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Ca
pit
al S
tru
ctu
reNTS-TSXV; NTSFF-OTCQX
Market Capitalization
In Canadian dollars
Shares Price(2) Market Cap
Basic Shares Outstanding 68,959,002 $0.58 $39,996,221
Options @ $1.10(1)
(exp. 2.8 years)3,935,000
Restricted Share Units(1) 464,126
Fully Diluted 73,358,128 $0.58 $42,547,714
Cash & Short-term Investments(1)
$10.1M
Debt(1) $0.00
•Management and Directors with significant ownership
• Significantly invested in intellectual property in over 25 countriesNote (1) as at Mar. 31, 2019
Note (2) as at Apr. 30, 2019
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$2 Billion Market Opportunity
Investment Highlights
Initially targeting the multi-billion dollar banknote and tax stamp markets
$10.1M cash, no debt, no warrants
Strong Balance Sheet
Completed our 8th consecutive quarter of positive adjusted EBITDA
Positive Adjusted EBITDA
Development contracts with several top 10 issuers (awarded $30M contract)
Central Bank Validation
Scalable high-margin, recurring revenue that can drive positive operating leverage
Attractive Business Model
Strong patent portfolio in both technology and processes all wrapped in trade secrets
Innovative Technology
All amounts expressed in Canadian dollars
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Dis
cla
ime
r
THIS PRESENTATION HAS BEEN PREPARED BY NANOTECH SECURITY CORP. (THE “COMPANY”) SOLELY AS AN INTRODUCTION TO THE COMPANY AND ITS TECHNOLOGY.
This Presentation is the sole responsibility of the Company. Information contained herein does not purport to be complete and is subject to certain qualifications and assumptions and should not be relied upon for the purposes of making an investment in the securities or entering into any transaction. The information and opinions contained in the Presentation are provided as at the date of this Presentation and are subject to change without notice and, in furnishing the Presentation, the Company does not undertake or agree to any obligation to provide recipients with access to any additional information or to update or correct the Presentation. No stock exchange, securities commission or similar regulatory authority has passed on the merits of any securities referred to in the Presentation, nor has it passed on or reviewed the Presentation.The Company is developing a new and unproven technology. It is subject to a large number of very significant challenges including the risk that no viable product will ever be developed and even if one is developed there is the risk that no market will exist for it. The Company is competing against companies with much greater resources and the Company’s continued existence is dependent on its ability to secure additional financing.The Presentation may contain “forward looking information” within the meaning of applicable Canadian Securities legislation concerning, among other things, the size of the market for potential applications of the Company’s technology and the timing of further technical development of the Company’s projects. There can be no assurance that the plans, intentions or expectations upon which these forward looking statements and information are based will occur. “Forward looking statements” and “forward looking information” are subject to a variety of risks, uncertainties and assumptions, including those discussed in the annual Management Discussion and Analysis and under “Risk Factors” in the Company’s public filings at www.sedar.com. Some of the factors which could affect future results and could cause results to differ materially from those expressed in the forward looking statements and information contained herein include: Risk of technological non-feasibility, obsolescence and inadequate economics, dependence on key personnel and key relationships with the Company’s technology licensor. Forward-looking statements and information are based on the beliefs, estimates and opinions of management at the date the statements are made and are subject to change without notice. The Company does not undertake to update forward-looking statements or information if management believes estimates or opinions or other circumstances should change. The Company also cautions potential investors that investments in new technology are inherently risky.
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Ou
r M
issi
on
Ink Evolved to Light
A printed colour image was the best security feature because no
one had the technology to copy it.
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Wh
at
We
Do
Nanotech places a moving picture which uses light to authenticate and validate the intangible value of physical goods.
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What’s the last security feature you remember seeing?
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Ou
r M
ark
et
Op
po
rtu
nit
yMemorable
Forgettable
Easily Copied Uncopiable
Packaging
Holograms
Colour Printing
Lens technology
Colour-shifting Inks & Threads
Legacy technologies are either beautiful
and easily copied…
… or harder to copy and absolutely forgettable.
KolourOptik
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Ou
r M
ark
ets
0
25
50
75
100
$100 Note Tax Stamp Celebrex Birkin bag Chanel HandCream
S&P 500
Estimated Cost as a % of Value
Banknotes Documents PharmaceuticalsLuxury Goods Cosmetics
Assumptions - A $100 banknote costs about 14 cents to make. Tax stamps cost a penny or two. Celebrex brand value estimated by taking the spread against its generic. Birkin bag compared against a high quality counterfeit. Chanel hand cream estimated. S&P 500 price vs. book.
We play in an industry where protecting intangible assets is paramount
Two thirds of the market cap of the
S&P 500 (or over $14 trillion) is in intangible
assets.
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Ba
nk
no
te O
pp
ort
un
ity
Issuing Authorities (Central Banks)
Notes(Printed)
Revenue Opportunity*(Per Security Feature)
Top Tier10 Issuing Authorities 121 Billion $151 Million
Others48 Issuing Authorities 54 Billion $67 Million
Total:58 Issuing Authorities 175 Billion $218 Million
* Based on US$1.25 per 1,000 banknotes
(1) Federal Reserve System Seal (2) Microprinting (3) Raised Printing(4) Paper (5) Color (6) Portrait and Vignette (7) Symbol of Freedom
(8) Treasury Seal (9) Serial Numbers (10) Serial Year (st) Security Thread (w) Watermark (cs) Colour-shifting Ink
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Ba
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no
te M
ark
et
Str
ate
gy
Multi-billion Dollar Companies Invest in Intellectual Property for Banknotes
Estimated Revenue~$700 Million
Estimated Revenue ~$559 Million
Estimated Revenue ~$2.2 Billion
Estimated Revenue~$1.6 Billion
Estimated Revenue ~$3.5 Billion
Estimated Revenue~$2.3 Billion
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Ba
nk
no
te C
ase
Stu
dy
Initially announced a $30 Million development
contract in March 2017
The contract is with one of the top ten central banks
The development contract is to design security features
for their next series of banknotes
When completed is expected to result in recurring
annual revenues
The development work is progressing well
The country is in late stages of designing their new series
Opportunity for more than one NTS feature per banknote
$30 Million Development Contract Status
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Do
cum
en
ts C
ase
Stu
dy UEFA used KolourOptik to authenticate over 5 mm tickets
during the UEFA Euro 2016.
Authentication through motionGrey image changes to full colour image. Cannot be replicated using legacy technologies.
Exactly matches the iconography of the eventThe image is Super Victor, the UEFA mascot, who is easily identifiable. The colours & proportions match exactly.
Mass producedThe ticket printer produced these security features using a shim we provided.
Grey image changes to full colour
KolourOptik-Commercial
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Pro
du
ct L
au
nch
es
Transforming from a Technology to a Product Company
Technology
PRODUCT
Demand
ScalabilityKolourOptik Commercial Product Launch
KolourOptik Banknote Product Launch
#1
#2
Creating reliable and timely manufacturing solutions for KolourOptik products:
• Previously we relied on large partners that were prohibitively expensive or took several months for delivery, making selling to commercial customers difficult.
• With these strategies we can sell directly to commercial customers and deliver a complete security label to showcase customers’ brand identity.
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Cu
rre
nt
Ba
nk
no
te P
rod
uct
s
Colour Shift Optical Thin Film
Shown as a windowed thread
Haiti
Papua
New Guinea
Kenya
Morocco
Threads in circulation:Denmark
Philippines
Taiwan
Kazakhstan
Indonesia
KolourOptik M2
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Ne
w C
om
me
rcia
l Pro
du
cts
Introducing…
LiveLogoTM
Employs Nanotech’s image switch technology to create a unique andcompelling three-image story. It creates an immediate visual impact,capturing and holding the customer’s attention as they tilt the feature toexperience multiple image transitions. The image designs are customizableand can include items such as a customer’s logo, tagline, or product.
Dynamic PortraitTM
Displays images far beyond conventional print resolution and allows fortext and other design elements to be added for additional brand impactand authentication. This product is ideal for customers to showcase animage of their celebrity spokesperson or even a high-fidelity image oftheir product.
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Ma
na
ge
me
nt
Te
am
Troy BullockChief Executive Officer
Igi LeRouxChief Business
Development Officer
Clint LandrockChief Technology Officer
Joe VosburghVice President, Marketing
Monika RussellChief Financial Officer
Ron RidleyVice President, Operations
Brian Donnelly Vice President, Sales
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Patent portfolio in both Technology and Processes all wrapped in trade secrets, major granted patent countries:
• Canada• United States• Europe• Australia• China• Indonesia
Significant Investment in Intellectual Property
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Lo
cati
on
s in
Ca
na
da
Nanotech West, Corporate & OVD:
Burnaby, British Columbia
NTS Equipment Housed at 4D LABSState-of-the-art Nano Equipment $65 mm Secure Facility Canadian Gov’t National Lab
Nanotech East, Production & OTF:
Thurso, Quebec
High Security Production FacilityOptical Thin Film R&D and Production Facility
Burnaby
Thurso
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Create a direct salesforce
2019 Goals
• Create a salesforce to accelerate the sales process and focus on diversifying customer base, demonstrating differentiation through commercial sales
• Contract development activities• Expand and enhance our banknote product line
Banknote market
• New line of products featuring KolourOptik technology targeted directly at the commercial market
• Secure a reliable and timely manufacturing solution for commercial size quantities of KolourOptik labels
Commercial markets
• Incorporating a security feature into a banknote will lead to longer-term recurring, predictable revenue
• Diversification into commercial markets is also expected to stabilize revenues and earnings
• In the short-term, while management builds out the sales strategy and product offering, the Company’s financial performance may be highly variable
Financial outlook
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Th
e G
row
th o
f N
an
ote
ch
Note 1 All amounts expressed in Canadian dollarsNote 2 Adjusted EBITDA is a non-IFRS measure as describe in the Non-IFRS Financial Measures section of the Company’s MD&A
2014 2015 2016 2017 2018
Adjusted EBITA
Revenue
$(4,000,000.00)
$(2,000,000.00)
$-
$2,000,000.00
$4,000,000.00
$6,000,000.00
$8,000,000.00
$10,000,000.00
Nanotech Growth Since 2014
Adjusted EBITA Revenue
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$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
2017 2018
Revenue
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
2017 2018
Gross profit
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
2017 2018
Adjusted EBITDA (2)
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
2017 2018
Net cash position
Ye
ar
En
de
d S
ep
tem
be
r 3
0, 2
01
8
1.2M
1.9M
10.8M 9.6M
7.3M
9.2M
5.9M
7.1M
Note 1 All amounts expressed in Canadian dollarsNote 2 Adjusted EBITDA is a non-IFRS measure as describe in the Non-IFRS Financial Measures section of the Company’s MD&A
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$1,500,000
$1,600,000
$1,700,000
$1,800,000
$1,900,000
$2,000,000
Q2-2018 Q2-2019
Revenue
$1,000,000
$1,100,000
$1,200,000
$1,300,000
$1,400,000
Q2-2018 Q2-2019
Gross profit
$-
$50,000
$100,000
$150,000
Q2-2018 Q2-2019
Adjusted EBITDA (2)
$8,000,000
$8,500,000
$9,000,000
$9,500,000
$10,000,000
$10,500,000
Q4-2018 Q2-2019
Net cash position
Q2
20
19
133K
45K
9.6M
10.1M
1.9M1.86M
1.4M
1.3M
Note 1 All amounts expressed in Canadian dollarsNote 2 Adjusted EBITDA is a non-IFRS measure as describe in the Non-IFRS Financial Measures section of the Company’s MD&A
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Co
nta
ct U
s
Troy Bullock
Chief Executive Officer
Nanotech Security
604.678.5778
Sean Peasgood
Investor Relations
Sophic Capital
647.699.9845
