For a battery-materials company still moving from technology development toward meaningful commercial production, access to capital can matter almost as much as the chemistry itself. Nano One Materials says it entered August with approximately C$20 million of government funding still available to draw, giving the Canadian company another source of financing as it expands its lithium iron phosphate operations in Quebec.
The figure arrives alongside C$19.3 million of cash reported at June 30 and after Nano One received C$12.3 million from government programs during the first half of 2026. Much of the attention is now turning to Candiac, Quebec, where an expansion is designed to lift total production capacity to roughly 800 tonnes annually. The funding provides breathing room, but converting that support into sustained commercial activity remains the larger test.
Funding Is Available, but It Is Not Cash Sitting in the Bank
Nano One’s latest disclosure makes an important distinction between money already held by the company and funding that it is still entitled to access. At June 30, Nano One had C$19.3 million of cash. Separately, management said that as of its August 11 management discussion and analysis, approximately C$20 million remained undrawn under government programs. The undrawn amount is available for eligible pre-commercial activities under the agreements behind those programs rather than functioning like an unrestricted C$20 million deposit that can immediately be spent on anything management chooses.
That distinction matters because government grants and loans are commonly tied to approved expenditures, milestones, documentation and reimbursement processes. Nano One identifies active programs involving Natural Resources Canada, Next Generation Manufacturing Canada, the U.S. Department of Defense, the Quebec government and NRC IRAP. The company must continue satisfying applicable program conditions as expenses are incurred. Still, having already contracted funding available can reduce the amount of fresh equity Nano One needs to raise while it moves equipment into Candiac and works through qualification with potential customers.
Government Support Has Already Changed Nano One’s Cash Profile
The impact of public funding is already visible in Nano One’s first-half numbers. The company began 2026 with about C$23.6 million in cash and finished June with approximately C$19.3 million, a decline of roughly C$4.3 million. That relatively contained decrease came during a period in which Nano One was funding operations, buying equipment and advancing its Candiac expansion. Government assistance played a substantial role: the company reported C$12.28 million of government funding received during the first six months of the year.
Nano One ended June with approximately C$17.6 million of working capital and C$18.2 million of shareholders’ equity. During the second quarter alone, about C$4.43 million of government grant inflows were allocated to operating activities, while first-quarter government inflows had included approximately C$3.13 million classified as government loan proceeds. Management says more than C$63 million of non-dilutive capital has been secured since the beginning of 2024 when government programs, sale-leaseback proceeds and land-sale proceeds are combined. For a pre-commercial technology company, that mix helps preserve cash without relying entirely on repeated share issuance.
The Funding Comes From Several Public Programs, Not One Cheque
The C$20 million remaining balance is the product of several programs rather than a single government commitment. Nano One’s filings show approximately C$12.28 million of government assistance received during the first half of 2026. That included about C$4.06 million connected with the U.S. Department of Defense, C$3.13 million from Investissement Québec, C$3.12 million from Natural Resources Canada, C$1.32 million through NRC-IRAP and related support, C$450,000 from Quebec’s Technoclimat program and smaller amounts from NGen and other programs.
The cross-border component is particularly notable. In September 2024, the U.S. Department of Defense announced a US$12.9 million Defense Production Act award to Nano One to help increase LFP cathode-active-material production in Candiac and support work in Burnaby, British Columbia. Canada has continued adding support as well. Ottawa announced C$5 million for commercialization and production expansion in late 2025, while Natural Resources Canada disclosed up to another C$3 million in 2026 for LFP research, development and optimization. Nano One’s filings say NRCan commitments announced since October 2025 total approximately C$12.31 million across related projects.
Candiac Is the Main Near-Term Test of Execution
Government backing ultimately matters only if Nano One can translate funded work into production capability and customer demand. That makes the Candiac facility the centre of the company’s near-term story. Nano One said detailed engineering for its Demonstration Line expansion was 85% complete by mid-July. Once commissioned, the project is expected to increase total facility capacity from roughly 200 tonnes per year to approximately 800 tonnes annually, with flexibility in the design to support further expansion. Commissioning remains targeted for the first half of 2027.
Procurement has also moved beyond planning. Major-equipment purchase orders were completed in March, initial equipment has arrived, and Nano One expects orders for the remaining smaller components to be completed by the end of August. About 95% of equipment by procurement value, as well as all intellectual-property-sensitive equipment, is being sourced from Canada, the United States and the European Union. The existing approximately 200-tonne-per-year pilot line remains available for smaller batches, customer samples and process optimization. The larger line is intended to produce the multi-tonne qualification batches needed before prospective customers consider higher-volume commitments.
LFP’s Market Shift Makes the Timing More Important
Nano One is expanding into a battery chemistry whose role has grown dramatically. International Energy Agency data show lithium iron phosphate batteries represented more than half of the global electric-car battery market in 2025 and more than 90% of global stationary battery-storage installations. Falling prices are one reason for the shift: the IEA estimated LFP battery prices fell by more than 15% in 2025, leaving them, on average, more than 40% cheaper than nickel-manganese-cobalt alternatives.
The strategic problem is where that material is produced. IEA analysis has estimated that more than 98% of LFP cathode material and LFP battery cells were produced in China in 2024. Broader battery manufacturing remains similarly concentrated, with China accounting for more than 80% of global battery-cell production and roughly 85% of cathode-active-material production in 2025. China also announced broader battery-material and technology export controls in October 2025, although significant portions were subsequently paused for one year. For governments seeking domestic or allied supply, those concentrations help explain why a relatively small Canadian cathode producer can attract support from both Ottawa and Washington.
Nano One Is Trying to Scale Through Licensing, Not Just Bigger Factories
Nano One’s strategy does not depend solely on building increasingly large plants with its own balance sheet. The company is positioning Candiac as a demonstration and qualification centre for a licensing model it calls “Design One Build Many.” In June, Nano One and engineering group Worley Chemetics completed a commercial-ready One-Pot LFP cathode package. Potential customers can license Nano One’s process while using their preferred engineering contractor, or use the more integrated package developed with Worley, which includes process design, equipment specifications, vendor information and cost estimates.
That approach could be important because cathode plants are capital-intensive. A comparative engineering study prepared with Worley estimated Nano One’s process could require at least 30% less capital and up to 30% lower operating costs than the conventional method examined, while using substantially less process energy. Those figures remain engineering estimates rather than proof from a large commercial network, making successful deployment crucial. Nano One nevertheless has established relationships with major industrial groups. Rio Tinto made a US$10 million strategic equity investment in 2022, while Sumitomo Metal Mining later invested in and began collaborating with Nano One on cathode manufacturing technology.
The C$20 Million Cushion Does Not Remove Commercial Risk
The undrawn funding strengthens Nano One’s financing position, but it should not be confused with a guarantee that commercialization will proceed exactly as planned. Government funding remains subject to program requirements and eligible expenditures, while the Candiac expansion still has construction, installation, commissioning and scale-up work ahead. Nano One itself identifies potential cost overruns, delays, funding availability, customer qualification and the conversion of sampling programs into commercial contracts among the risks facing its plans.
That makes the next milestones more important than the headline funding number alone. Management is targeting initial commercial LFP supply agreements for defence and energy-storage applications, while the larger demonstration line is intended to unlock higher-volume customer qualification, licensing discussions and possible joint ventures. Investors will therefore be watching whether the C$20 million is drawn efficiently as eligible projects advance, whether Candiac remains on schedule for 2027 commissioning, and whether qualification work turns into repeatable revenue. Government support gives Nano One additional runway to attempt that transition. The harder task is demonstrating that customers are prepared to pay for the technology at commercial scale.
