Kyoto Group AS

Investor Presentation • Aug 25, 2022

AUGUST 25TH

Kyoto Group First Half Report 2022

Heat accounts for half of global energy consumption

The challenge: increasing price volatility

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: increasing volatility

Agenda

Financial highlights

Operational highlights

Commercial update

Q&A

Kyoto's solution

The Heatcube™

Modular applications of the Heatcube™

Same product, multiple configurations drive flexibility and reduce cost

Kyoto's Heatcube™ enables industrial partners to benefit from off-peak electricity prices and from participating in the reserve market

Load Shifting :

• Charging at cheapest hours
• Moving from gas / oil / coal to electricity

• Offer storage to the grid provider and participate in the reserve market

Only looking at load shifting as a value creator: industrial clients can save 40-65 €/MWh by load shifting

Price difference between 5 cheapest hours and 6am-22pm spot prices (H1 2022)

Source: ENTSO-E

This price difference is now 3-4x higher compared to 2018

Source: ENTSO-E

Breakdown of the entire value creation of the Heatcube™

potential upside expected MIN

• Load Shifting / Fuel switching:

• Charging at cheapest hours
• Moving from gas / oil / coal to electricity
• Reserve Market: 2
• Offer storage to the grid provider and participate in the reserve market
• 3

1

• Alternative Investments:

• No replacement / upgrade investment into current solution

5

• Grid tariff exception:

• Now: potentially higher fees due to higher peak demand
• Later: exempted from tariffs

• Value for our client's to source green

CONCEPTIONAL

Reference slide from McK/LDES

H1 2022 Financial highlights

Key financial highlights

Key financial highlights

EUR 1.4m Investment in Heatcube™ technology	EUR 6.9m Cash position 30.06.22
EUR -3.0m Net loss 30.06.22	EUR -3.3m Cash from operational activities

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™

H1 2022 Operational highlights

Nordyllandsværket Heatcube™ project progress

Building permits received, tanks arrived in Denmark, equipment will arrive within Nov, commissioning Jan 2023

• Slight delay of equipment due to current geopolitical situation but manageable impact.

• Commissioning scheduled for January 2023, vs previously communicated Q4 2022.

Leadership established to embark on scale-up phase

Solid industry & scale-up experience

Organization has tripled

29 Employees spread over

3 Countries divided on 11 nationalities with an average of 13 years of experience and 36% females and world leading molten salt engineering expertize

José I. Romero

Established Kyoto Technology Spain

Acquisition of Mercury Energy completed Aug 10th

Serving increasing demand for thermal energy storage in Europe

• Acquisition Mercury Energy enables successful establishment of new business unit in Spain
• Expansion of Kyoto's geographic footprint close to key markets in Europe for rollout of and after-market services of Heatcube™

Strengthening capacity and expertise

• Mercury Energy brings significant IPR for molten salt thermal energy
• Addition of several molten salt experts to our growing team

Reference of the Kyoto Heatcube™ technology

A Solar Thermal Power Plant is a large facility for energy generation that uses the sun's energy to produce electricity. Many of them can store solar energy in the form of heated molten salt for off-peak hours, allowing for electricity production into the night when the sun is not shining. Molted salt as a storage medium is proven in the world and is used already for more than 20 years.

Gemasolar Thermosolar Plant – one of the oldest solar power plants in the world

• Nominal Capacity- 19MW CT Storage capacity - 15h of molten salt storage The efficiency of the cycle - 40% Location - Spain, Sevilla Start of operation – 2011 Achievements: • Total operation is 6,450 hours at full
• capacity per year
• Prevention of about 30,000 tons of CO2 emissions per year.

Noor Ouarzazate Solar Complex - the world's largest concentrated solar panel project

Nominal Capacity - 580MW CT Storage capacity - 17h of molten salt storage

Location - Morocco

Start of operation – 2016

Achievements:

• CO2 reduction 730,000 tons per year
• Replacing of 2,5 million tons of oil

Kyoto Technology Denmark ApS

Kyoto Technology Denmark established in May 2022

• The country in the world with the highest proportion of wind energy
• Average intraday volatility (lowest 4 hours vs base price) during H1 2022:
• 59 EUR/MWh in DK1 and
• 65 EUR/MWh in DK2
• Kyoto´s first revenue generating market (Q1 2022)
• Led by Peter Iversen, 20+ years of significant industrial experience

Peter Iversen

Scale-Up + Sciences collaboration with KTH

The Royal Institute of Technology in Stockholm

• A one year post-doc collaboration RIHOND (Renewable Industrial Heat on Demand) was kicked-of in June 2022
• Financed by Kyoto, led by Silvia Trevisan (KTH) and supervised by Bjarke Buchbjerg (Kyoto) and Rafael Guédez KTH)
• Focusing on research and material development for the Kyoto Heatcube™ technology

Long Duration Energy Storage (LDES)

Upcoming: Release of Report "Net Zero Heat" at COP27 in Sharm El Sheik, Egypt Nov 6th-18th

Kyoto selected Top 50 Impact Companies in Nordics 2022

To be presented in Copenhagen Sep 14th-15th

1H 2022 Commercial highlights

Based on market potential and market environments, key markets have been prioritized

• 98 TWh yearly industrial heat demand
• Significant and increasing price volatility
• Speedy expansion of renewables
• Attractive electricity prices

• Supportive regulatory framework

• 100 TWh yearly industrial heat demand

• Access to relevant world-class expertise
• Significant & increasing price volatility
• Speedy expansion of renewables
• Attractive electricity prices
• Supportive regulatory framework

• 8.9 TWh yearly waste heat available

• Strong strategic partnerships established

• Several projects under evaluation

• 11 TWh yearly industrial heat demand

• First installation under construction
• Strong strategic partnerships established
• Access to attractive electricity prices

• 227 TWh yearly industrial heat demand • Supportive regulatory framework

Kyoto Group offers the Heatcube™ with two commercial models

Heat as a Product (HaaP)

A B

Traditional Product Sale

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

Heat as a Service (HaaS)

Heat Sales to Customers

• Heat purchase agreements (HPA)
• Operated by Kyoto
• Recurring stable, long-term revenues

Kyoto currently strengthens the commercial team to adequately respond to the increased market demand

Current focus:

• Expand the commercial & project team to respond to market's demand
• Increase awareness of Heatcube™ as solution in the energy transition
• Shorten the sales cycle with advanced marketing and networking
• Provide solution offering to interested clients
• Finalize supply agreements

Kyoto Group & Hydro REIN sign MoU to develop combined renewable energy & thermal energy storage solutions for industrial players

+

• Agreed on a joint go-to-market approach to industrial clients:
• Hydro REIN offers guaranteed renewable energy
• Kyoto Group's Heatcube™ offers renewable heat
• 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

• Guaranteed renewable energy and heat on demand

• For industrial clients to decarbonize and optimize both their energy consumption and heat demand

Kyoto Group AS and Glomma Papp AS have signed a Letter of Intent (LoI)

Status:

• Technology and benefits of Kyoto's Heatcube™ have been discussed and evaluated for several months

Now:

• Entering into negotiations of supply agreement Goal:
• Commissioning during the summer of 2023

Background on Glomma Papp:

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

"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 at Glomma Papp AS

The Heatcube™ creates value and supports the decarbonization for industrial players in various industries

To increase the awareness and knowledge about the potential of electrification of industrial process, the report is accessible here:

Industrial heat demand in….

Kyoto Groups receives continuously increasing requests and projects to sign 5-10 LoIs during 2022…

Projected LoIs during 2022

• Negotiating and signing 5-10 LoIs
• Entering into final negotiations of supply agreements
• Securing installations of several Heatcube™ during 2023

…. to support the industry decarbonizing their heat demand, lowering their energy expenditures and securing steady supply

Capital Market Day October 27th 2022 SAVE THE DATE

@Klimahuset, Oslo ┃ In-person & Virtual Event

We disconnect the time power is made, from when it is used

Appendix

Kyoto Group AS

Making green energy available for everyone

	Note	H 1 2022	H 1 2021
OPERATING INCOME AND OPERATING EXPENSES
Employee benefits expense	1	1 196 580	694829
Other expenses	1	1847915	900 655
Total expenses		3 044 495	1595484
Operating profit		$-3044495$	$-1595484$
FINANCIAL INCOME AND EXPENSES
Interest income from group companies		47	$\Omega$
Other interest income		322	3988
Other financial income		19678	2959
Other interest expenses		2 1 6 6	478
Other financial expenses		2381	977
Net financial items		15 500	5492
Net profit before tax		$-3028994$	$-1589993$
Income tax expense		0	0
Net profit after tax		$-3028994$	$-1589993$
Half-year result	3	$-3028994$	$-1589993$

Balance sheet

All figures in EUR (unaudited)

	Note	30.06.2022	30.06.2021
ASSETS
Non-current assets
Intangible assets
Research and development	8	4396222	1034525
Deferred tax assets		$\Omega$	507568
Total intangible assets		4 396 222	1542093
Property, plant and equipment
Equipment and other movables	8	8235	8378
Total property, plant and equipment		8235	8378
Non-current financial assets
Investments in associated companies	$\overline{2}$	5414	$\Omega$
Other long-term receivables	6	73831	372816
Total non-current financial assets		79 245	372816
Total non-current assets		4 483 702	1923288
Current assets
Debtors
Other short-term receivables	6	306 049	356887
Receivables from group companies	7	9881	$\Omega$
Total receivables		315 931	356887
Cash and cash equivalents	4	6859973	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
quity
aid-in capital
hare capital	3	25 290	24835
hare premium reserve	3	10 141 129	16 105 268
ther paid-up equity	3	328078	1040903
otal paid-up equity		10 494 497	17 171 006
otal equity		10 494 497	17 171 006
iabilities
ther non-current liabilities
ther non-current liabilities	9	231 918	235 949
otal non-current liabilities		231918	235 949
urrent liabilities:
rade payables	6	357878	353 612
ublic duties payable	6	189856	86834
ther current liabilities	6	385 456	54 542
otal current liabilities		933 190	494 988
otal liabilities		1 165 108	730 937
otal equity and liabilities		11 659 605	17901944

Cash flow

	H 1 2022	H1 2021
CASH FLOW FROM OPERATING ACTIVITIES
Profit/loss before tax	$-3028994$	$-1589993$
Impairment of fixed assets	$\Omega$	2949
Change in accounts payable	$-348516$	63 514
Change in intercompany balances	$-99458$	$\Omega$
Change in other accrual items	207 365	92 903
Net cash flow from operating activities	$-3269603$	$-1430626$
CASH FLOW FROM INVESTMENT ACTIVITIES
Investments in subsidairies	$-5414$	$\Omega$
Payments to buy intangible assets	$-1377768$	$-530771$
Net cash flow from investment activities	$-1383182$	$-530771$
CASH FLOW FROM FINANCIAL ACTIVITIES
Change in convertible debt	$\Omega$	$-221202$
Proceeds from equity	21522	17 122 507
Sale of own shares	$\Omega$	649899
Purchase of own shares	$-22962$	$\Omega$
Currency adjustments	$-258594$	$-784$
Net cash flow from financial avtivities	$-260034$	17 550 420
	$-4912819$	15 589 022
Net change in cash and cash equivalents
Cash and cash equivalents per 01.01.	11772792	32746
Cash and cash equivalents per 30.06	6859973	15 621 768

Key developments towards 2025 targets

	2021	2022		2023 - 2024	2025
	Pilot test • finalized and converted to	First commercial • installation	•	Strong foothold in all strategic markets established	•	Several hundred batteries installed
	R&D center	Signing of • several	•	Accelerating industrialization of the Heatcube™	•	>GW and several GWh
	First commercial • order signed	commercial orders, with large industrial	•	Developed next generation Heatcube Designed for Manufacturing and Assembly		available
	IPO •	companies	•	Continued growth and expansion of	•	Solid profitability
	Doubling of • organization	Doubling of • organization		the organization	•	LCoS < 20 EUR/MWh
	2022 pipeline • maturing	Explore M&A • opportunities and financing	•	Increasing focus on profitability, approaching break even	•	CapEx < 40 EUR/kWh
					•	A billion NOK revenue company
LCoSC = Levelized cost of Storage Capacity