Kyoto Group AS

Investor Presentation • Jan 10, 2023

MARKET BREAK-THROUGH WITH PROVEN TECHNOLOGY INVESTOR PRESENTATION JANUARY 2023

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KYOTO GROUP COMPANY UPDATE JANUARY 2023

Update Summary as we go into launch of Private Placement

Technological	2 new LoIs
development	achieving target
collaboration	of 5 LoIs
with Alfa Laval	for 2022
Exploring Project	NJV installation
financing with	towards
Kyotherm	commisioning

The partnerships with Alfa Laval, Kyotherm and the two new LoIs are not yet released to the market

In parallel with this the Kyoto commercial pipeline has continued to grow while the first Heatcube installation is proressing towards commissioning as planned

Potential pipeline covering multiple industries in targeted markets

Storage pipeline (MWh)

Assessment: Identified opportunities, dialogue initiated, not all potential storage sizes quantified (targeting phase, 10% probability) | Proposal: NDA signed, commercial offer sent to and under evaluation by customer (Evaluating phase, Ø 50% probability) | Negotiation: LoI signed, commercial contract in negotiation (Negotiation phase, Ø 70% probability) | Construction: Currently in installation (Installation phase, 90% probability)

Kyoto offers the Heatcube™ with two commercial models

The market break-through is expected roughly with a 50/50 volume split on the two commercial models

Heat as a Product (HaaP)

Traditional Product Sale

• o EPC or direct sales
• o Support and service agreements with customers
• o One-time payments

Heat as a Service (HaaS)

Heat Sales to Customers

• o Heat purchase agreements (HPA)
• o Operated by Kyoto and/or partner
• o Recurring stable, long-term revenues

Second Letter of Intent (LoI) in Food & Beverage Industry

Background

• o Leading olive oil producer in Spain
• o Renewable solution for heat generation for wastewater treatment
• o Replacing natural gas boiler reducing the CO2 emission and giving a competitive advantage for the client's operation

Status

• o Thermal storage of 64 MWh
• o Annual capacity of up to 34 GWh thermal energy
• o Partner will install solar panels, so the Heatcube will ensure emission-free heat production both day and night

Goal

o Commissioning during the second half of 2023

Kyoto's partner in Spain Over 50 olive oil plants in Spain alone

"We have always been committed to making our products in an ecological and sustainable way. The Heatcube will enable us to substantially reduce the consumption of natural gas for heat during the production process, making our oils even more sustainable."

Technical Director, Kyoto's partner

Third Letter of Intent (LoI) in Food & Beverage Industry

"Sustainability and the use of renewable energy are fundamental targets for our owners. Our motivation for working with Kyoto is to provide a stable and cost-effective supply of sustainable process heat from the Heatcube, and we look forward to maturing this project further"

Production and technical manager, Kyoto's partner

Kyoto's partner in Hungary

Background

• o Leading sugar and alcohol producer in Hungary
• o Replacing natural gas boiler reducing the CO2 emission and giving a competitive advantage for the client's operation

Status

• o Thermal storage of 64 MWh
• o Annual capacity of more than 20 GWh thermal energy

Goal

o Commissioning during late 2023/ early 2024

Exploring project financing with Kyotherm

Significant strategic synergies, LoI signed, currently negotiating commercial terms

+

Project SPV

• o Kyoto to provide technology (EPC and O&M)
• o Kyotherm to provide financing (Heatcube capex)

Technology development collaboration with Alfa Laval

LoI signed, currently negotiating scope & commercial terms for technology development agreement

+

Joint development of new innovative technologies for

• o recovery, transfer and storage of waste heat
• o heat transfer from electrical heater to various sources of heat using molten salt

Alfa Laval is a world leader in heat transfer, fluid handling & separation

From start-up to scale-up

At market break-through with proven technology

Key developments towards 2025 targets Revised Kyoto targets

2022

• o First commercial installation
• o Signing of several commercial orders, with large industrial companies
• o Doubling of organization
• o Explore M&A opportunities and financing

2023

• o New installations in H2 2023
• o Signing of 5-10 commercial orders anticipated
• o HaaS / HaaP volume split of around 50/50 anticipated
• o Solid market presence in Spain established
• o Organizational scale-up capabilities well established

2024

• o Strong foothold in key markets established
• o Accelerating industrialization of the Heatcube
• o Signing of additional 10-20 commercial orders anticipated
• o Increasing focus on profitability, approaching break even

2025

• o > 2000 MWh storage capacity installed
• o EBITDA break-even
• o LCoS <15* EUR/MWh
• o CapEx <40 EUR/kWh
• o A billion NOK revenue company

MT & BoD with extensive industry and scale-up experience

Camilla Nilsson	Håvard Haukdal	Bjarke Buchbjerg	Tim de Haas	Peter Iversen	Susanne Vinje	Agnieszka Sleds	Henrik Holck-Clausen
Chief Executive Officer	Chief Financial Officer	Chief Technology Officer	Chief Commercial Officer	Chief Manufacturing Officer	Chief Supply Chain Officer	Chief Project Officer	Chief People & Culture Officer
Eivind Reiten	Thorleif Enger	Arne Erik Kristiansen	Pål Selboe Valseth	Ivar Andreas Valstad	Hans Olav Kvalvaag

Board member Board member

Board member

Chairman

Board member

Board member

Company highlights

At market break-through with proven technology

Extensive global heat potential for electrification

Proven, modular Heatcube technology

Strategy with clear commercial priorities concluded

On the door-step to market breakthrough

Strong eco-system for execution

Key financials and targets

• 50% of the global energy is used for heat production , and decarbonization through electrification requires energy storage
• The global addressable market for Kyoto's Heatcube comprises of 11,000 TWh equal to more than 1 trillion euro*
• Kyoto's Heatcube is a modular and scalable thermal storage solution that is built on the molten salt technology used since 20+ years within the Concentrated Solar Power (CSP)
• Driven by the continuous technology development, scaling up and optimizing the supply chain, the targeted CAPEX is set to 40 €/kWh of storage for 2025
• Based on market analysis, 5 focus markets and 6 key industries have been identified
• The value for the industry is primarily created by load shifting and participating in the reserve market and is offered either as Heat-as-a-Product (HaaP) or as Heat-as-a-Service (HaaS)
• In 2022 Kyoto gained significant traction in the market and is expected to sign 5-10 LoIs with partners in different targeted industries and geographies
• A current potential pipeline with more than 1800 MWh storage demand to ensure a continuous growth
• Established a strong eco-system of partners and suppliers optimizing pre-assembling of the modules as well as ensuring a scalable project execution organization
• Backed by a senior industrial board of directors, the multi-national management team carries over 120 years of relevant scaling-up and industrial experience leading a highly diversified organization
• Unit economics shows attractive cases with target EBITDA margin levels around 25%
• Within 2025 several 1000 MWh of thermal storage is expected to be installed generating profitability

Kyoto at a glance

At market break-through with proven technology

Competitive cost position EUR 1 000 billion market* to electrify process heat Proven Technology 1 2 3

At market break-through with 2 100 MWh in pipeline** Attractive business case

2/3 of industrial energy demand is for heat, not electricity

90% of industrial heat generation comes from fossil fuels

Geopolitical situation fuelling the need to replace existing industrial gas boilers

Serviceable Addressable Market for Kyoto around 11 200 TWh or EUR 1 000 billion*

Well positioned to be market leading

Potential to become market leading

Innovative application of proven technology, storage of energy in molten salt, coupled with electric heater and steam generator

Relevant patents and world class engineering competence acquired through acquisition and organic growth

First mover advantage, 1-2 years ahead of competition

Plug and play solution to replace currently installed industrial gas boilers to deliver process heat of 170-525°C

Competitive thermal storage solution with 2025 targets of LCOS of <20 EUR/MWh heat output and CAPEX of <40 EUR per kWh installed storage capacity

Expected EBITDA contribution of 25% from HaaS Heatcube installation

Solid recurring revenues based on 50% sales from Heat as a Service (HaaS) with revenues from 2023 and targeted EBITDA break-even at latest 2025

* Based on Aurora report 2021; **Includes customers where a dialogue is initiated, as well as customers in negotiations and under contract

OUR MARKET OPPORTUNITY EXTENSIVE GLOBAL HEAT POTENTIAL

Decarbonization impossible without energy storage

The world is not on track to limit the rise in global temperature to 1.5º celcius...

Urgent need for energy transition and electrification through renewables

The challenge: Unmatched supply and demand

Geopolitical situation in Europe

Fueling the need for reduced industrial gas consumption and demand for Kyoto's solutions

Heat accounts for half of global energy consumption

Global energy demand

Heat 50%		Transport 30%	Electricity 20%
Indust. processes 50%	Buildings 47%	Agri 3%

89%

of heat produced by fossil and non-renewable fuel sources make up

40%

of global CO² emissions

Intra-day price volatility is 4-5x higher compared to 2018 Price volatility expressed as 5 cheapest hours vs 6am-10pm

Change in price volatility (€/MWh)

• o Share of renewable energy in the energy mix continuously increases
• o The flexibility on supply side results in higher intraday price volatilities
• o Increased number of hours with negative prices are expected

Kyoto's Heatcube™

enables industrial partners to benefit from off-peak electricity prices and from participating in the reserve market

Load Shifting Reserve Market

11 200 TWh or more than EUR 1 000 billion* market potential

Temperature ranges and

example for industrial processes Global Heat demand and investment requirements*

*Aurora 2021=>https://f.hubspotusercontent40.net/hubfs/8855495/documents/2021-11-25%20Aurora%20-%20Kyoto%20presentation%20CMD%20Q4%202021.pdf TAM (Targeted Addressable Heat Market) = Global heat demand – heat demand outside the industry SAS (Serviceable Addressable Segments) = TAM – heat demand outside relevant temperature range – existing low-carbon heat + pre-heating demand

HEATCUBE TECHNOLOGY PROVEN MODULAR

The origin of proven Kyoto Heatcube™ technology

Solar thermal power stations in the world

• o Operational: 57
• o With a storage capacity: 28
• o Announced & under construction for future use: 21

Heatcube 2.0 for serial production

Improving energy density from 47 kWh/m2 to 233 kWh/m2

• o Major energy density improvement
• o Significant material cost reduction
• o Same amount of valves for 3,7X more energy stored
• o Control system optimization
• o Hydraulic design improvements
• o Construction optimization, cost and time

Heatcube 2.0

Key competitive advantages

• o Energy density
• o Charge/discharge simultaneously
• o Dispatchable, < 1min response
• o Stable delivery of steam (temp)

o Cost

Heatcube 2.0 Key Metrics

• o Charging capacity: 10, 20 or 30MW
• o Storage capacity: 16 96 MWh
• o Storage time: long duration (> 8 hours)
• o Discharge capacity: up to 5 MW
• o Discharge in form of steam
• o Temperature range of steam: 170-415°C
• o Lifetime 25 years
• o RTE of more than 90%*
• o Less than 1 minute from standby to charge, discharge or simultaneous charge and discharge

Footprint: ~ 170 sq.m - 310 sq.m Height: ~ 15m

Weight: ~ 400 MT – 1,500 MT

Modular applications of the Heatcube

Same product, multiple configurations drive flexibility and reduce cost

Heatcube unit economics

Heatcubes come in multiple configurations, and EBITDA contributions vary across countries and client user patterns

Medium – HC 10.64.5 Demand of 20,000 MWh/year Industry: Food & Beverages

Large – HC 20.88.5 Demand of 35,000 MWh/year

Industry: Food & Beverages

Heat price	80 EUR/MWh	80 EUR/MWh
Power, Grid tariffs and flexibility reserve**	- 60 EUR/MWh	- 59 EUR/MWh
O&M*	- 2 EUR/MWh	- 1 EUR/MWh
Anticipated EBITDA	= 18 EUR/MWh	= 20 EUR/MWh

contribution***

= 20 EUR/MWh 700 000 EUR/year

* RTE (Round-trip Efficiency) of 90% | ** Comparable to a PPA price 40-50 EUR/MWh | *** 5-15% reduction in charging cost when participating in Frequency Reserve Markets

396 000 EUR/year

Heatcube CAPEX roadmap

On track to deliver on target CAPEX roadmap, establishing a solid foundation for the Heatcube platform

* Developments that will be beneficial for a group of installations, hence proportion of cost is allocated to each installation

** Site preparation costs and grid connection costs vary significantly for different client sites and need to be carried by each client

Heatcube Levelized Cost of Storage (LCOS) roadmap Strenghtening ambition – Kyoto targets 2025 LCOS <15 EUR/MWh

LCOS (EUR / MWh) =

Sum storage costs over lifetime (EUR) ________________________________

Sum produced heat over lifetime (MWh)

• o The Levelized Cost of Storage (LCOS) reflects the total cost of the storage technologies on a per output unit basis
• o Heat storage comparisons for LCOS indicates a very competitive edge for the Heatcube technology
• o Original target for 2025 was LCOS < 20 EUR / MWh
• o Updated analyses indicate that we currently are slightly north of 20 EUR/MWh
• o We continue to chase for improvements and strengthen our target to 2025 LCOS <15 EUR/MWh

Competitive landscape

First mover advantage with proven technology, only molten salt company with heat as value proposition

ON TRACK EXISTING PROJECTS

Nordyllandsværket project progress

Towards commissioning Jan 2023

• o Permits received, foundation cast, tanks installed and salt melted, SGS installed, piping initiated
• o "Best of breed" Gen 1.0 solution under installation. Key learning essentials to develop Gen 2.0
• o Expected commissioning scheduled to start in January 2023

MoU with Hydro REIN to develop combined renewable energy & thermal energy storage solutions for industrial players

Agreed on a joint go-to-market approach to industrial clients:

• o Hydro REIN offers guaranteed renewable energy
• o Kyoto Group's Heatcube offers renewable heat
• o Kyoto Group will co-design the solution and participate in serving the clients

Target of 3 to 5 pilot and commercial projects over the next two years with identified clients

• o Guaranteed renewable energy and heat on demand
• o For industrial clients to decarbonize and optimize both their energy consumption and heat demand

Letter of Intent (LoI) after winning Hungarian tender

Spearheading into cogeneration industry in Spain

Background

• o Competitive tender in Hungary to install thermal energy storage solution at a major power plant
• o Best solution out of six competing technologies

Status

• o First power-to-heat-to-power configuration of Kyoto's Heatcube
• o 56 MWh of thermal storage, which will be connected to a steam turbine providing electricity back to the grid
• o Annual capacity of more than 5,000 MWh electricity

Goal

o Commissioning during the second half of 2023

"We're impressed by the potential of the Heatcube. It was selected as the most suitable and cost-effective solution. We're excited to be working with the Kyoto team to realize this innovative project, which is important to integrate more renewable sources in the energy mix"

Tamás Pusztai, CEO of Reliable Energy Group

Letter of Intent (LoI) in Corrugated Cardboard Industry

Implementing a reference project for >600 plants

Background on Glomma Papp

• o Designing, developing, and manufacturing packaging and display solutions for business markets since 1931
• o Glomma Papp AS's vision is to inspire and improve

Status

• o Thermal storage of 40 MWh
• o Annual capacity of up to 12 GWh thermal energy
• o Reduction of up to 2.700 tons of CO2 annually

Goal

o Commissioning planned for during the summer of 2023

"This is further proof of our commitments to sustainability and to reducing CO2 emissions from our processes and actively being a part of the green transition for the corrugated industry. Kyoto's Heatcube™ offers an interesting potential for us […]"

John Stevenson, Technical Manager Glomma Papp AS

Over 600 corrugated cardboard plants in Europe largely using fossil fuel today

• o Standardized processes and equipment in most plants
• o Industry is required to decarbonize their processes and meet new environmental standards

Letter of Intent (LoI) in Cogeneration Plants

Spearheading into cogeneration industry in Spain Several plants in the same group in Spain

Background

• o Client with several cogeneration facilities in Spain
• o Provides a competitive advantage for the client's operation and reduction of CO2 emissions

Status

• o Thermal storage of 88 MWh
• o Annual capacity of more than 40 GWh thermal energy
• o Reduction of more than 9.000 tons of CO2 annually

Goal

o Commissioning during the second half of 2023

Letter of Intent (LoI) in Food & Beverage Industry

Spearheading into food industry with Spanish producer Over 50 olive oil and tomato plants just in Spain

Background

• o Among market leaders within its segment in food sector in Spain
• o Renewable solution for heat generation for food production process and wastewater treatment
• o Replacing natural gas boiler giving a competitive advantage for the client's operation

Status

• o Thermal storage of 64 MWh
• o Annual capacity of up to 20 GWh thermal energy
• o Reduction of more than 3.000 tons of CO2 annually
• o Utilizing solar energy, the Heatcube will ensure emission-free heat production both day and night

Goal

o Commissioning during the second half of 2023

APPENDIX

Key financial highlights 1H 2022

Changed functional currency from NOK to EUR

The funds has been allocated to:

• Building and installation of Heatcube™ at Nordjyllandsværket
• Organization has tripled during the first half of 2022
• Expansion of footprint, established Kyoto Technology Denmark and in the process of establishing Kyoto Technology Spain
• Acquiring of Mercury Energy in Spain
• Investment in development of next generation Heatcube™

	Note	H1 2022	H1 2021
OPERATING INCOME AND OPERATING EXPENSES
Employee benefits expense	1	1 196 580	694 829
Other expenses	1	1 847 915	900 655
Total expenses		3 044 495	1 595 484
Operating profit		-3 044 495	-1 595 484
FINANCIAL INCOME AND EXPENSES
Interest income from group companies		47	0
Other interest income		322	3 988
Other financial income		19 678	2 959
Other interest expenses		2166	478
Other financial expenses		2 381	977
Net financial items		15 500	5 492
Net profit before tax		-3 028 994	-1 589 993
Income tax expense		0	0
Net profit after tax		-3 028 994	-1 589 993
Half-year result	3	-3 028 994	-1 589 993

Balance sheet

All figures in EUR (unaudited)

	Note	30.06.2022	30.06.2021
ASSETS
Non-current assets
Intangible assets
Research and development	8	4 396 222	1 034 525
Deferred tax assets		0	507 568
Total intangible assets		4 396 222	1 542 093
Property, plant and equipment
Equipment and other movables	8	8 235	8378
Total property, plant and equipment		8 235	8378
Non-current financial assets
Investments in associated companies	2	5 414	0
Other long-term receivables	6	73 831	372 816
Total non-current financial assets		79 245	372 816
Total non-current assets		4 483 702	1 923 288
Current assets
Debtors
Other short-term receivables	6	306 049	356 887
Receivables from group companies	7	9 881	0
Total receivables		315 931	356 887
Cash and cash equivalents	4	6 859 973	15 621 769
Total current assets		7 175 904	15 978 656
Total assets		11 659 605	17 901 944

	Note	30.06.2022	30.06.2021
QUITY AND LIABILITIES
Equity
Paid-in capital
Share capital	3	25 290	24 835
Share premium reserve	3	10 141 129	16 105 268
Other paid-up equity	3	328 078	1 040 903
otal paid-up equity		10 494 497	17 171 006
fotal equity		10 494 497	17 171 006
iabilities
Other non-current liabilities
Other non-current liabilities	9	231 918	235 949
fotal non-current liabilities		231 918	235 949
Current liabilities
frade payables	6	357 878	353 612
Public duties payable	6	189 856	86 834
Other current liabilities	6	385 456	54 542
Total current liabilities		933 190	494 988
Total liabilities		1 165 108	730 937
Total equity and liabilities		11 659 605	17 901 944

Cash flow

	H1 2022	H1 2021
CASH FLOW FROM OPERATING ACTIVITIES
Profit/loss before tax	-3 028 994	-1 589 993
Impairment of fixed assets	0	2 949
Change in accounts payable	-348 516	63 514
Change in intercompany balances	-99 458	0
Change in other accrual items	207 365	92 903
Net cash flow from operating activities	-3 269 603	-1 430 626
CASH FLOW FROM INVESTMENT ACTIVITIES
Investments in subsidairies	-5 414	0
Payments to buy intangible assets	-1 377 768	-530 771
Net cash flow from investment activities	-1 383 182	-530 771
CASH FLOW FROM FINANCIAL ACTIVITIES
Change in convertible debt	0	-221 202
Proceeds from equity	21 522	17 122 507
Sale of own shares	0	649 899
Purchase of own shares	-22 962	0
Currency adjustments	-258 594	-784
Net cash flow from financial avtivities	-260 034	17 550 420
Net change in cash and cash equivalents	-4 912 819	15 589 022
Cash and cash equivalents per 01.01.	11 772 792	32 746
Cash and cash equivalents per 30.06	6 859 973	15 621 768

Heatcube 1.0

Heatcube 2.0

Decarbonization of industrial heat demand

Annual CO2 emission reduction by 2025 equal to >71,000 cars

Assuming Heatcube utilization of 84% annually | * Combustion of NG: 0.2 ton CO2/MWh, 85% efficiency | ** Avg CO2 emissions from Diesel vehicles of 1.83 ton/year

Reference slide from McK/LDES

Strong Kyoto organization for scaling established

CEO

33 employees spread over 3 countries divided on 12 nationalities with an average of 13 years of experience and 30% females and world leading molten salt engineering expertise

Extensive molten salt engineering experience in-house

Significant experience in molten salt, thermal energy & large-scale projects

Sevilla, Spain Oslo, Norway Contracted Partners

* Detailed competency description to be viewed in appendix

Scalable project organization

How to secure multi project execution without building fixed cost

Chief Project Officer Project Director 2 Project 2, 4, 6 Site Mgr P2 Installation Electrical P2 Installation Mechanical P2 Commissioning P2 Project Director 1 Project 1, 3, 5 Site Mgr P1 Installation Electrical P1 Installation Mechanical P1 Commissioning P1 Document Controller Project Controller Project Planner Operational Tactical Strategic Engineering Procurement Manufacturing Kyoto Group Employees Mix of Kyoto Employees & Consultants Established partnerships in our main markets 2 Project Engineers (Mechanical + Electrical) o A scalable organization that can grow/shrink fast based on number of projects/contracts o Strategic & Tactical Resources are kept internal o Operational resources – Majority Kept external to; o Avoid building fixed cost o Avoid resources not being used o Meet various markets and geographies o Engineering, Procurement and Manufacturing are remaining as separate departments from the project organization

Kyoto Group Employees

Solid collaboration platform in the Heatcube value chain

Strategic partners with extensive thermal energy & molten salt experience

World class energy storage and molten salt expertise

• o Acquisition of Mercury Energy
• o Expansion of Kyoto's geographic footprint
• o Mercury Energy brings significant IPR for molten salt
• o Owner of Mercury Energy, Andres Barros Borrero, joined Kyoto as part of the acquisition

• o Collaboration agreement with KTH
• o Financed by Kyoto, led by Silvia Trevisan, supervised by Bjarke Buchbjerg and Rafael Guédez
• o Focusing on research and material development

APPENDIX RISK FACTORS

Risk Factors (I/VII)

1. Risks related to the business of the Company

The Company has no operating history and the commercialization of its business model is uncertain

The Company is currently in a development stage and has only entered into certain commercial contracts for the Heatcube thermal energy storage solution. The Company has to date financed its operations by raising capital from new and existing stakeholders as well as receiving public funding. There can be no assurance that the Company is successful in attracting further customers that are willing to make the necessary adjustments to their existing facilities to be able to utilize the HeatCube Thermal Battery and associated services. To proceed in its development, the Company must continue to succeed in attracting customers for commercial projects and such projects must prove successful and motivate the customers to enter more comprehensive agreements as well as proving the viability of the HeatCube Thermal Battery to other prospective customers. No assurances can be given that the Company will be successful in recruiting and retaining the customers it needs to become a profitable enterprise.

The Company is a growth company, is not fully financed (nor following the Private Placement) and has made certain assumptions about the costs and funding requirements to grow and optimize its operations. If the Company's estimates are incorrect, it could lead to the need for additional financing sooner than expected, failing which the Company may not be able to achieve profitability. Furthermore, the contracts, rights and obligations of the Company are likely to carry a higher degree of uncertainty and risk than more mature businesses.

The Company's business is dependent on its ability to scale its technical infrastructure and organization

The Company is a start-up and has only carried out a limited number of demonstration projects and has limited operational history. The Company is targeting rapid growth over the next few years, which may require additional managerial, operational, sales, marketing, financial and other resources. There can be no assurance that the Company will be successful in achieving and realizing its development and commercialization plans, and its contemplated upscaling of operations. The Company's business, results of operations and financial position and the development and commercialization of its services will depend, in part, on its ability to manage future growth effectively for which no assurances can be given.

The Company is in a development stage and has only carried-out pilot projects

To date, the Company has only carried out a limited number of demonstration projects. The Company is currently in the process of carrying out its first commercial project for a paying customer which has reached key milestones but which is not yet completed. The Company's business model, technology and partner network have therefore not operated on an ordinary course basis. There is consequently a risk that such ordinary course projects never will take place or that the Company's products or business model is considered inefficient or inadequate for the customers the Company targets.

The Company depends on protecting its proprietary technology and intellectual property rights

The Company's business is based on its proprietary technology, particularly its HeatCube Thermal Battery technology, the method of assembling and installing the HeatCube Thermal Batteries, as well as the Kyotopia control system. The Company's IPR consists primarily of a combination of trade secrets, know-how and confidential procedures. The Company has also filed a patent application in Norway related to the HeatCube Thermal Battery (in addition to a second pending patent application pertains to Butterfly z-axis, which is not currently utilized in the Company's business), but with no certainty of issuance. Further, the Company has or is in the process of applying for four trademarks in Norway. The Company is exposed to risk that others may use the Company's technology or business model. The Company's main product HeatCube consists of known components and may be replicated by competitors. The Company currently only has exclusive rights to trade secrets and know-how and are exposed to information leakage. The Company cannot assure that its know-how and trade secrets will provide the Company with competitive advantage, as the know-how and trade secrets may become known to or be independently developed by others including the Company's competitors, regardless of measures the Company may take to try to preserve the confidentiality. The Company cannot give assurance that its measures for preserving the secrecy of its trade secrets and confidential information are sufficient to prevent others from obtaining such information.

Risk Factors (II/VII)

The lack of proper and clearly defined confidentiality and IPR regulations in employment and consultancy agreements, or lack of agreements/regulations at all, may also expose the Company of risks related to breach of confidentiality, IPR and/or weak IPR protection for the Company. Loss of key personnel may also create a risk that such personnel may exploit knowledge, information and know-how to the detriment of the Company, and/or that the Company may face difficulties to operate its technology or business methods as a result of the loss of such personnel. There is also a risk that competitors or other third parties may claim that the Company does not have rights or exclusive rights to the intellectual property it uses, or that such competitors utilize or even obtain rights to, know-how and trade secrets that the Company utilizes.

The Company is dependent on external suppliers and is exposed to risks relating to subcontractors

The Company's business model is to use external suppliers for, among other things, components in its HeatCube Thermal Battery through a supplier/partner network. The Company's current business model largely relies on components for the HeatCube Thermal Battery being readily available from a host of different suppliers in various markets. Partly for that reason, the Company does not have any material supply or partner agreements. This lack of committing supplier contracts may expose the Company to risks related to delays, cost overruns, a lack of willingness to trade with the Company, errors with products, etc. This risk is enhanced in the current geo-political environment, which has and is expected to continue to have an impact on the Company's access to components from external suppliers. For instance, in November 2021 the Company entered into a battery lease agreement with Aalborg Forsyning in Denmark, pursuant to which the Company will install the HeatCube Thermal Battery at Nordjyllandsværket's power plant outside Aalborg as a commercial demonstration unit. The battery is currently under construction and is expected to start commissioning in January 2023. Due to the current geo-political environment, the Company is experiencing a slight delay in the delivery of equipment to the project. The Company's exposure to risks related to such delays, cost overruns, etc., may have adverse consequences for the product and services to be delivered by the Company, and the Company may not be in a position to claim compensation for loss which may occur in such situations.

The profitability of the Company depends on the price fluctuations of solar and wind energy

The Company's business model entails that the Company's sales of energy constitute a material share of its future, possible gross profit. For long-term customer contracts, the Company aims to fix the sales price, however, to obtain new customers for such sales of energy and to become profitable, the HeatCube Thermal Battery must represent a solution implying lower costs for its customers. Whether the HeatCube Thermal Battery represents a low cost option for its customers will in turn depend on the extent of price fluctuations of solar and wind energy within a 24- hour period. High fluctuations will enable the customer to use the energy at a point in time where the energy prices are higher than at the time when the energy was produced. Hence, limited fluctuations in the price of energy could materially and adversely affect the Company's business, results of operations, cash flows, financial condition and/or prospects.

The Company may not be able to develop new technology that may be required to expand and/or keep up with competitors

The Company is with its thermal energy storage solution, targeting a market which is new and or underdeveloped. It is expected that an increased target market and customer base will result in increased competition, which in turn will require the Company to make various efforts to remain successful and profitable. Research and development are expensive, timeconsuming, and entails considerable uncertainty with respect to both achieving positive results and, if successful, the ability to commercially sell products and services using such technology. Due to long development processes, changing regulatory requirements, changing market conditions and customer preferences and other factors, new variants of existing technologies or new technologies may take longer and cost more to develop and may be less successful than the Company anticipates. No assurance can be given that any existing or new technologies under research and development will be commercially successful. If the Company is unable to keep up with competitors, develop new technology or have commercial success with its existing or technology under research and development, this could adversely affect the future development of the Company's business, financial condition, results of operations and/or prospects.

Risk Factors (III/VII)

Thermal energy storage is a fairly new industry and, as such, experience with thermal energy storage has been developing rapidly due to practical implementation of research taking place in several different companies simultaneously. The Company's ability to stay on top of and contribute to this development will impact the success of the Company as well as the development of the whole industry. In addition to the inherent risks involved due to the Company being in a development phase in a new industry, such as risks related to faults in maintenance and the Company's technology etc., there is also a risk that the Company's commercialisation strategy is found inefficient or unattractive, and that other competitors in the industry are able to commercialise at a more rapid pace than the Company, which may in turn have material adverse effects on the Company's results, financial condition, cash flows and prospects.

Risks related to the novelty of the Company's business model and product

The thermal energy storage systems developed by the Company represents new technology in the market, which means that customers and potential customers have little to no experience with the Company's products. In this phase, there is a risk that any defaults or unsuccessful projects, which could be due to factors within and outside of the Company's control, could have a proportionate material impact on the reception of the technology in the market and be decisive in respect of whether customers are willing to invest in the technology and buy the Company's products and services, and which in turn can have a significant severe impact on the Company's ability to successfully establish itself in the market and implement the Company's business plan.

The Company's success will depend on its ability to employ and retain skilled personnel

The Company currently has a limited number of employees. All such employees are considered important for the Company's success and ability to implement its business model. Consequently, any loss of current key employees may be detrimental to the Company and its business. The Company must have access to skilled and motivated employees to continue to run its operations successfully and to reach its strategic and operational objectives. The Company's future development is therefore to a large extent dependent on the Company's success in attracting, developing and retaining employees with appropriate skills in the future. If any key person resigns, a suitable replacement with requisite skills, contacts and experience may not be immediately found and the Company may experience negative market or industry perception, which could have a material adverse effect on its business, financial condition, prospects and results of operations. The Company's ability to continue to identify and develop opportunities depends on the management's knowledge of, and expertise in, the industry in and such local jurisdictions and on their external business relationships. Further, any failure to effectively integrate new personnel could prevent the Company from successfully growing.

The lack of restrictive clauses on non-competition and non-solicitation in employment and consultancy agreements may also expose the Company of risks related to such personnel exploiting knowledge and information to take up employment in competitors of the Company or take part in establishing competitors of the Company. Should the Company fail to achieve its objectives of commercializing and developing a profitable business, the incentive scheme that the Company has in place to motivate and retain key personnel, may not serve to counter the risks associated with competition from former employees.

The Company's ability to implement its strategy and achieve its business and financial objectives is subject to a variety of factors, many of which are beyond the Company's control

The success of executing its strategy will depend on several factors, including the Company's ability to: ensure presence on the market;

• provide a competitive product in the local market;
• attract customers; and
• •deliver on its obligations.

Risk Factors (IV/VII)

The Company's failure to execute its business strategy or to manage its growth effectively could adversely affect the Company's business, prospects, financial condition and results of operations. In addition, there can be no guarantee that even if the Company successfully implements its business strategy, it would result in the Company achieving its business and financial objectives. The Company's Executive Management targets to review and evaluate the business strategy with the Board of Directors on a regular basis and the Company may decide to alter or discontinue elements of the Company's business strategy and may adopt alternative or additional business strategies in response to the Company's operating environment or competitive situation or other factors or events beyond the Company's control.

The Company competes in markets that are competitive and rapidly changing. The Company expects to continue to experience competition from current and potential competitors, many of which are or may be better established and have significantly greater financial, technical and marketing resources.

The Company anticipates that the number of companies seeking to develop energy storage or other products that aim to increase the consumption of renewable energy will increase in the future. The Company's competitors range in size from small, single product companies to large, diversified corporations, which may have greater financial, technical, marketing and other resources. For instance, there is a risk that the Company will be unable to compete with competitors with stronger balance sheet and/or funding capabilities that may enable them to use more resources on inter alia product offering, R&D, marketing, ramp-up, continue with limited profits and on other basis. Given the Company being in a development and growth phase in a new industry, the Company sees this risk more apparent compared to more established markets.

Risk relating to the regulatory environment

The Company's business model involves energy storage and sale of heat and power, which are subject to extensive regulations. Given that the Company has no operational history apart from demonstration projects in Norway, and with the Company primarily targeting markets other than Norway, the Company will have to navigate in complex regulatory landscapes which it currently has little to no experience in. Navigating in, and adapting to, laws and regulations in foreign markets, inter alia on production and sale of heat and power, may be time and cost consuming. Future changes in the domestic and international laws and regulations applicable to the Company, can be unpredictable and are beyond the control of the Company, and such changes could imply the need to materially alter the Company's operations and set-up and may prompt the need to apply for permits, concessions, local subsidiaries and organizations to be established in order for the Company's operations to commence, all of which could in turn have a material adverse effect on the business, financial condition, results of operations or cash flow of the Company.

Further, as the Company aims to trade the HeatCube thermal batteries and other ancillary services in energy markets on a merchant basis, the Company is also subject to the regulatory environment surrounding such services. The markets for such services in in Northern Europe have to a certain degree been deregulated, however, there can be no assurance that such deregulation will continue and that the markets in other parts of the world will follow. Thus, the Company may experience difficulties in trading ancillary services in foreign energy markets due to the regulatory environment, which in turn will affect the Company's ability to expand its business.

Litigation risk

The Company may from time to time be subject to legal claims, including those arising out of normal course of business. Any litigation may have a material adverse effect on the Company because of potential negative outcomes, the costs associated with defending the lawsuits, the diversion of the Company's management's resources and other factors.

Risk Factors (V/VII)

Changes in tax laws of any jurisdiction in which the Company operates, or any failure to comply with applicable tax legislation may have a material adverse effect for the Company

The Company is subject to prevailing tax laws, treaties and regulations in the jurisdictions in which it operates, and the interpretation and enforcement thereof. The Company's income tax expenses are based upon its interpretation of the tax laws in effect at the time that the expense is incurred. If applicable laws, treaties or regulations change, or if the Company's interpretation of the tax laws is at variance with the interpretation of the same tax laws by tax authorities, this could have a material adverse effect on the Company's business, results of operations or financial condition. If any tax authority successfully challenges the Company's operational structure, intercompany pricing policies, the taxable presence of its subsidiaries in certain countries, or if taxing authorities do not agree with the Company's and/or any subsidiaries' assessment of the effects of applicable laws, treaties and regulations, or the Company loses a material tax dispute in any country, or any tax challenge of the Company's tax payments is successful, the Company's effective tax rate on its earnings could increase substantially and the Company's business, earnings and cash flows from operations and financial condition could be materially and adversely affected.

1. Risks associated with the Company's financial position

Risks related to financing of the Company's growth strategy

The Company is in a development stage that has and will continue to incur significant expenditures as it endeavours to commercialize its products. To date, the Company has financed its operations during this development phase mainly through equity capital raises. The proceeds from the Private Placement is, if successful, expected to provide the Company with sufficient funds to secure its liquidity needs for the Group's operations in accordance with the contemplated use of proceeds of the Private Placement. However, the Company may in the shorter or longer term need to raise additional funds through debt or additional equity financings or other strategic arrangements to fund operations, in particular to funds its planned growth activities (which will not necessarily be fully funded through the Private Placement) or to accelerate its growth, to take advantage of business opportunities or respond to competitive pressures. Adequate sources of capital funding may not be available when needed or may not be available on favourable terms or at all. The Company's ability to obtain such additional capital or financing will depend in part upon prevailing market conditions as well as conditions of its business and its operating results, and those factors may affect its efforts to arrange additional financing on satisfactory terms. If the Company raises additional funds by issuing additional shares or other equity or equity-linked securities, it may result in a dilution of the holdings of existing shareholders. If funding is insufficient at any time in the future, the Company may not have sufficient funds to support ongoing operations, or be unable to continue its development strategy and growth initiatives in accordance with the current business plan, take advantage of business opportunities or respond to competitive pressures, any of which could adversely impact the Company's results of operations, cash flow and financial condition.

Exchange rate fluctuations could affect the Company's cash flow and financial condition

The Company is exposed to exchange rate risk. The Company's strategy is to pursue customers in foreign markets (not Norway). The Company's costs will not necessarily be in the same currency. The Company is based in Norway and will thus have costs in Norwegian Kroners, but also in other currencies as the Company's suppliers are likely to be based outside Norway. As the Company will trade in different currencies, this creates a risk that fluctuations in exchange rates could adversely affect the Company's cash flow and financial condition.

Risk Factors (VI/VII)

1. Risks related to the Shares

The Company may or may not pay dividends for the foreseeable future. Shareholders may never obtain a return on their investment

As of the date of this Investor Presentation, the Company is in a growth phase and is not in a position to pay any dividends. There can be no assurance that in any given year a dividend will be proposed or declared, or if proposed or declared, that the dividend will be as contemplated by the policy. Any payment of future dividends will depend on legal restrictions, the Company's capital requirements, including capital expenditure requirements, its financial condition, general business conditions and any restrictions that its borrowing arrangements or other contractual arrangements in place at the time of the dividend may place on its ability to pay dividends and the maintaining of appropriate financial flexibility.

The Company is subject to the Euronext Growth Rule Book which may deviate from the regulations for securities trading on Oslo Børs and Euronext Expand, and which may imply a risk of a lower degree of transparency and minority protection

The Company is subject to the rules of the Securities Trading Act applicable to securities admitted to trading on a multilateral trading facility and the Euronext Growth Rule Book. Such obligations may differ from the obligations imposed on companies who's securities are listed on Oslo Børs or Euronext Expand. The Company is not subject to any takeover regulations meaning that an acquirer may purchase a stake in the Shares exceeding the applicable thresholds for a mandatory offer for a company listed on Oslo Børs or Euronext Expand without triggering a mandatory offer for the remaining Shares. In accordance with Euronext Growth Rule Book Part I, section 4.3, and without prejudice to national regulations, the Company shall make public within five (5) trading days of becoming aware, any situation where a person, acting alone or in concert, reaches, exceeds or falls below a major holding threshold of fifty percent (50%) or ninety percent (90%) of the capital or voting rights. Furthermore, there is no other requirement to disclose large shareholdings in the Company (Nw.: flaggeplikt). These deviations from the regulations applicable to securities trading on Oslo Børs or Euronext Expand may, alone or together, impose a risk to transparency and the protection of minority shareholders. An investment in the Shares is suitable only for investors who understand the risk factors associated with an investment in a company admitted to trading on Euronext Growth Oslo.

The Share price could fluctuate significantly

The share prices of companies admitted to trading on Euronext Growth Oslo can be highly volatile and the trading volume and price of the Shares could fluctuate significantly. Some of the factors that could negatively affect the Share price or result in fluctuations in the price or trading volume of the Shares include, for example, changes in the Company's actual or projected results of operations or those of its competitors, changes in earnings projections or failure to meet investors' and analysts' earnings expectations, investors' evaluations of the success and effects of the Company's strategy, as well as the evaluation of the related risks, changes in general economic conditions or the equities markets generally, changes in the industries in which the Company operates, changes in shareholders and other factors. This volatility has had a significant impact on the market price of securities issued by many companies. Those changes may occur without regard to the operating performance of these companies. The price of the Shares may therefore fluctuate due to factors that have little or nothing to do with the Company, and such fluctuations may materially affect the price of the Shares.

Future issuances of Shares or other securities could dilute the holdings of shareholders and could materially affect the price of the Shares

The Company expects to be dependent upon future capital raises, which may be carried out through the issue of new Shares or other securities in order to finance new capital intensive projects, in connection with unanticipated liabilities or expenses or for any other purposes. Depending on the structure of any future offering, certain existing shareholders may not have the ability to purchase additional equity securities. An issuance of additional equity securities or securities with rights to convert into equity could reduce the market price of the Shares and would dilute the economic and voting rights of the existing shareholders if made without granting subscription rights to existing shareholders. Accordingly, the Company's shareholders bear the risk of any future offerings reducing the market price of the Shares and/or diluting their shareholdings in the Company.

Risk Factors (VII/VII)

Investors could be unable to recover losses in civil proceedings in jurisdictions other than Norway

The Company is a private limited company organized under the laws of Norway. All of the members of the Board of Directors and the Management reside in Norway. As a result, it may not be possible for investors to effect service of process in other jurisdictions upon such persons or the Company, to enforce against such persons or the Company judgments obtained in non-Norwegian courts, or to enforce judgments on such persons or the Company in other jurisdictions.

Norwegian law could limit shareholders' ability to bring an action against the Company

The rights of holders of the Shares are governed by Norwegian law and by the Articles of Association. These rights may differ from the rights of shareholders in other jurisdictions. In particular, Norwegian law limits the circumstances under which shareholders of Norwegian companies may bring derivative actions. For example, under Norwegian law, any action brought by the Company in respect of wrongful acts committed against the Company will be prioritized over actions brought by shareholders claiming compensation in respect of such acts. In addition, it could be difficult to prevail in a claim against the Company under, or to enforce liabilities predicated upon, securities laws in other jurisdictions.

Investors could be unable to exercise their voting rights for Shares registered in a nominee account

Beneficial owners of the Shares that are registered in a nominee account (such as through brokers, dealers or other third parties) could be unable to vote for such Shares unless their ownership is re-registered in their names with the Norwegian Central Securities Depository (VPS) prior to any general meeting of shareholders. There is no assurance that beneficial owners of the Shares will receive the notice of any general meeting of shareholders in time to instruct their nominees to either effect a re-registration of their Shares or otherwise vote for their Shares in the manner desired by such beneficial owners.

Pre-emptive rights to subscribe for Shares in additional issuances could be unavailable to U.S. or other shareholders

Under Norwegian law, unless otherwise resolved at the Company's general meeting of shareholders, existing shareholders have pre-emptive rights to participate on the basis of their existing ownership of Shares in the issuance of any new Shares for cash consideration. Shareholders in the United States, however, could be unable to exercise any such rights to subscribe for new Shares unless a registration statement under the U.S. Securities Act is in effect in respect of such rights and Shares or an exemption from the registration requirements under the U.S. Securities Act is available. Shareholders in other jurisdictions outside Norway could be similarly affected if the rights and the new Shares being offered have not been registered with, or approved by, the relevant authorities in such jurisdiction.

The Company is under no obligation to file a registration statement under the U.S. Securities Act or seek similar approvals under the laws of any other jurisdiction outside Norway in respect of any such rights and Shares. Doing so in the future could be impractical and costly. To the extent that the Company's shareholders are not able to exercise their rights to subscribe for new Shares, their proportional interests in the Company will be diluted.