Gratomic Upgrades Pre-Purchase Agreement with Crypto Currency Company to Battery Grade Graphite for the EV Market

Gratomic Inc. ("Gratomic" or the "Company") (TSXV:GRAT)(FRANKFURT:CB82)(WKN:A143MR)(OTCQB:CBULF) wishes to announce that it has upgraded its pre purchase agreement with technology company, TODAQ Star Program Phase 1 Corp.("TODAQ"), a subsidiary of TODAQ Holdings Inc., pursuant to the terms of a new agreement dated January 7, 2020 between the Company and TODAQ (the "Supply Agreement") to provide battery grade graphite SG16 for the EV Battery Market. TODAQ is proposed to receive an aggregate of graphite valued at US$25,000,000 from Gratomic's Aukam Graphite Project in Namibia over a 36-month period in exchange for a non-cash digital asset created by TODAQ as a medium for exchange and store of value known as a TODA note ("TDN"). The Supply Agreement fulfillment has been negotiated at an exchange rate of USD$0.30 per TDN note

The Supply Agreement contemplates that Gratomic will deliver, to TODAQ, 5,000 tonnes of SG16 product valued at USD$25 million under the terms of the agreement, over a 36-month period. TODAQ will put in an initial order of 1,800 tonnes, valued at USD $9 million, in exchange for 30,000,000 TDN, over the first 90-day period of the contract. The original agreement with TODAQ announced in the Press Release dated October 17, 2019, and referred to in the Press Release dated May 25, 2020, provided that the first 1800 tonnes of product would be purchased on the basis of an exchange rate of USD$0.10 per TDN with the balance being purchased at the market rate for TDN.

The Supply Agreement now fixes the value of the TDN notes at USD$0.30 for the purchase of the entire 5000 tonnes providing a fixed value and certainty for the Company. The first delivery date has not yet been established and will depend upon when the Company completes the construction of its processing plant at the Aukam Project in Namibia (see Press Release dated December 31, 2020 for an update on the status of the processing facility). When the Company is ready to deliver the SG16 product to TODAQ, it will inform TODAQ. TODAQ will then submit a purchase order for an initial 600 tonnes of product valued at $3 million and TODAQ will issue 10 million TDN to the Company. The Company will have 90 days thereafter to deliver the product to an on-site warehouse at the Aukam Property under the control of TODAQ which will constitute good delivery for the product. The Company intends to hold onto any TDN received for a minimum six months after which it will start liquidating the TDN into cash. See "Risk Factors" below.

As part of the Supply Agreement, both TODAQ and Gratomic will also be establishing a jointly owned entity, Q Corp, to hold an initial reserve of 60 million TDN to be used to build a treasury of commodities including graphite. As well, Q Corp will be provided with digital supply chain, custody, wallet and trading solutions by TODAQ USA, the digital solution provider of TODAQ, so Gratomic customers and graphite owners can own verifiably authentic and clean graphite which can be traded peer-to-peer and brought to exchange markets. Q Corp offers the option to Gratomic to trade excess production coming from its Aukam Processing facility to Q Corp.

SG16 is a battery grade graphite that can be used for anode material in the majority of Li-ion batteries focusing mainly on the EV sector.

The graphite is to be purchased by TODAQ to sit in reserve as a backstop to underpin the value of deployed TDN. The TDN will allow for cryptographic ownership and tracking of commodities as they are processed and traded.

The Supply Agreement provides that if Gratomic is unable to deliver graphite in accordance with the orders from TODAQ, TODAQ has the right to refuse to take any subsequent attempt to fulfil the order, terminate the agreement immediately, obtain substitute product from another supplier and recover from the Company any costs and expenses incurred in obtaining such substitute product or suing for damages under the contract.

The Supply Agreement provides that the graphite to be delivered will comprise the SG16 product pre-specifications. For more information, please follow this link to view the Company's current Corporate Presentation, preliminary product information is listed on page 48.

"The recent development of digital currency markets demonstrates the importance of Gratomic being ahead of the competition with this pre-purchase agreement. We will be the first company to commercialize graphite with this innovative technology." commented Armando Farhate, COO and Head of Graphite Marketing and sales.

"The adjustment to our existing TODAQ agreement comes as a welcome change as the Company continues to adjust its primary focus towards the rapidly growing electric vehicle market. TODAQ offers a very unique and innovative platform, through which Gratomic can bring shareholder value through bridging the Company's asset into a non-Fiat medium" stated Arno Brand, President & CEO of Gratomic Inc.

Gratomic wishes to emphasize that no Preliminary Economic Analysis ("PEA"), Preliminary Feasibility Study or Feasibility Study has been completed to support any level of production. In fact no mineral resources, let alone mineral reserves demonstrating economic viability and technical feasibility, have been delineated on the Aukam Property.

The Company engaged Dr. Ian Flint, Ph.D., P. Eng. (BC), a Qualified Person as that term is defined under National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") to complete a preliminary economic assessment (PEA) on the Aukam Processing plant based upon a resource estimate to be prepared by another Qualified Person. The study, its recommendations, and their subsequent implementation, will provide conclusions and recommendation at a PEA level of comfort relating to the scale up of the existing processing plant to a commercial scale processing facility that will provide the desired concentrate grades and production rates. A preliminary economic assessment is preliminary in nature, and there is no certainty that the preliminary economic assessment will be realized.

The Company is not in a position to demonstrate or disclose any capital and/or operating costs that may be associated with the processing plant, nor the Company's ability to fulfil its obligations to deliver the 1800 tonnes of graphite as required by the purchaser orders.

Gratomic wishes to emphasize that the supply of graphite pursuant to any off-take or supply agreement referred to in this Press Release is conditional on Gratomic being able to bring the Aukam project into a production phase, and for any graphite being produced to meet certain technical and mineralization requirements. See "Risk Factors" below.

Risk Factors

No mineral resources, let alone mineral reserves demonstrating economic viability and technical feasibility, have been delineated on the Aukam Property. The Company is not in a position to demonstrate or disclose any capital and/or operating costs that may be associated with the processing plant.

The Company advises that it has not based its production decision on even the existence of mineral resources let alone on a feasibility study of mineral reserves, demonstrating economic and technical viability, and, as a result, there may be an increased uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery, including increased risks associated with developing a commercially mineable deposit.

Historically, such projects have a much higher risk of economic and technical failure. There is no guarantee that production will begin as anticipated or at all or that anticipated production costs will be achieved.

Failure to commence production would have a material adverse impact on the Company's ability to generate revenue and cash flow to fund operations. Failure to achieve the anticipated production costs would have a material adverse impact on the Company's cash flow and future profitability.

TDN is designed to function as a stablecoin, not a security; have a significant portion of the use as a loyalty reward; act as an asset for goods and services purchases; and have its use be contained within the Adot network ecosystem. The TDN program governance plans to be put under a non-profit foundation during 2021. As a fully decentralized asset, business and individual owners can exercise full control and possession of their TDN. Due to its intrinsic qualities as a TODA containerized, smart, immutably self-tracking asset, TDN is also designed to support secure and efficient fulfillment of regulatory needs. The current market for TDN consists of TODAQ and its current customers, partnering companies as well as their customers and partners. These parties are using TDN among each other as a payment means in return for goods and services. TODAQ intends to expand this market in the future and also expects to expand this market to include over-the-counter digital asset trading platforms, crypto exchanges, commodity exchanges and custodial trust services although TODAQ makes no representation that it will be able to expand the market for the trading of TDN.

Historically, such innovative technical digital assets have a much higher risk of economic and technical failure and there is no certainty that these kinds of assets will have any value. There is no guarantee that TDN will perform as anticipated and neither TODAQ nor the TDN program make any claim or forecast regarding the future value of TDN and do not offer any future expectation of profit.

About Gratomic Inc.

Established in 2014, Gratomic is focused on the proposed production of low-cost mine to market carbon-neutral, eco-friendly, high purity vein graphite to be provided to the EV and Energy Storage supply chains. Gratomic is anticipating full operational capabilities in 2021.

Gratomic is in the process of solidifying its plans for micronization and spheronization of its clean Aukam graphite. This significant milestone is a small, additional step in the Company's proposed eco-friendly processing cycle and is intended to allow it to meet ideal North American battery grade standards for use in Li-ion battery anodes.

The Company plans to deliver mine-to-market traceability and guaranteed quality control. This will be accomplished by providing documented tracking on all graphite generated at its flagship Aukam Graphite Project. The tracking will begin at Aukam and will be verified at every stage during transport.

Two off-take purchase agreements are currently held for lump-vein graphite sourced from Gratomic's Aukam Graphite Project in Namibia, Africa. Fulfillment of the contracts is anticipated to begin in Q1 of 2021. The agreements exist with TODAQ and Phu Sumika.

TODAQ is an innovative deeptech company that can containerize assets, transactions & markets, and will partner with Gratomic on its mine-to-market commodity tracking and trading. Containerized assets are verifiably unique, keep an immutable record of who has owned them, have embedded smart logic, can be transferred P2P, and are interoperable with any system. Asset owners enjoy stronger ownership control, value retention when trading, and ability to prove authenticity in seconds.

Phu Sumika is a large global graphite supplier to battery and lubrication companies.

Gratomic Inc. is listed on the TSX Venture Exchange under the symbol GRAT, on the OTCQB under the symbol CBULF and on the Frankfurt Exchange under the symbol CB82.

For more information: visit the website at www.gratomic.ca or contact:

Arno Brand at abrand@gratomic.ca or 416 561-4095

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

Forward Looking Statements:

This news release contains forward-looking statements, which relate to future events or future performance and reflect management's current expectations and assumptions. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to the Company. Investors are cautioned that these forward-looking statements are neither promises nor guarantees and are subject to risks and uncertainties that may cause future results to differ materially from those expected. These forward-looking statements are made as of the date hereof and, except as required under applicable securities legislation, the Company does not assume any obligation to update or revise them to reflect new events or circumstances. All of the forward-looking statements made in this press release are qualified by these cautionary statements and by those made in our filings with SEDAR in Canada (available at www.sedar.com).

SOURCE:Gratomic Inc.