- Quarterly revenue of US$780K with significant improvements to customer concentration
- Adjusted EBITDA1 loss of US$81K, an improvement over Q1 2026
- Manufacturing revenues excluding "green steel" customer increased US$391K or 100% YOY
Los Angeles, California--(Newsfile Corp. - October 8, 2025) - California Nanotechnologies Corp. (TSXV: CNO) (OTCID: CANOF) ("Cal Nano" or the "Company") is pleased to announce revenues of US$779,916 for the quarter ended August 31, 2025. This represents a decrease of 49% compared to the prior year. Adjusted EBITDA1 was a loss of US$80,909 for the fiscal quarter ended August 31, 2025, compared with positive Adjusted EBITDA of US$808,970 in the prior year.
Net loss for the fiscal quarter was US$292,423, compared to a net loss of US$655,031 in the prior fiscal year. The improvement in net loss was mainly due to realized and unrealized losses on share purchase warrants2 in Q2/FY2025. This was offset by lower revenues and gross profit, higher overhead from the Santa Ana manufacturing facility, and growth investments such as the ISO9001 and other certifications underway.
Diluted earnings per share for the fiscal year was $0.00 compared to diluted earnings per share of $0.00 for the same period last year. The financial statements are available on SEDAR+ at www.sedarplus.ca and on the Company's website.
"This quarter was affected by the full decrease in activity from our green steel customer," said CEO Eric Eyerman. "Our team is working hard to diversify and transition toward longer-term, recurring commercial contracts. As a result of these efforts, manufacturing revenues excluding the green steel customer, were up 100% year-over-year. Subsequent to the quarter, we also announced a Letter of Intent (LOI) for our first Spark Plasma Sintering (SPS) commercial production contract for high-performance military brakes. Ongoing advanced discussions with clients are underway, supporting our efforts to build a more sustainable business model."
Financial Highlights
| Amounts in USD | Three months ended August 31, 2025 | Three months ended August 31, 2024 | Period-over-period change | Six months ended August 31, 2025 | Six months ended August 31, 2024 | Period-over-period change |
| Revenues | 779,916 | 1,522,185 | (49%) | 1,496,469 | 3,271,011 | (54%) |
| Cost of Goods Sold | 297,196 | 268,116 | 11% | 605,688 | 867,269 | (30%) |
| Gross Profit | 482,720 | 1,254,069 | (62%) | 890,781 | 2,403,742 | (63%) |
| Gross Margin1 | 62% | 82% | (2000bps) | 60% | 73% | (1300bps) |
| Net Income/(Loss) | (292,423) | (655,031) | 55% | (740,310) | 41,011 | (1905%) |
| Income/(loss) Per Share -Diluted | $0.00 | $0.00 | - | $0.00 | $0.00 | - |
| EBITDA1 | (84,179) | (471,852) | 82% | (331,200) | 403,087 | (182%) |
| Adjusted EBITDA1 | (80,909) | 808,970 | (110%) | (233,616) | 1,563,435 | (115%) |
The decrease in revenues for Q2/FY2026 was primarily driven by the slowdown in the green steel customer manufacturing revenues. Revenues from the green steel customer were nil for the quarter, compared to US$1,122,350 for the same quarter in the prior fiscal year, when they represented 74% of revenues.
Manufacturing revenues from all other customers were US$779,916, representing a 100% increase year-over-year and showcasing the Company's efforts to build a more resilient revenue base. Cal Nano is focused on building a diversified client base through a combination of R&D and commercial production revenues, helping to improve the overall utilization of equipment and contribution margin with broader portfolio of potential customers.
Subsequent the quarter, Cal Nano announced a non-binding LOI to provide approximately US$1.0 million worth of SPS commercial production services for high-performance military brakes, starting in calendar year 2026. This follows the Company's first commercial production orders for its cryomilling technologies with Oerlikon Metco (US) Inc. and AbTech Industries Inc. announced earlier this year. Cal Nano continues to be in advanced discussions with existing and new customers for other commercial production mandates spanning several sectors including automotive, defense, energy, thermoelectrics, and industrial products.
Last month, Cal Nano submitted a provisional patent application relating to advanced armor applications that leverage SPS technologies. The Company is currently in preliminary discussions with partners to collaborate on the development of potential products and progress the technology readiness level. While discussions are in the early stages, this showcases Cal Nano's efforts to utilize its unique materials expertise and technologies to drive commercialization of advanced products.
For the remainder of FY2026, Cal Nano believes that it is well positioned to support potential growth with its key investments in personnel, capabilities, and over US$2 million in recent equipment purchases.
About California Nanotechnologies Corp.
At Cal Nano, we envision a world in which our advanced technologies are used to help make the most innovative products on this planet and beyond. With our unique expertise in processing metallurgic powders into parts, global leaders trust us to help push the boundaries of applied material science. Headquartered in Greater Los Angeles, California, Cal Nano hosts advanced processing and testing machinery and capabilities across two manufacturing facilities for materials research and production needs. Our customers range from Fortune 500 companies to startups with programs spanning aerospace, renewable energy, defense, and semiconductors.
For further information, please contact:
California Nanotechnologies Corp.
Eric Eyerman, CEO
T: +1 (562) 991-5211
info@calnanocorp.com
Panolia Investor Relations Inc.
Brandon Chow, Principal & Founder
T: +1 (647) 598-8815
brandon@panoliair.com
Non-IFRS Measures and Reconciliation of Non-IFRS Measures
This press release makes reference to certain non-IFRS measures. These non-IFRS measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing a further understanding of results of operations of Cal Nano from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the financial information of Cal Nano reported under IFRS. The Company uses non-IFRS measures such as EBITDA to provide investors with a supplemental measure of operating performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. Management also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess the Company's ability to meet its capital expenditure and working capital requirements.
"EBITDA" means the earnings before interest, income taxes, depreciation, and amortization, where interest is defined as net finance costs as per the consolidated statement of comprehensive income.
"EBITDA margin" means the earnings before interest, income taxes, depreciation, and amortization, where interest is defined as net finance costs as per the consolidated statement of comprehensive income as a percentage of total revenues.
"Adjusted EBITDA" refers to earnings before interest, income taxes, depreciation, amortization, share-based compensation, and the unrealized gain on share purchase warrants, with interest defined as net finance costs as per the consolidated statement of comprehensive income.
"Adjusted EBITDA margin" refers to earnings before interest, income taxes, depreciation, amortization, share-based compensation, and the unrealized gain or loss on share purchase warrants, with interest defined as net finance costs as per the consolidated statement of comprehensive income as a percentage of total revenues.
Reconciliations and Calculations
The tables set forth below provides a quantitative reconciliation of Gross Margin and EBITDA, which are Non-IFRS financial measures, to the most comparable IFRS measure disclosed in the Company's financial statements. The reconciliation of Non-IFRS measures to the most directly comparable measure calculated in accordance with IFRS is provided below where appropriate.
Gross Margin Reconciliation
| Amounts in USD | Three months ended August 31, 2025 | Three months ended August 31, 2024 | Six months ended August 31, 2025 | Six months ended August 31, 2024 |
| Revenues | 779,916 | 1,522,185 | 1,496,469 | 3,271,011 |
| Cost of Goods Sold | 297,196 | 268,116 | 605,688 | 867,269 |
| Gross Profit | 482,720 | 1,254,069 | 890,781 | 2,403,742 |
| Gross Margin | 62% | 82% | 60% | 73% |
EBITDA and Adjusted EBITDA Reconciliation
| Amounts in USD | Three months ended August 31, 2025 | Three months ended August 31, 2024 | Six months ended August 31, 2025 | Six months ended August 31, 2024 |
| Net Income/(Loss) | (292,423) | (655,031) | (740,310) | 41,011 |
| Depreciation & Amortization | 175,186 | 119,469 | 348,821 | 235,015 |
| Interest Expense | 33,058 | 62,905 | 60,289 | 126,256 |
| Income Tax Expense | - | 805 | - | 805 |
| EBITDA | (84,179) | (471,852) | (331,200) | 403,087 |
| EBITDA Margin | (11%) | (31%) | (22%) | 12% |
| Share-based Compensation | 95,566 | 75,466 | 191,132 | 96,821 |
| Realized Loss/(Gain) on Share Purchase Warrants | 82,776 | 318,478 | 170,438 | 318,478 |
| Unrealized Loss/(Gain) on Share Purchase Warrants | (175,072) | 886,878 | (263,986) | 745,049 |
| Adjusted EBITDA | (80,909) | 808,970 | (233,616) | 1,563,435 |
| Adjusted EBITDA Margin | (10%) | 53% | (16%) | 48% |
Derivative Liability Recognition for Warrant Issuance under IFRS
On October 30, 2023, the Company successfully closed an issuance of units comprising common shares and warrants, encompassing an aggregate of 5,000,000 warrants, each with an exercise price of CA$0.25. As a result of the Company reporting its financial results denominated in US dollars, and in adherence to the International Financial Reporting Standards (IFRS), the Company is required to report a derivative liability attributable to the aforementioned warrants. Consequently, the Company will recognize a non-cash charge or income inclusion on a quarterly basis, predicated upon the fluctuation in the market price of the Company's shares, until such time as the warrants either are exercised or expire.
Reader Advisory
Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking information in this press release includes, but is not limited to: future financial results, including anticipated profitability and/or lack thereof; statements about future plans, including statements about the planned expansion of the Company's manufacturing capacity, and new sites for the Company's production and headquarters; demand for the Company's services by current and future customers, including existing and future orders for the Company's SPS equipment and the anticipated revenue therefrom; and the expected future performance of the Company. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information. Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: general economic conditions in Canada, the United States and globally; a significant change in demand for the Company's services and products; industry conditions, governmental regulation, including environmental regulation; the effects of product development and need for continued technological change; the effect of government regulation and compliance on the Corporation and the industry; research and development risks; reliance on key personnel; operations in foreign jurisdictions; protection of intellectual property rights; contractual risk; third-party risk, risk of technological or scientific obsolescence; dependence of technical infrastructure; unanticipated operating events or performance; failure to obtain industry partner and other third party consents and approvals, if and when required; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; competition for, among other things, capital, skilled personnel and supplies; changes in tax laws; and the other risk factors disclosed under our profile on SEDAR+ at www.sedarplus.ca. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
1 Non-IFRS Measure
2 See disclosure under "Derivative Liability Recognition for Warrant Issuance under IFRS"
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/269681
SOURCE: California Nanotechnologies Corp.
