Mr. Carlo Valente reports

NANO ONE SIGNS DEFINITIVE AGREEMENT TO SELL AND LEASE BACK ITS CANDIAC BUILDING AND PROPERTY

Nano One Materials Corp. has entered into definitive agreements for the sale and leaseback of its Candiac building and surrounding property at 280 Liberte Ave., Candiac, Que., to Candiac Industrial Properties (I) LP (the purchaser) for estimated net proceeds of $15.7-million. This transaction significantly strengthens the company's cash balance while ensuring long-term operational stability in the province of Quebec through a 15-year lease agreement, with renewal provisions for up to an additional 15 years.

Highlights:

• $15.7-million in estimated net proceeds from sale of land and building, of which $2-million is a deferred payment in the form of vendor loan;
• Includes lease of at least 15 years and right of first offer to repurchase;
• Provides for operational continuity at the Candiac operations in Quebec;
• Strengthened balance sheet leverages government funding announced in 2024;
• Supports capacity expansion at Candiac to over 1,000 tonnes per annum of LFP (lithium-iron-phosphate) cathode production.

Carlo Valente, chief financial officer of Nano One, commented: "This transaction bolsters our balance sheet and helps leverage over $40-million in government funding and reimbursements that we secured and announced last year. It also accelerates the commercialization and capacity expansion of the Candiac operations to at least 1,000 tonnes per annum of LFP cathode production."

With Nano One's balance sheet now strengthened, the company is well positioned to advance its commercialization and technology licensing efforts with its strategic partners. The funds also enable it to scale up operations in Candiac and push toward revenue generation from future LFP production and licensing.

Key terms

The agreements are expected to close on or about Feb. 28, 2025, and include a vendor loan of $2-million that is a deferred payment and secured by an immovable hypothec, safeguarding Nano One's interests. The transaction costs and a lease security deposit are estimated at $1.3-million, resulting in estimated net proceeds to the company at closing of $13.7-million. The vendor loan incurs interest at 4 per cent per annum and the deferred payment is due $1-million plus interest upon the third anniversary and $1-million plus interest upon the sixth anniversary from the date of closing. In addition to the proceeds and pursuant to a capital investment agreement, a separate $3-million reserve will be financed by the purchaser and held in escrow to fund potential capital improvements, should the purchaser deem them necessary subsequent to closing.

Concurrent with closing of the transaction, Nano One will enter into a lease agreement for the property for an initial term of 15 years, with three optional five-year renewal periods. In addition, the company has the right of first offer should the purchaser decide to sell in the future. This arrangement provides long-term stability for the Candiac operations.

About Nano One Materials Corp.

Nano One Materials is a technology company changing how the world makes cathode active materials for lithium-ion batteries. Applications include stationary energy storage systems (ESSs), portable electronics and electric vehicles (EVs). The company's patented One-Pot process reduces costs, is easier to permit, and lowers energy intensity, environmental footprint and reliance on problematic supply chains. The company is helping to drive energy security, supply chain resilience, industrial competitiveness and increased performance through process innovation. Scalability is proven and being demonstrated at Nano One's LFP (lithium-iron-phosphate) pilot production plant in Quebec -- leveraging the only facility and expertise of its kind outside of Asia. Strategic collaborations and partnerships with international companies such as Sumitomo Metal Mining, Rio Tinto and Worley are supporting a design-one/build-many licensing growth strategy -- delivering cost-competitive, easier-to-permit and faster-to-market battery materials production solutions around the world. Nano One has received funding from the government of Canada, the government of the United States, the government of Quebec and the government of British Columbia.

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