The Financial Supervisory Authority of Norway (Finanstilsynet) published a supervisory report on its review of selected aspects of Hofseth Biocare ASA’s 2023 annual report. Finanstilsynet took the company’s explanations and accounting assessments into account, but expects identified deficiencies and inconsistencies to be corrected in future financial reporting, and considers the matter closed. The review focused on disclosures relevant to financing, liquidity and cash flows, including inconsistencies in lease liability disclosures, interest-rate information for lease liabilities, and the non-recognition and related disclosure of four EUR forward exchange contracts (nominal amount EUR 1.2 million; estimated total gain NOK 757,000) that the company stated it omitted based on materiality. It also covered classification and disclosure around a NOK 144 million amount presented as a shareholder loan (originating from trade payables and agreed to be converted to equity shortly after year-end) and related cash flow statement presentation, revenue recognition for historic “bill-and-hold” sales of water-soluble protein and calcium (contracted sales value NOK 64.035 million recognised in 2017–2019 while 330 tonnes remained in physical storage at 31 December 2023), and inconsistent descriptions of the investment in Hofseth Biocare Immunology Inc, which the company classifies as a joint venture and for which it recognised a net gain of about NOK 23.4 million on an in-kind contribution of patents and know-how. Finanstilsynet requested written, note-specific confirmation of how the lease, interest-rate and foreign exchange contract items are remedied in the 2024 annual accounts, no later than two weeks after publication of the 2024 annual report. It also reminded the issuer to assess its handling of inside information under the Market Abuse Regulation and copied the letter to the auditor and Oslo Stock Exchange.

Original source View in tracker