Mr. Eric Eyerman reports

CALIFORNIA NANOTECHNOLOGIES ANNOUNCES Q1 2025 RESULTS

California Nanotechnologies Corp. had record quarterly revenues of $1,748,826 (U.S.) for the fiscal quarter ending May 31, 2024. This represents an increase of 243 per cent compared with the same period last year.

Net income for the quarter was $696,042 (U.S.), compared with $35,467 (U.S.) in the same period last year, while adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $754,465 (U.S.), compared with $112,653 (U.S.) for the same period last year. Diluted earnings per share for the quarter increased to one cent compared with zero cents for the quarter ended May 31, 2024.

Adjusted EBITDA showed significant improvements due to higher revenue generation from manufacturing services and Spark Plasma Sintering (SPS) equipment sales, which was partly offset by higher overhead costs to support larger operations. Net income saw improvements for the reasons above and benefited from a $141,829 (U.S.) unrealized gain on share purchase warrants, which was partly offset from higher depreciation and interest expenses related the company's new Santa Ana manufacturing facility lease. The financial statements are available on SEDAR+ and on the company's website.

"We continued our momentum this quarter as we work towards commissioning our new Santa Ana facility," stated chief executive officer Eric Eyerman. "Our team has been working hard to set up the infrastructure to support the new SPS and cryomilling equipment while maintaining our growth trajectory with our existing Cerritos-based operations. The new capacity in Santa Ana is expected to allow us to process larger part sizes and higher material volumes, contributing to revenues in Q3/FY2025 and onwards."

The increase in revenue for Q1 FY2025 was attributed to the ramp-up of manufacturing programs and two SPS equipment deliveries to University of Connecticut and Embry-Riddle University, valued at approximately $525,000 (U.S.). The green steel cleantech customer's program continues its execution and accounts for the majority of manufacturing revenues year to date. In addition, Cal Nano is in the pilot production stage with several customers in the aerospace, industrial and automotive markets who have the potential to grow their manufacturing programs from pilot-scale ones.

Gross margin increased year over year due to operational efficiencies but was lower compared with recent quarters due to a higher share of lower-margin equipment sales during the quarter. Adjusted EBITDA and net income generation were strong in part to higher revenue generation, maintaining gross margins across manufacturing services and contributions from gross margins on equipment sales. It is anticipated that profitability will fluctuate quarter over quarter as the company continues to invest in advance of capacity expansion and business development.

Over the last 18 months, Cal Nano has committed approximately $1.5-million (U.S.) of capital for the acquisition and installation of equipment to increase its service capacity. The equipment includes: two used cryomills, two SPS machines, a system enabling 3-D material printing using SPS technology and the supporting infrastructure. The company expects in the near term that additional capital commitments will be incremental to satisfy targeted capacity requirements. The new equipment is not yet operational and contributing to the company's operating results.

Subsequent to the quarter, the company repaid a further $50,000 (U.S.) of its borrowings from Omni-Lite Industries Canada Inc., continuing its debt reduction plan.

About California Nanotechnologies Corp.

At California Nano, it 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 it to help push the boundaries of applied material science by utilizing its unique technical expertise and vision. Headquartered in greater Los Angeles in California, California Nano hosts advanced processing and testing capabilities for material 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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