Atlantic Sapphire : 20220114 - Atlantic Sapphire ASA - Amended Interim Consolidated Financial Statements for the Six Months Ended June 30 2021

Interim

Consolidated

Financial

Statements

SIX MONTHS ENDED 30 JUNE 2021 (AMENDED)

In accordance with

International Financial

Reporting Standards

AT L A N T I C S A P P H I R E	A M E N D E D I N T E R I M C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S

STATEMENT BY THE BOARD OF DIRECTORS AND CEO 30 June 2021 Interim Consolidated Financial Statements

The Board of Directors and CEO have today considered and approved the interim consolidated financial statements of Atlantic Sapphire ASA (collectively, the "Group") for the period 1 January 2021 to 30 June 2021.

To the best of our knowledge, we declare that the condensed set of interim consolidated financial statements, which have not been audited or reviewed by the Group's independent auditors, has been prepared in accordance with IAS 34, Interim Financial Reporting, and provides a true and fair view of the Group's assets, liabilities, and financial position as of 30 June 2021, as well as the Group's overall results for the period 1 January 2021 to 30 June 2021.

To the best of our knowledge, we declare that the Interim Management Report provides a true and fair review of important events that occurred during the accounting period, their impact on the condensed set of interim consolidated financial statements, principal risks and uncertainties for the remaining six months of the financial year, and material related party transactions.

The Board of Directors and CEO of Atlantic Sapphire ASA

Vikebukt, 14 January 2022

Johan E. Andreassen

Chairman

Alexander Reus	André Skarbø	Ellen Marie Sætre
Director	Director	Director

Patrice Flanagan	Runar Vatne	Tone Bjørnov
Director	Director	Director

Karl Øystein Øyehaug

Managing Director of ASA

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AT L A N T I C S A P P H I R E	A M E N D E D I N T E R I M C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S

INTERIM MANAGEMENT REPORT

30 June 2021 Interim Consolidated Financial Statements

KEY HIGHLIGHTS - HALF YEAR 2021

• Substantial completion of US Phase 1 Bluehouse allows for fine-tuning of systems and stable production
• Ramp-upin US operational performance: US batches introduced in mid-2020 experienced more stable conditions in comparison to initial batches introduced during US Phase 1 start-up conditions
• Increased revenues from the commencement of its US harvests and experienced increased costs from its ramp-up of operations and personnel levels in the US
• Consistent premium price achievement on premium fish (superior, 3kg+)
• Total harvest volume of 1,275t HOG for H1'2021
• Focus on brand development to promote brand awareness, recognition, and partnership with key food service players
• Risk mitigation strategies implemented to address key operational, systemic, and diversification risks
• Creation of Facilities Operation Advisory Board established to prevent future incidents by reviewing and approving all nonstandard procedures
• US Phase 2 construction shifts project approach to optimize quality and efficiency while taking advantage of all previous learnings from
  US Phase 1 construction

KEY FIGURES

Unaudited (USD 1,000)30 June 2021 30 June 2020 31Dec2020

Operating revenue	10,878	2,502	6,270
Operating EBIT	(49,732)	(23,211)	(46,595)
Operating EBIT %	-457.18%	-927.70%	-743.14%
EBITDA	(42,242)	(21,922)	(39,850)
Net loss	(51,538)	(31,574)	(55,193)
Earnings per share:
Basic earnings per share	(0.57)	(0.46)	(0.74)
Diluted earnings per share	(0.57)	(0.46)	(0.74)
Non-IFRS measures
Operating EBIT	(49,732)	(23,211)	(46,595)
Add back:
Depreciation and amortization	7,490	1,289	6,745
Fair value adjustment on biological assets	(4,973)	11,216	9,478
EBITDA, pre-fair value adjustment on biological assets
(47,215)	(10,706)	(30,372)
Total assets	392,061	266,321	320,959
Net interest bearing debt	(37,234)	60,301	22,633
Equity share	81.77%	66.73%	79.59%
Volume of fish harvested during the period (tons gutted weight)	1,275	353	989
Operating EBIT / kg (gutted weight)	(39.01)	(65.75)	(47.11)

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AT L A N T I C S A P P H I R E	A M E N D E D I N T E R I M C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S

GROUP FINANCIAL PERFORMANCE

Overall Group Operations

Group net loss for the six months ended 30 June 2021 was USD 51.5m, which represents an increase in net loss of USD 19.9m compared to the Group's net loss of USD 31.6m for the six months ended 30 June 2020. Overall, the Group increased revenues from the commencement of its US harvests and experienced increased costs from its ramp-up of operations and personnel levels in the US.

Revenue and Harvest Volume

The Group's revenue for the six months ended 30 June 2021 was USD 10.9m, which represents an increase of USD 8.4m compared to the Group's revenue of USD 2.5m for the six months ended 30 June 2020. Total volume of fish harvested for the six months ended 30 June 2021 was 1,275 tons HOG, which represents a 922 ton increase in comparison to the Group's harvest volume of 353 tons for the six months ended 30 June 2020. The increase in both revenue and harvest volume was attributed to the ramp-up of operations following significant completion of the US Phase 1 Bluehouse.

Cost of Materials

The Group's cost of materials for the six months ended 30 June 2021 was USD 38.4m, which represents an increase of USD 33.1m over the Group's cost of materials of USD 5.3 for the six months ended 30 June 2020. The increase in cost of materials recognized for the current period is attributed to the initial US batches that carried higher production costs due to underutilization of plant capacity and the initial conditions during US Phase 1 construction. Of the current period amount, USD 17.8m was attributed to cost of fish sold, USD 16.3m was attributed to the write-off of biomass incidents and excess production costs from underutilized plant capacity, and USD 4.3m was attributed to processing and shipping costs.

Fair Value Adjustment on Biological Assets

The Group's upward fair value adjustment on biological assets for the six months ended 30 June 2021 was USD 5.0m, which represents an increase of USD 16.2m compared to the Group's downward fair value adjustment on biological assets of USD 11.2 for the six months ended 30 June 2020. The increase was primarily attributed to the write-off of production costs from biomass incidents and underutilized plant capacity through cost of materials.

Salary and Personnel Costs

The Group's salary and personnel costs for the six months ended 30 June 2021 was USD 4.3m, which represents an increase of USD 1.5m compared to the Group's salary and personnel costs of USD 2.8m for the six months ended 30 June 2020. The increase was primarily attributed to the overall increase in personnel count and key new hires.

Other Operating Expenses

The Group's other operating expenses for the six months ended 30 June 2021 was USD 15.6m, which represents an increase of USD 10.5m compared to the Group's operating expenses of USD 5.1m for the six months ended 30 June 2020. Of the current period amount, approximately USD 7.4m consisted of temporary rental chillers and generators attributed to a breakdown in its internal chiller plant causing temporary temperature instability. The remaining other operating expenses were primarily attributed to the overall ramp-up in US operations towards steady- state production.

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AT L A N T I C S A P P H I R E	A M E N D E D I N T E R I M C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S

Depreciation and Amortization

The Group's depreciation and amortization for the six months ended 30 June 2021 was USD 7.5m, which represents an increase of USD 6.2m compared to the Group's depreciation and amortization of USD 1.3m for the six months ended 30 June 2020. The increase was primarily attributed to the substantial completion and commissioning of its fish systems in the Miami Bluehouse.

Non-Operating Items

The Group's non-operating loss items for the six months ended 30 June 2021 was USD 1.6m, which represents a 6.7m decrease of the Group's non-operating loss items of USD 8.3m for the six months ended 30 June 2020. The decrease was primarily attributed to the prior year USD 8.2m finance cost write-off of previously unamortized debt issuance cost upon amending the US Term Loan.

GROUP FINANCIAL POSITION

The Group's total assets as of 30 June 2021 were USD 392.1m, which represents an increase of USD 125.8m compared to the Group's total assets of USD 266.3m as of 30 June 2020. The increase is primarily attributed to significant completion of the Miami Bluehouse, proceeds of the 10 September 2020 and 3 June 2021 capital raises, and ramp-up in biological assets.

The Group's total equity as of 30 June 2021 was USD 320.6m, which represents an increase of USD 142.9m compared to the Group's total equity of USD 177.7m as of 30 June 2020. The increase is primarily attributed to proceeds of the 10 September 2020 and 3 June 2021 capital raises offset by net losses.

The Group completed capital raises on 10 September 2020 for NOK 905.5m (USD 100.4m) and on 3 June 2021 for NOK 1,016m (USD 121m). As of 30 June 2021, 91,013,551 shares were issued and outstanding.

The Group's total liabilities as of 30 June 2021 were USD 71.5m, which represents a decrease of USD 17.1m compared to the Group's total liabilities of USD 88.6m as of 30 June 2020. The decrease is primarily attributed to the USD 20m pay down against the US Term Loan.

The Group's debt to equity ratio as of 30 June 2021 was 22.3%, which represents a decrease of 27.6% from 49.9% as of 30 June 2020. The decrease was primarily attributed to the USD 20m paydown of the US Term Loan, proceeds from the 10 September 2020 and 3 June 2021 capital raises, and net losses.

On 18 April 2020, ASUS obtained a two-year loan payable to PNC Bank, National Association ("PNC") under the Paycheck Protection Program (the "Program") as part of the Coronavirus Aid, Relief, and Economic Security ("CARES") Act passed in March 2020 (the "PPP Loan"). On 7 September 2021, the full USD 1.2m outstanding balance of the Group's PPP Loan was forgiven under the provisions of the CARES Act and recognized as other income in the accompanying consolidated statements of operations.

As of 30 June 2021, the Group's 2020 DNB Credit Facility totaled USD 200m of which USD 102m was committed and USD 98m uncommitted through an accordion facility. Of the committed amounts, USD 50m was outstanding as of 30 June 2021. Remaining undrawn committed amounts consist of a USD 16m US RCF, USD 4m DK RCF, and USD 32m committed term loan for Phase 2 capital expenditures.

GROUP CASH FLOWS

Group cash outflows from operations for the six months ended 30 June 2021 were USD 35.6m, which represents an increase of USD 17.0m compared to the Group's cash outflows from operations of USD 18.6m for the six months ended 30 June 2020. The increase in Group cash outflows from operations was primarily due to the Group's ramp-up of biomass cost of production in compared to prior periods, lower harvest volumes in comparison to production volume, high processing costs, and the breakdown of ASUS' internal chiller plant that resulted in USD 7.4m in short-term temporary rental chillers and generators through 30 June 2021.

Group cash outflows from investing activities for the six months ended 30 June 2021 were USD 20.9m, which represents a decrease of USD 8.9m compared to the Group's cash outflows from investing activities of USD 29.8m. The decrease in Group cash outflows from investment activities was primarily attributed to US Phase 1 construction of the Miami Bluehouse nearing significant completion.

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