6-K
Graphex Group Ltd (GRFXF)
UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
WASHINGTON,D.C. 20549
FORM6-K
REPORTOF FOREIGN PRIVATE ISSUER
PURSUANTTO RULE 13a-16 OR 15d-16
UNDERTHE SECURITIES EXCHANGE ACT OF 1934
For the month of September 2022
CommissionFile Number 001-41471
GraphexGroup Limited
(Translation of registrant’s name into English)
11/FCOFCO Tower 262 Gloucester Road Causeway Bay
HongKong
Tel:+ 852 2559 9438
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
☒ Form 20-F ☐ Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
GraphexGroup Limited.
Form 6-K
TABLE OF CONTENTS
| Item | Page |
|---|---|
| Other Information | 1 |
| Signatures | 2 |
| Exhibit Index | 3 |
Entryinto Material Definitive Agreement
Graphex Group Limited (NYSE American: GRFX | HKSE: 6128).
On September 20, 2022, Graphex Group Limited (the “Company”, “Graphex”, or “we”) entered into a cooperation agreement (the “Cooperation Agreement”) for construction and investment of graphite deep processing projects (the “Project”) with the People’s Government of Mashan District, Jixi City (the “Jixi Government”) to develop graphite deep processing and production facilities located in the Jixi (Mashan) Graphite Industrial Park in the Peoples Republic of China. The development of the Project will be in several phases.
Phase 1 of the Project will establish a facility with an annual capacity of approximately 20,000 metric tons of high-purity spherical graphite, and provides an investment period that is 24 months from the date that Graphex enters the Project industrial park.
Phase 2 provides for the establishment of an additional facility with an annual capacity of approximately 10,000 metric tons of high-purity spherical graphite and 10,000 metric tons of battery anode material on terms that will be mutually determined.
Under the Cooperation Agreement, the Jixi Government will:
(i) assist the Company in site selection, preliminary approval, policy support and to provide other services to facilitate the investment in the facilities and project;
(ii) provide the Company with factory premises consisting of 5 general workshops of up to 25,000 square meters, one office building and one living area in the Jixi (Mashan) Graphite Industrial Park (collectively referred to as “Factory Premises”);
(iii) provide the factory premises to the Company at specified rents, including waiver of rent for the first two years;
(iv) provide the Company with the right to purchase the factory premises at the Jixi Government’s costs and to offset the purchase price with the amount of paid rents; and
(v) provide the Company with green electricity sources including wind and/or solar generated electricity under conditions where such generation and use are favorable.
Under the Cooperation Agreement, the Company will:
(i) take all material actions regarding the preparatory work for the preliminary investment and construction of the Project;
(ii) establish a wholly foreign owned enterprise (“WFOE”) in Jixi City in the People’s Republic of China with independent legal status to perform the Company’s obligations regarding the Project; and
(iv) take all material actions regarding the necessary approval application procedures required by the Project at the Company’s cost and expense.
The scale of the investment and construction of the Project will be subject to the details of the final approved feasibility study report of the Project. In the event the Project finally cannot obtain the necessary approval, the Cooperation Agreement shall terminate automatically.
The Company provided a notice (the “HK Notice”) regarding the Cooperation Agreement and the Project under the rules of The Stock Exchange of Hong Kong Limited. That notice is furnished as exhibit 99.1
The foregoing descriptions of the Cooperation Agreement and the HK Notice is not complete and are qualified in their entirety by reference to the full text of such agreements, submitted as Exhibit 99.1 and 10.1 to this Report on Form Report on Form 6-K and incorporated herein by reference.
The Company also provided a U.S. press release regarding the Cooperation Agreement. Such press release is furnished as Exhibit 99.2 to this Report.
The information in this Form 6-K (including the exhibits) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| GRAPHEX GROUP<br> LIMTED | |
|---|---|
| By: | /s/ Andross Chan |
| Andross Chan | |
| Chief Executive Officer |
Date: September 21, 2022
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EXHIBITINDEX
* Certain information of this exhibit has been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted information will be furnished to the SEC upon request.
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Exhibit 10.1
[EnglishTranslation]
NOTE: certain identified information has been excluded from the exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.
CooperationAgreement for
Constructionand Investment of Graphite Deep Processing Project
September 2022
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CooperationAgreement
forconstruction and investment of graphite deep processing projects
Party A: People’s Government of Mashan District, Jixi City
Party B: Graphex Group Limited
The People’s Government of Mashan District of Jixi City (hereinafter referred to as “Party A”) and Graphex Group Limited. (hereinafter referred to as “Party B”) conducted friendly discussions on the investment of graphite deep processing projects. In order to give full play to the advantages of both parties A and B, scientifically and rationally develop resources as soon as possible, turn resource advantages into economic advantages, and establish a good cooperative relationship, this cooperation agreement is hereby signed. The agreement reads as follows:
1. Content related to cooperation
According to the development of Party A and the development strategy of Party B, in order to give full play to their respective advantages, in line with the principle of “equality and mutual benefit, complementary advantages, mutual support, win-win cooperation”, under the premise of common promotion and common development, after friendly discussions, it was decided to establish a cooperative partnership, and Party B will invest in the construction of graphite deep processing projects in Jixi (Mashan) Graphite Industrial Park to promote the rapid development of the regional graphite new material industry.
2. Basic information of the project
1. Project name: graphite deep processing project
2. Project Location: Jixi (Mashan) Graphite Industrial Park
3. Project scale: The phase 1 establishment has an annual capacity of 20,000 tons of high-purity spherical graphite, and the investment period is 24 months from the date when Party B enters Party A’s industrial park. The phase 2 establishment shall have an annual capacity of 10,000 tons of high-purity spherical graphite, 10,000 tons of pitch coated anode materials. This agreement covers only the construction cooperation of the phase 1 establishment. The phase 2 establishment requires the selection of another suitable location and the conditions are to be discussed separately.
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4. Total investment of the project: The estimated investment amount is RMB 200 million (injected in the form of foreign capital), and the funds required for the construction of the project are to be provided by Party B.
3. Rights and Obligations
(1)Party A’s rights and obligations
1. Party A assists Party B to perform its due diligence review in site selection, preliminary approval, policy support, project construction and to resolve difficulties encountered in the process of production and operation of the project, and provides a good investment environment for Party B.
2. Party A provides Party B with 5 general factory buildings of approximately 25,000 square meters in total, an office building, and a living area (collectively referred to as “Plant”, subject to the design requirements of the Plant provided by Party B and the actual construction area of the Plant), and at the same time, in accordance with the “Jixi Development Zone Standardized Factory Management Measures (Trial)” (Ji Jingkai [2021] No. 42) document corresponding policy implementation.
2.1. The location of the Plant shall be confirmed in writing by both parties A and B, and all the factory buildings must be delivered at the same time when delivering the Plant, and the delivery shall be subject to the conditions agreed in article 2 above, and Party B shall sign a written receipt document.
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3. When leasing and selling the general factory building, Party A adopts three implementation mechanisms: First, the lease signing mechanism; second is the penalty mechanism for breach of contract; third is the lease exit mechanism.
3.1 When signing the lease agreement, Party B shall pay a performance deposit to the Industrial Park Office, which is the managing entity of the Plant, at a rate of RMB [***REDACTED information] per square meter of construction floor area, that is, RMB [****REDACTED information] million in lump sum. After Party B is officially put into production, the Industrial Park Office will refund a portion of the performance deposit at a rate of RMB [***REDACTED information] per square meter, that is, RMB [***REDACTED information] million in aggregate, to Party B. After the expiry of the lease period, if Party B does not renew the lease, the remaining performance deposit of RMB [***REDACTED information] per square meter, or RMB [***REDACTED information], will be refunded to Party B.
3.2 Party B adopts the method of lease purchase.
3.2.1 Leasing method: the rental base rate is RMB [***REDACTED information] per square meter per month (calculated in terms of construction floor area). If the height of the factory building is 8 meters - 12 meters (including 8 meters), the factory building is considered as two levels, and if the height of the factory building is 12 meters - 16 meters (including 12 meters), the factory building is considered as three levels. The first level is charged at RMB [***REDACTED information] per square meter per month, the second level is charged RMB [***REDACTED information] per square meter per month, and the third level or above (including the third level) is charged at RMB [***REDACTED information] per square meter per month, and the rent is paid annually. The rental payment time is agreed to be within 10 days from the date of signing the lease agreement for the Plant by both parties A and B, and the payment is deferred according to this time every year thereafter.
During the lease period, all high-tech enterprises identified by the relevant departments of the state, province and city, with a registered capital of more than RMB 10 million and a fixed asset investment of RMB 10 million, rewarded with the national and provincial famous brand product awards, and upon approval by the managing entity of the Plant, the rental base rate can be lowered to RMB [***REDACTED information] per square meter per month.
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3.2.2 Sale and Purchase method: Benchmarked on the cost price, the sale shall be carried out in accordance with the procedures for the disposal of state-owned assets, and the tenant shall be given priority under the same conditions. The price shall comprise of the investment in building the Plant, land transfer fees, and above-ground attachment compensation funds (the sale price of the factory building is tentatively set at RMB [***REDACTED information] per square meter, and the sale price of dormitories and office buildings is tentatively set at RMB [***REDACTED information] square meter, subject to the financial review). The purchase price is calculated according to financial settlement of the building cost with an annual downward adjustment of [***REDACTED information]% (depreciation), and the actual calculation method shall comply with the national policy at the time of purchase. After the purchase price is fully paid, Party A shall coordinate with Party B to complete the property rights registration procedures. The red line map of the land occupied by the plant is set out in Annex I to this contract; The plant buildings (including all buildings constructed on the plant site) are set out in Annex II to this contract.
3.2.3 Purchase by lease: Party B must repurchase the general plant within 3-5 years of renting. Party A waives Party B from paying rent of the Plant for the first 2 years. If Party B decides not to purchase the Plant between the 3rd and 5th years of renting, Party B shall pay the rent in accordance with the Clause 3.2.1 of this Agreement. The rent paid by the Party B can be used to offset against the purchase price of the Plant.
3.3 Both parties have the right to hold the party in breach liable for breach of contract and liability for compensation.
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For the actual losses caused to the observant party, the amount of compensation for enforcement of the breach of contract shall be taken from the conclusion data of the actual assessment report of the third-party assessment agency. Events of default include:
(1) Party A fails to deliver the Plant for Party B to enter the site according to the agreed time, resulting in Party B failing to produce as planned.
(2) The Plant delivered by Party A does not meet the requirements specified by Party B, resulting in Party B’s failure to produce normally.
(3) Party A failed to coordinate and help Party B complete the power supply, environmental protection, and fire control acceptance plant, resulting in Party B’s failure to produce as planned.
(4) Party A fails to coordinate the power supply department to provide sufficient power for Party B’s production according to the requirements specified by Party B, resulting in Party B’s failure to produce.
(5) Party A failed to coordinate the sewage treatment plant to provide the sewage treatment amount specified by Party B, resulting in Party B’s failure to produce normally.
(6) Party B fails to put into production within the agreed time, resulting in Party A’s Plant being idle or not being used effectively.
3.4 Party A has the right to require Party B to put into production within 18 months of the delivery of the Plant, otherwise it will not enjoy preferential policies. Party A has the right to recover the Plant if Party B fails to fully invest in the project within 36 months as stipulated in this Agreement. When such event occurs, the rent paid for the Plant by Party B will not be refunded; and if the plant has been sold to Party B, the Plant will be recovered at depreciation according to the actual time of occupancy and the original price.
4. Under the premise of meeting the policy requirements, Party A coordinates with the municipal investment department to provide preferential policy support for Party B’s investment projects in accordance with the corresponding policy provisions of the “Jixi City Investment Promotion Preferential Policies (Trial)” (Jifa [2019] No. 4) document.
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5. Party A undertakes not to affect the terms of this Agreement due to staff adjustment or job change.
6. Party A undertakes to arrange for Party B to give priority to the use of green power resources such as wind energy and solar energy when feasible.
(2)Rights and obligations of Party B
1. The investment made by Party B must comply with relevant national laws and regulations and relevant policies.
2. Party B is responsible for making preparations for the preliminary investment and construction of the project, execute the preliminary work such as planning and demonstration of the project at its best endeavor. Party B will deliver the design standards and design schemes of the Plant to Party A. For any construction demand exceeds the construction standard specified, Party B can entrust Party A to build at its cost or build by itself. Party B shall ensure that construction starts as planned and the project investment is completed as soon as practicable.
3. Party B shall register a wholly foreign owned enterprise with independent legal entity in Jixi City, and its tax registration shall be with Mashan District of Jixi City and it shall pay taxes according to law, and carry out the construction and business activities of the project in due course.
4. Party B is responsible for obtaining the necessary approval procedures involved in the project development and construction process, and bears the relevant costs.
4. Other terms
1. After the signing of this agreement, if this agreement cannot be performed due to national policies or force majeure, this agreement shall be terminated by itself, and both parties shall not be liable for breach of contract. If Party B has paid Party A any rental amount, Party A shall immediately refund to Party B any rent for the unused term.
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2. After the signing of this agreement, the project shall be subject to the investment and construction scale and content of the final approval feasibility study report, but when the investment amount is less than [***REDACTED information]% of the estimated amount, Party B shall not enjoy the investment incentive policy of Article 8, Paragraph 4 of Chapter 4 of the Document “Measures for the Management of Standardized Factories in Jixi Development Zone (Trial)” (Ji Jingkai [2021] No. 42) document.
If the project is ultimately not approved, this agreement shall terminate on its own, and neither party shall be liable for breach of contract. If Party B has paid Party A any rent amount, Party A shall return to Party B in full.
3. During Party B’s renting of the Plant, if there is any special process or production line installation that requires modification to the Plant, Party B shall inform Party A in advance and the two parties shall jointly negotiate and resolve the matter.
4. Party A’s current phase I industrial sewage treatment plant (daily treatment capacity of [***REDACTED information] tons) is running well, and the pH value of the enterprise discharge sewage is greater than 3.0. The second phase of the industrial sewage treatment plant expansion project (daily treatment capacity of [***REDACTED information] tons) is underway. After completion, it shall process sewage of pH value greater than 1.5. Party A shall coordinate the sewage treatment plant to ensure that the wastewater generated by Party B’s actual production capacity (about [***REDACTED information] tons/year) is in place, and the sewage treatment fee is implemented with reference to Annex III.
The managing entity of the Industrial Park strives to promote the optimal management of sewage treatment plants, reduce treatment costs, and ensure that sewage treatment plants are reasonably compliant with charges. If the charges raise by more than [***REDACTED information]% according to the current standards, Party A will initiate audit and supervision procedures to supervise the price of sewage treatment plants, and determine the price adjustment of sewage treatment fees in accordance with statutory procedures.
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5. If Party B submits an application for project extension for special reasons, it shall be extended after Party A agrees.
6. Before the handover of the Plant, the relevant government department of Mashan District shall sign a lease agreement for the formal use of the Plant with Party B, and the basic terms of the lease contract shall be consistent with the terms of this agreement to stipulate the rights and obligations of both parties.
7. After the signing of this agreement, the time for Party B to enter the industrial park shall be separately stipulated.
8. Matters not exhausted by both parties shall be resolved through further discussion.
5. This Agreement shall be made in quadruple, and each of Party A and Party B shall hold two copies. This Agreement shall become effective on the date of execution.
| Party<br> A (signature and stamp) | Party<br> B (signature and stamp) |
|---|---|
| Legal<br> representative (signature):<br><br> <br><br><br> <br>(or<br> authorized representative) | Legal<br> representative (signature):<br><br> <br><br><br> <br>(or<br> authorized representative). |
| Year<br> Month<br> Day | Year<br><br> Month<br> Day |
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Exhibit99.1
HongKong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement,make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arisingfrom or in reliance upon the whole or any part of the contents of this announcement
Thisannouncement appears for information purposes only and does not constitute any invitation to subscribe for any securities in Hong Kong,the United States or elsewhere, nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied onin connection with, any contract or invitation to subscribe for securities, and is provided for information only. The distribution ofthis announcement may be restricted by law in certain jurisdictions and persons into whose possession the information referred to hereincomes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute aviolation of the laws of any such jurisdictions. Securities referred to in this announcement have not been issued, registered in accordancewith any securities laws and regulations or allowed to be offered to public or to circulate in Hong Kong, the United States, or elsewhere.No representation is made that any such securities will be issued or so registered or allowed to be offered to the public or circulatedin Hong Kong, the United States or elsewhere. Securities may not be offered or sold in the United States absent registration under theU.S. Securities Act of 1933, as amended (the “Securities Act”), or an exemption from registration under the Securities Act.Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from theissuer and that will contain detailed information about the issuer and its management, as well as financial statements.
GRAPHEX GROUP LIMITED
烯 石 電 動 汽 車 新 材 料 控 股 有 限 公 司
(Incorporatedin the Cayman Islands with limited liability)
(Stockcode: 6128)
INSIDEINFORMATION IN RELATION TO
THECOOPERATION AGREEMENT WITH JIXI MASHAN GOVERNMENT
The announcement is made by the Company pursuant to Rule 13.09(2) of the Listing Rules and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the SFO.
Reference is made to the Announcement in relation to the MOU entered into by the Company with the Jixi Mashan Government.
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THE PROJECT
The Board is pleased to announce that on 20 September 2022 (after trading hours of the Stock Exchange), the Company entered into the Cooperation Agreement with the Jixi Mashan Government relating to the cooperation in connection with the Company’s intended strategic investment for setting up graphite deep processing and production facilities located in the Jixi (Mashan) Graphite Industrial Park with an intended annual output of 30,000 metric tons of high-purity spherical graphite and 10,000 metric tons of battery anode materials to promote the rapid development of the regional graphite new material industry (the “Project”).
The Company intends to carry out the Project in two phases, with the first phase of the Project for the setting up graphite deep processing and production facilities with an annual output capacity of 20,000 metric tons of high-purity spherical graphite by the second quarter of 2023 and the second phase of the Project for the setting up graphite deep processing and production facilities with an annual output capacity of 10,000 metric tons of high-purity spherical graphite and 10,000 metric tons of battery anode materials by 2024.
It is estimated that the Company’s total investment in the first phase of the Project will be not less than RMB200 million. The Company intends to fund the first phase of the Project by the Group’s internal resources and/or bank borrowings and/or future fund-raising exercise.
THE COOPERATION AGREEMENT
The principal terms of the Cooperation Agreement are set out below:
| Date: | 20<br> September 2022 (after trading hours of the Stock<br> Exchange) |
|---|---|
| Parties: | (1)<br> the Company |
| (2)<br> the Jixi Mashan Government |
To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, the Jixi Mashan Government is Independent Third Party.
Scope of the cooperation
The Cooperation Agreement only covers the first phase of the Project. Under the Cooperation Agreement, the Jixi Mashan Government will cooperate with the Company and provide assistance to the Company in carrying out the Project within the Jixi (Mashan) Graphite Industrial Park, including the provision of suitable site, preferential terms of rental and policy supports for the Project.
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| --- | | (A) | Pursuant<br> to the Cooperation Agreement, the Jixi Mashan Government shall | | --- | --- | | (i) | assist<br> the Company in site selection, preliminary approval, policy support and to provide a good<br> investment environment in the implementation of the Project; | | --- | --- | | (ii) | provide<br> the Company with factory premises consisting of 5 general workshops of up to 25,000 square<br> meters, one office building and one living area in the Jixi (Mashan) Graphite Industrial<br> Park (collectively referred to as “Factory Premises”); | | --- | --- | | (iii) | provide<br> the Factory Premises to the Company at the indicative rent of between RMB4 to RMB6 per square<br> meter per month with the rents for the first two years waived and the rent may be reduced<br> to RMB2 per square meter per month if the Project met with certain criteria; . | | --- | --- | | (iv) | provide<br> the Company with the right to purchase the Factory Premises at their costs and to offset<br> the purchase price with the paid rents; and | | --- | --- | | (v) | provide<br> the Company with green electricity sources including wind and/or solar generated electricity<br> where circumstance allows. | | --- | --- | | (B) | Pursuant<br> to the Cooperation Agreement, the Company shall | | --- | --- | | (i) | comply<br> with relevant laws and regulations and relevant policies when investing in the Project; | | --- | --- | | (ii) | be<br> responsible for all the preparatory work for the preliminary investment and construction<br> of the Project to ensure the implementation of the Project; | | --- | --- | | (iii) | establish<br> a wholly foreign owned enterprise (“WFOE”) in Jixi City with independent<br> legal status to carry out the Project; and | | --- | --- | | (iv) | be<br> responsible for all necessary approval application procedures required by the Project at<br> its own costs and expenses. | | --- | --- |
Other terms
The scale of the investment and construction of the Project will be subject to the details of the final approved feasibility study report of the Project. In the event the Project finally cannot obtain the necessary approval, the Cooperation Agreement shall terminate automatically.
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FORMATION OF WFOE IN JIXI CITY
On 13 September 2022, the Company has established the WFOE in Jixi City under the name 烯石(黑龍江)新能源科技有限公司 (transliterated as Graphex (Heilongjiang) New Energy Technologies Company Limited) with a registered capital of United States of America Dollar 10 million as the vehicle to carry out the Project.
REASONS FOR AND THE BENEFIT OF THE PROJECT
The principal activities of the Group are the business of processing and sale of graphite and graphene related products in Mainland China and the United States of America (“Graphene Products Business”), and landscape architecture business mainly in Hong Kong and Mainland China.
For the six months ended 30 June 2022, the Graphene Products Business contributed revenue of approximately HK$103.4 million, representing approximately 63.4% of the Group’s total revenue. The main product natural spherical graphite is used to produce anode of lithium-ion batteries that are used in electric vehicles, electronics, power tools, electric scooter, etc. Each electric vehicle contains approximately 70kg of graphite in its batteries. The demand for spherical graphite is expected to be strong in the foreseeable future. Currently, 90% of graphite anode material are supplied from China, and the remaining 10% from South Korea and Japan.
According to Benchmark Mineral Intelligence, the announced capacity of the battery gigafactory in the United States of America, Europe, and China combined converts to an annual demand of graphite anode material of over 4 million tons by 2030, which is over 10 times of the demand today.
As disclosed in the Announcement, the Board was of the view that the Graphene Products Business is appealing with significant room for growth and the demands for the Group’s product is expected to outstrip supply for the next few years benefited from the proliferation of the electric vehicle industry and the Company is preparing to exert advantages brought by growth on demand through adding manufacturing capacity. The implementation of the Project will allow the Group to gradually increase its annual processing and production capacity to 40,000 metric tons of high-purity spherical graphite and 10,000 metric tons of battery anode materials in the PRC starting in 2023.
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As the Group committed in expanding the Graphene Products Business, it recognized the necessity to expand it both in China and the rest of the world. The Board believes that the model of cooperation under the Cooperation Agreement, whereby the Jixi Mashan Government will be responsible for providing suitable site and policy supports and assisting the Company to obtain preferential rental terms for the Factory Premises for the setting up of the new deep processing and production facilities under the Project will improve the efficiency for the Company in carrying out and implementing the Project and will to benefit the Group to further expand its Graphene Products Business.
GENERAL
The Board wishes to emphasis that in carrying out and implementing of the Project, further transaction(s) may be required to be entered into by the Group and the Jixi Mashan Government and/or other third parties, including but not limited to lease and purchase agreement relating to the Factory Premises. Further announcement(s) will be made by the Company in relation thereto as and when appropriate in accordance with the Listing Rules.
WARNING
Asthe scale of the Project will be subject to the details of the final approved feasibility study report of the Project which approvalmay or may not be granted. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares.
DEFINITIONS
In this announcement, unless the context otherwise requires the following terms and expressions shall have the following meanings when used herein.
| “Announcement” | the<br> announcement made by the Company on 14 February 2022 |
|---|---|
| “Board” | the<br> board of Directors |
| “Company” | Graphex<br> Group Limited (烯石電動汽車新材料控股有限公司),<br> an exempted company incorporated in the Cayman Islands with limited liability, the issued shares of which are listed on the Stock<br> Exchange (stock code: 6128) |
| “connected<br> person(s)” | has<br> the meaning ascribed thereto in the Listing Rules |
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| --- | | “Cooperation<br> Agreement” | the<br> cooperation agreement dated 20 September 2022 entered into between the Company and Jixi Mashan Government relating to the<br> Company’s investment in the Project | | --- | --- | | “Director(s)” | the<br> director(s) of the Company | | “Group” | the<br> Company and its subsidiaries | | “Independent<br> Third Party” | third<br> parties independent of the Company and its connected persons | | “Jixi<br> City” | Jixi<br> City, Heilongjiang Province, the PRC | | “Jixi<br> Mashan Government” | 雞西市麻山區人民政府<br> (transliterated as Municipal Government of Mashan District, Jixi City, Heilongjiang Province, the PRC) | | “Jixi<br> (Mashan) Graphite Industrial Park” | 雞西(麻山)石墨產業園<br> (transliterated as Jixi (Mashan) Graphite Industrial Park) | | “Listing<br> Rules” | the<br> Rules Governing the Listing of Securities on the Stock Exchange | | “Mashan<br> District” | 雞西市麻山區<br> (translated as Mashan District of Jixi City) | | “MOU” | the<br> non-legally binding memorandum of understanding dated 14 February 2022 entered into between the Company and the Jixi Mashan Government<br> in relation to the proposed project for setting up graphite deep processing and production facilities within the Jixi (Mashan) Graphite<br> Industrial Park | | “PRC” | People’s<br> Republic of China | | “RMB” | Renminbi,<br> the lawful currency of the PRC | | “SFO” | the<br> Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong | | “Share(s)” | ordinary<br> share(s) of HK$0.01 (each) in share capital of the Company | | “Shareholder(s)” | the<br> holder(s) of the issued Shares | | “Stock<br> Exchange” | The<br> Stock Exchange of Hong Kong Limited | | By<br> Order of the Board | | --- | | Graphex<br> Group Limited | | Lau<br> Hing Tat Patrick | | Chairman |
Hong Kong, 20 September 2022
Asat the date of this announcement, the executive Directors are Mr. Lau Hing Tat Patrick, Mr. Chan Yick Yan Andross and Mr. Qiu Bin; thenon-executive Director is Mr. Ma Lida; and the independent non-executive Directors are Ms. Tam Ip Fong Sin, Mr. Wang Yuncai, Mr. LiuKwong Sang, Mr. Tang Zhaodong and Mr. Chan Anthony Kaikwong.
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Exhibit99.2
GlobalGraphite Supplier, Graphex Group Entered into an Agreement with Jixi Mashan Government in China to Support its Continued Expansion
Theagreement for a new production facility will allow Graphex Group to increase its annual output production of graphite to supplygigafactories in China and the rest of the world.
ROYALOAK, Michigan - September 21, 2022 - Today, the global supplier of graphite Graphex Group Limited (NYSE American: GRFX | HKSE: 6128), announced it has entered into an agreement with the Jixi Mashan Government on a project for a new production facility located in the Jixi (Mashan) Graphite Industrial Park (the “Project”). The agreement will allow Graphex to increase its annual production of graphite while establishing a graphite deep processing and production facility. The new site will have an intended output of 20,000 metric tons of high-purity spherical graphite in Phase I and an additional 10,000 metric tons of high-purity spherical graphite and 10,000 metric tons of battery anode materials in Phase II of the Project respectively.
Within the Jixi (Mashan) Graphite Industrial Park, the new factory for Phase I of the Project will feature five workshops across 270,000 square feet, an office building, and employee accommodation areas. The Project will roll out over the course of the next three years. Under the MOU, the Jixi Mashan Government will provide Graphex with the right to purchase the factory premise, while providing green electricity sources such as wind and solar to operate the facility.
Graphex believes, based on industry reports including Benchmark Mineral Intelligence, the combined annual demand for graphite anode material capacity to supply EV battery gigafactories in the U.S., Europe, and China will be over 4 million tons by 2030, which represents a 10X increase over the demand today.
“The global rise in demand for graphite continues unabated, and Graphex’s new production facilities in the U.S., China, and eventually Europe, will ensure that we can deliver a long-term stable supply of quality materials that are integral to the EV ecosystem,” said John DeMaio, President of Graphex Group and CEO of Graphex Technologies, Graphex Group’s operating subsidiary in the US. “The expansion of our production capabilities in Jixi and in Warren, MI are further steps in following through on our strategic plan to provide foundational support to the EV industry when and where it is needed. China has a well-established EV manufacturing industry and is a stable and expanding revenue base for us, so expansion of our existing operations is well-supported. And as the EV industry continues to accelerate in the U.S. demand for graphite is approaching 200,000 tons per year to supply just the gigafactories that have been announced so far. Currently, domestic production capacity of battery grade natural graphite is negligible and , given the emphasis on creating domestic U.S. supply chains as promoted recently in the Inflation Reduction Act, the Bipartisan Infrastructure Law, and Defense Production Act, we see significant opportunity for our experienced production capabilities to bridge that gap.”
In addition, as part of the agreement, Graphex Group has established a wholly foreign owned enterprise, Graphex (Heilongjiang) New Energy Technologies Company Limited, in Jixi City to carry out the proposed production facility. The added facility will now allow Graphex Group to gradually increase its annual production capacity to 40,000 tons metric tons of high-purity spherical graphite and 10,000 metric tons of battery anode materials in China starting in 2023.
Graphex continues development of a production plant for 15,000 metric tons of natural graphite battery anode material in Warren, Michigan through a joint venture and has recently announced a new initiative to establish a new pilot plant to produce high-purity spherical graphite within the same facility.
To learn more about these developments and more from Graphex Group, please visit www.graphexgroup.com
AboutGraphex: Graphex Group Limited, a Cayman Island company with principal offices in Hong Kong and regional offices in Shanghai and Royal Oak, MI, USA. Graphex is focused on the development of technologies and products to enhance renewable energy, particularly the enrichment of spherical graphite and graphene, key components for EV batteries and lithium-ion batteries for other use cases. Proficient in the commercial deep processing of graphite, Graphex has extensive commercial experience producing battery grade purified spherical graphite to the power battery market, currently at a volume of 10,000 metric tons per annum (tpa) with intentions to expand production to 40,000 tpa over the next three years. With a strategy to expand its global operations to support energy transition and electrification efforts worldwide, Graphex is currently among the top suppliers of specialized spherical graphite to the EV and renewable energy industries and holds patents in areas including products, production methods, machinery design, and environmental protection.
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