VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 20, 2012) -

NOT FOR DISTRUBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Naturally Advanced Technologies Inc. (TSX VENTURE:NAT)(OTCBB:NADVF) ("NAT" or the "Company") is pleased to announce that it has completed its previously announced bought deal offering (the "Offering") of 10.0% convertible secured debentures (the "Debentures") for aggregate gross proceeds of C$10.0 million. The Offering was conducted by way of a short form prospectus dated September 11, 2012 through Cormark Securities Inc. (the "Underwriter") as the sole underwriter for the Offering, who purchased a total of 10,000 Debentures at a price of $1,000 per Debenture. The Company has granted to the Underwriter an option (the "Over-Allotment Option"), exercisable in whole or in part at any time up to 30 days following the closing of the Offering, to purchase up to an additional 15% of the Debentures for the purposes of covering the Underwriter's over-allocation position. In the event that the Over-Allotment Option is exercised in its entirety it would result in additional gross proceeds to the Company of C$1.5 million from the Offering.

The Debentures will mature on September 30, 2017 and are convertible into common shares of the Company at the option of the holder at a conversion price, subject to certain adjustments, of $2.90 per common share, at any time prior to redemption or maturity. The Debentures will be listed for trading on the TSX Venture Exchange under the symbol "NAT.DB".

The Company intends to use the net proceeds of the Offering to complete the installation of the Company's facility in Pamplico, South Carolina and for equipment and equipment deposits, agronomics, and general corporate purposes.

The securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. Any public offering of securities to be made in the United States must be made by means of a prospectus containing detailed information about the Company and management, as well as financial statements.

About Naturally Advanced Technologies Inc.

Naturally Advanced Technologies Inc., through its wholly owned subsidiary, CRAiLAR® Fiber Technologies Inc., has developed proprietary technologies for production of bast fibers, cellulose pulp, and their resulting by-products in collaboration with Canada's National Research Council. Its renewable and environmentally sustainable biomass resources from flax, hemp and other bast fibers offer cost-effective and environmentally sustainable processing and production, along with increased performance characteristics for use in textile, industrial, energy, medical and composite material applications. The Company was founded in 1998 as a provider of environmentally friendly, socially responsible clothing. For more information, visit [ www.naturallyadvanced.com ].

ADVISORY: This press release contains forward looking statements which may include statements concerning completion of any proposed acquisitions, capital programs, debt, funds flow from operations, closing date of the Offering and the anticipated use of the net proceeds of the Offering and Private Placement. Although NAT believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because NAT can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Any proposed acquisition may not be completed if required approvals or some other condition to closing is not satisfied. The closing of the Offering and the Private Placement could be delayed if NAT is not able to obtain the necessary regulatory and stock exchange approvals on the timelines it has planned. The Offering and the Private Placement will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. Accordingly, there is a risk that any proposed acquisition or offering will not be completed within the anticipated time or at all. The intended use of the net proceeds of the Offering and Private Placement by NAT might change if the board of directors of NAT determines that it would be in the best interests of NAT to deploy the proceeds for some other purpose.

The forward looking statements contained in this press release are made as of the date hereof and NAT undertakes no obligations to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.