Thin Film Electronics : – Contemplated Private Placement

THIN - Contemplated Private Placement

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THIN - CONTEMPLATED PRIVATE PLACEMENT

Oslo, 18 October 2017

Thin Film Electronics ASA ('Thin Film' or the 'Company') has retained Carnegie AS as Sole Global Coordinator and Joint Bookrunner, and Cowen and Company, LLC and DNB Markets (a part of DNB Bank ASA) as Joint Bookrunners (together with Carnegie, the 'Managers') to advise on and complete an undocumented private placement of up to the NOK equivalent of USD 110 million, representing approximately 43% of the outstanding shares in the Company (the 'Private Placement').

The subscription price in the Private Placement will be set through an accelerated bookbuilding process and is expected to be set between NOK 2.50 and NOK 2.65 (the 'Indicative Price Range'). The Company has received significant pre-commitments from existing shareholders, as well as new institutional investors, to subscribe for shares in the Private Placement within the Indicative Price Range.

The application period for the Private Placement commences today at 16:30 CET and closes 19 October 2017 at 08:00 CET. The Company and the Managers may, however, at any time resolve to close or extend the bookbuilding period at their sole discretion and on short notice. The minimum subscription amount in the Private Placement will be the NOK equivalent of EUR 100,000. The Company may, in its sole discretion, allocate an amount below EUR 100,000 in the Private Placement provided that the Company is able to rely on any applicable exemptions from the prospectus requirement pursuant to applicable regulations, including the Norwegian Securities Trading Act and ancillary regulations.

The net proceeds from the Private Placement are intended to fully fund investments and operations until cash break-even based on current projections. Cash break-even is expected to occur in early Q2 2019. Capital expenditures are expected to consume 40% of the proceeds, mainly related to: a) roll-to-roll equipment and installation, and b) back-end development and innovation to increase gross margins on tag sales from 30% to >45%. 55% of the proceeds are expected to be consumed by operational costs, including a ramp in headcount in the software and go-to-market sales teams. The remaining proceeds will fund working capital needs. The company's technical and engineering team is already adequately dimensioned and no significant additions are to be expected. In 2019, production capacity is expected to reach 3 billion NFC equivalent front-end die, and in 2020 to reach 7 billion units. The foregoing overview of the intended use of the proceeds from the Private Placement are estimates only and subject to change as circumstances may warrant.

The Private Placement will be divided into two tranches; Tranche 1 consisting of approx. 81.9 million new shares (representing approximately 10% of the capital of the Company) (the 'Tranche 1 Shares') and a Tranche 2 consisting of up to the number of new shares necessary to raise gross proceeds of the NOK equivalent of USD 110 million (the 'Tranche 2 Shares'). The completion of Tranche 1 of the Private Placement is subject to approval by the Board of Directors of the Company pursuant to an authorisation granted by the Company's general meeting held on 5 May 2017, and the completion of the potential Tranche 2 of the Private Placement will remain subject to the approval by an Extraordinary General Meeting (the 'EGM') expected to be held on or about 13 November 2017.

The Private Placement will be directed towards Norwegian investors and international institutional investors, in each case subject to and in compliance with applicable exemptions from relevant prospectus or registration requirements. The private placement structure of the transaction will inherently require a waiver of existing shareholders' preferential rights to subscribe for new shares. The Board of Directors of the Company considers such structure and waiver necessary and appropriate in the interest of time and successful completion.

The date for settlement of Tranche 1 Shares of the Private Placement is expected to be on or about 23 October 2017 (regular DVP, t+2 basis). Tranche 1 Shares are expected to be tradable on or about 20 October (which shall not be prior to the date on which the share capital is registered in the Norwegian Register of Business Enterprises and announced by the Company).

The date for settlement of the Tranche 2 Shares is expected to be shortly after the EGM, which is expected to be held on or about 13 November 2017, subject to any shortening or extensions of the application period. If a prospectus has not been approved by the Norwegian Financial Supervisory Authority at that point in time, the Tranche 2 Shares may be issued on a separate ISIN and delivered to the investors. These shares would thereafter be converted to the existing ISIN of Thin Film and become tradable on the Oslo Stock Exchange as soon as practically possible following the approval of the prospectus by the Norwegian Financial Services Authority.

For further information, please contact:

Ole R. Thorsnes
CFO
Mobile: +47 91 86 66 97
E-mail: ole.thorsnes@thinfilm.no

Important information:
The release is not for publication or distribution, in whole or in part, directly or indirectly, in or into Australia, Canada, Japan or the United States (including its territories and possessions, any state of the United States and the District of Columbia).

This release is an announcement issued pursuant to legal information obligations, and is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. It is issued for information purposes only, and does not constitute or form part of any offer or solicitation to purchase or subscribe for securities, in the United States or in any other jurisdiction. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the 'US Securities Act'). The securities may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the US Securities Act. The Company does not intend to register any portion of the offering of the securities in the United States or to conduct a public offering of the securities in the United States. Copies of this announcement are not being made and may not be distributed or sent into Australia, Canada, Japan or the United States. The subscription or purchase of shares in the Company are subject to specific legal or regulatory restrictions in certain jurisdictions. Neither the Company nor the Managers assumes any responsibility in the event there is a violation by any person of such restrictions.

The distribution of this release may in certain jurisdictions be restricted by law. Persons into whose possession this release comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. The Managers are acting for the Company and no one else in connection with the Private Placement and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients or for providing advice in relation to the Private Placement and/or any other matter referred to in this release.

Forward-looking statements:
This release and any materials distributed in connection with this release may contain certain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect the Company's current expectations and assumptions as to future events and circumstances that may not prove accurate. A number of material factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)