Hofseth Biocare ASA: PRIVATE PLACEMENT SUCCESSFULLY PLACED

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES OR ANOTHER 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.

(Ålesund, 16 October 2020) Reference is made to the stock exchange release from Hofseth Biocare ASA ("HBC" or the "Company") published on 15 October 2020 regarding a contemplated private placement.

The Company hereby announces that it has allocated 24,691,358 new shares in the Company (the "Offer Shares") in a private placement (the "Private Placement") at a subscription price of NOK 8.10 per share, corresponding to a total size of the Private Placement of NOK 200 million. The Private Placement was significantly oversubscribed.

Pareto Securities acted as sole manager in connection with the Private Placement.

The net proceeds of the Private Placement will be used for R&D activities, expanding production capacity, ramping up sales and marketing, as well as for general corporate purposes.

Notification of allotment of the Offer Shares including settlement instructions will be sent to the applicants through a notification from the Manager on or about 16 October 2020. The Offer Shares will be settled through a delivery versus payment transaction on or about 20 October 2020 with existing and unencumbered shares in the Company that are already admitted to trading on Oslo Axess, pursuant to a share lending agreement between the Company, the Manager, Hofseth International AS, Hofseth AS and Seafood Farmers of Norway AS. The Offer Shares will be tradable from allocation, i.e. from 16 October 2020.

In order to settle the share loan, the Company's Board of Directors has resolved to issue 24,691,358 new shares in the Company to the Manager pursuant to the authorization granted by the Company's annual general meeting on 25 May 2020. Consequently, the share capital of the Company will be increased with NOK 246,913.58 from NOK 3,302,090.01 to NOK 3,549,003.59. Following registration of the new share capital pertaining to the Private Placement, the Company will have 354,900,359 shares outstanding, each with a par value of NOK 0.01.

The Company's Board is of the opinion that the Private Placement complies with the equal treatment obligations under the Norwegian Securities Trading Act and Oslo Børs' Circular no. 2/2014, in particular due to the fact that (i) in the current market, a private placement had a larger possibility of success compared to a rights issue and, therefore, gives the Company timely access to the new capital at lower risk; (ii) the cost of raising capital is assumed to be lower than in a rights issue since any discount is likely to be smaller and subscription guarantees are avoided; and (iii) the Company intends to carry out a subsequent offering directed towards shareholders not offered to participate in the Private Placement (the "Subsequent Offering"). On this basis and based on an assessment of the current equity markets, the Company's Board has considered the Private Placement to be in the common interest of the Company and its shareholders. As a consequence of the Private Placement structure, the shareholders' preferential rights were deviated from.

Subject to the approval of a prospectus by the Norwegian Financial Supervisory Authority, HBC will carry out a Subsequent Offering of up to 4,983,271 new shares in the Company, corresponding to gross proceeds of up to approximately NOK 40 million. The Subsequent Offering will be made on the basis of a prospectus and will be directed towards eligible shareholders in the Company who (i) are shareholders as of 15 October 2020, as registered in the VPS as of 19 October 2020, (ii) were not provided with insider information in the pre-sounding phase of the Private Placement, (iii) were not allocated Offer Shares in the Private Placement, or (iv) 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 (the "Eligible Shareholders"). The Eligible Shareholders will be granted non-tradable subscription rights. Over-subscription will be permitted, but subscription without subscription rights will not be permitted in the Subsequent Offering. The subscription period in the Subsequent Offering is expected to commence shortly after publication of a prospectus, and the subscription price in the Subsequent Offering will be the same as in the Private Placement.

Advokatfirmaet CLP DA acts as Norwegian legal counsel in connection with the Private Placement.

For further information, please contact:

James Berger, Head of Investor Relations & Strategy at Hofseth BioCare ASA

Phone:

E-mail:

Jon Olav Ødegård, CFO at Hofseth BioCare ASA

Phone:

E-mail:

About Hofseth BioCare ASA:

HBC is a Norwegian biotech company that develops high-value ingredients and finished products. The ingredients are in various stages of discovery and preclinical development in collaboration with multiple clinics and university research labs in several countries. Lead preclinical and clinical candidates are in development toward treatment for iron-deficiency anemia, Gastro-Intestinal Inflammation (NEC/IBS/UC), prediabetes, age-related sarcopenia and osteoarthritis.

The company is founded on the core values of sustainability, traceability and optimal utilization of natural resources. Through an innovative hydrolysis technology, HBC can preserve the quality of lipids, proteins and calcium from fresh salmon off-cuts. Hofseth BioCare's headquarters are in Ålesund, Norway with branches in Oslo, London, Zürich, Chicago, Menlo Park and Tokyo.

HBC is listed on Oslo Axess with ticker "HBC". More information about Hofseth BioCare at hofsethbiocare.com and facebook.com/hofsethbiocare.

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