Interim report for the period 1 January – 30 June 2020

Second quarter of 2020

Numbers in parentheses refers to outcomes during the corresponding period of the previous year.

• Revenues of SEK 0 million (0).
• Other operating income of SEK 0.4 million (0.2) mainly pertaining to grants.
• Operating costs decreased to SEK 0.8 million (1.2). Administrative expenses decreased to SEK 2.2 million (2.5). The expenses were reduced by a one-off item by SEK 0.8 million, pertaining to an IPO-cost item that was settled at a lower amount than reserved for.
• Profit (loss) for the period amounted to SEK -2.8 million (-3.7).
• Earnings per share of SEK -0.1 (-0.3).
• As of 30 June 2020, cash and cash equivalents amounted to SEK 99 million (6.7) and shareholders’ equity amounted to SEK 95 million (2.1)
• Total number of outstanding shares amounted to 35,194,844 (28,839,250).
• Cash flow from operating activities decreased to SEK -4.7 million (-3.6), primarily due to payment of current payables.
• Average number of employees of 17 (14).

Significant events in the quarter

• EWP entered into an official Concession Agreement with APDL (A Administração dos Portos do Douro, Leixões e Viana do Castelo) regarding the usage of an area potentially suitable for the construction, operation and maintenance of a wave energy power plant of up to 20MW in four locations owned and operated by APDL. According to the agreement entered between the parties, APDL will provide EWP with the concession for its’ breakwaters for a period of 25 to 30 years. The power plant is planned to be constructed and commissioned in two stages. At the first stage, Eco Wave Power will construct an up to 5MW project. Whereas in the second stage, Eco Wave Power will construct, operate and maintain the remaining capacity of the plant (15 to 19 additional MWs). APDL will have a right of first refusal (ROFR) to invest in both stages of the project.
• Eco Wave Power continues to reinforce its’ patent portfolio. The Company submitted for three patents; in the USA (US 16/762931), the European Union (EPO 17932991.7) and in Israel (274332). Patent number 254988 was approved for patent registration.
• The AGM resolved on the issue of warrants (incentive program) to the company’s employees, Board members and consultants. EWP’s highly motivated and capable employees are key for the company to reach its targets. EWP strives to create as much commitment and participation as possible. As a result, all key employees will take part in an incentive plan, as a way to align shareholder and employee interests. Maximum dilution from the program is 4.5%.
• This quarter, Eco Wave Power continues to receive industry accolades. The company won the prestigious 2020 Energy Globe Award, for its combined wave and solar project in the Port of Jaffa, Israel while Inna Braverman, CEO of Eco Wave Power was selected as a finalist of the European Commission’s Prize for Women Innovators, 2020.

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Significant events after the reporting date

• In a significant regulatory milestone, Eco Wave Power announced that it secured the engineering coordination permit from the Municipality of Tel-Aviv Jaffa (permit number 2020-4345) needed for the deployment of the grid connection works of the EWP-EDF One wave energy project in the Port of Jaffa, Israel. The permit allows Eco Wave Power to proceed with the path towards electric cable laying works, for the electric transmission cables that will connect the EWP-EDF One Jaffa Port project, with the IEC (Israel Electric Company) sub-station.
• Eco Wave Power entered two new letters of Intent; a 2MW LOI with the Port of Shoreham in the UK and an LOI with Diamond Energy for an up to 20MW PPA in Australia. Diamond Energy is an accredited generator and a fully licensed electricity retailer in the NEM. According to the LOI terms, Diamond Energy will take the necessary efforts to provide Eco Wave Power with a Power Purchase Agreement of 20MW, for a period of 10 years, at a rate to be negotiated and agreed upon between the parties. Diamond Energy will also take the necessary efforts to assist Eco Wave Power in obtaining the relevant licenses, permits, and approvals for the connection of its power stations to the Australian electrical grid.
• Given these new agreements, the company’s projects pipeline, expanded to 254MW, which is a 64MW increase from the projects pipeline communicated in 2019. This reinforces the growing global commitment and interest in the Eco Wave Power Technology.
• The company's ticker symbol on Nasdaq First North has changed to “ECOWVE” from “EWP”. Trading under the new ticker symbol began on Monday, 3 August 2020. The new symbol is expected to be easier to find, while clearly more appropriately reflects the Eco Wave Power brand.
• Patents numbers 254987 and 254990 were approved for registration.
• Fast Company, selected Inna Braverman, as one of the world’s 74 “Most Creative People in Business for 2020”, for founding Eco Wave Power. According to Fast Company, “Engineers have been trying to make ocean waves a source of energy for decades. Her Company finally figured out how”. She was also recognized by Sifted.eu as one of the "European tech pioneers shaping the post-pandemic world”.

A Word From the CEO

The pandemic has created an unusual global situation with many travel restrictions and quarantine rules which affected, and are still affecting, the ability of companies to conduct business as usual. 

Eco Wave Power was fast to respond to this newly created situation, by coming up with a clear and responsible plan, which at its’ core, maintains the safety of our employees, while achieving the operational targets of the company. The plan (called EPIC-M) includes five main components:

1. Efficient remote operation of our Gibraltar power plant

2. Progressing the EWP-EDF One project
3. Increasing pipeline projects intake
4. Creating trust among our shareholders, while improving brand awareness
5. Minimizing expenses

E.  In order to take care of the safety of our employees and adjust to the new situation, we have changed our ways of working and for the time being, we no longer send staff to Gibraltar and other locations in our pipeline. Nevertheless, our Gibraltar power plant has continued operation and is being monitored by Juan, our local power plant manager, with ongoing online support from our engineering team in the office. In addition, measures have been taken to insure all employees can work remotely and are equipped with proper tools necessary to attend remote meetings. Also, new sales and BD strategies were implemented and explained to all BD and marketing employees, to enable quick adjustment to the new situation, while finalizing new deals remotely.

P.  In parallel, works continued with the goal of getting the second power plant started. The EWP-EDF One project in Jaffa Port, Israel, has moved forward.  In a significant regulatory milestone, we  have announced that we secured the engineering coordination permit from the Municipality of Tel-Aviv Jaffa (permit number 2020-4345) needed for the deployment of the grid connection works of the EWP-EDF One wave energy project in the Port of Jaffa, Israel. The permit allows us to proceed with the path towards electric cable laying works, for the electric transmission cables that will connect the EWP-EDF One Jaffa Port project, with the IEC (Israel Electric Company) sub-station.

I. In the same time, as part of our planning for the future, we have secured new sites, which are interested in the Eco Wave Power technology. Our overall projects pipeline have increased to 254MW, including a newly entered Concession Agreement for an up to 20MW with APDL in Portugal, and two new Letters of Intent, which include a 2MW LOI with the Port of Shoreham in the UK and an LOI with Diamond Energy for an up to 20MW PPA in Australia. This progress was made possible due to the newly implemented BD and sales strategies, as well as since our technology and company have attracted a great deal of attention across the globe. Our technology was recognized by the Energy Globe Award, while I was extremely honored to be recognized by the European Commission as one of the Women Innovators for 2020 and selected by Fast Company as one of the world’s 74 “Most Creative People in Business for 2020”, for founding Eco Wave Power. According to Fast Company, “Engineers have been trying to make ocean waves a source of energy for decades. Her Company finally figured out how”. Sifted.eu also recognized us as one of the "European tech pioneers shaping the post-pandemic world”.

This emphasizes that there is a great support for what we want to achieve, and many are interested in helping us realize commercial scale wave energy power plants.

C. Another very important aspect for us during this pandemic specifically, but also in general, is to reassure our shareholders that we are taking all appropriate measures to meet our operational targets, in a clear and responsible way. As a result, we have also come up with a new communication plan, which is expected to improve our brand awareness, while establishing better communication channels with our existent and new shareholders, which we value significantly. One of the items of such a plan was changing the company's ticker symbol on Nasdaq First North to “ECOWVE”. This new symbol is expected to be easier to find, while clearly more appropriately reflecting the Eco Wave Power brand. We are also planning to modify the company’s name (which is currently EWPG Holding AB) to a name that better reflects our core business and our journey. We have also launched a monthly newsletter and started a policy of frequent updates to our shareholders and the market, via press releases and other means available to us. We hope that this will reinforce the connection between us and our shareholders, while aligning our operational steps with understanding from the market.

M.  The last step of our plan is financial. Although our company has sufficient capital and financial resources, the consequences of the Corona virus are still hard to grasp, and everything indicates that this might be a lengthy process. As a result, to ensure our long-term financial situation, we reviewed our costs, and were able to reduce some of our expenses during this quarter.

In conclusion, I feel content with the development of EPIC-M plan and its’ smooth implementation during this quarter. I am also feeling optimistic due to the launching of strong innovative initiatives globally, to get out of this crisis in a green way. It seems that it is becoming clearer than ever that renewable energy (and wave energy in particular) is a significant part of handling the climate crisis, while also being a significant part of the solution to the global economic crisis that Covid-19 has created.

According to a study by the European Technology & Innovation Platform for Ocean Energy, which was published on May 2020: “Europe’s ocean energy resource is considerable. By 2050, ocean energy can deliver 100GW of capacity- equivalent to 10% of Europe’s electricity consumption today. Flexible and predictable, ocean energy complements variable renewables such as wind or solar, that will dominate Europe’s electricity system in 2050. Ocean energy will play an important role in smoothing production peaks and balancing Europe’s electricity grid. By 2050, the ocean energy sector will employ 400,000 Europeans, ensuring a just transition to a decarbonized economy. Europe’s technological advantage in ocean energy will ensure European companies a large share of a strong global market, as they do on offshore wind. With zero carbon emissions, ocean energy will help tackle climate change and achieve a cleaner, more sustainable and more prosperous Europe”.

Kind Regards
Inna Braverman
CEO

For the full interim report, please click here.

About EWPG Holding AB

EWPG Holding AB (publ) (“Eco Wave Power”) is a leading onshore wave energy technology company that developed a patented, smart and cost-efficient technology for turning ocean and sea waves into green electricity. Eco Wave Power’s mission is to assist in the fight against climate change by enabling commercial power production from sea and ocean waves.

EWP is recognized as a “Pioneering Technology” by the Israel’s Ministry of Energy and was labelled as an “Efficient Solution” by the Solar Impulse Foundation. EWP’s project in Gibraltar has received funding from the European Union Regional Development Fund and from the European Commission’s HORIZON2020 framework program, and the company was recently recognized by the United Nations in receiving the “Climate Action Award”.

The Eco Wave Power share (ECOWVE) is traded on Nasdaq First North Growth Market. Read more about Eco Wave Power at: www.ecowavepower.com.

For more information, please contact:

Inna Braverman, CEO
inna@ecowavepower.com
+972 350 940 17

Andreas Kihlblom, CFO
andreas@ecowavepower.com
+46 (0)8 420 026 94