Mr. Ted Carefoot reports

QSE CLOSES FIRST TRANCHE OF PRIVATE PLACEMENT OF $5.3 MILLION AND ANNOUNCES FURTHER UPSIZE TO $6 MILLION

Quantum Secure Encryption Corp. has closed the first tranche of its previously announced non-brokered private placement financing (see news release dated July 10, 2026, and July 24, 2026) by issuing 11,833,456 units at a price of 45 cents per unit for total proceeds of $5,325,055.20.

Concurrent with the closing of the first tranche and due to strong investor demand, the company has further increased the size of the offering. The company will issue up to 13,333,333 units at a price of 45 cents per unit for gross proceeds of up to $6-million.

Each unit consists of one common share and one-half of one common share purchase warrant, with each warrant entitling the holder to acquire one additional share at an exercise price of 65 cents until July 31, 2028.

All securities issued will be subject to a statutory hold period of four months plus one day from closing and the hold period contemplated in Canadian Securities Exchange policies.

In connection with the first tranche of the offering, the company paid finders a cash fee totalling $109,760.53 and issued finders a total of 207,177 warrants. Each finder's warrant entitles the holder to acquire one additional share at an exercise price of 65 cents until July 31, 2028.

The aggregate net proceeds of the offering will be used for the continued commercialization and expansion of the QSE platform and for general working capital purposes.

The closing of the balance of the offering is subject to certain closing conditions, including, but not limited to, receipt of all necessary approvals, including the approval of the CSE.

Engagement of investors relations

The company also announces that it has entered into a corporate communications and marketing service agreement with Market Equities Ltd. engaged to provide corporate communication and digital marketing services to raise public awareness of the company.

Under the terms of the engagement, Market Equities will provide the services through the creation and distribution of on-line marketing materials and, in consideration of which, the company will pay an upfront fee of $200,000. The parties anticipate that the services will be provided for an initial term of six months commencing on July 31, 2026, and continuing through Jan. 31, 2027.

Market Equities is based in Dublin, Ireland, and is an arm's-length party. To the best of the company's knowledge, Market Equities does not hold, directly or indirectly, any securities of QSE or have any right to acquire any such securities. The proposed compensation for Market Equities does not include any securities of the company.

About Quantum Secure Encryption Corp.

Quantum Secure is a Canadian technology company specializing in postquantum data security, encryption and secure data infrastructure. Built around quantum-delivered entropy and zero-knowledge architecture, Quantum Secure's solutions help protect sensitive data from current cyber threats and future quantum-enabled attacks. Quantum Secure serves organizations across commercial, enterprise and public-sector environments requiring long-term data confidentiality and resilience.

We seek Safe Harbor.