Aqua Bio Technology — Capital/Financing Update 2020

Aug 17, 2020

AQUA BIO TECHNOLOGY ASA - CONTEMPLATED PRIVATE PLACEMENTS OF NOK 12.6 MILLION - OPERATIONAL UPDATE

AQUA BIO TECHNOLOGY ASA - CONTEMPLATED PRIVATE PLACEMENTS OF NOK 12.6 MILLION - OPERATIONAL UPDATE

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 2,100,000 new shares (the "New

Shares") for gross proceeds of NOK 10.5 million in a conditional private

placement of NOK 10.5 million (the "Private Placement"). The board of directors

of the Company (the "Board") will also carry out subsequent offering towards

eligible shareholders.

In addition to the Private Placement, the Company has also received binding pre-

commitments to subscribe for 426,000 new shares for gross proceeds of NOK 2.13

million (the "New Shares II") from new key employees and Board members (the

"Private Placement II").

Espen Kvale, CEO of ABT, comments: "We are very pleased to have binding pre-

commitments for subscription of all the New Shares from our Board, management

and key shareholders, that will secure the development of our own brands and

private label brands arising from our recent agreement with DCP Dermoscience".

Operational update

ABT is strengthening its business development and sales organization with two

new key employees, to have the resources to fully commercialize on the

opportunities arising from the strategic DCP Dermoscience agreement entered into

in June 2020, as further described in the operational update below.

The DCP agreement gives ABT an opportunity to meet new customer demands with

regards to development of own brands to increase own margins but also better

control development of products to meet the local customer base in its

respective regions. The DCP agreement had, at signing, two cosmetic lines

included in it; 1) a Nordic Beauty Product Concept and 2) a Spa/Clinic Concept

as described in Appendix 1 and Appendix 2. ABT has started discussions regarding

the development of private label cosmetic lines on these two opportunities. ABT

is also considering an agreement that will allow ABT to further develop the

Moana Skincare line and expand ABT's exclusive regions.

ABT's US partner, Restorsea, secured global rights for ABT's proprietary

technology in 2012 until 2032 pending continued payment of renewal fees of USD

5,000,000 in 2022 (USD 2,500,000) and in 2027 (USD 2,500,000). The past 18

months ABT has been informed of and has seen a positive trend in its US

partner's commercialization of ABT's proprietary technology involving launches

outside the US and development of licensing agreements with partners within the

cosmetic sector which increases the likelihood that ABT will receive additional

renewal fees, income from sales of ingredients and royalty from Restorsea and

its licensees.

"Aqua Bio Technology's focus on commercialization and development of natural

ingredients and natural skin care products has been, and will continue to be, a

key element of ABT's strategy going forward. Companies that have sustainable

business models will generally reduce risks and increase the possibilities of

good long-term returns. Aqua Bio Technology's owners and management are

convinced that companies that, over time, are able to maintain focus on factors

as sustainability, environment and ESG will have an advantage. We are also very

happy to strengthen our organization with two important hires, and we are

convinced that they will become key assets positively affecting our sales and

distributions efforts, both domestically and internationally", notes CEO Espen

Kvale.

The Private Placement

Through the Private Placement, the Company is offering New Shares for gross

proceeds of approximately NOK 10.5 million, representing approximately 13.7% of

the outstanding capital of the Company on a fully diluted basis. The offer price

in the Private Placement is a fixed price of NOK 5 per New Share, corresponding

appr. to the volume weighted average price of the Company's since 2 June 2020.

The Private Placement is directed towards the Company's 30 largest shareholders,

representing approximately 80% of the current outstanding shares of the Company.

The Company has already received binding pre-commitments from key shareholders

for all New Shares offered in the Private Placement.

The application period for the Private Placement opens today at 18:00 CEST and

closes on 18 August 2020 at 08:00 CEST. The Company may, however, at any time

resolve to close or extend the application period at its sole discretion and on

short notice.

Allocation of New Shares will be determined by the Board, in its sole

discretion, shortly after the close of the application period. The Board will

focus on criteria such as (but not limited to) current ownership in the Company,

timeliness of the application, relative order size, sector knowledge, perceived

investor quality and investment horizon.

The net proceeds from the Private Placement will be used for strengthening of

the Company's business development and sales organization, development of new

products and brands and for general purposes and working capital.

The issuance of the New Shares in the Private Placement is subject to approval

of the pertaining share capital increase by an extraordinary general meeting of

the Company (the "EGM"), to be held on or about 11 September 2020. A notice for

the EGM will be distributed in due course. The Company has received voting

undertakings in favour of the share capital increase pertaining to the Private

Placement from shareholders holding in excess of 66.67% of the currently

outstanding shares and votes in the Company.

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

immediately tradable shares as soon as practically possible after the

registration of the share capital increase pertaining to the Private Placement,

expected on or about 17 September 2020.

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 Private Placement II

Through the Private Placement II, the Company is offering 426,000 New Shares II

to certain new key employees and Board members. The New Shares II are offered at

the same price as the New Shares, being NOK 5 per New Share II.

The net proceeds from the Private Placement II will be used for the same

purposes as the net proceeds from the Private Placement.

The issuance of the New Shares II will be resolved by the Board pursuant to an

authorization to increase the share capital, such resolution to be passed prior

to the EGM.

The New Shares II will be delivered as immediately tradable shares as soon as

practically possible after the registration of the share capital increase

pertaining to the Private Placement, expected on or about 17 September 2020.

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

the shareholders to subscribe for the New Shares II. The Board considers this

deviation to be justifiable as the New Shares II are subscribed by members of

the Company's Board and management as long-term incentives for their work on

behalf of the Company.

The Subsequent Offering

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

the Board will launch a subsequent offering (the "Subsequent Offering") of new

shares (the "Offer Shares") at a subscription price of NOK 5 per Offer Share

(i.e. the same subscription price as for the New Shares).

The Subsequent Offering will be directed towards the Company's shareholders as

of 17 August 2020, as registered in the VPS on 19 August 2020 (the "Record

Date"), less (i) shareholders who offered to subscribe for New Shares 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 Subsequent Offering will be carried out pursuant to an authorization to

increase the share capital held by the Board and with a two-week subscription

period expected to expire on or about the date of the EGM.

* * *

For further information, please contact Espen Kvale, CEO, telephone

+47 9162 8092.

Aqua Bio Technology (ABT) is developing and commercializing sustainable

biotechnology for use in skin care products. ABT's cosmetics ingredients are

highly effective and they provide the cosmetics industry with natural

alternatives to traditional ingredients. ABT is also marketing and distributing

natural skin care products developed by partners towards consumers and

professional users.  ABT's focus on commercialization and development of natural

ingredients and natural skin care products has been, and will continue to be, an

important part of the company's strategy going forward. 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 announcement is not an offer to sell or a solicitation of offers to

purchase or subscribe for shares. Copies of this announcement may not be sent to

jurisdictions, or distributed in or sent from jurisdictions, in which this is

barred or prohibited by law. The information contained herein shall not

constitute an offer to sell or the solicitation of an offer to buy, in any

jurisdiction in which such offer or solicitation would be unlawful absent

registration, or an exemption from registration or qualification under the

securities laws of any jurisdiction.

This document is not for publication or distribution in, directly or indirectly,

Australia, Canada, Japan, Hong Kong or the United States or any other

jurisdiction in which such release, publication or distribution would be

unlawful, and it does not constitute an offer or invitation to subscribe for or

purchase any securities in such countries or in any other jurisdiction. In

particular, the document and the information contained herein should not be

distributed or otherwise transmitted into the United States or to publications

with a general circulation in the United States of America.

This announcement is not an offer for sale of securities in the United States.

Securities may not be offered or sold in the United States absent registration

with the United States Securities and Exchange Commission or an exemption from

registration under the U.S. Securities Act of 1933, as amended (the "Securities

Act"). The Company does not intend to register any part of the offering in the

United States or to conduct a public offering in the United States of the shares

to which this document relates.

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.

This announcement and any materials distributed in connection with this

announcement may contain certain forward-looking statements. By their nature,

forward-looking statements involve risk and uncertainty because they reflect

current expectations and assumptions as to future events and circumstances that

may not prove accurate. A number of material factors could cause actual results

and developments to differ materially from those expressed or implied by these

forward-looking statements.

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.