Eco Wave Power Global AB (publ) — FY 2022 Form 20-F
Reporting period: Year ended December 31, 2022. This is an annual report, not a standalone fourth-quarter filing. Financial statements are prepared under IFRS as issued by the IASB and presented in U.S. dollars.
Business context
Eco Wave Power develops onshore and nearshore wave-energy conversion technology and related services, including feasibility studies. It has not generated revenue from WEC product sales; 2022 revenue came from a feasibility study in Asia. Its reported project pipeline is up to 404.7 MW, but most projects remain preliminary and depend on feasibility results, permits, financing, and other conditions.
Key financial metrics
| USD thousands, except per-share data | 2022 | 2021 |
|---|---|---|
| Revenue | 26 | 31 |
| Cost of sales | (22) | (27) |
| Gross profit | 4 | 4 |
| Research and development | (898) | (670) |
| Sales and marketing | (461) | (485) |
| General and administrative | (2,259) | (1,909) |
| Operating loss | (3,607) | (3,070) |
| Net financial income | 706 | 723 |
| Net loss | (2,901) | (2,347) |
| Basic and diluted loss per share | $(0.07) | $(0.06) |
| Net cash used in operating activities | (2,462) | (2,530) |
- Margins: Gross profit was $4,000 on $26,000 of revenue; the resulting gross margin was about 15%. Operating and net margins are not useful indicators given the very small service revenue base and ongoing development-stage losses.
- Liquidity at year-end: Cash and cash equivalents were $5.295 million, with another $5.0 million in short-term deposits and $63,000 of restricted deposits. Current assets were $10.519 million and current liabilities $1.859 million.
- Debt and lease liabilities: Total liabilities were $2.043 million. These included $941,000 of current related-party loans, $128,000 outstanding on the PortXL loan (including $32,000 current), and $166,000 of lease liabilities. The related-party loan is payable upon demand, according to the notes.
- Cash flows: Investing activities used $5.301 million, principally reflecting a $5.0 million short-term deposit investment and $298,000 invested in the Jaffa joint venture. Financing activities used $320,000, including $200,000 of loan repayment and lease payments.
- Capital and equity: The company had 44,394,844 common shares outstanding at December 31, 2022 and an accumulated deficit of $11.284 million.
Changes versus 2021
- Revenue fell 16% to $26,000, with gross profit unchanged at $4,000. Revenue in both years was from feasibility-study services, not equipment or electricity sales.
- Operating loss increased 17% to $3.607 million and net loss increased 23% to $2.901 million. R&D rose 34%, while G&A rose 18%.
- R&D included a one-off $278,000 loss on disposal of Gibraltar floater equipment during relocation of the conversion unit to Los Angeles. G&A increases included higher insurance and professional-service costs.
- Operating cash use declined slightly, to $2.462 million from $2.530 million. Cash and equivalents fell from $14.621 million, while $5.0 million was placed in short-term deposits. The company also reported substantial foreign-currency translation losses in other comprehensive income.
Outlook, risks and notable items
- Management said cash and cash equivalents were expected to fund operations for at least 12 months from the filing date, but significant additional financing will be needed for future plans. The filing warns that unavailable financing could force delays or reductions in development and could raise substantial doubt about the company’s ability to continue as a going concern.
- No specific revenue or earnings guidance is provided. Management does not expect significant product-sales revenue in the near term and expects R&D, sales and marketing, and G&A expenses to increase as projects advance.
- The Jaffa Port project with EDF Renewables IL is a 100 kW pilot; estimated total cost was $900,000–$1 million, shared equally. The filing reports that a feed-in tariff was set and grid-connection work was underway. Portugal’s first 1 MW project still required a further water-resources license. Spain’s proposed project was in feasibility study. The 77 MW Turkey agreement is conditional on feasibility, permits and other requirements.
- The Gibraltar pilot operated through March 2022; its conversion unit was relocated to AltaSea at the Port of Los Angeles, where installation remained subject to Port approval. The filing describes the project pipeline as largely preliminary and does not guarantee that listed projects will be built.
- Key risks include commercialization and scale-up uncertainty, permitting and grid-connection delays, dependence on grants and renewable-energy support, supply-chain and component-cost exposure, foreign-exchange fluctuations, and competition. COVID-related delays, component shortages and price increases continued to affect execution.
- Financial reporting control concern: Management reported that disclosure controls were ineffective at year-end due to an unremediated material weakness involving insufficient finance staff and inadequate segregation of duties in period-end reporting. The auditor issued an unqualified opinion on the IFRS financial statements but did not audit or opine on internal-control effectiveness.
- There are no material legal proceedings reported. The company does not expect to pay dividends in the foreseeable future. Its CEO may receive a $2.0 million cash bonus upon a qualifying change of control.
Important facts for investors to verify
- How much of the reported 404.7 MW pipeline is supported by definitive, financeable agreements, permits, and confirmed grid access.
- Whether the Jaffa pilot reaches grid operation and demonstrates reliable output, and the remaining approvals, schedule, and cost for Portugal and Los Angeles.
- Cash availability and burn rate, including the maturity or demand status of the $941,000 related-party loan and the terms and accessibility of short-term deposits.
- Progress in remediating the material weakness in financial reporting controls and the adequacy of staffing and oversight.
- Future funding needs, potential dilution or debt, grant conditions and royalties, and foreign-exchange exposure; the company stated it did not hedge currency risk.