Hi, I'm Ashar Ashary, CFO at Norsk Titanium. Welcome to our second half 2022 financial update. I just wanna remind the viewers and the listeners here that they can find the presentation that we're gonna go through on our website. It's also released on NewsWeb, you can find the disclosure and the presentation over there. Okay. Our highlights, we've been progressing really well in our markets, commercial aerospace, defense, and industrial opportunities. We made some recent announcements, those are also available on our website. Mike Canario, the CEO, who's accompanying me in this presentation, will go over the details of our progress. We're on track to our milestones that we've laid out, we are progressing well in all our target markets.
For the financial results, second half of 2022, we came in with about $2.3 million of revenue, which was for the year, we ended with $3.2 million in revenue. Parts revenue were approximately $1 million, both in the full year and in the second half. We recognized other income of about $1.3 million in the second half, and that took us to $2.2 million for the full year. That takes us to a full-year revenue of about $3.2 million. Over on the operating expense side, we had about $11.1 million in operating expenses in the second half. For the full year, that was $22 million.
Operating expenses stayed stable between 2022 and 2021, even though we had rising expenses and rising activities on the shop floor, as well as rising cost inflation. However, we managed to keep expenses on a stable, on a stable level over the years. Operating loss, or our EBITDA loss was about $8.8 million in the second half of 2022. For the full year, it was $18.8 million, which is slightly higher loss than we had in 2021. That was mainly due to the fewer collection in grants in 2022.
Overall, the net loss of the company came in around $11.5 million in the second half, but our 2022 loss was lower at $9.4 million, which was helped by the foreign currency gains in the first half of 2022. Okay. Cash used in operations. We started the year with $23 million in cash. We ended the year with $7.7 million in cash. We've been able to manage our cash burn fairly well. Our average for the year was $1.7 million. Over the second half of the year, we spent about $1.9 million per month in operating expenses. Investment activity was low, and it's expected to remain low.
We had $600,000 in investment activity, which included shop floor tools and small equipment, but most of our production assets are already funded by New York State. In financing activity, we did a small capital raise in November, and that was approximately, net, net of cost. That was of $7 million. And we had about $600,000 of principal payment on lease liabilities and interests. That ended the year with about $7.7 million in cash. I'm gonna turn it over to Mike Canario, CEO, to go through the rest of the presentation.
All right. Thank you, Ashar. I'd just add on the last bullet point on Ashar's previous slide, we are in the process, in a capital raise process, with our advisors, SEB and Carnegie, our local banks. Ashar and I are here in Oslo, Norway. Again, I'm Mike Canario, President and CEO of Norsk Titanium. It's a pleasure to be here bright and early in the morning in Oslo, and it's a beautiful day here, so looking forward to talking to investors here over the next couple of days. I'm excited to share our latest look and our latest investor presentation, and we're titling Advancing to Serial Production.
The company has truly reached a transition point in its evolution, and we're very excited about the progress that we've made recently, and very happy to share that with you today. As we've talked before, the company is focused on innovating the future of metal manufacturing. We believe and we're focused on providing a manufacturing process for structural titanium that is more efficient, more sustainable, and really a significant improvement over the traditional approaches. I really like this slide because it points out sort of the history of forging that really hasn't changed in thousands of years. The process that was used thousands of years ago to make forged parts has been somewhat automated, and larger parts are made that way.
Really until Norsk came along with Rapid Plasma Deposition, there hasn't been an alternative to traditional forging, and that's our focus. As I mentioned, the world's kinda changed a little bit in the last couple of years if you haven't noticed. We've entered sort of a new phase in history where inflation is accelerating, energy costs are accelerating. At the same time that costs are accelerating, particularly in the Western world, there is a very strong desire to bring manufacturing back home, and do manufacturing in what we would call traditionally high-cost areas.
There's a strong desire to shorten supply chains, and move manufacturing from principally Asia to local manufacturing in North America and as well as in Western Europe. You know, you're fighting some very significant cost challenges when you do that. However. Some challenges from an environmental standpoint. However, when we look at Norsk Titanium's solution for manufacturing structural titanium, we think we have something that can allow the Western world to succeed in manufacturing, even from a cost standpoint and compete on a cost standpoint, and surely on an efficiency and sustainability standpoint.
The other sort of macro event that's driving challenges in particular in the titanium supply chain, is the fact that the raw material for titanium, vastly, the vast majority of it comes from China and Russia, a little bit from Kazakhstan and Ukraine. The current conflict in Russia has definitely highlighted the challenges associated with sourcing raw material. The what I would call the heightened sensitivity to China is also a very much a question mark and a worry.
The availability of titanium raw material is not secure going forward, and so solutions such as ours, which allows the dramatic reduction in titanium raw material requirements to meet the same amount of structural materials, is something that we believe is, resonates with the Western world. It's an opportunity for us, and it's an opportunity for us that comes at the right time for the company. The reason why is, our technology is focused on, as I said, an efficient, sustainable approach to manufacturing titanium. We use 75% less energy, we use up to 75% less raw material, and we can process material much more rapidly than traditional approaches.
We start with the same raw materials, we just use a lot less of it. We end up with the exact same part at the end of the manufacturing process. We just use a lot less resources in that process. It's clearly a competitive advantage and something that the industry desperately needs. I think I said at our last report that Norsk Titanium is the right technology at the right time, and I truly believe that we are the right technology at the right time. One of the key questions in the industry is can additive manufacturing actually deliver the same mechanical performance that you get out of traditional processes?
Until Norsk Titanium came along, you couldn't. We've spent the last 15 years refining our processes and refining our capabilities in working with, both machine technology as well as processing technology, to ensure that we can deliver superior performance across the board. For every drop of titanium that we manufacture, we can meet the requirements. We now have qualification programs that have been done with multiple aerospace OEMs that have proven that our material performance exceeds the requirements that are necessary to be a direct part replacement in structural titanium.
Now there's always additional testing that needs to be done, and there's always application-specific testing that needs to be done, but the base process capability of RPD has been proven, and we're quite excited about that. I think the fact that we have established production capacity and the technical capability gives us a strong argument for fighting for share as we move forward. We believe we're at the sort of the forefront of modern manufacturing. We're kind of unique in the industry in that through a partnership with the state of New York in the United States, we actually have the production capacity necessary to support a business of up to about $300 million of revenue.
That includes 35 production machines that can deliver 700 metric tons of printed capacity. That capacity is available today. We have capability to produce predominantly in the U.S. for production, but we also have a capability to produce here in Norway. We also do all our development here in Norway as well. The technology has been protected very strongly through an active IP portfolio approach. We have over 170 patents established today, and we have over 50 applications in work, so we're continuing to push the envelope of our technology development.
We're the only structural additive supplier to have material specifications qualified and approved. We have a qualification through Boeing, we have qualification, we're working our qualification through Airbus, we have qualifications with some defense contractors, and we have an independent qualification that we've done through a U.S. regulatory authority. Our approach is to be a direct replacement of a forging, a casting, or a block of titanium into the existing supply chain, not redesigning parts, not trying to create something new, but just delivering, a, what we would call an RPD preform that is less costly, that we can deliver faster and is more environmentally friendly. I'm happy that we have today over 100 employees in the company.
Truly the value of Norsk Titanium is in its employees, and we have a fantastic set of employees, and I wanna congratulate them on just a fantastic second half. As I mentioned, we're the only FAA-approved supplier of structural titanium using an additive process. We're currently working our EASA approval as well and anticipate that that will come here in the near future. We're at an inflection point. It's truly we've gone from being a sort of a one company, one customer company where we started out working with Boeing and delivering some components on the 787, and I'll share some details. We're working quickly to expand that with Airbus and really drive forward there.
About 18 months ago or so during COVID, we took a conscious effort to refocus some efforts into the industrial and defense markets. As you've seen over the last over the second half of the year and into this year, we've been very successful in getting into production with our first industrial customer, which is the Hittech Group, a Tier 1 supplier to ASML. We're very excited about that opportunity. I'll share some details. In the defense market, we're very, very close. We're actually on a material specification that's been approved. We're very close to moving to production, serial production on a large US DoD program and hope to share some more details on that later this year.
Then very recently, we've made an announcement that we had an emergent opportunity with Kongsberg Aerospace here in Norway to open up a new avenue for the company. You can see on this chart, on the left-hand side, actually the largest market potential for structural titanium is actually in the repair and aftermarket area. It's an area that we haven't spent a bunch of time focused on because it's traditionally low volume, one-off pieces. We found an opportunity where we could help out Kongsberg in repairing a large batch of titanium components that they needed to update to current specification. The team here in Norway developed a technique to use our RPD process to repair these items.
Very excited that process was successful, and we've now moved to put that into production. This is an opportunity in an area that we're gonna explore further in the year. I'll just be honest, I'm not sure the size of the opportunity for us. It's very new, but we're excited about the potential to extend our technology into this area. Ultimately, the engine market is very attractive to us. We are working with the folks there on the chart to look at the opportunities in that area. Those are the highest, hardest qualification requirements. I anticipate that we'll be able to announce some things in that area in the future.
As I said, we've been in production with Boeing since 2017. There is a Boeing material spec and process spec that we work to. We are in serial production. I think as everybody knows, there's been a series of issues with Boeing on both the 737 MAX and the 787 programs being held up for regulatory concerns. Both those programs are back into production. For us, we have 7 part numbers on the 787, and we've just reestablished production on those parts after the lull in production. I think we've continued to work with Boeing on additional applications for 787 and beyond. We would anticipate that there's gonna be emergent opportunities that come here with Boeing.
There is a large market potential for us at Boeing. We have a material specification. We have the opportunity to move forward as Boeing moves forward as well. Boeing's gonna be a very important customer for us, particularly as we look out over a couple of years. A lot of our attention right now and we've talked a lot about a lot of the activity going on in Norway and the U.S. for the company is focused around Airbus. Airbus has, as we talked before, Airbus is very impacted by Russia. Russia is a big supplier of titanium to Airbus, you can see the quote in the upper right corner. Airbus organization is very focused on moving away from Russian sources.
We believe we're part of that solution, and not necessarily moving Russian parts over to us, but more we can reduce the demand on Russian titanium by replacing parts in their supply chain and reducing the amount of titanium necessary to support those parts. We have finished our machine qualification testing, and submitted all of that data to Airbus for their approval. We're completing our industrial manufacturing trial, and testing has actually already started on our first two parts that we're doing for the A350 program. We're hoping to complete those tasks here in the very near future and make some announcements about progressing on to the next sets of parts for Airbus and moving forward.
We see a significant opportunity for supplying titanium structural components to the A350 program and frankly, the narrow body programs as well. We're very excited about the positioning where we're at. As I mentioned earlier, in the second half of 2022, we initiated the production process for our first industrial application. I think this chart does a great job of showcasing the RPD business case. The product that ASML's suppliers was buying to support their production before Norsk Titanium was a very large, 220-kilogram forged block of titanium. They had a significant amount of machining.
You can see the finished part that is the actual silicon wafer carrier tray that goes into the ASML machine weighed less than 10 kilograms. They had to machine off over 210 kilograms of titanium. That is a very expensive process. It's shown on the right-hand side under Legacy. The raw material cost is shown in light brown. The dark brown represents the cost of the machining. You see the machining cost is more than 2 times the cost of the material. What we've been able to deliver to Hittech is an RPD print that takes the weight of the raw material titanium that's going into the product down to 80 KGs, or 80 kilograms, sorry, which means you still need to machine.
It still goes into the traditional machining process, but instead of 210 kilograms of machining, you only need to machine 70 kilograms. That's a significant savings. You can see over 15,000 kilograms of machining, that's eliminated in their process. That saves them over $10 million of capital and significant lead times in bringing that in. Then frankly, it's just the availability of titanium. This is reducing the demand on titanium by a significant amount. On the right-hand side, you can see how we look at things. As I said, the light brown represented the cost of the titanium forged block. The light blue represents the price point that we sell our RPD print to Hittech.
They pay a very slight premium to us versus what they were paying for the, for the titanium block. They're buying 80 kilograms instead of 220 kilograms, but they see a significant savings in the, in the cost of their machining. Ultimately, the customer wins, Norsk Titanium wins, and frankly, the environment wins because we don't have to consume as much titanium, which means a lot less energy. I think it's a great case. When we look forward, you know, we believe that this is a very important inflection point in the industry. We are reconfirming our long-term revenue targets as the company looks forward.
We're not sure of the 2023 revenues because of the initiation of production starts at Airbus and at our defense customer. Frankly, this is the first time that we're introducing components into those supply chains. The startup time, the lead times are things that are being developed as we work forward. We've issued guidance that says we see a range of between $7 million and $15 million for the revenue for 2023. We believe the $150 million of revenue for 2026 is the appropriate target.
That's made up of about $120 million of part sales and $30 million of what we call other business models, which we believe that the support of some emerging opportunities outside of our traditional market segments that we've shown here, will be supported with some alternative business models. We're working that. We believe that that's the appropriate approach for the company, focus on on the, our target markets and developing those and supporting those internally and potentially supporting some additional markets through some alternative models. That's our thinking. The company needs about $50 million of additional capital for us to reach our cash break-even point.
We are consuming cash, as Ashar said, and as we go through this growth phase, we will continue to consume some cash going forward. We're in the market talking to working with SEB, Carnegie, SEB and Carnegie to find the appropriate capital structure for us moving forward, and see what sources of capital we can come up with to deliver that $50 million. What I'm most excited about, and I, and I hope investors can see, the real opportunity here is the long-term, let's call it stickiness of our revenues. We've been in production at Boeing for over five years. The initial three part numbers that we started with Boeing five years ago are still in production today.
We would anticipate that we will have those parts going forward, and as long as the 787 program is going, we're gonna move. We added 4 additional part numbers over a couple of years. Those part numbers are also in production. When we look at the Airbus parts that we're gonna bring on board, we see the same sorts of stickiness, if we wanna call it. So where we look at revenues, we look at the long-term potential for keeping that business and the backlog that we can create.
As you can see here, when we look out to 2026, we're not talking about what I would call real aggressive targets, whereas we're looking at market penetrations of less than 3% in our key market segments. We believe this is very attainable. We have the production capacity in place. Assuming that we can achieve those targets, we're looking at a business that in 2026 has over $120 million of direct recurring revenues, with the $30 million coming from additional market segments. That $120 million will have over four times that value in contracts supporting it. Long-term great business model, I believe, and I think fantastic opportunity for the company.
In summary, you know, we believe Norsk Titanium is right on that standpoint of reaching the takeoff point. There's been an awful lot of work done by a tremendous amount of people in the organization. I wanna thank our customers as well. They've been very patient with us as we've worked through our approaches and convincing them of our dedication to delivering the highest quality titanium product on the market and being fully replaceable with the existing technology that they use. We're very excited about where we're going, and with that, I'm gonna turn it over. Ashar, do we have any questions that are out there?
Yeah. We have one question that came in. How much time would it take to increase industrial capacity in case you would win new large customers?
That a good question. We actually have available capacity. In our model that we were showing there and our targets, you know, we show in 2026 using up just under 50% of our available capacity. The easiest way to answer that is I've got capacity today to support, you know, an additional $150 million of annual opportunity in the industrial market that we don't show. I'd say beyond that, if there was an opportunity that was even further beyond that, we have about a 6-month lead time to add capacity.
Again, depending on the size of the opportunity, I mean, if, if there was something that came along that was just a tremendous consumer electronics opportunity or something like that, it may be a year. I think we have tremendous amount of capacity and availability. That's really frankly, we're just the beneficiary of a fantastic arrangement with the State of New York. They've been an excellent partner for us, and put the capacity, basically put the capacity in place for the world's largest additive manufacturing factory. We'd love to take advantage of that. If anybody out there has an opportunity that they see that we, that we'd need to add capacity, love to hear about it.
Love to look at it. Anything else?
I think that concludes the Q&A. There are no more Q&A, or no more questions-
Okay.
for the Q&A.
Okay, great. Thanks. With that, again, I wanna I wanna thank the employees of Norsk Titanium and congratulate them on a fantastic 2022. We're I think I can speak on the behalf of the entire company, we are very excited about 2023 and what's coming forward. Many, many thanks to our customers for believing in us and working with us and we're not gonna let you down. We're the future of metal manufacturing, and we're excited to make it happen. Thank you.