Techstep ASA — Regulatory Filings 2015

Jan 5, 2015

Detailed Stock Exchange Announcement

A detailed stock exchange announcement is hereby released in compliance with the requirements pursuant to section 3.4 of the "Continuing obligations of stock exchange listed companies"/Oslo Børs, July 2013.

Birdstep Technology ASA ( "Birdstep" or the"Company") has on January 5, 2015 entered into a transactional agreement with Birdstep Technology AB, which represents a decrease of more than 5% in the Company's total assets.

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

1. The Transaction and the parties to the Transaction

1.1 Birdstep Technology AB

Birdstep Technology AB ("BSTAB") is a wholly owned Swedish subsidiary of the Company.

1.2 The Agreement

The Company and BSTAB entered into an Asset Transfer Agreement on January 5, 2015, whereby all customer contracts and IP rights ("IPR") vested in the Company transfered to BSTAB on January 1, 2015 (the "Transfer Date").

The transfer of customer contracts and IPR from the Company to BSTAB will herein be referred to as the "Transaction".

1.3 Special conditions or license issues

The assignment of customer contracts is subject, where required, to consent from the customer.

1.4 The consideration

The consideration for the Transaction is KNOK 197 977 (the "Consideration"). The Consideration will be executed by way of an issue at kind, where the IPR will be the capital contribution on the Transfer Date.

2. Description of the business to which the Transaction applies

2.1 The business to which the Transaction applies

The Transaction comprises the Company's Smart Mobile Data ("SMD") business segment. Birdstep's SMD business segment offers products and services for connection and service management, support automation and end user communication for network operators and device manufacturers, through its main products Easy Connect, Easy Smart, Easy Help, SmartANDSF and Easy Analytic.

The technology and intellectual property rights that are being transferred include patents, trademarks and trade names, copyright and know how related to the SMD product and service portfolio. The assignment of the customer contracts is subject, where required, to consent from the customer.

Over the past years, the Company has developed long-term customer relationships with many of the leaders in the industry. Its dedication to its customers and its ability to adapt to their way of doing business has enabled the Company to expand throughout the globe. Today, the Company has deployed with more than 40 operators, Tier 1 partnerships and OEM relationships worldwide and more than 8 million end-users around the world.

2.2 Board of directors, executive management and employees

2.2.1.1 Board of directors of Birdstep

Name	Position
Tom Nyman	Chairman of the Board
Kirsten English	Board member
Arne Aarnes	Board member
Anna Malm Bernsten	Board member
Ian Jenks	Board member

The table below sets forth the current board members:

2.2.1.2 Board of directors of BSTAB

The table below sets forth the current board members:

Name	Position
Tom Nyman	Board member
Anna Malm Bernsten	Deputy Board member

2.2.2 Executive management

Birdstep Technology Group:

Name	Position
Lonnie Schilling	CEO
Sophie Rabenius*	CFO
Hassan Tabrizi	Acting CFO
Maria Johansson	Global HR Manager
Marie-Louise Nilsson	VP Market Communications
Anders Storm	VP Engineering & Operations

* on maternity leave from 17 October 2014

2.2.3 Number of employees

As of the date of this announcement, the total number of employees within the Company and its subsidiaries is 45.

2.3 Key figures

The table below shows selected financial information for the SMD business as at the dates and for the years indicated, which have been extracted without material adjustment from the Company's audited annual reports for 2013, 2012 and 2011, which may be found at the Company's website, www.birdstep.com and which are incorporated by reference into 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 2013, 2012 and 2011.

Birdstep's key figures (in NOK 1 000):

	2013	2012	2011
Operating revenue	51 812	28 413	30 457
Operating result (EBITDA)	2 518	-18 072	-19 755
Total assets	63 948	58 185	51 649

The table below shows selected financial information for the SMD business for the third quarter of 2014, which have been extracted from the Company's unaudited interim financial report for Q3 2014.

Birdstep's key figures (in NOK 1 000):

	Q3 2014	Q3 2013	1 Jan – 30 Sept	1 Jan – 30
			2014	Sept 2013
- Operating revenue	11 978	11 978	39 427	38 967
- Operating result	-2 175	-3 318	-6 712	-4 100
(EBIT)
- Total assets (30/9)	84 536	73 304	84 536	73 304

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

By this transaction the Company will become a holding company, with BSTAB becoming the operating entity and the commercial arm of the Birdstep Group in the sense that BSTAB will become the provider and licensor of the Company's commercial solutions and offerings. Hence, the significance of the transaction relates primarily to increased operational efficiencies and thereby cost optimization.

From a group perspective the Transaction will have minimal revenue and earnings impact. But, the impact on the Company's revenue and earnings will be affected as all invoicing, cash collection and revenue will be handled in BSTAB as of the Transfer Date.

During the last decade the structure of the Company has varied as entities were acquired and sold off. Also, the core business of the Company has changed during the recent years. Today Birdstep's

core business is built around the SMD segment with the Secure Mobility ("SM") segment as a separate part of the total business. However, the present business structural reality is not reflected in organizational structure within the organisation. Presently, the day-to-day business handling is based upon a model which goes back to the group's structure several years ago. By restructuring the group's legal structure to a model mirroring today's business reality much will be gained from an efficiency and simplification perspective. This is beneficial to all involved parties, shareholders, customers, management and employees.

This Transaction is the first step in such a restructuring. Today the contractual and business activities are separated from each other insofar that the contractual and ownership of resources and assets resides within the Company while day-to-day activity such as product development, sales etc. is largely managed out of BSTAB. Moreover, important management/administrative functions within the Group are today carried out at the Stockholm offices of BSTAB. To unify these would strongly increase efficiency, simplification and clarity.

There is a significant gain in efficiency when the operation is managed from one company. The company will also have simplified accounting processes. BSTAB will after the Transaction become the entrepreneur of the SMD business by owning IPRs, customer contracts, performing roadmap development, product management and pricing and this will increase efficiency throughout the organisation.

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

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 the Company or BSTAB.

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