Transcript
Speaker: Hello and welcome to Edison TV. Today I'm speaking to Matthias Nowak, who is Chief Commercial Officer and a board member at Noctoluca. Noctoluca are a Polish advanced materials company developing next generation materials for OLED displays.
Speaker: Matthias, many thanks for joining me again today. It's a pleasure. Thank you for having me. And um can we start by talking about the progress you've made with your lead customer? So this is the very large Chinese electronics brand. um In particular, can you discuss how significant the move to industrial qualification is?
Speaker: i believe this this improvement that we have made with that relationship is very significant. at the At the end of Q1, we have almost completed the industrial checklist. Today, or after second quarter, I can say and confirm that we have fully ah confirmed at the industrial requirements. And what that meant is that we increased our production in the first half of this year by 100 times and at the same time increase the purity of our product from 99.6% to 99.95%, which is of course a the last mile and challenge and last mile problem. So every single bit right now is increasingly more challenging.
Speaker: This is a moment where we are moving from proof of concept to proof of performance. Thank you. and one of the um other key developments that I thought was very interesting was how your relationship with your lead customer is now expand expanding into their supplier ecosystem. um Can you firstly discuss that and and also just explain what that might mean as regards the pathway towards commercialization? Our most important partner so far has
Speaker: been testing our material for quite some time, but at the same time their leading supplier, their leading OEM has started independently testing our our material in Q2.
Speaker: That has translated into the largest ah testing program that we have ever undertaken with a single partner. And this OEM to our key customer has proven that when we use our product, NCIL-4, as electron injection layer material, they have achieved over 100 to up to some cases 200% of lifetime improvement.
Speaker: And they have seen also clear benefit of using our material as an ETL dopant, which gave between 30 60% of lifetime improvement.
Speaker: So right now we have really improved and and strengthened that relationship, for example, by meeting their um that their entire structure, actually four layers of of decision makers from CTO to engineering teams.
Speaker: And those increased interactions have saved us, I would say, nine months of R&D and over $1 million dollars of unnecessary costs of you developing in the dark. Now, we with this know-how that we exchange with them,
Speaker: ah both ways, it allows us to move faster. And that, if I may just close where where we are, this is the a domino effect in action.
Speaker: One qualified customer opens the door to their entire supply chain. And I believe this is a pathway that we can imagine to to to see with our other partners.
Speaker: OK, so what are the key milestones from here as you progress from you know from formal qualification through to repeatable commercial shipments? Steps right now are very clear. Quarter two and three are all about redundancy tests where you have to confirm and reproduce the results that you have achieved in the R&D stage. You have to do it two, three, four times to make sure that what you get from the R&D test is actually repeatable.
Speaker: Then you in Q4, we hope we estimate to to so go into mass production line tests where this inline validation will take another 10, maybe 20 days.
Speaker: um And the 10 can extend up to two months of of validation. In late Q4 slash Q1 next year, there will be ah formal qualification of a material for mass production.
Speaker: And then first half of next year, it will be official customer audits, quality, health and safety, supply chains, also financials. And then second half of next year, this would mean that we are ready to...
Speaker: serve our um customer in repeatable commercial with repeatable commercial deliveries. And what that basically means is we have shortened the standard life cycle of such a business development from three to five years down to what looks like right now around two two and a half years.
Speaker: exciting developments. Obviously, some you know some some challenging hurdles to go, but but but all seems on track to to reach that inflection point late next year or or ah or early in 2028.
Speaker: Can we turn on to your other partner programs? ah In particular, you've seen a widening validation of your your core material and CEIL. ah Can you discuss that and and what that means for business's broader potential? Absolutely. So um there is a bridge between previous question and this question.
Speaker: R&D and moving from R&D to production is never a straight line. and In business, we we we love linear developments and you know things and events that we can predict beginning happening one after another. With ah a deep tech technology, it sometimes you have to take two steps and you take a step back, hopefully and likely it hasn't happened so far with any of our 15 partners that are in ActivePayPlan. We've actually um have increased um the the number of validations of our technology from one ah partner that we had the solid
Speaker: validation at the beginning of the year to four different validations right now. These include a smartphone application, IT display, which means monitors and laptops, passive matrix OLED and micro OLED application for VR and AR. So That also means that we have two formal joint development projects running with a Chinese IT OLED giant and the Chinese micro OLED matrix the manufacturer.
Speaker: And you know there there are many, many more things that are happening with those um with with this pipeline, but to distill it in in one sentence, I would say we have 15 partners testing four applications that show that it's a universally applicable product.
Speaker: And we have four validations of improved performance of lifetime. And that shows that our material is not and a single shot bat. it's It's a platform solution that is applicable across the entire industry.
Speaker: Thanks, that's very helpful. um And can we now ah talk about um you know the the operational and manufacturing investments that you now need to put in in in order to firstly prepare for volume production, but also you know progress multiple of you know multiple development streams at the same time.
Speaker: yeah Can you talk about what the key steps operationally and and from a manufacturing point of view will be. Absolutely. you know to To bring forward a world-class product, you need a support system that will actually be able to to to deliver it. And that means for us in the future that we will have larger physics and engineering capabilities in-house in Poland.
Speaker: um that That's why we want to bring device construction, all that small OLED device construction and testing back to Poland. For that we will need ah fa va PVD equipment, which is physical vapor deposition equipment. This is basically a chamber that allows you to create demonstrators of OLEDs with our materials, something that we've been doing with our Asian partners. um But basically what that ah after this expansion in Poland would mean is that we shorten a new materials development cycle from two, three years
Speaker: one year and that enables us to deliver blockbuster class material every year like ncl4 it took us almost three three years now to first develop it and then build this entire testing program with with the industry. So we want to shorten that that cycle.
Speaker: And then, of course, there is an expansion of our lab chemical lab in Torun, in Poland, ah that will help us grow the manufacturing capabilities as well. But I would say out of the two, the in-house PVD equipment is the one that really puts us in a and on a completely different trajectory. when it comes to product development and product delivery.
Speaker: And can we now talk about funding? So you've recently secured secured some quite significant new grant funding um in addition to your previous funding awards.
Speaker: And you've also announced an equity funding development as well. can you Can you discuss those and also what they mean for your ability to fund and accelerate the scale up that you've just just been talking about?
Speaker: So in answer to that question has two parts. One is, of course, this non-dilutive financing grant portfolio, if if you will. We have right now 12 awarded projects with a total project value of around 30 million zl.
Speaker: And that translates to grant funding for Noctiluka of around 20 million zl. Which is more than double the grant base within a year.
Speaker: So within a year, we have doubled um this pillar of where our funding stands on. Of course, it's not our business model to live off grants. We are just using this source of funding to get us to the commercial ah commercial sales. But at the same time, um it also helps to prolong the the the other increase the investment, make those investments faster and so on if we have more i capital available.
Speaker: And second part of this answer is, of course, ah the term sheet that we have signed with one of the the two institutional investors in Poland, actually. So NCBA investment sound fund and IGS investment, which we have released recently.
Speaker: And I believe that this two pillars of our funding will um will get us the the full funding on the of the plant engineering, vapor deposition system and increased production capability investments needed without pressure for further dilution or pressure from you know um r and d process not going linearly, but maybe ah
Speaker: turning or slowing at certain points. So what we are doing right now, we are future proofing the company. So we are with our product on the on the pathway to commercialization.
Speaker: And at the same time, we're using that momentum to actually be able to secure a long-term stability. The reason for that is, of course, we want to be faster and quicker with the PVD equipment and new product ah releases, but also we have to be ready for large scale orders. So we have to be ready to service our customers.
Speaker: We have grown our team in Asia. um We have grown our team in Poland. And we we with this funding, we will be ready to fully service any account that will materialize next year.
Speaker: Mateusz, many thanks for joining me today. Good to see the company progressing on so many different fronts and look forward to following your progress over the next quarters. Thank you, Dan. It's been a pleasure to to talk after a couple of months. And I i really hope that 2026 will be this transformational year for us, moving from deep tech technology company to actually an industrial player.
Speaker: This is our ambition, our goal. Thank you.
