Photocat A/S : Annual report - 2023

PHOTOCAT A/S

Langebjerg 4, 4000 Roskilde

Company reg. no. 32 35 79 03

Annual report

1 January - 31 December 2023

The annual report was submitted and approved by the general meeting on the 22 May 2024.

Chairman of the meeting

Contents

	Page
Reports
Management's statement	1
Independent auditor's report	2
Management's review
Company information	5
Management´s review	6
Financial statements 1 January - 31 December 2023
Income statement	8
Balance sheet	9
Statement of changes in equity	11
Statement of cash flows	12
Notes	13
Accounting policies	19

Notes:

• To ensure the greatest possible applicability of this document, IAS/IFRS English terminology has been used.
• Please note that decimal points have not been used in the usual English way. This means that for instance DKK 146.940 means the amount of DKK 146,940, and that 23,5 % means 23.5 %.

PHOTOCAT A/S · Annual report 2023

Management's statement

Today, the Board of Directors and the Managing Director have approved the annual report of PHOTOCAT A/S for the financial year 1 January - 31 December 2023.

The annual report has been prepared in accordance with the Danish Financial Statements Act.

We consider the chosen accounting policy to be appropriate, and in our opinion, the financial statements give a true and fair view of the financial position of the Company at 31 December 2023 and of the results of the Company's operations and cash flows for the financial year 1 January - 31 December 2023.

Further, in our opinion, the Management's review gives a true and fair view of the matters discussed in the Management's review.

We recommend that the annual report be approved at the Annual General Meeting.

Roskilde, 6 May 2024

Managing Director

Michael Humle

Director

Board of directors

Mette Therkildsen

Finn Overgaard

Theis Holst Reenberg

Chairman

Tom Weidner

PHOTOCAT A/S · Annual report 2023

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Independent auditor's report

To the shareholders of PHOTOCAT A/S

Opinion

In our opinion, the Financial Statements give a true and fair view of the financial position of the Company at 31 December 2023, and of the results of the Company's operations and cash flows for the financial year 1 January to 31 December 2023 in accordance with the Danish Financial Statements Act.

We have audited the Financial Statements of PHOTOCAT A/S for the financial year 1 January to 31 December 2023, which comprise income statement, balance sheet, statement of changes in equity, cash flow statement and notes, including a summary of significant accounting policies ("financial statements").

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Statement on Management's Review

Management is responsible for Management's Review.

Our opinion on the financial statements does not cover Management's Review, and we do not express any form of assurance conclusions thereon.

In connection with our audit of the financial statements, our responsibility is to read Management's Review and, in doing so, consider whether Management's Review is materially inconsistent with the financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated.

Moreover, it is our responsibility to consider whether Management's Review provides the information required under the Danish Financial Statements Act.

Based on the work we have performed, in our view, Management's Review is in accordance with the Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statement Act. We did not identify any material misstatement in Management's Review.

PHOTOCAT A/S · Annual report 2023

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Independent auditor's report

Management's Responsibilities for the Financial Statements

Management is responsible for the preparation of Financial Statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, Management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the financial statements unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.

PHOTOCAT A/S · Annual report 2023

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Independent auditor's report

• Conclude on the appropriateness of Management's use of the going concern basis of accounting in preparing the financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and contents of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in the internal control that we identify during our audit.

Hillerød, 6 May 2024

PrisewaterhouseCoopers

State Authorised Public Accountants

Company reg. no. 33 77 12 31

Flemming Eghoff	Preben Bøgeskov Eriksen
State Authorised Public Accountant	State Authorised Public Accountant
mne30221	mne23370

PHOTOCAT A/S · Annual report 2023

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Company information

The company	PHOTOCAT A/S
	Langebjerg 4
	4000 Roskilde
	Company reg. no.	32 35 79 03
	Established:	31 July 2009
	Domicile:	Roskilde
	Financial year:	1 January - 31 December
Board of directors	Mette Therkildsen, Chairman
	Finn Overgaard
	Theis Holst Reenberg
	Tom Weidner
Managing Director	Michael Humle, Director
Auditors	PrisewaterhouseCoopers Statsautoriseret Revisionspartnerselskab
	Milnersvej 43
	3400 Hillerød

PHOTOCAT A/S · Annual report 2023

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Management´s review

Introduction

Photocat has developed photocatalytic liquids that can be applied to surfaces etc. giving an air cleaning effects as it removes NOx from the air.

Photocat was born as a green transition company focusing on delivering environmental and climate solutions to the goals set up by the UN and known as the 17 world sustainability goals. Photocat delivers life and health saving solutions at health economic beneficial profile for the public sector. Photocat keeps track of its delivery on these important transition goals and focuses on NOx control for better air quality in the cities. Also, indoor air quality has been on the agenda, and the company has delivered several solutions for the reduction of VOC's. In the foreseeable future, the company will add CO2 reduction to its palette of unique property proposals.

Photocat's solutions are developed with economic and scientific aims enabling customers to offer even greater value when delivering their own products like roofing membranes, pavements, roads, and floors.

The Product portfolio is marketed using direct sales methods to potential customers in selected markets. Photocat uses the brands NOxOFF, Actifloor, ShineOn and Photocat Garden as recognizable tradenames. All the products are in their early lifecycle phase.

As we conclude another year at Photocat A/S, we have been given a chance to reflect over the year, its highlights and the challenges it gave and hopefully convey some of this into our management report for 2023. This year has been pivotal, reflecting our steadfast commitment to environmental sustainability by focusing on the key challenges we address, being air pollution either as NOx or particle matter in our ambient air. This situation is causing far too many deaths and excessive mortality for the wealthy member countries of the EU not to prioritize it. We have continued our focus on being the lowest hanging fruit in the "tool box".

2023 Overview

In 2023, Photocat A/S continued to demonstrate resilience and adaptability in a year marked by significant achievements and challenges. The building material market was hit hard in major European countries due to high interest rates resulting in fewer new build houses. Public budgets were under pressure due to war and high inflation. Our dedication to delivering high-quality air purification solutions has remained unwavering, and our efforts have been directed towards sustaining growth, enhancing operational efficiency, and expanding our market presence.

Development in activities and financial matters

Financial Highlights

• A revenue level maintained despite the significant challenges.
• Turned EBITDA positive, reflecting our improved operational efficiency and cost management.
• Notable EBITDA improvement from 2022 to 2023, driven by better efficiency and cost reductions.

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Management´s review

Operational Highlights

• Successfully integrated product CMA (Ice & Dust away product) into our portfolio, enhancing our product offerings.
• Applied the first 105,000 SQM of NOxOFF on a highway near Barcelona, showcasing our technological capabilities and market expansion.
• Conducted a study at Roskilde Festival demonstrating the effectiveness of our dust-suppression technology, CMA, in reducing particle concentrations.
• Streamlined organizational structure and management, resulting in reduced administrative costs and increased operational efficiency.

As we move into 2024, we hope to have the first penetration in Mexico. We also have focused on access and further build on the basis created in 2023 in GCC. In addition, a considerable effort has been invested into showing that we are competitive and will win tender businesses in Spain. We have with market creation and market access effort directed at opening public demand in Spain. This activity has played a strong part in trying to open public tenders with specifications in advance of air cleaning technology.

The integration of ESG principles into our core operations has been a driving force, guiding our efforts in delivering impactful air quality solutions. Our progress in Spain, the success of Photocat Garden, and the promising developments in our product portfolio underline our potential for continued growth and innovation.

Looking ahead, we are excited about the opportunities to expand our reach, enhance our product offerings, and continue making a positive environmental impact. Yet we are fully aware of the need to further strengthen our "go to market" model together with building a winning business model. Together, these parts are on a path towards a sustainable and prosperous future for Photocat A/S.

Conclusion

In conclusion, 2023 has been a year of both challenges and significant achievements for Photocat A/S. Our unwavering focus on innovation, sustainability, and strategic growth has enabled us to navigate the complexities of the market. As we look to the future, we are poised for continued success and are committed to leading the way in air purification technology. Our management team extends heartfelt thanks to our shareholders, customers, and partners for their continued support and confidence in our vision.

Thank you for your unwavering support.

PHOTOCAT A/S · Annual report 2023

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Income statement 1 January - 31 December

All amounts in DKK.

Note	2023		2022
	Revenue	15.041.092		14.947.650
	Own work capitalised	1.849.003		1.991.237
	Other operating income	0		189.340
	Costs of raw materials and consumables	-4.113.557	-3.457.125
	Other external expenses	-6.450.030	-9.430.014
	Gross profit	6.326.508		4.241.088
3 Staff costs	-5.978.915	-5.151.904
	Depreciation, amortisation, and impairment	-2.113.271	-2.236.450
	Operating profit	-1.765.678		-3.147.266
	Other financial expenses	-561.368	-276.935
	Pre-tax net profit or loss	-2.327.046		-3.424.201
4 Tax on net profit or loss for the year	406.781		438.072
	Net profit or loss for the year	-1.920.265		-2.986.129
	Proposed distribution of net profit:
	Allocated from retained earnings	-1.920.265	-2.986.129
	Total allocations and transfers	-1.920.265		-2.986.129

PHOTOCAT A/S · Annual report 2023

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