Mr. Doug Blakeway reports

NANOTECH SECURITY CORP. ANNOUNCES $12.0 MILLION BOUGHT DEAL FINANCING

Nanotech Security Corp. has entered into an agreement with a syndicate of underwriters led by Haywood Securities Inc. and including Echelon Wealth Partners Inc., Canaccord Genuity Corp. and GMP Securities LP, under which the underwriters have agreed to purchase, on a bought deal private placement basis, 10,434,783 common shares of Nanotech Security at a price of $1.15 per common share for aggregate gross proceeds of $12-million.

The company has agreed to grant the underwriters an option to purchase up to an additional 1,565,217 common shares, at the offering price, exercisable in whole or in part, at any time up to 48 hours prior to the closing of the offering. If the overallotment option is exercised in its entirety, an additional $1.8-million will be raised pursuant to the offering, and the aggregate gross proceeds of the offering will be approximately $13.8-million.

Net proceeds from the offering will be used to:

• Simplify and improve Nanotech's capital structure by redeeming the $4.2-million of convertible debentures that bear an interest rate of 12 per cent per annum and are convertible at $1.25;
• Increase production capacity for KolourOptik images and optical thin film, increasing and improving image mastering size and detail and potential technology partnerships;
• Strengthen the balance sheet for working capital and general corporate initiatives.

Nanotech chief executive officer Doug Blakeway commented: "This financing puts Nanotech in a very good position to execute on growth opportunities that could accelerate the growth of the company significantly over the near term. We are excited about contract prospects across several end markets, including our unique nano-optical image technology, as well as our commercially proven thin-film colour-shifting technology."

The common shares will be offered by way of a private placement to qualified investors in such provinces of Canada as the underwriters designate, and otherwise in those jurisdictions where the offering can lawfully be made under applicable private placement exemptions. The securities to be issued under the offering will have a hold period of four months and one day from the closing date of the offering.

The offering is expected to close on or about May 17, 2017, and is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange and the applicable securities regulatory authorities.

About Nanotech Security Corp.

Nanotech Security has been a leading innovator in the design and production of advanced banknote and commercial branding authentication products. Nanotech's KolourOptik and Plasmogram products are nanotechnology-based optical imaging product platforms originally inspired by the unique optical properties of the iridescent wings of the Blue Morpho butterfly. Its nano-optical products produce intense, high-definition optically variable images and colour-shift optical thin films. Activated by a simple tilt or rotation, with higher resolutions than the best LED displays, they are ideal for authentication of currency, passports and identification cards in addition to distinguishing branded goods from counterfeits.

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