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File: News Release Q1 2015 - revised final.docx
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Nanotech Announces First Quarter 2015 Results
Security Features Driving International Revenue Growth
VANCOUVER, British Columbia - March 2, 2015 - Nanotech Security Corp. (TSXV: NTS) (OTCQX: NTSFF), ("Nanotech" or the "
--->Company") today released its financial results for the three month period ended December 31, 2014.
Highlights from Q1 2015
Security Features revenues exceed $1 million. The Fortress Optical Features Ltd. ("FOF") acquisition contributed its
--->first full quarter, which was FOF's strongest quarter since inception.
Received sales orders from three new customers. Total value of these orders is in excess of $1.3 million. The improv
--->ed outlook and the growing pipeline of other new commercial opportunities has prompted Nanotech to increase capacity a
--->t the facility.
Added second shift to Thurso, Quebec facility to increase production capacity. Integration continues to ramp smoothly
---> as pipeline expands.
Signed banknote security feature development contract with a prominent issuing authority. The contract commenced in t
--->he first quarter and is valued at approximately $1,000,000 per year with potential for renewal.
Granted two new patents for advanced security features. The United States Patent and Trademark Office granted one pat
--->ent in nanotechnology and another in Optical Thin Film ("OTF"). Nanotech expects to capitalize on the OTF patent in t
--->he immediate future.
Doug Blakeway, Nanotech CEO commented, "I am extremely pleased with how the recent Fortress Optical acquisition has tr
--->ansformed our Company." He added, "During the first ninety days, major banknote customers have reacted favourably to
--->the new Nanotech, and we are excited about the significant revenue opportunities that the acquisition's sales channels
---> have generated. Non-banknote prospects have also requested samples of Nanotech's portfolio of security and branding
--->products, giving us further confidence that the acquisition was the correct strategy for the Company, and that we are
--->executing according to plan."
Selected Financial Information
All results are reported in Canadian dollars and are prepared in accordance with International Financial Reporting Sta
--->ndards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
Three months ended
December 31,
$
%
2014
2013
Change
Change
Revenue
$ 1,541,008
$ 557,319
$ 983,689
177 %
Gross profit
$ 531,350
$ 188,049
$ 343,301
183 %
Gross profit %
34%
34%
2 %
Net loss
$ (931,271)
$ (693,276)
$ (237,995)
(34) %
Net earnings (loss) per share -basic and diluted
$ (0.02)
$ (0.02)
$ -
(8) %
Net cash used in operating activities
$ (1,119,076)
$ (584,041)
$ (535,035)
(92) %
Weighted average number of common shares
48,332,771
38,756,136
December 31,
September 30,
$
%
2014
2014
Change
Change
Total Assets
$ 28,832,034
$ 29,749,852
$ (917,818)
(3) %
Total long term liabilities
$ 5,500,000
$ 6,100,000
$ (600,000)
(10) %
Total Equity
$ 21,284,867
$ 22,027,680
$ (742,813)
(3) %
Revenues for the three months ended December 31, 2014 increased by $984,000 or 177% to $1,541,000 compared to $557,000
---> in the same period last year. The increased revenues was a result of revenue generated by the new Security Features
--->business unit which delivered revenues in excess of $1 million primarily from the delivery of Optical Thin Film and de
--->velopment contracts. The newly acquired Thurso production facility achieved its largest quarterly revenues since the
--->business was founded three years ago. This growth was partially offset by a decline in Surveillance revenues of appro
--->ximately $61,000 as a number of surveillance vans were delivered in January 2015 after the December 31, 2014 quarter e
--->nd.
The net loss increased from $693,000 to $931,000 which reflected the increase in costs related to the recent Fortress
--->Optical acquisition. This largely represented an increase in depreciation and amortization of $233,000 related to the
---> machinery and building, an increase in share based compensation of $110,000, and general overheads, including salarie
--->s and administrative costs, offset by a gain on revaluation of contingent shares of $600,000.
Corporate Update
Subsequent to the acquisition, the Company now operates its business through two newly named business units - Security
---> Features (Nanotech and FOF operations) and Surveillance (Tactical Technologies Inc. operations). The Company's busin
--->ess units are strategic business units that offer different products and services. They are managed separately becaus
--->e each business is in a different stage in its life cycle and require different sales and marketing strategies.
Security Features
Security Features provides light based recognition nanotechnology and OTF for use in anti-counterfeiting, authenticati
--->on processes, and luxury goods including currency, legal documents, and commercial products. The Company conducts res
--->earch at its Burnaby, BC head office, its research and production facility in Thurso, QC, Canada, and at 4D Labs nanof
--->abrication facility, which is a Canadian federal government sponsored facility located at Simon Fraser University in B
--->urnaby.
The nanotechnology employs arrays of billions of nano-holes that are impressed or embossed onto a substrate material s
--->uch as polymer or metal. These arrays yield unique light signatures (visual images) that cannot be easily reproduced
--->by a third party without access to the technology and sophisticated equipment needed to create the arrays. These opti
--->cal features can be directly applied to products creating unique optical signatures that are both overt (naked-eye-vis
--->ible) and covert (readable only by machine). These features are being designed to be suitable for a variety of commer
--->cial security and authentication applications and branding formats.
Surveillance
Surveillance designs and sells a wide range of sophisticated surveillance and intelligence gathering equipment and con
--->ducts surveillance training for the law enforcement and defense industries in the United States and Canada. Surveilla
--->nce conducts its research, production and training at its facility in Holmes, PA, USA.
During the quarter, the Surveillance segment continued to build and outfit surveillance vans for undercover operations
---> and delivered accredited classes in electronic surveillance.
Outlook
The Company completed the three months ended December 31, 2014 with approximately $2.7 million in cash and cash equiva
--->lents. Subsequent to the quarter the Company collected a further $540,000 through the exercise of warrants that were
--->expiring in February 2015.
With the acquisition of FOF in September 2014, the Security Features business has become an increasingly significant c
--->omponent of the revenue of Nanotech. Sales of OTF and development projects were strong in the first quarter, and the
--->Company is well positioned to continue increasing the business in the second quarter.
The improved outlook and the growing pipeline of other new commercial opportunities has prompted Nanotech to increase
--->capacity at its production facility. During the quarter the Company delivered in excess of 100,000m2 of OTF, surpassi
--->ng the average total annual volumes prior to the acquisition. The addition of the second shift, combined with complet
--->ing some minor equipment upgrades occurring in the next few months will increase the production capacity to 1,000,000m
--->2, with the capability to expand to over 2,000,000m2 through additional shifts, and expand capacity beyond that, throu
--->gh partnerships, or further capital investment.
Nanotech recently announced that it has signed a contract with an issuing authority of a prominent country to develop
--->a unique, optically-variable, security feature to be incorporated into various denominations of polymer, paper-based,
--->and composite banknotes and security documents. The contract commenced in the first quarter and is valued at approxim
--->ately $1,000,000 per year with a potential one year renewal option. Upon completion of this project, Nanotech's new t
--->echnology will increase security confidence beyond current, legacy, options available in the market.
Nanotech Security Corp.
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
Three months ended December 31, 2014 and 2013
(In Canadian dollars)
2014
2013
Revenue
$ 1,541,008
$ 557,319
Cost of sales
1,009,658
369,270
531,350
188,049
Expenses
Research and development
847,696
409,985
General and administration
933,905
343,134
Sales and marketing
273,022
127,303
2,054,623
880,422
Loss before other expenses (income)
(1,523,273)
(692,373)
Other expenses (income)
Foreign exchange (gain) loss
(26,810)
10,775
Finance expense
34,808
(1,027)
Gain on revaluation of contingent shares
(600,000)
-
Gain on sale of fixed asset
-
(8,845)
(592,002)
903
Net loss
(931,271)
(693,276)
Unrealized foreign exchange gain (loss)
on translation of foreign operation
(23,388)
27,467
Total comprehensive loss for the period
$ (954,659)
$ (665,809)
Loss per share
Basic and diluted
$ (0.02)
$ (0.02)
Weighted average number of common shares
Basic and diluted
48,332,771
38,756,136
Nanotech Security Corp.
Consolidated Statements of Financial Position
(Unaudited)
(In Canadian dollars)
December 31,
September 30,
2014
2014
Assets
Current assets:
Cash and cash equivalents
$ 2,685,418
$ 3,964,645
Accounts receivable
1,361,304
526,410
Inventory
545,387
598,526
Prepaid expenses and other assets
137,586
188,858
4,729,695
5,278,439
Property, plant and equipment
18,966,747
18,995,321
Intangible assets
3,747,134
4,087,634
Goodwill
1,388,458
1,388,458
$ 28,832,034
$ 29,749,852
Liabilities and shareholders' equity
Current liabilities:
Accounts payable and accrued liabilities
$ 2,022,167
$ 1,597,172
Deferred revenue
25,000
25,000
2,047,167
1,622,172
Long term liabilities:
Note payable
3,000,000
3,000,000
Contingent consideration shares
2,500,000
3,100,000
7,547,167
7,722,172
Shareholders' equity
Share capital
39,631,316
39,557,066
Share based payment reserve
1,281,166
1,143,570
Deficit
(19,549,678)
(18,618,407)
Accumulated other comprehensive income
(77,937)
(54,549)
21,284,867
22,027,680
$ 28,832,034
$ 29,749,852
Nanotech Security Corp.
Consolidated Statements of Cash Flows
(Unaudited)
Three months ended December 31, 2014 and 2013
(In Canadian dollars)
2014
2013
Operating activities:
Net loss
$ (931,271)
$ (693,276)
Items not involving cash:
Depreciation and amortization
580,087
346,751
Share based compensation
137,596
27,946
Gain on revaluation of contingent shares
(600,000)
-
Gain on sale of asset
-
(8,845)
Non-cash working capital changes
(305,488)
(256,617)
Cash used in operating activities
(1,119,076)
(584,041)
Investing activities:
Purchase of property and equipment, net of disposals
(206,292)
9,491
Cash used in investing activities
(206,292)
9,491
Financing activities:
Issuance of shares for warrants exercised
74,250
-
Cash provided by financing activities
74,250
-
Effect of foreign exchange on cash and cash equivalents
(28,109)
26,027
Decrease in cash and cash equivalents
(1,279,227)
(548,523)
Cash and cash equivalents, beginning of period
3,964,645
4,155,811
Cash and cash equivalents, end of period
$ 2,685,418
$ 3,607,288
FORWARD-LOOKING STATEMENTS
The discussion and analysis in this news release contains forward-looking statements concerning anticipated developmen
--->ts in our operations in future periods, the adequacy of our financial resources, and the events or condition that may
--->occur in the future. Forward-looking statements are frequently, but not always, identified by words such as "expects"
--->, "anticipates", "believes", "intends", "estimates", "predicts", "potential", "targeted" "plans", "possible" and simil
--->ar expressions, or statements that events, conditions or results "will", "may", "could" or "should" occur or be achiev
--->ed.
These forward-looking statements include, without limitation, statements about our market opportunities, strategies, c
--->ompetition, and the Company's views that its nano-optical and optical thin film technologies will continue to show pro
--->mise for mass production and commercial application. Other forward-looking statements imply that the Company will rem
--->ain capable of being financed and/or will be able to partner development until commercial sales are eventually realize
--->d. The principal risks related to these forward-looking statements are that the Company's intellectual property claim
--->s will not prove sufficiently broad or enforceable to provide the necessary commercial protection and to attract the n
--->ecessary capital and/or that the Company's products will not be able to displace entrenched hologram, metalized strip
--->tagging, and other conventional anti-counterfeiting technologies sufficiently to allow for profitability.
Our forward-looking statements are based on the beliefs, expectations and opinions of management on the date the state
--->ments are made. Consequently, all forward-looking statements made in this discussion and analysis of the financial co
--->nditions and results of operations or the documents incorporated by reference are qualified by this cautionary stateme
--->nt and there can be no assurance that actual results or developments anticipated will be realized. For additional inf
--->ormation with respect to certain of these risks or factors reference should be made to the "Business Risks and Uncerta
--->inties" section of the MD&A and notes to the consolidated financial statements, as well as with the Company's continuo
--->us disclosure materials filed from time to time with Canadian securities regulatory authorities, which are available o
--->nline at www.sedar.com. Nanotech disclaims any intention or obligation to update or revise any forward-looking statem
--->ents, whether as a result of new information, future events or otherwise, other than as required by law, rule or regul
--->ation. You should not place undue reliance on forward-looking statements.
About Nanotech Security
Through its security and surveillance divisions, Nanotech Security Corp. has been a leading innovator in the design an
--->d production of advanced security products and surveillance solutions for a number of years. Nanotech's KolourOptik(T
--->M) and Plasmogram(TM) products are nanotechnology based product platforms originally inspired by the unique optical pr
--->operties of the iridescent wings of the Blue Morpho butterfly. Our security products produce intense, high definition
---> optically-variable images and colour-shift optical thin films. Activated by a simple tilt or rotation, with higher r
--->esolutions than the best LED-displays, they are ideal for authentication of currency, passports, and identification ca
--->rds in addition to distinguishing branded goods from counterfeits. Our surveillance division designs and manufactures
---> sophisticated surveillance and intelligence gathering communications and forensic equipment for the law enforcement a
--->nd intelligence community as well as a state of the art training academy where the Company provides technical surveill
--->ance training to the law enforcement community.
Additional information about Nanotech can be found at the Company's website www.nanosecurity.ca, the Canadian disclosu
--->re filings website www.sedar.com or the OTCMarkets disclosure filings website www.otcmarkets.com.
# # #
Canada Investor Relations: U.S. Investor Relations:
Sean Peasgood - Sophic Capital Inc. Dave Mossberg - Three Part Advisors, LLC
sean@SophicCapital.com +1. 817.310.0051
+1.416.565.2805
Media Contact:
Jackie Henry
jp@nanosecurity.ca
+1.778.384.3384
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.
File: News Release Q1 2015 - revised final.pdf
News Release
TSXV, Tier 1: "NTS"
OTCQX: "NTSF
--->F"
Nanotech Announces First Quarter 2015 Results
Security Features Driving International Revenue Growth
VANCOUVER, British Columbia � March 2, 2015 � Nanotech Security Corp. (TSXV: NTS) (OTCQX: NTSFF),
("Nanotech" or the "Company") today released its financial results for the three month period ended
December 31, 2014.
Highlights from Q1 2015
Security Features revenues exceed $1 million. The Fortress Optical Features Ltd. ("FOF") acquisitio
--->n
contributed its first full quarter, which was FOF's strongest quarter since inception.
Received sales orders from three new customers. Total value of these orders is in excess of $1.3 million.
The improved outlook and the growing pipeline of other new commercial opportunities has prompted
Nanotech to increase capacity at the facility.
Added second shift to Thurso, Quebec facility to increase production capacity. Integration continues to
ramp smoothly as pipeline expands.
Signed banknote security feature development contract with a prominent issuing authority. The
contract commenced in the first quarter and is valued at approximately $1,000,000 per year with
potential for renewal.
Granted two new patents for advanced security features. The United States Patent and Trademark
Office granted one patent in nanotechnology and another in Optical Thin Film ("OTF"). Nanotech expects
to capitalize on the OTF patent in the immediate future.
Doug Blakeway, Nanotech CEO commented, "I am extremely pleased with how the recent Fortress Optical
acquisition has transformed our Company." He added, "During the first ninety days, major banknote
customers have reacted favourably to the new Nanotech, and we are excited about the significant rev
--->enue
opportunities that the acquisition's sales channels have generated. Nonbanknote prospects have also
requested samples of Nanotech's portfolio of security and branding products, giving us further confid
--->ence
that the acquisition was the correct strategy for the Company, and that we are executing according to plan."
NANOTECH SECURIT
--->Y CORP.
#308 2999 Unde
--->rhill Avenue
Burnaby, B.C.
--->V5A 3C2
www.nanosecurity.c
--->a
pg. 1 Office: +1.604.42
--->0.0830
Selected Financial Information
All results are reported in Canadian dollars and are prepared in accordance with International Financial
--->
Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
--->
Three months ended
December 31,
---> $ %
2014 2013 C
--->hange Change
Revenue $ 1,541,008 $ 557,319 $
---> 983,689 177 %
Gross profit $ 531,350 $ 188,049 $
---> 343,301 183 %
Gross profit % 34% 34%
---> 2 %
Net loss $ (931,271) $ (693,276) $
---> (237,995) (34) %
Net earnings (loss) per share basic and diluted $ (0.02) $ (0.02) $
---> (8) %
Net cash used in operating activities $ (1,119,076) $ (584,041) $
---> (535,035) (92) %
Weighted average number of common shares 48,332,771 38,756,136
--->
December 31, September 30, $
---> %
2014 2014 Change
---> Change
Total Assets $ 28,832,034 $ 29,749,852 $ (917,81
--->8) (3) %
Total long term liabilities $ 5,500,000 $ 6,100,000 $ (600,0
--->00) (10) %
Total Equity $ 21,284,867 $ 22,027,680 $ (742,81
--->3) (3) %
Revenues for the three months ended December 31, 2014 increased by $984,000 or 177% to $1,541,000
compared to $557,000 in the same period last year. The increased revenues was a result of revenue
generated by the new Security Features business unit which delivered revenues in excess of $1 million
primarily from the delivery of Optical Thin Film and development contracts. The newly acquired Thurso
production facility achieved its largest quarterly revenues since the business was founded three years a
--->go.
This growth was partially offset by a decline in Surveillance revenues of approximately $61,000 as a n
--->umber
of surveillance vans were delivered in January 2015 after the December 31, 2014 quarter end.
The net loss increased from $693,000 to $931,000 which reflected the increase in costs related to the
---> recent
Fortress Optical acquisition. This largely represented an increase in depreciation and amortization of
$233,000 related to the machinery and building, an increase in share based compensation of $110,000, an
--->d
general overheads, including salaries and administrative costs, offset by a gain on revaluation of conti
--->ngent
shares of $600,000.
Corporate Update
Subsequent to the acquisition, the Company now operates its business through two newly named business
units � Security Features (Nanotech and FOF operations) and Surveillance (Tactical Technologies Inc.
operations). The Company's business units are strategic business units that offer different products an
--->d
services. They are managed separately because each business is in a different stage in its life cycl
--->e and
require different sales and marketing strategies.
---> NANOTECH SECURITY CORP.
---> #308 2999 Underhill Avenue
---> Burnaby, B.C. V5A 3C2
---> www.nanosecurity.ca
pg. 2
---> Office: +1.604.420.0830
Security Features
Security Features provides light based recognition nanotechnology and OTF for use in anticounterfeiting,
authentication processes, and luxury goods including currency, legal documents, and commercial products.
The Company conducts research at its Burnaby, BC head office, its research and production facility in Thurso,
QC, Canada, and at 4D Labs nanofabrication facility, which is a Canadian federal government sponsored
facility located at Simon Fraser University in Burnaby.
The nanotechnology employs arrays of billions of nanoholes that are impressed or embossed onto a
substrate material such as polymer or metal. These arrays yield unique light signatures (visual images)
---> that
cannot be easily reproduced by a third party without access to the technology and sophisticated equipme
--->nt
needed to create the arrays. These optical features can be directly applied to products creating uniq
--->ue
optical signatures that are both overt (nakedeyevisible) and covert (readable only by machine). These
features are being designed to be suitable for a variety of commercial security and authentication
applications and branding formats.
Surveillance
Surveillance designs and sells a wide range of sophisticated surveillance and intelligence gathering
equipment and conducts surveillance training for the law enforcement and defense industries in the Unite
--->d
States and Canada. Surveillance conducts its research, production and training at its facility in Holme
--->s, PA,
USA.
During the quarter, the Surveillance segment continued to build and outfit surveillance vans for underco
--->ver
operations and delivered accredited classes in electronic surveillance.
Outlook
The Company completed the three months ended December 31, 2014 with approximately $2.7 million in
cash and cash equivalents. Subsequent to the quarter the Company collected a further $540,000 through the
exercise of warrants that were expiring in February 2015.
With the acquisition of FOF in September 2014, the Security Features business has become an increasingl
--->y
significant component of the revenue of Nanotech. Sales of OTF and development projects were strong in
--->
the first quarter, and the Company is well positioned to continue increasing the business in the secon
--->d
quarter.
The improved outlook and the growing pipeline of other new commercial opportunities has prompted
Nanotech to increase capacity at its production facility. During the quarter the Company delivered in
--->excess
of 100,000m2 of OTF, surpassing the average total annual volumes prior to the acquisition. The additio
--->n of
the second shift, combined with completing some minor equipment upgrades occurring in the next few
months will increase the production capacity to 1,000,000m2, with the capability to expand to over
2,000,000m2 through additional shifts, and expand capacity beyond that, through partnerships, or further
capital investment.
Nanotech recently announced that it has signed a contract with an issuing authority of a prominent cou
--->ntry
to develop a unique, opticallyvariable, security feature to be incorporated into various denominations of
--->
polymer, paperbased, and composite banknotes and security documents. The contract commenced in the
first quarter and is valued at approximately $1,000,000 per year with a potential one year renewal opt
--->ion.
Upon completion of this project, Nanotech's new technology will increase security confidence beyond
current, legacy, options available in the market.
NANOTECH SECUR
--->ITY CORP.
#308 2999 Und
--->erhill Avenue
Burnaby, B.C.
---> V5A 3C2
www.nanosecurity
--->.ca
pg. 3 Office: +1.604.4
--->20.0830
Nanotech Security Corp.
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
Three months ended December 31, 2014 and 2013
(In Canadian dollars)
2014 2013
Revenue $ 1,541,008 $ 557,319
Cost of sales 1,009,658 369,270
531,350 188,049
Expenses
Research and development 847,696 409,985
General and administration 933,905 343,134
Sales and marketing 273,022 127,303
2,054,623 880,422
Loss before other expenses (income) (1,523,273) (692,373)
Other expenses (income)
Foreign exchange (gain) loss (26,810) 10,775
Finance expense 34,808 (1,027)
Gain on revaluation of contingent shares (600,000) -
Gain on sale of fixed asset - (8,845)
(592,002) 903
Net loss (931,271) (693,276)
Unrealized foreign exchange gain (loss)
on translation of foreign operation (23,388) 27,467
Total comprehensive loss for the period $ (954,659) $ (665,809)
Loss per share
Basic and diluted $ (0.02) $ (0.02)
Weighted average number of common shares
Basic and diluted 48,332,771 38,756,136
NANOTECH SECURITY CORP.
#308 2999 Underhill Avenue
Burnaby, B.C. V5A 3C2
www.nanosecurity.ca
pg. 4 Office: +1.604.420.0830
Nanotech Security Corp.
Consolidated Statements of Financial Position
(Unaudited)
(In Canadian dollars)
December 31, September 30,
2014 2014
Assets
Current assets:
Cash and cash equivalents $ 2,685,418 $ 3,964,645
Accounts receivable 1,361,304 526,410
Inventory 545,387 598,526
Prepaid expenses and other assets 137,586 188,858
4,729,695 5,278,439
Property, plant and equipment 18,966,747 18,995,321
Intangible assets 3,747,134 4,087,634
Goodwill 1,388,458 1,388,458
$ 28,832,034 $ 29,749,852
Liabilities and shareholders' equity
Current liabilities:
Accounts payable and accrued liabilities $ 2,022,167 $ 1,597,172
Deferred revenue 25,000 25,000
2,047,167 1,622,172
Long term liabilities:
Note payable 3,000,000 3,000,000
Contingent consideration shares 2,500,000 3,100,000
7,547,167 7,722,172
Shareholders' equity
Share capital 39,631,316 39,557,066
Share based payment reserve 1,281,166 1,143,570
Deficit (19,549,678) (18,618,407)
Accumulated other comprehensive income (77,937) (54,549)
21,284,867 22,027,680
$ 28,832,034 $ 29,749,852
NANOTECH SECURITY CORP.
#308 2999 Underhill Avenue
Burnaby, B.C. V5A 3C2
www.nanosecurity.ca
pg. 5 Office: +1.604.420.0830
Nanotech Security Corp.
Consolidated Statements of Cash Flows
(Unaudited)
Three months ended December 31, 2014 and 2013
(In Canadian dollars)
2014
---> 2013
Operating activities:
Net loss $ (931,271) $ (693,
--->276)
Items not involving cash:
Depreciation and amortization 580,087 346,
--->751
Share based compensation 137,596 27,
--->946
Gain on revaluation of contingent shares (600,000)
---> -
Gain on sale of asset - (8,
--->845)
Non-cash working capital changes (305,488) (256,
--->617)
Cash used in operating activities (1,119,076) (584,
--->041)
Investing activities:
Purchase of property and equipment, net of disposals (206,292) 9
--->,491
Cash used in investing activities (206,292) 9
--->,491
Financing activities:
Issuance of shares for warrants exercised 74,250
---> -
Cash provided by financing activities 74,250
---> -
Effect of foreign exchange on cash and cash equivalents (28,109) 26
--->,027
Decrease in cash and cash equivalents (1,279,227) (548,
--->523)
Cash and cash equivalents, beginning of period 3,964,645 4,155,
--->811
Cash and cash equivalents, end of period $ 2,685,418 $ 3,607,28
--->8
FORWARDLOOKING STATEMENTS
The discussion and analysis in this news release contains forwardlooking statements concerning anticipated
--->
developments in our operations in future periods, the adequacy of our financial resources, and the events or
condition that may occur in the future. Forwardlooking statements are frequently, but not always,
identified by words such as "expects", "anticipates", "believes", "intends", "estimates", "predicts",
"potential", "targeted" "plans", "possible" and similar expressions, or statements that events, conditions
---> or
results "will", "may", "could" or "should" occur or be achieved.
These forwardlooking statements include, without limitation, statements about our market opportunities,
strategies, competition, and the Company's views that its nanooptical and optical thin film technologies
---> will
continue to show promise for mass production and commercial application. Other forwardlooking
statements imply that the Company will remain capable of being financed and/or will be able to partner
--->
development until commercial sales are eventually realized. The principal risks related to these forwar
--->d
looking statements are that the Company's intellectual property claims will not prove sufficiently broad
---> or
NANOTECH SECURIT
--->Y CORP.
#308 2999 Under
--->hill Avenue
Burnaby, B.C.
--->V5A 3C2
www.nanosecurity.c
--->a
pg. 6 Office: +1.604.420
--->.0830
enforceable to provide the necessary commercial protection and to attract the necessary capital and/or
--->that
the Company's products will not be able to displace entrenched hologram, metalized strip tagging, and other
conventional anticounterfeiting technologies sufficiently to allow for profitability.
Our forwardlooking statements are based on the beliefs, expectations and opinions of management on the
date the statements are made. Consequently, all forwardlooking statements made in this discussion and
analysis of the financial conditions and results of operations or the documents incorporated by reference are
qualified by this cautionary statement and there can be no assurance that actual results or development
--->s
anticipated will be realized. For additional information with respect to certain of these risks or fa
--->ctors
reference should be made to the "Business Risks and Uncertainties" section of the MD&A and notes to t
--->he
consolidated financial statements, as well as with the Company's continuous disclosure materials filed fr
--->om
time to time with Canadian securities regulatory authorities, which are available online at www.sedar.com
--->.
Nanotech disclaims any intention or obligation to update or revise any forwardlooking statements, whether
--->
as a result of new information, future events or otherwise, other than as required by law, rule or r
--->egulation.
You should not place undue reliance on forwardlooking statements.
About Nanotech Security
Through its security and surveillance divisions, Nanotech Security Corp. has been a leading innovator in
---> the
design and production of advanced security products and surveillance solutions for a number of years.
Nanotech's KolourOptikTM and PlasmogramTM products are nanotechnology based product platforms
originally inspired by the unique optical properties of the iridescent wings of the Blue Morpho butterfly. Our
security products produce intense, high definition opticallyvariable images and colourshift optical thin films.
Activated by a simple tilt or rotation, with higher resolutions than the best LEDdisplays, they are id
--->eal for
authentication of currency, passports, and identification cards in addition to distinguishing branded good
--->s
from counterfeits. Our surveillance division designs and manufactures sophisticated surveillance and
intelligence gathering communications and forensic equipment for the law enforcement and intelligence
community as well as a state of the art training academy where the Company provides technical surveillance
training to the law enforcement community.
Additional information about Nanotech can be found at the Company's website www.nanosecurity.ca, the
Canadian disclosure filings website www.sedar.com or the OTCMarkets disclosure filings website
www.otcmarkets.com.
# # #
Canada Investor Relations: U.S. Investor Relations:
Sean Peasgood � Sophic Capital Inc. Dave Mossberg Three Part Advisors, LLC
sean@SophicCapital.com +1. 817.310.0051
+1.416.565.2805
Media Contact:
Jackie Henry
jp@nanosecurity.ca
+1.778.384.3384
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.
NANOTECH SEC
--->URITY CORP.
#308 2999 U
--->nderhill Avenue
Burnaby, B.C.
---> V5A 3C2
www.nanosecuri
--->ty.ca
pg. 7 Office: +1.604
--->.420.0830
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