Lysaker,7 July 2021 Reference is made to the stock exchange announcement byAxxis Geo Solutions ASA (the "Company") today regarding its new strategy and change of name. The Company has today made its first investment under the new strategy by investing in a convertible loan with a face value ofNOK 30 million in Arbaflame AS ("Arbaflame"). Arbaflame has spent a decade and invested aroundNOK 550 million (owner's equity/equity like instruments and grants) in developing a patented technology which enables the production of black pellets from bio waste ("ArbaCore"). ArbaCore can fully replace coal in coal-fired power plants worldwide. When replacing coal with ArbaCore in coal fired power plants, Co2 emissions are reduced by approximately 90% compared to coal. Thus, ArbaCore enables long term use of coal-fired power plants with minimal Co2 emissions and a speedy, cost efficient switch from coal to environmentally friendly energy sources. Arbaflame is a technology developer and enabler of the production process for ArbaCore. As part of its growth strategy, it has an aim to build, own and operate the first ArbaCore production plant(s) in the initial market penetration phase. In the second stage of its growth strategy, it will seek partners in the global market which it will co-own ArbaCore production facilities with and license the use of the ArbaCore technology from Arbaflame. In line with this growth strategy, Arbaflame has recently completed construction of it first production facility in Kongsvinger,Norway (ArbaOne). The facility has an annual production capacity of 70,000 tons of ArbaCore pellets. Arbaflame has recently signed an off-take agreement for most of the production (at ArbaOne) the next 5 years which corresponds to a backlog of up toEUR 65m , given certain conditions being met. The ArbaCore black pellets not only drastically reduces carbon emissions compared to coal, it also has large benefits compared to white pellets and other black pellets on the market in terms of demonstrated fuel properties. Equally important, coal-fired power plants can utilize ArbaCore in their existing plants with only minimal adjustments to the plants and related infrastructure, which also makes ArbaCore the superior economical choice for energy producers. In comparison, upgrading a coal power plant to the use of white pellets have huge costs compared to ArbaCore. Through the same process of making ArbaCore pellets from bio waste, Arbaflame's technology is also able to extract high value biochemicals with significant positive environmental impact and high earnings potential. This product area which operates under the name ArbaRaf, includes bio-chemical products such as furfural, methanol and aromatics. In addition, the company has an R&D program for bi-products such as bioplastics and fish feed. Arbaflame has signed an MOU with a Belgian off taker for the entire volume of furfural from the first production plant at Kongsvinger. The extraction of biochemicals is currently undergoing further R&D to fully utilize the potential and Arbaflame expects that biochemicals has the potential to constitute at least 50% of their earnings over time. Arbaflame has positioned themselves to revolutionize the market for coal-fired energy production by simply replacing the coal with their environmentally friendly ArbaCore pellets. The market potential for ArbaCore is therefore enormous. From current production capacity at 70.000 tonnes per year, Arbaflame expects to add more than tenfold this capacity by 2026 to more than 850,000 tonnes per year, which only constitutes 0.2% of the total coal consumption in EU. In addition to being environmentally friendly, the rising Co2 emission prices have made ArbaCore an economically viable and attractive solution for energy producers, as the CO2 emission costs have risen to a level which makes ArbaOne very price competitive compared to coal in key markets. The market potential for biochemicals is also expected to be very large, and Arbaflame estimates their addressable market currently is aroundUSD 20 billion and includes markets such as bio fuel, aromatics and coatings, and which could increase significantly if their R&D activities related to bioplastics and fish feed materialises. Arbaflame has just completed an efficient and private funding round attracting strong interest from high quality Norwegian investors and raisedNOK 156 million in a convertible loan to fund working capital and further growth. The convertible loan carries an annual interest rate of 3% p.a. and allows holders to convert their debt to equity corresponding to a pre-money equity value of roughlyNOK 500 million . Arbaflame has signed an LOI for a second production facility inSweden and Carbon Transition expects Arbaflame to conduct an IPO inNorway in the foreseeable future. "The investment in Arbaflame reflects our new strategy to become a listed investment vehicle focusing on companies which contribute to the energy transition and Co2 reduction. I am happy to announce that our first investment is Arbaflame, which is a highly promising company with a proven technology, substantial backlog and which address a huge market in desperate need of innovation. We believe Arbaflame, with their strong and dedicated management team and board of directors will, together with their investors, be able to fully utilize their potential and become winners on a global basis", says Gisle Grønlie, Chairman of Carbon Transition ASA (Axxis Geo Solutions ASA ). «We are delighted to initiate a commercial phase for our bio waste based coal replacement fuel, which will contribute to significantly reducing CO2 emissions going forward. We have spent substantial resources to develop our unique technology, which has positioned Arbaflame with high barriers to entry and a platform for strong growth in the years ahead. As we enter the commercial ramp up phase with ArbaOne and developing several new projects to accommodate the demand for our fuel, we are excited to have Carbon Transition as a major investor in our company. The strategy of Carbon Transition goes hand in hand with our ambitions for Arbaflame, and we are pleased to be a part of Carbon Transition's investments as they target being an active investor within the energy transition space with a particular focus on large reductions of CO2 emissions. Arbaflame also attracted an exclusive group of other high-quality investors in the round where Carbon Transition invested, who will join us in our mission to accelerate coal phase out" says Bjørn H. Knappskog, CEO of Arbaflame. * * * In connection with the information set out above, the Company will prepare and publish a supplemental prospectus for the ongoing subsequent offering in the Company, as previously announced. The supplemental prospectus will be published as soon as possible after it has been approved by theNorwegian Financial Supervisory Authority . ContactsGisle Grønlie , Chairman gisle.gronlie@gmail.com +47 917 51 194 Ronny Bøhn, CEO Ronny.Bohn@axxisgeo.com +47 905 58 517Nils Haugestad , CFO Nils.Haugestad@axxisgeo.com +47 977 04 439 About Carbon Transition ASA (in the process of changing the company name fromAxxis Geo Solutions ASA ) Carbon Transition ASA ("CT") is an investment company listed onOslo Stock Exchange (Euronext Expand Oslo) and traded under the ticker Axxis. CT has a focus towards investing in companies and technologies engaged in the "energy transition" area, which contribute to significant reductions of carbon emissions. CT may also invest more broadly in the "energy transition" space. CT has a legacy OBN seismic business operating under the nameAxxis Geo Solutions , with both a node-technology seismic contract business, and a multiclient library. This business unit is categorized as an investment, and revenues generated from this business unit may be invested in the "energy transition" area. More information on www.axxisgeo.com. This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act.
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