) Employment from 1 February 2021

(3) Employment from 1 October 2021 (4) Employment from 1 October 2021

Fees in 2022*

		Fee	Total number of
Name	Comments	(EUR)	shares
Nils Johan Holte	Chairman of the Board from 2018. Chair of the Remuneration Committee	21 774	105 282
Eirik Ålgård	Vice Chair from May 2021 until May 2022. Member of the Audit and Chair of the M&A Committee	18 804	887 32 9
Roald Helgø	Board member from 2019. Deputy board member from May 2021	4 949	2 278 63 6
Jan Henrik Jelsa	Board member from 2019. Member of the M&A Committee	11 877	2 278 63 6
Liv Annike Kverneland	Board member from September 2020 and Chair of the Audit Committee until October 2022	11 877	24 176
Andreas Christoffer Pay	Board member from May 2021. Member of the Audit Committee	11 877	2 281 221
Natasha Friis Saxberg	Board member from August 2021.	7 423	-
Karen Elisabeth Ohm Heskja	Chairperson of the Nomination Committee from February 2021	19 064	-
Arne Roland	Member of the Nomination Committee from February 2021	13 690	-
Astrid Skarheim Onsum	Vice Chair from May 2022	-	33 333
Total		121 333	7 888 613

* Fee to board members are paid in NOK and converted to EUR using a yearly average EUR/NOK-rate of 10.104

Fees in 2021*

		Fee	Total number of
Name	Comments	(EUR)	shares
Nils Johan Holte	Chairman of the Board from 2018. Chair of the Remuneration Committee	28 543	85 282
Eirik Ålgård	Vice Chair from May 2021. Member of the Audit and Chair of the M&A Committee	25 660	687 28 6
Roald Helgø	Board member from 2019. Deputy board member from May 2021	17 626	1 991 89 3
Jan Henrik Jelsa	Board member from 2019. Member of the M&A Committee	21 643	1 991 89 3
Liv Annike Kverneland	Board member from September 2020. Chair of the Audit Committee	16 110	24 176
Andreas Christoffer Pay	Board member from May 2021. Member of the Audit Committee	6 887	1 634 25 8
Natasha Friis Saxberg	Board member from August 2021.	4 099	-
Erik Berge	Board member from September 2020 until May 2021	10 453	-
Kristin Sundsbø Alne	Deputy board member from September 2020 until August 2020.	8 239	-
Karen Elisabeth Ohm Heskja	Chairperson of the Nomination Committee from February 2021	4 919	-
Arne Roland	Member of the Nomination Committee from February 2021	1 968	-
Total		120 568	6 414 78 8

* Fee to board members are paid in NOK and converted to EUR using a yearly average EUR/NOK -rate of 10.165 Remuneration to board members in 2021 include a total of EUR 74 045 related to 2020, recognized in 2021

7.2 Related party transactions

Related parties are major shareholders, members of the Board and management in the parent company and the group subsidiaries. Note 6.1 and 4.5 provides information about the Group structure, including details of the subsidiaries and shareholders. Significant agreements and remuneration paid to management and the Board for the current and prior period is presented in note 7.1. Shares, share options held by management and the Board are also summarised in note 7.1.

All transactions within the Group or with other related parties are made based on the principle of arm's length terms.

The following table provides the total amount of transactions that have been entered into with related parties (outside the Group) for the relevant financial period:

Related party transactions in 2022 and balances

at 31 December 2022	EUR
Current trade and other payables to related parties	66 943
Purchases from related parties*	333 673

* Nordic Unmanned have bought services from Board Member Eirik Ålgårds private company, Ålgård Handel & Industri AS, in a agreement to provide the group with necessary historical revenue to bid for the OP46 contract with EMSA. A letter of intent were signed. Purchased services in 2022 were 0.07 MEUR.

Related party transactions in 2021 and balances

at 31 December 2021	EUR
Current trade and other payables to related parties	34 864
Purchases from related parties*	2 401 058

* During 2021, NUAer AS purchased Concessions, patents and licenses from the 40% owner, Aeromon OY, for net proceeds of EUR 2 401 058.

7.3 Events after the reporting period

ACCOUNTING POLICIES

If the Group receives information after the reporting period, but prior to the date of authorisation for issue, about conditions that existed at the end of the reporting period, the Group will assess if the information affects the amounts that it recognises in the Group's consolidated financial statements. The Group will adjust the amounts recognised in its financial statements to reflect any adjusting events after the reporting period and update the disclosures that relate to those conditions in the light of the new information. For non-adjusting events after the reporting period, the Group will not change the amounts recognised in its consolidated financial statements but will disclose the nature of the nonadjusting event and an estimate of its financial effect, or a statement that such an estimate cannot be made, if applicable.

14th of February:

Nordic Unmanned completed a subsequent offering with subscription of 1 614 238 new shares raising NOK 9.7 million in gross proceeds.

22nd of February:

13th of March:

Industry veteran Arne Roland appointed as interim CEO as Knut Roar Wiig steps down from his leadership role.

27th of March:

Nordic Unmanned appoints Pareto Securities AS as advisor to evaluate strategic options, including partnership, in order to support the next growth phase of the Company.

Nordic Unmanned signs an agreement for a new finance arrangement with Sparebank1 SR-Bank AS of up to EUR 16 million. The new financing include a EUR 12.4 million term-loan facility for the refinancing of existing EUR 9.6 million fleet loan, to inter alia finance new equipment to be used in multi-site campaigns for EMSA under the OP46 and OP5 contracts, and for general corporate purposes, ii) a renewal of the existing EUR 3 million working capital facility and iii) a EUR 0.6 million guarantee facility covering the Company's need for contractual performance guarantees related to its operations.

14th April:

CFO Trond Østerhus steps down from his role and Knut Stålen has been appointed interim CFO with immediate effect.

There have been no other significant non-adjusting events subsequent to the reporting date.

7.4 Going Concern

I In accordance with §3-3a of the Norwegian Accounting Act, the Board of Directors confirms that the financial statements have been prepared under the assumption of going concern.

As a consequence of all factors mentioned above, management and the Board of Directors have initiated processes to help solve this situation:

Nordic Unmanned raised new equity of MNOK 155 in 2022, with a subsequent offering of MNOK 9,7 in 2023.

In March 2023, Nordic Unmanned signed an agreement for a new finance arrangement with Sparebank1 SR-Bank AS of up to EUR 16 million. The refinancing included 2.7 in increased loans, and a restructured repayment schedule for the purpose financing Nordic Unmanned short-term working capital needs. The new financing facility is provided under the condition that the Company will raise EUR 13 million through either disposal of assets and/or equity issue within year end 2023.

Nordic Unmanned has in March 2023 appointed Pareto Securities as advisor to evaluate strategic options, including partnership, to support the next growth phase of the Company. Nordic Unmanned's Nordun drone flight services, as well as its technology businesses, AirRobot GmbH (military-grade lightweight drone systems) and DroneMatrix NV (drone-in-a-box solutions), are currently European leaders in their categories and set to experience significant growth in the years ahead. Disposal of assets may include both sale of parts of the modern drone fleet with a book value of EUR 22 million. The Board has acted and believe therefore that these activities will have a significant effect on the cash debt ratios, and strengthen the balance sheet.

8.1 First time adoption of IFRSs

These financial statements, for the period ended 31 December 2022 are the first the Group has prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU).

The Group has prepared financial statements that comply with IFRSs applicable as at 31 December 2022, together with the comparative period data for the year ended 31 December 2021, as described in the basis of preparation (Note 1.2). In preparing the financial statements, the Group's opening statement of financial position was prepared as at 1 January 2021, the Group's date of transition to IFRSs.

This note explains the principal adjustments made by the Group when transitioning to IFRSs from its previous reporting framework; Generally Accepted Accounting Principles in Norway ("NGAAP").

Exemptions applied

IFRS 1 allows first-time adopters certain exemptions from the retrospective application of certain requirements under IFRS.

The Group has applied the exemptions from full retrospective application of IFRS 16 Leases and recognised right-of-use assets at an amount equal to the lease liabilities calculated using the Group's incremental borrowing rates at the date of transition to IFRSs.

Estimates

The estimates at 1 January 2021 and at 31 December 2021 are consistent with those made for the same dates in accordance with NGAAP (after adjustments to reflect any differences in accounting policies).

Reconciliation of transitional effects

Amounts in EUR	As at 1 January 2021
ASSETS	Note	NGAAP (NOK)	NGAAP (EUR)	Effect of transition to IFRS	Reclassification from NGAAP to IFRS	IFRS (EUR)
Non-current assets
Goodwill		814 767	77 817	-	-	77 817
Other intangible assets		16 682 002	1 593 269	-	-	1 593 269
Deferred tax assets	E	16 091 926	1 536 912	108 933	-	1 645 844
Total intangible assets		33 588 695	3 207 997	108 933	-	3 316 930
Aircraft and spareparts		41 194 968	3 934 459	-	-	3 934 459
Fixtures and fittings		9 832 437	939 079	-	-	939 079
Right-of-use assets	A	-	-	189 588	-	189 588
Total tangible assets		51 027 405	4 873 538	189 588	-	5 063 126
Investment in associated companies		30 000	2 865	-	-	2 865
Prepayments and financial receivables		6 400	611	-	-611	-
Total financial non-current assets		36 400	3 477	-	-611	2 865
Total non-current assets		84 652 500	8 085 012	298 521	-611	8 382 922
Current assets
Inventory		6 084 599	581 129	-	-	581 129
Trade receivables	C	8 202 645	783 420	-	-396 297	387 124
Other short-term receivables	C	13 271 041	1 267 494	-438 188	396 908	1 226 214
Cash and cash equivalents		53 274 068	5 088 113	-	-	5 088 113
Total current assets		80 832 352	7 720 156	-438 188	611	7 282 579
TOTAL ASSETS		165 484 852	15 805 168	-139 667	0	15 665 501

EQUITY AND LIABILITIES

Equity

Share capital		20 120 032	1 921 629	-	-	1 921 629
Treasury stock		-2 127	-203	-	-	-203
Share premium		119 603 508	11 423 121	-	-	11 423 121
Other equity	D	27 496 243	2 626 118	-	-2 626 118	0
Retained earnings	D	-50 819 529	-4 853 684	-386 216	2 626 118	-2 613 782
Total equity		116 398 127	11 116 981	-386 216	-	10 730 765
Non-current liabilities
Interest bearing loans and borrowings	B	25 396 776	2 425 602	-418 263	-	2 007 339
Non-current lease liabilities	A	-	-	58 461	-	58 461
Other non-current liabilities		-	-	-	-	-
Deferred tax liabilities		-	-	-	-
Total non-current liabilities		25 396 776	2 425 602	-359 802	-	2 065 800
Current liabilities
Trade payables		14 722 252	1 406 096	-	-	1 406 096
Interest bearing loans and borrowings	B	-	-	418 263	-	418 263
Current lease liabilities	A	-	-	136 253	-	136 253
Public duties payable		2 271 163	216 915	65 381	-	282 296
Other current liabilities		6 696 534	639 574	-13 546	-	626 028
Total current liabilities		23 689 949	2 262 585	606 351	-	2 868 936
Total liabilities		49 086 725	4 688 187	246 549	-	4 934 736
TOTAL EQUITY AND LIABILITIES		165 484 852	15 805 168	-139 667	-	15 665 501

A: The IFRS adjustments reflect the recognised right-of-use assets as well as the related lease liabilities for office space leases. Under NGAAP lease payments were accounted for as operating expenses and hence no assets or liabilities relating to such leases have previously been recognised.

B: The IFRS adjustments reflect reclassifications from non-current to current of borrowings for wich the group did not have an unconditional right to defer payment for at least twelve months from the balance sheet date.

C: The IFRS adjustments reflect reclassifications from trade receivables to other short-term receivables as they represent contract assets (earned, not invoiced, revenues) rather than invoiced revenues.

D: The adjustment reflects a transfer from other equity to retained earnings.

E: The IFRS adjustments for deferred income taxes reflect the tax effect on the IFRS adjustments made.

Reconciliation of equity and financial position as at 31 December 2021:

As at 31 December 2021

ASSETS	Note	NGAAP (NOK)	NGAAP (EUR)	Effect of transition to IFRS	Reclassification from NGAAP to IFRS	IFRS (EUR)
Non-current assets
Goodwill	A	21 412 921	2 143 693	-396 630	-	1 747 063
Other intangible assets		118 156 905	11 828 939	-16 266	-	11 812 673
Deferred tax assets	I	21 972 568	2 199 721	757 014	-	2 956 735
Total intangible assets		161 542 395	16 172 352	344 119	-	16 516 471
Aircraft and spareparts		89 688 867	8 978 943	-	-	8 978 943
Assets under construction		58 082 653	5 814 778	-	-	5 814 778
Fixtures and fittings		17 918 764	1 793 886	-4 948	-	1 788 938
Right-of-use assets	B	-	-	1 255 568	-	1 255 568
Total tangible assets		165 690 284	16 587 607	1 250 620	-	17 838 227
Investment in associated companies		30 000	3 003	-	-	3 003
Prepayments and financial receivables		6 400	641	-	-641	-
Total financial non-current assets		36 400	3 644	-	-641	3 003
Total non-current assets		327 269 079	32 763 603	1 594 739	-641	34 357 702
Current assets
Inventory	K	19 687 999	1 971 007	859 104	-	2 830 111
Trade receivables	G	4 352 288	435 717	-	-	435 717
Other short-term receivables	C, H	58 871 027	5 893 704	-3 576 274	641	2 318 070
Cash and cash equivalents		55 877 776	5 594 043	-	-	5 594 043
Total current assets		138 789 090	13 894 471	-2 717 170	641	11 177 941
TOTAL ASSETS		466 058 169	46 658 074	-1 122 431	-	45 535 643

EQUITY AND LIABILITIES

Equity

TOTAL EQUITY AND LIABILITIES		466 058 169	46 658 074	-1 122 431	-	45 535 643
Total liabilities		156 020 701	15 619 564	2 319 213	-	17 938 777
Total current liabilities		44 016 767	4 406 612	4 498 418	-	8 905 030
Other current liabilities		26 659 671	2 668 956	870 217	-	3 539 173
Public duties payable	F	5 710 152	571 655	172 162	-	743 818
Current lease liabilities	B	-	-	369 242	-	369 242
Interest bearing loans and borrowings	D	-	-	3 086 797	-	3 086 797
Trade payables		11 646 944	1 166 000	-	-	1 166 000
Current liabilities
Total non-current liabilities		112 003 934	11 212 952	-2 179 205	-	9 033 747
Deferred tax liabilities		8 226 286	823 551	-16 074	-	807 477
Other non-current liabilities	A	4 087 532	409 212	-	-	409 212
Non-current lease liabilities	B	-	-	923 666	-	923 666
Interest bearing loans and borrowings	D	99 690 116	9 980 189	-3 086 797	-	6 893 392
Non-current liabilities
Total equity		310 037 468	31 038 510	-3 441 643	-	27 596 866
Currency translation differences		-	-	-92 611	-	-92 611
Retained earnings	C	-56 121 037	-5 618 396	-3 349 032	-	-8 967 428
Other equity	I	9 565 032	957 576	-	-	957 576
Share premium	E	330 306 616	33 067 697	-	-	33 067 697
Treasury stock		-2 127	-213	-	-	-213
Share capital		26 288 984	2 631 846	-	-	2 631 846

A: The IFRS adjustment reflects the reversal of acquisition costs of EUR 428 thousand capitalised under NGAAP, but expensed under IFRS, partly offset by reversal of amortisation of goodwill. Under NGAAP goodwill is amortised over its estimated economic life, while under IFRSs goodwill is not amortised, but tested for impairment when there are indocators of impairments, and as a minimum, annually.

B: The IFRS adjustments reflect the recognised right-of-use assets, less depreciation for the year, as well as the related lease liabilities for office space leases. Under NGAAP lease payments were accounted for as operating expenses and hence no assets or liabilities relating to such leases have previously been recognised.

C: The IFRS adjustment in other short term receivables with related offsetting entries in retained earnings reflects expenditures on training of personnel and tender costs capitalised under NGAAP, but which are not eligible for capitalisation under IFRSs (IAS 38 Intangible assets and IFRS 15 Revenue from contracts with customers).

D: The IFRS adjustments reflect reclassifications from non-current to current of borrowings for wich the group did not have an unconditional right to defer payment for at least twelve months from the balance sheet date.

E: The IFRS adjustments reflect the offsetting impact on equity of the accounting for the costs of share based payment awards as salaries (see note 4.8) under the provisions of IFRS 2 Share based payment.

F: The IFRS adjustments reflect provisions for social security amounts payable relating to share-based payment awards. Under the group's pervious accounting policy, provisions for social security related to share based payments were made in the period in which the amounts became payable (i.e. when the share based payment awards were fully vested and exercised).

G: The IFRS adjustments reflect reclassifications from trade receivables to other short-term receivables as they represent contract assets (earned, not invoiced, revenues) rather than invoiced revenues.

H: Included in the EUR 3 576 274 amount is an IFRS adjustment for an amount of EUR 1 169 607 reflecting the exclusion of a contract for which revenues were recognised over time under NGAAP, while under IFRS 15 it was determined that the contract represents production of goods for inventory and qualifying for revenue recognition at the point in time of delivery of the products.

I: The IFRS adjustments for deferred income taxes reflect the tax effect on the IFRS adjustments made.

J: The adjustment reflects a transfer from other equity to retained earnings.

K: The IFRS adjustment reflects contracts which under NGAAP were accounted for as construction contracts with revenue recognition over time, but which, under IFRS 15, have been determined to constitute manufacturing for inventory as the components are deemed to have alternative use. Hence,under IFRS 15, revenue will be recognised on a point in time basis at the time of control transfer to the customers.

Reconciliation of total comprehensive income for 2021:

	Note	NGAAP (NOK)	NGAAP (EUR)	Effect of transition to IFRS	Reclassification from NGAAP to IFRS	IFRS (EUR)
Revenues	D	105 042 130	10 333 921	-1 245 154	-	9 088 767
Other operating income		987 442	97 143	-	-	97 143
Total operating income		106 029 572	10 431 064	-1 245 154	-	9 185 911

Cost of goods sold	C, D	28 233 803	2 777 608	-1 020 406	-218 161	1 539 041
Personell expenses Depreciation and amortisation expenses	B, C, D A	50 602 235 20 077 371	4 978 188 1 975 188	1 303 239 91 462	158 932 -	6 440 359 2 066 650
Other operating expenses	C, D, F	48 247 929	4 746 574	1 654 945	59 229	6 460 748
Total operating expenses		147 161 339	14 477 559	2 029 239	-	16 506 798

Operating profit (loss)		-41 131 767	-4 046 495	-3 274 393		-7 320 887

Interest income		129 400	12 730	-	-	12 730
Other financial income		4 735 703	465 893	-	-	465 893
Interest expenses Other financial expenses	A	-2 026 716 -2 009 597	-199 386 -197 702	-27 662 96 026	- -	-227 048 -101 676
Net financial income and expenses		828 791	81 535	68 364	-	149 899

Income (loss) before tax		-40 302 977	-3 964 959	-3 206 029	-	-7 170 988

Income tax Net income (loss)	E	-7 378 315 -32 924 661	-725 870 -3 239 089	-618 933 -2 587 096	- -	-1 344 803 -5 826 185

Allocation of profit or loss:
Profit/loss attributable to the parent		-32 924 661	-3 239 089	-2 587 096	-	-5 826 185
Other comprehensive income:
Items that subsequently may be reclassified to profit or loss:
Exchange differences on translation of foreign operations		-	-	484 752	-	484 752
Total items that may be reclassified to profit or loss		-	-	484 752	-	484 752
Total other comprehensive income for the period		-	-	484 752	-	484 752
Total comprehensive income for the period		-32 924 661	-3 239 089	-2 102 344	-	-5 341 433

A: Included in the IFRS adjustments is EUR 219 843 of depreciation of the right of use assets, partly offset by EUR 128 381 reflecting the reversal of amortisation of goodwill which was recognised under NGAAP. The interest amout relates to interest on lease liabilities.

B: Of the total IFRS adjustments of EUR 1.3 million, EUR 0.7 million reflect expenditures on training of personnel and tender costs capitalised under NGAAP, but which are not eligible for capitalisation under IFRSs (IAS 38 Intangible assets and IFRS 15 Revenue from contracts with customers). EUR 0.1 million relates to a customer contract discussed in D below. EUR 0.4 million relates to share based payment awards and related social security charges of EUR 0.1 recognised as salaries (see note 4.8) under the provisions of IFRS 2 Share based payment. Under the group's previous accounting policy provisions for social security related to share based payments were made in the period in which the amounts became payable (i.e. when the share based payment awards were fully vested and exercised).

C: The IFRS adjustment reflect purchased services relating to service revenues rather than sale of goods and have consequently been reclassified from cost of goods sold to other operating expenses.

D: The IFRS adjustment reflects the exclusion of a contract for which revenues and related costs were recognised over time under NGAAP, while under IFRS 15 it was determined that the contract represents production of goods for inventory and qualifying for revenue recognition at the point in time of delivery of the products.

E: The IFRS adjustments for income taxes reflects the tax effect on the IFRS adjustments made.

F: Of the total IFRS adjustments of EUR 1.7 million, EUR 1.4 million reflect expenditures on training of personnel and tender costs capitalised under NGAAP, but which are not eligible for capitalisation under IFRSs (IAS 38 Intangible assets and IFRS 15 Revenue from contracts with customers), and an amount of EUR 0.5 million relating to acquisition costs which are not eligible for capitalisation under IFRS 3, but which had been caplitalised uinder NGAAP. Partly offsetting this is an amount of EUR 0.2 million reversing out the NGAAP lease expenditures which have been replaced by the IFRS 16 effects discussed in A above.

Standards issued but not yet effective

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's financial statements are not expected to have a significant impact on the financial statements of the Group.

Financial Statement of Parent including notes

Statement of profit or loss and other comprehensive income

Amounts in EUR	Notes	2022	2021
Revenues	2.1	12 413 814	8 156 448
Other operating income		771 147	97 143
Total operating income		13 184 961	8 253 591
Cost of goods sold	2.1	1 723 537	1 327 639
Personell expenses	2.1,2.2	10 491 883	6 125 561
Depreciation and amortisation expenses	3.1,3.2,3.3	3 091 224	1 596 512
Impairments		3 457 578	-
Other operating expenses	2.1,2.3	8 991 635	6 317 033
Total operating expenses		27 755 856	15 366 746
Operating profit (loss)		-14 570 895	-7 113 155
Interest income	4.6	12 045	12 729
Other financial income	4.6	1 214 702	464 544
Interest expenses	3.3,4.2,4.6	-780 228	-219 413
Other financial expenses	4.6	-956 318	-82 653
Net financial income and expenses		-509 800	175 209
Income (loss) before tax		-15 080 695	-6 937 946
Income tax expense (income)	5.1	3 499 706	-1 379 463
Net income (loss)		-18 580 401	-5 558 484
Allocation of profit or loss: Profit/loss attributable to non-controlling interests Profit/loss attributable to the parent		- -18 580 401	- -5 558 484
Other comprehensive income:
Items that subsequently may be reclassified to profit or loss:
Currency translation differences		-91 543	532 203
Total other comprehensive income for the period		-91 543	532 203
Total comprehensive income for the period		-18 671 944	-5 026 280
Allocation of total comprehensive income
Total comprehensive income attributable to non-controlling interests		-	-
Total comprehensive income attributable to owners of the parent		-18 671 944	-5 026 280

Statement of financial position

	Notes	2022	2021	01.01.2021
ASSETS
Non-current assets
Other intangible assets	3.2	2 058 090	2 644 577	1 024 591
Deferred tax assets	5.1	-	3 403 057	1 044 469
Total intangible assets		2 058 090	6 047 634	2 069 059
Aircraft and spareparts	3.1	18 887 557	8 978 943	3 934 459
Assets under construction	3.1	452 902	5 814 778	-
Fixtures and fittings	3.1	952 494	1 067 589	918 018
Right-of-use assets	3.3	857 628	1 051 540	189 588
Total tangible assets		21 150 582	16 912 850	5 042 066
Investment in subsidiaries	6.1	12 217 220	9 058 109	1 187 070
Investment in associated companies	6.1	-	3 003	2 865
Prepayments and financial receivables		-	-	-
Total financial non-current assets		12 217 220	9 061 113	1 189 935
Other non-current assets		169 359	-	-
Total non-current assets		35 595 250	32 021 597	8 301 061
Current assets
Inventory	2.4	1 327 168	2 422 594	304 274
Trade receivables	2.5,,7.2	319 201	158 381	384 035
Short term receivables from group companies	7.2	3 253 503	826 150	-
Other short-term receivables	2.5,7.2	3 124 292	1 955 299	1 224 538
Cash and cash equivalents	4.5	415 176	5 009 335	5 083 427
Total current assets		8 439 340	10 371 759	6 996 274
TOTAL ASSETS		44 034 591	42 393 356	15 297 335

	Notes	2022	2021	01.01.2021
EQUITY AND LIABILITIES
Equity
Share capital	4.4	4 192 396	2 631 846	1 921 629
Treasury stock	4.4	-737 395	-213	-203

Share premium	4.4	46 867 796	33 067 697	11 423 121
Other equity Retained earnings	4.7	-26 652 950	- -9 161 257	-2 626 118 -353 472
		23 669 846	26 538 073	10 364 958
Equity attributable to equity holders of the parent Non-controlling interests		-	-	-
Total equity		23 669 846	26 538 073	10 364 958

Non-current liabilities
Interest bearing loans and borrowings	4.2	9 345 168	6 769 555	2 007 339
Non-current lease liabilities	3.3	647 710	782 041	58 461
Other non-current liabilities		2 025 000	350 392	-
Deferred tax liabilities	5.1	-	-	-
Total non-current liabilities		12 017 878	7 901 988	2 065 800
Current liabilities
Trade payables	2.7,7.2	1 917 465	977 219	1 402 634
Interest bearing loans and borrowings	4.2	2 673 760	2 666 797	418 263
Current lease liabilities	3.3	306 839	305 802	136 253
Current liabilities to group companies		1 021 065	344 886	-
Public duties payable	4.7	700 100	685 893	282 296
Other current liabilities	2.7,4.2,7.2	1 727 638	2 972 697	627 132
Total current liabilities		8 346 867	7 953 294	2 866 577
Total liabilities		20 364 745	15 855 282	4 932 377
TOTAL EQUITY AND LIABILITIES		44 034 591	42 393 356	15 297 335

Statement of cash flows

For the years ended 31 December
Cash flows from operating activities (EUR)	Notes	2022	2021
Profit or loss before tax		-18 580 401	-5 558 484
Adjustments to reconcile profit before tax to net cash flows:
Net financial income/expense	4.6	509 800	-175 209
Depreciation and impairment	3.1,3.2	4 818 176	1 395 222
Amortisation and impairment of Right-of-use assets	3.3	186 583	201 290
Impairment of subsidiaries		1 283 376	-
Share-based payment expense	4.7	272 869	361 208
Working capital adjustments:
Changes in trade receivables	2.5	-158 818	237 971
Changes in trade payables	2.6	940 246	-484 491
Change in inventories	2.4	1 095 426	-2 067 231
Net cash flows from operating activities		-9 632 743	-6 089 724
Cash flows from investing activities
Purchase of property, plant and equipment	3.1	-8 012 488	-12 692 135
Sale of property, plant and equipment	3.1	1 352 454	-
Purchase of capitalized other intangible assets	3.2	-1 998 916	-2 085 306
Sale of intangible assets	3.2	-	210 893
Sale of interests in associated companies		3 003	-
Investments in subsidiaries		-4 014 227	-
Consideration paid in AirRobot, Ecoxy and NUAer transactions (net of cash
acquired)		-	-8 099 377
Interest received
Net cash flow from investing activities		-12 670 174	-22 665 925

Cash flow from financing activities
Proceeds from issuance of equity	4.4	16 260 597	21 053 214
Transaction costs on issue of shares	4.4	-899 949	-901 705
Net disbursements overdraft facility		-	-
Proceeds from new debt (short/long term)	4.2	4 630 162	8 899 968
Repayment of debt (short/long term)	4.2	-2 001 343	-50 064
Payments for the principal portion of the lease liability	3.3	-197 159	-189 632
Payments for the interest portion of the lease liability	3.3	-46 255	-24 222
Interest paid		-193 465	-191 751
Net cash flows from financing activities		17 552 588	28 595 808
Net increase/(decrease) in cash and cash equivalents		-4 750 329	-159 841
Cash and cash equivalents at beginning of the year/period	4.6	5 009 335	5 083 427
Net foreign exchange difference		156 170	85 749
Cash and cash equivalents, end of year		415 176	5 009 335

Statement of changes in equity

	Share capital	Share premium	Treasury shares	Retained earnings	Shareholders Equity	Total Equity
Amounts in EUR
Balance at 1 January 2021	1 921 629	11 423 121	-203	-2 979 590	10 364 958	10 364 958
Profit (loss) for the year				-5 558 484	-5 558 484	-5 558 484
Issue of share capital (Note 4.5)	614 783	20 960 586			21 575 370	21 575 370
Merger The Staaker Company AS		37 705	-	-37 705	-	-
Share-based payments				361 208	361 208	361 208
Effect of put option on own shares (Note 4.1)				-737 182	-737 182	-737 182
Other					-	-
Currency translation effects (OCI)	95 434	646 284	-10	-209 505	532 203	532 203
Balance at 31 December 2021	2 631 846	33 067 697	-213	-9 161 257	26 538 073	26 538 073
Profit (loss) for the year				-18 580 401	-18 580 401	-18 580 401
Issue of share capital (Note 4.5)	1 560 550	13 800 099			15 360 648	15 360 648
Merger The Staaker Company AS					-	-
Acquisition of NUAer					-	-
Share-based payments (Note 4.7)				443 069	443 069	443 069
Purchase of own shares (Note 4.1)			-737 182	737 182	-	-
Other					-	-
Currency translation effects (OCI)				-91 543	-91 543	-91 543
Balance at 31 December 2022	4 192 396	46 867 796	-737 395	-26 652 950	23 669 846	23 669 846

1.1 General information

Corporate information

The financial statements of Nordic Unmanned ASA ("the Company" or "Nordic Unmanned") for the year ended 31 December 2022 were authorised for issue in accordance with a Board resolution on 8 May 2023. Nordic Unmanned ASA is a public limited liability company incorporated and domiciled in Norway and the whose shares are publicly traded. The company's head office is located at Rådhusgata 3, 4306 Sandnes, Norway.

Nordic Unmanned is global leader of high-end products and services related to drones and data capture. Through world-wide operational experience and industry leading expertise, Nordic Unmanned supports large governmental and industrial clients in the adaption of unmanned systems and services.

1.2 Basis of preparation

The financial statements of Nordic Unmanned ASA comprise statement of profit or loss and other comprehensive income, statement of financial position, statement of cash flows, statement of changes in equity, and related notes. The financial statements have been prepared in accordance with "IFRS-light" as regulated by the Norwegian Accounting Act. and represents the first financial statements of the company in accordance with IFRS-light. See section 8.1 for information related to first time adoption.

The financial statements have been prepared on a historical cost basis, except for certain financial instruments measured at fair value. Further, the financial statements are prepared based on the going concern assumption.

Comparative financial information is provided for the preceding period in the statement of comprehensive income, statement of financial position and statement of cash flows. In extension, an additional statement of financial position as at 1 January 2021 is presented in these financial statements due to the first time adoption of IFRS.

Presentation currency and functional currency

The financial statements are presented in Euros (EUR), whcih is also the functional currency of the company effective from 1 January 2022. Prior to 1 January 2022 the functional currency was Norwegian kroner (NOK). The company has elected to present its financial statements in EUR, primairly as this is the common currency amongst the industry and market that the company operates within.

1.3 Significant accounting policies

Current versus non-current classification

The company presents assets and liabilities in the statement of financial position based on current/non-current classification.

An asset is current when it is:

Expected to be realised or intended to be sold or consumed in the normal operating cycle,
Held primarily for the purpose of trading,
Expected to be realised within twelve months after the reporting period, or
Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

It is expected to be settled in the normal operating cycle,
It is held primarily for the purpose of trading,
It is due to be settled within twelve months after the reporting period, or

There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period The company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

1.4 Significant accounting judgements, estimates and assumptions

The preparation of the financial statements in accordance with IFRS and applying the chosen accounting policies requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and the underlying assumptions are reviewed on an ongoing basis.

Refer to note 1.4 in the Group consolidated financial statements for a summary of estimates and assumptions or judgements applied.

1.5 Fair value measurement

ACCOUNTING POLICIES

In the principal market for the asset or liability, or
In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

Fair value disclosures

ACCOUNTING POLICIES

Revenue

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods or services before transferring them to the customer.

Revenue from the sale of goods is recognised over-time to the extent the Company's performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance completed to date. Progress is measured using a cost-to-cost based approach. Other sale of goods are recognised at the point-in-time when control of the asset is transferred to the customer. The determination of over-time versus point-in-time revenue recognition and determining progress requires the use of judgement.

Revenue from services is recognised over-time as the customer simultaneously receives and consumes the benefits provided by the Company's performance as the Group performs.

The Company's revenue from contracts with customers has been disaggregated and presented in the tables below:

Per area of operation:	2022	2021
Nordun	10 677 980	6 207 354
NUTech	723 326	811 974
NUmar	212 745	81 718
NUGlobal	1 569 331	1 111 740
Overhead	1 579	40 805
Total	13 184 961	8 253 591

Per geographic market:	2022	2021
Norway	2 853 553	1 201 482
France	2 084 655	1 678 777
Spain	2 162 079	1 617 587
Germany	1 527 106	753 110
Estonia	1 460 503	-
Finland	839 211	3 410
Portugal	475 695	668 050
Romania	57 519	360 783
Lithuania	-25 000	1 178 603
Other	1 749 641	791 790
Total	13 184 961	8 253 591

2.2 Employee benefit expenses

ACCOUNTING POLICIES

Employee benefit expenses comprise all types of remuneration to personnel employed by the Compnay (ie. not contracted manpower) and are expensed when earned. Ordinary salaries can be both fixed pay and hourly wages and is earned and paid periodically. Holiday pay is earned on the basis of ordinary pay and is normally paid in the holiday months of the following year. The employer's national insurance contribution (social security) is calculated and expensed for all payroll related costs including pensions. Pension contributions are earned on a monthly basis. Other employee expenses consist of other benefits such as insurance, telephones and remuneration to the Board of Directors.

Pensions

Nordic Unmanned AS has defined contribution pension plans for its employees which satisfies the statutory requirements in the Norwegian law on required occupational pension ("lov om obligatorisk tjenestepensjon"). A total of 104 employees were part of the Company's pension plan at 31.12.22.

Employee benefit expenses	2022	2021
Salaries	8 678 686	5 647 320
Social security costs	1 318 131	880 070
Share-based payments	443 069	361 208
Social security costs Share-based payments	-170 200	101 835
Pension costs	184 238	90 728
Capitalized assets and work in progress	-1 279 882	-745 741
Hired Personnel*	977 742	158 932
Other employee expenses	340 098	-368 791
Total employee benefit expenses	10 491 883	6 125 561
Average number of full time employees (FTEs)*	108	66

*Personnel Expense include short term hired crew personnel. These are not included in the number of FTE's.

Employee share program

2.3 Operating expenses

ACCOUNTING POLICIES

Other operating expenses are recognised when they occur and represent a broad range of operating expenses incurred by the Company in its day-to-day activities. Other operating expenses consist of expenses that are not classified on the lines for cost of materials, employee benefit expenses, depreciation and amortisation.

Other operating expenses	2022	2021
Audit and accounting fees	687 541	406 982
HR consulting fees	-	135 798
Insurance expenses	934 800	334 609
Lease expenses	673 154	147 379
Legal expenses	716 967	401 737
Other consulting fees	2 068 162	1 607 229
Other operating expenses	334 096	758 922
Training expenses	1 966 400	1 694 623
Travel expenses	1 610 515	829 752
Total other operating expenses	8 991 635	6 317 033

Auditor fees	2022	2021
Audit fee	145 174	63 517
Other services	50 157	65 637
Total remuneration to the auditor	195 331	129 155

Total research expenses for 2021 was EUR 222 thousand (EUR 186 thousand for 2020), recognised as employee

benefit expenses and other operating expenses in the consolidated statement of profit and loss.

Audit fee:

The amounts above are excluding VAT.

2.4 Inventory

ACCOUNTING POLICIES

Spare parts and consumables are measured at cost on a first-in/first-out basis.

	31.12.2022	31.12.2021	01.01.2021
Work in progress and materials	943 259	1 063 611	-
Finished goods	974 447	1 749 420	304 274
Provision for obsolescence	-590 537	-390 437	-
Total	1 327 168	2 422 594	304 274

During 2022 EUR 1 million (2021: EUR 0.11 million) was recognised as an expense for inventories carried at net realisable value. This is recognised in cost of sales.

Work in progress and finished goods includes consumable spare partes, rotables and products for sale. Rotables and spareparts which have been undertaken maintenance, repair and overhaul on the company's engines and other related components.

2.5 Receivables

ACCOUNTING POLICIES

Trade receivables

A receivable represents the Company's right to an amount of consideration that is unconditional.

Contract assets

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.

	31.12.2022	31.12.2021	01.01.2021
Trade receivables from third-party customers	319 201	158 381	384 035
VAT receivable	134 919	235 511	103 952
Contract asset	674 332	511 979	287 279
Pre-paid suppliers	809 856	923 604	378 041
Other receivable*	1 505 185	284 204	455 267
Total current receivables	3 443 493	2 113 680	1 608 574

Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days. For terms and conditions relating to related party receivables, refer to Note 7.2.

* Other receivable contains rewarded insurance claims for total loss of assets. Awating payments of 1,5 MEUR in 2023.

Expected credit loss

The company does not expect credit loss of current outstanding receivables. The company's main customers are government institutions based on contracts. There are no ongoing disputes.

2.6 Provisions

ACCOUNTING POLICIES

Provisions are liabilities with uncertain timing or amount and are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the expenditure required to settle the present obligation at the balance sheet date, that is, the amount that an entity would rationally pay to settle the obligation at the balance sheet date or to transfer it to a third party. Social security provisions related to the share based payments are made based on the social security contributions expected to be paid on exercise of the share options when the options are fully vested.

Other commitments and contingencies

Contingent assets are not recognised in the financial statements but are disclosed when an inflow of economic benefits is considered probable. The Company has no contingent assets or liabilities that meet the criteria for disclosure.

Other commitments

The Company did not provide guarantees to or on behalf of third parties or related parties. The Company has no other significant commitments to disclose.

2.7 Payables

ACCOUNTING POLICIES

Trade and other payables are liabilities, i.e. present contractual obligations arising from a result of past events where settlement is expected to result in an outflow of resources (payment). Trade payables consist of invoices for goods and services where the Company has received the significant risks and rewards of ownership as of 31.12.

	31.12.2022	31.12.2021	01.01.2021
Trade payables	1 917 465	977 219	1 402 634
Trade payables	1 917 465	977 219	1 402 634

Accrued salaries	1 367 033	1 064 247	361 914
Short term contingent consideration acquisition of shares	-209 304	775 314	-
Put option on own shares (see Note 6.2)	-	872 332	-
Other accrued expenses	569 909	260 805	265 218
Other current liabilities	1 727 638	2 972 697	627 132

3.1 Property, plant and equipment

ACCOUNTING POLICIES

The Company assesses, at each reporting date, whether there is an indication that property, plant and equipment may be impaired. If such indication exists, the Company estimates the asset's or CGU's recoverable amount. The recoverable amount is the higher of an asset's or CGU's fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.

No indicators for impairment of property, plant and equipment were identified in the current or prior period.

Assets under construction include assets that have not yet been fully delivered and accepted by the Company at the reporting date. The construction and delivery time of these systems are normally in the range of 6-12 months and will be transferred to Aircrafts and spareparts upon delivery and final acceptance test. No depreciation charge are regognized towards assets under construction.

Impairment

There has been no impairment losses recognised related to property, plants and equipment. However, impairment triggers has been identified related to part of the drone fleet that were not generating revenue as per year end and that were not committed to any contract or source of revenue as per year end. Sources of measurement of fair value used in impairment testing include quoted prices for similar systems from Original Equipment Manufacturer and sale / lease offers sent to potential buyers of the systems. There is not an established second hand market or market prices for drone assets, and hence there is a significant uncertainty related to the book values in the balance sheet related to our drone fleet. Including market for sale and use cases for each type of drone, as well as discount rate and residual value assumptions related to net present value calculations. Relativly small changes to key assumtions will cause impairment.

	Fixtures, fittings and tools	Aircraft and spareparts	Assets under construction	Total
Cost as at 1 January 2021	1 106 260	4 371 893	-	5 478 153
Additions	504 088	6 036 556	5 814 778	6 540 644
Currency translation effects	-	-		-
Cost as at 31 December 2021	1 610 348	10 408 449	5 814 778	17 833 574
Additions	245 234	6 808 006	1 379 312	8 432 552
Transfer	-	6 321 124	-6 741 188	-420 064
Currency translation effects	-	684		684
Disposals	-	-1 352 454		-1 352 454
Cost as at 31 December 2022	1 855 582	22 185 809	452 903	24 494 293
Depreciation and impairment as at 1 January 2021	188 241	437 433	-	625 674
Depreciation for the year	354 517	992 072	-	1 346 589
Currency translation effects	-	-		-
Depreciation and impairment as at 31 December 2021	542 759	1 429 505	-	1 972 264
Depreciation for the year	359 510	2 068 235	-	2 427 745
Disposals	-	-199 488
Currency translation effects	819	-		819
Depreciation and impairment as at 31 December 2022	903 088	3 298 252	-	4 201 340
Net book value:
At 01 January 2021	918 018	3 934 459	-	4 852 476

At 31 December 2021 8 978 943 1 067 589 5 814 778 15 861 309 At 31 December 2022 18 887 557 952 494 452 902 20 292 952

Economic life (years) 3-5 5-10

Depreciation plan Straight-line method Straight-line method No depreciation

3.2 Intangible assets

ACCOUNTING POLICIES

The useful lives of intangible assets are assessed as either finite or indefinite.

Research and development costs

Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset when the Group can demonstrate:

The technical feasibility of completing the intangible asset so that the asset will be available for use or sale
Its intention to complete and its ability and intention to use or sell the asset
How the asset will generate future economic benefits
The availability of resources to complete the asset
The ability to measure reliably the expenditure during development

Patents and licences

The company has, directly as well as through acquisitions of other entities, acquired patents and licences and allocated value to these in the balance sheet. The patents have generally been granted for an original period of 10 years by the relevant government agency. The licences are assessed to have economic lives from five to ten years from origination.

Impairment and key assumptions

Development, concessions, patens and licenses has been tested for impairment with Discounted Cash Flow (DCF) as main valuation method, using a weighted average cost of capital (WACC) of 15% as discount rate, and a cash flow over normally 6 years period based on next years budget with managements assumptions of future growth thereafter, and a residual value based on Gordon growth with a 3% growth rate from steady state.

Based on the imapairment tests an impairment has been recognised in the Development category as at 31 December 2022. There are no other impairments . At 31 December 2022, there are no other impairment triggers. the intangible assets with impairment indications have been impaired.

	Development	Concessions, patents and licenses	Total
Cost as at 1 January 2021	-	1 184 350	1 184 350
Additions	2 116 952	-	2 116 952
		-210 893
Currency translation effects		3 821	3 821
Cost as at 31 December 2021	2 116 952	977 278	3 094 230
Additions	1 431 077	567 839	1 998 915
Disposals	-	-	-
Currency translation effects		3 599	3 599
Cost as at 31 December 2022	3 548 029	1 548 716	5 096 744
Depreciation and impairment as at 1 January 2021	-	159 759	159 759
Depreciation for the year	289 137	69 806	358 943
Disposals		-69 049
Currency translation effects			-
Depreciation and impairment as at 31 December 2021	289 137	160 516	449 653
Depreciation for the year	449 174	66 029	515 204
Impairment for the year	2 070 996	-	2 070 996
Disposals	-	-	-
Currency translation effects	2 802		2 802
Depreciation and impairment as at 31 December 2022	2 812 109	226 545	3 038 654
Net book value:
At 01 January 2021	-	1 024 591	1 024 591
At 31 December 2021	1 827 815	816 762	2 644 577

At 31 December 2022 1 322 170 735 920 2 058 090

Economic life (years) 5-10 5-10 Depreciation plan Straight-line method Straight-line method

ACCOUNTING POLICIES

At inception of a contract, The company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the company assesses whether:

The agreement creates enforceable rights of payment and obligations
The identified asset is physically distinct
The supplier does not have a substantive right to substitute the asset throughout the period of use
It has the right to obtain substantially all of the economic benefits from use of the asset
It has the decision-making rights that are most relevant to changing how and for what purpose the asset is used throughout the contract period

Nordic Unmanned as a lessee

At the commencement date, the company recognises a lease liability and corresponding right-of-use asset for all lease agreements in which it is the lessee, except for the following exemptions applied:

Short-term leases (defined as 12 months or less)
Low value assets (with an underlying value of less than 5 thousand EUR)

For these leases, the company recognises the lease payments as operating expenses in the consolidated statement of comprehensive income.

Measuring the lease liability

The lease payments included in the measurement comprise:

Fixed lease payments, less any lease incentives received
Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date

The company presents its lease liabilities as separate line items in the consolidated statement of financial position.

Measuring the right-of-use asset

The Company presents its right-of-use assets as separate line items in the consolidated statement of financial position.

Nordic Unmanned's leased assets

The company has lease agreements for office buildings, located in Sandnes and Fornebu in Norway. The Company is also leasing cars.

The Company's right-of-use assets recognised in the consolidated statement of financial position are presented in the table below:

Right-of-use assets

		Office
	Vehicles	Buildings	Total
Acquisition cost at 1 January 2021	81 238	254 007	335 245
Additions of right-of-use assets	0	1 039 551	1 039 551
Currency translation effects	0	15 305	15 305
Acquisition cost at 31 December 2021	81 238	1 308 864	1 390 102
Additions of right-of-use assets	0	0	0
Currency translation effects	0	0	0
Acquisition cost at 31 December 2022	81 238	1 308 864	1 390 102
Depreciation and impairment at 1 January 2021	19 366	126 292	145 658
Depreciation of right-of-use assets	20 425	180 865	201 290
Currency translation effects		-8 386	-8 386
Depreciation and impairment at 31 December 2021	39 791	298 771	338 562
Depreciation of right-of-use assets	20 785	173 127	193 912
Currency translation effects	0
Depreciation and impairment at 31 December 2022	60 576	471 897	532 473
Carrying amount at 1 January 2021	61 872	127 716	189 588
Carrying amount at 31 December 2021	41 447	1 010 093	1 051 540
Carrying amount at 31 December 2022	20 662	836 966	857 628
Remaining lease term or remaining useful life	2-5	2-8
Depreciation plan		Straight-line method

The Company's lease liabilities
Undiscounted lease liabilities and maturity of cash outflows	31.12.2022	31.12.2021	01.01.2021
Less than one year	203 722	197 159	139 617
One to two years	200 343	214 429	39 712
Two to three years	194 810	210 873	18 397
Three to four years	389 620	205 049	5 556
More than four years	169 673	365 998	0
Total undiscounted lease liabilities	1 158 169	1 193 509	203 282
Changes in the lease liabilities - 2021			Total
At first time adoption of IFRS 1 January 2021			194 714
New leases recognised during the period			1 039 551
Cash payments for the principal portion of the lease liability			-189 632
Interest expense on lease liabilities			24 222
Currency translation effects			18 988
Total lease liabilities at 31 December 2021			1 087 843
Current lease liabilities in the statement of financial position			305 802
Non-current lease liabilities in the statement of financial position			782 041
Changes in the lease liabilities - 2022			Total
At 1 January 2022			1 087 843
New leases recognised during the period
Cash payments for the principal portion of the lease liability			-197 159
Interest expense on lease liabilities			46 255
Currency translation effects			17 611

Total lease liabilities at 31 December 2022			954 549
Current lease liabilities in the statement of financial position Non-current lease liabilities in the statement of financial position			306 839 647 710

Lease commitments not included in the lease liabilities

Inflation adjustments

In addition to the lease liabilities presented above, the Company is committed to pay variable lease payments for its office buildings, mainly related to future inflation adjustments which is not included in the initial calculation of lease liabilities. The lease liability and right-of-use asset will be adjusted to reflect the inflation adjustment when the uncertainty related to the adjustment has been resolved, however, due to low inflation forecasts these adjustments are expected to be immaterial.

Extension and termination options

The company has some lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the company's business needs. Management applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, they considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate.

The Company did not include the renewal period for leases as part of the lease term because management were not reasonably certain to exercise the option to renew the leases. Furthermore, the periods covered by termination options are included as part of the lease term only when they are reasonably certain not to be exercised.

Other matters

The company's leases does not contain provisions or restrictions that impacts that company's dividend policies or financing possibilities. Further, the company does not have significant residual value guarantees related to its leases.

4.1 Financial instruments

ACCOUNTING POLICIES

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Classification of financial instruments

The Company's financial instruments are grouped in the following categories:

Financial Assets

Financial assets measured subsequently at amortised cost: Includes mainly trade receivables, other receivables and cash equivalents
Financial assets measured subsequently at fair value through profit or loss: Includes other current financial assets

With the exception of other current financial assets, the Company's financial assets are part of the Company's business model with the sole objective to collect contractual cash flows. Additionally, the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, thereby passing the "SPPI test", constituting debt instruments measured at amortised cost.

Financial Liabilities

Financial liabilities measured subsequently at amortised cost: Represent the Company's non-interest bearing liabilities such as trade payables, and borrowings, see note 4.2.

The Company does not have derivative financial instruments measured at fair value. All financial assets and liabilities are measured subsequently at amortised cost, with the exception of other current financial assets measured at fair value.

As part of the acquisition of AirRobot, the company had a contractual obligation to purchase its own equity instruments. This gave rise to a financial liability for the present value of the redemption amount even if the obligation to purchase is conditional on the counterparty exercising a written put option that gives the counterparty the right to sell its own equity instruments to the entity for a fixed price. The financial liability was recognised initially at the present value of the redemption amount, and reclassified from equity. Subsequently, the financial liability was measured at fair value through profit or loss. Had the contract expired without delivery, the carrying amount of the financial liability would have been reclassified to equity. As at year end 2022 the put option has been exercised and the liability settled, except for an agreed deferred payment presented as other current liabilities and measured at amortised cost.

Initial recognition and subsequent measurement

Financial assets and liabilities at amortised cost

The Company's financial assets and liabilities are initially recognised at fair value plus directly attributable transaction expenses. Subsequently, these instruments are measured at amortised cost using the effective interest method (EIR). Gains and losses are recognised in profit or loss upon impairment, when the instruments are derecognised as well as through the EIR amortisation process.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are recognised at fair value and carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss.

Impairment of financial assets

Financial assets measured at amortised cost are considered for impairment by recognising an allowance for expected credit losses (ECLs). The Company applies a simplified approach (as applicable for trade receivables) in calculating ECLs, where the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Company bases its ECLs on its historical losses, adjusted for forward-looking factors specific to the debtors and the economic environment. See note 4.3 for further information related to management of credit risk.

Derecognition of financial instruments

A financial asset is derecognised when the rights to receive cash flows from the asset have expired, the Company has transferred its rights to receive cash flows from the asset or the Company has assumed an obligation to pay the received cash flows in full under a "pass-through" arrangement.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

		Financial	Financial instruments at
	31.12.2022 Notes	instruments at amortised cost	fair value through profit or loss	Total
Assets
Trade and other receivables	2.5	319 201	-	319 201
Other current financial assets*			-	-
Cash and cash equivalents	4.5	415 176	-	415 176
Total financial assets		734 377	-	734 377
Liabilities
Trade payables	2.7	1 917 465		1 917 465
Accruals	2.7	1 936 942		1 936 942
Liabilities to related parties	7.2	1 021 065		1 021 065
Contingent consideration - current	2.7		-209 304	-209 304
Contingent consideration - non-current			2 025 000	2 025 000
Interest bearing loans and borrowings current		2 673 760		2 673 760
Interest bearing loans and borrowings non-current		9 345 168		9 345 168
Total financial liabilities		16 894 401	1 815 696	18 710 097

		Financial	Financial instruments at
		instruments at	fair value through profit
31.12.2021	Notes	amortised cost	or loss	Total
Assets
Trade and other receivables	2.6	2 113 680	-	2 113 680
Cash and cash equivalents	4.5	5 009 335	-	5 009 335
Total financial assets		7 123 015	-	7 123 015

Liabilities
Trade payables	2.8	977 219	-	977 219
Accruals	2.8	1 325 052	-	1 325 052
Contingent consideration - current	2.8	-	775 314	775 314
Contingent consideration - non-current	2.8	-	350 392	350 392
Effect of put option on own shares (see Note 6.2)	6.2	872 332	-	872 332
Interest bearing loans and borrowings current		2 666 797	-	2 666 797
Interest bearing loans and borrowings non-current		6 769 555	-	6 769 555
Total financial liabilities		12 610 954	1 125 706	13 736 660

01.01.2021	Notes	Financial instruments at amortised cost	Financial instruments at fair value through profit or loss	Total
Assets
Trade and other receivables	2.6	1 610 249	-	1 610 249
Cash and cash equivalents	4.5	5 083 427	-	5 083 427
Total financial assets		6 693 675	-	6 693 675

Liabilities
Trade payables	2.8	1 402 634	-	1 402 634
Accruals	2.8	627 132	-	627 132
Interest bearing loans and borrowings current		418 263	-	418 263
Interest bearing loans and borrowings non-current		2 007 339	-	2 007 339
Total financial liabilities		4 455 367	-	4 455 367

There are no changes in classification and measurement for the company's financial assets and liabilities.

Finance income and finance costs arising from the company's financial instruments are disclosed separately in note 4.6.

4.2 Maturity of financial liabilities

Contractual undiscounted cash flows from financial liabilities is presented below:

	Remaining contractual maturity
31.12.2022	1-12 months	1-2 years	2-3 years	3-4 years	4-5 years	More than 5 years	Total
Financial liabilities
Interest bearing loans and borrowings	3 150 487	3 065 274	2 933 553	2 328 864	2 021 747	-	13 499 924
Total financial liabilities	3 150 487	3 065 274	2 933 553	2 328 864	2 021 747	-	13 499 924
				Remaining contractual maturity
31.12.2021	1-12 months	1-2 years	2-3 years	3-4 years	4-5 years	More than 5 years	Total
Financial liabilities
Interest bearing loans and borrowings	2 756 559	2 748 002	2 676 866	1 251 616	-	-	9 433 043
Total financial liabilities	2 756 559	2 748 002	2 676 866	1 251 616	-	-	9 433 043
				Remaining contractual maturity
01.01.2021	1-12 months	1-2 years	2-3 years	3-4 years	4-5 years	More than 5 years	Total
Financial liabilities
Interest bearing loans and borrowings	526 870	577 874	626 039	605 197	468 696	-	2 804 675
Total financial liabilities	526 870	577 874	626 039	605 197	468 696	-	2 804 675

Reconciliation of changes in liabilities incurred as a result of financing activities:

			Non-cash changes
2022 Interest bearing loans and borrowings	01.01.2022	Cash flow effect	Foreign exchange movement	Other changes	31.12.2022
SR-bank	8 885 735	791 272	-	-	9 677 007
Innovasjon Norge	550 617	1 623 450	167 855	-	2 341 921
Total liabilities from financing	9 436 352	2 414 721	167 855	-	12 018 928

			Non-cash changes
2021 Interest bearing loans and borrowings	01.01.2021	Cash flow effect	Foreign exchange movement	Other changes	31.12.2021
SR-bank	1 824 921	7 075 054	-14 240	-	8 885 735
Innovasjon Norge	600 681	-50 064	-	-	550 617
Total liabilities from financing	2 425 602	7 024 990	-14 240	-	9 436 352

Credit facilities - utilised and unused amount

	31.12.2022	31.12.2021
Drawn amount credit facility	-	-
Undrawn amount credit facilities	4 975 971	2 002 243
Booked value of assets pledged as collateral for liabilities to financial institutions	31.12.2022	31.12.2021
Fixed assets	21 150 582	15 861 310
Inventory	785 058	1 563 490
Account receivable	319 201	158 391
Investments	2 145 220	-

The following financial covenants are applicable to The Company at 31.12.22:

Equity ratio of 40% Working capital ratio of 1,15 (No longer applicable after new financial structure in 2023) Mimimum value clause of 60% of assets

The Company is in compliance with all covenants as of 31.12.2022.

The weighted average effective interest rate on interest-bearing liabilities was 4,4%.

4.3 Financial risk management

Overview

The Company's principal financial liabilities, comprise liabilities to financial institutions and trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include trade and other receivables, and cash and short-term deposits that derive directly from its operations.

The Company is exposed to a range of risks affecting its financial performance, including market risk, credit risk and liquidity risk. The Company seeks to minimise potential adverse effects of such risks through sound business practise, risk management and hedging.

Risk management is based on the principle that risk evalution is an integral part of all business activities. The Company has establised policies and procedures to manage risk and to face risks and uncertainties in a global marketplace.

For an overview and description of the financial risk management, see note 4.3 in the Consolidated financial statements for the Group.

ACCOUNTING POLICIES

Treasury shares

Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments. Any difference between the carrying amount and the consideration, if reissued, is recognised in the share premium.

Costs related to equity transactions

Transaction costs are deducted from equity, net of associated income tax.

Distribution to shareholders

The Company recognises a liability to make distributions to equity holders when the distribution is authorised and the distribution is no longer at the discretion of the company. As per the corporate laws of Norway, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity. The annual financial statement can be obtained from the Group's head office , Rådhusgata 3, 4306 Sandnes Norway, or though the company's website: https://nordicunmanned.com/

No distributions were made to shareholders in the current or prior period.

Capital management

For the purpose of the Company's capital management, capital includes issued ordinary share capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company's capital management is to maximise the shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company's policy is to keep the gearing ratio between 20% and 40%. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and short-term deposits.

Issued capital and reserves:

	Number of
	shares	Par value	Financial
	authorised and	per share	Position
Share capital in Nordic Unmanned AS	fully paid	(NOK)	(EUR)
At 1 January 2021	20 120 032	1,000	1 921 629
Issue of shares	6 168 952	1,000	614 783
Currency translation effects			95 434
At 31 December 2021	26 288 984	1,000	2 631 846
Issue of shares	16 174 861	1,000	1 560 550
Currency translation effects			-
At 31 December 2022	42 463 845	1,000	4 192 396

All shares are ordinary and have the same voting rights and rights to dividends.

Reconciliation of the Company's equity is presented in the statement of changes in equity.

4.5 Cash and cash equivalents

ACCOUNTING POLICIES

Cash and cash equivalents	31.12.2022	31.12.2021	01.01.2021
Bank deposits, unrestricted	36 148	4 723 756	4 957 234
Bank deposits, restricted	379 028	285 580	126 192
Total cash and cash equivalents	415 176	5 009 335	5 083 427

Bank deposits earns a low interest at floating rates based on the bank deposit rates.

4.6 Financial income and expenses

ACCOUNTING POLICIES

Interest income and interest expenses are calculated using the effective interest method.

Foreign currency gains or losses are reported as gain or loss on foreign exchange within in finance income or finance costs, except for currency translation effects from investments in foreign subsidiaries which are presented within OCI. For other accounting policies related to the underlying financial instruments, reference is made to note 4.1.

Finance income	2022	2021
Interest income	12 045	12 730
Other finance income	528 577	24 222
Gain on foreign exchange	686 125	752 579
Total finance income	1 226 747	789 531

Finance costs	2022	2021

Interest expenses	733 974	199 386
Interest expense on lease liabilities	46 255	27 662
Other finance costs	96 434	88 209
Loss on foreign exchange	859 884	299 066

Interest income represents mainly interest income on cash deposits, and interest expenses represents mainly interest expenses on overdue payables, measured and classified at amortised cost in the statement of financial position.

Other finance income is related to income from other current financial assets.

4.7 Share based payments

Share option plan - Description

Under the Share Option Plan (SOP), share options of the parent are granted to management and key employees. The exercise price of the share options is generally set equal to the market price of the underlying shares on the date of grant, but from time to time awards are made with an exercise price significantly lower than the share price. The share options were granted on the 1 December 2019, 15 December 2020 and 19 November 2021 and are split into tranches that generally vest over two or three years.

The share options can be exercised up to five years after the grant date and expire approximately four years from the balance sheet date 31 December 2021. The Group settles the share options by delivery of shares. Share options held by management at the end of the reporting period are summarised in note 7.1.

The fair value of the options were determined at the grant dates and expensed over the vesting period. EUR 443 thousand has been expensed as employee benefit expenses and EUR 170 thousand of social security charges have been reversed in the period (employee expenses of EUR 361 thousand and social security charges of EUR 102 thousand were expensed in 2021).

See Note 4.7 in the Group consolidated financial statements for more detailed disclosures on share based payments for Nordic Unmanned AS.

5.1 Taxes

ACCOUNTING POLICIES

Current income tax

Current income tax is measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Company operates and generates taxable income. Current income tax relating to items recognised directly in equity is recognised in equity (OCI) and not in the statement of profit or loss.

Deferred tax

When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future

When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised

SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The Company has EUR 28 million as at 31.12.2022 (EUR 13 million as at 31.12.2021 and EUR 8 million as at 01.01.2021) of tax losses carried forward. The tax losses carried forward may be offset against future taxable income and will not expire. Due to significant uncertainty as to when the related deferred tax assets may be recovered, no deferred tax assets have been recognised as at year end 2022.

Current income tax expense:		2022	2021
Tax payable		-	-
Change deferred tax/deferred tax assets (ex. OCI effects)		3 499 706	-1 379 463
Total income tax expense		3 499 706	-1 379 463

Deferred tax assets:	31.12.2022	31.12.2021	01.01.2021
Trade receivables	0	2 002	1 910
Other short-term receivables	0	3 645 899	438 188
Inventory	570 859	390 437	262 648
Lease liabilities	954 549	1 087 843	194 714
Public duties payable	0	172 162	65 381
Other current liabilities	0	230 285	0
Losses carried forward	28 272 671	13 222 336	7 949 872
Basis for deferred tax assets:	29 798 079	18 750 965	8 912 713

Deferred tax liabilities	31.12.2022	31.12.2021	01.01.2021
Development Concessions, patents, licenses	0	0	0
Property, plant and equipment	4 562 536	2 230 984	888 301
Right-of-use assets	857 628	1 051 540	189 588
Basis for deferred tax liabilities	5 420 164	3 282 524	1 077 889

Net basis for deferred tax liabilities/(-assets)	-24 377 915	-15 468 441	-7 834 824
Net basis for deferred tax liabilities/(-assets) at 22% tax rate	-24 377 915	-15 468 441	-7 834 824
Calculated net deferred tax assets	-5 363 141	-3 403 057	-1 723 661
- Deferred tax assets not recognised	5 363 141		679 193
Net deferred tax assets recognised	-	-3 403 057	-1 044 468
Calculated deferred tax liabilities	-
Deferred tax liabilities recognised in the statement of financial position	-	-	-
Deferred tax assets recognised in the statement of financial position	-	3 403 057	1 044 468

A reconciliation of the differences between the theoretical tax expense under the applicable rate and the actual tax expense is as follows:

Reconciliation of income tax expense	2022	2021
Profit or loss before tax	-15 080 695	-6 937 946
Tax expense 22%	-3 317 753	-1 526 348
Change to prior period tax expense	-	-
Permanent differences*	-148 693	-235 450
Effects of changes in tax rate	-	-
Currency effects	983 000	382 335
Effect of not recognising deferred tax assets	5 983 152	-
Recognised income tax expense	3 499 706	-1 379 463

* The permanent differences are primarily transaction costs related to share issues which have been recognised against share premium.

6.1 Subsidiaries and associated companies

ACCOUNTING POLICIES

Shares in subsidiaries

Shares in subsidiaries are accounted for using the cost method in accordance with IAS 27 Separate Financial Statements. Dividends from subsidiaries are recognised when the right to receive the dividend is established. The dividend is recognised in profit or loss.

The subsidiaries:

On 21 September 2021, Nordic Unmanned acquired 100 percent of the shares in Ecoxy AS, the leading Norwegian provider of accredited emission measurements for the shipping and oil and gas industry. Total consideration paid was EUR 2 054 936 and consisted of a cash payment of EUR 950 132, EUR 491 024 for shares issued at fair value and a contingent consideration of EUR 613 780.

On 14 October 2021, Nordic Unmanned acquired 100 percent of the shares in AirRobot GmbH, a leading German drone developer and manufacturer. The total consideration paid was EUR 5 358 157 and consisted of EUR 3 989 595, shares issued at fair value of EUR 747 805 and a contingent cosidertion of EUR 620 758.

On the 16th of June 2022, Nordic Unmanned acquired 55% percentage of the shares in DroneMatrix NV, a leading drone technology company in Belgium, and with the right and obligation to acquire the remaining 45% within 3 years after the date of the transaction. The total consideration paid was EUR 2.5 million whereof 1.5 million were an equity issue in the company and EUR 1 million was share purchase.

The subsidiaries of Nordic Unmanned AS are presented below:

			Shareholding and
Subsidiaries			voting ownership
31 December 2022	Office	CUR	share	Book value	Net investment	Equity (100%)	Profit/loss
AirRobot® GmbH & Co. KG	Arnsberg, Germany	EUR	100 %	5 232 976		3 861 423	-78 382
AirRobot Beteiligungs GmbH	Arnsberg, Germany	EUR	100 %	49 057		40 000
DroneMatrix NV*	Hasselt, Belgium	EUR	55%*	4 500 000		1 435 947	-224 726
Ecoxy AS	Molde, Norway	NOK	100 %	2 094 820		769 234	352 602
Nordic Unmanned North America Group LLC	Baltimore, USA	USD	100 %		4 731
Nordic Unmanned North America LLC	Baltimore, USA	USD	92 %		75 677	43 343	-43 343
Nordic Unmanned UK Ltd.	Birmingham, UK	GBP	100 %		273 857	-181 557	-106 374
Nordic Unmanned DK ApS	Odense, Denmark	DKK	100 %	5 366		5 366
NUAer AS**	Sandnes, Norway	NOK	60 %	300 000		1 580 887
Total investment in subsidiaries				12 217 219	354 265	7 654 643	-100 223

* Nordic Unmanned ASA has an agreement to buy the remaining 45% of the non-controlling shareholder position within 3 years. Nordic Unmanned will after this hold 100% of DroneMatrix NV shares.

** During 2022, Nordic Unmanned AS has recognised an impairment of 1,28 MEUR in NUAer. The investment in NUAer has been tested for impairment using two Discounted Cash Flow scenarios relating to sales and lease opportunity that is weighted 50/50. Discounted Cash Flow method, using a weighted average cost of capital (WACC) of 15% as discount rate, and a cash flow over normally 5 years period based on next years budget with managements assumptions of future growth with no terminal value. Conducted sensitivity analyses of the key parameters shows a reasonable headroom for changes in key parameters defined above.

7.1 Remuneration to Management and the Board

Remuneration to the Board of Directors

Remuneration for the members of the Board is determined by the Annual General Meeting (AGM). The remuneration is not linked to the company's performance but reflects the Board's responsibilities, expertise, time and commitment.

Remuneration to the management team

The Board of Nordic Unmanned ASA determines the principles applicable to the company's policy for compensation to the management team. The Board is directly responsible for determining the CEO's salary and other benefits. The management team includes the Chief Executive Officer, Chief Operations Officer, Chief Finance Officer, Chief Revenue Officer, Chief Legal Officer, Chief Technical Officer and Chief People Officer.

Principles for determining salary

Pension

Other benefits

Members of the management team have been granted share options under the company's share option plan, described in note 4.8. The share options held by the management team is summarised further below. Members of the management team have been awarded the possibility to purchase stocks with 30% discount through the Employee Share Subscription Program made available to all employees as part of the private placement on September 29th, 2021. The members of the management team are part of a collective annuity agreement.

Severance Arrangements

Loans and guarantees

No loans or guarantees have been granted to any member of the management or the Board of Directors.

**Remuneration to the management team for the year ended 31 December 2022*:**

							Outstanding	Outstanding
					Other	Total	shares	share options
EUR	Position	Salary	Bonus	Pension	compensation	remuneration	(number)	(number)
Knut Roar Wiig (1)	CEO**	191 124	19 794	3 822	25 548	240 288	1 922 536	310 000
Trond Østerhus	CFO***	136 323	11 691	2 726	10 165	160 905	46 565	100 000
Lars A. Landsnes	COO	154 873	27 836	3 097	25 096	210 902	223 755	240 000
Cecilie Drange	CRO	137 168	22 964	2 743	9 500	172 376	137 621	100 000
Steffan Lindsø	CTO	116 007	5 799	2 320	9 357	133 484	9 027	50 000
Thomas Alexander Ladsten	CLO	138 775	31 702	2 775	11 488	184 740	60 915	75 000
Katrine Elin Meldah	CLO	118 26	3 629 7	2 365	8 669	132 931	66 328	-
Arne Roland (Interim CEO, 2023)		-	-	-	-	-	1 535	-
Total		992 538	123 415	19 851	99 822	1 235 626	2 468 282	875 000

*All remuneration to management is paid in NOK and converted to EUR using a yearly average EUR/NOK-rate of 10.104

** Former CEO

*** Former CFO (1) Severence payments to former CEO amounts to EUR 246 590 and will be paid out through March 23 - June 24.

**Remuneration to the management team for the year ended 31 December 2021*:**

							Outstanding
					Other	Total	shares	outstanding share
EUR	Position	Salary	Bonus	Pension	compensation	remuneration	(number)	options (number)
Knut Roar Wiig	CEO	163 081	85 470	13 295	16 844	278 68 9	2 793 62 5	315 00 0
Trond Østerhus (1)	CFO	91 820	11 621	10 649	408	114 498	27 760	100 000
Lars A. Landsnes	COO	146 342	27 669	12 174	17 276	203 461	193 75 5	245 00 0
Cecilie Drange (2)	CRO	110 676	22 827	10 684	531	144 718	50 404	100 000
Steffan Lindsø (3)	CTO	30 743	5 764	2 776	153	39 437	9 027	50 000
Thomas Alexander Ladsten (4)	CLO	38 027	31 512	3 315	153	73 007	17 249	75 000
Total		580 689	184 863	52 893	35 364	853 810	3 091 820	885 000

*All remuneration to management is paid in NOK and converted to EUR using a yearly average EUR/NOK-rate of 10.164

(1) Employment from 1 April 2021

(2) Employment from 1 February 2021 (3) Employment from 1 October 2021

(4) Employment from 1 October 2021

Fees in 2022*

		Fee	Total number of
Name	Comments	(EUR)	shares
Nils Johan Holte	Chairman of the Board from 2018. Chair of the Remuneration Committee	21 774	105 282
Eirik Ålgård	Vice Chair from May 2021 until May 2022. Member of the Audit and Chair of the M&A Committee	18 804	887 32 9
Roald Helgø	Board member from 2019. Deputy board member from May 2021	4 949	2 278 63 6
Jan Henrik Jelsa	Board member from 2019. Member of the M&A Committee	11 877	2 278 63 6
Liv Annike Kverneland	Board member from September 2020 and Chair of the Audit Committee until October 2022	11 877	24 176
Andreas Christoffer Pay	Board member from May 2021. Member of the Audit Committee	11 877	2 281 221
Natasha Friis Saxberg	Board member from August 2021.	7 423	-
Erik Berge	Board member from September 2020 until May 2021	19 064	-
Kristin Sundsbø Alne	Deputy board member from September 2020 until August 2020.	13 690	-
Astrid Skarheim Onsum	Vice Chair from May 2022	-	33 333
Total		121 333	7 888 61 3

* Fee to board members are paid in NOK and converted to EUR using a yearly average EUR/NOK-rate of 10.104

Fees in 2021*

		Fee	Total number of
Name	Comments	(EUR)	shares
Nils Johan Holte	Chairman of the Board from 2018. Chair of the Remuneration Committee	28 543	85 282
Eirik Ålgård	Vice Chair from May 2021. Member of the Audit and Chair of the M&A Committee	25 660	687 28 6
Roald Helgø	Board member from 2019. Deputy board member from May 2021	17 626	1 991 89 3
Jan Henrik Jelsa	Board member from 2019. Member of the M&A Committee	21 643	1 991 89 3
Liv Annike Kverneland	Board member from September 2020. Chair of the Audit Committee	16 110	24 176
Andreas Christoffer Pay	Board member from May 2020. Member of the Audit Committee	6 887	1 634 25 8
Natasha Friis Saxberg	Board member from August 2021.	4 099	-
Erik Berge	Board member from September 2020 until May 2021	10 453	-
Kristin Sundsbø Alne	Deputy board member from September 2020 until August 2020.	8 239	-
Karen Elisabeth Ohm Heskja	Chairperson of the Nomination Committee from February 2021	4 919	-
Arne Roland	Member of the Nomination Committee from February 2021	1 968	-
Total		120 568	6 414 78 8

7.2 Related party transactions

Related parties are major shareholders, members of the Board and management in the company and the subsidiaries. Note 6.1 provides information about the subsidiaries. Significant agreements and remuneration paid to management and the Board for the current and prior period is presented in note 7.1. Shares, share options held by management and the Board are also summarised in note 7.1.

All transactions with related parties are made based on the principle of arm's length terms.

The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial period:

Related party transactions in 2022 and balances at

31 December 2022	EUR
Current trade and other receivable on related parties	2 797 136
Current trade and other payables to related parties	1 021 065
Income from related parties	136 569
Purchases from related parties*	2 730 580

Related party transactions in 2021 and balances at 31 December 2021 2021

Current trade and other payables to related parties	826 150
Purchases from related parties	344 886
Other current debt	7 573

7.3 Events after the reporting period

ACCOUNTING POLICIES

If the company receives information after the reporting period, but prior to the date of authorisation for issue, about conditions that existed at the end of the reporting period, the company will assess if the information affects the amounts that it recognises in the financial statements. The company will adjust the amounts recognised in its financial statements to reflect any adjusting events after the reporting period and update the disclosures that relate to those conditions in the light of the new information. For non-adjusting events after the reporting period, the company will not change the amounts recognised in its consolidated financial statements but will disclose the nature of the non-adjusting event and an estimate of its financial effect, or a statement that such an estimate cannot be made, if applicable.

14th of February:

Nordic Unmanned completed a subsequent offering with subscription of 1 614 238 new shares raising NOK 9.7 million in gross proceeds.

22nd of February:

13th of March:

Industry veteran Arne Roland appointed as interim CEO as Knut Roar Wiig steps down from his leadership role.

27th of March:

Nordic Unmanned appoints Pareto Securities AS as advisor to evaluate strategic options, including partnership, in order to support the next growth phase of the Company.

14th April:

CFO Trond Østerhus steps down from his role and Knut Stålen has been appointed interim CFO with immediate effect.

There have been no other significant non-adjusting events subsequent to the reporting date.

7.4 Going Concern

I In accordance with §3-3a of the Norwegian Accounting Act, the Board of Directors confirms that the financial statements have been prepared under the assumption of going concern.

As a consequence of all factors mentioned above, management and the Board of Directors have initiated processes to help solve this situation:

Nordic Unmanned raised new equity of MNOK 155 in 2022, with a subsequent offering of MNOK 9,7 in 2023.

In March 2023, Nordic Unmanned signed an agreement for a new finance arrangement with Sparebank1 SR-Bank AS of up to EUR 16 million. The refinancing included 2.7 in increased loans, and a restructured repayment schedule for the purpose financing Nordic Unmanned short-term working capital needs. The new financing facility is provided under the condition that the Company will raise EUR 13 million through either disposal of assets and/or equity issue within year end 2023.

Nordic Unmanned has in March 2023 appointed Pareto Securities as advisor to evaluate strategic options, including partnership, to support the next growth phase of the Company. Nordic Unmanned's Nordun drone flight services, as well as its technology businesses, AirRobot GmbH (military-grade lightweight drone systems) and DroneMatrix NV (drone-in-abox solutions), are currently European leaders in their categories and set to experience significant growth in the years ahead. Disposal of assets may include both sale of parts of the modern drone fleet with a book value of EUR 22 million. The Board has acted and believe therefore that these activities will have a significant effect on the cash debt ratios, and strengthen the balance sheet.

8.1 First time adoption of IFRSs

These financial statements, for the period ended 31 December 2022 are the first the company has prepared in accordance with IFRS-light (NGAAP using the special IFRS-light legislation allowing for recognition and measurement generally in accordance with IFRSs and disclosure requirements generally in accordance with NGAAP).

The company has prepared financial statements that comply with IFRS-light together with comparative amounts for the period ended 31 December 2021. In preparing the financial statements, the company's opening statement of financial position was prepared as of 1 January 2021, the company's date of transition to IFRS-light.

This note explains the principal adjustments made by the company when transitioning to IFRS-light from its previous reporting framework; Generally Accepted Accounting Principles in Norway ("NGAAP") for small entities.

Exemptions applied

IFRS 1 allows first-time adopters certain exemptions from the retrospective application of certain requirements under IFRS.

The company has applied the exemptions from full retrospective application of IFRS 16 Leases and recognised right-of-use assets at an amount equal to the lease liabilities calculated using the Group's incremental borrowing rates at the date of transition to IFRSs.

Estimates

Reconciliation of transitional effects

As at 1 January 2021
ASSETS	Note	NGAAP (NOK)	NGAAP (EUR)	Effect of transition to IFRS	Reclassification from NGAAP to IFRS	IFRS (EUR)
Non-current assets
Goodwill		-	-	-	-	-
Other intangible assets		10 727 772	1 024 591	-	-	1 024 591
Deferred tax assets	E	9 795 343	935 536	108 933	-	1 044 469
Total intangible assets		20 523 115	1 960 127	108 933	-	2 069 059

Aircraft and spareparts		41 194 968	3 934 459	-	-	3 934 459
Fixtures and fittings		9 611 928	918 018	-	-	918 018
Right-of-use assets	A	-	-	189 588	-	189 588
Total tangible assets		50 806 896	4 852 478	189 588	-	5 042 066
Investment in subsidiaries		12 428 978	1 187 070	-		1 187 070
Investment in associated companies		30 000	2 865	-	-	2 865
Prepayments and financial receivables		-	-	-	-	-
Total financial non-current assets		12 458 978	1 189 935	-	-	1 189 935
Total non-current assets		83 788 990	8 002 540	298 521	-	8 301 061
Current assets
Inventory		3 185 840	304 274	-	-	304 274
Trade receivables	C	8 170 305	780 332	-	-396 297	384 035
Other short-term receivables	C	13 259 901	1 266 430	-438 188	396 297	1 224 538
Cash and cash equivalents		53 225 002	5 083 427	-	-	5 083 427
Total current assets		77 841 047	7 434 462	-438 188	-	6 996 274

TOTAL ASSETS		161 630 037	15 437 001	-139 667	-	15 297 335

EQUITY AND LIABILITIES

Equity

-203 11 423 121 -2 626 118 -353 472 10 364 958






2 007 339
58 461
-

2 065 800

1 402 634
418 263
136 253
282 296
627 132
2 866 577

4 932 377
15 297 335

B: The IFRS adjustments reflect reclassifications from non-current to current of borrowings for wich the company did not have an unconditional right to defer payment for at least twelve months from the balance sheet date.

C: The IFRS adjustments reflect reclassifications from trade receivables to other short-term receivables as they represent contract assets (earned, not invoiced, revenues)

rather than invoiced revenues. D: The adjustment reflects a transfer from other equity to retained earnings.

E: The IFRS adjustments for deferred income taxes reflect the tax effect on the IFRS adjustments made.

Reconciliation of equity and financial position as at 31 December 2021:

As at 31 December 2021
ASSETS	Note	NGAAP (NOK)	NGAAP (EUR)	Effect of transition to IFRS	Reclassification from NGAAP to IFRS	IFRS (EUR)
Non-current assets
Other intangible assets		26 416 150	2 644 577	-	-	2 644 577
Deferred tax assets	H	26 430 798	2 646 043	757 014	-	3 403 057
Total intangible assets		52 846 948	5 290 620	757 014	-	6 047 634
Aircraft and spareparts		89 688 867	8 978 943	-	-	8 978 943
Assets under construction		58 082 653	5 814 778			5 814 778
Fixtures and fittings		10 663 932	1 067 589	-	-	1 067 589
Right-of-use assets	A	-	-	1 051 540	-	1 051 540
Total tangible assets		158 435 453	15 861 310	1 051 540	-	16 912 850
Investment in subsidiaries		94 757 436	9 486 368	-428 259	-	9 058 109
Investment in associated companies		30 000	3 003	-	-	3 003
Prepayments and financial receivables		6 400	641	-	-641	-
Total financial non-current assets		94 793 836	9 490 012	-428 259	-641	9 061 113
Total non-current assets		306 076 237	30 641 943	1 380 295	-641	32 021 597
Current assets
Inventory	J	15 617 390	1 563 490	859 104	-	2 422 594
Trade receivables	F	1 602 037	160 383	-2 002	-	158 381
Short-term receivables from group companies		8 252 252	826 150			826 150
Other short-term receivables	B, G, J	55 922 745	5 598 545	-3 643 887	641	1 955 299
Cash and cash equivalents		50 037 345	5 009 345	-10	-	5 009 335
Total current assets		131 431 770	13 157 914	-2 786 796	641	10 371 759
TOTAL ASSETS		437 508 007	43 799 857	-1 406 501	-	42 393 356

EQUITY AND LIABILITIES

Equity

TOTAL EQUITY AND LIABILITIES		434 342 286	43 799 857	-1 406 501	-	42 393 356
Total liabilities		133 931 166	13 725 061	2 130 222	-	15 855 282
Total current liabilities		39 339 047	3 938 316	4 014 979	-	7 953 294
Other current liabilities		21 001 251	2 102 480	870 217	-	2 972 697
Public duties payable	E	5 131 555	513 731	172 162	-	685 893
Current liabilities to group companies		3 445 000	344 886	-	-	344 886
Current lease liabilities	A	-	-	305 802	-	305 802
Interest bearing loans and borrowings	C	-	-	2 666 797	-	2 666 797
Trade payables		9 761 241	977 219	-	-	977 219
Current liabilities
Total non-current liabilities		94 592 119	9 786 745	-1 884 757	-	7 901 988
Deferred tax liabilities		-	-	-	-	-
Other non-current liabilities		334 279	350 392	-	-	350 392
Non-current lease liabilities	A	-	-	782 041	-	782 041
Interest bearing loans and borrowings	C	94 257 841	9 436 353	-2 666 797	-	6 769 555
Non-current liabilities
Total equity		300 411 119	30 074 796	-3 536 723	-	26 538 073
Retained earnings	B, G, J	-56 182 354	-5 624 535	-3 536 723	-	-9 161 257
Other equity		-	-	-	-	-
Share premium		330 306 616	33 067 697	-	-	33 067 697
Treasury stock		-2 127	-213	-	-	-213
Share capital		26 288 984	2 631 846	-	-	2 631 846

A: The IFRS adjustments reflect the recognised right-of-use assets, less depreciation for the year, as well as the related lease liabilities for office space leases. Under NGAAP lease payments were accounted for as operating expenses and hence no assets or liabilities relating to such leases have previously been recognised.

B: The IFRS adjustment in other short term receivables with related offsetting entries in retained earnings reflects expenditures on training of personnel and tender costs capitalised under NGAAP, but which are not eligible for capitalisation under IFRSs (IAS 38 Intangible assets and IFRS 15 Revenue from contracts with customers).

C: The IFRS adjustments reflect reclassifications from non-current to current of borrowings for wich the company did not have an unconditional right to defer payment for at least twelve months from the balance sheet date.

D: The IFRS adjustments reflect the offsetting impact on equity of the accounting for the costs of share based payment awards as salaries (see note 4.8 in the Condolidated Financial Statements) under the provisions of IFRS 2 Share based payment.

E: The IFRS adjustments reflect provisions for social security amounts payable relating to share-based payment awards. Under the company's pervious accounting policy, provisions for social security related to share based payments were made in the period in which the amounts became payable (i.e. when the share based payment awards were fully vested and exercised).

F: The IFRS adjustments reflect reclassifications from trade receivables to other short-term receivables as they represent contract assets (earned, not invoiced, revenues) rather than invoiced revenues.

G: Included in the EUR 3 643 887 amount is an IFRS adjustment for an amount of EUR 1 169 607 reflecting the exclusion of a contract for which revenues were recognised over time under NGAAP, while under IFRS 15 it was determined that the contract represents production of goods for inventory and qualifying for revenue recognition at the point in time of delivery of the products.

H: The IFRS adjustments for deferred income taxes reflect the tax effect on the IFRS adjustments made.

I: The adjustment reflects a transfer from other equity to retained earnings.

J: The IFRS adjustment reflects contracts which under NGAAP were accounted for as construction contracts with revenue recognition over time, but which, under IFRS 15, have been determined to constitute manufacturing for inventory as the components are deemed to have alternative use. Hence,under IFRS 15, revenue will be recognised on a point in time basis at the time of control transfer to the customers. EUR 807 798 relates to the contract mentioned in G above.

Reconciliation of total comprehensive income for 2021:

	Note	NGAAP (NOK)	NGAAP (EUR)	Effect of transition to IFRS	Reclassification from NGAAP to IFRS	IFRS (EUR)
Revenues	C	95 565 297	9 401 601	-1 245 154	-	8 156 448
Other operating income		987 442	97 143	-	-	97 143
Total operating income		96 552 739	9 498 745	-1 245 154	-	8 253 591

Cost of goods sold	C, D	26 084 950	2 566 207	-1 020 406	-218 161	1 327 639
Personell expenses	B, C, D	47 402 380	4 663 390	1 303 239	158 932	6 125 561
Depreciation and amortisation expenses	A	13 993 550	1 376 669	219 843	-	1 596 512
Other operating expenses	C, D, F	46 787 102	4 602 860	1 654 945	59 229	6 317 033
Total operating expenses		134 267 983	13 209 126	2 157 620	-	15 366 746
Operating profit (loss)		-37 715 243	-3 710 381	-3 402 774		-7 113 155

Interest income Other financial income		129 392 4 721 994	12 729 464 544	- -	- -	12 729 464 544

Interest expenses	A	-1 949 107	-191 751	-27 662	-	-219 413
Other financial expenses		-1 816 227	-178 678	96 026	-	-82 653
Net financial income and expenses		1 086 053	106 845	68 364	-	175 209
Income (loss) before tax		-36 629 190	-3 603 537	-3 334 410	-	-6 937 946
Income tax	E	-7 600 844	-747 762	-631 701	-	-1 379 463
Net income (loss)		-29 028 346	-2 855 774	-2 702 709	-	-5 558 484
Allocation of profit or loss:
Profit/loss attributable to the parent		-29 028 346	-2 855 774	-2 702 709	-	-5 558 484
Other comprehensive income:
Items that subsequently may be reclassified to profit or loss:
Exchange differences on translation of foreign operations		-	-	532 203	-	532 203
Total items that may be reclassified to profit or loss		-	-	532 203	-	532 203
Total other comprehensive income for the period		-	-	532 203	-	532 203
Total comprehensive income for the period		-29 028 346	-2 855 774	-2 170 506	-	-5 026 280

B: Of the total IFRS adjustments of EUR 1.3 million, EUR 0.7 million reflect expenditures on training of personnel and tender costs capitalised under NGAAP, but which are not eligible for capitalisation under IFRSs (IAS 38 Intangible assets and IFRS 15 Revenue from contracts with customers). EUR 0.1 million relates to a customer contract discussed in D below. EUR 0.4 million relates to share based payment awards and related social security charges of EUR 0.1 recognised as salaries (see note 4.8) under the provisions of IFRS 2 Share based payment. Under the company's previous accounting policy provisions for social security related to share based payments were made in the period in which the amounts became payable (i.e. when the share based payment awards were fully vested and exercised).

C: The IFRS adjustment reflect purchased services relating to service revenues rather than sale of goods and have consequently been reclassified from cost of goods sold to other operating expenses.

Standards issued but not yet effective

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company's financial statements are not expected to have a significant impact on the financial statements of the Company.

KPMG AS Forusparken 2 P.O. Box 57 N-4064 Stavanger Telephone +47 45 40 40 63 Internet www.kpmg.no Enterprise 935 174 627 MVA

To the General Meeting of Nordic Unmanned ASA

Independent Auditor's Report

Opinion

We have audited the financial statements of Nordic Unmanned ASA, which comprise:

the financial statements of the parent company Nordic Unmanned ASA (the Company), which comprise the statement of financial position as at 31 December 2022, the statement of profit or loss and other comprehensive income, and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and
the consolidated financial statements of Nordic Unmanned ASA and its subsidiaries (the Group), which comprise statement of financial position as at 31 December 2022, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion

the financial statements comply with applicable statutory requirements,
the financial statements give a true and fair view of the financial position of the Company as at 31 December 2022, and 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 consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2022, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

Oslo	Elverum	Mo i Rana
Alta	Finnsnes	Molde
Arendal	Hamar	Sandefjord
Bergen	Haugesund	Stavanger
Bodø	Knarvik	Stord
Irammen	Kristiansand	Straume

We draw attention to Note 7.4 in the financial statements, which states that the Company and the Group has negative results and cash flow putting pressure on their liquidity and that the company and the Group needs to raise 13 MEUR either through disposal of assets and/or equity issue within the year of 2023. As stated in Note 7.4, these events indicate that a material uncertainty exists that may cast significant doubt on the Company and Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

The Board of Directors and the Managing Director (management) are responsible for the information in the Board of Directors' report. The other information comprises information in the annual report, but does not include the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the information in the Board of Directors' report.

In connection with our audit of the financial statements, our responsibility is to read the Board of Directors' report. The purpose is to consider if there is material inconsistency between the Board of Directors' report and the financial statements or our knowledge obtained in the audit, or whether the Board of Directors' report otherwise appears to be materially misstated. We are required to report if there is a material misstatement in the Board of Directors' report. We have nothing to report in this regard.

Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors' report

is consistent with the financial statements and
contains the information required by applicable statutory requirements.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with simplified application of international accounting standards according to the Norwegian Accounting Act section 3-9, and for the preparation and true and fair view of the consolidated financial statements of the Group in accordance with International Financial Reporting Standards as adopted by the EU, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's and the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error. We design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's and the Group's internal control.
evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's and the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company and the Group to cease to continue as a going concern.
evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves a true and fair view.
obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Stavanger, 9 May 2023 KPMG AS

Mads Hermansen State Authorised Public Accountant (This document is signed electronically)

The signatures in this document are legally binding. The document is signed using Penneo™ secure digital signature. The identity of the signers has been recorded, and are listed below.

"By my signature I confirm all dates and content in this document."

Mads Aleksander Hermansen Partner

On behalf of: KPMG AS Serial number: 9578-5997-4-280077IP: 80.232.xxx.xxx 2023-05-09 07:31:09 UTC

Mads Aleksander Hermansen Statsautorisert revisor

On behalf of: KPMG AS Serial number: 9578-5997-4-280077 IP: 80.232.xxx.xxx 2023-05-09 07:31:09 UTC

This document is digitally signed using Penneo.com. The digital signature data within the document is secured and validated by the computed hash value of the original document. The document is locked and timestamped with a certificate from a trusted third party. All cryptographic evidence is embedded within this PDF, for future validation if necessary.

How to verify the originality of this document

This document is protected by an Adobe CDS certificate. When you open the

do c ument in Adobe Reader, you s h o uld s e e , that the document is certified by Penneo e-signature s ervice

. Thi s guarantees tha t the contents of the document have not been changed.

You can verify the cryptographic evid e nce within this doc ument using the P e n neo validator, which c a n be found at htt ps://penneo.com/valida t o r

AI Terminal

Nordic Unmanned ASA

3682_10-k_2023-05-09_4fa3adff-d233-4ddf-928b-f9c43e884395.pdf

ANNUAL REPORT 2022

Building leading, sustainable businesses in the drone market

Key highlights 2022

Board of Directors' Report

-

Group overview

Business strategy

Financial review

Background

BOARD OF DIRECTORS' REPORT

Financial results

Financial review

BOARD OF DIRECTORS' REPORT

22nd of February:

13th of March:

27th of March:

14th of April:

Events after reporting period

Liability insurance

Financial risk and capital management

Safety and compliance

Diversity & inclusion

Employees

Research and development (R&D)

ESG

Outlook

Going concern

Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of financial position

Consolidated statement of cash flows

Consolidated statement of changes in equity

Nordun

BUSINESS UNITS

NUTech

BUSINESS UNITS

1.1 General information

Corporate information

1.2 Basis of preparation

Presentation currency and functional currency

1.3 Significant accounting policies

Current versus non-current classification

1.4 Significant accounting judgements, estimates and assumptions

Estimates and assumptions:

1.5 Fair value measurement

ACCOUNTING POLICIES

Fair value disclosures

2.1 Segment

Segments

Nordun – Drone-As-A-Service Airline:

NUTech – Development and Production of own IP drone systems:

NUGlobal – Sales and Distribution:

NUMar- Data-As-A-Service:

ACCOUNTING POLICIES

Revenue

2.3 Employee benefit expenses

ACCOUNTING POLICIES

Pensions

Employee share program

2.4 Operating expenses

ACCOUNTING POLICIES

Audit fee:

2.5 Inventory

ACCOUNTING POLICIES

ACCOUNTING POLICIES

Trade receivables

Contract assets

Guarantees

Expected credit loss

2.7 Provisions

ACCOUNTING POLICIES

Other commitments and contingencies

Other commitments

2.8 Payables

ACCOUNTING POLICIES

3.1 Property, plant and equipment

ACCOUNTING POLICIES