Mr. Paul Guedes reports

NANO ONE ANNOUNCES CLOSING OF SUMITOMO METAL MINING $16.9M STRATEGIC INVESTMENT AND COLLABORATION AGREEMENT

Nano One Materials Corp. has closed the strategic equity investment and collaboration with Sumitomo Metal Mining Co. Ltd. (SMM), a leading vertically integrated miner, refiner and producer of cathode active materials (CAM), announced on Sept. 25, 2023. SMM made an equity investment of $16,879,949.85 and the companies entered into a collaboration agreement (CA), under which they will work together to accelerate the commercial production of lithium iron phosphate (LFP), CAM and nickel-rich CAM chemistries, such as lithium nickel manganese cobalt oxide (NMC).

Investment and collaboration

SMM purchased, by way of private placement, 5,498,355 common shares of Nano One at a price of $3.07 per share for a total investment into Nano One of $16,879,949.85. The shares issued under the private placement equate to approximately 5 per cent of the current issued and outstanding shares of Nano One.

The CA involves various aspects primarily centred on supporting the development of battery ecosystems, with a particular focus on LFP and NMC production using the One-Pot process. The collaboration will support technical product optimization for both LFP and NMC as well as efforts to mitigate supply chain risks. These joint efforts are intended to strengthen and progress the development, design, construction and operation of Nano One's proposed LFP production-scale pilot plant, the piloting of nickel-rich and manganese-rich CAMs, and Nano One's first LFP commercial plant.

Additionally, the companies will look to explore business development opportunities, including future sales and technology licensing, forging long-term partnerships and identifying potential investment and financing opportunities to expand operations. In the pursuit of these shared business objectives, the companies intend to exchange relevant market information and technical expertise to improve the quality and cost of CAM produced by the One-Pot process at the Candiac facilities to meet SMM customer requirements.

The company intends to use this investment principally toward the conversion of its existing Candiac LFP manufacturing facility to a One-Pot production-scale pilot plant, nickel-rich and manganese-rich engineering, and piloting activities, and for working capital purposes.

Together with the closing of the private placement and the CA, the company entered into an investor rights agreement, whereby the company granted SMM a participation right in any future equity financings to maintain its pro rata ownership interest for a period of up to three years. Under the IRA, SMM has agreed to a standstill provision that, among other things, restricts SMM's ability to purchase additional shares without Nano One's consent for a period of 24 months and restricts SMM's ability to sell the shares for 12 months, subject to certain exemptions. In addition, the shares are subject to a restricted hold period of four months and one day under applicable Canadian securities legislation.

About Nano One Materials Corp.

Nano One is a clean technology company with a patented, scalable and low-carbon-intensity industrial process for the low-cost production of high performance lithium-ion battery cathode materials. With strategic collaborations and partnerships, including automotive OEMs (original equipment manufacturers) and strategic industry supply chain companies like BASF, Umicore and Rio Tinto, Nano One's technology is applicable to electric vehicles, energy storage and consumer electronics, reducing costs and carbon intensity while improving environmental impact. Nano One aims to pilot and demonstrate its technology as turnkey production solutions for licence, joint venture and independent production opportunities, leveraging Canadian talent and critical minerals for emerging markets in North America, Europe and the Indo-Pacific region. Nano One has received funding from SDTC (Sustainable Development Technology Canada) and the governments of Canada and British Columbia.

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