AGM Information • Apr 30, 2021
AGM Information
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To the general meeting of Axxis Geo Solutions ASA
The Board of Directors in Axxis Geo Solutions ASA ("Axxis") have requested that we issue a report in our capacity as independent experts in accordance with the Norwegian Public Limited Liability Companies Act section 10-2, cf. section 2-6. This report concerns the board's proposal for a private placement by way of conversion of the sellers' receivables against Axxis. vendor payables to shares.
Axxis put forward a reconstruction proposal on 7 April 2021. In connection with this reconstruction, the Board of Directors is proposing a share capital increase by way of conversion of debt in order to strengthen the Company's balance sheet. Completion of the debt conversion is subject to approval by a sufficient majority of the company's, and that the reconstruction proposal is resolved as legally binding and enforceable pursuant to the Reconstruction Act § 52.
Some of the vendor claims proposed to be converted to equity, are currently obligations of subsidiaries within the Axxis group, to an aggregate amount of NOK 13,862,265. Any such vendor claims will be transferred from the respective subsidiaries to Axxis prior to set-off. Following such transfer, the original debtors (i.e. Axxis's respective subsidiaries) will have a corresponding debt to Axxis. The transfer of debt to Axxis is done with a view to allow for the completion of the proposed reconstruction.
The Board is responsible for the information on which this report is based, and for the valuations which constitute the basis for determining the share consideration.
Our responsibility is to prepare a report in connection with the board of directors' decision that the sellers subscribing for shares, that are set out in appendix 1 to this report, shall be allowed to settle their contribution of shares in Axxis by converting debt, and to express an opinion on whether the debt to be converted at least equals the consideration.
The remaining report is divided into two parts. The first part is a description of the debt to be converted. The second part is our opinion on whether the value of the debt to be converted at least equals the consideration.
The board of directors of Axxis will resolve a share capital increase totaling NOK 212,199,729 by issuance of 424,399,458 new shares, each with a nominal amount of NOK 0.10, at a subscription amount of NOK 0.50 per share.
NOK 139,332,764 of the outstanding debt consists of a share of the bond "Axxis Geo Solutions ASA 8.00% senior secured USD 35,000,000 bonds 2020/2022" including accrued interest, for 4 of the sellers subscribing for shares.
NOK 72,886,965 of the outstanding debt consists of unsecured vendor payables that have been incurred prior to opening of the reconstruction. The vendor payables have been incurred in connection with Axxis' ordinary operations, and they have also been examined by the reconstructor and the appointed auditor for the reconstruction estate, as part of their statutory review of claims filed in the reconstruction.
The debt to be converted will be-set off based on its nominal amount, which represents the actual payment obligation for Axxis. The subscription amount of NOK 0.50 per share, while the subscription price per share in the private placement against new shareholders is NOK 0.10 per share. This relative difference in subscription prices means that the creditors will incur a curtailment compared to the new shareholders in the company.
By set-off of the amount outstanding under the debt, Axxis will receive a total contribution at least corresponding to the consideration for the 424,399,458 new shares that are issued.
We have conducted our review and issue our statement in accordance with the Norwegian standard SA 3802-1 "The auditor's statements and reports pursuant to Norwegian company legislation". The standard requires that we plan and perform our review to obtain reasonable assurance for the fact that the value of the debt to be taken over by Axxis at least equals the agreed consideration, and that the debt to be converted is a real payment obligation.
We believe that the audit evidence we have obtained is sufficient and appropriate to constitute a basis for our opinion.
In our opinion, the debt to be converted have a value per 29 April 2021 at least equaling the agreed consideration, corresponding to an aggregate nominal amount of NOK 42,439,945.80 and aggregate share premium of NOK 169,759,783.20 on the shares that are issued.
Oslo, 29 April 2021
KWC Revisjon AS
______________________
Trond Bjerge
State Authorized Public Accountant (Norway)
Appendix 1 – Overview of debt
The translation to English has been prepared for information purposes only.
| Claim converted | Number of shares | |
|---|---|---|
| Creditor name | (NOK) | issued |
| Bond holders | ||
| Lehmkuhl Capital AS | 120 978 969,00 | 241 957 938 |
| Pentagon Freight Services AS | 9 695 781,00 | 19 391 562 |
| Evotec AS | 6 960 551,00 | 13 921 102 |
| Acel AS | 1 697 462,50 | 3 394 925 |
| Other creditors Axxis Geo Solutions ASA | ||
| SeaBird Exploration Norway AS | 11 786 931,50 | 23 573 863 |
| GMC Maritime AS v/ Kluge Advokatfirma AS | 7 159 263,00 | 14 318 526 |
| Sound Oceanics LLC | 6 672 407,50 | 13 344 815 |
| ABG Sundal Collier ASA | 5 745 899,50 | 11 491 799 |
| Langfang Dynamic Techologies CO., LTD Company | 4 569 282,00 | 9 138 564 |
| SpareBank 1 Regnskapshuset SMN AS | 4 477 772,50 | 8 955 545 |
| Pentagon Freight Services AS | 2 576 183,00 | 5 152 366 |
| Havila Holding AS | 2 400 000,00 | 4 800 000 |
| Fearnley Securities AS | 2 250 000,00 | 4 500 000 |
| Remøy Shipping AS | 1 599 655,00 | 3 199 310 |
| Impact Geo Solutions, inc | 1 228 956,00 | 2 457 912 |
| Ikatech Epuipment and Repair LLC | 1 057 475,50 | 2 114 951 |
| Evotec AS | 754 836,50 | 1 509 673 |
| Crux Advisers AS | 704 228,00 | 1 408 456 |
| Sigma IKT AS | 656 378,50 | 1 312 757 |
| RedQ AS v/ Finanstorget | 522 499,00 | 1 044 998 |
| Marine Assets Corporation DMCC | 491 006,00 | 982 012 |
| Hadrian Maritime AS | 453 687,50 | 907 375 |
| D. Danielsen AS | 400 000,00 | 800 000 |
| Sunnhordland Mek. Verksted AS | 351 265,00 | 702 530 |
| Christian Huseby | 258 101,00 | 516 202 |
| Ronja Capital AS | 255 826,00 | 511 652 |
| TRH AS | 233 251,50 | 466 503 |
| Rome AS | 225 000,00 | 450 000 |
| Nina Skage | 209 707,00 | 419 414 |
| Vibeke G. Fængsrud | 203 254,00 | 406 508 |
| Eirin Inderberg | 177 444,00 | 354 888 |
| Njål Sævik | 177 444,00 | 354 888 |
| Rome AS v/ Hasund | 166 462,00 | 332 924 |
| Workboat Safety International | 165 217,50 | 330 435 |
| Kjølås Stansekniver AS | 164 724,00 | 329 448 |
| Stette Invest | 158 898,00 | 317 796 |
| GAC Norway AS Debia Finans |
155 561,50 139 134,00 |
311 123 278 268 |
| The Leadership Advisory | 100 913,00 | 201 826 |
| ACTE IT Services Ltd. | 100 000,00 | 200 000 |
| Blueocean Marine AS | 86 108,50 | 172 217 |
| Metizoft AS | 60 916,00 | 121 832 |
| Law Office of Mark L. Carlton, PLLC | 28 637,50 | 57 275 |
| Metizoft AS | 27 550,00 | 55 100 |
| Rolf Rønningen | 21 455,00 | 42 910 |
| SL interiør & kontor AS | 19 975,00 | 39 950 |
| RS Crewing AS | 11 395,00 | 22 790 |
| Creditors where there has been a debtor transfer from group companies | ||
| Gulf Agency Company | 5 873 859,50 | 11 747 719 |
| Mediterranean Oilfield Service Company (MOSCO) | 2 067 973,50 | 4 135 947 |
| Magic Shipping Agency | 1 814 932,00 | 3 629 864 |
| Lee Parker | 4 105 500,00 | 8 211 000 |
| Totalt | 212 199 729,00 | 424 399 458 |
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