Today's News

Nanotech Agrees to be Acquired by Meta Materials Inc.. All Cash Transaction Values the Company at approximately $90.8 million

Vancouver, BC, August 6, 2021--(T-Net)--Nanotech Security Corp. (TSXV: NTS) (OTCQX: NTSFF), a leader in the development of secure and visually memorable nano-optic security features used in the government and banknote and brand protection markets, announces it has entered into a definitive arrangement agreement with Meta Materials Inc. (NASDAQ: MMAT), a developer of high-performance functional materials and nanocomposites, pursuant to which META will indirectly acquire Nanotech for $1.25 per common share in an all-cash transaction valued at approximately $90.8 million on a fully diluted basis.

Nanotech Security Head Office Location in Burnaby, BC

Key Transaction Highlights

• Nanotech shareholders to receive $1.25 per share in cash, representing an aggregate transaction value of approximately $90.8 million
  
  
• The purchase price represents a 101% premium to the 30-day volume weighted price of $0.62 per Nanotech common share
  
  
• Both a special committee comprised of independent directors of Nanotech (the "Special Committee") and the full board of directors (the "Board") unanimously recommend that Nanotech securityholders vote in favour of the Transaction
  
  
• The Board has obtained a favourable fairness opinion from Echelon Capital Markets
  
  
• The Transaction is subject to customary closing conditions, including approval by a special majority of Nanotech securityholders

Neil McDonnell, Chair of the Company's Board and Special Committee

Neil McDonnell, Chair of the Company's Board and Special Committee, commented, "We are pleased to announce this Transaction with META, which offers our securityholders an attractive valuation and significant premium to the recent trading price of the Company's shares. The Transaction is also expected to provide Nanotech with greater access to capital to accelerate its commercialization and growth strategies. After careful consideration, the Special Committee and the Company's Board have both unanimously concluded that the Transaction is fair to Nanotech's securityholders and is in the best interests of the Company and its employees."

Troy Bullock, President and Chief Executive Officer

Transaction Details

The total cash consideration of $1.25 per share represents a premium of 67% to the closing price of $0.75 for Nanotech's shares on the TSX Venture Exchange on August 4, 2021 and a premium of 101% to the volume weighted average price of the 30 trading days ended August 4, 2021.

The Transaction is to be carried out by way of a plan of arrangement under the Business Corporations Act (British Columbia), pursuant to which META will acquire all the outstanding common shares of Nanotech.

The implementation of the Arrangement will be subject to, among other things, the approval of at least 66 2/3% of the votes cast by Nanotech securityholders present in person or represented by proxy at the special meeting of Nanotech securityholders, and the receipt of applicable orders from the Supreme Court of British Columbia.

The Arrangement Agreement also provides for the payment of a termination fee of $2.8 million by Nanotech in the event the Transaction is terminated in the event Nanotech proceeds with a superior proposal. The Transaction is not subject to a financing condition.

All directors and executive officers of Nanotech, holding approximately 19% of the issued and outstanding shares of Nanotech as of the date hereof, have entered into voting and support agreements in favour of META pursuant to which, among other things, they have agreed to vote their Nanotech securities in favour of the Transaction.

The Arrangement is expected to close in early October with the special meeting of securityholders expected to be convened for late September. An announcement about the exact timing of the securityholders' meeting will follow in the near future.

About Nanotech

With billions of security features in circulation, Nanotech's products include secure and memorable security labels, stripes, patches, and colour-shifting foils for currency authentication and brand protection.

KolourOptik® is a patented visual technology that is exclusive to the government and banknote market and combines sub-wavelength nanostructures and microstructures to create modern overt security features with a unique and customizable optical effect. KolourOptik pure plasmonic colour pixels produce full colour, 3D depth, and movement used in security stripes and threads that are nearly impossible to replicate.

LiveOptik™ is a patented visual technology that utilizes innovative nano-optics one tenth the size of traditional holographic structures to create next generation overt security features customized to our customers' unique requirements. LiveOptik delivers multi-colour, 3D depth, movement, and image switches for secure brand protection stripes, threads, and labels that are nearly impossible to replicate.

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.

About Meta Materials Inc.

META® delivers previously unachievable performance, across a range of applications, by inventing, designing, developing, and manufacturing sustainable, highly functional materials. Its extensive technology platform enables leading global brands to deliver breakthrough products to their customers in consumer electronics, 5G communications, health and wellness, aerospace, automotive, and clean energy. Meta's achievements have been widely recognized, including being named a Global Cleantech 100 company. Learn more at www.metamaterial.com.

The Board recommends that securityholders vote in favour of the Transaction. Echelon Capital Markets, financial advisor to Nanotech, has provided a fairness opinion to the Board that, subject to certain qualifications set out in the opinion, the $1.25 to be received by Nanotech securityholders pursuant to the Transaction is fair from a financial point of view to Nanotech's securityholders.

The foregoing summary is qualified in its entirety by the provisions of the Arrangement Agreement, a copy of which will be available on SEDAR under Nanotech's profile at www.sedar.com within 10 days following the date of this press release.

A management information circular relating to the special meeting of Nanotech securityholders and containing further details regarding the Arrangement will be mailed to Nanotech securityholders and made available on SEDAR under Nanotech's profile at www.sedar.com. Until the circular is sent, shareholders are not required to take any action in respect of the Transaction.

The Arrangement Agreement provides for, among other things, customary non-solicitation covenants from Nanotech, but includes provisions that allow Nanotech to accept a superior proposal in certain circumstances subject to a five-business day "right to match period" in favour of META.

The Transaction was negotiated at arm's length and no finder's fee is or will be payable by Nanotech in connection with the Transaction.

Advisors

Echelon Capital Markets is acting as financial advisor to Nanotech. Borden Ladner Gervais LLP and Dorsey & Whitney LLP are acting as legal counsel to Nanotech.

Cormark Securities Inc. is acting as financial advisor to META and Hamilton Clark Sustainable Capital, Inc. provided a fairness opinion to the board of directors of META. Fasken Martineau DuMoulin LLP and Wilson Sonsini Goodrich & Rosati are acting as legal counsel to META.

Neither the 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.

FORWARD-LOOKING STATEMENTS

The discussion and analysis in this news release contains forward-looking statements concerning anticipated developments in the Transaction, the Company's operations in future periods, the adequacy of Nanotech's financial resources, and events or conditions that may occur in the future. Forward-looking statements are frequently, but not always, identified by words such as "expects", "expected", "anticipates", "believes", "prospects", "efforts", "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. Such forward-looking statements concern the business and anticipated financial performance of the Company (including, without limitation, the Company's growth outlook) and the Transaction (including, without limitation, in respect of the Court approvals to be obtained in connection therewith, the approval of the Transaction by Company securityholders and the expected timing of closing of the Transaction).

These forward-looking statements include, without limitation, statements about the Company's revenue growth, prospects for advancing the development contract, expansion of manufacturing capabilities, development of a visual security feature, customer confidence, finalization of a second phase, multi-year development contract, investment in additional development staff, product trials and certifications, additional product launches, applications of nanostructures beyond the Company's initial key markets, expansion of the Company's network of channel partners and, in respect of the Transaction, the Company's ability to meet all condition precedents set forth in the Arrangement Agreement (including that there be no material adverse effect on the Company before closing of the Transaction) prior to the outside date set forth therein, the Company's ability to secure the required Court approvals in connection with the Transaction and the approval of the Transaction by Company securityholders.

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation: risks related to the completion of the Transaction, including the failure to obtain securityholder or Court approvals in connection with the Transaction; uncertainties relating to the loss of a key customer, that the Company's products receive market acceptance, and that its intellectual property claims will be sufficiently broad or enforceable to provide the necessary protection or attract the necessary capital, as well as risks relating to the COVID-19 pandemic.

These forward-looking statements are based on the beliefs, expectations, and opinions of management on the date the statements are made. Consequently, all forward-looking statements made in the 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 certainty that actual results or developments the Company anticipates will be realized.

For additional information with respect to certain of these risks or factors reference should be made to the "Business Risks and Uncertainties" section of the management's discussion and analysis and the notes to the audited financial statements for the year ended September 30, 2020, as well as with the Company's continuous disclosure materials filed from 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 forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law. Caution needs to be used when taking forward-looking statements into account when evaluating the Company.