Mr. Don Baxter reports

FOCUS GRAPHITE'S BOARD OF DIRECTORS APPROVES A GRAFOID LOAN-TO-SHARES CONVERSION ON BEHALF OF FOCUS SHAREHOLDERS

The board of directors of Focus Graphite Inc. has approved a conversion of $1.5-million in financing to Grafoid Inc. into three million common shares in Grafoid at 50 cents per share.

On May 3, 2012, at the corporation's annual meeting, disinterested shareholders of the corporation passed a resolution to approve the participation of the corporation in Grafoid, enabling the corporation to fulfill its commitment to provide Grafoid with $1.5-million.

Grafoid recently closed an overallotment financing with Blackwall Capital Markets Inc. at 50 (U.S.) cents per share, and a friends-and-family private placement at 50 cents per share in Canada. The equity financings set the fair value of the shares for the conversion of the loan into Grafoid shares.

The board deemed the conversion to be in the best interest of the corporation's shareholders considering Grafoid's near-term prospects.

Related parties

Corporation chairman Jeffrey York and chief executive officer Gary Economo are related parties to the transaction, and, as such, declared their conflict of interest and were excluded from participation in the board's decision.

We seek Safe Harbor.