Flyr AS

Share Issue/Capital Change • Jan 30, 2023

Flyr AS - Unsuccessful attempt to raise capital, the board of directors to consider alternatives for continued operations

Flyr AS - Unsuccessful attempt to raise capital, the board of directors to consider alternatives for continued operations

Reference is made to the stock exchange announcement by Flyr AS (the "Company")

on 10 November 2022 regarding (i) the successfully placed private placement of

25,000,000,000 new shares with a subscription price of NOK 0.01 to raise gross

proceeds of NOK 250 million (the "Private Placement"), (ii) the subsequent

offering of up to NOK 100 million with a subscription price of NOK 0.01, and

(iii) the allocation of independent subscription rights with a subscription

price of NOK 0.01 to participants in the Private Placement and the subsequent

offering to raise up to NOK 350 million (together, the "November Financing

Plan").

In connection with the Private Placement the Company communicated that it was

dependent on raising further capital from the November Financing Plan by the end

of Q1 2023 to pay the Emission Trading System quotas (EU ETS) in April 2023 and

to ramp-up for the coming spring and summer based on the Company's business plan

and market assumptions.

Following completion of the Private Placement the share price of the Company has

traded considerably below the subscription price of the November Financing Plan,

which meant that succeeding with the November Financing Plan became increasingly

unlikely. As such, the Company had to consider alternatives to secure its

financial needs.

The Company's management and board of directors have worked intensively to

achieve a viable long-term solution for the Company's operations, which would

strengthen the business plan of the Company and increase the chances to raise

the necessary liquidity to sustain operations. In cooperation with its financial

advisors, the Company has explored a number of different alternatives, including

increased wet lease operations and other strategic alternatives.

Due to the global shortfall in available aircraft, the Company experienced

stronger than expected demand for wet lease and charter operations. In mid

-December 2022 the Company initiated discussions with a European airline

regarding a wet lease arrangement for the production of 6 aircraft for the

summer season 2023, with commencement at the end of March 2023. A wet lease

agreement for 6 aircrafts with a reputable partner would considerably de-risk

the business case and improve the chances of succeeding with a new financing

plan.

The commercial terms of a wet lease agreement for 6 aircraft with a European

airline was agreed in principle on 23[rd] December 2022, but due to the

uncertainty of the November Financing Plan, signing of the agreement was made

conditional on the Company securing further financing.

The evaluation done by the Company and its financial advisors was that this wet

lease agreement, which would have secured the income and a profitable operation

for 50% of the Company's fleet for the entire period from the end of March to

the end of October 2023, would significantly increase the probability of

successfully implementing a new financing plan to replace the November Financing

Plan that at this point appeared unlikely to succeed.

In order to be ready to perform its obligations under the wet lease agreement

commencing in March 2023, the Company had to reverse some of the liquidity

preserving measures it had planned and implemented, as the wet lease agreement

was considered instrumental in securing the new financing plan that would

address both the short term and long-term funding requirements of the Company.

After discussions with the Company's financial advisors Arctic Securities AS,

Carnegie AS and SpareBank 1 Markets AS (the "Managers") the Company authorised

the Managers to seek to establish an underwriting consortium for a rights issue

to raise up to NOK 330 million, to fulfil the conditions for signing of the wet

lease agreement and replenish the company's cash position.

In spite of the de-risking of the investment case, and the support from several

key shareholders, the Managers have not yet been able to raise the sufficient

market underwriting, even though a rights issue would be expected to take place

at a discount to the theoretical ex-rights share price following the capital

raise. Market conditions and continued uncertainty with regards to airline

travel and earnings through 2023 have deterred investors from committing capital

for the required period of time, in spite of the Company's wet lease

opportunities and improving tickets sale. Underwriting, or the support for a

private placement, has been sought on a confidential basis, since a non

-underwritten share issue would have been insufficiently robust given the

Company's short term financial commitments. Due to the unsuccessful process to

underwrite a rights issue or carry out a private placement, the Company is now

in a critical short term liquidity situation.

The Company and the Board will continue its efforts to explore solutions for the

Company, including exploring whether there are feasible alternatives to secure

continued operations, and will revert with further information as and when

appropriate. There is, however, no guarantee that a solution that would create a

meaningful shareholder value for the current shareholders will be found.

For further information, please contact:

Investor relations

Email: investors@flyr.com

This information is considered to be inside information pursuant to the EU

Market Abuse Regulation and is subject to the disclosure requirements according

to section 5-12 of the Norwegian Securities Trading Act. The information was

prepared by Brede Huser, CEO at Flyr AS, on the time and date provided.