Expectations for 2022

LIQUIDITY AND FINANCING

As of December 31, 2021, the Company has working capital of $20.6 million and non-current liabilities of $1.5 million. Since 2016, the Company has generated positive operating cash flows and operating income. From 2013 to 2016, Asetek financed operations principally through offerings of common shares on the Oslo Stock Exchange.

While there is no assurance that the Company will gen- erate sufficient revenue or operating profits in the future, Asetek’s management estimate that the Company’s capital resources are sufficient to fund operating activities in the foreseeable future, based on financial forecasts. To the extent necessary to fund expansion or other liquidity needs, management will consider offerings of debt, equity, or a combination thereof, depending on the cost of capital and the status of financial markets at that time.

In 2022, Asetek will continue to invest in and launch innovative new high-performance liquid coolers for gamers and enthusiasts. The Company plans to invest in the development of its new SimSports offerings for the foreseeable future with the goal of regular launches of new SimSports products. Consistent with prior years, Asetek will continue to focus its resources on the Gaming and Enthusiast market, growing market share through existing and new OEMs, and building the Asetek brand. In conjunction with efforts to build its SimSports business, Asetek plans to enhance its direct sales channels.

During 2021, in order to maximize future profitability of its data center business, the Company announced that it is exiting the High-Performance Computing (HPC) niche. In 2022, Asetek plans to prioritize the general data center market and support legislation increasing adoption of the Company’s sustainable solutions, capitalizing on its liquid cooling technology and long-term investments in the business segment.Though Asetek is exiting the HPC niche, it is maintaining its long-term dedication and exposure to sustainable data centers. As a result of this change, Management expects that data center revenue will not be significant in 2022 and therefore the Company will stop reporting on the data center segment.

The Company's consolidated annual results for 2021 met Management's expectations that were communicated in the Q3 2021 Report. When comparing to projections communicated in the 2020 Annual Report, the 2021 annual results partially met expectations. Revenue achieved in 2021 was in line with original projections from 2020, but income earned did not meet original expectations, principally due to challenges brought upon by the COVID-19 pandemic, the continuing global chip shortage and disruptions in the global supply chain.

Management has communicated a growth target that revenue will increase by an average of approximately 15% per annum over the next five years. In some years growth may exceed the average, and in other years it may be lower.

Considering the volatile global situation, revenue growth for 2022 is expected to be in the range of -5% to +15% compared with 2021, considering assumptions such as shortages of semiconductor chips, shipping cost and capacity variances, pandemic lockdowns, general geo-political tensions as well as an overall expectation that the business climate will normalize over the course of the year. Operating income is projected to be between -$1 and +$5 million in 2022, reflecting the above uncertainties.