Airthings — Annual Report 2022
1
Annual Report
2022
Airthings — Annual Report 2022
2
2022 total revenue of
USD 35.4 million
and 59% GPM with improved
cost base
Signed AfB contract worth
USD 4.6 million
for global enterprise customer
Launch of
Energy Efciency
Toolkit
a signicant step in helping
Airthings for Business user
reduce the energy consumption
of buildings
Total ARR of
USD 3.6 million
up 24% YoY
Growing awareness around
Indoor Air
Quality (IAQ)
including White House summit
in October 2022
Released new
Consumer app
an enhanced vehicle for adding
continuous value adding services to
our consumer product portfolio
GROUP TOTAL REVENUE
(USD million)
2021 2022
+5%
YoY
33.7
35.4
TOTAL GROSS PROFIT
MARGIN
2021 2022
-2pp
YoY
59%
61%
ANNUAL RECURRING REVENUE
(USD million)
2021 2022
+24%
YoY
2.9
3.6
Key
highlights
1
2
3
4
5
6
Airthings — Annual Report 2022
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The year in brief
Airthings ASA reported a 5% growth in revenue in 2022 with the total revenue coming in at
USD35.4million. Growth was solid across the Airthings for Business segment, with a slight decrease
in the Consumer and Pro segments. End-user demand has held up well throughout the year,
although the decline reflects channel partners in the consumer segment reducing inventories.
Annual Recurring Revenue (ARR) came in at USD 3.6 million at the end of 2022, representing a growth of
26% from 2021. The growth primarily reflects the strong progress in the Airthings for Business segment —
a segment that made a step change from USD 6.9 million in revenues in 2021 to USD 10.3 million in 2022.
Gross profit margin was 59% for the full year, which was a decline from 2021 mainly due to changes
in the product and channel mix in the Consumer segment and higher component prices. This
was partly offset by a higher share of recurring revenue from the Software-as-a-Service offering
in Airthings for Business. Recurring revenues in this area generate gross profits of over 80%.
Despite the uncertain market outlook, Airthings can look back at several significant highlights throughout
2022: the releases of View Radon and Pollution for consumers, launching Space CO
2
Mini for Airthings
for Business, moving to the main list on the Oslo Stock Exchange, launching Airthings in the Australian
market, and receiving a Gold rating from EcoVadis. We see significant growth potential for 2023 after
building up product stock and look forward to delivering a strong market momentum going forward.
1Q
Airthings added 2 new devices to the
View Series at the CES conference,
complementing the line with View Radon
and View Pollution. The company also
received a Silver Sustainability Rating from
EcoVadis, putting the company in the top
25% of companies scored.
3Q
Airthings launched for consumers
in the Australian market, further
cementing its position as a leader
in the global air quality market.
Airthings also became the first
company to introduce a free 5-year
extended warranty for all their indoor
air quality monitors for consumers.
2Q
Airthings ASA became a publicly listed company on
the main list of the Oslo Stock Exchange, moving
over from the Euronext Growth trading platform it
had been on since October 2020. Both View Radon
and View Pollution began shipping to customers,
accelerating market traction and marketing
activities.
4Q
The fourth quarter included the successful launch of the
newest monitor from Airthings for Business, Space CO
2
Mini,
with an impressive 10+ years of battery life. Airthings teamed
up with ventilation company Lindab in Norway to develop
a solution to optimize buildings. Lastly, EcoVadis upgraded
the sustainability rating they gave Airthings to a Gold Medal,
moving Airthings into the top 5% of companies scored
globally.
Quarterly highlights
Airthings — Annual Report 2022
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This is Airthings ASA
Airthings is a leading global technology company of award-winning radon and indoor
air quality solutions for homeowners, businesses, and professionals. Founded in 2008,
Airthings is on a mission to ensure that people and businesses around the world recognize
the importance and impact of indoor air quality and take control of both health aspects and
energy consumption through simple, affordable, and accurate technology solutions.
Airthings’ products have made radon detection
and indoor air quality monitoring easy to deploy,
accurate, and user-friendly. Our technology has
received several accolades including the TIME’s
Best Inventions award and CES Innovation Award
Honors. Frost & Sullivan positions Airthings as an
industry leader in the global indoor air quality
market in their 2021 Global Indoor Air Quality
Systems report and EcoVadis awarded Airthings
a Gold Medal in their Sustainability Rating.
Headquartered in the heart of Oslo, Norway, and
with offices in the US and Sweden, the company
is growing from a current base of over 140
employees from more than 35 nationalities.
Our story
Every idea starts with a problem, and radon
testing for homeowners had not improved in
almost 30 years. Concerned consumers only
had two options – to call a professional to test
their radon levels, or to purchase a single-use
charcoal test which was then sent to a lab for
analysis. Several particle physicists working
together at CERN (European Organization
for Nuclear Research) saw an opportunity to
improve the radon market and help consumers
and businesses take control of their indoor
air quality. This was the foundation for the
establishment of Airthings in 2008.
We have since branched out from a pure
radon focus, into monitoring and controlling
a wide range of air quality issues for homes,
businesses, and professionals. On top of this,
our products also enable significant energy
savings in buildings and contribute to reduced
emissions and a lighter environmental footprint.
International expansion & recognition
Airthings have taken a global distribution
approach, combining a strong presence
in leading online stores with availability in
nearly 3,000 CVS stores and 1,300 Home
Depot stores in the US, and a wide range of
regional and national retail chains in several
other countries. Airthings also has strong
relations with leading B2B partners and
Airthings — Annual Report 2022
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strengthened its position in the business
market with the collaboration with Lindab in
Norway, a leader in the ventilation market, to
develop a solution to optimize buildings.
Our technology
Since the start in 2008, Airthings has introduced
a steady stream of innovative solutions for
consumers, businesses, and professionals to tackle
indoor air issues such as radon, particle pollution
(particulate matter, PM 2.5), carbon dioxide
(CO
2
), mold risk, airborne chemicals (VOCs)
and virus risk. Airthings for Business Indoor Air
Quality (IAQ) monitors can be used to satisfy air
requirements for the WELL Building Standard, and
the products are RESET accredited, demonstrating
our high standards in the IAQ market.
The heart of our system is in the cloud
where we turn data into advanced analytics.
Airthings is gathering tremendous amounts of
anonymized data from sensors in homes and
buildings around the world, which are being
used to add real insights for our customers.
From industrial design and radio protocol
to app creation, software, and firmware, our
technology and solutions are developed
in-house. Most of our products are smart products
with corresponding apps, online dashboards,
advanced cloud analytics, and APIs. Airthings
now offers digital radon detectors as well as
smart indoor air quality monitors and solutions
for professionals, homes, schools, offices, and
other commercial buildings, and is continuously
adding new features. This is earning us our
reputation for true leadership in the industry.
Airthings — Annual Report 2022
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2022 revenue and gross profit margin (USD 1,000)
2021
59%
57%
2022
23,562
23,037
2021
61%
59%
2022
6,942
10,313
2021
77%
84%
2022
3,167
2,075
Business overview
Airthings is a hardware-enabled software company developing innovative products
and systems for monitoring indoor air quality, radon, and energy efficiency. Airthings’
continuing goal is to be a global leader in these areas. Airthings sells to the consumer
market, the commercial business market, and to professionals within radon and air
quality monitoring, reporting across the three business segments Airthings for Consumer
(Consumer), Airthings for Business (AfB), and Airthings for Professionals (Pro).
Airthings for
Consumer
(Consumer)
Airthings for Consumer
combines a range of top-of-
the-line air quality monitors
with software solutions to
enable anyone striving to create
and maintain a healthy home
environment. In 2022, revenue
in this segment came in at
USD 23.0 million, a decrease
of 2% compared to 2021.
The largest market is currently
in the US. Airthings’ strategy is
to expand our global presence
via our own webshop and
through selected e-commerce
partners and retailers worldwide.
Airthings for
Business (AfB)
Airthings for Business is our B2B
segment, offering air quality
solutions to schools, office
buildings, and other commercial
buildings. Launched in 2019,
Airthings for Business has grown
significantly over the last three
years and sees strong momentum.
Revenue in 2022 reached
USD10.3million, an increase of
49% over 2021. An increasing share
of this is recurring revenue, based
on a Software-as-a-Service model.
Customers can monitor indoor
air quality with actionable insights
and remotely make decisions
to save energy and improve
productivity and well-being.
Airthings for
Professionals
(Pro)
Airthings for Professionals
provides an NRPP/NRSB–
certified radon measurement
device tailored to home
inspectors and professionals.
Measurement professionals
enjoy an easy-to-use application
and a dashboard to organize
their business. Airthings offers
devices, calibration services,
leasing options, and an Affiliate
Program for its users. Our Pro
segment decreased by 35%
compared to 2021, totaling
USD 2.1 million in revenue.
Airthings — Annual Report 2022
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Dear Airthings Community,
2022 was a challenging year in many ways,
with consumers and businesses around the
world being impacted by high inflation, higher
interest rates, soaring energy prices, and
a more uncertain geopolitical outlook with the
devasting war in the Ukraine. As a result, we
at Airthings experienced slower growth, with
our channel partners responding to higher
uncertainty by reducing their inventories.
On the positive side, our sell-through of consumer
products to end-customers continued to see
strong growth also in 2022 with a 23% increase,
and revenue in the Airthings for Business
segment grew by almost 50%. Our value
proposition remains solid, as the importance
of healthy air and energy-efficient buildings
is becoming even more apparent both to
consumers, businesses, and public authorities.
Airthings is a purpose-driven company that
cares about making a difference for our people,
and our planet. Our purpose is ‘Empowering
the World to Breathe Better’, and we have
continued our work to increase global air
quality awareness and promote Airthings
as the best solution to ensure that people
everywhere breathe cleaner air with less energy
consumption. Last year we had more than
3million unique web sessions on airthings.com.
We continue full steam ahead on our sustainability
journey, and by gaining a deeper understanding
of our impact we are both able to help our
customers make sustainable decisions and to
improve our practices significantly. We continue
to uphold our commitment to the UN Sustainable
Development Goals (SDGs) and the seven SDGs
we have prioritized; climate action, decent work
and economic growth, sustainable cities and
communities, responsible consumption and
production, reduced inequalities, good health
and well-being, and quality education. We are
really making progress towards some of these
goals, and as one example I can proudly say
that we are now monitoring the air for almost
500,000 children in classrooms around the world.
Buildings account for around 40% of global
energy consumption
1
, and together with our
Airthings for Business partners we create smart
insights to help facility managers and building
owners operate their buildings more efficiently
and sustainably. We make their job easier by
enabling proactive facility management instead
of reactive. Our Airthings for Business customers
can see and solve problems in their buildings
before they are detected by tenants and move
away from manual timer-based to demand-based
Heating, Ventilation, and Cooling (HVAC). Here
in Norway, more than 70 different Norwegian
municipalities are now using our solutions to
manage their buildings, and we also continue
to grow internationally. We signed our largest
ever Airthings for Business contract of close
to USD 5 million with an undisclosed global
enterprise customer last year. Around 80% of the
buildings that will exist in 2050 have already been
built
2
, and we see a tremendous opportunity
in making existing buildings smarter through
easily understandable and accessible data from
smart sensors. This will both reduce energy
waste and global GHG emissions and provide
healthier indoor environments for the people
Letter from the CEO
1
https://c2e2.unepdtu.org/wp-content/uploads/sites/2/2016/11/gabc-global-status-report.pdf
2
https://www.weforum.org/agenda/2022/11/net-zero-cities-retrofit-older-buildings-cop27/
Airthings — Annual Report 2022
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living, working, or studying in these buildings.
Our new and innovative Energy Efficiency Toolkit
is a key component in the energy optimization
offering in Airthings for Business, and we will
continue to develop and improve this toolkit to
add more and more value for our customers.
Our products in the Airthings for Business
solutions have delivered incredible results, with
customers experiencing energy savings of more
than 20%. Our customers have also saved about
5,000 tons of CO
2
equivalents since 2021.
We also help homeowners visualize what is
in the air they breathe and enable them to
reduce their exposure to indoor air pollutants.
Interviews, feedback, and insights have
revealed that most of our customers are
improving their air quality by bringing in more
ventilation, installing radon mitigation systems,
and deploying air purifiers, humidifiers, or
dehumidifiers. Airthings’ products hence allow
consumers to make small changes around their
home and instantly see that it is working.
Airthings is also working to ‘clean our own house’
and have incorporated sustainability into our
day-to-day operations. We have dened circular
principles that we follow for all new product
development, ensuring that all our new devices
are designed, sourced, and manufactured
responsibly. As an example, this optimized
process has been used in the production of our
newest product, the Space CO
2
Mini, which has
the lowest manufacturing environmental impact
among all our products and a battery lifetime
of more than 10 years. To underline the quality
and longevity of our products we last year
introduced a 5-year extended warranty for all our
consumer devices, and we will continue our work
to optimize all future products for the benefit
of both our customers and the environment.
I am glad and proud to see that our efforts are
being recognized. In February 2022 we received
a Silver sustainability rating from the renowned
rating agency EcoVadis, and this has now been
upgraded to a Gold rating. This places us
among the top 5% of all companies evaluated.
As the CEO of Airthings, I speak for all of us
when I say we remain fully committed to the
UNSustainable Development Goals (SDGs), and
we strongly believe that our solutions have the
potential to improve many of the environmental
and societal challenges we face. We commit
to continually improving the integration of
the UN Global Compact and its principles
into our business strategy, culture, and daily
operations. We also commit to sharing this
with our stakeholders. At Airthings we believe
a sustainable business is a good business.
Airthings’ long-term outlook is supported by
lasting factors and megatrends and is becoming
a global leader in air quality monitoring
and energy-saving solutions. Airthings will
continue to focus on creating solutions for
people, for homes and for buildings around the
world, making homes and buildings smarter,
healthier, and more energy efficient. With our
highly differentiated products and a scalable
business model within health, wellness, and
sustainability, there is an enormous market
opportunity over the coming years.
Rounding off, I would like to take this opportunity
to thank our team of highly skilled and
passionate employees for the hard work they
have put in over the last year to enable this list
of accomplishments. Over the past year we
have welcomed many new members to the
Airthings family, and I look forward to working
together with you all in the years to come.
All the best,
Øyvind Birkenes
CEO, Airthings
Airthings — Annual Report 2022
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Airthings is a hardware-enabled software
company developing, marketing, and offering
innovative products and systems for monitoring
indoor air quality, radon, and optimizing energy
consumption. The company aims to be the global
leader in these areas. The company sells to the
consumer market, the commercial business and
public market, and to professionals within radon
and air quality monitoring. Airthings also reports
across these three business areas; Airthings for
Consumer (Consumer), Airthings for Business
(AfB), and Airthings for Professionals (Pro).
Headquartered in Oslo, Norway, Airthings ASA
has two wholly owned subsidiaries, Airthings
America Inc. in the US and Airthings AB in Sweden.
Airthings ASA – the parent company of the
Airthings Group – was admitted to trading
on Euronext Growth in Oslo in October
2020 and conducted a transition to the
main Oslo Stock Exchange in June 2022.
Airthings is a global provider of indoor air quality
solutions, with the key markets of the US and
Europe representing 71% (71%) and 29% (29%)
of revenue in 2022, respectively. The company’s
strategy is to work closely with e-commerce
partners, premium retailers, key commercial
B2B partners, and home inspectors and radon
professionals to provide our premium solutions
to customers across all three business segments
through the most effective sales channels.
Amazon currently represents the company’s
largest sales channel, mainly directed towards
consumers. Going forward, Airthings will continue
its global expansion by growing its presence
with both new and existing partners worldwide.
Airthings began as a company focused on
the consumer market. With the launch of
Airthings for Business in 2019, however, the
company opened new market opportunities and
strengthened its business model. In addition
to hardware sales, revenues for Airthings for
Business are composed of high-margin recurring
revenues through a Software-as-a-Service
model. Airthings for Business saw continued
robust growth in 2022, with recurring revenue
increasing as a share of total revenue.
Key developments and future focus
Overall, 2022 represented a difficult year for
Airthings with a combination of several macro
headwinds demonstrating the importance of a
heightened focus on execution and discipline
going forward. While external factors such
as inflation and rising interest rates, and the
corresponding effect they had on demand, are
beyond the company’s control, it also exposed
a need for better planning and capital allocation
to avoid future situations like the buildup in
inventories witnessed over the course of the
year. Optimizing business operations, reducing
inventories, and improving the cash position are
key focus areas for 2023 and beyond. Succeeding
with these focus areas should return Airthings
to its long-term profitable growth trajectory.
Events after the reporting period
RCF — Airthings announced a USD8million
revolving credit facility (RCF) with Danske Bank
on 23January2023. The RCF will support
Airthings’s growth ambitions across both the
Consumer and Airthings for Business (AfB)
segments. The new financing agreement has
been entered on favorable commercial terms
for a one-year period with annual renewal.
Share capital increase — Airthings announced
the successful completion of a private
placement raising NOK75million in gross
proceeds on 13February2023 and which
Board of Directors Report
Airthings — Annual Report 2022
10
was approved by an extraordinary general
meeting on 8March2023. The net proceeds
from the raise will be used to strengthen the
company’s financial and liquidity position.
Financial summary
The consolidated financial statements of the
Airthings Group (“the Group”) are presented
under the International Financial Reporting
Standards (IFRS) as endorsed by the European
Union (EU). The presentation currency of the
Group’s IFRS figures is USD. The functional
currency of the parent company is NOK.
All financial statements in this report are
presented on a going concern basis in
accordance with the Norwegian Accounting
Act section 3-3a, and the Board of Directors
confirms that the prerequisites for a going
concern assumption are indeed present.
Airthings grew both revenue and gross
profit during 2022, despite a challenging
macroeconomic environment. Strong growth
in Airthings for Business offset softness in
both the Consumer and Pro segments.
Income statement
Revenues in 2022 amounted to USD35.4million,
up 5% compared with USD33.7million in
2021. Gross profit grew by 1.5% in the period,
reaching USD21.0million for 2022. The gross
margin for the full year 2022 came in at 59%. This
compares with 61% in 2021, with the decrease
mainly attributed to changes in the product and
channel mix in the Consumer segment, higher
component prices, and a modest inventory
impairment in the Airthings for Business segment
related to the 2020 acquisition of Airtight. EBIT
decreased from a loss of USD9.4million in 2021
to a loss of USD14.7million in 2022. This reflects
macroeconomic pressures restraining topline
growth and a number of one-off costs including
the transition to the main Oslo Stock Exchange
and restructuring costs. Depreciation held
mostly constant, coming in at USD1.4million
in 2022 compared to USD1.3million in the
prior year. In addition, a USD1.5million
impairment of technology was taken in
relation to the 2020 acquisition of Airtight.
Net financial items contributed a positive
USD1.0million in 2022, compared with
a positive USD0.1million in 2021. The
company had no interest-bearing debt in
2022, and the net financial items thus consist
primarily of exchange rate fluctuations between
USDand NOK. Net loss before taxes was
USD13.7million in 2022, compared to a net
loss before taxes of USD9.3million in 2021.
Tax income was USD3.1million. This generated
a net loss of USD10.6million which compares
to a net loss of USD7.3million in 2021.
Balance sheet
Airthings Group had total assets of
USD63.7million at the end of 2022, down from
USD83.7million at the end of 2021. Current
assets amounted to USD47.2million, including
cash and cash equivalents of USD13.3million
and inventories of USD18.7million. Non-current
assets amounted to USD16.5million,
which mainly comprises right of use assets,
deferred tax assets, and remaining goodwill
related to the Airtight acquisition in 2020.
Airthings Group had total liabilities of
USD12.8million per December31, 2022,
down from USD15.8million at the end of
2021. Total liabilities consist primarily of lease
liabilities, trade payables, contract liabilities,
and other provisions. In 2022, Airthings Group
increased its share capital by NOK21759.09 to
NOK1739923.46 allocated across 173992346
shares, each with a nominal value of NOK0.01.
The increase was driven by a share issuance in
connection with the employee option program.
As of 31 December 2022, total equity amounted
to USD50.9million, corresponding to an equity
ratio of 80%. This compares to total equity of
USD67.8million and an equity ratio of 81% in 2021.
Airthings — Annual Report 2022
11
Cash flow statement
Airthings Group’s cash flow from operating
activities was negative USD22.2million in 2022,
down from negative USD15.9million in 2021.
This was driven by losses before tax of negative
USD13.7million as well as a USD7.3million
increase in inventories. Both represent key
focus areas for improvement going forward.
Total cash flow from investments was
USD-2.2million in 2022, compared to
USD-1.0million in 2021. The main driver in 2022
were investments in development activities of
USD2.1million. Cash flow from financing was
USD-0.5million in 2022, and was primarily
composed of payments on lease liabilities, with
a modest offset from the proceeds of equity
issuance stemming from employee options.
Net foreign exchange differences resulted in
a cash flow of USD -3.9million over 2022.
Cash and cash equivalents hence declined
to USD13.3million at year-end 2022, down
from USD42.2million at the end of 2021.
The net cash spending reflects headwinds
the company faced to top-line growth and
a corresponding build up in inventories.
Allocation of net profit
The consolidated accounting loss for 2022
was USD 10.6million, with the proposed
allocation of the net profit for the year
shown in the Annual Financial Statement.
PARENT COMPANY ACCOUNTS
(Figures for 2021 in brackets)
The annual accounts for the parent company
Airthings ASA have been prepared
according to Norwegian Generally Accepted
Accounting Principles (NGAAP). The functional
currency of the parent company is NOK.
Airthings ASA’s revenue from sales amounted
to NOK 319.7million (285.8) and other
revenue to NOK 0.0million (0.2). Gross
profit was NOK 177.5million in 2022
(170.4). Operating expenses amounted to
NOK307.0million (250.2), and loss before tax
was NOK141.8million (-86.5). Tax income was
NOK30.3million in 2022 (17.8), generating
a net loss of NOK111.6million (-68.7).
Total assets amounted to NOK585.4million at
year-end 2022 (694.7), whereof current assets
represented NOK404.1million (551.9).
Total equity was NOK502.0million
per December31,2022 (607.0).
Current liabilities was NOK82.2million per
year-end 2022 (78), whereas the parent company
had long term liabilities of NOK1.2 million (9.6)
related to an employee share option program.
Net cash flow from operating activities was
negative NOK225.5 million (101.5), and net
cash flow from investing activities negative
NOK20.9 million (49.3). Net cash flow from
financing activities was positive NOK3.0million
(-14.5). Cash and cash equivalents in
the parent company hence declined to
NOK116.5 million per December31, 2022
(360.0), reflecting the investments to facilitate
the rapid upscaling of the company.
RISKS AND RISK MANAGEMENT
The Group is exposed to a range of risks
affecting its financial performance, including
market risk, credit risk and liquidity risk. The
Group seeks to minimize potential adverse
effects of such risks through sound business
practice, risk management, and hedging. Risk
management is a continuous process and an
integrated part of the Group’s business. When
operating across multiple markets, Airthings is
exposed to a range of risks that may affect its
business. The key risk areas are discussed below.
Liquidity
Liquidity represents the risk where the Group
may potentially encounter difficulty in meeting
obligations associated with financial liabilities
that are settled by provision of cash or
another financial asset. The Group supervises
Airthings — Annual Report 2022
12
its risk by monitoring its working capital,
and overdue trade receivables. The Group
had a cash position of USD13million as
of 31December2022, which the Board of
Directors considered lower than desired to fund
the Group’s continued operations. As noted
above, subsequent to the end of the reporting
period the company secured a USD8million
revolving credit facility and conducted a
NOK75million capital raise to strengthen
its liquidity position. Furthermore, the Group
reached an agreement with its primary supplier
to push out portions of production from 2023
into 2024, and thus anticipates inventory
levels to decline. The liquidity risk is hence
considered to be at a reasonable level.
Credit
Credit risk represents the possibility of
a counterparty not meeting its obligations
under a financial instrument or customer
contract, leading to a financial loss.
The Group is mainly exposed to credit
risk from its operating activities.
The credit risk is generally low in the Consumer
segment, where the vast majority of sales are
made to well-established and creditworthy
third parties. The credit risk is somewhat higher,
but still deemed to be generally low, in the
Airthings for Business segment for the same
reason. The Group has close connection with
its customers and receivable balances are
monitored on an ongoing basis. It is the Group’s
policy that all customers wishing to trade on
credit terms are subject to credit verification
procedures, which include an assessment of
credit rating, short-term liquidity, and financial
position. Exceptions to the standard credit
terms the Group offers must be approved
by the Finance department of Airthings.
The Group’s exposure to losses has
historically been low. However, the increased
operations of the Group outside the US
and home markets exposes Airthings to
different credit risk environments. The Board
of Directors deems credit risk to be at an
acceptable level given the current operational
circumstances and outlook of the Group
.
Foreign currency
Foreign currency risk is the risk that the fair
value or future cash flows of an exposure
will fluctuate because of changes in foreign
exchange rates. The Group is exposed to
currency fluctuations due to the international
nature of its operations. The Group’s exposure
to the risk of fluctuations in foreign exchange
rates relates primarily to the Group’s operating
activities (revenue and expenses denominated
in a foreign currency) and the Group’s net
investments in foreign subsidiaries. A significant
part of revenues is denominated in USD, with
a small portion incurred in NOK, EUR and CAD.
Most of operating expenses are incurred in
NOK. Further, the Group could also potentially
be negatively affected by fluctuations in other
currencies in the future. The Group does not
currently hedge currency exposure with the
use of financial instruments but does employ
natural hedges, e.g. retaining revenues in USD
to make payments to suppliers with USD as
the contract currency, to the extent possible
and monitors the net exposure over time.
Interest rate
Interest rate risk is the risk that the fair value of
future cash flows of a financial instrument will
fluctuate because of changes in market interest
rates. The Group’s borrowings have historically
been exposed to interest rate fluctuations. As all
borrowings were repaid in January 2021, the Group
carried no significant interest rate risk in 2022.
Other risks
War in Ukraine — the ongoing war does not
currently impact the Group directly, as it has
no operating presence in either Russia,Belarus
or Ukraine. Indirect effects however, such as
financial market volatility, sanctions related
knock-on effects, general economic market
Airthings — Annual Report 2022
13
conditions and other future responses of
international governments, might have an
impact on the Group’s financial results and
financial position. The Group’s management
continues to monitor the situation and has an
ongoing assessment of potential impact on the
Group’s financial results and financial position.
Potential financial crises — the failure of Silicon
Valley Bank (SVB) on 10March2023 and the
unease it has caused in financial markets
has not had any direct impact on the Group.
Indirect effects however, such as a weakening
of consumer confidence in the US, the
Group’s largest market, may have an impact
on the Group’s financial results and financial
position. The Group’s management continues
to monitor the situation and has an ongoing
assessment of potential impact on the Group’s
financial results and financial position.
AIRTHINGS’ SUSTAINABILITY JOURNEY:
FOR PLANET, FOR PEOPLE, FOR BUSINESS
Airthings is deeply dedicated to sustainability,
working continuously to improve its
environmental, social, and governance
practices. With a clear vision for the future,
Airthings has set ambitious sustainability goals
for 2026, which it seeks to achieve through
a three-dimensional framework focused
on the planet, people, and business.
Airthings is a proud member of the UN Global
Compact, aligning its business practices
with the ten principles aimed at promoting
responsible business. The company prioritizes
the United Nations Sustainable Development
Goals (SDGs), integrating them into all aspects
of its operations and prioritizing 7 SDGs where
they can have the greatest impact. Airthings
focuses on SDG#3 – Good Health & Wellbeing
and SDG#13 – Climate Action by reducing the
intensity of the company’s carbon footprint,
while helping its customers optimize energy
consumption and air quality in their buildings.
In 2022, Airthings made substantial progress
toward its sustainability goals. The number
of Airthings for Business devices in the
field has increased from over 24,000 in
2021 to over 55,000 by the end of 2022.
Playing a critical role in helping customers
to save >4,800 tons of CO
2
. At the same
time, Airthings has also reached >1 million
people through its educational resources.
The Company’s ESG management system
is rated with a Gold Standard by EcoVadis
sustainability rating, demonstrating its
commitment to sustainability and its success
in implementing initiatives to improve its ESG
practices. Its EcoVadis scorecard has improved
from 58 in 2021 to 73 in 2022, earning the
EcoVadis Gold Medal and scoring higher
than 97% of the companies rated within
the Electronics and Equipment category.
Through its efforts, Airthings has also launched
its first product designed with circular principles,
the Space CO
2
Mini, which has a lower
overall environmental impact than the rest
of the portfolio and a battery life of 10 years
or more. This product had a 58% decrease
in its carbon footprint, an 84% decrease in
emissions from PCBs, and a 74% reduction in the
environmental impact of plastic manufacturing
compared to the rest of the portfolio.
As a growing company, Airthings has expanded
into new markets and increased production
levels. Therefore we have seen an expected
increase in the total CO
2
e emissions year over
year, from 6691 tCO
2
e in 2021 to 7505 tCO
2
e
Airthings — Annual Report 2022
14
in 2022, with >99% of emissions falling under
scope 3 (indirect emissions). One point to note is
that Airthings has zero direct scope 1 emissions
and has decreased its direct scope 2 emissions
from 26 tCO
2
e in 2021 to 14 tCO
2
e in 2022.
This is mainly from a >20% decrease in energy
consumption in the Oslo headquarters in 2022.
Likewise, in 2022 Airthings improved its preventive
measures by establishing a new policy on anti-
bribery and corruption, with 100% of its main
manufacturers having approved its supplier’s code
of conduct. The Company has also established an
anonymous whistleblower platform for its entire
supply chain and obtained ISO 27001 certification
in January 2023.To learn more about how Airthings
and its products contribute positively to the
three dimensions of sustainability for the planet,
for people and for business, and how we are
working internally to improve in these dimensions,
please see our 2022 Sustainability Report.
Airthings values the well-being of its employees
and the communities where it operates,
establishing a Human Rights code of conduct and
grievance mechanism to ensure high standards
of labor practices, diversity, and inclusion.
The Company is committed to transparent
and ethical business practices and has robust
policies and procedures to prevent bribery and
corruption. 99% of employees have received
training in human rights, diversity, inclusion,
anti-bribery, and anti-corruption practices.
Norway’s Transparency Act requires companies to
carry out due diligence activities to ensure they
are operating responsibly, both in terms of human
rights and decent working conditions throughout
their supply chain. The law went into effect from
1 July 2022. Airthings has been working with
the framework prior to July2022, and initiatied
the due diligence process and risk assessment.
Airthings will publish its report before the end
of July2023 according to the regulations. For
more information regarding the Transparency
Act please visit www.airthings.com/sustainability
or read Airthings’ Sustainability Report.
The Company’s employees represent more
than 35 nationalities, with 28% identifying as
female. Airthings is working towards a gender
balance of 40—60% women in its overall FTE,
with a focus on teams where imbalances
exist. One of the company’s objectives is to
offer equal salary and career opportunities
regardless of gender. Airthings’s Board of
Directors contains 5 men and 4 women, and
includes 2 employee representatives.
Airthings — Annual Report 2022
15
Airthings ASA and subsidiaries are covered by
Directors and Officers liability insurance. The
insurance indemnifies directors and officers for
defense costs and potential legal liability arising
out of claims made against them while serving
on a board of directors and or as an officer.
The insurance policy is issued by a reputable,
specialized insurer with appropriate rating.
In 2022, the average number of FTEs was
124. Our employees have reported high
satisfaction with the working environment
with an Employee net promoter score (ENPS)
of 40 and we continuously strive to achieve
incremental improvements. Absence due to
sickness amounted to 1.40% in 2022. There
was one personal injury registered in 2022.
More information and equality statements
can be found at www.airthings.com
OUTLOOK
Airthings’s key focus for 2023 is to improve its
profitability and working capital situation as it
continues to grow its topline revenues. Improving
inventory management and reducing inventory
levels will, all else equal, improve the Group’s
liquidity. The Board and management share
a strong belief in continued positive market
demand for Airthings’s products and services
bolstered by lasting macro trends. Airthings’s
growth model has been backed by historically
high investments in technology, people, brand
awareness, and marketing, and the cost intensity
is expected to moderate into 2023 due to
increased scale and a higher share of high-
margin recurring revenue going forward. The
company aims to accelerate its path to profitability,
and expects gradually improving operational
leverage and improved unit economics to allow
for long-term EBITDA-margins above 25%.
This report contains certain forward-looking statements that involve risks
and uncertainties and that reflect current views about future events and
are, by their nature, subject to significant risks and uncertainties. There
are a number of factors that could cause actual results and develop
-
ments to differ materially from those expressed or implied by these
forward-looking statements. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot
assure you that our future results, level of activity, performance or
achievements will meet these expectations. You should therefore not
Øyvind Birkenes
CEO
Oslo, March 29, 2023
Liv Dyrnes
Board member
Lars Boilesen
Board member
Aksel Lund Svindal
Board member
Fredrik Thoresen
Board member
Niklas Copley Norin
Board member
Emma Tryti
Board member
Karin Berg
Board member
Geir Førre
Chairman of the Board
Chloe Emma Waller
Board Member
Airthings — Annual Report 2022
16
place undue reliance on forward looking statements.
Airthings considers sound corporate governance
to be a prerequisite for value creation,
trustworthiness, and access to capital. To secure
strong and sustainable corporate governance, it
is important that Airthings ensures appropriate
and healthy business practices, reliable financial
reporting, and an environment of compliance with
legislation and regulations across Airthings Group.
Airthings ASA is incorporated in Norway in
accordance with the Norwegian Public Limited
Liability Companies Act of 13 June 1997 no. 45
(the “NPLCA”) and is subject to Norwegian law.
The shares of Airthings are listed on Oslo Børs.
As a Norwegian public limited liability company
listed on Oslo Børs, Airthings complies with the
Norwegian Securities Trading Act, the Continuing
obligations for companies listed on Oslo Børs, the
Norwegian Public Limited Liability Companies Act
and all other applicable laws and regulations.
The Company endorses the Norwegian Code
of Practice for Corporate Governance issued
by the Norwegian Corporate Governance
Board on 14 October 2021, as amended
from time to time (the “NUES Code”).
The applicable governance principles in
Airthings are articulated in a set of corporate
governance principles which are approved by
the board of directors. These apply to all of
Airthings’ subsidiaries as well as Airthings ASA.
The below description follows the
same structure as the Code of Practice
and covers all sections thereof.
1. Main objectives for the company’s
corporate governance
The Board shall ensure that the Company has
good corporate governance to support the
achievement of the Company’s core objectives
on behalf of its shareholders and to create
a strong, sustainable company. The Board
believes that good corporate governance
requires openness and cooperation between
the shareholders, the Board and the
Management, employees, customers, suppliers,
public authorities and society in general.
The CG Policy is based on the
following main objectives:
• Open, reliable and relevant communication
with the outside world regarding the
Company’s business and matters
related to corporate governance;
• Equal treatment of the
Company’s shareholders;
• Independence between the Board, the
Management and the shareholders in
order to avoid conflicts of interests;
• A clear division of work between the Board
and the Management and the shareholders;
• Good control and corporate
governance mechanisms in order
to achieve predictability; and
• reducing the level of risk for
shareholders and stakeholders.
No deviations from the Code of Practice.
2. The business of the company
According to the Company’s articles of
association, its purpose is the development
of products and services related to air quality
and energy optimization of buildings, as
well as international marketing and sale
of these, investing in other companies or
development of other businesses, and all
that is related to the aforementioned.
Corporate
Governance Report
Airthings — Annual Report 2022
17
The principal objectives and strategies of
the Company are presented in the annual
report, and on the Company’s web site
and are subject to annual assessments.
No deviations from the Code of Practice.
3. Equity and dividends
The Board is committed to maintaining
a satisfactory equity ratio in the Company
according to the Company’s goals, strategy
and risk profile, thereby ensuring that there
is an appropriate balance between equity
and other sources of financing. The Board
will continuously monitor and assess the
Company’s capital requirements related to
the Company’s strategy and risk profile.
When deciding on dividends, the Company
will consider the Company’s financial position,
investment plans as well as the needed
financial flexibility for strategic growth.
The Board’s general authorisations to
increase the share capital and to buy own
shares will not ordinarily be proposed to be
granted for periods longer than until the next
Annual General Meeting of the Company
Any proposed authorizations to the Board to
increase the Company’s share capital shall
be restricted to defined purposes and shall
be dealt with as separate agenda items at
the general meeting. Board authorizations
shall generally be limited in time to the date
of the next annual general meeting, and in
any event to 30 June the same year. This also
applies to any authorization to the Board
for the Company to purchase own shares.
No deviations from the Code of Practice.
4. Equal treatment of shareholders and
transactions with close
The shares of Airthings ASA are listed on
Oslo Børs. All issued shares carry equal
shareholder rights in all respects, including
the right to participate and vote in General
Meetings, and there are no restrictions on
transfer of shares. The articles of association
place no restrictions on voting rights.
No deviations from the Code of Practice.
5. Shares and negotiability
Airthings ASA shares are freely tradable
and there are no restrictions on the sale
and purchase of the Company’s shares
beyond those pursuant to Norwegian
law. Each share carries one vote.
No deviations from the Code of Practice.
6. General meeting
The Board shall ensure that the Company’s
shareholders can participate at general
meetings. Notice of the meeting shall be
sent to the shareholders no later than 21
days prior to the meeting. The notices for
such meetings shall include documents
providing the shareholders with sufficient
detail for the shareholders to assess all
the cases to be considered as well as all
relevant information regarding procedures
of attendance and voting, including: (i) the
procedure for representation at the meeting
through a proxy, including a form to appoint
a proxy, and (ii) the right for shareholders to
propose resolutions in respect of matters
to be dealt with by the General Meeting.
The cut-off for confirmation of attendance
shall be set as short as practically possible
and the Board will arrange matters so that
shareholders who are unable to attend in
person, will be able to vote by proxy. The
Chair of the Board and the CEO are present
at the Annual General Meeting, and the
Chair of the Nomination Committee and
the auditor are normally present as well. An
independent person has historically been
elected to chair the Annual General Meeting.
No deviations from the Code of Practice.
7. Board composition and independency
The Board shall be composed in a way that
it can attend to the common interests of
Airthings — Annual Report 2022
18
all shareholders and meet the Company’s
need for expertise, capacity and diversity
and act independently of special interests.
The majority of the shareholder-elected
Board members shall be independent of
the Management and significant business
contacts. At least two of the members
of the Board shall be independent of
the Company’s major shareholder(s).
The Chair of the Board is elected by the
general meeting. The term of office for
members of the Board shall not be longer than
two years at a time. Members of the Board
may be re-elected for one or more new terms
The Board of Directors currently
consists of the following 9 members
Geir Førre Chairman
Aksel Lund Svindal Board member
Liv Dyrnes Board member
Lars Boilesen Board member
Emma Tryti Board member
Karin Berg Board member
Fredrik Thoresen Board member
Anlaug Underdal Board member —
Employee representative
Tore Rismyhr Board member —
Employee representative
An introduction to the members of the
Board of Directors and their experience
can be found on www.Airthings.com
No deviations from the Code of Practice.
8. The work of the board
The Board will seek to prepare annual plans
for its work with special emphasis on goals,
strategy and implementation. The Board’s
primary responsibility shall be participating
in the development and approval of the
Company’s strategy, performing necessary
monitoring functions and acting as an
advisory body for the executive management
team. Its duties are not static, and the focus
will depend on the Company’s ongoing
needs. The Board is also responsible for
ensuring that the operation of the
Company is compliant with the Company’s
values and ethical guidelines. The chair
of the Board is responsible for ensuring
that the Board’s work is performed in
an effective and correct manner.
The Board is regularly briefed on the
company’s financial situation.
The Board of Directors has established an
Audit Committee consisting of Liv Dyrnes
and Karin Berg. The function of the Audit
Committee is to prepare matters to be
considered by the Board and to support the
Board in the exercise of its management and
supervisory responsibilities relating to financial
reporting, statutory audit and internal control.
No deviations from the Code of Practice.
9. Risk management and internal control
The Board shall ensure that the Company
has sound internal control and systems
for risk management that are appropriate
in relation to the extent and nature of
the Group’s business activities.
The Board shall carry out regular assessments
of risk exposure, as well as an annual review of
the Group’s most important areas of exposure
to risk and its internal control measures
No deviations from the Code of Practice.
10. Board remuneration
The remuneration to the members of the Board
shall be determined by the annual general
meeting each year. The Board’s remuneration
shall reflect the Board’s responsibility,
expertise, use of time and the complexity of the
Company’s business activities. Remuneration
shall not be dependent on or linked to the
Company’s performance, and no options shall
be issued to the members of the Board.
Airthings AS issued options to Board member
Aksel Lund Svindal 1.April 2019 This was prior
Airthings — Annual Report 2022
19
to the company becoming a listed company
and before this policy was incorporated.
Aksel Lund Svindal currently holds 100 000
options at a strike price of 3.36. No options
have been issued to the members of the
Board after Airthings ASA became a listed
company and this policy was approved.
No deviations from the Code of Practice.
11. Management remuneration
The Board members, who are all independent
of the Company’s executive management,
decide the CEO’s salary and other
compensation, after recommendation
from the RemCom. The CEO’s salary and
bonus shall be determined on the basis of
an evaluation by selected members of the
Board, with emphasis on the CEO’s and the
Company’s overall performance. Any fringe
benefits shall be in line with market practice
and should normally not be substantial in
relation to the CEO’s basic salary. The Board
shall annually carry out an assessment of the
salary and other remuneration to the CEO.
No deviations from the Code of Practice.
12. Information and communications
The Company shall at all times provide its
shareholders, Oslo Børs and the financial
market in general with timely and precise
information. Such information will be given in
the form of annual reports, quarterly reports,
press releases, stock exchange announcements
and investor presentations. The Company’s
report on corporate social responsibility
shall be integrated in the annual report.
No deviations from the Code of Practice.
13. Take overs
In the event of a take-over process, the Board
has a duty to ensure that the Company’s
shareholders are treated equally and that the
Company’s activities are not unnecessarily
interrupted. The Board will also ensure that
the shareholders have sufficient information
and time to assess the offer. In the event of
a take-over bid, the Board will, in addition
to complying with relevant legislation
and regulations, seek to comply with the
recommendations in the Norwegian Code
of Practice for Corporate Governance.
No deviations from the Code of Practice.
14. Auditor
Each year, the auditor shall present to the
Board a plan for the implementation of the
audit work and a written confirmation that
the auditor satisfies established requirements
as to independence and objectivity. The
auditor shall participate in Board meetings
dealing with the annual accounts.
At the annual general meeting and/or in
the annual financial statements, the Board
shall present a review of the auditor’s
compensation as paid for auditory work
required by law and remuneration associated
with other concrete assignments.
No deviations from the Code of Practice.
Airthings — Annual Report 2022
20
Responsibility Statement
The Chief Executive Officer and the Board
of Directors confirm, to the best of our
knowledge, that the financial statements for
2022 have been prepared in accordance with
IFRS as adopted by the EU, with additional
information as required by the Accounting
Act, and give a true and fair view of the
Group’s Consolidated financial statements
and the Group’s assets, liabilities, financial
position, and results of the operations.
We also confirm that the report by the Board of
Directors provides a fair overview of the parent
company and the Group and its development,
financial results, and position, and describes
the Group’s key risks and uncertainties.
Statement of the Board
of Directors and CEO
Øyvind Birkenes
CEO
Oslo, March 29, 2023
Liv Dyrnes
Board member
Lars Boilesen
Board member
Aksel Lund Svindal
Board member
Fredrik Thoresen
Board member
Niklas Copley Norin
Board member
Emma Tryti
Board member
Karin Berg
Board member
Geir Førre
Chairman of the Board
Chloe Emma Waller
Board Member
Airthings — Annual Report 2022
21
Airthings’ objective is to provide strong value
creation and positive long-term returns to the
company’s shareholders. The Company plans
to achieve this by delivering on an ambitious
business plan, and through precise, timely and
relevant communication that enable investors
to evaluate the Company’s current status,
the prospects for profitable growth, and the
inherent operational and financial risks.
Investor relations
Clear and accurate communication with investors
and analysts, both in Norway and internationally,
is a high priority for Airthings. A key objective
for the company is to ensure that investors,
potential investors, other stakeholders, and the
market in general have simultaneous access
to accurate, clear, relevant, and up-to-date
information about Airthings. To facilitate this,
the Group will hold quarterly presentations
of its quarterly results, with attendance from
senior management. These presentations will
be open to the investor community, media,
and the public at large, and will also be made
available online. All investor relation activities
are conducted in compliance with applicable
rules, regulations, and recommended practices.
Devoted to good Corporate Governance
Airthings considers sound corporate
governance to be a prerequisite for sustainable
value creation and trustworthiness, and for
access to capital at a fair cost of capital.
Airthings’ stakeholders should demand
that the company follows healthy business
practices and ethical business conduct,
operates in compliance with all relevant
legislation and regulations across the Group,
and presents reliable financial reporting.
Airthings Board-approved governance
regime maintains governance documents
describing the principles for its business
conduct, which applies to all of Airthings’
subsidiaries as well as Airthings itself.
Employee Share Program
Airthings believes its employees should be
given the opportunity to participate in the value
creation and has established a share-based
payment program in which all employees are
granted share options upon employment.
For further details, please see note 6.8.
Share capital
On December 31, 2022, the share capital
in the company amounted to NOK 1 739
923.46, distributed across 173 992 346 shares
with a nominal value of NOK 0.01 per share.
Airthings has one class of shares, with each
share carrying one vote. Firda AS was the
largest shareholder with 34 780 124, or 20.0%,
of the share capital at the end of 2022.
Shareholders’ Authorization to the Board
to Increase Share Capital in the Group
On May 25, 2022 the Annual General Meeting
(AGM) gave the board of directors three
separate authorizations to increase share
capital; up to NOK172366 in connection with
investments general purposes and transactions
(NOK172366 remains), up to NOK123417 in
connection with a new incentive program and
current granted options (NOK11984remains),
and up to an aggregate nominal value of
NOK172366 to acquire treasury shares
(NOK172366 remains). All above authorizations
are valid until the Airthings AGM in 2023,
however, no longer than until June 30, 2023.
Shareholder information
Airthings — Annual Report 2022
22
Shareholder
Shares Ownership
Firda AS 34,780,124 20.0%
Verdipapirfondet KLP Aksjenorge 7,962,222 4.6%
Rabakken Invest AS 5,800,364 3.3%
Atlas Invest AS 5,637,468 3.2%
Wøien, Halvor 4,894,522 2.8%
Bolle, Erlend Peter Johnsen 4,819,722 2.8%
Victoria India Fund AS 4,558,131 2.6%
Koki Yoshioka 4,166,650 2.4%
TIN World Tech 3,025,292 1.7%
Brownske Bevegelser AS 3,000,000 1.7%
Other 95,347,851 54.8%
Total shares 173,992,346 100.0%
Financial calendar
1Q23 quarterly results May 4, 2023
Half-yearly report July 14, 2023
3Q23 quarterly results October 26, 2023
4Q23 quarterly results February 8, 2024
Analyst coverage
DNB Christoffer Wang Bjørnsen +47 24 16 91 43
Arctic Securities Kristian Spetalen +47 95 10 08 87
ABG Øystein Lodgaard +47 22 01 60 26
SEB Oliver Kielland +47 21 00 85 22
Carnegie Eirik Rafdal +47 22 00 93 78
Ownership structure —
Number of shares held
Number of
shareholders
Number
of shares
Proportion
of share capital
1—1,000 1,272 509,515 0.3%
1,001—10,000 1,188 4,819,926 2.8%
10 001—100,000 493 15,113,319 8.7%
100,001—500,000 88 19,096,833 11.0%
500,001— 500,001+ 49 134,452,753 77.3%
Total 2,739 173,992,346 100.0%
Airthings — Annual Report 2022
23
Airthings
Financials
Airthings — Annual Report 2022
24
Consolidated financial statements
Consolidated statement of profit or loss
Consolidated statement of
comprehensive income
Consolidated statement of financial position
Consolidated statement of cash flows
Consolidated statement of changes in equity
Notes to the consolidated financial statements
Section 1 — General information
and accounting policies
1.1 Corporate information
1.2 Basis of preparation
1.3 General accounting policies
1.4 Significant accounting judgements,
estimates and assumptions
Section 2 — Operating segments and
profit or loss items
2.1 Operating segments
2.2 Revenue
2.3 Other operating income
2.4 Employee benefit expenses
2.5 Other operating expenses
2.6 Depreciation and amortization
2.7 Finance income and costs
2.8 Income tax
Section 3 — Other operating activities
3.1 Inventories
3.2 Trade and other receivables
3.3 Contract liabilities
3.4 Trade and other payables
3.5 Provisions
Section 4 — Group structure
4.1 Overview of Group companies
Section 5 — Fixed assets
5.1 Intangible assets
5.2 Goodwill and impairment considerations
5.3 Property, plant and equipment
5.4 Right—of—use assets and
lease liabilities
Section 6 — Financial instruments and equity
6.1 Overview of financial instruments
6.2 Ageing of financial liabilities
6.3 Financial risk management
6.4 Cash and cash equivalents
6.5 Share capital and shareholders information
6.6 Share—based payments
6.7 Earnings per share
6.8
Changes in liabilities arising from
financing activities
Section 7 — Other disclosures
7.1 Remuneration to Management and Board
7.2 Related party transactions
7.3 Commitments and contingencies
7.4 Events after the reporting period
Table of Contents
Airthings — Annual Report 2022
25
Consolidated statement
of profit or loss
For the years ended 31 December
Amounts in USD 1,000 Notes 2022 2021
Revenues 2.2 35,424 33,671
Other operating income 2.3 - 28
Total revenue and other operating income 35,424 33,699
Cost of goods sold 14,465 13,041
Employee benefit expenses 2.4 16,654 15,127
Other operating expenses 2.5 16,090 13,566
Operating prot or loss before depreciation
and amortization (EBITDA)
-11,785 -8,035
Depreciation and amortization 2.6 1,433 1,335
Impairment 5.1 1,444 -
Operating prot or loss (EBIT)
-14,662 -9,371
Finance income 2.7 1,173 323
Finance costs 2.7 208 268
Net nancial items 965 55
Prot (loss) before tax -13,697 -9,315
Income tax expense 2.8 -3,131 -2,055
Prot (loss) for the year -10,566 -7,261
Prot (loss) for the year attributable to:
Equity holders of the parent company -10,566 -7,261
Earnings per share:
Basic earnings per share 6.7 -0.06 -0.04
Diluted earnings per share 6.7 -0.06 -0.04
Airthings — Annual Report 2022
26
Consolidated statement
of comprehensive income
For the years ended 31 December
Amounts in USD 1,000 2022 2021
Prot (loss) for the year -10,566 -7,261
Other comprehensive income:
Items that subsequently will not be reclassied to prot or loss:
Exchange differences on translation of parent company -7,025 -2,366
Total items that will not be reclassified to profit or loss -7,025 -2,366
Items that subsequently may be reclassified to profit or loss:
Exchange differences on translation of foreign operations - 14
Total items that may be reclassified to profit or loss - 14
Other comprehensive prot (loss) for the year -7,025 -2,352
Total comprehensive prot (loss) for the year -17,590 -9,612
Total comprehensive prot (loss) attributable to:
Equity holders of the parent company -17,590 -9,612
Airthings — Annual Report 2022
27
Consolidated statement
of financial position
Amounts in USD 1,000 Notes
31.12.2022 31.12.2021
ASSETS
Non-current assets
Goodwill 5.1, 5.2 2,872 3,210
Intangible assets 5.1 2,459 2,495
Deferred tax assets 2.8 7,108 4,509
Property, plant and equipment
5.3 830 809
Right-of-use assets 5.4 3,140 4,241
Other non-current assets 3.5, 6.6 132 1,075
Total non-current assets 16,541 16,339
Current assets
Inventories 3.1 18,713 11,429
Trade receivables 3.2 11,099 11,850
Other receivables 3.2 4,115 1,889
Cash and cash equivalents 6.4 13,274 42,174
Total current assets 47,202 67,342
TOTAL ASSETS 63,743 83,680
Airthings — Annual Report 2022
28
Øyvind Birkenes
CEO
Oslo, March 29, 2023
Liv Dyrnes
Board member
Lars Boilesen
Board member
Aksel Lund Svindal
Board member
Fredrik Thoresen
Board member
Niklas Copley Norin
Board member
Emma Tryti
Board member
Karin Berg
Board member
Geir Førre
Chairman of the Board
Chloe Emma Waller
Board Member
Consolidated statement
of financial position
Amounts in USD 1,000 2022 2021
Equity
Share capital 6.5 192 190
Share premium 78,979 78,669
Other capital reserves 2,068 1,704
Other equity -30,311 -12,721
Total equity 50,928 67,842
Non-current liabilities
Non-current lease liabilities 5.4 2,554 3,803
Deferred tax liabilities 2.8 - -
Non-current provisions 3.5 125 1,090
Total non-current liabilities 2,679 4,892
Current liabilities
Current lease liabilities 5.4 850 670
Trade and other payables 3.4 6,177 7,027
Contract liabilities 3.3 1,111 894
Income tax payable 2.8 60 27
Current provisions 3.5 1,938 2,328
Total current liabilities 10,137 10,946
Total liabilities 12,816 15,838
TOTAL EQUITY AND LIABILITIES 63,743 83,680
Airthings — Annual Report 2022
29
Consolidated statement
of cash flows
For the years ended 31 December
Amounts in USD 1,000 Notes 2022 2021
Cash flows from operating activities
Prot (loss) before tax -13,697 -9,315
Adjustments to reconcile prot before tax to net cash ows:
Net nancial items 2.7 -965 -55
Depreciation, amortization and impairment 2.6 2,877 1,335
Share-based payment expense 6.6 364 608
Working capital adjustments:
Changes in inventories 3.1 -7,284 -6,736
Changes in trade and other receivables 3.2 -1,476 -4,697
Changes in trade and other payables and contract liabilities 3.3, 3.4 -633 3,360
Changes in provisions 3.5 -1,354 -380
Other items
Tax paid 2.8 1
Net cash ows from operating activities -22,169 -15,879
Cash ows from investing activities
Development expenditures 5.1 -2,145 -574
Purchase of property, plant and equipment 5.3 -341 -495
Interest received 2.7 258 102
Net cash ow from investing activities -2,228 -968
Cash ow from nancing activities
Proceeds from issuance of equity 6.5 312 198
Repayment of borrowings 6.8 - -1,901
Payments for the principal portion of the lease liability 5.4 -698 -636
Payments for the interest portion of the lease liability 5.4 -201 -217
Interest paid 2.7 - -4
Net cash ows from nancing activities -586 -2,560
Net increase/decrease in cash and cash equivalents -24,983 -19,407
Cash and cash equivalents at 1 January 42,174 62,943
Net foreign exchange difference -3,917 -1,362
Cash and cash equivalents at 31 December 13,274 42,174
Airthings — Annual Report 2022
30
Consolidated statement
of changes in equity
Other Equity
Amounts in USD 1,000 Share
capital
Share
premium
Other
capital
reserves
Cumulative
translation
differences
Retained
earnings
Total
equity
Equity at as 1 January 2021 188 78,472 1,096 4,314 -7,422 76,648
Prot (loss) for the year -7,261 -7,261
Other comprehensive prot (loss) -2,352 -2,352
Total comprehensive prot (loss) - - - -2,352 -7,261 -9,612
Capital increase (Note 6.5) 1 197 198
Share-based payments (Note 6.6) 608 608
Equity as at 31 December 2021 190 78,669 1,704 1,962 -14,683 67,842
Prot (loss) for the year -10,566 -10,566
Other comprehensive prot (loss) -7,025 -7,025
Total comprehensive prot (loss) - - - -7,025 -10,566 -17,590
Capital increase (Note 6.5) 2 310 312
Share-based payments (Note 6.6) 364 364
Equity as at 31 December 2022 192 78,979 2,068 -5,062 -25,248 50,928
Airthings — Annual Report 2022
31
1.1 Corporate information
Airthings ASA (‘the Company’) is a publicly
listed company on Oslo Stock Exchange,
with the ticker symbol AIRX. Airthings
ASA is incorporated and domiciled in
Norway with principal offices located at
Wergelandsveien 7, 0167 Oslo, Norway.
Airthings and its subsidiaries (collectively
“the Group”, or “Airthings”) develop and
produces solutions for monitoring indoor
air quality, radon and energy efficiency. The
Group sells it’s products and solutions to
consumers and businesses around the world.
The consolidated financial statements
of the Group for the year ended
31December 2022 were authorized for
issue in accordance with a resolution of the
Board of Directors on 29March2023.
1.2 Basis of preparation
The consolidated financial statements
of the Group comprise consolidated
statement of comprehensive income,
consolidated statement of financial
position, consolidated statement of
cash flows, consolidated statement of
changes in equity and related notes.
The consolidated financial statements have
been prepared in accordance with International
Financial Reporting Standards (“IFRS”) as
adopted by The European Union (“EU”).
The consolidated financial statements
have been prepared on a historical cost
basis, the company has no assets or
liabilities valued at fair value. All figures
are presented in USD thousands (1,000),
except when otherwise stated.
The consolidated financial statements
provide comparative information in
respect of the previous period.
Further, the consolidated financial statements
are prepared based on the going concern
assumption. The macroeconomic environment
has proven challenging throughout 2022 with
increasing interest rates and inflation causing
uncertainty and reduced consumer confidence.
Consequently, retailers and distribution partne
rs
have reduced inventory coverage to lower their
capital burden and hamper risk exposure. The
Board continues to monitor the situation carefully
to ensure appropriate measures are taken as the
situ
ation continues to unfold through 2023.
Presentation currency and functional currency
The consolidated financial statements are
presented in United States dollar(“USD”). For
each entity, the Group determines the functional
currency and items included in the financial
statements of each entity are measured using
that functional currency. Airthings ASA has
Norwegian krone (“NOK”) as its functional
currency and it’s subsidiaries have SEK or USD as
their functional currencies. The Group presents
it’s consolidated financial statements in USD
to provide the primary users of the financial
statements with more convenient information.
For presentation purposes, balance sheet
items are translated from functional currency
to presentation currency by using exchange
rates at the reporting date. Items within total
comprehensive income are translated from
functional currency to presentation currency
by applying yearly average exchange rates.
The resulting translation differences are
recognized in other comprehensive income.
Section 1 — General information
and accounting policies
Airthings — Annual Report 2022
32
Climate risk
The impact of climate risks has been taken
into account in the preparation of the Group’s
consolidated financial statements for the year
ended 31 December, 2022. However, the
risks identified are not considered to have
a significant impact on the Group considering
the nature of the its operations. Potential
impacts of climate change are continuously
considered in assessing whether assets may
be impaired. As of 31December 2022, climate
risk is not expected to have any significant
impact on the Group’s assets or liabilities.
1.3 General accounting policies
Airthings has selected a presentation in which
the description of accounting policies as well
as estimates, assumptions and judgmental
considerations are disclosed in the notes
to which the policies relate. A summary of
the Group’s general accounting policies not
disclosed in the notes, are presented below:
Current versus non-current classification
The Group presents assets and liabilities in
the statement of financial position based
on current/non-current classification.
An asset is current when it is:
• Expected to be realized or intended to be sold
or consumed in the normal operating cycle,
• Held primarily for the purpose of trading,
• Expected to be realized within twelve
months after the reporting period, or
• Cash or cash equivalent unless restricted
from being exchanged or used to settle
a liability for at least twelve months
after the reporting period. All other
assets are classified as non-current.
A liability is current when:
• It is expected to be settled in the
normal operating cycle,
• It is held primarily for the purpose of trading,
• It is due to be settled within twelve
months after the reporting period, or
• There is no unconditional right to defer
the settlement of the liability for at least
twelve months after the reporting period.
• The Group classifies all other
liabilities as non-current.
Deferred tax assets and liabilities are classified
as non-current assets and liabilities.
Statement of cash flows
The consolidated statement of cash flows
is prepared using the indirect method.
Changes in accounting policies
Standards issued but not yet effective
New or amended standards and interpretations
which are effective for annual periods beginning
on or after 1 January, 2023 and which the
Group believes are relevant and may impact the
Group’s financial statements and/or disclosures
are discussed below. The Group has not early
adopted any standards or amendments that
have been issued, but are not yet effective.
Amendments to IAS 8 – Definition
of Accounting Estimates
In February 2021, the IASB issued amendments
to IAS 8, in which it introduces a definition of
“accounting estimates”. The amendments clarify
the distinction between changes in accounting
estimates and changes in accounting policies
and the correction of errors. Also, they clarify
how entities use measurement techniques
and inputs to develop accounting estimates.
The amendments are effective for annual
reporting periods beginning on or after
1January2023, and are not expected to
have a material impact on the consolidated
financial statements of the Group.
Airthings — Annual Report 2022
33
1.4 Significant accounting judgements,
estimates and assumptions
The preparation of the consolidated financial
statements in accordance with IFRS and applying
the chosen accounting policies requires
management to make judgments, estimates and
assumptions that affect the reported amounts
of assets, liabilities, revenues and expenses.
The estimates and associated assumptions are
based on historical experience and various other
factors that are believed to be reasonable under
the circumstances. Actual results may differ from
these estimates. The estimates and the underlying
assumptions are reviewed on an ongoing basis.
The accounting policies applied by management
which includes a significant degree of estimates
and assumptions or judgments that may have the
most significant effect on the amounts recognized
in the financial statements, are summarized below:
Estimates and assumptions:
• Measurement of deferred tax assets (note 2.8)
• Value of inventory (note 3.1)
• Value in use calculations in relation to
impairment testing of goodwill (note 5.2)
• Estimating fair value for share-based
payments transactions (note 6.6)
A detailed description of the significant
estimates and assumptions are included in
the individual note referenced above.
The Group based its assumptions and
estimates on parameters available when
the consolidated financial statements were
prepared. Existing circumstances and
assumptions about future developments,
however, may change due to market changes
or circumstances arising that are beyond
the control of the Group. Such changes are
reflected in the assumptions when they occur.
Accounting judgements:
• Determination of CGUs (note 5.2)
A detailed description of the significant
accounting judgements are included in
the individual notes referenced above.
Airthings — Annual Report 2022
34
2.1 Operating segments
ACCOUNTING POLICIES
An operating segment is
a component of an entity:
a) that engages in business activities from which
it may earn revenues and incur expenses,
b) whose operating results are regularly
reviewed by the entity’s chief operating
decision maker to make decisions about
resources to be allocated to the segment
and assess its performance, and
c) for which discrete financial
information is available.
For management purposes, the Group
is organized into business areas based
on its different markets and has three
reportable segments, as follows:
• Consumer – private customers
• Business – business customers such
as schools, office buildings and
other commercial buildings
• Professional – professional customers
such as home inspectors and
certified radon professionals
No operating segments have been
aggregated to form the above
reportable operating segments.
The Board of Directors is the Group’s chief
operating decision maker and monitors
the operating results of its business units
separately for the purpose of making decisions
about resource allocation and performance
assessment. Segment performance is evaluated
based on EBITDA measured consistently with
operating profit or loss before depreciation
and amortization as reported under IFRS. The
Group’s financing (including finance costs and
finance income), depreciation and amortization
and income taxes are managed on a Group basis
and are not allocated to operating segments as
underlying assets are managed on a Group basis.
Group functions and adjustments/ eliminations
The remaining of the Group’s activities
and business are shown in the “Group
functions” column in the tables below. These
activities mainly relate to R&D, marketing
and administrative functions of the Group.
Section 2 — Operating segments
and profit or loss items
Airthings — Annual Report 2022
35
Year ended
31 December 2022
(USD 1,000)
Consumer
Business
Professional Group
functions
Consolidated
IFRS
REVENUES & PROFIT
External customers 23,037 10,313 2,075 - 35,424
Other operating income - - - - -
Total revenue 23,037 10,313 2,075 - 35,424
Cost of goods sold 9,871 4,254 340 - 14,465
Employee benet expenses 2,046 3,934 323 10,351 16,654
Other operating expenses 3,830 1,091 687 10,482 16,090
EBITDA 7,291 1,033 724 -20,833 -11,785
Major customers
In 2022 the largest customer of the Group
accounted for 23% (2021: 31%) of consolidated
revenues, mainly allocated to the consumer
segment. The second largest customer
accounted for 11% of consolidated revenues
in 2021 (2021: 17%), also mainly allocated
to the consumer segment. The Group does
not have any other customers that represents
more than 10% of the Group’s revenue.
Segmental analysis of assets and liabilities
Assets and liabilities by reporting segment
is not included in management reporting
and is therefore not disclosed separately
within the operating segments.
Geographical disaggregation
Reference is made to note 2.2 Revenue for
information on the Group’s geographical markets.
Non-current operating assets (USD 1,000) 2022 2021
Located in Norway 5,883 7,126
Located in foreign countries 546 419
Total 6,429 7,545
Year ended
31 December 2021
(USD 1,000)
Consumer
Business
Professional Group
functions
Consolidated
IFRS
REVENUES & PROFIT
External customers 23,561 6,942 3,167 - 33,671
Other operating income - - - 28 28
Total revenue 23,561 6,943 3,167 28 33,699
Cost of goods sold 9,574 2,708 743 16 13,041
Employee benet expenses 1,603 3,230 134 10,160 15,127
Other operating expenses 2,177 796 225 10,368 13,566
EBITDA 10,207 208 2,065 -20,516 -8,035
Non-current assets for this purpose consist of property, plant and equipment, right-of-use assets, and intan-
gible assets.
Airthings — Annual Report 2022
36
2.2 Revenue
Airthings Group is a manufacturer of air quality
sensors and hardware-enabled software products
for air quality, radon measurement and energy
efficiency solutions. The Group’s revenue
from contracts with customers are reported
in three main segments as described in note
2.1: Consumer, Business and Professional.
• The consumer segment sells air
quality sensors to private customers
through retailers and e-commerce.
• The business segment sells air quality
solutions to schools, office buildings,
and other commercial buildings.
• The professional segment sells measurement
solutions which enables inspectors and
certified radon professionals to accurately
measure, analyze and report on buildings.
The professional segment also offers rental
of products and calibration services.
ACCOUNTING POLICIES
Revenue from contracts with customers is
recognized when control of the goods or services
are transferred to the customer at an amount that
reflects the consideration to which the Group
expects to be entitled in exchange for those
goods or services. The Group has concluded that
it is the principal in all its revenue arrangements,
and hence recognizes revenue gross.
Sale of goods
Revenue from the sale of air quality sensors are
recognized at the point in time when a performance
obligation arising from a contractual obligation
with a customer has been met. The Group’s
performance obligation is satisfied at point in time,
upon delivery or when the goods are packed and
shipped, depending on the delivery terms. The
payment terms range from a couple of business
days to longer periods, e.g. 60 to 90 days, after the
performance obligation is satisfied depending on
the type of customer. Since the Group’s exposure
to losses has historically been low the Group only
takes modest provisions in regard to bad debt.
The Group considers whether there are
other promises in the contract that are
separate performance obligations to which
a portion of the transaction price needs to
be allocated (e.g., services or SaaS). Where
a contract included several performance
obligations, revenue is splitted among the
different performance obligations based
on relative stand alone selling prices
In determining the transaction price for the sale
of a product, the Group considers the effects of
variable consideration, the existence of significant
financing components, non-cash consideration,
and any consideration payable to the customer.
Revenue is recognized net of any discounts.
(i) Variable consideration
If the consideration in a contract includes
a variable amount, the Group estimates the
amount of consideration to which it will be
entitled in exchange for transferring the goods
to the customer. The variable consideration is
estimated at contract inception and constrained
until it is highly probable that a significant
revenue reversal in the amount of cumulative
revenue recognized will not occur when
the associated uncertainty with the variable
consideration is subsequently resolved. Some
contracts for the sale of air quality sensors
and radon detectors provide customers with
a right to return the goods within a specified
period. The Group also provides retrospective
volume rebates to certain customers once
the quantity products purchased during the
period exceeds the threshold specified in
the contract. The rights of return and volume
rebates give rise to variable consideration.
Right of return
The Group uses the expected value method
to estimate the variable consideration given
the large number of contracts that have similar
characteristics. The Group then applies the
requirements on constraining estimates of variable
consideration in order to determine the amount
of variable consideration that can be included in
the transaction price and recognized as revenue.
Airthings — Annual Report 2022
37
Consideration payable to a customer
Consideration payable to a customer is
accounted for as a reduction of the transaction
price, unless the payment to the customer is in
exchange for a distinct good or service and the
fair value of the distinct good or value can be
reasonably estimated. Consideration payable
to a customer is estimated when the sale occurs
and recognized as a provision (refer to note 3.5).
The transaction price is reduced accordingly.
Sale of software as a service (SaaS)
The Group also has revenue from license fees,
which are SaaS contracts consisting of a software
licensing model where software is licensed on
a subscription basis and centralized on Airthings
platform. Revenue from SaaS arrangements,
where the customer cannot take possession of
the software license and where the software
license cannot be separated from its related
hosting services are considered as “right to
access” licenses and revenue is recognized
over time (i.e. the subscription period).
Sale of services
Revenue from the rendering of services mainly
relates to calibration services delivered in
connection with a solution to the business or
professional market. These calibration services
are sold separately or bundled but do not
significantly customize or modify the other
products in the contract. Contracts for bundled
sales of equipment and calibration services
are comprised of two performance obligations
because the equipment and installation services
are both sold on a stand-alone basis and are
distinct within the context of the contract.
Accordingly, the Group allocates the transaction
price based on the relative stand-alone selling
prices of the equipment and installation services.
Revenue from these services is recognized over
time using an input method to measure progress
towards completion of the services, because
the customer simultaneously receives and
consumes the benefits provided by the Group.
Rental income
Rental income is derived from the rental of
equipment such as Corentium Pro in the
professional segment. Rental income arising
is accounted for on a straight-line basis over
the lease term and is included in revenues in
the consolidated statement of comprehensive
income. Initial direct costs incurred in
negotiating and arranging an operating lease
are added to the carrying amount of the
leased asset and recognized over the lease
term on the same basis as rental income.
Set out below is the disaggregation
of the Group’s total revenues:
Revenues (USD 1,000) 2022 2021
Revenue from contracts with customers 34,953 33,172
Rental income 471 499
Total revenues 35,424 33,671
Geographical information (USD 1,000) 2022 2021
EMEA 10,102 9,537
North America (USA and Canada) 24,851 23,635
Total revenue from contracts with customers 34,953 33,172
Set out below is the disaggregation of the Group’s revenue from contracts with customers:
The information above is based on the location of the customers.
Airthings — Annual Report 2022
38
Timing of revenue recognition (USD 1,000) 2022 2021
Goods transferred at a point in time 32,527 31,791
Subscription and services transferred over time 2,427 1,382
Total revenue from contracts with customers 34,953 33,172
(USD 1,000) 2022 2021
Within one year 823 110
More than one year 307 175
Total 1,131 285
Performance obligations
Product sale:
The Group’s performance obligation is satisfied
at a point in time, upon delivery of the hardware
products. The payment terms range from
a couple of business days to longer periods,
e.g. 60 to 90 days. Revenue recognized at the
point of delivery is only recognized for an amount
of the consideration that reflects the consideration
the Group expects to ultimately be entitled to. The
variable consideration is re-assessed at the end
of each reporting period and recognized as (or
when) the uncertainty is subsequently resolved.
SaaS license fee:
The Group’s performance obligation is satisfied
over time (as “right to access” licenses). The
customer receives the right to access Airthings
intellectual property throughout the license
period for which revenue is recognized over the
license period. The software is run on Airthings’
platform and the customer may only access the
software through a network (cloud). The customer
cannot take possession of the software/code and
is not able to run the software on its own server.
Other services:
Other services mainly consist of calibration
services provided by the Group in connection
with sales in the professional segment.
Revenue is recognized over time because
the customer simultaneously receives and
consumes the benefits provided by the
Group. The Group recognizes revenue
normally on the basis of hours incurred.
Contract balances:
As the Group’s revenues are generally recognized
and invoiced upon delivery (goods) or in
advance (SaaS subscriptions), the Group does
not have a significant amount of contract assets.
Contract liabilities relate to remuneration
received in advance for SaaS subscriptions.
Subscriptions are normally prepaid by the
customer for 12 months. As such, the balance
of account at the end of the year mainly
represents the Group’s deferred revenue
related to performance obligations that will
be satisfied within 12 months. The Group’s
contract liabilities are disclosed in note 3.3.
2.3 Other operating income
ACCOUNTING POLICIES
Government grants
Government grants are recognized where there
is reasonable assurance that the grant will be
received, and all attached conditions will be
complied with. Grants related to an expense
item is recognized as income on a systematic
basis over the periods that the related costs, for
which it is intended to compensate, is expensed.
The transaction price allocated to the remaining performance obligations (unsatised or partially
unsatised) as at 31 December are, as follows:
The table above does not include remaining performance obligations that are part of contracts with an original duration of one year or less.
The remaining performance obligations expected to be recognized in more than one year relate to the delivery of software services (Saas).
Airthings — Annual Report 2022
39
Alternatively, such grants are deducted in
reporting the related expense. Grants related
to assets is recognized by deducting the
grant in calculating the carrying amount of
the asset. The Group applies a consistent
presentation approach to all similar grants.
When the Group receives grants of non-monetary
assets, the asset and the grant are recorded at
nominal amounts and released to profit or loss
over the expected useful life of the asset, based
on the pattern of consumption of the benefits of
the underlying asset by equal annual installments.
Other income
Other operating income is recognized
to the extent that it is probable that the
economic benefits will flow to the Group
and the revenue can be reliably measured,
regardless of when the payment is received.
Revenue is measured at the fair value of the
consideration received or receivable, taking
into account contractually defined terms of
payment and excluding taxes or duty.
Other operating income (USD 1,000) 2022 2021
Government grants - 28
Total other operating income - 28
Grants (USD 1,000) Line item 2022 2021
Grant from Innovation Norway Other operating income - 28
Grant from SkatteFUNN – A Employee benet expenses 247 276
Grant from SkatteFUNN – B Other operating expenses 247 276
Total government grants recognized 494 580
Grant from innovation Norway
In 2020 and 2021, Airthings ASA received
funds from Innovation Norway related to
a R&D project. The Group recognized USD
28thousands as other operating income in 2021.
SkatteFUNN
In 2020, Airthings ASA received a three-
year Skattefunn grant from Forskningsrådet
(a Norwegian government R&D tax incentive
program designed to stimulate R&D in
Norwegian trade and industry). In 2022 the
Group recognized USD 494 thousands as
a cost reduction of R&D expenses, respectively
as reduced employee benefit expenses
and other operating expenses (2021: USD
552 thousands). As of 31 December 2022
the Group has recognized a receivable of
USD 482 thousands related to the grant
from SkatteFUNN (31 December 2021: USD
539thousands), as presented in the table below.
Only grants recognized as income are presented in the table above.
Government grants in the consolidated statement of comprehensive income
Airthings — Annual Report 2022
40
Government grants receivable (USD 1,000) 31.12.2022 31.12.2021
Grant from Innovation Norway - -
Grant from Horizon - -
Grant from SkatteFUNN 482 539
Total government grants receivable 482 539
Government grant receivables are included as other receivables in the consolidated
statement of financial position and included in the specification in note 3.2.
2.4 Employee benefit expenses
ACCOUNTING POLICIES
Employee benefit expenses comprise all types
of remuneration to personnel employed by
the Group and are expensed when earned.
Ordinary salaries can be both fixed pay
and hourly wages and is earned and paid
periodically. Holiday pay is earned on the
basis of ordinary pay and is normally paid in
the holiday months of the following year. The
employer’s national insurance contribution
(social security) is calculated and expensed
for all payroll related costs including pensions.
Pensions contributions are earned on a monthly
basis. Shared based payment expenses is
related to the Group’s share option program
(see note 6.8). Other employee expenses consist
of other benefits such as insurance, telephones
and remuneration to the Board of Directors.
Pensions
The Group has a defined contribution pension
plan for its employees which satisfies the
statutory requirements in the Norwegian
law on required occupational pension
(“lov om obligatorisk tjenestepensjon”).
Contributions are paid to pension insurance
plans and charged to the income statement in
the period to which the contributions relate.
Once the contributions have been paid,
there are no further payment obligations.
Employee benet expenses (USD 1,000) 2022 2021
Salaries 13,477 12,022
Social security costs 1,902 1,680
Pension costs 615 438
Share-based payment expenses 364 608
Other employee expenses 296 380
Total employee benet expenses 16,654 15,127
Average number of full time employees (FTEs) 124 105
Government grants in the consolidated statement of financial position
At the end of the reporting period, members of the Board and management held shares and
share options in Airthings ASA. For information on remuneration to Management and the
Board of Directors, including disclosures on shares and share options held, see note 7.1.
Airthings — Annual Report 2022
41
2.5 Other operating expenses
ACCOUNTING POLICIES
Other operating expenses are recognized when they occur and represent a broad range
of operating expenses incurred by the Group in its day-to-day activities. Other operating
expenses consist of expenses that are not classified on the lines for cost of materials, employee
benefit expenses, depreciation and amortization, impairment and income tax expense.
Other operating expenses (USD 1,000) 2022 2021
Marketing 5,673 4,744
External services 4,999 4,538
Freight 2,062 1,373
Ofces 1,332 1,207
Software 955 615
Other operating expenses 1,070 1,089
Total other operating expenses 16,090 13,566
Remuneration to the auditor (USD 1,000) 2022 2021
Statutory audit fee 117 103
Tax advisory and other services 60 45
Total remuneration to the auditor 177 148
The amounts above are excluding VAT.
Total research expenses for 2022 were USD 7.1 million (net of cost reduction from
SkatteFUNN, refer to note 2.3), recognized as employee benefit expenses and other
operating expenses in the consolidated statement of profit or loss. For 2021 total research
expenses were USD 8 million (net of cost reduction from SkatteFUNN, refer to note 2.3).
Operating expenses (USD 1,000) 2022 2021
Sales and marketing 19,621 19,366
Research and development 7,201 8,110
General and administrative 5,922 1,217
Total operating expenses 32,744 28,693
Total operating expenses by function
The table below illustrates the Group’s employee benefit expenses and other operating
expenses by function. These measures are regularly provided to and reviewed by the Board.
Airthings — Annual Report 2022
42
2.6 Depreciation and amortization
ACCOUNTING POLICIES
Depreciation and amortization expenses includes the monthly charge on property, plant and
equipment, intangible assets and right-of-use assets over the assets estimated useful lives or
lease term. The depreciation and amortization expenses are recognized on a straight-line basis.
2.7 Finance income and costs
ACCOUNTING POLICIES
Interest income and interest expenses are calculated using the effective interest method.
Foreign currency gains or losses are reported as foreign exchange gain or foreign exchange
loss in finance income or finance costs, except for currency translation effects from translation
of foreign subsidiaries and the parent company which are presented within OCI. For other
accounting policies related to the underlying financial instruments, reference is made to note 6.1
Interest costs on lease liabilities represent the interest rate used to measure the lease liabilities
recognized in the consolidated statement of financial position (see note 5.4 for further information).
Finance income (USD 1,000) 2022 2021
Interest income 261 102
Other nance income - -
Foreign exchange gain 912 221
Total nance income 1,173 323
Interest income represents mainly interest income on cash deposits, and interest
expenses represents mainly interest expenses on lease liabilities, measured and
classified at amortized cost in the consolidated statement of financial position.
Foreign exchange (USD 1,000) 2022 2021
Foreign exchange gain 7,341 6,350
Foreign exchange loss 6,429 6,129
Net foreign exchange gain (loss) 912 221
Finance costs (USD 1,000) 2022 2021
Interest expenses 7 15
Interest expense on lease liabilities 201 217
Foreign exchange loss - -
Other nance costs - 37
Total nance costs 208 268
Depreciation and amortization expenses (USD 1,000) Note 2022 2021
Depreciation of property, plant and equipment 5.3 269 256
Depreciation of right-of-use assets 5.4 769 737
Amortization of intangible assets 5.1 395 342
Total depreciation and amortization expenses 1,433 1,335
Airthings — Annual Report 2022
43
2.8 Income tax
ACCOUNTING POLICIES
Current income tax
Current income tax is measured at the amount
expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws
used to compute the amount are those that
are enacted or substantively enacted at the
reporting date in the countries where the Group
operates and generates taxable income.
Deferred tax
Deferred tax liabilities/ deferred tax assets
are recognized in line with IAS 12. Deferred
tax is provided using the liability method on
temporary differences between the tax bases
of assets and liabilities and their carrying
amounts for financial reporting purposes at
the reporting date. Deferred tax liabilities are
recognized for taxable temporary differences.
Deferred tax assets are recognized to the
extent that it is probable that taxable profit
will be available against which the deductible
temporary differences and the carry forward
of unused tax losses can be utilized.
The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of
the deferred tax asset to be utilized. Unrecognized
deferred tax assets are re-assessed at each
reporting date and are recognized to the extent that
it has become probable that future taxable profits
will allow the deferred tax asset to be recovered.
In assessing the recoverability of deferred tax
assets, the Group relies on the same forecast
assumptions used elsewhere in the financial
statements and in other management reports.
Deferred tax assets and liabilities are
measured at the tax rates that are expected
to apply in the year when the asset is realized
or the liability is settled, based on tax rates
(and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax assets and deferred tax liabilities
are offset if a legally enforceable right exists
to set off current tax assets against current
tax liabilities and the deferred taxes relate to
the same taxable entity and the same taxation
authority. As most of the deferred tax assets
and liabilities relates to Airthings ASA (parent
company), these are to a large extent offset
in the consolidated financial statements.
SIGNIFICANT ACCOUNTING JUDGEMENTS,
ESTIMATES AND ASSUMPTIONS
Deferred tax assets are recognized for unused
tax losses to the extent that it is probable
that taxable profit will be available against
which the losses can be utilized. Significant
management judgment is required to
determine the amount of deferred tax assets
that can be recognized, based upon the likely
timing and the level of future taxable profits,
together with future tax planning strategies.
The Group has USD 30 609 thousand as at
31 December 2022 (USD 20 266 thousand as
at 31 December 2021) of tax losses carried
forward in the parent company, which have
been fully recognized as deferred tax assets in
the consolidated financial statements, as the
Group consider it to be probable that these
taxable losses may be utilized in the near future.
When assessing the probability of
utilizing these losses, the Group
considers factors such as:
Positive evidence
• Unused tax losses relate to the parent
company Airthings ASA, where most
of the Groups operations are located,
and there are no maturity related to
usage of such losses according to the
Norwegian applicable tax regulation.
• The recent losses which form the basis
of the deferred tax asset have been
according to budget and is a result of the
Group’s significant growth strategy. The
losses are mainly caused by significant
R&D, marketing, and sales investments.
Airthings — Annual Report 2022
44
Going forward, investment activity in % of
revenues is expected to decrease. Further,
before the Group initiated its significant
growth strategy, it has a history of being
profitable. Within the near future, the
Group expects that taxable profit will allow
the deferred tax asset to be recovered.
Negative evidence
• Airthings ASA has not sufficient other tax
increasing temporary differences which the
unused tax losses can be utilized against
• The Group has limited tax planning
opportunities available at the moment
(e.g. group contribution) as Airthings ASA
is the only Norwegian entity in the Group.
Overall, the Group has as of 31 December 2022
determined that the positive evidence outweighs
existing negative evidence to support recognition
of deferred tax assets and thus the 50% probability
threshold (“more likely than not”) is considered
as passed. However, there are uncertainties
connected with the Group’s forecasts of taxable
profit. If the Group had concluded that the 50%
probability threshold was not met, and decided
not to recognized deferred tax assets (limited to
partly recognition or no recognition at all), this
would have caused a decrease in deferred tax
assets, decrease in negative tax expense and in
the end a decrease in equity. No recognition at
all of deferred tax assets related to taxable losses
would in isolation result in an equity reduction of
USD 6 749 thousand as at 31 December 2022.
Current income tax expense (USD 1,000) 2022 2021
Tax payable 33 10
Change deferred tax/deferred tax assets (ex. OCI effects) -3,165 -2,065
Total income tax expense -3,131 -2,055
Deferred tax assets (USD 1,000) 31.12.2022 31.12.2021
Property, plant and equipment 1,484 3,682
Right-of-use assets (net amount) -75 -98
Customer contracts 554 -604
Other current assets -270 -100
Merger -1,531 -2,354
Losses carried forward (including tax credit) -30,678 -20,266
Other -1,794 -1,592
Basis for deferred tax assets -32,310 -21,331
Calculated deferred tax assets 7,108 4,685
Deferred tax assets not recognized - -175
Net deferred tax assets in the statement of nancial position 7,108 4,509
Deferred tax liabilities (USD 1,000) 31.12.2022 31.12.2021
Intangible assets
Basis for deferred tax liabilities - -
Calculated deferred tax liabilities
Deferred tax not recognized
Deferred tax liabilities recognized in the statement of nancial position
- -
Airthings — Annual Report 2022
45
The Group’s operations are subject to income
tax in various foreign jurisdictions. The
statutory income tax rates vary from 20,6% to
22%, which results in a difference between
the statutory income tax rate in Norway and
the average tax rate applicable to the Group.
The effect from the statutory income tax rates
from other countries (Sweden and USA) on
the Group tax rate is very limited as the main
operations are in Norway. The average tax rate
for the Group’s deferred tax assets are 21,65%
for 31.12.2022 and 22% for 31.12.2021.
A reconciliation of the differences between
the theoretical tax expense under the
rate applicable in
Norway and the
actual tax expense is as follows:
Reconciliation of income tax expense (USD 1,000) 2022 2021
Prot or loss before tax -13,697 -9,315
Tax expense 22% (Norwegian tax rate) -3,013 -2,049
Change to prior period tax expense - -
Permanent differences* -43 9
Effects of foreign tax rates -4 -1
Effects of changes in tax rate - -
Currency effects 1 -
Effect of not recognizing deferred tax assets -72 -13
Recognized income tax expense -3,131 -2,055
* The permanent differences are related to SkatteFUNN, options and other non-deductible costs among the Group’s entities.
Airthings — Annual Report 2022
46
3.1 Inventories
ACCOUNTING POLICIES
Inventories are valued at the lower of cost
and net realizable value. Costs incurred in
bringing each product to its present location
and condition are accounted for, as follows:
• Components: purchase cost on
a first-in/first-out basis (FIFO)
• Finished goods: cost of direct materials,
direct wages, packaging and a proportion
of manufacturing overheads based
on the normal operating capacity
Net realizable value is the estimated selling
price in the ordinary course of business,
less estimated costs of completion and the
estimated costs necessary to make the sale.
Significant accounting estimates and assumptions
Value of inventories
The increase in the Group’s inventories in 2022
primarily reflects channel partners lowering
their own inventory holding levels and the
Group consequently holding more goods than
was otherwise planned for. An evaluation of
the inventories was conducted in conjunction
with the closing of the period, and although
inventories are at elevated levels, it was
determined that any potential write-down would
not be warranted. The Group has a gross margin
of 50-60% on finished goods. Management’s
expectations is that there will be a positive gross
profit margin contribution from all products in
2023, even if the Group are to reduce prices.
Beyond a USD 223 thousands write-down
related to the derecognition of the Airtight
technology, there were no other reversals
or write-down of components or finished
goods in the periods presented.
3.2 Trade and other receivables
ACCOUNTING POLICIES
Trade and other receivables
The Group’s trade receivables consist solely of
amounts receivable from revenue contracts with
customers. Other receivables consist mainly
of prepaid expenses and government grant
receivables related to SkatteFUNN. Trade and
other receivables are financial assets initially
recognized at fair value and subsequently
at amortized cost using the effective interest
rate method. Trade and other receivables
are subject to impairment by recognizing
an allowance for expected credit losses.
Section 3 — Other
operating activities
Inventories (USD 1,000) 31.12.2022 31.12.2021
Finished goods 14,425 8,006
Components 4,288 3,423
Total inventories at the lower of cost and net realizable value
18,713 11,429
In 2022, there was a write down of finished goods of USD 223 thousands related to the derecognition
of the Airtight technology. In 2021, there were no write-downs of finished goods or components.
There were no reversal of write-down of components or finished goods in the periods presented.
Airthings — Annual Report 2022
47
3.3 Contract liabilities
ACCOUNTING POLICIES
A contract liability is recognized if a payment is received or a payment is due (whichever
is earlier) from a customer before the Group transfers the related goods or services.
Contract liabilities are recognized as revenue when the Group performs under the
contract (i.e., transfers control of the related goods or services to the customer).
Contract liabilities relate to remuneration received in advance for revenue from
contracts with customers as well as the allocated transaction price for the remaining
performance obligation. Revenue is recognized when the Group fulfills the performance
obligation in the contract. Contract liabilities are shown in the table below:
Trade receivables (USD 1,000) 31.12.2022 31.12.2021
Trade receivables from customers at nominal value 11,369 11,950
Allowance for expected credit losses 270 100
Total trade receivables
11,099 11,850
Other receivables (USD 1,000) 31.12.2022 31.12.2021
Prepaid expenses 3,101 814
Government grants 482 539
VAT receivable 42 305
Related parties 1 41
Other 489 191
Total other receivables 4,115 1,889
The credit risk of financial assets has not increased significantly from initial recognition. The increase
in loss allowance is mainly related to the increase in the gross amount of trade receivables.
As at 31 December the ageing analysis of trade receivables is, as follows:
Trade receivables
Ageing analysis of trade receivables
(USD 1,000)
Not due
< 30 days
31—60 days
>60 days Total
Trade receivables at 31.12.2022 6,801 1,447 682 2,169 11,099
Trade receivables at 31.12.2021 5,937 2,666 1,177 2,070 11,850
For details regarding the Group’s procedures on managing credit risk, see note 6.3.
Expected credit losses
The Group recognizes an allowance for expected
credit losses (ECLs) for its financial assets. ECLs
are based on the cash flows that the Group
expects to receive. For trade receivables,
the Group applies a simplified approach in
calculating ECLs. Therefore, the Group does
not track changes in credit risk, but instead
recognizes a loss allowance based on lifetime
ECLs at each reporting date. The Group bases the
allowance of its historical credit loss experience,
adjusted for forward-looking factors specific to
the debtors and the economic environment.
Conditions and policies for considering
financial assets as in default and when they are
written off are further described in note 6.1.
Airthings — Annual Report 2022
48
Contract liabilities (USD 1,000) 31.12.2022 31.12.2021
Amount included at the beginning of the period 863 422
Addition of new contract liabilities 940 1,487
Performance obligations recognized in the period -692 -1,014
Total contract liabilities
1,111 894
Current contract liabilities
859 719
Non-current contract liabilities
253 175
The significant increase in the period’s contract liabilities is mainly attributed to the allocated
transaction price for the remaining performance obligation related to SaaS contracts, prepaid
12months in advance.
3.4 Trade and other payables
ACCOUNTING POLICIES
Trade and other payables are liabilities, i.e. present contractual obligations arising from a result
of past events where settlement is expected to result in an outflow of resources (payment). Trade
payables consist of invoices for goods and services where the Group has received the significant risks
and rewards of ownership as at the end of the reporting period. Other payables mainly consist of
withholding payroll tax and social security tax.
Trade and other payables are measured at fair value upon initial recognition and subsequently at
amortized cost.
Trade and other payables (USD 1,000) 31.12.2022 31.12.2021
Trade payables 3,937 4,775
Withholding payroll taxes and social security 1,034 976
Other payables 1,205 1,275
Total trade and other payables
6,177 7,027
3.5 Provisions
ACCOUNTING POLICIES
Provisions are liabilities with uncertain timing
or amount and are recognized when the Group
has a present obligation (legal or constructive)
as a result of a past event, it is probable that
an outflow of resources embodying economic
benefits will be required to settle the obligation
and a reliable estimate can be made of
the amount of the obligation. The amount
recognized as a provision is the best estimate of
the expenditure required to settle the present
obligation at the end of the reporting period,
that is, the amount that an entity would rationally
pay to settle the obligation at the end of the
financial year or to transfer it to a third party.
The group classifies provisions in
the following categories:
• Salary related costs: Contains a provision
for accrued holiday pay, accrued bonuses,
restructuring (when the Group has approved
a formal and detailed restructuring
plan, and the restructuring either has
commenced or been announced publicly)
and other salary related accruals.
Airthings — Annual Report 2022
49
• Social security for share based payments:
contains a provision for the accrued social
security on share options and restrictive share
units which will be paid when the options
are exercised. Provisions are calculated
based on an intrinsic value method. As
part of the share-based payment program,
employees are required to compensate
the Group for social security taxes payable
upon exercise. Hence, a corresponding
receivable has been recognized as other
non-current assets in the balance sheet.
• Other provisions: contains provision for
accrued consideration to a customer.
A provision is made and calculated based
on management assumptions at the time the
provision is made and is updated as and when
new information becomes available. All provisions
are reviewed at the end of the financial year.
Reconciliation of provisions
(USD 1,000)
Salary
related
costs
Social
security for
share-based
payments
Other
provisions
Total
At 1 January 2021 1,289 1,442 1,066 2,731
Additional provisions made 1,723 -61 2,041 1,662
Amounts used -1,289 -228 -2,502 -1,517
Unused amounts reversed - -24 -24
Currency translation effects - -39 -39
At 31 December 2021 1,723 1,090 604 2,813
Current provisions 2,328
Non-current provisions 1,090
At 1 January 2022 1,723 1,090 604 2,813
Additional provisions made 1,938 -600 -604 1,338
Amounts used -1,723 -243 - -1,966
Unused amounts reversed - -28 -28
Currency translation effects - -94 -94
At 31 December 2022 1,938 125 0 2,063
Current provisions 1,938
Non-current provisions 125
Airthings — Annual Report 2022
50
4.1 Overview of Group companies
ACCOUNTING POLICIES
Basis of consolidation
The consolidated financial statements
comprise the financial statements of Airthings
ASA and its subsidiaries as at 31 December
2022. The subsidiaries are consolidated
when control is achieved as defined by
IFRS 10. Specifically, the Group controls an
investee if, and only if, the Group has:
• Power over the investee (i.e., existing rights
that give it the current ability to direct
the relevant activities of the investee)
• Exposure, or rights, to variable returns
from its involvement with the investee
• The ability to use its power over the
investee to affect its returns
Generally, there is a presumption that
a majority of voting rights results in control.
However, the Group considers all relevant
facts and circumstances in assessing
whether it has power over an investee.
The Group re-assesses whether or not it controls
an investee if facts and circumstances indicate
that there are changes to one or more of the
three elements of control. Consolidation of
a subsidiary begins when the Group obtains
control over the subsidiary and ceases when the
Group loses control of the subsidiary. Assets,
liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are
included in the consolidated financial statements
from the date the Group gains control until the
date the Group ceases to control the subsidiary.
Profit or loss and each component of other
comprehensive income (“OCI”) are attributed to
the equity holders of the parent of the Group.
All intra-group assets and liabilities, equity,
income, expenses and cash flows relating to
transactions between members of the Group
are eliminated in full on consolidation.
The Group do not have ownership
in joint arrangements as defined by
IFRS 11, other associates, interests in
unconsolidated structured entities or
interests in unconsolidated subsidiaries
that require disclosure under IFRS 12.
The consolidated entities
The subsidiaries of Airthings ASA
are presented below:
Section 4 — Group structure
Consolidated entities Ofce Funct.
CUR
Shareholding Group's voting
ownership share
Airthings America INC USA USD 100% 100%
Airthings AB Sweden SEK 100% 100%
Airthings — Annual Report 2022
51
5.1 Intangible assets
Nature of the Group’s intangible assets
The Group’s intangible assets mainly
comprise of software and systems, internal
development projects and technology acquired
through the acquisition of subsidiaries.
ACCOUNTING POLICIES
Intangible assets acquired
Intangible assets acquired separately are
measured on initial recognition at cost.
The cost of intangible assets acquired in
a business combination is their fair value
on the date of acquisition. Following initial
recognition, intangible assets are carried
at cost less any accumulated amortization
and accumulated impairment losses.
Capitalization of internal development costs
Development expenditures on an individual
project, which represents new applications,
are recognized as an intangible asset
when the Group can demonstrate:
• The technical feasibility of completing
the intangible asset so that the asset
will be available for use or sale
• Its intention to complete and its ability
and intention to use or sell the asset
• How the asset will generate future
economic benefits
• The availability of resources to complete
the asset
• The ability to measure reliably the
expenditure during development
Other costs are classified as research
and are expensed as incurred. These
expenses are disclosed in note 2.5.
Useful lives and subsequent measurement
The useful lives of intangible assets are
assessed as either finite or indefinite and
may in some cases involve considerable
assessments. Intangible assets with indefinite
useful lives are initially measured at cost
and subsequently measured at cost less
any accumulated impairment losses.
Intangible assets with finite useful lives are
amortized over the useful economic life and
assessed for impairment whenever there is
an indication that the intangible asset may be
impaired. The amortization period and the
amortization method for an intangible asset
with a finite useful life are reviewed at least at
the end of each reporting period. The initial
assessment and review of economic useful lives
requires management to make estimates and
assumptions on the Group’s IP and competition
in the future. Changes in the expected useful life
are treated as changes in accounting estimates.
Section 5 — Fixed assets
Airthings — Annual Report 2022
52
(USD 1,000) Capitalized
Development
Costs
Software
& systems
Technology Goodwill Total
Acquisition cost
as at 1 January 2021
- 727 1,770 3,317 5,814
Additions through acquisitions - - - -
Additions - 433 141 - 574
Disposals - -
Currency translation effects - -31 -47 -107 -185
Acquisition cost
31 December 2021
- 1,129 1,864 3,210 6,203
Additions 1,196 184 766 - 2,145
Additions through acquisition - - - - -
Disposals - - - - -
Currency translation effects -48 -141 -247 -338 -774
Acquisition cost
as at 31 December 2022
1,148 1,171 2,383 2,872 7,573
Accumulated amortization
as at 1 January 2021
- 119 45 - 164
Amortization charge for the year - 167 176 - 343
Impairment charge for the period - - - - -
Currency translation effects - -4 -4 - -8
Accumulated amortization
as at 31 December 2021
- 282 217 - 499
Amortization charge for the year - 305 90 - 395
Impairment charge for the period - - 1,444 - 1,444
Currency translation effects - -33 -60 - -93
Accumulated amortization
as at 31 December 2022
- 554 1,690 - 2,244
Net book value:
At 31 December 2021 - 847 1,647 3,210 5,704
At 31 December 2022 1,148 617 693 2,872 5,331
Economic life (years) 5 10 Indefinite
Depreciation plan Straight-line
Additions
The additions in 2021 are mainly related to the
implementation of a subscription tool within
the Airthings for Business segment. Additions in
2022 relates mainly to capitalized development
costs. These assets are under development per
31.12.2022 and is planned released in 2023.
When the asset is released it will be classified
as Technology. Space CO
2
mini was launched
in Q4 2022 and amortization commenced.
Airthings — Annual Report 2022
53
Derecognition of technology – Airtight
During Q2 2022 Airthings have decided not to
sell Airtight hardware as a separate product,
but rather continue to help customers achieve
energy savings through current AfB solutions.
The group sees major optimization opportunities
to make existing buildings both smarter and
more energy efficient, and the insight gleaned
from the differential pressure concept will
inform R&D efforts for the AfB portfolio going
forward. This resulted in a derecognition of
technology of USD 1,5 million specifically
related to the Airtight technology hardware and
USD 0,2 million of the inventory, ref note 3.1.
5.2 Goodwill & impairment considerations
ACCOUNTING POLICIES
Recognized goodwill in the Group is derived
from the acquisition of Airtight AS in 2020.
Goodwill is an intangible asset whi
ch may
not individually be recognized as an intangible
asset due to the requirements in IAS 38.
The value of goodwill is primarily related to
synergies,
assembled workforce and their
competency to generate and commercialize
new technology as well as high growth
expectations. Goodwill also arises due to the
requirement to recognize deferred tax liabilities
for the difference between the
assigned
values and the tax bases of assets acquired and
liabilities assumed in a business combination
a
t amounts that do not reflect fair value.
Goodwill is initially measured at
cost (being the
excess of the aggregate of the consideration
transferred, the amount recognized for
non-controlling interests, and any previous
inter
est held over the net identifiable assets
acquired and liabilities assumed).
After initial recognition, goodw
ill is measured at
cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill
acquired in a business combination is, from
the acquisition date, allocated to each of the
Group’s cash-generating units (CGUs) that are
expected to benefit from the combination,
irrespective of whether other assets or liabilities
of the acquiree are assigned to those units.
According to IFRS 3, goodwill i
s to be allocated
at the acquisition date, to each of the acquirer’s
CGUs, or groups of CGUs, which are expected to
benefit from the business combination. This can
include existing CGUs of the acquirer irrespective
of whether other assets or liabilities of the
acquiree are assigned to those units. The Goodwill
from the acquisition of Airtight AS in 2020 was
allocated to the business segment CGU. The key
assumptions used to determine the recoverable
amount of the CGU are disclosed further below.
Impairment considerations
The Group has goodwill which are subject
to annual impairment testing. The testing
is performed annually as at 31 December
and when circumstances indicate that
the carrying value may be impaired.
Impairment is determined by assessing the
recoverable amount of each CGU (or group
of CGUs) to which goodwill relates. When
the recoverable amount of the CGU is less
than its carrying amount, an impairment loss
is recognized. Impairment losses relating to
goodwill cannot be reversed in future periods.
An asset’s recoverable amount is the higher of an
asset’s or CGUs fair value less costs of disposal
and its value in use. When the carrying amount
of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and
is written down to its recoverable amount.
The Group applies the value-in-use model
for determining recoverable amount for the
purpose of goodwill impairment testing.
For more information on the model and
key assumptions, see description below.
Airthings — Annual Report 2022
54
Accumulated impairment as at 1 January 2021 -
Impairment for the year -
Accumulated impairment as at 31 December 2021 -
Impairment for the year -
Accumulated impairment as at 31 December 2022 -
Carrying amount as at 1 January 2021 3,317
Carrying amount as at 31 December 2021 3,210
Carrying amount as at 31 December 2022 2,872
All of the Group’s goodwill is allocated to the Business segment CGU.
Goodwill (USD 1,000)
Gross amount as at 1 January 2021 3,317
Additions through acquisition -
Currency translation effects -108
Gross amount as at 31 December 2021 3,210
Currency translation effects -338
Gross amount as at 31 December 2022 2,872
SIGNIFICANT ACCOUNTING JUDGEMENTS
Business segment – CGU
For impairment testing, goodwill acquired through
the business combination of Airtight was allocated
to the business segment CGU. The business
segment CGU is the smallest identifiable group of
assets that generates cash inflows to the Group (that
goodwill can be allocated to), and these are largely
independent of the cash inflows from other assets.
Basis for determining the recoverable amount
The CGUs recoverable amount has been
determined based on its value in use. In assessing
value in use, the estimated future cash flows
are discounted to their present value using
a pre-tax discount rate that reflects current market
assessments of the time value of money and the
risks specific to the asset. The cash flows are derived
from detailed budget and forecast calculations
for the next four years approved by the Board of
Directors. Restructuring activities and significant
future investments are excluded from the budgets.
A long-term growth rate is calculated and applied
to project future cash flows after the fifth year. The
recoverable amount is sensitive to revenue growth
in the forecast period, the discount rate, expected
future cash flows and the terminal growth rate.
SIGNIFICANT ACCOUNTING ESTIMATES
AND ASSUMPTIONS
Impairment testing of goodwill
The calculation of value in use for the CGU’s are
most sensitive to the following assumptions:
• Revenue growth
• Free cash flow margin (before tax)
• Pre-tax discount rate
• Terminal growth rate
Revenue growth
The expected growth in revenues are based
on trends in the industry and the Group’s
market share. The growth forecast is based on
management’s expectations of future conditions
in the markets incl. competition. Macro trends
such as the increasing awareness of Indoor Air
Quality (IAQ) and heightened focus on energy
costs and sustainability are anticipated to intensify
in the years ahead. Management also expects
Airthings — Annual Report 2022
55
CGU Revenue
growth in the
forecast period*
EBITDA
margin
Terminal
growth rate
Pre-tax
discount rate
Business CGU – 31 December 2022
70.8% 14.50% 2.0% 14.1%
*Revenue growth rate is based on a compound annual growth rate (CAGR)
The recoverable amount of the cash generating units are higher than their carrying
amount and no impairment loss has been recognized in the current or prior period.
Sensitivity analysis
Future events could cause the key assumptions to deviate from the amounts used in the forecast
period. The Group has performed a sensitivity analysis for each key assumption; revenue growth
in the forecast period, EBITDA margin (before tax), terminal growth rate and the pre-tax discount
rate. Management believes that no reasonably possible change in the key assumptions above
would cause the carrying amount of the CGU to materially exceed its recoverable amount.
5.3 Property, plant and equipment
ACCOUNTING POLICIES
Property, plant and equipment (“PP&E”) is stated
at cost, net of accumulated depreciation and
accumulated impairment losses, if any. When
significant parts of PP&E are required to be
replaced at intervals, the Group depreciates
them separately based on their specific useful
lives. All other repair and maintenance costs
are recognized in profit o
r loss as incurred.
Depreciation is calculated on a straight–line basis
over the estimated useful lives of the assets.
The residual values, useful lives and methods of
depreciation of PP&E are reviewed at each financial
year end and adjusted prospectiv
ely, if appropriate.
The Group assesses, at each reporting date,
whether there is an indication that property,
plant and equipment may be impaired. If such
indication exists, the Group estimates the asset’s
or CGUs recoverable amount. The recoverable
amount is the higher of an asset’s or CGUs fair
value less costs of disposal and its value in use.
The recoverable amount is determined for
an individual asset, unless the asset does not
generate cash inflows that are largely independent
of those from other assets
or groups of assets.
No indicators for impairment of property,
plant and equipment were identified
in the current or prior period.
Airthings’s market position to remain largely
constant. Given these factors, management has
performed both a bottoms-up and top-down
forecasting of growth in Airthings for Business
and the assumption is presented as the constant
average growth rate over the forecast period.
EBITDA margin
The EBITDA margin is determined from an
analysis of historical levels before tax, adjusted for
expected changes to employee benefit expenses,
other expenses, capital expenditures and changes
to working capital. This, combined with an
assumption of a larger share of revenues coming
from software subscription, as well as operational
improvements, results in an improved EBITDA
margin than has been experienced historically.
Pre-tax discount rate
The discount rate reflects the current market
assessment of the risks specific to the CGU. The
pre-tax discount rate is estimated based on the
weighted average cost of capital (WACC).
Terminal growth rate
The terminal growth rate is the estimated
long-term rate of growth in the economy
where the business operates, aligned with
long term global inflation targets.
The key assumptions used to determine
the recoverable amount for the business
CGU are presented below:
Airthings — Annual Report 2022
56
(USD 1,000) Furniture and
equipment
Rental
instruments
Total
Acquisition cost as at 1 January 2021 846 83 929
Additions through acquisitions - - -
Additions 443 53 495
Currency translation effects -29 -3 -32
Acquisition cost as at 31 December 2021 1,260 132 1,392
Additions 282 88 370
Currency translation effects -78 -7 -85
Acquisition cost as at 31 December 2022 1,465 213 1,677
Accumulated depreciation as at 1 January 2021 305 29 334
Depreciation for the year 247 9 256
Currency translation effects -6 - -6
Accumulated depreciation as at 31 December 2021 545 39 584
Depreciation for the year 240 29 269
Currency translation effects -6 -1 -6
Accumulated depreciation as at 31 December 2022 780 67 847
Net book value:
At 1 January 2021 541 53 595
At 31 December 2021 715 94 808
At 31 December 2022 685 146 830
Economic life (years) 5 5
Depreciation plan Straight-line
5.4 Right-of-use assets and lease liabilities
ACCOUNTING POLICIES
At inception of a contract, The Group
assesses whether the contract is, or contains,
a lease. A contract is, or contains, a lease
if the contract conveys the right to control
the use of an identified asset for a period
of time in exchange for consideration.
Group as a lessee
At the commencement date, the Group
recognizes a lease liability and corresponding
right-of-use asset for all lease agreements
in which it is the lessee, except for the
following exemptions applied:
• Short-term leases
(defined as 12 months or less)
• Low value assets (with an underlying
value of less than USD 5 thousands)
For these leases, the Group recognizes
the lease payments as operating
expenses in the consolidated statement
of comprehensive income.
Airthings — Annual Report 2022
57
Measuring the lease liability
The lease liability is initially measured at the
present value of the lease payments for the right
to use the underlying asset during the lease term
that are not paid at the commencement date.
The lease term represents the non-cancellable
period of the lease, together with periods
covered by an option to extend the lease
when the Group is reasonably certain to
exercise this option, and periods covered by
an option to terminate the lease if the Group is
reasonably certain not to exercise that option.
The lease payments included in the
measurement comprise:
• Fixed lease payments, less any lease
incentives received
• Variable lease payments that depend on an
index or a rate, initially measured using the
index or rate as at the commencement date
The lease liability is subsequently measured
by increasing the carrying amount to reflect
interest on the lease liability, reducing the
carrying amount to reflect the lease payments
made and remeasuring the carrying amount to
reflect any reassessment or lease modifications,
or to reflect adjustments in lease payments
due to an adjustment in and index or rate.
The Group presents its lease liabilities as
separate line items in the consolidated
statement of financial position.
Measuring the right-of-use asset
The right-of-use asset is initially measured at
cost. The cost of the right-of-use asset includes
the corresponding amount of the initial
measurement of the lease liability, any lease
payments made at or before the commencement
date and initial direct costs incurred.
The right-of-use asset is subsequently measured
at cost less accumulated depreciation and
impairment losses, applying the same policies
for impairment as for property, plant and
equipment (note 5.3). The right-of-use asset is
depreciated from the commencement date to
the earlier of the lease term and the remaining
useful life of the right-of-use asset. Depreciation
is calculated on a straight-line basis.
The Group presents its right-of-use assets
as separate line items in the consolidated
statement of financial position.
Group as a lessor
The Group does also act as a lessor through the
professional segment, where the Group rents out
equipment on a short term basis. Such leases in
which the Group does not transfer substantially
all the risks and rewards incidental to ownership
of an asset are classified as operating leases. The
Group does not have finance leases. Initial direct
costs incurred in negotiating and arranging an
operating lease are added to the carrying amount
of the leased asset and recognized over the
lease term on the same basis as rental income.
The Group’s assets under operating leases are
included as property, plant and equipment and
presented as rental instruments in note 5.3.
The Group’s rental income under operating
leases is included as revenue in the consolidat
ed
statement of profit or loss and specified in note 2.2.
The Group’s leased assets
The Group leases several assets, mainly
office space in Oslo and Bergen, Norway.
Additionally, the Group leases office space in
Stockholm, Sweden and Fort Worth, Texas and
Massachusetts, USA. Leases of office space
generally have lease terms between 3 and 10
years. The Group also leases office equipment,
however, these are expensed as incurred as they
are either considered short-term or of low-value.
The Group’s right-of-use assets recognized
in the consolidated statement of financial
position are presented in the table below:
Airthings — Annual Report 2022
58
Right-of-use assets (USD 1,000) Ofce space Other Total
Balance as at 1 January 2021 3,528 50 3,578
Additions of right-of-use assets 1,536 1 1,537
Depreciation 728 8 737
Currency translation effects -136 - -136
Balance as at 31 December 2021 4,199 59 4,241
Additions of right-of-use assets - - -
Depreciation 764 5 769
Currency translation effects -332 -332
Balance as at 31 December 2022 3,102 64 3,140
Remaining lease term or remaining useful life (years) 2–6 6
Depreciation plan Straight-line
Expenses in the period related to practical expedients
and variable payments (USD 1,000)
2022 2021
Short-term lease expenses - 8
Low-value assets lease expenses 223 196
Variable lease expenses in the period (not included in the lease liabilities) - -
Total lease expenses in the period 223 205
The Group’s lease liabilities
Undiscounted lease liabilities and maturity
of cash outows (USD 1,000)
31.12.2022 31.12.2021
Less than one year 819 999
1–2 years 827 994
2–3 years 832 1,001
3–4 years 821 1,010
More than four years 337 1,312
Total undiscounted lease liabilities
3,637 5,316
The lease expenses in the period related to short-term leases are included in other operating
expenses in the consolidated statement of comprehensive income, and the payments are
presented in the Group’s operating activities in the consolidated statement of cash flows.
Airthings — Annual Report 2022
59
Lease commitments not included
in the lease liabilities
Inflation adjustments
In addition to the lease liabilities presented
above, the Group is committed to pay variable
lease payments for its office buildings, mainly
related to future inflation adjustments which is
not included in the initial calculation of lease
liabilities. The lease liability and right-of-use
asset will be adjusted to reflect the inflation
adjustment when the uncertainty related to the
adjustment has been resolved, however, due
to low inflation forecasts these adjustments are
expected to be immaterial.
Extension and termination options
The Group has some lease contracts that
include extension and termination options.
These options are negotiated by management
to provide flexibility in managing the Group’s
business needs. The Group did not include
the extension period for leases as part of
the lease term when management were not
reasonably certain to exercise the option to
extend the leases. Furthermore, the periods
covered by termination options are included
as part of the lease term only when they are
reasonably certain not to be exercised.
Other matters
The Group’s leases does not contain provisions
or restrictions that impacts that Group’s
dividend policies or financing possibilities.
Changes in the lease liabilities – 2021 (USD 1,000) Total
At 1 January 2021 3,716
New leases recognized during the period 1,537
Cash payments for the principal portion of the lease liability -636
Cash payments for the interest portion of the lease liability -217
Interest expense on lease liabilities 217
Currency translation effects -144
Total lease liabilities at 31 December 2021 4,473
Current lease liabilities in the statement of nancial position 670
Non-current lease liabilities in the statement of nancial position 3,803
Changes in the lease liabilities – 2022 (USD 1,000) Total
At 1 January 2022 4,473
New leases recognized during the period -
Cash payments for the principal portion of the lease liability (nancing activities) -698
Cash payments for the interest portion of the lease liability (operating activities) -201
Interest expense on lease liabilities 201
Currency translation effects -371
Total lease liabilities at 31 December 2022 3,404
Current lease liabilities in the statement of nancial position 850
Non-current lease liabilities in the statement of nancial position 2,554
Airthings — Annual Report 2022
60
6.1 Overview of financial instruments
ACCOUNTING POLICIES
A financial instrument is any contract that gives
rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
Classification of financial instruments
The Group’s financial instruments are
grouped in the following categories:
Financial Assets
Financial assets measured
subsequently at amortized cost:
This includes mainly trade receivables
and cash and cash equivalents.
In order for a financial asset to be classified
and measured at amortized cost or fair value
through OCI, it needs to give rise to cash flows
that are ‘solely payments of principal and interest
(SPPI)’ on the principal amount outstanding.
This assessment is referred to as the SPPI
test and is performed at an instrument level.
All of the Group’s financial assets (i.e. trade
receivables and cash and cash equivalents)
are part of the Group’s business model with
the sole objective to collect contractual cash
flows. Additionally, the contractual terms of
the financial assets, primarily applicable to
trade receivables, give rise on specified dates
to cash flows that are solely payments of
principal and interest on the principal amount
outstanding, thereby passing the SPPI test.
Reference is made to note 3.2 for information
about the Group’s policies related to
estimating expected credit losses.
Financial Liabilities
Financial liabilities measured
subsequently at amortized cost:
Represent the Group’s interest-bearing
liabilities as well as non-interest bearing
liabilities such as trade payables.
The Group does not have derivative
financial instruments. None of the Group’s
financial liabilities are designated as at
fair value through profit or loss, i.e. they
are all measured at amortized cost.
Initial recognition and subsequent measurement
The Group’s financial assets and liabilities
are initially recognized at fair value plus
directly attributable transaction expenses.
Subsequently, these instruments are measured
at amortized cost using the effective interest
method (EIR). Gains and losses are recognized
in profit or loss upon impairment, when the
instruments are derecognized as well as
through the EIR amortization process.
Impairment of financial assets
Financial assets measured at amortized cost
are considered for impairment by recognizing
an allowance for expected credit losses (ECLs).
The Group applies a simplified approach (as
applicable for trade receivables) in calculating
ECLs, where the Group does not track changes
in credit risk, but instead recognizes a loss
allowance based on lifetime ECLs at each
reporting date. The Group bases its ECLs
on its historical losses, adjusted for forward-
looking factors specific to the debtors and the
economic environment (e.g. market trends,
default rates in the retail market etc.).
Section 6 — Financial
instruments and equity
Airthings — Annual Report 2022
61
Derecognition of financial instruments
A financial asset is derecognized when the
rights to receive cash flows from the asset
have expired, the Group has transferred its
rights to receive cash flows from the asset
or the Group has assumed an obligation
to pay the received cash flows in full
under a “pass-through” arrangement.
A financial liability is derecognized when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms or the
terms of an existing liability are substantially
modified, such an exchange or modification
is treated as the derecognition of the original
liability and the recognition of a new liability.
The difference in the respective carrying
amounts is recognized in the consolidated
statement of comprehensive income.
The carrying amount of the Group’s
financial assets and liabilities are
presented in the tables below:
31 December 2022 (USD 1,000) Note Financial
instruments at
amortized cost
Total
Assets
Trade receivables 3.2 11,099 11,099
Cash and cash equivalents 6.5 13,274 13,274
Total nancial assets 24,373 24,373
Liabilities
Trade payables 3.4 3,937 3,937
Non-current lease liabilities 5.4 2,554 2,554
Current lease liabilities 5.4 850 850
Total nancial liabilities 7,342 7,342
Signicant nance income and nance costs arising from the Group’s
nancial instruments are disclosed separately in note 2.7.
31 December 2021 (USD 1,000) Note Financial
instruments at
amortized cost
Total
Assets
Trade receivables 3.2 11,850 11,850
Cash and cash equivalents 6.4 42,174 42,174
Total nancial assets 54,024 54,024
Liabilities
Trade payables 3.4 4,775 4,775
Non-current lease liabilities 5.4 3,803 3,803
Current lease liabilities 5.4 670 670
Total nancial liabilities 9,248 9,248
Airthings — Annual Report 2022
62
6.2 Ageing of financial liabilities
Contractual undiscounted cash flows from financial liabilities is presented below:
Remaining contractual maturity
31.12.2022 (USD 1,000) Note 1 — 12
months
1 — 2
years
2 — 3
years
3 — 4
years
More than
4 years
Total
Financial liabilities
Trade and other payables 3.4 6,177 6,177
Non-current lease liabilities 5.4 827 832 821 337 2,818
Current lease liabilities 5.4 819 819
Total nancial liabilities 6,996 827 832 821 337 9,813
Remaining contractual maturity
31.12.2021 (USD 1,000) Note 1 — 12
months
1 — 2
years
2 — 3
years
3 — 4
years
More than
4 years
Total
Financial liabilities
Trade and other payables 3.4 7,027 - - - - 7,027
Non-current lease liabilities 5.4 - 994 1,001 1,010 1,312 4,316
Current lease liabilities 5.4 999 - - - - 999
Total nancial liabilities 8,026 994 1,001 1,010 1,312 12,343
Airthings — Annual Report 2022
63
6.3 Financial risk management
Overview
The Group’s principal financial liabilities
comprise lease liabilities and trade and other
payables. The main purpose of these financial
liabilities is to finance the Groups’ operations.
The Group’s principal financial assets include
trade receivables, and cash and short-term
deposits that derive directly from its operations.
The Group is exposed to a range of risks
affecting its financial performance, including
market risk, credit risk and liquidity risk. The
Group seeks to minimize potential adverse
effects of such risks through sound business
practice, risk management and hedging.
Risk management is a continuous process and
an integrated part of the Group’s business. When
operating across multiple markets, Airthings is
exposed to a range of risks that may affect its
business. The key risk areas are discussed below.
Market risk
Market risk is the risk that the fair value or
future cash flows of a financial instrument will
fluctuate because of changes in market prices.
Market risk for the Group comprises two types
of risk: interest rate risk and currency risk.
Financial instruments affected by market risk
include interest bearing debt, cash and cash
and cash equivalents, trade receivables, lease
liabilities and trade and other payables.
War in Ukraine — the ongoing war does not
currently impact the Group directly, as it has
no operating presence in either Russia,Belarus
or Ukraine. Indirect effects however, such as
financial market volatility, sanctions related
knock-on effects, general economic market
conditions and other future responses of
international governments, might have an
impact on the Group’s financial results and
financial position. The Group’s management
continues to monitor the situation and has an
ongoing assessment of potential impact on the
Group’s financial results and financial position.
Interest rate risk
Interest rate risk is the risk that the fair value of
future cash flows of a financial instrument will
fluctuate because of changes in market interest
rates. The Group’s borrowings have historically
been exposed to interest rate fluctuations. As
all borrowings were repaid in January 2021, the
Group does no longer have any significant interest
rate risk related to interest-bearing liabilities.
Foreign currency risk
Foreign currency risk is the risk that the fair value
or future cash flows of an exposure will fluctuate
because of changes in foreign exchange rates.
The Group is exposed to currency fluctuations
due to the international nature of its operations.
The Group’s exposure to the risk of fluctuations
in foreign exchange rates relates primarily to
the Group’s operating activities (revenue and
expenses denominated in a foreign currency)
and the Group’s net investments in foreign
subsidiaries. A significant part of revenues is
denominated in USD, with a small portion incurred
in NOK, EUR and CAD. Most of its operating
expenses are incurred in NOK. Further, the Group
could also potentially be negatively affected
by fluctuations in other currencies in the future.
The Group does not currently hedge currency
exposure with the use of financial instruments
but monitors the net exposure over time.
Foreign currency sensitivity
The following table illustrates the sensitivity
for a hypothetical increase or decrease
in the foreign exchange rates related to
the Group’s financial assets and liabilities
holding all other variables constant:
Airthings — Annual Report 2022
64
Foreign currency sensitivity Date Change
in FX rate
Effect on prot before
tax (USD 1,000)
Increase / decrease in NOK/USD 31.12.2022 +/- 10% 820
Increase / decrease in NOK/USD 31.12.2021 +/- 10% 19
Foreign currency sensitivity Date Change
in FX rate
Effect on prot before
tax (USD 1,000)
Increase / decrease in NOK/CAD 31.12.2022 +/- 10% 152
Increase / decrease in NOK/CAD 31.12.2021 +/- 10% 403
Foreign currency sensitivity Date Change
in FX rate
Effect on prot before
tax (USD 1,000)
Increase / decrease in NOK/EUR 31.12.2022 +/- 10% 160
Increase / decrease in NOK/EUR 31.12.2021 +/- 10% 120
Credit risk
Credit risk represents the possibility of
a counterparty not meeting its obligations under
a financial instrument or customer contract,
leading to a financial loss. The Group is mainly
exposed to credit risk from its operating activities.
The Group has close connection with its
largest customers and receivable balances are
monitored on an ongoing basis. Payment terms
range from a couple of business days to longer
periods e.g 60 to 90 days. The Group’s exposes
to losses have historically been low. However,
the increased operations of the Group outside
the US and home market exposes Airthings to
different credit risk environments. The Board
of Directors deems credit risk to be at an
acceptable level given the current operational
circumstances and outlook of the Group.
An impairment analysis is performed at each
reporting date to measure expected credit losses.
The provision rates are based on days past due,
product type, customer type and rating, and
coverage by letters of credit or other forms of
credit insurance. For an overview of the ageing of
trade receivables and the expected credit losses
recognized for trade receivables see note 3.2.
Liquidity risk
Liquidity represents the risk that the Group may
potentially encounter difficulties in meeting
obligations associated with financial liabilities
that are settled by provision of cash or another
financial asset. The Group supervises its risk by
monitoring its working capital, and overdue
trade receivables. The Group has weakned its
cash position from 2021. To improve the cash
situation the group has intensified its focus on
optimizing business operations and reducing
inventories. This effort includes promotional
activities to increase sales and cost initiatives.
In addition, the group has entered into a USD 8
million revolving credit facility with Danske Bank
in 2023, see note 7.4. The board of directors have
also resloved to propose a private placement
to raise NOK 75 million. The liquidity risk is
hence considered to be at a reasonable level.
An overview of the maturity profile of the Group’s
financial liabilities with corresponding cash
flow effect is presented in note 6.2 and 6.9.
Airthings — Annual Report 2022
65
6.4 Cash and cash equivalents
ACCOUNTING POLICIES
Cash and cash equivalents in the statement
of financial position comprise cash at banks
and short-term deposits with a maturity of
three months or less, which are subject to
an insignificant risk of changes in value. For
the purpose of the consolidated statement
of cash flows, cash and cash equivalents
consist of cash and short-term deposits.
Restricted bank deposits comprise of cash
for withholding taxes which may not be used
for other purposes, in addition to restricted
funds related to a credit agreement with DNB
MasterCard and restricted deposits in Nordea.
6.5 Share capital and shareholders
information
For the purpose of the Group’s capital
management, capital includes issued
capital, share premium and all other equity
reserves attributable to the equity holders
of the parent. The primary objective of the
Group’s capital management is to ensure
that it maintains a healthy working capital
and financial stability in order to support its
growing business operations and to maximize
shareholder value. The Group manages its
capital structure and makes adjustments in
light of changes in economic conditions. To
maintain or adjust the capital structure, the
Group may adjust the dividend payment to
shareholders, return capital to shareholders,
issue new shares or issue debt. The Group
monitors capital using an equity ratio, which
is ‘Total equity’ divided by ‘Total assets’.
ACCOUNTING POLICIES
Costs related to equity transactions
Direct and incremental transaction
costs are deducted from equity,
net of associated income tax.
Cash and cash equivalents (USD 1,000) 31.12.2022 31.12.2021
Bank deposits, unrestricted 11,960 40,846
Bank deposits, restricted
1,314 1,328
Total cash and cash equivalents 13,274 42,174
Bank deposits earns a low interest at floating rates based on the bank deposit rates.
(USD 1,000) 31.12.2022 31.12.2021
Total Equity 50,928 67,842
Total Assets 63,742 83,680
Equity ratio 80% 81%
Airthings — Annual Report 2022
66
Distribution to shareholders
The Group recognizes a liability to make
distributions to equity holders when the
distribution is authorized and the distribution
is no longer at the discretion of the Group.
As per the corporate laws of Norway,
a distribution is authorized when it is approved
by the shareholders. A corresponding
amount is recognized directly in equity.
No distributions were made to shareholders
in the current or prior period. Further,
there are no proposed dividends.
The ultimate parent
Airthings ASA is the ultimate parent of the Group.
All shares are ordinary and have the same voting
rights and rights to dividends. Reconciliation of
the Group’s equity is presented in the statement
of changes in equity.
Purchase and sale of treasury shares
The Group’s treasury shares were
settled in connection with the listing
at Euronext Growth in 2020.
Issued capital and reserves:
Share capital in Airthings ASA Number of shares
authorized
and fully paid
Par value
per share
(NOK)
Financial
Position
(USD 1,000)
At 31 December 2021 171,816,437 0.01 190
Share capital increase – February 2022 550,400 0.01 1
Share capital increase – May 2022 482,200 0.01 1
Share capital increase – July 2022 160,109 0.01 0
Share capital increase – November 2022 983,200 0.01 1
At 31 December 2022 173,992,346 0.01 192
Airthings — Annual Report 2022
67
The Group’s shareholders:
Shareholders in Airthings ASA at 31.12.2022 Total shares Ownership/
Voting rights
Firda AS 34,780,124 20%
Verdipapirfondet KLP AksjeNorge 7,962,222 5%
Rabakken Invest AS 5,800,364 3%
Atlas Invest AS 5,637,468 3%
Halvor Wøien 4,894,522 3%
Erlend Peter Johnsen Bolle 4,819,722 3%
Victoria India Fund AS 4,558,131 3%
Koki Yoshioka 4,166,650 2%
TIN World Tech 3,025,292 2%
Brownske Bevegelser AS 3,000,000 2%
Danske Invest Norge Vekst 2,962,962 2%
Bjørn Magne Sundal 2,900,000 2%
Skilling Systemer AS 2,900,000 2%
Møsbu AS 2,814,236 2%
Longfellow Invest AS 2,753,534 2%
Nore-Invest AS 2,450,659 1%
Grotmol Solutions AS 2,434,403 1%
Storlien Invest AS 2,432,000 1%
Verdipapirfondet Storebrand Norge 1,894,800 1%
Centra Invest AS 1,851,851 1%
Other 69,953,406 40%
Total 173,992,346 100%
Shares held by management and the Board of Directors at the
end of the reporting period is disclosed in note 7.1.
Airthings — Annual Report 2022
68
Shareholders in Airthings ASA at 31.12.2021 Total shares Ownership/
Voting rights
Firda AS 25,826,543 15%
Verdipapirfondet KLP AksjeNorge 7,762,222 5%
Rabakken Invest AS 5,800,364 3%
Atlas Invest AS 5,637,468 3%
Halvor Wøien 4,879,522 3%
Erlend Peter Johnsen Bolle 4,819,722 3%
Victoria India Fund AS 4,558,131 3%
J.P. Morgan Bank Luxembourg S.A. 4,433,967 3%
Bjørn Magne Sundal 4,364,999 3%
Koki Yoshioka 4,166,650 2%
JPMorgan Chase Bank 4,000,000 2%
Verdipapirfondet EIKA Spar 3,382,067 2%
Skandinaviska Enskilda Banken AB 3,025,292 2%
Skilling Systemer AS 3,000,000 2%
Danske Invest Norge Vekst 2,962,962 2%
Møsbu AS 2,814,236 2%
Verdipapirfondet Storebrand Norge 2,657,876 2%
Longfellow Invest AS 2,453,534 1%
Nore-Invest AS 2,450,659 1%
Storlien Invest AS 2,427,533 1%
Other 70,392,690 41%
Total 171,816,437 100%
Shares held by management and the Board of Directors at the
end of the reporting period is disclosed in note 7.1.
Airthings — Annual Report 2022
69
6.6 Share-based payments
ACCOUNTING POLICIES
Employees (including members of the Board and
management) of the Group receive remuneration
in the form of share-based payments, whereby
employees render services as consideration for
equity instruments (equity-settled transactions).
Equity-settled transactions
The cost of equity-settled transactions is
determined by the fair value at the date when
the grant is made using an appropriate valuation
model (the Black-Scholes-Merton Model).
That cost is recognized in employee benefits
expense, together with a corresponding increase
in equity (other capital reserves), over the period
in which the service and, where applicable,
the performance conditions are fulfilled (the
vesting period). The cumulative expense
recognized for equity-settled transactions
at each reporting date until the vesting date
reflects the extent to which the vesting period
has expired and the Group’s best estimate of the
number of equity instruments that will ultimately
vest. The expense or credit in the statement
of profit or loss for a period represents the
movement in cumulative expense recognized
as at the beginning and end of that period.
Service and non-market performance conditions
are not taken into account when determining
the grant date fair value of awards, but the
likelihood of the conditions being met is
assessed as part of the Group’s best estimate
of the number of equity instruments that will
ultimately vest. Market performance conditions
are reflected within the grant date fair value.
Any other conditions attached to an award,
but without an associated service requirement,
are considered to be non-vesting conditions.
Non-vesting conditions are reflected in the fair
value of an award and lead to an immediate
expensing of an award unless there are also
service and/or performance conditions.
No expense is recognized for awards that do not
ultimately vest because non-market performance
and/or service conditions have not been met.
Where awards include a market or non-vesting
condition, the transactions are treated as vested
irrespective of whether the market or non-vesting
condition is satisfied, provided that all other
performance and/or service conditions are satisfied.
Share option plans — description
Option scheme 2018
Under the Group’s share option plan from
2018, rights to purchase Airthings ASA shares
at a specific price are granted to members of
the Board, management and employees of the
Group. Each option grant vest as follows: 25%
of the options are vested 12 months from the
grant date, then 1/48 vest each month thereafter.
Full vesting occurs after four years and last
possible exercise is 10 years from grant date.
Option scheme 2021 & 2022
Options granted prior to the Annual General
Meeting vests in tranches that vest over four years,
25% of the options vest on the first anniversary
of the grant date and the remaining 75% of the
options vest in equal monthly tranches over
the next 36 months, subject to employment by
the Group. The options can be exercised after
they are fully vested until they expire 10 years
after the grant date. Options granted after
the Annual General Meeting vests with equal
tranches with 25% each year starting on the
first anniversary of the grant date. The options
can be exercised after they are fully vested
until they expire 5 years after the grant date.
The Group accounts for the share options
under the two option schemes as equity-settled
transactions, measured by applying the Black-
Scholes-Merton option-pricing model for European
options (“BSM”). Share options held by members
of the Board and management at the end of the
reporting period are summarized in note 7.1.
The fair value of the options were determined at
the grant dates and expensed over the vesting
period. USD 174 thousands was expensed as
employee benefit expenses in the period (USD
608 thousands in 2021). The expected future
social security tax on share based payments are
recorded as a liability and disclosed in note 3.5.
Airthings — Annual Report 2022
70
Movements during the year
The following table illustrates the number and
weighted average exercise prices (WAEP) of, and
movements in, share options during the year:
Overview of outstanding options at 31.12.2022:
2022
WAEP
(NOK)
2022
Number
2021
WAEP
(NOK)
2021
Number
Outstanding options 1 January 3.35 9,876,257 2.08 9,715,824
Options granted
4.86 2,194,496 9.36 1,744,156
Options forfeited
6.55 -667,049 4.71 -372,923
Options exercised*
1.38 -2,175,909 1.40 -1,210,800
Options expired
4.62 -180,963 - -
Outstanding options 31 December 3.92 9,046,832 3.35 9,876,257
Exercisable at 31 December
* The weighted average share price at the date of exercise of these options was NOK 1.38 in 2022, and NOK 1.40 in 2021.
Exercise
price (NOK)
Number of
outstanding
options
Weighted Average
remaining
contractual life
Number
of options
exercisable
0.00—2.00 3,254,600 3.93 3,254,600
2.00—4.00 3,427,230 5.76 1,490,691
4.00—6.00 187,275 5.69 39,200
6.00—8.00 269,609 6.87 143,448
8.00—10.00 1,546,717 3.60 380,352
10.00—12.00 182,977 4.74 25,610
12.00— 178,424 7.90 86,531
9,046,832 5,420,432
The weighted average remaining contractual life for the options outstanding as at
31 December 2022 was 4.79 years (2021: 6.06 years). The weighted average fair
value of options granted during the year was NOK 1.51 (2021: NOK 4.05).
Airthings — Annual Report 2022
71
Overview of outstanding options at 31.12.2021:
Exercise
price (NOK)
Number of
outstanding
options
Weighted Average
remaining
contractual life
Number
of options
exercisable
0.00—2.00 5,226,600 5.34 4,747,800
2.00—4.00 2,427,000 7.70 1,265,800
4.00—6.00 120,000 8.58 29,600
6.00—8.00 281,800 8.68 132,064
8.00—10.00 1,447,874 4.60 2,708
10.00—12.00 106,971 6.69 2,845
12.00—12.00+ 266,012 9.13 23,792
Outstanding options 31 December 9,876,257 6,204,609
SIGNIFICANT ACCOUNTING ESTIMATES
AND ASSUMPTIONS
Estimating fair value for share-based payment
transactions requires determination of the most
appropriate valuation model, which depends
on the terms and conditions of the grant. This
estimate also requires determination of the
most appropriate inputs to the valuation model
including the expected life of the options,
volatility and dividend yield and making
assumptions about them. Due to limited
historical data and liquidity these assumptions
include significant estimates by management.
Assumptions used to determine fair value
of option grants:
The following table list the inputs to
the model used for the plans for the
years ended 31 December 2022 and
31 December 2021, respectively:
The expected life of the options is based on historical data and current expectations and
is not necessarily indicative of exercise patterns that may occur. The expected volatility
reflects the assumption that the historical volatility over a period similar to the life of the
options is indicative of future trends, which may not necessarily be the actual outcome.
Exercise of options are subject to social security taxes (SST). For SST-provisions, see note 3.5.
2022 2021
Weighted average fair values at the measurement date (NOK) 3.80 4.05
Dividend yield (%) 0% 0%
Expected volatility (%) 42.5% 45.6%
Risk–free interest rate (%) 3.30% 1.20%
Expected life of share options (years) 2.50 5.79
Weighted average share price (NOK) 4.10 9.67
Weighted average exercise price (NOK) 5.05 9.36
Model used BSM BSM
Airthings — Annual Report 2022
72
6.7 Earnings per share
ACCOUNTING POLICIES
Basic EPS is calculated by dividing the profit for
the year attributable to ordinary equity holders
of the parent by the weighted average number
of ordinary shares outstanding during the year.
Diluted EPS is calculated by dividing the profit
attributable to ordinary equity holders of
the parent by the weighted average number
of ordinary shares outstanding during the
year plus the weighted average number
of ordinary shares that would be issued
on conversion of all the dilutive potential
ordinary shares into ordinary shares.
The following table reflects the income and
share data used in the EPS calculations:
(Prot or loss in USD) 2022 2021
Prot or loss attributable to ordinary equity holders – for basic EPS -10,565,598 -7,260,506
Prot or loss attributable to ordinary equity holders adjusted for
the effect of dilution*
-10,565,598 -7,260,506
Weighted average number of ordinary shares – for basic EPS 172,826,775 171,306,689
Weighted average number of ordinary shares adjusted for the
effect of dilution
177,557,976 178,442,358
Basic EPS — prot or loss attributable to equity
holders of the parent
-0.06 -0.04
Diluted EPS — prot or loss attributable to equity
holders of the parent*
-0.06 -0.04
*The ordinary shares are not adjusted for the effect of dilution as the effect of including the additional shares is antidilutive.
6.8 Changes in liabilities arising from financing activities
Reconciliation of changes in liabilities incurred as a result of financing activities:
Non-cash changes
2022 (USD 1,000) Note 01.01.
2022
Cash
ow
effect
New
leases
Foreign
exchange
movement
Other
changes
31.12.
2022
Lease liabilities 5.4 4,473 -898 - -371 201 3,404
Total liabilities from nancing 4,473
-898
- -371 201 3,404
Non-cash changes
2021 (USD 1,000) Note 01.01.
2021
Cash
ow
effect
New
leases
Foreign
exchange
movement
Other
changes
31.12.
2021
Current interest-bearing liabilities 1,901 -1 905 - - 4 -
Lease liabilities 5.4 3,716 -853 1,537 -144 217 4,473
Total liabilities from nancing 5,617
-2,758
1,537 -144 221 4,473
Airthings — Annual Report 2022
73
7.1 Remuneration to Management and Board
Remuneration to the Board of Directors
Remuneration for the members of the Board
is determined by the Annual General Meeting
(AGM). The remuneration is not linked to
the Group’s performance but reflects the
Board’s responsibilities, expertise, time and
commitment. Remuneration of the Board of
Directors consist of a fixed annual fee, and was
adopted by the General Meeting on May 25,
2022. Annual remuneration is USD 36 thousands
for the Chairman and USD 21 thousands for
Board Members, whereof 50% shall be paid
out in advance and 50% in arrears. Employee
representatives do not receive remuneration
nor share options for board participation.
Remuneration to the management team
The Board of Airthings ASA determines the
principles applicable to the Group’s policy for
compensation to the management team. The
Board is directly responsible for determining
the CEO’s salary and other benefits. The Group’s
management team includes the Chief Executive
Officer (“CEO”), the Chief Operating Officer
(“COO”), the Chief Technology Officer (“CTO”),
the Chief Marketing Officer (“CMO”), the Chief
Financial Officer (“CFO”), the SVP Airthings for
Business, SVP Airthings for Consumer, and the
Director of Human Resources (“Director of HR”).
The remuneration for the executive
management consists of fixed base salary
(“FBS”), short term incentive (“STI”) (cash-
component) and a long term incentive
(“LTI”) (equity component) retention scheme
consisting of a share option program.
Fixed Base Salary (FBS)
FBS allows the Group to attract and recruit
executives that are necessary for the long-term
profitability and sustainability of the Group.
FBS shall reflect the individual’s position and
degree of responsibility. The size of the FBS
shall reflect market rates at the relevant location.
The FBS shall be competitive with relevant
businesses within the industry, and shall take into
account inter alia the scope and responsibility
associated with the position, as well as the skills,
experience and performance of senior executive.
The FBS has no specified maximum level.
Short term incentive –
Cash-component/Bonuses (STI)
The STI is determined 50% on achievement
related to qualitative key performance indicators
(“KPI’s”) set by the Board and 50% discretionary
set by the Board. In 2022 the STI for the CEO
was 60% on achievement related to qualitative
key performance indicators (“KPI’s”) set by the
Board and 40% discretionary set by the Board.
The STI shall be evaluated and documented
on an annual basis. The maximum STI is limited
to 40% of the CEOs FBS and 30% for other
members of the executive team (excl. SVP,
Airthings for Consumer and SVP, Airthings for
Business). SVP, Airthings for Consumer and
SVP, Airthings for Business have an agreement
of sales bonus up to 30% of FBS. The criteria
for bonus achievement are based on the
sales teams’ total budgets for the year.
Section 7 — Other disclosures
Airthings — Annual Report 2022
74
Long term incentive –
Equity component/Share option plan (LTI)
Members of the management team have
been granted share options under the Group’s
share option plan, described in note 6.7.
The share options held by the management
team is summarized further below.
Pension
All members of the management team are part
of the defined contribution pension scheme.
Severance Arrangements
If the CEO is terminated by the Board, he is not
entitled to severance pay outside of the ordinary
notice period of 3 months. Similarly, there are
no agreements for severance pay for the other
members of the management team, outside
of the ordinary notice period of 3 months.
Loans and guarantees
No loans have been granted and
no guarantees have been issued to
members of the management team or
any member of the Board of Director in
the current or prior reporting period.
Airthings — Annual Report 2022
75
Remuneration to the management team for the year ended 31 December 2022 (USD 1,000
1
):
Name Title Salary Bonus Pension Other Total
Øyvind Birkenes CEO 231 69 8 125 434
Jeremy Gerst Current CFO
2
128 - 8 1 137
Magnus Navdal Bekkelund Former CFO
3
34 8 2 0 44
Audhild Andersen Randa COO 141 26 8 1 176
Erlend Bolle CTO 126 24 7 1 158
Lauren Pedersen CMO 148 28 8 - 184
Anders Follerås Current SVP, Airthings
for Consumer
4
72 0 4 1 77
Torje Carlsson Former SVP, Airthings
for Consumer
5
69 8 4 1 82
Pål Berntsen SVP, Airthings for
Business
142 40 8 1 192
Anita Øverbekk HR Director
6
175 - - - 175
Total 1,265 210 60 196 1,659
1
Compensation is paid in NOK, with the USD equivalent determined based on the average exchange rate during the year.
2
Compensation is only reflected for the period that the executive was a part of management which was from 1 April, 2022.
3
Compensation is only reflected for the period that the executive was a part of management which was until 31 March, 2022.
4
Compensation is only reflected for the period that the executive was a part of management which was from 1 July, 2022.
5
Compensation is only reflected for the period that the executive was a part of management which was until 30 June, 2022.
6
Hired externally and invoiced monthly.
Remuneration to the management team for the year ended 31 December 2021 (USD 1,000
1
):
Name Title Salary Bonus Pension Other Total
Øyvind Birkenes CEO 228 49 8 1 285
Magnus Navdal Bekkelund Current CFO
2
63 - 2 0 65
Audhild Andersen Randa Current COO
2
63 - 2 0 66
Erlend Bolle CPO 137 8 7 1 153
Lauren Pedersen CMO 159 8 8 1 176
Torje Carlsson SVP, Airthings
for Consumer
152 39 8 1 200
Pål Berntsen SVP, Airthings
for Business
151 40 8 1 200
Erik Lundby Former CFO
3
80 8 6 0 95
Koki Yoshioka Former COO
3
82 8 7 1 98
Jonas Olsson Former VP R&D
Hardware Products
3
83 8 8 1 100
Alexander Sagen Former VP R&D
Software Solutions
3
65 8 6 3 82
Total 1,262 177 68 12 1,519
1
Compensation is paid in NOK, with the USD equivalent determined based on the average exchange rate during the year.
2
Compensation is only reflected for the period that the executive was a part of management which was from 1 August, 2021.
3
Compensation is only reflected for the period that the executive was a part of management which was until 31 July, 2021.
Airthings — Annual Report 2022
76
Remuneration to the Board of Directors for the year ended 31 December (USD 1,000
1
):
Name Title 2022 2021
Geir Førre Chairman
2
29 12
Aksel Lund Svindal Board member
3
21 12
Liv Dyrnes Board member 21 12
Lars Boilesen Board member 21 12
Emma Tryti Board member 23 -
Karin Berg Board member 23 -
Fredrik Thoresen Board member
4
10 -
Anlaug Underdal Board member – Employee representative
5
- -
Tore Rismyhr Board member – Employee representative - -
Audhild Andersen Randa Former Board member
6
- -
Total compensation to Board of Directors 151 48
1
Compensation is paid in NOK, with the USD equivalent determined based on the average exchange rate during the year.
2
Board member in 2021
3
Chairman of the board in 2021
4
New board member from the general meeting held on 25. May 2022.
5
Total remuneration relates to options exercised during the period (no exercises in 2021):
— 10 000 options (avg. strike price: NOK 0.70)
6
Board member until July 2021
Shares held by the management team:
Name Title 31.12.2022 31.12.2021
Øyvind Birkenes
1
CEO 3,124,114 2,824,114
Jeremy Gerst Current CFO - -
Magnus Navdal Bekkelund Former CFO - 7,500
Audhild Andersen Randa Current COO 32,500 25,000
Erlend Bolle CTO 4,819,722 4,819,722
Lauren Pedersen
2
CMO 435,621 315,621
Torje Carlsson
3
SVP Airthings for Consumer 610,000 360,000
Pål Berntsen
4
SVP Airthings for Business 530,200 518,200
Anders Follerås
5
SVP Airthings for Consumer 412,800 -
Total 9,964,957 8,870,157
1
Privately and through Longfellow Invest AS
2
Through Lato Invest AS
3
Privately and through Carlsson Invest AS
4
Privately and through Dube Invest AS
5
Privately and through Follerås Holding AS
Airthings — Annual Report 2022
77
Shares held by the Board of Directors:
Name Title 31.12.2022 31.12.2021
Geir Førre Chairman of the Board
1
34,780,120 25,826,543
Aksel Lund Svindal Board member
2
1,187,366 1,141,978
Liv Dyrnes Board member 35,000 17,500
Lars Boilesen Board member 100,000 100,000
Emma Tryti Board member - -
Karin Berg Board member - -
Fredrik Thoresen Board member
4
283,780 283,780
Anlaug Underdal Board member – Employee representative 56,000 46,000
Tore Rismyhr Board member – Employee representative 164,300 63,800
Audhild Andersen Randa Former Board member
3
- -
Total 36,606,566 27,479,601
1
Through Firda AS. Board member in 2021
2
Through A Management. Chairman of the Board in 2021
3
Board member until July 2021
4
Through RWS AS
Share options held by the management team as at 31.12.2022:
Name Title Outstanding
options
Strike price
(NOK)
Remaining
life (years)
Øyvind Birkenes CEO 2,086,600 0.51—8.56 2.66—6.01
Jeremy Gerst Current CFO 292,000 3.69—10.00 3.75—4.5
Audhild Andersen Randa COO 192,000 3.69—8.56 3.42—4.5
Erlend Bolle CTO 118,000 3.69—8.56 3.42—4.5
Lauren Pedersen CMO 345,000 3.36—8.56 3.42—7.1
Anders Follerås Current SVP, Airthings for Consumer 162,000 1.45—8.56 3.42—5.92
Pål Berntsen SVP, Airthings for Business 601,200 1.45—8.56 3.42—6
Anita Øverbekk HR Director 75,000 3.69—8.56 3.42—4.5
Total 3,871,800
Share options held by the management team as at 31.12.2021:
Name Title Outstanding
options
Strike price
(NOK)
Remaining
life (years)
Øyvind Birkenes CEO 1,936,600 0.51—8.56 3.66—7.01
Magnus Navdal Bekkelund CFO 46,584 8.56—13.35 4.42—9.13
Audhild Andersen Randa COO 120,000 8.56 4.42
Erlend Bolle CPO 70,000 8.56 4.42
Lauren Pedersen CMO 285,000 3.36—8.56 4.42—8.1
Torje Carlsson SVP Airthings for Consumer 761,200 1.45—8.56 4.42—7.0
Pål Berntsen SVP Airthings for Business 548,000 1.45—8.56 4.42—7.0
Total 3,767,384
Airthings — Annual Report 2022
78
Share options held by the Board of Directors as at 31.12.2022:
Name Title Outstanding
options
Strike price
(NOK)
Remaining
life (years)
Geir Førre Chairman - - -
Aksel Lund Svindal Board member 100,000 3.36 6.25
Liv Dyrnes Board member - - -
Lars Boilesen Board member - - -
Emma Tryti Board member - - -
Karin Berg Board member - - -
Anlaug Underdal Employee representative 75,800 0.70—8.56 4.31
Tore Rismyhr Employee representative 74,670 3.36—8.56 5.63
Total 250,470
Share options held by the Board of Directors as at 31.12.2021:
Name Title Outstanding
options
Strike price
(NOK)
Remaining
life (years)
Aksel Lund Svindal Chairman of the Board 100,000 3.36 7.25
Geir Førre Board member - - -
Liv Dyrnes Board member - - -
Lars Boilesen Board member - - -
Emma Tryti Board member - - -
Karin Berg Board member - - -
Anlaug Underdal Board member —
Employee representative
67,800 0.7—8.56 4.42—5.84
Tore Rismyhr Board member —
Employee representative
57,030 3.36—8.56 4.42—7.75
Total 224,830
7.2 Related party transactions
Related parties are major shareholders, members
of the Board and Management team in the
parent company and the group subsidiaries.
Note 4.1 and 6.6 provides information about
the Group structure, including details of the
subsidiaries and shareholders. Significant
agreements and remuneration paid to
management and the Board for the current and
prior period are presented in note 7.1. Shares
and share options held by the management team
and the Board are also summarized in note 7.1.
All transactions within the Group or with other
related parties are based on the principle of
arm’s length.
The following tables provide the total amount of
transactions and balances with related parties
(outside the Group) for the relevant financial
periods:
Airthings — Annual Report 2022
79
Related party transactions in 2021 and
balances at 31 December 2022 (USD 1,000)
Board
Member
Other
Shareholders
Total
Income from related parties - 3,918 3,918
Payments to related parties
139 1,302 3,277
Related party receivables - 1,503 1,504
Payments to related parties include remuneration paid to management and the Board (note 7.1),
commissions and accrued cost invoiced from Rn222 Inc., rent of premises from Energy
Control AS and consultant services from Firda AS. Income from related parties include
sale of goods to Rn222 Inc. and Energy Control AS. Related party receivables as
at 31 December 2021 are mainly related to prepaid salary to employees.
• RN222 Inc. is a distributor of the Group’s products in Canada, and a shareholder of the Group.
In addition, RN222 Inc. provides some consultancy services that are invoiced to the Group.
The beneficial owner of RN222 Inc. was the leader of the Professional segment until February 2022.
• Workspace Norge AS is owned by Energy Control Holding AS, which holds 100% of Energy
Control AS, a company holding shares in the Group.The beneficial owner of Energy Control AS
is employed in the Group.
• Firda AS is the largest shareholder of the Group, and is owned by Geir Førre
(Chair of the Board in Airthings ASA).
Related party transactions in 2021 and
balances at 31 December 2021 (USD 1,000)
Board
Member
Other
Shareholders
Total
Income from related parties - 6,088 6,088
Payments to related parties
47 1,015 2,583
Related party receivables - - 41
Payments to related parties include remuneration paid to management and the
Board (note 7.1), commissions and accrued cost invoiced from Rn222 Inc., rent of
premises from Workspace Norge AS and consultant services from Firda AS. Income
from related parties include sale of goods to Rn222 Inc. and Energy Control AS.
7.3 Commitments and contingencies
ACCOUNTING POLICIES
Other commitments and contingencies
Contingent liabilities are not recognized in the
annual accounts. Significant contingent liabilities
are disclosed, with the exception of contingent
liabilities where the possibility of an outflow of
economic resources is considered remote.
Contingent assets are not recognized in the
annual accounts but are disclosed when an inflow
of economic benefits is considered probable.
Other commitments
The Group does not have other significant
commitments to be disclosed.
Airthings — Annual Report 2022
80
7.4 Events after the reporting period
ACCOUNTING POLICIES
If the Group receives information after the
reporting period, but prior to the date of
authorization for issue, about conditions that
existed at the end of the reporting period,
the Group will assess if the information affects
the amounts that it recognizes in the Group’s
consolidated financial statements. The Group
will adjust the amounts recognized in its financial
statements to reflect any adjusting events after
the reporting period and update the disclosures
that relate to those conditions in the light of the
new information. For non-adjusting events after
the reporting period, the Group will not change
the amounts recognized in its consolidated
financial statements but will disclose the nature
of the non-adjusting event and an estimate
of its financial effect, or a statement that such
an estimate cannot be made, if applicable.
Adjusting events
There have been no significant adjusting
events subsequent to the reporting date.
Non-adjusting events
RCF
Airthings announced a USD 8 million revolving
credit facility (RCF) with Danske bank on 23
January 2023. The RCF will support Airthings’s
growth ambitions across both the Consumer
and Airthings for Business (AfB) segments. the
new financing agreement has been entered on
favorable commercial terms for a one-year period
with annual renewal.
Share capital increase
The board of directors of the Company has
resolved to propose a private placement
of new shares to raise NOK 75 million. The
offer is received from the company’s largest
shareholders Firda AS and A Management
AS. The private placement is planned to be
conducted after close of trading on the Oslo
Stock Exchange on 13 February 2023. Firda
AS, together with A Management AS, has
committed to subscribe for and be allocated
NOK 50 million in such private placement and
has agreed to guarantee full subscription of the
remaining NOK 25 million at the subscription
price of NOK 3.20. Completion of the private
placement will be subject to approval by an
extraordinary general meeting of the Company.
Following completion of the private placement,
the board will consider a subsequent offering
of new shares to shareholders who hold
shares below a certain threshold and were not
allocated shares in the private placement.
Change of strike price for employee share options
On the 20th of February 2023 Airthings
announced a change in strike price for
employee share options. The company has
agreed to adjust the strike-price for all Airthings’
employees’ option agreements with a strike
price above NOK 3.20. The total number of
options to be adjusted is 5 736 232. The new
strike price shall be NOK 3.2. The adjustment
shall be made as soon as practical after the
extraordinary general meeting that will be
held on March 9, 2023, and is contingent on
the extraordinary general meeting approving
the proposed share capital increase. There
have been no other significant non-adjusting
events subsequent to the reporting date.
Airthings — Annual Report 2022
81
This section includes information about alternative performance measures (APMs) applied by the Group.
These alternative performance measures are presented to improve the ability
of stakeholders to evaluate the Group’s operating performance.
The Group applies the following APMs:
Annual recurring revenue (ARR)
ARR is the value of annualized sales from all active subscriptions, licenses and service
contracts within the Airthings for Business and Professional segments. The calculation is
based on monthly subscription fees as at 31 December (MRR), multiplied by 12 in order to
represent an annualized figure. The numbers presented in the table below are translated
from NOK to USD applying the average NOK/USD exchange rate for 2022 and 2021
respectively. ARR is considered an important supplemental measure for stakeholders to get
an overall understanding of revenue generation within the Group’s operating activities.
EBITDA
The Group’s earnings before interest, tax, depreciation and amortization (EBITDA) is used
to provide consistent information on Airthings’ operating performance relative to other
companies, and is frequently used by analysts, investors and other stakeholders when
evaluating the financial performance of the Group. EBITDA, as defined by Airthings, includes
total operating revenue and excludes depreciation, amortization and impairment loss.
For a reconciliation of EBITDA, refer to the consolidated statement of profit or loss.
(USD 1,000) 2022 2021
MRR December 300 239
ARR 3,602 2,866
EBITDA (USD 1,000) 2022 2021
Revenue 35,424 33,671
EBITDA -11,785 -8,035
EBITDA margin -33% -24%
Alternative performance
measures
Airthings — Annual Report 2022
82
Gross profit margin
Gross profit margin is defined as revenue less cost of goods sold as a percentage of total
revenue. Management believes that this measure is important for the users of the financial
statements to determine the profitability and the financial performance of the Group.
Gross prot margin (USD 1,000) 2022 2021
Revenue 35,424 33,671
Cost of goods sold 14,465 13,041
Gross prot 20,959 20,630
Gross prot margin 59% 61%
Airthings — Annual Report 2022
83
Airthings ASA
Parent Company
Financials
Airthings — Annual Report 2022
84
Financial statements
Income statement
Statement of financial position
Statement of cash flows
Statement of changes in equity
Notes to the parent company
financial statements
Section 1 — General information and
accounting policies
Section 2 — Profit or loss items
2.1 Revenue
2.2 Other operating income
2.3 Employee benefit expenses
2.4 Other operating expenses
2.5 Finance income and costs
2.6 Income tax
Section 3 — Balance sheet items
3.1 Inventories
3.2 Trade receivables, receivables,
pledged assets and guarantees etc.
3.3 Provisions and other payables
Section 4 — Related parties
4.1 Subsidiaries
4.2 Related parties
Section 5 — Fixed assets
5.1 Intangible assets
5.2 Business combinations
5.3 Property, plant and equipment
Section 6 — Financial instruments and equity
6.1 Cash and cash equivalents
6.2 Financial risk management
6.3 Share capital and shareholders
information
Section 7 — Other disclosures
7.1 Events after the reporting period
Table of Contents
Airthings — Annual Report 2022
85
Income statement
For the years ended 31 December
Amounts in NOK 1,000 Notes 2022 2021
Revenues 2.1, 4.2 319,699 285,844
Other operating income 2.2 0 240
Total revenue and other operating income 319,699 286,084
Cost of sales 142,174 115,694
Employee benefit expenses 2.3 144,415 115,418
Other operating expenses 2.3, 2.4, 4.2 162,459 134,788
Operating prot or loss before
depreciation and amortisation (EBITDA)
-129,349 -79,816
Depreciation and amortization 5.1, 5.3 25,274 10,411
Operating prot (loss) / EBIT -154,623 -90,226
Finance income 2.5 12,890 4,161
Finance costs 2.5 69 436
Net nancial items 12,821 3,725
Prot (loss) before tax -141,802 -86,501
Tax expense 2.6 -30,277 -17,805
Prot (loss) for the year -111,525 -68,696
Prot (loss) for the year is proposed allocated as follows:
To (from) other equity -111,510 -68,696
Total allocated -111,510 -68,696
Airthings — Annual Report 2022
86
Statement of
financial position
Amounts in NOK 1,000 Notes 31.12.2022 31.12.2021
ASSETS
Non-current assets
Goodwill 5.1, 5.2 15,096 20,758
Intangible assets 5.1 23,989 21,547
Deferred tax asset 2.6 67,215 36,938
Property, plant and equipment 5.3 5,191 6,270
Investments in subsidiaries 4.1 1,367 1,150
Receivables group companies 4.2 67,215 46,635
Other non-current assets 3.2 1,232 9,484
Total non-current assets 181,305 142,782
Current assets
Inventories 3.1 174,124 94,670
Trade receivables 3.2 72,926 83,150
Other receivables 40,515 14,112
Bank deposits, cash and cash equivalents 6.1 116,528 359,968
Total current assets 404,093 551,901
TOTAL ASSETS 585,398 694,683
Airthings — Annual Report 2022
87
Amounts in NOK 1,000 Notes 31.12.2022 31.12.2021
EQUITY AND LIABILITIES
Equity
Share capital 6.3 1,740 1,718
Treasury shares 0 0
Share premium 716,129 713,145
Other capital reserves 18,636 15,137
Other equity -234,514 -122,989
Total equity 501,991 607,012
Non-current liabilites
Non-current provisions 3.2 1,232 9,609
Total non-current liabilites 1,232 9,609
Current liabilities
Interest-bearing liabilites 0 0
Trade payables 33,555 40,288
Income tax payable 0 0
Other payables 3.3 10,187 8,259
Provisions 3.3 38,434 29,516
Total current liabilities 82,176 78,062
Total liabilities 83,407 87,671
TOTAL EQUITY AND LIABILITIES 585,398 694,683
Øyvind Birkenes
CEO
Oslo, March 29, 2023
Liv Dyrnes
Board member
Lars Boilesen
Board member
Aksel Lund Svindal
Board member
Fredrik Thoresen
Board member
Niklas Copley Norin
Board member
Emma Tryti
Board member
Karin Berg
Board member
Geir Førre
Chairman of the Board
Chloe Emma Waller
Board Member
Airthings — Annual Report 2022
88
Statement of cash flows
For the years ended 31 December
Amounts in NOK 1,000 Notes 2022 2021
Cash ows from operating activities
Prot (loss) before tax -141,802 -86,501
Depreciation and amortization 5.1, 5.2, 5.3 25,274 10,411
Share-based payment expense 3,499 5,225
Working capital adjustments:
Changes in inventories 3.1 -79,454 -56,963
Changes in trade receivables 10,224 -27,000
Changes in trade payable -6,732 16,475
Changes in other liabilities and receivables -36,509 36,830
Other items
Tax paid 0
Net cash ows from operating activities -225,500 -101,522
Cash ows from investing activities
Purchase of intangible assets and development expenditures 5.1, 5.2 -19,952 -45,727
Purchase of property, plant and equipment 5.3 -995 -3,611
Purchase of shares in subsidiaries, net of cash acquired
0
Payments on long-term receivables
0
Net cash ow from investing activities -20,946 -49,339
Cash ow from nancing activities
Proceeds from issuance of equity 6.3 3,006 1,693
Proceeds from sales of own shares 0
Repayment of borrowings -16,222
Net cash ows from nancing activities 3,006 -14,529
Net increase/(decrease) in cash and cash equivalents -243,440 -165,390
Cash and cash equivalents at 1 January 359,968 525,358
Cash and cash equivalents at 31 December 116,528 359,968
Airthings — Annual Report 2022
89
Statement of changes
in equity
Amounts in NOK 1,000 Share
capital
Treasury
shares
Share
premium
Other
capital
reserves
Other
Equity
Total
Equity 1 January 2021 1,706 0 711,464 9,912 -51,817 671,265
Capital increase February 5 513
Capital increase May 1 143 145
Capital increase August 3 283 286
Capital increase November 3 742 745
Merger Airtight AS* -2,475 -2,475
Share based payment 5,225 5,225
Result for the year -68,696 -68,696
Equity 31 December 2021 1,718 0 713,145 15,137 -122,989 607,012
Equity 1 January 2022 1,718 0 713,145 15,137 -122,989 607,012
Capital increase February 6 1,013 1,018
Capital increase May 5 511 515
Capital increase July 2 188 190
Capital increase October 10 1,273 1,282
Share based payment 3,499 3,499
Result for the year -111,525 -111,525
Equity 31 December 2022 1,740 0 716,129 18,636 -234,514 501,991
* Parent-/subsidiary merger with Airtight AS according to the simplified rules for intra-group mergers as set out in Section 13–24 of the
Norwegian Public Limited Companies Act.
Airthings — Annual Report 2022
90
1.1 Corporate information
Airthings ASA (‘the Company’) is a publicly
listed company on Oslo Stock Exchange,
with the ticker symbol AIRX. Airthings ASA is
incorporated and domiciled in Norway.
The Company’s principal offices are located at
Wergelandsveien 7, 0167 Oslo, Norway. The
Company´s financial statements for the year
ended 31 December 2022 were authorized
for issue in accordance with a resolution of
the Board of Directors on 29 March 2023.
Airthings has been granted exemption from
the Norwegian Tax Authority to publish
its Annual Report in English only.
The Company, as used in these financial
statements, is the Parent Company under
the Consolidated Financial Statements
also included in this Annual Report.
1.2 Basis of preparation
Airthings financial statements have been
prepared in accordance with Norwegian
Accounting Act and generally accepted
accounting principles (NGAAP). The functional
and presentation currency of the parent
company is Norwegian krone (“NOK”).
Going Concern
The annual accounts have been prepared based
on the going concern assumption in accordance
with section 3-3a of the Norwegian Accounting
Act. This is based on the Group’s plans,
budgets and level of activity going forward.
1.3 General accounting principles
Airthings has selected a presentation in which
the description of accounting policies as well
as estimates, assumptions and judgmental
considerations are disclosed in the notes to which
the policies relate. A summary of the Company’s
general accounting are presented below:
Current versus non-current classification
The Group presents assets and liabilities in
the statement of financial position based
on current/ non-current classification.
An asset is current when it is:
• Expected to be realized or intended to be sold
or consumed in the normal operating cycle,
• Held primarily for the purpose of trading,
• Expected to be realised within twelve
months after the reporting period, or
• Cash or cash equivalent unless restricted
from being exchanged or used to settle
a liability for at least twelve months
after the reporting period. All other
assets are classified as non-current.
A liability is current when:
• It is expected to be settled in the
normal operating cycle,
• It is held primarily for the purpose of trading,
• It is due to be settled within twelve
months after the reporting period, or
• There is no unconditional right to defer
the settlement of the liability for at
Section 1 — General information
and accounting policies
to the parent company
financial statement
Airthings — Annual Report 2022
91
least twelve months after the reporting
period. The Company classifies all other
liabilities as non-current. Deferred tax
assets and liabilities are classified as
non-current assets and liabilities.
Statement of cash flows
The consolidated statement of cash flows
is prepared using the indirect method.
1.4 Significant accounting judgements,
estimates and assumptions
The preparation of accounts in accordance
with the Accounting Act requires the use of
estimates. It also requires Group management
to exercise judgment in applying the Group’s
accounting policies. The areas where significant
judgments and estimates have been made
in preparing the financial statements and
their effect are disclosed in the notes.
1.5 Revenue
Income from sale of goods and services are
recognized at fair value, net after deduction
of VAT, returns, discounts and reductions.
Revenue from sale of goods
Revenue from sale of goods are recognized
in the income statement when both risk and
control have passed on to the buyer. The risk
being the asset’s profit and loss potential, whilst
control is defined as having both the decision-
making rights as well as the jurisdiction. Normally
this will be when the goods are delivered to
the customer. Historical data is applied to
estimate and make provisions for quantity
discount and returns at the date of sales.
Revenue from sale of software
as a service (SaaS)
The Company also has revenue from license
fees, which are SaaS contracts consisting of
a software licensing model where software is
licensed on a subscription basis and centralized
on Airthings platform. Revenue from SaaS
arrangements, where the customer cannot take
possession of the software license and where the
software license cannot be separated from its
related hosting services are considered as “right
to access” licenses and revenue is recognized
over time (i.e. the subscription period).
1.6 Share-based payments
Airthings has a share-based payment program
where all employees are granted share options
when they commence in their position.
Equity-settled transactions
The cost of equity-settled transactions is
determined by the fair value at the date when
the grant is made using an appropriate valuation
model (the Black-Scholes-Merton Model).
That cost is recognized in employee benefits
expense, together with a corresponding increase
in equity (other capital reserves), over the period
in which the service and, where applicable, the
performance conditions are fulfilled (the vesting
period). The cumulative expense recognized for
equity-settled transactions at each reporting date
until the vesting date reflects the extent to which
the vesting period has expired and the Company’s
best estimate of the number of equity instruments
that will ultimately vest. The expense or credit in the
statement of profit or loss for a period represents
the movement in cumulative expense recognized
as at the beginning and end of that period.
Service and non-market performance conditions
are not taken into account when determining
the grant date fair value of awards, but the
likelihood of the conditions being met is
assessed as part of the Company’s best estimate
of the number of equity instruments that will
ultimately vest. Market performance conditions
are reflected within the grant date fair value.
Any other conditions attached to an award,
but without an associated service requirement,
are considered to be non-vesting conditions.
Non-vesting conditions are reflected in the fair
value of an award and lead to an immediate
expensing of an award unless there are also
service and/or performance conditions.
Airthings — Annual Report 2022
92
No expense is recognized for awards that
do not ultimately vest because non-market
performance and/or service conditions have
not been met. Where awards include a market
or non-vesting condition, the transactions are
treated as vested irrespective of whether the
market or non-vesting condition is satisfied,
provided that all other performance and/
or service conditions are satisfied.
1.7 Pensions
The Company has a defined contribution
pension plan for its employees which satisfies
the statutory requirements in the Norwegian
law on required occupational pension
(“lov om obligatorisk tjenestepensjon”).
The scheme is a defined contribution plan.
Contributions are paid to pension insurance
plans and charged to the income statement in
the period to which the contributions relate.
Once the contributions have been paid,
there are no further payment obligations.
1.8 Goodwill
Recognized goodwill in the Company us derived
from the merger with Airtight in 2021. Goodwill is
depreciated over five years. In addition, goodwill
is reviewed for impairment, annually or more
frequently if events or changes in circumstances
indicate that the carrying value may be impaired.
1.9 Intangible assets
Expenditure on own Research and Development
are expensed as and when they incur. Expenses
for other intangible assets are reflected
in the balance sheet providing a future
financial benefit relating to the development
of an identifiable intangible asset can be
identified and the cost can be measured
reliably. Otherwise, such expenditure is
expensed as and when incurred. Capitalised
development costs are amortized linearly
over the asset’s expected useful life.
1.10 Fixed assets
Property, plant and equipment (“PP&E”) are
capitalised and depreciated linearly down to the
residual value over the expected useful economic
life of the assets. When the depreciation plan
is changed, the effect is distributed over the
remaining depreciation period. Maintenance of
operating equipment is expensed on an ongoing
basis. Upgrades or improvements are added to
the acquisition cost of the asset and depreciated
in line with the asset. The difference between
maintenance and upgrade / improvement is
assessed based on the condition of the asset when
purchased. Plots and land are not depreciated.
Costs related to leases of fixed assets
are expensed over the lease period.
Prepayments are reflected in the
balance sheet as a prepaid expense, and
aredistributed over the rental period.
1.11 Impairment of intangible
and fixed assets
Impairment tests are carried out if there is
indication that the carrying amount of an
asset exceeds the estimated recoverable
amount. The test is performed on the lowest
level of fixed assets at which independent
ingoing cashflows can be identified. If the
carrying amount is higher than both the fair
value less cost to sell and the value in use
(net present value of future use/ ownership),
the asset is written down to the highest of fair
value less cost to sell and the value in use.
Previous impairment charges, except
write-down of goodwill, are reversed in
later periods if the conditions causing the
write-down are no longer present.
1.12 Inventories
Inventories are valued at the lower of cost
and net realizable value. Costs incurred in
bringing each product to its present location
and condition are accounted for, as follows:
Airthings — Annual Report 2022
93
• Components: purchase cost on
a first-in/ first-out basis (FIFO)
• Finished goods: cost of direct materials,
direct wages, packaging and a proportion
of manufacturing overheads based
on the normal operating capacity
Net realizable value is the estimated selling
price in the ordinary course of business,
less estimated costs of completion and the
estimated costs necessary to make the sale.
1.13 Investments in Subsidiaries
Investments in subsidiaries are valued at cost
in the Company’s financial statements. The
investment is valued as cost of the shares in
the subsidiary, less any impairment losses. An
impairment loss is recognized if the impairment
is not considered temporary, in accordance with
the generally accepted accounting principles.
Impairment losses are reversed if the reason for
the impairment loss disappears in a later period.
1.14 Receivables
Trade receivables and other receivables
are recorded in the balance sheet at face
value after deduction of provisions for
expected loss. Provisions for losses are
made on the basis of individual assessments
of the individual receivables. Additionally,
for accounts receivables, an unspecified
provision is made to cover expected losses.
1.15 Income taxes
Current income tax
Current income tax assets and liabilities for
the current and prior periods are measured
at the amount expected to be recovered
from or paid to the taxation authorities.
The tax rates and tax laws used to compute
the amount are those that are enacted or
substantively enacted at the reporting date.
Deferred Tax
Deferred tax is provided using the liability
method on temporary differences at the
balance sheet date between the tax bases
of assets and liabilities and their carrying
amounts for financial reporting purposes.
Deferred tax liabilities have been recognized
for all taxable temporary differences.
Deferred tax assets are recognized for all
deductible temporary differences, the carry-
forward of unused tax losses, to the extent
that it is probable that taxable profit will
be available against which the deductible
temporary differences, and the carry-forward
of unused tax losses can be utilized.
Deferred tax assets and deferred tax liabilities
are offset, if a legally enforceable right exists
to set off current tax assets against current
income tax liabilities and the deferred taxes
relate to the same taxable company and the
same taxation authority. Deferred tax assets and
liabilities are measured at the tax rates that are
expected to apply to the year when the asset is
realized, or the liability is settled, based on tax
rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date.
1.16 Provisions
Provision for warranties and service work for
completed projects /sales is recorded at the
expected cost of such work. The estimate is
based on historical figures for service and
warranty repairs. The amount is recorded
under other current liabilities and is recognized
in the income statement on a straight-line
basis over the warranty and service period.
1.17 Foreign currencies
Transactions in foreign currency are translated
at the rate applicable on the transaction date.
Monetary assets, receivables and liabilities
are translated at the exchange rate on the
balance sheet date. Changes to exchange
rates are recognized in the income statement
as they occur during the accounting period.
Foreign currency gains or losses are reported
as foreign exchange gain or foreign exchange
loss in finance income or finance costs.
Airthings — Annual Report 2022
94
Section 2 — Profit or loss items
Revenue (NOK 1,000) 2022 2021
Revenues from sale of goods (hardware) 302,537 277,458
Revenues from services performed (software) 17,162 8,385
Total 319,699 285,844
Geographical distribution (NOK 1,000) 2022 2021
EMEA 99,107 78,738
North America (USA and Canada) 220,593 207,105
Total 319,699 285,844
2.2 Other operating income
Grants
Airthings ASA received tax refunds (Skattefunn) of NOK 4.75 million in 2022 (2021: 4.75million.)
In addition, the Company received funding from Innovation Norway in 2021. Operating
grants are accounted for at the same time as the costs they are intended to cover.
Tax refunds are accounted for as a cost reduction. The grant from Innovation
Norway is presented as other revenue .
The Skattefunn grant is presented as a short term receivable of NOK 4.75 million in the balance sheet
and as a reduction of R&D cost, respectively as reduced employee cost and other operating cost.
Grants reported as other revenue (NOK 1,000) 2022 2021
Innovation Norway 0 240
Total 0 240
Airthings, through the merger with Airtight, was in 2018 granted EUR 1.72 million through
EU’sHorizon 2020 program. The grant was 70% investment funding of a total project cost
of EUR2.45 million for the period 1 August 2018 to 31 July 2020.
The grant was later extended with 1 year to 31 July 2021. The grant is
reported as a reduction in intangible assets.
Airthings — Annual Report 2022
95
2.3 Employee benefit expenses, remuneration to Coroporate Management,
Board of Directors and Auditors
Salaries and personnel expenses (NOK 1,000) 2022 2021
Salaries/wages 127,727 93,845
Non-cash share based payment 3,280 4,757
Social security fees 16,967 13,562
Pension expenses 5,665 3,725
Other benets 2,840 3,235
Skattefunn -2,375 -2,375
Capitilized personell cost -9,687 -1,332
Total 144,415 115,418
Average numbers of full-time equivalents 107 96
Pension obligations
Airthings ASA has a pension scheme that meets
the requirements set out in the Obligatory
occupational pension Act.
At 31 December 2022, Airthings ASA’s pension
scheme had 117 members. The cost of pension
is specified in the above table.
Share-based payment
For information about share-based
payment plans, see note 6.8 to the
consolidation financial statments.
Remuneration of Corporate Management
and Board of Directors
Information about remuneration of the Board
of Directors and the executive management
is included in Note 7.1 to the consolidation
financial statements. For information about
share-based payment plans, see Note 6.8
to the consolidation financial statements.
Remuneration of auditors (NOK 1,000) 202 2022 2021
Statutory audit 1,127 888
Tax advisory and other services 580 386
Total remuneration to auditors 1,707 1,274
Airthings — Annual Report 2022
96
2.4 Other operating expenses
Lease
Lease object (NOK 1,000) Expiration of agreement Annual lease
Ofce space in Oslo 31.05.2027 7,649
Ofce space in Bergen 30.06.2026 216
Lease of ofce equipment 31.11.2022 8
Total 7,873
2.5 Finance income and cost
Finance income (NOK 1,000) Notes 2022 2021
Interest income from group entities 4.2 1,978 1,171
Other interest income 2,513 875
Prot on foreign exchange 8,399 2,114
Total nance income 12,890 4,161
Finance costs (NOK 1,000) 2022 2021
Other interest expenses 69 120
Other nancial expenses 1 316
Loss on foreign exchange 0 0
Total nance costs 69 436
Foreign exchange (NOK 1,000) 2022 2021
Foreign exchange gain 35,616 17,239
Foreign exchange loss 27,216 15,125
Net foreign exchange gain (loss) 8,399 2,114
Airthings — Annual Report 2022
97
2.6 Income tax
This year’s tax expense (NOK 1,000) 2022 2021
Entered tax on ordinary prot/loss:
Payable tax 0 0
Prior period adjustment 0 -22
Change in deferred tax asssets -30,277 -17,783
Tax expense on ordinary prot/loss -30,277 -17,805
Taxable income (NOK 1,000) 2022 2021
Ordinary result before tax -141,802 -86,501
Permanent differences -1,480 9
Change in temporary differences 19,618 7,964
Taxable income -123,664 -78,529
Payable tax in the balance (NOK 1,000) 2022 2021
Payable tax on this years's result 0 0
Tax on reversed losses 0 0
Total payable tax in the balance 0 0
The tax effect of temporary differences and loss carried forward that has formed the basis
for deferred tax and deferred tax assets, specified on types of temporary differences
Temporary differences (NOK 1,000) 2022 2021 Difference
Tangible assets 14,631 32,474 17,842
Inventory 0 0 0
Receivables -2,658 -882 1,776
Total 11,974 31,592 19,618
Accumulated loss to be carried forward -302,399 -178,735 123,664
Tax effects as part of merger 15,096 20,758 5,661
Basis for deferred tax assets -305,522 -167,900 137,621
Deferred tax assets (22%) -67,215 -36,938 30,277
Airthings — Annual Report 2022
98
Section 3 — Balance sheet items
3.1 Inventories
Inventory (NOK 1,000) 2022 2021
Finished goods 119,057 64,635
Components 55,067 30,035
Acquisition cost 31 December 174,124 94,670
Inventories valued at purchase cost 119,057 94,670
Inventories valued at net realisable value 119,057 94,670
Write-down for obsolescence 0 0
3.2 Trade receivables, receivables, pledged assets guarantees etc.
Debtors which fall due later than one year
after the expiry of the nancial year (NOK 1,000)
2022 2021
Inter company loans 67,215 46,635
Employers provisions related to share based compensation 1,232 9,484
Other receivables to employees 13
Total 68,460 56,119
Long-term debt and debt secured by collateral (NOK 1,000) 2022 2021
Long-term debt with more than ve year maturity
Long-term debt secured by collateral
Short-term debt secured by collateral
Total 0 0
The increase in inventories in 2022 is
a result of increased components prices
coupled with a strategy of securing supply
in a pressed semiconductor market.
In 2022, there was a write down of finished goods of
NOK 2144 thousands related to the derecognition
of the Airtight technology. There were no write-
downs of finished goods or components in 2021.
Airthings — Annual Report 2022
99
3.3 Provisions and other payables
Other payables (NOK 1,000) 2022 2021
Public duty payable 10,187 8,259
Total 10,187 8,259
Provisions (NOK 1,000) 2022 2021
Wages and holiday pay (included tax) 17,425 13,239
Other provisions 11,804 8,389
Accrued revenue 9,204 7,888
Total 38,434 29,516
Total other payables and provisions 48,620 37,774
Book value of pledged assets (NOK 1,000) 2022 2021
Equipment, xtures and ttings and other movables 6,270
Inventories 174,124 94,670
Trade receivables 72,926 83,150
Total 247,050 184,090
Pledged amount (NOK 1,000) 2022 2021
Pledge on inventories 10,000 10,000
Pledge on operating assets 10,000 10,000
Pledge on accounts receivables 10,000 10,000
Total 30,000 30,000
Airthings — Annual Report 2022
100
Section 4 — Related parties
4.1 Subsidiaries
Investments in subsidiaries are booked according to the cost method.
Company Location Ownership/
voting rights
Currency Equity
per 1.1.
Annual net
prot/loss
Equity
per 31.12.
Airthings America INC USA 100% USD -488,063 150,517 -337,546
Airthings AB Sweden 100% SEK 292,942 1,214,074 1,507,016
Book value of investment in
balance sheet of Airthings ASA
Amount (NOK 1,000)
Airthings America INC 1,131
Airthings AB 236
Total 1,367
4.2 Related parties
Receivables on subsidiary Airthings America INC (NOK 1,000) 2022 2021
Long term loan to Airthings America INC 61,060 44,937
Long term loan to Arthings AB 6,155 1,698
Transactions with subsidiary Airthings America INC (NOK 1,000) 2022 2021
Sale of goods to Airthings America INC 77,464 53,750
Sale of goods to Airthings AB 8,661 3,984
Purchase of services and cost allocation from Arthings America INC
13,021 4,344
Purchase of services and cost allocation from Arthings AB 5,831 3,796
Loan interest Arthings America INC 1,900 1,125
Loan interest Arthings AB 77 47
Transactions with shareholders (NOK 1,000) 2022 2021
Commissions and accrued cost invoiced from Rn222 INC 21,725 8,038
Sale of goods to Rn222 Inc
38,656 51,387
Rent of premises from Energy Control AS 216 192
Other fees invoiced from Energy Control AS 22
Sale of goods to Energy Control AS 2,516 966
Fees invoiced from Firda AS 208 502
Airthings — Annual Report 2022
101
Section 5 — Fixed assets
5.1 Intangible assets
Amounts in NOK 1,000 Goodwill Internally
generated
intagible
assets
Software
and
systems
Technology Total
Acquisition cost 1 January 26,419 - 9,544 16,036 51,998
Additions
- 11,316 1,569 7,065 19,951
Disposals - - - - -
Acquisition cost 31 December 26,419 11,316 11,113 23,101 71,949
Accumulated depreciations
31 December
11,322 5,272 16,269 32,864
Balance 31 December 15,096 11,316 5,841 6,832 39,086
Depreciation in the year 5,661 2,868 775 9,304
Write-down in the year - - - 13,896 13,896
Depreciation rate (%) 20% 20% 20%
Depreciation plan Linear Linear Linear
Economic useful life 5 Years 5 Years 5 Years
5.2 Business combinations
2022
No business combinations or significant
transactions took place in 2022.
2021
Merger with Airtight AS
On 7 July 2021 Airthings ASA merged with
its subsidiary Airtight AS, a software company
that has developed patented technology
to reduce energy waste from commercial
buildings. The merger between the wholly-
owned subsidiary and the parent company
was contemplated to simplify the corporate
structure of the Group. For accounting and tax
purposes, the effective date of the merger was
1 January 2021. Airthings AS originally became
a subsidiary of Airthings ASA in August 2020.
As Airtight AS was 100% owned by Airthings
ASA, the vertical merger was carried out
without payment of any consideration,
according to the Public Limited Liability
Companies Act. The merger was accounted
for according to the guidance in section
6 of the Norwegian Accounting Standard
9 (NRS 9) concerning mergers, which
implies use of the group continuity
Airthings — Annual Report 2022
102
method. As such, on the effective date of the merger, all assets and liabilities in Airtight AS was
continued into Airthings ASA’s separate financial statements at the book values used in the
consolidated financial statements of Airthings ASA. Airtight AS was simultaneously dissolved.
For tax purposes, the merger was implemented with full tax continuity,
in accordance with Chapter 11 of the Taxation Act.
The table below illustrates the balance sheet of Airtight AS as at the effective date of the merger
(1 January 2021) and represents the book values that were merged into Airthings ASA:
Amounts in NOK 1,000 1.1.2021
ASSETS
Non-current assets
Intangible assets 1,469
Property, plant and equipment 139
Other non-current assets 265
Total non-current assets 1,873
Current assets
Other receivables 2,997
Cash and cash equivalents 2,341
Total current assets 5,338
TOTAL ASSETS 7,211
EQUITY AND LIABILITIES
Equity
Other equity 5,788
Total equity 5,788
Current liabilities
Trade and other payables 1,423
Total current liabilities 1,423
Total liabilities 1,423
TOTAL EQUITY AND LIABILITIES 7,211
As the merger was accounted for according to the method of group continuity, in addition to
Airthings — Annual Report 2022
103
the assets and liabilities presented above,
NOK 13.2million of excess values related
to technology and NOK 26.4 million related
to Goodwill were transferred from the
consolidated financial statements to the separate
financial statements of Airthings ASA as at
the effective date of the merger. The effect on
equity on the separate financial statements
of Airthings ASA was NOK – 2.5 million,
which represents the difference between the
book value of shares in Airthings previously
recognized and net book value of Airtight’s
assets and liabilities in the consolidated
financial statements of Airthings ASA.
5.3 Property plant and equipment
Amounts in NOK 1,000 Property, plant
and equipment
Total
Acquisition cost 1 January 10,372 10,372
Additions 995 995
Disposals
Acquisition cost 31.12 11,367 11,367
Accumulated depreciations 31 December 6,176 6,176
Book value 31.12 5,191 5,191
Depreciation in the year 2,074 2,074
Depreciation rate (%) 20%
Depreciation plan Linear
Economic useful life 5 years
Airthings — Annual Report 2022
104
Section 6 — Financial
instruments and equity
6.1 Restricted cash
Restricted funds deposited in the tax deduction account (NOK
1,000
)
2022 2021
Restricted tax deductions 5,670 4,579
Restricted cash 5,667 5,667
Other restricted funds 1,400 1,400
Other restricted funds is a guarantee related to a credit agreement with DNB Mastercard.
6.2 Financial risk management
The parent company is exposed to a range of
risks affecting its financial performance, including
market risk, credit risk and liquidity risk. The
Company seeks to minimize potential adverse
effects of such risks through sound business
practice, risk management and hedging.
Risk management is a continuous process and
an integrated part of the Company’s business.
When operating across multiple markets,
Airthings is exposed to a range of risks
that may affect its business. The key
risk areas are discussed below.
Liquidity
Liquidity represents the risk where the Company
may potentially encounter difficulty in meeting
obligations associated with financial liabilities
that are settled by provision of cash or another
financial assets. The Company supervises its
risk by monitoring its working capital, and
overdue trade receivables. The Company has
a strong cash position of NOK 360 million,
which the Board of Directors consider sufficient
to fund the company’s growth strategy
towards in long-term revenue targets. The
liquidity risk is hence considered to be low.
Credit
Credit risk represents the possibility of
a counterparty not meeting its obligations
under a financial instrument or customer
contract, leading to a financial loss. The
Company is mainly exposed to credit
risk from its operating activities.
The credit risk is low in the Consumer
segment, where most sales are based on
upfront or simultaneous payment, and the
Comapny may also seek advance payments
to offset risk on trade receivables in the
other segments. Additionally, the Company
manages its credit risks by trading with
creditworthy third parties. The Company
has close connection with its customers and
receivable balances are monitored on an
ongoing basis. It is the Company’s policy that
all customers wishing to trade on credit terms
are subject to credit verification procedures,
which include an assessment of credit rating,
short-term liquidity, and financial position.
The Company’s exposure to losses have
historically been low. However, the increased
operations of the Company outside the US
and home markets exposes Airthings to
different credit risk environments. The Board
Airthings — Annual Report 2022
105
of Directors deems credit risk to be at an
acceptable level given the current operational
circumstances and outlook of the company.
Foreign Currency
Foreign currency risk is the risk that the fair value
or future cash flows of an exposure will fluctuate
because of changes in foreign exchange
rates. The Company is exposed to currency
fluctuations due to the international nature of
its operations. The Company’s exposure to the
risk of fluctuations in foreign exchange rates
relates primarily to the Company’s operating
activities (revenue and expenses denominated
in a foreign currency) and the Company’s net
investments in foreign subsidiaries. A significant
part of revenues is denominated in USD,
with a small portion incurred in NOK, EUR
and CAD. Most of its operating expenses are
incurred in NOK. Further, the Company could
also potentially be negatively affected by
fluctuations in other currencies in the future. The
Company does not currently hedge currency
exposure with the use of financial instruments
but monitors the net exposure over time.
Interest rate
Interest rate risk is the risk that the fair value
of future cash flows of a financial instrument
will fluctuate because of changes in market
interest rates. The Company’s borrowings
have historically been exposed to interest
rate fluctuations. As all borrowings were
repaid in January 2021, the Group does
no longer have any significant interest rate
risk related to interest-bearing liabilities.
6.3 Share capital and shareholders
information
The share capital of Airthings ASA as of
31December 2022 was NOK 1,739,923.46
consisting of 173,992,346 ordinary shares
at NOK 0.1 per share. The Company’s
shares have equal voting rights. For
information of shareholder see Note 6.7
the consolidated financial statements.
Airthings — Annual Report 2022
106
Section 7 — Other disclosures
7.1 Events after the reporting period
ACCOUNTING POLICIES
If the Group receives information after the
reporting period, but prior to the date of
authorization for issue, about conditions that
existed at the end of the reporting period,
the Group will assess if the information affects
the amounts that it recognizes in the Group’s
consolidated financial statements. The Group
will adjust the amounts recognized in its financial
statements to reflect any adjusting events after
the reporting period and update the disclosures
that relate to those conditions in the light of the
new information. For non-adjusting events after
the reporting period, the Group will not change
the amounts recognized in its consolidated
financial statements but will disclose the nature
of the non-adjusting event and an estimate
of its financial effect, or a statement that such
an estimate cannot be made, if applicable.
Adjusting events
There have been no significant adjusting
events subsequent to the reporting date.
Non-adjusting events
RCF
Airthings announced a USD 8 million revolving
credit facility (RCF) with Danske bank on 23
January 2023. The RCF will support Airthings’s
growth ambitions across both the Consumer
and Airthings for Business (AfB) segments. the
new financing agreement has been entered on
favorable commercial terms for a one-year period
with annual renewal.
Share capital increase
The board of directors of the Company has
resolved to propose a private placement
of new shares to raise NOK 75 million. The
offer is received from the company’s largest
shareholders Firda AS and A Management
AS. The private placement is planned to be
conducted after close of trading on the Oslo
Stock Exchange on 13 February 2023. Firda
AS, together with A Management AS, has
committed to subscribe for and be allocated
NOK 50 million in such private placement and
has agreed to guarantee full subscription of the
remaining NOK 25 million at the subscription
price of NOK 3.20. Completion of the private
placement will be subject to approval by an
extraordinary general meeting of the Company.
Following completion of the private placement,
the board will consider a subsequent offering
of new shares to shareholders who hold
shares below a certain threshold and were not
allocated shares in the private placement.
Change of strike price for employee share options
On the 20th of February 2023 Airthings
announced a change in strike price for
employee share options. The company has
agreed to adjust the strike-price for all Airthings’
employees’ option agreements with a strike
price above NOK 3.20. The total number of
options to be adjusted is 5 736 232. The new
strike price shall be NOK 3.2. The adjustment
shall be made as soon as practical after the
extraordinary general meeting that will be
held on March 9, 2023, and is contingent on
the extraordinary general meeting approving
the proposed share capital increase. There
have been no other significant non-adjusting
events subsequent to the reporting date.
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Børre Skisland
State Authorised Public Accountant
On behalf of: BDO AS
Serial number: 9578-5998-4-872903
IP: 188.95.xxx.xxx
2023-03-29 17:23:15 UTC
Penneo document key: 03DZY-6K55V-L71QG-YPLST-J2KMB-0ADBS
Airthings — Annual Report 2022
109
Breathe better. Live better.
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