This prospectus does not constitute a public offering of any securities. No securities regulatory authority has expressed an opinion about information contained herein and it is an offence to claim otherwise.

PROSPECTUS

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Non-Offering Prospectus

March 31, 2021

GRAPHENE MANUFACTURING GROUP PTY LTD.

No securities are being offered pursuant to this prospectus

This non-offering prospectus (the “ Prospectus ”) is being filed with the securities regulatory authorities in the Provinces of Ontario (the “ Principal Regulator ”), British Columbia, Saskatchewan and Alberta to enable Graphene Manufacturing Group Pty Ltd. (the “ Company ” or “ GMG ”) to become a reporting issuer pursuant to applicable securities legislation in the Provinces of Ontario, British Columbia, Saskatchewan and Alberta, and to enable Cuspis Capital Ltd. (“ Cuspis ”), a capital pool company pursuant to Policy 2.4 – Capital Pool Companies (the “ CPC Policy ”) of the TSX Venture Exchange (the “ Exchange ” or the " TSXV "), to complete its Qualifying Transaction as defined under the CPC Policy with GMG (the “ Proposed Qualifying Transaction ”). Upon the final receipt of this Prospectus by the Principal Regulator, the Company will become a reporting issuer in Ontario, British Columbia, Saskatchewan and Alberta.

No securities are being offered pursuant to this Prospectus. As such no proceeds will be raised, and all expenses incurred in connection with the preparation and filing of this Prospectus will be paid by the Company from its general corporate funds.

There is currently no market through which the securities of the Company may be sold and holders of the Company’s securities may not be able to resell any such securities. This may affect the pricing of the Company’s securities in the secondary market, the transparency and availability of trading prices, the liquidity of the securities and the extent of issuer regulation. See “ Risk Factors ” and “ Cautionary Note Regarding ForwardLooking Information ”.

The Proposed Qualifying Transaction must be approved by the Exchange in accordance with the CPC Policy. Except as specifically contemplated in the CPC Policy, until completion of the Proposed Qualifying Transaction, Cuspis has not carried on and will not carry on any business other than the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction. As of the date of this Prospectus, the common shares of Cuspis (the “ Cuspis Shares ”) are listed on the Exchange under the symbol “CUSP.P”. Trading of the Cuspis Shares was halted on August 17, 2020, the date of the initial announcement of the Proposed Qualifying Transaction pursuant to the policies of the Exchange. At the time of the trading halt, the Cuspis Shares were trading at a price of C$0.135 per Cuspis Share.

The Company received conditional approval from the Exchange on March 24, 2021. Neither the Proposed Qualifying Transaction nor the intended timing of the Proposed Qualifying Transaction can be guaranteed. The listing of the ordinary shares in the capital of GMG (the “ GMG Shares ”) will be subject to GMG and Cuspis fulfilling all of the listing requirements of the Exchange, which cannot be guaranteed.

As of the date of this Prospectus, the Company does not have any of its securities listed or quoted, has not applied to list or quote any of its securities, and does not intend to apply to list or quote any of its securities on the Toronto Stock

Exchange, Aequitas NEO Exchange Inc., a U.S. marketplace, or a marketplace outside Canada and the United States.

An investment in the securities of the Company is subject to a number of risks. Investors should carefully consider the risk factors described under heading “Risk Factors” before purchasing any securities of the Company.

No underwriters or selling agents have been involved in the preparation of this Prospectus or performed any review or independent due diligence of the contents of this Prospectus.

No person has been authorized to provide any information or to make any representation not contained in this Prospectus and, if provided or made, such information or representation should not be relied upon. The information contained in this Prospectus is accurate only as of the date of this Prospectus.

This Prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities.

Substantially all of the assets of the Company are located outside of Canada and the Company is formed and organized under the laws of Australia. All of the current directors and officers of the Company reside outside of Canada, except for Robert William Shewchuk. BDO Audit Pty Ltd., the Company’s auditor, is a corporate entity formed under the laws of Australia. Each of the Company, Craig Nicol, Guy Outen, Christopher Ohlrich and Robbert De Weijer have appointed DuMoulin Black LLP, 10[th] Floor, 595 Howe Street, Vancouver, British Columbia V6C 2T5 as its or his agent for service of process in Canada.

The Company is incorporated under the laws of the foreign jurisdiction of Australia. Prospective investors in GMG Shares are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada even if the party has appointed an agent for service of process. See “ Agent for Service of Process ”.

The Company presents its financial statements in Australian dollars. Unless otherwise indicated, in this Prospectus all references to (i) “$” or “AUD” are to Australian dollars; (ii) “US$” and “USD” are to United States dollars; (iii) and “C$” are to Canadian dollars. The Canadian dollar rates of exchange on March 26, 2021 were:

United States dollar(1)	Australian dollar(1)
C$1.00=US$0.7949	C$1.00=$1.0425

Note:

(1) Bank of Canada average exchange rate for March 26, 2021 as reported on the Bank of Canada website.

GMG’s head office is located at Unit 5, 18 Spine Street, Sumner, QLD 4074 Australia, and GMG’s registered office is located at Unit 5, 18 Spine Street, Sumner, QLD 4074 Australia. GMG has no subsidiary companies.

INTERPRETATION ................................................................................................................................................... 6 CAUTION REGARDING FORWARD-LOOKING STATEMENTS .................................................................... 6 CONVENTIONS ......................................................................................................................................................... 8 GLOSSARY OF TERMS ........................................................................................................................................... 8 SUMMARY OF PROSPECTUS .............................................................................................................................. 14 THE COMPANY ......................................................................................................................................................... 14 PRINCIPAL BUSINESS ............................................................................................................................................... 14 MANAGEMENT, DIRECTORS & OFFICERS ................................................................................................................. 14 ESTIMATED FUNDS AVAILABLE ............................................................................................................................... 14 PRINCIPAL PURPOSES ............................................................................................................................................... 15 SUMMARY OF SELECTED AUDITED FINANCIAL INFORMATION FOR THE COMPANY .................................................. 15 PROPOSED QUALIFYING TRANSACTION ................................................................................................................... 16 RISK FACTORS ......................................................................................................................................................... 17 CORPORATE STRUCTURE .................................................................................................................................. 19 GENERAL DEVELOPMENT AND BUSINESS OF THE COMPANY .............................................................. 19 WHAT IS GRAPHENE? ............................................................................................................................................... 19 OVERVIEW ............................................................................................................................................................... 20 REVENUE MODEL ..................................................................................................................................................... 21 THREE YEAR DEVELOPMENT HISTORY .................................................................................................................... 23 INDUSTRY OVERVIEW .............................................................................................................................................. 23 OPERATING SEGMENTS ............................................................................................................................................ 28 PRODUCTS AND SOLUTIONS ..................................................................................................................................... 28 SPECIALIZED SKILL .................................................................................................................................................. 32 ENVIRONMENTAL POLICIES ..................................................................................................................................... 32 EMPLOYEES ............................................................................................................................................................. 33 COMPETITION ........................................................................................................................................................... 33 INTANGIBLE PROPERTIES ......................................................................................................................................... 34 BUSINESS CYCLE ..................................................................................................................................................... 36 ECONOMIC DEPENDENCE ......................................................................................................................................... 36 FOREIGN OPERATIONS ............................................................................................................................................. 36 CHANGES IN CONTRACTS ......................................................................................................................................... 36 BANKRUPTCY ........................................................................................................................................................... 36 MATERIAL RESTRUCTURING TRANSACTIONS .......................................................................................................... 36 SOCIAL OR ENVIRONMENTAL POLICIES.................................................................................................................... 37 LENDING .................................................................................................................................................................. 37 GMG PRIVATE PLACEMENTS ................................................................................................................................... 37 RECENT EVENTS ...................................................................................................................................................... 38 USE OF AVAILABLE FUNDS ................................................................................................................................ 39 FUNDS AVAILABLE .................................................................................................................................................. 39 PRINCIPAL PURPOSES ............................................................................................................................................... 39 BUSINESS OBJECTIVES AND MILESTONES ................................................................................................................ 43 NEGATIVE CASH FLOW FROM OPERATIONS ............................................................................................................. 45 DIVIDENDS ............................................................................................................................................................... 45 SELECTED FINANCIAL INFORMATION .......................................................................................................... 46 SELECTED FINANCIAL INFORMATION ....................................................................................................................... 46 PRO FORMA BALANCE SHEET .................................................................................................................................. 46 MANAGEMENT’S DISCUSSION AND ANALYSIS ......................................................................................................... 47

DESCRIPTION OF SHARE CAPITAL ................................................................................................................. 48 CONSOLIDATED CAPITALIZATION ................................................................................................................. 48 OPTIONS TO PURCHASE SECURITIES ............................................................................................................ 49 ELIGIBILITY ............................................................................................................................................................. 50 GMG SHARES SUBJECT TO NEW PLAN .................................................................................................................... 50 LIMITS WITH RESPECT TO CONSULTANTS AND INVESTOR RELATIONS PERSON ....................................................... 50 EXERCISE OF OPTIONS ............................................................................................................................................. 50 TERM AND EXPIRY DATE ......................................................................................................................................... 51 VESTING .................................................................................................................................................................. 51 TERMINATION OF OPTIONS ...................................................................................................................................... 51 NON-ASSIGNABILITY AND NON-TRANSFERABILITY ................................................................................................ 52 ADJUSTMENTS IN GMG SHARES SUBJECT TO NEW PLAN ........................................................................................ 52 TAX CONCESSIONS ................................................................................................................................................... 52 PRINCIPAL SHAREHOLDERS ............................................................................................................................. 53 ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTIONS ON TRANSFER ................................................................................................................................................................ 53 ADDITIONAL SECURITIES ......................................................................................................................................... 57 EXECUTIVE OFFICERS AND DIRECTORS ....................................................................................................... 57 BIOGRAPHIES ........................................................................................................................................................... 59 SHARE OWNERSHIP BY DIRECTORS AND OFFICERS .................................................................................................. 61 CORPORATE CEASE TRADE ORDERS ........................................................................................................................ 61 PENALTIES OR SANCTIONS ....................................................................................................................................... 62 BANKRUPTCIES ........................................................................................................................................................ 62 CONFLICTS OF INTEREST .......................................................................................................................................... 62 EXECUTIVE COMPENSATION............................................................................................................................ 62 COMPENSATION OF NAMED EXECUTIVE OFFICERS .................................................................................................. 62 DIRECTOR COMPENSATION .............................................................................................................................. 65 DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE ................................................................................................ 66 INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS ................................................................. 66 STOCK EXCHANGE LISTING .............................................................................................................................. 66 AUDIT COMMITTEE AND CORPORATE GOVERNANCE ............................................................................ 67 AUDIT COMMITTEE .................................................................................................................................................. 67 STATEMENT OF CORPORATE GOVERNANCE PRACTICES ........................................................................................... 71 RISK FACTORS ....................................................................................................................................................... 73 SUBSCRIPTION RECEIPT OFFERING ............................................................................................................... 84 THE PROPOSED QUALIFYING TRANSACTION ............................................................................................. 85 THE ARRANGEMENT AGREEMENT ........................................................................................................................... 85 PROMOTERS ........................................................................................................................................................... 91 LEGAL PROCEEDINGS ......................................................................................................................................... 91 INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS .................................... 91 AUDITORS ................................................................................................................................................................ 91 TRANSFER AGENT AND REGISTRAR .............................................................................................................. 91

MATERIAL CONTRACTS ..................................................................................................................................... 91	MATERIAL CONTRACTS ..................................................................................................................................... 91
EXPERTS ................................................................................................................................................................... 92
AGENT FOR SERVICE OF PROCESS ................................................................................................................. 92
APPENDIX “A”	GRAPHENE MANUFACTURING GROUP PTY LTD. AUDITED CONSOLIDATED
	FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2020 AND JUNE
	30, 2019 A 1
APPENDIX “B”	GRAPHENE MANUFACTURING GROUP PTY LTD. MANAGEMENT’S
	DISCUSSION AND ANALYSIS FOR THE YEARS ENDED JUNE 30, 2020 AND JUNE
	30, 2019 B1
APPENDIX “C”	GRAPHENE MANUFACTURING GROUP PTY LTD. UNAUDITED CONDENSED
	CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE INTERIM
	PERIOD ENDED DECEMBER 31, 2020 C 1
APPENDIX “D”	GRAPHENE MANUFACTURING GROUP PTY LTD. MANAGEMENT’S
	DISCUSSION AND ANALYSIS FOR THE INTERIM PERIOD ENDED DECEMBER
	31, 2020 D 1
CERTIFICATE OF THE COMPANY. CC-1
CERTIFICATE OF THE PROMOTER. CC-2

INTERPRETATION

Unless the context otherwise requires, all references in this Prospectus to “we”, “our”, “us”, “GMG” or the “Company” refer to Graphene Manufacturing Group Pty Ltd. and, to the extent references in this Prospectus are made to matters undertaken by a predecessor in interest to GMG or its subsidiaries, include such predecessor in interest to the Company or its subsidiaries, include such predecessor in interest.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Prospectus are forward-looking statements or information (collectively “ forward-looking statements ”). The Company is hereby providing cautionary statements identifying important factors that could cause the actual results of the Company to differ materially from those projected in the forward-looking statements. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as “may”, “is expected to”, “anticipates”, “estimates”, “intends”, “plans”, “projection”, “could”, “vision”, “goals”, “objective” and “outlook”) are not historical facts and may be forward-looking and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements.

By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, which contribute to the possibility that the predicted outcomes may not occur or may be delayed. The risks, uncertainties and other factors, many of which are beyond the control of the Company that could influence actual results include, but are not limited to:

approval of the Exchange to list the GMG Shares;
necessary approvals for the Arrangement, including but not limited to, necessary requirements to effect, if deemed appropriate, the change of name of the Company, the adoption a new constitution and the amendments to the Option Plan;
its ability to successfully execute its overall strategy and goals;
its ability to carry out current planned manufacturing, production, and sales and marketing programs for its graphene and graphene-enhanced products and solutions with its current financial resources;
its graphene-enhanced products and solutions not achieving the expected performance benefits which could negatively impact adoption by prospective customers;
its rates of production for graphene or graphene-enhanced products, may not be enough to meet customer demand, or it may take longer than expected to achieve those rates;
the quality of the Company’s graphene or graphene-enhanced products may vary which could affect the expected performance benefits or specifications required by its customers;
the growth of global markets in which GMG operates;
limited operating history and negative operating cash flow;
ability to successfully commercialize research and development projects and prototypes and generate sales revenue from them;
the market price and/or market demand for its graphene and graphene-enhanced products and solutions not being sufficiently high to ensure that its planned expenditures will be funded;
not being able to access sufficient capital to carry out business plans, manufacturing, and sales and marketing

plans;

operating and capital expenditure costs being higher than anticipated;
ability to obtain and comply with all required permits, licenses and regulatory requirements in carrying out manufacturing, and sales and marketing plans;
projects not achieving projected rates of production, cash flows, internal rates of return, payback periods or net present values;
lack of adequate infrastructure to support the Company’s manufacturing projects;
employee recruitment and retention and dependence on skilled professionals;
environmental risks, including risks associated with compliance with environmental laws and the completion of any required environmental impact assessments or remediation obligations;
economic uncertainties, including changes and volatility in global capital, currency and commodity markets which may impact the Company’s ability to raise capital to execute its business, manufacturing, sales and marketing plans and the demand for its graphene and graphene-enhanced products and solutions;
changes in the status of the COVID-19 pandemic;
competition from other graphene manufacturing and graphene applications businesses;
changes in the assumptions underlying business plans, which may result in a different (reduced) sales estimates and other related matters;
no guarantee against any future political, or economic instability in Australia and other regions where the Company conducts business, or in regions in which the Company intends to operate in the future that might adversely affect the Company;
changes in laws and regulations;
the possibility of being subject to claims or legal proceedings;
the possibility of a conflict of interest arising for certain of the Company’s director and officers;
volatility in the market price of the GMG Shares;
future sales or issuances of equity securities could decrease the value of the GMG Shares, dilute shareholders’ voting power and reduce future potential earnings per GMG Share; and
the Company intends to retain earnings, if any, to finance the growth and development of the business and does not intend to pay cash dividends on the GMG Shares in the foreseeable future.

Such forward-looking information is necessarily based upon a number of factors and assumptions that, while considered reasonable by the Company as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The assumptions underlying the forward-looking information in this Prospectus, which may prove to be incorrect, include, but are not limited to, assumptions relating to:

the Company’s business strategies and plans;

the costs of implementation of business plans and manufacturing, and sales and marketing plans;
the availability of sufficient capital to enable carrying out its business strategy and manufacturing, and sales and marketing plans;
the completion of the listing of the GMG Shares on the Exchange;
receiving all necessary approvals relating to the Arrangement, including but not limited to, the requirements to effect, if deemed appropriate, the adoption of amendments to the Option Plan, the change of name and the adoption of a new constitution;
the results of future manufacturing, and sales and marketing programs will be consistent with anticipated results and estimates;
the ability to obtain the required regulatory approvals necessary to enable the Company to proceed with its manufacturing, and sales and marketing programs;
retaining key staff and not encountering any technical problems in carrying out its manufacturing, and sales and marketing programs;
the price and demand for graphene and graphene-enhanced products remaining consistent with our expectations;
the growth of global markets in which GMG operates;
there not be any material adverse events or changes outside the normal course of the Company’s business; and
the competitive environment for graphene powder, energy efficiency products, batteries and battery materials companies.

Should one or more of the underlying assumptions prove incorrect, or should the risks and uncertainties materialize, actual results may vary materially from those described in the forward-looking statements.

Further, any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all such factors and to assess in advance the impact of each such factor on the business of the Company or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. See “ Risk Factors ”.

CONVENTIONS

Certain terms used herein are defined in the “Glossary of Terms”. Unless otherwise indicated, references to $ are to Australian dollars. All financial information with respect to the Company have been presented in Australian dollars in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and interpretations of the International Financial Reporting Interpretation Committee.

GLOSSARY OF TERMS

The following is a glossary of certain defined terms used throughout this Prospectus. This is not an exhaustive list of defined terms used in this Prospectus and additional terms are defined throughout. Terms and abbreviations used in the financial statements of the Company are defined separately and the terms and abbreviations defined below are not

used therein, except where otherwise indicated. Words importing the singular, where the context requires, include the plural and vice versa, and words importing any gender include all genders.

“ Affiliate ” means a company that is affiliated with another company as described below:

A company is an “ Affiliate ” of another company if:

one of them is the subsidiary of the other; or
each of them is controlled by the same Person;

A company is “ controlled ” by a Person if:

voting securities of the company are held, other than by way of security only, by or for the benefit of that Person; and
the voting securities, if voted, entitle the Person to elect a majority of the directors of the company;

A Person beneficially owns securities that are beneficially owned by:

a Company controlled by that Person, or
an Affiliate of that Person, or
an Affiliate of any Company controlled by that Person;

“ Applicable Securities Law ” means applicable securities legislation, securities regulation and securities rules, as amended, and the policies, notices, instruments and blanket orders having the force of law, in force from time to time;

“Arrangement” means the arrangement of Cuspis under Section 182 of the OBCA in connection with Cuspis' Proposed Qualifying Transaction on the terms and subject to the conditions set out in the Plan of Arrangement, subject to any amendments or variations thereto made in accordance with Section 7.1 of the Arrangement Agreement or Article 6 of the Plan of Arrangement or made at the discretion of the Court in the final order with the consent of GMG and Cuspis, acting reasonably;

“ Arrangement Agreement ” means the arrangement agreement dated December 17, 2020 between GMG and Cuspis;

“ Associate ” means when used to indicate a relationship with a person or company, means:

an issuer of which the person or company beneficially owns or controls, directly or indirectly, voting securities entitling him to more than 10% of the voting rights attached to outstanding securities of the Company;
any partner of the person or company;
any trust or estate in which the person or company has a substantial beneficial interest or in respect of which a person or company serves as trustee or in a similar capacity;
in the case of a person, a relative of that person, including:
that person’s spouse or child; or
any relative of the person or of his spouse who has the same residence as that person; but

where the Exchange determines that two persons shall, or shall not, be deemed to be associates with respect

to a Member firm, Member corporation or holding company of a Member corporation, then such determination shall be determinative of their relationships in the application of Rule D with respect to that Member firm, Member corporation or holding company;

“ BCBCA ” means the Business Corporations Act (British Columbia);

“ Board ” or “ Board of Directors ” means the board of directors, or comparable corporate governing structure, of the Company;

“ Business Day ” means a day other than Saturday, Sunday or a statutory holiday in British Columbia, Canada;

“ CEO ” means Chief Executive Officer;

“ CFO ” means Chief Financial Officer;

“ Company ” or “ GMG ” means Graphene Manufacturing Group Pty Ltd.;

“ Court ” means the Ontario Superior Court of Justice (Commercial List);

“ CPC Escrow Agreement ” means the escrow agreement on TSXV Form 2F dated February 11, 2019 among Cuspis, TSX Trust Company and certain shareholders of Cuspis;

“ CPC Escrow Securities ” means an aggregate of 2,105,675 GMG Split Shares issued certain shareholders of Cuspis, as discussed under " Escrowed Securities and Securities Subject to Contractual Restrictions on Transfer ";

“ CPC Policy ” means Policy 2.4 Capital Pool Companies of the TSXV Policies;

“ Cuspis ” means Cuspis Capital Ltd.;

“ Cuspis Meeting ” means the special meeting of the Cuspis Shareholders, held on March 9, 2021, in accordance with the Interim Order for the purpose of considering and approving the resolutions to approve the Arrangement and also the resolutions to approve Cuspis’ de-listing from the TSXV;

“ Cuspis Options ” means the stocks options of Cuspis;

“ Cuspis Shareholders ” means the holders of Cuspis Shares;

“ Cuspis Shares ” means common shares in the capital of Cuspis;

“Dissenting Cuspis Shareholder ” means a registered holder of Cuspis Shares who has duly and validly exercised the dissent rights in respect of the resolutions approving the Arrangement in strict compliance with the dissent rights and who is ultimately entitled to be paid fair value for its Cuspis Shares;

“ Effective Date ” means the effective date of the Arrangement, which shall be the second Business Day following the date on which all of the conditions precedent to the completion of the Arrangement contained in Article 5 of the Plan of Arrangement have been satisfied or waived in accordance with the Arrangement Agreement (other than those conditions which cannot, by their terms or nature, be satisfied until the Effective Date, but subject to satisfaction or waiver of such conditions as of the Effective Date), or such other date as may be mutually agreed in writing by the parties;

“ Effective Time ” means the beginning of the day (Vancouver time) on the Effective Date or such other time as GMG and Cuspis may agree upon in writing;

“ Encumbrance ” means any mortgage, hypothec, pledge, assignment, charge, lien, claim, security interest, adverse interest, other third person interest or encumbrance of any kind, whether contingent or absolute, and any agreement,

option, right or privilege (whether by Law, contract or otherwise) capable of becoming any of the foregoing;

“ Escrow Agent ” means Computershare Trust Company of Canada;

“ Escrow Agreement ” means the TSXV Form 5D – Tier 1 Surplus Security Escrow Agreement to be entered into on the date of the Final Prospectus, among the Company, the Escrow Agent and certain shareholders of GMG, pursuant to which the GMG Escrow Securities will be held in escrow;

“ Escrow Securities ” means the CPC Escrow Securities and the GMG Escrow Securities;

“ Exchange” or “TSXV ” means the TSX Venture Exchange;

“ Executive Employment Agreements ” means the executive employment agreements dated January 21, 2019 between GMG and each of Craig Nicol, Chris Ohlrich, Andrew Nielsen and Roberto Bran; the executive employment agreement dated February 28, 2019 between GMG and Ashok Kumar Nanjundan; and the executive employment agreement dated September 4, 2020 between GMG and Sheena Ward;

“ Final Exchange Bulletin ” means the bulletin issued by the TSXV following the Closing and the submission of all further documentation required by the TSXV, which evidences the final TSXV acceptance of the Proposed Qualifying Transaction;

“ Final Order ” means the final order of the Court pursuant to Section 182(5) of the OBCA, in a form acceptable to GMG and Cuspis, each acting reasonably, approving the Arrangement, as such order may be amended by the Court (with the consent of both GMG and Cuspis, each acting reasonably) at any time prior to the Effective Date or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed or as amended on appeal, made in connection with the approval of the Arrangement, including all amendments thereto made prior to the Effective Time;

“ Final Prospectus ” means the (final) prospectus of the Company, prepared in accordance with NI 41-101;

“ Final Receipt ” means the receipt issued by the Principal Regulator, evidencing that a receipt has been, or has been deemed to be, issued for the Final Prospectus in British Columbia;

“ GMG Escrow Securities ” means an aggregate of 31,768,000 GMG Split Shares and 2,678,070 GMG Options issued to certain shareholders of the Company, as discussed under " Escrowed Securities and Securities Subject to Contractual Restrictions on Transfer ";

“ GMG Finder’s Warrants ” means a share purchase warrant of GMG issued to certain finders under the Subscription Receipt Offering, each exercisable into one GMG Split Share at an exercise price of C$0.65 for a period of 18 months from the date of issuance.

“ GMG Meeting ” means the extraordinary meeting of the GMG Shareholders held on January 8, 2021, at which the shareholders approved the (i) conversion of the Company from a proprietary company to a public company (ii) the change of the Company's name from "Graphene Manufacturing Group Pty Ltd. ACN 614 164 877" to "Graphene Manufacturing Group Ltd. ACN 614 164 877"; (iii) the adoption of a new Company constitution; and (iv) the GMG Share Split.

“ GMG Options ” or “ Options ” means the stock options of the Company issued pursuant to the Option Plan and the Start-Up Plan;

“ GMG Share Split ” means the split of the GMG Shares at a ratio of 22 GMG Split Shares for each GMG Share;

" GMG Shareholders " means the holders of GMG Shares;

“ GMG Shares ” means the ordinary shares of GMG;

“ GMG Split Shares ” means the GMG Shares immediately following the GMG Share Split;

“ GMG Units ” means the units of GMG issued upon conversion of the Subscription Receipts, with each such unit being comprised of one GMG Split Share and one-half of one GMG Warrant;

“ GMG Unit Warrants ” means the share purchase warrants of GMG comprising the GMG Units, with each GMG Unit Warrant exercisable into one GMG Split Share at a price of C$1.00 for a period of 18 months from the date of conversion of the Subscription Receipts;

“ GMG Warrants ” means, collectively, the GMG Unit Warrants and the GMG Finder’s Warrants;

“ IFRS ” means the International Financial Reporting Standards as issued by the International Accounting Standards Board and interpretations of the International Financial Reporting Interpretation Committee;

“ Interim Order ” means the interim order of the Court, contemplated by the Arrangement Agreement and made pursuant to Section 182(5) of the OBCA, providing for, among other things, the calling and holding of the Cuspis Meeting, as the same may be amended by the Court with the consent of GMG and Cuspis, each acting reasonably, in connection with the Arrangement, including any amendment thereto;

“ NI 41-101 ” means National Instrument 41-101 – General Prospectus Requirements of the Canadian Securities Administrators;

“ NI 52-110 ” means National Investment 52-110 – Audit Committees of the Canadian Securities Administrators;

“ Option Plan ” means the Employee Share Option Plan Rules (ESS Interest (Taxed Upfront) dated November 2, 2018 discussed under “ Options to Purchase Securities ”;

“ Outside Date ” means the date by which the Arrangement contemplated by the Arrangement Agreement is to be completed, which date is March 31, 2021 or such other date as may be agreed to by the Company and Cuspis;

“ person ”, unless specifically indicated otherwise, means a corporation, incorporated association or organization, body corporate, partnership, trust, association or other entity other than an individual;

“ Plan of Arrangement ” means the plan of arrangement set forth in Schedule A to the Arrangement Agreement including any appendices hereto, and any amendments, modifications or supplements hereto made from time to time in accordance with the terms thereof or made at the direction of the Court in the Final Order, with the consent of GMG and Cuspis, each acting reasonably;

“ Pre-Effective Date Period ” means the period from and including the date of the Arrangement Agreement and including the earlier of the Effective Time and the date of termination of the Arrangement Agreement pursuant to the Arrangement Agreement;

“ Principal Regulator ” means the Ontario Securities Commission;

“ Proposed Qualifying Transaction ” means Cuspis' proposed Qualifying Transaction (as defined under the CPC Policy) with GMG;

“ Prospectus ” means this final long-form non-offering prospectus of the Company (including any supplemental material hereto);

“ Regulation S ” means Regulation S promulgated under the U.S. Securities Act;

“ Replacement Options ” shall have the meaning ascribed to such term in the Plan of Arrangement;

“ Replacement Warrants ” shall have the meaning ascribed to such term in the Plan of Arrangement;

“ SEDAR ” means the System for Electronic Document Analysis and Retrieval, accessible through the internet at www.sedar.com;

“ Shareholders ” means the holders of GMG Shares or Cuspis Shares, as the case may be;

“ Share Consideration ” means in respect of each Cuspis Share 0.403 GMG Split Shares;

“ Start-Up Plan ” means the Employee Share Option Plan Rules (ESS Interest (Start-Up Rules)) dated November 2, 2018 discussed under “ Options to Purchase Securities ”;

“ Subscription Receipt Offering ” means the non-brokered private placement completed on March 24, 2021 of 3,077,000 Subscription Receipts at a price of C$0.65 per Subscription Receipt, for gross proceeds of C$2,000,050;

“ Subscription Receipts ” means subscription receipts of GMG, with each subscription receipt being converted into GMG Units immediately prior to the date of GMG listing on the Exchange;

“ Transfer Agent ” means the proposed transfer agent and registrar of the Company, being Computershare Investor Services Inc.;

“ U.S. Securities Act ” means the U.S. Securities Act of 1933 , as amended;

“ USA ”, “ United States ”, “ U.S. ” or “ US ” means the United States of America, its territories and possessions, and any state of the United States, and the District of Columbia; and

Words importing the singular number only, include the plural and vice versa, and words importing any gender include all genders.

SUMMARY OF PROSPECTUS

The following is a summary of the principal features of the Prospectus and should be read together with the more detailed information and financial data and statements contained elsewhere in this Prospectus. Capitalized used but not defined in this Summary of Prospectus have the meanings ascribed thereto in the Glossary of Terms.

The Company

GMG was incorporated in Australia under the Corporations Act 2001 on August 10, 2016 under the name "Graphene Manufacturing Australia Pty Ltd.". GMG’s head office is located at Unit 5, 18 Spine Street, Sumner, QLD 4074 Australia, and GMG’s registered office is located at Unit 5, 18 Spine Street, Sumner, QLD 4074 Australia. GMG has no subsidiary companies. On January 15, 2019, the Company changed its name to "Graphene Manufacturing Group Pty Ltd.".

The Company will apply, concurrent with the filing of this Prospectus, to list the GMG Shares on the TSXV. Listing will be subject to the Company fulfilling all of the listing requirements of the TSXV.

Immediately prior to closing of the Arrangement, the Company intends to effect the items that were approved at the GMG Meeting. The Company held the GMG Meeting on January 8, 2021, at which the shareholders approved the (i) conversion of the Company from a proprietary company to a public company (ii) the change of the Company's name from "Graphene Manufacturing Group Pty Ltd. ACN 614 164 877" to "Graphene Manufacturing Group Ltd. ACN 614 164 877"; (iii) the adoption of a new Company constitution; and (iv) the GMG Share Split.

The change of the Company’s name to “Graphene Manufacturing Group Ltd. ACN 614 164 877” will become effective as of April 2, 2021.

See “ Corporate Structure ”.

Principal Business

GMG is a privately-held company incorporated under the laws of Australia that’s production includes high quality graphene currently used primarily in paints, coolants and lubricants targeting to improve energy efficiency and reduce costs, and additionally in next generation battery technology. See “ General Development and Business of the Company ”.

Management, Directors & Officers

GMG’s management team (“ Management” ) includes several individuals with extensive experience in executive management, production operations, engineering, project management, research and development and finance. See “ Directors and Executive Officers ”.

Estimated Funds Available

No securities are being offered pursuant to this Prospectus. This Prospectus is being filed with the Principal Regulator for the purpose of allowing the Company to become a reporting issuer in Ontario, British Columbia, Saskatchewan and Alberta, to enable the Company to develop an organized market for the GMG Shares and to enable Cuspis to complete the Proposed Qualifying Transaction. Since no securities are being offered pursuant to this Prospectus, no proceeds will be raised and all expenses incurred in connection with the preparation and filing of this Prospectus will be paid by the Company from general corporate funds.

As of February 28, 2021, the Company had a working capital balance of approximately $1,066,218, including cash of $1,021,506. The Company intends to use its available cash balance post-completion of the Arrangement to fund planned capex expenditure of approximately $200,000, listing costs of approximately $200,000 and operating expenses for the 12-month period following the listing of approximately $3.3 million. Approximately $1,674,077 of available cash, assuming conversion of the Subscription Receipts, has been classified as unallocated working capital

which will be invested in low risk financial instruments such as certificates of deposit, unless otherwise deemed advantageous by the Board. See “ Subscription Receipt Offering ” and “ Use of Available Funds ”.

The following table illustrates the estimated working capital available to the Company upon completion of the Arrangement:

Estimated Working Capital	($)(1)
WorkingCapital as of February28,2021(2)	1,066,218
Estimated funds obtained by way of completion of Arrangement with Cuspis,as of March 1,2021(3)	2,085,000
Net funds raised in connection with Subscription Receipt Financing	1,912,577
Estimated WorkingCapital on listing	5,063,794

(1) Assuming conversion of Subscription Receipts. See “ Subscription Receipt Offering ” and “ Use of Available Funds ”. (2) Working capital is calculated as cash ($1,021,506) plus prepayments ($241,859) plus inventory ($127,958) plus accounts receivable ($12,970) less accounts payable ($338,076)

(3) This is based an estimate of available cash on the balance sheet of approximately C$2.0 million (AUD/CAD exchange at $1.0425), provided by Cuspis, as expected on completion of the Arrangement. See “ Use of Available Funds ”.

Principal Purposes

The following table illustrates the Company's intended use of available working capital over the 12-month period following the completion of the Arrangement and listing on the Exchange. The figures provided are an estimate only and there can be no guarantee that the Company will be able to use its available working capital for these principal purposes.

Principal purposes for the use of Estimated Working Capital for the 12 months following the TSXV listing	$
1. Estimated capital expenditure	200,000
2. Estimated listing expenses	200,000
3. Estimated operating expenses	3,289,717
Employee	2,431,175
Occupancy	155,032
Plant	166,899
Overheads	535,488
Finance	1,133
4. Marketing and promotion	500,000
5. Estimated revenue and other income	(800,000)
6. Unallocated working capital	1,674,077
Total uses of Working Capital	5,063,794

For more information on the principal purposes, see " Use of Available Funds – Principal Purposes ".

Summary of Selected Audited Financial Information for the Company

The following selected financial information is subject to the detailed information contained in the financial statements of GMG, and notes thereto, appearing elsewhere in the Prospectus. The selected financial information is derived from and should be read in conjunction with GMG’s audited financial statements for the year ended June 30, 2019 and

June 30, 2020 and unaudited interim period ended December 31, 2020. See “ Selected Financial Information”.

	June 30, 2020	December 31, 2020
	$’000	$’000
Balance Sheet
Current assets	1,643	2,081
Total assets	1,903	2,421
Current liabilities	(218)	(372)
Total liabilities	(218)	(372)
Shareholders’ Equity	1,685	2,049

Proposed Qualifying Transaction

On December 17, 2020, the Company entered into the Arrangement Agreement with Cuspis to carry out the Proposed Qualifying Transaction. Pursuant to the Arrangement Agreement, and in accordance with the Plan of Arrangement attached as Schedule A to the Arrangement Agreement, on the Effective Date, the Company will acquire all of the issued and outstanding Cuspis Shares.

The Arrangement involves a number of steps, including each of the events set out below, which will occur or be deemed to occur in the following order commencing at the Effective Time, without any further act or formality, except as otherwise expressly provided in the Arrangement Agreement:

each Cuspis Share outstanding immediately prior to the Effective Time held by a Dissenting Cuspis Shareholder shall be deemed to be acquired by Cuspis from the Dissenting Cuspis Shareholder, free and clear of all Encumbrances, in consideration for a debt claim against Cuspis for an amount determined and payable in accordance with Article 4 of the Plan of Arrangement;
each Cuspis Share outstanding immediately prior to the Effective Time (other than Cuspis Shares held by a Dissenting Cuspis Shareholder or GMG) shall be transferred to GMG in exchange for the Share Consideration; and
GMG shall be deemed to be the transferee of such Cuspis Shares, free and clear of all Encumbrances, and shall be entered in the register of Cuspis Shares maintained by or on behalf of Cuspis as the holder of such Cuspis Shares.

As a result of the Proposed Qualifying Transaction, it is expected that the Company will issue (a) an aggregate of approximately 6,162,072 GMG Split Shares to former Cuspis Shareholders in each case, at a deemed price of C$0.53 per GMG Split Share; and (b) approximately 604,500 Replacement Options in exchange for the Cuspis Options outstanding immediately prior to completion of the Proposed Qualifying Transaction.

Upon completion of the Proposed Qualifying Transaction, and assuming conversion of the Subscription Receipts and completion of the GMG Share Split, it is anticipated that, immediately thereafter: (a) there will be an aggregate of approximately 69,081,718 GMG Split Shares issued and outstanding and an additional approximately 6,095,128 GMG Options and 1,699,930 GMG Warrants issued and outstanding and exercisable into GMG Split Shares; (b) former Cuspis Shareholders will hold approximately 6,162,072 GMG Split Shares representing approximately 8.92% of the outstanding resulting issuer shares; (c) current GMG Shareholders will hold approximately 59,842,646 GMG Split

Shares representing approximately 86.63% of the outstanding GMG Split Shares; (d) investors in the Subscription Receipt Offering will hold approximately 3,077,000 GMG Split Shares representing approximately 4.45% of the outstanding GMG Split Shares; (e) Cuspis will have de-listed from the TSXV; and (f) GMG will hold 100% of the Cuspis Shares, resulting in Cuspis becoming a wholly owned subsidiary of the Company.

The Arrangement was approved by the Cuspis Shareholders by a special resolution at the Cuspis Meeting held on March 9, 2021. The Arrangement must also be approved by the Court.

Upon receipt of approval by the TSXV of the listing of the GMG Shares, the Company will file the Final Prospectus with the Principal Regulator to become a reporting issuer in Ontario, British Columbia, Alberta and Saskatchewan. Shortly thereafter Cuspis and the Company will complete the Arrangement and the GMG Shares will commence trading on the TSXV.

See below under the headings “ Subscription Receipt Offering ” and “ The Proposed Qualifying Transaction ”.

Risk Factors

An investment in the Company involves a substantial degree of risk and should be regarded as highly speculative due to the nature of the business of the Company.

The risks, uncertainties and other factors, many of which are beyond the control of the Company that could influence actual results include, but are not limited to:

GMG’s success is dependent upon manufacturing and being able to develop products and solutions using graphene. These products require a high level of innovation in emerging applications.
Research and development activities may not yield desired results and there is no assurance that the Company will be able to successfully develop and commercialize one or more graphene-enhanced products or solutions.
GMG is a start-up company and, as such, are subject to many risks common to such enterprises.
There is no certainty that all of the conditions precedent to the Arrangement will be satisfied.
Additional financing may not be available on terms favorable to the Company, or at all.
Insurance coverage is not available for all potential risks of the Company’s operations.
The loss of key executives may adversely affect the Company’s business and future operations.
GMG faces competition from other graphene manufacturers and companies developing competing products and solutions using graphene.
Competitors may infringe on GMG’s current or future intellectual property and GMG may unknowingly infringe on intellectual property of its competitors, resulting in reduced competitiveness, reduced sales and expensive law suits.
There is no certainty that key intellectual property owned by third parties contracted for use or resale by GMG (e.g. Thermal XR power by GMG graphene coating system) will always be commercially available to GMG at a competitive cost and quality to deliver significant revenues or even any revenue at all.
Adverse government regulation may adversely affect the Company’s business.
The price of the GMG Shares and its financial results, activities and future prospects may be adversely affected by a downgrade in the general market view of the future potential of graphene and its use in commercial applications.

The list included in this sub-section is a limited subset of identified risk considerations. For a detailed description of select risk factors relating to the GMG Shares, which should be carefully considered before making an investment decision, see section called “ Risk Factors ” on page 68.

CORPORATE STRUCTURE

The change of the Company’s name to “Graphene Manufacturing Group Ltd. ACN 614 164 877” will become effective as of April 2, 2021.

If the Company chooses to effect the amendments to its constitution, the constitution will include provisions which are customary for publicly held companies incorporated in Australia and listed in Canada. A summary of the proposed material amendments to the constitution are as follows:

(1) “Restricted securities” – Where the Exchange classifies any GMG Share capital as “restricted securities”, then the transfer, holding and rights accruing to such shares will be restricted as required by the Exchange.
(2) “Proportional takeover bids” – The inclusion of a formal process for which an off-market bid may be made for a proportion of GMG Shares within a bid class.
(3) “Direct voting” – Subject to director approval, a vote (pursuant to a general or class meeting) may occur via direct voting, which includes a vote delivered by post, fax or other approved electronic means.
(4) “Variation of Office – TSXV Requirements” – Upon the Company being subject to the Exchange and its listing rules, at each annual general meeting, all directors must retire from office. Those retiring directors may offer themselves for re-election at that same meeting, and there are provisions outlining the process where the minimum number of directors (three) are not elected.
(5) “Meetings held by electronic means” – The Company is expressly permitted to conduct a meeting of Shareholders via electronic means, provided the method allows each Shareholder to communicate, participate and vote at the meeting.

GENERAL DEVELOPMENT AND BUSINESS OF THE COMPANY

What is Graphene?

Graphene, a 2-dimensional allotrope of carbon is one atom thick, and it forms the fundamental building block for few layered and multilayered graphene. Isolated in 2004 by Andre Geim and Konstantin Novoselov, the discovery led to the Nobel Prize in Physics in 2010[1] . GMG believes that graphene is one of the strongest and thinnest known material, and it is an extraordinary conductor of heat and electricity.[2] Up to today, over 53,000 graphene technology patents have been filed by various parties.[ 3] Research has indicated that graphene-based materials are promising materials for

1 https://www.nobelprize.org/prizes/physics/2010/press-release/

2 https://www.forbes.com/sites/startswithabang/2019/06/18/there-are-6-strongest-materials-on-earth-that-are-harder-thandiamonds/?sh=1b3be0733412

3 Yang, X.; Yu, X.; Liu, X. Obtaining a Sustainable Competitive Advantage from Patent Information: A Patent Analysis of the Graphene Industry. Sustainability 2018, 10 , 4800

a myriad of applications.[4][5]

GMG graphene, in its powder form, consists of few and multilayered graphene.

Overview

GMG is a clean-technology focused company which aims to offer energy saving products and solutions and energy storage products, enabled by graphene manufactured in-house via a proprietary production process. In 2017 and 2018, GMG developed and proved its proprietary production process to decompose natural gas (i.e. methane) into its elements, carbon (including as graphene), hydrogen (and some residual hydrocarbon gases). This process produces high quality, low input costs, scalable, tuneable and low contaminant graphene suitable for use in clean-technology applications[6] . While GMG graphene may be suitable for a wide range of industries, GMG’s initial focus has been developing applications for energy savings and energy storage.[ 7]

In the energy savings segment, GMG has focused on graphene enhanced heating, ventilating, and air conditioning (“ HVAC ”) coatings, lubricants and fluids. GMG and its customers have successfully demonstrated HVAC coating projects, offering customers improvement in the efficiency of space cooling (air-conditioning) and coolant units. Also, GMG is developing lubricants which aim to reduce friction in engines. Both these offerings have the potential to enable lower energy consumption, reducing both cost and emissions.

In the energy storage segment, GMG and University of Queensland (also referred to herein as " UQ ") have entered into a research agreement and a license agreement dated as of February 26, 2021, pursuant to which they are working collaboratively with financial support from the Australian Government to progress research and development (“ R&D ”), and ultimately explore the commercialization of GMG graphene aluminum-ion batteries (also referred to as “ G+AI Batteries ”). Aluminum-ion batteries have the potential to have better energy density than lithium-ion batteries (also referred to as “ LI Batteries ”). G+AI Batteries may eliminate many disadvantages of LI Batteries, including risk of overheating/fire and performance degradation. Management believes that successful commercialization of the G+AI Batteries would result in a superior substitute to LI Batteries in targeted applications.

The energy saving HVAC coating product, “Thermal XR powered by GMG graphene”, has recently commenced generating sales revenue on a limited basis for both liquid and project sales. Early-stage test results provide encouragement to Management on the viability of GMG graphene enhanced lubricants by demonstrating a reduction in the lubricant coefficient of friction. Further testing of lubricants is progressing both in-house and via third parties. Other products in early stages of development or investigation include graphene enhanced fluids (glycol coolants and aqueous graphene fluid) and graphene enhanced diesel and bio-diesel. If various product applications are commercialized, GMG will need to increase its graphene powder production capacity and will likely need to build additional manufacturing capacity for specific product offerings. This will require capital, working capital and operating expenditure going forward.

GMG’s core customer offerings are enhanced with GMG’s graphene. To keep its proprietary graphene production process strictly confidential, GMG has maintained it as a ‘trade secret’ rather than filing a patent which would require mandatory disclosure. GMG has also adopted a strategy of building exclusivity and intellectual property around graphene-enhanced products and solutions. For example, the HVAC coating product was developed by one of GMG’s

4 Angew. Chem. Int. Ed. 2012, 51, 7640 – 7654 (From Nanographene and Graphene Nanoribbons to Graphene Sheets: Chemical Synthesis)

5 Khan M.F. Shahil, Alexander A. Balandin, Thermal properties of graphene and multilayer graphene: Applications in thermal interface materials, Solid State Communications, Volume 152, Issue 15,2012,Pages 1331-1340, ISSN 0038-1098, https://doi.org/10.1016/j.ssc.2012.04.034.

6 There is limited data availability of graphene produced by competitors. The high quality and low-cost characteristics of GMG’s graphene is relative to competitors and based on anecdotal evidence gathered from various sources including the internet, and market discussions.

7 Development is undertaken both in-house and in partnership with third parties i.e. universities and customers

customers, OzKem Pty Ltd., an Australian coatings technology company that specializes in coatings for the HVAC industry, in collaboration with GMG - referred to in this Prospectus, as “ TXR Supplier ”, using GMG’s graphene. GMG entered into a distribution agreement (the “ Distribution Agreement ”) with TXR Supplier on November 11, 2020 and a supply agreement (the “ Supply Agreement ”) with TXR Supplier on November 12, 2020. The Distribution Agreement and the Supply Agreement, together, are referred to herein as the " TXR Agreements ". GMG supplies graphene powder for the production of ‘Thermal XR powered by GMG graphene’, also referred to herein as “ TXR ”. In return, GMG enjoys exclusive distribution rights for this product in most regions in the world, including the Americas, Middle East, Europe, Africa and NE Asia (China, Japan and Korea)[8] . This will allow GMG to adopt a value-based pricing approach for distribution, supply and install projects of this coating. For regions in which GMG does not enjoy exclusivity under the TXR Agreements, it can still operate on a non-exclusive basis.

GMG has a strong R&D focus. GMG has filed a patent in relation to its coolant.[ 9] GMG is focused on R&D, with the aim to enable it to build long-term competitive advantage. Furthermore, R&D being undertaken for other downstream applications such as lubricants and batteries has the potential to accelerate demand for GMG products and solutions. Success in R&D initiatives may provide opportunity for improvements and future expansion of the Company’s business and operations.

Revenue model

GMG’s revenue streams from operating activities are targeted towards the following segments:

1. Energy saving products and solutions

At present, this area consists of revenue targeted to be generated from ‘Thermal-XR powered by GMG graphene’ projects including from the sale of graphene powder to TXR Supplier for the manufacture of TXR. GMG provides a full-service offering including supply and application of TXR on the customers’ installed HVAC units and resale of TXR to third parties. GMG has several demonstration projects completed or in progress with customer prospects. In November 2020, GMG completed its first sale of the TXR solution to a paying customer. Given the important and imminent sales opportunity GMG entered into the TXR Agreements. Considering the global market potential for this offering, future demand may allow GMG to increase its current graphene production capacity.

Future sales in this segment are also targeted to include graphene enhanced lubricants and liquid graphene products, which are the most advanced additional applications being developed and targeted to be subsequently commercialized.

2. Energy storage products

This segment has only limited revenue to date, being the supply of graphene powder for lithium-ion battery cathode material. GMG’s target is that more significant revenue in the medium term will potentially be driven by the successful commercialization of the G+AI Battery.

3. Other

This segment is expected to constitute other graphene powder sales such as graphene powder sales likely unrelated to the ‘energy saving products and solutions’ and ‘energy storage products’. GMG has in the past and may in the future also receive other revenue such as government grants for research projects and revenue may be earned from research collaboration projects. GMG will consider scaling for production of bulk graphene powder as the market becomes more established. Also, strategic sales for R&D or to evaluate future product development may be considered.

8 Regions where GMG does not have exclusive rights are Australia, New Zealand, Papua New Guinea, Malta and each country within South East Asia (being Brunei, Cambodia, East Timor, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam)

9 GMG filed a provisional patent was filed on March 27, 2019. A Patent Co-operation Treaty Application was filed on March 27, 2020. A response to the Written Opinion of the International Preliminary Examining Authority was lodged in December, 2020

Whereas GMG’s near-term to medium-term focus is ‘energy savings’ and ‘energy storage’, GMG may expand its focus areas going forward. For example, GMG may consider graphene applications in composites.

Due to the potential attractiveness of the products and solutions offered by GMG, the pricing strategy employed is likely to be driven by the value generated for the customer. This value-based pricing strategy is being developed for TXR projects.

As the business grows, increased production capacity driven by market demand will require additional capital expenditure. Decision making for such expansions will be influenced by customer requirements for the different product offerings and further R&D costs will be incurred as more products are sought to be commercialized. However, as a result of its differentiated customer offering employing value-based pricing, GMG expects to have positive operating leverage. The success of the business model will be determined by GMG’s ability to demonstrate energy savings (for HVAC coatings, lubricants and other products) and superior performance parameters in battery technology currently under development as well as being able to control its cost base i.e. produce graphene more efficiently.

Graphene is a recently discovered product and there are numerous trade secrets and patent protections for manufacturing processes, products and downstream applications. Considering the early stage the industry is in, Management is of the view that the market for high quality graphene and its use in different downstream applications may provide years of competitive opportunities and avoid competition with commoditized low value offerings and lower grade graphene.

Three Year Development History

The following chart sets out how GMG’s business has developed over the last three completed financial years and the subsequent period to the date of this Prospectus.

==> picture [25 x 13] intentionally omitted <==

==> picture [446 x 357] intentionally omitted <==

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

Mar 2021 Nov-Dec 2020 Nov 2020 Jul -Nov 2020 Mar 2020
Planned listing on Purchased TXR Agreements Thermal XR Graphene Aluminium-
the TSXV equipment to signed with TXR powered by GMG ion battery project
exchange analyze lubricants, Supplier graphene (TXR) initiated with UQ and
Modified ASTM First sale of the trial customers initial results recorded
D2783 standard TXR offering confirm energy
test results show savings
reductions of Sales pipeline Feb - Oct 2020
builds
wear. Private placement
of $3.00m
Apr-Nov 2018 Mar 2019 Dec 2018- Jun 2019 Jul 2019 Oct 2019
Convertible note of Commencement of Private placement of Production process Strategic decision to
$400,000 and private graphene dispersed in $2.65m achieves focus on highest value
placement of $1.56m liquid continuous application areas
graphene
Orders placed to Commenced production for the Third unit in production
expand from pilot to exploratory R&D on first time facility commissioned
Mar 2018 two production units up to 14 different
Collaboration in Nov-18 industry sectors
commenced with
TXR Supplier to
produce an energy
saving coating for
HVACs
Sep 2017 Apr-May 2017 Mar 2017 Aug 2016 –
From analysis of plant Raised $400,000 Management Jan 2017
output conducted by through convertible shareholder loans Formation of
University of Sydney, notes. of approx. initial
GMG determined $39,000 to fund Management
graphene was produced Raised seed capital pilot plant team led by Craig
of $410,000
Nicol
----- End of picture text -----

Industry Overview

Introduction to Graphene

Graphene, a 2-dimensional allotrope of carbon is one atom thick, and it forms the fundamental building block for few layered and multilayered graphene. Isolated in 2004 by Andre Geim and Konstantin Novoselov, the discovery led to the Nobel Prize in Physics in 2010[1] . GMG believes that graphene is one of the strongest and thinnest known material, and it is an extraordinary conductor of heat and electricity.[2] Up to today, over 53,000 graphene technology patents have been filed by various parties.[3 ] Research has indicated that graphene-based materials are promising materials for a myriad of applications.[4][5]

GMG graphene, in its powder form, consists of few and multilayered graphene.

Graphene has been available commercially for approximately 10 years, but graphene’s path to commercialization has accelerated over the past three or four years. The Graphene Council has indicated that more than 2,300 graphenerelated patents were approved in the 12 months to June 2019.[10]

There is a vast range of graphene applications[11] , including:

Electronics, aerospace, medical, energy efficiency and energy storage and generation;
Transparent conductive films for various supercapacitors, smartphones, flexible electronic devices, optoelectronic devices, and medical devices;
Inks, coatings, and different types of composites; and
Automotive and aerospace industries, which are expected to be key application sectors for graphene-based composites over the next few years.

Market for GMG’s products and solutions

GMG’s current core focus is ‘energy savings’ and ‘energy storage’. This section discusses relevant industries and trends for those products and solutions, which GMG either has already developed or is developing in the near to medium term. For more information on the relevant industries, see " Description of the Business – Products and Solutions " and " Description of the Business – Competition " in this Prospectus.

1. HVAC Industry

HVAC is a mechanical system which provides comfort and improves the air quality of a confined space. The HVAC system controls the air temperature and humidity, provides fresh air intake and maintains the air quality across residential, commercial and industrial spaces.

‘Thermal XR powered by GMG graphene’ coating benefits the HVAC industry. Early results from projects undertaken by GMG, have demonstrated reduction in the electricity consumption of air conditioners.

HVAC systems account for up to 50 per cent of a commercial buildings’ energy use[12] . Almost, 20% of all the electricity used in buildings is for cooling.[13] By improving the efficiency of HVAC systems and air conditioners in particular, energy consumption can be reduced, lowering operating costs and potentially greenhouse gas emissions.

Global sales of air conditioners (" ACs ") have grown steadily. Since 1990, annual sales of ACs nearly quadrupled to 135 million units.[13] There are approximately 1.6 billion ACs in use, of which over 50% are in the People’s Republic of China and the United States. ACs consume over 2,000 Terawatt-hour (" TWh ") of electricity every year, approximately two and a half times the total electricity use of Africa.[13] The number of ACs worldwide is predicted to soar from 1.6 billion units today to 5.6 billion units by 2050, according to a report by the International Energy Agency[14] . If left unchecked, by 2050, ACs could consume as much electricity as China does for all activities today.[15]

10 Barkan, T. and Johnson, D. “Graphene Commercialization Update,” Presentation by The Graphene Council, June 25, 2020 (www.coatingstech-digital.org/)

11 https://www.printedelectronicsnow.com/contents/view_breaking-news/2020-03-17/global-graphene-market-to-record-387cagr-from-2020-to-2027-grand-view-research/

12 https://www.csiro.au/en/About/Our-impact/Our-impact-in-action/Industry-and-defence/Opticool

13 The Future of Cooling, Opportunities for energy-efficient air conditioning, International Energy Agency, 2018

14 https://www.iea.org/news/air-conditioning-use-emerges-as-one-of-the-key-drivers-of-global-electricity-demand-growth

15 - https://www.nytimes.com/2018/05/15/climate/air conditioning.html

From an environmental perspective, greenhouse gas emissions released by coal and natural gas plants when generating electricity to power those ACs would nearly double, from 1.25 billion tonnes in 2016 to 2.28 billion tonnes in 2050. Emissions would contribute to global warming, which could heighten the demand for air conditioning.[15]

Initial energy savings results reported from the application of ‘Thermal XR powered by GMG graphene’ offering has seen positive results with energy reductions and thus cost savings in a range of various situations trialed.

GMG intends to adopt a value-based pricing strategy to access a share of the energy savings available to customers.

2. Lubricants

According to Markets and Markets, the global lubricants market size is projected to reach USD$182 billion by 2025 from USD$157 billion in 2020, at a a compound annual growth rate (“ CAGR ”) of 3.0%.[16]

The internal combustion engine (ICE) inside a vehicle needs lubricants, mostly engine oil, and transmission fluid. Improvements in the internal elements of internal combustion engines such as very high revolutions per minute (or ‘RPM’) design, improved transmission systems, improved gear systems and better bearing technology, has led to further evolution and expansion of the lubricants segment. On the other hand, increases in electric vehicles will reduce the volume of the global lubricants market in time. At present, vehicle engine oils account for over 40% of the total lubricants market[16] and economic growth in developing countries is increasing ownership of vehicles, which will spur demand, whereas, the market in developed countries like U.S. and Japan is expected to be steady for some time.[17]

The power industry is a large consumer of industrial lubricants, ranging from turbine oil to transformer oil. The renewable energy industry is a prospective sub-segment of the power generation industry e.g. wind turbines require lubricants for optimum operability.[16]

Reduction of parasitic losses of the vehicle, powertrain and the engine systems are key components of energy conservation. For engine efficiency improvement, various approaches include improvements in advanced combustion systems, component system design and handling such as down-sizing, boosting, and electrification as well as waste heat recovery systems etc. Among the various approaches, engine friction reduction is a key and relatively costeffective approach, which has been receiving significant attention from tribologists and lubrication scientists and engineers.[18]

There are increasingly stringent energy efficiency requirements and environmental legislation which original equipment manufacturers (or ‘OEMs’) must meet. Reducing the friction generated by lubricants not only enables OEMs to achieve this but also increases the durability, performance and reliability of vehicles which is extremely important from a consumer perspective.

As per a study in 2012[19] , in passenger cars, one-third of the fuel energy is used to overcome friction in the engine, transmission, tires, and brakes. The direct frictional losses, with braking friction excluded, are 28% of the fuel energy. In total, 21.5% of the fuel energy is used to move the car. Globally, one passenger car uses on average 340 litres of fuel per year to overcome friction, assuming an average driving distance of 13,000 km per annum. This illustrates that the enhancement of lubricants to reduce friction has the potential to result in very significant aggregated fuel savings for vehicles.

16 https://www.marketsandmarkets.com/Market-Reports/lubricants-market-182046896.html

17 https://www.fortunebusinessinsights.com/industry-reports/lubricants-market-101771

18 Wong, V.W., Tung, S.C. Overview of automotive engine friction and reduction trends–Effects of surface, material, and lubricantadditive technologies. Friction 4, 1–28 (2016). https://doi.org/10.1007/s40544-016-0107-9

19 Holmberg K, Andersson P, Erdemir A. Global energy consumption due to friction in passenger cars. Tribol Int 47: 221–234 (2012). https://www.sciencedirect.com/science/article/abs/pii/S0301679X11003501?via%3Dihub

GMG’s graphene-enhanced lubricants have the potential, if proven, to reduce friction in engines thereby likely enabling cost savings and emissions reductions. If successfully commercialized/proven, GMG hopes to capture significant value within the lubricants industry.

3. Batteries

As per Grand View Research[ 20] , the global battery market size was valued at USD$108 billion in 2019 and is expected to grow at a CAGR of 14.1% from 2020 to 2027, to over USD$310 billion in 2027. This market includes all battery types including lead acid, lithium ion, nickel metal hydride, nickel cadmium and others.

The market growth is attributed to high demand from the automotive industry. Also, increasing popularity of consumer electronics and energy storage on a global scale is projected to result in the increasing usage of the lithium-ion battery.[20]

A. Electric Vehicles

Rapidly expanding production of hybrid and electric cars, will drive purchases of batteries. Other categories of electric vehicles such as two/three-wheelers and buses will also contribute to demand. Global electric vehicle battery capacity is expected to increase from approximately 170 GWh per year at present to 1.5 TWh per year in 2030, based on a scenario which incorporates the impact of existing government policies globally. In a scenario fully compatible with the climate goals of the Paris Agreement, a demand of 3TWh is projected.[21]

Battery costs have declined from USD 1,000 per kilowatt-hour (" kWh ") in 2010 to approximately 200 per kWh in 2019. Battery costs are expected to reduce to USD 100 per kWh by 2027. A reduction in battery costs which are approximately 35% to 45% of electric vehicle manufacturing costs are expected to drive the growth of the market.[22]

According to Verified Market Research, the global electric vehicle battery market was valued at USD$35 billion in 2019 and is projected to reach USD$133 billion by 2027, growing at a CAGR of 18.05% from 2020 to 2027.[23]

B. Energy Storage

An electrical grid is a network, which delivers electricity from electricity production plants to consumers. Battery storage provides flexibility for end user application of energy from intermittent sources such as solar power and wind power.

Co-location of renewable energy production facilities with energy storage assets, stabilizes production and ensures firmer capacity during peak demand periods. Increasing demand for renewable energy is one of the major driving factors for growth of the market and use of renewable energy increases the need for battery storage systems in the power grids.

As per Valuates Reports, Global Energy Storage Market size is forecast to grow from USD$71 billion in 2018 to USD$164 billion by 2025, at a CAGR of 12.6% over the period 2019 to 2025.[24]

C. Future of Batteries

Other than electric vehicles and energy storage, improving levels of disposable income and consumer spending in developing economies will support sales of high-drain electronics such as mobile phones and personal computers,

20 https://www.grandviewresearch.com/industry-analysis/battery-market

21 IEA (2020), Global EV Outlook 2020 , IEA, Paris https://www.iea.org/reports/global-ev-outlook-2020

22 https://www.fortunebusinessinsights.com/industry-reports/electric-vehicle-battery-market-101700

23 https://www.verifiedmarketresearch.com/product/electric-vehicle-battery-market/

24 https://reports.valuates.com/market-reports/360I-Auto-6Q18/global-energy-storage-market

boosting demand for both primary and secondary replacement batteries. As incomes rise, a shift to better performing primary batteries including alkaline and lithium types is also expected in the developing world. In the industrial battery market, expanding investment in energy storage systems to provide backup power and/or frequency regulation will spur sales.

While the industry leading technology of lithium-ion has made tremendous progress over the past decade in terms of energy density, costs and cycle life, room for improvement remains. Research is being conducted to improve all three key components of LI Battery cells: cathodes, anodes and electrolytes.

GMG has commenced R&D on commercializing a G+AI Battery using GMG graphene, pursuant to a research agreement and a license agreement with UQ dated February 26, 2021. Management believes that the G+AI Battery has many attributes that may make it superior to the LI Batteries. If successful, the G+AI Battery will be a superior substitute for the LI Battery in targeted applications.

The chart below shows the G+AI Battery’s higher volumetric and mass energy densities (more generally) outperforming existing products on the market.

==> picture [222 x 174] intentionally omitted <==

Source: Advances in Batteries for Medium and Large-Scale Energy Storage Types and Applications; Woodhead Publishing Series in Energy; 2015, Pages 463-474

4. Coolants

As per Markets and Markets, the global engine antifreeze/coolant market size is estimated at USD$5.4 billion in 2020 and is projected to reach USD$5.9 billion by 2025 at a CAGR of 1.8%.[25]

In automotive and industrial applications, coolants are used to ensure the transfer of heat under extremely cold conditions and prevent engines from overheating. One potential global scale application for coolants, in future, is in fast chargers for electric vehicles. Quicker charging generates more heat and requires effective thermal management to achieve optimal performance. Liquid cooled charging cables can use thinner-gauge wire and reduce cable weight by 40% and lighter-weight cables are easier for consumers to handle.[26]

25 https://www.marketsandmarkets.com/Market-Reports/antifreeze-coolant-market-9054255.html

26 https://chargedevs.com/newswire/liquid-cooling-in-electric-vehicles-what-to-know-to-keep-evs-on-the-go/

A study published in 2011 indicated that graphene dispersed nanofluids (in ethylene glycol and deionised water) enhanced thermal conductivity.[27] Several other studies show that nanofluids will enhance the performance of the radiator when compared with the base fluid.

GMG has filed a patent (pending) in relation to coolants and continues to invest in developing and testing coolants. If GMG creates intellectual property around the product and process, and successfully commercializes graphene enhanced coolants, it has the potential to capture value in the coolants’ value chain.

Operating Segments

There are no operating segments that are reportable segments under IFRS 8. Based on the commercialized products and products under development, subject to their successful commercialization, GMG expects to primarily operate under two key strategic business units, namely ‘energy savings products and solutions’ and ‘energy storage products’.

In the energy savings segment, GMG has focused on graphene enhanced HVAC coating, lubricants and fluids. GMG and its customers have demonstrated HVAC coating projects, offering customers improved heat transfer in space cooling (air-conditioning) and coolant units. Also, GMG is developing lubricant concentrate additives aiming to reduce friction in engines. Both these offerings have the potential to enable lower energy consumption, reducing both cost and emissions.

The energy saving HVAC coating, ‘Thermal XR powered by GMG graphene’, is being progressed and has several demonstration projects completed or in progress. GMG has demonstrated the viability of using a graphene additive in lubricants, with results of tests showing a reduction in wear and coefficient of friction. Further testing of lubricants is progressing both in-house and via third parties. Should various product applications be commercialized, GMG will need to increase its graphene powder production capacity and/or improve the production yield of the existing plant and may also need to build additional manufacturing capacity for specific product offerings. This will require capital expenditure and optimization going forward.

The ‘energy storage products’ business unit has not generated significant revenue to date. Pursuant to a research agreement and a license agreement dated February 26, 2021, GMG and University of Queensland are working collaboratively with financial support from the Australian Government to progress R&D, and potential commercialization of Graphene Aluminium-ion batteries. Future revenue generation for this unit is expected to be derived from sales of graphene powder to enhance the performance of existing battery technology, such as LI Batteries, and the targeted successful commercialization of the G+AI Battery.

Products and Solutions

GMG has several products and solutions at different stages of development. Some products are being co-developed with universities and others with customers and prospective customers. This section discusses some key products and solutions of GMG. Other products/applications opportunities likely exist including high-density polyethylene, heart stents, amongst others but are not being prioritized at this time. At present, the products and solutions that are the focus of commercialization are graphene powder (G Composite for mixing with various liquids and solids and G Power for battery applications) and ‘Thermal-XR powered by GMG graphene’ (or TXR).[28]

27 Baby, T.T., Ramaprabhu, S. Enhanced convective heat transfer using graphene dispersed nanofluids. Nanoscale Res Lett 6, 289 (2011). https://doi.org/10.1186/1556-276X-6-289

28 Thermal-XR is manufactured by TXR Supplier which uses GMG graphene as a key constituent

1. Energy Savings Products and Solutions

A. ‘Thermal XR powered by GMG graphene’ (TXR)

TXR is a paint formulation and application system designed to reduce power consumption, increase the corrosion protection of HVAC condenser coils and extend the economic life of the HVAC unit. The product was developed by TXR Supplier using GMG graphene through close collaboration between both parties.

TXR includes thermally conductive GMG graphene that helps rebuild thermal conductivity lost from damage caused by corrosion. GMG has agreements to supply TXR Supplier with graphene which is blended and supplied back to GMG with the products and procedures to protect HVAC coils, both round tube plate fin and micro channel, from accelerated corrosion damage. The TXR process can be used on already damaged coils in the field to restore lost energy efficiency. GMG not only supplies TXR, but also provides an end-to-end service which includes application of TXR on space cooling units and refrigeration units by licensed professionals.

TXR is applied by a high-pressure spray gun. The resulting coating is UV resistant, has a dry film thickness (DFT) of no more than 15 microns, is flexible and highly resistant to aggressive environments. TXR Supplier has confirmed the adhesion level meets the Cross-Hatch Test Level 0 (European) and 5B (USA) according to ASTM International (“ ASTM ”) 3359-88 53151 method B-A. GMG has been informed by TXR Supplier that corrosion resistance has been confirmed by testing of no less than 10,000 hours salt spray resistance per ASTM B117 using aluminum test. TXR is suitable for use on both new and already installed air-cooled condenser coils on buildings, buses, trains and other heat exchange equipment situations.

Commercial sales for this product recently commenced and various demonstration projects are also underway. GMG has and continues to obtain data from customers that have undertaken the TXR coating and are assessing energy savings. GMG is using customer case studies to target potential customers of TXR. For example, in October 2020, GMG undertook a TXR installation project on a 16kw unit for one gym of a franchised fitness outlet in Australia. Results have indicated considerable energy savings over a short period on smaller size units. Whilst longer-term data is still being collected on the site, the unit has averaged notable daily kWh savings over the first 14 days when compared to the estimated pre-TXR energy consumption with similar weather datasets pre and post TXR application. GMG has also completed a TXR project for a sizeable fast-food business at one of their outlets, for which energy savings have been recorded and ongoing data is being monitored.

To accelerate the market penetration of this energy efficiency solution, GMG is also sourcing leads through agents. Most of these agents currently are HVAC installers and building contractors, located in different cities in Australia. GMG is also actively marketing this product to potential distributors throughout South East Asia and Middle East.

This product as at an early commercial production stage and has generated some revenue to date. The Company is engaged with several major customer prospects. The product is manufactured by a third party, TXR Supplier, and initial stocks of inventory have been received by GMG in anticipation of future sales.

B. G Lubricants

GMG blends GMG Graphene into lubricating oil to make G Lubricant concentrates for lubricant manufacturers to then mix into their lubricant products (e.g. engine oil) for final blending, packaging and sale.

GMG has developed mixing equipment, systems and processes at laboratory and commercial scale to make G Lubricant concentrates. GMG has also developed lubricant product testing equipment, systems and processes to optimize product formulations for graphene quality, lubricant type and customer performance data. GMG has also developed sales and marketing capabilities for selling G Lubricant concentrates to lubricant manufacturers worldwide.

Initial trials by GMG have shown a reduction in wear and subsequent reduction in co-efficient of friction in GMG graphene enhanced lubricants over those without graphene. GMG believes that further reduction is possible by codeveloping the product with an additive pack and better knowledge of the base oil molecules of the intended lubricants. Trials are ongoing and the lubricating oils have maintained stable dispersions of graphene for over 12 months to date.

Several large global lubricant blending and marketing companies and original equipment manufacturers are either testing or have expressed interest in testing GMG G Lubricant concentrates for their performance characteristics for potential adoption as an additive for their products. Some smaller lubricant blending and marketing companies have purchased GMG’s graphene for initial trials and/or early-stage small scale commercial production.

This product is under development and testing internally and with prospective customers. The research and development for this product is being undertaken in-house. Results achieved so far are encouraging and therefore Management views this product to be in more advanced development than other products under development. Research is ongoing and there is no fixed end date. Customer engagement is taking place simultaneously, and hence timing of commercial production will be based on customer accepted scientific results, energy savings calculations and receipt of substantial orders. In a business-to-business environment with large corporate counterparties, the timeline for product validation and acceptance is uncertain. There is no significant operating cost for development, other than the salary costs of the Company’s Head Product Scientist and Marketing Manager. Necessary capital equipment has already been acquired.

C. Other Products under Development
‘G Coolant’ and ‘G Fluids’

GMG’s ‘G Coolant’ and ‘G Fluids’ are a range of graphene enhanced coolants and fluids specifically designed to increase corrosive resistance, save energy and reduce costs. G Coolants are formulated using ethylene glycol as a base and G Fluids typically use water as a dispersion medium for the graphene. To produce these liquid graphene products, graphene is added to various dispersing agents and mixed in various mixing equipment.

Using GMG’s graphene technology, the Company is aiming to:

reduce the time it takes to remove heat;
reduce overall energy input required for operation;
reduce CO2 intensity of the operating unit; and
reduce energy costs.

Preliminary encouraging tests conducted by GMG have prompted further testing which is being carried out in a facility at a local university in Brisbane.

These products are under development and testing. The research and development for these products is being undertaken in-house. Research is ongoing, but with lesser focus than on G Lubricants, and there is no fixed end date. Customer engagement is taking place simultaneously, and therefore timing of commercial production will be based on customer accepted scientific results, energy savings calculations and receipt of substantial orders. There is no significant operating cost for development, other than the salary costs of the Head Product Scientist and Marketing Manager responsible for development.

GMG has a patent pending for ‘Enhanced coolants’. See “ Intangible Properties ”.

2. ‘G Diesel’

Building on successful academic studies,[29 30] GMG is in the early stages of exploring the benefits of graphene enhanced fuels to improve efficiency. GMG sourced diesel and dosed it with small amounts of graphene using mixing equipment. GMG has also done the same for biodiesel. Diesel variants produced by this process were tested in a diesel generator to compare emissions and fuel economy vis-à-vis the corresponding readings from pristine diesel. Initial results were inconclusive as tests were unable to be carried out in a controlled environment. Management is now in discussions with different enterprises including universities regarding testing of graphene-enhanced diesel and bio-diesel to increase fuel efficiency and reduce emissions.

This product is still in the early stages of development and testing which has not been prioritized in the near term. The potential for this product has been identified from third party research studies conducted using graphene in diesel. Research will likely require use of local university facilities to enable performance testing in a controlled environment. As of now, the Company remains interested in this product and is engaged with several major collaboration partners towards the progression of this project, but at this time does not plan to spend significant amounts on this project in the next 12 months. There is no timeline or end date for development of this product.

Energy storage products

A.

G Batteries

Pursuant to a research agreement and a license agreement dated February 26, 2021, GMG has entered into a collaborative research project with the University of Queensland to develop a Graphene Aluminium-ion battery using GMG’s graphene and a continuous production process for scalable production. At present, most batteries being produced globally are LI Batteries.

Initial trialing of GMG’s G+AI Batteries indicate potential advantages over LI Batteries, including:

3 times energy storage density of LI Battery;
Up to 60 times faster charging than LI Battery;
Stable charging/de-charging capacity over 1000 cycles;
Lower cost – of aluminium vs lithium;
Higher potential for recycling[31] ;
Security of supply as aluminium is more widely available than lithium and widely available in developed countries; and
Significantly reduced risk of fire.

29 Ahmed I. El-Seesy, Hamdy Hassan, S. Ookawara, Effects of graphene nanoplatelet addition to jatropha Biodiesel–Diesel mixture on the performance and emission characteristics of a diesel engine, Energy, Volume 147,2018, Pages 1129-1152, ISSN 0360-5442, https://doi.org/10.1016/j.energy.2018.01.108.

30 M. Norhafana et al 2018 IOP Conf. Ser.: Mater. Sci. Eng. 469 012035 https://iopscience.iop.org/article/10.1088/1757899X/469/1/012035

31 As per CSIRO, only two per cent of Australia’s annual 3,300 tons of lithium-ion battery waste is recycled https://www.csiro.au/en/Research/EF/Areas/Grids-and-storage/Energy-storage/Battery-recycling

The GMG G+AI Battery project, being undertaken with University of Queensland, aims to develop a new generation of high performance and low-cost cathode materials for rechargeable G+AI Batteries. To address the low-capacity issue of current cathodes, this project anticipates generating new knowledge in the material design of novel graphene materials. Also, by developing an innovative surface perforation technique coupled in a continuous production process, this project expects to produce scalable and cost-effective graphene cathodes with a record-high capacity. A successful outcome of this project will create new intellectual property which will enable GMG to target a global market for batteries. The project has also been approved to receive grant funding of $390,000 from the Australian Government’s Australian Research Council.

The go-to market strategy will be finalized when the commercialization potential of the technology is proven.

Initial performance results on this project being undertaken with University of Queensland are encouraging. The collaboration project is for a period of three years. Research will be carried out by University of Queensland, with the assistance of GMG. The Company will contribute approximately $150,000 in cash (approximately $50,000 per annum for three years) and approximately $250,000 in-kind (graphene costs and costs of human resources of the Company). The Company expects a commercial prototype to be developed during this project.

3. Graphene Powder

While its graphene powder is a key input component of the Company’s products and solutions, GMG also has and will continue to supply graphene in powder form to various customers. GMG produces graphene powder using its proprietary, confidential production process.

G Composite and G Power are two of the different graphene products that GMG can make with their self-developed production system. G Composite is generally used to mix with other materials, including for making liquid graphene products. G Power is generally used for energy storage applications, including batteries.

An example of another application of graphene powder is its use in composites as an additive to enhance a variety of mechanical properties, including electrical and thermal conductivity, durability, flexibility, stiffness, UV resistance, weight reduction and fire resistance.

This product is at commercial production stage. Production is carried out at the Company’s premises using a proprietary production process.

Specialized Skill

The common thread and a key component of all GMG’s products and solutions, including those under development, is high-quality graphene. GMG produces this graphene via a proprietary manufacturing process. The business has the specialized capability to manufacture graphene powder from natural gas.

Recruiting and retaining qualified personnel will be critical to the Company’s success. The Company is dependent on the services of key executives including its Chief Executive Officer and other highly skilled and experienced executives and personnel focused on managing its interests. The number of persons skilled in hydrocarbon handling, processing and the manufacturing of graphene and graphene products is limited and competition for such persons is significant. As business activity grows, the Company will require additional key financial, administrative, sales and marketing and engineering personnel as well as additional operations staff. There is no assurance that it will be successful in attracting, training and retaining qualified personnel as competition for persons with these skill sets increases.

Environmental Policies

The Company seeks to conduct its activities in accordance with high environmental standards, including compliance with environmental laws, policies and regulations. Based on GMG’s size and plant capacity, no compliance is currently required with a mandatory reporting regime in relation to emissions. Management estimates that the impact of the production process on the environment is minimal. Also, Management believes that deploying residual gases

from the production process into powering the chilling systems of the plant may be able to make GMG a carbonneutral business in future. As GMG scales, Management is currently of the view that there will be no material financial or operational effects of environmental protection requirements on the capital expenditure, profit and loss or the competitive position of GMG.

Employees

As at the date of this Prospectus, the Company has 16 full time, one part-time, one fixed term and three casual employees in Australia, including those located in its head office, warehouse and graphene production facilities. The individuals employed by GMG on a full time basis are expected to devote 100% of their time. See “ Directors and Executive Officers ”.

Competition

GMG operates in the clean-technology or ‘clean-tech’ industry, which provides products and solutions that enable energy efficiency, emission reductions and cost savings. As GMG’s customer offering is driven by grapheneenhanced products, GMG considers companies that are using or exploring the use of graphene or other nanomaterials in the energy efficiency and battery technology and materials value chain as its potential competitors, although to date it has experienced no noticeable competition with its products.

The graphene industry is fragmented. In the period from 2010 to 2013, several graphene companies emerged. Many graphene producing companies have been spun-off from research centers and universities. Because of the extremely large number of potential applications of graphene and different specifications of graphene sought for each application, GMG believes that graphene will never be a ‘one size fits all’ product. As many companies engaged in this space are quite small with limited public information available, it is difficult to assess which companies are likely to emerge as competitors. Below are examples of companies that would fall under the category of what Management believe could be potential competitors, but to date GMG has not seen meaningful competition in its target markets of energy saving paint and lubricants from any of these example companies.

Company	Applications/ Downstream products
Applied Graphene Materials United Kingdom	Focuses on composites, coatings, lubricants, thermal management solutions and batteries and energy storage devices.
First Graphene Australia	Manufactures graphene using graphite, and has a product range that is focused on composites, elastomers, fire retardancy, construction materials, graphene enhanced textiles and energy storage devices.
Global Graphene Group United States of America	Focuses on thermal coatings and paints, conductive coatings and inks, anti- corrosion primers, graphene enabled silicon anodes, Li-Ion battery materials and non-inflammable electrolytes.
Graphenano Spain	Has nine subsidiaries using graphene for concrete, batteries, sensors, composites and dental prostheses, among other applications.
Nanotech Energy United States of America	Produces graphene oxide from graphite for applications including batteries, transparent conducting electrodes, functional inks, flexible displays, antistatic coatings, RFID antennas.
NanoXplore Canada	Manufactures graphene powder from graphite for industrial markets, including for composites, mechanical strengthening, UV inhibiting properties and thermal and electrical conductivity.

Company	Applications/ Downstream products
Versarien United Kingdom	Develops advanced materials to satisfy customer-specific applications including a range of high performance, electrically conductive graphene inks, graphene enhanced plastic products and energy storage devices.
Zen Graphene Canada	Utilizes graphite to produce graphene and is focused on the development of an intellectual property portfolio while developing innovative applications.

In a fragmented market, the following will primarily drive GMGs competitive advantage:

1. Quality of graphene used in customer offering

The quality and properties of graphene vary by manufacturing process. Most companies producing few layer and multilayered graphene use micromechanical exfoliation, and liquid-phase exfoliation[32] , which generally results in a product called graphene oxide or reduced graphene oxide. GMG’s proprietary production method, using natural gas, produces graphene (not graphene oxide derived from graphite) which Management believes has characteristics which are superior for many applications. Successful commercialization of GMG’s customer offerings will be difficult for rivals to replicate because comparable graphene itself will be very difficult for competitors to produce.

Patents and know-how relating to energy saving products and solutions, including:
Patent pending in relation to enhanced coolants
Exclusive supply and distribution agreements with TXR Supplier (the TXR Agreements) relating to manufacture and distribution of ‘Thermal XR powered by GMG Graphene’.

Due to potential competitors that could affect GMG’s business, some of which could be with companies with greater financial resources, the Company may be unable to manufacture attractive products in the future on terms it considers acceptable. There is no assurance that additional capital or other types of financing will be available to GMG if needed or that, if available, the terms of such financing will be acceptable to GMG. See “ Risk Factors”, including risks relating “Competition” and “ Financing Requirements ”.

Permits and Licenses

The Company requires certain permits and licenses in connection with its operations.

With respect to graphene powder, the Company currently operates under approval from the Australian Industrial Chemicals Introduction Scheme (“ AICIS ”), and is permitted to produce up to 100kg p.a. The Company has applied to AICIS for approval to produce up to 1,000kg p.a. AICIS has requested that the Company provide further technical supporting information in connection with its application, which the Company is currently in the process of preparing.

The Company also requires an Electrical Contractors’ License and a Mechanical Services License (Plumbing) issued by the applicable government authorities in Queensland, Australia, to undertake installation of TXR in Queensland, as well as the equivalent in each Australian state to undertake installation in such states. One of the Company’s employees holds these necessary licenses in Queensland. The current sales focus in Australia is largely in Queensland, but the business will consider operating through contractors or recruiting new employees with appropriate licenses in other states as required.

32 Exfoliation techniques utilise graphite to produce graphene

Intangible Properties

GMG’s strategy is to build intellectual property in relation to applications of graphene that enable energy cost savings, emission reductions and better energy storage technology e.g. HVAC coatings, lubricants, coolants and batteries. There are several opportunities to seek patents around certain graphene applications. This strategy would build a “downstream product patent fence” around GMG’s core graphene powder manufacturing process trade secret.

In line with the ‘trade secret’ and ‘patent fence’ strategy, GMG will continue to review opportunities to lodge patent applications around certain graphene applications and elements of the manufacturing process. As at the date of this Prospectus, GMG has lodged the following patent:

Application Number	Filing Date	Title	Status	Country
Provisional Patent Application
2019901036	March 27, 2019	Enhanced coolant	Application ceased, at end of life	Australia
Patent Co-operation Treaty (PCT) Application
PCT/AU2020/050295 (Publication No. WO 2020/191449 A1)	March 27, 2020	Enhanced coolant	A response to the Written Opinion of the International Preliminary Examining Authority was lodged in December 2020	Patent Co-operation Treaty (PCT)1

The abstract of this patent application states, “This invention relates to a method for producing an enhanced coolant. The method includes combining graphene with one or more dispersing agents to form a combination. The method further involves mixing the combination with one or more coolant compositions. In certain embodiments the enhanced coolant may provide an increased heat transfer rate and subsequent reduction in cooling time over existing coolants.”

GMG has procured specialized equipment for mixing and testing graphene enhanced fluids such as lubricants and coolants. Also, GMG has procured equipment to test lubricants under the modified ASTM standards in a controlled environment. The equipment is co-located within the production facility and necessary tests are carried out on site. Where more sophisticated equipment is required, GMG uses the facilities at local universities.

In addition to in-house R&D, GMG often participates in projects with universities and research institutions. Funding support for these projects has been obtained from government research grants in Australia, through the Australian Research Council and other government bodies engaged in funding research projects. This funding generally provides part funding for a given project; the university makes its infrastructure facilities and research personnel available and, in some cases, cash contribution, while GMG may commit graphene, cash contribution and in some cases, personnel or a combination of these to the project. Various projects are being undertaken with universities, some of which provide IP ownership or licensing opportunities for GMG in graphene applications.

One of the key projects, for which funding has been approved is “Enabling next-generation rechargeable Aluminiumion Batteries”. For this project, GMG and University of Queensland are working collaboratively, pursuant to a research agreement and a license agreement dated February 26, 2021, to progress R&D and ultimately explore the commercialization of GMG graphene aluminum-ion batteries or G+AI Batteries. The government research grant approved for this project is approximately $390,000, while GMG’s cash commitment is approximately $150,000 (approximately $50,000 per year for 3 years) and in-kind commitments of employee time and graphene powder are $250,000 over the entire project. University of Queensland is providing intellectual property and other resources for this project.

GMG lodged a confidential patent application on April 9, 2018 dealing with GMG’s graphene manufacturing process design (the “ Process Patent ”). GMG had an option to lodge a full patent application by 9 April 2019 or allow the application to lapse. Lodging a full patent would have required public disclosure of the Process Patent, in exchange for the associated patent protection. There are limitations to the protection of such a ‘process patent’ as it is difficult to determine if the patent has been infringed. GMG took a strategic decision to not lodge a full patent to maintain strict confidentiality around its proprietary manufacturing process design. GMG believes that this ‘trade secret’ approach will allow it to better maintain its competitive advantage around production of graphene.

Business Cycle

The Company is a graphene manufacturing and technology company with a number of graphene-enhanced products under development. As a result, the cost of production of graphene will have a direct impact on its business. Increasing cost of production can, for example, impact operations by requiring a re-assessment of the feasibility of a particular project, and they can also impact the Company’s ability to raise capital. See “ Risk Factors”, including risk relating to “Graphene Price Fluctuations ”.

No recurring cyclicality or seasonality trends observed to date are significant. While cyclicality may be determined by specific applications, in aggregate, based on the Company’s development pipeline, Management does not anticipate the business will have any seasonality in the sales profile going forward.

Economic Dependence

The near-term cash generation of the business is expected to be primarily from sales of ‘Thermal XR powered by GMG graphene’ and sale of graphene powder. TXR has been developed by TXR Supplier, using GMG graphene. Pursuant to the TXR Agreements, GMG in turn has exclusive rights to procure TXR from TXR Supplier and resell to distributors, in most geographies including the Americas, UK and Europe, North East Asia (including China, Japan, Korea) and Africa. Non-exclusive rights exist elsewhere. Considering TXR Supplier’s production capacity, and the dependence of TXR on GMG’s graphene, Management considers the risk of non-availability of TXR to be ‘low risk’. The TXR Agreements were signed in November 2020.

Foreign Operations

GMG’s production facility and head office are located in Brisbane, Australia and it has 16 full time, one part-time, one fixed term, three casual employees and one part-time contractor in Australia. It also has one full-time contractor in Singapore in the business development function. Most discussions and sales efforts are currently focused in Australia. So far, limited sales revenue has been generated from overseas. Most of GMG’s products under development will cater to a global market. Hence, in future, GMG is expected to generate revenue from foreign operations.

Changes in Contracts

There is no aspect of GMG’s business that it reasonably expects to be affected in the current financial year by renegotiation or termination of contracts.

Bankruptcy

There has been no bankruptcy, receivership or similar proceedings against GMG, or any voluntary bankruptcy, receivership, or similar proceedings by GMG, within the three most recently completed financial years.

Material Restructuring Transactions

Except as set out herein, GMG has not completed any material restructuring transaction within the three most recently completed financial years.

Social or Environmental Policies

A. Quality policy

A policy on quality is being developed and the Company is documenting the procedures with the aim to eventually obtain the ISO 9001 quality certification. GMG is already following many of the processes for the certification. For example, GMG stores samples from every batch of each of production unit. Sample testing is performed. Testing does not result in product being discarded or wasted. However, testing may result in a reclassification in grade of graphene powder for different applications.

Members of Management and the production team meet regularly to discuss quality including production performance. All plant upgrades are approved by the Head of Technology, who has the necessary process engineering expertise. Qualified external sub-contractors are used for installation if the capability to install does not exist in-house.

B. Health, Safety and Environment (“HSE”) Policy

GMG has a current HSE policy with documented procedures and an HSE management system. GMG has invested in HSE since inception and has appointed a dedicated HSEQ Manager in October 2020. The Company has several employees and directors with extensive experience in the oil and natural gas industry, including in safety and operations fields. The existing HSE policy was reviewed and updated in November 2020. GMG plans to form an HSE management committee or board subcommittee in the next 6 months.

From November 2019 to the date hereof, there has been no time lost due to injury. ‘Near misses’ are carefully considered at regular HSE meetings and necessary corrective action is taken. GMG is in the process of deploying a software solution to automate the reporting and management of incidents.

With respect to environment, the impact of the manufacturing process on the environment is being minimized. Management believes that deploying residual gases from the production process into a gas generator to power the production system will likely contribute towards making GMG a carbon-neutral business eventually.

Lending

GMG does not have any investment policies or lending and investment restrictions.

GMG Private Placements

Since the Company’s incorporation, GMG has undertaken the following private placements and capital raising activities:

Issue dates	Description	Issue price per share ($)	Funds raised ($)	Securities Issued
March 2017	Shareholder Loan(1)	N/A	38,572	N/A
April 2018	Convertible Notes	5.45(2)	400,000	400,000 convertible notes converted into 73,393 GMG Shares
May 2017	Equity Financing	1.14	410,000	361,008 GMG Shares
April to November 2018	Equity Financing	5.45	1,557,648	285,807 GMG Shares
December 2018 to June 2019	Equity Financing	9.35	2,651,062	283,566 GMG Shares
February to October 2020	Equity Financing	12.50	3,000,000	240,000 GMG Shares
March 24, 2021	Subscription Receipts(3)	C$0.65(4)	2,085,052(5)	3,077,000 Subscription Receipts
		TOTAL	10,142,334

(1) The shareholder loan was repaid by the Company on January 1, 2019.

(2) 400,000 convertible notes were issued at $1 per convertible note. On conversion, the GMG Shares were issued at $5.45 per GMG Share.

(3) For more information on the Subscription Receipt Offering, see below under the heading “ Subscription Receipt Offering ”.

(4) Securities issued in connection with the Subscription Receipt Offering were priced on a post-GMG Share Split basis. For more information, see “ Subscription Receipt Offering ”.

(5) Gross proceeds of C$2,000,050 were raised pursuant to the Subscription Receipt Offering, expressed in the table above in Australian dollars based on the AUD/CAD exchange at $1.0425.

Recent Events

On March 11, 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization, which has caused significant financial market and social dislocation. While government responses to COVID-19 have created an uncertain operating environment which can change at short notice, the Company’s staff and production operations have not been materially impacted. Customer trials and related potential sales were somewhat restricted during lockdowns in certain countries for periods in 2020 which slowed the Company’s commercialization plans, but currently the Company is not seeing any significant disruption to its manufacturing operations except for slowing or in some cases stalling its business development activities in Australia and other countries.

In financial terms, the Company benefited from:

The Australian Government’s JobKeeper payment scheme, a subsidy for businesses affected by COVID-19. Under this scheme the Company received $78,000 in the 2020 financial year.
The Queensland State Government’s cash flow boost program to support small and medium business and initiatives to rebate payroll tax payments. Under these schemes, the Company received another $50,000 in the 2020 financial year.

In terms of effects on the Company:

The Company has maintained access to capital during the 2020 financial year and the first half of the 2021 financial year, as evidenced by its capital raisings during this period. Capital markets conditions have been receptive to the Company for most of the pandemic to date.
The TXR demonstration projects may have progressed more quickly had it not been for COVID-19.
While interstate and international travel has been very restricted, the use of technology has greatly mitigated the general impact on the business these restrictions would have otherwise had.

The Company has instituted and will continue to implement operational and monitoring protocols to ensure the health and safety of its employees and stakeholders, which follow the advice of local governments and health authorities where it operates. The Company will continue to monitor developments of the pandemic and continuously assess the pandemic’s potential for further impact on the Company’s operations and business. The extent of the impact will depend on various factors, including the possibility of future shutdowns, the rate at which economic conditions return to pre-pandemic levels, any continued future governmental orders or lock-downs due to this wave of COVID-19 or any future wave, and the potential for a recession in key markets due to the effect of the pandemic. In addition, due to the potential impact of COVID-19 on the overall economic environment, there is a risk that the Company may require further financial support to fund its operations in the future should COVID-19 impact its profitability and/or cash flows. See “ Risk Factors – COVID-19 ” for additional details on the impacts of the COVID-19 pandemic on the Company.

USE OF AVAILABLE FUNDS

This Prospectus is a non-offering prospectus. The Company is not raising any funds in connection with this Prospectus and accordingly, there are no proceeds.

Funds Available

As at February 28, 2021, the Company had positive working capital of approximately $1,066,218, including cash of $1,021,506. See “ General Development and Business of the Company – GMG Private Placements ”.

Estimated Working Capital	($)(1)
WorkingCapital as of February28, 2021(2)	1,066,218
Estimated funds obtained by way of completion of Arrangement with Cuspis,as of March 15,2021(3)	2,085,000
Net funds to be obtained by way of Subscription Receipt Financing	1,912,577
Estimated WorkingCapital on listing	5,063,794

(1) Assuming conversion of Subscription Receipts. See “ Subscription Receipt Offering ”.

(2) Working capital is calculated as cash ($1,021,506) plus prepayments ($241,859) plus inventory ($127,958) plus accounts receivable ($12,970) less accounts payable ($338,076)

(3) This is based an estimate of available cash on the balance sheet of approximately C$2.0 million (AUD/CAD exchange at $1.0425), provided by Cuspis, as expected on completion of the Arrangement.

Principal Purposes

The proposed approximate use of available working capital, over the 12 months following the completion of the Qualifying Transaction and TSXV listing, is set out in the table below. Optionally, successful sales opportunities may see additional revenue and expenditure to that listed below.

Principal purposes for the use of Estimated Working Capital for the 12 months following the TSXV listing	$
1. Estimated capital expenditure1	200,000
2. Estimated listingexpenses2	200,000
3. Estimated operatingexpenses	3,289,717
Employee3	2,431,175
Occupancy4	155,032
Plant5	166,889
Overheads6	535,488
Finance	1,133
4. Marketingandpromotion	500,000
5. Estimated revenue and other income7	(800,000)
6. Unallocated workingcapital8	1,674,077
Total uses of WorkingCapital	5,063,794

1 Estimated capital expenditure

This amount is an estimate of the unutilized portion of the capital expenditure budget. The available approximately $200,000, constitutes several projects which have been approved. Of these, the largest projects aim to increase the production rate and reliability of production equipment of both graphene powder and liquid graphene products. The four largest projects are:

Project 1: $70,000 on equipment to increase the automation level of the production units, enabling greater production and improved labour efficiency;
Project 2: $50,000 to progress the G+AIB Battery project with UQ;
Project 3: $28,000 on equipment which analyses the composition of gases in the production process; and
Project 4: $25,000 on equipment for commercial scale production of liquid graphene products.

Other than those relating to the estimated spend of $200,000, GMG has identified further discretionary capital expenditure projects. The execution timeline for these projects has not yet been determined and some of these may be undertaken in the 12 months following the listing, subject to available funding.

2 Estimated listing expenses

This is an estimate of expenses in relation to the listing of GMG Shares on the Exchange, which has not already been incurred as at the date of this Prospectus including professional fees (including legal and accounting expenses).

3 Employee expenses

This includes wages and salaries, superannuation, payroll tax, staff amenities, staffing expenses and payments for workers compensation insurance, as shown in the table below:

Employee expense split	$
Wages and salaries	2,131,661
Superannuation @9.5%	202,508

Payroll tax and Work Cover	74,226
Staff amenities and staffing expenses	22,781
Total	2,431,175

The table below shows the estimated wages and salaries by function/division.

Estimated wages and salaries	No. of employees1	$
CEO and CFO – See ‘Executive Officers and Directors’	2	465,000
R&D(Head of Technologyand Head Product Scientist)	2	365,000
Sales and Marketing (Head of Business Development and Marketing Manager)	2	360,000
Plant(Production,HSEQand SupplyChain Managers + 7 operators)	10	741,400
Other staff	5	200,261
Total wages and salaries(excluding superannuation)	21	2,131,661

(1) Includes full-time, part-time and casual employees, but excludes contractors and consultants, and includes a provision for a financial analyst under “Other staff”.

Statutory superannuation for employees is 9.5% of wages and salaries, as shown in the table above.

The R&D function will be very focused on plant optimization, graphene quality optimization, batteries, lubricants, liquid graphene products including coolants in the next 12 months.

The Marketing Manager was appointed in October 2020 to strengthen the sales and marketing function, and an additional full-time contractor in Asia (whose costs appear in ‘ Overheads ’) is driving GMG’s engagement with potential customers in South-east Asia. The sales and marketing function will focus on increasing the sales of TXR projects and products, increasing engagement with potential customers of G Lubricants and corporate branding in the next 12 months.

Plant employees includes employees working in two shifts per week day. The company does not envisage additional plant staff in the next 12 months. If the Company experiences very high demand, it will consider operating in three shifts and/or weekend work which may require additional operators. Also, when the Company further scales up, it will consider recruiting a ‘ Process Engineer’ to assist the Head of Technology at the plant.

4 Occupancy Expenses

Occupancy expenses cover cleaning, light, power, heating, rent, outgoings, repairs and maintenance associated with the premises, telephone and internet expenses. Of the estimated expenditure of $155,032, the rent and outgoings are approximately $7,700 per month i.e. over $92,000 over the next 12 months, for both the head office and the plant. The business does not intend to lease additional premises in the next 12 months, as the existing premises can accommodate additional employees/ contractors, if required .

5 Plant Expenses

Plant expenses include general warehouse expenses, health, safety and environment (HSE) expenses, machinery consumables, feed gas, packaging, equipment related repairs and maintenance. Of the estimated expenses of $166,889, machinery consumables account for approximately $73,000 and the repairs and maintenance account for approximately $40,000.

6 Overheads

Following are the key components of the estimated Overheads of $535,488:

Consulting and contracting costs of approximately $119,000, which relate to a full-time contractor in Singapore in the sales function and a part-time contractor in Australia, Robbert De Weijer (See ‘Executive Officers and Directors’ and ‘Director Compensation’).
Accounting and tax planning costs of approximately $60,000.
Insurance costs of approximately $48,000.
Information technology costs of approximately $42,000.
Legal costs of approximately $120,000.
Marketing and public relation costs of approximately $42,000.
Testing and quality control costs of approximately $36,000.

This Management estimated operating expenditure for the Company is based on recent monthly trading data. As the Company is early-stage, strategy is constantly evolving, which can lead to a change in allocation of resources and operating expenses. For example, if significant revenue growth is achieved, the Company may allocate significantly higher funds to marketing and advertising, resulting in higher ‘Other expenses’ than shown in the table.

The Company expects that estimated overhead costs for the next 12 months will be less than historical overhead costs due to several factors. First, the Company had higher overheads in fiscal year 2020 and fiscal year 2019 of approximately $848,000. This is largely attributable to a full-time consulting contract with an individual for the provision of Health, Safety and Environment and Product Management services in these years. This contract was terminated in August 2020 and this function was taken over by a full-time employee, whose costs are included in ‘Employee’ expenses. For the next 12 months, based on the contractors currently engaged by the Company, the ‘Consultants and Contracting’ expenses are forecast to reduce by approximately $290,000. Furthermore, because of the COVID-19 pandemic and the current scenario in Australia, the Company does not foresee any international travel being undertaken in the next 12 months. Accordingly, a reduction of approximately $110,000 has been assumed in relation to ‘Travel’ expenses. Thus, in relation to these two items, the Company has forecasted an approximately $408,000 decrease in ‘Overheads’. Excluding, these two items, the business has forecast a net increase of approximately $95,000 in relation to all other sub-items that comprise ‘Overheads’, including an increase of approximately $49,000 in legal expenses and $27,000 in insurance expenses.

7 Estimated revenue and other income

The business has in the past received an annual refundable tax offset based on eligible R&D expenditure. The Company received approximately $933,000 related to fiscal year 2020 and approximately $802,000 in fiscal year 2019 from this tax offset. The Company has assumed R&D tax offset related other income to be $500,000 for illustrative purposes only. The Company will engage advisers for estimating eligible R&D expenditure and calculating R&D tax offset only after June 30, 2021.Thus, to present what may be considered a conservative estimate, the R&D tax offsetrelated other income has been assumed to be $500,000 for illustrative purposes.

The Company completed the Subscription Receipt Offering on March 24, 2021. This figure assumes the conversion of the Subscription Receipts for gross proceeds of C$2,000,050. See below under the heading “ Subscription Receipt Offering ”.

Furthermore, during the 12-month period following the listing, the Company expects to realize revenue from sale of TXR projects and products, and potentially other products (e.g. G Lubricants) as well. The Company has assumed operating revenue to be $300,000 for illustrative purposes only. For fiscal year 2020, the operating revenue was approximately $111,000, including a quarterly revenue of $20,000 in relation to a ‘take or pay’ style agreement, with a customer, for a research project. This project has been extended by 6 months to June 2021 with $20,000 payable to GMG for each quarter. However, in fiscal year 2020, the TXR offering had not been trialed and the TXR agreements had not been entered into in this period. With the targeted commercialization of the TXR product, the encouraging

results from initial TXR demonstration projects, and current engagement with prospective customers, the Company expects considerably higher operating revenue in the next 12 months compared to fiscal year 2020. As the Company has no reasonable basis to provide a guidance, a conservative management estimate of $300,000 has been used for illustrative purposes.

For this working capital analysis, a total figure of $800,000 has been shown as an estimated cash inflow for illustrative purposes only.

8 Unallocated Funds

Unless otherwise deemed advantageous and approved by the Board, unallocated funds will be invested only in in certificates of deposit or cash accounts of Australian banks, trust companies, or North American Banks or trust companies or Canadian Schedule 1 Banks. The Company’s Chief Financial Officer will be responsible for the investment of all unallocated funds.

It is anticipated that the available funds will be sufficient to satisfy GMG’s business objectives over at least the 12 months following completion of the Arrangement and subsequent TSXV listing.

The Company intends to spend its available funds as set out in this Prospectus. However, there may be situations where, due to changes in the Company’s circumstances, business outlook, and/or for other circumstances, that a reallocation of funds is necessary in order for the Company to achieve its overall business objectives.

Business Objectives and Milestones

The ‘ General Development and Business of the Company’ section describes the various products and solutions that have been developed / are being developed by the Company and the current activities of the company.

GMG, being an early-stage company, relies significantly on its human resources to achieve its objectives in relation to new product development and market development. As shown in the above table, ‘ Employee expenses ’ is the largest operating expense of GMG. The business has not separately allocated expenditure to the aforementioned objectives/milestones during the 12-month period, as much of the expenditure is already included in operating expenses, including employee benefits expense. Total salaries in each row is based on cumulative wages and salaries of persons involved in the achievement of the corresponding milestone. The same executive may be involved in the achievement of various milestones.

Below are the primary business objectives of the Company and accompanying milestones which would indicate successful outcomes on the various objectives that will be pursued from the funds available to GMG in the next 12months:

Business Objectives and Milestones	Significant Events and Timelines	Relevant costs (A$)
Securing and growing sales of graphene enhanced products, particularly Thermal XR powered by GMG graphene and G Lubricant.	The Company is actively seeking multi-site contract wins from large business customers for TXR application. This falls within the day to day responsibility of business development staff, who will seek to secure and grow sales throughout the next 12 months.	Total salaries of executives involved is approximately $440K. Legal costs for major contracts will be approximately $5K-10K per contract.
Commencement of revenue from the regular sale of G Lubricant and G Coolant.	The sale of G Lubricant and G Coolant falls within the day to day responsibility of business development staff,who will seek to	Total salaries of executives involved is approximately $440K.

Business Objectives and Milestones	Significant Events and Timelines	Relevant costs (A$)
	generate revenue throughout the next 12 months.	Legal costs for major contracts will be approximately $5K-10K per contract.
Further optimizing, enhancing and expanding production capability, and increasing graphene manufacturing plant reliability.	This falls within the day to day responsibility of the Head of Technology, who will seek to accomplish this objective as an ongoing process throughout the next twelve months.	Company has allocated approximately $98K in capital expenditures towards this objective. Total salaries of executives involved is approximately $220K Ad hoc operating expenses will also be incurred, which cannot be defined in advance.
Positive scientific results, endorsing proof-of-concept for customer applications, in relation to products under development, especially G Lubricant and G Coolant.	The Company will continue the product development and marketing proof of concept of G Lubricants and G Coolants. This falls within the day to day responsibility of Head Product Scientist and Marketing Manager, with results being accumulated continuously over the next 12 months.	No significant costs associated with development other than salaries, as necessary capital equipment has already been acquired. Total salaries of executives involved is approximately $360K.
Continuous receipt of favourable energy savings data from TXR customers, including demonstration projects and favourable customer testimonials.	Demonstration projects are a continuous process. Data is received daily, as majority of customers receive Wi-Fi-enabled equipment for GMG to record data.	Approximately $300 per installed Wi-Fi unit. Total salaries of executives involved is approximately $220K.
Working closely with universities, industry and government funding bodies on research projects and delivering on existing commitments to research projects	The Company has entered into a research agreement and a license agreement with University of Queensland dated February 26, 2021 in relation to the G+AI Batteries. The Company will also explore other opportunities for research throughout the next 12 months.	Legal costs associated with the University of Queensland research agreement and license agreement are approximately $15K. Total salaries of executives involved is approximately $840K. Ad hoc expenses may also be incurred, but cannot be defined in advance.
Confirmation of product and operational regulatory approvals.	Obtaining other regulatory approvals falls within the day to day responsibility of the HSEQ Manager, who will seek to obtain approvals as required.	Total salaries of executives involved is approximately $180K. Ad hoc consulting costs are expected to be approximately $10K.

Business Objectives and Milestones	Significant Events and Timelines	Relevant costs (A$)
Formation of alliances and/or partnerships industry stakeholders and investing with respect to product trials and commercialization, including for graphene enhanced fuels.	Ongoing discussions with several companies around the world which could result in an agreement at any time over the next 12 months.	Total salaries of executives involved is approximately $660K. Legal costs are expected to be approximately $10K.
Expanding global reach of the business through joint ventures, alliances and partnerships.	The Company will pursue opportunities for joint ventures or partnerships with respect to the sale and distribution of TXR in different countries. Ongoing discussions are in progress with various potential JV partners, which could be formalised at any time over the next 12 months.	Total salaries of executives involved is approximately $880K. Legal costs for each major agreement are estimated to be between $5-10k.
Building the GMG brand in Australia and internationally.	GMG has a business to business marketing model under which brand awareness and development is undertaken as part of its business development process. Additional marketing and promotional activities will also be undertaken during 2021.	Total salaries of executives involved is approximately $440K. Marketing and promotion budget is $500K.

In addition to the above costs, other operating expenditure is relevant to these activities, including for example premises costs, IT costs and payroll taxes.

While the Company intends to spend funds available as stated above, there may be circumstances where, for sound business reasons, a re-allocation of funds may be necessary. See “ Risk Factors ”.

Negative Cash Flow from Operations

For the financial year ended June 30, 2020 and the interim period ended December 31, 2020, the Company had negative cash flow from operations. The Company expects cash flow from operations to be negative for the foreseeable future. As a result, the funds referenced above may need to be reallocated to fund operations. Further, the Company may be required to raise additional funds. The Company’s failure to achieve profitability and positive operating cash flows in the future could have a material adverse effect on its financial condition and results of operations. See “ Risk Factors ”.

DIVIDENDS

The Company has not, since its inception, declared or paid any dividends on the GMG Shares. The declaration of dividends on GMG Shares is within the discretion of the Board and will depend on the assessment of, among other factors, capital requirements, earnings, and the operating and financial condition of the Company. The Company currently intends to retain future earnings, if any, to finance the expansion of its business and do not anticipate paying dividends in the foreseeable future. See “ Risk Factors ”.

SELECTED FINANCIAL INFORMATION

Selected Financial Information

The following selected financial information is subject to the detailed information contained in the financial statements of GMG and notes thereto appearing elsewhere in the Prospectus. The selected financial information is derived from and should be read in conjunction with GMG’s audited financial statements for the years ended June 30, 2020 and 2019 (Appendix A) and unaudited interim period ended December 31, 2020 (Appendix C). For reporting purposes, GMG prepares financial statements in Australian dollars and in accordance with IFRS. You should read the following information in conjunction with the financial statements and the related notes thereto, along with the respective Management’s Discussion and Analysis.

	June 30,	December 31,
	2020	2020
Balance Sheet	($’000)	($’000)
Current assets	1,643	2,081
Total assets	1,903	2,421
Amount due to related parties	Nil	Nil
Current liabilities	(218)	(372)
Total liabilities	(218)	(372)
Shareholders’ Equity	1,685	2,049

Pro Forma Balance Sheet

The following table sets out pro forma consolidated financial information as if completion of the Proposed Qualifying Transaction had occurred at December 31, 2020:

	GMG Cuspis Adjustments Pro‐forma Dec‐20 Dec‐20 Dec‐20 Dec‐20	GMG Cuspis Adjustments Pro‐forma Dec‐20 Dec‐20 Dec‐20 Dec‐20
Current assets Cash and cash equivalents Short term investments Trade and receivables Inventories Research and development grants receivable Other current assets Total current assets Non‐current assets Property plant and equipment Intangible assets Total non‐current assets Total assets Current liabilities Trade and other payables Employee benefit obligations Deferred revenue Total current liabilities Non‐current liabilities Total liabilities Net assets Equity Share Capital Cost of acquisition‐ finders fees SRO ‐ shares issued Cost of SRO ‐ finders fee Cost of SRO ‐ warrants issued Reserves Share option reserve Warrant Reserve Fair value of options issued Fair value of warrants issued Accumulated losses/ Deficit Listing expense General expenses ‐ cash Costs of acquisition‐ finders fee Total Accumulated losses/deficit Total equity	1,624,817 20,573 1,271,395 2,916,785 ‐ 2,212,562 2,212,562 340,124 ‐ 340,124 100,692 ‐ 100,692 ‐ ‐ ‐ 15,320 ‐ 15,320
	2,080,953 2,233,135 1,271,395 5,585,483
	‐ 303,209 ‐ 303,209 36,499 ‐ 36,499
	339,708 ‐ ‐ 339,708
	2,420,661 2,233,135 1,271,395 5,925,191 200,495 71,202 271,697 91,111 ‐ 91,111 80,000 80,000
	371,606 71,202 ‐ 442,808 ‐ ‐ ‐
	371,606 71,202 ‐ 442,808 ‐
	2,049,055 2,161,933 1,271,395 5,482,383 7,667,371 3,988,189 11,655,560 201,853 201,853 1,565,314 1,565,314 (93,919) (93,919) (22,250) (22,250) 2,209,070 (2,209,070) ‐ 13,306,558 243,660 ‐ 243,660 ‐ 284,681 (284,681) ‐ ‐ 142,435 (142,435) ‐ 176,969 176,969 89,638 89,638 510,267 (5,861,976) (474,252) 474,252 (5,861,976) (2,070,612) (2,070,612) (200,000) (200,000) (201,853) (201,853) (8,334,441)
		(8,334,441)
	2,049,055 2,161,933 1,271,395 5,482,383

Management’s Discussion and Analysis

The Management’s Discussion and Analysis for GMG for the year ended June 30, 2020 and June 30, 2019 is attached to this Prospectus as Appendix B. The Management’s Discussion and Analysis for GMG for the six months ended December 31, 2020 is attached to this Prospectus as Appendix D.

Certain information included in GMG’s Management’s Discussion and Analysis is forward-looking and based upon assumptions and anticipated results that are subject to uncertainties. Should one or more of these uncertainties materialize or should the underlying assumptions prove incorrect, actual results may vary significantly from those expected. See “ Caution Regarding Forward-Looking Statements ” for further details.

DESCRIPTION OF SHARE CAPITAL

The Company is authorized to issue GMG Shares of which 2,706,853 are issued and outstanding as of the date hereof. The holders of GMG Shares are entitled to receive notice of any meetings of the GMG Shareholders and each holder has the right to cast one (1) vote for each GMG Share held at any such meeting, either by proxy, or by attorney. The GMG Shares rank equally with all other shares in any capital surplus upon a reduction of capital or winding up.

The Company is also authorized to issue the following classes of shares (collectively, the " Preferred Shares "): Class A shares; Class B shares; Class C shares; Class D shares; Class E shares; Class F management shares; Class G dividend shares; Class H dividend shares; Class I capital shares; Class J capital shares; Class K redeemable preference shares; Class L preference shares; and Class M redeemable preference shares. None of the Preferred Shares are issued and outstanding.

The holders of Class A Shares and Class B Shares are entitled to receive notice of any meetings of such Preferred Shareholders and each holder has the right to cast one (1) vote for each class of such Preferred Share held at any such meeting, either by proxy, or by attorney. Holders of Class F management shares, Class I capital shares and Class J capital shares are entitled to voting rights at any general meeting. The remaining Preferred Shares do not attach any voting rights.

Immediately prior to closing of the Arrangement, the Company intends to effect the adoption of a new Company constitution. If the Company chooses to effect the amendments to its constitution, the constitution will include provisions which are customary for publicly held companies incorporated in Australia and listed in Canada. A summary of the proposed material amendments to the constitution are as follows:

(1) “Restricted securities” – Where the Exchange classifies any GMG Share capital as “restricted securities”, then the transfer, holding and rights accruing to such shares will be restricted as required by the Exchange.
(2) “Proportional takeover bids” – The inclusion of a formal process for which an off-market bid may be made for a proportion of GMG Shares within a bid class.
(3) “Direct voting” – Subject to director approval, a vote (pursuant to a general or class meeting) may occur via direct voting, which includes a vote delivered by post, fax or other approved electronic means.
(4) “Variation of Office – TSXV Requirements” – Upon the Company being subject to the Exchange and its listing rules, at each annual general meeting, all directors must retire from office. Those retiring directors may offer themselves for re-election at that same meeting, and there are provisions outlining the process where the minimum number of directors (three) are not elected.
(5) “Meetings held by electronic means” – The Company is expressly permitted to conduct a meeting of Shareholders via electronic means, provided the method allows each Shareholder to communicate, participate and vote at the meeting.

CONSOLIDATED CAPITALIZATION

The following table sets forth GMG’s share and loan capitalization as at the date of this Prospectus. This table should be read in conjunction with the financial statements and notes thereto incorporated by reference in this Prospectus.

Description of the	Securities	As of	As at the date
Share and Loan	Authorized(1)	December 31,	of this
Capital		2020	Prospectus(1)


GMG Shares	Unlimited	2,706,853	2,706,853
Options	10% of the issued and outstanding GMG Shares	249,574	249,574
GMG Warrants	Unlimited	Nil	Nil
Total		2,956,427	2,956,427

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(1) On a pre-GMG Share Split basis.
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OPTIONS TO PURCHASE SECURITIES

The Company has the following incentive options entitling the holder to subscribe for GMG Shares (" Options ") to purchase securities as at February 28, 2021:


	Number	Number	Issue/Exercise

	of	of	Price	Expiration
Group		Securities
	members			Date
		under
	in group		(AUD)
		Options(1)


Executive Officers and past executive officers as a group	7	130,472	$8.00-$18.00	November 6, 2025 to March 15, 2026
Directors and past directors as a group (who are not Executive Officers)	2	33,769	$8.00-$18.00	November 6, 2025 to December 23, 2027
Other employees and past employees of subsidiaries as a group	12	48,333	$8.00-$20.60	November 6, 2025 to March 12, 2028
All consultants as a group	2	35,000	$13.50	April 15, 2027 to April 21, 2027
Total	23	249,574	$8.00-$18.00

(1) On a pre-GMG Share Split basis.

The Company adopted an Employee Share Option Plan Rules (ESS Interest (Start-Up Rules)) (the " Start-Up Plan ")

on November 2, 2018 and an Employee Share Option Plan Rules (ESS Interest (Taxed Upfront) (the " Option Plan ”) on November 2, 2018. As of the date of this Prospectus, there are 125,102 Options outstanding under the Start-Up Plan and 124,472 Options outstanding under the Option Plan.

Upon completion of the Proposed Qualifying Transaction and in connection with the listing of the GMG Shares on the Exchange, the Company intends to amend the provisions of the Option Plan (the " New Plan ") to comply with Exchange policies. If the New Plan is adopted, under the New Plan, the Board may from time to time in its discretion, grant to directors, officers, employees and consultants of the Company Options. The principal purpose of the New Plan is to advance the interests of the Company by encouraging the directors, employees and consultants of the Company, by providing them with the opportunity, through options, to acquire GMG Shares in the share capital of the Company, thereby increasing their proprietary interest in the Company, encouraging them to remain associated with the Company and furnishing them with additional incentive in their efforts on behalf of the Company in the conduct of its affairs.

If the New Plan is adopted by the Company, the New Plan will contain the following provisions:

Eligibility

Any officer, director, employee, management company employee, consultant or investor relations person of the Company or its wholly-owned subsidiaries (each as described in the New Plan and each, an “ Eligible Person ”) is eligible to receive Options under the New Plan. The Board has full and final authority to determine the Eligible Persons who are granted Options under the New Plan and the number of GMG Shares subject to each Option.

GMG Shares Subject to New Plan

The maximum number of GMG Shares which may be available for issuance under the New Plan, together with any other security-based compensation plan of the Company, will not exceed 10% in the aggregate of the total number of GMG Shares issued and outstanding from time to time. The New Plan will be an “evergreen plan” and accordingly, any issuance of GMG Shares, including the issuances of GMG Shares in respect of which Options are exercised, and any expired or cancelled Options, shall automatically replenish the number of GMG Shares issuable under the New Plan.

The maximum number of GMG Shares which may be issued or reserved for issuance to any one Person (as described in the New Plan), and companies wholly-owned by that Person, under the New Plan within any 12-month period shall not exceed 5% of the issued and outstanding GMG Shares, calculated on the date an Option is granted to such Person.

Limits with Respect to Consultants and Investor Relations Person

The maximum number of Options which may be granted to any one consultant under the New Plan, together with any other of the Company’s previously established and outstanding security-based compensation plans or grants, within any 12-month period, must not exceed 2% of the issued and outstanding GMG Shares, calculated at the date an Option is granted to such consultant (on a non-diluted basis).

The maximum number of Options which may be granted to all investor relations persons under the New Plan, together with any other of the Company’s previously established and outstanding security-based compensation plans or grants, within any 12-month period, must not exceed 2% of the issued and outstanding GMG Shares, calculated on the date an Option is granted to any such investor relations person (on a non-diluted basis).

Exercise of Options

The exercise price of Options issued may not be less than the “discounted market price” (calculated in accordance with the policies of the TSXV) of the GMG Shares at the time the Option is granted. In addition, the exercise price will not be lower than as permitted by applicable TSXV policies.

Subject to the provisions of the New Plan and the particular Option, an Option may be exercised, in whole or in part,

by delivering a written notice of exercise to the Company along with payment in cash, bank transfer or certified cheque for the full amount of the exercise price of the GMG Shares then being purchased.

Term and Expiry Date

The period within which Options may be exercised and the number of Options which may be exercised in any such period are determined by the Board at the time of granting the Options provided, however, that the maximum term of any Options awarded under the New Plan is ten (10) years.

Vesting

All Options granted pursuant to the New Plan may vest and become exercisable at the discretion of the Board provided that if required by any stock exchange on which the GMG Shares trade any Options granted to investor relations persons must vest in stages over not less than 12 months with no more than one-quarter of the aggregated number of Options vesting in any single three-month period.

Termination of Options

An optionee who ceases to be an Eligible Person for any reason, other than as a result of having been dismissed for cause or as a result of the optionee’s death, may exercise any vested and unexpired Options held by such optionee for a period of 90 days from the date of cessation (or until the normal expiry date of the Option rights of such optionee, if earlier), subject to extension by the Board to a maximum of one year with approval from the TSXV.

In the event of a death of the optionee during the currency of the optionee’s Option, any vested Option theretofore granted to the optionee is exercisable by the optionee’s lawful personal representatives, heirs or executors until the earlier of one year after the date of death of such optionee and the expiry date of the Option.

Where the Company expects that an Exit Event (defined below) will occur, the Board may exercise its discretion to:

(i) waive any vesting condition and/or deem any vesting condition to be satisfied; and/or
(ii) procure the purchase or cancellation of any or all Options which have not been exercised (subject to the Exit Event occurring) for: (A) an amount agreed with the optionee; or (B) an amount determined by the Board to be equivalent to the consideration that the optionee would have received (less any amounts payable) on completion of the Exit Event; and/or
(iii) cancel any or all Options and arrange for options to acquire shares in the bidder to be granted or issued on substantially the same terms as such Options, with any appropriate adjustments decided by the Board; and/or
(iv) do nothing, and allow the Options to continue in accordance with their terms.

An "Exit Event" means the first to occur of:

(a) the date on which shares are either or both allotted or transferred under a prospectus (or other relevant offer document) lodged with the Australian Securities and Investments Commission (or an equivalent relevant regulatory body in another jurisdiction) in relation to an initial public offering;
(b) the date on which an agreement for the sale to a third party purchaser of all of the issued and outstanding GMG Shares is completed; and
(c) the date on which, following a Trade Sale (as defined in the New Plan) and following the passing of a resolution of GMG Shareholders to approve the distribution and payment to GMG Shareholders of the proceeds of sale that are available for distribution or payment to GMG Shareholders, whether in a winding up, by return of capital, share buy-back or otherwise, those proceeds are paid to GMG Shareholders,

or such earlier date that the Company gives notice to the optionees for the purposes of the New Plan that it deems an Exit Event to have occurred.

Non-Assignability and Non-Transferability

Options granted under the New Plan will be non-assignable and non-transferable by an optionee other than pursuant to a will or by the laws of descent and distribution, and such Option shall be exercisable, during an optionee’s lifetime, only by the optionee.

Adjustments in GMG Shares Subject to New Plan

The New Plan will contain provisions for the treatment of Options in the event of a reorganization, stock split, stock dividend, combination of shares, merger, consolidation, rights offering or any other change in the corporate structure or GMG Shares of the Company. The Options granted under the New Plan may contain such provisions as the Board may determine with respect to adjustments to be made in the number and kind of GMG Shares covered by such Options and in the exercise price in the event of such change.

Tax Concessions

In the case of the Start-Up Plan, the issuance of Options and GMG Shares to a Participant under the Start-Up Plan will be eligible for the “start-up” tax concession in Section 83A-33 of the Income Tax Assessment Act 1936 (Cth) or the Income Tax Assessment Act 1997 (Cth) or both (together, the " Tax Act "). If that concession is not available, it is intended that the issue of Options and GMG Shares to a Participant under the Start-Up Plan is a scheme to which Subdivision 83A-C of the Tax Act applies.

The foregoing summary of the New Plan is not complete and is qualified in its entirety by reference to the New Plan, which, if adopted, will be filed on the Company’s profile on SEDAR. If the New Plan is adopted, it is intended that Options will no longer be issued under the Start-Up Plan or the Option Plan, and all Options will be subject to the terms of the New Plan as of the date it is adopted.

PRIOR SALES

The following table sets out particulars of the GMG Shares and securities exercisable for or exchangeable into GMG Shares issued within the 12 months prior to the date of this Prospectus.

Date	Type of Security	Number of	Issue/Exercise Price
		Securities
		Issued(1)
February 17 to October 21, 2020	GMG Shares(2)	240,000	$12.50
April 23 to April 27, 2020	Shares (fee shares issued as consideration for services)(2)	41,516	$7.46
October 30, 2020	Shares (fee shares issued as consideration for services)(2)	21,593	$12.50
April 15 to April 21, 2020	Options	37,000	$13.50

Date	Type of Security	Number of	Issue/Exercise Price
		Securities
		Issued(1)
December 23, 2020	Options	39,484	$18.00
March 12, 2021	Options	2,000	$20.60
March 24, 2021	Subscription Receipts(3) GMG Finder Warrants(3)	3,077,000 161,430	C$0.65(4) C$0.65(4)

(1) On a pre-GMG Share Split basis.

(2) Issued pursuant to a private placement. For more information, see " GMG Private Placements " above.

(3) Issued pursuant to the Subscription Receipt Offering. For more information, see “ Subscription Receipt Offering ” below.

(4) Securities issued in connection with the Subscription Receipt Offering were priced on a post-GMG Share Split basis. For more information, see “ Subscription Receipt Offering ”.

PRINCIPAL SHAREHOLDERS

Except as set out immediately below, to the knowledge of the directors and officers of the Company, no person directly or indirectly beneficially owns, or exercises control or direction over, GMG Shares carrying more than 10% of the voting rights attaching to all the outstanding GMG Shares upon completion of the Arrangement and the GMG Shares listing on the Exchange:


Name of Shareholder	Total GMG Shares held(1)	Percentage of Outstanding GMG Shares(1)

Craig Nicol33	13,200,000	19.35%

(1) On a post-GMG Share Split basis and upon completion of the Arrangement and conversion of the Subscription Receipts.

ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTIONS ON TRANSFER

Upon completion of the Proposed Qualifying Transaction (including the GMG Share Split) and the listing of the GMG Shares on the Exchange, the Company expects that: (i) an aggregate of 2,105,675 GMG Split Shares (the “ CPC Escrow Securities ”) issued to certain shareholders of Cuspis, as set forth in the table below, will be held in escrow with the Escrow Agent under the provisions of the CPC Escrow Agreement; and (ii) an aggregate of 31,768,000 GMG Split Shares and 2,678,070 GMG Options (collectively, the “ GMG Escrow Securities ”) issued to certain shareholders of the Company, as set forth in the table below, will be held in escrow with the Escrow Agent under the provisions of the Escrow Agreement. The securities and percentages below assume completion of the GMG Share Split and the Arrangement.

CPC Escrow Securities

As of the date of this Prospectus, the following sets out the CPC Escrow Securities that, to the knowledge of the Company, will be held in escrow or will be subject to contractual restrictions on transfer upon completion of the Arrangement and the GMG Shares listing on the Exchange:

33 Mr. Nicol holds his GMG Shares through the entity Como Industries Pty Ltd ACN 165 754 807

Name of	Number of GMG Split Shares	Percentage of Class (1)
Shareholder and
	held in Escrow
Municipality of

Residence of
Shareholder
William Ollerhead(2) Toronto, Ontario, Canada	392,925	0.57%
Grant McCutcheon Toronto, Ontario, Canada	302,250	0.44%
Jack Schoenmakers(3) Kitchener-Waterloo, Ontario, Canada	302,250	0.44%
C. Fraser Elliott Toronto, Ontario, Canada	302,250	0.44%
Darin Thompson Toronto, Ontario, Canada	302,250	0.44%
Bruce Linton Ottawa, Ontario, Canada	201,500	0.29%
Fred McCutcheon Toronto, Ontario, Canada	80,600	0.12%
Michael McIntosh Toronto, Ontario, Canada	80,600	0.12%
William Hilson Toronto, Ontario, Canada	80,600	0.12%
David Keating Toronto, Ontario, Canada	60,450	0.09%
TOTAL	2,105,675	3.05%

(1) Post GMG Share Split basis and assuming completion of the Arrangement (and exchange of all Cuspis Share for GMG Split Shares) and conversion of the Subscription Receipts, such that 69,081,718 GMG Split Shares will be issued and outstanding. For more information on the Subscription Receipt Offering, see “ Subscription Receipt Offering ”.

(2) Mr. Ollerhead holds 550,000 Cuspis Shares personally, 50,000 Cuspis Shares through his spouse, and another 375,000 Cuspis Shares through Chunkerhead Ltd. (of which he is a director and officer, and a 50% shareholder), all of which will be exchanged into 392,925 GMG Shares on a post-GMG Share Split basis pursuant to the Arrangement.

(3) Mr. Schoenmakers will hold 302,250 GMG Split Shares through Schoevest Investments Inc. (of which he is the sole shareholder).

The CPC Escrow Securities will be subject to escrow restrictions pursuant to the terms of the CPC Escrow Agreement and will be released from escrow upon the passage of time in accordance with the Escrow Policy, such that 25% of the securities will be released on the date of the Final Exchange Bulletin and the remaining escrowed securities will be released in 3 tranches of 25% every six months following the date of the Final Exchange Bulletin, over an 18 month period.

GMG Escrow Securities

As of the date of this Prospectus, the following sets out the GMG Escrow Securities that, to the knowledge of the Company, will be held in escrow or will be subject to contractual restrictions on transfer upon completion of the Arrangement and the GMG Shares listing on the Exchange:

Name of	Number of GMG Securities held	Percentage of Class (1)
Shareholder and
	in Escrow
Municipality of

Residence of
Shareholder
Craig Nicol34 Founder, Managing Director, Chief Executive Officer and Corporate Secretary Brisbane, Queensland, Australia	13,200,000 GMG Split Shares 826,540 GMG Options	19.11% GMG Split Shares 13.56% GMG Options
Guy Outen35 Chair and Non-Executive Director London, England	704,000 GMG Split Shares 440,000 GMG Options	1.02% GMG Split Shares 7.22% GMG Options
Christopher Ohlrich36 Executive Director and Chief Financial Officer Melbourne, Victoria, Australia	4,400,000 GMG Split Shares 577,940 GMG Options	6.37% GMG Split Shares 9.48% GMG Options
Robbert De Weijer37 Executive Director Brisbane, Queensland, Australia	4,400,000 GMG Split Shares 72,720 GMG Options	6.37% GMG Split Shares 1.19% GMG Options
Robert Shewchuk Non-Executive Director	385,000 GMG Options	6.32% GMG Options

34 Mr. Nicol holds his GMG Shares through the entity Como Industries Pty Ltd ACN 165 754 807

35 Mr. Outen holds his GMG Shares through the entity Denewood Management Pty Ltd ATF Outen Investments Trust

36 Mr. Ohlrich holds his GMG Shares through the entity Dianna Howard atf The CGO Investment Trust

37 Mr. De Weijer holds his GMG Shares through the entity Robbert de Weijer & Kathleen de Weijer atf Trebbor Super Fund

Name of	Number of GMG Securities held	Percentage of Class (1)
Shareholder and
	in Escrow
Municipality of

Residence of
Shareholder
Calgary, Alberta, Canada
William Ollerhead38 Proposed Director Toronto, Ontario, Canada	264,000 GMG Split Shares	0.38% GMG Split Shares
Roberto Bran39 Head of Technology Brisbane, Queensland, Australia	4,400,000 GMG Split Shares 229,306 Options	6.37% GMG Split Shares 3.76% Options
David Pope40 Significant shareholder and former Management Brisbane, Queensland, Australia	4,400,000 GMG Split Shares 146,564 Options	6.37% GMG Split Shares 2.40% Options
TOTAL	31,768,000 GMG Split Shares 2,678,070 GMG Options	45.99% GMG Split Shares 43.94% GMG Options

(1) Post GMG Share Split basis and assuming completion of the Arrangement (and exchange of all Cuspis Shares for GMG Split Shares and all Cuspis Options for GMG Options) and conversion of the Subscription Receipts, such that 69,081,718 GMG Split Shares and 6,095,128 GMG Options are issued and outstanding. For more information on the Subscription Receipt Offering, see “ Subscription Receipt Offering ”.

The GMG Escrow Securities will be subject to escrow in accordance with Exchange policies. Prior to listing the GMG Shares on the Exchange, such persons will be required to place their GMG Escrow Securities into escrow pursuant to the Escrow Agreement. GMG Escrow Securities may not be sold, assigned, hypothecated, transferred within escrow or otherwise dealt with in any manner without the written consent of the Exchange.

The GMG Escrow Securities will be held in escrow pursuant to the Escrow Agreement among the Company, the Escrow Agent and the holders of the GMG Escrow Securities.

38 Mr. Ollerhead holds 220,000 GMG Shares in the name of Chunkerhead Ltd. and 44,000 personally, all of which are held indirectly through Radical Carbon Inc., which holds 5,834,202 GMG Shares on a post-GMG Share Split basis;

39 Mr. Bran holds his GMG Shares through the entity RABH Engineering Pty Ltd (ACN 616 998 675) atf The RABH Engineering Trust

40 Mr. Pope holds his GMG Shares through the entity Kym Marie Parsons and David William Pope atf Parsons-Pope Family Trust. Mr. Pope discontinued his executive role at GMG in August 2020.

	Percentage of Total GMG Escrow Securities
Release Dates	to be Released

On the date of the TSXV’s bulletin in respect of the listing of	10%
the GMG Shares on the TSXV (“Exchange Bulletin”)

Six months after the Exchange Bulletin	20%
12 months after the Exchange Bulletin	30%
18 months after the Exchange Bulletin	40%
TOTAL	100%

Additional Securities

If the principals acquire any additional securities of the Company of the type listed above, those securities will be added to the securities already in escrow, to increase the number of remaining Escrow Securities. Such increased number of remaining Escrow Securities will be released in accordance with the release schedule in the table above.

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets out the name, jurisdiction of residence of GMG’s directors and executive officers as well as their positions with the Company and principal occupation for the previous five years, and the number and percentage of the GMG Shares owned, directly or indirectly, or over which control or direction is exercised, by each of the Company’s directors and executive officers. All officers and employees are required to sign standard confidentiality and non-disclosure agreements with the Company.

Name, Current Position, and Province and Country of Residence	Position Held Since(1)	Principal Occupation(s) During Past Five Years	GMG Shares Beneficially Owned or Controlled(2)	Total Ownership on an Undiluted Basis
Craig Nicol(6) Founder, Managing Director, Chief Executive Officer and Corporate Secretary Brisbane, Queensland, Australia	August 10, 2016	Managing Director and CEO since August 10, 2016; Company Secretary since November 10, 2016; and M&A Deal Lead, Shell Australia Pty. Ltd., between April 2010 and August 2016.	600,000	22.17%
Guy Outen(3)(7) Chair and Non- Executive Director London, England	November 27, 2019	Chair and Non-Executive Director of GMG since November 2019; Executive, Shell Australia Pty Ltd, between January and March 2019; and EVP, Strategy and Portfolio at Royal DutchShell	32,000	1.18%

Name, Current Position, and Province and Country of Residence	Position Held Since(1)	Principal Occupation(s) During Past Five Years	GMG Shares Beneficially Owned or Controlled(2)	Total Ownership on an Undiluted Basis
		plc, between January 2014 and December 2018.
Christopher Ohlrich(8) Executive Director and Chief Financial Officer Melbourne, Victoria, Australia	January 30, 2017	Chief Financial Officer of GMG since January 30, 2017; Director of GMG since May 17, 2017; and Chief Commercial Officer, Armour Energy Limited from August 2013 to April 2016.	200,000	7.39%
Robbert De Weijer(3)(4)(9) Executive Director, Brisbane, Queensland, Australia	Director since May 17, 2017 Executive since November, 2019	Director of GMG since May 17, 2017; Senior Adviser, DuPont Sustainable Solutions, since November 2019; Executive Director, GMG since November 2019; Executive Vice President PNG, Oilsearch Limited, from October 2017 to September 2019; and CEO, Armour Energy from August 2013 to September 2016.	200,000	7.39%
Robert William Shewchuk(3) Non-Executive Director Calgary, Canada	July 15, 2019	Director of GMG since July 15, 2019; Director of Spectre Capital Corp since August 2018; President & CEO LithiumBank Resources Corp. since August 2020; Investment Advisor at PI Financial June 2016 to July 2017; Director of Verses Technologies Inc since November 2020; Director of Chromos Capital Corp since November 2020; Director of Caerus Capital Partners Inc. since October 2020; Director of Agro Capital Corp since December 2020; Managing Director Wolverton Securities March 2009 to June 2016.	Nil	Nil

Name, Current Position, and Province and Country of Residence	Position Held Since(1)	Principal Occupation(s) During Past Five Years	GMG Shares Beneficially Owned or Controlled(2)	Total Ownership on an Undiluted Basis
William Ollerhead(5)(10) Proposed Director Toronto, Ontario, Canada	N/A	Managing Director, Ollerhead Capital41since 1999	12,000	0.44%

Note:

Term of Board appointment expires upon holding the first annual meeting of shareholders.
On a pre-GMG Share Split basis.
Audit Committee members are Guy Outen, Robert Shewchuk, Robbert De Weijer.
Legal name: Robertus Cornelis Wilhelmus De Weijer.
In connection with closing of the Arrangement and prior to listing of the GMG Shares, the Company expects to appoint Mr. Ollerhead, a current director of Cuspis, as a director of the Company. If Mr. Ollerhead is appointed, it is anticipated that Mr. Ollerhead will replace Robbert De Weijer as a member of the Audit Committee. Mr. Ollerhead will be considered independent as such term is defined in NI 52-110.
Mr. Nicol holds his GMG Shares through the entity Como Industries Pty Ltd ACN 165 754 807.
Mr. Outen holds his GMG Shares through the entity Denewood Management Pty Ltd ATF Outen Investments Trust.
Mr. Ohlrich holds his GMG Shares through the entity Dianna Howard atf The CGO Investment Trust.
Mr. De Weijer holds his GMG Shares through the entity Robbert de Weijer & Kathleen de Weijer atf Trebbor Super Fund.
Mr. Ollerhead holds 10,000 GMG Shares in the name of Chunkerhead Ltd. (of which he is a director, officer and a 50% shareholder) and 2,000 shares personally, all of which are held indirectly through Radical Carbon Inc.

Biographies

Craig Nicol, Founder, Managing Director, Chief Executive Officer and Corporate Secretary, Age 46

Craig Nicol has a career of over 20 years in delivering large scale innovation including leading multi-billion-dollar gas and LNG value chains in Australia and Asia Pacific and managing sales and marketing teams across Asia Pacific working for the Royal Dutch Shell plc Group of companies.

Craig has a Bachelor of Engineering Degree in Manufacturing Systems (Honours) and a bachelor’s degree in Business Marketing from the Queensland University of Technology.

Craig is a Member of the Australian Institute of Company Directors (AICD) and is also a Director and Chair of the Board of Directors of the Australian Graphene Industry Association (AGIA).

Mr. Nicol devotes approximately 100% of his time to the Company. Mr. Nicol has entered into an Executive Employment Agreement that contains industry standard non-competition and non-disclosure provisions.

41 Ollerhead Capital is a registered business name of Chunkerhead Ltd., an investment and management services company.

Guy Outen, Chair and Non-Executive Director, Age 60

Guy had over 35 years of experience with Royal Dutch Shell plc Group of companies in various roles including EVP Strategy & Portfolio where he worked with the Shell CEO and Board to reset Shell’s strategy and create amongst other outcomes Shell’s New Energies business.

Guy has a Bachelor of Commerce (Honors) and a Master of Commerce (Economics) from Melbourne University. He is Fellow of the Australian Society of Certified Practicing Accountants (FCPA) and Chartered Governance Institute (FCG); a Member of the Institute of Directors UK and the Australian Institute of Company Directors (AICD).

Mr. Outen devotes approximately 20% of his time to the Company.

Christopher Ohlrich, Executive Director and Chief Financial Officer, Age 48

Christopher Ohlrich has over 20 years’ commercial, finance and corporate transaction experience during an investment banking career in Australia and the United Kingdom and more recently, senior commercial leadership roles with ASX listed companies in the energy sector.

He has had leading roles in over A$20 billion of completed M&A, IPO and capital raising transactions, initially with Ernst & Young in Brisbane, Australia and later as a Vice President in Deutsche Bank’s M&A and Corporate Advisory Groups in London, and Investec Bank in Sydney, Australia. He has held roles as General Manager Commercial with Arrow Energy Limited and Chief Commercial Officer with Armour Energy Limited.

He has dual degrees in Commerce and Law from the University of Queensland, Australia. He is a Chartered Accountant and member of the Institute of Chartered Accountants Australia and graduate and member of the Australian Institute of Company Directors.

Mr. Ohlrich devotes approximately 100% of his time to the Company. Mr. Ohlrich has entered into an Executive Employment Agreement that contains industry standard non-competition and non-disclosure provisions.

Robbert De Weijer, Executive Director, Age 59

Mr. de Weijer has over 30 years’ experience in operations, asset management and large project delivery in the energy industry as part of a 23 years’ career with Royal Dutch Shell plc Group of companies (Shell) followed by C-suite positions in ASX-listed oil and gas exploration and production companies in Australia.

Mr. de Weijer has had various senior company executive leadership roles in Europe, the Middle East and Australasia including Executive General Manager PNG (Oil Search) managing more than 2500 staff and contractors in a highly complex business environment; CEO (Armour Energy, Dart Energy); COO (Arrow Energy - seconded from Shell) and Asset Leader for Shell’s gas assets in the southern North Sea which included 53 offshore gas platforms and two major onshore gas terminals in Holland and England, 1500 Shell and contractor staff with an annual operating spend of ~ USD$900 million and annual Capex of USD$700 million.

Mr. de Weijer holds bachelor’s degrees in Mechanical Engineering and Business Administration. Mr. de Weijer devotes approximately 40% of his time to the Company.

Robert Shewchuk, Non-Executive Director, Age 45

Based in Calgary, Alberta, Canada, Mr. Shewchuk is the President & CEO of LithiumBank Resources Corp, Director of GMG, Director of Spectre Capital Corp, and Director of Verses Technologies Inc.

Mr. Shewchuk began his career as an Equities Trader on the floor of the Alberta Stock Exchange in 1995 for Yorkton Securities Inc. He became a licensed broker at Yorkton in 1998 and worked on the Equities desk through 2004. Mr. Shewchuk joined Standard Securities Capital Corporation where he became Chairman in 2006. He merged Standard

Securities with Wolverton Securities Ltd in 2009 and became a Director of Wolverton Securities until 2016 when it was purchased by PI Financial Corp.

Mr. Shewchuk devotes approximately 10% of his time to the Company.

William Ollerhead, Proposed Director, Age 55

Mr. Ollerhead is the principal of Ollerhead Capital, a division of the private investment, management services, and corporate finance consulting company Chunkerhead Ltd., where he serves as the Managing Director. Mr. Ollerhead has over 30 years of experience in the Canadian capital markets and corporate finance field. He presently serves on the board of directors of Thermal Energy International Inc. (TSX-V: TMG), where he is the chair of its audit committee. He is also a co-founder, and the President and CEO, and a Director, of both Cuspis Capital Ltd. (TSXV:CUSP.P), and, Cuspis Capital II Ltd. (TSX-V:CCII.P). Additionally, Mr. Ollerhead has served on the boards of both public and private companies, and not-for-profit organizations, in various capacities – including chairman, director, and as a member and chair of audit committees.

In 1997, Mr. Ollerhead founded Ollerhead Capital Corporation, which, until its sale in December of 2009, provided corporate finance advisory services relating to the structuring and arranging of approximately $800 million worth of private debt transactions. Prior to 1997, Mr. Ollerhead worked for an independent full-service investment dealer as a member of both its corporate finance, and fixed income sales and trading departments. Prior to that, he worked with two Canadian institutional investors, MetLife and Sun Life, latterly co-administering approximately $2 billion in private placement investments. Mr. Ollerhead began his career in capital markets in 1989, as the equity analyst for the Canadian equity portfolio of MetLife’s Canadian subsidiary. His investment and capital markets experience has provided him with exposure to, and knowledge of, a broad range of industries.

Mr. Ollerhead holds a B.A. with a concentration in Statistics from the University of Western Ontario, and an M.B.A. with a concentration in Finance from McGill University. In 2010, he completed the Directors Education Program at the Institute of Corporate Directors at University of Toronto’s Rotman School of Management.

Mr. Ollerhead is currently not a director of the Company, and his appointment as a director of the Company, as set forth in the Arrangement Agreement, is contingent upon the closing of the Qualifying Transaction. Given that Mr. Ollerhead is not currently a director of the Company, and since his appointment as a director of the Company will not occur until the closing of the Qualifying Transaction and the listing of the GMG Shares on the TSXV, the Company does not believe that Mr. Ollerhead is liable under this Prospectus as there can be no assurance that Mr. Ollerhead will become a director of the Company.

If and when he is appointed, Mr. Ollerhead will devote such time as is required in connection with his services as a director of the Company.

Share Ownership by Directors and Officers

As a group, the Company’s current directors and executive officers beneficially owned, directly or indirectly, or exercised control over 1,032,000 GMG Shares or 38.13% of the issued and outstanding GMG Shares on a non-diluted basis. The statement as to the number of ordinary shares beneficially owned, directly or indirectly, or over which control or direction is exercised by the directors and officers of the Company, as a group, is based upon information furnished by the directors and executive officers.

Corporate Cease Trade Orders

To the best of the Company’s knowledge, no existing or proposed director, officer of the Company, nor any shareholder holding sufficient securities of the Company to affect materially the control of the Company is, or within the ten years prior to the date hereof has been, a director or CEO or CFO of any corporation that, while that person was acting in the capacity of director or CEO or CFO of that corporation, was the subject of a cease trade order or similar order or an order that denied the corporation access to any exemption under securities legislation for a period of more than 30 consecutive days.

Penalties or Sanctions

No existing or proposed director or officer of the Company, nor any shareholder holding sufficient securities of the Company to materially affect control of the Company has been subject to any penalties or sanctions imposed by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority or has entered into a settlement agreement with a Canadian securities regulatory authority or been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor making an investment decision.

Bankruptcies

Other than as disclosed below, no existing or proposed director or officer of the Company, nor any shareholder holding sufficient securities of the Company to affect materially the control of the Company, has, within the ten years before the date of this Prospectus, been a director or executive officer of any company that, while the person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.

William Ollerhead became a director of BioExx Specialty Proteins Ltd. (“ BioExx ”) in June 2008, and resigned on July 30, 2013. More than two months after Mr. Ollerhead’s resignation, and following a change in management of BioExx, the company filed for and obtained an order from the Ontario Superior Court of Justice (Commercial Division) under the Companies’ Creditors Arrangement Act on October 1, 2013.

No existing or proposed director or officer of the Company, nor any shareholder holding sufficient securities of the Company to affect materially the control of the Company, nor any personal holding company of any such person has, within the ten years before the date of this Prospectus become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or been subject to or instituted any proceedings, arrangements or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of that person.

Conflicts of Interest

The directors of the Company are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interests, which they may have in any project or opportunity of the Company. If a conflict of interest arises at a meeting of the Board of Directors, any director in a conflict will disclose his interest and abstain from voting on such matter.

Other than as disclosed herein, there are no known existing or potential conflicts of interest among the Company, its promoters, directors and officers or other members of Management of the Company or of any proposed promoter, director, officer or other member of Management as a result of their outside business interests except that certain of the directors and officers serve as directors and officers of other companies, and therefore it is possible that a conflict may arise between their duties to the Company and their duties as a director or officer of such other companies. See “Risk Factors ”.

EXECUTIVE COMPENSATION

Prior to obtaining a receipt for this Prospectus from securities regulatory authorities in Ontario, British Columbia, Saskatchewan and Alberta, the Company was not a reporting issuer in any jurisdiction. As a result, certain information required by Form 51-102F6V – Statement of Executive Compensation has been omitted pursuant to Section 1.3(8) of Form 51-102F6V.

Compensation of Named Executive Officers

Securities legislation requires the disclosure of the compensation received by each Named Executive Officer of the Company. “Named Executive Officer” is defined by securities legislation to mean: (i) the CEO; (ii) the CFO; (iii) each of the three most highly compensated executive officers of the Company, including any of its subsidiaries, or the

three most highly compensated individuals acting in a similar capacity, other than the CEO and CFO, at the end of the most recently completed financial year whose total compensation was, individually more than $150,000 for that financial year; and (iv) each individual who would be a “Named Executive Officer” under paragraph (iii) but for the fact that the individual was neither an executive officer of the Company or its subsidiaries, nor acting in similar capacity, at the end of the most recently completed financial year. As of the date of this Prospectus, the Company has the following Named Executive Officers (collectively, the “ Named Executive Officers ” or “ NEOs ”):

a. Craig Nicol, Founder, Managing Director, CEO and Corporate Secretary; and
b. Christopher Ohlrich, Executive Director and CFO.

Compensation Discussion and Analysis

GMG does not yet have a compensation committee or a formal compensation policy. GMG relies solely on the directors to determine the compensation of the Named Executive Officers. In determining compensation, the directors consider industry standards and GMG’s financial situation but does not currently have any formal objectives or criteria. The performance of each executive officer is informally monitored by the directors, having in mind the business strengths of the individual and the purpose of originally appointing the individual as an officer.

Option-Based Awards

As at the date of this Prospectus, GMG has granted the directors, executive officers, employees and consultants an aggregate of 249,574 stock options.

Summary Compensation Table

The summary compensation table sets the compensation anticipated to be paid to the individuals who are the Directors and Named Executive Officers once the Company becomes a reporting issuer. The anticipated compensation set out herein is based on current conditions in the Company’s industry and the Company’s financial position and is as such subject to adjustments based on changing market conditions. To date several executives have been remunerated below market rates due to capital constraints and the Company intends to conduct a review of remuneration levels during 2021 to bring compensation levels in line with market and to ensure retention of key employees.

While adjustments may be subject to several unknown variables and factors, one known parameter is the increase in statutory superannuation guarantee payment, which is expected to go up from 9.5% of salary to 10%. This will result in an increase of salaries and wages as shown in the following table by 0.457% from the month of July 2021 onwards.

	Salary
	consulting		Committee or		Value of all	Total

	fee,	Bonus	Meeting Fees	Value of	Other	Compensation
				Perquisites
	retainer or				Compensation(1)
		($)
Name and	commission		($)	($)	($)	($)
Position	($)


Craig Nicol Founder, Managing Director, Chief Executive Officer and Corporate Secretary	$250,000	$0	$0	$0	$24,950	$274,950
Christopher Ohlrich Executive Director and Chief Financial	$215,000	$0	$0	$0	$21,625	$236,625

	Salary
	consulting		Committee or		Value of all	Total

	fee,	Bonus	Meeting Fees	Value of	Other	Compensation

	retainer or			Perquisites	Compensation(1)
		($)
Name and	commission		($)	($)	($)	($)
Position	($)


Officer

(1) Includes the compulsory superannuation contribution at 9.5% of salary and a telephone expenses allowance of $1,200 per year for each of the above Named Executive Officers.

Incentive Plan Awards

The Company intends to continue the grant of Options (as defined herein). In considering new grants to directors and executive officers, the Board will consider the number of Options, if any, previously granted to each director and executive officer.

Pension Plan Benefits

The Company makes superannuation contributions for the benefit of Australian resident employees as required by legislation to complying superannuation funds nominated by the employee, which is currently 9.5% of salary.

Termination and Change of Control Benefits

The Company has entered into Executive Employment Agreements with the following executive officers (each, an " Executive "): Craig Nicol and Christopher Ohlrich. The material terms of the signed and completed Executive Employment Agreements, are set forth below:

Salary: Craig Nicol’s annual base salary is $250,000; and Christopher Ohlrich’s annual base salary is $215,000.
Superannuation: The Company will make the following annual superannuation contributions on behalf of the Executives: Craig Nicol - $23,750; and Christopher Ohlrich - $20,425.
Allowances: Each Executive is entitled to $100 per month for mobile phone allowance and reasonable professional association membership fees, and may be reimbursed for all authorized travel, accommodation and other business related expenses reasonably incurred in the performance of the Executive's duties.
Annual Leave: The Executive is entitled to four weeks annual leave and other statutory leave in accordance with the provisions under the Fair Work Act (Australia).
Termination for Reasons Other Than Cause : Either party may terminate the Executive Employment Agreement by providing the other party with 7 days’ prior written notice, or such shorter time as may be agreed by the Executive and GMG. On or before the expiry of such written notice or agreed upon shorter time, GMG will pay to the Executive the following amounts, if applicable, less any deductions of outstanding advances or other payment due to the Company by the Executive: i) the outstanding annual remuneration that is due and owing on to date of termination; (ii) any amount payable in respect of accrued and undertaken annual leave; (iii) any amount to which they are entitled in respect of accrued and undertaken long service leave; and (iv) any reasonable out of pocket expenses that the Executive has incurred and would have been reimbursable in the event the employment with GMG had continued. The Company may at its discretion make payment to the Executive in lieu of part of or all of such notice period for an amount equal to the proportion of the Executive's annual salary.

Termination for Cause : GMG may immediately terminate the Executive Employment Agreement by providing the Executive with written notice, if the Executive: i) commits any act which may detrimentally affect the Company including, but not limited to, an act of dishonesty, fraud, willful disobedience, serious misconduct or breach of duty; ii) willfully, persistently and materially breaches any of the provisions of the Executive Employment Agreement; iii) fails to comply with a material provision of the policies or procedures of GMG as determined from time to time; iv) refuses or in any way materially fails to perform the Executive's duties or to observe or perform any of the provisions in the Executive Employment Agreement that bind the Executive within 30 days of receiving notice from GMG to do so; v) accepts any form of commission or payment from a third party for services rendered by GMG which was not pre-approved in writing by the board of directors of GMG; vi) is charged with, or convicted, of any criminal offence which, in the opinion of the board, may embarrass or bring the Executive or GMG into disrepute; vii) is or becomes totally or permanently disabled; or viii) is of unsound mind or becomes liable to be dealt with under any law relating to mental health. If the Executive Employment Agreement is terminated immediately in accordance with its terms, the Company is not required to provide a notice period and the effective date of termination will be the date that the Company provides written notice of immediate termination to the Executive.
Change of Control : If a Change of Control occurs during an Executive’s employment, and at any time within eighteen (18) months of that Change of Control having occurred, the Executive is not required to continue in the position noted in their Executive Employment Agreement and is not offered employment in an equivalent position, then GMG will pay to the Executive a lump sum payment in the amount of twenty-four (24) months of base salary in addition to any other entitlements the Executive may have accrued up to that such time. For the purposes of the Executive Employment Agreements, a " Change of Control " means where a person or a person and its associates by itself or together with its associates acquires 50% or more of the Voting Shares (as such term is defined in Section 9 of the Corporations Act 2001 (Australia)) of the Company.

The Executives would be entitled to the following payments by the Company in the event of a Change of Control, excluding any potential payment for each completed year of service with any Related Body Corporate: Craig Nicol - $500,000 (24 months annual base salary); and Christopher Ohlrich - $430,000 (24 months annual base salary).

Non-Competition and Non-Solicitation : The Executive is subject to 6-month non-solicitation clause in relation to the employees of GMG and the employees of related entities of GMG. The Executive is also subject to non-competition restrictions which apply during the course of employment and within twelve (12) months following the termination of the Executive Employment Agreement.

DIRECTOR COMPENSATION

The following table sets out the cash compensation paid to the individuals who are the Directors of GMG and not Named Executive Officers:

	Salary
	consulting
	fee,		Committee or		Value of all	Total
	retainer or	Bonus	Meeting Fees	Value of	Other	Compensation
	commission			Perquisites	Compensation
Name and Position	($)	($)	($)	($)	($)	($)
Guy Outen Chair and Non- Executive, Independent Director	Nil	Nil	Nil	Nil	Nil	Nil
Robbert De Weijer(1) Executive Director	44,000	Nil	Nil	Nil	Nil	44,000
Robert William Shewchuk Non-Executive Director	Nil	Nil	Nil	Nil	Nil	Nil

(1) Of the total compensation paid to Mr. De Weijer, the total amount of $44,000 was paid to Mr. De Weijer in respect of his part-time executive services performed from November 1, 2019 to June 30, 2020 pursuant to a Contract for Services. For the financial year ending June 30, 2021, the anticipated cash compensation for Mr. De Weijer is $66,000.

GMG contemplates that each independent director, if any, will continue to be entitled to participate in any security based compensation arrangement or other plan adopted by GMG with the approval of the Board and/or GMG’s shareholders, as may be required by applicable law or Exchange policies.

Post-listing on the Exchange, the Directors propose to undertake a review of Director and Executive compensation. This may result in Directors and Executives receiving compensation in line with current market practice.

Directors’ and Officers’ Liability Insurance

GMG carries directors’ and officers’ liability insurance for any of its directors or officers.

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

As at the date of this Prospectus, none of the directors and executive officers of GMG or associates of such persons is indebted to GMG or another entity where the indebtedness is the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by GMG.

STOCK EXCHANGE LISTING

This Prospectus is being filed in the provinces of Ontario, British Columbia, Saskatchewan and Alberta to qualify the Company as a reporting issuer in Ontario, British Columbia, Saskatchewan and Alberta. There is no distribution or offering being made pursuant to this Prospectus.

As at the date of this Prospectus, the Company does not have any of its securities listed or quoted, has not applied to list or quote any of its securities, and does not intend to apply to list or quote any of its securities, on the Toronto Stock Exchange, a U.S. marketplace, or a marketplace outside Canada and the United States.

GMG received conditional approval to list the GMG Shares on the Exchange on March 24, 2021 . The listing of the GMG Shares will be subject to the Company fulfilling the listing requirements of the Exchange, which cannot be guaranteed.

AUDIT COMMITTEE AND CORPORATE GOVERNANCE

Audit Committee

The Company formed an Audit Committee (the “ Audit Committee ”) on January 11, 2021. The Audit Committee is currently comprised of Guy Outen, Robert Shewchuk and Robbert De Weijer, all of whom are financially literate as such term is defined in NI 52-110. Guy Outen is considered independent. Robbert De Weijer, by virtue of his position as Executive Director of the Company, and Robert William Shewchuk, by virtue of his receipt of securities of the Company (Options) pursuant to capital raising advisory work , are considered not independent as such term is defined in NI 52-110. In connection with closing of the Arrangement and prior to listing of the GMG Shares, the Company expects to appoint Mr. William Ollerhead, a current director of Cuspis, as a director of the Company. If Mr. Ollerhead is appointed, it is anticipated that Mr. Ollerhead will replace Robbert De Weijer as a member of the Audit Committee. Mr. Ollerhead will be considered independent as such term is defined in NI 52-110 and as a result of Mr. Ollerhead's appointment, the Audit Committee the majority of the Audit will be independent. A description of the education and experience of each Audit Committee member that is relevant to the performance of his responsibilities as an Audit Committee member may be found above under the heading “Executive Officers and Directors”.

The Audit Committee is responsible for reviewing the Company’s financial reporting procedures, internal controls and the performance of the financial management and external auditors of the Company. The Audit Committee also has a responsibility to review the annual audited financial statements and make recommendations to the Board. The Company is relying on the exemption set out in section 6.1 of NI 52-110, relating to the composition of audit committees for venture issuers. A copy of the Audit Committee’s proposed charter is set out below.

Audit Committee Charter

1. Purpose

1.1. The Audit Committee is responsible for the policies and practices relating to integrity of financial and regulatory reporting, as well as internal controls to achieve the objectives of safeguarding of corporate assets; reliability of information; and compliance with policies and laws. Within this mandate, the Audit Committee’s role is to:
(a) support the Board of Directors (Board) in meeting its responsibilities to shareholders;
(b) verify the independence of the external auditor;
(c) facilitate effective communications between Management and the external auditor and provide a link between the external auditor and the Board; and
(d) increase the credibility and objectivity of the Company’s financial reports and public disclosure.
1.2. The Audit Committee will make recommendations to the Board of Directors regarding items relating to financial and regulatory reporting and the system of internal controls following the execution of the Committee’s responsibilities as described herein.
1.3. The Audit Committee will undertake those specific duties and responsibilities listed below and such other duties as the Board from time to time prescribe.

2. Role and Responsibilities

The Audit Committee is not a policy-making body nor does it have substantive executive function. However, it assists the Board in developing board policy and monitoring corporate activity within the scope of its remit, and making recommendations to the Board for resolution. The role of the Audit Committee includes assisting the Board with the company’s governance and exercising of due care, diligence and skill in relation to:

(a) reporting financial information to users of financial reports;
(b) application of accounting policies;
(c) financial management;
(d) the internal control system;
(e) the risk management system;
(f) the performance management system;
(g) business policies and practices;
(h) protection of the company’s assets;
(i) compliance with applicable laws, regulations, standards and best practice guidelines.

Other committee objectives include:

(j) improving the credibility and objectivity of the accountability process, including financial reporting;
(k) overseeing the effectiveness of the internal and external audit functions and providing a forum for communication between the board and the internal and external auditors;
(l) ensuring the independence of the external auditor;
(m) providing a structured reporting line for internal audit and monitoring the objectivity and independence of the internal auditor;
(n) assuring the quality of internal and external reporting of financial and non-financial information;
(o) ensuring an ethical culture is embedded throughout the company.

3. Membership

3.1.
Each member of the Audit Committee must be a director of the Company.
3.2. The Board of Directors will appoint the Audit Committee members and the Chair of the committee, usually on the recommendation of the Nominating Committee, if there is one.
3.3. The Audit Committee will consist of at least three members, and usually no more than five members, the majority of whom are neither officers nor employees of the Company or any of its affiliates.
3.4. Each Audit Committee member will be financially literate and the majority will be independent.
3.5. The membership of the Audit Committee will be reviewed annually by and will serve at the discretion of the Board.
3.6. At least one member of the Audit Committee will have relevant qualifications and experience – for example, a qualified accountant holding a current accounting qualification, CPA or CA, or a finance professional with experience of financial and accounting matters.
3.7. The Chair of the committee must be non-executive and independent. The Board Chair is not excluded from being the Audit Committee Chair.

4. Invitees

Other people may attend meetings of the Audit Committee by invitation, for example the:

Chief Executive Officer;
Chief Financial Officer;
Company Secretary;
head of internal audit if such exists;
external audit provider.

They may take part in the business and discussions but have no voting rights. Sometimes all executive and Management personnel will be asked to leave the meeting because the committee requires a closed session with or without the external audit provider.

5. Authority

5.1.
The Board authorises the Audit Committee, through the Audit Committee Chair, to:
(a) oversee the appointment, compensation and work of any registered company auditor employed by the organisation;
(b) resolve any disagreements between Management and the auditor on financial reporting;
(c) pre-approve all auditing and non-audit services;
(d) retain independent counsel, accountants or others to advise the audit committee or assist in the conduct of an investigation;
(e) seek any information it requires from employees directed to co-operate with the Audit Committee’s requests, or from external parties.

6. Meetings

6.1. A quorum will be more than half of the members. In the Chair’s absence, the members who are present will select a Chair for that particular meeting.
6.2. The Audit Committee will meet at least four times a year and hold extra meetings as required. A request for a meeting from the internal or external auditors must be met.
6.3. All Audit Committee members are expected to attend each meeting in person or by other approved means such as teleconferencing or video conferencing.
6.4.
The notice and agenda of a meeting will include relevant supporting papers.
6.5. The Audit Committee may invite other people to attend a meeting, consult other people or seek any information considered necessary to fulfil its responsibilities.

The members may meet separately with auditors.

7. Voting

Matters will generally be decided by consensus or, if a consensus cannot be reached, by a majority of votes from the members present.

8. Conflicts of interest

Committee members will be invited to disclose conflicts of interest at the start of each meeting. Ongoing conflicts of interest need not be disclosed at each meeting once they have been acknowledged. Where members or invitees are deemed to have a real or perceived conflict of interest they will be excused from committee discussions about the issue where a conflict exists.

9. Secretariat duties

The company secretary or another appropriate, designated person will act as secretary to the audit committee. The secretary will help the Chair to develop and distribute the agenda, papers, minutes and calendar.

10. Reporting to the board

The Chair of the Audit Committee is to report to the Board following each committee meeting. The Chair may distribute a copy of the minutes supplemented with other necessary information, including recommendations requiring board action and/or approval. The Chair is to organise the information relating to the Audit Committee to be included in the Company’s annual report.

11. Minutes

Minutes must be prepared, approved by the Chair and circulated to the members within two weeks of a committee meeting. The minutes must be ratified and signed by the Chair at the following meeting.

12. Reviews

The Audit Committee will review its performance on an annual basis. The review may be conducted as a self-assessment and will be coordinated by the Chair. The assessment may seek input from any person. Training needs will be monitored by the Chair. The Audit Committee should review this charter and its composition annually to ensure that it remains consistent with the Board’s objectives and responsibilities. The Board should consider the committee’s review and either approve or further review the committee’s charter and/or composition.

Audit Committee Oversight

Since the formation of the Audit Committee in January 2021, there has not been a recommendation of the Audit Committee to nominate or compensate an external auditor which was not adopted by the Company’s Board.

Pre-Approval Policies and Procedures

The Audit Committee will have authority and responsibility for pre-approval of all non-audit services to be provided to the Company or its subsidiary entities by the external auditors or the external auditors of the Company’s subsidiary entities, unless such pre-approval is otherwise appropriately delegated or if appropriate specific policies and procedures for the engagement of non-audit services have been adopted by the Audit Committee.

Reliance on Certain Exemptions

Since the commencement of the Company’s most recently completed financial year, it has not relied on an exemption, in whole or in part, granted under Part 8 of NI 52-110, being that the Company has not relied on any exemption either (i) granted by a securities regulatory authority or regulator, in whole or in part, subject to such conditions or restrictions

as may be imposed in the exemption, or (ii) in Ontario, granted by the regulator.

External Auditor Service Fees by Category

In connection with the Company’s last fiscal year end, the Company incurred audit fees as set out in the table below. In the table, “audit fees” are fees billed by the Company’s external auditor for services provided in auditing the Company’s annual financial statements. “Audit-related fees” are fees not included in audit fees that are billed by the auditor for assurance and related services that are reasonably related to the performance of the audit review of the Company’s financial statements. “Tax fees” are fees billed by the auditor for professional services rendered for tax compliance, tax advice and tax planning. “All other fees” are fees billed by the auditor for products and services not included in the foregoing categories. All amounts in the table are expressed in Australian dollars.

Financial Year Ending	Audit Fees ($)	Audit Related Fees	Tax Fees	All Other Fees
June 30, 2020	12,000	Nil	Nil	Nil
June 30, 2019	12,000	Nil	Nil	Nil

Statement of Corporate Governance Practices

National Policy 58-201 – Corporate Governance Guidelines establishes corporate governance guidelines to be used by issuers in developing their own corporate governance practices. Corporate governance relates to the activities of the Board, the members of which are elected by and are accountable to the shareholders, and takes into account the role of the individual members of Management who are appointed by the Board and who are charged with day-to-day management of the Company.

The Board is committed to ensuring that the Company has an effective corporate governance system, which adds value and assists the Company in achieving its objectives.

The Company’s approach to corporate governance is set forth below.

Mandate of the Board

The Board assumes responsibility for the stewardship of the Company and the enhancement of shareholder value. The Board is responsible for:

ensuring that Management develops and implements a strategic plan that takes into account market realities and regulatory compliance;
upholding a comprehensive policy for communications with shareholders and the public at large;
developing and formalizing the responsibilities for each member of the Board, including the responsibilities of the Chief Executive Officer vis-à-vis corporate objectives;
ensuring that the risk management of GMG is prudently addressed; and
overseeing succession planning for management.

The frequency of meetings of the Board and the nature of agenda items may change from year to year depending upon the activities of GMG. However, the Board meets at least quarterly and at each meeting there is a review of the business of GMG.

The Board of the Company facilitates its exercise of independent supervision over Management through frequent

meetings of the Board being held to obtain an update on significant corporate activities and plans, both with and without members of the Company’s Management (except for members of Management who are directors) being in attendance.

Composition of the Board

The Board is currently composed of five (5) directors, of which Guy Outen (Chair) is considered to be an independent director. Craig Nicol, by virtue of his position as Chief Executive Officer and Corporate Secretary of the Company, Christopher Ohlrich, by virtue of his position as Chief Financial Officer of the Company, Robbert De Weijer, by virtue of his position as Executive Director of the Company, and Robert William Shewchuk, by virtue his receipt of securities of the Company (Options) pursuant to capital raising advisory work, are considered not independent as such term is defined in NI 52-110.

In connection with closing of the Arrangement, the Company expects to appoint Mr. William Ollerhead, a current director of Cuspis, as a director of the Company. Mr. Ollerhead will be considered independent as such term is defined in NI 52-110. For this purpose, a director is independent if he or she has no direct or indirect “material relationship” with GMG. A “material relationship” is a relationship which could, in the view of the Board, be reasonably expected to interfere with the exercise of the director’s independent judgment. An individual who has been an employee or executive officer of the Company within the last three years is considered to have a material relationship with the Company.

Directorships

The following current directors currently serve on the following boards of directors of other public companies:

		Name of
	Name of Other
Name		Exchange or	Position	From	To
	Reporting Issuers
		Market


Robert William Shewchuk	Spectre Capital Corp.	Exchange	Director	September 2018	Present

Orientation and Education

GMG will provide new directors with an orientation program upon joining the Company that includes copies of relevant financial, technical, scientific and other information regarding its products and meetings with Management.

Board members are encouraged to communicate with Management and auditors, to keep themselves current with industry trends and developments, and to attend related industry seminars. Board members have full access to the Company’s records.

Ethical Business Conduct

While GMG has not adopted a written code of business conduct and ethics, the Board will from time to time discuss and emphasize the importance of matters relating to conflicts of interest, protection and proper use of corporate assets and opportunities, confidentiality of corporate information, compliance with laws and the reporting of any illegal or unethical behavior.

Nomination of Directors

It is the view of the Board that all directors, individually and collectively, should assume responsibility for nominating directors. The Board has therefore not seen it as necessary to constitute a separate nominating committee. Instead the Board is responsible for identifying and recommending potential nominees for directorship and senior Management. The Board will consider its size each year when it considers the number of directors to recommend to the shareholders

for election at the annual meeting of shareholders, taking into account the number required to carry out the Board’s duties effectively and to maintain a diversity of views and experience.

New nominees must have a track record in general business management, special expertise in an area of strategic interest to the Company, the ability to devote the time required, shown support for the Company’s mission and strategic objectives, and a willingness to serve.

Compensation

Compensation matters are currently determined by the entire Board. The Board is responsible for reviewing the compensation plans and severance arrangements for Management, to ensure they are commensurate with comparable companies. It is intended to review the compensation arrangements for Board and Executive Management as the company financially matures to ensure that GMG has a plan for continuity of its officers and a compensation plan that is motivational and competitive.

Assessments

The Board and each individual director will regularly assess their effectiveness and contribution. The assessment will consider:

in the case of the Board, its mandate and charter; and
in the case of an individual director, the applicable position description(s), if any, as well as the competencies and skills each individual director is expected to possess.

RISK FACTORS

An investment in the GMG Shares involves a high degree of risk and should be considered speculative. An investment in the GMG Shares should only be undertaken by those persons who can afford the total loss of their investment. You should carefully consider the risks and uncertainties described below, as well as other information contained in this Prospectus, including the financial statements and accompanying notes, appearing elsewhere in this Prospectus, before buying GMG Shares. The risks and uncertainties below are not the only ones GMG faces. Additional risks and uncertainties not presently known to GMG or that GMG believes to be immaterial may also adversely affect GMG’s business. If any of the following risks occur, GMG’s business, financial condition and results of operations could be seriously harmed, and you could lose all or part of your investment.

The Arrangement Agreement May Be Terminated in Certain Circumstances

Each of GMG and Cuspis has the right to terminate the Arrangement Agreement and Arrangement under certain circumstances. Accordingly, there is no certainty, nor can GMG or Cuspis provide any assurance, that the Arrangement Agreement will not be terminated before the completion of the Proposed Qualifying Transaction.

No Certainty That All Conditions Precedent to the Arrangement Will Be Satisfied

The completion of the Proposed Qualifying Transaction is subject to a number of conditions precedent, certain of which are outside the control of GMG and Cuspis, including receipt of the final order for the Arrangement and approval by Cuspis Shareholders of the Arrangement. There can be no certainty, nor can GMG or Cuspis provide any assurance, that these conditions will be satisfied or, if satisfied, when they will be satisfied.

Assumption of Potential Cost and Potential Termination Fees

Certain costs related to the Proposed Qualifying Transaction, such as legal and accounting fees, must be paid by GMG even if the Proposed Qualifying Transaction is not completed. GMG and Cuspis are each liable for their own costs incurred in connection with the Proposed Qualifying Transaction.

Completion of the Proposed Qualifying Transaction

There are risks associated with the Proposed Qualifying Transaction including (i) that market reaction to the Proposed Qualifying Transaction and the future trading prices of the GMG Shares cannot be predicted; (ii) uncertainty as to whether the Proposed Qualifying Transaction will have a positive impact on the entities involved therein; and (iii) that there is no assurance that required approvals will be received.

COVID-19

While these effects are expected to be temporary, the duration of the disruptions to business internationally and the related financial impact cannot be estimated with any degree of certainty at this time. In addition, the increasing number of individuals infected with COVID-19 could result in an even greater global health crisis that could adversely affect global economies and financial markets, resulting in a protracted economic downturn that could have an adverse effect on the Company’s prospects.

The responses of governmental authorities and corporate entities, including through mandated or voluntary shutdowns, may also lead to a general long-term slow-down in the economy and may lead to disruptions to the Company’s workforce and facilities, customers, sales and operations and supply chain. Measures taken by the governments worldwide and voluntary measures undertaken by the Company with a view to the safety of the Company’s employees, may also adversely impact the Company’s business.

In particular, as a result of the foregoing, COVID-19 could materially and adversely impact the Company’s business, including without limitation, employee health, workforce availability and productivity, limitations on travel, supply chain disruptions, increased insurance premiums, and restrictions to the Company’s ability to conduct its business. While the Company does not currently generate revenue from operations, future revenues and cash resources may be negatively affected and demand for the Company’s products may decrease as partners and potential customers defer expenditure. Any such disruptions or closures could have a material adverse effect on the Company’s business. In addition, parties with whom the Company does business or on whom the Company is reliant may also be adversely impacted by the COVID-19 pandemic which may in turn cause further disruption to the Company’s business. Any long-term closures or suspensions may also result in the loss of personnel or the workforce in general as employees seek employment elsewhere.

The impact of COVID-19 and government responses thereto may also continue to have a material impact on financial results and could constrain the Company’s ability to obtain equity or debt financing in the future, which may have a material adverse effect on its business, financial condition and results of operations.

The Company is actively monitoring the situation and will respond as the impact of the COVID-19 pandemic evolves, which will depend on several factors set out above. The extent to which the pandemic will impact the Company’s operations in the future is highly uncertain and cannot be predicted with confidence as at the date hereof, but could have a material adverse effect on the Company’s business, financial condition and results of operations. These uncertainties include, but are not limited to, the duration of the outbreak, the ability of governments in countries in which the Company conducts business to curtail the spreading of the virus, the economic recovery as well as community and social stabilities. Any of these uncertainties, and others, could have further material adverse effect on the Company’s business and operations.

At this time, is not possible for the Company to predict the duration of the adverse results of the outbreak and its effects on the Company’s business. Risks include, but are not limited to, the ability of the Company to develop and commercialize products and raise funds, the ability of the Company to conduct operations in the event of safety lockdowns, the inability to travel for professionals and contractors involved in production, regional and international

travel and quarantine restrictions within the country, and the disruption of shipping material and samples to and from the Company’s head office.

Stress in the Global Economy

Reduction in credit, combined with reduced economic activity and the fluctuations in the Australian dollar may adversely affect businesses and industries that are exploring the use of graphene and related products, affecting in unpredictable ways than the normal risks associated with prices for GMG’s products. The adverse effects on the capital markets generally make the raising of capital by equity or debt financing much more difficult and the Company is dependent upon the capital markets to raise financing. Any of these events, or any other events causing turmoil in world financial markets, may have a material adverse effect on the Company’s business, operating results and financial condition.

Adverse General Economic Conditions

The unprecedented events in global financial markets in the past several years have had a profound impact on the global economy. Many industries are impacted by these market conditions. Some of the key impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations, high volatility in global equity, commodity, foreign exchange and precious metal markets and a lack of market liquidity. A continued or worsened slowdown in the financial markets or other economic conditions, including but not limited to, consumer spending, employment rates, business conditions, inflation, fuel and energy costs, consumer debt levels, lack of available credit, the state of the financial markets, interest rates and tax rates, trade ‘wars’ or disruptions, may adversely affect the Company’s growth and profitability. Specifically, a global credit/liquidity crisis could impact the cost and availability of financing and its overall liquidity, profits, losses and cash flow, continued recessionary pressures could adversely impact demand for its products, volatile energy, commodity and consumables prices and currency exchange rates would impact its production costs and the devaluation and volatility of global stock markets would impact the valuation of its equity and other securities. These factors could have a material adverse effect on its financial condition and results of operations.

Foreign Operation and Political Risk

The Company conducts business in Australia and Singapore and is considering partnering and selling in other countries. There is no guarantee against any future political, or economic instability in such jurisdictions or neighboring countries that might adversely affect the Company. Risks the Company may face in operating in foreign jurisdictions include unforeseen government actions, acts of god, terrorism, hostage taking, military repression, extreme fluctuations in currency exchange rates, high rates of inflation, labour unrest, the risks of war or civil unrest, expropriation and nationalization, renegotiation or nullification of existing concessions, licenses, permits and contracts, changes in taxation policies, restrictions on foreign exchange and repatriation, and changing political conditions, currency controls, export controls, and governmental regulations that favour or require the awarding of contracts to local contractors or require foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction or other events.

All or any of these factors, limitations, or the perception thereof could impede the Company’s activities, or otherwise have an adverse impact on the Company’s valuation and stock price.

Foreign Exchange Rate Fluctuations

Fluctuations in currency exchange rates, particularly the weakening or strengthening of the Australian dollar against foreign currencies such as the US dollar or Canadian dollar, could have a significant effect on the Company’s results of operations. The Company currently does not engage in any hedging activities in connection with foreign currency requirements.

Currency fluctuations may affect the cash flow which the Company may realize from its financing, since the business will raise money in Canadian dollars, but the functional currency of the Company is Australian dollars.

Financing Requirements

Substantial additional capital may be required for new manufacturing capacity or other purposes. When such additional capital is required, the Company will need to pursue various financing transactions or arrangements, including joint venturing of projects, debt financing, equity financing or other means. Additional financing may not be available when needed or, if available, the terms of such financing might not be favourable to the Company and might involve substantial dilution to existing shareholders. The Company may not be successful in locating suitable financing transactions in the time period required or at all and may not obtain the capital required by other means. A failure to raise capital when needed would have a material adverse effect on the Company’s business, financial condition and results of operations. Any future issuance of GMG Shares to raise required capital will likely be dilutive to shareholders. In addition, debt and other mezzanine financing may involve a pledge of assets and may be senior to interests of equity holders. The Company may incur substantial costs in pursuing future capital requirements, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. The ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the Company’s industry in particular), its status as a new enterprise with a limited history, and/or the loss of key Management personnel. Further, if the demand for graphene and graphene-enhanced products decreases, then potential revenues will likely decrease or not materialise and such decreased revenues may increase the requirements for capital. Failure to obtain sufficient financing will result in a delay or indefinite postponement of development of revenue streams.

Risks Relating to Market Price of GMG Shares and Volatility

GMG Shares do not currently trade on any exchange or stock market. Securities of microcap and small- cap companies have experienced substantial volatility in the past, often based on factors unrelated to the companies’ financial performance or prospects. These factors include macroeconomic developments in North America and globally and market perceptions of the attractiveness of particular industries. The price of the GMG Shares is also likely to be significantly affected by short-term changes in its financial condition or results of operations. Other factors unrelated to GMG’s performance that may affect the price of the GMG Shares include the following: the extent of analytical coverage available to investors concerning its business may be limited if investment banks with research capabilities do not follow the Company; lessening in trading volume and general market interest in the GMG Shares may affect an investor’s ability to trade significant numbers of GMG Shares; the size of the Company’s public float may limit the ability of some institutions to invest in GMG Shares; and a substantial decline in the price of the GMG Shares that persists for a significant period of time could cause the GMG Shares, if listed on an exchange, to be delisted from such exchange, further reducing market liquidity. As a result of any of these factors, the market price of the GMG Shares at any given point in time may not accurately reflect its long-term value. Securities class action litigation often has been brought against companies following periods of volatility in the market price of their securities. The Company may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert Management’s attention and resources. The fact that no market currently exists for the GMG Shares may affect the pricing of the GMG Shares in the secondary market, the transparency and availability of trading prices and the liquidity of the GMG Shares. The market price of the GMG Shares is affected by many other variables which are not directly related to its success and are, therefore, not within its control. These include other developments that affect the market for all comparable securities, the breadth of the public market for GMG’s Shares and the attractiveness of alternative investments. The effect of these and other factors on the market price of the GMG Shares is expected to make the GMG Share price volatile in the future, which may result in losses to investors.

Dilution

Future sales or issuances of equity securities could decrease the value of the GMG Shares, dilute shareholders’ voting power and reduce future potential earnings per GMG Share. The Company may sell additional equity securities in subsequent offerings (including through the sale of securities convertible into GMG Shares) and may issue additional equity securities to finance its operations, acquisitions or other projects. The Company cannot predict the size of future sales and issuances of equity securities or the effect, if any, that future sales and issuances of equity securities will have on the market price of the GMG Shares. Sales or issuances of a substantial number of equity securities, or the perception that such sales could occur, may adversely affect prevailing market prices for the GMG Shares. With any

additional sale or issuance of equity securities, investors will suffer dilution of their voting power and may experience dilution in its earnings per GMG Share.

The Australian R&D Tax Regime May Change, or the Company May Become Ineligible for R&D Incentives in Future.

GMG has obtained substantial income from grants, tax concessions and subsidies. It received approximately $802,000 in fiscal year 2019 and $933,000 in fiscal year 2020 under the Australian R&D tax offset scheme. If this incentive were to be unavailable to GMG going forward, the business may have to raise additional capital from investors, and this may cause further dilution and reduce the returns for existing shareholders.

Operating History

The Company has a limited history of operations and is considered a start-up company. As such, the Company is subject to many risks common to such enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. There is no assurance that the Company will be successful in achieving a return on shareholders’ investment and the likelihood of the Company’s success must be considered in light of its early stage of operations.

Negative Operating Cash Flow

The Company currently has a negative operating cash flow and may continue to have that for the foreseeable future. The Company’s failure to achieve profitability and positive operating cash flows could have a material adverse effect on its financial condition and results of operations.

Use of Available Funds

The Company intends to allocate the available funds as described under “ Use of Available Funds ” in this Prospectus. However, subject to using the available funds as described therein, Management of the Company will have discretion in the actual application of the available funds and the timing of their expenditure, and may elect to allocate proceeds differently from that described in “ Use of Available Funds ” if it is believed it would be in the best interests of the Company to do so as circumstances change. The results and the effectiveness of the application of the proceeds are uncertain. The failure by Management of the Company to apply these funds effectively could have a material adverse effect on the business of the Company.

No Dividends Expected for Foreseeable Future

The Company intends to retain earnings, if any, to finance the growth and development of its business and does not intend to pay cash dividends on GMG Shares in the foreseeable future. The payment of future cash dividends, if any, will be reviewed periodically by the Company’s Board and will depend upon, among other things, conditions then existing including earnings, financial condition and capital requirements, restrictions in financing agreements, business opportunities and conditions and other factors. See “ Dividends ”.

Going Concern

The Company’s Annual Financial Statements and Interim Financial Statements, incorporated by reference herein, have been prepared on a going concern basis which contemplates the realization of assets and the payment of liabilities in the ordinary course of business. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due. The Company’s ability to continue as a going concern is dependent upon its ability to attain profitable operations and generate funds therefrom, and to continue to obtain borrowings or issue equity from third parties sufficient to meet current and future obligations. In the event the Company is at any point unable to continue as a going concern, this would have an adverse impact on the Company’s business, financial condition and operating results.

Failure of the Thermal XR Powered by GMG Graphene Offering and Other Products

In the absence of other product developments maturing, the Company’s near-term commercial and financial success will likely be significantly influenced by the success of its most advanced customer offering, Thermal XR powered by GMG Graphene, which is expected to start generating revenue in the near term, or other near term products such as G Lubricant concentrates. As of now, only a number of trials have taken place and only short-term performance improvement data is available. There is no guarantee that these products will produce material energy savings or any energy savings for customers at all. The future success of this customer solution depends upon the market response to the effectiveness of the solution and GMG being able to build and expand its commercial operations in Australia, and other international markets. If the Company fails to penetrate available markets in a timely manner, the Company may not be able to expand its markets and grow revenue, the value of the Company may decline, and investors may lose money.

Technology May Not Be Effectively Commercialized

Most of the Company’s products and solutions are currently in the research and development, and commercialization phase, at various stages of progression. There is a risk that the technology and the Company's products will not perform as expected (e.g. lubricants, coolants, G+AI Batteries) in certain applications and therefore, the Company may encounter delays to commercialization or may run the risk that the technologies will never be successfully commercialized. This means that the Company may never receive revenues or return on its research and development activities.

Intellectual Property Protection

The Company cannot provide any assurance that any patent or other intellectual property applications will be approved in future. Even if they are approved, such patents, trademarks or other intellectual property registrations may be successfully challenged by others or invalidated. The Company’s success and ability to compete are substantially dependent on technologies and processes which it will need to protect through a combination of patent, copyright, trademark law or alternatively keep confidential as ‘trade secrets’.

There can be no assurance that competitors will not seek to apply for and obtain trademarks and trade names that will prevent, limit or interfere with the Company’s processes or marketing. There can be no assurance that the Company will have the financial resources to defend its patents, trademarks, and copyrights from infringement or claims of invalidity now or in future. Litigation may be necessary in the future to enforce GMG’s intellectual property rights, to protect the Company’s trade secrets, to determine the validity and scope of the proprietary rights of others, or to defend against claims of infringement. Any such litigation could result in substantial costs and diversion of resources and could have a material adverse effect on GMG’s business, operating results, and financial condition. There can be no assurance that the Company’s means of protecting its proprietary rights will be adequate or that competitors will not independently develop similar services or products. Any failure by GMG to adequately protect its intellectual property could have a material adverse effect on its business, operating results and financial condition.

There can be no assurance that any patent applications made by or on behalf of GMG, existing or future, will result in the issuance of patents, that the Company will develop additional proprietary products that are patentable, that any patents or know-how issued or licensed to the Company will provide the Company with any competitive advantages or will not be challenged by any third parties, that the patents of others will not impede the ability of the Company to do business or that third parties will not be able to circumvent the patents assigned or licensed to the Company. Furthermore, there can be no assurance that others will not independently develop similar products, duplicate any of the Company’s products or, if patents or know-how are issued and licensed to GMG, design around the intellectual property licenced by GMG.

Since patent applications are maintained in secrecy for a period of time after filing, and since publication of discoveries in the scientific or patent literature often lags behind actual discoveries, the Company cannot be certain that the inventors of the patents were the first creators of inventions covered by pending applications, or that it was the first to file patent applications for such inventions. There can be no assurance that the Company’s patents, if issued, would be valid or enforceable by a court or that a competitor’s technology or product would be found to infringe such patents.

The Company’s proprietary graphene manufacturing process is a trade secret, which the Company has chosen not to patent. There can be no assurance that the Company will be able to keep its trade secrets, existing or future, confidential.

GMG’s Technology May be Unable to Achieve Broad Market Acceptance and, Consequently, Limit its Ability to Generate Revenue and Profits from New Products.

Even when product development is successful, the Company’s ability to generate significant revenue and profits depends on the acceptance of its products by its customers and end users of the products. The market acceptance of any product depends on a number of factors, including but not limited to awareness of a product's availability and benefits, the price and cost effectiveness of these products relative to competing products; general competition, and the effectiveness of marketing and distribution efforts. Any factors preventing or limiting the market acceptance of GMG’s technology, products or solutions could have a material adverse effect on its business, results of operations and financial condition.

Performance and Scalability

To be successful, the Company will have to successfully scale its internally developed or co-developed products and solutions, while ensuring quality and reliability.

A risk is that the Company cannot continue to maintain or continue to demonstrate product quality. For example, energy savings resulting from the ‘Thermal XR powered by GMG graphene’ customer offering may not continue to provide customers with substantial energy savings in future.

The Company may produce a high-quality prototype but may not be able to develop a scalable production process or seek a suitable licensee. For example, the groundwork done on the G+AI Batteries in partnership with UQ has yielded superior performance results such as high energy density. Despite these results and the research project that has commenced with UQ, GMG may be unable to build a methodology for continuous commercial production of cathode materials for the G+AI Battery. Thus, even if a high-performance technology is developed, there may be challenges associated with scaling production of cathodes or cathode material and commercialising the product.

Even if GMG develops a high-quality product, which can be produced on a large scale, the Company may not be able to satisfy the specification requirements of prospective customers. For example, if GMG successfully develops a G+AI battery, or cathode or cell which is a component of such a battery, it may not satisfy certain requirements of the electric vehicle industry or other target industries.

Graphene Demand Risk

Although sale of graphene powder is not the Company’s core strategy, the Company has and may sell graphene powder to various customers. Graphene is a relatively new product and despite the unique physical and chemical properties of the material, most potential applications are at concept or early development stage. There may be a possibility that research and development in graphene reduces. Also, the industry’s investment and interest in commercializing graphene-enhanced products may decline or altogether stop. This may result in there being no external demand for the Company’s graphene powder.

Graphene Price Fluctuations

The price of graphene may be affected by numerous factors beyond the Company’s control, including levels of supply and demand, global or regional consumptive patterns, increased production due to new graphene developments and improved production methods, currency values and the like. Declining market prices for graphene could materially adversely affect the Company’s future operations and profitability.

Competition

Despite the Company’s efforts to protect the proprietary rights on which the Company’s business is dependent, competitive products may be developed in the future. Competition could adversely affect the Company’s ability to acquire or sustain market share.

Graphene Standard

The graphene standard definition used in the industry in each country has not been finalised and this will likely change and/or evolve through academia, industry, standards organisations, and governments over time. There is no guarantee that GMG’s product(s) can be/will be called ‘graphene’ under any or all the current and future standards and conventions. This may affect the company’s positioning as a supplier of graphene or graphene-enhanced products and solutions. This, in turn, may adversely impact the sales price and or the sales volume of various products and solutions.

Management of Growth

The Company could experience growth that could put a significant strain on each of the Company’s managerial, operational and financial resources. The Company must implement and constantly improve its operational and financial systems and expand, train, and manage its employee base to manage growth. In addition, the Company expects that its operational and management systems will face increased strain as a result of the expansion of the Company’s business. The Company might not be able to effectively manage the expansion of its operations and systems, and its procedures and controls might not be adequate to support its operations. In addition, Management might not be able to make and execute decisions rapidly enough to exploit market opportunities for the expansion of the Company’s business. If the Company is unable to manage its growth effectively, its business, operations, and financial condition will suffer.

Execution of Business Plan

The execution of the Company’s business plan poses a number of challenges and is based on a set of assumptions. The Company may not be able to successfully execute its business plan. If the Company experiences significant cost overruns on its programs, or if its business plan is more costly than it anticipates, certain research and development activities may be delayed or eliminated, resulting in changes or delays to its commercialization plans, or the Company may be compelled to secure additional funding (which may or may not be available) to execute its business plan. The Company cannot predict with certainty its future revenues or results from its operations. Based on future developments, the Company may consider expanding its business beyond what is currently contemplated in its business plan.

Obtaining and Renewing Approvals, Licenses and Permits

In the ordinary course of business, the Company may be required to obtain and renew governmental licenses or permits for its operations, for its products/offerings including for the installation/application of TXR for customers or for the development, construction and commencement of graphene manufacturing projects. Obtaining or renewing the necessary governmental licenses or permits is a complex and time-consuming process involving numerous jurisdictions and potentially involving public hearings and costly undertakings on the Company’s part. The duration and success of the Company’s efforts to obtain and renew licenses or permits are contingent upon many variables not within its control, including the interpretation of applicable requirements implemented by the licensing authority. The Company may not be able to obtain or renew licenses or permits that are necessary to its operations. Any unexpected delays or costs associated with the licensing or permitting process could delay the development or impede the Company’s operations, which could adversely impact its operations and profitability.

Country Risk

The Company is exploring operating in various countries/jurisdictions. Inability to secure product-related (and other) licenses, approvals and permits required in each country may limit or prevent the production, distribution or sale of GMG’s products and solutions in one or more countries or states or territories. Further, the Company may face losses

due to various political, economic, social, technological, environmental and legal aspects of operating in a particular country, state or territory.

Governmental Regulation

The Company’s operations including graphene manufacturing, provision of graphene-enhanced products and solutions such as TXR and product development activities, will be subject to the laws and regulations of Australia and other jurisdictions governing various matters including environmental protection, management and use of toxic substances, management of natural resources, manufacturing, development and production, imports and exports, price controls, taxation, royalties, labour standards and occupational health and safety. The costs associated with legal compliance may be substantial. In addition, possible future laws and regulations, changes to existing laws and regulations (including imposition of more stringent safety standards around the handling of nanomaterials) or more stringent enforcement of current laws and regulations by governmental authorities, could cause additional expense, capital expenditures, restrictions on or suspension of the Company’s operations and planned operations and delays in the Company’s development. Moreover, these laws and regulations may allow governmental authorities and private parties to bring lawsuits based upon damages to property and injury to persons resulting from the environmental, health and safety impacts of its operations. Such legal actions could lead to the imposition of substantial fines, penalties or other civil or criminal sanctions. It may be difficult to strictly comply with all regulations that will be imposed on the Company. The Company will retain competent and well-trained individuals and consultants to assist the Company with compliance with such laws and regulations, however, even with the application of considerable skill GMG may inadvertently fail to comply with certain laws. Failure to comply with laws and regulations could lead to financial restatements, fines, penalties and other material negative impacts on the Company.

Provision of Services

The Company is and will be engaging employees and contractors for the provision of various services in relation to its various products and solutions, including the TXR service offering. There will be various risks with respect to the health and safety of personnel involved in the provision of services. Such personnel may be required to perform hazardous work including working at heights and high voltage electrical work (e.g. work on air conditioners for its TXR application solution), and there will be associated risks. The Company may face potential liabilities or damages associated with failure to perform work safely and effectively.

Operating Hazards, Risks and Insurance

The ownership, operation and development of a manufacturing and production facility involves many risks which even a combination of experience, knowledge and careful evaluation may not be able to mitigate. Other operating risks include environmental hazards, industrial accidents, explosions and third-party accidents, mechanical failure, power interruptions, flooding, earthquakes and periodic interruptions due to inclement or hazardous weather conditions. These occurrences could result in environmental damage and liabilities, work stoppages, delayed production and resultant losses, increased production costs, damage to, or destruction of, manufacturing or production facilities and resultant losses, personal injury or death and resultant losses, asset write downs, monetary losses, claims for compensation of loss of life and/or damages by third parties in connection with accidents (for loss of life and/or damages and related pain and suffering) that occur on company property, and punitive awards in connection with those claims and other liabilities. It is not always possible to fully insure against such risks, and the Company may decide not to take out insurance against such risks as a result of high premiums or other reasons. Should such liabilities arise they could reduce or eliminate any future profitability and result in an increase in costs and a decline in value of the Company’s securities. Liabilities that the Company incurs may exceed the policy limits of insurance coverage or may not be covered by insurance, in which event it could incur significant costs that could adversely impact its business, operations, potential profitability or value. Despite efforts to attract and retain qualified personnel, as well as the retention of qualified consultants, to manage the Company’s interests, even when those efforts are successful, people are fallible and human error could result in significant uninsured losses to the Company.

Environmental Hazards

The Company’s operations will be subject to environmental regulation. Environmental legislation involves strict

standards and may entail increased scrutiny, fines and penalties for noncompliance, stringent environmental assessments of proposed projects and a high degree of responsibility for companies and their officers, directors and employees. Changes in environmental regulation, if any, may adversely impact the Company’s operations and future potential profitability. The Company may be liable for losses associated with such hazards, or may be forced to undertake extensive remedial cleanup action or to pay for governmental remedial cleanup actions, even in cases where such hazards have been caused by previous or existing owners or operators of the property, or by the past or present owners of adjacent properties or by natural conditions. The costs of such cleanup actions may have a material adverse impact on the Company’s operations and future potential profitability.

Employee Recruitment and Retention

Shortages of Critical Parts, Equipment and Skilled Labour

GMG’s ability to acquire critical inputs for graphene and other manufacturing such as input gases, machine consumables, and machine equipment, and skilled labour due to increased worldwide demand, may cause unanticipated cost increases and delays in delivery times, thereby impacting operating costs, capital expenditures and delivery schedules.

Raw Material Price Fluctuations

Gases and chemicals used by the Company and its technologies are subject to market price fluctuations. Market price fluctuations of various inputs, including natural gas, could have a material adverse effect on the Company’s business plan execution. There can be no assurance that the price of the raw materials will not increase in the future.

Delays, Disruptions, or Quality Control Problems in Manufacturing Operations

Any delay, disruption or quality control problems in operations at the current manufacturing facility, and any future manufacturing facilities, could result in the inability to successfully execute the business plan. Several factors could cause delays, disruptions or quality control problems including, but not limited to, equipment malfunctions or failures of equipment, work stoppages or slow-downs, damage or destruction of the facility, or regional power shortages.

GMG continuously seeks to improve its graphene manufacturing process and often various changes are made to the production facility, for example, existing processes may be modified, new processes may be introduced, and new equipment may be commissioned from time to time. Any change in GMG’s processes, people or equipment could cause one or more production errors, requiring a temporary suspension or delay in its production line until the errors can be researched, identified, and properly addressed and rectified.

Also, GMG may look to build a new manufacturing facility to manufacture graphene or graphene-enhanced products. The risk of delays, disruptions and quality control problems are more likely in relation to new production facilities, as the Company would likely modify its engineering and production techniques, and/or expands its capacity.

If GMG should fail to maintain appropriate quality assurance processes could result in increased product failures, loss of customers, increased warranty provisions, logistical costs and delays, and potential damages for breaches of

contracts. Any of these developments could have a material adverse effect on the Company’s business, financial condition, and results of operations.

Dependence on Management and Key Personnel

The Company’s success depends largely upon the continued services of its Executive Officers and other key employees. From time to time, there may be changes in GMG’s executive management team resulting from the hiring or departure of executives, which could disrupt its business. If the Company is unable to attract and retain top talent, its ability to compete may be harmed. The Company’s success is also highly dependent on its continuing ability to identify, hire, train, retain and motivate highly qualified personnel. Competition for highly skilled technical, research and development, management, sales, and other employees is high, and the Company may not be successful in attracting and retaining such personnel. Failure to attract and retain qualified executive officers and other key employees could have a material adverse effect on its business, prospects, financial condition, results of operations, and cash flows.

Information Technology Interruptions or Breaches

The Company’s business operations are managed through a variety of information technology systems. These systems govern all aspects of its operations. Also, GMG uses storage including cloud-based hosting service and physical storage. While the Company has implemented a number of measures to keep its technology systems fully operational and to mitigate the risks associated with a failure of its systems, the Company’s systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, cyber-attacks, security breaches, catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes, acts of war or terrorism, and usage errors by its employees. If the Company’s information technology systems are damaged or cease to function properly, the Company may have to make a significant investment to fix or replace them and the Company may suffer loss of critical data and interruptions or delays in its operations in the interim. Any material interruption in its information technology systems could have a material adverse effect on the Company’s business, prospects, financial condition, results of operations, and cash flows.

Product Liability Lawsuits Against the Company Could Cause the Company to Incur Substantial Liabilities, and it May Be Subject to Product Recalls for Product Defects That Are Self-Imposed or Imposed by Regulators

In the event of a failure of a future product incorporating the Company’s technology, such as an air conditioner, freezer or battery, the Company may be subject to potential product liability lawsuits – including due to but not limited to the nanoscale nature of its products. Under certain circumstances, the Company’s customers may be required to recall or withdraw the products incorporating its technology. Even if a situation does not necessitate a recall or market withdrawal, product liability claims may be asserted against the Company. Even if a product liability claim is unsuccessful, the negative publicity surrounding any assertion that the products caused illness or physical harm could adversely affect the Company's reputation and brand equity. An example of a product liability risk may be in relation to an adverse impact of the TXR application on air conditioners.

Claims and Legal Proceedings

The Company may be subject to claims or legal proceedings covering a wide range of matters that arise in the ordinary course of business activities, including claims relating to ex-employees. These matters may give rise to legal uncertainties or have unfavourable results. The Company will carry liability insurance coverage and mitigate risks that can be reasonably estimated. In addition, the Company may be involved in disputes with other parties in the future that may result in litigation or unfavourable resolution which could materially adversely impact its financial position, cash flow and results of operations.

Control Over Financial Reporting May Not Prevent or Detect Misstatements, and Projections of Any Evaluation of Effectiveness to Future Periods May Be Subject to Changes in Conditions or Deterioration in Compliance with Procedures.

The Company has a limited administrative staff, meaning internal controls which rely on segregation of duties in many

cases are not possible. The Company does not have the resources, size and scale to hire additional staff to address this potential weakness currently. To help mitigate the impact of this, the Company relies on the performance of compensating procedures including senior Management’s review and approval. As a venture issuer, the Company will not be required to certify the design and evaluation of its disclosure controls and procedure (“ DC&P ”) and internal controls over financial reporting (“ ICFR ”), and as such the Company has not completed such an evaluation. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost-effective basis DC&P and ICFR as defined in National Instrument 52-109 ' Certification of Disclosure in Issuers ’ Annual and Interim Filings may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

Conflicts of Interest

Certain directors of the Company also serve as executive officers. Consequently, there is a possibility that a conflict could arise for such directors and officers. Any Company-related decision made by any of these directors and officers involving the Company should be made in accordance with their duties and obligations to deal fairly and in good faith and to act in the best interests of the Company and its shareholders. In addition, each of the directors is required to declare and refrain from voting on any matter relating to which such director may have a conflict of interest.

No Market for the Options and Warrants

The Options, GMG Warrants and Replacement Warrants will not be listed for trading on any stock exchange following the listing and there is no market through which they may be sold. The Company has no intention to apply to any stock exchange for listing of the GMG Warrants and Replacement Warrants. As a result, holders of warrants may not be able to resell any GMG Warrants or Replacement Warrants and if sale is made over the counter, the expected or fair price may not be realised.

Enforcement of Judgments Against Foreign Persons May Not Be Possible

A number of directors of the Company reside outside of Canada. Some or all the assets of such persons may be located outside of Canada. Therefore, it may not be possible for investors to collect or to enforce judgments obtained in Canadian courts predicated upon the civil liability provisions of applicable Canadian securities laws against such persons. Moreover, it may not be possible for investors to effect service of process within Canada upon such persons.

SUBSCRIPTION RECEIPT OFFERING

On March 24, 2021, GMG completed the Subscription Receipt Offering of 3,077,000 Subscription Receipts at a price per Subscription Receipt of C$0.65, for gross proceeds to GMG of C$2,000,050.

Subscription Receipts will be converted into GMG Units immediately prior to listing of GMG’s ordinary shares on the Exchange as part of the Arrangement, with each GMG Unit being comprised of one (1) GMG Split Share and onehalf of one (1/2) GMG Unit Warrant, with each whole GMG Unit Warrant being exercisable into one (1) GMG Split Share at a price of C$1.00 for a period of 18 months from the date of conversion of the Subscription Receipts. All proceeds of the Subscription Receipt Offering are to be held by a subscription receipt agent in trust and to be released to GMG concurrently upon the conversion of the Subscription Receipts into GMG Units. In the event that the Arrangement is not completed and the shares of GMG are not listed on the Exchange, the proceeds of the Subscription Receipt Offering are to be returned to the subscribers therefor.

Upon conversion of the Subscription Receipts, GMG will pay finder’s fees under the Subscription Receipt Offering of $109,755.59 in cash and 161,430 GMG Finder’s Warrants. Each GMG Finder's Warrant will be exercisable into one (1) GMG Split Share at an exercise price of C$0.65 for a period of 18 months from the date of issuance.

All underlying securities to the Subscription Receipts issued under the Subscription Receipt Offering will be subject to a four months and one day hold period from the date of issuance of the Subscription Receipts.

THE PROPOSED QUALIFYING TRANSACTION

The Arrangement Agreement

On December 17, 2020, the Company and Cuspis entered into the Arrangement Agreement, a copy of which has been filed by Cuspis on SEDAR at www.sedar.com as a material contract. The Arrangement will constitute Cuspis’ Proposed Qualifying Transaction, however, it will also result in GMG listing its common shares on the TSXV and Cuspis delisting its common shares from the TSXV.

Pursuant to the terms of the Arrangement Agreement, and subject to certain conditions, including receipt of applicable regulatory and shareholder approvals and the completion of the Cuspis Consolidation, the Company will acquire Cuspis by way of the Arrangement. Immediately prior to closing the Arrangement, the Company will complete the GMG Share Split, meaning the split of the GMG Shares at a ratio of 22 GMG Split Shares for each GMG Share. Pursuant to the Arrangement, holders of Cuspis Shares will receive 0.403 GMG Split Shares in exchange for each Cuspis Share held. Holders of Cuspis Options and Cuspis Warrants will be entitled to receive, upon exercise of a Cuspis Option or Cuspis Warrant for the same aggregate consideration, GMG Split Shares in lieu of the Cuspis Shares otherwise issuable prior to the closing of the Proposed Qualifying Transaction, adjusted in accordance with the terms of the agreements, plans or certificates representing such Cuspis Options and Cuspis Warrants.

As a result of the Proposed Qualifying Transaction, it is expected that the Company will issue approximately:

(a) 6,162,072 GMG Split Shares to the former shareholders of Cuspis;
(b) 291,880 GMG Split Shares to Tri View Capital Ltd. (“ Tri View ”) in respect of an investment advisory agreement between the Company and Tri View; and
(c) 604,500 Replacement Options in exchange for the Cuspis Options outstanding immediately prior to completion of the Proposed Qualifying Transaction.

Upon completion of the Arrangement, and assuming conversion of the Subscription Receipts (including the GMG Finder's Warrants issuable thereunder), there will be a total of up to 69,081,718 GMG Split Shares, 6,095,128 GMG Options and 1,699,930 GMG Warrants issued and outstanding.

The Arrangement Agreement contains certain representations and warranties made by each of Cuspis and the Company in respect of the assets, liabilities, capital, financial position and operations of Cuspis and the Company, respectively. In addition, each of Cuspis and the Company provide covenants which govern the conduct of their operations and affairs prior to the completion of the Arrangement. The Arrangement Agreement contains a number of conditions precedent to the obligations of the Parties thereunder. Unless all of such conditions are satisfied or waived by the Party or Parties for whose benefit such conditions exist, to the extent they may be capable of waiver, the Arrangement will not proceed. There is no assurance that the conditions will be satisfied or waived on a timely basis, or at all.

The following is a summary of certain provisions of the Arrangement Agreement. It does not purport to be complete and is subject to, and is qualified in its entirety by reference to, provisions of the Arrangement Agreement, a copy of which is available under Cuspis profile on SEDAR.com and will be filed by the Company.

Representations and Warranties

The Arrangement Agreement contains representations and warranties made by each of GMG and Cuspis. The assertions embodied in those representations and warranties are solely for the purposes of the Arrangement Agreement. Certain representations and warranties may not be accurate or complete as of any specified date because they are subject to a standard of materiality or are qualified by a reference to the concept of a “Material Adverse Effect” (as defined in the Arrangement Agreement). Therefore, the representations and warranties in the Arrangement Agreement should not be relied on as statements of factual information.

The Arrangement Agreement contains representations and warranties of GMG and the Cuspis relating to certain matters including, among other things: incorporation; capitalization; absence of conflict with or violation of constating documents, agreements or applicable laws; composition of share capital; authority to execute and deliver the Arrangement Agreement and perform its obligations under the Arrangement Agreement; due authorization and enforceability of the Arrangement Agreement; consents and approvals required in respect of the matters contemplated by the Arrangement Agreement and business restrictions; corporate structure of GMG and Cuspis; liabilities; corporate records and accounts; insurance; material agreements; environmental matters; financial condition; absence of litigation, judgment or order; compliance with applicable laws; reporting issuer status and accuracy of public record of GMG; registration requirements under U.S. securities laws; and matters related to the Proposed Qualifying Transaction.

Covenants

Covenants of Cuspis

Cuspis covenanted and agreed that, among other things, during the Pre-Effective Date Period, except with the consent of Cuspis, such consent not to be unreasonably withheld, Cuspis will:

continue its operations in the ordinary course of business consistent with prior practice;
not split, combine or reclassify any of its outstanding shares, nor declare or pay any dividends on or make any other distributions (in either case, in stock or property) on or in respect of its outstanding shares;
not amend articles, by-laws or other constating documents;
not adopt a plan of liquidation or resolutions providing for the liquidation or dissolution of Cuspis;
other than as contemplated by the Arrangement Agreement, not to issue any Cuspis Shares or securities convertible into Cuspis Shares except for the issuances of Issuer Shares upon exercise of outstanding convertible securities of Cuspis;
not acquire or agree to acquire any of its outstanding shares or other securities;
not reorganize, amalgamate or merge with any other person, nor acquire or agree to acquire by amalgamating, merging or consolidating with, purchasing substantially all of the assets of or otherwise, any business of any corporation, partnership, association or other business organization or division thereof;
not settle or compromise any claim brought by any present, former or purported holder of any of its securities in connection with the transactions contemplated by this Agreement or the Arrangement;
not incur any debt or liability or make any payments outside of the ordinary course of business or in respect of expenses incurred in furtherance of the transactions contemplated in the Arrangement Agreement;
not take any action that would reasonably be expect to prevent or significantly impede the Arrangement; and
promptly advise GMG orally and, if then requested, in writing, with the full particulars of any:
a. event occurring subsequent to the date of the Arrangement Agreement that would render any representation or warranty of Cuspis contained in the Arrangement Agreement (except any such representation or warranty which speaks as of a date prior to the date of the Arrangement Agreement), if made on or as of the date of such event or the Effective Date, untrue or inaccurate in any material respect;
b. Material Adverse Effect in respect of Cuspis; and

c. breach by Cuspis of any covenant or agreement contained in this Agreement.

In addition, Cuspis agreed to perform all obligations required or desirable to be performed by Cuspis under the Arrangement Agreement and to do all such other acts and things as may be necessary or desirable in order to consummate and make effective, as soon as reasonably practicable, the transactions contemplated in the Arrangement Agreement, including, without limitation, the following:

use all commercially reasonable efforts to apply for, and obtain, all necessary approvals of the TSXV;
use all commercially reasonable efforts to obtain the approvals of Cuspis Shareholders to the Arrangement at the Cuspis Meeting, as provided for in Article 2 and in the Interim Order;
ensure the Cuspis Board recommends to the Cuspis Shareholders to vote in favour of the resolutions approving the Arrangement;
apply for and use all commercially reasonable efforts to obtain the Interim Order and the Final Order, as applicable;
carry out the terms applicable to it of the Interim Order and the Final Order, as applicable, and use its commercially reasonable efforts to comply promptly with all requirements which applicable Laws may impose on Cuspis with respect to the transactions contemplated hereby and by the Arrangement;
defend all lawsuits or other legal, regulatory or other proceedings challenging or affecting the Arrangement Agreement or the consummation of the transactions contemplated hereby;
use all commercially reasonable efforts to have lifted or rescinded any injunction or restraining order or other order relating to it which may adversely affect the ability of the parties to consummate the transactions contemplated by the Arrangement Agreement;
use all commercially reasonable efforts to cause the Effective Date to occur before the Outside Date; and
use all commercially reasonable efforts to satisfy all conditions precedent set forth in the Arrangement Agreement.

Covenants of GMG

GMG covenanted and agreed that, among other things during the Pre-Effective Date Period, except with the consent of Cuspis, such consent not to be unreasonably withheld, GMG will:

not dispose of any material assets;
not adopt a plan of liquidation or resolutions providing for the liquidation or dissolution of GMG;
not reorganize, amalgamate or merge with any other person, nor acquire or agree to acquire by amalgamating, merging or consolidating with, purchasing substantially all of the assets of or otherwise, any business of any corporation, partnership, association or other business organization or division thereof;
not settle or compromise any claim brought by any present, former or purported holder of any of its securities in connection with the transactions contemplated by the Arrangement Agreement or the Arrangement;
not amend, modify, terminate, cancel or let lapse any material insurance (or re-insurance) policy of GMG in effect on the date of the Arrangement Agreement, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and re-insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the terminated, cancelled or lapsed policies for substantially similar premiums are in full force and effect;

not take any action that would reasonably be expect to prevent or significantly impede the Arrangement; and
promptly advise Cuspis orally and, if then requested, in writing, with the full particulars of any:
a. event occurring subsequent to the date of the Arrangement Agreement that would render any representation or warranty of GMG contained in the Arrangement Agreement (except any such representation or warranty which speaks as of a date prior to the date of the Arrangement Agreement), if made on or as of the date of such event or the Effective Date, untrue or inaccurate in any material respect;
b. Material Adverse Effect in respect of GMG; and
c. breach by GMG of any covenant or agreement contained in the Arrangement Agreement.

In addition, GMG agreed to perform all obligations required or desirable to be performed by GMG under the Arrangement Agreement and to do all such other acts and things as may be necessary or desirable in order to consummate and make effective, as soon as reasonably practicable, the transactions contemplated in the Arrangement Agreement, including, without limitation:

defend all lawsuits or other legal, regulatory or other proceedings challenging or affecting the Arrangement Agreement or the consummation of the transactions contemplated hereby;
use all reasonable efforts to have lifted or rescinded any injunction or restraining order or other order relating to it which may adversely affect the ability of the Parties to consummate the transactions contemplated by the Arrangement Agreement;
in connection with the Arrangement and other transactions contemplated by the Arrangement Agreement, use its reasonable efforts to obtain, before the Effective Date, all necessary waivers, consents and approvals required to be obtained by GMG from other parties pursuant to material agreements and other contracts or agreements; and
use all reasonable efforts to cause the Effective Date to occur before the Outside Date; and use all reasonable efforts to satisfy all conditions precedent applicable to it in the Arrangement Agreement.

Conditions Precedent to the Arrangement

Mutual Conditions

The respective obligations of the parties to complete the transactions contemplated by the Arrangement Agreement are subject to a number of conditions precedent which must be satisfied or waived in order for the Arrangement to be completed. There is no assurance that these conditions will be satisfied or waived on a timely basis or at all. The following significant conditions, in addition to other conditions, are contained in the Arrangement Agreement:

The Interim Order and the Final Order shall have been granted on terms acceptable to the parties, each acting reasonably, and shall not have been set aside or modified in a manner unacceptable to the parties, each acting reasonably.
The Cuspis Shareholders shall have approved the resolutions approving the Arrangement in accordance with the Interim Order and the resolutions approving the delisting from the TSXV.
The GMG Shareholders shall have approved the conversion of GMG from a proprietary company to a public company in accordance with the Australian Corporations Act 2001 (Cth).
All consents, waivers, permits, exemptions, orders and approvals of, and any registrations and filings with, any Governmental Entity; and all third person and other consents, waivers, Permits, exemptions, orders and

approvals required to complete the Arrangement shall have been obtained or received on terms that are reasonably satisfactory to each party.

There shall have been no action taken, pending or threatened under any applicable Law or by any Governmental Entity which: (i) makes it illegal or otherwise directly or indirectly restrains, enjoins or prohibits the completion of the Arrangement, or (ii) results or could reasonably be expected to result in a judgment, order, decree or assessment of damages, directly or indirectly, relating to the Arrangement which is, or could be, reasonably expected to have a Material Adverse Effect on GMG or Cuspis, respectively.
GMG shall have received the required acceptance of the Exchange to the transactions contemplated by the Arrangement Agreement, including conditional approval of the Arrangement as Cuspis’ Proposed Qualifying Transaction as such term is defined in the Exchange Corporate Finance Manual and conditional approval of the listing of GMG Consolidated Shares to be issued pursuant to the Arrangement as of the Effective Date, or as soon as possible thereafter, subject to compliance with the usual requirements of the Exchange.
Cuspis shall have received the required acceptance of the TSXV to the transactions contemplated by the Arrangement Agreement, including conditional approval of the de-listing from the TSXV, or as soon as possible thereafter, subject to compliance with the usual requirements of the TSXV.
GMG shall have received conditional approval from the TSXV to list the GMG Shares on the TSXV, subject to the completion of the transactions contemplated by the Arrangement Agreement and subject to compliance with the usual requirements of the TSXV.
A final receipt shall have been received from the Principal Regulator with respect to this Prospectus.
The Arrangement Agreement shall not have been terminated.

Conditions to Obligations of Cuspis

The obligations of Cuspis to complete the transactions contemplated by the Arrangement Agreement is subject to the fulfilment or waiver of certain additional conditions, as set forth in the Arrangement Agreement, at or before the Closing Date, including, but not limited to:

All covenants of GMG under the Arrangement Agreement to be performed or complied with on or before the Effective Time which have not been waived by Cuspis shall have been duly performed or complied with by GMG in all material respects, and Cuspis shall have received a certificate of GMG, addressed to Cuspis and dated the Effective Date, signed on behalf of GMG by two senior officers of GMG (on GMG’s behalf and without personal liability), confirming the same as of the Effective Date.
The representations and warranties made by GMG in the Arrangement Agreement shall be true and correct in all material respects as of the Effective Date as if made on and as of such date (except to the extent that such representations and warranties made by GMG as of a specified date, in which event such representations and warranties shall be true and correct as of such specified date), except where any failures or breaches of representations and warranties would not either, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect on GMG, and Cuspis shall have received a certificate of GMG, addressed to Cuspis and dated the Effective Date, signed on behalf of GMG by two senior officers of GMG (on GMG’s behalf and without personal liability), confirming the same as of the Effective Date. No representation or warranty made by GMG in the Arrangement Agreement shall be deemed not to be true and correct if the facts or circumstances that make such representation or warranty untrue or incorrect are provided for or stated to be exceptions under the Arrangement Agreement.
There shall not have been any event or change that has had or would be reasonably likely to have a Material Adverse Effect on GMG, and Cuspis shall have received a certificate of GMG, addressed to Cuspis and dated the Effective Date, signed on behalf of GMG by two senior officers of GMG (on GMG’s behalf and without personal liability), confirming the same as of the Effective Date.

The Share Consideration to be issued to Cuspis Shareholders in connection with the Arrangement shall have been approved for listing on the TSXV, subject only to satisfaction of the customary listing conditions of the TSXV.
The Share Consideration, Replacement Options and the Replacement Warrants to be issued in the United States pursuant to the Arrangement shall be exempt from the registration requirements of the 1933 Act pursuant to the Section 3(a)(10) Exemption.

Conditions to Obligations of GMG

The obligation of GMG to complete the transactions contemplated by the Arrangement Agreement is subject to the fulfilment or waiver of certain additional conditions, as set forth in the Arrangement Agreement, at or before the Closing Date, including, but not limited to:

On the Effective Date, Cuspis shall have a minimum cash balance net of any liabilities of C$2,000,000.
All covenants of Cuspis under the Arrangement Agreement to be performed or complied with on or before the Effective Time which have not been waived by Cuspis shall have been duly performed or complied with by Cuspis in all material respects, and GMG shall have received a certificate of Cuspis, addressed to GMG and dated the Effective Date, signed on behalf of Cuspis by two senior officers of Cuspis (on Cuspis’ behalf and without personal liability), confirming the same as of the Effective Date.
The representations and warranties made by Cuspis in the Arrangement Agreement shall be true and correct in all material respects as of the Effective Date as if made on and as of such date (except to the extent that such representations and warranties made by Cuspis as of a specified date, in which event such representations and warranties shall be true and correct as of such specified date), except where any failures or breaches of representations and warranties would not either, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect on Cuspis, and GMG shall have received a certificate of Cuspis, addressed to GMG and dated the Effective Date, signed on behalf of Cuspis by two senior officers of Cuspis (on Cuspis’ behalf and without personal liability), confirming the same as of the Effective Date. No representation or warranty made by Cuspis in the Arrangement Agreement shall be deemed not to be true and correct if the facts or circumstances that make such representation or warranty untrue or incorrect are provided for or stated to be exceptions under the Arrangement Agreement.
There shall not have been any event or change that has had or would be reasonably likely to have a Material Adverse Effect on Cuspis, and GMG shall have received a certificate of Cuspis, addressed to GMG and dated the Effective Date, signed on behalf of Cuspis by two senior officers of Cuspis (on Cuspis’ behalf and without personal liability), confirming the same as of the Effective Date.
Holders of no more than 5% of the outstanding Cuspis Shares shall have exercised Dissent Rights.
On the Effective Date, the current Cuspis Board and officers shall have executed mutual resignations and releases in a form satisfactory to Cuspis and such individuals, acting reasonably.
GMG giving written notice to Cuspis that GMG’s shareholders’ agreement has been terminated in accordance with its terms, with effect no later than immediately prior to the Effective Time.
GMG having converted from a proprietary company to a public company in accordance with the Australian Corporations Act 2001 (Cth).

Termination of Arrangement Agreement

The Arrangement Agreement may be terminated at any time: (a) by mutual written agreement between GMG and Cuspis; (b) by GMG or Cuspis if the required approval of the resolutions approving the Arrangement shall not have been obtained at the Cuspis Meeting or GMG Meeting; (c) by any party if any condition precedent to its obligations

has not been satisfied by the Outside Date or where it is clear that the condition cannot be satisfied by the Outside Date, except as qualified by the Arrangement Agreement, (d) by any party if the Effective Time shall not have occurred on or before the Outside Date, except as qualified by the Arrangement Agreement, (e) by GMG if there is a material breach by Cuspis of its covenants or representations or warranties under the Arrangement Agreement; or (f) by Cuspis if there is a material breach by GMG of its covenants or representations or warranties under the Arrangement Agreement.

PROMOTERS

Craig Nicol, the Managing Director, CEO and Corporate Secretary of the Company, is considered to be a promoter of the Company as he took the initiative in founding and organizing the business of the Company. Please see “ Directors and Executive Officers ” and “ Escrowed Securities and Securities Subject to Contractual Restrictions on Transfer ” for the number and percentage of each class of voting securities and equity securities of the Company beneficially owned, or controlled or directed, directly or indirectly by Craig Nicol.

LEGAL PROCEEDINGS

GMG is not aware of any material legal proceedings involving GMG nor are any such proceedings known by GMG to be contemplated.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Except as disclosed below and elsewhere in this Prospectus, since the incorporation of the Company on August 10, 2016, no director, executive officer or person that beneficially owns, or controls or directs, directly or indirectly, more than 10% of any class or series of the outstanding voting securities of the Company or any associate or affiliate of the foregoing has, or has had, any material interest, direct or indirect, in any transaction prior to the date of this Prospectus or in any proposed transaction that has materially affected, or would reasonably be expected to materially affect, the Company or any of its affiliates.

AUDITORS

The auditor of GMG is BDO Audit Pty Ltd., Chartered Professional Accountants, located at Level 10, 12 Creek Street, Brisbane, Queensland, 4000, Australia.

TRANSFER AGENT AND REGISTRAR

Prior to the closing of the Arrangement, the Company intends to appoint Computershare Investor Services Inc., of 510 Burrard Street, 3rd Floor, Vancouver, B.C. V6C 3B9, as the Company's transfer agent and registrar for the GMG Shares.

MATERIAL CONTRACTS

Except for contracts made in the ordinary course of business and as otherwise noted below, the Company has not entered into any agreements which are currently in effect and considered to be currently material:

The Arrangement Agreement.
The Distribution Agreement.
The Supply Agreement.

Copies of the material agreements will be filed on the Company's profile on SEDAR at www.sedar.com.

EXPERTS

The Company’s auditors for the financial statements included in this Prospectus, BDO Audit Pty Ltd., Chartered Professional Accountants, report that they are independent from the Company in accordance with the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards).

AGENT FOR SERVICE OF PROCESS

Each of the Company, Craig Nicol, Guy Outen, Christopher Ohlrich and Robbert De Weijer have appointed the Company’s counsel, DuMoulin Black LLP, located at 595 Howe Street, 10[th] Floor, Vancouver, British Columbia, V6C 2T5, as its or his agent for service of process in British Columbia. It may not be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party has appointed an agent for service of process.

APPENDIX A

GRAPHENE MANUFACTURING GROUP PTY LTD. AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2020 AND JUNE 30, 2019

Please see attached

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Tel: +61 7 3237 5999 Level 10, 12 Creek St Fax: +61 7 3221 9227 Brisbane QLD 4000 www.bdo.com.au GPO Box 457 Brisbane QLD 4001 Australia

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DECLARATION OF INDEPENDENCE BY R M SWABY TO THE DIRECTORS OF GRAPHENE MANUFACTURING GROUP PTY LTD

As lead auditor of Graphene Manufacturing Group Pty Ltd for the year ended 30 June 2020 and 2019, I declare that, to the best of my knowledge and belief, there have been no contraventions of any applicable code of professional conduct in relation to the audit.

"R. M Swaby"

R M Swaby Director

BDO Audit Pty Ltd

Brisbane, 24 November 2020

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BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.

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Tel: +61 7 3237 5999 Level 10, 12 Creek St Fax: +61 7 3221 9227 Brisbane QLD 4000 www.bdo.com.au GPO Box 457 Brisbane QLD 4001 Australia

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INDEPENDENT AUDITOR'S REPORT

To the members of Graphene Manufacturing Group Pty Ltd

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Graphene Manufacturing Group Pty Ltd (the Company), which comprises the statement of financial position as at 30 June 2020 and 2019, the statement of profit and loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the years then ended, and notes to the financial report, including a summary of significant ac counting policies, and the directors’ declaration.

In our opinion the accompanying financial report presents fairly, in all material respects, the financial position of the Company as at 30 June 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Entity in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other information

The directors are responsible for the other information. The other information obtained at the date of this auditor’s report is information included in the directors report, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon.

��

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In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the Financial Report

Management is responsible for the preparation and fair presentation of the financial report in accordance with International Financial Reporting Standards and for such internal control as management determines is necessary to enable the preparation and fair presentation of a financial report that is free from material misstatement, whether due to fraud or error.

In preparing the financial report, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Entity or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s responsibilities for the audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located within Appendix One.

This description forms part of our auditor’s report.

BDO Audit Pty Ltd

"R M Swaby

R M Swaby

Director

Brisbane, 24 November 2020

� �

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APPENDIX ONE: AUDITOR’S RESPONSIBILITIES STATEMENT FORMING PART OF THE AUDITOR’S REPORT

As part of an audit in accordance with the International Standards on Auditing, the auditor exercises professional judgement and maintains professional scepticism throughout the audit. The auditor also:

Identifies and assesses the risks of material misstatement of the financial report, whether due to fraud or error, designs and performs audit procedures responsive to those risks, and obtains audit evidence that is sufficient and appropriate to provide a basis for the auditor’s opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
Evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by those charged with governance.
Concludes on the appropriateness of those charged with governance’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern. If the auditor concludes that a material uncertainty exists, the auditor is required to draw attention in the auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify the auditor’s opinion. The auditor’s conclusions are based on the audit evidence obtained up to the date of the auditor’s report. However, future events or conditions may cause the entity to cease to continue as a going concern.
Evaluates the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

The auditor communicates with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that the auditor identifies during the audit

��

APPENDIX B

GRAPHENE MANUFACTURING GROUP PTY LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEARS ENDED JUNE 30, 2020 AND JUNE 30, 2019

Please see attached

Graphene Manufacturing Group Pty Ltd.

MANAGEMENT DISCUSSION AND ANALYSIS (MD&A)

For the years ended June 30, 2020 and June 30, 2019 (in Australian dollars)

1. OVERVIEW

This management’s discussion and analysis (“MD&A”) relates to the operating results and financial position and cash flows of Graphene Manufacturing Group Pty. Ltd (“GMG” or the “Company”) for the years ended and June 30, 2020 and June 30, 2019. This report should be read in conjunction with the financial statements of the Company as at and for the years ended June 30, 2020 and June 30, 2019 and related notes (the “financial statements”).

The financial statements of GMG, and extracts of those financial statements provided in this MD&A have been prepared in accordance with International Financial Reporting Standards (“IFRS”). References to the symbol AUD or $ or A$ means the Australian dollar, the official currency of Australia. References to the symbol “CAD” mean the Canadian dollar. Except as otherwise set out herein, all amounts expressed herein are in Australian dollars, the functional currency of the Company. As a result of the rounding of dollar differences, certain total dollar amounts in this MD&A may not add exactly to their constituent amounts. Throughout this MD&A, percentage changes are calculated using numbers rounded as they appear. Readers are cautioned that this MD&A contains certain forward-looking information. Please see the “Forward Looking Statements” section which follows.

This MD&A is prepared on November 24, 2020

2. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This MD&A contains “forward looking statements” that reflect the Company’s current expectations and projections about its future results. When used in this MD&A, forward looking statements can be identified by the use of words such as “may”, or by such words as “will”, “intend”, “believe”, “estimate”, “consider”, “expect”, “anticipate”, and “objective” and similar expressions or variations of such words. Forward looking statements are, by their nature, not guarantees of the Company’s future operational or financial performance and are subject to risks and uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. No representation or warranty is intended with respect to anticipated future results, or that estimates, or projections will be sustained.

In developing the forward-looking statements in the MD&A, the Company has applied several material assumptions, including the availability of financing on reasonable terms, the Company’s ability and general business and economic conditions. Many risks, uncertainties and other factors could cause the actual results of GMG to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to the following: overall economic conditions, market acceptance for our products and solutions, the introduction of competing technologies/products, environmental and regulation requirements, competitive pressures, change in market conditions and other factors that may cause the actual results, performance or achievements to differ materially from those expressed or implied in these forward-looking statements.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the MD&A or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties elsewhere in this MD&A, actual events may differ materially from current expectations. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events

or otherwise. All forward-looking statements contained in the MD&A are expressly qualified in their entirety by this cautionary statement.

3. COMPANY OVERVIEW

GMG is a clean-technology company which currently seeks to offer energy saving products and solutions and energy storage products, enabled by graphene manufactured in-house via a proprietary production process. In 2017 and 2018, GMG developed its proprietary production process to decompose natural gas (i.e. methane) into its elements, graphene, hydrogen and some residual hydrocarbon gases. This process produces high quality, low direct cost, scalable, ‘tuneable’ and low or contaminant free graphene - suitable for use in clean-technology and other applications.

GMG’s strategy has evolved over time. While GMG graphene may be suitable for a wide range of industries, GMG has narrowed its current focus to target select applications and industries. GMG’s management team (‘Management’) believes that focusing on downstream applications will provide a higher return on in-house graphene production. Also, the vertically integrated approach will enable it to build long-term competitive advantage. In line with this approach, GMG’s initial focus has been developing applications for energy savings and energy storage.

In the energy savings segment, GMG has focused on graphene enhanced heating, ventilation and air conditioning (HVAC) coating (or energy-saving paint), lubricants and fluids. In the energy storage segment, GMG supplies graphene to enhance the performance of existing battery technologies (e.g. lithium ion), and pursuant to a research agreement and a license agreement dated February 26, 2021, GMG and University of Queensland are working collaboratively with financial support from the Australian Government to progress R&D and commercialization of graphene Aluminium-Ion batteries.

GMG and its customers have successfully demonstrated HVAC coating projects, offering customers improved heat transfer in space cooling (air-conditioning) and coolant units. Also, GMG has developed lubricants which reduce friction in engines. Both these offerings have the potential to enable lower energy consumption, reducing both cost and emissions.

Near-term revenue generation will depend largely on the ability of the company to generate sales of HVAC coating projects (Thermal XR powered by GMG graphene or ‘TXR’) and to a lesser extent on being able to monetize the advanced research and testing work undertaken on graphene enhanced lubricants. Medium term, GMG remains focused on R&D and will continue to invest in new product development including in energy storage.

4. FINANCIAL HIGHLIGHTS

Statement of comprehensive income

$'000	FY20 FY19
Revenue from operations Other income including subsidies, grants and incentives Total revenue Employee expenses Plant expenses Occupancy expenses Overheads expenses Total operating expenses EBITDA Finance costs Depreciation Loss before income tax	111 88 1,214 873
	1,325 961 (1,898) (1,299) (158) (123) (91) (84) (848) (848)
	(2,995) (2,354)
	(1,670) (1,393) (2) (5) (395) (331)
	(2,067) (1,729)

Statement of Financial position

$'000	30-Jun-20 30-Jun-19
Cash and cash equivalents Trade and receivables Research and development grants receivable Other current assets Property plant and equipment Intangible assets Total assets Current liabilities Long term liabilities Total liabilities Total equity	659 1,828 36 79 934 802 15 14 228 487 31 11
	1,903 3,223 (218) (720) - -
	(218) (720)
	1,685 2,502

Statement of cash flows

$’000	FY20 FY19
Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Total cash flows	(2,162) (1,365) (156) (795) 1,148 3,818
	(1,170) 1,658

Subsequent Year End Events

a. Private placement

In July 2020, GMG raised $400K by issuing 32,000 new ordinary shares. Thereafter, on October 30, 2020, the Company completed a private placement of ordinary shares at a price of $12.50 per share,

resulting in gross proceeds (before fees) of $1,726K. This resulted in the issuance of 138,082 shares to investors and 21,593 shares to Company’s financial advisors.

b. Letter of intent (LOI) and Arrangement Agreement

On August 17, 2020, the Company entered into a letter of intent with Cuspis Capital Ltd (TSXV:CUSP) (“Cuspis”), a capital pool company as defined under TSX Venture Exchange (“TSXV” or the “Exchange”) Policy2.4- Capital Pool Companies, whereby Cuspis and the Company seek to complete an arrangement, amalgamation, share exchange, or similar transaction to ultimately form the resulting issuer (the “Resulting Issuer”) that will continue on the business of the Company (the “Transaction”), subject to certain terms and conditions. Cuspis intends that the Transaction will constitute its Qualifying Transaction, as such term is defined in the policies of the Exchange. Following completion of the Transaction, the Resulting Issuer intends to list as a Tier 2 Industrial Issuer on the Exchange.

5. OPERATIONS

a. Statement of loss

a. Statement of loss
$ '000 Classification1	FY20 FY19
Revenue from operations Revenue Other income Revenue Other gains Revenue Employee benefits expense Employee Professional and consulting fees Overheads D&A D&A Travel Overheads Raw material and production inputs Plant Occupancy Occupancy Factory costs Plant Share based payments expense Employee Other expenses Overheads Finance costs Finance Loss before income tax Other comprehensive income/loss Total comprehensive loss for theyear	111 88 138 3 1,076 870
	1,325 961 (1,797) (1,239) (551) (579) (395) (331) (124) (118) (13) (7) (91) (84) (145) (117) (101) (59) (173) (151) (2) (5)
	(3,392) (2,690) (2,067) (1,729) - -
	(2,067) (1,729)

Non-IFRS Financial Measures

This MD&A does not include measures such as Adjusted EBITDA, which have not been prepared in accordance with IFRS, because, in FY19 and FY20, the business did not achieve significant sales revenue. Moreover, GMG had not commercialised a significant downstream customer offering during

1 The classification has been provided to assist with reconciliation to the table shown in the ‘Financial highlights’ section

these periods. Therefore, Management believes that using an Adjusted EBITDA in conjunction with the ‘Total comprehensive loss for the year’, does not provide any meaningful insight.

In future, Management may consider using non-IFRS measures such as ‘Adjusted EBITDA’ in conjunction with Accounting measures to report on performance and profitability. Such measures while not necessarily comparable to similar measures presented by other companies could provide meaningful insight.

b. Revenues

$'000	FY20 FY19
Revenues from operations Grants, subsidies and tax incentives Interest, sundry and forex gains Total revenue	111 88 1,198 802 16 71
	1,325 961

In FY20, GMG had a ‘take or pay’ style arrangement with an industry player under which it has committed to supply graphene for a research project for a fixed quarterly fee. In this year, GMG generated $20K per quarter or $80K in total through this arrangement. The business sold over 20kg of graphene to an Australian coatings technology company that specialises in coatings for the HVAC industry (or ‘TXR Supplier’). In FY20, the remainder of ‘Revenues from operations’ relates to graphene powder sales to other customers. In FY19, $80K of the Revenue from operations related to the same research project under which GMG had committed to supply graphene under a ‘take or pay’ style arrangement.

The business has received grants, subsidies and tax incentives, which are recognized as revenues. The key component of this item is the refundable R&D tax offset which was $934K in FY20 and approximately $802K in FY19. The business does not report R&D related expenses and assets separately in the accounts. GMG receives external advice on this process of submitting R&D tax offset at the completion of each financial year. In FY20, the tax incentive amount is based on a total R&D spend of $2,147K (including a depreciation expense of $346K). In FY19, the tax incentive amount is based on a total R&D spend of $1,845K, including a depreciation expense of $315K. The R&D tax offset, booked as revenue, was 43.5% of the R&D spend in FY19 and FY20.

The energy saving HVAC coating, TXR has been trialed and is now being offered to paying customers. GMG supplies graphene to TXR Supplier, which manufactures TXR. GMG then buys back the TXR under supply and distribution agreements, which were signed in November, 2020. In the months leading up to November, 2020, various customer trials were conducted to demonstrate the efficacy of the solution. GMG is currently receiving inquiries from prospective customers for the Thermal XR powered by GMG graphene.

In FY21, Management expects R&D expense and hence revenue from tax incentives to be received again in FY21, but the amount received will depend on the amount of eligible expenditure incurred during the year and timing of GMG’s transition from a predominantly R&D focus to a commercial operations phase. The operating revenue is expected to be largely from sales of full service TXR projects and resale of TXR products in Australia and internationally.

c. Cost of sales and gross profit

Revenue from operations in FY20 was approximately $111K in FY20 and approximately $88K in FY19. Costs considered as direct costs include:

Light, power and heating
Feed gas

$'000	FY20 FY19
Agents Commission Cost of Goods Sold Cost of Goods Sold - samples Total cost of sales	0.6 - 3.7 1.4 2.5 0.4
	6.8 1.7

The cost of raw materials required to produce graphene is very low. In FY20, there was no revenue corresponding to ‘Cost of Goods Sold – samples’. Excluding this line item, the ‘Total cost of sales’ account for less than 4% of the ‘Revenue from operations’. The business does not record any form of direct labor cost in inventory (or cost of sales), and all labor costs are directly expensed as operating costs due to complexity of allocating various personnel costs to inventory (and cost of sales). Management believes that the business will operate at scale with high operating leverage and at high gross margin, hence, the cost of measuring gross margin accurately outweighs the benefit. Selling graphene powder is not central to the strategy of the company. Future revenue is targeted to be driven by products and solutions enhanced with GMG’s graphene powder, which are at various stages of commercialization. Management believes that the margin for these will be higher and thus consider gross margin to be less relevant. However, Management will continually assess how best to measure and monitor profitability metrics.

d. Operating costs

Shown in the table below are the total operating costs which also include all costs allocated to cost of goods sold as discussed in the previous section c. i.e. light, power and heating and feed gas (classified in the table below as ‘Plant’ expenses). Operating costs presented in the table below exclude finance costs, depreciation and amortization.

$'000	FY20 FY19
Employee Occupancy Plant Overhead Total operating expenses	(1,898) (1,299) (91) (84) (158) (123) (848) (848)
	(2,995) (2,354)

Operating costs for FY20 and FY19 have been split into R&D related costs and Non-R&D related costs. This split is based on external advice that GMG receives each year in relation to claiming the tax offset for R&D expenses, available under Australia’s R&D tax offset scheme.

$'000		FY20
	Total	R&D Non-R&D
Employee Occupancy Plant Overhead Total operating expenses	(1,898) (91) (158) (848) (2,995)	(1,257) (641) (79) (12) (136) (22) (329) (520)
		(1,800) (1,195)

$'000		FY19
	Total	R&D Non-R&D
Employee Occupancy Plant Overhead Total operating expenses	(1,299) (84) (123) (848) (2,354)	(835) (463) (115) 31 (85) (38) (494) (354)
		(1,530) (824)

The business conducts most R&D activities in-house. As can be seen from the tables above, various costs including employee expenses (including management salaries) have been allocated to R&D. This is because GMG had various products in development and significant resources were dedicated to R&D. With the first sale of ‘Thermal XR powered by GMG graphene’ to a paying customer, significant inquiry in relation to the TXR service offering, and potential commercialization of other products in future, Management estimates that increasing resources will have to be dedicated to growing sales and production to support commercial operations. Following is a description of highlevel expense categories of GMG:

i. Employee expenses

Employee expense consists of salaries, on-costs (e.g. superannuation), and share based payments. The total amount to be expensed as share based payments is determined by reference to the fair value of the options granted under the employee share option plan,

including any market performance conditions (e.g. the entity’s share price); and
excluding the impact of any service-based vesting conditions (for example, remaining an employee of the entity for a period of time).

The total expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. Salaries have gone up with the number of employees.

ii. Occupancy

Occupancy expenses relate primarily to the leased premises. From September 2018 to June 2020 i.e. for approximately 9 months in FY19 and 3 months in FY20, the only leased premises were where the production facilities are located. The rent for this production facility in November 2020 is $4,904 per month. In October 2020, GMG signed a lease for a new premise, currently being used as the head office. The monthly lease expense for this office is $2,000 per month. As a result of this, the total lease expenses will be higher in FY21.

The Company had to change its accounting policies as a result of adopting AASB 16 (Leases). The Company elected to adopt the new rules retrospectively and applied the practical expedients relating to short term leases and, therefore, there was no cumulative effect of initially applying the new standard on 1 July 2019. This had the effect that no corresponding liability or right of use asset was recorded on the balance sheet.

iii. Plant expenses

This includes raw material and production inputs, general warehouse expenses, Health, safety and environment (HSE), machinery parts and consumables, repairs and maintenance (R&M) and other costs. Machinery consumables in FY20 and FY19 were approximately $57K in each year. In FY20 the increase in equipment rental, machinery componentry and repairs and maintenance were cumulatively approximately $31K higher in FY20 than in FY19. While expenses on items such as consumables can be estimated, there are various expenses relating to R&M and machinery spares that depend on plant performance and cannot be estimated with a high degree of certainty.

iv. Overheads

Insurance, IT, Legal, travel, sponsorships, other R&D related expenses, and various other expenses have been classified as ‘Overheads’. While expenses such as IT related expenses, travel, marketing are expected to increase as the scale of the business grows, others such as licensing and registration, website, other R&D, filing fees will be uncorrelated to the number of employees, product offerings or number of customers. Following are various sub-items that constitute ‘Overheads’, for which the change from FY19 to FY20 has been greater than $10K:

IT expenses in FY20 increased by $35K;
Consultants and contracting expense increased in FY20 by $21K;
Meeting expenses increased in FY20 by $13K;
Travel expenses increased in FY20 by $12K;
Subscription expenses decreased in FY20 by $10K;
Testing and quality expenses decreased in FY20 by 16K; and
Accounting and tax planning expenses decreased in FY20 by 18K.

e. Projects

As has been highlighted, the Company has not generated significant revenue to date. Graphene powder is a commercialized product, but sale of graphene powder is not the Company’s core strategy. TXR is a product in early commercial production stage (produced by TXR Supplier), and the business is focusing on developing the market for TXR. The Company is undertaking significant product development activities to commercialize various products. The following table provides a summary of projects (each project corresponds to a product under development). These are not capital-intensive projects with well-defined project plans, but are ongoing initiatives driven by certain employees, with the cost of the employees being the key expense associated with the projects. The Company’s staff undertake multiple projects simultaneously and a project cost tracking system has not been required to date. Therefore, expenditures made to date on each project cannot be separately identified.

Product / Project	Status
G Lubricants	This product is under development and testing internally and with
	prospective customers. Results achieved so far are encouraging and
	therefore management views this product to be in more advanced stages
	of development as compared to other products. The research and
	development for this product is being undertaken in-house. Research is
	ongoing and there is no fixed end date. Customer engagement is taking
	place simultaneously, and hence timing of commercial production will
	be based on customer accepted scientific results, energy savings
	calculations and receipt of substantial orders. In a business-to-business
	environment with large corporate counterparties, the timeline for product
	validation and acceptance is uncertain. There is no significant operating
	cost for development, other than the salary costs of the Head Product
	Scientist and Marketing Manager. Necessary capital equipment has
	already at been acquired.

Product / Project	Status
	scale commercial production. The Company intends to pursue these
	opportunities for commercialization of GMG Lubricants.
G Coolants and G	These products are currently under development and testing. The
Fluids	research and development for this product is being undertaken in-house.
	Research is ongoing, but with lesser focus than on G Lubricants, and
	there is no fixed end date. Customer engagement is taking place
	simultaneously, and therefore timing of commercial production will be
	based on customer accepted scientific results, energy savings
	calculations and receipt of substantial orders. There is no significant
	operating cost for development, other than the salary costs of the head
	product scientist responsible for development. Necessary capital
	equipment is already at the development site.
	The Company intends to continue to develop these products with a view
	to commercialization in the future.
G Diesel	This product is still in the early stages of development and testing, which
	has not been prioritized in the near term. The potential for this product
	has been identified from third party research studies conducted using
	graphene in diesel. Research will likely require use of local university
	facilities to enable performance testing in a controlled environment. As
	of now, the Company remains interested in this product and is engaged
	with several major collaboration partners towards the progression of this
	project, but at this time does not plan to spend significant amounts on
	this project in the next 12 months. There is no timeline or end date for
	development of this product.
G+AI Battery	Initial performance results on this project being undertaken with
	University of Queensland are encouraging. The collaboration project is
	for a period of three years. Research is being carried out by University
	of Queensland, with the assistance of GMG. The Company will
	contribute approximately $150,000 in cash (approximately $50,000 per
	annum for three years) and approximately $250,000 in-kind (graphene
	costs and costs of human resources of the Company). This project has
	also been approved to receive grant funding of $390,000 from the
	Australian Government’s Australian Research Council.
	The Company expects a commercial prototype to be developed during
	this project. A successful outcome of this project will create new
	intellectual property which will enable the Company to target a global
	market for batteries.

6. FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

a. Financial position

	$ ‘000	FY20 FY19
	Current assets Cash and cash equivalents Trade and receivables Inventories Research and development grants receivable Other current assets Total current assets Non-current assets Property plant and equipment Intangible assets Total non-current assets Total assets Current liabilities Trade and other payables Employee benefit obligations Total current liabilities Total non-current liabilities Total liabilities Net assets Equity Contributed equity Reserves Accumulated losses Total equity	659 1,828 36 79 6 5 934 802 9 9
		1,644 2,723 228 487 31 11
		259 499
		1,903 3,222 176 691 42 29
		218 720 - -
		218 720
		1,685 2,502 5,769 4,646 186 59 (4,270) (2,203)
		1,685 2,502

The R&D tax incentive in FY20 was based on an R&D spend of $2,147K and that in FY19 was based on an R&D spend of $1,845K. The Research and development grants receivable on the balance sheet as at the end of each year is 43.5% of the R&D spend in that financial year.

The business did not have substantial operations and hence the trade receivables, inventories and other current assets are low.

While approximately $133K was invested in property, plant and equipment (PPE) in FY20, the PPE reduction from FY19 is attributable to the depreciation expense of approximately $395K. Of the $395K in depreciation, $379K is attributable to depreciation of manufacturing equipment. The high depreciation relates primarily to equipment that was used for R&D purposes.

b. Cash flow (Investing, Operating, Financing)

	FY20 FY19
Cash flows from operating activities Receipts from customers and govt. subsidies Payments to suppliers and employees R&D tax incentive received Interest received Interest paid Net cash flow from operating activities Cash flow from investing activities Payments for property, plant and equipment Payments for intangibles Loans to related parties Net cash (outflow) from investing activities Cash flow from financing activities Proceeds from issue of shares and other equity securities Share issue cost Net cash flow from financing activities Net decrease (increase) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of theyear	401 93 (3,365) (1,651)
	(2,964) (1,558) 802 195 1 3 (1) (5)
	(2,162) (1,365) (133) (737) (22) (11) - (47)
	(155) (795) 1,184 4,209 (36) (391)
	1,148 3,818 (1,169) 1,658 1,828 170
	659 1,828

c. Liquidity and Capital Resources

GMG has generated limited revenues to date. The cash expenses largely relate to operations and R&D activities. Until the date of this MD&A, GMG has raised approximately $8.0 million of equity capital. The capital raised has been largely used to fund the development of its proprietary graphene powder production technology and associated graphene enhanced products and solutions, associated plant and equipment and expenses for manufacturing and marketing these products.

Revenue in the near term is targeted to be generated from the HVAC coating customer offering, Thermal XR powered by GMG graphene. Growth in customer demand for this and other offerings will influence the amount and timing of future funding requirements for GMG. The go-to-market strategy for the TXR will evolve as GMG receives more feedback from customers, has more referenceable energy savings data and more customer success stories. Based on these parameters, GMG will determine how much to invest to achieve rapid market penetration of TXR in different geographies. A rapid penetration strategy may require additional capital, but deployment of capital for marketing purposes would be controllable by Management.

$’000	FY20 FY19
Cash flows from operating activities Cash flow from investing activities Cash flow from financing activities Total cash flow	(2,162) (1,365) (155) (795) 1,148 3,818
	(1,169) 1,658

In FY20, net cash used in investing activities amounted to $155K compared to $795K in FY19. In FY19, approximately $579K was invested in purchase of manufacturing equipment and $66K in warehouse equipment.

As at June 30, 2020, the cash and cash equivalents are $659K. Since the end of the financial year, the business has raised $2,126K from the issue of new shares. Furthermore, on or about the same date as the listing of GMG shares on the TSXV, under the LOI with Cuspis Capital, GMG expects to receive an additional approximately C$2,000,000 in cash.[2]

Post the completion of the Arrangement, Management believes GMG will have enough cash to meet its growth (sale and marketing activities for TXR projects) and development (investment in lubricants, G+AI Batteries, and fluids) objectives for at least 12 months. To date, the Company has relied on grants, subsidies and R&D incentives and external funding from investors. There is no guarantee that revenue generated by the business, will be sufficient to fund the business for a longer period of time. There can be no assurance that adequate funding will be available in the future, or under terms that are favorable to the Company.

Although the operating and investing cash flow for FY19 and FY20 were negative, it is assumed that the Company has neither the intention nor the need to liquidate any of its assets to discharge its liabilities and commitments in the normal course of business. Though not guaranteed, Management believes that investors will continue to support the business to fund its expansion and development of products and solutions until the business becomes profitable.

d. Financial Instruments and Risk Management

Financial assets and financial liabilities are recognised in the balance sheet when the Company becomes party to the contractual provisions of the financial instrument. GMG’s financial instruments are its cash and cash equivalents, trade and other receivables, trade and other payables. The Company is exposed to a variety of financial risks, which results from its financing, operating and investing activities. The objective of financial risk management is to contain, where appropriate, exposures to these financial risks to limit any negative impact on the Company’s financial performance and position.

The risks arising from the Company’s financial instruments are mainly credit risk and foreign currency risk. The risk management policies employed by the Company to manage these risks are discussed below:

a) Credit risk

Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the balance sheet date. The maximum

2 GMG expects the listing will complete soon after the completion of the Arrangement

exposure to credit risk at balance date in relation to each class of recognised financial assets is the gross carrying amount of those assets.

As the company expands, increases sales, this will become a larger consideration. The business development team closely monitors, the activities of its counterparties and potential counterparties.

b) Liquidity risk

Liquidity risk is the risk that arises when the maturity of assets and the maturity of liabilities do not match. Some financial assets may not be able to be monetised in a timely manner. For example, if there is a delay in receipt of the R&D tax incentive, which has been a substantial source of cash inflow in the past, the company could face a liquidity issue. While the company does not have any credit facilities from banks, GMG ensures it maintains enough cash, to fulfil its near-term liabilities.

c) Currency risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognized assets and liabilities are denominated in a currency that is not the Company’s functional currency. The Company is exposed to foreign exchange risk, however, at present, this risk is relatively low as there are no significant revenues and most expenses are denominated in Australian dollars. However, in the past, the company has sourced funding from investors and capital equipment from overseas. Because of the relatively low level of foreign currency exposure, the Company’s policy is to not enter into any currency hedging transactions.

e. Off-balance sheet arrangements

As of the date of this MD&A, the Company did not have any off-balance sheet arrangements nor any contingent liabilities, except for the non-cancellable operating leases, expiring within 1 month to 1 year (as of the date in the financial statements), for warehouses and portable office units. The minimum lease payments corresponding to these operating leases were $11,770 at the end of FY20 and $11,605 at the end of FY19.

f. Outstanding shares

The table below shows the number of ordinary shares issued during FY19, FY20 and at the beginning and end of each of these periods. The shares issued post 30-Jun-20 include the shares issued by way of Private placement and advisory fees.

Period start	1-Jul-18	1-Jul-19	1-Jul-20
Period end	30-Jun-19	30-Jun-20	24-Nov-20
Period	FY19	FY20
Shares at period start	1,761,008	2,403,744	2,515,178
Shares issued	642,736	111,434	191,675
Shares atperiod end	2,403,744	2,515,178	2,706,853

7. RELATED PARTY TRANSACTIONS

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party’s making of financial or operational decisions, or if both parties are controlled by the same third party. The Company has transactions with key management

personnel. The key management personnel compensation[3] was $564,129 in FY20 and $459,144 in FY19.

Salaries paid to director related entities were $141 in FY20 and $8,460 in FY19. In FY20, an amount was also paid to a director as a share-based payment.

8. RISK FACTORS

The Company’s business is subject to numerous risks and uncertainties, including those described elsewhere in this MD&A, as well as general economic and market risks. The following discussion describes material risks and uncertainties that the Company has identified that may affect the Company’s results of operations and financial condition.

a) The Arrangement Agreement May Not Be Signed Or May Be Terminated Subsequent to Signing in Certain Circumstances

The contemplated Arrangement Agreement between GMG and Cuspis may not be signed. If signed, each of GMG and Cuspis will have the right to terminate the Arrangement Agreement and Arrangement under certain circumstances. Accordingly, there is no certainty, nor can GMG nor Cuspis provide any assurance, that the Arrangement will complete prior to the proposed Qualifying Transaction, as such term is defined in the policies of the Exchange

b) No Certainty That All Conditions Precedent to the Arrangement Will Be Satisfied

If the Arrangement Agreement is signed, the completion of the proposed Qualifying Transaction will still be subject to a number of conditions precedent, certain of which are outside the control of GMG and Cuspis, including receipt of the final order for the Arrangement and approval by Cuspis’ shareholders of the Arrangement. There can be no certainty, nor can GMG or Cuspis provide any assurance, that these conditions will be satisfied or, if satisfied, when they will be satisfied.

c) Assumption of Potential Cost and Potential Termination Fees

Certain costs related to the proposed Qualifying Transaction, such as legal and accounting fees, must be paid by GMG even if the proposed Qualifying Transaction is not completed. GMG and Cuspis are each liable for their own costs incurred in connection with the proposed Qualifying Transaction.

d) Completion of the Proposed Qualifying Transaction

There are risks associated with the proposed Qualifying Transaction including (i) that market reaction to the proposed Qualifying Transaction and the future trading prices of the ordinary shares of GMG (GMG Shares) cannot be predicted; (ii) uncertainty as to whether the proposed Qualifying Transaction will have a positive impact on the entities involved therein; and (iii) that there is no assurance that required approvals will be received.

e) COVID-19

3 Key management personnel include Craig Nicol, Christopher Ohlrich, Robber De Weijer

include, but are not limited to, the ability of the Company to sell products and raise funds, the ability of the Company to conduct operations in the event of safety lockdowns, the inability to travel for professionals and contractors involved in production, regional and international travel and quarantine restrictions within the country, and the disruption of shipping material and samples to and from the Company’s head office.

f) Stress in the Global Economy

g) Adverse General Economic Conditions

h) Foreign Operation and Political Risk

All or any of these factors, limitations, or the perception thereof could impede the Company’s activities, or otherwise have an adverse impact on the Company’s valuation and stock price.

i) Foreign Exchange Rate Fluctuations

j) Financing Requirements

Substantial additional capital may be required for new manufacturing capacity or other purposes. When such additional capital is required, the Company will need to pursue various financing transactions or arrangements, including joint venturing of projects, debt financing, equity financing or other means. Additional financing may not be available when needed or, if available, the terms of such financing might not be favourable to the Company and might involve substantial dilution to existing shareholders. The Company may not be successful in locating suitable financing transactions in the time period required or at all and may not obtain the capital required by other means. A failure to raise capital when needed would have a material adverse effect on the Company’s business, financial condition and results of operations. Any future issuance of GMG Shares to raise required capital will likely be dilutive to shareholders. In addition, debt and other mezzanine financing may involve a pledge of assets and may be senior to interests of equity holders. The Company may incur substantial costs in pursuing future capital requirements, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. The ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the Company’s industry in particular), its status as a new enterprise with a limited history, and/or the loss of key management personnel. Further, if the demand for graphene and graphene-enhanced products decreases, then potential revenues will likely decrease or not materialise and such decreased revenues may increase the requirements for capital. Failure to obtain sufficient financing will result in a delay or indefinite postponement of development of revenue streams.

k) Risks Relating to Market Price of GMG Shares and Volatility

Securities litigation could result in substantial costs and damages and divert management’s attention and resources. The fact that no market currently exists for the GMG Shares may affect the pricing of the GMG Shares in the secondary market, the transparency and availability of trading prices and the liquidity of the GMG Shares. The market price of the GMG Shares is affected by many other variables which are not directly related to its success and are, therefore, not within its control. These include other developments that affect the market for all comparable securities, the breadth of the public market for GMG’s Shares and the attractiveness of alternative investments. The effect of these and other factors on the market price of the GMG Shares is expected to make the GMG Share price volatile in the future, which may result in losses to investors.

l) Dilution

Future sales or issuances of equity securities could decrease the value of the GMG Shares, dilute shareholders’ voting power and reduce future potential earnings per Share. The Company may sell additional equity securities in subsequent offerings (including through the sale of securities convertible into GMG Shares) and may issue additional equity securities to finance its operations, acquisitions or other projects. The Company cannot predict the size of future sales and issuances of equity securities or the effect, if any, that future sales and issuances of equity securities will have on the market price of the GMG Shares. Sales or issuances of a substantial number of equity securities, or the perception that such sales could occur, may adversely affect prevailing market prices for the GMG Shares. With any additional sale or issuance of equity securities, investors will suffer dilution of their voting power and may experience dilution in its earnings per share.

m) The Australian R&D Tax Regime May Change, Or The Company May Become Ineligible For R&D Incentives In Future.

GMG has obtained substantial income from grants, tax concessions and subsidies. It received approximately $802,000 in Fiscal Year 2019 and approximately $933,000 in Fiscal Year 2020 under the Australian R&D tax offset scheme. If this incentive were to be unavailable to GMG going forward, the business may have to raise additional capital from investors, and this may cause further dilution and reduce the returns for existing shareholders.

n) Operating History

o) Negative Operating Cash Flow

p) No Dividends Expected for Foreseeable Future

The Company intends to retain earnings, if any, to finance the growth and development of its business and does not intend to pay cash dividends on GMG Shares in the foreseeable future. The payment of

future cash dividends, if any, will be reviewed periodically by the Company’s Board and will depend upon, among other things, conditions then existing including earnings, financial condition and capital requirements, restrictions in financing agreements, business opportunities and conditions and other factors. See “ Dividends ”.

q) Going Concern

r) Failure of The Thermal XR Powered By GMG Graphene Offering and Other Products

s) Technology May Not Be Effectively Commercialized

t) Intellectual Property Protection

The Company cannot provide any assurance that any patent or intellectual property applications will be approved in future. Even if they are approved, such patents, trademarks or other intellectual property registrations may be successfully challenged by others or invalidated. The Company’s success and ability to compete are substantially dependent on technologies and processes which it will need to protect through a combination of patent, copyright, trademark law or alternatively keep confidential as ‘trade secrets’.

copyrights from infringement or claims of invalidity now or in future. Litigation may be necessary in the future to enforce GMG’s intellectual property rights, to protect the Company’s trade secrets, to determine the validity and scope of the proprietary rights of others, or to defend against claims of infringement. Any such litigation could result in substantial costs and diversion of resources and could have a material adverse effect on GMG’s business, operating results, and financial condition. There can be no assurance that the Company’s means of protecting its proprietary rights will be adequate or that competitors will not independently develop similar services or products. Any failure by GMG to adequately protect its intellectual property could have a material adverse effect on its business, operating results and financial condition.

u) GMG’s technology may be unable to achieve broad market acceptance and, consequently, limit its ability to generate revenue and profits from new products.

v) Performance and Scalability

To be successful, the Company will have to successfully scale its internally developed or codeveloped products and solutions, while ensuring quality and reliability.

The Company may produce a high-quality prototype but may not be able to develop a scalable production process or seek a suitable licensee. For example, the groundwork done on the G+AI Batteries in partnership with UQ has yielded superior performance results such as high energy density. Despite these results and the research project that is expected to commence (subject to finalising agreements) with UQ, GMG may be unable to build a methodology for continuous commercial production of cathode materials for the G+AI Battery. Thus, even if a high-performance technology is developed, there may be challenges associated with scaling production of cathodes or cathode material and commercialising the product.

w) Graphene Demand Risk

x) Graphene Price Fluctuations

y) Competition

z) Graphene Standard

aa) Management of Growth

The Company could experience growth that could put a significant strain on each of the Company’s managerial, operational and financial resources. The Company must implement and constantly

improve its operational and financial systems and expand, train, and manage its employee base to manage growth. In addition, the Company expects that its operational and management systems will face increased strain as a result of the expansion of the Company’s business. The Company might not be able to effectively manage the expansion of its operations and systems, and its procedures and controls might not be adequate to support its operations. In addition, management might not be able to make and execute decisions rapidly enough to exploit market opportunities for the expansion of the Company’s business. If the Company is unable to manage its growth effectively, its business, operations, and financial condition will suffer.

bb) Execution of Business Plan

cc) Obtaining and Renewing Approvals, Licenses and Permits

dd) Country risk

The Company is exploring operating in various countries/jurisdictions. Inability to secure productrelated (and other) licenses, approvals and permits required in each country may limit or prevent the production, distribution or sale of GMG’s products and solutions in one or more countries or states or territories. Further, the company may face losses due to various political, economic, social, technological, environmental and legal aspects of operating in a particular country, state or territory.

ee) Governmental Regulation

labour standards and occupational health and safety. The costs associated with legal compliance may be substantial. In addition, possible future laws and regulations, changes to existing laws and regulations (including imposition of more stringent safety standards around the handling of nano materials) or more stringent enforcement of current laws and regulations by governmental authorities, could cause additional expense, capital expenditures, restrictions on or suspension of the Company’s operations and planned operations and delays in the Company’s development. Moreover, these laws and regulations may allow governmental authorities and private parties to bring lawsuits based upon damages to property and injury to persons resulting from the environmental, health and safety impacts of its operations. Such legal actions could lead to the imposition of substantial fines, penalties or other civil or criminal sanctions. It may be difficult to strictly comply with all regulations that will be imposed on the Company. The Company will retain competent and well-trained individuals and consultants to assist the Company with compliance with such laws and regulations, however, even with the application of considerable skill GMG may inadvertently fail to comply with certain laws. Failure to comply with laws and regulations could lead to financial restatements, fines, penalties other material negative impacts on the Company.

ff) Provision of services

The Company is and will be engaging employees and contractors for the provision of various services in relation to its various products and solutions, including the TXR service offering. There will be various risks with respect to the health and safety of personnel involved in the provision of services. Such personnel may be required to perform hazardous work including working at heights and high voltage electrical work (e.g. work on air conditioners for its TXR application solution), and there will be associated risks. The company may face potential liabilities or damages associated with failure to perform work safely and effectively.

gg) Operating Hazards, Risks and Insurance

The ownership, operation and development of a manufacturing and production facility involves many risks which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Other operating risks include environmental hazards, industrial accidents, explosions and third-party accidents, mechanical failure, power interruptions, flooding, earthquakes and periodic interruptions due to inclement or hazardous weather conditions. These occurrences could result in environmental damage and liabilities, work stoppages, delayed production and resultant losses, increased production costs, damage to, or destruction of, manufacturing or production facilities and resultant losses, personal injury or death and resultant losses, asset write downs, monetary losses, claims for compensation of loss of life and/or damages by third parties in connection with accidents (for loss of life and/or damages and related pain and suffering) that occur on company property, and punitive awards in connection with those claims and other liabilities. It is not always possible to fully insure against such risks, and the Company may decide not to take out insurance against such risks as a result of high premiums or other reasons. Should such liabilities arise they could reduce or eliminate any future profitability and result in an increase in costs and a decline in value of the Company’s securities. Liabilities that the Company incurs may exceed the policy limits of insurance coverage or may not be covered by insurance, in which event it could incur significant costs that could adversely impact its business, operations, potential profitability or value. Despite efforts to attract and retain qualified personnel, as well as the retention of qualified consultants, to manage the Company’s interests, even when those efforts are successful, people are fallible and human error could result in significant uninsured losses to the Company.

hh) Environmental Hazards

The Company’s operations will be subject to environmental regulation. Environmental legislation involves strict standards and may entail increased scrutiny, fines and penalties for noncompliance, stringent environmental assessments of proposed projects and a high degree of responsibility for companies and their officers, directors and employees. Changes in environmental regulation, if any, may adversely impact the Company’s operations and future potential profitability. The Company may be liable for losses associated with such hazards, or may be forced to undertake extensive remedial cleanup action or to pay for governmental remedial cleanup actions, even in cases where such hazards have been caused by previous or existing owners or operators of the property, or by the past or present owners of adjacent properties or by natural conditions. The costs of such cleanup actions may have a material adverse impact on the Company’s operations and future potential profitability.

ii) Employee Recruitment and Retention

jj) Shortages of Critical Parts, Equipment and Skilled Labour

kk) Raw Material Price Fluctuations

ll) Delays, Disruptions, or Quality Control Problems In Manufacturing Operations

properly addressed and rectified.

Also, GMG may look to build a new manufacturing facility to manufacture graphene or grapheneenhanced products. The risk of delays, disruptions and quality control problems are more likely in relation to new production facilities, as the Company would likely modify its engineering and production techniques, and/or expands its capacity.

GMG’s failure to maintain appropriate quality assurance processes could result in increased product failures, loss of customers, increased warranty provisions, logistical costs and delays, and potential damages for breaches of contracts. Any of these developments could have a material adverse effect on the Company’s business, financial condition, and results of operations.

mm) Dependence on Management and Key Personnel

nn) Information Technology Interruptions or Breaches

The Company’s business operations are managed through a variety of information technology systems. These systems govern all aspects of its operations. Also, GMG uses storage using cloudbased hosting service and physical storage. While the Company has implemented a number of measures to keep its technology systems fully operational and to mitigate the risks associated with a failure of its systems, the Company’s systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, cyber-attacks, security breaches, catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes, acts of war or terrorism, and usage errors by its employees. If the Company’s information technology systems are damaged or cease to function properly, the Company may have to make a significant investment to fix or replace them and the Company may suffer loss of critical data and interruptions or delays in its operations in the interim. Any material interruption in its information technology systems could have a material adverse effect on the Company’s business, prospects, financial condition, results of operations, and cash flows.

oo) Product Liability Lawsuits Against The Company Could Cause The Company To Incur Substantial Liabilities, And It May Be Subject To Product Recalls For Product Defects That Are Self-Imposed Or Imposed By Regulators

negative publicity surrounding any assertion that the products caused illness or physical harm could adversely affect the Company's reputation and brand equity. An example of a product liability risk may be in relation to an adverse impact of the TXR application on air conditioners.

pp) Claims and Legal Proceedings

qq) Control Over Financial Reporting May Not Prevent or Detect Misstatements, and Projections Of Any Evaluation Of Effectiveness To Future Periods May Be Subject To Changes In Conditions Or Deterioration In Compliance With Procedures.

The Company has a limited administrative staff, meaning internal controls which rely on segregation of duties in many cases are not possible. The Company does not have the resources, size and scale to hire additional staff to address this potential weakness currently. To help mitigate the impact of this, the Company relies on the performance of compensating procedures including senior management’s review and approval.

rr) Conflicts of Interest

ss) No Market for the Options and Warrants

The Options, Warrants and Replacement Warrants, as defined in the Arrangement Agreement, will not be listed for trading on any stock exchange following the listing and there is no market through which they may be sold. The Company has no intention to apply to any stock exchange for listing of the Warrants and Replacement Warrants. As a result, holders of warrants may not be able to resell any Warrants or Replacement Warrants and if sale is made over the counter, the expected or fair price may not be realised.

tt) Enforcement of Judgments Against Foreign Persons May Not Be Possible

9. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

The key reported numbers requiring the use of estimates and critical judgments that may potentially have a significant impact on the Company’s earnings and financial position are the useful life of property and equipment and the recognition and amortization of intangible assets.

Intangible assets and property and equipment are amortized or depreciated over their useful lives. Useful lives are based on management’s estimates of the period that the assets will generate revenue, which are periodically reviewed for continued appropriateness. Changes to estimates can result in significant variations in the amounts charged to the statement of comprehensive income in specific periods.

Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

10. FUTURE CHANGE IN ACCOUNTING POLICIES

The Company has applied the following standards and amendments for the first time in their annual reporting period commencing July 1, 2019:

i. AASB16 Leases

The Company had to change its accounting policies as a result of adopting AASB 16. The Company elected to adopt the new rules retrospectively and applied the practical expedients relating to short term leases and, therefore, there was no cumulative effect of initially applying the new standard on July 1, 2019. The other amendments listed below did not have any impact on the amounts recognized in prior years and are not expected to significantly affect the current or future years.

ii. AASB2018-1 Amendments to Australian Accounting Standards - Annual Improvements 2015-2017 Cycle
iii. Interpretation 23 Uncertainty over Income Tax Treatments.

11. RECENT EVENTS

In financial terms, the Company benefited from:

The Australian Government’s JobKeeper payment scheme, a subsidy for businesses affected by COVID-19. Under this scheme the Company received $78,000 in the 2020 financial year.
The Queensland State Government’s cash flow boost program to support small and medium business and initiatives to rebate payroll tax payments. Under these schemes, the Company received another $50,000 in the 2020 financial year.

In terms of effects on the Company:

The Company has maintained access to capital during the 2020 financial year and the first half of the 2021 financial year, as evidenced by its capital raisings during this period. Capital markets conditions have been receptive to the Company for most of the pandemic to date.
The TXR demonstration projects may have progressed more quickly had it not been for COVID-19.
While interstate and international travel has been very restricted, the use of technology has greatly mitigated the general impact on the business these restrictions would have otherwise had.

APPENDIX C

GRAPHENE MANUFACTURING GROUP PTY LTD. UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED DECEMBER 31, 2020

Please see attached

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Graphene Manufacturing Group Pty Ltd ABN 83 614 164 877

Interim financial report for the three and six months ended 31 December 2020

��

Graphene Manufacturing Group Pty Ltd Condensed statement of profit or loss and other comprehensive income For the three and six months ended 31 December 2020

		Three months ended	Three months ended	Six months ended	Six months ended
		31 December	31 December	31 December	31 December
		2020	2019	2020	2019
	Notes	$	$	$	$
Sale of goods		44,296	22,500	94,623	44,790
Other income	2(a)	241	263	469	677
Other gains/(losses) – net	2(b)	44,411	(577)	208,864	(1,751)
Professional and consulting fees		(146,333)	(162,639)	(351,835)	(291,520)
Raw materials and production inputs		(6,670)	(1,667)	(12,559)	(3,851)
Employee benefits expense		(644,364)	(481,884)	(1,146,275)	(934,376)
Depreciation and amortisation expense		(53,811)	(79,158)	(99,253)	(167,506)
Occupancy and utilities expenses		(37,182)	(23,010)	(62,488)	(43,698)
Travel expenses		(1,916)	(9,442)	(1,917)	(46,764)
Factory costs		(35,685)	(37,848)	(62,233)	(78,806)
Share based payments expense		(29,945)	(25,449)	(42,469)	(54,329)
Other expenses		(58,169)	(51,606)	(115,914)	(88,226)
Finance expenses		(423)	(641)	(897)	(1,014)
Loss before income tax		(925,550)	(851,158)	(1,591,884)	(1,666,374)
Income tax expense	2(c)	-	-	-	-
Loss for the period		(925,550)	(851,158)	(1,591,884)	(1,666,374)
Other comprehensive income for the
period, net of tax		-	-	-	-
Total comprehensive loss for the period		(925,550)	(851,158)	(1,591,884)	(1,666,374)
Total comprehensive loss for the period is
attributable to:
Owners of Graphene Manufacturing
Group Pty Ltd		(925,550)	(851,158)	(1,591,884)	(1,666,374)

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

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Graphene Manufacturing Group Pty Ltd Condensed balance sheet As at 31 December 2020

		31 December	30 June
		2020	2020
	Notes	$	$
ASSETS
Current assets
Cash and cash equivalents		1,624,817	658,560
Trade and other receivables	3	340,124	36,360
Inventories	4	100,692	6,037
Other current assets		15,320	8,720
Research and development grants receivables		-	933,821
Total current assets		2,080,953	1,643,498
Non-current assets
Property, plant and equipment	5	303,209	227,709
Intangible assets	6	36,499	31,475
Total non-current assets		339,708	259,184
Total assets		2,420,661	1,902,682
LIABILITIES
Current liabilities
Trade and other payables	7	200,495	175,553
Employee benefit obligations		91,111	42,451
Deferred revenue	8	80,000	-
Total current liabilities		371,606	218,004
Total non-current liabilities		-	-
Total liabilities		371,606	218,004
Net assets		2,049,055	1,684,678
EQUITY
Contributed equity		7,667,371	5,768,589
Reserves		243,660	186,181
Accumulated losses		(5,861,976)	(4,270,092)
Total equity		2,049,055	1,684,678

The above condensed balance sheet should be read in conjunction with the accompanying notes.

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Graphene Manufacturing Group Pty Ltd Condensed statement of changes in equity For the half year 31 December 2020

		Contributed		Accumulated
		equity	Reserves	losses	Total
	Notes	$	$	$	$
Balance at 1 July 2019		4,645,958	59,332	(2,203,002)	2,502,288
Loss for the half year		-	-	(1,666,374)	(1,666,374)
Total comprehensive loss for the half year		-	-	(1,666,374)	(1,666,374)
Transactions with owners in their capacity as
owners:
Share option plan		-	54,329	-	54,329
Balance at 31 December 2019		4,645,958	113,661	(3,869,376)	890,243
Balance at 30 June 2020		5,768,589	186,181	(4,270,092)	1,684,678
Loss for the half year		-	-	(1,591,884)	(1,591,884)
Total comprehensive loss for the half year		-	-	(1,591,884)	(1,591,884)
Transactions with owners in their capacity as
owners:
Contributions of equity	9	2,395,937	-	-	2,395,937
Transaction costs on contributions of equity	9	(497,155)	15,010	-	(482,145)
Share option plan		-	42,469	-	42,469
		1,898,782	57,479	-	1,956,261
Balance at 31 December 2020		7,667,371	243,660	(5,861,976)	2,049,055

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Graphene Manufacturing Group Pty Ltd Condensed statement of cash flows For the half year 31 December 2020

		Half	year
		31 December	31	December
		2020		2019
	Notes	$		$
Cash flows from operating activities
Receipts from customers and government subsidies (inclusive of GST)		404,657		49,062
Payments to suppliers and employees (inclusive of GST)		(2,105,686)	(1,693,216)
		(1,701,029)	(1,644,154)
Research and development tax incentive received		933,821		802,398
Interest received		347		677
Interest paid		(897)		(1,013)
Net cash outflow from operating activities		(767,758)		(842,092)
Cash flows from investing activities
Payments for property, plant and equipment	5	(172,985)		(91,779)
Payments for intangibles	6	(6,792)		(3,315)
Net cash outflow from investing activities		(179,777)		(95,094)
Cash flows from financing activities
Proceeds from issues of shares and other equity securities		2,126,025		-
Share issue transaction costs		(212,233)		-
Net cash inflow from financing activities		1,913,792		-
Net increase/(decrease) in cash and cash equivalents		966,257		(937,186)
Cash and cash equivalents at the beginning of the financial period		658,560		1,828,380
Cash and cash equivalents at end of the half year		1,624,817		891,194

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

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Graphene Manufacturing Group Pty Ltd Notes to the condensed financial statements 31 December 2020

1 Basis of preparation of interim report

This condensed interim financial report for the half year reporting period ended 31 December 2020 have been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting .

The interim 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 report for the year ended 30 June 2020 and any public announcements made by Graphene Manufacturing Group Pty Ltd during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 .

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

Going concern

These financial statements were prepared on a going concern basis of accounting, which assumes that the Company will continue operations for the foreseeable future and be able to realise the carrying value of its assets and discharge its liabilities and commitments in the normal course of business. The Company generated revenue from operations of $94,623 and incurred a net loss of $1,591,884 for the six months ended 31 December 2020. However, the directors believe that the existing cash resources combined with the expected successful completion of both the transaction and placement, as disclosed in note 10, are sufficient to meet its obligations for at least twelve months from the end of the reporting period.

2 Other income and expense items

(a) Other income

			Three months ended	Three months ended	Six months ended	Six months ended
		31	December	31 December	31 December	31 December
			2020	2019	2020	2019
			$	$	$	$
Interest	income		241	263	347	677
Sundry	income		-	-	122	-
			241	263	469	677

(b) Other gains/(losses)

(b) Other gains/(losses)
	Three months ended		Six months ended
	31 December	31 December	31 December	31 December
	2020	2019	2020	2019
	$	$	$	$
Net foreign exchange gains/(losses)	(4,089)	(577)	(4,636)	(1,751)
Government COVID-19 subsidies	48,500	-	213,500	-
	44,411	(577)	208,864	(1,751)

(c) Income tax expense

Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. The unused tax losses incurred by the Company are not recognised as there is uncertainty on when the Company is likely to generate taxable income in the foreseeable future. They can be carried forward indefinitely. As a consequence, there is no income tax expense.

��

Graphene Manufacturing Group Pty Ltd Notes to the condensed financial statements 31 December 2020

(continued)

3 Trade and other receivables

3 Trade and other receivables
	31 December	30 June
	2020	2020
	$	$
Trade receivables	22,000	22,000
Other receivables	327	-
Goods and services tax receivable	50,338	2,021
Prepayments	267,459	12,339
	340,124	36,360
4 Inventories
	31 December	30 June
	2020	2020
	$	$
Graphene powder	7,315	6,037
Energy saving products	93,377	-
	100,692	6,037

5 Property, plant and equipment

5 Property, plant and equipment
	Plant and	Leasehold
	equipment	improvements	Total
	$	$	$
At 30 June 2020
Cost	1,053,927	6,645	1,060,572
Accumulated depreciation	(831,214)	(1,649)	(832,863)
Net book amount	222,713	4,996	227,709
Half year ended 31 December 2020
Opening net book amount	222,713	4,996	227,709
Additions	172,985	-	172,985
Depreciation charge	(96,816)	(669)	(97,485)
Closing net book amount	298,882	4,327	303,209
At 31 December 2020
Cost	1,226,911	6,645	1,233,556
Accumulated depreciation	(928,029)	(2,318)	(930,347)
Net book amount	298,882	4,327	303,209

��

Graphene Manufacturing Group Pty Ltd Notes to the condensed financial statements 31 December 2020 (continued)

6 Intangible assets

6 Intangible assets
	Patents,
	trademarks
	and other
	rights	Website	Total
	$	$	$
At 30 June 2020
Cost	37,430	3,547	40,977
Accumulated amortisation and impairment	(8,557)	(945)	(9,502)
Net book amount	28,873	2,602	31,475
Half year ended 31 December 2020
Opening net book amount	28,873	2,602	31,475
Additions	6,792	-	6,792
Amortisation charge	(1,410)	(358)	(1,768)
Closing net book amount	34,255	2,244	36,499
At 31 December 2020
Cost	44,222	3,547	47,769
Accumulated amortisation and impairment	(9,967)	(1,303)	(11,270)
Net book amount	34,255	2,244	36,499
7 Trade and other payables
		31 December	30 June
		2020	2020
		$	$
Trade payables		26,627	27,652
Accrued expenses		61,956	79,017
Other payables		111,912	68,884
		200,495	175,553
8 Deferred income
		31 December	30 June
		2020	2020
		$	$
Deferred revenue		80,000	-

During the quarter, the Company signed an agreement to supply $100,000 of graphene powder to a customer, and received a cash payment for the entire order in advance. 20% of this order had been shipped as at 31 December 2020, and therefore $80,000 remains in deferred revenue.

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Graphene Manufacturing Group Pty Ltd Notes to the condensed financial statements 31 December 2020 (continued)

9 Equity securities issued

9 Equity securities issued
	31 December	31 December	31 December	31 December
	2020	2019	2020	2019
	Shares	Shares	$	$
Issues of ordinary shares during the half year ended
Issue of shares	191,675	-	2,395,937	-
Share issue costs	-	-	(497,155)	-
	191,675	-	1,898,782	-

10 Events occurring after the reporting period

In accordance with the Arrangement Agreement signed on 17 December 2020 with Cuspis Capital Ltd (TSXV:CUSP) (“Cuspis”), a capital pool company as defined under TSX Venture Exchange (“TSXV” or the “Exchange”) Policy 2.4 - Capital Pool Companies, whereby Cuspis and the Company will complete an arrangement, amalgamation, share exchange, or similar transaction to ultimately form the resulting issuer (the “Resulting Issuer”) that will continue on the business of the Company (the “Transaction”), subject to certain terms and conditions, the Company held an extraordinary meeting of the Company’s shareholders on January 8, 2021. At the meeting shareholders approved the (i) conversion of the Company from a proprietary company to a public company (ii) the change of the Company's name from "Graphene Manufacturing Group Pty Ltd. ACN 614 164 877" to "Graphene Manufacturing Group Ltd. ACN 614 164 877"; (iii) the adoption of a new Company constitution; and (iv) a share split on the basis of twenty two (22) post-Split ordinary shares in the capital of Company for every one (1) pre-split ordinary share held.

On 18 January 2021, the Company filed a non-offering preliminary prospectus (“Prospectus”) with the securities regulatory authorities in the Provinces of Ontario, British Columbia, Saskatchewan and Alberta to enable the Company to become a reporting issuer pursuant to applicable securities legislation in the Provinces of Ontario, British Columbia, Saskatchewan and Alberta, and to enable Cuspis to complete the Transaction. A copy of the Prospectus can be located on www.sedar.com.

On 9 February 2021, the Company launched a private placement (the “Placement”), to raise up to C$1.5 million in gross proceeds through the issuance of subscription receipts (the "Subscription Receipts") at a price of C$0.65 per Subscription Receipt, being an implied pre-money valuation of C$42.8m (assuming completion of the Transaction). At the GMG Board’s discretion, the Placement may be increased to raise gross proceeds of up to C$2.0 million.

As part of the Transaction, GMG will effect a share split (the "Split") on the basis of twenty two (22) post-Split ordinary shares in the capital of GMG for every one (1) pre-Split ordinary share held. Each Subscription Receipt issued in connection with the Placement will automatically convert into a unit of GMG (each, a "Unit") upon the successful listing of the Company's post-Split ordinary shares (the "GMG Shares") on the TSXV. Each Unit will consist of one GMG Share and one half-warrant, with each full warrant exercisable for one GMG Share at a price of C$1.00 for a period of 18 months from the date of issuance.

In order to complete the Transaction, Cuspis is required to obtain shareholder approval. This will be sought at��

In the event the listing does not proceed, the subscription proceeds will be returned to the applicable subscribers. Investors in the Placement will be subject to a 4 month hold on their securities as required under Canadian securities laws. Further details of the Placement are described in the attached market release by Cuspis dated February 5, 2021.

The Company anticipates using the proceeds from the Placement for an investor relations marketing program and general working capital purposes.

��

Graphene Manufacturing Group Pty Ltd Notes to the condensed financial statements 31 December 2020 (continued)

10 Events occurring after the reporting period (continued)

No other matter or circumstance has occurred subsequent to period end that has significantly affected, or may significantly affect, the operations of the Company, the results of those operations or the state of affairs of the Company in subsequent financial periods.

11 Cash flow information

(a) Non-cash investing and financing activities

31 December 30 June 2020 2020 $ $ Share based payments charged to share issue costs 269,913 25,285

��

Graphene Manufacturing Group Pty Ltd Directors' declaration 31 December 2020

In the directors' opinion:

(a) the financial statements and notes set out on pages 1 to 9:
(i) comply with Accounting Standards and other mandatory professional reporting requirements, and
(ii) give a true and fair view of the entity's financial position as at 31 December 2020 and of its performance for the three and six month periods ended on that date, and
(b) there are reasonable grounds to believe that the Graphene Manufacturing Group Pty Ltd 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 directors.

" Christopher G. Ohlrich "

Christopher G Ohlrich Director

Brisbane ��February 2021

Graphene Manufacturing Group Pty Ltd Auditor's independence declaration 31 December 2020

==> picture [78 x 31] intentionally omitted <==

Tel: +61 7 3237 5999 Fax: +61 7 3221 9227 www.bdo.com.au

Level 10, 12 Creek St Brisbane QLD 4000 GPO Box 457 Brisbane QLD 4001 Australia

DECLARATION OF INDEPENDENCE BY R M SWABY TO THE DIRECTORS OF GRAPHENE MANUFACTURING GROUP PTY LTD

As lead auditor of Graphene Manufacturing Group Pty Ltd for the quarter ended 31 December 2020, I declare that, to the best of my knowledge and belief, there have been no contraventions of any applicable code of professional conduct in relation to the review.

"R M Swaby "

R M Swaby Director

BDO Audit Pty Ltd Brisbane, 21 February 2021

1 1

Tel: +61 7 3237 5999 Level 10, 12 Creek St Fax: +61 7 3221 9227 Brisbane QLD 4000 www.bdo.com.au GPO Box 457 Brisbane QLD 4001 Australia

==> picture [78 x 30] intentionally omitted <==

INDEPENDENT AUDITOR’S REVIEW REPORT

To the members of Graphene Manufacturing Group Pty Ltd

Report on the Interim Financial Report

Conclusion

We have reviewed the interim financial report of Graphene Manufacturing Group Pty Ltd (the Company), which comprises the statement of financial position as at 31 December 2020, the statement of profit or loss and other comprehensive income for the half year and quarter then ended, the statement of changes in equity and statement of cash flows for the quarter then ended, notes comprising a statement of significant accounting policies and other explanatory information, and the directors’ declaration.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the interim financial report of the Company does not present fairly, in all material respects, the financial position of the Company as at 31 December 2020, its financial performance for the half year and quarter then ended, and its cash flows for the quarter then ended in accordance with International Financial Reporting Standards International Accounting Standard 34: Interim Financial Reporting.

Emphasis of Matter

We draw attention to Note 10 of the financial report, which describes the progress of the Company’s proposed transaction and the steps remaining to complete the Transaction. Our opinion is not modified in respect of this matter

Directors’ responsibility for the Interim Financial Report

The directors of the company are responsible for the preparation of the interim financial report that gives a true and fair view in accordance with International Accounting Standard 134 Interim Financial Reporting and for such internal control as the directors determine is necessary to enable the preparation of the interim financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express a conclusion on the interim financial report based on our review. We conducted our review in accordance with International Standard on Review Engagements ISRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the interim financial report does not give a true and fair view of the Company’s financial position as at 31 December 2020 and its performance for the quarter ended on that date and complying with International Accounting Standard IAS 34 Interim Financial Reporting . As the auditor of the Company, ISRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

1 2

==> picture [78 x 30] intentionally omitted <==

A review of an interim financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards). We confirm that the independence declaration, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s review report.

BDO Audit Pty Ltd

" BDO "

" R M Swaby "

R M Swaby

Director

Brisbane, 21 February 2021

1 3

APPENDIX D

GRAPHENE MANUFACTURING GROUP PTY LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE INTERIM PERIOD ENDED DECEMBER 31, 2020

Please see attached

Graphene Manufacturing Group Pty Ltd.

MANAGEMENT DISCUSSION AND ANALYSIS (MD&A)

For the three-month and six-month periods ended December 31, 2020 and December 31, 2019

(in Australian dollars)

1. OVERVIEW

This management’s discussion and analysis (“MD&A”) relates to the operating results and financial position and cash flows of Graphene Manufacturing Group Pty Ltd (“GMG” or the “Company”) for the periods ended and December 31, 2020 and December 31, 2019. This report should be read in conjunction with the financial statements of the Company as at and for the periods ended December 31, 2020 and December 31, 2019 and related notes (the “Interim financial statements”). The period from July 1, 2019 to September 30, 2019 has been referred to as 3MFY20 or Q1FY20 and the period from July 1, 2020 to September 30, 2020 has been referred to as 3MFY21 or Q1FY21. The period from July 1, 2019 to December 31, 2019 has been referred to as 6MFY20 or H1FY20 and the period from July 1, 2020 to December 31, 2020 has been referred to as 6MFY21 or H1FY21. The period from October 1, 2019 to December 31, 2019 has been referred to as Q2FY20 and the period from October 1, 2020 to December 31, 2020 has been referred to as Q2FY21.

The financial statements of GMG, and extracts of those financial statements provided in this MD&A have been prepared in accordance with International Financial Reporting Standards (“IFRS”). References to the symbol AUD or $ or A$ means the Australian dollar, the official currency of Australia. References to the symbol CAD or C$ mean the Canadian dollar. Except as otherwise set out herein, all amounts expressed herein are in Australian dollars, the functional currency of the Company. As a result of the rounding of dollar differences, certain total dollar amounts in this MD&A may not add exactly to their constituent amounts. Throughout this MD&A, percentage changes are calculated using numbers rounded as they appear. Readers are cautioned that this MD&A contains certain forward-looking information. Please see the “Forward Looking Statements” section which follows.

This MD&A is prepared on February 21, 2021.

2. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This MD&A contains “forward looking statements” that reflect the Company’s expectations and projections about its future results. When used in this MD&A, forward looking statements can be identified by the use of words such as “may”, or by such words as “will”, “intend”, “believe”, “estimate”, “consider”, “expect”, “anticipate”, and “objective” and similar expressions or variations of such words. Forward looking statements are, by their nature, not guarantees of the Company’s future operational or financial performance and are subject to risks and uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. No representation or warranty is intended with respect to anticipated future results, or that estimates, or projections will be sustained.

3. COMPANY OVERVIEW

GMG is a clean-technology company which currently seeks to offer energy saving products and solutions and energy storage products, enabled by graphene manufactured in-house via a proprietary production process. GMG has 15 full-time, one part time and three casual employees in Australia and two contractors, one full-time located in Singapore and one part-time in Australia. In 2017 and 2018, GMG developed its proprietary production process to decompose natural gas (i.e. methane) into its elements, carbon (as graphene), hydrogen and some residual hydrocarbon gases. This process produces high quality, low cost, scalable, ‘tuneable’ and low contaminant graphene suitable for use in clean-technology and other applications.

GMG’s strategy has evolved over time. While GMG graphene may be suitable for a wide range of industries, GMG has narrowed its current focus to target select applications and industries. GMG’s management team (‘Management’) believes that focusing on downstream applications will provide a higher return on in-house graphene production. Also, the vertically integrated approach will enable it to build a long-term competitive advantage. In line with this approach, GMG’s initial focus has been developing applications for energy savings and energy storage.

In the energy savings segment, GMG has focused on graphene enhanced heating, ventilation and air conditioning (HVAC) coating (or energy-saving paint), lubricants and fluids. In the energy storage segment, GMG supplies graphene to enhance the performance of existing battery technologies (e.g. lithium ion), and, pursuant to a research agreement and a license agreement dated February 26, 2021, GMG and University of Queensland are working collaboratively with financial support from the Australian Government to progress R&D and commercialization of graphene aluminium-ion batteries (G+AI Batteries).

4. FINANCIAL HIGHLIGHTS

Statement of comprehensive income

$'000	3 months Q2 FY21 Q1 FY20 44 23 45 (0) 89 22 (674) (507) (42) (40) (37) (23) (206) (224) (960) (794) (871) (771) (0) (1) (54) (79) (925) (851)	6 months
		H1 FY21 H1 FY20
Revenue from operations Other income including subsidies, grants and incentives Total revenue Employee expenses Plant expenses Occupancy expenses Overheads expenses Total operating expenses EBITDA Finance costs Depreciation Loss before income tax		95 45 209 (1)
		304 44 (1,189) (989) (75) (83) (62) (44) (470) (427)
		(1,796) (1,542)
		(1,492) (1,498) (1) (1) (99) (168)
		(1,592) (1,666)

Statement of Financial position

$ '000	30-Dec-20 30-Jun-20
Cash and cash equivalents Trade and other receivables Research and development grants receivable Other current assets Property plant and equipment Intangible assets Total assets Current liabilities Long term liabilities Total liabilities Total equity	1,625 659 340 36 - 934 116 15 303 228 36 31
	2,421 1,903 (372) (218) - -
	(372) (218)
	2,049 1,685

Statement of cash flows

$’000	H1FY21 H2FY20
Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Total cash flows	(768) (842) (180) (95) 1,914 -
	966 (937)

Significant events

a. Private placement

On October 30, 2020, the Company completed a private placement of ordinary shares at a price of $12.50 per share, resulting in gross proceeds (before fees) of $1,726,025. This resulted in the issuance of 138,082 shares to investors and 21,593 shares to Company’s financial advisors. In total during H1FY21, the Company issued 191,675 shares, resulting in gross proceeds (before fees) of $2,395,937.

b. Letter of Intent (LOI) and Arrangement Agreement

c. Arrangement Agreement

Pursuant to the LOI, on December 17, 2020, GMG entered into an Arrangement agreement with Cuspis Capital. Under this Arrangement Agreement Cuspis Capital has called a special meeting of Cuspis’ shareholders to be held on March 9, 2021 to pass a resolution for the Arrangement with GMG under Section 182 of the Business Corporations Act (Ontario) (OBCA). GMG shares will be split in the ratio of 1:22. Then, under the Arrangement, each Cuspis shareholder will receive GMG shares in lieu of Cuspis shares based on an exchange ratio of 0.403. Furthermore, at the special meeting, Cuspis will table a resolution for delisting of shares of Cuspis on the TSXV.

Separately, GMG will apply for the listing of its shares on the TSXV. One of the conditions for the completion of the Arrangement is that GMG shares issued to Cuspis shareholders should be approved for listing on the TSXV.

Subsequent events

a. Private Placement

GMG intends to complete a non-brokered private placement (the “ Offering ”) of up to 2,310,000 subscription receipts (the “ Subscription Receipts ”), at a price of C$0.65 per Subscription Receipt, for aggregate gross proceeds of up to C$1,501,500, with the option to increase the Offering for the issuance of up to 3,077,000 Subscription Receipts for aggregate gross proceeds of up to C$2,000,050, at the discretion of GMG’s board of directors.

GMG will effect a share split (the " Split ") on the basis of twenty two (22) post-Split ordinary shares in the capital of GMG for every one (1) pre-Split ordinary share held, in connection with the QT. The Subscription Receipts will automatically convert into units of GMG (the “ Units ”) immediately prior to the listing of GMG’s post-Split ordinary shares (the " GMG Shares ") on the Exchange in connection with the QT. Each Unit will consist one (1) GMG Share and one-half (1/2) of one ordinary share purchase warrant in the capital of GMG (each, a “ GMG Warrant ”), with each whole GMG Warrant exercisable into one (1) GMG Share at a price of C$1.00 for a period of eighteen (18) months from the date of issuance.

5. OPERATIONS

a. Statement of profit or loss and other comprehensive income

	3 months 6 months Q2FY21 Q2 FY20 H1 FY21 H1 FY20 44 23 95 45 0 0 0 1 44 (1) 209 (2)
$'000 Classification
Revenue from operations Revenue Other income Revenue Other gains Revenue Employee benefits expense Employee Professional and consulting fees Overheads D&A D&A Travel Overheads Raw material and production inputs Plant Occupancy Occupancy Factory costs Plant Share based payments expense Employee Other expenses Overheads Finance costs Finance Loss before income tax Other comprehensive income/loss Total comprehensive loss for the period
	89 22 304 44 (644) (482) (1,146) (934) (146) (163) (352) (292) (54) (79) (99) (168) (2) (9) (2) (47) (7) (2) (13) (4) (37) (23) (62) (44) (36) (38) (62) (79) (30) (25) (42) (54) (58) (52) (116) (88) (0) (1) (1) (1)
	(1,014) (873) (1,896) (1,710) (926) (851) (1,592) (1,666)
	(926) (851) (1,592) (1,666)

Non-IFRS Financial Measures

This MD&A does not include measures such as Adjusted EBITDA, which have not been prepared in accordance with IFRS, because, in H1FY20 and H1FY21, the business did not achieve significant sales revenue. Therefore, Management believes that using an Adjusted EBITDA in conjunction with the ‘Total comprehensive loss for the period’, does not provide any meaningful insight.

b. Revenues

$ '000	3 months Q2FY21 Q2 FY20 44 23 49 - (4) (0) 89 22	6 months
		H1 FY21 H1 FY20
Revenues from operations Grants, subsidies and tax incentives Interest, sundry and forex gains Total revenue		95 45 214 - (4) (1) 304 44

GMG had a ‘take or pay’ style arrangement with a customer under which it has committed to supply graphene for a research project for a fixed quarterly fee. For the period ended December 31, 2021, GMG generated revenues of $40K through this arrangement. In this period, GMG also sold 40kg of graphene to one customer. In H2FY21, the remainder of ‘Revenues from operations’ relates to graphene powder sales, sale of TXR kits, sale of TXR projects and sale of graphene in lubricants. In the six-month period ending December 31, 2019, GMG recorded $40K ‘take or pay’ revenue relating to the research project and the remaining recorded revenue was from the sale of graphene powder.

The business has received grants, subsidies and tax incentives, which are recognized as other gains. The largest component of this item is the refundable R&D tax offset which was $934K in FY20 and $802K in FY19. GMG receives external advice on this process of submitting R&D tax offset at the completion of each financial year. This R&D tax offset is recognized only once a year. Thus, no revenue in relation to this tax offset is recognized in H1FY21 or H1FY20. In H1FY21, over $213K relates to government subsidies received relating to COVID-19.

The energy saving HVAC coating, TXR has been trialed and is now being offered to paying customers. GMG supplies graphene to an Australian coatings technology company that specialises in coatings for the HVAC industry (or ‘TXR Supplier’), which manufactures TXR. GMG then buys back the TXR under supply and distribution agreements, which were signed in November 2020. GMG enjoys exclusive distribution rights for this product in most regions in the world, including the Americas, Middle East, Europe, Africa and NE Asia (China, Japan and Korea). This will allow GMG to adopt a value-based pricing approach for distribution, supply and install projects of this coating. For regions in which GMG does not enjoy exclusivity under the TXR Agreements, it can still operate on a non-exclusive basis. In the months leading up to November 2020, various free trials were conducted to demonstrate the efficacy of the solution and this is ongoing. GMG is currently receiving inquiries from prospective customers for this product, Thermal XR powered by GMG graphene.

In FY21, Management expects R&D expense and hence revenue from tax incentives to be received again, but the amount received will depend on the amount of eligible expenditure incurred during the year and timing of GMG’s transition from a predominantly R&D focus to a commercial operations phase. The revenue from products is expected to be largely from sales of full service TXR projects and resale of TXR products in Australia and internationally.

c. Cost of sales and gross profit

Revenue from operations in H1FY21 was approximately $94K and approximately $45K in H1FY20. Costs considered as direct costs include:

Light, power and heating
Feed gas

$ '000	3 months Q2FY21 Q2 FY20 - 0.2	6 months
		H1 FY21 H1 FY20
Agents Commission		- 0.2

$ '000	3 months Q2FY21 Q2 FY20 3.7 0.5 0.0 0.3 3.7 1.0	6 months
		H1 FY21 H1 FY20
Cost of Goods Sold Cost of Goods Sold - Samples Total cost of sales		5.9 0.9 3.1 1.6 9.1 2.6

The cost of raw materials required to produce graphene is very low. In H1FY20, there was no revenue corresponding to ‘Cost of Goods Sold – samples’. Excluding this line item, the ‘Total cost of sales’ account for less than 10% of the ‘Revenue from operations’. The business does not record direct labor cost in inventory (or cost of sales), and all labor costs are directly expensed as operating costs due to complexity of allocating various personnel costs to inventory (and cost of sales). Management believes that the business will operate at scale with high operating leverage and at high gross margin, hence, the cost of measuring gross margin accurately outweighs the benefit. Selling graphene powder is not central to the strategy of the company. Future revenue is targeted to be driven by products and solutions enhanced with GMG’s graphene powder, which are currently at various stages of commercialization. Management believes that the margin for these products will be higher and thus consider gross margin to be less relevant. However, Management will continually assess how best to measure and monitor profitability metrics.

d. Operating costs

$'000	H1FY21 H1FY20
Employee Occupancy Plant Overhead Total operatingexpenses	(1,189) (989) (62) (44) (75) (83) (470) (427)
	(1,796) (1,542)

Following is a description of high-level expense categories of GMG:

i. Employee expenses

Employee expenses consist of salaries, on-costs (e.g. superannuation), and share based payments. The total amount to be expensed as share based payments is determined by reference to the fair value of the options granted under the employee share option plan,

including any market performance conditions (e.g. the entity’s share price); and
excluding the impact of any service-based vesting conditions (for example, remaining an employee of the entity for a period of time).

The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. Total salary costs have increased with increases in the number of employees.

ii. Occupancy

Occupancy expenses relate primarily to leased premises. In both the six-month periods ending December 31, 2020 and December 31, 2019, leased premises include those where production facilities are located and a lease for new premises, where the Company’s head office is currently located,

signed in October 2020. The monthly lease expense for this office is $2K per month. As for the Company’s other leases, this short-term lease is recognised on a straight-line basis as an expense. The rent expenses increased from $29K to $34K from H1FY20 to H1FY21.

Other expenses in this category include cleaning, light, power, heating, telephone internet, repairs and maintenance (R&M) and outgoings. Within these categories, ‘Repairs and maintenance’ had the largest increase from less than $1K in H1FY20 to $6K in H1FY21.

iii. Plant expenses

This includes raw materials and production inputs, general warehouse expenses, Health, safety and environment (HSE), machinery parts and consumables, repairs and maintenance (R&M) and other costs. While expenses on items such as consumables can be estimated, there are various expenses relating to R&M and machinery spares depend on plant performance and cannot be estimated with a high degree of certainty. In H1FY21, Machinery componentry expenses reduced by $13K and ‘Repairs and Maintenance’ reduced by $12K. The Machinery consumables increased from $27K to $31K over the same period.

iv. Overhead

Insurance, IT, legal, travel, sponsorships, other R&D related expenses, and various other expenses have been classified as ‘Overheads’. While expenses such as IT related expenses, travel and marketing are expected to increase as the business grows, others such as licensing and registration, website, other R&D, filing fees will be uncorrelated to the number of employees, product offerings or number of customers. Following are various sub-items that constitute ‘Overhead’, for which the change from H1FY20 to H1FY21 has been greater than $10,000:

Accounting and tax planning expenses increased to $83K in H1FY21 from $38K in H1FY20 primarily due to costs incurred in preparation for listing;
Legal expenses increased to $154K in H1FY21 from $30K in H1FY20 primarily due to costs incurred in preparation for listing;
International travel expenses reduced from $41K in H1FY20 to nil in H1FY21 and domestic travel expenses reduced from $6K to $2K over the same period; and
Consultants and contracting expenses reduced from $222K in H1FY20 to $114K in 3MFY21.

e. Projects

As has been highlighted, the Company has not generated significant revenue to date. Graphene powder is a commercialized product that is generating revenue, but sale of graphene powder is not the Company’s core strategy. TXR is a product in early commercial production stage (produced by TXR Supplier), and the business is focusing on developing the market for TXR. The Company is undertaking significant product development activities to commercialize various products. The following table provides a summary of projects (each project corresponds to a product under development). These are not capital-intensive projects with well-defined project plans, but are ongoing initiatives driven by certain employees, with the cost of the employees being the key expense associated with the projects.

Product / Project Status G Lubricants This product is under development and testing internally and with prospective customers. Results achieved so far are encouraging and therefore management views this product to be in more advanced stages of development as compared to other products. The research and development for this product is being undertaken in-house. Research is ongoing and there is no fixed end date. Customer engagement is taking place simultaneously, and hence timing of commercial production will be based on customer accepted scientific results, energy savings calculations and receipt of substantial orders. In a business-to-business environment with large corporate counterparties, the timeline for product validation and acceptance is uncertain. There is no significant operating cost for development, other than the salary costs of the Head Product Scientist and Marketing Manager. Necessary capital equipment has already at been acquired. Several large global lubricant blending and marketing companies and original equipment manufacturers are either testing or have expressed interest in testing GMG G Lubricant concentrates for their performance characteristics for potential adoption as an additive for their products. Some smaller lubricant blending and marketing companies have purchased GMG’s graphene for initial trials and/or early-stage small scale commercial production. The Company intends to pursue these opportunities for commercialization of GMG Lubricants. The Company’s staff undertake multiple projects simultaneously and a project cost tracking system has not been required to date. Therefore expenditures made to date on each project cannot be separately identified.

G Coolants and G Fluids

These products are currently under development and testing. The research and development for this product is being undertaken inhouse. Research is ongoing, but with lesser focus than on G Lubricants, and there is no fixed end date. Customer engagement is taking place simultaneously, and therefore timing of commercial production will be based on customer accepted scientific results, energy savings calculations and receipt of substantial orders. There is no significant operating cost for development, other than the salary costs of the Head Product Scientist responsible for development. Necessary capital equipment is already at the development site.

	The Company intends to continue to develop these products with a
	view to commercialization in the future. The Company’s staff
	undertake multiple projects simultaneously and a project cost
	tracking system has not been required to date. Therefore
	expenditures made to date on each project cannot be separately
	identified.
G Diesel	This product is still in the early stages of development and testing,
	which has not been prioritized in the near term. The potential for
	this product has been identified from third party research studies
	conducted using graphene in diesel. Research will likely require use
	of local universityfacilities to enableperformance testingin a

Product / Project Status controlled environment. As of now, the Company remains interested in this product and is engaged with several major collaboration partners towards the progression of this project, but at this time does not plan to spend significant amounts on this project in the next 12 months. There is no timeline or end date for development of this product. The Company’s staff undertake multiple projects simultaneously and a project cost tracking system has not been required to date. Therefore expenditures made to date on each project cannot be separately identified.

G+AI Battery Initial performance results on this project being undertaken with University of Queensland are encouraging. The collaboration project is for a period of three years. Research is being carried out by University of Queensland, with the assistance of GMG. The Company will contribute approximately $150,000 in cash (approximately $50,000 per annum for three years) and approximately $250,000 in-kind (graphene costs and costs of human resources of the Company). This project has also been approved to receive grant funding of $390,000 from the Australian Government’s Australian Research Council. The Company’s staff undertake multiple projects simultaneously and a project cost tracking system has not been required to date. Therefore expenditures made to date on each project cannot be separately identified.

The Company expects a commercial prototype to be developed during this project. A successful outcome of this project will create new intellectual property which will enable the Company to target a global market for batteries.

6. FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

a. Financial position

	$ ‘000	30-Dec-20 30-Jun-20
	Current assets Cash and cash equivalents Trade and other receivables Inventories Research and development grants receivable Other current assets Total current assets Non-current assets Property plant and equipment Intangible assets Total non-current assets Total assets Current liabilities Trade and other payables Employee benefit obligations Deferred revenue Total current liabilities Non-current liabilities Total liabilities Net assets Equity Contributed equity Reserves Accumulated losses Total equity	1,625 659 340 36 101 6 - 934 15 9
		2,081 1,644 303 228 36 31
		340 259
		2,421 1,903 200 176 91 42 80 -
		372 218 - -
		372 218 2,049 1,685 7,667 5,769 244 186 (5,862) (4,270)
		2,049 1,685

Cash and cash equivalents have increased due to a private placement of ordinary shares generating gross proceeds of $400K in Q1FY21 and from the receipt of the R&D tax incentive of approximately $934K in 3MFY21, and subsequently from further receipt of gross proceeds of $1,726K in Q2FY21

The R&D tax incentive relating to FY20 of approximately $934K was calculated as 43.5% of eligible R&D expenditure of $2,146K in FY20. This amount was a receivable as at June 30, 2020 and was received in H1FY21. Any R&D related expenses for FY21 will be determined only at the end of the financial year. Hence, there is no receivable or accrual for the R&D related tax incentive as at December 31, 2020.

The business did not have substantial sales and hence the trade receivables are low. The key components of the approximately $340K in trade and other receivables as at December 31, 2020 were:

$22K in accounts receivable related to an invoice raised under the ‘take or pay’ style arrangement under a research contract;
$267K in prepayments, a large component of which related to the supply and distribution agreements signed with the TXR Supplier in November, 2020 under which GMG made a payment in advance of $325,000. Of this, GMG made a net cash payment of $225,000 and the remaining was set off against a payment in advance from TXR Supplier for graphene powder to be supplied to TXR Supplier. Also, the remaining portion of prepayments relate to prepaid insurance premiums and advance payment for workers compensation insurance; and
$50K in GST receivables.

The trade and other payables relate to expenses in the ordinary course of business, including accounts payable, wages payable, PAYG withholding tax payable, superannuation payable, and other accrued expenses.

b. Cash flow (Investing, Operating, Financing)

	H1FY21 H2FY20
Cash flows from operating activities Receipts from customers and govt. subsidies Payments to suppliers and employees Net cash (outflow) from operating activities R&D tax incentive received Interest received Interest paid Net cash inflow/(outflow) from operating activities Cash flow from investing activities Payments for property, plant and equipment Payments for intangibles Net cash (outflow) from investing activities Cash flow from financing activities Proceeds from issue of shares and other equity securities Share issue cost Net cash inflow from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of theperiod	405 49 (2,106) (1,693)
	(1,701) (1,644) 934 802 0 1 (1) (1)
	(768) (842) (173) (92) (7) (3)
	(180) (95) 2,126 - (212) -
	1,914 - 966 (937) 659 1,828
	1,625 891

c. Liquidity and Capital Resources

GMG has generated limited revenues to date. Cash expenses mainly relate to operations and R&D activities. Until the date of this MD&A, GMG has raised approximately $8.0 million of equity capital. The capital raised has been mainly used to fund the development of its proprietary graphene powder

production technology and associated graphene enhanced products and solutions, associated plant and equipment and expenses for manufacturing and marketing these products.

Revenue in the near term is targeted to be generated from the HVAC coating customer offering, Thermal XR powered by GMG graphene. Growth in customer demand for this and other offerings will influence the amount and timing of future funding requirements for GMG. The go-to-market strategy for TXR will evolve as GMG receives more feedback from customers, has more referenceable energy savings data and more customer success stories. Based on these parameters, GMG will determine how much to invest to achieve rapid market penetration of TXR in different geographies. A rapid penetration strategy may require additional capital, but deployment of capital for marketing purposes would be controllable by Management.

$’000	H1FY21 H2FY20
Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Total cash flow	(768) (842) (180) (95) 1,914 -
	966 (937)

As at December 31, 2020, the cash and cash equivalents were $1,625K. Since the end of the Interim period ending December 31, 2020, the Company has launched a Subscription Receipt Financing to raise C$1,501K with the option to increase the Offering up to C$2,000K in gross proceeds. Furthermore, on or about the same date as the listing of GMG shares on the TSXV, under the Arrangement Agreement with Cuspis Capital, GMG will receive at least an additional approximately C$2,000K in cash.[1]

After completion of the Arrangement, Management believes GMG will have enough cash to meet its growth (sale and marketing activities for TXR and other products) and development (investment in lubricants, G+AI Batteries and fluids) objectives for at least 12 months. To date, the Company has relied on grants, subsidies and R&D incentives and external funding from investors. There is no guarantee that revenue generated by the business will be sufficient to fund the business for a longer period of time. There can be no assurance that adequate funding will be available in the future, or on terms that are favorable to the Company.

Although the operating and investing cash flow for H1FY20 and H1FY21 were negative, it is assumed that the Company has neither the intention nor the need to liquidate any of its assets to discharge its liabilities and commitments in the normal course of business. Though not guaranteed, Management believes that investors will continue to support the business to fund its expansion and development of products and solutions until the business becomes profitable.

d. Financial Instruments and Risk Management

Financial assets and financial liabilities are recognised in the balance sheet when the Company becomes party to the contractual provisions of the financial instrument. GMG’s financial instruments are its cash and cash equivalents, trade and other receivables, trade and other payables. The Company is exposed to a variety of financial risks, which result from its financing, operating and investing activities. The objective of financial risk management is to contain, where appropriate, exposures in

1 GMG expects the listing will complete soon after the completion of the Arrangement

these financial risks to limit any negative impact on the Company’s financial performance and position.

a) Credit risk

Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the balance sheet date. The maximum exposure to credit risk at balance date in relation to each class of recognised financial assets is the gross carrying amount of those assets.

As the company expands increases sales, this will become a larger consideration. Management closely monitors, the activities of its counterparties and potential counterparties.

b) Liquidity risk

Liquidity risk is the risk that arises when the maturity of assets and the maturity of liabilities do not match. Some financial assets may not be able to be monetised in a timely manner. For example, if there is a delay in receipt of the R&D tax incentive, which has been a substantial source of cash inflow in FY19 and FY20, the company could face a liquidity issue. While the company does not have any credit facilities from banks, GMG ensures it maintains enough cash, to fulfil its near-term liabilities.

c) Currency risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognized assets and liabilities are denominated in a currency that is not the Company’s functional currency. The Company is exposed to foreign exchange risk, however, at present, this risk is relatively low as there are no significant revenues and most expenses are denominated in Australian dollars. However, in the past, the company has sourced funding from investors and capital equipment from overseas. Because of the relatively low level of foreign currency exposure, the Company’s policy is not to enter into any currency hedging transactions.

e. Off-balance sheet arrangements

As of the date of this MD&A, the Company did not have any off-balance sheet arrangements nor any contingent liabilities, except for the non-cancellable operating leases for warehouses and portable office units.

f. Outstanding shares

The table below shows the number of ordinary shares issued each quarter during FY19, FY20 and at the beginning and end of each of these periods.

Period start	1-Jul-19	1-Oct-19	1-Jan-20	1-Apr-20	1-Jul-20	1-Oct-20
Period end	30-Sep-19	31-Dec-19	31-Mar-20	30-Jun-20	30-Sep-20	31-Dec-20
Period	Q1FY20	Q2FY20	Q3FY20	Q4FY20	Q1FY21	Q2FY21
Shares at period start	2,403,744	2,403,744	2,403,744	2,453,387	2,515,178	2,547,178
Shares issued	-	-	49,643	61,791	32,000	159,675
Shares atperiod end	2,403,744	2,403,744	2,453,387	2,515,178	2,547,178	2,706,853

7. RISKS AND UNCERTAINTIES

a) The Arrangement Agreement May Be Terminated in Certain Circumstances

Each of GMG and Cuspis has the right to terminate the Arrangement Agreement and Arrangement under certain circumstances. Accordingly, there is no certainty, nor can GMG nor Cuspis provide any assurance, that the Arrangement Agreement will not be terminated before the completion of the proposed Qualifying Transaction, as such term is defined in the policies of the Exchange

b) No Certainty That All Conditions Precedent to the Arrangement Will Be Satisfied

The completion of the proposed Qualifying Transaction is subject to a number of conditions precedent, certain of which are outside the control of GMG and Cuspis, including receipt of the final order for the Arrangement and approval by Cuspis’ shareholders of the Arrangement. There can be no certainty, nor can GMG or Cuspis provide any assurance, that these conditions will be satisfied or, if satisfied, when they will be satisfied.

c) Assumption of Potential Cost and Potential Termination Fees

d) Completion of the Proposed Qualifying Transaction

e) COVID-19

In March 2020, the World Health Organization declared coronavirus COVID-19 a pandemic. This contagious disease outbreak, which has continued to spread, has adversely affected workforces, customers, economies, and financial markets globally. It is not possible for the Company to predict the duration of the adverse results of the outbreak and its effects on the Company’s business. Risks include, but are not limited to, the ability of the Company to sell products and raise funds, the ability of the Company to conduct operations in the event of safety lockdowns, the inability to travel for professionals and contractors involved in production, regional and international travel and quarantine restrictions within the country, and the disruption of shipping material and samples to and from the Company’s head office.

f) Stress in the Global Economy

g) Adverse General Economic Conditions

h) Foreign Operation and Political Risk

All or any of these factors, limitations, or the perception thereof could impede the Company’s activities, or otherwise have an adverse impact on the Company’s valuation and stock price.

i) Foreign Exchange Rate Fluctuations

j) Financing Requirements

Substantial additional capital may be required for new manufacturing capacity or other purposes. When such additional capital is required, the Company will need to pursue various financing transactions or arrangements, including joint venturing of projects, debt financing, equity financing or other means. Additional financing may not be available when needed or, if available, the terms of such financing might not be favourable to the Company and might involve substantial dilution to existing shareholders. The Company may not be successful in locating suitable financing transactions in the time period required or at all and may not obtain the capital required by other means. A failure to raise capital when needed would have a material adverse effect on the Company’s business, financial condition and results of operations. Any future issuance of GMG Shares to raise required capital will likely be dilutive to shareholders. In addition, debt and other mezzanine financing may involve a pledge of assets and may be senior to interests of equity holders. The Company may incur substantial costs in pursuing future capital requirements, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. The ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the Company’s industry in particular), its status as a new enterprise with a limited history, and/or the loss of key management personnel. Further, if the demand for graphene and graphene-enhanced products decreases, then potential revenues will likely decrease and/or not materialize and such decreased revenues may increase the requirements for capital. Failure to obtain sufficient financing will result in a delay or indefinite postponement of development of revenue streams.

k) Risks Relating to Market Price of GMG Shares and Volatility

GMG Shares do not currently trade on any exchange or stock market. Securities of microcap and small- cap companies have experienced substantial volatility in the past, often based on factors unrelated to the companies’ financial performance or prospects. These factors include macroeconomic developments in North America and globally and market perceptions of the attractiveness of particular industries. The price of the GMG Shares is also likely to be significantly affected by shortterm changes in its financial condition or results of operations. Other factors unrelated to GMG’s performance that may affect the price of the GMG Shares include the following: the extent of analytical coverage available to investors concerning its business may be limited if investment banks with research capabilities do not follow the Company; lessening in trading volume and general market interest in the GMG Shares may affect an investor’s ability to trade significant numbers of GMG Shares; the size of the Company’s public float may limit the ability of some institutions to invest in GMG Shares; and a substantial decline in the price of the GMG Shares that persists for a significant period of time could cause the GMG Shares, if listed on an exchange, to be delisted from such exchange, further reducing market liquidity. As a result of any of these factors, the market price of the GMG Shares at any given point in time may not accurately reflect its long-term value. Securities class action litigation often has been brought against companies following periods of volatility in the market price of their securities. The Company may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources. The fact that no market currently exists for the GMG Shares may affect the pricing of the GMG Shares in the secondary market, the transparency and availability of trading prices and the liquidity of the GMG Shares. The market price of the GMG Shares is affected by many other variables which are not directly related to its success and are, therefore, not within its control. These

include other developments that affect the market for all comparable securities, the breadth of the public market for GMG’s Shares and the attractiveness of alternative investments. The effect of these and other factors on the market price of the GMG Shares is expected to make the GMG Share price volatile in the future, which may result in losses to investors.

l) Dilution

m) The Australian R&D Tax Regime May Change, Or The Company May Become Ineligible For R&D Incentives In Future.

GMG has obtained substantial income from grants, tax concessions and subsidies. It received approximately $802K in Fiscal Year 2019 and approximately $933K in Fiscal Year 2020 under the Australian R&D tax offset scheme. If this incentive were to be unavailable to GMG going forward, the business may have to raise additional capital from investors, and this may cause further dilution and reduce the returns for existing shareholders.

n) Operating History

o) Negative Operating Cash Flow

p) No Dividends Expected for Foreseeable Future

q) Going Concern

r) Failure of The Thermal XR Powered By GMG Graphene Offering and Other Products

s) Technology May Not Be Effectively Commercialized

t) Intellectual Property Protection

adequately protect its intellectual property could have a material adverse effect on its business, operating results and financial condition.

u) GMG’s technology may be unable to achieve broad market acceptance and, consequently, limit its ability to generate revenue and profits from new products.

v) Performance and Scalability

To be successful, the Company will have to successfully scale its internally developed or codeveloped products and solutions, while ensuring quality and reliability.

The Company may produce a high-quality prototype but may not be able to develop a scalable production process or seek a suitable licensee. For example, the groundwork done on the G+AI Batteries in partnership with UQ has yielded superior performance results such as high energy density. Despite these results and the research project that is expected to commence (subject to finalising agreements) with UQ, GMG may be unable to build a methodology for continuous commercial production of cathode materials for the G+AI Battery. Thus, even if a high-performance technology is developed, there may be challenges associated with scaling production of cathodes or cathode material and commercialising the product.

w) Graphene Demand Risk

x) Graphene Price Fluctuations

y) Competition

z) Graphene Standard

aa) Management of Growth

The Company could experience growth that could put a significant strain on each of the Company’s managerial, operational and financial resources. The Company must implement and constantly improve its operational and financial systems and expand, train, and manage its employee base to manage growth. In addition, the Company expects that its operational and management systems will face increased strain as a result of the expansion of the Company’s business. The Company might not be able to effectively manage the expansion of its operations and systems, and its procedures and controls might not be adequate to support its operations. In addition, management might not be able to make and execute decisions rapidly enough to exploit market opportunities for the expansion of the Company’s business. If the Company is unable to manage its growth effectively, its business, operations, and financial condition will suffer.

bb) Execution of Business Plan

cc) Obtaining and Renewing Approvals, Licenses and Permits

dd) Country risk

ee) Governmental Regulation

of its operations. Such legal actions could lead to the imposition of substantial fines, penalties or other civil or criminal sanctions. It may be difficult to strictly comply with all regulations that will be imposed on the Company. The Company will retain competent and well-trained individuals and consultants to assist the Company with compliance with such laws and regulations, however, even with the application of considerable skill GMG may inadvertently fail to comply with certain laws. Failure to comply with laws and regulations could lead to financial restatements, fines, penalties other material negative impacts on the Company.

ff) Provision of services

The Company is and will be engaging employees and contractors for the provision of various services in relation to its various products and solutions, including the TXR service offering. There will be various risks with respect to the health and safety of personnel involved in the provision of services. Such personnel may be required to perform hazardous work including working at heights and high voltage electrical work (e.g. work on air conditioners for its TXR application solution), and there will be associated risks. The company may face potential liabilities or damages associated with failure to perform work safely and effectively.

gg) Operating Hazards, Risks and Insurance

The ownership, operation and development of a manufacturing and production facility involves many risks which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Other operating risks include environmental hazards, industrial accidents, explosions and third-party accidents, mechanical failure, power interruptions, flooding, earthquakes and periodic interruptions due to inclement or hazardous weather conditions. These occurrences could result in environmental damage and liabilities, work stoppages, delayed production and resultant losses, increased production costs, damage to, or destruction of, manufacturing or production facilities and resultant losses, personal injury or death and resultant losses, asset write downs, monetary losses, claims for compensation of loss of life and/or damages by third parties in connection with accidents (for loss of life and/or damages and related pain and suffering) that occur on company property, and punitive awards in connection with those claims and other liabilities. It is not always possible to fully insure against such risks, and the Company may decide not to take out insurance against such risks as a result of high premiums or other reasons. Should such liabilities arise they could reduce or eliminate any future profitability and result in an increase in costs and a decline in value of the Company’s securities. Liabilities that the Company incurs may exceed the policy limits of insurance coverage or may not be covered by insurance, in which event it could incur significant costs that could adversely impact its business, operations, potential profitability or value. Despite efforts to attract and retain qualified personnel, as well as the retention of qualified consultants, to manage the Company’s interests, even when those efforts are successful, people are fallible and human error could result in significant uninsured losses to the Company.

hh) Environmental Hazards

owners of adjacent properties or by natural conditions. The costs of such cleanup actions may have a material adverse impact on the Company’s operations and future potential profitability.

ii) Employee Recruitment and Retention

jj) Shortages of Critical Parts, Equipment and Skilled Labour

kk) Raw Material Price Fluctuations

ll) Delays, Disruptions, or Quality Control Problems In Manufacturing Operations

mm) Dependence on Management and Key Personnel

nn) Information Technology Interruptions or Breaches

In the event of a failure of a future product incorporating the Company’s technology, such as an air conditioner, freezer or battery, the Company may be subject to potential product liability lawsuits – including due to but not limited to the nano scale nature of its products. Under certain circumstances, the Company’s customers may be required to recall or withdraw the products incorporating its technology. Even if a situation does not necessitate a recall or market withdrawal, product liability claims may be asserted against the Company. Even if a product liability claim is unsuccessful, the negative publicity surrounding any assertion that the products caused illness or physical harm could adversely affect the Company's reputation and brand equity. An example of a product liability risk may be in relation to an adverse impact of the TXR application on air conditioners.

pp) Claims and Legal Proceedings

qq) Control Over Financial Reporting May Not Prevent or Detect Misstatements, and Projections Of Any Evaluation Of Effectiveness To Future Periods May Be Subject To Changes In Conditions Or Deterioration In Compliance With Procedures.

rr) Conflicts of Interest

ss) No Market for the Options and Warrants

tt) Enforcement of Judgments Against Foreign Persons May Not Be Possible

8. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

which are periodically reviewed for continued appropriateness. Changes to estimates can result in significant variations in the amounts charged to the statement of comprehensive income in specific periods.

9. FUTURE CHANGE IN ACCOUNTING POLICIES

The Company has applied the following standards and amendments for the first time in their annual reporting period commencing July 1, 2019:

i. AASB16 Leases

The Company had to change its accounting policies as a result of adopting AASB 16. The Company elected to adopt the new rules retrospectively and applied the practical expedients relating to short term lease sand, therefore, there was no cumulative effect of initially applying the new standard on July 1, 2019. The other amendments listed below did not have any impact on the amounts recognized in prior years and are not expected to significantly affect the current or future years.

ii. AASB2018-1 Amendments to Australian Accounting Standards - Annual Improvements 2015-2017 Cycle
iii. Interpretation 23 Uncertainty over Income Tax Treatments.

10. RECENT EVENTS

On March 11, 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization, which has caused significant financial market and social dislocation. While government responses to COVID-19 have created an uncertain operating environment which can change at short notice, the Company’s staff and production operations have not been materially impacted. Customer trials and related potential sales were somewhat restricted during lockdowns in certain countries for periods in 2020 which slowed the Company’s commercialization plans, but currently the Company is not seeing any significant disruption to its manufacturing operations except for slowing or some in cases stalling its business development activities in Australia and other countries.

In financial terms, the Company benefited from:

The Australian Government’s JobKeeper payment scheme, a subsidy for businesses affected by COVID-19. Under this scheme the Company received $78,000 in FY20 and $163,500 in H1FY21.
The Queensland State Government’s cash flow boost program to support small and medium business and initiatives to rebate payroll tax payments. Under these schemes, the Company received another $50,000 in FY20 and $50,000 in H1FY21.

In terms of effects on the Company:

The Company has maintained access to capital during the 2020 financial year and the first half of the 2021 financial year, as evidenced by its capital raisings during this period. Capital markets conditions have been receptive to the Company for most of the pandemic to date.
The TXR demonstration projects may have progressed more quickly had it not been for

COVID-19.

While interstate and international travel has been very restricted, the use of technology has greatly mitigated the general impact on the business these restrictions would have otherwise had.

CERTIFICATE OF GRAPHENE MANUFACTURING GROUP PTY LTD.

Dated: March 31, 2021

This prospectus constitutes full, true and plain disclosure of all material facts relating to the securities previously issued by Graphene Manufacturing Group Pty Ltd. as required by the securities legislation of Ontario, British Columbia, Saskatchewan and Alberta.

“ Craig Nicol ” “ Christopher Ohlrich ” Craig Nicol Christopher Ohlrich Chief Executive Officer Chief Financial Officer

ON BEHALF OF THE BOARD OF DIRECTORS

Dated: March 31, 2021

“ Guy Outen ” “ Robbert De Weijer ” Guy Outen Robbert De Weijer Director Director

CERTIFICATE OF THE PROMOTER

Dated: March 31, 2021

“ Craig Nicol ” Craig Nicol

Chief Executive Officer and Promoter

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Graphene Manufacturing Group Ltd. — Capital/Financing Update 2021

48017_rns_2021-03-31_80475359-681d-41bd-92ef-58c19cee6db2.PDF

PROSPECTUS

Non-Offering Prospectus

March 31, 2021

GRAPHENE MANUFACTURING GROUP PTY LTD.

No securities are being offered pursuant to this prospectus

No underwriters or selling agents have been involved in the preparation of this Prospectus or performed any review or independent due diligence of the contents of this Prospectus.

This Prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities.

TABLE OF CONTENTS

INTERPRETATION

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

CONVENTIONS

GLOSSARY OF TERMS

SUMMARY OF PROSPECTUS

The Company

Principal Business

Management, Directors & Officers

Estimated Funds Available

Principal Purposes

Summary of Selected Audited Financial Information for the Company

Proposed Qualifying Transaction

Risk Factors

CORPORATE STRUCTURE

GENERAL DEVELOPMENT AND BUSINESS OF THE COMPANY

What is Graphene?

Overview

Revenue model

1. Energy saving products and solutions

2. Energy storage products

3. Other

Three Year Development History

Industry Overview

Introduction to Graphene

Market for GMG’s products and solutions

1. HVAC Industry

2. Lubricants

3. Batteries

A. Electric Vehicles

B. Energy Storage

C. Future of Batteries

4. Coolants

Operating Segments

Products and Solutions

1. Energy Savings Products and Solutions

A. ‘Thermal XR powered by GMG graphene’ (TXR)

B. G Lubricants

2. ‘G Diesel’

A.

3. Graphene Powder

Specialized Skill

Environmental Policies

Employees

Competition

1. Quality of graphene used in customer offering

Permits and Licenses

Intangible Properties

Business Cycle

Economic Dependence

Foreign Operations

Changes in Contracts

Bankruptcy

Material Restructuring Transactions

Social or Environmental Policies

A. Quality policy

B. Health, Safety and Environment (“HSE”) Policy

Lending

GMG Private Placements

Recent Events

USE OF AVAILABLE FUNDS

Funds Available

Principal Purposes

1 Estimated capital expenditure

2 Estimated listing expenses

3 Employee expenses

4 Occupancy Expenses

5 Plant Expenses

6 Overheads

7 Estimated revenue and other income

Graphene Manufacturing Group Ltd. Capital/Financing Update 2021