Nanoco Group plc

Good morning. Good afternoon, everybody.

This is Dmitry Shashkov, the CEO of Nanoco. Joining me on this IMC podcast today is Liam Gray, our Chief Financial Officer, and we are ready to start.

We would like to tell, to take you through a brief update presentation, highlighting operational and financial results of the first half of 2025, followed by a Q&A, where we would answer some of your pre-submitted questions, as well as any live questions, which you would like to bring up. With that, I will start with a brief review of 2025 with a focus on strategy and operations.

First of all, on Page 5, I'd like to highlight that, overall, we had quite a successful 6-month period. If you recall, I was appointment as a CEO of Nanoco just a short time, before our 2024 final results presentation.

So, what I will talk about today effectively summarizes, my tenure with Nanoco of the last six months. We made quite a good progress with existing customers.

I will provide you some details. We also engaged, quite a few, new customers.

Some of them are approaching the stage of formalized contracts, which we should be announcing in a short quarter. In addition, we continue to invest in our device lab, and, it is by now, a fully equipped device lab, which provides very valuable and timely customer demos, for our image sensor market.

That investment has been completed. We also completed reorganization of the company, which made the team much more focused on commercial development, with a fewer production and some of the overhead personnel consistent with the current stage of the company.

That reorganization also gave us, significantly better cash runway, based on the reduced cash burn. We continue to work to exploit, additional value in our intellectual property.

While we are not making any announcements today, this remains an area of focus, and we will continue to identify additional opportunities to extract licensing revenues similar to the process we underwent with Samsung, about the year ago. And finally, we continued to make good progress with CDX, the advisor and an investment bank, which was retained in late 2024, calendar year 2024, to implement one of the important prongs of our strategy, which is to look for the new ownership for the trading business of Nanoco.

I feel that we've made a good progress across all fronts. And I'll give you some details as we go through that next page.

Please. I'll start with a brief review of the state of the markets and recent trends, which we see as rather positive trends in this market.

So, this is the composite chart reflecting our current view of all the quantum dots markets, which are relevant to Nanoco. We analyzed the variety of off-the-shelf reports, but we also combined those reports those which we found more credible with some of the additional internal knowledge.

And these numbers exceed the market estimates, which we have shown six months ago. This is now in millions of dollars, and as you can see across the five largest markets, listed on the right, we expect the market for quantum dot materials to reach approximately $1 billion in 2029 and far exceed 1 billion by the year 2030.

There is a variety of robust growth drivers behind that, and I will touch on that on the next page. We segment photo, we segment quantum dot market into nine different market segments, but in only five of those segments, we believe there's a substantial revenue generation opportunity for Nanoco in the next five years.

The remaining four segments we'll continue to watch, but they're not part of our business plan. And the segments are listed here.

They should be quite familiar to all of you. The primary focus is on the top two markets, flat panel display, and short-wave infrared image sensor.

But after conducting a screening process over the last six months, we identified three additional markets. Photo I take, agriculture and paints and coatings as areas where Nanoco could make small additional investments in commercial development with the promise of short to medium term product revenues.

By that I mean we only tackle projects and customers where we believe the revenue could be generated within the next 12 months to 24 months. So, the bottom three market segments fall into this category.

Listed on the right-hand side of the table is quite a broad variety of growth drivers which support these markets, and we're quite pleased with these developments. I will not go through all the bullets, but at the very high level in a flat panel display, we continue to see very robust growth drivers behind the current incumbent technology, which is QD quantum dot enabled liquid Crystal GDLCD.

This market is not reaching any kind of saturation. It's quite the opposite.

The growth rate in this market, which we have seen in the calendar year, 2024 is very, very high, north of 40% growth and very robust growth in that market is expected to continue. And then in addition to LCD to liquid crystal display, three additional technologies will contribute to growth including micro LG, and eventually electroluminescent displays.

Those will require a couple more years of development, but in the meantime LCD technology itself is continuing very successful run. Likewise, in the, image sensor market, the second one from the top, we see quite a variety of robust growth drivers.

Today, this industry is almost entirely driven by defense and industrial, QC processes, quality control processes. But right behind them, we have several markets and applications, which are growing quite fast of a small base.

That may include some of the wearable sensors, basically biomedical applications, various types of aerials surveillance, for nonmilitary purposes. And most importantly, the two large markets, which we expect to develop are automotive and consumer.

In our expectation, consumer market will fully unfold within two years and automotive within the next, three to four years. And those would-be high-volume markets, which will eventually make image sensor the largest market for quantum dot materials, in our estimation.

Next page, please. Yes.

This is, just to reflect on very recent news. It's dated April 15.

The leading, display consultancy called Counterpoint Research released their dedicated report for quantum dot materials. And as you can see, there's quite a dramatic growth, which was observed in 2024, and similarly robust growth of 27% to 28% is expected this year.

And what's particularly interesting is the commentary, which was provided. So, in the core market for television sets, the growth was largely fueled by, so called, mini-LED configuration.

And that is the configuration, which is essentially tied to quantum dots. This configuration is impossible to build with other technologies, and that's the configuration, which fueled that growth.

And second fact which we noticed, majority of the market is basically large and medium-sized televisions. But over the last couple of years, small but very rapidly growing segments of notebooks and high-end monitors, especially gaming monitors emerged.

And in both of those segments, the usage of quantum dots is growing even more rapidly than on the television site. You may have noticed the news, which came out around Christmas time that Apple for the first time, started to use quantum dot enabled monitors for their high-end MacBook Pro.

And that also shows the trust in that technology, which is now across the market, where at the very high end of the market, QD based monitors are now becoming commonplace, including Apple. Next page, please.

This is just a recap of our business model. I will not dwell on that.

This is exactly the chart we have showed, back in November. What I will simply state is that our business model remains the same.

We focus first and foremost on the sale of quantum dot materials, QD sale. That's the mid, middle business model of the three.

But in addition, in case of image sensors at the bottom, we are focusing on the sale of inks, which is highly formulated chemical compositions, which include quantum dots, but they also tuned to the application of quantum dot in the semiconductor process downstream from us. Likewise, in the flat panel display, in addition to QD sale, we are also pursuing IP licensing model for those existing supply chains where inserting Nanoco product sales is not practical from capacity or timing standpoint.

Next page, please. Again, this is a repeat.

The top part of the chart is what we presented in November of last year, and at the bottom there's a brief commentary how we've done on some of the strategy execution vectors. We have completed the restructuring.

Our monthly cash burn at this point is reduced by approximately 30% from 0.7 million pounds per month to 0.5. We reached that run rate in late January, and at this point, all the extraordinary expenditures are completed, and we are at the reduced cash burn rate since end of January.

We continue to invest in business development. Our stated intention was to build small, but far-reaching business development organization, we have that.

Our BD team is now on three continents. We have people based in East Asia, in North America, and in Europe.

We have hired a global head of business development who is U.S.-based. That's Jay Subramanium.

His appointment was announced back in December, and he's fully up to speed. In fact, we're making customer trips this week.

I'm currently in the U.S. proceeding on some customer visits after the industry conference.

We continued, we finished the build-out of device lab. It is now fully functional, and it delivers customer demos.

And finally, on the customer engagement, we have completed market screening in each of our priority markets. Those five markets which were listed on the previous page.

We now have a well-defined target list. We literally know every single company we want to be in contact with.

And approximately 50% of those contacts have already been successfully made. So, we probably covered half of the target list, and we, by the end of this year for sure, we're going to complete the outreach and we will have some form of dialogue and relationship with every priority customer on the list.

At this point, we have approximately 10 active engagements, and as those engagements formalize and result in various joint development or other types of agreements, we would be announcing them to the markets. Next page, please.

Now a brief commercial update. I will start with flat panel display.

We have completed market study with commercial targets fully defined. At this point, we engaged with both existing segments of the market, which is really liquid crystal display, as well as some of the emerging technologies, which in this case means micro LED or electroluminescent displays.

What we find quite favorable is that, up to last year, the majority of mainland China and parts of Taiwan segment of the industry, where utilizing cadmium-based quantum dots, the trend against cadmium-containing products is the strongest in Europe. It is still at the earliest stage in other parts of the world, but that trend is now noticeable.

And companies in China and in Taiwan are beginning to pivot towards cadmium-free products. That is the trend which is highly beneficial to Nanoco.

As you probably remember, we pioneered the move towards cadmium-free quantum dots. In fact, we own the trademark CFQD, which stands for cadmium-free quantum Dot.

This is how the company has been known to the industry for the last 20 years. And China and Taiwan together represent quite a substantial portion of the production capacity.

And this type of transition gives us unique chance to insert our cadmium free products in the established supply chains now supported by that emerging environmental trend. On the image sensor, shifting gears towards our second main market.

We have entered the second year of the joint development agreement, with a large Asian chemical customer. We met with a customer and we discussed that we have successfully achieved all the milestones.

We are now in active discussion, regarding the Phase 2 of this work, which will formally commence in the fall of 2025. But the results to date, demonstrated both to us and to our partner that the technology is viable, that the development process is proceeding well, and our partner is ready to invest the next level of resources to bring this closer to commercial introduction.

Coincidentally, we are in advanced JDA discussions with the second customer for that technology. It is another Asian, large Asian chemical company, I guess, by coincidence, but also because image sensor as an industry has been significantly developed in Asia, in the past.

So, we're in advanced negotiations of a similar second joint development agreement, which would target the same shortwave infrared sensor technology. And you know, pipeline, as I mentioned, we have number of active engagements.

Companies from other parts of the world will come into the fold, and we will be announcing those as well, as those relationship proceed to the premium stage. And in other markets, as I mentioned, our objective is not to reach out to really broad variety of customers.

It's really to select one or maximum two engagements in each of those markets, if we believe that, it has the revenue generation potential within the next 12 months to 24 months. That's exactly where we find ourselves in the markets for photovoltaic, for paints and coatings, and for agricultural applications.

We also continue to write papers and pursue some of the IP in the areas where we saw an opportunity to further cement our IP leadership. And we as a company significantly increased participation in the industry conferences.

I think we've been to four different conferences in the 6 months, in some active form, either as a sponsor or as a presenter or some combination thereof. And the results were quite obvious, very, very positive.

I, last week, our team had a chance to present our findings at the image sensor conference in the U.S., and we generated significant interest. And some of the new commercial contacts happened right there at the conference.

So, we will continue to do this, as this is a effective low-cost way to publicize our achievement in this market and to, you know, reassert our leadership on the image sensor technology. Next page, please.

Yes. We also put together a demonstration camera, working with an industrial partner called Emberion.

It's a small, Finnish and British company, focusing on infrared sensor, and sensor cameras. They fabricated one of their commercial cameras utilizing, Nanoco Quantum Dots.

And the picture here, it just illustrates the capability of such camera, for a very simple configuration, where we have the wide band pass filter. On the right-hand side, as you can see, the yellow label says between 1000 and 2000 nanometers.

When the camera is tuned to that range, it can easily see through a pretty dense smoke. You see it on the left in a conventional iPhone camera.

You can see very clearly through the smoke. You have high contrast visibility of the person seating all the way to the right.

You only see the shoulder of the person. You can easily see the plumes of flame, which otherwise are obscured by the smoke.

This is just an example of the capability, which such infrared image sensor, gives us to be able to see through adverse conditions, which of course, is relevant in variety of applications, automotive, various surveillance applications, military, et cetera, et cetera. Next page, please.

Last but not the least, I'd like to give you a brief update on the process with CDX, our advisor and an investment bank. The project is well on track since it was launched.

The active phase began in January of this year, through that phase one, we went through thorough data gathering. All the data was systematically placed in a virtual data room, VDR.

We completed several market studies, and results of this market studies were made available to potential investors, covering specifically QD market as a whole, as well as deep dives in the image sensor and flat panel display market. We put together a thorough confidential information memorandum of SIM.

And most importantly, we completed a pretty expensive outreach, more than two, well more than 200 targets globally covering every relevant geography on earth, as well as every relevant asset class, meaning that we reached out to strategic investors, financial investors, various family offices, sovereign wealth funds, private equity companies, venture capital establishments and anywhere in between. We also developed a detailed valuation model, which was made available to potential acquirers so they can verify our assumptions about the market growth, about the profitability of the company and things like that.

And throughout the first quarter of this year, we went through numerous introductory presentations, some of them online, many of them in person. There was significant amount of activity involved to give everybody exposure to the company and to the company management, even at this early stage, given the niche nature of the markets and the relatively small size of the company, we felt this was essential to give potential interested parties this type of access.

At this point, we're entering phase two, which means we're gathering preliminary bids known as, IOI syndications of interest. Those bids would be collected during the second calendar quarter of 2025.

And towards the second half of this quarter, we'll begin in-depth engagement with one or more than one finalist. That would involve the normal mix of activities at that stage, such as site visits, management presentations, with a broader management team, expert sessions on the topics of interest and other forms of due diligence, which potential investors will conduct using their chosen consultants and third parties.

We aim to have the final agreement negotiated sometime in the third quarter. And with a little bit of luck, we should be at the finish line of this process beforehand of this calendar year.

This is, again, consistent with our original intention. I know that some of our investors expressed, I would say frustration or impatience, with the pace of the process.

But in my mind, in M&A, rushing through this process would not be wise. Our objective is to receive maximum value to the shareholders for what the company has to offer.

And given the highly technical nature of our products and, complicated dynamics happening in our end markets, this is not a process, which any company will go through in a matter of weeks. It takes a little bit of time.

And we are well advised by our partner, CDX, to go through this process in a systematic fashion, provide potential investors with a variety of technical information, to enable them to make a well-qualified decision how much the company is worth. So, with that, I think this is my last slide.

Let me pause and pass the baton to mister, Liam Gray.

Thank you, Dmitry, and good morning, everyone. And moving on to our first slide, this shows some financial highlights for the period ended, the 31st of January 2025.

Performance for the period was in line with our expectations with revenue falling by 13%, when compared with the same period in the prior year. This fall in revenue is due to the cancellation of the contract with the European customer.

This then had a knock-on effect on adjusted EBITDA, which has reduced from EUR0.7 million in the prior year to EUR0.5 million in the current year. We did complete the promised return of capital to 33 million of shareholders.

At the start of this financial year, we had 1 million left to buy back, which is now fully complete. As mentioned previously, following the cancellation of the contract with the European customer, we did implement a restructuring program, and that's reduced our gross cash cost base before revenue from approximately EUR0.7 million per month to EUR0.5 million.

However, it's important to note we do retain all our core capabilities and can expand quickly to meet either product or services demand. And finally, we finished the period with EUR15.5 million of cash in the bank with no external debt.

This number was artificially low at the time due to adverse working capital movements. And as referred to in the results RNS, we had cash for around EUR15.2 million on the 4th of April 2025.

So, moving on to the next slide. This is our summary income statements for the current and comparative prior period.

As I mentioned previously, there is a fall in revenue, which has impacted gross profit and reduced this from EUR3.6 million to EUR3.1 million. On the cost base, if you take the R&D investment line and the other administrative costs together, you can see they've reduced by EUR4 million compared to the prior year.

And we expect further cost savings in H2, following the completion of the previously announced restructuring. Other interesting items referred down the table is EUR0.2 million of cost, relating to the Requisitioned General Meeting, we held in December, EUR0.2 million of cost, relating to the ongoing CDX process, and EUR0.1 million, relating to the restructuring which we completed.

We then have our EUR0.5 million of non-cash SPP charge, which is comparable with the prior year. In H1 of FY '24, there was a large GBP2.7 the FX gain, which is related to a hedge we saw out on a Samsung receivable, which is where that GBP2.2 million comes from.

Depreciation is ahead of prior year due to the investments in our device and analytical labs, and we also received EUR0.3 million of interest on our cash balance in the period. All in all, this takes you down to a loss after tax of EUR1.0 million, compared to a profit of EUR1.8 million in the prior year.

So, just moving on to the next slide. This reconciles our movements in cash in the period.

So, we started the year with EUR20.3 million. And then, we have our adjusted EBITDA of EUR0.5 million, which is offset by the cash exceptionals of GBP0.5 million.

We then have to remove our deferred revenue. This is non-cash revenue because it's been paid up front.

And for H1 this is GBP3 million. We don't have our lease liabilities of GBP0.4 million.

And the previously mentioned retainer capital, the additional GBP1 million buyback. Then we got some other small movements, 4.4 million, which gets you back to our closing balance of $15.5 at the end of H1.

So, in summary, we did mention our full-year revenue will outperform market forecasts. The original forecast for our full-year revenue is GBP6.6 million.

It's now been upgraded to GBP6.9 million. Our gross monthly cash costs are stable at GBP9.5 million, and any future commercial wins will flow through to both profit and cash.

Our device analytical labs are fully operational. These are the investments we made last year in our capital, in our capital expenditure, our infrastructure, and we are getting some good results from our lead sulfide indium arsenic, and Indium and IDE devices.

The business development team, as Dmitry mentioned, is well established. Got a lot of experience and they are now attending various conferences where, along with some of our scientists, they're showcasing the work and the results we're achieving.

And finally, just a small point on cash. There's no significant further capital requirements, and the cash from waste is secure for the short to medium term.

And with that, I'll pass you back to Dmitry to summarize.

Thank you, Liam. In summary, I'll make three general points.

The first point is that we continue to view our market situation as quite favorable, as we shared market supports quite significant growth in quantum dot applications over the next five, six years. More importantly, in the immediate future in the calendar ‘25 and in ‘26, we expect to see quite dramatic expansion in you know, our most important target markets in a flat panel display and in the image sensor.

On top of that, we see meaningful increase in applications and industries, which are looking to utilize quantum dots. We have a number of early engagements in the segments outside of image sensor and outside of flat panel display.

And those are new to the company portfolio. And we continue to explore different investment scenarios which will come through the CDX process.

So, from the market expansion standpoint it's a favorable picture. The company is now very different from the company just a short 6 months ago.

We now have not only the new CEO but also the new Chairman of the Board with very, very relevant board experience and industry experience, as well as a new board member in G. Rame coming in and Jalal Bagaley both coming in during the calendar 2024.

We also have the new commercial organization with a global head of business development, who is U.S.-based, but covering all our potential customers worldwide. We're making good progress with both existing customers and we are gaining new customers we’re enriching our pipeline literally every week.

I sometimes reflect on a famous quote from Woody Allen, who said at some point that 80% of success in life is just showing up. And I think what we observe right now is as we start to show up at customer visits and conferences and publishing papers we see very strong response from potential customers.

And this has been a fruitful process over the last few months. And overall, the company remains a significant upside and a significant opportunity.

We are right-sized for growth. We have meaningful cash runway now, meaningfully longer, with the reduced cash burn.

We already have high volume production capabilities for sensor and for display markets, and those could be turned on for other markets as well on a pretty short timeline, when necessary. And we continue to see further opportunities to leverage our IP.

As we stated before, these opportunities are quite, quite significant for us in the future. So, all in all, quite a positive 6 months, and we're looking forward to continue to update the shareholders, as we're making progress along these lines.

This is the end of the formal presentation. And at this point, we'd like to cover some of the questions.

We have a handful of questions, which were pre-submitted. We'd like to start with those.

In the meantime, please feel free to add additional questions using Q&A functionality of the platform, and we will go through them in the order received. Liam, would you please start with the pre-submitted questions?

Yes. So, the first question we received is quite lengthy, so just bear with me.

The outcome of the strategic review was given to shareholders almost 6 months ago, with the disposal of the operations and IP being given as being in the best interest of shareholders. To this end, CDX had been appointed to undertake a process at pace, to undertake that procedure came.

We are now told that the engagement is progressing at pace, whilst there might be initial proposals from potential bidders during the summer. What is the board's opinion of what at pace means, and is the board's opinion committed to deliver the outcome set out in the review, or are we really just going through the motions?

As it appears zero urgency in delivering strategic aims set out, and the complete, like, a timetable of pace, if you're dragging out a process that is not attracting interest rather than delivering anything at pace. Does the refresh board still believe selling the assets would be the best outcome for shareholders, or are we just going through the motions of a process in the background?

Yes. Thank you, Liam.

Yes. Look, I sense the frustration and the impatience, which is quite evident in that question, right?

But I will answer in two parts. There are really two questions.

Do we really believe that this is the right way of moving fast enough in that direction, if we truly believe it? And the answer to both questions is yes.

So, all of the board is quite united in the view that finding the new ownership for the operating business is absolutely in the best interest of the shareholders and in the best interest of the company. If we didn't believe that, we wouldn't go through quite extensive and laborious moves of identifying the advisers, doing all this quite substantial prep work, which is needed to launch an M&A process.

We truly believe that this is the path to higher value and to a stable future for the company, as well as the best return to the shareholders. If we didn't believe that, if we wanted to shut down the company, and simply distribute the cash to the shareholders, the time to do that would be, probably, 6 months ago, without wasting all that effort and the additional cost, which we have to incur to get the process going.

So, we absolutely deliver it. As far as the pace, the second part of the question.

Well, for me, a pace simply means as fast as we can go through the process without sacrificing the quality. Again, there are few peculiar elements of that process, which make it not fit for kind of rapid pace, quick fire sale.

First of all, if we want to receive any value for the company, fire sale is not the right way to do it. But to even understand what value Nanoco may have for some of the potential investors.

We are a relatively small company. We operate in several markets.

All of this market are rather technically complex in their nature. If you look just in the variety of technologies involved in image sensor or in a flat panel display, for any investor, even as sophisticated as technical investor, there's a lot to unravel.

The strength of Nanoco relies on our intellectual property. But to assess that intellectual property is no small task.

We have north of 250 patents alone. And there's value in the patents, but, you don't simply take this on faith, right?

People need to do the proper analysis and make the judgment how much the IP itself is worth. So, all of the steps take time.

In addition, we have quite a broad outreach. As I mentioned, we reached out to all the relevant regions of the world, including North America, Western Europe, East Asia, Middle East to some degree.

In some parts of the world, especially in Asia, decisions like this are not taken lightly. The decisions require time and various levels of approvals, and that frankly, to me dictates the pace.

We do not want to rush through the process with some potential bidders and leave others behind. So, to go at the comparable pace for all of our, potential bidders, we are where we are at this point, collecting second round bids approximately, sorry, collecting first round preliminary bids, approximately three months since the launch of the process.

For me, that's a pretty reasonable pace, and we will try to go as quickly as we can, but again, without sacrificing the quality of the process, which in the end, belief will lead to the highest value proposals. So, sorry for a long answer, but I feel quite strongly that we are doing the right thing.

That rushing through this process would really defeat the purpose. We are going at a good pace.

We are all motivated not to drag this process any longer, because it is a distraction. It is a substantial drain on our management resources.

I would much rather focus on growing customer sales, but at least 50% of my time budget is on this. So, we are all very motivated to move fast, but not faster than the quality process would allow.

Next question, please.

Next question is, will we ever learn the identity of the infringing companies in display? And if so, when might that be?

Yeah, so of course, as we go through specific moves related to enforcing NOAP, we'll inform the shareholders as we should, as to who they are. I mean, this is a relatively small industry.

You can, make up your own mind. But we're not going to accuse anybody of any IP violations until we have a specific move which we can undertake and then publicize to the markets.

But yes, the identity is, are very well known. It's a small industry.

We have conducted number of device teardowns to know exactly which technology is used by what manufacturer. So that knowledge exists within the company, and we are acting on that knowledge as we speak.

Okay, thank you. Next question.

Where might be the earliest the company would expect to see commercialization of QD based micro LED technology?

Yeah. So, this is one of the technologies we're involved in, based on our stage of development with the customers I would say approximately two years is about the earliest.

And it usually doesn't have, to do only with quantum dots. The launch of the technology requires all parts of the technology to work in concert.

We only provide, effectively one layer into that novel display architecture. But in that stack, as we call it, in technical lingo, in that stack, every layer interacts with its neighboring layers, and all of those interactions need to lead to a high performance at a low cost.

So, we only control one small layer in that stack, which is the layer of quantum dots. But other layers need to work in concert to deliver the performance.

We are not a display specialist. So, at this point, we are effectively at the mercy of our customers, how quickly those integration challenges can be addressed.

That's why I think that, two years is doable, but unfortunately, we do not control the timeline. It is controlled by our customers.

Okay. Next question.

How long would it take to reinstate the mothball sensor materials facility?

Yes. We went through this move, knowing full well that one day we might need it.

And restoring the facility to the full production capability is a matter of days, not weeks or months. We would basically need to restart the process, go through the necessary QC, steps to assure that the material coming off the production line meets the specifications, and we're back in business.

Practical limitations on time would be simply to rehire some of the production staff, which was reduced during the current time. This would take a little bit longer than a few days.

But in most of our customer relationships, including the one, which led to the construction of this facility, we rely on six-month, lead time for the large commercial orders. Again, in this market, large orders don't come unexpectedly.

We usually have time to prepare. So, that's why we were comfortable to proceed with the mothballing knowing that turning it back on, is a very simple and straightforward process.

It doesn't take long at all.

Thank you. Next question.

Please can you confirm there have been no meaningful engagements at potential bidders, who have subsequently disengaged?

Yes. So, two-part questions.

I cannot confirm that there have been no meaningful engagements. There were plenty of meaningful engagements.

Our pipeline, M&A pipeline leading, towards the nonbinding indications is quite robust. I count all of them as meaningful engagements.

These are companies, which are spending substantial resources of their own personnel and hired consultants to attend, to various presentations, to spend time and resources in the virtual data room and invest, resources in various ways. There's a good meaningful engagement.

So, to the first part, we have good number of meaningful engagements. That's why we're comfortable moving to the preliminary bid stage.

As far as dealers who subsequently disengaged, yes. We have fled to those as well.

Again, by the nature of the process, we cast a pretty wide net, well north of 200 companies. Nanoco is a highly specialized enterprise.

We, work in a very particular technology related to quantum dots. We serve very specific set of markets of highly technical nature, and that would not be a fitting investment for every potential bidder.

So, yes, large number of the companies disengaged. That is an expected outcome.

This is why we cast a very wide net, so we don't miss anybody. But as a result, large number of companies have taken a look, disengage, and that's okay.

Thank you, Dmitry. Next and final pre-submit question, on a scale of one to 10, how likely do you think it is an SPA will be signed by the end of the calendar year?

Yes. Sales and purchase agreement.

So, I think it is quite likely I will not be able to put a scale again. M&A is a tricky process.

Most of you have been exposed to it in some form way or another. It is never guaranteed.

What I do know is that we are engaged with the right advisor, which is CDX. We have comprehensive data set, which is well presented and well explained to the potential investors.

And we have a number of interested parties who I expect will be submitting indications of interest in the coming weeks. So, we have all the ingredients to have a successful process, but in the end, I cannot give you a percentage if, you know, if it's, it's a hundred percent when it happens, it's 0% when it fails.

But I cannot predict on a scale of one to 10, I think we're really well positioned to achieve that. We've done all the right things leading to this event to be successful.

Okay. Moving on to the live questions.

This one is a quote from RNS. In addition, we have completed a comprehensive market screening for other QD SWIR opportunities and down selected approximately 10 companies as business development targets for this technology.

Please explain what this means.

Yeah. So, image sensors is a well-established industry.

It relies on various existing technologies, silicon based and compound semiconductor-based technology. In that universe there's maybe a hundred companies, which plays some role in running these incumbent technologies.

As I mentioned, they're not based on quantum dots. The quantum dot enabled sensors is a new technology, and out of that universe of, let's say approximately a hundred companies, between 10 and 15 of them have an active program to develop quantum dot-based sensors and bring them to the market as an alternative technology to existing methods.

It's not obvious who these companies are. Quite often they don't announce their intentions publicly until they have a commercial product.

So, the market screening, which we went through, was to identify small handful of companies who have companies large and small, based in all, different regions of the world. Companies which have an active development program aiming to bring quantum dot enabled sensor to the market.

Our goal as a supplier of quantum dot material is to engage with this company and to become their supplier of choice at the early stage. So, by the time they go to commercial scale, they source their quantum dot materials from us.

And that's exactly what we've done. Let's say out of maybe 15 companies to 20 companies, we are well engaged with about half of them.

And we intend to proceed with the remaining half. Hopefully that answers your question.

Thank you, Dmitry. The next question, hello and thank you for the presentation.

Please, could you describe in layman's terms what elements of the business are being sold under the CDX process and which are being retained? Also, please, can you explain what form the listed business will take after the sale, and what functions will it perform?

Thank you.

Yeah, maybe I'll answer the first half and Liam, I'll ask for help with the second half. So, what has been sold is very straightforward.

All the operating assets of the business, which are embedded in the two legal entities, which is Nanoco Technologies, PLC and Nanoco USA or Nanoco Inc, which includes all the hard-physical assets, production and R&D equipment, all of the headcount of the company with exception of three executive directors, the CTO, CFO, and CEO, and all the intellectual property, and other intangible assets, which are embedded in the company. So, the only thing which is not sold is cash, excess cash, which is in the bank.

And what will remain after the sale, after a successful transaction, is the top-level entity, which is the Nanoco Group PLC, and all the remaining cash to be, basically treated at the shareholder. What will happen with the remaining cash and the Nanoco Group PLC would be up to the shareholders at the conclusion of the process.

And Liam, maybe you can comment.

Yes. So, at that point, we've sold the full trading entities.

Nanoco Group PLC would be a cash shell, which retained the cash. Share price would a mark cap with approximate to cash as well.

We'd have no interest in running a cash shell. We'd likely try and return the cash to shareholders, and maybe even get a premium for the listing if possible.

But, yes, there'd be no other purpose for the shell at all. Hope that answers your question.

The next question, could you comment on how long Nanoco's key patents are valid for, please, across your key market and applications?

Sorry. Liam, I lost sound for a second.

Can you please repeat that question?

Yes. So, the next question was, could you comment on how long Nanoco's key patents are valid for, please, across your key target markets and applications?

Yes. Absolutely.

So, we've utilized a small group of so-called core patents during the Samsung litigation. Those are some of the older patents of the company, which were filed between 15 and 20 some years ago.

Those patents begin to expire as early as 2025, and their expiration date is staggered, through '26, '27, '28, and '29. Again, these are just the earliest patents of the company, which cover the fundamental synthesis process for quantum dots.

Subsequent to that, additional 250 patents have been filed covering both the fundamental synthesis method and the application, applications of quantum dots, specific to display image sensor and some others. Those patents have their life anywhere between, I would say, 5 to, 25 to 15 years of life left.

And the claim structure in those patents and such that they are intertwined with the earlier foundational patents, which were utilized in the Samsung litigation. This is a long way of saying, the earliest patents will begin to expire over the next five years, but all the subsequent patents are closely intertwined with those solar patents.

They will continue to provide continuous coverage for all relevant Nanoco applications for many years ahead of us.

Thank you. Next question.

If Apple are using quantum dots in their laptops, why aren't Nanoco supplying dots, given the history between two companies?

Excellent question. So, our relationship with Apple, well, it wasn't openly publicized, it relates to image sensor technology.

We did not have preexisting relationship with Apple, when it comes to LCD liquid crystal display technology. So why aren't they sourcing dots from us?

I cannot answer you this, but we are analyzing the product as to how it's made and by whom. And once we come to that conclusion, we will establish if there's a possibility to switch that supply to Nanoco or to pursue it in some other way.

Thank you. Next question.

How recent was the Imberian demo you mentioned? I note this was using lead sulfide generation one quantum dots, and that's at least one competitor to Nanoco announced a similar collaborative demonstration with the same company as long ago as 2021.

That is a very accurate observation. So, the demonstration camera with Imberian is coming from this year.

In fact, we are building a couple of those cameras for ourselves so we can use them for demonstration purposes. You are correct that in the early prototypes supply of another supplier was used to build those early prototypes.

Our intention is to work with Imberian to make Nanoco a qualified supplier of this first-generation materials and also to collaborate with them on any future improvements or next generations of these materials. It is a generation one.

It is lead sulfide based, however, that is the dominant material used in very small volume, but used in the earliest models of those QD cameras. As the cameras move into other applications, especially consumer and automotive, we believe that substitution or different material choice will prevail.

And for that we have, generation two and generation three materials based on heavy metal free quantum dots, indium arsenide and indium antimonide based quantum dots. But for the first generation, which is predominantly used in defense and industrial applications lead sulfide materials will continue to have quite a good runway.

So, we will make an effort to become the supplier of choice to Imberian. And that is one of the reasons why we build those demonstration cameras with them.

Thank you, Dmitry. Next question, if not a rude question.

Why did you Dmitry and Jalal join what was essentially a very small company?

Not a rude question at all, and both Jalal and myself received that question. And I think we answer in very similar terms.

We both believe in the potential of Nanoco. We both see it as perhaps a diamond in the rough, the company with absolutely tremendous IP and technology and unlike some of the other companies in the space, also significant production experience, strong quality systems and really mature operational capabilities.

The only piece which the company was missing, up to, last year when Jalal joined sometime in spring and I joined in the fall of that year, is really the business development or the commercial capability. Jalal, has a long history of commercial development.

He managed and run, and governed companies along the commercial development path quite successfully. And he saw Nanoco as an opportunity to do exactly that on a small scale, but in a technology, which is really hot and interesting and emerging, as we speak.

And frankly, I saw the same. And it is my passion and interest to grow the companies utilizing commercial toolkit.

This is what I did for the last 20 years of my life in various electronic materials, and I saw this as a potentially very interesting opportunity to do that back in October. Now, 6 months under my belt, I'm only reassured that the opportunity is very real, very near-term.

So, that's what motivated me.

Thank you, Dmitry. Next question.

Why are retail investors kept in the dark as to the value of the company? The share price performance, since the EGM has been terrible.

Have you any explanation?

Yes. What, would you like to take this one, Liam?

Yes. So, it's optioned our intention to keep any shareholders or investors in the dark.

We publish news when we can. We've been working very hard over the past 6 months on both, as Dmitry mentioned, the commercial developments, but also the CDX process.

And during that, we have tend to be a bit more tight lipped than usual. But obviously, it's a very intensive and very confidential process.

So, it's not the intention to keep shareholders unaware of what's going on. It's just that the processes run have been involved a lot of work.

In regards to share price, it's a very good question. Historically, the Nanoco hasn't delivered on what it said it will deliver.

And we understand the share price and investor apathy. Obviously, we have tried to refresh things.

Dmitry, Jalal, and Jay have all been brought in to try and drive the commercial value of the business. And hopefully, them efforts will be reflected in any potential bids or investments in the business going forward.

So, next question. Sorry.

I might have missed it. Does the current tariff war and pinch on manufacturers provide a strong opportunity for Nanoco to enforce IP rights on other infringers?

Yes. Not in an obvious fashion.

To be honest, I don't think we know the impact of the current geopolitical situation and the tariffs on the company. One thing which is clear already is that a lot of our customers often become distracted with some of the near-term priorities, frankly, when they don't know where they're gonna source their steel or aluminum, worrying about some new technology in quantum dots maybe, maybe takes a back burner.

We haven't seen much of that distraction impact our projects, but it is a constant background of all our customer conversations. With regards to IP enforcement, I'm not sure there's any direct connection, but the IP enforcement opportunity does remain.

I think the best environment, for that IP enforcement is created by the fact that the quantum dot LCD market continues to grow at a very robust pace. Three market segments, which is, you know, started with televisions, but also now expanded to notebooks and high-end monitors.

So, I think that's the best market driver for our IP.

Great. Next question.

Are you still confident that it's impossible to manufacture CFQDs at scale without using Nanoco's pattern processes?

Yes, we are, for specific types of quantum dots, which are difficult or impossible to manufacture, utilizing other techniques, right? Other techniques may be better fitting for some types of quantum dots and not for others.

What we have proven successfully in the Samsung litigation is that very specific type of quantum dots, which, you know, we branded CFQD. It really stands for indium phosphide-based quantum dots, and the same argument expands to other quantum dots with similar chemical nature.

In chemistry terms, they would be called three-five compounds. And other compounds of that type include indium arsenide, and indium antimonide the two species which we are now commercializing for the image sensor.

So, for those quantum dots, we are highly confident because the validity of this patents has been challenged and successfully proven in court. We had very critical expert testimony to that end.

But for the other types of quantum dots, there's many different types. It is possible that some of the others could be synthesized at scale, utilizing other methods.

The quality may not be as high as the one with our method, but for some applications it may not matter. So yes, generally the principle applies, but it doesn't apply to every type of quantum dot for every application.

What's important for us is that we believe it fully applies for the flat panel display where exactly this type of quantum dots, indium phosphide-based quantum dots remain the main dominant species used in any significant quantities.

Okay. Just a few questions left.

Is it, it is my understanding that the European customer chose to terminate the joint development project and not proceed further? Is the customer in a position to exploit the outcomes of the project independently on Nanoco at a future date?

Or are the board confident the current IP coverage could, would prevent this?

So, the customer is free to come back to this technology if they wish. We don't believe they will, but if they do, they will go through us as a supplier based on jointly developed IP in this case, not in the form of patents, but in the form of know-how, leading to the production of very high performing image sensors in this case.

We haven't seen the desire from the customer to come back to this market. But at this point we have plenty of others, broad swath of other companies which want to go into this market as fast as possible.

So that's it.

Okay. This is not the first presentation I have listened to.

However, it has a similar ring to it. Lots of positive future projections, but no real improvements in commercial contracts.

Is it another jam tomorrow conclusion?

Well, so we have one contract which was announced and we are in the second year of that contract, and we expect to extend it and expand it in the fall of 2025 when it's up for renewal, we would be announcing the second contract in a short order, I think in a matter of days, not weeks. And we would be announcing more later this year.

I don't know how many we will announce later this calendar year. But we have approximately 10 companies in the pipeline, each of them with a possibility of a joint development agreement of similar nature.

So, I would say, yeah, I mean, I wish I could show you the specific production orders but the market is not developing fast enough for us to show those production orders this year. So, what we can show you is the evidence of strong customer engagement, which in our case typically takes form of joint development agreements.

And yes, we would be adding the second one and later in the year, I hope to add at least a small handful of additional ones. But that's the stage of the market which, gives us the type of news which we can publicize.

By the time we’re in calendar year 2026, I do believe we will have low volume production orders for these materials. And of course, we would publicize those as we are able to.

Thank you. Next question.

Your report mentioned the possibility of quantum dot sensing in mobile phones. Can I ask if this could still happen, given that the partnership with STMicroelectronics has ended?

Absolutely. I think that technology, first of all, that technology had intrinsic value.

Just to remind everybody why, STMicro was looking at that technology on behalf of Apple was to dramatically improve the 3D face recognition, utilizing quantum dot-based sensors. What, when I say dramatically improve, not only it scans the face in 3D, this technology is able to see below the skin.

It can actually see the structure of your own blood vessels and things which are not visible in visible light. As a result, this technology is absolutely fake-proof.

If you recall in the earlier versions of face recognition, you could literally pose a high-quality photograph of a person in front of the phone and the phone would open. This is no longer possible.

The reading is now done in three dimensions. And in case of infrared sensor, you would be able to see below the skin and have a really unique read of the 3D facial structure, completely unfakable.

In addition, it's much more reliable, less prone to errors. It would work in a low-light environment and would utilize less energy to illuminate the face.

And because the face illumination is done in a infrared and visible region, it's completely unobstructive or un, it doesn't bother anybody, and it doesn't create any inconvenience. So, technology has a number of very positive merits to it.

STMicro, for reasons unrelated to quantum dots, decided not to pursue this technology, but we know of plenty of other companies, which are pursuing this technology on scale. I will just remind everybody, the news which was public, back in December of last year.

Sony Electronics announced a large program to develop those quantum-dot-enabled image sensors. They are pursuing them, specifically for consumer applications.

That's the strength of Sony through the years. And they have believers that this would be a high-volume market.

There are others like Sony, which are pursuing this technology on a large scale, targeting consumer applications first and foremost. They just didn't announce their intention publicly quite yet.

But yes, I fully believe we will see that in cell phones than other consumer electronic devices in, I would say, in one or two years.

Thank you. Second last question.

If business development is the final part of the jigsaw for Nanoco to maximize on all the developed products that it has access to, why does it now make sense to sell after 20 years of being the best company in the world of CFQD?

Yes. I think, yes.

I think Nanoco as an asset, belongs in a different form of ownership, right? Simply being publicly listed on the London Stock Exchange is just not the right form of ownership, given the type of investors, and the type of attention, which the company can attract on this very large trading platform.

Whereas, within the private hands or within the hands of a strategic acquirer, the company can receive full support of a larger corporate entity, ability to invest in some of the longer-term technologies, which under the current listing is really limited for us, based on, I guess, the collective sentiment of our existing investors. That's why I think this is the right move, and the time to do it is now when the company would require additional investment in the longer term, to build up that business.

Thank you, Dmitry. And the final question, just so I'm clear, when the CDX process reaches a conclusion, which entity retains the ability to pursue potential infringes?

That ability will stay with the operating business? So, the new owners of the company, once we successfully conclude the CDX project will have the ability to pursue not just the product sales, commercial product sales, which is the main business model of the company, but also the IT infringement and the IP licensing program which would come as additional source of revenues.

Our business case to potential investors includes both the future licensing revenues as well as the future product revenues for them to evaluate the total value which Nanoco operating business can offer.

Thank you. And that was the last question.

I think we're all done on Q&A.

Excellent. Thank you, Liam.

I want to thank everybody. We ran a little bit over one hour, so thank you for being patient.

It's our pleasure to update you. We'll continue to do so.

I believe, well, I hope that it was evident that we are not just hoping for a brighter future, but we see a lot of positive developments in the last 6 months as we execute the strategy, which was announced in the fall of 2024. We'll continue to execute on this dual track with CDX process reaching the second stage and the bidding stage during the second quarter.

And with the commercial development continuing to grow and expand our pipeline, and engage with a broader range of customers on the commercial side. We are looking forward to updating our shareholders as we make progress in those two critical dimensions.

And we will be talking to you again in 6 months for sure. But we'll be making ad hoc announcements as we're able to regarding CDX process and the commercial development as it happens.

Thank you very much for your attention, and have a great day.

Thank you, guys. That's great.

On behalf of the management team of Nanoco Group, plc, we would like to thank you for attending today's presentation.