Dragonfly Provides Update on Business Combination with Black Swan Graphene

Vancouver, British Columbia--(Newsfile Corp. - April 26, 2022) - Dragonfly Capital Corp. (TSXV: DRC.H) ("Dragonfly" or the "Company") provides, further to its news releases dated December 16, 2021, January 27, 2022 and March 14, 2022, the following update to supplement the disclosures related to the Company's previously announced Qualifying Transaction (the "Transaction"), as defined under TSX Venture Exchange ("TSXV") Policy 2.4 - Capital Pool Companies ("Policy 2.4"), with Black Swan Graphene Inc. ("Black Swan").

Qualifying Transaction Update

The Company and Black Swan, a private Ontario company, continue to work towards the closing of the Transaction (the "Closing") and, in connection therewith, Dragonfly, Black Swan and the shareholders of Black Swan have entered into an amendment agreement dated April 21, 2022 (the "Amendment Agreement") to the share exchange agreement between the parties dated January 17, 2022. Pursuant to the terms of the Amendment Agreement, the parties have agreed to extend the date by which Closing must occur to June 17, 2022 and revised the number of common shares (each, a "Consideration Share") to be issued to the Black Swan shareholders to 15.2 Consideration Shares for each one common share of Black Swan held by each Black Swan shareholder immediately prior to the Closing at a deemed price equal to $0.15 per Consideration Share, such that an aggregate of 210,230,349 Consideration Shares are expected to be issued. Accordingly, it is anticipated that at Closing, the resulting issuer of the Transaction (the "Resulting Issuer") will have 285,374,537 common shares (each a "Common Share") issued and outstanding (assuming no convertible securities of Dragonfly or Black Swan are exercised) of which approximately 6.22% Common Shares of will be held by the current shareholders of the Company, 73.67% will be held by the Black Swan Shareholders, and 16.35% will be held by the subscribers under the previously closed subscription receipt financing (the "Subscription Receipt Financing").

The number of Common Shares and resultant percentages described above are inclusive of the issuance of a finder's fee of 10,727,000 Common Shares (the "Finder's Fee") to be issued on Closing to an arm's length finder (the "Finder") pursuant to the terms of a finder's fee agreement (the "Finder's Fee Agreement") entered into between Black Swan and the Finder. The Finder's Fee was calculated based on the maximum number of Shares permitted pursuant to TSXV Policy 5.1 - Loans, Loan Bonuses, Finder's Fees and Commissions, issuable to the Finder at a deemed price of $0.15 per Share in consideration for the Finder's services in facilitating the identification, negotiation and implementation of the business combination of Dragonfly and Black Swan. The Finder's Fee Agreement is subject to the approval of the TSXV.

Directors, Officers and Insiders of the Resulting Issuer

Upon Closing, it is expected that each of Anthony Kent Deuters, Eric Boehnke and Gregory Galanis will resign as directors of the Company, and Mr. Deuters will resign as the President and Chief Executive Officer ("CEO") of the Company and Jennie Choboter will resign as the Chief Financial Officer ("CFO") of the Company. Following such resignations, it is expected that each of Simon Marcotte, Peter Damouni, Harry Swan (Chairman), Michael Edwards, David Deak and Roy McDowall are expected to be appointed as directors of the Resulting Issuer. Further, Mr. Marcotte is expected to be appointed as the CEO, Greg Duras is expected to be appointed as the CFO and Corporate Secretary, Peter Damouni is expected to be appointed as the Executive Director, and Michael Edwards is expected to be appointed as Chief Operating Officer of the Resulting Issuer. For a brief description of the proposed directors and officers of the Resulting Issuer, please see the Company's news release dated December 16, 2021 available on SEDAR.

For more information on the Transaction, the Subscription Receipt Financing, and Black Swan, please see the news releases of Dragonfly dated December 16, 2021, January 27, 2022 and March 14, 2022 filed under its profile on SEDAR.

About Dragonfly Capital Corp.

Dragonfly Capital Corp. is a Capital Pool Company as defined by the policies of the TSXV. The Company's principal business activity is to identify and evaluate opportunities for acquisition of assets or business. The Company is headquartered in Vancouver, British Columbia.

About Black Swan Graphene Inc.

Black Swan Graphene Inc. is a Canadian private company focusing on the large-scale production and commercialization of patented high-performance and low-cost graphene products aimed at several industrial sectors, including concrete, polymers, Li-ion batteries, and others, which are expected to require large volumes of graphene and, in turn, require large volumes of graphite. Black Swan aims to leverage the low cost and green hydroelectricity of the province of Quebec as well as the proximity of the eventual production sites of Mason Graphite Inc. in order to establish a fully integrated supply chain, reduce overall costs, and accelerate the deployment of graphene usage.

Additional Information

A comprehensive press release with further particulars relating to the Transaction, including further particulars of the Resulting Issuer, will follow in accordance with the policies of the TSXV. In addition, a summary of Black Swan' financial information will be included in a subsequent press release.

All information contained in this press release with respect to the Company and Black Swan was supplied, for inclusion herein, by the respective Parties and each Party and its directors and officers have relied on the other Party for any information concerning the other Party.

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

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

For more information please contact:

Dragonfly Capital Corp.

Eric Boehnke Director(604) 307-4274

Black Swan Graphene Inc.

Paul HardyVice President, Corporate Development[email protected]; (416) 844-7365

Disclaimer for Forward-Looking Information

Certain statements in this press release are forward-looking statements, which reflect the expectations of management regarding the Company's completion of the Transaction and related transactions. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future, including, but not limited to, the Company completing the Transaction and the entry into of the Finder's Fee Agreement and, in connection therewith, the approvals of the Transaction and the Finder's Fee Agreement by the TSXV. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including risks related to factors beyond the control of the Company. These risks include the following: the requisite corporate approvals of the directors and shareholders of Dragonfly or Black Swan, as applicable, may not be obtained; the TSXV may not approve the Transaction or the Finder's Fee Agreement, as applicable; and other risks that are customary to transactions of this nature. The novel strain of coronavirus, COVID-19, also poses new risks that are currently indescribable and immeasurable. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/121779