20-F: Eco Wave Power Global AB Files 20-F Annual Report, Highlights Progress in Wave Energy Technology

Eco Wave Power Global AB files its annual report on Form 20-F, detailing its ongoing efforts in developing and commercializing its wave energy conversion technology.

Summary

• Eco Wave Power Global AB (publ) filed its annual report on Form 20-F for the fiscal year ended December 31, 2024.
• The company is focused on developing a cost-efficient wave energy conversion (WEC) technology.
• The company's mission is to revolutionize energy production with its proprietary wave technology, and to become a leader in the renewable energy industry, which is expected to see $3.4 trillion in new investment in the next decade.
• The WEC technology is implemented onshore or nearshore, converting wave motion into clean electricity.
• The company is also developing ancillary technology services, including feasibility studies and a smart Wave Power Verification (WPV) software.
• As of December 31, 2024, the company had cash, cash equivalents, and short-term bank deposits of $9.3 million.
• The company expects these funds to be sufficient to fund operations for at least the next 12 months.
• The company has a project pipeline of more than 404.7 megawatts in size.
• The company is prioritizing growth in Europe and the United States, where there is high wave energy potential and growing support for renewable energy technologies.
• The company is currently engaged in projects in the Port of Los Angeles, Israel, Portugal, Taiwan and India.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While there's progress in technology and project development, the company is still operating at a loss and requires additional funding. The risks associated with the industry and geopolitical factors contribute to a neutral sentiment.

Positives

• The company is developing a cost-efficient WEC technology that is implemented onshore or nearshore.
• The company is building out a pipeline of ancillary technology services, including feasibility studies and a smart Wave Power Verification (WPV) software.
• The company has a total worldwide pipeline of projects that may be more than 404.7 megawatts in size.
• The company expects its existing cash and cash equivalents will be sufficient to fund operations through at least the next 12 months.
• The company is prioritizing growth in Europe and the United States, where there is high wave energy potential and growing support for renewable energy technologies.
• The company is currently engaged in projects in the Port of Los Angeles, Israel, Portugal, Taiwan and India.

Negatives

• The company has incurred significant losses since its inception and anticipates that it will continue to incur significant losses for the foreseeable future.
• The company has not yet generated significant revenue from the sale of its WEC technology or power stations.
• The company expects that it will need to raise substantial additional funding, which may not be available on acceptable terms, or at all.
• The market price of the ADSs may be highly volatile due to factors beyond the company's control.
• The company identified a material weakness in its internal control over financial reporting and has not remedied this weakness.

Risks

• The company's ability to become profitable depends upon its ability to generate significant revenue.
• The reduction or elimination of government subsidies, grants and other economic incentives for various renewable energy applications may have an adverse impact on the company's operations and financial condition.
• The company may not be able to receive the regulatory approvals and permits needed in order to commercialize its WEC technology in the jurisdictions in which it wishes to operate.
• The market price of the ADSs may be highly volatile due to factors beyond the company's control.
• The company's headquarters and other significant operations are located in Israel, and, therefore, its results may be adversely affected by political, economic and military instability in Israel, including the multi-front war Israel is facing.
• The company faces possible risks associated with severe storms, natural disasters and the physical effects of climate change on seas and oceans, which may include more frequent or severe storms, typhoons, flooding and rising sea levels, any of which could have a material adverse effect on our operations, business and financial condition.

Future Outlook

The company expects to continue developing its project pipeline, upgrade its WEC technology, reinforce its patent portfolio, and expand its team. The company expects that its existing cash and cash equivalents will be sufficient to fund operations through at least the next 12 months. The company will require significant additional financing in future periods to continue to fully execute its business plans.

Management Comments

• The company's corporate mission is to revolutionize energy production with its proprietary wave technology, and to become a leader in the renewable energy industry, which, according to an analysis by Frost & Sullivan, is expected to see $3.4 trillion in new investment in the next decade.

Industry Context

The renewable energy market is growing, with global investment exceeding $700 billion in 2022. Wave energy has the potential to meet all of global energy demand, but it remains largely unexploited due to high implementation, operation and maintenance costs.

Comparison to Industry Standards

• The company believes its WEC technology has the potential to accelerate the viability of wave power because it is more cost-efficient, reliable, insurable and environmentally friendly and easier connected to the grid compared to offshore systems.
• The company's WEC technology has a total forecasted capital expenditure of EUR 1.2 million ($1.3 million) to EUR 1.8 million ($1.9 million) per megawatt, which is significantly lower than the price of offshore competition.
• The company believes that its LCOE can be as low as EUR 42 ($44) per megawatt hour, in commercial scales.

Related Party Transactions

• The company has entered into written employment agreements with each of its executive officers.
• The company's executive officers and directors are subject to the company's directors and officers insurance policy.
• The company has indebtedness from loans received from a related party.
• The company has a Joint Venture Agreement with EDF Renewables IL.

Stakeholder Impact

• The company's activities may impact shareholders, employees, customers, suppliers, and creditors.
• The company's success depends on its ability to attract and retain qualified personnel.
• The company's operations are subject to environmental laws and regulations.
• The company's operations may be affected by political, economic, and military instability in Israel.

Next Steps

• Produce the floaters mechanisms and install the first pilot project in the U.S. at AltaSeas premises in the Port of Los Angeles.
• Move more projects from the project pipeline stage into the ready-to-build stage and moving forward with the newest projects in Taiwan and India.
• Finalize the licensing and construction of the first megawatt of the Portugal power station.
• Upon successfully executing the first one megawatt scale project, pursue additional financing, which may include equity or debt financing deal(s).

Key Dates