Nanoco Group plc (GXG.DU) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the Nanoco Group Plc Interim Results Investor Presentation. [Operator Instructions] Before we begin, we'd like to submit the following poll. And I'm sure the company be most grateful for your participation. I'd now like to hand over to management team from Nanoco. Good morning to you both.

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 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 appointed as a CEO of Nanoco just for short time before our 2024 final results presentation. So what I will talk about today effectively summarizes my tenure with Nanoco of the last 6 months. We made quite a good progress with existing customers. I will provide you with 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 order. 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 a 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 a year ago. And finally, we continue to make good progress with CDX, the adviser and 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 good progress across all fronts, and I will give you some details as we go through that. Next page, please. I will 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 dot markets, which are relevant to Nanoco. We analyzed a 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 6 months ago. This is now in millions of dollars. And as you can see, across the 5 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 quantum dot market into 9 different market segments. But in only 5 of those segments, we believe there is a substantial revenue generation opportunity for Nanoco in the next 5 years. The remaining 4 segments, we will 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 2 markets, flat panel display and short wave infrared image sensor. But after conducting a screening process over the last 6 months, we identified 3 additional markets, Photovoltaic, 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 to 24 months. So the bottom 3 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 this market. And we're quite pleased with these developments. I will not go through all the bullets, but at a very high level, in flat panel display, we continue to see very robust growth drivers behind the current incumbent technology, which is QD quantum dot-enabled liquid crystal, QD LCD. 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, the liquid crystal display, 3 additional technologies will contribute to growth, including micro-LED and eventually electroluminescent displays. Those will require a couple more years of development. But in the meantime, LCD technology itself is continuing a very successful run. And 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 off a small base. That may include some of the wearable sensors, basically biomedical applications, various types of aerial surveillance for nonmilitary purposes. And most importantly, the 2 large markets which we expect to develop are automotive and consumer. In our expectation, consumer market will fully unfold within 2 years and automotive within the next 3 to 4 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 a 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 side. 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 middle business model of the 3. 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're 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 GBP 0.7 million per month to GBP 0.5 million. We reached that run rate in late January. And at this point, all the extraordinary expenditures are completed, and we have 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 3 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 Jai Subramanian. His appointment was announced back in December, and he is fully up to speed. In fact, we are 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 5 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 type of agreements, we would be announcing them to the market. Next page, please. Now a brief commercial update. I will start with flat panel display. We have completed a market study with commercial targets fully defined. At this point, we're 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, majority of Mainland China and parts of Taiwan segment of the industry were utilizing cadmium-based quantum dots. The trend against cadmium-containing products is the strongest in Europe. It is still at the earlier 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 a unique chance to insert our cadmium-free products into 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 the 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 a 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 are in advanced negotiations of a similar second joint development agreement, which would target the same short-wave infrared sensor technology. And in our pipeline, as I mentioned, we have a 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 relationships proceed to the agreement stage. And in other markets, as I mentioned, our objective is not to reach out to a really broad variety of customers. It's really to select 1 or maximum 2 engagements in each of those markets if we believe that it has the revenue generation potential within the next 12 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 4 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 an effective low-cost way to publicize our achievement in this market and to 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 [indiscernible]. 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 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 1,000 and 2,000 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 a variety of applications. automotive, various surveillance applications, military, et cetera, et cetera. Next page, please. Yes. Last but not the least, I'd like to give you a brief update on the process with CDX, our adviser 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 1, 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 these market studies were made available to potential investors, covering specifically QD market as a whole as well as deep dives into the image sensor and flat panel display market. We put together a thorough confidential information memorandum or SIM. And most importantly, we completed a pretty extensive outreach, more than -- 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 a 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 potentially interested parties this type of access. At this point, we are entering Phase 2, which means we are gathering preliminary bids known as IOIs, indications of interest. Those bids would be collected during this second calendar quarter of 2025. And towards the second half of this quarter, we will begin in-depth engagement with one or more than one finalists. 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 before end 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 Mr. Liam Gray.

Thank you, Dmitry, and good morning, everyone. 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 GBP 0.7 million in the prior year to GBP 0.5 million in the current year. We did complete the promised return of capital to GBP 33 million of shareholders. At the start of this financial year, we had GBP 1 million left to buyback, 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 GBP 0.7 million per month to GBP 0.5 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 GBP 15.5 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 of around GBP 15.2 million on the 4th of April 2025. So moving on to the next slide. This is our summary income statement 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 GBP 3.6 million to GBP 3.1 million. On the cost base, if you take the R&D investment line and the other administrative costs together, you can see they have reduced by GBP 0.4 million compared to the prior year, and we expect further cost savings in H2 following the completion of the previously announced restructuring. Other adjustment items referred down the table is GBP 0.2 million of costs relating to the requisition general meeting we held in December, GBP 0.2 million of costs relating to the ongoing CDX process and GBP 0.1 million relating to the restructuring, which we completed. We then have our GBP 0.5 million of noncash SBP charge, which is comparable with the prior year. In H1 of FY '24, there was a large GBP 2.7 million FX gain, which is related to a hedge we took out on the Samsung receivable, which is where that GBP 2.2 million comes from. Depreciation is ahead of prior year due to the investments in our device and analytical labs, and we also received GBP 0.3 million of interest on our cash balance in the period. All in all, this takes you down to a loss after tax of GBP 1 million compared to a profit of GBP 1.8 million in the prior year. So just moving on to the next slide. This reconciles our movement in cash in the period. So we started the year with GBP 20.3 million. And then we have our adjusted EBITDA of GBP 0.5 million, which is offset by the cash exceptionals of GBP 0.5 million. We then have to remove our deferred revenue. This is noncash revenue because it's been paid upfront. And for H1, this is GBP 3 million. We then have our lease liabilities of GBP 0.4 million and the previously mentioned return on capital, the additional GBP 1 million buyback. Then we have some other small movements of GBP 0.4 million, which gets you back to our closing balance of GBP 15.5 million at the end of H1. So in summary, we did mention our full year revenue well outperform market forecasts. The original forecast for our full year revenue was GBP 6.6 million. This has now been upgraded to GBP 6.9 million. Our gross monthly cash costs are stable at GBP 0.5 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 expenditure and infrastructure, and we are getting some good results from our lead sulfide, indium arsenide and indium antimonide 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 are showcasing the work and the results we are achieving. And finally, just a small point on cash. There's no significant further capital requirements and the cash runway 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 3 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 5, 6 years. More importantly, in the immediate future in the calendar '25 and in '26, we expect to see quite dramatic expansion in our most important target markets in the 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 Dieter May coming in and Jalal Bagherli, 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 and reaching our pipeline literally every week. I sometimes reflect on 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 rightsized for growth. We have meaningful cash runway now, meaningfully longer with a 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 time line when necessary. And we continue to see further opportunities to leverage our IP. As we stated before, these opportunities are 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, I'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 strategic aim. 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 there appears urgency in delivering the strategic aim set out and the complete lack of timetable appears to be dragging out a process that is not attracting interest rather than delivering anything at pace. Does the refreshed 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?

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 2 parts. There are really 2 questions. Do we really believe that this is the right direction? And are we 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 expensive and laborious moves of identifying the advisers, doing all the 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 additional cost, which we had to incur to get the process going. So we absolutely believe it. As far as the pace, the second part of the question, well, for me, at pace simply means as fast as we can go through the process without sacrificing the quality. Again, there are a 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 these markets are rather technically complex in their nature. If you look just in the variety of technologies involved in image sensor in a flat panel display, for any investor, even a sophisticated 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 these patents, but you don't simply take this on faith, right? People need to do the proper analysis and make their 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 3 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, I believe 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?

Yes. So of course, as we go through specific moves related to enforcing our IP, we will 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 identities are very well known. It's a small industry. We have conducted a 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. Next question. When might be the earliest the company would expect to see commercialization of QD-based micro-LED technology?

Yes. So this is one of the technologies we're involved in. Based on our stage of development with the customers, I would say approximately 2 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 linger, 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 2 years is doable. But unfortunately, we do not control that time line. It is controlled by our customers.

Okay. Next question, how long would it take to reinstate the mothballed 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 6-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 2-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. These are good meaningful engagements. So to the first part, we have good number of meaningful engagements. That's why we are comfortable moving to the preliminary bid stage. As far as bidders who subsequently disengaged, yes, we have plenty of 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, a 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 after taking a look, disengaged, and that's okay.

Thank you, Dmitry. Next and final pre-submithated question. On a scale of 1 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 or another. It is never guaranteed. What I do know is that we are engaged with the right adviser, 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 -- it's 100% when it happens, it's 0% when it fails, but I cannot predict on a scale of 1 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 screen for the QD-SWIR opportunities and down selected approximately 10 companies as business development targets for this technology. Please explain what this means.

Yes. 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 100 companies which play some role in running the incumbent technologies. As I mentioned, they are not based on quantum dots. The quantum dot-enabled sensors is a new technology. And out of that universe of, let's say, approximately 100 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 a 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 these companies 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 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, 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?

Yes. Maybe I'll answer the first half and Liam, I will ask for help for the second half. So what has been sold is very straightforward. All the operating assets of the business, which are embedded in the 2 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 the exception of 3 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 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 further.

Yes. So at that point, we've sold the full trading entities. Nanoco Group plc would be a cash shell, which retain the cash. Share price would cap -- will approximate the 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'll be no other papers for the shell at all. I hope that answers your question. The next question, could you comment on how long the Nanoco's key patents are valid for, please, across your key markets 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 the Nanoco's key patents are valid for, please, across your key target markets and applications?

Yes, absolutely. So we have 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 applications of quantum dots specific to display, image sensor and some others. Those patents have their life anywhere between, I would say, 5 to 20, 5 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 5 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 the dots given the history between the 2 companies?

Excellent question. So our relationship with Apple, while it wasn't openly publicized, it relates to image sensor technology. We did not have pre-existing 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 [indiscernible] demo you mentioned? I note this was using lead sulfide Generation 1 quantum dots and that 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 [indiscernible] 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're correct that in the early prototypes, supply of another supplier was used to build those early prototypes. Our intention is to work with [indiscernible] 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 1. 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 2 and generation 3 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 [indiscernible]. And that is one of the reasons why we build those demonstration cameras with them.

Thank you, Dmitry. Next question. If not a real question, why did you, Dmitry and Jalal join what was essentially a very small company?

Not a real question at all. And both Jalal and myself received that question. And I think we answered 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, that 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. Would you like to take this one, Liam?

Yes. So it's obviously not 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, 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 Jai have been brought in to try and drive the commercial value of the business. And hopefully, the 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 going to source their steel or aluminum, worrying about some new technology and quantum dots 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 across those 3 market segments, which is 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 the Nanoco's patented 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 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 3, 5 compounds and other compounds of that type include indium arsenide and indium antimonide, the 2 species which we are now commercializing for the image sensor. So for those quantum dots, we are highly confident because the validity of these 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 remains the main dominant species used in any significant quantities.

Okay. Just a few questions left. 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 that current IP coverage 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, yes, 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 will 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 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. 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 3 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 an infrared and visible region, it's completely unobstructive or -- 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 are 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 and other consumer electronic devices in, I would say, in 1 or 2 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 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 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, we'll 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 IP 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 1 hour. So thank you for being patient. It's our pleasure to update you. We will 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 will 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 2 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 are 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. That now concludes today's session. So good morning to you all.