Annual Report

(1)

LightLab Sweden AB (publ) 556585-8981

1 Annual Report 2008

Annual Report

and

Consolidated Accounts

for

LightLab Sweden AB (publ)

556585-8981

Fiscal Year 2008

Contents Page

Administration Report 2

Consolidated Income Statement 6

Consolidated Balance Sheet 7

Consolidated Statement of Changes in Equity 9

Consolidated Cash Flow Statement 10

Parent Company Income Statement 11

Parent Company Balance Sheet 12

Parent Company Statement of Changes in Equity 14 Parent Company Cash Flow Statement 15

Additional Information 16

(2)

The CEO and Board of Directors of LightLab Sweden AB (publ), 556585-89814 hereby submit the annual report and consolidated accounts for the fiscal year 2008.

Administration Report This is LightLab

LightLab develops and commercializes a method of creating environmentally-friendly, low-energy light without mercury, lead, or other environmentally harmful materials. Players in the lighting market can strengthen their brands by using LightLab’s solutions. LightLab’s strategy is based on strong relationships between manufacturers, distributors, and consumers. LightLab only produces bulbs that actively contribute to promoting environmentally-friendly, low-energy lighting technology on the international market.

Main advantages of LightLab’s technology compared with conventional low-energy bulbs:

• 100% mercury and lead free

• Light can be smoothly dimmed, just like a conventional bulb

• Lower energy consumption than conventional bulbs

• Functions even in low temperatures

• Switches on and off instantly

• Independent shape and size

LightLab has around 4,000 shareholders in more than 10 countries. The company’s class B shares and warrants are traded on Nasdaq OMX First North.

2008 in summary

Development of the environmentally-friendly, energy-saving bulb continued in 2008, and a number of important breakthroughs were made. The main focus during the year was on increasing energy efficiency.

A new Board of Directors was elected at an Extraordinary General Meeting in March. An analysis and overhaul of the company’s development projects, patents, market assumptions, and resources was performed in cooperation with external experts. This review resulted in clear priorities with the energy- saving bulb continuing to remain the company’s main area of focus. The analysis also identified products and technologies that can be developed in conjunction with the bulb, and that are judged to have sufficient commercial potential to justify investing resources in these areas. The two areas deemed as having the greatest commercial potential are:

Drive electronics for LightLab’s energy-saving bulbs: Recent work has focused on key components in the bulb. Certain specially developed parts are deemed as having commercial potential in other applications, such as a proprietary ferrite core with unique properties.

X-Ray applications: With certain modifications, LightLab’s cathode material can also be used in x-ray tubes.

All projects are based on LightLab’s cold cathode. This increases the efficiency of the work by maximizing human and physical resources, and enables results from one project to be used in other projects. The effectiveness of the development process is therefore greater than if these projects were to be implemented separately.

The EU-supported project NANDOS (Nanophotonic and Nanoelectronic Devices from Oxide Semiconductors) began in 2005, continued in 2008, and was completed in 2009. The project involves building expertise within the company, and provides a unique insight into how leading researchers in LED diode technology see the future of lighting technology. This has significant implications for how LightLab prioritizes its product development in existing projects.

(3)

The cooperation with KTH, the Royal Institute of Technology, continued in 2008 and a joint laboratory focusing on research and development in biophotonics based on zinc oxide and quantum dots was established at KTH. Two doctors in physics were sent to the laboratory during the year to conduct theoretical and experimental work on quantum dots. This was done within the framework of cooperation with the Academy of Sciences in Shanghai. LightLab has also continued to cooperate with research groups at the University of Gothenburg on work involving zinc oxide in nanostructures and magnetic nanoparticles.

A scientific advisory board was appointed to work with LightLab in May 2008. The advisory board includes four internationally acclaimed researchers working in the company’s product areas.

On 9 December 2008, LightLab signed an agreement (Memorandum of Understanding) with TECO Electric and Machinery Co. in Taipai, Taiwan. The agreement primarily involves developing and adapting LightLab’s energy-saving bulbs for production, but also involves developing the company’s technology for use in advanced X-ray applications. The agreement with TECO is a necessary step in adapting the bulbs for production and optimizing both the individual components used as well as the total product. After the announcement, discussions continued and a number of tests were carried out both on the energy-saving bulb and drive electronics components. The discussions were completed in February 2009 after an agreement was reached regarding development and adaptation for production. (See below under the heading:

Important events after the fiscal year) Organization and personnel

The LightLab Group includes parent company LightLab Sweden AB (publ), responsible for administration as well as research and development, and subsidiary LightLab Asia Corp. in Taiwan, responsible for laboratory production, testing, and evaluation since 2003. LightLab invested in improving the organization in Taiwan during the year. A new CEO was installed in LightLab Asia in the first quarter, and a number of qualified employees weren recruited during the year. Specialists have been hired on a consulting basis in both the parent company and the subsidiary, with fixed-term assignments for specific tasks. The expansion and modernization of the premises in Taipei was completed in the spring.

The laboratory has since been improved and is now competitive on an international level. The expanded organization and improved laboratory in Taiwan has made a more effective and efficient development process possible. LightLab had ten full-time employees at the end of the year, seven of which were in Taiwan.

Patents

At the end of the year, the patent portfolio consisted of three families of patents with ten approved patents amongst the various components of the bulb. Two new priority applications were submitted in 2008 with a focus on applications and systems. Two previously submitted applications were approved in the USA, China, and India. A Patent Cooperation Treaty and a patent application in Taiwan were also approved.

Investments

SEK 0.9 million was invested in LightLab Asia during the year. The premises and equipment continue to be upgraded.

Financing and liquidity

Two new share issues were implemented in the summer of 2007, one of which had two programs for warrants. The first comprised 734,185 outstanding warrants in LightLab at a subscription price of SEK 19 per share. The last day for subscription was 31 March 2009. None of these warrants have been used to subscribe for new shares after the end of the year. The other program for warrants comprises 734,185 outstanding warrants at a subscription price of SEK 25.42 per share. The last day for subscription is 30 September 2010. These options should amount to SEK 18.4 million when fully subscribed.

(4)

During the second half of 2008, the Board of Directors evaluated various possibilities for increasing the company’s capital. Due to the poor market conditions, the Board called an Extraordinary General Meeting to be held on 14 April 2009, where it was resolved to implement two new share issues with preferential rights for the company’s shareholders. (See below under the heading: Important events after the fiscal year)

Liquidity at the end of the year was ensured up to May 2009. Liquid assets amounted to SEK 6.4 (20.2) million at the end of the year.

Option programs

The company has created two employee option programs. The first offers key personnel an opportunity to subscribe to a collective maximum of 75,000 shares at a price of SEK 7 per share. The program assumes that the key personnel have ceased involvement with the company by the end of 2008 and that they used their options by the end of April 2009.

The other employee option program gives key personnel an opportunity to subscribe to a collective maximum of 75,000 shares at a price of SEK 25.42 per share. The program assumes that the key personnel have ceased involvement with the company by the end of 2009 and that they used their options by the end of April 2010.

Results and financial position

The Group’s loss after financial items amounted to SEK -13,432 (-9,609) thousand, of which SEK 4,121 (2,699) thousand related to personnel costs. The parent company’s loss after financial items amounted to SEK -13,800 (-15,057) thousand, of which SEK 3,125 (1,940) thousand related to personnel costs. Earnings during the year were principally affected by the costs of expanding the organization in Taiwan and increased travel costs in connection with this expansion. These increased costs lie well within the framework of the long-term plan that has been established, and will contribute significantly to increasing the pace of research and development.

The Board of Directors’ work and organization

A mostly new Board of Directors was appointed at an Extraordinary General Meeting on 11 March 2008.

Erik Åsbrink (Chair), Matilda Dahl, Jan-Olof Hersler, Björn Karlsson and Christer Lindberg were appointed as members. CEO Bo Madsen was also re-elected. The Board of Directors was re-elected at the Annual General Meeting on 14 May. Björn Varnestig was co-opted to the Board of Directors in August 2008. The LightLab Board of Directors met 14 times during the year.

Important events after the fiscal year

LightLab signed a product development agreement with Teco Nanotech Co, Ltd. in February 2009, based on the Memorandum of Understanding with TECO Electric and Machinery Co. that was signed in December 2008. The agreement concerns the development and production of LightLab’s energy-saving bulbs. The aim is to adapt the bulbs for production on a larger scale.

In February, LightLab changed the execution venue for its shares and warrants from Nordic MTF to NASDAQ OMX First North. The first day of trading was Wednesday 25 February 2009.

In March 2009, LightLab signed an agreement with the Taiwanese company Tak-Lin’s Electronics Corp.

involving the development of certain products for medical use, based on LightLab’s patented technology in the field of x-rays. Tak-Lin’s Electronics chose LightLab after carefully evaluating the available alternatives.

In March, it was established that LightLab’s main product, the energy-saving bulb, had not reached its goals. In August 2008, an energy efficiency of 30 lumens per watt was recorded, which matched previous reports.

(5)

However, in March, the certification company Semco - Intertek measured a significantly lower rate of 15- 20 lumens per watt. There have been intensive efforts to discover why this deterioration may have occurred.

During the second half of 2008, LightLab’s Board of Directors evaluated various possibilities for increasing the company’s capital. Due to the poor market conditions, the Board called an Extraordinary General Meeting to be held on 14 April 2009, where it was resolved to implement two new share issues with preferential rights for the company’s shareholders, with each existing share entitling the holder to subscribe to a new class B share, totaling 4,405,112 new class B shares. The subscription price for a new share is set at SEK 2.50, which at full subscription would provide the company with SEK 11,012,780 before issue costs. The record day for participation in the issue is set at 21 April 2009 and the subscription period runs from 24 April to 8 May 2009.

Future outlook

The new issues were announced after the end of 2008 and LightLab expects that they will increase capital and provide opportunities to cooperate with the company’s partners with a focus on product development, licensing and/or sale of technology. The focus going forward will be on the energy-saving bulb in order to significantly improve energy efficiency and achieve a commercially acceptable service life. The likelihood of success is technically deemed to be uncertain and commercialization of the bulb is dependent on potential partners’ assessments. However, these risks are justified by the potentially high market value that a technical breakthrough can provide. This factor is especially significant at a time when conventional bulbs are being phased out of many markets and existing low-energy bulbs, unlike LightLab’s energy-saving bulb, contain environmentally hazardous mercury.

Proposed appropriation of profits

The Board proposes that the profits at the Company’s disposal:

Profit brought forward, SEK 17,271,436 Net loss for the year -13,800,383 3,471,053 be carried forward, SEK 3,471,053

(6)

Consolidated 01-01-2008 01-01-2007

Income Statement Note 31-12-2008 31-12-2007 SEK thousands

Net sales 226

Other operating income 4

4 226

Operating expenses

Other external costs 1, 2 -9,688 -7,196

Personnel costs 3, 4 -4,121 -2,699

Depreciation and write-downs of tangible

assets -217 -56

-14,026 -9,951

Operating loss -14,022 -9,725

Income from financial investments

Other interest income and similar income statement items

Interest expenses and similar income statement items -98 -58

Loss after financial items -13,432 -9,609

Net loss for the year -13,432 -9,609

(7)

Consolidated

Balance Sheet Note 31-12-2008 31-12-2007

SEK thousands

Assets Fixed assets Tangible assets

Equipment, tools, fixtures and fittings 6 1,603 527

Financial assets

Participations in associated companies 5 5

Total fixed assets 1,608 532

Current assets Current receivables

Other receivables 500 1 113

Prepaid expenses and accrued income 10 451 140

951 1253

Short-term investments

Other short-term investments 11 2,975 5,007

Cash and bank balances 3,477 15,216

Total current assets 7,403 21,476

Total assets 9,011 22,008

(8)

Consolidated

Balance Sheet (continued) Note 31-12-2008 31-12-2007 SEK thousands

Equity and liabilities Equity

Share capital 881 881

Restricted reserves

Non-restricted reserves 17,946 27,258

Loss for the year -13,432 -96,089

Total equity 5,395 18,530

Long-term liabilities

Liabilities to credit institutions 13 1,469 1,469

Current liabilities

Accounts payable - trade 760 630

Other liabilities 133 246

Accrued expenses and deferred income 14 1,254 1,133

2,147 2,009

Total equity and liabilities 9,011 22,008

Pledged assets None None

Contingent liabilities None None

(9)

Consolidated Statement of Changes in Equity

SEK thousands

Share capital

Restricted reserves

Non-restricted reserves and profit/loss for the year

Total equity

Equity, 31-12-2006 581 286 5,037 5,904

Exchange rate differences arising from translation of non-Swedish

operations

- - 458 458

Registered capital 286 -286

Loss for the year - - -9,609 -9,609

New share issue, share capital being registered

14 21,763 21,777

Equity, 31-12-2007 881 0 17,649 18,530

Exchange rate differences arising from translation of non-Swedish operations

- - 297 297

Loss for the year - - -13, 432 -13, 432

Equity, 31-12-2008 881 0 4,514 5,395

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Consolidated 01-01-2008 01-01-2007

Cash Flow Statement 31-12-2008 31-12-2007

SEK thousands Current activities

Loss after financial items -13,432 -9,609

Adjustments for non-cash items, etc. 217 58

Cash flow from current activities before

changes in working capital -13,215 -9,551

Cash flow from changes in working capital

Change in current receivables 302 -760

Change in current liabilities 138 668

Cash flow from current activities -12,775 -9,643

Investment activities

Investments in tangible fixed assets -1,171 -549

Investments in financial assets 0 0

Sale of fixed assets 0 0

Cash flow from investment activities -1,171 -549

Financing activities

New share issue 21,777

Cash flow from financing activities 21,777

Cash flow for the year -13,946 11,585

Liquid assets at the beginning of the year

Liquid assets at the beginning of the year 20,223 8,165

Exchange rate difference in liquid assets

Exchange rate difference in liquid assets 175 473

Liquid assets at the end of the year 6,452 20,223

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Parent Company 01-01-2008 01-01-2007

Income Statement Note 31-12-2008 31-12-2007 SEK thousands

Net sales -2 228

Other operating income 4 0

2 228

Operating expenses

Other external costs 1, 2 -11,236 -6,022

Personnel costs 3, 4 -3,125 -1,940

Depreciation and write-downs of

tangible and intangible fixed assets -24 -43

Other operating expenses -3 0

-14,388 -8,005

Operating loss -14,386 -7,777

Result from financial items

Result from participations in group companies 5 0 -7,381

Other interest income and similar income

statement items 684 158

Interest expenses and similar income statement items -98 -57

Loss after financial items -13,800 -15,057

Net loss for the year -13,800 -15,057

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Parent Company

Balance Sheet Note 31-12-2008 31-12-2007

SEK thousands

Assets Fixed assets Tangible assets

Equipment, tools, fixtures and fittings 6 89 30

Financial assets

Participations in group companies 7, 8 1,200 1,200

Participations in associated companies 9 5 5

1,205 1,205

Total fixed assets 1,294 1,235

Current assets Current receivables

Receivables from group companies 673 0

Other receivables 385 752

Prepaid expenses and accrued income 10 309 121

1,367 873

Current investments

Other short-term investments 11 2,975 5,007

Cash and bank balances 2,891 14,683

Total current assets 7,233 20,563

Total assets 8,527 21,798

(13)

Parent Company

Balance Sheet (continued) Note 31-12-2008 31-12-2007 SEK thousands

Equity and liabilities

Equity 12

Restricted equity

Share capital 881 881

Non-restricted equity

Share premium reserve 21,763 21,763

Capitalized loss -4,491 10,566

3,472 17, 272

Total equity 4,353 18,153

Long-term liabilities 13

Liabilities to credit institutions 1,469 1,469

Current liabilities

Accounts payable - trade 1,012 563

Liabilities to group companies 345 355

Other liabilities 169 246

Accrued expenses and deferred income 14 1,179 1,012

2,705 2,176

Total equity and liabilities 8,527 21,798

Pledged assets None None

Contingent liabilities None None

(14)

Parent Company Changes in Equity

Note Share

capital

Other non- restricted

equity

Total equity

Equity, 31-12-2006 867 10,566 11,433

New share issue, share capital being

registered 14 21,763 21,777

Equity, 31-12-2007 881 17,272 18,153

Loss for the year -13,800 - 13,800

Equity, 31-12-2008 12 881 3,472 4,353

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Parent Company 01-01-2008 01-01-2007

Cash Flow Statement 31-12-2008 31-12-2007

Current activities

Loss after financial items -13,800 -15,057

Adjustments for non-cash items, etc. 24 7,792

Cash flow from current activities before

changes in working capital -13,776 -7,265

Cash flow from changes in working capital

Change in current receivables -494 -708

Change in current liabilities 529 529

Cash flow from current activities -13,741 -7,444

Investment activities

Investments in tangible fixed assets -83 -23

Increase/decrease in other financial assets -2,581

Cash flow from investment activities -83 -2,604

Financing activities

New share issue 0 21,777

Cash flow from financing activities 0 21,777

Cash flow for the year -13,824 11,729

Liquid assets at the beginning of the year

Liquid assets at the beginning of the year 19,690 7,961

Liquid assets at the end of the year 5,866 19,690

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Additional Information

Accounting principles General principles

LightLab Sweden AB’s annual accounts have been prepared in accordance with the Swedish Annual Accounts Act and recommendations 1 to 29 and related statements from the Swedish Financial Accounting Standards Council.

The principles are unchanged compared to last year.

Valuation and translation principles

Receivables are reported at the amount expected to be paid.

Assets and liabilities in foreign currencies are valued at the closing day rate. Transactions in foreign currencies are translated according to the spot rate on the day of the transaction.

Fixed assets are depreciated according to a schedule of the expected period of use with regard to significant residual value. The following depreciation percentage is applied:

Tangible assets

Equipment and tools 20%

Financial assets intended for long-term investments are reported at acquisition value. If a financial asset has a lower value than the book value on the balance sheet date, the asset is written down to this lower value, as long as it can be assumed that the decline in value is permanent.

Other assets and liabilities are recorded at acquisition value unless indicated otherwise.

Income and expenditure has been distributed over time in accordance with generally accepted accounting principles.

Income tax

Reported income tax comprises tax that should be paid or received for the current year, adjustments for previous years’ tax, changes in deferred tax, and tax relating to participations in associated companies.

Valuation of all tax liabilities/receivables occurs in nominal amounts and is done in accordance with the tax rules and tax rates that have been decided or that have been announced and will most likely be implemented.

For items shown in the income statement, related tax effects are thereby also accounted for in the income statement. The tax effects of items that are accounted for directly against equity are shown against equity.

Deferred tax is calculated in accordance with the balance sheet method for all temporary differences arising between accounted for and tax values of assets and liabilities.

Deferred tax assets related to tax-loss carry-forwards or other future tax deductions are accounted for to the extent that it is likely that the deduction can be settled via a surplus in future taxation. The company is not currently carrying any tax assets relating to accumulated tax loss carried forward.

Cash Flow Statement

The cash flow statement has been prepared in accordance with the indirect method. The reported cash flow only includes transactions involving deposits or payments. In addition to cash and bank balances, short-term investments are also classified as liquid assets.

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Consolidated Accounts

Accounting principles

The structure of the consolidated accounts is taken from Swedish Financial Accounting Standards Council's recommendation RR 1:00.

The basis for classification as a subsidiary

The consolidated accounts include the company in which the parent company directly or indirectly holds more than 50% of the voting power, or in any other way has a controlling influence according to Annual Accounts Act 1:4.

Consolidation Method

The group’s annual accounts are prepared using the purchase method, which means that the subsidiary’s equity at acquisition, determined as the difference between the actual values for assets and liabilities, is eliminated in its entirety. The consolidated equity only includes that part of the subsidiary’s equity that is the result of acquisition.

Translation of foreign subsidiaries

Foreign subsidiaries’ annual accounts are translated in accordance with the Current Rate Method. All items in the balance sheet are calculated at the closing day rate. All items in the income statement are translated at the average rate. Translation differences are reported directly against equity. Inter-company profits within the group are eliminated in full.

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Notes

SEK thousands 1 Leasing contract

Group and Parent Company

Leasing costs for the year amount to SEK 82 thousand.

Future lease payments for non-cancelable leasing contracts fall due as follows:

2008 2007

Within one year 72 0

72 0

2 Fees and remuneration

Group and Parent Company

Audit assignments refer to examination of the annual accounts, accounting records and the administration of the CEO and Board of Directors, other tasks incumbent upon the company’s auditors, and advice or other assistance as a result of observations during the audit or the implementation of other such tasks.

Everything else is secondary.

2008 2007

Audit assignments, Öhrlings PricewaterhouseCoopers AB 75 269

Assignments other than auditing 272 265

347 534

(19)

3 Employees and personnel costs Group

Average number of employees 2008 2007

Women 2 1

Men 6 3

8 4

Salaries, remuneration and social security costs

Salaries and other remuneration to the Board and CEO 1,005 980

Salaries and other remuneration to other employees 2,229 1,354

Pension costs to other employees 108 68

Other social security costs 828 297

4,170 2,699

Parent Company

2008 2007

Average number of employees

Men 2 1

Salaries, remuneration and social security costs

Salaries and other remuneration to the Board and CEO 1,005 980

Salaries and other remuneration to other employees 1,302 620

Pension costs to other employees 65 66

Other social security costs 781 274

3,153 1,940

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4 Gender distribution in management Group

Board members

2008 2007

Women 3 1

Men 10 5

13 6

CEO and other executives

Men 3 2

3 2

Parent Company

2008 2007

Board members

Women 1 1

Men 5 2

6 3

CEO and other executives

Men 2 1

5. Result from participations in group companies

Parent Company

2008 2007

Write-down of claim LightLab Asia Corp 0 2,581

Write-down of shares LightLab Asia Corp 0 4,800

0 7,381

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6 Equipment, tools, fixtures and fittings Group

Accumulated acquisition values

31-12-2008 31-12-2007

Opening accumulated acquisition value 4,008 3,070

Purchases 1,171 549

Translation difference 812 389

Closing accumulated acquisition values 5,991 4,008

Accumulated depreciation

Opening accumulated depreciation -175 -122

Depreciation for the year -199 -72

Translation difference -7 19

Closing accumulated depreciation -381 -175

Accumulated revaluations Accumulated write-downs

Opening accumulated write-downs -3,306 -2,898

Translation difference -701 -408

Closing accumulated write-downs -4,007 -3,306

Closing balance 1,603 527

Parent Company

31-12-2008 31-12-2007 Accumulated acquisition values

Opening accumulated acquisition value 144 121

Purchases 83 23

Closing accumulated acquisition values 227 144

Accumulated depreciation

Opening accumulated depreciation -114 -71

Depreciation for the year -24 -43

Closing accumulated depreciation -138 -114

Closing balance 89 30

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7 Participations in group companies Parent Company

31-12-2008 31-12-2007 Accumulated acquisition values

Opening accumulated acquisition value 6,000 6,000

Closing accumulated acquisition values 6,000 6,000

Accumulated write-downs

Opening accumulated write-downs -4,800 0

Write-downs for the year 0 -4,800

Closing accumulated write-downs -4,800 -4,800

Closing balance 1,200 1,200

8 Specification of participations in group companies Parent Company

Participation,

%

Voting rights,

%

Number of shares

Book value

LightLab Asia Corp 100% 100% 1,200 1,200

Bright Europe AB 100% 100% 1,000 0 0

1,200 1,200

Information regarding corporate identity number and registered office:

Corporate identity no. Registered office

LightLab Asia Corp Taipei, Taiwan

Bright Europe AB 556654-9266 Stockholm

9 Participations in associated companies Parent Company

31-12-2008 31-12-2007 Accumulated acquisition values

Opening accumulated acquisition value 5 5

Closing accumulated acquisition values 5 5

Closing balance 5 5

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10 Prepaid expenses and accrued income Group

31-12-2008 31-12-2007

Prepaid rent 26 23

Prepaid expenses and accrued income 425 117

451 140

Parent Company

31-12-2008 31-12-2007

Prepaid rent 26 23

Other prepaid expenses 283 98

309 121

11 Short-term investments Group and Parent Company

Book value Market value

Year 2008 2,975 2,974

Year 2007 5,007 5,132

12 Equity Parent Company

Number of shares A- B- Total

shares shares number

Number, 31-12-2006 15,000 2,890,927 2,905,927

New share issue 765,000 765,000

Number, 31-12-2007 15,000 3,655,927 3,670,927

New share issue 734,185 734,185

Number, 31-12-2008 15,000 4390112 4,405,112

All shares are fully paid.

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13 Long-term liabilities Group and Parent Company

31-12-2008 31-12-2007 Maturity date later than 5 years after the balance-sheet date

Other long-term liabilities to Almi -1,469 -1,469

14 Accrued expenses and deferred income Group

31-12-2008 31-12-2007

Accrued holiday pay 524 350

Statutory social security contributions 104 170

Other items 626 613

1,254 1,133

Parent Company

31-12-2008 31-12-2007

Accrued holiday pay 524 350

Statutory social security contributions 104 49

Other items 551 613

1,179 1,012

.

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Stockholm, 14 April 2009

Erik Åsbrink Björn Karlsson

Chair

Matilda Dahl Jan-Olof Hersler

Christer Lindberg Bo Madsen

CEO

Auditor’s endorsement

Our audit report was submitted on 14 April 2009.

Öhrlings PricewaterhouseCoopers AB

Bertil Johanson

Authorized Public Accountant

(26)

Audit Report

To the Annual General Meeting of

LightLab Sweden AB (publ)

Corporate identity No. 556585-8981

We have audited the annual accounts, the consolidated accounts, the accounting records and the

administration of the Board of Directors and CEO of LightLab Sweden AB (publ) for the year 2008. The Board of Directors and CEO are responsible for these accounts and the administration of the Company, as well as for the application of the Annual Accounts Act when preparing the annual accounts and the consolidated accounts. Our responsibility is to express an opinion on the annual accounts, the consolidated accounts and the administration based on our audit.

We conducted our audit in accordance with the generally accepted auditing standards in Sweden. Those standards require that we plan and perform the audit to obtain reasonable assurance that the annual accounts and consolidated accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes examining the accounting principles used and their application by the Board of Directors’ and the CEO, and significant estimates made by the Board of Directors and the CEO when preparing the annual accounts and consolidated accounts, as well as evaluating the overall presentation of information in the annual accounts and the consolidated accounts. As a basis for our opinion concerning discharge from liability, we examined significant decisions, actions taken and circumstances of the Company in order to be able to determine the liability, if any, to the Company of any board member or the CEO. We also examined whether any board member or the CEO has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. We believe that our audit provides a reasonable basis for our opinion set out below.

The annual accounts and consolidated accounts have been prepared in accordance with the Annual Accounts Act and give a true and fair view of the Company’s and the Group’s financial position and results of operations in accordance with generally accepted accounting principles in Sweden. The statutory administration report is consistent with the other parts of the annual accounts and the consolidated accounts.

We recommend to the Annual General Meeting that the income statement and balance sheet of the Parent Company and the Group be adopted, that the profits of the Parent Company be dealt with in accordance with the proposal in the administration report, and that the members of the Board of Directors and the CEO be discharged from liability for the financial year.

Stockholm, 14 April 2009

Öhrlings PricewaterhouseCoopers AB

Bertil Johanson

Authorized Public Accountant