QSE Closes Second Tranche of Private Placement of $6 Million

Vancouver, British Columbia--(Newsfile Corp. - August 21, 2026) - Quantum Secure Encryption Corp. (CSE: QSE) (OTCQB: QSEGF) (FSE: VN80) ("QSE" or the "Company") is pleased to announce that it has closed the second and final tranche of its previously announced non-brokered private placement financing (the "Offering", see news release dated July 10, 2026, July 24, 2026 and July 31, 2026) by issuing 1,499,877 units (the "Units") at a price of $0.45 per Unit for total proceeds of $674,944.65 (the "Second Tranche"). Under the entire Offering, the Company issued a total of 13,333,333 Units at a price of $0.45 per Unit for total proceeds of $5,999,999.85.

Each Unit consists of one common share ("Share") and one half of one common share purchase warrant (each whole warrant, a "Warrant"), with each Warrant entitling the holder to acquire one additional Share at an exercise price of $0.65 for a period of two (2) years from the date of issue.

All securities issued will be subject to a statutory hold period of four months plus one day from closing and the hold period contemplated in Canadian Securities Exchange (the "CSE") policies.

In connection with the Second Tranche of the Offering, the Company paid finders a cash fee totaling $13,800 and issued finders a total of 30,667 Warrants (the "Finder's Warrants"). Under the entire Offering, the Company paid finders a total of $123,560.53 and issued a total of 237,844 Finder's Warrants. Each Finder's Warrant entitles the holder to acquire one additional Share at an exercise price of $0.65 for a period of two (2) years from the date of issue.

The aggregate net proceeds of the Offering will be used for the continued commercialization and expansion of the QSE Platform and for general working capital purposes.

This news release does not constitute an offer to sell, or solicitation of an offer to buy, nor will there be any sale of any of the securities offered in any jurisdiction where such offer, solicitation or sale would be unlawful, including the United States of America. The securities being offered as part of the Offering have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and accordingly may not be offered or sold in the United States except in compliance with the registration requirements of the U.S. Securities Act and any applicable state securities laws, or pursuant to available exemptions therefrom.

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 QSE 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/310876

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