OVUM / Sustainability report 2022

changing aquaculture forever

changing aquaculture forever

Our vision

We shall deliver ground-breaking solutions for sustainable aquaculture food production and have ambitions to be a leading innovator and supplier of floating closed containment systems for the international aquaculture industry.

We shall develop new technology for aquaculture and fish farming both nationally and internationally. We strongly emphasize that the business shall be operated economically, socially, and environmentally sustainable. The goal is to develop, manufacture and trade safe and competitive products while pursuing ever lower carbon footprint.

We shall present a new robust closed containment floating system (CCFS) for industrial fish farming where the aim of new technology is to enable sustainable growth in the aquaculture industry.

With our excellent team and collaborating partners, we offer the industry a fully closed containment floating system where we address many of the costly challenges that characterizes aquaculture today.

In January 2012, founder Cato Lyngøy containment floating system. Ovum as a company was incorporated in 2016. was finalized and launched in

The proof of concept was a success, and we believe Egget® will solve the major challenges for the industry: sea lice/algae, escapes, sludge, no waste of feed, predators, use of land, and most importantly, the salmon’s health will be safeguarded by providing it with a stable environment.

Cato Lyngøy, Audun A. Dahl and Arthur Lyngøy.

Our company

Ovum is a technology organization with highly competent personnel, delivering floating closed containment systems for aquaculture industry through the concept of Egget®

→ Egget® is a robust double curved geometrical shape and is constructed in sandwich composite materials

→ Egget® is designed for location in protected coastal zone

→ Egget® has a buoyancy collar that provides stability and protection

→ Egget® has a modern and attractive design

→ Egget® supports UN key sustainability goals

→ Ovum has 25 approved patents and 6 patents pending approval

22 employees

Office in Bergen, Norway

The board

The management team

Cato Lyngøy CEO

Åsmund Hellesøy CTO

Tove Spjeld QHSSE & Sustainability Manager

Trond Severinsen CCO Siri Vike CFWO

Magne Bjørkhaug Special Advisor

Audun Dahl CBDO

Hogne Tyssøy CFO Gunn Margret Skjørestad CBC

Marit E. Kirkhusmo Chair of the Board

Tanja Knabenschuh Hoel Board member

Morten Nordstad Board member

Anders Torvill Bjorvand Board member

Ovum sustainability report

Ovum AS was established in January 2016, and is now presenting its first Sustainability report based on the Global Reporting Standards (GRI) 2021 by using the GRI 13 Agriculture Aquaculture and Fishing Sectors 2022.

The material topics reflect a high-level overview and are prepared to include details of the activities and business relationships.

Ovum has considered the activities, business relationships, stakeholders, and sustainability context of all the entities it controls or has an interest in.

The aim of circular economy is to extend the life of a product as long as possible by keeping it within the economy wherever possible. This means reducing waste to a minimum and generating the most value from each material. We believe that the work on the Sustainability Report will help us fit into and promote this economic model.

This report provides information and data that is honest and realistic, and with the rapid evolving of ESG frameworks, standards and guidelines we are still in a learning process and will continuously develop the company according to the ESG framework.

Report data:

The report is based on material topics according to GRI Index

The technical data is based on data from the design and analysis phase

The fish data is based on the available and compared data from the proof of concept, for the first unit of Egget® - Ovum E2000

The environmental data is based on the available and compared data from the proof of concept, for the first Egget® - Ovum E2000

2022 at a glance

May

Established full scale organization for Egget® Ovum E20000

May

Launch of the first Egget® Ovum E2000

January - December

Ovum is able to attract highly competent resources

December Fish health results surpass expectations

October

First fish in Egget®

December

Proof of concept confirmes fish growth better than predictions

CEO statement

The global need for future sustainable solutions within aquaculture industry is becoming increasingly important as protein supply from the blue pasture shall go from 2,5% to 10% in a few decades. This will require a sense of urgency from the fish farming companies.

We are proud to launch our first sustainability report, and I am very satisfied to say that our company is growing with quality and substance.

Looking back at 2022 – it has been an incredible year for Ovum and Egget®. We appreciate that we are being acknowledged for our technology and that

Cato Lyngøy CEO

there is a need for closed fish farming solutions. However, in as much we are proud of what we have obtained, we are also humble for all the work and development ahead.

Substantial investment has been made into the pilot egg during 2021-2022. The learning points are invaluable and provides a very good fundament for first series of postsmolt eggs.

The importance of attracting new talents into our organization is vital to break boundaries going forward. There is a fierce

competition for future employees, but we notice that many super-skilled people would like to work in our team of Eggsperts. We are continuously sharing and gaining knowledge through participation at different network arenas as a tool to be the fastest learning organization within our value chain.

Our sustainable goals for 2022 have been partly achieved. Our strong team will continue to develop striving for changing aquaculture forever

Stakeholders

The stakeholders’ requirements are evaluated as a part of the strategy and ESG processes to identify risks and opportunities for Ovum and the stakeholders.

To support the identification of impacts and prioritization, the company’s stakeholders are identified, who are they, how do they influence the company and what are the expectations. The process of mapping the stakeholder engagement serves as a tool for understanding the context of the business and the stakeholders’ expectations:

→ Investors: Climate reporting, compliance, innovation, circular economy, economic performance, openness and information

→ Clients: Product security, food safety, fish welfare and health, prevent fish escapes, anti-bribery, reduced climate emissions, sea lice management, product efficiency, resource utilisation

→ Employees: Safe workplace, good working environment, ethical business conduct, learning, development and growth, diversity, employee safety, psychological safety at work

→ Local Society: Workplaces, minimum of negative environmental aspects and impacts, local suppliers, marketing

→ Governmental bodies: Reduced emissions, compliance, energy efficiency, diversity and equality, occupational health and safety

Governmental bodies

Investors

Clients

Local Society Employees

Sustainability in Ovum

The actual and potential impacts on the economy, environment, and people, including impacts on human rights, across the organization’s activities and business relationships have been identified in Ovum. We have defined 6 of the 17 Sustainability Development Goals (SDG’s) relevant for Ovum as per 2022.

The organization has assessed the significance of the identified impacts to prioritize them. This prioritization enables the organization to take action to address the impacts and to determine its material topics for reporting.

Prioritizing impacts for action is relevant where it is not feasible to address all impacts at once:

→ The significance of an actual negative impact is determined by the severity of the impact

→ The significance of a potential negative impact is determined by the severity and likelihood of the impact

The material topics represent the Ovum’s most significant impacts on economy, environment, and people, including human rights.

The process of determining material topics has been performed according to GRI standard 3. Ambition

Environmental impact

“Ensure highest level of fish welfare and environmental performance”

People & Safety

Ambition

“Ensure the highest safety standard and working environment”

Ethics and Compliance

Ambition

“Ensure a high ethical standard and compliance”

The Salmon’s choice

Facts:

→ First fish production commenced October 9th - February 22nd

→ Growth from 150 gram to 1,1 kg post-smolt

Salmon’s

In Egget®, the fish get a stable, good water environment and we do not handle it between entry and exit.

Steady water replacement, optimal water flow to exercise the fish, feeding according to appetite, enough light and oxygen are all key ingredients for the good environment.

In addition, it helps the fish to have a good physiological status and maintain a good mucus/skin barrier which makes it less susceptible to diseases. The result is a fish with good health.

“The Salmon’s choice”

Challenges to overcome

Current farming practices are questioned in the eye of the public; the welfare of the fish, salmon lice treatments, and fish escapes.

Critisism is raised towards the industry regarding as negative impact on wild salmonids stemming from the shedding of lice and escaped fish ending up in local rivers.

By legislation, any escape or suspicion of escape is to be notified to Directorate of Fisheries. The industry has a zero-escape vision and works systematically to register and communicate learning points across the companies. Legislation has also provided a whole set of new technical requirements for fish farms (Nytek).

The fish – welfare and health

Ovum addresses the environment in which we farm fish by re-vamping the production platform. Fundamental to our approach is that mortality can be significantly reduced by taking control over the farming environment. This is the ambition behind our new technology platform.

From a fish biology point of view, it can be stated that per every fish dying, there is at least five fish not feeling well. Likewise, it is also reasonable to claim the following:

→ Between «feeling well» and «being dead» there is an enormous potential for enhanced welfare and performance

→ Understanding fish welfare is therefore critical in fish farming. Ability to provide a farming environment that can support the best living conditions for the fish is not only utmost important to the business, but our given responsibility

→ Central to fish welfare is the problem of the salmon lice

Fish welfare is monitored digitally

The fish is being monitored daily in Egget® by 100 – 800 camera images per day, and we have only seen deviations in form of scale loss in < 1% of the fish.

4 of 737 fish had skin damages

The pictures demonstrate skin damage on the left picture, and a perfect fish on the right picture.

Result of the monitoring

→ 67 reports and 569 different analyses have been performed

→ 42 of 310 PCR analysis has been positive

• AGD – peacked at 1.6

• Low prevalence: POX, PRV, Paranucleus, Moritella, Tenacibaculum

• Negativ against: SAV, ILA, PMCV

→ Histology analysis – no diagnosis

→ Blood analysis - no diagnosis

→ Bact. analysis – no diagnosis

→ NGS analysis – no diagnosis

→ Mucus analysis – shows a healthy and robust mucus layer

→ Noise stress monitoring – no negative results

Siri Vike Chief Fish Welfare Officer

“Technology development must take place on the fish’s terms - and optimal water quality requires cutting-edge expertise that is able to combine technology and biology.”

Operating and controlling the environment

The environment inside Ovum E2000 is controlled and measured.

Daylight is controlled 24 hours a day inside Egget®. The fish will be supplied with the ideal amount and wavelength of light. As opposed to open net pens where oxygen can vary by season, upwelling and tide, Egget® provides an opportunity to always keep oxygen at adequate levels.

The temperature profile of the deeper layers of the fjords shows less temperature variation than in the surface. This supports better winter growth in Egget® than in open cages, probably lower growth rate during spring, but also avoids the peak temperature weeks during summer. However, in the fjords of Western Norway the temperature sum (sum of day degrees) is not very different for deep-water intake compared to the surface. In other words, we expect the growth to become more even, which will also apply to the harvest profile.

Comparing fish in Egget® with their half siblings in open net pen - feeding

These graphs show that fish in the Egget® has better feed utilization than in an open cage. This has great significance for sustainability in all senses of the word and for the carbon footprint in relation to the utilization of raw materials. Also, feed represents 50% of cost production thus being the most important economic factor.

30% better feed utilization (economically)

18% better feed utilization (biological)

Bio FCR and Eco FCR

Bio FCR Eco FCT

Comparing fish in Egget® with their half siblings in open net pen - survival

The fish in the open net pen has been subject to 3 lice treatments and has been injured during the handling process - this is the cause for the high mortality rate.

Biggest challenge is to keep the inner egg surface clean

- in order to keep it clean, new technology is required

→ Water quality extremely important for gill health

→ The fouling may harbour strains with unwanted microbes

Functionality and anchoring

Functionality

The unique water flow enables the system to draw inlet water segregated from where the outlet water is released. The inlets are located in the bottom of Egget®. The water enters by the use of two main pumps that draw water in from 17-38 meters deep, depending on the size of the unit. The water is set in a circular movement by circulation devises and eventually exits the tank at the top, 3-6 meters below the water surface. The water quality and flow-rate can be controlled, ensuring steady oxygen levels and sufficient evacuation of carbon dioxide.

The bottom entry significantly reduces the entry of sea lice larvae in to the unit since it’s natural habitat predominantly is in the top water layers. The water inlet and outlet is double-secured thus making escapes impossible.

Feed is either supplied from an on-unit feed storage or through a barge-based regular automatic feeders as used on sites today. The feed distributors supplier is the customer’s choice.

The system enables good feeding and waste control.

Technology

Anchoring system

→ Egget® fits into todays typical site set-up

→ Egget® is positioned and placed into the farm by a lifting operation

→ Likewise, it is designed to be supported by the existing infrastructure such as the feed barge and shore power

→ Egget®is then moored into the existing mooring system in a farm

Geometric shape

The geometrical shape

The shape of the enclosed tank is formed as an egg and is built in sandwich composite. The shape provides a complete double curved surface. 90% of the tank is submerged and not visible during operation, whereas 10% is above the waterline and filled with ventilated air. The shape diverts external forces and makes a robust geometrical structure.

Likewise, the egg structure is fully enclosed with a dome protecting against flushing of waves into the unit. Also, it provides a sheltered and safe working area for personnel and protects the fish against predators.

The concept of egget

→ The sheltered workplace addresses health and safety for the staff by eliminating many high-risk operations

→ The water intake is located at the bottom of the unit at a depth where salmon lice is normally not a problem

→ Separated intake and outflow, reduce pen-to-pen contamination

→ The design, water flow, stable environment and accurate monitoring inside the egg will facilitate fish welfare and performance

→ The closed containment and feeding regimes enable more accurate feeding with low loss level

→ The robust unit significantly reduces risk of fish escape during sea phase

→ Solids are collected and significantly reduce discharge of organic waste

→ The unit separates and shelters the fish against predators

Building material

Composite materials – life cycle

Egget® is built from glass fiber composite and this material has a very long lifetime. Fiberglass sandwich is fully hardened after 50 years and is very UV resistant, which provides a strong and durable hull.

Composite materials are widely used in the wind power industry, and we have reason to believe that we will benefit from the development of recycling of glass fiber in that industry.

The material is easy to care for, periodic cleaning with a high-pressure washer is sufficient maintenance. The material is also easy to modify if installation of new equipment should be required.

A strong benefit of glass fiber composites is the non-corrosive characteristics, especially in the saltwater environment where Egget® is operating.

Building a system that lasts is supported by the objectives of sustainable development and aim for circular economy. The contractual lifetime is 20 years, but our intention is to re-commission Egget® and more than double the contractual lifetime.

Benefits

Benefits of the floating enclosed fish-farm system

Egget® is from the very start defined as a very energy efficient system, and this is explained by simple system design, with few obstructions for the main water flow; The water enters Egget® at the bottom, flows through the unit, and exits the surface. The water is exchanged at least one time per hour, meaning the water is gently pushed through Egget® with no lifting of water. A calm steady flow of water is accommodated by energy efficient water circulators.

In addition to its energy efficient nature with low energy loss, the development of Egget® has strongly focused on smart solutions for the supporting systems, to obtain low energy consumption for the whole system.

Egget® is developed to solve several challenging issues in the fish-farm industry, each of them with significant positive consequences regarding environment, social, governance and sustainability impact:

→ Collecting sludge/waste

→ No fish escapes

→ Utilize safe water from water depths without lise challenges

→ Significantly reduced mortality

→ Better utilization of biological resources

People & Safety

Social impact and occupational health

Social impact

Ovum is always ensuring compliance with applicable legislation and ensures good and proper working conditions for our employees. In addition, we will connect with competence within human rights and prepare for a formal human right assessment to be ahead of potential growth in the company.

Working environment

Sick leave and potential turnover as working environment indicators are regularly monitored in Ovum.

The topics related to working environment are regularly raised and discussed in internal team meetings and in management meetings.

&

SICK

LEAVE 2022

1%

TURNOVER 2022

0%

Attraction of competence

Young people are engaged in climate change issues and biodiversity loss since this is an issue of outmost importance for coming generations.

With that in mind, will Ovum be eager to attract the best talents within all relevant areas for our company. Ovum has actively attended and will continue to attend student academy gatherings to meet the future work-force.

This is valuable, not only for our company, but also for the industry, and it will impact the local communities with growth.

Safety

Operational safety

Ovum has an ambition of zero injuries within our operations. The safety of personnel in daily operations of the unit is important. The most important contribution to health and safety is the significant reduction in high-risk operations through thorough preparations and risk management processes.

Apart from this, the docking area is well defined and secured. While inside the unit, the operator is sheltered from waves, splash, rain and wind as well as enjoying a comfortable air temperature.

If incidents occur, we will ensure thorough handling and defining of root causes to define preventive and corrective actions according to our company management system.

Ensuring that we have a good working environment, where employees can develop skills and feel part of the team, are two important aspects of health and well-being.

Risk management

As a part of its business planning and operational activities, shall Ovum continously ensure reduction of negative risks to as low as reasonable practicable.

The risk management process also includes identification and management of positive aspects and opportunities. Through effective risk management, Ovum will deliver safe and efficient performance that meets stakeholder requirements. Risk management is an important part of the sustainability work in Ovum, and defines the fundament for the quality in the way we work in all processes.

Human rights risk assessment is a key component of Ovum’s human rights due diligence process.

Ovum shall identify actual and potential human rights impacts associated with its business to prevent and mitigate harm to people. Human rights risk assessments shall be performed at corporate level, at regional/country level and throughout our supply chain process. These assessments shall be an integral part of other relevant risk assessments.

Equality and non-discrimination

As a part of the stakeholder assessment has it been identified that equality and non-discrimination is an important topic. This has led to an action to perform a risk assessment with Norwegian Transparency act during 2023.

Ovum acknowledge the importance of diversity and equality and are actively working with steady and robust recruitment processes as well as maintaining and developing internal talent.

The management in Ovum establishes strategies, policies and procedures with the purpose to influence and set the standard for positive internal work with diversity and non-discrimination behavior.

Women in the Corporate Management 2022

30%

Women in the Board of directors 2022

50%

Environmental Impact

Environmental Environmental reflections

The visionary goal for the Norwegian Aquaculture industry is to reach five million tonnes by 2050. This is an immense challenge. To reach this goal, the industry must submit to public acceptance and acknowledgement.

Along with the goal comes the challenge of ensuring sustainable production and operation of fish farms.

Ovum’s ambition is to demonstrate and offer new innovative ways of fish farming for the future. This includes both welfare for fish and an environmental solution.

We are cooperating with our suppliers to ensure that the value chain is calibrated within our goals. We acknowledge our role to contribute to improvement in the environmental aspects and impact for the fish farming industry.

Farmed salmon is one of the most eco-efficient and sustainable forms of protein:

Source: Global Salmon Initiative

Waste management

It is a major global challenge that people use more resources than we have available in the world in the long run, and a higher degree of circular economy is therefore essential. Life cycle thinking and contribution to the reduce, reuse and recycle principle is a high priority.

The highest priority is the reduction of waste generation. This is achieved in two ways – improving fish welfare and increasing control of feeding, which significantly improves the industry’s use of resources.

All waste handling in Ovum is performed according to relevant legislation and standards.

Collection of Organic Waste

Ovum addresses one of the major impacts – waste emission to open water bodies. By introducing Egget® that unlocks the possibility to collect both uneaten feed and fish waste.

Feeding accurately is alleviated by use of a contained system. The horizontal and upwards water current keeps the feed pellets accessible for the fish for a longer period than in open systems where uneaten feed drifts out of the pen by the current.

The shape of Egget® supports trapping and retaining particles from being discharged. The technology has continuous removal of solids from the bottom of the unit by withdrawing a partial flow which is then filtered. The sludge (fish excrement and uneaten feed) is collected in a tank and can be used as a valuable resource in newly developing industries. In the pilot phase, sludge has been used in biogas production.

A separate organic waste stream is formed from dead fish. This number is reduced as much as possible, but any morts are removed at the bottom of Egget® through a separate removal system. Dead fish are grounded and turned into silage and further processed by external suppliers according to relevant regulations.

Collection of organic waste

Sludge

Removing the particles quickly and gently, before the larger particles break up, is key for effective sludge collection. The particles are removed continuously and directed to the filter placed at the collar of Egget®. The system uses one filtration stage with no chemical flocculants or additives.

The pilot Egget® surprised us with its sludge collection- it was more effective than assumed during the design phase. The feed conversion ratio indicates that there has been very little feed spill and the system has managed collecting a greater amount of feces.

This was achieved through the design of Egget® and the sludge system, and using customized feed, but was also supported by good fish health.

This is a benefit for both the water quality inside Egget® and the surrounding environment. We see this as a potentially huge resource for circular economy!

Carbon footprint

We believe that future food production will be carbon neutral and that consumers wish to have a fish farming system that ensures healthy and good food without carbon footprint. We will therefore deliver a product that supports the customer’s long-term vision of zero CO2 emissions.

This is supported by electrification of the systems and preparing the groundwork for possibilities of introducing other renewable energy resources.

At the same time, the increased control of the environment, that is designed to support fish welfare and minimize loss, has a direct effect on the carbon footprint of the production. The extremely low mortality and FCR reduces the carbon footprint attributed to consumption of feed, which on average accounts for 75% of the total emissions at farm-gate.

We are working with our suppliers to initiate groundwork for accounting for emissions from the construction process, mapping areas with potential for improvement

Power consumption

Power consumption during the first fish generation in Ovum E2000 pilot ended up at 1,8 kwh/kg produced salmon.

This is about 1/3 compared to the best land-based salmon farms using RAS (Recirculating Aquaculture Systems).

The main reason for low power consumption is the low pumping height. We are not lifting any water, just moving water in water. The water intake design with minimum flow restrictions as well as efficient outflow pumps at the top of Egget® are also crucial.

The power consumption includes on-site oxygen production, which means reduced emissions from road transport of liquified oxygen.

The goal is set to 1 kWh/kg, which seems reasonable knowing that the current system has not yet been tested to its full capacity.

The power consumption pattern for Egget® has shown to been very stable. It has been 100% covered by shore power. Implementation of other renewable sources are evaluated for the future.

Asmund Hellesøy Chief Technical Officer

“Egget® utilize the water at its original location, and eliminates energy demanding lifting of the water.”

Ethics and compliance

Ovum has defined key ethics and compliance principles and we shall handle and perform business according to our values and with mutual respect

DNA is ZERO cases of corruption and fraud.”

“Our

Cato Lyngøy Chief Excecutive Officer

and compliance Business practice –

ethics and governance

Ovum is committed to high ethical standards and compliance to legislation. We have Code of Business Conduct in place and started the compliance measurement process on legislation for human rights and social responsibility

The community and location: We shall be aware, and we have established good cooperation in the areas we operate and use local opportunities for business if appropriate. We acknowledge our influence on the local environmental and we are respecting human rights principles in all areas.

The performed stakeholder analysis, that will be continuously updated, provides input and confidence in these processes.

Compliance with regulations

Ovum works actively to ensure that our operations respect and are compliant with relevant legislation and standards. We have established systems to handle noncompliances and establish actions accordingly.

2022 audits:

→ 1 audit of external supplier with 2 defined non-conformities and 3 observations. All findings has been handled and closed.

→ 4 audits of Ovum by external third-party with total 17 defined non-conformities. All findings has been handled and closed.

→ There were no environmental non-compliances

Economic sustainable target and technology

Target

→ Further production of Egget®

→ Provide technology to support sustainable production for the farmers

→ Support growth in the aquacuture industry by providing technology that opens new sites and farming licences and improves utilisation of current sites

→ Changing aquaculture forever

EQUITY

40 million of equity raised in 2022

– in total 88 mill in equity

CASHFLOW

Positiv EBIT due to development project in collaboration with Hauge Aqua Innovation

Actions

→ Preparation for industrialized production

→ Close monitoring of liquidity to ensure financial stability

→ Thorough pre-qualification processes upfront selection of suppliers

→ Implement systematic, quality processes to be the fastest learning organisation

ORDERS

1 x Ovum E2000 delivered

1 x Ovum E20000 ordered

FCR 0,86 for first production

Ambitions

Ovum’s ambition is to be the leading provider of floating closed contained fish farms.

→ 21 m height

→ 2.000 m3

→ 200.000 smolt – 100 t

→ 15m diameter

→ Hs: 2,2m

→ Dry weight 160 t

→ 30 m height

→ 6.000 m3

→ 600.000 smolt – 300 t

→ 20m diameter

→ Hs: 2,5m

→ Dry weight 250 t

→ 44 m height

→ 20.000 m3

→ 1 mill smolt -1000 t

→ 31m diameter

→ Hs: 2,5m

→ Dry weight 560 t

Ambitions

Looking forward

→ Develop the next generation Egget®

→ Develop further sustainable solutions

→ Increase the marked area with these facts in mind:

• 4500 cages in Norway

• 600 active locations in Norway

• 1 egg on 25% of the farming locations representing 150 egg

→ Continue to grow the organization according to activity and requirements to ensure correct competence and capacity

→ Continue to perform gap analysis and keep us abreast on new standards and regulations

→ Continue to build network and keep us abreast on the marked

→ Continue to be the fastest learning organization within our area

→ Continue to provide a good home and environment for the fish

Issues solved by Egget® to ensure aquaculture growth

→ Lice and lice treatments

→ Health issues and sickness

→ Fish escape

→ Unstable water quality

→ Seabed impact

→ Feed and resource waste

→ Stress from predators

→ Issues with area and locations

changing aquaculture forever

Photo: Thomas Morel, Ovum AS

Design & production: Apriil.no