Fjord Defence Group ASA

Prospectus • Oct 10, 2019

Contemplated private placement

Contemplated private placement

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES OR ANYOTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.

Contemplated private placement

Lysaker, 10 October 2019

Axxis Geo Solutions ASA ("Axxis" or the "Company") has retained ABG Sundal Collier ASA, Fearnley Securities AS and SpareBank 1 Markets AS (together the "Managers") as Joint Bookrunners to advise on and effect a private placement of new shares (the "Offer Shares"), directed towards Norwegian and international investors, subject to applicable exemptions from relevant registration, filing and prospectus requirements, and subject to other applicable selling restrictions, after the close of Oslo Stock Exchange today (the "Private Placement").

Through the Private Placement, the Company is offering new shares to raise gross proceeds of approximately NOK 200 - 225 million. The price in the Private Placement is set to NOK 6 per Offer Share. The final number of shares to be issued in the Private Placement will be determined following a bookbuilding process.

Net proceeds from the Private Placement will be used: (i) to fund further growth and capital expenditures needed to meet increased ocean bottom node activity, upscaling its operations with a second crew as well as general corporate purposes (approximately USD 10 million); (ii) to strengthen the working capital balance by repaying trade debt (approximately USD 6 million); (iii) to repay USD 7.5 million of the promissory note to TGS in regard to the Utsira multi-client library investment. Following the repayment of USD 7.5 million, the remaining amount of USD 9.6 million of the promissory note will fall due on 30 September 2020. Note that the net outstanding amount in the promissory note to TGS is USD 6.7 million as AGS has sold additional data with a value of USD 2.9 million. According to the current agreement between AGS and TGS, the USD 2.9 million is to be used as repayment to TGS.

The Private Placement will be divided into two tranches. Tranche 1 will consist of up to 9,435,074 Offer Shares (the "Tranche 1”) which may be resolved by the Company's Board of Directors (the "Board") pursuant to an authorization granted by the Company's annual general meeting held on 16 May 2019. Tranche 2 (the "Tranche 2") will consist of a number of Offer Shares necessary to raise total gross proceeds of NOK 200 - 225 million in the Private Placement, which may be resolved by an extraordinary general meeting of the Company expected to be held on or about 1 November 2019 (the "EGM"). Applicants will be allocated Offer Shares on a pro rata basis between Tranche 1 and Tranche 2 of the Private Placement. Tranche 1 is not conditional upon the completion of Tranche 2 and will be completed irrespective of completion of Tranche 2.

An amount of up to NOK 120 million of the Private Placement has on market terms been guaranteed by a group of existing shareholders, all of which will, if relevant, be applied in Tranche 2.

The application period for the Private Placement opens today at 16:30 CEST on 10 October 2019 and closes at 08:00 CEST on 11 October 2019. The Company, in consultation with the Managers, may however at any time resolve to close or extend the subscription period at its sole discretion and on short notice. The minimum subscription and allocation amount in the Private Placement will be the NOK equivalent of EUR 100,000, provided that the Company may, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to applicable regulations are available.

Allocation of the Offer Shares will be determined at the end of the application period, and final allocation will be made by the Company's Board of Directors at its sole discretion. Notification of the partly conditional allocation is expected to be sent by the Managers on or about 11 October 2019.

The settlement date for Tranche 1 is expected to be on or about 15 October 2019. All Applicants will in Tranche 1 receive existing and unencumbered shares in the Company that are already listed on Oslo Axess, pursuant to a share lending agreement between Songa Investments AS, Havila Holding AS, Rome AS and Bjarte Bruheim, the Managers and the Company. The Offer Shares delivered to the applicants in Tranche 1 will thus be tradable on Oslo Axess upon allocation. The Managers will settle the share loan with new shares in the Company to be issued on or about 18 October 2019 based on an existing authorization for the Board to issue shares resolved in the Annual General Meeting held 16 May 2019. The new shares delivered to Songa Investments AS, Havila Holding AS, Rome AS and Bjarte Bruheim will be issued on a separate ISIN and will not be tradable on Oslo Axess until a listing prospectus has been approved by the Financial Supervisory Authority of Norway, expected early November 2019. The settlement date for Tranche 2 is expected to be shortly after the EGM and will be notified separately to applicants.

The Company and the Managers reserve the right, at any time and for any reason, to cancel and/or modify the terms of the Private Placement.

The Board, together with the Company's management and the Managers, has considered various transaction alternatives to secure new financing. Based on an overall assessment, taking into account inter alia the need for funding, subscription price, execution risk, possible alternatives and overall costs, 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, a waiver of the preferential rights for existing shareholders to subscribe shares will be proposed to be waived as this is considered necessary and to be in the Company's best interest.

Subject to completion of the Private Placement and prevailing market conditions, the Company will consider to carry out a subsequent repair offering directed at its existing shareholders as of close of trading 10 October 2019, as recorded in the VPS on 14 October 2019, who were not allocated shares in the Private Placement and who are not resident in a jurisdiction where such offering would be unlawful, or would (in jurisdictions other than Norway) require any prospectus filing, registration or similar action. Further information on any such subsequent repair offering will be given separately.

This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act.

For further information:

Lee Parker, CEO

Lee.Parker@axxisgeo.com

Svein Knudsen, CFO

Svein.Knudsen@axxisgeo.com

+47 906 94 170

About AGS

Axxis Geo Solutions (AGS) is a pure-play ocean bottom node seismic company uniquely positioned to pursue both contract and multi-client seismic. AGS specializes on delivering tailored seismic solutions and flexible project management and execution to oil and gas companies world-wide. Its operations are based on a scalable asset-light setup through chartering of vessels and nodes to complete seismic surveys.

AGS is listed on Oslo Axess and traded under the ticker AGS.

More information on www.axxisgeo.com

Important information:

The release is not for publication or distribution, in whole or in part directly or indirectly, in or into Australia, Canada, Japan or the United States (including its territories and possessions, any state of the United States and the District of Columbia). This release is an announcement issued pursuant to legal information obligations, and is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. It is issued for information purposes only, and does not constitute or form part of any offer or solicitation to purchase or subscribe for securities, in the United States or in any other jurisdiction. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "US Securities Act"). The securities may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the US Securities Act. The Company does not intend to register any portion of the offering of the securities in the United States or to conduct a public offering of the securities in the United States. Copies of this announcement are not being made and may not be distributed or sent into Australia, Canada, Japan or the United States. The issue, subscription or purchase of shares in the Company is subject to specific legal or regulatory restrictions in certain jurisdictions. The Company does not assume any responsibility in the event there is a violation by any person of such restrictions. The distribution of this release may in certain jurisdictions be restricted by law. Persons into whose possession this release comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Forward-looking statements: This release and any materials distributed in connection with this release may contain certain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect the Company's 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.