A N N U A L
R E P O R T 2 0 2 4
Observe
Medical ASA
ANN UAL
REPO RT
2 0 2 4
Observe Medical ASA
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
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OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
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O B S E R V E M E D I C A L
I N B R I E F
Observe Medical is a Nordic medtech company that develops, markets and sells innovative medtech
products for the global market. Observe Medical is committed to improving patient welfare and patient
outcomes, improving clinical data accuracy and promoting positive health economics.
Observe Medical seeks to drive growth by leveraging its expertise in sales and commercialization of
its broad portfolio of medical technology products, mainly within urine output measurement. The
strategic vision is to be a Nordic medtech platform for scalable and profitable growth, product
development, regulatory performance and effective manufacturing.
The Group is headquartered in Oslo, Norway, with R&D, regulatory and distribution operations in
Gothenburg, Sweden. In addition, Observe Medical has established a distributor and partner network
globally.
The current portfolio of proprietary products consists of Sippi®, a CE marked digitalized system for
urine output measurement, the UnoMeter™ portfolio consisting of manual urine output measurement
products and solutions for measuring intra-abdominal pressure, and the Biim ultrasound probe, which
is a wireless, pocketable imaging solution designed for quick and efficient point-of-care diagnostics,
offering high-quality imaging, seamless connectivity, and user-friendly operation.
Proprietary
products
Platform for
innovative
Nordic
ecosystem
M&A
Opportunities
Patient welfare
Data accuracy
Health economics
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
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2024
H I G H L I G H T S
U N O M E T E R ™ 5 0 0 P O S T M A R K E T U P G R A D E
Post market upgrade finalized in August. After input from several markets, it was decided to upgrade
the specifications of the product to improve the effectiveness of the product. This process led to
postponed sales of UnoMeter™ 500. Market validation and confirmation during second half of the year
with sales catching up in Q4.
U N O M E T E R ™ S A F E T I P L U S D E V E L O P M E N T A N D L A U N C H
In November 2024 UnoMeter™ Safeti™ Plus was re-launched as the final product in the portfolio of
mechanical urimeters included in the Convatec portfolio. In 2021 this product alone was selling at a level
of 121 mNOK annually (more than 200 mNOK adjusted for today's currency and market pricing). With
this launch the full portfolio of previous Convatec products was brought back to the market giving access
to a market with annual sales of approx. 700 mNOK and specifically the 220 mNOK annual sales that
Convatec had in 2021 from this portfolio (360 mNOK adjusted for today's currency and market pricing).
C O N T I N U E D E X P A N S I O N O F S A L E S D I S T R I B U T I O N N E T W O R K The
Group has been making progress in gradually re-establishing the historical sales distribution network
globally, as of December 31 Observe Medical is present in countries mainly covering Europe, Middle
East, Asia and South America.
P R I V A T E P L A C E M E N T , S U B S E Q U E N T O F F E R I N G A N D D E B T
C O N V E R S I O N
In July 2024, the Group completed a private placement of a gross amount of NOK 22.0 million, followed
by a subsequent offering raising NOK 0.9 million in gross proceeds. Navamedic ASA converted NOK
16.4 million of the loan to shares in December 2024
E V E N T S A F T E R T H E B A L A N C E S H E E T D A T E
The first major invoiceable supplies of UnoMeter™ Safeti ™ Plus was received in our warehouse in
Gothenburg in January and shipped to distributors in Europe, the Middle East and Asia.
The extraordinary general meeting was held on January 7, 2025, amongst other, to adopt a
consolidation of the Company's shares (reverse share split) in the ratio 15:1 to meet the Oslo Stock
Exchange's requirement of a minimum market value of NOK 1 per share. The new number of
outstanding shares is 19 258 412.
Agreements in principle reached with two senior creditors to reduce their debt position with 50%, a total
reduction of approximately NOK 40 million, with an adjusted payment plan for the remaining debt. Such
debt reduction is conditional upon injection of new equity in the minimum amount of NOK 25 million.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
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K E Y F I G U R E S
(Amounts in NOK thousand, except EPS,
equity ratio and number of FTE)
FY 2024
FY 2023
restated
Total income
18 483
27 942
Gross result adjusted*
6 159
9 632
Gross result
3 074
9 287
Operating expenses
33 093
52 234
EBITDA adjusted*
-26 934
-42 602
EBITDA
-30 019
-42 947
Depreciation and amortization
14 380
14 156
Write-down of goodwill
2 675
67 106
EBIT
-47 074
-124 209
Net finance
-11 652
-10 874
Result
-58 727
-135 099
EPS
-0.26
-2.34
Equity
21 136
40 868
Total balance
142 647
173 610
Equity ratio
14.8%
26.6%
Number of FTE’s at end of period
5
9
REVENUE & OTHER INCOME
GROSS PROFIT*
GROSS MARGIN*
EBITDA*
18.5 MNOK
-9.5 MNOK
YoY
6.2 MNOK
-3.4 MNOK
YoY
33.3%
-1.2 p.p.
YoY
-26.9 MNOK
+15.7 MNOK
YoY
*Adjusted items:
▪ Inventory write-down 3 085 TNOK
▪ Impairment of goodwill 69 781 TNOK
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
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L E T T E R F R O M T H E C E O
Dear shareholders,
2024 marked a pivotal year for Observe Medical, as we successfully completed the re-launch of the
UnoMeter™ portfolio — a product line that in 2021 represented a sales-to-market value of NOK 360
million*. The most significant milestone was achieved in November 2024 with the establishment of high-
volume production capacity, regulatory approval, and the commercial launch of UnoMeter™ Safeti™ Plus.
This product alone accounted for more than NOK 200 million* in 2021 sales-to-market.
Throughout the year, our commercial presence has expanded significantly. We now have an established
distribution network covering over 35 countries across Europe, Asia, and South America — a clear
testament to our global ambition.
Our pipeline remains strong, with several product launches planned for 2025. These include UnoMeter™
Safeti™ MAX, featuring advanced patented infection control technology, and the launch preparations for
UnoMeter™ Sippi — both key additions to our growing portfolio. With these developments, we have laid
a solid foundation for our ambition to become a global leader in urine output measurement.
In the second half of 2024, Fresenius Medical Care, under new leadership, extended its agreement and
conducted a renewed evaluation of the Biim ultrasound’s value contribution in its U.S. clinics. Initial
findings were positive but also highlighted the need for additional work before scaling to more clinics.
Due to the deferral of future cash flows from the Biim probe, we have reassessed and recognized an
impairment of goodwill related to Biim.
As part of our focus on execution and commercial growth, the Board decided to restructure the
management team which led to myself taking on the role as, and Johan Fagerli assumed the role of CFO.
We have since implemented several measures to right-size the organisation. Combined with increasing
commercial traction, these initiatives position us to build a financially robust company.
Looking ahead, 2025 will be the year we capitalise on our investments — in product innovation, a scalable
operational platform, and a global distribution network. We will continue to invest in product development
and organizational capabilities, without losing a firm grip on maintaining a “lean and mean”, cost-efficient
approach. We expect these efforts to result in positive operational cash flow by Q4 2025.
* Based on sales statistics from Convatec, adjusted for today's currency and market pricing
Jørgen Mann
CEO
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
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T R U L Y
T R A N S F O R M A T I V E
YEA R S
2019
Listed on Oslo
Stock Exchange
Spin-off from
Norwegian listed
pharmaceutical
company, Navamedic
ASA in November
2019
2020-2021
Focus on
launching Sippi®
in selected
markets
• Nordic
distribution and
direct sales
• Covid-19
Acquisition of Biim
Ultrasound
• First major delivery of Biim
products to Fresenius
Medical Care
• Regulatory upgrade of
Sippi® to MDR
• Covid-19
Exclusive agreement to
acquire UnoMeter™
product range
Regulatory integration and
Commercial launch of
Unometer™ 500 and Abdo-
Pressure™
• Contract with 3rd party
manufacturing partner
• Asset transfer
Agreement with
Convatec signed
2024
2022
Regulatory integration
and Commercial
Launch of UnoMeter™
Safeti™ Plus
• Sales of UnoMeter™
products to 35+
countries
• November: Launch of
UnoMeter™ Safeti™
Plus
2025
Market Penetration with
complete Convatec
portfolio
• First UnoMeter
TM
Safeti
TM
Plus products arriving in
January – invoicing
accelerating
• Product evaluations
across many countries
• Positive evaluation reports
and repeat orders
• Organsational rightsizing
2023
BOARD OF
DIRECTOR’S
REPORT
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
9
I N T R O D U C T I O N
Observe Medical (the Group) is a medtech
group developing and commercializing medical
technology products on a global market through
a global distributor and partner’s network. The
Group aims to add value to the benefit of
patients, healthcare professionals and hospitals
through improved patient welfare, health
economics and data accuracy. Observe
Medical ASA is the parent company of its wholly
owned subsidiaries, Observe Medical AB,
Observe Medical ApS, Observe Medical Nordic
AB, Observe Medical AS and Biim Ultrasound
AS. Biim Ultrasound Oy and Biim Ultrasound Inc
are fully owned subsidiaries of Biim Ultrasound
AS.
With headquarters in Oslo, Norway, Observe
Medical is building a portfolio of medtech
products through M&A as well as organic
growth.
Sippi® is a CE marked system for urine
measurement, which offers a unique, effective,
and innovative solution for automated and
connected urine monitoring and infection
management at the hospital intensive care units
(ICUs), wards and home care. The system
incorporates SippSense® and SippCoat®,
technologies that alert for and hinder biofilm
formation, which can lead to urinary infections.
In 2023, the Group acquired the trademarks
and other intellectual property rights of the
UnoMeter™ portfolio from Convatec Group Plc.
The portfolio consists of products such as
UnoMeter™ Safeti™ Plus, UnoMeter™ 500 and
UnoMeter™ Abdo-Pressure™, which are
market leading products within routine or post-
operative drainage, collection and
measurement of urine output from patients.
In 2024, the Board appointed Jørgen Mann as
the CEO of Obsere Medical to lead the
company through this next phase of focused
growth and scaling of the business. Throughout
the year, the development and regulatory
journey of UnoMeter™ Safeti™ Plus has been
the main focus, as the historically largest and
most profitable product in the portfolio.
The Company has as at the end of the year,
presence of the UnoMeter™ product family in
35 countries.
The Company transferred certain customer
contracts and inventory from its Nordic
distribution portfolio to Vingmed in 2024 as part
of a strategic restructuring initiative. This
strategic divestiture aligns with Observe
Medical's broader objective to streamline our
operations and concentrate on expanding our
international market presence, thereby
enhancing shareholder value and strengthening
our competitive position in the global market.
This pivotal year has laid a strong foundation for
2025 and beyond, as we strive to reclaim
UnoMeter™’s market leadership with the launch
of UnoMeter™ Safeti™ Plus and to further
solidify our position as a global leader in urine
output measurement through continued
innovation through infection control and
digitalization.
In March 2022, the Group acquired Biim
Ultrasound AS (Biim or Biim Ultrasound), which
has developed and commercialized a wireless
pocketable ultrasound device approved by the
Food and Drug Administration (FDA). Observe
Medical has an agreement with Fresenius
Medical Care with an aim to fully roll-out of the
Biim ultrasound probe in their approximately
2,700 dialysis clinics in the US. Until now a total
of 285 ultrasound probes has been delivered to
Fresenius’ dialyses clinics. The investment
decision process has been a more time-
consuming process than anticipated.
As of 31 December 2024, a three-month pilot
project with Biim was conducted in selected
clinics, including staff retraining and re-
engagement with physicians. Despite the
benefits of the technology, Fresenius are not
ready to scale up the use to all clinics but will
continue to assess the utilization of Biim
machines across their clinics over the next 6
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
10
months to monitor the engagement with the
device.
As the Company has limited resources,
following a new path with alternative partners to
commercialize the Biim probe with different
customers lays some time ahead. Further
deferral of the estimated future cash flows was
therefore necessary. This new information has
prompted management to review the current
estimates for the Ultrasound CGU. Revenue
recognition has been deferred in line with
feedback from Fresenius and lead time. Given
the limited internal resources, the company will
not actively pursue new customers within this
business segment at this time. In sum, the
estimate changes indicated the need for
impairment.
As a result of the impairment test, the Group has
as per 31 December 2023, recognized an
impairment loss of NOK 67.1 million in the
Ultrasound CGU.
F I N A N C I A L
R E V I E W
The 2023 comparable figures have been
restated following the Financial Supervisory
Authority's review. For further details, please
refer to Note 2 in the consolidated financial
statements.
C O M M E N T S O N T H E G R O U P ’ S
R E S U L T S
The Group’s consolidated revenues in 2024
totalled NOK 17.2 million (NOK 27.9 million).
The decrease is primarily driven by the transfer
of agreements in the Nordic distribution
business and other business activities (NOK -
12.7 million), partly offset by UnoMeter™ sales
of NOK 11.5 million, reflecting an increase of
NOK 3.2 million / +39% year-over-year. Other
income of 1.2 million originating from an
adjustment settlement related to the Biim
acquisition (ISA).
The Group recorded a gross profit of NOK 3.1
million, NOK -6.2 million lower than last year,
driven by inventory write-down of NOK 3.1
million. Increased gross profit from higher
volume of UnoMeter™ partly offset by product
mix with lower margin.
Normalized for write-down, the urine
measurement category had a gross profit of
NOK 3.7 million / 32.2%. Nordic distribution had
a gross profit of NOK 1.1 million / 19.4% excl.
write-down.
The Group had operating expenses of NOK
33.1 million, a decrease of NOK 19.1 million /
36.7% year-over-year, mainly driven by the
reduction of employees in second half of 2023
and first half of 2024. The Group initiated in
second half of 2023 several cost reduction
activities where downsizing of the workforce
was one of the necessary measures.
The average number of FTE in 2024 was 6.6,
compared to 16 last year. The Company is
committed to optimizing costs and has
consolidated operations by closing offices in
Narvik, Seattle, and Oulu during the first half of
2024, centralizing key functions in Gothenburg.
To enable scaling and sustainable growth, the
Group plans to rebuild a lean organization
gradually.
The Group’s EBITDA amounted to negative
NOK 30.0 million compared to negative NOK
42.9 million in the same period last year.
EBITDA adjusted for write-down was in 2024
negative NOK 26.9 million.
Depreciation, amortization and impairment
were NOK 17.0 million compared to NOK 81.3
million in 2023. Whereof impairment of goodwill
was in NOK 2.7 million in 2024 and 67.1 million
in 2023. Please refer to note 17 in the
explanatory notes to the consolidated financial
statements for details.
Net financial items was negative NOK 11.7
million compared to negative NOK 10.9 million
in the same period in 2023. The increase is
mainly driven by transactions with no cash
effects as calculated interests on the
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
11
discounted seller credit for the UnoMeter™
portfolio acquired in 2023, change in contingent
consideration and currency.
The result for the year was negative NOK 58.7
million compared to negative NOK 135.1 million
in the same period last year.
Earnings per share was negative NOK 0.26
compared to negative NOK 2.34 in 2023.
F I N A N C I A L P O S I T I O N A N D
C A S H F L O W
Net cash flow from operating activities was for
the year 2024 negative NOK 27.4 million,
compared to negative NOK 24.5 million in the
year of 2023.
Net cash flow from investing activities was
negative NOK 1.0 million, compared to negative
NOK 7.6 million in the year 2023. Cash flow
from investment activities consisting of capital
expenditures related to development of
UnoMeter™ Safeti™ Plus, partly offset by sale of
a company car.
Net cash flow from financing activities was 16.8
million compared to NOK 31.7 million in the
year 2023.
The Group has carried out impairment tests to
test the value of goodwill and intangible assets
identifying the need for impairment of booked
values of the CGU Ultrasound. The carrying
amount of the Group’s assets decreased by
NOK 31 million, to NOK 142.6 million. The
decrease is mainly related to change in cash,
impairment of intangible assets of NOK 2.7
million, depreciation of intangible assets and
write-down of inventory of NOK 3.1 million.
Non-current assets of NOK 130.9 million mainly
consisting of goodwill NOK 33.1 million (NOK
35.2 million at 31 December 2023) and
intangible assets associated with the
technologies and patents for the Sippi® system
and the Biim ultrasound probe, as well as the
trademark and other assets related to
UnoMeter™ of NOK 97.7 million (NOK 109.2
million at 31 December 2023).
1
The seller credit was in 2023 not classified as interest-
bearing debt
As of 31 December 2024, the Group had bank
deposits of NOK 2.0 million, at 31 December
2023 the bank deposits were NOK 13.7 million.
The Group’s equity was NOK 21.1 million
compared to 40.9 million at the end of 2023
(restated). The equity ratio was 14.8%
compared to 26.6% last year. The change is
mainly related to the negative result, currency
effects and expenses related to share capital
increase.
As of the end of 2024, the Group had interest
bearing debt, current and non-current, at NOK
81.4 million, compared to NOK 55.4 million at
31 December 2023
1
. Total liabilities amounted
to NOK 121.5 million, a reduction from NOK
132.7 million at 31 December 2023.
In July 2024, the Group completed a private
placement of a gross amount of NOK 22.0
million. 55,000,000 shares were allocated. In
December 2024, the Group completed a
subsequent offer raising gross NOK 0.9 million.
2,303,933 shares were subscribed for. In
December 2024, Navamedic ASA converted
NOK 16.4 million of the convertible loan to
40,887,038 new shares in the Company.
The Group's principal source of liquidity will be
net cash flows generated from sales in addition
to cash generated from financing, including
both equity and debt. Consequently, any
shortfall of cash generated from operations will
have to be covered through additional
financing. See further details under sections
“Financial Risk” and “Going concern”. The
Group has ongoing talks with potential financial
providers and investors to support further
operations and growth with equity and debt
funding, in addition to working with alternatives
to reduce funding need. There is a risk that
adequate sources of funds may not be available,
or available at acceptable terms and conditions,
when needed. Therefore, there is a material
uncertainty with regards to the going concern
assumption. In case of a situation where
adequate sources of funds may not be available,
the value of assets can be lower than presented
in the financial statements. However, this is not
reflected in the valuation of the assets, as the
annual accounts are based on the assumption
of going concern.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
12
S H A R E H O L D E R I N F O R M A T I O N
As of April 10, 2025, Observe Medical ASA had 1,878 shareholders and a total of 19 258 412 shares
with a par value of 2.90. The 20 largest shareholders control 71.54 percent of total shares outstanding.
Rank
Shareholder
Number of shares
% of top
20
Ownership %
Country
1
NAVAMEDIC ASA
3 007 317
21.83 %
15.62 %
Norway
2
R INVESTMENT COMPANY AS
2 103 571
15.27 %
10.92 %
Norway
3
JPB AS
1 170 996
8.50 %
6.08 %
Norway
4
ELI AS
884 219
6.42 %
4.59 %
Norway
5
SKØYEN INVEST AS
671 610
4.88 %
3.49 %
Norway
6
GINNY INVEST AS
616 666
4.48 %
3.20 %
Norway
7
F2 FUNDS AS
600 000
4.36 %
3.12 %
Norway
8
BJØRNTVEDT
543 633
3.95 %
2.82 %
Norway
9
RO, LARS
498 370
3.62 %
2.59 %
Norway
10
SILVERCOIN INDUSTRIES AS
468 864
3.40 %
2.43 %
Norway
11
CAM AS
442 210
3.21 %
2.30 %
Norway
12
PHILIP HOLDING AS
429 071
3.11 %
2.23 %
Norway
13
KING KONG INVEST AS
366 666
2.66 %
1.90 %
Norway
14
QUICK ISLAND INVEST AS
333 333
2.42 %
1.73 %
Norway
15
JOHANSSON, ERIC
314 355
2.28 %
1.63 %
Norway
16
WANGESTAD
302 584
2.20 %
1.57 %
Norway
17
LIVERMORE INVEST AS
273 666
1.99 %
1.42 %
Norway
18
ALPINE CAPITAL AS
269 216
1.95 %
1.40 %
Norway
19
GUNERIUS PETTERSEN AS
248 333
1.80 %
1.29 %
Norway
20
LAPAS AS
231 220
1.68 %
1.20 %
Norway
Other
5 481 614
28.46 %
Total number owned by top 20
13 775 900
100.00 %
71.54 %
Total number of shares
19 258 412
100.00 %
R I S K
F A C T O R S
Effective risk management remains a priority for
the Board of Directors in supporting long-term
value creation. The Group faces risks both of
operational and financial nature. A summary of
the main risks follows below and is further
described in Note 5 in the consolidated financial
statements 2024 and comprehensively
described in the prospectus published on 19
November 2024 and can be viewed here;
https://observemedical.com/prospectus-
check/.
F I N A N C I A L R I S K
The Group faces a risk regarding its ability to
continue as a going concern and requires
additional capital to sustain operations at the
planned scale. Despite raising NOK 22.9 million
in gross proceeds, further funding is necessary
to support product development, production,
and sales. The Company does not have
sufficient working capital for the next 12
months, and there is material uncertainty
regarding its ongoing funding.
The Group’s financial obligations have
significantly increased, particularly due to the
Convatec Asset Transfer Agreement, with
upcoming payments totaling USD 3.9 million by
September 2026. Additionally, it has NOK 38.3
million in subordinated loans from Navamedic,
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
13
due in December 2027. The agreement allows
conversion of part of the debt to equity. NOK
16.4 million of the loan was successfully
converted to share capital in December 2024.
Further financing options, including new loans,
investors, or supplier credit extensions, are
being explored.
If the required capital is not secured, the
Company may struggle to meet liabilities in
2025.
Even if short-term funding is secured, the Group
faces liquidity challenges due to its early
commercialization phase. Revenue growth,
particularly from the UnoMeter™ Portfolio, is
critical, but uncertainty remains. Fresenius,
Biim’s only customer, is evaluating further
investment in its ultrasound probe, and an
unfavorable outcome could lead to Biim’s
bankruptcy, negatively impacting the Group’s
equity.
The Group’s high debt level could restrict
financial flexibility, increase borrowing costs,
and limit growth opportunities. If it fails to
generate sufficient revenue or secure financing
on favorable terms, its ability to meet obligations
and continue operations is at risk, potentially
leading to bankruptcy.
M A R K E T R I S K
Observe Medical operates in the medical
technology market and faces common industry
risks, including competition from new products
with better features or market penetration.
Increased competition may also reduce pricing
potential.
After Convatec/Unomedical exited the urimeter
market in 2022, new and existing competitors
have introduced alternative products to fill the
gap. Competing products may launch before
Observe Medical secures a viable market
share, increasing price pressure and slowing
market entry.
O P E R A T I O N A L R I S K
The Group relies on distributors for international
sales and is dependent on their performance.
Distributor failures or production issues could
delay commercialization and impact product
quality.
Protecting intellectual property is crucial to the
Group’s success. Failure to do so, or
infringement by third parties, could harm its
brand value and business.
Global instability, including ongoing conflicts, is
disrupting raw material supply, logistics, and
financial markets, driving inflation. The
company is vulnerable of fluctuating freight cost
from China.
Management regularly evaluates cash flow
projections, considering revenue, expenses,
capital expenditures, and loan repayments.
Failure to meet financial targets may impact
liquidity, especially as the UnoMeter™ portfolio
is still ramping up. If the Group does not achieve
projected market share or pricing, revenue
shortfalls could hinder its ability to meet
obligations. If it cannot meet contractual
obligations for UnoMeter™ purchases from
Convatec, sales under the UnoMeter™ brand
may be suspended.
Ensuring compliance with applicable laws and
regulations is a key priority for Observe
Medical. Non-compliance can result in financial
penalties, operational disruptions, and
reputational damage.
Observe Medical is conscious of the increased
risk exposure that can arise from operating with
limited resources and current liquidity
constraints. The Company acknowledges that
such conditions may impact operational
flexibility and the ability to respond swiftly to
unforeseen challenges. As a result, risk
management remains a key area of focus for
both management and the Board of Directors.
Ongoing efforts are being made to prioritize
resources, strengthen financial discipline, and
ensure robust internal controls.
Research and development expenditures being
managed across the product portfolio in
accordance with our strategic priorities.
Investment decisions about whether to proceed
with development projects is done on a project-
by-project basis. Limited financial resources
may delay planned developments, hence risk of
delayed launch of UnoMeter™ Safeti™ Max and
Sippi® resulting in lower revenues in the short
term.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
14
C O R P O R A T E
S O C I A L
R E S P O N -
S I B I L I T Y
Corporate social responsibility (CSR) means to
run the business in a responsible and
sustainable manner over time and in a way that
contributes to a positive, trust-based
relationship between the Group, the Group’s
stakeholders, and society as a whole.
The Transparency Act shall promote
companies' respect for basic human rights and
decent working conditions, and ensure the
public's access to information. The Act
imposes, among other things, a duty for
Observe Medical to inform and carry out due
diligence assessments which must be
explained and made public. Observe Medical
has established routines and Code of Conduct
that covers such due diligences on suppliers
and business relationships as part of our Quality
Management System. This work is led by the
QA/RA department and is based on a risk based
approach. The obligation to provide information
came into effect from 1 July 2022.
The Company is small and operates with limited
resources, but our commitment to the values of
transparency, responsibility, and respect for
human rights makes the Norwegian
Transparency Act a natural focus area for us.
This legislation supports our ambition to
operate ethically by helping us identify and
reduce risks related to labor conditions and
human rights across our supply chain.
By embedding these principles into our
business practices, we aim to build trust with
customers, investors, and partners — not just
as a matter of compliance, but because it
reflects who we are and how we want to grow.
This approach also supports our long-term goal
of contributing to a more sustainable and
responsible business environment.
In line with this commitment, the Company will
publish its due diligence report by June 30,
2025.
For further information about corporate social
responsibility, see the Sustainability report as
part of this Annual Report.
O R G A N I S A T I O N
The Group had 5 employees at the end of 2024,
At the end of the year 2 employees are
employed in Sweden, 2 in Norway and 1 in
Denmark.
At February 29, 2024 Jørgen Mann was
appointed CEO as Rune Nystad stepped down
as CEO and into the role as Chief Development
Officer (CDO). At March 21, 2024 CFO Per
Arne Nygård left the company and Johan M.
Fagerli was appointed CFO.
Due to the Group’s financial situation, the Group
has taken necessary steps to reduce costs.
In accordance with the Public Limited
Companies Act, the board has prepared a
statement of salary and other remuneration to
senior executive employees, as well as included
the information in Note 9.
W O R K E N V I R O N M E N T ,
G E N D E R E Q U A L I T Y A N D
D I S C R I M I N A T I O N
The working environment is generally
satisfactory but have naturally been impacted
by the Group’s downsizing to reduce costs, and
employees working remote. The Group works
continuously to protect and improve health and
safety. Observe Medical is committed to being
a responsible employer who does not
discriminate and who considers all employees
equal in terms of career opportunities and
rights, regardless of gender, ethnicity, ability to
function, religion, sexual orientation, or other
similar characteristics of a person. The Group
follows the Norwegian Equality and Anti-
discrimination Act, which aims to promote
gender equality and prevent discrimination.
The Group has a zero-tolerance for
discrimination and employees are encouraged
to report discriminating practices or other
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
15
concerns regarding the working environment to
the nearest line manager or to the CEO.
The Group's leadership consisted of three
members end of 2024, three men. The
Company focuses on gender equality and
diversity in the organization and will work to
ensure that this is also reflected in the
management team in the future. In total, there
were five employees in the Group at December
31, 2024, one woman and four men. At
December 31 2023, there was twelve
employees in the Group, three women and nine
men.
The Group aims to strengthen the competence
of its employees to maintain a position as an
attractive employer and an innovative and
trusted supplier of medical technology products
to the benefit of patients, healthcare
professionals and hospitals. Through
recruitment, the company seeks to employ
people with high competence within all areas of
its business.
Of the four members of the Board of Directors
are two women and two men.
The Group had no serious incidents with
personal injury or absence in 2024. Neither was
any damage to property nor equipment
reported.
T H E D I R E C T O R S ’ A N D
M A N A G E M E N T L I A B I L I T Y
I N S U R A N C E
The Company has established a Board of
Directors and management insurance that
covers members of the board, committees and
the Company’s management. The insurance
applies worldwide. The insurance covers the
Insured's liability for property damage due to
claims made against the insured during the
insurance period as a result of an alleged
liability-related act or omission.
P A R E N T
C O M P A N Y
Observe Medical ASA (the Company) is the
parent company of the Group, owning 100% of
the shares in its subsidiaries Observe Medical
ApS, Observe Medical AB, Observe Medical
Nordic AB, Observe Medical AS and Biim
Ultrasound AS.
The Company will support its subsidiaries with
financing, as well as some common functions
and services. The assets of the Company are
mainly related to shares in the subsidiaries.
In 2024, Observe Medical ASA had revenues of
NOK 2.7 million related to invoiced services and
expenses to subsidiaries and other income from
an indemnity settlement agreement related to
the Biim acquisition of NOK 1.2 million. The
Company had operating expenses of NOK 18.2
million which mainly consists of employee
benefit expenses of NOK 8.9 million and other
operating expenses of NOK 9.3 million.
Employee benefit expenses consist of salaries,
as well as fees to the Board of Directors and
Audit Committee, and share option expenses.
EBIT was in 2024 negative at NOK 14.6 million,
compared to negative NOK 19.1 million in 2023.
The company had net financial expenses of
NOK 179.6 million mainly consisting of write-
down of investments in subsidiaries, net interest
expenses of NOK 5.6 million, and a net income
of NOK 1.6 million related to changes in
valuation of the consideration on contingent
liabilities. In 2023, net financial items were
negative NOK 198.2 million. The effects of
correction of restated write-down of shares in
Biim Ultrasound AS was negative NOK 189
million per 31 December 2023. The result for
2024 was negative NOK 194.2 million,
compared to negative NOK 217.3 million in
2023 (restated).
A L L O C A T I O N O F R E S U L T F O R
T H E Y E A R 2 0 2 3
The Board of Directors proposes that the loss
for the year should be covered by a transfer to
uncovered losses.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
16
S U B S E Q U E N T E V E N T S
The extraordinary general meeting was held on
January 7 2025, and resolved, amongst other,
to adopt a consolidation of the Company's
shares (reverse share split) in the ratio 15:1 to
meet the Oslo Stock Exchange's requirement of
a minimum market value of NOK 1 per share. To
facilitate the share consolidation, the general
meeting resolved to increase the Company's
share capital by NOK 1.30 through the issue of
5 new shares, each with a nominal value of NOK
0.26, in order to obtain a total number of shares
divisible by 15. The proposals regarding (i) an
general authorisation to the board of directors
to increase the share capital in connection with
financing further growth and (ii) a authorisation
to the board of directors to increase the share
capital in connection with sett-off/contributions
of loans and accounts payable etc., were also
approved. The new number of outstanding
shares is 19 258 412.
At February 5, board member Kathrine
Gamborg Andreassen informed the board of
directors that she will resign from the
Company's board of directors, effective 5
February 2025, in order to focus on her
responsibilities as CEO of Navamedic ASA.
10
th
of April 2025, Observe Medical announced
that the Group has reached agreements in
principle with Convatec and Navamedic to
reduce their debt position from in total NOK 82
million to NOK 41 million, with an adjusted
payment plan for the remaining debt. Such debt
reduction is conditional upon injection of new
equity in the minimum amount of NOK 25
million and two milestone payments to
Navamedic of NOK 10 million each, after Sippi’s
accumulated sales value reaches NOK 20
million and NOK 50 million.
The Company has also been in constructive
dialogue with existing shareholders and new
investors who have indicated a willingness to
contribute equity in an amount of NOK 25
million, subject to debt reductions being
agreed. The agreements in principle with
Convatec and Navamedic will partially cover the
requirements from such investors. Similar
negotiations with smaller unsecured creditors
has also been initiated, and there is material
uncertainty regarding the going concern
assumption until sufficient capital injection is
secured.
Subsequent to the reporting period, the trade
tensions and tariff measures between the US
and certain countries have continued to evolve.
These developments could potentially affect the
company’s supply chain, cost structure, and
market access. The company is actively
monitoring the situation and assessing its
impact on operations.
O U T L O O K
Over the past few years, Observe Medical has
undergone a significant transformation. What
once was mostly a product development
company with a small distribution business in
Sweden has now evolved into a commercial
player with international distribution and its own
production platforms.
2024 was in many ways a transition year
towards the launch of UnoMeter™ Safeti™ Plus,
the most revenue- and profit-generating
product in the Convatec portfolio. Significant
efforts were dedicated to establishing a new
manufacturing platform and successfully
completing the regulatory journey, resulting in
Observe Medical becoming the legal
manufacturer of UnoMeter™ Safeti™ Plus.
These milestones position the company for
growth and operational expansion in the
coming years through its scalable platform.
Observe Medical's long-term ambition is to
become a leading global medtech company by
delivering innovative medical technology
solutions that enhance patient care, improve
clinical outcomes, and support positive health
economics. Growth will be driven through the
development, commercialization, and global
distribution of its proprietary products, while
also exploring strategic opportunities such as
mergers, acquisitions, and partnerships to
expand its market presence and product
portfolio.
U R I N E M E A S U R E M E N T
Observe Medical's strategy behind the
UnoMeter™ acquisition is to reclaim market
leadership in the urine measurement segment,
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
17
particularly with the UnoMeter™ 500 and
UnoMeter™ Safeti™ Plus. Prior to Convatec
discontinuing the business, these brands
commanded a strong market share of
approximately 50-60% in Europe's urine
measurement segment, distributed through
partners in more than 50 countries globally. The
by far strongest product in the portfolio,
UnoMeter™ Safeti™ Plus was regulatory
approved in November 2024, and the Group
received orders for NOK 5 million within the first
month. The first shipments to distributors in
Europe, Middle East and Asia for validation in
January 2025. At 10
th
of April, the Group
announced that it had received orders for NOK
10.3 million from 24 countries, representing
83% of the geographical coverage of the 2021
Convatec sales.
Once the brand has regained a foothold in the
market, Observe Medical plans to introduce
innovative products, such as an improved
version of UnoMeter™ Safeti™ Plus featuring
the patented infection control technology
Sippcoat®, and re-launch our proprietary
digital urimeter, Sippi® through the global
distribution network.
The Company follows market developments
closely and will continuously assess
opportunities and risks that any changes in
market conditions may entail.
B I I M U L T R A S O U N D P R O B E
During the second half of 2024, Fresenius
Medical Care, under new management, carried
out a new evaluation of the value creation by
using Biim ultrasound in their US based clinics.
Early findings indicated positive value in using
ultrasound but also that the business case was
not yet robust enough to scale the use across
further clinics and the further evaluations would
continue approximately 6 months into 2025.
Based on further deferred future cash flows
from the Biim probe, which have not
materialized as projected, the result of
Management’s impairment assessments has
resulted in a write down of goodwill related to
Biim. We are looking forward to continuing our
discussions with Fresenius Medical Care during
2025 about our FDA-approved pocketable
ultrasound probe, but at the moment Biim is not
a priority due to limited resources.
D I S T R I B U T I O N P L A T F O R M
Throughout 2024, the Company has
undertaken a strategic restructuring of its
Nordic sales operations, transitioning customer
contracts to the Nordic distributor, Vingmed.
The Nordic portfolio was originally established
as a platform for testing and launching the
Company’s own branded products, and its
strategic relevance has been reassessed in light
of the expansion of our global distribution
capabilities. With these enhanced global
channels now effectively supporting our testing
and pre-launch needs, direct Nordic sales
operations have become less central to our
core business model. Consequently, the Group
initiated a process to transition these operations
to more suitable ownership. The restructuring
was not fully completed as of 31 December
2024, but will be finalized in the beginning of
2025.
However, the company is still constantly
working to expand its product portfolio with
high-quality products that can be distributed
through our growing distribution network
globally. An example of this is the letter of intent
for female catheterization product with
Sulacare.
The Group’s ambition is to be a Nordic medtech
platform for scalable and profitable growth,
product development, regulatory performance
and effective manufacturing. Value creating
M&A and corporate development remains an
important part of Observe Medical's strategy.
G O I N G C O N C E R N A S S U M P T I O N
The Group has prepared the financial statements on the basis that it will continue to operate as a going
concern. Based on current forecasts and working plans, the Group’s working capital is not sufficient to
fund operations and payment of financial obligations for the next 12 months from 31 December 2024.
Going forward, the Group will need to raise more equity, issue debt instruments or divest assets to fund
further development of ongoing business.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
18
The Board is currently engaging with a group of existing and new investors who have indicated a
conditional willingness to provide new liquidity of NOK 25 million. The key condition to these indications
is a substantial reduction in the Company’s existing debt, particularly obligations owed to Convatec and
Navamedic. Accordingly, the Company is in ongoing discussions with creditors and stakeholders to
evaluate a potential transaction structure. In addition, several engagements have been initiated with
leading investment banks to advise on and facilitate a capital raise within a short time frame.
The Board remains committed to identifying a viable financial solution to ensure the Company's long-
term viability. However, there is a significant risk that such efforts may not succeed. The potential capital
raise could enable both financial stabilization and substantial debt restructuring, but continued dialogue
with key stakeholders is necessary to determine whether a sustainable path forward can be achieved.
Consequently, a material uncertainty remains regarding the Company’s ability to continue as a going
concern.
C O R P O R A T E
G O V E R N A N C E
Observe Medical ASA considers good
corporate governance to be a prerequisite for
value creation and trustworthiness, and for
access to capital. In order to secure strong and
sustainable corporate governance, it is
important that Observe Medical ASA ensures
good and healthy business practices, reliable
financial reporting and an environment of
compliance with legislation and regulations
across the Group.
Observe Medical ASA has governance
documents setting out principles for how its
business should be conducted. These apply to
all group entities. References to certain more
specific policies are included in this corporate
governance policy.
Observe Medical is subject to annual corporate
governance reporting requirements under
section 3-3b of the Norwegian Accounting Act
and the Norwegian Code of Practice for
Corporate Governance, cf. section 4.4 on the
continuing obligations for issuers of shares
pursuant to Oslo Rule Book II – Issuer Rules.
The Accounting Act may be found (in
Norwegian) at www.lovdata.no. The Norwegian
Code of Practice for Corporate Governance,
which was last revised on October 14, 2021,
may be found at www.nues.no (the “Corporate
Governance Code”). The annual statement on
corporate governance for 2022 was approved
by the board of directors on April 27, 2023 and
follows below.
I M P L E M E N T A T I O N A N D
R E P O R T I N G O N C O R P O R A T E
G O V E R N A N C E
The board of directors is committed to build a
sound and trust-based relationship between
Observe Medical ASA and the company’s
shareholders, the capital market participants,
and other stakeholders. The Group’s overall
principles for corporate governance is
approved by the board of directors and can be
found at www.observemedical.com/investor-
relations/. The Group complies with the
Corporate Governance Code. The board of
directors’ annual statement on how Observe
Medical has implemented the Corporate
Governance Code is set out below. The
presentation covers each section of the
Corporate Governance Code, and deviations
from the code, if any, are specified under the
relevant section.
B U S I N E S S
The operations of the company and its
subsidiaries shall be conducted in a sustainable
manner and in compliance with the business
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
19
objective set forth in Observe Medical ASA’s
articles of association, which shall be stated in
the company’s annual report together with the
Group’s primary objectives and strategies. The
Group’s objectives, strategies and risk profiles
are evaluated annually by the board of directors.
The company’s business objective reads as
follows: “The company’s objective is to develop,
produce, market and sell medical technical
equipment and related products, provide
connected consulting services and invest in
related business.”
E Q U I T Y A N D D I V I D E N D S
The board of directors is responsible for
ensuring that the group is adequately
capitalized relative to the risk and scope of
operations and that the capital requirements set
forth in laws and regulations are met.
The company shall have an equity capital at a
level appropriate to its objectives, strategy and
risk profile. The board of directors shall
continuously monitor the Group’s capital
situation and shall immediately take adequate
steps if the company’s equity or liquidity is less
than adequate. As of December 31, 2024, the
Group had a consolidated equity of NOK 21.1
million, corresponding to an equity ratio of
14.8%.
The Group is focusing on the development and
commercialization of medical technology
products, and the company does not anticipate
paying any cash dividend until sustainable
profitability is achieved.
A U T H O R I Z A T I O N S T O T H E
B O A R D O F D I R E C T O R S
Any authorization granted to the board of
directors to increase the company’s share
capital or to purchase treasury shares shall be
restricted to defined purposes. When the
general meeting is to pass resolutions on such
authorizations to the board of directors for
different purposes, each authorization shall be
considered and resolved separately by the
general meeting. Authorizations granted to the
board of directors to increase the share capital
or purchase treasury shares shall be limited in
time and shall in no event last longer than two
years. However, it is recommended that an
authorization to increase the share capital or
purchase of treasury shares does not last longer
than until the company’s next annual general
meeting.
The Extraordinary General Meeting held on July
17, 2024 authorized the board of directors
pursuant to section 10-14 of the Public Limited
Liability Companies Act to increase the
company’s share capital by up to NOK
26 610 000 in one or more share issues,
replacing the authorization from the Annual
General Meeting held on May 24, 2024.
As of December 31, 2024 the Company had
2 500 000 options issued and outstanding,
which includes the options granted to the
Company’s CEO in August 2024 and options
granted to the Company’s CFO in December
2024.
E Q U A L T R E A T M E N T O F
S H A R E H O L D E R S A N D
T R A N S A C T I O N S W I T H
R E L A T E D P A R T I E S
The company has only one class of shares.
Each share in the company carries one vote,
and all shares carry equal rights, including the
right to participate in general meetings. All
shareholders shall be treated on an equal basis,
unless there is just cause for treating them
differently. In the event of an increase in share
capital through the issuance of new shares, a
decision to deviate from existing shareholders’
pre-emptive rights to subscribe for shares shall
be justified. Where the board of directors
resolves to issue shares and deviate from the
pre-emptive rights of existing shareholders
pursuant to an authorization granted to the
board of directors by the general meeting, the
justification will be publicly disclosed in a stock
exchange announcement issued in connection
with the share issuance.
Any transactions in treasury shares carried out
by the company shall be carried out on the
exchange where the company’s shares are
listed, and in any case at the prevailing stock
exchange price. In the event that there is limited
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
20
liquidity in the company’s shares, the company
will consider other ways to ensure equal
treatment of shareholders. Any transaction in
treasury shares by the company is subject to
applicable reporting requirements.
In the event of transactions that are considered
to be material between the company and its
shareholders, a shareholder’s parent company,
members of the board of directors, executive
management or close associates to any such
party, the board of directors shall arrange for an
independent third-party valuation. This will,
however, not apply for transactions that are
subject to the approval of the general meeting
pursuant to the provisions in the Norwegian
Public Limited Liability Companies Act.
Independent valuations shall also be procured
for transactions between companies within the
Group if any of the companies involved have
minority shareholders.
S H A R E S A N D N E G O T I A B I L I T Y
Each share in the company carries one vote.
The company’s shares are freely transferrable,
and the articles of association do not impose
any restriction on the transfer of shares. There
are no restrictions on owning, trading or voting
for shares in the Company other than as
described in mandatory law.
G E N E R A L M E E T I N G S
The board ensures that its shareholders can
attend and participate in the general meeting.
For shareholders who are not able to be present
at the general meeting, the company shall
facilitate electronic participation unless the
board of directors finds that it has reasonable
cause to refuse such electronic participation.
The annual general meeting shall take place
prior to 30 June each year. The Group’s
financial calendar is published via Oslo Børs
and in the investor relations section of the
Group’s website. The notice and supporting
information of the general meeting, will be
sufficiently detailed, comprehensive and
specific to allow shareholders to form a view on
all matters to be considered at the meeting. The
notice will be published and sent to the
company's shareholders with a known address
no later than 21 days prior to the meeting to
ensure that all shareholders may form a view on
all matters to be considered at the meeting. The
annual general meeting shall consider the
following matters:
1. Approval of the annual accounts and
annual report, including any proposal
from the board regarding dividends or
other distributions.
2. Other matters which are pursuant to
law or the articles of association shall
be considered by the general meeting.
The board of directors may decide that
shareholders who want to participate in the
general meeting must notify the company
thereof within a specific deadline that cannot
expire earlier than three days prior to the
general meeting.
The shareholders may cast their votes in
writing, including through electronic
communication, in a period prior to the general
meeting. The board of directors may establish
specific guidelines for such advance voting. It
must be stated in the notice of the general
meeting which guidelines have been set.
Documents concerning matters to be
considered at the general meeting may be
made available on the company’s website. This
is also applicable for documents that by law
shall be included in or attached to the notice. In
case documents are made available in such
manner, the statutory requirements for
distribution to shareholders shall not be
applicable. A shareholder still has the right to
receive documents concerning matters to be
considered at the general meeting upon
request.
General meetings have to date been and is
currently planned to be chaired by the
chairperson of the board. The chairperson of
the board and chief executive officer are
required to attend the general meeting. The
chairperson of the nomination committee is
encouraged to attend those general meetings
where the election and remuneration of
directors and members of the nomination
committee are to be considered. The
company’s auditor is not physically present at
the Annual General Meeting, but is available by
phone or video conference to answer
questions. Shareholders are able to vote on
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
21
each individual matter on the agenda for the
general meeting, including on each individual
candidate nominated for election. Shareholders
who cannot attend the meeting in person are
given the opportunity to vote through advanced
electronical voting and through proxy. The
company prepares the proxy form in such way
that it enables shareholders to vote on each
individual matter and nominates the
chairperson of the board of directors to act as a
proxy for the shareholders. Minutes from
general meetings are published as soon as
practicable via the stock exchange’s reporting
system (www. newsweb.no, ticker code:
OBSRV) and in the investor relations section of
the Group’s website.
Deviations: The entire board of directors have
normally not participated at the general
meetings because the matters that have been
on the agenda have not previously required this,
however the chairperson of the board is always
present at general meetings to answer
questions from the shareholders on behalf of
the board of directors. The board of directors
finds this solution appropriate but will consider
this arrangement if requested by the
shareholders in future general meetings or if
deemed appropriate on a case-by-case basis.
N O M I N A T I O N C O M M I T T E E
The company has a nomination committee, and
the nomination committee is stipulated in the
company's articles of association. The general
meeting has resolved guidelines for the duties
of the nomination committee. The nomination
committee currently comprises two members,
as resolved by the general meeting, and all
members of the nomination committee are
independent of the board of directors and the
management. The nomination committee's
duties include nomination of candidates to the
board of directors and the nomination
committee, including the chairpersons. The
nomination committee also submits proposals
on board remuneration and remuneration to the
members of the nomination committee. The
term of the members of the nomination
committee shall be two years at a time unless
the general meeting decides otherwise in
connection with the election. The current
members of the nomination committee are Bård
Brath Ingerø (chair) and Grete Hogstad. No
directors or members of executive
management are represented in the nomination
committee.
B O A R D O F D I R E C T O R S -
C O M P O S I T I O N A N D
I N D E P E N D E N C E
Pursuant to the articles of association, the
board of directors may comprise three to seven
members. The board currently has five
shareholder-elected directors. The board
members and the chairperson of the board are
currently elected by the general meeting based
on a proposal from the nomination committee.
The composition of the board is intended to
secure the interests of the shareholders in
general, while the directors also collectively
possess a broad business and management
background as well as in-depth sector
understanding and expertise in investment,
financing and capital markets. Consideration is
also given to the board’s ability to make
independent judgements of the business in
general and of the individual matters presented
by the executive management.
Consideration has also been given to gender
representation and the independence of
directors from the company and its
management. The board of directors does not
include executive personnel. All shareholder-
elected directors are independent of the
Group’s executive management, the majority of
the board members are independent from the
company's significant business relations and at
least two of the members of the board are
independent of the company's main
shareholders. Details on background,
experience and independence of the board
members are presented on the Group’s
website. Twenty-five board meetings were held
in 2024. Each board member’s attendance at
board meetings is recorded by the company.
The shareholding of each board member can
be found in Note 24 to the consolidated financial
statements.
T H E W O R K O F T H E B O A R D O F
D I R E C T O R S
The board has the ultimate responsibility for the
management of the company and for
supervising its day-to-day management and
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
22
activities in general. This includes developing
the company’s strategy and monitoring its
implementation. In addition, the board exercises
supervision responsibilities to ensure that the
company manages its business and assets and
carries out risk management in a prudent and
satisfactory manner. The board is responsible
for the appointment of the CEO. The board has
an annual plan for its work.
In accordance with the provisions of Norwegian
company law, the terms of reference for the
board are set out in a formal mandate that
includes specific rules and guidelines on the
work of the Board and decision making,
including how the board of directors and
executive management shall handle
agreements with related parties. The
chairperson of the board is responsible for
ensuring that the work of the board is carried
out in an effective and proper manner in
accordance with legislation. The board issues a
mandate for the work of the CEO. There is a
clear division of responsibilities between the
board and the CEO. The CEO is responsible for
the operational management of the company.
The board holds regular meetings.
Extraordinary board meetings are held as and
when required, to consider matters that cannot
wait until the next regular meeting. In addition,
the board has appointed three sub-committees
composed of board members to work on
matters in these areas. The board has
established instructions for these committees.
The Company have established a Board of
Directors and management insurance that
covers members of the board, committees and
the Company’s management. The insurance
applies worldwide. The insurance covers the
Insured's liability for property damage due to
claims made against the insured during the
insurance period as a result of an alleged
liability-related act or omission.
Audit Committee
The audit committee is appointed by the board.
Its main responsibilities are to supervise the
company’s systems for internal control, to
ensure that the auditor is independent and that
the interim and annual accounts give a fair and
true representation of the company’s financial
results and financial condition in accordance
with generally accepted accounting principles.
The audit committee receives reports on the
work of the external auditor and the results of
the audit. Also, the audit committee meets
regularly and can have meetings with the
auditor where no member of the executive
management is present.
As per December 31, 2024 the audit committee
consisted of the following board members:
• Line Tønnessen, Chair
• Eskild Endrerud
Compensation Committee
The compensation committee makes proposals
to the board on the employment terms, as well
as conditions and total remuneration of the CEO
and other executive personnel.
As per December 31, 2024, the compensation
committee consisted of the following board
members:
• Terje Bakken
• Kathrine Gamborg Andreassen
Merger & Acquisitions (M&A) Committee
The M&A committee is appointed by the board.
Its main responsibility is to address M&A
opportunities as well as supervise and support
the management in such processes. The M&A
committee secures M&A activities to support
the Group’s strategy for further development
and growth of the Group. As per December 31,
2023, the M&A committee consisted of the
following board members:
• Eskild Endrerud
• Line Tønnessen
• Terje Bakken
R I S K M A N A G E M E N T A N D
I N T E R N A L C O N T R O L
The board ensures that the company has sound
risk management and an internal control system
that is appropriate to its activities. The risk
management and internal control systems in
Observe Medical are based on its corporate
values and principles for sustainability. The
board reviews the company’s internal control
system and the main areas of risk annually.
Observe Medical management conducts the
day-to-day follow-up of financial management
and reporting. Management reports to the audit
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
23
committee that conducts a review of the
quarterly and annual presentation and reports
before publication. The audit committee assess
the integrity of Observe Medical’s accounts. It
also inquiries into, on behalf of the board, and
assess issues related to financial review and
internal control, and the external audit of
Observe Medical’s accounts. The board
ensures that Observe Medical is capable of
producing reliable annual reports and that the
external auditor’s recommendations are given
thorough consideration. A description of the
company’s financial risk management
objectives and policies are included in Note 5 to
the financial accounts.
Financial Reporting
The Group has processes and routines for
internal control over financial reporting. The
main principles are transparency, segregation
of duties, analytical controls and systematic and
thorough management reviews. Management
prepares periodic reports on business and
operational developments to the board, which
are discussed at board meetings. These reports
are based on the results of the review process
and include the status of key performance
indicators, update of market developments,
operational issues, financial results and
highlights of organizational issues. Financial
position and results are followed up in monthly
accounting reports, compared to prior year,
budgets and forecasts. Reporting also includes
non-financial key performance indicators. In
addition, management prepares a forecast of
financial trends, showing profits and cash flow
development. The interim reports and annual
financial statements are reviewed by the audit
committee in advance of consideration and
discussion in the board.
In 2023, the Group faced challenges in
maintaining robust internal control over
financial reporting, partly due to personnel
changes and temporary layoffs, which were
identified as contributing factors during a review
by the Norwegian Financial Supervisory
Authority (NFSA). To strengthen internal
controls, the Group has initiated targeted
enhancements to its processes, including more
rigorous review procedures and increased
oversight by the board’s audit committee.
Financial risk management and internal control
are also addressed by the board’s audit
committee. The latter reviews the external
auditor’s findings and assessments after the
interim and annual financial audits. Significant
issues in the auditor’s report, if any, are also
reviewed by the entire board. The Group is
committed to further improving its internal
control framework by ensuring adequate
capacity and competence, including staff
training and recruitment where necessary, to
mitigate future risks.
R E M U N E R A T I O N O F T H E
B O A R D O F D I R E C T O R S
The remuneration to the board of directors are
determined by the general meeting following
proposals from the nomination committee. The
remuneration payable to the board of directors
is meant to reflect the board’s responsibility,
expertise, time commitment and the complexity
of the business. The remuneration to the board
of directors is not linked to the company's
performance and no directors have been
awarded share options or any other form of
incentive-based remuneration in their role as
directors. An overview of shares owned by the
directors and their close associates is included
in Note 24 to the consolidated financial
statement.
Members of the board of directors and/or
companies which they are associated with
should not take on specific assignments for the
company in addition to their appointment as a
member of the board. If they do nonetheless
take on such assignments this must be
disclosed to the board of directors and any
remuneration for such additional duties shall be
approved by the board.
R E M U N E R A T I O N O F
E X E C U T I V E P E R S O N N E L
The board has a remuneration committee. Its
main responsibilities are evaluation and advice
to the board of directors relating to
remuneration strategy, main principles and
systems for the total remuneration (including
bonus) to the CEO and other members of the
Group executive management. The annual
general meeting in 2022 approved guidelines
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
24
for determination of salary and other
remuneration to the executive personnel of the
company in accordance with the Public Limited
Liability Act section 6-16 a, cf. section 5-6 (3).
The guidelines are available at the company's
website. Performance-related remuneration of
the executive personnel in the form of share
options, bonus programs or similar
arrangements are linked to value creation for
shareholders or the Group's earnings
performance over time. Such arrangements,
including share option arrangements, are
implemented to incentivise performance and
are based on quantifiable factors over which the
employee in question can have influence. All
performance-based remuneration to the
Group's leading personnel is to be subject to an
absolute limit.
I N F O R M A T I O N A N D
C O M M U N I C A T I O N
The board has established guidelines for
investor communication. Observe Medical’s
communication with the capital markets is
based on the principles of transparency, full
disclosure and equality. The CEO and CFO are
responsible for the main dialogue with the
investor community, including the company’s
shareholders. Information to the stock market is
published in the form of annual and interim
reports, press releases, stock exchange
announcements and investor presentations. All
information considered relevant and significant
for valuing the company’s shares will be
distributed and published in English via Oslo
Børs disclosure system, www.newsweb.no, and
via the Group’s website
www.observemedical.com simultaneously.
All periodic financial reporting is published
according to the adopted guidelines for
companies listed on the Oslo Stock Exchange.
All published information is available via Oslo
Børs’ news site www.newsweb.no and Observe
Medicals’ website.
Observe Medical is committed to maintaining a
transparent and proactive dialogue with the
investor community. The company strives to
ensure that all financial and material information
is disclosed in a timely, consistent, and accurate
manner, supporting informed investment
decisions and building long-term trust. The
main purpose of this information presents a
complete picture of the Group’s financial results
and position as well as articulating the Group’s
long-term goals and potential, including its
strategy, value drivers and important risk
factors. The Group publishes a financial
calendar every year with an overview of the
dates of important events, including the general
meeting, publication of interim reports and
presentations. This calendar is made available
as a stock exchange announcement and on the
Group’s website as soon as it has been
approved by the board.
In contact with analysts and investors, the
Board of Directors and the management of the
Company shall only communicate already
published information.
T A K E O V E R S
In the event of a takeover bid being made for
the company, the board will follow the
overriding principle of equality treatment of all
shareholders and will seek to ensure that the
Group’s business activities are not disrupted
unnecessarily. The board will strive to ensure
that shareholders are given sufficient
information and time to form a view of the offer.
The board will not seek to prevent any takeover
bid unless it believes that the interests of the
Group and the shareholders justify such
actions. The board will not exercise mandates
or pass any resolutions with the intention of
obstructing any takeover bid unless this is
approved by the general meeting following the
announcement of the bid. If a takeover bid is
made, the board will issue a statement in
accordance with statutory requirements and the
recommendations in the Corporate
Governance Code. Any transaction that is in
effect a significant disposal of the Group’s
activities will be submitted to the general
meeting for its approval.
A U D I T O R
The company's external auditor, EY, annually
presents its overall plan for the audit of the
Group for the audit committee’s consideration.
The auditor attends Board meetings in
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
25
connection with the annual financial statements
and most audit committee meetings. At least
one meeting a year is held between the auditor
and the Board without the CEO nor other
member of the Company’s executive
management present. The board reports
annually to the annual general meeting on the
external auditor’s total fees and informs on the
split between audit and non-audit services. The
annual general meeting approves the auditor’s
fees for the company.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
26
B O A R D O F D I R E C T O R S
Terje Bakken | Chair of the Board
Terje Bakken is a partner in the Norwegian private equity
company Reiten & Co AS and has been the chairperson of the
Board of Directors of the Company since its incorporation. Mr.
Bakken has been with Reiten & Co AS since 1998 and has
extensive Private Equity/Active Ownership experience trough
leading and implementing various strategic and operational
value-based processes across different industries, combined
with a significant financial transaction and structured finance
experience. Mr. Bakken holds a Master of Science in Financial
Economics degree and Bachelor of Business and Administration
degree from the Norwegian School of Management. He
currently sits on the board of directors of the Company
(chairperson), Questback AS (board member) and Reiten & Co
AS (board member). Furthermore, he has previous board
experience from Navamedic (chairperson), Webstep ASA (board
member) and Grilstad AS (board member). Mr. Bakken is a
Norwegian citizen and resides in Oslo, Norway
Line Tønnessen | Board Member
Line Tønnessen, holds the position as
Investment Director in Reiten & Co AS, a wholly
owned subsidiary IRIC. She has a strong
analytical and corporate finance background.
Ms. Tønnessen currently sits on the board of
directors of Vow Green Metals AS and Grilstad
Holding AS and holds a Bachelor of Business
Administration from the BI Norwegian Business
School, an MBA in Finance from the Norwegian
School of Economics (NHH) and is a Certified
Financial Analyst (CFA).
Eskild Endrerud | Board Member
Eskild Endrerud, a Norwegian citizen, holds the position as
Managing Partner at Arctic Investment Group AS, a Norwegian
early-venture investment company. Mr. Endrerud has previously
been chairman of the board of directors and CFO of Biim
Ultrasound AS which now is a part of the Group. Mr. Endrerud
holds a BSc in Entrepreneurship and Business from BI
Norwegian Business School, as well as a MSc in Real Estate
Development from NMBU Norwegian Business School.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
27
Oslo, May 29, 2025
The Board of Directors and CEO of Observe Medical ASA
Terje Bakken Line Tønnessen
Chair Board member
Eskild Endrerud Jørgen Mann
Board member CEO
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
28
D E C L A R A T I O N I N
A C C O R D A N C E W I T H § 5 - 5
O F T H E S E C U R I T I E S
T R A D I N G A C T
We confirm that the financial statements for 2024 have, to the best of our knowledge, been prepared in
accordance with applicable accounting standards and give a true and fair view of the assets, liabilities,
financial position and profit or loss of the company and the Group as a whole. The Board of Directors’
report includes a fair review of the development and performance of the business and the position of
the company and the Group as a whole, together with a description of the principal risks and
uncertainties that they face.
Oslo, May 29, 2025
The Board of Directors and CEO of Observe Medical ASA
Terje Bakken Line Tønnessen
Chair Board member
Eskild Endrerud Jørgen Mann
Board member CEO
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
29
S U S T A I N A B I L I T Y
S T A T E M E N T
It is of key importance to Observe Medical to
operate our business in a sustainable manner
and it is a perquisite for the company’s long-
term results to understand the impact on the
environment, society and stakeholders. The
information int this statement is inspired by Oslo
Børs’ guidelines for sustainability reporting
(Euronext guidelines), EU’s Corporate
Sustainability Reporting Directive (CSRD).
While elements from the value chains are
included, the coverage is not exhaustive. The
Group’s operations cover various activities,
including research and development,
production and assembly, as well as sales,
marketing, and distribution across a wide and
diverse geographical footprint. Achieving a
comprehensive overview of the value chains for
these diverse activities is a complex task, and
this statement reflects the best available
understanding to date, and the reporting will be
continuously refined in the coming years. The
claims and data in this report have not been
audited by a third party.
A B O U T O B S E R V E M E D I C A L
Observe Medical (‘Observe Medical’) is the
legal manufacturer of Sippi®, a proprietary, CE
marked automated system for urine
measurement. Sippi® offers a unique, effective
and innovative solution for urine monitoring at
the hospital intensive care units (ICUs), wards
and homecare.
With Sippi, the company’s focus is on increasing
quality assured patient data for clinical
decisions and addressing the challenge of
hospital acquired infection in healthcare
facilities worldwide. In addition, the system
replaces a manual time-consuming system and
increase clinical capacity. Urinary tract
infections are the number one hospital acquired
complication for patients, and their treatment is
a considerable burden to hospital staff and
budgets. Overall, approximately 3.8 million
Europeans are infected every year from
healthcare acquired infections of all types. In
March 2022, Observe Medical acquired Biim
Ultrasound AS, a Company that has developed
a unique, wireless and pocketable ultrasound
probe, Biim, that can scan patients and review
images in seconds. The objective of Biim is to
enhance healthcare personnel decision-making
and improve patient outcomes. Biim's
technology is patented, and the device received
510 (k) clearance from the US Food and Drug
Administration (FDA) in 2018. Biim is approved
for ultrasound imaging of the human body and
is specifically used to guide needle and catheter
insertions for dialysis and vascular access
procedures.
In September 2023, Observe Medical finalized
the acquisiton of the trademarks and other
intellectual property rights relating to state-of-
the-art urine measurement products known as
the UnoMeter™ and Abdo-Pressure™ products.
The UnoMeter™ family is a significant step
forward for Observe Medical as it expands its
product portfolio and strengthens its position in
the market. Observe Medical’s intent is to
continually grow the company’s platform and
portfolio to improving patient welfare and
patient outcomes, improving clinical data
accuracy and promoting positive health
economics, through ongoing R&D and
acquisition strategies in line with the company’s
goals and vision.
S U S T A I N A B I L I T Y S T R A T E G Y
A N D O B J E C T I V E S
The Group is committed to integrating
sustainability into our core business strategy,
aiming to create long-term value for both our
stakeholders and the environment. We
recognize that business success is closely
linked to our ability to address critical
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
30
environmental, social, and governance (ESG)
challenges. As a smaller company with limited
resources, we recognize the importance of
focusing our efforts on sustainable practices
that make a meaningful impact. While we are
not yet in a position to implement large-scale
environmental initiatives, we are committed to
continuous improvement and will focus on key
areas where we can make the most difference.
Our approach involves prioritizing practical and
achievable environmental actions that align with
our values and resources
Our sustainability strategy focuses on the
following key objectives:
• Environmental responsibility: Reducing
our carbon footprint, energy consumption,
and waste generation.
• Social responsibility: Ensuring the well-
being and safety of our employees,
promoting fair labor practices and
transparency and anti-corruption.
• Governance: Upholding the highest
standards of corporate governance, ethics,
and transparency in all our operations.
These objectives are integrated into our day-to-
day operations and are supported by our
ongoing commitment to ESG principles.
We want to grow our business, but not at the
expense of the environment, people’s wellbeing
or sound business principles.
S T A K E H O L D E R S
Employees: Observe Medical’s employees are
directly affected by the company’s internal
policies and activities and directly affect the
company through their performance and
actions.
Investors/shareholders: Observe Medical’s
investors and shareholders are primary
stakeholders and directly affect the company’s
priorities and strategic direction. Observe
Medical’s economic and business performance
may affect the priorities of investors and
shareholders.
Government/regulatory authorities:
Government and regulatory authorities affect
the company’s operating conditions directly
and indirectly.
Customers/patients: Observe Medical’s
customers consist of distributors, hospitals and
other health institutions in Europe and selected
markets globally. Customers are directly
affected by Observe Medical’s product offering,
and the product’s quality and safety. Customers
directly affect the company economically and
customer expectations also impact Observe
Medical’s sustainability priorities.
Suppliers: Suppliers directly affect Observe
Medical through the quality and pricing of the
company’s product and services. Observe
Medical’s suppliers are economically affected
by the company and their responsibilities are
indirectly affected by Observe Medical’s focus
on responsible business practice and the
expectations placed on them.
Academia and life science community:
Observe Medical is dependent on research and
scientific evidence from academics and the life
science community to grow the company’s
product portfolio and to deliver products of high
quality which are safe for patients to use.
E N V I R O N M E N T A L I M P A C T
Our environmental strategy focuses on
minimizing the impact of our operations on the
environment, aligning with global sustainability
efforts such as the Paris Agreement and local
environmental regulations.
Actively managing the environmental footprint
of its business operations is important to
Observe Medical, and it will become even more
important in the future and may impact the
company’s ability to operate in the long-term.
The main environmental challenges for the
medical device industry in general are through
use of disposable materials, equipment and/or
packaging, and through the use of chemicals to
meet sterilization requirements. The main
environmental impacts from Observe Medical’s
business operations are related to waste
generated from its products, such as disposable
units and packaging, production of purchased
goods and products, transportation of goods
and products (by truck, ship or plane from Asia
to storage facilities and customers), as well as
employee business travels.
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31
With the UnoMeter™ portfolio and a new
manufacturing partner in Asia, the Group’s
environmental impact increases with both
disposable units and emissions from
transportation.
The Group complies with all applicable
environmental laws and regulations. Observe
Medical has an environmental policy to
continuously work to enhance environmental
performance.
The use of non-sustainable materials is a main
concern in the medical device industry, and a
much-debated topic is the extensive use of
Polyvinyl Chloride (PVC). Observe Medical
always seeks to use environmentally friendly
materials in its products and together with the
customers and suppliers find good alternatives
within the regulatory requirements.
As a company selling medical devices, Observe
Medical must comply with strict requirements
for product packaging, especially for products
which are required to remain sterile. Naturally,
the packaging becomes waste for the
company’s customers.
All hospitals where Observe Medical’s products
are being used are required to follow strict
requirements for handling waste, which ensures
the proper waste management of the packaging
according to law.
Observe Medicals´s digital urine meter Sippi®
will contribute positively to reduce plastic waste
compared to manual urine meters.
S O C I A L R E S P O N S I B I L I T Y
We believe that a responsible approach to
social issues is critical to the success of our
business.
Our focus areas include:
• Employee welfare: We are dedicated to
providing a safe and healthy working
environment for all employees. This
includes ensuring fair wages, health and
safety training, and career development
opportunities.
• Diversity and inclusion: We promote a
diverse and inclusive workplace, where all
employees are treated with respect and
have equal opportunities to thrive.
• Ethical business practices: We are
committed to operating with integrity,
transparency, and in compliance with all
applicable laws and regulations. We uphold
a zero-tolerance policy towards corruption
and maintain clear governance structures
to ensure accountability.
• Human rights: We respect and support
internationally recognized human rights,
including the UN Guiding Principles on
Business and Human Rights. We ensure
that our operations and business
relationships are free from discrimination,
forced labor, and child labor.
C O R P O R A T E G O V E R N A N C E
Observe Medical considers good corporate
governance to be a prerequisite for value
creation and trustworthiness, and for access to
capital. In order to secure strong and
sustainable corporate governance, it is
important that Observe Medical ensures good
and healthy business practices, reliable
financial reporting and an environment of
compliance with legislation and regulations
across the Group.
Being part of a global value chain, Observe
Medical is exposed to ethical risks through its
business operations, and the company
therefore actively strives to ensure good and
healthy business practices.
The CEO bears the ultimate responsibility for
business ethics and anti-corruption in Observe
Medical. The Board ensures that the company
has sound risk management and an internal
control system that is appropriate to its activities
and is further responsible for reviewing the
company’s internal control system and the main
areas of business ethics risk annually.
CSR policy and code of conduct for suppliers is
implemented. Observe Medical has a zero
tolerance for corruption and the company’s
anti-corruption policy explains which criteria all
employees are required to comply with. Any
potential misconduct can be reported directly to
any member of the Corporate Management
Team or directly to any member of the Board.
Observe Medical is not part of any external
initiatives or collaborations on corruption
prevention.
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32
Observe Medical is dependent on its
distributors and those distributors' ability to
perform and operate in key markets. Observe
Medical relies on third-party suppliers for
production and distribution and is thereby
directly and indirectly exposed to risks and
opportunities in its supply chain. With the
UnoMeter™ portfolio, the exposure to new
suppliers and partners have increased
significantly. Observe Medical has distributors
as partners for foreign markets, which are
located in Europe, Asia, South America and
USA. Manufacturing partners are currently in
China, Italy and USA.
In general, Observe Medical operates in
countries which are considered low to medium
risk in terms of corruption, according to the
Corruption Perception Index. Still, all suppliers
are screened using criteria related to business
ethics prior to entering new contracts and the
Group is also looking to establish an annual risk
assessment of third parties and specific
markets. Observe Medical has decided not to
engage in business with companies in Russia or
Belarus.
There were zero reported incidents of
corruption or public legal cases regarding
corruption in 2024. Observe Medical did not
experience any breaches of its policies or
guidelines by suppliers in 2024, and the
company has not terminated or discontinued
any contracts with suppliers or business
partners due to breaches in the reporting
period.
Observe Medical has governance documents
setting out principles for how business should
be conducted. These apply to all group entities.
Observe Medical is subject to annual corporate
governance reporting requirements under
section 3-3b of the Norwegian Accounting Act
and the Norwegian Code of Practice for
Corporate Governance (NUES
recommendations), cf. section 7 on the
continuing obligations of stock exchange listed
companies.
Environmental and social considerations are an
integral part of Observe Medical’s business
operations. Observe Medical’s Board of
Directors (‘the Board’) bears the ultimate
responsibility for the company’s sustainability
approach and the sustainability report is
discussed and approved by the Board.
Executive Management in addition to Observe
Medical’s quality manager is responsible for the
follow-up of the company’s sustainability efforts
on a day-to-day basis.
We uphold the highest standards of corporate
governance, ensuring that our business
operates with integrity and accountability. Our
governance framework is designed to ensure
that decisions are made transparently, ethically,
and with the long-term interests of our
stakeholders in mind.
• Board composition and independence:
Our board consists of experienced
professionals who bring diverse skills and
perspectives to the decision-making
process.
• Ethical standards: The Group has
implemented a code of ethics through our
employee handbook, which governs all
business practices and relationships with
stakeholders.
The Group has established a supplier Code
of Conduct. Observe Medical expects its
business partners to comply with this Code
of Conduct and that they do their utmost to
live up to its requirements within their own
organisations and in the supply chain. This
should take place through dialogue,
transparency and open cooperation
between Observe Medical and its suppliers,
benefiting both parties.
• Risk management: The Group has
systems to identify, assess, and mitigate
risks, including those related to
sustainability and ESG factors. The QA/RA
department is responsible for managing
regulatory compliance, product quality, and
risk mitigation processes.
S U S T A I N A B I L I T Y R I S K S A N D
O P P O R T U N I T I E S
The Group actively assesses both the risks and
opportunities presented by sustainability
issues. We recognize that the evolving
landscape of environmental and social
challenges presents both risks to our business
and opportunities for innovation and growth.
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33
In our efforts to identify and manage
sustainability risks and opportunities, we also
recognize the growing importance of regulatory
frameworks aimed at improving transparency
and responsible business practices. The
Norwegian Transparency Act, which came into
effect on July 1, 2022 mandates large
companies with operations in Norway to
conduct due diligence on human rights and
transparency in their supply chains, ensuring
that they are not complicit in human rights
violations or adverse environmental impacts.
The Norwegian Transparency Act places a
significant emphasis on responsible sourcing
and supply chain transparency. For businesses
like ours, this provides an opportunity to
enhance our sustainability practices by
ensuring that we uphold human rights, avoid
corruption, and address any negative
environmental impacts across our value chain.
As view this as an opportunity to align with
global sustainability standards, reinforce our
commitment to ethical practices, and
strengthen the trust of our stakeholders,
customers, and investors
Our key considerations include:
• Supply chain risks: Ensuring that our
suppliers adhere to our high standards of
social and environmental responsibility.
Failure to identify or address risks in our
supply chain, such as labor exploitation,
poor working conditions, or environmental
harm, could result in reputational damage,
legal penalties, and reputational damage.
• Regulatory changes: Keeping pace with
global and local regulations on
sustainability, such as carbon pricing, waste
management laws, and labor standards.
• Climate change risks: Potential impacts of
climate change on our supply chain,
operations, and market conditions.
We actively work to mitigate these risks and
leverage opportunities that align with our long-
term sustainability goals.
P R O D U C T S A F E T Y
Product safety is fundamental to Observe
Medical and is part of the company’s license to
operate. Risk management is applied within the
group to ensure only products with acceptable
risks are placed on the market. The most likely
health and safety hazards are related to human
error when using the products, and the
company therefore works continuously with
usability.
The Quality Assurance and Regulatory Affairs
(QA/RA) director (the role is currently covered
by the CDO) has overall responsibility for
product safety. The QA/RA director is further
responsible for ensuring that Observe Medical’s
products comply with rules and regulations for
medical devices in the markets where the
products are launched.
Observe Medical has a digital group Quality
Management System (QMS) that covers
development, manufacturing and sales of
medical devices in all legal entities and sites
within the group, and has been designed to fulfil
the requirements in the Medical Devices
Directive (MDD), Medical Device Regulation
(MDR), applicable parts of 21 CFR, including
but not limited to Part 820 (QSR), and EN ISO
13485:2016. The QMS at Observe Medical
holds a Certificate of Registration on that the
QMS has been registered by Intertek (0413) as
conforming to the requirements of SS-EN ISO
13485:2016. The certified scope is;
“Developing, manufacturing and sales of
medical device systems for managing and
measuring of body fluid”.
Observe Medical has established its own
Quality Manual, which describes the overall
structure, content, and purpose of the
company’s Quality Management System
(QMS), as well as Quality Objectives with clear
responsibilities. The company’s Risk Policy
outlines the criteria for determining product risk
acceptability towards patients and users.
Furthermore, Observe Medical has
implemented a Quality Policy stating the
company’s commitment to complying with
applicable regulatory requirements, laws, and
guidelines, and to ensuring that products are
delivered at the right time, to the right place, and
with the promised quality.
Ensuring high quality products and processes is
a prerequisite for the Group’s contribution to
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
34
value creation and for ensuring the trust of its
stakeholders. Observe Medical’s overarching
goal is to comply with the industry code of
conduct in all markets, and standards relating to
risk management, such as the ISO 14971
standard for Medical Devices. The company
conducts quality checks on a regular basis, all
products are CE-marked or FDA approved, and
products developed by Observe Medical AB
has been verified and validated prior to launch
and is manufactured according to established
requirements to achieve high quality and
product safety.
F U T U R E G O A L S A N D T A R G E T S
Looking ahead, we remain dedicated to
enhancing our sustainability efforts and
achieving our long-term goals. Our targets for
the upcoming years include:
• Investigate alternative materials that are
more sustainable, recyclable, and safer to
handle after use, potentially replacing PVC
in some products. While PVC is commonly
used, we aim to identify materials that
reduce the environmental impact without
compromising functionality or safety.
• Increase the product’s lifespan and
functionality to reduce waste and the
frequency of replacement. Focus on
designing urine meters and bags to last
longer, thus minimizing their environmental
footprint.
The products in pipeline like UnoMeter™
Safeti™ Max with patented infection control
will likely have a longer durability due to
slower growth of bacteria and will typically
have a lower carbon footprint over time, as
they reduce the need for frequent
replacements and disposal.
Launching the digital urimeter Sippi® will
significantly contribute to reduce the use of
plastic materials, as the product consists of
a digital base unit with an expected life span
of 3 years, and a disposable bag which is
expected to have a longer durability due to
the patented infection control, Sippcoat®.
Recycling urine bags is challenging due to
contamination, safety concerns, and lack of
infrastructure. In many cases, it may not be
feasible to recycle these products directly,
and incineration is often used instead.
• Optimize logistics to reduce carbon
emissions, through consolidation of orders
and research and partner with carriers that
have a demonstrated commitment to
sustainability.
• Use a life cycle assessment (LCA)
approach to evaluate the carbon emissions
associated with each product, from raw
material to end-of-life disposal. This can
help identify areas where improvements
can be made, such as materials sourcing,
manufacturing processes, and product
disposal.
• Further work to understand how to reduce
our environmental footprints, direct and
indirect and establish a Group
Environmental Policy with guidelines that
outline how to improve environmental
performance.
• Seek gender balance in senior
management positions
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
35
Materials
Manufacturing
Transportation
Warehousing
Sales and distribution
Distributors
Hospitals
Patients
Waste and end-of-life
O U R V A L U E C H A I N – F R O M
R E S P O N S I B L E S O U R C I N G T O
P A T I E N T S A F E T Y
This illustration outlines the key stages of our supply
chain, from sourcing of raw materials and
manufacturing to quality assurance, logistics and
delivery to distributors and healthcare providers.
As a medtech company, ensuring transparency,
traceability and responsibility throughout our value
chain is essential to our commitment to quality,
sustainability and human rights.
We collaborate closely with our suppliers to uphold
high standards for labour conditions, environmental
impact and product integrity
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
36
CONSOLIDATED
FINANCIAL
STATEMENTS
2024
CONSOLIDATED
FINANCIAL
STATEMENTS
2024
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
37
C O N S O L I D A T E D
F I N A N C I A L S T A T E M E N T S
Observe Medical Group
C O N S O L I D A T E D S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E
(Amounts in NOK thousand)
Note
2024
2023
Restated
Operating revenues
7
17 228
27 942
Other income
7
1 255
0
Cost of materials
13
15 409
18 655
Gross result
3 074
9 287
Employee benefit expenses
8,9
16 138
25 964
Other operating expenses
11
16 955
26 270
Operating expenses
33 093
52 234
Operating result before depreciation and
amortisation (EBITDA)
-30 019
-42 947
Depreciation and amortisation
16,17
14 380
14 156
Impairment of goodwill
17
2 675
67 106
Operating result (EBIT)
-47 074
-124 209
Financial income and expenses
Financial income
5 677
7 523
Financial expenses
17 329
18 397
Net financial items
12
-11 652
-10 874
Result before tax
-58 727
-135 082
Income tax expense
22
0
17
Result for the period
-58 727
-135 099
Result for the period attributable to:
Equity holders of the parent company
-58 727
-135 099
Other comprehensive income that may be
reclassified subsequently to profit or loss
Currency translations differences
2 367
7 244
Total comprehensive income/loss for the period
-56 360
-127 855
Total comprehensive income attributable to:
Equity holders of the parent company
-56 360
-127 856
Basic earnings per share (NOK per share)
14
-0.26
-2.34
Diluted earnings per share (NOK per share)
14
-0.26
-2.34
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
38
Observe Medical Group
C O N S O L I D A T E D S T A T E M E N T O F F I N A N C I A L P O S I T I O N
ASSETS
Amounts in NOK thousand
Note
At 31 December 2024
At 31 December 2023
Restated
Non-current assets
Goodwill
17
33 067
35 208
Intangible assets
17
97 658
109 191
Tangible assets
16
196
1 957
Total non-current assets
130 921
146 356
Current assets
Trade receivables
18
2 759
3 117
Inventories
19
5 327
6 890
Other receivables and prepaid expenses
1 661
3 571
Cash and cash equivalents
6
1 978
13 676
Total current assets
11 726
27 254
Total assets
142 647
173 610
EQUITY AND LIABILITIES
Amounts in NOK thousand
Note
Share capital
24
75 108
49 578
Share premium
24
288 433
277 970
Other paid-in equity
11 800
11 800
Total paid-in equity
375 342
339 349
Uncovered losses
-354 206
-298 480
Total equity
21 136
40 868
Non-current liabilities
Contingent consideration
21
0
1 560
Non-current interest bearing liabilities
20
61 642
50 790
Other non-current liabilities
20
0
19 509
Total non-current liabilities
61 642
71 859
Current liabilities
Trade payables
18 120
17 847
VAT and other public taxes and duties payables
7 698
10 574
Interest bearing current liabilities
20
21 728
4 477
Current lease liabilities
15
0
656
Other current liabilities
12 324
27 329
Total current liabilities
20
59 870
60 883
Total liabilities
121 511
132 742
Total equity and liabilities
142 647
173 610
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
39
Observe Medical Group
C O N S O L I D A T E D S T A T E M E N T O F C H A N G E S I N E Q U I T Y
(Amounts in NOK thousand)
Share
capital
Share
premium
Other
paid-in
equity
Total
paid-in
capital
Capital
not paid
in
Uncovered
losses
Translation
differences
Total
Equity as of 1 January
2023
13 908
283 700
11 800
309 409
-159 205
-11 898
138 306
Share issue
35 670
35 670
35 670
Transaction costs
-5 730
-5 730
-5 730
Share options
478
478
Net loss of the period
-135 099
-135 099
Translation differences
7 244
7 244
Equity as of 31 December
2023 (restated)
49 578
277 970
11 800
339 349
0
-293 827
-4 654
40 868
Equity as of 1 January
2024
49 578
277 970
11 800
339 349
0
-293 827
-4 654
40 868
Share issue
25 530
13 747
39 277
39 277
Transaction costs
-3 284
-3 284
-3 284
Share options
634
634
Net loss of the period
-58 727
-58 727
Translation differences
2 367
2 367
Equity as of 31 December
2024
75 108
288 433
11 800
375 342
0
-351 919
-2 287
21 136
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
40
Observe Medical Group
C O N S O L I D A T E D C A S H F L O W S T A T E M E N T
(Amounts in NOK thousand)
Note
2024
2023
Restated
Cash flow from operating activities
Result before tax
-58 727
-135 082
Tax paid
0
36
Depreciation and amortization
14 380
14 156
Impairment of goodwill
2 675
67 106
Gain(-)/Loss(+) from sale of fixed assets
-55
0
Change in net finance, no cash effect
2 085
14 420
Change in inventories
1 563
1 227
Change in trade receivables and other receivables
1 798
515
Change trade payables and other current liabilities
8 848
13 168
Net cash flow from operating activities
-27 432
-24 454
Cash flow used in investing activities
Sale of tangible and intangible assets
790
392
Purchase of tangible and intangible assets
-1 841
-8 018
Net cash flow from investing activities
-1 051
-7 626
Cash flow from financing activities
Share issues
24
22 922
33 431
Transaction costs
-3 284
-4 980
Payment of interest-bearing debt
19
-2 378
-68
Loans received
0
5 000
Payment of lease liabilities
-501
-1 643
Net cash flow from financing activities
16 759
31 740
Currency translation differences
27
377
Change in bank deposits
-11 698
37
Bank deposits start of period
13 676
13 641
Bank deposits at the end of period
6
1 978
13 676
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
41
E X P L A N A T O R Y N O T E S T O
T H E C O N S O L I D A T E D
F I N A N C I A L S T A T E M E N T S
N O T E 1 – G E N E R A L
I N F O R M A T I O N
Observe Medical ASA is a Norwegian limited
liability, public listed company located in
Norway and whose shares are public traded on
Euronext Expand Oslo. Its head office is located
in Dronning Eufemias gate 16, 0191 Oslo,
Norway. The Company and its subsidiaries
(together the Group) is a growing medtech
group which has developed the next generation
digital urine meter, Sippi® and the wireless and
pocketable ultrasound probe, Biim. Observe
Medical introduced in 2023 UnoMeter™, a
manual Urine Measurement system and intra-
abdominal pressure measurement solution to a
broad global distribution network. The manual
system is an important step for Observe
Medical to be established as a preferred
supplier in this segment which will create a
unique market access channel for Sippi® to the
market.
The Group consists of the following companies:
Observe Medical ASA (Oslo, Norway), Observe
Medical AS (Oslo, Norway), Observe Medical
AB (Gothenburg, Sweden), Observe Medical
Nordic AB (Gothenburg, Sweden), Observe
Medical ApS (København, Denmark), Biim
Ultrasound AS, (Oslo, Norway), Biim Ultrasound
Oy (Finland) Biim Ultrasound Inc. (USA).
The Group’s activities are described in the
Board of Director’s report.
The consolidated financial statements for
Observe Medical ASA (“OM group” or “the
Group”), including notes, for the year 2024
were approved by the Board of Directors of
Observe Medical ASA on May 29, 2025 and will
be proposed to the Annual General Meeting.
Going Concern assumption and liquidity
The Group has prepared the financial
statements on the basis that it will continue to
operate as a going concern.
Based on current forecasts and working plans,
the Group’s working capital is not sufficient to
fund operations and payment of financial
obligations for the next 12 months from 31
December 2024. Going forward, the Group will
need to raise more equity, issue debt
instruments or divest assets to fund further
development of ongoing business.
The Group has previously communicated that
the net proceeds from the rights issue in 2023
were not sufficient to cover the working capital
requirements for continued product
development and operation of the ultrasound
business, Biim Ultrasound AS. There has been
a process where various strategic alternatives
being assessed, including advanced
discussions with Fresenius Medical Care about
the next step towards a final investment
decision. Currently the Group is awaiting such
decisions.
The Group continues talks with potential
financial providers and investors to support
further operations and growth with equity and
debt funding, in addition to exploring
alternatives to reduce funding needs. On 10th
April 2025, Observe Medical announced
agreements in principle with Convatec and
Navamedic to reduce their combined debt
position from NOK 82 million to NOK 41 million,
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
42
with an adjusted payment plan for the remaining
debt. The Company has engaged in
constructive dialogue with existing
shareholders and new investors, who have
indicated a willingness to contribute NOK 25
million in equity, subject to the debt reductions
being finalized. Additionally, negotiations with
smaller unsecured creditors have been initiated
to further manage the funding structure. There
remains a risk that adequate sources of funds
may not be available, or available at acceptable
terms and conditions, when needed, and
material uncertainty persists regarding the
going concern assumption until sufficient
capital injection is secured.
Reference is made to note 5 Financial Risk
management for further information on liquidity
risk.
N O T E 2 – A C C O U N T I N G
P O L I C I E S
The accounting policies applied, and the
presentation of the consolidated financial
information are consistent with the previous
annual financial statements for the year that
ended 31 December 2023.
Correction of errors – restatement
As disclosed in the stock announcement as of
25.10.2024 and 14.05.2025, the company
acknowledged certain accounting errors
identified by the Financial Supervisory Authority
of Norway’s (“NFSA”) review of certain topics
related to the 2023 annual financial statements
and the interim report for the first half of 2024.
During this review, the company acknowledged
certain accounting errors, which have been
corrected in this report in accordance with IAS
8 Accounting Policies, Changes in Accounting
Estimates and Errors. The annual financial
statements reflect the retrospective
restatement of the following prior period errors:
1. Following discussions with the NFSA the
Company has concluded that capitalized
development costs of NOK 4.5 million did
2
The asset transfer agreement entered into on 11 September
2023, between Observe Medical AS and Unomedical regarding
the UnoMeter™ Portfolio
not qualify for capitalization and should
have been expensed as operating
expenses. The expenses were related to
the development of UnoMeter™500 and
obtaining the required regulatory approval.
The effect is that operating expenses of
NOK 4.5 million should have reduced the
profit for the 12-month period ended 31
December 2023. Other intangible assets
should have been NOK 4.5 million lower
and reversed amortization expenses
following the reduced capitalization with
positive effect of 0.3 million for the period
ended 31 December 2023 and for the year
ended 31 December 2023, as well as NOK
0.5 million for the 6-month period ended 30
June 2024 and NOK 0.5 million for the 6-
month period ended 31 December 2024.
The correction had no effect on the 6-
month period ended 30 June 2023. The
corrected error has no cash effect.
2. Following discussions with the NFSA the
Company has concluded that the acquired
assets and seller credit
2
should have been
recorded at amortized cost based on an
estimated 12% market interest rate, based
on the group’s situation and risk profile. The
group of acquired assets and seller-credit
should have been recognized at a lower
value of NOK 7 million in the financial
position as of 31 December 2023 and 30
June 2024. Calculated interest expenses of
NOK 0.5 million should have reduced the
profit for the 6-month period ended 31
December 2023, and NOK 1.0 million for
the 12-month period ended 31 December
2023, with no effect on the 6-month period
ended 30 June 2023. Additionally, NOK 2.1
million should have reduced the profit for
the 6-month period ended 30 June 2024,
and NOK 1.5 million for the 6-month period
ended 31 December 2024. The calculated
interest reduces the profit and increases
the seller-credit. The corrected error has no
cash effect.
3. Following discussions with the NFSA, the
Company has decided that a fair share of
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
43
the discounted consideration of NOK 37.5
million should have been allocated to the
Convatec License Agreement as a separate
identifiable asset of NOK 4.3 million,
technical documentation related to the
Unometer products should have been
valued at NOK 4.4 million and the
information received about historical
customers-/distribution information should
have been valued at NOK 0.8 million. These
assets with definite estimated lifespan
should have been amortized resulting in
higher amortization.
The Company has concluded that a
predominant portion of the fair value of the
consideration relates to the UnoMeter™
trademark for which NOK 28 million have
been allocated to. The trademark has been
assessed to have an indefinite lifespan and
will consequently not be amortized but
subject to annual impairment testing. The
Company have assessed the UnoMeter™
trademark to have significant value due to
its established reputation and market
recognition. See note 17 for more
information about the UnoMeter™
trademark and the other assets acquired in
the Unometer seller-credit / asset transfer
agreement.
The reallocation between assets has
increased amortization expenses as
follows: NOK 0.45 million, reducing the
profit for the 6-month period ended 31
December 2023, and NOK 0.9 million for
the 12-month period ended 31 December
2023, with no effect on the 6-month period
ended 30 June 2023. NOK 1.3 million,
reducing the profit for the 6-month period
ended 30 June 2024, and NOK 1.3 million
for the 6-month period ended 31 December
2024. The intangible assets should
therefore have been correspondingly lower
by NOK 0.9 million as of 31 December
2023, and by an additional NOK 1.3 million
as of 30 June 2024, and a further NOK 1.3
million as of 31 December 2024. The
correction has no cash flow impact and
does not materially affect the Company’s
financial position.
4. Following discussions with the NFSA the
Company has reassessed the impairment
assessments as per 31 December 2023
and decided to restate the 2023
comparable figures with a write down of
goodwill related to the Ultrasound Cash
Generating Unit (GCU) of NOK 67.1 million
which reduces the loss for the 6-month
period ended 31 December 2024 and for
the full year ended 31 December 2024,
while increases the loss by NOK 67.1
million for the 6-month period ended 31
December 2023 and for the full year ended
31 December 2023. The effect for these
periods, and the interim period 6-month
ended 30 June 2024, is that the company's
goodwill should have been NOK 67.1
million lower. There was no effect on the 6-
month period ended 30 June 2023. Please
refer to note 17 for impairment
assessments per 31.12.2024.
5. Following discussions with the NFSA the
Company has decided that the accounting
treatment for the loan renegotiation with
Navamedic in November 2023 was not
correct and that a calculated modification
effect should have been recognized as an
interest expense, increasing the debt
obligation and reducing profit by NOK 0.8
million for the 6-month period ended 31
December 2023, with no effect on the 6-
month period ended 30 June 2023, and
NOK 0.8 million for the 12-month period
ended 31 December 2023. Furthermore, an
interest expense of NOK 0.3 million related
to this adjustment affected the profit for the
6-month period ended 30 June 2024, and
NOK 0.3 million for the 6-month period
ended 31 December 2024. These
adjustments have been made
retrospectively. The corrected error has no
cash effect.
6. When reassessing the acquired assets the
Company decided to reverse additional
NOK 0.75 million previously capitalized
expenses related to the transaction. The
operating expenses for the 6-month period
ended 31 December 2023 have increased,
with no effect on the 6-month period ended
30 June 2023. The corrections should have
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
44
reduced profit for the 6-month period
ended 31 December 2023 and for the full
year ended 31 December 2023, resulting in
a corresponding reduction of NOK 0.75
million in capitalized assets. There is no
additional profit and loss effect for the 6-
month period ended 30 June 2024 or the 6-
month period ended 31 December 2024,
though the balance sheet reflects the
reduced capitalization of NOK 0.75 million
as of those dates. The corrected error has
no cash effect.
The errors have been corrected by restating
each of the affected financial statement line
items for the prior periods.
Amounts in NOK thousand Second half First half Year Summary of effect of corrections 2024 2023 2024 2023 2024 2023 Other operating expenses - 5 254 - - - 5 254 Operating result before depreciation and - - 5 254 - - - - 5 254 amortisation (EBITDA) Depreciation and amortisation 1 329 586 1 329 - 2 659 586 Impairment of goodwill -67 106 67 106 67 106 Operating result (EBIT) 65 777 -72 946 -1 329 - -2 659 - 72 946 Net financial items 1 343 1 792 1 444 - 2 787 1 792 Result for the period 64 433 -74 737 -64 433 - -5 446 - 74 737 - - - Intangible assets -1 329 -12 820 -1 329 - -2 659 - 12 820 Goodwill - -67 106 -67 106 - 67 106 Total Assets -1 329 -79 926 -68 435 - -2 659 - 79 926 Seller credit Convatec -1 343 5 951 -2 148 - -3 491 5 951 Navamedic Loan -763 704 - 704 - 763 Total Liabilities -1 343 5 189 -1 444 - -2 787 5 189 Total Equity 64 433 -74 737 -69 879 - -5 446 -74 737 EPS 0.48 -1.21 -0.68 - -0.02 -1.30
Changes from the interim report for the 6-month period ended 31 December 2024: The following corrections
were not restated in the interim report due to receiving the final conclusions from the NFSA after publishing the
interim report. The following summary provides information of the additional changes in 2023 comparable figures
recognized in the Annual Report for 2024 (with effects on profit and loss highlighted in bold):
• Goodwill Write-Down: Following discussions with the NFSA the Company has decided that the write-down of
goodwill of NOK 67.1 million should have been recorded in 2023 and is adjusted in the 2023 comparable
figures in the 2024 financial statements.
• Capitalized Expenses: Following discussions with the NFSA the Company has decided that additional
capitalized development costs should be expenses in 2023, resulting in additional NOK 2.8 million being
expensed in the 2023 comparable figures, reducing the profit for the 12-month period ended 31 December
2023.
• Convatec Transaction: Following discussions with the NFSA the Company has decided that a relative share of
the consideration for the Convatec transaction should have been allocated to the related license agreement
and to information about customers/distributors. This has resulted in higher amortization expenses of NOK 1.1
million in H2 2024 and NOK 2.2 million for the full year. In addition, the Company has decided to expense
NOK 0.75 million previously capitalized related to the transaction.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
45
N O T E 3 – B A S I S O F
P R E P A R A T I O N A N D
S T A T E M E N T S
The group prepares its consolidated annual
financial statements in accordance with IFRS®
accounting standards as adopted by the EU.
Preparing financial statements in accordance
with IFRS requires the use of estimates.
Furthermore, applying the Group’s accounting
policies requires the management team to use
its judgment. Areas that involve a high degree
of estimation and a high degree of complexity,
or areas where assumptions and estimates are
significant for the Group’s financial statements,
are described in Note 4.
The Group’s financial statements have been
prepared based on historical cost, with the
exception of contingent consideration which is
recognized at fair value through profit or loss.
The basis and policies are applied consistently
in all the periods presented, unless the
description states otherwise.
New and amended standards adopted by the
group
New or amended standards and interpretations
issued during the current period, effective from
1 January 2024, are not expected to have
material impact on the entity in the current or
future periods.
New standards and interpretations not yet
adopted
IFRS 18 Presentation and Disclosure in
Financial Statements was issued on 9 April
2024. IFRS 18 is not mandatory for 31
December 2024 reporting period and has not
been early adopted by the group. The group is
in process of assessing the impact of IFRS 18
on the group’s reporting. Other new or
amended accounting standards and
interpretations have been published that are not
mandatory for 31 December 2024 reporting
periods and have not been early adopted by the
group. These standards are not expected to
have a material impact on the entity in the
current or future reporting periods.
The basis for preparation and material
accounting policy information used in the
preparation of the consolidated financial
statements are described below. The basis and
policies are applied consistently in all of the
periods presented, unless the description states
otherwise.
Basis of Consolidation
Companies that have been controlled by
Observe Medical ASA, have been fully
combined and consolidated for all periods
presented for the purpose of these financial
statements (“subsidiaries“). Control exists
when an entity is exposed, or has rights, to
variable returns from its involvement with the
investee and is able to affect those returns by
exercising power over the investee. Power
means existing rights that provide the investor
with the ability to direct relevant activities, i.e.
the activities that significantly affect the
investee’s returns. There are no non-controlling
interests for the periods presented. Intra-group
income, expenses, and balances are eliminated
in preparing the Groups financial statements.
Segment Information
For management purposes, the Group has one
operating segment, consistent with the
reporting to the chief operating decision maker,
consisting of the CEO and the Board of
Directors, and three cash generating units
(CGU’s) consisting of Urine Measurement,
Ultrasound and Other/distribution business.
Translation of Foreign Currency
The consolidated financial statements are
presented in Norwegian kroner (NOK). Foreign
companies that are part of the Group and have
different functional currencies are converted to
Norwegian kroner. Monthly average exchange
rates are used as an approximation of the
transaction exchange rate. Translation
differences are included in the total
comprehensive income. All values are rounded
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
46
to the nearest thousand (NOK 000), except
when otherwise indicated.
Intangible Assets and Goodwill
Expenditure on research activities is recognized
in profit or loss as incurred. Development
expenditure is capitalized only if the
expenditure can be measured reliably, the
product or process is technically and
commercially feasible, future economic benefits
are probable and the Group intends to and has
sufficient resources to complete development
and to use or sell the asset. Otherwise, it is
recognized in profit or loss as incurred.
Subsequent to initial recognition, development
expenditure is measured at cost less
accumulated amortization and any
accumulated impairment losses.
Goodwill arising on the acquisition of
subsidiaries is measured at cost less
accumulated impairment losses. Other
intangible assets, including customer
relationships, patents and trademarks, that are
acquired by the Group and have finite useful
lives are measured at cost less accumulated
amortization and any accumulated impairment
losses.
Subsequent expenditure is capitalized only
when it increases the future economic benefits
embodied in the specific asset to which it
relates. All other expenditure, including
expenditure on internally generated goodwill
and brands, is recognized in profit or loss as
incurred.
Amortization is calculated to write off the cost of
intangible assets less their estimated residual
values using the straight-line method over their
estimated useful lives and is generally
recognized in profit or loss. Goodwill is not
amortized. Amortization methods, useful lives
and residual values are reviewed at each
reporting date and adjusted if appropriate.
The Group capitalizes costs for product
development projects. Initial capitalization of
costs is based on management’s judgement
that technological and economic feasibility is
confirmed, usually when a product
development project has reached a defined
milestone according to an established project
management model. In determining the
amounts to be capitalized, management makes
assumptions regarding the expected future
cash generation of the asset, discount rates to
be applied and the expected period of benefits.
For the year 2024, capitalized expenditures are
related to development of the UnoMeter™
Safeti™ Plus.
Impairment of Non-Financial Assets
Tangible assets and intangible assets with finite
useful lives are assessed for impairment when
there are indications of impairment. An
impairment amounting to the difference
between the carrying value and recoverable
amount is recognized through profit or loss. The
recoverable amount is the highest of value in
use and fair value less cost of disposal. When
assessing possible impairment, assets are
grouped at the lowest level that generates cash
inflows that are largely independent of cash
inflows from other assets or groups of assets.
Goodwill is not amortized but tested at least
annually for impairment.
Inventories
Inventories are measured at the lower cost and
at net realizable value (NRV). To determine cost
the company uses the first-in, first-out method
(FIFO). Net realizable value is the estimated
selling price and the estimated costs necessary
to make the sale. If NRV has fallen below cost, a
write-down must be recognized in the period.
Adjustments to inventory (e.g., obsolescence)
must be recognized as they occur.
Financial Assets
The company has financial assets in the
category of amortized cost, which primarily
consist of short-term receivables and bank
deposits. Accounts receivables are initially
measured at the transaction price. Other
financial assets are initially recognized at fair
value in addition to transaction costs and then
at amortized cost using the effective interest
method adjusted for impairment. The company
uses historical figures to calculate provision for
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
47
expected credit losses on trade receivables. A
significant proportion of the customers are
public customers/healthcare institutions and
hospitals, and historically the company has
immaterial credit losses for the periods
presented, no credit losses have been realized
and no provisions for expected credit losses
have been recognized.
Cash and Cash Equivalents
Cash and cash equivalents in the statement of
financial position comprise bank deposits. For
the purpose of the consolidated statement of
cash flows, cash and cash equivalents consist
of bank deposits as defined above.
Financial Liabilities
Financial liabilities are measured at amortized
cost and consist of interest-bearing debt to
Navamedic ASA, Business Finland and
instalments of the Seller credit to Convatec
regarding to acquirement of UnoMeter™, in
addition to payables. The contingent
consideration related to the acquisition of
Sippi® is assessed to have a fair value of zero
as of 31 December 2024, as no future payments
are expected based on current projections.
The Company accounts for financial liabilities in
accordance with IFRS 9 Financial Instruments.
Modifications to financial liabilities are assessed
as substantial or non-substantial. Non-
substantial modifications result in an adjustment
to the carrying amount, with any gain or loss
recognized in profit or loss. Substantial
modifications lead to derecognition of the
original liability and recognition of a new loan.
Income Tax
The tax expense consists of tax payable and
deferred tax. The Group has historically
operated with significant losses for tax and
accounting purposes. The Group has
operations, and tax losses carried forward, in
Norway, Denmark and Sweden. So far, the
Group has had no basis for recognition of net
deferred tax assets according to IAS 12 Income
taxes. For all periods presented, the Group has
reported zero net deferred tax assets or income
tax expense. Deferred tax assets and deferred
tax is offset if there is a legally enforceable right
to offset assets in the event of tax payable
against liabilities in the event of tax payable, and
the deferred tax assets and deferred tax relate
to income tax that is imposed by the same tax
authority for either the same taxable enterprise
or different taxable enterprises that intend to
settle liabilities and assets in the event of tax
payable net. At the acquisition of Observe
Medical International AB in 2015, deferred tax
asset was recognized on tax losses carried
forward in the same amount as deferred tax
liability recognized on the fair value adjustments
of the technology intangible assets, with net
zero deferred tax recognized. In subsequent
periods, the deferred tax asset has been
reduced in line with the reduced deferred tax
liability on the intangible assets.
Pensions
The Group has entered into a mandatory
defined-contribution pension scheme for all
employees. The contributions are recognized
as payroll expenses as the obligation to pay
contributions accrue.
Revenue Recognition
The Group is in the business of providing
medtech products to customers globally.
Revenue recognition for products and revenue
streams have the same principle. Revenue from
customers is recognized at the point in time
when control of the goods is transferred to the
customer, generally at the agreed place of
delivery. The customers have no return rights if
the delivery is according to the agreed
specification and quality. Revenues are
recognized based on the agreed price, less any
discounts. The Group’s contracts primarily
involve the sale of goods, with each delivery
representing a single performance obligation
satisfied at a point in time. For contracts with
multiple or complex performance obligations,
revenue is recognised based on the allocation
of the transaction price to each obligation as per
IFRS 15, but no performance obligations in
2024. Invoices are issued upon delivery with
payment terms typically ranging from 15 to 30
days.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
48
Leases
The Group recognizes right of use assets and
lease liabilities for leases, except for
agreements with a lease period of less than one
year or where the value of the underlying asset
is low. Depreciation, impairment, and interest
expenses must be recognized in the
consolidated statement of comprehensive
income. For lease contracts for which the lease
term is less than one year or where the value of
the underlying asset is low the lease payments
are recognized as an expense on a straight-line
basis over the lease period.
Share Options
The Group has one share options scheme
under which options to subscribe for the
Group’s shares have been granted to certain
senior executives (employee stock option plan
under which an employee is granted the right to
purchase shares at a fixed price). The fair value
of options granted to members of management
is recognized as employee benefit expense with
a corresponding increase in equity for equity
settled awards. There are no cash settled share
options. The total amount to be expensed is
determined by reference to the fair value of the
options granted. The total expense is
recognized over the vesting period. Social
security contributions payable in connection
with an option grant are treated as cash-settled
transactions and expensed as employee benefit
expenses.
Events after the balance sheet date
Information on the Group’s positions at the
balance sheet date is considered in the annual
financial statements. Events after the balance
sheet date that do not affect the Group's
position at the balance sheet date, but which will
affect the Group's position in the future, are
stated if significant. Please refer to note 25.
N O T E 4 – S I G N I F I C A N T
J U D G E M E N T S A N D
A C C O U N T I N G E S T I M A T E S
The preparation of the Group's consolidated
financial statements in conformity with IFRS
requires the use of certain critical accounting
estimates and assumptions that affect the
reported amounts of revenue, expenses, assets
and liabilities, and the accompanying
disclosures, and the disclosures of contingent
liabilities. It also requires management to
exercise its judgement in the process of
applying the Group's accounting policies.
Uncertainty about these assumptions and
estimates could result in outcomes that require
material adjustment to the carrying amount of
assets or liabilities affected in future periods.
Estimates and judgements are continually
evaluated and are based on historical
experience and other factors, including
expectations of future events that are believed
to be reasonable under the circumstances.
The key assumptions concerning the future and
other key sources of estimation uncertainty at
the reporting date, that have a significant risk of
causing a material adjustment to the carrying
amounts of assets and liabilities within the next
financial year, are described below. The Group
based its assumptions and estimates on
parameters available when the consolidated
financial statements were prepared. Existing
circumstances and assumptions about future
developments, however, may change due to
market changes or circumstances arising that
are beyond the control of the Group. Such
changes are reflected in the assumptions when
they occur.
Business combinations and asset
acquisitions
Estimations that management have made as
part of the application of the entity’s accounting
policies and that have the most significant
impact on the amounts recognized in the
financial statements are related to the
acquisition of OMI AB in 2015, Sylak AB in
2020, and Biim Ultrasound AS in 2022,
purchase of UnoMeter™ assets in 2023.
As part of the business combination, the
management has based their judgments on
assumptions and estimates of the fair values of
assets and liabilities acquired, as well as the fair
value of the contingent consideration. These
assumptions and estimates at the acquisition
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
49
date affect the classification and carrying
amounts in the balance sheet and subsequent
amortization, depreciation, change in fair value
through profit or loss for contingent
consideration and potential for impairment
charges.
Development costs
The Group capitalizes costs for product
development projects. Initial capitalization of
costs is based on management’s judgement
that technological and economic feasibility is
confirmed, usually when a product
development project has reached a defined
milestone according to an established project
management model. Capitalization of further
development costs requires documentation that
all criteria for capitalization of own development
still are met, including that sufficient resources
are available to complete the development and
management’s expectations and estimates of
future economic benefits to be generated by the
assets.
Impairment of non-financial assets
In accordance with IAS 36, impairment is
recognised when the carrying amount of an
asset or cash-generating unit (CGU) exceeds its
recoverable amount, defined as the higher of its
fair value less costs of disposal (FVLCD) and its
value in use (VIU)
Management has assessed and concluded that
FVLCD is lower than the value in use, primarily
due to the lack of commercial history for the
Company’s products, meaning that any
disposal of assets is expected to generate lower
cash flows than their continued use and
commercialization. Consequently, the
recoverable amount for impairment testing
purposes has been determined based on value
in use.
The VIU is calculated using a discounted cash
flow (DCF) model based on the Group’s five-
year cash flow estimates. These estimates rely
heavily on expected future orders and
agreements, which are subject to high
uncertainty. Key assumptions include the
discount rate, expected cash inflows, growth
rates used for extrapolation, gross margin and
EBITDA margin, all of which are sensitive and
carry a risk of material adjustments to the
carrying amounts in future periods, particularly
for goodwill and intangible assets with indefinite
useful lives.
Sources of estimation uncertainty with a
significant risk of a material adjustment to the
carrying amount in the following period relates
primarily to the measurement of goodwill,
technology assets and other intangible assets.
The estimation uncertainty arises from the
limited historical data supporting
commercialisation, the reliance on future orders
and agreements, and the inherent volatility in
forecasting future cash flows. Key assumptions
used in determining the recoverable amount for
different CGUs, along with a sensitivity analysis,
are disclosed and further explained in Note 17.
Deferred tax asset
The Group has so far not been able to
demonstrate convincing evidence of future
taxable profits to be able to recognize net
deferred tax assets on its tax losses carried
forward according to IAS 12.
Contingent consideration
The contingent consideration relates to the
purchase of Observe Medical International
(OMI) AB and the assessment is based on
estimated cash flows from the Sippi® product.
The period of estimation is until the end of 2026.
The remaining estimate uncertainty related to
contingent consideration is the estimated cash
flows from Sippi until the end of 2026. As
management does not expect Sippi sales to
exceed the milestone levels in the agreement,
the contingent consideration is measured at
zero. See note 21 for further details
N O T E 5 – F I N A N C I A L R I S K
M A N A G E M E N T
The Group’s operations are exposed to various
types of financial risk: market risk (including
currency risk, interest risk, and price risk),
credit risk, and liquidity risk.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
50
Market Risk
The Group believes that such risk primarily
arises in relation to the future sales of the
Group’s products, measured in terms of both
price and volume. Factors that can influence
market risk include increased competition,
instructions to reduce prices from the
authorities, and competition from existing and
future medtech companies. It is a risk that the
fair value or future cash flows of a financial
instrument will fluctuate because of changes in
market prices. Market risk comprises three
types of risk: currency risk, interest rate risk and
other price risk.
It is important that the Group can establish and
keep its UnoMeter™ products in the market that
Convatec left behind when withdrawing from
the hospital care market and focusing on
chronic care markets. Increased competition
may lead to reduced revenue potential and
gross margin for Observe Medical’s products.
Following any liquidity risk, if by any case the
Group is unable to fulfill the terms of the
contract related to the purchase of UnoMeter™
from Convatec, including payment of the
contracted instalments of the seller credit, there
is a risk that Observe Medical will have to
suspend its sales under the UnoMeter™ brand.
A significant market risk relates to the supply
agreement with Fresenius Medical Care for
Biim Ultrasound devices, which is a key revenue
source. The contract was extended in May 2024
for two years. A potential non-renewal after
2026, posing a substantial risk to future
revenues.
The markets in which the Group operate are
highly competitive and there is strong
competition in developing and bringing new
health care products to the market. Some
competitors have advantages, such as vertical
integration, product diversity, greater financial
resources or economies of scale, which may
adversely affect the Group's ability to compete
on sustainable terms. Although the Group is
currently not aware of any new successful
competing products within Digital Urine Output
Measuremnet (Sippi®) being introduced or
developed, there is a possibility that other
companies develop competing products that
achieve the same results as the Group's
products and as such compete for market
shares against the Group. There is also a
possibility that a competing product will have
alternative or new solutions which outdate the
technology that is used by the Group.
Operational Risk
Geo-political factors, such as the Russian
invasion of Ukraine and the war in the Middle
East as well as implications after the Covid-19
pandemic, has resulted in a rapidly evolving
geo-political situation and introduced a new set
of challenges with respect to maintaining
business continuity. These events have been
disrupting global supply chains which can
impact our suppliers’ ability to access materials
in time, which in turn could lead to lack of
components and delay the production of
devices. Moreover, the geo-political situation
could also create challenges related to logistics
and delay in shipments. Consequently, this
could lead to reduced revenue potential and
gross margin for Observe Medical’s products.
Rapid geo-political changes may impact both
access to market, transportation, tariffs and
taxes. There has also been a rise of
protectionism leading to tariffs and sanctions
which could disrupt trade lanes. The US-China
relationship could potentially influence sourcing
patterns and tariff costs. The company is
following the situation closely and is aware that
production in Asia increase the risk exposure.
The Biim probe is currently being manufactured
in the US.
There is a risk that key personnel may leave the
Company and interrupt business continuity.
Operational risks also include errors that may
occur at contracted suppliers and
manufacturers of the Group’s products and
Observe Medical has processes in place to
mitigate these risks.
Climate Risk
The Group evaluates climate-related risks
connected to its operations and important parts
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
51
of the value chain. Rapid climate changes may
impact on the Group’s financial estimates,
access to market, cost of materials,
transportation and taxes. The Company
currently sees limited risk and monitoring of
these risks is going to continue in the future.
Currency Risk
For the periods presented, currency risk has
primarily been related to payables and
receivables within the Observe Medical group
and related parties. Payroll and operating
expenses are generally incurred in the currency
of the country in which the individual company
is registered (NOK, SEK, DKK, EUR and USD).
For the entities in the USA and Finland, where
operating expenses are incurred in USD and
EUR, respectively, there is currently no income
and low expenses. This creates currency risk
when NOK-denominated funding is converted
to USD or EUR to cover expenses or debt.
The seller credit to Convatec is denominated in
USD. A +/- 10% change in NOK against USD will
have an effect of approximately NOK 4 million.
In Finland, the group has a government
innovation loan related to Biim of approximately
EUR 400 thousand. A +/- 10% change in NOK
against EUR will have an estimated effect of
approximately NOK 0.45 million.
Going forward, revenues are expected to be
generated primarily in EUR and USD, with some
revenues in the companies’ functional
currencies (e.g., NOK or SEK). For the
UnoMeter™ portfolio and other products, the
cost of goods sold is mainly in USD and EUR,
while the majority of sales revenues are
currently in EUR and USD. Currency risk arises
when revenues in foreign currencies are
translated into the company’s functional
currency and when trade receivables in EUR or
USD are affected by exchange rate fluctuations
until settlement. Expected sales growth in the
coming months and years will increase
exposure to foreign currencies, particularly
EUR and USD. However, as the company
becomes self-financing through its operations,
the currency risk is expected to be reduced due
to improved cash flow and reduced reliance on
external financing. The group has not yet
implemented specific currency hedging
strategies to manage this risk
Credit Risk
For the periods presented, the Group has had
low exposure to credit risk from its customers.
The company’s customers have been mainly
large public enterprises and larger distributors
that represent a low credit risk. As the company
grows through global expansion, the credit risk
may somewhat increase. However, the Group
has an agreement with Avida on the purchase
of receivables. This agreement both reduces
the credit risk and improves the Group’s
working capital. The factoring agreement is
without recourse.
Liquidity Risk
Liquidity risk is the risk that the Group will not
be able to settle its financial obligations as they
fall due. The Group has utilized a combination
of equity financing, debt financing, and seller
credit to meet liquidity requirements relating to
financial obligations, covering operational
losses and investments. See note 20 for
information of when payments of the Group’s
financial obligations are due.
Based on current forecasts and working plans,
the Group’s working capital is not sufficient to
fund operations and payment of financial
obligations for the next 12 months from 31
December 2024. Going forward, the Group will
need to raise more equity, issue debt
instruments or divest assets to fund further
development of ongoing projects and future
operations. As outlined in note 1, the board is
engaging in a group of investors who have
indicated a conditional willingness to provide
new liquidity of NOK 25 million. The key
condition to these indications is a substantial
reduction in the Company’s existing debt.
If the Group is not able to successfully obtain
the required capital at acceptable terms,
material uncertainty would exist as to whether
the Company will be able to continue as a going
concern. Should this occur, the Board of
Directors may evaluate further strategic options
including the restructuring, sale, bankruptcy
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
52
proceedings or dissolution of the Company. In
case of a situation where funds may not be
available in the amount needed, the value of
assets can be lower than presented in the
financial statements. However, this is not
reflected in the valuation of the assets, as the
annual accounts are based on the assumption
of going concern. Reference is also made to the
going concern assumption.
Variable Interest Rate Risk
The Group is exposed to variable interest rate
risk as the interest-bearing liabilities to
Navamedic ASA is agreed at interest at 3-month
NIBOR + 6% (percentage points). A sensitivity
analysis indicates that a +/- 1% change in the 3-
month NIBOR rate would impact the Group’s
annual interest expense by approximately NOK
400 thousand. The liability towards Convatec
Plc. from the purchase of the UnoMeter™
portfolio are in USD and has a fixed interest rate
of 7.8%. Fluctuations in interest rates also do
not pose a significant risk on the Group’s bank
deposits. The Group has not hedged its interest
rate exposure.
Management of Capital
The Group has so far not had any expressed
goals or requirements in relation to
management of capital. Focus in the short term
will be to ensure continued operations to further
develop and commercialize UnoMeter™
Safeti™ Plus, UnoMeter™ Safeti™ Max, Sippi®
and the Biim ultrasound probe. In the longer
term, goals will include securing returns for its
owners, and maintaining an optimal capital
structure to reduce capital expenses. So far, the
Group has not had any debt with financial
covenant restrictions
N O T E 6 – B A N K D E P O S I T S
Bank deposits as at December 31, 2024 of NOK 1 978 thousand where of NOK 191 thousand was
restricted (tax withholding account). As at December 31, 2023 NOK 949 thousand were restricted.
N O T E 7 – R E V E N U E S A N D O T H E R I N C O M E
Amounts in NOK thousand
Revenue per product group 2024 2023 Urine Measurement 11 487 8 285 0 1 207 Biim Ultrasound 1)Nordic distribution portfolio5 614 15 589 Other 128 2 862 Operating revenues 17 229 27 943 2)Other income1 255 0
1)
During the period, the company transferred certain customer contracts and inventory to Vingmed as part of a strategic
restructuring initiative. The transaction does not constitute a disposal of a separate major line of business under IFRS 5 and is
therefore not classified as a discontinued operation. The company continues to operate within the same industry and market,
serving existing customers and generating revenue from its remaining product and service offerings.
2)
Indemnity settlement agreement related to the Biim acquisition leading to other income of NOK 1.2 million in 2024. Sale of
company car leading to gain from sale of assets of NOK 55 thousand.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
53
N O T E 8 – P A Y R O L L E X P E N S E S
Amounts in NOK thousand
2024 2023 Salaries 11 381 18 172 Remuneration to the Board and Nomination Committee 1 300 1 320 Employer's tax 1 628 3 592 Share options for employees 634 478 Pension expenses – defined-contribution scheme 894 2 193 Other payroll expenses 300 209 Total 16 138 25 964 Average number of full-time equivalents 6,2 15,3 Headcount at 31 December 5 9
N O T E 9 – R E M U N E R A T I O N T O
C O R P O R A T E M A N A G E M E N T
A N D B O A R D O F D I R E C T O R S
In accordance with the Norwegian public
Limited Companies Act §6-16 a, the board of
directors prepares a separate statement related
to the determination of salary and other benefits
for the corporate management. This report can
be found on the Company’s web page
observemedical.com. The total remuneration to
the corporate management consists of basic
salary (main element), bonus, benefits in-kind
and pension schemes, but varies from person
to person. The Group’s Chief Executive Officer
determines the remunerations to other
management in agreement with the Chair of the
Board of Directors. The total remuneration is
determined based on the need to offer
competitive terms and reflect the responsibility
for the CEO and other members of the
management team. The total remuneration shall
not be market leading but should ensure that
Observe Medical attracts and retains senior
executives with the desired skills and
experience. The basic salary is subject to an
annual evaluation and is determined based on
general salary levels in the labor market.
The Company is entitled to terminate the CEO’s
employment agreement by giving 6 months'
notice, and the Executive by giving 4 months'
notice. The notice of termination must always be
in writing and will expire on the last day of a
month. If the CEO’s employment is terminated
by the Company other than for misconduct, the
Executive will be entitled to a severance
payment equivalent to 12 months' Base Salary.
The Group has defined contribution pension
schemes. The CEO has a defined contribution
pension scheme within the requirement of the
law in Denmark
Remuneration to the Group Management
5)
2024 Other Pension Option 3)5)Bonus expenses expenses Total OptionsSharesAmounts in NOK thousand Salary benefits1)EO Rune Nystad (until 29.02.24) 441 2 350 31 31 853 1 000 000 1 662 483 1) 4)CEO Jørgen Mann (from 29.02.24) 2 151 215 1 021 215 99 3 701 1 000 000 600 000 1)CFO Per Arne Nygård (until 21.03.24) 867 49 46 961 1)CFO Johan Fagerli (from 21.03.24) 1 081 70 150 125 4 1 430 500 000 250 763 Total 4 539 336 1 521 417 133 6 946 2 500 000 2 513 246
1)
For members of executive management who either joined or resigned during the year, total remuneration expensed
presented in the table above is for the period where the members are part of the executive management team
2)
3)
4)
5)
The shares are owned by US Holding AS who is 100% owned by Rune Nystad
Other benefits include car allowance, mobile phone and other allowances according to Danish law.
The amounts have been converted from DKK to NOK using an exchange rate of 1.56
Shares and options holding as of 31 December 2024, before reverse share split of 15:1.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
54
2023
Other Option Amounts in NOK thousand Salary benefits Bonus Pension expenses Total Options Shares 1)CEO Rune Nystad 2 325 60 100 172 452 3 108 1 000 000 787 483 CFO Per Arne Nygård 1 640 94 500 172 26 2 432 143 955 668 921 Total 3 965 154 600 344 478 5 540 1 143 955 1 456 404
Remuneration to the Board of Directors
2024
Amounts in NOK thousand, except number of shares
8)
3)
6)
8)Shares owned by Function Name Board Other Shares fee fee related parties 1)Chair Terje Bakken 300 1 350 000 31 553 565 2)2)868 760 45 109 765 Board member Kathrine G. Andreassen 225 9)Board member Sanna Rydberg 225 4)14 718 859 Board member Eskild Endrerud 255 5)Board member Line Tønnessen 265 932 692 Total 1 270 17 870 311 76 663 330
1)
Terje Bakken is partner in R. Investment Company AS who owns 31,553,565 shares in Observe Medical ASA
2)
All shares owned by Soleglad Invest AS who is 100% owned by Kathrine Gamborg Andreassen
3)
Kathrine Gamborg Andreassen is CEO in Navamedic ASA who own 45,109,765 shares in Observe Medical ASA
4)
Includes NOK 20 thousand in fee as member of the Audit Committee
5)
Includes NOK 30 thousand in fee as Chair of the Audit Committee
6)
Eskild Endrerud indirectly owns 13,706,359 shares in the Company and directly owns 1,012,500 shares in the Company
8)
Number of shares is as of 31.12.2024, before reverse share split of 15:1.
9)
The board member's term ended at the 2024 Annual General Meeting
2023
Amounts in NOK thousand, except number of shares Function Name Board Other Shares Shares owned by fee fee related parties Chair Terje Bakken 300 37 384 437 Board member Kathrine G. Andreassen 225 1 019 360 4 222 727 Board member Sanna Rydberg 225 Board member Eskild Endrerud 255 11 013 298 Board member Line Tønnessen 265 432 692 Total 1 270 12 465 350 41 607 164
Executive personnel are defined as the Chief Executive Officer (CEO) and Chief Financial Officer
(CFO). No loans were granted, and no assets were pledged for the benefit of employees,
shareholders, or members of the Board of Directors in 2024 or 2023.
N O T E 10 – S H A R E O P T I O N S
As part of a long-term incentive plan, senior management has in 2024 been awarded share options.
CEO was granted 1 000 000 options with an exercise price of NOK 0.44 and CFO was granted 500 000
share options with an exercise price of NOK 0.40. The weighted average exercise price for all options
granted is NOK 0.43. The options will be vested in three tranches, whereby each tranche comprising
1/3 of the options will vest on the first, second and third anniversary of the grant date, respectively. The
options have been granted without consideration and each option will upon exercise give the right to
acquire one share in the Company (equity settlement). Any shares acquired upon exercise will be
subject to a 12 months' lock-up period from the date received by the option holder, and all options will
expire and lapse if not exercised the expiry date.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
55
The social security provision for share options is calculated based on the intrinsic value of the options
at each reporting date, defined as the difference between the market price of the shares and the strike
price, multiplied by the applicable employer’s social security rate. The provision is recognized over the
vesting period and adjusted throughout the life of the options to reflect changes in the share price and
the number of options expected to be exercised. As of 31 December 2024, the share price was below
the strike prices of all active options, consequently no social security provision was recognized, as the
options were out of the money and exercise was considered unlikely. Total option expenses for the
company in 2024 are NOK 634 thousand (NOK 478 thousand in 2023). The table below shows share
options at 31 December 2024.
Contractual life*
3.33
Strike price*
0.43
Share price*
0.39
Expected lifetime*
2.33
Volatility*
110%
Interest rate*
3.54%
Dividend*
0
FV per instrument*
0.22
*Weighted average parameters at grant of instrument. Share/strike price as at 31.12.2024,
before reverse share split of 15:1.
3
beginning
awarded
vested
and
Share options at 31 December 2024 Share options Share Exercise End of held at Share Share options Name and Specification Vesting Exercise price of Award date holding the options options awardee position of plan date period the share period and dateof the unvested year 11.11.23 – 11.11.2022 11.11.2023 11.11.2023 4.50 333 333 0 333 333 0 11.11.26 Rune Nystad 11.11.24 – ESOP 2022 11.11.2022 11.11.2024 11.11.2024 4.50 333 333 0 333 333 (former CEO) 11.11.26 11.11.25 – 11.11.2022 11.11.2025 11.11.2025 4.50 333 334 0 0 333 334 11.11.26 Total 1 000 000 0 666 666 333 334 26.08.24-26.08.2024 26.08.2024 26.08.2024 0.44 333 333 333 333 25.08.25 - Jørgen Mann 26.08.25-CEO award 26.08.2024 26.08.2025 26.08.2025 0.44 333 333 0 333 333 (CEO) 25.08.26 26.08.26-26.08.2024 26.08.2026 26.08.2026 0.44 333 334 0 333 334 25.08.27 Total 0 1 000 000 333 333 666 667 12.12.24-12.12.2024 12.12.2025 12.12.2025 0.40 166 667 166 667 12.12.25 Johan Fagerli 2024 12.12.25-(CFO) 12.12.2024 12.12.2026 12.12.2026 0.40 166 666 166 666 12.12.26 12.12.27-12.12.2024 12.12.2027 12.12.2027 0.40 166 667 166 667 12.12.28 Total 0 500 000 0 500 000 Total for the 1 000 000 1 500 000 1 000 000 1 500 000 Company
3
The share option table has not been adjusted to reflect the reverse share split adopted on the extraordinary general meeting
January 7 2025. The reverse share split was in the ratio of 15:1.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
56
N O T E 1 1 – O T H E R O P E R A T I N G E X P E N S E S
Amounts in NOK thousand 2024 2023 Restated Consultants 4 345 10 029 Audit Services 2 688 2 691 Legal and professional fees 1 189 2 412 Expense relating to short-term leases 637 1 736 Accounting and financial services 2 310 2 431 IT expenses 1 018 1 519 Travel expenses 344 1 046 Advertising expenses 141 108 IR expenses 1 189 883 Patent, trademark, certification etc. 1 196 1 093 Other operating expenses 1 896 2 322 Total 16 955 26 270
Audit fees
Amounts in NOK thousand 2024 2023 Statutory audit services 2 488 2 653 Tax advisory 0 38 Other assurance services 345 250 Total 2 833 2 941
Fees to the auditor are recognized as an expense in the period in which the related services are rendered. Only costs expensed
in the reporting period are included in the table above. Assurance services related to capital increase of NOK 145 thousand is
booked against equity.
N O T E 1 2 – F I N A N C I A L I T E M S
Amounts in NOK thousand 2024 2023 Financial income Restated Interest income 1 780 64 Change contingent consideration 1 452 1 978 Currency gain 2 445 5 481 Other financial income 0 0 Total 5 677 7 523 2024 2023 Financial expenses Restated Interest expenses 9 551 6 649 Change contingent consideration -108 173 Currency loss 7 864 9 758 Other financial expenses 22 1 817 Total 17 329 18 397 Net financial items -11 652 -10 874
In November 2024, a net gain of NOK 1,574 thousand was recognized from the modification of financial liabilities,
treated as a non-substantial modification under IFRS 9, comprising a gain of NOK 1,649 thousand from Convatec
and a loss of NOK 75 thousand from Navamedic. Interest expenses in the restated 2023 figures include a
modification effect from the Navamedic loan of NOK 0.8 million, with a corresponding reversal in 2024 reducing
interest expenses by the same amount.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
57
N O T E 13 – C O S T O F M A T E R I A L S
Amounts in NOK thousand 2024 2023 Cost of materials for resale 12 324 18 291 Write-down of inventory 3 085 365 Total cost of materials 15 409 18 655
Inventory write-down of a total of NOK 3 085 thousand in second half. NOK 2 250 thousand relates to raw materials
located in the US for the Biim probe. In accordance with IAS 2, raw materials should be measured at the lower of
cost and net realizable value. Given that these components have had no movement since 2023, there is an increased
risk of obsolescence. Although the components remain technically usable, to ensure a conservative and accurate
valuation as the future turnover is postponed, a full write-down of the raw materials has been recognized. NOK 835
thousand relates to obsolete inventory in Sweden.
N O T E 1 4 – E A R N I N G S P E R S H A R E
For the periods presented there are no dilutive effects on profits or number of shares. Basic and
diluted earnings per share are therefore the same. 2023 figures are restated.
2024 2023 Restated Profit for the period (TNOK) -58 727 -135 099 Average no of shares 228 982 947 57 626 256 Earnings per share (NOK) -0.26 -2.34
N O T E 1 5 – R E S E A R C H A N D D E V E L O P M E N T
Observe Medical performs research and development (R&D) activities related to UnoMeter™, Sippi®
and Biim. Total R&D expenditure is approximately NOK 2.6 million in 2024 (NOK 5.9 million in 2023), of
which NOK 1.7 million has been capitalized and amortized over the estimated useful lives of the related
assets. Operating R&D expenses primarily comprise internal personnel costs and non-capitalized
external costs. Also refer to note 2. 2024 2023 Amounts in NOK thousand Restated Operational expenses, internal and external resources 850 5 900 Capitalized expenses 1 774 0 Total 2 624 5 900
N O T E 1 6 - T A N G I B L E A S S E T S A N D L E A S E
Amounts in NOK thousand Right-of-use Other Sum Acquisition cost 1 January 2023 2 549 2 870 5 419 Additions 0 42 42 Disposals -1 592 0 -1 592 Currency translation differences 78 5 83 Acquisition cost 31 December 2023 1 035 2 917 3 952 Acquisition cost 1 January 2024 1 035 2 917 3 952 Disposals -1 053 -1 214 -2 267 Currency translation differences 19 -28 -10 Acquisition cost 31 December 2024 0 1 675 1 675
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
58
Accumulated depreciation 1 January 2023 -46 1 314 1 268 Depreciation for the year 1 543 430 1 973 Disposals -1 200 0 -1 200 Currency translation differences -24 -22 -46 Accumulated depreciation 31 December 2023 273 1 722 1 995 Accumulated depreciation 1 January 2024 273 1 722 1 995 Depreciation for the year 463 267 731 Disposals -726 -479 -1 204 Currency translation differences -11 -31 -42 Accumulated depreciation 31 December 2024 0 1 479 1 479 Carrying value 1 January 2023 2 595 1 557 4 152 Additions 0 42 42 Disposals -392 0 -392 Depreciation -1 543 -430 -1 973 Translation differences 102 26 128 Carrying value 31 December 2023 762 1 195 1 957 Carrying value 1 January 2024 762 1 195 1 957 Disposals -328 -735 -1 063 Depreciation -463 -267 -731 Translation differences 29 3 32 Carrying value 31 December 2024 0 196 196 4Expected useful economic life3-5 years 3-5 years Lease Liability 2024 2023 As at 1 January 792 2 643 Disposal -328 -392 Lease payments in the period -501 -1 643 Interest cost 6 81 Currency translation differences 31 103 Closing liability at 31 December 0 792 Current 0 656 Non-Current 0 136 0 792 Effect of leases Contract on the Statement of Comprehensive Income Amounts in NOK thousand 2024 2023 Depreciation expense of right-of-use assets 463 1 543 Interest expense on lease liabilities 6 81 Expense relating to short-term leases (included in other operating expenses) 637 1 736 Total amount recocnised in result for the period 1 107 3 360 Undiscounted Lease Liabilities and Maturity of Cash Outflow Amounts in NOK thousand 2024 2023 Due within 1 year 0 837 Due between 1 year and 3 years 0 197 Total 0 1 035
Lease contracts relating to company cars and offices were disposed during 2024.
4
IAS 38.118-119, IAS 38.122a
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
59
N O T E 1 7 – I N T A N G I B L E A S S E T S
Licence Technology Technology agree-Customer assets / develop-Sum Amounts in NOK thousand Goodwill Trademark meent relations Patent ment (Restated) Acquisition cost 1 January 2023 99 961 2 540 96 318 15 418 214 238 Additions 0 27 976 4 273 788 4 433 37 470 Currency translation differences 2 353 1 637 207 4 943 Acquisition cost 31 December 52023 (Restated)102 314 27 976 4 273 3 329 102 388 15 625 255 905 Acquisition cost 1 January 2024 102 314 27 976 4 273 3 329 102 388 15 625 255 905 Additions 0 1 775 1 775 Currency translation differences 535 1 110 164 1 808 Acquisition cost 31 December 2024 102 849 27 976 4 273 3 329 103 498 17 563 259 488 Accumulated amortization 1 January 2023 0 0 212 23 475 7 822 31 509 Amortization for the year 0 712 280 8 860 2 331 12 183 Impairment for the year 67 106 67 106 Currency translation differences 0 0 2 276 -1 569 707 Accumulated amortization 31 December 2023 (Restated) 67 106 0 712 492 34 612 8 584 111 506 Accumulated amortization and impairment 1 January 2024 67 106 0 712 492 34 612 8 584 111 506 Amortization for the year 0 2 137 333 9 099 2 081 13 650 Impairment for the year 2 675 2 675 Currency translation differences 0 332 599 931 Accumulated amortization and impairment 31 December 2024 69 781 0 2 849 825 44 043 11 264 128 762 Carrying value 1 January 2023 99 961 0 2 329 72 843 7 595 182 728 Additions 0 27 976 4 273 788 4 433 37 470 Amortization 0 -712 -280 -8 860 -2 331 -12 183 Impairment for the year -67 106 -67 106 Translation differences 2 353 0 -639 1 776 3 489 Carrying value 31 December 2023 (Restated) 35 208 27 976 3 561 2 837 67 777 7 040 144 399 Carrying value 1 January 2024 35 208 27 976 3 561 2 837 67 777 7 040 144 399 Additions 0 1 775 1 775 Amortization 0 -2 137 -333 -9 099 -2 081 -13 650 Impairment for the year -2 675 -2 675 Translation differences 534 777 -435 876 Carrying value 31 December 2024 33 067 27 976 1 425 2 504 59 454 6 300 130 725 6Expected useful economic lifeIndefinite Indefinite 2 years 10 years 10 years 5 years
Goodwill arises from the acquisitions of
Observe Medical International in 2015, (CGU
Urine Measurement), Sylak AB in 2020 (CGU
Other Business) and Biim Ultrasound AS in
2022 (CGU Ultrasound). The goodwill related to
CGU Ultrasound of NOK 67.1 million has been
written down in the 2023 restated figures (see
note 2).
5
Restated. Refer to note 2, correction of an error
6
IAS 38.118-119, IAS 38.122a. Linear amortization.
The assets acquired from Convatec in 2023
have been separately identified, measured at
fair value and allocated a relatively part of the
total consideration for the acquired assets. The
trademark of UnoMeter™ was identified as a
material part of the transaction based on the
well-known reputation and historical sales of the
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
60
products in the portfolio. The valuation of the
trademark was based on a royalty-by-relief
method where an assumed royalty of estimated
future revenues was discounted, measuring the
trademark to NOK 28.0 million. The trademark
has been assessed to have an indefinite
lifespan. For over 30 years, Convatec has
produced and sold UnoMeter™ products,
building a trademark that is highly regarded and
sought after in the global market for urine
measurement solutions. Through Convatec’s
sales network, UnoMeter™ products have
reached over 600 customers across 50
countries, providing a strong platform for
market access. The primary purpose of
acquiring the assets was the ability to approach
customers with a well-known brand, thereby
facilitating the relaunch of Sippi®, a digital urine
measurement device unique within the
acquired product portfolio, alongside
UnoMeter™’s manual instruments. While an
established distribution network did not exist,
the Company gained access to a list of potential
distributors familiar with the UnoMeter™ brand
(historical customer-/distribution information),
enabling opportunities to re-launch the
UnoMeter™ product family and introduce
Sippi® to leverage synergies within the urine
measurement product portfolio. Consequently,
The Company assesses that the UnoMeter™
trademark constitutes a significant portion of
the acquisition cost (NOK 28.0 million).The two-
year license agreement with Convatec securing
the Group the rights to the Unometer assets
have been allocated a value of NOK 4.3 million
based on the same method of valuation as the
trademark but based on revenues for the first
two years corresponding to the length of the
license agreement. This license agreement
asset is amortized over two years. Further, NOK
0.8 million and NOK 4.4 million was allocated to
assets measured at a replacement cost for
information related to historical UnoMeter
customers/distributors and technical
documentation related to UnoMeter™. These
assets are amortized over 10 years.
Other technology assets and patents include
the Sippi® patents and Biim technology, while
technology development comprises capitalized
external costs associated with the development
of the Group’s product portfolio. Development
costs are capitalized when the recognition
criteria are met. Amortization of capitalized
development costs commences typically when
the product is ready for market and required
regulatory approvals have been obtained.
Goodwill and trademarks are not amortized but
are tested annually for impairment.
Impairment testing of goodwill and other
intangible assets
For impairment testing, goodwill acquired
through business combinations and trademark
with indefinite useful life are tested at least
annually.
The Group performs annual impairment tests
for goodwill, intangible assets with indefinite
useful lives, and intangible assets not yet
available for use as of 31 December (ongoing
product development). Additionally, impairment
tests are conducted for other assets if there are
indications of impairment. The recoverable
amount is determined as the higher of value in
use (VIU) and fair value less costs to dispose
(FVLCTD). If the carrying amount of a cash-
generating unit (CGU) exceeds its recoverable
amount, an impairment loss is recognized in the
income statement. Impairment losses on
goodwill are not reversed, while reversals may
be considered for other assets if underlying
estimates change.
As of 31 December 2024, the Group conducted
impairment tests for its three CGUs: Urine
Measurement, Ultrasound, and
Other/Distribution. The tests covered all assets
allocated to each CGU, including goodwill,
intangible assets (patents, technology,
customer relationships), and other relevant
assets. The recoverable amount for all CGUs
was determined using VIU, based on
discounted cash flow (DCF) models over a 5-
year forecast period.
The following table summarizes the carrying
amounts of goodwill and intangible assets in
each CGU as of 31 December 2024. Goodwill
and trademark with indefinite useful life is not
amortized and is tested annually for impairment.
Other intangible assets (technology/patents
and customer relationships) are amortized over
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
61
5–10 years, and the Convatec license
agreement is amortized over 2 years.
CGU Urine CGU CGU Other Amounts in NOK thousand measurement Ultrasound business Sum As at 31 December 2024 Goodwill 33 067 - - 33 067 Trademark 27 976 - - 27 976 Licence agreement 1 425 - - 1 425 Technology/Patent 18 916 46 838 - 65 754 Customer relationships and other 683 1 821 - 2 504 Other assets 154 42 - 196 Carrying value 82 221 48 700 130 921 CGU Urine CGU CGU Other Amounts in NOK thousand measurement Ultrasound business Sum As at 31 December 2023 (Restated) Goodwill 32 543 - 2 665 35 208 Trademark 27 976 - - 27 976 Licence agreement 3 561 - - 3 561 Technology/Patent 20 584 54 233 - 75 563 Customer relationships and other 762 2 075 - 2 837 Other assets 1 863 94 - 1 957 Carrying value 87 289 56 402 2 665 146 356
The following sections provide details for each
CGU, including carrying amounts, key
assumptions, and sensitivity analyses.
CGU Urine measurement
The Urine Measurement CGU includes goodwill
and intangible assets related to Sippi® and
UnoMeter™ products. Management’s
assumptions for future growth remain
consistent with projections as of 31 December
2023, updated to reflect market developments
through 31 December 2024. The impairment
test confirmed that the recoverable amount
exceeded the carrying amount and no
impairment was recognized.
Estimates for the Urine measurement CGU are
based on a continued roll-out of the UnoMeter™
products, reaching full historical market sales in
2027-2028 (over NOK 200 million in annual
sales
7
). Estimates for the Sippi® device
anticipate new sales starting in Q4 2025,
followed by gradual growth as both sales and
7
Based on sales statistics from Convatec
recurring revenue from established customers
increase.
The recoverable amount was determined using
VIU, based on a DCF model over a 5-year
forecast period (2025–2029)
The DCF model incorporates three scenarios to
account for uncertainty in revenue amount and
timing:
• Base Case (50% weighting): Management’s
best estimate, reflecting continued rollout
of UnoMeter™ and gradual Sippi® sales
from Q4 2025.
• 30% revenue reduction in base case (25%
weighting)
• 70% revenue reduction in base case
revenue (25% weighting)
The VIU calculation is based on the following
key assumptions, derived from management’s
forecasts, historical data, and market
expectations for market pricing and economy of
scale:
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
62
• Revenue Growth: Compound average
annual revenue growth of 58.9% (2025–
2029), reflecting UnoMeter™ reaching
historical market sales (NOK 200 million
annually by 2027–2028) and Sippi® ramp-
up from end of 2025, based on existing
distribution agreements and market
penetration plans.
• Gross Margin: Average of 41.6%, based on
actual production costs from 2023 and
2024 and expected economies of scale.
• EBITDA Margin: Average of 11.0% over the
5-year period, reflecting operational
efficiencies as sales scale.
• Discount Rate: 12.7% WACC, and is
calculated using a risk-free rate, a risk
premium, a market-specific risk premium
adjusted by beta via CAPM, and a
company-specific risk premium. The tax-
adjusted cost of debt is weighed with equity
and debt.
• Terminal Growth Rate: 2.0%, aligned with
long-term inflation and medical device
market growth.
Management has recognized that the speed of
technological change and possibility of new
entrants may have a significant impact on
growth rate assumptions.
The sensitivity analysis shows that no
reasonably possible change in key
assumptions, such as a +/- 1% change in the
discount rate, a +/- 5% in gross margin, a +/- 2%
in EBITDA margin, a +/- 2% change in revenue
growth, or a or a 0.5% reduction in the growth
rate, would result in the carrying amount
exceeding the recoverable amount, due to
sufficient headroom in the impairment test.
During the last year the company has prioritized
development, production and roll-out of the
UnoMeter™ portfolio, with UnoMeter™ Safeti™
Plus as the by far largest product in terms of
revenue. Sippi® is planned to be rolled out in a
larger scale when the UnoMeter™ products are
established on the global market. Despite
delayed cash flows, Sippi® holds significant
value for Observe Medical. The progress made,
through the UnoMeter™ products highlight that
Sippi® now is better positioned for long-term
commercial success and the product's future
revenue potential in the global market remains.
CGU Ultrasound
On the 31 of May 2024 an extension of the
agreement with Fresenius Medical Care for the
supply of wireless pocketable ultrasound
devices was signed. The initial agreement with
Fresenius was entered into in October 2021,
with a one-year extension exercised in October
2023. This renewal extends the partnership
until April 1, 2026.
Fresenius Medical Care is the world's largest
provider of dialysis, dialysis products, and other
services, with the potential to supply ultrasound
probes to approximately 3,000 clinics in the U.S.
With a full scale-roll out in Fresenius, this would
imply on average 2-8 probes per clinic. Our
estimate includes an average of 3.5 probes per
clinic. As of today, Biim has sold 285 Biim
probes to Fresenius.
As of 31 December 2024, a three-month pilot
project with Biim was conducted in selected
clinics, including staff retraining and re-
engagement with physicians. Despite the
benefits of the technology, Fresenius are not
ready to scale up the use to all clinics but will
continue to assess the utilization of Biim
machines across their clinics over the next 6
months to monitor the engagement with the
device.
The write down of goodwill for CGU Ultrasound
of NOK 67.1 million was a result of further
delayed cash flows compared to prior year
estimates. The remaining fair value of assets in
the CGU Ultrasound are NOK 48.7 million. The
discount rate used was a WACC of 12,5%
(WACC 14%).
For 2024, the company has no assets with
indefinite useful lives. The Ultrasound CGU
includes intangible assets (patents, technology,
customer relationships) related to the Biim
probe. Due to indicators of impairment,
specifically delays from Fresenius Medical
Care, an impairment test was performed on the
relevant assets. This test did not identify any
further impairment losses.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
63
The recoverable amount was determined using
VIU, based on a DCF model over a 5-year
forecast period (2025–2029) and incorporates
four scenarios to account for significant
uncertainty in revenue:
• Base Case (25% weighting): Revenue from
the “Fresenius contract” reflect the intent
agreement of purchase of devices for all US
clinics (valid until April 2026)
• 30% reduction in base case revenue
(12.5% weighting)
• 70% reduction in base case revenue
(12.5% weighting)
• Zero Value Case (50% weighting): No
revenue, reflecting uncertainty in Fresenius
contract continuation.
The base case relies on revenue from
Fresenius. Consequently, we have also included
a «zero value case» for this CGU, accounting for
the case if this contract should not proceed. In
the «zero value case», Biim’s value in use is
estimated to zero and the FVLCD will be
expected to be higher based on potential sale
of the thechnology.
The VIU calculation is based on the following
key assumptions, derived from the “Fresenius
contract”, historical pricing and costs and
management’s market expectations, including
economy of scale.
• Revenue Growth: Compound average
annual revenue growth of 12.0% from 2026
(no sales in 2025). The growth is based on
an estimated gradual rollout using the
projected number of clinics, the estimated
number of Biim devices per clinic, and the
estimated sales price derived from actual
sold probes.
• Gross Margin: Average of 60.0%, reflecting
actual production cost adjusted for
economy of scale.
• EBITDA Margin: Average of 34.6% (2026–
2029), reflecting expected operational
efficiency and scalability.
• Discount Rate: 12.7% WACC, consistent
with group-wide assumptions, calculated
using a risk-free rate, a risk premium, a
market-specific risk premium adjusted by
beta via CAPM, and a company-specific
risk premium. The tax-adjusted cost of debt
is weighted with equity and debt.
• Terminal Growth Rate: 2.0%, reflecting
long-term medical device market growth.
Management has recognized that the speed of
technological change and possibility of new
entrants may have a significant impact on
growth rate assumptions. A sensitivity analysis
was performed for key assumptions (discount
rate, growth rate, gross margin, EBITDA margin
and revenue growth rate). The headroom is
zero following the impairment, indicating no
remaining margin above the recoverable
amount. A reasonably possible increase in the
discount rate by 1% would reduce the
recoverable amount by approximately NOK 2
million, a decrease in the growth rate by 0.5%
would reduce it by NOK 1 million, a decrease in
the gross margin by 2% would reduce it by NOK
5 million, a decrease in EBITDA by 1% would
reduce it by approximately NOK 4 million and a
reduction of revenue growth rate by 2% would
reduce it by approximately NOK 5 million. This
CGU is highly sensitive to revenue assumptions
due to reliance on the Fresenius contract. The
significant 50% weighting of the zero-value
scenario already incorporates a high degree of
uncertainty, limiting the impact of other
assumption changes.
The company continues to view the Biim probe
as a strategically important asset with potential
for future revenue growth. Due to time and
delayed conclusions from Fresenius, the
Company is unable to reliably substantiate
future cash flows at this stage. As an FDA-
approved, patented technology, the Biim probe
still has a market position, and commercial
relevance.
CGU Other/distribution business
The goodwill in the Other/Distribution CGU,
amounting to NOK 2.7 million, originating from
the acquisition of Sylak AB, has been fully
impaired in 2024. The impairment arises
because Observe Medical Nordic AB (formerly
Sylak AB) has ceased to generate future cash
flows due to the termination of its operational
activities.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
64
In accordance with IAS 36 – Impairment of
Assets, goodwill is allocated to a cash-
generating unit (CGU) expected to benefit from
the synergies of the acquisition. As no future
economic benefits are expected from the
Other/Distribution CGU, the recoverable
amount, based on both value in use and fair
value less costs to dispose, is assessed as zero.
Consequently, the full amount of NOK 2.7
million has been impaired in the current period.
The impairment is presented under Write-down
of goodwill in the income statement.
Based on the management assessment,
assumptions and expectations applied in
business cases and future plans it is the
company’s opinion that the cash generating
units justify their carrying value as shown in the
balance sheet per at 31 December 2024.
The company has assessed the impact of US-
China trade tensions and tariffs, which may
affect supply chain costs and market access. No
significant tariff-related impacts have been
identified as of the reporting date, but the
situation is closely monitored.
N O T E 1 8 – T R A D E R E C E I V A B L E S A N D O T H E R R E C E I V A B L E S
Amounts in NOK thousand 2024 2023 Trade receivables 2 759 3 117 Other receivables 1 629 3 539 Total 4 389 6 656 Due date profile for trade receivables 2024 2023 Not due 1 277 1 045 0-3 months 256 > 3 months 1 482 1 816 Total 2 759 3 117
Trade receivables > 3 months is mainly related to Biim parts supplied to manufacturer, partly offsetting trade payables and
other debt against the same manufacturer.
N O T E 1 9 – I N V E N T O R I E S
Amounts in NOK thousand 2024 2023 Raw materials and extra parts (at cost) 2 987 2 113 Finished goods (at lower of cost and net realisable value) 5 425 8 403 Write-down -3 085 -3 626 Total 5 327 6 890
N O T E 20 – F I N A N C I A L
I N S T R U M E N T S
Loans
The Company has two subordinated loan
agreements with Navamedic for loans with an
aggregate outstanding amount of NOK 38.3
million (including interest) at the date of 31
December 2024 (the Navamedic Loans) after a
conversion to share capital of NOK 16.4 million.
On 6 December 2024, the Company and
Navamedic entered into an Addendum
Agreement with respect to the Navamedic
Loans. Pursuant to the Addendum Agreement,
Navamedic converted NOK 16 354 815 of
Navamedic Loan I to shares in the Company
(the Conversion Shares), at a subscription price
of NOK 0.40 per Conversion Share. The first
loan agreement, entered into on 27 September
2019, has an outstanding principal amount of
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
65
NOK 32.1 million including interest
("Navamedic Loan I"). The second loan
agreement, entered into on 6 September 2023,
has an outstanding principal amount of NOK 6.2
million including interest ("Navamedic Loan II").
Furthermore, the final maturity dates of the
Navamedic Loans are postponed from 31
January 2025 to 31 December 2027
("Navamedic Loan I" and "Navamedic Loan II")
and a new amortization schedule will be applied
for Navamedic Loans. Following the addendum,
Observe Medical shall start paying interest on
loan 1 from second quarter of 2025 and start
paying principal from 1 January 2026. The
remaining principal of NOK 15 000 000 is due
at 31 December 2027. Observe Medical shall
start paying interest on loan 2 from second
quarter of 2025. The remaining principal of
NOK 6 343 380 is due at 31 December 2027.
Interest is unchanged at NIBOR+6% p.a.
Furthermore, there remains a risk that the
Company may not be able to pay the
outstanding amounts under the Navamedic
Loans upon maturity, or to make the required
interest payments, if the Group's financial
situation does not improve.
As part of the loan agreement entered into on 6
September 2023 between Observe Medical
ASA and Navamedic ASA, the loan is secured
by first-priority pledges over the shares in Biim
Ultrasound AS and Observe Medical AS, as well
as floating charges over machinery, inventory,
trade receivables, bank accounts, and other
material assets of Observe Medical ASA. The
lender may also require additional pledges over
shares in Observe Medical AB, Observe
Medical Nordic AB, and Observe Medical ApS.
The security is granted in favour of Navamedic
ASA as security agent on behalf of itself and
other lenders, and secures obligations under
this and related loan agreements on a shared
and pro rata basis
In addition to the above, the Biim Ultrasound Oy
has a "start-up funding" loan from Business
Finland of approximately EUR 400,000 including
accrued interest. The loan is classified as short-
term interest-bearing debt. The company has
been offered a payment plan over 6 years
starting September 2025, but currently not
signed any addendum to the agreement.
The Group may also incur additional
indebtedness in the future, including in the
near-term future.
The Group has assessed and accounted for the
modification effect arising from the
renegotiation of debt in accordance with IFRS 9
Financial Instruments for renegotiation in 2023
and 2024. For the renegotiation in 2024 the net
effect is negative NOK 75 thousand. The loss
reflects the present value difference of
discounted modified cash flows. For the
renegotiation in 2023, the effect was negative
NOK 0.8 million.
UnoMeter™ seller credit / asset transfer
agreement
On 19 November 2024 the Group reached an
agreement with Convatec/Unomedical to defer
all outstanding payments of consideration
pursuant to the asset transfer agreement with
Convatec/Unomedical for the acquisition of the
UnoMeter™ portfolio, totaling USD 3,895,000,
by 12 months.
When acquiring the UnoMeter™ assets in 2023,
and as restated in the 2023 figures, the total
consideration was discounted by an estimated
12% discount rate, based on an reasonable rate
considering the Group’s financial situation. The
discount effect was recognized as a reduction
in the carrying amount, with the calculated
interest increasing the carrying amount over
time. The remaining consideration will be
payable as follows:
• USD 500,000 shall be paid on 28 June
2025; (with an option for the Company to
defer the payment for six months)
• USD 1,000,000 shall be paid by 30
December 2025 (with an option for the
Company to defer the payment for six
months); and
• The remaining portion of the consideration
will be paid at completion of the transaction,
and no later than 1 September 2026.
Under the amended terms, the Company will
pay interest on these deferred amounts at a rate
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
66
of 7.8% per annum. The interest payments will
be calculated from (i) 28 June 2024, for the first
consideration instalment and (ii) 30 December
2024, for the second consideration instalment.
The interest will be payable on a quarterly basis
with a first payment amounting to USD 10,000
on 20 December 2024, and subsequent
quarterly payments starting on 1 April 2025. No
other changes have been made to the
agreement.
The Group has assessed and accounted for the
modification effect arising from the
renegotiation of debt in accordance with IFRS 9
Financial Instruments for renegotiation of the
Convatec ATA in November 2024 with a
financial effect of a gain of NOK 1.6 million.
Financial liabilities as at 31 December 2024
0-3 3-12 1-2 2-3 3-4 > 4 Carrying Total months months years years years years amount Amounts in NOK million Payables loan to Navamedic group 0.0 3.1 25.1 23.1 51.2 38.4 Trade account payables 16.6 1.5 18.1 18.1 Other current liabilities 1.4 1.4 1.4 Payables to Convatec 18.0 29.5 47.6 40.2 Other current interest-bearing liabilities 4.7 4.7 4.7 Total 21.3 24.0 54.6 23.1 123.0 102.8 Financial liabilities as at 31 December 2023 0-3 3-12 1-2 2-3 3-4 > 4 Carrying Total months months years years years years amount Amounts in NOK million Payables loan to Navamedic group 51.8 51.1 49.9 Leasing liabilities 0.5 0.4 0.2 0.1 1.2 0.8 Contingent consideration upon acquisitions 2.3 2.3 1.6 Other non-current interest-bearing liabilities 0.0 0.1 0.1 0.1 0.1 0.6 1.0 0.9 Trade account payables 10.8 7.0 17.8 17.8 Other current liabilities 2.5 2.5 2.5 Payables loan to Convatec 15.9 19.4 35.2 35.2 Other current interest-bearing liabilities 4.5 4.5 4.5 Total 31.7 10.0 71.5 0.2 0.1 2.9 115.6 113.2
To enhance working capital, the company has negotiated extended payment terms with some suppliers, resulting in deferred
trade payables. The instalments related to Convatec seller credit may be deferred with an additional 6 months in June 2025 and
December 2025 with 5% interest.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
67
Classification of financial assets and liabilities as at 31 December 2024
Fair value through Measured at profit or Amounts in NOK million amortised cost loss Total Current assets Cash and cash equivalients 2.0 2.0 Trade receivables and other receivables 3.9 3.9 Total current financial assets 5.9 5.9 Non-current financial liabilities Contingent consideration upon acquisitions 0.0 0.0 Payables loan to Navamedic group 38.4 38.4 Payables loan to Convatec 23.2 23,2 Total non-current financial liabilities 61.6 0.0 61.6 Current financial liabilities Trade account payables 18.1 18.1 Other current liabilities 1.4 1,4 Payables loan to Convatec 17.0 17,0 8Other current interest-bearing liabilities4.7 4,7 Total current financial liabilities 41.2 41.2 Total financial liabilities 102.8 0.0 102.8
Classification of financial assets and liabilities as at 31 December 2023 Fair value through Measured at profit or Total Amounts in NOK million amortised cost loss Restated Current assets Cash and cash equivalients 13.7 13.7 Trade receivables and other receivables 5.0 5.0 Total current financial assets 18.7 18.7 Non-current financial liabilities Liabilities to financial institutions Lease liabilities 0.1 0.1 Contingent consideration upon acquisitions 1.6 1.6 Payables loan to Navamedic group 49.9 49.9 Other non-current interest bearing liabilities 0.9 0,9 Payables loan to Convatec 15.7 15,7 Total non-current financial liabilities 66.6 1.6 68.2 Current financial liabilities Lease liabilities 0.7 0.7 Trade account payables 17.8 17.8 Other current liabilities 2.5 2,5 Payables loan to Convatec 19.5 19,5 Other current interest bearing liabilities 4.5 4,5 Total current financial liabilities 45.0 45.0 Total financial liabilities 111.6 1.6 113.2
8
Other non-current interest-bearing liabilities consisting of “Business Finland” innovation loan in Biim Ultrasound Oy
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
68
Additional information about the change in financial liabilities arising from financing activities
Loans from Contingent Bank Overdraft Navamedic consideration Lease Amounts in NOK million loans facility Group upon acquisitions liabilities Other Total Carrying value 1 January 2024 0.9 49.9 1.6 0.8 -1.5 54.7 Cash flow -0.9 -0.5 -1.5 -2.9 Change in liability due to aquisition 1)Change in liability with no cash effect-11.5 -1.6 -0.3 -13.4 Carrying value 31 December 2024 0.0 0.0 38.4 0.0 0.0 0.0 38.4 Loans from Contingent Bank Overdraft Navamedic consideration Lease Amounts in NOK million loans facility Group upon acquisitions liabilities Other Total Carrying value 1 January 2023 1.0 40.6 3.4 2.6 47.6 Cash flow -0.1 5.0 -1.6 3.3 Change in liability due to aquisition Change in liability with no cash effect 4.3 -1.8 -0.1 2.2 4.6 Carrying value 31 December 2023 0.9 49.9 1.6 0.8 2.2 55.4
1)
Navamedic loan converted to share capital, partly offset by interest
2024 2023 Restated Carrying Carrying Fair value Fair value amount amount Amounts in NOK million Current financial assets Trade receivables and other receivables 3.9 3.9 5.0 5.0 Cash and cash equivalents 2.0 2.0 13.7 13.7 Total current financial assets 5.9 5.9 18.7 18.7 Total financial assets 5.9 5.9 18.7 18.7 Non-current financial liabilities Other non-current interest bearing liabilities 0.9 0.9 Lease liabilities 0.1 0.1 Payables loan to Navamedic group 38.4 38.4 49.9 49.9 1)Payables loan to Convatec23.2 25.5 15.7 15.7 0.0 0.0 1.6 1.6 Total non-current financial liabilities 61.6 63.9 68.2 68.2 Current financial liabilities Lease liabilities 0.7 0.7 1)Payables loan to Convatec17.0 17.0 19.5 19.5 Trade account payables 18.1 18.1 17.8 17.8 Other current interest bearing liabilities 1.4 1.4 2.5 2.5 Other current liabilities 18.1 18.1 17.8 17.8 Total current financial liabilities 41.2 41.2 45.0 45.0 Total financial liabilities 102.8 105.2 113.2 113.2
1)
The debt to Convatec was previously non-interest-bearing and was renegotiated to interest-bearing debt in 2024. It is classified
as Level 3 in the fair value measurement hierarchy. The fair value of contingent consideration is determined by using significant
unobservable inputs (also Level 3) and is measured at fair value through profit and loss.
For financial instruments recognized at amortized cost, the carrying amount of current financial assets and liabilities is considered
a reasonable approximation of their fair value due to their short-term nature. This approach ensures a practical assessment of
their value as of the reporting date. Due to lack of observable data, it is difficult to establish a basis to estimate the fair value of the
liabilities to Navamedic ASA. Given the Group's financial position, the fair value is probably significantly lower than the carrying
amount. See note 1 regarding Going concern and note 5 Financial risk management.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
69
N O T E 2 1 – C O N T I N G E N T C O N S I D E R A T I O N
Observe Medical International AB (OMI AB) was acquired on 4 August 2015 for a total purchase price
of NOK 60.6 million, including a contingent consideration valued at NOK 25.6 million at the acquisition
date. The contingent consideration is tied to two elements: (1) Royalties based on revenues from sales
of the Sippi® product, with potential payments stipulated until 2024. The fair value of this contingent
consideration was initially determined by discounting expected future royalty payments. However, no
royalty payments were achieved by 2024, the final year specified in the agreement. Consequently, the
company has no further obligations to discount or pay royalties.
(2) Additionally, the agreement includes six milestone payments potentially payable to the former
shareholders of OMI AB, contingent on achieving specific sales targets for the Sippi® product. Five
targets were required to be met by 2023, with the final target set at accumulated sales exceeding NOK
900 million by the end of 2026. The remaining milestone payments are contingent on Sippi® sales
surpassing NOK 900 million by 31 December 2026. Despite Observe Medical’s efforts to establish an
effective distribution platform and its proximity to a potential commercial breakthrough for Sippi®, the
company considers it unlikely that the NOK 900 million milestone will be achieved by the end of 2026.
As a result, the fair value of the contingent consideration is now NOK 0 and the change in estimated fair
value is recognized through profit or loss.
N O T E 2 2 – T A X E S
Income tax 2024 2023 Restated Current tax 0 17 Deferred tax 0 0 Tax expense/income recognised 0 17
Reconciliation of income tax
2024 2023 Tax rate Amounts in NOK thousand Restated Result before tax -58 725 -135 083 12 920 Expected income taxes, 22% of result before tax 29 718 -164 Differences in tax rates -128 1 550 Norway, permanent differences 22 % -14 763 -663 Sweden, permanent differences 21 % 2 305 0 Denmark, permanent differences 22 % -2 299 -23 Finland, permanent differences 20 % 17 -27 US, permanent differences 21 % -160 Tax expense before not recognised tax assets 13 593 14 690 Norway, change in deferred tax assets not recognised 22 % -11 284 -12 270 Denmark, change in deferred tax assets not recognised 22 % -546 1 860 Sweden, change in deferred tax assets not recognised 21 % -1 763 -4 297 Total taxes 0 -17 Effective tax rate 0,0 % 0,0 %
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
70
Basis for Deferred Tax Liabilities and Tax Assets (-)
Temporary Temporary Temporary differences differences differences 2024 Norway Sweden Denmark Total 2024 Amounts in NOK thousand Fixed assets 48 771 8 672 0 57 443 Other -9 591 0 0 -9 591 Total temporary differences 39 180 8 672 0 47 852 Tax losses carried forward -327 135 -97 975 -100 172 -525 282 Basis for temporary differences -287 955 -89 303 -100 172 -477 430 Unrecognised temporary differences 287 955 89 303 100 172 477 430 Total recognised temporary differences 0 0 0 0 Tax rate 22 % 21 % 22 % Recognised deferred tax liabilities and tax assets (-) 0 0 0 0 Temporary Temporary Temporary differences differences differences Total 2023 2023 Norway Sweden Denmark Restated Amounts in NOK thousand Intangible assets 24 886 10 212 0 35 098 Other 23 963 0 1 372 25 335 Total temporary differences 48 849 10 212 1 372 60 433 Tax losses carried forward -287 414 -83 698 -82 723 -453 835 Basis for temporary differences -238 565 -73 486 -81 351 -393 402 Unrecognised temporary differences 238 565 73 486 81 351 393 402 Total recognised temporary differences 0 0 0 0 Tax rate 22 % 21 % 22 % Recognised deferred tax liabilities and tax assets (-) 0 0 0 0 Deferred tax assets 0 0 0 0 Deferred tax liabilities 0 0 0 0
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
71
Change in Deferred Tax Assets and Deferred Tax Liabilities
Effect of Foreign Recognised in acquistion and currency profit and loss equity exchange Amounts in NOK thousand 01.01.2024 during the year transactions differences 31.12.2024 Intangible assets 7 579 4 906 31 12 516 Other 5 801 -7 911 -2 110 Tax losses carried forward -99 292 -10 588 -4 310 -114 190 Gross tax liabilities / assets (-) -85 913 -13 593 -4 279 -103 784 Deferred tax assets not recognised 84 234 13 593 4 279 103 784 Tax liabilities/assets (-) recognised 0 0 0 0 0
Effect of Foreign Recognised in acquistion and currency profit and loss equity exchange 31.12.2023 Amounts in NOK thousand 01.01.2023 during the year transactions differences Restated Intangible assets 6 698 710 170 7 579 Other 4 078 1 704 19 5 801 Tax losses carried forward -80 213 -17 104 -1 975 -99 292 Gross tax liabilities / assets (-) -69 437 -14 690 -1 786 -85 913 Deferred tax assets not recognised 69 437 13 011 1 786 84 234 Tax liabilities/assets (-) recognised 0 0 0 0 0
Use of Tax Losses Carried Forward
There is not any expiration date for the use of tax losses carried forward.
N O T E 2 3 – R E L A T E D P A R T I E S
Transactions and shared costs have historically been charged from the parent Company to its
subsidiary. In addition to Group companies, the group's related parties are: Key management
personnel, close members of the family of a person and entities that are controlled or jointly controlled
by any of these. Key management personnel are defined as the Board of Directors and the group
management. Transactions and balances within the Group are eliminated in the financial statements
and are not disclosed in this note.
Transactions and balances with related parties
Amounts in NOK thousand As at 31.12.2024 As at 31.12.2023 Operational Expenses Reiten&Co AS 750 1 500 Financial expenses Navamedic ASA 5 523 3 534 Trade payables and other current liabilities Reiten&Co AS 0 1 500 Interest bearing debt Navamedic ASA 38 317 49 149
Transactions and Balances with related parties includes transactions with Reiten&Co, 100% owned by R. Investment Company AS (RIC) and
Navamedic ASA as the largest shareholder after debt conversion. In accordance with the agreement made with Reiten & Co in 2023 for strategic
advisory services related to the Convatec transaction, the rights issue, and financial advisory, NOK 750,000 was expensed under this agreement in
H1 2024. In the Private placement in June 2024, RIC subscribed for the amount NOK 2,250 thousand.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
72
N O T E 2 4 – S H A R E H O L D E R I N F O R M A T I O N
Top shareholders at 31 December 2024
Rank Name Holding Stake 1 NAVAMEDIC ASA 45 109 765 15.62 % 2 R INVESTMENT COMPANY AS 31 553 565 10.92 % 3 JPB AS 17 564 944 6.08 % 4 ELI AS 13 263 298 4.59 % 4 SKØYEN INVEST AS 10 074 159 3.49 % 6 GINNY INVEST AS 9 250 000 3.20 % 7 F2 FUNDS AS 9 000 000 3.12 % 8 SILVERCOIN INDUSTRIES AS 8 296 150 2.87 % 9 ALPINE CAPITAL AS 7 482 036 2.59 % 10 BJØRNTVEDT, VEGARD 7 165 922 2.48 % 11 CAM AS 6 633 162 2.30 % 12 RO, LARS 6 266 626 2.17 % 13 PHILIP HOLDING AS 5 500 000 1.90 % 14 KING KONG INVEST AS 5 000 000 1.73 % 15 QUICK ISLAND INVEST AS 4 715 337 1.63 % 16 JOHANSSON, ERIC 4 250 000 1.47 % 17 WANGESTAD, ANDREAS 4 105 000 1.42 % 18 LIVERMORE INVEST AS 4 038 254 1.40 % 19 GUNERIUS PETTERSEN AS 3 725 000 1.29 % 20 LAPAS AS 3 468 311 1.20 % SUM TOP 20 SHAREHOLDERS 206 461 529 71.47 % OTHER SHAREHOLDERS 82 414 646 28.53 % Total 288 876 175 100.00 %
After the reverse share split on 14
January 2025, the total outstanding number of shares is 19 258 412 with a nominal value of 3.90 NOK.
Number of shares owned by board of directors and group management and at 31.12.2024 by primary insiders
Name Position Total shares 1Terje BakkenChairman of the Board 1 350 000 2Eskild EndrerudBoard Member 14 718 859 3Line TønnessenBoard Member 932 692 Jørgen Mann Chief Executive Officer 600 000 Johan M. Fagerli Chief Financial Officer 250 763 4Rune NystadChief Development Officer 1 662 483
1) Bakken represents R. Investment Company, at the Board of Directors. 1 250 000 of the Shares owned by Bakken are owned through his privately held company,
Kikinn Invest AS. 2) Endrerud represents the Company's third largest shareholders, ELI AS, at the Board of Directors. Endrerud owns 100% of ATHEND Holding AS.
ATHEND Holding AS owns 378,994 shares in the Company and 50% of the shares in SEED Capital AS, who owns 64,067 shares in the Company. SEED Capital AS
owns 91.932% of ELI AS, who owns 13,263,298 shares in the Company. In total, Eskild Endrerud indirectly owns 13,706,359 shares in the Company and directly
owns 1,012,500 shares in the Company.
3) Tønnessen represents the shareholder R. Investment Company, at the Board of Directors. The Shares owned by Tønnesen are owned by her directly. 4) The
shares are owned by US Holding AS who is 100% owned by Rune Nystad
Number of Share capital Share premium Movement in number of shares and share capital shares (NOK thousand) (NOK thousand) 1 January 2024 190 685 204 49 578 277 970 July/August 2024, Private placement 55 000 000 14 300 7 700 December 2024, Subsequent offering 2 303 933 599 323 December 2024, Debt conversion 40 887 038 10 631 5 724 31 December 2024 288 876 175 75 108 13 747
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
73
During 2024, Observe Medical ASA issued 98 190 971 new shares at a subscription price of NOK 0.40
per share, and at a nominal value of NOK 0.26. 57 303 933 shares were settled by cash and 40 887 038
shares were settled by conversion of loan.
N O T E 2 5 – E V E N T S A F T E R T H E R E P O R T I N G D A T E
The extraordinary general meeting was held on January 7 2025, amongst other, to adopt a consolidation
of the Company's shares (reverse share split) in the ratio 15:1 to meet the Oslo Stock Exchange's
requirement of a minimum market value of NOK 1 per share. The new number of outstanding shares is
19 258 412.
31 December 2024 288 876 175 January 2025, share issue rounding 5 Reverse share split ratio 15:1 - 269 617 773 14 January 2025 19 258 412
At 4 February 2025 board member Kathrine Gamborg Andreassen has informed the board of directors
of Observe Medical ASA that she will resign from the Company's board of directors, effective 5 February
2025, in order to focus on her responsibilities as CEO of Navamedic ASA. Following the resignation, the
board of directors will continue to constitute a quorum and is comprised of Terje Bakken (chair), Eskild
Endrerud (board member) and Line Tønnessen (board member).
At April 10 2025 Observe Medical announced that the Group has reached agreements in principle with
Convatec and Navamedic to reduce their debt position from in total NOK 82 million to NOK 41 million,
with an adjusted payment plan for the remaining debt. Such debt reduction is conditional upon injection
of new equity in the minimum amount of NOK 25 million and two milestone payments of NOK 10 million
each, after Sippi’s accumulated sales value reaches NOK 20 million and NOK 50 million.
The Company has been in constructive dialogue with existing shareholders and new investors who have
indicated a willingness to contribute equity in an amount of NOK 25 million, subject to debt reductions
being agreed. The agreements in principle with Convatec and Navamedic will partially cover the
requirements from such investors. Similar negotiations with smaller unsecured creditors is initiated and
ongoing.
Subsequent to the reporting period, the trade tensions and tariff measures between the US and certain
countries have continued to evolve. These developments could potentially affect the company’s supply
chain, cost structure, and market access. The company is actively monitoring the situation and assessing
its impact on operations.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
74
PARENT
COMPANY
ANNUAL FINANCIAL
STATEMENTS 2024
OBSERVE MEDICAL ASA
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
75
Observe Medical ASA
I N C O M E S T A T E M E N T
Amounts in NOK thousand
Note
2024
2023
Restated
Operating revenues
2 717
2 514
Other income
5
1 203
77
Total operating income
3 974
2 591
Personnel expenses
3
8 898
9 004
Other operating expenses
11
9 298
12 122
Operating expenses
18 196
21 126
Operating result before depreciation and
amortization (EBITDA)
-14 222
-18 535
Depreciation and amortization
14
396
589
Operating result (EBIT)
-14 618
-19 124
Financial income and expenses
Interest income from group companies
3 889
2 916
Financial income
10
3 409
1 979
Interest expense to group companies
-3 523
-3 718
Interest expenses
10
-5 997
-5 986
Financial expenses
10
-1 777
-4 408
Impairment of long-term assets
6,9,10
-4 355
0
Impairment of financial investments
12
-171 243
-189 002
Net financial items
10,13
-179 598
-198 218
Result before tax
-194 216
-217 342
Income tax expense
15
0
0
Result for the period
-194 216
-217 342
Brought forward
Uncovered losses
194 216
217 342
Net brought forward
-194 216
-217 342
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
76
Observe Medical ASA
B A L A N C E S H E E T
Amounts in NOK thousand
Note
31.12.2024
31.12.2023
Restated
ASSETS
Property, Plant and Equipment
Equipment and other movables
14
250
1 380
Non-current assets
Investments in subsidiaries
12,13
40 793
212 037
Loans to subsidiaries
9,13
53 992
50 118
Total non-current financial assets
94 785
262 155
Total non-current assets
95 035
263 535
Current assets
Receivables from group companies
13
1 738
970
Other receivables and prepaid expenses
467
591
Bank deposits
4
843
12 297
Total current assets
3 048
13 858
Total assets
98 083
277 393
EQUITY AND LIABILITIES
Share capital
75 108
49 578
Share premium
345 222
331 475
Other paid-in equity
-3 284
0
Total paid-in equity
417 046
381 053
Other equity
2 465
1 830
Uncovered losses
-411 559
-217 342
Total equity
7 952
165 541
Non-current liabilities
Liabilities to financial institutions
6
0
878
Contingent consideration
6
0
1 560
Non-current liabilities to group companies
6,9
41 905
49 876
Interest bearing non-current liabilities
6
38 376
49 912
Total non-current liabilities
80 281
102 226
Current liabilities
Trade payables
7
5 166
5 330
Public duties payable
7
319
707
Other current liabilities
7
4 364
3 590
Total current liabilities
9 849
9 627
Total liabilities
90 131
111 853
Total equity and liabilities
98 083
277 393
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
77
Oslo, May 29, 2025
The Board of Directors and CEO of Observe Medical ASA
Terje Bakken Line Tønnessen
Chair Board member
Eskild Endrerud Jørgen Mann
Board member CEO
Observe Medical ASA
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
78
E Q U I T Y
Amounts in NOK thousand
Share
capital
Share
premium
Other
paid-in
equity
Total paid-
in capital
Uncovered
losses
Total
Equity as at December 31, 2023
(Restated)
49 578
331 475
1 830
382 883
-217 342
165 541
Issued share capital
25 530
13 747
39 277
39 277
Transaction costs
-3 283
-3 283
-3 283
Cost of employee options
634
634
634
Net result for the period
-194 217
-194 217
Equity as at December 31, 2024
75 108
341 939
2 464
419 511
-411 559
7 952
Share capital:
NOK thousand
Shares
Par price
Share capital January 1, 2024
49 578
190 685 204
0.26
Changes
25 530
98 190 971
0.26
Share capital December 31, 2024
75 108
288 876 175
0.26
Refer to Note 24 in the Observe Medical group’s consolidated financial statement 2024 for shareholders’ information.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
79
Observe Medical ASA
C A S H F L O W S T A T E M E N T
Amounts in NOK thousand
Note
2024
2023
Restated
Cash flow from operating activities
Result before tax
-194 216
-217 342
Depreciation and impairment
175 598
589
Impairment
189 002
Gain(-)/Loss(+) from sale of fixed assets
-55
Interest expenses and change in contingent
consideration not paid
-818
-1041
Change in trade receivables and other receivables
340
-247
Change trade payables and other current liabilities
1 390
6 332
Net cash flow from operating activities
-12 357
-22 708
Cash flow from investment activities
Sales of tangible and intangible assets
790
518
Payments to subsidiaries
- 16 967
-7 786
Net cash flow used in investment activities
-16 177
-7 268
Cash flow from financing activities
Share issue
19 638
33 431
Transaction costs
-3 284
-4 980
Payment of loans
-2 378
0
Loans received
0
5 000
Net cash flow from financing activities
17 260
33 451
Exchange rate fluctuations
0
Change in bank deposits
-11 455
3 476
Bank deposits at the start of period
12 297
8 822
Bank deposits at the end of period
4
843
12 297
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
80
E X P L A N A T O R Y N O T E S T O
T H E A N N U A L F I N A N C I A L
S T A T E M E N T S 2 0 2 4
N O T E 1 - G E N E R A L
I N F O R M A T I O N
Observe Medical ASA is a Norwegian public listed
company incorporated on June 13, 2019 to own and
manage the Observe Medical business. Observe
Medical ASA was listed on Euronext Expand
(previously Oslo Axess) on November 4, 2019.
Observe Medical ASA holds 100% of all shares in its
subsidiaries Observe Medical AS, Observe Medical
AB, Observe Medical Nordic AB, Observe Medical
ApS and Biim Ultrasound AS. Observe Medical ASA
provides financing to entities in the Group.
The consolidated financial statements for Observe
Medical ASA (“OM group” or “the Group”), including
notes, for the year 2024 were approved by the Board
of Directors of Observe Medical ASA on May 29,
2025, and will be proposed to the Annual General
Meeting.
The financial statements for Observe Medical ASA
have been prepared in accordance with the
Norwegian Accounting Act and generally accepted
accounting principles in Norway (NGAAP).
Preparation of financial statements requires
management to make estimates and assumptions
that affect the reported amounts of assets, liabilities,
revenues and expenses as well as disclosures of
contingencies. Actual results may differ from
estimates.
Observe Medical ASA is registered and based in
Norway. Its head office is located in Dronning
Eufemias gate 16, 0191 Oslo, Norway.
Going Concern assumption and liquidity
The Company has prepared the financial
statements on the basis that it will continue to
operate as a going concern.
Based on current forecasts and working plans,
the Company’s working capital is not sufficient
to fund operations and payment of financial
obligations for the next 12 months from 31
December 2024. Going forward, the Company
will need to raise more equity, issue debt
instruments or divest assets to fund further
development of ongoing business.
The Company (the Group) continues talks with
potential financial providers and investors to
support further operations and growth with
equity and debt funding, in addition to working
with alternatives to reduce funding need. There
is a risk that adequate sources of funds may not
be available, or available at acceptable terms
and conditions, when needed. Therefore, there
is a material uncertainty with regards of the
going concern assumption.
The company has uncovered losses, as
disclosed in the financial statements under the
equity section
N O T E 2 – A C C O U N T I N G
P O L I C I E S
Shares in Subsidiaries
Shares in subsidiary are presented according to the
cost method. Dividends and group contribution will
be recognized in the financial statement when these
are proposed by the subsidiary. Shares in
subsidiaries are reviewed for impairment whenever
events or changes in circumstances indicate that the
carrying amount may exceed the fair value of the
investment. Indications may be operating losses or
adverse market conditions. If it is considered
probable that the fair value is below Observe
Medical’s carrying value, the investment is impaired.
The impairment will be reversed if the impairment
situation is no longer present.
Foreign Currency Transactions
The functional currency of Observe Medical ASA is
Norwegian kroner (NOK). Transactions in currencies
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
81
other than the functional currency are recorded at
the exchange rate at the date of the transaction.
Monetary items denominated in foreign currencies
are translated at the exchange rate at the balance
sheet date. Realized and unrealized currency gains
and losses on transactions, assets and liabilities,
denominated in a currency other than the functional
currency are included in financial income and
expenses.
Revenue
Revenue stems from sales of administrative services
to subsidiaries. These are recognized when the
services are delivered. Interest income is recognized
in the income statement as it is accrued.
Receivables
Trade receivables and short-term intercompany
receivables are recognized at nominal value, less the
accrual for expected losses of receivables. The
accrual for losses is based on an individual
assessment of each receivable.
Cash Deposits
Cash deposits include bank deposits as at end of the
reporting period. The cash held by Observe Medical
ASA reflects that most external bank deposits are
channeled through the group financing agreement.
Transparency Act
The company is committed to meeting its
requirements in a responsible manner. A due
diligence report, prepared in accordance with the
Act, will be published on the company’s website no
later than June 30.
Payables
Trade payables and short-term intercompany
payables are recognized at nominal value.
Financial Assets and Liabilities
Financial assets are initially recognized in the balance
sheet at fair value (cost) and subsequently at the
lower of cost or fair value. Financial liabilities are
initially recognized in the balance sheet at fair value
(cost) and subsequently at amortized cost.
Expenses
Expenses are recognized in the financial statement in
the period when the services or materials are
consumed.
Income Taxes
Income tax expense represents the sum of the tax
currently payable and deferred tax. The tax payable
is based on taxable profit for the year. Deferred tax is
calculated on the basis of tax-reducing and tax
increasing temporary differences that exist between
accounting and tax values, and the tax loss carried
forward at the end of the accounting year. Tax-
increasing and tax-reducing temporary differences
that reverse or may reverse in the same period are
set off and entered net. The net deferred tax
receivable is entered on the balance sheet to the
extent that it is likely that it can be utilized. Changes
resulting from amendments and revisions in tax laws
and tax rates are recognized when the new tax laws
or rates are adopted.
Classification and valuation of fixed assets
Fixed assets consist of assets intended for long-term
ownership and use. Fixed assets are valued at
acquisition cost less depreciation and write-downs.
Long-term liabilities are entered on the balance sheet
at the nominal amount at the time of the transaction.
Plant and equipment is capitalized and appreciated
over the economic lifetime of the asset. Significant
items of plant and equipment that consist of several
material components with different lifetimes are
broken down in order to establish different
depreciation periods for the different components.
Direct maintenance of plant and equipment is
expensed on an ongoing basis under operating
costs, while additions or improvements are added to
the asset’s cost price and depreciated in line with the
asset. Plant and equipment is written down to the
recoverable amount in the event of a fall in value that
is not expected to be temporary. The recoverable
amount is the higher of the net sales value and the
value in use. Value in use is the present value of
future cash flows related to the asset. The write-down
is reversed when the basis for the write-down is no
longer present.
2.2 Correction of errors
Observe Medical announced on the 14th of May
2025, that the Norwegian Financial Supervisory
Authority of Norway (NFSA) has concluded an
assessment of the 2023 financial statements and the
interim 2
nd
half 2024 figures. The NFSA assessment
was that there were misstatements in the annual
financial statements for 2023 and in the interim
financial statements for 2024. After discussions with
the NFSA, the Company assessed that the goodwill
write-down should be restated in the 2023
comparable figures. For the parent company
financial statements, the value of shares in the
subsidiary Biim Ultrasound AS of NOK 189,002
thousand have been written down NOK 0, with
relevant information provided in the notes to the
accounts.
As in group financial statements, a modification effect
from negotiated loans with Navamedic ASA in
November 2023 has been corrected in the 2023
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
82
comparable figures, resulting in increased interest
expenses and interest-bearing long-term debt by
NOK 0.8 million, and a proportional reversal of NOK
0.1 million for 2 months in 2023, reducing the interest
expenses and interest-bearing long-debt by the
same amount. The errors have been corrected by
restating each of the affected financial statement line
items for the prior periods as follows:
Impact on equity (increase / decrease (-) in equity)
(in NOK '1000) 31.12.2023:
Investment in subsidiaries
-189 002
Total non-current financial
assets
-189 002
Total non-current assets
-189 002
Total assets
-189 002
Non-current liabilities
763
Total non-current liabilities
763
Total liabilities
763
Net impact on equity
-189 765
N O T E 3 – S A L A R Y E X P E N S E S
Amounts in NOK thousand
2024
2023
Salaries
5 595
5 458
Fees to Board of Directors
1 300
1 320
Employment taxes
1 033
1 177
Pension insurance
325
526
Other benefits
645
523
Total salary expenses
8 898
9 004
At year end the company had 2 employees. The
company has a contribution pension scheme that
meets the requirement of the Norwegian Act of
Mandatory Occupational Pension. Jørgen Mann
replaced Rune Nystad as CEO in the company 29
th
of February 2024. Jørgen Mann is employed by the
Danish subsidiary Observe Medical ApS. CEO costs
including salary and expenses is invoiced to Observe
Medical ASA and affiliates according to principles for
internal transactions. For remuneration to the group
management, please refer to the consolidated
financial statement note 9.
Share option expenses of TNOK 634 for 2024 are
included in “Other Benefits”. The company is liable
for the social security tax, and it is expensed over the
estimated vesting period. See Note 10 in the Observe
Medical group’s consolidated financial statement
2024 for further information related to the share
options.
N O T E 4 – B A N K D E P O S I T S
Restricted cash (tax withholding account) is NOK 191
thousand.
N O T E 5 - R E V E N U E S A N D
O T H E R I N C O M E
Revenues from internal services to subsidiaries.
Indemnity settlement agreement related to the Biim
acquisition leading to other income of NOK 1.2
million in 2024.
N O T E 6 – N O N - C U R R E N T
L I A B I L I T I E S
Amounts in NOK thousand
2024
2023
Liabilities to financial institutions
0
878
Contingent consideration
2)
0
1 560
Interest bearing debt to Observe
Medical AB
41 905
49 876
Interest bearing debt to
Navamedic ASA
1)
38 376
49 149
Total non-current liabilities
80 281
101 463
1
Decrease in interest bearing debt from Navamedic ASA
from 2023 to 2024 due to conversion of loan to shares of
NOK 16 355 thousand, partly offset of accrued interest.
2
Contingent consideration: The remaining provision of NOK
1.5 million is reversed based on an assessment that neither
royalty nor milestone payments related to sales criteria will
be met for Sippi. Refer to note 21 in the consolidated
financial statements.
Loan Agreement with Navamedic ASA
The Company has two subordinated loan
agreements with Navamedic for loans with an
aggregate outstanding amount of NOK 38.3 million
(including interest) at the date of 31 December 2024
(the Navamedic Loans) after a conversion to share
capital of NOK 16.4 million.
On 6 December 2024, the Company and Navamedic
entered into an Addendum Agreement with respect
to the Navamedic Loans. Pursuant to the Addendum
Agreement, Navamedic converted NOK 16 354
815.20 of Navamedic Loan I to shares in the
Company (the Conversion Shares), at a subscription
price of NOK 0.40 per Conversion Share. The first
loan agreement, entered into on 27 September 2019,
has an outstanding principal amount of NOK 32.1
million including interest ("Navamedic Loan I"). The
second loan agreement, entered into on 6
September 2023, has an outstanding principal
amount of NOK 6.2 million including interest
("Navamedic Loan II"). Furthermore, the final maturity
dates of the Navamedic Loans are postponed from
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
83
31 January 2025 to 31 December 2027 ("Navamedic
Loan I") and 31 December 2027 ("Navamedic Loan
II") and a new amortization schedule will be applied
for Navamedic Loans. Following the addendum,
Observe Medical shall start paying interest on loan 1
from second quarter of 2025 and start paying
principal from 1 January 2026. The remaining
principal of NOK 15 000 000 is due at 31 December
2027. Observe Medical shall start paying interest on
loan 2 from second quarter of 2025. The remaining
principal of NOK 6 343 380 is due at 31 December
2027.
N O T E 7 – C U R R E N T
L I A B I L I T I E S
Amounts in NOK thousand
2024
2023
Trade payables
5 166
5 330
Public duties payable
319
707
Other liabilities
4 364
3 590
Total current liabilities
9 850
9 627
N O T E 8 – C U R R E N T A S S E T S
Amounts in NOK thousand
2024
2023
Other short-term receivables
467
591
Receivables from group
companies
1 738
970
Bank deposits
843
12 297
Total receivables
3 048
13 858
N O T E 9 – L O A N S T O G R O U P
C O M P A N I E S
Amounts in NOK thousand
2024
2023
Observe Medical ApS
5 341
2 831
Biim Ultrasound AS
39 193
39 469
Observe Medical AS
9 458
7 819
Total loans to group
companies
53 992
50 118
As per 31.12.2024, a provision for potential loss of
the loan to Biim Ultrasound AS was made of NOK
4 355 thousand. All group internal loans have a fixed
interest rate of 8.00% per annum. Accrued interest
shall monthly be capitalized and added to the
aggregate principal amount of the loans outstanding
under the loan agreement.
N O T E 10 – F I N A N C I A L
I N C O M E A N D E X P E N S E S
Amounts in NOK thousand
2024
2023
Interest income from group
companies
3 889
2 916
Net currency gain
1 849
0
Change in contingent consideration
1 560
1 979
Total financial income
7 298
4 895
Financial expenses
2024
2023
Restated
Interest expenses
1)
5 997
5 986
Interest expenses to group
companies
3 523
3 718
Other financial expenses and net
currency loss
1 777
4 408
Impairment of investment in
subsidiaries
171 243
189 002
Impairment of loan receivables
4 355
0
Total financial expenses
186 896
203 113
Net financial
income(+)/expenses (-)
-179 599
-198 218
1)
Interest expenses include modification effects of the
Navamedic loan of NOK 0.8 million in the 2023 restated
figures and a proportional reversal reducing the interest
expenses by the same amount in 2024. For renegotiation in
2024, a modification effect of negative 75 thousand is
included.
N O T E 1 1 – O T H E R O P E R A T I N G
E X P E N S E S
Amounts in NOK thousand
2024
2023
Audit services
2 193
2 006
Accounting and financial services
687
506
Consultants
1 213
2 772
IT expenses
647
651
Legal and professional fees
1 053
2 121
Other operating expenses
1 164
1 701
Stock exchange expenses
833
545
Travel expenses
86
237
Other group services
1 420
1 583
Total other operating expenses
9 298
12 122
Auditor
Audit fees expensed for 2024 amount to NOK 2 193
thousand ex VAT. Fees for other assurance services
amount to NOK 145 thousand
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
84
N O T E 1 2 – S U B S I D I A R I E S
Amounts in NOK thousand
Business office
Ownership
share
Carrying amount
December 31,
2024
Carrying amount
December 31,
2023 (Restated)
Observe Medical AB
3)
Gothenburg, Sweden
100%
40 743
123 011
Observe Medical ApS
3)
Herlev, Denmark
100%
0
80 247
Observe Medical AS
Oslo, Norway
100%
50
50
Observe Medical Nordic AB
1)
Gothenburg, Sweden
100%
0
8 729
Biim Ultrasound AS
2)
Oslo, Norway
100%
0
0
Total
40 793
212 037
1)
Since Observe Medical Nordic AB (formerly Sylak AB) is no longer an operating entity and its associated business has ceased,
the company is planned to be merged into Observe Medical AB, and there are no assets remaining in the company apart from a
loss carryforward. This has resulted in a write-down of shares of NOK 8 729 thousand.
2)
The carrying amount of the shares (NOK
189 million) has been written down to zero and restated to 2023 (with reference to note 2), as the recoverable amount based on
an impairment test indicates a potential loss in value. The remaining value of Biim in the parent company's accounts consists
solely of the loan receivable.
3)
The shares in Observe Medical AB (NOK 123.011 million) and Observe Medical ApS (NOK 80.247
million) have been assessed together, as their value is linked to the Sippi product. The total write-down of NOK 162.515 million
(NOK 82.268 million for OM AB and NOK 80.247 million for OM ApS) aligns with the equity value of the Sippi product in the
consolidated accounts.
N O T E 1 3 – R E L A T E D P A R T I E S
Amounts in NOK thousand
Income
Operating
expenses
Financial
income
Financial
expenses
Receivables
Liabilities
Navamedic ASA 1)
0
0
0
5 523
0
38 376
R Investment Company AS 2)
0
0
0
0
0
0
Reiten & Co AS 3)
0
750
0
0
0
0
Observe Medical AB
1 982
16
0
3 523
0
41 905
Observe Medical ApS
31
1 404
339
5
5 341
0
Observe Medical AS
0
0
664
0
9 458
0
Observe Medical Nordic AB
41
0
0
0
0
0
Biim Ultrasound AS
663
0
2 886
0
39 193
0
Total
2 717
2 170
3 889
9 046
54 042
80 281
1)
Navamedic ASA owned 15.62% of all shares in Observe Medical ASA as of 31 December 2024.
2)
R Investment Company AS
owned 10.92% of all shares in Observe Medical ASA as of 31 December 2024.
3)
Reiten&Co 100% owned by R Investment
Company AS (former IRIC), In accordance with the agreement made with Reiten & Co in 2023 for strategic advisory services
related to the Convatec transaction, the rights issue, and financial advisory, NOK 750,000 was expensed under this agreement
in 2024. In the Private placement in June 2024, IRIC subscribed for the amount NOK 2,250 thousand.
N O T E 1 4 – N O N - C U R R E N T A S S E T S
Amounts in NOK thousand
Intangible
assets
Plant
and machinery
Fixtures
and fittings
Total
Acquisition cost as of 01.01.24
635
1 225
506
2 366
Inflow purchased fixed assets
0
0
Outflow this year
0
1 225
1 225
Acquisition cost 31.12.24
635
0
506
1 141
Accumulated depreciation 31.12.24
388
0
503
891
Book value 31.12.24
247
0
3
250
This year's ordinary depreciations
212
123
61
396
Economic life
3 years
5 years
3 years
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
85
N O T E 1 5 – T A X E S
Amounts in NOK thousand
2024
2023
Restated
Income tax payable
0
0
Changes in deferred tax
0
0
Income tax expenses
0
0
Reconciliation from Nominal to Actual Tax Rate
Amounts in NOK thousand
2024
2023
Restated
Result before income tax
- 194 216
- 217 342
Permanent differences
9
172 317
189 002
Changes in temporary differences
88
52
Total taxable income
- 21 811
- 28 289
Expected income tax expenses, 22%
- 4 799
- 6 224
Specification of Tax Effect to Temporary Differences
Non-current assets
- 52
145
Current assets
-
-
Liabilities and provisions
-
-
Non-recognized tax asset
-
-
Tax losses carried forward
- 111 708
- 89 169
Not included in the deferred tax calculation
111 760
89 024
Deferred tax assets/liabilities in the balance sheet
0
0
Reconciliation of Deferred Tax Assets in the Balance Sheet
Deferred tax assets January 1
0
0
Change in deferred taxes recognized in income statement
0
0
Observe Medical ASA is the holding company in Observe Medical group and has no income-generating activities
other than group services and financing of group companies, as well as some consultancy services to related
parties. In order to capitalize deferred tax assets, the company must prove taxable income through earnings in
future years or through realistic tax adjustments that enable the benefit to be utilized.
Since the company expects losses in the coming years, the company considers that the conditions for capitalizing
deferred tax assets have not been fulfilled.
9
Related to impairment of shares and loan receivables, and transaction costs related to share issues
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
86
N O T E 1 6 – S U B S E Q U E N T E V E N T S
The extraordinary general meeting was held on January 7 2025, amongst other, to adopt a consolidation
of the Company's shares (reverse share split) in the ratio 15:1 to meet the Oslo Stock Exchange's
requirement of a minimum market value of NOK 1 per share. The new number of outstanding shares is
19 258 412.
31 December 2024
288 876 175
January 2025, share issue rounding
5
Reverse share split ratio 15:1
- 269 617 773
14 January 2025
19 258 412
At 4 February 2025 board member Kathrine Gamborg Andreassen has informed the board of directors
of Observe Medical ASA that she will resign from the Company's board of directors, effective 5 February
2025, in order to focus on her responsibilities as CEO of Navamedic ASA. Following the resignation, the
board of directors will continue to constitute a quorum and is comprised of Terje Bakken (chair), Eskild
Endrerud (board member) and Line Tønnessen (board member).
At April 10 2025 Observe Medical announced that the Group has reached agreements in principle with
Convatec and Navamedic to reduce their debt position from in total NOK 82 million to NOK 41 million,
with an adjusted payment plan for the remaining debt. Such debt reduction is conditional upon injection
of new equity in the minimum amount of NOK 25 million and two milestone payments of NOK 10 million
each, after Sippi’s accumulated sales value reaches NOK 20 million and NOK 50 million.
The Company has been in constructive dialogue with existing shareholders and new investors who have
indicated a willingness to contribute equity in an amount of NOK 25 million, subject to debt reductions
being agreed. The agreements in principle with Convatec and Navamedic will partially cover the
requirements from such investors. Similar negotiations with smaller unsecured creditors is initiated and
ongoing.
Subsequent to the reporting period, the trade tensions and tariff measures between the US and certain
countries have continued to evolve. These developments could potentially affect the company’s supply
chain, cost structure, and market access. The company is actively monitoring the situation and assessing
its impact on operations.
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87
AUDITOR’S
REPORT
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A L T E R N A T I V E
P E R F O R M A N C E
M E A S U R E S ( A P M S )
The consolidated financial statements are prepared in accordance with international financial reporting
standards (IFRS). In addition, management uses certain alternative performance measures (APMs). The
APMs are regularly reviewed by management and their aim is to enhance stakeholders' understanding
of the company's performance and financial position alongside IFRS measures. APMs should not be
considered as a substitute for, or superior to, measures of performance in accordance with IFRS. APMs
are calculated consistently over time and are based on financial data presented in accordance with IFRS
and other operational data as described and reconciled below. As APMs are not uniformly defined, the
APMs set out below might not be comparable to similarly labelled measures by other companies. The
current consolidated financial statements include the retrospective restatement of a prior period error.
The error is related to a financial liability not having been recognised for the obligation to acquire non-
controlling interests in a subsidiary. No APMs are affected by this restatement. The income statement
for previous periods is re-presented, see note 1 for further details. Affected APMs are re-presented
accordingly and Earnings per share (adjusted) for continuing operations is presented as an APM.
Gross result Operating revenues less direct cost of materials as cost price,
transportation and warehouse cost of materials for sale. Gross result is
a sub-total in the condensed consolidated statement of income.
Gross result adjusted Gross Profit adjusted for one-off items, non-recurring expenses such
as write-down
EBIT Earnings before net financial items, results from associates and joint
ventures and income tax. EBIT is a sub-total in the condensed
consolidated statement of income.
EBITDA adjusted EBITDA of the Company before any extraordinary or unusual one-time
non-recurring expenses or other charges as reflected in the Company's
audited consolidated financial statements for the year
EBITDA Earnings before interest, tax, depreciation and amortization. EBITDA is
asub-total in the condensed consolidated statement of comprehensive
income.
Operating expenses Employee benefit expenses plus other operating expenses.
Net interest-bearing debt Non-current and current interest bearing liabilities deducted bank
deposits
Equity ratio Total equity divided by total assets
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
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C O P Y R I G H T A N D
D I S C L A I M E R
C O P Y R I G H T
Copyright of all published material including photographs, drawings and images in this document
remains vested in Observe Medical and third-party contributors as appropriate. Accordingly, neither the
whole nor any part of this document shall be reproduced in any form nor used in any manner without
expressing prior permission and applicable acknowledgements. No trademark, copyright or other notice
shall be altered or removed from any reproduction.
D I S C L A I M E R
This report includes, among other things, forward-looking information and statements that are subject
to risks and uncertainties, which may cause actual results to differ from expectations. These statements
and this report are based on current expectations, estimates, and projections regarding economic
conditions. While Observe Medical ASA believes its expectations and assumptions are reasonable, there
is no guarantee that they will be achieved or that actual results will align with those outlined in the report.
Observe Medical ASA makes no representation or warranty, express or implied, regarding the accuracy,
reliability, or completeness of this report. Neither Observe Medical ASA nor any of its directors, officers,
or employees shall be liable for any use of the information contained herein.
Observe Medical ASA comprises several legally independent entities, each with its own distinct identity.
"Observe Medical" is used as a common brand or trademark for most of these entities. In this report,
the terms "Observe Medical," "we," or "us" may be used to refer collectively to Observe Medical
companies where appropriate, without specifying any particular entity.
OBSERVE MEDICAL ASA | ANNUAL REPORT 2024
95
IR Contacts
Jørgen Mann, CEO Johan M. Fagerli, CFO
+45 40 86 75 58 +47 958 12 765
jorgen.mann@observemedical.com johan.fagerli@observemedical.com
Address
Observe Medical ASA
Dronning Eufemias gate 16
Oslo, Norway
info@observemedical.com
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