2023-11-15 07:22:44
Trondheim, Norway - 15 November 2023
Continued commercial traction, further scaling up in Taiwan
CrayoNano AS (NOTC: CNANO) is pleased to announce its Q3 2023 trading update. During the quarter the company saw continued commercial progress with the signing of two commercial frame contracts, with AquiSense Technologies (AquiSense) and DUVROO Inc, which combined are estimated to be valued at NOK 6 million by September 2024. Growth acceleration plans continue to be implemented post the capital raise, including the relocation of certain R&D activity and the further scaling of operations in Taiwan.
Post quarter end, the company announced changes to its Board, with Jens Kielland now CEO, Jo Uthus is being proposed as Chairman while current Chairman, Rune Rinnan, is proposed as Vice-Chair. A further three commercial frame contracts were signed post quarter end in the Republic of Korea worth an estimated NOK 6 million over the next 12 months.
Jens Kielland, acting CEO said: “I am very pleased with the progress made this year and would like to thank Jo Uthus for all his contributions as CEO. CrayoNano has reached several milestones this quarter. We now embark on this next stage in our growth, with increased commercial traction and the acceleration of our Taiwan based operations.”
Market & Customer Update
During the quarter, we experienced continued interest for the powerful CrayoLED UV-C LED, evidenced by customer leads increasing 16% to 676 (Q2: 585), with an increase in design-ins of 62% to 47 (Q2: 29), and four design-wins. Our strengthened customer-facing teams continue to support the design-in process towards volume orders and material revenue generation. Whilst the design-in processes have taken longer than we expected at the beginning of the year, our commercial traction has accelerated since the beginning of the third quarter, and we have started to grow our order book which now exceeds NOK 12m.
Our global sales team has expanded its reach, with our own local representatives now present in five countries across EMEA, Americas and APAC. Targeted digital marketing activity in new geographies, including in Germany and the Republic of Korea, have delivered new leads and opportunities, including a new frame contract in the Republic of Korea with a shorter-than-expected design-in phase.
New distributors were onboarded, including a new distributor partnership with Vallalar Energy Solutions (VES), a consulting firm specialising in UV-C water and air purification, based in India as well as with Mauser Electronics, a global distributor of semiconductors and electronic components (link).
Operational Update
As shared in our last update, we strengthened our Taiwan operations through the hiring of a new Taiwan based Chief Technology Officer (CTO), Dr. Ryan Chuo, an UVC-LED industry veteran with 25 years of industry experience from optoelectronics and UV-C LED design and manufacturing companies. He will focus on accelerating the UV-C LED technology development from CrayoNanos Taiwan office.
The company also transitioned part of its operations to Taiwan and reorganised people into customer-facing roles to support our growing global design-in activity. This change was effective from August 1st and is part of our ongoing focus on efficient operations.
In October we announced that Jo Uthus is proposed as Chairman to oversee the strategy of the company, including equity financing as it enters a new phase of growth and global expansion.
Post period end events
Post the end of Q3 we have seen increased demand in the Republic of Korea with a further three frame contracts signed in that region across three application areas; (1) water treatment and air purification; (2) healthcare applications and antibacterial LED solutions; and (3) disinfection robots for professional, commercial and consumer applications. These new contracts were delivered within an accelerated timeframe from contact to contract showing the effect of the network we are building.
Post period-end we also appointed Camly Doan, who has 15 years LED experience and has been working for the company for three years, as the new General Manager of our Taiwan operations.
Financial Update
Revenue and operating cost
Revenue from product sales in the third quarter amounted to NOK 378k from first sales to new distributor Mauser Electronics. Total operating costs were NOK 18.0m, an increase of NOK 3.0m (20%) compared to previous quarter, and NOK 1.6m (8%) below the same quarter last year. EBITDA for the quarter was at NOK -17.4m, NOK 3.2m below the previous quarter and in line with last year.
Cash flow
Cash flow from operations was NOK -20.0m in the quarter, lower cash burn than the second quarter. As we continue to accelerate our pivot to Taiwan our investment in fixed assets increased in the third quarter resulting in NOK 2.8m cash out, partially offset by NOK 1.5m in from the sale of fixed assets in Norway.
At the end of the quarter cash and cash equivalents was NOK 53.6m, down NOK 13.4m quarter-on-quarter as negative cash from operations is partly offset by received soft funding and working capital financing. In July, as shared in our last update, the Company secured a credit facility of NOK 12m from Sparebank 1 SMN, partly guaranteed by Eksfin. The facility was established for the purpose of financing parts of CrayoNanos working capital.
-ENDS-
Q3 2023 Results Presentation and Q&A
CrayoNano will deliver a presentation to analysts and investors via webcast at 10:00 CET today. The live video webcast will be accessible via the companys website: https://webcast.openbriefing.com/crayonano-nov23/
An audio recording will also be made available after the webcast via the same link.
Calendar of future events for CrayoNano:
Q4 Financial Update 15 February 2024
For more information, please contact:
CEO Jens Kielland
Email investor@crayonano.com
Phone +47 72 90 98 60
About CrayoNano
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. CrayoNanos 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”.