Financial Performance - The company incurred net losses of $2.11 million and $1.87 million for the fiscal years ended December 31, 2024, and 2023, respectively, with an accumulated deficit of $15.1 million as of December 31, 2024[52]. - The company has a history of operating losses and may not achieve profitability or positive cash flow in the near future[52]. - The company expects to incur additional ongoing costs associated with operating as a U.S. listed public company[59]. - The company may need to raise substantial additional funding to commercialize its products, which may not be available on acceptable terms[54]. - The company faces significant risks related to its financial position and capital requirements, which could materially affect its business operations[46]. - The company has received royalty-bearing grants that require it to pay royalties on certain projects, impacting its revenue generation and profitability efforts[63]. - The company may face indemnification obligations under various contracts, which could adversely impact its financial condition if obligations exceed insurance coverage[110]. - The company has never declared or paid cash dividends on its share capital and does not anticipate doing so in the foreseeable future[190]. - The company estimates that compliance with public company reporting requirements will incur additional expenses of at least several hundred thousand dollars annually[207]. Cash and Funding - As of December 31, 2024, the company's cash, cash equivalents, and short-term bank deposits totaled $9.3 million, expected to fund operations for at least the next 12 months[54]. - The company relies on government subsidies and grants for its renewable energy projects, and any reduction or elimination of these incentives could adversely affect its financial condition[60]. - The company is obligated to comply with various reporting requirements and project milestones under its grant agreements, with noncompliance potentially resulting in enforcement actions[175]. Intellectual Property and Technology - The company has filed multiple patent applications but cannot guarantee that any will result in issued patents, which may affect its ability to protect its proprietary technology[66]. - The company may not be able to enforce its intellectual property rights effectively in foreign jurisdictions, limiting its competitive advantage[68]. - The company relies on trade secret protection and confidentiality agreements to safeguard proprietary know-how that is not patentable, but acknowledges that trade secrets can be difficult to protect[70]. - The company has entered into cooperation agreements with partners, which may restrict its commercial use of jointly developed intellectual property[78]. - Future success depends on achieving cost savings over existing solutions; failure to demonstrate cost competitiveness may hinder commercialization and profitability[151]. - Continuous improvement and timely introduction of new products are critical; delays or failures in product development could adversely affect financial results[152]. - The company is focused on developing a smart and cost-efficient wave energy converter (WEC) technology that aims to revolutionize energy production and capture a share of the $3.4 trillion expected investment in the renewable energy sector over the next decade[215][220]. Market and Competition - The company faces intense competition from larger entities with greater resources, which could hinder its ability to develop and commercialize wave energy projects effectively[117]. - The anticipated growth in demand for renewable energy may not materialize, potentially reducing market opportunities and revenues for the company's products[113]. - The company may face significant competition in its targeted markets, which include energy, engineering, and coastal cities[134]. - The market price of renewable energy sources is volatile, which may significantly impact the company's revenue and profitability[122]. Regulatory and Compliance Risks - The company operates under various environmental laws and regulations, and non-compliance could severely damage its business and financial position[81]. - The company is required to obtain permits for operations in different regions, and difficulties in obtaining these permits could limit its ability to grow[82]. - Changes in environmental laws and regulations could reduce demand for the company's services and impact revenue timing[83]. - Compliance with privacy regulations such as GDPR is critical, as failure to comply may result in significant fines and penalties, adversely affecting the company's financial condition and reputation[100][101]. - The company is not currently regulated as an electric public utility, but future regulations could impose significant operational restrictions and increase costs[102]. - The company is subject to risks associated with international operations, including compliance with complex laws and potential anti-corruption violations[90]. Operational Challenges - The company may experience challenges in managing growth, which could disrupt operations and lead to increased expenses and reduced revenue generation capabilities[111]. - The sales cycle for larger public sector customers may be longer and more costly, potentially delaying revenue recognition and increasing operational complexities[114]. - The company relies heavily on key personnel, and the loss of executives could adversely affect its ability to execute business plans and achieve operational success[107][109]. - The company has only manufactured a limited amount of WEC technology and has not produced it in significant quantities for commercial production[144]. - The company relies on third parties for the supply and manufacture of components, which could adversely affect its business if not managed properly[124]. Project Development and Partnerships - The company has a project pipeline totaling over 404.7 megawatts, including agreements for up to 5 megawatts in Gibraltar, 20 megawatts in Portugal, 77 megawatts in Turkey, 2 megawatts in Spain, and 25 megawatts in Mexico[232]. - The company has entered into various agreements, including Power Purchase Agreements and Concession Agreements, to advance its WEC technology projects[232]. - The company is exploring the addition of solar panels to its WEC technology, but success is uncertain due to geographic limitations[121]. - The company is engaged in a feasibility study with Shell to identify prime locations for commercial installations in the U.S., with a pilot project at the Port of Los Angeles expected to begin construction within six months after receiving licenses[236]. - A concession agreement in Portugal allows for the construction of a wave energy power plant with a capacity of up to 20 megawatts, starting with a one-megawatt station, with construction expected to begin within two years[238]. - The company signed an agreement in October 2024 for the sale of a wave energy generation unit to I-Ke International Ocean Energy Co., which will manufacture floaters locally[239]. - A non-binding memorandum of understanding was signed with Bharat Petroleum Corporation Limited in February 2025 to jointly develop wave energy projects in India, starting with a 100 KW pilot project[240]. External Factors - Political, economic, and military instability in Israel may adversely affect the company's operations and financial results[164]. - The ongoing multi-front conflict has not yet damaged facilities or supply chains, but potential disruptions in imports and exports could impact operations[168]. - Employee obligations for military service may cause operational delays, affecting business prospects and financial condition[169]. - Economic boycotts and sanctions against Israel could impair relationships with customers and delay or rescind current projects, adversely affecting operating results[170]. Research and Development - Ongoing research and development into combining solar panels with wave energy conversion (WEC) technology is being conducted, but advancements in other renewable technologies could impact the company's cost structure and profitability[119]. - Research and development expenses were $0.54 million and $0.51 million for the fiscal years ended December 31, 2024 and 2023, respectively, with expectations for future increases[139]. - The company is committed to building wave energy power stations that provide clean electricity access while minimizing environmental impact[241].
Eco Wave Power AB (publ)(WAVE) - 2024 Q4 - Annual Report