CALGARY, Alberta – Nanalysis Scientific Corp. (TSXV:NSCI, OTCQX:NSCIF, FRA:1N1) (“Nanalysis” or the “Company”) is pleased to announce that it has entered into a letter of intent to acquire QUAD Systems AG (Quad Systems), a Zurich-based Nuclear Magnetic Resonance (NMR) company focused on high-field NMR for pharmaceutical and other vertical markets.

Quad Systems and Nanalysis have been working together as strategic partners for over a year in a collaborative OEM agreement to partner going to market with a complete high field NMR product offering. Quad Systems was founded by Dr. Klemens Kessler, who assembled a world class team of very experienced and talented magnetic resonance experts, with a mission to bring back innovation to NMR, which has been stifled over the last decade. Quad Systems holds key patents and IP, as well as important technology partnerships, that will allow it to carve out significant market share in the established billion dollar per year high-field NMR market.

Sean Krakiwsky, founder and Chief Executive Officer of Nanalysis said, “We have developed a common technology platform and manufacturing capability for compact magnetic resonance as well as high-field magnetic resonance. Over 80% of our customers use both. Therefore, in addition to converting our OEM relationship with Quad Systems to a closer partnership, there are also tremendous cross-selling opportunities. We have had roughly 10 of our scientists and engineers embedded with Quad Systems for over a year, and a tremendous amount of collaboration and mutual respect has developed. Recently, Klemens and I came to the conclusion that joining forces made both companies stronger, would optimize our success regarding several critical challenges, and steepen our growth trajectories: We are growing the large untapped market for miniaturized NMR, while they are focused on taking part of the established market.”

“An important aspect of competing for global market share in magnetic resonance is critical mass and economies of scale, which this merger will provide. Furthermore, over the last decade customers have suffered from long lead times for support as well as shipments, because of the lack of competition. The market is demanding a fresh approach, and we will fill that void. The market wants democratization as well as miniaturization,” concluded Mr. Krakiwsky.

Dr. Kessler added, “We have been working with the Nanalysis team for over a year and are impressed with their world-class manufacturing and R&D capabilities which is complementary to ours. We are enthusiastic about going to market with Nanalysis and serving the global NMR community. Sean and I share a vision of building a company that provides high quality products, ongoing innovation, and full sales and service in every major market in the world. By combining our organizations, we will be taking a big step in that direction.”

About the Acquisition
As part of the agreement, Nanalysis has provided Quad Systems with a CHF 1,000,000 loan (Loan) which is convertible into shares in the capital of Quad Systems, and Sean Krakiwsky, founder and CEO of Nanalysis is being appointed to Quad Systems’ Board of Directors as a Nanalysis nominee immediately. The initial funds by Nanalysis will be used by Quad Systems to complete their product lines, to launch products created through the companies’ collaboration, and grow the combined businesses.

The other key terms of the LOI that remain are:

• Nanalysis will subscribe for 260,000 Quad Systems shares for cash consideration of CHF 6,500,000 (Equity Investment). On completion of the Equity Investment a second representative of Nanalysis will be appointed to Quad Systems’ Board of Directors. At this stage, Nanalysis will own 43% of Quad Systems;
• Until July 1, 2023 (Option Period), Nanalysis has an option (Option) to acquire 100% of the issued and outstanding shares of Quad Systems at a pre-set valuation formula in a combination of cash and Nanalysis shares;
• During the Option Period, Nanalysis has a right of first refusal on all debt and equity offerings of Quad Systems.

Subject to satisfactory completion of customary due diligence, the parties have agreed to enter into a definitive agreement in respect of the Equity Investment and Option which will be announced on a mutually agreeable date.

As previously disclosed, Nanalysis is and has been engaged in strategic acquisitions as part of its core business operations. Nanalysis has historically demonstrated positive EBITDA⁽¹⁾ , with the fourth quarter being the highest volume quarter, these results are expected to continue. As of the date of the press release, Nanalysis has estimated working capital⁽¹⁾ of over $10.0 million, access to over $4.0 million in unused commercial bank operating lines, and has regular access to sources of interest free unsecured government-centric loans.

The financial disclosure in this release is unaudited and could be subject to revision when the company releases its financial statements.

About Nanalysis Scientific Corp. (TSXV:NSCI, OTCQX:NSCIF, FRA:1N1)
Nanalysis trades on the TSX Venture Exchange (TSXV) in Canada with ticker symbol ‘NSCI’, OTC and the Frankfurt exchange under the ticker symbol ‘1N1’. The company’s business is what we term “MRI and NMR for industry”. The company develops and manufactures portable Nuclear Magnetic Resonance (NMR) spectrometers or analyzers for laboratory and industrial markets. The NMReady-60™ was the first full-feature portable NMR spectrometer in a single compact enclosure requiring no liquid helium or any other cryogens. The company has followed-up that initial offering with new products and continues to have a strong innovation pipeline. Nanalysis recently announced that it has begun selling a 100MHz device in 2020. The Company’s new device will be the most powerful and most advanced compact NMR device ever brought to market.

Nanalysis devices are used in many industries (oil and gas, chemical, mining, pharma, biotech, flavor and fragrances, agrochemicals, law enforcement, and more) as well as numerous government and university research labs around the world. The company continues to exploit new global market opportunities independently and with partners.

About Quad Systems
Established in March 2020 by Dr. Klemens Kessler, with a PhD in Physics from ETH Zurich Switzerland, Klemens drove NMR probe development in several leading positions at Bruker in Switzerland for more than 15 years. As business unit manager for CryoProbes and as technical director for all NMR probes, he had a big influence on Bruker’s current position on the NMR market. Dr. Kessler founded QUAD Systems with the goal to deliver all components for NMR spectroscopy to the world market and is currently fully focused on that business. The company is headquartered in Zurich, Switzerland, and the website is https://www.quadsystems.tech.

(1) Non-GAAP Terms – Nanalysis reports on certain financial performance measures that are described and presented in order to provide shareholders and potential investors with additional measures to evaluate Nanalysis ability to fund its operations and information regarding its liquidity. In addition, these measures are used by management in its evaluation of performance. These financial performance measures (“Non-GAAP Terms”) are not recognized financial terms under Canadian generally accepted accounting principles (“Canadian GAAP”). For publicly accountable enterprises, such as Nanalysis, Canadian GAAP is governed by principles based on IFRS and interpretations of IFRIC. Management believes these Non-GAAP Terms are useful supplemental measures. These Non-GAAP Terms do not have standardized meanings and may not be comparable to similar measures presented by other entities. Specifically, Working capital and EBITDA are not recognized terms under IFRS and do not have standardized meanings prescribed by IFRS.

Notice regarding Forward Looking Statements and Legal Disclaimer
This news release contains certain “forward-looking statements” within the meaning of such statements under applicable securities law. Forward-looking statements are frequently characterized by words such as “anticipate”, “continue”, “estimate”, “expect”, “may”, “would” occur. These statements are only predictions of what we believe might happen. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Corporation is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.