Nano One's Strategic Financing and Government Support: A Pathway to Long-Term Viability in the Battery Materials Sector

The global transition to clean energy and electrification hinges on the availability of secure, scalable, and sustainable battery materials. In this context, Nano One Materials Corp. (TSX: NNO) has emerged as a critical player, leveraging strategic financing and government support to position itself at the forefront of the lithium iron phosphate (LFP) cathode active material (CAM) market. As the company advances its capacity expansion and commercialization goals, its ability to align with macroeconomic trends-particularly the decarbonization of supply chains and geopolitical diversification-will determine its long-term viability and growth potential.

Government Grants and Loans: A Catalyst for Capacity Expansion

Nano One's recent financial milestones underscore the pivotal role of government support in de-risking capital-intensive projects. In 2023, the company secured C$18 million from the Government of Québec, comprising a C$15 million loan and a C$3 million grant, to advance its Candiac facility's demonstration and production capabilities according to company announcements. This funding not only reduced upfront capital outlays but also signaled confidence in Nano One's technology and its alignment with regional economic and environmental priorities.

Building on this foundation, the company received a C$5 million non-repayable contribution from Natural Resources Canada (NRCan) in 2025 under the Energy Innovation Program as reported by company press release. This grant,

coupled with existing government funding, is earmarked to scale production of One-Pot LFP CAMs and expand capacity at the Candiac facility. The first phase of this expansion aims to increase output to 800 tonnes per annum (tpa) by 2027, with potential for further growth to 1,000+ tpa according to press release. Such capacity upgrades are critical to meeting surging demand from energy storage systems (ESS), defense applications, and electric vehicles (EVs), all of which are central to global decarbonization efforts.

Strategic Financing: Strengthening Balance Sheets Without Dilution

The company has adopted a disciplined approach to capital raising, prioritizing non-dilutive financing to preserve shareholder value. In Q1 2025, the company executed a sale and leaseback of its Candiac facility, generating C$13.7 million in net proceeds and an additional C$2 million in deferred payments as reported in company announcement. This move not only optimized asset utilization but also provided flexibility to reinvest in automation and process optimization.

The company further diversified its funding sources through an At-The-Market (ATM) equity offering program launched in September 2025. By October 31, 2025, the program had raised C$2.6 million in net proceeds, with the potential to issue up to C$15 million in common shares according to corporate update. Such incremental capital raises allow Nano One to capitalize on favorable market conditions while avoiding the volatility of larger, one-time offerings. This flexibility is particularly valuable in a sector characterized by rapid technological shifts and fluctuating raw material prices.

Alignment with Global Supply Chain Priorities

Nano One's strategic positioning extends beyond financial engineering; it is deeply embedded in the geopolitical and industrial trends reshaping the battery materials landscape. The U.S. Department of Defense and other government bodies have recognized the importance of localized, secure supply chains for critical minerals and components as reported by company press release. Nano One's Candiac facility, supported by NRCan and Québec-based partners, aligns with these priorities by reducing reliance on overseas suppliers and enhancing North American resilience.

Moreover, the company's collaboration with entities like Next Generation Manufacturing Canada (NGen) and Sumitomo Metal Mining underscores its ability to integrate into global value chains while adhering to sustainability standards as reported in company announcement. These partnerships not only provide technical and financial synergies but also validate Nano One's role in a broader ecosystem of innovation.

Risks and Considerations

While Nano One's financial and strategic advantages are compelling, investors must remain cognizant of sector-specific risks. The battery materials market is highly competitive, with established players and new entrants vying for market share. Additionally, the success of Nano One's expansion hinges on the timely execution of capital projects and the sustained demand for LFP-based technologies. Regulatory shifts, supply chain disruptions, and technological obsolescence could also impact long-term growth trajectories.

Conclusion

Nano One's strategic financing and government support have created a robust foundation for scaling its operations and capturing a larger share of the LFP CAM market. By leveraging non-dilutive funding, optimizing asset utilization, and aligning with global supply chain priorities, the company is well-positioned to navigate the challenges of a rapidly evolving sector. However, its long-term success will depend on its ability to execute on capacity expansion plans, maintain technological leadership, and adapt to shifting market dynamics. For investors, Nano One represents a compelling case study in how strategic alignment with macroeconomic trends can drive sustainable growth in the energy transition era.