Techstep ASA — M&A Activity 2016

Mar 10, 2016

Detailed Stock Exchange Announcement

This is an announcement under section 3.4 of the "Continuing obligations of stock exchange listed companies"/Oslo Børs, January, 2016.

Birdstep Technology ASA has on March 8, 2016 entered into a Share Purchase agreement with Smith Micro Software, Inc., which represents a decrease of more than 5% in the total revenue and assets of Birdstep Technology ASA.

Due to the size of the transaction an Information Document will, in accordance with section 3.5 of the "Continuing obligations of stock exchange listed companies", be published within the stipulated timeframe.

1. The Transaction

1.1 Birdstep Technology AB

Birdstep Technology AB ("BTAB"), is a wholly owned Swedish subsidiary of Birdstep Technology ASA.

1.2 The Agreement

Birdstep Technology ASA, ("Birdstep" or "Company"), and Smith Micro Software, Inc., ("Smith") entered into a Share Purchase Agreement on March 8, 2016 whereby Smith will acquire 100% of the shares in BTAB from Birdstep on the Closing Date.

Smith is a leading software and services company listed on NASDAQ. Smith provides software to simplify and enhance the mobile experience. As a leader in wireless connectivity, Smith applications help improve network Quality of Experience for mobile users while optimizing resources for service providers and enterprises. Smith's intelligent policy-on-device platform, along with premium voice, video and content monetization services, creates new opportunities to engage consumers and capitalize on the growth of connected devices. In addition to wireless and mobility software, Smith develops innovative Productivity and Graphics products for professional artists and general consumers. The company is headquartered in Aliso Viejo, CA, with additional development centers in Santa Cruz, CA, Pittsburgh, PA and Belgrade, Serbia. For further information, please see www.SmithMicro.com.

1.3 Special conditions (or license issues)

The Closing is subject to separate approval by the shareholders of Birdstep, to be held at an extraordinary general meeting on or about March 31, 2016.

1.4 The consideration

The aggregate consideration for the Transaction is USD \$2,000,000. The consideration will be executed through wire transfer from Smith to Birdstep at Closing.

The purchase and sale of the Shares shall take place at a closing (the "Closing") to be held at 9:00 a.m. Pacific time, no later than two Business Days after the last of the conditions to Closing have been satisfied or waived, or at such other time or on such other date as Seller and Buyer may mutually agree upon in writing (the day on which the Closing takes place being the "Closing Date").

2. Description of the business to which the Transaction applies

2.1 The business to which the Transaction applies

Birdstep's current main business is to develop and distribute "Heterogeneous Network" (Birdstep's "HetNet") optimization solutions, allowing operators and OEMs to provide, analyse, select, control and commercialise Wi-Fi and cellular networks to deliver experience continuity to their customers. The business is completely carried out through Birdstep's wholly owned Swedish subsidiary BTAB.

BTAB is the owner of Birdstep's engineering and development organization, sales organization, product management, including the present and previous product portfolio, the technology and intellectual property rights, including patents, trademarks and trade names, copyright and knowhow related to the business to which the Transaction applies.

2.2 Board of directors, executive management and employees

2.2.1.1 Board of Directors of Birdstep Technology ASA

Name	Position
Ian Jenks	Chairman of the Board
Tore Traaseth	Board Member
Ingrid Leisner	Board Member

2.2.1.2 Board of directors and deputy of Birdstep Technology AB

Name	Position
Lonnie Schilling	Board Member
Fredrik Johansson	Deputy Board Member

2.2.2 Executive management

Birdstep Technology AB:

Position
CEO
CFO
COO
Head of Engineering
Head of Operations
VP Market Communications
HR Manager

*Consultant

2.2.3 Number of employees

As of the date of the signing of the Share Purchase Agreement, the total number of employees within Birdstep Technology AB was 19.

2.3 Key figures

The table below shows selected financial information for BTAB as at the dates and for the years indicated, which have been extracted without material adjustment from the Company's audited annual reports for 2014 and 2013, and which are incorporated by reference to this Detailed Stock Exchange Announcement. The financial figures in the table below are only an extract and must be read in conjunction with the complete financial statements including notes and auditor's statement for 2014 and 2013.

The table below also shows selected financial information for BTAB for 2015, which have been extracted from BTAB's unaudited financial report for 2015. The financial figures in the table below are only an extract and must be read in conjunction with the complete financial statements including notes.

	2015*	2014	2013
Operating revenue	58 815	39 427	41 578
Operating result (EBITDA)	-312	1 617	1 771
Total assets	35 566	21 762	26 768

BTAB's key figures (in SEK 1 000):

*unaudited

2.4 Any significant assets or liabilities that are not shown in the balance sheet

At the date of this announcement there are no significant assets or liabilities that are not shown in the balance sheet.

3. The significance of the Transaction to the Company

Despite continuous efforts, Birdstep faced challenges that required rapid adjustments throughout 2015 and into 2016. After Birdstep lost its main revenues with Sprint in November 2015, accounting for 87% of total revenue in 2015, the financial outlook has become critical. Birdstep had no other choice than to intensify its efforts to look for strategic alternatives in order to avoid default. The Transaction with Smith will secure a future for both the technology and the majority of BTAB's employees under the ownership of Smith.

After the completion of the Transaction Birdstep is expected to have a cash position net of transaction and other related costs of approximately NOK 26.2 million.

After completion of the contemplated sale of BTAB, Birdstep will need to pursue alternative strategies to create values to its shareholders. The contemplated cooperation with Smith and the partnership with Teki Solutions (both as announced on Oslo Børs on March 9, 2016) will enable Birdstep to profit from the continued development and extended distribution of products based on the same and familiar technology to the one that is now disposed of through the sale of BTAB, at a substantially reduced risk.

4. Agreements for the benefit of executive management or board members in connection with the Transaction

Except as stated below, there are no agreements, existing or contemplated, in connection with the Transaction that involve extraordinary benefits for senior employees or members of the board of directors in Birdstep or BTAB.

There is retention remuneration for the CEO with a total cost of NOK 3.7 million and the same for the COO with a total cost of around 1.6 million.

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