Review of financial reporting – Observe Medical ASA

14 May 2025 16:35 CEST

Finanstilsynet has reviewed the 2023 annual financial report and the 2024
half-year interim report of Observe Medical ASA, and concluded that there are
material and pervasive errors in the company's financial reporting. The review
has had a two-part main focus.

When it comes to the company's present main activity, Finanstilsynet has looked
into the accounting of the Convatec-transaction in the autumn of 2023, including
the accounting of associated start-up costs. Finanstilsynet's conclusion is that
the company's recognition and measurement of these matters are materially
erroneous compared to among other rules in IAS 38 Intangible assets and IFRS 9
Financial instruments. When it comes to the company's historic main activities,
Finanstilsynet has concluded that the company in 2023 did not perform an
impairment test of the book value of goodwill and intangible assets with
indefinite useful live acquired in past business combinations, as is required by
IAS 36 Impairment of assets. Furthermore, that such a test of impairment
performed in compliance with the requirements of IAS 36, should have resulted in
a material impairment in the 2023 annual financial statement. Material errors
and omissions in the disclosures of the company's annual and interim financial
reports were also detected.

The company has only to some degree taken note of Finanstilsynet's assessments.
Finanstilsynet's letter hence includes an order to make corrections in
compliance with IAS 8 Accounting Policies, Changes in Accounting Estimates and
Errors, of the matters for which the company has not already made corrections in
its periodic financial reporting or otherwise not confirmed that such
corrections will be made.

Observe Medical ASA has on receipt of this letter informed Finanstilsynet that
the company will comply, and in its 2024 annual financial report make the
imposed corrections.

If you have any questions, please contact:

Lars Jacob Braarud, Head of section, +47 22 93 97 53 / +47 91 34 52 73 (mobile)

More information:
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646363_Kontroll av finansiell rapportering Observe Medical ASA.pdf