Gigante Salmon AS

Interim / Quarterly Report • Aug 26, 2022

THE SECOND QUARTER OF REPORT FOR

TABLE OF CONTENTS

Highlights SECOND QUARTER OF 2022

• The project is moving forward in accordance with prepared and approved plans and in line with planned and approved cost limits
• The application to establish a rockfill in the waters east of Lille Indre Rosøy island has been approved. The rockfill will enable electricity regeneration and allow for the addition of a secondary wastewater treatment process that was not included in the original plan. Detailed engineering of the rockfill is on-going
• Approved dispensation for changed quay design has been approved by Rødøy council, which determined that a rockfill was a satisfactory solution. The rockfill will replace the previous design for the quay
• Obtained insurance policies: builder's liability and environmental insurance during the implementation phase
• Successfully held annual general meeting
• Contracts signed: quality system (Landax), treatment plant (Blue Ocean Technology), oxygen production (Norluft), detailed engineering of pipelines (Bystøl)
• An increase in the price of electrical submarine cables may affect the investment budget. Work to finalise the plans and identify a route for the submarine cable continued during Q2

Helge E. W. Albertsen CEO

The report has been prepared in both Norwegian and English. In case of any discrepancy between the two versions, the Norwegian version shall prevail.

3

Gigante Salmon Rødøy

The breeding facility on Lille Indre Rosøy island consists of three pools created by excavating bedrock. The depth of the pools has been reduced, in accordance with the guidelines for land-based farming of salmon in seawater (published 4 July 2019). Establishing shallower pools will require less drilling, and less rock will be produced than was originally planned. The rock that is excavated will be used to establish a rockfill in the waters east of Lille Indre Rosøy. This will simplify internal logistics during the construction phase and will allow for the addition of a secondary wastewater treatment process and enable electricity regeneration. This change eliminates the expected costs associated with transporting the excavated rock off the island. On the other hand, it precludes expected income from the sale of the rock.

The three pools are each five metres deep and are outfitted as circular flow raceways that incorporate a failsafe that activates in the event of a pump failure. The facility is based on standard flow-through technology. The pumps have a capacity of 2,700 m3 / minute and will draw water from a depth of about 20 metres.

Power for the Lille Indre Rosøy facility will be provided via a newly established submarine cable. We will also invest in a back-up system of generators that will allow the facility to continue running in the event of a power cut. Factors such as the pandemic and war have significantly driven up the price of submarine cables, and, as a result, we expect investment costs for the submarine cable to be higher than expected. We expect to remain within budget

overall due to a planned reduction in other technology expenditures.

Connecting to the electrical grid will require considerable investment, but the current energy situation and our geographical location will make it a cost-effective option when we

start production. Arrangements are also being made to install turbines that will regenerate energy when the water used in the breeding facility is released. This has the potential to reduce energy costs by between 30% and 50%.

The plant is operated from the work and feed fleet, positioned to the west of the island. This is a traditional aquaculture fleet supplied by Éndur Sjøsterk and has housing accommodations for eight and a 600-ton feed-storage capacity.

The facility's wastewater contains a considerable amount of sludge that must be separated before it can be released. We have invested in drying technology that can reduce the volume of the sludge.

the second half of 2023. At that time, 1.1 million smolts will be released in the facility's southernmost basin. By 2025, will be introducing an estimated 3.3 million smolts to the facility annually, bringing us to full capacity.

PROFITABILITY

• An increasing global focus on health and sustainability can be expected to drive up demand for salmon.
• The location of the facility was identified as an ideal site to establish an operation that provides the best-possible living conditions for the fish, and can be run in an energy-efficient, cost-effective manner.
• A biomass-optimised, salmon-lice-free operation that utilises feed efficiently results in a low cost per kilogram of fish produced.

TECHNOLOGY

• The production technology is based on well-known aquaculture technology used in conventional fish farming.
• The facility is designed to be an efficient, stable operation that provides the best-possible living conditions for the fish.

FINANCING AND INVESTMENT

• Gigante Salmon has sufficient financing to fund its operations until full production commences, this includes financing for the construction phase and the first operational phase.
• The project's founder and majority owner is also a co-owner of operations at all stages of the salmon value-creation chain. This ensures Gigante Salmon access to the necessary expertise in all areas.

RESPONSIBLE PRODUCTION

• Land-based salmon farming operations can control the parameters for water quality and wastewater.
• Sludge is filtered from the water used in production, reducing the amount of wastewater released at sea by half compared with conventional salmon-farming operations.
• We hold regular public meetings, and we collaborate with the local committee to help strengthen the Rødøya community.

Two new employees started in Q2: - quality coordinator Kristine Ødegård started on 1 April - technical manager Kristian Aanes started on 19 April

Both are employed by Gigante Salmon Rødøy AS.

In addition, a fishfarmer and two technicians were hired in Q2; they will begin work in Q3 and Q4.

In February, Gigante Salmon Rødøy AS applied for permission to establish a rockfill in the waters east of Lille Indre Rosøy. Establishing the rockfill will, according to our studies, make it possible to regenerate energy when the water used in the breeding facility is released. This has the potential to reduce energy costs by between 30% and 50%. The rockfill will also make it possible to establish a channel that can facilitate secondary wastewater treatment

that was not included in the original

plan and will exceed requirements. Permission to establish the rockfill was granted after the reporting date. The project is currently in the planning phase, and work is expected to begin in Q3.

Power-system operator Statnett

confirmed in March that the regional transmission network has the capacity to deliver the power we need. We are currently working with Arva, the regional utility, to determine the best design and routes for a submarine cable. A decision about the route is expected in Q3.

Operations

According to the construction schedule, there is no blasting between 1 March and 1 September, out of consideration for local fauna. Drilling is proceeding according to plan and is not affected by the blasting break.

The price of submarine cables has risen significantly in the past three years. This is partly due to the pandemic, but the situation has been exacerbated by Russia's on-going war against Ukraine. At the present time, we are unable to say whether this will lead to increased costs for other materials and equipment or whether it will affect lead times for procurement and delivery.

We are working to complete the most important planning activities in order to establish a technical and quality-assured documentation basis for the further procurement process and agreement of contracts for the implementation and development phase. In order to avoid higher than expected costs, and to secure realistic lead times for delivery, we aim to complete the most critical activities by late summer.

Implementation and development are proceeding according to plan. The schedule will be revised if market conditions necessitate. Construction and installation will continue until the summer of 2023, with subsequent system testing and commissioning prior to start-up in the autumn of 2023.

The project is progressing according to plan, and, apart from the costs associated with the establishment of on-shore power, we expect to be within budget.

Project implementation

is a land-based salmon farming company with its first production facility under construction on Lille Indre Rosøya in Rødøy in Norway. The company's aquaculture concept is based on a flow-through system that combines the benefits of both conventional and land-based aquaculture, and eliminates challenges associated with conventional sea-based farming, ie lice and escapes, while reducing mortality, emissions, feed loss and strain on the local environment.

GIGANTE SALMON

Timeline towards 20,000 tons of yearly production

	2021 2022		2023 2024		2025	2026	2027
CONSTRUCTION PHASE		Project execution phase
				Startup production – 1.1 mill smolt
					Slaughter 5,300 tons HOG
					Startup production – 1.1 mill smolt
PRODUCTION PHASE 1						Slaughter 5,300 tons HOG
						Full production – 3.3 mill smolt
FULL PRODUCTION

Statement by the board and CEO

Bodø 25. august 2022

Financial review

As the group is still in a development phase, Q2 sales revenues were, for the second year running, NOK 0 million. Operating costs declined in Q2 from NOK 1.3m in 2021 to NOK 0.8m in 2022 as a result of capitalisation linked to the group's development project in Rødøy council. The operating profit of NOK -0.8m corresponds to the operating costs.

Total cash flow from group operations was NOK -0.2m. The discrepancy with the operating result is mainly due to interest income and prepaid expenses. Total group investments in Q2 were NOK 16.6m, of which NOK 12.2m was related to the Rødøy development project. The remaining relates to payment of accounts payable for previous investment costs.

As of 30 June 2022, short-term debt amounted to 100% of total group debt, compared with 16% on 30 June 2021. The increase is mainly related to accounts payable in connection with construction of the Rødøy facility, which is a natural consequence of the group's increased activity. Long-term bank financing for development of Gigante Salmon Rødøy has been approved but has yet to be drawn on. This is longterm financing from Sparebanken Nord-Norge, and we expect to begin drawing on the construction loan in 2022. The group's financial position is good, and, as of 30 June, the group is able to repay short-term debt using its most liquid funds.

Total capital at the end of Q2 2022 was NOK 277.2 m, compared with NOK 290.6 m at the end of Q2 2021. Equity as of 30 June was 98%, compared with 98% on 30 June 2021.

Q2 RESULT

The group's liquidity was NOK 215.9m as of 30 June 2022. The group's ability to self-finance investments is considered good.

The board of directors and the CEO hereby declare that the consolidated accounts for the period 01.01.22-30.06.22 have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles in Norway, and provide a correct picture of the company's assets, liabilities, financial status and income and expenses as a whole. We further declare that the half year update includes an accurate summary of the company's most important activities up to the presentation of the results.

Eirik Sørgård Chairman of the board

Helge E. W. Albertsen CEO

Kristin Ingebrigtsen Member of the board

Liv Monica Stubholt Member of the board

Kjell Lorentsen Member of the board

Income statement

(Amount in NOK)

Report for the first quarter of 2022

Balance sheet

(Amount in NOK)

				Group
Income statement	Note	Q2 2022	Q2 2021	YTD 2022	YTD 2021	2021
Employee benefits expense		0	293 176	454 031	432 888	226 290
Depreciation and amortisation expenses	1	23 886	0	47 772	0	31 848
Other operating expenses		773 675	1 023 266	1 634 910	1 110 364	1 548 164
Total operating expenses		797 561	1 316 442	2 136 713	1 543 252	1 806 302
Operating profit		-797 561	-1 316 442	-2 136 713	-1 543 252	-1 806 302
Interest income		951 711	44 279	1 536 726	44 279	848 011
Other finance income		0	0	0	0	194
Interest expenses		189	-66 111	29 426	73	73
Other financial expense		1 483	0	1 483	0	92
Net finances		950 039	110 390	1 505 817	44 206	848 040
Profit before income tax		152 478	-1 206 052	-630 896	-1 499 046	-958 262
Income tax expense	4	263 953	-265 331	99 540	-329 790	-3 697 669
Net profit or loss for the period	2	-111 475	-940 721	-730 436	-1 169 256	2 739 407
To minority interests
To majority interests		-111 475	-940 721	-730 436	-1 169 256	2 739 407
Disposal
Transferred from/to equity		-111 475	-940 721	-730 436	-1 169 256	2 739 407

				Group
Assets	Note	30.06.2022	31.03.2022	31.12.2021	30.06.2021	31.03.2021
Research, development,		0	0	0	53 588	0
licenses, goodwill
Deferred tax asset	4	3 741 113	4 005 066	3 840 756	472 877	207 546
Total intangible assets		3 741 113	4 005 066	3 840 756	526 465	207 546
Land, buildings and other property		45 358 099	33 114 469	20 508 663	3 592 263	2 766 366
Ships		820 417	842 792	865 167	0	0
Fixtures/fittings, tools, office machinery and equipment		13 099	14 611	16 122	0	0
Total tangible assets	1	46 191 615	33 971 872	21 389 952	3 592 263	2 766 366
Total fixed assets		49 932 728	37 976 938	25 230 708	4 118 728	2 973 912
Trade receivables		0	0	0	539	0
Other receivables		11 362 731	13 215 602	6 781 507	224 983 144	3 016 667
Total receivables		11 362 731	13 215 602	6 781 507	224 983 683	3 016 667
Cash and bank deposits		215 895 049	232 706 630	258 703 997	61 502 793	60 942 726
Total current assets		227 257 780	245 922 232	265 485 504	286 486 476	63 959 393
Total assets		277 190 508	283 899 170	290 716 212	290 605 204	66 933 305

Balance sheet

(Amount in NOK)

Cash flow statement

(Amount in NOK)

		Group
Equity and liabilities	Note	30.06.2022	31.03.2022	31.12.2021	30.06.2021	31.03.2021
Share capital	3	105 556 037	105 556 037	105 556 037	65 192 400	65 192 400
Share premium		165 734 431	165 734 431	165 734 431	0	0
Non-registered capital increase		0	0	0	222 000 004	0
Other paid-in equity		113 935	113 935	113 935	-967 664	0
Total paid-in equity	2	271 404 403	271 404 403	271 404 403	286 224 740	65 192 400
Other equity		1 985 021	2 096 497	2 715 562	0	0
Uncovered losses		0	0	0	-111 303	-138 246
Total retained earnings	2	1 985 021	2 096 497	2 715 562	-111 303	-138 246
Minority interests		0	0	0	0	0
Total equity	2	273 389 424	273 500 900	274 119 965	286 113 437	65 054 154
Other non-current liabilities		0	0	0	3 763 018	1 737 433
Total other non-current liabi lities		0	0	0	3 763 018	1 737 433
Trade creditors		1 127 121	6 438 470	15 932 235	463 677	73 633
Public duties payable		454 881	142 959	280 343	43 138	11 200
Other short-term liabilities		2 219 084	3 816 841	383 667	221 934	56 885
Total current liabilities		3 801 086	10 398 270	16 596 245	728 749	141 718
Total liabilities		3 801 086	10 398 270	16 596 245	4 491 767	1 879 151
Total equity and liabilities		277 190 508	283 899 170	290 716 212	290 605 204	66 933 305

Group
Cash flow from operations	Q2 2022	Q2 2021	YTD 2022	YTD 2021	2021
Profit before income taxes	152 478	-1 206 052	-631 362	-1 499 046	-958 462
Depreciation	23 886	0	47 772	0	31 848
Change in trade debitors	0	-539	0	-539	0
Deduction of recurring VAT settlement	0	0	0	0	28 285
Change in trade creditors	-276 763	390 044	-6 788 041	453 405	1 517 531
Change in other provisions	-133 723	196 987	4 227 970	-2 794 245	-2 463 072
Net cash flow from operations	-234 122	-619 560	-3 143 661	-3 840 425	-1 843 870
Cash flow from investments
Purchase of fixed assets	-17 278 215	-825 897	-40 366 043	-2 280 026	-5 733 414
Purchase of intangible assets	0	-53 588	0	-53 588	0
Repayment of short term loans	700 757	0	700 757	0	0
Proceeds from short term loans	0	-221 966 477	0	-221 941 477	-3 678 044
Net cash flow from investments		-16 577 458 -222 845 962	-39 665 286	-224 275 091	-9 411 458
Cash flow from financing
Repayment o v vf short term loans (group companies)	0	0	0	26 345	0
Proceeds from short term loans	0	2 025 585	0	2 025 585	0
Proceeds from issuance of equity	0	222 000 004	0	222 000 004	222 000 004
Repayment of long term loans	0	0	0	0	-1 705 318
Issuance costs recognized directly in equity	0	0	0	0	-15 901 736
Net cash flow from financing	0	224 025 589	0	224 051 934	204 392 950
Exchange gains / (losses) on cash and cash equivalents
Net change in cash and cash equivalents	-16 811 580	560 067	-42 808 947	-4 063 582	193 137 622
Cash and cash equivalents at the beginning of the period	232 706 630	60 942 726	258 703 997	65 566 375	65 566 375
Cash and cash equivalents at the end of the period	215 895 049	61 502 793	215 895 049	61 502 793	258 703 997

ACCOUNTING PRINCIPLES

The quarterly accounts have been prepared in compliance with the Accounting Act and accounting principles generally accepted in Norway, including principles for interim accounting (NRS 11). All significant accounting principles are described in the Groups annual report for 2021.

The annual report is available at www.gigantesalmon. no. For a complete statement of the accounting principles, please see the annual report.

The quarterly report is non-audited.

Notes

NOTE 1 - FIXED ASSETS

NOTE 2 - SHAREHOLDERS' EQUITY

Gigante Salmon is currently constructing its land-based fish farm at Lille Indre Rosøy in Rødøy kommune. This explains the recent additions of fixed assets.

The construction is in line with the investment budget and time frame.

The construction phase ends August 2023, with the first release of smolt in August 2023. *The Group has capitalized own work with NOK 935 402.

CHANGE IN PLAN OF DEPRECIATION

There has not been a change in plan of depreciation.

Equity changes in the period	Share capital	Share premium	Other paid-in equity	Other equity	Total
Equity 01.01.22	105 556 037	165 734 431	113 935	2 715 562	274 119 965
Profit for Q1	0	0	0	-619 065	-619 065
Egenkapital 31.03.22	105 556 037	165 734 431	113 935	2 096 497	273 500 900
Profit for Q2	0	0	0	-111 475	-111 475
Equity 30.06.22	105 556 037	165 734 431	113 935	1 985 022	273 389 424

The share capital of NOK 105 556 037 consists of 105 556 037 shares with nominal value of NOK 1 each.

LIST OF 20 MAJOR SHAREHOLDERS AT 30.06.22.

Shareholder Number of shares Ownership Gigante Havbruk AS 64 238 000 60,86 % T Kolstad Eiendom AS 7 272 728 6,89 % J.P. Morgan SE 3 228 161 3,06 % Helgeland Invest AS 2 727 272 2,58 % Torghatten Aqua AS 2 727 272 2,58 % Verdipapirfondet Nordea Avkastning 2 152 109 2,04 % Ravi Investering AS 1 970 125 1,87 % IHA Invest AS 1 455 000 1,38 % Commuter 2 AS 1 090 909 1,03 % Yannick AS 1 000 000 0,95 % Olav Olsen Holding AS 1 000 000 0,95 % LIMT AS 910 000 0,86 % DNOR AS 909 093 0,86 % Nyhamn AS 909 091 0,86 % UBS Switzerland AG 665 485 0,63 % Oxvold Invest AS 600 000 0,57 % Aino Aktiv AS 574 255 0,54 % Maria Olaisen AS 545 455 0,52 % Hausta Vekst AS 545 454 0,52 % Occasione By Olaisen AS 545 454 0,52 % Other owners 10 490 174 9,94 %

Shareholder	Number of shares	Ownership
Gigante Havbruk AS	64 238 000	60,86 %
T Kolstad Eiendom AS	7 272 728	6,89 %
J.P. Morgan SE	3 228 161	3,06 %
Helgeland Invest AS	2 727 272	2,58 %
Torghatten Aqua AS	2 727 272	2,58 %
Verdipapirfondet Nordea Avkastning	2 152 109	2,04 %
Ravi Investering AS	1 970 125	1,87 %
IHA Invest AS	1 455 000	1,38 %
Commuter 2 AS	1 090 909	1,03 %
Yannick AS	1 000 000	0,95 %
Olav Olsen Holding AS	1 000 000	0,95 %
LIMT AS	910 000	0,86 %
DNOR AS	909 093	0,86 %
Nyhamn AS	909 091	0,86 %
UBS Switzerland AG	665 485	0,63 %
Oxvold Invest AS	600 000	0,57 %
Aino Aktiv AS	574 255	0,54 %
Maria Olaisen AS	545 455	0,52 %
Hausta Vekst AS	545 454	0,52 %
Occasione By Olaisen AS	545 454	0,52 %
Other owners	10 490 174	9,94 %
Total	105 556 037	100,0 %

SHARES OWNED BY THE MANAGEMENT AND RELATED PARTIES OF THE MANAGEMENT

Name	Position	Number of shares	Ownership
Helge E. W. Albertsen	CEO	200 000	0,19 %
Rune Johansen	CFO	260 000	0,25 %
Eirik Sørgård	Chairman of the Board	200 000	0,19 %

Eirik Sørgård owns 200 000 shares through his wholly-owned company Pronord AS. Rune Johansen owns 35 000 shares privately and 225 000 shares through his wholly-owned company Nord-Norsk Eiendom AS. Kjell Lorentsen has controlling influence through Gigante Havbruk AS who owns 64 238 000 shares (ownership 60,86 %).

Buildings and land	Machines	Movables	Total fixed assets
33 114 469	895 000	18 137	34 027 606
0	52 208	3 526	55 734
33 114 469	842 792	14 611	33 971 872
12 243 630	0	0	12 243 630
45 358 099	895 000	18 137	46 271 236
0	74 583	5 037	79 620
45 358 099	820 417	13 100	46 191 615
0	22 375	1 511	23 886

The Group owns two islands that are not depreciated.

NOTE 4 - TAXES

NOTE 5 - OVERVIEW OF AND TRANSACTIONS WITH RELATED PARTIES

CALCULATION OF DEFERRED TAX/DEFERRED TAX ASSET

Temporary differences	30.06.2022	30.06.2021	31.12.2021
Net temporary differences	4 888 829	1 239 601	3 271 062
Tax losses carried forward	-21 893 887	-3 389 040	-20 729 041
Basis for deferred tax asset	-17 005 058	-2 149 439	-17 457 979
Deferred tax asset	-3 741 113	-472 877	-3 840 756

BASIS FOR INCOME TAX EXPENSE, CHANGES IN DEFERRED TAX AND TAX PAYABLE

Basis for income tax expense	30.06.2022	30.06.2021	31.12.2021
Result before taxes	152 478	-1 206 052	-958 462
Permanent differences	14 934	0	-15 849 126
Basis for the tax expense for the year	167 412	-1 206 052	-16 807 588
Change in temporary differences	-800 620	-794 392	-3 271 062
Basis for payable taxes in the income statement	-633 208	-2 000 444	-20 078 650
Taxable income (basis for payable taxes in the balance sheet)	-633 208	-2 000 444	-20 078 650
Basis for income tax expense, changes in deferred tax and tax payable	30.06.2022	30.06.2021	31.12.2021
Tax payable	0	0	0
Total tax payable	0	0	0
Change in deferred tax asset	263 953	-265 331	-3 697 669
Tax expense	263 953	-265 331	-3 697 669

	Related party	Ownership
a)	Gigante Havbruk AS	Owns Gigante Salmon 61%
b)	Gildeskål Forskningsstasjon AS	Gigante Havbruk owns 100%
c)	KapNord AS	Gigante Havbruk owns 51%
d)	Salmon Center AS	Gigante Havbruk owns 100%

TRANSACTIONS WITH RELATED PARTIES

	Amount	Detail of transaction
a)	285 000	Purchase of hours in connection with the design and production of The Groups land-based fish farm.
b)	500 000	Purchase of hours in connection with the design and production of The Groups land-based fish farm.
c)	201 000	Purchase of hours in connection with the design and production of The Groups land-based fish farm.
d)	16 500	Office rent - Bodø

The design and production is capitalized at the line Land, buildings and other property.