Mr. Eric Eyerman reports

CALIFORNIA NANOTECHNOLOGIES ANNOUNCES CLOSING OF NON-BROKERED PRIVATE PLACEMENT AND SHARES FOR DEBT EXCHANGE

California Nanotechnologies Corp. has closed its previously-announced non-brokered private placement for aggregate gross proceeds of $1.5-million. Under the offering, the company sold 10 million units of the company, which included full exercise of the overallotment option, at a price of 15 cents per unit.

Each unit consists of one common share in the capital of the company and one-half of one common share purchase warrant. Each warrant shall entitle the holder to acquire one additional common share at an exercise price of 25 cents at any time on or before Oct. 30, 2025.

The securities in the offering were offered by way of the listed issuer exemption under National Instrument 45-106, Prospectus Exemptions, in all of the provinces of Canada, with the exception of Quebec. The common shares and warrants underlying the units are freely tradeable and are not subject to a hold period pursuant to applicable Canadian securities laws.

The company intends to use the net proceeds of the offering for growing its customer base, acquisitions of equipment and expansion of capacity, and for general corporate and working capital purposes, as further described in the company's offering document under the listed issuer financing exemption dated Sept. 14, 2023. The offering is subject to the receipt of all necessary regulatory and other approvals, including the receipt of final approval from the TSX Venture Exchange. Finders' fees in the aggregate cash amount of $22,673.50, equivalent to 5.5 per cent of the gross proceeds of certain subscriptions under the offering, were paid to eligible finders. No finders' warrants or similar securities were issued in connection with the offering.

In addition, the company is pleased to announce the closing of the previously announced share-for-debt settlement with Omni-Lite Industries Canada Inc., as described in the company's news releases dated Sept. 12, 2023, Jan. 31, 2023, May 24, 2022, and Sept. 14, 2023. The company cancelled $180,000 of debt owing to Omni-Lite through the issuance of 1.2 million common shares at a deemed price of 15 cents. The debt settlement is subject to the receipt of all necessary regulatory and other approvals, including the receipt of final approval from the TSX Venture Exchange. Following the debt settlement, Omni-Lite now owns or controls an aggregate of 7,204,970 common shares, representing approximately 16.6 per cent of the company's issued and outstanding shares on a fully and partially diluted basis. In satisfaction of the requirements of National Instrument 62-104, Take-Over Bids and Issuer Bids, and National Instrument 62-103, The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, an early warning report respecting the acquisition of common shares by Omni-Lite will be filed under the company's SEDAR+ profile. The acquisition of common shares was completed for investment purposes. Depending on market and other conditions, Omni-Lite may from time to time in the future increase or decrease their ownership, control or direction over securities of the company, through market transactions, private agreements, or otherwise.

Eric Eyerman, Roger Dent and Sebastien Goulet purchased an aggregate of 3,586,666 units under the offering, representing approximately 35.9 per cent of the offering. In addition, Omni-Lite has received 1.2 million common shares in connection with the debt settlement. The issuance of securities to offering insiders and Omni-Lite is considered a related party transaction as defined under the policies of the TSX-V and Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The company is relying on exemptions from the minority shareholder approval and formal valuation requirements applicable to the related party transactions under sections 5.5(a) and 5.7(1)(a), respectively, of MI 61-101, as neither the fair market value of the securities to be acquired by the offering insiders and Omni-Lite, nor the consideration to be paid by such offering insiders and Omni-Lite exceeds 25 per cent of the company's market capitalization. The securities issued to the offering insiders and Omni-Lite will be subject to a hold period of four months and one day in accordance with the policies of the TSX Venture Exchange. The company did not file a material change report containing all of the disclosure required by MI 61-101 more than 21 days before the expected closing date of the offering and debt settlement as the aforementioned insider participation had not been confirmed at that time, and the company wished to close the offering and debt settlement as expeditiously as possible.

About California Nanotechnologies Corp.

California Nanotechnologies envisions a world in which its advanced technologies are used to help make the most innovative products on this planet and beyond. The company is trusted by global leaders to help push the boundaries of applied material science by utilizing its unique technical expertise and vision. Headquartered in Los Angeles, Calif., California Nanotechnologies hosts a complement of advanced processing and testing capabilities for materials research and production needs. Customers range from Fortune 500 companies to start-ups with programs spanning aerospace, renewable energy, defence and semiconductors.

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