YEAR-END REPORT Q4 2019 - SaltX Technology › media › SaltX_The_Year_end... · 2020-02-21 ·...

SaltX Technology Holding AB (publ)

YEAR-END REPORTQ4 2019This information is information which SaltX Technology is required to disclose under the EU market abuse regulation. The information has been made public on February 21, 2020 at 08.00.

THE TRANSITION TO GREEN ENERGY

INCREASING IN PACE

CONTENTS

2 SaltX Technology Holding AB (publ) Year-End Report Q4 2019

Year-end Report 2019 3The CEO’s Address 4Operations 6Business model 8Significantevents 9Financialoverview 10Consolidatedfinancialstatements 14Notes 18Note1Significantestimatesandassessmentsforaccountingpurposes 18Note 2 Income 18Note 3 Financial instruments 19Note4Transactionswithaffiliates 19Note 5 Leases 19

Parentcompanyfinancialstatements 20AffirmationbytheBoardofDirectorsandtheCEO 22OtherInformation 23

SaltX Technology Holding AB (publ) Year-End Report Q4 2019 3

YEAR-END REPORTQ4 2019

FINANCIAL EVENTS

KEY FIGURES 1

Group, TSEK Q 4 2019 Q 4 2018 FY 2019 FY 2018Netsales 867 1,671 193 6,464Operatingprofit/loss(EBIT) -10,941 -79,792 -83,830 -121,062Earningspersharebeforeandafterdilution -0.16 -1.38 -1.22 -2.14Equity 131,748 143,598 131,748 143,598Cashflowfromoperatingactivities -10,169 -15,001 -58,833 -50,556Equityratio(equity/balancesheettotal) 73% 70% 73% 70%

Q4 1

NetsalesincreasedtoMSEK0.9(1.7)

Operatingprofit/loss(EBIT)totaledMSEK-10.9(-79.8)

CashflowfromoperatingactivitiesamountedtoMSEK-10.2(-15.0)

EarningspersharebeforeandafterdilutionamountedtoSEK-0.16(-1.38)

FullyearJanuary—December1

NetsalestotaledtoMSEK0.2(6.5)

Operatingprofit/loss(EBIT)totaledMSEK-83.8(-121.1)

CashflowfromoperatingactivitiesamountedtoMSEK-58.8(-50.6)

EarningspersharebeforeandafterdilutionamountedtoSEK-1.22(-2.14)

1TheGroupappliesIFRS16LeasesfromJanuary1andallfiguresfor2019inthisinterimreportincludethischange.Comparativefiguresarenotrecalculated.

Q4

SaltXcarriedoutanewcapitalissueforapprox.MSEK80.6andistakingthenextsteptowardscommercialization

AnewstrategicpartnerinChinaisfinancingapilotproject–ShuangliangisconstructinganddevelopinganenergystoragepilotprojectinChina

Aftertheendoftheyear

TheBoardproposesnodividend

SIGNIFICANT EVENTS

OUR FOCUS NOW IS, WITH OUR PARTNERS, TO BUILD ON THE PILOT PLANT IN BERLIN AND TO OPTIMIZE THE PRO-CESS FOR DIFFERENT END-USERS. READ MORE ON PAGE 4


THE CEO’S ADDRESS2019 – A YEAR OF TRANSITIONAND FOCUS ON ENERGY STORAGE

SaltX has an important role to play in the tran-sitiontoafossil-freesociety.Manycompa-nieshavetheambitiontobecomefossil-freewithinageneration;webelieveitispossibletoachievethisearlier.Thisisadevelopmentinwhichweareinspiredtopartic-ipate.However,thereareobstaclesalongtheway,bothintermsofestab-lished business structures andtime-consumingpoliticaldiscussions.

FULLY-SUBSCRIBED CAPITAL ISSUEIn order to implement the necessary changes and havesufficientresourcesforourfocus,thecom-pany decided in autumn 2019tocarryoutanewcapitalissue.Thecompa-ny’sraisingofcapitalwaswell-received—acon-fidenceweappreciate.Being able to carry out acapitalissuethatwasoversubscribedisasign

ofstrengthandshowstheattractivenessofSaltX'sbusiness.Withthiscapitalavail-

able,SaltXwillbeabletomakesignificantprogressincommercializingourofferingwithinlarge-scaleenergystorage.Duringthepastyear,

the company has made sure to build the required competence in order to beabletodevelopinthewaythemanagementandboardhavesetout.SaltX possesses leading knowledgeofenergystorage,which,togetherwithastrongnetworkofpartnersanduniversi-ties,amongotherthings,createsgoodconditionsforcommercializingourenergystorage.

OUR PARTNERSThecooperationwiththethreepartnerswithwhomwehavesignedagreementshasdevel-opedatdifferentrates.Itisinstructiveforustosee

howtheychoosetouseEnerStore in their com-mercialofferings.Incon-junctionwiththesepart-ners,wearecontinuouslydevelopingoursolutionandarestimulatedandchallengedtocontinuethisdevelopmentinawaythattakesusclosertocommercialization.Ourfocusnowis,withourpartners,tobuildonthepilot plant in Berlin and tooptimizetheprocessfordifferentend-users.

A BRIGHT FUTUREThe energy industry is inasignificanttransitionphase,wherewecansee,forexample,thattheuseofcoalinEuropefellsharplyin2019.Almost80percentofcoal-firedpowerplantsinEuropeareunprofitable.Thisis mainly because they arenotoperating,whichresultsinlowresourceutilizationandexpensiveconversioncosts.Theworldisswitchingtore-newableenergysources,andourandotherex-perts' assessment is that developmentisprogress-ingfaster.ThisisgoodnewsforSaltX.Wehaveeveryreasontoviewthefuturewithconfidence.

Thankyoufortheoppor-tunity to address you andforyourbeliefinus.

Carl-Johan LinérCEO

THE WORLD IS SWITCHING TO RENEWABLE ENERGY SOURCES, AND OUR AND OTHER EX-PERTS' AS-SESSMENT IS THAT DEVELOP-MENT ISPROGRESSING FASTER. THIS IS GOOD NEWS FOR SALTX.

2019 was a very eventful year for SaltX Technology during which we underwent major restructuring. The company's management and board of directors made the decision to focus clearly on large-scale energy storage — what we term EnerStore. This is the area we believe has the great-est commercial potential and the area where we have the best opportunity to control our development.


SaltX testanläggning invigs av Marcus Witt, Vattenfall och Harald Bauer, VD SaltX, Till höger Simon Ahlin, Head of Sales SaltX.

Carl-Johan Linér


SALTX STORES THERMAL ENERGY

THE SALTX ECOSYSTEM

OPERATIONS

Byheatingthenanocoat-ed salt using electricity or thermalheat,theenergycanbestoredforhours,daysorweeks—andthenusedwhenitisneededmost.

SaltX technology is especially suited to the marketwherehigh-qualitysteamatbetween160—450degreesCisrequired.This requirement can befound,forexample,inindustries,citiesorincogenerationplants.

THE WAY AHEADThecompany'staskistosellanddelivertheworld-patentednanocoat-edsalttogetherwithkeyknowledgeofthetech-nology to customers and partners.SaltXisdevelop-ingthefinishedsolutionwithpartnerswhoalreadysupplyenergyplants.

COMPONENTSSaltX energy storage consistsoffourkeycom-ponents:twosilosfor

storing the nanocoated salt,andtworeactorswherethesaltischargedordischarged.Thesalt,togetherwiththereac-tors,formtheverycoreoftheenergystoragesolution.Incooperationwithourpartners,areactor technology has beenidentifiedthatisconsideredtobesignifi-cantlymoreefficientandmore scalable than the oneusedinSaltX'sfirstmajorpilotplantlocatedinBerlin.Thetechnology—thefluidizedbed—iswellknownandismainlyusedincoal-firedpowerplants.Thenextstepistoprovethetechnologyin pre-commercial instal-lations.

Chargeswithsurplusenergy—electricityand/orheat

Dischargeshigh-temperaturesteamat160— 450degreesC

Endcustomersmaybeindustries,coge-nerationplantsorothercustomerswhoneedhigh-temperaturesteam.

ENERGY PRODUCTION

Ontheroadtocommercializingthecompany's large-scale energy storage solution,EnerStore,thereareanumberofpartnerswithwhomSaltXwillbeworking.Dependingonthemarketandthefinalapplication,thesepartnersmaydiffer,butinthemaintheywillhavefourdifferentfunctions.Theseareassalt suppliers that prepare and process nanocoatedsalt,OEMs(OriginalEquip-mentManufacturer)thatmanufacturekeycomponents,EPCs(Engineer,Pro-cure,Construct)thatinstallenergystor-agesystemsand,finally,endcustomers,so-calledoff-takers,whomaybeenergycompanies,industriesandcities,seetheimagetotheright.

SaltX is a technology company focusing on energy storage. Today, SaltX is developing a thermochemical energy storage solution based on nanocoated salt. The world is transitioning to renewable energy sources. This transition requires large amounts of energy storage in order to meet supply and demand at the right time.


SALTX STORES THERMAL ENERGY

THE SALTX ECOSYSTEM

ENERGY PRODUCTION ENERSTORE OFF TAKERS

ENERGI ÅNGA

ORIGINAL EQUIPMENT MANUFACTURERS (OEM)KEY COMPONENTS (CHARGER/DISCHARGER ETC.)

ENGINEERING PROCURMENT CONSTRUCTION (EPC)INSTALLERS OF THE ENERGY STORAGE PLANT

SALT PRODUCERSPREPARE AND PROCESS NCS

OFF TAKERSEND CUSTOMERS (ENERGY COMPANIES, INDUSTRIES, MUNICIPALITIES)


BUSINESS MODEL

Saltx'spositioninthevaluechainistodeliverthe nanocoated salt and knowledgearoundittoselected system partners whobuildandstarttheentireenergysolution.

THE ECOSYSTEM IS GROWINGThe company is de-pendentonfindingtherightpartnerswhocanassistwithotherpartsforacompleteplant.Animportantpartofthepuzzleisthepartner-shipwiththecompany'ssuppliersofsaltandprotectivematerial.TheNordkalkandWackercompanies are in place to

supplythefutureprojectswithnanocoatedsalt.

THREE NEW PARTNERSIn2019,thecompanyhasfocusedonworkingwithcompetentpartnerswhoareexperiencedinbuilding energy installa-tions.Threeimportantpartnersarenowinplace—GermanSteinmüller,Spanish INERCO and ChineseShuangliang.Thenextstepistobuildpre-commercialfacilitieswiththesepartnersandsetacommonplanforcommercializationandcustomeroffering.Thecompany'spartnerswillalsoplayakeyroleinthe

saleofenergystorageprojects.

OFF TAKERENERSTORE EPCOEMIPSUPPLIER

BUSINESS MODEL

SaltX develops and sells energy storage based on nanocoated salt in conjunction with its partners. The company's future revenues will consist primarily of sales of nanocoated salt, license fees and technology transfer. Revenue streams can also come from the finished plant in the form of installation and energy fees.

OEM/EPC: SPAIN

OEM/EPC: GERMANY

OEM/EPC: CHINA


SIGNIFICANT EVENTS

...DURING Q4SALTX CARRIED OUT A NEW CAPITAL ISSUE FOR APPROX. MSEK 80.6 AND IS TAKING THE NEXT STEP TOWARDS COMMERCIALIZATIONThemarketforlarge-scaleenergystorageisgrowingstrongly.Overthepastyear,SaltXTech-nologyhasdemonstratedwithitspilotprojectinBerlin that the technology can be used on a large scale,andhasenteredintostrategicagreementsthatpavethewayfortakingthenextstepinthecommercializationofthecompany'senergystoragesolution.ThedecisionwasmadetocarryoutarightsissueforapproximatelyMSEK80.6,whichwasfullyguaranteedthroughasubscrip-tioncommitmentfromtheprincipalshareholder,Industrifonden,andthroughissueguaranteesfromaguaranteeconsortium.Shareholders

receivedone(1)subscriptionrightforeach(1)shareheldontherecorddateandfive(5)sub-scriptionrightsentitledtosubscribeforone(1)shareintherightsissueatanissuepriceofSEK5.55pershare.Theissuewasfullysubscribedwithshareholderswithrightssubscribingfor75percentoftheissueandshareholdersandotherinvestorswithoutrightssubscribingfortheother25percentoftheissue.Thepurposeoftherightsissueistoprovide

thecompanywithfinancialresourcestoenablecontinueddevelopmentandcommercializationofthecompany'senergystoragesolution.

A NEW STRATEGIC PARTNER IN CHINA IS FINANCING A PILOT PROJECT – SHUANGLIANG IS CONSTRUCTING AND DEVELOPING AN ENERGY STORAGE PILOT PROJECT IN CHINA

SaltXsignedapartnershipagreementwithShuangliangBoilerCo.,Ltd.OurChinesepartnerwillbuildandfinanceapilotplanttomarketSaltXenergystoragetechnologyintheChinesemarket.Thepilotplantisplannedtohaveanoutputofabout50kW/500kWh.

Shanghai, China.


FINANCIAL OVERVIEW

OCTOBER – DECEMBER – Q4

REVENUE, EXPENSES AND EARNINGS*

Net salesNetsalesforthequarteramountedtoTSEK867(1,671),themajorityofwhichrelatestopaymentforworkintheformerHeatBoostapplicationcarriedoutforUStechnicalinstitu-tions.

Other income Other income in the quarter totaledTSEK295(2,827).

ExpensesExpensesduringtheyearamountedtoTSEK-12,103(-85,186),brokendownascostofgoodsforresaleTSEK-10(-1,396),otherexternalexpens-esTSEK-4,376(-10,181),per-sonnelexpensesTSEK-5,524(-9,359),anddepreciationandimpairmentoffixedassetsTSEK-2,193(-64,250).Impairmentlossesincludethescrappingoftheremainingvaluesofconclud-edpatentsofMSEK1.4.AsaconsequenceofIFRS16,

from2019expensesforrentand leasing are reported as a de-preciationandinterestexpenseinsteadofasotherexternalexpenses,seeNote5.

Operating profit/loss (EBIT)Operatingprofit/losswasTSEK-10,941(-79,792).Operatingprofits/lossex-

cludingimpairmentoffixedas-setsamountedtoTSEK-9,418(-16,658).

Financial itemsProfit/lossfromfinancialitemsamounted to TSEK -544 (419) andconsistedofinterestonliabilitiestotheSwedishEnergyAgency and Almi Företagspart-ner,aswellasonleasingliabil-ities.

Profit before taxProfit/lossbeforetaxwasTSEK-11,485(-79,373).Earningspersharebeforeand

afterdilutionamountedtoSEK-0.16(-1.38).

CASH FLOW, INVESTMENTS AND FINANCIAL POSITION

Cash flow and liquidityCashflowfromoperating activitiesinthequarterwasTSEK-10,169(-15,001).Groupcashequivalentsat

theendofthequartertotaledTSEK85,321(71,672).

Long-term liabilitiesLong-termliabilitiestotalledTSEK32,738(29,758)andcon-

sistedoflong-termelementsofloansfromtheSwedishEn-ergyAgencyforTSEK24,388andAlmiFöretagspartnerforTSEK4,200andthelong-termelementofleasingliabilities.RepaymentoftheloanfromtheSwedishEnergyAgencyisbasedoncriteriaforcom-mercializationbeingfulfilledthroughrevenuesandisdoneonthebasisofrevenueperyear.ArequestforremissionofmostoftheloanhasbeensenttotheAgency.Thefundingwasusedtodevelopapplica-tionsthatthecompanyisnolongerworkingwith.ItistheassessmentofSaltXthatthereisnofoundationforrepaymentbecausetheseapplicationsarenotexpectedtogenerateanyrevenue.TheloanfromAlmiisbeing

repaidfromJuly2019onamonthlybasisover5years.

InvestmentsEquityattheendofthepe-riodtotaledTSEK131,748(143,598)orSEK2.36(1.83)pershareandhasfallenwiththenegativeearnings.Theequityratioonthesamedatewas73percent.

* Allfiguresfor2019havebeenaffectedbytheintroductionofIFRS16.Comparativefiguresarenotrecalculated.


KEY FIGURES, THE GROUP, PER QUARTER TSEK Q 4 2018 Q 1 2019 Q 2 2019 Q 3 2019 Q 4 2019Netsales 1,671 -1,706 867 165 867Operatingprofit/loss(EBIT) -79,792 -20,144 -45,762 -6,983 -10,941Cashflowfromoperatingactivities -15,001 -25,143 -11,094 -12,427 -10,156Basicearningspershare,SEK -1.38 -0.29 -0.66 -0.10 -0.16

* Allfiguresfor2019havebeenaffectedbytheintroductionofIFRS16.Comparativefiguresarenotrecalculated.

JANUARY– DECEMBER – FULL YEAR

REVENUE, EXPENSES AND EARNINGS*

Net salesOtherincomefortheyearto-taledTSEK193(6,464).InQ1,SaltX ended a licensing and cooperationagreementwithStjernbergAutomationAB.SaltXreimbursedMSEK3.2inpreviouslypaidlicensefees,whichwerepartiallyrecognizedasincome.Thisexplainsthelowturnoverin2019.Therea-sonthecooperationwasendedis that it has not produced the intendedresult.

Other incomeOther income amounted to TSEK6,144(4,023)andcon-sistedofpublicgrantsfromtheEuropeanUnion'sHorizon2020projectfortheHeatBoostprojectandfromtheSwedishEnergyAgencyforthepilotplantinBerlin.

ExpensesExpensesduringtheyearamountedtoTSEK-90,167(-146,222),brokendownascostofgoodsforresaleTSEK-126(2,070),otherexternalexpensesTSEK-24,542(-42,709),per-sonnelexpensesTSEK-27,860

(-34,063),andamortizationandimpairmentoffixedassetsTSEK-37,639(-67,380).Inthesecondquarter,impairmentlossesweremadetotallingTSEK32,160oftheremainingcapitalizedex-penditurefordevelopmentworkrelatingtoapplicationsotherthanEnerStore.AsaconsequenceofIFRS16,

from2019,expensesforrentand leasing are reported as a de-preciationandinterestexpenseinsteadofasotherexternalexpenses,seeNote5.

Operating profit/loss (EBIT)Operatingprofit/losswasTSEK-83,830(-121,062).Operatingprofits/lossexclud-

ingimpairmentoffixedassetsamountedtoTSEK-49,103(-59,928).

Financial itemsProfitorlossfromfinancialitemsamountedtoTSEK-3,867(1,224)andconsistedofthechangeinvalueofsharesinCentralDevel-opmentHoldingsLtd(formerlyZhongFaZhanHoldingsLtd),andinterestonliabilitiestotheSwedishEnergyAgencyandAlmiFöretagspartner,aswellasonleasingliabilities.

Profit/loss before taxProfit/lossbeforetaxwasTSEK-87,697(-122,286).Earningspersharebeforeand

afterdilutionamountedtoSEK-1.22(-2.14).

CASH FLOW, INVESTMENTS AND FINANCIAL POSITION

Cash flow and liquidityCashflowfromoperatingactivitiesfortheyearwasTSEK-58,833(-50,556).ThetransitiontoIFRS16hashadaneffectonthecashflowfor2019asamortizationofleasingliabilitiesisreportedaspartoffinancingactivitiesinsteadofbeingincludedinoperatingac-tivitiesintheformofarental/leasingexpense.TheprojecttodevelopHeat-

Boost,partlyfundedbytheEU'sH2020,hasbeenprematurelyendedin2019.AnadvanceofSEK9.3millionwasreceivedinJune2018,ofwhichthemajorityhasbeenusedwithintheproj-ectandtheremainingSEK2.7million is intended to be repaid inconnectionwiththefinalsettlementoftheprojectinearly2020.Groupcashequivalentsas

perDecember31totaledTSEK85,321(71,672).

InvestmentsDuringtheyear,investmentsweremadethatimpactedcashflowbyTSEK-2,038(-41,480).Theseconsistedofinvestments


incapitalizedexpenditureandpatents.

PARENT COMPANYTheoperationsoftheparentcompany,SaltXTechnologyHoldingAB(publ),includecompany-wideservicesandmanagementofthesubsidiarySaltX Technology AB and main-tainingthecompany'slistingon Nasdaq First North Premier GrowthMarket.Profit/lossbeforetaxfor

theperiodwasTSEK-9,405(-5,726).Theparentcompany’savailableliquidfundsasper31DecembertotaledTSEK82,458(64,581).

SHARE CAPITALShare capital at the end oftheperiodtotaledSEK5,807,637.76consistingof72,595,472sharesatanominalvalueofSEK0.08.NewcapitalissueswerecarriedoutbeforetheendoftheyearandwereregisteredinJanuary2020.

SHARESShares in SaltX are listed on Nasdaq First North Premier GrowthMarket.

Share warrantsAcapitalissuein2018wascarriedoutintheformofunitsconsistingofoneshareandonesharewarrant.14.8sharewarrantswereissued.After

minoradjustmentsduetothe2019capitalissue,1.9555sharewarrantsarerequiredtosubscribeforoneshareattheexercisepriceofSEK12.71duringtheperiodJanuary1,2020toOctober31,2021.Withfullsubscriptionofthesewarrants,thenumberofshareswillincreaseby7.5million,correspondingtoadilutionof9percentandthecompanywillreceiveMSEK96.

Incentive programsThe Annual General Meet-inginApril2017decidedtoauthorizetheBoardtoissue750,000warrantswhichwereofferedtomanagementandotherpersonnel,primarilynewemployees,intheGroup.ThisprogramwaslaunchedinSeptember2017.Onewarrantequatestoone(1.009)share,subscriptioncantakeplaceinJune2020andthestrikepricewassetonthedayofissueat150percentofthecurrentshareprice,whichwasSEK48.36,afteraminoradjust-mentforthe2018capitalis-sue.Employeeshaveacquired725,000warrants,ofwhichthe company repurchased 260,000warrants,allatmar-ketvalue,leavinganetfigureof465,000outstandingwar-rants.Ifexercisedinfull,thecompanywillreceiveMSEK23.5.Thesesharescorrespond

toa0.7percentpotentialdilution.

Earnings per shareEarningspershareforthefullyearamountedtoSEK-1.22(-2.14)basedonanaveragefig-ureof72,126,265(56,272,121)sharesbeforedilution.Whencalculatingthenumberofsharesafterfulldilution,theadditionaloutstandingsharesfromwarrantprogramsissuedhavebeentakenintoaccountalthough this has not had any effectbecausetheresultisnegative.AsofDecember31,2019,

52shares,representinglessthan0.01percentoftotalshares,hadnotyetbeensub-scribedforfromthemergerbe-tweenthecompanyandSaltXTechnology.

Significant risks and uncertaintiesAllbusinessactivityandshareownershipisassociatedwithrisk.Risksthataremanagedwellcanentailopportunitiesandvaluecreation,whiletheopposite can lead to damage andlosses.Theriskscanbedi-videdintomarket-related,op-erations-relatedandfinancialrisks.Seealsothecompany’sannualreportonitswebsite.

Accounting policies

CHANGE OF SHARE CAPITAL IN 2019 Change Accumulated Change Accumulated in share capital share capital no. of shares no. of sharerOpeningbalance2019 — 4,911143.20 — 61,389,290Rightsissue,partof 887,764.96 5,798,908.16 11,097,062 72,486,352Directedissue,guaranteefee 8,727.28 5,807,635.44 109,091 72,595,443Issueinkind(May2019) 2.32 5,807,637.76 29 72,595,472


TheconsolidatedfinancialstatementshavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS)suchastheyhavebeenadoptedbytheEU,andRFR1SupplementaryAccountingRulesforGroups,andtheSwedishAnnualAccountsAct.Theinter-im report has been prepared in accordancewithIAS34InterimFinancialReporting.Theparentcompany’sfi-

nancialstatementshavebeenpreparedinaccordancewiththeSwedishAnnualAccountsActandtheSwedishFinancialReportingBoard’srecommen-dationRFR2AccountingforLegalentities.TheapplicationofRFR2meansthattheparentcompany in the interim report forthelegalentityappliesallofthe IFRS and statements ad-optedbytheEUasfarasthisispossiblewithintheframeworkoftheSwedishAnnualAccountsAct,theSwedishPensionObligationsVestingActandinconsiderationoftheinter-rela-tionbetweenaccountingandtaxation.Theinterimreportforthe parent company has been preparedinaccordancewiththeSwedishAnnualAccountsAct.Theaccountingpolicies

appliedareinaccordancewiththose described in the SaltX Group'sannualreportfor2018,exceptthattheGrouphasap-pliedIFRS16LeasesfromJan-uary1,2019.Implementationofthestandardhasaspecificeffectonthefinancialreports.ForinformationontheeffectsofthetransitiontoIFRS16,seeNote5.AccountingpoliciesinaccordancewithIFRS16arelistedbelow.The parent company has chosen

nottoapplyIFRS16Leasesandhas chosen to apply the items statedinRFR2(IFRS16Leases,p.2—12)fromJanuary1,2019.

ACCOUNTING POLICIESAPPLIED FOR LEASES FROM JANUARY 1, 2019

The Group's leasing agreements consistprimarilyofarentalagreementfortheofficeprem-ises.Theleaseissignedforaperiodofsevenyears,butoppor-tunitiesforextensioncanbeex-ercised,asdescribedbelow.Thetermsarenegotiatedseparatelyforeachagreementandcontainnormalcontractualterms.

The leasing agreements arereportedasrightsofuseand a corresponding liability is reported on the date the leasedassetisavailableforusebytheGroup.Eachleasepaymentisdividedbetweenamortizationoftheliabilityandthefinancialcost.Thefinancialexpenseshallbeallocatedoverthe lease period so that each accountingperiodischargedwithanamountcorrespond-ingtoafixedinterestrateforthe liability reported during eachperiod.Therightofuseisdepreciated on a straight-line basisovertheshorteroftheasset'susefullifeandthedura-tionofthelease.Assetsandliabilitiesarising

fromleasingagreementsareinitiallyrecognizedatpresentvalue.Assetswithrightsofusearevaluedatcostandincludethefollowing: theinitialvaluationoftheleasingliability, paymentsmadeatorbefo-rethetimewhentheleased

assetismadeavailabletothelessee.

Leasingliabilitiesincludethepresentvalueofthefollowinglease payments:

fixedfees variableleasingfeeslinkedtoanindex

Leasing payments are discount-edwiththemarginalinterestrate.Leasingfeeslinkedtoleasing

agreementsregardingassetsofminorvalueareexpensedonastraight-line basis in the income statement.

Options to extend and terminate an agreementOptionstoextendandtermi-nate an agreement are included intheassetandliabilitywhenitis reasonably certain that they willbeexercised.Thetermsareusedtomaximizeflexibilityinthemanagementoftheagree-ments.


CONSOLIDATED STATEMENT OF COMPREHENSIVE RESULT – SUMMARY

TSEK Q 4 2019 Q 4 2018 FY 2019 FY 2018 Netsales 867 1,671 193 6,464WorkperformedbytheCompanyforitsownuse andcapitalized — 895 — 14,672Otheroperatingincome 295 2,828 6,144 4,024TOTAL 1,162 5,394 6,337 25,160

Costofproductssold -10 -1,396 -126 -2,070Otherexternalcosts -4,376 -10,181 -24,542 -42,709Personnelcosts -5,524 -9,359 -27,860 -34,063Depreciationandimpairementoffixedassets -2,193 -64,250 -37,639 -67,380TOTAL OPERATING COSTS -12,103 -85,186 -90,167 -146,222

OPERATING PROFIT/LOSS -10 941 -79,792 -83,830 -121,062 Financialincome 8 228 8 -877Financialexpenses -552 191 -3,875 -347FINANCIAL ITEMS — NET -544 419 -3,867 -1,224

PROFIT/LOSS BEFORE INCOME TAX -11,485 -79,373 -87,697 -122,286 Incometaxexpense — — — 2,163

PROFIT/LOSS FOR THE PERIOD -11,485 -79,373 -87,697 -120,123

Earnings per share calculated on earnings attributable to parent company shareholders, SEK Basicearningspershare -0.16 -1.38 -1.22 -2.14Earningspershareafterdilution -0.16 -1.38 -1.22 -2.144

TherearenoitemsintheGroupthatarereportedinothercomprehensiveincome,whichiswhytotalcomprehensiveincomecorrespondstonetprofit.Netprofitandtotalcomprehensiveincomefortheperiodareattributableintheirentiretytoparentcompanyshareholders.


CONSOLIDATED BALANCE SHEET – SUMMARY

TSEK Dec 31, 2019 Dec 31, 2018

ASSETS Fixed assets Intangible assets Capitalizedexpenditureondevelopmentwork 75,139 107,366Patentsandtrademarks 1,354 2,633 76,493 109,999

Tangible assets Equipment,tools,andinstallations 1,445 2,020Accessrightassets 5,443 — 6,888 2,020

Financial fixed assets Shares 6117 7800 6 117 7 800Total fixed assets 89 498 119 819 Current assets Advancepaymentstosuppliers — 204Accountsreceivable 1,077 2,633Othercurrentassets 2,346 8,666Prepaidexpensesandaccruedincome 1,462 2,350Cashandcashequivalents 85,321 71,672Total current assets 90,206 85,525TOTAL ASSETS 179,704 205,344 EQUITY AND LIABILITIES Equity Sharecapital 5,808 4,911Rightsissue,toberegistered 1,228 888Othercontributedcapital 665,851 591,241Accumulatedprofitorlossincludingprofit/lossfortheyear -541,139 -453,442Total equity 131,748 143,598

Long-term liabilities Otherliabilities 28,588 29,758Leasingliabilities 4,150 —Total long-term liabilities 32,738 29,758

Current liabilities Accountspayable 2,237 12,949Leasingliabilities 1,447 —Otherliabilities 4,954 1,443Accruedexpensedanddeferredincome 6,580 17,596Total current liabilities 15,218 31,988TOTAL EQUITY AND LIABILITIES 179,704 205,344


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

AttributabletoParentCompanyshareholders Accumulated Rightsissues Other profit/loss under contributed incl.profit/loss TotalTSEK Sharecapital registration capital fortheyear equity

Opening balance Jan 1, 2018 4,397 — 490,294 -333,319 161,372Period Jan-Dec 2018 Netincome/lossJan-Dec2018equaltototalcomprehensiveincome — — — -120,123 -120,123Total comprehensive income — — — -12,123 -120,123Transactions with shareholders in their capacity as shareholders:Rightsissues 514 — 48,452 — 48,966Rightsissues,underregistration — 888 60,146 — 61,034Issueexpenses — — -8,238 — -8,238Warrantssoldandrepurchased 587 — 587Closing balance Dec 31, 2018 4,911 888 591,241 -453,442 143,598

OpeningbalanceJan1,2019 4,911 888 591,241 -453,442 143,598Netincome/lossJan-Dec2019equaltototalcomprehensiveincome— — — -87,697 -87,697Total comprehensive income — — — -87,697 -87,697Transactions with shareholders in their capacity as shareholders:Rightsissues 897 -888 — — 9Rightsissues,underregistration — 1,228 84,508 — 85,736Issueexpenses — — -9,896 — -9,896Warrants repurchased — — -2 — -2Closing balance Sep 30, 2019 5,808 1,228 665,851 -541,139 131,748


CONSOLIDATED CASH FLOW STATEMENT

TSEK Q 4 2019 Q 4 2018 FY 2019 FY 2018

Cash flow from operating activities Profit/lossafterfinancialitems -11,485 -79,373 -87,697 -122,286Adjustmentsfornon-cashitemsetc. 2,382 63,961 39,899 68,380 -9,103 -15,412 -47,798 -53,906Increase/decreaseinoperatingreceivables -799 -3,644 8,968 -1,993Increase/decreaseinoperatingliabilities -254 4,055 -19,990 5,343Cash flow from change of working capital -1,053 411 -11,022 3,350Cash flow from operating activities -10,169 -15,001 -58,820 -50,556 Cash flow from investing activities Acquisitionofintangibleassets -257 -26,371 -2,038 -39,518Acquisitionoftangibleassets — 9,012 — -760Acquisitionoffinancialassets — — — -1,000Merger by SunCool AB — — — 803Increase/decreaseinlong-termreceivables — — — -1,005Cash flow from investing activities -257 -17,359 -2,038 -41,480 Cash flow from financing activities Newcapitalissue,netofissueexpenses 76,182 80,955 75,847 83,062Amortizationsofdebts — — — -512Changeinlongtermleasingliabilities -370 — -1,340 —FinancingfordevelopmentfromEuropeanUnion — — — 9,321Cash flow from financing activities 75,812 80,955 74,507 91,871

Cash flow for the period 65,399 48,595 13,649 -165Cashequivalentsatbeginningofperiod 19,922 23,077 71,672 71,837Cashequivalentsatendofperiod 85,321 71,672 85,321 71,672


NOTE 1 SIGNIFICANT ESTIMATES AND ASSESSMENTS FOR ACCOUNTING PURPOSES

Theestimatesandassumptionsthatrepresentasignificantriskofmaterialadjustmentsinthecarryingamountsofassetsandliabilitiesare:

Intangible assets: The largest assetrecognizedinSaltX’sbalancesheetiscapitalizeddevelopmentexpenditure.Thesearefrom30June2019,afterimpairments,relatingtothe underlying technology and theapplicationforlarge-scaleenergystorage,EnerStore.Animpairmenttestofthisassetiscarriedoutbasedonanesti-mateofwhattheCompany'stechnology can lead to in the formoffuturerevenueandcashflow.Importantcompo-nentsincalculatingthesefu-turevaluesarevolumegrowth,

profitmarginanddiscountrate.Asignificantchangeofimportant components in the calculationmaymeanthatthebalance sheet item needs to be adjusted.

DevelopmentTheGroupassesseswhentheproduct or process is technically andcommerciallyfeasibleandthecompanyhassufficientresourcestocompletedevelopmentandthereafteruseorselltheintangi-bleasset.Iftheseconditionsaremet,anintangibleassetisrecog-nizedinthebalancesheet.

Research and promotional measuresDuringtheyear,theGroupfo-cusedontheapplicationforlarge-scaleenergystorage,Ener-Store.Theactivitieshavemainlyconsistedofsearchingforamoreefficientkeycomponentfor

charging and discharging energy fromthenanocoatedsalt.Inaddi-tion,resourceshavebeenputintoinitialsalespromotionmeasuresintheformofworkonandprepa-rationofpre-commercialfacilitiesinconjunctionwithpartners.Theseactivitiesandeffortshavethecharacterofresearchandsalespromotionactivitiesandareexpensedastheyarise.Estimatesandassessments

arecontinuouslyevaluatedandarebasedonhistoricalexperi-enceandotherfactors,includingexpectationsoffutureeventsthat are considered reasonable underprevailingconditions.

NOTE 2 REVENUE

The Group has reported the followingamountsintheincomestatementrelatingtorevenue (seetablebelow).

NOTES

REVENUE Q 4 2019 Q 4 2018 FY 2019 FY 2018Revenuefromagreementswithcustomers 867 1,671 193 6,464Otherrevenue 295 2,828 6,144 4,024Total revenue 1,162 4,499 6,337 10,488

TheGrouphasrevenuesasspecifiedbelow:

Q 4 2019 Q 4 2018 FY 2019 FY 2018Productsale 12 126 393 618Licenseandroyaltyrevenue — 1,557 -2,067 2,624Developmentwork 744 -520 1,867 960Consultancyservices(technology) — 508 — 2,262Total revenue from customers 867 1,671 193 6,464

Licenserevenuereferstocompletedlicenseandcollaborationagreementsandthusreimbursedlicensefeeswhichwerepartiallyrecognizedasincome.IncomefromdevelopmentcooperationreferstopaymentsfromUSpartnersintheHeatBoostproject.


NOTE 3 F INANCIAL INSTRUMENTS

TheGrouphasreportedthefol-lowingamountsintheincomestatementrelatingtorevenue: Shares in listed companies Dec 31, 2019 Dec 31, 2018

CapitalDevelopment HoldingsLtd. 6,117 7,800(formerlyZhongFaZhanHoldingsLtd)

Theassetshavebeenvaluedatlevel1inthefairvaluehierarchy.FortheGroup'sborrowing

fromAlmiFöretagspartner,thecarryingamountofthebor-rowingcorrespondstoitsfairvaluesincetheinterestrateonthisborrowingisatparitywithcurrentmarketinterestrates.However,differenceshavebeenidentifiedinregardtotheloanfromtheSwedishEnergyAgency.Thevalueoftheliabilityis

expectedtochange.ArequestforremissionofmostoftheloanhasbeensenttotheAgency.Thefundingwasusedtodevel-opapplicationsthatthecompa-nyisnolongerworkingwith.ItistheassessmentofSaltXthatthereisnofoundationforrepay-mentbecausetheseapplicationsarenotexpectedtogenerateanyrevenue.Inregardtothefairvalueof

short-termfinancialassetsandliabilities,thefairvalueisesti-mated to correspond to the car-rying amount since the discount effectisnotmaterial.

NOTE 4 TRANSACTIONS WITH AFFIL IATED PARTIES

In2019,notransactionswithaffiliatedpartieshaveoccurredother than agreed payments totheBoardofDirectorsandmanagement.

NOTE 5 EFFECT OF THE INTRODUCTION OF IFRS 16 LEASES

ThisnoteexplainstheeffectsintheGroup'sfinancialreportinconnectionwiththeapplicationofIFRS16Leases.

The Group has applied IFRS 16LeasesasofJanuary1,2019,whichhasresultedinchangedaccountingpoliciesandadjust-ments in the amounts reported inthefinancialreport.Inaccor-dancewiththetransitionrulesinIFRS16,theGrouphasappliedthesimplifiedtransitionmethodandhasthereforenotrecalculat-edthecomparativefigures.Allrightsofusearevaluedatthetimeoftransitionatanamountcorresponding to the lease liabili-ty.Inconnectionwiththetran-sition,thefollowingreliefruleswereapplied: Rightsofuseassetshavebeenclassifiedonthebasisofassetclass;officepremisesTheas-setsareonlyfoundinSweden. Thetermoftherightsofusehasbeenestablishedwiththe

aidofex-postknowledgeregar-ding,forexample,theextensi-onoptionandtheterminationclause.

Theweightedaveragemarginalinterestrateusedonthefirstdayofapplication,January1,2019,was6percent.

Effect in the balance sheetRightsofuseassetsandleasingliabilitieshavebeenincludedinthebalancesheet.Theseareshownonseparatelinesinthebalancesheet.

Effect in the income statementIFRS16hashadanegligibleimpactonoperatingincomeandprofit/lossafterfinancialitems.

Effect in the cash flow statementThetransitiontoIFRS16hashadaneffectonthecashflowfortheperiodJanuary-Sep-tember2019asamortizationofleasingliabilitiesisreportedaspartoffinancingactivitiesinsteadofbeingincludedinoperatingactivities.ThismeansthatcashflowfromoperatingactivitiesfortheperiodisTSEK1,086higherwhilecashflowfromfinancingoperationsisTSEK1,339lowercomparedwithifpreviousaccountingpoli-cieshadbeenapplied.

TRUE VALUE Dec 31, 2019 Dec 31, 2018 Carryingamount Carryingamount Carryingamount CarryingamountState Energy Agency 24,388 23,830 24,488 22,973


PARENT COMPANY INCOME STATEMENT

TSEK FY 2019 FY 2018

NET SALES 2,400 3,528 Costofgoodssold — -162Otherexternalcosts -4,444 -7,307Peronnelcosts -8,876 -6,511TOTAL OPERATING EXPENSES -13,320 -13,980

OPERATING RESULT -10,920 -10,452 Financialincome 3,198 5,067Financialexpenses -1,683 -341FINANCIAL ITEMS — NET 1,515 4,726

PROFIT BEFORE TAX -9,405 -5,726 Groupcontribution -83,000 -20,000Incometax — 2,070PROFIT/LOSS FOR THE PERIOD -92,405 -23,656


PARENT COMPANY BALANCE SHEET

TSEK Dec 31, 2019 Dec 31, 2018

ASSETSFINANCIAL ASSETS Participationsinsubsidiaries 197,270 197,270Shares 6,117 7,800Total fixed assets 203,387 205,070 Current assets Current receivables Otherreceivables 782 4,987AccountsreceivablefromGroupcompanies 750 32,552Prepaidexpensesandaccruedincome 265 196Cashandbankdeposits 82,458 64,581Total current assets 84,255 102,316TOTAL ASSETS 287,642 307,386 EQUITY AND LIABILITIES Equity Restricted equity Sharecapital 5,808 4,911Othercontributedcapital 1,228 888 7,036 5,799Non-restricted equity Sharepremiumreserve 447,196 372,584Retainedearnings -78,163 -54,507Profit/lossfortheyear -92,405 -23,656 276,628 294,421Total equity 283,664 300,220

Current liabilities Accountspayable 778 3,024Otherliabilities 158 758Accruedexpensesanddeferredincome 3,042 3,384Total current liabilities 3,978 7,166TOTAL EQUITY AND LIABILITIES 287,642 307,386


AFFIRMATION BY THE BOARD OF DIRECTORS AND THE CEOTheBoardofDirectorsandCEOaffirmthatthisyear-endreportprovidesatrueandfairviewoftheParentCompanyandtheGroup'soperations,financialpositionandresultsfortheperiodconcerned.

Stockholm,February21,2020BoardofDirectors

ÅkeSund StaffanAndersson TonyGrimaldi Chairman board member board member

Elin Lydahl Tommy Nilsson Indra Åsander board member board member board member

Carl-Johan Linér CEO


Auditor’s report

SaltX Technology Holding AB (publ) org nr 556917-6596

Introduction

We have reviewed the condensed interim financial information (interim report) of SaltX Technology Holding AB (publ) as of 31 December 2019 and the 12-month period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.

Stockholm February 21, 2020

Öhrlings PricewaterhouseCoopers AB

Claes Sjödin Leonard Daun Authorized Public Accountant Authorized Public Accountant Auditor in charge


OTHER INFORMATION

CALENDAR TheAnnualGeneralMeeting April23,2020InterimReportQ12020 May5,2020InterimReportQ22020 August25,2020InterimReportQ32020 November4,2020Year-endReport2020 February17,2021

The2019AnnualReportisexpectedtobepublishedattheendofMarch2020.

ADDRESSSaltX Technology Holding AB (publ)Västertorpsvägen135129 44 HÄGERSTEN

Forfurtherinformation,pleasecontact:

Carl-JohanLinér,CEO+46(0)[email protected]

HaraldBauer,CFO+46(0)[email protected]

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