Nano One Materials Corp (TSX:NANO, OTC:NNOMF) this week announced the strategic sale of its Quebec facility for more than $20 million, delivering more than two times the initial $10.25 million investment.
Chief operating officer Alex Holmes joined Proactive to discuss the development, which aligns with Nano One's capital-light business model.
Proactive: All right. Welcome back inside our proactive newsroom. And joining me now is Alex Holmes. He's the chief operating officer for Nano One Materials Corp. And Alex, good to have you back again. How are you?
Alex Holmes: I'm well, thank you. Thanks for having us back.
A really interesting news release out from the company talking about your building a property that you own in Quebec, and you've basically signed a deal to sell that off. But the reason you're doing it actually makes a great deal of sense. So why don't you sort of give us the news here—what's happening?
Sure. So, look, long story short, I think this is a really smart move to capitalize on an unnecessary asset. Our balance sheet, it totally aligns with our recent shareholder letter we put out about 2025 catalysts. You know, I think one of the things that's important to keep in mind is, you know, we're a technology company pursuing a capital-light business model.
We purchased this building in 2022 for $10.25 million, when really what we wanted was the experience of the team and equipment at the end of the day. And so now we've turned around over the last four or five months, sold that for more than $20 million. That's good business sense, right? That's a more than two times return on capital that still allows us to execute on our business plans.
Because you've signed a long-term lease, so you've got the equipment, you've got all the things that you need in order to get to the next stage of where you want to go. And it also gives you some financial runway as well by adding this money in.
And I think that's another key point to hit home with our shareholders is, you know, if we think about the approximately $40 million that we secured from government funding in 2024, that is for funding over the next couple of years. What this capital does is it unlocks that funding and gives us that financial runway through 2025 and into 2026, and so allows us to continue executing on the business plan.
You know, as a shareholder myself, I think this is important, but also to all our shareholders, this allows us to remove some, you know, dilutive equity raise in a very challenging small cap market. And until the opportunity is right. So I think this gives us a lot of good financial flexibility to see us through this year.
So, what will this year look like? Give people an idea of what's happening now that you've got this sort of out of the way and you know that the financing is in place for the rest of this year and into some of next as well.
So, look, I continue to emphasize the key points here. We believe we've got the most advanced, ex-China option for cost-competitive LFP. We're scaling that technology. We believe there's going to be clarity on commercial sales in 2025. And our licensing model and the work we're doing, early activities, those are going to start to bear fruit.
These are all things we recognize our shareholders are looking for. And, you know, we're laser-focused on those items.
And lastly, just on the business as a whole, you obviously have secured yourself where you're at financially, which is very important. You feel like you've got the right team in place now. Does this accelerate you now towards that commercialization path that you've talked about in the past that you just sort of mentioned there about the partners you're working with?
Look, we have critical know-how on the team, that is super important. This transaction, we keep all the equipment, we have long-term use of the building. We can expand our plant to north of a thousand tons per annum, with non-dilutive capital.
You know, I think what's often lost on kind of people is that our Candiac facility is a demo plant. That's a demonstration plant of our technology in production and tent commercial scale equipment. This is not a small pilot plant. And so that's often overlooked. And that's a massive value proposition as we engage with licensees looking to our technology. It completely stands us apart, right? It puts us ahead of the curve, ahead of the pack.
And the nice thing about Candiac is it also gives us an LFP sales kicker, right? At the end of the day, you know, we're engaging with customers for commercial sales. So it's got a number of, Nano One as a whole. We have a number of value propositions that our partners are looking for. And I think, today's announcement is just another step in the right direction, that helps us continue on pace.
Quotes have been lightly edited for clarity and style