BioFish Holding AS

Interim / Quarterly Report • Sep 21, 2023

2Q 2023 Report

Aiming to be the preferred Post-Smolt producer in Norway

www.BioFish.no

September 2023

Land-based post-smolt production

BioFish - Roe to Sea

Company Overview

Recent highlights

Financials

• BioFish is a land-based post-smolt producer with a focus on sustainable production and fish welfare
• Holds an aquaculture license for production of up to 5 million smolt and discharge license for up to 2,200 tons
• Established post-smolt producer since 2016 with enhanced RAS technology
• New equity raised of NOK 74.5 million in first quarter 2023
• Listed on EuroNext Growth ticker: BFISH
• Ambition to be the preferred Post-Smolt producer with a goal to increase production up to 10,000 tons annually

Highlights 2Q 2023

Company Overview

Recent highlights

Financials

• Building biomass and inventory for future deliveries. Purchased smolt to increase production
• Cash utilized in building RAS facility and building working capital
• New delivery pipeline installed successfully, which is increasing the delivery capacity considerably
• New waste pipeline under construction as planned
• Strong post-smolt prices and likely further pressure with resource rent tax

Recent highlights

Company Overview

Recent highlights

Financials

• Strong focus on building biomass and finalizing production facility during second quarter
• Net profit is negative with NOK 7.4 million as per 30th June. Second quarter is net negative with NOK 3.0 million. Loss is due to suboptimal production at the facility, as construction is ongoing to reach planned capacity
• Successfully delivered Post-Smolt with revenue of NOK 20 million during first half 2023 and NOK 28.2 million in third quarter
• Expected completion of production facility end of September
• The company is on track to reach the expected production volume for 2023, between 500-750 tons

Profit & loss – 2Q 2023

Company Overview
Recent
highlights
Financials
Market Outlook

Assets – 2Q 2023

Company Overview
Recent highlights
Financials
Market Outlook

Equity and liabilities – 2Q 2023

Company Overview
Recent highlights
Financials
Market Outlook

Cash flow – 2Q 2023

Company
Overview
Recent
highlights
Financials
Market
Outlook

Equity- 2Q 2023

Company Overview
Recent
highlights
Financials

Market outlook

Company Overview

Recent highlights

Financials

• Most salmon farmers are continuously increasing use of larger smolt (post-smolt). Use of larger smolt has the benefit of reducing the production cycle at sea, and therefore higher turnover with increased margins
• Production of smolt is a strictly regulated business with entry barriers
• The resource rent tax will not directly affect BioFish. However, the market expectation is that it may lead to an increase in post-smolt pricing going forward
• BioFish expects strong market outlook with increased demand of Post-Smolt. Continued focus on sustainable post-smolt production and fish welfare

Interim report for 2Q 2023

Notes

Accounting policies

BioFish uses NGAAP for small enterprises and follows NRS 11 in interim reports. For further information, please refer to the annual report as of 2022.

BioFish is listed on the stock exchange and more info can be found on the company's website www.BioFish.no

Current assets are valued at the lower of the acquisition cost and fair value. Current liabilities are recognized on the balance sheet at the nominal amount at the time of establishment.

Consolidated financial statements

Consolidated accounts have been prepared for Biofish Holding and the wholly owned subsidiaries Biofish AS and Probio AS. All significant transactions and balances between the companies in the Group have been eliminated.

Fixed assets are assessed at acquisition cost. Fixed assets are depreciated according to a reasonable depreciation schedule. The fixed assets are written down to fair value in the event of a decline in value that is not expected to be temporary. Long-term liabilities, with the exception of other provisions, are recognized on the balance sheet at the nominal amount at the time of establishment.

Risk factors

Increased market risk related to inflation and rising interest rates. Increased production risk through building CAPEX and growing bio-mas. Increased liquidity risk through a possible overrun on capex combined with building working capital.

The unforeseen biological factors are always present. The company has mitigated this risk by building 8 different RAS – systems (separate water environments)

Sales revenue

Revenue recognition on the sale of goods takes place at the time of delivery. Services are recognized as income as they are delivered.

Classification and assessment of balance sheet items Current assets and current liabilities include items related to the commodity cycle. For items other than trade receivables, items that are due for payment within one year of the transaction date are covered. Fixed assets are assets destined for permanent ownership and use. Long-term debt is debt that matures later than one year after the transaction date.

Interim report for 2Q 2023

Notes

Receivables

Trade receivables and other receivables are listed on the balance sheet at face value after deducting provisions for expected losses. Provisions for losses are made on the basis of individual assessments of the individual receivables. In addition, an unspecified provision is made for other trade receivables to cover the assumed loss.

Inventories

Stock of purchased goods is valued at the lower of the acquisition cost according to the FIFO principle and fair value. Self-manufactured finished goods and manufactured goods are assessed as variable manufacturing costs. Write-downs are made for foreseeable obsolescence. The inventory consists mainly of biological Atlantic salmon, of which the biological risk is always present.

Property, plant and equipment

Fixed assets are recognized on the balance sheet and depreciated over the life of the fixed assets if they have an assumed useful life of more than 3 years and have a cost price exceeding NOK 15,000. Direct maintenance of fixed assets is expensed continuously under operating costs, while costs or improvements are added to the cost price of the fixed asset and depreciated in step with the operating asset.

BioFish has built a complete RAS maritime fish farm where the production line goes from egg to fully produced postsmolt. The facility is still under construction and is expected to be completed in the second half of 2023.

In addition, the following accounting principles have been applied:

The FIFO method for allocating acquisition cost for exchangeable financial assets, the lowest value principle for market-based financial current assets, pension costs are recognized on an ongoing basis after the mandatory occupational pension, leases are not recognized on the balance sheet as they are valued as operational, monetary items in foreign currency are valued at the exchange rate at the end of the financial year and the cost method is used for investments in subsidiaries. Own expenses for research and development and development of rights are expensed.

Dividends are recognized as income in the same year as deposited in subsidiaries, if it is likely that the amount will be received. In the case of dividends exceeding the proportion of retained profit after the purchase, the excess part represents the repayment of invested capital, and is less the value of the investment on the balance sheet.

Tax

The tax expense in the income statement includes both the tax payable for the period and the change in deferred tax. Deferred tax is calculated at the rate of 22% on the basis of the temporary differences that exist between accounting and tax values, as well as the tax loss carried forward at the end of the financial year. Tax-increasing and tax-reducing temporary differences that reverse or can reverse in the same period are offset and the tax effect is calculated on the net basis.

The company has not changed its accounting policy for the accounting period, and the company will not be directly affected by the Ground Rent Tax from 2023.

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Interim report for 2Q 2023

Notes

Post Smolt production

• Sales of post smolt batches in first quarter with average weight up to 1,000 gram
• No Post- Smolt deliveries in 2Q. The company is growing biomass
• Batch of 500,000 Post-Smolt successfully delivered in 3Q, with NOK 28.2 million in revenue

Interim report for 2Q 2023

Notes

Note 6 Fixed assets

			30.06.2023	31.12.2022
	Ground	RAS-facilty	NOK	NOK
	and land	equipment etc.
Aquisition cost 01.01		196 657 394	196 657 394	150 989 893
Access purchased operating assets	0	36 474 380	36 474 380	45 676 401
Sold assets	0	0	0	0
Aquisition costs30.06	0	233 131 774	233 131 774	196 657 394
Depreciations 01.01	0	2 741 100	2 741 100	2 240 000
Accumulated depreciation of sold fixed assets	0	0	0	0
Accumulated depreciation 30.06 Carrying value as of 30.06	0 0	250 000 230 140 674	250 000 230 140 674	2 741 100 193 916 294
Depreciation for the year	0	250 000	250 000	400 000
Economic life	Eternal
Depreciaton schedule	rental agreement	Linear

The license to produce smolt and fry is recognized at NOK 0 in the half-yearly accounts. The real value is substantially higher. The Group also received increased licenses in 2021:

• Issued perpetual withdrawal rights of fresh water from the NVE

-Increased license to produce post-smolt from NOK 1.5 million to NOK 5.0 million With the rising inflation,

additional costs have been incurred in 2022 for the completion of the production facility.

There have also been delays in delivery times beyond the company's control due to changes in the macro picture.

The fish farm is under completion during September 2023 and will then follow a decomposed depreciation plan for the building with production facilities after its estimated useful life.

Expansion of post-smolt production

September 2023