Arctic Bioscience

Presentation of financial results First half year 2023

August 29th 2023

Christer L. Valderhaug (CEO) Jone R. Slinning (CFO) Runhild Gammelsæter (Global Medical Director) Matters discussed in this Presentation may constitute or include forward-looking statements. Forward-looking statements are statements that are not historical facts and may include, without limitation, any statements preceded by, followed by or including words such as "aims", "anticipates", "believes", "can have", "continues", "could", "estimates", "expects", "intends", "likely", "may", "plans", "forecasts", "projects", "should", "target" "will", "would" and words or expressions of similar meaning or the negative thereof. These forward-looking statements reflect the Company's beliefs, intentions and current expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth and strategies. Forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The forward-looking statements in this Presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions that may not be

accurate or technically correct, and their methodology may be forward-looking and speculative.

An investment in the Company's shares should be considered as a high-risk investment. Several factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievement that may be expressed or implied by statements and information in this Presentation.

A multitude of factors can cause actual results to differ significantly from any anticipated development expressed or implied in this Presentation, including among others, economic and market conditions in the geographic areas and industries that are or will be major markets for Company's businesses, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors.

The information obtained from third parties has been accurately reproduced and, as far as the

Company is aware and able to ascertain from the information published by that third party, no facts have been omitted that would render the reproduced information to be inaccurate or misleading.

The contents of this Presentation are not to be construed as financial, legal, business, investment, tax or other professional advice. By receiving this Presentation, the Recipient acknowledges that it will be solely responsible for its own assessment of the Company, the market and the market position of the Company and that it will conduct its own analysis and is solely responsible for forming its own opinion of the potential future performance of the Company's business. In making an investment decision, the Recipient must rely on its own examination of the Company, including the merits and risk involved. This Presentation is not an advertisement for the purposes of applicable measures implementing the EU Prospectus Regulation.

This Presentation is not a prospectus and does not contain the same level of information as a prospectus.

Disclaimer

Developing and commercializing pharmaceutical and nutraceutical products based on unique bioactive marine compounds, utilizing proprietary technology and methodology

Intro and H1-2023 operational highlights
-
H1-2023 consolidated Group financial review

H1-2023 operational review Business outlook Q&A

Agenda

Intro and H1-2023 operational highlights

Solid liquidity position

NOK 113,8 million as of June 30th 2023

More than 40 nutra brands globally contains ROMEGA®

Several strong brands in the USA and Europe have launched products with ROMEGA® during first half of 2023

Financial results in line with expectations and budgets

Gross margin 30% / adj. EBITDA MNOK -18,3

Kotler strategic partnership continues to develop well

Extensive marketing efforts and increasing sales in the Chinese market

33% y/y revenue growth

Continuous and strong growth in Nutra revenue, especially in the European and APAC regions

Acquisition of Arctic Algae AS in Q1 2023

Foundation for future expansion of our product portfolio into marine algal oils

H1-2023 highlights

Phase IIb clinical trial for HRO350, the HeROPA-study, approved in all 5 European countries Recruitment of a total 519 patients progressing well

Operational review Nutra

Nutra B2C/B2B Norway

Arctic Bioscience sells ROMEGA® to consumers in Norway. In H1 2023 B2C sales revenues increased by 12% y/y
The original ROMEGA® product is available through e-commerce subscription at romega.no
In addition the ROMEGA® product is sold at Farmasiet, Sunkost, Life, Arnika and Kinsarvik

Nutra Americas & Europe

Nutra B2B in general had a strong growth through H1 2023
New B2B customers in 2022 are gaining traction in H1 2023:
- Naomi Whittel in the US
- Carlson in the US
- Primal Harvest in Europe
Several new US brands signed in H1 2023

Nutra APAC

Arctic Bioscience experienced strong sales growth in the Asian markets in 2022 – with China as the key driver
In H1 2023, Arctic Bioscience experienced a continued positive development in China, however some negative macro signs may influence short/medium term development, such as decrease in consumer spending and a strong decrease in birth-rate
The interest and demand from other large Asian markets are positive and may become key growth drivers going forward
Increasing interest for ROMEGA® Protein in Asia

Operational review Pharma

To investigate efficacy, safety, and dose of HRO350 versus placebo in mild-to-moderate psoriasis HeROPA phase IIb study progress and status per August 2023

Recruitment currently progressing well

1/3 of the total number of patients needed have been recruited
50 clinics per August 2023
Competitive recruitment to 519 patients

The patient recruitment start-up period has taken more time than expected, causes for delay include:

Regulatory timelines in different geographies
Logistical issues with our European third parties
Slower recruitment in summer months

MAA: Marketing Authorization Application; MoA: Mode of Action; IMPD: Investigational Medicinal Product Dossier; CTA: Clinical Trial Application

* PIP agreed with the EMA Pediatric Committee*in Q1 2022. The Paediatric Committee of the EMA provides opinions on the quality, safety and efficacy of a medicine for use in the paediatric population Sources: EMA PDCO meeting report of opinions on paediatric investigations plans and other activities, 21 January 2022, available online

HRO350 clinical program progress and timeline update

Cellular studies at Norwegian R&D institutions are ongoing to further investigate mode-of-action in psoriasis2

Key objective is to gain a deeper understanding of the cellular mechanisms and structural characteristics of HRO350

Grant received from the Research Council of Norway

Project will be completed ultimo 2023

Data to be published 2024

Data will be important for future marketing authorisation application and commercial partnerships

HRO350 is a unique lipid matrix with phospholipid esters as API

Ongoing cellular studies to investigate MoA of HRO350

API: Active Pharmaceutical Ingredient; GMP: Good Manufacturing Practice

References: 1) Cook CM, Hallaråker H, Sæbø PC, et al. Bioavailability of long chain omega-3 polyunsaturated fatty acids from phospholipid-rich herring roe oil in men and women with mildly elevated triacylglycerols. Prostaglandins Leukot Essent Fatty Acids. 2016;111:17-24. doi:10.1016/j.plefa.2016.01.007; 2) Forskningsradet (Research Council of Norway), Properties of phospholipids d Herring Roe in Psoriasis, available online

Arctic Orphan (ABS302): Novel orphan designation drug candidate for brain development in extremely premature infants

~15 million premature births annually worldwide1

~5% are extremely premature (< 28 weeks)2

Extremely premature infants are bereaved three months of the normal in utero development time, do not have fully developed brains, and a high risk of disability and complications

Lipid drug candidate ABS302 is intended for the support for brain development and prevention of neurodevelopment complications in extremely premature infants

Current project plan ABS302

Quality/CMC/regulatory affairs

Product Specifications and QTPP Scientific advice processes Regulatory dossier on tox program

Process and formulation development

Process development API

Technical development, stability testing

GLP manufacture for pre-clinical program

Manufacture of API and GLP batches

Preclinical program

Animal models

GMP manufacture of clinical materials

Scale-up and GMP process development

Clinical development of ABS302

Collaboration with Smerud Medical

H1-2023 consolidated group financial review

Key financial figures

GROSS MARGIN CASH POSITION

Sales revenues up 33% y/y to MNOK 19,1, driven by strong development in both the European and APAC markets

• Positive development in B2C-segment in line with expectations, with a y/y revenue growth of 12,2%

• Strong growth in y/y revenues also in the B2B-segment, in total 35,4%. Especially the European and APAC market showed strong development, with y/y revenue growth of respectively 91,6% and

111%

Increased gross margin of 30,0% in H1-2023 vs. 27,6% in H1-2022

• During first half year affected month-by-month by product mix of goods sold and the development in exchange rates during the

period

Arctic Algae AS fully incorporated in the consolidated figures from

Q2-2023

HY EBITDA in line with expectations and budgets

Income statement

TNOK	H1-2023	H1-2022

Sales revenue	19 081	14 402
Cost of goods sold	13 350	10 431
Gross profit	5 731	3 971
Gross margin %	30,0 %	27,6 %

Employee benefits expenses	11 011	7 472
Depreciation and amortisation expenses	2 552	1 802
Other expenses	14 752	10 915

Operating profit (loss)	-22 585	-16 218

Finance income	2 373	1 593
Finance expenses	452	320
Net financial items	1 921	1 273

Net profit (loss) for the period	-20 664	-14 945

EBITDA	-20 033	-14 416
Adj. EBITDA	-18 293	-14 416

Breakdown of Nutra revenue

REVENUE BY BUSINESS LINE REVENUE BY REGION

B2C B2B

Strong cash position at end of period of MNOK 113,8

Cash flow from operations MNOK -27,7 mainly driven by negative operating result, increased accounts receivable and reduced accounts payable

Strong cash
Cash flow fre
negative op

Cash flow from investments MNOK -23,6

MNOK 12,4 for HRO350 phase IIb study
MNOK 12,8 related to access of fixed assets in Arctic Algae transaction, and goodwill of MNOK 2,9

Cash flow from financing activities MNOK 21

New net long-term liabilities of MNOK 4,2 as part of the Arctic Algae transaction
Proceeds from equity includes exercise of share options, and debt conversion into shares related to Arctic Algae transaction

With effect from August 1st 2023 a credit facility of MNOK 30 has been established to support the nutra business growth

potential

Cash flow statement

TNOK	H1-2023	H1-2022

Profit/loss before tax	-20 664	-14 945
Ordinary depreciation	2 552	1 802
Change in inventory	89	-4 274
Change in accounts receivable	-3 104	-2 827
Change in accounts payable	-4 298	-349
Change in other accrual items	-2 294	1 649
Net cash flow from operating activities	-27 719	-18 944

Investments in tangible and intangible assets	-23 611	-31 400
Net cash flow from investment activities	-23 611	-31 400

Net new long-term liabilities	4 193	0
Proceeds from equity	16 792	750
Net cash flow from financing activities	20 985	750

Net change in cash	-30 345	-49 594
Cash at the start of the period (1.1)	144 152	227 362
Cash at the end of the period (30.6)	113 807	177 768

Solid financial position at end of period

Total assets MNOK 321,5

• Fixed assets of MNOK 150,4 mainly comprised of intangible assets related to pharma development

• Current assets of MNOK 171,1 mainly comprised of MNOK 113,8 in cash and MNOK 35,4 in inventory

Total equity MNOK 283,4, corresponding to a equity ratio

of 88%

Long term liabilities relates to financial leasing agreements

Financial position

TNOK		30.06.2023	31.12.2022
ASSETS
	Non-current assets:
	Intangible assets	120 773	107 043
	Property, plant and equipment	29 662	22 332
	Total non-current assets	150 435	129 375
	Current assets:
	Inventories	35 373	35 462
	Accounts receivable	16 580	13 476
	Other current assets	5 315	5 237
	Cash	113 807	144 152
	Total current assets	171 075	198 327
	TOTAL ASSETS	321 510	327 702

EQUITY & LIABILITIES
	Equity:
	Share capital	2 537	2 438
	Share premium reserve	280 870	284 842
	Total equity	283 407	287 280
	Liabilities
	Liabilities to financial institutions	4 193	-
	Total liabilities	4 193	-
	Current liabilities
	Accounts payable	13 956	18 253
	Public duty payables	417	1 741
	Other current liabilities	19 537	20 428
	Total current liabilities	33 910	40 422

	TOTAL EQUITY & LIABILITIES	321 510	327 702

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Business outlook

H2-2023 guidance

Recruitment of total 519 patients not considered to be a challenge. Last patient expected in during autumn 2023

6 months read-out expected H1 2024

HeROPA study main strategic focus

Year-end position will be dependent on progress in the Pharma projects

Year-end available liquidity position expected to be good

Positive sales prospects and received order intake for H2-2023 indicates a y/y revenue growth for 2023 in the range of 30 – 35 %

Continuing y/y revenue growth

Contact

CEO - Christer L. Valderhaug: [email protected]

CFO - Jone R. Slinning [email protected]

Medical Director - Runhild Gammelsæter: [email protected]