Vancouver, British Columbia--(Newsfile Corp. - January 29, 2026) - QSE - Quantum Secure Encryption Corp. (CSE: QSE) (OTCQB: QSEGF) (FSE: VN80) ("QSE" or the "Company") today announced it has joined the Canadian Association of Defence and Security Industries (CADSI), Canada's leading national defence and security industry association, and is launching a FY2026 public-sector commercialization track designed to convert near-term government demand for post-quantum security into measurable deployments and recurring revenue over FY26.

CADSI represents more than 900 Canadian companies spanning defence, security, cybersecurity, aerospace, and advanced technologies. Membership positions QSE within Canada's core defence and national security ecosystem at a time when governments and allied institutions are accelerating procurement planning around cryptographic resilience, long-lived data confidentiality, and post-quantum readiness.

Public-Sector Adoption is Entering an Execution Window

Government agencies and defence stakeholders face growing exposure to harvest-now, decrypt-later threats, where sensitive communications and classified data captured today may be vulnerable to future quantum-enabled decryption. As a result, post-quantum security is shifting from a long-term research topic into an active procurement priority.

QSE believes these conditions support a pragmatic adoption path where initial deployments can begin in contained environments and expand across agencies as operational fit and governance requirements are validated.

FY26 Defence Execution Path (Q2-Q4): From Engagement to Deployments

With QSE's fiscal year ending September 30, the Company views FY26 Q2-Q4 (January-September 2026) as a defined commercialization window for defence and public-sector assessment, conversion, and scale.

Through CADSI engagement, QSE's FY26 execution lane is expected to focus on:

• Paid readiness and onboarding work, including security posture alignment, encrypted tenant configuration, and governance controls

• Initial pilot deployments within high-sensitivity government workflows where confidentiality and retention requirements are elevated

• Expansion through seat-based rollouts as adoption broadens across departments and long-term retained data requirements grow

Repeatable deployment pathways aligned to interoperability, policy requirements, and renewal mechanics typical of public-sector environments

Because public-sector deployments typically scale through user seats, departments, and long-term retention mandates, QSE believes the most transparent way to communicate commercial progress is through operational milestones that map directly to revenue generation mechanics:

New encrypted government tenants onboarded » onboarding services + initial subscription revenue

Pilot seats activated » early recurring revenue base + implementation validation

Department expansion » seat growth + governance, policy, and retention add-ons

Agency-wide adoption » multi-year recurring footprint, renewal cycles, and potential cross-department standardization

Management views conversion velocity (time from readiness » pilot » expansion) as a key FY26 indicator of repeatability and commercialization progress.

QSE intends to reference these conversion milestones in future public-sector updates to help investors assess whether strategic engagement is translating into tangible commercial progress.

CEO Commentary

"Joining CADSI is an execution decision," said Ted Carefoot, Chief Executive Officer of QSE. "Defence and government stakeholders are actively evaluating deployable post-quantum controls today, not just long-term narratives. Our focus in FY26 is to convert public-sector engagement into paid pilots and scaled deployments that can contribute to recurring revenue as we move through Q2, Q3, and Q4."

Strategic Channel Access with Near-Term Commercial Intent

Through CADSI, QSE gains structured access to senior decision-makers across the Canadian Armed Forces, federal departments, allied governments, and international defence partners. Membership also provides participation in flagship initiatives such as CANSEC, Canada's largest defence and security trade show, alongside working groups focused on cybersecurity, digital defence, and emerging technology adoption.

QSE plans to actively engage across CADSI's ecosystem as part of its broader public-sector strategy spanning municipal, federal, and allied security stakeholders.

About CADSI

The Canadian Association of Defence and Security Industries (CADSI) is Canada's leading defence and security industry association, representing more than 900 companies. CADSI advocates on behalf of its members, facilitates engagement with government and military stakeholders, and supports Canadian companies in domestic and international markets.

By joining CADSI, QSE is positioning its defence growth strategy inside Canada's national security network at a time when cryptographic resilience is moving from future-planning into defined execution pathways.

This announcement follows QSE's recent public-sector expansion milestones, including its National Partner engagement with the Municipal Information Systems Association (MISA) and the Company's previously announced participation in the CADSI-convened Canadian Delegation to World Defense Show (WDS) 2026 in Riyadh.

Together, these steps reflect a deliberate market approach: build credibility and distribution across the public-sector stack (municipal » federal » allied defence), while advancing a commercialization model that is measurable and conversion-oriented. https://www.defenceandsecurity.ca/

About QSE - Quantum Secure Encryption Corp.

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

Cautionary Note Regarding Forward-Looking Statements

This news release contains forward-looking statements that constitute forward-looking information (collectively, "forward-looking statements") within the meaning of applicable Canadian securities legislation. All statements in this news release that are not purely historical statements of fact are forward-looking statements and include statements regarding beliefs, plans, expectations, future, strategy, objectives, goals and targets, and more specifically, the use of proceeds of the Offering. Although the Company believes that such statements are reasonable and reflect expectations of future developments and other factors which management believes to be reasonable and relevant, the Company can give no assurance that such expectations will prove to be correct. Forward-looking statements are typically identified by words such as: "believes", "expects", "aim", "anticipates", "intends", "estimates", "plans", "may", "should", "would", "will", "potential", "scheduled" or variations of such words and phrases and similar expressions, which, by their nature, refer to future events or results that may, could, would, might or will occur or be taken or achieved. Forward-looking statements involve known and unknown risks and are based on assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, including, but not limited to, those risks and assumptions described in the Company's latest management discussion and analysis, a copy of which is available under the Company's profile on SEDAR+ at www.sedarplus.ca. While Scope considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this press release. In addition, forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions, continued satisfaction of Canadian Securities Exchange requirements, product safety and recalls, regulatory compliance and risks associated with the Company's business. Forward-looking statements are made as of the date of this news release and, unless required by applicable law, the Company assumes no obligation to update the forward looking statements or to update the reasons why actual results could differ from those projected in these forward-looking statements. All forward-looking statements are qualified in their entirety by this cautionary statement.

The Canadian Securities Exchange has in no way passed upon the merits of the business of the Company and has neither approved nor disapproved the contents of this news release and accepts no responsibility for the adequacy or accuracy hereof.

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