report. However, such plans relate to future events and  

the fulfillment of such are by nature subject to  

uncertainty. If actual results in 2023 differ from  

expectations, or sufficient funding is not established  

through the equity offering or otherwise, the Board of  

Directors and Management will need to take mitigating  

actions, such as reduce costs and pursue sale of certain  

Group assets. Although the Board of Directors and  

Management based on this assessment considers that  

Asetek will have adequate liquidity resources available  

to finance the operations of the Group for the coming  

year, the above indicate that a material uncertainty  

exists that may cast significant doubt on the Group’s  

ability to continue as a going concern.  

1.GENERAL INFORMATION  

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 improved 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 ‘ASTK’.  

1.1. Liquidity and going concern in 2023  

In 2022, the Company incurred operating loss of $5.4  

million and as of December 31, 2022, has working  

capital of negative $6.3 million and non-current  

liabilities of $1.7 million. The Company believes that its  

cash position and the liquidity available from its  

operations, external borrowings and other sources  

currently available is sufficient to satisfy its working  

capital requirements until around mid-May, 2023. From  

then on the Company expects a cash shortfall, mainly as  

a result of cash balances (including cash inflows from  

operations) being allocated to capital expenditures  

related to the construction of a new headquarter  

facility. As a result, the Company plans to raise gross  

proceeds of approximately DKK 140 million (USD 20  

million), with expected net proceeds of DKK 115 million  

(USD 16 million), in a public equity offering.

The equity  

offering is expected to occur in May 2023 and the net  

proceeds are expected to be available May 15, 2023.  

The offering is fully underwritten as of March 7, 2023  

subject to conditions not met at the time of the release  

of the financial statements. In addition, Management  

has discussed short-term debt financing with a bank to  

secure financing if a shortfall occurs before the funding  

is received from the planned equity offering. The bank  

has indicated willingness to provide bridge financing for  

the shortfall period.  

If the offering is completed with net proceeds of DKK  

115 million, the Company considers, based on given  

current knowledge, that the Company’s cash position  

will be sufficient to meet the Company’s requirements  

for the year 2023.  

The Company’s budgets and plans are based on best  

estimates of the future at the time of issuing this annual  

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  

The principal accounting policies applied in the  

preparation of these consolidated financial statements  

are set out below. These policies have been consistently  

applied to all the years presented, unless otherwise  

stated. In 2021, the Company adopted a new  

accounting policy of identifying special items for  

separate disclosure. Refer to Note 2.23.  

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  

supplementary Danish information requirements for  

class D publicly listed companies.  

2.2. Consolidation  

The consolidated financial statements comprise the  

Company and its consolidated subsidiaries. Subsidiaries  

are all entities (including structured entities) over which  

the 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. Subsidiaries are fully consolidated from the  

date on which control is transferred to the Group. They  

are deconsolidated from the date that control ceases.  

Intercompany transactions, 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.  

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 consideration 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.  

// All resulting exchange differences are recognized in  

other comprehensive income  

2.4. Property and equipment  

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. 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, plant and equipment is grouped as follows:  

Group  

Estimated Useful Life  

Buildings  

30 - 50 years  

Leasehold improvements  

Lesser of 5 yrs or lease term  

Plant and machinery  

5 years  

Tools and fixtures  

3 to 5 years  

2.3. Foreign currency  

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 operates (‘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.  

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.  

Group companies that have a functional currency  

different from the presentation currency are  

translated into the presentation currency as follows:  

// Assets and liabilities for each balance sheet  

presented are translated at the closing rate at the date  

of that balance sheet;  

// Income and expenses for each income statement  

are translated at average exchange rates;  

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:  

// 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  

// the expenditures attributable to the product during  

its development can be reliably measured.  

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 ‘amortized cost’ criteria, are recognized at fair  

value. All fair value movements on financial assets are  

taken through the income statement, or for certain  

debt instruments that qualify, through other  

comprehensive income.  

For all years presented, the Group’s financial assets  

are all classified as ‘amortized cost’.  

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 expense 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.  

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.  

2.6. Impairment of non-financial assets  

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 impairment loss on goodwill is  

identified, it is recognized as an expense and is not  

reversed in a subsequent period.  

2.8. Financial assets  

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:  

// ‘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, 2022, the Company  

has no liabilities measured at fair value through profit  

and loss.  

2.7. Financial assets  

Recognition and Measurement. The Group  

determines the classification of its financial assets at  

initial recognition. Financial assets within the scope of  

IFRS 9 Financial Instruments are classified as follows:  

// ‘Amortized cost’ are financial assets representing  

contractual cash flows held for collection, where such  

// ‘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.  

shares or options are shown in equity as a deduction,  

net of tax, from the proceeds.  

2.13. Share-based payments  

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 options 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  

granted 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.  

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 simultaneously.  

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  

estimated 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.  

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 subsequently 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 approach allowed under IFRS 9 Financial  

Instruments.  

2.14. Current and deferred income tax  

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.  

The current income tax expense is calculated on the  

basis of the tax laws enacted or substantively enacted  

2.11. Cash and cash equivalents  

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  

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.  

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 combination 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.  

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.  

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.  

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 customers with vendor-  

managed inventory, delivery does not occur until  

product is acquired by the customer from the vendor-  

managed inventory location. The Company assesses  

collectability based primarily on the creditworthiness  

of the customer as determined by credit checks and  

customer payment history. Customers do not  

generally have a right of return.  

Income received as a result of patent litigation  

settlement is recorded as other income as an offset to  

operating expense 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.  

2.16. Borrowings and related costs  

Borrowings are initially recognized at fair value, net of  

transaction costs incurred. Borrowings are  

subsequently measured at amortized cost. Any  

difference between the proceeds (net of transaction  

costs) and the redemption amount is recognized in  

profit or loss over the period of the borrowings using  

the effective interest method. Fees paid on the  

establishment of loan facilities are recognized as  

transaction costs of the loan to the extent that it is  

probable that some or all of the facility will be drawn  

down. In this case, the fee is deferred until the draw  

down occurs. To the extent there is no evidence that it  

is probable that some or all of the facility will be  

drawn down, the fee is capitalized as a prepayment for  

liquidity services and amortized over the period of the  

facility to which it relates.  

Borrowings are removed from the balance sheet when  

the obligation specified in the contract is discharged,  

cancelled or expired. The difference between the  

carrying amount of a financial liability that has been  

extinguished or transferred to another party and the  

consideration paid, including any non-cash assets  

transferred or liabilities assumed, is recognized in  

profit or loss as other income or finance costs.  

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.  

The Group’s revenue is predominantly comprised of  

shipment of Asetek products in fulfillment of customer  

General and specific borrowing costs that are directly  

attributable to the acquisition, construction or  

production of a qualifying asset are capitalized during  

the period of time that is required to complete and  

prepare the asset for its intended use or sale.  

Qualifying assets are assets that necessarily take a  

substantial period of time to get ready for their  

intended use or sale. Investment income earned on  

the temporary investment of specific borrowings  

pending their expenditure on qualifying assets is  

deducted from the borrowing costs eligible for  

capitalization. Other borrowing costs are expensed in  

the period in which they are incurred.  

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.  

2.19. Contingent liabilities  

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.  

2.20. Segment reporting  

Business segmentation. The Group is reporting on  

three segments, Liquid cooling, Data center and  

SimSports. The three 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 Company’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 three  

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.  

Geographical segmentation. Each of the Group’s  

offices in its three principal geographies fulfills a  

particular function 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. 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 geography is measured  

and reported in Note 4, Geographical information.  

2.17. Leases  

Lease liabilities are accounted for under IFRS 16 Leases  

and 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.  

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.  

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 at the present value  

of the lease liability and included in Property and  

equipment on the balance sheet.  

2.18. Provisions  

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  

2.21. Cash flow statement  

The cash flow statement is prepared using the indirect  

method.  

2.22. 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:  

// 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 considered to be probable. The Company  

has recorded deferred 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.  

// 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 Special items  

The Company may identify special items that are  

significant non-recurring items that management does  

not consider to be part of the Group’s ordinary  

activities. Such special items may include one-time  

impairment costs, restructuring, and strategic  

considerations regarding the future of the business,  

and are presented separately in the Consolidated  

Statement of Comprehensive Income to provide a  

more comparable basis for the Company’s operations.  

Management assesses which items are to be identified  

as special items and shown separately, in order to give  

a correct presentation of the statement of profit or  

loss and other comprehensive income.  

2.25 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 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.  

2.26. Changes in accounting policy and disclosures  

- Applied new standards and amendments included  

in Annual Report for 2022. Certain new standards,  

amendments to standards, and annual improvements  

to standards and interpretations are effective for  

annual periods beginning after January 1, 2022 and  

have been applied in preparing these consolidated  

financial statements. These applications did not  

materially impact the Group’s consolidated financial  

statements.  

2.23. Defined contribution plan  

In 2008, the Company established a defined  

contribution 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 of the board of directors. In the year ended  

December 31, 2022, the Company made matching  

contributions totaling $39,000 ($59,000 in 2021).  

New standards and amendments not applied in the  

Annual Report for 2022. 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:  

Standard  

Content  

Effective date  

EU endorsed as of December 31, 2022  

Amendments to IAS 1 Presentation of

Amendments to IAS 1 require companies to disclose their material accounting policy  

1-Jan-23  

Financial Statements and IFRS  

information rather than their significant accounting policies.

Amendments to IFRS  

Practice Statement 2: Disclosure of  

Practice Statement 2 provide guidance on how to apply the concept of materiality to  

Accounting Policies  

accounting policy disclosures.  

Amendments to IAS 8 Accounting  

Accounting estimates defined as "monetary amounts in financial statements that are  

1-Jan-23  

Policies, Changes in Accounting  

subject to uncertainty".

Amendment clarifies what changes in accounting estimates are  

Estimates and Errors: Definition of  

and how these differ from changes in accounting policies and corrections of errors.  

Accounting Estimates  

Amendments to IAS 12 Income Taxes:

Amends IAS 12 such that the initial recognition exemption no longer applies to  

1-Jan-23  

Deferred Tax related to Assets and  

transactions that give rise to equal taxable and deductible temporary differences.  

Liabilities arising from a single  

transaction  

Not endorsed by EU as of December 31, 2022  

Amendments to IAS 1 Presentation of

The amendments specify that the conditions which exist at the end of the reporting period  

1-Jan-24  

Financial Statements: Classification

are those which will be used to determine if a right to defer settlement of a liability exists.  

of Liabilities as Current or Non-  

Management expectations about events after the balance sheet date are not relevant to  

current and Classification of  

the determination.

In addition, amendments specify that covenants to be complied with  

Liabilities as Current or Non-current -

after the reporting date do not affect the classification of debt as current or non-current  

Deferral of effective date; and Non  

at the reporting date.

Covenant details should be disclosed in notes to financial  

current Liabilities with Covenants  

statements.  

Amendments to IFRS 16 Leases: Lease

Specifies how a sale and leaseback is accounted for when reporting after the date of the  

1-Jan-24  

Liability in a Sale and Leaseback  

transaction.  

3. RISK MANAGEMENT AND DEBT  

The Group’s activities expose it to a variety of risks:  

liquidity risk, market risk (including foreign exchange  

risk and interest rate risk) and credit risk. The primary  

responsibility for Asetek’s risk management and  

internal controls in relation to the financial reporting  

process rests with executive management.  

Asetek’s internal control procedures are integrated in  

the accounting and reporting systems and include  

procedures 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.  

time of the release of the financial statements. In  

addition, Management has discussed short-term debt  

financing with a bank to secure financing if a shortfall  

occurs before the funding is received from the  

planned equity offering. The bank has indicated  

willingness to provide bridge financing for the shortfall  

period.  

If the offering is completed with net proceeds of DKK  

115 million, the Company considers, based on given  

current knowledge, that the Company’s cash position  

will be sufficient to meet the Company’s requirements  

for the year 2023.  

The Company’s budgets and plans are based on best  

estimates of the future at the time of issuing this  

annual report. However, such plans relate to future  

events and the fulfillment of such are by nature  

subject to uncertainty. If actual results in 2023 differ  

from expectations, or sufficient funding is not  

established through the equity offering or otherwise,  

the Board of Directors and Management will need to  

take mitigating actions, such as reduce costs and  

pursue sale of certain Group assets. Although the  

Board of Directors and Management based on this  

assessment considers that Asetek will have adequate  

liquidity resources available to finance the operations  

of the Group for the coming year, the above indicate  

that a material uncertainty exists that may cast  

significant doubt on the Group’s ability to continue as  

a going concern. Refer to Note 1.1.  

The Group’s corporate finance team monitors risk of a  

shortage 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 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 Meetings in April  

2022 and 2021, the Board was authorized to acquire  

the Company’s own shares and subsequently initiated  

a share buyback program. In 2022, the Company did  

not repurchase shares. In 2021, the Company  

repurchased a total of 400 thousand common shares  

Liquidity risk. The Group incurred losses from  

operations and negative cash flows from operations  

from inception through 2015; positive operating cash  

flows and operating income were first generated in  

2016 and continued through 2021. In 2022, the  

Company incurred operating loss of $5.4 million and  

had operating cash flows of ($8.4 million). As of  

December 31, 2022, the Company has working capital  

of negative $6.3 million and non-current liabilities of  

$1.7 million. The Company believes that its cash  

position and the liquidity available from its operations,  

external borrowings and other sources currently  

available is sufficient to satisfy its working capital  

requirements until around mid-May, 2023. From then  

on the Company expects a cash shortfall, mainly as a  

result of cash balances (including cash inflows from  

operations) being allocated to capital expenditures  

related to the construction of a new headquarter  

facility. As a result, the Company plans to raise gross  

proceeds of approximately DKK 140 million (USD 20  

million), with expected net proceeds of DKK 115  

million (USD 16 million), in a public equity offering.  

The equity offering is expected to occur in May 2023  

and the net proceeds are expected to be available  

May 15, 2023. The offering is fully underwritten as of  

March 7, 2023 subject to conditions not met at the  

PERFORMANCE - PRECISION - PASSION  

on the open market for a total cost of $4.8 million.  

When considering payment of dividends or Asetek  

share purchases, the Board takes into consideration  

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:  

AS OF DECEMBER 31, 2022  

On Less

than 3  

3 to 12  

1 to 5  

(USD 000's)  

Demand  

months  

months  

years  

Total  

Construction commitments  

-

(6,873)  

(14,622)  

(2,828)  

(24,323)  

Lines of credit  

(18,971)  

-

-

-

(18,971)  

Leases  

-

(270)  

(832)  

(1,806)  

(2,908)  

Payables and accrued liabilities  

-

(13,589)  

(589)  

-

(14,178)  

(18,971)  

(20,732)  

(16,043)  

(4,634)  

(60,380)  

AS OF DECEMBER 31, 2021  

On Less

than 3  

3 to 12  

1 to 5  

(USD 000's)  

Demand  

months  

months  

years  

Total  

Line of credit  

(743)  

-

-

-

(743)  

Leases  

-

(238)  

(787)  

(1,888)  

(2,912)  

Payables and accrued liabilities  

-

(22,943)  

(780)  

-

(23,723)  

(743)  

(23,180)  

(1,567)  

(1,888)  

(27,378)