1. Accounting policies  

1.1 Basis of preparation  

The consolidated report for the year 1 January –31 December 2023 (”2023”) has been prepared in accordance  

with IFRS Accounting Standards ("IFRS"), as adopted by the EU, IFRIC interpretations and with those parts of the  

Danish Financial Statements Act applicable to listed companies.  

IFRS is subject to amendments and interpretations by the IASB and the IFRS Interpretations Committee, and there  

is an on-going process of review and endorsement by the European Commission. The consolidated report for 2023  

complies with each IFRS that is mandatory for accounting periods ending on 31 December 2023.  

The consolidated report have been prepared on the going concern basis and have been prepared under the  

historical cost convention.  

The principal accounting policies are set out below.  

Accounting for Reponex transaction:  

On 24 March 2023, Pharma Equity Group

A/S

(”PEG”) acquired the entire share capital in Reponex  

Pharmaceuticals (”Reponex”) in exchange for shares in PEG and whereby the shareholders of Reponex have  

become the majority owner of PEG. The acquisition of Reponex means that PEG from 24 March 2023 is required to  

publish consolidated financial statements. In the past, PEG's financial reporting has been on a stand-alone basis.  

With the Reponex shareholders becoming the majority owners of PEG, Reponex has been identified as accounting  

acquirer for the purposes of the consolidated financial statements. Hence, the consolidated report reflects the  

assets, liabilities, operations and cash flows of Reponex for the entire 2023, including reported comparative  

figures, whereas the assets, liabilities, operations and cash flows of PEG are reflected in the consolidated report  

from 24 March 2023 where the transaction was completed. Hence, this is an important change compared to the  

past. For the reporting of historical financial figures for PEG, these are reported as comparative figures in the  

parent financial statements.  

Also, Reponex has applied IFRS in the past, and there have been no changes in the accounting principles and the  

application of IFRS for 2023 compared to the accounting principles applied by Reponex in the past, except for a  

change in the accounting for development projects and presentation of inventories as described below.  

Change in the accounting for development projects:  

Reponex has a pipeline of biotech development projects in the form of product candidates in phase 2. The Group  

plans to out-license their product candidates to partners when this is considered feasible and commercial  

attractive.  

Until 2020, Reponex capitalized certain development costs relating to the then ongoing development projects.  

Due to the general uncertainty as to whether final approvals will be obtained, and thereby the inherent  

uncertainty relating to the value of the ongoing development projects, Reponex ceased to capitalize further  

development costs from 2021, and from 2021 the then capitalized development costs have been subject to  

amortization on a straight-line basis over 14 years being the remaining life-time (in 2021) for underlying patents.  

Considering that the development is still ongoing for the product candidates, Management has reconsidered the  

accounting policy adopted in 2021, and Management has concluded that it is inappropriate to amortize the  

capitalized development costs since amortization imply that the development has been completed and the related  

intellectual properties have been taken in use, which is not yet in fact the case. On this basis, with effect from  

2023 the amounts capitalized in the past are now presented as “Development projects in progress” rather than  

“Completed development projects”. The change is accounted for as a change in accounting policy with retroactive  

impact from 2021 where the previous practice was introduced, and hence the comparative figures for 2021 and  

2022 have been amended accordingly by reversing the amortization charges recognized in 2021 and 2022. As a  

consequence of the changed accounting, the capitalized development costs will be tested annually for  

impairment. See note 2.2 and note 11.  

The change can be summarized as follows:  

2023  

2022  

Effect of change in Accounting policy  

Amounts  

Amounts  

under  

Amounts  

under  

Amounts under  

previous  

under new  

previous  

new policy  

policy  

policy  

policy  

TDKK  

TDKK  

TDKK  

TDKK  

Consolidated income statement:  

Research and development costs  

-9,082  

-9,848  

-5,497  

-6,263  

Operating profit/loss (EBIT)  

-20,891  

-21,657  

-11,277  

-12,043  

Tax on profit/loss for the year  

2,233  

2,233  

1,855  

1,855  

Net profit/loss for the year  

-24,609  

-25,375  

-9,444  

-10,210  

Total comprehensive income/loss  

-24,609  

-25,375  

-9,444  

-10,210  

Consolidated Statement of financial position:  

Intangible assets  

13,598  

11,301  

13,860  

12,328  

Total equity  

38,931  

36,634  

18,911  

17,379  

Total balance sheet  

81,335  

79,038  

21,516  

19,984  

Change in presentation inventories / prepaid costs  

In the financial report for Reponex for 2022, an amount of TDKK 1,592 was presented as inventory under current  

assets. The amount consists of purchased and not yet used drugs and materials to be used in the testing and  

documentation of the development of the different drug candidates. With effect from 2013 such purchases not yet  

consumed are recognized and presented as prepaid costs. The 2022 figures have been adjusted accordingly.The  

change in classification does not have any influence of the result nor the equity for the year.  

1.2 Foreign currency translation  

Functional and presentation currency  

The financial statements are presented in DKK, which is also the functional currency of the Group.  

Foreign currency transactions and balances  

Foreign currency transactions are translated into the functional currency, using the exchange rates prevailing at  

the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions  

and from the re-measurement of monetary items denominated in foreign currency at year-end exchange rates are  

recognised in the income statement.  

Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the  

exchange rates at the transaction date), except for non-monetary items measured at fair value which are  

translated using the exchange rates at the balance sheet date.  

1.3 Revenue and segments  

The Group has not yet engaged in revenue generating activities and hence no revenue is recognized in the  

financial statements.  

Currently, Management regard the Group to operate in one segment, and hence no segment disclosures are  

provided.  

1.4 Research and development costs  

Research and development costs primarily comprise internal and external costs related to development activity.  

The costs include external consultants, employee costs, materials and registration work regarding patents.  

1.5 Administrative costs  

Administrative costs comprise costs incurred during the year concerning management and corporate costs,  

including costs concerning administrative staff, the executive board, stock exchange costs, investor relations

and  

IT etc.  

1.6 Net financials  

Net financials comprise interest,

currency gains/losses, amortisation of financial assets and liabilities, additions  

and reimbursements under the Danish tax repayment scheme, etc. Financial income and expenses are recognised  

in the income statement with the amounts that relate to the respective financial years. Fair value changes relating  

to the Portinho S.A receivable is due to the financial nature of the receivable also included in Net financials.  

1.7 Share based employee remuneration  

In the past, Reponex has issued equity-settled share-based remuneration plans for its employees and member of  

the board of directors. The last plan was settled in February 2023 with an equity inflow of DKK 12.7m in Reponex.  

As per 31.12 2023 there are no ongoing share-based remuneration plans.  

In the past, the share-based remuneration plans have been recognized as an expense with a corresponding credit  

to retained earnings. If vesting periods or other vesting conditions applied, the expense was allocated over the  

vesting period, based on the best available estimate of the number of share expected to vest.  

Upon exercise of warrants, the proceeds received, net of any directly attributable transaction costs, have been  

allocated to share capital up to the nominal (or par) value of the shares issued with any excess being recorded as  

share premium, and where the share premium amount is immediately reclassified to retained earnings as allowed  

under the Danish Company Law.  

1.8 Intangible assets  

Development projects and patents  

Patents and development costs recognised in the balance sheet are measured at cost less accumulated  

amortization and any write-downs for impairment. Patents and finalized development projects are amortized over  

the remaining lifetime of the patents with 2021 as the starting year for amortization where the patents had a  

remaining life time of 14 years. Amortization methods, useful years and residual values are reviewed every year.  

Reference is made to note 1.1 above where a change between completed and ongoing development projects is  

described inluding reversal of amortisation recognised in the past. Further reference is made to note 2.2 where  

the most significant estimations relating to development projets and patents are described.  

Gain and loss from the sale of intangibles are calculated based on the difference between the sales price with  

deduction of sales costs and the book value at the time of the sale. Gain or loss are recognised in the income  

statement as other operating income or other operating expenses.  

1.9 Tangible assets  

Tangible fixed assets are measured at cost less accumulated depreciation and any write-down for impairment.  

The depreciable amount is cost less any expected residual value after the end of the useful life of the asset.

The  

depreciation period and the residual value are determined at the acquisition date and

reassessed annually.  

If the residual value exceeds the carrying amount, depreciation is discontinued.  

If the depreciation period or the residual value is changed, the effect on deprecation will, in future, be recognised  

as a change in the accounting estimates.  

The cost comprises acquisition cost and costs directly associated with the acquisition until the time when the asset  

is ready for use. The

cost of an asset is divided into separate components

components  

when relevant. These

are depreciated

separately, the useful lives of each individual components differing, and

the individual  

component representing a material part of the total cost.  

Depreciation is recognized on a straight-line basis according to an assessment of the expected useful life

and the  

residual value of the individual assets:  

Useful life  

Residual value  

Equipment  

3-5 years  

0%  

Gain or loss derived from the disposal of tangible fixed is measured as the difference between the sales price less  

selling costs and the carrying amount at the date of disposal. Gain or loss is recognised in the income statement as  

other operating income or other operating expenses.  

1.10 Leased assets and leasing liabilities  

The Group assesses whether a contract is or contains a lease at inception of the contract. The Group recognizes  

right-of-use assets and corresponding lease liabilities at the lease commencement date, except for short-term  

leases and leases of low value. For these leases, lease payments are recognized as an operating expense on a  

straight-line basis over the term of the lease.  

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liabilities  

adjusted for any lease payments made at or before the commencement date, plus initial costs incurred.  

The right-of-use assets are subsequently measured at cost less accumulated depreciation and any impairment  

losses . The right-of-use assets are from the commencement date depreciated over the shorter period of lease  

term and useful life of the underlying asset. The estimated useful lives of right-of-use assets are determined on  

the same basis as those of the Group's corresponding assets such as equipment. In addition, right-of-use assets  

are periodically reduced by impairment losses, if any.  

The lease liabilities are initially measured at the present value of the lease payments that are not paid at the  

commencement date, discounted using the interest rate implicit in the lease or, if that rate con not be readily  

determined, the Group's incremental borrowing rate.  

Lease payments included in the measurement of the lease liabilities comprise the following:  

- Fixed

payments.  

- Variable

payments, if any, dependent on an index or rate.  

- The

exercise price of a purchase option, if any,

if it is reasonably certain that the option will be exercised.  

- Amounts

expected to be payable under residual value guarantees, if applicable.  

The lease liabilities are subsequently measured at amortized cost using the effective interest method. It is  

remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a  

change in the estimate of the amount expected to be payable under a residual value guarantee, or if management  

changes its assessment of whether it will exercise a purchase, extension or termination option.  

When the lease liabilities are remeasured in this way, a corresponding adjustment is made to the carrying amount  

of the right-of-use assets, or is recorded in profit or loss if the carrying amount of the right-of-use assets has been  

reduced to zero.  

1.11 Impairment testing of intangible assets and tangible assets  

The carrying amounts of both intangible and tangible assets are subject to an annual impairment assessment in  

order to disclose any indication of impairment beyond those expressed by amortisation and depreciation.  

If indications of impairment are are assessed to exist, impairment tests are carried out for each individual asset or  

group of assets (cash-generating unit).  

Developments projects in progress and any intangible assets with indefinite lives will be impairment tested  

annually, no matter whether or not there are any indication of impairment.  

An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount  

exceeds its recoverable amount, which is the higher of fair value less costs to sell and value-in-use. Reference is  

made to note 2.2 and 11 for a discussion of the impairment assessments and impairment testing applied for 2023  

for intangible assets.  

1.12 Financial instruments  

Recognition, initial measurement and de-recognition  

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual  

provisions of a financial instrument and are measured initially at fair value adjusted by transaction costs, except  

for those carried at fair value through profit or loss which are measured initially at fair value. Subsequent  

measurement of financial assets and financial liabilities are described below.  

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or  

when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised  

when it is extinguished, discharged, cancelled or expires.  

Classification and subsequent measurement of financial assets  

For the purpose of subsequent measurement, financial assets other than those designated and effective as  

hedging instruments (currently not relevant) are classified into the following categories upon initial recognition:  

1) loans and receivables (amortized costs)  

2) financial assets at fair value through profit or loss (FVTPL) - currently not relevant  

3) held-to-maturity (HTM) investments - currently not relevant.  

All financial assets except for those at FVTPL are subject to review for impairment at least at each reporting date  

to identify whether there is any objective evidence that a financial asset or a group of financial assets is impaired.  

Different criteria to determine impairment are applied for each category of financial assets, which are described  

below.  

All income and expenses relating to financial assets that are recognised in profit or loss are presented within  

finance costs, finance income or other financial items.  

Loans and receivables  

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted  

in an active market. After initial recognition, these are measured at amortised cost using the effective interest  

method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. The  

Group’s cash and cash equivalents, trade and most other receivables fall into this category of financial  

instruments.  

Reference is made to note 2.1 and 14 in relation to the measurement of the Portinho receivable following that  

reverse take-over accounting has been applied for the PEG/Reponex transaction.  

1.13 Income taxes  

Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other  

comprehensive income or directly in equity.  

Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating  

to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable  

profit, which differs from profit or loss in the financial statements. Calculation of current tax is based on tax rates  

and tax laws that have been enacted or substantively enacted by the end of the reporting period, including any  

expected tax refund under the tax credit system for development activities. As described in note 9, current tax in  

2022 and 2023 only relates to recognition of tax credit from the Group's development activities.  

Deferred income taxes are calculated using the liability method on temporary differences between the carrying  

amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial  

recognition of goodwill, or on the initial recognition of an asset or liability unless the related transaction is a  

business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with  

investments in subsidiaries is not provided if reversal of these temporary differences can be controlled by the  

Group and it is probable that reversal will not occur in the foreseeable future.  

Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to  

their respective period of realisation, provided they are enacted or substantively enacted by the end of the  

reporting period. Deferred tax assets are recognised to the extent that it is probable that they will be able to be  

utilised against future taxable income, based on the Group`s forecast of future operating results which is adjusted  

for significant non-taxable income and expenses and specific limits to the use of any unused tax loss or credit.  

Deferred tax liabilities are always provided for in full.  

Deferred tax assets and liabilities are offset only when the Company has a right and intention to set off current tax  

assets and liabilities from the same taxation authority.  

As further described in note 9, no deferred tax assets have been recognized at 31.12.2023 and 31.12.2022.  

Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or  

loss, except where they relate to items that are recognised in other comprehensive income, or directly in equity,  

in which case the related deferred tax is also recognised in other comprehensive income or equity, respectively.  

1.14 Cash and cash equivalents  

Cash and cash equivalents comprise on demand bank deposits.  

1.15 Equity, reserves and dividend payments  

Share capital represents the nominal value of shares that have been issued and fully paid in.  

Share premium includes any premiums received on issue of share capital. Any transaction costs associated with  

the issuing of shares are deducted from share premium, net of any related income tax benefits. As allowed under  

Danish corporate laws, share premium is presented as part of retained earnings, since share premium is a  

available for dividend distribution and can be used to cover negative free reserves.  

Retained earnings includes all current and prior period retained profits and losses and share-based employee  

remuneration as well as transfers of share premium.  

All transactions with owners are recognized separately within equity.  

Dividend distributions payable to shareholders are included in other liabilities when the dividends have been  

approved at a general meeting prior to the reporting date.  

2 Significant accounting estimates and judgements  

For 2023, Management has especially applied significant accounting estimates and judgements as follows:  

2.1 Accounting for PEG/Reponex transaction  

Reverse take-over  

As of 24 March 2023, PEG acquired 100% of the share capital in Reponex by issuing 977,347,625 shares of DKK 1  

each in a rights issue to the shareholders of Reponex after which the shareholders in Reponex owned approx. 95%  

of the total share capital in PEG. On this basis, Reponex has been identified as the accounting acquirer for the  

purposes of the preparation of the consolidated financial statements, and the transaction is accounted for as a  

reverse take-over. Reference is made to note 5 for further information.  

Measurement of Portinho S.A receivable at transaction date  

PEG’s receivable from Portinho S.A has been outstanding for some years. In 2021 it was agreed to defer  

payment of the outstanding amount to 1 July 2023 at the latest.  

As a result of the PEG/Reponex transaction being accounted for as a reverse take-over, PEG’s Portinho S.A  

receivable has been subject to a separate fair value measurement exercise at the transaction date, since IFRS  

rules, in a reverse take-over transaction, require identifiable assets and liabilities of PEG to be recognised and  

measured at their fair values at the transaction date. Management has considered various ways of  

determining a relevant and reliable fair value of the receivable, and concluded that fair value of the receivable  

extracted from the market value of PEG, just prior to the transaction, represented the most relevant and  

reliable fair value of the receivable at the transaction date:  

- Just

prior to the transaction, PEG in reality only had one asset and did not have any operations, and hence,  

the market value of PEG to a large extent reflected the market’s valuation of the receivable.  

- Due

to the nature of the receivable, Management has concluded that a separate fair value assessment of  

the receivable, including making use of outside experts, would be subject to significant uncertainty, and  

thereby such valuation would not be a better or more reliable reflection of the receivable’s fair value than the  

fair value which could be extracted from the market value of PEG just prior to the completion of the  

transaction.  

- Management

has considered whether the market value of PEG just prior to the completion of the  

transaction included a value relating to the shell of PEG being an empty stock listed company. Management  

has noted that the price per share of PEG has decreased after the completion of the transaction and the listing  

of the shares issued to the Reponex shareholders. Although the development in the stock price for the PEG  

shares after the listing of the new shares is a result of multiple elements, Management

finds that the  

development in the share price – among other things – indicate that the market had not assigned a substantial  

value to the upcoming Reponex transaction in the stock price for PEG prior to the completion of the  

PEG/Reponex transaction, and hence Management finds that it is reasonable to assume and conclude that the  

value of the stock shell is not material, and hence no value for stock shell has been identified and recognized in  

the 2023 consolidated financial statements.  

By determining the fair value by extracting it from the market value of PEG just prior to the completion of the  

transaction, the Portinho S.A receivable was valued at DKK 62.4 million at 24 March 2023 (the transaction  

date).  

Measurement of Portinho SA receivable at balance sheet date  

Portinho S.A did not pay the receivable at 1 July 2023. Representatives of PEG have been in regular dialogue  

with representatives of Portinho S.A to find solutions for securing that the receivable and ensuring it will be  

recovered. During the dialogue between the Company´s Board of Directors and the management of Portinho  

S.A. the exact receivable amount has been confirmed as per 31 December 2023 to EUR 10.6m (approximately  

DKK 78.9m including added interest). As part of the dialogue, interest rate going forward from 1 July 2023 has  

been agreed to 2% per quarter. Before reassessing the value of the receivable, see below, the carrying value of  

the receivable at 31 December 2023 equaled DKK 65.8m including added interest for the period 1 April – 31  

December 2023 of DKK 3.4m.  

Based on the regular dialogue with representatives from Portinho S.A, Management finds that it is reasonable  

to expect that the receivable will be recovered in time. However, since Portinho S.A was not able to settle the  

receivable at the agreed maturity and still has not honored the receivable, Management has reassessed the  

value of the receivable. The key assumptions applied include:  

(i) Despite the fact that the amount has not yet been received, based on the dialogue with representatives of  

Portinho S.A and assessment of the realistic value of underlying development projects, Management is still  

convinced that the amount in time will be received from Portinho S.A including interest. Among others,  

reference is made to Company Announcements No. 36 from 30 June 2023, No. 39 from 25 September 2023,  

and No. 46 from 28 November 2023 .  

(ii) Management has looked at various ways of securing the full settlement of the receivable and the realistic  

timeframes for the various scenarios. This includes balancing giving Portinho time to complete the selling of  

the company or the underlying assets or other ways of securing funding to be able to settle the debt to PEG,  

and considering using legal actions or taking the shares in Portinho S.A back and sell the shares to third parties,  

etc.  

(iii) Management has calculated present values for the various scenarios applying a discount rate that reflect  

the uncertainty in the timeframe which especially is due to uncertainty relating to the timeframe for Portinho  

S.A obtaining cash-flows from its underlying development projects.  

By applying this methodology, Management has assessed the estimated net realisable value of the receivable  

to be DKK 58m at 31 December 2023, and hence the consolidated income statement reflects an allowance loss  

of DKK 7.8m (of which DKK 3.4m relates to the interest for the period 1 April – 31 December 2023), whereby  

the net allowance equals DKK 4.4m.  

Portinho receivable as a financial resource  

The receivable represents a significant expected financial resource to the Group, and hence Management has  

also made assessments of consequences if the receivable is not paid at the agreed due date. As further  

outlined in note 19, the majority of the Group’s short-term financial loans fall due concurrently with the  

receipt of payment from Portinho S.A, and as further outlined in note 22, this will ensure that the Group has  

sufficient financial resources available to executing on its plans for the foreseeable future and settle those  

financial obligations which falls due in 2024 even without receiving any payment from Portinho S.A in 2024.  

2.2 Accounting for development costs  

The Group is engaged in

development activities relating to various product candidates and as such, for  

financial reporting purposes, the Group makes estimates as to whether the development costs meet the  

requirements for capitalization, or whether the costs incurred should be expensed as incurred. Reponex'  

development projects are all ongoing with the target of entering into partnerships with third parties who will  

bring the products to the market based on license agreements securing the Group revenue in the form of  

upfront license payments and ongoing license payments.  

With effect from 2021 the then Reponex Management assessed that development costs incurred in 2021 and  

onwards did not meet the capitalization criteria in IAS 38 “Intangibles” and hence all development costs  

incurred from 2021 and onwards have been expensed as incurred. Despite Management has positive  

expectations for all ongoing product candidates, inherent significant uncertainty exist as to the future  

commercial and economical potential, including whether regulatory approvals will be obtained as a key  

success factor. Hence, Management has determined that it is considered most appropriate to expense all  

development costs as inclurred also in 2023.  

Also from 2021, Reponex began amortization of the amounts capitalized in the past of totally DKK 11.0m. As  

described in note 1.1, management has reassessed this accounting policy and concluded that it is  

inappropriate to recognize amortization charges as long as the product candidates are under development and  

no income generating activities take place. Hence past amortization charges have been reversed applying the  

rules for changes in accounting policy with retroactive adjustment of comparative figures.  

As a result of reclassifying the development projects to be projects in progress, IAS 38 requires that these  

ongoing projects are tested for impairment at least annually by comparing the carrying amounts with the  

recoverable amounts where the recoverable amounts are the higher of fair value less cost of disposal and  

value in use.  

Management has performed an impairment test based on the rNPV-model ("risk adjusted net present value"),  

which is considered to be the appropriate model for determining fair value for life science development projects in  

its early stages. The rNPV-model is a variant of the discounted cash-flow model. The model has been applied for  

each of the product candidates under development in Reponex. Using this method, the value of the product  

candidates is the net present value of the forecasted cash flows where the cash flow projections are based on  

estimated market size, market share, treatment price, time to market, patent lifetime, royalty rate and  

development cost. The royalty rate has generally been set using an average of 25%.  

To arrive at the net present value, the cash flow projectsions have been discounted based on a risk-adjusted  

discount rate based on cost-of-capital with the addition for risk factors like development risk and risks relating to  

the estimations applied for market size, market share, treatment price, time to market, patent portfolio,  

partnerships, etc. The cost-of-capital has been set at 11,2% and including the risk factors, the risk-adjusted  

discount rate has been set at 22.0%.  

The model is inherently subject to significant uncertainty since the actual figures may differ significantly from the  

estimates applied, including risk such as product candidates will not obtain regulatory approvals or Reponex will  

not be able to enter into partnerships with third-party pharmaceutical companies, which is key to bring the  

product candidates to the market and thereby a key assumption for obtaining royalties in the future.  

At this stage, it is Management's assessment that the development of all product candidates are progressing  

satisfactory and Management believes that it is both realistic and achievable that partnership agreements will in  

time be entered for all or most of the product candidates, and that the risk-adjusted discount rate appropriately  

takes into consideration the multiple risks associated with all of the product candidates, but also with due  

consideration that the potential earnings for the product candidates should partnerships be entered and should  

the assumptions about the market size, market share, treatment price, life time of the products/patents, etc. be  

materialised as assumed, the value of the royalty earnings will far exceed the rNPV determined for each of the  

products.  

In the base case, applying an average royalty rate of 25% and discounting future cash-flows with 22.0%, the value  

of the Reponex development projects has been determined to be DKK 1.6 bn, which thereby implies that the value  

of the development projects in progress is not impaired.  

Sensitivity has not been disclosed due to the considerable head room between the calculated NPV and the  

carrying value of development projects in progress.  

4. Revenue and segment information.  

No revenue has been recognized in 2023 and 2022. Currently, Management regard the Group to operate in one  

segment, and hence no segment disclosures are provided at this stage.  

The PEG/Reponex transaction and the related presentation of the consolidated statement of financial position end  

March 2023 (approximation of transaction date) can be summarized as follows:  

PEG fair value  

of assets and  

liabilities and  

Reponex  

consideration  

Elimination  

PEG Group  

TDKK  

TDKK  

TDKK  

TDKK  

Non-current assets  

Intangible assets  

12,071  

0

0

12,071  

Tangible assets  

69  

0

0

69  

Right-of-use assets  

510  

0

0

510  

Equity investments in Reponex  

0

689,030  

-689,030  

0

Tax receivable  

536  

0

0

536  

Total non-current assets  

13,185  

689,030  

-689,030  

13,185  

Current assets  

Receivable Portinho S.A.  

0

62,403  

0

62,403  

Other receivables  

841  

184  

0

1,024  

Prepaid expenses  

1,642  

0

0

1,642  

Current tax receivable  

1,855  

0

0

1,855  

Cash and cash equivalents  

11,041  

1,037  

0

12,079  

Total current assets  

15,379  

63,624  

0

79,003  

Total assets  

28,565  

752,654  

-689,030  

92,188  

Total Equity  

26,708  

723,699  

-689,030  

61,376  

Liabilities  

Lease liabilities, long-term  

222  

0

0

222  

Trade payables  

816  

8,197 *  

0

9,013  

Bank debt  

0

7,411  

0

7,411  

Financial loans  

0

6,996  

0

6,996  

Loan from shareholders  

0

6,352  

0

6,352  

Lease liabilities, Short-term  

288  

0

0

288  

Other liabilities  

531  

0

0

531  

Total liabilities  

1,857  

28,955  

0

30,812  

Total equity and liabilities  

28,564  

752,654  

-689,030  

92,188  

*Trade payables include accrued transaction costs and costs related to the listing of the newly issued shares to the  

Reponex shareholders, including costs related to the preparation of the prospectus, of totally DKK 6.6m. These costs  

have been incurred by PEG prior to the transaction date, and as a result of applying reverse takeover for the  

transaction, these transactions costs do not appear from the consolidated statement of change in equity, but they  

appear from the cash flow statements when being paid and they appear seperately in the parent stand-alone financial  

statements.  

2023  

2022  

6. Staff costs  

TDKK  

TDKK  

Wages and salaries  

5,529  

2,180  

Share based payments  

0

217  

Pensions  

382  

117  

Social security costs  

17  

20  

Total  

5,928  

2,534  

Staff costs are presented as follows in the income statement  

Research and development costs  

2,173  

0

Administrative costs  

3,756  

2,534  

Total  

5,928  

2,534  

Average number of employees in the period  

6

3

Total  

6

3

Remuneration of Directors  

TDKK  

TDKK  

Board of Directors  

838  

0

CEO  

2,554  

1,757  

Other Key Management Personnel  

0

0

Total remuneration for Directors  

3,391  

1,757  

Share based employee remuneration  

In February 2023, warrant holders of Reponex exercised 203.266 warrants resulting in a cash equity inflow of DKK 12,7  

million after which there are no outstanding warrants. The expense of the program was allocated over the original  

vesting period where the expense was determined using Black-Scholes formula as follows:  

Grant date  

27 Aug 2020  

Vesting period ends (original agreement)  

15 Sept 2023  

Share price (DKK) at date of grant  

45.00  

Volatility  

20.58%  

Option period  

3.7 years  

Risk-free rate  

-0.34%  

Fair value (DKK) per option at grant date  

2.255  

Exercise price (DKK) at date of grant  

62.50  

The standard volatility was calculated on the basis of daily returns on pharmaceutical companies on STOXX 24 months  

before the grant of warrants. As the risk free rate, the 10-year treasury bond rate was used based on the average in  

August 2020.  

The value of the warrants program was calculated to TDKK 543 which was to be allocated over the vesting period. As  

part of the preparation of the PEG/Reponex transaction where the warrants program was changed to be exercised  

before the transaction date, Reponex decided to recognise the remaining value in full in its 2022 financial statements,  

hence no cost has been recognised in 2023.  

2023  

2022  

7. Financial income  

TDKK  

TDKK  

Misc. interest income  

14  

0

Total  

14  

0

2023  

2022  

8. Financial expenses  

TDKK  

TDKK  

Interest expenses on loans measured at amortized cost  

1,517  

0

Interest expenses lease liabilities  

45  

22  

Total  

1,562  

22  

2023  

2022  

9. Tax  

DKK  

DKK  

Tax on profit/loss for the year:  

Current tax  

-2,233  

-1,855  

Change in deferred tax  

-1,417  

-1,296  

Deferred tax asset not capitalized  

1,417  

1,296  

Total  

-2,233  

-1,855  

Under Danish tax legislation, the Group can apply for tax credit based on qualifying research and development  

expenses. For 2023, the expected tax credit is expected to be TKKK 2,233 (TDKK 1,855 in 2022 - amount was receieved  

in November 2023).  

Reconciliation of effective tax rate:  

Loss before tax  

-26,841  

-11,299  

Tax computed on the loss before tax at a tax rate of 22%  

-5,905  

-2,654  

Permanent differences and not capitalized tax asset  

-170  

-497  

Non capitalized tax asset  

4,236  

1,128  

Total - Effective tax rate  

6.9%  

-1,840  

-2,023  

Current tax asset  

Tax credit receivable  

-2,233  

-1,855  

Current tax asset, total  

-2,233  

-1,855  

Deferred tax is related to the following assets and liabilities:  

Deferred taxes arising from temporary differences are summarised below:  

Intangible assets  

2,662  

2,551  

Tangible assets  

12  

0

Tax losses carried forward  

-32,750  

-4,067  

Deferred tax asset not capitalized  

30,076  

1,516  

Total deferred tax  

0

0

Notes to the consolidated financial statements  

The Group has accumulated tax losses of DKK 147m the value of which equals DKK 31.7m (tax rate 22%). The value of  

the tax losses have not been recognised on the balance sheet. Any recognition awaits that the Group will become  

profitable on a sustainable basis.  

The tax losses can to a large extent only be utilised by the legal entity who has had the tax losses. Tax losses incurred  

after 24 March 2023 can be used by both companies in the Group. The access to utilizing the tax losses can be  

summarised as follows:  

2023  

2022  

TDKK  

TDKK  

Reponex value of tax losses carried forward  

4,321  

4,067  

PEG value of tax losses carried forward  

24,808  

0

Group value of tax losses carried forward  

3,621  

0

Unrecorded deferred tax asset  

32,750  

4,067  

10. Earnings per share  

PEG Group  

Reponex  

2023  

2022  

TDKK  

TDKK  

(restated)  

Profit/loss for the year  

-24,609  

-9,444  

Interest convertible loan  

126  

0

Profit/loss for the year for the purpose of diluted EPS  

-24,609  

-9,444  

Average number of shares (in thousands) Reponex  

2,522  

8,295  

Exchange rate applied in reverse take-over  

115  

115  

Average number of shares (in thousands) Reponex until reverse-take over date (1)  

290,030  

953,972  

Average number of shares (in thousands) PEG from reverse-take over date  

790,345  

0

Average number of treasury shares (in thousands)  

-15  

0

Average number of shares (in thousands) PEG after reverse-take over date (2)  

790,330  

0

Average number of shares (in thousands) full year (1+2)  

1,080,360  

953,972  

Effect of convertible loans (note 18)  

8,192  

0

Effect of warrants issued (Reponex)  

0

203  

Diluted average number of shares (in thousands)  

1,088,551  

8,499  

Exchange rate applied in reverse take-over  

n.a  

115  

Diluted average number of shares (in thousands)  

1,088,551  

977,348  

Earnings per share of DKK 1.00 (DKK)  

-0.02  

-0.01  

Diluted earnings per share of DKK 1.00 (DKK)  

-0.02  

-0.01