First Graphene Ltd. — Interim / Quarterly Report 2024

Feb 25, 2024

==> picture [404 x 89] intentionally omitted <==

FIRST GRAPHENE LIMITED

ABN 50 007 870 760

INTERIM FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2023

First Graphene Limited ABN 50 007 870 760 ASX Half-year information – 31 December 2023

Lodged with the ASX under Listing Rule 4.2A This information should be read in conjunction with the 30 June 2023 Annual Report

First Graphene Limited For the half-year ended 31 December 2023

Results for announcement to the market

Results for announcement to the market
			$
Revenue from ordinary activities	Up	10%	335,223
Loss from continuing ordinary activities after tax attributable to members	Up	1%	3,725,330
Net loss for the period attributable to members	Up	1%	3,761,033
Dividends
No dividends have beenpaid or declared duringtheperiod
31 December 2023			31 December 2022
	Cents		Cents
Net tangible asset backing per share	1.20		1.31

Explanation of results

==> picture [455 x 160] intentionally omitted <==

During the first half of the period ending 31 December 2023, First Graphene experienced a 10% increase in revenue on the same half the previous year. Despite the modest increase this was another record first half sales performance for the Company. The growth in sales is attributed predominantly to the company’s application development work in energy generation and cement and the concrete segment. This was further supported by the continued growth in demand for graphene enhanced swimming pools through Aquatic Leisure Technologies.

The Net loss for the half was AUD 3.7m, which includes non-cash expenses for share issuance costs for the prior capital raise in 2021 (AUD 0.9m) and share based payments (AUD 0.3m). Excluding these non-cash accounting expenses the Company’s Operating loss is AUD 2.5m which is broadly in-line with last year. Key items the company expects to realise in second half of FY 2024 are the R&D tax credits for approximately AUD 0.8m, of which AUD 0.6m has already been received in January 2024.

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 3

Whilst the Company continues to deliver its commercialisation strategy, it continues to optimise is operational expenditure. This has resulted in a 33% improvement in operating cash outflow . The company continues to implement cost optimisation strategies to effectively counter the inflationary pressures in the market. These include reduction in storage costs, improving its manufacturing processes and continued investment in non-cash incentives for its employees.

Furthermore, the company successfully raised circa AUD 3 million through its strong investor base utilising a securities purchase plan, further emphasizing the confidence the shareholders have in the company’s strategy and strong growth potential.

Revenue and Cashflow Trend

==> picture [373 x 235] intentionally omitted <==

----- Start of picture text -----

+10%
+58%
----- End of picture text -----

==> picture [376 x 248] intentionally omitted <==

----- Start of picture text -----

34%
Improvement
33%
Improvement
----- End of picture text -----

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 4

DIRECTOR’S REPORT

Your directors present their report on the consolidated entity (referred to hereafter as the “Group”) consisting of First Graphene Limited and the entities it controlled at the end of, or during, the half-year ended 31 December 2023.

DIRECTORS

The following persons were Directors of First Graphene Limited during the half-year and up to the date of this report:

• Warwick Robert Grigor

• Michael Bell

• Michael Quinert

• Dr Andy Goodwin

OVERVIEW

The first half of FY2024 saw a significant expansion in global use of First Graphene’s leading PureGRAPH[®] product, with multiple agreements secured with leading partners and agencies around the world. This escalation in requests has reaffirmed the Company’s position as a world leader in the manufacture and commercialisation of graphene.

Financially, the Company started strong in FY2024 with a bolstered order pipeline, receival of research funding from the Cooperative Research Centres Project (CRC-P) and a successful Share Purchase Plan which raised more than AUD$2.9 million. This funding will be used to accelerate First Graphene’s ongoing commercial work in the cement and concrete segment.

Importantly, extensive research and development (R&D) activities continued as various industries look for graphene-enhanced alternatives to increase material performance. Results from this research provided further confidence in the wide range of potential opportunities for the Company’s product, beyond the four primary segments.

International demand for alternative, ‘green’ technologies continues to rise, reinforcing First Graphene’s strong position as a leader in the development and delivery of grapheneenhanced materials. With ongoing support from industry, global universities and customers across a variety of industries, First Graphene’s products will continue to evolve into highperforming, market-ready solutions.

Some key highlights include:

• Specialty concrete products developed with commercial partners:

• Positive results from second stage of world-leading graphene-enhanced cement trials with Breedon Cement Ltd (United Kingdom)

• Graphene-enhanced sand tested for commercial use with GtM Action (New Zealand)

• Expansion of PureGRAPH[®] into Asia as trials began with one of Thailand’s largest cement producers (Thailand)

• Successful registration of PureGRAPH-CEM[®] trademark in Australia and European Union,

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 5

DIRECTOR’S REPORT

with registration process underway in United States

• Joint Development Agreement (JDA) signed with Australian company Tribotech to develop graphene-enhanced conveyor rollers for the mining industry

• Memorandum of Understanding (MOU) signed with Abu Dhabi-based EMDAD Group to create a hydrodynamic cavitation reactor to convert petroleum feedstock from oil producers to battery-grade graphite, graphene, and hydrogen

• Funding boost received via CRC-P research grant and successful Share Purchase Plan

• Extensive research conducted into graphene functionality and effectiveness in a wide variety of applications

Products under development or using PureGRAPH[®]

Cement and Concrete

• Cement additives for reduction of carbon emissions and increased strength

• Enhanced sand for mixing in concrete solutions

• Shotcrete and heavy wear concrete slabs

• Improved additives for both reducing CO2 emissions in the cement production process and improving overall durability of concrete

Composites and Plastics

• Polymer solar thermal cells

• Advanced fiberglass swimming pools

• Unique heating devices that can be retrofitted to existing gas-fired heating units to greater efficiency and reductions in nitrous oxide and carbon emissions

Coatings, Adhesives, Sealants, Elastomers (CASE) and Foams

• Electrostatic dissipative coatings

• Sporting apparel and footwear

• Noise and vibration dampening foams

Energy Generation and Storage

• Supercapacitors technology using metal oxide decorated products that improve on activated carbon

• Catalysts for cathode oxygen reduction in fuels cells, being cheaper alternatives to platinum

• Hydrodynamic cavitation technology for converting petroleum feedstock to synthetic graphite/graphene and clean hydrogen

• Perovskite solar cells for enhanced transfer of heat and durability

Cement and Concrete

To signify the world-leading qualities of the Company’s products and the advancements made in the cement industry, First Graphene successfully registered PureGRAPH-CEM[®] in Australia and the European Union, with work underway to trademark the name in the United States. This protection of the Company’s leading product in the growing green cement industry reinforces First Graphene’s commitment to both carbon emission reducing practices and

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 6

DIRECTOR’S REPORT

commercialisation of PureGRAPH-CEM[®] .

Ongoing collaboration with the United Kingdom’s largest cement producer, Breedon Cement Ltd (“Breedon”), continues under the Joint Development and Commercialisation Agreement. First Graphene received further results from the second phase of graphene-enhanced cement trials conducted with Breedon, Morgan Sindall and the University of Manchester, which found CEM II A-L cement performed as well as a slab made with a higher specification CEM I cement.

This follows the first stage of the trials delivering an immediate 15% reduction in carbon emissions as a result of lower clinker factors, as well as early-stage strength gain. Additional trials have been planned with Breedon to optimise the graphene-enhanced grinding aid to further improve the performance of this advanced cement.

First Graphene also received results from the world-first practical trial of graphene sand, conducted with New Zealand partner, GtM Action (“GtM”). Used to create fire retardant concrete panels, two tonnes of graphene sand were used to determine if the mixed blend improved dispersion of graphene. Initial results found the concrete poured and handled well and enhanced cement strength, providing confidence the process is scalable.

First Graphene also extended the Company’s reach into the Asian market by collaborating with Siam City Cement Public Company Limited (“Siam City Cement”) to trial grapheneenhanced cement for its applications. Siam City Cement is one of Thailand’s largest cement companies and is focused on accelerating emission reduction in its processes. This was a significant commercialisation development for First Graphene, bolstering global awareness of PureGRAPH[®] and its qualities as a material enhancer.

Energy Technology

Work to implement graphene into energy technologies of the future has rapidly expanded during the half, with a landmark Memorandum of Understanding (MOU) signed between First Graphene and Abu Dhabi-based EMDAD Group (EMDAD). This agreement will see the Company’s Kainos Technology used in the design, build, and commission of a small-scale, mobile hydrodynamic cavitation reactor which will convert petroleum feedstock from oil producers to battery-grade graphite, graphene, and hydrogen.

The MOU will be supported by research conducted at the National Physical Laboratory (NPL) in the UK to validate the cavitation process and optimize conditions. The Company is actively looking to further this collaboration with the NPL, with the research opportunities anticipated to further the performance of First Graphene’s products.

First Graphene also conducted further research into graphene-enhanced electrocatalysts, which could pave the way for the Company’s products to provide a high-performing, costeffective solution for the hydrogen production catalyst market. This research found PureGRAPH[®] -enhanced electrocatalysts can reduce the amount of power consumption during hydrogen generation by almost half, as well as increase throughput by 64% and reduce raw material costs by 50%.

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 7

DIRECTOR’S REPORT

First Graphene was also a joint recipient of a R&D grant of A$2.03 million for a three-year collaborative project led by Australian solar panel manufacturer Greatcell Energy. The Cooperative Research Centres Project (CRC-P) Round 14 funding will assist with the commercialisation of ultra-low cost, flexible perovskite solar cell fabrication using First Graphene’s PureGRAPH[®] . This research could provide a more affordable energy solution for housing and businesses across the world.

Composites and Plastics

First Graphene has continued collaborative efforts with UK-based Senergy Innovations to develop thermally conductive polymer composites to combat challenges faced in the solar thermal industry. These difficulties include low conductivity and temperature tolerance in traditional polymers. The graphene-enhanced solution from First Graphene and Senergy has improved heat transfer efficiencies and can be successfully molded into complex shapes while maintaining functional properties including strength.

First Graphene also signed a Joint Development Agreement (JDA) with Australian manufacturer Tribotech to create graphene-enhanced composite conveyor rollers for mining operations. The two-year agreement will aim to increase the durability of the existing range of rollers, extend service life and reduce waste from the process. This is a major milestone for First Graphene’s commercialisation strategy as it expands into Western Australia’s world-leading iron ore mining and processing industry.

Coatings, Adhesives, Sealants, Elastomers (CASE) and Foams

First Graphene continued to engage with existing clients and partners to progress grapheneenhanced solutions for Electrostatic Discharge Flooring (ESD), Cold Cure Ceramics, bearing lubrication, footwear and anti-corrosion coatings. Significant improvements were made to optimise ESD coating applications, with a prototype system developed which passes International Electrostatics Standards on a laboratory scale. The Company has also finalised plans for larger scale trials of PureGRAPH[®] 10 in rubber applications, with a specific focus on improving tear strength when graphene is added.

Other activities

First Graphene conducted two training sessions with international distribution partner Keyser and Mackay (“K&M”) about graphene performance in coating applications and thermoplastics and loading recommendations.

This marked the beginning of a five-year agreement with the specialty chemicals company, who have exclusive rights to distribute PureGRAPH® into sectors across Europe, except cement and concrete. The engagement with K&M client base has already had early success at laboratory scale trials with many moving to larger scale commercial trials in the coming months.

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 8

DIRECTOR’S REPORT

AUDITORS INDEPENDENCE DECLARATION

A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 is set out on page 10.

Signed in accordance with a resolution of Directors and on behalf of the Directors by:

==> picture [88 x 50] intentionally omitted <==

Michael Bell

CEO & Managing Director Perth, Western Australia, 23 February 2024

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 9

Auditor’s Independence Declaration

==> picture [481 x 455] intentionally omitted <==

==> picture [481 x 39] intentionally omitted <==

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 10

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the Half-Year Ended 31 December 2023

	Half-Year
	2023 2022
Note	$ $
Continuing operations Revenue from contracts with customers Cost of goods sold Gross profit/(loss) Other Operating income 2 Research & development 3(a) Selling & marketing 3(b) Mineral lease maintenance 3(c) General & administrative 3(d)	335,223 304,204 (189,944) (180,268)
	145,279 123,936
	105,717 268,911 (811,703) (908,484) (164,630) (291,476) (60,320) (56,987) (1,752,161) (1,715,719)
Loss from continuing operationsbefore tax expense and finance
	(2,537,818) (2,579,819)
Non-Operating Income / Expense Share Based Payment expense Finance income 11 Finance expense 6 Loss from continuing operations before tax expense Income tax benefit/(expense) Loss after tax from continuing operations Other comprehensive income Items which may be reclassified to the profit or loss Foreign currency translation difference on foreign operations Total comprehensive loss for the period attributable to the owners of First Graphene Limited Loss for the period attributable to: Owners of First Graphene Limited Non-controlling interests Total Loss for the period attributable to Owners of First Graphene Limited	(279,954) 13,178 (470,323) 17,874 (920,736)(668,005)
	(3,725,330) (3,700,273) - - (3,725,330) (3,700,273)
	(35,703) 2,722
	(3,761,035) (3,697,551)
	(3,725,330) (3,700,273) - -
	(3,725,330) (3,700,273)

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 11

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the Half-Year Ended 31 December 2023

			2023
	Note		$
Total comprehensive loss for the period
attributable to:
Owners of First Graphene Limited Non-controlling interests Total comprehensive loss for the period attributable to the owners of First Graphene Limited
Loss per share for the period attributable to the
owners of First Graphene Limited:
Basic loss per share (cents per share) Diluted loss per share (cents per share)		(0.63) (0.64) (0.63) (0.64)

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 12

Consolidated Statement of Financial Position

As at 31 December 2023

	31 30
Note	December June
	2023 2023
	$ $
Current Assets Cash and cash equivalents Inventories 4 Trade and other receivables Other current assets 5 Total Current Assets Non-Current Assets Property, plant, and equipment Inventories 4 Intangible assets Right of use asset Other Assets Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Lease liabilities Employee liabilities Financial liabilities 6 Total Current Liabilities Non-Current Liabilities Lease Liabilities Total Non-Current Liabilities Total Liabilities Net Assets Equity Issued capital 7 Reserves Accumulated losses Capital and reserves attributable to the owners of First Graphene Limited Non-controlling interest Total Equity	4,440,077 3,225,954 1,560,291 1,759,014 43,878 346,495 286,196 726,064
	6,330,442 6,057,527
	2,234,304 2,479,526 2,215,237 2,215,237 148,454 151,701 523,117 579,151 224,339 229,244
	5,345,451 5,654,859
	11,675,893 11,712,386
	118,102 435,832 96,421 90,539 278,533 276,118 2,749,980 3,622,000
	3,243,036 4,424,489
	389,706 440,117
	389,706 440,117
	3,632,742 4,864,606
	8,043,151 6,847,780
	111,273,047 106,378,130 6,121,297 6,095,513 (109,536,980) (105,811,650)
	7,857,364 6,661,993 185,787 185,787
	8,043,151 6,847,780

The above consolidated statement of financial position should be read in conjunction with the accompanying notes

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 13

Consolidated Statement of Changes in Equity For the Half-Year Ended 31 December 2023

	Issued capital Share based Translation Other Reserve Accumulated Non- Total equity
	payments reserve reserve losses controlling interest
	$ $ $ $ $ $ $
As at 1 July 2023 Profit/(loss) for the period Other Comprehensive income	106,378,130 6,171,889 590 (76,966) (105,811,650) 185,787 6,847,780 - - - - (3,725,330) - (3,725,330) (35,703) (35,703)
Total comprehensive
income for the period	- - (35,703) - (3,725,330) - (3,761,033)
	4,684,936 - - - - - 4,684,936 (8,487) - - - - - (8,487) - - - - - - - 218,468 61,487 - - - - 279,955

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 14

Consolidated Statement of Changes in Equity

For the Half-Year Ended 31 December 2022

	Issued capital	Share based	Translation	Other Reserve	Accumulated	Non-	Total equity
		payments	reserve		losses	controlling
		reserve				interest
	$	$	$	$	$	$	$
As at 1 July 2022	102,845,906	5,931,862	(116,530)	(76,966)	(100,389,938)	185,787	8,380,121
Profit/(loss) for the period	-	-	-	-	(3,697,551)	-	(3,697,551)
Other comprehensive
income	-	-	24,073	-	-	-	24,073
Total comprehensive
income for the period	-	-	24,073	-	(3,697,551)	-	(3,673,478)
Transactions with owners
in their capacity as
owners
Shares issued	2,552,381	-	-	-	-	-	2,552,381
Share issue costs	(32,433)	-	-	-	-	-	(32,433)
Transactions with non-
controlling interest	-	-	-	-	-	-	-
Share based payment	237,646	232,677	-	-	-	-	470,323
Balance at 31st
December 2022	105,603,500	6,164,539	(92,457)	(76,966)	(104,087,488)	185,787	7,696,915

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 15

Consolidated Statement of Cash Flows

For the Half-Year Ended 31 December 2023

	Half-Year
Note	2023 2022
	$ $
Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest received Interest expense Other income – R&D credit received Net cash outflows from operating activities Cash flows from investing activities Payments for property, plant, and equipment Payments for intellectual property Net cash outflows from investing activities Cash flow from financing activities Proceeds from rights issue/ placement of shares Payment for share issue costs Reduction of leased liability Net cash inflows/(outflows) from financing activities Net Increase/(decrease) in cash and cash equivalents Exchange rate adjustments Cash and cash equivalents at beginning of the period Cash at the end of the period	735,134 390,818 (2,199,796) (2,449,393) 13,178 17,874 (20,736) (3,587) 96,643 -
	(1,375,577) (2,044,288)
	- (3,272) - (44,445)
	- (47,717)
	2,632,962 - - (32,433) (44,529) (98,060)
	2,588,433 (130,493)
	1,212,856 (2,222,498) 1,267 (2,387)
	3,225,954 7,004,724
	4,440,077 4,779,839

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 16

Notes to the Consolidated Financial Statements

1. Basis of preparation of half-year financial statements

This interim consolidated financial report for the half-year reporting period ended 31 December 2023 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

This interim consolidated financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the Annual Financial Statements of First Graphene Limited as at 30 June 2023 and any public announcements made by First Graphene Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

These interim financial statements were authorised for issue in accordance with a resolution of directors on 23 February 2024.

Accounting policies

New standards, interpretation and amendments adopted by the Group

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 30 June 2023, except for the adoption of new standards effective as of 1 July 2023. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

Going Concern

For the period ended 31 December 2023 the entity recorded a loss of $3,725,330 (2022:$3,700,273) and had net cash outflows from operating activities of $1,375,577 (2022:$2,044,288).

The ability of the entity to continue as a going concern is dependent on securing additional funding through the sale of equity securities to either existing or new shareholders to continue to fund its operational and marketing activities.

These conditions indicate a material uncertainty which may cast a significant doubt about the entity’s ability to continue as a going concern and, therefore, it may be unable to realise its assets and discharge its liabilities in the normal course of business.

The financial statements have been prepared on the basis the entity is a going concern, which contemplates the continuity of normal business activity, realisation of assets and settlement of liabilities in the normal course of business for the following reasons:

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 17

Notes to the Consolidated Financial Statements

==> picture [459 x 8] intentionally omitted <==

The entity expects to receive additional funds via the issue of equity securities to either existing or new shareholders; and

• In the event of further funds not being raised, the entity’s activities would be wound back to a sustainable level.

Should the entity not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business, and at amounts which differ from those stated in the financial statements and the financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities which might be necessary should the entity not continue as a going concern.

2. Other Income

	31 December 31 December
	2023 2022
	$ $
Research & Development tax incentives Other Operating Income Total other income	96,643 9,074 268,911 -
	105,717 268,911

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 18

Notes to the Consolidated Financial Statements

==> picture [460 x 9] intentionally omitted <==

3. Operating Expenses Operating Expenses (a) Research & development expenses Employee expenses Consultants and research programs Legal and other professional fees Depreciation Amortisation Other (b) Selling & marketing Employee expenses Advertising & promotions Depreciation Other (c) Mining Lease maintenance Employee expenses Depreciation Amortisation Other (d) General & administrative Employee expenses Finance & company secretarial fees Legal and other professional fees ASX listing, share registry and other corporate costs Depreciation Amortisation Other expenses Total administrative expenses
	31 December 31 December
	2023 $ 2022 $
	345,261 320,727 26,566 266,864 - - 9,351 18,605 56,034 15,606 374,491 286,682
	811,703 908,484
	83,872 211,845 65,390 55,663 1,329 1,551 14,039 22,417
	164,630 291,476
	16,760 16,753 - - - - 43,560 40,234
	60,320 56,987
	806,731 802,339 9,255 28,346 252,931 196,956 96,562 64,909 233,275 235,129 - 55,631 353,407 332,409
	1,752,161 1,715,719

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 19

Notes to the Consolidated Financial Statements

4. Inventory

	31 December 30 June
	2023 2023
	$ $
Raw materials Finished goods Work in progress Less: Provision for impairment Carrying amount Disclosed as: Current Non-current Total inventory	2,036,864 2,057,681 1,681,625 1,859,532 99,159 99,159
	3,817,648 4,016,371 (42,120) (42,120)
	3,775,528 3,974,251
	1,560,291 1,759.014 2,215,237 2,215,237
	3,775,528 3,974,251

5. Other current assets

	31 December 30 June
	2023 2023
	$ $
Prepayments Total other current assets	286,196 726,064
	286,196 726,064

6. Financial liabilities

Accounting Policy

Convertible notes were issued by the Group which include embedded derivatives. Convertible notes are initially recognised as financial liabilities at fair value.

On initial recognition the fair value of the convertible notes equated to the proceeds received and subsequently the convertible note is measured at fair value. The movements are recognised in profit and loss as finance costs except to the extent the movement is attributed to changes in the group’s own credit risk status in which case, it is recognised in Other Comprehensive Income.

Terms and Conditions

The Company entered into a Share Placement Agreement with Specialty Materials Investments, LLC (the Investor) on the 27[th] of May 2021.

• Total AUD amount that can be drawn down: $8,000,000

• Initial deposit shares issued: 2,800,000 shares at $0.235 per share

• Fee paid: 1,021,276 shares at $0.235 per share

• Final AUD value of shares to be issued: $8,480,000 (“subscription amount”)

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 20

Notes to the Consolidated Financial Statements

• Other Terms:

• The final number of shares to be issued by the Company will be determined by applying the Purchase Price (as set out below) to the subscription amount. The Purchase Price will initially be equal to $0.30 per share and will reset after 10 August 2021 to the average of the five daily volume-weighted average prices selected by the Investor during the 20 consecutive trading days immediately prior to the date of the Investor’s notice to issue shares, rounded down to the next half a cent if the share price is at below 50 cents and whole cent if the share price is at above 50 cents, with no discount applicable to this formula. To the extent that Placement Shares are issued after six months, or 12 months, the Investor will receive a discount of, respectively, 3% or 6% to the foregoing Purchase Price formula.

• The Purchase Price will be the subject of a Floor Price of $0.16. If the Purchase Price formula were to result in a purchase price that is less than the Floor Price, the Company may refuse to issue shares and instead opt to repay the relevant subscription amount in cash (with a 5% premium), subject to the Investor’s right to receive Placement Shares at the Floor Price in lieu of such cash repayment. The Purchase Price will not be the subject of a cap.

• The Company will issue the Placement Shares in relation to all or part of each of the above investments on the Investor’s request, during the period ending 36 months after the date of the investment.

• The Company has retained the right (but has no obligation) to repay the subscription amount in cash in lieu of issuing shares by way of a repayment of the subscription amount together with the difference between the market price of the shares and the Purchase Price (if any) in relation to the shares that would otherwise have been issued.

	31 Dec 2023	30 Jun 2023
	$	$
Current
Convertible liabilities - Share Placement	2,622,000	3,622,000
Agreement
SPP shares to be issued January 2024	127,980	-
	2,749,980	3,622,000
Finance Expense
Finance Cost -Share Placement Agreement	900,000	819,130
Interest – Right of use Asset	13,071	9,230
Finance costs - Other	7,665	-
Foreign Exchange loss/(gain) - unrealised	-	(25,156)
	920,736	803,204
Opening Balance at 1st Jul 23		3,622,000
20,000,000 Shares at an issue price of $0.05 per Share on 06 Oct 2023		(1,000,000)
Closing Balance at 31st Dec 2023		2,622,000

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 21

Notes to the Consolidated Financial Statements

7. Issued capital

	31 30 June 31 30 June
	December 2023 December 2023
	2023 Number of 2023
	Number of Shares $ $
	Shares
Ordinary shares Issued and fully paid	656,951,723 590,205,277 111,273,047 106,378,130
	31 31 31 31
	December December December December
	2023 2022 2023 2022
	Number of Number of $ $
	Shares Shares
Movements in ordinary share capital At the beginning of the period Shares issued to employees Entitlement issue / SPP Shares issued to third party Share issue costs	590,205,277 560,033,776106,378,131 102,845,907 3,231,821 1,996,896 218,467 237,646 43,514,625 - 2,784,936 - 20,000,000 19,285,715 1,900,000 2,552,381 - - (8,487) (32,433)
	656,951,723 581,316,387 111,273,047 105,603,501

8. Dividends

No dividends have been paid or declared during the period. (2022:Nil)

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 22

Notes to the Consolidated Financial Statements

9. Earnings per share
	2023	2022
	A$	A$
Loss attributable to the owners of First
Graphene used in calculating basic and	(3,761,033)	(3,697,551)
diluted loss per share
	Number of	Number of
	shares	shares
Weighted average ordinary shares used in
calculating basic and diluted earnings per	601,514,306	574,383,912
share
Basic and diluted loss per share - cents per	(0.63)	(0.64)
share
10. Options
(a) Share options	31 December	30 June
	2023	2023
Unlisted share options	Number	Number
At the beginning of the period	15,000,000	15,000,000
Options issued	-	-
Options exercised during the
period	-	-
Options expired	(15,000,000)	-
Total	-	15,000,000
(b) Performance rights	31 December	30 June
	2023	2023
Unlisted performance rights	Number	Number
At the beginning of the period	1,745,888	60,000
Performance rights issued	4,116,974	3,682,784
Performance rights converted to shares	(3,231,821)	(1,996,896)
At the end of the period	2,631,041	1,745,888

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 23

Notes to the Consolidated Financial Statements

11. Share based payments

Incentive Award Plan & Performance Rights to Non-Executive Directors (NED)

Under the Company’s Incentive Award Plan, Performance Rights (PR) are granted to employees following the release of the Company’s full financial year results starting October 2022 till December 2024. The employees have an option to convert each right to a fully paid ordinary share in the company up to 2 years following the allocation. At the time of allotment of the PRs the Company recognises an employee expense, with a corresponding increase in reserves. When the employee chooses to convert the rights to ordinary shares the company recognises an increase in equity with a corresponding decrease in reserves previously recognised. Over the 6-month period ending 31 December 2023, the company has issued 4,116,974 PRs to employees and Key Management Personnel.

Performance rights issued to Employees & KMP

The following performance rights were granted to employees & KMP:

	Number of	Date of Grant	Share Price	Vesting Date
	Performance		A$
	Rights
Employees	1,889,983	11/09/2023	0.068	11/09/2023
KMP *	2,226,991	11/09/2023	0.068	11/09/2023
	**4,116,974 **

*These KMP rights have been converted to shares during the period.

• Michael Bell – 1,638,704

• Aditya Asthana – 588,287

Share based payment expense Summary

The Group recognised total share-based payment expenses as follows:

Half Year	2023 2022
Performance rights issued to employees Performance rights issued to KMP Options issued to directors Performance rights issued to Non-Executive Directors Total	128,519 158,248 151,435 174,914 - - 80,911 56,250
	279,954 470,323

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 24

Notes to the Consolidated Financial Statements

12. Segment reporting

Identification of reportable segments

The Group has identified its operating segments based on the internal reports which are reviewed and used by the Board (the chief operating decision makers) in assessing performance and in determining the allocation of resources.

The existing operating segments are identified by management based on the way the Group’s operations were carried out during the financial year. Discrete financial information about each of these operating businesses is reported to the Board on a monthly basis.

The reportable segments are based on aggregated operating segments determined by the similarity of the asset base and revenue or income streams, as these are the sources of the Group’s major risks and have the most effect on the rates of return. The Group’s segment information for the current reporting period is reported based on the following segments:

Graphene production

As the Company expands its graphene production and inventory, the Board monitors the Company based on actual verses budgeted expenditure incurred.

Research and development

As the Company expands its research inhouse and in conjunction with third parties, the Board monitors the Company based on actual verses budgeted expenditure incurred.

Corporate services

This segment reflects the overheads associated with maintaining the ASX listed FGR corporate structure, identification of new assets and general management of an ASX listed entity.

Mining and exploration activities

Although the Company has suspended its mineral exploration and development in Sri Lanka, the Board monitors the Company based on actual verses budgeted exploration expenditure incurred.

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 25

Notes to the Consolidated Financial Statements

12. Segment reporting (continued)

Business	Graphene	Production	Research & Development	Research & Development	Corporate Services	Corporate Services	Mining Asset	Mining Asset		Total	Total
Segment							Maintenance
	6 months to	6 months to	6 months to	6 months to	6 months to	6 months to	6 months to	6 months to		6 months to	6	months to
	31	31	31	31	31	31	31		31	31		31
	December	December	December	December	December	December	December	December		December	December
	2023	2022	2023	2022	2023	2022	2023		2022	2023		2022
	A$	A$	A$	A$	A$	A$	A$		A$	A$		A$
Revenue from
external
customers	138,974	304,204	196,249	-	-	-	-		-	335,223		304,204
Profit / (Loss) from	(471,053)	-	(615,454)	(639,694)	(1,390,991)	(1,883,138)	(60,322)	(56,987)		(2,537,820)	(2,579,819)
Continuing
operations
Depreciation
expense	168,327	216,953	9,351	18,605	66,277	19,727	-		-	243,955		255,285
Amortisation
expense	-	31,657	56,034	2,084	-	55,631	-		-	56,034		89,372
Business	Graphene Production		Research & Development		Corporate Services		Mining Asset			Total
Segment							Maintenance
	31		31		31		31			31
	December	30 June	December	30 June	December	30 June	December	30	June	December		30 June
	2023	2023	2023	2023	2023	2023	2023		2023	2023		2023
Segment assets	3,889,552	4,389,214	3,073,766	3,998,018	4,690,478	3,295,164	22,097	29,994		11,675,893		11,712,390
Segment liabilities	(174,210)	(174,210)	104,373	(345,398)	(3,565,487)	(4,343,045)	2,582	(1,956)		(3,632,742)	(4,864,609)

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 30

Notes to the Consolidated Financial Statements

12. Segment reporting (continued)

Geographical areas

In presenting the information based on geographical areas, segment revenue is based on the geographical location of operations. Segment assets are based on the geographical location of the assets.

	6 months to 6 months to
	31 December 31 December 31 December 30 June
	2023 2023 2022 2023
Geographical segments	Revenue Total Assets Revenue Total Assets
	$ $ $ $
Australia United Kingdom Sri Lanka Total	335,223 11,064,710 304,204 10,660,460 - 589,086 - 1,021,932 - 22,097 29,994
	335,223 11,675,893 304,204 11,712,386

Reconciliation of segment assets and liabilities to the Statement of financial Position

Reconciliation of segment assets to the Statement of Financial Position

	31 December 30 June
	2023 2023
	$ $
Total segments assets Inter-segment elimination Total assets per statement of financial position	17,639,978 17,905,755 (5,964,085) (6,193,369)
	11,675,893 11,712,386

Reconciliation of segment liabilities to the Statement of Financial Position

	31 December 30 June
	2023 2023
	$ $
Total segments liabilities Inter-segment elimination Total liabilities per statement of financial position	22,744,036 23,418,468 (19,111,294) (18,553,852)
	3,632,742 4,864,606

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 31

Notes to the Consolidated Financial Statements

13. Subsequent events after Reporting Date

No matter or circumstance has arisen since 31 December 2023 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

14. Contingent liabilities and contingent assets

There are no contingent liabilities and contingent assets to report as of 31 December 2023.

15. Related Party Transactions

There has been no change to related party transactions other than the issue of Performance rights disclosed in note 11.

16. Correction of prior period classification of lease liability

In the FY 2023 financial statements the Company had incorrectly classified its lease liability entirely as a current liability. A split between current and non-current liability was required. This reclassification in the Company’s Statement of Financial Position (on Page 13) has now been made. There is no change to the Company’s total assets or total liabilities. Below is a summary of the changes made:

	30 June 30 June
	2023 2023
	$ $
	Reclassified Previously
	Reported
Current Liabilities Trade and other payables Lease liabilities Employee liabilities Financial liabilities 6 Total Current Liabilities Non-Current Liabilities Lease Liabilities Total Non-Current Liabilities Total Liabilities Net Assets	435,832 435,832 90,539 530,656 276,118 276,118 3,622,000 3,622,000
	4,424,489 4,864,606
	440,117 -
	440,117 -
	4,864,606 4,864,606
	6,847,780 6,847,780

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 32

Director’s Declaration

In the Directors’ opinion:

• a) The financial statements and notes set out on pages 11 to 32 are in accordance with the Corporations Act 2001, including:

• a. Complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and

• b. Giving a true and fair view of the Consolidated Entity’s financial position as at 31 December 2023 and of its performance for the half-year ended on that date, and

• b) There are reasonable grounds to believe First Graphene Limited will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors on 23 February 2024.

==> picture [88 x 51] intentionally omitted <==

Michael Bell

CEO & Managing Director Perth, Western Australia, 23 February 2024

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 33

Independent Auditor’s Report

==> picture [416 x 686] intentionally omitted <==

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 34

Independent Auditor’s Report

==> picture [451 x 516] intentionally omitted <==

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 35

Additional Securities Information

(Note this information does not form part of the audit reviewed financial statements)

Additional information not shown elsewhere in this report is as follows. This information is complete as at 14 February 2024.

a) Distribution of Shareholdings – Fully Paid Ordinary Shares:

Size of Holding	Number of Shareholders Number of Share	Number of Shareholders Number of Share
1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over	179 1,317 1,025 2,311 544 5,376	30,285 4,501,395 8,067,497 82,628,243 563,724,303 658,951,723

Equity Security	Quoted	Unquoted
Fully paid ordinary shares	658,951,723	-
Options	-	4,500,000

b) Top 20 Security Holders – Fully Paid Ordinary Shares (FGR)

		Number of
	Holder Name	Shares	%
	BNP PARIBAS NOMINEES PTY LTD ACF
1	CLEARSTREAM	190,358,106	28.89%
2	CITICORP NOMINEES PTY LIMITED	34,376,976	5.22%
3	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	23,055,016	3.50%
4	BNP PARIBAS NOMS PTY LTD	22,980,725	3.49%
5	TWYNAM INVESTMENTS PTY LTD	21,659,589	3.29%
6	GREGORACH PTY LTD	15,685,946	2.38%
7	BUILDING ON THE ROCK LIMITED	14,685,000	2.23%
8	IPS Holdings	13,828,400	2.10%
9	DEBT MANAGEMENT ASIA CORPORATION	12,757,146	1.94%
	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED -
10	A/C 2	4,577,875	0.69%
11	WILLIAM TAYLOR NOMINEES PTY LTD	4,465,959	0.68%
12	GINGA PTY LTD	4,217,565	0.64%
13	MR RICHARD HOPETOUN BITCON	3,210,000	0.49%
14	MR ADAM O'DONNELL FERRIS	2,968,750	0.45%
15	MR MICHAEL BELL	2,880,808	0.44%
16	IPS NOMINEES LIMITED	2,759,611	0.42%
	BNP PARIBAS NOMINEES PTY LTD
17		2,746,958	0.42%
18	MR RYAN JEHAN ROCKWOOD	2,500,000	0.38%
	MR MICHAEL ALAN ANTOSKA &
19	MRS ELISA ANTOSKA	2,368,750	0.36%
20	DR PAUL FRANCIS MORTON	2,203,750	0.33%
	Total	384,286,930	58.32%
	Total issued capital - selected security class(es)	658,951,723	100.00%

At 14 February 2024, there were 2,104 shareholders holding less than a marketable parcel of shares ($0.06 cents on this date) in the Company totalling 8,573,686 ordinary shares amounting to 1.3 % of the issued capital.

First Graphene Limited Consolidated Interim Financial Report – December 2023

Page 36