deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to
bring their accounting policies into line with the Group’s accounting policies. All intra-group assets
and liabilities, equity, income, expenses and cash flows relating to transactions between members of
the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an
equity transaction.
If the Group loses control over a subsidiary, it ceases to recognize the related assets (including
goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain
or loss is recognized in statement of profit or loss. Any investment retained is recognized at fair
value.
2.5 Business combinations and intangible assets
Business combinations are accounted for using the acquisition method. The cost of an acquisition is
measured as the aggregate of the consideration transferred, which is measured at acquisition date
fair value, and the amount of any non-controlling interests in the acquiree. For each business
combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair
value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs
are expensed as incurred and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition date. This includes the separation of
embedded derivatives in host contracts by the acquiree.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a
financial liability are subsequently remeasured to fair value with changes in fair value recognized in
profit or loss.
Intangible assets comprising the patented technology were recognized at fair value at the date of
acquisition of Targovax OY (previous Oncos Therapeutics OY) July 2015. Until the development of the
patented technology is finalized no amortization is recorded and the carrying amount will be tested
for impairment at least once a year, or more often if there are indicators of impairment.
When finalized, the patented technology will be amortized by the straight-line method over the
estimated useful life.
2.6 Going concern
The Group works continuously to ensure financial flexibility in the short and long-term to achieve its
strategic and operational objectives. To date, the Group has financed its operations through private
placements, grants, borrowings, repair offerings and the initial public offering in connection with the
listing of the company’s shares on Oslo Stock Exchange in 2016.
In February 2023, Targovax announced that it has agreed the terms and conditions for a convertible
bond facility with Atlas Special Opportunities (“Atlas”) which will secure financing of up to gross
NOK 300 million over three years. The agreement was approved by an extraordinary general meeting
(EGM) of Targovax held 9 March 2023, please see Note 23. In March 2023, the Group announced
prioritization of resources toward its circRNA platform and, it is the view of the Board that the phase 2
study should only be pursued once a partner or additional source of financing can be secured. The
Board of Directors has confirmed that the conditions for assuming that the Company is a going
concern are present, and that the financial statements have been prepared based on this assumption.
3. Important accounting estimates and discretionary assessments
Management makes estimates and assumptions that affect the reported amounts of assets and
liabilities within the next financial year. Estimates and judgments 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.
Impairment of intangible assets
Where a finite useful life of the acquired intangible asset cannot be determined, the asset is not
subject to amortization, but is tested when indication, or at least annually for impairment. Acquired
intangible assets will not be subject to amortization until market authorization is obtained with the
regulatory authorities and the intangible assets are available for use. After market authorization, the
intangible assets will be amortized using the straight-line method to allocate their cost to their
residual values over their estimated useful lives.
Due to the Group’s prioritization of resources toward its circRNA platform announced in March 2023,
the acquired intangible assets related to development of the ONCOS-102 platform recognized in the
consolidated statement of financial position, were impaired from 391 MNOK to zero as per 31
December 2022. This is further described in Note 15.
Estimated value of share-based payments
At each balance sheet date, the Group revises its estimates of the number of options that are
expected to vest. It recognizes the impact of the revision to original estimates, if any, in the statement