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2014-04-11

Hofseth Biocare ASA : Completed Private Placement and Financial and Operational update

NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, TO THE U.S NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.
Hofseth BioCare ASA ("Hofseth BioCare" or the "Company", ticker "HBC") hereby announces that it has raised NOK 90 million in gross proceeds through a private placement of 20 million new shares, each with a par value of NOK 1.00, at a subscription price of NOK 4.5 per share (the "Private Placement"). The shares to be issued upon the completion of the Private Placement will represent approximately 25.8 % of the current outstanding share capital of the Company.
The net proceeds from the Private Placement will be used for general corporate purposes mainly within Marketing and Sales activities, conversion of shareholder loans and trade payables, repayment of overdue trade payables and working capital.
10 million of the new shares were subscribed by existing shareholders and certain of HBC's key suppliers and the remaining 10 million new shares were subscribed by Codfarmers AS whose ultimate owner is Jerzy Malek, the founder of Morpol.
"We are honored to have Mr Jerzy Malek on board as a new major shareholder in Hofseth BioCare and appreciate the experience and competence he represents as one of the leading entrepreneurs in the aquaculture industry. With the right competence and the financial platform in place, we are at the execution milestone of providing better margins to the Norwegian Seafood Industry by utilizing the whole fish and HBC is sustainable aquaculture to the core", says Jon Olav Ødegård, CEO of Hofseth BioCare.
Notification of allotments and payment instructions for shares to be issued upon the completion of the Private Placement will be sent to the applicants later today through a notification to be issued by the Managers.
The completion of the Private Placement is conditional upon the following being satisfied:
- all necessary corporate resolutions being validly made, including without limitation approval by an extraordinary general meeting of the Company expected to be held on or about 2 May 2014 (the "EGM");

- payment being received for the shares to be issued in the Private Placement;
- all outstanding shareholder loans post completion of the Private Placement being extended until 1 October 2015 with neither amortization nor payment of accrued interest being made prior to the maturity date of the principal amount;
- the Company being in compliance with its existing loan agreements at the time of the EGM; and
- audited 2013 annual accounts being available at the time of the EGM;
More than 67% of the Company's shareholders have undertaken to vote in favour of the Private Placement in the EGM.
The new shares issued in the Private Placement is expected to be listed on or about 20 May 2014, subject to a listing prospectus being approved by the Financial Supervisory Authority of Norway.
Carnegie AS and Swedbank Norway acted as Managers in the Private Placement.
For further information about the Private Placement, please contact:
Carnegie AS, +47 22 00 93 40

Swedbank Norway, +47 23 23 80 71
FINANCIAL AND OPERATIONAL UPDATE

As described in the report for the fourth quarter of 2013, the production process was working well. This positive trend has continued in the first quarter of 2014 and the Company is now producing at stable yields and in accordance with human nutrition specifications. As communicated in earlier stock exchange announcements, the Company has identified new mixing technology and enzymes that will enable the Company to more than double the current production capacity from current 20,000 tons of raw material per year to around 50,000 tonnes.

With the production process now fully functioning, Hofseth BioCare is committed to strengthen its sales and marketing activities in order to commercialize its unique product portfolio. The Company has received solid feedback for the products and has currently discussions at an advanced stage with a number of potential customers which will upon successful outcome involve significant sales volume and revenues to HBC.
In view of the ongoing discussions for new potential contracts, HBC has in the first quarter of 2014 focused on building inventory of finished products in order to meet the anticipated volume requirements relating to these potential contracts which the Company hopes will materialize during the next 3-9 months. In that respect, the Company expects to report limited revenues for the first quarter of 2014 and the preliminary un-audited figures indicate total revenues of around NOK 1.6 million, EBITDA of around -11.5 million and a net loss of around 16.0 million.
The Company deems the outlook for 2014 and onwards very attractive as HBC is now entering the commercialisation phase with a fully functioning production process, although recognizing that the Company is in a development phase before it can take advantage of the full market potential. To strengthen the balance sheet and secure a solid financial platform for commercialisation of the product portfolio, the Company has completed an equity issue of NOK 90 million as described above.
For further information about the financial and operational update, please contact:
Jon Olav Ødegård, CEO Hofseth BioCare ASA

Tel +47 936 32 966
E-mail:joo@h-bc.no
Øystein Omvik, CFO Hofseth BioCare ASA

Tel: +47 936 99 400
E-mail:oystein.omvik@h-bc.no
About Hofseth BioCare:
Hofseth BioCare is a Norwegian biomarine company with the key objective to provide high value added biomarine ingredients for human applications. The Company is founded on the core value of sustainability and optimal use of natural resources. Through innovative production technology and logistics, Hofseth BioCare is able to preserve the quality of protein, calcium and oil extracted from fish off-cuts. Products that previously could only be used as animal feed can now be made suitable for human consumption. HBCs objective is thus to contribute to efficient use of marine resources and entering the higher profit market of quality ingredients for human applications.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

HBC Company Presentation
http://hugin.info/149237/R/1776613/606181.pdf

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Hofseth Biocare ASA via Globenewswire

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