XXXXX ANNUAL REPORT 2023 / Page 1

ANNUAL REPORT 2024

XXXXX ANNUAL REPORT 2023 / Page 2

Asetek is a developer and manufacturer of high-quality gaminghardware. Founded in 2000, Asetek established its innovaveposion as the leading OEM developer and producer of the all-in-one liquid cooler for major PC & Enthusiast gaming brands.In 2021, Asetek introduced its line of products for next levelimmersive SimSports gaming experiences. Asetek is headquar-tered in Denmark and has operaons in China and Malaysia witha total of 114 employees. In 2024 Asetek recorded revenue of$52.5 million.

Asetek A/SVising address: Skjoldet 20DK-9230 Svenstrup JDenmarkEmail: investor.relaons@asetek.comwww.asetek.comCVR number: 3488 0522

Annual report for the nancial year 1 January to 31 December 2024. This annual report is approved by the Board of Directors as of March 7, 2025. The Board will submit this report for approval atthe Annual General Meeng on April 28, 2025. This annual report contains prospecve informaon based on Asetek’s current expectaons. This informaon is by nature uncertain and associatedwith risk. Even if company management considers expectaons based on such prospecve informaon to be reasonable, no guarantee can be given that these expectaons will prove to be cor-rect. Consequently, actual future results may vary signicantly compared with what is set out in the prospecve informaon, for reasons including changed condions in respect of the economy,market and compeon, changes in legal requirements and other polical measures, exchange rate variaons and other factors. Read more about the risks in the chapter on ‘Risk management’on pages 30–33 and in note 3 on page 46 ‘Risk management and debt’ in the nancial statements.

XXXXX ANNUAL REPORT 2023 / Page 3

Asetek in brief42024 in brief6Comments from CEO7Asetek as an investment9Strategic framework10Business model11Business segments13Liquid cooling14SimSports16Share and shareholders19Management report 23Corporate governance 25Risk management 30Corporate social responsibility 33Five year summary 34

Consolidated statement of comprehensive income36Consolidated balance sheet37Consolidated statement of changes in equity38Consolidated cash ow statement39Notes40Comprehensive income statement, parent company63Balance sheet, parent company64Statement of changes in equity, parent company65Statement of cash ows, parent company66Notes, parent company67Management statement72Independent auditor’s reports73Denions of raos and metrics79

CONTENT

ASETEK IN BRIEF ANNUAL REPORT 2024 / Page 4

FOUNDED ON INNOVATION. DRIVEN BY EXCELLENCE

Asetek has been an innovave force in the global liquid cooling manufacturing industry for more than25 years. In 2021 we introduced products for SimSports gaming. Asetek is headquartered in Denmark andhas operaons in China and Taiwan with a total of 114 employees. The Asetek share is listed on NasdaqCopenhagen. In 2024 the company recorded revenue of 52.5 million USD.Who we areWe are a high-tech company with a long history in mechatronic innovaon, focusing on gaming hardware.Since our foundaon we have disrupted the PC cooling market, seng new standards for performance andeciency. In 2021, we connued to leverage our extensive capabilies with soware, hardware and mechanicsand entered into the world of sim racing as Asetek SimSports?. We are a diverse and agile organizaon locatedclose to some key electronic manufacturing hubs in South-East Asia.What we doAsetek is a developer and manufacturer of high-quality gaming hardware. Since 2000, we design, manufac-ture, and sell high-quality liquid cooling soluons to most major PC and Enthusiast gaming brands. In 2021,we introduced our line of products for next-level immersive SimSports gaming experiences, oering everysim racer in the world the possibility to push limits and redene what’s possible.

Why we do it

With our market-leading and high-quality product oering our goal is to meet our clients? requirements forperformance, design and longer product lifecycles. Our product development centers around our customers’needs and reect an innovave engineering approach combined with superior performance. The Asetekbrand name has become synonymous with high product quality in all categories, which is conrmed by greatreviews and feedback from gamers and hardware enthusiasts around the world. We are in business to pushlimits and redene what’s possible.

GROSS PROFIT 2024

$21.9million

REVENUE 2024$52.5

million

15.8%

of revenue invested

in research anddevelopment in 2024

2024202320222021

79.8

50.6

76.3

52.5

Revenue per year, $ million

Asetek is a high-tech companywith a long history in mechatronicinnovaon, focusing on gaminghardware

“

ASETEK IN BRIEF ANNUAL REPORT 2024 / Page 5

KEY CONCEPTS FOR UNDERSTANDING ASETEK

CUSTOMERS – a global customer base

We design, manufacture, and sell high-performancegaming hardware that delivers next-level immersivegaming experiences. Our products power someof the world’s leading PC and enthusiast gamingbrands, including three of the ve largest PC man-ufacturers. Since 2021, we have been pushing theboundaries of sim racing, oering every sim racerthe opportunity to redene what’s possible with ourcung-edge SimSports product lines.

REACH – well-balanced and global

We have a longstanding local presence in some keyelectronic manufacturing hubs in South-East Asiaand our headquarter is in Aalborg, north Jutland,Denmark. We have a global plaorm with a solidsupply chain creang long-term value for all stake-holders.

PEOPLE – an internaonal organizaon

We believe that a diverse workforce and an inclusiveworkplace is a prerequisite for staying compeve,now and in the future. Our highly skilled employeesare all sharing the common purpose of challengingindustry standards driven by innovaon and opera-onal excellence.

INNOVATION – we are a high-tech companyAsetek is a developer and manufacturer ofhigh-quality gaming hardware. Our journey beganalmost 25 years ago when we disrupted the PC cool-ing market with our groundbreaking all-in-one liquidcooler, seng new standards for performance andeciency. In 2021, we connued to leverage ourextensive capabilies with soware, hardware andmechanics and entered into the world of sim racingas Asetek SimSports?. Our goal is to transform thesim racing scene, pushing limits and redeningwhat’s possible.

HISTORY – founded on innovaonOur history is rooted in innovaon that solved akey challenge of performance limitaons caused bycomputer processors running hot. This innovaon isthe foundaon that took Asetek to a world-leadingmarket posion within liquid cooling. Since 2021 weare on a mission to become market-leader in therapidly growing market for sim hardware.

2024 IN BRIEF ANNUAL REPORT 2024 / Page 6

KEY MILESTONES AND EVENTS 2024

Despite strong growth in the SimSports segment,the relavely larger Liquid Cooling segmentexperienced declining revenue in 2024. During theyear, Asetek also delisted its shares from the OsloStock Exchange and is now solely listed on NasdaqCopenhagen. The year concluded with a decisionof a capital increase, enabling connued expan-sion in the SimSports segment.

New Liquid Cooling products

launched during 2024

New SimSports products

launched during 2024In October, Asetek entered intoa license agreement with Xbox.The Designed for Xbox licenseagreement enables Asetek toexpand into the global consolemarket with existing and futuresim racing products, makingthe company’s acclaimed simracing products available tomillions of gamers worldwide.

In October, Asetek appointed Maja Sand-Grimnitzas VP Brand and Digital and Henrik Lindskou-Mour-itsen as VP Global Sales, with the aim of strength-ening the company’s commercial focus within itsleadership team.In December, it was announced that 219,925,366new shares were subscribed for in the rights issueat a subscripon price of DKK 0.40 per share, corre-sponding to gross proceeds of DKK 88 million.

In March, Asetek’s share was delisted from the OsloStock Exchange and has since been listed exclusivelyon Nasdaq Copenhagen.

2023202220212020

72.7

79.8

50.6

76.3

Revenue per year, $ millionOwner type distribuon

Q4Q3Q2Q1

12.2

12.7

12,2

15.4

Revenue per quarter, $ million

Q4Q3Q2Q1

0.0

0.2

-0.5

0,4

Adjusted EBITDA per quarter, $ million

Volume per market

Foreign ownership

Private Individuals 20.7%Fund company 15.5%Other 13.5%Pension & Insurance 13.2%Investment & PE 1.6%Treasury Shares 1.3%Unknown owner type 34.3%

Aquis 0.7%Cboe Global Markets 11.6%Euronext 43.6%ITG 0.2%LSE Group 1.8%Nasdaq 42.1%Sigma-X 0.04%

Foreign ownership 42.5%Danish ownership 54.5%Norwegian ownership 3.0%

2023202220212020

72.7

79.8

50.6

76.3

Revenue per year, $ millionOwner type distribuon

Q4Q3Q2Q1

12.2

12.7

12,2

15.4

Revenue per quarter, $ million

Q4Q3Q2Q1

0.0

0.2

-0.5

0,4

Adjusted EBITDA per quarter, $ million

In September, the new headquarters and R&Dcenter in Svenstrup, near Aalborg, were completed.

COMMENTS FROM CEO ANNUAL REPORT 2024 / Page 7

A TURNAROUND YEAR

Just a few weeks into the new year, Asetek celebrat-ed its 25-year anniversary. It is remarkable to thinkthat an idea conceived in a university dorm roomand a prototype built in a garage has led to wherewe are today. Summing it all up, it comes downto connuous innovaon and a team of talented,dedicated individuals working together to deliverproducts that make a dierence by enabling beergaming experiences.While Asetek have delivered material growthand value creaon since incepon, the past 25years have included both ups and downs. There isno denying that 2024 also was a mixed bag, withan unexpected and rapid contracon in our LiquidCooling segment, but also strong growth for theSimSports business.

Against the challenging Liquid Cooling backdrop,management and the board took decisive aconsto cut costs, strengthen commercial managementand ulmately raise capital to maintain a strongfoundaon for delivering future value creaonthrough our market leading liquid cooling and simracing products.Following the turnaround measures, 2025 willlikely be a transional year before growth resumesin earnest in 2026. This is supported by ongoingcustomer dialogues and our plan to expand the ad-dressable markets across both business segments,including the launch of a high-quality sim racingproduct line for the console-based mass market.

Looking back, 2024 was a year of signicant change – challenging at mes, but ulmately neces-sary to strengthen our foundaon for the future. We took decisive steps to secure the long-termgrowth and development of our business.

“We took decisivesteps to secure thelong-term growth anddevelopment of ourbusiness.”Plaorm for protable growth

In late 2024, Asetek executed a rights issue to en-sure the connued SimSports scale-up as cash owfrom the protable Liquid Cooling business fell shortof expectaons. While we did not raise the full tar-get amount, the new liquidity provides exibility toadjust and opmize investments. We are condentin our ability to grow the sim racing business. Askingshareholders for capital aer a challenging year wasfar from ideal, and trust shown by both exisng andnew shareholders is highly appreciated.

During the year, we also reduced our workforce,primarily in Denmark, and closed the U.S. operaon.It is always sad to part ways with colleagues, someof whom have been with us for many years. Howev-er, the cost-savings were necessary to create a moreecient organizaon and structure. The U.S. closurealso reects that a local presence has become lessrelevant as our customers’ key decision-makers nowprimarily based in Asia.

We recognize that increased global geopolical ten-sions are creang uncertaines regarding new tarisand potenal global supply chain disturbances. Weare monitoring the situaon and are prepared toaddress any future challenges with a combinaon ofmeasures.

In September 2024, the new headquartersand R&D center was completed aer a four-yearprocess. With a new base of operaons, strongerbalance sheet and leaner organizaon, we haveestablished a strong plaorm from which to executeour long-term growth strategy.

Liquid cooling – transion, thenprotable growth

For Liquid Cooling, our largest segment, we havealways emphasized the challenges of predicngrevenue. In 2024, this was especially evident as wefaced a rapid and unexpected decrease in revenue.This was due to a combinaon of high customer in-ventories and two of our largest customers movingto dual sourcing to strengthen their supply chains.While this is a logical step – just as we maintain dualsourcing in our own supply chain – it nonethelesshas a signicant short-term negave impact.

COMMENTS FROM CEO ANNUAL REPORT 2024 / Page 8

However, there were also posive developments.When excluding the two above-menoned custom-ers, all our other customers grew year-over-year.Also, at the end of 2024, Asetek secured a newcustomer – one of the world’s largest PC manu-facturers – which also required a second source,this me to our benet. Out of the ve biggest PCmanufacturers globally, three are now using AsetekLiquid Cooling products.In 2024, Asetek introduced the strategy of com-plemenng our high-end products with a value-ori-ented oering to expand our addressable liquidcooling market. This iniave will gradually gaintracon from 2026. Furthermore, we are enhancingthe commercial capabilies of the organizaon, ap-plying a sharper commercial focus in all aspects ofdecision-making and integrang even deeper withour customers. As part of this, in 2024, the com-mercial experse within the execuve managementteam was strengthened.

We have a clear plan for resuming growth inLiquid Cooling from 2026, as communicated inconnecon with the rights issue. For 2025, revenue

25 years of innovaon – with more to comeWe are condent that Asetek is going into 2025with a stronger foundaon, and we have, over me,delivered strong growth and built a sizeable globalbusiness. We also know that it does not alwaysmove in straight line.

As result of our innovaon drive and focus on ex-cellence, far more than 10 million end users world-wide have bought and used our products which wehave conceptualized, designed, manufactured andsold. Our innovave products, both in liquid coolingand sim racing, have won several global awards.With that in mind, I would like to extend a spe-cial thank you to all my colleagues, our customers,our shareholders, our partners and suppliers. It hasbeen a challenging year, but we now look forwardwith condence to the next 25 years.André S. Eriksen,Founder and CEO

is expected to remain largely at the same level asin 2024. The business will remain protable, as ithas been for many years. Asetek has a track recordof quickly adapng to changing market condionsand will do so again this me. We are the technol-ogy leader with a strong posion in the premiumsegment, and as long as we connue to innovate,Asetek’s products and services will connue to be indemand by both new and exisng customers.SimSports – expanding our sim racinguniverse

For our SimSports business, 2024 was anotherposive year with mulple product launches andstrong revenue growth. In less than three years,Asetek has become a premium player in the growingsim racing market, going from zero to $10 million ofannual revenue. We now oer several product linesdesigned as an open ecosystem, which have re-ceived highly posive feedback from end-users andreviewers. Addionally, during the year, we enteredinto an agreement with Xbox to launch productswith console support.

Next for us, is the compleon and launch of a prod-uct line targeng the mass gaming market, followedby Asetek products with Xbox support. Both are setto launch in the second half of 2025, signicantlyexpanding the addressable market and are expectedto drive strong revenue growth in the coming years.

Having the best products is not enough. Beyonddelivering on the product roadmap, our focus in2025 will be on aracng top talent to strengthensales channels as well as building up the SimSportsbrand. A strategic priority is to ensure our productsare readily available in all relevant channels, wheth-er it is our own web shop, resellers or on plaormslike Amazon.

As we stated in December, we expect EBITDAimprovement compared to 2024, but we do notancipate the SimSports segment reaching prot-ability in 2025. This is according to plan as Asetekpurposefully move in the right direcon by opmiz-ing SimSports investments and creang a strongplaorm for a growing protable business.

ASETEK AS AN INVESTMENT ANNUAL REPORT 2024 / Page 9

FIVE REASONS TO INVEST IN ASETEK

2.

Leveraging a leading premiumsegment posionAsetek has a leading posion in thepremium segment of the gaming hard-ware market. Since 2000, we design,manufacture, and sell high-quality liquidcooling soluons to most major PC andEnthusiast gaming brands. In 2021,Asetek expanded its business into therapidly growing SimSports market forracing simulator gear. Asetek has earneda leading posion in the premium seg-ment of both the Liquid Cooling as wellas SimSports market. The leading marketposion combined with our strong brandname and high-quality products can beleveraged into increasing the address-able market. This is accomplished bytargeng the Liquid Cooling mid-marketsegment and launching a new SimSportsproduct line with strong value oeringtowards entry-level end-users, includingproducts with console compability.

3.

Strong innovaon capability supporngfuture growthConnuous product development iscrucial for maintaining and strength-ening compeveness in an industrythat is characterized by compeonand technological progress. Asetek isrenowned for being an innovave, high-tech and entrepreneurial company thatprovides products with very high quality.At Asetek, product development centersaround customers’ needs and reectsan innovave engineering approachcombined with superior performance.The company has two R&D centers – onein Denmark and one in China. In 2024,Asetek spent 15.8% of total revenue,or USD 8.3 million on R&D, securingconnued compeveness trough futurelaunches of world-class products.

4.

Protable Liquid Cooling businessprovides a foundaon for SimSportsgrowth strategyAsetek invented the all-in-one liquidcooler and has been solving thermalchallenges for 25 years. Our businesssegment Liquid Cooling has over thelast 10 years generated total revenuesexceeding $540 million with an averageadjusted EBITDA margin of 29%. Theprotable Liquid Cooling operaonprovides a nancial foundaon forthe growth strategy of the SimSportsbusiness. The strategic t and synergiesbetween the two segments are visibleand will act as a driver for future valuecreaon.

5.

Strong SimSports growth potenalIn 2024, revenue in the SimSportssegment increased by 24% comparedwith 2023. Growth in 2024 was mainlydriven by a combinaon of mulplenew products and a strong increase innew end-users and resellers globally.Gaming simulaon is a rapidly expand-ing segment of the gaming hardwaremarket, and the demand for gamingsimulaon is linked to the growth of theoverall hardware accessories market. Forthe coming three years, this market isprojected to show an annual growth rateof approximately 13.7%, reaching USD

115.3 billion by 2027.

1 Stasta (2024), Gaming Hardware, Gaming Acces-

sories – Worldwide

Asetek is well posioned to capitalize on the its compeve strengthsthrough innovaon, operaonal excellence and a leading posion as apremium supplier of high-quality gaming hardware.

1.

Large and growing addressable marketAsetek is strategically posioned in theexpanding gaming market. The risinginterest in gaming is driving the liquidcooling market, as high-performancePC hardware demands ecient coolingsoluons. Simultaneously, the growingdemand for high-performance gamingsetups is boosng the simulaon hard-ware market, as consumers seek morerealisc and compeve gameplay. Thedemand for liquid cooling soluons isto a large extent linked to the growth ofthe overall PC gaming hardware market(which, however, includes gaming lap-tops, which do not need liquid cooling).The overall PC gaming hardware marketis expected to show an annual growthrate of approximately 5.2%, reaching$69.0 billion by 2027.

1 Stasta (2024), Gaming Hardware, Gaming PCs and

Laptops – Worldwide/

OUR STRATEGIC FRAMEWORK ANNUAL REPORT 2024 / Page 10

ASETEK?S APPROACH TO VALUE CREATION

The strategic framework at Asetek consists of corevalues, goals, strategic focus areas and operaonalpriories. By adhering to our strategic framework,Asetek secures a strong plaorm for long-termsustainable growth.Core valuesThe core values at Asetek – innovaon and excel-lence – are rooted in our DNA and have been ourguidelines from the start. Asetek was founded 25years ago with the intenon of solving problems forour customers. Since then, we believe staying closeto our customers’ problems also means being closerto the soluon.

Goals

Looking ahead, Asetek has set both a medium-termgrowth ambion and short term nancial goals.Asetek has also commied to set sustainabilitygoals, which provides a pathway to reduce emis-sions in the future. At group level, the ambion isto achieve annual revenue exceeding $50 millionin both our Liquid Cooling and SimSports segmentsby the end of the medium-term period. Our marketin the Liquid Cooling segment is characterized bylow visibility and volale market dynamics meaningthat the growth between dierent years can varysubstanally. That is why we also publish annualnancial goals expressed as our guidance.

Asetek’s strategy is based on operaonal excellence, innovave product development, superior customerservice and expansion of the addressable market. In that way we will secure long-term sustainable organicgrowth. The goal is to be the leading brand in the markets in which we operate.

CORE VALUES

STRATEGIC FRAMEWORK AT ASETEK

InnovaonOperaonal excellenceCustomer centricity

GOALSMedium-termgrowth ambionShort-term nancial goals

Sustainability goals

STRATEGIC FOCUS AREAS

Strengthen Asetek’s

market posionEstablish new sales channels

Strengthening our

brand name

OPERATIONAL PRIORITIES

Liquid Cooling

Broadening addressable

market

SimSports

Introducing new

produts

Strategic focus areas

Asetek will connue to do what we are best at– developing and launching high-quality gaminghardware products as well as connue to developour customer service. At the same me, we plan toexpand our addressable market and increase ourmarkeng and brand building eorts. Addionally,we will expand the number of SimSports resellersand sales channels and compete for new OEM Liq-uid Cooling customers. All of these acons will driveorganic growth going forward.

Operaonal priories

Asetek is a well-established brand name in the pre-mium market segment. We are guided by a strongbelief that there are very good opportunies forgrowth by leveraging our current market posionand strong brand name.

In the short to medium term, our operaonalpriories are to focus on expanding our potenalmarket and revenues both within our Liquid coolingbusiness unit as well as within SimSports. This willbe accomplished by new product launches and byupdang the exisng product range, targeng thelow-end of the premium market. Doing this, we willstrengthen Asetek’s market posion in all productcategories and market segments we focus on.

OUR BUSINESS MODEL EXPLAINED ANNUAL REPORT 2024 / Page 11

A GLOBAL PLATFORM SUPPORTING GROWTH

Innovaon and product development

Product development is and always has been themain focus for Asetek. Since its incepon, the com-pany has successfully launched innovave productswith high quality. Asetek’s R&D team and technolo-gy lab are based in Aalborg, Denmark. These teamsare responsible for innovaon, concept and designof our products and also manage collaboraon withAsetek’s global customer base to dene require-ments and develop cung edge technology. Weconnuously try to keep our R&D teams close to thecustomers, which encourages faster, more respon-sive and eecve feedback for improvements to ourexisng product range as well as new developments.The Aalborg team works closely with the R&D teamin Xiamen, China, to idenfy the opmal sources forthe necessary components to fulll specic custom-er requirements.

Sourcing and produconAsetek’s manufacturing and logiscs teams inXiamen, China and Malaysia, evaluates and sourcescomponents and suppliers for the nished product tobe assembled, allowing us greater control over prod-uct quality. Our cooling soluons are assembled bythe Company’s principal contract manufacturer basedin Xiamen and Malaysia and since 2023, a likewisecontract manufacturer has been producing manyof our SimSports products in Xiamen and Malaysia.Asetek’s business model concentrates primarily on

Asetek’s leading posion is based mainly on the compeve strength that originatesfrom the company’s operaonal excellence in oering high-quality gaming hardwareproducts. During 25 years, Asetek has built up a wealth of experience that is uniqueamong companies in our industry and is recognized for premium quality.

having contractual relaonship with er-1 contractmanufacturers.A quality team is divided in two groups: one inDenmark and one in Xiamen. Their main focus is toconduct ongoing inspecons to ensure control overall aspects of quality and compliance with a growingnumber of regulated parameters.Logiscs and salesFinished products are primarily delivered directlyto customer hubs in China, with smaller quanesshipped directly to Europe and USA. Logiscs areoen outsourced, and except our own webshop forSimSports products, our partners handle deliveriesto end-users themselves.

Liquid coolers are sold through two channels.The main sales channel is a white-label approach,meaning products are sold as a standalone productto partners who are in turn selling it under their la-bel. Asetek’s liquid coolers are also sold to partnersusing it as a component to build a complete PC,which is then sold to end-users. SimSports productsare sold either directly to end-users through ourwebshop or via resellers, who distribute them bothonline and in physical stores.

OUR BUSINESS MODEL EXPLAINED ANNUAL REPORT 2024 / Page 12

Markeng and customer service

The sales, markeng and product managementteams, based principally in Denmark and Taiwan,oversee customer relaonships to facilitate commu-nicaon and development, ensuring that the devel-oped product meets or exceeds customer demands.Considering our history and DNA, Asetek isin many ways synonymous with innovave andhigh-quality liquid cooling soluons. As a conse-

quence, our markeng eorts mainly focus onleveraging this posion and building the AsetekSimSports brand name. The overall markeng strat-egy will benet both SimSports sales channels – cur-rently done through online reviews using inuencersand strategic partnerships as well as presence ontradeshows and other key events.Delighted customers are our best ambassadors, and

we know that they happily share their experienceand trust in us. Our dedicated markeng and salesteams are responsible for providing customer ser-vice and support, making it easier to establish closerrelaons to them. In the end, it is our customers thatcan tell us how we can provide a premium customer-centric experience.

Malaysia? Outsourcedmanufacturing? Quality

Taipei? Sales? Product management

Xiamen

? Product management

? R&D

? Sourcing

? Outsourced manufacturing

? Quality

? Order managementAalborg? E-commerce? Product management? R&D and prototyping? Sourcing? In-house manufacturing? Quality? Order management? Branding and outboundmarkeng? Finance? Management

Asetek oces Asetek representaon OEM HQ SimSports resellers

A LEADING GAMING HARDWARE OFFERING ANNUAL REPORT 2024 / Page 13

LIQUID COOLING AND SIMSPORTS –AN ATTRACTIVE COMBINATION

Our Liquid Cooling business has over the last 10 years generated total revenues exceeding USD 540million with an average annual adjusted EBITDA margin of 29%. This protable business unit providesa nancial foundaon for the growth strategy of our other key business unit, SimSports.The protable Liquid Cooling busniss enables us toexecute on the growth opportunies in SimSports.It also oers a strong strategic t, enabling synergiesbetween the two business segments and drivingfuture value creaon.

White-label and own webshopmain sales channels

Liquid coolers are sold through two channels. Themain sales channel is a white-label approach, whereOEM partners purchase and resell as standaloneproducts under their own label. We also sell liquidcoolers to partners who incorporate them as a keycomponent to build a complete PC, which is thensold to end-users.Our Simsports products are sold via a selec-ve distribuon network with our primary saleschannels being our own webshop where productsare sold globally, directly to end-users (DtC), andresellers (B2B2C) oering our products to end-usersthrough online stores and select physical stores.Products are also sold via select distribuon part-ners operang specic geographies.

End-usersEnd-users

White-labelapproach to partners

Direct-to-consumer (DtC)? Own webshop

?Amazon USOEM partners

B2B2C? Resellers? Distributors

Liquid cooling and SimSports sales channels

LIQUIDCOOLING

ASETEKSIMSPORTS

Clear and aracve synergiesAsetek fosters collaboraon and integraon betweenthe Liquid Cooling segment and SimSports segmentto drive synergies and enhance overall performance.Essenally, three key areas have been idenedwhere clear synergies create long-term value.

1) Asetek benets from the exibility and experse

of its engineering teams, who frequently workacross both segments. This cross-funconalapproach enables Asetek to eciently develophigh-quality Liquid cooling and SimSportsproducts, accelerang innovaon and productdevelopment.

2) By sharing sourcing and manufacturing resources

across both segments, Asetek is able tostreamline operaons, enhancing cost eciencyand product quality.

3) By leveraging cross-selling opportunies, Asetek

can introduce SimSports Products to exisngLiquid Cooling customers, and vice versa,expanding the customer base and increasingmarket reach. Synergies include the potenalto increase sales in the liquid cooler segmentthrough new sales channels opened by SimSports,as well as bundle SimSports products with liquidcoolers to resellers.

LIQUID COOLING ANNUAL REPORT 2024 / Page 14

MARKET LEADER WITHIN PREMIUMLIQUID COOLING SOLUTIONS

Asetek is one of the global leaders in premium liquidcooling soluons for computer hardware enthusi-asts and gamers. Asetek’s Gaming and Enthusiastproducts are all-in-one coolers that provide reliable,maintenance-free liquid cooling to gaming andhigh-performance PC customers as well as eSportsathletes to enjoy top-er performance from theirequipment.The two most common cooling methods tocool computer hardware are air cooling and liquidcooling. Air cooling is the most widespread, thoughit typically oers lower performance. Liquid cooling,on the other hand, provides superior cooling e-ciency, especially for high-performance hardware,but it tends to be more expensive than air cooling.Beyond funconality, liquid coolers have evolvedinto branding and design tools, incorporangfeatures like LED lighng and customisable displays,appealing to enthusiasts and gamers who valueaesthecs as part of their setup.

One of the key factors in the performance of agaming computer is the cooling system, which helpsprevent overheang and maintain opmal perfor-mance. Liquid cooling systems have gained popular-ity among gamers due to their ability to eecvelydissipate heat and allow for overclocking of the CPU.Overclocking refers to the process of increasing theclock speed of the CPU beyond its factory-set limits,

Asetek invented the all-in-one liquid cooler and has been solving thermal challenges ever since.Since the beginning, liquid coolers from Asetek have delivered high performance while providingsuperior reliability.

What is liquid cooling?

Liquid cooling is a system used to lower thetemperature of a computer or other elec-tronic device by circulang a coolant throughits internal components. The coolant, whichis usually water or a water-based soluon,absorbs heat from the PC and carries it away,keeping the PC cooler than if it were relyingon air cooling alone.

Why is liquid cooling beerthan air cooling?

Air cooling systems use a fan and heat sink tomove heat away from the CPU. A liquid cool-ing system uses a water pump and radiatorto move heat away from the CPU. The mainadvantages of liquid cooling comparedto air cooling are:

1. Liquid cooling is more ecient at removing

heat from components than air cooling

2. Liquid cooling is not aected by dust build-

up or other air ow obstrucons

3. Liquid cooling is typically quieter than the

fans used for air cooling

LIQUID COOLING

REVENUE 2024$42.8million

which can signicantly improve the performance ofthe computer. However, it also generates addionalheat, making an eecve cooling system essenal.Components like CPUs, GPUs, memory modules,chipsets and hard drives are parcularly vulnerableto overheang, which can lead to temporary mal-funcons or permanent failure.

Liquid cooling systems, which use a closed loopof uid to transfer heat away from the CPU, can ef-fecvely dissipate this heat and allow for sustainedoverclocking without the risk of overheang ordamaging the hardware.

LIQUID COOLING AVERAGEANNUAL ADJUSTED EBITDAMARGIN, LAST 10 YEARS

29%

LIQUID COOLING ANNUAL REPORT 2024 / Page 15

MATURE MARKET WITH STABLE GROWTH

Historically, the compeve landscape has beendivided between low-end, low-quality playersand high-end, premium brands. Consumers whopreferred premium products did not typicallyconsider low-end alternaves, resulng in limitedcompeon within the high-end segment. Demandfor high-quality products has been solid, and thecompeve environment has remained stable.

Changing market dynamicsBased on market observaons and customer dialoguein 2024, it has become evident that the market dy-namics have shied. The quality of lower-end marketproducts has been more sought aer as consumerpreferences have shied towards more aordablegaming PCs, which in turn increases the demand forsomewhat cheaper liquid cooling opons. As a result,end-users are now priorising value in the mid-endsegment over paying premium prices for high-endmodels. This shi has made cost-eecveness andvalue become crical success factors.

The liquid cooling market is relavely mature and stable, extending to the broader computerhardware ecosystem, where both manufacturers and consumers benet from the reliabilityand consistent performance of the current technology. As a result, the risk of sudden techno-logical shis aecng the market is low.

In response, Asetek is expanding its LIquid Coolingproduct range to include products for the mid-rangemarket, aiming to capture a broader consumer basein an increasingly compeve environment. This shiposions Asetek to meet the evolving needs of bothpremium and mid-market consumers.

The long-term growth prospects are solid anddemand for high-performance hardware like liquidcooling soluons is fuelled by the increasing globaldemand for gaming-related products, advance-ments in gaming technology, and the rise of com-peve gaming (eSports). Another factor expectedto contribute to the demand for liquid coolingsoluons is PC upgrade cycles. The advancement ofchip technology, including the introducon of newCPUs and GPUs, oen occurs in cycles and createsa demand for PC upgrades. As such, the demandfor liquid cooling soluons is to a large extent linkedto the growth of the overall PC gaming hardwaremarket (which, however, includes gaming laptops,which do not need liquid cooling). The overall PCgaming hardware market is expected to show anannual growth rate of approximately 5.2%, reachingUSD 69.0 billion by 2027.

1) Stasta (2024), Gaming Hardware, Gaming PCs and Laptops – Worldwide

SIMSPORTS ANNUAL REPORT 2024 / Page 16

SIMSPORTS ANNUAL REPORT 2024 / Page 16

ASETEK SIMSPORTS – PRODUCTS FOR EVERYTYPE OF SIM RACER

From the start in 2021, Asetek has posioned theSimSports product oering in the high-end of themarket, targeng compeve and commied gam-ers as well as racing and automobile enthusiasts.Asetek’s mission is to make high-quality sim racingproducts available for everyone, which is why wehave three dierent product lines in the premi-um segment, giving end-users the opportunity toassemble the preferred sim racing setup.The La Prima product line is suited for end-users en-tering the high-end simracing space seeking to taketheir racing to the next level, oering the possibilityto upgrade and adjust to t all needs. The Forteproduct Line is the mid-er oering, for end-usersthat want to maintain high quality in build anddesign combined with sublime performance and

IIn 2021, Asetek introduced its rst sim racing products. Since then, over the past three years, AsetekSimSports has established itself in the market with three fully launched product lines, reaching an annualrevenue of $10 million in 2024 and showing strong potenal for connued growth in both revenue andprots.

SIMSPORTSREVENUE 2024$9.6million

user experience. Invictais our premium productline, oering an immersive and authenc sim racingexperience.

Asetek’s product strategy is to expand its oeringto cover mulple price ranges, including introducingmid-segment console products, reaching a broadersegment of the sim-racing market. The compevelandscape for simracing is characterised by brandsthat oen look and claim the same. As part of itsmarkeng, Asetek is focusing on its combinaon ofhaving a real racing background and a strong legacyin gaming, which dierenates it from competorsby providing authencity, driving technological inno-vaon, enhancing brand credibility, and leveragingcross-industry synergies. Through this approach,Asetek aims to establish itself as a key player in themarket, leveraging its experse in both realms tooer a more integrated and authenc simracingexperience.Strong growth opportunity

The gaming simulaon market is a growing industry.The market is driven by the increasing demand forhigh-quality, immersive gaming experiences thatallow gamers to feel as though they are parcipangin real-life events, and the improvements in graphicsand processing power have enhanced the realismand immersion of simulaon games, aracng a

1) Newzoo - Sim Racing TAM Analysis Report. (a report commissioned by Asetek). Market scope includes 37 markets

(excluding China and India) and lifeme players are measured across PS4, PS5, Xbox One, Xbox Series, and Steam.

broader audience. In the past three years, the trendin the major racing gaming segment has generallyshown growth in monthly acve users, and the mar-ket has further generated spikes in the segment’sperformance when new gaming tles are released.

The gaming simulaon market encompassesmajor racing games like Gran Turismo, F1, BeamNG.drive and Forza Motorsport. Looking at the top 25major racing games, the market boasts 60.4 millionlifeme players as of April 2024, with a robustengagement and an average of 5.3 million monthly

acve users (MAUs) over the past twelve monthsfrom May 2023 to April 2024, reecng strongcommunity commitment.

Increased interest in racing

The signicant growth in demand for simracingsoluons is also driven by the increasing popularityof real-life motorsports. Events like Formula 1 haveexpanded into a mass market audience, further fue-led by the inuence of media such as Nelix seriesand the release of new racing tles.

SIMSPORTS ANNUAL REPORT 2024 / Page 17

HIGH QUALITY SIM RACING GEARAsetek oers pedals, wheelbases, and steeringwheels across three product lines, each oering theuser disnct categories of hardware with varyingfeatures, authencity, and price.

The La Prima product line is suited for end-users en-tering the high-end simracing space seeking to taketheir racing to the next level, oering the possibilityto upgrade and adjust to t all needs.

The Forte product Line is a high-quality mid-eroering, for end-users that want to maintain highquality in build and design combined with sublimeperformance and user experience.

Invicta is the premium product line, oeringan immersive and authenc sim racing experience.

PedalsWheelbaseSteering wheel

SIMSPORTS ANNUAL REPORT 2024 / Page 18

THIS IS SIMULATION RACING

PCA high-performancePC operates the sim-ulaon soware andinterfaces with all thesimulator’s devices

Rig and seatProvides a solid andstable plaorm for allthe devices – wheel-base, pedals, display –as well as the driver

PedalsAllow for preciseand realisc braking,acceleraon and clutchcontrol

WheelbaseA direct drive motordelivers strong and re-alisc force feedback,allowing the driver tofeel the road and thecar’s behavior

Steering wheelOperate the car using but-tons, switches, and rotarycontrols while receivingvisual feedback throughLEDs and a screen. Easilyswappable with a QuickRelease (QR) connecon

DisplaysProvides an immer-sive and realisc eldof view

AccessoriesBuon boxes andother accessoriesenhance realism andimmersion, oeringaddional funconal-ity and customizaonopons

What is sim racing?Simulator games enable players to experi-ence situaons and scenarios in great detailsand recreate real-world situaons. Sim racing(simulaon racing) is basically motorsport ina virtual environment. This means that simracers are driving virtual cars on comput-er-generated tracks. The sim racing gamesare designed to mimic the feeling of drivinga real car as closely as possible, and theracing is done using specialized soware andhardware. The hardware sim racers use playsa crucial role to enhance the realism andoverall driving experience.

Learn all sim racing terms

There are a lot of technical terms in sim rac-ing, and motorsports in general. At Asetek’swebpage, you will nd a glossary where youare introduced to the most important racingterms, in order to beer understand both simracing and motorsports.hps://www.asetek.com/blogs/glossa-ry-sim-racing-and-motorsports-terms/

ASETEK SHARE AND INVESTOR RELATIONS ANNUAL REPORT 2024 / Page 19

PRIMARY LISTING ON NASDAQ COPENHAGENAND COMPLETED RIGHTS ISSUE

Primary lisng on Nasdaq CopenhagenSince the company’s IPO on February 11, 2013,the Asetek share had been listed on the OsloStock Exchange. On May 17, 2023, the share wasdual-listed on Nasdaq and Asetek announcedthe intenon to delist its shares from Oslo StockExchange. In December 2023, an extraordinarygeneral meeng approved the de-lisng of Asetek’sshares, followed by an approval from Oslo StockExchange in the same month. As a result of bothapprovals, Asetek’s shares were de-listed from theOslo Stock Exchange eecve March 26, 2024, andhave since had a primary lisng solely on NasdaqCopenhagen.Rights issueOn November 7, 2024, Asetek announced itsintenon to carry out a rights issue with preempverights for exisng shareholders. The purpose was toincrease nancial exibility and enable connuedinvestments in the SimSports segment to capitalizeon future growth opportunies. Each shareholdercould subscribe for three new shares for everyshare they held on the record date, at a price of DKK

0.40 per share. The rights issue was completed on

January 6, 2025, and raised gross proceeds of DKK88 million for Asetek.

In 2024, Asetek’s shares were delisted from the Oslo Stock Exchange (Oslo B?rs) and primarily listed onNasdaq Copenhagen. At the end of the year, a rights issue with preferenal rights for exisng sharehold-ers was iniated, which was completed on January 6, 2025. The rights issue raised gross proceeds of DKK88 million for Asetek.

Share price development and turnover

The Asetek share trades under the symbol ASTK onNasdaq Copenhagen and the share’s ISIN code isDK0060477263 (Technology: Computer Hardware),segment Small Cap. At the close of 2024, Asetek’sshare price was DKK 0.479. This is equivalent toa market capitalizaon of DKK 47.1 million. Thehighest price quoted during the nancial year of2024 was DKK 3.68 (March 1) and the lowest pricewas DKK 0.45 (December 27). In 2024, the totalturnover of Asetek shares traded on all marketplac-es amounted to 131.2 million shares, correspond-ing to 133 percent of the total number of shares atDecember 31, 2024.

Share capital

Aer registraon of the share capital increasefollowing the rights issue, the share capital in Asetekamounted to DKK 31,823,925.80 divided into318,239,258 shares with a nominal value of DKK

0.10. All shares are of the same class and the same

share of capital and earnings. Each share entlesthe holder to one vote at the General Meeng andeach shareholder is entled to vote for all sharesheld by the shareholder.

Ownership structure

Aer the rights issue was registered on January 6,2025, the ten largest shareholders controlled 41.9percent of the capital and votes. Board members

and execuve management held a total of 3.2percent of the capital and votes. Other members ofmanagement held an addional 0.83 percent of thecapital and votes. The total number of shareholdersin Asetek was 7,240 at January 6, 2025.Concentraon(Jan 6, 2025)Shares

Capitaland votesThe 10 largestowners144,176,87945.31%The 20 largestowners165,351,40551.99%The 30 largestowners177,318,36755.72%

Share repurschases

In 2024, no shares were repurchased. As ofDecember 31, 2024, Asetek holds a total of1,256,115 treasury shares.Investor Relaons (IR) at Asetek

Aseteks’ goal is that the company should be valuedon the basis of relevant, correct and currentinformaon. This involves a clear nancial commu-nicaon strategy, reliable informaon and regularcontact with various stakeholders in the nancialmarkets. The management and Board of Directorsof Asetek have a clear ambion to keep an ongoingdialog with the media and the capital market. Thistakes place through presentaons of quarterly

reports and meengs with analysts, investors andthe media at various events, seminars, one-on-onemeengs and during visits to Asetek oces. Inter-ested pares can download presentaon materialsand listen to audio recordings from presentaons ofquarterly reports on Asetek’s website.

Financial informaon regarding Asetek is avail-able to download from hps://ir.asetek.com/over-view/default.aspx. This includes nancial reports,press releases and other presentaons. The compa-ny’s press releases are distributed via Cision and arealso available on the company’s website.

Financial calendar 2025April 28, 2025Q1 2025 nancial reportApril 28, 2025Annual General MeengAugust 19, 2025Q2 2025 nancial reportNovember 04, 2025Q3 2025 nancial reportMarch 16, 2026Q4 and annual 2025

nancial report

Shareholder contact

Per Anders Nyman, Head of Investor RelaonsMobile: +45 2566 6869investor.relaons@asetek.com

ASETEK SHARE AND SHAREHOLDERS ANNUAL REPORT 2024 / Page 20

Shareholding distribuonHolding sizeSharesCapital and votes1 –1,000966,1680.3%1,001–5,0004,079,9331.3%5,001–10,0004,361,4481.4%10,001–100,00033,634,42210.6%100,001–500,00039,128,14512.3%500,001–1,000,00018,617,3285.8%1,000,001–5,000,00053,405,17216.8%5,000,001–10,000,00040,977,76312.9%10,000,001– 89,354,63228.0%Unknown holding size33,714,24710.6%Total318,239,258100.0% Source: Q4 Inc. Data as of January 6, 2025

Owner type distribuon

Volume per market

Geographic distribuon

Private Individuals 32.3%Fund and insurance companies 17.9%Private investment companies 15.3%State pension fund 13.4%Unknown owner type 21.1%

Nasdaq Copenhagen 96.5%Oslo Stock Exchange 3.2%Deutsche Boerse AG 0.1%Boerse-Stugart 0.1%London Stock Exchange 0.1%

Denmark 85.2%Other countries 7.2%United Kingdom 3.0%Sweden 2.6%Germany 1.1%Switzerland 0.9%

Source: Q4 Inc. Data as of January 6, 2025

Source: Q4 Inc.

Source: Q4 Inc. Data as of January 6, 2025

Source: Q4 Inc. Data as of January 6, 2025

0,00,51,01,52,02,53,03,54,0

Jan 24

DKK

Feb24Mar24Apr24May24Jun24Jul24Aug24Sep24Oct24Nov24Dec24

Share price development 2024

XXXXX ANNUAL REPORT 2024 / Page 22

MANAGEMENT REPORTManagement report 23Corporate Governance 25Risk management 30Corporate Social Responsibility 33Five year summary 34

MANAGEMENT REPORT

PERFORMANCE IN 2024Profit and lossTotal revenue for 2024 was $52.5 million, represent-ing a decrease of 31% from 2023 ($76.3 million).Sealed loop cooling unit shipments for 2024 totaled

0.8 million compared with 1.17 million in 2023.

Revenue and unit shipment changes reflect fewershipments of liquid cooling products which werenegatively impacted by a decrease in the macrolevel market for gaming hardware and a shift towardcheaper alternatives. These effects were partly off-set by an increase in shipments of SimSports prod-

ucts. Average Selling Prices (ASP) for liquid coolers in2024 decreased to $55.76 from $59.29 in 2023.Gross margin was 41.8% in 2024 compared with

45.5% in 2023. The change reflects a change in

product mix and the recent price sensitivity in thegaming hardware market. In 2024, total operatingexpense increased to $41.2 million, from $25.3million in 2023. Operating expense in 2024 includeda required non-cash impairment charge of $13.8million as a consequence of an assessed impairmentwithin the cash generating units. Excluding this one-time charge, operating expense in 2024 increased8% mainly due to marketing and operations costs

associated with investment in the SimSports busi-ness.Personnel expense increased 2% in 2024 com-pared with 2023. Legal cost incurred associatedwith intellectual property settlements, defense ofexisting IP and securing new IP was $0.2 million,level with 2023. Share-based compensation costassociated with warrants and options issued toemployees was $0.3 million in 2024 ($0.5 millionin 2023).Adjusted EBITDA was $0.3 million in 2024, com-pared with $15.9 million in 2023. Adjusted EBITDAin 2024 represents operating loss of $19.2 million,

plus depreciation of $5.4 million, plus share-basedcompensation of $0.3 million, plus the special itemnon-cash impairment charge of $13.8 million.Foreign currency transactions in 2024 resultedin a $1.4 million gain ($1.0 million loss in 2023).Income tax expense was $5.7 million in 2024,principally due to impairment charges of $4.2million to deferred tax assets related to uncertaintyregarding their future recoverability. Income taxexpense was $2.5 million in 2023. Income tax ex-pense in 2024 includes $0.9 million associated withthe U.S. Global Intangible Low-Taxed Income (GILTI)inclusion, which requires U.S. companies to report

MANAGEMENT REPORT ASETEK Annual report 2024 / Page 23

foreign corporation intangible income that exceeds10% return on foreign invested assets ($0.8 millioneffect in 2023).Asetek had a total comprehensive loss of $25.3million for 2024, compared with total comprehen-sive income of $6.7 million in 2023. Comprehensiveloss included a negative $1.3 million translationadjustment in 2024 (positive $0.7 million in 2023).

Balance sheetAsetek’s total assets at December 31, 2024 were$79.4 million, compared with $102.7 million atthe end of 2023. The principal factors affectingthe change were as follows: Property, plant andequipment decreased by $8.9 million, principally asa result of a required non-cash impairment chargeof $13.8 million as a consequence of an assessedimpairment within the cash generating units.Deferred tax assets decreased by $5.7 million due touncertainties regarding their future recoverability.Cash and equivalents decreased by $5.8 million dueto cash requirements of the business. Inventoriesdecreased by $2.4 million associated with thereduced operating volumes.

Total liabilities increased by $1.6 million in2024, due to offsetting factors. Short-term debtdecreased by $12.9 million and long-term debtincreased by $16.6 million principally as a resultof net $5.7 million in funds drawn to completeconstruction of a new headquarters building. Uponcompletion of construction in 2024, $19.3 millionof debt was refinanced to a longer term structure,maturing in March 2028. This increase in liabilitieswas offset by exchange rate effects of a strongerU.S. dollar, lower accrued employee compensationassociated with fewer employees, and reducedtransaction volumes in accounts payable.

Working capital (current assets minus currentliabilities) totaled $4.4 million at December 31,

2024 (negative $3.2 million in 2023). The changeprincipally reflects the refinancing of short-termdebt in 2024.Statement of cash flowsNet cash provided by operating activities was $1.2million in 2024 ($16.3 million provided in 2023).The change was principally due to operating lossgenerated in 2024 compared with operating incomein 2023.Cash used by investing activities was $10.1million compared with $27.4 million used in 2023.The construction of Asetek’s headquarters facilitywas completed in Q3 2024, with property, plantand equipment additions totaling $7.8 million($24.9 million in 2023). Additions to capitalizedassets under development associated with futureproducts was $2.3 million, a decrease of $0.2million from 2023.

Cash provided by financing activities was $5.0million in 2024 compared with $12.3 million provid-ed in 2023. $5.7 million was drawn on credit facili-ties in 2024 to finance completion of the Company’sheadquarters building. Funds provided by financingin 2023 included a rights offering which generatednet proceeds of $16.1 million.

Net decrease in cash and cash equivalents was$5.8 million in 2024, compared with an increase of$1.7 million in 2023. Cash and cash equivalents atDecember 31, 2024 was $3.3 million ($9.1 millionin 2023).Liquidity and financingIn mid-2024, the Company experienced a declinein revenue resulting from a weakened gaminghardware market while it continued to invest inthe growing SimSports business as well as finishconstruction of its new headquarters. As a result,a projected near-term cash shortfall required that

management initiate fund-raising with the launchof an equity rights offering in November 2024. Asof December 31, 2024, the Company had workingcapital of $4.4 million and long-term debt of $19.2million. Upon subsequent completion of a rights of-fering on January 6, 2025, the Company generatednet proceeds of $10.5 million through the issuanceof 219.9 million new common shares of stock. InMay 2023, the Company issued 71.2 million newcommon shares in an equity rights offering, raisingnet proceeds of $16.1 million.While there is no assurance that the Companywill generate sufficient revenue or operating prof-its in the future, Asetek’s management estimatethat the Company’s cash position and the liquidityavailable from its operations, external borrowingsand other sources available, after the results ofthe rights offering on January 6, 2025, is sufficientto satisfy its working capital requirements for theforeseeable future, based on financial forecasts.To the extent necessary to fund expansion orother liquidity needs, management will considerofferings of debt, equity, or a combination thereof,depending on the cost of capital and the status offinancial markets at that time.2024 RESULTS vs. EXPECTATIONSIn the 2023 report, the Company communicatedexpectations of revenue growth between -5% to5% for 2024 (equivalent to estimated total revenueof $72.5 to $81.1 million), with expected adjustedEBITDA margin to be in the range of 12% to 17%.In June 2024, the Company received updated rev-enue forecasts from its OEM partners indicating apotentially weak second half of 2024 and thereforetemporarily suspended its revenue guidance. Aftera detailed customer review which revealed that theliquid cooling market rebound would be weakerthan anticipated, Asetek reduced guidance on July

1 to reflect Group full year revenue expected inthe range of $52 to $55 million, with an adjustedEBITDA margin of 1% to 4%. The Company’s actualresults for 2024 were total revenue of $52.5 millionand adjusted EBITDA margin of 1%. The resultsdid not meet management’s expectations at thebeginning of the year. Revenue and adjusted EBITDAachievement for the year was within the range ofthe revised expectations communicated on July 1,2024.

EXPECTATIONS FOR 2025

Recently there has been a shift in the liquid coolingmarket toward more affordable gaming PC’s, whichin turn increases the demand for cheaper liquidcooling options. This shift has impeded revenuegrowth in the Liquid Cooling segment, as Asetekhas historically focused on the premium market. In2025, the Company is expanding its product rangeto include products for the mid-range market,aiming to capture a broader consumer base in anincreasingly competitive environment. As a resultof these market dynamics, the Company expectsrevenue for 2025 at the Group level to be in therange of $52-58 million, with an adjusted EBITDAmargin of 3–5%. The Group revenue outlook isderived from expected revenue in the Liquid Coolingsegment in the range of $40 to $43 million, and inthe SimSports segment $12 to $15 million. For thefull fiscal year 2025, the Liquid Cooling segment isexpected to achieve a gross margin in the range of40-45%, while the SimSports segment is expected toreach a gross margin of 30–35%.The potential impact of the geopolitical situationand U.S. import tariffs remains uncertain and willdepend on various factors beyond the Company’scontrol, as well as the Company’s ability to mitigateany potential effects.

MANAGEMENT REPORT ASETEK Annual report 2024 / Page 24

CORPORATE GOVERNANCE

The objective of corporate governance is to ensurethat Asetek is managed as efficiently as possible inorder to create shareholder value. This is achievedthrough a clear division of responsibilities be-tween the Annual General Meeting, the Board andthe executive management, as well as throughclear regulations and transparent processes.Framework for corporate governanceIn this process, Asetek uses the corporate gov-ernance recommendations from Nasdaq Copen-hagen as an important source of inspiration. Therecommendations can be found at: https://www.

nasdaqcom/market-regulation/nordic/copenhagen

The Board of Directors is fundamentally in fullagreement with Danish Committee on CorporateGovernance recommendations for good companygovernance. Asetek endeavors to follow the relevantrecommendations for the Company, which supportthe business and ensure value for the Company’sstakeholders. The statutory report on CorporateGovernance, cf. section 107b of the Danish FinancialStatements Act, is available on the Company’swebsite: https://ir.asetek.com/Corporate-Governance-Statement-2024/

Communication between the Company andits shareholdersThe communication between Asetek and sharehold-ers primarily takes place at the Company’s AnnualGeneral Meeting and via company announcements.Asetek shareholders are encouraged to subscribe tothe e-mail service to receive company announce-ments, interim management statements, interimreports and annual reports as well as other news viae-mail.

The general meetingThe General Meeting has the final authority overthe Company. The Board of Directors emphasizethat shareholders are given detailed informationand an adequate basis for the decisions to be madeby the General Meeting.The General Meeting elects the Board of Direc-tors, which currently consists of five members. Theboard members are elected for one year at a timewith the option for re-election.Amendment of Articles of AssociationUnless otherwise required by the Danish CompaniesAct, resolutions to amend the Articles of Associationmust be approved by at least 2/3 of the votes castas well as at least 2/3 of the voting share capital rep-resented at the General Meeting.Board responsibilitiesThe Board of Directors’ main tasks include partici-pating in, developing, and adopting the Company’sstrategy, performing the relevant control functionsand serving as an advisory body for the executivemanagement. The Board reviews and adopts theCompany’s plans and budgets. Items of majorstrategic or financial importance for the Companyare items processed by the Board. The Board isresponsible for hiring the CEO and defining his orher work instructions as well as setting of his or hercompensation. The Board periodically reviews theCompany’s policies and procedures to ensure thatthe Group is managed in accordance with good cor-porate governance principles, upholding high ethics.

Financial reportingThe Board of Directors receives regular financialreports on the Company’s business and financialstatus.Notification of meetings anddiscussion of itemsThe Board schedules regular meetings each year.Ordinarily, the Board meets eight to ten times ayear, of which four are quarterly update telecon-ferences. The meetings are typically conducted ateither the facility in Aalborg, Denmark or via webbased conferencing. Additional meetings may beconvened on an ad hoc basis.

All Board members receive regular informationabout the Company’s operational and financial pro-gress in advance of the scheduled Board meetings.

The Board members also regularly receive oper-ations reports and participate in strategy reviews.The Company’s business plan, strategy and risks areregularly reviewed and evaluated by the Board. TheBoard Members are free to consult the Company’ssenior executives as needed.

Ordinarily, the Chairman of the Board proposes theagenda for each Board meeting. Besides the BoardMembers, Board meetings are attended by theExecutive Board.Other participants are summoned as needed.The Board approves decisions of particular impor-tance to the Company including the strategies andstrategic plans, the approval of significant invest-ments, and the approval of business acquisitionsand disposals.Conflicts of interestIn a situation involving a member of the Boardpersonally, this member will exclude him or herselffrom the discussions and voting on the issue.Use of CommitteesCurrently, the Company has a NominationCommittee, an Audit Committee and aCompensation Committee.

// The Nomination Committee is elected directly

by the General Meeting. The Committee consists ofthree members and must be independent from theBoard of Directors and the management, however, itDanish Recommendation for Corporate Governance

20242023Participation:

Complies withrecommendations

3838Explanation provided22

CORPORATE GOVERNANCE ASETEK Annual report 2024 / Page 25

is recommended that the chairman of the Board ofDirectors is a member. The tasks include proposingcandidates for the Board of Directors, proposeremuneration for the Board of Directors as well asperform the annual assessment of the Board ofDirectors. Members: Ib S?nderby (chairman), ClausBerner M?ller and René Svendsen-Tune.Nomination committee meetingsMeetings held during the year: 3

Participation:

Ib S?nderby (chair) (independent)100%Claus Berner M?ller (independent)100%René Svendsen-Tune100%

// The Audit Committee is elected among the mem-bers of the Board of Directors and has responsibili-ties related to financial reporting, the independentauditor, internal reporting and risk management, in-cluding cybersecurity risks. The Committee consistsof at least two shareholder elected Board members.Members: Anja Monrad (chair), Erik Damsgaard.// The Compensation Committee has responsibil-ities related to developing proposals for the appli-cable remuneration policy and remuneration of theManagement Board. Members: Jukka Pertola (chair)and René Svendsen-Tune.

The Board’s self-evaluationThe Board’s composition, competencies, work-ing methods and interaction are discussed on anongoing basis and evaluated formally on an annualbasis. In this connection, the Board also evaluatesits efforts in terms of corporate governance.The composition of the Board is consideredappropriate in terms of professional experience andrelevant special competences to perform the tasksof the Board of Directors. The Board of Directorscontinuously assesses whether the competenciesand expertise of members need to be updated. Allof the members are independent persons, and noneof the Board members participates in the day-to-dayoperation of the Company. At the 2023 OrdinaryGeneral Meeting on April 30, 2024, Mr. René Svend-sen-Tune was re-elected to the Board, receiving 66%of the votes cast. Mr. Svendsen-Tune was re-electedChairman of the Board by the Board of Directors onApril 30, 2024.Risk managementRefer to the Risk Management section of the Man-agement Report as well as Note 3 of the consolidat-ed financial statements.

BOARD OF DIRECTORS

NameElectedIndependentShare holdingsBoard meetings

Compensation

committeeAudit committee

René Svendsen-Tune2023Yes241,84217/175/5–Erik Damsgaard2019Yes145,26716/17–4/4Jukka Pertola2019Yes164,17115/175/5–Anja Monrad

2024Yes50,00012/13–2/2Internal auditThe need for an internal audit function is consideredregularly by the Audit Committee. However, due tothe size of the Company and the established controlactivities, the Audit Committee so far considers itunnecessary to establish an independent internalexecutive audit board.

As part of risk management, Asetek has a whis-tle-blower function for expedient and confidentialnotification of possible or suspected wrongdoing.Share capitalOn December 31, 2024, the share capital in Asetekamounted to DKK 9,831,389.20 divided into98,313,892 shares with a nominal value of DKK 0.10.All shares are of the same class and hold the sameshare of capital and earnings. Each share entitlesthe holder to one vote at the General Meeting andeach shareholder is entitled to vote for all sharesheld by the shareholder.

Ownership structureAt the end of 2024, the ten largest shareholderscontrolled 38.35 percent of the capital and votes.

Board members and executive management helda total of 2.6 percent of the capital and votes. Othermembers of management held an additional 0.10percent of the capital and votes. The total numberof shareholders in Asetek was 6,584 at December31, 2024.

As of December 31, 2024, Asetek A/S had twomajor shareholders, each holding more than 5%of the voting rights and share capital. These twoshareholders are:

Nordic Compound Invest A/S

Annexstr?de 6, 2500 Valby, Denmark

Arbejdsmarkedets Till?gspension (ATP)

Kongens V?nge 8, 3400 Hiller?d, DenmarkShare repurchasesIn 2024, no shares were repurchased. As ofDecember 31, 2024, Asetek holds a total of1,256,115 treasury shares.

1) Joined board April 30, 2024

CORPORATE GOVERNANCE ASETEK Annual report 2024 / Page 26

BOARD OF DIRECTORS SHARE AUTHORIZATION

Meeng DateMeeng TypeAconSharesNominal ValuePriceApril 23, 2014BoardBoard issues warrants to employees and Board members118,210 DKK 0.10/shareNOK40.10August 12, 2014BoardBoard issues warrants to employees and Board members 32,970 DKK 0.10/shareNOK33.90August 11, 2015BoardBoard issues warrants to employees and Board members 700,000 DKK 0.10/shareNOK10.50April 29, 2016BoardBoard issues warrants to employees and Board members 600,000 DKK 0.10/shareNOK19.50April 25, 2017BoardBoard issues warrants to employees and Board members 509,687 DKK 0.10/shareNOK76.25July 7, 2017BoardBoard issues warrants to employees 106,999 DKK 0.10/shareNOK113.00April 25, 2018General Board authorized to acquire the Company's own sharesOctober 31, 2018BoardBoard introduces employee stock opon program to replace warrant program

and issues opons to employees 378,500 DKK 0.10/shareNOK46.30April 10, 2019General Board authorized to acquire the Company's own sharesSeptember 8, 2019BoardBoard issues opons to employees 494,900 DKK 0.10/shareNOK24.70April 22, 2020General Board authorized to acquire the Company's own sharesApril 23, 2020BoardBoard issues opons to employees 320,300 DKK 0.10/shareNOK38.33April 21, 2021BoardBoard issues opons to employees 216,300 DKK 0.10/shareNOK100.15April 22, 2021General Board authorized to acquire the Company's own sharesApril 28, 2022General Board authorized to acquire the Company's own sharesSeptember 7, 2022BoardBoard issues opons to employees 376,500 DKK 0.10/shareNOK15.04March 8, 2023BoardBoard authorized capital increase to raise DKK140 million in fully underwritten rights

issue

71,166,167DKK 0.10/shareNOK3.00May 9, 2023General Board authorized to acquire the Company's own sharesDecember 12, 2023BoardBoard issues options to employees 2,956,850 DKK 0.10/shareDKK4.07April 30, 2024GeneralBoard authorized to acquire the Company's own sharesNovember 29, 2024Extraordinary GeneralBoard authorized to to increase Asetek’s share capital and issue new shares with

pre-emptive rights for the existing shareholders

CORPORATE GOVERNANCE ASETEK Annual report 2024 / Page 27

BOARD OF DIRECTORSExecuve and other posions heldAge and genderQualicaons

Date appointed toend of current termIndependence statusREN? SVENDSEN-TUNE, CHAIRMANNilfisk A/S - Deputy ChairmanNKT A/S - Deputy ChairmanCommittee participation: Compensation; NominationAsetek equity holdings: 241,842 owned shares2024 cash compensation: $64,940

Male

CEO at GN Store Nord A/S for 8 years (2015-2023);Prior to this long, exec level career in tech sector.

May 9, 2023 toApril 28, 2025

Independent

ERIK DAMSGAARD, VICE CHAIRMANMasentia Group of companies - Chairman of the BoardTentoma A/S - Member of the BoardDamm Cellular Systems ApS, Member of the BoardED Management Holding ApS - Owner and Managing directorED Management ApS - Owner and Managing directorCRD Invest ApS - Managing directorTRD Invest ApS - Managing directorCommittee participation: AuditAsetek equity holdings: 145,267 owned shares2024 cash compensation: $54,942

Male

20+ years of senior positions in electronics &electrical manufacturing, business development.

April 10, 2019 toApril 28, 2025

Independent

JUKKA PERTOLA, BOARD MEMBERTryg A/S and Tryg Forsikring A/S - Chairman of the BoardCOWI Holding A/S - Chairman of the BoardSiemens Gamesa Renewable Energy A/S – Chairman of the BoardGN Store Nord A/S - Chairman of the BoardCommittee participation: Compensation (chair)Asetek equity holdings: 164,171 owned shares2024 cash compensation: $44,955

Male

Former executive at Siemens A/S for 25+ years;Technology, Finance, Corporate governance, Riskmanagement. Extensive board experience withmultiple Chairman roles for 10+ years.

April 10, 2019 toApril 28, 2025

Independent

CORPORATE GOVERNANCE ASETEK Annual report 2024 / Page 28

BOARD OF DIRECTORSExecuve and other posions heldAge and genderQualicaons

Date appointed toend of current termIndependence statusANJA MONRAD, BOARD MEMBERBunker Holding A/S - Member of the BoardATP - Long-term Danish Capital - Member of Advisory BoardDTU Entrepreneurship - Member of Advisory BoardVL - The Danish Management Society - Vice ChairJamii Invest ApS - Owner and Managing directorAnmoda ApS - Owner and Managing directorAnmoda Holding ApS - Managing director0-Mission Invest ApS - Managing directorKogelMogel I/S - OwnerCommittee participation: Audit (chair)Asetek equity holdings: 50,000 owned shares2024 cash compensation: $40,144

Female

Former executive at Dell Technologies for 23 yearswhere she led the Western Europe region forseveral years and previously headed up 32 coun-tries for Dell in Europe. Prior sales and marketingleadership roles at Unisys, Compaq and Digital.

April 30, 2024 toApril 28, 2025

Independent

EXECUTIVE MANAGEMENTOther positions held:

André Sloth Eriksen, Chief Executive OfficerValdemar Eriksen Racing A/S - Owner and Chairman of the BoardIt’s IT A/S - Chairman of the BoardPeter Dam Madsen, Chief Financial OfficeriFEED Aps - Board of Directors

CORPORATE GOVERNANCE ASETEK Annual report 2024 / Page 29

Asetek’s potential to realize the Company’s stra-tegic and operational objectives are subject to anumber of commercial and financial risks. Asetekis continuously working to identify risks that cannegatively impact the Company’s future growth,activities, financial position and results as wellas CSR-related risks. Asetek conducts its businesswith significant focus on continuous risk monitor-ing and management.For a comprehensive discussion of risk factors,refer to the Company’s 2024 Prospectus here:

https://ir.asetek.com/share-info/prospectus/Asetek-2024-Prospectus/The overall goal of risk management is to ensurethat the Company is run with a level of risk, which isin a sensible ratio to the activity level, the nature ofthe business, and the Company’s expected earningsand equity. To the largest extent possible, Asetektries to accommodate and limit the risks which theCompany can affect through its own actions.

InsuranceIt is the Company’s policy to mitigate significant riskareas with commercially available insurance prod-ucts. This currently includes insurance for productliability, operating material and inventory as well ascompulsory coverage, which varies from countryto country. Management assessments indicate thatthe necessary and relevant precautions have beentaken to thoroughly cover insurance issues. Asetek’sinsurance policies and overall coverage approachare reviewed at least annually.

The following are some of the risk factors manage-ment considers as being of special importance tothe Group, described in no specific order.

CSR-related risks

Please see the separate Asetek Sustainability Report2024 for identified risks and remedies.

Capital resources and indebtedness

In recent years, the Company has been dependenton third party debt and equity financing. In thefourth quarter of 2024, a decline in revenue resultedin a projected near-term cash shortfall requiringthe Company to initiate an equity rights offeringwhich raised net $10.5 million in January 2025. TheCompany had previously raised $16.1 million in anequity rights offering in May 2023. As of December31, 2024 the Company has long-term debt of $19.2million, principally incurred for construction of a newheadquarters facility, which was completed in 2024and is now occupied by the Company. The Company’sprincipal debt is based on a variable interest rate(Danish CIBOR 3) and matures in March 2028.

Economic recessionA general slowdown in the global economy, includ-ing a recession, inflation or a tightening of the creditmarkets could negatively impact Asetek’s business,financial condition and liquidity. Adverse globaleconomic conditions have caused or exacerbatedsignificant slowdowns in the markets in which theCompany operates, which have adversely affectedAsetek’s results of operations recently and in thepast. Macroeconomic weakness and uncertaintyalso make it more difficult for management to accu-rately forecast revenue, gross margin, and expenses.Further economic downturn or increased uncertain-

ty may also lead to increased credit and collectibil-ity risks, reduced availability of capital and creditmarkets, reduced profits, liquidity and potentiallyadverse impacts on Asetek’s suppliers.

Investment in SimSports

In 2020 and 2021, Asetek acquired technology andintellectual property in support of the Company’sentrance into the fast-growing SimSports gamingmarket. In March 2022, the Company shipped thefirst of its SimSports products and has releasedseveral new products through 2024. Revenue gen-erated from SimSports products totaled $9.6 millionin 2024, approximately 18% of the Group’s totalrevenue for the year. The SimSports segment is notyet profitable, generating adjusted EBITDA losses of$8.9 million in 2024 and $6.7 million in 2023. Thereis no assurance that the SimSports segment willgenerate operating profits in the future.

Customer concentration

In 2024, three customers accounted for 34%, 18%and 9% of total revenue. In the event of a declineor loss of any of these customers, replacement ofthe revenue stream would be difficult for Asetek toachieve in the short term. The Company is activelyworking with its other customers to grow theirrespective market shares and order volumes.

CompetitionThe markets in which the Company operates arecompetitive, the technological development israpid, and the Company may in the future also beexposed to increased competition from currentmarket players or new entrants.

Credit riskCredit risk is the risk of a counterpart neglectingto fulfill its contractual obligations and in so doingimposing a loss on Asetek. The Group’s credit riskoriginates mainly from receivables from the sale ofproducts as well as deposits in financial institutions.Receivables from the sale of products are split be-tween many customers and geographic areas.

Three customers represented 31%, 12% and10% of trade receivables at December 31, 2024.A systematic credit evaluation of all customers isconducted, and the rating forms the basis for thepayment terms offered to the individual customer.Credit risk is monitored centrally.

Intellectual property defense

Asetek has filed and defended lawsuits againstcompetitors for patent infringement. While someof the cases have been settled or dismissed, somemay continue, and new cases may be initiated. Suchcases may proceed for an extended period andcould potentially lead to an unfavorable outcome toAsetek. Asetek has historically incurred significantlegal costs associated with litigation and may con-tinue to do so in the future to the extent manage-ment believes it is necessary to protect intellectualproperty.New chip releases

Asetek’s liquid cooling revenue is dependent upontimely releases by major suppliers of new GPU’sand CPU’s. In recent years, the global economy wassubject to an unprecedented shortage of semi-conductor chips due to production constraints andincreased demand brought on by accelerated digital

RISK MANAGEMENT

RISK MANAGEMENT ASETEK Annual report 2024 / Page 30

transformation. This shortage negatively impacteddemand. The global chip shortage eased in 2023;however, the Company’s revenue continues tobe dependent upon timely releases of GPU’s andCPU’s, and future shortages could negatively impactcustomer demand.Manufacturing supply

Asetek relies upon suppliers and partners to supplyproducts and services at competitive prices. Supplyconstraints and disruptions in the global supplychain may increase component costs and limit theCompany’s ability to fulfill customer demand.Asetek’s liquid cooling products have been

historically assembled in Xiamen, China by a singlecontract manufacturer which may be difficult tosubstitute in the short term if the need should arise.Suppliers are proactively managed by the Compa-ny’s operations teams based in Xiamen and Aalborg.In 2023, the Company began outsourced manufac-turing of certain products in Malaysia, and contin-ues to increase production volumes at that site.

U.S. import tariffs

In 2018, the U.S. imposed a 25% tariff on imports ofcertain goods manufactured in China, which includeAsetek products. In February 2025, an additionaltariff of 10% was added to all goods imported to the

U.S. from China. The existence of the tariffs has con-tributed to market uncertainties, particularly in theliquid cooling segment. The Company continues towork to minimize the impact of the tariffs on Asetekand its customers.Foreign exchange ratesSubstantially all of Asetek’s revenue is billed in USD.However, many customers resell Asetek productsto end users in countries where USD is not thetransactional currency. As a result, there is a riskthat fluctuations in currency will affect the cost ofproduct to the end user and negatively impact mar-ket demand for Asetek products. Asetek estimates

that about one third of its sold products ultimatelyare delivered in Europe or Japan, which are the twogeographical areas which could have the largestpotential impact due to USD fluctuation. Asetekbelieves that other factors in the end users’ buyingdecision play a larger role than price fluctuation onthe liquid cooling component. During 2024, the USDstrengthened against both the DKK and EUR by 6%to 7% and strengthened against the Japanese Yenby 11%.

Asetek’s raw materials are predominantly pur-chased with USD, from vendors whose underlyingcurrency is CNY. The USD strengthened against theCNY by 2% in 2024.

RISK MANAGEMENT ASETEK Annual report 2024 / Page 31

Asetek recognizes that USD appreciation can resultin sales price pressure for its suppliers. Historically,the Company has not seen significant reaction fromits markets. In addition, Asetek believes that com-peting products are prone to the same exchangerate scenarios as Asetek.

A significant portion of Asetek’s overhead costsare incurred in DKK. As a result, fluctuations in USDvs. DKK will continue to have an influence on resultsof operations and financial position. The Group hasnot entered into any forward exchange instruments.Research and development, productinnovation, market developmentThe Company’s future success, including the oppor-tunities to ensure growth, depends on the abilityto continue developing new solutions and productsadapted to the latest technology and the clients’needs as well as improving existing solutions andmarket position. As such, the Company developsnew releases on a regular basis, with emphasison higher performance, improved efficiency andnoise-reduction. Providing new and innovativeapplications for Asetek’s cooling technology is also afocus, as evidenced by the new SimSports productsreleased during 2024.

Projects and contracts

It is important to Asetek’s overall success thatdevelopment projects are executed at high qualityand at predetermined timeframes and cost prices.Risks are attached to the sale, analysis and design,development and initial manufacturing phases.Asetek has carefully defined the individual phasesand the activities contained therein, with a view toactive risk management and efficient implementa-tion. Through project reviews and ongoing analysesbefore, during, and after initiation, Asetek worksto ensure that agreements are adhered to and thatrevenue and margins are as planned.

Knowledge resources

Asetek is a knowledge-intensive company and in or-der to continue to develop innovative products andattain satisfactory financial results, it is necessary toattract and develop the right employees. Asetek hasthe goal of maintaining an attractive workplace andachieves this through various programs includinga stock option incentive program and attractiveworking conditions. The Company seeks to supporta company culture founded on individual responsi-bility and performance as well as team accomplish-ment.

IT security

Asetek continuously implements measures to moni-tor and respond to data breaches and cyberattacks.Management ensures that security assessments,including vulnerability assessments and assumedbreach tests are performed on a regular basis.Additional security measures to mitigate phishingand spam mails are delivered to employees andpassword policies are maintained to mitigate therisk of password dictionary attacks or other formsof brute force hacking of individuals. The Companymaintains ongoing efforts with external special-ists to continuously improve and strengthen theIT Infrastructure security. Mandatory training incybersecurity is carried out for all employees, andthe knowledge level of cybersecurity is thus beingchanged from awareness-based to training- andcompliance-based.

The Company has entered into an informationsecurity risk insurance policy. This area is activelymonitored by the Board of Directors’ Audit Com-mittee.TaxationThe tax situation of the Company is complex. Inconnection with its initial public offering in 2013,Asetek moved its Parent company from the U.S. toDenmark.

However, USA – in a unilateral tax treaty override –still considers Asetek A/S a U.S. tax subject, resultingin double taxation of Parent company earnings.Asetek has approached both countries’ tax author-ities with the aim of resolving the situation as perthe double taxation treaty. However, a determina-tion may take several years, and the authorities arenot obligated to resolve the problem. The Companycontinues to make progress in working with the taxauthorities of Denmark and U.S. to possibly resolvethis issue.

In June 2019, the U.S. released regulation for itsGlobal Intangible Low-Taxed Income (GILTI) inclusionfor U.S. taxation, effective beginning with tax year2018. The GILTI regulation requires U.S. companiesto report foreign corporation intangible incomethat exceeds 10% return on foreign invested assets.Under prior law, U.S. owners of foreign corporationswere able to defer recognizing taxable income untilthere was a distribution of earnings back to U.S.owners. In 2024, The GILTI regulation caused netincremental tax liability of $0.9 million ($0.9 millionin 2023), which was partly offset by utilization ofavailable deferred tax assets. Because of Asetek’sU.S. tax status as described above, managementbelieves that the impact of the GILTI regulation asit applies to the Company could be reformed in thefuture; however, such reform is not certain. TheCompany continues to work with its tax advisors toclarify and address these matters.

RISK MANAGEMENT ASETEK Annual report 2024 / Page 32

CORPORATE SOCIAL RESPONSIBILITY

Asetek seeks to be a good corporate citizen ineverything that it does, and therefore has com-bined its operating principles into one frameworkpolicy.The Asetek Sustainability Report 2024 is the Com-pany’s Report on Corporate Social Responsibility, c.f.Section 99a of the Danish Financial Statements Act.Please refer to the Report here:

https://ir.asetek.com/reports-and-presentations/annual-reports/default.aspx

The Asetek Sustainability Report 2024 is theCompany’s Report on Data Ethics, c.f. Section 99d ofthe Danish Financial Statements Act. Please refer tothe Report here:

https://ir.asetek.com/reports-and-presentations/annual-reports/default.aspx

Pursuant to section 107d of the Danish FinancialStatements Act, the Company is reporting on its di-versity policy in the following sections. Furthermore,Asetek’s diversity policy is available here:

https://ir.asetek.com/Diversity-Policy.

This statement of Asetek’s diversity policy is acomponent of the Management’s Report in the An-nual Report for 2024 and covers the financial period1 January –31 December 2024:

Asetek believes that diversity among employeesand management, including an even distributionof age, nationality and educational background,contributes positively to the work environment andstrengthens the company’s competitiveness andperformance.

Historically, Asetek has been a diverse workplace,where employees have very different backgrounds,competencies and living conditions. Not only inrelation to gender, age and origin, but equally inrelation to education, experience and personality. It istherefore Asetek’s goal that the management shouldequally reflect the diversity among our employees.In order to promote diversity among the company’smanagement and Board of Directors, there is a focuson this in recruiting new managers. In 2024, Asetekhas therefore sought to ensure broad diversity amongapplicants when recruiting and promoting.

As of December 31, 2024, the Board of Directorsconsists of 4 individuals, of which 75% are men and25% are women. In terms of nationality composi-tion, 25% of the Executive Board and Board of Direc-tors are of a nationality other than Danish. In termsof age composition, 0% of management is under40 years old, 50% are between 40 and 60 years old,and 50% of management is over 60.

The board members of Asetek cover a widerange of experiences from both the Danish andinternational business community and the high-techindustry. This composition is considered appro-priate, as it ensures a breadth in the members’approach to the tasks, and thus helps to ensurequalified considerations and decisions.

CORPORATE SOCIAL RESPONSIBILITY ASETEK Annual report 2024 / Page 33

FIVE-YEAR SUMMARY

FINANCIALS

FISCAL YEAR20242023202220212020COMPREHENSIVE INCOME ($000’S)

Revenue52,502 76,332 50,650 79,803 72,750Gross profit21,945 34,708 20,765 33,373 34,194Operang income (19,248) 9,403 (5,401) 779 10,928Financial items, net1,031 (905) (477) 618 (1,502)Income before tax(18,217) 8,498 (5,878) 1,397 9,426Income for the year(23,936)6,001 (4,325) 1,337 9,195Comprehensive income(25,273)6,722 (6,296) (372) 11,587Operang income before amorzaon,depreciaon and nancial items(EBITDA), unaudited(13,802) 14,503 (1,231) 4,529 14,681Adjusted EBITDA27115,864 (791) 7,223 15,600BALANCE SHEET ($000’S)Total assets79,363102,739 78,615 75,354 71,393Total equity41,13566,126 42,748 48,388 47,525Interest-bearing debt22,061 18,378 21,689 3,243 4,129Working capital4,362(3,232) (6,312) 20,603 32,837Invested capital115,860 112,177 99,346 80,900 81,786Investment in property, plant andequipment7,823 24,902 22,215 8,322 2,597Investment in intangible assets2,320 2,561 3,405 10,196 2,876

CASH FLOW ($000’S)

Operang acvies1,21316,280 (8,354) 14,317 11,430Invesng acvies(10,096) (27,373) (25,395) (13,204) (4,816)Financing acvies4,959 11,836 18,327 (4,636) (5,088)Total cash flow(5,828) 1,710 (15,885) (3,803) 2,594

RATIOS & METRICS

FISCAL YEAR20242023202220212020

PROFIT & LOSSGross margin41.8%45.5%41.0%41.8%47.0%Operating margin–36.7%12.3%–10.7%1.0%15.0%Return on invested capital (ROIC)–20.7%5.3%–4.4%1.7%11.2%Organic growth–31.2%50.7%–36.5%9.7%33.9%BALANCE SHEETQuick ratio0.9 0.6 0.6 1.6 2.4Current ratio1.2 0.9 0.8 1.8 2.5Days sales outstanding78.7 50.6 63.1 69.6 116.1Inventory turns per year3.9 5.2 4.8 11.5 18.4Days payable outstanding146.6 129.0 132.2 145.4 133.6Debt to equity 53.6%27.8%50.7%6.7%8.7%STOCK MARKET

Earnings per share, basic (USD)(0.25) 0.07 (0.08) 0.03 0.18Earnings per share, diluted (USD)(0.25) 0.07 (0.08) 0.03 0.17Shares issued (000's)98,314 98,314 27,147 26,970 26,433Treasury shares (000's)1,256 1,256 1,256 1,262 931Share price (DKK)0.48 3.90 8.46 30.58 76.74Share price to earnings–7.87 – 90.56 35.98Market capitalization ($000's)6,50956,122 31,413 119,825 323,054

BUSINESS DRIVERS

Sealed loop units shipped (000's)768 1,165 797 1,386 1,201Average selling price per unit, liquidcoolers (USD)55.7 59.3 56.2 52.6 53.9Revenue per employee ($000's)407 570 362 528 661Average number of employees129 134 140 151 110

FIVE-YEAR SUMMARY ASETEK Annual report 2024 / Page 34

Refer to the Definitions of Ratios and Metrics on page 79 of this report.

XXXXX ANNUAL REPORT 2024 / Page 35

FINANCIAL STATEMENTS

Consolidated statement ofcomprehensive income36Consolidated balance sheet37Consolidated statement of changes in equity38Consolidated statement of cash ows39Notes40

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(USD 000’s)Note20242023Revenue452,502 76,332Cost of sales8(30,557) (41,624)GROSS PROFIT21,945 34,708Research and development(8,295) (7,379)Selling, general and administrave(19,107) (17,079)Special items2, 8(13,791)(847)TOTAL OPERATING EXPENSES(41,193) (25,305)OPERATING INCOME(19,248) 9,403Foreign exchange gain (loss)91,444 (1,015)Finance income999 265Finance costs9(512) (155)TOTAL FINANCIAL INCOME1,031 (905)INCOME BEFORE TAX(18,217) 8,498Income tax (expense) benet10, 11(5,719)(2,497)INCOME FOR THE YEAR(23,936)6,001Other comprehensive income items that may be reclassiedto prot or loss in subsequent periods:

Foreign currency translaon adjustments(1,337)721TOTAL COMPREHENSIVE INCOME(25,273)6,722INCOME PER SHARE: (IN USD)Basic12(0.25) 0.07Diluted12(0.25) 0.07

FINANCIAL STATEMENTS ASETEK Annual Report 2024 / Page 36

CONSOLIDATED BALANCE SHEET

(USD 000’s)Note20242023ASSETSNON-CURRENT ASSETSIntangible assets1410,94312,050Property, plant and equipment1544,99253,897Deferred income tax assets11–5,689Other assets39318TOTAL NON-CURRENT ASSETS55,97471,954CURRENT ASSETSInventory176,6049,053Trade and other receivables1613,49212,611Cash and cash equivalents3,2939,121TOTAL CURRENT ASSETS23,38930,785TOTAL ASSETS79,363102,739

(USD 000’s)Note20242023EQUITY AND LIABILITIESEQUITYShare capital181,4781,478Retained earnings52,37576,029Translation and other reserves(12,718) (11,381)TOTAL EQUITY41,13566,126NON-CURRENT LIABILITIESLong-term debt1919,2012,596TOTAL NON-CURRENT LIABILITIES19,2012,596CURRENT LIABILITIESShort-term debt19, 202,86015,782Accrued liabilities2,6461,790Accrued compensation and employee benefits1,2501,733Trade payables12,27114,712TOTAL CURRENT LIABILITIES19,02734,017TOTAL LIABILITIES38,22836,613TOTAL EQUITY AND LIABILITIES79,363102,739

FINANCIAL STATEMENTS ASETEK Annual Report 2024 / Page 37

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(USD 000’s)

Sharecapital

Sharepremium

Translaon

reserves

Treasuryshare reserves

RetainedearningsTotalEQUITY AT DECEMBER 31, 2022444 – (896) (11,206)54,406 42,748Total comprehensive income for 2023

Income for the year – – – – 6,001 6,001Foreign currency translation adjustments – – 721 – – 721Total comprehensive income for 2023 – – 721 – 6,001 6,722Transactions with owners in 2023Shares issued in rights offering, net of issuance costs1,03415,108–––16,142Transfer–(15,108)––15,108–Share-based payment expense– – – – 514 514Transactions with owners in 20231,034 – – – 15,622 16,656EQUITY AT DECEMBER 31, 20231,478 – (175) (11,206)76,029 66,126Total comprehensive income for 2024Income for the year – – – – (23,936) (23,936)Foreign currency translation adjustments – – (1,337) – – (1,337)Total comprehensive income for 2024 – – (1,337) – (23,936) (25,273)Transactions with owners in 2024

Share-based payment expense – – – – 282 282Transactions with owners in 2024 – – – – 282282EQUITY AT DECEMBER 31, 20241,478 – (1,512) (11,206) 52,375 41,135

FINANCIAL STATEMENTS ASETEK Annual Report 2024 / Page 38

CONSOLIDATED STATEMENT OF CASH FLOWS

(USD 000’s)Note20242023CASH FLOWS FROM OPERATING ACTIVITIESIncome (loss) for the year(23,936) 6,001Depreciation and amortization14,155,446 5,100Impairment of property, plant and equipment1413,791 –Impairment of intangible assets14211 60Finance income recognized9(99) (265)Finance costs incurred91,494 1,284Finance income, cash received99 265Finance costs, cash paid(1,471) (1,243)Impairment of deferred tax assets114,209–Income tax expense (income)10, 111,510 2,497Cash receipt (payment) for income tax(1,480) 543Share-based payments expense7282 514Changes in receivables, prepaid assets, inventories 1,836 (847)Changes in trade payables and accrued liabilities(678) 2,371NET CASH PROVIDED BY OPERATING ACTIVITIES1,213 16,280CASH FLOWS FROM INVESTING ACTIVITIESAdditions to intangible assets14(2,320) (2,561)Purchase of property, plant and equipment15(7,823) (24,902)Disposal of long-term assets1547 90NET CASH USED IN INVESTING ACTIVITIES(10,096) (27,373)FREE CASH FLOW(8,883) (11,093)

(USD 000’s)Note20242023CASH FLOWS FROM FINANCING ACTIVITIESBorrowings (repayment) on line of credit195,759 (3,354)Proceeds from issuance of share capital18– 17,020Costs incurred for issuance of share capital18– (878)Financing of equipment19171 181Principal payments on equipment financing19(262) (293)Principal payments on leases20(709) (840)NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES4,959 11,836Effect of exchange rate changes on cash and equivalents(1,904) 967NET CHANGES IN CASH AND CASH EQUIVALENTS(5,828) 1,710Cash and cash equivalents at beginning of period9,121 7,411CASH AND CASH EQUIVALENTS AT END OF PERIOD3,293 9,121SUPPLEMENTAL DISCLOSURE – NON-CASH ITEMSAssets acquired under leases20152 273

FINANCIAL STATEMENTS ASETEK Annual Report 2024 / Page 39

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements areset out below. These policies have been consistently applied to all the years presented, unless otherwisestated.

2.1. Basis of preparation

The consolidated financial statements have been prepared on a historical cost convention, in accordancewith International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and the sup-plementary Danish information requirements for class D publicly listed companies.

2.2. Consolidation

The consolidated financial statements comprise the Company and its consolidated subsidiaries. Subsidiariesare all entities (including structured entities) over which the Group has control. The Group controls an entitywhen the Group is exposed to, or has rights to, variable returns from its involvement with the entity and hasthe ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated fromthe date on which control is transferred to the Group. They are deconsolidated from the date that controlceases. Intercompany transactions, balances, income and expenses on transactions between Group compa-nies are eliminated. Profits and losses resulting from the intercompany transactions that are recognized inassets are also eliminated. Accounting policies of subsidiaries are consistent with the policies adopted by theGroup.

2.3. Foreign currency

Items included in the financial statements of each of the Group’s entities are measured using the currencyof the primary economic environment in which the entity operates (‘the functional currency’). The function-al currency of the Company’s operations in the United States of America, Denmark and China are the U.S.dollar, Danish kroner, and Chinese Yuan Renminbi, respectively. The consolidated financial statements arepresented in U.S. dollars, which is the Group’s presentation currency.

Foreign currency transactions are translated into the functional currency using the exchange rates prevail-ing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of suchtransactions and from the translation at year-end exchange rates of monetary assets and liabilities denomi-nated in foreign currencies are recognized as operating expense in the income statement in foreign exchange(loss)/gain.Group companies that have a functional currency different from the presentation currency are translatedinto the presentation currency as follows:

// Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that

balance sheet;// Income and expenses for each income statement are translated at average exchange rates;// All resulting exchange differences are recognized in other comprehensive income

2.4. Property and equipment

Property and equipment are stated at historical cost less accumulated depreciation. For assets constructed,borrowing costs that are directly attributable to the acquisition, construction or production of a qualifyingasset are capitalized as part of the historical cost (Note 2.16). Subsequent costs are included in the asset’scarrying amount or recognized as a separate asset, as appropriate, only when it is probable that futureeconomic benefits associated with the item will flow to the Group and the cost of the item can be measuredreliably. The carrying amount of any replaced part is derecognized. All other repairs and maintenance arecharged to the income statement during the financial period in which they are incurred. Depreciation isprovided over the estimated useful lives of the depreciable assets, generally three to five years, using thestraight-line method. The assets’ useful lives and residual values are reviewed, and adjusted if appropriate, atthe end of each reporting period. Gains and losses on disposals are determined by comparing the proceedswith the carrying amount and are recognized as other income or expense in the consolidated income state-ment. Property, plant and equipment is grouped as follows:

NOTES

NOTES ASETEK Annual report 2024 / Page 40

1.GENERAL INFORMATION

Asetek A/S (‘the Company’), and its subsidiaries (together, ‘Asetek Group’, ‘the Group’ or ‘Asetek’) designs,develops and markets gaming hardware for computers. The Group’s core products utilize liquid cooling tech-nology to provide improved performance, acoustics and energy efficiency. The Company is based in Aalborg,Denmark with personnel in USA, China and Taiwan. The Company’s shares trade on the Nasdaq Copenhagenunder the symbol ‘ASTK’.

1.1. Liquidity from rights offerings

Subsequent to the balance sheet date, on January 6, 2025, the Company issued 219,925,366 new commonshares of stock in a rights offering, raising net proceeds of $10.5 million. Refer to Note 24. On May 17, 2023,the Company issued 71,166,167 new common shares of stock in a rights offering, raising net proceeds of$16.1 million after deduction of total issuance costs of $3.7 million.

GroupEsmated Useful LifeBuildings30–50 yearsLeasehold improvementsLesser of 5 years or lease termPlant and machinery5 yearsTools and fixtures3 to 5 years

2.5. Research and development

Research costs are expensed as incurred. Costs directly attributable to the design and testing of new orimproved products to be held for sale by the Group are recognized as intangible assets within developmentprojects when all of the following criteria are met:

// it is technically feasible to complete the product so that it will be available for sale;// management intends to complete the product and use or sell it;// there is an ability to use or sell the product;// it can be demonstrated how the product will generate probable future economic benefits;// adequate technical, financial and other resources to complete the development and to use or sell theproduct are available; and// the expenditures attributable to the product during its development can be reliably measured.Directly attributable costs that are capitalized as part of the product include the employee costs associatedwith development. Other development expenditures that do not meet these criteria are recognized asexpense when incurred. Development costs previously recognized as expense are not recognized as an assetin a subsequent period. Development costs recognized as assets are amortized on a straight-line basis overtheir estimated useful lives, which generally range between three and sixty months. Amortization expenserelated to capitalized development costs is included in research and development expense.

2.6. Impairment of non-financial assets

Assets that are subject to amortization are reviewed for impairment annually, and whenever events orchanges in circumstances indicate that the carrying amount may not be recoverable. An impairment loss isrecognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recov-erable amount is the higher of 1) an asset’s fair value less costs to sell or 2) its value in use. For the purposesof assessing impairment, assets are grouped at the lowest levels for which there are separately identifiablecash flows (cash-generating units). Non-financial assets other than goodwill that previously suffered an im-pairment are reviewed for possible reversal of the impairment at each reporting date. Goodwill is tested forimpairment annually and whenever there is indication that the goodwill may be impaired. If an impairmentloss on goodwill is identified, it is recognized as an expense and is not reversed in a subsequent period.

2.7. Financial assets

Recognition and MeasurementThe Group determines the classification of its financial assets at initial recognition. Financial assets within thescope of IFRS 9 Financial Instruments are classified as follows:

// ‘ Amortized cost’ are financial assets representing contractual cash flows held for collection, where suchcash flows solely represent payment of principal and interest.// ‘Fair value’. All other financial assets, representing other debt and equity instruments that do not meetthe ‘amortized cost’ criteria, are recognized at fair value. All fair value movements on financial assets aretaken through the income statement, or for certain debt instruments that qualify, through other compre-hensive income.For all years presented, the Group’s financial assets are all classified as ‘amortized cost’.Impairment of financial assetsFor financial assets carried at amortized cost, the Group measures at the end of each reporting period theexpected credit losses to be incurred for a financial asset or group of financial assets. The Company utilizeshistorical experience, evaluation of possible outcomes, current conditions and forecasts of future economicconditions to determine expected credit losses. Evidence may include indications that the debtors or a groupof debtors is experiencing significant financial difficulty, default or delinquency in interest or principal pay-ments, the probability that they will enter bankruptcy or other financial reorganization, and where observa-ble data indicate that there is a measurable decrease in the estimated future cash flows, such as changes inarrears or economic conditions that correlate with defaults.

2.8. Financial liabilities

Recognition and measurement. Financial liabilities within the scope of IFRS 9 are classified as financialliabilities at fair value through profit or loss, or other liabilities. The Group determines the classification of itsfinancial liabilities at initial recognition. Financial liabilities are recognized initially at fair value less, in the caseof other liabilities, directly attributable transaction costs. The measurement of financial liabilities depends ontheir classification as follows:

// ‘Financial liabilities at fair value through profit or loss’ are derivatives entered into that do not meet the

hedge accounting criteria as defined by IFRS 9. Gains or losses on liabilities held for trading are recognizedin profit and loss. At December 31, 2024, the Company has no liabilities measured at fair value throughprofit and loss.// ‘Other liabilities’ – After initial recognition, interest bearing debt is subsequently measured at amortized

cost using the effective interest rate method. Gains and losses are recognized in the income statementwhen the liabilities are derecognized as well as through the amortization process. The calculation takesinto account any premium or discount on acquisition and includes transaction costs and fees that are anintegral part of the effective interest rate.

NOTES ASETEK Annual report 2024 / Page 41

Offsetting of financial instruments. Financial assets and financial liabilities are offset, and the net amountreported in the consolidated balance sheet if, and only if, there is a currently enforceable legal right to offsetthe recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settlethe liabilities simultaneously.

2.9. Inventories

Inventories are stated at the lower of actual cost or net realizable value. Cost is determined using the first-in,first-out (FIFO) method. Net realizable value is the estimated selling price in the ordinary course of businessless estimated costs necessary to make the sale. Adjustments to reduce the cost of inventory to its net realiz-able value, if required, are made for estimated excess, obsolescence, or impaired balances.

2.10. Trade receivables

Trade receivables are amounts due from customers for product sold in the ordinary course of business. Tradereceivables are recognized initially at fair value and subsequently measured at amortized cost using theeffective interest method, less any provision for expected credit losses. If collection is expected in one yearor less, trade receivables are classified as current assets. Expected credit losses are determined utilizing thesimplified approach allowed under IFRS 9 Financial Instruments.

2.11. Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits with banks, overdrafts and other short-termhighly liquid investments with original maturities of three months or less.

2.12. Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinaryshares or options are recorded against equity in the period the equity transaction closes, as a deduction netof tax, from the proceeds.

2.13. Share-based payments

The Company issues options (or warrants) that allow management and key personnel to acquire shares inthe Company. Through equity-settled, share-based compensation plans, the Company receives services fromemployees as consideration for the granting of equity options to purchase shares in the Company at a fixedexercise price. The fair value of the employee services received in exchange for the grant of the options isrecognized as an expense. The total amount to be expensed is determined by reference to the fair value ofthe options granted, excluding the impact of any non-market service and performance vesting conditions.The grant date fair value of options granted is recognized as an employee expense with a corresponding in-

NOTES ASETEK Annual report 2024 / Page 42

crease in equity, over the period that the employees become unconditionally entitled to the options (vestingperiod). The fair value of the options granted is measured using the Black-Scholes model, taking into accountthe terms and conditions as set forth in the share option program. Measurement inputs include share priceon measurement date, exercise price of the instrument, expected volatility, weighted average expected lifeof the instruments (based on historical experience and general option holder behavior), expected dividends,and the risk- free interest rate. Service and non-market performance conditions attached to the transactionsare not taken into account in determining fair value. At each reporting date, the Company revises its esti-mates of the number of options that are expected to vest based on the non-market vesting conditions. Theimpact of the revision to original estimates, if any, is recognized in the Statement of Comprehensive Income,with a corresponding adjustment to equity.

2.14. Current and deferred income tax

The tax expense for the period comprises current and deferred tax. Tax is recognized in the income statement,except to the extent that it relates to items recognized in other comprehensive income or directly in equity. Inthis case, the tax is also recognized in other comprehensive income or directly in equity, respectively.

The current income tax expense is calculated on the basis of the tax laws enacted or substantively enact-ed at the balance sheet date in the countries where the Company and its subsidiaries operate and generatetaxable income. Management periodically evaluates positions taken in tax returns with respect to situationsin which applicable tax regulation is subject to interpretation. Management establishes provisions whereappropriate on the basis of amounts expected to be paid to the tax authorities.Deferred income tax is recognized, using the liability method, on temporary differences arising betweenthe tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill;deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a trans-action other than a business combination that at the time of the transaction affects neither accounting nortaxable profit or loss and does not give rise to equal taxable and deductible temporary differences. Deferredincome tax is determined using tax rates (and laws) that have been enacted or substantively enacted by thebalance sheet date and are expected to apply when the related deferred income tax asset is realized or thedeferred income tax liability is settled.Deferred income tax assets are recognized only to the extent that it is probable that future taxable profitwill be available against which the temporary differences can be utilized.Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offsetcurrent tax assets against current tax liabilities and when the deferred income tax assets and liabilities relateto income taxes levied by the same taxation authority on either the same taxable entity or different taxableentities where there is an intention to settle the balances on a net basis.

2.15. Revenue recognition and other income

Revenue represents sale of the Group’s products to customers which are principally resellers and originalequipment manufacturers. Revenue is measured at the fair value of the consideration received or receivable,and represents amounts receivable for goods supplied, stated net of discounts, sales tax, returns and aftereliminating sales within the Group.

The Group’s revenue is predominantly comprised of shipment of Asetek products in fulfillment of customerpurchase orders. As such, the Company recognizes revenue when a valid contract is in place and control ofthe goods have transferred to the customer. Customer purchase orders and/or contracts are used as evi-dence of an arrangement. Delivery occurs and control of the goods is deemed to transfer when products areshipped to the specified location and the risks of obsolescence and loss have been transferred to the custom-er. For certain customers with vendor-managed inventory, delivery does not occur until product is acquiredby the customer from the vendor-managed inventory location. The Company assesses collectability basedprimarily on the creditworthiness of the customer as determined by credit checks and customer paymenthistory. Customers do not generally have a right of return.

Income received as a result of patent litigation settlement is recorded as other income as an offset tooperating expense in the period the award is granted. Estimated costs for future product returns under war-ranty are charged to cost of sales and included in accrued liabilities.

2.16. Borrowings and related costs

Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subse-quently measured at amortized cost. Any difference between the proceeds (net of transaction costs) andthe redemption amount is recognized in profit or loss over the period of the borrowings using the effectiveinterest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of theloan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the feeis deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or allof the facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortizedover the period of the facility to which it relates.

Borrowings are removed from the balance sheet when the obligation specified in the contract is dis-charged, cancelled or expired. The difference between the carrying amount of a financial liability that hasbeen extinguished or transferred to another party and the consideration paid, including any non-cash assetstransferred or liabilities assumed, is recognized in profit or loss as other income or finance costs.

General and specific borrowing costs that are directly attributable to the acquisition, construction orproduction of a qualifying asset are capitalized during the period of time that is required to complete andprepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substan-tial period of time to get ready for their intended use or sale. Investment income earned on the temporaryinvestment of specific borrowings pending their expenditure on qualifying assets is deducted from theborrowing costs eligible for capitalization. Other borrowing costs are expensed in the period in which theyare incurred.

2.17. Leases

Lease liabilities are accounted for under IFRS 16 Leases and measured at the present value of the remaininglease payments, discounted using the lessee’s incremental borrowing rate. Lease liabilities include the netpresent value of: fixed lease payments, amounts expected to be payable under residual value guarantees,any purchase options that are reasonably expected to be exercised, and any penalties for termination re-flected in the lease term. The corresponding rental obligations, net of finance charges, are included in otherlong-term debt. Amounts due within one year are included in short-term debt.

NOTES ASETEK Annual report 2024 / Page 43

Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profitor loss over the lease period to reflect a constant periodic rate of interest on the remaining balance of theliability for each period.Leased assets are recognized as a right-of-use asset at the date at which the leased asset is available foruse by the Group, initially measured at the present value of the lease liability and included in Property andequipment on the balance sheet.

2.18. Provisions

A provision is recognized when the Company has a present legal or constructive obligation as a result of pastevents, it is probable that an outflow of resources will be required to settle the obligation, and the amounthas been reliably estimated. If the impact of time value is significant, the provision is calculated by discount-ing anticipated future cash flow using a discount rate before tax that reflects the market’s pricing of the pres-ent value of money and, if relevant, risks specifically associated with the obligation. Provisions are reviewedat each balance sheet date and adjusted to reflect the current best estimate.

2.19. Contingent liabilities

Contingent liabilities are not recognized in the financial statements. Significant contingent liabilities are dis-closed, with the exception of contingent liabilities where the probability of the liability occurring is remote.

2.20. Segment reporting

Business segmentation. The Group is reporting on three segments, Liquid cooling, SimSports and Datacenter. The three segments are identified by their specific sets of products and specific sets of customers.The splitting of operating expenses between segments is based on the Company’s best judgment and doneby using the Company’s employee/project time tracking system to capture total hours charged by projectcode. Operating expenses that are not divisible by nature (rent, telecommunication expenses, etc.) havebeen split according to actual time spent on the three businesses, and the Company’s best estimate for attri-bution. Costs incurred for intellectual property defense and headquarters administration have been classifiedseparately as headquarters costs and excluded from segment operating expenses. The CEO is the Group’schief operating decision maker. The CEO assesses the performance of the Group principally on measures ofrevenue and adjusted EBITDA.Geographical segmentation. Each of the Group’s offices in its three principal geographies fulfills a particu-lar function that serves the Asetek Group as a whole. The majority of costs incurred in each of the geogra-phies are generally incurred for the benefit of the entire Group and not to generate revenue in the respectivegeography. As a result, the financial results of the Group are not divided between multiple geographicalsegments for key operating decision-making. Revenue and assets by geography is measured and reported inNote 4, Geographical information.

2.21. Cash flow statement

The cash flow statement is prepared using the indirect method.

2.22. Critical accounting estimates and judgments

The preparation of financial statements in conformity with IFRS requires management to make estimates andassumptions that affect the amounts reported in the financial statements and accompanying notes. Actualresults could differ from those estimates. Areas where significant judgment has been applied are:

// Impairment of non-current assets: In October 2024, management identified external indicators of im-

pairment to the Company’s net asset book value, including a significant decrease in the Group’s marketcapitalization as reflected on Nasdaq Copenhagen compared with the equity value as of mid-2024. Inperforming an impairment test, management measured the net book value of equity for the Groupagainst the net present value of future prospective cash flows. The impairment test was performed usingthe same approach as the test described in Note 14, using the same key assumptions for cash-generat-ing units (CGUs), periods analyzed, revenue growth, discount rate, terminal growth and tax rates. As aresult of the test, management estimated impairment to the Group’s equity value of approximately $18million to be applied to long-term assets. Current assets were not impaired because they are stated at netrealizable value. Intangible assets were assessed separately for impairment and deemed fairly valued asdescribed in Note 14. Deferred tax assets were determined to be impaired as specified in the followingparagraph. In property, plant and equipment, the Group’s headquarters building had shown signs ofimpairment during a recent assessment of its alternative uses. As a result, management used judgmentto apply $13.8 million impairment to the headquarters building. This impairment charge is classified as aspecial item within operating expense in the consolidated income statement.

// Valuation of deferred tax assets: Deferred income tax assets are recognized to the extent that the realiza-tion of the tax benefit to offset future tax liabilities is considered to be probable. In prior years, the Com-pany has recorded deferred tax assets representing the estimated amount of net operating losses thatwill be utilized to offset future taxable income for the next five years. In 2024, management determinedthat it is not probable that the tax assets available to the Company would be utilized within five years,and therefore recorded impairment of $4.2 million in the third quarter of 2024 and valued the assets atzero on the balance sheet at December 31, 2024. The deferred tax asset impairment charge is includedin income tax expense in the consolidated income statement. Refer to the previous paragraph regardingthe impairment of other non-current assets. In future periods, management will continue to assess theprobability of realization of the assets’ value and adjust the valuation in accordance with IAS 12.// Capitalization of development costs: the Group’s business includes a significant element of research anddevelopment activity. Under IAS 38, there is a requirement to capitalize and amortize development spendto match costs to expected benefits from projects deemed to be commercially viable. The application ofthis policy involves the ongoing consideration by management of the forecasted economic benefit fromsuch projects compared to the level of capitalized costs, together with the selection of amortization peri-ods appropriate to the life of the associated revenue from the product. If customer demand for productsor the useful lives of products vary from estimates, impairment charges on intangibles could occur.

NOTES ASETEK Annual report 2024 / Page 44

2.23. Defined contribution plan

In 2008, the Company established a defined contribution savings plan (the “Plan”) in the U.S. that meets therequirements under Section 401(k) of the U.S. Internal Revenue Code. This Plan covers U.S. employees whomeet the minimum age and service requirements and allows participants to defer a portion of their annualcompensation on a pre-tax basis. Company contributions to the Plan may be made at the discretion of theBoard of Directors. For the year ended December 31, 2024, the Company’s matching contributions total$15,000 ($17,000 in 2023).

2.24. Special items

The Company may identify special items that are significant non-recurring items that management does notconsider to be part of the Group’s ordinary activities. Such special items may include one-time impairmentcosts, restructuring, and strategic considerations regarding the future of the business, and are presentedseparately in the Consolidated Statement of Comprehensive Income to provide a more comparable basisfor the Company’s operations. Management assesses which items are to be identified as special items andshown separately, in order to give a correct presentation of the statement of profit or loss and other compre-hensive income.

2.25. ESEF Regulation

The Company’s Annual Report is prepared, in all material respects, in compliance with the Commission Dele-gated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) which includesrequirements related to the preparation of the Annual Report in XHTML format and iXBRL tagging of theConsolidated Financial Statements.

2.26. Changes in accounting policy and disclosures -

New standards and amendments included in Annual Report for 2024Certain new standards, amendments to standards, and annual improvements to standards and interpreta-tions are effective for annual periods beginning after January 1, 2024 and have been applied in preparingthese consolidated financial statements. These applications did not materially impact the Group’s consolidat-ed financial statements.

2.27. New standards and amendments not applied in the Annual Report for 2024

There are some new standards and amendments to standards and interpretations that have not beenapplied in preparing these consolidated financial statements. None of these is expected to have a significanteffect on the consolidated financial statements of the Group:

StandardContent

EecvedateEU endorsed as of December 31, 2024Amendments to IAS 21 The Effects ofChanges in Foreign Exchange Rates:

Lack of Exchangeability

Amends IAS 21 to 1) specify when a currency isexchangeable to another currency and when it isnot; 2) specify how to determine the exchangerate to apply when a currency is not exchangea-ble; 3) require disclosure of additional informa-tion when a currency is not exchangeable.

1-Jan-25

Not endorsed by EU as of December 31, 2024IFRS 18 Presentation and Disclosurein Financial Statements

New standard issued to replace IAS 1, focusingprincipally on the statement of profit and loss,requiring management-defined performancemeasures and enhanced principles on aggrega-tion and disaggregation in reporting.

1-Jan-27

Amendments to the Classificationand Measurement of FinancialInstruments (Amendments to IFRS 9and IFRS 7)

May permit discharge of financial liabilities beforesettlement when paid by electronic transfer;amends classification of certain financial assets;requires additional disclosures for investments inequity instruments and disclosure of contractualterms that could change the timing or amount ofcontractual cash flows.

1-Jan-26

NOTES ASETEK Annual report 2024 / Page 45

3.RISK MANAGEMENT AND DEBT

The Group’s activities expose it to a variety of risks: liquidity risk, market risk (including foreign exchange riskand interest rate risk) and credit risk. The primary responsibility for Asetek’s risk management and internalcontrols in relation to the financial reporting process rests with executive management.

Asetek’s internal control procedures are integrated in the accounting and reporting systems and includeprocedures with respect to review, authorization, approval and reconciliation. All entities in the Asetek Groupreport financial and operational data to the executive office on a monthly basis, including commentaryregarding financial and business development. Based on this reporting, the Group’s financial statementsare consolidated and reported to executive management. Management is in charge of ongoing efficient riskmanagement, including the identification of material risks, the development of systems for risk management,and that significant risks are routinely reported to the Board of Directors.

Liquidity risk. The Group incurred losses from operations and negative cash flows from operations frominception through 2015. Positive operating cash flows and operating income were first generated in 2016and continued through 2021. In 2022, the Company incurred operating losses and began facilities construc-tion which required new capital. In 2023, the Company issued 71.2 new common shares of stock in a rightsoffering, raising net proceeds of $16.1 million (refer to Note 18) and generated $9.4 million of operating in-come and $16.3 million of operating cash flows. In mid-2024, the Company experienced a decline in revenueresulting from a weakened gaming hardware market while it continued to invest in the growing SimSportsbusiness and finish construction of its new headquarters. As a result, a projected near-term cash shortfallrequired that management initiate fund-raising with the launch of an equity rights offering in November2024. Upon subsequent completion of a rights offering on January 6, 2025, the Company generatednet proceeds of $10.5 million through the issuance of 219.9 million new common shares of stock. TheCompany believes that its cash position and the liquidity available from its operations, external borrowingsand other sources after the recent offering completion on January 6, 2025 is sufficient to satisfy its workingcapital requirements for the foreseeable future.

The Group’s corporate finance team monitors risk of a shortage of funds through regular updates andanalysis of cash flow projections and maturities of financial assets and liabilities. The finance teams alsoreview liquidity, balance sheet ratios (such as days’ sales outstanding, inventory turns) and other metrics on aregular basis to ensure compliance both on a short- and long-term basis.

Asetek will continue to invest its capital principally in the development and marketing of its products.In 2016, the Board of Directors implemented a policy under which it may declare and distribute dividendsto shareholders. At the Annual General Meetings in 2024 and 2023, the Board was authorized to acquirethe Company’s own shares. In 2024 and 2023, the Company did not repurchase shares. When considering

AS OF DECEMBER 31, 2024(USD 000’s)

OnDemand

Less than3 months

3 to 12months

1 to 5yearsTotalLines of credit –(1,226)(987)(18,634)(20,847)Leases and equipment financing–(274)(461)(598)(1,333)Payables and accrued liabilities–(15,622)(545)–(16,167)

–(17,122)(1,993)(19,232)(38,347)AS OF DECEMBER 31, 2023

(USD 000’s)

OnDemand

Less than3 months

3 to 12months

1 to 5yearsTotalConstruction commitments – (1,689) (2,213) – (3,902)Lines of credit – – (14,700) (1,489) (16,189)Leases and equipment financing – (256) (910) (1,180) (2,346)Payables and accrued liabilities – (17,447) (788) – (18,235)

– (19,392) (18,611) (2,669) (40,672)

payment of dividends or Asetek share purchases, the Board takes into consideration the Company’s growthplans, international tax implications, liquidity requirements and necessary financial flexibility.Debt covenants. Under lines of credit terms with Jyske Bank, the Company is required to comply with thefollowing financial covenants at each quarter-end:

// Group solvency of at least 40%// Segment reporting of EBITDA at Group level// Minimum liquidity reserve of USD 2.5 million, with the exception that a minimum liquidity reserve of USD

1.5 million will be accepted for 2026

The Company complies with these covenants at December 31, 2024 and there are no indications that theCompany will not comply with these covenants in the next reporting period (Q1 2025).The following are contractual maturities of financial liabilities, including lease and other financing paymentson an undiscounted basis:

NOTES ASETEK Annual report 2024 / Page 46

Market risk factors. The Group’s current principal financial liabilities consist of principally long-term lines ofcredit and amounts owed on equipment financing and leases. The Group’s financial assets mainly comprisetrade receivables, cash and deposits. The Group’s operations are exposed to market risks, principally foreignexchange risk and interest rate risk.(a) Foreign exchange risk. With few exceptions, the Group’s inventory purchase and sale transactionsare denominated in U.S. dollars. The Group operates internationally and is exposed to foreign exchange riskarising from currency exposures, principally with respect to the Danish kroner. Foreign exchange risk arisesfrom operating results and net assets associated with Denmark-based operations where the Danish krone isthe functional currency. Translation of the Denmark entity balance sheet accounts from Danish kroner to U.S.dollars affect the equity balances of the Group.

The Group has available lines of credit totaling 153 million Danish krone, of which DKK 149 million (USD

20.8 million) is outstanding at December 31, 2024 (further described in “(b) Interest rate risk” below). The

lines of credit are revalued at the year-end exchange rate with the offset recognized as foreign exchange gainor loss in the consolidated income statement. In 2024, the strengthening of the U.S. dollar versus the Danishkroner resulted in a gain of $1.1 million related to revaluation of the lines of credit. The Group does not enterinto derivatives or other hedging transactions to manage foreign exchange risk. Management mitigates thisexposure through timely settlement of intercompany operating liabilities.The ending exchange rate at December 31, 2024 was 7.14 Danish kroner to one U.S. dollar (6.74 to theU.S. dollar at December 31, 2023). The effect of a 10% strengthening of the Danish kroner against the U.S.dollar for the reporting period would have resulted in a decrease in pre-tax income for fiscal year 2024 of$2.5 million (in 2023, decrease of the pre-tax income of $1.6 million).(b) Interest rate risk. The Group’s interest rate risk consists of the following credit lines. As of December 31,2024, Asetek has two lines of credit totaling 153.8 million Danish krone (USD 21.5 million), of which USD 20.8million has been utilized, principally to finance a new headquarters facility.// Asetek A/S, the Parent company, has a line of credit with Jyske Bank for DKK 138.75 million (USD 19.4million), of which USD 19.25 million was utilized at December 31, 2024. This line is secured by the Group’sland and building and carries interest at Danish CIBOR 3 rate plus 2.45 percentage points which in totalwas 5.2% at December 31, 2024. The line specifies quarterly payments of DKK 2.35 million (USD 329,000)and matures on March 31, 2028.// Asetek Danmark A/S has a revolving line of credit with Jyske Bank for DKK 5 million (USD $0.7 million),with a temporary increase to DKK 15 million (USD 2.1 million) until January 2, 2025, of which DKK 9.8million (USD 1.37 million) was utilized at December 31, 2024. The line is secured by the assets of AsetekDanmark A/S and carries interest at the Danish CIBOR 3 rate plus 4.25 percentage points, which in totalwas 7.0% at December 31, 2024. The line matures on March 31, 2028. Amounts outstanding in excess ofDKK 5 million are payable on January 2, 2025.The variable nature of the Danish CIBOR 3 rate results in risk of increased interest cost due to potentialchanges in rates. At the level of borrowings as of December 31, 2024, the effect of a 50% relative increase inthe Danish CIBOR 3 rate would result in increased annual interest cost of $0.3 million ($0.3 million in 2023).

Capital and debt management. To date the Company’s primary focus has been to support its product de-velopment initiatives, maintain liquidity through use of financing alternatives, and maximize shareholder val-

NOTES ASETEK Annual report 2024 / Page 47

ue. The Group manages its capital and debt structure with consideration of the liquidity needs of the Compa-ny and existing economic conditions. In mid-2024, the Company experienced a decline in revenue resultingfrom a weakened gaming hardware market while it continued to invest in the growing SimSports business aswell as finish construction of its new headquarters. As a result, a projected near-term cash shortfall requiredthat management initiate fund-raising with the launch of an equity rights offering in November 2024. Uponsubsequent completion of a rights offering on January 6, 2025, the Company generated net proceeds of$10.5 million through the issuance of 219.9 million new common shares of stock. In May 2023, to bridgea short-term working capital deficit associated with its facility construction, the Company issued 71,166,167new common shares of stock in a rights offering, raising net proceeds of $16.1 million.Credit risk factors. Credit risk refers to the risk that a counterparty will default on its contractual obli-gations resulting in financial loss to the Group. The Group is exposed to credit risk primarily through tradereceivables and cash deposits. Management mitigates credit risk through standard review of customercredit-worthiness and maintaining its liquid assets primarily with banks with credit ratings of A or higher,such as Wells Fargo Bank in the U.S. and Jyske Bank in Denmark. The carrying amount of the financial assetsrepresents the maximum credit exposure.

Trade receivables that are deemed uncollectible are charged to expense with an offsetting allowancerecorded against the trade receivable. Historically, bad debt expense has not been significant. Certain cus-tomers have accounted for a significant portion of the Company’s revenue in the years presented, as follows.In 2024, the Company’s three largest customers, all in the liquid cooling segment, accounted for 34%, 18%and 9% of revenue (three customers accounted for 38%, 24% and 13% of revenue in 2023), respectively. TheCompany mitigates risk with its largest customer by requiring two remittances per month as well as frequentmonitoring and communicating regarding invoices coming due.At December 31, 2024 three customers, all in the liquid cooling segment, represented 31%, 12% and 10%of outstanding trade receivables (three represented 35%, 16% and 12% at December 31, 2023), respectively.The reserve for uncollectible trade accounts was $32,000 at December 31, 2024 and $59,000 at December 31,2023. The aged trade receivables and bad debt reserve balances for all years presented are provided in Note 16.The maximum exposure to credit risk at the reporting dates was:

(USD 000’s)20242023Cash and cash equivalents3,2939,121Trade receivables and other13,49212,611Other assets39318MAXIMUM CREDIT EXPOSURE16,82422,050

NOTES ASETEK Annual report 2024 / Page 48

4.GEOGRAPHICAL INFORMATION

The Group operates internationally in several geographical areas, principally in Asia, Europe and the Americas.The following table presents the Group’s revenue and assets in each of the principal geographical areas:

20242023(USD 000’s)Revenue

Current

assets

Non-current

assetsRevenue

Current

assets

Non-current

assetsAsia40,13210,31613065,25211,045 119Americas6,4205,029495,1305,369 1,099Europe5,9508,04455,7955,95014,371 70,736TOTAL52,50223,38955,97476,33230,78571,954For the purpose of the above presentation, the information pertaining to revenue and current assets iscalculated based on the location of the customers, whereas information pertaining to non-current assets isbased on the physical location of the assets. The information pertaining to current assets is calculated as asummation of assets such as trade receivables and finished goods inventories reasonably attributable to thespecific geographical area.

Non-current assets

(USD 000’s)20242023Denmark55,79570,736USA491,099China130119TOTAL55,97471,954

Revenue(USD 000’s)20242023Denmark609 525China5,631 8,576Singapore6,808 6,756Taiwan22,570 46,737USA6,240 4,917Japan4,034 2,667All others6,610 6,154TOTAL52,502 76,332

NOTES ASETEK Annual report 2024 / Page 49

5.SEGMENT INFORMATION

In 2024, the Company reports on three segments, Liquid cooling, Data center and SimSports. The three seg-ments are identified by their specific sets of products and customers. The CEO is the Group’s chief operatingdecision-maker. The CEO assesses the performance of each segment principally on measures of revenue, grossmargin and adjusted EBITDA. Refer to page 79 for definition of adjusted EBITDA. The following tables repre-sent the results by operating segment in 2024 and 2023. Disaggregation of revenue by sales channel is alsopresented for the major markets within each segment. Revenue generated from retailers and online webstoreis principally from the sale of SimSports products.Reconciliation of Adjusted EBITDA to Income before tax

(USD 000’s)20242023EBITDA adjusted - Liquid Cooling12,49525,861EBITDA adjusted - Data center–192EBITDA adjusted - SimSports(8,897) (6,688)Special items(13,791) (847)Headquarters costs, net(3,327) (3,501)Share-based compensation(282) (514)Depreciation and amortization(5,446) (5,100)Total financial income (expenses)1,031 (905)CONSOLIDATED INCOME BEFORE TAX(18,217)8,498

Disaggregation of revenue(USD 000’s)20242023

OEM and System Integrators42,80369,153Retailers5,2654,289Online webstore4,3292,890Office lease 105–TOTAL52,50276,332

Segment operating results – years ended December 31

20242023

(USD 000's)

LiquidCoolingData centerSimSports

Not allocable

to divisionsTotal

LiquidCoolingData centerSimSports

Not allocable

to divisionsTotalRevenue42,803–9,59410552,502 69,052 102 7,178 – 76,332Gross margin45%–25%–42%47%–28%–45%Personnel expense5,476–6,28611211,8745,259715,50845111,289Adjusted EBITDA12,495–(8,897)(3,327)27125,861 192 (6,688) (3,501)15,864

6.SALARY COSTS AND REMUNERATIONS

(USD 000’s)20242023Salaries11,46011,382Retirement fund payments to defined contribution plan629578Social cost1,4921,541Share-based payment282514Other expenses1,186806TOTAL PERSONNEL COSTS 15,04914,821Less: Costs applied to inventory production(1,065) (1,592)Less: Capitalized as development cost(2,110) (1,940)TOTAL PERSONNEL COSTS IN OPERATING EXPENSE11,87411,289AVERAGE NUMBER OF EMPLOYEES129134

(USD 000’s)20242023

Research and development4,6884,517Selling, general and administrative10,36110,304TOTAL PERSONNEL COSTS15,04914,821Options Granted

20242023Board of Directors– –Officers– 1,543,400Other executives–646,900Other employees–766,550TOTAL– 2,956,850Compensation to Board of Directors, Officers and Other Executives

20242023

(USD 000’s)DirectorsOcers

*OtherExecuvesTotalDirectorsOcers

*OtherExecuvesTotalSalary–1,1471,0032,150 – 1,047 887 1,934Bonus–287311598 – 520 637 1,157Share-based–21068278 – 258 117 375Other25526823375625521965539TOTAL2551,9121,6153,782255 2,044 1,706 4,005* Other executives include the Chief Operating Officer and other members of the executive team who are leaders of the key functions (Engineering, Sales and Operations).

NOTES ASETEK Annual report 2024 / Page 50

The Company’s CEO has an agreement of twelve months’ severance pay in case of termination or ter-mination in connection with change of control. The Company’s CFO has an agreement of seven months’severance pay in case of termination or termination in connection with change of control. Except for theCompany’s CEO and CFO and other members of the executive group, no member of the administrative,management or supervisory bodies has contracts with the Company or any of its subsidiaries providing forbenefits upon termination of employment.

Total compensation to Other Executives for the year ending December 31, 2024 includes a one-timeseverance payment of $161,000 representing six months salary to the Chief Operating Officer (COO), as perthe terms of his separation agreement and is included in ‘Other’ compensation to ‘Other Executives’ in thecompensation table below. Total compensation to the Board of Directors and Officers was $2,167,000 and$2,299,000 in 2024 and 2023, respectively.Share ownership of officers, including immediate family members, at December 31, 2024:

André S.Eriksen

Peter D.MadsenCommon shares 1,391,128 467,594Options at DKK 4.07 1,150,000 393,400Options at DKK 4.49 151,900 50,975Options at DKK 7.37 106,800 61,750Options at DKK 11.44 68,500 42,075Options at DKK 13.82 53,300 26,500Options at DKK 29.89 57,200 17,700TOTAL SHARES CONTROLLED2,978,828 1,059,994

7.SHARE BASED PAYMENT

Asetek’s Equity Incentive Program is a share compensation program where the employees that deliver servic-es to the Group have been granted share options (or warrants). The options, if vested and executed, will besettled in common shares of the Company.

The options are granted at the time of employment and, under other circumstances, at the discretionof the Board of Directors. The options are granted with exercise prices equaling the fair market value of theunderlying security. The exercise prices of option grants are determined based on the closing market price ofthe shares for the five most recent trading days prior to the grant date. Share-based compensation expensewas $282,000 and $514,000 for the years ended December 31, 2024 and 2023, respectively. The goals of theequity incentive program are as follows:

// To attract and retain the best available personnel for positions of substantial responsibility;// To provide additional incentive to employees, directors and consultants, and// To promote the success of the Company’s business.In July 2023, in consideration of the dilution effect of the Company’s May 2023 rights offering (Note 18), andtransition of listing to the Nasdaq Copenhagen, the Board of Directors reduced the exercise prices of out-standing share options by 45% and converted the currency denomination to Danish krone. Stock compensa-tion expense in 2023 associated with the exercise price adjustments was $142,000. The repricing of optionsis summarized as follows:

Grant year

OriginalExercise Price

RevisedExercise Price2022NOK 15.04DKK 4.492021NOK 100.15DKK 29.892020NOK 38.33DKK 11.442019NOK 24.70DKK 7.372018NOK 46.30DKK 13.822017NOK 76.25DKK 22.762017NOK 113.00DKK 33.722016NOK 19.50DKK 5.82The Company’s shares trade on the Nasdaq Copenhagen at prices denominated in Danish krone (DKK). Theexchange rate at December 31, 2024 of DKK to USD was 7.14.The Company did not grant any options in 2024. In December 2023, the Company granted 2,956,850options with exercise prices of DKK 4.07 per share. Movements in the number of share options outstandingand their related weighted average exercise price are specified on the following table.

Activity for exercise prices of DKK 4.07 to DKK 7.37

2024

WeightedAverageExercise price(DKK)2023

Weighted

AverageExercise price

(DKK)Outstanding on January 13,721,0034.46 992,460 5.94Options/warrants granted–– 2,956,850 4.07Options/warrants exercised–– – –Options/warrants forfeited(255,157)4.31 (228,307)5.84OUTSTANDING ON DECEMBER 313,465,8464.47 3,721,003 4.46EXERCISABLE ON DECEMBER 31659,1456.14 558,766 6.52No exercise for the above shares in 2024 & 2023.Activity for exercise prices of DKK 11.44 to DKK 33.72

2024

WeightedAverageExercise price(DKK)2023

Weighted

AverageExercise price

(DKK)Outstanding on January 11,198,47620.20 1,226,419 20.15Options/warrants granted–– – –Options/warrants exercised–– – –Options/warrants forfeited(518,148)24.29 (27,943) 18.32OUTSTANDING ON DECEMBER 31680,32817.08 1,198,476 20.20EXERCISABLE ON DECEMBER 31680,32817.08 1,170,239 20.19No exercise for the above shares in 2024 & 2023.

NOTES ASETEK Annual report 2024 / Page 51

The composition of options and warrants outstanding at December 31 is as follows:

Options and Warrants Outstanding at December 31

20242023DKK 4.072,733,300 2,956,850DKK 4.49355,580 370,381DKK 7.37376,966 393,772DKK 11.44249,867 258,427DKK 13.82255,442 278,791DKK 22.76– 384,054DKK 29.89175,019 180,205DKK 33.72– 96,999TOTAL4,146,174 4,919,479Total outstanding options and warrants represents 4.3% of total common shares issued at December 31,2024 (5.0% in 2023).The Company calculated the fair value of each option award on the date of grant using the Black-Scholesoption pricing model, which requires subjective assumptions, including future stock price volatility and ex-pected time to exercise. The Company sets the exercise price of shares granted as the average closing priceof the Company’s shares for the five most recent trading days prior to the grant date. The expected volatilitywas based on the historical volatility of the Company’s stock price. The weighted average remaining contrac-tual term of options outstanding is 3.23 years. The options granted in December 2023 have an estimatedtotal value of $1.2 million.Expected volatility is calculated based on the actual volatility experienced during the three-year periodprior to each option’s grant date. The following weighted average assumptions were used for the periodindicated.Valuation assumptions for options granted

20242023Risk-free interest rateNA 4.33%–4.58%Dividend yieldNA 0.0%Expected life of options (years)NA 2.5–3.96Expected volatilityNA114%

NOTES ASETEK Annual report 2024 / Page 52

8.EXPENSES BY NATURE

Expenses by Nature

(USD 000’s)Note20242023

Inventories recognized as cost of sales1730,557 41,624Personnel expenses615,049 14,821Depreciation and amortization14,155,446 5,100Legal, patent, consultants and auditor2,430 2,269Facilities and infrastructure1,720 1,192Special items13,791 847Other expenses4,8673,637TOTAL OPERATING EXPENSES BEFORE CAPITALIZATION73,86069,490Less: capitalized costs for development projects14(2,110) (2,561)TOTAL EXPENSES71,75066,929Depreciation and amortization expense classfication

(USD 000’s)20242023

Depreciation and amortization expense included in:

Research and development2,8662,560Selling, general and administrative2,5802,540TOTAL5,4465,100Special items. In 2024, the Company recorded a non-cash impairment charge of $13.8 million as a conse-quence of an assessed impairment within the cash generating units. This one-time charge is classifed as aspecial item in operating expense on the income statement and was recorded as impairment of the Compa-ny’s headquarters facility included in property, plant and equipment. Refer to Note 2.22 in the consolidatedfinancial statements. In May 2023, in conjunction with the rights offering described in Note 18, the Company began transi-tion of its shares for trading from Oslo Stock Exchange to Nasdaq Copenhagen. Operating expense in 2023includes $0.8 million of non-recurring costs associated with this listing change, classified as a special item inoperating expense on the income statement.

9.FINANCE COSTS AND INCOME

(USD 000’s)20242023FOREIGN EXCHANGE GAIN (LOSS)1,444 (1,015)FINANCE INCOME99265Interest cost on line of credit(1,105) (1,009)Interest cost on leases and equipment financing(83) (109)Other banking and finance fees(306) (166)Subtotal(1,494) (1,284)Less: amount capitalized9821,129FINANCE COST (512) (155)

NOTES ASETEK Annual report 2024 / Page 53

10.INCOME TAXES

Asetek A/S, the Group’s parent company, moved from U.S. to Denmark in 2013 and is currently subject toincome tax in both U.S. and Denmark. The Company is working with the U.S. and Danish tax authorities tonegotiate a resolution in accordance with international double taxation treaties.

The tax expense on the group’s income before tax differs from the theoretical amount that would ariseusing the weighted average tax rate applicable to profits of the consolidated entities as follows:

(USD 000’s)20242023

INCOME (LOSS) BEFORE TAX(18,217)8,498Tax calculated at domestic rates applicable to profits/losses in respectivecountries3,991 (1,902)Tax effects of:

R&D credit6150Timing differences between book and tax, recognized–70Timing differences between book and tax not recognized, principally dueto book impairment charge on property plant and equipment(3,206)–Impairment of deferred tax assets(4,209)–Deferred tax value of current year losses, net unrecognized(1,491)–Effect of U.S. GILTI regulation applied to foreign corporation incomepertaining to fiscal 2023(867)(766)Other permanent differences between book and tax251TAX (EXPENSE) BENEFIT(5,719)(2,497)

11.DEFERRED INCOME TAX

(USD 000’s)20242023Potential tax assets from net losses5,2276,064Potential tax assets resulting from timing differences between book and tax6,799618Tax assets not recognized(12,026)(993)DEFERRED INCOME TAX ASSETS–5,689At December 31, 2024, potential income tax assets totaled $12.0 million (2023: $6.7 million) in respect oftiming differences and losses to be carried forward amounting to $19.4 million applied to different tax rates.The losses can be carried forward against future taxable income but may be limited in use according to localjurisdictions. The potential tax assets resulting from timing differences include the effect of dual taxation ofthe Parent company, by both U.S. and Denmark. In 2024, due to uncertainty of the realizability of deferredtax assets, the Group fully reserved the value of potential assets, resulting in zero value on the balance sheetat December 31, 2024 ($5.7 million in 2023). Refer to the Group impairment assessment in Note 2.22.In accordance with IAS 12, the Company recognizes deferred tax assets arising from unused tax loss-es or tax credits only to the extent that the entity has sufficient taxable temporary differences or there isconvincing other evidence that sufficient taxable profit will be available against which the unused tax lossesor unused tax credits can be utilized by the Company. The estimated tax benefit is calculated consideringhistorical levels of income, expectations and risks associated with estimates of future taxable income. Thecalculation utilizes the statutory tax rates that are expected to apply to taxable income for the years in whichthe asset is expected to be realized.Losses of the U.S. parent company and U.S. subsidiary will begin to expire in 2029 for carryforward pur-poses. Losses of the Denmark subsidiary do not expire.

(USD 000’s)Tax eected loss

Expire in years 2029 to 2044965Expire in year 203359Do not expire4,203TOTAL5,227

13.FINANCIAL INSTRUMENTS CATEGORY AND FAIR VALUE ESTIMATION

The Company uses the following valuation methods for fair value estimation of financial instruments:

// Quoted prices (unadjusted) in active markets (Level 1).// Inputs other than quoted prices included within level 1 that are observable for the asset or liability,either directly (as prices) or indirectly (derived from prices) (Level 2)// Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

(Level 3).All of the Company’s financial assets as of December 31, 2024 are classified as “amortized cost” having fixedor determinable payments that are not quoted in an active market (Level 3). As of December 31, 2024, all ofthe Company’s financial liabilities are carried at amortized cost having fixed or determinable payments thatare not quoted in an active market (Level 3).

Based on current interest rates and its recent bank financing negotiations, the Company believes that bookvalue approximates fair value for all financial instruments as of December 31, 2024 and 2023. The values ofthe Group’s assets and liabilities are as follows:

At December 31, 2024(USD 000’s)Amorzed costAssets as per balance sheet:

Trade receivables and other13,492Cash and cash equivalents3,293

16,785At December 31, 2023(USD 000’s)Amorzed costAssets as per balance sheet:

Trade receivables and other12,611Cash and cash equivalents9,121

21,732At December 31, 2024(USD 000’s)

Liabilies at fairvalue throughprot and loss

Other FinancialLiabilies atamorzed costTotalLiabilities as per balance sheet:

Long-term debt–19,20119,201Short-term debt–2,8602,860Trade payables and accrued liabilities–16,16716,167

–38,22838,228At December 31, 2023(USD 000’s)

Liabilies at fairvalue throughprot and loss

Other FinancialLiabilies atamorzed costTotalLiabilities as per balance sheet:

Long-term debt – 2,596 2,596Short-term debt – 15,782 15,782Trade payables and accrued liabilities – 18,23518,235

– 36,61336,613

NOTES ASETEK Annual report 2024 / Page 54

12.EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Com-pany by the weighted average number of common shares outstanding during the period. Diluted earningsper share is calculated by adjusting the number of common shares outstanding used in the Basic calculationfor the effect of dilutive equity instruments, which include options and warrants to the extent their inclusionin the calculation would be dilutive.In a rights offering in May 2023, the Company issued new shares to existing shareholders at a discountedprice from fair market value. IAS 33 requires that the price discount be recognized as a bonus element, withretrospective adjustment to the denominators for both basic and diluted earnings per share amounts forall periods before the rights issue. In accordance with IAS 33, the Company calculated and applied a bonusfactor of 2.05 to the weighted average shares outstanding for all prior periods.

20242023Income attributable to equity holders of the Company (USD 000's)(23,936)6,001Weighted average number of common shares outstanding (000's)97,058 81,642BASIC EARNINGS PER SHARE($0.25) $0.07Weighted average number of common shares outstanding (000's)97,058 81,642Instruments with potentially dilutive effect: Warrants and options (000's)– –Weighted average number of common shares outstanding, diluted (000's)97,058 81,642DILUTED EARNINGS PER SHARE($0.25) $0.07As described in Note 24, on January 6, 2025, the Company issued 219,925 thousand shares in a rightsoffering. If these shares had been outstanding from January 1, 2024, the weighted average number of sharesoutstanding used for both basic and diluted earnings per share calculations would have been 316,983 thou-sand shares in 2024.

14.INTANGIBLE ASSETS

In 2021, the Company purchased intellectual property and other assets from a third party which includedintangible assets with an estimated fair value of $7.8 million, the majority of which were in development. Asthe assets are placed in service, they are being amortized over their estimated useful lives ranging from 6 to10 years.

Goodwill. Goodwill of $0.5 million originated from an acquisition by the Company in 2020. Goodwill isnot amortized but reviewed for impairment once a year and also if events or changes in circumstances indi-cate the carrying value may be impaired. If impairment is established, goodwill is written down to its lowerrecoverable amount. The goodwill recorded is denominated in Danish krone and is subject to fluctuation inthe consolidated financial statements due to changes in foreign exchange rates.Intangible assets as of December 31 are as follows:

(USD 000’s)20242023Goodwill513543Capitalized development costs5,1625,211Other assets5,2686,296TOTAL INTANGIBLE ASSETS10,94312,050Capitalized development costs. The Group routinely incurs costs directly attributable to the design andtesting of new or improved products to be held for sale. These costs are capitalized as intangible assets andamortized over the estimated useful lives of the products, typically three to sixty months.

Impairment tests are performed annually on developed assets and assets under construction. Impairmenttests are also performed on completed assets whenever there are indications of a need for write-offs and forassets still in development regardless of whether there have been indications for write downs. If the value ofexpected future free cash flow of the specific development project is lower than the carrying value, the assetis written down to the lower value. The booked value includes capitalized salary and related expenses for thecash flow producing project. Expected future free cash flow is based on budgets and anticipations preparedby management. The main parameters are the development in revenue, EBIT and working capital. Impair-ment losses represent principally assets which are no longer associated with a future income stream. Referto the end of this Note for the Company’s approach, assumptions and conclusion regarding impairment testof carrying values in 2024.

In 2024 and 2023, the Company recognized impairment of $2.0 million and $0.1 million, respectively, oncapitalized development costs associated with Liquid Cooling as a result of updated prioritization of futurecommercial projects.

The following table presents a summary of the Company’s development projects.

Capitalized development costs(USD 000’s)20242023COST:

Balance at January 19,8507,487Additions2,3202,561Deletions - completion of useful life-(61)Impairment loss(2,029)(137)BALANCE AT DECEMBER 3110,1419,850ACCUMULATED AMORTIZATION AND IMPAIRMENT LOSSES:

Balance at January 1(4,639) (2,724)Amortization for year(2,158) (2,053)Amortization associated with deletions-61Amortization associated with impairment losses1,81877BALANCE AT DECEMBER 31(4,979) (4,639)CARRYING AMOUNT5,1625,211Other intangible assets

(USD 000’s)20242023COST:

Balance at January 17,1956,958Additions- -Exchange rate differences(401)237BALANCE AT DECEMBER 316,7947,195ACCUMULATED AMORTIZATION AND IMPAIRMENT LOSSES:

Balance at January 1(899) (233)Amortization for year(704) (637)Exchange rate differences77 (29)BALANCE AT DECEMBER 31(1,526) (899)CARRYING AMOUNT5,2686,296

NOTES ASETEK Annual report 2024 / Page 55

14.INTANGIBLE ASSETS, continued

Impairment assessment. In compliance with IAS 36 Impairment of Assets, the Company assessed impair-ment of intangible assets as follows.// Identify Cash-Generating Units (CGUs). The Group has identified two principal businesses as its operatingsegments and CGUs – Liquid Cooling and SimSports. Assets pertaining to the Company’s third segment,Data center, are not significant. Refer to Note 5 for segment information.// Approach to assessment. The Group considers both qualitative and quantitative factors when determiningwhether an asset or CGU may be impaired. Management measured the book value of intangible assetsagainst the net present value of future projected cash flows for the respective CGU. In doing so, manage-ment incorporated the Company’s fiscal 2025 budget and subsequent year projections by managementutilizing market data and assistance from external advisors. Internal management reporting is in place tomonitor revenues and cash flows at an operating segment-level basis to enable management to properlyassess impairment.// Allocation of assets to CGU. Capitalized development costs are accounted for and specifically identifiedby CGU as either Liquid Cooling or SimSports products under development. Other intangible assets andgoodwill represents assets acquired in prior years associated with SimSports.// Key assumptions. In preparing the assessment, management used a five-year projection for Liquid Cool-ing and ten-year projection for SimSports. Liquid cooling revenue is projected to decrease by 6% in 2025and return to 14% growth in 2026 and 2027, and 10% growth thereafter. For SimSports, because it is ina higher growth stage and currently at a lower base level of revenue, annual growth rates averaging 75%are expected over the first three years, leveling off to 15% by 2029. SimSports’ anticipated growth rate isreflective of the high rate of new product introductions planned into the foreseeable future.The present value of expected cash flows is determined by applying a suitable discount rate. The discountrate of 14% was derived based on a weighted-average cost of capital (WACC) for comparable entities in theindustry, based on market data. For the calculation of the net present value (NPV), Asetek’s WACC is applied,which is based on the current borrowing rate and its expected development as well as the return on equityrequirement, which is determined based on the risk profile.

The following table summarizes the key assumptions used in the impairment assessment:

Key Assumption

LiquidCoolingSimsportsProjection time period analyzed5 years10 yearsCompound annual growth rate of revenue8.0%29.0%EBITDA margin in year 525.3%9.4%Discount rate14.0%14.0%Terminal growth rate4.1%4.1%Income tax rate22.0%22.0%// Conclusion. The Company’s assessment concluded that the net present value of projected future cash

flows is sufficient to support the valuation of intangible assets at December 31, 2024. As part of this test,management identified external indicators of impairment to the Company’s net asset book value, includ-ing a significant decrease in the Group’s market-based valuation. Refer to Note 2.22.

NOTES ASETEK Annual report 2024 / Page 56

15.PROPERTY, PLANT AND EQUIPMENT

In 2024, the Company capitalized $6.1 million of costs associated with the construction of a new headquar-ters facility, including $1.0 million of borrowing costs ($22.8 million and $1.1 million, respectively in 2023).Refer to Notes 19 and 25. The building was completed in September 2024 and occupied by the Company.Asetek recorded an impairment charge of $13.8 million against this asset in 2024. Refer to Note 2.22.

The Company is leasing sections of the building that are not occupied by Asetek and plans to continue to dothis for three to five years and to subsequently occupy the entire facility thereafter. The sections leased arecontiguous with the premises occupied by Asetek and cannot be feasibly separated. As a result, the asset isaccounted for as a domicile property, recorded at cost and depreciated over its estimated useful life of 50years. In 2024, the Company recognized $0.1 million of rental income associated with this lease.The following table presents total property, plant and equipment:

(USD 000’s)

LeaseholdImprovementsMachinery

Other xtures,

ngs, tools,

equipmentProperes

Building underconstruconTotalCOST:

Balance at January 1, 2023 1,657 7,043 3,573 5,969 23,854 42,095Additions 20 1,517 843 29 22,766 25,175Disposals (141) (852) (788) (654) – (2,435)Exchange rate differences (34) 246 92 98 – 402BALANCE AT DECEMBER 31, 2023 1,502 7,954 3,720 5,442 46,620 65,237Balance at January 1, 2024 1,502 7,954 3,720 5,442 46,620 65,237Additions 43 580 1,274 – 6,078 7,975Transfer–––52,698(52,698)–Disposals (1,383) (601) (764) (130) – (2,878)Exchange rate differences (40) (442) (159) (163) – (804)BALANCE AT DECEMBER 31, 2024 122 7,491 4,071 57,847 – 69,531ACCUMULATED DEPRECIATION:

Balance at January 1, 2023 (1,469) (5,173) (2,185) (2,184) – (11,011)Disposals 141 849 701 654 – 2,345Depreciation for the year (151) (1,058) (611) (590) – (2,410)Exchange rate differences 38 (173) (61) (68) – (264)BALANCE AT DECEMBER 31, 2023 (1,441) (5,555) (2,156) (2,188) – (11,340)Balance at January 1, 2024 (1,441) (5,555) (2,156) (2,188) – (11,340)Disposals 1,382 600 586 – – 2,568Impairment–––(13,791)–(13,791)Depreciation for the year (40) (1,154) (654) (740) – (2,588)Exchange rate differences 37 327 109 139 – 612BALANCE AT DECEMBER 31, 2024 (62) (5,782) (2,115) (16,580) – (24,539)CARRYING AMOUNT AT DECEMBER 31, 2023 61 2,399 1,564 3,254 46,620 53,897CARRYING AMOUNT AT DECEMBER 31, 2024 60 1,709 1,956 41,267 – 44,992

NOTES ASETEK Annual report 2024 / Page 57

16.TRADE RECEIVABLES AND OTHER

Trade receivables are non-interest bearing and are generally on payment terms of Net 30 days. The tradereceivables of Asetek Danmark A/S carry a general lien on the business of Asetek Danmark A/S (refer to Note

25). The carrying amount of trade receivables is approximately equal to fair value due to the short term to

maturity. Regarding credit risks, refer to Note 3.(USD 000’s)20242023Gross trade receivables11,34910,641Provision for uncollectible accounts(32) (59)NET TRADE RECEIVABLES11,31710,582Other receivables 1,2361,153Prepaid assets939876TOTAL TRADE RECEIVABLES AND OTHER13,49212,611Provision for uncollecble accounts(USD 000’s)20242023Balance at January 1(59) (41)Additions(32) (59)Reversals5941BALANCE AT DECEMBER 31(32) (59)The aging of trade receivables as of reporting date is as follows:

Past due:

(USD 000’s)TotalNot yet due1 to 30 days

31 to 60days

Over 60

daysDecember 31, 202411,349 9,2251,400 517 207December 31, 202310,641 9,355 1,142 71 73Credit Loss Provision Matrix 2024

Past due:

(USD 000’s)TotalNot yet due1 to 30 days

31 to 60

days

Over 60

daysGross carrying amount11,3499,2251,400517207Expected credit loss rate0.1%0.5%1.9%2.9%Lifetime expected credit loss(32)(9)(7)(10)(6)

NOTES ASETEK Annual report 2024 / Page 58

17.INVENTORIES

The Company’s inventories are pledged as security for lines of credit outstanding as per Note 19. Inventoriesat December 31 are as follows:

(USD 000’s)20242023Raw materials and work-in-process3,1975,320Finished goods4,3904,995Total gross inventories7,58710,315Less provision for inventory reserves(983) (1,262)TOTAL NET INVENTORIES6,6049,053(USD 000’s)20242023Inventories recognized as cost of sales during period(30,557) (41,624)Write-down of inventories to net realizable value(983) (1,262)A summary of the activity in the provision for inventory reserves is as follows:

Provision for inventory reserves

(USD 000’s)20242023Balance at January 1(1,262) (781)Additions(983) (1,262)Write-offs1,262781BALANCE AT DECEMBER 31(983) (1,262)

Credit Loss Provision Matrix 2023

Past due:

(USD 000’s)TotalNot yet due1 to 30 days

31 to 60

days

Over 60

daysGross carrying amount 10,641 9,355 1,142 71 73Expected credit loss rate0.1%0.4%4.2%58.9%Lifetime expected credit loss (59) (8) (5) (3) (43)

// Asetek Danmark A/S has a revolving line of credit with Jyske Bank for DKK 5 million (USD $0.7 million),

with a temporary increase to DKK 15 million (USD 2.1 million) until January 2, 2025. This line is secured bythe mortgage deed for the Group’s land and building and carries interest at the Danish CIBOR 3 rate plus

4.25 percentage points, which in total was 7.0% at December 31, 2024. The line matures on March 31,

2028. Amounts outstanding in excess of DKK 5 million are payable on January 2, 2025.Debt covenants. Under the terms of the lines of credit, the Company is required to comply with certainfinancial covenants as described in Note 3. As of December 31, 2024, the Company is in compliance with allcovenants.The capitalization rate for borrowing costs on lines of credit was 100% up through September 30, 2024,as all funds drawn to that point were utilized for additions to the qualifying asset.The Company has entered into agreements to finance previously purchased equipment. The amortizedcost of the equipment at transaction date was used as the estimate on fair value and the liability is account-ed for at amortized cost using the effective interest rate method. The financing agreements carry interestat the Danish CIBOR 3 rate plus 2.4 to 3.1 percentage points, which in total ranged from 5.2% to 5.9% atDecember 31, 2024.The following is a summary of the Company’s net debt and reconciliation of the lines of credit:

(USD 000’s)20242023Line of credit - due within one year(2,213)(14,700)Equipment financing - due within one year(320) (270)Leases - amounts due within one year(327) (812)DEBT INCLUDED IN CURRENT LIABILITIES(2,860)(15,782)Line of credit - due after one year(18,634)(1,489)Equipment financing - due after one year(556) (756)Leases - amounts due after one year(11) (351)TOTAL DEBT(22,061) (18,378)Less cash and cash equivalents3,2939,121NET DEBT(18,768) (9,257)(USD 000’s)20242023Beginning balance, line of credit(16,189) (18,971)Net paid (drawn) on line of credit(5,759) 3,354Foreign exchange impact1,101 (572)ENDING BALANCE, LINE OF CREDIT(20,847) (16,189)

NOTES ASETEK Annual report 2024 / Page 59

18.SHARE CAPITAL

Subsequent to 2024 year-end, on January 6, 2025, the Company issued 219,925,366 new common shares ofstock in a rights offering, raising net proceeds of $10.5 million after deduction of total issuance costs of $1.8million. Refer to Note 24.In May 2023, the Company issued 71,166,167 new common shares of stock in a rights offering, raisingnet proceeds of $16.1 million after deduction of total issuance costs of $3.7 million. The shares were issuedthrough an offering to then-existing shareholders to purchase 2.62 common shares for each share held ata price of NOK3.00 per share, representing a 64% discount on fair market value. The transaction meets therequirements for exemption from accounting for derivative financial instruments per IAS 32 Financial Instru-ments Presentation.In conjunction with the 2023 rights offering, the Company established a dual listing of its shares for trad-ing on Nasdaq Copenhagen, in addition to its existing listing on Oslo B?rs Stock Exchange. The Company del-isted from Oslo B?rs in March 2024. Operating expense in 2023 includes $0.8 million of non-recurring costsassociated with the dual listing, classified as a special item in operating expense on the income statement.

In 2024 and 2023, there were no stock options exercised.As of December 31, 2024, there are 97,058 thousand common shares outstanding with a nominal valueof 0.10 DKK per share and 1,256 thousand shares (1.3% of total shares, nominal value DKK 125.6 thousand)held in treasury. Included in equity is a reserve for treasury shares of approximately $11,206 thousand atDecember 31, 2024. All common shares outstanding are fully paid and carry no special rights.

The Company does not cancel shares that are repurchased but maintains them in treasury to fulfill optionexercises. Refer to ‘Shareholder information’ in this report for information regarding the composition ofAsetek shareholders.The following table summarizes the common share activity in the years presented:

(USD 000’s)20242023Common shares outstanding - January 197,058 25,891Common shares issued in rights offering– 71,167COMMON SHARES OUTSTANDING – DECEMBER 3197,058 97,058

19.NET DEBT

The Company’s debt at December 31, 2024 consists of the following:

// Asetek A/S, the Parent company, has a line of credit with Jyske Bank for DKK 137.5 million (USD 19.3

million) at December 31, 2024. This line is secured by the mortgage deed for the Group’s land and

building and carries interest at Danish CIBOR 3 rate plus 2.45 percentage points which in total was 5.2% at

December 31, 2024. The line specifies quarterly payments of DKK 2.35 million (USD 329,000) and matures

on March 31, 2028.

20.LEASES

Asetek leases certain equipment, office facilities and motor vehicles. Contracts are typically for fixed periodsof five years or more for office facilities, five years for equipment, and two years or less for motor vehicles.The leased asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-linebasis. Operating expenses associated with leases of one year or less are not significant in 2024 and 2023.In 2024, the Company moved its Aalborg, Denmark headquarters from a leased facility to a newly con-structed facility owned by Asetek in Svenstrup, Denmark. The lease on the former office space in Aalborgexpires in March 2025. The Company’s office space in Taipei, Taiwan is under lease until August 2025.Reconciliation of lease liability(USD 000’s)20242023Beginning balance1,163 1,664Additions to lease liabilities152 273Payments of lease liabilities(709) (802)Adjustments/reductions to leases(133) (54)Foreign exchange impact(135) 82ENDING BALANCE338 1,163Total cash payments for leases was $735,000 and $840,000 in 2024 and 2023, respectively.Future minimum lease payments are as follows as of the balance sheet date:

Future minimum lease payments

(USD 000’s)20242023Minimum lease payments at December 312211,010Asset residual at end of lease147183Less: amount representing interest(30) (30)TOTAL OBLIGATIONS UNDER LEASES3381,163Obligations under leases due within one year327812Obligations under leases due after one year11351TOTAL OBLIGATIONS UNDER LEASES3381,163

Right-of-use Assets. The following table presents a summary of the Right-of-use assets under lease, which isa subset of the property, plant and equipment presented in Note 15:

(USD 000’s)Machinery

Otherxtures,ngs, tools,equipmentProperesTotalCOST:

Balance at December 31, 2023 1,402 339 2,912 4,653Additions - 152 -152Disposals and transfers - (223) (130) (353)Exchange rate differences - (3) (163) (166)BALANCE AT DECEMBER 31, 2024 1,402 2652,6194,286ACCUMULATED DEPRECIATION:

Balance at December 31, 2023 (1,098) (68) (2,160) (3,326)Disposals and transfers - 90 - 90Depreciation for the year - (88) (496) (584)Exchange rate differences - 1 138139BALANCE AT DECEMBER 31, 2024 (1,098) (65)(2,518)(3,681)CARRYING AMOUNT AT DECEMBER 31, 2023 304 271 752 1,327CARRYING AMOUNT AT DECEMBER 31, 2024 304 200101605

NOTES ASETEK Annual report 2024 / Page 60

22.SUBSIDIARIES

The following entities are included in the consolidated accounts:

CompanyDomicileStake

VongShareAcvityAsetek A/S Denmark 100%100% TradingAsetek Holdings, Inc. USA 100%100% InactiveAsetek USA, Inc. USA 100%100% TradingAsetek Danmark A/S Denmark 100%100% TradingXiamen Asetek Computer Industry Co., Ltd. China 100%100% Trading

NOTES ASETEK Annual report 2024 / Page 61

21.TRANSACTIONS WITH RELATED PARTIES

The Company’s CEO serves as Chairman of the Board for a vendor that supplies information technology ser-vices to the Company. In 2024, the Company purchased services totaling $0.9 million ($0.8 million in 2023)from this vendor. At December 31, 2024 and 2023, the Company had outstanding payables to this vendor of$56,000 and $66,000, respectively.The Company sponsors and occasionally purchases equipment and other services from Valdemar EriksenRacing A/S (“VER”), an organization partially owned by the Company’s CEO. In the years ended December 31,2024 and 2023, the Company paid $14,500 and $2,000 to VER.

23.AUDIT FEES

The Group’s principal auditors perform audits for all of Asetek’s entities except for the Xiamen, China sub-sidiary, which is audited by a local firm. The Group’s principal auditors received a total fee of $415,000 and$586,000 in 2024 and 2023, respectively.Fees for services other than statutory audits provided by PricewaterhouseCoopers Statsautoriseret Revi-sionspartnerselskab to the group amount to $111,000 ($371,000 in 2023). Other assurance services in 2024were principally review and verification of filings associated with the Company’s rights offering preparationin late 2024. Tax and other services provided in 2024 were transfer pricing documentation and benchmark-ing, U.S. tax structure considerations, and other miscellaneous services. Other assurance services in 2023were principally financial review and verification of filings associated with the Company’s rights offerings andlisting on Nasdaq Copenhagen in May 2023. Tax and other services provided in 2023 were tax advice relatedto transfer pricing and other miscellaneous services.The fee is distributed between these services:

(USD 000’s)20242023Audit267215Other assurance services51294Tax services8862Other services915TOTAL415586

25.CONTINGENT LIABILITIES

Debt collateral. In conjunction with the debt referenced in Note 19, Asetek’s creditors have secured thefollowing as collateral for the credit provided: The total loan amount of DKK 142.5 million (USD 20.0 million)at the Group level with Jyske Bank, representing DKK 137.5 million (USD 19.3 million) to Asetek A/S and DKK5 million (USD 0.7 million) to Asetek Denmark A/S, is secured by the mortgage deed for the property locatedat Skjoldet 20, 9230 Svenstrup. The mortgage deed of DKK 140 million (USD 19.6 million) serves as collateralfor the loan commitments in both Asetek A/S and Asetek Danmark A/S. Asetek A/S has executed a guaranteeto Jyske Bank for all outstanding matters with Asetek Danmark A/S.Legal proceedings. In the ordinary course of conducting business, the Company is involved in various intel-lectual property proceedings, including those in which it is a plaintiff that are complex in nature and haveoutcomes that are difficult to predict. Asetek records accruals for such contingencies to the extent that it isprobable that a liability will be incurred, and the amount of the related loss can be reasonably estimated.The Company’s assessment of each matter may change based on future unexpected events. An unexpected

adverse judgment in any pending litigation could cause a material impact on the Group’s business opera-tions, intellectual property, results of operations or financial position. In addition to the above, Asetek Groupis engaged in various other ongoing cases. In the opinion of Management, neither settlement nor contin-uation of such proceedings are expected to have a material effect on Asetek’s financial position, operatingprofit or cash flow. The Company has challenged the Danish tax authorities in a matter related to the deductiblity of expenses related to stock options granted to certain employees of a subsidiary. The maximum tax exposure for theCompany is about $0.1 million. A formal complaint has been initiated and further proceedings are pending.On September 30, 2024, Cooler Master Co., Ltd. filed a review petition with the Patent Trial and AppealBoard (PTAB) of the U.S. Patent and Trademark Office to challenge the validity of Asetek’s ’681 patent. Asetekwill soon file an opposition to Cooler Master’s petition, explaining flaws in Cooler Master’s petition andrequesting that the PTAB not institute trial on the petition. The PTAB will decide whether to institute triallater in 2025. If the PTAB institutes trial, Asetek will have the opportunity to provide more fulsome briefing toexplain why the petition should be denied.

NOTES ASETEK Annual report 2024 / Page 62

24.POST BALANCE SHEET EVENTS

The Company has evaluated the period after December 31, 2024 up through the date of the ManagementStatement and determined that there were no transactions that required recognition in the Company’sfinancial statements, except for the following:

On January 6, 2025, the Company issued 219,925,366 new common shares of stock in a rights offeringraising net proceeds of DKK 75.5 million, after deducting offering expenses of DKK 12.5 million (Net proceedsof USD 10.5 million, after deducting offering expenses of USD 1.8 million). The shares were issued throughan offering to then-existing shareholders to purchase three common shares for each share held at a price ofDKK 0.40 per share, representing an approximate discount of 14% from fair market value. Incremental costsincurred directly attributable to the share issuance will be recorded as an offset to equity in January 2025.The transaction meets the requirements for exemption from accounting for derivative financial instrumentsper IAS 32 Financial Instruments Presentation.On January 27, 2025, in consideration of the dilution effect of the January rights offering, the Board ofDirectors reduced the exercise prices of outstanding share options by 51%. The effect of this option repricingis not expected to have a material impact to share-based compensation expense.

XXXXX ANNUAL REPORT 2024 / Page 58

PARENT COMPANYFINANCIAL STATEMENTS

Comprehensive income statement,parent company64Balance Sheet, parent company65Statement of changes in equity,parent company66Statement of cash ows, parent company67Notes, parent company68

COMPREHENSIVE INCOME STATEMENT, PARENT COMPANY

(USD 000’s)Note20242023Service fees142,646 3,699Rental income7507 –TOTAL REVENUE3,153 3,699Research and development3, 4(52) (61)Selling, general and administrative3, 4(4,065) (3,769)Special items3(13,791) (847)TOTAL OPERATING EXPENSES(17,908) (4,677)OPERATING INCOME(14,754) (978)Foreign exchange gain (loss)6947 (294)Finance income65 101Finance costs6(1,414) (333)TOTAL FINANCIAL INCOME(462) (526)INCOME BEFORE TAX(15,216) (1,504)Income tax (expense) benefit10(763)58INCOME FOR THE YEAR(15,979)(1,446)TOTAL COMPREHENSIVE INCOME (LOSS)(15,979)(1,446)

FINANCIAL STATEMENTS, PARENT COMPAMY ASETEK Annual report 2024 / Page 64

BALANCE SHEET, PARENT COMPANY

(USD 000’s)Note20242023ASSETSNON-CURRENT ASSETSInvestments in subsidiaries1120,10020,100Property, plant and equipment742,15049,549Receivables from subsidiaries12–337TOTAL NON-CURRENT ASSETS62,25069,986CURRENT ASSETSOther assets446999Cash and cash equivalents49183TOTAL CURRENT ASSETS4951,182TOTAL ASSETS62,74571,168

(USD 000’s)Note20242023EQUITY AND LIABILITIESEQUITYShare capital131,4781,478Retained earnings43,26458,961Translation and other reserves(11,206) (11,206)TOTAL EQUITY33,53649,233NON-CURRENT LIABILITIESPayables to subsidiaries128,6345,323Long-term debt8, 917,998–TOTAL NON-CURRENT LIABILITIES26,6325,323CURRENT LIABILITIESShort-term debt8, 91,70014,896Accrued liabilities437153Accrued compensation and employee benefits29965Trade payables1411,498TOTAL CURRENT LIABILITIES2,57716,612TOTAL LIABILITIES29,20921,935TOTAL EQUITY AND LIABILITIES62,74571,168

FINANCIAL STATEMENTS, PARENT COMPAMY ASETEK Annual report 2024 / Page 65

STATEMENT OF CHANGES IN EQUITY, PARENT COMPANY

(USD 000’s)

Sharecapital

Sharepremium

Translaonreserves

Treasuryshare reserves

RetainedearningsTotalEQUITY AT DECEMBER 31, 2022 444 – – (11,206) 44,785 34,023Total comprehensive income for 2023Income for the year – – – – (1,446) (1,446)Total comprehensive income for 2023 – – – – (1,446) (1,446)Transactions with owners in 2023Shares issued in rights offering, net of issuance costs 1,034 15,108 – – 16,142Transfer – (15,108) – – 15,108 –Share-based payment expense – – – – 514 514Transactions with owners in 2023 1,034 – – – 15,622 16,656EQUITY AT DECEMBER 31, 2023 1,478 – – (11,206) 58,961 49,233Total comprehensive income for 2024Income for the year – – – – (15,979) (15,979)Total comprehensive income for 2024 – – – – (15,979) (15,979)Transactions with owners in 2024

Share-based payment expense – – – – 282 282Transactions with owners in 2024 – – – – 282 282EQUITY AT DECEMBER 31, 2024 1,478 – – (11,206) 43,264 33,536

FINANCIAL STATEMENTS, PARENT COMPAMY ASETEK Annual report 2024 / Page 66

STATEMENT OF CASH FLOWS, PARENT COMPANY

(USD 000’s)Note20242023CASH FLOWS FROM OPERATING ACTIVITIESIncome (loss) for the year(15,979) (1,446)Depreciation and amortization7407 86Impairment of property, plant and equipment713,791–Share-based payments expense4282 514Finance cost incurred62,396 1,062Finance cost, cash paid6(2,389) (1,058)Income tax expense (income)10763 (58)Cash received (paid) for income taxes10(1,287) 841Changes in other assets553 3,548Changes in trade payables and accrued liabilities(322)(3,385)NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES(1,786) 104CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property and equipment7(6,780) (22,985)Net receipts from (payments to) subsidiaries123,648 4,938NET CASH USED IN INVESTING ACTIVITIES(3,132) (18,047)FREE CASH FLOW(4,918) (17,943)

(USD 000’s)Note20242023CASH FLOWS FROM FINANCING ACTIVITIESLease payments on right-of-use assets9(63) (88)Borrowings (repayment) on line of credit85,790 (18)Proceeds from issuance of share capital13– 17,019Costs incurred for issuance of share capital13–(878)Financing of equipment76 –NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES5,803 16,035Effect of exchange rate changes on cash and cash equivalents(1,019)482NET CHANGES IN CASH AND CASH EQUIVALENTS(134)(1,426)Cash and cash equivalents at beginning of period1831 609CASH AND CASH EQUIVALENTS AT END OF PERIOD49 183SUPPLEMENTAL DISCLOSURE - NON-CASH ITEMSAssets acquired under leases152 273

FINANCIAL STATEMENTS, PARENT COMPAMY ASETEK Annual report 2024 / Page 67

Special items. In 2024, the Company recorded a non-cash impairment charge of $13.8 million as a conse-quence of an assessed impairment within the cash generating units. This one-time charge is classifed as aspecial item in operating expense on the income statement and was recorded as impairment of the Compa-ny’s headquarters facility in property, plant and equipment. Refer to Note 2.22 in the consolidated financialstatements.In May 2023, In conjunction with the rights offering described in Note 18 of the consolidated financialstatements, the Company began transition of its shares for trading from Oslo Stock Exchange to Nasdaq Co-penhagen. Operating expense in 2023 includes $0.8 million of non-recurring costs associated with this listingchange, classified as a special item in operating expense on the income statement.

3.TOTAL OPERATING EXPENSES

Operating expenses consisted of the following for the year ended December 31(USD 000’s)20242023Personnel expenses (Note 4)2,1242,462Legal, consultants and auditor769622Special items13,791847Other expenses1,224746TOTAL EXPENSES17,90817,9084,6774,677

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The 2024 financial statements for Asetek A/S have been prepared in accordance with International FinancialReporting Standards (IFRS) as issued by IASB and adopted by the EU.

The financial statements are presented in U.S. Dollars (USD), which is the functional currency.The accounting policies for the Parent Company are the same as for the Asetek Group, as per Note 2 tothe consolidated financial statements, with the exception of the items listed below:

1.1. Dividends on investments in subsidiaries, joint ventures and associates. Dividends on investments in

subsidiaries, joint ventures and associates are recognized as income in the income statement of theParent Company in the financial year in which the dividend is declared.

1.2. Investments in subsidiaries, joint ventures and associates. Investments in subsidiaries, joint ventures

and associates are measured at the lower of cost or the recoverable amount. An impairment test onthe investment in subsidiaries is performed if the carrying amount of the subsidiaries’ net assets isbelow the carrying value of the Parent Company’s investments in the consolidated financial state-ments.

NOTES, PARENT COMPANY

NOTES, PARENT COMPANY ASETEK Annual report 2024 / Page 68

1.GENERAL INFORMATION

Regarding accounting policies, refer to Note 2 to the Consolidated Financial Statements.

4.PERSONNEL EXPENSES

Total personnel costs by type for the year ended December 31(USD 000’s)20242023Salaries, pension and other1,8421,948Share-based payment282514TOTAL PERSONNEL EXPENSES2,1242,462Total personnel costs by classification in the income statement for the year ended December 31

(USD 000’s)20242023Research and development5261Selling, general and administrative2,0722,401TOTAL EXPENSES2,1242,462The average number of employees in the Parent company is two for both years presented. The figures listedabove include a portion of the executive management’s cash compensation based on an estimate of theactual resources allocated to the management of the Parent company. The figures include incentive-basedcompensation in the form of share options and warrants granted to employees in the Asetek Group. Referto Notes 6 and 7 in the Consolidated Financial Statements for information regarding incentive compensationprograms and management remuneration.Remuneration of the Group Board of Directors is specified in Note 6 to the Consolidated FinancialStatements. The Company’s share-based incentive pay program is described in Note 7 to the ConsolidatedFinancial Statements.

5.AUDIT FEES

Fees associated with the Parent company financial statements for services provided by the Company’s princi-pal auditors were as follows:

(USD 000’s)20242023Audit189 157Other assurance services51 294Tax services88 62Other services7 14TOTAL335 527Services other than statutory audit are described in Note 23 in the consolidated financial statements.

NOTES, PARENT COMPANY ASETEK Annual report 2024 / Page 69

6.FINANCIAL INCOME AND COSTS

(USD 000’s)20242023FOREIGN EXCHANGE GAIN (LOSS)947 (294)Interest income on loans to subsidiaries– 90Interest from bank accounts5 12FINANCE INCOME5 101Interest cost on loans from subsidiaries(1,027) (326)Interest cost on line of credit(1,237) (698)Interest cost on leases and equipment financing(7) (4)Other banking and finance fees(126) (34) Subtotal(2,396) (1,062)Less: amount capitalized982 729FINANCE COST (1,414) (333)

7.PROPERTY, PLANT AND EQUIPMENT

In September 2024, the Company completed construction of its headquarters building and occupied it.The Company is leasing sections of the building that are not occupied by Asetek and plans to continue todo so for three to five years and to subsequently occupy the entire facility thereafter. The sections leasedare contiguous with the premises occupied by Asetek and cannot be feasibly separated. As a result, theasset is accounted for as a domicile property, recorded at cost and depreciated over its estimated usefullife of 50 years. In 2024, the Company recorded an impairment charge of $13.8 million as a consequence ofan assessed impairment within the cash generating units. Refer to Note 2.22 in the consolidated financialstatements.As of December 31, 2024 and 2023, carrying value of vehicles under right-of-use leases totaled $181,000and $195,000, respectively, and their associated leases are for terms of 12 months. Total property, plant andequipment is specified as follows:

Company

Vehicles andsoware

Land andBuilding

Building under

construconTotalCOST:

Balance at January 1, 2023 158 2,493 23,854 26,505Additions 492 – 22,766 23,258Disposals (95) – – (95)BALANCE AT DECEMBER 31, 2023 555 2,493 46,620 49,668Balance at January 1, 2024 555 2,493 46,420 49,668Additions 854 – 6,078 6,932Transfer–52,698(52,698)–Disposals (223) – – (223)BALANCE AT DECEMBER 31, 2024 1,186 55,191 – 56,377ACCUMULATED DEPRECIATION:

Balance at January 1, 2023 (75) – – (75)Disposals 42 – – 42Depreciation for the year (86) – – (86)BALANCE AT DECEMBER 31, 2023 (119) – – (119)Balance at January 1, 2024(119) – – (119)Impairment–(13,791)–(13,791)Disposals 90 – – 90Depreciation for the year(163) (244) – (407)BALANCE AT DECEMBER 31, 2024 (192) (14,035) - (14.227)CARRYING AMOUNT AT DECEMBER 31, 2023 436 2,493 46,620 49,549CARRYING AMOUNT AT DECEMBER 31, 2024 99441,156 - 42,150

11.INVESTMENT IN SUBSIDIARIES

(USD 000’s)

Investment inAsetek Holdings, Inc.Balance at December 31, 2023 20,100Additions –Balance at December 31, 2024 20,100CARRYING AMOUNT AT DECEMBER 31, 2023 20,100CARRYING AMOUNT AT DECEMBER 31, 2024 20,100Asetek A/S acquired 100% of Asetek Holdings, Inc. through the exchange of shares in February 2013. At thetime of acquisition, Asetek Holdings, Inc. had negative net equity, resulting in the initial investment to bevalued at zero. Asetek Holdings, Inc. represents Asetek A/S’s only direct investment in subsidiaries.

NOTES, PARENT COMPANY ASETEK Annual report 2024 / Page 70

8.NET DEBT

Asetek A/S has a long-term line of credit with Jyske Bank for DKK 137.5 million (USD 19.3 million) at Decem-ber 31, 2024, with a temporary increase of DKK 1.6 million (USD 0.2 million) payable on January 2, 2025. Thisline is secured by the mortgage deed for the Group’s land and building and carries interest at Danish CIBOR 3rate plus 2.45 percentage points which in total was 5.2% at December 31, 2024. The line specifies quarterlypayments of DKK 2.35 million (USD 329,000) and matures on March 31, 2028.Net debt is as follows at December 31:

(USD 000’s)20242023Line of credit - amounts due within one year(1,537) (14,700)Leases - amounts due within one year(151) (196)Equipment financing -amounts due within one year(12)–DEBT INCLUDED IN CURRENT LIABILITIES(1,700)(14,896)Line of credit - amounts due after one year(17,934)–Equipment financing - amounts due after one year(64)–TOTAL DEBT(19,698) (14,896)Cash and cash equivalents49183NET DEBT(19,649) (14,713)Reconciliation of line of credit(USD 000’s)20242023Beginning balance(14,700) (14,236)Net paid (drawn) on line of credit(5,790)18Foreign exchange impact1,018 (482)ENDING BALANCE, LINE OF CREDIT(19,471) (14,700)

9.LEASES

Obligations under leases are as follows:

(USD 000’s)20242023Minimum lease payments as of December 31515Asset residual value at end of lease147184Less: amount representing interest(1) (3)TOTAL OBLIGATIONS UNDER LEASES151196

Total lease obligations due within one year were $151,000 and $196,000 at December 31, 2024 and 2023,respectively. Operating expenses associated with leases of one year or less are not significant.

10.INCOME TAX

At December 31, 2024 and 2023, the tax benefit (provision) for Asetek A/S differed from the statutory taxrate principally as a result of impairment charges and share compensation expenses that are treated differ-ently for tax purposes.

(USD 000’s)20242023INCOME BEFORE TAX(15,216) (1,504)Tax calculated at domestic rates applicable to profits/losses in respectivecountries

3,348 331Differences between book and tax(4,111)(273)INCOME TAX (EXPENSE) (763)58

15.EVENTS AFTER THE REPORTING PERIOD

Refer to Note 24 to the consolidated financial statements.

14.TRANSACTIONS WITH RELATED PARTIES

Asetek A/S charges its subsidiaries a management service fee. Reference Notes 6 and 12 regarding trans-actions with subsidiaries. With regard to transactions with related parties that are not subsidiaries, refer toNote 21 to the consolidated financial statements.

16.CONTINGENT LIABILITIES

The Danish group enterprises are jointly and severally liable for tax on group income subject to joint taxation,as well as for Danish withholding taxes by way of dividend tax, royalty tax, tax on unearned income and anysubsequent adjustments to these. Asetek A/S has executed a guarantee to its Group’s principal bank, JyskeBank, for all outstanding matters with its wholly owned subsidiary, Asetek Danmark A/S. Refer to Note 25 tothe Consolidated Financial Statements.

NOTES, PARENT COMPANY ASETEK Annual report 2024 / Page 71

12.NET RECEIVABLES FROM (PAYABLES TO) SUBSIDIARIES

Net receivables is as follows at December 31:

(USD 000’s)20242023Asetek Danmark A/S(7,220) (5,323)Asetek USA, Inc.(1,541)135Asetek Xiamen31109Asetek Holdings, Inc.9693NET DUE FROM (TO) SUBSIDIARIES(8,634) (4,986)AVERAGE EFFECTIVE INTEREST RATE10.3%10.2%During construction of the headquarters facility, Asetek Danmark A/S maintained a line of credit to supportfinancing of the building for Asetek A/S. The total outstanding on this line of credit was $0 and $1.5 million asof December 31, 2024 and 2023. Refer to Note 19 in the consolidated financial statements. Borrowing costsof $0.4 million and $0.4 million incurred in 2024 and 2023, respectively, on the Asetek Danmark A/S line ofcredit are included as capitalized cost of the building.

13.EQUITY

Refer to Note 18 to the Consolidated Financial Statements.

Aalborg, DenmarkMarch 7, 2025Executive Board

André S. EriksenCEO

Peter Dam Madsen

CFOBoard of Directors

René Svendsen-TuneChairman

Erik Damsgaard

Vice chairman

Jukka Pertola

Member

Anja MonradMember

MANAGEMENT STATEMENT

The Board of Directors and Executive Board have today considered and adopted the Annual Report of AsetekA/S for the financial year 1 January – 31 December 2024.The Consolidated Financial Statements and the Parent Company Financial Statements have been pre-pared in accordance with IFRS Accounting Standards as adopted by the EU and further requirements in theDanish Financial Statements Act. Management’s Review has been prepared in accordance with the DanishFinancial Statements Act.In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements givea true and fair view of the financial position at 31 December 2024 of the Group and the Parent Company andof the results of the Group and Parent Company operations and cash flows for 2024.

In our opinion, Management’s Review includes a fair review of the development in the operations andfinancial circumstances of the Group and the Parent Company, of the results for the year and of the financialposition of the Group and the Parent Company as well as a description of the most significant risks and ele-ments of uncertainty, which the Group and the Parent Company are facing.In our opinion, the annual report of Asetek A/S for the financial year 1 January to 31 December 2024 withthe file name Asetek-2024-12-31-en.zip is prepared, in all material respects, in compliance with the ESEFRegulation.

We recommend that the Annual Report be adopted at the Annual General Meeting.

MANAGEMENT STATEMENT ASETEK Annual report 2024 / Page 72

INDEPENDENT AUDITOR’S REPORTS

To the shareholders of Asetek A/SREPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Our opinionIn our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the Group’s and the Parent Compa-ny’s financial position at 31 December 2024 and of the results of the Group’s and the Parent Company’s operations and cash flows for the financial year 1 January to31 December 2024 in accordance with IFRS Accounting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act.Our opinion is consistent with our Auditor’s Long-form Report to the Audit Committee and the Board of Directors.What we have auditedThe Consolidated Financial Statements and Parent Company Financial Statements of Asetek A/S for the financial year 1 January to 31 December 2024 comprise in-come statement and statement of comprehensive income, balance sheet, statement of changes in equity, cash flow statement and notes, including material account-ing policy information for the Group as well as for the Parent Company. Collectively referred to as the “Financial Statements”.Basis for opinionWe conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilitiesunder those standards and requirements are further described in the Auditor’s responsibilities for the audit of the Financial Statements section of our report.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.IndependenceWe are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Account-ants (IESBA Code) and the additional ethical requirements applicable in Denmark. We have also fulfilled our other ethical responsibilities in accordance with theserequirements and the IESBA Code.To the best of our knowledge and belief, prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No 537/2014 were not provided.AppointmentFollowing the admission of the shares of Asetek A/S for listing on Oslo Stock Exchange, we were first appointed auditors of Asetek A/S on 24 April 2014 for the finan-cial year 2014. We have been reappointed annually by shareholder resolution for a total period of uninterrupted engagement of 11 years including the financial year2024. We were reappointed following a tendering process at the General Meeting on 30 April 2024.

INDEPENDENT AUDITOR’S REPORTS ASETEK Annual report 2024 / Page 73

Key audit mattersKey audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Statements for 2024. These matterswere addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion onthese matters.

Key audit matter

Capitalization of development costsThe Group capitalizes development costs when certain criteria according to IFRSare met. The criteria for recognition and measurement of development costsare subject to Management’s judgment and assumptions, which is uncertain bynature. Completed development projects are assessed for impairment indica-tions. For in-progress development projects impairment tests are performed atleast annually. The impairment tests are based on the strategy plan approved byManagement and value-in-use calculations based on expected future cash flows.We focused on this area because the criteria for recognition and measurementof development projects are subject to Management judgments and assump-tions. Refer to note 14 in the Consolidated Financial Statements.

How our audit addressed the key audit matterWe assessed whether the Group’s accounting policies are in accordance withIFRS Accounting Standards.We carried out risk assessment procedures in order to obtain an understandingof IT systems, business processes and relevant controls regarding capitalized de-velopment costs. For the controls, we assessed whether they were designed andimplemented to effectively address the risk of material misstatement.We selected a sample of in-progress development projects and consideredwhether all criteria described in IFRS Accounting Standards were met as basis forcapitalization.We evaluated and challenged Management’s assessment of impairment indica-tors of completed development projects based on the commercial prospects ofthe projects. For in-progress development projects and projects with impairmentindicators, we challenged the key assumptions applied in the value-in-use cal-culations. Our work was based on our understanding of the business cases andsignificant assumptions applied.We challenged whether the intent to finalize the projects remain and whetherthe projects are expected to generate future economic benefits exceeding thecarrying values.

INDEPENDENT AUDITOR’S REPORTS ASETEK Annual report 2024 / Page 74

Key audit matter

Impairment of non-current assets

During 2024, Management identified impairment indicators for the Group.Consequently, Management prepared impairment tests resulting in impairmentlosses recognized for the Group’s property, plant and equipment.The impairment tests are based on Management’s assumptions of expected cashinflows and outflows for the individual cash-generating units (CGUs). The impair-ment tests are prepared as value-in-use calculations for the individual CGUs.The significant assumptions in estimating the future cash flows are Manage-ment’s outlook for revenue growth rates, margins and operating expenses, aswell as Management’s determination of the discount rate.We focused on this area because the impact on the profit for the year is signif-icant, and because the impairment tests of non-current assets are consideredcomplex non-routine transactions and require significant judgments in determin-ing the assumptions.Reference is made to notes 2.22 and 15 in the Consolidated Financial State-ments.

How our audit addressed the key audit matterAs part of our audit, we considered the appropriateness of the CGUs defined byManagement and the methodology used by Management to assess the carryingamount of the non-current assets assigned to CGUs.We performed detailed testing of Management’s impairment tests for the CGUs,and challenged the significant assumptions affecting the future cash flows, in-cluding assumptions related to revenue growth, margins and operating expensesas well as the discount rate.We used our internal valuation specialists to independently challenge the dis-count rate used. In calculating the discount rate, the key inputs used were inde-pendently sourced from market data, and we assessed the methodology applied.Further, we tested the mathematical accuracy of the impair-ment models pre-pared by Management.Finally, we assessed the adequacy of disclosures provided byManagement in the Financial Statements.

INDEPENDENT AUDITOR’S REPORTS ASETEK Annual report 2024 / Page 75

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 conclusion 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 Re-view is materially inconsistent with the Financial Statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated.Moreover, we considered whether Management’s Review includes the disclosures required by the Danish Financial Statements Act.Based on the work we have performed, in our view, Management’s Review is in accordance with the Consolidated Financial Statements and the Parent CompanyFinancial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstate-ment in Management’s Review.

Management’s responsibilities for the Financial Statements

Management is responsible for the preparation of consolidated financial statements and parent company financial statements that give a true and fair view inaccordance with IFRS Accounting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act, and for such internal control asManagement 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 Group’s and the Parent Company’s ability to continue as a going concern, disclos-ing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Group or theParent Company or to cease operations, or has no realistic alternative but to do so.Auditor’s responsibilities for the audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud orerror, 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 inaccordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users takenon the basis of these Financial Statements.As part of an audit in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgment and maintain professionalskepticism 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 tothose 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 resultingfrom fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internalcontrol.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 pur-pose of expressing an opinion on the effectiveness of the Group’s and the Parent Company’s internal control.Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.

INDEPENDENT AUDITOR’S REPORTS ASETEK Annual report 2024 / Page 76

Conclude on the appropriateness of Management’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material un-certainty exists related to events or conditions that may cast significant doubt on the Group’s and the Parent Company’s ability to continue as a going concern. If weconclude 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 suchdisclosures 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, futureevents or conditions may cause the Group or the Parent Company to cease to continue as a going concern.Evaluate the overall presentation, structure and content of the Financial Statements, including the disclosures, and whether the Financial Statements represent theunderlying transactions and events in a manner that gives a true and fair view.Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the groupas a basis for forming an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and review of the audit work performedfor purposes of the group audit. We remain solely responsible for our audit opinion.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 internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to commu-nicate with them all relationships and other matters that may reasonably be thought to bear on our independence and, where applicable, actions taken to eliminatethreats or safeguards applied.From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the FinancialStatements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes publicdisclosure about the matter.Report on compliance with the ESEF RegulationAs part of our audit of the Financial Statements we performed procedures to express an opinion on whether the annual report of Asetek A/S for the financial year1 January to 31 December 2024 with the filename Asetek-2024-12-31-en.zip is prepared, in all material respects, in compliance with the Commission DelegatedRegulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) which includes requirements related to the preparation of the annual report inXHTML format and iXBRL tagging of the Consolidated Financial Statements including notes.Management is responsible for preparing an annual report that complies with the ESEF Regulation. This responsibility includes:

? The preparing of the annual report in XHTML format;? The selection and application of appropriate iXBRL tags, including extensions to the ESEF taxonomy and the anchoring thereof to elements in the taxonomy, for allfinancial information required to be tagged using judgement where necessary;? Ensuring consistency between iXBRL tagged data and the Consolidated Financial Statements presented in human-readable format; and? For such internal control as Management determines necessary to enable the preparation of an annual report that is compliant with the ESEF Regulation.

INDEPENDENT AUDITOR’S REPORTS ASETEK Annual report 2024 / Page 77

Our responsibility is to obtain reasonable assurance on whether the annual report is prepared, in all material respects, in compliance with the ESEF Regulation basedon the evidence we have obtained, and to issue a report that includes our opinion. The nature, timing and extent of procedures selected depend on the auditor’sjudgement, including the assessment of the risks of material departures from the requirements set out in the ESEF Regulation, whether due to fraud or error. Theprocedures include:

? Testing whether the annual report is prepared in XHTML format;? Obtaining an understanding of the company’s iXBRL tagging process and of internal control over the tagging process;? Evaluating the completeness of the iXBRL tagging of the Consolidated Financial Statements including notes;? Evaluating the appropriateness of the company’s use of iXBRL elements selected from the ESEF taxonomy and the creation of extension elements where no suita-

ble element in the ESEF taxonomy has been identified;? Evaluating the use of anchoring of extension elements to elements in the ESEF taxonomy; and? Reconciling the iXBRL tagged data with the audited Consolidated Financial Statements.In our opinion, the annual report of Asetek A/S for the financial year 1 January to 31 December 2024 with the filename Asetek-2024-12-31-en.zip is prepared, in allmaterial respects, in compliance with the ESEF Regulation.In our opinion, the annual report of Asetek A/S for the financial year 1 January to 31 December 2024 with the filename Asetek-2024-12-31-en.zip is prepared, in allmaterial respects, in compliance with the ESEF Regulation.Aalborg, 7 March 2025PricewaterhouseCoopersStatsautoriseret RevisionspartnerselskabCVR no 33 77 12 31Mads Melgaard Line BorregaardState Authorised Public Accountant State Authorised Public Accountantmne34354 mne34353

INDEPENDENT AUDITOR’S REPORTS ASETEK Annual report 2024 / Page 78

DEFINITIONS OF RATIOS AND METRICS

Asetek uses various metrics, financial and non-financial ratios which provide shareholders with usefulinformation about the Group’s financial position, performance and development.PROFIT & LOSSAdjusted EBITDAOperating income + amortization & depreciation

+ share-based compensation + special itemsGross marginGross profit / RevenueOperating marginOperating income / RevenueReturn on InvestedCapital (ROIC)

Income for the year / Invested capitalOrganic growth(Revenue current year – Comparable revenue* prior year) / Comparable

revenue* prior year

BALANCE SHEETInvested capitalEquity raised from sale of shares and conversion of

debt + interest bearing debtQuick ratio(Cash and cash equivalents + Trade receivables and other) /

Total Current LiabilitiesCurrent ratioTotal current assets / Total current liabilitiesDays sales outstandingTrade receivables / (Revenue / 365 days)Inventory turns per yearCost of sales / (beginning inventory + ending inventory / 2)Days payable outstandingTrade payables / (Cost of sales / 365 days)Debt to equityInterest-bearing debt / Total equity

STOCK MARKETEarnings per share, basicRefer to Note 12 of the Consolidated financial statementsEarnings per share, dilutedRefer to Note 12 of the Consolidated financial statementsShare price to earningsShare price / DKK to USD exchange rate / Earnings per share,

diluted. If earnings is negative, not reported.Market capitalization(Shares issued – Treasury shares) x (Share price in DKK /

DKK to USD exchange rate)

BUSINESS DRIVERS

Average selling price per unit,Liquid Cooling

Liquid cooling revenue / Sealed loop units shippedRevenue per employeeRevenue / Number of employees

* Comparable revenue excludes changes in revenue attributable to foreign exchange rates and any acquisitions or divestments.

DEFINITION OF RATIOS AND METRICS ASETEK Annual report 2024 / Page 79