Hofseth Biocare ASA

SPIN-OFF OF PROSTATE CANCER CO-TREATMENT PROJECT

Hofseth Biocare ASA ("HBC" or the "Company") today announces the decision to transfer its prostate cancer co-treatment project (the "Project") to a new US entity to be called HBC Immunology Inc. ("HBCI"). HBCI will develop a co-therapeutic treatment for prostate cancer as well as other potential indications related to abnormal cellular iron regulation. The transfer is subject to final agreements.

This Project is a result of HBC's core R&D focus on the health benefits of its products and ingredients resulting from gene expression modulation mechanism of action (GEMM)

Further discovery work at HBC has resulted in several potential pharmaceutical drug leads, as summarized in the 5th November 2021 stock exchange notice (New potential pharmaceutical drug lead by HBC) and the Project was derived from peptides contained in ProGo (also known as SPH – Soluble Protein Hydrolysate). From these peptides two lead peptide candidates for preclinical trial work have been identified and these lead peptides have been modified to enhance their overall profile.

HBC will transfer a provisional patent and a patent application to HBCI and will provide a license to use certain of HBC's intellectual property in the oncology space. In exchange for these contributions, HBC will receive 75 % of the initial equity shares in HBCI.

Dr. Bomi Framroze, who is the Chief Scientific Officer at HBC, will through his company, GPH Biotech LLC., also contribute relevant IP to HBCI for the Project and will in exchange for this IP own 25 % of the initial equity shares in HBCI. HBC and HBCI will also enter an agreement under which HBCI will lease certain personnel that are considered key for the positive development of the Project at cost. HBCI will grant options to certain personnel of HBC that will contribute to the Project as well establish a stock option program for future employees, directors and consultants that shall vest over a four-year period.

Following the initial share issuances and equity grants, it is contemplated that HBCI shall seek to consummate financing from external investors on terms mutually agreeable to HBC and GPH Biotech LLC. HBC expects to continue to hold more than 50 % of the equity in HBCI on a fully diluted basis following the first two rounds of external financing.

While HBC expects to continue to own a majority of the issued shares and financial interest in HBCI, corresponding to its ownership share, HBCI will not be consolidated with HBC for accounting purposes.