Press Release

Pollard Banknote Limited Announces $33.2 Million Bought Deal Financing

WINNIPEG, Manitoba, February 1, 2018 /CNW/ Pollard Banknote Limited (TSX: PBL) (“Pollard Banknote” or the “Company”), a leading lottery partner that provides instant tickets, interactive solutions, and marketing support, is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by Canaccord Genuity Corp. (together, the “Underwriters”) to purchase on a bought deal basis 1,800,000 common shares of Pollard Banknote (“Common Shares”) at a price of $18.45 per Common Share (the “Offering Price”) for gross proceeds to the Company of approximately $33.2 million (the “Offering”).

The Company has granted the Underwriters an over-allotment option exercisable at any time up to 30 days following the closing of the Offering, to purchase up to an additional 270,000 Common Shares at a price per Common Share equal to the Offering Price. In the event that the over-allotment option is exercised in full, the gross proceeds of the Offering will be approximately $38.2 million.

The Company expects to use the net proceeds from the Offering to repay indebtedness under the Company’s credit facility and repay in full the Company’s subordinated loan agreement with Pollard Equities Limited which was entered into in connection with the Company’s acquisition of INNOVA Gaming Group Inc.

The Common Shares will be offered by way of a short form prospectus to be filed with the securities commissions and other similar regulatory authorities in each of the provinces and territories of Canada pursuant to National Instrument 44-101 Short Form Prospectus Distributions, and in the United States on a private placement basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended.

The closing of the Offering is scheduled to occur on or about February 21, 2018, and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange and the securities regulatory authorities, and the satisfaction of other customary closing conditions.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Common Shares in the United States nor shall there be any sale of the Common Shares in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Common Shares offered under the Offering have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or the securities laws of any state of the United States. Accordingly, the Common Shares offered under the Offering may not be offered or sold in the United States or to U.S. persons unless an exemption from registration is available.