ANNUAL  
REPORT  
2020  
201720182019  
 
Asetek A/S  
Assensvej 2  
DK-9220 Aalborg East  
Denmark  
Phone: +45 9645 0047  
Fax:  
+45 9645 0048  
www.asetek.com  
info@asetek.com  
Web:  
Mail:  
CVR-number: 3488 0522  
ISIN-number: DK0060477263  
LEI:  
213800ATZVDWWKJ8NI47  
André Sloth Eriksen  
CEO  
Peter Dam Madsen  
CFO  
LIQUID COOLING DONE RIGHT  
2
ASETEK A/S - ANNUAL REPORT 2020  
BOARD OF DIRECTORS  
Jukka Pertola, Chairman  
Chris J. Christopher, Vice Chairman  
Erik Damsgaard  
COMPENSATION COMMITTEE  
Jukka Pertola  
Chris J. Christopher  
Jørgen Smidt  
Jørgen Smidt  
Maria Hjorth  
EXECUTIVE MANAGEMENT  
André Sloth Eriksen, CEO  
Peter Dam Madsen, CFO  
NOMINATION COMMITTEE  
Ib Sønderby  
Claus Berner Møller  
Jukka Pertola  
AUDITOR  
PwC, State Authorized Public Accountants  
Nobelparken, Jens Chr. Skous Vej 1  
DK-8000 Aarhus C  
AUDIT COMMITTEE  
Maria Hjorth  
Phone: +45 8932 0000  
CVR-no 33 77 12 31  
Chris J. Christopher  
Erik Damsgaard  
EXECUTIVE MANAGEMENT  
 
ASETEK A/S - ANNUAL REPORT 2020  
3
MANAGEMENT REPORT  
FINANCIAL STATEMENTS  
CONTENTS  
Message from the CEO.................................................................................... 4  
CONSOLIDATED FINANCIAL STATEMENTS................................... 30  
PARENT COMPANY FINANCIAL STATEMENTS ............................ 58  
OVERVIEW  
The Year 2020 Outlined................................................................................... 8  
Asetek at a glance ............................................................................................... 9  
Five-year summary........................................................................................... 10  
MANAGEMENT STATEMENT................................................................... 65  
INDEPENDENT AUDITOR’S REPORTS ................................................66  
OTHER INFORMATION  
PERFORMANCE AND OUTLOOK  
Stock exchange releases................................................................................69  
Definitions of ratios and metrics.................................................................70  
Performance in 2020 .......................................................................................14  
Expectations for 2021.......................................................................................15  
GOVERNANCE  
Corporate governance.....................................................................................19  
Risk management .............................................................................................22  
Corporate social responsibility....................................................................23  
Shareholder information................................................................................24  
ARTICLES  
Gaming, Sustainability and Corona Accelerate a  
Positive Market Trend for Asetek ................................................................12  
Corona or Not: 25% Growth in G&E Segment .....................................16  
Asetek Liquid Cooling will Make Substantial  
Contribution to EU’s Green Deal ...............................................................26  
Reliability and Quality as Good as in the Space Industry ................39  
LIQUID COOLING DONE RIGHT  
 
LIQUID COOLING DONE RIGHT  
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DEAR READER,  
Despite losing our biggest customer, our sales increased  
by more than 30% and our profits and cash-flows  
followed along. The machine is well lubricated and again  
showed its ability to scale up as needed.  
the climate thinktank Concito listed our technology  
as ‘best practice’. Good progress, indeed, and we see  
good traction now. There is still a strong need for fur-  
ther political actions in support of our climate agenda  
to reach the full potential, however.  
market reminds me of the liquid cooling market 20  
years ago.  
Just about a year ago, as we entered into 2020, we were  
looking into a year with many challenges and also some  
well defined opportunities. Little did we know that a co-  
rona virus would sweep across the globe wreaking havoc  
in so many ways. Now, as the vaccines are developed  
and being distributed, we can hopefully see the end of it.  
Certainly, this has been a nuisance, but I have to say that  
I am extremely impressed with my team’s ability to adapt  
and carry on.  
We have now formed a strong, dedicated team within  
Asetek with the aim at offering products within a short  
time frame. We already carried out two M&A deals, as  
announced. We cannot say much more at this point,  
but stay tuned.  
I have also always said, that when I feel our current  
businesses have “grown up” the timing for an expanded  
strategic focus is right, and I do feel both businesses  
are grown up or very close.  
NEW BUSINESS  
Let’s look ahead. Upwards and onwards. I have always  
said that I would like for our business to have a third leg  
to stand on. I have the desire to have more robustness  
than two segments, based on one technology, can  
deliver. And even more importantly, I want to maintain a  
high growth rate for the next many years to come! Over  
the last 15 years we have grown more than 15% per year  
on average.  
With all the added activity, we need more space. We  
have acquired a building plot in Aalborg and have  
started drawing up the plans for our new home for our  
Denmark-based team. It will be a landmark, and I look  
forward to showing you around.  
We have been thinking hard and long about what to  
add to the mix. At the core, we are good at mechanics,  
electronics, and software. There is a word for that;  
Mechatronics. Since our inception, we have utilized  
the 3 branches of expertise in the liquid cooling  
products, but we can now venture outside of the that  
sphere.  
As a global organization, for many years we have been  
used to working across time zones etc. and it must have  
been that practice that kicked in. I don’t think we missed  
a single beat in Operations. And more importantly, we  
managed to keep up our development momentum  
throughout the crisis. We are still debating internally how  
much impact the corona virus has had on our business.  
We don’t know, is the truth. In 5 years, we can look back  
and give you a better answer. Enough about the virus for  
now!  
We are working on many other initiatives as you can im-  
agine. You can read about a few of them in this report,  
or in our new Sustainability report. And I invite you to  
sift through our web sites.  
The consumer electronics Gaming & Enthusiast  
segment is by nature quite volatile. It depends on the  
launch of exciting technologies and games and for our  
enthusiast customer base to continue wanting to tinker  
with electronics. We certainly believe it will continue.  
As mentioned above history shows us a solid growth  
rate.  
If you know me, you may know that I have a back-  
ground in racing. From racing moto cross as a kid over  
go-karts to formula cars – racing is in my DNA. When  
we were looking at different business opportunities,  
mixed with input from our e-Sports Academy (where  
we have six racing simulators) it became clear that the  
highly fragmented, and extremely rapidly growing sim-  
ulator racing -market would be a very strong candidate,  
and after countless evaluations of opportunities, Sim-  
Sports is where we settled. In many ways, the SimSports  
2021 certainly looks interesting for Asetek, and we  
welcome you to join us on the journey.  
Thank you for your interest in Asetek,  
We look back at a year that yielded remarkable results –  
the best ever. 2020 kept us busy on so many fronts. Our  
Gaming & Enthusiast group released more new products  
than ever before, and our Data Center group has been  
busy servicing both existing and new customers.  
André S. Eriksen,  
The Data Center business where we have been in the  
market for soon to be 10 years. During 2020, the Eu-  
ropean Commission acknowledged important Asetek  
viewpoints in their Green Deal climate initiative, and  
CEO and Founder of Asetek  
4
MESSAGE FROM THE CEO  
 
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LIQUID COOLING DONE RIGHT  
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6
LIQUID COOLING DONE RIGHT  
 
The Year 2020 Outlined.....................................................................................8  
Asetek at a glance .................................................................................................9  
Five-year summary.............................................................................................10  
Performance in 2020 ........................................................................................ 14  
Expectations for 2021........................................................................................ 15  
Corporate governance...................................................................................... 19  
Risk management .............................................................................................. 22  
Corporate social responsibility..................................................................... 23  
Shareholder information................................................................................. 24  
MANAGEMENT REPORT  
7
LIQUID COOLING DONE RIGHT  
 
8
MANAGEMENT REPORT - OVERVIEW  
// Operational achievements during the year:  
/ The Company announced collaboration with Hewlett  
Packard Enterprise (HPE) to deliver its premium data  
center liquid cooling solutions in HPE Apollo Systems  
targeting high performance computing and artificial  
intelligence applications. Commercial shipments began  
in the third quarter of 2020.  
// Asetek increased investments in Gaming and En-  
thusiast product development and marketing with  
several brand-behind-the-brand initiatives to feature  
the Asetek logo on box packaging, websites, forums,  
and packaging inserts. Initiatives also include written  
features about Asetek on partners’ websites, partici-  
pation in live events and live streams to communicate  
the commitment to performance, quality and reliability  
that the “Cooled by Asetek” mark represents.  
THE YEAR 2020 OUTLINED  
/ Asetek continued its success as the leading supplier  
of liquid cooling solutions for high-end computing,  
shipping 1.2 million sealed loop liquid cooling units in  
2020, compared with 895 thousand shipped in 2019.  
// Record revenue of $72.8 million, 34% growth from  
2019  
// Gross margins grew to 47% from 42% in 2019  
// Adjusted EBITDA grew to $15.6 million from  
/ The Company acquired JMH Gallows Pound Tech-  
nologies Ltd., a UK-based developer of hardware and  
software technology and owners of the Ultimate-  
GameTech brand, for a sum of GBP 1 million  
(approximately $1.4 million). As a result of this acquisi-  
tion, the Company is expecting to strengthen its  
intellectual property and product offerings in the  
Gaming and Enthusiast market.  
/ Asetek’s Direct-to-Chip (D2C) liquid cooling is being  
utilized by Supermicro in a new high-performance com-  
puting cluster at the U.S. Lawrence Livermore National  
Labs. Asetek liquid cooling enables the deployment of  
high wattage processors in high density configurations  
to support compute-intensive workloads critical for  
science and technology research.  
$6.2 million in 2019  
// Revenue in 2020 totaled $72.8 million, an increase of  
34% from 2019 ($54.3 million), mainly reflecting in-  
creased shipments of Gaming and Enthusiast products.  
// In efforts to establish EU standards that will reduce  
permitted energy consumption used for data center  
cooling, Asetek executives continue to work with  
political leaders to create a wider understanding of the  
significant environmental benefits enabled by liquid  
cooling.  
// Gross margin expanded to 47% in 2020 from 42.3%  
in 2019. The growth primarily reflects a richer product  
mix, higher sales prices for Data center products and  
Asetek’s business model transition for Gaming and  
Enthusiast OEMs that customize their liquid coolers.  
/ Asetek began delivering waste heat from its in-house  
data center to Aalborg Forsyning, the city’s municipal  
district heating network. Asetek’s RackCDU™ liquid  
cooling systems capture and deliver heat to the network  
to help warm homes and businesses in the city of  
Aalborg. This connection demonstrates the viability  
of Asetek’s technology in enabling power savings and  
reducing CO2 emissions.  
/ The Company announced new products in the  
Gaming and Enthusiast market:  
NZXT’s Kraken Z-3 and X-3 series, powered by Asetek,  
include a new performance-engineered pump and  
cold plate, advanced temperature sensing and quieter  
operation.  
// During the year, Asetek earned operating income  
of $10.9 million ($1.0 million) and Adjusted EBITDA  
of $15.6 million ($6.2 million).  
// Asetek repurchased 844 thousand common shares  
The new Rad Card™ GPU Cooler, the industry’s first  
slot-in PCIe radiator card to provide liquid cooling for  
GPU’s in space constrained PC cases.  
during 2020 for a total cost of $6.4 million.  
Fractal Design’s Celsius+ CPU coolers, powered by  
Asetek, provide enthusiasts enhanced performance,  
virtually silent operation and elegant design.  
LIQUID COOLING DONE RIGHT  
 
MANAGEMENT REPORT - OVERVIEW  
9
The sales and marketing team, based principally in USA,  
oversees the customer relationships to facilitate communi-  
cation and development, ensuring the developed product  
meets or exceeds customer demands.  
ASETEK AT A GLANCE  
Asetek is a global leader in liquid cooling solutions for
computer hardware enthusiasts, gamers, servers and data
centers. Asetek’s products enable increased performance
and provide lower acoustic noise, power savings and
im- proved efficiency when compared with air cooling.
Sales and marketing teams based in Europe and Asia lead  
or assist efforts with the customers based outside of USA.  
The Company’s server products offer direct-to-chip liquid  
cooling solutions to OEM providers for delivery of cost  
effective, high performance data center solutions. Asetek’s  
Gaming and Enthusiast products are all-in-one coolers  
that provide reliable, maintenance-free liquid cooling to  
gaming and high-performance PC customers.  
The flow of physical product generally commences in Asia.  
Asetek’s manufacturing and logistics team in Xiamen,  
China select components and suppliers for the finished  
product to be assembled by the Company’s principal con-  
tract manufacturer based in Xiamen. Finished products are  
delivered directly to customer hubs in China, with smaller  
quantities shipped to Europe and USA. Lower volume,  
highly complex products and components are manufac-  
tured in Asetek facilities in Aalborg.  
With over eight million liquid cooling units deployed,  
Asetek’s patented technology is being adopted by a  
growing portfolio of OEMs and channel partners. Founded  
in 2000, Asetek is headquartered in Demark and has oper-  
ations in California, Texas, China and Taiwan.  
Asetek’s business model begins with its research and  
development team based in Aalborg, Denmark, which  
manages collaboration with the Company’s global custom-  
er base to define requirements and develop cutting edge  
technology. The Aalborg team works with the R&D team  
in Xiamen, China to identify the optimal sources for the  
necessary components to fulfill customer requirements.  
LIQUID COOLING DONE RIGHT  
 
LIQUID COOLING DONE RIGHT  
FIVE-YEAR SUMMARY  
FISCAL YEAR  
2020  
2019  
2018  
2017  
2016  
FISCAL YEAR  
2020  
2019  
2018  
2017  
2016  
COMPREHENSIVE INCOME ($000'S)  
Revenue  
PROFIT & LOSS  
72,750  
34,194  
10,928  
54,334  
23,005  
1,048  
67,314  
26,172  
4,419  
58,194  
20,969  
2,757  
50,921  
19,750  
4,669  
Gross margin  
47.0%  
15.0%  
11.2%  
42.3%  
1.9%  
38.9%  
6.6%  
4.6%  
15.7%  
36.0%  
4.7%  
38.8%  
9.2%  
Gross profit  
Operating margin  
Operating income (loss)  
Operating income before amortization,  
depreciation and financial items (EBITDA), unaudited  
Adjusted EBITDA, unaudited  
Financial items, net  
Return on invested capital (ROIC)  
Organic growth  
-0.8%  
-19.3%  
5.6%  
14.3%  
12.3%  
41.5%  
33.9%  
14,681  
15,600  
(1,502)  
9,426  
5,105  
6,161  
8,109  
9,385  
451  
5,187  
6,784  
(1,258)  
1,499  
7,119  
7,447  
322  
BALANCE SHEET  
Quick ratio  
2.4  
2.5  
3.1  
3.3  
2.9  
3.1  
2.1  
2.3  
2.5  
2.5  
406  
Current ratio  
Income before tax  
1,454  
(628)  
(1,072)  
4,870  
3,672  
3,503  
4,991  
9,637  
9,182  
Days sales outstanding  
Inventory turns per year  
Days payable outstanding  
Debt to equity  
116.1  
18.4  
88.6  
13.9  
79.0  
15.9  
63.2  
4.2%  
79.7  
21.4  
99.5  
5.6%  
92.8  
21.2  
Income for the year  
9,195  
4,475  
5,728  
Comprehensive income  
BALANCE SHEET ($000'S)  
Total assets  
11,587  
133.6  
8.7%  
96.2  
11.0%  
109.7  
2.8%  
71,393  
47,525  
4,129  
54,105  
39,008  
4,292  
51,398  
38,958  
1,621  
49,176  
33,394  
1,867  
41,164  
28,290  
788  
STOCK MARKET  
Total equity  
Earnings per share, basic (USD)  
Earnings per share, diluted (USD)  
Shares issued (000's)  
Treasury shares (000's)  
Share price (NOK)  
0.36  
0.35  
(0.02)  
(0.02)  
25,789  
185  
0.14  
0.14  
0.18  
0.17  
0.39  
0.38  
Interest-bearing debt  
Working capital  
32,837  
81,786  
7,049  
3,217  
27,919  
81,949  
6,115  
25,315  
79,278  
4,103  
19,028  
79,524  
3,856  
2,754  
19,483  
78,445  
1,684  
26,433  
931  
25,785  
245  
25,568  
331  
25,421  
502  
Invested capital  
Investment in property, plant and equipment, net  
Investment in intangible assets, net  
CASH FLOW ($000'S)  
Operating activities  
108.80  
35.98  
31.00  
-
40.60  
33.30  
119,083  
105.00  
75.28  
53.50  
16.33  
1,920  
2,414  
1,871  
Share price to earnings  
Market capitalization ($000's)  
BUSINESS DRIVERS  
Sealed loop units shipped (000's)  
Average selling price per unit, Gaming and  
Enthusiast (USD)  
323,054  
90,205  
322,972  
154,661  
11,430  
(4,816)  
(5,088)  
2,594  
8,870  
(2,154)  
(648)  
3,843  
(3,659)  
455  
6,088  
(4,298)  
(2,091)  
788  
7,806  
(2,912)  
175  
Investing activities  
1.201  
895  
1.119  
1.020  
949  
Financing activities  
Total cash flow  
5,878  
229  
4,550  
53.9  
661  
110  
57.9  
560  
97  
56.3  
709  
95  
52.2  
626  
93  
48.2  
645  
79  
Revenue per employee ($000's)  
Number of employees  
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FINANCIALS  
RATIOS & METRICS  
10 MANAGEMENT REPORT - OVERVIEW  
 
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11  
LIQUID COOLING DONE RIGHT  
 
12  
Gaming and eSports used to  
be something for young  
enthusiasts, involving snacks  
and cola  
GAMING, SUSTAINABILITY AND  
CORONA ACCELERATE A POSITIVE  
MARKET TREND FOR ASETEK  
We meet up with Jimmy Fussing by Zoom from his home  
office that – like so many others – he has had to set up  
this winter as the world waits for the Corona vaccination  
programme to be completed and take effect.  
more strongly in that short period than in the whole of  
the preceding 7 years. A much bigger e-commerce sector  
requires more and more cloud solutions.  
today, and there’s no reason to think the trend won’t  
continue.  
“A few years ago, we saw the company’s share price rising  
steeply, but at that time it was perhaps mainly due to a  
fever of expectation. Today, we can sense – in the latest  
accounts, for example – that Asetek is meeting those  
expectations. Both of Asetek’s existing business areas  
– gaming and solutions for data centers – are moving in  
the right direction,” adds Jimmy Fussing. “At the same  
time, these are truly sustainable products that can make a  
significant difference to society.”  
“When we also consider another general social trend  
toward sustainability and energy saving, Asetek has just  
the right technology and product platform,” says Jimmy  
Fussing. He is also convinced that, for the first time in  
many years, we are going to see a period of real growth  
in demand for electricity, something he believes is highly  
favourable for Asetek’s other line of business, on-proces-  
sor liquid cooling for data centers, which – among other  
things – makes it possible to reuse up to 80% of inbound  
power.  
Vækstfonden invested in Asetek all the way back in 2004,  
when it was a talented little start-up, and has since sold  
half of its shares, doing so immediately after the company  
went public in 2013. But they are still involved, with a stake  
of around 6% of Asetek at the time of print.  
Jimmy Fussing is Managing Partner of the venture  
fund Heartcore Capital, formerly Sunstone Technology  
Ventures, which administers Vækstfonden’s investment  
in Asetek A/S. The Danish government investment fund  
is one of Asetek’s major institutional investors. Heartcore  
Capital also puts capital from institutional investors such  
as pension funds into start-ups. Today, Heartcore Capital  
is involved in 55 tech start-ups across Europe, and is the  
country’s biggest venture fund.  
MATURE COMPANY WITH GREAT POTENTIAL  
“Gaming and eSports used to be something for young  
enthusiasts, involving snacks and cola. Now, anyone can  
see that many, many more people – including those from  
the parents’ generation – are getting into it. They follow  
their favourite team, they play along and start to worship  
the best players on a par with famous sporting idols in  
the physical world. The new heroes are eSport stars, and  
a whole generation of young people looks up to them.  
They are role models, and becoming like them requires  
investment in more powerful computers. It demands  
just the right technical equipment, and that’s where  
Asetek comes into the picture,” explains Jimmy Fussing.  
He points out that about 2 billion people follow eSport  
“In our view, André Eriksen, the founder and CEO of  
Asetek, is a gifted, determined and visionary entrepreneur  
who, together with the rest of the team, has succeeded  
in growing and maturing Asetek into a major, established,  
internationally-focused company,” says Jimmy Fussing.  
“We believe the company has a potential that is about  
to be fulfilled in earnest, so that in theory it could evolve  
into a new Danfoss,” referring to the world-famous Danish  
energy technology manufacturer, where Asetek’s founder  
first learned the ropes as a newly trained engineer and  
toolmaker, before he founded Asetek on the idea that  
computers and processors should be water-cooled.  
These times, says Jimmy Fussing, are highly favourable  
to Asetek, on many significant parameters – even when  
it comes to Corona. “As unpleasant as the pandemic has  
been and still is all around in other ways, Corona has also  
helped to accelerate new consumer patterns that are  
making Asetek’s market position stronger and stronger –  
and that is hardly going to roll back when the pandemic  
is over,” says Jimmy Fussing. As an example, he mentions  
that the extent of the world’s online retail trade has more  
than doubled during the pandemic of the last 10-11  
months – a trend that has seen the penetration rate grow  
LIQUID COOLING DONE RIGHT  
 
ASETEK A/S - ANNUAL REPORT 2019 13  
LIQUID COOLING DONE RIGHT  
13  
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14 MANAGEMENT REPORT - PERFORMANCE AND OUTLOOK  
LIQUID COOLING DONE RIGHT  
The average exchange rate of USD to DKK during 2020  
was 3% lower than the average rate in 2019. Approxi-  
mately 77% of the Company’s operating expense in 2020  
was denominated in DKK (78% in 2019), resulting in an  
unfavorable impact to operating expense in 2020 when  
compared with 2019.  
BALANCE SHEET  
STATEMENT OF CASH FLOWS  
PERFORMANCE IN 2020  
Asetek’s total assets at December 31, 2020 were $71.4  
million, compared with $54.1 million at the end of 2019.  
The principal components of this change include: trade  
receivables increased by $10.0 million as a result of a 78%  
increase in fourth quarter 2020 revenue compared with  
the same period of prior year; cash and cash equivalents  
increased by $2.6 million due to net income growth  
partly offset by share repurchases; intangibles increased  
by $1.3 million from a business acquisition during the  
year. In November 2020, the Company acquired JMH  
Gallows Pound Technologies Ltd., a UK-based developer  
of hardware and software technology and owners of the  
UltimateGameTech brand, for a sum of GBP 1 million  
(approximately $1.4 million).  
Net cash provided by operating activities was $11.4 million  
in 2020 ($8.9 million provided in 2019). The increase  
from 2019 was principally due to increased net income in  
2020, partly offset by growth in receivables and inventory  
associated with higher operating volumes.  
PROFIT AND LOSS  
Total revenue for 2020 was $72.8 million, representing  
growth of 34% from 2019 ($54.3 million). Sealed loop  
cooling unit shipments for 2020 totalled 1.2 million, a  
34% increase over 2019 (895 thousand). Average Selling  
Prices (ASP) for the year 2020 decreased to $53.91  
from $57.88 in 2019. Gross margin increased to 47.0% in  
2020 from 42.3% in 2019. The above fluctuations reflect  
increased demand in the Gaming and Enthusiast market  
and Asetek’s business model transition. Shipments under  
the new model have lower ASPs as Asetek moves to de-  
livering only the principal core technology with improved  
margins, while the customer adds their unique features  
with ancillary components.  
Adjusted EBITDA was $15.6 million in 2020, compared  
with $6.2 million in 2019. Adjusted EBITDA in 2020 repre-  
sents operating income of $10.9 million, plus depreciation  
of $3.8 million, plus share-based compensation of $0.9  
million.  
Cash used by investing activities was $4.8 million, related  
to additions to intangible assets and purchase of property  
and equipment. The increase from prior year is principally  
due to the previously mentioned $1.4 million business  
acquisition and purchase of equipment for data center  
manufacturing ($1.8 million used in 2019).  
Foreign currency transactions in 2020 resulted in a $1.4  
million loss ($0.2 million gain in 2019).  
Cash used by financing activities was $5.1 million in 2020,  
including $6.4 million for the repurchase of Asetek’s com-  
mon shares and $0.8 million for payments on capitalized  
leases. The Company also paid down its line of credit  
by $0.3 million. These effects were partly offset by $2.4  
million received for shares issued on options exercised by  
employees ($0.6 million used in 2019).  
Income tax expense of $0.2 million in 2020 decreased  
from 2019 ($2.1 million) due to increased utilization of  
deferred tax assets during the year.  
Total liabilities increased by $8.8 million in 2020, resulting  
principally from growth in operating volumes and related  
incentive compensation for employees. Trade payables,  
accrued compensation and employee benefits, and ac-  
crued liabilities increased by $5.9 million and $1.7 million,  
and $1.4 million respectively.  
In 2020, total operating expense was $23.3 million, a 6.0%  
increase from 2019 ($22.0 million), reflecting investment  
in the Company’s infrastructure. During 2020, Asetek  
increased staffing by 35% to support revenue growth.  
Asetek's total comprehensive income was $11.6 million for  
2020, compared with total comprehensive loss of $1.1 mil-  
lion in 2019. Comprehensive income included a positive  
$2.4 million translation adjustment in 2020 (negative  
$0.4 million in 2019).  
Net increase in cash and cash equivalents was $2.6 million  
in 2020, compared with increase of $5.9 million in 2019.  
Legal cost incurred associated with defense of existing  
IP and securing new IP was $2.4 million in 2020 ($2.7  
million). Fiscal year 2019 operating expense included an  
offset of $0.8 million for settlements awarded to Asetek in  
patent infringement lawsuits.  
The increase in trade payables is also partly the result of  
the Company's proactive management of suppliers and  
timing of payments.  
Share-based compensation cost associated with warrants  
and options issued to employees was $0.9 million in 2020  
($1.1 million).  
 
MANAGEMENT REPORT - PERFORMANCE AND OUTLOOK  
15  
LIQUIDITY AND FINANCING  
DATA CENTER:  
CONSOLIDATED RESULTS:  
EXPECTATIONS FOR 2021  
As of December 31, 2020, the Company has working  
capital of $32.8 million and non-current liabilities of $2.6  
million. Since 2016, the Company has generated positive  
cash flows and operating income. From 2013 to 2016,  
Asetek financed operations principally through offerings  
of common shares on the Oslo Stock Exchange.  
During 2020 the Company expanded its OEM partners  
with the additions of HPE and Supermicro, which resulted  
in the addition of nearly 20 new liquid cooled offerings to  
its data center line of products. Including Fujitsu, Asetek’s  
long-standing OEM, the Company anticipates growth in  
shipments of RackCDU™ liquid cooling in 2021.  
The Company's consolidated results for 2020 exceeded  
Management's expectations communicated in the prior  
year report due to favorable effects of COVID-19 shelter-  
in-place restrictions, which resulted in strong demand  
for the Company's Gaming and Enthusiast products. For  
2021, the Company expects revenue to increase by 10%  
to 20% from 2020, with gross margins lower than 2020.  
As such, management expects the Company to report  
operating income of between $9 and $15 million in 2021.  
However, Management notes significant challenges in  
predicting future earnings due to variations in import tariffs  
and foreign exchange rates. The Company recognizes  
continued uncertainty related to potential impact from  
COVID-19 over time. These uncertainties can impact  
actual performance and expectations.  
GAMING AND ENTHUSIAST:  
In 2020, favorable effects of COVID-19 shelter-in-place  
restrictions which resulted in strong demand in PC gam-  
ing and eSports drove Asetek’s Gaming and Enthusiast  
revenue to record levels. In 2021, Asetek expects to  
continue to invest in and launch innovative new high-per-  
formance products for gamers and enthusiasts. With two  
recently announced acquisitions – JMH Gallows Pound  
Technologies Ltd. and Granite Devices Inc., both devel-  
opers of gaming hardware and software technology – the  
Company plans to capitalize on opportunities identified  
within the Asetek eSports Academy. Consistent with prior  
years, Asetek plans to continue to focus its resources on  
the Gaming and Enthusiast segment, growing market  
share through existing and new OEMs, and building the  
Asetek brand.  
While there is no assurance that the Company will gen-  
erate sufficient revenue or operating profits in the future,  
Asetek’s management estimate that the Company’s  
capital resources are sufficient to fund operating activities  
in the foreseeable future, based on financial forecasts. To  
the extent necessary to fund expansion or other liquidity  
needs, management will consider offerings of debt, eq-  
uity, or a combination thereof, depending on the cost of  
capital and the status of financial markets at that time.  
Asetek’s Direct-to-chip liquid cooling enables power  
savings and CO2 emission reductions from the reuse of  
data center waste heat. Significant long-term revenue  
growth is expected, though public standards are needed  
to trigger wider data center adoption of liquid cooling.  
Asetek continues to participate in targeted campaigns to  
influence and educate politicians and support wider un-  
derstanding of the significant environmental and circular  
economy benefits enabled by liquid cooling.  
LIQUID COOLING DONE RIGHT  
 
CORONA OR NOT: 25%  
GROWTH IN G&E SEGMENT  
LIQUID COOLING DONE RIGHT  
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THE PANDEMIC HAS PROVEN TO BE BOTH A CHAL-  
LENGE AND A DRIVER FOR ASETEK IN DENMARK,  
THE USA, CHINA AND OTHER COUNTRIES  
“Fortunately, as an international player in a fast-paced and  
quickly-evolving sector, we were well trained in working from  
home and at varying times of day. We therefore haven’t seen  
our development momentum slow down. We implemented  
the necessary measures around physical distancing and  
infection containment and were therefore able to maintain  
our manufacturing in Denmark, for example.”  
As soon as you enter the headquarters in Aalborg you are  
met with bottle of hand sanitizer and a temperature scanner  
that can show if you have a fever.  
At Asetek, the challenge of Corona and the risk of spreading  
infection have of course been taken very seriously over the  
last many months. Besides a personal encouragement to get  
tested regularly, the dedicated staff have also been offered  
antibody tests at the company. And a few who became  
infected were immediately sent home to isolate and get  
treatment.  
As for sales, Asetek has seen its G&E (Gaming & PC Enthusi-  
ast) segment grow by 25% from 2019 to 2020.  
“We can’t help but be very satisfied with that, of course.  
But we were concerned in April 2020 when we watched a  
world-wide crisis unfold, without being sure of the long-term  
consequences”, explains Peter Dam Madsen, adding:  
Asetek CFO Peter Dam Madsen says that the pandemic has  
had a big impact on the in-house routines:  
“We can speculate about the reason for the growth and  
whether it’s due to Corona alone or whether it’s a natural  
“comeback” from a relatively weak 2019. Our feeling is that  
it is a combination. We also began selling a relatively large  
number of exciting new products in 2020, and they have  
been very well received. Looking at it over a 10-year period,  
growth has also been a very nice 15% per year on average.”  
“To begin with, our China department in Xiamen – only 600  
miles from Wuhan – was “down” for some weeks. And, before  
we knew it, the problems had spread to the rest of the world.  
Fortunately, our supply chain and production systems coped  
without major problems thanks to a peerless effort from our  
staff, manufacturing partners and subcontractors.” Peter  
Dam Madsen recounts how people in both the Danish and  
US branches have been working from home and showing  
great pioneering spirit.  
 
ASETEK A/S - ANNUAL REPORT 2019 17  
17  
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LIQUID COOLING DONE RIGHT  
 
18  
LIQUID COOLING DONE RIGHT  
 
LIQUID COOLING DONE RIGHT  
Dialogue between the Company and its shareholders.
The communication between Asetek and shareholders
primarily takes place at the Company’s Annual General
Meeting and via company announcements. Asetek share-
holders are encouraged to subscribe to the e-mail service
to receive company announcements, interim manage-
ment statements, interim reports and annual reports as
well as other news via e-mail.
the CEO and defining his or her work instructions as well
as setting of his or her compensation. The Board period-
ically reviews the Company’s policies and procedures to
ensure that the Group is managed in accordance with
good corporate governance principles, upholding high
ethics.
The Board members also regularly receive operations re-
ports and participate in strategy reviews. The Company's
business plan, strategy and risks are regularly reviewed
and evaluated by the Board. The Board Members are free
to consult the Company's senior executives as needed.
Ordinarily, the Chairman of the Board proposes the agenda
for each Board meeting. Besides the Board Members,
Board meetings are attended by the Executive Board.
Other participants are summoned as needed. The Board
approves decisions of particular importance to the Compa-
ny including the strategies and strategic plans, the approval
of significant investments, and the approval of business
acquisitions and disposals.
CORPORATE GOVERNANCE
Asetek’s management model and organization are adapt-
ed continuously to ensure the Company is equipped to
manage all obligations to shareholders, customers, em-
ployees, authorities and other stakeholders to the utmost.
In this process, Asetek uses the corporate governance
recommendations from NASDAQ Copenhagen as an im-
portant source of inspiration. The recommendations can
be found at http://www.nasdaqomx.com/listing/europe/
surveillance/copenhagen/corporategovernance
Financial reporting. The Board of Directors receives
regular financial reports on the Company's business and
financial status.
The general meeting. The General Meeting has the final
authority over the Company. The Board of Directors em-
phasize that shareholders are given detailed information
and an adequate basis for the decisions to be made by the
General Meeting.
Notification of meetings and discussion of items. The
Board schedules regular meetings each year. Ordinarily,
the Board meets eight to ten times a year, of which four
are quarterly update teleconferences. The meetings are
typically conducted at either the facility in Aalborg, Den-
mark or in San Jose, California or via telephone. Additional
meetings may be convened on an ad hoc basis.
The Board of Directors is fundamentally in full agree-
ment with Danish Committee on Corporate Governance
recommendations for good company governance. Asetek
endeavors to follow the relevant recommendations for
the Company, which support the business and ensure val-
ue for the Company’s stakeholders. The statutory report
on Corporate Governance, cf. section 107b of the Danish
Financial Statements Act, is available on the Company’s
website:
Conflicts of interest. In a situation involving a member
of the Board personally, this member will exclude him or
herself from the discussions and voting on the issue.
The General Meeting elects the Board of Directors, which
currently consists of five members. The board members
are elected for one year at a time with the option for
re-election.
Board of Directors meetings:
Amendment of Articles of Association. Unless other-
wise required by the Danish Companies Act, resolutions
to amend the Articles of Association must be approved by
at least 2/3 of the votes cast as well as at least 2/3 of the
voting share capital represented at the General Meeting.
http://www.asetek.com/media/2681/scgs2020.pdf
Board responsibilities. The Board of Directors’ main
tasks include participating in developing and adopting
the Company's strategy, performing the relevant control
functions and serving as an advisory body for the exec-
utive management. The Board reviews and adopts the
Company's plans and budgets. Items of major strategic
or financial importance for the Company are items pro-
cessed by the Board. The Board is responsible for hiring
All Board members receive regular information about the
Company's operational and financial progress in advance
of the scheduled Board meetings.
Danish Recommendation for Corporate Governance
2020 2019
Complies with recommendations
45
1
44
1
Partially complies with recommendations
Does not comply with recommendations
1
2
MANAGEMENT REPORT - GOVERNANCE  
19  
Meetings held during the year
8
Participation:
Jukka Pertola (chair)
Chris Christopher
Jørgen Smidt
100%
100%
100%
88%
Maria Hjorth
Erik Damsgaard
100%
 
20 MANAGEMENT REPORT - GOVERNANCE  
Use of Committees. Currently, the Company has a Nomi-
nation Committee, an Audit Committee and a Compensa-
tion Committee.
ed. All of the members elected by the 2020 General Meeting
are independent persons, and none of the Board members
participates in the day-to- day operation of the Company.
Additional information about the Board members, including
other management positions held, can be found in Note 25.
REMUNERATION OF THE BOARD
OF DIRECTORS AND EXECUTIVE
MANAGEMENT
// The Nomination Committee is elected directly by the
General Meeting. The Committee consists of three
members and must be independent from the Board of
Directors and the management, however, it is recom-
mended that the chairman of the Board of Directors is a
member. The tasks include proposing candidates for the
Board of Directors, propose remuneration for theBoard
of Directors as well as perform the annual assess- ment
of the Board of Directors. Members: Ib Sønderby (chair-
man), Claus Berner Møller and Jukka Pertola.
For 2020, the Company will publish its executive remuner-
ation principles and practices in a separate report issued in
compliance with the Danish Companies Act, section 139b.
The report will be issued together with the notice of the
annual general meeting.
Risk management. Refer to the Risk Management section
of the Management Report as well as Note 3 of the consoli-
dated financial statements.
// The Compensation Committee has responsibilities
related to developing proposals for the applicable
remuneration policy and remuneration of the Manage-
ment Board. Members: Jukka Pertola (chairman), Chris
Christopher and Jørgen Smidt.
The 2020 Remuneration Report will be available on the
Company's website: https://ir.asetek.com/share-information/
general-meetings
The Board’s self-evaluation. The Board's composition,
competencies, working methods and interaction are dis-
cussed on an ongoing basis and evaluated formally on an
annual basis. In this connection, the Board also evaluates
its efforts in terms of corporate governance.
// The Audit Committee is elected among the members
of the Board of Directors and has responsibilities relat-
ed to financial reporting, the independent auditor, in-
ternal reporting and risk management, including cyber-
security risks. The Committee consists of at least two
shareholder elected Board members. Members: Maria
Hjorth (chairman), Chris Christopher, Erik Damsgaard.
The composition of the Board is considered appropriate
in terms of professional experience and relevant special
competences to perform the tasks of the Board of Directors.
The Board of Directors continuously assesses whether the
competencies and expertise of members need to be updat-
LIQUID COOLING DONE RIGHT  
Meetings held during the year
3
Participation:
Ib Sønderby (chair)
Claus Berner Møller
Jukka Pertola
100%
100%
100%
Nomination Committee meetings:
Meetings held during the year
4
Participation:
Maria Hjorth (chair)
Chris Christopher
Erik Damsgaard
100%
100%
100%
Audit Committee meetings:
Meetings held during the year
4
Participation:
Jukka Pertola (chair)
Chris Christopher
Jørgen Smidt
100%
100%
100%
Compensation Committee meetings:
 
LIQUID COOLING DONE RIGHT  
MANAGEMENT REPORT - GOVERNANCE  
21  
BOARD OF DIRECTORS SHARE AUTHORIZATION  
Meeting Date  
April 23, 2014  
August 12, 2014  
August 11, 2015  
April 29, 2016  
April 25, 2017  
July 7, 2017  
Meeting Type Action  
Shares  
118.210  
32.970  
700.000  
600.000  
509.687  
106.999  
-
Nominal Value  
DKK 0.10/share  
DKK 0.10/share  
DKK 0.10/share  
DKK 0.10/share  
DKK 0.10/share  
DKK 0.10/share  
-
Price  
Board  
Board  
Board  
Board  
Board  
Board  
General  
Board  
Board issues warrants to employees and Board members  
NOK 40.10  
NOK 33.90  
NOK 10.50  
NOK 19.50  
NOK 76.25  
NOK 113.00  
-
Board issues warrants to employees and Board members  
Board issues warrants to employees and Board members  
Board issues warrants to employees and Board members  
Board issues warrants to employees and Board members  
Board issues warrants to employees  
April 25, 2018  
October 31, 2018  
Board authorized to acquire the Company's own shares  
Board introduces employee stock option program to replace warrant  
program and issues options to employees  
378.500  
-
DKK 0.10/share  
-
NOK 46.30  
-
April 10, 2019  
General  
Board  
Board authorized to acquire the Company's own shares  
Board issues options to employees  
September 8, 2019  
494.900  
DKK 0.10/share  
NOK 24.70  
April 23, 2020  
April 22, 2020  
Board  
Board issues options to employees  
320.300  
-
DKK 0.10/share  
-
NOK 38.33  
-
General  
Board authorized to acquire the Company's own shares  
 
COVID-19 pandemic.In December 2019, a novel strain of  
coronavirus (SARS-CoV-2) causing the COVID-19 disease  
surfaced in Wuhan, China. In March 2020, the World Health  
Organization declared COVID-19 a global pandemic. The  
U.S., Denmark and other countries have enacted temporary  
closures of businesses, issued quarantine orders and taken  
other restrictive measures. The Company’s operating sites  
are complying with regulations and recommendations  
imposed by local governments for minimizing the virus’  
spread. If production must be stopped or a critical number of  
employees become too ill to work, business operations could  
be adversely affected. If suppliers experience closures or  
reductions in capacity utilization, Asetek may have difficulty  
sourcing materials needed to fulfill production requirements.  
If customers experience adverse business consequences,  
demand for Asetek’s products could decline. The impact  
of the COVID-19 pandemic is fluid; after appearing to ease  
in the middle of 2020, its spread worsened in the fourth  
quarter. As a result, management cannot predict the extent  
to which Asetek’s future results of operations or financial  
condition will ultimately be impacted.  
Company. The newly acquired assets may be challenging  
to develop into successful products and integrate into the  
Company’s core lines of business.  
initiated. Such cases may proceed for an extended period  
and could potentially lead to an unfavorable outcome to  
Asetek. Asetek has historically incurred significant legal  
costs associated with litigation and may continue to do  
so in the future to the extent management believes it is  
necessary to protect intellectual property.  
RISK MANAGEMENT  
Asetek’s potential to realize the Company’s strategic and  
operational objectives are subject to a number of commer-  
cial and financial risks. Asetek is continuously working on  
identifying risks that can negatively impactthe Company’s  
future growth, activities, financial position and results as  
well as CSR-related risks. Asetek conducts its business with  
significant focus on continuous risk monitoring and manage-  
ment. The overall goal of risk management is to ensure that  
the Company is run with a level of risk, which is in a sensible  
ratio to the activity level, the nature of the business, and the  
Company's expected earnings and equity. To the largest  
extent possible, Asetek tries to accommodate and limit the  
risks which the Company can affect through its own actions.  
Customer concentration. In 2020, two customers ac-  
counted for 41% and 14% of total revenue. In the event of a  
decline or loss of either of these customers, replacement of  
the revenue stream would be difficult for Asetek to achieve  
in the short term. The Company is actively working with its  
other Enthusiast/DIY customers to grow their respective  
market shares and order volumes.  
Manufacturing supply. Asetek relies upon suppliers and  
partners to supply products and services at competitive  
prices. Asetek’s Gaming and Enthusiast products have  
been historically assembled in Xiamen, China by a single  
contract manufacturer which may be difficult to substi-  
tute in the short term if the need should arise. Suppliers  
are proactively managed by the Company's operations  
teams based in Xiamen and Aalborg.  
Competition. The markets in which the Company operates  
are competitive, the technological development is rapid, and  
the Company may in the future also be exposed to increased  
competition from current market players or new entrants.  
U.S. import tariffs. The U.S. has imposed a 25% tariff on  
imports of goods manufactured in China, which include  
Asetek products. The existence of the tariff has contrib-  
uted to the uncertainties in the Gaming & Enthusiast  
market. The Company continues to work to minimize the  
impact of the tariff on Asetek and its customers.  
Insurance. It is the Company’s policy to mitigate significant  
risk areas with commercially available insurance products.  
This currently includes insurance for product liability, oper-  
ating material and inventory as well as compulsory coverage,  
which varies from country to country. Management assess-  
ments indicate that the necessary and relevant precautions  
have been taken to thoroughly cover insurance issues.  
Asetek’s insurance policies and overall coverage approach  
are reviewed at least annually.  
Credit risk. Credit risk is the risk of a counterpart neglecting  
to fulfill its contractual obligations and in so doing imposing a  
loss on Asetek. The Group’s credit risk originates mainly from  
receivables from the sale of products as well as deposits in  
financial institutions. Receivables from the sale of products  
are split between many customers and geographic areas.  
Two customers represented 47% and 17% of trade receiva-  
bles at December 31, 2020. A systematic credit evaluation of  
all customers is conducted, and the rating forms the basis for  
the payment terms offered to the individual customer. Credit  
risk is monitored centrally.  
Foreign exchange rates. Substantially all of Asetek’s  
revenue is billed in USD. However, many customers resell  
Asetek products to end users in countries where USD is  
not the transactional currency. As a result, there is a risk  
that fluctuations in currency will affect the cost of product  
to the end user and negatively impact market demand for  
Asetek products. Asetek estimates that about one third  
of its sold products ultimately are delivered in Europe or  
Japan, which are the two geographical areas which could  
have the largest potential impact due to USD fluctua-  
Business combinations. In November 2020, The Company  
acquired JMH Gallows Pound Technologies Ltd., a UK-  
based developer of hardware and software technology and  
owners of the UltimateGameTech brand. In January 2021,  
Asetek announced the acquisition of intellectual property  
from Granite Devices Inc. These acquisitions are expected  
to support the continuing development of the Company’s  
Gaming and Enthusiast product offerings. To date, Asetek  
has principally developed its products internally. Acquiring  
technology externally represents a new avenue for the  
Below, some of the risk factors management considers as  
being of special importance to the Group are described in no  
specific order.  
Intellectual property defense. Asetek has filed and  
defended lawsuits against competitors for patent  
infringement. While some of the cases have been settled  
or dismissed, some may continue, and new cases may be  
CSR-related risks. Please see the separate Asetek Sus-  
tainability Report 2020 for identified risks and remedies.  
LIQUID COOLING DONE RIGHT  
22 MANAGEMENT REPORT - GOVERNANCE  
 
improved efficiency and noise-reduction. Providing new  
and innovative applications for Asetek’s cooling technol-  
ogy is also a focus, as evidenced by the cooling products  
released during 2020.  
has entered into an information security risk insurance  
policy. This area is actively monitored by the Board of  
Directors' Audit Committee.  
however, such reform is not certain. The Company con-  
tinues to work with its tax advisors to clarify and address  
these matters.  
tion. Asetek believes that other factors in the end users’  
buying decision play a larger role than price fluctuation  
on the liquid cooling component. During 2020, the USD  
weakened against both the DKK and EUR by 9%, and  
weakened 5% against the Japanese yen.  
Taxation. The tax situation of the Company is complex. In  
connection with its initial public offering in 2013, Asetek  
moved its Parent company from the U.S. to Denmark.  
However, USA – in a unilateral tax treaty override – still  
considers Asetek A/S a U.S. tax subject, effectively cre-  
ating a double taxation situation. Asetek has approached  
both countries’ tax authorities with the aim of resolving  
the double tax situation as per the double taxation treaty.  
However, a determination may take several years, and the  
authorities are not obligated to resolve the problem. The  
Company has made progress in 2020 in working with the  
tax authorities of Denmark and U.S. to possibly resolve  
this issue.  
Employee relations. Asetek is a knowledge-intensive  
Company and in order to continuously offer optimal  
solutions, develop innovative products, and ensure satis-  
factory financial results, it is necessary to attract, develop  
and retain the right employees. Asetek has the goal of  
being an attractive workplace and achieves this through  
various programs including an option incentive program,  
attractive working conditions, and corporate social re-  
sponsibility (CSR) policies described in the Asetek Sus-  
tainability Report 2020. The Company seeks to support  
a Company culture founded on individual responsibility  
and performance as well as team accomplishment.  
Projects and contracts. It is important to Asetek’s overall  
success that development projects are executed at high  
quality and at predetermined timeframes and cost prices.  
Risks are attached to the sale, analysis and design, develop-  
ment and initial manufacturing phases. Asetek has carefully  
defined the individual phases and the activities contained  
therein, with a view to active risk management and efficient  
implementation. Through project reviews and ongoing  
analyses before, during, and after initiation, Asetek works to  
ensure that agreements are adhered to and that revenue  
and margins are as planned.  
Asetek’s raw materials are predominantly purchased with  
USD, from vendors whose underlying currency is CNY.  
The USD value versus the CNY fluctuated during 2020,  
appreciating mid-year, while ending the year down by ap-  
proximately 6%. Asetek recognizes that USD appreciation  
can result in sales price pressure for its suppliers. Histori-  
cally, the Company has not seen significant reaction from  
its markets. In addition, Asetek believes that competing  
products are prone to the same exchange rate scenarios  
as Asetek.  
A significant portion of Asetek's overhead costs are  
incurred in DKK. As a result, fluctuations in USD vs. DKK  
will continue to have an influence on results of operations  
and financial position. The Group has not entered into any  
forward exchange instruments.  
IT security. Asetek continuously implements measures  
to monitor and respond to data breaches and cyberat-  
tacks. Management ensures that security assessments,  
including vulnerability assessments and assumed breach  
tests are performed on a regular basis. Additional security  
measures to mitigate phishing and spam mails are deliv-  
ered to employees and password policies are maintained  
to mitigate the risk of password dictionary attacks or other  
forms of brute force hacking of individuals. The Company  
maintains ongoing efforts to continuously improve and  
strengthen the IT Infrastructure security. Mandatory  
training in cybersecurity is carried out for all employees,  
and the knowledge level of cybersecurity is thus being  
changed from awareness-based to training- and com-  
pliance-based. Asetek has not experienced any security  
breaches within the most recent 5 years. The Company  
In June 2019, the U.S. released regulation for its Global  
Intangible Low-Taxed Income (GILTI) inclusion for U.S.  
taxation, effective beginning with tax year 2018. The GILTI  
regulation requires U.S. companies to report foreign  
corporation intangible income that exceeds 10% return  
on foreign invested assets. Under prior law, U.S. owners  
of foreign corporations were able to defer recognizing  
taxable income until there was a distribution of earnings  
back to U.S. owners. The impact of the GILTI regulation  
caused incremental utilization of the Company's available  
deferred tax assets of approximately $0.4 million in 2020  
and $1.1 million in 2019 and 2018 combined. Because of  
Asetek’s U.S. tax status as described above, management  
believes that the impact of the GILTI regulation as it  
applies to the Company could be reformed in the future;  
CORPORATE SOCIAL
RESPONSIBILITY
Asetek seeks to be a good corporate citizen in everything
that it does, and therefore has combined its operating
principles into one framework policy. Please refer to the
Asetek Sustainability Report 2020, available here:
https://www.asetek.com/media/2755/asetek-sustainabil-
ity-report-2020.pdf
Research and development, product innovation,  
market development. The Company’s future success,  
including the opportunities to ensure growth, depends  
on the ability to continue developing new solutions and  
products adapted to the latest technology and the clients’  
needs as well as improving existing solutions and market  
position. As such, the Company develops new releases on  
a regular basis, with emphasis on higher performance,  
Pursuant to section 107d of the Danish Financial State-
ments Act, the Company must report on its diversity
policy. Asetek's diversity policy is available here:
https://ir.asetek.com/media/2756/diversity-policy-2021.pdf
LIQUID COOLING DONE RIGHT  
MANAGEMENT REPORT - GOVERNANCE  
23  
 
LIQUID COOLING DONE RIGHT  
24 MANAGEMENT REPORT - GOVERNANCE  
OWNERSHIP  
INVESTOR RELATIONS  
SHAREHOLDER INFORMATION  
At the end of 2020, Asetek A/S had 871 shareholders,  
some of whom are nominee accounts covering several  
individual investors. Members of Asetek A/S’s Board of  
Directors and Executive Board owned or represented a  
total of 8.2% of the share capital at the end of 2020.  
Asetek aims to provide a consistent, high level of information  
to its shareholders and other interested parties.  
Asetek’s shares are listed on Oslo Børs. As of December  
31, 2020, a total of 26,432,957 shares are issued, each with  
a nominal value of DKK 0.1.  
It is Asetek’s intention to conduct an active dialogue with  
shareholders, analysts, the press and the public as a whole.  
Communication with interested parties takes place via the  
ongoing publication of notifications, investor presentations  
and individual meetings.  
The share is classified in the “Information Technology”  
sector by the stock exchange, and the ticker mark is ASTK  
(the previous ticker mark was ‘ASETEK’ until December  
2020).  
1 JANUARY 2020  
Asetek shares opened the year 2020 at NOK 30.40.  
The website www.asetek.com is the primary source of  
information for interested parties. It is updated regularly with  
information about Asetek’s activities and strategy. Sharehold-  
ers, analysts, investors, stockbrokers as well as other interested  
parties who have questions regarding Asetek are requested to  
inquire via the email address investor.relations@asetek.com,  
which is monitored by the CFO.  
The total market capitalization value at the end of 2020  
was NOK 2,770 million (approximately USD 322 million)  
which was an increase of 258% from the market value  
at the beginning of 2020. Asetek is thus classified as a  
MidCap company on Oslo Børs.  
31 DECEMBER 2020  
At the last trading day of the year, Asetek shares closed  
at NOK 108.80, which was an increase of 258% from the  
beginning of the year. The Oslo Stock Exchange (OSE)  
Benchmark Index increased 3% in 2020. The OSE Infor-  
mation Technology Index increased by approximately  
60% in 2020.  
931,281 shares were held by the Company on December  
31, 2020 as treasury shares, primarily to support an em-  
ployee stock option program.  
Dividends. Asetek continues to invest its capital in the devel-  
opment and marketing of its cooling products. Asetek’s policy  
allows for distribution of a dividend to its shareholders of up  
to 50% of the previous year’s net income (after tax profits),  
after taking into consideration the Company’s growth plans,  
liquidity requirements and necessary financial flexibility.  
Each share provides one vote. The shares are marketable  
securities and no restrictions have been set for the shares’  
negotiability. The share register is maintained by DNB  
Bank ASA - Verdipapirservice, Postboks 1600 Sentrum,  
0021 Oslo, Norway.  
According to Asetek’s registrations, the following share-  
holders possessed 5% or above of the share capital as per  
December 31, 2020:  
Shareholder  
Number of Shares  
%
Skandinaviska Enskilda  
Banken AB  
2,880,905  
2,722,415  
10.9%  
10.3%  
The ATP Group  
HSBC Trinkaus &  
Burkhardt AG  
2,444,560  
1,586,341  
9.3%  
6.0%  
Sunstone Technology  
Ventures Fund  
This statement of Asetek's diversity policy is a component of
the Management's Report in the Annual Report for 2020
and covers the financial period 1 January - 31 December 2020:
Asetek believes that diversity among employees and man-
agement, including an even distribution of age, nationality
and educational background, contributes positively to
the work environment and strengthens the company's
competitiveness and performance.
Historically, Asetek has been a diverse workplace, where
employees have very different backgrounds, competencies
and living conditions. Not only in relation to gender, age
and origin, but equally in relation to education, experi-
ence and personality. It is therefore Asetek's goal that the
management should equally reflect the diversity among
our employees. In order to promote diversity among the
company's management and board of directors, there is a
focus on this in recruiting new managers. In 2020, Asetek
has therefore sought to ensure broad diversity among
applicants when recruiting and promoting.
The board members of Asetek cover a wide range of
experiences from both the Danish and international
business community and the high-tech industry. This
composition is considered appropriate, as it ensures a
breadth in the members' approach to the tasks, and thus
helps to ensure qualified considerations and decisions. At
the end of the financial year, 30% of the Executive Board
and Board of Directors are of a nationality other than
Danish. In terms of age composition, 0% of management
is under 40 years old, 57% are between 40 and 60 years
old, and 43% of management is over 60.
REPORTING CALENDAR FOR 2021:  
Annual General Meeting:  
Q1 2021 Report:  
April 22, 2021  
April 22, 2021  
Q2 2021 Report:  
August 12, 2021  
October 28, 2021  
March 4, 2022  
Q3 2021 Report:  
2021 Annual Report:  
 
25  
LIQUID COOLING DONE RIGHT  
 
26  
2020 WAS A YEAR WHEN ASETEK’S GOAL OF  
MEANINGFUL CLIMATE REGULATION FOR EUROPE  
MOVED CLOSER, SAYS ASETEK’S EU PUBLIC  
AFFAIRS ADVISOR. FOR EXAMPLE, ASETEK CON-  
TRIBUTED TO A HOLISTIC DATA CENTER EFFICIENCY  
ANALYSIS CARRIED OUT BY THE INFLUENTIAL  
GERMAN ENVIRONMENT AGENCY BY DELIVERING  
REAL-WORLD DATA FROM OUR TEST INSTALLA-  
TION THROUGHOUT THE YEAR.  
“Although, as a company, Asetek is dwarfed in comparison  
with other stakeholders, we actually garner lot of interest  
and understanding that results in positive reports. In  
2020, the Green Deal really made the reuse of waste heat  
in data centers a focus of the EU’s circular economy strat-  
egy toward carbon neutrality,” says Jan Gütter, Asetek’s  
Public Affairs advisor, referring to both the EU and key  
member state stakeholders like the German Environment  
Agency, the UBA (Umweltbundesamt).  
supports Asetek’s direct-to-chip Liquid Cooling technol-  
ogy as “best practice” – a memo that attracted attention  
in Brussels.  
for Energy System Integration” and the JRC Report on  
the “Development of the EU Green Public Procurement  
(GPP) Criteria for Data Centers, Server Rooms and Cloud  
Services.”  
IMPORTANT MILESTONES ACHIEVED  
“These publications”, he underlines, “call specifically for  
action to implement measures on the reuse of residual  
heat from data centers. Similarly, the EU commission has  
also initiated a hearing and subsequent review of the  
Energy Efficiency Directive (EED), which is expected to  
be adopted in 2021”.  
As Asetek has stated before, the potential is huge. If  
“dirty” power is used, the carbon footprint of the World’s  
data centers is bigger than that of worldwide road traffic,  
and on par with that of worldwide air traffic. Though the  
goal is to produce the power needed for all data centers  
by green methods, even efficient use of only the EU  
data centers’ residual heat as offered by Asetek would  
add enough district heating for 11 European capitals,  
with London, Paris and Berlin top of the list, to be heated  
carbon-neutrally. This could save significant capital  
investment, scarce resources, plus the energy required to  
build an army of wind turbines, solar heating systems etc.  
that would otherwise have to meet this need.  
DAs the world’s leading manufacturer of on-processor liq-  
uid cooling for data centers and other purposes, in recent  
years Asetek has also – in a move unusual for the company  
– been taking political action to draw attention to the huge  
climate policy gains the world can make if hyperscale data  
centers, for example, use its technology in the future.  
In this respect, he describes 2020 as a year when Asetek’s  
viewpoint made significant advances in Europe. In a nut-  
shell, the idea is that the EU will make it a requirement for  
data center operators to design their facilities and choose  
their technology so that optimum use is made of the  
surplus heat they generate. Asetek’s technology offers  
circular reuse of up to 80% of inbound power in the form  
of 60°C hot water without the need for artificial heating  
by additional power-hungry and costly heat pumps. A  
solution that is readily and widely available and has been  
proven successful by Asetek, which connected its own  
test data center to the district heating network in its home  
city of Aalborg in early 2020.  
Jan Gütter also emphasises that, in the second half of  
2020, the German EU presidency delivered a strong  
foundation for its future adoption, with a digital agenda  
on the environment containing several of Asetek’s pro-  
posed measures to improve the efficiency of data centers  
by utilising waste heat.  
This political investment that Asetek has chosen to make  
is primarily focusing on EU regulation and legislation. With  
its Green Deal, which is about to be fleshed out in the near  
future, the EU is widely expected to begin setting strict  
environmental standards for member states that will pave  
the way to make the European Union climate neutral by  
2050. Recently, more and more European politicians and  
officials have been waking up to the enormous potential of  
the greening of data centers as shown in the documenta-  
tion supplied by Asetek.  
“In 2020, a number of important milestones were  
achieved on the way toward EU regulations matching  
Asetek’s potential,” adds Jan Gütter confidently, and he  
points to the publication of the EU’s Circular Economy  
Action Plan1, the Commission’s Communication on  
“Powering a Climate-Neutral Economy: An EU Strategy  
During the year, internationally recognised climate  
thinktank Concito, headed by former EU commissioner  
Connie Hedegaard, also produced a memo that strongly  
LIQUID COOLING DONE RIGHT  
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ASETEK A/S - ANNUAL REPORT 2019 27  
LIQUID COOLING DONE RIGHT  
27  
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LIQUID COOLING DONE RIGHT  
 
28  
LIQUID COOLING DONE RIGHT  
 
CONSOLIDATED FINANCIAL STATEMENTS  
Profit & Loss ......................................................................................................... 30  
Balance Sheet.......................................................................................................31  
Equity.......................................................................................................................32  
Cash Flows ............................................................................................................33  
Notes........................................................................................................................34  
FINANCIAL  
STATEMENTS  
PARENT COMPANY FINANCIAL STATEMENTS  
Profit & Loss ......................................................................................................... 58  
Balance Sheet......................................................................................................59  
Equity...................................................................................................................... 60  
Cash Flows .............................................................................................................61  
Notes........................................................................................................................62  
MANAGEMENT STATEMENT.................................................................... 65  
INDEPENDENT AUDITOR’S REPORTS .................................................66  
OTHER INFORMATION  
Stock exchange releases.................................................................................69  
Definitions of ratios and metrics..................................................................70  
29  
LIQUID COOLING DONE RIGHT  
 
LIQUID COOLING DONE RIGHT  
30 FINANCIAL STATEMENT S - PROFIT & LOSS  
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Foreign currency translation adjustments  
2,392
(444)
TOTAL COMPREHENSIVE INCOME  
11,587
(1,072)
INCOME PER SHARE: (IN USD)  
Basic  
12  
12  
0.36
0.35
(0.02)
(0.02)
Diluted  
All operations are continuing.  
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ASETEK A/S  
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME  
For the years ended December 31, 2020 and 2019  
(USD 000’s)  
Revenue  
Cost of sales  
GROSS PROFIT  
Note  
2020  
72,750
2019  
54,334
(31,329)
23,005
4
8
(38,556)
34,194
Research and development  
Selling, general and administrative  
Other income  
(5,718)
(17,548)
-
(4,889)
(17,821)
753
TOTAL OPERATING EXPENSES  
8
(23,266)
(21,957)
OPERATING INCOME  
Foreign exchange gain (loss)  
Finance income  
10,928
(1,361)
51
1,048
218
9
9
9
359
Finance costs  
(192)
(171)
406
TOTAL FINANCIAL INCOME  
(1,502)
INCOME BEFORE TAX  
Income tax (expense) benefit  
INCOME FOR THE YEAR  
9,426
(231)
1,454
(2,082)
(628)
10, 11  
9,195
 
LIQUID COOLING DONE RIGHT  
FINANCIAL STATEMENT S - BALANCE SHEET 31  
(USD 000’s)  
Note  
2020  
2019  
ASSETS  
NON-CURRENT ASSETS  
Intangible assets  
15  
16  
11  
3,217
7,049
6,421
605
1,920
6,115
Property and equipment  
Deferred income tax assets  
Other assets  
5,521
307
TOTAL NON-CURRENT ASSETS  
17,292
13,863
CURRENT ASSETS  
Inventory  
18  
17  
2,531
24,471
27,099
54,101
1,657
14,080
24,505
40,242
Trade receivables and other  
Cash and cash equivalents  
TOTAL CURRENT ASSETS  
TOTAL ASSETS  
71,393
54,105
EQUITY AND LIABILITIES  
EQUITY  
Share capital  
19  
433
50,681
(3,589)
47,525
423
38,197
388
Retained earnings  
Translation and other reserves  
TOTAL EQUITY  
39,008
NON-CURRENT LIABILITIES  
Long-term debt  
20  
20  
2,604
2,774
TOTAL NON-CURRENT LIABILITIES  
2,604
2,774
CURRENT LIABILITIES  
Short-term debt  
1,525
2,429
1,518
1,022
Accrued liabilities  
Accrued compensation and employee benefits  
Trade payables  
3,193
1,526
14,117
8,257
TOTAL CURRENT LIABILITIES  
TOTAL LIABILITIES  
21,264
23,868
12,323
15,097
TOTAL EQUITY AND LIABILITIES  
71,393
54,105
.
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ASETEK A/S  
CONSOLIDATED BALANCE SHEET  
As of December 31, 2020 and 2019  
 
LIQUID COOLING DONE RIGHT  
(USD 000’s)  
Share  
capital  
Translation  
reserves  
Treasury  
share reserves  
Retained  
earnings  
Total  
EQUITY AT DECEMBER 31, 2018  
Total comprehensive income for 2019  
Income for the year  
422
836
(4)
37,704
38,958
-
-
-
-
(444)
(444)
-
-
-
(628)
-
(628)
(444)
Foreign currency translation adjustments  
Total comprehensive income for 2019  
Transactions with owners in 2019  
Shares issued  
(628)
(1,072)
1
-
-
-
-
-
65
1,056
1,121
66
1,056
Share based payment expense  
Transactions with owners in 2019  
EQUITY AT DECEMBER 31, 2019  
Total comprehensive income for 2020  
Income for the year  
1
-
-
1,122
423
392
(4)
38,197
39,008
-
-
-
-
2,392
2,392
-
-
-
9,195
-
9,195
2,392
11,587
Foreign currency translation adjustments  
Total comprehensive income for 2020  
Transactions with owners in 2020  
Shares issued  
9,195
10  
-
-
-
(6,369)
-
2,371
-
2,381
(6,369)
918
Shares repurchased  
-
Share based payment expense  
Transactions with owners in 2020  
EQUITY AT DECEMBER 31, 2020  
-
-
-
918
10
433
(6,369)
(6,373)
3,289
50,681
(3,070)
47,525
2,784
.
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32 FINANCIAL STATEMENT S - EQUITY  
ASETEK A/S  
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY  
For the years ended December 31, 2020 and 2019  
 
LIQUID COOLING DONE RIGHT  
FINANCIAL STATEMENT S - CASH FLOWS 33  
ASETEK A/S  
CONSOLIDATED CASH FLOW STATEMENT  
For the years ended December 31, 2020 and 2019  
(USD 000’s)  
Note  
2020  
2019  
CASH FLOWS FROM OPERATING ACTIVITIES  
Income (loss) for the year  
9,195
3,754
(51)
(628)
4,057
(359)
171
Depreciation and amortization  
15, 16  
Finance income recognized  
9
9
Finance costs recognized  
192
Finance income, cash received  
51
359
Finance costs, cash paid  
(112)
231
(84)
Income tax expense (income)  
10, 11  
7
2,082
(172)
1,056
2,234
154
Cash receipt (payment) for income tax  
Share based payments expense  
Changes in trade receivables, inventories, other assets  
Changes in trade payables and accrued liabilities  
NET CASH PROVIDED IN OPERATING ACTIVITIES  
10
918
(10,121)
7,363
11,430
8,870
CASH FLOWS FROM INVESTING ACTIVITIES  
Acquisition of business  
14  
14, 15  
16  
(1,316)
(1,571)
-
(1,441)
(713)
Additions to intangible assets  
Purchase of property and equipment  
NET CASH USED IN INVESTING ACTIVITIES  
(1,929)
(4,816)
(2,154)
CASH FLOWS FROM FINANCING ACTIVITIES  
Repayments of borrowings  
(269)
(6,369)
2,381
22
-
Repurchase of common shares  
Proceeds from issuance of share capital  
19  
64
Principal payments on leases  
(831)
(734)
(648)
(190)
5,878
18,627
24,505
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES  
Effect of exchange rate changes on cash and cash equivalents  
NET CHANGES IN CASH AND CASH EQUIVALENTS  
Cash and cash equivalents at beginning of period  
CASH AND CASH EQUIVALENTS AT END OF PERIOD  
(5,088)
1,068
2,594
24,505
27,099
SUPPLEMENTAL DISCLOSURE - NON-CASH ITEMS  
Assets acquired under leases  
21  
668  
413  
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Group has control. The Group controls an entity when the  
Group is exposed to, or has rights to, variable returns from  
its involvement with the entity and has the ability to affect  
those returns through its power over the entity. Subsidiar-  
ies are fully consolidated from the date on which control  
is transferred to the Group. They are deconsolidated from  
the date that control ceases. Intercompany transac-  
tions, balances, income and expenses on transactions  
between Group companies are eliminated. Profits and  
losses resulting from the intercompany transactions that  
are recognized in assets are also eliminated. Accounting  
policies of subsidiaries are consistent with the policies  
adopted by the Group.  
2.3. Foreign currency  
// All resulting exchange differences are recognized in  
NOTES  
Items included in the financial statements of each of the  
Group’s entities are measured using the currency of the  
primary economic environment in which the entity oper-  
ates (‘the functional currency’). The functional currency  
of the Company’s operations in the United States of  
America, Denmark and China are the U.S. dollar, Danish  
kroner, and Chinese Yuan Renminbi, respectively. The  
consolidated financial statements are presented in U.S.  
dollars, which is the Group’s presentation currency.  
other comprehensive income  
1. GENERAL INFORMATION  
2.4. Property and equipment  
Asetek A/S (‘the Company’), and its subsidiaries (together,  
‘Asetek Group’, ‘the Group’ or ‘Asetek’) designs, develops  
and markets liquid cooling solutions used in personal  
computers, servers and data centers. The Group’s core  
products utilize liquid cooling technology to provide im-  
proved performance, acoustics and energy efficiency. The  
Company is based in Aalborg, Denmark with offices in USA,  
China and Taiwan. The Company’s shares trade on the Oslo  
Stock Exchange under the symbol ‘ASETEK’.  
Property and equipment are stated at historical cost  
less accumulated depreciation. Subsequent costs are  
included in the asset’s carrying amount or recognized as  
a separate asset, as appropriate, only when it is probable  
that future economic benefits associated with the item  
will flow to the Group and the cost of the item can be  
measured reliably. The carrying amount of any replaced  
part is derecognized. All other repairs and maintenance  
are charged to the income statement during the financial  
period in which they are incurred.  
Foreign currency transactions are translated into the  
functional currency using the exchange rates prevailing at  
the dates of the transactions. Foreign exchange gains and  
losses resulting from the settlement of such transactions  
and from the translation at year-end exchange rates of  
monetary assets and liabilities denominated in foreign  
currencies are recognized as operating expense in the  
income statement in foreign exchange (loss)/gain.  
2.SUMMARY OF SIGNIFICANT  
ACCOUNTING POLICIES  
The principal accounting policies applied in the prepara-  
tion of these consolidated financial statements are set out  
below. These policies have been consistently applied to all  
the years presented, unless otherwise stated.  
The Group uses the acquisition method of accounting  
to account for business combinations. The consideration  
transferred for the acquisition of a subsidiary is the fair  
values of the assets transferred, the liabilities incurred and  
the equity interests issued by the Group. The consid-  
eration transferred includes the fair value of any asset  
or liability resulting from a contingent consideration  
arrangement. Acquisition-related costs are expensed as  
incurred. Identifiable assets acquired and liabilities and  
contingent liabilities assumed in a business combination  
are measured initially at their fair values at the acquisition  
date. The excess of the total consideration transferred,  
value of non-controlling interests and the fair value of any  
equity investments previously held in the acquiree over  
the total identifiable net assets measured at fair value are  
recognized as goodwill.  
Depreciation is provided over the estimated useful lives of  
the depreciable assets, generally three to five years, using  
the straight-line method. The assets’ useful lives and  
residual values are reviewed, and adjusted if appropriate,  
at the end of each reporting period. Gains and losses on  
disposals are determined by comparing the proceeds  
with the carrying amount and are recognized as other  
income or expense in the consolidated income statement.  
Property and equipment is grouped as follows:  
Group companies that have a functional currency differ-  
ent from the presentation currency are translated into the  
presentation currency as follows:  
2.1. Basis of preparation  
The consolidated financial statements have been pre-  
pared on a historical cost convention, in accordance with  
International Financial Reporting Standards (IFRS) as  
adopted by the European Union (EU) and the supple-  
mentary Danish information requirements for class D  
publicly listed companies.  
// Assets and liabilities for each balance sheet presented are  
translated at the closing rate at the date of that balance  
sheet;  
Group  
Estimated Useful Life  
Leasehold  
improvements  
Lesser of 5 years or lease term  
5 years  
// Income and expenses for each income statement are  
Plant and machinery  
translated at average exchange rates;  
2.2. Consolidation  
Tools, equipment, fixtures 3 to 5 years  
The consolidated financial statements comprise the  
Company and its consolidated subsidiaries. Subsidiaries are  
all entities (including structured entities) over which the  
LIQUID COOLING DONE RIGHT  
34 FINANCIAL STATEMENT S - NOTES  
 
FINANCIAL STATEMENT S - NOTES 35  
2.6. Impairment of non-financial assets  
the income statement, or for certain debt instruments  
that qualify, through other comprehensive income.  
// ‘Financial liabilities at fair value through profit or loss’  
are liabilities entered into that do not meet the hedge  
accounting criteria as defined by IFRS 9. Gains or losses  
on liabilities held for trading are recognized in profit  
and loss. At December 31, 2020, the Company has no  
liabilities measured at fair value through profit and loss.  
2.5. Research and development  
Research costs are expensed as incurred. Costs directly  
attributable to the design and testing of new or improved  
products to be held for sale by the Group are recognized as  
intangible assets within development projects when all of  
the following criteria are met:  
Assets that are subject to amortization are reviewed for  
impairment annually, and whenever events or changes in  
circumstances indicate that the carrying amount may not  
be recoverable. An impairment loss is recognized for the  
amount by which the asset’s carrying amount exceeds  
its recoverable amount. The recoverable amount is the  
higher of 1) an asset’s fair value less costs to sell or 2) its  
value in use. For the purposes of assessing impairment,  
assets are grouped at the lowest levels for which there are  
separately identifiable cash flows (cash-generating units).  
Non-financial assets other than goodwill that previously  
suffered an impairment are reviewed for possible reversal  
of the impairment at each reporting date. Goodwill is  
tested for impairment annually and whenever there is  
indication that the goodwill may be impaired. If an impair-  
ment loss on goodwill is identified, it is recognized as an  
expense and is not reversed in a subsequent period.  
For all years presented, the Group’s financial assets are all  
classified as ‘amortized cost’.  
Impairment of financial assets. For financial assets  
carried at amortized cost, the Group measures at the end  
of each reporting period the expected credit losses to be  
incurred for a financial asset or group of financial assets.  
The Company utilizes historical experience, evaluation of  
possible outcomes, current conditions and forecasts of  
future economic conditions to determine expected credit  
losses. Evidence may include indications that the debtors  
or a group of debtors is experiencing significant financial  
difficulty, default or delinquency in interest or principal  
payments, the probability that they will enter bankruptcy  
or other financial reorganization, and where observable  
data indicate that there is a measurable decrease in the  
estimated future cash flows, such as changes in arrears or  
economic conditions that correlate with defaults.  
// ‘Other liabilities’ – After initial recognition, interest  
bearing debt is subsequently measured at amortized  
cost using the effective interest rate method. Gains  
and losses are recognized in the income statement  
when the liabilities are derecognized as well as through  
the amortization process. The calculation takes into  
account any premium or discount on acquisition and  
includes transaction costs and fees that are an integral  
part of the effective interest rate.  
// It is technically feasible to complete the product  
so that it will be available for sale;  
// management intends to complete the product  
and use or sell it;  
// there is an ability to use or sell the product;  
// it can be demonstrated how the product will generate  
probable future economic benefits;  
// adequate technical, financial and other resources to  
complete the development and to use or sell the product  
are available; and  
Offsetting of financial instruments. Financial assets and  
financial liabilities are offset, and the net amount reported  
in the consolidated balance sheet if, and only if, there is a  
currently enforceable legal right to offset the recognized  
amounts and there is an intention to settle on a net basis,  
or to realize the assets and settle the liabilities simulta-  
neously.  
// the expenditures attributable to the product during its  
2.7. Financial assets  
development can be reliably measured.  
Recognition and Measurement. The Group determines  
the classification of its financial assets at initial recogni-  
tion. Financial assets within the scope of IFRS 9 Financial  
Instruments are classified as follows:  
2.8. Financial liabilities  
Directly attributable costs that are capitalized as part of  
the product include the employee costs associated with  
development. Other development expenditures that do  
not meet these criteria are recognized as expense when  
incurred. Development costs previously recognized as ex-  
pense are not recognized as an asset in a subsequent period.  
Development costs recognized as assets are amortized on  
a straight-line basis over their estimated useful lives, which  
generally range between three and forty-eight months.  
Amortization expense related to capitalized development  
costs is included in research and development expense.  
Recognition and measurement. Financial liabilities  
within the scope of IFRS 9 are classified as financial  
liabilities at fair value through profit or loss, or other  
liabilities. The Group determines the classification of its  
financial liabilities at initial recognition. Financial liabilities  
are recognized initially at fair value less, in the case of  
other liabilities, directly attributable transaction costs.  
The measurement of financial liabilities depends on their  
classification as follows:  
// ‘Amortized cost’ are financial assets representing con-  
tractual cash flows held for collection, where such cash  
flows solely represent payment of principal and interest.  
// ‘Fair value’. All other financial assets, representing other  
debt and equity instruments that do not meet the ‘am-  
ortized cost’ criteria, are recognized at fair value. All fair  
value movements on financial assets are taken through  
LIQUID COOLING DONE RIGHT  
 
2.13. Share-based payments  
2.14. Current and deferred income tax  
Deferred income tax assets are recognized only to the  
extent that it is probable that future taxable profit will be  
available against which the temporary differences can be  
utilized.  
2.9. Inventories  
Inventories are stated at the lower of actual cost or net  
realizable value. Cost is determined using the first-in,  
first-out (FIFO) method. Net realizable value is the esti-  
mated selling price in the ordinary course of business less  
estimated costs necessary to make the sale. Adjustments  
to reduce the cost of inventory to its net realizable value, if  
required, are made for estimated excess, obsolescence, or  
impaired balances.  
The Company issues options (or warrants) that allow  
management and key personnel to acquire shares in  
the Company. Through equity-settled, share-based  
compensation plans, the Company receives services from  
employees as consideration for the granting of equity op-  
tions to purchase shares in the Company at a fixed exercise  
price. The fair value of the employee services received in  
exchange for the grant of the options is recognized as an  
expense. The total amount to be expensed is determined  
by reference to the fair value of the options granted,  
excluding the impact of any non-market service and  
performance vesting conditions. The grant date fair value  
of options granted is recognized as an employee expense  
with a corresponding increase in equity, over the period  
that the employees become unconditionally entitled to the  
options (vesting period). The fair value of the options grant-  
ed is measured using the Black-Scholes model, taking into  
account the terms and conditions as set forth in the share  
option program. Measurement inputs include share price  
on measurement date, exercise price of the instrument,  
expected volatility, weighted average expected life of the  
instruments (based on historical experience and general  
option holder behavior), expected dividends, and the risk-  
free interest rate. Service and non-market performance  
conditions attached to the transactions are not taken into  
account in determining fair value. At each reporting date,  
the Company revises its estimates of the number of options  
that are expected to vest based on the non-market vesting  
conditions. The impact of the revision to original estimates,  
if any, is recognized in the Statement of Comprehensive  
Income, with a corresponding adjustment to equity.  
The tax expense for the period comprises current and  
deferred tax. Tax is recognized in the income statement,  
except to the extent that it relates to items recognized in  
other comprehensive income or directly in equity. In this  
case, the tax is also recognized in other comprehensive  
income or directly in equity, respectively.  
Deferred income tax assets and liabilities are offset when  
there is a legally enforceable right to offset current tax  
assets against current tax liabilities and when the deferred  
income tax assets and liabilities relate to income taxes  
levied by the same taxation authority on either the same  
taxable entity or different taxable entities where there is  
an intention to settle the balances on a net basis.  
The current income tax expense is calculated on the basis  
of the tax laws enacted or substantively enacted at the  
balance sheet date in the countries where the Company  
and its subsidiaries operate and generate taxable income.  
Management periodically evaluates positions taken in  
tax returns with respect to situations in which applicable  
tax regulation is subject to interpretation. Management  
establishes provisions where appropriate on the basis of  
amounts expected to be paid to the tax authorities.  
2.10. Trade receivables  
Trade receivables are amounts due from customers for  
product sold in the ordinary course of business. Trade  
receivables are recognized initially at fair value and sub-  
sequently measured at amortized cost using the effective  
interest method, less any provision for expected credit  
losses. If collection is expected in one year or less, trade  
receivables are classified as current assets. Expected  
credit losses are determined utilizing the simplified ap-  
proach allowed under IFRS 9 Financial Instruments.  
2.15. Revenue recognition and other income  
Revenue represents sale of the Group’s products to  
customers which are principally resellers and original  
equipment manufacturers. Revenue is measured at the-  
fair value of the consideration received or receivable, and  
represents amounts receivable for goods supplied, stated  
net of discounts, sales tax, returns and after eliminating  
sales within the Group.  
Deferred income tax is recognized, using the liability  
method, on temporary differences arising between the tax  
bases of assets and liabilities and their carrying amounts in  
the consolidated financial statements. However, deferred  
tax liabilities are not recognized if they arise from the  
initial recognition of goodwill; deferred income tax is not  
accounted for if it arises from initial recognition of an asset  
or liability in a transaction other than a business combi-  
nation that at the time of the transaction affects neither  
accounting nor taxable profit or loss. Deferred income tax  
is determined using tax rates (and laws) that have been  
enacted or substantively enacted by the balance sheet  
date and are expected to apply when the related deferred  
income tax asset is realized or the deferred income tax  
liability is settled.  
2.11. Cash and cash equivalents  
The Group’s revenue is predominantly comprised of  
shipment of Asetek products in fulfillment of customer  
purchase orders. As such, the Company recognizes  
revenue when a valid contract is in place and control of  
the goods have transferred to the customer. Customer  
purchase orders and/or contracts are used as evidence of  
an arrangement. Delivery occurs and control of the goods  
is deemed to transfer when products are shipped to the  
specified location and the risks of obsolescence and loss  
have been transferred to the customer. For certain cus-  
tomers with vendor-managed inventory, delivery does  
Cash and cash equivalents includes cash on hand,  
deposits with banks, overdrafts and other short-term  
highly liquid investments with original maturities of three  
months or less.  
2.12. Share capital  
Ordinary shares are classified as equity. Incremental costs  
directly attributable to the issue of new ordinary shares  
or options are shown in equity as a deduction, net of tax,  
from the proceeds.  
LIQUID COOLING DONE RIGHT  
36 FINANCIAL STATEMENT S - NOTES  
 
Each lease payment is allocated between the liability and  
finance cost. The finance cost is charged to profit or loss  
over the lease period to reflect a constant periodic rate of  
interest on the remaining balance of the liability for each  
period.  
2.18. Contingent liabilities  
Geographical segmentation. Each of the Group’s offices  
in its three principal geographies fulfills a particular func-  
tion that serves the Asetek Group as a whole. The majority  
of costs incurred in each of the geographies are generally  
incurred for the benefit of the entire Group and not to  
generate revenue in the respective geography.  
not occur until product is acquired by the customer from  
the vendor-managed inventory location. The Company  
assesses collectability based primarily on the creditwor-  
thiness of the customer as determined by credit checks  
and customer payment history. Customers do not gener-  
ally have a right of return.  
Contingent liabilities are not recognized in the financial  
statements. Significant contingent liabilities are disclosed,  
with the exception of contingent liabilities where the  
probability of the liability occurring is remote.  
From January 1, 2019, the associated right-of-use assets  
for the leases were measured at the amount equal to the  
lease liability, adjusted by the amount of any prepaid or  
accrued lease payments relating to that lease recognized  
in the balance sheet as of December 31, 2018. Leased  
assets are recognized as a right-of-use asset at the date  
at which the leased asset is available for use by the Group,  
initially measured on a present value basis and included in  
Property and equipment on the balance sheet.  
2.19. Segment reporting  
As a result, the financial results of the Group are not  
divided between multiple geographical segments for key  
operating decision-making. Revenue and assets by geog-  
raphy is measured and reported in Note 4, Geographical  
information.  
Income received as a result of patent litigation settlement  
is recorded as other income as an offset to operating ex-  
pense in the period the award is granted. Estimated costs  
for future product returns under warranty are charged to  
cost of sales and included in accrued liabilities.  
Business segmentation. The Group is reporting on two  
segments, Gaming and Enthusiast, and Data center.  
The two segments are identified by their specific sets of  
products and specific sets of customers. The splitting of  
operating expenses between segments is based on the  
Company’s best judgment and done by using the Com-  
pany’s employee/project time tracking system to capture  
total hours charged by project code. Operating expenses  
that are not divisible by nature (rent, telecommunication  
expenses, etc.) have been split according to actual time  
spent on the two businesses, and the Company’s best  
estimate for attribution. Costs incurred for intellectual  
property defense and headquarters administration have  
been classified separately as headquarters costs and  
excluded from segment operating expenses. The CEO  
is the Group’s chief operating decision-maker. The CEO  
assesses the performance of the Group principally on  
measures of revenue and adjusted EBITDA.  
2.20. Cash flow statement  
The cash flow statement is prepared using the indirect  
method.  
2.16. Leases  
On January 1, 2019, the Group adopted IFRS 16 Leases on  
a modified retrospective basis without restatement of the  
prior year, as permitted under the standard. Upon adoption  
of IFRS 16, Asetek recognized lease liabilities for leases  
which had previously been classified as operating leases.  
These liabilities were measured at the present value of the  
remaining lease payments, discounted using the lessee’s  
incremental borrowing rate. Lease liabilities include the  
net present value of: fixed lease payments, amounts  
expected to be payable under residual value guarantees,  
any purchase options that are reasonably expected to be  
exercised, and any penalties for termination reflected in  
the lease term. The corresponding rental obligations, net  
of finance charges, are included in other long-term debt.  
Amounts due within one year are included in short-term  
debt.  
2.17. Provisions  
2.21. Critical accounting estimates and judgments  
The preparation of financial statements in conformity  
with IFRS requires management to make estimates and  
assumptions that affect the amounts reported in the  
financial statements and accompanying notes. Actual  
results could differ from those estimates. Areas where  
significant judgment has been applied are:  
A provision is recognized when the Company has a  
present legal or constructive obligation as a result of  
past events, it is probable that an outflow of resources  
will be required to settle the obligation, and the amount  
has been reliably estimated. If the impact of time value  
is significant, the provision is calculated by discounting  
anticipated future cash flow using a discount rate before  
tax that reflects the market’s pricing of the present value  
of money and, if relevant, risks specifically associated with  
the obligation. Provisions are reviewed at each balance  
sheet date and adjusted to reflect the current best  
estimate.  
// Valuation of deferred tax assets: deferred income tax  
assets are recognized to the extent that the realization  
of the tax benefit to offset future tax liabilities is con-  
sidered to be probable. In prior years, the Company  
incurred net operating losses which are eligible to offset  
future taxable income. In 2020, the Company generat-  
ed net income and therefore recorded deferred  
LIQUID COOLING DONE RIGHT  
FINANCIAL STATEMENT S - NOTES 37  
 
LIQUID COOLING DONE RIGHT  
38 FINANCIAL STATEMENT S - NOTES  
tax assets representing the estimated amount of net  
operating losses that will be utilized to offset future  
taxable income, based on income projections for the  
next five years. In future periods, management will  
continue to assess the probability of realization of the  
assets’ value and adjust the valuation in accordance  
with IAS 12.  
of the board of directors. In the year ended December  
31, 2020, the Company made matching contributions  
totalling $21,000 (none in 2019).  
2.23 ESEF Regulation  
The Company's Annual Report is prepared, in all material  
respects, in compliance with the Commission Delegated  
Regulation (EU) 2019/815 on the European Single Elec-  
tronic Format (ESEF Regulation) which includes require-  
ments related to the preparation of the Annual Report in  
XHTML format and iXBRL tagging of the Consolidated  
Financial Statements.  
// Capitalization of development costs: the Group’s  
business includes a significant element of research and  
development activity. Under IAS 38, there is a require-  
ment to capitalize and amortize development spend to  
match costs to expected benefits from projects deemed  
to be commercially viable. The application of this policy  
involves the ongoing consideration by management  
of the forecasted economic benefit from such projects  
compared to the level of capitalized costs, together  
with the selection of amortization periods appropriate  
to the life of the associated revenue from the product.  
If customer demand for products or the useful lives of  
products vary from management estimates, impairment  
charges on intangibles could increase.  
2.24. Changes in accounting policy and disclosures  
Applied new standards and amendments included  
in Annual Report for 2020. Certain new standards,  
amendments to standards, and annual improvements  
to standards and interpretations are effective for annual  
periods beginning after January 1, 2020 and have been  
applied in preparing these consolidated financial state-  
ments. These applications did not materially impact the  
Group’s consolidated financial statements.  
2.22. Defined contribution plan  
In 2008, the Company established a defined contribu-  
tion savings plan (the “Plan”) in the U.S. that meets the  
requirements under Section 401(k) of the U.S. Internal  
Revenue Code. This Plan covers substantially all U.S.  
employees who meet the minimum age and service  
requirements and allows participants to defer a portion of  
their annual compensation on a pre-tax basis. Company  
contributions to the Plan may be made at the discretion  
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LIQUID COOLING DONE RIGHT  
39  
RELIABILITY AND QUALITY AS  
GOOD AS IN THE SPACE INDUSTRY  
BY TAKING A PROACTIVE APPROACH RATHER  
THAN A REACTIVE ONE, ASETEK’S QUALITY  
ASSURANCE HAS RAISED THE RELIABILITY OF  
LIQUID COOLING PRODUCTS TO A LEVEL CLOSE  
TO PERFECTION.  
But such a degree of perfection is a necessity if Asetek  
wants to be the world’s leading manufacturer in the rapidly  
growing market in water cooling for PCs, servers and data  
centers – and to deliver, as Asetek does, to world-renowned  
OEM’s such as HP, Dell, Intel, Fujitsu and many others.  
Above all, it raises our credibility with partners who have  
to be able to guarantee to the end-customer that their PC  
or server isn’t going to fail, for example.”  
TWO DIFFERENT CHALLENGES  
“Asetek’s products need reliability matching the re-  
quirements set in the space industry, and now they have  
achieved it. For us, it’s just not enough for the unit to work  
almost all the time or only cost a little now and then. Many  
of our products actually have to work 24/7, all year round,  
for at least 10 years running. It’s a question of credibility  
and money,” explains Asetek Vice President of Global  
Quality Magnus Hakanen. The 51-year-old Swedish civil  
engineer started working in quality assurance 20 years  
ago with an automotive parts supplier to Volvo, and went  
on to accumulate extensive know-how from similar quality  
assurance work with international players such as Vestas  
and Grundfos, before coming to Asetek 3 years ago.  
Hakanen describes slightly different challenges relating  
to the two main areas of on-processor liquid cooling that  
Asetek works in: the well-established PC market, and the  
growing data center market, where more and more peo-  
ple are noticing the energy-saving and climate-friendly  
alternative offered by Asetek. Data centers sometimes  
total thousands of servers that could cool more efficiently  
with direct on-processor liquid cooling than with tradi-  
tional air cooling for the same power consumption. Fur-  
thermore, Asetek’s technology also makes climate-friend-  
ly use of the enormous total quantity of residual heat, for  
example through circular reuse by connecting to local  
district heating networks.  
ALL EMPLOYEES HAVE A RESPONSIBILITY  
Magnus heads the quality assurance department at  
Asetek’s headquarters. He also leads Asetek’s quality team  
in China which has an equivalent role in respect of Asetek’s  
carefully selected 25-30 sub-suppliers in Asia.  
But his most important goal, says Hakanen, has been to  
get all of Asetek’s dedicated employees to feel a strong  
responsibility for quality and prioritise it proactively, not re-  
actively. Now, from the time the engineers create drawings  
and calculations for future products on their computers  
through the design, development and manufacturing, the  
entire workflow is geared towards foreseeing potential  
problems and risks and mitigating them long before the  
products have arrived anywhere near mass production or  
even prototype status.  
And Magnus Hakanen has a statistical basis for his re-  
markable goals and vision. He is happy to present graphs  
and figures on his screen showing, from every imaginable  
angle, how Asetek’s margin of error has moved in recent  
years from what he describes as “really good” to “space  
industry super good.”  
As Magnus Hakanen says: “Of course, it saves a lot of mon-  
ey when the product is built just right the first time.  
 
LIQUID COOLING DONE RIGHT  
Standard  
Content  
Effective date  
EU ENDORSED AS OF DECEMBER 31, 2020  
NOT ENDORSED BY EU AS OF DECEMBER 31, 2020  
Amendments to IFRS 3 Business  
Combinations  
The amendment assists entities in determining whether a transaction should be accounted for as a  
business combination or as an asset acquisition.  
1-Jan-2020  
1-Jan-2021  
Amendments to IFRS 9, IAS 39, IFRS 7,  
IFRS 4 and IFRS 16  
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Amendments to IFRS 9, IAS 39, IFRS 7:  
These amendments address issues that might affect financial reporting after the reform of an interest  
rate benchmark, including its replacement with alternative benchmark rates.  
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The amendments relate to the issues affecting financial reporting in the periods before replacement of  
an existing interest rate benchmark with an alternative interest rate.  
1-Jan-2020  
Amendments to IFRS 3 Business Combina-  
tions; IAS 16 Property, Plant and Equipment;  
IAS 37 Provisions, Contingent Liabilities and  
Contingent Assets; Annual Improvements  
2018-2020  
The small amendments will: update a reference in IFRS 3 without changing accounting requirements;  
require proceeds received from sale when preparing PP&E for its intended use to be recorded in profit  
and loss instead of as a reduction to cost; specify which costs a company includes when assessing  
whether a contract will be loss-making; make minor amendments to IFRS 1, IFRS 9, IAS 41 and IFRS 16.  
1-Jan-2022  
1-Jan-2023  
Amendments to IAS 1 Presentation of  
Financial Statements: Classification of  
Liabilities as Current or Non-current and  
Classification of Liabilities as Current or  
Non-current – Deferral  
The amendments specify that the conditions which exist at the end of the reporting period are those  
which will be used to determine if a right to defer settlement of a liability exists. Management  
expectations about events after the balance sheet date are not relevant to the determination.  
40 FINANCIAL STATEMENT S - NOTES  
New standards and amendments not applied in the  
Annual Report for 2020. There are some new standards  
and amendments to standards and interpretations that  
have not been applied in preparing these consolidated  
financial statements. None of these is expected to have a  
significant effect on the consolidated financial statements  
of the Group:  
 
LIQUID COOLING DONE RIGHT  
Liquidity risk. The Group incurred losses from operations  
and negative cash flows from operations from inception  
through 2015; positive cash flows and operating income  
were first generated in 2016 and have continued through  
2020.  
Asetek will continue to invest its capital principally in the  
development and marketing of its products. In 2016, the  
Board of Directors implemented a policy under which it  
may declare and distribute dividends to shareholders.  
At the Annual General Meeting in April 2020, the Board  
was authorized to acquire the Company’s own shares  
and subsequently initiated a share buyback program. In  
2020, the Company repurchased a total of 844 thousand  
common shares on the open market for a total cost of  
$6.4 million. When considering payment of dividends or  
Asetek share purchases, the Board takes into consid-  
eration the Company’s growth plans, international  
tax implications, liquidity requirements and necessary  
financial flexibility.  
The following are contractual maturities of financial  
liabilities, including estimated interest payments on an  
undiscounted basis.  
3.RISK MANAGEMENT AND DEBT  
The Group’s activities expose it to a variety of risks: liquidi-  
ty risk, market risk (including foreign exchange risk and  
interest rate risk) and credit risk. The primary responsi-  
bility for Asetek’s risk management and internal controls  
in relation to the financial reporting process rests with  
executive management.  
To facilitate ongoing operations, Asetek has secured  
bank lines of credit and trade receivables financing. The  
Group’s corporate finance team monitors risk of a short-  
age of funds through regular updates and analysis of cash  
flow projections and maturities of financial assets and  
liabilities. The finance teams also review liquidity, balance  
sheet ratios (such as days’ sales outstanding, inventory  
turns) and other metrics on a regular basis to ensure  
compliance both on a short- and long-term basis.  
Asetek’s internal control procedures are integrated in  
the accounting and reporting systems and include pro-  
cedures with respect to review, authorization, approval  
and reconciliation. All entities in the Asetek Group report  
financial and operational data to the executive office on a  
monthly basis, including commentary regarding financial  
and business development. Based on this reporting,  
the Group’s financial statements are consolidated and  
reported to executive management. Management is in  
charge of ongoing efficient risk management, including  
the identification of material risks, the development of  
systems for risk management, and that significant risks  
are routinely reported to the board of directors.  
The need for an internal audit function is considered reg-  
ularly by the Audit Committee. However, due to the size  
of the Company and the established control activities,  
the Audit Committee so far considers it unnecessary to  
establish an independent internal executive audit board.  
As part of risk management, Asetek has a whistle-blower  
function for expedient and confidential notification of  
possible or suspected wrongdoing.  
DEBT MATURITIES  
AS OF DECEMBER 31, 2020  
(USD 000’s)  
On  
Demand  
Less than 3  
months  
3 to 12  
months  
1 to 5  
years  
Total  
Line of credit  
Leases  
(536)  
-
(247)  
-
(837)  
-
(2,639)  
-
(536)  
(3,723)  
-
-
Trade payables and accrued liabilities  
(18,927)  
(19,174)  
(812)  
(19,739)  
(23,998)  
(536)  
(1,649)  
(2,639)  
AS OF DECEMBER 31, 2019  
(USD 000’s)  
On  
Demand  
Less than 3  
months  
3 to 12  
months  
1 to 5  
years  
Total  
Line of credit  
(746)  
-
(211)  
-
(619)  
-
(2,903)  
-
(746)  
(3,733)  
Finance leases  
-
-
Trade payables and accrued liabilities  
(10,048)  
(10,259)  
(757)  
(10,805)  
(15,284)  
(746)  
(1,376)  
(2,903)  
FINANCIAL STATEMENT S - NOTES 41  
 
LIQUID COOLING DONE RIGHT  
Market risk factors. The Group’s current principal  
financial liabilities consist of short-term debt on revolving  
lines of credit and amounts owed on facilities and equip-  
ment leases. The Group’s financial assets mainly comprise  
trade receivables, cash and deposits. The Group’s  
operations are exposed to market risks, principally foreign  
exchange risk and interest rate risk.  
(b) Interest rate risk. As of December 31, 2020, Asetek  
had the following debt outstanding that is subject to  
interest rate risk:  
Trade receivables that are deemed uncollectible are  
charged to expense with an offsetting allowance record-  
ed against the trade receivable. Historically, bad debt  
expense has not been significant. Certain customers have  
accounted for a significant portion of the Company’s  
revenues in the years presented, as follows. In 2020, the  
Company’s two largest customers accounted for 41%  
and 14% of revenue (31% and 27% in 2019), respectively.  
The Company mitigates risk with its largest customer by  
requiring two remittances per month as well as frequent  
monitoring and communicating regarding invoices  
coming due.  
4.GEOGRAPHICAL INFORMATION  
The Group operates internationally in several geographi-  
cal areas, principally in Asia, Europe and the Americas.
// Line of credit with Sydbank – 5.0 million Danish kroner  
revolving line of credit available to Asetek A/S. Total line  
in USD is approximately $825 thousand, of which $536  
thousand was outstanding at December 31, 2020. The  
line carries interest at the Danish CIBOR 3 rate plus 2.25  
percentage points, which in total was 2.03% at December  
31, 2020. Based on the line’s revolving, short-term nature,  
interest rate risk is not significant.  
The following table presents the Group’s revenue and  
assets in each of the principal geographical areas:  
(a) Foreign exchange risk. With few exceptions, the  
Group’s inventory purchase and sale transactions are  
denominated in U.S. dollars. The Group operates inter-  
nationally and is exposed to foreign exchange risk arising  
from currency exposures, principally with respect to the  
Danish kroner. Foreign exchange risk arises from operat-  
ing results and net assets associated with Denmark-based  
operations where the Danish krone is the functional  
currency. Translation of the Denmark entity balance sheet  
accounts from Danish kroner to U.S. dollars affect the  
equity balances of the Group. The Company’s Denmark  
entity has a revolving line of credit available totaling  
5.0 million Danish kroner ($0.8 million) as of December  
31, 2020. The Group does not enter into derivatives or  
other hedging transactions to manage foreign exchange  
risk. Management mitigates this exposure through timely  
settlement of intercompany operating liabilities.  
Capital and debt management. To date the Company’s  
primary focus has been to support its product devel-  
opment initiatives, maintain liquidity through use of  
financing alternatives, and maximize shareholder value.  
The Group manages its capital and debt structure with  
consideration of economic conditions. In 2013 and 2015,  
the Company raised capital through the offering of its  
common stock on the Oslo Stock Exchange. With regard  
to future capital needs, the Company will continue to  
consider both equity and debt financing strategies.  
At December 31, 2020 two customers represented  
47%and 17% of outstanding trade receivables (38% and  
15% at December 31, 2019), respectively. The reserve for  
uncollectible trade accounts was $23,000 at December  
31, 2020 and $48,000 at December 31, 2019. The aged  
trade receivables and bad debt reserve balances for all  
years presented are provided in Note 17.  
The maximum exposure to credit risk at the reporting  
dates was:dates was:  
Credit risk factors. Credit risk refers to the risk that a  
counterparty will default on its contractual obligations  
resulting in financial loss to the Group. The Group is  
exposed to credit risk primarily through trade receivables  
and cash deposits. Management mitigates credit risk  
through standard review of customer credit-worthiness  
and maintaining its liquid assets primarily with Wells Fargo  
Bank in the U.S. and Sydbank in Denmark. The carrying  
amount of the financial assets represents the maximum  
credit exposure.  
For the purpose of the above presentation, the informa-  
tion pertaining to revenue and current assets is calculated  
based on the location of the customers, whereas infor-  
mation pertaining to non-current assets is based on the  
physical location of the assets. The information pertaining  
to current assets is calculated as a summation of assets  
such as trade receivables and finished goods inventories  
reasonably attributable to the specific geographical area.  
The ending exchange rate at December 31, 2020 was  
6.06 Danish kroner to one U.S. dollar (6.68 to the U.S. dollar  
at December 31, 2019). The effect of a 10% strengthening  
weakening) of the Danish kroner against the U.S. dollar  
for the reporting period would have resulted in an increase  
(decrease) in pre-tax income for fiscal year 2020 of  
$1,538,000 (in 2019, increase of the pre-tax income of  
$926,000).  
(USD 000’s)  
Revenue  
2019  
Current Non-current  
assets  
12,435  
4,158  
assets  
Asia  
47,206  
4,716  
38  
Americas  
Europe  
TOTAL  
882  
2,412  
23,649  
40,242  
12,943  
13,863  
54,334  
(USD 000’s)  
2020  
27,099  
24,471  
605  
2019  
24,505  
14,080  
307  
Cash and cash equivalents  
Trade receivables and other  
Other assets  
MAXIMUM CREDIT EXPOSURE  
52,175  
38,892  
(USD 000’s)  
Revenue  
2020  
Current Non-current  
assets  
23,074  
10,091  
20,936  
54,101  
assets  
Asia  
62,383  
5,440  
4,927  
96  
Americas  
Europe  
TOTAL  
2,035  
15,161  
17,292  
72,750  
42 FINANCIAL STATEMENT S - NOTES  
 
LIQUID COOLING DONE RIGHT  
5. SEGMENT INFORMATION  
The Company reports on two segments, Gaming and  
Enthusiast and Data center. The two segments are iden-  
tified by their specific sets of products and specific sets of  
customers. The CEO is the Group’s chief operating deci-  
sion-maker. The CEO assesses the performance of each  
segment principally on measures of revenue and adjusted  
EBITDA. The following tables represent the results by  
operating segment in 2020 and 2019. Disaggregation of  
revenue is also presented for the major markets within  
each segment.  
(USD 000’s)  
Revenue  
2020  
278  
2019  
208  
Denmark  
Hong Kong  
Taiwan  
3,083  
46,610  
5,181  
16,970  
21,817  
4,527  
USA  
All others  
TOTAL  
17,598  
72,750  
10,812  
54,334  
Segment operating results  
- years ended December 31,  
2020  
2019  
(USD 000’s)  
Not  
allocable to  
divisions  
Not  
allocable to  
divisions  
Gaming and  
Enthusiast  
Gaming and  
Enthusiast  
Datacenter  
Total  
Datacenter  
Total  
Revenue  
64,719  
21,405  
8,031  
-
72,750  
15,600  
51,791  
2,543  
-
54,334  
6,161  
Adjusted EBITDA  
(1,205)  
(4,600)  
14,606  
(4,284)  
(4,161)  
FINANCIAL STATEMENT S - NOTES 43  
(USD 000’s)  
Non-current assets  
2020  
15,161  
2,035  
96  
2019  
Denmark  
USA  
12,943  
882  
China  
38  
TOTAL  
17,292  
13,863  
Reconciliation of Adjusted EBITDA to Income before tax  
(USD 000's)  
2020  
21,405  
(1,205)  
(4.,600)  
(918)  
2019  
14,606  
(4,284)  
(4,161)  
(1,056)  
(4,057)  
406  
EBITDA, adjusted - Gaming and Enthusiast  
EBITDA, adjusted - Data center  
Headquarters costs  
Share based compensation  
Depreciation and amortization  
Total financial income (expenses)  
Consolidated income before tax  
(3,754)  
(1,502)  
9,426  
1,454  
Disaggregation of revenue  
(USD 000's)  
2020  
2019  
Gaming and Enthusiast:  
Enthusiast/DIY  
54,889  
9,830  
43,312  
8,479  
Gaming/Performance PC  
Data center market:  
OEM  
8,031  
-
2,233  
310  
Government  
TOTAL REVENUE  
72,750 54,334  
 
LIQUID COOLING DONE RIGHT  
The figures listed include incentive based compensation  
for management and staff. Incentive based compensation  
is based on a combination of quarterly cash-based re-  
wards and periodic grants of options (or warrants) to buy  
the Company’s common shares. The above remuneration  
for Officers includes $76,000 and $72,000 in pension  
payments in 2020 and 2019, respectively. The bonus plan  
for the CEO is approved by the Board of Directors at the  
beginning of the year and the bonus payments for the  
CEO and the upper management are reviewed by the  
Board of Directors on an annual basis. All bonus plans are  
structured to include an absolute dollar cap.  
6. SALARY COSTS AND  
REMUNERATIONS  
7. SHARE BASED PAYMENT  
Asetek’s Equity Incentive program is a share compensa-  
tion program where the employees and other parties that  
deliver services to the Group have been granted share  
options (or warrants). The options, if vested and executed,  
will be settled in common shares of the Company.  
The options are granted at the time of employment and,  
at the discretion of the Board of Directors, under other  
circumstances. The options are granted with exercise  
prices equaling the fair market value of the underlying se-  
curity. The exercise prices of option grants are determined  
based on the closing market price of the shares on the  
day of the grant. Share-based compensation expense was  
$918,000 and $1,056,000 for the years ended December  
31, 2020 and 2019, respectively.  
The Company’s CEO has an agreement of twelve  
months’ severance pay in case of termination or termina-  
tion in connection with change of control. The Compa-  
ny’s CFO has an agreement of seven months’ severance  
pay in case of termination or termination in connection  
with change of control. Except for the Company’s CEO  
and CFO and other members of the executive group, no  
member of the administrative, management or supervi-  
sory bodies has contracts with the Company or any of its  
subsidiaries providing for benefits upon termination of  
employment.  
The program was adopted by the Board of Directors in  
2008 and has the following purpose:  
// To attract and retain the best available personnel  
for positions of substantial responsibility;  
// To provide additional incentive to employees,  
directors and consultants, and  
// To promote the success of the Company’s business.  
As of December 31, 2020, there is a total of 2,358,141  
common shares authorized under the Plan.  
The Company’s shares trade on the Oslo Stock Exchange,  
at prices denominated in Norwegian krone (NOK).  
The exchange rate at December 31, 2020 of NOK to USD  
was 8.59.  
André S. Eriksen Peter D. Madsen  
Common shares  
334,816  
96,406  
61,750  
42,075  
26.500  
Options at NOK 24.70 106,800  
Options at NOK 38.33  
Options at NOK 46.30  
Warrants at:  
68,500  
53,300  
NOK 10.50  
-
50,875  
49,837  
10,313  
44,215  
NOK 19.50  
-
-
NOK 40.10  
NOK 76.25  
132,981  
TOTAL SHARES  
CONTROLLED  
696,397  
381,971  
Share Ownership of Officers at December 31, 2020:  
(USD 000’s)  
2020  
10,841  
433  
2019  
9,268  
382  
Salaries  
Retirement fund contributions  
Social cost  
1,279  
918  
1,188  
1,056  
117  
Share based payment  
Other expenses  
(40)  
TOTAL PERSONNEL EXPENSES  
BEFORE CAPITALIZATION  
13,431  
12,011  
Capitalized as development cost  
(958) (1,000)  
TOTAL PERSONNEL EXPENSES  
IN STATEMENT OF INCOME  
12,473  
110  
11,011  
97  
AVERAGE NUMBER  
OF EMPLOYEES  
(USD 000’s)  
2020  
3,476  
9,955  
2019  
2,768  
9,243  
Research and development  
Selling, general and administrative  
Total personnel expenses  
before capitalization  
13,431  
12,011  
The staff costs are specified as follows:  
Compensation to the Board of Directors, Officers and Other Executives*  
Other  
Other  
(USD 000’s)  
Salary  
Directors Officers  
Executives  
Total  
1,805  
1,196  
559  
Directors Officers Executives  
Total  
1,938  
566  
-
-
868  
501  
937  
695  
-
-
837  
231  
1,101  
335  
395  
84  
Bonus  
Share based  
Other  
-
285  
181  
274  
-
314  
709  
217  
217  
150  
548  
201  
201  
239  
1,621  
524  
TOTAL  
1,835  
2,056  
4,108  
1,915  
3,737  
2020  
2019  
Group  
Options Granted  
-
Board of directors  
Officers  
110,575  
Other executives  
Other employees  
TOTAL GRANTED  
73,962  
135,763  
320,300  
Options granted in 2020:  
4 4 FINANCIAL STATEMENT S - NOTES  
*Other Executives includes the Chief Operating Officer and other members of the executive team who are leaders of  
the key functions (Engineering, Sales & Marketing, Operations)  
 
LIQUID COOLING DONE RIGHT  
In April 2020, the Company granted 320,300 options  
with exercise prices of NOK38.33 per share. In April 2019,  
the Company granted 494,900 options with exercise  
prices of NOK24.70 per share. Movements in the number  
of share options outstanding and their related weighted  
average exercise price are as follows:  
Total outstanding options and warrants represents 8.3% of  
total common shares issued at December 31, 2020 (10.1% in  
2019).  
Weighted Average  
Weighted Average  
Exercise - Price (NOK)  
Exercise - Price (NOK)  
Activity for exercise prices of: NOK 33.90 to NOK 113.00  
Outstanding on January 1  
2020  
1,322,232  
320,300  
(425,222)  
(13,195)  
Price  
58.08  
38.33  
38.61  
57.79  
59.71  
67.81  
2019  
1,369,938  
-
Price  
58.70  
-
Options/warrants granted  
Options/warrants exercised  
-
-
Options/warrants forfeited  
(47,706)  
1,322,232  
921,427  
67.23  
58.08  
56.06  
OUTSTANDING ON DECEMBER 31  
EXERCISABLE ON DECEMBER 31  
1,204,115  
756,790  
Weighted Average  
Weighted Average  
Exercise - Price (NOK)  
Exercise - Price (NOK)  
Activity for exercise prices of: NOK 10.60 to NOK 24.70  
Outstanding on January 1  
2020  
1,303,830  
-
Price  
18.77  
-
2019  
884,283  
494,900  
(64,461)  
Price  
14.68  
24.70  
5.41  
Options/warrants granted  
Options/warrants exercised  
(308,408)  
(6,800)  
988,622  
664,037  
15.98  
24.70  
19.60  
17.11  
Options/warrants forfeited  
(10,892)  
1,303,830  
814,195  
19.16  
18.77  
15.43  
OUTSTANDING ON DECEMBER 31  
EXERCISABLE ON DECEMBER 31  
The weighted average market price per share on the date of exercise for the above shares was NOK 68.73 in 2020 and NOK 32.71 in 2019  
Number of shares  
Exercise price per share  
NOK 10.60  
NOK 19.50  
NOK 24.70  
NOK 33.90  
NOK 36.50  
NOK 38.33  
NOK 40.10  
NOK 46.30  
NOK 76.25  
NOK 113.00  
TOTAL  
2020  
263,253  
255,504  
469,865  
-
2019  
395,973  
412,957  
494,900  
7,170  
-
333,295  
-
313,617  
48,800  
328,128  
416,571  
96,999  
2,192,737  
84,550  
366,569  
433,649  
96,999  
2,626,062  
FINANCIAL STATEMENT S - NOTES 45  
The composition of options and warrants out-  
standing at December 31 is as follows:  
The weighted average market price per share on the date of exercise for the above shares was NOK 71.27 in 2020  
 
LIQUID COOLING DONE RIGHT  
The Company calculated the fair value of each option award  
on the date of grant using the Black-Scholes option pricing  
model, which requires subjective assumptions, including  
future stock price volatility and expected time to exercise.  
The expected volatility was based on the historical volatility of  
the Company’s stock price. The weighted average remaining  
contractual term of options outstanding is 4.1 years. The  
options granted in April 2020 have an estimated total value of  
$0.5 million. The options granted in September 2019 have an  
estimated total value of $0.6 million. The following weighted  
average assumptions were used for the period indicated.  
8. EXPENSES BY NATURE  
(USD 000’s)  
Inventories recognized as cost of sales  
Note  
18  
2020  
38,556  
13,431  
3,754  
2019  
31,329  
12,011  
4,057  
4,087  
782  
Personnel expenses  
6
Depreciation and amortization  
Legal, patent, consultants and auditor  
Facilities and infrastructure  
4,619  
1,221  
Other expenses  
2,256  
3,214  
TOTAL OPERATING EXPENSES BEFORE CAPITALIZATION  
Less: capitalized costs for development projects  
TOTAL EXPENSES  
63,837  
(2,015)  
61,822  
55,480  
(1,441)  
54,039  
14  
Depreciation and amortization expense by classification on the income statement is as follows:  
(USD 000’s)  
2020  
2019  
Depreciation and amortization included in:  
Research and development  
Selling, general and administrative  
TOTAL  
1,529  
2,225  
3,754  
1,746  
2,311  
4,057  
46 FINANCIAL STATEMENT S - NOTES  
Total operating expense in the consolidated statement of comprehensive income includes a separate component of other income  
totaling $0 and $753,000 for 2020 and 2019, respectively, which represents net awards received from patent litigation.  
Valuation  
assumptions  
2020  
2019  
Risk-free  
interest rate  
0.26% - 0.37%  
0.0%  
1.42% - 1.44%  
0.0%  
Dividend yield  
Expected life of  
options (years)  
3.50 - 5.50  
57% - 61%  
3.50 - 5.49  
53% - 57%  
Expected volatility  
 
LIQUID COOLING DONE RIGHT  
Losses of the U.S. parent company and U.S. subsidiary will  
begin to expire in 2028 for carryforward purposes. Losses  
of the Denmark subsidiary do not expire.  
9. FINANCE COSTS AND INCOME  
11. DEFERRED INCOME TAX  
Expiration of the carryforward of losses is summarized as  
follows:  
At December 31, 2020, potential income tax assets  
totaled $7.3 million (2019: $8.6 million) in respect of  
remaining losses to be carried forward amounting to  
$29.6 million that should be applied to different tax  
rates. The losses can be carried forward against future  
taxable income. In 2020, the Group recorded deferred  
tax assets totaling $6.4 million ($5.5 million in 2019),  
which represents the net tax benefit that the Company  
considers probable to be realized in the future, based on  
Company budget for the following year and estimates for  
the subsequent years.  
10. INCOME TAXES  
The tax expense on the group’s income before tax differs  
from the theoretical amount that would arise using the  
weighted average tax rate applicable to profits of the  
consolidated entities as follows:  
Asetek A/S, the Group's parent company, moved  
fromU.S. to Denmark in 2013 and is currently subject to  
income tax in both U.S. and Denmark. The Company is  
working with the U.S. and Danish tax authorities to nego-  
tiate a resolution in accordance with international double  
taxation treaties.  
In accordance with IAS 12, the Company recognizes  
deferred tax assets arising from unused tax losses or tax  
credits only to the extent that the entity has sufficient  
taxable temporary differences or there is convincing oth-  
er evidence that sufficient taxable profit will be available  
against which the unused tax losses or unused tax credits  
can be utilized by the Company. The estimated tax ben-  
efit is calculated considering historical levels of income,  
expectations and risks associated with estimates of future  
taxable income. The calculation utilizes the statutory tax  
rates that are expected to apply to taxable income for the  
years in which the asset is expected to be realized.  
In June 2019, the U.S. released regulation for its Global  
Intangible Low-Taxed Income (GILTI) inclusion for U.S.  
taxation, effective beginning with tax year 2018. The GILTI  
regulation requires U.S. companies to report foreign  
corporation intangible income that exceeds 10% return  
on foreign invested assets. Under prior law, U.S. owners  
of foreign corporations were able to defer recognizing  
taxable income until there was a distribution of earnings  
back to U.S. owners. The impact of the GILTI regulation  
caused incremental utilization of the Company's available  
deferred tax assets of approximately $0.4 million in 2020  
and $1.1 million for 2018 and 2019 combined.  
(USD 000’s)  
Tax effected loss  
1,881  
Expire in years 2028 to 2034  
Do not expire  
4,540  
TOTAL  
6,421  
(USD 000’s)  
2020  
9,426  
2019  
1,454  
INCOME (LOSS) BEFORE TAX  
Tax calculated at domestic rates  
applicable to profits/losses in  
respective countries  
(2,328)  
(351)  
Tax effects of:  
R&D credit  
183  
1,600  
732  
20  
(563)  
(126)  
Net benefit (expense)  
of tax losses recognized  
Other timing differences between  
book and tax  
Effect of U.S. GILTI regulation  
applied to foreign corporation  
income  
(418) (1,062)  
TAX (EXPENSE) BENEFIT  
(231) (2,082)  
(USD 000’s)  
2020  
2019  
Potential tax assets from  
prior year losses  
7,340  
8,597  
Potential tax assets resulting  
from timing differences between  
book and tax  
881  
724  
Tax assets not recognized  
(1,800) (3,800)  
6,421 5,521  
DEFERRED INCOME TAX ASSETS  
(USD 000’s)  
Foreign exchange gain (loss)  
2020  
(1,361)  
(7)  
2019  
218  
Interest cost on line of credit  
Interest cost on leases  
(7)  
(107)  
51  
(115)  
359  
(49)  
406  
Interest income  
Other banking and finance fees  
(78)  
TOTAL FINANCE INCOME  
(1,502)  
FINANCIAL STATEMENT S - NOTES 47  
 
LIQUID COOLING DONE RIGHT  
12. EARNINGS PER SHARE  
13. FINANCIAL INSTRUMENTS  
CATEGORY AND FAIR VALUE  
ESTIMATION  
Basic earnings per share is calculated by dividing the  
profit or loss attributable to equity holders of the Compa-  
ny by the weighted average number of common shares  
outstanding during the period. Diluted earnings per share  
is calculated by adjusting the number of common shares  
outstanding used in the Basic calculation for the effect  
of dilutive equity instruments, which include options and  
warrants to the extent their inclusion in the calculation  
would be dilutive.  
The Company uses the following valuation methods for  
fair value estimation of its financial instruments:  
// Quoted prices (unadjusted) in active markets (Level 1).  
// Inputs other than quoted prices included within level  
1 that are observable for the asset or liability, either  
directly (as prices) or indirectly (derived from prices)  
(Level 2).  
// Inputs for the asset or liability that are not based on  
observable market data (unobservable inputs) (Level 3).  
All of the Company’s financial assets as of December 31,  
2020 are classified as ‘amortized cost’ having fixed or  
determinable payments that are not quoted in an active  
market (Level 3). As of December 31, 2020, all of the  
Company’s financial liabilities are carried at amortized cost.  
The Company believes that book value approximates  
fair value for all financial instruments as of December 31,  
2020. The values of the Group’s assets and liabilities are  
as follows:  
Rationale and synergies. As a result of this acquisition,  
the Company is expecting to strengthen its intellectual  
property and product offerings in the Gaming and Enthu-  
siast market. The combination of JMH technology with  
Asetek’s brand and marketing resources is also expected  
to provide development synergies and key competitive  
advantages in the marketplace. The Company expects  
14. ACQUISITION OF BUSINESS  
Business combination. In November 2020, the Company  
acquired 100% of the voting shares of JMH Gallows  
Pound Technologies Ltd. (”JMH”), a UK-based developer  
of hardware and software technology and the owner of  
the UltimateGameTech brand, for a sum of GBP 1 million  
($1.4 million).  
As of December 31, 2020  
(USD 000’s)  
Amortized cost  
:
t
e
e
h
s
e
c
n
a
l
a
b
r
e
p
s
a
s
t
e
s
s
A
Trade receivables and other  
Cash and cash equivalents  
24,471  
27,099  
51,570  
Liabilities at fair value  
through profit and loss  
Other financial liabilities  
at amortized cost  
(USD 000’s)  
Total  
:
t
e
e
h
s
e
c
n
a
l
a
b
r
e
p
s
a
s
e
i
t
i
l
i
b
a
i
L
As of December 31, 2020  
Long-term debt  
-
-
-
-
2,604  
1,525  
2,604  
1,525  
Short-term debt  
Trade payables and accrued liabilities  
19,739  
23,868  
19,739  
23,868  
As of December 31, 2019  
(USD 000’s)  
Amortized cost  
:
t
e
e
h
s
e
c
n
a
l
a
b
r
e
p
s
a
s
t
e
s
s
A
Trade receivables and other  
Cash and cash equivalents  
14,080  
24,505  
38,585  
Liabilities at fair value  
through profit and loss  
Other financial liabilities  
at amortized cost  
(USD 000’s)  
Total  
:
t
e
e
h
s
e
c
n
a
l
a
b
r
e
p
s
a
s
e
i
t
i
l
i
b
a
i
L
As of December 31, 2019  
Long-term debt  
-
-
-
-
2,774  
1,518  
2,774  
1,518  
Short-term debt  
Trade payables and accrued liabilities  
10,805  
15,097  
10,805  
15,097  
2020  
2019  
Income attributable to  
equity holders of the Company  
(USD 000’s)  
$9,195  
$(628)  
Weighted average  
number of common shares  
outstanding (000’s)  
25,547  
25,582  
BASIC EARNINGS PER SHARE  
$0.36 $(0.02)  
Weighted average  
number of common shares  
outstanding (000’s)  
25,547  
566  
25,582  
-
Instruments with potentially  
dilutive effect:  
Warrants and options (000’s)  
Weighted average number  
of common shares  
outstanding, diluted (000’s)  
26,113  
25,582  
DILUTED EARNINGS PER SHARE $0.35 $(0.02)  
4 8 FINANCIAL STATEMENT S - NOTES  
 
LIQUID COOLING DONE RIGHT  
(USD 000’s)  
COST:  
2020  
2019  
Balance at January 1  
9,529  
2,015  
8,424  
1,441  
Additions  
Deletions - completion of useful life  
Impairment loss  
(765)  
(46)  
(436)  
(290)  
9,529  
BALANCE AT DECEMBER 31  
ACCUMULATED AMORTIZATION AND IMPAIRMENT LOSSES:  
Balance at January 1  
10,343  
(7,609)  
(1,579)  
765  
(6,010)  
(1,935)  
46  
Amortization for the year  
Amortization associated with deletions  
Amortization associated with impairment losses  
BALANCE AT DECEMBER 31  
CARRYING AMOUNT  
436  
290  
(7,987)  
2,356  
(7,609)  
1,920  
FINANCIAL STATEMENT S - NOTES 49  
(USD 000’s)  
2020  
605  
2019  
-
Goodwill  
Capitalized development costs  
Other assets  
2,356  
256  
1,920  
-
TOTAL INTANGIBLE ASSETS  
3,217  
1,920  
that the acquisition will enable accelerated growth in  
Asetek’s Gaming and Enthusiast revenue as well as pro-  
vide additional breadth to the Company’s product lines.  
Fair value measurement. Material net assets acquired  
for which significant estimates have been applied in the  
fair value assessment have been recognized using the  
following valuation techniques:  
Consideration, transaction costs, earnings impact.  
The acquisition of JMH was for cash consideration, paid  
in three installments over one year. In closing this trans-  
action, the Company incurred $40,000 of transaction  
costs which are included in operating expense in 2020.  
If the acquisition had occurred on January 1, 2020, the  
Group's pro forma consolidated revenue and operating  
income would have been $72.8 million and $10.7 million,  
respectively.  
// Customer contracts. Customer contracts have been  
measured using a discounted cash flow model in which  
the present value of estimated future cash flows is  
computed for JMH’s largest contracts. The principal  
input drivers of the valuation model used are estimated  
future retention rate, net contribution margin and  
discount rate. These inputs have been estimated based  
on management’s professional judgment from analysis  
of the contracts acquired. The value of the customer  
contracts acquired is being amortized over 24 months.  
Capitalized development costs. The Group routinely  
incurs costs directly attributable to the design and testing  
of new or improved products to be held for sale. These  
costs are capitalized as intangible assets and amortized  
over the estimated useful lives of the products, typically  
three to forty-eight months. The following table presents a  
summary of these development projects.  
in development regardless of whether there have been  
indications for write downs. If the value of expected future  
free cash flow of the specific development project is lower  
than the carrying value, the asset is written down to the  
lower value. The booked value includes capitalized salary  
and related expenses for the cash flow producing project.  
Expected future free cash flow is based on budgets and an-  
ticipations prepared by management. The main parameters  
are the development in revenue, EBIT and working capital.  
Impairment losses represent principally assets which are  
no longer associated with a future income stream.  
Fair value of acquired assets and recognition of  
goodwill. The acquisition is accounted for according to  
IFRS 3 Business Combinations. The fair value of the assets  
acquired is allocated as follows:  
Impairment tests are performed annually on developed  
assets and assets under construction. Impairment tests are  
also performed on completed assets whenever there  
are indications of a need for write-offs and for assets still  
// Developed technology. Developed technology is  
valued based on management’s best estimate of the  
costs that would have been incurred if Asetek were to  
internally develop the technologies that were acquired.  
Significant inputs to these valuations were approxi-  
mate labor hours and associated costs as estimated by  
Asetek’s product development professionals.The value  
of the acquired technology is recorded as capitalized  
development costs. Refer to Notes 15 and 2.5 regarding  
the Company’s accounting for capitalized development  
costs.  
Capitalized development costs  
Goodwill recognized pertains to the expected syner-  
gies associated with combining the Asetek brand and  
marketing resources with the acquired technologies.The  
goodwill is not deductible for tax purposes. Goodwill is  
not amortized but reviewed for impairment once a year  
and also if events or changes in circumstances indicate  
the carrying value may be impaired. If impairment is es-  
tablished, goodwill is written down to its lower recoverable  
amount.  
15. INTANGIBLE ASSETS  
Refer to Note 14. for information regarding intangible  
assets acquired associated with business combinations.  
The Company’s intangible assets at December 31 are  
comprised as follows:  
(USD 000’s)  
Net assets and goodwill recognized:  
Fair value at date  
of acquisition  
Customer contracts  
256  
444  
11  
Developed technology  
Other, net  
Net assets acquired  
711  
Fair value of consideration transferred  
Goodwill recognized  
(1,316)  
605  
 
LIQUID COOLING DONE RIGHT  
17. TRADE RECEIVABLES AND OTHER  
Trade receivables are non-interest bearing and are  
generally on payment terms of Net 30 days.  
(USD 000’s)  
Total  
23,166  
13,235  
Not yet due  
19,915  
1 to 30 days  
2,450  
31 to 60 days  
Over 60 days  
December 31, 2020  
December 31, 2019  
723  
414  
78  
46  
10,468  
2,307  
Past due:  
(USD 000’s)  
2020  
23,166 13,235  
(23) (48)  
23,143 13,187  
1,328 893  
2019  
Gross trade receivables  
Provision for uncollectible accounts  
NET TRADE RECEIVABLES  
Other receivables and assets  
TOTAL TRADE RECEIVABLES  
AND OTHER  
24,471 14,080  
Credit Loss Provision Matrix  
(USD 000’s)  
Total  
Not yet due  
19,915  
1 to 30 days  
2,450  
31 to 60 days  
Over 60 days  
Gross carrying amount  
Expected credit loss rate  
Lifetime expected credit loss  
23,166  
723  
1.0%  
(7)  
78  
15.0%  
(12)  
0.01%  
0.10%  
(23)  
(2)  
(2)  
The trade receivables of Asetek Danmark A/S carry a  
general lien of 6 million Danish krone ($ 1.0 million),  
representing collateral on Sydbank’s engagement with  
the Company. The carrying amount of trade receivables is  
approximately equal to fair value due to the short term to  
maturity. Regarding credit risks, refer to Note 3.  
The aging of trade receivables as of the reporting date is as follows:  
Past due  
(USD 000’s)  
2020  
(48)  
(23)  
48  
2019  
(64)  
(48)  
64  
Balance at January 1  
Additions  
Reversals  
BALANCE AT DECEMBER 31  
(23)  
(48)  
50 FINANCIAL STATEMENT S - NOTES  
A summary of the activity in the provision  
for uncollectible accounts is as follows:  
Other fixtures,  
fittings, tools  
equipment  
Leasehold  
improvements  
(USD 000’s)  
COST:  
Machinery  
Properties  
Total  
Balance at January 1, 2019  
1,363  
-
5,066  
-
2,261  
34  
-
3,204  
34  
8,690  
3,238  
1.127  
Impact of accounting change  
Additions  
52  
629  
412  
Disposals  
-
(46)  
(41)  
(72)  
(159)  
Exchange rate difference  
BALANCE AT DECEMBER 31, 2019  
Balance at January 1, 2020  
Additions  
(29)  
1,386  
1,386  
421  
(106)  
5,543  
5,543  
892  
(50)  
2,616  
2,616  
739  
(59)  
(244  
3,107  
3,107  
545  
12,652  
12,652  
2,597  
(1,091)  
1.215  
Disposals  
(106)  
149  
(740)  
518  
(62)  
266  
(183)  
282  
Exchange rate difference  
BALANCE AT DECEMBER 31, 2020  
1,850  
6,213  
3,559  
3,751  
15,373  
ACCCUMULATED DEPRECIATIONS:  
Balance at January 1, 2019  
(519)  
-
(3,060)  
46  
(1,008)  
36  
-
-
(4,587)  
82  
Disposals  
Depreciations for the year  
(229)  
10  
(896)  
59  
(470)  
21  
(527)  
-
(2,122)  
90  
Exchange rate differences  
BALANCE AT DECEMBER 31, 2019  
Balance at January 1, 2020  
Disposals  
(738)  
(738)  
106  
(3,851)  
(3,851)  
740  
(1,421)  
(1,421)  
61  
(527)  
(527)  
103  
(6,537)  
(6,537)  
1,010  
Depreciations for the year  
(256)  
(73)  
(860)  
(343)  
(4,314)  
1,692  
1,899  
(491)  
(152)  
(2,003)  
1,195  
1,556  
(556)  
(66)  
(2,163)  
(634)  
(8,324)  
6,115  
Exchange rate differences  
BALANCE AT DECEMBER 31, 2020  
CARRYING AMOUNT AT DECEMBER 31, 2019  
(961)  
648  
(1,046)  
2,580  
2,705  
CARRYING AMOUNT AT DECEMBER 31, 2020 889  
7,049  
16. PROPERTY AND EQUIPMENT  
The following table presents total property and equipment, including Right-of-use assets presented in Note 21.  
Also refer to Note 2.16 regarding lease accounting policy.  
 
LIQUID COOLING DONE RIGHT  
Asetek A/S Danmark line of credit. In September 2012,  
the Company entered into a revolving line of credit  
agreement with Sydbank. The line is collateralized by the  
trade receivables of Asetek Danmark A/S and is payable  
on demand. At December 31, 2020, the total line was 5.0  
million Danish kroner, which equates to $825 thousand  
at December 31, 2020. Interest on the line is payable  
monthly at the Danish CIBOR 3 rate plus 2.25 percentage  
points, which in total was 2.03% at December 31, 2020.  
As of December 31, 2020, the Company had 3.25 million  
Danish kroner ($ 536 thousand) outstanding on the line.  
(4.98 million Danish kroner outstanding at December 31,  
2019).  
(USD 000’s)  
2020  
(746)  
269  
2019  
(741)  
(22)  
17  
Beginning balance  
Net paid (drawn) on line of credit  
Foreign exchange impact  
ENDING BALANCE  
(59)  
(536)  
(746)  
Reconciliation of liability for line of credit:  
(USD 000’s)  
Raw materials and work-in-process  
2020  
1,875  
1,093  
2,968  
(437)  
2,531  
2019  
1,051  
1,228  
2,279  
(622)  
1,657  
Finished goods  
Total gross inventories  
Less: provision for inventory reserves  
TOTAL NET INVENTORIES  
(USD 000’s)  
Inventories recognized as cost of sales during the period  
Write-down of inventories to net realizable value  
2020  
(38,556)  
(437)  
2019  
(31,329)  
(622)  
(USD 000’s)  
Line of credit  
2020  
(536)  
2019  
(746)  
Leases - amounts due within one year  
DEBT INCLUDED IN CURRENT LIABILITIES  
Leases - amounts due after one year  
TOTAL DEBT  
(989)  
(772)  
(1,525)  
(2,604)  
(4,129)  
27,099  
22,970  
(1,518)  
(2,774)  
(4,292)  
24,505  
20,213  
Less: cash and equivalents  
NET DEBT  
A summary of the activity in the provision  
for inventory reserves is as follows:  
(USD 000’s)  
2020  
(622)  
(437)  
622  
2019  
(199)  
(622)  
199  
Balance at January 1  
Additions  
Write-offs  
BALANCE AT DECEMBER 31  
(437)  
(622)  
FINANCIAL STATEMENT S - NOTES 51  
The following table summarizes common share activity in the years presented:  
The Company does not cancel shares that are repurchased, but maintains them in treasury to fulfill option exercises.  
Refer to ‘Shareholder information’ in this report for information on the composition of Asetek shareholders.  
(000's)  
2020  
25,604  
(836)  
2019  
25,540  
-
Common shares outstanding - January 1  
Common shares repurchased, net  
Options and warrants exercised and shares issued  
COMMON SHARES OUTSTANDING - DECEMBER 31  
734  
64  
25,502  
25,604  
18. INVENTORIES  
20. NET DEBT  
The following is a summary of the Company’s outstanding and net debt:  
resulting in $2,381,000 received by the Company. In  
2019, a total of 64 thousand options (0.2% of total shares,  
nominal value DKK6.4 thousand) were exercised resulting  
in $66,000 received by the Company.  
19. SHARE CAPITAL  
During 2020, the Company repurchased 844 thousand  
of its common shares on the open market for a total cost  
of $6.4 million. The Company’s existing share buyback  
program authorizes the purchase of up to an additional  
194 thousand shares through March 5, 2021. Shares  
purchased under the program are used to fulfill obliga-  
tions under Asetek’s employee stock option plan.  
As of December 31, 2020, there are 26,433 thousand  
common shares outstanding with a nominal value of 0.10  
DKK per share and 931 thousand shares (3.5% of total  
shares, nominal value DKK 93.1 thousand) held in treasury.  
Included in equity is a reserve for treasury shares of ap-  
proximately $6,373,000 at December 31, 2020.  
In 2020, a total of 734 thousand options (2.8% of total  
shares, nominal value DKK 73.4 thousand) were exercised  
 
LIQUID COOLING DONE RIGHT  
21. LEASES  
22. TRANSACTIONS WITH  
RELATED PARTIES  
Asetek leases certain equipment, its principal office fa-  
cilities and certain motor vehicles. Contracts are typically  
for fixed periods of five years or more for office facilities,  
five years for equipment, and two years or less for motor  
vehicles. The leased asset is depreciated over the shorter  
of the asset’s useful life and the lease term on a straight-  
line basis.  
The Company’s CEO serves as Chairman of the Board for a  
vendor that supplies information technology services to the  
Company. In 2020, the Company purchased services totaling  
$0.7 million ($0.5 million in 2019) from this vendor. At Decem-  
ber 31, 2020 and 2019, the Company had outstanding paya-  
bles to this vendor of $30,000 and $45,000, respectively.  
The Company’s office space in Aalborg, Denmark is under  
lease through July 2025. The Company’s office in San  
Jose, California is under lease through December 2023,  
with an available option to terminate without penalty  
beginning in January 2021. The Company's office space in  
Taipei, Taiwan is under lease until August 2025.  
The Company provides sponsorship support for Valdemar  
Eriksen Racing A/S, an organization partially owned by the  
Company’s CEO. In the years ended December 31, 2020 and  
2019, the Company paid $72,000 and $62,000,respectively  
to this organization.  
On January 1, 2019, the Group adopted IFRS 16 Leases  
on a modified retrospective basis without restatement  
of the prior year, as permitted under the standard. Upon  
adoption of IFRS 16, Asetek recognized lease liabilities for  
leases which had previously been classified as operating  
leases. Refer to Note 2.16 for more details regarding lease  
accounting policy.  
(USD 000’s)  
2020  
2019  
Minimum lease payments  
as of December 31  
3,632  
91  
3,732  
76  
Asset residual at end of lease  
Less: amount representing interest  
(130)  
(262)  
TOTAL OBLIGATIONS  
UNDER FINANCE LEASES  
3,593 3,546  
Obligations under leases  
due within one year  
989  
772  
Obligations under leases  
due after one year  
2,604  
2,774  
3,593 3,546  
Future minimum lease payments are as follows as of the  
balance sheet date:  
Right-of-use Assets. The following table presents a summary of the Right-of-use assets under lease, which is a subset  
of the property and equipment presented in Note 16.  
Reconciliation of lease liability  
(USD 000’s)  
2020  
3,546  
-
2019  
879  
Beginning balance  
Accounting change on January 1  
Additions to lease liabilities  
Payments of lease liabilities  
Adjustments/reductions to leases  
Foreign exchange impact  
ENDING BALANCE  
3,238  
413  
668  
(831)  
(80)  
290  
(734)  
(95)  
(155)  
3,593 3,546  
Other fixtures,  
fittings, tools  
equipment  
(USD 000’s)  
COST:  
Machinery  
Properties  
Total  
Balance at December 31, 2020  
1,454  
-
147  
154  
(139)  
1
3,107  
514  
4,708  
668  
Additions  
Disposals and transfers  
(79)  
143  
(44)  
281  
(262)  
425  
Exchange rate differences  
BALANCE AT DECEMBER 31, 2020  
ACCCUMULATED DEPRECIATIONS:  
Balance at January 1, 2020  
1,518  
163  
3,858  
5,539  
(608)  
79  
(43)  
59  
(527)  
44  
(1.178)  
182  
Disposals and transfers  
Depreciations for the year  
(285)  
(75)  
(45)  
(1)  
(556)  
(65)  
(886)  
(141)  
Exchange rate differences  
BALANCE AT DECEMBER 31, 2020  
CARRYING AMOUNT AT DECEMBER 31, 2019  
CARRYING AMOUNT AT DECEMBER 31, 2020  
(889)  
846  
629  
(30)  
104  
133  
(1,104)  
2,580  
2,754  
(2,023)  
3,530  
3,516  
52 FINANCIAL STATEMENT S - NOTES  
Total cash payments for leases was $927,000 and  
$868,000 in 2020 and 2019, respectively.  
 
LIQUID COOLING DONE RIGHT  
23. SUBSIDIARIES  
24. AUDIT FEES  
The Group’s principal auditors perform audits for all of  
Asetek’s entities except for the Xiamen, China subsidiary,  
which is audited by a local firm. The Group’s principal  
auditors received a total fee of $168,000 and $299,000 in  
2020 and 2019, respectively. Tax services provided by the  
Company’s principal auditors in 2019 included advisory  
regarding deferred taxes and transfer pricing.  
The following entities are included in the consolidated accounts:  
Company  
Domicile  
Denmark  
USA  
Stake  
100%  
100%  
100%  
100%  
100%  
100%  
Voting Share  
100%  
Activity  
Trading  
Inactive  
Trading  
Trading  
Trading  
Trading  
Asetek A/S  
Asetek Holdings, Inc.  
100%  
Asetek USA, Inc.  
USA  
100%  
Asetek Danmark A/S  
Denmark  
China  
100%  
Xiamen Asetek Computer Industry Co., Ltd.  
JMH Gallows Pound Technologies Limited  
100%  
United Kingdom  
100%  
(USD 000’s)  
2020  
92  
2019  
99  
Statutory audit  
Other assurance services  
Tax services  
13  
5
39  
168  
27  
Other consulting  
TOTAL  
24  
168  
299  
FINANCIAL STATEMENT S - NOTES 53  
The fee is distributed between these services:  
ASETEK A/S  
AALBORG, DENMARK  
ASETEK  
HOLDINGS, INC  
DELAWARE, USA  
ASETEK USA, INC  
SAN JOSE, CA USA  
ASETEK  
DANMARK A/S  
AALBORG , DENMARK  
XIAMEN ASETEK  
COMPUTER INDUSTRY  
CO., LTD  
XIAMEN, CHINA  
Fees for services other than statutory audits provided  
by PricewaterhouseCoopers Statsautoriseret Revisions-  
partnerselskab to the group amount to $56,000 (2019:  
$147,000) and consist of accounting advice in relation to  
an assessment report regarding the purchase of assets  
from Granite Devices OY, tax advice in relation to US tax  
matters and other general accounting and tax matters.  
JMH GALLOWS  
POUND TECHNOLOGIES,  
LTD  
UNITED KINGDOM  
 
LIQUID COOLING DONE RIGHT  
25. BOARD OF DIRECTORS  
The members of the Board of Directors have reported the information below as of the date of this filing. For the year 2020, the board members have been compensated as listed below.  
Age and  
gender  
Independence  
status  
Committee  
participation  
2020 Cash  
Compensation  
Qualifications  
Asetek equity holdings Shares  
Director name and other positions  
Independent  
Compensation  
(chairman)  
Nomination  
Owned shares 22,500 $55,500  
61, Male  
Former executive at Siemens A/S  
for 25+ years; Technology, Finance,  
Corporate governance, Risk manage-  
ment. Extensive board experience  
with multiple Chairman roles for  
10+ years.  
JUKKA PERTOLA, CHAIRMAN  
- Tryg A/S and Tryg Forsikring A/S - Chairman of the Board  
- COWI Holding A/S - Deputy Chairman  
- GN Store Nord A/S, GN Hearing A/S, GN Audio A/S- Deputy chairman  
- Siemens Gamesa Renewable Energy A/S – Chairman of the Board  
- Monsenso A/S - Chairman of the Board  
- GomSpace Group AB and GomSpace A/S - Deputy Chairman  
5 4 FINANCIAL STATEMENT S - NOTES  
Date appointed to  
end of current term  
April 10, 2019 to  
April 22, 2021  
CHRIS CHRISTOPHER, VICE CHAIRMAN  
- Rocky Mountain Innosphere - Board member  
- CloudGen - Board member  
ERIK DAMSGAARD  
- OJ group of companies - Managing director  
- Masentia group of companies - Chairman of the board  
- Tentoma A/S - Member of the board  
- ED Management Holding ApS - Owner  
- CRD Invest ApS - Managing director  
- TRD Invest ApS - Managing director  
JØRGEN SMIDT  
- Heartcore Capital - Venture Partner  
- InRiver - Chairman of the Board  
- Onomondo - Chairman of the Board  
- Freespee - Chairman of the Board  
- FlatFrog AB - Board member  
- Confirmit A/S - Chairman of the Board  
MARIA HJORTH  
Former CEO Mercer Denmark,  
20+ years in finance covering  
business development, M&A,  
investor relations.  
- Fondsmæglerselskabet Maj Invest A/S - Board member  
- Maj Invest Equity A/S - Board member  
- Maj Invest Holding A/S - Board member  
- Trifork Holding AG - Board member  
77, Male  
Former Senior VP, Hewlett Packard;  
40+ years of leadership, technology,  
product development, supply chain;  
former leader of server and hardware  
business at HP.  
June 19, 2012 to  
April 22, 2021  
Independent  
Independent  
Audit  
Compensation  
Owned shares  
77,422  
15,654  
14,757  
11,000  
4,400  
$40,400  
Warrants @ NOK 10.50  
Warrants @ NOK 19.50  
Warrants @ NOK 40.10  
Warrants @ NOK 76.25  
56, Male  
20+ years of senior positions in  
electronics & electrical manu-  
facturing, business development.  
April 10, 2019 to  
April 22, 2021  
Audit  
Owned shares  
15,660 $40,400  
64, Male  
Former VP at Nokia; 25+ years of  
senior management, business  
development, product management,  
operations. Partner, Sunstone  
Capital.  
June 19, 2012 to  
April 22, 2021  
Independent  
Compensation  
Owned shares  
16,600 $40,400  
48, Female  
January 14, 2019 to  
April 22, 2021  
Independent  
Audit (chairman)  
Owned shares  
6,357 $40,400  
 
LIQUID COOLING DONE RIGHT  
FINANCIAL STATEMENT S - NOTES 55  
In January 2019, Asetek filed a patent infringement law-  
suit against CoolIT in the Northern District of California  
seeking judgment that CoolIT infringes Asetek’s U.S.  
Patent Nos. 8,240,362; 8,245,764; 9,733,681; 10,078,354;  
and 10,078,355. CoolIT filed counterclaims asserting  
infringement of four CoolIT patents, which Asetek denies.  
On September 17, 2020, Asetek filed a related patent  
infringement lawsuit against Corsair in the Northern  
District of California seeking judgment that Corsair  
infringes Asetek U.S. Patent Nos. 10,078,354; 10,078,355;  
10,613,601; and 10,599,196. The court consolidated the  
two cases and set a trial date for February 2022. Asetek  
also filed review petitions in the U.S. Patent and Trade-  
mark Office (USPTO) to challenge the validity of two of  
the CoolIT patents asserted in the above litigation, and  
CoolIT filed review petitions in the USPTO to challenge  
the validity of three of the five Asetek patents asserted  
in the litigation. The USPTO is expected to decide those  
petitions in 2021.  
and granted Asetek claims for injunctive relief, rendering  
of accounts, recall and destruction. Coolergiant appealed  
the decision and initiated an action to nullify Asetek’s  
patent. In the nullity proceedings, the German Patent  
Court revoked the German part of Asetek’s patent in  
February 2020. In September 2020, Asetek initiated its  
appeal of the decision to the German Supreme Court.  
The infringement and enforcement proceedings have  
been stayed until a final decision on the validity of the  
patent is rendered by the Supreme Court, which is ex-  
pected by the end of 2022.  
26. POST BALANCE SHEET EVENTS  
The Company has evaluated the period after December  
31, 2020 up through the date of the Management State-  
ment and determined that there were no transactions  
that required recognition in the Company’s financial  
statements, except for the following:  
On January 1, 2021, the Company announced an agree-  
ment to acquire intellectual property from Finland-based  
Granite Devices, Inc. to support the continued develop-  
ment of the Company's Gaming and Enthusiast offering.  
The total consideration paid is EUR 6.8 million (approxi-  
mately $8.3 million), of which EUR 3.4 million was paid in  
newly issued common shares of Asetek. The Company's  
offering of 348,003 shares was completed on January  
4, 2021. The accounting for this business combination in  
2021 is not yet complete as of the date of this filing.  
27. CONTINGENT LIABILITIES  
In April 2016, Asetek initiated patent infringement pro-  
ceedings against Cooler Master and Coolergiant before  
the District Court The Hague, pertaining to commerce in  
The Netherlands. Following two appeal stages, the Dutch  
Supreme Court has now confirmed the invalidation of the  
Dutch part of Asetek’s patent in final instance. As a result  
thereof, Asetek’s claims against Cooler Master remain  
dismissed, and the claims against Coolergiant will be  
dismissed by the District Court The Hague.  
Legal proceedings. In the ordinary course of conducting  
our business, the Company is involved in various intellec-  
tual property proceedings, including those in which it is  
a plaintiff that are complex in nature and have outcomes  
that are difficult to predict. Asetek records accruals for  
such contingencies to the extent that it is probable that a  
liability will be incurred and the amount of the related loss  
can be reasonably estimated. The Company’s assessment  
of each matter may change based on future unexpected  
events. An unexpected adverse judgment in any pending  
litigation could cause a material impact on the Group’s  
business operations, intellectual property, results of oper-  
ations or financial position. There are no material updates  
to matters previously reported on the Asetek 2019 Annual  
Report, except:  
In 2017, Coolergiant GmbH filed suit against Asetek  
Danmark A/S in Mannheim District Court requesting  
declaration of non-infringement in Germany of an Asetek  
patent. The Company disputed the allegations and filed  
counterclaim motions. In 2018, the Court ruled that the  
named Coolergiant products infringe on Asetek’s patent  
 
56 ASETEK A/S - ANNUAL REPORT 2019  
56  
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ANNUAL REPORT 2020,  
PARENT COMPANY  
For year ended December 31, 2020  
Asetek A/S  
CVR-number: 3488 0522  
LIQUID COOLING DONE RIGHT  
57  
 
LIQUID COOLING DONE RIGHT  
(USD 000’s)  
Service fees  
TOTAL REVENUE  
Research and development  
Note  
2020  
2,778  
2019  
2,899  
13  
2,778  
(184)  
2,899  
(232)  
3, 4, 5  
3, 4, 5  
Selling, general and administrative  
(3,011)  
(3,195)  
(3,092)  
(3,323)  
TOTAL OPERATING EXPENSES  
OPERATING INCOME (LOSS)  
Foreign exchange (loss)/gain  
Finance income  
(417)  
425  
60  
(424)  
20  
6
6
6
402  
(13)  
Finance costs  
(22)  
463  
TOTAL FINANCIAL INCOME  
409  
INCOME BEFORE TAX  
Income tax  
46  
152  
198  
(16)  
(77)  
(93)  
9
OPERATING INCOME (LOSS)  
:
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Foreign currency translation adjustments  
-
-
TOTAL COMPREHENSIVE INCOME (LOSS)  
198  
(93)  
.
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58 FINANCIAL STATEMENT S - PROFIT & LOSS  
ASETEK A/S  
COMPREHENSIVE INCOME STATEMENT, PARENT COMPANY  
For the years ended December 31, 2020 and 2019  
 
LIQUID COOLING DONE RIGHT  
(USD 000’s)  
Note  
2020  
2019  
ASSETS  
NON CURRENT ASSETS  
Investments in subsidiaries  
10  
7
20,100  
197  
20,100  
143  
Property and equipment  
Receivables from subsidiaries  
Deferred income tax assets  
11  
115  
105  
155  
3
TOTAL NON-CURRENT ASSETS  
20,567  
20,351  
CURRENT ASSETS  
Other assets  
266  
11,912  
21  
14,629  
14,651  
Cash and cash equivalents  
TOTAL CURRENT ASSETS  
12,178  
TOTAL ASSETS  
32,745  
35,001  
EQUITY AND LIABILITIES  
EQUITY  
Share capital  
12  
433  
37,145  
423  
33,654  
(4)  
Retained earnings  
Translation and other reserves  
TOTAL EQUITY  
(6,373)  
31,204  
34,073  
NON-CURRENT LIABILITIES  
Payables to subsidiaries  
11  
8
430  
-
324  
10  
Long-term debt  
TOTAL NON-CURRENT LIABILITIES  
430  
334  
CURRENT LIABILITIES  
Short-term debt  
8
104  
296  
613  
78  
180  
287  
49  
Accrued liabilities  
Accrued compensation and employee benefits  
Trade payables  
99  
TOTAL CURRENT LIABILITIES  
TOTAL LIABILITIES  
1,111  
1,541  
594  
928  
TOTAL EQUITY AND LIABILITIES  
32,745  
35,001  
FINANCIAL STATEMENT S - BALANCE SHEET 59  
ASETEK A/S  
BALANCE SHEET, PARENT COMPANY  
As of December 31, 2020 and 2019  
 
LIQUID COOLING DONE RIGHT  
Share  
capital  
Translation  
reserves  
Treasury  
share reserves  
Retained  
earnings  
(USD 000’s)  
Total  
EQUITY AT DECEMBER 31, 2018  
Total comprehensive income for 2019  
Loss for the year  
422  
-
(4)  
32,626  
33,044  
-
-
-
(93)  
(93)  
TOTAL COMPREHENSIVE INCOME FOR 2019  
Transactions with owners in 2019  
Shares issued  
-
-
-
(93)  
(93)  
1
-
-
-
-
-
-
-
65  
1,056  
66  
1,056  
Share based payment expense  
TRANSACTIONS WITH OWNERS IN 2019  
EQUITY AT DECEMBER 31, 2019  
Total comprehensive income for 2020  
Income for the year  
1
-
1,121  
1,122  
423  
(4)  
33,654  
34,073  
-
-
-
198  
198  
TOTAL COMPREHENSIVE INCOME FOR 2020  
Transactions with owners in 2020  
Shares issued  
-
-
-
198  
198  
10  
-
-
-
-
-
-
-
(6,369)  
-
2,376  
-
2,386  
(6,369)  
918  
Shares repurchase  
Share based payment expense  
TRANSACTIONS WITH OWNERS IN 2020  
EQUITY AT DECEMBER 31, 2020  
-
918  
10  
433  
(6,369)  
(6,373)  
3,294  
37,145  
(3,065)  
31,204  
60 FINANCIAL STATEMENT S - EQUITY  
ASETEK A/S  
STATEMENT OF CHANGES IN EQUITY, PARENT COMPANY  
 
LIQUID COOLING DONE RIGHT  
(USD 000’s)  
Note  
2020  
2019  
CASH FLOWS FROM OPERATING ACTIVITIES  
Income (loss) for the year  
198  
52  
(93)  
47  
Depreciation and amortization  
7
4
9
Share based payments expense  
918  
1,056  
77  
Income tax expense (income)  
(152)  
(245)  
490  
1,260  
Changes in other assets  
(8)  
Changes in trade payables and accrued liabilities  
NET CASH PROVIDED BY OPERATING ACTIVITIES  
CASH FLOWS FROM INVESTING ACTIVITIES  
Purchase of property and equipment  
(386)  
692  
7
(31)  
96  
(51)  
2,353  
2,302  
Net receipts from (payments to) subsidiaries  
NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES  
CASH FLOWS FROM FINANCING ACTIVITIES  
Lease payments on right-of-use assets  
11  
65  
(59)  
(6,369)  
2,386  
(4,042)  
-
(15)  
-
Repurchase of common shares  
12  
12  
Proceeds from issuance of share capital  
64  
NET CASH PROVIDED BY FINANCING ACTIVITIES  
Effect of exchange rate changes on cash and cash equivalents  
NET CHANGES IN CASH AND CASH EQUIVALENTS  
Cash and cash equivalents at beginning of period  
CASH AND CASH EQUIVALENTS AT END OF PERIOD  
SUPPLEMENTAL DISCLOSURE - NON-CASH ITEMS:  
Right-of-use assets capitalized under leases  
49  
-
(2,717)  
14,629  
11,912  
3,043  
11,586  
14,629  
154  
114  
ASETEK A/S  
STATEMENT OF CASH FLOWS, PARENT COMPANY  
For the years ended December 31, 2020 and 2019  
FINANCIAL STATEMENT S - CASH FLOWS 61  
 
LIQUID COOLING DONE RIGHT  
Remuneration of the Group Board of Directors is specified  
in Note 6 to the Consolidated Financial Statements. The  
Company’s share-based incentive pay program is described  
in Note 7 of the Consolidated Financial Statements.  
3.TOTAL OPERATING EXPENSES  
Operating expenses consisted of the following for the  
year ended December 31,  
7. PROPERTY AND EQUIPMENT  
NOTES  
1. GENERAL INFORMATION  
Refer to Note 1 to the Consolidated Financial Statements.  
2. SUMMARY OF SIGNIFICANT  
ACCOUNTING POLICIES  
The 2020 financial statements for Asetek A/S have been  
prepared in accordance with International Financial  
Re- porting Standards (IFRS) as issued by IASB and  
adopted by the EU.  
5. AUDIT FEES  
Tax services provided by the Company’s principal auditors  
includes advisory regarding U.S. domicile, U.S. tax reform  
and transfer pricing.  
4.PERSONNEL EXPENSES  
Total personnel costs for the year ended December 31,  
The financial statements are presented in U.S. Dollars  
(USD), which is the functional currency.  
The accounting policies for the Parent Company are  
the same as for the Asetek Group, as per Note 2 to the  
consolidated financial statements, with the exception of  
the items listed below.  
Property and equipment represents vehicles and land in  
use by the Company.  
On January 1, 2019, the Company adopted IFRS 16 Leases  
on a modified retrospective basis without restatement of  
the prior year. Refer to Note 21 in the Consolidated Finan-  
cial Statements.  
2.1. Dividends on investments in subsidiaries,  
joint ventures and associates.  
6. FINANCIAL INCOME AND COST  
Dividends on investments in subsidiaries, joint ventures  
and associates are recognized as income in the income  
statement of the Parent Company in the financial year in  
which the dividend is declared.  
The average number of employees in the Parent company  
is two for both years presented. The figures listed above in-  
clude a portion of the executive management’s cash com-  
pensation based on an estimate of the actual resources  
allocated to the management of the parent company. The  
figures include incentive-based compensation in the form  
of share options and warrants granted to employees in the  
Asetek Group. Refer to Notes 6 and 7 in the Consolidated  
Financial Statements for information regarding incentive  
compensation programs and management remuneration.  
As of December 31, 2020 and 2019, carrying value of  
vehicles under right-of-use leases totalled $132,000 and  
$100,000, respectively, and their associated leases are for  
terms of 12 months.  
2.2. Investments in subsidiaries, joint ventures and  
associates. Investments in subsidiaries, joint ventures  
and associates are measured at the lower of cost or the  
recoverable amount. An impairment test on the invest-  
ment in subsidiaries is performed if the carrying amount  
of the subsidiaries’ net assets is below the carrying value  
of the Parent Company’s investments in the consolidated  
financial statements.  
(USD 000’s)  
2020  
1,658  
918  
2019  
1,538  
1,056  
Salaries, pension and other  
Share based payment  
TOTAL PERSONNEL EXPENSES  
2,576 2,594  
(USD 000’s)  
2020  
39  
2019  
47  
Statutory audit  
Other assurance services  
Tax services  
13  
5
39  
168  
2
Other consulting  
TOTAL  
24  
115  
222  
(USD 000’s)  
2020  
2019  
Cost:  
Balance at January 1  
Impact of accounting change  
Additions under leases  
Other additions  
190  
-
-
25  
114  
51  
-
154  
31  
Disposals  
(139)  
236  
BALANCE AT DECEMBER 31  
Accumulated depreciation:  
Balance at January 1  
Disposals  
190  
(47)  
59  
-
-
Depreciation for the year  
BALANCE AT DECEMBER 31  
(52)  
(39)  
(47)  
(47)  
CARRYING AMOUNT  
AT DECEMBER 31  
197  
143  
(USD 000’s)  
2020  
425  
2019  
20  
FOREIGN CURRENCY EXCHANGE  
(LOSS) GAIN  
Interest income on loans  
to subsidiaries  
24  
36  
194  
208  
402  
(2)  
Interest from bank accounts  
TOTAL FINANCE INCOME  
Interest on leases  
60  
(4)  
Other finance expense  
TOTAL FINANCE COST  
(18)  
(22)  
(11)  
(13)  
62 FINANCIAL STATEMENT S - NOTES  
(USD 000’s)  
2020  
2,576  
307  
2019  
2,594  
471  
Personnel expenses (Note 4)  
Legal, consultants and auditor  
Other expenses  
313  
258  
TOTAL EXPENSES  
3,195  
3,323  
Total personnel costs are specified as follows:  
(USD 000’s)  
2020  
184  
2019  
232  
Research and development  
Selling, general and administrative  
TOTAL PERSONNEL EXPENSES  
2,392  
2,362  
2,576 2,594  
 
8. LEASES  
9. INCOME TAX  
10. INVESTMENT IN SUBSIDIARIES  
12. EQUITY  
Refer to Note 19 to the Consolidated Financial  
On January 1, 2019, the Company adopted IFRS 16 Leases  
on a modified retrospective basis without restatement  
of the prior year. Refer to Note 21 in the Consolidated  
Financial Statements.  
At December 31, 2020 and 2019, the tax benefit (provi-  
sion) for Asetek A/S differed from the statutory tax rate  
as a result of timing differences associated with share  
compensation expenses that are treated differently for  
tax purposes.  
Statements.  
13. TRANSACTIONS WITH  
RELATED PARTIES  
Asetek A/S charges its subsidiaries a management service  
fee. Reference Notes 6 & 11 regarding transactions with  
subsidiaries. With regard to transactions with related  
parties that are not subsidiaries, refer to Note 22 to the  
Consolidated Financial Statements.  
Asetek A/S acquired 100% of Asetek Holdings, Inc.  
through the exchange of shares in February 2013. At the  
time of acquisition, Asetek Holdings, Inc. had negative net  
equity, resulting in the initial investment to be valued at  
zero. Asetek Holdings, Inc. represents Asetek A/S’s only  
direct investment in subsidiaries.  
14. EVENTS AFTER THE  
REPORTING PERIOD  
Refer to Note 26 to the Consolidated Financial  
Statements  
Total lease obligations due within one year were  
$104,000 and $78,000 at December 31, 2020 and 2019,  
respectively.  
11. NET RECEIVABLES FROM  
(PAYABLES TO) SUBSIDIARIES  
15. CONTINGENT LIABILITIES  
The Danish group enterprises are jointly and severally  
liable for tax on group income subject to joint taxation,  
as well as for Danish withholding taxes by way of dividend  
tax, royalty tax, tax on unearned income and any subse-  
quent adjustments to these. Asetek A/S has executed a  
guarantee to its Group’s principal bank, Sydbank, for all  
outstanding matters with its wholly owned subsidiary,  
Asetek Danmark A/S.  
Refer to Note 27 to the Consolidated Financial State-  
ments.  
The fair value of receivables and payables corresponds  
in all material respects to the carrying amount. As of  
December 31, 2020 and 2019, there is no credit loss provi-  
sion deemed necessary for receivables from subsidiaries.  
LIQUID COOLING DONE RIGHT  
FINANCIAL STATEMENT S - NOTES 63  
As of December 31,  
(USD 000’s)  
2020  
(158)  
(273)  
24  
2019  
(266)  
(59)  
14  
Asetek Danmark A/S  
Asetek USA, Inc.  
Asetek Xiamen  
Asetek Holdings, Inc.  
92  
92  
Net receivables from  
(payables to) subsidiaries  
(315)  
5.5%  
(219)  
7.2%  
Average effective interest rate  
(USD 000’s)  
Investment in Asetek Holdings, Inc.  
Balance at December 31, 2019  
Additions  
20,100  
-
Balance at December 31, 2020  
20,100  
20,100  
20,100  
Carrying amount at December 31, 2019  
Carrying amount at December 31, 2020  
(USD 000’s)  
2020  
2019  
Minimum lease payments as of  
December 31  
15  
91  
13  
76  
Asset residual value at end of lease  
Less: amount representing interest  
Total obligations under leases  
(2)  
(1)  
88  
104  
(USD 000’s)  
2020  
46  
2019  
(16)  
INCOME (LOSS) BEFORE TAX  
Tax calculated at domestic rates  
applicable to profits/losses in  
respective countries  
(10)  
3
The effect of timing differences  
between book and tax  
162  
(80)  
Tax (expense) benefit  
152  
(77)  
Asetek A/S has deferred tax assets at December 31, 2020  
and 2019 of $155,000 and $3,000, respectively, which  
represent timing differences between book and tax asso-  
ciated with the recognition of share based compensation  
expense. In accordance with IAS 12, the Company recog-  
nizes deferred tax assets arising from unused tax losses or  
tax credits only to the extent that the entity has sufficient  
taxable temporary differences or there is convincing other  
evidence that sufficient taxable profit will be available  
against which the unused tax losses or unused tax credits  
can be utilized by the Company. The estimated tax ben-  
efit is calculated considering historical levels of income,  
expectations and risks associated with estimates of future  
taxable income. The calculation utilizes the statutory tax  
rates that are expected to apply to taxable income for the  
years in which the asset is expected to be realized.  
 
64  
LIQUID COOLING DONE RIGHT  
 
MANAGEMENT STATEMENT 65  
LIQUID COOLING DONE RIGHT  
EXECUTIVE BOARD:  
BOARD OF DIRECTORS:  
André Sloth Eriksen  
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Peter Dam Madsen  
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C
MANAGEMENT STATEMENT
The Executive Board and the Board of Directors have
today considered and adopted the Annual Report of
Asetek A/S for the financial year January 1 to December
31, 2020. The annual report is prepared in accordance
with International Financial Reporting Standards as
adopted by the EU and additional Danish disclosure
requirements for listed companies.
In our opinion, the Consolidated Financial Statements
and Parent Company Financial Statements give a true
and fair view of the financial position at December 31,
2020 of the Group and the Parent company and of the
results of the Group and Parent company operations
and cash flows for 2020.
In our opinion, Management’s Report includes a true
and fair account of the development in the operations
and financial circumstances of the Group and the Parent
company as well as a description of the most significant
risks and elements of uncertainty facing the Group and
the Parent company.
In our opinion, the annual report of Asetek A/S for the
financial year 1 January to 31 December 2020 with the file
name asetek-2020-12-31.zip is prepared, in all material
respects, in compliance with the ESEF Regulation.
We recommend that the Annual Report be adopted at
the Annual General Meeting.
Aalborg, Denmark  
February 23, 2021  
Jukka Pertola, Chairman  
Maria Hjorth  
Erik Damsgaard  
Chris J. Christopher, Vice Chairman  
Jørgen Smidt  
 
BASIS FOR OPINION
KEY AUDIT MATTERS
We assessed relevant internal controls and performed sub-
stantive audit procedures to verify capitalized amounts.
INDEPENDENT AUDITOR’S
REPORTS
We conducted our audit in accordance with International
Standards on Auditing (ISAs) and the additional require-
ments applicable in Denmark. Our responsibilities under
those standards and requirements are further described in
the Auditor’s responsibilities for the audit of the Financial
Statements section of our report.
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the Fi-
nancial Statements for 2020. These matters were addressed
in the context of our audit of the Financial Statements as a
whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
We evaluated and challenged Management’s assessment of
impairment indicators of completed development projects
based on the commercial prospects of the projects. For
in-progress development projects, we challenged the key
assumptions applied in the value-in-use calculations.
To the shareholders of Asetek A/S
REPORT ON THE AUDIT OF THE FINANCIAL
STATEMENTS
OUR OPINION
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Capitalization of development costs
In our opinion, the Consolidated Financial Statements
and the Parent Company Financial Statements give a true
and fair view of the Group’s and the Parent Company’s
financial position at 31 December 2020 and of the results
of the Group’s and the Parent Company’s operations and
cash flows for the financial year 1 January to 31 December
2020 in accordance with International Financial Reporting
Standards as adopted by the EU and further requirements
in the Danish Financial Statements Act.
Our work was based on our understanding of the business
cases and key assumptions applied.
The Group capitalizes development costs when certain cri-
teria according to IFRS are met. The criteria for recognition
and measurement of development costs is subject to Man-
agement’s judgment and assumptions, which is uncertain
by nature. Completed development projects are assessed
quarterly for impairment indications. For in-progress devel-
opment projects impairment tests are performed quarterly.
The impairment tests are based on strategy plan approved
by Management and value-in-use calculations based on
expected future cash flows.
Independence
We challenged whether the intent to finalize the projects
remain and whether the projects are expected to generate
future economic benefits exceeding the carrying values.
We are independent of the Group in accordance with the
International Ethics Standards Board for Accountants’
Code of Ethics for Professional Accountants (IESBA Code)
and the additional requirements applicable in Denmark.
We have also fulfilled our other ethical responsibilities in
accordance with the IESBA Code.
Valuation of deferred tax assets
The Group capitalizes deferred tax assets when certain cri-
teria are met. The criteria for recognition and measurement
is subject to Management’s judgment and assumptions
regarding the future taxable income, which is uncertain by
nature. The deferred tax assets relate to net operating losses
in Denmark and the US.
Our opinion is consistent with our Auditor’s Long-form
Report to the Audit Committee and the Board of Directors.
To the best of our knowledge and belief, prohibited non-au-
dit services referred to in Article 5(1) of Regulation (EU) No
537/2014 were not provided.
We focused on this area because the criteria for recognition
and measurement of development projects are subject to
Management judgments and assumptions.
What we have audited
The Consolidated Financial Statements and Parent Com-
pany Financial Statements of Asetek A/S for the financial
year 1 January to 31 December 2020 comprise statement
of comprehensive income, balance sheet, statement of
changes in equity, cash flow statement and notes, including
summary of significant accounting policies for the Group as
well as for the Parent Company. Collectively referred to as
the “Financial Statements”.
Appointment
We focused on this area due to the size of the deferred tax
asset and the size of the total tax losses. Furthermore, there
is judgment involved in assessing whether the criteria set out
in the accounting standards (IAS 12) for recognizing deferred
tax assets have been met, and estimates over the value of
deferred tax assets are subjective and uncertain by nature.
Following the admission of the shares of Asetek A/S for
listing on Oslo Stock Exchange, we were first appointed
auditors of Asetek A/S on 24 April 2014. We have been
reappointed annually by shareholder resolution for a total
period of uninterrupted engagement of 7 years including
the financial year 2020.
Refer to note 15 in the Consolidated Financial Statements.
How our audit addressed the key audit matter
We selected a sample of in-progress development projects
and considered whether all criteria described in IFRS were
met as basis for capitalization.
Refer to note 11 in the Consolidated Financial Statements.
LIQUID COOLING DONE RIGHT  
66 INDEPENDENT AUDITOR’S REPORT  
 
INDEPENDENT AUDITOR’S REPORT 67  
How our audit addressed the key audit matter
We assessed the management’s valuation of the deferred
tax assets and reconciled this to the amounts recorded in the
financial statements.
responsibility is to read Management’s Review and, in doing
so, consider whether Management’s Review is materially
inconsistent with the Financial Statements or our knowledge
obtained in the audit, or otherwise appears to be materially
misstated.
Company’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 the Parent Company
or to cease operations, or has no realistic alternative but to
do so.
detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrep-
resentations, or the override of internal control.
We challenged estimates made by management in relation
to the deferred tax assets through the following audit
procedures:
// Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are ap-
propriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group’s
and the Parent Company’s internal control.
Moreover, we considered whether Management’s Review
includes the disclosures required by the Danish Financial
Statements Act.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF
THE FINANCIAL STATEMENTS
// We received the Group’s budgets for the period 2021-
2025. We evaluated and challenged the assumptions
made by management by comparing budgets to
realized figures and realized growth for 2020. Further,
we performed look back testing procedures to evaluate
management budget procedures.
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. Reasona-
ble assurance is a high level of assurance but is not a guaran-
tee that an audit conducted in accordance with ISAs and the
additional requirements applicable in Denmark will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken
on the basis of these Financial Statements.
Based on the work we have performed, in our view, Man-
agement’s Review is in accordance with the Consolidated
Financial Statements and the Parent Company Financial
Statements and has been prepared in accordance with the
requirements of the Danish Financial Statements Act. We
did not identify any material misstatement in Management’s
Review.
// 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 uncer-
tainty exists related to events or conditions that may cast
significant doubt on the Group’s and the Parent Compa-
ny’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 Group or the Parent Company to cease to
continue as a going concern.
// We compared the budgets with the deferred tax asset
recognized and challenged management on their plan for
utilizing the tax losses.
MANAGEMENT’S RESPONSIBILITY FOR THE FINAN-
CIAL STATEMENTS
// We utilized our tax specialists in order to ensure compli-
ance to tax rules in respect of determining the value of the
deferred tax asset.
Management is responsible for the preparation of consol-
idated financial statements and parent company financial
statements that give a true and fair view in accordance with
International Financial Reporting Standards as adopted by
the EU and further requirements in the Danish Financial
Statements Act, and for such internal control as Manage-
ment determines is necessary to enable the preparation of fi-
nancial statements that are free from material misstatement,
whether due to fraud or error.
As part of an audit in accordance with ISAs and the addi-
tional requirements applicable in Denmark, we exercise
professional judgment and maintain professional skepticism
throughout the audit. We also:
STATEMENT ON MANAGEMENT’S REVIEW
Management is responsible for Management’s Review.
Our opinion on the Financial Statements does not cover
Management’s Review, and we do not express any form of
assurance conclusion thereon.
// Identify and assess the risks of material misstatement of
the Financial Statements, whether due to fraud or error,
design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and ap-
propriate to provide a basis for our opinion. The risk of not
In preparing the Financial Statements, Management is
responsible for assessing the Group’s and the Parent
In connection with our audit of the Financial Statements, our
LIQUID COOLING DONE RIGHT  
 
68 INDEPENDENT AUDITOR’S REPORT  
// Ensuring consistency between iXBRL tagged data and
the Consolidated Financial Statements presented in
human-readable format; and
// Evaluate the overall presentation, structure, and content
of the Financial Statements, including the disclosures, and
whether the Financial Statements represent the underly-
ing transactions and events in a manner that achieves fair
presentation.
regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such
communication.
// Evaluating the use of anchoring of extension elements
to elements in the ESEF taxonomy; and
// Reconciling the iXBRL tagged data with the audited
// For such internal control as Management determines
necessary to enable the preparation of an Annual
Report that is compliant with the ESEF Regulation.
Consolidated Financial Statements.
In our opinion, the Annual Report of Asetek A/S for the
financial year 1 January to 31 December 2020 with the file
name asetek-2020-12-31.zip is prepared, in all material
respects, in compliance with the ESEF Regulation.
// 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.
REPORT ON COMPLIANCE WITH THE
Our responsibility is to obtain reasonable assurance on
whether the Annual Report is prepared, in all material
respects, in compliance with the ESEF Regulation based on
the evidence we have obtained, and to issue a report that
includes our opinion. The nature, timing and extent of proce-
dures selected depend on the auditor’s judgment, including
the assessment of the risks of material departures from the
requirements set out in the ESEF Regulation, whether due
to fraud or error. The procedures include:
ESEF REGULATION
As part of our audit of the Financial Statements we per-
formed procedures to express an opinion on whether
the Annual Report of Asetek A/S for the financial year
1 January to 31 December 2020 with the file name
asetek-2020-12-31.zip is prepared, in all material respects,
in compliance with the Commission Delegated Regulation
(EU) 2019/815 on the European Single Electronic Format
(ESEF Regulation) which includes requirements related to
the preparation of the Annual Report in XHTML format and
iXBRL tagging of the Consolidated Financial Statements.
Aarhus, February 23, 2021  
PricewaterhouseCoopers  
Statsautoriseret Revisionspartnerselskab  
CVR no 3377 1231  
We communicate with those charged with governance
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.
// Testing whether the Annual Report is prepared in XHTML
format;
We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communi-
cate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.
Management is responsible for preparing an Annual Report
that complies with the ESEF Regulation. This responsibility
includes:
// Obtaining an understanding of the company’s iXBRL
tagging process and of internal control over the tagging
process;
// The preparation of the Annual Report in XHTML format;
// Evaluating the completeness of the iXBRL tagging of the
Consolidated Financial Statements;
// The selection and application of appropriate iXBRL tags,
including extensions to the ESEF taxonomy and the
anchoring thereof to elements in the taxonomy, for all fi-
nancial information required to be tagged using judgment
where necessary;
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the Financial Statements of the
current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or
// Evaluating the appropriateness of the company’s use of
iXBRL elements selected from the ESEF taxonomy and
the creation of extension elements where no suitable
element in the ESEF taxonomy has been identified;
LIQUID COOLING DONE RIGHT  
Mads Melgaard  
State Authorised Public Accountant, mne34354  
Henrik Berring Rasmussen  
State Authorised Public Accountant, mne34157  
 
LIQUID COOLING DONE RIGHT  
OTHER INFORMATION - STOCK EXCHANGE RELEASES 69  
STOCK EXCHANGE RELEASES  
Issue Date  
Subject  
Issue Date  
Subject  
December 30, 2020 Transactions carried out under Share Buyback Program  
December 22, 2020 Transactions carried out under Share Buyback Program  
December 15, 2020 Transactions carried out under Share Buyback Program  
August 12, 2020  
August 12, 2020  
August 12, 2020  
August 10, 2020  
August 7, 2020  
August 3, 2020  
July 27, 2020  
Mandatory notification of trade: executive management exercises warrants and sells shares  
Share capital increase upon exercise of warrants  
Q2 2020: Gross margin increase and raised full-year expectations  
Transactions carried out under Share Buyback Program  
Asetek presents second quarter 2020 results on Wednesday, August 12  
Transactions carried out under Share Buyback Program  
Transactions carried out under Share Buyback Program  
Update to full year 2020 guidance  
December 8, 2020  
December 1, 2020  
Transactions carried out under Share Buyback Program  
Transactions carried out under Share Buyback Program  
November 27, 2020 Share capital increase upon exercise of warrants  
November 24, 2020 Asetek receives order from existing global data center OEM partner  
November 24, 2020 Transactions carried out under Share Buyback Program  
November 17, 2020 Transactions carried out under Share Buyback Program  
November 17, 2020 Asetek receives order from existing global data center OEM partner  
November 10, 2020 Transactions carried out under Share Buyback Program  
July 21, 2020  
July 20, 2020  
July 14, 2020  
Transactions carried out under Share Buyback Program  
Transactions carried out under Share Buyback Program  
Asetek collaborates with HPE to deliver next-gen HPC server cooling solutions  
Transactions carried out under Share Buyback Program  
Transactions carried out under Share Buyback Program  
Transactions carried out under Share Buyback Program  
Transactions carried out under Share Buyback Program  
Transactions carried out under Share Buyback Program  
Transactions carried out under Share Buyback Program  
Share capital increase upon exercise of warrants  
July 7, 2020  
November 9, 2020  
November 3, 2020  
November 3, 2020  
October 29, 2020  
October 27, 2020  
October 22, 2020  
October 22, 2020  
October 20, 2020  
October 20, 2020  
October 19, 2020  
October 19, 2020  
October 7, 2020  
October 7, 2020  
Asetek receives order from existing global data center OEM partner  
Transactions carried out under Share Buyback Program  
Asetek receives order from existing global data center OEM partner  
Outcome of Extraordinary General Meeting  
July 6, 2020  
June 29, 2020  
June 22, 2020  
June 15, 2020  
June 8, 2020  
Transactions carried out under Share Buyback Program  
Asetek launches share buyback program to cover employee stock options  
Q3 2020: Record revenue and EBITDA on strong Gaming & Enthusiast demand  
Asetek receives order from existing global data center OEM partner  
Asetek presents third quarter 2020 results on Friday, October 23  
Financial calendar  
June 2, 2020  
May 26, 2020  
May 25, 2020  
May 18, 2020  
May 18, 2020  
May 14, 2020  
May 6, 2020  
Transactions carried out under Share Buyback Program  
Asetek receives repeat order from existing global data center OEM partner  
Asetek launches share buyback program to cover employee stock options  
Asetek receives order from server OEM partner  
Update to full year 2020 guidance  
Asetek receives order from existing global data center OEM partner  
Notice of Extraordinary General Meeting October 29, 2020  
Disclosure of shareholding  
April 23, 2020  
April 22, 2020  
April 22, 2020  
April 21, 2020  
April 17, 2020  
March 30, 2020  
March 19, 2020  
March 18, 2020  
March 11, 2020  
February 25, 2020  
February 19, 2020  
February 11, 2020  
February 10, 2020  
January 30, 2020  
Employee stock option grant  
September 29, 2020 Transactions carried out under Share Buyback Program  
September 24, 2020 Transactions carried out under Share Buyback Program  
September 15, 2020 Share capital increase upon exercise of warrants  
Outcome of Annual General Meeting  
Q1 2020: Lower revenue and increased gross margin  
Asetek receives order for new HPC installation from existing global data center OEM partner  
Asetek presents first quarter 2020 results on Wednesday, April 22  
Notice of Annual General Meeting April 22, 2020  
September 15, 2020 Transactions carried out under Share Buyback Program  
September 9, 2020 Asetek receives order for new HPC installation from existing data center OEM partner  
September 8, 2020 Transactions carried out under Share Buyback Program  
Mandatory notification of trade: CEO purchases shares  
Mandatory notification of trade: Board member purchases shares  
Mandatory notification of trade: CFO purchases shares  
Q4 2019: Revenue in line with expectations, evolving gaming and enthusiast business model  
Asetek presents fourth quarter and annual 2019 results on Wednesday, February 26  
Supply chain update  
August 31, 2020  
August 25, 2020  
August 25, 2020  
August 24, 2020  
August 19, 2020  
August 17, 2020  
August 17, 2020  
August 14, 2020  
Transactions carried out under Share Buyback Program  
Asetek receives order for new HPC installation from existing data center OEM partner  
Transactions carried out under Share Buyback Program  
Asetek receives order for new HPC installation from existing data center OEM partner  
Share capital increase upon exercise of warrants  
Update to full year 2020 guidance  
Financial calendar  
Transactions carried out under Share Buyback Program  
Major shareholder announcements  
Asetek to supply liquid cooling solutions to global server OEM  
 
70 OTHER INFORMATION - DEFINITIONS OF RATIOS AND METRICS  
Asetek uses various metrics, financial and non-financial  
BUSINESS DRIVERS  
PROFIT & LOSS  
BALANCE SHEET  
ratios which provide shareholders with useful informa-  
tion about the Group’s financial position, performance  
and development.  
Average selling price per unit, Gaming and Enthusiast  
Adjusted EBITDA  
Invested capital  
Operating income + amortization & depreciation  
+ share-based compensation  
Equity raised from sale of shares and conversion of  
debt + interest bearing debt  
Gaming and Enthusiast revenue / Sealed loop units  
shipped  
Gross margin  
Quick ratio  
Revenue per employee  
Gross profit / Revenue  
(Cash and cash equivalents + Trade receivables and  
other) / Total Current Liabilities  
Revenue / Number of employees  
Operating margin  
Operating income / Revenue  
Current ratio  
Total current assets / Total current liabilities  
Return on Invested Capital (ROIC)  
Income for the year / Invested capital  
Days sales outstanding  
Trade receivables / (Revenue / 365 days)  
Organic growth  
(Revenue current year – Comparable revenue* prior  
year) / Comparable revenue* prior year  
Inventory turns per year  
Cost of sales / (beginning inventory + ending  
inventory / 2)  
*Comparable revenue excludes changes in revenue  
attributable to foreign exchange rates and any acquisi-  
tions or divestments.  
Days payable outstanding  
Trade payables / (Cost of sales / 365 days)  
Debt to equity  
Interest-bearing debt / Total equity  
Stock Market  
Earnings per share, basic  
Refer to Note 12 of the Consolidated financial statements  
Earnings per share, diluted  
Refer to Note 12 of the Consolidated financial statements  
Share price to earnings  
Share price / NOK to USD exchange rate / Earnings  
per share, diluted  
Market capitalization  
(Shares issued – Treasury shares) x (Share price in  
NOK / NOK to USD exchange rate)  
LIQUID COOLING DONE RIGHT  
DEFINITIONS OF RATIOS AND METRICS  
 
 
Asetek A/S
Assensvej 2
DK-9220 Aalborg East
Denmark  
Phone: +45 9645 0047
Fax:
+45 9645 0048
www.asetek.com
info@asetek.com
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