CrayoNano Q4 2022 Operational Update

Trondheim, Norway

CrayoNano AS (NOTC:CNANO) issues the following operational update prior to its fourth quarter and full year results for the period ending 31 December 2022, which are scheduled to be announced on 16 February 2023.

Product Updates

On 6 October 2022, CrayoNano launched the CrayoLED™ H-Series (CLH-N3S), an ultraviolet-C light emitting diode (UV-C LED) semiconductor packaged component. CrayoLED’s quality-driven design meets the high standards for reliability and performance in the fast-growing disinfection and sanitization markets.

The CrayoLED™ H-series is optimized for disinfection at a typical peak wavelength of 275 nm. Its small package footprint (3.5 mm x 3.5 mm) and high-power performance easily integrates into systems for residential, municipal, industrial and commercial segments, enabling system miniaturization and longer lasting solutions.

Preliminary results of the CrayoLED™ CLH-N3S H-Series UV-C LED Room Temperature Operating Life (RTOL) test also conducted by an independent, accredited third-party testing and qualification expert company was released and made available to customers for reducing the customer design-in timeline and accelerating time to revenues.

The lifetime tests aim to demonstrate the quality and reliability of the CrayoLED™ and generate data for our customers design-in support and facilitating a reduced design-in time.

Market and Customers

In the short period of time since product launch on October 6, CrayoNano has reached out to more than 100 customers for the CrayoLED H-series. We have registered 140 new customer leads and have shipped product samples to 40 customers - working directly with a smaller number of customers for their design-in execution. This is in line with our controlled market entry plan – although exceeding internal expectations on the number of customer engagements for the initial phase.

Our customers cover European, US, Canadian and some Southeast Asian markets, spanning a wide range of application areas – with the majority of the customer applications in the water disinfection market – both Point of Use and Point of Entry applications.

CrayoNano is expecting the average design-in cycle of customers to be 6 to 12 months, depending on the start of production as well as their requirements for internal characterization and qualification.

Operations

As previously communicated, CrayoNano has signed the first frame order for manufacturing of the CrayoLED H-series product to cover the initial ramp-up plan and has spent the majority of Q3-22 and Q4-22 to successfully qualify and improve the manufacturing to acceptable final yields of the CrayoLED H-series product. A high final yield is required to build a sustainable business line and allow the company to ramp-up production throughout 2023, preparing for high-volume manufacturing in 2024.

The initial inventory of products in our Norway warehouse supports fulfillment of initial pilot customer orders as well as sampling products to customers in support of their design-in and qualification process.

The CrayoNano Taiwan warehouse is expected to be operational in Q1-23, ready to fulfill the majority of volume for our global customer base.

In the CrayoNano Taiwan branch ‘CrayoNano Fab2’ – the CrayoNano clean-room was installed, tested, and commissioned during Q4-22. The build and commissioning of the clean-room was on-budget, and the internal wafer manufacturing capacity will support the company’s transition from a fab-less to a fab-lite model.

Financial Update

As announced in August 2022, CrayoNano has signed an agreement with DNB Markets and SpareBank1 Markets as finance advisors to the company and has decided to move forward with a targeted private placement of total NOK 200 million. The company has signed a term sheet with the European Innovation Council (EIC) for an investment of EUR 5m, subject to certain term and conditions, and has received significant interest from both existing shareholders and new investors to participate in the capital increase. The term sheet with the EIC Fund has been extended to March 31st, 2023.

On 12 January 2023, CrayoNano signed a loan agreement with its three largest shareholders of total NOK 27.5 million. Provided that the private placement is successful, the full loan amount will be converted into equity at equal terms.

For more information, please contact:

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

About CrayoNano

Founded in 2012, CrayoNano develops and manufactures nanomaterials-based semiconductor components using proprietary technologies. Headquartered in Trondheim, Norway, CrayoNano’s innovative semiconductor components advance global solutions in health and safety, water purification, consumer, and industrial applications, and more. CrayoNano is registered on Euronext OTC in Norway under the ticker “CNANO”.