CrayoNano Q1 2023 Investor Update

Trondheim, Norway—CrayoNano AS (NOTC: CNANO) is pleased to announce its Q1 2023 Investor Update. During the period, CrayoNano successfully completed a private placement of NOK 125 million, released a 30 % product performance improvement and continues to increase the number of customers designing with the CrayoLEDTM UV-C LED products.

Jo Uthus, CEO said:

“The first quarter of 2023 has seen another key milestone for the company, and we are exceptionally proud to have raised approximately NOK 125 million in new capital. This will fund our continued growth and planned expansion as we start the next chapter for CrayoNano. Listening to our customers, we’ve also released a new version of our UV-C LED with a 30 % improvement in performance and increased energy efficiency, which will address more market segments. The feedback from our customers has been very positive, supporting our growth and plans for shipping the first 1 million units. In Q1 we continue to see an increase in customers leads, in addition to the more than 20 customers currently designing with us at quarter end. We look forward to bringing these customers through to design-wins and volume shipments during the year.”

Product Update

During March, the Company made two announcements highlighting continuous development for product performance and efficiency of its CrayoLEDTM H-series UV-C LED on 13 March 2023 (link) and further improvements in robustness and quality increasing the serviceable addressable market of CrayoLEDTM products (link).

The performance class of 100 mW, 5 % wall-plug efficiency at a standard operating current of 350 mA, delivers a high-power performance that efficiently inactivate bacteria, viruses, and other illness-inducing pathogens, improving system efficiency and future disinfection automation. Improving our wall plug efficiency to 5 % means that the LED is more energy-efficient and generates less heat, resulting in a longer lifetime and influencing overall system performance. This improves total cost of ownership with less maintenance and replacements, facilitating the adoption of UV-C LED disinfection in municipal water treatment products and other applications requiring higher output power.

Responding to customer’s requirements, we have also characterized CrayoLEDTM at 500 mA drive current, achieving 140 mW, with an estimated lifetime of over 4,000 hours based on the TM-21 model. This opens up additional applications for CrayoLEDTM and customers will have access to additional markets, including surface disinfection applications and curing.

These products are available in volume production now.

Market & Customer Update

The Company is seeing strong interest for its products across all target segments as we continue to expand the sales funnel. By the end of the quarter, we experienced an increase in number of customer leads by 200 % to more than 400 and saw a 50 % increase in design-ins to 27 in total. In the months ahead we will work with our customers as we support the design process towards volume orders and material revenue generation.

One key customer, ProPhotonix, a specialist in LED and Laser Technologies, has recently started their qualification process with CrayoNano’s CrayoLEDTM H-series UV-C LEDs and have built a prototype of their Cobra Clean FX1 Lamp with the CrayoLED TM H-series UV-C LED’s inside to proceed with lifetime Testing.

Simon Stanley, Director of Technology at ProPhotonix said:

“ProPhotonix has started our qualification process with CrayoNano's CrayoLEDTM H-series UV-C LEDs. After passing the first phase of the process, characterization, and validation, we have built a prototype of our Cobra Clean FX1 Lamp with the CrayoLEDTM H-series UV-C LED’s inside to proceed with lifetime testing.”

To further increase our design-capacity, we are also addressing the long tail of demand through third party distribution agreements starting with German distributor Laser Components.

Financial Update

Revenue in the first quarter amounted to NOK 0.1m from initial shipments through our first distributor agreement and smaller test unit shipments to potential customers. Total operating cost was NOK 23.3m, in line with previous quarter, and an increase of NOK 7.1m (44 %) from the same quarter last year. The increase from last year is driven by the scaling of operations, higher R&D activity, and cost associated with our Taiwan branch. EBITDA ended at NOK 21.5m negative, slightly higher than previous quarter, below NOK 13.3m negative in the same period last year.

Cash flow from operations was NOK 24.0m negative in the quarter, in line with previous quarter and up NOK 6.2m year-on-year. As part of the ongoing ramp-up, CrayoNano continued to build strategic inventory which increased by NOK 3m in the first quarter. As the availability of products has been a key constraint in the market, we believe having a strategic inventory is an important asset for our revenue operations.

At the end of the quarter cash and cash equivalents was NOK 10.2m, flat quarter-on-quarter as the negative cash flow from operations and investments in the first quarter was offset by positive cash flow from financing as the company secured a shareholder loan of NOK 27.5m

Post quarter-end, on 18th April, the company announced the successful completion of a private placement of approximately NOK 125m in gross proceeds. CrayoNano is well capitalized and will utilize the new growth capital towards key strategic goals including sales acceleration, investments in manufacturing capacity and flexibility, product development and for general corporate purposes.

Thomas Ferré, European Innovation Council (EIC) Fund said:

“At the EIC, we strive to find and support the next breakthrough technology and innovation coming out of Europe. We are proud to support CrayoNano’s disruption in the UV-C LED market as they scale into a new generation of European semiconductor companies. The EU chips act drives a strong focus on European-based deep-tech semiconductor companies as Europe rebuilds its semiconductor footprint.”

Through the EIC Accelerator program, the EIC has contributed €2.4 million in grants in addition to the €5 million of equity in this round of financing and we are proud to support the company in its next phase of growth.

The company’s Board of Directors has resolved an intention to carry out a subsequent offering towards existing shareholders, the subscription period is expected to commence within the next few weeks.

The Company’s Board of directors has also resolved to pursue a listing on Euronext Growth Oslo within the next 12 months following the private placement.

Conference Call Details

CrayoNano will host an analyst and investor video webcast about its Q1 2023 Financial Update at 10:00 CET today. The live video webcast will be accessible via the company’s website:

https://webcast.openbriefing.com/crayonano-may23/

An audio replay service will also be made available after the webcast at the above web address.

Presentation: CrayoNano Q1FY23 results presentation_15052023

Calendar of future events for CrayoNano:

  • 2023 Interim Results: 23 August 2023
  • Q3 Financial Update: 9 November 2023

For more information, please contact:

CEO Jo Uthus
EMail: investor@crayonano.com
Phone: +47 72 90 98 60

About CrayoNano

CrayoNano develops and manufactures semiconductor components based on our expertise and technology in nanomaterials. With on our patented and proprietary technology, our first application targets the fast-growing disinfection market with high quality and performance driven UV-C LEDs.

The company is headquartered in Trondheim, Norway, applying a fab-lite model with a global supply chain and worldwide footprint to provide our customers with innovative semiconductor devices. Our vision is to enable new applications and solutions in health & safety, water purification, life sciences, consumer and industrial goods, and automotive industries. CrayoNano is registered on OTC in Norway under the ticker: CNANO.

About the EIC Fund

The European Innovation Council Fund from the European Commission is an agnostic Fund: it invests across all technologies and verticals, and all EU countries and countries associated to Horizon Europe. It provides the investment component of the EIC Accelerator blended finance.

The EIC Fund aims to fill a critical financing gap and its main purpose is to support companies in the development and commercialization of disruptive technologies, bridging with and crowding in market players, and further sharing risk by building a large network of capital providers and strategic partners suitable for co-investments and follow-on funding.

The Fund pays particular attention to the empowerment and support of female founders as well as the ambition to reduce the innovation divide among EU countries.

Thomas Ferré, European Innovation Council (EIC) Fund said:

“At the EIC, we strive to find and support the next breakthrough technology and innovation coming out of Europe. We are proud to support CrayoNano’s disruption in the UV-C LED market as they scale into a new generation of European semiconductor companies.”

The EU chips act drives a strong focus on European-based deep-tech semiconductor companies as Europe rebuilds its semiconductor footprint.

“Through the EIC Accelerator program, the EIC has contributed €2.4 million in grants in addition to the €5 million of equity in this round of financing and we are proud to support the company in its next phase of growth.”