Norsk Titanium AS: Proposed Partially Underwritten Rights Issue

NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE'S REPUBLIC OF CHINA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. OTHER RESTRICTIONS ARE APPLICABLE. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT

Oslo, Norway, 4 December 2023: The board of directors of Norsk Titanium AS ("Norsk Titanium" or the "Company") (Euronext: NTI, OTCQX: NORSF) proposes to carry out a rights issue of shares (the "New Shares") with preferential subscription rights for existing shareholders to raise gross proceeds of up to NOK 225 million (equivalent to approx. USD 21 million) (the "Rights Issue"). Subscribers in the Rights Issue will for every two New Shares allocated receive one warrant to subscribe for one new share in the Company (the "Warrants").

Certain existing shareholders and external investors (jointly the "Underwriters") have, through a combination of pre-commitments and underwriting commitments, underwritten in aggregate NOK 182 million (equivalent to approx. USD 17 million) of the Rights Issue.

The net proceeds from the Rights Issue and exercised Warrants will be used to i) fund current operations and cash requirements, and ii) strengthen the balance sheet to transition development efforts into long term serial production contracts for deliveries to major customers in the commercial aerospace, industrial and defence sectors. The Company’s current burn-rate is approx. USD 2 million per month and the Rights Issue will extend the Company’s runway beyond the first exercise of the Warrants in June 2024, which if exercised will further extend the runway correspondingly.

Provided that the Rights Issue is subscribed in full, and the Warrants are executed at the maximum subscription price 30% above the Rights Issue subscription price, the Company may in total receive proceeds of up to approx. NOK 370 million (equivalent to approx. USD 35 million). Combined with working capital financing, this would be expected to cover the funding required to reach cash flow break-even for the Company.

The Rights Issue is subject to shareholder approval at the extraordinary general meeting of the Company, expected to be held on 9 January 2024 (the "EGM"). Notice of the EGM, including proposed resolutions regarding the Rights Issue, is expected to be sent to the shareholders on 13 December 2023.

Carnegie AS have been engaged as manager for the Rights Issue (the "Manager"). Advokatfirmaet Selmer AS is acting as legal advisor to the Company, while Advokatfirmaet Wiersholm AS is acting as legal advisor to the Manager.

Underwriting

Pursuant to, and subject to, the terms and conditions of the individual underwriting agreements between the Company and each of the Underwriters (jointly, the "Underwriting Agreements"), the Underwriters have undertaken on a pro-rata basis (not jointly) to underwrite an aggregate subscription amount in the Rights Issue of NOK 182 million (equivalent to approx. USD 17 million) (the "Total Underwriting Obligation"). Any New Shares subscribed in the Rights Issue will reduce the underwriting commitment of the Underwriters but not pre-commitments to subscribe for New Shares from existing shareholders, as described below.

White Crystals Ltd., which following the transfer of shares in the Company from Norsk Titanium Cayman Ltd. as announced on 3 November 2023 will own 28.3% of the shares in the Company, has pre-committed to subscribe for NOK 54.15 million (equivalent to approx. USD 5 million) in the Rights Issue, including a conversion of existing bridge loans provided to the Company in the amount of NOK 21.9 million.

Scatec Innovation AS, owning 25.4% of the shares in the Company, has pre-committed to subscribe for NOK 32.25 million (equivalent to USD approx. 3 million) in the Rights Issue, including a conversion of existing bridge loans provided to the Company in the amount of NOK 21.5 million.

Norsk Titanium Cayman Ltd., which following the transfer of shares in the Company to White Crystals Ltd. as announced on 3 November 2023 will own 6.5% of the shares in the Company, has pre-committed to subscribe for NOK 11.3 million (equivalent to approx. USD 1.05 million) in the Rights Issue, including by partial conversion of existing bridge loans provided to the Company in the amount of NOK 9.15 million.

The bridge loans from White Crystals Ltd., Scatec Innovation AS and Norsk Titanium Cayman Ltd. are further described in stock exchange announcements as of 30 August, 28 September and 3 November 2023.

Together with certain other existing shareholders and external investors, Scatec Innovation AS, Norsk Titanium Cayman Ltd. and White Crystals Ltd. have underwritten at total of NOK 139 million (equivalent to approx. USD 13 million) of the Rights Issue (the "Bottom Guarantee"), for a compensation of 10% of their underwritten amount under the Bottom Guarantee, payable in new shares in the Company at the subscription price in the Rights Issue.

In addition to the Bottom Guarantee, Buntel AB, a subsidiary of MolCap Invest AB, has underwritten NOK 43 million (equivalent to approx. USD 4 million) of the Rights Issue (the "Top Guarantee"), for a compensation of 6% of its underwritten amount under the Top Guarantee payable in cash and (ii) 50 million warrants at equal terms to the Warrants issued in the Rights Issue (the "Additional Warrants"), subject to the number of Additional Warrants being a minimum of 7.5% of maximum number of shares issued in the Rights Issue, capped at 75 million Additional Warrants.

Subscription price, subscription rights, Warrants and proceeds

The subscription price for the new shares to be issued in the Rights Issue, and thus the exact number of new shares and the exact amount of the share capital increase, will be proposed by the board of directors, based on a recommendation from the Manager, the day prior to the EGM. Pursuant to the Underwriting Agreements, the subscription price in the Rights Issue shall be the theoretical ex rights price (TERP) based on the volume-weighted average price (VWAP) of the Company's shares on the Oslo Euronext Growth the three trading days prior to the EGM, less a discount of at least 35%. However, the maximum subscription price for the New Shares shall not exceed a 15% premium to the TERP calculated based on the last closing price of the Company’s shares on Euronext Growth Oslo prior to the Company’s announcement of the partially underwritten Rights Issue less a discount of at least 35%. The board of directors' resolution in this respect will be announced through a stock exchange announcement on the day prior to the EGM and be reflected in the final proposed resolution to the EGM.

Pursuant to section 10-4 of the Norwegian Private Limited Companies Act, the shareholders of the Company at the date of the EGM, and who are not resident in a jurisdiction where such offering would be unlawful or, (in jurisdictions other than Norway) require any prospectus, filing, registration or similar action, will be granted a preferential right to subscribe for and be allocated the new shares in proportion to the number of shares in the Company they own as of that date, and will according to the board of directors' proposal receive subscription rights proportionate to their existing shareholding as registered in the Company's shareholder register in the Norwegian Central Securities Depository (the VPS) at the expiry of 11 January 2024. Provided that a purchase of shares is made with ordinary T+2 settlement, shares purchased up to and including 9 January 2024 will give the right to receive subscription rights, whereas shares purchased from and including 10 January 2024, will not give the right to receive subscription rights. The subscription rights will be tradable and listed on the Oslo Euronext Growth from and including the first day of the subscription period and until 16:30 (Oslo time) four trading days prior to the expiry of the subscription period. Over-subscription will be permitted.

The subscribers in the Rights Issue will without cost be allocated one Warrant issued by the Company for every two new shares allocated to, and paid by, them in the Rights Issue. Each Warrant will give the holder a right to subscribe for one new share in the Company at a subscription price equal to the volume-weighted average price (VWAP) of the Company’s shares on the Oslo Euronext Growth on the three last trading days prior to the first date on which the holder can exercise the warrant in each exercise period less 30%, but in any event not exceeding the subscription price in the Rights Issue plus 30%. The Warrants may be exercised during two exercise periods: (i) on or about 10 – 21 June 2024, and (ii) on or about 18 – 29 November 2024. Other terms and conditions for the Warrants will be determined by the EGM. The Company shall use reasonable efforts to seek to ensure that the Warrants are admitted to trading on a relevant trading venue as soon as possible following completion of the Rights Issue but there can be no assurance that such admittance to trading will be obtained.

The maximum gross proceeds from the Rights Issue will be NOK 225 million (equivalent to approx. USD 21 million) and the minimum gross proceeds will be NOK 182 million (equivalent to approx. USD 17 million).

The gross proceeds from the exercise of Warrants will depend on the number of Warrants issued and exercised, as well as the final exercise price for the Warrants, determined as described above. Provided that the Rights Issue is subscribed in full, and the Warrants are executed at the maximum subscription price 30% above the Rights Issue subscription price, the Company may in total receive proceeds of up approx. NOK 370 million (equivalent to approx. USD 35 million) plus any proceeds from the exercise of the Additional Warrants.

Prospectus and indicative timeline

In connection with the Right Issue a prospectus (the "Prospectus") will be prepared which is subject to the approval by the Norwegian Financial Supervisory Authority (the "NFSA"), expected to be obtained on 5 February 2024. The Prospectus will be published prior to the commencement of the subscription period and will form the basis for subscriptions in the Rights Issue. Provided that the prospectus is approved by the NFSA in time, the subscription period for the Rights Issue will commence on 6 February 2024 and expire on 20 February 2024 at 16:30 hours (Oslo time). In the event that the Prospectus is not approved in time to uphold this subscription period, the subscription period will commence on the second trading day on the Oslo Euronext Growth following the approval of the Prospectus and expire at 16:30 hours (Oslo time) two weeks thereafter. A further description of the Rights Issue, including full terms of the Rights Issue, and of other circumstances that must be considered upon subscription of shares in the Rights Issue will be included in the Prospectus.

Included below is an indicative timeline for the Rights Issue:

9 January 2024: Extraordinary general meeting

9 January 2024: Last day of trading in the shares including subscription rights

10 January 2024: First day of trading in the shares excluding subscription rights

11 January 2024: Record date for determination of the right to receive subscription rights

On or around 5 February 2024: Publication of the prospectus

6 February 2024: Commencement of the subscription period and first day of trading in the subscription rights

On or around 14 February 2024: Last day of trading in the subscription rights

On or around 20 February 2024: Last day of the subscription period

On or around 22 February 2024: Allocation of the new shares and Warrants

On or around 23 February 2024: Payment of the new shares

On or around 26 February 2024: Registration of the share capital increase with the Norwegian Register of Business Enterprises

Bridge loan

To extend the Company’s cash runway from mid-December 2023 until completion of the Rights Issue, the Company expects to enter into a bridge loan agreement with Buntel AB of up to the NOK equivalent of USD 5 million (the "Buntel Bridge Loan"). Buntel AB may convert any amount drawn under the Buntel Bridge Loan to satisfy its subscription obligation under the Top Guarantee.

For more information, please contact:

John Andersen, Chairman of Norsk Titanium AS

Email: John.Andersen@scatec.no

Tel: +47 90 17 40 80

Carl Johnson, President & CEO Norsk Titanium AS

Email: Carl.Johnson@norsktitanium.com

Tel: +1 518 324 4010

Ashar Ashary, CFO Norsk Titanium AS

Email: Ashar.Ashary@norsktitanium.com

Tel: +1 518 556 8966

This information is considered to be inside information pursuant to the EU Market Abuse Regulation (MAR) and is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act. The stock exchange announcement was published by Anne Lene Gullen Bråten, Director Finance of Norsk Titanium AS, at the time and date stated above in this announcement.

Norsk Titanium AS: Key information relating to the preferential rights issue

Reference is made to the stock exchange announcement published by Norsk Titanium AS (the "Company") earlier today, on 4 December 2023, regarding the resolution by the Company's board of directors to propose that the Company carries out a share capital increase, by way of a partly underwritten rights issue, to raise gross proceeds of up to NOK 225 million (equivalent to approx. USD 21 million) (the "Rights Issue").

Date on which the terms and conditions of the preferential rights issue were announced: 4 December 2023

Last day including right: 9 January 2024

Ex-date: 10 January 2024

Record Date: 11 January 2024

Date of approval: 9 January 2024

Maximum number of new shares: 2,812,500,000

Subscription price: Minimum NOK 0.08 and maximum NOK 0.82225

Ratio preferential rights: To be announced when clarified

Subscription ratio: To be announced when the final number of new shares is determined

Managers: Carnegie AS

Will the rights be listed: The Company will apply for trading of the preferential rights on the Oslo Euronext Growth

ISIN for the preferential rights: To be announced when clarified

Other information: The subscription price for the new shares to be issued in the Rights Issue, and thus the final number of new shares and the exact amount of the share capital increase will be proposed by the board of directors, based on a recommendation from the manager, the day prior to the extraordinary general meeting to be held on 9 January 2024 (the "EGM"). The subscription price in the Rights Issue shall be the theoretical ex rights price (TERP) based on the volume-weighted average price (VWAP) of the Company's shares on the Oslo Euronext Growth the three trading days prior to the EGM, less a discount of at least 35%. However, the maximum subscription price for the new shares shall not exceed a 15% premium to the TERP calculated based on the last closing price of the Company’s shares on Euronext Growth Oslo prior to the Company’s announcement of the partially underwritten Rights Issue less a discount of at least 35%. See the stock exchange announcement published earlier today, on 4 December 2023, for further information regarding the Rights Issue. The Rights Issue is subject to approval by the EGM. Notice of the EGM will be sent on 13 December 2023.

This information is published in accordance with the requirements of the Continuing Obligations.