Gigante Salmon AS

Quarterly Report • Apr 26, 2023

REPORT FOR

THE FIRST QUARTER OF

Highlights

THE FIRST QUARTER OF 2023

• Insurance agreement with Gjensidige Forsikring. Covers project implementation, facilities and biomass during the operational phase
• Initial disbursement from long-term construction loan granted by Sparebank1 Nord-Norge and guaranteed by Eksfin
• Pouring of concrete for walls and floor of production basin 3 underway
• Delivery of fiberglass water intake pipes

The report has been prepared in both Norwegian and English. In case of any discrepancy between the two versions, the Norwegian version shall prevail.

Photo: K. B. Andersen/Wilhelmsen Port Services AS and Gigante Salmon

EVENTS AFTER BALANCE SHEET DATE:

• Folla Maritime delivered a boat for staff transport

TABLE OF CONTENTS

3 Highlights

6 Project implementation

8 Operational review

10 Financial review

13 Statement by the board and CEO

14 Report for the first quarter of 2023 Gigante Salmon - Group

18 Notes

22 Report for the first quarter of 2023 Gigante Salmon AS

26 Report for the first quarter of 2023 Gigante Salmon Rødøy AS

We draw water from a depth of 20 meters (F) through 10 risers that are outfitted with preinstalled submersible pumps. Having multiple intake pipes allows us to collect the desired amount of water at all times, allowing us to maintain water flow in the event that an unforeseen incident occurs with one of the pumps.

We are establishing three production basins (1, 2, 3) in the bedrock. Each will be about five metres deep and all four walls of the production basin, as well as the floor, will be lined with concrete. The concrete will itself be covered by a liner / membrane that will provide the fish with a healthy living environment, in accordance with the company's ambitions, as well as Food Safety Authority requirements. This set-up offers robust production units that are not affected by sea level, as well as simplified operation, maintenance and cleaning.

Two production basins will contain three raceways, while the third will contain four (A). The raceways are between 110 and 214 meters long and are fitted with a dividing wall (B) in the centre, which facilitates the circulation of water.

Our breeding facility is built to give the fish the best environment in which to live and grow during the entire production phase, thanks to a continuous inflow of fresh seawater and a structure that provides ample current to swim against.

Each of the three production basins is physically separated, and they are considered to be separate infection zones. A sluice will be installed between the production units, partly to maintain biosecurity. Between each release of fish, the basins will be taken out of service for a month for preventive maintenance, cleaning, washing and disinfection.

The water enters the tank from a point at the centre of one of the short ends of the raceways (C). Flow distributors installed at selected positions in the circular-flow raceways will help maintain an optimal rate of flow inside the raceway.

Perforated walls will divide the raceways from each other (E). This will ensure a continued flow of water to the fish in the entire production basin, should there be an unforeseen problem with the water supply.

B

E

C

D

F

A

A

A

A

1

2

3 PRODUCTION BASIN

The outlet from each raceway will also be centrally located and will lead to the basin's drainage channel (D), as required, as well as predefined discharge points, as stipulated by our discharge permit.

In fewer than five months, production basin 3 will be taken into use. The date is approaching fast, and this places demands on our planning and managing of the remaining work if it is to be completed satisfactorily. It is easy to see that there is a lot going on at the facility, and it is obvious that we are making good progress.

Project implementation

sought in collaboration with relevant suppliers.

Some detailed engineering work is uncompleted. This is mainly related to operations that do not affect the planned start date.

A few minor contracts remain unagreed, but these will be signed shortly. The most important of these are for the installation of risers, the delivery and installation of dividers between circular flow raceways and partitions, as well as the establishment of a temporary land / sea power cable.

As previously reported, a conscious design was choice made to cover the walls and floor of basin 3 with concrete and that all submerged surfaces will be covered by a membrane or liner. This decision was an important aspect of the preparatory work we did with our insurer, Gjensidige Forsikring. This is taken as a sign that Gjensidige Forsikring believes in our design and technical aspects of the project. Gjensidige Forsikring is insuring the project during the establishment phase; once operational, it will insure the fish and the facilities.

In March, Gigante Salmon Rødøy AS began drawing on the NOK 204 million long-term construction loan granted by Sparebank1 Nord-Norge. The loan was granted on 22 February 2021 and is guaranteed by Eksfin.

The remaining part of the recruitment process is now being worked on, and the plan is to get the last agreements in place by the end of April, so that operational activities are fully staffed and ready by 1 August.

Still, we cannot be oblivious to — or fail to take into account — circumstances that are beyond our control yet could affect progress. Russia's war against Ukraine has had economic consequences that we cannot ignore.

There is currently nothing to indicate any change to previously reported cost increases and challenging delivery times for power-related elements of the project. Costreducing measures that do not affect the health and well-being of the fish raised in the facility are still being

Preparatory work, including mass transfer, creating a level floor in basin 3 and preparation of technical areas, has started and is expected to be completed on schedule.

Rock stabilisation in the area around basin 3 is close to comple tion; only a few minor aspects are unfinished.

Concrete is now being poured for the entire production facility, and the work is expected to proceed according to schedule. A third of the supports for the partitions that will separate the longitudinal raceways, as well as for the internal dividers are in place. During the first quarter, concrete was delivered to the con struction site, but an on-site mixing plant will soon be operational.

Electrical work and installation of electrical equipment has begun. Materials and equipment are prefabricated by the supplier and tested before being sent to Rosøy for installation.

The rockfill that will serve as the foundation for the risers and pumps is expected to be completed by the end of April. Installation of the risers is planned for early June. The water intake pipes were delivered in Mar ch, and the work is planned to start towards the end of April.

Housing capacity at the constructi on site has been expanded conside rably. A new 12-person accommoda tion unit has been acquired and is in place, bringing the number of living spaces to 30. In addition, the canteen has been enlarged in anticipation of the increased activity level and num ber of employees at the facility.

A conduit for the submarine cable has been laid. The cable will serve as a temporary power supply between Rødøy and Lille Indre Rosøy until a permanent power source has been installed.

Operational review

All blasting was finished on schedule in February. The concrete for basin 3 — which will be taken into use in September in connection with the start of production

As the group is still in a development phase, Q1 sales revenue was again this year kNOK 0.

Other operating income of kNOK 140 relates to the hiring out of employees to Salten N950 AS. Ope rating costs in the first quarter were kNOK 1.343, up from kNOK 1.339 during the year-ago period. The operating profit for the period was kNOK -1.203.

Total cash flow for the group in the first quarter was kNOK -52.342. The discrepancy with the operating result is mainly due to changes in other accrued income and expen diture. Total investments in the group in the first quarter amounted to kNOK 69.030, of which kNOK 67.964 is connected to the group's development project in Rødøy and the remainder to payments due for previous investment costs.

The group's liquid assets were kNOK 129.755 as of 31 March. The group's ability to self-finance invest ments is assessed as good.

As of 31 March, long-term debt amounted to 1.25% of total group debt. This is expected to increase throughout the establishment phase. Long-term bank financing for Gi gante Salmon Rødøy's development was approved in 2021, and the first disbursement was made during Q1 of 2023. The construction loan is long-term financing granted by Sparebank1 Nord-Norge. Eksfin has issued a guarantee covering 50% of the loan amount.

The group's financial position is good, and, as of 31 March, the group is able to repay short-term debt using its most liquid funds.

Total capital at the end of Q1 was kNOK 322.966, compared with kNOK 283.899 at the end of Q1 2022. Equity as of 31 March was 279.759t (86.62%), compared with kNOK 279.704 (88%) as of 31 March 2022.

The complete income statement, balance sheet, cash flow statement and notes follow below.

The initial disbursement from the construction loan — in the amount of kNOK 542 — was made at the end of March.

Financial review

RESULT FOR THE FIRST QUARTER OF 2023

The board of directors and the CEO hereby declare that the consolidated accounts for the period 1 January 2023-31 March 2023 have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles in Norway, and provide a correct picture of the company's assets, liabilities, financial status and income and expenses as a whole. We further declare that the Q1 update includes an accurate summary of the company's most important activities up to the presentation of the results.

Statement by the board and CEO

Bodø 26th April 2023

Eirik Sørgård Chairman of the board

Helge E. W. Albertsen CEO

Kristin Ingebrigtsen Member of the board

Liv Monica Stubholt Member of the board

Kjell Lorentsen Member of the board

Income statement

(Amount in kNOK)

Income statement	Note	Q1 2023	Q1 2022	2022
Other income		140	-	151
Total income		140	-	151
Employee benefits expense		427	454	359
Depreciation and amortisation expenses	1	25	24	96
Other operating expenses		891	861	3 408
Total operating expenses		1 343	1 339	3 864
Net income		-1 203	-1 339	-3 712
Interest income		1 288	585	4 662
Interest expenses		-	29	29
Other financial expense		-	-	4
Net finances		1 288	556	4 629
Profit before income tax		85	-783	917
Income tax expense		30	-164	-4 667
Net profit or loss for the period	2	55	-619	5 584
To minority interests		-	-	-
To majority interests		55	-619	5 584
Disposal
Transferred from/to equity		55	-619	5 584

Cash flow statement

(Amount in kNOK)

Cash flow from operation	Q1 2023	Q1 2022	2022
Profit before income taxes	85	-783	917
Taxes paid	-	-	2 429
Depreciation	25	24	96
Change in trade creditors	-331	-	-350
Change in trade creditors	143	-6 511	-1 636
Change in other provisions	16 224	4 362	-12 349
Net cash flow from operations	16 146	-2 909	-10 893
Cash flow from investments
Purchase of fixed assets	-67 964	-23 088	-65 714
Proceeds from short term loans	-1 066	-	-
Netto kontantstrøm fra investeringsaktiviteter	-69 030	-23 088	-65 714
Cash flow from financing
Proceeds from issuance of equity	542	-	-
Proceeds from long term loans	542	-	-
Net cash flow from financing	542	-	-
Net change in cash and cash equivalents	-52 342	-25 997	-76 607
Cash and cash equivalents at the beginning of the period	182 097	258 704	258 704
Cash and cash equivalents at the end of the period	129 755	232 707	182 097
Which exists of: Cash and bank deposits	129 755	232 707	182 097

Report for the first quarter of 2023

GIGANTE SALMON AS - GROUP

Balance sheet

(Amount in kNOK)

Equity and liabilities	Note	Q1 2023	Q1 2022	2022
Share capital	3	105 556	105 556	105 556
Share premium		165 734	165 734	165 734
Other paid-in equity		-	114	114
Total paid-in equity	2	271 290	271 404	271 404
Other equity		8 469	2 096	8 299
Total retained earnings	2	8 469	2 096	8 299
Minority interests		-	-	-
Total equity	2	279 759	273 501	279 704
Other non-current liabilities		542	-	-
Total other non-current liabilities		542	-	-
Trade creditors		25 069	6 438	37 069
Public duties payable		260	143	189
Other short-term liabilities		17 334	3 817	630
Total current liabilities		42 663	10 398	37 888
Total liabilities		43 205	10 398	37 888

Equity and liabilities	Note	Q1 2023	Q1 2022	2022
Share capital	3	105 556	105 556	105 556
Share premium		165 734	165 734	165 734
Other paid-in equity		-	114	114
Total paid-in equity	2	271 290	271 404	271 404
Other equity		8 469	2 096	8 299
Total retained earnings	2	8 469	2 096	8 299
Minority interests		-	-	-
Total equity	2	279 759	273 501	279 704
Other non-current liabilities		542	-	-
Total other non-current liabilities		542	-	-
Trade creditors		25 069	6 438	37 069
Public duties payable		260	143	189
Other short-term liabilities		17 334	3 817	630
Total current liabilities		42 663	10 398	37 888
Total liabilities		43 205	10 398	37 888
Total equity and liabilities		322 966	283 899	317 592

Balance sheet

(Amount in kNOK)

Assets Note	Q1 2023	Q1 2022	2022
Deferred tax asset	6 048	4 005	6 078
Total intangible assets	6 048	4 005	6 078
Land, buildings and other property	165 567	33 114	108 981
Ships	753	843	776
Fixtures/fittings, tools, office machinery and equipment	21	15	24
Total tangible assets 1	166 341	33 972	109 781
Total fixed assets	172 389	37 977	115 859
Trade receivables	175	-	350
Other receivables	20 647	13 216	19 285
Total receivables	20 822	13 216	19 635
Cash and bank deposits	129 755	232 707	182 097
Total current assets	150 577	245 922	201 733
Total assets	322 966	283 899	317 592

ACCOUNTING PRINCIPLES

The quarterly accounts have been prepared in compliance with the Accounting Act and accounting principles generally accepted in Norway, including principles for interim accounting (NRS 11). All significant accounting principles are described in the Groups annual report for 2022.

The annual report is available at www.gigantesalmon.no. For a complete statement of the accounting principles, please see the annual report.

The quarterly report is non-audited.

Notes

NOTE 1 - FIXED ASSETS

NOTE 2 - SHAREHOLDERS' EQUITY

Gigante Salmon is currently constructing its land-based fish farm at Lille Indre Rosøy in Rødøy kommune. This explains the recent additions of fixed assets.

*The Group has capitalized own work with kNOK 964.

CHANGE IN PLAN OF DEPRECIATION There has not been a change in plan of depreciation.

NOTE 3 - SHARE CAPITAL AND SHAREHOLDER INFORMATION

The share capital of NOK 105 556 037 consists of 105 556 037 shares with nominal value of NOK 1 each.

The board in Gigante Salmon AS has power of attorney to increase the share capital on NOK 10 000 000, equals 10 millions new shares, through one or more capital expenditures with issuance of new shares. The power of attorney was given on ordinary General Assembly in 2022 and last until ordinary General Assembly in 2024, though no longer then 1. of May 2024.

LIST OF 20 MAJOR SHAREHOLDERS AT 31.03.23:

Shareholder	Number of shares	Ownership
Gigante Havbruk AS	64 238 000	60,86 %
T Kolstad Eiendom AS	7 272 728	6,89 %
Helgeland Invest AS	2 727 272	2,58 %
Torghatten Aqua AS	2 727 272	2,58 %
Ravi Investering AS	1 970 125	1,87 %
J.P. Morgan SE	1 832 818	1,74 %
Olav Olsen Holding AS	1 500 000	1,42 %
Iha Invest AS	1 455 000	1,38 %
Verdipapirfondet Nordea Avkastning	1 221 883	1,16 %
Kulta Invest AS	1 200 000	1,14 %
Commuter 2 AS	1 090 909	1,03 %
Yannick AS	1 040 000	0,99 %
Limt AS	910 000	0,86 %
Nyhamn AS	909 091	0,86 %
Dnor AS	908 132	0,86 %
Joe Invest AS	794 553	0,75 %
Oxvold Invest AS	784 516	0,74 %
Ubs Switzerland AG	680 737	0,64 %
Maria Olaisen AS	545 455	0,52 %
Hausta Vekst AS	545 454	0,52 %
Occasione By Olaisen AS	545 454	0,52 %
Other owners	10 656 638	10,10 %
Total	105 556 037	100,0 %

SHARES OWNED BY THE MANAGEMENT AND RELATED PARTIES OF THE MANAGEMENT

Name	Position	Number of shares	Ownership
Helge E. W. Albertsen	CEO	200 000	0,19 %
Rune Johansen	CFO	310 000	0,29 %
Linda Storholm	CCO	15 500	0,01 %
Eirik Sørgård	Chairman of the Board	200 000	0,19 %
Kristin Ingebrigtsen	Member of the Board	15 000	0,01 %

Eirik Sørgård owns 200 000 shares through his wholly owned company Pronord AS. Rune Johansen owns 35 000 shares privately and 275 000 shares through his wholly owned company Nord-Norsk Eiendom AS. Kjell Lorentsen has controlling influence through Gigante Havbruk AS who owns 64 238 000 shares (ownership 60,86 %).

	Buildings and land	Ships	Movables	Total fixed assets
Purchase cost pr. 31.12.22	108 981	895	33	109 909
Accumulated depreciation 31.12.22	-	119	9	128
Net book value 31.12.22	108 981	776	24	109 781
Additions*	56 586	-	-	56 586
Purchase cost 31.03.23	165 567	895	33	166 495
Accumulated depreciation 31.03.23	-	141	12	153
Net book value 31.03.23	165 567	753	21	166 341
Depreciation in Q1 2023	-	22	3	25

The Group owns two islands that are not depreciated.

Equity changes in the period	Share capital	Share premium	Other paid-in equity	Other equity	Total
Equity 31.12.22	105 556	165 734	114	8 299	279 704
Profit for Q1	0	0	0	55	55
Equity 31.03.23	105 556	165 734	114	8 354	279 759

NOTE 4 - OVERVIEW OF AND TRANSACTIONS WITH RELATED PARTIES

	Related party	Ownership
a)	Gigante Havbruk AS	Eier Gigante Salmon 61%
b)	KapNord AS	Gigante Havbruk eier 51%
c)	Polarplast AS	Gigante Havbruk eier 40%
d)	Gildeskål Forskningsstasjon AS	Gigante Havbruk eier 100%
e)	Salten Aqua AS	Gigante Havbruk eier 35%
f)	Salmon Center AS	Gigante Havbruk eier 100%

TRANSACTIONS WITH RELATED PARTIES

	Amount	Detail of transaction
a)	208	Purchase of hours in connection with the design and production of
		The Groups land-based fish farm.
b)	164	Purchase of hours in connection with the design and production of
		The Groups land-based fish farm.
c)	358	Purchase of hours in connection with the design and production of
		The Groups Rødøy AS sitt landbaserte oppdrettsanlegg
d)	320	Purchase of hours in connection with the design and production of
		The Groups land-based fish farm and rental of boat.
e)	112	Purchase of admin fees
f)	18	Office rental

The design and production is capitalized at the line "Land, buildings and other property".

Income statement

(Amount in kNOK)

Report for the first quarter of 2023

Income statement	Note	Q1 2023	Q1 2022	2022
Other income		758	694	3 535
Total income		758	694	3 535
Employee benefits expense		1 139	1 148	3 592
Depreciation and amortisation expenses		3	2	7
Other operating expenses		735	825	2 767
Total operating expenses		1 878	1 976	6 366
Net income		-1 119	-1 281	-2 831
Interest income		660	62	1 835
Interest expenses		-	29	29
Other financial expense		-	-	2
Net finances		660	33	1 804
Profit before income tax		-459	-1 247	-1 027
Income tax expense		-101	-266	-5 131
Net profit or loss for the period		-358	-981	4 104
To minority interests		-	-	-
To majority interests		-358	-981	4 104
Disposal
Transferred from/to equity		-358	-981	4 104

GIGANTE SALMON AS

Balance sheet

(Amount in kNOK)

Assets	Note	Q1 2023	Q1 2022	2022
Deferred tax asset		6 778	4 242	6 677
Total intangible assets		6 778	4 242	6 677
Land, buildings and other property		1 437	1 284	1 343
Movables		21	15	24
Total tangible assets		1 458	1 299	1 367
Investments in subsidiaries		192 100	192 100	192 100
Total fixed assets		200 336	197 641	200 144
Trade receivables		555	-	-
Other receivables		345	207	112
Total receivables		900	207	112
Cash and bank deposits		77 263	76 245	78 494
Total current assets		78 163	76 452	78 606
Total assets		278 499	274 092	278 750

Balance sheet

(Amount in kNOK)

Equity and liabilities Note	Q1 2023	Q1 2022	2022
Share capital	105 556	105 556	105 556
Share premium	165 734	165 734	165 734
Other paid-in equity	-	114	114
Total paid-in equity	271 290	271 404	271 404
Other equity	6 388	1 303	6 388
Uncovered loss	-245	-	-
Total retained earnings	6 143	1 303	6 388
Minority interests	-	-	-
Total equity	277 434	272 708	277 793
Trade creditors	545	625	355
Public duties payable	156	143	131
Other short-term liabilities	363	617	472
Total current liabilities	1 064	1 385	958
Total liabilities	1 064	1 385	958
Total equity and liabilities	278 499	274 092	278 750

Income statement

(Amount in kNOK)

Report for the first quarter of 2023

GIGANTE SALMON RØDØY AS

Balance sheet

(Amount in kNOK)

140
	-	11
140	-	11
22	22	90
156	36	641
178	58	730
-38	-58	-720
628	523	2 827
-	-	0
-	-	2
628	523	2 825
589	464	2 105
131	102	464
458	362	1 641
-	-	-
458	362	1 641
458	362	1 641

Assets	Note	Q1 2023	Q1 2022	2022
Land, buildings and other property		164 335	31 831	107 800
Ships		753	843	776
Total tangible assets	1	165 088	32 673	108 576
Total fixed assets		165 088	32 673	108 576
Trade receivables		175	-	350
Other receivables		20 302	13 009	19 236
Total receivables		20 477	13 009	19 586
Cash and bank deposits		52 492	156 462	103 603
Total current assets		72 968	169 471	123 189
Total assets		238 057	202 144	231 765
Equity and liabilities	Note	Q1 2023	Q1 2022	2022
Share capital		19 230	19 230	19 230
Share premium		172 870	172 870	172 870
Total paid-in equity		192 100	192 100	192 100
Other equity		2 531	793	2 072
Total retained earnings		2 531	793	2 072
Total equity		194 631	192 893	194 172
Deferred tax		730	237	599
Other non-current liabilities		542	-	-
Total other non-current liabilities		542	-	-
Trade creditors		25 079	5 814	36 507
Public duties payable		104	-	153
Other short-term liabilities		16 971	3 200	332
Total current liabilities		42 154	9 014	36 993
Total liabilities		43 426	9 251	37 592
Total equity and liabilities		238 057	202 144	231 765

NOTE 1 - FIXED ASSETS	Buildings and land	Ships	Total fixed assets
Purchase cost pr. 31.12.22	107 800	895	108 695
Accumulated depreciation 31.12.22	-	119	119
Net book value 31.12.22	107 800	776	108 576
Additions*	56 535	-	56 535
Purchase cost 31.03.23	164 335	895	165 230
Accumulated depreciation 31.03.23	-	141	141
Net book value 31.03.23	164 335	753	165 088
Depreciation in Q1 2023	-	22	22

The Group owns two islands that are not depreciated.

Gigante Salmon is currently constructing its land-based fish farm at Lille Indre Rosøy in Rødøy kommune. This explains the recent additions of fixed assets.

26 1. QUARTERLY REPORT GIGANTE SALMON 27 There has not been a change in plan of depreciation.

*The Group has capitalized own work with kNOK 964.

CHANGE IN PLAN OF DEPRECIATION