Mason Graphite Provides Disclosure on Going-Public Transaction of Black Swan Graphene - Seite 2

Summary of the Transaction

The Share Exchange Agreement, as amended provides that Dragonfly will acquire all of the outstanding Black Swan Shares in exchange for an aggregate of 210,230,349 Resulting Issuer Shares at a deemed price of $0.15 per Resulting Issuer Share. In addition, each outstanding Black Swan Option will be exchanged for an equivalent Replacement Option in accordance with the Share Exchange Agreement.

The completion of the Transaction is subject to the satisfaction of various conditions as are standard for a transaction of this nature, including but not limited to: (i) receipt of all requisite consents, waivers and approvals for the Transaction, including the approval of the TSX-V; (ii) the absence of any material adverse change in the business, affairs or operations of Black Swan Graphene; (iii) all of the Escrow Release Conditions being satisfied (other than the completion of the Transaction); (iv) the cancellation of the Black Swan Options and corresponding grant of the Replacement Options; and (v) Black Swan Graphene having received the requisite approvals from its shareholders for the Transaction, if applicable.

Governance of the Resulting Issuer

Upon Closing, it is expected that each of Messrs. Simon Marcotte, Peter Damouni, Harry Swan (Chairman), Michael Edwards, David Deak and Roy McDowall be appointed as directors of the Resulting Issuer. Further, Mr. Marcotte is expected to be appointed as the President and Chief Executive Officer, Mr. Duras is expected to be appointed as the Chief Financial Officer and Corporate Secretary, Mr. Edwards is expected to be appointed as Chief Operating Officer, and Mr. Damouni is expected to be appointed as an Executive Director of the Resulting Issuer.

The Subscription Receipt Financing

In connection with the Transaction, Dragonfly completed a non‐brokered subscription receipt financing (the “Subscription Receipt Financing”) for gross aggregate proceeds of approximately $7,000,450 through the issuance of an aggregate of 46,669,665 subscription receipts (each, a “Subscription Receipt”) at a price of $0.15 per Subscription Receipt.

Each Subscription Receipt shall be convertible into one Resulting Issuer Share upon satisfaction of certain escrow release conditions (collectively, the “Escrow Release Conditions”). Assuming the Closing and the issuance of an aggregate of 46,669,665 Resulting Issuer Shares upon the exchange of the Subscription Receipts pursuant to the Subscription Receipt Financing, and that no convertible securities of Dragonfly or Black Swan Graphene are exercised, an aggregate of 285,374,537 Resulting Issuer Shares are expected to be issued and outstanding on Closing, including, pursuant to the press releases of Dragonfly of December 16, 2021 and January 27, 2022, and agreed by the Parties, a finder’s fees of 10,727,000 common shares in the capital of Dragonfly payable concurrently with the Closing to a finder that is not a Related Party (as such term is defined in the policies of the TSX-V) to either Black Swan Graphene or Dragonfly, in consideration of introducing the parties to each other and assisting in negotiating the Transaction. The finder’s fee was calculated in accordance with the policies of the TSX-V and applicable securities laws. Of the Resulting Issuer Shares, approximately 6.22% will be held by the current shareholders of Dragonfly, approximately 73.67% will be held by the shareholders of Black Swan Graphene, including 41.3% which will be held by the Company, and approximately 16.35% will be held by the subscribers under the Subscription Receipt Financing.