Prospectus Aqualis ASA - Carnegie Investment Bank...Prospectus Aqualis ASA (A public limited...
Transcript of Prospectus Aqualis ASA - Carnegie Investment Bank...Prospectus Aqualis ASA (A public limited...
Prospectus
Aqualis ASA
(A public limited liability company organised under the laws of Norway)
Org.no. 983 733 506
Listing of 43 750 000 New Shares, issued to the Aqualis Offshore Ltd
shareholders as consideration for the Contribution in Kind
Offering and listing of 33 755 515 Offer Shares, each with a par value of
NOK 1, at a subscription price of NOK 1.60 per Offer Share with tradable
subscription rights for existing shareholders of Aqualis ASA as per the end
of 8 October 2013
Offering of up to 5 000 000 Employee Offer Shares at a subscription price
of NOK 1.60
Subscription Period for the Offerings and trading in Subscription Rights:
From and including 15 October 2013 to 29 October 2013 at 16:30 hours (CET)
Manager:
11 October 2013
AQUALIS ASA
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IMPORTANT INFORMATION
Please refer to section 18 “Definitions and Glossary of terms” for definitions of terms used throughout this
Prospectus, which also apply to the preceding pages.
This Prospectus has been prepared in order to provide information about Aqualis ASA (“Aqualis” or the
“Company”) and its business in relation to the listing of New Shares and offer and listing of Offer Shares, and to
comply with the Norwegian Securities Trading Act of June 29, 2007 no. 75 (the “Norwegian Securities Trading
Act”) and related secondary legislation, including EC Commission Regulation (EC) no. 809/2004 implementing
Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive) regarding
information contained in prospectuses (the “Prospectus Directive”). This Prospectus has been prepared solely in
the English language. Note that the Company’s former name was Clavis Pharma ASA, and that the change of
name was effective from 8 October 2013. For further information see section 9.1 in this Prospectus.
The Company has furnished the information in this Prospectus. The Company has engaged Carnegie AS as
manager (“Carnegie” or the "Manager") for the Transaction and the Rights Issue. Neither the Company nor the
Manager has authorised any other person to provide investors with any other information related to the
Transaction and the Rights Issue and neither the Company or the Manager will assume any responsibility for
any information other persons may provide.
Unless otherwise indicated, the information contained herein is current as of the date hereof and the information
is subject to change, completion and amendment without notice. In accordance with Section 7-15 of the
Norwegian Securities Trading Act, every significant new factor, material mistake or inaccuracy that is capable
of affecting the assessment of the Shares arising after the time of approval of this Prospectus and before the date
of listing of the Offer Shares on Oslo Børs will be published and announced promptly as a supplement to this
Prospectus. Neither the publication nor distribution of this Prospectus shall, however, under any circumstances
create any implication that there has been no change in the Group’s affairs since the date hereof or that the
information herein is correct as of any time since its date.
An investment in the Company involves inherent risks. Potential investors should carefully consider the risk
factors set out in section 2 “Risk Factors” and the information set out in section 4 "Cautionary note regarding
forward looking statements" in addition to the other information contained herein before making an investment
decision. An investment in the Company is suitable only for investors who understand the risk factors associated
with this type of investment and who can afford a loss of their entire investment. The contents of this Prospectus
are not to be construed as legal, business or tax advice. Each prospective investor should consult with its own
legal adviser, business adviser and tax adviser as to legal, business and tax advice. In the ordinary course of their
respective businesses, the Manager and certain of their respective affiliates have engaged, and will continue to
engage, in investment and commercial banking transactions with the Group.
The Shares are subject to restrictions on transferability and resale and may not be transferred or resold except as
permitted under applicable securities laws and regulations. Investors should be aware that they may be required
to bear the financial risks of an investment in the Shares for an indefinite period of time. Any failure to comply
with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
Without limiting the manner in which the Company may choose to make any public announcements, and subject
to the Company’s obligations under applicable law and regulations, announcements relating to the matters
described in this Prospectus will be considered to have been made once they have been received by Oslo Børs
and distributed through its information system.
The distribution of this Prospectus and the offer and sale of the New Shares and Offer Shares in certain
jurisdictions may be restricted by law. The Company and the Manager require persons in possession of this
Prospectus, in possession of Subscription Rights or considering subscribing for Offer Shares to inform
themselves about, and to observe, any such restrictions. This Prospectus does not constitute an offer of, or an
invitation to subscribe or purchase, any of the Offer Shares in any jurisdiction in which such offer or
subscription or purchase would be unlawful. No one has taken any action that would permit a public offering of
the Shares, the Subscription Rights or the Offer Shares to occur outside of Norway. Furthermore, the restrictions
and limitations listed and described herein are not exhaustive, and other restrictions and limitations in relation to
the Transaction, Rights Issue and/or the Prospectus that are not known or identified by the Company and the
Manager at the date of this Prospectus may apply in various jurisdictions as they relate to the Prospectus. For
other selling and transfer restrictions, see section 17 “Selling and Transfer Restrictions”
AQUALIS ASA
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TABLE OF CONTENTS
1. EXECUTIVE SUMMARY .......................................................................................................................... 4
2. RISK FACTORS ........................................................................................................................................ 17
3. STATEMENT OF RESPONSIBILITY ................................................................................................... 23
4. CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS .............................. 24
5. THE TRANSACTION ............................................................................................................................... 25
6. THE RIGHTS ISSUE ................................................................................................................................ 28
7. PRESENTATION OF AQUALIS ASA .................................................................................................... 38
8. PRESENTATION OF AQUALIS OFFSHORE ...................................................................................... 42
9. THE GROUP FOLLOWING THE TRANSACTION ............................................................................ 50
10. FINANCIAL INFORMATION ................................................................................................................ 58
11. BOARD OF DIRECTORS, MANAGEMENT AND EMPLOYEES ..................................................... 70
12. SHARE CAPITAL ..................................................................................................................................... 77
13. SHAREHOLDER MATTERS AND NORWEGIAN COMPANY AND SECURITIES LAW ........... 80
14. LEGAL MATTERS ................................................................................................................................... 86
15. NORWEGIAN TAXATION ..................................................................................................................... 87
16. ADDITIONAL INFORMATION ............................................................................................................. 90
17. SELLING AND TRANSFER RESTRICTIONS ..................................................................................... 91
18. DEFINITIONS AND GLOSSARY OF TERMS ..................................................................................... 96
APPENDICES
Appendix A ARTICLES OF ASSOCIATION .........................................................................................................................
Appendix B INTERIM FINANCIAL INFORMATION FOR AQUALIS OFFSHORE LTD FOR THE
SIX MONTHS PERIOD ENDED 30 JUNE 2013 ...............................................................................................
Appendix C FINANCIAL STATEMENTS FOR STANDARD ENGINEERING AS FOR THE YEAR
ENDED 31 DECEMBER 2012............................................................................................................................
Appendix D SUBSCRIPTION FORM FOR THE RIGHTS ISSUE ........................................................................................
Appendix E SUBSCRIPTION FORM FOR THE EMPLOYEE OFFERING .........................................................................
Appendix F INDEPENDENT ASSURANCE REPORT ON THE PRO FORMA FINANCIAL
INFORMATION ..................................................................................................................................................
Appendix G INDEPENDENT REPORT ON FAIR VALUE OF AQUALIS OFFSHORE .....................................................
AQUALIS ASA
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1. EXECUTIVE SUMMARY
Summaries are made up of disclosure requirements known as "Elements". These elements are numbered in
Sections A – E (A.1 – E.7).
This summary contains all the Elements required to be included in a summary for this type of securities and
issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence
of the Elements.
Even though an Element may be required to be inserted in the summary because of the type of securities and
Issuer, it is possible that no relevant information can be given regarding the Element. In this case a short
description of the Element is included in the summary with the mention of "not applicable".
Section A – Introduction and warnings
Element Description
of Element
Disclosure requirement
A.1 Warnings This summary should be read as an introduction to the Prospectus.
Any decision to invest in the Offer Shares should be based on consideration of the
Prospectus as a whole by the investor.
Where a claim relating to the information contained in the Prospectus is brought
before a court, the plaintiff investor might, under the national legislation in its
Member State, have to bear the costs of translating the Prospectus before the legal
proceedings are initiated.
Civil liability attaches only to those persons who have tabled the summary
including any translation thereof, but only if the summary is misleading,
inaccurate or inconsistent when read together with the other parts of the
Prospectus or it does not provide, when read together with the other parts of the
Prospectus, key information in order to aid investors when considering whether to
invest in such securities.
A.2 Resale and
final
placement by
financial
intermediates
Not applicable. No resale will take place. No financial intermediaries will be used
for the final placement of the offer.
Section B - Issuer
Element Description
of Element
Disclosure requirement
B.1 Legal and
commercial
name of the
Issuer
Aqualis ASA
B.2 Domicile and
legal form of
the Issuer, the
legislation
under which
the Issuer
operates and
its country of
incorporation
Aqualis ASA is a public limited liability company pursuant to the Norwegian
Public Limited Liability Companies Act, incorporated under the laws of Norway.
The Company was established on 30 August 2001. The Company’s organisation
number is 983 733 506, and its currently registered office is Sjølyst Plass 2, 0278
Oslo, Norway with telephone number: +47 23 01 49 00.
B.3 Key factors
relating to
current
operations and
activities,
Aqualis was up until early 2013 a clinical-stage oncology focused pharmaceutical
company with a portfolio of novel anti-cancer drugs in development. These
patented New Chemical Entities (NCEs) were novel, improved versions of well-
established and commercially successful drugs (parent drugs), developed using the
Company's Lipid Vector Technology (LVT), and were believed to have better
AQUALIS ASA
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main
categories of
products sold
and principal
markets
efficacy than the parent drugs and a similar side effect profile.
Aqualis has been focusing on two key late stage drug candidates: CP-4126 and
Elacytarabine. However, both drug candidates failed to show any improvements
compared to existing drugs in their respective studies and development work was
terminated.
Following the discontinuation of development of elacytarabine in April 2013, and
of CP-4126 in November 2012, the Company has no drug candidates in clinical
development and has suspended all R&D activities. As a result, most of the
employees have left the Company and it has only 2 employees at the date of this
Prospectus.
Aqualis still has a large portfolio of patents relating to the LVT-technology and
the Company will sell or out-license some or all of these patents should the
opportunity arise.
In addition the Company has a licensing agreement, which was entered into in
May 2011, with Translational Therapeutics, Inc. (“TT”), an early-stage private
biopharmaceutical company based in Massachusetts, USA, for the development
and commercialisation of CP-4033. CP-4033 is a LVT derivative of ribavirin,
currently in the preclinical state of development. TT is developing CP-4033 for
use in the treatment of aggressive thyroid cancer, and will evaluate the potential of
CP-4033 for in the treatment of other solid tumours. Under the terms of the
agreement, TT is responsible for all future development of CP-4033 and Aqualis
may receive future milestones, should TT sub-license CP-4033, and royalty
payments on potential future sales. The Company also has a licensing agreement
with Mt. Sinai School of Medicine, New York, for the possible development of
the pre-clinical compound CP-4200, a LVT derivative of azacytidine.
Going forward, the Company will try to maximize the value of these assets by
closely following the licensees’ development of potential drug candidates, and
through further out-licensing or sale of existing patents and patent applications.
On 27 September 2013, Aqualis signed a final share purchase agreement (“SPA”)
to acquire 100% of the shares in Aqualis Offshore Ltd (“Aqualis Offshore”). The
Transaction was approved by the EGM on 8 October 2013.
While existing pharmaceutical activities will remain as a separate business area
within the Company, the Transaction represents a change in strategic direction for
the Company to include a new business area of specialist marine and engineering
consultancy services to the offshore oil and gas industry.
The Group’s new marine and offshore activities will be carried out through
Aqualis Offshore. Its target market is the offshore oil and gas and marine
segments in which it focuses on high-end niche consultancy. Aqualis Offshore’s
strategy is, through its specialist marine and engineering consultancy services, to
operate through a growing network of global offices. As it expands globally,
Aqualis Offshore pursues high growth ambitions focusing on developing
economies and emerging markets. The Group’s strategy is to expand the marine
and offshore activities through the establishment of new offices globally and
through a significant increase in the number of employees, and through potential
acquisitions of similar businesses. Please see section 8.3 for a more detailed
discussion of the strategic plans for Aqualis Offshore.
B.4a Significant
recent trends
affecting the
Issuer and the
industries in
which it
operates
Not applicable; the Company is not aware of trends, uncertainties, demands,
commitments or events that could possibly have a material effect on the Issuer’s
prospect since the end of the last financial year to the date of this Prospectus.
AQUALIS ASA
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B.5 Group/Issuer’s
position
within the
group
Not applicable; the Company has no subsidiaries as of the date of this Prospectus.
B.6 Persons
having an
interest in the
Issuer’s
capital or
voting rights
The following shareholders owned more than 5% of the issued share capital as of
7 October 2013:
Tycoon Industrier AS (3,000,000 Shares, representing 8.89% of total share
capital), Strata Marine & Offshore AS (2,000,000 Shares, representing 5.92% of
total share capital), Anko Invest AS (1,870,382 Shares, representing 5.54% of
total share capital) and Kristianro AS (1,716,444 Shares, representing 5.08% of
total share capital).
As far as the Company is aware of, there is no other natural or legal person other
than the above mentioned, which directly or indirectly has a shareholding in the
Company above 5 per cent which is noticeable under Norwegian law.
Shareholders with ownership exceeding 5 per cent must comply with disclosure
obligations according to the Norwegian Securities Trading Act Section 4.2.
B.7 Selected
historical key
financial
information
The selected financial information set forth below should be read in conjunction
with the Company’s published financial statements and its accompanying notes.
The following financial figures have been derived from the Company’s audited
financial statements as of, and for each of the three years ended 31 December
2012, 2011 and 2010 and from the unaudited condensed financial statements for
the three and six month periods ended 30 June 2013 and 2012.
Statement of comprehensive income
Three months ended 30
June
Six months ended 30
June
Year ended 31 December
NOK 1,000 2013
(unaudited) 2012
(unaudited) 2013
(unaudited) 2012
(unaudited) 2012
(audited) 2011
(audited) 2010
(audited)
Revenue........................................................................................................................................................... 18 10 135 49 20 261 77 271 40 542 25 393
Government grants .......................................................................................................................................... 183 559 743 3 504 7 710 2 910 4 173
Total operating income ................................................................................................................................. 201 10 694 792 23 765 84 981 43 452 29 566
Payroll and payroll related costs ...................................................................................................................... 11 232 11 851 26 262 27 773 56 458 54 628 45 232
Depreciation .................................................................................................................................................... 1 958 64 2 102 128 313 36 -
Other operating costs ....................................................................................................................................... (4 759) 29 395 56 414 55 860 132 204 150 720 103 567
Operating loss ................................................................................................................................................ (8 230) (30 616) (83 986) (59 996) (103 994) (161 932) (119 233)
Finance income ............................................................................................................................................... 3 414 2 934 4 865 6 216 11 246 9 389 6 716
Finance costs ................................................................................................................................................... 720 1 519 1 465 2 144 2 958 3 755 3 331
Loss before tax ............................................................................................................................................... (5 536) (29 201) (80 586) (55 924) (95 706) (156 298) (115 848)
Income tax expense ......................................................................................................................................... - - - - - - -
Loss for the period......................................................................................................................................... (5 536) (29 201) (80 586) (55 924) (95 706) (156 298) (115 848)
Source: The Company’s Q2 2013 interim financial report and annual reports 2012, 2011 and 2010.
AQUALIS ASA
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Statement of financial position
NOK 1,000 30.06.13
(unaudited) 30.06.12
(unaudited) 31.12. 12
(audited) 31.12.11
(audited) 31.12.10
(audited)
ASSETS
Production and lab equipment ......................................................................................................................... - 1 117 2 324 1 245 -
Total non-current assets ............................................................................................................................... - 1 117 2 324 1 245 -
Trade receivables ............................................................................................................................................ 960 44 - 19 1 270
Other receivables ............................................................................................................................................. 6 059 7 401 11 095 6 115 8 836
Cash and cash equivalents ............................................................................................................................... 86 649 299 581 222 620 215 304 348 609
Total current assets ....................................................................................................................................... 93 668 307 026 233 715 221 438 358 715
Total assets ..................................................................................................................................................... 93 668 308 143 236 039 222 683 358 715
EQUITY AND LIABILITIES
Share capital .................................................................................................................................................... 33 756 33 756 33 756 30 568 29 762
Share premium reserve .................................................................................................................................... 107 778 191 034 190 955 175 608 254 732
Other paid-in capital ........................................................................................................................................ (1 450) 5 853 12 529 12 155 10 569
Loss for the period........................................................................................................................................... (80 586) (55 924) (95 706) (156 298) (115 848)
Total equity .................................................................................................................................................... 59 498 174 719 141 534 62 033 179 215
Deferred revenue ............................................................................................................................................. - 36 856 - 36 856 77 063
Borrowings ...................................................................................................................................................... - 20 000 21 642 20 000 20 000
Other non-current liabilities ............................................................................................................................ - - - - 685
Total non-current liabilities .......................................................................................................................... - 56 856 21 642 56 856 97 748
Trade payables ................................................................................................................................................ 3 730 6 810 15 418 9 232 7 315
Deferred revenue ............................................................................................................................................. - 20 103 - 40 207 40 207
Other current liabilities .................................................................................................................................... 30 440 49 655 57 445 54 355 34 230
Total current liabilities ................................................................................................................................. 34 170 76 568 72 863 103 794 81 752
Total liabilities ................................................................................................................................................ 34 170 133 424 94 505 160 650 179 500
Total equity and liabilities ............................................................................................................................ 93 668 308 143 236 039 222 683 358 715
Source: The Company’s Q2 2013 interim financial report and annual reports 2012, 2011 and 2010.
AQUALIS ASA
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Cash flow statement
Three months ended 30
June
Six months ended 30
June
Year ended 31 December
NOK 1,000 2013
(unaudited) 2012
(unaudited) 2013
(unaudited) 2012
(unaudited) 2012
(audited) 2011
(audited) 2010
(audited)
Cash flow from operating
activities
Loss before income tax.................................................................................................................................... (5 536) (29 201) (80 586) (55 924) (95 706) (156 298) (115 848)
Non-cash adjustment to reconcile profit before tax to cash flow:
Estimated value of employee share options ..........................................................................................................................................................
(4 758) 2 858 (1 450) 5 853 12 529 12 155 10 569
Loss on disposal of plant &
equipment .....................................................................................................................................................
30 - 30 -
Depreciation .................................................................................................................................................... 1 958 64 2 102 128 313 36 -
Unrealised foreign currency
(gains)/losses ................................................................................................................................................
(467) 182 (472) 186 133 79 1 265
Changes in working capital:
Changes in trade receivables and
trade creditors ...............................................................................................................................................
(4 945) (491) (12 648) (2 447) 6 205 3 168 4 493
Changes in deferred income ............................................................................................................................ - (10 052) - (20 104) (77 063) (40 207) 35 431
Changes in other accruals ................................................................................................................................ (48 196) 313 (21 650) (5 986) (645) 29 598 13 225
Net interest (income/expense) ......................................................................................................................... (2 481) (1 542) (3 431) (4 130) (8 075) (6 585) (4 229)
Net cash flow from operating
activities .......................................................................................................................................................
(64 395) (37 869) (118 105) (82 424) (162 309) (158 054) -55 094
Cash flow from investing activities
Proceeds for sale of plant &
equipment .....................................................................................................................................................
193 - 193 -
Purchase of fixed assets ................................................................................................................................... - - - - (1 393) (1 281) -
Interest received .............................................................................................................................................. 876 2 029 2 307 5 107 10 069 8 504 5 586
Net cash flow from investing
activities .......................................................................................................................................................
1 069 2 029 2 500 5 107 8 676 7 223 5 586
Cash flow from financing
activities
Proceeds from share issue ............................................................................................................................... - - - 163 141 163 141 21 000 154 000
Proceeds from exercise of share options ..........................................................................................................................................................
- 4 195 - 6 365 6 365 541 9 947
Transaction costs on share issue ...................................................................................................................... - - - (6 749) (6 828) (2 017) (6 378)
Proceeds from borrowings ............................................................................................................................... - - - - - - 20 000
Repayment of borrowings ............................................................................................................................... (20 000) - (20 000) -
Interest paid ..................................................................................................................................................... (357) (487) (838) (977) (1 596) (1 919) (1 357)
Net cash flow from financing
activities .......................................................................................................................................................
(20 357) 3 708 (20 838) 161 780 161 082 17 605 176 212
Net change in cash and cash equivalents ....................................................................................................................................................
(83 683) (32 132) (136 443) 84 463 7 449 (133 226) 126 704
Cash and cash equivalents beginning
period ............................................................................................................................................................
169 865 331 895 222 620 215 304 215 304 348 609 223 170
Net foreign exchange difference ...................................................................................................................... 467 (182) 472 (186) 8133) (79) (1 265)
Cash and cash equivalents end
period ...........................................................................................................................................................
86 649 299 581 86 649 299 581 222 620 215 304 348 609
Source: The Company’s Q2 2013 interim financial report and annual reports 2012, 2011 and 2010.
There have been no significant changes in the financial or trading position of the Company since 30 June 2013,
with exception of the transaction described in this Prospectus.
B.8 Pro forma
financial
information
The unaudited pro forma condensed financial information has been prepared to
show how the acquisition of Aqualis Offshore and the Rights Issue might have
affected Aqualis’ financial position as of 30 June 2013 had it occurred on the
balance sheet date. The unaudited pro forma condensed income statement for the
period 1 January 2013 to 30 June 2013 has been compiled as if the Transaction
occurred on 1 January 2013. No pro forma condensed financial information has
AQUALIS ASA
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been prepared for the year ended 2012, as Aqualis Offshore was incorporated in
December 2012. In connection with the acquisition, the Company will carry out a
fully underwritten rights issue of 33.7 million new shares at an issue price of NOK
1.6 per share (the Rights Issue).
The unaudited pro forma condensed financial information has been prepared for
illustrative purposes only. The pro forma adjustments are based on available
information and certain assumptions. Because of its nature, the unaudited pro
forma condensed financial information addresses a hypothetical situation and,
therefore, does not represent what the Group’s actual financial position or results
of operation or the financial position had, if the transaction actually occurred on
those dates. It also does not represent the financial position or results for any
future period. The unaudited pro forma financial information must not be
considered final or complete, as they may be amended in future publications of the
unaudited pro forma condensed information. Investors are cautioned not to place
undue reliance on this unaudited pro forma condensed financial information.
The unaudited pro forma condensed financial information as of and for the six
months ended June 30, 2013 is compiled based upon the unaudited consolidated
financials for the six months ended June 30, 2013 for the Company and Aqualis
Offshore (please see section 9.6 for further details).
Unaudited pro forma income statement for the six months ended 30 June 2013
Aqualis
(unaudited)
Aqualis
Offshore
(unaudited)
Pro forma
adjustments
(unaudited)
Notes to the
pro forma
adjustments
(unaudited)
Pro forma
consolidated
(unaudited)
NOK 1,000 2013
01.01-30.06 2013
01.01-30.06
2013
01.01-30.06
2013
01.01-30.06
Government grants .......................................................................................................................................... 743 - 743
Operating revenue ........................................................................................................................................... 1 813 1 813
Other revenue .................................................................................................................................................. 49 49
Total operating income ................................................................................................................................. 792 1 813 2 605
Payroll and payroll related costs ...................................................................................................................... 26 262 4 450 30 712
Depreciation & impairment ............................................................................................................................. 2 102 24 2 126
Other operating expenses ................................................................................................................................ 56 414 2 688 1 200 (1) 60 302
Operating profit/(loss) ................................................................................................................................... (83 986) (5 349) (1 200) (1) (90 535)
Financial income ............................................................................................................................................. 4 865 5 4 870
Financial expenses........................................................................................................................................... 1 465 72 1 537
Loss before tax ............................................................................................................................................... (80 586) (5 416) (1 200) (87 202)
Income tax expense ......................................................................................................................................... - - -
Non-controlling interest .................................................................................................................................. (110) (110)
Profit/(loss) for the period ............................................................................................................................. (80 586) (5 526) (1 200) (87 312)
Total comprehensive income ........................................................................................................................ (80 586) (5 526) (1 200) (87 312)
Note: The income statement for Aqualis Offshore has been translated from USD to NOK based on a foreign exchange rate
NOK/USD of 5.79, which is based on Norges Bank’s historical average exchange rate for the first six months 2013.
AQUALIS ASA
10
Unaudited pro forma balance sheet as of 30 June 2013
Aqualis
(unaudited)
Aqualis
Offshore
(unaudited)
Pro forma
adjustments
(unaudited)
Notes to the
pro forma
adjustments
(unaudited)
Pro forma
consolidated
(unaudited)
NOK 1,000
30.06.2013
30.06.2013
30.06.2013
30.06.2013
ASSETS
Plant and equipment ........................................................................................................................................ - 705 705
Goodwill ......................................................................................................................................................... - 48 93 725 (2) 93 773
Total non-current assets ............................................................................................................................... - 753 93 725 (2) 94 478
Trade receivables ............................................................................................................................................ 960 2 736 3 696
Other receivables ............................................................................................................................................. 6 059 3 633 9 692
Cash and cash equivalents ............................................................................................................................... 86 649 5 976 50 010 (3) 142 635
Total current assets ....................................................................................................................................... 93 668 12 345 50 010 (3) 156 023
Total assets ..................................................................................................................................................... 93 668 13 098 143 735 250 501
EQUITY AND LIABILITIES
Share capital .................................................................................................................................................... 33 756 603 76 903 (4) 111 262
Share premium ............................................................................................................................................... 107 778 - 43 704 (4) 151 482
Other paid-in capital ........................................................................................................................................ (1 450) - 13 125 (4) 11 675
Loss for the period........................................................................................................................................... (80 586) (5 748) 4 305 (4) (82 029)
Equity attributable to equity holder
of the parent ...............................................................................................................................................
59 498 (5 145) 138 037 192 390
Non-controlling interest .................................................................................................................................. 82 (-82) (5) -
Total equity .................................................................................................................................................... 59,498 (5 063) 137 955 192 390
Deferred revenue ............................................................................................................................................. - - -
Borrowings ...................................................................................................................................................... - 14 129 14 129
Other long-term liabilities ............................................................................................................................... - - -
Total non-current liabilities .......................................................................................................................... - 14 129 - 14 129
Trade payables ................................................................................................................................................ 3 730 959 4 689
Deferred revenue ............................................................................................................................................. - 2 922 2 922
Other current liabilities .................................................................................................................................... 30 440 151 5 780 (6) 36 371
Total current liabilities ................................................................................................................................. 34 170 4 032 5 780 43 982
Total liabilities ................................................................................................................................................ 34 170 18 161 5 780 58 111
Total equity and liabilities ............................................................................................................................ 93 668 13 098 143 735 250 501
Note: The balance sheet for Aqualis Offshore has been translated from USD to NOK based on a foreign exchange rate
NOK/USD of 6.03, which is based on Norges Bank’s historical exchange rate as of 30 June 2013.
B.9 Profit forecast
or estimate
Not applicable
B.10 Qualifications
in the audit
report
Ernst & Young AS has audited the Company’s annual accounts for the financial
years 2012, 2011 and 2010, and the Auditor’s reports for these three years were
issued without qualifications.
B. 11 Working
capital
Not applicable. In the opinion of the Company, its working capital is sufficient to
cover the Group’s present requirements, that is, for a period of at least 12 months
AQUALIS ASA
11
from the date of this Prospectus.
Section C – Securities
Element Description of
Element
Disclosure requirement
C.1 Type and class
of securities
being
offered/security
identification
numbers
The Rights Issue comprises an offering of 33 755 515 offer shares (“Offer
Shares”) at a subscription price of NOK 1.60 (the “Subscription Price”) per Offer
Share, corresponding to gross proceeds of NOK 54 008 824. The Eligible
Shareholders will be granted one Subscription Right for each (1) Share owned by
such Eligible Shareholder on the Record Date.
Eligible Shareholders will be allowed to subscribe for more Offer Shares than the
number of Subscription Rights held by Eligible Shareholders.
In addition, and in connection with the Rights Issue, the Board proposed to the
EGM to conduct an offering of shares directed towards the employees of both the
Company and Aqualis Offshore at the same issue price as in the Rights Issue in
order to facilitate further employee ownership in the Company (the “Employee
Offering”, and together with the Rights Issue, the “Offerings”).
The Employee Offering comprises an offering of up to 5 000 000 employee offer
shares (“Employee Offer shares”, and together with the Offer Shares the
“Offering Shares”) at a subscription price of NOK 1.60, corresponding to gross
proceeds of up to NOK 8 000 000.
The Offering Shares, upon delivery, will be registered with VPS under ISIN NO
001 0308240.
C.2 Currency NOK
C.3 Number of
shares and per
value
The Company’s current share capital is NOK 33,755,515 divided into 33,755,515
ordinary shares, each with a nominal value of NOK 1.00. The Company has one
class of shares, and each share carries one vote. All the shares are validly issued
and fully paid.
C.4 Right attached
to the securities
The rights attached to the Offering Shares will be the same as those attached to
the Company’s existing Shares. The Offering Shares will be issued electronically
and will rank pari passu with existing shares in all respects from such time as the
share capital increases in connection with the issuance of the Offering Shares are
registered in the Norwegian Register of Business Enterprises. The holders of the
Offering Shares will be entitled to dividend from and including the date of
registration of the share capital increase in the Norwegian Registry of Business
Enterprises. There are no particular restrictions or procedures in relation to the
distributions of dividends to shareholders who are resident outside Norway, other
than an obligation on part of the Company to deduct withholding tax as further
described in Section 15.
Pursuant to the Norwegian Public Limited Companies Act, all shares have equal
rights to the Company’s profits, in the event of liquidation and to receive
dividend, unless all the shareholders approve otherwise.
C.5 Restrictions on
free
transferability
A Subscriber will not under any circumstances be entitled to sell or transfer its
Offer Shares until such Subscriber has paid these in full and the share capital
increase in connection with the Rights Issue has been registered in the Norwegian
Register of Business Enterprises. Upon payment of the Offer Shares and
registration of the Offer Shares in the Norwegian Register of Business
Enterprises, the Offer Shares will be freely transferable.
AQUALIS ASA
12
The Employee Offer Shares issued in connection with the Employee Offering are
subject to a lock-up period of 12 months.
C.6 Listing and
admission to
trading
The Company’s Shares are listed on Oslo Stock Exchange.
Assuming that payments from all Subscribers are made when due, delivery of the
Offering Shares is expected to take place on or about 8 November 2013,
however, delivery of the Offering Shares will take place at the latest on 15
November 2013. Assuming that payments from all Subscribers are made when
due, it is expected that the share capital increase will be registered in the
Norwegian Register of Business Enterprises on or about 8 November 2013,
however, such registration will take place at the latest on 15 November 2013.
All of the Offering Shares will be object for an application for admission to
trading on Oslo Børs. Assuming timely payment by all Subscribers, the Company
expects that the Offer Shares will be listed on Oslo Børs on or about 8 November
2013. The Shares will not be sought or admitted to trading on any other regulated
market than Oslo Børs.
C.7 Dividend
policy
The Company has not paid any dividends to date as the Company has been in a
pre-commercial phase with ambitious development plans. Going forward, the
Company plans to grow, both organically and through acquisitions, and potential
profits are to be reinvested in the Company. Hence, it does not expect to make
any dividend payments in the next few years.
Section D – Risks
Element Description
of Element
Disclosure requirement
D.1 Key risks
specific to the
Issuer or its
industry
Key risk factors related to the Company
- If product liability lawsuits are brought against the Company, it could
incur substantial liabilities
Financial risk
- Limited access to funds
- Interest rate risk
- Foreign exchange risk
- Risk related to tax issues
- Loan covenants
- Liquidity risk
Risks relating to Aqualis Offshore
- Dependence on the level of demand from oil & gas and offshore
companies for Aqualis Offshore’s services
- Future economic downturns
- Competitive industry
- Political and regulatory risk
- Risk related to managing Aqualis Offshore’s growth
- Access to key personnel and resources
- Lack of qualified engineers
- Customer concentration
- Cancellation of contracts
- Contracts expiring and contract renewals
- Counterparty risk
- Environmental risk
- Insurance
- Accidents
AQUALIS ASA
13
- Legal claims and disputes
- Limited operating history as a financial entity and unaudited financial
information
- Seasonality
D.3 Key risks
specific to the
securities
An investment in the Offer Shares involves certain risks associated
with the characteristics, specification and type of the securities which
could lead to substantial or total losses the subscriber would have to
bear in the case of selling their Shares. Those risks include and
comprise, inter alia, the following:
- The market price of the Shares has been and may continue to be highly
volatile, and investors may not be able to resell Shares at or above the
Subscription Price
- There is no certainty that the Company’s listing on Oslo Stock Exchange
will be maintained
- Shareholders not participating in future offerings of Shares or other
equity investments may be diluted
- The issue of additional securities by the Company in connection with
future acquisitions, any Share incentive or option plan or otherwise may
dilute all other shareholdings
- Future sales of Shares could reduce the market price of the Shares and
adversely affect the Company's ability to raise additional capital
- The Company does not expect to pay any cash dividends for the
foreseeable future. Investors in the Offering may never obtain a return on
their investment
- The Company has broad discretion in the use of the net proceeds from
the Rights Issue and may not use them effectively
- The limited liquidity in the trading market for the Shares could have a
negative impact on the market price and ability to sell Shares
- The Company's investors outside of Norway are subject to exchange rate
risk
- Holders of Shares that are registered in a nominee account may not be
able to exercise voting rights and other shareholder rights as readily as
shareholders whose Shares are registered in their own names with the
VPS
- The ability of shareholders of the Company to make claims against the
Company in their capacity as such following registration of the share
capital increase in the Register of Business Enterprises is severely limited
under Norwegian law
Section E – Offer
Element Description of
Element
Disclosure requirement
E.1 Net proceeds Transaction costs and all other directly attributable costs in connection with the
Rights Issue and Employee Offering will be borne by the Company and are
estimated to approximately NOK 2.8 million, thus resulting in net proceeds of
approximately NOK 59.2 million.
E.2a Use of
proceeds
The Company intends to use the net proceeds it receives from the Offerings on
working capital and general corporate purposes, which may include acquisitions
that grow the Group's business, although the Company has no current
understandings, commitments or agreements to do so.
The Company cannot predict with certainty all of the particular uses for net
proceeds received by the Company from the Offerings or the amounts that it will
actually spend. The amount, allocation and timing of actual uses of net proceeds
will vary depending on numerous factors, including the relative success and cost
of developing Aqualis Offshore to sustainable business. As a result, management
will have broad discretion in the application of the net proceeds, and investors
AQUALIS ASA
14
will be relying on the Company's judgment regarding the application of the net
proceeds from the Offerings.
E.3 Terms and
conditions of
the offer
The Eligible Shareholders will be granted one Subscription Right for each (1)
Share owned by such Eligible Shareholder on the Record Date. Eligible
Shareholders will be allowed to subscribe for more Offer Shares than the number
of Subscription Rights held by Eligible Shareholders. The number of Subscription
Rights granted to each Eligible Shareholder will be rounded down to the nearest
whole Subscription Right. The Subscription Rights will be transferable and listed
on the Oslo Stock Exchange during the Subscription Period. The Subscription
Rights will be transferred to the Eligible Shareholders’ VPS-accounts on 15
October 2013.
The Subscription Rights must be used to subscribe for Offer Shares before the
expiry of the Subscription Period (i.e. 29 October 2013 at 16:30 hours (CET)).
Subscription Rights that are not exercised before 16:30 hours (CET) on 29
October 2013 will have no value and will lapse without compensation to the
holder.
The Subscription Period in the Rights Issue will commence 09:00 hours (CET) on
15 October 2013 and expire at 16:30 hours (CET) on 29 October 2013. The
Subscription Period may be extended by the Board, but may not in any event be
later than 5 November 2013.
The Subscription Price for one (1) Offer Share is NOK 1.60. The Subscription
Price is identical to the price offered to the shareholders of Aqualis Offshore. The
Subscribers will not incur any costs related to the subscription for, or allotment
of, the Offer Shares.
Subscription for Offer Shares must be made by submitting a correctly completed
subscription form, attached as Appendix D hereto, (the “Subscription Form”) to
the Manager during the Subscription Period. Online subscriptions must be
submitted, and accurately completed Subscription Forms must be received by the
Manager by 16:30 hours (CET) on 29 October 2013.
Subscriptions are binding and irrevocable, and cannot be withdrawn, cancelled or
modified by the subscriber after having been received by the Manager.
There is no minimum subscription amount for which subscriptions in the Rights
Issue must be made. Over-subscription, i.e. subscription for more Offer Shares
than the number of Subscription Rights held by the subscriber entitles the
subscriber to be allocated, and subscription without Subscription Rights will be
allowed.
Allotment of the Offer Shares is expected to take place on or about 1 November
2013.
The following allocation criteria will be used for allotment of Offer Shares in the
Rights Issue:
1. Allocation will be made to subscribers on the basis of granted and
acquired subscription rights which have been validly exercised during
the subscription period. Each subscription right will give the right to
subscribe for and be allocated one (1) new share;
2. If not all subscription rights are validly exercised in the subscription
period, subscribers having exercised their subscription rights and who
have over-subscribed will have the right to be allocated remaining new
shares on a pro rata basis based on the number of subscription rights
exercised by the subscriber. In the event that pro rata allocation is not
possible, the Company will determine the allocation by lot drawing;
AQUALIS ASA
15
3. Any remaining new shares not allocated pursuant to the criteria in items
1 and 2 above, will be allocated to subscribers not holding subscription
rights. Allocation will be sought made pro rata based on the respective
subscription amounts, provided, however, that such allocations may be
rounded down to the nearest thousand NOK.
4. Any remaining new shares not allocated pursuant to the criteria in items
1, 2 and 3 above will be subscribed by and allocated to the underwriters
or investors appointed by the underwriters to the extent the underwriters
have not fulfilled their underwriting obligations by on certain market
terms subscribing for shares in the subscription period, based on and in
accordance with their respective underwriting obligations.
General information regarding the result of the Rights Issue is expected to be
published on or about 30 October in the form of a stock exchange release through
www.newsweb.no.
The Employee Offer Shares may be subscribed for by employees in both the
Company and Aqualis Offshore Ltd (or their respective subsidiaries) and the
minimum subscription per employee subscriber shall be 10,000 shares.
The Employee Offer Shares issued are subject to a lock-up period of 12 months,
as further described in section 6.7 below.
The subscription period will commence 09:00 hours (CET) on 15 October 2013
and expire at 16:30 hours (CET) on 29 October 2013. The subscription period
may be extended by the Board, but may not in any event be later than 5
November 2013. The subscription period may not be closed earlier than 16:30
hours (CET) on 29 October 2013.
The Subscription Price for one (1) Employee Offer Share is NOK 1.60, i.e. the
same subscription price as in the Rights Issue and the Transaction. The
subscribers will not incur any costs related to the subscription for, or allotment of,
the Employee Offer Shares.
Subscription for Employee Offer Shares must be made by submitting a correctly
completed subscription form, attached as Appendix E hereto to the Manager
during the subscription period.
Accurately completed subscription forms must be received by the Manager by
16:30 hours (CET) on 29 October 2013.
Subscriptions are binding and irrevocable, and cannot be withdrawn, cancelled or
modified by the subscriber after having been received by the Manager.
Allocation of the Employee Offer Shares shall be made by the Board of Directors.
E.4 Material
interest in the
offer
The Manager and its affiliates have provided from time to time, and may provide
in the future, investment and commercial banking services to the Company and its
affiliates in the ordinary course of business, for which they may have received
and may continue to receive customary fees and commissions. The Manager does
not intend to disclose the extent of any such investments or transactions otherwise
than in accordance with any legal or regulatory obligation to do so. The Manager,
its employees and any affiliate may currently own existing Shares in the
Company, and employees of the Manager may obtain allotment in the Rights
Issue.
Furthermore, the Manager will receive a commission in connection with the
Rights Issue and, as such, has an interest in the Rights Issue. Reference is made to
section 6.13 “Expenses related to the Offerings”.
E.5 Manager/Lock- Carnegie AS has been retained as manager for the Company in connection with
AQUALIS ASA
16
up the Rights Issue.
For a period of two years following the closing date (the "Lock-Up Period"), each
of the Sellers agrees not to transfer or place any encumbrances on any of the New
Shares that it has received pursuant to the SPA unless consented to in writing in
advance by the Company. Such consent can be withheld for any reason, at the
Company’s discretion.
Following the expiry of the Lock-Up Period, the Sellers may dispose of their New
Shares without restrictions (other than what otherwise follows from applicable
laws), save for the Restricted New Shares, which shall be subject to lock-up
restrictions for a period of three years following the closing date (the "Extended
Lock-Up Period").
At the expiry of the Extended Lock-Up Period, the Lock-Up Restrictions on ¼ of
each Management Shareholders' Restricted New Shares shall be released, with an
additional ¼ of their Restricted New Shares being released with the expiry of
each subsequent one-year period.
Further, a Subscriber will not under any circumstances be entitled to sell or
transfer its Offer Shares until such Subscriber has paid these in full and the share
capital increase in connection with the Rights Issue has been registered in the
Norwegian Register of Business Enterprises.
Upon payment of the Offer Shares and registration of the Offer Shares in the
Norwegian Register of Business Enterprises, the Offer Shares will be freely
transferable.
The Employee Offer Shares issued in connection with the Employee Offering are
subject to a lock-up period of 12 months.
E.6 Dilution The Rights Issue will result in an immediate dilution of approximately 50 per cent
for Eligible Shareholders who do not participate in the Rights Issue. Based on the
total number of Shares in the Company following the Transaction and the
Offerings, the dilutive effect for Eligible Shareholders who do not participate in
the Rights Issue will be approximately 71 per cent.
E.7 Estimated
expenses
Transaction costs and all other directly attributable costs in connection with the
Rights Issue and Employee Offering will be borne by the Company and are
estimated to approximately NOK 2.8 million.
AQUALIS ASA
17
2. RISK FACTORS
An investment in the Offer Shares involves a number of risks. Potential investors should carefully consider each
of the following risks and all of the information set forth in this Prospectus before deciding to invest in the Offer
Shares. If any of the following risks and uncertainties actually occurs, the Company's cash flows, business,
results of operations and financial position could be adversely affected. In that case, the trading price of the
Shares could decline and potential investors could lose all or part of their investments. The order in which the
risks are presented does not necessarily reflect the likelihood of their occurrence or the magnitude of their
potential impact on the Company's cash flows, business, results of operations and financial position.
2.1 RISK FACTORS RELATED TO THE COMPANY
2.1.1 If product liability lawsuits are brought against the Company, it could incur substantial
liabilities.
The Company faces an inherent risk of product liability as a result of past clinical testing of its former product
candidates. Any such product liability claims may include allegations of defects in manufacturing, defects in
design, failure to warn of dangers inherent in the product, negligence, strict liability, and a breach of warranties.
If the Company cannot successfully defend itself against product liability claims, the Company may incur
substantial liabilities. Even successful defence would require significant financial and management resources.
Regardless of the merits or eventual outcome, liability claims may result in:
- injury to the Company’s reputation;
- initiation of investigations by regulators;
- costs to defend the related litigation;
- a diversion of management’s time and the Company’s resources;
- substantial monetary awards to trial participants or patients;
To mitigate this risk, the Company carries product liability insurance which it considers adequate for its past
clinical development activities. Although the Company maintains such insurance, any claim that may be brought
against the Company could result in a court judgment or settlement in an amount that is not covered, in whole or
in part, by the Company’s insurance or that is in excess of the limits of the Company’s insurance coverage. The
Company’s insurance policies also have various exclusions, and the Company may be subject to a product
liability claim for which the Company has no coverage. The Company will have to pay any amounts awarded by
a court or negotiated in a settlement that exceed the Company’s coverage limitations or that are not covered by
the Company’s insurance, and the Company may not have, or be able to obtain, sufficient capital to pay such
amounts.
2.2 RISK FACTORS RELATED TO THE RIGHTS ISSUE AND OWNERSHIP OF THE SHARES
2.2.1 The market price of the Shares has been and may continue to be highly volatile, and investors
may not be able to resell Shares at or above the Subscription Price
The market price of the Shares could fluctuate significantly in response to a number of factors, including the
following:
- actual or anticipated variations in operating results
- changes in financial estimates or recommendations by stock market analysts regarding the Company
- announcements by the Company of significant acquisitions, partnerships, joint ventures or capital
commitments
- sales or purchases of substantial blocks of Shares
- additions or departures of key personnel
- future equity or debt offerings by the Company and its announcements of these offerings
- general market and economic conditions
Moreover, in recent years, the stock market in general has experienced large price and volume fluctuations and
these broad market fluctuations may adversely affect the share price, regardless of its operating results.
2.2.2 There is no certainty that the Company’s listing on Oslo Stock Exchange will be maintained
The Company wishes to maintain the listing of its Shares on Oslo Børs following the Transaction as the
Company believes it satisfies all the major listing requirements and that this is in the best interest of all the
AQUALIS ASA
18
shareholders of the Company. However, no assurance can be given that Oslo Børs will draw the same
conclusion and that the listing will be maintained.
2.2.3 Shareholders not participating in future offerings of Shares or other equity investments may be
diluted
Shareholders not participating in future offerings of Shares or other equity instruments may be diluted. Unless
otherwise resolved or authorised by the general meeting of the Company, shareholders in Norwegian public
companies such as the Company have pre-emptive rights proportionate to the aggregate amount of the Shares
they hold with respect to new Shares and other equity investments issued by the Company. However,
shareholders that do not exercise such pre-emptive right may experience dilution of their shareholding.
2.2.4 The issue of additional securities by the Company in connection with future acquisitions, any
Share incentive or option plan or otherwise may dilute all other shareholdings
The Company may seek to issue additional equity or convertible equity securities to fund future acquisitions and
other growth opportunities or in connection with share incentives and option plans. Exercising options may also
cause a dilution of existing shareholders. To the extent that the Company issues additional securities, the
existing shareholders' ownership interest in the Company at that time may be diluted.
2.2.5 Future sales of Shares could reduce the market price of the Shares and adversely affect the
Company's ability to raise additional capital
Sales of substantial amounts of the Shares, or the perception that such sales could occur, could have an adverse
effect on the market value of the Shares and the Company's ability to raise capital through future capital
increases.
2.2.6 The Company does not expect to pay any cash dividends for the foreseeable future. Investors in
the Rights Issue may never obtain a return on their investment
The Company has never paid dividends to its shareholders and does not intend to pay any dividends for the
foreseeable future. Anyone considering investing in the Offer Shares should not rely on such investment to
provide dividend income. Instead, the Company plans to retain any earnings to maintain and expand its existing
operations. In addition, any future debt financing arrangement may contain terms prohibiting or limiting the
amount of dividends that may be declared or paid on the Shares. Accordingly, investors must rely on sales of
their Shares after price appreciation, which may never occur, as the only way to obtain return on their
investment.
2.2.7 The Company has broad discretion in the use of the net proceeds from the Rights Issue and may
not use them effectively
While the Company intends to use the net proceeds from the Rights Issue as described in section 6.1 "Purpose
and use of proceeds", the amount, allocation and timing of actual uses of net proceeds will vary based on a
number of factors. As a result, management will have broad discretion in the application of the net proceeds
from the Rights Issue and could spend the proceeds in ways that do not improve the Company's results of
operations or enhance the value of the Shares. The failure by management to apply these funds effectively could
result in financial losses that could have a material adverse effect on the Company's business and cause the price
of the Shares to decline. Pending their use, the Company may invest the net proceeds from the Rights Issue in a
manner that does not produce income or that loses value.
2.2.8 The limited liquidity in the trading market for the Shares could have a negative impact on the
market price and ability to sell Shares
The Company’s Shares are currently listed on Oslo Stock Exchange. This, however, does not imply that there
will always be a liquid market for the Company’s Shares, which have also historically had a relatively low
liquidity. An investment in the Shares may thus be difficult to realise. Investors should be aware that the value
of the Shares may be volatile and may go down as well as up. In the case of low liquidity of the Shares, or
limited liquidity among the Company’s shareholders, the share price can be negatively affected and may not
reflect the underlying asset value of the Company. Investors may, on disposing of the Shares, realise less than
their original investment or lose their entire investment.
AQUALIS ASA
19
2.2.9 The Company's investors outside of Norway are subject to exchange rate risk
The Shares are traded in NOK and any investor outside of Norway who wishes to invest in the Offer Shares, or
to sell Shares, will be subject to an exchange rate risk which may cause additional costs to the investor.
2.2.10 Holders of Shares that are registered in a nominee account may not be able to exercise voting
rights and other shareholder rights as readily as shareholders whose Shares are registered in their own
names with the VPS
Beneficial owners of Shares that are registered in a nominee account (e.g., through brokers, dealers or other
third parties) may not be able to vote such Shares unless their ownership is re-registered in their names with the
VPS prior to the Company's general meetings. The Company cannot guarantee that such beneficial owners of
Shares will receive the notice for a general meeting in time to instruct their nominees to either effect a re-
registration of their Shares or otherwise vote their Shares in the manner desired by such beneficial owners.
Further, beneficial owners of Shares that are registered in a nominee account may not be able to exercise other
shareholder rights under the Norwegian Public Limited Companies Act (such as e.g. the entitlement to
participate in a rights offering) as readily as shareholders whose Shares are registered in their own names with
the VPS.
2.2.11 The ability of shareholders of the Company to make claims against the Company in their capacity
as such following registration of the share capital increase in the Register of Business Enterprises is
severely limited under Norwegian law
Once the capital increase relating to any Shares (including the Offer Shares) has been registered in the Register
of Business Enterprises, purchasers of those Shares have limited rights against the Company under Norwegian
law. All Subscribers in the Rights Issue will be deemed to have acknowledged that the ability of shareholders of
the Company to make claims against the Company in their capacity as such following registration of the share
capital increase in the Register of Business Enterprises is severely limited under Norwegian law.
2.3 FINANCIAL RISK
2.3.1 Limited access to funds
The Company may be dependent on obtaining future financing and/or new equity to enable the contemplated
future growth of the Group. No assurance can be given that it will be able to obtain future financing as well as to
refinance its existing loans on acceptable terms and conditions, nor that it will be able to raise new equity
capital.
2.3.2 Interest rate risk
Increasing interest rates may affect the Group’s business, financial condition, results of operation and liquidity.
2.3.3 Foreign exchange risk
The functional currency of the Group is NOK, while the functional currency of Aqualis Offshore is USD, which
may give rise to foreign currency translation gains or losses. Aqualis Offshore has secured income under
contracts in currencies other than USD, such as NOK, GBP and EUR. This income, relative to USD, will be
affected by changes in currency exchange rates or exchange control regulations when Aqualis Offshore does not
hedge an exposure to these currencies. It may also incur losses as a result of an inability to collect revenues
because of a shortage of convertible currency available to the country of operation, controls over currency
exchange or controls over the repatriation of income or capital. Currency exchange rates are determined by
forces of supply and demand on the currency exchange markets, which again are affected by the international
balance of payments, economic and financial conditions, government intervention, speculation and other factors.
If Aqualis Offshore is not able or fails to take actions to limit its exposure to local currencies, changes in
currency exchange rates relative to the USD will affect the USD value of Aqualis Offshore’s assets and thereby
impact upon its total return on such assets.
2.3.4 Risk related to tax issues
As at 31 December 2012, the Company had a total tax loss carry forward of NOK 752.8 million, which can be
carried forward indefinitely. The Company has not recognized a tax asset on the balance sheet due to the
uncertainty of future taxable profits. Even if the Company should generate future taxable profits through the
acquisition of Aqualis Offshore, or other businesses, the usability of its tax loss carried forward to reduce the
AQUALIS ASA
20
amount of tax payable in the future is highly uncertain. The tax loss carried forward can most likely be used to
reduce the amount of tax payable related to the healthcare business only.
2.3.5 Loan covenants
Failure to comply with financial covenants and other covenants and obligations in the Group’s facilities with
banks or in other financing agreements may result in an event of default under the facility, which could result in
the Group having to repay all amounts outstanding under its facilities. These covenants could materially and
adversely affect the Group’s ability to finance its further operations, its ability to expand, to pursue its business
strategies and otherwise conduct its business.
2.3.6 Liquidity risk
The operation of the Group’s business requires significant capital, and there can be no assurance that it will be
able to obtain the necessary liquidity to meet its financial liabilities as they fall due. The Group’s future liquidity
needs depend on a number of factors, and is subject to uncertainty with respect to inter alia future earnings,
outcome of legal claims and disputes etc. A limited liquidity position may have an adverse effect on the Group’s
business, financial condition, results of operation and liquidity, and as a worst case, force the Company to cease
its operations.
The following risk factors relate to the operations of Aqualis Offshore. These risk factors should also be taken
into account when considering an investment in the Offer Shares as the business of Aqualis Offshore will
constitute a significant part of the Company following the Transaction. For more information regarding the
Transaction, please see section 5 in this Prospectus.
2.4 RISKS RELATING TO AQUALIS OFFSHORE
2.4.1 Dependence on the level of demand from oil and gas and offshore companies for Aqualis
Offshore’s services
Aqualis Offshore’s business and operations will over time depend on the level of activity and capital spending
by oil & gas and offshore companies. The demand for Aqualis Offshore’s services is affected by declines in
maritime and offshore activity associated with depressed oil and natural gas prices. The demand for offshore
exploration, development and production has been closely linked to the price of oil and gas. Even the perceived
risk of a decline in the oil or natural gas prices often causes exploration and production companies to reduce
their spending. Historically, oil and natural gas prices have been very volatile depending on the actual and
expected changes in the supply of, and demand for, oil and gas, changes in economic growth and political
uncertainty in oil producing countries. There is a risk associated with a possible long-term drop in the oil price,
affecting the profitability of the development of new offshore fields. Any prolonged periods of reduced capital
expenditures by oil and gas and offshore companies would likely reduce the demand for the services offered by
Aqualis Offshore. Furthermore, Aqualis Offshore is also heavily involved in day to day offshore operations
which provide recurring day to day income. Generally, as overall conditions in the oil and gas and offshore
industries deteriorate, demand for the services offered by Aqualis Offshore may decrease.
2.4.2 Future economic downturns
The offshore oil and gas industries are exposed to the general global economic activity. A worldwide economic
downturn could reduce the availability of credit to fund offshore business operations globally. This could again
lower the demand for Aqualis Offshore’s services and lead to an austerity approach from the oil and gas and
offshore companies. Furthermore, a sustained or deep recession could further limit economic activity and thus
result in an additional decrease in energy consumption, which in turn could cause Aqualis Offshore’s revenues
and margins to decline and limit its future growth prospects.
2.4.3 Competitive industry
The global offshore consultancy market is highly competitive which may limit Aqualis Offshore’s ability to
maintain or increase its market share. Its current and future competitors may have greater financial and other
resources and may be better positioned to withstand and adjust to changing market conditions. Hence, Aqualis
Offshore may not be able to maintain its competitive position in the market. Additionally, Aqualis Offshore also
competes with several smaller companies capable of performing effectively on a regional or local basis. These
competitors may be able to better withstand economic and/or industry downturns and compete on the basis of
AQUALIS ASA
21
price, all of which could affect Aqualis Offshore’s position in the market which, in turn, could lead to reduction
in revenues and profit margins.
2.4.4 Political and regulatory risk
Changes in the political, legislative, fiscal and/or regulatory framework governing the activities of Aqualis
Offshore, the oil and gas companies, oil service companies, offshore companies, construction yards and/or
important suppliers or service providers on which Aqualis Offshore depend, could have a material impact on its
business, the markets in which it operates, and its financial condition.
2.4.5 Risk related to managing Aqualis Offshore’s growth
As Aqualis Offshore executes on its strategy, it expects that there will be a need for additional managerial,
operational, marketing, financial and other resources. As a result, members of management would face added
responsibilities, including:
- Identifying, recruiting, maintaining, motivating and integrating additional skilled personnel;
- Managing Aqualis Offshore's internal development efforts effectively while complying with its
contractual obligations to customers, suppliers, partners, and other third parties; and
- Improving Aqualis Offshore's managerial, development, operational and finance systems.
Aqualis Offshore’s results of operations, financial condition and business as a whole will depend, in part, on its
ability to manage its future growth effectively. Hence, it must manage its growth efforts and hire, train and
integrate additional management, administrative and marketing personnel as required. However, no assurance
can be given that Aqualis Offshore will successfully identify and retain these personnel. If Aqualis Offshore is
unable to accomplish these tasks, it could be prevented from successfully obtaining its growth. The scalability of
Aqualis Offshore’s business will be an important factor going forward.
2.4.6 Access to key personnel and resources
Aqualis Offshore’s business and prospects depend to a significant extent on the continued services of its key
personnel in its various business areas. Hence, Aqualis Offshore is dependent on its ability to retain key
personnel to ensure successful integration of new personnel into existing operations. The loss of any of the
members of its senior management or other key personnel or the inability to attract or retain a sufficient number
of qualified employees could adversely affect its business and results of operations.
2.4.7 Lack of qualified engineers
The current market for attracting highly qualified engineers is challenging and the challenging market affects
Aqualis Offshore as it is dependent on the highly skilled employees. Due to the lack of skilled and qualified
engineers, Aqualis Offshore may not be able to identify and attract, nor retain, qualified engineers in the future.
This could adversely affect its business and results of operations.
2.4.8 Customer concentration
Aqualis Offshore is, to some extent, dependent upon a few large customers within the marine and offshore oil
and gas industries. Even if these companies are large and financially solid, there is no guarantee that the
financial solidity will continue in the future. Aqualis Offshore’s financial condition and results of operations
could be materially damaged if these customers interrupt or curtail their activities terminate their contracts with
Aqualis Offshore; fail to renew existing contracts or refuse to award new contracts to Aqualis Offshore while, at
the same time, Aqualis Offshore is not able to enter into new contracts with new customers at comparable terms.
2.4.9 Cancellation of contracts
The cancellation (due to late delivery, non-performance or otherwise) or postponement of one or more contracts
can have a material adverse impact on the earnings of Aqualis Offshore.
2.4.10 Contracts expiring and contract renewals
There can be no assurance that Aqualis Offshore will be able to renew its existing contracts of employment or
that any such future agreements will be on terms equally favourable to Aqualis Offshore as is currently the case.
During depressed market conditions, a customer may no longer need services that are currently under contract or
may be able to obtain comparable service at a lower rate. As a result, customers may seek to renegotiate the
AQUALIS ASA
22
terms of their existing contracts or avoid their obligations under those contracts. Hence, Aqualis Offshore’s
inability to compete successfully may reduce its profitability.
2.4.11 Counterparty risk
If Aqualis Offshore’s contracting counterparties are unable or unwilling to honour their contractual obligations,
Aqualis Offshore may have to seek alternative employment for its personnel. There is no guarantee that it will
be able to obtain the same rates from another party.
2.4.12 Environmental risk
Environmental and energy matters have been the focus of increased scientific and political scrutiny and are
subject to various legal requirements. Legal requirements concerning these issues could potentially reduce
demand for oil and natural gas which, again, could affect the demand for Aqualis Offshore’s services.
Furthermore, the activities of Aqualis Offshore are subject to environmental rules and regulations pursuant to
international conventions and national legislation in relevant jurisdictions. Failure to comply with environmental
rules and regulations may cause damage to the external environment, suspend operations and may result in
fines, penalties and/or claims by authorities and customers. To the extent Aqualis Offshore is held liable for
such breach of environmental rules and regulations, it may have an adverse effect on its operations and financial
conditions.
2.4.13 Insurance
Aqualis Offshore’s business is subject to a number of risks, including human error or misjudgements. There is
no assurance that insurance or indemnifications agreements will adequately protect Aqualis Offshore against
liability from all the consequences of such events. The occurrence of an event for which Aqualis Offshore is not
fully insured or indemnified against, could result in substantial losses. In addition, Aqualis Offshore may not be
able to procure adequate insurance coverage at commercially reasonable rates in the future and any particular
insurance claim may not be reimbursed.
2.4.14 Accidents
An accident involving one or more of Aqualis Offshore’s personnel, and most importantly its consequence and
indirect effect, could adversely affect its business, financial condition, results of operation and liquidity.
2.4.15 Legal claims and disputes
The numerous hazards inherent in Aqualis Offshore’s business increase its exposure to additional claims and
disputes in the ordinary course of business which could materially adversely affect its business, financial
condition, results of operation and liquidity.
2.4.16 Limited operating history as a financial entity and unaudited financial information
Aqualis Offshore has a limited operating history as a financial entity. Hence, this Prospectus contains limited
financial information for Aqualis Offshore since its inception.
2.4.17 Seasonality
Aqualis Offshore’s business is seasonal in certain parts of the world. Many of its customers reduce demand for
Aqualis Offshore’s services during the winter months, hurricane seasons or monsoon periods due to the
possibility of adverse weather conditions. As a result, Aqualis Offshore’s revenues and profitability typically are
lower during these times. Consequently, the existence of any condition that adversely affects Aqualis Offshore’s
operations would have a negative effect on its results of operations for the full year.
AQUALIS ASA
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3. STATEMENT OF RESPONSIBILITY
The Board of Directors of Aqualis accepts responsibility for the information contained in this Prospectus and
hereby declares that, having taken all reasonable care to ensure that such is the case, the information contained
in this Prospectus is, to the best of their knowledge, in accordance with the facts and contains no omissions
likely to affect its import.
Oslo, 11 October 2013
The Board of Directors of Aqualis ASA
Martin Nes
Chairman
Øystein Stray Spetalen
Board member
Yvonne Litsheim Sandvold
Board member
Synne Syrrist
Board member
AQUALIS ASA
24
4. CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This Prospectus includes “forward-looking” statements, including, without limitation, projections and
expectations regarding the Company’s future financial position, business strategy, plans and objectives. All
forward-looking statements included in the Prospectus are based on information available to the Company, and
views and assessments of the Company, as of the date of this Prospectus. Except as required by the applicable
stock exchange rules or applicable law, the Company does not intend, and expressly disclaims any obligation or
undertaking, to publicly update, correct or revise any of the information included in this Prospectus, including
forward-looking information and statements, whether to reflect changes in the Company's expectations with
regard thereto or as a result of new information, future events, changes in conditions or circumstances or
otherwise on which any statement in this Prospectus is based.
When used in this document, the words “anticipate”, “believe”, “estimate”, “expect”, “seek to”, "will", "may",
"intends", "assumes" or other words of similar meaning and similar expressions or the negatives thereof, as they
relate to the Company, its subsidiaries or its management, are intended to identify forward-looking statements.
The Company can give no assurance as to the correctness of such forward-looking statements and investors are
cautioned that any forward-looking statements are not guarantees of future performance. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors, which may cause the actual
results, performance or achievements of the Company and its subsidiaries, or, as the case may be, the industry,
to materially differ from any future results, performance or achievements expressed or implied by such forward-
looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group’s
present and future business strategies and the environment in which the Company and its subsidiaries operate.
Given the aforementioned uncertainties, prospective investors are cautioned not to place undue reliance on any
of these forward-looking statements.
AQUALIS ASA
25
5. THE TRANSACTION
5.1 BACKGROUND AND OVERVIEW
On 4 September 2013, the Company announced that following an evaluation of various strategic options after
the negative outcome of the CLAVELA Phase III trial, it has decided to diversify its business activities by
creating a new business unit, to cover the specialist marine and engineering consultancy market, through an
proposed acquisition of Aqualis Offshore Ltd. (“Aqualis Offshore”) (the “Transaction”).
On 27 September 2013, Aqualis signed a final share purchase agreement (“SPA”) to acquire 100% of the shares
in Aqualis Offshore for a consideration of NOK 70 million on an equity basis with settlement in Aqualis shares
(“New Shares”) valued at NOK 1.60 per share. As of 30 June 2013, Aqualis Offshore had a net debt position of
USD 1.35 million. The issue of New Shares was approved by the extraordinary general meeting of the Company
(“EGM”) on 8 October 2013.
The New Shares to be issued to the shareholders of Aqualis Offshore in connection with the Transaction will be
subject to an extensive lock-up period. 35 million New Shares have a lock-up period of two years, while the
remaining 8.75 million New Shares, held by the management and employees of Aqualis Offshore, have a lock-
up period of 3 - 6 years. For further information, see section 5.6 below.
The Transaction represents a change in strategic direction for the Company to include a new business area of
specialist marine and engineering consultancy services to the offshore oil and gas industry. The existing
healthcare activities will remain as a separate business area within the Company.
Additionally, in order to secure growth capital for the new business area, while facilitating equal treatment of all
shareholders, the EGM held 8 October 2013 resolved to carry out a new share issue of NOK 54 million with
pre-emptive rights for shareholders of Aqualis (the "Rights Issue"). The subscription price in the Rights Issue
will be NOK 1.60 per share. The Rights Issue is fully underwritten by large shareholders of the Company and
Aqualis Offshore.
The existing shareholders of Aqualis Offshore are Ferncliff and associated companies (51%), and employees of
the company (49%). Ferncliff is owned by Øystein Stray Spetalen, a Board member of the Company, and the
CEO of Ferncliff, Martin Nes, the Chairman of the Board of Directors of the Company.
5.2 EXCHANGE RATIO AND NEW SHARES
Aqualis will issue 43 750 000 New Shares to the Aqualis Offshore shareholders (the “Sellers”) as consideration
for the Transaction. Upon closing of the Transaction, the Aqualis Offshore shareholders will have an ownership
in Aqualis of 56 per cent. The exchange ratio between Aqualis and Aqualis Offshore of 44:56 (the “Exchange
Ratio”) of the combined company is based on the relative value of Aqualis’ and Aqualis Offshore’s respective
businesses which has been agreed between the parties. When determining the value of Aqualis Offshore, the
Company has, together with its Manager, carried out a valuation of Aqualis Offshore of where several valuation
techniques were used, among them a comparison of expected earnings multiples versus similar companies and a
discounted cash flow analysis.
Following the Transaction and the Rights Issue, and assuming that the shareholders of the Company will
subscribe according to their pro rata share in the Rights Issue, the existing shareholders of Aqualis will hold
approximately 61% of the Shares in the Company, not including Ferncliff's and associated companies' New
Shares received in connection with the Transaction.
5.3 CONDITIONS FOR COMPLETION OF THE TRANSACTION
The Transaction was subject to satisfactory due diligence and the signing of a definite share purchase
agreement, as well as shareholder approval at the EGM in Aqualis held 8 October 2013. As of the date of this
Prospectus, these conditions are satisfied.
5.4 THE EXTRAORDINARY GENERAL MEETING
At the EGM held 8 October 2013 the following resolution regarding the issuance of the New Shares to the
shareholders of Aqualis Offshore was proposed and approved.
AQUALIS ASA
26
1. “The Company's share capital shall be increased with NOK 43,750,000 by issuance of 43,750,000 new
shares of nominal value NOK 1 each.
2. The new shares shall be subscribed by the persons and companies listed in the attachment to the notice
of the general meeting, with the number of shares per subscriber stated therein.
3. The subscription price in the share issue shall be NOK 1.60 per share. The subscription amount shall
be settled by the Company acquiring all 100,000 shares in Aqualis Offshore Ltd from the subscribers
(equal to 100% of the share capital of Aqualis Offshore Ltd), meaning that the subscribers will receive
approximately 437 shares in the Company for each share held in Aqualis Offshore Ltd.
4. Subscription for the new shares shall take place on a separate subscription form no later than 10
October 2013.
5. The share contribution shall be settled simultaneously with subscription for the new shares, re clause 7
of item 4 of the agenda.
6. The existing shareholders' preferential right to subscribe for new shares is set aside; cf. the Norwegian
Public Limited Liability Companies Act section 10-5.
7. The new shares will give full shareholder rights in the Company, including the right to dividends, from
the time the share capital increase is registered with the Norwegian Register of Business Enterprises.
8. Section 4 of the Company's Articles of Association shall be amended to reflect the new share capital
and number of shares following the share capital increase.”
5.5 ISSUE OF THE NEW SHARES
The Sellers shall, subject to the terms and conditions in the SPA, on the closing date, subscribe for the New
Shares, which shall be settled as contribution in kind (No. tingsinnskudd). An expert report relating to the in
kind contribution has been prepared; cf. Sections 10-17 and 10-2 cf. Section 2-6 of the Norwegian Public
Limited Liability Companies Act, which is attached as Appendix G hereto.
It is expected that the share capital increase pertaining to the New Shares will be registered in the Norwegian
Register of Business Enterprises at the same time as the Offering Shares in connection with the Rights Issue and
Employee Offering, which is on or about 8 November 2013. The New Shares are expected to be issued to the
Sellers on or about 8 November 2013.
5.6 LOCK-UP AGREEMENTS
For a period of two years following the closing date (the "Lock-Up Period"), each of the Sellers agrees not to
transfer or place any encumbrances on any of the New Shares that it has received pursuant to the SPA unless
consented to in writing in advance by the Company. Such consent can be withheld for any reason, at the
Company’s discretion.
Following the expiry of the Lock-Up Period, the Sellers may dispose of their New Shares without restrictions
(other than what otherwise follows from applicable laws), except for the New Shares held by the management of
Aqualis Offshore (“Management Shareholders”), which shall be subject to lock-up restrictions for a period of
three years following the closing date (the "Extended Lock-Up Period").
At the expiry of the Extended Lock-Up Period, the Lock-Up Restrictions on ¼ of each Management
Shareholders' New Shares shall be released, with an additional ¼ of their New Shares being released with the
expiry of each subsequent one-year period.
5.7 SHAREHOLDERS’ RIGHTS RELATING TO THE NEW SHARES
The rights attached to the New Shares will be the same as those attached to the Company’s existing Shares. The
New Shares will be issued electronically and will rank pari passu with existing Shares in all respects from such
time as the share capital increases in connection with the issuance of the New Shares are registered in the
Norwegian Register of Business Enterprises. The holders of the New Shares will be entitled to dividend from
and including the date of registration of the share capital increase in the Norwegian Registry of Business
AQUALIS ASA
27
Enterprises. The New Shares shall be listed on the Oslo Stock Exchange prior to being delivered (or upon
delivery) to the Sellers.
Pursuant to the Norwegian Public Limited Companies Act, all shares have equal rights to the Company’s
profits, in the event of liquidation and to receive dividend, unless all the shareholders approve otherwise. Please
see section 13 on more details regarding shareholding in a Norwegian Public Limited Company.
5.8 ADVISORS
Carnegie AS has acted as financial advisor to Aqualis in connection with the Transaction. The Company’s legal
counsel is Advokatfirmaet Schjødt AS.
5.9 EXPENSES RELATED TO THE TRANSACTION
Transaction costs and all other directly attributable costs in connection with the Transaction will be borne by the
Company and are estimated to approximately NOK 1.2 million.
5.10 DILUTION
The immediate dilutive effect of the Transaction for the Company’s shareholders will be approximately 56 per
cent.
Prior to the Transaction Subsequent to the Transaction
Ordinary shares ............................................................................................................................................... 33,755,515 77,505,515 Number of existing shares in % of new number of shares ............................................................................... 43.55%
AQUALIS ASA
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6. THE RIGHTS ISSUE AND THE EMPLOYEE OFFERING
6.1 PURPOSE AND USE OF PROCEEDS
In order to secure growth capital for the new business area resulting from the acquisition of Aqualis Offshore
while facilitating equal treatment of all shareholders, the Board proposed to the EGM to carry out a new share
issue of NOK 54 008 824 million with pre-emptive rights for shareholders of Aqualis (the “Rights Issue”). The
subscription price in the Rights Issue, which is fully underwritten by large existing shareholders of the Company
and Aqualis Offshore, has been set at NOK 1.60 per share. Transferable subscription rights will be issued and
listed on the Oslo Stock Exchange.
In addition, and in connection with the Rights Issue, the Board proposed to the EGM to conduct an offering of
shares directed towards the employees of both the Company and Aqualis Offshore at the same subscription price
as in the Rights Issue in order to facilitate further employee ownership in the Company (the “Employee
Offering”, and together with the Rights Issue, the “Offerings”).
The Company intends to use the net proceeds from the Offerings on general corporate purposes, which may
include acquisitions to grow the Group's business, although the Company has no current understandings,
commitments or agreements to do so.
The Company cannot predict with certainty all of the particular uses for the net proceeds from the Offerings or
the amounts that it will actually spend. The amount, allocation and timing of actual uses of net proceeds will
vary depending on numerous factors, including the relative success and cost of developing Aqualis Offshore to a
sustainable business. As a result, management will have broad discretion in the application of the net proceeds,
and investors will be relying on the Company's judgment regarding the application of the net proceeds from the
Offerings.
6.2 OVERVIEW
The Rights Issue comprises an offering of 33 755 515 offer shares (“Offer Shares”) at a subscription price of
NOK 1.60 (the “Subscription Price”) per Offer Share, corresponding to gross proceeds of NOK 54 008 824.
The Rights Issue will be directed towards the Company’s shareholders as of close of the Oslo Stock Exchange
on 8 October 2013, as registered in the Norwegian Central Security Depository (VPS) on 11 October 2013 (the
“Record Date”) who are not resident in a jurisdiction where such offering would be unlawful, or for jurisdictions
other than Norway, would require any filing, registration or similar action (the “Eligible Shareholders”).
The Rights Issue is fully underwritten by certain large shareholders in the Company and Aqualis Offshore.
The Employee Offering comprises an offering of up to 5 000 000 employee offer shares (“Employee Offer
Shares”, and together with the Offer Shares the “Offering Shares”) at a subscription price of NOK 1.60,
corresponding to gross proceeds of up to NOK 8 000 000.
6.2.1 Resolution regarding the Offerings
At the EGM held 8 October 2013 the following resolution regarding the fully underwritten Rights Issue was
proposed and approved.
1. “The Company's share capital is increased with NOK 33,755,515 by issuance of 33,755,515 new shares of
nominal value NOK 1 each.
2. Shareholders in the Company as per the end of 8 October 2013 (as registered in the Norwegian Central
Securities Depository (VPS) 11 October 2013) shall have preferential rights to subscribe for the new shares
pro rata to their existing holding of shares in the Company as per the end of 8 October 2013 (as registered
in VPS 11 October 2013). Subscription rights will not be awarded based on the shares subscribed for in the
share capital increase against contribution in kind resolved by the general meeting on the same date as the
rights issue. The subscription rights shall be tradable and listed on Oslo Børs. Over-subscription and
subscription without subscription rights is permitted.
3. The Company shall issue a prospectus approved by the Norwegian prospectus authority in connection with
the rights issue. Unless the Company's board of directors decides otherwise, the prospectus shall not be
registered with or approved by any foreign authorities. The new shares cannot be subscribed for by
investors in jurisdictions in which it is not permitted to offer new shares to the investors in question without
AQUALIS ASA
29
the registration or approval of a prospectus (unless such registration or approval has taken place pursuant
to a resolution by the board of directors). With respect to any shareholder that in the Company's view is not
entitled to subscribe for new shares due to limitations imposed by laws or regulations of the jurisdiction
where such shareholder is a resident or citizen, the Company (or someone appointed or instructed by it)
may sell such shareholder's subscription rights against transfer of the net proceeds from such sale to the
shareholder.
4. Allocation of new shares shall be made by the board of directors. The following allocation criteria shall
apply:
4.1. Allocation will be made to subscribers on the basis of granted and acquired subscription rights which
have been validly exercised during the subscription period. Each subscription right will give the right
to subscribe for and be allocated one (1) new share.
4.2. If not all subscription rights are validly exercised in the subscription period, subscribers having
exercised their subscription rights and who have over-subscribed will have the right to be allocated
remaining new shares on a pro rata basis based on the number of subscription rights exercised by the
subscriber. In the event that pro rata allocation is not possible, the Company will determine the
allocation by lot drawing.
4.3. Any remaining new shares not allocated pursuant to the criteria in items 4.1 and 4.2 above, will be
allocated to subscribers not holding subscription rights. Allocation will be sought made pro rata
based on the respective subscription amounts, provided, however, that such allocations may be
rounded down to the nearest thousand NOK.
4.4. Any remaining new shares not allocated pursuant to the criteria in items 4.1, 4.2 and 4.3 above will be
subscribed by and allocated to the underwriters or investors appointed by the underwriters to the
extent the underwriters have not fulfilled their underwriting obligations by on certain market terms
subscribing for shares in the subscription period, based on and in accordance with their respective
underwriting obligations.
5. The subscription price shall be NOK 1.60 per share. The subscription amount shall be paid in cash.
6. The subscription period shall commence on 15 October 2013 and end at 16:30 (CET) on 29 October 2013,
provided however, that the subscription period, if the prospectus is not approved in time to maintain the
subscription period stated above, shall commence at the latest on the fourth trading day on Oslo Børs after
such approval has been obtained and end at 16:30 (CET) on the 14th day thereafter. Any shares not
subscribed for within the subscription period and which will thus be allocated to the underwriters shall be
subscribed for by these within five (5) business days after expiry of the subscription period.
7. The due date for payment of the new shares is 7. November 2013 or 7 business days after the expiry of the
subscription period if the subscription period is postponed according to sub-item 6 above. When
subscribing for shares, subscribers with a Norwegian bank account must through completion of the
subscription form grant a power of attorney to debit a stated bank account in Norway for an amount equal
to the allotted number of shares. Upon allotment, the manager or someone appointed by the manager will
debit the subscriber's account for the allotted amount. The debit will take place on or around the due date
of payment. Subscribers without a Norwegian bank account shall pay the subscription amount to a separate
bank account.
8. The new shares will give full shareholder rights in the Company, including the right to dividends, from the
time the share capital increase is registered with the Norwegian Register of Business Enterprises.
9. Section 4 of the Company's Articles of Association shall be amended to reflect the new share capital and
number of shares following the share capital increase.
10. As consideration for an underwriting guarantee with underwriters, who on certain customary conditions
will subscribe for all shares not subscribed for and allotted in the rights issue or fulfil their underwriting
obligation by subscribing for shares within the subscription period, an amount in NOK equal to 2% of the
guaranteed amount will be paid by the Company to the underwriters."
AQUALIS ASA
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The EGM approved the following resolution with regards to the Employee Offering.
1. “The Company's share capital is increased with NOK 5,000,000 by issuance of 5,000,000 new shares of
nominal value NOK 1 each.
2. The shares may be subscribed for by employees in both the Company and Aqualis Offshore Ltd (or their
respective subsidiaries).
3. Allocation of new shares shall be made by the board of directors. The following allocation criteria shall
apply: Full allocation of subscribed shares up to a maximum of 30,000 shares per subscriber. In the event
that total subscriptions exceed the 5,000,000 shares covered by this resolution, the allocation above 30,000
shares per subscriber will be on a pro rata basis based on the number of shares subscribed for.
4. The subscription price in the rights issue shall be NOK 1.60 per share. The minimum subscription per
subscriber shall be 10,000 shares. The subscription amount shall be paid in cash.
5. The shares issued are subject to a lock-up period of 12 months.
6. The subscription period shall commence on 15 October 2013 and end at 16:30 (CET) on 29 October 2013,
provided however, that the subscription period, if the prospectus referred to under agenda item 4 in this
notice is not approved in time to maintain the subscription period stated above, shall commence at the
latest on the fourth trading day on Oslo Børs after such approval has been obtained and end at 16:30
(CET) on the 14th day thereafter.
7. The due date for payment of the new shares is 7 November 2013 or 7 business days after the expiry of the
subscription period if the subscription period is postponed according to sub-item 6 above. When
subscribing for shares, subscribers with a Norwegian bank account must through completion of the
subscription form grant a power of attorney to debit a stated bank account in Norway for an amount equal
to the allotted number of shares. Upon allotment, the manager or someone appointed by the manager will
debit the subscriber's account for the allotted amount. The debit will take place on or around the due date
of payment. Subscribers without a Norwegian bank account shall pay the subscription amount to a separate
bank account.
8. The new shares will give full shareholder rights in the Company, including the right to dividends, from the
time the share capital increase is registered with the Norwegian Register of Business Enterprises.
9. Section 4 of the Company's Articles of Association shall be amended to reflect the new share capital and
number of shares following the share capital increase”.
6.2.2 Timetable
The timetable below provides certain indicative key dates for the Offerings.
Last day of trading including right to participate in Rights Issue ................................................. 8 October 2013
Shares trading excluding right to participate in Rights Issue ......................................................... 9 October 2013
Subscription period for the Offerings commences ......................................................................... 15 October 2013
First day of trading of Subscription Rights ................................................................................... 15 October 2013
End of trading of Subscription Rights ............................................................................................ 29 October 2013
Subscription period for the Offerings ends .................................................................................... 29 October 2013
Allocation ...................................................................................................................................... 1 November 2013
Payment date .................................................................................................................................. 7 November 2013
Registration of share capital increase ............................................................................................. On or about 8 November 2013
Delivery of the Offering Shares ..................................................................................................... On or about 8 November 2013
Listing and commencement of trading on Oslo Stock Exchange ................................................... On or about 8 November 2013
6.2.3 Underwriting
The Company has in connection with the Rights Issue entered into an underwriting agreement (the
“Underwriting Agreement”) with Strata Marine & Offshore AS, Gross Management AS, AS Ferncliff and Anko
Invest AS (jointly, the “Underwriters”), pursuant to which the Underwriters have undertaken to underwrite the
subscription of the total amount of NOK 54 million in the Rights Issue (“Total Underwriting Commitment”).
AQUALIS ASA
31
To the extent the Underwriter is a direct or indirect shareholder in the Company, each of the Underwriters have
also irrevocably undertaken, on the terms and subject to the conditions set forth in the Underwriting Agreement,
on the first day of the Subscription Period, to use the Subscription Rights allocated to it as a shareholder to
subscribe and pay for the number of Offer Shares which equals its pro rata entitlement as a shareholder.
The Underwriters have, on a pro rata basis and limited to their respective underwritten amounts as set out in the
table below, undertaken to subscribe and pay for the Offer Shares not subscribed for during the Subscription
Period.
Underwriter Address Underwriting obligation
(in shares)
Underwriting obligation
(in NOK) In %
Strata Marine & Offshore AS .......................................................................................................................... Sjølyst Plass 2, 0278 Oslo 16,571,313 26,514,100 49.1%
Gross Management AS .................................................................................................................................... Sjølyst Plass 2, 0278 Oslo 9,560,500 15,296,800 28.3%
AS Ferncliff..................................................................................................................................................... Sjølyst Plass 2, 0278 Oslo 6,373,702 10,197,924 18.9%
Anko Invest AS ............................................................................................................................................... 6264 Tennfjord, Haram i Møre og Romsdal
1,250,000 2,000,000 3.7%
Total 33,755,515 54,008,824 100.0%
The Underwriters shall receive an underwriting fee of 2% of the Underwriting obligation.
6.3 TERMS AND CONDITIONS OF THE RIGHTS ISSUE
6.3.1 Subscription Rights
The Rights Issue comprises 33 755 515 transferrable subscription rights (“Subscription Rights”), where each
Subscription Right grants the right to subscribe for one (1) Offer Share. The Eligible Shareholders will be
granted one Subscription Right for each (1) Share owned by such Eligible Shareholder on the Record Date.
Eligible Shareholders will be allowed to subscribe for more Offer Shares than the number of Subscription
Rights held by Eligible Shareholders. See section 6.3.5 for allotment criteria.
NO FRACTIONAL OFFER SHARES WILL BE ISSUED. Fractions will not be compensated, and all fractions
will be rounded down to the nearest integer that provides issue of whole numbers of said securities to each
participant.
The Subscription Rights will be transferable and listed on the Oslo Stock Exchange during the Subscription
Period. The Subscription Rights will be transferred to the Eligible Shareholders’ VPS-accounts on 15 October
2013.
The Subscription Rights must be used to subscribe for Offer Shares before the expiry of the Subscription Period
(i.e. 29 October 2013 at 16:30 hours (CET)). Subscription Rights that are not exercised before 16:30 hours
(CET) on 29 October 2013 will have no value and will lapse without compensation to the holder. Holders of
Subscription Rights should note that subscriptions for Offer Shares must be made in accordance with the
procedures set out in this Prospectus and that holding of Subscription Rights in itself should not represent a
subscription of Offer Shares.
Subscription Rights of Existing Shareholders resident in jurisdictions where the Prospectus may not be
distributed and/or with legislation that, according to the Company’s assessment, prohibits or otherwise restricts
subscription for Offer Shares (the “Ineligible Shareholders”) will initially be credited to such Ineligible
Shareholders’ VPS accounts. Such credit specifically does not constitute an offer to Ineligible Shareholders. The
Company will instruct the Manager to, as far as possible, withdraw the Subscription Rights from such Ineligible
Shareholders’ VPS accounts, and sell them from and including 23 October 2013 until 29 October 2013 at 16:30
hours (CET) for the account and risk of such Ineligible Shareholders.
The Manager will use commercially reasonable efforts to procure that the Subscription Rights withdrawn from
the VPS accounts of Ineligible Shareholders are sold on behalf of, and for the benefit of, such Ineligible
Shareholders during said period, provided that (i) the Manager is able to sell the Subscription Rights at a price at
least equal to the anticipated costs related to the sale of such Subscription Rights, and (ii) the relevant Ineligible
Shareholder has not by 16:30 hours (CET) on 22 October 2013 documented to the Company through the
Manager a right to receive the Subscription Rights withdrawn from its VPS account, in which case the Manager
shall re-credit the withdrawn Subscription Rights to the VPS account of the relevant Ineligible Shareholder. The
AQUALIS ASA
32
proceeds from the sale of the Subscription Rights (if any), after deduction of customary sales expenses, will be
credited to the Ineligible Shareholder’s bank account registered in the VPS for payment of dividends, provided
that the net proceeds attributable to such Ineligible Shareholder amount to or exceed NOK 10. If an Ineligible
Shareholder does not have a bank account registered in the VPS, the Ineligible Shareholder must contact the
Manager to claim the proceeds. If the net proceeds attributable to an Ineligible Shareholder are less than NOK
10, such amount will be retained for the benefit of the Company. There can be no assurance that the Manager
will be able to withdraw and/or sell the Subscription Rights at a profit or at all. Other than as explicitly stated
above, neither the Company nor the Manager will conduct any sale of Subscription Rights not utilised before the
end of the Subscription Period.
Note: This Prospectus does not constitute an offer of, or a solicitation of an offer to purchase, any of the Offer
Shares in any jurisdiction or in any circumstance in which such offer or solicitation would be unlawful. This
Prospectus may not be sent to any person in an Ineligible Jurisdiction, and the crediting of Subscription Rights
to an account of the shareholders of the Company or other person in an Ineligible Jurisdiction does not
constitute an offer to such persons to subscribe for Offer Shares and Ineligible Persons may not exercise
Subscription Rights.
6.3.2 Subscription period
The Subscription Period in the Rights Issue will commence 09:00 hours (CET) on 15 October 2013 and expire
at 16:30 hours (CET) on 29 October 2013. The Subscription Period may be extended by the Board, but may not
in any event be later than 5 November 2013. An extension, if any, will be announced by a press release through
www.newsweb.no and on the Company’s webpage www.aqualis.no. In case of extension of the Subscription
Period, all relevant deadlines will be extended accordingly. The Subscription Period may not be closed earlier
than 16:30 hours (CET) on 29 October 2013.
The Subscription Rights are fully tradable and transferrable, and will be listed on the Oslo Stock Exchange with
ticker “AQUA T“ and registered in VPS with ISIN NO 001 0691868. Trading in the Subscription Rights on the
Oslo Stock Exchange may take place from and including 15 October 2013, and until 16:30 hours (CET) on 29
October 2013. Persons intending to trade in Subscription Rights should be aware that the exercise of
Subscription Rights by holders who are located in jurisdictions outside Norway may be restricted or prohibited
by applicable securities laws.
6.3.3 Subscription price
The Subscription Price for one (1) Offer Share is NOK 1.60. The Subscription Price is identical to the price
offered to the shareholders of Aqualis Offshore. The subscribers will not incur any costs related to the
subscription for, or allotment of, the Offer Shares.
6.3.4 Subscription procedure
Subscription for Offer Shares must be made by submitting a correctly completed subscription form, attached as
Appendix D hereto, (the “Subscription Form”) to the Manager during the Subscription Period. The Prospectus is
available at www.aqualis.no and www.carnegie.no, and at the offices of the Manager and the Company.
Norwegian subscribers domiciled in Norway can in addition download the Prospectus on www.carnegie.no and
www.aqualis.no and subscribe for Offer Shares through VPS' internet service.
Online subscriptions must be submitted, and accurately completed Subscription Forms must be received by the
Manager by 16:30 hours (CET) on 29 October 2013.
Correctly completed Subscription Forms must be received by the Manager no later than 16:30 hours (CET) on
29 October 2013 at the following address, fax number or email address:
Carnegie AS
Grundingen 2, Aker Brygge
PO Box 684 Sentrum
0106 Oslo, Norway
Fax: +47 22 00 99 60
Tel: +47 22 00 93 00
E-mail: [email protected]
None of the Company or the Manager may be held responsible for postal delays, unavailable fax lines, internet
lines or servers or other logistical or technical problems that may result in subscriptions not being received in
time or at all by the Manager. Subscription Forms received after the end of the Subscription Period and/or
AQUALIS ASA
33
incomplete or incorrect Subscription Forms and any subscription that may be unlawful may be disregarded at
the sole discretion of the Company and/or the Manager without notice to the subscriber.
Subscriptions are binding and irrevocable, and cannot be withdrawn, cancelled or modified by the subscriber
after having been received by the Manager. The subscriber is responsible for the correctness of the information
filled into the Subscription Form. By signing and submitting a Subscription Form or subscribing through VPS’
internet service, the subscribers confirm and warrant that they are eligible to subscribe for Offer Shares under
the terms set forth herein.
There is no minimum subscription amount for which subscriptions in the Rights Issue must be made. Over-
subscription, i.e. subscription for more Offer Shares than the number of Subscription Rights held by the
subscriber entitles the subscriber to be allocated, and subscription without Subscription Rights will be allowed.
Multiple subscriptions (i.e., subscriptions on more than one Subscription Form) are allowed. Please note,
however, that two separate Subscription Forms submitted by the same subscriber with the same number of Offer
Shares subscribed for on both Subscription Forms will only be counted once unless otherwise explicitly stated in
one of the Subscription Forms. In the case of multiple subscriptions through the VPS online subscription system
or subscriptions made both on a Subscription Form and through the VPS online subscription system, all
subscriptions will be counted.
6.3.5 Allocation
Allotment of the Offer Shares is expected to take place on or about 1 November 2013. Allocation of Offer
Shares will be made in accordance with Subscription Rights exercised in the Subscription Period.
The following allocation criteria will be used for allotment of Offer Shares in the Rights Issue:
1. Allocation will be made to subscribers on the basis of granted and acquired subscription rights which
have been validly exercised during the subscription period. Each subscription right will give the right
to subscribe for and be allocated one (1) new share.
2. If not all subscription rights are validly exercised in the subscription period, subscribers having
exercised their subscription rights and who have over-subscribed will have the right to be allocated
remaining new shares on a pro rata basis based on the number of subscription rights exercised by the
subscriber. In the event that pro rata allocation is not possible, the Company will determine the
allocation by lot drawing.
3. Any remaining new shares not allocated pursuant to the criteria in items 1 and 2 above, will be
allocated to subscribers not holding subscription rights. Allocation will be sought made pro rata based
on the respective subscription amounts, provided, however, that such allocations may be rounded down
to the nearest thousand NOK.
4. Any remaining new shares not allocated pursuant to the criteria in items 1, 2 and 3 above will be
subscribed by and allocated to the Underwriters or investors appointed by the Underwriters to the
extent the Underwriters have not fulfilled their underwriting obligations by on certain market terms
subscribing for shares in the subscription period, based on and in accordance with their respective
underwriting obligations.
General information regarding the preliminary result of the Rights Issue is expected to be published on or about
30 October 2013 in the form of a stock exchange release through www.newsweb.no.
All Subscribers being allotted Offer Shares will receive a letter from the Manager confirming the number of
Offer Shares allotted to the Subscriber and the corresponding amount which will be debited the Subscriber’s
account. This letter is expected to be mailed on or about 4 November 2013.
6.4 PAYMENT OF THE OFFER SHARES
When subscribing for Offer Shares, each Subscriber with a Norwegian bank account must provide a one-time
authorisation to the Manager to debit a specified bank account with a Norwegian bank for the amount (in NOK)
payable for the Offer Shares allotted to such Subscriber. It is expected that the amount will be debited on or
about 7 November 2013 (the “Payment Date”). However, there must be sufficient funds in the specified bank
account from and including 6 November 2013. The Manager is only authorised to debit such account once, but
AQUALIS ASA
34
reserves the right to make up to three debit attempts, and the authorisation will be valid for up to seven working
days after the Payment Date. If there are insufficient funds on the specified bank account or it is impossible to
debit the specified bank account for the amount that the Subscriber is obligated to pay, or payment is not
received by the Manager according to other instructions, the Subscriber’s obligation to pay for the Offer Shares
will be deemed overdue.
Subscribers who do not have a Norwegian bank account must ensure that payment for their Offer Shares is
made on or before 10:00 hours (CET) on 7 November 2013 and should contact the Manager in this respect.
For late payments, penalty interest will accrue at a rate equal to the prevailing interest rate, pursuant to the
Norwegian Act on Interest on Overdue Payment of December 17, 1976 no. 100, which at the date of this
Prospectus is 9.50% per annum.
If a Subscriber fails to comply with the terms of payment, the Offer Shares will, subject to the discretion of the
Manager, not be delivered to the Subscriber, and the Manager reserves the right, at the risk and cost of the
Subscriber (however, so that the Subscriber will not be entitled to any profit therefrom), to cancel the
Subscription and to re-allot or otherwise dispose of the allocated Offer Shares on such terms and in such manner
as the Manager may decide in accordance with Norwegian law. The original Subscriber remains liable for
payment of the Subscription Price for the Offer Shares allocated to the Subscriber together with any interest,
cost, charges and expenses accrued, and the Company or the Manager may enforce payment for any such
amount outstanding.
6.5 TERMS AND CONDITIONS OF THE EMPLOYEE OFFERING
6.5.1 Overview
The Employee Offering comprises an offering of up to 5,000,000 Employee Offer Shares at NOK 1.60 per
share. The Employee Offer Shares may be subscribed for by employees in both the Company and Aqualis
Offshore (or their respective subsidiaries).
The minimum subscription per employee shall be 10,000 shares.
The Employee Offer Shares are subject to a lock-up period of 12 months, as further described in section 6.7
below.
6.5.2 Subscription period
The subscription period in the Employee Offering is identical to the Subscription Period in the Rights Issue as
further described in section 6.3.2 above. Thus, the subscription period will commence 09:00 hours (CET) on 15
October 2013 and expire at 16:30 hours (CET) on 29 October 2013. The subscription period may be extended
by the Board, but may not in any event be later than 5 November 2013. An extension, if any, will be announced
by a press release through www.newsweb.no and on the Company’s webpage www.aqualis.no. In case of
extension of the subscription period, all relevant deadlines will be extended accordingly. The subscription
period may not be closed earlier than 16:30 hours (CET) on 29 October 2013.
6.5.3 Subscription price
The Subscription Price for one (1) Employee Offer Share is NOK 1.60, i.e. the same subscription price as in the
Rights Issue, cf. section 6.3.3 above, and the Transaction. The subscribers will not incur any costs related to the
subscription for, or allotment of, the Employee Offer Shares.
6.5.4 Subscription procedure
Subscription for Employee Offer Shares must be made by submitting a correctly completed subscription form,
attached as Appendix E hereto to the Manager during the subscription period. The Prospectus is available at
www.aqualis.no and www.carnegie.no, and at the offices of the Manager and the Company. Norwegian
subscribers domiciled in Norway can in addition download the Prospectus on www.carnegie.no and
www.aqualis.no.
Correctly completed subscription forms must be received by the Manager no later than 16:30 hours (CET) on 29
October 2013 at the following address, fax number or email address:
AQUALIS ASA
35
Carnegie AS
Grundingen 2, Aker Brygge
PO Box 684 Sentrum
0106 Oslo, Norway
Fax: +47 22 00 99 60
Tel: +47 22 00 93 00
E-mail: [email protected]
None of the Company or the Manager may be held responsible for postal delays, unavailable fax lines or servers
or other logistical or technical problems that may result in subscriptions not being received in time or at all by
the Manager. Subscription forms received after the end of the subscription period and/or incomplete or incorrect
subscription forms and any subscription that may be unlawful may be disregarded at the sole discretion of the
Company and/or the Manager without notice to the subscriber.
Subscriptions are binding and irrevocable, and cannot be withdrawn, cancelled or modified by the subscriber
after having been received by the Manager. The subscriber is responsible for the correctness of the information
filled into the subscription form.
6.5.5 Allocation and payment
Allocation of the Employee Offer Shares shall be made by the Board of Directors. The following allocation
criteria shall apply: Full allocation of subscribed shares up to a maximum of 30,000 shares per subscriber. In the
event that total subscriptions exceed the 5,000,000 shares covered by this resolution, the allocation above 30,000
shares per subscriber will be on a pro rata basis based on the number of shares subscribed for.
All subscribers being allotted Employee Offer Shares will receive a letter on or about 4 November 2013 from
the Manager containing information regarding the number of Employee Offer Shares allotted to the subscriber
and payment instructions. The payment for the Employee Offer Shares falls due 10:00 CET on 7 November
2013. If payment is not received by the Manager by 10:00 CET on 7 November 2013 the subscriber’s obligation
to pay for the Employee Offer Shares will be deemed overdue.
For late payments, penalty interest will accrue at a rate equal to the prevailing interest rate, pursuant to the
Norwegian Act on Interest on Overdue Payment of December 17, 1976 no. 100, which at the date of this
Prospectus is 9.50% per annum.
6.6 DELIVERY AND LISTING OF THE OFFERING SHARES
All Subscribers subscribing for Offering Shares must have a valid VPS account (established or maintained by an
investment bank or Norwegian bank that is entitled to operate VPS accounts) to receive Offering Shares.
Assuming that payments from all Subscribers are made when due, delivery of the Offering Shares is expected to
take place on or about 8 November 2013, however, delivery of the Offering Shares will take place at the latest
on 15 November 2013. Assuming that payments from all Subscribers are made when due, it is expected that the
share capital increase will be registered in the Norwegian Register of Business Enterprises on or about 8
November 2013, however, such registration will take place at the latest on 15 November 2013.
All of the Offering Shares will be object for an application for admission to trading on Oslo Børs. Assuming
timely payment by all Subscribers, the Company expects that the Offering Shares will be listed on Oslo Børs on
or about 8 November 2013. The Shares will not be sought or admitted to trading on any other regulated market
than Oslo Børs.
6.7 TRANSFERABILITY OF THE OFFERING SHARES
A Subscriber will not under any circumstances be entitled to sell or transfer its Offer Shares until such
Subscriber has paid these in full and the share capital increase in connection with the Rights Issue has been
registered in the Norwegian Register of Business Enterprises. Upon payment of the Offer Shares and
registration of the Offer Shares in the Norwegian Register of Business Enterprises, the Offer Shares will be
freely transferable.
The Employee Offer Shares issued in connection with the Employee Offering are subject to a lock-up period of
12 months.
AQUALIS ASA
36
6.8 VPS REGISTRATION
The Offering Shares will be registered with VPS under ISIN NO 001 0308240.
The Offering Shares will not be delivered to the Subscribers' VPS accounts before they are fully paid, registered
with the Norwegian Register for Business Enterprises and registered in the VPS.
See section 12.5 for information regarding the Company’s registrar.
6.9 SHARE CAPITAL FOLLOWING THE OFFERINGS
The Company’s total number of issued Shares following the Transaction, the Rights Issue and the Employee
Offering will be 116 261 030, each with a nominal value of NOK 1.00 per Share.
6.10 SHAREHOLDERS’ RIGHTS RELATING TO THE OFFERING SHARES
The rights attached to the Offering Shares will be the same as those attached to the Company’s existing Shares.
The Offering Shares will be issued electronically and will rank pari passu with existing shares in all respects
from such time as the share capital increases in connection with the issuance of the Offering Shares are
registered in the Norwegian Register of Business Enterprises. The holders of the Offering Shares will be entitled
to dividend from and including the date of registration of the share capital increase in the Norwegian Registry of
Business Enterprises. There are no particular restrictions or procedures in relation to the distributions of
dividends to shareholders who are resident outside Norway, other than an obligation on part of the Company to
deduct withholding tax as further described in Section 15.
Pursuant to the Norwegian Public Limited Companies Act, all shares have equal rights to the Company’s
profits, in the event of liquidation and to receive dividend, unless all the shareholders approve otherwise. Please
see section 13 regarding shareholding in a Norwegian Public Limited Company.
6.11 DILUTION
The Rights Issue will result in an immediate dilution of approximately 50 per cent for Eligible Shareholders who
do not participate in the Rights Issue. Based on the total number of Shares in the Company following the
Transaction and the Offerings, the dilutive effect for Eligible Shareholders who do not participate in the Rights
Issue will be approximately 71 per cent.
6.12 PUBLICATION OF INFORMATION RELATING TO THE OFFERINGS
Publication of information related to any changes in the Offerings and the amount subscribed, will be published
on www.newsweb.no under the Company’s ticker “AQUA”, and will also be available on the Company’s
website www.aqualis.no. The announcement regarding the amount subscribed is expected to be made on or
about 30 October 2013.
6.13 EXPENSES RELATED TO THE OFFERINGS
Transaction costs and all other directly attributable costs in connection with the Rights Issue and Employee
Offering will be borne by the Company and are estimated to approximately NOK 2.8 million, thus resulting in
net proceeds of approximately NOK 59.2 million.
6.14 INTEREST OF NATURAL AND LEGAL PERSONS INVOLVED IN THE RIGHTS ISSUE
The Manager and its affiliates have provided from time to time, and may provide in the future, investment and
commercial banking services to the Company and its affiliates in the ordinary course of business, for which they
may have received and may continue to receive customary fees and commissions. The Manager does not intend
to disclose the extent of any such investments or transactions otherwise than in accordance with any legal or
regulatory obligation to do so. The Manager, its employees and any affiliate may currently own existing Shares
in the Company, and employees of the Manager may obtain allotment in the Rights Issue.
Furthermore, the Manager will receive a commission in connection with the Rights Issue and, as such, has an
interest in the Rights Issue. Reference is made to section 6.13 “Expenses related to the Offerings”.
AQUALIS ASA
37
6.15 PARTICIPATION OF MEMBERS OF THE COMPANY’S MANAGEMENT AND BOARD OF
DIRECTORS IN THE RIGHTS ISSUE
The Underwriter AS Ferncliff is wholly owned by the Company’s board member Øystein Stray Spetalen
whereas the Underwriters Gross Management AS and Strata Marine & Offshore AS are both partly owned by
Mr. Spetalen. Thus, Mr. Spetalen is obligated to subscribe for Offer Shares as outlined in section 6.2.3 above.
Other than the Underwriting Agreement mentioned above and in section 6.2, the Company is not aware of
whether any other members of the Company’s Management or Board of Directors intend to subscribe for Offer
Shares in the Rights Issue, or whether any person intends to subscribe for more than 5% of the Offer Shares.
6.16 ADVISORS
The Manager for the Rights Issue is Carnegie AS, Grundingen 2, PO Box 684 Sentrum, 0106 Oslo, Norway.
The legal advisor is Advokatfirmaet Schjødt AS, Ruseløkkveien 14, PO Box 2444 Solli, 0201 Oslo, Norway.
6.17 GOVERNING LAW AND JURISDICTION
This Prospectus is subject to Norwegian law, unless otherwise indicated herein. Any dispute arising in respect of
this Prospectus is subject to the exclusive jurisdiction of Oslo City Court.
AQUALIS ASA
38
7. PRESENTATION OF AQUALIS ASA
7.1 GENERAL
Aqualis ASA is a public limited liability company pursuant to the Norwegian Public Limited Liability
Companies Act, incorporated under the laws of Norway. The Company was established on 30 August 2001. The
Company’s organisation number is 983 733 506, and its currently registered office is Sjølyst Plass 2, 0278 Oslo,
Norway with telephone number: +47 23 01 49 00.
As of the date of this Prospectus, the Company has no subsidiaries.
7.2 HISTORICAL BACKGROUND AND COMPANY DEVELOPMENT
The Norwegian industrial company, Norsk Hydro, developed the Lipid Vector Technology (“LVT”) in the
1990’s, by combining its lipid expertise with pharmaceutical know-how, and was able to invent new drug
candidates through chemical synthesis of various lipids with existing drugs.
In 2001, Norsk Hydro partnered with the venture capital firm, NeoMed Management, to spin-off all LVT-
related assets and activities and the Company was founded and incorporated as Conpharma AS in August 2001.
The Company acquired all technology rights from Norsk Hydro, with Norsk Hydro retaining residual rights to
receive certain payments from the Company. The Company’s name was changed to Clavis Pharma AS in 2003.
In 2006, the Company completed a private placement and a subsequent initial public offering, and its shares
were listed on the Oslo Børs. The Company’s name was changed to Aqualis ASA on 8 October 2013.
By 2009, the Company had developed two late-stage drug candidates, elacytarabine, for the treatment of
patients with relapsed or refractory acute myeloid leukaemia, and CP-4126, for the treatment of patients with
pancreatic cancer. These two drug candidates were ready to start pivotal clinical trials, and in late 2009 Aqualis
reached a significant milestone when the Company entered into a global licensing agreement with Clovis
Oncology Inc. for the final development of the drug candidate CP-4126.
Large international pivotal clinical trials for the two drug candidates were started during 2010, and in November
2012 and April 2013 the Company announced the results of these studies for CP-4126 and elacytarabine
respectively. The results showed that there were no meaningful difference in overall survival between these drug
candidates and the drugs used in the control arms. As a result all further development of these two drug
candidates was stopped.
Following the discontinuation of development of elacytarabine and CP-4126 the Company had no drug
candidates in clinical development, and decided to suspend all further R&D activities related to the LVT-
technology. As a result, most of the employees have left the Company and Aqualis has only two employees at
the date of this Prospectus.
The Company still has a large portfolio of patents relating to the LVT-technology, as well as two licensing
agreements, and the Company will continue to optimise the value of these assets through existing and potential
new partnerships.
The table below summarises the important events in the history and development of the Company.
AQUALIS ASA
39
Year Key milestones & events
Pre 2001 ......................................................................................................................................... Starting position: Approximately 10 years of R&D conducted by Norsk Hydro to develop LVT
2001 ............................................................................................................................................... Company founded as ConPharma AS
2002 ............................................................................................................................................... Second round of venture financing from MVM Life Science Partners, Braganza AS and others
2003 ............................................................................................................................................... Change of name to Clavis Pharma ASA
2006 .............................................................................................................................................. Share offering and IPO of NOK 242 million and listing on the Oslo Børs
2009 ............................................................................................................................................... Positive Phase II date for elacytarabine in relapsed or refractory AML
2009 ............................................................................................................................................... NOK 137 million share offering
2009 ............................................................................................................................................... Licence agreement with Clovis Oncology for CP-4126 for Europe and Americas
2010 ............................................................................................................................................... CLAVELA elacytarabine phase III trial commenced
2010 ............................................................................................................................................... LEAP CP-4126 pivotal trial commenced
2010 ............................................................................................................................................... Licence agreement with Clovis Oncology for CP-4126 expanded to include global rights
2010 ............................................................................................................................................... NOK 175 million share offering
2012 ............................................................................................................................................... Negative outcome of LEAP CP-4126 pivotal trial
2013 ............................................................................................................................................... Negative outcome of phase III CLAVELA trial
2013 ............................................................................................................................................... Change of name to Aqualis ASA
7.3 BUSINESS DESCRIPTION AND PRINCIPAL ACTIVITIES
Aqualis was up until early 2013 a clinical-stage oncology focused pharmaceutical company with a portfolio of
novel anti-cancer drugs in development. These patented New Chemical Entities (NCEs) were novel, improved
versions of well-established and commercially successful drugs (parent drugs), developed using Company's
Lipid Vector Technology (LVT), and were believed to have better efficacy than the parent drugs and a similar
side effect profile.
The Lipid Vector Technology (LVT) is the result of extensive innovative research carried out over more than a
decade at Norsk Hydro. It involves the chemical linking of specific lipids to selected parent drugs. The new
molecule created is a New Chemical Entity (NCE) that may be patented. The Company acquired and further
developed the LVT technology and intellectual property through substantial additional preclinical
understanding, manufacturing know-how and clinical development.
The Company has been focusing on two key late stage drug candidates:
CP-4126: A novel, patented, LVT derivative of the anti-cancer drug gemcitabine; the current standard treatment
for pancreatic cancer. Gemcitabine is also widely used in combination with other chemotherapy agents for the
treatment of other cancers, including non-small cell lung (NSCLC), ovarian, gastro-intestinal and breast cancer.
In developing CP-4126, the Company had partnered globally with Clovis Oncology, Inc. (Clovis Oncology). In
November 2012, Aqualis announced the results of the 360-patient pivotal Phase II LEAP study of CP-4126
versus gemcitabine in metastatic pancreatic cancer. The study was conducted by Clovis Oncology, Inc. and did
not meet its primary or secondary endpoints, as it showed no difference in overall survival between patients
treated with CP-4126 or gemcitabine. Consequently, all development work with CP-4126 was terminated by
both the Company and Clovis Oncology in late 2012 following these results.
CP-4126 was licensed to Clovis Oncology worldwide, and Clovis Oncology was responsible for the majority of
the development and regulatory costs. The Company retained an option to co-promote the product in Europe.
All rights to CP-4126 have been returned to Aqualis following the termination of all development activities
related to CP-4126.
Elacytarabine –a novel, patented LVT derivative of the anti-cancer drug cytarabine that was believed to have
the potential to improve treatment outcomes in patients with haematological malignancies (leukaemia), such as
acute myeloid leukaemia (AML), acute lymphocytic leukaemia (ALL) and lymphomas. Cytarabine is the
current standard treatment for patients suffering from these conditions. In April 2013, the Company announced
the results of the Phase III CLAVELA study investigating elacytarabine in patients with relapsed or refractory
AML. The trial showed that there was no significant difference in overall survival (OS) between the two arms
where patients were randomised to receive either elacytarabine, or investigator’s choice of treatment. Due to the
negative outcome of the CLAVELA trial, the Company decided not to commit any further resources to studies
of elacytarabine in the treatment of patients with AML, or in any other indications.
AQUALIS ASA
40
CLAVELA was a 380-patient Phase III open-label randomised, controlled trial comparing elacytarabine with
the investigator’s choice of treatment in patients with relapsed or refractory AML. The study was conducted at
75 clinical sites in the USA, Canada, Europe and Australia. The primary endpoint of the study was overall
survival and the objective was to demonstrate superiority of elacytarabine over current therapies. Patients were
randomised to each arm of the study and the difference in OS and other parameters, including response rates,
duration of response, and safety profile of elacytarabine, was measured. The enrolment target for CLAVELA
was reached in December 2012.
Following the discontinuation of development of elacytarabine in April 2013, and of CP-4126 in November
2012, the Company has no drug candidates in clinical development and has suspended all R&D activities. As a
result, most of the employees have left the Company and Aqualis has only 2 employees at the date of this
Prospectus. The staffing situation will be reviewed as the Company evaluates new investment opportunities
within the healthcare industry (ref. below). The Company still has a large portfolio of patents relating to the
LVT-technology and the Company will sell or out-license some or all of these patents should the opportunity
arise (refer to Section 7.4 for further details on patents).
In addition, the Company has a licensing agreement, which was entered into in May 2011, with Translational
Therapeutics, Inc. (“TT”), an early-stage private biopharmaceutical company based in Massachusetts, USA, for
the development and commercialisation of CP-4033. CP-4033 is a LVT derivative of ribavirin, currently in the
preclinical state of development. TT is developing CP-4033 for use in the treatment of aggressive thyroid
cancer, and will evaluate the potential of CP-4033 for in the treatment of other solid tumours. Under the terms of
the agreement, TT is responsible for all future development of CP-4033 and Aqualis may receive future
milestones, should TT sub-license CP-4033, and royalty payments on potential future sales. The Company also
has a licensing agreement with Mt. Sinai School of Medicine, New York, for the possible development of the
pre-clinical compound CP-4200, a LVT derivative of azacytidine.
Going forward, the Company will try to maximize the value of these assets by closely following the licensees’
development of potential drug candidates, and through further out-licensing or sale of existing patents and
patent applications. The Company will continue to review new investment opportunities within the healthcare
industry to see whether further investments should be made in new technologies and/or development projects
through external parties.
7.4 PATENTS AND INTELLECTUAL PROPERTY RIGHTS
The Company has a patent portfolio that offers composition of matter protection for a large number of specific
LVT compounds that includes more than 165 approved patents in ten patent families. The patents and patent
application owned by the Company cover processes, products, formulation and product application.
More specifically, seven patent families are specific to LVT nucleoside derivatives for use in the treatment of
cancer and viral infections. The eighth patent family is an umbrella patent providing broad coverage of the
technology exemplified for a range of different drug classes used within seven therapeutic areas. The ninth
patent family is related to 1.3-dioxolane derivatives for use in the treatment of cancer. Troxacitabine is the most
known compound in this class. The tenth patent family is related to steroids and their use in the treatment of
cancer and inflammatory diseases.
None of the granted patents is currently subject to any proceedings in which its validity is being challenged, nor,
so far as the Company is aware, have any objections been raised to any of the pending applications which are
likely to prevent claims being granted which are of a sufficiently broad scope to protect the Company's
commercial position. The Company is not aware of any third-party infringement of any of its patent rights.
The Company’s key patent and patent applications are summarized in the following table:
AQUALIS ASA
41
Aqualis patent portfolio
Key compounds Therapeutic area Priority date Expiry year without
extension
Expiry year including
potential extension*
Elactyrabine Anticancer, cytarabine
derivatives 1995
US 2014**
ROW 2016**
US 2019
ROW 2021
JPN 2021
CP-4126 Anticancer, cytarabine
derivatives 1997
US 2018
ROW 2018
US 2023
ROW 2023
JPN 2023
CP-4126
intravenous
formulation
Anticancer 2009 2030
Pending grant n.a.
Elacytarabine
intravenous
formulation
Anticancer 2010 2031
Pending grant n.a.
* Possible extension: Hatch Waxman term extension in the US: 50% of the period used on clinical studies (IND) relating to the patent, plus
the period used on the NDA review. Extension period not to exceed 5 years and the total remaining patent time, including extension, not to exceed 14 years SPC (Supplementary Protection Certificate) in rest of the world (ROW): An SPC period of a maximum of five (5) years can
be awarded to extend the patent expiry date of a particular active ingredient used in a medicinal product with a marketing authorisation. The
SPC is awarded in order to compensate the long time spent and the delay between the grant of a patent and the commercialisation of the
product due to the extensive documentary work needed in order to seek marketing authorisation. An SPC must be applied for in each
territory.
** Orphan drug status granted for elacytarabine in AML in the US and EU ensuring seven and ten years of market exclusivity respectively, following a regulatory approval of the product.
It has been the Company’s policy to require its employees, consultants, outside scientific collaborators,
sponsored researchers and other advisors to execute confidentiality agreements upon the commencement of
employment or consulting relationships with the Company. These agreements provide that all confidential
information developed or made known to the individual during the course of the individual’s relationship with
the Company is to be kept confidential and not disclosed to third parties except in specific circumstances. In the
case of employees, the agreements provide that all inventions conceived by the individual shall be the
Company’s property and all employment contracts include a reference to the “Norwegian Act in Inventions
made by the Employees of 17 April 1970 no. 21. There can be no assurance, however, that these agreements
will provide meaningful protection or adequate remedies for our trade secrets in the event of unauthorised use or
disclosure of such information.
7.5 PROPERTY AND EQUIPMENT
As of the date of this Prospectus, the Company has no plant or production and lab equipment. The Company has
a leasing contract for its main office, which expires on 31 January 2014. Aqualis’ main office measures
approximately 1,000m². However, due to the significant downscaling of the Company’s operations, the
Company relocated to new offices in early October 2013, and the Company expects to be able to terminate the
existing leasing contract before expiry.
Total plant and equipment in Aqualis Offshore per 30 June 2013 amounted to USD 117 thousand, consisting of
mainly leasehold improvements, office furniture and computer hardware and software.
7.6 SIGNIFICANT CHANGES IN THE COMPANY’S FINANCIAL OR TRADING POSITION
SINCE 30 JUNE 2013
Except for the Transaction and the contemplated Offerings, there have been no significant changes in the
financial or trading position of the Company which has occurred since 30 June 2013.
AQUALIS ASA
42
8. PRESENTATION OF AQUALIS OFFSHORE
8.1 COMPANY OVERVIEW
Aqualis Offshore Ltd (“Aqualis Offshore”) is incorporated under the Companies Act 2006 as a private
company. Aqualis Offshore was incorporated on 17 December 2012. The company’s registered business address
is located at 5 New Street Square, EC4A 3TW London, United Kingdom, with telephone number +44 207 264
2110. The company’s webpage is www.aqualisoffshore.com.
8.2 LEGAL STRUCTURE
Aqualis Offshore Ltd is the holding company of the group which consists of four wholly-owned and two partly
owned subsidiaries as illustrated below. The activities in the holding company are mainly related to overhead,
management and group services. The subsidiary, Aqualis Offshore AS (Norway), is owned 60% by Aqualis
Offshore and 40% by local employees. Aqualis Offshore has a 49% ownership in Aqualis Offshore Marine
Services LLC (Dubai), while the remaining 51% is owned by an Emirati sponsor. In the Kingdom of Saudi
Arabia (“KSA”) / Bahrain, Aqualis Offshore operates through an agency agreement with Arabian Establishment
for Trade & Shipping Ltd (“AET”).
Aqualis KSA / Bahrain
Aqualis Offshore Ltd
(Holding)
Aqualis Offshore Inc
(Houston)
Aqualis Offshore Marine Services
LLC (Dubai)
Aqualis Offshore Pte Ltd
(Singapore)
Aqualis Offshore UK Ltd
(London)
Aqualis Offshore Serviçõs Ltda
(Brazil)
Aqualis Offshore AS
(Norway)
100% 49% 100% 100% 100% 60%
100%
8.3 BUSINESS OBJECTIVES AND STRATEGY
Aqualis Offshore’s vision is to become recognized by industry leaders in its areas of expertise as a respected
quality service provider to the offshore industry through the provision of pragmatic marine and engineering
solutions to its clients. Aqualis Offshore’s mission is to become the preferred solution provider to its clients such
that the majority of its work is the result of repeat business and client recommendations. Through this strategy,
Aqualis Offshore is to grow such that it extends both its footprint and service coverage into new regions.
Aqualis Offshore’s target market is the offshore oil and gas and marine segments in which it focuses on high-
end niche consultancy. It specializes in marine and engineering solutions and is involved in the full life cycle of
offshore assets, i.e. from concept to demolition. Aqualis Offshore has highly experienced personnel consisting
of selected specialists with long track record from the industry. Its integrated marine and engineering staff has
multi-faceted capability yielding high efficiency. Further, as an independent company, Aqualis Offshore faces
no external pressure and provides unbiased consultancy. It has no ownership in any assets or equipment. Finally,
it offers a large portfolio of service-offerings to a wide client base, including: operators, rig and vessel owners,
contractors, suppliers, underwriters and financial institutions.
Aqualis Offshore’s strategy is, through its specialist marine and engineering consultancy services, to operate
through a growing network of global offices. As it expands globally, Aqualis Offshore pursues high growth
ambitions primarily focusing on developing economies and emerging markets. Within developing economies,
Aqualis Offshore services the high-end niche markets with a goal to be recognized for its high-quality product
and services. The company aims to be ISO 9001 accredited early 2014 once the mandatory minimum trading
time lines have been completed. In order to incentivize and align interest internally, Aqualis Offshore offers
opportunities for wide employee ownership and focuses on maintaining excellent retention of its high-value
staff.
AQUALIS ASA
43
8.4 BUSINESS OVERVIEW
Aqualis Offshore provides marine and engineering solutions to the offshore oil and gas industry worldwide. Its
multi-disciplinary engineering and marine teams are recognized in the industry for their competence and
experience. Aqualis Offshore works closely with clients to understand their requirements, identify solutions and
to execute their projects and marine operations in a timely, cost effective and safe manner.
Aqualis Offshore specializes in the following engineering and marine services;
- FEED and basic design for new-build and vessel upgrades
- Deep and shallow water installation engineering and related marine operations
- Marine operations and surveying including rig moving and tow master services
- Vessel construction supervision and owner representation
- Third party approvals on behalf of owners and underwriters such as marine warranty and audits of
dynamic positioning systems
The company’s services are split into eight business lines as further described below.
With offices strategically located near the world’s major shipping and offshore energy centres, Aqualis Offshore
has a strong global presence. The company is headquartered in London, UK and has regional subsidiaries in the
following locations: Norway (Oslo/Sandefjord), USA (Houston), UAE (Dubai), Brazil (Rio de Janeiro),
Singapore and KSA (Dammam). This widespread global presence allows the business to respond quickly when
high-end marine or engineering consultancy is required. Although some of the offices have special focus on
certain areas of operations, all service offerings are provided across all regions.
HQ
Regional subsidiaries
Offices strategically located near the world’s major offshore energy centers
8.4.1 Engineering Solutions
Aqualis Offshore provides a unique solutions-based approach to engineering. Its engineers are aim to work with
the client as a one-stop-shop to find efficient solutions to their engineering projects. Due to its independence,
Aqualis Offshore, is able to concentrate on cost-effective solutions that are fit for purpose and tailored to suit the
specific needs and constraints of the client. Its offshore engineering expertise covers the life-cycle of an offshore
facility from concept and basic design through to installation and marine operations and ultimately onto ageing
asset integrity management and, finally, the decommissioning phase. Aqualis Offshore is involved in both the
shallow and deep water ends of the offshore oil and gas industry and operates in the major centres of the
offshore industry.
Aqualis Offshore’s team of highly qualified engineers can provide unique solutions for many platform types
including Mobile Offshore Drilling Units (MODU), Wind Turbine Installation Vessels and Lift boats, Mobile
AQUALIS ASA
44
Offshore Production Units (MOPU), fixed offshore installations as well as FPSO, FSO, FLNG and other
floating structures. These solutions range from:
- Concept Design
- Basic Design
- FEED and Pre-FEED solution
- Upgrade and modification Engineering
- Advanced engineering solutions
8.4.2 Transportation & Installation
Aqualis Offshore’s multi-disciplined teams of engineers, surveyors and master mariners have many years of
experience in the offshore industry. It specializes in complicated marine operations and can provide valuable
early planning and advice to optimize the solutions with regards to:
- Vessel and equipment selection
- Structural design
- Offshore procedures
Subsequent engineering comprises analysis and design associated with all temporary phases of a marine
operation from load-out and transportation to installation or discharge/offload of high value offshore assets.
Such calculations include:
- Vessel ballasting
- Global and local vessel strength
- Vessel motions and stability
- Grillage and sea fastening design
- Dynamic lifting and rigging
- Hydrodynamic analysis
- Jacket launch and upending
- Dynamic analysis for float-over installations
- Geotechnical analysis etc.
- Production of appropriate documentation
Aqualis Offshore also offers offshore operation supervision and support from its qualified and experienced
marine superintendents and project engineers. The company draws on the services of external companies where
supplementary skills or input are required, e.g. metocean data for transportation assessment and planning.
8.4.3 Marine Warranty
Aqualis Offshore provides independent third party review and approval of offshore projects on behalf of
underwriters. The staff has extensive experience in a wide range of offshore activities from simple marine
operations to complex and challenging offshore projects.
Typical activities include:
- Document reviews
- Verification of engineering calculations
- Suitability surveys of offshore marine spreads
- Approval of towages, heavy lifts and installations
- Subsea operations
- Decommissioning and removal of offshore structures
- Acting as Marine Advisors to oil companies and their contractors
8.4.4 Rig Moving
Aqualis Offshore offers a full range of rig moving support services and its teams are fully experienced with both
jack-up and floating units.
The company offers full engineering assessments for site specific location approvals for jack-ups and provides
marine warranty surveyors and rig movers / tow masters for offshore attendance during rig moves. The
following services are provided:
AQUALIS ASA
45
- Site specific rig deployment consultancy
- Pre-contract rig suitability engineering analyses
- Geotechnical Leg penetration analyses
- Site Specific Location Approvals
- Mooring analyses
- Marine Warranty Services
- Dry transportation approvals and consultancy
- Towage approvals
- Provision of Towmaster services
- Turnkey rig moves
- General rig moving consultancy
- Training courses
8.4.5 Construction Supervision
Aqualis Offshore provides site teams to work with the client throughout the construction or conversion of an
offshore asset. The project team monitors the project to ensure that it is carried out in accordance with the
contract, the specifications, client’s expectations, flag and class requirements.
Aqualis Offshore provides teams of engineers and inspectors of various disciplines to be utilized at different
stages of the project. In addition, dedicated planning and document control functions are provided throughout
the duration of the construction phase.
Key project control activities include:
- Development and implementation of project procedures
- Review of machinery and equipment purchase orders and specifications
- Development and implementation of project execution plans
- Monitoring of work progress and testing activity
- Monitoring of quality control of each activity throughout the construction
- Attendance at formal safety meetings
- Attendance at Factory Acceptance testing (FAT)
- Audits of subcontractor's facilities
- Attendance during sea trials and inclining experiments
- Reporting to the CLIENT on a weekly and monthly basis
- Tracking of site queries, observing safety policy, monitoring quality control measures
- Maintaining electrical & mechanical completion and commissioning records and database
- Monitoring and reporting on extras and credits
8.4.6 Dynamic Positioning
Aqualis Offshore provides an experienced multidisciplinary team of engineering and operational resources to
support the Dynamic Positioning (DP) industry. It aims to assist its clients to operate and validate according to
their units’ specific industrial mission. Furthermore, the Group aims to provide clients with independent
technical reviews to enhance safe operations. It can also provide analyses of cranes, bilge and ballast systems,
pipelay systems, and many more complex systems.
Aqualis Offshore’s DP services include:
- FME(C)A
- DP FMEA Proving & Annual Trials
- DP Design Review/ Redundancy Analysis
- DP Suitability/Condition Surveys
- DP Gap Analysis
- Development of WSOG & ASOG
- DP Incident Investigation
- DP Manuals & Procedures
- DP Operator Competence Assessment & Verification
- DP Project Management & Sea Trials Management.
- Planning for DP Conversions & Life Extensions
- CMID & OVID Surveys
AQUALIS ASA
46
- Witness FAT’s & CAT’s
8.4.7 Marine Consultancy
Aqualis Offshore aims to assist its clients in finding practical solutions to their marine operations and projects
and / or protect their interests when sub-contracting or making asset investments. Aqualis Offshore offers the
following services within marine consultancy:
- Provision of Towmasters and Rigmovers
- Provision of Marine Advisors
- Dry transportation consultancy and operations
- Pilotage operations
- Rig move procedures
- Suitability surveys
- Pre-charter audits / surveys
- Pre-purchase surveys
- Bollard pull certification
- Drafting and review of offshore project related procedures
- Mooring patterns
- Anchor handling procedures
- Witnessing equipment trials and tests
- DP inspections and audits
8.4.8 Technical due diligence services
As part of Aqualis Offshore’s construction services and prior to any involvement with the construction phase or
even during a construction project, it can assist with the due diligence process to provide the following services:
- Yard Audits
- Pre-contract evaluation
- Post contract evaluation
- Equipment procurement assessment
- Construction monitoring / site attendance
- Financial review and assessment
- Payment milestone audits
- Risk assessment and management
- Design review
Aqualis Offshore’s independence and in depth of experience of asset type and construction facilities allows it to
act as a trusted advisor on all aspects of any construction contract either pre- or post-execution.
8.5 FACTORS AFFECTING AQUALIS OFFSHORE
Aqualis Offshore’s business and operations will over time be affected by various factors including the
following:
- The level of activity and capital spending by oil & gas and offshore companies as it affects the demand
for Aqualis Offshore’s services
- Economic fluctuations
- Industry competition
- Political- and regulatory amendments
- Access to competent personnel, resources and customers
- Demand fluctuations related to seasonality
8.6 CUSTOMERS
Aqualis Offshore already has a diverse client base comprising the following types of companies: National Oil
Companies (“NOCs”) (e.g. Petrobras, ONGC, Statoil, Saudi ARAMCO), International Oil Companies (“IOCs”)
(e.g. Shell, Chevron Lundin, Newfield), rig owners (e.g. Seadrill, Vantage, Awilco, Hercules Offshore), vessel
owners (e.g. Tidewater, Posh Teresea, Ezion), underwriters (e.g. Zurich, Beazley, Gard, QBE), shipyards (e.g.
Samsung Heavy Industries, Lamprell), offshore contractors (e.g. Technip, Nexans, Fugro, Saipem, ENI) and
financial institutions (e.g. ABN-AMRO, Mantiq). Aqualis Offshore’s wide customer base means that, going
AQUALIS ASA
47
forward, its business model is, in general, not dependent upon any key customers or any key segment of the
industry since it is neither dedicated to new investment phases or day to day operations, but both. Nevertheless it
should be noted, as of the date of this Prospectus, the company, which is still in the early phases of developing
business, does have a construction monitoring contract which constitutes a significant part of its current backlog.
8.7 PRINCIPAL MARKETS AND COMPETITIVE POSITION
Aqualis Offshore’s strategy is, through its specialist marine and engineering consultancy services, to operate
through a growing network of global offices. As it expands worldwide, Aqualis Offshore pursues high growth
ambitions primarily focusing on developing economies and emerging markets.
Aqualis Offshore’s competitive landscape is affected by a consolidated global supply side. The main
competitors and global industry players include: DNV GL Group (merger between Det Norske Veritas and GL
Group, owner of GL Noble Denton), LOC Marine & Engineering Consultants, Global Maritime, Mathews
Daniel and Braemar Offshore.
8.8 ORGANISATION
8.8.1 Executive Management
The table below sets forth the members of Aqualis Offshore’s Executive Management as of the date of this
Prospectus.
Name Position Business address
David Wells Chief Executive Officer 150 Minories, EC3N 1LS London, UK
Christian Opsahl Chief Financial Officer Sjølyst Plass 2, 0278 Oslo, Norway
Dr. Bader Diab Director of Engineering and North America 15915 Katy Freeway #150, Houston TX 77024, US Phil Lenox Director Asia Pacific 51 Goldhill Plaza #12-08, Singapore 308900
Dr. Andrew Theophanatos Director South Americas Rua Teofilo Otoni, 15 sala 916 Centro, RJ, Brazil
Reuben Segal Director Middle East Office 609, SIT Tower, Dubai Silicon Oasis, Dubai Santosh George Group QHSE Manager Office 609, SIT Tower, Dubai Silicon Oasis, Dubai
Bjørn Håvard Brænden Director Norway Østre Kullerød 5, 3241 Sandefjord, Norway
Brief biographies of the members of the Executive Management
David Wells, Chief Executive Officer
David Wells is a Master Mariner and has more than 30 years of experience in the offshore sector with particular
focus on offshore operations, MWS and marine consultancy. He is a specialist on jack up operations, location
approvals and all aspects of rig moving. He has more recently been involved in senior management duties. Mr.
Wells is based in London.
Christian Opsahl, Chief Financial Officer
Christian Opsahl has extensive international finance, investment banking and private equity experience within
the global financial markets, together with industrial experience from companies servicing the offshore oil and
gas markets. Mr. Opsahl is based in Norway and London.
Dr. Bader Diab, Director of Engineering and North America
Dr. Bader Diab is a structural and global performance engineer. He has 25 years offshore engineering global
experience covering both shallow and deep water sectors with extensive structural design experience of
MODUs, mooring systems, motions, installation engineering and familiarity with shipyards. Dr. Bader Diab is
based in Houston.
Phil Lenox, Director of Asia Pacific
Phil Lenox is a structural engineer and has over 40 years of onshore/offshore experience with both contractors
and consultancies including conceptual design, detailed structural analysis and design through to construction
and installation. He specialises transportation and installation projects including use of HLVs, topside floatovers
and has extensive MWS experience. Mr. Lenox is based in Singapore.
Dr. Andrew Theophanatos, Director of South Americas
Dr. Andrew Theophanatos is a naval architect with over 30 years of experience in offshore engineering and
project management around the world and latterly in Brazil. He specialises on offshore engineering projects in
AQUALIS ASA
48
both consultancy and MWS capacities for services related to all recent deepwater field development projects.
Dr. Andrew Theophanatos is based in Rio de Janeiro, Brazil.
Reuben Segal, Director of Middle East
Reuben Segal is a naval architect and has 19 years of experience in the offshore and shipping sectors covering
both engineering design and ship surveying. He has extensive recent global business development experience
with focus on Design and Construction of offshore oil and gas assets including MODU and MOPU units from
FEED through to yard delivery. Mr. Segal is based in Dubai, UAE.
Santosh George, Group QHSE Manager
Santosh George specialist QHSE consultant and auditor with extensive risk analysis experience covering
shipyards and offshore assets together with implementation of Group Management systems and ISO
accreditations. Mr. George is based in UAE.
Bjørn Håvard Brænden, Director of Norway
Bjørn Håvard Brænden is a naval architect and marine engineer with 20 years of experience in engineering
design and as project manager for projects involving ships, semi submersibles, offshore service vessel, tankers
and conversions to FSU/FPSO including offshore construction and installation experience. Mr. Brændend is
based in Norway.
8.8.2 EMPLOYEES
As of the date of this Prospectus, Aqualis Offshore has 37 permanent employees across the following regions:
Singapore (9); UAE (9); Norway (10); Brazil (5); USA (3) and UK (1). In addition, it has seven independent
working contractors who are not permanently employed. During 2013, another 33 employees will commence
employment, out of which 23 will become full-time employees.
Aqualis Offshore’s business and prospects depend to a significant extent on the continued services of its key
personnel in its various business areas. Hence, Aqualis Offshore is dependent on its ability to retain key
personnel to ensure successful integration of new personnel into existing operations.
8.9 FINANCIAL INFORMATION
8.9.1 Introduction
The following financial figures have been derived from Aqualis Offshore’s unaudited financial statements as of,
and for the six month period ended 30 June 2013.
8.9.2 Accounting principles
The financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRS) as adopted by the EU and valid as of 31 December 2012.
AQUALIS ASA
49
8.9.3 Interim condensed consolidated income statement
Six months
ended 30 June
USD 1,000 2013
(unaudited)
Revenue........................................................................................................................................................... 313
Cost of sales .................................................................................................................................................... (598)
Gross loss ....................................................................................................................................................... (286)
Administration expenses ................................................................................................................................. (637)
Operating loss ................................................................................................................................................ (923)
Finance cost..................................................................................................................................................... (12)
Finance income ............................................................................................................................................... 1
Loss before tax ............................................................................................................................................... (935)
Taxation .......................................................................................................................................................... -
Non-controlling interest .................................................................................................................................. (19)
Loss for the period......................................................................................................................................... (954)
Source: Aqualis Offshore unaudited financial statements for the six months ended 30 June 2013
8.9.4 Balance sheet
USD 1,000 30.06.13
(unaudited)
ASSETS
Plant and equipment ........................................................................................................................................ 117
Goodwill ......................................................................................................................................................... 8
Total non-current assets ............................................................................................................................... 125
Trade and other receivables ............................................................................................................................. 557
Prepayments .................................................................................................................................................... 110
Other debtors ................................................................................................................................................... 390
Cash and cash equivalents ............................................................................................................................... 991
Total current assets ....................................................................................................................................... 2 048
Total assets ..................................................................................................................................................... 2 173
EQUITY AND LIABILITIES
Issued capital ................................................................................................................................................... 100
Retained earnings ............................................................................................................................................ (954)
Equity attributable to equity holders of parent .......................................................................................... (854)
Non-controlling interest .................................................................................................................................. 14
Total equity .................................................................................................................................................... (840)
Interest bearing loans and borrowings ............................................................................................................. 2 344
Total non-current liabilities .......................................................................................................................... 2 344
Accounts payable and accrued liabilities 644
Taxes and social securities ............................................................................................................................. 25
Total current liabilities ................................................................................................................................. 669
Total liabilities ................................................................................................................................................ 3 013
Total equity and liabilities ............................................................................................................................ 2 173
Source: Aqualis Offshore unaudited financial statements for the six months ended 30 June 2013
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9. THE GROUP FOLLOWING THE TRANSACTION
9.1 CHANGE OF NAME
In conjunction with the acquisition of Aqualis Offshore, the EGM held 8 October 2013 resolved to amend the
Company’s name from Clavis Pharma ASA to Aqualis ASA in order to better reflect the underlying operations
following the Transaction, which will consist of two business units; healthcare and marine and offshore services.
9.2 LEGAL STRUCTURE
The illustration below sets out the legal structure of the Company following the acquisition of Aqualis Offshore.
The combined company will consist of the holding company Aqualis ASA and the wholly-owned subsidiary,
Aqualis Offshore Ltd (the “Group”).
Aqualis ASA
Aqualis Offshore Ltd
100%
9.3 STRATEGY
The Transaction represents a change in strategic direction for the Company to include a new business area of
specialist marine and engineering consultancy services to the offshore oil and gas industry. The existing
pharmaceutical activities of Aqualis will remain as a separate business area within the Group.
Aqualis ASA
Healthcare Marine & Offshore
Business areas
Healthcare activities
The Group has a large portfolio of patents relating to the LVT-technology, as well as licensing agreements for
the potential development of the compounds CP-4033 and CP-4200, and the Group will try to maximize the
value of these assets by closely following the licensees’ development of potential drug candidates, and through
further out-licensing or sale of existing patents and patent applications. The Group will continue to review new
investment opportunities within the business segment to see whether further investments should be made in new
technologies and/or development projects.
Marine and offshore activities
The Group’s new marine and offshore activities will be carried out through Aqualis Offshore. Aqualis
Offshore’s target market is the offshore oil and gas and marine segments in which it focuses on high-end niche
consultancy. Aqualis Offshore’s strategy is, through its specialist marine and engineering consultancy services,
to operate through a growing network of global offices. As it expands globally, Aqualis Offshore pursues high
growth ambitions primarily focusing on developing economies and emerging markets. The Group’s strategy is
AQUALIS ASA
51
to expand the marine and offshore activities through the establishment of new offices globally and through a
significant increase in the number of employees, and through potential acquisitions of similar businesses. Please
see section 8.3 for a more detailed discussion of the strategic plans for Aqualis Offshore.
9.4 ORGANISATION
9.4.1 Board of Directors
There will be no changes to the Company’s Board of Directors following the Transaction. For further
information regarding the Board of Directors see section 11.1.
9.4.2 Executive Management
The table below sets forth the Executive Management following the Transaction.
Name of director Position Business address:
Gunnar Manum CEO Sjølyst Plass 2, 0278 Oslo, Norway
Christian Opsahl CFO Sjølyst Plass 2, 0278 Oslo, Norway David Wells CEO of Aqualis Offshore Ltd 150 Minories, EC3N 1LS London, UK
Ole Henrik Eriksen CBO Healthcare Sjølyst Plass 2, 0278 Oslo, Norway
For more information regarding the members of Aqualis’ Executive Management following the Transaction,
please see section 8.8.1 and 11.2.
9.5 SHARE CAPITAL
Following the Transaction, the Rights Issue and the Employee Offering as further described in section 5 and 6,
the Company’s total issued share capital will be NOK 116 261 030, divided into 116 261 030 Shares, each with
a nominal value of NOK 1.00. The Company will have one class of shares, equal in all respects. Each Share will
carry one vote and the rights attached to the Shares will be the same as those attached to the Company’s existing
Shares.
9.6 UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
9.6.1 General information and purpose of the unaudited pro forma consolidated financial information
On 27 September 2013, the Company announced that the Board of Directors of the Company had signed a final
share purchase agreement to acquire 100% of the shares in Aqualis Offshore for a consideration of NOK 70
million, to be settled through the issuance of 43 750 000 new shares in Aqualis at an issue price of NOK 1.60
per share. In connection with the issue of new shares to the shareholders of Aqualis Offshore, the Company will
carry out a fully underwritten rights issue of 33 755 515 shares at an issue price of NOK 1.60 per share.
The unaudited pro forma condensed financial information has been prepared to show how the acquisition of
Aqualis Offshore and the Rights Issue might have affected Aqualis’ financial position as of 30 June 2013 had it
occurred on the balance sheet date. The unaudited pro forma condensed income statement for the period 1
January 2013 to 30 June 2013 has been compiled as if the Transaction occurred on 1 January 2013. No pro
forma condensed financial information has been prepared for the year ended 2012, as Aqualis Offshore was
incorporated in December 2012. In connection with the acquisition, the Company will carry out a fully
underwritten rights issue of 33.7 million new shares at an issue price of NOK 1.6 per share (the Rights Issue).
The unaudited pro forma condensed financial information has been prepared for illustrative purposes only. The
pro forma adjustments, as described in more detail below, are based on available information and certain
assumptions. Because of its nature, the unaudited pro forma condensed financial information addresses a
hypothetical situation and, therefore, does not represent what the Combined Group’s actual financial position or
results of operation or the financial position had, if the transaction actually occurred on those dates. It also does
not represent the financial position or results for any future period. The unaudited pro forma financial
information must not be considered final or complete, as they may be amended in future publications of the
unaudited pro forma condensed information. Investors are cautioned not to place undue reliance on this
unaudited pro forma condensed financial information.
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9.6.2 Basis for preparation
The unaudited pro forma condensed financial information as of and for the six months period ended June 30,
2013 is compiled based upon the unaudited consolidated financials for the six months period ended June 30,
2013 for the Company and Aqualis Offshore.
The pro forma adjustments are made by the Company’s management based on currently available information
and certain assumptions. The pro forma adjustments relate to the effects of the Company’s purchase accounting
for Aqualis Offshore (see Section 9.6.3 – "Purchase Accounting") including the issue of new shares in
connection with the rights issue.
The Company has for the purposes of the pro forma financial information performed a preliminary purchase
price allocation for the acquisition as if the transaction has occurred. This allocation has formed the basis for the
presentation of the fair value adjustments for assets and liabilities in the pro forma statement. The final
allocation may significantly differ from this allocation as a result of e.g. changes to the value of the purchase
consideration due to changes to the Aqualis share price and the value for potential new sales contract that
Aqualis Offshore has entered into before the transaction has occurred.
The unaudited pro forma condensed financial information does not give effect to any (i) integration cost that
may be incurred as a result of the acquisition, (ii) synergies, cost savings or operating efficiencies that may
result from the acquisition; or (iii) restructuring costs that may be incurred to integrate the acquired activities.
The unaudited pro forma condensed financial information has been compiled based on accounting principles
consistent with those of the Company (IFRS as adopted by EU). Please refer to section 10.1 – "Accounting
Policies" for a description of the accounting policies of Aqualis. The Group will not adopt any new policies in
2013 as a result of the acquisition or otherwise, with the exception of IFRS 3 and IAS 27, which will be adopted
from 1 January 2013. The unaudited pro-forma financial information has been prepared under the assumption of
going concern.
The unaudited pro forma condensed financial information for the Company does not include all of the
information required for financial statements under IFRS, and should be read in conjunction with the historical
information of Aqualis.
The unaudited pro forma condensed financial information has been compiled in connection with the listing of
the shares of Aqualis ASA on Oslo Børs (Oslo Stock Exchange) to comply with the Norwegian Securities
Trading Act and the applicable EU-regulations including EU Regulation No 809/2004 pursuant to section 7-7 of
the Norwegian Securities Trading Act. This information is not in compliance with SEC Regulation S-X, and had
the securities been registered under the U.S. Securities Act of 1933, this unaudited pro forma financial
information, including the report by the auditor, would have been amended and/or removed from the Prospectus.
9.6.3 Purchase accounting
Aqualis will acquire 100% of the shares in Aqualis Offshore, and the consideration to the shareholders of
Aqualis Offshore will be shares in Aqualis. The acquisition will be accounted for as a business combination
under IFRS 3 by Aqualis. It has been assessed that Aqualis is the acquirer in this transaction mainly based on the
following: Firstly, it is Aqualis that issues its equity interests as consideration to the shareholders of Aqualis
Offshore in this transaction and secondly, the shareholders of Aqualis retains the majority voting rights in the
Group.
Aqualis Offshore's assets and liabilities will be measured at fair value as of the date of acquisition. Aqualis’
assets and liabilities will remain at historical cost or its existing book value. The Company has, for the purposes
of the pro forma consolidated financial information presented below, performed a preliminary purchase price
allocation and estimated the fair value of Aqualis Offshore’s assets and liabilities. The consideration for the
Acquisition is NOK 70 million, with the issue of 43.8 million New Shares at a share price of NOK 1.60 per
share. The share price of NOK 1.60 is based on the approximate value of the book value of the net assets of
Aqualis at the time of entering into Letter of Intent to acquire Aqualis Offshore, which was approximately in
line with the market capitalization of the Company in the period prior to the announcement of the possible
acquisition. The share price of NOK 1.60 will be used for the formal share issue and capital increase
(“tingsinnskudd”). However, for accounting purposes, the actual share price on the date of closing the
acquisition will be used to calculate the purchase price for the capital increase. For the purpose of the pro forma
consolidated financial information presented in this Prospectus, an estimated share price of NOK 1.90 has been
used for calculating the purchase price, which reflects the current share price adjusted for the dilutive effects of
the share issues in connection with the Transaction and the Rights Issue. The final allocation may differ from
AQUALIS ASA
53
this preliminary allocation and this could materially have affected the pro forma income statement and the
presentation in the pro forma statement of financial position.
Aqualis Offshore
(unaudited)
Fair value adjustments
(unaudited)
Fair value of assets and
liabilities (unaudited)
NOK 1,000
30.06.2013
30.06.2013
30.06.2013
ASSETS
Plant and equipment ........................................................................................................................................ 705 - 705
Goodwill ......................................................................................................................................................... 48 89 450 89 498
Total non-current assets ............................................................................................................................... 753 89 450 90 203
Trade receivables ............................................................................................................................................ 2 736 - 2 736
Other receivables ............................................................................................................................................. 3 633 - 3 633
Cash and cash equivalents ............................................................................................................................... 5 976 - 5 976
Total current assets ....................................................................................................................................... 12 346 - 12 346
Total assets ..................................................................................................................................................... 13 099 89 450 102 548
LIABILITIES
Deferred revenue ............................................................................................................................................. - - -
Borrowings ...................................................................................................................................................... 14 129 - 14 129
Other long-term liabilities ............................................................................................................................... - - -
Total non-current liabilities .......................................................................................................................... 14 129 - 14 129
Trade payables ................................................................................................................................................ 959 - 959
Deferred revenue ............................................................................................................................................. 2 922 - 2 922
Other current liabilities .................................................................................................................................... 151 1 180 1 331
Total current liabilities ................................................................................................................................. 4 032 - 5 212
Total liabilities ............................................................................................................................................... 18 161 1 180 19 341
Total net assets............................................................................................................................................... (5 062) 88 270 83 207
Non-controlling interest .................................................................................................................................. (82) - (82)
Total net assets attributable to Aqualis ....................................................................................................... (5 145) - 70 000 (5 145) - 83 125
The preliminary purchase price allocation identified fair value adjustments on other current-liabilities and
goodwill only. In addition, there will be an adjustment to the final purchase price allocation considering the net
loss in Aqualis Offshore from 1 July and until time of control.
AQUALIS ASA
54
9.6.4 Unaudited pro forma income statement for the six months ended 30 June 2013
Aqualis
(unaudited)
Aqualis
Offshore
(unaudited)
Pro forma
adjustments
(unaudited)
Notes to the
pro forma
adjustments
(unaudited)
Pro forma
consolidated
(unaudited)
NOK 1,000 2013
01.01-30.06 2013
01.01-30.06
2013
01.01-30.06
2013
01.01-30.06
Government grants .......................................................................................................................................... 743 - 743
Operating revenue ........................................................................................................................................... 1 813 1 813
Other revenue .................................................................................................................................................. 49 49
Total operating income ................................................................................................................................. 792 1 813 2 605
Payroll and payroll related costs ...................................................................................................................... 26 262 4 450 30 712
Depreciation & impairment ............................................................................................................................. 2 102 24 2 126
Other operating expenses ................................................................................................................................ 56 414 2 688 1 200 (1) 60 302
Total operating expenses ................................................................................................................................. 84 778 7 162 1 200 (1) 93 140
Operating profit/(loss) ................................................................................................................................... (83 986) (5 349) (1 200) (1) (90 535)
Financial income ............................................................................................................................................. 4 865 5 4 870
Financial expenses........................................................................................................................................... 1 465 72 1 537
Loss before tax ............................................................................................................................................... (80 586) (5 416) (1 200) (87 202)
Income tax expense ......................................................................................................................................... - - -
Non-controlling interest .................................................................................................................................. (110) (110)
Profit/(loss) for the period ............................................................................................................................. (80 586) (5 526) (1 200) (87 312)
Total comprehensive income ........................................................................................................................ (80 586) (5 526) (1 200) (87 312)
Note: The income statement for Aqualis Offshore has been translated from USD to NOK based on a foreign exchange rate NOK/USD of 5.79, which is based on Norges Bank’s historical average exchange rate for the first six months 2013.
AQUALIS ASA
55
9.6.5 Unaudited pro forma balance sheet as of 30 June 2013
Aqualis
(unaudited)
Aqualis
Offshore
(unaudited)
Pro forma
adjustments
(unaudited)
Notes to the
pro forma
adjustments
(unaudited)
Pro forma
consolidated
(unaudited)
NOK 1,000
30.06.2013
30.06.2013
30.06.2013
30.06.2013
ASSETS
Plant and equipment ........................................................................................................................................ - 705 705
Goodwill ......................................................................................................................................................... - 48 93 725 (2) 93 773
Total non-current assets ............................................................................................................................... - 753 93 725 (2) 94 478
Trade receivables ............................................................................................................................................ 960 2 736 3 696
Other receivables ............................................................................................................................................. 6 059 3 633 9 692
Cash and cash equivalents ............................................................................................................................... 86 649 5 976 50 010 (3) 142 635
Total current assets ....................................................................................................................................... 93 668 12 345 50 010 (3) 156 023
Total assets ..................................................................................................................................................... 93 668 13 098 143 735 250 501
EQUITY AND LIABILITIES
Share capital .................................................................................................................................................... 33 756 603 76 903 (4) 111 262
Share premium ............................................................................................................................................... 107 778 - 43 704 (4) 151 482
Other paid-in capital ........................................................................................................................................ (1 450) - 13 125 (4) 11 675
Loss for the period........................................................................................................................................... (80 586) (5 748) 4 305 (4) (82 029)
Equity attributable to equity holder
of the parent ...............................................................................................................................................
59 498 (5 145) 138 037 192 390
Non-controlling interest .................................................................................................................................. 82 (-82) (5) -
Total equity .................................................................................................................................................... 59,498 (5 063) 137 955 192 390
Deferred revenue ............................................................................................................................................. - - -
Borrowings ...................................................................................................................................................... - 14 129 14 129
Other long-term liabilities ............................................................................................................................... - - -
Total non-current liabilities .......................................................................................................................... - 14 129 - 14 129
Trade payables ................................................................................................................................................ 3 730 959 4 689
Deferred revenue ............................................................................................................................................. - 2 922 2 922
Other current liabilities .................................................................................................................................... 30 440 151 5 780 (6) 36 371
Total current liabilities ................................................................................................................................. 34 170 4 032 5 780 43 982
Total liabilities ................................................................................................................................................ 34 170 18 161 5 780 58 111
Total equity and liabilities ............................................................................................................................ 93 668 13 098 143 735 250 501
Note: The balance sheet for Aqualis Offshore has been translated from USD to NOK based on a foreign exchange rate NOK/USD of 6.03,
which is based on Norges Bank’s historical exchange rate as of 30 June 2013.
9.6.6 Notes to the unaudited pro forma financial information
Pro forma adjustments:
(1) The pro forma adjustment to other operating expenses for the six month ended 30 June 2013 represents
NOK 1.2 million (ex VAT) in estimated transaction costs for the acquisition. There is no tax effect
related to this pro forma adjustment as the Company currently is not in a tax position and has not
recorded a deferred tax asset related to tax losses carried forward. This pro forma adjustment will not
have a continuing impact.
(2) The acquisition of Aqualis Offshore is considered to be a business combination under IFRS 3 and
consequently all assets acquired and liabilities assumed are accounted for at its fair value at the
acquisition date. Based on a preliminary purchase price allocation, it is assessed that the carrying
amount of assets and liabilities in Aqualis Offshore represents its fair value at the acquisition date, with
AQUALIS ASA
56
the exception of other current liabilities which has been increased by NOK 1.2 million to recognize the
estimated earn-out payable in relation to the Aqualis Offshore AS acquisition (ref. section 14.2.2 for
further comments). Based on the preliminary purchase price allocation, Aqualis has allocated fair value
adjustments as described in section 9.6.3 (i.e. goodwill of NOK 89.5 million). In addition, the
Company has made a pro forma adjustment to goodwill of NOK 4.3 million (increase) to reflect the
estimated net loss of Aqualis Offshore for the period from 1 July to the expected acquisition date, net
of non-controlling interest (ref. below). In accordance with IFRS, goodwill is not amortized but
assessed for impairment; no impairment has been recorded. These pro forma adjustments will have
continuing impact.
(3) Adjustments to cash and cash equivalents relate to the pro forma effect of the fully underwritten rights
issue of NOK 51.2 million (net proceeds), less NOK 1.2 million (ex VAT) in estimated transactions
costs in connection with the acquisition as described in note 1 above. No interest income has been
included in the unaudited pro forma income statement. These pro forma adjustments will have
continuing impact.
(4) Since Aqualis is the acquiring party, the shareholders' equity in Aqualis Offshore amounting to NOK
0.6 million will be eliminated upon consolidation, while the par value of the consideration shares
issued to the shareholders of Aqualis Offshore of NOK 43.8 million and the par value of the fully
underwritten rights issue of NOK 33.8 million increases the share capital by NOK 77.5 million.
Changes to share premium of NOK 43.7 million represents the share premium of NOK 0.6 per share
on the two before mentioned equity issues, net of estimated transaction costs of NOK 2.8 million (ex.
VAT). There is no tax effect related to the adjustment for transactions costs as the Company currently
is not in a tax position and has not recorded a deferred tax asset related to tax losses carried forward.
The adjustment to other paid-in capital is the difference between the agreed purchase price of NOK 70
million (based on a share price of NOK 1.60) and the estimated purchase price for accounting purposes
of NOK 83.1 million (based on an estimated share price of NOK 1.90 at closing date). The adjustment
to the loss for the period is the estimated transaction costs for the acquisition of NOK 1.2 million (ex.
VAT) million and the elimination of the estimated loss in Aqualis Offshore on consolidation, including
a negative minority interest as noted in (5).
(5) The pro forma consolidated non-controlling interest is negative NOK 0.2 million, which has been
offset against loss for the period.
(6) The pro forma adjustment to other current liabilities represents a NOK 4.6 million estimated net loss of
Aqualis Offshore for the period from 1 July to the expected acquisition date, and the estimated earn-out
payable of NOK 1.2 million noted in (2).
Some key accounting principles of Aqualis are not described in the Company’s latest annual report as these
were not considered relevant at the time:
Basis for consolidation: Subsidiaries are consolidated from the date of acquisition, being the date the Company
obtains control and continue to be consolidated until the date when such control ceases. The financial statements
of the subsidiaries are prepared for the same reporting period as the parent company, using consistent
accounting policies. All intra-group balances, transactions, unrealised gains and losses resulting from intra-
group transactions are eliminated in full.
Business combinations and goodwill: Business combinations are accounted for using the acquisition method.
The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition
date fair value and the amount of any non-controlling interest in the acquiree. The Company measures the non-
controlling interest in the acquiree at the proportionate share of the acquiree’s identifiable net assets (net
liability). Acquisition-related costs are expensed as incurred and included in operating expenses. When the
Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the
amount recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
AQUALIS ASA
57
9.6.7 Auditor’s assurance report on the unaudited pro forma condensed financial information
Ernst & Young AS’ assurance report on the unaudited pro forma financial information is attached as Appendix
F to this Prospectus.
AQUALIS ASA
58
10. FINANCIAL INFORMATION
Annual reports including audited historical financial information and audit reports in respect of 2012, 2011 and
2010 together with the financial reports for the first six months of 2013 and 2012 for the Company may be
found at the Company’s website, www.aqualis.no. The financial statements for 2012, 2011 and 2010 have been
audited by Ernst & Young AS, the Company’s statutory auditor, and the audit reports were issued without any
qualifications. The interim financial reports for the second quarter 2013 and 2012 are unaudited.
10.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRS) as adopted by the EU and valid as of 31 December 2012. The IFRS principles have been applied
consistently for 2012, 2011 and 2010, both for the annual and interim reports. Please see 2012 Annual Report
page 30 to 34 for the Company’s accounting policies, incorporated by reference to this Prospectus. The
Company’s significant accounting policies can be found at the following link:
http://www.aqualis.no/investors/reports-and-presentations/annual-reports
10.2 HISTORICAL FINANCIAL INFORMATION
The following financial information has been derived from the Company’s audited financial statements as of,
and for each of the three years ended 31 December 2012, 2011 and 2010 and from the unaudited condensed
financial statements for the three and six month periods ended 30 June 2013 and 2012.
The selected financial information set forth below should be read in conjunction with the Company’s published
financial statements and its accompanying notes.
The information incorporated by reference in this Prospectus shall be read in connection with the cross-
reference list set out in section 16.2.
10.2.1 Statement of comprehensive income
The Company’s income statements for the three years ended 31 December 2012, 2011 and 2010 and the three
and six month periods ended 30 June 2013 and 2012 are set out below.
Three months ended 30
June
Six months ended 30
June
Year ended 31 December
NOK 1,000 2013
(unaudited) 2012
(unaudited) 2013
(unaudited) 2012
(unaudited) 2012
(audited) 2011
(audited) 2010
(audited)
Revenue........................................................................................................................................................... 18 10 135 49 20 261 77 271 40 542 25 393
Government grants .......................................................................................................................................... 183 559 743 3 504 7 710 2 910 4 173
Total operating income ................................................................................................................................. 201 10 694 792 23 765 84 981 43 452 29 566
Payroll and payroll related costs ...................................................................................................................... 11 232 11 851 26 262 27 773 56 458 54 628 45 232
Depreciation .................................................................................................................................................... 1 958 64 2 102 128 313 36 -
Other operating costs ....................................................................................................................................... (4 759) 29 395 56 414 55 860 132 204 150 720 103 567
Operating loss ................................................................................................................................................ (8 230) (30 616) (83 986) (59 996) (103 994) (161 932) (119 233)
Finance income ............................................................................................................................................... 3 414 2 934 4 865 6 216 11 246 9 389 6 716
Finance costs ................................................................................................................................................... 720 1 519 1 465 2 144 2 958 3 755 3 331
Loss before tax ............................................................................................................................................... (5 536) (29 201) (80 586) (55 924) (95 706) (156 298) (115 848)
Income tax expense ......................................................................................................................................... - - - - - - -
Loss for the period......................................................................................................................................... (5 536) (29 201) (80 586) (55 924) (95 706) (156 298) (115 848)
Basic and diluted earnings per share (NOK)
(0.2) (0.9) (2.4) (1.7) (2.9) (5.1) (4.5)
Source: The Company’s Q2 2013 interim financial report and annual reports 2012, 2011 and 2010.
AQUALIS ASA
59
10.2.2 Statement of financial position
Set out below is the Company’s statement of financial position for the three years ended 31 December 2012,
2011 and 2010, and for the three and six months period ended 30 June 2013 and 2012.
NOK 1,000 30.06.13
(unaudited) 30.06.12
(unaudited) 31.12.12
(audited) 31.12.11
(audited) 31.12.10
(audited)
ASSETS
Production and lab equipment ......................................................................................................................... - 1 117 2 324 1 245 -
Total non-current assets ............................................................................................................................... - 1 117 2 324 1 245 -
Trade receivables ............................................................................................................................................ 960 44 - 19 1 270
Other receivables ............................................................................................................................................. 6 059 7 401 11 095 6 115 8 836
Cash and cash equivalents ............................................................................................................................... 86 649 299 581 222 620 215 304 348 609
Total current assets ....................................................................................................................................... 93 668 307 026 233 715 221 438 358 715
Total assets ..................................................................................................................................................... 93 668 308 143 236 039 222 683 358 715
EQUITY AND LIABILITIES
Share capital .................................................................................................................................................... 33 756 33 756 33 756 30 568 29 762
Share premium reserve .................................................................................................................................... 107 778 191 034 190 955 175 608 254 732
Other paid-in capital ........................................................................................................................................ (1 450) 5 853 12 529 12 155 10 569
Loss for the period........................................................................................................................................... (80 586) (55 924) (95 706) (156 298) (115 848)
Total equity .................................................................................................................................................... 59 498 174 719 141 534 62 033 179 215
Deferred revenue ............................................................................................................................................. - 36 856 - 36 856 77 063
Borrowings ...................................................................................................................................................... - 20 000 21 642 20 000 20 000
Other non-current liabilities ............................................................................................................................ - - - - 685
Total non-current liabilities .......................................................................................................................... - 56 856 21 642 56 856 97 748
Trade payables ................................................................................................................................................ 3 730 6 810 15 418 9 232 7 315
Deferred revenue ............................................................................................................................................. - 20 103 - 40 207 40 207
Other current liabilities .................................................................................................................................... 30 440 49 655 57 445 54 355 34 230
Total current liabilities ................................................................................................................................. 34 170 76 568 72 863 103 794 81 752
Total liabilities ................................................................................................................................................ 34 170 133 424 94 505 160 650 179 500
Total equity and liabilities ............................................................................................................................ 93 668 308 143 236 039 222 683 358 715
Source: The Company’s Q2 2013 interim financial report and annual reports 2012, 2011 and 2010.
10.2.3 Cash flow statement
The table below summarises the Company’s statement of cash flow for the three years ended 31 December
2012, 2011 and 2010 and for the three and six months ended 30 June 2013 and 2012.
AQUALIS ASA
60
Three months ended 30
June
Six months ended 30
June
Year ended 31 December
NOK 1,000 2013
(unaudited) 2012
(unaudited) 2013
(unaudited) 2012
(unaudited) 2012
(audited) 2011
(audited) 2010
(audited)
Cash flow from operating activities
Loss before income tax.................................................................................................................................... (5 536) (29 201) (80 586) (55 924) (95 706) (156
298) (115 848)
Non-cash adjustment to reconcile profit
before tax to cash flow:
Estimated value of employee share options ..................................................................................................... (4 758) 2 858 (1 450) 5 853 12 529 12 155 10 569
Loss on disposal of plant & equipment ........................................................................................................... 30 - 30 -
Depreciation .................................................................................................................................................... 1 958 64 2 102 128 313 36 -
Unrealised foreign currency (gains)/losses ...................................................................................................... (467) 182 (472) 186 133 79 1 265
Changes in working capital:
Changes in trade receivables and trade creditors ........................................................................................................................................................
(4 945) (491) (12 648) (2 447) 6 205 3 168 4 493
Changes in deferred income ............................................................................................................................ - (10 052) - (20 104) (77 063) (40 207) 35 431
Changes in other accruals ................................................................................................................................ (48 196) 313 (21 650) (5 986) (645) 29 598 13 225
Net interest (income/expense) ......................................................................................................................... (2 481) (1 542) (3 431) (4 130) (8 075) (6 585) (4 229)
Net cash flow from operating activities ........................................................................................................ (64 395) (37 869) (118 105) (82 424) (162
309)
(158
054)
-55 094
Cash flow from investing activities
Proceeds for sale of plant & equipment ........................................................................................................... 193 - 193 -
Purchase of fixed assets ................................................................................................................................... - - - - (1 393) (1 281) -
Interest received .............................................................................................................................................. 876 2 029 2 307 5 107 10 069 8 504 5 586
Net cash flow from investing activities ......................................................................................................... 1 069 2 029 2 500 5 107 8 676 7 223 5 586
Cash flow from financing activities
Proceeds from share issue ............................................................................................................................... - - - 163 141 163 141 21 000 154 000
Proceeds from exercise of share options .......................................................................................................... - 4 195 - 6 365 6 365 541 9 947
Transaction costs on share issue ...................................................................................................................... - - - (6 749) (6 828) (2 017) (6 378)
Proceeds from borrowings ............................................................................................................................... - - - - - - 20 000
Repayment of borrowings ............................................................................................................................... (20 000) - (20 000) -
Interest paid ..................................................................................................................................................... (357) (487) (838) (977) (1 596) (1 919) (1 357)
Net cash flow from financing activities ........................................................................................................ (20 357) 3 708 (20 838) 161 780 161 082 17 605 176 212
Net change in cash and cash equivalents ......................................................................................................... (83 683) (32 132) (136 443) 84 463 7 449 (133
226) 126 704
Cash and cash equivalents beginning
period ............................................................................................................................................................
169 865 331 895 222 620 215 304 215 304 348 609 223 170
Net foreign exchange difference ...................................................................................................................... 467 (182) 472 (186) 8133) (79) (1 265)
Cash and cash equivalents end period ......................................................................................................... 86 649 299 581 86 649 299 581 222 620 215 304 348 609
Source: The Company’s Q2 2013 interim financial report and annual reports 2012, 2011 and 2010
AQUALIS ASA
61
10.2.4 Statement of changes in equity
The table below shows the audited reconciliation of equity as of 31 December 2012, 2011 and 2010.
NOK 1,000 Share capital Share
premium
reserve
Other paid-in
capital
Retained
earnings Total equity
Equity as at 01.01.2010.................................................................................................................................. 24 976 101 949 - - 126 925
Total comprehensive income ........................................................................................................................... - - - (115 848) (115 848)
Issue of share capital:
Private placement .......................................................................................................................................... 4 400 149 600 - - 154 000
Exercise of share options ............................................................................................................................... 386 9 561 - - 9 947
Transaction costs ........................................................................................................................................... - (6 378) - - (6 378)
Total issue of share capital .............................................................................................................................. 4 786 152 783 - - 157 569
Share-based payment transactions ................................................................................................................... - - 10 569 - 10 569
Equity as at 31.12.2010.................................................................................................................................. 29 762 254 732 10 569 (115 848) 179 215
Equity as at 01.01.2011.................................................................................................................................. 29 762 254 732 10 569 (115 848) 179 215
Allocation of prior year loss ............................................................................................................................ - (105 279) (10 569) 115 848 -
Total comprehensive income ........................................................................................................................... - - - (156 298) (156 298)
Issue of share capital:
Private placement .......................................................................................................................................... 174 7 263 - - 7 437
Subsequent issue ........................................................................................................................................... 600 20 400 - - 21 000
Exercise of share options ............................................................................................................................... 32 509 - - 541
Transaction costs ............................................................................................................................................. - (2 017) - - (2 017)
Total issue of share capital .............................................................................................................................. 806 26 155 - - 26 961
Share-based payment ....................................................................................................................................... - - 12 155 - 12 155
Equity as at 31.12.2011.................................................................................................................................. 30 568 175 608 12 155 (156 298) 62 033
Equity as at 01.01.2012.................................................................................................................................. 30 568 175 608 12 155 (156 298) 62 033
Allocation of prior year loss ............................................................................................................................ - (144 143) (12 155) 156 298 -
Total comprehensive income ........................................................................................................................... - - - (95 706) (95 706)
Issue of share capital:
Private placement .......................................................................................................................................... 2 862 160 279 - - 163 141
Subsequent issue ........................................................................................................................................... - - - - -
Exercise of share options ............................................................................................................................... 326 6 039 - - 6 365
Transaction costs ............................................................................................................................................. - (6 828) - - (6 828)
Total issue of share capital .............................................................................................................................. 3 188 159 490 - - 162 678
Share-based payment ....................................................................................................................................... - - 12 529 - 12 529
Equity as at 31.12.2012.................................................................................................................................. 33 756 190 955 12 529 (95 706) 141 534
Source: The Company’s annual reports 2012, 2011 and 2010
AQUALIS ASA
62
The table below shows the unaudited reconciliation of equity as of 30 June 2013 and 2012.
NOK 1,000 Share capital Share
premium
reserve
Other paid-in
capital
Retained
earnings Total equity
Equity as at 01.01.2012.................................................................................................................................. 30 568 175 608 12 155 (156 298) 62 033
Allocation of prior year loss ............................................................................................................................ (144 143) (12 155) 156 298
Total comprehensive income ........................................................................................................................... - - - (55 924) (55 924)
Issue of share capital:
Private placement .......................................................................................................................................... 2 862 160 279 - - 163 141
Exercise of share options ............................................................................................................................... 326 6 039 - - 6 365
Transaction costs ........................................................................................................................................... - (6 749) - - (6 749)
Total issue of share capital .............................................................................................................................. 3 188 159 569 - - 162 757
Share-based payment transactions ................................................................................................................... - - 5 853 - 5 853
Equity as at 30.06.2012.................................................................................................................................. 33 756 191 034 5 853 (55 924) 174 719
Equity as at 01.01.2013.................................................................................................................................. 33 756 190 955 12 529 (95 706) 141 534
Allocation of prior year loss ............................................................................................................................ (83 177) (12 529) 95 706
Total comprehensive income ........................................................................................................................... - - - (80 586) (80 586)
Issue of share capital:
Private placement .......................................................................................................................................... - - - - -
Subsequent issue ........................................................................................................................................... - - - - -
Exercise of share options ............................................................................................................................... - - - - -
Transaction costs ............................................................................................................................................. - - - - -
Total issue of share capital .............................................................................................................................. - - - - -
Share-based payment ....................................................................................................................................... - - (1 450) - (1 450)
Equity as at 30.06.2013.................................................................................................................................. 33 756 107 778 (1 450) (80 586) 59 498
Source: The Company’s Q2 2013 interim financial report
10.3 AUDITOR
The Company’s auditor since 2003 has been Ernst & Young AS, Dronning Eufemias gate 6, 00154 Oslo,
Norway. The Company’s auditor is member of The Norwegian Institute of Public Accountants.
Ernst & Young AS has audited the Company’s annual accounts for the financial years 2012, 2011 and 2010, and
the Auditor’s reports for these three years were issued without qualifications. Ernst & Young AS has issued an
Independent Assurance report on the unaudited pro forma condensed financial information included as
Appendix F. Ernst & Young AS has not audited, reviewed or produced any report on any other information
provided in this Prospectus.
10.4 SEGMENT REPORTING
Most of the Company's resources have historically been allocated to the development of new potential anti-
cancer drugs. All the R&D projects have been based on the same proprietary technology (LVT), and are within
the cancer segment. The Company's activities are therefore organised as one operating unit for internal reporting
purposes.
10.5 MANAGEMENT DISCUSSION AND ANALYSIS
10.5.1 The three and six month periods ended 30 June 2013 and 2012
Profit and loss
Total operating income amounted to NOK 0.2 million in the second quarter 2013, compared to NOK 10.7
million in the same quarter last year. The operating income for the first six months of 2013 was NOK 0.8
million, compared to NOK 23.8 million for the same period last year. The operating income for the quarter
mainly consists of government grants. In the second quarter last year the operating income also consisted of
AQUALIS ASA
63
deferred up-front fees recognised as income. The total remaining balance of deferred up-front fees, which
related to the licensing agreement with Clovis Oncology, was recognised as income in 2012.
Total operating expenses were NOK 8.4 million in the second quarter, compared to NOK 41.3 million in the
same quarter last year. Other operating expenses, including R&D, were positive NOK 4.7 million in the second
quarter, compared to NOK 29.4 million last year. The significant lower costs in the second quarter this year,
compared to last year, reflect the closure of the Company’s R&D activities in the second quarter 2013. A
reversal of previously accrued R&D expenses of NOK 14 million, relating to the closure of the CLAVELA
study resulted in a positive amount of other operating expenses for the quarter. The total operating expenses for
the first six months of 2013 were NOK 84.8 million, compared to NOK 83.8 million for the same period last
year.
Net financial income was NOK 2.7 million in the second quarter 2013, compared to net financial income of
NOK 1.4 million in the same quarter last year. The net financial income consists mainly of interest earned on
money market funds and bank deposits, net of interest payable on a long-term loan from Innovation Norway.
The long-term loan from Innovation Norway was repaid in June 2013, resulting in a reversal of the premium
payable at maturity in 2016, and accrued to date, of NOK 1.9 million.
The Company incurred a net loss of NOK 5.5 million for the second quarter 2013, compared to a net loss of
NOK 29.2 million in the second quarter 2012. The net loss for the first six months of 2013 was NOK 80.6
million, compared to NOK 55.9 million in the same period last year.
Balance sheet
Total assets amounted to NOK 93.7 million as of 30 June 2013, compared to total assets of NOK 308.1 million
as of 30 June 2012. Cash and cash equivalents amounted to NOK 86.6 million as of 30 June 2013, compared to
NOK 299.6 million at 30 June 2012.
Cash flow
The Company had a net negative cash flow of NOK 83.7 million for the second quarter 2013, compared to a net
negative cash flow of NOK 32.1 million in the second quarter of 2012. The net cash flow for the first six months
of 2013 was negative NOK 136.4 million, compared to positive NOK 84.5 million in the same period last year,
after net proceeds from a private placement of new shares of NOK 156.4 million in January 2012.
10.5.2 Financial year 2012
Profit and loss
Total operating income amounted to NOK 85.0 million in 2012, compared to NOK 43.5 million for 2011. The
operating income mainly consists of deferred up-front fees recognised as income, as well as government grants.
Following the decision by Clovis Oncology and Aqualis to terminate all development work on CP-4126, the
Company has no further development commitments in relation to the non-refundable up-front fees received
from Clovis Oncology in 2009 and 2010, and the total balance of deferred up-front fees was recognised as
income during 2012. The amount recognised during 2012 was NOK 77.1 million, compared to NOK 40.2
million in 2011.
Total operating costs for 2012 were NOK 189.0 million, of which R&D costs amounted to NOK 106.9 million.
The corresponding number was NOK 205.4 million in 2011, of which R&D costs amounted to NOK 136.2
million. The decrease in R&D costs is largely a result of no material costs incurred on the development of CP-
4126 and CP-4200 during 2012.
Net financial income for 2012 was NOK 8.3 million, compared to NOK 5.6 million in 2011. The net financial
income consists of interest earned on money market funds and bank deposits, net of interest on long-term loans
and a minor net foreign exchange loss.
The Company incurred no tax and the net loss amounted to NOK 95.7 million for 2012, compared to a net loss
of NOK 156.3 million in 2011.
Balance sheet
At 31 December 2012, total assets amounted to NOK 236.0 million and the Company had interest-bearing debt
of NOK 21.6 million, all of which were long-term. This compares to total assets of NOK 222.7 million at the
end of 2011, and the reduction mainly reflects the investments in R&D and other operating expenses during
2012. Cash and cash equivalents amounted to NOK 222.6 million at 31 December 2012, representing 94% of
total assets.
AQUALIS ASA
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As of 31 December 2012, total equity amounted to NOK 141.5 million, compared to NOK 62.0 million at the
end of 2011. The equity ratio at year end was 60%, compared to 28% at the end of the previous year.
Cash flow
The Company’s net cash outflow from operating activities amounted to NOK 162.3 million in 2012, compared
to a net cash outflow of NOK 158.1 million in 2011. In early 2012 the Company carried out a private placement
of NOK 163.1 million. This contributed to the net cash flow from financing activities of NOK 162.1 million in
2012, compared to a net cash flow from financing activities of NOK 17.6 million in 2011. Interest received on
cash deposits and money market funds resulted in a total cash flow from investing activities of NOK 8.7 million
in 2012, compared to NOK 7.2 million in 2011. Cash and cash equivalents at 31 December 2012 were NOK
222.6 million, compared to NOK 215.3 million at 31 December 2011.
10.5.3 Financial year 2011
Profit and loss
Total operating income amounted to NOK 43.5 million in 2011, of which the recognition of deferred revenue
accounted for NOK 40.2 million. The corresponding figures for 2010 were NOK 29.6 million and NOK 24.1
million, respectively. Total operating costs for 2011 were NOK 205.4 million, of which R&D costs amounted to
NOK 136.2 million. The corresponding number was NOK 148.8 million in 2010, of which R&D costs
amounted to NOK 80.8 million. The increase is largely a result of costs incurred on the CLAVELA trial that
started recruiting patients in mid-2010, as well as CMC (chemical, manufacturing & control) work for
elacytarabine.
Net financial income for 2011 was NOK 5.6 million, compared to NOK 3.4 million in 2010. The net financial
income consists of interest earned on money market funds and bank deposits, net of interest on long-term loans
and a minor net foreign exchange loss.
The Company incurred no tax and the net loss amounted to NOK 156.3 million for 2011, compared to a net loss
of NOK 115.8 million in 2010.
Balance sheet
At 31 December 2011, total assets amounted to NOK 222.7 million and the Company had interest-bearing debt
of NOK 20.0 million. This compares to total assets of NOK 358.7 million at the end of 2010, and the reduction
mainly reflects the investments in R&D and other operating expenses during 2011. Cash and cash equivalents
amounted to NOK 215.3 million at 31 December 2011, representing 97% of total assets. As of 31 December
2011, total equity amounted to NOK 62.0 million, compared to NOK 179.2 million at the end of 2010. The
equity ratio at year end was 28%, compared to 50% at the end of the previous year.
Cash flow
The Company’s net cash outflow from operating activities amounted to NOK 158.1 million in 2011, compared
to a net cash outflow of NOK 55.1 million in 2010. In early 2011 the Company carried out a share offering of
NOK 21 million, directed at those shareholders that did not participate in the private placement of NOK 154
million completed at the end of 2010. This contributed to the net cash flow from financing activities of NOK
17.6 million in 2011, compared to a net cash flow from financing activities of NOK 176.2 million in 2010.
Interest received on cash deposits and money market funds resulted in a total cash flow from investing activities
of NOK 7.2 million in 2011, compared to NOK 5.6 million in 2010. Cash and cash equivalents at 31 December
2011 were NOK 215.3 million, down from NOK 348.6 million at 31 December 2010.
10.5.4 Financial year 2010
Profit and loss
Total operating income amounted to NOK 29.6 million in 2010, of which the recognition of deferred revenue
accounted for NOK 24.1 million. The corresponding figures for 2009 were NOK 7.6 million and NOK 1.7
million, respectively. During 2010 the Company received an up-front fee of NOK 59.5 million, which for
accounting purposes has been deferred and will be recognised as income over a period of 37 months, starting in
November 2010. Total operating costs for 2010 were NOK 148.8 million, which was in line with guidance
communicated to the market in early 2010. The corresponding number was NOK 90.3 million in 2009. The
increase is largely a result of costs incurred on the CLAVELA trial that was initiated during 2010, as well as an
increase in the number of employees to support the Company’s increased R&D activities.
Net financial income for 2010 was NOK 3.4 million, compared to NOK 3.8 million in 2010. The net financial
income consists of interest earned on money market funds and bank deposits, net of interest on long-term loan
AQUALIS ASA
65
and an unrealised net foreign exchange loss. The Company incurred no tax and the net loss amounted to NOK
115.8 million for 2010, compared to a net loss of NOK 79.0 million in 2009.
Balance sheet
At 31 December 2010, total assets amounted to NOK 358.7 million and the Company had interest-bearing debt
of NOK 20 million. This compares to total assets of NOK 232.2 million at the end of 2009 and the increase
during the year mainly reflects the equity issue carried out towards the end of 2010. The Company had no
interest-bearing debt at 31 December 2009. Cash and cash equivalents amounted to NOK 348.6 million at 31
December 2010, representing 99.7% of total assets. As at 31 December 2010, total equity amounted to NOK
179.2 million, compared to NOK 126.9 million at the end of 2009. The equity ratio at year end was 50.0%,
compared to 54.7% at the end of the previous year.
Cash flow
The Company’s net cash outflow from operating activities amounted to NOK 55.1 million in 2010, compared to
a net cash inflow of NOK 4.5 million in 2009. The Company carried out a private placement of shares during
2010 of NOK 154 million, and received an interest-bearing loan of NOK 20 million from Innovation Norway.
This contributed to the net cash flow from financing activities of NOK 176.2 million in 2010, compared to a net
cash flow from financing activities of NOK 129.6 million in 2009. Interest received on cash deposits and money
market funds resulted in a total cash flow from investing activities of NOK 5.6 million in 2010, compared to
NOK 3.8 million in 2009. Cash and cash equivalents at 31 December 2010 were NOK 348.6 million, up from
NOK 223.2 million at 31 December 2009.
10.5.5 Comments on Aqualis Offshore’s financial position
10.5.5.1. The six month period ended 30 June 2013
Profit and loss
Total revenue amounted to USD 312,849 for the six months ended 30 June 2013 and total cost of sales was USD
598,410. Further, Aqualis Offshore suffered an operating loss of USD 923,042 in the period. Net financial loss
for the six months ended 30 June totalled USD 953,601.
Balance sheet
Total assets amounted to USD 2.2 million as of 30 June 2013. Cash and cash equivalents amounted to USD
991,420 as of 30 June 2013.
Cash flow
Aqualis Offshore had a net positive cash flow of USD 991,420 for the six months ended 30 June 2013 after net
proceeds from a shareholder loan and an issue of share capital of USD 2.0 million and USD 100,000,
respectively.
10.6 INVESTMENTS
10.6.1 Historical investments
The Company’s main historical investments have been related to the development of its new drug candidates,
including chemical and pharmaceutical development as well as preclinical and clinical studies with the purpose
of documenting the safety, efficacy and applicability to treat certain diseases. The main historical cost has been
related to the development of the Company’s two lead candidates, elacytarabine and CP-4126. In accordance
with the applicable accounting principles, no R&D costs have yet been capitalised. Total investments in R&D,
including R&D related payroll and payroll related costs, amounted to NOK 145.2 million in 2012, NOK 167.0
million in 2011 and NOK 80.8 million in 2010.
R&D costs for the first half of 2013 amounted to NOK 47.3 million compared to NOK 44.5 million for the
equivalent period in 2012. The Company has not incurred any material R&D costs in the period from 30 June
2013 and up until the date of this Prospectus.
10.6.2 Investments in progress
Following the discontinuation of the development of elacytarabine in April 2013 and of CP-4126 in November
2012, as further described in section 7.3, the Company has no other drug candidates in clinical development and
all R&D activities have been terminated. As a result, the Company’s operations have been significantly reduced
to minimize operating expenditure going forward and preserve cash.
AQUALIS ASA
66
As discussed in section 5 in this Prospectus, the Company has entered into an agreement to acquire 100% of the
outstanding shares in Aqualis Offshore for a consideration of NOK 70 million with settlement in Aqualis
Shares. The Company will issue 43 750 000 shares to the shareholders of Aqualis Offshore, valued at NOK 1.60
per share.
Except for the transaction agreement above, neither Aqualis nor Aqualis Offshore have any investments in
progress as of the date of this Prospectus, and they are not committed to any future investments.
10.7 CAPITALISATION AND INDEBTEDNESS
The following tables below set forth information about the Company’s capitalisation and indebtedness as of 30
June 2013. The tables should be read together with the financial statements and the notes related hereto, as well
as the information included in this section 10 “Financial Information” and section 9.6 “Unaudited Pro Forma
Consolidated Financial Information”. The information provided in the capitalisation and indebtedness
statements below is extracted from the quarterly financial statements for the second quarter 2013.
NOK 1,000 30.06.13
(unaudited)
Shareholders’ Equity
Share Capital ................................................................................................................................................... 33 756
Share Premium ................................................................................................................................................ 107 778
Legal Reserves ................................................................................................................................................ -
Other Reserves ................................................................................................................................................ -
Other Equity .................................................................................................................................................... (82 036)
Total Equity (A) ............................................................................................................................................. 59 498
Indebtedness
Current debt
Guaranteed loans ............................................................................................................................................. -
Secured loans .................................................................................................................................................. -
Unguaranteed/unsecured ................................................................................................................................. -
Total current debt ......................................................................................................................................... -
Non-current debt
Guaranteed loans ............................................................................................................................................. -
Secured loans .................................................................................................................................................. -
Unguaranteed/unsecured ................................................................................................................................. -
Total non-current debt .................................................................................................................................. -
Total indebtedness (B)................................................................................................................................... -
Total capitalisation (A+B) ............................................................................................................................. 59 498
AQUALIS ASA
67
The table below sets forth the Company’s net indebtedness as of 30 June 2013.
NOK 1,000 30.06.13
(unaudited)
A. Cash ............................................................................................................................................................ 42 339
B. Cash equivalents ......................................................................................................................................... 44 310
C. Trading securities ....................................................................................................................................... -
D. Liquidity (A+B+C) ................................................................................................................................... 86 649
E. Current financial receivables ...................................................................................................................... 960
F. Current bank/bond debt ............................................................................................................................... -
G. Current portion of non-current debt ............................................................................................................ -
H. Other current financial debt ........................................................................................................................ 34 170
I. Current financial debt (F+G+H) .............................................................................................................. 34 170
J. Net current financial indebtedness (I-E-D).............................................................................................. 53 439
K. Non-current bank loans .............................................................................................................................. -
L. Bonds issued ............................................................................................................................................... -
M. Other non-current loans ............................................................................................................................ -
N. Non-current financial indebtedness (K+L+M ........................................................................................ -
O. Net financial indebtedness (J+N) ............................................................................................................. 53 439
As of the date of this Prospectus, there have not been any significant changes to the Company’s capitalisation
and indebtedness since 30 June 2013, except for the contemplated Transaction and the Offerings.
Net proceeds from the contemplated Offerings will further improve the Company’s financial condition. Given
full subscription in the Employee Offering, the gross proceeds from the Offerings are expected to be
approximately NOK 62 million. For more information regarding the Offerings, please see section 6.
The Company does not consider itself to have any indirect or contingent liabilities as of the date of this
Prospectus. Except from the earn-out agreement related to Aqualis Offshore’s acquisition of Aqualis Offshore
AS described in further detail in section 14.2.2, Aqualis Offshore does not have any indirect or contingent
liabilities.
10.8 CAPITAL RESOURCES
The Company has principally funded its operations through the sale of Shares to its investors as well as up-front
fees received from Clovis Oncology in relation to the license agreement for CP-4126. As at 30 June 2013, the
Company has received gross proceeds of NOK 875.4 million from the issuance and sale of its equity securities,
including exercises of options granted to employees. Since the signing of the Clovis Oncology Agreement in
November 2009 and November 2010, the Company has received an aggregate amount of NOK 143.1 million
(USD 25 million) from Clovis Oncology in the form of up-front fees. As at 30 June 2013, the Company had
cash and cash equivalents of NOK 86.6 million, representing 92.5% of total assets per 30 June 2013, of which
NOK 2.7 million constitutes restricted cash.
Cash and cash equivalents comprised the following as of 30 June 2013:
NOK 1,000 30.06.13
(unaudited) 31.12.12
(audited)
Cash at banks .................................................................................................................................................. 42 339 22 269
Money market funds ........................................................................................................................................ 41 976 198 017
Other cash deposits.......................................................................................................................................... 2 334 2 334
Total ............................................................................................................................................................... 86 649 222 620
AQUALIS ASA
68
The majority of the cash at banks is held in Norwegian kroner.
10.9 DEBT STRUCTURE
10.9.1 Aqualis ASA
As of the date of this Prospectus the Company has no interest bearing debt. The former NOK 20 million
unsecured interest bearing loan from Innovation Norway was repaid in full in June 2013.
Per 30 June 2013 the Company had current liabilities of NOK 34.2 million, consisting of trade payables in the
amount NOK 3.7 million and other current liabilities of NOK 30.4 million. Other current liabilities consist of
the following:
NOK 1,000 30.06.13
(unaudited) 31.12.12
(audited)
Withholding tax ............................................................................................................................................... 3 496 1 550
Social security taxes ........................................................................................................................................ 1 484 1 236
Allowance for holiday pay .............................................................................................................................. 474 2 704
Other accrued expenses ................................................................................................................................... 24 986 51 955
Total ............................................................................................................................................................... 30 440 57 445
Other accrued expenses consist mainly of R&D expenses incurred, but not yet invoiced.
10.9.2 Debt structure following the Transaction
Following the Transaction, the Group’s debt will consist of the following:
NOK 1,000 30.06.13
(unaudited)
Interest bearing loans and borrowings ............................................................................................................. 14 129
Total non-current liabilities .......................................................................................................................... 14 129
Trade payables ................................................................................................................................................ 4 689
Deferred revenue ............................................................................................................................................. 2 922
Other current liabilities .................................................................................................................................... 36 371
Total current liabilities ................................................................................................................................. 43 982
Total liabilities ............................................................................................................................................... 58 111
The information in the table above is derived from the consolidated unaudited pro forma balance sheet as set out
in section 9.6.5 in this Prospectus.
Aqualis Offshore has a borrowing facility of up to NOK 3 million and a revolving borrowing facility of up to
USD 4 million. As per 30 June 2013, NOK 2 million was drawn of the NOK 3 million facility, whereas USD 2
million was drawn of the USD 4 million facility. Another loan tranche of USD 2 million was drawn 10 July
2013.
Please see section 14.2.2 for a more detailed description.
10.10 WORKING CAPITAL
In the opinion of the Company, its working capital is sufficient to cover the Group’s present requirements, that
is, for a period of at least 12 months from the date of this Prospectus.
10.11 TAX LOSS CARRYFORWARDS
As at 31 December 2012, the Company had a total tax loss carry forward of NOK 752.8 million, which can be
carried forward indefinitely. The Company has not recognised a tax asset on the balance sheet due to the
uncertainty of future taxable profits. The tax loss carried forward can most likely only be used to reduce the
amount of tax payable related to the healthcare activities.
AQUALIS ASA
69
10.12 STATEMENT OF CASH FLOW INFORMATION
For a summary of the statements of cash flows, see section 10.2.3.
10.12.1 Operating activities
Net cash flow from operating activities for the year ended 31 December 2012 of NOK (162.3) million resulted
primarily from the Company’s net loss of NOK 95.7 million adjusted for the portion of up-front fees recognised
as income during the period (NOK 77.1 million) and normal changes in working capital.
Net cash flow from operating activities for the year ended 31 December 2011 of NOK (158.1) million resulted
primarily from the Company's net loss of NOK 156.3 million adjusted for the portion of up-front fees
recognised as income during the period (NOK 40.2 million), and normal changes in working capital.
Net cash flow from operating activities for the six months ended 30 June 2013 amounted to NOK (118.1)
million compared to NOK (82.4) million for the equivalent period in 2012. These figures primarily reflect net
loss of NOK 80.6 million and NOK 55.9 million for the first six months of 2013 and 2012 respectively.
10.12.2 Investing activities
The cash provided by (used in) investing activities for the year ended 31 December 2012 and 2011 of NOK 8.7
million and NOK 7.2 million respectively, primarily reflects the interest received on cash deposits and
investments in money market funds of NOK 10.1 million and NOK 8.5 million respectively, net of purchase of
some minor production equipment (2012: NOK 1.4 million, 2011: NOK 1.3 million).
Net cash flow from investing activities for the six months ended 30 June 2013 amounted to NOK 2.5 million
compared to NOK 5.1 million for the equivalent period in 2012. These figures primarily reflect interest received
on cash deposits and investments in money market funds.
10.12.3 Financing activities
The cash provided by financing activities for the year ended 31 December 2012 of NOK 161.1 million was
primarily due to the issuance of Shares in a private placement of NOK 163.1 million in January 2012. The cash
provided by financing activities for the year ended 31 December 2011 of NOK 17.6 million was due primarily
to the issuance of Shares in a subsequent repair offering of NOK 21.0 million, following a private placement in
2010.
Net cash flow from financing activities for the six months ended 30 June 2013 amounted to NOK (20.8) million,
compared to NOK 161.8 million for the equivalent period in 2012. The negative cash flow in 2013 is primarily
due to the repayment of the interest bearing loan of NOK 20 million from Innovation Norway in June 2013. The
positive net cash flow for the first six months of 2012 is primarily due to the issuance of Shares in the private
placement of NOK 163.1 million in January 2012.
AQUALIS ASA
70
11. BOARD OF DIRECTORS, MANAGEMENT AND EMPLOYEES
11.1 BOARD OF DIRECTORS
11.1.1 Overview
In accordance with Norwegian law, the Board is responsible for administering the Company’s affairs and
ensuring that the Company’s operations are organised in a satisfactory manner.
The Company’s Articles of Association provide that the Board of Directors shall consist of a minimum of three
and a maximum of eight members. As of the date of this Prospectus, the Company’s Board of Directors consists
of the following:
Name of director Director since Current term expires Business address:
Martin Nes 02.05.2013 02.05.2015 c/o Ferncliff, Sjølyst Plass 2, 0278 Oslo Yvonne Litsheim Sandvold 17.06.2013 17.06.2015 c/o Frognerbygg AS, Sørkedalsveien 7, 0369 Oslo
Øystein Stray Spetalen 02.05.2013 02.05.2015 c/o Ferncliff, Sjølyst Plass 2, 0278 Oslo
Synne Syrrist 17.06.2013 17.06.2015 Rundhaugveien 5A, 0495 Oslo
* Synne Syrrist acted as Deputy Board member in the period from 17.06.13 to 08.10.2013 until she became a full-time Board member.
11.1.2 Brief biographies of the Board members
Martin Nes, Chairman
Mr. Nes is Chief Executive Officer and Partner of the investment firm Ferncliff TIH AS. Mr. Nes has extensive
corporate experience from various companies and board positions. Mr. Nes has previously worked for the
Norwegian law firm Wikborg Rein, both in their Oslo and London offices and for the shipping law firm
Evensen & Co. Mr. Nes joined Ferncliff TIH AS in March 2008. Mr. Nes holds a law degree from the
University of Oslo and a master of laws’ degree from the University Of Southampton, England. Mr. Nes is a
Norwegian citizen and resides in Oslo, Norway.
Current directorships and senior management position ................................................................. Tycoon Industrier AS (chief executive officer), Ferncliff TIH
AS and Ferncliff TIH 1 AS (chief executive officer),
Hanekamb Invest AS (chairman), Ricin Invest AS (chairman),
Aqualis Offshore AS (chairman), S.D. Standard Drilling Plc.
(chairman), AS Simask (board member), Strata Marine &
Offshore AS (board member), Allum Holding AS (board
member), Saga Tankers ASA (board member), Aqualis
Offshore Ltd. (board member), S.D. Standard Drilling Ltd. Pte.
(board member)
Previous directorships and senior management positions
last five years .................................................................................................................................
Ferncliff Asset Management AS (chairman of the board),
Clavis Pharma ASA (board member), Ferncliff Investment
Funds Plc. (board member), RigInvest AS (board member),
Maross Invest AS (board member), Offshore Driller 1 Ltd.
(board member), Offshore Driller 2 Ltd. (board member),
Offshore Driller 3 Ltd. (board member), Offshore Driller 4 Ltd.
(board member), Offshore Driller 5 Ltd. (board member),
Strata AS (board member)
Yvonne Litsheim Sandvold, Board member
Ms. Sandvold is the Chief Operating Officer of Frognerbygg AS, and has extensive experience from the
Norwegian real estate industry. Ms. Sandvold currently serves on the Board of several private companies. Ms.
Sandvold holds a cand. psychol. degree from the University of Oslo. Ms. Sandvold is a Norwegian citizen and
resides in Oslo, Norway.
AQUALIS ASA
71
Current directorships and senior management position ................................................................. Frognerbygg AS (chief operating officer and deputy board
member), YLS Næringseiendom AS (chief executive officer and
chairman of the board), Bjørn Farmanns gate 8 AS (chief
executive officer and chairman of the board), Octopus Eiendom
AS (chairman of the board), AS Naturbetong (deputy board
member), Sandvold Holding AS (deputy board member),
Seilduksgt. 17 AS (deputy board member), Bogstadveien 62 AS
(deputy board member), Schønings gate 7 AS (deputy board
member), Aksjevold AS (Deputy board member).
Previous directorships and senior management
positions last five years ..................................................................................................................
None
Øystein Stray Spetalen, Board member
Mr. Spetalen is chairman and owner of investment firm Ferncliff TIH AS. He is an independent investor. He has
worked in the Kistefos Group as an investment manager, as corporate advisor in different investment banks and
as a portfolio manager in Gjensidige Forsikring. Mr. Spetalen is a chartered petroleum’s engineer from NTNU.
Mr. Spetalen is a Norwegian citizen and resides in Oslo, Norway.
Current directorships and senior management
position ..........................................................................................................................................
Gardermoen Media AS (chief executive officer), Ferncliff TIH 1
AS (chairman), Saga Tankers ASA (chairman), Tycoon Industrier
AS (chairman), Tymar AS (chairman), Gross Management AS
(chairman), Ferncliff TIH AS (chairman), Ferncliff (chairman),
Dasut AS (chairman), AS Simask (chairman), Unified AS
(chairman), Krøs AS (chairman), Tycoon Trading 2 AS (chairman),
Allum Holding AS (chairman), Renewable Energy Corporation AS
(board member), Hydrogen Technologies Holding AS (board
member), Namdalen Træsliberi AS (board member), Van Severen
& Co AS (board member), Bangdal Brug AS (board member),
Skorovas Gruber AS (board member), Visitfonna AS (board
member), Grøndalselva AS (board member), Strata Marine &
Offshore AS (board member), Vallhall Fotballhall AS (board
member), Sjølyst Kontorfellesskap AS (board member), Vallhall
Fotballhall KS (board member), Vallhall Fotballhall Drift AS
(board member), Namdal Skoger AS (board member), Namdal
Bruk AS (board member), Namdal Kraft AS (board member),
Spectrum ASA (board member), Gardermoen Media AS
Previous directorships and senior management
positions last five years ..................................................................................................................
Jetfly KS (chairman), Jetfly AS (chairman), Strata AS (chairman),
Ferncliff Asset Management Holding AS (chairman), Singapore
Drilling AS (chairman), Connect Venture AS (chairman), Maross
Invest AS (chairman), AS Ferncliff (chairman), Global Små
Mellomstore Bedrifter AS (chairman), Televekst AS (chairman),
Sirius Simask AS (chairman), Standard Drilling ASA (chairman),
Ferndrill Managament AS (chairman), Pesoss AS (chairman),
Gyoss Invest AS (chairman), Ferncliff Invest AS (board member),
Gardermoen Media AS (board member), Global Geo Services ASA
(board member), Standard Holding AS (board member), HT
Lufttransport AS (board member), Unionen AS (board member),
Aktiv Kapital ASA (board member), Kverneland ASA (board
member), Norske Skog ASA (board member), Standard Drilling
ASA (board member), Bank 2 ASA (board member), B2 Holding
AS (board member), Salmar ASA (board member), Altinex ASA
(board member), Allum Marine AS / Noble Denton Sandefjord AS
(board member), VIF ASA (board member)
Synne Syrrist, Board member
Ms. Syrrist is an independent business consultant, and has extensive experience as a non-executive director of
both private and public companies. She was previously a partner and financial analyst at First Securities and
financial analyst at Elcon Securities ASA. Ms. Syrrist currently serves on the Board of several public
companies, including Norwegian Property ASA, Awilco Drilling Ltd and Eidesvik Offshore ASA. Ms. Syrrist
holds an MSc from the Norwegian University of Science and Technology, and qualified as an authorised
financial analyst at the Norwegian School of Economics and Business Administration. Ms. Syrrist is a
Norwegian citizen and resides in Oslo, Norway.
AQUALIS ASA
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Current directorships and senior management position ................................................................. Awilco Drilling Ltd (board member), Awilco LNG ASA (board
member), Eidesvik Offshore ASA (board member), Castelar
Corporate Finance AS (board member), Global Rig Company
ASA (board member), Norwegian Property ASA (board
member), DNB ShippingInvest I ASA (chairman), IP
SkipsHolding I AS (chairman), IP Shipping I AS (chairman), IP
Skipseiende 2 AS (chairman), LPG Ships 1 AS (chairman)
Previous directorships and senior management
positions last five years ..................................................................................................................
Cecon ASA (member of the board of directors), Nordisk
Energiforvaltning ASA (member of the board of directors),
Nordisk Industriutvikling AS (member of the board of directors),
Faktor Eiendom ASA (member of the board of directors),
Copeinca ASA (member of the board of directors), Wavefields
Inseis ASA (member of the board of directors), Ocean HeavyLift
ASA (member of the board of directors), Camposol Holding Plc
(member of the board of directors), Camposol AS (member of the
board of directors), DNB NOR Skipseiende 3 AS (chairman of
the board of directors), DNB NOR Skipseiende 4 AS (chairman
of the board of directors), DNB NOR Skipseiende 5 AS
(chairman of the board of directors), DNB NOR Skipseiende 6
AS (chairman of the board of directors), DNB NOR Skipseiende
7 AS (chairman of the board of directors), DNB NOR
Skipseiende 8 AS (chairman of the board of directors), DNB
NOR Profesjonell Shippinginvestor I AS (chairman of the board
of directors), Sector Epsilon AS (member of the board of
directors), Cetix Group AS (member of the board of directors),
Vetro Solar AS (member of the board of directors), Gregoire
ASA/AS (member of the board of directors), Scana Industrier
ASA (member of the board of directors)
11.2 EXECUTIVE MANAGEMENT
As of the date of this Prospectus, Gunnar Manum and Ole Henrik Eriksen are the only members of the
Company’s Executive Management.
Gunnar Manum, Acting CEO and CFO
Mr. Manum joined Aqualis in April 2007 and serves currently as the Company’s Chief Financial Officer and
acting Chief Executive Officer. Prior to joining the Company, he was a senior advisor at Handelsbanken Capital
Markets, Corporate Finance, for eight years. Mr. Manum has long and wide ranging experience from several
managerial positions within finance and accounting at Stolt Sea Farm (now part of Marine Harvest) and
PricewaterhouseCoopers, Australia. He holds a MCom in Finance and Accounting from the University of New
South Wales, Sydney. His business address is Sjølyst Plass 2, 0278 Oslo.
Ole Henrik Eriksen, CBO Healthcare
Mr. Eriksen was part of the establishment of Aqualis (Clavis Pharma) in August 2001 as the first CEO and is
currently responsible for the Company’s healthcare activates, as Chief Business Officer. Prior to that he had 18
years of experience as scientist, Director, VP and CEO in the pharmaceutical and diagnostic imaging industry,
including Nycomed Imaging (now part of GE Healthcare), Medinnova, NeoRad AS and Alertis Medical AS.
Mr. Eriksen holds a M.Sc. in Organic Chemistry. His business address is Sjølyst Plass 2, 0278 Oslo.
For a description of the Executive Management following the Transaction, please see section 9.4.2.
11.3 CONFLICTS OF INTERESTS, FAMILY RELATIONSHIP, DIRECTORSHIPS ETC.
To the Company’s knowledge, there are no potential conflicts of interests between any duties to the Company,
of any of the Board members or members of the Executive Management and their private interests and or other
duties, except as described below.
Martin Nes, Chairman of the Board
Mr. Nes is currently the chief executive officer of Ferncliff TIH AS which as of the date of this Prospectus,
directly or indirectly, holds approximately 15% of total shares outstanding, and is thus not considered as
independent from the Company’s larger shareholders.
Mr. Nes is also the CEO of Ferncliff TIH AS which owns 51% of Aqualis Offshore.
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Øystein Stray Spetalen, member of the Board
Mr. Spetalen owns Ferncliff TIH AS which as of the date of this Prospectus, directly or indirectly, holds
approximately 15% of total shares outstanding, and is thus not considered as independent from the Company’s
larger shareholders.
Ferncliff TIH AS which also owns 51% of Aqualis Offshore.
Furthermore, Mr. Spetalen owns Strata Marine & Offshore. In connection with the sale of Aqualis Offshore AS,
Strata Marine & Offshore is entitled to an earn-out consideration further described in 14.2.2, and there might
potentially be a conflict of interest regarding this earn-out agreement. If Mr. Spetalen could affect the
distribution and amount of business coming into the different subsidiaries of Aqualis Offshore, which the
Company believes he is not able to do as a Board member of the Company, he could potentially assign business
in favour of Aqualis Offshore AS, and thus affect the earn-out payment.
There are no family relations between any of the Company’s Board members or Executive Management.
11.4 DETAILS OF ANY CONVICTIONS FOR FRAUDULENT OFFENCES, BANKRUPTCY ETC.
No member of the Board of Directors or the Executive Management have for at least the previous five years
preceding the date of this Prospectus been;
Convicted in relation to any fraudulent offences;
Involved in any bankruptcies, receiverships or liquidations when acting in the capacity of member of
an administrative, management or supervisory body;
Subject to any official public incrimination and/or sanctions by statutory or regulatory authorities
(including designated professional bodies), or been disqualified by a court from acting as a member of
the administrative, management or supervisory body of an issuer or from acting in the management or
conduct of the affairs of any issuer.
11.5 REMUNERATION AND BENEFITS
11.5.1 Remuneration of the Board
The table below sets out the remuneration paid to the Board of Directors in 2012.
Name Board fee (NOK 1,000)
Anders P. Wiklund .........................................................................................................................
450
Geir Stormorken ............................................................................................................................
222
Annette Clancy .............................................................................................................................. 222
Hilde Furberg ................................................................................................................................. 222
Karol Sikora ................................................................................................................................... 222
Robert J. Spiegel ............................................................................................................................ 222
Hilde H. Steineger ......................................................................................................................... 222
Total .............................................................................................................................................. 1,782
11.5.2 Remuneration of the Executive Management
The table below sets out the remuneration paid to the Executive Management in 2012.
Name Salary Pension
contributions
Other² Share options Total
Olav Hellebø¹ .................................................................................................................................................. 2,714 432 83 3,088 6,317
Ole Henrik Eriksen .......................................................................................................................................... 1,315 61 13 601 1,990
Nicholas Adams .............................................................................................................................................. 1,404 148 54 1,176 2,782 Athos Gianella-Borradori ................................................................................................................................ 2,191 314 54 1,524 4,083
Gunnar Manum ............................................................................................................................................... 1,327 63 12 601 2,003
Tone Veiteberg ................................................................................................................................................ 1,101 61 11 601 1,774
Total ............................................................................................................................................................... 10,052 1,080 228 7,591 18,951
¹Resigned 20 May 2013
²Car allowance
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11.5.3 Termination benefits
At the date of this Prospectus, no member of the administrative, management or supervisory bodies’ has
contracts with the Company providing benefits upon termination of employment.
11.5.4 Share option plan
The Board of Aqualis has established an Employee Share Option Plan. Under the option plan options may be
granted to all employees with a minimum of 80% part-time employment. The exercise price of the options is
equal to the market price of the shares on the date of grant. Options are conditional on the employee completing
one year of service (vesting period). The contractual life of each option granted is normally three years. The
options are expected to be settled through the issue of shares, although as an alternative the Company is at
liberty to make cash compensation.
The fair value of the options is estimated at the date of granting the options using the Black-Scholes valuation
model, taking into account the terms and conditions upon which the options were granted. The terms and
conditions of the options granted cannot be altered during the life of the options.
463,000 options were granted in 2012 at a WAEP of NOK 52.00 per share. 502,000 options were granted in
2011 at a WAEP of NOK 44.15 and 527,000 options were granted during 2010 at a WAEP of NOK 41.81. The
total share options outstanding as of 30 June 2013 have a WAEP of NOK 28.90 and the exercise period for the
share options is from as of today to 1 April 2024.
30 June 2013 2012
NOK 1,000 Number of
options WAEP (NOK)
Number of
options WAEP (NOK)
Outstanding at the beginning of the year ......................................................................................................... 2 046 500 46.59 1 908 800 40.67
Granted ............................................................................................................................................................ 983 000 10.00 463 000 52.00
Exercised ......................................................................................................................................................... - - (325 300) 19.57
Forfeited .......................................................................................................................................................... (749 250) 49.32 - -
Expired ............................................................................................................................................................ (256 500) 41.72 - -
Outstanding at the end of period ...................................................................................................................... 2 023 750 28.42 2 046 500 46.59
Exercisable at the end of period ................................................................................................................... 1 963 750 28.99 1 096 000 44.30
As of the date of this Prospectus only 240,000 options are outstanding. These share options have a WAEP of
NOK 31.00 and the exercise period for the share options is from as of today and to 31 December 2015.
11.6 CORPORATE GOVERNANCE
11.6.1 Audit committee
The Board has appointed an audit committee, and the function of the audit committee is to prepare matters to be
considered by the Board and to support the Board in the exercise of its management and supervisory
responsibilities relating to financial reporting, statutory audit and internal control. The current audit committee
consists of the members of the Board of Directors as further described in section 11.1.
11.6.2 Remuneration committee
The remuneration committee, appointed by the Board, makes proposals to the Board on the employment terms
and conditions and total remuneration of the CEO, and other members of Executive Management, as well as the
details of the employee share option plan. These proposals are also relevant for other management entitled to
variable salary payments. The current remuneration committee consists of the members of the Board of
Directors as further described in section 11.1.
11.6.3 Corporate Governance compliance
The Company’s corporate governance guidelines, called “Clavis Pharma ASA Corporate Governance Policy”
(the “CCGP”), were adopted by the Board at the board meeting on 24 April 2006 and last revised by the Board
on 22 March 2011. The CCGP is based on, and complies with, the Norwegian Code of Practice for Corporate
Governance issued by the Norwegian Corporate Governance Board, latest edition of 23 October 2012.
The CCGP includes the following separate guidelines and routines, as attachments to the main corporate
governance guidelines:
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- Instructions to the election committee
- Instructions to the remuneration committee
- Instructions to the Board
- Instructions to the CEO
- Routines for the safe handling of inside information
11.7 EMPLOYEES
11.7.1 Number of employees
As of 30 June 2013, the Company had 8 permanent employees. The significant reduction in number of
employees compared to year end 2012 is related to the downscaling of operations as further described in section
7.3.
At year end in 2012, 2011, and 2010 the corresponding numbers of employees were 34, 30 and 29 respectively.
As of the date of this Prospectus, there are only two permanent employees in the Company. However, post the
Transaction described in this Prospectus, the total number of employees in the Group will increase as Aqualis
Offshore employs an additional 37 people. For further information regarding employees in Aqualis Offshore,
please see section 8.8.2.
11.8 PENSIONS AND OTHER OBLIGATIONS
11.8.1 Pensions
The Company has a defined contribution plan. A defined contribution plan is a pension plan under which the
Company pays fixed contributions into a separate entity. The Company has no legal or constructive obligations
to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating
to employee service in the current and prior periods.
For defined contribution plans, the Company pays contributions to publicly or privately administered pension
insurance plans on a mandatory, contractual or voluntary basis. The Company has no further payment
obligations once the contributions have been paid. The contributions are recognised as when they are due.
Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future
payment is available.
Total expenses in relation to the Company’s defined contribution plan amounted to NOK 3.0 million for 2012,
NOK 2.9 million for 2011 and NOK 2.1 million for 2010.
11.8.2 Loans and guarantees
The Company has no outstanding loans or guarantees to any member of the Executive Management.
11.9 SHAREHOLDINGS
11.9.1 Board of Directors
The table below presents the overview of Shares and options owned by the Board of Directors as of the date of
this Prospectus:
Number of Shares Number of options
Martin Nes ...................................................................................................................................................... 0 0
Yvonne Litsheim Sandvold ............................................................................................................................. 0 0
Øystein Stray Spetalen .................................................................................................................................... 5,000,000¹ 0
Synne Syrrist ................................................................................................................................................... 0 0
¹ Consisting of 3,000,000 Shares held through Tycoon Industrier AS and 2,000,000 Shares held through Strata Marine & Offshore AS, both
companies controlled by Mr. Spetalen.
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Following the Transaction and the issuance of the New Shares, Mr. Spetalen will own a total of 27,312,500
Shares in the Company through companies controlled by him. The Shares resulting from the Transaction will be
subject to a lock-up period as further described in section 5.6.
11.9.2 Executive Management
As of the date of this Prospectus, Gunnar Manum owns 120,000 options and no Shares and Ole Henrik Eriksen
owns 120,000 options and 80,170 Shares.
.
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12. SHARE CAPITAL
12.1 OVERVIEW
The Company’s current share capital is NOK 33,755,515 divided into 33,755,515 ordinary shares, each with a
nominal value of NOK 1.00. The Company has one class of shares, and each share carries one vote. All the
shares are validly issued and fully paid.
There were 30,568,091 outstanding Shares issued by the Company as of 1 January 2012 and 33,755,515
outstanding Shares issued by the Company as of 31 December 2012.
Following the Transaction and the Offerings, the Company’s total number of issued Shares will be 116,261,030,
each with a nominal value of NOK 1.00 per Share.
12.2 SHARE CAPITAL HISTORY
The following table sets out the development of the Company's share capital since 2006 and until the date of this
Prospectus.
Date Type of change
Share capital
increase
(NOK)
Share
capital
(NOK)
Subscription
price per
share (NOK)
Par value
per share
(NOK)
Issued
shares
Total
shares
02.04.06 Private placement 148,150 8,116,930 135.00 10 B: 14,815 811,693
24.04.06 Private placement 139,600 8,256,530 193.00 10 C: 13,960 825,653
23.06.06 Share split 1:10 0 8,256,530 - 1 0 8,256,530
19.06.06 Private placement 4,879,560 13,136,090 45.50 1 4,879,560 13,136,090
03.07.06 Public Offering 439,560 13,575,650 45.50 1 439,560 13,575,650
20.07.09 Private placement 10,750,000 24,325,650 12.00 1 10,750,000 24,325,650
25.08.09 Private placement 650,000 24,975,650 12.00 1 650,000 24,975,650
03.03.10 Share option plan 40,000 25,015,650 24.40 1 40,000 25,015,650
05.05.10 Share option plan 256,000 25,271,650 24.40 1 256,000 25,271,650
01.09.10 Share option plan 50,000 25,321,650 16.70 1 50,000 25,321,650
01.11.10 Share option plan 40,000 25,361,650 16,70 1 40,000 25,361,650
18.11.10 Private Placement – Tranche
1
2,115,000 27,476,650 35.00 1 2,115,000 27,476,650
09.12.10 Private Placement – Tranche 2
2,285,000 29,761,650 35.00 1 2,285,000 29,761,650
19.01.11 Public Offering 600,000 30,361,650 35.00 1 600,000 30,361,650
05.07.11 Private Placement 174,041 30,535,691 42.73 1 174,041 30,535,691
02.11.11 Share option plan 32,400 30,568,091 16.70 1 32,400 30,568,091
24.01.12 Private Placement 2,862,124 33,430,215 57 1 2,862,124 33,430,215
14.02.12 Share option plan 116,600 33,546,815 18.61 1 116,600 33,546,815
04.05.12 Share option plan 208,700 33,755,515 20.10 1 208,700 33,755,515
12.3 OWN SHARES
As of the date of this Prospectus, the Company does not own any treasury shares. The Board has not been
granted any authorisation to acquire treasury shares.
12.4 SHAREHOLDER AGREEMENTS
The Board is not aware of any shareholder agreements by and among the Company’s shareholders relating to
the Company.
12.5 STOCK EXCHANGE LISTING, SHARE REGISTRAR AND SECURITIES NUMBER
Aqualis ASA is a Norwegian public limited liability company and the Shares are issued pursuant to the
Norwegian Public Limited Companies Act.
The Shares are listed on Oslo Børs under the ticker symbol “AQUA”. The Shares belong to the OB Match
liquidity category and they are registered in the Norwegian Central Securities Depository (VPS). The
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Company's registrar is Nordea Bank Norge ASA, Securities Services/Issuer Services, P.O. Box 1166 Sentrum,
N-0107 Oslo. The Shares carry the securities number ISIN NO 001 0308240.
12.6 OUTSTANDING AUTHORIZATIONS
At the EGM held 8 October 2013, the Company was granted an authorisation to increase the Company’s share
capital with NOK 43 750 000 by issuance of 43 750 000 new shares in connection with the acquisition of
Aqualis Offshore, and NOK 33 755 515 by issuance of 33 755 515 new shares in connection with the Rights
Issue, and NOK 5 000 000 by issuance of 5 000 000 new shares in connection with the Employee Offering. The
authorisations are set out in section 5.4 and 6.2.1 respectively.
In addition, the EGM granted the Board an authorisation to increase the share capital with up to NOK 11 626
000, which is approximately 10% of the existing share capital following the registration of the capital increases
pertaining to the Transaction, the Rights Issue and the Employee Offering. The authorisation is set out below.
“The Board is granted authorization to increase the share capital with up to NOK 11,626,000, which is
approximately 10 % of the existing share capital after the completion of the capital increases proposed in item
3, 4 and 5, by issuing up to 11,626,000 shares through one or several share capital increases.
The authorization to acquire shares shall be used for one or more of the following purposes:
(i) In connection with investments, mergers and acquisitions; and/or
(ii) to provide the Company with financial flexibility; and/or
(iii) issue of shares in connection with the Company’s share/option plan for employees
Price and conditions for subscription will be determined by the Board on issuance, according to the Company's
needs and the shares' market value at the time. Shares can be issued in exchange for cash settlement or
contribution in kind.
The existing shareholders pre-emptive rights to subscribe shares can be deviated from in connection with the
effectuation of this authorization.
The Board’s authorization is valid until the Annual General Meeting in 2014, but shall in any event expire at the
latest 15 months from the date of this General Meeting.
The Board is at the same time given authorization to make the necessary amendments to the articles of
association on execution of the authorization.”
12.7 SHARE OPTIONS
The Company has granted options to employees as part of an incentive program. The incentive program is
described in section 11.5.4.
12.8 CONVERTIBLE INSTRUMENTS AND WARRANTS
As of the date of this Prospectus, the Company has no outstanding convertible instruments or warrants.
12.9 DIVIDEND POLICY
The Company has not paid any dividends to date as the Company has been in a pre-commercial phase with
ambitious development plans. Going forward, the Company plans to grow, both organically and through
acquisitions, and potential profits are to be reinvested in the Company. Hence, it does not expect to make any
dividend payments in the next few years.
12.10 SHAREHOLDERS
The table below sets out the Company’s 20 largest shareholders as registered in VPS as of 7 October 2013.
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Name Number of shares Percentage (%)
Tycoon Industrier AS..................................................................................................................... 3,000,000 8.89
Strata Marine & Offshore AS ........................................................................................................ 2,000,000 5.92
Anko Invest AS.............................................................................................................................. 1,870,382 5.54
Kristianro AS ................................................................................................................................. 1,716,444 5.08
Gislerød Magne ............................................................................................................................. 750,000 2.22
VPF Nordea Kapital ...................................................................................................................... 653,850 1.94
Argentum Secondary AS ............................................................................................................... 626,663 1.86
Nordnet Pensjonsforsikring ........................................................................................................... 587,430 1.74
Ilmarinen Mutual Pension Insurance ............................................................................................. 474,111 1.40
MP Pensjon PK .............................................................................................................................. 453,000 1.34
Scope Properties Limited ............................................................................................................... 374,540 1.11
Fremont AS.................................................................................................................................... 369,190 1.09
Fraternita AS .................................................................................................................................. 353,036 1.05
VPF Nordea Avkastning ................................................................................................................ 346,239 1.03
Enki Energy Technologies AS ....................................................................................................... 325,000 0.96
Verdipapirfondet DNB SMB ......................................................................................................... 313,866 0.93
Condora ......................................................................................................................................... 300,000 0.89
Oculomotorius AS ......................................................................................................................... 297,000 0.88
Coremed AS .................................................................................................................................. 268,647 0.80
Nordnet Bank AB .......................................................................................................................... 245,327 0.73
The following shareholders owned more than 5% of the issued share capital on 7 October 2013: Tycoon
Industrier AS (3,000,000 Shares, representing 8.89% of total share capital), Strata Marine & Offshore AS
(2,000,000 Shares, representing 5.92% of total share capital), Anko Invest AS (1,870,382 Shares, representing
5.54% of total share capital) and Kristianro AS (1,716,444 Shares, representing 5.08% of total share capital).
Shareholders with ownership exceeding 5% must comply with disclosure obligations according to the
Norwegian Securities Trading Act section 4-3. For more detailed description please see section 13.7.
As far as the Company is aware of, there is no other natural or legal person other than the above mentioned,
which indirectly or directly has a shareholding in the Company above 5% which must be notified under
Norwegian law.
To the knowledge of the Company, no person, entity or group directly or indirectly controls the issuer to such
extent that special measures is considered necessary to ensure abuse of such control.
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13. SHAREHOLDER MATTERS AND NORWEGIAN COMPANY AND SECURITIES LAW
The following is a summary of certain information relating to the Shares and certain shareholder matters,
including the Company’s Articles of Association and a summary of applicable Norwegian law in effect as of the
date of this Prospectus. The summary does not purport to be complete and is qualified in its entirety by the
Company’s Articles of Association and Norwegian law.
Under Norwegian law, all shares are to provide equal rights in a company. However, Norwegian law permits a
company’s articles of association to provide for different types of shares (e.g., several classes of shares). In such
case, a company’s articles of association must specify the different rights, preferences and privileges of the
classes of shares and the total par value of each class of shares. The Company’s Articles of Association provide
for a single class of shares with equal rights.
There are no restrictions affecting the right of Norwegian or non-Norwegian residents or citizens to own the
Shares. The Company’s Articles of Association do not contain any provisions restricting the transferability of
Shares.
13.1 THE GENERAL MEETING OF SHAREHOLDERS
Under Norwegian law, a company’s shareholders are to exercise supreme authority in the Company through the
general meeting.
In accordance with Norwegian law, the annual general meeting of the Company’s shareholders is required to be
held each year on or prior to June 30. The following business must be transacted and decided at the annual
general meeting:
• approval of the annual accounts and annual report, including the distribution of any dividend;
• any other business to be transacted at the general meeting by law or in accordance with the Company’s
Articles of Association
Pursuant to Section 5-6 of the Norwegian Public Limited Companies Act, the annual general meeting of
shareholders shall also deal with the Board of Directors’ declaration concerning the determination of salaries
and other remuneration to senior executive officers pursuant to Section 6-16a of said Act.
In addition to the annual general meeting, extraordinary general meetings of shareholders may be held if deemed
necessary by the Board. An extraordinary general meeting must also be convened for the consideration of
specific matters at the written request of the Company’s auditors or shareholders representing a total of at least
5% of the share capital.
Norwegian law requires that written notice of general meetings be sent to all shareholders whose addresses are
known at least three weeks prior to the date of the meeting, unless the articles of association stipulate a longer
period. The Company’s Articles of Association do not include any provision on this subject. The notice shall set
forth the time and date of the meeting and specify the agenda of the meeting. It shall also name the person
appointed by the Board to open the meeting. See Article 9 of the Company’s Articles of association for further
details.
A shareholder may attend the general meeting either in person or by proxy. The Company will include a proxy
form with its notices of general meetings.
A shareholder is entitled to have an issue discussed at a general meeting if such shareholder provides the Board
with notice of the issue within seven days before the three week notice period, together with a proposal to a draft
resolution or a basis for putting the matter on the agenda.
13.2 VOTING RIGHTS
Subject to the terms of a company’s articles of association to the contrary, Norwegian law provides that each
outstanding share shall represent a right to one vote. All of the Company’s Shares have an equal right to vote at
general meetings. No voting rights can be exercised with respect to treasury shares held by a company.
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In general, decisions that shareholders are entitled to make under Norwegian law or the Company’s articles of
association may be made by a simple majority of the votes cast. In the case of elections, the persons who obtain
the most votes are elected. However, certain decisions, including but not limited to resolutions to:
• authorise an increase or reduction in the Company’s share capital,
• waive preferential rights in connection with any share issue,
• approve a merger or demerger, and
• amend the Company’s Articles of Association,
must receive the approval of at least two-thirds of the votes cast and two-thirds of the share capital represented
at the general meeting. Further, certain types of changes in the rights of the Company's shareholders require the
consent of all shareholders or 90% of the share capital represented at a general meeting, as well as the majority
required for amendments to the Company’s Articles of Association. There are no quorum requirements for
general meetings.
In general, in order to be entitled to vote at a general meeting, a shareholder must be registered as the owner of
shares in the Company’s share register kept by the VPS, or alternatively, report and show evidence of the
shareholder’s share acquisition to the Company prior to the general meeting.
Under Norwegian law, a beneficial owner of shares registered through a VPS-registered nominee may not be
able to vote the beneficial owner’s shares unless ownership is re-registered in the name of the beneficial owner
prior to the relevant general meeting. Investors should note that there are varying opinions as to the
interpretation of Norwegian law in respect of the right to vote nominee-registered shares. For example, Oslo
Børs has in a statement made on 21 November 2003 taken the position that “nominee-shareholders” may vote in
general meetings if they actually prove their shareholding prior to the general meeting.
13.3 ADDITIONAL ISSUANCES AND PREFERENTIAL RIGHTS
If the Company issues any new Shares, including bonus shares (i.e. new Shares issued by a transfer from funds
that the company is allowed to use to distribute dividend), the Company’s Articles of Association must be
amended, which requires a two-thirds majority of the votes cast as well as at least two-thirds of the share capital
represented at a general meeting.
In connection with an increase in the Company’s share capital by a subscription for Shares issued against
contribution in cash, Norwegian law provides the Company’s shareholders with a preferential right to subscribe
for the new Shares on a pro rata basis in accordance with their then-current shareholdings in the Company. Said
preferential rights may be waived by a resolution at a general meeting passed by two-thirds of the votes cast and
share capital represented.
The general meeting may, in a resolution supported by at least two-thirds of the votes cast and share capital
represented, authorize the Board to issue new Shares. Such authorisation may be effective for a maximum of
two years, and the nominal value of the Shares to be issued may not exceed 50% of the nominal share capital as
at the time the authorization is registered. The shareholders’ preferential right to subscribe for Shares issued
against consideration in cash may be set aside by the Board only if the authorization includes such possibility
for the Board.
Any issue of Shares to shareholders who are citizens or residents of the United States upon the exercise of
preferential rights may require the Company to file a registration statement in the United Stated under U.S.
securities law. If the Company decides not to file a registration statement, these shareholders may not be able to
exercise their preferential rights.
Under Norwegian law, bonus shares may be issued, subject to shareholder approval and provided, amongst
other requirements, that the transfer is made from funds that the Company is allowed to use to distribute
dividend. Any bonus issues may be effectuated either by issuing Shares or by increasing the nominal value of
the Shares outstanding. If the increase in share capital is to take place by new Shares being issued, these new
Shares must be allocated to the shareholders of the Company in proportion to their current shareholdings in the
Company.
13.4 MINORITY RIGHTS
Norwegian law contains a number of protections for minority shareholders against oppression by the majority,
including but not limited to those described in this and preceding and following paragraphs. Any shareholder
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may petition the courts to have a decision of the Board or general meeting declared invalid on the grounds that it
unreasonably favours certain shareholders or third parties to the detriment of other shareholders or the Company
itself. In certain grave circumstances, shareholders may require the courts to dissolve the Company as a result of
such decisions. Shareholders holding in the aggregate 5% or more of the Company’s share capital have a right to
demand that the Company holds an extraordinary general meeting to discuss or resolve specific matters. In
addition, any shareholder may demand that the Company places an item on the agenda for any general meeting
as further described in section 13.1 above.
13.5 LEGAL CONSTRAINTS ON THE DISTRIBUTION OF DIVIDENDS
Dividends may be paid in cash or in some instances in kind. The Norwegian Public Limited Liability
Companies Act (as amended 1 July 2013) provides several constraints on the distribution of dividends:
• Pursuant to section 8-1 of the Norwegian Public Limited Liability Companies Act the Company may
only distribute dividend to the extent that the Company's net assets following the distribution covers
(i) the Company's share capital, (ii) the reserve for valuation differences and (iii) the reserve for
unrealized gains. In the amount that may be distributed, a deduction shall be made for the aggregate
nominal value of treasury shares that the Company has purchased for ownership or as security before
the balance day. It shall also be made a deduction for credit and collateral etc. according to sections 8-
7 to 8-10 from before the balance day which after these provisions shall lay within the scope of the
funds the company may distribute as dividend. It shall however not be made a deduction for credit and
collateral etc. that is reimbursed or settled before the time of decision, or credit to a shareholder to the
extent that the credit is settled by a netting in the dividend.
• The calculation of the distributable equity shall be made on the basis of the balance sheet in the
approved annual accounts for the last financial year, but so that the registered share capital as of the
date of the resolution to distribute dividend shall apply. Following the approval of the annual accounts
for the last financial year, the General Meeting may also authorise the Board of Directors to declare
dividend on the basis of the Company's annual accounts.
• Dividend may also be distributed by the General Meeting based on an interim balance sheet which has
been prepared and audited in accordance with the provisions applying to the annual accounts and with
a balance sheet date not further into the past than six months before the date of the General Meeting's
resolution.
• Dividend may only be distributed to the extent that the Company after the distribution has a sound
equity and liquidity.
• The amount of distributable dividends is calculated on the basis of the Company’s separate financial
statements and not on the basis of the consolidated financial statements of the Company and its
subsidiaries.
• Distribution of dividends is resolved by a majority vote at the General Meeting, and on the basis of a
proposal from the Board. The General Meeting cannot distribute a larger amount than what is
proposed or accepted by the Board.
The Norwegian Public Limited Liability Companies Act does not provide for any time limit after which
entitlement to dividends lapses. Subject to various exceptions, Norwegian law provides a limitation period of
three years from the date on which an obligation is due. There are no dividend restrictions or specific procedures
for non-Norwegian resident shareholders to claim dividends. For a description of withholding tax on dividends
applicable to non-Norwegian residents, see Chapter 15 “Norwegian taxation”.
13.6 MANDATORY TAKEOVER BIDS, SQUEZZE OUT, ETC.
The Norwegian Securities Trading Act requires any person, entity or consolidated group who becomes the
owner of Shares representing more than 1/3 of the voting rights of the Company to, within four weeks, make an
unconditional general offer for the purchase of the remaining Shares in the Company. A mandatory offer
obligation may also be triggered where a party acquires the right to become the owner of Shares which,
aggregated with the party's own shareholding, represent more than 1/3 of the voting rights in the Company, and
Oslo Børs decides that acquiring such rights must be regarded as effectively being an acquisition of the Shares
in question.
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The mandatory offer obligation ceases to apply if the person, entity or consolidated group sells the portion of the
Shares that exceeds the relevant threshold within four weeks of the date on which the mandatory offer obligation
was triggered.
In the mandatory offer, all shareholders shall be treated equally and the price to be paid per Share shall be at
least as high as the highest price paid or agreed by the acquirer during the last 6 months prior to the date the
threshold was exceeded. However, if it is clear that the market price was higher when the mandatory offer
obligation was triggered, the Norwegian Securities Trading Act states that the offer price shall be at least as high
as the market price. If the acquirer acquires or agrees to acquire additional Shares at a higher price prior to the
expiration of the mandatory offer period, the acquirer is obliged to restate its offer at such higher price. The
offer must be made in cash or contain a cash alternative at least equal in value to any non-cash offer. Pursuant to
the Norwegian Securities Trading Act section 6-6, a repeated bid obligation applies when passing 40% and 50%
of the votes of the Company.
In the event of a failure to make a mandatory offer or to sell the portion of the Shares that exceeds the threshold
within four weeks, Oslo Børs may force the acquirer to sell the Shares exceeding the threshold by public
auction. Moreover, a shareholder who fails to make an offer may not, as long as the mandatory offer obligation
remains in force, exercise rights in the Company, such as voting at a general meeting, without the consent of a
majority of the remaining shareholders. The shareholder may, however, exercise its rights to dividends and pre-
emption rights in the event of a share capital increase. If the shareholder neglects its duty to make a mandatory
offer, Oslo Børs may impose a cumulative daily fine that runs until the circumstance has been rectified.
Any person, entity or consolidated group who has passed any of the above-mentioned relevant thresholds for a
mandatory offer without triggering such an obligation due to an applicable exemption, and who has therefore
not previously made an offer for the remaining Shares in the Company in accordance with the mandatory offer
rules, is, as a main rule, obliged to make a mandatory offer in the event of a subsequent acquisition of Shares in
the Company (subsequent offer obligation).
Pursuant to the Norwegian Public Limited Companies Act, compulsory acquisition (squeeze out) of the
remaining shares may be initiated by a purchaser who has acquired 90 per cent or more of the shares (and
corresponding voting rights). If the shareholders being squeezed out do not accept the purchaser’s offer price,
the price shall be determined through a valuation by the court. The purchaser will anyhow obtain title to the
shares immediately. Each of the minority shareholders have a corresponding right to require that the majority
shareholder representing 90 per cent or more of the shares/votes, acquire their shares. Unless agreed, the price
shall be determined through a valuation by the court.
13.7 DISCLOSURE OBLIGATIONS
If a person’s, entity’s or consolidated group’s proportion of the total issued shares and/or rights to shares in a
company listed on a regulated market in Norway (with Norway as its home state, which will be the case for the
Company) reaches, exceeds or falls below the respective thresholds of 5%, 10%, 15%, 20%, 25%, 1/3, 50%, 2/3
or 90% of the share capital or the voting rights of that company, the person, entity or group in question has an
obligation under the Securities Trading Act to notify Oslo Børs and the issuer immediately. The same applies if
the disclosure thresholds are passed due to other circumstances, such as a change in the Company’s share
capital.
The disclosure obligation also requires an investor to disclose agreements giving an investor voting rights over
another party’s shares if the total holding of shares and voting rights cross any of the mentioned thresholds.
13.8 RIGHTS OF REDEMPTION AND REPURCHASE OF SHARES
The Company has not issued redeemable shares (i.e., shares redeemable without the shareholder’s consent).
The Company’s share capital may be reduced by reducing the par value of the Shares. Such a decision requires
the approval of two-thirds of the votes cast and share capital represented at a general meeting. Redemption of
individual Shares requires the consent of the holders of the Shares to be redeemed.
The company may purchase its own Shares if an authorization to the Board to do so has been given by the
shareholders at a general meeting with the approval of at least two-thirds of the aggregate number of votes cast
and share capital represented. The aggregate nominal value of treasury shares so acquired and held by the
Company is not permitted to exceed 10% of the Company’s share capital, and treasury shares may only be
acquired if the Company’s distributable equity, according to the latest adopted balance sheet, exceeds the
consideration to be paid for the shares. The authorization by the shareholders at the general meeting cannot be
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given for a period exceeding 18 months. At the date of this Prospectus, the Company has not granted such
authorization to the Board and does not hold any treasury shares. A Norwegian public limited company may not
subscribe for its own shares.
13.9 SHAREHOLDER VOTE ON CERTAIN REORGANISATIONS
A decision to merge with another company or to demerge requires a resolution of the Company’s shareholders
at a general meeting passed by at least two-thirds of the votes cast and share capital represented. A merger plan
or demerger plan signed by the Board along with certain other required documentation must be sent to all
shareholders and registered with the Register of Business Enterprises at least one month prior to the general
meeting.
13.10 DISTRIBUTION OF ASSETS ON LIQUIDATION
Under Norwegian law, a company may be liquidated by a resolution of the company’s shareholders in a general
meeting passed by the same vote as required with respect to amendments to the Articles of Association. The
shares rank equally in the event of a return on capital by the Company upon liquidation or otherwise.
13.11 ARTICLES OF ASSOCIATION
The Memorandum and Articles of Association of Aqualis as last amended on 8 October 2013 are as follows:
Article 1. Name
The name of the company is Aqualis ASA. The Company is a public limited liability company.
Article 2. Registered Office
The Company’s registered office is located in the City of Oslo.
Article 3. Purpose
The Company's purpose is to offer services to the marine and offshore industry and related industries, and to
develop pharmaceuticals and other healthcare products and all activities related hereto, on its own or through
ownership in other companies
Article 4. Share capital
The Company’s share capital is NOK 33,755,515 divided into 33,755,515 shares at a par value of NOK 1. The
shares shall be registered with the Norwegian Central Securities Depository.
Article 5. Board of Directors
The Board of the Company shall be composed of 3-8 members.
The Board will be elected for two years at the time and the members of the Board may be re-elected. If as a
result of a Board vote there is an equality of votes, the Chairman of the Board shall have the casting vote.
Article 6. Election Committee
The Company shall have an Election Committee. The committee shall consist of three members. The members
of the Committee shall be elected by the Company’s General Meeting, who also appoints the Committee’s
Chairperson. The General Meeting shall also adopt the rules of procedure for the Committee’s work.
Article 7. Signature
The company’s signature is held jointly by two of the members of the Board. The Board may grant power of
procuration.
Article 8. Ordinary Shareholders Meeting
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The ordinary shareholders’ meeting is to be held annually by the end of June. The notice to the shareholders
meeting shall be dispatched at the latest two weeks prior to the meeting being held. The notice shall give an
itemised agenda of items to be considered.
The following items must be considered at the shareholders meeting;
1. Adoption of the profit and loss accounts and the balance sheet, including the declaration of dividend.
2. Stipulation of remuneration to the Board and approval of remuneration to the state authorised
accountant.
3. Election of the Chairman of the Board, members of the Board and state authorised accountant.
4. Other matters specified by statute for consideration by the shareholders meeting.
Article 9. Electronic distribution of annual accounts and other documents for shareholders’ meetings
Documents relating to matters which shall be considered at a general meeting need not be sent to the
shareholders if the documents have been made available to the shareholders on the Company’s website. This
also includes documents that according to law shall be incorporated into or be attached to the notice of the
general meeting. A shareholder may require that documents which shall be considered at a general meeting are
sent to the shareholder.
Article 10. Approval of advance voting at a shareholder meeting
The Board may decide that the shareholders may vote in writing, including by way of electronic
communication, in a period before the general meeting. Voting in writing requires an adequately secure method
to authenticate the sender.
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14. LEGAL MATTERS
14.1 LEGAL PROCEEDINGS
The Company is not aware of any governmental, legal or arbitration proceedings, including any such
proceedings which are pending or threatened, during a period covering at least the previous 12 months which
may have, or have had in the recent past significant effects on the Company’s financial position or profitability.
14.2 RELATED PARTY TRANSACTIONS
14.2.1 Aqualis ASA
On 27 September 2013, the Company signed a final share purchase agreement to acquire Aqualis Offshore Ltd.
for a consideration of NOK 70 million on an equity basis with settlement in Aqualis shares valued at NOK 1.60
per share. The Company’s board member Øystein Stray Spetalen is the owner of Ferncliff TIH AS which
together with associated companies own and control 51% of the shares in Aqualis Offshore. Furthermore,
Martin Nes, the Company’s Chairman of the Board, is the chief executive officer of Ferncliff TIH AS.
Aqualis Offshore’s assets and liabilities were measured at fair value at the date of acquisition. An independent
auditor has prepared a report on the fair value of Aqualis Offshore, which is attached as Appendix G to this
Prospectus.
14.2.2 Aqualis Offshore Ltd
Earn-out agreement
In June 2013, Aqualis Offshore acquired 60% of the shares in Aqualis Offshore AS from Strata Marine &
Offshore AS, for a purchase price of NOK 1. The remaining 40% of the shares in Aqualis Offshore AS are
owned by the employees of that company. In addition to the initial purchase price, Strata Marine & Offshore is
entitled to an earn-out consideration equal to 60% of five times the net profit of Aqualis Offshore AS for the
year ending 31 December 2017. Aqualis Offshore may elect to pay the earn-out consideration in May 2014,
2015 or 2016 based on the net profit for the previous financial year, with a minimum amount of NOK 1,125,000
plus an annual interest rate of 1 year LIBOR plus 2% from 1 September and until payment of the earn-out
consideration. A provision for an estimated future earn-out payment of NOK 1.2 million has been included in
the pro forma consolidated balance sheet. Strata Marine & Offshore is owned by the board member Øystein
Stray Spetalen.
Borrowing facility
Aqualis Offshore AS has a borrowing facility of up to NOK 3 million with Strata Marine & Offshore. The
amount drawn is payable in full on 31 August 2017, and carries an annual nominal interest rate of 3 months
NIBOR plus 2%. The loan is subordinate to other debt, and is made on terms at least equivalent to those that
prevail in arm’s length transactions.
Revolving borrowing facility
Aqualis Offshore has a revolving borrowing facility of up to USD 4 million with a syndicate of lenders. The
borrowing facility expires on 4 April 2018, and carries an annual nominal interest rate of 3 months USD LIBOR
plus 2%. The lenders may demand early repayment if the existing shareholders of Aqualis Offshore cease to
control, directly or indirectly, at least 50% of the shares of the company. 90% of the borrowing facility is
provided by companies owned by Øystein Stray Spetalen, a board member of the Company. The loan is made
on terms at least equivalent to those that prevail in arm’s length transactions.
The Company and Aqualis Offshore have not entered into any other related party transactions during the period
covered by the historical financial information.
14.3 MATERIAL CONTRACTS
Except for the share purchase agreement to acquire Aqualis Offshore Ltd. mentioned above in section 14.2 and
5.1, the Company has not entered into any contracts of material importance for the Company’s business.
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15. NORWEGIAN TAXATION
The following is a summary of certain Norwegian tax considerations relevant to the acquisition, ownership and
disposition of shares by holders that are residents of Norway for purposes of Norwegian taxation ("resident
Shareholders") and holders that are not residents of Norway for such purposes ("non-resident Shareholders").
The summary is based on applicable Norwegian laws, rules and regulations as they exist as at the date of this
Prospectus. Such laws, rules and regulations may be subject to changes after this date, possibly on a retroactive
basis for the same tax year. The summary does not purport to be a comprehensive description of all the tax
considerations that may be relevant to the Shareholders and does not address foreign tax laws.
Each Shareholder should consult with and rely upon their own tax advisor to determine the particular tax
consequences for him or her and the applicability and effect of any Norwegian or foreign tax laws and possible
changes in such laws.
15.1 TAXATION OF DIVIDENDS
15.1.1 Resident corporate Shareholders
Norwegian corporate shareholders (i.e. limited liability companies and similar entities resident in Norway for
tax purposes) are generally exempt from tax on dividends received on shares in Norwegian limited liability
companies and similar entities. However, 3% of dividend income is deemed taxable as general income at a flat
rate of 28%, implying that dividends distributed from the Company to resident corporate Shareholders are
effectively taxed at a rate of 0.84%.
15.1.2 Resident personal Shareholders
Dividends distributed to personal Shareholders who are individuals resident in Norway for tax purposes, are
taxed as ordinary income for the Shareholder. Personal shareholders tax resident in Norway are in general liable
for tax on their worldwide income. General income is taxed at a flat rate of 28%. However, personal
Shareholders are entitled to deduct a calculated allowance when calculating their taxable dividend income. The
allowance is calculated on a share-by-share basis, and the allowance for each share is equal the cost price of the
share multiplied by a determined risk-free interest rate based on the effective rate after tax of interest on
treasury bills (Norwegian: "statskasseveksler") with three months maturity. The risk-free interest rate will be
fixed annually for the use of shareholders holding shares on 31 December in the income year in question. The
Directorate of Taxes announces the risk free-interest rate in January the year after the income. The risk-free
interest rate for 2012, announced in January 2013, was 1.1%. The tax-free allowance will be calculated on each
individual share, not on a portfolio basis.
Any part of the calculated allowance one year exceeding dividend distributed on the same share ("excess
allowance") can be carried forward and set off against future dividends received on, or capital gains upon
realisation of the same share. Furthermore, excess allowance can be added to the cost price of the share and
included in basis for calculating the allowance on the same share the following year.
15.1.3 Non-resident Shareholders
Dividends distributed to Shareholders not resident in Norway for tax purposes are in general subject to
withholding tax at a rate of 25%, unless otherwise provided for in an applicable tax treaty (or exemptions for
EEA shareholders apply, see below). The company distributing the dividend is responsible for the withholding
of tax. Norway has entered into tax treaties with approximate 80 countries. In most tax treaties the withholding
tax rate is reduced to 15%.
Non-resident Shareholders, who have been subject to a higher withholding tax than applicable in the relevant tax
treaty, may apply to the Norwegian tax authorities for a refund of the excess withholding tax deducted.. The
application is to be filed with the Central Office – Foreign Tax Affairs (in Norwegian: "Sentralskattekontoret for
utenlandssaker").
A not resident personal Shareholder resident in EEA may apply individually to Norwegian tax authorities for a
refund of an amount corresponding to the calculated tax-free allowance on each individual share, see section
15.1.2 above regarding resident personal Shareholder.
Dividends paid to a non-resident Shareholder in respect of nominee registered shares will be subject to
withholding tax at the general rate of 25 %, unless the nominee, by agreeing to provide certain information
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regarding beneficial owners, has obtained approval for reduced treaty-rate withholding from the Central Office –
Foreign Tax Affairs.
In the case where a non-resident Shareholder is engaged in business activities in Norway and the shares with
respect to which the dividend is paid are effectively connected with such activities, the dividend will be taxed in
the same manner as dividend paid to a resident Shareholder, i.e. dividends distributed to a non-resident
Shareholder will be taxed at an effective rate of 0.84%.
15.2 TAXATION UPON REALIZATION OF SHARES
15.2.1 Resident corporate Shareholders
Norwegian corporate Shareholders are generally exempt from tax on capital gains upon the realization of shares
in Norwegian limited liability companies and similar entities. Losses upon the realization and costs incurred in
connection with the purchase and realization of such shares are not deductible for tax purposes.
15.2.2 Resident personal Shareholders
Sale, redemption or other disposal of shares is considered a realization for Norwegian tax purposes. A capital
gain or loss generated by a personal Shareholder through realization of shares is taxable or tax deductible in
Norway. Such capital gain or loss is included in or deducted from the basis for computation of general income
in the year of realization. General income is taxable at a rate of 28% and losses are deductible against general
income.
The taxable gain or loss is calculated per share as the difference between the consideration received and the cost
price of the share, including any costs incurred in relation to the acquisition or realization of the share. Any
unused allowance on a share may be set off against capital gains related to the realization of the same share, but
may not lead to or increase a deductible loss i.e. any unused allowance exceeding the capital gain upon the
realization of the share will be annulled. Furthermore, unused allowance may not be set of against gains from
realization of other shares.
If a Shareholder disposes of shares acquired at different times, the shares that were first acquired will be deemed
as first sold (the FIFO-principle) when calculating a taxable gain or loss.
Costs incurred in connection with the purchase and sale of shares may be deducted in the year of sale.
15.2.3 Non-resident Shareholders
Gains from the sale or other disposition of shares by a non-resident Shareholder will not be subject to taxation in
Norway unless (i) the shares are effectively connected with business activities carried out or managed in
Norway, or (ii) the shares are held by an individual who has been a resident of Norway for tax purposes with
unsettled/postponed exit tax calculated on the shares at the time of cessation as Norwegian tax resident.
15.3 NET WEALTH TAX
A resident Shareholder that is a joint stock company or a similar entity is exempted from net wealth tax. For
other resident Shareholders, the shares will form part of the basis for the calculation of net wealth tax. The
marginal net wealth tax rate is 1.1% of the value assessed.
Listed shares are valued at 100% of their quoted value on 1 January in the assessment year.
A non-resident Shareholder is not subject to Norwegian net wealth tax with respect to the shares, unless his
shareholding is effectively connected with a business carried out by the Shareholder in Norway.
15.4 INHERITANCE TAX
When shares are transferred either through inheritance or as a gift, such transfer may give rise to inheritance or
gift tax in Norway if the deceased, at the time of death, or the donor, at the time of the gift, is a resident or
citizen of Norway or if the shares are effectively connected with a business carried out through permanent
establishment in Norway. However, in the case of inheritance tax, if the deceased was a citizen but not a
resident of Norway, Norwegian inheritance tax will not be levied if inheritance tax, or a similar tax, is levied by
the deceased's country of residence. In the case of listed shares, the basis for the tax calculation is the market
value of the shares.
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15.5 STAMP DUTY
There is currently no Norwegian stamp duty or transfer tax on the transfer or issuance of shares.
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16. ADDITIONAL INFORMATION
16.1 DOCUMENTS ON DISPLAY
Copies of the following documents will be available for inspection at the Company’s business address at Sjølyst
Plass 2, 0278 Oslo, Norway for a period of twelve months from the date of this Prospectus.
The Company’s Articles of Association and Certificate of Incorporation
The Company’s financial statements as of, and for the years ended, 31 December 2012, 2011 and 2010
Interim financial statements for the Company for Q2 2013
Interim financial statements for Aqualis Offshore for the six months ended 30 June 2013
Independent assurance report on pro forma financial information
Independent report on fair value of Aqualis Offshore Ltd
16.2 DOCUMENTS INCORPORATED BY REFERENCE
The information incorporated by reference in this Prospectus should be read in connection with the cross
reference list as set out in the table below. Except as provided in this section, no other information is
incorporated by reference into this Prospectus.
Section in Prospectus Incorporated by reference Reference document and link
10 Clavis Pharma ASA – Q2 2013 report http://www.aqualis.no/investors/reports-and-
presentations/quarterly-reports
10 Clavis Pharma ASA annual report, accounting principles, notes and auditor’s report for the
financial year 2012
http://www. aqualis.no/investors/reports-and-presentations/annual-reports
10 Clavis Pharma ASA annual report, accounting principles, notes and auditor’s report for the
financial year 2011
http://www. aqualis.no/investors/reports-and-presentations/annual-reports
10 Clavis Pharma ASA annual report, accounting principles, notes and auditor’s report for the
financial year 2010
http://www. aqualis.no/investors/reports-and-presentations/annual-reports
16.3 STATEMENT REGARDING SOURCES
The Company confirms that when information in this Prospectus has been sourced from a third party it has been
accurately reproduced and as far as the Company is aware and is able to ascertain from the information
published by that third party, no facts have been omitted which would render the reproduced information
inaccurate or misleading.
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17. SELLING AND TRANSFER RESTRICTIONS
17.1 GENERAL
The grant of Subscription Rights and issue of Offer Shares upon exercise of Subscription Rights and the offer of
unsubscribed Offer Shares to persons resident in, or who are citizens of countries other than Norway, may be
affected by the laws of the relevant jurisdiction. Eligible Shareholders should consult their professional advisers
as to whether they require any governmental or other consent or need to observe any other formalities to enable
them to exercise Subscription Rights or subscribe for Offer Shares.
The Company does not intend to take any action to permit a public offering of the Offer Shares in any
jurisdiction other than Norway. Receipt of this Prospectus will not constitute an offer in those jurisdictions in
which it would be illegal to make an offer and, in those circumstances, this Prospectus is for information only
and should not be copied or redistributed. Except as otherwise disclosed in this Prospectus, if an Eligible
Shareholder receives a copy of this Prospectus in any territory other than Norway, the Eligible Shareholder may
not treat this Prospectus as constituting an invitation or offer to it, nor should the Eligible Shareholder in any
event deal in the Offer Shares, unless, in the relevant jurisdiction, such an invitation or offer could lawfully be
made to that Eligible Shareholder, or the Subscription Rights and Offer Shares could lawfully be dealt in
without contravention of any unfulfilled registration or other legal requirements. Accordingly, if an Eligible
Shareholder receives a copy of this Prospectus, the Eligible Shareholder should not distribute or send the same,
or transfer the Subscription Rights and/or Offer Shares to any person or in or into any jurisdiction where to do
so would or might contravene local securities laws or regulations. If the Eligible Shareholder forwards this
Prospectus into any such territories (whether under a contractual or legal obligation or otherwise), the Eligible
Shareholder should direct the recipient’s attention to the contents of this section 17.1.
Except as otherwise noted in this Prospectus and subject to certain exceptions: (i) the Subscription Rights and
Offer Shares being granted or offered, respectively, in the Rights Issue may not be offered, sold, resold,
transferred or delivered, directly or indirectly, in or into, Member States of the EEA that have not implemented
the Prospectus Directive, Australia, Canada, Hong Kong, Japan, the United States or any other jurisdiction in
which it would not be permissible to offer the Subscription Rights and/or the Offer Shares (the “Ineligible
Jurisdictions”); (ii) this Prospectus may not be sent to any person in any Ineligible Jurisdiction; and (iii) the
crediting of Subscription Rights to an account of an Ineligible Shareholder or other person in an Ineligible
Jurisdiction or a citizen of an Ineligible Jurisdiction (referred to as “Ineligible Persons”) does not constitute an
offer to such persons of the Subscription Rights or the Offer Shares. Ineligible Persons may not exercise
Subscription Rights.
If an Eligible Shareholder takes up, delivers or otherwise transfers Subscription Rights, exercises Subscription
Rights to obtain Offer Shares or trades or otherwise deals in the Subscription Rights and Offer Shares, that
Eligible Shareholder will be deemed to have made or, in some cases, be required to make, the following
representations and warranties to the Company and any person acting on the Company’s or its behalf:
(i) the Eligible Shareholder is not located in an Ineligible Jurisdiction;
(ii) the Eligible Shareholder is not an Ineligible Person;
(iii) the Eligible Shareholder is not acting, and has not acted, for the account or benefit of an Ineligible
Person;
(iv) the Eligible Shareholder is located outside the United States and any person for whose account or
benefit it is acting on a non-discretionary basis is located outside the United States and, upon
acquiring Offer Shares, the Eligible Shareholder and any such person will be located outside the
United States;
(v) the Eligible Shareholder understands that the Subscription Rights and Offer Shares have not been
and will not be registered under the US Securities Act and may not be offered, sold, pledged,
resold, granted, delivered, allocated, taken up or otherwise transferred within the United States
except pursuant to an exemption from, or in a transaction not subject to, registration under the US
Securities Act; and
(vi) the Eligible Shareholder may lawfully be offered, take up, subscribe for and receive Subscription
Rights and Offer Shares in the jurisdiction in which it resides or is currently located.
The Company and any persons acting on behalf of the Company, including the Manager, will rely upon the
Eligible Shareholder’s representations and warranties. Any provision of false information or subsequent breach
of these representations and warranties may subject the Eligible Shareholder to liability.
AQUALIS ASA
92
If a person is acting on behalf of a holder of Subscription Rights (including, without limitation, as a nominee,
custodian or trustee), that person will be required to provide the foregoing representations and warranties to the
Company with respect to the exercise of Subscription Rights on behalf of the holder. If such person cannot or is
unable to provide the foregoing representations and warranties, the Company will not be bound to authorize the
allocation of any of the Subscription Rights and Offer Shares to that person or the person on whose behalf the
other is acting. Subject to the specific restrictions described below, if an Eligible Shareholder (including,
without limitation, its nominees and trustees) is outside Norway and wishes to exercise or otherwise deal in or
subscribe for Subscription Rights and/or Offer Shares, the Eligible Shareholder must satisfy itself as to full
observance of the applicable laws of any relevant territory including obtaining any requisite governmental or
other consents, observing any other requisite formalities and paying any issue, transfer or other taxes due in such
territories.
The information set out in this section 17.1 is intended as a general guide only. If the Eligible Shareholder
is in any doubt as to whether it is eligible to subscribe for the Offer Shares, that Eligible Shareholder
should consult its professional adviser without delay.
Subscription Rights will initially be credited to financial intermediaries for the accounts of shareholders who
hold Shares registered through a financial intermediary on the Record Date. Subject to certain exceptions,
financial intermediaries, which include brokers, custodians and nominees, may not exercise any Subscription
Rights on behalf of any person in the Ineligible Jurisdictions or any Ineligible Persons and may be required in
connection with any exercise of Subscription Rights to provide certifications to that effect.
Subject to certain exceptions, financial intermediaries are not permitted to send this Prospectus or any other
information about the Rights Issue in or into any Ineligible Jurisdiction or to any Ineligible Persons. Subject to
certain exceptions, exercise instructions or certifications sent from or postmarked in any Ineligible Jurisdiction
will be deemed to be invalid and Offer Shares will not be delivered to an addressee in any Ineligible
Jurisdiction. The Company reserves the right to reject any exercise (or revocation of such exercise) in the name
of any person who provides an address in an Ineligible Jurisdiction for acceptance, revocation of exercise or
delivery of such Subscription Rights and Offer Shares, who is unable to represent or warrant that such person is
not in an Ineligible Jurisdiction and is not an Ineligible Person, who is acting on a non-discretionary basis for
such persons, or who appears to the Company or its agents to have executed its exercise instructions or
certifications in, or dispatched them from, an Ineligible Jurisdiction. Furthermore, the Company reserves the
right, with sole and absolute discretion, to treat as invalid any exercise or purported exercise of Subscription
Rights which appears to have been executed, effected or dispatched in a manner that may involve a breach or
violation of the laws or regulations of any jurisdiction.
Notwithstanding any other provision of this Prospectus, the Company reserves the right to permit a holder to
exercise its Subscription Rights if the Company, at its absolute discretion, is satisfied that the transaction in
question is exempt from or not subject to the laws or regulations giving rise to the restrictions in question.
Applicable exemptions in certain jurisdictions are described further below. In any such case, the Company does
not accept any liability for any actions that a holder takes or for any consequences that it may suffer as a result
of the Company accepting the holder’s exercise of Subscription Rights.
No action has been or will be taken by the Manager to permit the possession of this Prospectus (or any other
offering or publicity materials or application or subscription form(s) relating to the Rights Issue) in any
jurisdiction where such distribution may lead to a breach of any law or regulatory requirement.
Neither the Company nor the Manager, nor any of their respective representatives, is making any representation
to any offeree, subscriber or recipient of Subscription Rights and/or Offer Shares regarding the legality of an
investment in the Subscription Rights and/or the Offer Shares by such offeree, subscriber or purchaser under the
laws applicable to such offeree, subscriber or recipient. Each Eligible Shareholder should consult its own
advisers before subscribing for Offer Shares or purchasing Subscription Rights and/or Offer Shares. Eligible
Shareholders are required to make their independent assessment of the legal, tax, business, financial and other
consequences of a subscription for Offer Shares.
A further description of certain restrictions in relation to the Subscription Rights and the Offer Shares in certain
jurisdictions is set out below.
17.2 UNITED STATES
The Subscription Rights and the Offer Shares have not been and will not be registered under the US Securities
Act or with any securities regulatory authority of any state or other jurisdiction of the United States and may not
AQUALIS ASA
93
be offered, sold, taken up, exercised, resold, transferred or delivered, directly or indirectly, within the United
States. There will be no public offer of the Subscription Rights and Offer Shares in the United States. A
notification of exercise of Subscription Rights and subscription of Offer Shares in contravention of the above
may be deemed to be invalid.
The Subscription Rights and Offer Shares are being offered and sold outside the United States in reliance on
Regulation S under the US Securities Act.
Accordingly, this document will not be sent to any shareholder with a registered address in the United States. In
addition, the Company and the Manager reserve the right to reject any instruction sent by or on behalf of any
account holder with a registered address in the United States in respect of the Subscription Rights and/or the
Offer Shares.
Until 40 days after the commencement of the Rights Issue, any offer or sale of the Offer Shares within the
United States by any dealer (whether or not participating in the Rights Issue) may violate the registration
requirements of the US Securities Act.
The Subscription Rights and the Offer Shares have not been approved or disapproved by the United States
Securities and Exchange Commission, any state securities commission in the United States or any other United
States regulatory authority nor have any of the foregoing authorities passed upon or endorsed the merits of the
offering of the Subscription Rights and Offer Shares or the accuracy or adequacy of this document. Any
representation to the contrary is a criminal offense in the United States.
Each person to which Subscription Rights and/or Offer Shares are distributed, offered or sold outside the United
States will be deemed, by its subscription for Offer Shares or purchase of Offer Shares, to have represented and
agreed, on its behalf and on behalf of any Eligible Shareholder accounts for which it is subscribing for Offer
Shares or purchasing Subscription Rights and/or Offer Shares, as the case may be, that:
(i) it is acquiring the Subscription Rights and/or the Offer Shares from the Company or the Manager
in an "offshore transaction" as defined in Regulation S under the US Securities Act; and
(ii) the Subscription Rights and/or the Offer Shares have not been offered to it by the Company or the
Underwriters by means of any "directed selling efforts" as defined in Regulation S under the US
Securities Act.
17.3 EEA SELLING RESTRICTIONS
In relation to each Member State of the EEA other than Norway, which has implemented the Prospectus
Directive (each a “Relevant Member State”), with effect from and including the relevant implementation date,
an offer to the public of any Offer Shares which are the subject of the Rights Issue contemplated by this
Prospectus may not be made in that Relevant Member State, other than the Rights Issue in Norway as described
in this Prospectus, once the Prospectus has been prepared and published in accordance with the Prospectus
Directive as implemented in Norway, except that an offer to the public in that Relevant Member State of any
Offer Shares may be made at any time with effect from and including the relevant implementation date under
the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant
Member State:
(i) to legal entities which are qualified investors as defined in the Prospectus Directive;
(ii) to fewer than 100, or, if the Relevant Member State has implemented the relevant provisions of the
2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as
defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to
obtaining the prior consent of the Manager for any such offer; or
(iii) in any other circumstances falling within Article 3(2) of the Prospectus Directive;
provided that no such offer of Offer Shares shall require the Company or any Manager to publish a Prospectus
pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the
Prospectus Directive.
For the purposes of this provision, the expression an “offer to the public” in relation to any Offer Shares in any
Relevant Member State means the communication in any form and by any means of sufficient information on
the terms of the offer and any Offer Shares to be offered so as to enable an Eligible Shareholder to decide to
subscribe for any Offer Shares, as the same may be varied in that Relevant Member State by any measure
implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means
AQUALIS ASA
94
Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent
implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant
Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.
The EEA selling restriction is in addition to any other selling restrictions set out in this Prospectus.
17.4 NOTICE TO AUSTRALIAN ELIGIBLE SHAREHOLDERS
This Prospectus is not a disclosure document under Chapter 6D of the Corporations Act 2001 (Cth) (the
“Australian Corporations Act”), has not been lodged with the Australian Securities and Investments
Commission and does not purport to include the information required of a disclosure document under Chapter
6D of the Australian Corporations Act.
Accordingly:
a) the offer of the Subscription Rights and Offer Shares in Australia may only be made to persons who are
"sophisticated Eligible Shareholders" (within the meaning of section 708(8) of the Australian
Corporations Act) or to "professional Eligible Shareholders" (within the meaning of section 708(11) of
the Australian Corporations Act) or otherwise pursuant to one or more exemptions contained in section
708(8) of the Australian Corporations Act, so that it is lawful to offer, or invite applications for, the
Subscription Rights and Offer Shares without disclosure to persons under Chapter 6D of the Australian
Corporations Act; and
b) this Prospectus may only be made available in Australia to persons as set forth in clause (a) above.
If you acquire Subscription Rights or Offer Shares, then you (i) represent and warrant that you are a person to
whom an offer of securities can be made without a disclosure document in accordance with subsections 708(8)
or (11) of the Australian Corporations Act and (ii) agree not to sell or offer for sale any Offer Shares in Australia
within 12 months after their issue to the offeree or invitee under this Prospectus, except in circumstances where
disclosure to Eligible Shareholders under Chapter 6D would not be required under the Australian Corporations
Act.
No person receiving a copy of this Prospectus and/or receiving a credit of Subscription Rights to an account in
VPS with a bank or financial institution in Australia may treat the same as constituting an invitation or offer to
such person nor should such person in any event deal in Subscription Rights in VPS unless such an invitation or
offer could lawfully be made to such person without contravention of any registration or other legal
requirements. In such circumstances, this document is to be treated as received for information only and should
not be copied or redistributed.
17.5 NOTICE TO CANADIAN ELIGIBLE SHAREHOLDERS
The Offer Shares have not been and will not be qualified by a prospectus for sale to the public in Canada under
applicable Canadian securities laws, and accordingly, any offer or sale of the Subscription Rights or Offer
Shares in Canada must be made pursuant to an exemption from the applicable prospectus and registration
requirements, and otherwise in compliance with applicable Canadian laws.
17.6 NOTICE TO HONG KONG ELIGIBLE SHAREHOLDERS
The contents of this Prospectus have not been reviewed by any regulatory authority in Hong Kong. You are
advised to exercise caution in relation to the Rights Issue. If you are in any doubt regarding any of the contents
of this Prospectus, you should obtain independent professional advice. This Prospectus does not constitute an
offer or sale in Hong Kong of the Offer Shares and no person may offer or sell in Hong Kong, by means of this
Prospectus other than to (a) professional Eligible Shareholders within the meaning of Part I of Schedule 1 to the
Securities and Futures Ordinance of Hong Kong (Cap. 571) (“SFO”) and any rules made under the SFO
(“professional Eligible Shareholders”) or (b) in other circumstances which do not result in the document being a
“prospectus” as defined in the Companies Ordinance of Hong Kong (Cap. 32) (“CO”) or which do not constitute
an offer or invitation to the public for the purposes of the CO or the SFO. No person shall issue or possess for
the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to
Subscription Rights or Offer Shares which is directed at, or the contents of which are likely to be accessed or
read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other
than with respect to those Subscription Rights or Offer Shares which are or are intended to be disposed of only
to persons outside Hong Kong or only to such professional Eligible Shareholders.
AQUALIS ASA
95
Existing shareholders agree not to offer or sell in Hong Kong any Offer Shares other than (a) to professional
Eligible Shareholders; or (b) in other circumstances which do not result in the document offering for sale the
Offer Shares being a “prospectus” as defined in the CO or which do not constitute an offer to the public within
the meaning of the CO or the SFO. Existing shareholders also agree not to issue or have in their possession for
the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to
the Subscription Rights or the Offer Shares, which is directed at, or the contents of which are likely to be
accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong
Kong) other than with respect to the Subscription Rights or the Offer Shares which are or are intended to be
disposed of only to persons outside Hong Kong or only to professional Eligible Shareholders.
17.7 NOTICE TO JAPANESE ELIGIBLE SHAREHOLDERS
The Rights Issue hereby has not been and will not be registered under the Financial Instruments and Exchange
Law of Japan (the “Financial Instruments and Exchange Law”). Accordingly, each Underwriter has represented,
warranted and agreed that the Offer Shares to which it each subscribes will be subscribed by it as principal and
that, in connection with the offering made hereby, it will not, directly or indirectly, offer or sell any Offer Shares
in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident
in Japan, including any corporation or other entity organised under the laws of Japan) or to others for re-offering
or resale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan, except pursuant to an
exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments
and Exchange Law and other relevant laws and regulations of Japan.
17.8 NOTICE TO SWISS ELIGIBLE SHAREHOLDERS
This Prospectus is not being publicly distributed in Switzerland. Each copy of this document is addressed to a
specifically named recipient and may not be passed on to third parties. The Subscription Rights or Offer Shares
are not being offered to the public in or from Switzerland, and neither this document, nor any other offering
material in relation to the Subscription Rights or Offer Shares may be distributed in connection with any such
public offering.
AQUALIS ASA
96
18. DEFINITIONS AND GLOSSARY OF TERMS
The following definitions and glossary apply in this Prospectus unless otherwise dictated by the context,
including the foregoing pages of this Prospectus.
Aqualis Aqualis ASA
Aqualis Offshore Aqualis Offshore Ltd.
Board The board of directors of the Company
Carnegie Carnegie AS
CCGP Clavis Pharma ASA Corporate Governance Policy
CEO Chief Executive Officer
CET Central European Time
Clavis Pharma Clavis Pharma ASA
Clovis Oncology Clovis Oncology, Inc.
Commission Regulation (EC) No 809/2004
Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council, as amended from time to time
Company Aqualis ASA
EEA European Economic Area
EGM Extraordinary General Meeting
Employee Offering Offering of up to 5 000 000 shares directed towards the employees of both the Company and Aqualis
Offshore
EU European Union
EUR Euro, the single currency of the European Union member states participating in the European Monetary
Union
Excess allowance The calculated allowance one year exceeding dividend distributed on the same share
GBP Pound Sterling, the lawful currency of the United Kingdom
Group The combined company post Transaction consisting of Aqualis ASA and the wholly owned subsidiary, Aqualis Offshore Ltd.
IFRS International Financial Reporting Standards
Ineligible Jurisdiction Jurisdictions where the Prospectus may not be distributed and/or with legislation that, according to the Company's assessment, prohibits or otherwise restricts subscription for Offer Shares.
Ineligible Persons Shareholders resident in jurisdictions where the Prospectus may not be distributed and/or with
legislation that, according to the Company’s assessment, prohibits or otherwise restricts subscription for Offer Shares.
ISIN Securities number in the Norwegian Central Securities Depository (VPS)
ISO 9001 ISO 9001:2008 (International Organization for Standardization): Standard setting out the requirements of a quality management system.
IPO Initial Public Offering
LOI Letter of Intent to acquire 100% of the shares in Aqualis Offshore entered into on 4 September, 2013.
Manager Carnegie AS
New Shares 43 750 000 new shares to be issued as consideration for the Transaction
NOK Norwegian Kroner, the lawful currency of the Kingdom of Norway
Non-resident Shareholders Shareholders that are not residents of Norway
Norwegian Public Limited
Companies Act
The Norwegian Public Limited Liability Companies Act of 13 June 1997 no. 45, as amended from time
to time (Allmennaksjeloven)
Norwegian Securities Trading Act The Norwegian Securities Trading Act of June 29, 2007 no. 75
Offerings Rights Issue and Employee Offering
Offering Shares Offer Shares together with Employee Offer shares
Offer Shares 33 755 515 offer shares to be issued in the Rights Issue
Oslo Børs Oslo Børs ASA (the Oslo Stock Exchange)
Prospectus This Prospectus dated 11October 2013
Prospectus Directive
Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003, as amended
from time to time
Registrar Nordea Bank Issuer Services
Resident Shareholders Shareholders that are residents of Norway for purposes of Norwegian taxation
Rights Issue New share issue in Aqualis of NOK 54 008 824 million with pre-emptive rights for shareholders of
Aqualis
Securities Trading Act The Norwegian Securities Trading Act of 29 June 2007 no. 75 as amended from time to time
(“Verdipapirhandelloven”)
Sellers Aqualis Offshore shareholders
Senior Executives Chief Executive Officer and other senior executives of Aqualis ASA
AQUALIS ASA
97
Shareholder A holder of a Share
Shares The ordinary shares in the capital of Aqualis, each with a par value of NOK 1
Sophisticated Eligible Shareholders Persons who are within the meaning of section 708(8) of the Australian Corporations Act).
SPA Share Purchase Agreement to acquire 100% of the shares in Aqualis Offshore, signed 27 September,
2013.
Subscription Rights 33 755 515 subscription rights in the Rights Issue
Total Underwriting Commitment NOK 54 million in the Rights Issue
Transaction Aqualis’ acquisition of Aqualis Offshore Ltd.
Underwriters Strata Marine & Offshore AS, Gross Management AS, AS Ferncliff and Anko Invest AS
US United States of America
USD United States Dollars, the lawful currency of the United States of America.
VPS The Norwegian Central Securities Depository, which organises the Norwegian paperless securities
registration system (Verdipapirsentralen).
VPS account An account with VPS for the registration of holdings of securities
APPENDIX A: ARTICLES OF ASSOCIATION
OFFICE TRANSLATION
For information purposes only
Articles of Association
Aqualis ASA
(as per October 2013)
Article 1. Name
The name of the company is Aqualis ASA. The company is a public limited company.
Article 2. Registered Office
The Company’s registered office is located in the City of Oslo.
Article 3. Purpose
The Company's purpose is to offer services to the marine and offshore industry and related
industries, and to develop pharmaceuticals and other healthcare products and all activities
related hereto, on its own or through ownership in other companies
Article 4. Share-capital
The Company’s share capital is NOK 33,755,515 divided into 33,755,515 shares at a par value of
NOK 1. The shares shall be registered with the Norwegian Central Securities Depository.
Article 5. Board of Directors
The Board of the Company shall be composed of 3-8 members.
The Board will be elected for two years at the time and the members of the Board may be re-
elected. If as a result of a Board vote there is an equality of votes, the Chairman of the Board shall
have the casting vote.
Article 6. Election Committee
The Company shall have an Election Committee. The committee shall consist of up to three
members. The members of the Committee shall be elected by the Company’s General Meeting,
who also appoints the Committee’s Chairperson. The General Meeting shall also adopt the rules
of procedure for the Committee’s work.
Article 7. Signature
The company’s signature is held jointly by two of the members of the Board. The Board may
grant power of procuration.
OFFICE TRANSLATION
For information purposes only 2
Article 8. Ordinary Shareholders Meeting
The ordinary shareholders’ meeting is to be held annually by the end of June. The notice to the
shareholders meeting shall be dispatched at the latest two weeks prior to the meeting being held.
The notice shall give an itemised agenda of items to be considered.
The following items must be considered at the shareholders meeting;
1. Adoption of the profit and loss accounts and the balance sheet, including the declaration
of dividend.
2. Stipulation of remuneration to the Board and approval of remuneration to the state
authorised accountant.
3. Election of the Chairman of the Board, members of the Board and state authorised
accountant.
4. Other matters specified by statute for consideration by the shareholders meeting.
§ 9. Electronic distribution of annual accounts and other documents for shareholders’ meetings
Documents relating to matters which shall be considered at a general meeting need not be sent to
the shareholders if the documents have been made available to the shareholders on the
Company’s website. This also includes documents that according to law shall be incorporated
into or be attached to the notice of the general meeting. A shareholder may require that
documents which shall be considered at a general meeting is sent to the shareholder.
§ 10. Approval of advance voting at a shareholder meeting
The Board may decide that the shareholders may vote in writing, including by way of electronic
communication, in a period before the general meeting. Voting in writing requires an adequately
secure method to authenticate the sender.
APPENDIX B: INTERIM FINANCIAL INFORMATION FOR AQUALIS OFFSHORE LTD FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2013
Aqualis Offshore Limited
Unaudited interim condensed
consolidated financial statements
for the six months ended 30 June 2013
Aqualis Offshore Ltd
Interim condensed consolidated income statement
for the six months ended 30 June 2013
Period ended
Notes 30June
2013
US$
Revenue
Cost of sales
Gross loss
Administration expenses
Operating loss
Finance Cost
Finance Income
loss before taxation
Taxation
312,849
(598,410)
{285,561)
(637,481)
{923,042)
(12,406)
826
(934,622)
Non-controlling Interest {18,978)
Profit /(loss) for the period and total
comprehensive income/(loss) for the period (953,601)
The income statement has been prepared on the basis that all operations are continuing
operations.
Aqualis Offshore Ltd
Interim condensed consolidated statement of changes in equity
For the six months ended 30 June 2013
For the period ended 30 June 2013
Share
capital
US$
Retained
earnings
US$
Non controlling
Interest
Total
equity
US$
Issue of share capital during the period 100,000 100,000
Profit (loss) for the period
Non-controlling Interest
(953,601) 13,662
(953,601)
13,662
Balance at 30 June 2013 100,000 {953,601) 13,662 {839,939}
Aqualis Offshore Ltd
Interim condensed consolidated statement of financial position
as at 30 June 2013
30 June 2013
Assets
Non-current assets
Plant and equipment
Goodwill
US$
116,973
7,975
Total non-current assets 124,949
Current assets
Trade and other receivables
Prepayments
Other debtors
Cash and cash equivalents
557,165
109,740
389,603
991,420
Total current assets 2,047,927
Total assets 2,172,876
Equity and liabilities
Issued capital 100,000
Retained earnings (953,601)
Equity attributable to equity holders of the parent (853,601)
Non-controlling interest 13,662
Total equity (839,939)
Non-current liabilities
Interest bearing loans and borrowings 2,343,913
Total non-current liabilities 2,343,913
Current liabilities
Accounts payable and accrued liabilities 643,776
Taxes and social securities 25,125
Total current liabilities 668,901
Total liabilities 3,012,814
Total equity and liabilities 2,172,876
Aqualis Offshore Ltd
Interim condensed consolidated statement of cash flows
For the six months ended 30 June 2013
30June
2013
US$
Operating activities
Profit/(loss) before tax from continuing operations Adjustments
to reconcile profit before tax to net cash flows: Depreciation
and impairment of property,plant and equipment Amortisation
and impairment of intangible assets
Finance income
Finance costs
Worl<ing capital adjustments:
Increase in trade and other receivables and prepayments
Decrease in trade and other payables
Cash flows from operating activities
Interest received
Interest paid
Net cash flows from operating activities
(934,622)
4,128
(826)
12,406
(747,136)
504,031
(1,162,018)
826
(12,406)
(1,173,599)
Investing activities
Purchase of property, plant and equipment
Acquisition of a subsidiary,net of cash acquired
Net cash flows used in investing activities
(79,254)
144,273
65,019
Financing activities
Shareholders' loan
Issue of share capital
2,000,000
100,000
Net (decrease)/increase in cash and cash equivalents
Net foreign exchange difference
Cash and cash equivalents at 1January
Cash and cash equivalents at 30 June
991,420 991,420
Notes to interim condensed consolidated financia l statements
The fai r va lu es of th e id e nt ifiable assets and liabilities of Aqua lis Norway as at th e date of acquisi tion were:
Assets
Property, plant and equipme nt
Cash
Trade receivables
Other debtors
Uabi litles Trade
payab!es Other
creditors
Total identifiable net assets/(net liabiliti es)
30 June
2013
US$
41,810
144,273
304,131
5,241
448
(509,195)
(13,292)
Total iden tifiable ne t asset s at fai r value
Minority Interest of aquisition of business
Good will arising on acquisi tion ( proYisional)'
Purchase consideration transferred
Minority lnterest as per ba lance sheet
Minority Interest of aquisitoi n of business
Profit during the year
5,317
(18,978)
nil
nil
5,317
7,975
(13,662)
Operating profit/loss
Operating profit is stated after (charging)/cred i tlng:
Depreciation charge
(Galn) /loss on foreign exchange transact ons
Revenue and other Income
Sales revenue
Other income
Tota l sa les revenue
30 June
2013
US$
4,128
18,223
22,352
30 June
2013
US$
312,126
723
312,849
Fixed assets
Cost
Accum ulated de preciaton
Net Book Value 30/06/2013
Trade and oth e r receivabl es
Trade receivables
Unbille d revenue
Othe r receivables
Tr ade and other payables
Tra de paya bles
Accruals and deferred incom e
Other taxes and social securites
long term liabilities
Amounts owed to related unde rtaki ngs
Norway loan with Strata
Issu e d sh are ca pital
100,000 Ordinary share of $1each
Leasehold Furniture & Computers &
Im provements Equipment Softwares
45,100 56,331 27,998
(9,734) (2,721)
45,100 46,597 25,277
Total
US$
129,428
(12,4S5)
116,973
30 Jun e
2013
US$
453,930
103,234
499,343
1,056,508
30 June
2013
US$
159,106
484,670
25,125
668,900
30 Ju ne
2013
US$
(2,000,000)
(343,913)
(2,343,913)
30 June
2013
US$
1 00,000
Notes to interim condensed consolidated financial statements
Details of Receivable & Payables by countries
Total
$
AO Limited
$
UK
$
Brazil
$
Singapore
$
USA
$
Norway
$
Dubai
$
Trade receivables 453,930 - - 188,377 49,000 216,553
Unbilled revenue 103,234 - - - 76,475 - 26,759
Other receivables 499,344 265,623 9,885 - 104,403 - 58,803 60,629
1,056,508 265,623 9,885 - 369,255 49,000 302,115 60,629
Trade payable
159,106
92,305
-
-
10,934
10,084
37,943
7,840
Accruals and deferred income 484,670 61,991 5,893 176,400 133,220 13,978 88,954 4,235
Other taxes and social securities 25,125 25,125
668,901 179,421 5,893 176,400 144,154 24,062 126,897 12,075
APPENDIX E: SUBSCRIPTION FORM FOR THE EMPLOYEE OFFERING
AQUALIS ASA
EMPLOYEE OFFERING OCTOBER/NOVEMBER 2013
In order for employees to be certain to participate in the Employee Offering, Subscription
Forms must be received no later than 29 October 2013 at 16:30 CET. The subscriber bears
the risk of any delay in the postal communication, busy facsimiles and data problems
preventing orders from being received by the Manager.
SUBSCRIPTION FORM
Properly completed Subscription Forms must be submitted to the Manager as set out below:
Carnegie AS
Grundingen 2, Aker Brygge
NO-0106 Oslo
Tel: + 47 22 00 93 00
Fax: +47 22 00 99 60
General information: The terms and conditions for the Employee Offering in Aqualis ASA (the “Company”) of up to 5,000,000 employee offer shares (the “Employee Offer Shares”) pursuant
to resolution by the Company’s extraordinary general meeting on 8 October 2013 (the “EGM”) are set out in the prospectus dated 11 October 2013 (the “Prospectus”). Terms defined in the
Prospectus shall have the same meaning in this Subscription Form. Notice of and minutes from the EGM (with enclosures), the Company’s Articles of Association and annual accounts for the
last three years, are available at the Company’s registered office. In case of any discrepancies between the Subscription Form and the Prospectus, the Prospectus shall prevail.
Subscription Period: The subscription period is from and including 15 October 2013 to 16:30 CET on 29 October 2013 (the "Subscription Period"). Neither the Company nor the Manager may
be held responsible for delays in the mail system or for Subscription Forms forwarded by facsimile that are not received in time by the Manager. It is not sufficient for the Subscription Form to
be postmarked within the deadline. The Manager has discretion to refuse any improperly completed, delivered or executed Subscription Forms or any subscription which may be unlawful.
Subscription Forms that are received too late or are incomplete or erroneous are therefore likely to be rejected without any notice to the subscriber. The subscription for Employee Offer Shares
is irrevocable and may not be withdrawn, cancelled or modified once it has been received by the Manager. Minimum subscription per subscriber shall be 10,000 shares. Multiple subscriptions
are allowed. The Employee Offer Shares issued in connection with the Employee Offering are subject to a lock-up period of 12 months, meaning that the subscriber may not sell, deliver,
transfer or grant options over the subscribed shares during this period. Each subscriber grants the Company or any person appointed by the Company, the irrevocable authority to enter transfer
restrictions upon the VPS account of each subscriber of as an encumbrance on the account in favour of the Company.
Subscription price: The subscription price for one (1) Employee Offer Share is NOK 1.60.
Allocation: The following allocation criteria shall apply: Full allocation of subscribed shares up to a maximum of 30,000 shares per subscriber. In the event that total subscriptions exceed the
5,000,000 shares covered by the resolution, the allocation above 30,000 shares per subscriber will be on a pro rata basis based on the number of shares subscribed for. All subscribers being
allotted Employee Offer Shares will receive a letter on or about 4 November 2013 from the Manager containing information regarding the number of Employee Offer Shares allotted to the
subscriber and payment instructions.
Payment: The payment for the Employee Offer Shares falls due 10:00 CET on 7 November 2013, and the entire subscription amount must be transferred to Carnegie AS on or before this date.
DETAILS OF THE SUBSCRIPTION
Subscriber’s VPS account Number of Employee Offer Shares subscribed
(For broker: Consecutive no.)
Σx Subscription price per Employee Offer Share
NOK 1.60
Total Subscription amount to be paid
NOK
Place and date
Must be dated in the Subscription Period
Binding signature. The subscriber must have legal capacity. When signed on behalf of a
company or pursuant to an authorisation, documentation in the form of a company
certificate or power of attorney should be attached
INFORMATION ON THE SUBSCRIBER
VPS account number In the case of changes in registered
information, the account operator
must be contacted. Your account
operator is: Forename
Surname/company
Street address (for private: home address):
Post code/district/country
Personal ID number/Organisation number
Norwegian Bank Account for dividends
Nationality
Daytime telephone number
2
ADDITIONAL INFORMATION FOR THE SUBSCRIBER
Regulatory Issues: In accordance with the Markets in Financial Instruments Directive (“MiFID”) of the European Union, Norwegian law imposes
requirements in relation to business investments. In this respect the Manager must categorize all new clients in one of three categories: eligible counterparties,
professional and non-professional clients. All subscribers in the Rights Issue who are not existing clients of the Manager will be categorized as non-professional
clients. Subscribers can, by written request to the Manager, ask to be categorized as a professional client if the subscriber fulfils the applicable requirements of
the Norwegian Securities Trading Act. For further information about the categorization, the subscriber may contact the Manager on telephone +47 22 00 93 00.
The subscriber represents that he/she/it is capable of evaluating the merits and risks of an investment decision to invest in the Company by
subscribing for Offer Shares, and is able to bear the economic risk, and to withstand a complete loss, of an investment in the Offer Shares.
Selling and Transfer Restrictions: The attention of persons who wish to subscribe for Offer Shares is drawn to section 17 “Selling and Transfer Restrictions”
of the Prospectus. The making or acceptance of the Rights Issue to or by persons who have registered addresses outside Norway or who are resident in, or
citizens of, countries outside Norway, may be affected by the laws of the relevant jurisdiction. Those persons should consult their professional advisers as to
whether they require any governmental or other consents or need to observe any other formalities to enable them to subscribe for Offer Shares. It is the
responsibility of any person outside Norway wishing to subscribe for Offer Shares under the Rights Issue to satisy himself/herself as to the full observance of
the laws of any relevant jurisdiction in connection therewith, including obtaining any governmental or other consent which may be required, the compliance
with other necessary formalities and the payment of any issue, transfer or other taxes due in such territorries. The Subscription Rights and Offer Shares have not
been registered and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or under the securities law of
any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, delivered or transferred, directly or indirectly,
within the United States. There will be no public offer of the Subscription Rights and Offer Shares in the United States. The Subscription Rights and Offer
Shares have not been and will not be registered under the applicable securities laws of Australia, Canada, Hong Kong, Japan or Switzerland and may not be
offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Hong Kong, Japan or Switzerland except pursuant to an applicable
exemption from applicable securities laws. This Subscription Form does not constitute an offer to sell or a solicitation of an offer to buy Offer Shares in any
jurisdiction in which such offer or solicitation is unlawful. Subject to certain exceptions, the Prospectus will not be distributed in the United States, Australia,
Canada, Hong Kong, Japan or Switzerland. Except as otherwise provided in the Prospectus, the Subscription Rights and the Offer Shares may not be
transferred, sold or delivered in the United States, Australia, Canada, Hong Kong, Japan or Switzerland. Exercise of Subscription Rights and subscription of
Offer Shares in contravention of the above restrictions and those set out in the Prospectus may be deemed to be invalid.
Execution Only: The Manager will treat the Subscription Form as an execution-only instruction. The Manager is not required to determine whether an
investment in the Offer Shares is appropriate or not for the subscriber. Hence, the subscriber will not benefit from the protection of the relevant conduct of
business rules in accordance with the Norwegian Securities Trading Act.
Information Exchange: The subscriber acknowledges that, under the Norwegian Securities Trading Act and the Norwegian Commercial Banks Act and
foreign legislation applicable to the Manager there is a duty of secrecy between the different units of the Manager as well as between the Manager and the other
entities in the Manager’s group. This may entail that other employees of the Manager or the Manager’s group may have information that may be relevant to the
subscriber and to the assessment of the Offer Shares, but which the Manager will not have access to in its capacity as Manager for the Rights Issue.
Information Barriers: The Manager is a securities firm that offers a broad range of investment services. In order to ensure that assignments undertaken in the
Manager’s corporate finance department are kept confidential, the Manager’s other activities, including analysis and stock broking, are separated from the
Manager’s corporate finance department by information walls. The subscriber acknowledges that the Manager’s analysis and stock broking activity may act in
conflict with the subscriber’s interests with regard to transactions of the Shares, including the Offer Shares, as a consequence of such information walls.
Mandatory Anti-Money Laundering Procedures: The Rights Issue is subject to the Norwegian Money Laundering Act No. 11 of March 6, 2009 and the
Norwegian Money Laundering Regulations No. 302 of March 13, 2009 (collectively the “Anti-Money Laundering Legislation”). Subscribers who are not
registered as existing customers with the Manager must verify their identity in accordance with the requirements of the Anti-Money Laundering Legislation,
unless an exemption is available. Subscribers who have designated an existing Norwegian bank account and an existing VPS account on the Subscription Form
are exempted, unless verification of identity is requested by the Manager. The verification of identity must be completed prior to the end of the Subscription
Period. Subscribers that have not completed the required verification of identity may not be allocated Offer Shares. Further, in participating in the Rights Issue,
each subscriber must have a VPS account. The VPS account number must be stated on the Subscription Form. VPS accounts can be established with authorised
VPS registrars, which can be Norwegian banks, authorised securities brokers in Norway and Norwegian branches of credit institutions established within the
EEA. Establishment of a VPS account requires verification of identity before the VPS registrar in accordance with the Anti-Money Laundering Legislation.
Non-Norwegian investors may, however, use nominee VPS accounts registered in the name of a nominee. The nominee must be authorized by the Financial
Supervisory Authority of Norway.
Terms and Conditions for Payment by Direct Debiting - Securities Trading: Payment by direct debiting is a service the banks in Norway provide in
cooperation. In the relationship between the payer and the payer’s bank the following standard terms and conditions will apply:
a) The service “Payment by direct debiting – securities trading” is supplemented by the account agreement between the payer and the payer’s bank, in
particular Section C of the account agreement, General terms and conditions for deposit and payment instructions.
b) Costs related to the use of “Payment by direct debiting – securities trading” appear from the bank’s prevailing price list, account information and/or
information given by other appropriate manner. The bank will charge the indicated account for costs incurred.
c) The authorization for direct debiting is signed by the payer and delivered to the beneficiary. The beneficiary will deliver the instructions to its bank
who in turn will charge the payer’s bank account.
d) In case of withdrawal of the authorization for direct debiting the payer shall address this issue with the beneficiary. Pursuant to the Norwegian
Financial Contracts Act, the payer’s bank shall assist if the payer withdraws a payment instruction that has not been completed. Such withdrawal
may be regarded as a breach of the agreement between the payer and the beneficiary.
e) The payer cannot authorize payment of a higher amount than the funds available on the payer’s account at the time of payment. The payer’s bank
will normally perform a verification of available funds prior to the account being charged. If the account has been charged with an amount higher
than the funds available, the difference shall immediately be covered by the payer.
f) The payer’s account will be charged on the indicated date of payment. If the date of payment has not been indicated in the authorization for direct
debiting, the account will be charged as soon as possible after the beneficiary has delivered the instructions to its bank. The charge will not,
however, take place after the authorization has expired as indicated above. Payment will normally be credited the beneficiary’s account between
one and three working days after the indicated date of payment/delivery.
g) If the payer’s account is wrongfully charged after direct debiting, the payer’s right to repayment of the charged amount will be governed by the
account agreement and the Norwegian Financial Contracts Act.
Overdue and missing payments: Overdue and late payments will be charged with interest at the applicable rate from time to time under the Norwegian Act on
Interest on Overdue Payment of 17 December 1976 no. 100, currently 9.50% per annum. If a subscriber fails to comply with the terms of payment, the Offer
Shares will, subject to the restrictions in the Norwegian Public Limited Companies Act and at the discretion of the Manager, not be delivered to the subscriber.
The Manager, on behalf of the Company, reserves the right, at the risk and cost of the subscriber to, at any time, cancel the subscription and to re-allocate or
otherwise dispose of allocated Offer Shares for which payment is overdue, or, if payment has not been received by the third day after the Payment Date, without
further notice sell, assume ownership to or otherwise dispose of the allocated Offer Shares on such terms and in such manner as the Manager may decide in
accordance with Norwegian law. The subscriber will remain liable for payment of the subscription amount, together with any interest, costs, charges and
expenses accrued and the Manager, on behalf of the Company, may enforce payment for any such amount outstanding in accordance with Norwegian law.
APPENDIX D: SUBSCRIPTION FORM FOR THE RIGHTS ISSUE
AQUALIS ASA
RIGHTS ISSUE OCTOBER/NOVEMBER 2013
In order for investors to be certain to participate in the Rights Issue, Subscription Forms must
be received no later than 29 October 2013 at 16:30 CET. The subscriber bears the risk of any
delay in the postal communication, busy facsimiles and data problems preventing orders from
being received by the Manager.
SUBSCRIPTION FORM
Properly completed Subscription Forms must be submitted to the Manager as set out below:
Carnegie AS
Grundingen 2, Aker Brygge
NO-0106 Oslo
Tel: + 47 22 00 93 00
Fax: +47 22 00 99 60
NORWEGIAN SUBSCRIBERS DOMICILED IN NORWAY CAN IN ADDITION
SUBSCRIBE FOR SHARES AT WWW.CARNEGIE.NO
General information: The terms and conditions for the Rights Issue in Aqualis ASA (the “Company”) of 33,755,515 offer shares (the “Offer Shares”) pursuant to resolution by the Company’s
extraordinary general meeting on 8 October 2013 (the “EGM”) are set out in the prospectus dated 11 October 2013 (the “Prospectus”). Terms defined in the Prospectus shall have the same
meaning in this Subscription Form. Notice of and minutes from the EGM (with enclosures), the Company’s Articles of Association and annual accounts for the last three years, are available at
the Company’s registered office. In case of any discrepancies between the Subscription Form and the Prospectus, the Prospectus shall prevail.
Offer Shares and Subscription Rights: The Rights Issue comprises 33,755,515 transferrable subscription rights (“Subscription Rights”), where each Subscription Right grants the right to
subscribe for one (1) Offer Share. Over-subscription and subscription without Subscription Rights are allowed and no fractional Offer Shares will be issued. The Subscription Rights will be
tradeable and listed on the Oslo Stock Exchange during the Subscription Period with ticker “AQUA T”.
Subscription Period: The subscription period is from and including 15 October 2013 to 16:30 CET on 29 October 2013 (the "Subscription Period"). Neither the Company nor the Manager may
be held responsible for delays in the mail system or for Subscription Forms forwarded by facsimile that are not received in time by the Manager. It is not sufficient for the Subscription Form to
be postmarked within the deadline. The Manager has discretion to refuse any improperly completed, delivered or executed Subscription Forms or any subscription which may be unlawful.
Subscription Forms that are received too late or are incomplete or erroneous are therefore likely to be rejected without any notice to the subscriber. The subscription for Offer Shares is
irrevocable and may not be withdrawn, cancelled or modified once it has been received by the Manager. Multiple subscriptions are allowed. Over-subscription and subscription without
subscription rights is permitted. Subscription price: The subscription price for one (1) Offer Share is NOK 1.60.
Right to subscribe: The Subscription Rights will be issued to the Company’s shareholders as per the end of 8 October 2013 (as registered in VPS on 11 October 2013) who are not resident in
a jurisdiction where such offering would be unlawful or for jurisdictions other than Norway (“Eligible Shareholders”). Each Eligible Shareholder will receive one (1) Subscription Right for
every share owned as of the close of trading on 8 October 2013 (“Record Date”), Subscription Rights not used to subscribe for the Offer Shares (in full or partly) will lapse without any
compensation upon expiry of the Subscription Period and will consequently be of no value. The number of Subscription Rights allocated to each Eligible Shareholder will be rounded down to
the nearest whole Subscription Right.
Allocation: The allocation criteria are set out in the Prospectus dated 11 October 2013. All Subscribers being allotted Offer Shares will receive a letter on or about 4 November 2013 from the
Manager confirming the number of Offer Shares allotted to the Subscriber.
Payment: The payment for the Offer Shares falls due 10:00 CET on 7 November 2013. By signing the Subscription Form, each Subscriber having a Norwegian bank account authorises the
Manager to debit the bank account specified by the Subscriber below for payment of the allotted Offer Shares for transfer to the Manager. The Manager reserves the right to make up to three
attempts to debit the Subscribers’ accounts in the period up to 14 November 2013 if there are insufficient funds on the account on previous debit dates. Subscribers not having a Norwegian bank
account must ensure that payment for their Offer Shares with cleared funds is made on or before 10:00 CET 7 November 2013 and should contact the Manager in this respect for further details
and instructions.
DETAILS OF THE SUBSCRIPTION
Subscriber’s VPS account Number of Subscription Rights
Number of Offer Shares subscribed (incl. over-
subscription):
(For broker: Consecutive no.)
1 SUBSCRIPTION RIGHT GIVES THE RIGHT TO BE ALLOCATED 1
OFFER SHARE
Σx Subscription price per Offer Share
NOK 1.60
Total Subscription amount to be paid
NOK
SUBSCRIPTION RIGHT’S SECURITIES NUMBER: ISIN NO 001 0691868
IRREVOCABLE AUTHORISATION TO DEBIT ACCOUNT (MUST BE COMPLETED)
My Norwegian bank account to be debited for the consideration for shares allotted (number of
shares allotted x subscription price).
(Norwegian bank account no. 11 digits)
In accordance with the terms and conditions set out in the Prospectus and this Subscription Form, I/we hereby irrevocably subscribe for the number of Offer Shares specified above and grant the
Manager authorisation to debit (by direct or manual debiting as described above) the specified bank account for the payment of the Offer Shares allocated to me/us.
Place and date
Must be dated in the Subscription Period
Binding signature. The subscriber must have legal capacity. When signed on behalf
of a company or pursuant to an authorisation, documentation in the form of a company
certificate or power of attorney should be attached
INFORMATION ON THE SUBSCRIBER
VPS account number In the case of changes in registered
information, the account operator
must be contacted. Your account
operator is: Forename
Surname/company
Street address (for private: home address):
Post code/district/country
Personal ID number/Organisation number
Norwegian Bank Account for dividends
Nationality
Daytime telephone number
2
ADDITIONAL INFORMATION FOR THE SUBSCRIBER
Regulatory Issues: In accordance with the Markets in Financial Instruments Directive (“MiFID”) of the European Union, Norwegian law imposes
requirements in relation to business investments. In this respect the Manager must categorize all new clients in one of three categories: eligible counterparties,
professional and non-professional clients. All subscribers in the Rights Issue who are not existing clients of the Manager will be categorized as non-professional
clients. Subscribers can, by written request to the Manager, ask to be categorized as a professional client if the subscriber fulfils the applicable requirements of
the Norwegian Securities Trading Act. For further information about the categorization, the subscriber may contact the Manager on telephone +47 22 00 93 00.
The subscriber represents that he/she/it is capable of evaluating the merits and risks of an investment decision to invest in the Company by
subscribing for Offer Shares, and is able to bear the economic risk, and to withstand a complete loss, of an investment in the Offer Shares.
Selling and Transfer Restrictions: The attention of persons who wish to subscribe for Offer Shares is drawn to section 17 “Selling and Transfer Restrictions”
of the Prospectus. The making or acceptance of the Rights Issue to or by persons who have registered addresses outside Norway or who are resident in, or
citizens of, countries outside Norway, may be affected by the laws of the relevant jurisdiction. Those persons should consult their professional advisers as to
whether they require any governmental or other consents or need to observe any other formalities to enable them to subscribe for Offer Shares. It is the
responsibility of any person outside Norway wishing to subscribe for Offer Shares under the Rights Issue to satisy himself/herself as to the full observance of
the laws of any relevant jurisdiction in connection therewith, including obtaining any governmental or other consent which may be required, the compliance
with other necessary formalities and the payment of any issue, transfer or other taxes due in such territorries. The Subscription Rights and Offer Shares have not
been registered and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or under the securities law of
any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, delivered or transferred, directly or indirectly,
within the United States. There will be no public offer of the Subscription Rights and Offer Shares in the United States. The Subscription Rights and Offer
Shares have not been and will not be registered under the applicable securities laws of Australia, Canada, Hong Kong, Japan or Switzerland and may not be
offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Hong Kong, Japan or Switzerland except pursuant to an applicable
exemption from applicable securities laws. This Subscription Form does not constitute an offer to sell or a solicitation of an offer to buy Offer Shares in any
jurisdiction in which such offer or solicitation is unlawful. Subject to certain exceptions, the Prospectus will not be distributed in the United States, Australia,
Canada, Hong Kong, Japan or Switzerland. Except as otherwise provided in the Prospectus, the Subscription Rights and the Offer Shares may not be
transferred, sold or delivered in the United States, Australia, Canada, Hong Kong, Japan or Switzerland. Exercise of Subscription Rights and subscription of
Offer Shares in contravention of the above restrictions and those set out in the Prospectus may be deemed to be invalid.
Execution Only: The Manager will treat the Subscription Form as an execution-only instruction. The Manager is not required to determine whether an
investment in the Offer Shares is appropriate or not for the subscriber. Hence, the subscriber will not benefit from the protection of the relevant conduct of
business rules in accordance with the Norwegian Securities Trading Act.
Information Exchange: The subscriber acknowledges that, under the Norwegian Securities Trading Act and the Norwegian Commercial Banks Act and
foreign legislation applicable to the Manager there is a duty of secrecy between the different units of the Manager as well as between the Manager and the other
entities in the Manager’s group. This may entail that other employees of the Manager or the Manager’s group may have information that may be relevant to the
subscriber and to the assessment of the Offer Shares, but which the Manager will not have access to in its capacity as Manager for the Rights Issue.
Information Barriers: The Manager is a securities firm that offers a broad range of investment services. In order to ensure that assignments undertaken in the
Manager’s corporate finance department are kept confidential, the Manager’s other activities, including analysis and stock broking, are separated from the
Manager’s corporate finance department by information walls. The subscriber acknowledges that the Manager’s analysis and stock broking activity may act in
conflict with the subscriber’s interests with regard to transactions of the Shares, including the Offer Shares, as a consequence of such information walls.
Mandatory Anti-Money Laundering Procedures: The Rights Issue is subject to the Norwegian Money Laundering Act No. 11 of March 6, 2009 and the
Norwegian Money Laundering Regulations No. 302 of March 13, 2009 (collectively the “Anti-Money Laundering Legislation”). Subscribers who are not
registered as existing customers with the Manager must verify their identity in accordance with the requirements of the Anti-Money Laundering Legislation,
unless an exemption is available. Subscribers who have designated an existing Norwegian bank account and an existing VPS account on the Subscription Form
are exempted, unless verification of identity is requested by the Manager. The verification of identity must be completed prior to the end of the Subscription
Period. Subscribers that have not completed the required verification of identity may not be allocated Offer Shares. Further, in participating in the Rights Issue,
each subscriber must have a VPS account. The VPS account number must be stated on the Subscription Form. VPS accounts can be established with authorised
VPS registrars, which can be Norwegian banks, authorised securities brokers in Norway and Norwegian branches of credit institutions established within the
EEA. Establishment of a VPS account requires verification of identity before the VPS registrar in accordance with the Anti-Money Laundering Legislation.
Non-Norwegian investors may, however, use nominee VPS accounts registered in the name of a nominee. The nominee must be authorized by the Financial
Supervisory Authority of Norway.
Terms and Conditions for Payment by Direct Debiting - Securities Trading: Payment by direct debiting is a service the banks in Norway provide in
cooperation. In the relationship between the payer and the payer’s bank the following standard terms and conditions will apply:
a) The service “Payment by direct debiting – securities trading” is supplemented by the account agreement between the payer and the payer’s bank, in
particular Section C of the account agreement, General terms and conditions for deposit and payment instructions.
b) Costs related to the use of “Payment by direct debiting – securities trading” appear from the bank’s prevailing price list, account information and/or
information given by other appropriate manner. The bank will charge the indicated account for costs incurred.
c) The authorization for direct debiting is signed by the payer and delivered to the beneficiary. The beneficiary will deliver the instructions to its bank
who in turn will charge the payer’s bank account.
d) In case of withdrawal of the authorization for direct debiting the payer shall address this issue with the beneficiary. Pursuant to the Norwegian
Financial Contracts Act, the payer’s bank shall assist if the payer withdraws a payment instruction that has not been completed. Such withdrawal
may be regarded as a breach of the agreement between the payer and the beneficiary.
e) The payer cannot authorize payment of a higher amount than the funds available on the payer’s account at the time of payment. The payer’s bank
will normally perform a verification of available funds prior to the account being charged. If the account has been charged with an amount higher
than the funds available, the difference shall immediately be covered by the payer.
f) The payer’s account will be charged on the indicated date of payment. If the date of payment has not been indicated in the authorization for direct
debiting, the account will be charged as soon as possible after the beneficiary has delivered the instructions to its bank. The charge will not,
however, take place after the authorization has expired as indicated above. Payment will normally be credited the beneficiary’s account between
one and three working days after the indicated date of payment/delivery.
g) If the payer’s account is wrongfully charged after direct debiting, the payer’s right to repayment of the charged amount will be governed by the
account agreement and the Norwegian Financial Contracts Act.
Overdue and missing payments: Overdue and late payments will be charged with interest at the applicable rate from time to time under the Norwegian Act on
Interest on Overdue Payment of 17 December 1976 no. 100, currently 9.50% per annum. If a subscriber fails to comply with the terms of payment, the Offer
Shares will, subject to the restrictions in the Norwegian Public Limited Companies Act and at the discretion of the Manager, not be delivered to the subscriber.
The Manager, on behalf of the Company, reserves the right, at the risk and cost of the subscriber to, at any time, cancel the subscription and to re-allocate or
otherwise dispose of allocated Offer Shares for which payment is overdue, or, if payment has not been received by the third day after the Payment Date, without
further notice sell, assume ownership to or otherwise dispose of the allocated Offer Shares on such terms and in such manner as the Manager may decide in
accordance with Norwegian law. The subscriber will remain liable for payment of the subscription amount, together with any interest, costs, charges and
expenses accrued and the Manager, on behalf of the Company, may enforce payment for any such amount outstanding in accordance with Norwegian law.
Statsautoriserte revisorer
Ernst & Young AS
Foretaksregisteret: NO 976 389 387 MVA Tlf: +47 24 00 24 00 Fax: +47 24 00 29 01
/J... rnfrrll'lcr f rrrf! of Er r,r 8., YOL.It) Clobill L_rrnr ll c1
Building a better working world
Drenning Eufemias gate 6, N0-0191 Oslo Oslo Atrium, P.O. Box 20, N0-0051 Oslo
www.ey.no Medlemmer av den norske revisorforening
APPENDIX F: INDEPENDENT ASSURANCE REPORT ON THE PRO FORMA FINANCIAL INFORMATION
To the Board of Directors of Aqualis ASA
Independent Practitioners' Assurance Report on the Compilation of Pro Forma Financial
Information Included in a Prospectus
We have completed our assurance engagement to report on the compilation of unaudited pro forma
financial information of Aqualis ASA (the "Company"). The pro forma financial information consists of
the unaudited pro forma condensed balance sheet as at 30 June 2013, the unaudited pro forma
condensed income statement for the six months ended 30 June 2013, and related description and
notes as set out in section 9.6 of the prospectus dated 11 October 2013 (the "Prospectus") issued by
the Company. The applicable criteria on the basis of which the Company has compiled the
unaudited pro forma financial information are specified in EU Regulation No 809/2004 and described
in section 9.6 of the Prospectus (the "applicable criteria").
The unaudited pro forma financial information has been compiled for illustrative purposes only to
provide information about how the acquisition of Aqualis Offshore Ltd and the Rights Offering set out
in section 9.6 of the Prospectus might have affected the Company's consolidated financial position
as at 30 June 2013 and the Company's consolidated financial performance for the six months ended
30 June 2013 as if the acquisition had taken place at 30 June 2013 and 1 January 2013. As part of
this process, the Company has extracted financial information from the Company's and Aqualis
Offshore Ltd's consolidated financial statements for the period ended 30 June 2013. No audit or
review reports have been issued on the unaudited condensed consolidated financial information of
the Company or Aqualis Offshore Ltd for the six months ended 30 June 2013.
The Board of Directors' and Management's Responsibility for the Pro Forma Financial Information
The Board of Directors and Management are responsible for compiling the pro forma financial
information on the basis of the requirements of EU Regulation No 809/2004 as included in the
Norwegian Securities Trading Act.
Practitioner's Responsibilities
Our responsibility is to express an opinion, as required by Annex II item 7 of EU Regulation No
809/2004 about whether the pro forma financial information has been compiled by the Company on
the basis stated and that this basis is consistent with the accounting policies of the Company.
We conducted our engagement in accordance with International Standard on Assurance
Engagements (ISAE) 3420, Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus, issued by the International Auditing and Assurance
Standards Board. This standard requires that the practitioner comply with ethical requirements and
plan and perform procedures to obtain reasonable assurance about whether the Company has
compiled the pro forma financial information on the basis of the applicable criteria and whether this
basis is consistent with the accounting policies of the Company.
Building a better working world
A mr:rnbe1 t11 fTl of Emst & Young GlotJc•l L1mited
Our work primarily consisted of comparing the unadjusted financial information with the source
documents as described in section 9.6 of the Prospectus, considering the evidence supporting the
adjustments and discussing the Pro Forma Financial Information with management of the Company.
The aforementioned opinion does not require an audit of historical unadjusted financial information,
the adjustments to conform the accounting policies of Aqualis Offshore Ltd to the accounting policies
of the Company, or the assumptions summarized in section 9.6 of the prospectus. For purposes of
this engagement, we are not responsible for updating or reissuing any reports or opinions on any
historical financial information used in compiling the pro forma financial information, nor have we, in
the course of this engagement, performed an audit or review of the financial information used in
compiling the pro forma financial information.
The purpose of pro forma financial information included in a prospectus is solely to illustrate how the
significant event or transaction might have impacted the unadjusted financial information of the entity
if the transaction had been undertaken at an earlier date. Because of its nature, the Pro Forma
Financial Information addresses a hypothetical situation and, therefore, does not represent the
Company's actual financial position or performance. Accordingly, we do not provide any assurance
that the actual outcome of the acquisition of Aqualis Offshore Ltd and the Rights Offering would have
been as presented.
A reasonable assurance engagement to report on whether the pro forma financial information has
been compiled on the basis stated involves performing procedures to assess whether the applicable
criteria used by the Company in the compilation of the pro forma financial information provide a
reasonable basis for presenting the significant effects directly attributable to the event or transaction,
and to obtain sufficient appropriate evidence about whether:
• The related pro forma adjustments give appropriate effect to those criteria;
• The pro forma financial information reflects the proper application of those adjustments to the
unadjusted financial information; and
• The pro forma financial information has been compiled on a basis consistent with the accounting
policies of the Company.
The procedures selected depend on the practitioner's judgment, having regard to the practitioner's
understanding of the nature of the company, the event or transaction in respect of which the pro
forma financial information has been compiled, and other relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the pro forma financial
information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Opinion
In our opinion:
a) The pro forma financial information has been properly compiled on the basis stated in section
9.6 of the Prospectus
b) That basis is consistent with the accounting policies of the Company.
Building a better working world
A member firm of Ernst & Young Global Lim1ted
This report is issued for the sole purpose of the Rights Offering in Norway and the admission of
shares on Oslo B1<ns (Oslo Stock Exchange) and other regulated markets in the European Union or
European Economic Area, as set out in the Prospectus approved by the Financial Supervisory
Authority of Norway. Therefore, this report is not appropriate in other jurisdictions and should not be
used or relied upon for any purpose other than the offering described above.
We accept no duty or responsibility to and deny any liability to any party in respect of any use of, or
reliance upon, this report in connection with any type of transaction, including the sale of securities
other than the offer to the public of the shares on Oslo B0rs and other regulated markets in the
European Union or European Economic Area, as set out in the Prospectus approved by the
Financial Supervisory Authority of Norway.
I
APPENDIX G: INDEPENDENT REPORT ON FAIR VALUE OF AQUALIS OFFSHORE
RSM Audit·Tax·Advisory
To the General Meeting of Clavis Pharma ASA RSM Hasner Kjelstrup & Wiggen AS
Statsautoriserte revisorer
Postboks 1312 Vika, N0·0112 Oslo
Filipstad Brygge 1. N0·0252 Oslo
T: +47 23 11 42 00 F: +47 23 11 42 01
Org.nr. 982 316 588 MVA
www.rsmi.no
Statement regarding increase in share capital
At the Board of Directors' request we, as independent experts, issue this statement in compliance with
The Public Limited Liability Companies Act section 10-2, refer section 2-6.
The Board of Directors' responsibility for the statement
The Board of Directors are responsible for the valuations that form basis for the consideration.
The independent experts' responsibility
Our responsibility is to prepare a statement relating to the increase in share capital with a consideration
in other than cash by the investors against consideration in Clavis Pharma ASA shares, and express
an opinion that the value of the assets the company shall take over as consideration for the increase in
share capital is at least equivalent to the agreed consideration.
The statement consists of two parts. The first part is a presentation of information in compliance with
the requirements in The Public Limited Liability Companies Act section 10-2, refer section 2-6 first
subsection No 1- 4. The second part is our opinion regarding whether the assets the company shall
take over have a value which is at least equivalent to the agreed consideration.
Part 1: Information about the consideration
Clavis Pharma ASA has signed a letter of intent to acquire 100 percent of the shares of Aqualis
Offshore Ltd. The consideration is preliminary set at NOK 70 million, which is to be settled by the
issuance of shares of Clavis Pharma ASA, valued at NOK 1.60 per share.
Aqualis Offshore Ltd was founded 17 December 2012, and is registered in the UK. The company
owns shares in the subsidiaries Aqualis Offshore Pte Ltd (Singapore), Aqualis Offshore Marine
Services LLC (Dubai), Aqualis Offshore Inc (Texas), Aqualis Offshore UK Ltd (UK), Aqualis Offshore
Servi9os Ltda (Brazil) and Aqualis Offshore AS (Norway). The companies provide consulting services
to the offshore sector. Currently the companies employ around 40 people, and additional 30 people
have signed contracts to join within year-end 2013.
Aqualis Offshore Ltd is in its first year of operation and has not yet issued financial statements.
Unaudited consolidated accounts for the first half of 2013 show operating income of$ 312,849, loss
before tax of USD 934,622, and a negative equity of$ 853,601, minority interests excluded.
The value of the shares of Aqualis Offshore Ltd is established through a combination of multiple
analyses and present value calculations of its expected future cash flows. The valuation is based on a
number of assumptions about expected future development of the business. As the company has no
historical data to demonstrate, this means increased uncertainty compared to a more mature
business. Important assumptions made relate amongst other to the increase in the number of
RSM Hasner Kjelstrup & Wiggen er et frittstaende medlem av RSM International, en
sammenslutning av uavhengige revisjons- og konsulentfirmaer. RSM International er navnet
til et nettverk av uavhengige revisjons·og konsulentfirmaer. hvor hvert firma praktiserer
selvstendig. RSM International eksisterer ikke i noen jurisdiksjon sam en separatjuridisk enhet.
Medlemmer av Den Norske Revisorforening
RSM
Audit·Tax·Advisory
Page 2
employees, revenues and the margins the company is to achieve. A key factor for the company's
expectations to succeed with its plans is the management's experience from competing companies
and their network in the offshore sector.
The Board has used external expertise in connection with the valuation.
For other factors that may affect the assessment of the agreement, we refer to the press release from
Clavis Pharma ASA on 4 September 2013. As stated there, the chairman and a board member of
Clavis Pharma ASA has bindings to Aqualis Offshore Ltd through its principal shareholders;
AS Ferncliff with associated companies.
Part 2: The independent expert's opinion
We have performed procedures and issue our opinion in accordance with the Norwegian standard
NSAE 3802 "The auditor's assurance reports and statements required by Norwegian Company
legislation1" issued by the Norwegian Institute of Public Accountants. This standard requires that we
plan and perform procedures to obtain reasonable assurance about whether the value of the assets
which the company shall take over is at least equivalent to the agreed consideration. Our procedures
include an assessment of the valuation of the consideration, including valuation principles. We have
also assessed the valuation methods that have been used and the assumptions that form the basis for
the valuation.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Opinion
In our opinion the assets the company shall take over as consideration for the increase in share
capital, have been valued in compliance with the described principles and that the value of the assets
the company shall take over is at least equivalent to the agreed consideration in Clavis Pharma ASA
shares, with nominal value NOK 43 750 000, and share premium NOK 26 250 000.
Oslo, 16 September 2013
RSM Hasner Kjelstrup & Wiggen AS
Arnfinn Osvik
State Authorized Public Accountant (Norway)
Note: This translation from Norwegian has been prepared for information purposes only.
1 Norwegian name of standard: SA 3802 Revisors uttalelser og redegj0relser etter selskapslovgivningen
Aqualis ASA Sjølyst Plass 2
0278 Oslo Norway
Carnegie AS Grundingen 2
PO Box 684 Sentrum N-0106 Oslo
Norway