Nanoco Group plc

Good afternoon, good morning. Dmitry Shashkov, CEO of the company.

Liam?

I'm Liam Gray, CFO.

Okay. Welcome to our annual results presentation.

I will take you through the operational highlights, and I pass it off to Liam to cover the financials, after which we will take any questions which you may have. My main topics will be around the revised Nanoco strategy, which we've been developing throughout the year, the progress along the strategy, especially in the area of image sensor, which was the main focus.

And in the end, I will also give you an update on our strategic options review known as the CDX process. With that, let me proceed.

2025 was a big year for Nanoco. We accomplished a lot in a short period of time.

As we reported earlier to the shareholders, we started the year by significantly adjusting our cost base. In the end, we were able to reduce our cash burn by approximately 30%, extending our cash runway and giving us opportunity to reinvest in the business development.

Along the way, we also changed our organization following the changes in the Board composition earlier in the previous year, we proceeded to build a global commercial organization, which is now operational on 3 continents. And the early part of the year was strongly focused around redesigning our strategy.

We really started with a blank sheet of paper, and we rebuild the strategy from the ground up by analyzing all available market opportunities with a strong focus on those which could deliver revenue and profitable growth to the company in the short to medium term and prioritizing other opportunities lower on the list to stay focused on what will deliver the value in the coming years. Along the way, we reconfirmed that image sensors remains the main market and should remain the top focus area for the company for the reasons which I will get into later.

But in brief, it's a combination of very favorable external factors in the market trends which favor the development and adoption of this technology and a strong competitive position inside Nanoco, which we've built through the years through the combination of our technology, IP, production capabilities and new product development. Throughout the year, we signed a second joint development agreement that happened in the spring of 2025.

And just about a month ago, we extended our first joint development agreement by additional 3 years. Those are both very important milestones in the company development, and I'll comment on that later as we go through the presentation.

And finally, earlier in 2025 in the calendar 2025, we started the strategic options review with CDX. The process after a few months resulted in significant progress, and I will give you an update in the end of this presentation.

Let me start by categorizing our markets. As a result of the strategic strategy review, we put our markets into 3 categories.

And in the first category, top priority, one market image sensor is strongly revalidated as the top area of focus for Nanoco. There are a couple of reasons for that, but most important ones, as I mentioned, on the outside -- in the outside world, we have rapidly developing applications, which are enabled by this new quantum dot sensor technology.

They range from facial recognition for consumer electronics to automotive safety, helping monitor the driver's condition as well as various collision avoidance systems to industrial quality control where in a variety of industries, quantum dot sensors can deliver capabilities not achievable with other methods, all the way to medical monitoring and various applications in defense and surveillance. All of these applications are developing in parallel.

And against these trends, we formulated the strategy to focus in image sensors around 3 main themes. One is around new product development.

We pursue aggressive new product development, which is focused on high-volume markets. For us, that means predominantly consumer electronics and automotive markets with others to follow.

Secondly, we work on our product portfolio. In addition to our first-generation material, we now have second and third-generation materials under development, which fit the needs of those high-volume markets, consumer and electronics.

We also -- in addition to new materials, we're also offering longer wavelengths available for this type of sensing, which also opens up additional applications for us. And finally, we said from the beginning to have a broad commercial outreach to really cover any significant programs globally, whether they are in North America, in Europe or in Asia, if any of the end users of the sensor technology is considering introduction of QD sensors into their product lineup, we would like to be their partner of choice and work with them on developing this technology and bringing it to commercial adoption.

The second category are the markets where we see growth potential in the medium term, and they could nicely balance our presence in image sensors with additional applications, which are less cyclical and growing on independent, based on different trends than the image sensor market. Those are the markets such as flat panel display, photovoltaic, agriculture and paints and pigments.

In each of those, we see some opportunity for the future. But right now, they do not warrant the same amount of attention and focus as image sensor market.

And flat panel display is a more mature market, but would give us additional opportunities to grow if and when we see favorable regulatory trends manifesting towards substitution of cadmium, which is one of our main strengths in the flat panel display market. The other 3 markets photovoltaic, agriculture and paints and pigments are much younger.

And rather than pursuing these new markets by ourselves, we are looking to find a development partner, typically one partner per segment to pursue that development jointly. And if and when those market segments develop to larger commercial opportunities, we would be able to scale up our resources and participate in them with a more significant effort.

So for now, those are growth options, which we continue to pursue with modest amount of resources, so we can focus all our efforts on image sensor. And finally, for the 4 market segments, which were previously considered for growth, that's lighting, biomedical applications, authentication markets and quantum technologies.

We do believe that quantum dots offer nice opportunities in the longer term. But for now, those markets do not warrant additional attention.

As a relatively small company for the sake of focus, we will continue monitoring these applications, but we're not going to put any additional effort into them as of today. With that, I would like to take a deeper dive into the image sensor market, the one which is the main focus of our product development and our strategy investment.

We are witnessing a major and a positive shift happening in this market. Just in the 12 months that I've been with Nanoco, we see quite a dramatic change where today, it's predominantly low-volume markets, mostly centered around industrial and defense applications.

They enable some important possibilities such as machine vision, whether it's for agricultural applications for produce inspection or for semiconductor fabs as well as a variety of defense applications. Those are good applications with good value proposition, but the volume of sensors and associated systems tends to be in the hundreds and thousands of units, not in the millions.

Those pave the way for high-volume application to come through. And what we witnessed is that consumer and automotive markets are rapidly moving towards commercial adoption.

Consumer market has already been our focus. That is the focus of both of our joint development agreements.

The first one signed a little bit over 2 years ago and now extended and the second one, which we only signed in the spring of 2025. But in addition to consumer, we witnessed rapid changes in the automotive market.

Conventional wisdom, what you would read in the market reports would say that automotive market typically is delayed by a few years after consumer because of high reliability requirements and conservative nature of the end users. But that's not what we witnessed.

We observe that some of the companies, especially Asia-based companies are pursuing this technology quite aggressively, and we believe that adoption in high volume in the automotive segment will rapidly follow the adoption in consumer. For us, those are the 2 main high-volume markets.

In addition to consumer and automotive, we see some favorable developments in the medical field where those quantum dot sensors can be used for diagnostic as well as for biomonitoring. And this also could be a pretty high-volume application.

If it's taken to wearable devices, opportunities would be in the millions, whereas for automotive, it's already in the tens of millions because you expect to have multiple sensors per car performing different functions once they are introduced. And on the consumer side, if you just count the cell phones, approximately 1.4 billion cell phones are manufactured every year.

So even a modest penetration into the cell phone segment would indicate hundreds of millions of units. So that is the reason why we strongly focus on the right-hand side of that panel where really high-volume opportunities lie.

And we, as a company, are really well positioned to succeed in this market. In the existing products, during 2025, we developed a detailed capacity model.

And we now can confidently say that our existing production facility in Runcorn can produce 2D materials enough for approximately 150 million sensors on a 1-shift operation, 5 days a week, 1 shift. If we change that operation to 3 days -- sorry, 3 shifts, 7 days a week, we are capable of producing up to 700 million sensors worth of quantum dot material.

This, again, enables us to participate fully in this growing high-volume market, whether it's consumer or automotive, this amount of capacity is sufficient to service this market globally. Along the way, we also analyzed our cost position and Nanoco is in a unique situation compared to other companies in this field because of our extensive production experience in high volume of those quantum dot materials as well as our unique IP.

And as a result, we concluded that once we are on scale, we're able to provide this quantum dot material at a very modest cost to the end user. It remains a high-margin profitable product for us, but the contribution to the cost of the sensor would be somewhere in the ballpark of $0.12 to $0.25 per sensor.

Again, contrary to popular belief, quantum dots are not necessarily expensive. They deliver their unique functionality in such a small quantity that to enable a sensor, we only need to contribute a very modest amount of the cost.

And that's an encouraging calculation, which tells us that we can really aim at very high-volume cost-sensitive markets with our production capabilities. We also recently received a small grant from Innovate UK and that grant is to further optimize our first-generation material, lead sulfide to develop what is known as a single-layer ink.

That will be an improvement to an existing manufacturing process, which will make us even more productive with this first-generation material. On the new product side, most important developments during the year were really the signing of the second joint development agreement with an Asian manufacturer, which we announced in April.

And that joint development is focused on consumer applications just like the first. And the first joint development agreement was successfully renewed just about a month ago for additional 3 years.

That is perhaps the most important milestone we achieved during the year because in 3 years, we expect to finalize the material selection, go through all the steps of process development, manufacturing process development and most importantly, to go through the scale-up phases where our material is extensively tested in high volume, validated by the end user and gets ready to be adopted in high volume. And that means that within this 3-year period, we will rapidly increase our production volumes for the sake of the customer, and we are looking to get a lot closer to breakeven sometime in 2027 as a company.

On the technical side, we also made some significant advances. We can now state that Nanoco achieved the best-in-class performance with the leading material, which we are developing for this market, which is indium arsenide.

The 4 numbers highlighted here in the light green, I will explain them on the next page, but those are the best result which any company or organization has been able to achieve, and that's very encouraging result for our customers. And in addition, we launched some new internal projects to extend our capabilities further.

One of them has to do with new materials. In addition to indium arsenide, which is our main material, we also now have a project on indium antimonide.

That is the third-generation material, if you'd like to call it that, which can deliver additional capabilities, which indium arsenide material cannot. So we are now pursuing device development with Indium antimonide.

And in addition, we started to look at extending our wavelength capabilities as well. Current capabilities in the short-wave infrared, SWIR region, as it's known, tend to extend all the way to 2,000 nanometers.

But between 2,000 and 3,000 nanometers is the extended SWIR and above that region between 3,000 and 5,000 nanometers, we have the mid-wave infrared region. And in both of these regions, there is no low-cost applications, so no low-cost technology, which can sense objects at this wavelength.

This wavelengths opens significant additional opportunities and high-volume applications, and we started the projects in this area to be first extending our capabilities into these wavelengths. So this page is a bit technical, but I will explain.

This page demonstrates all the results known to us, which were achieved with this quantum dot sensor technology in a very important spectral range of 1,400 to 1,500 nanometers. This is a popular wavelength, which a number of organizations, commercial and technical are pursuing.

Companies like IMEC, companies like Sony and some of the others have done a lot of work at this wavelength with this material. And technically, the expectations of this material are twofold.

There are 2 most important performance parameters. On the horizontal axis is what is known as quantum efficiency.

This is the measure of how strong is the signal coming from the sensor when the object is illuminated. And on the Y-axis is what is known as dark current.

This is the measure of noise or useless signal, which comes from the sensor when object is not illuminated. So as you can imagine, on the horizontal axis, the higher quantum efficiency, the better.

And on the dark current, the lower dark current, the better. So ideally, you would like to be positioned as low on the Y-axis and as far to the right on the X-axis.

And the 2 champion devices are circled at the bottom of the chart in red boxes. Those are the 2 champion devices which we developed with indium arsenide technology.

And as you can see, they far exceed any other results which were published so far. I also point out that the scale on the Y-axis is logarithmic.

So additional reductions in dark current are quite significant, and they're very difficult to achieve. For comparison, you can see the blue oval, which roughly outlines the region -- the range of performance, which now puts us into a position to be adopted into commercial applications.

And as you can see, we're already meeting requirements for dark current, and we are very close to meeting requirements for quantum efficiency. We're quite confident that we can get there with a few additional developments, which are already underway.

So again, very encouraging results for our customers who see this performance and clearly putting us in a leader category in this new market. So with sensors capable of this, we can do a lot of things.

I think we already demonstrated some of the pictures. Those are pictures taken with the camera and inside the camera are Nanoco quantum dots.

This is the first-generation material. And on the first panel, you can see clearly improved visibility through smoke.

Left-hand side is the conventional visible camera. Right-hand side is the infrared camera, which shows very clear visibility through the smoke and a very good level of contrast, which you otherwise cannot achieve.

The second panel demonstrates visibility through a silicon wafer. In the visible light on the left, it looks opaque and slightly purple.

But in the infrared illumination, you can clearly see the Nanoco logo, which is printed on a piece of paper underneath the silicon wafer. Clearly, light goes through silicon without any obstacle, and that opens up a variety of applications in the semiconductor industry, including wafer inspection and quality control.

Likewise, the picture on the bottom shows visibility through plastic packaging. Again, in the visible light, the package appears opaque.

But with infrared illumination, you can clearly see through the package, which allows you to accomplish material sorting or simple quality control without breaking the packaging open. And many other applications can be enabled with this kind of capabilities, which we're just beginning to implement in real world.

With that, I would like to shift gears and give you an update on our strategic options review with CDX. You will probably remember when we started this process roughly in January, there was a significant amount of activity, which we reported on.

Our outreach was quite broad. We ended up in conversations with more than 200 companies globally.

The idea was to leave no stones unturned and really assess all types of potential investors with their potential to make an investment in Nanoco and to deliver higher value to our shareholders than we could through organic development. And after months of activity, we identified a number of interested parties and discussions with these parties are continuing.

I am cognizant that the process has taken quite a long time. But again, as I stated in our spring presentation, the objective is to find the highest value option for the shareholders, and that doesn't always happen as fast as we'd like.

We continue this process, and we will update the shareholders as soon as we're able to. But overall, we are confident that between the organic strategy, which has been underway and under implementation throughout the year and the inorganic options, which we are now lining up, we are in the best position to deliver shareholder value.

With that, I'd like to pass the baton to Liam, and he will cover the financials. Liam?

If we start with some of the financial highlights for the year. Firstly, revenue of GBP 7.6 million is down GBP 0.3 million on the prior year, and this is due to the prior year having the full year benefit of the JDA with the European customer, which they canceled in October '24.

And this was partially mitigated in FY '25 by the new JDA we signed with the second Asian customer. Our adjusted EBITDA in spite of the fall of revenue has increased to GBP 1.5 million from GBP 1.2 million in the prior year, and that reflects the reduction in the cash cost base as a result of the restructuring program we completed during the year.

During the year, we also completed the previously promised GBP 33 million return of capital to shareholders with the final GBP 1 million of buyback being completed in October '24. Our year-end cash position was GBP 14 million, and our ongoing cash cost base is now stable at GBP 0.5 million per month.

And just to clarify, that is our gross cash cost base before any revenue. So our net cash depletion is around GBP 350,000 to GBP 400,000 per month.

As a business, we obviously continue to maintain a strong focus on our cost management. And finally, we currently have an order book of GBP 7.6 million, which can be broken down into GBP 6 million relating to the Samsung license, which has obviously been prepaid, GBP 1.5 million relating to services revenue and GBP 0.1 million of grant revenue from Innovate UK grant, which Dmitry referenced.

This order book of GBP 7.6 million is equal to the revenue achieved in FY '25 and gives us a solid foundation to outperform the FY '25 financial results. Moving on to the next slide, we have our summary income statement.

So starting from the top. As mentioned previously, revenue in the year was GBP 7.6 million compared to GBP 7.9 million in the prior period.

Our cost of sales has fallen compared to the prior year due to a combination of lower revenue and also a reallocation of staff to internal R&D investments. And you can see that increase in cost further down the table on the fifth row.

This has resulted in a gross profit in FY '25 of GBP 7 million compared to GBP 6.7 million in the prior year. Other administrative expenses have fallen by GBP 0.5 million, and that reflects the benefit of the restructuring we completed during the year.

This gets us down to an adjusted EBITDA of GBP 1.5 million. Further down within other adjusted items, there are a number of small one-off charges, which included GBP 0.3 million relating to the ongoing strategic review, GBP 0.3 million related to the LG litigation and GBP 0.2 million related to the requisition general meeting last year.

And we also incurred GBP 0.1 million related to the restructuring. We then have our noncash share-based payment charge of GBP 0.7 million.

And in the comparative period, that was GBP 1 million, which -- and that was offset by a positive FX gain of GBP 2.7 million on the Samsung receivable. Depreciation and amortization has increased due to the full year impact of device lab, our investment in CapEx over the past couple of years.

And then we have finance income, which is largely interest on cash deposits and the tax charge is the unwinding of the withholding tax assets and a change in the calculation of the deferred tax asset. And just for reference, that movement is all noncash, and we actually received a GBP 0.3 million payment from HMRC for R&D tax credits claimed during the year.

And that gets us down to bottom line loss after tax of GBP 2.2 million. So this next slide reconciles our movement in cash from GBP 20.3 million at the start of the financial year to GBP 14 million as of 31st July 2025.

We have the completion of the buyback, which cost GBP 1 million in the current financial year. And then we had our cash outflow from operations during the year, which is GBP 5.2 million, which is essentially the cash we used to run the business.

We had some one-off exceptional cash costs, as mentioned previously, for the general meeting, the CDX process and the LG litigation, which comes to GBP 0.8 million. We had some small investments in capital equipment and costs related to the new IP, and that came to GBP 0.4 million in the year.

Interest income, as mentioned before, on our cash deposits amounted to GBP 0.6 million. And then we had the R&D tax credit of GBP 0.3 million and then some other small movements, which amounted to an inflow of GBP 0.2 million.

And this meant we finished the financial year with GBP 14 million. So in summary, the company has an order book of GBP 7.6 million of revenue.

As I mentioned earlier, this is in line with the FY '25 revenue and gives us a strong foundation from which to grow and potentially financially outperform FY '25. Our gross cash cost base before revenue is stable at GBP 0.5 million per month, which is a significant reduction on where we were 12 months ago.

As a business, we remain focused on identifying and implementing further savings where possible without compromising on our capabilities. No further investment is required.

The device lab is settled and delivering great results, and we have full operational autonomy over the lab for use with any of our customers. We have the facilities to continue to fulfill our joint development agreements, and we have the installed capacity to rapidly scale our sensing materials if the market adoption takes place and the demand increases.

And also as previously mentioned, we have completed the GBP 3 million return of capital to shareholders. And finally, on our cash resources, our runway is secure, and there is significant potential for upside without incurring further costs or investments.

And as mentioned in the Chairman's report, we have a plan to scale up our materials and be achieving a level of revenues in the calendar year 2027, which means we, as a business, will be self-sustaining. And with that, I'll pass you back to Dmitry.

Thank you, Liam. In summary, I'd like to say that this was a significant year for Nanoco.

We really streamlined the company, and we positioned the company well for organic growth. On the outside, we continue to face very favorable market developments, and those are especially favorable in the image sensor market.

We have an excellent competitive position in this market, and we are well positioned to succeed. As we began to implement this strategy during the year, we made significant progress on the commercial front.

We have a broad commercial reach. We have 2 joint development agreements, and we are working to sign additional ones when we are ready.

We expanded our product portfolio in the image sensor, and we made quite a rapid technical progress. And as a result, there is a growing recognition of the leading role which Nanoco plays in the image sensor market.

In addition, we are pursuing some of the additional markets with minimum investment, so we can maintain strong focus on image sensor. So all of this together positions us very well to pursue organic pathway for the company.

But as we said in the beginning of the year to explore additional strategic options, which may include the sale of the operating business, now after a few months of the CDX process, we are really well positioned to compare what the inorganic options can deliver. And I'm confident that in due course, we will be able to put the highest value option on the table, whether it is organic or inorganic development as we conclude our CDX process.

With that, I'd like to close the formal part of the presentation and open it up for questions. We received quite a few.

Of course. So the first question we have received is, can you give an update on the LG case, at least in terms of potential dates for development along with the outlook for IP protection generally, please?

Thanks, Liam. So all I can say about LG case is that it's progressing as expected, but I cannot give you further comments or any potential dates on that.

For the second part of the question, outlook for IP protection, yes, of course, that remains part of our focus to look for additional opportunities to assert our IP and enter licensing arrangements, which will help the company financially. We will continue to evaluate those opportunities as we are progressing with LG, then after that, we would look at additional opportunities if and where it makes sense.

Just to remind everybody, IP protection doesn't have to take a form of a lawsuit. Lawsuits are costly and risky.

First and foremost, we would be looking for opportunities to take in a license, but legal options remain on the table if they are financially justified. Again, we need to recognize that the process could take a while and can cost a substantial amount of money.

Therefore, it's always a trade-off between what's achievable and what's practical given the financial limitations and risks involved. I think second question is very much related to that.

So we can skip it. Next question is maybe, Liam, I'll pass it to you.

What is the current cash burn per month for Nanoco? Is an equity raise likely in 2026?

Thank you. So as I mentioned, the gross cash cost per month is GBP 0.5 million, we do have revenue of sort of GBP 100,000 to GBP 150,000 per month offsetting that.

So the gross cost per month are GBP 350,000 to GBP 400,000. Will the cash balance at the year-end be GBP 14 million?

No. It's very unlikely an equity raise is likely in 2026, unless something significant happens in that we have to scale quickly or deploy cash for investment.

But in regards to run the business, no an equity raise isn't likely in 2026. Okay.

Next question. How is the transition in the technology team progressing post the departure of Dr.

Nigel Pickett, Founder and CTO of the Nanoco Group? Could you provide a further color on his departure?

Thanks, Liam. Yes, good question.

So we announced that Nigel will eventually retire from the company. And that is after building up this company from the garage stage literally in a closet in the University of Manchester to the company that it is today 24, almost 25 years later.

So Nigel is simply ready to move to the next stage. And that was his intention to eventually retire.

Along the way, we invested significantly into our technology resources. As we announced, we replaced his role with a non-Board role, but it's a senior technologist, Ombretta Masala, who was already in a leading role in the technology organization, supported by a number of your quite seasoned R&D colleagues.

And I must say that this transition has been very smooth. Operationally, the new team is already fully running independently of Nigel.

Nigel continues to be with the company for a few additional months to provide some of the transition as well as to focus on some of the special tasks, which he is uniquely capable of doing. We're certainly wishing him well, but the organization at this point is well positioned to continue.

I also will mention that in the fall of 2025, we also brought 3 additional resources into the R&D team. And that still keeps us with the reduced cash burn, which Liam outlined, but we brought two senior chemists and one device physicist onto our team, and they're already well engaged and they bring additional capabilities to our technology organization.

So transition is going well, and we are confident that we're well positioned to capture the opportunities.

Okay. Next question.

Sorry if I have missed it in the first few minutes, but there has always been a focus on the TV screen market and a huge growth market that Nanoco is well positioned to capitalize on. That now seems less of a focus.

Are you now telling us that you don't see this as a major opportunity any longer?

Excellent question, and it's always good to reflect and say, how did our views change from a couple of years back? Yes.

So flat panel display is the first market for quantum dots, which developed into relatively high volume. Along the way, market also commoditized significantly.

So when we look at the opportunities to introduce our materials into the existing flat panel applications such as LCD technology, really the legacy technology, the one which started, the penetration of QDs. This market is rather commoditized.

And there are pockets in this market, which remain attractive. For example, especially in China and in Taiwan, significant amount of LCD product is still produced using cadmium-based material.

We at Nanoco pioneered the cadmium-free technology, and we think it may be an attractive opportunity to replace cadmium-based materials with the cadmium-free. However, right now, in China specifically, there is no regulatory trend or regulatory drive to substitute cadmium away.

Therefore, we see this as an opportunity which we will monitor, but not necessarily put a lot of resources into given that absent regulatory drive, this is not going to be a high-margin opportunity for us to pursue. On the new technologies, new technologies, especially microLED is expected to be introduced in the coming years.

And quantum dots will likely play a role. They would be used in relatively high volume comparable to LCD.

And this may become a good market for us to pursue. But as of today, this technology has been delayed by years and years because of very significant technical hurdles as well as the economics.

This new and improved TV technologies have to compete with existing ones, which are continuing to improve their own performance and to reduce their cost. So on balance, we still think it's an opportune market for us to pursue, but it does not warrant the same focus as a few years ago.

Thank you. Next question.

Why is the strategic review taking longer than initially guided? Is Nanoco still of the view that an outright sale of its key division is likely?

Or is it also considering strategic equity investors?

Good question. So I can answer it in very simple terms.

Nanoco is not an easy company to assess and value because the technology is quite new and a number of applications are relatively technically complex. So when we started the CDX process, we had to recognize that complexity.

And the fact that at the early revenue stage where we are, it may take a while for potential investors to assess the viability of our business plan and to proceed with potential acquisition. So again, our objective is not to get to any deal no matter what it is, but to try and find a deal which would value the company higher than it is currently valued in the public market.

And therefore, this may take some time to build that conviction from the potential investors in this inorganic option. That is the main reason, right?

We are not trying to rush into a deal, but we are trying to develop an option which could offer high value to the shareholders than organic development. To answer the second part of the question, are we considering straight sale only or an equity -- partial equity investment?

In principle, we can consider both. But practically speaking, outright sale of the operating business is the main scenario we are focusing on.

So there is a clean transition from the current ownership into the new ownership. That is the main scenario we are continuing to pursue.

Thank you, Dmitry. The next question is, when does Nanoco expect to announce further deals with its technology?

Any such discussions at a closing stage?

Yes. So we have 2 joint development agreements, which we announced.

We have quite a few other commercial and technical relationships, which may result in similar joint development agreements. But if and when they will happen, I cannot fully tell you.

Yes, we would very much like to expand that portfolio. Three is better than 2, 4 is better than 3, but they come when our partner on the other side is ready to put additional resources and make it into a real project.

So we are aiming to have more than 2, but when they will happen, I cannot tell you. What I did witness in my 12 months at Nanoco is that the level of interest in the image sensor market continues to steadily grow that we see a larger number of companies getting involved.

I already gave you an example of automotive applications, which 1 year ago, everybody was convinced are pretty far away. But as of today, even coming off the industry conferences 2 weeks ago in Korea, I have pretty clear visibility on a number of large companies pursuing those automotive applications, which 1 year ago was not the case.

So I think new agreements will come into place. I just cannot tell you exactly when.

Thank you. Next question.

You are not talking about image sensing in the same way as you used to talk about screen market and Nanoco's unique position, which has never transpired. How do you expect shareholders to continue on this journey of assurance that Nanoco can eventually find a commercial product that turns the company's fortunes around?

Yes. Good question.

And obviously, I wasn't there when Nanoco was focused almost exclusively on the flat panel market. But indeed, that market did not materialize for us in the form of sustainable product revenue.

It did materialize for us in the largest licensing deal, I think, in the history of advanced materials when we achieved settlement with Samsung. And as you're well aware, we are pursuing a similar type of process with other potential users of our IP.

But the market did not develop into sustainable product supply, which ideally we, as a materials -- advanced materials company would like to pursue. I believe image sensor market is different for a couple of reasons.

One, we are clearly in the lead when it comes to developing this new technology. Nobody, neither the material manufacturers nor device companies have neither IP, nor production experience, nor the product portfolio, which we have in image sensors.

Secondly, we have at least 2 actively engaged customers who vote with their wallet and with their resources. They commit substantial amount of resources from their side to proceed with those joint development agreements.

And as we progress with those JDAs, we will continue to update you on our performance. But in and of itself, it's an evidence of customers committed to this market, developing this technology jointly with us where we would become the supplier of choice.

We are not worried about not becoming a supplier because the production of these materials is difficult. The production processes are protected by our IP, and we do not expect that anything similar to the Samsung situation will materialize here.

So I believe this is a very different market, and these are very different times. And our business model is pretty well protected in the image sensor.

Thanks, Dmitry. Next question, Nanoco Director, Jalal Bagherli and yourself undertook material share buys in November 2024.

Are you still of the view that Nanoco is still undervalued? Are directors considering further share buys?

And if I may make as subjective inference, you seem a lot less ebullient compared to IMC webinar earlier in the year/April 2025?

Yes. So to answer the factual questions, yes, I continue to be an investor and a shareholder in Nanoco, mainly because I do believe that we're undervalued.

And I believe our Non-Executive Chairman, Jalal, is in the same situation. So I'm confident that the company is worth more, but my job is now to prove it with either organic development, which lead to that recognition in the market or inorganic deal, which will prove it through a transaction value.

So that's all I have, I can say about that. In terms of being less ebullient, is ebullient, does it mean bullish?

Cheerful, full of energy.

Well, I'm certainly full of energy with regards to Nanoco's future. But yes, perhaps on day 1, I was a bit less informed about the complexities of the company.

But 1 year later, I'm just as enthusiastic about what the company can do, whether we stay on the organic path or whether we'll find the new owners. I continue to believe that there is significant value locked in the company right now, and we are well positioned to unlock it.

Next question. If you succeed in getting your materials into driver monitoring, do you think that need will be there for a long time?

Or do you think autonomous vehicles will mean the opportunity is only there for a short time?

Yes, good question. I'm not a specialist in autonomous driving.

But I think under most realistic scenarios, transition away from human drivers to completely autonomous driving is the transition measured in decades, not years. And under completely driverless cars, even if and when it happens that all the cars on the road are robotically controlled, well, then the cars need to monitor each other.

They just don't need to monitor the drivers. So applications in automotive technology, yes, they -- some of them are tailored towards self-driving cars.

Others are tailored towards cars with drivers. But either way, the expectation is that quantum dot sensors, infrared sensors will be adopted in multiple units per car, just like today's even proximity sensors, which help you park, you probably have at least a dozen sensors in different points of the car.

Likewise, with the 2D sensors, expectation is going to be more than one per vehicle. And therefore, we're not just dependent on driver monitoring alone.

Okay. Next question.

The RNS suggests that it is more likely than not that the CDX process won't conclude in the sale. What's the point of continuing if no acceptable offer has been received to date.

After everything that has been promised, it would be a huge failure of the Board to execute a sale. Will the Board consider their decisions if that is the outcome.

And when you say the process is nearing conclusion, what time frame does that actually mean?

Next question. The cost of running the business seems too far out.

The turnover generated from any production rate sales, how can this continue and when will it change? With spend of GBP 6 million per annum, the GBP 14 million will soon be gone.

So just on this, as I mentioned before, the gross monthly spend is between GBP 350,000 GBP 400,000. So is GBP 4 million to GBP 4.5 million.

And that's the current revenue levels. We are looking at further JDAs, as Dmitry mentioned, which would reduce that cash burn.

And then as we ramp up our scale to production of the materials, we do anticipate the level of revenue from material sales to increase significantly, which is why we believe that come calendar year 2027, we will be in a self-sustain or breakeven position. Next question.

You say how significant this year has been for Nanoco. The market sees things differently.

Up until now, the market has always been right. Why would this time be any different?

Yes. I don't know if I can answer this question convincingly, right?

I haven't been there at the previous junctions, but I do see that the way we are pursuing commercial engagement with our customers in image sensors and otherwise puts us in a position to succeed. I mean, just to state the obvious, up until December of last year, there was no commercial organization.

The company was entirely internally focused on the technical development. Nobody was out there listening to the customers, asking questions, explaining our capabilities and engaging with various customers commercially, whether it's through joint development agreements or any other form of technical or commercial collaboration.

We put this organization in place for the first time. We now have a broader pipeline than we ever had of potential customers evaluating our technology.

And for all these reasons, yes, I do believe that this time is different. And markets clearly do not see it the same way, but markets do not have access to the inside knowledge, which we are privy to in our discussions with potential customers and development partners.

So again, I -- my goal is to disclose as much of it as I'm able to through favorable market trends and specific agreements and commercial developments when we are ready to announce them. But apart from that, we can simply do our jobs, proceed with the commercial development and the results will speak for themselves.

I do believe that the markets will eventually align with our vision once we demonstrate tangible progress towards those goals.

Please, can you talk a little bit more about the change of pace of development in automotive? What sort of opportunities do you foresee?

Yes. Again, infrared sensors can deliver particular functionality better than existing sensors.

Existing sensors, if they operate in a visible or near infrared region have limited ability to see through adverse conditions. So for the collision avoidance and similar type of safety tasks, infrared sensors are able to penetrate through rain, snow, fog, smog, smoke or any other types of adverse conditions.

So both for driver awareness of an obstacle or automatic collision avoidance systems. Once those sensors are introduced, they can help steer the car away from an object on the road.

They're even able to distinguish between a live object and a dead object, lacking better term. If you have a cat on the left and the rock on the right, you would rather steer towards the rock than the cat, et cetera, et cetera.

On the driver monitoring side, infrared sensors in some of the wavelengths, which we're working on, are particularly good, for example, to see through the tinted glass, which is good for other types of automotive safety, even for law enforcement. But they're also able to see, for example, through sunglasses.

So in some of the countries, legislation is now coming where driver monitoring, especially preventing driver from falling asleep is becoming a mandated feature in some of the new vehicles. Well, infrared sensors are able to easily see, for example, through the sunglasses to track ice movement and to make sure that the driver is awake and attentive with attention on the road.

So these are just some of the applications where we see this being adopted. And as I stated, especially in Asia, automotive companies are very keen to differentiate themselves with some of the additional safety features.

And this technology gives them an opportunity to get ahead with introduction of this technology.

And just a few more left. Could any of the very large tech companies get involved with Nanoco to pursue quantum dots for quantum computing?

Quantum dots for quantum computing. Yes, that remains a possibility.

We've done some academic work with the University of Manchester to demonstrate that quantum dots could be usable for quantum computing and quantum communication. Those -- this application is in our third category.

We believe in the long-term value, but we are not willing at this point to put significant resources into this just simply because of the time it takes to develop. If there is a willing development partner who would like to co-invest in this technology with us, for sure, we would consider.

Right now, we just would not like to make it a self-funded activity because I think these markets will take some time to develop.

Is Nanoco eligible for U.K. government R&D grants?

Have any such avenues been explored?

Yes, of course. So we're already a receiver of Innovate UK grant, which is, I guess, one of the main funding agencies in the U.K.

We will continue to look at other opportunities. One of our senior staff members is IT and grant manager, Nathalie Gresty, who is monitoring the space quite carefully, both in the U.K.

and on the continent. Some of the EU opportunities are still applicable to the U.K.

companies, and we will continue to pursue those funding opportunities. They've been quite limited, but with increasing amount of attention from the government to high-tech sector and semiconductor industry in general in the U.K., yes, we believe there are going to be some additional funds available to us, and we will pursue that.

And the final question, you've clearly worked hard at the last year, seem quite optimistic. What are the top 3 things that excite you about Nanoco?

Yes. Just kind of thinking on my feet right off the bat.

The first one is I do think it's a diamond in the rough. I think that Nanoco is one of the very few companies, perhaps it's the oldest quantum dot company, which is still alive, and it's one of the few companies which survived through the years.

We only see perhaps 2 or 3 companies around the world pursuing these technologies because it's hard. And most others have been acquired or have gone bankrupt at this time.

I do feel that we are now finally in a position to capitalize on all the technology investment, all the complicated developments and all the IP, which was put in place and really become the leader in a fast-growing, very profitable market, which for us will start as image sensor and over time, other markets can be added to this. So that's the main reason.

I see that it's a tremendous technology, which is currently undervalued, and we can unlock that value. A couple of other reasons.

The team is great. It's a very dedicated team.

We have seen relatively low turnover. Just like many of you, our investors stuck with Nanoco, our team has been sticking around and really contributing to the company development through some really hard times, right?

So there's a level of resilience and optimism within the company because if we made it that far, we can definitely make it further where others have failed. And there's an element of technology here, which also makes me excited.

We are simply contributing to positive developments in the world, not to get too high horsey about it, but we are developing applications, which will help really improve our lives through automotive safety or some of the other applications, which this technology is able to offer. We have solutions which are more energy efficient, ecologically preferable to some of the legacy solutions and those which do deliver real value in a variety of markets.

For me, that's pretty exciting.

Yes. I'll just simply recap that it's my first full year, which I'm completing at Nanoco.

I feel quite satisfied with what we've done. It was a difficult task to pursue organic strategy development and implementation in parallel with the strategic options review, the CDX process.

I feel that we made very good progress on both fronts, and we're looking forward to updating the shareholders once that process -- CDX process is complete. And we will be in a position to offer the highest option value -- highest value option to the shareholders.

I'm looking forward to updating you on this as soon as we're ready.