LOKOTECH GROUP AS ANNOUNCES CAPITAL RAISING INITIATIVES AND POTENTIAL ANCHOR INVESTOR

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE'S REPUBLIC OF CHINA OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE PUBLICATION, DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.

Oslo, 4th of February 2025 Reference is made to Lokotech Group AS’ (the “Company” or “Lokotech” and, together with its subsidiaries, the “Group”) previously communicated growth and investment capital ambitions, including through the H1 2024 semi-annual financial report published by the Company on 30 August 2024 and the latest Company presentation published on 22 January 2025.

The Company has retained Pareto Securities AS and SpareBank 1 Markets AS (together, the “Managers”) to act as joint financial advisors to the Company in connection with the further exploration of a potential capital raise in the range of NOK 125 to 175 million. This new capital may be raised in the form of hybrid debt, convertible loans, equity or a combination thereof (the “Transaction”).

The net proceeds from any such new capital raised is as previously announced intended to be used to fund the Group’s capital requirements to tape out the Scrypt ASIC design (where the Company, through its IC assembly partner, has already booked a date for such tape out at the foundry and, which due to Foundry regulations, the Company is required to pay in full up front), for other investments (including investment in the mask set and other tooling for ASIC production as well as non-recurring engineering expenses) and general corporate purposes while the Company transitions from the current research and development phase through engineering and into a mass production phase.

In conjunction with the Company’s previous announcement that it is exploring the possibilities of raising new capital, Lokotech has conducted preliminary discussions regarding the contemplated Transaction with potential investors. Based on these preliminary discussions, the Company has received several indications of interest. One such potential investor, a US-based private investment firm, has communicated its potential interest to provide capital through various alternative structures, including to participate with approx. NOK 25 million in a convertible loan on the following key terms.

Tenor: 3 years

Coupon: 15 %

Payment-in-Kind, quarterly

Conversion price: at the money calculated as 5 days VWAP before date of closing

The Company will continue ongoing discussions while also exploring alternative structures for the Transaction.

Lokotech will hold a webinar investor presentation with a Q&A session on Monday the 10th of February 2025 at 14.30 CET. Link to the webinar: https://channel.royalcast.com/landingpage/hegnarmedia/20250210_1/

No guarantees can be given that the Company will be successful in implementing the Transaction, or the terms and conditions upon which the Transaction may be implemented. Although the Company has currently no interest-bearing debt and expects to generate positive cash flow from ongoing activities in 2025, it may experience a material adverse effect on the Company’s future plans, investments and prospect should the Company not be able to raise the contemplated new capital through the Transaction or otherwise.

Contact: CEO Ola-Stene Johansen, email osj@lokotech.no

This information is considered to include inside information pursuant to the EU Market Abuse Regulation article 7 and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. This stock exchange announcement was published by Ola Stene-Johansen, CEO in Lokotech Group AS, on the 4th of February 2025 at 17:00 CET.

IMPORTANT NOTICE These materials are not and do not form a part of any offer of securities for sale, or a solicitation of an offer to purchase, any securities of the Company in the United States or any other jurisdiction. Copies of these materials 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. Any sale in the United States of the securities mentioned herein will be made solely to "qualified institutional buyers" (QIBs) as defined in Rule 144A under the Securities Act, pursuant to an exemption from the registration requirements under the Securities Act, as well as to major U.S. institutional investors under SEC Rule 15a-6 to the United States Exchange Act of 1934, as amended.

This communication contains certain forward-looking statements concerning future events, including possible issuance of equity securities of the Company. 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 communication are based upon various assumptions, many of which are based, in turn, upon further assumptions. The Company believes that these assumptions were reasonable when made. However, 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 its control. Such risks, uncertainties, contingencies and other important factors include the possibility that the Company will determine not to, or be unable to, issue any debt, hybrid or equity securities, and 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. The information, opinions and forward-looking statements contained in this communication speak only as at its date and are subject to change without notice.

Each of the Company, the Managers and their respective affiliates disclaims any obligation or undertaking to update, review or revise any statement contained in this communication whether as a result of new information, future developments or otherwise. Neither the Managers nor any of its affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any liability arising from the use of this announcement or 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. Certain figures contained in this announcement, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this announcement may not conform exactly with the total figure given.

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. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Specifically, neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into or from the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, Hong Kong, Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction.