First Graphene : Quarterly Activities and Cashflow Report March 2022

27 April 2022

March 2022 Quarterly Activities Report

Advanced materials company First Graphene Limited (ASX: FGR, "First Graphene" or "the Company") is pleased to provide this update on its financial and operational performance for the quarter ended 31st March 2022.

HIGHLIGHTS

•  Total FY21 revenue exceeded at the end of Q3 FY22 with a strong pipeline for Q4 FY22



Significant orders filled across multiple segments for Q3 totalling circa A$179,000



Additional orders received for fulfilment in Q4 totalling circa A$200,000



US market penetration boosted with NeoGraf Technology Partnership, including minimum purchase commitment of 10 tonnes per annum within four years



Distribution agreement and product launch with Nanoproof Glade Chemicals JV opens way to South African cement, concrete and other construction markets



Application	development work	accelerating	across	all	materials
segments	including thermally	conductive	plastics	for	Senergy

Innovations Ltd. and conductive textile coating for use in geotextiles

Commercial update

Financial performance

In Q3 of FY22, First Graphene delivered A$179K of sales revenue, which is an increase of 265% on A$49K of revenue delivered for the same period FY21. Year to date revenue to the end of Q3 (A$364K) has already exceeded total revenue for the previous financial year (A$341K), providing a strong indicator that the Company's go-to market strategy is starting to deliver results.

There is also a strong pipeline of orders to be fulfilled prior to the end of the financial year, putting First Graphene on track for a significant increase in revenue compared to FY21. More importantly, the revenue is being derived from diversified sources including early adopter PureGRAPH® product sales, larger scale production trials of new clients, and the Company's materials technology research and development work and services.

Below is an illustration of First Graphene's revenue growth since 2018. Further orders within Q4 are still expected to be added to this pipeline.

Update on share placement with SMI

As announced on 27th May 2021, First Graphene entered into a share placement agreement with SMI to raise A$8 million in cash in exchange for providing A$8.48 million worth of shares. As of 8th April 2022, SMI has drawn down on First Graphene shares worth A$2.16 million with A$6.32 million of shares still to be issued.

Strategic partnership opens way for greater market penetration

During Q3, First Graphene announced it had signed an exclusive technology partnership deal with US-based NeoGraf Solutions LLC, the world's leading provider of graphite materials to multiple industries.

The 10-year agreement to develop and grow the graphene market in the USA is subject to performance measures that commence with a minimum uptake of two tonnes of First Graphene's PureGRAPH® product range in year one, which will be used to establish and build market share. With strong expectations of growth, that will scale up to a 10-tonne minimum by year four and then in excess of 10 tonnes thereafter with precise quantities to be determined by annual review.

The deal is significant given NeoGraf's established reputation in the US, opening the way for First Graphene products to be sold into this significant geographical market.

Segment Progress

First Graphene's revenue performance has been driven by focusing commercial attention on a select range of high-value segments in which graphene continues to show major benefits for industry and end consumers. Led by commercial managers who are industry experts in each segment, the Company is progressing through various stages of development, testing, trials and commercial sales with industry and/or research partners.

Cement and Concrete

• • Confirmed significant orders for Q4 total circa A$80K representing significant steps forward in commercializing this segment. Further orders are expected to be realized within Q4.

• • Significant application development work underway through a consortium that includes the Breedon Group, University of Manchester and Morgan Sindall. The group will receive funding from Innovate UK with First Graphene's share expected to be circa A$225K over 12 months.

In the cement space, development work continues on a range of cement grinding aids with 10 global first and second tier specialty chemical additive companies. This includes advanced development work with Fosroc International and Siam Cement Group (SCG) on reducing CO2 emissions in the cement manufacturing process through the use of less clinker, as well as slag grinding aids.

Development work continues for client-specific concrete admixtures with a total of 15 tier one and two global and large regionally based concrete and cement companies. This includes working with BGC Australia to develop recycled aggregates, and with multiple other clients on projects covering ultra-high strength concrete, underground tunnelling applications and concrete formulations for use in 3D printing.

During the quarter, First Graphene announced it had signed a distribution agreement with the South African-based Nanoproof Glade Chemicals Joint Venture. This followed the development of a concrete liquid admixture that demonstrated 40% improvement in strength during field trials. Nanoproof Glade Chemicals JV now has additional stock to fulfil initial sample requests from its customers in the South African market.

Further details on strategic commercial partnerships can be found in the list of recent ASX announcements below.

Following the successful award of a grant from Innovate UK to a First Graphene-led consortium for the development of graphene-enhanced, low-carbon cement (GR-CEM), work has commenced on the project with consortium partners Breedon Cement Ltd, Morgan Sindall Construction & Infrastructure Ltd, and the University of Manchester's Department of Mechanical, Civil and Aerospace Engineering.

A dedicated team has been established, which included the appointment of a cement materials scientist, and experimental work has led to selection of materials and an optimised mortar mix design.

Data collection is now progressing for lifecycle analysis, economic viability, and health and safety work packages. The consortium is also exploring dispersion methods as an alternative to powder mixing, with development work carried out by other industry partners including Fosroc.

Composites and Plastics

• • Q3 delivered circa A$80K revenue from early-adopter and new opportunity clients.

• • Confirmed significant orders for Q4 total circa A$100K. Further orders are expected to be realized within Q4.

The Company and its industry partners continue to make significant advances in development of new products and follow-up commercial opportunities.

Proof of concept and trials have been completed with Senergy Innovations Ltd for thermally conductive plastic used in solar thermal applications. Scaling up is now in progress to move to commercial production.

Concept design showing Senergy solar thermal panels powering a home

UK-based plastic compounding specialist Hubron Ltd has successfully developed a High-Density Polyethylene (HDPE) masterbatch with plans to progress to commercial extrusion

trials through DSP Malaysia in the coming weeks. Pending trial results, there is advanced progress with industry partners for commercial use.

Significant progress has also been made with PET applications used for a broad range of high performing plastics and composites applications. First Graphene is now working with industry to progress large-scale trials and development of a PureGRAPH®-enhanced PET masterbatch.

In addition, First Graphene is working with Duromer Australia on the development of PureGRAPH®-enhanced polyamide systems. These custom engineering compounds offer unique solutions to demanding applications with initial laboratory trials showing significant improvements in abrasion resistance.

Lucid Colour Australia has developed the first PureGRAPH® liquid dispersions suitable for composite thermoset resin applications. This development aims to remove the need to handle fine powders in the manufacturing process and simplifies the path to improved graphene dispersion in the resin products.

Coatings and Inks

• • Significant order received and fulfilled in Q3 from a geotextile's specialist for A$45K for a customized PureGRAPH®

• • Formulation in progress for a conductive textile coating with release to market and potential revenue expected by end of Q4

• • Advanced trials progressing for graphene-enhanced applications in sporting apparel market and early testing showing promise for fire-retardant steel coatings.

• • Confirmed significant orders for Q4 total circa A$12.5K. Further orders are expected to be realized within Q4.

Work in conductive textiles applications led to a significant order from a geotextile's specialist for 300kg of PureGRAPH® at a customised platelet size. The order, valued at A$45,000, has now been fulfilled.

Additional work is underway for a textile client to develop a conductive textile coating. Formulation is in progress with samples submitted to the client for trials and approval, with an expected release to market in the coming months.

Advanced trials in graphene-enhanced applications for consumer sports apparel are also now in the final stages of production validation with a view to realising commercial sales in coming months.

Initial results from testing have shown strong potential for the development of a PureGRAPH®-enhanced fire-retardant steel coating. The aim is to develop a coating that prolongs the time taken for steel to deform and collapse when exposed to fire, allowing