Page 1

25 April 2024

Annual Report 2023

Page 2

Annual Report 2023

CEO Statement .............................................................. 5

Directors’ Report ........................................................... 6

Management ............................................................... 21

Board of directors ........................................................ 22

Corporate Governance Report .................................... 24

Accounts and notes .................................................... 34

Accounts and notes .................................................... 80

Auditors report .......................................................... 108

Page 3

RNA therapeutics and cancer

immunotherapy are some of the fastest

growing fields in medicine

Immunotherapy has revolutionized cancer treatment over the past decade, Today,

millions of patients achieve long-lasting benefit from cancer immunotherapy, which

has grown into a market worth over USD 35bn in 2023.

RNA therapeutics are on the same trajectory, with the first successful mRNA

vaccines approved and broadly implemented for COVID-19 in 2021. mRNA vaccines

are just the tip of the iceberg of the overall therapeutic potential of RNA in new

disease areas to this new class of drugs. Circular RNA (circRNA) is emerging as

one of the most promising RNA formats, and Circio´s powerful and differentiated

circVec platform is uniquely positioned to unlock the potential of circRNA in gene

therapy.

About Circio

Circio Holding ASA (OSE: CRNA) is a biotechnology company developing novel

circular RNA gene therapies and immunotherapy medicines.

Circio has established a unique circular RNA (circRNA) platform for genetic

medicine. The proprietary circVec technology is based on a modular genetic

cassette design for efficient biogenesis of multifunctional circRNA from DNA

and viral vectors, which can be deployed in multiple disease settings. The

circVec platform has demonstrated enhanced and more durable protein

expression than classic mRNA vector systems, and has the potential to become

the new gold-standard for DNA and virus-based therapeutics in the future. The

circRNA R&D activities are being conducted by the wholly owned subsidiary

Circio AB based at the Karolinska Institute in Stockholm, Sweden.

In addition, Circio is developing a cancer vaccine, TG01, targeting KRAS driver

mutations. TG01 is currently being tested in three clinical trials: RAS-mutated

pancreatic cancer and lung and non-resectable pancreatic cancer in US, and

multiple myeloma in Norway. These studies are being run through academic

collaborative networks, supported by prestigious research grants from

Innovation Norway and the Norwegian Research Council, creating read-outs and

future optionality for the program at low cost to Circio.

Annual Report 2023

Page 5

CEO Statement

During 2023 we completed a turnaround to fully focus on

accelerating the circVec platform, and firmly establish Circio as a

leader in the emerging circular RNA space. With our circVec 2.1

design we have reached an important technical milestone,

outcompeting conventional mRNA expression for reporter

systems both in vitro and in vivo. We are committed to drive this

unique and powerful technology forward, with the aim to and

establish circVec as a new gold-standard expression system for

gene therapy and beyond.

Leading with ´CIRC´ in Circio

Under the leadership of CTO and circRNA discoverer Dr Thomas Hansen and

CSO Dr Victor Levitsky we have advanced our circVec system to generation 2.1,

which has demonstrated up to 10x enhanced protein expression vs. mRNA in

multiple settings. We have recently shown, in initial experiments, that this

powerful advantage can be maintained in vivo in mouse models for up to four

months , with statistically significant enhancement of protein expression from

circVec. This feature is particularly important in gene therapy where low

expression is a substantial hurdle for current approaches, and we are therefore

selecting genetic medicine as the lead application for our initial circVec

therapeutic candidates.

Still progressing in ´IO´

The TG01 cancer vaccine has returned to the clinic in an enhanced format.

Armed with a more powerful adjuvant, the same as GSK incorporates in its highly

successful shingles, malaria and RSV vaccines, improved dosing and multiple

new combination therapies, creating a broad scope of development and future

partnering opportunities for our mutant RAS TG01 program. During 2023, three

collaborative studies with internationally renowned experts opened for

enrolment, two in the USA and one in Norway. Consistent with our strategy of

advancing TG01 through collaborative efforts at low cost to Circio, all of these

studies are externally sponsored and involve multiple high-profile industry and

academic partners. On April 17 2024, Circio terminated its agreement with

IOVaxis to develop TG01 in China due to non-payment of license fees. This does

not affect the three collaborative studies described above.

Financing to support near-term progress and deliver long-term success

Following the presentation of robust technical

in vitro

data showing statistically

significant enhanced circVec vs mRNA reporter expression as well as

encouraging and additionally supportive in vivo data in mouse models, on 17

April 2024 Circio announced a plan to raise around NOK 50-60m in gross

proceeds from existing shareholders and new investors in a partially

underwritten rights issue to be completed during Q2 2024. This will provide

twelve months cash runway and enable Circio to deliver important pre-clinical

milestones for its novel circVec gene therapy formats, further enhancing and

expanding the platform towards circVec 3.0, and expand the intellectual property

portfolio to protect both the technology and its applications.

Looking ahead

The circVec platform can be deployed for a variety of applications, and as we

demonstrate this through our ongoing technical and

in vivo

experimental

program, we believe multiple avenues to partnerships will become available. The

techincal

in vivo

data package confirms the potential of the circVec platform, and

we are now moving forward to validate these promising data in therapeutically

relevant vector formats and disease models, with an AAV-based gene therapy for

Annual Report 2023

Page 6

AATD as the initial lead program. Based on our current data, plans and estimates,

we aim to enter our first strategic partnership in early 2025 and select a lead

therapeutic candidate for AATD by the middle of 2025.

The team and I are very excited to lead Circio forward to execute on the

opportunities that lay ahead.

Dr. Erik Digman Wiklund

CEO Circio Group

Annual Report 2023

Page 7

Directors’ Report

2023 was a challenging year for the biotech sector in general, and Circio was no exception. Despite

strong clinical data and a robust development plan endorsed by both KOLs and regulatory authorities,

it was not possible to secure the substantial funding required to bring the ONCOS-102 program

forward on a path to registration. As such, we were regrettably forced to make the tough decision to

halt ONCOS-102 development, and in parallel part with many talented and dedicated colleagues.

However, our agile and forward-looking management team were early to identify the substantial

opportunity that lies in circular RNA. When we first announced our circRNA program in late 2021, few

were aware of this novel RNA format. Today, circRNA has grown into one of the most promising

therapeutic concepts in the industry, with substantial recent deals and financings. Circio is one of the

early innovators in this emerging space and has in short time built the powerful and differentiated

circVec platform, which has the potential to disrupt current gold-standard mRNA technology in the

fields of genetic medicine and vaccines.

With a new strategy centered on building a next generation circRNA pipeline engine for gene therapy

and vaccines, it was a natural step to rebrand and reposition the company. The new company name

´Circio´ clearly puts circRNA at the front and center of what we do, with the IO symbolizing our

heritage in immunotherapy and continued commitment to our KRAS cancer vaccine program.

The new Circio requires a different toolbox, resource level and skillset. We have therefore

substantially restructured the management team, board, organization and corporate set-up, and

established an R&D hub at the Karolinska Institute campus in Stockholm. We have now put a strong

foundation in place from which to build a successful RNA platform company with a rich and

differentiated pipeline. For our shareholders, this has the advantage of a substantially reduced cost-

base and a broadened set of opportunities for value creation through both in-house development and

external partnerships.

We believe that we are well-positioned for the new Circio to be successful, both scientifically and

commercially. The management team, led by CEO and circRNA co-discoverer Dr Erik Digman Wiklund,

is forging ahead with several innovative gene therapy concepts, and we expect important pre-clinical

validation, further platform enhancement and business development milestones to materialize during

2024-25. The intended rights issue aiming to raise around NOK 50-60 million by Q2 2024 will provide

Circio with twelve months cash runway and enable us to deliver on these plans and create value for

existing and new shareholders. However, should this financing not be forthcoming, we must be clear

that we would face the risk that the company may not be a going concern, especially if the conditions

necessary to call tranches of under the Atlas Agreement (see later) are not met. The Board of

Directors is monitoring this situation closely with the management.

Strategy and strategic focus areas

Circio is a biotechnology company developing novel circular RNA and immunotherapy medicines,

with the aim to become the leader in vector-delivered circRNA therapeutics for genetic medicine. In

parallel, Circio intends to retain the value of its investments into the legacy mutant RAS program by

seeking low-cost development opportunities through commercial and academic partnerships. The

Group focuses its existing scientific and financial resources on accelerating the development of the

proprietary circVec platform to capitalize on its significant early-mover advantage in the rapidly

expanding fields of gene therapy and RNA therapeutics.

The Group’s strategy is to:

o Build a platform-engine for novel genetic medicine product candidates based on circVec-

delivery of circRNA;

o Further enhance and establish a robust IP portfolio protecting the design and applications

of the circVec platform;

o Identify target diseases with high unmet medical need and develop and test therapeutic

circVec candidates against these pre-clinically, with initial focus on AATD as the lead

program;

o Establish pre-clinical validation of circVec for AAV gene therapy vectors and novel DNA

delivery formats;

o Establish strategic partnerships to access complementary technologies that can broaden

and/or enhance the potential use of circVec;

o Explore and validate other potential applications of circVec, such as for vaccines and

oncology, and monetize these through external partnerships;

Annual Report 2023

Page 8

o Test the enhanced TG01 mutant RAS cancer vaccine in multiple cancer indications and

treatment combinations, supported through external collaborations and grant funding

Business and technology platforms

The Group develops novel circular RNA ("circRNA") and cancer immunotherapy medicines. The

Group's mission is to create a novel targeted, multi-functional circRNA therapeutics. Circio has

developed a differentiated, proprietary circRNA delivery platform named circVec. circVec is a DNA-

based vector system designed and optimized for efficient intra-cellular circRNA biogenesis to drive

robust and durable protein expression in patients. circVec has demonstrated statistically significant

enhanced protein expression vs conventional mRNA-based systems both

in vitro

and

in vivo

. Circio is

focusing on gene therapy as the primary application of the circVec technology, but is also exploring

expansion of the circVec platform into oncology, vaccines and cell therapy applications.

In addition, Circio is developing a cancer vaccine, TG01, targeting driver mutations in the RAS-family

of genes. TG01 is currently being tested in three clinical trials in in multiple myeloma, pancreatic and

lung cancer in the USA and Norway financed through external industry and academic partnerships.

circRNA Platform

Circio is a leader in circRNA, a promising emerging class of novel RNA therapeutics. circRNA offers

several advantages over mRNA, including substantially prolonged half-life and enhanced protein

expression. circRNA co-discoverer and pioneer Dr Thomas B Hansen, CTO at Circio, is building the

circVec platform technology together with an experienced scientific team located at the Karolinska

Institute in Stockholm, Sweden.

Circio has a unique, proprietary platform technology for circRNA delivery, circVec. circVec is a vector

system designed for efficient circRNA expression which has potential use in multiple disease areas.

circVec offers several advantages over synthetic circRNA approaches, including durability, scalability

and expression level, and has the potential to boost the potency of current gold-standard gene

therapy approaches. To date, technical proof-of-concept (PoC) has been established for the circVec

approach in multiple vector formats, demonstrating clear advantages over traditional mRNA-based

expression systems. Key design features for optimal circRNA biogenesis and high level of protein

expression have been identified and validated, and several patent applications covering the core

elements of the circVec concept have been filed to protect this powerful platform technology.

Pipeline and newsflow

Trials run and financed b

collaboration

artners

Annual Report 2023

Page 9

Circio is aiming to further expand and enhance the circVec platform, and to demonstrate the benefit

and versatility for several therapeutic applications in vivo during 2024. Following generation of robust,

statistically significant technical proof-of-concept

in vivo

, Circio is now exploring the design and

performance of circVec in relevant therapeutic vector formats and disease areas. The aim is to

generate

in vivo

proof-of-concept in disease models within the next twelve months, and subsequently

proceed towards selecting a lead candidate to bring forward towards clinical entry. Circio plans to

develop future therapeutic circVec candidates both in house and through partnering with

pharmaceutical companies.

Mutant KRAS platform

Oncogenic KRAS mutations drive around 30% of all cancers and are considered highly attractive

targets in cancer drug development. TG01 has shown promising efficacy in previous clinical trials,

including 6-month survival benefit over standard of care in surgically resected pancreatic cancer, and

TG01 has attained Orphan Drug Designation in pancreatic cancer in both the USA and Europe.

TG01 is currently being tested in three externally sponsored clinical trials in RAS-mutated pancreatic

cancer, lung cancer and multiple myeloma in the USA and Norway. These studies are being run

through academic and industry collaborative networks, supported by prestigious research grants

from Innovation Norway and the Norwegian Research Council, creating future optionality for the

program at low cost to Circio.

Surgically resected pancreatic Cancer

In March 2023, the first patient was dosed in the USA with TG01 in the combination study with PD-1

checkpoint inhibitor (CPI) balstilimab in mutant RAS pancreatic cancer. Oncogenic RAS mutations are

found in more than 90% of pancreatic cancer patients, but there are no approved therapies available

against this important genetic driver. As such, there is a major unmet medical need for novel,

effective agents to improve outcomes for pancreatic cancer patients.

The trial is led by gastrointestinal cancer expert Dr. Anup Kasi in a clinical collaboration between

Kansas University Cancer Center (KUCC), Agenus and Circio, and was the first study to dose a patient

with the TG01 vaccine enhanced by immune-stimulatory adjuvant QS-21 STIMULON

™

from Agenus.

In Dr. Kasi´s study, 24 pancreatic cancer patients who have detectable tumor DNA in the blood

following surgery and follow-up treatment will be randomly allocated to either TG/QS-21 vaccination

alone or vaccination combined with PD-1 CPI balstilimab. The aim is to evaluate whether mutant RAS

T-cell responses generated by TG01, and further boosted by QS-21 STIMULON and balstilimab, may

have the potential to eliminate remaining cancer cells to prolong time to relapse and extend patient

survival.

Multiple Myeloma

The enhanced TG01 vaccine is also being tested in a phase 1 trial at Oslo University Hospital (OUS)

evaluating TG01/QS-21 in RAS-mutated multiple myeloma (MM). Although 15-20% of multiple

myeloma patients harbor RAS driver mutations, there are currently no available RAS-targeted

treatment alternatives for this cancer indication, and the study thereby addresses a major unmet

medical need.

The trial is sponsored and funded by OUS and supported by the research grants from Innovation

Norway and the Norwegian Research Council. The trial is a collaboration between OUS, and Circio

and is testing TG01 vaccination as a maintenance monotherapy in 20 KRAS or NRAS mutated MM

patients who continue to have measurable disease after completion of SoC treatment. The study is

led by multiple myeloma expert Dr. Fredrik Schjesvold. In December 2023, the trial passed the

planned safety cohort review without any concerns, and the study is open for full enrollment of twenty

patients in total.

Lung and Pancreatic Cancer

In November 2023, Circio announced a new study at Georgetown University in Washington D.C., USA,

as part of a research collaboration agreement with Janssen and Bristol Myers Squibb (BMS) to test

its drug candidate TG01 in a triple combination regimen with daratumumab (anti-CD38) and

nivolumab (anti-PD1) in patients with RAS-mutated pancreatic and lung cancers. The study will be the

first time TG01 is tested in a broader immunotherapy regimen designed to overcome resistance to

anti-PD-1 checkpoint blockade.

The trial is sponsored by Georgetown University with funding from Janssen. The triple therapy

combination will be tested in 54 patients in total, 27 immunotherapy-naïve KRAS-mutated patients

with pancreatic cancer and 27 KRAS-mutated patients with NSCLC who have progressed on prior

anti-PD1 therapy. The study opened in December 2023, and the first patient was dosed in early 2024.

IPR / Market exclusivity

Circio´s patent portfolio is designed to protect the technological platform and specific drug

candidates and their therapeutic applications, and includes several families of patents and patent

applications covering drug compositions and relevant combination therapies. Following successful

pre-clinical circRNA generation and design research, patent applications covering critical aspects of

the circVec platform and applications have been filed. Further development and optimization are

continuously ongoing and new patent applications will be filed to broaden and strengthen the IP

protection of the unique circVec platform.

Important events in 2023

In February, agreed the terms and conditions for a convertible bond facility with Atlas

Special Opportunities (“Atlas”) with the aim of securing financing of up to gross NOK 300

million over three years, subject to certain conditions.

In March, the extraordinary general meeting (EGM) of Circio approved the Atlas agreement.

In March, requested Atlas to subscribe and pay for the first tranche of convertible bonds

with an aggregate principal amount equal to NOK 37,500,000.

In March, dosed the first patient with cancer vaccine TG01 in the combination study with

PD-1 checkpoint inhibitor (CPI) balstilimab in mutant RAS pancreatic cancer in the USA.

In March, announced the circRNA platform to be the main focus of the company to

capitalize on its early-mover advantage and globally competitive position. The development

of ONCOS-102 was put on hold subject to further funding or partnering. Later it was

communicated that development stopped.

In April, the AGM approved to change the name of the company to Circio to reflect the

strategic shift in the portfolio and the focus on the circVec circRNA platform.

In April, presented circRNA R&D development in the poster “

circAde: a circRNA-based

system for prolonged and more effective treatment

of cancer” at the AACR Annual Meeting

in April 2023, in Orlando, USA.

In June, dosed the first patient with cancer vaccine TG01 in the multiple myeloma study at

Oslo University Hospital

In June, Circio started the reorganization process to streamline operations and reduce

costs to focus resources on developing the new circVec platform.

In October, presented powerful circVec 2.0 generation expression data in the poster

“circVec: a versatile circular RNA vector cassette for enhanced and durable intra-cellular

protein expression” at the European Society of Gene and Cell Therapy (ESGCT) Annual

Meeting in Brussels in October 2023.

In November, announced a collaboration with Georgetown University, Janssen and BMS to

test the combination of TG01 mutant RAS vaccination with daratumumab and nivolumab in

immunotherapy resistant patients with RAS-mutated pancreatic and lung cancer.

In November, announced that the European Patent Office (EPO) board of appeal has moved

to revoke the EU Patent 3140320 “Peptide vaccine comprising mutant RAS peptide and

chemotherapeutic agent”.

In December, completed the planned safety cohort review in the TG01 study at Oslo

University Hospital with no concerns reported, and the study opened for full enrollment.

Important events after balance sheet date

In January 2024, it was announced that Business Finland has approved Circio’s application

for a waiver in full of three R&D loans totaling EUR 6.2 million granted for the development

of ONCOS-102. As a result, Circio’s equity will be increased by a corresponding amount.

In March 2024, following the approval by the Chinese National Medical Products

Administration (NMPA) of the investigational new drug (IND) application, IOVaxis exercised

the option for an exclusive license to mutant RAS cancer vaccine TG01 in China. The

parties agreed that IOVaxis will pay USD 300.000 of the USD 3.000.000 option fee to Circio

immediately, and that the remaining payment to be due by 15 September 2024.

In April 2024, announced that it has terminated TG01 cancer vaccine license option

agreement with IOVaxis in China for non-payment. IOVaxis did not met the first financial

payment milestone and Circio therefore decided to terminate the TG01 license agreement

in China and the Group will now seek alternative partnering options in China for the TG01

program.

In April 2024, announced that it is initiating a fundraising process with the intent to raise

around NOK 50-60 million or more in gross proceeds from existing shareholders and new

investors in a partially underwritten rights issue to be completed during Q2 2024. Existing

convertible bond investor Atlas Capital Markets is supportive of, and intends to participate

in, the intended fundraising. Members of Circio´s board and management have pre-

committed to participate with around NOK 2 million, including NOK 500.000 by CEO Dr. Erik

D Wiklund. Circio will update the market in due time when the structure and timing of the

intended transaction have been determined.

In April 2024, announced that it has established early technical in vivo proof-of-concept for

its proprietary circVec circular RNA platform by demonstrating statistically significant

improvement in durability over mRNA-based expression. The circVec technology has broad

potential, particularly to enhance the potency and reduce cost of current gold-standard

gene therapy, and the R&D strategy is centered on this rapidly expanding therapeutic area.

Annual Report 2023

Page 11

Key figures in the consolidated accounts

In February 2023, Circio announced that it has agreed the terms and conditions for an investment and

subscription agreement for a convertible bond facility with Atlas Special Opportunities (the

"Investment Agreement"), which will provide financing of up to gross NOK 300 million over three

years. The Investment Agreement was approved at an extraordinary general meeting ("EGM”) of

Circio held in March 2023, and an amendment agreement was later approved at an EGM in

September.

The financing agreement with Atlas was entered into to enable Circio to support and progress its two

R&D programs until important data can be generated and other sources of financing become

available:

Platform development, generation of

in vitro

and

in vivo

proof-of-concept data, and filing of

patent applications for Circio´s unique circRNA program, an area of rapidly growing interest

among big pharma and biotech

Supporting three clinical trials with the enhanced TG01/QS-21 KRAS cancer vaccine led by

academic centers in Norway and the USA

The financing is made available to Circio through tranches of convertible bonds. For each tranche,

Circio needs to demonstrate that it complies with all condition precedents which are a combination

of legal, regulatory and financial conditions. The first tranche, with an aggregate nominal value of

NOK 37.5 million, was exercised in March 2023. The second tranche of NOK 21.5 million, was

exercised in August 2023 and issued in three installments of NOK 7.5 million, NOK 7 million and NOK

7 million, in September, October and December 2023 respectively. The cool down period after the

second tranche ended on 1 March 2024.

If all condition precedents are met, it is at Circio

’

s discretion to decide when and how many

tranches are called upon over the 3-year agreement period, thereby providing flexible access to

capital. In the amended Investment Agreement approved at the EGM in September 2023, it was

agreed to change the bond denomination to NOK 500,000 and Atlas was granted a one-time option to

request convertible bonds in an amount of up to NOK 30 million, valid for a period of 24 months after

approval in September 2023.

The convertible bonds are subscribed at 92 percent of nominal value of each convertible bond and

would provide Circio with a total net amount of up to NOK 276 million in new capital. From these net

proceeds, Circio needs to pay legal, administrative and other fees so that the net proceeds are slightly

reduced. The bonds will not carry any interest and can be converted into shares at the discretion of

Atlas, at a price determined as 100 percent of the average volume weighted share price (VWAP) of

three of the last 15 trading days preceding the bond conversion request by Atlas. After conversion,

Atlas may sell the Circio shares in the market subject to certain pre-defined restrictions. Circio retains

the right to repurchase unconverted bonds at any time at 110 percent of nominal value.

Income statement (2022 figures in brackets)

In 2023 Circio had no core business revenue. Other revenue was NOK 0.1 million (NOK 10.0 million)

Total operating expenses for the full year 2023 amounted to NOK 101.0 million (NOK 503.6 million).

The operating expenses are reported net of governmental grants which amounted to NOK 1.8 for the

full year 2023 (NOK 4.8 million).

Research and development expenses were NOK 49.9 million (NOK 47.2 million) for the full year 2023.

Research and development expenses were driven primarily by preparation costs for starting clinical

trials and manufacturing of clinical supplies.

Payroll and other employee related costs were NOK 34.4 million for the full year 2023 (NOK 52.2

million). The decrease in personnel expenses is a reflection of the restructuring and reduction in team

size. The full effect of these changes started to take effect in 4Q 2023 and will continue in 2024.

Other operating expenses amounted to NOK 14.5 million (NOK 11.5 million) for the full year 2023. The

increase in operating expenses in 2023 compared to 2022 is mainly due to loss of sale of assets.

The Depreciation, amortizations and write downs amounted to NOK 1.8 million (NOK 392.7 million)

for the full year 2023.

The operating loss for the full year of 2023 was NOK 100.5 million (NOK 493.6 million).

Net financial items amounted to a loss of NOK 10.2 million (loss of NOK 1.7 million) for the full year

2023, of which NOK 8.2 million relates to fees for the convertible loan facility and NOK 3.5 relates to

interest expenses for the Business Finland loans.

Losses after tax for the full year were NOK 110.7 million (NOK 432.9 million).

Cash flow

Net cash flow from operating activities was negative NOK 89.2 million for the full year 2023 (negative

NOK 108.8 million), mainly driven by activities in research and development.

Annual Report 2023

Page 12

Net cash flow from investing activities was positive NOK 2.9 million for the full year 2023 (negative

NOK 4.9 million), mainly due to the sale of equipment.

Net cash flow from financing activities was NOK 41.9 million for the full year 2023 (negative NOK 4.3

million), mainly due to the convertible loan facility.

Cash and cash equivalents were NOK 22.3 million on 31 December 2023 compared to NOK 66.0

million on 31 December 2022.

Financial position

Total assets as of 31 December 2023 decreased to NOK 28.1 million from NOK 100.4 million on 31

December 2022 mainly due to lower cash balance from operational activities.

Total current assets amounted to NOK 28.1 million (NOK 94.1 million), of which cash and cash

equivalents amounted to NOK 22.3 million (NOK 66.0 million).

Total non-current assets were NOK 0 million (NOK 6.3 million).

Shareholders’ equity amounted to negative NOK 96.3 million at the end of 2023, decreased from NOK

2.6 million in 2022. The equity ratio amounted to negative 342.4 percent in 2023 compared to 2.56

percent in 2022.

Going concern

The financial statements for 2023 have been prepared under the going concern assumption, as

stipulated in Section 3.3a of the Norwegian Accounting Act. As of 31 December 2023, the equity of

the Company was less than 50% of the Company's share capital. Pursuant to section 3-

5 of the Norwegian Public Limited Liability Companies Act (the "Companies Act"), the board of

directors has a duty to implement measures if the Company's equity is less than half of the share

capital. Therefore, the board has assessed its duty in accordance with the Companies Act section 3-

The board is aware of the situation regarding insufficient equity and has implemented the necessary

measures to turn the negative equity into positive. The granted waiver of the Business Finland loan

will, when all conditions are fulfilled in second half of 2024, result in a corresponding increase in

equity. Further, in April the Group announced the plan for an intended rights issue during the second

quarter of 2024. These two measures, if successful, will turn the equity of the Group positive.

The Group intends to raise around NOK 50-60 million in Q2 2024. A process to undertake a partially

underwritten rights issue was initiated on 17 April 2024 with Redeye as financial advisor. Atlas is

supportive of and intends to participate in the financing and the members of the board and

management have pre-committed to participate with approximately NOK 2 million in the fundraising.

The rights issue will, if successful, provide Circio with a cash runway to Q2 2025. We believe this

timeframe should enable delivery of major pre-clinical circVec milestones, including in vivo proof-of-

concept for its lead AAV gene therapy program in AATD and generation of circVec platform data with

the aim to put Circio in position to enter its first revenue-generating business development deal.

The Board and management therefore have a reasonable expectation that sufficient capital to ensure

continued operations in the twelve months as of 31 December 2023 will be secured from existing

shareholders and new investors, however, there is no guarantee that the planned rights issue

transaction will be successfully completed. The rights issue will be subject to approval by the general

assembly within 30 June 2024.

The convertible bond facility with Atlas, which provides the Group with access to up to gross NOK

300 million over three years will, if the rights issue is successfully completed, become a back-up

financing facility only. If the rights issue should not be successful, Circio will enter into a dialogue

with Atlas to access interim financing from the convertible facility until a new fundraising attempt can

be initiated during 2H 2024. The Group's right to call on any subsequent tranches of bonds, and Atlas'

obligation to subscribe and pay for such bonds, are conditional on meeting the conditions precedent

set out in the Investment Agreement at the time of calling on a tranche. Currently, the conditions

precedent related to the minimum market capitalization of Circio Holding ASA and the monthly

trading value of Circio shares are not met. Consequently, there is no guarantee that the Group will be

able to access additional funding from Atlas in a situation as described above.

The unknown outcome of the rights issue transaction, and uncertainty around access to further Atlas

tranches, indicate that a material uncertainty exists that may cast significant doubt on the Company’s

and the Group’s ability to continue as a going concern.

Risk factors and risk management

Circio is subject to several operational and financial risk factors and uncertainties which can affect

parts or all activities of the group. The Group proactively manages such risks, and management and

the Board of Directors regularly analyze operations and potential risk factors to take measures to

reduce risk exposure.

Annual Report 2023

Page 13

Operational risk

Circio

’

s activity is research and development of novel pharmaceutical medicines. The development

of pharmaceuticals goes through several preclinical and clinical stages before commercialization and

there is a high risk of failure throughout the process.

In 2023, the Group changed its strategy to focus on circular RNA, a novel technology with great

potential to create new drug treatments for patients. The technology is still at an early preclinical

stage, where according to historic industry standards for drug discovery and development, there is

more than 90% chance of failing.

While the management and the Board of Directors believe that the

Group has a strategy with a higher likelihood of success, there are many open questions and risks

along each step of the drug development path, and not all are possible to predict or control and which

may negatively affect the outcome of our drug development.

CircRNA in general, and the circVec vector system specifically, is a novel drug modality which has

never been tested in humans. Results from the Group's preclinical and clinical trials will be essential

to document its safety and efficacy. DNA and viral therapeutics have been tested in numerous clinical

studies, and several viral drug products have been approved and are used in a range of indications,

including cancer, gene therapy for rare disease and vaccines, where the Group is focusing its

development. However, several safety risks still exist for the DNA and virally based vector formats

being explored by the Group, and these need to be investigated to be excluded.

Generally, delays in experimental work with and for preclinical studies are not uncommon and add,

delays, additional costs, and risk. DNA synthesis, manufacturing, and quality controls for Circio’s

experimental circVec platform are under development and unforeseen issues and delays could have

an impact on ongoing and planned preclinical studies.

As Circio

’

s preclinical studies and clinical trials depend on both the performance, funding and

technology from external partners for completion, uncertainties append to these partners

’

ability,

capacity, availability and willingness to carry out the studies.

The research and development of novel pharmaceuticals is time consuming, costly and involves high

risk, and as Circio depends on third parties to conduct several of its preclinical studies, delays or

other unforeseen issues outside of Circio’s control may occur. Such delays or issues may delay or

increase the cost of preclinical and clinical studies and additional capital requirements might arise.

The group is also in early clinical development for the TG platform. While the results from earlier

clinical trials with TG01 were promising, they may not be predictive of the results in later-stage

clinical trials where the drug is tested in a larger group of patients. In order to increase the chances

of therapeutic success, the Group has improved the formulation of TG01 and added a more potent

adjuvant called QS-21 which is commercially validated in other vaccines. Changes in the standard of

care from initiation to completion of a clinical trial is also a risk factor which may negatively affect the

approval or commercial success of TG01.

Circio also conducts its clinical collaboration trials in combination with third party medicines. Limited

access or any other constraints in terms of use of such products, including unexpected drug-drug

interactions, may adversely impact the progress or clinical development of the trials and products.

The ongoing clinical collaboration trials include cancer patients. Circio puts great emphasis on the

safety of these individuals in accordance with regulatory standards and framework for the

development of pharmaceuticals. Recruitment of patients may be delayed due to patients’ lack of

willingness to participate, competing trials and doctors’ divergent priorities.

The success of the Group will depend in part on Circio´s ability to protect its intellectual property and

know-how. To date, Circio holds certain exclusive granted patent rights and has filed several patent

applications, however, uncertainties related to predicting the scope and strength of the protection

from its patent estate and the risk and challenges including patent invalidations that may be caused

by third parties. The biopharmaceutical industry is characterized by intense competition and rapid

innovation. The Group's competitors may be able to develop other compounds or drugs that are able

to achieve similar or better results and/or file patents which will restrict Circio’s freedom to operate

and commercialize future medicine. Should that be the case, Circio will either challenge those patents

or negotiate to take a license.

Financial risks

Active monitoring of risks related to financial developments or activities is secured through control of

financial reporting. This is achieved through day-to-day follow-up by management, supervised by the

Board of Directors, through periodical reporting and evaluation. Non-conformance and improvement

opportunities are followed up and corrective measures implemented continuously.

Being an early phase research and development group, Circio is accumulating financial losses.

Operating losses are expected to persist and grow during the research and development phases of

the Groups’ products, and cash generating operations are not expected until one or more of the

group’s products are commercialized in the far future, or licensed or sold earlier to pharmaceutical

partner companies.

Funding of ongoing operations is and will depend on external sources for the foreseeable future,

mainly equity contributions. Significant changes to financial market conditions can affect the climate

Annual Report 2023

Page 14

and willingness for investor investments. The Group continuously faces the risk that adequate

sources of funding may not be available when needed or may not be available at favorable terms.

The Group continuously works with potential investors and partners to obtain the required funding for

its operations, and as announced on 17 April 2024, the Group intends to raise around NOK 50-60

million in Q2 2024 through a partially underwritten rights issue.

If the Group is unable to obtain adequate financing through the initiated rights issue process, or any

other potential financing option, during Q2 2024, it may be forced to delay, reduce or terminate its

R&D programs.

The convertible bond facility with Atlas, which will become a back-up financing option subsequent of

a successful financing during Q2 2024, provides the Group with access to up to gross NOK 300

million over three years. The Group's right to call on any subsequent tranches of bonds, and Atlas'

obligation to subscribe and pay for such bonds, are conditional on meeting the conditions precedent

set out in the Investment Agreement at the time of calling on a tranche. Currently, the conditions

precedent related to the minimum market capitalization of Circio Holding ASA and the monthly

trading value of Circio shares are not met.

In any future situation where the Group would want to request additional funding under the

Investment Agreement with Atlas and the conditions precedents are not met, the Group may not be

able to obtain the requested funding from Atlas. In such a scenario, the Group will enter into

negotiations with Atlas to address the issues and enable access to future tranches, for example by

reducing the tranche size and/or implementing modifications to the Investment Agreement. While the

company has been successful with this strategy in 2023, there is no guarantee that it will also work in

2024.

To maintain and expand the Group’s base of potential investors and securing access to risk capital

when needed, Circio´s management continuously presents and promotes Circio through investor road

shows, 1-to-1 meetings and participation in industry- and investor seminars.

Future interest rate fluctuations may affect the Group’s business, financial condition, results of

operations, cash flows, time to market and prospects. Currently, the Group has no long-term debt. On

18 January 2024, the Company announced that the debt to Business Finland has been approved to be

waived in full, subject to certain conditions expected to be fulfilled during first half of 2024. The debt

to Business Finland is classified as short-term debt as per 31 December 2023.

Fluctuations in exchange rates affect the Group’s cash flow and financial condition as many

collaborators are being paid in foreign currencies. The currency exposure includes both transaction

risk and risk related to paying operating expenses.

Transaction risk arises when future commercial transactions or recognized assets or liabilities are

denominated in a currency that is not the entity’s functional currency. The Group undertakes various

transactions in foreign currencies and is consequently exposed to fluctuations in exchange rates. The

exposure arises largely from research expenses. The group is mainly exposed to fluctuations in EUR,

GBP, USD and CHF. Translation risk in the Group arises when amounts denominated in foreign

currencies are converted to NOK, the Group’s reporting and functional currency. In 2023, the Targovax

Oy subsidiaries has EUR as its reporting and functional currency and the Circio AB entity has SEK as

its reporting and functional currency.

Circio has costs and payments in several currencies, EUR, SEK and USD are the most prominent

foreign currencies. Cash inflow takes place in NOK through capital increases. Circio manages

currency risk by matching expected outflows with holdings in all major currencies.

Circio has signed a liability insurance which covers the CEO, the Board of Directors, management, and

any other former or present employee with independent management responsibility in Circio Holding

ASA and its subsidiaries. The insurance covers NOK 25,000,000 per claim and in total during the

insurance period, world-wide including USA and Canada.

Market developments

Overall pharmaceutical market

The IQVIA Institute stated that the global pharmaceutical market in 2023 will be USD 1.5 trillion. Over

the coming years the market is expected to grow by 4-5% CAGR. The U.S. share of the global pharma

market is close to 50% at USD700 billion in 2023, while the European market represents USD225

billion, and the China pharmaceutical market is at USD 170 billion in 2023.

The cancer market

General

The global market for cancer medicines is expected to grow to USD 175 billion by 2025 according to

Allied Marked Research The market for cancer immunotherapy was estimated to grow strongly with

the introduction of new medicines and reach up to USD130 billion by 2025. Cancer immunotherapy

Annual Report 2023

Page 15

already accounts for over 50% of the cancer medicine market and the share is projected to increase

over the coming years.

Types of cancer treatment

The cancer therapy (oncology) market is highly diversified, complex and competitive but dominated

by combination treatments which include checkpoint inhibitors (CPI) which target PD-1. The optimal

cancer treatment should be selected depending on the type, stage and profile of the cancer, as well

as the patient’s overall physical condition. Traditionally, surgery, chemotherapy, radiation therapy and

hormone therapy are among the most common treatments. However, new and innovative approaches

like targeted therapies and CPI immunotherapy are highly utilized for the treatment of cancer.

Immunotherapy

Immunotherapy is a form of therapy designed to activate a patient’s immune system to attack and kill

cancer cells. The immune system can be utilized in several ways, but the most common is to

stimulate or “boost” the immune response and to recognize cancer cells as bad or foreign cells which

need to be removed. This can be achieved by giving CPI antibodies, immune activators or potentially

in the future cancer vaccines such as TG-01 with adjuvants. Immunotherapy is now an important

form of treatment in the fight against many types of cancer and there was positive news for cancer

vaccines in clinical development in 2023.

Gene Therapy or Rare Diseases

The first gene therapy medicine was approved in 2018 by the FDA and since then the market has

expanded steadily but slowly with new product approvals. Most gene therapies use adeno-associated

viruses (AAV) for delivery, though other viruses are being tested and have been approved. The

market for gene therapy is expected to grow from 18

–

28 % per year, fueled by novel medicines

based on pioneering research and transformative innovations. With a growing understanding of

genetics and advancements in technology, the potential for gene therapy to address rare diseases is

becoming increasingly apparent and commercially attractive. The expansion to many rare diseases

though is limited by the safety concerns and high manufacturing costs which are caused by the high

viral load due to the low or temporary protein production from the transgene using linear mRNA;

challenges which the Company´s circVec technology is designed to address.

The past years have seen a surge in investment and collaboration within the pharmaceutical and

biotechnology sectors, driving forward the development of novel treatments for a wide array of rare

genetic disorders. Regulatory agencies are actively engaging with stakeholders to streamline

approval processes, and the FDA has publicly announced that accelerated drug approval could

become the standard pathway to bring new gene or rare therapies to patients. While there is a range

of market estimates for gene therapies, ranging from USD 18 to 30 billion in 2030, all are unified that

gene therapy is a fast growing and expanding market with the need for new technologies and

represents an enormous opportunity for small and innovative biotech companies.

Organization

The Group’s management team at year-end consisted of Erik Digman Wiklund, CEO, Lubor Gaal, Chief

Financial Officer, Victor Levitsky, Chief Scientific Officer, Thomas Birkballe Hansen, Chief Technology

Officer and Ola Melin, Chief Operating Officer. In 2023, the management team was reorganized with

Lone Ottesen, Ingunn Munch and Margrete Margrethe Sørgaard leaving to take up new external roles.

In 4Q, the remaining management team and the administration team in Norway have taken a

temporary pay reduction as a cost-saving initiative.

The Board of Directors held 17 meetings in 2023. All members of the Board of Directors are

shareholder-elected. As a result of a change in strategic focus during 2023 and after discussions with

the Nomination Committee, the three Directors Bente-Lill Romøren, Sonia Quaratino and Raphael

Clynes tendered their resignations from Circio’s Board in October 2023. At the end of 2023, the

members of the Board of Directors were Damian Marron (Chairperson), Robert Burns, Diane Mellett

and Thomas Falck.

Circio has offices in Oslo, Norway and in Hässelby, Sweden.

Corporate social responsibility

Circio Holding ASA is a biotechnology company developing novel circular RNA and immunotherapy

medicines. Circio has established a unique circular RNA (circRNA) platform to develop novel circRNA

medicines for rare disease, vaccines, and cancer. The proprietary circVec technology is based on a

modular genetic cassette design for efficient biogenesis of multifunctional circRNA from DNA and

viral vectors, which can be deployed for many purposes. The circVec platform has demonstrated

enhanced and more durable protein expression than classic mRNA vector systems and has the

potential to become the new gold-standard for DNA and virus-based therapeutics in the future. The

circRNA R&D activities are being conducted by the wholly owned subsidiary Circio AB based at the

Karolinska Institute in Stockholm, Sweden.

In addition, Circio is developing a cancer vaccine, TG01, targeting KRAS driver mutations. TG01 is

currently being tested in two clinical trials in RAS-mutated pancreatic cancer and multiple myeloma in

the USA and Norway. These studies are being run by academic investigators, supported by

prestigious research grants from Innovation Norway and the Norwegian Research Council. We believe

Annual Report 2023

Page 16

that creating value for patients, customers and society strengthens our business and provides value

for shareholders, and that our commitment to corporate social responsibility will enhance this by

building strong relationships with our stakeholders.

Circio has a set of Corporate Social Responsibility principles agreed by the Board of Directors on 20

December 2022. They consist of principles related to social commitment, business conduct, anti-

corruption, human rights, employment without discrimination, labor rights and work conditions,

whistleblowing and environmental responsibility. The complete content of the principles is published

on the Group’s website www.Circio.com.

Circio displays social commitment through its mission to extend and transform the lives of patients

who have no or inadequate treatment options for their disease. This mission encompasses all

activities from researching mechanisms to treat and developing medicines, to gain future approval by

relevant authorities, working with patient organizations and hospitals and finally getting the products

to the market.

Circio is subject to the Transparency Act, which entered into force on 1 July 2022.

In Circio, we work continuously to comply with human rights and to ensure that working conditions

for all employees comply with human rights and dignity. Our Code of Conduct commits us to practice

fair dealing, honesty transparency and integrity in every aspect in dealing with other employees,

business relations and customers, the public, the business community, shareholders, suppliers,

competitors and government authorities. The annual ESG Report, published 30 June 2023, includes

assessment in compliance with the Transparency Act.

Working environment

Circio’s policy is to promote equal human rights and opportunities and

prevent discrimination

because of gender, ethnicity, nationality, ancestry, color, or religion.

Circio is working actively to promote the anti-discrimination act in our business. The activities include

recruitment, salary and working conditions, promotion, professional development, and protection

against harassment. Circio aims to be a workplace where there is no discrimination due to disability.

Including consultants

As of 31

December 2023, Circio had a total of 14 employees, of which 5 were full-time employees.

The group has a policy to outsource non-core operations and highly specialized services. The group

has traditionally fostered an environment where the number of employed women and men is

relatively equal. Due to the recent re-organization in 2023, there has been a temporary shift in gender

equality, as only 25 percent of the Board members are women, and 0 percent of the senior

management team. Going forward the Group will work on creating gender parity for board and

management.

Working time arrangements at the group are independent of gender. Circio provides paid parental

leave for both genders. Circio’s workforce by gender and employment:

Workforce Men Women Total

Total workforce

8 6 14

Total workforce full-time employees 2 3 5

Total workforce part-time employees 6 3 9

Number of non-permanent employees 0 0 0

The working environment is measured on a regular basis through employee surveys. The last survey

was in 2022, when 90 percent of the employees answered that they feel valued as a member of the

organization and 90 percent of employees answered that they feel motivated in their work. 52%

percent of Circio’s workforce hold a master’s degree and 43 percent hold a PhD. We will conduct a

new survey in 2024 to measure the new working environment following the change in strategy and

organization.

The Board of Directors considers the work environment within the group to be good. No accidents or

injuries resulting in absence were registered in 2023. Absence due to illness in the group was 0.58

percent in 2023. Currently zero percent of the company’s workforce is operating under a collective

bargaining agreement. Due to Circio currently being a small company in terms of number of

employees, the company is not obliged to have employee representatives or a health and safety

representative. Circio has a health and safety management system and does not currently provide

any general HSE training for its employees. To ensure safe handling of the viral product, Circio Quality

Annual Report 2023

Page 17

Management System includes a SOP regarding safe biological sample handling. Employees in

relevant roles are trained in using the SOP as part of their onboarding.

The Group’s policy prohibits unlawful discrimination against employees, shareholders, Board

members, customers, and suppliers on account of ethnic or national origin, age, sex or religion.

Respect for the individual is the cornerstone of the Group’s policy. All persons shall be treated with

dignity and respect, and they shall not be unreasonably interfered with in the conduct of their duties

and responsibilities. The Group shall provide the necessary conditions for a safe, healthy and

satisfactory working environment for all employees.

Employees shall not, under any circumstances, be subjected to harassment or other improper

conduct.

Circio has not been subject to any legal proceedings regarding working environment or worker’s

rights in the reporting period.

External environment

Circio strives to minimize its impact on the environment, and its activities are subject to strict

requirements in terms of quality, safety and impacts on personal health and the environment.

All production and distribution activities are outsourced, and when selecting suppliers, Circio

evaluates each candidate’s ethical and responsible business conduct including environment, health

and safety policy.

The main source of climate emissions from Circio in 2023 was emissions from the use of electricity

for Circio offices in Norway, Sweden and Finland and business travel. The company also has

emissions from waste generated from Circio’ offices and laboratory. The company has not identified

any direct emissions from its business activities.

Governance and ethics

Ensuring good governance practices involves all people in Circio. This includes governance as

documented in the guidelines for corporate governance, ethical conduct and anti-corruption based on

the Circio values and respect for human rights. Circio supplier requirements in terms of adherence to

our practices, guidelines and values are an integral part of all stages of the procurement process

including selection and auditing.

Our corporate values set out our expectation for everyone to behave ethically in everything they do.

Our values are trust, quality, teamwork, and innovation.

Circio considers solid corporate governance as a prerequisite to creating value for shareholders and

gaining the confidence of investors. Circio will strive to comply with the generally accepted principles

of good corporate governance through its internal controls and management structure. Circio

believes that its current guidelines for corporate governance are in line with the latest version of the

Norwegian Code of Practice for Corporate Governance, and a description of this is given at the end of

the Annual report. A complete description of the recommendation is available at the Norwegian-

Corporate Governance Board (NCGB) web page. For further details, please see the section entitled

Corporate Governance in this Annual Report and on the group’s homepage.

Annual Report 2023

Page 18

Shareholder information

At an Extraordinary General Meeting 27 September 2023, the General Meeting passed the resolution

to consolidate the Company’s share in the ratio of 30:1 (a reversed split). The nominal value was also

adjusted to NOK 0.6. The numbers below reflect the changes throughout 2023.

As of 15 April 2024, there were 8 109 960 shares outstanding in Circio, distributed amongst 5 409

shareholders. The 20 largest shareholders control 33.1 percent of total shares outstanding.

The estimated share ownership situation on 15 April 2024

Estimated

Shareholder Shares Ownership

Høse AS 587 589 7.2 %

Nordnet Bank AB (nom.) 269 919 3.3 %

Bækkelaget Holding AS 200 018 2.5 %

Ole Andre Skotheim 178 452 2.2 %

Egil Pettersen 155 542 1.9 %

Arild Staxwold Skipperud 121 000 1.5 %

Trond Are Selsbak 116 900 1.4 %

Kjell Olav Lunde 111 111 1.4 %

NCS Energy Consultants AS AS 110 000 1.4 %

Brettel Økonomi AS 108 000 1.3 %

Nordnet Livsforsikring AS 100 504 1.2 %

Vaktmestergruppen AS 96 758 1.2 %

Danske Bank A/S (nom.) 78 353 1.0 %

Almir Ramic 72 696 0.9 %

Rune Ramsvik 70 000 0.9 %

Ragnvald Gabrielsen AS 65 197 0.8 %

Tor Westerheim 65 000 0.8 %

Granum & Co AS 62 560 0.8 %

Pettersen Gruppen AS 62 367 0.8 %

Dan-Rune Lie 52 500 0.6 %

20 largest shareholders 2 684 466 33.1 %

Other shareholders (5 389) 5 425 494 66.9 %

Total shareholders 8 109 960 100.0 %

As per 31 December 2023, key management and members of the Board holds a total of 21,122

shares in Circio Holding ASA, representing 0.3 percent of total shares outstanding.

During 2023 the Circio share was traded in the NOK 6 – 38.40 range. During 2023, 7.2 million shares

were traded, with a total value of NOK 125 million. The closing price on 31 December 2023 was NOK

7.2 per share, corresponding to a market-value of NOK 53 million.

Remuneration to management

The remuneration of the management is intended to ensure the Group’s continued ability to attract

and retain the most qualified management team members and to provide a solid basis for

succession planning.

The Compensation Committee submits recommendations on compensation policy and adjustments

in remuneration of the management team members for the approval of the Board of Directors. The

remuneration of the management team may consist of fixed salary and supplements, incentive

programs, and pension schemes. Subject to individual agreement, members of the management

team are also entitled to other fixed benefits.

The Remuneration Principles were adopted by the Annual General Meeting in April 2022. Information

about the work in the Compensation Committee and applied compensation principles for the

management team in 2022 and 2023 respectively are in the Compensation Report submitted in note

10 to the Annual Accounts.

In 4Q 2023, the management team agreed to a voluntary reduction in salary to 80% in order to invest

more resources into R&D activities and to extend its cash runway. In addition, no bonus has been paid

to the management for 2023. Instead, the board has agreed to make bonus payments after achieving

business milestones which generate or secure cash payments to the Group such as new equity

financing or upfront or milestone payments from business transaction of a significant minimum size.

The Remuneration Report for 2023 will be subject for approval in the Annual General Meeting in June

2024.

Annual Report 2023

Page 19

Financial results and allocation of profits in

Circio Holding ASA

Circio Holding ASA is the holding company in the Circio group. Circio Holding ASA reported a loss

before tax for the full year 2023 of NOK 45.4 million (NOK 790.3 million) of which NOK 8.2 million

relates to fees for the convertible loan facility and 29.6 million relates to impairment of the receivable

from its subsidiary Targovax Solutions AS. The impairment was done for accounting purposes.

Total cash amounted to NOK 13.0 million at the end of 2023 compared to NOK 2.5 million at the end

of 2022.Equity at the end of 2023 amounted to negative NOK 28.4 million compared to NOK 1,4

million at the end of 2022. Circio Holding ASA intends to raise around NOK 50-60 million in a partially

underwritten rights issue in Q2 2024 to further capitalize the holding company and any of its

subsidiaries and to strengthen the share capital and liquidity of the Group. Hence, despite having lost

more than half of the share capital, the Board has a reasonable expectation that Circio Holding ASAs

equity and liquidity will become sufficient to secure its operations for the upcoming year. For further

information, see the Going concern section above and Note 21 in the annual accounts for Circio

Holding ASA.

The Board of Directors proposed that the loss for the full year 2023 of NOK 45.4 million for Circio

Holding ASA is transferred to accumulated loss.

Outlook

Following the rebranding and restructuring of the company, Circio is now well-positioned to fully

focus and deliver on the circVec circRNA platform and conduct pre-clinical testing of its novel gene

therapy candidates. The cost-base has been substantially reduced and the lean organization has the

capabilities and expertise to advance the circVec platform towards in vivo proof-of-concept and

selection of a lead therapeutic candidate in AATD during 2025.

Assuming the intended financing is completed as planned during Q2 2024, the main R&D priority for

the next twelve months is to establish a robust circVec in vivo gene therapy data package which will

convince specialist investors and/or enable a business development transaction(s) which will bring

revenues to the company. In parallel, the TG01 program is advancing in the clinic with limited

financial resources provided by Circio. First data read-outs from the three ongoing clinical

collaboration studies in the USA and Europe are expected from late 2024 and onwards.

Oslo, 25 April 2024

The Board of Directors of Circio Holding ASA

Damian Marron Thomas Falck Diane Mellett

Chairperson of the Board Board member Board member

Erik Digman Wiklund

Chief Executive Officer

Annual Report 2023

Page 20

Responsibility Statement from the Board of Directors

and the Managing Director

We confirm, to the best of our knowledge that the financial statements for the period 1 January to 31 December 2023 have been prepared in accordance with current applicable accounting standards and give a true

and fair view of the assets, liabilities, financial position, and profit or loss of the entity and the group taken as a whole. In addition, in our opinion the Annual Report for Circio for 1 January to 31 December 2023 with

the file name Circio Annual Report 2023-12-31 en.zip in all material aspects is prepared in accordance with ESEF Regulation. We also confirm that the Board of Directors’ Report includes a true and fair view of the

development and performance of the business and the position of the entity and the group, together with a description of the principal risks and uncertainties facing the entity and the group.

Oslo, 25 April 2024

The Board of Directors of Circio Holding ASA

Damian Marron Thomas Falck Diane Mellett

Chairperson of the Board Board member Board member

Erik Digman Wiklund

Chief Executive Officer

Management

Dr Erik D Wiklund

CEO

Dr. Wiklund was hired as the Company’s

CFO in April 2017, and transitioned into

the CBO role in October 2018. In October

2021 he was appointed CEO of Circio.

Dr. Wiklund has deep scientific

knowledge in RNA and cancer biology,

and 13 years of industry experience in a

variety of functions including R&D,

finance and business development.

Previous employment includes Algeta

ASA, Aker Biomarine Antarctic AS, and

management consulting experience

from the Pharma & Health Care practice

of McKinsey & Company.

Dr Wiklund holds a PhD in Molecular

Biology from Aarhus University,

Denmark, and the Garvan Institute of

Medical Research, Sydney, Australia He

is a Swedish and Norwegian citizen and

resides in Norway.

Shares: 3 333

Share options: 59 999

Dr. Gaal was appointed CFO of Circio in

February 2022. He has over 25 years of

experience from big pharma and biotech

companies in Europe and the USA. Most

recently, Dr. Gaal was Managing Director

at Locust Walk, a global life science

boutique investment bank, overseeing

European strategic transactions,

including licensing, financings and M&A.

Prior, he was Head of External

Innovation and Licensing at Almirall and

Head of Search and Evaluation Europe

for Bristol-Myers Squibb.

Dr Gaal holds a Ph.D. in neuroscience

from University of California, Berkeley,

USA. He is a Belgian citizen and resides

in Spain.

Shares: 0

Share options: 23 329

Dr Thomas Hansen

CTO

Dr Victor Levitsky

CSO

Mr Ola Melin

COO

Dr. Hansen joined Circio in January

2021 and was appointed CTO in January

2024. Dr. Hansen brings 15 years of

research experience in RNA biology and

bioinformatics and co-discovered

circular RNA. His work is widely

renowned and cited, and he is

considered a pioneer in the field of

circular RNA. Before joining Circio, Dr.

Hansen was a group leader and

assistant professor at Aarhus University

where he led a research team focusing

on circular RNA biology and

bioinformatics.

Dr Hansen holds a PhD in Molecular

Biology and Bioinformatics from Aarhus

University, Denmark. He is a Danish

citizen and resides in Denmark.

Shares: 0

Share options: 16 658

Dr. Levitsky joined Circio as CSO in 2020

and brings extensive experience in

academic research and pre-clinical drug

development. Dr. Levitsky is an

internationally recognized expert in

immunology and oncology with 20 years of

experience in academic research, including

Associate Professor positions at the

Karolinska Institute in Sweden and the

Johns Hopkins University in the USA. Prior

to joining Circio, Dr Levitsky was Tumor

Immunology Leader at Roche and then

Head of Oncology Research at Molecular

Partners, Switzerland. He also served as

Global Head of Oncology Integration at

Servier, Paris, France.

Dr Levitsky is a medical doctor and holds a

PhD in Virology from the Institute of

Microbiology, Latvian Academy of

Sciences, Riga, Latvia. He is a Swedish and

Russian citizen and resides in Switzerland.

Shares: 333

Share options: 21 502

Dr Lubor Gaal

CFO

The Group’s management team consists of five individuals per 25 April 2024. Set out below are brief biographies of the

members of Management. Holdings of shares and share options as of 25 April 2024 and includes close associates.

Management

Mr. Melin joined Circio in 2021 and was

appointed COO in January 2024. He

brings over 25 years of experience in

biologics development, manufacturing,

and drug supply. Most recently, Mr Melin

was Director of Technical Operations at

OxThera AB, with responsibility for

clinical supply and establishing a

commercial-ready manufacturing and

supply process. Prior, he spent eighteen

years in senior leadership roles at

Biovitrum and Sobi AB, including as

Head of External Manufacturing and

Head of Product Supply. He started his

career in process development at

Pharmacia.

Mr. Melin has studied Chemical

Engineering at Mälardalen University. He

is a Swedish citizen and resides in

Sweden.

Shares: 1 666

Share options: 24 185

Dr Robert Burns is a Director and an advisor

to companies developing immune based

therapies in cancer and autoimmune

indications. He has 35 years of experience in

building biotechnology companies.

Dr. Burns is currently chairman of Affibody

AB in Sweden, a company developing novel

therapies in autoimmune and inflammation

indications, and was the chairman of

Haemostatix before the acquisition by

Ergomed plc.

Dr. Burns has extensive experience as a

biotech entrepreneur and executive, and

previously served as CEO of 4-Antibody AG,

Affitech A/S (NASDAQ/OMX), and Celldex

Therapeutics Inc (NASDAQ)

Dr Burns holds a PhD in Chemistry. He is a

UK citizen and resides in the UK.

Shares: 9 958

Share options: 0

Diane Mellett is a consultant to a number of

biotech and medical device companies. She

is qualified in both U.S. and UK law and

advises biotechnology companies in

commercial contract and intellectual

property matters.

Ms. Mellett was formerly General Counsel for

Cambridge Antibody Technology (CAT) (LSE:

NASDAQ) and led the secondary NASDAQ

listing of that company as well as serving on

the board of directors. During her time at

CAT, she led a successful defense of a

contractual dispute with Abbott

Pharmaceuticals (now Abbvie) covering the

company's major collaboration partnership

regarding Humira®.

Ms. Mellett is a UK and Irish citizen and

resides in France.

Shares: 4 098

Share options: 0

Thomas Falck is an experienced CEO, CFO,

Board Chair and Non-Executive Director,

Venture Capitalist & Growth Investor with

demonstrated success in defining and

delivering profitable growth while

undertaking strategic and organizational

change.

Mr. Falck has broad experience with private

equity, venture capital, listed, and

government owned entities. He holds an

MBA from The Darden School, University of

Virginia, and is a graduate of the Norwegian

Naval Academy and the Norwegian Defense

University College. He has also completed

executive programs at Singularity University

and Harvard Business School.

Mr Falck is a Norwegian citizen and resides

in Norway.

Shares: 0

Share options: 0

Damian Marron

Robert Burns

Diane Mellett Thomas Falck

Board of Directors

The Board of Directors consisted of four individuals as per 31 December 2023. Set out below are brief biographies of the

members of Board. Holdings of shares, share options and RSUs as of 25 April 2024 and includes close associates.

Robert Burns has transitioned to a Scientific Advisory Board role in April 2024 to ensure a compliant gender balance in

the Board of Directors, and will remain a Board observer subject to the approval of the general assembly in second

quarter 2024.

Damian Marron is a non-executive director,

corporate advisor and life science executive

with a successful track record of value

creation through public and venture capital

financing, portfolio planning, M&A, licensing

agreements as well as R&D collaborations.

He has extensive experience bot as an

executive, director and in advisory roles, and

has specialized in immuno-oncology, cell

therapy and orphan diseases. Mr. Marron is

currently Director at Cantargia, a Swedish,

listed, clinical stage oncology company and

Resolys Bio Inc., a private, pre-clinical stage

U.S. company. He is also Chair of the Board

of Imophoron Ltd and of Indegra

Therapeutics Ltd, private early stage UK

companies and Head of Biopharma with

Treehill Partners, a healthcare advisory firm.

Mr. Marron is a British and Irish citizen and

resides in France.

Shares: 1833

Share options: 0

Corporate Governance

Report 2023

1. Implementation and reporting on corporate governance .............................. 24

2. Business ........................................................................................................... 24

3. Equity and dividends ........................................................................................ 25

4. Equal treatment of shareholders ..................................................................... 25

5. Share and negotiability .................................................................................... 25

6. General meetings ............................................................................................. 26

7. Nomination Committee ................................................................................... 26

8. Board of Directors; composition and independence ....................................... 27

9. The work of the Board of Directors ................................................................. 28

10. Risk management and internal control ......................................................... 30

11. Remuneration of the Board of Directors ....................................................... 30

12. Remuneration for executive personnel ......................................................... 31

13. Information and communication ................................................................... 31

14. Take-overs ..................................................................................................... 31

15. Auditor ........................................................................................................... 32

Annual Report 2023

Page 24

Corporate Governance Report

Circio Holding ASA (the “Company” and together with its subsidiaries, the “Group”) considers good

corporate governance to be a prerequisite for value creation, trustworthiness and for access to

capital.

In order to secure strong and sustainable corporate governance, it is important that the Group

ensures good and healthy business practices, reliable financial reporting and an environment of

compliance with legislation and regulations.

The Norwegian Corporate Governance Board (NCGB or NUES) issues “The Norwegian Code of

Practice for Corporate Governance” (the “Code of Practice”), most recently revised 14 October 2021,

for companies listed on Oslo Stock Exchange and Oslo Axess. The Code of Practice is available at

www.nues.no. The Code of Practice is based on a “comply or explain principle” whereby listed

companies must comply with the Code of Practice or explain why they have chosen an alternative

approach. How the Company has adapted to this Code of Practice is described in the Company’s

Corporate Governance Policy. Each chapter represents the 15 topics in the Code of Practice. It starts

with the recommendations, explains how the policy is followed by the Company, and finally concludes

with any deviations from the Code of Practice.

1. Implementation and reporting on

corporate governance

The Board of Directors must ensure that the company implements sound corporate governance.

The Board of Directors must provide a report on the company’s corporate governance in the

directors' report or in a document that is referred to in the directors' report. The report on the

company's corporate governance must cover every section of the Code of Practice.

If the company does not fully comply with the Code of Practice, the company must provide an

explanation of the reason for the deviation and what solution it has selected.

The Board has decided that the Company will comply with the Norwegian Code of Practice.

Compliance with the Code of Practice is described in the Board of Directors’ Report. Circio complies

with the Code of Practice without any significant exceptions. One minor deviation has been

accounted for below under chapter 6: General Meetings.

Deviations from the recommendation: None

2. Business

The company’s articles of association should clearly describe the business that the company shall

operate.

The Board of Directors should define clear objectives, strategies and risk profiles for the company’s

business activities such that the company creates value for shareholders in a sustainable manner.

When carrying out this work, the Board of Directors should therefore take into account financial,

social, and environmental considerations.

The Board of Directors should evaluate these objectives, strategies, and risk profiles at least yearly.

The Company’s Articles of Associations clearly describe the business of the Company and are

available at www.circio.com. The Board of Directors leads the Company’s strategic planning and

makes decisions that form a basis for the Company’s executive management to prepare and carry

out investments and structural measures. The Company’s objectives, strategies and risk profiles are

being evaluated yearly, and together with the Company’s Articles of Association, provides the

information needed to help ensure that shareholders can anticipate the scope of the Company’s

activities.

The Company has guidelines for how it integrates considerations related to stakeholders into its

value creation. Corporate Social Responsibility principles were adopted by the Board of Directors on

20 December 2022 to ensure sound corporate social responsibility. The implementation of corporate

social responsibility principles in the Group’s day-to-day operations, its business strategies and

towards various stakeholders is further described in the Board of Directors report 2023.

Annual Report 2023

Page 25

Deviations from the recommendation: None

3. Equity and dividends

The Board of Directors should ensure that the company has a capital structure that is appropriate to

the company’s objectives, strategy, and risk profile.

The Board of Directors should establish and disclose a clear and predictable dividend policy.

The background to any proposal for the Board of Directors to be given a mandate to approve the

distribution of dividends should be explained.

Mandates granted to the Board of Directors to increase the company’s share capital or to purchase

own shares should be intended for a defined purpose. Such mandates should be limited in time to

no later than the date of the next annual general meeting.

The Board of Directors ensure the Company has a capital structure that is appropriate to the

Company’s objectives, strategy, NOK -96 million, which corresponds to an equity ratio of negative 342

percent. The Board of Directors regards the present equity structure as insufficient to meet the

Company’s objectives, strategy, and risk profile and has implemented measures to turn the equity

positive. Moreover, for biotech companies at a relatively early stage, like Circio, access to debt is

usually restricted and not available outside of government supported structures.

The Company’s long-term objectives may include making distributions of net income in the form of

dividends, but Circio has paid no dividend to date. The Group is focusing its resources on the

development of its circVec platform and does not anticipate paying any cash dividend in the

foreseeable future.

Mandates granted to the Board of Directors to increase the Company

’

s share capital or to purchase

own shares should be intended for a defined purpose. Such mandates should be limited in time to no

later than the date of the next annual general meeting.

In connection with the Company’s share incentive arrangements and pursuant to the Section 10-14 of

the Norwegian Limited Companies Act, the Board of Directors is granted an authorization to increase

the Company’s share capital by up to the lower of (a) NOK 2,700,000 and (b) 10% of the Company

’

outstanding shares, options and RSUs. This applies until the Annual General Meeting in 2024.

For the period between the Annual General Meetings in 2024 and 2025, the Board of Directors

proposes an authorization to increase the Company’s share capital by up to 40 percent of

outstanding shares and options and RSUs (i.e. fully diluted).

Deviations from the recommendation: The Company have negative equity and t

he Board is aware of

the situation and has implemented the necessary measures to turn the negative equity into positive,

for further information

see Going Concern section in the Directors report.

4. Equal treatment of shareholders

Any decision to waive the pre-emption rights of existing shareholders to subscribe for shares in the

event of an increase in share capital should be justified. Where the Board of Directors resolves to

carry out an increase in share capital and waive the pre-emption rights of existing shareholders on

the basis of a mandate granted to the board, the justification should be publicly disclosed in a stock

exchange announcement issued in connection with the increase in share capital.

Any transactions the company carries out in its own shares should be carried out either through the

stock exchange or at prevailing stock exchange prices if carried out in any other way. If there is

limited liquidity in the company’s shares, the company should consider other ways to ensure equal

treatment of all shareholders.

Share issues without pre-emption rights for existing shareholders

Any decision to waive the pre-emption rights of existing shareholders to subscribe for shares in the

event of an increase in the share capital shall be justified. Where the Board of Directors resolves to

carry out a share issue without pre-emption rights for existing shareholders, then the justification will

be publicly disclosed in an announcement issued in connection with the share issue.

Transactions with own shares

Any transactions the Company carries out in its own shares shall be carried out either through the

Oslo Stock Exchange or at prevailing stock exchange prices if carried out in another way. If there is

limited liquidity in the Company’s shares, the Company shall consider other ways to ensure equal

treatment of all shareholders. The Company has not conducted trades in its own shares.

Deviations from the recommendation: None

5. Share and negotiability

The company should not limit any party’s ability to own, trade, or vote for shares in the company.

Annual Report 2023

Page 26

The company should provide an account of any restrictions on owning, trading, or voting for shares

in the company.

The Company's constituting documents do not limit any party’s ability to own, trade or vote for share

in the Company. The Company’s shares are freely transferable, subject to any restrictions that may

exist under applicable securities laws.

Deviations from the recommendation: None

6. General meetings

The Board of Directors should ensure that the company’s shareholders can participate in the

general meeting.

The Board of Directors should ensure that:

the resolutions and supporting information distributed are sufficiently detailed,

comprehensive, and specific to allow shareholders to form a view on all matters to be

considered at the meeting

any deadline for shareholders to give notice of their intention to attend the meeting is

set as close to the date of the meeting as possible

the members of the Board of Directors and the chairman of the nomination committee

attend the general meeting

the general meeting is able to elect an independent chairman for the general meeting

Shareholders should be able to vote on each individual matter, including on each individual

candidate nominated for election. Shareholders who cannot attend the meeting in person should be

given the opportunity to vote. The company should design the form for the appointment of a proxy

to make voting on each individual matter possible and should nominate a person who can act as a

proxy for shareholders.

Exercising rights

The Board of Directors ensures that the Company’s shareholders can participate in the general

meeting given normal circumstances. The Board of Directors ensures that:

the resolutions and supporting documentation, if any, are sufficiently detailed,

comprehensive, and specific to allow shareholders to understand and form a view on

matters that are to be considered at the General Meeting

the registration deadline, if any, for shareholders to participate at the General Meeting

is set as close as practically possible to the date of the General Meeting

representatives of the Board and the chairperson of the Nomination Committee attend

general meetings

Shareholders are able to vote on each individual matter, including on each individual candidate

nominated for election.

Participation without being present

The Board of Directors will choose whether to hold a general meeting a physical or electronic

meeting. If a general meeting is being held as a physical meeting, shareholders who cannot be

present are given the opportunity to vote using proxies. The form of the proxy is designed to make

voting on each individual matter possible. The Company nominates a person who can act as a proxy

for shareholders.

Deviations from the recommendation: The Company does not have an arrangement in place to

ensure independent chairing of the General Meeting. However, the Board of Directors will on an ad

hoc basis evaluate independent chairing when necessary. Historically, it has not been deemed

necessary to have an independent chair.

Although Circio encourages the members of the Board to attend the Annual General Meeting, their

attendance is not always possible.

7. Nomination Committee

The company should have a nomination committee, and the nomination committee should be laid

down in the company’s articles of association. The general meeting should stipulate guidelines for

the duties of the nomination committee, elect the chairperson and members of the nomination

committee, and determine the committee’s remuneration.

The nomination committee should have contact with shareholders, the Board of Directors, and the

company’s executive personnel as part of its work on proposing candidates for election to the

board.

The members of the nomination committee should be selected to take into account the interests of

shareholders in general. The majority of the committee should be independent of the Board of

Directors and the executive personnel. The nomination committee should not include any executive

personnel or any members of the company’s Board of Directors.

Annual Report 2023

Page 27

The nomination committee’s duties should be to propose candidates for election to the Board of

Directors and nomination committee (and corporate assembly where appropriate) and to propose

the fees to be paid to members of these bodies. The nomination committee should justify why it is

proposing each candidate separately.

The company should provide information on the membership of the committee and any deadlines

for proposing candidates.

The Company has a Nomination Committee, and the Nomination Committee is laid down in the

Company’s Articles of Association. The Company’s General Meeting stipulates guidelines for the

nomination committee, elects the members and the Chairperson of the Nomination Committee, and

determines their remuneration. The current Nomination Committee was elected at the General

Meeting 22 May 2023. The objectives, duties and functions of the Nomination Committee are

described in the Company’s “Charter for the Nomination Committee” which were adopted by the

General Meeting 14 September 2015 and updated in December 2022.

All members of the Nomination Committee are independent of the Company’s Board of Directors and

executive management, and none are members of the Board of Directors. Neither the CEO nor others

of the executive management team are members of the Nomination Committee.

The Nomination Committee shall contact the Company’s largest shareholders, as registered in the

VPS on 1 November each year, and request such shareholders to each propose a candidate to be

appointed as a member of the Nomination Committee. If any candidates are proposed by such

shareholders, the Nomination Committee shall include those candidates among the three candidates

in the recommendation to the General Meeting for election of members to the Nomination

Committee.

The Nomination Committee shall give recommendations for the election of shareholder elected

members of the Board of Directors and the members of the Nomination Committee, and

remuneration to the members of the Board of Directors and the members of the Nomination

Committee.

The Nomination Committee shall justify why it is proposing each candidate separately.

Circio's shareholders are entitled to nominate candidates to the Board of Directors of Circio Holding

ASA. Information on how to send input and proposals can be found on Circio’s website in the section

“Committee’s composition” under “Investor Relations” and “Corporate Governance”.

For information about the members of the Nomination Committee, please see “Committee

composition” under “Corporate Governance” in the Investor section at www.Circio.com.

Deviations from the recommendation: None.

8. Board of Directors; composition and

independence

The composition of the Board of Directors should ensure that the board can attend to the common

interests of all shareholders and meets the company’s need for expertise, capacity, and diversity.

Attention should be paid to ensuring that the board can function effectively as a collegiate body.

The composition of the Board of Directors should ensure that it can operate independently of any

special interests. The majority of the shareholder-elected members of the board should be

independent of the company’s executive personnel and material business contacts. At least two of

the members of the board elected by shareholders should be independent of the company’s main

shareholder(s).

The Board of Directors should not include executive personnel. If the board does include executive

personnel, the company should provide an explanation for this and implement consequential

adjustments to the organization of the work of the board, including the use of board committees to

help ensure more independent preparation of matters for discussion by the board, cf. Section 9 of

the code of Practice.

The general meeting (or the corporate assembly where appropriate) should elect the chairman of

the Board of Directors.

The term of office for members of the Board of Directors should not be longer than two years at a

time.

The annual report should provide information to illustrate the expertise of the members of the

Board of Directors, and information on their record of attendance at board meetings. In addition, the

annual report should identify which members are considered to be independent.

Members of the Board of Directors should be encouraged to own shares in the company.

The Nomination Committee shall give weight to the proposed candidates’ experience, qualifications,

and their capacity to serve as officers of the Company in a satisfactory manner. Emphasis will also

Annual Report 2023

Page 28

be given to ensuring reasonable representation in terms of gender, equality and background, and to

ensuring the independence of members of the Company’s Board.

The current Board of Directors was elected at the General Meeting 22 May 2023. As per 31 December

2023, the Board of Directors consists of four members, and currently has the following composition:

Damian Marron (Chair), Robert Burns, Diane Mellett, Thomas Falck. As a result of a change in

strategic focus during 2023 and after discussions with the Nomination Committee, the three

Directors Bente-Lill Romøren, Sonia Quaratino and Raphael Clynes tendered their resignations from

Circio’s Board in October 2023, and Robert Burns resigned from the Board to transition to a Scientific

Advisory Board (SAB) role in April 2025 to ensure a compliant gender balance in the Board of

Directors; he will remain a Board observer.

For more information on each board member, please see section “Board of Directors”.

Participation on Board of Directors meetings and Board committee meetings during 2023

Participation in

meetin

Board

Meetin

Audit Committee Compensation

committee

Governance

Committee

Damian Marron 17 2 2

Robert Burns 15 2

Diane Mellett 15 3 1

Thomas Falck 15 3 2

The composition of the Company’s Board of Directors is considered to ensure that the shareholders’

interests are maintained, and that the Company’s need for a diversified and experienced Board of

Directors with sufficient capacity is in place. The members of the Board of Directors represent a

combination of expertise, capabilities and experience from the pharmaceutical industry and finance

business.

The composition of the Board of Directors ensures that it can act independently of any special

interests. All of the shareholder-elected members of the Board of Directors are independent of the

Company’s executive management and material business connections. In addition, all members of

the Board of Directors are considered to be independent of the Company’s major shareholder(s). A

major shareholder means in this connection a shareholder that owns or controls 10 percent or more

of the Company’s shares or votes, and independence shall entail that there are no circumstances or

relations that may be expected to be able to influence independent assessments of the person in

question.

The Board of Directors does not include executive management. The Chairperson of the Board of

Directors is elected by the General Meeting.

The term of office for members of the Board of Directors is no longer than one year at the time.

Members of the Board of Directors may be re-elected.

For further information about the members of the Board of Directors, including number of shares and

who are considered independent, see Note 10 Related parties and Management in the Company’s

Annual Report, and the section “Board of Directors” in the Annual Report.

Deviations from the recommendation: None

9. The work of the Board of Directors

The Board of Directors should issue instructions for its own work as well as for the executive

management with particular emphasis on clear internal allocation of responsibilities and duties.

These instructions should state how the Board of Directors and executive management shall handle

agreements with related parties, including whether an independent valuation must be obtained. The

Board of Directors should also present any such agreements in their annual directors’ report.

The Board of Directors should ensure that members of the Board of Directors and executive

personnel make the company aware of any material interests that they may have in items to be

considered by the Board of Directors.

In order to ensure a more independent consideration of matters of a material character in which the

chairman of the board is, or has been, personally involved, the board's consideration of such

matters should be chaired by some other member of the board.

The Public Companies Act stipulates that large companies must have an audit committee. The

entire Board of Directors should not act as the company’s audit committee. Smaller companies

should give consideration to establishing an audit committee. In addition to the legal requirements

on the composition of the audit committee etc., the majority of the members of the committee

should be independent of the company.

The Board of Directors should also consider appointing a remuneration committee in order to help

ensure thorough and independent preparation of matters relating to compensation paid to the

executive personnel. Membership of such a committee should be restricted to members of the

board who are independent of the company’s executive personnel.

Annual Report 2023

Page 29

The Board of Directors should provide details in the annual report of any board committees

appointed.

The Board of Directors should evaluate its performance and expertise annually.

General

The Board of Directors Handbook adopted by the Board of Directors on the 20 December 2022

includes a set of instructions and policies instructions/charters for its own work, as well as for the

executive management, with particular emphasis on clear allocations of internal responsibilities and

duties.

Agreements with related parties

The Board of Directors shall arrange for a valuation to be obtained from an independent third party in

the event of a transaction between the Company and its related parties, e.g., shareholders, a

shareholder’s parent company, members of the Board of Directors, executive management or closely-

related parties of any such parties. An independent valuation shall also be carried out in the event of

transactions between companies within the same group where any of the companies involved have

minority shareholders.

The Board of Directors ensures that members of the Board of Directors and executive management

make the Company aware of any material interests that they may have in items to be considered by

the Board of Directors. In order to ensure a more independent consideration of matters of a material

character in which the chairperson of the board is, or has been, personally involved, the board's

consideration of such matters will be chaired by some other member of the board.

The Board of Directors, working with the Corporate Governance Committee, carries out an annual

evaluation of its own performance and expertise and presents the evaluation report to the

Nomination Committee.

The Board of Directors has established three permanent Board Committees, which are described in

further detail below. The current members of the committees were elected at the Board of Directors

meeting in January 2024. The members of the committee are appointed for one year. These

committees do not pass resolutions but supervise the work of the Company’s management on behalf

of the Board of Directors and prepare matters for Board of Directors consideration within their

specialized areas. In this preparatory process, the committees have the opportunity to draw on

company resources, and to seek advice and recommendations from sources outside the Company.

The Board of Directors also establishes ad-hoc sub-committees as needed, e.g. research,

development, finance, manufacturing and in connection with M&A activities.

Audit Committee

The members of the Audit Committee are Diane Mellett (chair), Damian Marron and Thomas Falck.

The CFO acts as the committee’s secretary. The composition of the committee meets the

requirements of the Norwegian Code of Practice for Corporate Governance as regards independence,

and all the committee members are considered to be independent of Executive Management. The

mandate of the committee is set out in the Charter for the Audit Committee and is in brief as follows:

Prepare for the Board of Directors a report describing its supervision of the financial

reporting process, including review of implementation of accounting principles and

policies.

Monitor the effectiveness of the Company’s internal control and risk management systems,

noting any deficiencies and monitor management in remedying any such deficiencies.

Have regular contact with the external auditor regarding the annual and consolidated

accounts.

Review and monitor the independence of the statutory auditor, ref. the Norwegian Auditors

Act, chapter 4 and in particular whether services other than audits delivered by the

statutory auditor or the audit firm are a threat against the statutory auditor’s independence.

The committee supervises implementation of and compliance with the Company’s Ethics

Code of Conduct and supervises the Company’s compliance activities relating to corruption

as further described in the provisions herein.

Three meetings were held in 2023.

Compensation committee

The members of the Compensation Committee are Thomas Falck (chair), Damian Marron and Robert

Burns. The composition of the committee meets the requirements of the Norwegian Code of Practice

for Corporate Governance as regards independence, and all the committee members are considered

to be independent of Executive Management. The mandate of the committee is set out in the Charter

for the Compensation Committee and is in brief as follows:

The role of the committee shall be to oversee the Group’s compensation policy for its CEO,

Management, employees, and consultants, recommend changes to the Group’s

compensation policy to the Board of Directors as and when appropriate and prepare

matters for final decision by the Board of Directors. Recommendations and proposals for

compensation to members of the Board of Directors shall be the responsibility of the

Nomination Committee.

Two meetings were held in 2023.

Annual Report 2023

Page 30

Corporate Governance Committee

The members of the Corporate Governance Committee are Diane Mellett (chair) and Thomas Falck.

The composition of the committee meets the requirements of the Norwegian Code of Practice for

Corporate Governance as regards to independence, and both committee members are considered to

be independent of Executive Management. The mandate of the committee is set out in the Charter for

the Governance Committee and is as follows:

Develop and review the Groups policies and practices for corporate governance, and

annually recommend changes to such policies and practices, if any, to the Board of

Directors

Lead the Board of Directors in its annual review of the Board of Directors’ performance and

its competence

Monitor the functioning of the Board committees and sub-groups and make

recommendations to the Board of Directors with regard to the composition of Board

committees and sub-groups

Lead the Board of Directors in its annual review of the CEO’s performance

One meeting was held in 2023.

Deviations from the recommendation: None

10. Risk management and internal control

The Board of Directors must ensure that the company has sound internal control and systems for

risk management that are appropriate in relation to the extent and nature of the company’s

activities.

The Board of Directors should carry out an annual review of the company’s most important areas of

exposure to risk and its internal control arrangements.

To manage the Company specific risks and risk inherent in the industry, and to comply with

international and national regulations, the Company have implemented a periodic review process to

identify, analyze and handle the main risk factors facing the Group. The Audit Committee will

periodically receive written reports, highlighting the main risks and proposed actions to address these

as well as any significant weaknesses in the internal control regime.

Our aim is to have an annual review by the Board of Directors, of the Company’s most important

areas of exposure to risk and its internal control arrangements.

Risk Management is further described under “Directors’ Report”, in the Risk section.

Deviations from the recommendation: None

11. Remuneration of the Board of Directors

The remuneration of the Board of Directors should reflect the board’s responsibility, expertise, time

commitment and the complexity of the company’s activities.

The remuneration of the Board of Directors should not be linked to the company’s performance. The

company should not grant share options to members of its board.

Members of the Board of Directors and/or companies with which they are associated 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 should be disclosed to the full board.

The remuneration for such additional duties should be approved by the board.

Any remuneration in addition to normal directors’ fees should be specifically identified in the annual

report.

The compensation of the Board of Directors and its sub-committees is decided by the Annual General

Meeting, based on a recommendation from the Nomination Committee. Separate rates are set for the

Board of Directors’ chair and other members, respectively. Separate rates are also adopted for the

Board of Directors’ sub-committees, with similar differentiation between the Chair and the other

members of each committee.

The Annual General Meeting 22 May 2023 decided to remunerate the Board of Directors with a

combination of cash and Restricted Share Units (RSUs).

If the Board members choose to receive the Board remuneration in RSU’s they must elect to either (i)

receive 100% of the compensation in RSUs, (ii) receive 1/3 of the compensation in cash and 2/3 in

RSUs, or (iii) receive 2/3 of the compensation in cash and 1/3 in RSUs. The total compensation,

except for meeting compensation, to each member of the Board of Directors for 2022-2023 are

described in Note 10 in the Annual Report.

The number of RSUs to be granted to a member of the Board of Directors is calculated as the non-

cash compensation in NOK, divided by the market price for the Circio Holding ASA share. The market

price is calculated as volume weighted average share price the 10 trading days prior to the grant

date.

Annual Report 2023

Page 31

The cash compensation is not linked to the Company’s performance or similar. None of the members

of the Board of Directors has a pension plan or agreement concerning pay after termination of their

office with the Company.

There are no plans to issue new options to the members of the Board of Directors going forward.

Information about all compensation paid to each member of the Board of Directors is presented in

Note 10 of the consolidated financial statements in the Annual Report.

Deviations from the recommendation: None

12. Remuneration for executive personnel

The guidelines on the salary and other remuneration for executive personnel must be clear and

easily understandable, and they must contribute to the company’s commercial strategy, long-term

interests, and financial viability.

The company’s arrangements in respect of salary and other remuneration should help ensure the

executive personnel and shareholders have convergent interests, and should be simple.

Performance related remuneration should be subject to an absolute limit.

The Board of Directors has established guidelines for the remuneration of executive management,

and these guidelines shall be communicated to the Annual General Meeting. The guidelines were

approved by the Annual General Meeting 20 April 2022 and will be considered and approved by the

general meeting and in the event of any material changes and at least every fourth year. The

guidelines set out the main principles in determining the salary and other remuneration of executive

management. The Board of Director’s guidelines on the remuneration of executive management are

outlined in an appendix to the agenda for the Annual General Meeting.

Performance-related remuneration of the executive management in the form of share option grants,

bonus programs or similar are linked to value creation for shareholders over time. Such

arrangements’ intention is to incentivize performance and be based on quantifiable factors over

which the employee in question can have influence. Performance-related remuneration is subject to

an absolute limit (while there is no upside limit on granted share options nor on granted share units).

Information about all compensation paid to each member of the Executive Management is presented

in Note 10 of the consolidated financial statements in the Annual Report.

Deviations from the recommendation: None

13. Information and communication

The Board of Directors should establish guidelines for the company’s reporting of financial and

other information based on openness and taking into account the requirement for equal treatment

of all participants in the securities market.

The Board of Directors should establish guidelines for the company’s contact with shareholders

other than through general meetings.

General information

The Company shall provide timely and precise information about the Company and its operations to

its shareholders, the stock exchange when applicable and the financial markets in general. Such

information will be given in the form of annual reports, semi-annual reports, press releases, notices to

relevant marketplace exchange as well as investor presentations in accordance with what is deemed

most suitable. The Company shall seek to clarify its long-term potential, including strategies, value

drivers, and risk factors.

The Company’s presentations are webcast directly and may be found on Circio’s website, along with

the quarterly and annual reports, under “Investor Relations”.

Information to shareholders

The Company has procedures for establishing discussions with shareholders to enable the Company

to develop a balanced understanding of the circumstances and focus of shareholders. Such

discussions will always be in compliance with the principle of equal treatment of the Company’s

shareholders.

Deviations from the recommendation: None

14. Take-overs

The Board of Directors should establish guiding principles for how it will act in the event of a take-

over bid. In a bid situation, the company’s Board of Directors and management have an independent

responsibility to help ensure that shareholders are treated equally, and that the company’s business

activities are not disrupted unnecessarily.

Annual Report 2023

Page 32

The Board has a particular responsibility to ensure that shareholders are given sufficient

information and time to form a view of the offer.

The Board of Directors should not hinder or obstruct take-over bids for the company’s activities or

shares.

Any agreement with the bidder that acts to limit the company’s ability to arrange other bids for the

company’s shares should only be entered into where it is self-evident that such an agreement is in

the common interest of the company and its shareholders. This provision shall also apply to any

agreement on the payment of financial compensation to the bidder if the bid does not proceed. Any

financial compensation should be limited to the costs the bidder has incurred in making the bid.

Agreements entered into between the company and the bidder that are material to the market's

evaluation of the bid should be publicly disclosed no later than at the same time as the

announcement that the bid will be made is published.

In the event of a take-over bid for the company’s shares, the company’s Board of Directors should

not exercise mandates or pass any resolutions with the intention of obstructing the take-over bid

unless this is approved by the general meeting following announcement of the bid. If an offer is

made for a company’s shares, the company’s Board of Directors should issue a statement making a

recommendation as to whether shareholders should or should not accept the offer. The board’s

statement on the offer should make it clear whether the views expressed are unanimous, and if this

is not the case it should explain the basis on which specific members of the board have excluded

themselves from the board’s statement. The board should arrange a valuation from an independent

expert. The valuation should include an explanation and should be made public no later than at the

time of the public disclosure of the board’s statement.

Any transaction that is in effect a disposal of the company’s activities should be decided by a

general meeting (or the corporate assembly where relevant).

In the event of a take-over process, the Board of Directors and the Company’s Executive Management

each have an individual responsibility to ensure that the Company’s shareholders are treated equally

and that the Company’s activities are not unnecessarily interrupted. The Board of Directors has a

particular responsibility in ensuring that the shareholders have sufficient information and time to

form a view on the offer.

The Board of Directors will not seek to hinder or obstruct any takeover bid for the Company’s

operations or shares. In the event of such a bid as discussed in section 14 of the Norwegian Code of

Practice for Corporate Governance, the Board of Directors will, in addition to complying with relevant

legislation and regulations, seek to comply with the recommendations in the Code of Practice. This

includes obtaining a valuation from an independent expert. On this basis, the Board of Directors will

make a recommendation as to whether or not the shareholders should accept the bid. There are no

other written guidelines for procedures to be followed in the event of a takeover bid.

The Company has not found it appropriate to draw up any explicit basic principles for Circio’s conduct

in the event of a takeover bid, other than the actions described above. The Board of Directors

otherwise concurs with what is stated in the Code of Practice regarding this issue.

Deviations from the recommendation: None

15. Auditor

The Board of Directors should ensure that the auditor submits the main features of the plan for the

audit of the company to the audit committee annually.

The Board of Directors should invite the auditor to meetings that deal with the annual accounts. At

these meetings the auditor should report on any material changes in the company’s accounting

principles and key aspects of the audit, comment on any material estimated accounting figures and

report all material matters on which there has been disagreement between the auditor and the

executive management of the company. The Board of Directors should at least once a year review

the company’s internal control procedures with the auditor, including weaknesses identified by the

auditor and proposals for improvement. The Board of Directors should establish guidelines in

respect of the use of the auditor by the company’s executive management for services other than

the audit.

The Board of Directors ensures that the auditor submits the main features of the plan for the audit of

the Company to the Audit Committee annually.

The Board of Directors invites the auditor to meetings that deal with the annual accounts, so the

auditor can report on any changes in the company’s accounting principles and key aspects of the

audit, comment on any material estimated accounting figures and report all matters on which there

has been disagreement between the auditor and the executive management of the company.

The Board of Directors once a year reviews the Company’s internal control procedures with the

auditor, including weaknesses identified by the auditor and proposals for improvement.

At least once a year, the Audit Committee will meet with the auditor to consider the auditor’s views on

the Group’s accounting principles, risk areas and internal control procedures.

Annual Report 2023

Page 33

The Audit Committee receives an annual summary from the external auditor of services other than

auditing that have been provided to the Company. The Company has established guidelines for the

management’s use of the external auditor for services other than auditing.

The auditor’s fees, presented in Note 10 of the consolidated financial statements in the Annual

Report, have stated for the relevant categories of auditing and other services. The auditor’s fee is

determined at the Annual General Meeting.

CIRCIO GROUP 2023

Accounts

and notes

Consolidated statement of profit or loss ............................................................. 35

Consolidated Statement of comprehensive income ........................................... 35

Consolidated statement of financial position ..................................................... 36

Consolidated statement of changes in equity ..................................................... 37

Consolidated statement of cash flow .................................................................. 38

1. General information ........................................................................................ 39

2. Summary of significant accounting principles ................................................. 39

3. Important accounting estimates and discretionary assessments ................... 42

4. Segments ......................................................................................................... 42

5. Financial instruments and risk management objectives and policies ............. 42

6. Revenue recognition ........................................................................................ 47

7. Research and development expenses ............................................................. 47

8. Government grants .......................................................................................... 47

9. Payroll and related expenses ........................................................................... 48

10. Related parties and Management – same as the comp.report ..................... 49

11. Share-based compensation ........................................................................... 61

12. Other operating expenses ............................................................................. 65

13. Financial instruments .................................................................................... 65

14. Tax .................................................................................................................. 66

15. Intangible assets and impairment test .......................................................... 68

16. Property, plant and equipment ..................................................................... 69

17. Leases ............................................................................................................. 70

18. Receivables ..................................................................................................... 73

19. Cash and cash equivalents ............................................................................. 73

20. Share capital and shareholder information ................................................... 74

21. Interest-bearing debt ..................................................................................... 76

22. Current liabilities ............................................................................................ 77

23. Convertible bond ............................................................................................ 78

24. Events after the reporting date ...................................................................... 79

Annual Report 2023

Page 35

Consolidated statement of profit or loss

Amounts in NOK thousands except per share dat

Not

2023 2022

Other revenues 6 123 10 002

Total revenue 123 10 002

Research and development expenses 7,8

-49 890 -47 228

Payroll and related expenses 7,8,9,10,11

-34 442 -52 238

Other operating expenses 7,8,12

-14 522 -11 454

Depreciation, amortizations and write downs 15,16,17 -1 773 -392 673

Total operating expenses -100 626 -503 593

Operating profit/loss (-) -100 503 -493 591

Finance income 13

1 541 3 360

Finance expense 13,21

-11 774 -5 097

Net finance income (expense) -10 233 -1 737

Loss before income tax -110 736 -495 328

Income tax income/(expense) 14

- 62 430

Loss for the period -110 736 -432 898

Earnings/loss (-) per share

Basic and dilutive earnings/loss (-) per share 20 -16.33 -2.30

Consolidated Statement of comprehensive income

Amounts in NOK thousands exce

Not

2023 2022

Income/loss (-) for the period -110 736 -432 898

Items that may be reclassified to profit or

Exchange differences arising from the

translation of forei

n o

erations

-4 183 13 626

Total comprehensive income/loss (-) for

the period

-114 919 -419 273

Annual Report 2023

Page 36

Consolidated statement of financial position

Amounts in NOK thousands Not

31.12.2023 31.12.2022

ASSETS

Intangible assets 15

13 22

Property, plant, and equipment 16

- 5 035

Right-of-use assets 17 - 1 246

Total non-current assets 13 6 302

Receivables 13,18

5 872 28 097

Cash and cash equivalents 19

22 250 66 015

Total current assets 28 122 94 112

TOTAL ASSETS 28 135 100 414

EQUITY AND LIABILITIES

Shareholders’ equity

Share capital 20 4 484 18 847

Share premium reserve - -

Other reserves - 63 780

Retained earnings -140 248 -123 672

Translation differences 39 427 43 611

Total equity -96 336 2 566

Non-current liabilities

Interest-bearing liabilities 21

- 57 433

Deferred tax 14

- -

Lease liabilities 17 - -

Total non-current liabilities - 57 433

Amounts in NOK thousands Not

31.12.2023 31.12.2022

Current liabilities

Convertible bond 23 44 500 -

Interest-bearing liabilities 21,22 66 153 4 531

Short-term lease liabilities 17,22 - 1 455

Trade payables 22 3 450 11 383

Accrued public charges 22 1 673 3 074

Other current liabilities 22 8 696 19 971

Total current liabilities 124 471 40 415

TOTAL EQUITY AND LIABILITIES 28 135 100 414

Oslo, 25 April 2024

The Board of Directors of Circio Holding ASA

Damian Marron Thomas Falck Diane Mellett

Chairperson of the Board Board member Board member

Erik Digman Wiklund

Chief Executive Officer

Annual Report 2023

Page 37

Consolidated statement of changes in equity

Amounts in NOK thousands Note

ital

remium

Other

reserves

Translation

differences

Retained earnings

(

accumulated

Total

uit

Balance at 31 December 2021 18 833 59 620 29 985 309 289 417 726

Loss for the period

-432 898

Exchange differences arising from the translation of foreign operations

13 626 - 13 626

Other comprehensive income/loss, net of tax -

Total comprehensive income for the period 13 626 -432 898 -419 273

Transaction costs – Acquisition of a subsidiary

-20

Share issuance, employee share options & RSU’s

20 15 5

Transaction costs – Share based payments

-47

Recognition of share-based payments & RSU's 11 4 160 4 160

Reclassification of Share premium

-62 -

Balance at 31 December 2022

18 847

63 780

43 611

-123 672

2 566

Loss for the period -110 736 -110 736

Exchange differences arising from the translation of foreign operations -4 183 - -4 183

Other comprehensive income/loss, net of tax - - -

Total comprehensive income for the period -4 183 -110 736 -114 919

Share issuance, employee share options & RSU’s 20 10 10

Transaction costs – Share based payments -

Recognition of share-based payments & RSU's 11 1 523 1 523

Share issuance - Convertible bonds 2 820 11 680 14 500

Transaction cost - Convertible bonds -17 -17

Capital decrease - Reverse split -17 193 -7 810 25 003 -

Reclassification of Other reserves -57 493 57 493 -

Reclassification of Share premium -11 664 11 664 -

Balance at 31 December 2023 4 484 - - 39 427 -140 248 -96 336

Annual Report 2023

Page 38

Consolidated statement of cash flow

Amounts in NOK thousands Not

2023 2022

Cash flow from operating activities

Loss before income tax -110 736 -495 328

Adjustments for:

Finance income 13

-1 541 -3 360

Finance expense 13

11 774 5 097

Interest received 13

658 536

Other finance income/expense 13

-427 -247

Share option and RSU expense 11

1 523 4 160

Depreciation, amortizations and write downs 16,17

1 773 392 673

Change in receivables 18

28 225 -18 890

Change in other current liabilities 22

-20 446 6 517

Net cash flow from /(used in) operating activities -89 196 -108 841

Cash flow from investing activities

Purchases of property, plant, and equipment (PPE) 16 -193 -4 935

Purchases of intangible assets 15 - -24

Sale of assets 16 3 140 -

Net cash received from/(paid in) investing activities

2 947 -4 959

Cash flow from financing activities

Repayment of borrowings 21 -2 712 -2 086

Repayment of lease liabilities 17 -1 496 -1 515

Interest paid 13

-244 -680

Payment for share issue cost – Rights issue, Private Placement and repair offering - -20

Proceeds from convertible bond 23 59 000 -

Payment - convertible bond fees 23 -12 630 -

Proceeds from exercise of share options & RSUs 20

10 20

Payment for share issue cost – share options & RSUs - -47

Net cash generated from financing activities 41 929 -4 328

Net increase/(decrease) in cash and cash equivalents

-44 321

-118 129

Net exchange gain/loss on cash and cash equivalents 555 2 462

Cash and cash equivalents at beginning of period 66 015 181 682

Cash and cash equivalents at end of period 19 22 250 66 015

Annual Report 2023

Page 39

1. General information

Circio ("the Company") and its subsidiaries (together the Group) is a biotechnology company

developing novel circular RNA and immunotherapy medicines.

The Group has established a unique circular RNA (circRNA) platform to develop novel circRNA

medicines for rare disease, vaccines, and cancer. The proprietary circVec technology is based on a

modular genetic cassette design for efficient biogenesis of multifunctional circRNA from DNA and

viral vectors, which can be deployed for many purposes. The circVec platform has demonstrated

enhanced and more durable protein expression than classic mRNA vector systems and has the

potential to become the new gold-standard for DNA and virus-based therapeutics in the future. The

circRNA R&D activities are being conducted by the wholly owned subsidiary Circio AB based atthe

Karolinska Institute in Stockholm, Sweden.

In addition, the Group is developing a cancer vaccine, TG01, targeting KRAS driver mutations. TG01 is

currently being tested in three clinical trials: RAS-mutated pancreatic and lung cancer and lung and

non-resectable pancreatic cancer in the USA, and multiple myeloma in Norway. These studies are

being run through academic collaborative networks, supported by prestigious research grants from

Innovation Norway and the Norwegian Research Council, creating read-outs and future optionality for

the program at low cost to Circio.

The Company is a Norwegian public limited liability company listed on the Oslo Stock Exchange in

Norway. On 1 January the Company changed office location from Vollsveien 19, 1366 Lysaker,

Norway to St. Olavs Plass 5, 0165 Oslo, Norway. The change of address in the Articles of association

is awaiting approval by the Annual General Meeting in June 2024.

These financial statements have been approved for issue by the Board of Directors on 25 April 2024

and are subject to approval by the Annual General Meeting in June 2024.

2. Summary of material accounting principles

The principal accounting policies applied in the preparation of these consolidated financial

statements are described in the respective note, or if not, set out below. These policies have been

consistently applied to all the years presented, unless otherwise stated.

Amounts are in thousand Norwegian kroner unless stated otherwise.

Functional currency

The functional currency is determined in each entity in the Group based on the currency within the

entity's primary economic environment. Transactions in foreign currency are translated to functional

currency using the exchange rate at the date of the transaction. At the end of each reporting period

foreign currency monetary items are translated using the closing rate, non-monetary items that are

measured in terms of historical cost are translated using the exchange rate at the date of the

transaction and non-monetary items that are measured at fair value in a foreign currency are

translated using the exchange rates at the date when the fair value was measured. Changes in the

exchange rate are recognized continuously in the accounting period.

Presentation currency

The Group’s presentation currency is NOK. This is also the parent company’s functional currency. The

statement of financial position figures of entities with a different functional currency are translated at

the exchange rate prevailing at the end of the reporting period for balance sheet items, including

goodwill, and the exchange rate at the date of the transaction for profit or loss items. The monthly

average exchange rates are used as an approximation of the transaction exchange rate where the

rate at the date of transaction is not available. Exchange differences are recognized in other

comprehensive income (“OCI”).

When investments in foreign subsidiaries are sold, the accumulated translation differences relating to

the subsidiary attributable to the equity holders of the parent are recognized in the statement of

Annual Report 2023

Page 40

comprehensive income. When a loss of control, significant influence or joint control is present the

accumulated exchange differences related to investments allocated to controlled interests is

recognized in profit or loss.

When a partial disposal of a subsidiary (not loss of control) is present the proportionate share of the

accumulated exchange differences is allocated to non-controlling interests.

2.1 Basis for preparation of the annual accounts

The consolidated financial statements of Circio Holding ASA have been prepared in accordance with

IFRS ® Accounting Standards (IFRS) as adopted by the European Union, as well as Norwegian

disclose requirements listed in the Norwegian Accounting Act.

The consolidated financial statements are based on historical cost.

The consolidated financial statements have been prepared on the basis of uniform accounting

principles for similar transactions and events under otherwise similar circumstances.

2.2 Accounting principles

Foreign exchange

The Group record transactions at initial recognition based on the exchange rate at the date of the

transaction. If the exchange rate at the date of transaction is not available, average monthly

exchange rate in the month of transaction is used. The date of a transaction is the date on which the

transaction first qualifies for recognition in accordance with International Financial Reporting

Standards. However, if exchange rates fluctuate significantly, the use of the average rate for a period

may be inappropriate and an exchange rate closer to transaction date is used.

Any exchange differences are recognized in statement of profit or loss under financial items in the

period in which they arise.

2.3 Adoption of new and revised IFRS standards

Standards and interpretations affecting amounts reported in the current period

All relevant new and revised IFRSs and IFRIC interpretations that are mandatory for periods

commencing 1 January 2023 and earlier have been adopted for all periods presented in these

financial statements.

The Group has applied the following amendments for the first time for their annual reporting period

commencing 1 January 2023:

Insurance contracts – Amendments to IFRS 17

Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2

Definition of Accounting Estimates – Amendments to IAS 8

Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS

12 International Tax Reform – Pillar Two Model Rules (top-up tax).

The amendments listed above did not have any impact on the amounts recognized in prior periods

and are not expected to significantly affect the current or future periods.

None of the other new standards, revised standards, amended standards or interpretations have a

material impact on the Group’s overall results and financial position.

Standards and interpretations in issue but not yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory

for 31 December 2023 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 and on foreseeable future transactions.

2.4 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its

subsidiaries. As of 31 December 2023, Targovax Solutions AS located in Oslo Norway, Targovax OY,

located in Espoo, Finland, and Circio AB located in Stockholm, Sweden is 100% owned and controlled

subsidiaries by Circio Holding ASA.

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement

with the investee and has the ability to affect those returns through its power over the investee.

Specifically, the Group controls an investee if, and only if, the Group has:

Power over the investee (i.e. existing rights that give it the current ability to direct the relevant

activities of the investee).

Annual Report 2023

Page 41

Exposure, or rights, to variable returns from its involvement with the investee

The ability to use its power over the investee to affect its returns

In general, there is a presumption that a majority of voting rights results in control. To support this

presumption and when the Group has less than a majority of the voting or similar rights of an

investee, the Group considers all relevant facts and circumstances in assessing whether it has power

over an investee, including:

The contractual arrangement(s) with the other vote holders of the investee

Rights arising from other contractual arrangements

The Group’s voting rights and potential voting rights

The Group re-assesses whether it controls an investee if facts and circumstances indicate that there

are changes to one or more of the three elements of control. Consolidation of a subsidiary begins

when the Group obtains control over the subsidiary and ceases when the Group loses control of the

subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the

year are included in the consolidated financial statements from the date the Group gains control until

the date the Group ceases to control the subsidiary.

Profit or loss and each component of OCI are attributed to the equity holders of the parent of the

Group and to the non-controlling interests, even if this results in the non-controlling interests having a

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, repair offerings and the initial public offering in connection with the listing of the

company’s shares on Oslo Stock Exchange in 2016.

In April 2024, the Group intends to raise around NOK 50-60 million in Q2 2024. A process to undertake

a partially underwritten rights issue was initiated on 17 April 2024 with Redeye as financial advisor.

Atlas is supportive of and intends to participate in the financing and the members of the board and

management have pre-committed to participate with around NOK 2 million in the fundraising. The

rights issue will, if successful, provide Circio with a cash runway to Q2 2025 and enable delivery of

major pre-clinical circVec milestones, including in vivo proof-of-concept for its lead AAV gene therapy

Annual Report 2023

Page 42

program in AATD and generation of circVec platform data with the aim to put Circio in position to

enter its first revenue-generating business development deal.

The Board and management therefore has a reasonable expectation that sufficient capital to ensure