American Bank Note Holographics Closes New Credit Facility and Prepays the Outstanding Chase Manhattan Bank Loan.

ELMSFORD, N.Y.--(BUSINESS WIRE)--Sept. 30, 1999--

Company Estimates Timing of Completion of

Audit and Update of SEC Filings

American Bank Note Holographics, Inc. announced today that it has entered into a Loan and Security Agreement with Foothill Capital Corporation, a subsidiary of Wells Fargo Bank, providing for a credit facility of up to $10 million, which may be increased to up to $15 million with the consent of the parties.

Borrowings under the credit facility are subject to certain borrowing base limitations and other conditions.

The facility has been used in part to prepay the outstanding loans held by a syndicate of commercial banks led by the Chase Manhattan Bank. As a result of this prepayment, the previously disclosed warrants that were issued to Chase and the other banks in connection with the July, 1999 amendment to the Chase credit facility have been cancelled with no dilution to the Company's shareholders.

Chris MacDonald, Senior Vice President of Foothill Capital Corporation, stated, "Foothill is very happy to have entered into this financing relationship with American Bank Note Holographics. We look forward to a mutually rewarding business relationship and to helping ABH achieve its corporate objectives."

The Company is continuing to work with its independent auditors, Deloitte & Touche LLP, on the restatement of the Company's prior period financial statements and the audit of the Company's balance sheets at December 31, 1997 and 1998 and the related statements of income and stockholders' equity and cash flows for each of the three years in the period ended December 31, 1998. The Company expects that the audit will be completed no later than November 15, 1999. Shortly following completion of the audit, the Company expects to file its annual report on Form 10-K for the year ended December 31, 1998. The Company also expects that shortly following the filing of its Form 10-K, the Company will file its quarterly reports on Form 10-Q for each of the quarters ended March 31, 1999, June 30, 1999 and September 30, 1999. Thereafter, the Company anticipates its SEC filings will be made on a timely basis.

The timing of completion of the audit has been impacted by several factors including the need to restate financial statements issued by prior management, the time required to negotiate and secure the refinancing, and the time required to install a new Y2K compliant accounting and manufacturing management system.

Kenneth Traub, President of American Bank Note Holographics, commented, "We are very pleased that we have closed this refinancing which improves our capitalization and enables us to increase our investment in new programs and initiatives to better serve our customers. We appreciate the continued patience of our shareholders, customers, and other constituents as we complete our work with Deloitte & Touche on the restatement and audit of the financial statements."

American Bank Note Holographics is a world leader in the origination, production, and marketing of mass-produced secure images. The Company's products are used for security applications, such as counterfeiting protection for credit and other transaction cards, identification cards and documents of value; as well as for tamper resistance and authentication of high-value consumer and industrial products.

Certain matters in this press release contain forward looking statements that involve risk and uncertainties including, but not limited to, future revenues, earnings prospects and the Company's ability to execute its business plan. Although the Company believes that the expectations are based on reasonable assumptions, it can give no assurance that anticipated results will occur.