Aqua Bio Technology — Capital/Financing Update 2018

Dec 4, 2018

AQUA BIO TECHNOLOGY ASA - PRIVATE PLACEMENT - CHANGES IN MANAGEMENT TEAM

AQUA BIO TECHNOLOGY ASA - PRIVATE PLACEMENT - CHANGES IN MANAGEMENT TEAM

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR

INDIRECTLY, IN OR INTO THE United States, Canada, Australia, Japan or Hong Kong

OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION

WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO BUY, SELL

OR SUBSCRIBE FOR ANY SECURITIES DESCRIBED HEREIN.

Aqua Bio Technology ("ABT" or the "Company") is pleased to announce that it has

received binding pre-commitments to subscribe for 4,610,000 new shares (the "New

Shares") for gross proceeds of NOK 11.525 million in a conditional private

placement of minimum NOK 10.5 million and maximum NOK 15 million (the "Private

Placement"). The board of directors of the Company (the "Board") will also

propose a repair issue.

The Board has also decided to make certain changes in the Company's management

team to increase focus on sales and marketing efforts for the Company's product

offering. Going forward, current CEO Arvid Lindberg will function as Head of

Sales and Marketing and Espen Kvale will function as interim CEO through a

consultancy agreement with Espen Kvale Consulting LLC. These changes will come

into effect as soon as possible.

The Private Placement

The Private Placement is directed towards the Company's 140 largest existing

shareholders as of 4 December 2018, as registered in the Company's shareholder

register in the VPS on 6 December 2018 (the "Record Date") and the Company's

board of directors and key management (the "Eligible Investors"), however

limited upwards to 149 investors in total. Eligible Investors that wish to

participate in the Private Placement must contact the Company at

arvid@aquabiotech.no in the period between 5 December 2018 at 09.00 CET until 3

January 2019 at 16.30 CET.

The subscription price in the Private Placement has been set to NOK 2.50 per New

Share. Each investor in the Private Placement will also receive one (1) warrant

("Warrant") per New Share subscribed and allocated in the Private Placement.

Each Warrant shall give the right to require issuance of one additional share in

the Company in the period between from and including 30 June 2019 to and

including 1 September 2019 against a cash deposit of NOK 2.50 per share.

Allocation of New Shares to Eligible Investors will be determined by the

Company's board of directors on or about 4 January 2019. The number of New

Shares to be allocated to the Company's board of directors and key management,

and the allocation thereof, shall be made at the sole discretion of the

Company's board of directors. The remaining New Shares may be allocated to the

Eligible Investors up to a number of New Shares which equals to a factor of

their existing proportional shareholding and the total number of New Shares to

be allocated to the Eligible Investors. Shareholders that have pre-committed to

subscribe for New Shares for NOK 11.525 million, will on a pro rata basis (based

on their subscription commitment) have a preferential right to subscribe for New

Shares that are not subscribed for in the Private Placement. If such shares are

not allocated, then they may be allocated to other Eligible Investors based on

their proportional shareholding.

The net proceeds from the Private Placement will be used for general purposes

and working capital related to the Company's products in its markets of

operation, as further described in the enclosed Company presentation dated 3

December 2018.

As the subscription price in the Private Placement is lower than the current par

value of the Company's shares, the board of directors (the "Board") will propose

to carry out a share capital reduction (the "Share Capital Decrease") in order

to reduce the par value of the Company's shares to NOK 2.50.

The Company's obligation to complete the Private Placement is conditional upon

the following:

* The Company's extraordinary general meeting (the "EGM") resolving the Share

Capital Decrease, the Private Placement and the issuance of the Warrants;

* Receipt of payments for share deposits in the Private Placement; and

* Due registration of the Share Capital Decrease, the share capital increase

pertaining to the Private Placement and the resolution to issue Warrants in

the Norwegian Register of Business Enterprises.

The EGM will be held on or about 7 January 2019. A notice for the EGM will be

distributed in due course.

The New Shares will be delivered to the investors in the Private Placement on a

separate ISIN as soon as practically possible after the registration of the

share capital increase pertaining to the Private Placement, expected on or about

16 January 2019. The New Shares will be converted to the ordinary ISIN of the

Company's shares following approval and publication of a prospectus, expected in

February 2019 (the "Prospectus").

The Private Placement constitutes a deviation from the preferential right of the

shareholders to subscribe for the New Shares. The Board, together with the

Company's management, has considered various transaction alternatives to secure

new financing. Based on an overall assessment, taking into account inter alia

the need for funding, execution risk and possible alternatives, the Board has on

the basis of careful considerations decided that the Private Placement is the

alternative that best protects the Company's and the shareholders' joint

interests. Thus, the deviation of the preferential rights inherent in a share

capital increase through issuance of New Shares is considered necessary.

The Repair Issue

In order to reduce the dilution resulting from the issuance of the New Shares,

the Board intends to launch a repair issue (the "Repair Issue") of new shares

(the "Offer Shares") at a subscription price of NOK 2.50 per Offer Share (i.e.

the same subscription price as for the New Shares). Eligible Shareholders (as

defined below) who subscribe for Offer Shares will also receive one (1) Warrant

per Offer Share subscribed for.

The Repair Issue will be directed towards the Company's shareholders as of the

Record Date, less (i) shareholders who were offered to participate in the

Private Placement, and (ii) shareholders who are resident in a jurisdiction

where such offering would be unlawful or would require any filing, registration

or similar action (the "Eligible Shareholders"). The subscription period in the

Repair Issue will commence shortly after approval and publication of the

Prospectus, and relevant information (including size) about the Repair Issue

will be given in due course. The Repair Issue and the issuance of Warrants to

Eligible Shareholders who subscribe for Offer Shares will inter alia require

approval by the EGM and publication of the Prospectus.

The shareholders that have pre-committed to subscribe for New Shares for NOK

11.525 million, will on a pro rata basis (based on their subscription

commitment), have a preferential right to subscribe for offered shares that are

not subscribed for in the Repair Issue. If such shares are not allocated, then

they may be allocated to other Eligible Shareholders based on their proportional

shareholding.

Certain major shareholders, includingbut not limited to closely related

companies and related persons of three of the board members and the five largest

shareholders, corresponding to 55.02 % of the shares and votes in the Company,

have given irrevocable voting undertakings to vote in favor of the Share Capital

Decrease, the Private Placement, the issuance of the Warrants, and an

authorization to complete a Repair Issue at the EGM.

* * *

Major shareholders and members of the Company's board that has pre-committed to

subscribe for New Shares include:

* Roger Hofseth (through Finnvik Eiendom AS) has pre-committed to subscribe

for New Shares for an amount up to NOK 3,750,000;

* Director Jan Pettersson (through Initia AB and Swelandia International AB)

has pre-committed to subscribe for an amount up to NOK 3,000,000;

* Director Kristin Aase and related party Espen Dahl (including associated

companies) has pre-committed to subscribe for New Shares for an amount up to

NOK 1,500,000.

* Chairman Edvard Cock has pre-committed to subscribe for New Shares for an

amount up to NOK 1,250,000

Formal primary insider notifications will be published following allocation of

the New Shares.

A Company presentation dated 3 December 2018 that have been distributed to the

investors who have pre-committed to subscribe for New Shares in the Private

Placement is enclosed to this stock exchange notice.

For further information, please call Arvid Lindberg, CEO, telephone

+47 9824 5410 or arvid@aquabiotech.no.

Aqua Bio Technology (ABT) has launched several cosmetic ingredients used in skin

care products  globally.  Skin care is the fastest growing segment in the

cosmetics industry, where ABT's ingredients have established a foothold. In

addition to ingredients from its own technology, ABT also commercializes novel

technologies/ingredients for partners, for use in skin care products. Aqua Bio

Technology is listed on the Axess market of the Oslo Stock Exchange.

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

IMPORTANT INFORMATION

This communication may not be published, distributed or transmitted in the

United States, Canada, Australia, Japan or Hong Kong. These materials do not

constitute an offer of securities for sale or a solicitation of an offer to

purchase securities of the Company in the United States or any other

jurisdiction. The securities of the Company may not be offered or sold in the

United States absent registration or an exemption from registration under the

U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"). The

securities of the Company have not been, and will not be, registered under the

U.S. Securities Act. Any sale in the United States of the securities mentioned

in this communication will be made solely to "qualified institutional buyers" as

defined in Rule 144A under the U.S. Securities Act. No public offering of the

securities will be made in the United States.

In any EEA Member State that has implemented the Prospectus Directive, this

communication is only addressed to and is only directed at qualified investors

in that Member State within the meaning of the Prospectus Directive, i.e., only

to investors who can receive the offer without an approved prospectus in such

EEA Member State. The expression "Prospectus Directive" means Directive

2003/71/EC (and amendments thereto, including Directive 2010/73/EU, to the

extent implemented in any relevant Member State) and includes any relevant

implementing measure in the relevant Member State.

In the United Kingdom, this communication is only addressed to and is only

directed at Qualified Investors who (i) are investment professionals falling

within Article 19(5) of the Financial Services and Markets Act 2000 (Financial

Promotion) Order 2005 (as amended) (the "Order") or (ii) are persons falling

within Article 49(2)(a) to (d) of the Order (high net worth companies,

unincorporated associations, etc.) (all such persons together being referred to

as "Relevant Persons"). These materials are directed only at Relevant Persons

and must not be acted on or relied on by persons who are not Relevant Persons.

Any investment or investment activity to which this announcement relates is

available only to Relevant Persons and will be engaged in only with Relevant

Persons. Persons distributing this communication must satisfy themselves that it

is lawful to do so.

Matters discussed in this announcement may constitute forward-looking

statements. Forward-looking statements are statements that are not historical

facts and may be identified by words such as "anticipate", "believe",

"continue", "estimate", "expect", "intends", "may", "should", "will" and similar

expressions. The forward-looking statements in this release are based upon

various assumptions, many of which are based, in turn, upon further assumptions.

Although the Company believes that these assumptions were reasonable when made,

these assumptions are inherently subject to significant known and unknown risks,

uncertainties, contingencies and other important factors which are difficult or

impossible to predict and are beyond its control. Such risks, uncertainties,

contingencies and other important factors could cause actual events to differ

materially from the expectations expressed or implied in this release by such

forward-looking statements. The information, opinions and forward-looking

statements contained in this announcement speak only as at its date, and are

subject to change without notice.

This announcement is for information purposes only and is not to be relied upon

in substitution for the exercise of independent judgment. It is not intended as

investment advice and under no circumstances is it to be used or considered as

an offer to sell, or a solicitation of an offer to buy any securities or a

recommendation to buy or sell any securities of the Company. Neither the

Managers nor any of their respective affiliates accepts any liability arising

from the use of this announcement.

The Company expressly disclaims any obligation or undertaking to update, review

or revise any statement contained in this announcement whether as a result of

new information, future developments or otherwise.

The distribution of this announcement and other information may be restricted by

law in certain jurisdictions. Persons into whose possession this announcement or

such other information should come are required to inform themselves about and

to observe any such restrictions.

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.