NAT, Tuscarora Team To Develop CRAiLAR® Flax Blends For New Applications

Naturally Advanced Technologies Inc. (NAT), Vancouver, Canada, has granted a non-exclusive,
non-transferable license to Mt. Pleasant, N.C.-based Tuscarora Yarns Inc., under which Tuscarora
will design and manufacture specialty yarns containing blends of NAT’s CRAiLAR® Flax fiber with
cotton or other fibers. The yarns are being developed for sale and distribution to third-party
Crailar licensees. NAT expects the partnership will open avenues for the fiber’s use in
heretofore-unexplored apparel and home furnishings sectors.

“Tuscarora is one of the most innovative yarn spinners in the world, and has the ability to
prepare us for entry into several unexplored categories such as couture fashion, sports
performance, extreme weather gear, and certain sectors of home furnishings,” said NAT CEO Ken
Barker. “This agreement will seek to push the applications of CRAiLAR beyond our first phase of
cotton blending and establish new market sectors for this unique and sustainable natural fiber.”

Crailar technology comprises an enzymatic process that converts bast fibers such as hemp,
flax, jute and kenaf into materials that are as soft as cotton but more durable and eco-friendly,
according to NAT. These bast fibers can be blended with cotton and other fibers; and can be
processed using existing spinning, weaving, knitting or other fabric-forming processes.
Applications range from various apparel and home textiles products to industrial textiles.

According to Tom McCall, Tuscarora’s director of business development, Crailar Flax is
superior to traditional flax fiber used in textiles.

“We have spun flax for many years and are very comfortable with the fiber in general,” McCall
said. “Naturally Advanced Technologies has definitely got a better flax product than anything else
on the market. It has a better hand, and we think it’s a very interesting technology.”

Tuscarora already has Crailar product in development for various retailers, McCall noted.
“Most of our work is on the ring-spun side at the present time,” he explained, noting Tuscarora’s
hands-on approach in working with the customer. “Our engineering department will help the customer
design the yarn for the application — for both wovens and knits — and do all the R&D work, and
then we’ll produce the product for the customer.”

NAT’s partnership with Tuscarora follows the initiation over the past year of several other
commercialization and development agreements between NAT and companies including HanesBrands Inc.,
Levi Strauss & Co., Cintas, Target and others.

February 1, 2012