Cliff Note #76 - California Nanotechnologies | $CANOF / CNO.V
Could this tiny nanotechnology company be on the cusp of a growth inflection point?
We added California Nanotechnologies (CANOF) to our index yesterday. We wanted to share this information with you as quickly as possible and, therefore, initially only shared a brief summary. We are releasing a full post now. We did the same with Cliff Note #71 which we also fully updated.
Themes:
Run to $1 - Customer expansion - Capacity Expansion - Limited Competition
Data
Founded: 2005
Price: $0.24 (using CANOF)
Shares Outstanding: 48M FD (includes recent offering: 10M stock & 5M warrants).
Market Cap: $11.5M
TTM Revenue: $1.5M
LT Debt: $1.3M
Current Portion of LT Debt: $0
Cash: $1.1M
P/E trailing 12 months: 10x
P/E 2024 est: NA
EV/S trailing 12 months: 7.8x
What they do:
CANOF manufactures products for its customers using nanomaterials. For example, different types of smaller metal products. From what we understand so far, the production of a product can be accomplished through a “sintering” process, whereby high heat is applied to powdered material while it's being pressed into a graphite die or mold with a desired shape to form a solid product. On the flip side, the company can also manufacture products by using a low-temperature mechanism called cryo-milling.
Industries served: clean tech, aerospace, semiconductor, renewable energy, and defense.
Sales Breakdown: Manufacturing sales: 80% to 100%; Equipment sales: 0% to 20%
Here is the company’s description:
“Cal Nano hosts a complement of advanced processing and testing capabilities for your materials research & production needs. Multiple in-house Spark Plasma Sintering systems, cryogenic mills, mechanical testing, and tooling fabrication combine for agile ability to serve our customers. R&D and pilot-scale production services are performed by Cal Nano for customers across all industries, universities and labs. Programs range from Space, Nuclear, Aerospace, Energy, and much more.”
We thought this would be a good addition to the index to compliment our Cliff note #60 on CDTI, a company that actually produces nanomaterials. Nanomaterials are used in all sorts of products, like metals (to make them stronger, batteries (to make them more efficient), and everyday products like suntan lotion (to make the lotions less clumpy when applied to the skin).
CANOF is more of a one-source solution in that in addition to developing nanomaterials, they take a customer's or their own nanomaterial to create products at the R&D and/or commercial stage. They also sell sintering machines through a distributor relationship with a Japanese manufacturer.
It appears that being able to shape and create solid products from nanomaterials is a very specialized and difficult process. So, a company's edge hinges on its technical and design expertise.
Some learning material:
Sintering in nano-material technology involves heating particles at a high temperature, causing them to fuse and form a solid structure. This process enhances material density and strength, crucial for applications like ceramics and metal nanoparticles. The nanoscale allows for unique properties, impacting conductivity, catalytic activity, and mechanical strength, making sintering a vital step in optimizing nano-material properties for various technological advancements. Molds provide a template for the nano materials, influencing their arrangement during sintering. This is particularly useful when aiming for specific shapes or structures in nanotechnology applications. The use of molds allows for more precise control over the final product's geometry, ensuring consistency and enhancing the reproducibility of nano-material shapes.
Graphite die plays an important role in material processing, such as spark plasma sintering and hot pressing.