NANO.TO - The case.


Nano One Materials Corp. (NANO.TO) develops patented technology for low-cost production of high performance lithium ion battery cathode materials used in electric vehicles, energy storage and consumer electronics. NANO enables lower cost feedstocks, simplifies production, and improves performance of a wide range of cathode materials.


Its One-Pot process, coated nanocrystal materials and its Metal to Cathode Active Material (M2CAM) technologies address fundamental performance needs and supply chain constraints while reducing costs and carbon footprint.


Coverage was initiated January 2018 with notes on August 2019 May 2020. and January 2021.


News Releases


Jan. 21 - Selected to Showcase its Clean Technology Advantages in Chile: a) Nano One is part of AUI's successful bid to Chilean Clean Technology Institute. b) Proposal to make nickel-rich (low-cobalt) cathode direct from Chilean lithium carbonate. c) Nano One process avoids costly conversion to lithium hydroxide. d) No need for costly hydroxide facility nor related consumption of water and energy. e) Lithium carbonate is easier-to-handle and less costly than hydroxide.


Feb. 1 - Announces Mr. Alex Holmes as COO: He will spearhead NANO’s business operations and optimizing its operational capabilities, to ensure alignment with market growth opportunities, and strategic initiatives.


Nano One has received proceeds of approximately $4,465,000 from the exercise of stock options and warrants since its last financial update dated October 1, 2020. This brings the Company’s treasury to approximately $28,000,000 with up to $4,250,000 in non-dilutive non-repayable contributions from Canadian clean technology government programs. This further strengthens the Company’s financial position to execute on its business strategy. Nano One has also granted 1,540,000 incentive stock options with an exercise price of $5.10 to directors and officers of the Company.


Feb. 22 - Performs Well in Solid State Battery Collaboration with the University of Michigan:


1) collaborating with the University of Michigan on the development of innovative solid-state battery technology. 2) proprietary coated single crystal HVS cathode material is performing well in University of Michigan test programs. 3) HVS is inexpensive, fast charging, cobalt free, and suited for solid-state battery configuration because it does not expand, contract and stress the cathode-electrolyte interface like other materials.


Feb. 24 - TSX Venture 50 Recognition as a Top Performing Company and Kicks Off Busy Conference Schedule:


Nano One has engaged Native Ads Inc., a full- service advertising agency, to provide digital media services, vendor management, marketing and data analytics services. Nano One has secured up to $200,000 in available services over an expected 12-month period. Neither Native Ads nor any of its directors and officers own any securities of Nano One.


Feb. 26- M2CAM Technology to Reduce Cost, Waste and Carbon Footprint in Lithium-ion Battery Supply Chain: Nano One’s patented One-Pot process has been successfully adapted for M2CAM (metal to cathode active material) initiative, enabling cathode materials to be made direct from metal using nickel, manganese and cobalt metal powder feedstocks rather than metal sulfates or other salts.


NANO is actively engaged in discussions with large integrated miners to reduce environmental footprints and maximize upstream value in the global battery supply chain. NANO's other collaborators include automotive OEMs with similar motivations to meet environmental targets by reducing waste, carbon emissions, logistics and costs.


Mar. 16 - Announces $25 Million Bought Deal Offering of Common Shares: An aggregate of 4,700,000 common shares at a price of $5.35 per Share for gross proceeds of $25,145,000. The Company intends to use the net proceeds of the Offering for ongoing research and development, pilot plant expansion, business development and strategic initiatives with partners and collaborators and for general corporate purposes.


Apr. 1 -Announces Closing of $28.9 Million Bought Deal Offering: Issued a 5,405,000 shares at $5.35, which included 705,000 shares pursuant to the exercise of the over-allotment option, in full, for gross proceeds of $28.9M.


Apr. 20 -Advances Joint Development Work with Asian Cathode Producer: Nano One today provides a progress update on a Joint Development Agreement (JDA) entered into with an Asian cathode material producer (August 10, 2020).


1) Joint Development phases one and two were successfully completed. 2) Project work is on schedule and on budget. 3)LNMO cathode materials have met performance metrics and initial economic targets. 4) Next steps include scale up, detailed economic modeling, third-party evaluation and planning for commercialization.


The companies are co-developing high-performance LNMO cathode materials using Nano One's patented One-Pot Process. LNMO, also known as high voltage spinel (HVS), is of increasing global interest and has great potential in next-generation lithium-ion batteries for electric vehicles, renewable energy storage and consumer devices.


May 6 -Enters into a Co-Development Agreement with Niobium Producer CBMM: CBMM is the global leader in the production and commercialization of niobium products and technologies. The agreement will optimize Nano One's patented One-Pot process for nickel rich cathode materials using niobium from CBMM as a coating.


Project details and financial contributions are confidential.


Nano One's lithium niobate coating is a form of non-flammable ceramic solid state electrolyte that allows lithium ions to pass through it and into the cathode material during discharge whilst protecting the cathode from side reactions.


May 27 -Receives Conditional Approval to Graduate to the Toronto Stock Exchange:


June 3 - Enter into a Joint Development Agreement for Lithium-ion Battery Materials with Johnson Matthey:


The agreement will focus on developing materials, methods of production and a detailed commercialization study for pre-pilot, pilot and scaled up manufacturing. The agreement is the culmination of successful technical reviews and preliminary evaluations of both Nano One’s high nickel cathode materials and IP conducted over the past year and represents a significant milestone in the business relationship between both companies.


June 7 - Graduates to the Toronto Stock Exchange: Trading on the TSX effective as of market open tomorrow, Tuesday June 8, 2021, under a new trading symbol “NANO”, and will cease to trade on the TSX Venture Exchange.


June 17 - Granted 3 New Patents: Expanded its patent estate to include three (3) issued patents( Canada, China and US), bringing Nano's patents to a total of 19 with more than 35 patent applications pending.


The recently issued Chinese Patent 2017100669194 joins a family of related patents already issued in the US, Canada, Taiwan, Japan and Korea. This patent extends the protection for a powder manufactured by NANO’s patented One-Pot process. The US Patent 11,018,331 joins a related patent issued in Taiwan to provide coverage for a novel method for phosphate stabilizing of lithium-ion battery cathodes. This is an important, low-cost durability improvement to lithium nickel manganese oxide (LNMO) cathode material, also known as high voltage spinel (HVS).


Aug. 4 -Provides Update on Joint Projects with Saint-Gobain: Successful completion of its joint development project with Saint-Gobain. This project began in December 2018 and focused on optimization of the thermal processing of Nano One produced cathode materials and Saint-Gobain’s furnace materials under a range of firing conditions.


Having built a positive working relationship over the past 2 years, Nano One and Saint-Gobain are discussing the scope of work for additional joint projects and will continue to explore future business and co-development opportunities.


Aug. 11 - Provides Quarterly Progress Update and Reports Q2 2021 Results:


Facility/Personnel Expansion: A 1,200 sq. ft. dry room has been commissioned for the development of high-nickel materials and NANO has also increased its thermal processing capacity, cell fabrication and testing facilities. The team continues to meet internal (innovation) and external (collaborator) commitments with nearly 50 employees currently.


Financial update: During the six months ended June 30, 2021, Nano One generated a net increase in cash and cash equivalents of approximately $27,565,000 inclusive of a short-form prospectus financing of common shares which completed on April 1, 2021 for gross proceeds of approximately $28,900,000. a) Exercises of stock options and warrants for total proceeds of approximately $4,548,000; and b) Proceeds from Government assistance programs mainly comprising $262,500 from Sustainable Development Technology Canada (“SDTC”).


Aug. 17 - Adds Industrial Scale Engineering, Selects Global Engineering Firm Hatch to Lead Study: 1) NANO and global automotive company expand their NMC/LNMO cathode evaluation program. 2) The expanded collaboration will evaluate economic and environmental advantages of NANO’s process technologies for the production of nickel rich cathode materials. 3) The increased scope will include an engineering report that models cathode manufacturing at an automotive scale based on NANO’s patented One-Pot process, coated nanocrystal, and M2CAM technologies. 4) Engaged global engineering firm, Hatch, to lead an engineering study and provide a report to automotive company.


Sep. 7 - Appoints Gordon Kukec Independent Director


Sep. 9 -Achieves Milestone 2 of the Scaling Advanced Battery Materials Project: With Support from Sustainable Development Technology Canada (STDC) and the British Columbia Innovative Clean Energy Fund (ICE), the advance funding for project milestone 3, in the amount of $1,652,859 - $1,095,057 from SDTC and $557,802 from the ICE fund.


Summary


Milestones

  • Chilean Clean Technology Institute: make nickel-rich cathode direct from Chilean lithium carbonate (Jan 2021).

  • Collaborating with University of Michigan on Solid State Battery Technology (Feb 2021)

  • M2CAM (metal to cathode active material) using powder feedstocks instead of sulfates or salts (Feb 2021)

  • Advances Joint Development Work with Asian Cathode Producer to third party evaluation (Apr 2021)

  • Co-Development Agreement with CBMM through usage of Nobium as cathode coating (May 2021)

  • Joint Development Agreement (JDA) with Johnson Matthey for cathode materials innovation (June 2021)

  • Update on Joint Projects with Saint Gobain after two years of collaboration (Aug 2021)

  • NMC/LNMO cathode evaluation program with Global Automotive Company and hired Hatch (Aug. 2021)

  • Advance to Milestone 3 with $1,095,057 from SDTC and $557,802 from the ICE fund (Sep 2021).


It's worthwhile exploring a few of these milestones in detail including potential future ramifications.


M2CAM

This initiative is significant for Nano One. There are inherent cost savings for both miners and automotive OEMs. Should NANO demonstrate to scale the generation of cathode materials from metal powder feedstocks (ie. nickel, manganese and cobalt) it could have a significant economic impact on the cathode manufacturing ecosystem.


JV with Asian Cathode Producer

The objective was to commercialize of cathode materials engineering through licensing of Nano One's technology and/or further development work. After a successful phase I and II, the JV is scaling up.


1) Joint Development phases one and two were successfully completed. 2) Project work is on schedule and on budget. 3)LNMO cathode materials have met performance metrics and initial economic targets. 4) Next steps include scale up, detailed economic modeling, third-party evaluation and planning for commercialization.


The result of a positive economic modeling, third-party evaluation could drive revenue for NANO through licensing its One Pot Process for LNMO cathode materials (lithium nickel manganese oxide). NANO seems one step closer.


Partnership with CBMM

To optimize NANO's One-Pot process for nickel rich cathode materials using niobium from CBMM as a coating.


Niobium is a key element in the advancement of lithium-ion battery cathode materials as it can be made to form a coating on the outer surface of each grain of a cathode powder.


As a coating, niobium protects the highly reactive cathode from deleterious side reactions that can cause rapid degradation in high performance batteries while preventing the growth of interfacial resistance during battery cycling.


A successful outcome can have an impact on duration and can possibly represent another revenue stream for NANO.


JDA with Johnson Matthey

Yet again, this announcement not only reflects an endorsement of the One Pot Process, but also the intent for deployment via pre-pilot, pilot and production at scale with NANO.


1) Co-development of next generation products and processes for Johnson Matthey’s eLNO® family of nickel-rich advanced cathode materials 2) Includes detailed commercialization study for pre-pilot, pilot and scaled up production.


Saint Gobain

In essence, the companies have work together for two years and are now discussing additional joint projects and opportunity. However, its good to keep in mind that their alliance is integral.


Saint-Gobain remains a consortium member within Nano One’s “Scaling Advanced Battery Materials” project supported by Sustainable Development Technology Canada (“SDTC”) and the British Columbia Innovative Clean Energy (“ICE”).


Global Automotive Company + Hatch

Indeed, yet another endorsement of NANO's One pot process with regards to NMC/LNMO cathode manufacturing. Moving to hire Hatch is significant as it will profile NANO's IP against conventional methods. Again, one step closer...


The report will be prepared by Hatch, based on the engineering study being prepared for Nano One, and will include a Front-End Loading level 1 (FEL1) analysis on capital costs, operating costs, and a cost comparison of the Nano One process versus the conventional cathode material manufacturing process.


Milestone 3: SDTC + ICE

The reception of additional funding from both SDTC and ICE is another confirmation of NANO's success.


Within milestone 2, Nano One has strengthened its process for both Lithium Iron Phosphate (LFP) and Nickel Manganese Cobalt (NMC) cathode materials. Our capabilities and capacity have also significantly increased in this milestone through the addition of staff and equipment and the tripling of our laboratory, pilot and office facilities. Nano One is now focused on milestone 3 which involves economic modeling and scaled up demonstration of both LFP and NMC.- NANO's, CEO


As a reminder, there are four phases to this project which involves a number of consortium and strategic partners and has a combined funding of $8.2M over 4 milestones.


Appointment

Alex Holmes as COO (February 2021): Gordon Kukec as Independent Director (September 2021).


Financing

March 2021, a Bought Deal for $25M was initiated. It closed oversubscribed at $28.9M in April 2021.

The terms were by issuance of 5,405,000 shares at $5.35 (no warrants).


Listing

Nano One received conditional approval to graduate to the TSX (May 2021) and graduated in June 2021.


Patents

June 2021, Three patents were granted to bring a total of 19 along with 35 applications pending. Patent were granted in China, Canada and the US. Chinese patent related to IP protection of One Pot Process. US Patent relates to lithium nickel manganese oxide (LNMO) cathode material, that is also known as high voltage spinel (HVS).


The One-Pot process is applicable to a range of cathode materials including LNMO, NMC and LFP. It forms durable single crystal cathode powders and protective coatings simultaneously. Nano One’s M2CAM (Metal to Cathode Active Material technology enables these materials to be made directly from metal powders and lithium carbonate for a cleaner and sustainable battery metals supply chain. These innovations are intended to drive down costs, energy and carbon footprint in the battery supply chain and align Nano One with the cost and environmental objectives of automotive companies, cathode producers, miners, investors, and global net-zero initiatives.


In short

Nano One's achievements during this period are notable. The One Pot process continues to be endorsed by multiple partners with some in advance stage of development towards commercialization. Specifically, the work with the Asian Cathode Producer and Global Automotive Company could have a material impact on revenue and valuation.


Eight Capital initiated coverage with a price target of $7.87 citing: We estimate that the company will achieve first revenues in 2023 and that revenues will grow steadily from that point as the technology becomes more widely adopted.


Note that $7.87 is a base case of which $1.94 is a bear case and $19.29 is a bull case.

Eight Capital also articulated a number of catalyst for further (re)valuation: i) Commercial terms with a partnership, ii) Advancement of existing partnerships, iii) Additional partners, iv) More proof of concept/testing, v) Up-listing to a senior exchange, vi) Positive regulatory developments and vii) Further government assistance.


Reviewing the releases since the Eight Capital coverage (April 6, 2021), it seems that some of these catalysts are not reflected in the current stock price. Perhaps valuation was ahead of itself before then, but it seems no longer the case.

DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.

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