Kyoto Group AS

Share Issue/Capital Change • Jan 10, 2023

Kyoto Group AS - Contemplated private placement

Kyoto Group AS - Contemplated private placement

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR

INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN, HONG KONG OR THE UNITED STATES OR ANY

OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE

UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE

SECURITIES DESCRIBED HEREIN.

Lysaker, 10 January 2023: Kyoto Group AS ("Kyoto" or the "Company") today

announces a private placement of new shares in the Company in order to raise

gross proceeds of NOK 45-65 million (the "Private Placement").

Kyoto has engaged Arctic Securities AS and Fearnley Securities AS (together, the

"Managers") to advise on and effect the contemplated Private Placement of new

shares in the Company (the "New Shares"). The number of shares to be issued in

the Private Placement and the price per New Share (the "Offer Price") will be

determined by the board of directors of the Company (the "Board") on the basis

of an accelerated bookbuilding process to be conducted by the Managers.

The net proceeds from the Private Placement will be used to cover the Company's

liquidity needs, including for pre-ordering of long lead-time items for

production of Heatcube, continued market expansion and the related upscaling

activities, building project execution capacity combined with partnering setups

and general corporate purposes.

The minimum amount of the capital raise will not be sufficient to fund all of

the company's planned growth activities set out above, and depending on the

final amount of capital raised in the private placement and a possible

subsequent offering, the company may need to prioritize which initiatives to

pursue or to find additional sources of financing.The following investors and

close associates of primary insiders have, subject to certain conditions,

committed to apply for and will be allocated New Shares in the Private Placement

(the "Pre-committing Investors"):

· Valinor AS has pre-committed to subscribe for a number of New Shares equal

to NOK 8.55 million in the Private Placement.

· Hydro Energi Invest AS has pre-committed to subscribe for a number of New

Shares equal to minimum NOK 3.6 million in the Private Placement.

· KM New Energy AS has pre-committed to subscribe for a number of New Shares

equal to NOK 15 million in the Private Placement.

· Racon Capital Partners has pre-committed to subscribe for a number of New

Shares equal to NOK 5 million in the Private Placement.

· Altitude Capital has pre-committed to subscribe for a number of New Shares

equal to NOK 5 million in the Private Placement.

Certain of the agreements provide for larger investments and allocations in the

event that the Private Placement is completed at the upper level of the size

range.

In addition, members of Kyoto Executive Leadership have signalled that they will

exercise their right to acquire an aggregate of 75,000 shares under the

Company's share incentive program, subject to applicable laws and regulations.

The bookbuilding period in the Private Placement will commence today, 10 January

2023, at 16:30 hours CET and close on 11 January 2023 at 08:00 hours CET. The

Company may, however, at any time resolve to extend or shorten the bookbuilding

period on short or no notice. If the bookbuilding period is extended or

shortened, any other dates referred to herein may be amended accordingly.

The Private Placement will be directed towards selected Norwegian and

international investors, in each case subject to and in compliance with

applicable exemptions from relevant prospectus, filing and other registration

requirements. The minimum application and allocation amount in the Private

Placement has been set to the NOK equivalent of EUR 100,000. The Company may,

however, at its sole discretion, allocate an amount below EUR 100,000 to the

extent applicable exemptions from the prospectus requirement pursuant to the

Norwegian Securities Trading Act and ancillary regulations (including Regulation

(EU) 2017/1129) are available, including to employees and directors of the

Company and the Company group.

Allocation of New Shares will be determined by the Board, at its sole

discretion, in consultation with the Managers, following the expiry of the

bookbuilding period.

Settlement of the New Shares is expected to take place on or about 23 January

2023 on a delivery versus payment basis by delivery of listed shares facilitated

by a pre-funding agreement expected to be entered into between the Company and

the Managers.

The Completion of the Private Placement is conditional upon (i) necessary

corporate resolutions by the Company to consummate the Private Placement and

allocate the New Shares, including final approval by the Board of the Private

Placement and the resolution by an extraordinary general meeting of the Company

expected to be held on 18 January 2023 (the "EGM") to resolve the share capital

increase pertaining to the New Shares, and (ii) the share capital increase

pertaining to the New Shares being registered with the Norwegian Register of

Business Enterprises and the New Shares having been validly issued in the VPS.

The Company may, in its sole discretion and in consultation with the Managers,

cancel the Private Placement, at any time and for any reason prior to the

satisfaction of these conditions without any compensation to the applicants.

The members of the Company's Executive Leadership and Board have agreed to a 6

month lock-up, subject to customary exemptions.

The Private Placement represents a deviation from the shareholders' pre-emptive

right to subscribe for the New Shares. The Board has considered the Private

Placement in light of the equal treatment obligations under the Norwegian Public

Limited Companies Act, the Norwegian Securities Trading Act, the rules on equal

treatment under Oslo Rule Book II for companies admitted to trading on Euronext

Growth Oslo and the Oslo Stock Exchange's Guidelines on the rule of equal

treatment, and deems that the proposed Private Placement is in compliance with

these obligations. The Board is of the view that it will be in the common

interest of the Company and its shareholders to raise equity through a private

placement, particularly in light of the current challenging market conditions

and the time and costs of alternative methods of securing the desired funding

currently available to the Company. By structuring the equity raise as a private

placement, the Company is expected to raise equity efficiently, with a lower

discount to the current trading price, at a lower cost and with a significantly

reduced completion risk compared to a rights issue.

The Company may, subject to completion of the Private Placement and certain

other conditions, consider to conduct a subsequent repair offering of new shares

at the Offer Price in the Private Placement which, subject to applicable

securities law, will be directed towards (i) eligible shareholders in the

Company as of the end of trading today, 10 January January 2023 (and as

registered in the VPS as of the end of 12 January 2023) who were not allocated

shares in the Private Placement and who are not resident in a jurisdiction where

such offering would be unlawful or, for jurisdictions other than Norway, would

require any prospectus, filing, registration or similar action (the "Subsequent

Offering"). Launch of a Subsequent offering will require approval by the EGM of

the Company and a publication of a prospectus to be prepared by the Company. The

subscription price in a Subsequent Offering will be identical with the Offer

Price in the Private Placement. The Subsequent Offering will be subject to

approval by the EGM and the publication of a prospectus.

For more information, please contact:

Håvard Haukdal, Kyoto Group CFO

havard.haukdal@kyotogroup.no

+47 48 10 65 69

About Kyoto Group

Heat accounts for half of industrial energy consumption. Traditionally, nearly

all of it is based on fossil fuels. Kyoto Group's Heatcube, a thermal energy

storage (TES) solution, provides a sustainable and cost-effective alternative by

capturing and storing abundant but variable energy from sources such as solar

and wind. Founded in 2016, Kyoto Group is headquartered in Oslo, Norway, and has

subsidiaries in Spain and Denmark. The Kyoto share is listed on Euronext Growth

(ticker: KYOTO).

More information on www.kyotogroup.no

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. This stock exchange notice

was published by Håvard Haukdal, CFO of the Company, on 10 January 2023 at 16:30

CET.

Important notice:

This announcement is not and does not form a part of any offer to sell, or a

solicitation of an offer to purchase, any securities of the Company. Copies of

this announcement are not being made and may not be distributed or sent into any

jurisdiction in which such distribution would be unlawful or would require

registration or other measures.

The securities referred to in this announcement have not been and will not be

registered under the U.S. Securities Act of 1933, as amended (the "Securities

Act"), and accordingly may not be offered or sold in the United States absent

registration or an applicable exemption from the registration requirements of

the Securities Act and in accordance with applicable U.S. state securities laws.

The Company does not intend to register any part of the offering in the United

States or to conduct a public offering of securities in the United States. Any

sale in the United States of the securities mentioned in this announcement will

be made solely to "qualified institutional buyers" as defined in Rule 144A under

the Securities Act.

In any EEA Member State, this communication is only addressed to and is only

directed at qualified investors in that Member State within the meaning of the

Prospectus Regulation, i.e., only to investors who can receive the offer without

an approved prospectus in such EEA Member State. The expression "Prospectus

Regulation" means Regulation (EU) 2017/1129 as amended (together with any

applicable implementing measures in any Member State.

This communication is only being distributed to and is only directed at persons

in the United Kingdom that are (i) investment professionals falling within

Article 19(5) of the Financial Services and Markets Act 2000 (Financial

Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities,

and other persons to whom this announcement may lawfully be communicated,

falling within Article 49(2)(a) to (d) of the Order (all such persons together

being referred to as "relevant persons"). This communication must not be acted

on or relied on by persons who are not relevant persons. Any investment or

investment activity to which this communication relates is available only for

relevant persons and will be engaged in only with relevant persons. Persons

distributing this communication must satisfy themselves that it is lawful to do

so.

Matters discussed in this announcement may constitute forward-looking

statements. Forward-looking statements are statements that are not historical

facts and may be identified by words such as "believe", "expect", "anticipate",

"strategy", "intends", "estimate", "will", "may", "continue", "should" and

similar expressions. The forward-looking statements in this release are based

upon various assumptions, many of which are based, in turn, upon further

assumptions. Although the Company believe that these assumptions were reasonable

when made, these assumptions are inherently subject to significant known and

unknown risks, uncertainties, contingencies and other important factors which

are difficult or impossible to predict, and are beyond their control. Such

risks, uncertainties, contingencies and other important factors could cause

actual events to differ materially from the expectations expressed or implied in

this release by such forward-looking statements. The Company does not make any

guarantee that the assumptions underlying the forward-looking statements in this

announcement are free from errors nor does it accept any responsibility for the

future accuracy of the opinions expressed in this announcement or any obligation

to update or revise the statements in this announcement to reflect subsequent

events. You should not place undue reliance on the forward-looking statements in

this announcement.

The information, opinions and forward-looking statements contained in this

announcement speak only as at its date, and are subject to change without

notice. The Company does not undertake any obligation to review, update,

confirm, or to release publicly any revisions to any forward-looking statements

to reflect events that occur or circumstances that arise in relation to the

content of this announcement.

Neither the Managers nor any of their affiliates makes any representation as to

the accuracy or completeness of this announcement and none of them accepts any

responsibility for the contents of this announcement or any matters referred to

herein.

This announcement is for information purposes only and is not to be relied upon

in substitution for the exercise of independent judgment. It is not intended as

investment advice and under no circumstances is it to be used or considered as

an offer to sell, or a solicitation of an offer to buy any securities or a

recommendation to buy or sell any securities of the Company. Neither the

Managers nor any of its affiliates accepts any liability arising from the use of

this announcement.

The distribution of this announcement and other information may be restricted by

law in certain jurisdictions. Persons into whose possession this announcement or

such other information should come are required to inform themselves about and

to observe any such restrictions.