Annual information form
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ANNUAL INFORMATION FORM For the year ended June 30, 2026 SEPTEMBER 22, 2021 SEPTEMBER 15, 2026
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Page | ii TABLE OF CONTENTS 1. FORWARD-LOOKING STATEMENTS .................................................................................................1 2. CORPORATE STRUCTURE .................................................................................................................2 NAME, ADDRESS AND INCORPORATION ..........................................................................................................2 INTERCORPORATE RELATIONSHIPS ................................................................................................................2 3. GENERAL DEVELOPMENT OF THE BUSINESS ...............................................................................2 YEAR ENDED JUNE 30, 2024 .........................................................................................................................3 YEAR ENDED JUNE 30, 2025 .........................................................................................................................3 YEAR ENDED JUNE 30, 2026 .........................................................................................................................3 CORPORATE UPDATE ....................................................................................................................................3 2027 OUTLOOK ............................................................................................................................................4 4. DESCRIPTION OF THE BUSINESS .....................................................................................................4 TARGET MARKETS ........................................................................................................................................6 COMMERCIALIZATION PROCESS AND DEVELOPMENT ......................................................................................8 SALES ..........................................................................................................................................................8 PRODUCTION PROCESS ................................................................................................................................9 SPECIALIZED SKILL AND KNOWLEDGE ............................................................................................................9 COMPETITIVE CONDITIONS ......................................................................................................................... 11 INTELLECTUAL PROPERTY .......................................................................................................................... 12 CYCLES .................................................................................................................................................... 12 ECONOMIC DEPENDENCE ........................................................................................................................... 12 ENVIRONMENT, HEALTH AND SAFETY ......................................................................................................... 13 EMPLOYEES ...............................................................................................................................................13 REORGANIZATIONS .................................................................................................................................... 13 5. RISK FACTORS ................................................................................................................................. 13 6. DIVIDENDS AND DISTRIBUTION ..................................................................................................... 21 7. DESCRIPTION OF CAPITAL STRUCTURE ..................................................................................... 21 8. MARKET FOR SECURITIES ............................................................................................................. 22 TRADING PRICE AND VOLUME..................................................................................................................... 22 PRIOR SALES ............................................................................................................................................ 22 9. DIRECTORS AND EXECUTIVE OFFICERS ..................................................................................... 23 NAME, OCCUPATION AND SECURITY HOLDING OF DIRECTORS AND EXECUTIVE OFFICERS ............................. 23 CEASE TRADE ORDER, BANKRUPTCY, PENALTIES OR SANCTIONS ................................................................ 25 CONFLICTS OF INTEREST ............................................................................................................................ 25 10. LEGAL PROCEEDINGS AND REGULATORY ACTIONS ................................................................ 26 LEGAL PROCEEDINGS ................................................................................................................................ 26 REGULATORY ACTIONS .............................................................................................................................. 26 11. INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS .......................... 26 12. AUDIT COMMITTEE .......................................................................................................................... 26 THE AUDIT COMMITTEE CHARTER .............................................................................................................. 26 COMPOSITION OF THE AUDIT COMMITTEE ................................................................................................... 26 RELEVANT EDUCATION AND EXPERIENCE.................................................................................................... 26 AUDIT COMMITTEE OVERSIGHT .................................................................................................................. 27
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Page | iii RELIANCE ON CERTAIN EXEMPTIONS .......................................................................................................... 27 PRE-APPROVAL POLICIES AND PROCEDURES.............................................................................................. 27 EXTERNAL AUDITOR SERVICE FEES ............................................................................................................ 27 13. TRANSFER AGENT AND REGISTRAR ............................................................................................ 27 14. MATERIAL CONTRACTS .................................................................................................................. 27 15. INTEREST OF EXPERTS .................................................................................................................. 27 16. ADDITIONAL INFORMATION ........................................................................................................... 28 SCHEDULE “A” .............................................................................................................................................1 AUDIT COMMITTEE CHARTER .........................................................................................................................1
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Page | 1 Except as otherwise indicated, and with the exception of information presented in the documents referred to in this Annual Information Form that were completed on another date, this Annual Information Form presents the results for the year ended June 30, 2026, and all amounts are expressed in Canadian dollars. 1. FORWARD-LOOKING STATEMENTS Certain statements in this Annual Information Form constitute forward -looking statements. These statements relate to future events or future performance of the Corporation, business prospects or opportunities and product development. All statements other than statements of historical facts may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes that the expectations reflected in these forward -looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct. These statements speak only as of the date of this Annual Information Form. Such statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about the ability for the Corporation to market and sell its products , t he relationship with marketing partners and suppliers , the ability for the Corporation to attract capital and other financial risks, business and economic conditions , the ability to attract and retain skilled staff , competition, tax benefits and tax rates, as well as foreign currency exchange rates. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the following risk factors described under the heading “RISK FACTORS” in this Annua l Information Form, which reflect, to the Corporation’s knowledge, the material risks and uncertainties it faced as of June 30, 2026: • Global Economic Issues; • Revenue from Graphene Sales; • Long and Complex Sales Cycle; • Product Development and Technological Change; • Market Development and Sustained Growth; • Liquidity Concerns and Future Financing; • Laws and Regulations, Licenses and Permits; • Intellectual Property; • Dependence on Management and Key Personnel; • Qualified Employees; • Competition; • Cybersecurity Threats; • Share Price Fluctuations; • Cost Absorption and Purchase Orders; • Acquisitions; • Launch and Operational Costs; • Cyclical Risks; • Product Warranty, Recall and Liability Risk; • Material and Commodity Prices; • Quote/Pricing Assumptions; • Uninsured Risks; • Foreign Exchange; • Litigation; • Lithium-ion battery cells, which have been observed to catch fire or vent smoke and flame; • Supply Chain Dependence and Disruption. • Change in the U.S. trade policies or regulations; • Dependence on Key Customers; and • Lease obligations. Investors should not place undue reliance on forward-looking statements as the plans, intentions or expectations upon which they are based might not occur. The Corporation cautions that the foregoing list of risk factors is not exhaustive. Investors and others who rely on the Corporation's forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. The reader must not unduly rely upon the Corporation’s prospective statements. Further, the Corporation does not intend, and does not assume any obligation, to update these forward -looking statements, except as may be required by applicable laws.
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Page | 2 2. CORPORATE STRUCTURE NAME, ADDRESS AND INCORPORATION NanoXplore Inc. (“ NanoXplore” or the “ Corporation”) was incorporated on May 5, 1995, under the Business Corporations Act (Alberta). On August 17, 2012, the Corporation, formerly known as Graniz Mondal Inc. ("Graniz"), was continued under the Canada Business Corporations Act (“CBCA”). On August 29, 2017, the Corporation completed a three -cornered amalgamation involving Graniz, Group NanoXplore Inc. and 9363-0770 Québec Inc., which constituted a reverse takeover of Graniz by Group NanoXplore Inc. under the policies of the TSX Venture Exchange (the “RTO”). Pursuant to the RTO, Graniz changed its name to NanoXplore Inc., merged with Group NanoXplore Inc. and since then operates as “NanoXplore Inc.” NanoXplore is now listed on the Toronto Stock Exchange (“TSX”) and is trading under the symbol “GRA”. It is also listed on the OTCQX and is trading under “NNXPF”. The Corporation’s head and registered office is located at 4500 Thimens Blvd, Montréal, Québec H4R 2P2. INTERCORPORATE RELATIONSHIPS 3. GENERAL DEVELOPMENT OF THE BUSINESS NanoXplore is an advanced materials and graphene technology company that manufactures high -volume graphene powders and graphene -enhanced products through proprietary production processes designed to address the performance requirements of different industrial and energy storage applications. The Corporation provides standard and custom graphene-enhanced plastic and composite products to various customers in transportation and recreational, packaging, electronics, and other industrial sectors. The Corporation is also, through its wholly owned subsidiary VoltaXplore Inc., a manufacturer of silicon -based, graphene-enhanced lithium-ion battery cells for both dual -use and defence applications, including drones, UGVs, and portable electronics. NanoXplore is headquartered in Montr éal, Québec with manufacturing facilities in Canada, the United States and Switzerland.
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Page | 3 YEAR ENDED JUNE 30, 2024 CORPORATE UPDATE On September 20, 2023, Jesse C. H. Stanley was appointed as board member of NanoXplore. FINANCIAL UPDATE On November 27, 2023, NanoXplore received TSX approval for the adoption of a normal course issuer bid program. On April 30, 2024, NanoXplore closed a $60M new credit facility with Royal Bank of Canada as lender. YEAR ENDED JUNE 30, 2025 CORPORATE UPDATE The Corporation proceeded, effective as of July 1 st, 2024, with a restructuring of its European entities, in an effort to simplify its corporate structure. On July 5th, 2024, Hélène V. Gagnon was appointed as board member of NanoXplore. FINANCIAL UPDATE On February 26, 2025, NanoXplore received TSX approval for the adoption of a normal course issuer bid program. YEAR ENDED JUNE 30, 2026 CORPORATE UPDATE On September 15, 2025, the Corporation announced a CEO transition. Soroush Nazarpour, the company’s founder, President and Chief Executive Officer would be stepping down at the December 202 5 annual general meeting of shareholders and would be replaced by Rocco Marinaccio, the Corporation’s Chief Operating Officer. On December 4, 2025, Mr. Nazarpour stepped down from his position of President and Chief Executive Officer and was replaced by Mr. Marinaccio. On February 27, 2026, Mr. Nazarpour resigned from the Board of Directors. On May 19, 2026, Mr. Marinaccio was appointed to the Board of Directors. FINANCIAL UPDATE On October 30, 2025, the Corporation completed a financing by way of a bought deal private placement of 10,720,350 common shares at a price of $2.40 per share for gross proceeds of $25,728,840. 2027 OUTLOOK The Corporation’s focus is expected to remain on the continued commercialization of graphene powders and graphene- enhanced products including thermoplastic and thermoset products for applications in transportation and recreational, packaging (non -food), building and construction, industrial, battery materials, and lubricants. The Corporation also expects to continue expanding its dry -process exfoliation product platform, ramping production capabilities, and supporting growth with both new and existing customers. Through VoltaXplore, the Corporation intends to pursue opportunities for its high-performance cylindrical lithium-ion battery cells in defence and dual-use applications, including drones, unmanned ground vehicles and portable electronics, with a focus on Canadian and U.S. customers.
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Page | 4 4. DESCRIPTION OF THE BUSINESS The Corporation was formed to commercialize proprietary technologies for the production of graphene and to develop graphene-enhanced materials, intermediary products, and end-use applications across multiple markets. First isolated and characterized in 2004, graphene is a single layer of carbon atoms configured in an atomic-scale honeycomb lattice. Among many noted properties, monolayer graphene is harder than diamonds, lighter than steel but significantly stronger, and conducts electricity better than copper. Graphene has unique capabilities for energy storage, thermal conductivity, electrical conductivity, barrier properties, lubricity, and the ability to impart physical property improvements when incorporated into plastics, composites or other matrices. The Corporation’s business model is based on bringing innovative solutions to market using high-quality graphene powders that are tailored for end application. Such advanced material provides a substantial added value to final products. The Corporation’s current product offerings are reflected in Fig 1. Fig 1: The Corporation’s product offering NanoXplore believes that the unique properties of graphene will enable numerous new product applications and the market for such products will grow at a rapid pace, creating significant market opportunities. The Corporation’s business model is to design, manufacture and sell various grades and types of graphene powder under the GrapheneBlack ™ brand such as graphene enhanced thermoplastics (e.g. Polyethylene , Polypropylene, and Nylon), and graphene enhanced thermosets (e.g. Polyester), and molded plastic and composite products. • Graphene powder and battery materials The commercial market for graphene remains small relative to established carbon materials but is forecast to grow substantially over the coming decade. IDTechEx, in its report titled "Graphene & 2D Materials 2026-2036: Technologies, Markets, Players " published in August 2025, forecasts that the global market for graphene materials will reach approximately US$2.7 billion by 2036, representing a compound annual growth rate of approximately 27% over that period. IDTechEx identifies the need for improved thermal management, sustainability, lightweighting and improved product lifetime as key market drivers for graphene. The Corporation believes this anticipated growth to be attributable in part to increasing demand for sustainability solutions. The same report provides segmented ten -year forecasts across eighteen application areas, including energy storage (comprising lithium -ion batteries, silicon anode batteries and supercapacitors), thermal management, composites, coatings, concrete, and sensors. In battery applications, IDTechEx identifies carbon black as the incumbent conductive carbon additive against which graphene competes, and notes that carbon nanotubes have only recently achieved significant revenues, driven by their adoption in lithium-ion batteries.
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Page | 5 • Concentrates and intermediary products To realize the performance benefits of graphene, it must be effectively dispersed into host materials, such as thermoplastics and thermosets, and liquids. This dispersion process is technically complex and requires the interaction between graphene and the surrounding matrix to be optimized so that graphene’s properties can be transferred to the final product. The interface between graphene particles and matrix is of particular importance as it acts as a bridge. As these mixing processes are highly complex, the Corporation offers graphene pre -mixed products, either internally or through its partners, to simplify the use of its products by customers. The Corporation’s products are especially appropriate in material composites and liquid dispersions requiring improved: o Mechanical and structural properties; o Thermal and/or electrical conductivity; and o Lubricity, wear and abrasion resistant and long-lasting surface properties. • Graphene enhanced plastic and composite parts Over the past several years, NanoXplore has acquired plastic and composite manufacturing assets and businesses to expand its manufacturing capabilities and accelerate the commercialization of graphene -enhanced products. These acquisitions have provided the Corporation with platforms to develop, validate and introduce graphene -enhanced materials in real-world applications across the transportation and recreational, building and construction, and industrial markets. They have also enabled NanoXplore to demonstrate the performance benefits of graphene-enhanced products to OEMs and other customers, integrate graphene into products manufactured by its acquired business es, diversify its operations and strengthen its balance sheet. NanoXplore’s plastic and composite activities are focused on closed-mold and precision molding processes for a variety of applications and industries in North America and Europe. These range from precision injection molding for the automotive, medical, electro -mechanical and watch -making markets; closed-mold processes such as sheet molding compound (“ SMC”), reaction injection molding using polydicyclopentadiene (“ DCPD”) and resin transfer molding (“RTM”) composite parts for the transportation, recreational, and industrial markets; and direct long fiber thermoplastic ("DLFT") compression molding for the recreational markets. Products manufactured using these processes include SMC and DCPD parts for trucks and construction equipment, composite bus flooring, pultruded composite parts, and injected plastic parts for the public transit, wind and agriculture markets. • Batteries The Corporation’s research and development activities, together with the successful commissioning of VoltaXplore’s 1 MWh battery production facility, have enabled it to begin supplying high-performance lithium-ion battery cells to interested parties for testing and validation. The facility produces cylindrical 21700 -format cells, a format suitable for energy storage applications requiring high performance such as high energy and/or power density, fast charging, operation in extreme temperatures – end use applications such as drones , UAVs and multiple defense and industrial applications. The Corporation can design cells with different performance attributes, including high -power and high - energy configurations. Our graphene-enhanced silicon enhance s the energy density of the high -power batteries and provides stability and long cycle life. The Corporation is specialized in adjusting battery materials and designs to meet customer’s energy storage requirements.
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Page | 6 TARGET MARKETS The Corporation is focused on various target markets to sell its graphene products and solutions. Transportation and Recreational Vehicles • Large and diverse market with potential for performance elevation by graphene , such as applications in interiors, composite body panels, and energy storage for electric vehicles ; furthermore, graphene enhanced recycled plastics are finding their way in several under the hood and interior parts of the vehicles providing a market pull for the Corporation’s business; • Product and design validation process is lengthy; however, the potential market is significant as graphene offers several added values, such as weight reduction; • Product offerings are graphene enhanced thermoplastic and thermoset concentrates and molded fibre- reinforced plastic and composite parts. Packaging (non-food contact) • Improved mechanical performance of packaging materials, particularly flexible packaging such as thin films. • Down-gauging, or using less plastic, enabled by graphene-enhanced mechanical properties. • Sustainability and increase d consumption of recycled plastic is a key driver for graphene in this market , as graphene assists with the reusability of plastics; • Regulatory approval process can be lengthy for food-contact applications, which explains the Corporation’s initial focus on non-food contact applications; • Product offerings are graphene powder and graphene enhanced thermoplastic concentrates. Lubricants The Corporation supplies Tribograf ®, a proprietary product manufactured at its Montreal facility, for use as a friction - reducing additive in industrial lubricant formulations. Graphene can form a protective boundary layer at contacting surfaces, reducing the coefficient of friction and asso ciated wear. Tribograf ® does not cause flow restriction, which makes it suitable for use in fluids that must circulate through equipment and formations. The Corporation's activities in this market span a commercial oil and gas application and earlier-stage development in other lubricant segments • Oil and gas drilling fluids: through a multi-year supply agreement with Chevron Phillips Chemical (“CPChem”), the Corporation supplies Tribograf ® to CPChem's Drilling Specialties division, which formulates it into a drilling-fluid lubricant marketed as NanoSlide. The formulation combines Tribograf and CPChem's synthetic base fluid to form a tribofilm that protects drill -pipe surfaces under high pressure and te mperature. The value proposition is a lower coefficient of friction and reduced drilling time, which lowers cost for the operator and can enable drilling in difficult formations. NanoSlide has been applied in challenging geological settings, including tight oil reservoirs, low-permeability and low-porosity formations, and extended-reach laterals • Metal cutting fluids: the Corporation is at an early stage of business development for graphene -enhanced metalworking and cutting fluids. The value proposition is a reduction in the coefficient of friction at the tool - workpiece interface, which can reduce tool wear and improve cutting performance. • Other high-stability applications: the friction -reduction and thermal characteristics of graphene may also be applicable to demanding fluid environments such as geothermal operations, where fluid stability under high temperature is important. Building, Construction and Industrial • In insulation foams such as Expanded Polystyrene (EPS) and Extruded Polystyrene (XPS), or Polyurethane (PU) foams, graphene can improve R-value and, in some cases, flame retardancy, while potentially replacing toxic or environmentally harmful additives. • Sustainability and increased consumption of recycled plastic is also a key driver for graphene in this market , as graphene assists with several added values , such as enabling the use of higher concentration of recycled plastics in the products, improved mechanical properties, and enhanced humidity barrier properties; in addition,
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Page | 7 graphene enhanced concretes are slow ly being introduced to the construction market, which present a significant growth opportunity; • Depending on the application, certification process length varies ; however, the Corporation is focused on applications with shorter certification processes; • Product offerings are graphene powder and graphene enhanced thermoplastic concentrates. Conductive Additives and Battery Materials Across a range of host materials, graphene functions as a conductive additive that imparts electrical conductivity while preserving the base material's other properties. Its high electrical conductivity and high aspect ratio allow a continuous conductive network to form at low loading levels. At a given level of conductivity, the Corporation's graphene usually delivers better mechanical performance, surface finish, and processability in the host material than conventional additives such as carbon black. This is the central value proposition for the Corporation's graphene across conductive applications, including: • Graphene can impart or enhance electrical conductivity and static dissipation in plastics, rubbers, paints, and coatings. • At suitable loading levels, graphene can provide electrostatic discharge (ESD) protection and electromagnetic interference (EMI) shielding for applications such as electronics housings, industrial components, and protective packaging. • The formation of a conductive graphene network improves electrical conductivity within battery anode and cathode slurries, while lowering internal resistance, which improves batteries’ power delivery and fast -charge performance. In the lithium-ion battery market specifically, graphene's role extends beyond that of a conductive additive: • Product offerings include high purity graphene conductive additives for battery electrodes, together with specialty formulated graphene-enhanced silicon anode material. Graphene can support higher energy density because silicon offers substantially higher capacity than conventional graphite as an anode material. Silicon's large volume change during charge and discharge can cause mechanical degradation and loss of electrical contact, which limits cycle life. Graphene's flexible, conductive structure can help accommodate this volume change and maintain the conductive network within the anode. This enables higher silicon content while supporting cycle life. Beyond lithium-ion, graphene can also be used as the active material itself in certain battery chemistries, such as the cathode of aluminum-ion batteries. Battery Cells The Corporation, through VoltaXplore, develops and produces silicon-based lithium-ion premium 21700 cylindrical cells, including cells built on its graphene -enhanced silicon anode technology. Rather than competing in high -volume commodity cell segments, VoltaXplore targets applications that require high energy density and high-power performance and that can support a premium cell in exchange for that performance. The cells are formulated with a high silicon content, which is central to the energy density they can deliver. • The cells are mainly intended for drones, unmanned aerial vehicles (UAVs), defence and dual-use applications, and other demanding portable and large -format applications where performance requirements are high and volumes are lower than in mass-market segments. • High energy density: the high silicon content of the anode provides greater capacity than conventional graphite- based cells, supporting longer run -time and range within a given size and weight, which is a primary requirement in drone, UAV, and portable applications.
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Page | 8 • High power performance: the graphene conductive network within the electrodes supports high power delivery and fast charge and discharge, which is important for applications with demanding duty cycles. COMMERCIALIZATION PROCESS AND DEVELOPMENT Since graphene remains an emerging material, most of the Corporation's customers are still at the development stage of incorporating graphene into their products. Commercialization follows a multi-step path. It starts with internal R&D to validate performance for an identified market or customer-specific need. The customers then validate the performance of the Corporation's materials and determine whether they can be incorporated into their manufacturing processes, which may also require certification to applicab le industry standards. This is generally done at pilot production scale levels. In some cases, customers may also require a full -scale production trial after the pilot -scale stage before approving the product for commercialization. Some customers may also require aging such as thermal aging, UV aging, or other durability testing, which can last several months after production trials, before they fully validate the results. The Corporation's customers then introduce products incorporating NanoXplore's materials to their own customers for further validation. After their customers have validated performance, the project may move to commercial scale production. Every customer usually goes through a similar process but will do so at varying speeds, depending on t he customer, the product application, and the end-use market. Given that this validation is specific to each customer's product design, manufacturing process, performance requirements, and qualification standards, success with one customer does not necessarily translate into success with another, even within the same market or application. These differences can also be geographic. Applicable industry standards, certification requirements, and the regulatory qualification of graphene as a material vary by jurisdiction and continue to evolve, so qualification or certification obta ined in one region does not necessarily carry over to another. Customer adoption drivers, including regulatory requirements for recycled content and sustainability, likewise differ by region and can affect where and how quickly demand develops. Materials qualified for one application may need to be re -validated for the next, and the full validation and certification cycle typically takes a considerable period of time. As a result, the Corporation cannot predict with precision when commercial-volume orders will begin or the volumes expected over time, though as customers advance through the process it generally receives feedback and gains greater insight into their commercialization plans. As graphene remains an emerging material class, the Corporation is in many cases creating new markets and enabling new applications rather than displacing an established product. SALES For each of its two most recently completed financial years, the following table identifies NanoXplore’s revenues from customers, on a consolidated basis: 2026 2025 $ $ Transportation and Recreation Vehicles 82,800,916 92,272,031 Building, Construction and Industrial 25,947,159 28,334,606 Agriculture 1,506,701 1,551,646 Wind Energy 1,480,267 903,713 Other 3,302,934 3,301,222 Total revenues from customers 115,037,976 126,363,218 *The above-mentioned amounts exclude grants and other revenues.
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Page | 9 PRODUCTION PROCESS NanoXplore uses two (2) proprietary graphene production platforms: (i) liquid-phase exfoliation for X -series products and (ii) dry-process exfoliation for xGnP™ products, also known as D-Series products. The following sections describe NanoXplore’s two graphene production processes and VoltaXplore’s Li-ion cylindrical cell manufacturing process. 1. Liquid Phase Exfoliation • The liquid-phase exfoliation line produces a very fine, fluffy black powder with secondary particle sizes ranging from 5 to 35 µm. One production module is currently installed at the facility, with the capacity to produce up to 4,000 tpy of graphene powder, depending on the grade. The following describes each production step in the liquid-phase graphene production facility. 1.1. Raw material feed To produce graphene, the process needs to combine different solids and feed them to the mills. The solids’ feed is composed of natural flake graphite, water, salts and active materials. Each of the solids has to be unloaded from their respective bulk bags into storage bins. From the storage bins, the solids then must be weighed before being introduced into the feed system. 1.2. Reverse osmosis water Reverse osmosis water is fed into each mill directly from the reverse osmosis water treatment unit. 1.3. Exfoliation After the addition of all the raw materials to each mill, the exfoliation process begins. By using a mechano -chemical exfoliation process, graphite turns into graphene. The material of the tanks and the grinding media is stainless steel 316L. After the exfoliation process is finished, the slurry inside the mills is transferred to two agitating tanks using special pumps. The approximate quality of the run is checked using pH and particle size measurements. If the run fails the quality check, the run is transferred to the waste treatment area. 1.4. Purification The slurry from the agitating tanks is then transferred into the purification area. This stage consists of centrifuges and small agitating tanks. The input slurry has a high pH. The first step is to reduce the pH to an acceptable range, which is lower than neutral, to remove all impurities. The next step is to bring the pH up to neutral, to have a neutralized product. 1.5. Solid liquid separation A filter separates graphene from the liquid using suction generated by a pump. The graphene is trapped on the filter cloth of a vacuum filter, and the liquid is transferred to the liquid -gas separator and transferred to the waste treatment area. The output of this stage is a wet graphene paste with around 50wt% moisture. 1.6. Drying and de-agglomeration Using conveyors, graphene is added to a dryer. The goal is to dry the graphene with around 50wt% moisture content to under 10wt%. At the end of this drying process, graphene forms a friable cake. To turn the cake into powder and de - agglomerate, the cake enters a secondary mill. 1.7. Further drying and classification From the secondary mill, the graphene is dropped into an air-based drying system, with the goal to dry the graphene to have less than 2wt% moisture content and de -agglomerate any small, agglomerated particles. During this process, coarse products are separated from fine products. Based on the particle size of the dried products, they are separated and fed directly to the packaging area as final products. 1.8. Ternary milling
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Page | 10 The coarse products may undergo a ternary milling process for further particle size reduction, depending upon customer needs. 1.9. Product handling, storage and packaging The fully processed graphene products are then packaged inside the plant in small and big bags in a specific area and, from that area, are transported by forklifts to the wrapping and storage area. 1.10. Waste treatment and reverse osmosis unit To minimize the amount of water consumption in the production process, a waste treatment unit followed by a reverse osmosis unit was installed. The waste treatment unit consists of: • A wastewater tank that collects all of the waste generated throughout the system; • A reactor, which is a tank where flocculants and other chemicals are added in order to control the pH and sediment the solid waste; • A filter unit, which consists of multiple filters such as a filter press and ultrafiltration, to separate the solid from the liquid; • A treated wastewater tank. The treated wastewater is transferred from the treated tank to the reversed osmosis system. The reverse osmosis water is stored in process water tanks to be reused in the production. 2. Dry-process Exfoliation NanoXplore currently has a dry-process exfoliation module installed at its Thimens facility with up to 1000 tpy capacity depending on the product grade. The following describes each production step in the dry-process graphene production facility. 2.1. Pre-conditioning of raw materials The graphite feedstock passes through a series of physical (non -chemical) process steps before entering the dry exfoliation chamber. These steps maximize exfoliation efficiency and influence the product type and quality. 2.2. Dry-process exfoliation The pre-conditioned graphite is exfoliated in a single step under a controlled environment. 2.3. Post-processing The exfoliated graphene cannot pass directly from a controlled to a non -controlled environment. A controlled post - processing step, which includes a special transfer, manages this transition. This step also affects key product quality parameters. 2.4. Packaging The finished graphene powder is packaged for storage and shipment. 3. Cell Manufacturing Currently, NanoXplore has 1MWh battery production line within its VoltaXplore’s facility in Montreal. This facility is focused on producing Li-ion battery cells in cylindrical format. Below is a description of each production step in the battery production facility. 3.1. Electrode production
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Page | 11 • Battery materials enter the mixing tanks and after thoroughly mixing, they will be coated on copper and aluminum foils; • Coated electrodes follow a pressing and control quality process; • And then coated electrodes will be slitted into different width depending on the final dimension of the battery cells. 3.2. Cell assembly • Coated electrodes are fully dried using drying ovens; • Electrodes and separators are rolled together to produce the core (Jelly roll) of the battery cells; • Then Jelly roll is placed within the aluminum cylinder and electrolyte is injected in the cylinder; • Jelly roll is then electrically connected and the top cap is cramped on the cylinder. 3.3. Cell formation Fully made cylinders undergo a formation step where they are exposed to different temperatures and charging rates. SPECIALIZED SKILL AND KNOWLEDGE Recruiting and retaining qualified personnel is critical to the Corporation’s success. Especially if it relates to its graphene operations, finding skilled scientists and a sales team familiar with the subject matter is difficult. The number of persons skilled in the high -tech manufacturing business is limited and competition for this workforce is intense. See “Qualified Employees” under the heading “RISK FACTORS” below. COMPETITIVE CONDITIONS The plastic and composite additive markets and the energy storage markets are extremely competitive. The Corporation believes that its aggressive acquisition plan and strong R&D capabilities will keep it ahead of the competition, as it has better access to OEMs, resulting in faster qualification and integration of graphene into end-products. The table below summarizes several important players in the graphene market and their product offering: Competitors Product Offering Type Focused Market Location Directa Plus Graphene Manufacturer Graphene nanoplatelets Sporting Goods North America and Asia First Graphene Graphene Manufacturer Graphene nanoplatelets Rubber Australia Graphenea Graphene manufacturer CVD Graphene and Graphene nanoplatelets Electronics and Research Europe G6 Material Corp. (previous known as Graphene 3D Lab) Graphene Manufacturer Graphene nanoplatelets 3D Printing and Composites North America Haydale Graphene functionalization - Composites and Medical Europe and Asia Graphene Manufacturing Group (GMG) Graphene Manufacturer Graphene coatings and slurries HVAC, Lubricants and Energy Storage Australia HydroGraph Graphene Manufacturer Graphene nanoplatelets Energy storage North America
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Page | 12 Amprius Technologies Battery Cells Hi power and high energy Aviation and Defense North America E-One Moli Battery cells High power batteries Tools and sport cars North America and Asia Lyten Graphene Battery cells Li-sulfur batteries Transportation North America The main raw material needed for the production of graphene is natural flake Graphite. The Corporation believes that there is currently an oversupply in the market of natural flake Graphite. The Corporation’s Graphite is currently procured from multiple suppliers. graphite is also readily available from alternative sources. All other raw materials used in the production of graphene are readily available and equipment used in the production of graphene are off -the-shelf equipment. INTELLECTUAL PROPERTY The Corporation protects its technology through a combination of patents, trade secrets, proprietary know -how, and employee and third -party confidentiality agreements. As at June 30, 2026, the Corporation owns 29 patent families, represented by 71 issued patents and 30 pending patent applications, filed across 13 national and regional jurisdictions together with international (PCT) applications. The portfolio is counted on a one -family, one-invention basis; a single family may include issued patents and pending applications in more than one jurisdiction. The families are grouped below into three areas: graphene manufacturing, graphene applications, and battery materials and cells. Technology area Patent families Issued patents Pending applications Total issued and pending Jurisdictions Expiry (if granted) Graphene Manufacturing 7 36 6 42 AU, CA, CN, DE, EP, GB, JP, KR, TW, US 2032–2038 Graphene Applications 10 5 10 15 CA, MX, US 2037–2045 Battery Materials and Cells 12 30 14 44 CA, CN, DE, EP, ES, FR, GB, JP, KR, TW, US, PCT 2032–2044 Total 29 71 30 101 13 jurisdictions plus PCT 2032–2045 Patent applications confer no enforceable rights unless and until they are issued. An international (PCT) application is counted once and does not carry a fixed expiry date until national phase is entered in individual jurisdictions. Certain recently filed families have not yet published, and their subject matter is therefore not described. CYCLES A portion of the business of the Corporation is cyclical, especially as it relates to its activities in the transportation and recreational industry. It is dependent on, among other factors, general economic conditions in North America and elsewhere. See “Cyclical Risks” under the heading “RISK FACTORS” below. ECONOMIC DEPENDENCE In regard to NanoXplore’s composites’ parts manufacturing operations, North America is a key truck producing region for the Corporation and operating results are dependent on truck production in this region by its customers. Due to the nature of this part of the Co rporation’s business, it is dependent upon a few large customers such that the loss of an
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Page | 13 entire program by any of these customers, the loss of any such customers for any reason or the insolvency of any such customers, significantly reduced sales of truck platforms of such customers, or shift in market share on trucks on which it has significant content, or any significant or sustained declin e in these customer’s truck production volumes in North America, could significantly reduce the Corporation’s ongoing revenue and/or profitability, and could materially and adversely affect the Corporation’s financial condition. Although the Corporation has reduced its dependence in the past and continues to diversify its business into the future, there is no assurance that it will continue to be successful. The Corporation does not have any significant economic dependence upon its suppliers. See “ Cyclical Risks” under the heading “RISK FACTORS” below. ENVIRONMENT, HEALTH AND SAFETY Large volume production of graphene requires permits and approvals from various government authorities, and is subject to extensive federal, provincial, state, and local laws and regulations governing development, production, exports, taxes, labour standards, occupational health and safety, environment and other matters. As graphene is a new chemical substance, pr oduction and sale of graphene may be subject to specific occupational health and safety and environment regulatory approvals in different jurisdictions including, without limitations, under the Canadian Environmental Protection Act (Canada), the Food and Drug Act (Canada), the Toxic Substances Control Act (USA), the Food Drug and Cosmetic Act (USA) and the Registration, Evaluation, Authorization and Restriction of Chemicals (Europe). Such laws and regulations are subject to change, can become more stringent, and compliance can be costly. There can be no guarantee that the Corporation will be able to maintain or obtain all necessary licences, permits and approvals that may be required to produce or sell graphene, and such failures could have a material adverse effect on the Corporation. See “Laws and Regulations, Licenses and Permits” under the heading “RISK FACTORS” below. EMPLOYEES As of June 30, 2026, the Corporation had 363 employees. REORGANIZATIONS NanoXplore is the resulting entity from the RTO completed in 2017, described above under the heading “CORPORATE STRUCTURE”. Following the RTO, on November 23, 2017, the Corporation acquired all of the issued and outstanding shares of CEBO through its wholly owned subsidiary NanoXplore Switzerland Holding SA. CEBO is a Swiss -based injection molding company which provides customers with high precision and high -quality injection molded products, and s erves the automotive, medical, industrial and watches manufacturing markets. CEBO has expertise in highly precise parts, over molding, insert molding, and complex and precise parts and assemblies of plastic, metal and ceramic. This acquisition was concluded in order to introduce NanoXplore’s graphene-enhanced solution products into the products of CEBO. In September 2018, the Corporation completed an arrangement under the CBCA pursuant to which it acquired all of the issued and outstanding common shares of Sigma, a manufacturing company specializing in the manufacture of composite products. It operates in markets for heavy trucks, buses, public transit, machinery and wind energy. Sigma sells its products to original equipment manufacturers and distributors in the United States, Canada and Europe. On September 11, 2020, through its wholly owned indirect subsidiary RMC Advanced Technologies Inc., the Corporation acquired substantially all of the assets of CSP used in connection with its lightweight composite solutions and material business as conducted in Newton, North Carolina. This acquisition was concluded in order to expand the Corporation’s business in the United States. On December 15, 2021, the Corporation acquired all issued and outstanding shares of Canuck Compounders Inc. On March 24, 202 3, the Corporation acquired from Martinrea Innovation Developments Inc. its 50% equity stake in VoltaXplore. Effective as of July 1st, 2024, the Corporation proceeded to a reorganization of its European entities. 5. RISK FACTORS The Corporation has identified certain risks and uncertainties that are difficult to predict and may have a material adverse effect on its business, results of operations, or financial condition. In any such case, the market price of its Common Shares could decline, and investors may lose all or part of their investment.
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Page | 14 The following list of risk factors is not exhaustive. Investors should carefully consider these and other risks, one or all of which may be material, before purchasing securities of the Corporation. The Corporation will, on occasion, make forward-looking statements about its expectations, its business and industry, and operations. These forward -looking statements are made at a point in time, based on certain assumptions. They are subject to change without notice as a result of the risks described herein and other risks. Investors or potential investors in the Corporation should not rely on forward-looking statements or the Corporation’s historical operating performance as a prediction of actual results, and the Corporation undertakes no obligation to update forward -looking information. In addition, the Corporation operates in a rapidly changing business and economic environment, and new potentially material risk factors emerge from time to time. GLOBAL ECONOMIC ISSUES Current global economic conditions, which have been subject to increased volatility, may impact the Corporation’s access to public financing and its ability to obtain equity or debt financing on favourable terms. The Corporation operates in a volatile economic environment. As a result, if unemployment, interest or inflation rates fluctuate substantially or increase to significant levels, they could have an impact on the Corporation’s operating activities, financial position and profitability. In addition, the Corporation is exposed to market risk related to the current global inflationary situation, as the various environmental, social, political, economic and health factors had significant consequences on the world economy. In order to reduce inflation, several central b anks are now tightening their monetary policies, which has an impact on interest rates, foreign currency exchange rates and economic development. The risks of recession in one or several of the countries where the Co rporation operates are growing and could have an adverse impact on the Corporation’s net earnings, financial position or cash flows. LONG AND COMPLEX GRAPHENE SALES CYCLE It has been the experience of the Corporation that the average sales cycle for its graphene powder and graphene enhanced products can range from one to multiple years from the time a customer begins testing the Corporation’s product until the time that they could be used in a commercial product. The product introduction timing will vary based on the target market. The sales and development cycles for the Corporation’s products are subject to customer budgetary constraints, internal acceptance procedures, co mpetitive product assessments, scientific and development resource allocations, and other factors beyond the Corporation’s control. If the Corporation is not able to successfully accommodate these factors to enable customer development success, the Corporation may be unable to achieve sufficient sales to reach profitability. Failure to achieve profitability may have a material adverse effect on the Corporation’s operating results. Graphene Sales cycle is long and complex. Several milestones must be reached to see a widespread adoption of graphene in several markets. • Availability of Supply: The first step is to demonstrate that the technology has reached a level of maturity that a consistent and reliable supply of graphene is available in an industrial setting and at a cost that is acceptable. • Graphene certification as a substance: Any new material requires to be certified in order to be produced and shipped cross borders. Each jurisdiction has its own requirement, U.S. Environmental Protection Agency (“EPA”), Environmental Canada, and the European Union's European Chemicals Agency ("ECHA"), which administers REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) are examples of these entities which aim to provide a high level of protection of human health and the environment from the use of chemicals/substance. • Product validation: This includes technical performance, financial validation, sustainability and life -time analysis, processability and logistic, and more. Different players in the supply chain are involved in validating the performance of graphene. OEMs, molders, and formulators are all involved in these steps, making it a long and unpredictable process. • Product level certification: Majority of products and applications are certified through ASTM or ISO certifications. For instance, for a new additive to be used in plastic pipes, corresponding ASTM and ISO certifications have to be modified. PRODUCT DEVELOPMENT AND TECHNOLOGICAL CHANGE As there is limited sustained history of successful use of the Corporation’s graphene powder and graphene enhanced products in commercial applications, there is no assurance that broad successful commercial applications may be technically feasible. Most, if not all, of the scientific and engineering data related to the Corporation’s products has been
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Page | 15 generated by the Corporation’s own laboratories or laboratory environments at our customers or third -parties, like universities and national laboratories. It is well known that laboratory data is not always representative in commercial applications. Additionally, the industries in which the Corporation operates are characterized by rapid technological change and frequent new product introductions. Part of the Corporation’s business strategy is to monitor such change and take steps to remain technologically current, but there is no assurance that such strategy will be successful. If the Corporation cannot adapt to new advances in materials sciences, or if unforeseen technologies or materials emerge that are not compatible with the Corporation’s products and services or that could replace its products and services, the Corporation’s revenues and business would likely be adversely affected. MARKET DEVELOPMENT AND SUSTAINED GROWTH Failure to further develop the Corporation’s key markets and existing geographic markets or to successfully expand its business into new markets could have an adverse impact on sales growth and operating results. The Corporation’s ability to further penetrate its key markets and the existing geographic markets in which it competes, and successfully expand its business into other countries, is subject to numerous factors, many of which are beyond its control. There can be no assurance that efforts to increas e market penetration in the Corporation’s key markets and existing geographic markets will be successful. Failure to achieve these goals may have a material adverse effect on the Corporation’s operating results. LIQUIDITY CONCERNS AND FUTURE FINANCING The Corporation is ultimately dependent on the commercial sales of graphene powder . and graphene enhanced products, including batteries. Any delay in the sales of such products could require additional financing. There can be no assurance that the Corporation will be successful in obtaining the required financing as and when needed. Volatile markets may make it difficult or impossible for the Corporation to obtain debt financing or equity financing on favorable terms, if at all. Failure to obtain additional financing on a timely basis may cause the Corporation to postpone or slow down its development plans or reduce or terminate some or all of its activities. LAWS AND REGULATIONS, LICENSES AND PERMITS Legislation is evolving in a manner that is creating stricter standards, while enforcement, fines and penalties for noncompliance are also increasingly stringent. A significant change in the legal and regulatory environment in which the Corporation currently carries on business could adversely affect the Corporation’s operations. In particular, large volume production of graphene requires permits and approvals from various government authorities, and is subject to extensive federal, provincial, state, and local laws and regulations governing development, production, exports, taxes, labour standards, occupational health and safety, environment and other matters. As graphene is a new chemical substance, production and sale of graphene may be subject to specific occupational health and safety and environment regulatory approvals in different jurisdictions including, without limitations, under the Canadian Environmental Protection Act (Canada), the Food and Drug Act (Canada), the Toxic Substances Control Act (USA), the Food Drug and Cosmetic Act (USA) and the Registration, Evaluation, Authorization and Restriction of Chemicals (Europe). Such laws and regulations are subject to change, can become more stringent, and compliance can be costly. there can be no guarantee that the Corporation will be able to maintain or obtain all necessary licences, permits and approvals that may be required to produce or sell graphene, and such failures could have a material adverse effect on the Corporation. INTELLECTUAL PROPERTY The Corporation relies on the patent, trade secret and other intellectual property laws of Canada, the United States and the other countries where it does business to protect its intellectual property rights. The Corporation may be unable to prevent third parties from using its intellectual property without its authorization. The unauthorized use of the Corporation’s intellectual property could reduce any competitive advantage that it has developed, reduce its market share or otherwise harm its business. In the event of unauthorized use of the Corporation’s intellectual property, litigation to protect and enforce the Corporation’s rights could be costly, and the Corporation may not prevail. Many of the Corporation’s technologies or other intellectual property are not covered by any patent or patent application, and the Corporation’s issued and pending Canadian, United States and other countries’ patents may not provide the Corporation with any competitive advantage and could be challenged by third parties. The Corporation’s inability to secure issuance of pending patent applications may limit its ability to protect the intellectual property rights these pending
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Page | 16 patent applications were intended to cover. The Corporation’s competitors may attempt to design around its patents to avoid liability for infringement and, if successful, could adversely affect the Corporation’s market share. Furthermore, the expiration of the Corporation’s patents may lead to increased competition. In addition, effective patents, trade secrets and other intellectual property protection may be unavailable or limited in some foreign countries. In some countries, the Corporation does not apply for patent or other intellectual property protection. The Corporation also relies on unpatented technolog ical innovation and other trade secrets to develop and maintain its competitive position. Although the Corporation generally enters into confidentiality agreements with its employees and third parties to protect its intellectual property, these confidentia lity agreements are limited in duration, could be breached and may not provide meaningful protection of its trade secrets. Adequate remedies may not be available if there is an unauthorized use or disclosure of the Corporation’s trade secrets and manufactu ring expertise. In addition, others may obtain knowledge about the Corporation’s trade secrets through independent development or by legal means. The failure to protect the Corporation’s processes, technology, trade secrets and proprietary manufacturing expertise, methods and compounds could have a material adverse effect on its business by jeopardizing critical intellectual property. Where a product formulation or process is kept as a trade secret, third parties may independently develop or invent and patent products or processes identical to such trade secret products or processes. This could have a material adverse effect on the Corporation’s ability to make and sell products or use such processes and could potentially result in costly litigation in which the Corporation might not prevail. The Corporation could face intellectual property infringement claims that could result in significant legal costs and damages and impede its ability to produce key products, which could have a material adverse effect on its business, financial condition, and results of operations. DEPENDENCE ON MANAGEMENT AND KEY PERSONNEL The Corporation is dependent on the services of key executives, including a small number of highly skilled and experienced executives and personnel. The Corporation’s development to date has largely depended, and in the future will continue to depend, on the efforts of key management and other key personnel to develop its projects. Loss of any of these people, particularly to competitors, in the short term, could have a material adverse impact upon the Corporation’s business. QUALIFIED EMPLOYEES Recruiting and retaining qualified personnel is critical to the Corporation’s success. Especially if it relates to its graphene operations, finding skilled scientists and a sales team familiar with the subject matter is difficult. As the Corporation grows further, the need for skilled labour will increase. The number of persons skilled in the high -tech manufacturing business is limited and competition for this workforce is intense. This may adversely affect the business of the Corporation if it is unable to recruit and retain qualified personnel as and when required. COMPETITION The Corporation competes with other graphene and manufacturing companies, in highly competitive markets. Some of the Corporation’s competitors have substantially greater financial, marketing and other resources and higher market share that the Corporation has in certain products or geographic areas. As the markets for the Corporation’s products and other services expand, additional competition may emerge and competitors may commit more resources to products which directly compete with the Corporation’s products. There can be no assurance that the Corporation will be able to compete successfully with existing competitors or that its business will not be adversely affected by increased competition or by new competitors. CYBERSECURITY THREATS The reliability and security of the Corporation’s information technology (“ IT”) systems is important to the Corporation’s business and operations. Although the Corporation has established and continues to enhance security controls intended to protect the Corporation’s IT systems and infrastructure, there is no guarantee that such s ecurity measures will be effective in preventing unauthorized physical access or cyberattacks. A significant breach of the Corporation’s IT systems could, among other things, cause disruptions in the Corporation’s manufacturing operations (such as operational delays from production downtime, inability to manage the supply chain or produce product for customers, disruptions in inventory management), lead to the loss, destruction, corruption or inappropriate use of sensitive data, including employee information or intellectual property, result in lost revenues due to theft of funds or due to a disruption
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Page | 17 of activities, including remediation costs, or from litigation, fines and liability or higher insurance premiums, the costs of maintaining security and effective IT systems, which could negatively affect results of operations and the potential adverse impa ct of changing laws and regulations related to cybersecurity or result in theft of the Corporation’s, its customers’ or suppliers’ intellectual property or confidential information. If any of the foregoing events (or other events related to cybersecurity) occurs, the Corporation may be subject to a number of consequences, including reputational damage, a diminished competitive advantage and negative impacts on future opportunities which could have a material adverse effect on the Corporation. SHARE PRICE FLUCTUATIONS The market price of securities of many companies, particularly development stage companies, experience wide fluctuations in price that are not necessarily related to the operating performance, underlying asset values or prospects of such companies. There c an be no assurance that fluctuations in the Corporation’s share price will not occur. In particular, the fluctuations may be exaggerated if the trading volume of the Common Shares of the Corporation is low. COST ABSORPTION AND PURCHASE ORDERS Especially as it relates to its activities in the transportation and recreational industry, and given the current trends in that industry, the Corporation is under continuing pressure to absorb costs related to product design and development, engineering, program management, prototypes and validation. In particular, OEMs are requesting that suppliers pay for the above costs and recover these costs through the piece price of the applicable component. Contract volumes for customer programs not yet in production are based on the Corporation’s customers’ estimates of their ow n future production levels. However, actual production volumes may vary significantly from these estimates due to a reduction in consumer demand or new product launch delays, often without any compensation to the supplier by its OEM customer. Typical purchase orders issued by customers do not require that they purchase a minimum number of the Corporation’s products. For programs currently under production, the Corporation is generally unable to request price changes when volumes differ significantly from pr oduction estimates used during the quotation stage. If estimated production volumes are not achieved, the product development, design, engineering, prototype and validation costs incurred by the Corporation may not be fully recovered. Similarly, future pri cing pressure or volume reductions by the Corporation’s customers may also reduce the amount of amortized costs otherwise recoverable in the piece price of the Corporation’s products. Either of these factors could have an adverse effect on the Corporation’s profitability. While it is generally the case that once the Corporation receives a purchase order for products of a particular vehicle program it would continue to supply those products until the end of such program, customers could cease to source their production requirements from the Corporation for a variety of reasons, including the Corporation’s refusal to accept demands for price reductions or other concessions. ACQUISITIONS The Corporation has acquired and could continue to acquire complementary businesses, assets, technologies, services or products, at competitive prices. The Corporation could continue to pursue acquisitions in those product areas which were identified as key to the Corporation’s long-term business strategy. However, as a result of intense competition in these strategic areas, the Corporation may not be able to acquire the targets needed to achieve its strategic objectives. The completion of such transactions poses additional risks to the Corporation’s business. Acquisitions are sub ject to a range of inherent risks, including the assumption of incremental regulatory/compliance, pricing, supply chain, commodities, labor relations, litigation, environmental, pensions, warranty, recall, IT, tax or other risks. Although the Corporation seeks to conduct appropriate levels of due diligence on acquisition targets, these efforts may not always prove to be sufficient in identifying all risks and liabilities related to the acquisition, including as a result of: limited access to information; time constraints for conducting due diligence; inability to access target Corporation facilities and/or personnel; or other limitations in the due diligence process. Additionally, the Corporation may identify risks and liabilities that cannot be sufficiently mitigated through appropriate contractual or other protections. The realization of any such risks could have a material adverse effect on the Corporation’s operations or profitability. The benefit to the Corporation of previous and future acquisitions is highly dependent on the Corporation’s ability to integrate the acquired businesses and their technologies, employees and products into the Corporation, and the Corporation may incur costs associated with integrating and ra tionalizing the facilities (some of which may need to be closed in the future). The Corporation cannot be certain that it will successfully integrate acquired businesses or that acquisitions will ultimately benefit the Corporation. Any failure to successfully integrate businesses or failure of the businesses to benefit the Corporation could have a material adverse effect on its business and results of operations. Such transactions may also result in additional dilution to the Corporation’s shareholders or i ncreased debt. Such transactions may involve partners, and the formula
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Page | 18 for determining contractual sale provisions may be subject to a variety of factors that may not be easily quantified or estimated until the time of sale (such as market conditions and determining fair market value). LAUNCH AND OPERATIONAL COSTS The launch of new business, in an existing or new facility, is a complex process, the success of which depends on a wide range of factors, including the production readiness of the Corporation and its suppliers, as well as factors related to tooling, equipment, employees, initial product quality and other factors. A failure to successfully launch material new or takeover business could have an adverse effect on profitability. Significant launch costs were incurred by the Corporation in recent years. The Cor poration’s manufacturing processes are vulnerable to operational problems that can impair its ability to manufacture its products in a timely manner, or which may not be performing at expected levels of profitability. The Corporation’s facilities contain c omplex and sophisticated equipment that are used in its manufacturing processes. The Corporation has in the past experienced equipment failures and could experience equipment failure in the future due to wear and tear, design error or operator error, among other things, which could have an adverse effect on profitability. From time to time, the Corporation may have some operating divisions which are not performing at expected levels of profitability. Significant underperformance of one or more operating divisions could have a material adverse effect on the Corporation’s profitability and operations. CYCLICAL RISKS A portion of the business of the Corporation is cyclical, especially as it relates to its activities in the transportation and recreational industry. It is dependent on, among other factors, general economic conditions in North America and elsewhere. Future sales and production volumes are anticipated to be relatively flat or stable in North America over the next several years, but volume leve ls are uncertain, and volume levels can decrease at any time. There can be no assurance that North American truck production overall or specific platforms will not decline in the future or that the Corporation will be able to utilize any existing unused capacity or any additional capacity it adds in the future. A continued or a substantial additional decline in the production of trucks overall or b y customer or by customer platform may have a material adverse effect on the Corporation’s financial condition and results of operations and ability to meet existing financial covenants. North America is a key truck producing region for the Corporation and operating results are dependent on truck production in this region by our customers. Due to the nature of the Corporation’s business, it is dependent upon several large customers such that cancellation of a significant order by any of these customers, the loss of any such customers for any reason or the insolvency of any such customers, reduced sales of truck platforms of such customers, or shift in market share on trucks on which we have significant content, or any significant or sustained decline in truck production volumes in North America, could significantly reduce the Corporation’s ongoing revenue and/or profitability, and could materially and adversely affect the Corporation’s financial condition. Although the Corporation continues to diversify its business, there is no assurance that it will be successful. PRODUCT WARRANTY, RECALL AND LIABILITY RISK Especially as it relates to the Corporation’s composites parts manufacturing operations, customers are increasingly requesting that each of their suppliers bear costs of the repair and replacement of defective products which are either covered under a manufacturer’s warranty or are the subject of a recall by the manufacturer and which were improperly designed, manufactured or assembled by their suppliers. The obligation to repair or replace such parts, or a requirement to participate in a product recall, co uld have a material adverse effect on the Corporation’s operations and financial condition. MATERIAL AND COMMODITY PRICES Prices for key raw materials and commodities used in composite parts and graphene production, particularly graphite, polyester resin, glass fiber and other raw materials, as well as energy prices, have proven to be volatile at certain times. To the extent that the Corporation is unable to fully mitigate its exposure to price change of key raw materials and commodities, particularly through engineering products with reduced content, by passing price increases to customers, or otherwise, such additional costs could have a material adverse effect on profitability. Increased energy prices could also have an impact on production or transportation costs which in turn could affect competitiveness. QUOTE/PRICING ASSUMPTIONS Especially as it relates to the Corporation’s composites parts manufacturing operations, the time between award of new production business and start of production typically ranges between one to three years. Since product pricing is typically determined at the time of award, the Corporation is subject to significant pricing risk due to changes in input costs and
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Page | 19 quote assumptions between the time of award and start of production. The inability to quote effectively, or the occurrence of a material change in input cost or other quote assumptions between program award and production, could have an adverse effect on the Corporation’s profitability. UNINSURED RISKS The Corporation maintains insurance to cover normal business risks. In the course of its manufacturing businesses, certain risks and, in particular, unexpected or unusual catastrophic events including explosions and fire may occur. It is not always possible to fully insure against such risks as a result of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any future pr ofitability and result in increasing costs and a decline in the value of the Common Shares of the Corporation. FOREIGN EXCHANGE The Corporation operates internationally and is exposed to foreign exchange risk mainly related to expenses and sales in currencies other than the respective functional currencies of the Corporation, primarily with respect to the US dollar. Management has set up a policy that requires the Corporation to manage its currency risk and imposes strict limits on the maximum exposures that can be entered into. Sales denominated in US dollars accounted for around 57% of the Corporation's total sales for the year ended June 30, 2026. Consequently, the Canadian dollar trends in relation to the US dollar add an element of risk and uncertainty for the Corporation. These risks are partially offset by the raw material purchases denominated in US dollars. The Corporation's policy is not to use derivative financial instruments for trading or speculative purposes but only for hedging some risk related to the US dollar. The Corporation sets up credit facilities allowing it to enter into forward foreign or option exchange contract transactions. This amount partially covers the Corporation's potential requirements over the next 24 months. The Corporation will proactively monitor the need to use this facility based on market conditions. LITIGATION The Corporation has entered into legally binding agreements with various third parties, including supply, distribution, non-disclosure, consulting and partnership agreements. The interpretation of the rights and obligations that arise from such agreements is open to interpretation and the Corporation may disagree with the position taken by the various other parties resulting in a dispute that could potentially initiate litigation and cause the Corporation to incur legal costs in the future. Given the specul ative and unpredictable nature of litigation, the outcome of any such disputes could have a material adverse effect on the Corporation’s business. LITHIUM-ION BATTERY CELLS, WHICH HAVE BEEN OBSERVED TO CATCH FIRE OR VENT SMOKE AND FLAME VoltaXplore Inc. manufacture s lithium-ion battery cells . On rare occasions, lithium -ion cells can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials as well as other lithium- ion cells. Also, negative public perceptions regarding the suitability of lithium-ion cells for powersports applications, the social and environmental impacts of cobalt mining or any future incident involving lithium-ion cells, such as a vehicle or other fire could materially adversely affect VoltaXplore business, results of operations or financial condition. In addition, VoltaXplore stores a significant number of lithium-ion cells at its facility. Any mishandling of battery cells, or safety issue or fire related to the cells, may cause damage and disruption to the operation of VoltaXplore’s current or future facilities. GRAPHENE POWDER RISKS The Corporation manufactures, handles and stores graphene powder in significant quantities. Graphene is electrically conductive, and accumulated graphene dust can bridge electrical contacts and cause short circuits in electrical equipment, motors and control systems that are not rated for use in dust -laden environments. Such short circuits can result in equipment failure, electrical faults and fire. Graphene is also a fine powder. When dispersed in air at sufficient concentration within a confined space in the presence of an ignition source with sufficient oxygen, fine carbon powders can deflagrate or explode, and elevated temperature or pressure may increase this risk. The Corporation seeks to manage these risks through proper equipment selection, dust collection and housekeeping systems, engineering controls and operating procedures, but there can be no assurance that these measures will prevent an incident. In addition, the Corporation's dry exfoliation process includes a passivation step intended to stabilize the reactive surfaces created when graphite layers are separated. If passivation is not completed to specification, the resulting material may be chemically reactive and subject to self -heating, which could result in fire during processing, packaging, storage or transportation, including at customer facilities or in transit. Any such incident could result in property damage, personal
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Page | 20 injury, loss of inventory, interruption of production, regulatory investigation, product recall, litigation, increased insurance costs or reputational harm, any of which could have a material adverse effect on the Corporation's business, results of operations and financial condition. FLAMMABLE AND HAZARDOUS CHEMICALS IN COMPOSITES MANUFACTURING OPERATIONS The Corporation's composites operations use liquid resins and chemicals, including styrene -based unsaturated polyester resins used in sheet molding compound production, dicyclopentadiene, polyurethane systems and associated catalysts, initiators and solven ts. Many of these materials are flammable or combustible, and certain of them are hazardous to human health on exposure. The Corporation stores these materials in bulk at its facilities. Fire, spill, leak or improper handling involving these materials could result in property damage, personal injury, environmental contamination, business interruption, regulatory enforcement and remediation obligations. The Corporation's facilities are also subject to occupational health, safety, environmental and fire codes in each jurisdiction in which it operates, and compliance failures could result in fines, penalties, operating restrictions or facility shutdown. Insurance may not be available on commercially reasonable terms or may not cover the full extent of any resulting loss. ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) CONSIDERATIONS The Corporation could be subject to growing stakeholder expectations as it relates to ESG factors, including from investors, who are increasingly placing a greater emphasis on ESG factors when assessing investment options. Future investments made in the Co rporation, or future partnerships or business relations made with the Corporation may depend on various ESG standards. SUPPLY CHAIN DEPENDENCE AND DISRUPTION The Corporation is dependent on third-party suppliers, and it expects to continue to rely on third parties to supply in the future. While the Corporation obt ains raw material, parts and components from multiple sources whenever possible, some of the raw material, parts and components are purchased from a single source. The Corporation seeks to obtain its raw material, parts and components from multiple sources whenever possible, and to further mitigate supply chain risk the Corporation enters into long-term supply agreements with key manufacturers and suppliers where appropriate, While the Corporation believes that it may be able to establish alternate supply relationships and can obtain or potentially replacement components for some of its single source components, it may be unable to do so in the short-term or at all, or at prices, volumes or quality levels that are acceptable to it. The inability of any of the Corporation’s suppliers to deliver necessary raw material parts and components, according to the Corporation’s schedule and at prices, volumes or quality levels acceptable to the Corporation , the Corporation ’s inability to efficiently manage these parts and components, or the termination or interruption of any material supply arrangement could materially adversely affect the Corporation’s business, results of operations or financial condition. Any disruption in the supply of raw material, parts and components, whether or not from a single source supplier, could temporarily disrupt manufacturing of the Corporation’s products until an alternative supplier is able to supply the required material. Also, if any of the Corporation’s suppliers become economically distressed or go bankrupt, the Corporation may be required to provide substantial financial support or take other measures to ensure supplies of components or materials, which could increase its costs, affect its liquidity or cause production disruptions, all of which could materially adversely af fect the Corporation’s business, results of operations or financial condition. Moreover, The Corporation’s profitability is affected by significant fluctuations in the prices of the raw materials, parts and components it uses. The Corporation may not be able to pass along price increases in raw materials, parts or components to its c lients. As a result, an increase in the cost of raw materials, parts and components used in the manufacturing of the C orporation’s products could reduce its profitability and have a material adverse effect on its business, results of operations or financial condition. CHANGES IN U.S. TRADE POLICIES OR REGULATIONS Recent actions by the U.S. presidential administration have created increased uncertainty around trade policies, tariffs, and regulations affecting U.S. trade with other countries. Significant shifts , such as the possible renegotiation or termination of the Canada-United States-Mexico Agreement (CUSMA), the imposition of unilateral tariffs or other trade barriers on imports, or retaliatory measures by U.S. trading partners , could affect the availability and cost of materials, resources, services, and the pricing of our products for U.S. customers. These developments may reduce the Corporation’s competitiveness and impact our operating results. The introduction or escalation of tariffs or trade disputes could disrupt the Corporation’s supply chain and hinder sales in affected markets, negatively affecting the Corporation’s operations and profitability. Furthermore, the rise of protectionist and anti -globalization policies in the U.S. and other countries may dampen long-term economic growth in the Corporation’s operating regions, which could in turn adversely affect our business, financial condition, and results of operations.
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Page | 21 DEPENDENCE ON KEY CUSTOMERS The Corporation’s performance is closely tied to car and light vehicle production by its customers in key automotive markets. Given the nature of its business, the Co rporation relies on several major customers. A cancellation of a significant order, the loss of a key customer for any reason, the termination or discontinuation of a customer program without replacement, reduced vehicle production by those customers, a shift in market share away from platforms where the Corporation has substantial content, or the inability to expand its market share with existing customers could all significantly impact the Co rporation’s revenues and profitability. The loss of any one , or particularly several, of its top customers would likely have a material adverse effect on the Corporation’s business and financial condition. LEASE OBLIGATIONS The Company leases many of its manufacturing facilities and certain capital equipment. Failure to meet these lease obligations could result in default, allowing landlords or lessors to take possession of key assets or evict the Company, potentially disrupting operations and harming the Company’s financial condition. Additionally, lease terms may limit the Company’s ability to restructure or downsize, such as by restricting subleasing or relocating facilities, which could lead to significant costs and operational challenges. OTHER RISK FACTORS Additional risks not currently known to the Corporation or that the Corporation currently deems immaterial may also impair the Corporation’s operations. 6. DIVIDENDS AND DISTRIBUTION Until now, the Corporation has never paid any cash dividend on its Common Shares, and it currently intends to retain its future earnings, if any, to fund the development growth of its business. 7. DESCRIPTION OF CAPITAL STRUCTURE The authorized capital of the Corporation consists of an unlimited number of Common Shares, without nominal or par value, an unlimited number of First Preferred Shares, without nominal or par value, and an unlimited number of Second Preferred Shares, without nominal or par value. The holders of Common Shares are entitled to receive notice of and to attend and cast votes at all shareholder meetings of the Corporation and are entitled to one vote per share. The holders of Common Shares are entitled to receive, during each fiscal year, such dividends as may be declared from time to time by the board of directors of the Corporation, subject to the priority of payment of dividends attaching to the series of First Preferred and Second Preferred Shares as noted below. In the event of liquidation or winding up, after payment to the holders of First Preferred Shares and Second Preferred Shares, the holders of Common Shares shall be entitled, on a pro rata basis, to a share of the remaining assets of the Corporation. The holders of First Preferred Shares are not entitled to receive notice of or to attend shareholder meetings, nor are they entitled to vote at such meetings. The First Preferred Shares are issuable in series. The holders of First Preferred Shares are enti tled to receive, during each fiscal year, such dividends as may be declared from time to time by the board of directors of the Corporation in priority to the holders of Second Preferred Shares and Common Shares. In the event of liquidation or winding up, in priority to the holders of Second Preferred Shares and Common Shares, the holders of First Preferred Shares shall be entitled to receive amounts the articles of the Corporation provide must be paid to them in respect of return of capital and dividends remaining unpaid. The holders of Second Preferred Shares are not entitled to receive notice of or to attend shareholder meetings, nor are they entitled to vote at such meetings. The Second Preferred Shares are issuable in series. The holders of Second Preferred Shares are entitled to receive, during each fiscal year, such dividends as may be declared from time to time by the board of directors of the Corporation in priority to the holders of Common Shares, but subject to the priority of payment of dividends attaching to the series of First Preferred Shares as noted above. In the event of liquidation or winding up, in priority to the holders of Common Shares but after payment to the holders of First Preferred Shares, the
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Page | 22 holders of Second Preferred Shares shall be entitled to receive amounts the articles of the Corporation provide must be paid to them in respect of return of capital and dividends remaining unpaid. As of September 15, 2026, 181,487,392 Common Shares of the Corporation were outstanding and fully paid. No series of First Preferred Shares or Second Preferred Shares were issued and outstanding. 8. MARKET FOR SECURITIES TRADING PRICE AND VOLUME The Corporation’s Common Shares are listed on the TSX under the symbol “GRA”. The following table provides the historical monthly trading price ranges and volume for the Common Shares during the most recently completed financial year ended June 30, 2026. Low $ High S Volume July 2025 2.27 3.06 2,424,851 August 2025 2.80 3.32 2,868,756 September 2025 2.59 3.34 2,142,921 October 2025 2.32 3.05 3,617,524 November 2025 2.16 2.44 5,447,911 December 2025 2.12 2.44 1,925,743 January 2026 2.40 2.86 3,391,639 February 2026 2.05 2.53 2,151,597 March 2026 1.67 2.15 8,906,219 April 2026 1.97 2.34 2,710,973 May 2026 1.85 2.30 3,043,027 June 2026 1.52 2.12 3,415,914 PRIOR SALES The following table sets out the number of Common Shares or securities convertible or exchangeable into Common Shares issued or granted by NanoXplore during the financial year ended June 30, 2026, along with the exercise price and date of each respective issuance or grant. Date of issuance Price per Security $ Number of Securities Type of Securities October 10, 2025 2.34 100,000 Stock Options October 30, 2025 2.27 10,720,350 Common Shares December 4, 2025 2.21 1,330,043 Stock Options February 10, 2026 1.93 31,088 Stock Options February 10, 2026 2.18 27,523 Stock Options February 10, 2026 2.43 50,000 Stock Options April 10, 2026 2.19 75,000 Stock Options April 20, 2026 2.22 50,000 Stock Options May 13, 2026 2.09 75,000 Stock Options
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Page | 23 9. DIRECTORS AND EXECUTIVE OFFICERS NAME, OCCUPATION AND SECURITY HOLDING OF DIRECTORS AND EXECUTIVE OFFICERS The following sets forth certain information concerning the directors and the executive officers of the Corporation as of June 30, 2026. Name, place of residence Position with the Corporation and Principal occupation during the last 5 years Director since Joseph G. Peter (1) Bloomfield, Michigan, United States Director and Chairman of the Corporation. Member of Nissan’s Executive Committee and Chairman of the Board of Directors at Nissan’s sales finance companies from 2009 to 2018; Vice President and Chief Financial Officer of the North American & International Operations at General Motors Corporation from 1984 to November 2009. April 2023 Rob Wildeboer (4) Burlington, Ontario, Canada Director of the Corporation. Executive Chairman of Martinrea International Inc.; Advisor to the Governments of Canada and Ontario on a variety of economic, trade, innovation, manufacturing and automotive mandates. January 2019 Arinder S. Mahal(1) (2) Toronto, Ontario, Canada Director of the Corporation. Founder and CEO of Antera Inc. Chief Executive Officer of Synoptim Advisory Corp. November 2018 Catherine Loubier (2) (3) Pacific Palisades, California, United States Director of the Corporation. Québec Delegate General in New York from 2019 to 2021. Deputy Chief of Staff to Québec’s Premier from 2018 to 2019. Advisor to business leaders in various industries including the automobile industry from 2016 to 2018. Senior advisor to the 22nd Prime Minister of Canada from 2013 to 2015. November 2022
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Page | 24 Name, place of residence Position with the Corporation and Principal occupation during the last 5 years Director since Jesse C. H. Stanley (2) (3) Houston, Texas, United States Director of the Corporation. Former President, Operations Americas of Wood plc. General Manager Business Integration, Assurance and Strategy for Shell from 2021 to 2024. Head of Shell North America Pipeline Operations from 2020 to 2021; General Manager Shales – Commercial for Shell from 2019 to 2020. September 2023 Hélène V. Gagnon (2) (3) Montréal, Québec, Canada Director of the Corporation. Chief People and Sustainability Officer at CAE. Chief Sustainability Officer and Senior Vice President, Stakeholder Engagement at CAE Inc. from to 2022 to 2024. Senior Vice President, Public Affairs and Global Communications at CAE Inc. from 2015 to 2022. July 2024 Rocco Marinaccio Mississauga, Ontario, Canada Director of the Corporation. President & Chief Executive Officer of the Corporation. Chief Operations Officer, from 2019 to 2025. Vice President, Operations of Martinrea International Inc. from September 2014 to January 2019. July 2026 Pedro Azevedo Montréal, Québec, Canada Chief Financial Officer of the Corporation. Chief Financial Officer of Tarkett Sports, from April 2015 to July 2022. Nima Moghimian Montréal, Québec, Canada Chief Technology Officer of the Corporation. Vice-President of Technology of the Corporation, 2025 Global Director of R&D from 2019 to 2025 Board Member at PRIMA Quebec, 2024 - Active
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Page | 25 Notes: (1) Member of the Audit Committee. (2) Member of the Corporate Governance and Nominating Committee. (3) Member of the Human Resources and Compensation Committee. (4) Mr. Wildeboer is the Executive Chairman of Martinrea International Inc., which holds 40,810,110 Common Shares of the Corporation. Each Director holds office until the next annual meeting of shareholders or until a successor is duly elected or appointed, unless he/she ceases to hold office pursuant to the CBCA, or his/her office is vacated earlier pursuant to the By-laws of the Corporation. As of the date of this Annual Information Form , the Corporation’s directors and executive officers , as a group, own 865,582 Common Shares or approximately 0.5% of the Corporation’s outstanding Common Shares. CEASE TRADE ORDER, BANKRUPTCY, PENALTIES OR SANCTIONS To the Corporation's knowledge, no director or executive officer of the Corporation is, at the date of this Annual Information Form, or has been, within 10 years before the date of the Annual Information Form, a director, chief executive officer or chief financial officer of any company that (i) was the subject of a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days while that person was acting in that capacity, or (ii) was subject to a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days that was issued after that person cease to act in such capacity but w hich resulted from an event that occurred while that person was acting in such capacity. To the Corporation's knowledge, no director or executive officer of the Corporation or a shareholder holding a sufficient number of securities of the Corporation to affect materially the control of the Corporation is, at the date of this Annual Information Form, or has been, within 10 years before the date of the Annual Information Form, a director or executive officer of any company that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolven cy or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets. To the knowledge of the Corporation, no director or executive officer of the Corporation or a shareholder holding a sufficient number of securities of the Corporation to affect materially the control of the Corporation has, within the 10 years before the date of this Annual Information Form, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the a ssets of the director, executive officer or shareholder. Furthermore, to the knowledge of the Corporation, no director or executive officer of the Corporation or a shareholder holding a sufficient number of securities of the Corporation to affect materially the control of the Corporation has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or has been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision. CONFLICTS OF INTEREST There are potential conflicts of interest to which the directors and officers of the Corporation or its subsidiaries may be subject in connection with the operations of the Corporation or its subsidiaries. Some of the directors and officers are engaged and will continue to be engaged, directly or indirectly, in other businesses and situations may arise where some of the directors and officers will be in direct competition with the Corporation or its subsidiaries. No conflicts of interest currently exist bet ween the Corporation or its subsidiaries and a director or officer of the Corporation or its subsidiaries.
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Page | 26 10. LEGAL PROCEEDINGS AND REGULATORY ACTIONS LEGAL PROCEEDINGS During the year ended June 30, 2026, and as of the date hereof, there have been and are no legal proceedings outstanding, threatened or pending, by or against NanoXplore or to which NanoXplore is a party, nor to NanoXplore’s knowledge are any such legal proceedings contemplated, which could become material to NanoXplore. REGULATORY ACTIONS During the year ended June 30, 2026, and as of the date hereof, there have been no penalties or sanctions imposed against NanoXplore (a) by a court relating to securities legislation or by a securities regulatory authority or (b) by a court or regulatory body that would likely be considered important to a reasonable investor making an investment decision in NanoXplore. NanoXplore has not entered into any settlement agreements with a court relating to securities legislation or with a security’s regulatory authority during the year ended June 30, 2026, and as of the date hereof. 11. INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS To the knowledge of the Corporation, no director, executive officer or principal shareholder of the Corporation, or associate or affiliate of any of the foregoing, has had any material interest, direct or indirect, in any transaction within the preceding t hree years or in any proposed transaction that has materially affected or will materially affect the Corporation or any subsidiary of the Corporation. 12. AUDIT COMMITTEE THE AUDIT COMMITTEE CHARTER A copy of the audit committee of the Corporation (“ Audit Committee”) charter is attached to this Annual Information Form as Schedule "A". COMPOSITION OF THE AUDIT COMMITTEE The Audit Committee is comprised of three members, all of which are independent within the meaning of Regulation 52- 110 respecting Audit Committees (“Regulation 52 -110”) and are financially literate, namely: Joseph G. Peter and Arinder S. Mahal. RELEVANT EDUCATION AND EXPERIENCE The education and experience of each Audit Committee member that is relevant to the performance of his responsibilities are as follows: Mr. Joseph G. Peter was the chief financial officer for Nissan Motor Company from 2009 through June 2018. He was a member of Nissan's Executive Committee and Chairman of the Board of Directors at Nissan’s sales finance companies located in Japan, United States and Mexico. Mr. Peter has spent more than 35 years working in the automotive industry (including 25 years with General Motors). He spent 25 years with General Motors, rising through the company to become the Vice President and Chief Financial Office r of the North American and International Regions. He earned both his MBA and BS in corporate finance from Wayne State University. Mr. Arinder S. Mahal is the founder and CEO of Antera Inc., a technology focused merchant bank based in Toronto. He is also the founder and CEO of Synoptim Advisory Corp., a corporate and business advisory firm. Mr. Mahal is a former managing director and head of technology investment banking of Echelon Wealth Partners Inc. and Dundee Capital Markets (now Eight Capital). He has also held senior executive and board advisor positions at a number of technology companies in Canada and in the United States. Prior to that, he was a senior manager with Deloitte Consulting providing management consulting services in the areas of corporate strategy, mergers and acquisitions, and finance to Canadian and Global telecom and technology companies. Mr. Mahal holds a Bachelor of Engineering degree from the University of Victoria and an MBA from Schulich School of Business, York University. He is also a Chartered Financial Analyst (CFA). The members of the Corporation’s audit committee have provided the information disclosed hereinabove.
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Page | 27 AUDIT COMMITTEE OVERSIGHT At no time since the commencement of the Corporation's most recently completed financial year, a recommendation of the audit committee to nominate or compensate an external auditor was not adopted by the Board of Directors. RELIANCE ON CERTAIN EXEMPTIONS At no time since the commencement of the Corporation’s most recently completed financial year has the Corporation relied on the exemption in Section 2.4 of Regulation 52 -110 (De Minimis Non -Audit Services) or an exemption from Regulation 52-110, in whole or in part, granted under Parts 6 and 8 of Regulation 52 -110, other than the exemption granted under Section 6.1 of Regulation 52 -110, which exempts venture issuers from the requirements of Part 3 (Composition of Audit Committee) and Part 5 (Reporting Obligations). PRE-APPROVAL POLICIES AND PROCEDURES The Audit Committee approves the engagement terms for all audit and non -audit services to be provided by the Corporation's auditors before such services are provided to the Corporation or any of its subsidiaries. EXTERNAL AUDITOR SERVICE FEES The fees charged to the Corporation by its external auditor in each of the last two financial years are as follows: 2026 $ 2025 $ Audit Fees (1) 535,600 564,673 Audit-Related Fees — — Tax Fees (2) 95,980 85,800 Other — — Total 631,580 650,473 (1) Includes billing (or estimate) related to the work done on the audit for the year ended June 30, 2026, and 2025. (2) Such amounts relate to tax compliance services. 13. TRANSFER AGENT AND REGISTRAR TSX Trust Company , at its place of business in Montreal, acts as the transfer agent and registrar regarding the Corporation’s Common Shares. 14. MATERIAL CONTRACTS Other than those contracts entered into in the ordinary course of business, the Corporation has not entered into any material contract since the beginning of the last financial year ended June 30, 202 6 or entered into prior to such date, but which are still in effect and which are required to be filed with any Canadian securities regulatory authorization in accordance with Section 12.2 of Regulation 51-102 respecting Continuous Disclosure Obligations. Please refer to section “General Development of the Business” of this Annual Information Form for the particulars of these material contracts, which are also available in their entirety on the Corporation’s profile at www.sedarplus.com. 15. INTEREST OF EXPERTS PricewaterhouseCoopers LLP, the auditors of the Corporation, prepared an auditors' report on the consolidated financial statements of the Corporation for the years ended June 30, 2026 and 2025. PricewaterhouseCoopers LLP has advised that it is independent with respect to the Corporation within the meaning of the rules of the Code of ethics of chartered professional accountants (Québec).
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Page | 28 16. ADDITIONAL INFORMATION Additional information, including directors' and officers' remuneration and indebtedness, principal holders of the Corporation's securities and securities authorized for issuance under equity compensation plans, as applicable, is contained in the Corporation’s management information circular dated December 4, 2025 filed under the Corporation's issuer profile on SEDAR+ at www.sedarplus.com. Additional financial information is provided in the Corporation's financial statements and management's discussion and analysis for the Corporation's most recently completed financial year. Additional information relating to the Corporation may also be found under the Corporation's issuer profile on SEDAR+ at www.sedarplus.com.
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A | 1 SCHEDULE “A” AUDIT COMMITTEE CHARTER 1. PURPOSE 1.1 The primary functions of the Audit Committee of NanoXplore Inc. (the “Corporation”) are to fulfil its responsibilities in relation to reviewing the integrity of the Corporation’s financial statements, financial disclosures and internal controls over financial reporting; monitoring the system of internal control; monitoring the Corporation’s compliance with legal and regulatory requirements; selecting the external auditors for shareholder approval; and reviewing the qualifications, independence and performance of the external auditors. 2. MEMBERSHIP AND ORGANIZATION 2.1 Composition - The Audit Committee shall consist of not less than three independent members of the Board. At the invitation of the Audit Committee, members of the Corporation’s management and others may attend Audit Committee meetings as the Audit Committee considers necessary or desirable. 2.2 Appointment and Removal of Audit Committee Members - Each member of the Audit Committee shall be appointed by the Board on an annual basis and shall serve at the pleasure of the Board, or until the earlier of (a) the close of the next annual meeting of shareholders of the Corporation at which the member’s term of office expires, (b) the death of the member or (c) the resignation, disqualification or removal of the member from the Audit Committee or from the Board. The Board may fill a vacancy in the membership of the Audit Committee. 2.3 Chair - At the time of the annual appointment of the members of the Audit Committee, the Board shall appoint a Chair of the Audit Committee. The Chair shall be a member of the Audit Committee, preside over all Audit Committee meetings, coordinate the Audit Committee’s compliance with this mandate, work with management to develop the Audit Committee’s annual work -plan and provide reports of the Audit Committee to the Board. The Chair may vote on any matter requiring a vote and shall provide a second vote in the case of a tie vote. 2.4 Independence - Each member of the Audit Committee shall be “independent” (as such term is used in National Instrument 52-110 - Audit Committees (“NI 52-110”). 2.5 Financial Literacy - Members of the Audit Committee shall be financially literate or agree to become financially literate within a reasonable period of time following the member’s appointment. An individual is financially literate if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation’s financial statements. 3. MEETINGS 3.1 Meetings - The members of the Audit Committee shall hold meetings as are required to carry out this mandate, and in any case no less than four meetings annually. The external auditors are entitled to attend and be heard at each Audit Committee meeting. The Chair, any member of the Audit Committee, the external auditors, the Chairman of the Board or the President and CEO may call a meeting of the Audit Committee. The Chair shall chair all Audit Committee meetings that he or she attends, and in the absence of the Cha ir, the members of the Audit Committee present may appoint a Chair from their number for a meeting. 3.2 Secretary and Minutes - The Secretary, his or her designate or any other person the Audit Committee requests, shall act as secretary at Audit Committee meetings. Minutes of Audit Committee meetings shall be recorded and maintained by the Corporate Secretary and subsequently presented to the Audit Committee for approval. 3.3 Quorum - A majority of the members of the Audit Committee shall constitute a quorum. If a quorum cannot be obtained for an Audit Committee meeting, members of the Board who would qualify as members of the Audit Committee may, at the request of the Chair or the C hairman of the Board, serve as members of the Audit Committee for that meeting. 3.4 Access to Management and Outside Advisors - The Audit Committee shall have unrestricted access to management and employees of the Corporation, and, from time to time may hold meetings with the external auditor, the CFO or the President and CEO. The Audit Committee shall have the authority to retain and terminate external legal
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A | 2 counsel, consultants or other advisors to assist it in fulfilling its responsibilities and to set and pay the respective compensation for these advisors without consulting or obtaining the approval of the Board or any officer of the Corporation. The Corporation shall provide appropriate funding, as determined by the Audit Committee, for the services of these advisors. 3.5 Meetings Without Management - The Audit Committee shall hold unscheduled or regularly scheduled meetings, or portions of regularly scheduled meetings, at which management is not present. 4. FUNCTIONS AND RESPONSIBILITIES The Audit Committee shall have the functions and responsibilities set out below as well as any other functions that are specifically delegated to the Audit Committee by the Board. In addition to these functions and responsibilities, the Audit Committee shall perform the duties required of an audit committee by applicable corporate securities laws, the binding requirements of the stock exchanges on which the securities of the Corporation are listed, and all other applicable laws. 4.1 Financial Reports (a) General - The Audit Committee is responsible for reviewing the integrity of the Corporation’s financial statements and financial disclosures. Management is responsible for the preparation, presentation and integrity of the Corporation’s financial statements and fi nancial disclosures and for the appropriateness of the accounting principles and the reporting policies used by the Corporation. The external auditors are responsible for auditing the Corporation’s annual consolidated financial statements and, if requested by the Corporation, for reviewing the Corporation’s unaudited interim financial statements. (b) Review of Annual Financial Reports - The Audit Committee shall review the annual consolidated audited financial statements of the Corporation, the external auditors’ report thereon and the related management’s discussion and analysis of the Corporation’s financial condition and results of operation to determine whether they present fairly, in all material respects in accordance with International Financial Reporting Standards (“IFRS”) in which the financial statements of the Corporation are prepared from time to time, the financial conditio n, results of operations and cash flows of the Corporation. After completing its review, if advisable, the Audit Committee shall approve and recommend for Board approval the annual financial statements and the related MD&A. (c) Review of Interim Financial Reports - The Audit Committee shall review the interim consolidated financial statements of the Corporation, the external auditors review report thereon, if applicable, and the related MD&A to determine whether they present fairly, in all material respects in acc ordance with IFRS, the financial condition, results of operations and cash flows of the Corporation. After completing its review, if advisable, the Audit Committee shall, if so authorized by the Board, approve the interim financial statements and the related MD&A, or if not authorized by the Board, then approve and recommend for Board approval. (d) Review Considerations - In conducting its review of the annual financial statements or the interim financial statements, the Audit Committee shall: (i) meet with management and the external auditors to discuss the financial statements and MD&A; (ii) review the disclosures in the financial statements; (iii) review the audit report or review report prepared by the external auditors; (iv) discuss with management, the external auditors and legal counsel, as requested, any litigation claim or other contingency that could have a material effect on the financial statements; (v) review critical accounting and other significant estimates and judgments underlying the financial statements as presented by management; (vi) review any material effects of regulatory accounting initiatives or off -balance sheet structures on the financial statements as presented by management; (vii) review any material changes in accounting policies and any significant changes in accounting practices and their impact on the financial statements as presented by management;
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A | 3 (viii) review management’s report on the effectiveness of internal controls over financial reporting; (ix) review results of the Corporation’s whistleblowing program; and (x) review any other matters, related to the financial statements, that are brought forward by the external auditors, management or which are required to be communicated to the Audit Committee under accounting policies, auditing standards or applicable law. 4.2 Approval of Other Financial Disclosures - The Audit Committee shall review and, if advisable, approve and recommend for Board approval financial disclosure in a prospectus or other securities offering document of the Corporation, press releases disclosing financial results of the Corporation and any other material financial disclosure, including in Management Information Circulars and Annual Information Forms. 4.3 External Auditors (a) General -The Audit Committee shall be responsible for oversight of the work of the external auditors in auditing and reviewing the Corporation’s financial statements and internal controls over financial reporting. (b) Appointment and Compensation - The Audit Committee shall review and, if advisable, select and recommend (i) for shareholder approval, the appointment of the external auditors and (ii) for shareholder or Board approval, as applicable, the compensation of the external auditors. (c) Annual Review Report - At least annually, the Audit Committee shall obtain and review a report by the external auditors describing: (i) their internal quality -control procedures and (ii) any material issues raised by their most recent internal quality-control review, peer review or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the external auditors and any steps taken to deal with any of these issues. (d) Audit Plan - At least annually, the Audit Committee shall review a summary of the external auditors’ annual audit plan. The Audit Committee shall consider and review with the external auditors any material changes to the scope of the plan. (e) Quarterly Review Report - If the external auditors review the Corporation’s unaudited interim financial statements, then the Audit Committee shall review a quarterly review report prepared by the external auditors in respect of each of the interim financial statements of the Corporation. (f) Independence of External Auditors - At least annually, and before the external auditors issue their report on the annual financial statements, the Audit Committee shall obtain from the external auditors a formal written statement describing all relationships between the external auditors a nd the Corporation, discuss with the external auditors any disclosed relationships or services that may affect the objectivity and independence of the external auditors, and obtain written confirmation from the external auditors that they are objective and independent within the meaning of the Rules of Professional Conduct/Code of Ethics adopted by the provincial institute or order of chartered accountants to which it belongs. (g) Evaluation and Rotation of Lead Partner - At least annually, the Audit Committee shall review the qualifications and performance of the lead partners of the external auditors. The Audit Committee shall obtain a report from the external auditors annually verifying that the lead partner of the external auditors has served in that capacity for no more than seven fiscal years of the Corporation and that the engagement team collectively possesses the experience and competence to perform an appropriate audit. (h) Pre-Approval of Non -Audit Services - The Audit Committee shall pre -approve any retainer of the external auditors for any non -audit service to the Corporation in accordance with applicable law and Board approved policies and procedures. The Audit Committee may delegate pre -approval authority to a member of the Audit Committee. The decisions of any member of the Audit Committee to whom this authority has been delegated must be presented to the full Audit Committee at its next scheduled Audit Committee meeting. (i) Hiring Practices - The Audit Committee shall review and approve guidelines regarding the hiring of employees or former employees of the external auditors.
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A | 4 4.4 Internal Controls (a) General - The Audit Committee shall monitor the system of internal control. (b) Establishment, Review and Approval - The Audit Committee shall require management to implement and maintain appropriate systems of internal control in accordance with applicable laws, regulations and guidance, including internal control over financial reporting and disclosure and to review, evaluate and approve these procedures. At least annually, the Audit Committee shall consider and review with management and the external auditors: (i ) the effectiveness of, or weaknesses or deficiencies in: the design or operation of the Corporation’s internal controls (including computerized information system controls and security); the overall control environment for managing business risks; and acc ounting, financial and disclosure controls (including, without limitation, controls over financial reporting), non -financial controls, and legal and regulatory controls and the impact of any identified weaknesses in internal controls on management’s conclu sions; (ii) any significant changes in internal control over financial reporting that are disclosed, or considered for disclosure, including those in the Corporation’s periodic regulatory filings; (iii) any material issues raised by any inquiry or investigation by the Corporation’s regulators; (iv) any related significant issues and recommendations of the external auditors together with management’s responses thereto, including the timetable for implementation of recommendations to correct weaknesses in int ernal controls over financial reporting and disclosure controls. 4.5 Whistleblowing Procedures - The Audit Committee shall review and approve the establishment by management of procedures for the receipt, retention and treatment of complaints received by the Corporation from employees or others, regarding accounting, internal accounting controls, or auditing matters. 4.6 Succession Planning - In consultation with the Board, the Audit Committee shall review, if applicable, succession plans for the CFO and Controller of the Corporation. The Audit Committee shall review candidates for the position of CFO of the Corporation and make recommendations to the Board with respect to the appointment of a CFO. 4.7 Adverse Investments and Transactions - The Audit Committee shall review any investments and transactions that could adversely affect the well-being of the Corporation. 4.8 Audit Committee Disclosure - The Audit Committee shall review and approve any audit committee disclosures required by securities regulators in the Corporation’s disclosure documents. 4.9 Assessment of Regulatory Compliance - The Audit Committee shall review management’s assessment of compliance with laws and regulations as they pertain to responsibilities under this mandate, report its findings to the Board and recommend changes it considers appropriate. 4.10 Delegation - The Audit Committee may designate a sub -committee to review any matter within this mandate as the Audit Committee deems appropriate. 5. REPORTING TO THE BOARD 5.1 The Chair shall report to the Board, as required by applicable law or as deemed necessary by the Audit Committee or as requested by the Board, on matters arising at Audit Committee meetings and, where applicable, shall present the Audit Committee’s recommendation to the Board for its approval.
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