Kyoto Group AS - Private placement completed

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Lysaker, 10 January 2023: Reference is made to the stock exchange release from Kyoto Group AS (“Kyoto” or the “Company”) published earlier today regarding a contemplated private placement of new shares in the Company (the "Private Placement").

Following close of the bookbuilding period, the Company is pleased to announce that the Private Placement has been successfully placed, and that its Board of Directors has allocated subscriptions for 3,428,571 offer shares (the "Offer Shares") at a subscription price of NOK 17.50 (the "Offer Price"), raising NOK 60 million in gross proceeds.

Arctic Securities AS and Fearnley Securities AS (the "Managers") acted as managers in connection with the Private Placement.

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.

Settlement of the New Shares is expected to take place on or about 23 January 2023. The Managers are expected to pre-pay the total subscription amount in the Private Placement in order to facilitate delivery-vs-payment settlement, however, the allocated Offer Shares will not be delivered to, nor will they be tradable by the relevant applicant before the registration of the share capital increase pertaining to the Offer Shares has taken place.

Notification of conditional allocation, including settlement instructions, are expected to be distributed by the Managers on or about 11 January 2023.

The following persons discharging managerial responsibilities ("PDMRs") and close associates to PDMRs have been allocated the following number of Offer Shares in the Private Placement:

• Valinor AS, a close associate of the board member Pål Selboe Valseth, was allocated a total of 488,600 shares
• Hydro Energi Invest AS, a close associate of the board member Ivar Valstad, was allocated a total of 285,714 shares
• Bjarke Buchbjerg, Chief Technology Officer of the Company, was allocated a total of 1,428 shares
• Henrik Holck-Clausen, Chief People & Culture Officer of the Company, was allocated a total of 4,285 shares
• Tim de Haas, Chief Commercial Officer of the Company, was allocated a total of 5,714 shares
• Agnieszka Sledz, Chief Project Officer of the Company, was allocated a total of 17,142 shares

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.

Subsequent offering and equal treatment considerations

The Board will propose to the EGM to carry out a subsequent offering of up to 500,000 shares at a subscription price equal to the Offer Price raising gross proceeds of up to NOK 8,750,000 to its existing shareholders as of close of trading 10 January 2023, as subsequently recorded in the VPS on 12 January 2023, who were (i) not allocated shares in the Private Placement, (ii) who were not actively involved in the presounding for the Private Placement and (iii) who are not resident in a jurisdiction where such offering would be unlawful, or would (in jurisdictions other than Norway) require any prospectus filing, registration or similar action. Such shareholders will be granted non-tradable subscription rights to subscribe for, and, upon subscription, be allocated new shares. The subsequent offering is subject to approval of the EGM.

The  Board,  together  with  the  Company's  management  and  the  Managers, has considered various transaction alternatives to secure new financing. Based on an overall  assessment, considering inter alia the need for funding, execution risk and  possible alternatives, the Board has on the basis of careful considerations decided  that the  Private Placement  is the  alternative that best protects the Company's  and the shareholders' joint interests. By structuring the transaction as a private placement with a subsequent offering, the Company was able to raise capital  in  an  efficient  manner  with  significantly  lower  completion risks compared to a rights issue. Thus, the waiver of the preferential rights inherent in  a  share  capital  increase  through  issuance  of  new shares is considered necessary.

Arctic Securities AS and Fearnley Securities AS acted as managers for the Private Placement. Advokatfirmaet Wiersholm AS acted as legal counsel to Kyoto.