Gratomic Announces Private Placement of Convertible Debentures and Equity Units

TORONTO, April 8, 2020 - Gratomic Inc. ("GRAT" or the "Company") (TSXV:GRAT)(FRANKFURT:CB81)(WKN:A143MR) is pleased to announce that it has engaged First Republic Capital Corporation ("First Republic") to act as its exclusive lead finder in respect of a non-brokered private placement to raise up to CAD $2,250,300 (the "Offering").

First Republic will act as exclusive lead finder on a commercially reasonable efforts basis to sell up to $1,667,000 aggregate principal amount of convertible debenture units ("Debenture Units") for an aggregate purchase price of $1,500,300 (representing an original issue discount equal to 10% of the purchase price). The Debenture Units will consist of up to 1,667 senior secured convertible debentures, with each Debenture Unit priced at $900 consisting of (a) one $1,000 face value convertible debenture, convertible at the option of the holder into common shares of the Company (a "Share") at $0.06 per Share, which will not bear interest until the maturity date, being 18 months from the closing of the Offering ("Closing Date"), and on the one year anniversary of the Closing Date, if the Debenture Units remain outstanding, the principal amount shall automatically increase by 5% to a face amount of $1,050 (a "Debenture Certificate"); and (b) 8,333 share purchase warrants ("Debenture Warrants") with each Debenture Warrant entitling the holder to purchase one additional Share at an exercise price of $0.10 per Share for a period of 24 months from the Closing Date. In addition, First Republic will act as exclusive lead finder on a commercially reasonable efforts basis to sell up to 12,500,000 working capital units ("WC Units") at a price of $0.06 per WC Unit for aggregate proceeds of up to $750,000. Each WC Unit shall include (a) one Share, and (b) one Share purchase warrant (an "WC Warrant"). Each WC Unit consisted of one (1) common share and one (1) common share purchase warrant (a "WC Warrant"). Each WC Warrant entitles the holder to acquire one (1) common share (a "WC Warrant Share") at $0.10 per WC Warrant Share for a period of 24 months from the closing date. The Debenture Units and the WC Units are collectively referred to as the ("Units").

In the event of default or upon maturity of the Debenture Certificates, the Debenture Certificates will bear interest at the rate of 18% per annum. The Company will have the right to prepay or redeem a part or the entire principal amount of the Debenture Certificates at any time by providing a minimum of 30 days and a maximum of 60 days of redemption notice prior to the redemption date.

The Company's obligations under the Debenture Certificates will be secured by substantially all of the Company's assets, including a pledge of the shares of the Company's subsidiaries to the debenture holders as security. Any income generated from the sale of graphite from the Company's Aukam Graphite Mine will first be allocated to repay the Debenture Certificates. The Debenture Units are subject to standard anti-dilution adjustments, change of control and other provisions applicable to a secured convertible debenture.

The Company has agreed to pay First Republic a sales commission equal to eight percent (8%) of the gross proceeds of the Units sold pursuant to the Offering. As additional compensation for acting as the finder in respect of the Offering, the Company will issue to First Republic, at Closing: (i) selling compensation unit warrants equal to 8% of the aggregate number of WC Units sold in the Offering, at an exercise price equal to $0.06 for a period of 2 years following the Closing Date. Each selling compensation unit warrant shall entitled the holder thereof, upon exercise, to receive one share and one WC Warrant; and (ii) selling compensation debenture warrants equal to 8% of the aggregate number of Shares underlying the Debenture Units on a fully converted basis, at an exercise price equal to $0.06 for a period of 2 years following the Closing Date. Each selling compensation debenture warrant shall entitle the holder thereof, upon exercise, to receive one Share and one half of one Debenture Warrant. For illustration purposes, if all 1,667 Debentures Units are sold, First Republic shall receive selling compensation warrants for 2,222,666 common shares and 1,111,333 Debenture Warrants, the exercise price to issue said securities shall be $0.06, and the Debenture Warrants shall be issued on the same terms as the Offering.

The Company also wishes to announce that it will settle an aggregate of $96,760.50 of debt owed to arm's length parties for the issuance of 1,546,008 common shares of the Company at a price of $0.06 per share (the "Debt Settlement").

All securities issued pursuant to the Offering and the Debt Settlement are subject to a statutory hold period of four months and a day following the Closing Date.

Closing of the Offering is expected to occur on or about April 30, 2020. The Offering and Debt Settlement are subject to certain conditions, including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals, including the approval of the TSX Venture Exchange.

"Gratomic has opted to pursue an alternate method of financing in order to minimize dilution of the Company's stock. We believe that this decision is in the best interest of Gratomic's valued shareholders." ~ Arno Brand, CEO.

The Company intends to use the net proceeds of the Offering for general working capital, and completing the remaining construction and commissioning of the Aukam Processing Facility in Namibia.

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.

About Gratomic Inc.

Gratomic is an advanced materials company focused on mine to market commercialization of graphite products most notably high value graphene-based components for a range of mass market products. We have a Joint Venture collaborating with Perpetuus Carbon Technology, a leading European manufacturer of graphenes, to use Aukam graphite to manufacture graphene products for commercialization on an industrial scale. The Company is listed on the TSX Venture Exchange under the symbol GRAT.

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

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

"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.