Techstep ASA — M&A Activity 2016

Nov 4, 2016

Techstep ASA Att: Board of Directors Henrik Ibsens Gate 100 0230 Oslo Norway

November 4, 2016

Independent statement in accordance with section 6-16 of the Norwegian Securities Trading Act

1 INTRODUCTION

1.1 Background

Zono Holding AS ("Zono Holding") announced on October 17 October 2016 a mandatory offer (the "Offer") to acquire all outstanding shares in Techstep ASA ("Techstep") not already owned by it. The offer price is NOK 2.20 per share (the "Offer Price") is equal to the subscription price for the consideration shares issued to Zono Holding in connection with the transfer of 100% the shares in Zono AS to Techstep (the "Zono Transaction"). The Offer Price is also equal to the subscription price for the Techstep Shares issued to Zono Holding in a private placement completed on 8 March 2016 and is hence the highest price paid or agreed to be paid by Zono Holding or consolidated parties in the period six months prior to the triggering of the mandatory offer obligation.

Zono Holding is a private limited liability company incorporated under the laws of Norway, with organisation number 917 315 981, having its registered office and principal place of business at Storgaten 30, 3126 Tønsberg. Zono Holding is owned by Middelborg Invest AS, Datum AS, Cipriano AS and certain other financial investors. As per the date of the offer document (the "Offer Document"), Zono Holding holds 62,689,859 Techstep Shares, representing 86.56% of the share capital and voting rights.

No member of the Techstep's executive management team or board of directors are shareholders in Techstep, or close parties to shareholders in Techstep, and consequently none have been in a position to consider acceptance of the Offer on their own behalf.

The purpose of the Mandatory Offer is solely to comply with the mandatory offer obligations in the Securities Trading Act, not to increase the Offeror's ownership stake in Techstep. The intention of Zono Holding is that Techstep shall remain a listed company on Oslo Børs with a large and diversified shareholder base.

Shareholders of Techstep are recommended to study carefully the information given in the offer document.

1.2 Our mandate

The Board of Directors of the Company has a duty under section 6-16 (1) of the Norwegian Securities Trading Act ("STA") to issue a statement setting out its assessment of the Offer and the reasons on which such assessment is based, including its views on the effects of the implementation of the Offer on the interests of the Company, including the effect, if any, of the strategic plans of the offeror on employment and the location of the Company's place of business, as well as other factors of significance for assessing whether the Offer should be accepted by the shareholders. Pursuant to section 6-16(4) of the Securities Trading Act, Oslo Børs, as take-over authority, has decided that the statement in relation to the Offer shall be given by an independent third-party.

In accordance with section 6-16 (4) of the STA, Techstep has engaged Arctic Securities AS ("Arctic" or "we") to provide this statement (the "Independent Statement") which shall constitute the statement to be delivered in accordance with section 6-16 (1) of the STA. The Oslo Stock Exchange has approved that this Independent Statement is issued by Arctic.

Arctic has entered into a mandate agreement with Techstep dated 31 October 2016 for the Corporate Finance Department of Arctic to provide the Independent Statement in accordance with section 6-16 of the STA. We have agreed to publish the Independent Statement according to the time schedule and manner regulated in the STA and relevant provisions, e.g. US notification regulations.

Our duties according to the engagement have not included advice of a tax, legal or accounting nature and no advice given by us shall be deemed as advice on tax, legal or accounting matters.

1.3 Our position, remuneration and independence

Arctic, as part of our investment banking business, is continually engaged in performing financial analyses with respect to companies and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and other transactions, as well as in performing financial analysis and valuations for estate, corporate and other purposes.

In connection with the recommendation of the Offer by the independent members of the board of directors of Techstep, Arctic has also delivered a fairness opinion to the board of directors dated 4 November 2016. According to the mandate agreement between Techstep, and ourselves we will receive a fixed fee for the delivery of our fairness opinion and the Independent

Statement. The fee is independent of the conclusion of our fairness opinion and the Independent Statement, and of the success of the bid or any subsequent transaction; and has become payable at the delivery of our fairness opinion.

Arctic is a full service securities firm engaged in securities trading, investment management, risk management, hedging, financing and brokerage activities for both companies and individuals. Arctic may actively trade the debt and equity securities (or related derivative securities) of Techstep for its own account and for the accounts of its customers and may at any time hold long and short positions of such securities. We have equity and research divisions that are separated from the corporate finance department through Chinese wall arrangements, and that publish research and investment recommendations to our clients. These researchers have not been informed about the transaction or about our fairness opinion mandate, and may have advised clients to buy or sell debt and equity securities in Techstep or peer group companies in the period we have held our mandate. Likewise, our proprietary traders have not been informed about neither the proposed transaction nor about our mandate, and may have taken intra-day short or long positions in debt and/or equity securities of the company.

At the date of the Independent Statement, Arctic holds no long or short positions in either debt or equity securities of Techstep. No employee of Arctic, not involved in the fairness opinion, owns any shares in Techstep.

In the ordinary course of our activities, Arctic has in the past and will continue to seek to provide investment-banking services to Techstep in connection with its financing activities. We have not provided debt or equity trading services, nor investment banking services, to either Techstep or to any companies of which Techstep to our knowledge is a significant owner; nor do we hold any mandates to do so.

2 THE TRANSACTION

2.1 The offer process

On 17 October 2016, Zono Holding launched a Mandatory Offer to acquire all outstanding shares in Techstep not already owned by it. The Mandatory Offer was triggered by a transaction that occurred on 15 September 2016, when the Offeror transferred 100% the shares in Zono AS to Techstep in exchange for the subscription of 58,181,818 consideration shares in Techstep (the "Zono Transaction"). The Zono Transaction was approved by an extraordinary general meeting in Techstep on 23 August 2016 and upon completion of the Zono Transaction, Zono Holding's ownership in Techstep increased to more than 1/3 the outstanding shares and voting rights.

The purpose of with Mandatory Offer is solely to comply with the mandatory offer obligations under chapter 6 of the Securities Trading Act, not to increase the Zono Holding's ownership stake in Techstep.

As per the date of the Offer Document, the Offeror (Zono Holding) holds 62,689,859 Techstep Shares and offers to acquire all issued and outstanding Techstep Shares not already owned by it, representing 9,732,230 Techstep Shares. The Mandatory Offer does not comprise any Techstep Shares issued after the date of this Offer Document.

3 OUR ASSESSMENT

3.1 Access to information

We have relied upon the accuracy and completeness of all of the financial, accounting, legal, tax and other information we have reviewed or that has been discussed with or supplied by the Company, and have assumed such accuracy and completeness for purposes of rendering this opinion. In that regard, we have assumed that the forecasts we have discussed with the Company have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of Techstep management. We have not performed any due diligence on Techstep, and as far as we are aware, neither has Zono Holding.

In connection with this Opinion, we have reviewed, among other documentation:

• the Offer Document published 17 October 2016;
• publically available information;
• certain internal financial analyses and forecasts for the financial performance of Techstep, prepared by the management of Techstep, and
• certain strategic valuation papers compiled by external financial and strategic advisors in connection with the potential acquisition of a minority position in Teki Solutions AS.

In addition, we have

• reviewed the reported price and trading activity for the Techstep share,
• compared certain financial and stock market data for Techstep with similar financial and stock market data for selected other companies, the securities of which are publicly traded, and
• performed such other studies and analyses, and considered such other factors as we considered appropriate.

We have discussed with members of Techstep management on their plans and expectations for the future. We have also received statements from the Company's employees regarding their view upon the Offer. We have also directed questions to and received responses from Zono

Holding during the assessment process. While we cannot vouch for the completeness of the information we have been given access to, we have not experienced any withholding of requested information in this process.

3.2 Analysis performed

We have, among other analysis, assessed

• the historic development of the share price;
• the relative development of the share price compared to peers;
• the current and historic trading patterns of comparable companies
• the development of the main valuation parameters for the Techstep share including
• o peer multiple analysis,
• o president transactions, and
• o discounted cash flow valuation ("DCF valuation");
• the historic and current forecasting and expectations compared to the market development of prices and margins and costs of input factors; and
• the premiums offered in other comparable national and international transactions.

We have also assessed the terms described in the Offer Document dated 17 October 2016.

3.3 Notable observations from the assessment process

We have noted that the share price of Techstep (Birdstep Technology ASA until 3 June 2016) has not traded as low as the Offer Price of NOK 2.20 per share for several months. After reaching a price per share of approximately NOK 45.00 in April 2014, the share price has decreased significantly and traded somewhat flat from January 2016 until July 2016, when the acquisition of Zono AS and the agreement to acquire a majority stake in Teki Solutions was announced. From the date prior to this announcement and up until the day of the publication of the Mandatory Offer, the share price in Techstep increased 111.6 per cent. The Offer Price of NOK 2.20 represents a discount of 136.4 per cent compared to the closing price the day prior to publication of the Offer Document and a discount of 82.7 per cent compared to the one month volume weighted average price ("VWAP").

The share price of Techstep has over the last couple of months traded significantly higher than the Offer price of NOK 2.20 and the share price levels observed prior to the first announcement regarding the acquisition of Zono AS. This suggests that the market values the company significantly higher than the current outstanding offer suggests.

We have also noted that after the divesture of Birdstep Technology AB, Techstep has developed a revised strategy which to a large extent is built on the Zono AS and Teki Solutions AS platform. All business associated with Birdstep Technology AB (including customer contracts,

product portfolio, technology, intellectual property rights and most of the employees) was transferred to Smith Micro Software, Inc. in connection with the divesture.

The new strategy is to establish Techstep as a driver of consolidation, innovation and product development within a mobility and communications sector which in Norway is highly fragmented. Techstep has communicated that they are in the process of establishing a new management team to execute and further develop the Company's revised strategy and growth ambitions.

The Offer is financed through available liquidity in Zono Holding and there are no financing conditions to the Offer.

When we perform multiple analyses to compare with traded peers and previous transactions; as well as DCF analysis based on figures discussed with management, we arrive at valuations that are generally above or in line with current trading but well above the Offer Price in the Mandatory Offer. However, it should be pointed out that such valuations are influenced by the uncertainty inherent in company forecasts, as well as risk and return requirements that will vary between investors.

The offer price is low compared to recent public offers where one usually tends to see a bid premiums or at least an offer price in line with current trading of the target company.

4 CONSEQUENCES FOR THE COMPANY AND THE EMPLOYEES

4.1 Company and employees

Section 6-16 of the STA provides that an independent statement shall address the Offer's consequences in relation to the Company's interests; including how it may affect the employees and the location of the Company's business.

Zono Holding has described in the Offer Document that the completion of the Offer is not expected to have any legal, economic or work related effects for the employees of Techstep.

"Zono Holding will continue to support the revised strategy of Techstep. The Mandatory Offer will have no direct impact on the operations of Zono AS, as this is a holding company, and there are no immediate plans for reorganisations of this company. However, it may be considered at a later stage to merge this company with another company in the Techstep Group in order to simplify the legal group structure."

We see no particular strategic misfit between the strategy currently under implementation Techstep and the intention of Zono Holding going forward. The Offeror has not given any staffing promises nor identified any synergy potential, which influences the size of the workforce beyond what a stand-alone company would be expected to do. Zono Holding's intention is for the Techstep Shares to continue its listing on Oslo Børs after the completion of the Offer. Furthermore, there is a clear ambition for Zono Holding to seek further development of the Company in cooperation and dialogue with the other existing shareholders of the Company.

4.2 Board of directors' and CEO's assessment as shareholders

No member of the Techstep's executive management team or board of directors are shareholders in Techstep, or close parties to shareholders in Techstep, and consequently none have been in a position to consider acceptance of the Offer on their own behalf.

4.3 Employee support and recommendation of the Offer

Techstep currently has a limited organisation but both of the current employees have communicated to Arctic that the presented Offer Price does not fully reflect the potential value of the Company. This is based upon the fact that they believe in the current strategy and plans for the future of Techstep. On this basis, the employees of Techstep have decided not to recommend the Offer.

However, it should be noted that the employees are positive towards Zono Holding as an owner and that their opinion is based solely on the Offer Price.

5 CONCLUSION

From a financial point of view, based upon several valuation parameters the value of Techstep is assumed to be higher than the presented offer. These valuation ranges are based on certain risk assessments, return requirements and earnings forecasts which could differ between investors. However, the business plan presented by management seems reasonable and within reach based on the financial track record and current performance of the Company. Most valuations approaches also suggest multiple levels that are well below what we observe for comparable listed companies.

Taken into account that the Offer Price came at a significant discount compared to the trading price of Techstep prior to announcement of the Offer, and that the share price has not trading at such low levels over the course of the last twelve months, leads us to the conclusion that the we cannot recommend the Offer as fair from a financial point of view.

Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Offer is not fair from a financial point of view to shareholders of Techstep and we recommend the shareholders of Techstep not to accept the Offer.

Yours sincerely,

Arctic Securities AS