Mr. Eric Eyerman reports

CALIFORNIA NANOTECHNOLOGIES ANNOUNCES Q2 2024 RESULTS

California Nanotechnologies Corp. had record quarterly revenues of $685,931 (U.S.) for the quarter ending Aug. 31, 2023. This represents an increase of 152 per cent compared with the same period last year. Net income for the quarter was $213,674 (U.S.), compared with a net loss of $26,496 (U.S.) in the same period last year, while EBITDA (earnings before interest, taxes, depreciation and amortization) (1) was $279,308 (U.S.), compared with $49,437 (U.S.) in the same period last year. Net income and EBITDA (1) showed significant improvements due to higher revenue generation, a higher gross margin and improving efficiencies at the current scale of operations. The financial statements are available on SEDAR+ and on the company's website.

"As previously disclosed, we have made significant progress in this fiscal year, achieving record revenues this quarter," stated chief executive officer Eric Eyerman. "While this quarter stands as one of our strongest yet, I am excited about the ongoing growth opportunities. We are in the process of evaluating several options to facilitate the expansion of our manufacturing capacity, which would be desirable if demand for our services continues to increase. I look forward to updating everyone on our future progress."

The increase in revenue for Q2 of fiscal year (FY) 2024 was attributed to the continuing ramp-up of R&D (research and development0 manufacturing programs for new and existing customers, with the largest account continuing to be the green steel cleantech company. Gross margin and profitability were higher due to operational efficiencies and because there were no equipment sales during the quarter. It is anticipated that profitability will fluctuate over time as the company invests in overhead expenses in advance of capacity expansion and business development.

While California Nanotechnologies continues to prioritize contracted manufacturing revenues, the company's business model incorporates equipment sales for smaller-scale spark plasma sintering (SPS) equipment, targeting a different customer base than its manufacturing offerings. To date, U.S. research labs and universities have been the primary customers, with two deliveries valued at $295,000 (U.S.) expected to occur in Q3 FY 2024. Subsequent to the end of the quarter, California Nanotechnologies also received a $344,000 (U.S.) order from the University of Connecticut, which is expected to be delivered in FY 2025.

In addition, California Nanotechnologies is in the process of identifying potential new sites for its production and headquarters. The company recognizes the potential need for a larger space to accommodate recent equipment purchases and potentially larger-sized SPS systems to meet the increasing customer demands. If secured, this new space is expected to house all the existing equipment, including the recently purchased used cryomill, along with another recently acquired piece of equipment that will enable the latest in 3-D material printing using SPS technology.

Lastly, the company is pleased to announce the nomination of Chris Melnyk as a director, effective Nov. 1, 2023, and subject to approval by the TSX Venture Exchange. Mr. Melnyk, a distinguished figure in the materials science industry, previously served as the chief executive officer and board member of California Nanotechnologies before departing in 2016. Since early 2023, Mr. Melnyk has been a valued sales and business development consultant for the company, leveraging his extensive expertise to grow revenue, drive strategic initiatives and enhance shareholder value. Mr. Melnyk is based out of North Carolina and is expected to provide the company with a closer presence to the company's customers in the Eastern United States.

"We are happy to welcome Chris back to the board," stated Roger Dent, director at California Nanotechnologies. "His nomination reflects our commitment to securing the best leadership for the company and we look forward to benefiting from his invaluable insights and guidance in the boardroom."

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.

(1) Non-IFRS (international financial reporting standards) measures and reconciliation of non-IFRS measures

This news release makes reference to certain non-IFRS measures. These non-IFRS measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable with similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing a further understanding of results of operations of California Nanotechologies from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the financial information of California Nanotechologies reported under IFRS. The company uses non-IFRS measures such as EBITDA to provide investors with a supplemental measure of operating performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. Management also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets, and assess the company's ability to meet its capital expenditure and working capital requirements.

EBITDA means the earnings before interest, income taxes, depreciation and amortization, where interest is defined as net finance costs as per the consolidated statement of comprehensive income.

EBITDA margin means the earnings before interest, income taxes, depreciation and amortization, where interest is defined as net finance costs as per the consolidated statement of comprehensive income as a percentage of total revenues.

Reconciliations and calculations

The attached table provides a quantitative reconciliation of EBITDA, which is a non-IFRS financial measure, to the most comparable IFRS measure disclosed in the company's financial statements. The reconciliation of non-IFRS measures to the most directly comparable measure calculated in accordance with IFRS is provided below where appropriate. Quotes do not have a directly comparable IFRS measure.

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