CrayoNano AS conditional short-term funding successfully raised

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Short-term funding successfully raised

Trondheim, Norway—CrayoNano AS ("CrayoNano" or the "Company") is pleased to announce that the Company has executed a private placement raising approximately NOK 13 ,1 million in gross proceeds through the conditional allocation of 937,288 new preference shares (the "New Preference Shares"), each at a subscription price of NOK 14 (the "Subscription Price") (the "Private Placement"). The Subscription Price is above that of the last closing price on the Euronext OTC in Norway, and equal to the subscription price in the private placement carried out by the Company in April 2023.

The net proceeds of the Private Placement to the Company will be used for short-term funding, and under the current run rate will support the Company until the end of Q3 2024. Per the Q1 2024 Update issued earlier this month, the Company is in active discussions, some advanced, with several global and other companies. If the Company secures new customer agreements in the near-term with revenue and immediate cash positive effect, this will further extend the cash runway. Additionally, the Company continues to progress longer-term funding discussions, as detailed below.

As outlined in the recent Q1 2024 Update, CrayoNano estimates that it will be breakeven with net positive operational cash flow at approximately NOK 150m sales revenue using a +50% gross margin assumption which is our mid-term margin target. To give an idea of the progression to breakeven, the weighted pipeline for 2024 currently shows projected sales revenue of NOK 67m, and NOK 133m for 2025. For further information about the weighted pipeline, including assumptions, please refer to the Q1 2024 update. The sales pipeline contains many large individual potential contracts, so any one of these would materially advance CrayoNano to a breakeven position.

CrayoNano currently has ongoing discussions with potential strategic investors with the aim of raising longer-term equity capital. Strategic investors could be companies within the wider related industry with complementary operative- or strategic activities, or other synergy potential. As the Company looks to scale revenue and progresses to breakeven, additional short-term and / or longer-term financing, above that of the proceeds from the Private Placement and proceeds from the potential Repair Offering announced here, will most likely be necessary to support the business. The outcome of these discussions, the amount and terms at which the equity is raised is uncertain at this stage.

The Company has explored various financing structures with prospective investors and debt financing to solve its short-term liquidity need to fund ongoing operations and to allow for continuing the process of exploring solutions for its long-term financing. Based on the outcome of these discussions, and in light of the Company's short term liquidity need and support a more flexible process with the aim of securing long term financing, the board of directors of the Company (the "Board") is of the opinion that it is in the best interest of the Company to carry out the Private Placement, which involves establishing a new share class with preference shares (the "Preference Shares"), which shall have the following rights:

In the event of any distribution from the Company, whether in one or several distributions and either through dividends, capital reductions (including demergers), liquidation, dissolution or winding up of the Company, any funds and assets of the Company available for distribution (whether in the form of cash payment or payment in kind) shall be distributed as follows:

• First, holders of Preference Shares will receive an amount on each Preference Share equal to 3 times NOK 14, being the subscription price for the Preference Shares upon establishment.

• Second, any additional amounts will be distributed among the holders of Ordinary Shares and Preference Shares (as deemed converted into Ordinary Shares as set out below) in proportion to their respective holdings of shares in the Company.

Immediately after the preference amount under item (i) has been repaid in full to the holders of Preference Shares, each Preference Share shall be deemed converted into one Ordinary Share, and thus have the right to receive any part of additional distributions in line with the other Ordinary Shares under item (ii).

If the Company is the transferring company in a merger, the holders of Preference Shares shall retain preference shares in the surviving company where each consideration share shall have the same economic rights as the Preference Shares (less any amount already distributed).

Other than the rights set out above the Preference Shares shall have the same rights as the rights attached to the Ordinary Shares.

[Among the investors who have conditionally been allocated New Preference Shares is Nordic Technology Group AS, which is represented at the board of directors of CrayoNano through the primary insider and vice chairperson Rune Rinnan.]

The Company will call for an extraordinary general meeting expected to be held on or about 13 June 2024 (the "EGM") to vote on the following matters (the "EGM Resolutions"):

• Changes to the articles of association in order to establish the Preference Shares as a new separate share class with rights as set out above;

• The share capital increase pertaining to the New Preference Shares; and

• An authorisation to the Board of Directors to increase the share capital of the Company in order to facilitate the Subsequent Offering (as defined below) pursuant to which the Company will offer for subscription additional Preference Shares.

All of the investors who are allocated New Preference Shares are existing shareholders in the Company or their close associates and have given voting undertakings to vote in favor of the EGM Resolutions.

The establishment of the Preference Shares and the completion of the Private Placement is subject to the following conditions: (i) the EGM resolving the EGM Resolutions, (ii) the Company receiving payment for all New Preference Shares allocated in the Private Placement by the respective investors, and (iii) the share capital increase pertaining to the New Preference Shares being registered with the NRBE and the New Preference Shares being validly registered and issued in the VPS.

Subject to completion of the Private Placement, the Company's share capital will be NOK 769,235.68 divided into 37,524,496 ordinary shares and 937,288 Preference Shares, each with a nominal value of NOK 0.02.

The Private Placement implies a deviation from the existing shareholders' pre-emptive right to subscribe for the Offer Shares. The Board has considered the Private Placement in light of the equal treatment obligations set out in the Private Limited Liability Companies Act and deemed that the proposed Private Placement is in compliance with these obligations. The Company has explored several financing options to support the short-term liquidity, and the Private Placement is considered as the best option and will put the Company in a position to further explore its options to finance the long-term liquidity needs which is in the interest of all shareholders.

In light of the structure of the Private Placement with issuance of a new class of Preference Shares with preference economical rights as further set out above, the Board deems it important to allow all existing shareholders not participating in the Private Placement to subscribe New Preference Shares. The Company will accordingly offer existing shareholders as of 30 May 2024 (as registered in the VPS on 3 June 2024) to subscribe for Preference Shares in a subsequent repair offering in order to limit the dilutive effect and give all shareholders an equal opportunity to profit from future distributions (the "Subsequent Offering"). The Subsequent Offering, if approved, will consist of up to 1,189,204 Preference Shares that can be subscribed at a price equal to the Subscription Price. Shareholders (i) being allocated New Preference Shares in the Private Placement or (ii) who in the sole opinion of the Company have been invited and refusing to participate in the Private Placement will not be eligible to participate in a Subsequent Offering. Subscription without subscription rights and over-subscription will not be permitted. Subscription rights will not be transferable. The potential Subsequent Offering will be subject to, among other things, the EGM passing the EGM Resolutions and approval by the Company’s Board of Directors. Launch of a Subsequent Offering will also be contingent upon the publication of a prospectus.

On this background, the Board is of the view that the Private Placement considered together with the planned subsequent offering is in compliance with the equal treatment obligations to which the Company is subject and is in the best interest of the Company and its shareholders. The Board has concluded that there is a basis for deviating from the existing shareholders' preferential rights.

Through the establishment of the Preference Shares the pricing of the Company's ordinary shares that is subject to registration on N-OTC is more complex. Further, the Company will not apply for registration of the Preference Shares on N-OTC. On this basis, and on the background of expressed interests from the investors of the New Preference Shares, the Board believes it is in the best interests of the Company and its shareholders to deregister the ordinary shares from N-OTC. Any deregistration is subject to approval by the EGM and the Oslo Stock Exchange. The board has accordingly resolved to propose that the Company's ordinary shares are deregistered from listing on N-OTC and a proposal in this regard is included on the agenda in the notice to the EGM.

The notice for the EGM will be distributed to shareholders and published on or about 30 May 2024.

Reference is further made to the announcement made by the Company on 13 May 2024 regarding the appointment of Dr. Thomas Dobbertin as CEO. The Company has resolved to distribute 1,125,734 options to Mr. Dobbertin. Each option gives the right to acquire one Preference Share at an exercise price of NOK 14 per option, however so that any preferred right to receive dividends or other proceeds from the Company or on the shares shall be limited to the exercise price per share. The options shall vest with 1/4 of the options becoming exercisable on each anniversary of the delivery date, being 2 May 2024. Further, the exercise price of the options shall be adjusted to correspond with the share price in any subsequent capital increase carried out by the Company on or before 31 December 2024.

Advokatfirmaet Wiersholm AS is acting as legal advisor to the Company.

For further information, please contact:

Jens Kielland, CFO
tel: +47 72 90 98 60
email: jens.kielland@crayonano.com

About CrayoNano AS

CrayoNano develops and manufactures nanomaterials-based semiconductor components using proprietary technologies. Headquartered in Trondheim, Norway with a branch office in Taiwan, CrayoNano supports customers with global sales representatives and distributors in EMEA, APAC and the Americas. 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”.

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Important notice:

This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. Copies of this announcement 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. The Company does not intend to register any part of the offering in the United States or to conduct a public offering of securities in the United States. Any sale in the United States of the securities mentioned in this announcement will be made solely to "qualified institutional buyers" as defined in Rule 144A under the Securities Act.

In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "Prospectus Regulation" means Regulation (EU) 2017/1129 as amended (together with any applicable implementing measures in any Member State.

This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only for relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

Matters discussed in this announcement may constitute forward-looking statements. 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 release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believe that these assumptions were reasonable when made, 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 their control. Such risks, uncertainties, contingencies and other important factors 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 nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. You should not place undue reliance on the forward-looking statements in this announcement.

The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm, or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement.

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.

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.