Norsk Titanium Third Quarter Operational and Financial Update

Oslo, 30 October 2024: Norsk Titanium AS (Euronext: NTI, OTCQX: NORSF), a global leader in additive manufacturing for aerospace-grade structural titanium components using its patented Rapid Plasma Deposition® technology, today provides an operational and financial update summarizing third quarter developments.

• Meaningful progress towards the target of transitioning 60 parts into serial production by the end of 2024; added 26 new parts since the first half report to bring the total number of parts in serial production to 54
• Short-term market challenges in the aerospace and semiconductor industries have adversely affected transition of higher value parts and production rates of parts already transitioned
• Lower 2024 revenue guidance to USD 6 million
• Anticipate strong growth throughout 2025, increasing parts in serial production to more than 120, generating USD 70 - 90 million in ARR
• Affirm the longer-term target for USD 150 million in revenue in 2026

Operational review

During the third quarter, Norsk Titanium continued to broaden the application of its innovative RPD® process in the defense and space industries. The company has recently transitioned 22 new parts into serial production with United States Department of Defense (US DoD) prime contractors. These parts are structural parts, including parts on manned aircrafts, that demonstrate the full extent of the capabilities of Norsk Titanium.

As of today, Norsk Titanium and its customers have transitioned 54 parts into serial production, up from 26 parts at the end of the first half 2024 and 11 parts at the end of 2023. The parts currently in serial production are estimated to generate USD 12.2 million in annual recurring revenue (ARR). The company remains confident it will reach its target to have transitioned more than 60 parts into serial production by the end of the year.

“Introducing new products and materials into long-established aerospace and industrial supply chains is a complex process. The sharp increase to 54 parts in serial production highlights not only the acceptance of our technology to replace critical structures on both manned and unmanned aircrafts, but also the value we deliver to our customers. We continue to see a high level of acceptance, and while we are currently experiencing some delays in the transition of high-volume parts, we do not see lower demand," said Carl Johnson, CEO of Norsk Titanium.

As stated in the 2024 First Half Report, some of the high-value, high-volume parts originally targeted for transition in 2024 are expected to slip into 2025, with the timing of the annual recurring revenue of USD 50 million to follow suit. The current ARR reflects product mix being dominated by low rate, high-value parts on defense systems.

The aerospace industry is navigating acute market challenges, including supply chain consolidation at Boeing and Airbus and an ongoing union strike at Boeing that has nearly halted production. These structural changes are temporarily affecting production schedules, leading to delays in development projects and anticipated 2024 revenue for Norsk Titanium. However, all aircraft OEMs continue to forecast increasing production rates throughout 2025 and beyond.

Demand in the semiconductor industry is also developing slower than expected. However, the qualifications and contracts won with current industrial customers are opening new business opportunities for other industrial applications, and to that end the company is now deploying a more targeted sales strategy.

Financial review

On an unaudited basis, revenue for the third quarter 2024 was USD 0.9 million, bringing revenue for the first nine months to USD 2.2 million. The company’s cash balance stood at USD 20.3 million at end of the third quarter 2024, inclusive of USD 2.8 million in proceeds from exercise of warrants in June 2024 (paid in after the end of first half 2024), versus USD 23.9 million at the end of the first half 2024. Norsk Titanium’s average net monthly cash burn was USD 2.3 million, which is expected to decline as revenue picks up in 2025.

Norsk Titanium has built inventory of titanium wire and plate ahead of the expected increase in demand. With delayed transition of parts, the company will seek to align the working capital requirements correspondingly. The company is also evaluating alternatives for working capital financing to provide more financial flexibility. The company is continuously aligning costs with actual revenue growth.

With these measures and the exercise of the remaining warrants in the upcoming exercise period, it is the assessment of the Board and management that the company is fully funded to cashflow breakeven.

“Together with our customers, we have identified thousands of specific parts where our customers could significantly reduce costs, energy usage, and production lead times. Although there are inherent uncertainties in the rate of parts transition, we remain confident in our ability to create long-term value for both our customers and our shareholders,” says Johnson.

Guidance & Outlook

As a result of the above-mentioned delays and market dynamics in aerospace and semiconductors, Norsk Titanium is revising its 2024 revenue forecast to approximately USD 6 million.

This revised forecast compares to the previous USD 10-12 million projection announced in connection with the company’s first half 2024 financial report.

The company continues to anticipate strong growth throughout 2025, increasing parts in serial production to more than 120, generating USD 70 - 90 million in ARR. The company reaffirms its USD 150 million revenue target for 2026.

For more information, please contact:

Carl Johnson, CEO Norsk Titanium AS Email: carl.johnson@norsktitanium.com Tel: +1 518 324 4010

Ashar Ashary, CFO Norsk Titanium AS Email: Ashar.Ashary@norsktitanium.com Tel: +1 518 556 8966

Important notice:

This information is considered to be inside information pursuant to the EU Market Abuse Regulation (MAR) and is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act. The stock exchange announcement was published by Anne Lene Gullen Bråten, Director Finance of Norsk Titanium AS, at the time and date stated above in this announcement.

Forward Looking Statements:

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "anticipate", "believe", "continue", "estimate", "expect", "intends", "may", "should", "will" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The information, opinions and forward-looking statements contained in this announcement speak only as at its date and are subject to change without notice, and the Company and its affiliates expressly disclaim any obligation or undertaking to update, review or revise any statement contained in this announcement whether as a result of new information, future developments or otherwise.