Nanoco Group’s announcement that the CDX process has ended without an acceptable offer for its business operations is clearly a setback. Focus now turns solely to pursuing commercial opportunities in sensors and monetising the company’s display intellectual property (IP). While execution risk remains significant, we believe that Nanoco’s IP, balance sheet, commercial and litigation activities continue to provide a platform to deliver shareholder upside. The delivery of further joint development agreement (JDA) milestones and a positive litigation outcome with Shoei Chemical are the key proof points to understand valuation potential.

Nanoco’s announcement that it has filed a counterclaim and answer to the filing of a declaratory judgement action from Shoei signals that it will pursue the monetisation of its IP with Shoei, or its partners. It is not possible to estimate the likelihood of success, scale of potential damages/settlement or potential legal costs at this stage. However, it is worth noting that Nanoco’s counterclaim alleges infringement of four of the same patents used in the successful settlements with Samsung and LG. Uptake of quantum dots in computer monitors and notebooks has surged in recent years, enlarging the potential monetisation opportunity for Nanoco, if infringing quantum dots have been used. The litigation is being funded from the company’s existing cash reserves and the case is expected to come to trial in CY26.

Nanoco’s FY25 results were in line with expectations, with revenues from products and service of £1.3m, net cash of £14.0m and gross annual cash costs of £6m. The company continues to advance and diversify its opportunities in sensing. In particular, phase two of the joint development agreement (JDA) with the company’s first Asian partner is focused on achieving volume production readiness. The CDX Advisors review is nearing conclusion, with results expected to be announced after year-end, while the LG litigation is ongoing.