Cuspis Capital Ltd. Announces Subscription Receipt Financing of Graphene Manufacturing Group Pty Ltd. & Changes in Accordance With New CPC Policy

CUSPIS CAPITAL LTD. (TSXV:CUSP.P) (the “Company”) a capital pool company as defined under TSX Venture Exchange (the “TSXV” or the “Exchange”) Policy 2.4 – Capital Pool Companies (“Policy 2.4”), is pleased to provide an update to its press releases of August 19, 2020, August 31, 2020, and December 22, 2020, regarding its transaction with Graphene Manufacturing Group Pty Ltd. (“GMG”), a private company incorporated under the laws of Australia, and the intended target of the Company’s Qualifying Transaction, as such term is defined in Policy 2.4 (the “QT”). In addition, the Company announces that it intends to implement certain amendments to align with the TSX Venture Exchange’s (the “Exchange”) recently announced changes to its Capital Pool Company (“CPC”) Program and Exchange Policy 2.4 – Capital Pool Companies (“Policy 2.4”), effective as of January 1, 2021 (the “New CPC Policy”).

Subscription Receipt Financing of Graphene Manufacturing Group Pty Ltd.

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.

As previously disclosed, 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 of 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.

All proceeds of the Offering are to be held by the subscription receipt agent in trust and will be released to GMG concurrently upon the conversion of the Subscription Receipts into Units (the “Subscription Receipt Conversion”). In the event that the QT is not completed and the GMG Shares are not listed on the Exchange, the proceeds of the Offering will be returned to the subscribers.

GMG may pay finder’s fees to various parties in connection with the Offering equal to (i) a cash payment equal to 6% of the proceeds from investors introduced by the applicable finder; and (ii) ordinary share purchase warrants in the capital of GMG (the “Finder Warrants”) equal to 6% of the Subscription Receipts subscribed for by investors introduced by the applicable finder (collectively, the “Finder’s Fees”). Each Finder Warrant will be exercisable for one GMG Share at an exercise price of C$0.65 for a period of 18 months from issuance. The Finder’s Fees will be paid at the time of the Subscription Receipt Conversion.

The Subscription Receipts and all underlying securities to be issued pursuant to the Offering will be subject to a four-month hold period under applicable Canadian securities laws. Completion of the QT and the listing of the GMG shares on the Exchange remains subject to a number of conditions, including but not limited to, the filing of disclosure documents and regulatory approval. There can be no assurance that the QT will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in disclosure documents to be prepared in connection with the QT, any information released or received with respect to the QT may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

Changes in Accordance With New CPC Policy

In order for the Company to align certain of its policies with the New CPC Policy, the Company is required to obtain disinterested shareholder approval to implement certain changes. The Company will seek such approval at its upcoming annual general and special meeting of shareholders to be held on March 9, 2021 (the “Meeting”), for, among other things, approval to: (i) remove the consequences of failing to complete a QT within 24 months of the Company’s date of listing on the Exchange; and (ii) amend the escrow release conditions and certain other provisions of the Company’s CPC escrow agreement dated February 11, 2019 (the “Escrow Agreement”). These proposed amendments are described in further detail below.

Removal of the 24 Month Deadline for Completing a QT

Previously, under Policy 2.4 (the “Former Policy”), the Exchange could impose certain consequences if a CPC did not complete its QT within 24 months of its date of listing (the “Original Deadline”), including, among other things, the potential for the company’s shares to be delisted or suspended, or transferred to NEX (subject to the approval of the majority of the company’s shareholders) and the cancellation of certain seed shares. The New CPC Policy has removed these aforementioned consequences, in the event that a CPC does not complete its QT by the Original Deadline, assuming the CPC obtains disinterested shareholder approval.

While the Company has entered into a definitive agreement for the completion of its QT with Graphene Manufacturing Group Pty Ltd. (see the Company’s press release of December 22, 2020), there is no guarantee that this transaction will be completed either in advance of the Company’s Original Deadline, or at all. Therefore, the Company intends to seek disinterested shareholders to approve of the removal of such consequences at the Meeting. The Company believes that obtaining such approval will provide the Company with greater flexibility to complete a QT, and allow the Company to better withstand market volatility.

Amendments to the Escrow Agreement

The Company intends to seek disinterested shareholders to approve of certain amendments to the Escrow Agreement, including, among other things to allow:

the Company’s escrowed securities to be subject to an 18 month escrow release schedule detailed in the New CPC Policy, instead of the current 36 month escrow release schedule;

all incentive stock options (the “Options”) granted prior to the date the Exchange issues a final bulletin for the QT (the “Final QT Exchange Bulletin”) to be released from escrow on the date of the Final QT Exchange Bulletin; and

all common shares issued upon exercise of any Options prior to the date of the Final QT Exchange to be released from escrow in accordance with the 18 month escrow release schedule as detailed in the New CPC Policy.

The Company believes that these changes are in the best interests of its shareholders as it will allow the Company to have greater flexibility and mechanisms to increase shareholder value.

The TSXV has in no way passed upon the merits of the QT, and has neither approved nor disapproved the contents of this press release.

For further information:

William Ollerhead
Cuspis Capital Ltd.

Will@CuspisCapital.com
Tel. (416) 214-4810

Forward-Looking Information

This press release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this press release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected” “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”. “estimates”, “believes” or intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this press release, forward-looking statements relate, among other things, to: completion of the QT; conducting of the Meeting and the results thereof; closing of the Offering; director and regulatory approvals; and future press releases and disclosure. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and the delay or failure to receive shareholder, director or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws, unless an exemption from such registration is available.

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