TECHSTEP ASA – Financial update and Private placement of NOK 75-125 million

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN CANADA, JAPAN, AUSTRALIA OR THE UNITED STATES, OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. This announcement is not a prospectus and does not constitute a public offer of any of the securities described herein.

Techstep ASA ("Techstep" or the "Company") today announces a cost reduction program and new financial targets, as well as a private placement of new shares (the “Placement Shares”) in the Company raising gross proceeds of NOK 75 million to NOK 125 million (the "Private Placement").

Financial update

Techstep announces a cost reduction program of NOK 90-100 million and sets new financial targets. By right-sizing the organisation, extracting synergies from previously acquired companies and capitalising on the growth prospects of its new product portfolio, Techstep target in year 2025 to exceed NOK 540 million in Gross Profit, NOK 225 million in Software ARR and NOK 150 million in EBITA.

For further information, please see the enclosed investor presentation.

The Private Placement

Techstep has retained Arctic Securities AS and SpareBank 1 Markets AS as joint bookrunners in connection with the Private Placement (jointly the "Managers").

Datum AS and Karbon Invest AS has pre-subscribed for NOK 25 million each in the Private Placement, a total of NOK 50 million. In addition sellers’ credits related to previous acquisitions of a total of approximately NOK 25.2 million are agreed to be converted in the Private Placement.

The offer price per Placement Share will be NOK 1.15. Approximately 97 percent of the sellers' credits will be converted at a discount of 10%, subject to an acceptance of a lock-up of their converted shares until 1 January 2023.

The net proceeds from the Private Placement will be used for the above-mentioned conversion of sellers’ credits (NOK 25 million), restructuring and transformation costs (NOK 25 million), strengthening balance sheet (NOK 25-50 million) and general corporate purposes.

The book-building period will commence immediately, today 28 September 2022 at 17:45 hours CEST and will close on 29 September 2022 at 16:30 CEST. The Company may, however, at any time shorten or extend the book-building period at its discretion and on short or without notice. If the book-building period is shortened or extended, the other dates in this message may be changed accordingly. The Company reserves the right to cancel the Private Placement at any time and for any reason without giving prior notice or reasoning.

The Private Placement will be divided in two tranches. Tranche 1 ("Tranche 1") will consist of 38,985,520 New Shares (the "Tranche 1 Shares") to be issued by the Board pursuant to an authorisation granted by the Company's annual general meeting on 21 April 2022 (the "Authorisation"). Tranche 1 shares are expected to be settled with existing and unencumbered shares in the Company that are already listed on Oslo Børs, pursuant to a share lending agreement. Tranche 2 ("Tranche 2") will consist of a number of New Shares that, together with the Tranche 1 Shares, is necessary in order to raise gross proceeds of NOK 75-125 million (the "Tranche 2 Shares"), to be issued by and subject to the Company's extraordinary general meeting to be held on or about 20 October 2022 (the "EGM"). Tranche 2 shares are expected to be settled with existing and unencumbered shares in the Company that are already listed on Oslo Børs, pursuant to a share lending agreement. The Pre-Committed Investors has undertaken to take delivery of shares in the Private Placement in Tranche 2.

The Private Placement will consist of a private placement to professional and non-professional investors, subject to applicable exemptions from relevant registration, filing and prospectus requirements. The minimum application of shares per investor in the Private Placement will be a NOK amount equivalent to EUR 100,000, provided that the Company may, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to applicable regulations, including the Regulation (EU) 2017/1129 and ancillary regulations, are available.

Completion of Tranche 1 is subject to approval by the Board pursuant to the Authorisation, while completion of Tranche 2 is subject to approval by the EGM. Further to this, completion of the Private Placement is subject to: (i) the corporate resolutions of the Company required to implement the Private Placement, including a resolution of the Board to proceed with the Private Placement following the expiry of the Application Period and to increase the share capital of the Company by the issuance of the New Shares pursuant to the Authorisation and (ii) that the allocated New Shares having been fully paid, validly issued (by way of registration of the share capital increase pertaining to the issuance of the New Shares in the Norwegian Register of Business Enterprises) and registration of the New Shares in VPS (the "Conditions").

The Private Placement (both Tranche 1 and Tranche 2) will be settled with existing and unencumbered shares in the Company that are already listed on Oslo Børs, pursuant to a share lending agreement between the Company, the Managers, Datum AS and Karbon Invest AS. The new shares to be delivered to the lenders under the share lending agreement (other than shares lent to settle Tranche 1 shares) will be delivered on a separate and non-tradable ISIN, pending approval of the Prospectus by the Norwegian Financial Authority

The Board of Directors has considered the Private Placement in light of the equal treatment obligations under the Norwegian Securities Trading Act and Oslo Børs' Circular no. 2/2014, and is of the opinion that the proposed Private Placement is in compliance with these requirements. The equity issuance will be carried out as a private placement in order to complete a transaction in an efficient manner to strengthen the Company’s balance sheet. On this basis, and based on an assessment of the current equity markets, the Company’s need for equity funding, deal execution risk and possible alternatives, the Board of Directors has considered the Private Placement to be in the common interest of the Company and its shareholders. As a consequence of the overall transaction structure, the shareholders' preferential rights will be deviated from.

The Board of Directors will consider whether to launch a subsequent repair offering to the Company's existing shareholders based on circumstances upon completion of the Private Placement, in particular in relation to the pricing of the Private Placement and the outcome of the allocation of the Placement Shares.

AGP Advokater AS is acting as legal advisor to the Company in connection with the Private Placement.

For further information, please contact:

Børge Astrup, CEO, Techstep ASA: +47 928 27 676

Anita Huun, CFO, Techstep ASA: +47 924 11 563

Techstep is a mobile technology company that enables organisations to perform smartly, securely and sustainably through combining software, mobile devices and services to meet customers´ business and ESG goals.  We are a leading provider of managed mobility services in the Nordics serving more than 2 000 customers in Europe, with an annual revenue of NOK 1.3 billion in 2021. We are listed on the Oslo Stock Exchange under the ticker TECH.  To learn more, please visit techstep.io.

This information is considered to be inside information pursuant to the EU Market Abuse Regulation (MAR) and is subject to the disclosure requirements pursuant to MAR article 17 and section 5 -12 of the Norwegian Securities Trading Act. This stock exchange release was published by Cathrine Birkenes, Head of Sustainability and Compliance, on 28 September at 17:45 CEST.

IMPORTANT NOTICE

This announcement is not a prospectus and does not form a part of any public offer to sell, or a solicitation of a public offer to purchase, any securities of the Company. Copies of this announcement are not being made and may not be distributed or sent into any jurisdiction in which such distribution would be unlawful or would require registration or other measures. Any offering of the securities referred to in this announcement will be made by means of a set of subscription materials provided to potential investors. Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in the aforementioned subscription material.

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "US Securities Act"), and accordingly may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the US Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any part of the offering in the United States or to conduct a public offering of securities in the United States. Any sale in the United States of the securities mentioned in this announcement will be made solely to "qualified institutional buyers" as defined in Rule 144A under the US Securities Act.

In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the EU Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "EU Prospectus Regulation" means Regulation (EU) 2017/1129 as amended (together with any applicable implementing measures in any Member State.

This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only for relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release, in particular regarding the Company’s new financial targets, are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believe that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict, and are beyond their control. Actual events may differ significantly from any anticipated development due to a number of factors, including without limitation, changes in public sector investment levels, changes in the general economic, political and market conditions in the markets in which the Company operates, the Company's ability to attract, retain and motivate qualified personnel, changes in the Company's ability to engage in commercially acceptable acquisitions and strategic investments, and changes in laws and regulation and the potential impact of legal proceedings and actions. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not make any guarantee that the assumptions underlying the forward-looking statements in this announcement are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. You should not place undue reliance on the forward-looking statements in this announcement.

The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm, or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement.

Neither the Managers nor any of their affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.

This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. Neither the Managers nor any of its affiliates accepts any liability arising from the use of this announcement.

In connection with the Private Placement, the Managers and any of their affiliates, acting as investors for their own accounts, may subscribe for or purchase shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such shares and other securities of the Company or related investments in connection with the Private Placement or otherwise. Accordingly, references in any subscription materials to the shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, such Manager and any of their affiliates acting as investors for their own accounts. The Managers do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.