Mr. Eric Eyerman reports

CALIFORNIA NANOTECHNOLOGIES ANNOUNCES Q3 2024 RESULTS

California Nanotechnologies Corp. had record quarterly revenues of $1,159,234 (U.S.) for the quarter ending Nov. 30, 2023. This represents an increase of 177 per cent compared with the same period last year. Net income for the quarter was $513,897 (U.S.) compared with a net income of $64,801 (U.S.) in the same period last year, while adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $426,686 (U.S.) compared with $145,310 (U.S.) in the same period last year. Diluted earnings per share for the quarter increased to two cents compared with zero cents in the same period last year.

Adjusted EBITDA showed significant improvements due to higher revenue generation and improving efficiencies at the current scale of operations, which was partly offset by professional fees related to the recently closed non-brokered private placement and shares for debt exchange. Net income also saw improvements for the reasons above and benefited from an unrealized gain on share purchase warrants. The financial statements are available on SEDAR+ and on the company's website.

"We are thrilled to announce yet another record-breaking quarter, marking the first instance in the company's history of surpassing $1-million (U.S.) in quarterly revenues," stated chief executive officer Eric Eyerman. "After closing our first equity issue in almost a decade, we expect to be better positioned to execute on our growing pipeline of opportunities in the 2024 calendar year. The next 12 months will be an important period as we aim to capture new opportunities and make key growth investments."

The increase in revenue for Q3/fiscal year 2024 was attributed to both the continuing ramp-up of research and development manufacturing programs for new and existing customers and two spark plasma sintering (SPS) equipment deliveries, valued at $275,000 (U.S.). The green steel cleantech customer continues to grow and is the largest account to date with other customers also increasing their scope. Furthermore, California Nanotechnologies does not foresee any further SPS equipment deliveries until FY 2025, with an outstanding purchase order from the University of Connecticut worth $344,000 (U.S.) pending delivery in the mid- to late FY 2025.

Gross margin was slightly weaker due to the lower margins on equipment sales. Profitability increased due to higher revenues, improving operational efficiencies and an unrealized gain on share purchase warrants, valued at $198,973 (U.S.). This profitability was partly offset by professional fees relating to financing costs in the amount of $79,729 (U.S.). It is anticipated that the adjusted EBITDA and net income margins could fluctuate over time as the company invests in overhead expenses such as capacity expansion and business development to drive potentially higher future revenues.

As previously disclosed, California Nanotechnologies is in the process of identifying potential new sites for its production facilities and headquarters. While the company is exploring different options, California Nanotechnologies believes this initiative will be a key step in addressing the immediate and future manufacturing capacity needs of its customers. In addition, there are several pieces of cryomilling and SPS equipment which have been purchased and require additional space to be put into production.

Subsequent to the quarter, the company has paid $120,000 (U.S.) toward its borrowings from Omni-Lite Industries Canada Inc. Similar to last year, this constitutes an advance payment encompassing the 12 anticipated $10,000 (U.S.) principal repayments slated for payment between March 1, 2024, and Feb. 28, 2025. California Nanotechnologies continues to reduce its overall debt and believes that this strategy is necessary to support a growth-oriented technology company.

Lastly, California Nanotechnologies has amended its investor relations service agreement with Otis Investor Relations Inc. to reflect an adjustment in the monthly service fee, from $2,525 (U.S.) to $4,000 (U.S.), effective Jan. 16, 2024. This change mirrors the expanded scope of services being offered to the company going forward.

About California Nanotechnologies Corp.

California Nanotechnologies envisions a world in which its advanced technologies are used to help make the most innovative products on this planet and beyond. Global leaders trust the company to help push the boundaries of applied material science by utilizing its unique technical expertise and vision. Headquartered in Los Angeles, Calif., California Nanotechnologies hosts advanced processing and testing capabilities for materials research and production needs. Customers range from Fortune 500 companies to start-ups with programs spanning aerospace, renewable energy, defence and semiconductors.

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