Mr. Eric Eyerman reports

CALIFORNIA NANOTECHNOLOGIES ANNOUNCES CLOSING OF NON-BROKERED PRIVATE PLACEMENT

California Nanotechnologies Corp. has closed its previously announced non-brokered private placement. The offering consisted of the issuance of 3,119,666 units in the capital of the company at a price of 30 Canadian cents per unit for aggregate gross proceeds of approximately $935,900 (Canadian). Each unit comprises one common share in the capital of the company and one common share purchase warrant. Each warrant shall be exercisable to acquire one additional common share at an exercise price of 30 U.S. cents for 18 months from the closing of the offering.

The company intends to use the net proceeds raised from the offering for general working capital and corporate purposes. The offering is subject to the receipt of all necessary regulatory approvals, including the receipt of final approval from the TSX Venture Exchange.

In connection with the offering, the company has agreed to pay a cash commission in the aggregate of $825 and to issue an aggregate of 154,179 common shares at a deemed price of 30 Canadian cents per share, being the same as the offering price, to eligible finders. The securities issued pursuant to the offering and to eligible finders will be subject to a statutory hold period of four months and one day from the date of issuance in accordance with applicable securities laws.

A certain director of the company subscribed for an aggregate of 500,000 units under the offering, which participation constitutes a related party transaction as defined under 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 insider, nor the consideration paid by such insider exceeds 25 per cent of the company's market capitalization. The company did not file a material change report in respect of the related party transaction at least 21 days before the closing of the offering as the final terms of the offering were not determined until shortly before closing.

About California Nanotechnologies Corp.

California Nanotechnologies envisions a world in which advanced technologies are used to help make the most innovative products on this planet and beyond. With the company's unique expertise in processing metallurgic powders into parts, global leaders trust California Nanotechnologies to help push the boundaries of applied material science. Headquartered in greater Los Angeles, Calif., California Nanotechnologies hosts advanced processing and testing machinery and capabilities across two manufacturing facilities for materials research and production needs. The company's customers range from Fortune 500 companies to start-ups with programs spanning aerospace, renewable energy, defence and semiconductors.

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