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The Kingfish Company successfully raises €32M for completion of Phase 2 and path to profitability

Kats, Netherlands – July 5, 2023: The Kingfish Company N.V. (the "Company") has successfully raised EUR 32 million in an unsecured convertible loan (the "Convertible Loan"). The Company experienced significant support and interest from both existing shareholders and new investors to participate in the Convertible Loan. The majority of the Convertible Loan is allocated to existing key shareholders, while EUR 11 million will be allocated to the sustainability-focused Ocean 14 Capital Fund (“Ocean 14”) on the key terms and conditions set out below.


Ocean 14 is an impact fund investing in venture and growth companies and technologies that offer sustainable solutions for the ocean. The Ocean 14 team has over 25 years of aquaculture industry experience including significant experience with RAS technology, further complementing the Company's list of reputable investors.


The net proceeds from the Convertible Loan shall be used for the purpose of making the Company's operations cash-positive and finance completion of the Company’s expansion of production capacity in its facilities in Zealand, the Netherlands (“Phase 2”), as well as general corporate purposes.


The background and rationale for the Convertible Loan is described in the Company’s annual report for 2022 and the business update presentation published on April 20, 2023, stating that the Company aims to strengthen its liquidity position by raising additional equity or debt during 2023.


PHASE 2 SCHEDULE UPDATE, CAPEX ESTIMATE REMAINS UNCHANGED

"The successful placement of the Convertible Loan will secure the completion of Phase 2. We are in the process of more than doubling our production capacity to meet the increasing demand for Dutch Yellowtail. The proceeds from the Convertible Loan will provide full funding for the expansion until we reach positive cash flow from operations and sustainable profitability,” said Vincent Erenst, Chief Executive Officer of the Kingfish Company.


“Production in the first of two grow-out systems in Phase 2 began in May 2023. The new facility has been running very well since the start and we are proud to have increased biomass by more than 100 tons in just over one month time. This is a testament to the advanced design and the skills of our team.”, said Mr. Erenst.


According to the revised project plan and timeline, the harvest volume from the farm in Zeeland will start to increase in the first quarter of 2024. Steady state production is expected in the course of 2025. Estimated capex for Phase 2 remains unchanged at EUR 95 million.




KEY TERMS OF THE CONVERTIBLE LOAN


· Principal amount: EUR 32 million.

· Tenor: 4 years.

· Conversion: At any time following the relevant drawdown date, each lender may convert its part of the Convertible Loan, including any accrued and unpaid interest and any Underwriting Commission (as defined below), into shares in the share capital of the Company, each with a nominal value of EUR 0.01 (“Shares”), at a strike price of EUR 0.929 (approximately NOK 11) per Share (the "Conversion Option"). Upon full conversion, at maturity, of all amounts under the Convertible Loan (including accrued but unpaid Interest and Underwriting Commission), up to a maximum of 61 million new Shares shall be issued in the capital of the Company.

· Status/ranking: The Convertible Loan is unsecured and shall be subordinated and rank after the Company’s senior facilities agreement (the “PCP facility”) with P Capital Partners AB (“PCP”).

· The Convertible Loan is split into two tranches:

(I) Tranche 1 consists of EUR 10 million, based on the authorization granted by the Company's annual general meeting held on June 20, 2023. The Company's supervisory board (the "Board") has resolved to (i) grant 10,763,182 rights to subscribe for Shares (of which each right gives a right to subscribe for one new Share) to the lenders (excluding Ocean 14) and (ii) exclude pre-emptive rights in respect thereof; and

(II) Tranche 2 consists of EUR 22 million. The Board will in due course convene an extraordinary general meeting of the Company to be held on July 24, 2023 (the "EGM"). At the EGM, it will be proposed to appoint the Board as the Company’s authorized body to (i) issue and/or grant rights to subscribe for up to a maximum of 70 million Shares, including as required to perform the Convertible Loan, and (ii) limit or exclude pre‑emptive rights in relation to any such issuance of Shares or any grant of rights to subscribe for such Shares.


· Underwriting commission: Other than Ocean 14, each lender shall receive a commission fee of 3% of its total commitment in the Convertible Loan (the "Underwriting Commission"). The Underwriting Commission shall be added as an equal amount to the principal loan amount from each lender and shall be subject to the same terms and conditions as the Convertible Loan (including the Conversion Option). The obligation to fulfil the Underwriting Commission shall not lapse or terminate if the EGM does not grant the required authorizations to the Board.

· Interest: 15% (PIK) per annum. In relation to Tranche 1, the PIK interest shall be settled in cash at the maturity of the Convertible Loan, provided that the Board will propose to the EGM that such PIK interest shall be subject to the Conversion Option.

· Drawdown dates: No later than July 11, 2023 for Tranche 1 and no later than August 17, 2023 for Tranche 2 (subject to resolution by the EGM). Completion of the Convertible Loan is necessary to avoid restriction by PCP of further draw down and potential covenant breach under the PCP facility.

· Early redemption: Upon an acquisition of Shares equal to more than 50% of the voting rights in the Company or a de-listing of the Shares, each lender may require redemption of its part of the Convertible Loan in whole or in part, plus any accrued but unpaid interest.

· Lock up: The lenders have undertaken a 3 months' lock-up period for Shares received upon exercise of the Conversion Option.

· Board observer: Subject to the resolutions by the EGM, Ocean 14 will be entitled to an observer on the Board.

· Voting undertaking: The lenders (representing a total of 77.42% of the Shares in the Company) have undertaken to vote in favor of the resolutions necessary to give full effect to the Convertible Loan at the EGM.



For media and investor inquiries, please contact



About Ocean 14 Capital


Ocean 14 Capital Fund 1 SCSp (“Ocean 14 Capital Fund” or the “Fund”) is an impact fund targeting €150 million and focused on driving a sustainable and regenerative blue economy. The Fund’s investment adviser, Ocean 14 Capital Ltd, has a team who combine more than 65 years of investment, impact and industry experience. The investment adviser’s team and advisors are considered to be some of the world’s most renowned economists, scientists and marine biologists, and it is considered that they have unparalleled access to proprietary deal flow and sector knowledge. Backed by the European Investment Fund (EIF), Chr. Augustinus Fabrikker, Builders Vision, Minderoo Foundation, Ingka group and British businessman Alex Beard and Swedish entrepreneur Niklas Zennström.


Advisors


ABG Sundal Collier ASA is acting as sole financial advisor, Wikborg Rein Advokatfirma AS is acting as Norwegian legal advisor and DLA Piper Nederland N.V. is acting as Dutch legal advisor to the Company in connection with the Convertible Loan. Advokatfirmaet Thommessen AS acted as legal advisor to ABG Sundal Collier ASA.


Disclosure regulation


This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. The information was submitted for publication by Marieke Palstra, Strategic Finance & Investor Relations Manager of the Company on July 5, 2023 at 08:00 CEST.


About The Kingfish Company


The Kingfish Company is a pioneer and leader in sustainable land-based aquaculture. Current annual production capacity at its Kingfish Zealand facility in the Netherlands is 1,500 tons of high quality and high-value yellowtail kingfish. Expansion is underway and capacity


in the Netherlands is expected to reach 3,500 tons. Kingfish Maine is now fully permitted by local, state and federal regulatory agencies.


Production is based on advanced recirculating aquaculture systems (RAS), which protect biodiversity and ensure biosecurity. Animal welfare is paramount, and the fish is grown without use of antibiotics and vaccines. Operations run on 100 percent renewable energy, sourced from wind, solar and biogas. The Company's facilities operate on sea water, avoiding wasting precious fresh water.


The Kingfish Company's main product at present, the yellowtail kingfish (also known as ricciola/hiramasa/greater amberjack) is a highly versatile premium fish species, well known in the Italian and Asian fusion cuisines. Its products are certified and approved as sustainable and environmentally friendly by Aquaculture Stewardship Council (ASC), Best Aquaculture Practices (BAP) and British Retail Consortium (BRC). It was the winner of the 2019 Seafood Excellence Award, and it is recommended as green choice by Good Fish Foundation.


IMPORTANT NOTICE


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 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. 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 unless required by applicable laws and regulations.


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