Oslo, 13 May 2014 Agroplas AS – Shareholder update Dear shareholders Our website, www.agroplas.com is regularly updated with news that are suitable for publication. This letter is intended to fill you in a bit on the latest developments. We also encourage shareholders to meet at the scheduled information meetings at our office at Engebrets vei 3, Oslo, on May 16th and May 20th. Those that are unable to attend may request telephone or Skype appointments instead by sending an email to [email protected]. Agroplas has never wanted to sell hardware. The goal is to get a share of the value (cost savings, increased revenue) that our process solutions contribute to, and to create and capture new market opportunities by developing and owning derived products. This implies industrial partnerships. For all of our current partners confidentiality is a precondition. This makes written shareholder information challenging. We will try to explain what we can about what all is about, and we can fill in a bit more when we talk. Cash situation & cash needs Current cash reserve is ca NOK 7.5 million, and there are grants coming in. Fixed cost per month is currently NOK 0.5 million. This will increase to NOK 0.8 million per month by the end of 2014 due to planned recruitments. In addition, our development projects rely extensively on external R&D services. In summary, the cash reserve is far from sufficient to make us cash positive given the current development trajectory. The cash that shareholders are asked to invest in the coming shareholder meeting on May 16th, will meet all cash commitments in 2014, and give us a strong enough position to raise the remaining funding at favorable terms for current shareholders. Project activity Agroplas’ two main projects are the solutions/products related to eggshells (medical and nonmedical) and solid biomass. In addition, we have a portfolio of related projects which are kept simmering until the customer is ready and/or we have secured the necessary human and financial resources. Biovotec AS = Wound healing and anti-inflammatory devices based on eggshell membrane As detailed on our website, we have established an international R&D consortium to develop new, high-value / low-volume products based on eggshell ingredients. We have secured a large grant and have started to extend our IP portfolio. And we are interacting with multiple international nutraceutical and pharmaceutical companies. All exiting, but nothing will be concluded before summer. AgroPlas AS Org no: 994724703 Engebrets vei 3, Oslo, Norway PO box 1001 Hoff, N-0218 Oslo www.agroplas.com [email protected] Page 1 of 2 Confidential Agroplas AS – Shareholder update May 13, 2014 While Biovotec may seem far from Agroplas’ roots, it came to be through a combination of our innovative separation technology, our market-driven business approach, and our capability to attract talent. This is a high-risk adventure with the potential of very great rewards as well as total failure. We are currently in negotiations with Nortura to place a pilot plant on their egg breaking plant in Norway. Our cooperation incorporate both hardware installations and product/market cooperation. Non-medical eggshell process and products Substantial market opportunities exist for our eggshell business beyond Biovotec. Numerous eggbreakers have expressed interest in using our eggshell process technology; potential contracts will be negotiated once the Nortura plant has been put into operation. Moreover, we are cooperating with external R&D and industry players to develop other eggshell-derived products. In this work, Biovotec will remain the sole outlet for biomedical applications of the eggshell membrane. Standard Bio – bioenergy value chain concept From the start, the goal of the Standard Bio project has been to improve the emerging bioenergy value chain. Initially, we have been focused on delivering a more cost-efficient way of drying biomass, which accounts for up to 50% of the cost of traditional production methods. Thus far, we have filed a patent application for a new dewatering process, and have commissioned a prototype at Moelven Telemarksbruket i Bø. We are currently in dialogue with several potential industrial customers for this process. A very promising hardware configuration is more and more likely to be a reality within a year. Going forward, the big big X factor is if we can make products/value out of the wood juices that arise as a by-product from our process. We are optimistic, but evidence will not be produced in 2014. Other applications Apart from eggshells and biomass, several solutions are in development. We are working with the customer on a new solution for recycling solar silicon from the customer’s process. The technical and commercial viability is proven and in line with the customer’s specifications. The final decision to move to commercial implementation rests on the customer’s process optimization decisions. Whatever the outcome of this particular application, the achievements to date is a solid basis for new mineral processing solutions going forward. Based on our previous work on non-thermal rubber drying, we are currently cooperating with an international solution provider to the rubber industry to provide an integrated solution. Moreover, we are in dialogue with several interested parties on the further development of the solution for non-organic sludge drying. AgroPlas AS Org no: 994724703 Engebrets vei 3, Oslo, Norway PO box 1001 Hoff, N-0218 Oslo www.agroplas.com [email protected] Page 2 of 2