Toronto, Ontario–(Newsfile Corp. – August 19, 2020) –  Cuspis Capital Ltd. (TSXV: CUSP) (“Cuspis” or the “Corporation“), a capital pool company as defined under TSX Venture Exchange (“TSXV” or the “Exchange“) Policy 2.4 – Capital Pool Companies (“Policy 2.4“), is pleased to announce it has entered into a letter of intent dated August 17, 2020 (the “LOI“) with Graphene Manufacturing Group Pty Ltd. (“GMG“), a private company incorporated under the laws of Australia, whereby Cuspis and GMG 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 GMG (the “Transaction“), subject to the terms and conditions outlined below. 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.

Cuspis completed its initial public offering in March, 2019. The common shares of Cuspis (the “Cuspis Shares“) are listed for trading on the TSXV under the stock symbol “CUSP”. Cuspis has not commenced commercial operations and has no assets other than cash. Cuspis was incorporated under the laws of the Province of Ontario.

GMG is based in Brisbane, Australia and was formed on August 10, 2016. GMG produces high quality graphene used in a number of planet-friendly/clean-tech applications. GMG’sproprietary production process, separates natural gas (methane) via a plasma into its component elements: nano carbon (called graphene) and hydrogen. This process produces high quality, low cost, scaleable, ‘tuneable’ and contaminant-free graphene.

GMG’s graphene has a wide range of potential applications. GMG’s focus so far has primarily been in graphene’s use in paints, coolants and lubricants due to such applications demonstrating improved heat transfer in air-conditioning and coolant units, and additionally in reducing friction in engines. The result is products with lower energy consumption, which can reduce both cost and emissions.

GMG is also in the early stages of exploring additional opportunities for use of GMG’s graphene including its use in enhancing the performance of liquid fuels, and in the development of next generation batteries. GMG is working collaboratively with the financial support of the Australian Government to progress the potential step change performance characteristics of Aluminium Ion + (GMG) Graphene batteries.

GMG’s principal shareholders include entities associated with the original founders and current senior management team of the business: Craig Nicol (CEO), Christopher Ohlrich (CFO), Robbert de Weijer (Director), David Pope (Head of Health, Safety & Environment) and Roberto Bran (Head of Technology), each of such principal shareholders being resident in Australia. Other GMG shareholders include seed investors, high net worth individuals, institutions and clean tech venture capital groups in Australia, Canada, the UK, Israel and Germany.

GMG’s unaudited revenues for the year ended June 30, 2020 was A$110,740 (unaudited). Other income for such period, which includes government grants and other government subsidies was A$1,199,713 (unaudited). For the same such period, net income (loss) was A$(1,949,569) (unaudited), total assets were A$1,902,683 (unaudited), and total liabilities were A$179,497 (unaudited).

The LOI was negotiated at arm’s length and is effective as of August 17, 2020. Will Ollerhead, director and chief executive officer of Cuspis, holds, indirectly through Chunkerhead Ltd., an entity he controls, certain securities convertible into ordinary shares of GMG amounting to, if converted, less than 0.5% of the total outstanding securities of GMG.

The material terms and conditions outlined in the LOI are non-binding on the parties and the LOI is, among other things, conditional on the execution of a definitive agreement (the “Definitive Agreement“) to be negotiated between the parties. It is currently anticipated that, immediately prior to the completion of the Transaction, Cuspis will effect a share consolidation (the “Consolidation“) on the basis of one (1) post-consolidation Cuspis Share (“Post Consolidation Cuspis Share“) for every two and one-half (2.5) pre-consolidation Cuspis Shares.

Pursuant to the Transaction, it is anticipated that 22.3918 Post-Consolidation Cuspis Shares would be issued in exchange for each one (1) outstanding common share of GMG (the “Exchange Ratio“). The Exchange Ratio is subject to adjustment to account for the foreign exchange rate between Canadian and Australian currency (the “FX Rate“), which is to be settled in the Definitive Agreement. As a result of the Transaction, any outstanding convertible securities of GMG will be adjusted accordingly or replacement securities issued in the Resulting Issuer. Based on the FX Rate on the date of the LOI, the maximum number of Post-Consolidation Cuspis Shares issuable to GMG’s shareholders on closing of the Transaction would be 60,916,317 (undiluted). This is subject to adjustment pursuant to the final FX Rate as set out in the Definitive Agreement.

The LOI contemplates that prior to entering the Definitive Agreement, GMG will complete a non-brokered private placement of equity securities for gross proceeds of a minimum of AUS $1,226,025 and a maximum of AUS $1,726,025(the “Financing“).

Certain fees may be payable by GMG to Caerus Management Limited (“Caerus“), an arm’s length third party, pursuant to an Investment Advisory Agreement between GMG and Caerus in connection with the Financing and the Transaction. Such fees may include cash, being 10% of funds procured by Caerus during the Financing and an additional cash payment based on the Cuspis cash balance (net of liabilities) upon closing of the Transaction. Fees may also become payable in the form of GMG shares depending on the amount of funds procured by Caerus during the Financing and the Cuspis cash balance (net of liabilities) upon closing of the Transaction, which will not exceed 35,500 GMG shares in total.

There is no assurance that a Definitive Agreement will be successfully negotiated or entered into.

Upon completion of the Transaction, the parties intend for the following individuals to comprise the board of directors and management of the Resulting Issuer:

Chair & Director: Guy Outen
London, United Kingdom

Mr. Outen is an independent non-executive director following a career of 36 years with the Royal Dutch Shell plc Group of companies (“Shell“). In his last role at Royal Dutch Shell plc as Executive Vice President, Strategy & Portfolio, Mr. Outen worked directly for the CEO and with the Shell Executive Committee and its Board to inform, shape and steer Shell’s renewed Purpose, Strategy, Portfolio and Capabilities including Shell’s creation of its Future Energies portfolio.Mr. Outen previously worked in various commercial, new business and finance roles across all parts of Shell’s business.

From 2009 to 2013 he was the EVP Commercial, New Business & LNG. Before 2009 Mr. Outen was EVP, EP Strategy & New Business and before that he was the Chief Financial Officer for Gas & Power, Shell Group Chief Internal Auditor, the CFO for Shell Development Australia and has also been responsible for Retail operating processes, split off and merged Shell Australia’s chemical operations into the Montell JV, worked in Crude Oil Trading and a Coal JV.

Mr. Outen has an economics and commerce background, B.Com (Hons), M.Com, and is a Fellow CPA Australia.

Director & CEO: Craig Nicol
Brisbane, Australia

Mr. Nicol has over 20 years’ experience with Shell in delivering large scale innovation including leading multi-billion dollar gas and Liquified Natural Gas (LNG) value chains in Australia and Asia Pacific for Shell International.

Mr. Nicol has had various roles for Shell including: General Manager Commercial (LNG) – Arrow LNG (PetroChina/Shell Coal Seam Gas LNG Venture); Commercial Manager – South East Asia and Australasia (Shell Gas and Power) – including Governor of Brunei LNG, Shell Malaysia Upstream, Shell Australia (Gorgon and NWS LNG Project); Asia Pacific Program Manager for Global Business Process Project (Shell Singapore); Marketing Manager – Industry (Shell Australia); Project Engineer (Shell Services International).

Mr. Nicol has an Honours Engineering Degree in Manufacturing Systems & Bachelor Degree in Business Marketing from the Queensland University of Technology.

Mr. Nicol is a Director of the Australian Graphene Industry Association and is also a member of the Australian Institute of Company Directors.

Director & CFO: Christopher Ohlrich
Brisbane, Australia

Mr. 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. Mr. Ohlrich has held roles as General Manager Commercial with Arrow Energy Limited and Chief Commercial Officer with Armour Energy Limited.

Mr. Ohlrich 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 member of the Australian Institute of Company Directors.

Director: Robbert de Weijer
Brisbane, Australia

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 Shell International followed by C-suite positions in of 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 2 major onshore gas terminals in Holland and England, 3 drilling rigs; 9 different JVs, 1500 Shell and contractor staff with an annual operating spend of ~ 900 mln US$ and annual Capex of ~ 700 mln US$.

Mr. de Weijer holds Bachelor Degrees in Mechanical Engineering and Business Administration.

Director: Rob Shewchuk
Calgary, Alberta

Mr. Shewchuck is an Alberta-based investor with over 25 years of capital markets experience including acting as the former Chairman of Standard Securities and Managing Director of Wolverton Securities, which was acquired by PI Financial In 2016. Rob is the President & CEO of LithiumBank Resources Corp and also serves on the Board of Directors of Spectre Capital Corp.

Director: William Ollerhead
Toronto, Ontario

Mr. Ollerhead is a co-founder of Cuspis, and currently serves as its President and CEO. He is the Principal of Ollerhead Capital, founded in 1997, delivering advisory services in respect of the structuring and arranging of private debt financing for transactions totaling approximately $800 million, as well as Managing Director of a private family investment and management services company, Chunkerhead Ltd. He has over 30 years of experience in capital markets and corporate finance. He presently serves on the board of directors of Thermal Energy International Inc., where he is the Chair of the Audit Committee, and has served on several other boards of both public and private companies, and not-for profit organizations, as Chairman, director, and as a member and chair of Audit Committees. Mr. Ollerhead holds a B.A. (Statistics) from the University of Western Ontario, and an M.B.A. (Finance) from McGill University. In 2010, he completed the Directors Education Program at the Institute of Corporate Directors at the Rotman School of Management, University of Toronto.

As the Transaction is not a Non-Arm’s Length Qualifying Transaction, Cuspis is not required to obtain shareholder approval for the Transaction.

In accordance with the policies of the TSXV, Cuspis Shares are currently halted from trading and will remain so until such time as the TSXV determines, which, depending on the policies of the TSXV, may not occur until completion of the Transaction.

Conditions to the Transaction

Completion of the Transaction will be subject to a number of conditions, including but not limited to, acceptance by the TSXV, approval of certain matters by the holders of the Cuspis Shares and other customary conditions including:

• completion of the Financing;
• receipt of all director, shareholder and requisite regulatory approvals (including GMG shareholder approval, and the Foreign Investment Review Board of Australia clearance, if required) relating to the negotiation and execution of a Definitive Agreement in respect of the Transaction and as may be contemplated by the Definitive Agreement;
• preparation and filing of a disclosure document, as required by the TSXV, (the “Disclosure Document“) outlining the definitive terms of the Transaction and describing the business to be conducted by Cuspis following completion of the Transaction, in accordance with the policies of the TSXV; and
• completion of the Consolidation.

Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Sponsorship

Cuspis intends to make an application for exemption from the sponsorship requirements of the TSXV in connection with the Transaction, however there is no assurance that the TSXV will exempt Cuspis from all or part of applicable sponsorship requirements.

Further Information

Cuspis will provide further details in respect of the Transaction and the Financing in due course by way of press release. However, Cuspis will make available to the TSXV, all information including financial information as required by the TSXV and will provide, in a press release to be disseminated at a later date, required disclosure.

All information contained in this press release with respect to GMG and Cuspis (but excluding the terms of the Transaction) was supplied by the parties respectively, for inclusion herein, without independent review by the other party, and each party and its directors and officers have relied on the other party for any information concerning the other party.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Disclosure Document to be prepared in connection with the Transaction, any information released or received with respect to the Transaction 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.

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

For further information:

William Ollerhead
Cuspis Capital Ltd.

[email protected]
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: the Transaction and certain terms and conditions thereof; the business of GMG, the Financing; the Consolidation of Cuspis Shares; the Exchange Ratio, TSXV sponsorship requirements and intended application for exemption therefrom; shareholder, 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, Cuspis 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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