Zentek Ltd 40-F, filed Jun 25, 2026
Zentek Ltd. (ZTEKF)
About this 40-F
Zentek Ltd filed this 40-F on June 25, 2026, covering the fiscal year ended March 31, 2026.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 40-F
| ☐ | Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934 |
| or | |
| ☒ | Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 |
| For the fiscal year ended March 31, 2026 | Commission File Number 001-41310 |
Zentek Ltd.
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant's name into English (if applicable))
| Ontario, Canada | 2890 | N/A |
| (Province or other jurisdiction of | (Primary Standard Industrial Classification | (I.R.S. Employer |
| incorporation or organization) | Code Number) | Identification Number) |
1123 York Rd.
Guelph, Ontario N1E 6Z1
1-844-730-9822
(Address and telephone number of Registrant's principal executive offices)
Cogency Global Inc.
122 East 42nd Street, 18th Floor
New York, NY 10168
1-800-221-0102
(Name, address (including zip code) and telephone number (including
area code) of agent for service in the United States)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered |
| Common Shares, no par value | ZTEK | The Nasdaq Stock Market LLC |
Securities registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
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For annual reports, indicate by check mark the information filed with this Form:
| ☒ Annual information form | ☒ Audited annual financial statements |
Indicate the number of outstanding shares of each of the registrant's classes of capital or common stock as of the close of the period covered by the annual report: 107,792,002 outstanding as of March 31, 2026.
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.
☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
☐ Yes ☐ No
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.
☒ Emerging growth company
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
| † | The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
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EXPLANATORY NOTE
Zentek Ltd. (the "Company" or "Zentek") is a "foreign private issuer" as defined in Rule 3b-4 under Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is a Canadian issuer eligible to file its annual report ("Annual Report") pursuant to Section 13 of the Exchange Act on Form 40-F pursuant to the multi-jurisdictional disclosure system (the "MJDS") adopted by the United States Securities and Exchange Commission (the "SEC"). The Company's common shares are listed on the TSX Venture Exchange under the trading symbol "ZEN" and the Nasdaq Capital Market ("NASDAQ") under the trading symbol "ZTEK".
In this Annual Report, references to "we", "our", "us", the "Company", the "Registrant", or "Zentek", mean Zentek Ltd., unless the context suggests otherwise.
FORWARD LOOKING STATEMENTS
The documents incorporated into this Annual Report contain "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws (forward-looking information and forward-looking statements being collectively hereinafter referred to as "forward-looking statements"). Such forward-looking statements are based on expectations, estimates and projections as at the date of the documents incorporated by reference in this Annual Report or the dates of the documents incorporated herein, as applicable. Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often but not always using phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends", or variations of such words and phrases, or stating that certain actions, events or results "may" or "could", "would", "should", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements and are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements and information concerning: the intentions, plans and future actions of the Company; statements relating to the business and future activities of the Company after the date of this Annual Report; market position, ability to compete and future financial or operating performance of the Company after the date of this Annual Report; statements based on the audited and unaudited financial statements of the Company; anticipated developments in operations; the timing and amount of funding required to execute the Company's development and business plans; intellectual property expenditures; capital and exploration and development expenditures; the effect on the Company of any changes to existing legislation or policy; government regulation of patent law or mining operations; the length of time required to obtain permits, certifications and approvals; markets for the Company's graphene related products and the ability to supply those markets; the success of exploration, development and mining activities; the geology of mineral properties; environmental risks; the availability of labour; demand and market outlook for precious metals and the prices thereof; progress in development of mineral properties; estimated budgets; currency fluctuations; requirements for additional capital; government regulation; limitations on insurance coverage; the timing and possible outcome of litigation in future periods; the timing and possible outcome of regulatory and permitting matters; goals; strategies; future growth; planned business activities and planned future acquisitions; the adequacy of financial resources; and other events or conditions that may occur in the future.
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Forward-looking statements are based on the beliefs of the Company's management, as well as on assumptions, which such management believes to be reasonable based on information currently available at the time such statements were made. However, by their nature, forward-looking statements are based on assumptions and involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Forward-looking statements are subject to a variety of risks, uncertainties, and other factors that could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation those risks outlined under the heading "Risk Factors" on page 21 of the Annual Information Form for the year ended March 31, 2026, attached as Exhibit 99.1 to this Annual Report, and incorporated herein by reference, and under the heading "Risks and Uncertainties" on pages 40-49 of the Registrant's Management's Discussion & Analysis for the year ended March 31, 2026, attached as Exhibit 99.3 to this Annual Report, and incorporated herein by reference, and in other filings that the Registrant has made and may make with applicable securities authorities in the future.
The list of risk factors set out in the Annual Information Form for the year ended March 31, 2026, attached as Exhibit 99.1 to this Annual Report, and as set out in Management's Discussion & Analysis for the year ended March 31, 2026, attached as Exhibit 99.3 to this Annual Report, and both incorporated herein by reference, is not exhaustive of the factors that may affect any forward-looking statements of the Company. Forward-looking statements are statements about the future and are inherently uncertain. Actual results could differ materially from those projected in the forward-looking statements as a result of the matters set out or incorporated by reference in this Annual Report generally and certain economic and business factors, some of which may be beyond the control of the Company, including, among other things, potential direct or indirect operational impacts resulting from infectious diseases or pandemics, from international or domestic conflicts or political crises, and other factors not currently viewed as material that could cause actual results to differ materially from those described in the forward-looking statements. In addition, recent events in the world economy and global financial and credit markets have resulted in high market and commodity volatility and a contraction in debt and equity markets, which could have a particularly significant, detrimental, and unpredictable effect on forward-looking statements. The Company does not intend and does not assume any obligation, to update any forward-looking statements, other than as required by applicable law. For all these reasons, the Company's securityholders should not place undue reliance on forward-looking statements.
NOTICE TO UNITED STATES READERS - DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTICES
The Registrant is permitted, under the MJDS, to prepare this Annual Report in accordance with Canadian disclosure requirements, which are different from those of the United States. The Registrant has historically prepared its consolidated financial statements, which are filed as Exhibit 99.2, and incorporated herein by reference, to this Annual Report on Form 40-F, in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board. Financial statements prepared in IFRS may differ from financial statements prepared in United States GAAP ("U.S. GAAP") and from practices prescribed by the SEC. Therefore, the Registrant's financial statements filed with this Annual Report may not be comparable to financial statements of United States companies prepared in accordance with U.S. GAAP.
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Unless otherwise indicated, all dollar amounts in this annual report on Form 40-F are in Canadian dollars. The exchange rate of Canadian dollars into U.S. dollars, as of our fiscal year end, on March 31, 2026 based upon the closing rate published by the Bank of Canada, was U.S.$1.00=CDN$1.3939. Bank of Canada exchange rates are nominal quotations and are not buying or selling rates. These rates are intended for statistical or analytical purposes. Rates available from financial institutions will differ. Rates are expressed in Canadian dollars, converted from U.S. dollars.
PRINCIPAL DOCUMENTS
The following documents have been filed as part of this annual report on Form 40-F:
A. Annual Information Form
The Registrant's Annual Information Form for the fiscal year ended March 31, 2026 is attached as Exhibit 99.1 to this Annual Report on Form 40-F, and is incorporated by reference herein.
B. Audited Annual Financial Statements
The Registrant's consolidated audited annual financial statements, including the report of the independent registered public accounting firm with respect thereto, are attached as Exhibit 99.2 to this Annual Report on Form 40-F, and is incorporated by reference herein.
C. Management's Discussion and Analysis
The Registrant's management's discussion and analysis of financial condition and results of operations for the year ended March 31, 2026 is attached as Exhibit 99.3 to this Annual Report on Form 40-F, and is incorporated by reference herein.
TAX MATTERS
Purchasing, holding or disposing of securities of the Registrant may have tax consequences under the laws of the United States and Canada that are not described in this Annual Report on Form 40-F.
DISCLOSURE CONTROLS AND PROCEDURES
The required disclosure is included under the heading "Disclosure Controls" in the Company's Management's Discussion and Analysis for the year ended March 31, 2026, filed as Exhibit 99.3 to this Annual Report on Form 40-F, and incorporated herein by reference.
MANAGEMENT'S REPORT ON
INTERNAL CONTROL OVER FINANCIAL REPORTING
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The required disclosure is included under the heading "Internal Control Over Financial Reporting" in the Company's Management's Discussion and Analysis for the year ended March 31, 2026, filed as Exhibit 99.3 to this Annual Report on Form 40-F, and incorporated herein by reference.
ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM
This Annual Report does not include an attestation report of the Registrant's registered public accounting firm due to a transition period established by rules of the SEC for newly public companies. Under Section 3 of the Exchange Act, as a result of enactment of the Jumpstart Our Business Startups Act (the "JOBS Act"), "emerging growth companies" are exempt from Section 404(b) of the Sarbanes-Oxley Act of 2002, which generally requires that a public company's registered public accounting firm provide an attestation report relating to management's assessment of internal control over financial reporting. The Registrant qualifies as an "emerging growth company" and therefore has not included in, or incorporated by reference into, this Annual Report such an attestation report as of the end of the period covered by this Annual Report.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
The required disclosure is included under the headings "Internal Controls over Financial Reporting" and "Changes to Internal Control over Financial Reporting" in the Company's Management's Discussion and Analysis for the year ended March 31, 2026, filed as Exhibit 99.3 to this Annual Report on Form 40-F, and incorporated herein by reference.
NOTICES PURSUANT TO REGULATION BTR
None.
CODE OF CONDUCT
The Registrant has adopted a written "code of ethics" (as defined by the rules and regulations of the SEC), entitled "Code of Business Conduct & Ethics" (the "Code") that applies to all members of the Board of Directors, officers, and employees of the Company and its affiliates and subsidiaries worldwide. Adherence to this code is a condition of employment with or providing services to the Company.
The Code may be obtained upon request from Zentek Ltd.'s head office at 1123 York Rd., Guelph, Ontario N1E 6Z1, or by viewing the Registrant's web site at https://zentek.com/governance.html.
All amendments to the Code, and all waivers of the Code with respect to any director, executive officer or principal financial and accounting officers, will be posted on the Registrant's web site within five business days following the date of the amendment or waiver and any amendment will be provided in print to any shareholder upon request.
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AUDIT COMMITTEE
Our Board of Directors has established the Audit Committee in accordance with section 3(a)(58)(A) of the Exchange Act and Rule 5605(c) of the NASDAQ Marketplace Rules for the purpose of overseeing our accounting and financial reporting processes and the audits of our annual financial statements.
The Audit Committee is comprised of Eric Wallman (Chair), John Snisarenko, and Matt Fontes. Our Board of Directors has determined that the Audit Committee meets the composition requirements set forth by Section 5605(c)(2) of the NASDAQ Marketplace Rules and are independent members of the Audit Committee as determined under Rule 10A-3 of the Exchange Act and Rule 5605(a)(2) of the NASDAQ Marketplace Rules.
All three members of the Audit Committee are financially literate, meaning they are able to read and understand the Registrant's financial statements and to understand the breadth and level of complexity of the issues that can reasonably be expected to be raised by the Registrant's financial statements.
Our Board of Directors has determined that Eric Wallman qualifies as an "audit committee financial expert" (as defined in paragraph (8)(b) of General Instruction B to Form 40-F).
The SEC has indicated that the designation or identification of a person as an audit committee financial expert does not make such person an "expert" for any purpose, impose any duties, obligations or liability on such person that are greater than those imposed on members of the audit committee and the Board of Directors who do not carry this designation or identification, or affect the duties, obligations or liability of any other member of the audit committee or Board of Directors.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The required disclosure about fees and services billed by our principal accountant, BDO Canada LLP (PCAOB ID No. 1227) is included under the heading "Audit Committee Information" under the sub-heading "External Auditor Services Fees (By Category)" in the Company's Annual Information Form for the fiscal year ended March 31, 2026, filed as Exhibit 99.1 to this Annual Report on Form 40-F, and incorporated herein by reference.
PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES PROVIDED BY
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee Charter sets out responsibilities regarding the provision of non-audit services by the Registrant's external auditors and requires the Audit Committee to pre-approve all permitted non-audit services to be provided by the Registrant's external auditors, in accordance with applicable law.
OFF-BALANCE SHEET ARRANGEMENTS
The Registrant currently has no off-balance sheet arrangements.
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TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
The following table lists, as of March 31, 2026, information with respect to the Registrant's known contractual obligations (in thousands, stated in United States dollars):
| Payments due by period | |||||||||||||||
| Less than | More than | ||||||||||||||
| Contractual Obligations | Total | 1 year | 1-3 years | 3-5 years | 5 years | ||||||||||
| Long-Term Debt Obligations | $ | 1,256 | $ | Nil | $ | 1,256 | $ | Nil | $ | Nil | |||||
| Capital (Finance) Lease Obligations | $ | Nil | $ | Nil | $ | Nil | $ | Nil | $ | Nil | |||||
| Operating Lease Obligations | $ | 227 | $ | 227 | $ | Nil | $ | Nil | $ | Nil | |||||
| Purchase Obligations | $ | Nil | $ | Nil | $ | Nil | $ | Nil | $ | Nil | |||||
| Other Long-Term Liabilities Reflected on Balance Sheet | $ | Nil | $ | Nil | $ | Nil | $ | Nil | $ | Nil | |||||
| Total | $ | 1,483 | $ | 227 | $ | 1,256 | $ | Nil | $ | Nil | |||||
NASDAQ CORPORATE GOVERNANCE
The Registrant is a foreign private issuer and its common shares are listed on the NASDAQ.
NASDAQ Rule 5615(a)(3) permits a foreign private issuer to follow its home country practice in lieu of the requirements of the Rule 5600 Series, the requirement to distribute annual and interim reports set forth in Rule 5250(d), and the Direct Registration Program requirement set forth in Rules 5210(c) and 5255; provided, however, that such a company shall comply with the Notification of Material Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640), have an audit committee that satisfies Rule 5605(c)(3), and ensure that such audit committee's members meet the independence requirement in Rule 5605(c)(2)(A)(ii).
The Registrant has reviewed the NASDAQ corporate governance requirements and confirms that except as described below, the Registrant is in compliance with the NASDAQ corporate governance standards in all significant respects:
The Registrant does not follow Rule 5605(c)(1), which requires the Registrant to adopt a formal written Audit Committee charter specifying the items enumerated in Rule 5605(c)(1), with the Audit Committee reviewing and assessing the adequacy of the charter on an annual basis. In lieu of following Rule 5605(c)(1), the Registrant follows the rules of the TSX Venture Exchange, and the guidelines of Canadian Securities Administrators' National Instrument 52-110 - Audit Committees.
The Registrant does not follow Rule 5605(e)(1), which requires the Registrant to have independent director involvement in the selection of director nominees, by having a nominations committee comprised solely of independent directors. In lieu of following Rule 5605(e)(1), the Registrant follows the rules of the TSX Venture Exchange.
The Registrant does not follow Rule 5605(e)(2), which requires the Registrant to adopt a formal written charter or board resolution, as applicable, addressing the director nomination process and such related matters as may be required under the federal securities laws. In lieu of following Rule 5605(e)(2), the Registrant follows the rules of the TSX Venture Exchange.
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The Registrant does not follow Rule 5605(d)(1), which requires the Registrant to adopt a formal written compensation committee charter specifying the items enumerated in Rule 5605(d)(1), with the compensation committee reviewing and reassessing the adequacy of the charter on an annual basis. In lieu of following Rule 5605(d)(1), the Registrant follows the rules of the TSX Venture Exchange, and guidelines of Canadian Securities Administrators' National Policy 58-201 - Corporate Governance Guidelines.
The Registrant does not follow Rule 5605(d)(2), which requires the Registrant to have, a compensation committee of at least two members, with each member being an "Independent Director", as defined under Rule 5605(a)(2). In lieu of following Rule 5605(d)(2), the Registrant follows the rules of the TSX Venture Exchange, and guidelines of Canadian Securities Administrators' National Policy 58-201 - Corporate Governance Guidelines.
The foregoing is consistent with the laws, customs, and practices in the Province of Ontario and Canada.
Further information about the Registrant's governance practices is included on the Registrant's website.
MINE SAFETY DISCLOSURE
Not applicable.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
None.
UNDERTAKING
The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the SEC staff, and to furnish promptly, when requested to do so by the SEC staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.
CONSENT TO SERVICE OF PROCESS
The Registrant has previously filed with the SEC a written consent to service of process on Form F-X. Any change to the name or address of the Registrant's agent for service shall be communicated promptly to the SEC by amendment to the Form F-X referencing the file number of the Registrant.
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ADDITIONAL INFORMATION
Additional information relating to the Registrant may be found on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on the SEC's Electronic Data Gathering, Analysis and Retrieval (EDGAR) system at www.sec.gov.
INCORPORATION BY REFERENCE
The Registrant's Annual Report is incorporated by reference into the Registrant's Registration Statement on Form F-3 (Reg. No. 333-278886), including the prospectus contained therein.
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SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized.
| ZENTEK LTD. | ||
| By: | /s/ Wendy Ford | |
| Name: Wendy Ford | ||
| Title: Chief Financial Officer |
Date: June 25, 2026
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EXHIBIT INDEX
*To be filed by amendment.
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Annual Information Form
ZENTEK LTD.
For the year ended March 31, 2026
Dated as of June 25, 2026
TABLE OF CONTENTS
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PRELIMINARY NOTES
This Annual Information Form ("AIF") of Zentek Ltd. (the "Company") is prepared in the form prescribed by National Instrument 51-102 - Continuous Disclosure Obligations of the Canadian Securities Administrators. All dollar amounts in this AIF are expressed in Canadian dollars unless otherwise indicated. All information in this AIF is as of March 31, 2026, unless otherwise indicated.
FORWARD-LOOKING INFORMATION
This AIF and the documents incorporated into this AIF contain "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws (forward-looking information and forward-looking statements being collectively hereinafter referred to as "forward-looking statements"). Such forward-looking statements are based on expectations, estimates and projections as at the date of this AIF or the dates of the documents incorporated herein, as applicable. Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often but not always using phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends", or variations of such words and phrases, or stating that certain actions, events or results "may" or "could", "would", "should", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements and are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements and information concerning: the intentions, plans and future actions of the Company; statements relating to the business and future activities of the Company after the date of this AIF; market position, ability to compete and future financial or operating performance of the Company after the date of this AIF; statements based on the audited and unaudited financial statements of the Company; anticipated developments in operations; the timing and amount of funding required to execute the Company's development and business plans; intellectual property expenditures; capital and exploration and development expenditures; the effect on the Company of any changes to existing legislation or policy; government regulation of patent law or mining operations; the length of time required to obtain permits, certifications and approvals; markets for the Company's graphene related products and the ability to supply those markets; the success of exploration, development and mining activities; the geology of mineral properties; environmental risks; the availability of labour; demand and market outlook for precious metals and the prices thereof; progress in development of mineral properties; estimated budgets; currency fluctuations; requirements for additional capital; government regulation; limitations on insurance coverage; the timing and possible outcome of litigation in future periods; the timing and possible outcome of regulatory and permitting matters; goals; strategies; future growth; planned business activities and planned future acquisitions; the adequacy of financial resources; and other events or conditions that may occur in the future.
Forward-looking statements are based on the beliefs of the Company's management, as well as on assumptions, which such management believes to be reasonable based on information currently available at the time such statements were made. However, by their nature, forward-looking statements are based on assumptions and involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Forward-looking statements are subject to a variety of risks, uncertainties, and other factors that could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation, those risks outlined under the section "Risk Factors" in this AIF.
The list of risk factors set out in this AIF is not exhaustive of the factors that may affect any forward-looking statements of the Company. Forward-looking statements are statements about the future and are inherently uncertain. Actual results could differ materially from those projected in the forward-looking statements as a result of the matters set out or incorporated by reference in this AIF generally and certain economic and business factors, some of which may be beyond the control of the Company, including, among other things, potential direct or indirect operational impacts resulting from infectious diseases or pandemics, from international or domestic conflicts or political crises, and other factors not currently viewed as material that could cause actual results to differ materially from those described in the forward-looking statements. In addition, recent events in the world economy and global financial and credit markets as a consequence of the above-noted conflicts and tariffs imposed by the United States and other nations have resulted in high market and commodity volatility and a contraction in debt and equity markets, which could have a particularly significant, detrimental, and unpredictable effect on forward-looking statements. The Company does not intend and does not assume any obligation, to update any forward-looking statements, other than as required by applicable law. For all of these reasons, the Company's securityholders should not place undue reliance on forward-looking statements.
CORPORATE STRUCTURE
Name, Address, and Incorporation
The Company was incorporated under the Business Corporations Act (Ontario) as 1774119 Ontario Limited on July 29, 2008. Pursuant to Articles of Amendment dated November 24, 2009, the Company changed its name to Zenyatta Ventures Ltd. Pursuant to Articles of Amendment dated January 1, 2019, the Company changed its name to ZEN Graphene Solutions Ltd. On October 27, 2021 (effective October 28, 2021), the Company filed Articles of Amendment changing its name from "Zen Graphene Solutions Ltd" to "Zentek Ltd.".
The Company's registered and head office is located at 1123 York Rd., Guelph, Ontario N1E 6Z1.
The Company is a reporting issuer in the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador.
The common shares of the Company are listed for trading on the TSX Venture Exchange ("TSXV") under the symbol "ZEN" (listed in December 2010) and in the United States on the Nasdaq Capital Market ("Nasdaq") under the symbol "ZTEK" (listed in March 2022).
Inter-corporate Relationships
The Company has three material wholly-owned subsidiaries:
(i) Albany Graphite Corp. ("AGC"), incorporated under the laws of the Province of British Columbia.
(ii) Triera Biosciences Ltd. ("Triera"), incorporated under the laws of the Province of Ontario; and
(iii) Zentek USA Inc., incorporated under the laws of the State of Delaware.
GENERAL DEVELOPMENT OF THE BUSINESS
Originally, the Company commenced operations as a junior mineral exploration company focused primarily on mineral deposits in Northern Ontario, Canada. The Company was actively engaged in exploring mining projects and. through its wholly-owned subsidiary AGC, holds a 100% undivided interest in 521 mining claims (461 single-cell claims and 60 boundary-cell claims) located north of Lake Superior and west of James Bay in Northern Ontario which host an igneous-hosted, fluid-derived graphite deposit (the "Albany Graphite Project"). The Company did extensive work to determine potential uses for the graphite materials to be extracted from the Albany Graphite Project, including engaging in testing the properties of the graphite material and studies on graphene materials.
In May 2018, the Company began to focus resources on the research and development of graphene and related applications, which was supported by shareholders of the Company who voted in favour of a new Board of Directors (the "Board") with an interdisciplinary team to augment key management personnel with expertise in business, science, marketing, and government relations.
Through 2020 and 2021 the Company developed and tested its ZenGUARDTM coating, which can be applied to, among other things, personal protective equipment ("PPE") and heating, ventilation, and air conditioning ("HVAC"), and which has shown to significantly increase bacterial and viral filtration efficiency.
On October 18, 2021, the TSXV changed the Company's classification from a "mining issuer" to an "industrial, technology, or life sciences issuer", which was approved by the shareholders of the Company on September 27, 2021, in accordance with the rules and policies of the TSXV.
On May 23, 2023, the Company completed the transfer of the ownership over the Albany Graphite Project to AGC pursuant to a property purchase agreement dated April 24, 2023, as described in more detail under the section "Albany Graphite Project" below.
On June 12, 2023, the Company incorporated Triera which now owns the exclusive, global licensing rights for all aptamer-based technology from the collaboration with McMaster University. The Company and McMaster University entered into a standard license agreement dated June 11, 2021, pursuant to which McMaster agreed to license certain intellectual property. All rights and obligations under this licensing agreement were assigned to Triera subsequent to incorporation.
The Company is currently an intellectual property development and commercialization company advancing a portfolio of graphene-enabled and advanced material technologies across clean air, next-generation materials, and critical minerals. Following a strategic reset adopted in January 2026, the Company concentrates its activities on three core platforms: the Albany Graphite Project, ZenGUARDTM, and its aptamer technologies advanced through Triera.
Three Year History
Current Business
ZenGUARD™ Compound - Personal Protective Equipment
At the Company's financial year-end, the Company focused primarily on the commercialization of ZenGUARDTM for use in HVAC filters, although it continued its business relating to PPE.
On August 24, 2023, the Company announced that it had signed a supply agreement with Henry Schein, Inc., for a three-year term in respect of distribution by Henry Schein, Inc. ("Henry Schein") of ZenGUARD™-coated masks to dental practices in Canada and, subject to regulatory approval, potentially in the United States. In September 2023, Henry Schein placed their first order of masks. On July 24, 2024, the Company announced that it would embark on a Canada-wide sampling program for dental professionals facilitated by Henry Schein that would see ZenGUARD™ Antimicrobial Surgical Masks included in product shipments to Henry Schein customers.
On April 3, 2024, the Company announced that it had entered into a definitive distribution agreement with Dallas, Texas-based Medwell Solutions LLC for its ZenGUARD™ enhanced surgical masks in the United States. The agreement was signed on March 18th, 2024, and is for a period of two years from the date of facility establishment registration and issuance of market clearance from the United States Food and Drug Administration, at which point sales of ZenGUARD™ enhanced surgical masks can commence.
In April 2024, the Company filed a 510(k) application with the United States Food and Drug Administration for ZenGUARD™ Surgical Masks. The Company was required to complete additional safety and performance testing for the application to the Food and Drug Administration.
As at March 31, 2026, the Company had sold all inventory of masks. The Company continues to market its ZenGUARD™ product to be applied to various materials and has targeted manufacturers including PPE manufacturers and HVAC filter material companies.
ZenGUARD™ Compound - HVAC Filtration
During the financial year, on the Company devoted significant resources to commercializing ZenGUARDTM coated HVAC filters. The Company's principal developments relating to is ZenGUARD™ HVAC filtration business are described below.
On September 6, 2023, the Company announced the results of a study comparing the viral filtration efficiency ("VFE") of ZenGUARDTM enhanced MERV 9 filters with an uncoated MERV 9 filter. The testing was performed by LMS Technologies, which specializes in the testing and certification of filter manufacturers across the world, referring to the new American Society of Heating, Refrigerating and Air-Conditioning Engineers ("ASHRAE") standards for aerosolized particles and determining the impact of dust loading on VFE and particle filtration efficiency ("PFE") as per ASHRAE 52.2 testing standards. Key findings of the study included: (i) the VFE of ZenGUARDTM Enhanced Air Filters started with a significant advantage over equivalent non-coated filters, from 23.7% to 37.7%, a 59% enhancement or a 14% net gain overall, and, the VFE performance consistently increased faster for the ZenGUARDTM Enhanced Air Filters compared to the uncoated filters (at six months equivalent dust loading, the VFE of the ZenGUARDTM Enhanced Air Filter was 85.6% compared to 55.2% for the uncoated filter, a 28.4% net gain); (ii) the pressure drop remained consistent between ZenGUARDTM Enhanced Air Filter and uncoated filters as dust loading increased, indicating that ZenGUARDTM does not adversely affect airflow or energy efficiency of the HVAC system; and (iii) ZenGUARDTM Enhanced Air Filters operated similarly to regular MERV 9 filters when tested for PFE, effectively removing particles across all size ranges.
On September 11, 2023, the Company announced the results of a study conducted by ParticleOne Inc., an RWDI Ventures company. The study evaluated the performance of ZenGUARDTM Enhanced Air Filter technology in comparison to a standard MERV 9 filter. The study was conducted to assess the effectiveness of filters in removing infectious particles from the air and to determine the potential return on investment ("ROI") of enhanced viral filtration from using ZenGUARDTM technology. The ParticleOne model ROI analysis indicated that the ZenGUARDTM enhanced MERV 9 filter resulted in a substantial reduction in annual absenteeism costs ($15,016.95) compared to a regular MERV 9 filter in an office space of 10,000 square feet with 75 occupants.
On December 8, 2023, the Company announced a distribution agreement entered into with 1Click Heating and Cooling Inc. ("1Click"), a private HVAC company focused on the heat pump market, for ZenGUARDTM MERV 9 filters in various sizes and is expected to include other ZenGUARDTM enhanced MERV-rated filters in the future. This agreement will see 1Click utilize ZenGUARDTM filters for its regular customer service maintenance programs, along with making ZenGUARDTM filters available to customers from inventory held in various provinces. The Company's agreement with 1Click has an initial term of 2 years from the date of approval from the Pest Management Regulatory Agency and may be extended by mutual agreement of the parties.
On January 22, 2024, the Company announced the completion of a new study highlighting the potential energy, emission and cost savings for commercial buildings adopting ZenGUARD™ Enhanced Air Filters. By using ZenGUARDTM Enhanced Air Filters to control infectious aerosols instead of increasing the percentage of outside air to achieve a similar risk reduction, the Company estimates that a typical office space of 10,000 square feet with 75 occupants can reduce HVAC energy consumption by approximately 62%.
On May 7, 2024, the Company announced that it completed a case study based on the City of Toronto highlighting the economic and environmental benefits related to using MERV 9A filters compared to using MERV 13 filters. The study quantifies cost savings and reductions in carbon emission and waste assuming the City of Toronto is currently using MERV 13 filters in all its buildings and switches to MERV 9A filters. The study found potential savings of over $40 million stemming from significantly reduced labour costs due to filters being changed every six months rather than every three months, reduced energy requirements and costs due to improved air flow and lower waste disposal costs from fewer filters being used.
On May 23, 2024, the Company announced that it had entered into a distribution agreement, effective March 19, 2024, with DCL Supply Ltd. ("DCL Supply"), a private HVAC master product distributor. The initial term of the agreement is for one year, and it automatically renews for subsequent one-year terms unless 90 days' notice is given by either party prior to renewal. The initial product to be distributed will be ZenGUARDTM Enhanced Air Filters for the HVAC market. This agreement would allow DCL Supply to distribute ZenGUARDTM Enhanced Air Filters through its distributor network serving numerous industrial, commercial and institutional clients within and across Canada.
On October 31, 2024, the Company announced that it had withdrawn the submission it had made to the Health Canada Pest management Regulatory Agency ("PMRA") for registration of ZenGUARDTM Enhanced Air filters under the Pest Control Products Act, and on November 27, 2024 announced its intention to market the product as a Class 1 Medical device under its existing MDEL; the appropriate regulatory classification of the product thereafter remained the subject of ongoing discussion with Health Canada. On May 6, 2026, the Company announced that it had received a revised classification from Health Canada's Pesticides Regulatory Directorate that ZenGUARDTM Enhanced Air Filters are not subject to regulation under the Pest Control Products Act, on the basis that the product is exempt under section 3(1)(a) of the Pest Control Products Regulations because it operates through a mechanical mode of action.
On March 12, 2025, the Company announced that shelf-life efficacy testing has been completed on aged ZenGUARDTM Enhanced Air Filters. ZenGUARDTM Enhanced Air Filters were aged for 20 months prior to testing to establish the product's shelf life. Viral filtration efficiency ("VFE") was unchanged after aging demonstrating that the ZenGUARDTM coating has a consistent performance over a duration of 20 months.
On April 14, 2025, the Company announced the signing of a collaboration agreement effective April 11, 2025, with Filtration Solutions Industrial Co. ("FSCO"), a leading Saudi-based manufacturer and distributor of air filtration products, to manufacture and distribute ZenGUARDTM Enhanced Air Filters across the Gulf Cooperation Council ("GCC") region. Under the terms of the agreement, the Company will supply FSCO with HVAC filter media coated with ZenGUARDTM. FSCO would then produce ZenGUARDTM Enhanced Air Filters that will be marketed and distributed under the Company's branding throughout the GCC, including Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain, and Oman, with the net revenue generated from sales of the products split between the parties. The term of the agreement is for three years, with additional renewal options.
On April 29, 2025, the Company announced that the Forensic Services and Coroner's Complex in Toronto, Ontario, where Dexterra Group Inc. provides integrated facility management services, has issued a purchase order for the procurement of ZenGUARDTM Enhanced Air Filters to be used across its facility.
On May 27, 2025, the Company announced the execution of an agency agreement with RSK Environment Ltd. ("RSK"), a global environmental consulting, engineering and technical services business, headquartered in the UK on May 7, 2025. This agreement enables RSK to act as the Company's authorized facilitator for marketing and promoting its ZenGUARD™ Enhanced Air Filters in more than 20 countries. Under the agreement, RSK will support the Company's international growth by identifying and developing sales opportunities for ZenGUARD™ Enhanced Air Filters in key global markets, including the GCC region. The Company will retain full responsibility for manufacturing and fulfillment while compensating RSK with a fixed commission on sales generated within the designated territories. The term of the agreement is for three years, with additional renewal options.
On June 12, 2025, the Company announced new independent test results comparing the viral filtration efficiency ("VFE") of ZenGUARD™ Enhanced Air Filters against the bacteriophage MS2 compared to equivalent Minimum Efficiency Reporting Value ("MERV")-rated filters without ZenGUARD™. The testing was performed by the third-party ISO 17025:2017 certified lab LMS Technologies Inc. ("LMS"), which specializes in the testing and certification of filter manufacturers across the world in line with American Society of Heating, Refrigerating and Air-Conditioning Engineers ("ASHRAE") standards. The test results showed that the ZenGUARD™ Enhanced Air Filters achieved an average infectious aerosol removal efficiency of MS2 bacteriophage of 42% compared to an untreated filter, which achieved an average of 16%. These strong results align with previous tests performed with bacteriophage Phi6, which is often used as a surrogate for SARS-CoV-2 and other enveloped viruses. This milestone adds to a growing body of third-party validation demonstrating ZenGUARD™ Enhanced Air Filter's unique combination of effectiveness and simplicity. Based on these new test results using MS2 bacteriophage, the Company now has science-based, directly comparable data demonstrating that ZenGUARD™ is highly effective at controlling infectious aerosols and is fully aligned with ASHRAE Standard 241 testing methodology.
On March 4, 2026, the Company announced the initiation of a pilot evaluation program with Quality Filters Inc. ("Quality"), a United States-based manufacturer of HVAC and industrial air filtration products, to assess the integration of the Company's proprietary air filtration media technology into Quality's commercial product lines. The Company announced that the pilot program is designed to assess product compatibility, manufacturing scalability, and end-product performance under real-world commercial conditions. The Company also announced that, during the pilot period, the parties will collaborate on defining the commercial and technical framework for a potential long-term supply arrangement.
On May 13, 2026, the Company further that, having previously completed is Innovative Solutions Canada Testing Stream contract validating ZenGUARDTM Enhanced Air filters to its Pathway to Commercialization source list, establishing the Company as an exclusive supplier within the Pathway to Commercialization framework of this type of innovation to the Government of Canada for a three-year period, during which any federal department or agency may purchase ZenGUARDTM Enhanced Air filters directly. Inclusion on the Pathway to Commercialization source list does not guarantee a minimum number of orders or contracts, and procurement decisions remain at the discretion of individual federal departments and agencies.
ZenGUARD™ Industrial Scale Production and Coating Facility
The Company has installed industrial-scale production equipment to produce the ZenGUARD™ coating formulation at its York Rd., Guelph, Ontario location, which location is permitted for industrial use. The Company has also purchased coating equipment so the process of applying the ZenGUARD™ coating formulation to spunbond polypropylene for use in surgical masks, HVAC filter materials, other PPE equipment, and potentially other uses, can be completed by the Company on-site. The Company spent cumulatively approximately $2.8 million on the construction of the facility.
The effective construction completion date for the coating line was November 30, 2022. Following completion of installation, a period of training and certification began. The coating line became commercially operational in August 2023.
On May 18, 2023, the Company announced that it had been granted the ISO 13485:2016 Quality Management System certification standard by the British Standards Institution. The Company also received Medical Device Single Audit Program ("MDSAP") certificate No. 777967. The ISO and MDSAP are for the Company's Quality Management System and do not include the production facility.
Business in Development
ZenGUARD™ and Other Research and Development
The Company continues to seek the most effective, cost-efficient, and scalable process to produce high-quality GO. The production of GO requires a consistent source (or precursor) material for conversion to graphene, which is then applied to various products for enhancement. The Company believes that it has a potential competitive advantage with its interest in AGC and the large and high-quality supply of source material from the Albany Graphite Project, if and when the Company determines it cost-effective to use such material.
On April 5, 2023, the Company filed patent applications for ZenGUARD™ in 47 countries including the United States, Europe and India.
On May 21, 2024, the Canadian Intellectual Property Office: issued a patent to the Company for Graphene Oxide-Cationic Silver (GO-Ag+) Nanocomposites and Their Use as a Broad-Spectrum Antimicrobial Agent, which includes a total of 78 successful claims, further to the patent application the Company filed in Canada and the United States on December 22, 2020. The Company has also applied for the patent with the United States Patent and Trademark Office. The patent claims use of the novel Go-Ag+ compound, which is the active ingredient for ZenGUARD™, as an effective agent against both regular and resistant bacteria, fungi and viruses, and use of the GO-Ag+ as the active ingredient in liquid, powder and ointments.
Aptamer-Based Rapid Detection Technology
Pursuant to a license agreement dated June 11, 2021, as amended June 23, 2023, McMaster University has granted to the Company, for a twenty-year term, a worldwide exclusive royalty-bearing license to use and practice all aptamer and DNAzyme uses, including, but not limited to, diagnostics, therapeutics, and as neutralization agents, including, but not limited to SARS-CoV-2. On October 5, 2023, the Company announced that it had transferred to a wholly owned subsidiary the exclusive, global licensing rights for all aptamer-based technology from the collaboration with McMaster University. The technology was developed by a team of researchers under the guidance of Drs. Yingfu Li, John Brennan and Leyla Soleymani, who have expertise in biosensing technologies and applications as point of care diagnostics. This patent-pending technology was validated with clinical samples from patients recruited under the supervision of two clinicians, Drs. Deborah Yamamura and Bruno Salena, who also work at McMaster University. The project was funded by the Canadian Institutes of Health Research. This technology has shown to be accurate (similar to current PCR tests), is saliva-based, affordable and scalable, and provides results in under 10 minutes. A license fee of $100,000, comprised of $50,000 cash and $50,000 in common shares of the Company (19,157 common shares at $2.61 per share) was paid to McMaster University as consideration. Although this technology was initially being developed specifically for COVID-19, this technology platform is designed to be able to detect other diseases by changing the aptamer to match new diseases.
On May 19, 2022, the Company announced that McMaster received two Natural Sciences and Engineering Research Council ("NSERC") grants related to the aptamer-based rapid detection technology; the Alliance Missions Grant in the amount of $1,000,000, and an Idea to Innovation (I2I) Grant in the amount of $350,000, of which the Company will make a $140,000 contribution. The Company intends to continue working with Dr. Yingfu Li and the research team at McMaster through in-kind contributions, using these NSERC grants towards commercializing the rapid diagnostic platform. The grants will be used to advance commercialization efforts by improving the performance of aptamers, optimizing chip synthesis, and initiating tests for additional pathogens that can be incorporated into its pathogen detection platform. The Company now expects to advance the commercialization of its aptamer technology principally through Triera's asset-light, client-funded contract research organization services model, which the Company anticipates may generate earlier and more predictable revenue and may lead to follow-on programs, licensing or product partnerships.
To bring the product to market, the Company will be required to obtain authorization from Health Canada under an interim order, or to obtain a Class IV Medical Device Active License ("MDAL"). The process for obtaining an MDAL involves completing certain testing requirements and demonstrating that the product is (i) safe, (ii) effective, and (iii) fit for purpose. Assuming that process is completed, the Company would then start preparing a product technical file, and then seek to complete a Health Canada Class IV application.
On July 20, 2023, the Company announced that the aptamer technology platform was successfully tested as a potential prophylactic or therapeutic for SARS-CoV-2 in pre-clinical animal models. In repeat trials, the aptamers developed by Dr. Yingfu Li demonstrated similar efficacy against SARS-CoV-2 when benchmarked against a commercial monoclonal antibody. The Company further announced the amendment of its license agreement with McMaster University dated June 11, 2021, to broaden the scope of the worldwide exclusive license to apply to all aptamer and DNAzyme uses, including, but not limited to, diagnostics, therapeutics, and as neutralization agents, and not limited to SARS-CoV-2.
On July 27, 2023, the Company announced a new aptamer technology platform with McMaster University that significantly increases the binding affinity of aptamers. The increased binding affinity enhances the limits of detection for aptamer-based diagnostics and could lead to the successful adaptation of these same aptamers for new therapeutic and prophylactic treatments. Provisional patent applications were filed with the United States Patent and Trademark Office which have since resulted in the filing of three international patent applications filed with the World Intellectual Property Office as of March 31, 2025.
On October 10, 2023, the Company announced further pre-clinical testing results of the aptamer-based platform technology by the Dr. Matthew Miller Lab. Further preclinical testing was completed supporting the aptamer as a lead therapeutic target. An in vivo preclinical longevity of protection study was conducted to assess the safety and efficacy of the aptamer-based treatment over a period of 24 hours and demonstrated that the aptamer provided 24 hours of neutralizing protection against SARS-CoV-2. A subsequent study was conducted to determine the minimal effective dose of the aptamer required to protect against a lethal challenge of SARS-CoV-2.
On November 15, 2023, the Company announced the development of a significant upgrade to its aptamer platform improving the binding affinity of the universal COVID-19 aptamer from 300 to over 500 times, compared to the base aptamer. The improved platform also solved key challenges for manufacturing and these High-Binding Affinity ("HBA") aptamers are now produced with approximately a 95% yield.
On November 29, 2023, the Company announced the successful testing of its COVID-19 HBA aptamer against the Omicron XBB 1.5 variant (Omicron) by the Miller Lab at McMaster University in the latest pre-clinical study. The performance of the COVID-19 HBA aptamer was comparable to the performance of monoclonal antibodies, according to the Miller Lab, as it provided clinical protection against infection with the Omicron XBB 1.5 variant. The Company will now begin to explore partnership opportunities in the pharmaceutical space as its aptamer platform may offer a fast, economical, and novel approach to the development of new therapeutics for clinically relevant biological markers.
On December 13, 2023, the Company announced the launch of Triera as a wholly owned subsidiary for its aptamer platform technology. Triera now owns the exclusive, global licensing rights for all aptamer-based technologies from the collaboration with McMaster University.
On January 30, 2024, the Company announced the positive therapeutic results achieved by Triera for C19HBA aptamer as a potential therapeutic. In the most recent trial completed in January 2024 by the Miller lab at McMaster University, C19HBA was tested for its therapeutic potential. The treatment that featured C19HBA demonstrated improved therapeutic benefit over no treatment of the LMA therapeutic. The full results of this preclinical investigation are pending publication in a peer reviewed journal.
On March 25, 2024, the Company announced that Triera completed testing demonstrating that its C19HBA SARS-CoV-2 universal aptamer built on the proprietary high-binding affinity aptamer platform has shown a promising safety and toxicity profile in preclinical testing.
On May 6, 2024, the Company announced that Triera has prioritized the development of a prophylaxis and therapeutic for highly pathogenic avian influenza. The mechanism of neutralizing the H5N1 virus is comparable to the mechanism used by C19HBA against the SARS-CoV-2 virus. More specifically, the aptamer is believed to bind to and neutralize multiple subtypes of the HA surface protein (e.g., H1, H2, H5, etc.), preventing the virus from entering healthy cells and spreading infection.
On November 6, 2024, the Company announced that Triera had been awarded a $1,100,000 Government of Canada contract to test multivalent aptamer technology for the rapid drug discovery of therapeutics or prophylactics of highly pathogenic avian influenza ("HPAI") A(H5N1). On April 23, 2025, the Company announced that it has completed the first phase of the contract by delivering a lead candidate countermeasure for A(H5N1) and has now moved to the testing phase of the project. The contract began in November 2024 to develop both a prophylactic and therapeutic for A(H5N1) using a multivalent aptamer. Most activities for the lead countermeasure candidate development were performed through collaboration with the Li Lab at McMaster University.
On September 18, 2025, the Company announced that it had completed the first in vivo tests of the lead candidate countermeasure for seasonal influenza (H1N1) as part of the Innovative Solutions Canada Testing Stream. The Company announced that the aptamer countermeasure had been selected and optimized for broad recognition of influenza hemagglutinin proteins with strong binding affinities for H1, H5, H2 and H3, and had shown strong neutralization against H1N1 and H5N1 when tested in vitro. In the first in vivo test, animals were given a prophylactic does of either vehicle or the aptamer lead candidate two hours prior to a lethal challenge with A(H1N1)pdm09. The Company announced that animals given the aptamer lead candidate prophylactically had substantially improved clinical scores, five times greater survival rates, 80% less weight loss five days post-infection, and decreased recovery times compared to the control group.
On March 25, 2026, the Company announced that Triera plans to begin offering contract research organization services for custom aptamer discovery, biosensor enablement and machine-learning classification support to pharmaceutical, biotechnology and diagnostics organizations in Canada, the United States, Europe and other markets. The Company announced that Triera's model integrates custom aptamer discovery and optimization, biosensor engineering and integration support, and optional machine-learning classification systems for signal interpretation. The Company further announced that Triera's current catalogue contains aptamers for clinically and commercially significant targets including influenza A, SARS-CoV-2, vascular endothelial growth factor, syphilis, norovirus and Clostridioides difficile, among others under development. Client engagements are expected to be funded by the client, while Triera retains ownership of all underlying intellectual property.
Diesel Fuel Additive
The Company is working to develop a stable graphene-based diesel fuel additive to improve combustion, increase burn rate, reduce greenhouse gas emissions and to improve fuel economy of diesel fuels. Initial testing has shown an increase in the performance of diesel fuel. The Company is working to improve on these early results through optimization work. The Company has filed a provisional patent application for its graphene-based fuel additive technology.
The Company is developing a process to functionalize GO to produce a stable dispersion in diesel fuel. The fuel additive was tested by Conestoga College in a Gunt 159 single-cylinder test engine, which yielded an improvement in fuel economy of over 10% under certain rpm.
The Company completed its work with Dr. Sina Kheirkah at the University of British Columbia-Okanagan Campus ("UBCO") to test GO-doped fuel as part of an NSERC alliance project for $110,500 cash contribution and a total budget of $311,500 over two years. The project focused on measuring the combustion of doped fuel in both droplet and spray combustion. The Company has spent approximately $98,900 on this research and development project.
The Company intends to continue to develop fuel additives internally to optimize the concentration of the additive and to assess the performance of the burn rate, fuel economy and emission of doped diesel fuels.
Icephobic Coating
The Company is also working to develop a new, patent-pending, carbon-based, nanotechnology-enhanced coating designed to prevent or reduce ice accretion for aviation (including drone) and wind energy applications.
The project which has involved the use of dispersion technology to homogeneously mix graphene-based materials in an elastomer. The Company has also conducted testing at the National Research Council of Canada's ("NRC") Altitude Icing Wind Tunnel in Ottawa and prepared graphene-enhanced elastomer material and coated coupons for testing.
The Company disclosed on February 28, 2022, that the icephobic coatings were undergoing full flight trials on a specially equipped research aircraft under real-world ice-forming weather conditions. On March 14, 2022, the Company announced the results of three rounds of testing of its icephobic coating, including laboratory tests, real-world flights and applications related to drone operations in adverse weather. In real-world testing, the Company reported that video footage of its icephobic coating on test pieces attached to a research aircraft undergoing flight trials targeting adverse weather environments has shown positive results and demonstrated that, under significant icing conditions, the coatings provide an effective de-icing and anti-icing solution. Drone testing showed that propellers coated with the icephobic material can maintain higher thrust, when compared to a non-coated propeller, due to the shedding of ice that forms on the blades that would otherwise degrade the drone's ability to maintain stable flight. Accelerated ageing testing has been completed by exposing samples coated with icephobic elastomer to UV weathering for 1,000 hours, which approximates two years' worth of sun damage in typical Canadian weather. These samples were then tested in an icing wind tunnel under dynamic conditions and demonstrated significant retention of their icephobicity.
On August 2, 2022, the Company filed a full patent application with the World Intellectual Property Office, for Nanomaterial-Enhanced Elastomer for Passive Ice Accretion Prevention. The Company disclosed this on September 19, 2022. The patent application has since been filed by the Company in Canada and Europe.
On September 19, 2022, the Company announced the successful completion of sand erosion testing at the NRC and rain erosion testing at the Anti-icing Materials International Laboratory in Quebec which demonstrated the icephobic material's durability in adverse conditions for both wind turbine and drone industries.
On May 4, 2023, the Company announced successful drone testing, where thrust was maintained under calibrated icing conditions of freezing drizzle and freezing rain in an outdoor, real-world environment. The drone with the Company's icephobic coating applied to the propeller blades hovered under the outdoor icing rig and, on all tests conducted, maintained flight until the end of the battery life of the drone. The same drone with uncoated propeller blades rapidly lost the ability to maintain flight. These tests are expected to satisfy the Transport Canada requirement for anti-icing equipment. The current regulations for civilian drone operations in Canada as per Transport Canada regulations state that no pilot shall operate a remotely piloted aircraft system when icing conditions are observed, are reported to exist or are likely to be encountered along the route of flight unless the aircraft is equipped with de-icing or anti-icing equipment and equipment designed to detect icing.
The Company is currently consulting with Transport Canada to propose the Company's passive ice accretion technology as a potential means of compliance to satisfy the requirements as well as working to find a collaborator that could provide equipment designed to detect icing.
On May 30, 2023, the Company announced a collaboration with Pattern Energy Group LP to optimize, test and validate the Company's icephobic coating for the wind turbine industry. The partnership is being supported financially by both the Natural Sciences and Engineering Research Council of Canada and PRIMA Quebec - Advanced Materials Moving Forward.
The Company continues to consider and seek partners to commercialize this technology, including drone companies and companies specializing in elastomer production. Because the NRC has been testing a variety of coatings, the Company has been able to participate in the NRC testing process thus far at no cost to the Company. However, the Company anticipates additional testing and development to cost approximately $150,000.
Fire-Retardant Additive
The Company announced on March 28, 2022, that it had filed a provisional patent with the United States Patent and Trademark Office for an innovative Graphene Oxide-Metal-Organic Framework ("GO-MOF") compound for use in fire retardant products. The provisional patent application has since been filed as an international (PCT) patent application with the World Intellectual Property Office on March 27, 2023. Management of the Company considers the manufacturing of the GO-MOF compound as relatively easily scalable and efficient, due to the patent-pending facile synthesis process. The Company believes the fire-retardant GO-MOF additive could potentially be placed in a variety of coating products, such as latex, epoxies or included in polymers. When integrated into a polymer, it could potentially create a fire-resistant plastic that could be used in electric vehicles, providing a fire-resistant non-metal casing for the batteries. Management currently expects that GO-MOF production could be achieved on the existing ZenGUARD™ industrial scale production facility with minimal additional capital expense.
The Company has spent approximately $129,300 on this research and development project, and intends to conduct further testing, which it currently estimates will cost approximately $12,000. In the year ended March 31, 2026, optimizations to the formulations were performed at the Company's lab prior to a testing program with a commercial partner. Testing and optimization work remains ongoing as of March 31, 2026.
On November 5, 2025, the Company announced the development of a novel graphite gel-based fire-retardant ("GBFR") product that combines rapid gelation and intumescent components to rapidly protect homes from wildfires. The Company announced that Altek Advanced Materials Inc. (“Altek”) had been granted conditional, exclusive rights to commercialize the technology in the United States pursuant to a development and collaboration agreement between the Company and Altek dated November 4, 2025. The Company announced that Altek will seek to commercialize the GBFR in the United States under the trademarked name GraphGelTM. The Company further announced that independent ASTM E84 testing completed by Intertek on ¼" Oriented Strand Board sheets coated with GraphGelTM achieved Class A fire ratings, and that Altek had sponsored a live demonstration of the coating in Santa Clarita, California, where the coating protected coated surfaces when exposed to fire engagement. Pursuant to the agreement, the Company granted an exclusive license to Altek to develop, manufacture and commercialize the GBFR and a 5% royalty on Altek's net sales derived from the GBFR, provided that such license will convert to a non-exclusive license in the event that annual royalty payments to the Company are less than $1,000,000 annually following a ramp-up period of eighteen months. The Company will retain ownership of the GBFR intellectual property, and the term of the agreement is five years, with a renewal option for an additional five years.
Battery Technology
The Company has been collaborating with Dr. Michael Pope at the University of Waterloo since 2017, developing battery technology to improve anode performance. One highly studied area for lithium-ion battery development is to improve the anode material. Currently, electric vehicle anodes are composed of graphite, which has a limited theoretical specific capacity of ~372 mAhg-1. Silicon has attracted significant attention as a replacement material, mainly due to its high specific capacity of 4,200 mAhg-1, but also due to its low working potential, low price and availability. However, silicon has an enormous volumetric fluctuation (greater than 300% in all dimensions) when charging and discharging. This feature is the root cause behind the issues of poor cycle lifetime, irreversible capacity loss, and destruction and reformation of the solid electrolyte interface.
Using silicon in the anode material, Dr. Pope has attempted to address these issues and has created a patent-pending graphene-wrapped silicon anode material. On February 18, 2022, the Company announced the filing of a provisional patent with the United States Patent and Trademark Office relating to a graphene-wrapped silicon anode material. Since April, Dr. Pope's team has optimized the anode material, which now has a specific capacity of over 1,000 mAh/g and retains over 80% of its capacity over 320 charge-discharge cycles. The specific capacity of this material is a significant improvement over common graphite anodes; however, the cycle life still requires improvement compared to typical electric vehicle batteries, which lose about 4% capacity over 1,000 charge-discharge cycles. The Company intends to continue to work with Dr. Pope's team to develop this technology with the goal of improving performance to meet industry requirements. The Company filed a patent application under the Patent Cooperation Treaty on May 17, 2022.
On October 28, 2022, the Company announced the commencement of a four-year, $1.6 million research project in collaboration with Professors Mohini Sain and Ning Yan from the University of Toronto and Ford Powertrain Engineering Research and Development Centre. Funding for the project includes $1.2 million from the Mitacs Accelerate program. The project seeks to assess novel concepts for the purpose of inventing multifunctional materials to be used in automotive battery components including anode, cathode, electrolyte, and separator. The Company will be working in tandem with University of Toronto researchers providing and testing advanced graphene materials including the Company's patent-pending anode material developed by Dr. Michael Pope.
On August 8, 2024, the Company announced preliminary battery testing results and the commencement of a three-year $441,000 project in collaboration with Professors Mohini Sain and Ning Yan from the University of Toronto. Funding for the project is provided by a NSERC Mission Alliance Grant. The Company announced that promising preliminary results have already been achieved from this research with pouch cell batteries featuring engineered Albany graphite by the University of Toronto with a minimum 17% increase in capacity over batteries using commercial grade anode material. The project seeks to characterize and optimize the Albany graphite by exploring various pathways to purify, increase capacity, enhance cycle life, and engineer the graphite to meet or exceed commercial standards for anode material in the EV market. The results achieved are preliminary and will be verified through further testing or at an independent third-party facility.
Corrosion Protection
On February 8, 2023, the Company announced the development of ZenARMOR™, a novel corrosion protection technology based on functionalized GO, for potential use in naval and marine infrastructure, bridges, buildings, pipelines, and other industries. ZenARMOR™ could be produced in the ZenGUARD™ facility. Third-party testing on ZenARMOR™ yielded excellent corrosion resistance with no blisters or other signs of corrosion after 1,500 hours of ASTM B-117 Salt Spray Test with ZenARMOR™, and ZenARMOR™ qualified for the Innovative Solutions Canada ("ISC") Testing Stream - Military Call for Prototypes. The Company has filed an International Patent Application on this corrosion protection technology, as well as a trademark for ZenARMOR™.
On October 4, 2023, the Company announced that it had prepared and shipped the first corrosion paint samples to the NRC for the first round of testing as part of the ISC - Testing Stream - Military Call for Proposals. NRC's Aerospace Research Centre's Aerospace Manufacturing Technologies Centre tested the Company's nano pigment in military-grade chromate-free paints for evaluation in its first of three rounds of testing. ZenARMOR™ was evaluated in commercial non-chromate aviation paint systems developed by PPG Industries Inc. and Akzo Nobel N.V. Three rounds of corrosion testing were completed from September 2023 to July 2024. The testing followed ASTM B117 (salt spray) and ASTM D5894 (cyclical corrosion) standards. The Company announced on April 16, 2025, that the tests were successful in demonstrating the effectiveness of ZenARMOR™ nano-pigments in inhibiting corrosion of the aluminum alloy AA2024-T3. Additionally, the Company announced that it has begun a collaboration with Jazeera Paints, headquartered in Riyadh, Saudi Arabia to evaluate ZenARMOR™ in their existing product lines.
Other Use-Cases for ZenGUARD™
Other
On December 12, 2024, the Company announced that it had entered into a Memorandum of Understanding ("MOU") with Al-Ramez International Group ("Al-Ramez"), through Saudi Excellence Holding Company, establishing a framework to develop a strategic partnership to drive innovation and commercialization in advanced technologies, across the Kingdom of Saudi Arabia ("KSA") and the Middle East and North Africa ("MENA") regions. The MOU outlines a collaborative framework pursuant to which the Company intends to contribute intellectual property, product licensing, and research and development expertise, which Al-Ramez intends to provide marketing support, investor relations, financing, and access to the KSA and MENA markets. Together, the parties aim to achieve several key objectives, including developing a graphene production facility in the KSA, to focus on the distribution of ZenGUARD™ technologies in the KSA and across the MENA region, support local research and production initiatives by advancing and commercializing the Company's other technologies including its aptamer platform, and sourcing financing to further develop the Company's various projects. The Company also announced that it had been accepted into the World Trade Centre Toronto's Trade Accelerator Program (TAP)/Life Sciences Commercialization for Global Success.
The Company is also working with a number of research institutions developing processes to synthesize graphene, GO and graphene quantum dots, along with other possible applications for graphene-based materials. Potential markets for graphene-based materials include composites (e.g., concrete, rubber, plastic polymers, and ceramics), sensors, water purification and filtration, coatings and solid-state lubricants, silicon-graphene and graphene aerogel anode material for next-generation batteries along with aerospace applications.
The Company has other research projects commenced or contemplated including applications in aluminum alloys, corrosion protection, battery technology, conductive polymers, and others. The Company will report on these if and when it is appropriate to do so.
Albany Graphite Project
The Company owns 100% of the issued and outstanding shares of AGC which owns the Albany Graphite Project in Northern Ontario, Canada. The unusual nature of the formation of graphite in the Albany Graphite Project and its potential chemical and economic significance motivated additional exploration drilling from 2011 to 2013. The current claims require a total of $197,200 worth of assessment work per year to keep them in good standing and the Company has a total credit of approximately $7.1 million in available assessment work credits in reserve.
On May 19, 2023, the Company transferred to AGC the ownership of the Albany Graphite Project, including the mining claims and all related chattel, drill core, and applicable contracts, in consideration for the issuance by AGC to the Company of 59,999,900 common shares of AGC.
During the year ended March 31, 2026, approximately $699,800 (2025 - $183,214) was spent by AGC on the Albany Graphite Project including professional fees and geologist wages. These costs have been capitalized in accordance with the Company's accounting policy on Exploration and Evaluation Assets. Testing costs incurred under the Critical Minerals Innovation Fund ("CMIF") have been expensed and included in research and development costs. During the financial year ended March 31, 2026, approximately $1,068,000 was spent by AGC on the CMIF program.
On July 17, 2024, the Company announced that AGC had achieved a five nines purity of 99.99915% for a graphite sample from the Albany Graphite Project, as part of AGC's investigation into whether Albany graphite has the required characteristics and performance to serve as an ideal anode material for the electric vehicle market and to meet the stringent purity requirements for nuclear-grade graphite applications. This test work initially focused on the purification of Albany flotation concentrate to produce a consistent high-purity (>99.95%) material. A sample of the homogenized bulk flotation concentrate produced by SGS Canada Inc., in the 2017 flotation pilot plant campaign was upgraded from approximately 85% to >99% using a simple hydrometallurgical process. A 100g sample of the >99% feed was subsequently thermally purified in a fixed-bed furnace at a temperature of 2,700C for five minutes in an argon atmosphere. A 10g sample of the purified material was then shipped to Eurofins EAG Laboratories for a full 72 element GDMS analysis. The concentrations of all elements above the detection limits (22 of the 72 total) were summed to yield the total concentration of the detectable impurity elements that remained in the purified sample at 8.48 ppm wt. or 0.00085% wt. The boron concentration in the sample was 0.42 ppm wt. The Company indicated that the purified material would be evaluated for its suitability for both the lithium-ion battery and nuclear markets, with the nuclear-grade suitability results described below.
On January 8, 2025, the Company announced that AGC had achieved a preliminary five-nines purity of 99.9991% directly from a second larger Albany graphite deposit flotation concentrate sample utilizing an operational pilot-scale fluidized bed reactor ("FBR"). The second sample of the homogenized bulk flotation concentrate produced by SGS Canada Inc. during the 2017 flotation pilot plant campaign was upgraded from approximately 85% total graphitic carbon ("TGC") to over 96% TGC using a small pilot hydrometallurgical process with standard metallurgical equipment. A 100g sample of >96% TGC feed was then thermally purified in a fixed-bed furnace under the same conditions as before (2,700°C for five minutes in an argon atmosphere). A 10g sample of the purified material was subsequently shipped to Eurofins EAG Laboratories for a full 72 element GDMS analysis. The concentrations of all elements above the detection limits (25 of the 72 total) were summed to yield the total concentration of the detectable impurity elements that remained in the purified sample at 11.61 ppm wt. or 0.00116 % wt. yielding a purity of 99.99884 % wt. The boron concentration in the sample was 1.8 ppm wt. Additionally, the Company contracted a highly reputable North American manufacturing company specializing in industrial graphite and carbon to explore the direct purification of Albany flotation concentrate (~85% TGC) using its proprietary continuous processing equipment. The Company supplied a 1kg sample of the homogenized bulk flotation concentrate which was characterized, aggregated into 3-D particles and then run in a pilot-scale FBR. The feed material was thermally purified utilizing their proprietary process. A platinum crucible LOI analysis conducted at 950°C on a sample of the purified material indicated an ash content of 0.0009 % wt., corresponding to a purity of 99.9991 % wt. Notably, the manufacturing company reported that the Albany material was easily purified to an ultra-high purity level without the use of chlorine gas or any other halogen gases that are commonly used for graphite purification when 5N nuclear purity levels need to be achieved. On February 14, 2025, the Company reported that as part of the characterization process, an elemental analysis (59 elements) was performed to identify the impurity elements. In its report, the manufacturing company noted that the feed material contained concentrations of rare earth elements ("REE") and other potential elements of value that could be recovered as part of the thermal purification process. Impurity elements, including the REEs, that were removed from the graphite during the purification process were collected and concentrated in a scrubber that handles all the FBR exhaust products. The Company intends to continue to investigate the REE potential of the Albany graphite deposit and send samples of unprocessed mineralization and tailings material for additional elemental analyses to verify their REE content and determine if there is any consistency within the two pipes, which REEs are enriched, and also provide an estimate of their average concentrations. Additional detailed sampling and verification would include analyzing the pulps and core from representative drill holes and the insertion of certified reference materials into the sample stream.
On September 2, 2025, the Company announced that AGC had been awarded a grant of $500,000 from the Ontario Government's Critical Minerals Innovation Fund ("CMIF") for its Albany Graphite Purification and Anode material Development project, to which AGC will contribute $314,500 and for which Natural Resources Canada ("NRCan") will provide $200,000 of in-kind support. The project entails the production of approximately 5 to 6 tonnes of flotation concentrate of approximately 85% from the 110-tonne bulk sample collected in 2019, purification testwork via NRCan's Canadian fluidized bed reactor ("FBR"), and suitability testing of ultra-high purity Albany graphite for lithium-ion battery (including anode and cathode additive) and nuclear applications. On September 22, 2025, the Company announced that AGC, in collaboration with American Energy Technologies Co. ("AETC"), had successfully purified a second batch of Albany graphite deposit flotation concentrate to an ultra-high 5N purity level of 99.9992 wt.% C, yielding a calculated Equivalent Boron Concentration ("EBC") of 2.60 ppm, which is below the 3 ppm specification required by the nuclear industry. On October 6, 2025, the Company announced that AGC, in collaboration with AETC, had completed additional material characterization tests confirming that Albany graphite meets the specified particle size distribution and D50 required for nuclear applications, demonstrated high compact density and low elastic expansion after compression, exhibited low electrical resistivity indicating a high degree of graphitization, and met or exceeded industry standards for frictional performance. On December 17, 2025, the Company announced that AGC had achieved near theoretical anode performance in independent lithium-ion battery testing using ultra-high purity Albany graphite, with carbon-coated, spheroidized Albany graphite delivering an average reversible capacity of approximately 367 mAh/g in industry-standard coin cell tests, approximately 1.3% below the theoretical maximum for natural graphite, with strong cycling stability. On January 5, 2026, the Company announced that AGC had received final, positive results indicating that its ultra-high purity Albany graphite meets the threshold for applications in a range of high-return markets, including nuclear energy, defense and national security infrastructure, advanced aerospace and hypersonic, and premium lithium-ion batteries, with independent laboratory testing confirming that graphite bricks made with Albany material met the key benchmarks currently used for nuclear-grade graphite blocks, including strength, density, electrical performance and extremely low impurity levels.
Corporate Finance and Administrative Developments
Effective May 1, 2024, Dr. Dube resigned as Chief Operating Officer of the Company.
On May 3, 2024, Brian Bosse resigned as director of the Company and was appointed to the Company's advisory board. The Company granted Mr. Bosse stock options to purchase 40,000 common shares of the Company at a price of $1.42 per common share for a term of three years.
On August 14, 2024, the Company announced a normal course issuer bid for up to 5,084,319 common shares of the Company over a period of one year, being approximately 5% of the Company's issued and outstanding common shares, with up to 2,033,727 common shares of the Company purchasable over any 30-day period, being 2% of the Company's issued and outstanding common shares. The bid commenced on August 16, 2024expired on August 15, 2025. During the term of the bid, the Company purchased Nil common shares for cancellation.
On August 19, 2024, the Company closed a non-brokered private placement of units (the "Units") through the issuance of 2,361,500 Units at a price of $1.30 per Unit for gross proceeds of $3,068,950. Net proceeds of the offering will be used for working capital and general corporate purposes. Each Unit consists of one common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder thereof to purchase one common share at a price of $3.00 for a period of 24 months from the closing date of the offering. In connection with the closing of the offering, the Company paid certain eligible persons a cash commission of $29,499 in the aggregate. All securities issued in connection with the offering were subject to a hold period of four months plus a day from the date of issuance and the resale rules of applicable securities legislation.
On March 3, 2025, the Company announced an at-the-market offering in the United States, pursuant to which the Company proposes to issue and sell such number of common shares through an "at-the-market offering" as defined in Rule 415(a)(4) promulgated under the U.S. Securities Act of 1933, as amended, made directly on Nasdaq up to gross sales proceeds of US$30,000,000, unless terminated prior to such time. Sales of common shares, if any, will be made at or related to then prevailing market prices and as a result, prices may vary. Any common shares issued will be pursuant to a prospectus supplement dated March 3, 2025 to the base prospectus included in the Company's existing U.S. registration statement on form F-3 (File No. 333-278886) dated April 23, 2024, as amended on April 24, 2024, and April 30, 2024, and declared effective by the United States Securities and Exchange Commission on May 3, 2024. During the year ended March 31, 2026, the Company issued 650,798 (2025 - Nil) Common Shares for gross proceeds of $702,837 (2025 - $Nil) through an at-the-market offering.
On March 21, 2025, the Company announced that the Canada Revenue Agency ("CRA") had completed an audit of the Company's 2018 and 2019 renunciations of Canadian exploration expenses ("CEE") in favour of subscribers of the private placements of flow-through common shares which closed on December 21, 2018, and December 20, 2019 for aggregate gross proceeds of $4,210,000 (the "Flow-Through Financings"). On February 25, 2025, the Company received a Notice of Reassessment from CRA in respect of its 2018 financial year resulting in a reclassification of approximately $507,000 (16.895%) of the amounts renounced on the basis that such amounts did not meet the definition of CEEs, as defined for income tax purposes., and Part XII.6 tax payable under section 211.91 of the Income Tax Act, related to form T101 was assessed for $59,693. On October 8, 2025, the Company received a Notice of Reassessment from CRA in respect of its 2019 financial year resulting in a reclassification of approximately $199,000 (16.467%) of the amounts renounced on the same basis, and Part XII.6 tax related to form T101 was assessed for $22,481.89. Pursuant to the terms of the subscription and renunciation agreements (the "Subscription Agreements") entered into by the Company and the subscribers in connection with the Flow-Through Financings, the Company agreed to indemnify the subscribers for tax attributable to disallowed renunciations of CEEs. The maximum aggregate quantum of the Company's liability with respect to this indemnification obligation from the Flow-Through Financings is $427,000.
On April 9, 2025, the Company announced that it had closed a non-brokered private placement of 2,000 debenture units (the "Debenture Units") through the issuance of 2,000 Debenture Units for gross proceeds of $2,000,000. Each Debenture Unit consists of (i) $1,000 principal amount of 5% secured convertible debentures of the Company (each a "Convertible Debenture"); and (ii) 454 warrants (the "Warrants") to purchase common shares in the capital of the Company (the "Common Shares"). Each Convertible Debenture will mature on April 9, 2028, (the "Maturity Date") and bears interest at a rate of 5% per annum payable as a balloon payment on the Maturity Date. Each Convertible Debenture is convertible at the option of the holder, in whole or in part, into Common Shares, at any time prior to the Maturity Date at a conversion price of $2.20 per Common Shares (the "Conversion Price") at any time after the second anniversary of closing and prior to the Maturity Date in the event that the volume weighted average trading price of the Common Shares on the TSX Venture Exchange (the "TSXV") for the preceding 30 business days exceeds $4.40. The Convertible Debentures are secured by the Company's interest in the 521 mining claims held by the Company's subsidiary Albany Graphite Corp., with a first ranking above all other creditors or loans by the Company. 908,000 Warrants were issued pursuant to the Offering, each entitling the holder to purchase one Common Share at the Conversion Price until the Maturity Date. The Warrants will only vest and be exercisable: (i) in the event, and from the date, that the Company completes a sale or otherwise transfers all of its rights, title and interests in the Secured Assets to a third party; and (ii) in such number equal to the result of dividing the outstanding principal amount of Convertible Debentures held by the holder at the time of exercise by the Conversion Price.
On April 17, 2025, the Company announced that it had entered into an agreement of purchase and sale dated April 15, 2025 for the sale of its property located at 24 Corporate Court in Guelph, ON (the "Property") which houses the Company's corporate office and laboratory space. On May 15, 2025, the Company announced the completed sale for $2,500,000 and will lease back the property from the purchaser until January 31, 2026.
On August 27, 2025, the Company announced that it had received a written notification from Nasdaq on August 26, 2025, 2025 that the Company is not in compliance with Nasdaq Listing Rule 5550(a)(2), as the minimum bid price of the Company's common shares had been below US$1.00 per share for 31 consecutive business days. The notification had no immediate effect on the listing or trading of the Company's common shares on the Nasdaq Capital Market under the symbol "ZTEK". In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided an initial period of 180 calendar days, or until February 23, 2026, in which to regain compliance with the minimum bid price requirement, being a closing bid price of at least US$1.00 per share for a minimum of ten consecutive business days. On February 25, 2026, the Company announced that, following the expiration of the initial 180 calendar day period on February 23, 2026, it had been granted a further 180 calendar day extension from Nasdaq, until August 24, 2026, in which to regain compliance with the minimum bid price requirement. The extension has no immediate effect on the listing or trading of the Company's common shares, which will continue to trade on Nasdaq under the symbol "ZTEK". See “Risk Factors – Share Price Fluctuations” below.
On September 3, 2025, the Company announced that Greg Fenton had resigned as Chief Executive Officer and as a member of the board of directors, effective immediately. The Company also announced that Wendy Ford, the Company's Chief Financial Officer, had been appointed interim Chief Financial Officer and would continue to act as Chief Financial Officer. The Company further announced that Mr. Fenton would be appointed to the Company's advisory board, where he will continue to serve out the remainder of his consulting agreement with the Company and advise and support the board of directors.
In connection with the foregoing, the Company announced that it had entered into a non-arm's length, binding letter of intent with Altek, a company of which Greg Fenton owned more than a 50% beneficial equity interest, effective September 3, 2025 to negotiate one or more non-exclusive licensing agreements relating to the Company's various technologies, including ZenGUARD™, in order to accelerate the Company's efforts and opportunities for commercialization in the United States. The letter of intent provides for an initial licensing term for ZenGUARD™of five years, with an option to renew the term for an additional five years. The letter of intent also includes royalties of between 5% and 8% of net sales of ZenGUARD™ or ZenGUARD™ products based on certain net sales thresholds. Altek will be responsible for manufacturing and commercializing the products in the United States, and the Company will retain ownership of all of its intellectual property.
On September 3, 2025, the Company announced that Ilse Treurnicht had resigned from the board of directors effective immediately and had agreed to serve on the Company's advisory board and continue to support the Company. The Company also announced that John Snisarenko had been appointed as Secretary of the Company and as Chair of the Company's Corporate Governance, Compensation and Nominating Committee, positions that were previously held by Ms. Treurnicht. In addition, the Company announced that Lisa Sim had decided not to stand for election as a director at the upcoming annual and special meeting of shareholders of the Company and would be appointed to the Company's advisory board after such meeting.
On September 10, 2025, the Company announced that, further to its September 3, 2025 news release, it had updated the slate of director nominees for the upcoming annual general and special meeting of shareholders to be held on September 25, 2025. The Company announced that the nominees would consist of four directors, all of whom are independent, being Eric Wallman, John Snisarenko, Matt Fontes and Pete Gettinby.
On October 22, 2025, the company announced that it had closed a non-brokered private placement of units through the issuance of 2,338,893 units at a price of $1.06 per unit for gross proceeds of $2,479,227. Each unit consisted of one common share, one-half of one common share purchase warrant exercisable at a price of $1.50 until October 22, 2027, and one-half of one common share purchase warrant exercisable at a price of $2.00 until October 22, 2028. In connection with the closing of the offering, the Company paid certain eligible persons aggregate cash finder fees of $35,429.33 and issued an aggregate of finder warrants entitling the holders thereof to purchase an aggregate of 33,424 units at a price of $1.06 per unit until October 22, 2027. Proceeds of the offering will be used for general and administrative corporate purposes.
On November 25, 2025, the Company announced the appointment of Mohammed Jiwan as Chief Executive Officer and a director of the Company, effective December 1, 2025. The Company also announced that Wendy Ford, interim Chief Executive Officer and Chief Financial Officer, would continue as Chief Financial Officer.
On January 29, 2026, the Company announced the departure of its Chief Science Officer, Colin van der Kuur, and the responsibilities of the Chief Science Officer role had been redistributed across the existing technical leadership team.
Subsequent Events
On April 1, 2026, the Company announced that it had engaged ICP Securities Inc. ("ICP") to provide automated market-making services in compliance with the policies and guidelines of the TSXV and other applicable legislation, subject to TSXV approval. The agreement has a start date of April 1, 2026, an initial term of four months, and automatically renews for subsequent one-month terms unless terminated on at least 30 days' written notice prior to the end of the applicable term. ICP will be paid a monthly fee of $7,500, plus applicable taxes.
On April 9, 2026, the Company announced that AGC had engaged Micon International Limited ("Micon") to complete a new preliminary economic assessment National Instrument 43-101 technical report for the Albany Graphite Project, located near Hearst, Ontario. The Company announced that it expects the new preliminary economic assessment to be completed in the summer of 2026. Micon will prepare the new preliminary economic assessment as a scoping-level study supported by an updated Mineral Resource Estimate, and the study will evaluate a development case that considers the thermal purification process and current market conditions. The Company announced that, following completion of the preliminary economic assessment, it expects to use the results to define priority next steps for Albany, which may include advancing additional metallurgical work and product qualification, evaluating pilot-scale processing options, refining project execution and infrastructure concepts, and considering the appropriate pathway for further engineering studies.
On April 14, 2026, the Company announced that Triera had completed a Government of Canada contract through the Innovative Solutions Canada program. The Company announced that the project centred on the development of an aptamer-based asset for binding and deactivating H5N1, the influenza strain responsible for highly pathogenic avian influenza, and that selection of the aptamer at the centre of this asset was achieved in approximately seven weeks. The Company also announced that, based on the positive progress of the platform's development, Triera had executed an Ontario Centres of Innovation Collaborate 2 Commercialize agreement to fund the next phase of development focused on proprietary seasonal influenza treatment candidates. The Company announced that the total approved project budget is approximately $300,000, with OCI and the Company providing matched cash contributions, and that the program will be conducted in collaboration with the Li and Miller Laboratories at McMaster University.
On April 16, 2026, the Company announced that AGC had engaged AppEco Inc. ("AppEco"), an independent economic research and advisory firm, to complete a comprehensive market research and economic analysis study for the Albany Graphite Project. The Company announced that AppEco's work will include an independent price deck for graphite products by grade across nuclear, defense, battery and industrial end-markets, addressable demand quantification, supply-side competitive positioning, and co-product credit valuation of certain critical minerals potentially recoverable from the electrothermal FBR scrubber exhaust. The Company announced that AppEco will deliver an economic memo for each workstream, followed by a consolidated final report, and that the engagement is designed to provide independent market data to inform the new preliminary economic assessment being prepared by Micon.
On April 21, 2026, the Company announced that AGC had executed an agreement with American Energy Technologies Co. ("AETC") to manufacture certified graphite samples and deliver process engineering inputs for the preliminary economic assessment of the Albany Graphite Project being prepared by Micon. The Company announced that, with the execution of this agreement, all three independent workstreams feeding the Albany preliminary economic assessment are active, consisting of Micon on engineering and economics, AppEco on market pricing and demand, and AETC on process design and certified product. The Company further announced that approximately 78 kilograms of Albany flotation concentrate had been shipped from SGS Canada to AETC's facility and that AETC will manufacture 3 kg of 4N, 4 kg of 4N+ and 4 kg of 5N+ graphite directly from Albany flotation concentrate, with Certificates of Analysis to be issued for each grade. The Company also announced that AETC will develop a conceptual multi-phase scale-up design for a purification facility with a nameplate capacity of 30,000 metric tonnes per annum of Albany flotation concentrate feedstock, with process engineering deliverables targeted for completion in June 2026, consistent with Micon's timeline for completion of the preliminary economic assessment.
On April 28, 2026, the Company announced that AGC had engaged ERM Consultants Canada Ltd. ("ERM") to execute the 2026 environmental and social baseline program at the Albany Graphite Project. The Company announced that Constance Lake First Nation members will be integrated into every field campaign planned for the season, and that the program builds on baseline work initiated in 2019 with the same consultant. The Company announced that the program will define approximately twelve baseline programs by discipline and sequence field activities for the 2026 season, alongside the technical and commercial workstreams feeding the preliminary economic assessment targeted for completion in the summer of 2026.
On May 27, 2026, the Company announced the closing of a private placement for gross proceeds of $18,000,000. Pursuant to the offering, the Company sold 18,000,000 units at a price of $1.00 per unit, with Red Cloud Securities Inc. acting as sole agent and bookrunner. Each unit consists of one common share and one common share purchase warrant exercisable at a price of $1.50 until May 27, 2029. The Company announced that it intends to use the net proceeds of the offering for the development and derisking of the Albany Graphite Project, including completion of the new preliminary economic assessment, advancement of subsequent preliminary feasibility study work, and business development activities targeting small modular reactor developers, national defence end-users, and other high-intensity end-user markets for which Albany ultra-high-purity graphite is suited; the continued commercialization of the Company's ZenGUARDTM platform; payment obligations; and general working capital and corporate purposes. As consideration for its services, Red Cloud received a cash fee of $1,197,360 and was issued 1,197,360 non-transferable common share purchase warrants, each exercisable into one common share at the offering price until May 27, 2029.
Significant Acquisitions
There were no significant acquisitions completed by the Company during its most recently completed financial year for which disclosure would be required under Part 8 of National Instrument 51-102.
DESCRIPTION OF THE BUSINESS
General
Summary
In 2018, the Company began to focus resources on the research and development of graphene and related applications, which was supported by shareholders of the Company who voted in favour of significant Board changes and accordingly the assembly of an interdisciplinary team to augment key management personnel with expertise in business, marketing, and government relations.
The Company is now a Canadian intellectual property development and commercialization company advancing a portfolio of graphene-enabled and advanced material technologies across healthcare, clean air and next-generation materials. In January 2026, the Company announced a strategic reset under which it narrowed its focus to three core platforms - Albany Graphite, ZenGUARDTM and Triera - each to be managed against defined milestones, capital allocation criteria and a 24-month roadmap, with other non-core initiatives paused or being wound down to preserve capital and management focus. Since May 2018, the Company has raised over $65 million and has received more than $1 million in government grants to advance its research, collaborations and commercialization efforts.
To meet rapidly growing immediate demand for its proprietary antimicrobial compound, the Company began sourcing GO from third parties and is also testing third party graphite as a potential precursor material to produce graphene-based nanomaterials. Consequently, the Company's continued existence is no longer dependent upon the discovery of economically recoverable ore reserves, the ability of the Company to obtain the necessary financing to explore and develop potential ore reserves, or by way of entering into joint venture arrangements, future profitable production, or alternatively, upon the Company's ability to dispose of its interests on an advantageous basis.
Currently the principal markets targeted by the Company are PPE equipment manufacturers (and HVAC system manufacturers and suppliers (for the use of antimicrobial coated filters, pre and post-filters, high-efficiency particulate air (HEPA), etc.).
The Company is continuing to identify new markets and uses for its graphene-based antimicrobial coating.
The Company is working directly with PPE equipment and HVAC filter manufacturers and intends to ultimately supply the antimicrobial coating product directly to the manufacturers for use in their respective production lines, or as pre-coated materials/products that will be supplied to manufacturers (e.g., coated polypropylene (PP) or polyethylene terathalate (PET) spunbound nonwoven media to be used in the construction of a surgical mask, coated nitrile gloves or pre-coated HVAC filtration media). The Company is also currently discussing with other parties interested in representing the Company and/or distributing its products in other global markets (Europe, India, Australia, Asia, etc.). To date, most of the business opportunities that have been developed have been pursuant to inbound inquiries; however, once the production line to produce the antimicrobial coatings is operational, the Company intends to initiate an outbound marketing program.
Specialized Skill and Knowledge
The Company's research and development, and application/product development work involves Highly Qualified Personnel (PhD researchers, scientists, and engineers) and the Company has a highly skilled management team in place. The Company intends to add to its team and to hire and train additional staff as the Company's business transitions from research and product development to production, to work in the GO and antimicrobial coating production facilities, as may be required.
The Company believes that it has adequate personnel with the specialized skills and knowledge to successfully carry out the Company's business and operations. See "Risk Factors - Qualified Employees" for a discussion of the risks of losing such specialized skills and knowledge.
Competitive Conditions
The Company seeks to compete with other graphene and manufacturing companies, in highly competitive markets. The Company plans to provide functionalized graphene products to businesses, institutions, and governments within North America and internationally. The Company's competitive position is based on its increasing scientific knowledge and know-how, its intellectual property, possession of in-house laboratories, extension of in-house science via university partners, the growing productive capacity to serve large customers, and the optionality of future vertical integration represented by the Albany Graphite Project. The Company's management is not aware of any companies similarly positioned to serve like markets as the Company, although given the rapid progression of the graphene industry, the Company may face significant competition in the future (See "Risk Factors - Industry Competition").
New Products
The Company has begun commercializing ZenGUARD™ Enhanced Air Filters for use in HVAC systems. Furthermore, as detailed under the heading "Three Year History" above, the Company is undertaking multiple research and development initiatives, leveraging the Company's graphene nanotechnology, such as an icephobic coating, fire-retardant additive, and battery technology among others.
Components
The main components to produce the Company's antimicrobial compound are readily available and the Company has taken steps to secure GO from a third party in order to meet demand while the Company sets up its GO production facility, with the intention of using materials from the Albany Graphite Project; however, other graphite materials would be suitable as well.
Intangible Properties
The Company holds intangible property in various forms such as trademarks, pending patent applications, trade secrets and know-how, mining claims (held by AGC), laboratory reports, licensing agreements, scientific agreements, and customer lists. Specifically, the Company holds three active patent applications under the Patent Cooperation Treaty in the Company's name, for (i) graphene-silver nanocomposite uses as an antimicrobial coating agent, (ii) graphene-silver nanocomposite compositions and uses for treatment of infectious diseases, and (iii) the proprietary process for manufacturing ZenGUARDTM nanotechnology at industrial scale.
Additionally, the Company has an exclusive license to make, have made, use, lease, sell, have sold, export, import, or otherwise distribute the subject matter of another provisional patent application relating to the processes for the preparation of expanded graphite and exfoliated GO. Management anticipates that amongst the existing intangible properties the pending patent applications have the most potential value for the Company. (See "Risk Factors - Unpredictable Sales Cycles").
Cycles
The sales cycle for graphene-based products may range considerably from one to multiple years from the time a customer begins testing the Company's product until the time that they could be used in a commercial product. Timing of product introduction could vary significantly based on the target market. Additionally, any demand for the Company's products based in whole or in part on global health crises could materially change. (See "Risk Factors - Unpredictable Sales Cycles").
Economic Dependence
The Company has entered into a limited number of supply or sales agreements for the sale of its products. Until additional supply agreements are executed by the Company, the Company's revenues will be completely dependent on such agreements. If such agreements are terminated, or if less of the Company's product than anticipated is purchased pursuant to such agreements, this could have a material adverse impact on the Company's business, operations and results.
Environmental Protection
The Company is seeking to develop environmentally friendly processes and products and is currently working with its partners to create biodegradable/recyclable/reusable products that have a low carbon footprint. In addition, the Company is currently working with Prof. Aicheng Chen and his team at the University of Guelph to develop a scalable, low-cost, low-energy, and environmentally friendly process (chemically and electrochemically) to produce high-quality, few-layer GO at the Company's Guelph facility.
On September 28, 2020, the University of Guelph filed a provisional patent application directed to an electrochemical exfoliation process to produce GO from Albany Pure™ graphite, to which the Company holds an exclusive license.
AGC's current and future operations with respect to the Albany Graphite Project, including development activities carried out by AGC on its properties or areas in which it has an interest, are subject to laws and regulations governing exploration, development, tenure, productions, taxes, labour standards, occupational health, waste disposal, protection, and remediation of the environment, mine safety, toxic substances, and other matters. Environmental protection requirements did not have a material effect on the capital expenditures, earnings, or competitive position of the Company during its financial year ended March 31, 2026, and are not expected to have a material effect during the Company's financial year ending March 31, 2027.
Employees
As of the date of this AIF, the Company has 10 employees. Management expects headcount to grow as production volumes, scientific capacity and sales staff grow during upcoming fiscal years.
Foreign Operations
The Company has no meaningful foreign operations.
Other
The Company and its subsidiaries have not been subject to bankruptcies, receiverships, or similar proceedings, nor have there been any material reorganizations of the Company or any of its subsidiaries during the three most recently completed financial years or completed during or proposed for the current financial year. The Company does not have an investment policy, or lending and investment restrictions in place.
RISK FACTORS
The operations of the Company are speculative due to the high-risk nature of its business, which includes the development of certain intellectual property and the manufacturing of graphene related products, and which may include the future acquisition, financing, and development of the Albany Graphite Project. These risk factors could materially affect the Company's future operating results and could cause actual events to differ materially from those described in forward-looking information relating to the Company. Accordingly, any investment in securities of the Company is speculative and investors should not invest in securities of the Company unless they can afford to lose their entire investment.
The Company assesses and attempts to minimize the effects of these risks through careful management and planning of its operations and hiring qualified personnel but is subject to a number of limitations in managing risk resulting from its early stage of development. Below is a non-exhaustive summary of the principal risks and related uncertainties that may impact the Company. Such risk factors, as well as additional risks and uncertainties set out elsewhere in the Company's publicly filed documents, and additional risks and uncertainties not presently known to Company or that the Company currently deems immaterial, could have a material adverse effect on the Company's business, financial condition and results of operations or the trading price of the common shares.
Negative Operating Cash Flow
During the financial year ended March 31, 2026, the Company had negative operating cash flow because its revenues did not exceed its operating expenses. In addition, as a result of the Company's business plans for the development of its products, the Company expects cash flow from operations to be negative until revenues improve to offset its operating expenditures. The Company's cash flow from operations may be affected in the future by expenditures incurred by the Company to continue to develop its products. To the extent the Company has negative cash flow in any future period, the Company may be required to allocate funds to fund such negative cash flow from operating activities. In order to stay in business, in the absence of cash flow from operations, the Company will have to raise funding through financing activities. However, there is no certainty the Company will be able to raise funds at all or on terms acceptable to the Company in the event it needs to do so. Furthermore, additional funds raised by the Company through the issuance of equity or convertible debt securities would cause the Company's current shareholders to experience dilution. Such securities also may grant rights, preferences, or privileges senior to those of the Company's shareholders.
The Company does not have any contractual restrictions on its ability to incur debt and, accordingly, the Company could incur significant amounts of indebtedness to finance its operations. Any such indebtedness could contain restrictive covenants, which likely would restrict the Company's operations.
Uncertainties Relating to the Company's Business Plans
There is no assurance that broad successful commercial applications may be feasible for the Company. The Company is continuing to explore, develop, and test its current products and new products, and there can be no assurance that new uses of existing products or new products will be fully developed for commercial application, that test results will be successful, if completed at all, that any necessary permits or approvals required in order to market such products will be obtained by the Company, or that existing technology or products will become profitable. Furthermore, there is no assurance that the Company will complete any acquisitions or acquire any know-how or trade secrets to carry out certain of its future objectives. Should the Company fail to achieve any of the foregoing, this could have a material adverse impact on the business and planned business of the Company.
The Company's business is in part dependent on patents, trade secret and other intellectual property laws of Canada, and potentially foreign jurisdictions. The Company may be unable to prevent third parties from using its intellectual property without its authorization. Some of the Company's current or future technologies and trade secrets may not be covered by any patent or patent application, and the Company's issued and pending patents may not provide the Company with any competitive advantage and could be challenged by third parties.
The Company's inability to secure issuance of pending patent applications may limit its ability to protect the intellectual property rights these pending patent applications were intended to cover. The Company's competitors may attempt to design around its patents to avoid liability for infringement and, if successful, could adversely affect the Company's market share. Furthermore, the expiration of the Company's patents may lead to increased competition.
Additionally, the Company plans to construct facilities for some of its operations and business activities. There can be no assurance that locations will be secured on terms favourable to the Company or at all, that engineering plans will be completed or will be satisfactory for the intended business activities of the Company, that any required permitting will be obtained, that construction of such facilities will be completed, or that such facilities will ever become operational. If such facilities are not constructed, or do not become operational, or do not operate at the capacity required or anticipated, there could be a material adverse effect of the Company's planned business and operations.
Economic and Political Conditions
Worldwide financial and economic cycles or conditions are uncertain, and recovery from a business downturn or recession could be very slow and have a significant impact on the Company's business. The Company's business is sensitive to changes in economic and political conditions, including interest rates, currency issues, energy prices, trade issues, including the potential imposition of tariffs by the United States or other nations, international or domestic conflicts or political crises, and epidemics or pandemics.
The credit and financial markets have experienced extreme volatility and disruptions due to the current conflicts in the Middle East and between Ukraine and Russia. The conflict is expected to have further global economic consequences, including but not limited to the possibility of severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in inflation rates and uncertainty about economic and political stability. In addition, the United States and other countries have imposed sanctions on Russia which increases the risk that Russia, as a retaliatory action, may launch cyberattacks against the United States, its government, infrastructure and businesses. Any of the foregoing consequences, including those we cannot yet predict, may cause our business, financial condition, results of operations and the price of our ordinary shares to be adversely affected.
Revenue from Graphene-related Products Sales; Long and Complex Sales Cycle
To date, the Company has recorded minimal revenue from its graphene enhanced products sales. There can be no assurance that significant losses will not occur in the near future or that the Company will be profitable in the future. The Company's operating expenses, and capital expenditures may increase in subsequent years. The Company expects to continue to incur losses unless and until such time as it enters into long-term and large-volume supply agreements and generates sufficient revenues to fund its continuing operations.
Intellectual Property
The Company relies on the patent, trade secret and other intellectual property laws of Canada, and foreign jurisdictions. The Company may be unable to prevent third parties from using its intellectual property without its authorization. The unauthorized use of the Company'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 Company's intellectual property, litigation to protect and enforce the Company's rights could be costly, and the Company may not prevail.
Some of the Company's current or future technologies and trade secrets may not be covered by any patent or patent application, and the Company's issued and pending patents may not provide the Company with any competitive advantage and could be challenged by third parties. The Company's inability to secure issuance of pending patent applications may limit its ability to protect the intellectual property rights these pending patent applications were intended to cover. The Company's competitors may attempt to design around its patents to avoid liability for infringement and, if successful, could adversely affect the Company's market share. Furthermore, the expiration of the Company's patents may lead to increased competition.
In addition, effective patent, trade secret and other intellectual property protection may be unavailable or limited in some foreign countries. In some countries, the Company may not apply for patent or other intellectual property protection. The Company also relies on unpatented technological innovation and other trade secrets to develop and maintain its competitive position. Although the Company generally enters into confidentiality agreements with its employees and third parties to protect its intellectual property, these confidentiality 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 Company's trade secrets and manufacturing expertise. In addition, others may obtain knowledge about the Company's trade secrets through independent development or by legal means. The failure to protect the Company'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 Company's ability to make and sell products or use such processes and could potentially result in costly litigation in which the Company might not prevail. The Company 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.
Product Development and Technological Change
There is no assurance that broad successful commercial applications for the Company's products may be feasible. Most, if not all, of the scientific and engineering data related to the Company's products has been generated by the Company's own laboratories or laboratory environments of the Company's partners, such as universities. There can be no assurance that laboratory data translates to or is representative in commercial applications.
Additionally, the industries in which the Company seeks to operate are characterized by rapid technological change and frequent new product introductions. Part of the Company's business strategy is to monitor such changes and take steps to remain technologically current, but there is no assurance that such a strategy will be successful. If the Company is not able to adapt to new advances in materials sciences, or if unforeseen technologies or materials emerge that are not compatible with the Company's or that could replace its products, the Company's revenues and business would likely be adversely affected.
Market Development and Growth
Failure to further develop the Company's key markets and existing geographic markets or to successfully expand its business in the future into new markets could have an adverse impact on sales growth and operating results.
The Company's ability to further penetrate its key markets and the existing geographic markets in which it competes and/or aims to compete, and to 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 increase market penetration in the Company's key markets and existing geographic markets will be successful. Failure to achieve these goals may have a material adverse effect on the Company's operating results.
Unpredictable Sales Cycles
The sales cycle for graphene products may range considerably from one to multiple years from the time a customer begins testing the Company's product until the time that they could be used in a commercial product. Timing of product introduction could vary significantly based on the target market. The Company has demonstrated little track record of success in completing customer development projects, which makes it difficult to evaluate the likelihood of future success.
The sales and development cycles for the Company's products are subject to customer budgetary constraints, internal acceptance procedures, competitive product assessments, scientific and development resource allocations, and other factors beyond the Company's control. If the Company is not able to successfully accommodate these factors to achieve commercial success, the Company may be unable to achieve sufficient sales to reach profitability.
Government Regulation and Import/Export Controls
The Company's future operations, including development, and commencement and continuation of commercial production, require licenses, permits or other approvals from various federal, provincial, local and potentially foreign governmental authorities, and such operations are or will be governed by laws and regulations relating to production, exports, taxes, labor standards, occupational health and safety, waste disposal, toxic substances, prospecting, development, mining, land use, water use, environmental protection, land claims of indigenous people and other matters. Furthermore, in certain foreign jurisdictions, these regulatory requirements may be more stringent than those in Canada. Certain export control laws or economic sanctions laws may include restrictions or prohibitions on the sale or supply of certain products and services to embargoed or sanctioned countries, governments, persons, and entities. In addition, various countries regulate the import of certain technology, including import and export permitting and licensing requirements, and have enacted or could enact laws that could limit the Company's ability to distribute its products. Changes in the Company's products, or future changes in export and import regulations may prevent any potential international customers from utilizing the Company's products globally or, in some cases, prevent the export or import of the Company's products to certain countries, governments, or persons altogether.
Additionally, the United States government has taken certain actions that could negatively impact trade with the United States, including imposing tariffs on certain imported goods and prohibiting certain imports into the United States. In retaliation, Canada, Mexico and China continue to evaluate imposing tariffs on a wide range of American products. There is also a concern that the imposition of additional tariffs by the United States could result in the adoption of tariffs by other countries as well, potentially leading to a global trade war. Such tariffs and prohibitions, if expanded to other categories, could have a significant impact on the Company's business, particularly on the importation of certain equipment manufactured in other countries and the sale of the Company's products in other countries.
Any change in export or import regulations, economic sanctions, or related legislation, or change in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of the Company's products in the future by, or in the Company's decreased ability to export or sell its products to, potential international customers. Any limitation on the Company's ability to export or sell its products would likely adversely affect the Company's future business, results of operations, and financial results.
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).
Health Canada also regulates certain markets into which the Company intends to supply products or license its intellectual property. There is no assurance that Health Canada or any other body will grant license for sales into markets it regulates. Each foreign jurisdiction for the Company's products is regulated and no assurance exists that sales of graphene-related products will be permitted. Any inability by the Company to obtain approval from Health Canada and/or international bodies could have a material adverse impact of the business of the Company.
The Company is also subject to consumer protection laws that may impact its sales and marketing efforts. These laws, as well as any changes in these laws, could make it more difficult for the Company to sell and market its products. These laws and regulations are subject to change over time and thus the Company must continue to monitor and dedicate resources to ensure continued compliance. Non-compliance with applicable regulations or requirements could subject the Company to investigations, sanctions, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties, or injunctions. If any governmental sanctions are imposed, or if the Company does not prevail in any possible civil or criminal litigation, its business, operating results, and financial condition could be materially adversely affected.
Additionally, in order for the Company to carry out its activities, any required licenses and permits must be obtained and kept current. There can be no assurance, however, that the Company will obtain on reasonable terms or at all the permits and approvals, and the renewals thereof, which it may require for the conduct of its future operations or that compliance with applicable laws, regulations, permits and approvals will not have an adverse effect on the Company's business plans. Possible future environmental and mineral tax legislation, regulations and actions could cause additional expense, capital expenditures, restrictions and delay on the Company's planned exploration and operations, the extent of which cannot be predicted.
Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations.
Industry Competition
The Company seeks to compete with other graphene and manufacturing companies, in highly competitive markets. Some of the Company's competitors have substantially greater financial, marketing, and other resources and higher market share than the Company has in certain products or geographic areas. As the markets for the Company's products expand, additional competition may emerge, and competitors may commit more resources to products which directly compete with the Company's products. There can be no assurance that the Company will be able to compete successfully with existing competitors or be able to develop any market for its products, or that its business will not be adversely affected by increased competition or by new competitors.
There is no assurance that the Company will continue to be able to compete successfully with its competitors in acquiring such properties or prospects and any such inability could have a material adverse effect on the Company's business and financial condition.
Lack of Trading Market for Graphene
Unlike commodity minerals such as copper, gold or silver, industrial minerals such as graphene precursor graphene materials and graphite do not have a metals exchange or an open market upon which to trade and therefore prices are not set in an open market or publicly traded market, and there can be no assurance that certain items can be sold or purchased at any time. As prices are set with private suppliers and private customers, it is difficult to predict what market prices may be at the time of any transaction. There can be no guarantees that the Company will be able to sell its graphene products in a profitable manner, or at all.
Shortages
The Company will be dependent on various supplies, equipment, parts and labour, and the services of contractors to carry out its business objectives. The availability and cost of such supplies, equipment, parts or labour or the services of contractors could have a material adverse effect on the Company's ability to successfully carry out its exploration and development activities.
Liquidity Concerns and Future Financing
The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As of March 31, 2026, the Company had a cash balance of $1,302,738 (2025 - $3121,481) to settle current liabilities of $3,533,474 (2025 - $3,485,001). The Company is ultimately dependent on the commercial sales of its products. Any delay in the sales of such products could require additional financing.
There can be no assurance that the Company will be successful in obtaining the required financing as and when needed. Volatile markets may make it difficult or impossible for the Company to obtain debt financing or equity financing on favourable terms, if at all. Failure to obtain additional financing on a timely basis may cause the Company to postpone or slow down its development plans or reduce or terminate some or all of its activities.
Reliance on Key Personnel
The Company's development to date has depended, and in the future, will depend largely on the efforts of key management and other key personnel. Loss of any of these people, particularly to competitors, could have a material adverse effect on the Company's business. Further, with respect to the future development of the Company's projects, it may become necessary to attract both international and local personnel for such development. The marketplace for key skilled personnel is becoming more competitive, which means the cost of hiring, training, and retaining such personnel may increase. Factors outside the Company's control, including competition for human capital and the high-level of technical expertise and experience required to execute this development will affect the Company's ability to employ the specific personnel required.
The failure to retain or attract a sufficient number of key skilled personnel could have a material adverse effect on the Company's business, results of operations, and financial condition. The Company has not taken out and does not intend to take out "key man insurance" in respect of any directors, officer, or other employees.
Qualified Employees
Recruiting and retaining qualified personnel is critical to the Company'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 Company 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 Company if it is unable to recruit and retain qualified personnel as and when required.
Cybersecurity Threats
The reliability and security of the Company's information technology ("IT") systems are important to the Company's business and operations. Although the Company has established and continues to enhance security controls intended to protect the Company's IT systems and infrastructure, there is no guarantee that such security measures will be effective in preventing unauthorized physical access or cyberattacks. A significant breach of the Company's IT systems could, among other things, cause disruptions in the Company's manufacturing operations (such as operational delays from production downtime, inability to manage the supply chain or produce products 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 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 impact of changing laws and regulations related to cybersecurity or result in theft of the Company's, its customers' or suppliers' intellectual property or confidential information. If any of the foregoing events (or other events related to cybersecurity) occurs, the Company 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 Company.
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 can be no assurance that fluctuations in the Company's share price will not occur. In particular, the fluctuations may be exaggerated if the trading volume of the Company's common shares is low.
The Company's common shares are listed on the Nasdaq Capital Market under the symbol "ZTEK". Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of US$1.00 per share. As described under "Three Year History - Corporate Finance and Administrative Developments", the Company received notice from Nasdaq that it was not in compliance with the minimum bid price requirement, and following the expiration of the initial 180-day compliance period on February 23, 2026, the Company was granted a further 180-day extension, until August 24, 2026, in which to regain compliance by achieving a closing bid price of at least US$1.00 per share for a minimum of ten consecutive business days. As at the date of this AIF, the closing bid price of the common shares has continued to trade below US$1.00, and there can be no assurance that the Company will regain compliance within the extended cure period or maintain compliance with the other continued listing requirements of Nasdaq. In an effort to regain compliance, the Company may determine to effect a reverse stock split, which may not result in a sustained increase in the trading price of the common shares, could be viewed negatively by investors, and could adversely affect the liquidity and market price of the common shares. If the Company is unable to regain compliance within the applicable cure period and is not otherwise eligible for additional time, the common shares may become subject to delisting from Nasdaq. Any delisting could impair the liquidity and market price of the common shares, limit the Company's ability to raise capital in the United States, reduce analyst and investor coverage, and have a material adverse effect on the Company's business, financial condition and reputation.
Cost Absorption and Purchase Orders
Especially as it relates to its activities in the transportation industry, and given the current trends in that industry, the Company 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 Company's customers' estimates of their own 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 Company's products. For programs currently under production, the Company is generally unable to request price changes when volumes differ significantly from production 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 Company may not be fully recovered. Similarly, future pricing pressure or volume reductions by the Company's customers may also reduce the amount of amortized costs otherwise recoverable in the piece price of the Company's products. Either of these factors could have an adverse effect on the Company's profitability. While it is generally the case that once the Company 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 Company for a variety of reasons, including the Company's refusal to accept demands for price reductions or other concessions.
Acquisitions
The Company could seek to acquire complementary businesses, assets, technologies, services, or products, at competitive prices. The Company could pursue acquisitions in those product areas which were identified as key to the Company's long-term business strategy. However, as a result of intense competition in these strategic areas, the Company may not be able to acquire the targets needed to achieve its strategic objectives. The completion of such transactions poses additional risks to the Company's business. Acquisitions are subject 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 Company 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 company facilities and/or personnel; or other limitations in the due diligence process. Additionally, the Company 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 Company's operations or profitability. The benefit to the Company of previous and future acquisitions is highly dependent on the Company's ability to integrate the acquired businesses and their technologies, employees and products into the Company, and the Company may incur costs associated with integrating and rationalizing the facilities (some of which may need to be closed in the future). The Company cannot be certain that it will successfully integrate acquired businesses or that acquisitions will ultimately benefit the Company.
Any failure to successfully integrate businesses or failure of the businesses to benefit the Company could have a material adverse effect on its business and results of operations. Such transactions may also result in additional dilution to the Company's shareholders or increased debt. Such transactions may involve partners, and the formula 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 Company 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. The Company'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 Company's facilities and proposed facilities contain complex and sophisticated equipment that is used in its manufacturing processes. The Company 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 Company 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 Company's profitability and operations.
Material and Commodity Prices
Prices for key raw materials and commodities used in the production of graphene-based products, as well as energy prices, have proven to be volatile at certain times. To the extent that the Company 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.
Uninsured Risks
The Company 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 profitability and result in increasing costs and a decline in the value of the common shares of the Company.
Litigation
The Company has entered into legally binding agreements with various third parties, including supply, license, 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 Company may disagree with the position taken by the various other parties resulting in a dispute that could potentially initiate litigation and cause the Company to incur legal costs in the future. Given the speculative and unpredictable nature of litigation, the outcome of any such disputes could have a material adverse effect on the Company's business.
Credit Risk
As at March 31, 2026, the Company's credit risk was primarily attributable to cash, accounts and other receivables. Financial instruments included in accounts and other receivables consisted of trade receivables generated through sales as well as recoverable Harmonized Sale Tax. The Company's cash is held with reputable financial institutions. Management believes that the credit risk with respect to financial instruments included in accounts and other receivables is remote.
Interest Rate Risk
The Company has cash and cash equivalent balances at federally regulated Canadian banks. The Company periodically monitors the investments it makes, the security of such investments and is satisfied with the credit ratings of its banks. The Company closely monitors interest rates to determine the appropriate course of action to be taken by the Company.
Price Risk
The Company is exposed to price risk with respect to commodity prices. The Company closely monitors commodity prices to determine the appropriate course of action to be taken by the Company.
Financial Capability and Additional Financing
The Company has limited financial resources and there is no assurance that sufficient additional funding will be available to enable it to fulfill its business objectives or obligations, on acceptable terms or at all. Unanticipated expenses and other developments could cause existing funds to be depleted sooner than expected. In the event that its existing cash resources are inadequate to fund operational expenses, and in order to fund the planned business objectives of the Company, the Company will be required to raise additional financing from external sources, such as debt financing, equity financing or joint ventures.
The Company's ability to raise additional equity financing may be affected by numerous factors beyond the Company's control, including, but not limited to, adverse market conditions, commodity price changes and an economic downturn. Failure to obtain additional funding on a timely basis could result in delay or indefinite postponement of the development of the Company's business and could cause the Company to reduce or terminate its operations.
Additional funds raised by the Company from treasury share issuances may result in significant dilution to existing shareholders, a depressive effect on the price of the common shares and/or a change of control.
Permits and Government Regulation
Although the Company believes it has all of the necessary permits to carry out the proposed business programs, the operations of the Company may require licenses and permits from time to time from various governmental authorities to carry out exploration and development at its projects or locations. Obtaining permits can be a complex, time-consuming process. There can be no assurance that the Company will be able to obtain the necessary licenses and permits on acceptable terms, in a timely manner or at all. The costs and delays associated with obtaining permits and complying with these permits and applicable laws and regulations could stop or materially delay or restrict the Company from continuing or proceeding with existing or future operations or projects. Any failure to comply with permits and applicable laws and regulations, even if inadvertent, could result in the interruption or closure of operations or material fines, penalties, or other liabilities. In addition, the requirements applicable to sustain existing permits and licenses may change or become more stringent over time and there is no assurance that the Company will have the resources or expertise to meet its obligations under such licenses and permits.
Fluctuating Prices
The profitability of the Company's operations will be dependent upon the market price of the ZenGUARD™ masks and other products, their global acceptance and demand along with their regulatory approvals in other jurisdictions. The level of interest rates, rate of inflation, production costs, healthcare and consumer demand, and stability of exchange rates can all cause significant fluctuations in revenue. Such external economic factors are in turn influenced by changes in international purchasing patterns, monetary systems and political developments.
Environmental Regulation
AGC's Albany Graphite Project is subject to environmental laws and regulations which may materially and adversely affect its future operations. These laws and regulations control the exploration and development of the Albany Graphite Project and their effects on the environment, including air and water quality, waste handling and disposal, the protection of different species of plant and animal life, and the preservation of lands. These laws and regulations will require AGC to acquire permits and other authorizations for certain activities. There can be no assurance that AGC will be able to acquire such necessary permits or authorizations on a timely basis, if at all.
Further, environmental legislation is evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. There is no assurance that future changes in environmental regulation, if any, will not adversely affect AGC's operations.
AGC is not currently insured against most environmental risks. Without such insurance, and if AGC becomes subject to environmental liabilities, the payment of such liabilities would reduce or eliminate its available funds or could exceed the funds AGC has to pay such liabilities and result in bankruptcy.
Economic Dependence on Supply Agreements
Currently, the Company has entered into a limited number of supply or sales agreements for the sale of its products. Until additional supply agreements are executed by the Company, the Company's revenues will be completely dependent on such agreements. If such agreements are terminated, or if less of the Company's product than anticipated is purchased pursuant to such agreements, this could have a material adverse impact on the Company's business, operations and results.
DIVIDENDS AND DISTRIBUTIONS
The Company relies primarily on equity financing to fund its working capital needs. The Company has neither declared nor paid any dividends on its common shares. The Company intends to retain its earnings, if any, to finance growth and expand its operation and does not anticipate paying any dividends on its common shares in the foreseeable future. Any decisions to pay dividends on the common shares will be made by the Board on the basis of its earnings, financial requirements, and other conditions.
DESCRIPTION OF CAPITAL STRUCTURE
Common Shares
The authorized share capital of the Company consists of an unlimited number of common shares, of which 107,792,002 shares were issued and outstanding as fully paid and non-assessable as at March 31, 2026. As at the date hereof, 126,619,532 common shares were issued and outstanding.
Each common share entitles the holder thereof to receive notice of any meetings of the shareholders of the Company, to attend, and to cast one vote per common share at all such meetings. Holders of common shares do not have cumulative voting rights with respect to the election of directors. Accordingly, holders of a majority of the common shares entitled to vote in any election of directors may elect all of the directors standing for election. Holders of common shares are entitled to receive on a pro-rata basis such dividends if any, as and when declared by the Board at its discretion from funds legally available therefore and, upon the liquidation, dissolution, or winding up of the Company, are entitled to receive on a pro-rata basis the net assets of the Company for payment of debts and liabilities. The common shares do not carry any pre-emptive, subscription, redemption, retraction, or conversion rights, nor do they contain any sinking or purchase fund provisions.
Warrants
As at March 31, 2026, the Company had the following common share purchase warrants outstanding: (i) 1,180,750 warrants issued in connection with the August 19, 2024 private placement, each exercisable at $3.00 per common share until August 19, 2026; (ii) 908,000 warrants issued in connection with the April 9, 2025 Convertible Debenture offering, each exercisable at the Conversion Price until April 9, 2028, subject to the vesting conditions described under "Three Year history - Corporate Finance and Administrative Development"; and (iii) 1,169,443 warrants exercisable at $1.50 until October 22, 2027 and 1,169,443 warrants exercisable at $2.00 per common share until October 22, 2028, together with 33,424 finder warrants exercisable at $1.06 per unit until October 22, 2027, each issued in connection with the October 22, 2025 private placement. Subsequent to March 31, 2026, in connection with the May 27, 2026 private placement, the Company issued 18,000,000 warrants exercisable at $1.50 per common share until May 27, 2029 and 1,197,360 broker warrants exercisable at $1.00 per common share until May 27, 2029. As at March 31, 2026, a total of 4,461,060 warrants were outstanding.
Restricted Stock Units
Pursuant to the LTIP, the Company may grant restricted share units ("RSUs") and deferred share units ("DSUs") to eligible participants. During the financial year ended March 31, 2026, the Company granted an aggregate of 1,079,000 RSUs to certain officers, directors, employees and consultants of the Company, including 654,000 RSUs granted on October 1, 2025 and 425,000 RSUs granted on December 1, 2025. As at March 31, 2026, a total of 1,021,000 were outstanding, and as at the date of this AIF, a total of 1,006,000 were outstanding.
Stock Options
On September 29, 2022, shareholders of the Company approved and adopted an Omnibus Long-Term Incentive Plan ("LTIP") at the Company's annual and special shareholder meeting, which has subsequently been approved by shareholders annually, most recently at the Company's annual shareholder meeting on September 25, 2025.
The maximum number of common shares that may be: (i) issued to insiders of the Company within any one-year period; or (ii) issuable to insiders of the Company at any time, in each case, under the LTIP alone, or when combined with all of the Company's other security-based compensation arrangements, including the Legacy Stock Option Plan (the "Legacy Stock Option Plan"), cannot exceed 10% of the aggregate number of common shares issued and outstanding from time to time determined on a non-diluted basis.
As at March 31, 2026, a total of 5,606,667 stock options were outstanding with a weighted average exercise price of $2.05. During the financial year ended March 31, 2026, the Company granted an aggregate of 1,579,000 options to certain officers, directors, and employees of the Company. As at the date hereof, the Company had stock options exercisable for an aggregate of 5,311,750 common shares outstanding.
Prior Sales
The following table summarizes details of all issuances of securities of the Company, other than Common Shares, in the year ended March 31, 2026, being the most recently completed financial year of the Company:
| Issue Date | Type of Security | Issue Price | Number of Securities |
| October 1, 2025 | Options | $1.06 | 1,104,000 |
| October 1, 2025 | RSUs | N/A | 654,000 |
| December 1, 2025 | Options | $1.06 | 475,000 |
| December 1, 2025 | RSUs | N/A | 425,000 |
MARKET FOR SECURITIES
Trading Price and Volume
Common Shares
The common shares are listed for trading on the TSXV under the trading symbol "ZEN". The following table sets out the high and low closing market prices and the volume traded of the common shares on the TSXV for each month since the beginning of the Company's financial year ended March 31, 2025:
| 2025 | HIGH ($) | LOW ($) | VOLUME |
| April | 2.39 | 1.35 | 1,253,121 |
| May | 2.50 | 2.06 | 1,148,934 |
| June | 2.14 | 1.39 | 749,798 |
| July | 1.61 | 1.08 | 1,220,053 |
| August | 1.24 | 0.85 | 995,461 |
| September | 1.70 | 0.94 | 1,590,317 |
| October | 1.33 | 1.00 | 1,222,859 |
| November | 1.30 | 1.00 | 652,471 |
| December | 1.11 | 0.89 | 957,169 |
| 2026 | HIGH ($) | LOW ($) | VOLUME |
| January | 1.50 | 0.91 | 1,803,778 |
| February | 1.00 | 0.74 | 1,420,368 |
| March | 0.92 | 0.71 | 685,304 |
| April | 0.79 | 0.56 | 1,332,817 |
| May | 1.50 | 0.56 | 8,516,260 |
| June 1 to June 25 | 0.81 | 0.52 | 5,006,718 |
ESCROWED SECURITIES
As of the date hereof, there are no securities of the Company subject to escrow provisions.
DIRECTORS AND OFFICERS
Name, Occupation, and Security Holdings
The following table sets forth all current directors and executive officers of the Company as at the date hereof, their principal occupations or employment, the period or periods of service, and the approximate number of voting securities of the Company beneficially owned, directly or indirectly, or over which control or direction is exercised as of the date hereof.
The Board currently consists of five (5) directors to be elected annually. The term of office of each director will be from the date of the meeting at which he or she is elected until the next annual meeting, or until his or her successor is elected or appointed.
| Name, Province and Country of Residence, Position |
Director Since |
Number of Common Shares Beneficially Owned(1) |
Principal Occupation During Past Five Years |
| Mohammed (Moe) Jiwan Ontario, Canada Director, Secretary and Chief Executive officer |
December 1, 2025 | 378,933(2) Common shares 375,000 Options 375,000 RSUs 264,000 Warrants |
Chief Executive Officer and a director of the Company since December 1, 2025. Mr. Jiwan has more than 20 years of operational, capital markets and innovation leadership experience across public companies and high-growth ventures in the technology, healthcare and life sciences sectors. |
| John Snisarenko(3)(4) (5) Ontario, Canada Director and non-executive Chairman |
October 5, 2023 | 320,000(7) Common Shares 350,000 Options 50,000 RSUs 300,000 Warrants |
Group Vice-President and Head of Ophthalmology Franchise for Shire/Takeda (June 2017 to July 2019, divested to Novartis Pharmaceuticals Corp); Chief Commercial Officer of Oyster Point Pharma Inc. (September 2019 to July 2022); Independent director and board member of Alimera Sciences Inc. (July 2019 to present).; Cytophage Technologies Ltd. (May 2024 to present). |
| Eric Wallman(4) (5) Manitoba, Canada Director |
May 11, 2018 | 600,973(6) Common Shares 225,000 Options 50,000 RSUs 125,000 Warrants |
Mr. Wallman is a graduate of the University of Manitoba in 1983 and obtained a full CA designation in 1986. He has held senior accounting and finance positions in the industry since 1991 and has been an active investor in the junior mining market since 1992. Most recently, Mr. Wallman was the Senior Vice-President, Finance and Administration with Bothwell Cheese, which was the largest independently owned cheese manufacturer in Canada before being acquired in 2022. His role included strategic planning for Bothwell Cheese and two related companies. Currently, Mr. Wallman is part owner of several smaller private Canadian corporations. |
| Matt Fontes(4) British Columbia, Canada Director |
September 25, 2025 | 73,609 Common Shares 125,000 Options 125,000 RSUs |
Partner and Project Manager, Catalyst Custom Modular Ltd. ( custom prefabricated modular construction business); prior thereto, proprietor of Fontes Homes. |
| Pete Gettinby Dubai, United Arab Emirates Director |
September 25, 2025 | 1,000 Common Shares 125,000 Options 125,000 RSUs |
Director of International Development, RSK Environment Limited (2019 to 2025), and prior thereto is Regional Development Director - Middle East; before joining RSK, Land Manager, Vattenfall (Edinburgh and London, United Kingdon). |
| Wendy Ford(2)(3) Alberta, Canada Chief Financial Officer |
N/A | 45,000 Common shares 587,000 Options 112,000 RSUs 35,000 Warrants |
Chief Financial Officer of AirBoss of America Corp (March 2014 to August 2016); VP Finance and Chief Financial Officer of Mancor Canada Inc. (October 2017 to May 2022). |
| Ryan Shacklock(3) Saskatchewan, Canada Senior VP, Strategy and Business Development |
N/A | 178,200 Common Shares 363,000 Options 38,000 RSUs |
VP of the Company since January 2021. Prior thereto, Mr. Shacklock held several positions at Nutrien Ltd. (formerly Potash Corporation of Saskatchewan Inc.) |
| Peter C. Wood(3) Ontario, Canada VP, Development (AGC) |
N/A | 237,718 Common Shares 180,000 Options 30,000 RSUs |
VP Exploration of the Company (2013 to June 21, 2018); Vice President of the Company (June 22 to September 13, 2018); President of the Company (September 14, 2018, to present); President and Geologist, Geodigital Mapping Systems Inc. (1991 to present) |
Notes:
(1) The information as to voting securities beneficially owned, controlled, or directed, not being within the knowledge of the Company, has been obtained from the System for Electronic Disclosure by Insiders or furnished by the respective nominees individually. Based on this information, as at the date of this AIF, the directors and executive officers of the Company, as a group, beneficially owned, controlled or directed, directly or indirectly, 1,835,433 common shares, representing approximately 1.45% of the outstanding common shares.
(2) 361,833 Common Shares are held directly, and 17,000 Common Shares are held byLG Properties Ltd.,. a corporation controlled by Mr. Jiwan.
(3) Member of the Disclosure Committee.
(4) Member of the Audit Committee
(5) Member of the Corporate Governance, Compensation and Nominating Committee.
(6) 554,373 Common Shares are held directly, 24,900 Common Shares are held by PTM Investment Club, a corporation controlled by Mr. Wallman and 21,700 Common Shares are held by Ms. Brenda Wallman, Mr. Wallman's wife, over which Common Shares Mr. Wallman has control and direction.
(7) 20,000 Common Shares are held directly, and 300,000 Common Shares are held by Meritage Holdings Inc., a corporation controlled by Mr. Snisarenko.
Cease Trade Orders, Bankruptcies, Penalties or Sanctions
For the purposes of this section "Order" means:
(a) a cease trade order;
(b) an order similar to a cease trade order; or
(c) an order that denied the relevant company access to any exemption under securities legislation;
that was in effect for more than 30 days.
No director or executive officer of the Company, within 10 years before the date of this AIF, has been a director, chief executive officer or chief financial officer of any company that was subject to an Order that was issued:
(a) while the proposed director was acting in the capacity as director, chief executive officer or chief financial officer; or
(b) after the proposed director ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.
No director or executive officer of the Company, or shareholders holding a sufficient number of securities to materially affect control of the Company has:
(a) as at the date of the AIF, or within 10 years before the date of the AIF, been a director or executive officer of any company that, while the proposed director was acting in that capacity, or within a year of the proposed director ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency 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; or
(b) within 10 years before the date of the AIF, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of such person.
No director or executive officer of the Company or a shareholder holding a sufficient number of securities to materially affect control of the company has been subject to:
(a) 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
(b) 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.
PROMOTERS
No person or company has been, within the two most recently completed financial years or during the current financial year, a promoter of the Company.
CONFLICTS OF INTEREST
There are no known existing or potential conflicts of interest among the Company, or any of its subsidiaries, and the directors and officers of the Company as a result of their outside business interests except that certain of the directors and officers may serve as directors, officers, promoters and members of management of other companies and therefore it is possible that a conflict may arise between their duties as a director and officer of the Company and their duties as a director, officer, promoter or member of management of such other companies.
The directors and officers of the Company have been advised of the existence of laws governing accountability of directors and officers regarding corporate opportunity and requiring disclosures by directors of conflicts of interest, and the Company will rely upon such laws in respect of any directors' and officers' conflicts of interest or in respect of any breaches of duty by any of the directors or officers. All such conflicts shall be disclosed by such directors or officers and treated in accordance with the applicable laws of Ontario and the Company's constating documents.
LEGAL PROCEEDINGS AND REGULATORY ACTIONS
Other than as set out below, the Company was not subject to any material legal proceedings during its most recently completed financial year, nor is the Company or any of its properties a party to or the subject of any such proceedings, and no such proceedings are known to be contemplated. The Company may be involved in routine, non-material litigation arising in the ordinary course of business, from time to time.
There were no penalties or sanctions imposed against the Company by a court relating to provincial and territorial securities legislation or by a securities regulatory authority during its most recently completed financial year, nor have there been any other penalties or sanctions imposed by a court or regulatory body against the Company, and the Company has not entered into any settlement agreements before a court relating to provincial and territorial securities legislation or with a securities regulatory authority.
The Company is involved in legal proceedings relating to claims involving a former director and officer of the Company. The claim was commenced in the Ontario Superior Court of Justice on September 26, 2018, by Aubrey Eveleigh and Eveleigh Geological Consulting. Mr. Eveleigh seeks damages in excess of $5,000,000 in connection with an employment dispute. The Company is defending the claim and the proceedings remain ongoing, though the Company believes that the risk of significant loss in respect of the litigation is remote.
The Company subsequently commenced a claim against Mr. Eveleigh and Eveleigh Geological Consulting on March 24, 2020, in the Ontario Superior Court of Justice (Commercial List), in connection with past breaches of Mr. Eveleigh's fiduciary duties. Mr. Eveleigh has defended the claim and the Company submits that it continues to defend the action and maintains that the allegations as set out in the claim are frivolous and without merit.
On November 28, 2022, following the discovery process, the Company amongst other things, amended its claim to: (i) seek an order that Mr. Eveleigh disgorge any benefits obtained as a result of his misconduct; (ii) seek an order cancelling certain common shares of the Company held by Mr. Eveleigh; (iii) seek an order declaring that Mr. Eveleigh has no entitlement to any royalty payments or success fees in connection with the Albany Graphite Project; and (iv) seek an order that declares a constructive trust in favour of the Company over any and all monies received, directly or indirectly. The trial commenced on October 21, 2024, and closing submissions were held on January 17, 2025. On March 12, 2026, the Ontario Superior Court of Justice (Commercial List), per Justice Osborne, issued Reasons for Judgment (2026 ONSC 1510) dismissing substantially all claims advanced by Mr. Eveleigh and his consulting firm, Eveleigh Geological Consulting Inc., which as originally filed exceeded $6 million. At trial, the Court denied all remaining monetary claims, specifically: a success fee claim of $282,500, denied on the basis that the pre-feasibility study required to trigger the payment obligation was never commenced; severance claims totaling $1,350,000, found to be void and unenforceable as a result of breaches of fiduciary duty; unpaid wages of $51,748.82; defamation damages of $75,000, denied on the basis that the relevant statements were factually accurate; and indemnification claims of approximately $194,000 in costs and disbursements. With respect to the Company's claim for cancellation of 4.5 million founder shares and disgorgement of profits, the Court found that the shares had been properly issued and that there was no basis to set aside the issuance.
On January 29, 2021, the Company was served with a statement claim issued by Graphene Composites Ltd. and is in the process of defending the action, which it considers frivolous and without merit.
The Company has considered the allegations as set out in the claim and, in light of the facts, the lack of clarity in the claim, and, based on discussions with the Company's litigation counsel, the assessment of the merits of the claim and the defenses available to the Company, and the Company's conclusion is that the risk of the Company suffering loss in respect of the claim is remote, and therefore the Company determined the claim not to be material or constituting "significant litigation" pursuant to the policies of the TSXV. The Company continues to view this claim as frivolous and will continue to vigorously defend itself against these allegations.
INTERESTS OF MANAGEMENT IN MATERIAL TRANSACTIONS
To the knowledge of management of the Company, no director or executive officer of the Company, person or company that beneficially owns, controls or directs, directly or indirectly, more than 10% of the common shares, or any associate or affiliate of any such persons, has or had any material interest, direct or indirect, in any transaction within the Company's three most recently completed financial years which has materially affected or will materially affect the Company or any of its subsidiaries other than as set out herein.
TRANSFER AGENT AND REGISTRAR
Effective as of November 22, 2021, the registrar and transfer agent of the Company is TSX Trust Company, having an address of 100 Adelaide Street West, Suite 301, Toronto, Ontario M5H 1S3.
MATERIAL CONTRACTS
Except as disclosed above with respect to the "Convertible Debenture offering described under "Three Year History -Corporate Finance and Administrative Developments", and for contracts entered into in the ordinary course of business, the Company has not entered into any material contracts during the most recently completed financial year or which are still in force and effect, and which may reasonably be regarded as presently material.
EXPERTS AND INTERESTS OF EXPERTS
The auditor of the Company, BDO Canada LLP is independent within the meaning of the rules of Professional conduct of the Chartered Professional Accountants of Ontario and within the meaning of the Securities Acts administered by the Securities and Exchange Commission and the Public Company Accounting Oversight Board.
To the knowledge of the Company, the aforementioned firm, and designated professionals within such firm, held either less than 1% or no securities of the Company or of any associate or affiliate of the Company when they rendered services, or following the rendering of services or preparation of such reports or data, as applicable, during, or relating to the Company's most recently completed financial year, and either did not receive any or received less than 1% direct or indirect interest in any securities of the Company or of any associate or affiliate of the Company in connection with the rendering of such services or preparation of such reports or data.
AUDIT COMMITTEE INFORMATION
The Audit Committee's Charter
The directors of the Company have adopted a charter (the "Charter") for the audit committee (the "Audit Committee"), which sets out the Audit Committee's mandate, organization, powers and responsibilities. The full text of the Charter is attached hereto as Appendix "A" to this AIF.
Composition of the Audit Committee
The members of the Audit Committee are Eric Wallman CPA, CA (Chair), Ilse Treurnicht and John Snisarenko, each of whom are independent (as defined in National Instrument 52-110 - Audit Committees ("NI 52-110") adopted by the Canadian Securities Administrators), and all members are financially literate (as defined in NI 52-110).
| Name of Member | Independent(1) | Financially Literate(2) |
| Eric Wallman CPA, CA (Chair) | Yes | Yes |
| John Snisarenko | Yes | Yes |
| Matt Fontes | Yes | Yes |
Notes:
(1) To be considered independent, a member of the Audit Committee must not have any direct or indirect "material relationship" with the Company. A "material relationship" is a relationship which could. in the view of the board of directors of the Company. be reasonably expected to interfere with the exercise of a member's independent judgment.
(2) To be considered financially literate. a member of the Committee must have 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 Company's financial statements.
Relevant Education and Experience
Mr. Wallman is a graduate of the University of Manitoba in 1983 and obtained a full CA designation in 1986. He has held senior accounting and finance positions in the industry since 1991 and has been an active investor in the junior mining market since 1992. Currently, Mr. Wallman is the Senior Vice-President, Finance and Administration with Bothwell Cheese, which is the largest independently owned cheese manufacturer in Canada. His role includes strategic planning for Bothwell Cheese and two related companies.
Mr. Snisarenko is a 35 year veteran of the pharmaceutical/biotech industry with specific focus in ophthalmology and eye care, currently serving as an independent director, board member and advisor in the ophthalmology therapeutic area. Mr. Snisarenko is currently an independent board member of Alimera Sciences Inc. Prior thereto, he was Chief Commercial Officer of Oyster Point Pharma Inc. from September 2019 to July 2022. Prior thereto, he served as Group Vice-President and Head of Ophthalmology Franchise for Novartis Pharmaceuticals Corp. from July 2019 to September 2019 and for Takeda Pharmaceuticals U.S.A., Inc. from June 2017 to June 2019.
Mr. Fontes is a Partner and Project Manager at Catalyst Custom Modular Ltd., where he specializes in custom prefabricated modular construction using modern building science, and was previously the proprietor of Fontes Homes.
Reliance on Certain Exemptions
Except as disclosed below, at no time since the commencement of the Company's most recently completed financial year has the Company relied on any of the exemptions contained in the following sections of NI 52-110: section 2.4 (De Minimis Non-audit Services), section 3.2 (Initial Public Offerings), section 3.4 (Events Outside Control of Member), section 3.5 (Death, Disability or Resignation of Audit Committee Member) or an exemption from NI 52-110, in whole or in part, granted under Part 8 (Exemptions) of NI 52-110.
As a result of the resignation of Mr. Frank Klees as a director and member of the Audit Committee, the Company relied on the exemption set out in section 3.5 (Death, Disability or Resignation of Audit Committee Member) of NI 52-110 with the appointment of Ms. Lisa Sim as his replacement up until the appointment of Mr. John Snisarenko on October 5, 2023.
Audit Committee Oversight
At no time during the last financial year have any recommendations by the Audit Committee respecting the appointment and/or compensation of the external auditors of the Company not been adopted by the Board pre-approval policies and procedures.
The Audit Committee has adopted specific policies and procedures for the engagement of non-audit services as described in its Charter.
External Auditor Services Fees (By Category)
The following table discloses the fees billed to the Company by its external auditor during the last two completed financial years:
| Financial Year Ending | Audit Fees(1) | Audit-Related Fees (2) | Tax Fees(3) | All Other Fees(4) |
| March 31, 2026 | $ | $Nil | $Nil | $ |
| March 31, 2025 | $247,000 | $Nil | $Nil | $161,000 |
Notes:
(1) The aggregate fees billed for professional services rendered by the auditor for the audit of the Company's annual financial statements.
(2) The aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company's financial statements and are not disclosed in the "Audit Fees" column.
(3) The aggregate fees billed for tax compliance, tax advice. and tax planning services.
(4) Represents fees billed by the auditor in connection with the review of the Company's quarterly statements, review and advisory on regulatory comment letters from OSC and consent and association services in connection with the Company's April 2024 Base Shelf Prospectus.
ADDITIONAL INFORMATION
Additional information relating to the Company may be found through a database search at SEDAR+ at www.sedarplus.ca. Additional information on the Company, including directors' and officers' remuneration and indebtedness, principal holders of the Company's securities, and securities authorized for issuance under equity compensation plans, is contained in the Company's management information circular dated August 15, 2025, which may be found on SEDAR+.
Additional financial information regarding the Company is provided in the Company's audited annual financial statements and management's discussion and analysis for the year ended March 31, 2026, which may be found on SEDAR+.
APPENDIX A
AUDIT COMMITTEE CHARTER
Mandate
The Audit Committee ("Committee") is a committee of the Board of Directors (the "Board"). Its primary function shall be to assist the Board in fulfilling its oversight responsibilities with respect to financial reporting, and disclosure requirements, the overall maintenance of the systems of internal controls that management has established and the overall responsibility for Zentek Ltd.'s (the "Company") external and internal audit processes.
The Committee shall have the power to conduct or authorize investigations into any matter within the scope of this Charter. It may request any officer or employee of the Company, its external legal counsel or external auditor to attend a meeting of the Committee or to meet with any member(s) of the Committee.
The Committee shall be accountable to the Board. In the course of fulfilling its specific responsibilities hereunder, the Committee shall maintain an open communication between the Company's outside auditor and the Board.
The responsibilities of a member of the Committee shall be in addition to such member's duties as a member of the Board.
The Committee has the duty to determine whether the Company's financial disclosures are complete, accurate, in accordance with international financial reporting standards and fairly present the financial position and risks of the organization. The Committee should, where it deems appropriate, resolve disagreements, if any, between management and the external auditor, and review compliance with laws and regulations and the Company's own policies.
The Committee will provide the Board with such recommendations and reports with respect to the financial disclosures of the Company as it deems advisable.
The Committee shall have the authority to: (i) engage independent counsel and other advisors as it determines necessary to carry out its duties; (ii) set and pay the compensation for advisors employed by the Committee; and (iii) communicate directly with the internal and external auditors.
Membership and Composition
The Committee shall consist of at least three Directors who shall serve on behalf of the Board all of whom are independent and financially literate.
The members shall be appointed annually by the Board and shall meet the independence, financial literacy, and experience requirements of the TSXV, including National Instrument 52-110 - Audit Committees, and other regulatory agencies as required.
An "independent" director is a director who has no direct or indirect material relationship with the Company. A "material relationship" is a relationship which, in the view of the Board, could be reasonably expected to interfere with the exercise of the director's independent judgement, or a relationship deemed to be a material relationship pursuant to Sections 1.4 and 1.5 of National Instrument 52-110 - Audit Committees. A "financially literate" director is a director who 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 accounting issues that can reasonably be expected to be raised in the Company's financial statements.
Each member of the Committee shall sit at the appointment of the Board, and in any event, only so long as he or she shall be independent.
A minimum of two and at least 50% of the members of the Committee present, either in person or by telephone, shall constitute a quorum. If within one hour of the time appointed for a meeting of the Committee, a quorum is not present, the meeting shall stand adjourned to the same hour on the next business day following the date of such meeting at the same place. If at the adjourned meeting a quorum as hereinbefore specified is not present within one hour of the time appointed for such adjourned meeting, such meeting shall stand adjourned to the same hour on the second business day following the date of such meeting at the same place. If at the second adjourned meeting a quorum as hereinbefore specified is not present, the quorum for the adjourned meeting shall consist of the members then present.
If and whenever a vacancy shall exist, the remaining members of the Committee may exercise all of their powers and responsibilities so long as a quorum remains in office.
The Board will appoint one Member to act as the Chairman of the Committee. In his or her absence, the Committee may appoint another person provided a quorum is present. The Chairman will appoint a Secretary of the meeting, who need not be a member of the committee and who will maintain the minutes of the meeting.
Meetings
At the request of the external auditor, the Chief Executive Officer or the Chief Financial Officer of the Company or any member of the Committee, the Chairman will convene a meeting of the Committee. In advance of every meeting of the Committee, the Chairman, with the assistance of the Chief Financial Officer, will ensure that the agenda and meeting materials are distributed in a timely manner and no less than five (5) business days before the meeting.
The Committee shall meet no less than four times per year or more frequently if circumstances or obligations require.
The time and place at which meetings of the Committee shall be held, and procedures at such meetings, shall be determined from time to time by the Committee. A meeting of the Committee may be called by letter, telephone, facsimile, email or other communication equipment by giving at least 48 hours' notice, provided that no notice of a meeting shall be necessary if all of the members are present either in person or by means of conference telephone, or if those absent have waived notice or otherwise signified their consent to the holding of such meeting.
Any member of the Committee may participate in the meeting of the Committee by means of conference telephone or other communication equipment, and the member participating in a meeting pursuant to this paragraph shall be deemed, for purposes hereof, to be present in person at the meeting.
The Committee shall keep minutes of its meetings which shall be submitted to the Board. The Committee may from time to time appoint any person, who need not be a member, to act as a secretary at any meeting.
The Committee may invite such officers, directors and employees of the Company and its subsidiaries as the Committee may see fit, from time to time, to attend meetings of the Committee.
Any matters to be determined by the Committee shall be decided by a majority of votes cast at a meeting of the Committee called for such purpose. Actions of the Committee may be taken by an instrument or instruments in writing signed by all of the members of the Committee, and such actions shall be effective as though they had been decided by a majority of votes cast at a meeting of the Committee called for such purpose. The Committee shall report its determinations to the Board at the next scheduled meeting of the Board, or earlier as the Committee deems necessary. All decisions or recommendations of the Committee shall require the approval of the Board prior to implementation, other than those relating to non-audit services and annual audit fees, which do not require the approval of the Board.
Duties and Responsibilities
The duties and responsibilities of the Committee shall be as follows:
A. Financial Reporting, and Disclosure:
i. Review and discuss with management and the external auditor at the completion of the annual examination:
(a) the Company's audited financial statements and related notes;
(b) the external auditor's audit of the financial statements and their report thereon;
(c) any significant changes required in the external auditor's audit plan;
(d) any serious difficulties or disputes with management encountered during the course of the audit; and
(e) other matters related to the conduct of the audit, which are to be communicated to the Committee under generally accepted auditing standards.
ii. Review and discuss with management and the external auditor at the completion of any review engagement or other examination, the Company's quarterly financial statements.
iii. Review and discuss with management the annual reports, the quarterly reports, the Management Discussion and Analysis, Annual Information Form, prospectus, and other disclosures including press releases and, if thought advisable, recommend the acceptance of such documents to the Board for approval.
iv. Review and discuss with management any guidance being, provided to shareholders on the expected future results and financial performance of the Company and provide their recommendations on such documents to the Board.
v. Inquire of the auditors about the quality and acceptability of the Company's accounting principles, including the clarity of financial disclosure and the degree of conservatism or aggressiveness of the accounting policies and estimates.
vi. Meet independently with the external auditor and management in separate executive sessions, as necessary or appropriate.
vii. Ensure that management has the proper systems in place so that the Company's financial statements, financial reports and other financial information satisfy legal and regulatory requirements. Based upon discussions with the external auditor and the financial statement review, if it deems appropriate, recommend to the Board the filing of the audited annual and unaudited quarterly financial statements.
viii. Oversee and enforce Company's public disclosure practices.
ix. Confirm and be satisfied that adequate procedures are in place for the review of the Company's public disclosure of financial information extracted or derived from the financial statements and periodically assess the adequacy of those procedures.
x. The Committee will, as applicable, establish procedures for:
(a) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and
(b) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
B. External Auditor:
i. Recommend to the Board the external auditor to be nominated and review the performance of the auditor, including the lead partner of the external auditor.
ii. Recommend to the Board the compensation of the external auditor.
iii. Oversee the work of external auditors engaged for the purpose of preparing or issuing an auditor's report or performing other audit, review or attest services for the Company, including the resolution of disagreements between management and the external auditor regarding financial reporting.
iv. Pre-approve all non-audit services to be provided by the external auditor.
v. Consider, in consultation with the external auditor, the audit scope and plan of the external auditor.
vi. Confirm with the external auditor and receive written confirmation at least once per year as to disclosure of any investigations or government enquiries, reviews or investigations of the outside auditor.
vii. Take reasonable steps to confirm the independence of the external auditor, which shall include:
(a) ensuring receipt from the external auditor of a formal written statement delineating all relationships between the external auditor and the Company, consistent with generally accepting auditing practices,
(b) considering and discussing with the external auditor any disclosed relationships or services, including non audit services, that may impact the objectivity and independence of the external auditor, and
(c) approve in advance any non audit related services provided by the auditor to the Company with a view to ensuring., independence of the auditor, and in accordance with any applicable regulatory requirements, including the requirements of the TSXV with respect to approval of non audit related serviced performed by the auditor.
C. Internal Controls and Audit:
i. Review and assess the adequacy and effectiveness of the Company's systems of internal and management information systems through discussion with management and the external auditor to ensure that the Company maintains appropriate systems, is able to assess the pertinent risks of the Company and that the risk of a material misstatement in the financial disclosures can be detected.
ii. Assess the requirement for the appointment of an internal auditor for the Company.
iii. Inquire of management and the external auditor about the systems of internal controls that management and the Board have established and the effectiveness of those systems. In addition, inquire of management and the external auditor about significant financial risks or exposures and the steps management has taken to minimize such risks to the Company.
iv. Establish, periodically review, and approve the Company's hiring policies regarding partners, employees and former partners and employees of the present and former External Auditor of the Company, as applicable.
Oversight Function
While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits or to determine that the Company's financial statements are complete and accurate or are in accordance with IFRS and applicable rules and regulations. These are the responsibilities of management and the external auditors. The Committee, the Chair, and any members identified as having accounting or related financial expertise, are members of the Board appointed to the Committee to provide broad oversight of the financial, risk and control related activities of the Company, and are specifically not accountable or responsible for the day-to-day operation or performance of such activities.
Although the designation of a member as having accounting or related financial expertise for disclosure purposes is based on that individual's education and experience, which that individual will bring to bear in carrying out his or her duties on the Committee, such designation does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the Committee and the Board in the absence of such designation. Rather, the role of a Committee member who is identified as having accounting or related financial expertise, like the role of all members, is to oversee the process, not to certify or guarantee the internal or external audit of the Company's financial information or public disclosure.
Independent Advisors
The Committee shall have the authority to retain such independent advisors as it may deem necessary or advisable for its purposes and communicate directly with such advisors. The expenses related to such engagements shall be determined by the Committee and funded by the Company.
Charter Review
The Committee will annually review and reassess the adequacy of this policy and submit any recommended changes to the Board for approval.
Adoption
This Policy was adopted by the Board on June 28, 2023.
Zentek Ltd.
Consolidated Financial Statements
For the years ended March 31, 2026 and 2025
(Expressed in Canadian Dollars)
ZENTEK LTD.
 |
Tel: 289 881 1111 | BDO Canada LLP |
| Fax: 905 845 8615 | 360 Oakville Place Drive, Suite 500 | |
| www.bdo.ca | Oakville ON L6H 6K8 Canada | |
| Report of Independent Registered Public Accounting Firm |
Shareholders and Board of Directors
Zentek Ltd.
Guelph, Ontario
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Zentek Ltd. (the "Company") as of March 31, 2026 and 2025, the related consolidated statements of loss and comprehensive loss, changes in equity and cash flows, for each of the years then ended, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at March 31, 2026 and 2025, and the results of its operations and its cash flows for each of the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).
Substantial Doubt About the Company's Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Chartered Professional Accountants, Licensed Public Accountants
We have served as the Company's auditor since 2022.
Oakville, Ontario
June 25, 2026
| 1 |
| ZENTEK LTD. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
| (Stated in Canadian Dollars) | As at March 31, 2026 $ |
As at March 31, 2025 $ |
||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash and cash equivalents | 1,302,738 | 121,481 | ||||
| Accounts and other receivables - net [note 4] | 371,250 | 1,202,745 | ||||
| Inventories [note 5] | 417,546 | 887,509 | ||||
| Prepaids and deposits | 185,718 | 278,051 | ||||
| Property held for sale - net [note 6] | - | 1,878,107 | ||||
| Total current assets | 2,277,252 | 4,367,893 | ||||
| Non-current assets | ||||||
| Inventories [note 5] | - | 1,294,339 | ||||
| Property and equipment - net [note 6] | 4,654,767 | 5,278,882 | ||||
| Exploration and evaluation assets [note 7] | 8,154,913 | 7,455,071 | ||||
| Total non-current assets | 12,809,680 | 14,028,292 | ||||
| Total assets | 15,086,932 | 18,396,185 | ||||
| LIABILITIES | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities [note 8] | 3,371,737 | 2,966,264 | ||||
| Current portion of lease liability [note 9] | 161,737 | 171,990 | ||||
| Current portion of long-term debt [note 10] | - | 346,747 | ||||
| Total current liabilities | 3,533,474 | 3,485,001 | ||||
| Non-current liabilities | ||||||
| Lease liability [note 9] | - | 161,737 | ||||
| Convertible debentures [note 11] | 1,751,314 | - | ||||
| Total non-current liabilities | 1,751,314 | 161,737 | ||||
| Total liabilities | 5,284,788 | 3,646,738 | ||||
| SHAREHOLDERS' EQUITY | ||||||
| Share capital [note 12(a)] | 92,306,064 | 89,477,168 | ||||
| Warrants [note 12(b)] | 577,581 | 89,737 | ||||
| Equity reserve [notes 12 (b) and 12(c)] | 6,760,855 | 8,563,163 | ||||
| Restricted stock units [note 12(d)] | 469,171 | - | ||||
| Shares to be issued [note 7(a)] | 472,500 | 472,500 | ||||
| Convertible debentures reserve [note 11] | 439,331 | - | ||||
| Deficit | (91,223,358 | ) | (83,853,121 | ) | ||
| Total shareholders' equity | 9,802,144 | 14,749,447 | ||||
| Total shareholders' equity and liabilities | 15,086,932 | 18,396,185 | ||||
| Nature of Business and Going Concern [note 1] | ||||||
| Commitments and Contingencies [note 18] | ||||||
| Subsequent Events [note 23] |
The accompanying notes are an integral part of these consolidated financial statements.
These consolidated financial statements were authorised for issue by the Board of Directors on June 25, 2026.
Approved on behalf of the Board of Directors:
| "Eric Wallman" | , Director |
| ZENTEK LTD. CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS |
| (Stated in Canadian Dollars) FOR THE YEARS ENDED MARCH 31 |
2026 $ |
2025 $ |
||||
| REVENUE | ||||||
| Net sales | 166,048 | 872,495 | ||||
|
COST OF SALES |
||||||
| Cost of sales | 242,971 | 508,163 | ||||
| Inventory write-down [note 5] | 1,596,000 | 136,447 | ||||
| 1,838,971 | 644,610 | |||||
| GROSS MARGIN | (1,672,923 | ) | 227,885 | |||
| EXPENSES | ||||||
| Accretion expense | 117,381 | - | ||||
| Depreciation and amortisation [note 6] | 526,405 | 600,322 | ||||
| Bad debts | 32,347 | - | ||||
| Consulting fees | 44,720 | 127,480 | ||||
| Directors fees [note 14] | 245,416 | 252,500 | ||||
| Insurance | 307,994 | 354,186 | ||||
| Investor relations and promotion | 84,861 | 94,411 | ||||
| Listing and filing fees | 259,487 | 222,945 | ||||
| Office expenses | 97,738 | 106,698 | ||||
| Professional fees | 1,095,872 | 2,288,633 | ||||
| Rent | 375,218 | 311,556 | ||||
| Research and development | 1,653,393 | 465,653 | ||||
| Salaries and benefits [note 14] | 2,811,087 | 3,023,656 | ||||
| Share-based compensation [notes 12(c), 12(d) and 14] | 1,256,134 | 1,529,934 | ||||
| Supplies and materials | 19,125 | 35,400 | ||||
| Travel | 112,073 | 165,741 | ||||
| Other expenses [note 21] | 266,457 | 254,183 | ||||
| 9,305,708 | 9,833,298 | |||||
| Loss before other income (expenses) | (10,978,631 | ) | (9,605,413 | ) | ||
| Interest income | 40,308 | 101,613 | ||||
| Interest expense | (139,657 | ) | (91,323 | ) | ||
| Gain (loss) on disposal of property and equipment [note 6] | 392,124 | (14,544 | ) | |||
| Other income (expense) | 52,893 | (429,991 | ) | |||
| Government grants [note 20] | 865,005 | - | ||||
| Total other income (expense) | 1,210,673 | (434,245 | ) | |||
| Net loss and comprehensive loss for the year | (9,767,958 | ) | (10,039,658 | ) | ||
| Basic and diluted net loss per share [note 19] | (0.09 | ) | (0.10 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
| 3 |
| ZENTEK LTD. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY |
| (Stated in Canadian Dollars) | Number of Shares |
Share Capital $ |
Warrants $ |
Equity Reserve $ |
Restricted Stock Units $ |
Shares to be Issued $ |
Convertible DebenturesReserve $ |
Deficit $ |
Total Shareholders' Equity $ |
||||||||||||||||||
| Balance as at March 31, 2024 | 100,819,577 | 86,105,945 | - | 10,216,329 | - | 472,500 | - | (76,621,563 | ) | 20,173,211 | |||||||||||||||||
| Issuance of units [note 12(a)] | 2,361,500 | 2,980,213 | 89,737 | - | - | - | - | - | 3,069,950 | ||||||||||||||||||
| Unit issue costs | - | (73,624 | ) | - | - | - | - | - | - | (73,624 | ) | ||||||||||||||||
| Stock options exercised [note 12(a)] | 1,312,751 | 607,500 | - | (375,000 | ) | - | - | - | - | 232,500 | |||||||||||||||||
| Stock options expired [note 12(c)] | - | - | - | (2,808,100 | ) | - | - | - | 2,808,100 | - | |||||||||||||||||
| Shares purchased for cancellation [note 12(a)] | (102,900 | ) | (142,866 | ) | - | - | - | - | - | - | (142,866 | ) | |||||||||||||||
| Recognition of share-based compensation [note 12(c)] | - | - | - | 1,529,934 | - | - | - | - | 1,529,934 | ||||||||||||||||||
| Net loss and comprehensive loss for the year | - | - | - | - | - | - | - | (10,039,658 | ) | (10,039,658 | ) | ||||||||||||||||
| Balance as at March 31, 2025 | 104,390,928 | 89,477,168 | 89,737 | 8,563,163 | - | 472,500 | - | (83,853,121 | ) | 14,749,447 | |||||||||||||||||
| Issuance of convertible debentures [note 11] | - | - | - | - | - | - | 439,331 | - | 439,331 | ||||||||||||||||||
| Issuance of shares [note 12(a)] | 650,798 | 702,838 | - | - | - | - | - | - | 702,838 | ||||||||||||||||||
| Issuance of units [note 12(a)] | 2,338,893 | 1,966,488 | 512,739 | - | - | - | - | - | 2,479,227 | ||||||||||||||||||
| Unit issue costs | - | (77,470 | ) | (20,200 | ) | - | - | - | - | - | (97,670 | ) | |||||||||||||||
| Broker warrants | - | (18,007 | ) | (4,695 | ) | 22,702 | - | - | - | - | - | ||||||||||||||||
| Restricted stock units expired [note 12(d)] | - | - | - | - | - | - | - | - | - | ||||||||||||||||||
| Stock options exercised [note 12(a)] | 411,383 | 255,047 | - | (214,252 | ) | - | - | - | - | 40,795 | |||||||||||||||||
| Stock options expired [note 12(c)] | - | - | - | (2,397,721 | ) | - | - | - | 2,397,721 | - | |||||||||||||||||
| Recognition of share-based compensation [note 12(c) and 12(d)] | - | - | - | 786,963 | 469,171 | - | - | - | 1,256,134 | ||||||||||||||||||
| Net loss and comprehensive loss for the year | - | - | - | - | - | - | - | (9,767,958 | ) | (9,767,958 | ) | ||||||||||||||||
| Balance as at March 31, 2026 | 107,792,002 | 92,306,064 | 577,581 | 6,760,855 | 469,171 | 472,500 | 439,331 | (91,223,358 | ) | 9,802,144 |
The accompanying notes are an integral part of these consolidated financial statements.
| 4 |
| ZENTEK LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (Stated in Canadian Dollars) FOR THE YEARS ENDED MARCH 31 |
2026 $ |
2025 $ |
||||
| OPERATING ACTIVITIES | ||||||
| Loss for the year | (9,767,958 | ) | (10,039,658 | ) | ||
| Items not affecting cash | ||||||
| Accretion expense | 117,381 | - | ||||
| Convertible debenture accrued interest | 97,261 | - | ||||
| Depreciation and amortisation [note 6] | 526,405 | 600,322 | ||||
| Gain on disposal of property | (392,124 | ) | 14,544 | |||
| Share-based compensation [note 12(c) and 12(d)] | 1,256,134 | 1,529,934 | ||||
| Change in valuation allowance on inventory [note 5] | 1,596,000 | 136,447 | ||||
| Net change in non-cash working capital balances [note 13] | 1,497,603 | 1,475,970 | ||||
| Cash flows used in operating activities | (5,069,298 | ) | (6,282,441 | ) | ||
| INVESTING ACTIVITIES | ||||||
| Loan receivable advanced | - | (2,587 | ) | |||
| Loan receivable repayment | - | 545,850 | ||||
| Mineral exploration and evaluation expenditures capitalised | (699,842 | ) | (183,214 | ) | ||
| Proceeds on sale of property | 2,369,961 | - | ||||
| Purchase of property and equipment [note 6] | (2,020 | ) | (1,398 | ) | ||
| Cash flows from investing activities | 1,668,099 | 358,651 | ||||
| FINANCING ACTIVITIES | ||||||
| Payments on lease liability [note 9] | (171,990 | ) | (151,129 | ) | ||
| Payments on long-term debt [note 10] | (346,747 | ) | (410,980 | ) | ||
| Net proceeds from convertible debentures issued [note 11] | 1,976,003 | - | ||||
| Proceeds from stock options exercised [note 12(a)] | 40,795 | 232,500 | ||||
| Shares issued [note 12(a)] | 702,838 | - | ||||
| Shares purchased for cancellation [note 12(a)] | - | (142,866 | ) | |||
| Units issued [note 12(a)] | 2,479,226 | 3,069,950 | ||||
| Unit issue costs | (97,669 | ) | (73,624 | ) | ||
| Cash flows from financing activities | 4,582,456 | 2,523,851 | ||||
| Change in cash and cash equivalents during the year | 1,181,257 | (3,399,939 | ) | |||
| Cash and cash equivalents, beginning of year | 121,481 | 3,521,420 | ||||
| Cash and cash equivalents, end of year | 1,302,738 | 121,481 | ||||
| Supplementary disclosures - see note 13 |
The accompanying notes are an integral part of these consolidated financial statements.
| 5 |
|
ZENTEK LTD. |
| (Stated in Canadian Dollars) AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
1. NATURE OF BUSINESS AND GOING CONCERN
Zentek Ltd. (the "Company") was incorporated on July 29, 2008 under the laws of the province of Ontario, Canada. The principal business of the Company is to develop opportunities in the graphene and related nano-materials industry based on its intellectual property, patents and Albany graphite. The address of the Company's executive office is 1123 York Road, Guelph, Ontario, N1E 6Z1, Canada.
These consolidated financial statements of the Company for the year ended March 31, 2026 were approved and authorised for issue by the Board of Directors on June 25, 2026.
In May 2026, the Company completed a private placement for gross proceeds of $18 million, which significantly strengthened its liquidity position (Note 23). As at March 31, 2026, the Company had not yet achieved profitable operations, had an accumulated deficit of $91.2 million, reported a net loss of $9.8 million and cash outflows from operating activities of $5.1 million, and expects to incur further losses in the development and commercialization of its products and technologies. These events and conditions indicate that a material uncertainty exists that may cast substantial doubt on the Company's ability to continue as a going concern. While the proceeds from the May 2026 private placement have significantly strengthened the Company's liquidity position, the Company remains dependent on the successful commercialization of its products and technologies, achieving profitable operations, and/or obtaining additional financing in the future.
The Company's ability to continue its development activities and realize its assets in the normal course of business is dependent upon its ability to generate sufficient revenues from the commercialization of its products and technologies, achieve profitable operations, and/or obtain additional financing in the future to fund its ongoing operations and development activities. Management's plans to address these uncertainties include utilizing the proceeds from the May 2026 private placement, continuing its commercialization efforts relating to its core technologies and products, pursuing strategic partnerships and business development opportunities, implementing cost management initiatives, and obtaining additional financing, if required. While management has historically been successful in raising capital and believes that additional financing will be available if required, there can be no assurance that such financing will be available on terms acceptable to the Company, or at all, or that the Company's commercialization initiatives will generate sufficient revenues to achieve profitable operations.
These consolidated financial statements are prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of operations.
These consolidated financial statements do not reflect the adjustments to the carrying value of assets and liabilities, the reported revenues and expenses, and the statement of financial position classifications that would be necessary if the going concern assumption was not appropriate. Any adjustments necessary to the consolidated financial statements if the Company ceases to be a going concern could be material.
|
6
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
2. MATERIAL ACCOUNTING POLICY INFORMATION
Statement of Compliance
These consolidated financial statements, including comparatives, have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) Accounting Standards as issued by the International Accounting Standards Board (IASB).
Basis of Presentation
The consolidated financial statements have been prepared using the measurement bases specified by IFRS Accounting Standards as issued by the IASB for each type of asset, liability, income and expense. The measurement bases are more fully described in the accounting policies below. The consolidated financial statements are prepared on the historical cost basis except for the debt component of the convertible debentures which are valued at fair value.
The preparation of consolidated financial statements in conformity with IFRS Accounting Standards as issued by the IASB requires management to make judgements, estimates, and assumptions [note 3] that affect the application of policies and reported amounts of assets and liabilities and disclosures of contingent assets and contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the year.
The consolidated financial statements consolidate the accounts of the Company and all of its subsidiaries. The Company has the following wholly owned subsidiaries: Triera Biosciences Ltd., 1000114904 Ontario Inc., Zentek USA Inc. and Albany Graphite Corp.
Foreign Currency Translation
The consolidated financial statements are presented in Canadian dollars, which is the functional currency of the Company and its subsidiaries. In preparing the consolidated financial statements, transactions in currencies other than the entity's functional currency are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Gains/losses on translation are recorded in profit or loss.
Financial Instruments
Financial assets
Cash and amounts receivable held for collection of contractual cash flows are measured at amortised cost.
Initial recognition and measurement
The Company determines the classification of financial assets at the time of initial recognition based on the Company's business model and the contractual terms of the cash flows.
All financial assets are recognised initially at fair value plus directly attributable transaction costs on the trade date at which the Company becomes a party to the contractual provisions of the instrument.
Subsequent measurement - financial assets at amortised cost
After initial recognition, financial assets measured at amortised cost are subsequently measured at the end of each reporting period at amortised cost using the Effective Interest Rate ("EIR") method. Amortised cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR.
|
7
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|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
Derecognition
A financial asset is derecognised when the contractual rights to the cash flows from the asset expire, or the Company no longer retains substantially all the risks and rewards of ownership.
Impairment of financial assets
The Company's only financial assets subject to impairment are accounts and other receivables and loan receivable, which are measured at amortised cost. The Company has elected to apply the simplified approach to impairment as permitted by IFRS 9, which requires the expected lifetime loss to be recognised at the time of initial recognition of the receivable. To measure estimated credit losses, accounts receivable have been grouped based on shared credit risk characteristics, including the number of days past due. An impairment loss is reversed in subsequent periods if the amount of the expected loss decreases and the decrease can be objectively related to an event occurring after the initial impairment was recognised.
Financial liabilities
The Company's financial liabilities measured at amortised cost correspond to accounts payable and long-term debt.
Initial recognition and measurement
Financial liabilities are measured at amortised cost. The Company's financial liabilities include accounts payable and accrued liabilities and long-term debt which are measured at amortised cost. All financial liabilities are recognised initially at fair value and in the case of long-term debt, net of directly attributable transaction costs.
Subsequent measurement - financial liabilities at amortised cost
After initial recognition, financial liabilities measured at amortised cost are subsequently measured at the end of each reporting period at amortised cost using the EIR. Amortised cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires with any associated gain or loss recognised in other income or expense in the statements of loss.
Assets held for sale
The Company has accounted for assets held for sale in accordance with IFRS 5 Non-current assets held for sale and discontinued operations. Items classified as held for sale are non-current assets and liabilities that will be recovered principally through a sale transaction rather than continual use. This condition is satisfied when the asset is available for immediate sale in its present condition, management is committed to the sale, and it is highly probable to occur within one year. Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less selling costs and, if significant, are presented separately from other assets as current assets on the statements of financial position. If assets are held for longer than 12 months, the Company records a provision for the expected decrease in sales value.
Gains or losses arising on the disposal of assets held for sale are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss.
|
8
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
2. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Exploration and Evaluation Assets
Exploration and evaluation assets include the costs of acquiring licenses, costs associated with exploration and evaluation activity (e.g. geological, geophysical studies, exploratory drilling and sampling), and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination or asset purchase. The Company follows the practice of capitalizing all costs related to the acquisition of, exploration for and evaluation of mineral claims. Costs incurred before the Company has obtained the legal rights to explore an area are recognised as expenses of the Company.
Capitalised costs are only allocated to the extent that these costs can be related directly to operational activities in the relevant area of interest where it is considered likely to be recoverable by future exploitation or sale or where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves.
Exploration and evaluation assets are assessed for impairment at each financial reporting date or when facts and circumstances suggest that the carrying amount exceeds the recoverable amount. The aggregate costs related to abandoned mineral claims are charged to operations at the time of any abandonment or when it has been determined that there is evidence of a permanent impairment.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within property, plant and equipment.
Recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.
Property and Equipment
Equipment is carried at acquisition cost less subsequent depreciation and impairment losses. Depreciation is recognised on a declining balance basis over the estimated useful lives of the equipment less estimated residual value. The rates applicable are:
|
Building |
4% |
|
Plant and equipment |
Straight-line over 20 years |
|
Office furniture and equipment |
20% |
|
Leasehold improvements |
Straight-line over lower of term of lease or economic life |
|
Right of Use Assets |
Straight-line over lower of term of lease or economic life |
Material residual value estimates and estimates of useful life are updated as required, but at least annually.
Gains or losses arising on the disposal of equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss.
|
9
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
2. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Impairment of Non-Financial Assets
At each financial reporting date, the carrying amounts of the Company's non-financial assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair values less costs to sell, and value in use.
Fair value is determined as the amount that would be obtained from the sale of the asset in an arm's length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognised in the profit or loss for the period.
For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. When an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
Tangible assets that have been impaired in prior periods are tested for possible reversal of impairment whenever events or changes in circumstances indicate that the impairment has reversed. If the impairment has reversed, the carrying amount of the asset is increased to its recoverable amount but not beyond the carrying amount that would have been determined had no impairment loss been recognized for the asset in the prior periods. A reversal of an impairment loss is recognized into earnings immediately.
Share Capital
Share capital represents the fair value of consideration received, less related costs.
Warrants
Warrants are recorded at their fair value on the date of issue, net of issue costs. The Company uses the Black-Scholes option pricing model to estimate the fair value of warrants issued. On the exercise of warrants, consideration received and the accumulated warrant value attributed to the portion exercised is credited to share capital. For those warrants that expire after vesting, the recorded value is transferred to deficit.
|
10
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
2. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Units Issued (Common Shares with Warrants)
The Company may issue units consisting of common shares and warrants in public or private offerings. Each unit typically consists of one common share and a fraction or whole of a common share purchase warrant. The Company accounts for the issuance of such units in accordance with IAS 32 - Financial Instruments: Presentation and IFRS 9 - Financial Instruments, as follows:
- The common share component is classified as equity and measured at the residual amount after determining the fair value of any financial liability components.
- The warrant component is evaluated to determine whether it meets the definition of an equity instrument under IAS 32. If the warrants are:
- Equity-classified (e.g., fixed-for-fixed in the entity's own equity): the allocated amount is recorded within equity (typically as "Warrants").
- Liability-classified (e.g., cash-settled or with variable settlement terms): the fair value of the warrants is recorded as a financial liability at initial recognition, with subsequent changes in fair value recognized in profit or loss.
The allocation of proceeds from unit issuances is performed using the relative fair value method, unless the warrants are classified as liabilities. In that case, the liability component is measured first at fair value, with the residual amount allocated to equity.
Transaction costs directly attributable to the issuance of equity instruments are deducted from equity, net of any related tax effects. Costs attributable to the issuance of financial liabilities are expensed as incurred or included in the initial carrying amount of the liability as appropriate.
Share-Based Payments
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in the share-based payment note. See note 12(c).
The fair value determined at the grant date of the equity-settled share-based payments is expensed over the period during which the employee becomes unconditionally entitled to equity instruments, based on the Company's estimate of equity instruments that will eventually vest. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.
Charges for options that are forfeited before vesting are reversed from share-based payment reserve and credited to deficit. For those options that expire after vesting, the recorded value is transferred to deficit.
On the exercise of options, consideration received and the accumulated option value attributed to the portion exercised is credited to share capital.
|
11
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
2. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Cash and Cash Equivalents
The Company's policy is to disclose cash, bank account balances, cashable investment-grade deposit certificates and non-cashable investment-grade deposit certificates that are readily convertible to a known amount of cash and be subject to an insignificant risk of changes in value as cash and cash equivalents. Cash and cash equivalents are held in Canadian chartered banks or financial institutions controlled by a Canadian chartered bank.
Segment Reporting
Segment results that are reported to the Chief Operating Decision Makers, being the Company's Board of Directors and senior leadership team, include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Operating segments are aggregated if they are similar and demonstrate similar economic characteristics. Unallocated items comprise mainly corporate assets (primarily the Company's headquarters), and head office expenses.
Loss per Share
Basic loss per share is calculated using the weighted average number of shares outstanding. In order to determine diluted loss per share, any proceeds from the exercise of dilutive stock options and warrants would be used to repurchase common shares at the average market price during the period, with the incremental number of shares being included in the denominator of the diluted loss per share calculation. The diluted loss per share calculation excludes any potential conversion of warrants and options that would increase earnings per share or decrease loss per share. The outstanding stock options and warrants to purchase common shares disclosed in note 12 were not included in the computation of the diluted loss per share for the periods presented because the effect would be anti-dilutive.
Income Taxes
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other comprehensive income or directly in equity. Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the consolidated financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period, adjusted for amendments to tax payable with regards to previous years.
Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill, or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realization, provided they are enacted or substantively enacted by the end of the reporting period. Deferred tax liabilities are always provided for in full. Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against future taxable income. The Company has not recognised deferred tax assets to the extent that the Company does not consider it probable that a deferred tax asset will be recovered.
Deferred tax assets and liabilities are offset only when the Company has a right and intention to offset current tax assets and liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as a component of taxable income or expense in profit or loss, except where they relate to items that are recognised in other comprehensive income or directly in equity, in which case the related deferred tax is also recognised in other comprehensive income or equity, respectively.
|
12
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
Restoration, Rehabilitation, and Environmental Obligations
An obligation to incur restoration, rehabilitation and environmental costs arises when the Company has a present legal or constructive obligation caused by the exploration, development or ongoing production of a mineral property interest. Such costs arising from the decommissioning of plant and other site preparation work, discounted to their net present value, are provided for and capitalised at the start of each project to the carrying amount of the asset, as soon as the obligation to incur such costs arises. Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net present value. These costs are charged against profit or loss over the economic life of the related asset, through amortization using either the units-of-production or the straight-line method. The related liability is adjusted for each period for the unwinding of the discount rate and for changes to the current market-based discount rate, amount or timing of the underlying cash flows needed to settle the obligation. Costs for restoration of subsequent site damage which is created on an ongoing basis during production are provided for at their net present values and charged against profits as extraction progresses. The Company had no material restoration, rehabilitation and environmental obligations as at March 31, 2026 or 2025 as the disturbance to date is minimal.
Interest
Interest income and expenses are reported on an accrual basis using the effective interest method.
Leases
The Company assesses at inception of a contract, whether the contract is, or contains a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Company assesses whether the customer has the following through the period of use:
• The right to obtain substantially all of the economic benefits from use of the identified asset; and
• The right to direct the use of the identified asset.
At the lease commencement date, the Company recognises a right-of-use asset and a lease liability. The right-of-use asset is initially measured at cost. The cost of the right-of-use asset is comprised of the initial amount of the lease liability, any lease payments made at or before the commencement date less any lease incentives received, initial direct costs incurred by the Company, and an estimate of the costs to be incurred by the Company in dismantling and removing the underlying asset and restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.
After the commencement date, the Company measures right-of-use assets related to property and equipment by applying the cost model, whereby the right-of-use asset is measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liability. The right-of-use asset is depreciated using the straight-line method from the commencement date to the end of the lease term or the end of the useful life of the right-of-use asset. The estimated useful life of the right-of-use assets are determined on the same basis as those of property, plant and equipment. The determination of the depreciation period is dependent on whether the Company expects that the ownership of the underlying asset will transfer to the Company by the end of the lease term or if the cost of the right-of-use asset reflects that the Company will exercise a purchase option.
|
13
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
Leases (continued)
The lease liability is initially measured at the present value of the lease payments not paid at the lease commencement date, discounted using the interest rate implicit in the lease or the Company's incremental borrowing rate, if the interest rate implicit in the lease cannot be readily determined. The lease payments included in the measurement of the lease liability comprise of fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or rate, amounts expected to be payable by the Company under a residual value guarantee, the exercise price of a purchase option that the Company is reasonably certain to exercise, and payment of penalties for terminating the lease if the lease term reflects the Company exercising an option to terminate the lease. After the commencement date, the Company measures the lease liability at amortised cost using the effective interest method.
The Company remeasures the lease liability when there is a change in the lease term, a change in the Company's assessment of an option to purchase the underlying asset, a change in the Company's estimate of amounts expected to be payable under a residual value guarantee, or a change in future lease payments resulting from a change in an index or a rate used to determine those payments. On remeasurement of the lease liability, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Company has elected to not recognise right-of-use assets and lease liabilities for short-term leases of property and equipment and low value leases of property and equipment. Short-term leases are leases with a term of twelve months or less. The Company recognises the lease payments associated with these leases as an expense on either a straight-line basis over the lease term or another systematic basis if that basis is more representative of the pattern of the lessee's benefit.
Inventories
Inventories are comprised of raw materials. Inventories are recorded at the lower of cost and net realizable value. Cost is determined on a standard cost basis, and includes the purchase price and other costs, such as import duties, taxes and transportation costs. Inventory cost is determined on a first-in, first-out basis and any trade discounts and rebates are deducted from the purchase price. Raw material costs include the purchase cost of the materials and freight-in. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and selling costs.
Where inventory is not expected to be sold within a year of the date of statement of financial position, it is presented as a non-current asset.
Government grants
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises expenses as related costs for which funded expenditures are incurred. Government grants are recognised when there is reasonable assurance that the Company will comply with the terms and conditions associated with the grants and the grants will be received. An unconditional government grant is recognised in profit or loss when the Company is entitled to receive the grant funding.
|
14
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
2. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
Revenue Recognition
The Company's accounting policy for revenue recognition under IFRS 15, Revenue from Contracts with Customers, follows a five-step model to determine the amount and timing of revenue to be recognized:
1. Identifying the contract with a customer;
2. Identifying the performance obligations within the contract;
3. Determining the transaction price;
4. Allocating the transaction price to the performance obligations; and
5. Recognizing revenue when/as performance obligation(s) are satisfied.
Revenue includes both the sale of products and services. The Company enters into sales contracts with its customers that outline the payment, shipping and return policies under these commercial arrangements. The performance obligation within the sales contracts is primarily the delivery of the Company's patented antimicrobial coating (ZenGUARDTM) technology for use on personal protective equipment including masks. These products are sold for contractually determined prices that include consideration for the products delivered. The transaction price is allocated to the masks based on their selling price and is recognized when the control of these products is obtained by the Company's customers which is generally upon delivery.
Where the consideration payable by the Company's customers includes volume rebates and merchandise discounts, they are considered in determining the transaction price and are estimated and recognised at the time of the sale as a deduction against recognized revenue. To date, these rebates and discounts have been immaterial.
Through its wholly owned subsidiary, Triera Biosciences Ltd., the Company recognizes service revenue to develop multivalent aptamer technology when the Company enters into contracts with its customers that outline the specific aptamer technology to be developed, outline the delivery terms and pricing arrangements. The performance obligation within the sales contracts is primarily the development of the aptamer technology including the aptamer itself. These services are sold for contractually determined prices that include specific timelines. The service revenue is recognized upon the delivery of the aptamer technology to the customer within the agreed upon timeline.
Convertible debentures
The Company's convertible debentures are segregated into their debt and equity elements at the date of issue, based on their initial fair values. The debt element of the instruments is classified as a liability, and recorded as the present value of the Company's obligation to make future interest payments in cash, and settle the redemption value of the instrument in cash or shares. The carrying value of the debt element is accreted to the original face value of the instruments, over their deemed life, using the effective interest method. The equity element equals the difference between the fair value of the convertible debenture as a whole and the fair value of the liability element.
On conversion, if the Company settles in shares, the carrying amount of the equity element and the carrying amount of the debt element, including any accrued interest, are reclassified to share capital. Alternatively, if the Company settles in cash, any gain/loss arising from extinguishment of the debentures are recorded in profit (loss) of the current year. Any gain/loss arising from the settlement of the equity element is recognized in equity.
In the event that the instruments are not converted and the conversion option expires at maturity, the Company accounts for the settlement of the instruments at redemption value, which is equal to the stated principal amount of the instruments. The debt element is derecognized, and the carrying amount of the equity element is reclassified to contributed equity. If the Company settles the debt element through issuance of shares, the redemption value of the debt element is credited to share capital.
|
15
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
2. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
New Standards, Interpretations and Amendments Adopted from April 1, 2025
Certain IFRS accounting standards were issued that were mandatory for accounting periods beginning on or after April 1, 2025. Many have been excluded as management does not expect them to have a material effect. The following amendments are effective for the year beginning April 1, 2025:
IAS 21 - The Effects of Changes in Foreign Exchange Rates
In August 2023, the International Accounting Standards Board (IASB) issued narrow-scope amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates, which were incorporated into Part I of the CPA Canada Handbook - Accounting in November 2023. The amendments specify how to determine whether a currency is exchangeable into another currency and how to determine the spot exchange rate when a currency lacks exchangeability.
A currency is exchangeable into another currency when an entity is able to obtain the other currency within a time frame that allows for a normal administrative delay and through a market or exchange mechanism in which an exchange transaction would create enforceable rights and obligations.
An entity assesses whether a currency is exchangeable into another currency at the measurement date and for a specified purpose. If an entity is able to obtain no more than an insignificant amount of the other currency at the measurement date for the specified purpose, the currency is not exchangeable into the other currency.
When a currency is not exchangeable into another currency at a measurement date, an entity is required to estimate the spot exchange rate as the rate at which an orderly exchange transaction would take place at the measurement date between market participants under prevailing economic conditions.
When an entity estimates a spot exchange rate because a currency is not exchangeable into another currency, the amendments require an entity to disclose information that enables the users of the financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity's financial performance, financial position and cash flows, including the risks to which the entity is exposed because of the currency not being exchangeable into the other currency.
There was no material impact to the financial statement of the Company upon adoption of this standard.
|
16
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
2. MATERIAL ACCOUNTING POLICY INFORMATION (continued)
New Standards, Interpretations and Amendments not yet Effective
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the Company has decided not to adopt early.
The following amendments are effective for the year beginning April 1, 2026:
Classification and Measurement of Financial Instruments (Amendments to IFRS 7 Financial Instruments: Disclosures and IFRS 9 Financial Instruments)
Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 7 and IFRS 9)
The following amendments are effective for the year beginning April 1, 2027:
IFRS 18 Presentation and Disclosure in Financial Statements
The Company is currently assessing the impact of these new accounting standards and amendments.
In May 2024, the IASB issued amendments to IFRS 9, Financial Instruments, and IFRS 7, Financial Instruments: Disclosures, relating to the classification and measurement of financial instruments and associated disclosure requirements. The amendments clarify the derecognition of financial liabilities settled through electronic payment systems, provide additional guidance for assessing contractual cash flow characteristics of financial assets, and introduce enhanced disclosure requirements for certain equity instruments designated at fair value through other comprehensive income and financial instruments with contingent features. The amendments are effective for annual reporting periods beginning on or after January 1, 2026, with earlier application permitted.
IFRS 18 Presentation and Disclosure in Financial Statements, which was issued by the IASB in April 2024 supersedes IAS 1 and will result in major consequential amendments to IFRS Accounting Standards including IAS 8 Basis of Preparation of Financial Statements (renamed from Accounting Policies, Changes in Accounting Estimates and Errors). Even though IFRS 18 will not have any effect on the recognition and measurement of items in the consolidated financial statements, it is expected to have a significant effect on the presentation and disclosure of certain items. These changes include categorisation and sub-totals in the statement of profit or loss, aggregation/disaggregation and labelling of information, and disclosure of management-defined performance measures.
|
17
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
3. CRITICAL JUDGEMENTS AND ESTIMATION UNCERTAINTIES
The preparation of consolidated financial statements in conformity with IFRS Accounting Standards as issued by the IASB requires the Company's management to make judgements, estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and related notes. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results may differ from those estimates and these differences could be material.
The areas which require management to make significant judgements, estimates and assumptions in determining carrying values include, but are not limited to:
Inventory
Judgement is required in determining whether net realizable value should be evaluated on a product by product basis or if products cannot be evaluated separately from other products in inventory and should be grouped with similar products. A provision for obsolete inventory is established based on materials on hand that can no longer be used for customer orders based on a review of historical and forecast sales, as well as a technical review to see if such materials are still viable.
The carrying value of raw materials includes a significant quantity of graphene oxide inventory, whose valuation considers factors including inventory age, market demand, expected selling prices, available sales channels and the Company's intended method of disposition. During the year, management reassessed the expected recoverability of this inventory and concluded that, due to limited market demand, the inventory is unlikely to be sold for amounts in excess of nominal proceeds. As management intends to dispose of the inventory and expects only nominal proceeds to be realized upon disposition, the Company recorded a provision to reduce the carrying value of the affected inventory to its estimated net realizable value.
This assessment required significant judgment regarding the expected future sale proceeds that could be realized from the inventory. Changes in market conditions, buyer demand or actual disposal proceeds may result in future adjustments to the carrying value of inventory.
Expected credit loss allowance and provision
The Company determines an expected credit loss allowance for trade receivables based on the estimated expected lifetime credit loss, considering the actual credit loss in prior years and forward-looking estimates of expected collections. This estimate varies depending on the nature of the trade receivables, the majority of which are associated with the health sciences business; however, also includes receivables from government agencies. The loss allowance is reviewed on a quarterly basis and any change in estimate is accounted for prospectively. Collectivity of customer balances classified as trade receivables may vary from the Company's estimation. The Company also assesses the expected credit loss of non-trade financial assets, such as the loan receivable which is secured by property mortgages, to determine if an allowance is required.
Impairment (impairment reversal) of exploration and evaluation assets
While assessing whether any indications of impairment or impairment reversal exist for exploration and evaluation assets, consideration is given to both external and internal sources of information. Information the Company considers includes changes in the market, economic and legal environment in which the Company operates that are not within its control that could affect the recoverable amount of exploration and evaluation assets. Internal sources of information include the manner in which exploration and evaluation assets are being used or are expected to be used and indications of expected economic performance of the assets.
|
18
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
3. CRITICAL JUDGEMENTS AND ESTIMATION UNCERTAINTIES (continued)
Impairment of property and equipment
Judgements are required to assess when internal or external indicators of impairment or impairment reversal exist, and impairment testing is required. Management considers internal and external sources of information including forecasted sales, cashflows and expected production volumes. judgement is required to assess these internal and external factors when determining if the carrying amount of an asset is impaired, or in the case of a previously impaired asset, whether the carrying amount of the asset has been restored.
Convertible debentures
The accounting for the Company's convertible debentures requires management to exercise significant judgment and make estimates in determining the appropriate classification and measurement of the instrument and any embedded features. Management assesses the terms of the debentures to determine whether the conversion feature and any other embedded derivatives should be classified as equity, a financial liability, or a derivative liability in accordance with IFRS Accounting Standards.
Where applicable, the fair value of embedded derivative liabilities is determined using valuation techniques that require the use of assumptions and estimates, including the Company's share price, expected volatility, risk-free interest rates, expected term and probability of conversion or other settlement events. Changes in these assumptions could result in material changes to the carrying value of the convertible debentures and related gains or losses recognized in the statement of loss and comprehensive loss.
Management also applies judgment in determining the effective interest rate used to allocate the proceeds between the liability and equity components of the convertible debentures, where applicable.
Share-based payments
Management determines costs for share-based payments using market-based valuation techniques. The fair value of the market-based and performance-based share awards are determined at the date of grant using generally accepted valuation techniques. Assumptions are made and judgement used in applying valuation techniques. These assumptions and judgements include estimating the future volatility of the stock price, expected dividend yield, future employee turnover rates and future employee stock option exercise behaviors and corporate performance. Such judgements and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates.
Contingencies
By their nature, contingencies will only be resolved when one or more future events transpire. The assessment of contingencies inherently involves estimating the outcomes of future events. The Company has disclosed its disputes and was required to exercise judgement in assessing the recorded amounts.
|
19
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
4. ACCOUNTS AND OTHER RECEIVABLES - NET
|
March 31, 2026 $ |
March 31, 2025 $ |
|||||||
| HST recoverable | 119,870 | 345,422 | ||||||
| Other receivables | 24,225 | 50,908 | ||||||
| Accrued interest receivable on guaranteed investment certificates | - | 62 | ||||||
| Government grants receivable | 148,111 | - | ||||||
| Holdbacks receivable | 60,362 | - | ||||||
| Trade receivables | 51,029 | 806,353 | ||||||
| Less: expected credit loss on trade receivables | (32,347 | ) | - | |||||
| Total accounts and other receivables | 371,250 | 1,202,745 | ||||||
5. INVENTORIES
|
March 31, 2026 $ |
March 31, 2025 $ |
||||||||
| Raw materials | 2,196,063 | 2,193,242 | |||||||
| Finished goods | 157,483 | 328,606 | |||||||
| Allowance for impairment | (1,936,000 | ) | (340,000 | ) | |||||
| Total inventories | 417,546 | 2,181,848 | |||||||
| Less: non-current portion | - | (1,294,339 | ) | ||||||
| Total current portion of inventories | 417,546 | 887,509 | |||||||
The change in the allowance for impairment of inventory in the amount of $1,596,000 (March 31, 2025: $136,447) was recognized as an expense and included in cost of sales and includes a provision for excess graphene oxide of $1,701,900. The write-down primarily relates to aged graphene oxide inventory for which management no longer expects to realize amounts substantially in excess of nominal proceeds through sale. Accordingly, the affected inventory was written down to its estimated recoverable amount, which management determined to be nominal.
The amount of inventories recognised as an expense and included in cost of sales for the year ended March 31, 2026 was $1,838,971, (2025: $644,610).
|
20
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
6. PROPERTY AND EQUIPMENT
| Land and Building |
Plant and Equipment |
Office furniture and Equipment |
Leasehold Improvements |
Right of Use Assets |
Under Construction |
Total | |||||||||||||||
| Cost | |||||||||||||||||||||
| Balance at April 1, 2024 | 2,064,993 | 5,852,843 | 247,532 | 354,705 | 959,788 | 52,709 | 9,532,570 | ||||||||||||||
| Additions | - | - | 1,398 | - | - | - | 1,398 | ||||||||||||||
| Disposals | - | - | (36,933 | ) | - | - | - | (36,933 | ) | ||||||||||||
| Transfers | - | - | - | - | - | - | - | ||||||||||||||
| Balance at March 31, 2025 | 2,064,993 | 5,852,843 | 211,997 | 354,705 | 959,788 | 52,709 | 9,497,035 | ||||||||||||||
| Additions | - | - | 2,020 | - | - | - | 2,020 | ||||||||||||||
| Disposals | (2,064,993 | ) | (83,573 | ) | (158,397 | ) | - | - | - | (2,306,963 | ) | ||||||||||
| Transfers | - | - | - | - | - | - | - | ||||||||||||||
| Balance at March 31, 2026 | - | 5,769,270 | 55,620 | 354,705 | 959,788 | 52,709 | 7,192,092 | ||||||||||||||
| Accumulated Depreciation | |||||||||||||||||||||
| Balance at April 1, 2024 | 154,837 | 709,333 | 118,501 | 274,540 | 504,902 | - | 1,762,113 | ||||||||||||||
| Depreciation for the year | 32,049 | 354,876 | 25,244 | 28,271 | 159,882 | - | 600,322 | ||||||||||||||
| Disposals | - | - | (22,389 | ) | - | - | - | (22,389 | ) | ||||||||||||
| Transfers | - | - | - | - | - | - | - | ||||||||||||||
| Balance at March 31, 2025 | 186,886 | 1,064,209 | 121,356 | 302,811 | 664,784 | - | 2,340,046 | ||||||||||||||
| Depreciation for the year | - | 325,655 | 12,159 | 28,271 | 160,320 | - | 526,405 | ||||||||||||||
| Disposals | (186,886 | ) | (39,005 | ) | (103,235 | ) | - | - | - | (329,126 | ) | ||||||||||
| Transfers | - | - | - | - | - | - | - | ||||||||||||||
| Balance at March 31, 2026 | - | 1,350,859 | 30,280 | 331,082 | 825,104 | - | 2,537,325 | ||||||||||||||
| Carrying Amounts | |||||||||||||||||||||
| Balance at March 31, 2025 | 1,878,107 | 4,788,634 | 90,641 | 51,894 | 295,004 | 52,709 | 7,156,989 | ||||||||||||||
| Less: property held for sale | (1,878,107 | ) | - | - | - | - | - | (1,878,107 | ) | ||||||||||||
| Balance at March 31, 2025 | - | 4,788,634 | 90,641 | 51,894 | 295,004 | 52,709 | 5,278,882 | ||||||||||||||
| Balance at March 31, 2026 | - | 4,418,411 | 25,340 | 23,623 | 134,684 | 52,709 | 4,654,767 |
The Company's property and equipment includes an asset under construction in the amount of $52,709 (March 31, 2025: $52,709) related to costs incurred for a production line at the silver-graphene oxide pilot plant. Depreciation was not recorded on assets under construction until they were put into use.
On October 18, 2024, the Company listed to sell 24 Corporate Court in Guelph, Ontario which was the registered head office of the Company and was held for sale at March 31, 2025. On April 15, 2025, the Company announced it had entered into an agreement of purchase and sale for 24 Corporate Court in Guelph, Ontario. The carrying value of the land and building at March 31, 2025 was $1,878,107 and was disclosed separately as a current asset in the Consolidated Statements of Financial Position as Property held for sale at March 31, 2025 and is applicable to the Intellectual Property Development segment. On May 15, 2025, the Company announced the completed sale for $2,500,000 and leased back the property from the purchaser until January 31, 2026. On December 1, 2025, the Company reallocated its laboratory to a new facility in Guelph, Ontario. The sale resulted in a gain on disposal of $488,829 which is included in Gain (loss) on disposal of property and equipment.
|
21
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
7. EXPLORATION AND EVALUATION PROPERTY
The 100%-owned Albany Graphite Deposit (the "Albany Property") consists of 521 mining claims held by the Company's subsidiary Albany Graphite Corp. and is located north of Lake Superior and southwest of James Bay in Northern Ontario, Canada. During the year ended March 31, 2013, the Company reached an agreement with the optionor pursuant to the following terms and conditions:
a) The Company will issue to the optionor a total of 1,250,000 common shares. Total shares remaining to be issued are 750,000 common shares valued at $472,500 based on their fair market value on the date of the agreement;
b) The Company granted the optionor a net smelter return royalty of 0.75% on the 4F claim block, of which 0.5% can be purchased at any time for $500,000; and
c) The agreement provides a clawback right that allows the optionor to reduce the Company's interest in the other claims to 30% subsequent to the exercise of the second option by giving notice within 30 days that the optionor intends to commence sole funding up to completion of a feasibility study within 48 months and within 30 days deliver a payment of $27,500,000.
| Albany Property | |||
| $ | |||
| Balance at March 31, 2024 | 7,271,857 | ||
| Expenditures capitalized | 183,214 | ||
| Balance at March 31, 2025 | 7,455,071 | ||
| Expenditures capitalized | 699,842 | ||
| Balance at March 31, 2026 | 8,154,913 |
|
22
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
|
March 31, 2026 $ |
March 31, 2025 $ |
|||||
| Trade payables | 2,084,152 | 2,006,918 | ||||
| Accrued liabilities | 879,378 | 439,346 | ||||
| Flow-through share subscribers' income tax | 397,382 | 427,000 | ||||
| Part XII.6 tax payable | 10,825 | 93,000 | ||||
| Total accounts payable and accrued liabilities | 3,371,737 | 2,966,264 |
In January 2025, the Canada Revenue Agency ("CRA") completed its audit of the Company's 2018 and 2019 renunciation of certain Canadian exploration expenses ("CEE") in favour of subscribers of flow-through share private placements that closed on December 21, 2018 and December 20, 2019 (the "Flow-Through Financings") for aggregate proceeds of $4,210,000.
In February 2025, the Company received a Notice of Reassessment ("NOR") from CRA in respect of its 2018 Flow-Through Financing. This NOR assessed a reduction in amounts previously renounced and resulted in additional Part XII.6 tax of $59,693.
In October 2025, the Company received a Notice of Reassessment ("NOR") from CRA in respect of its 2019 Flow-Through Financing. This NOR assessed a reduction in amounts previously renounced and resulted in additional Part XII.6 tax of $22,482.
The Company has estimated its potential Part XII.6 liability as a result of the CRA audit to be $93,000. The reduction in previously provided renunciations may also result in an additional obligation for the Company to indemnify certain flow-through shareholders due to reductions in previously flowed through CEE deductions. Management has estimated this indemnification obligation to be $427,000.
A provision of $408,207 has been recognized for this liability and is included in accounts payable and accrued liabilities. $10,825 of this liability consists of management's estimate of Part XII.6 tax owing and $397,382 consists of management's estimate of the Company's indemnification obligation.
A continuity of the potential estimated liability associated with the CRA notices of reassessment is shown below:
| Total estimated Part XII.6 liability | $ | 93,000 | |
| Payments made to date | $ | (82,175 | ) |
| Estimated Part XII.6 liability as at March 31, 2026 | $ | 10,825 | |
| Total estimated indemnification obligation | $ | 427,000 | |
| Payments made to date | $ | (29,618 | ) |
| Estimated indemnification obligation as at March 31, 2026 | $ | 397,382 |
|
23
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
9. LEASE LIABILITY
During the year ended March 31, 2021, the Company entered into a lease agreement for its manufacturing facility in Guelph, Ontario. The initial term of the lease was for three years commencing on February 1, 2021, subject to a right of extension. In July 2023, the Company acted upon the renewal option for an additional 36 months, extending to January 31, 2027.
The lease liability relates to the above noted agreement. The lease liability as at March 31, 2026 and March 31, 2025 is as follows:
|
March 31, 2026 $ |
March 31, 2025 $ |
|||||
| Lease liability | 161,737 | 333,727 | ||||
| Less: current portion | (161,737 | ) | (171,990 | ) | ||
| Long-term portion | - | 161,737 |
Interest expense recognised on the lease liability for the year ended March 31, 2026 was $33,450 (2025: $54,311).
10. LONG-TERM DEBT
Pursuant to an asset purchase agreement dated February 10, 2022, the Company acquired the land, building and chattels at 24 Corporate Court in Guelph, Ontario for cash consideration of $351,000 and assumed a mortgage of $1,949,000. The mortgage was assumed in a vendor-take-back agreement with the seller of the property who is an insignificant shareholder and not an insider of the Company. There are no financial covenants associated with this agreement. On April 1, 2023, the repayment terms were renegotiated to extend the amortisation period by an additional 12 months to March 1, 2025 and reduce the monthly installment from $85,504 to $43,764, including interest at 5% per annum. On October 1, 2023, the repayment terms were amended with payments moving to interest only for the next six months ending March 1, 2024. As a result, the loan repayment was further extended by seven months with a new maturity date of October 1, 2025. The Company did not consider this extension to be a substantial modification to the vendor-take-back agreement. On March 20, 2025, the Company and the lender agreed to suspend further payments, including interest only payments, until after the property held for sale closed.
| March 31, | March 31, | |||||
| 2026 | 2025 | |||||
| $ | $ | |||||
| First mortgage payable in monthly installments of $43,764 including interest at 5% per annum. Balance fully repaid on May 15, 2025 using the proceeds from the sale of 24 Corporate Court. | - | 346,747 | ||||
| Less current portion | - | (346,747 | ) | |||
| Total long-term debt | - | - |
|
24
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
11. CONVERTIBLE DEBENTURES
On April 9, 2025, the Company completed a non-brokered private placement (the "Offering") of debenture units (the "Debenture Units") through the issuance of 2,000 Debenture Units for gross proceeds of $2,000,000.
Each Debenture Unit consists of: (i) $1,000 principal amount of 5% secured convertible debentures of the Company (each, a "Convertible Debenture"); and (ii) 454 warrants (the "Warrants") to purchase common shares in the capital of the Company (the "Common Shares"). Each Convertible Debenture will mature on April 9, 2028, (the "Maturity Date") and bears interest at a rate of 5% per annum payable as a balloon payment on the Maturity Date. Each Convertible Debenture is convertible at the option of the holder, in whole or in part, into Common Shares, at any time prior to the Maturity Date at a conversion price of $2.20 per Common Share (the "Conversion Price"). The Company has the option to force the conversion of the Convertible Debentures into Common Shares at the Conversion Price at any time after the second anniversary of closing and prior to the Maturity Date in the event that the volume weighted average trading price of the Common Shares on the TSX Venture Exchange (the "TSXV") for the preceding 30 business days exceeds $4.40.
The Convertible Debentures are secured by the Company's interest in the Albany Property [Note 7], with a first ranking above all other creditors or loans by the Company.
The following inputs were used to fair value the debenture units and their associated components:
| Terms of loan | |||
| Inception date | April 9, 2025 | ||
| Valuation date | April 9, 2025 | ||
| Maturity date | April 9, 2028 | ||
| Term | 3 years | ||
| Principal amount | $ | 2,000,000 | |
| Coupon rate | 5% per annum | ||
| Underlying share price | $ | 1.42 | |
| Conversion price | $ | 2.20 | |
| Conversion cap price (between April 9, 2027 and maturity date) | $ | 4.40 | |
| Risk-free rate | 2.47% | ||
| Volatility | 66.16% | ||
| Market Inputs | |||
| CAD OIS Risk-free curve credit spread | 11.05% | ||
| Valuation results | |||
| Fair value of the debt component | $ | 1,555,334 | |
| Less: transaction costs | $ | (18,662 | ) |
| Add: accretion expense | $ | 117,381 | |
| Add: accrued interest | $ | 97,261 | |
| Total value of the debt component as at March 31, 2026 | $ | 1,751,314 | |
| Fair value of the equity component | |||
| Embedded holder conversion option | $ | 399,380 | |
| Embedded issuer's conversion option | $ | (4,833 | ) |
| Free-standing warrants | $ | 50,119 | |
| Less: transaction costs | $ | (5,335 | ) |
| Total fair value of the equity component | $ | 439,331 |
|
25
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
12. SHARE CAPITAL
(a) Share Capital
The Company is authorised to issue an unlimited number of common shares, with no par value.
During the year ended March 31, 2026, the Company completed a private placement in which a total of 2,338,893 units were issued at $1.06 per unit for gross proceeds of $2,479,227. Each unit consisted of one common share; one-half of one common share purchase Series A warrant with each whole Series A warrant exercisable at $1.50 for a period of two years; and one-half of one common share purchase Series B warrant with each whole Series B warrant exercisable at $2.00 for a period of three years. The Series A warrants are subject to an acceleration clause such that if the closing price of the Company's common shares on the TSX Venture Exchange is at least $2.00 for a period of 10 consecutive trading days, the Series A expiry date can be accelerated to such day that is no less than thirty days from the date notice is given by the Company of such accelerated expiry. The Series B warrants are subject to an acceleration clause such that if the closing price of the Company's common shares on the TSX Venture Exchange is at least $3.00 for a period of 10 consecutive trading days, the Series B expiry date can be accelerated to such day that is no less than thirty days from the date notice is given by the Company of such accelerated expiry. Unit issue costs of $97,670 associated with this private placement consisted of cash finder fees. In addition, 33,424 finder warrants valued at $22,702 were issued entitling the holders thereof to purchase an aggregate of 33,424 units at a price of $1.06 per unit until October 22, 2027 and legal fees.
During the year ended March 31, 2026, the Company issued 411,383 common shares in connection with the exercise of 642,834 options (2025: 1,312,751 common shares on exercise of 1,700,000 options). The carrying value of the options, being $214,252 (2025: $375,000), was removed from share-based payment reserve and added to share capital. Of the 642,834 (2025: 1,700,000) options exercised, 542,084 (2025: 1,250,000) were exercised using a "cashless" exercise method whereby 231,451 (2025: 387,249) fewer shares were issued than exercised as compensation for the $323,467 (2025: $534,500) that would have otherwise been received by the Company upon exercise.
During the year ended March 31, 2026, the Company also issued 650,798 (2025: nil) common shares for gross proceeds of $702,838 (2025: nil) through an at-the-market offering.
During the year ended March 31, 2025, the Company completed a private placement in which a total of 2,361,500 units were issued at $1.30 per unit for gross proceeds of $3,069,950. Each unit consisted of one common share and one-half of one common share purchase warrant with each whole warrant exercisable at $3.00 per a period of two years. Unit issue costs associated with this private placement totaled $73,624.
On August 14, 2024, the Company announced a normal course issuer bid for up to 5,084,319 common shares of the Company over a period of one year, being approximately 5% of the Company's issued and outstanding common shares, with up to 2,033,727 common shares of the Company purchasable over any 30-day period, being 2% of the Company's issued and outstanding common shares. During the year ended March 31, 2025, the Company purchased, and subsequently cancelled, nil (2024: 102,900) of its own common shares at a cost of $nil (2024: $142,866).
|
26
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
12. SHARE CAPITAL (continued)
(b) Share Purchase Warrants
Details of share purchase warrants outstanding as at March 31, 2026 are as follows:
| Exercise | Grant Date | March 31, | |||||||
| Price | Fair Value | 2026 | |||||||
| Expiry Date | $ | $ | # | ||||||
| August 19, 2026 | 3.00 | 89,737 | 1,180,750 | ||||||
| October 22, 2027 | 1.50 | 245,753 | 1,169,443 | ||||||
| April 9, 2028 | 2.20 | 42,393 | 908,000 | ||||||
| October 22, 2027 | 1.06 | 22,701 | 33,424 | ||||||
| October 22, 2028 | 2.00 | 242,092 | 1,169,443 | ||||||
| Less warrant value included in convertible debentures reserve | (42,393 | ) | - | ||||||
| 600,283 | 4,461,060 |
The following is a summary of warrants activity for the years ended March 31, 2026 and March 31, 2025:
| Year ended | Year ended | |||||||||||
| March 31, 2026 | March 31, 2025 | |||||||||||
| Weighted | Weighted | |||||||||||
| average | average | |||||||||||
| Number | exercise price | Number | exercise price | |||||||||
| $ | $ | |||||||||||
| Balance, beginning of year | 1,180,750 | 3.00 | - | - | ||||||||
| Granted | 3,280,310 | 1.87 | 1,180,750 | 3.00 | ||||||||
| Exercised | - | - | - | - | ||||||||
| Expired | - | - | - | - | ||||||||
| Balance, end of year | 4,461,060 | 2.17 | 1,180,750 | 3.00 | ||||||||
The grant date fair value of the 1,180,750 warrants was $0.08. The fair value of these warrants was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 49%; risk-free interest rate of 3.3%; and expected life of 2 years.
On April 9, 2025, the Company issued 908,000 warrants which were valued at $42,393 as part of the issuance of convertible debentures. This value has been included in the convertible debentures reserve on the statement of financial position.
On October 22, 2025, the Company issued 1,169,443 share purchase warrants as part of a private placement financing with an exercise price of $1.50 and an expiry date of October 22, 2027. The grant date fair value of these warrants was $0.30. The fair value of these warrants was estimated on the grant date using the Monte Carlo simulation with the following assumptions: expected dividend yield of 0%; expected volatility of 78%; risk-free interest rate of 2.2%; and expected life of 2 years.
On October 22, 2025, the Company issued 1,169,443 share purchase warrants as part of a private placement financing with an exercise price of $2.00 and an expiry date of October 22, 2028. The grant date fair value of these warrants was $0.30. The fair value of these warrants was estimated on the grant date using the Monte Carlo simulation with the following assumptions: expected dividend yield of 0%; expected volatility of 71%; risk-free interest rate of 2.3%; and expected life of 3 years.
On October 22, 2025, the Company issued 33,424 finder warrants as part of a private placement financing with an exercise price of $1.06 and an expiry date of October 22, 2027. The grant date fair value of these warrants was $0.68.
|
27
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
12. SHARE CAPITAL (continued)
(c) Stock Options and Equity Reserve
During the year ended March 31, 2026, the Company issued 1,579,000 stock options to a number of consultants, employees, officers and directors at an exercise price of $1.06. The grant date fair value of these stock options was $927,879. The vesting period for the stock options issued was as follows: 504,583 at the date of issuance; 504,583 after 12 months from the date of issuance; 504,583 after 24 months from the date of issuance; and 65,250 after 36 months from the date of issuance.
During the year ended March 31, 2025, the Company issued 2,000,000 stock options to a number of consultants, employees and directors at exercise prices ranging from $1.42 to $1.52. The grant date fair value of these stock options was $1,802,247. The vesting period for the stock options issued was as follows: 621,250 at the date of issuance; 661,250 after 12 months from the date of issuance; 621,250 after 24 months from the date of issuance; and 96,250 after 36 months from the date of issuance.
In addition, during the year ended March 31, 2025, the Company's subsidiary, Triera Biosciences Ltd. ("Triera"), issued 5,000 stock options to a consultant at an exercise price of $1.00. The grant date fair value of these stock options was determined to be trivial and no stock-based compensation was recorded in relation to these options. The vesting period for the Triera stock options issued was as follows: 1,667 on June 1, 2024; 1,667 on June 1, 2025; and 1,666 on June 1, 2026.
The grant date fair value of the stock options was calculated using the Black-Scholes option pricing model. A summary of the inputs used to value the options issued during the years ended March 31 is presented below:
| Triera | The Company | ||||||
| Mar 31, 2026 | Mar 31, 2025 | Mar 31, 2026 | Mar 31, 2025 | ||||
| Expected dividend yield | N/A | 0% | 0% | 0% | |||
| Expected volatility | N/A | 98% to 120% | 70% to 78% | 62% to 77% | |||
| Expected forfeiture rate | N/A | 0% | 7% | 7% | |||
| Risk-free interest rate | N/A | 4.50% | 2.4% to 2.7% | 4.0% to 4.5% | |||
| Expected life | N/A | 3 years | 3 to 5 years | 3 to 5 years | |||
The Company's computation of expected volatility for the years ended March 31, 2026 and 2025 is based on the Company's market close price over a prior period equal to the expected life of the options.
The Company applies the fair value method of accounting for share-based payment awards to directors, officers, employees and non-employees. Accordingly, the following amounts have been recognised as compensation expense and under capital stock as share-based payment reserve:
| Year | Year | |||||
| Ended | Ended | |||||
| March 31, | March 31, | |||||
| 2026 | 2025 | |||||
| $ | $ | |||||
| Share-based compensation expense | 786,963 | 1,529,934 |
|
28
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
12. SHARE CAPITAL (continued)
(c) Stock Options and Equity Reserve (continued)
Stock option and share-based payment activity of the Company for the years ended March 31, 2026 and March 31, 2025 are summarised as follows:
| Year ended | Year ended | |||||||||||
| March 31, 2026 | March 31, 2025 | |||||||||||
| Weighted | Weighted | |||||||||||
| average | average | |||||||||||
| Number | exercise price | Number | exercise price | |||||||||
| $ | $ | |||||||||||
| Balance, beginning of year | 6,123,334 | 2.32 | 7,098,334 | 2.37 | ||||||||
| Granted | 1,579,000 | 1.06 | 2,000,000 | 1.52 | ||||||||
| Exercised | (642,834 | ) | 0.57 | (1,700,000 | ) | 0.45 | ||||||
| Expired | (1,452,833 | ) | 2.78 | (1,275,000 | ) | 3.84 | ||||||
| Balance, end of year | 5,606,667 | 2.05 | 6,123,334 | 2.32 | ||||||||
At March 31, 2026, outstanding options to acquire common shares of the Company were as follows:
| Options Outstanding | Options Exercisable | ||||||||||||||
| Weighted | Weighted | Weighted | |||||||||||||
| Number | Average | Average | Number | Average | |||||||||||
| Outstanding | Remaining | Exercise | Outstanding | Exercise | |||||||||||
| Range of exercise Prices | as at Mar 31, | Contractual | Price | as at Mar 31, | Price | ||||||||||
| CAD$ | 2026 | Life (years) | CAD$ | 2026 | CAD$ | ||||||||||
| $1.01 - $4.00 | 4,581,667 | 2.98 | $ | 1.55 | 3,077,084 | $ | 1.71 | ||||||||
| $4.01 - $5.67 | 1,025,000 | 0.79 | $ | 4.27 | 1,025,000 | $ | 4.27 | ||||||||
| Totals | 5,606,667 | 2.55 | $ | 2.05 | 4,102,084 | $ | 2.35 | ||||||||
At March 31, 2025, outstanding options to acquire common shares of the Company were as follows:
| Options Outstanding | Options Exercisable | |||||||||||||||
| Weighted | Weighted | Weighted | ||||||||||||||
| Number | Average | Average | Number | Average | ||||||||||||
| Outstanding | Remaining | Exercise | Outstanding | Exercise | ||||||||||||
| Range of exercise Prices | as at Mar 31, | Contractual | Price | as at Mar 31, | Price | |||||||||||
| CAD$ | 2025 | Life (years) | CAD$ | 2025 | CAD$ | |||||||||||
| $0.40 - $1.00 | 633,334 | 0.28 | $ | 0.55 | 633,334 | $ | 0.55 | |||||||||
| $1.01 - $4.00 | 4,465,000 | 2.75 | $ | 2.12 | 3,135,416 | $ | 2.37 | |||||||||
| $4.01 - $5.67 | 1,025,000 | 1.79 | $ | 4.27 | 1,025,000 | $ | 4.27 | |||||||||
| Totals | 6,123,334 | 2.33 | $ | 2.32 | 4,793,750 | $ | 2.54 | |||||||||
|
29
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
12. SHARE CAPITAL (continued)
(c) Stock Options and Equity Reserve (continued)
Stock option and share-based payment activity of the Company's subsidiary, Triera, for the years ended March 31, 2026 and March 31, 2025 are summarised as follows:
| Year ended | Year ended | |||||||||||
| March 31, 2026 | March 31, 2025 | |||||||||||
| Weighted | Weighted | |||||||||||
| average | average | |||||||||||
| Number | exercise price | Number | exercise price | |||||||||
| $ | $ | |||||||||||
| Balance, beginning of year | 190,000 | 1.00 | 195,000 | 1.00 | ||||||||
| Granted | - | - | 5,000 | 1.00 | ||||||||
| Exercised | - | - | - | - | ||||||||
| Expired | - | - | (10,000 | ) | 1.00 | |||||||
| Balance, end of year | 190,000 | 1.00 | 190,000 | 1.00 | ||||||||
At March 31, 2026, outstanding options to acquire common shares of the Company's subsidiary, Triera, were as follows:
| Options Outstanding | Options Exercisable | ||||||||||||||
| Weighted | Weighted | Weighted | |||||||||||||
| Number | Average | Average | Number | Average | |||||||||||
| Outstanding | Remaining | Exercise | Outstanding | Exercise | |||||||||||
| Range of exercise Prices | as at Mar 31, | Contractual | Price | as at Mar 31, | Price | ||||||||||
| CAD$ | 2026 | Life (years) | CAD$ | 2026 | CAD$ | ||||||||||
| $0.00 - $1.00 | 190,000 | 2.30 | $ | 1.00 | 188,333 | $ | 1.00 | ||||||||
At March 31, 2025, outstanding options to acquire common shares of the Company's subsidiary, Triera, were as follows:
| Options Outstanding | Options Exercisable | ||||||||||||||
| Weighted | Weighted | Weighted | |||||||||||||
| Number | Average | Average | Number | Average | |||||||||||
| Outstanding | Remaining | Exercise | Outstanding | Exercise | |||||||||||
| Range of exercise Prices | as at Mar 31, | Contractual | Price | as at Mar 31, | Price | ||||||||||
| CAD$ | 2025 | Life (years) | CAD$ | 2025 | CAD$ | ||||||||||
| $0.00 - $1.00 | 190,000 | 3.22 | $ | 1.00 | 186,666 | $ | 1.00 | ||||||||
|
30
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
12. SHARE CAPITAL (continued)
(d) Restricted Stock Units
On October 1, 2025, the Company issued 654,000 restricted stock units ("RSUs") to a number of officers, directors and employees with a vesting date of October 1, 2026. The fair value of these RSUs was the grant date share value of $1.06. Subsequent to the issuance date, 58,000 of these RSUs expired due to departures from the Company leaving 596,000 still outstanding at March 31, 2026.
On November 24, 2025, the Company issued 425,000 restricted stock units ("RSUs") to a number of officers and directors with a vesting date of December 1, 2026. The fair value of these RSUs was the grant date share value of $1.08.
Share-based compensation recognized during the year ended March 31, 2026 related to the vesting of the RSUs amounted to $469,171 (2025 - $nil).
13. SUPPLEMENTAL DISCLOSURES ON STATEMENTS OF CASH FLOWS
Changes in non-cash working capital balances consist of:
| March 31, | March 31, | ||||||
| 2026 | 2025 | ||||||
| $ | $ | ||||||
| Accounts and other receivables | 831,495 | (906,215 | ) | ||||
| Inventories | 168,302 | 397,476 | |||||
| Prepaids and deposits | 92,333 | 187,707 | |||||
| Accounts payable and accrued liabilities | 405,473 | 1,797,002 | |||||
| Total change in non-cash working capital balances | 1,497,603 | 1,475,970 | |||||
During the year ended March 31, 2026, 542,084 (2025: 1,250,000) stock options were exercised using a "cashless" exercise method whereby 231,451 (2025: 387,249) fewer shares were issued than options exercised as compensation for the $323,467 (2025: $534,500) in cash that would have otherwise been received by the Company upon exercise.
|
31
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
14. RELATED PARTY TRANSACTIONS
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any directors (executive and non-executive) of the Company.
The Company defines key management personnel as its key executive management and Board of Directors. In addition to their salaries, the Company provides a benefit plan and other allowances to its key management personnel. Key management personnel are also granted stock options at the discretion of the Board of Directors.
On September 3, 2025, the Company's CEO resigned his position as CEO and as a member of the Board of Directors effective immediately, to become the full-time CEO of Altek Advanced Materials Inc. ("Altek"), a Nevada incorporated private company focused on the commercialization of advanced material technologies in the United States of which the Company's former CEO owns more than a 50% beneficial equity interest. The Company has entered into a non-arm's length, binding letter of intent with Altek to negotiate one or more non-exclusive licensing agreements relating to the Company's various technologies. On October 6, 2025, the Company's former Chief Science Officer joined the board of Altek as a director.
The remuneration of key management personnel during the years ended March 31, 2026 and 2025 were as follows:
| 2026 | 2025 | |||||
| $ | $ | |||||
| Directors fees | 245,416 | 252,500 | ||||
| Salaries and benefits | 1,121,666 | 1,010,201 | ||||
| Share-based compensation | 1,107,256 | 1,191,219 | ||||
| Total remuneration of key management personnel | 2,474,338 | 2,453,920 |
15. INCOME TAXES
(a) Provision for Income Taxes
Major items causing the Company's effective income tax rate to differ from the combined Canadian federal and provincial statutory rate of 26.5% (2025 - 26.5%) were as follows:
| 2026 $ |
2025 $ |
|||||
| Loss before income taxes | (9,767,958 | ) | (10,039,658 | ) | ||
| Expected income tax recovery based on statutory rate | (2,514,000 | ) | (2,661,000 | ) | ||
| Adjustments to expected income tax benefit: | ||||||
| Share-based compensation | 258,000 | 405,000 | ||||
| Non-deductible expenses and other | 6,000 | 7,000 | ||||
| Gain on disposal of property and equipment | (104,000 | ) | - | |||
| Change in benefit of tax assets not recognised | 2,354,000 | 2,249,000 | ||||
| Deferred income tax provision (recovery) | - | - |
|
32
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
15. INCOME TAXES (continued)
b) Deferred Income Tax
The components of deferred tax are summarised below. Deferred tax assets and liabilities have been offset where they relate to income taxes levied by the same taxation authority and the Company has the legal right and intent to offset.
| 2026 | 2025 | ||||||
| $ | $ | ||||||
| Recognised deferred tax assets and liabilities | |||||||
| Right-of-use assets | (36,000 | ) | (78,000 | ) | |||
| Lease liability | 36,000 | 78,000 | |||||
| Net deferred tax assets | - | - | |||||
Deferred income tax assets have not been recognised in respect of the following deductible temporary differences:
| 2026 $ |
2025 $ |
|||||
| Non-capital loss carry-forwards | 52,779,000 | 43,742,000 | ||||
| Property and equipment | 771,000 | 390,000 | ||||
| Interest in exploration and evaluation property | 28,256,000 | 28,256,000 | ||||
| Scientific research and development - Federal | 512,000 | 512,000 | ||||
| Share issue costs | 94,000 | 317,000 | ||||
| Lease liability | 162,000 | 39,000 | ||||
| Deductible temporary differences | 82,574,000 | 73,256,000 |
Deferred tax assets have not been recognised in respect of these temporary differences because it is not probable that future taxable profits will be available against which the Company can utilise the benefits.
c) Loss Carry-Forwards
The Company has available non-capital losses for Canadian income tax purposes which may be carried forward to reduce taxable income in future years. If not utilised, the non-capital losses of approximately $52,780,000 will expire between the fiscal years ending March 31, 2031 and March 31, 2046.
The Company has approximately $31,373,000 of Canadian development and exploration expenditures as at March 31, 2026 (2025: $35,711,000), which under certain circumstances may be utilised to reduce the taxable income of future years.
|
33
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
16. FINANCIAL INSTRUMENTS AND RELATED RISKS
The Company's operations include the acquisition and commercialization of intellectual property in Canada and foreign jurisdictions. The Company examines the various financial risks to which it is exposed and assesses the impact and likelihood of occurrence. These risks may include credit risk, liquidity risk, currency risk, interest rate risk and other risks. Where material, these risks are reviewed and monitored by the Board of Directors.
a) Credit Risk
Counterparty credit risk is the risk that the financial benefits of contracts with a specific counterparty will be lost if a counterparty defaults on its obligations under the contract. This includes any cash amounts owed to the Company by those counterparties, less any amounts owed to the counterparty by the Company where a legal right of set-off exists and also includes the fair values of contracts with individual counterparties which are recorded in the consolidated financial statements.
i) Accounts and other receivables
As the Company has commenced production and sales, it is exposed to credit risk with respect to its accounts receivable. The Company manages its credit risk by reviewing and assessing credit exposure prior to facilities being committed to customers. Overall the Company's credit risk has not changed from the prior period. The Company's accounts and other receivables total $371,250 (2025: $1,202,745), representing the maximum exposure to credit risk from those financial assets. As at March 31, 2026, one customer accounted for 37% of trade accounts receivable and 32% of revenue. The Company believes that there is no unusual exposure associated with the collection of these receivables.
ii) Cash and Cash Equivalents
In order to manage credit and liquidity risk, the Company's cash is held through a large Canadian Financial Institution and the Company invests only in highly rated investment grade instruments that are cashable or have maturities of three months or less. The investments are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
b) Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure. Accounts payable and accrued liabilities are due within the current operating period.
The following are the undiscounted amounts and contractual maturities of the Company's long-term debt and anticipated timing of settlements of its other financial liabilities as at March 31, 2026 and 2025:
| Balance, as at March 31, 2026 | < 1 year | 1-2 years | > 2 years | ||||||
| $ | $ | $ | |||||||
| Accounts payable and accrued liabilities | 3,371,737 | - | - | ||||||
| Lease liability | 316,400 | - | - | ||||||
| Convertible debentures | - | - | 1,751,314 | ||||||
| Balance, as at March 31, 2025 | < 1 year | 1-2 years | > 2 years | ||||||
| $ | $ | $ | |||||||
| Accounts payable and accrued liabilities | 2,966,264 | - | - | ||||||
| Lease liability | 171,990 | 161,737 | - | ||||||
| Debt | 346,747 | - | - |
c) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The risk that the Company will realise a significant loss as a result of a decline in the fair market value of investments or items held within cash and cash equivalents is limited given that the majority have a relatively short maturity. The Company manages its interest rate risk with investments by investing the majority of funds in short-term investments and therefore is not exposed to significant fluctuations in interest rates. The Company believes that its interest rate risk is minimal.
d) Currency Risk
The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates. The functional and reporting currency of the Company is the Canadian dollar. The Company is involved with a number of foreign vendors in the United States of America. Changes in the currency exchange rates between the Canadian dollar relative to the U.S. dollar could have an effect on the Company's results of operations, financial position or cash flows. As a result, the Company is exposed to currency risk on these transactions. A 1% strengthening of the US dollar would affect net loss by approximately $1,000. The Company has not hedged its exposure to currency fluctuations as the exposure has been deemed to be minimal.
e) Fair Value of Financial Instruments
IFRS 13 establishes a fair value hierarchy that prioritizes the input to valuation techniques used to measure fair value as
follows:
Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 - inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).
As at March 31, 2026, the Company does not have any financial instruments recorded at fair value and that require classification within the fair value hierarchy.
The carrying values of all of the Company's financial instruments approximate their fair values.
17. MANAGEMENT OF CAPITAL
The Company's objective when managing capital is to safeguard the entity's ability to continue as a going concern. In the management of capital, the Company monitors its adjusted capital which comprises all components of shareholders' equity. The Company's capital management objectives, policies and processes have remained unchanged during the years ended March 31, 2026 and 2025.
The Company sets the amount of capital in proportion to risk. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue common shares through private placements.
|
35
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
18. COMMITMENTS AND CONTINGENCIES
a) Environmental Contingencies
The Company's activities are subject to various laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company believes its operations are materially in compliance with all applicable laws and regulations.
b) Research Agreements
The Company has entered various agreements with arms' length parties pertaining to ongoing science efforts in pursuit of research and/or development and intellectual property with the objective of profitably bringing products to market. Many of the counterparties to these agreements are Canadian universities and affiliated individuals. These agreements can be generalized as having 'no fault' termination clauses regarding ongoing commitments and future liability when the Company determines that the pursuit becomes ineffective or unlikely to result in a profitable or commercially-viable product.
Under certain of these technology license agreements with Canadian universities, the Company has an obligation to pay royalties on revenues from any subject technologies. No such revenues have been earned to date.
c) Contingent liabilities
In September 2018, the Company received a statement of claim from a former employee. On March 24, 2020, the Company commenced an action claim against the former employee for relief relating to contracts and transactions between that employee and the Company. The trial commenced on October 21, 2024, and closing submissions were held on January 17, 2025. On March 12, 2026, the Ontario Superior Court of Justice issued its Reasons for Judgment. The Court dismissed substantially all claims advanced by the former employee. Original claims, as filed, were approximately $6 million. At trial, the claims were refined and the Court denied all remaining monetary claims. With respect to the Company's claim for cancellation of 4.5 million founder shares and disgorgement of profits, the Court found that the shares had been properly issued and that there was no basis to set aside the issuance. On March 27, 2026, the Company submitted a cost submission to the Courts for approximately $797,000 for partial indemnity cost and disbursement relief. On June 17, 2026, the Company received a decision that there would be no order as to costs and that the Company's cost submission had been denied.
19. NET LOSS PER SHARE
Basic net loss per share figures are calculated using the weighted average number of common shares outstanding. The weighted average number of common shares issued and outstanding for the year ended March 31, 2026 is 105,919,553 (2025: 102,977,860). Diluted net loss per share figures are calculated after taking into account all warrants and stock options granted. For the years ended March 31, 2026 and March 31, 2025, all stock options and warrants were excluded from the diluted per share amounts as their effect is anti-dilutive in loss periods.
|
36
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
20. GOVERNMENT GRANTS
The Company's subsidiary, Triera Biosciences Ltd. had been awarded a $1,100,000 Government of Canada contract to test multivalent aptamer technology for the rapid drug discovery of therapeutics or prophylactics of highly pathogenic avian influenza ("HPAI") A(H5N1). On April 23, 2025, the Company announced that it had completed the first phase of the contract by delivering a lead candidate countermeasure for A(H5N1) and had moved on to the testing phase of the project. The testing phase of the project concluded on March 23, 2026.
The Company entered into an agreement with Critical Minerals Innovation Fund ("CMIF") under which the Company was entitled to receive assistance and cost recoveries to a maximum of $500,000 for work on Albany Graphite purification and anode material development project.
The Company entered into an agreement with Natural Resources Canada's Energy Innovation Program ("NRCan") which supports Canadian clean energy technologies. The Company's researchers along with the University of Waterloo's Si-C lithium-ion battery anode material research team, will work together with a goal of producing full pouch cells which demonstrate the material's superior storage and performance characteristics. The project is for the period April 1, 2025 to March 31, 2029 with a total budget cost of approximately $2.1M, with approximately $1.55M being funded by NRCan.
Government grants received or receivable during the years ended March 31, 2026 and 2025 were as follows:
| 2026 | 2025 | |||||
| $ | $ | |||||
| Government of Canada Contract (Phase 2) | 156,522 | - | ||||
| Critical Minerals Innovation Fund | 500,000 | - | ||||
| NRCan | 208,483 | - | ||||
| Total government grants received or receivable | 865,005 | - |
|
37
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
21. OTHER EXPENSES
| Year Ended March 31,2026 $ |
Year Ended March 31, 2025 $ |
|||||
| Automotive | 10,361 | 27,149 | ||||
| Bank fees | 32,197 | 4,781 | ||||
| Dues and subscriptions | 24,050 | 37,215 | ||||
| Freight and delivery | 32,014 | 11,038 | ||||
| Meals and entertainment | 21,717 | 33,293 | ||||
| Other expenses | 24,103 | 22,081 | ||||
| Property taxes | 26,393 | 34,030 | ||||
| Repairs and maintenance | 60,460 | 48,158 | ||||
| Telephone | 17,208 | 20,325 | ||||
| Utilities | 17,954 | 16,113 | ||||
| Total other expenses | 266,457 | 254,183 |
|
38
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
22. SEGMENTED INFORMATION
The Company's operating segments are organized into the following reportable segments:
- Intellectual Property Development - Includes manufacturing and distribution of graphene related products.
- Biotech - Includes service revenue generated through aptamer technology.
- Albany Project - Includes the exploration and evaluation asset and mineral exploration activities.
- Unallocated Corporate Costs - Includes corporate activities and certain unallocated costs.
Performance of each reportable segment is measured based on profit before finance costs and income tax, as included in the internal management reports that are reviewed by the Company's Chief Operating Decision Makers, being the Board of Directors and senior leadership team. Segment profit (loss) is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Transfer pricing is based on third-party rates.
Information regarding the results of each reportable segment is included below. Inter-company amounts, which represent items purchased and sold between different segments, have been presented within the segment disclosure and are eliminated to arrive at the consolidated amounts.
| IP Development | BioTech | Albany Project | Unallocated Corporate | Total | ||||||||||||||||||||||||||
| For the years ended March 31 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| External net sales | 166,048 | 79,995 | - | 792,500 | - | - | - | - | 166,048 | 872,495 | ||||||||||||||||||||
| Cost of sales | 1,838,971 | 578,419 | - | 66,191 | - | - | - | - | 1,838,971 | 644,610 | ||||||||||||||||||||
| Gross margin (loss) | (1,672,923 | ) | (498,424 | ) | - | 726,309 | - | - | - | - | (1,672,923 | ) | 227,885 | |||||||||||||||||
| Depreciation and amortization | 526,405 | 600,322 | - | - | - | - | - | - | 526,405 | 600,322 | ||||||||||||||||||||
| Interest Expense | 139,657 | 91,323 | - | - | - | - | - | - | 139,657 | 91,323 | ||||||||||||||||||||
| Net loss | (6,742,003 | ) | (7,075,798 | ) | (599,857 | ) | (262,462 | ) | (433,253 | ) | (18,597 | ) | (1,992,845 | ) | (2,682,801 | ) | (9,767,958 | ) | (10,039,658 | ) | ||||||||||
| Segment assets | 6,732,071 | 10,013,831 | 1,989 | 828,439 | 8,352,872 | 7,553,915 | - | - | 15,086,932 | 18,396,185 | ||||||||||||||||||||
| Segment liabilities | 3,698,876 | 2,816,136 | 344,583 | 238,003 | 741,576 | - | 499,753 | 592,599 | 5,284,788 | 3,646,738 | ||||||||||||||||||||
| Capital expenditures | 2,020 | 1,398 | - | - | 699,842 | 183,214 | - | - | 701,862 | 184,612 | ||||||||||||||||||||
|
39
|
|
ZENTEK LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| (Stated in Canadian Dollars) |
|
AS AT AND FOR THE YEARS ENDED MARCH 31, 2026 AND 2025 |
23. SUBSEQUENT EVENTS
On May 27, 2026, the Company announced the closing of a private placement for gross proceeds of $18,000,000, Pursuant to the offering, the Company sold 18,000,000 units at a price of $1.00 per unit, with Red Cloud Securities Inc. acting as sole agent and bookrunner. Each Unit consists of one common share and one common share purchase warrant exercisable at a price of $1.50 until May 27, 2029. The Company announced that it intends to use the net proceeds of the offering for the development and derisking of the Albany Graphite Project, including the completion of the new preliminary economic assessment, advancement of subsequent preliminary feasibility study work, and business development activities targeting small modular reactor developers, national defence end-users, and other high-intensity end-user markets for which Albany ultra-high-purity graphite is suited; the continued commercialization of the Company's ZenGUARDTM platform; payment obligations; and general working capital and corporate purposes. As consideration for its services, Red Cloud received a cash fee of $1,197,360 and was issued 1,197,360 non-transferrable common share purchase warrants, each exercisable into one common share at the offering price until May 27, 2029.
Subsequent to the year ended March 31, 2026, the Company issued 800,033 common shares for gross proceeds of $571,841 through an at-the-market offering.
24. COMPARATIVE FIGURES
Certain comparative figures related to the classification of cost of sales in the consolidated statement of loss and comprehensive loss were reclassified to conform to the current year presentation.
Management's Discussion and Analysis
For the financial year ended
March 31, 2026
Dated: June 25, 2026
(Expressed in Canadian Dollars)
Introduction
This Management Discussion and Analysis ("MD&A") is dated June 25, 2026 and is in respect of the financial year ended March 31, 2026. The following discussion of the financial condition and results of operations of Zentek Ltd. (the "Company" or "Zentek") constitutes management's review of the factors that affected the Company's financial and operating performance for the financial year ended March 31, 2026.
This discussion should be read in conjunction with the Company's audited consolidated financial statements and corresponding notes to the consolidated financial statements for the financial year ended March 31, 2026. The Company's audited consolidated financial statements have been prepared using accounting policies consistent with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IASB") (collectively "IFRS Accounting Standards"). Unless otherwise stated, all amounts discussed herein are denominated in Canadian dollars which is the Company's functional and reporting currency.
Additional information relating to the Company can be found under the Company's profile on SEDAR+ at www.sedarplus.ca.
Forward-Looking Statements
This MD&A and the documents incorporated into this MD&A contain "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws (forward-looking information and forward-looking statements being collectively hereinafter referred to as "forward-looking statements"). Such forward-looking statements are based on expectations, estimates and projections as at the date of this MD&A or the dates of the documents incorporated herein, as applicable. Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often but not always using phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends", or variations of such words and phrases, or stating that certain actions, events or results "may" or "could", "would", "should", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements and are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements and information concerning: the intentions, plans and future actions of the Company; statements relating to the business and future activities of the Company after the date of this MD&A; market position, ability to compete and future financial or operating performance of the Company after the date of this MD&A; statements based on the audited and unaudited financial statements of the Company; anticipated developments in operations; the timing and amount of funding required to execute the Company's development and business plans; intellectual property expenditures; capital and exploration and development expenditures; the effect on the Company of any changes to existing legislation or policy; government regulation of patent law or mining operations; the length of time required to obtain permits, certifications and approvals; markets for the Company's graphene related products and the ability to supply those markets; the success of exploration, development and mining activities; the geology of mineral properties; environmental risks; the availability of labour; demand and market outlook for precious metals and the prices thereof; progress in development of mineral properties; estimated budgets; currency fluctuations; requirements for additional capital; government regulation; limitations on insurance coverage; the timing and possible outcome of litigation in future periods; the timing and possible outcome of regulatory and permitting matters; goals; strategies; future growth; planned business activities and planned future acquisitions; the adequacy of financial resources; and other events or conditions that may occur in the future.
Forward-looking statements are based on the beliefs of the Company's management, as well as on assumptions, which such management believes to be reasonable based on information currently available at the time such statements were made. However, by their nature, forward-looking statements are based on assumptions and involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Forward-looking statements are subject to a variety of risks, uncertainties, and other factors that could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation, those risks outlined under the heading Risk and Uncertainties in this MD&A.
The list of risk factors set out in this MD&A is not exhaustive of the factors that may affect any forward-looking statements of the Company. Forward-looking statements are statements about the future and are inherently uncertain. Actual results could differ materially from those projected in the forward-looking statements as a result of the matters set out or incorporated by reference in this MD&A generally and certain economic and business factors, some of which may be beyond the control of the Company, including, among other things, potential direct or indirect operational impacts resulting from infectious diseases or pandemics, from international or domestic conflicts or political crises, and other factors not currently viewed as material that could cause actual results to differ materially from those described in the forward-looking statements. In addition, recent events in the world economy and global financial and credit markets have resulted in high market and commodity volatility and a contraction in debt and equity markets, which could have a particularly significant, detrimental, and unpredictable effect on forward-looking statements. The Company does not intend and does not assume any obligation, to update any forward-looking statements, other than as required by applicable law. For all these reasons, the Company's securityholders should not place undue reliance on forward-looking statements.
Company Overview and Discussion of Operations
The Company was incorporated in Ontario, Canada as 1774119 Ontario Limited on July 29, 2008. Pursuant to Articles of Amendment dated November 24, 2009, the Company changed its name to "Zenyatta Ventures Ltd." On January 1, 2019, the Company filed Articles of Amendment changing its name from "Zenyatta Ventures Ltd." to "ZEN Graphene Solutions Ltd." On October 27, 2021 (effective October 28, 2021), the Company filed Articles of Amendment changing its name from "ZEN Graphene Solutions Ltd." to "Zentek Ltd." The common shares of the Company trade on the TSX Venture Exchange ("TSXV") under the symbol "ZEN" and in the United States on the Nasdaq Capital Market ("NASDAQ") under the symbol "ZTEK".
The Company commenced operations as a junior mineral exploration company focused primarily on mineral deposits in Northern Ontario, Canada. The Company was actively engaged in exploring mining projects and held an interest in exploration licenses on properties located north of Lake Superior and west of James Bay in Northern Ontario, Canada in the "Arc of Fire" area. The properties, located north of Lake Superior and southwest of James Bay in northeastern Ontario, Canada, were unpatented, non-contiguous, and consisted of nine claim blocks, including 234 claims comprised of 3,549 claim units over a total of 56,784 ha.
Within such claim blocks, the Company continued to hold a 100% undivided interest in Claim Block 4F, comprised of 521 mining claims (461 single-cell claims and 60 boundary-cell claims), which hosts an igneous-hosted, fluid-derived graphite deposit (the "Albany Graphite Project"). The Company did extensive work to determine potential uses for the graphite materials to be extracted from the Albany Graphite Project, including engaging in testing the properties of the graphite material and studies on graphene materials.
In May 2018, the Company began to focus resources on the research and development of graphene and related applications, which was supported by shareholders of the Company who voted in favour of a new Board of Directors with an interdisciplinary team to augment key management personnel with expertise in business, science, marketing, and government relations.
In February of 2020, the Company opened a research facility in Guelph, Ontario, to support its university and industrial partners' ongoing research and to scale-up production of graphene products. Subsequently, the COVID-19 pandemic halted research at the Company's collaborators' laboratories. The Company pivoted to focus its resources to develop graphene-based solutions for the fight against COVID-19.
On September 22, 2020, the Company announced, based on the results from a report to the Company dated September 18, 2020, from the ImPaKT Centre at the University of Western Ontario entitled "Zen Graphene - Lab Test Report No. Z03-092020", the development and successful testing of a now patented GO/silver compound that showed to be highly effective against enveloped virus surrogates, suggesting general efficacy against such viruses as SARS-VoV-2. On December 22, 2020, the Company announced the successful testing at the Department of Microbiology at Mount Sinai Hospital/University Health Network of the GO/silver compound that also demonstrated efficacy against both gram-positive and gram-negative aerobic bacteria as well as against fungus/yeast, based on a report to the Company dated December 18, 2020, entitled "Evaluation of Graphene Oxide with Silver Cations (GO-Ag+) as an Antibacterial Agent against Respiratory Pathogens". If the compound could be shown to be safe and effective, it could represent a breakthrough protective technology against pathogenic transmission in high traffic, highly sensitive, or medical environments featured in an array of different products e.g. Otolaryngology, Ophthalmology and intensive care units.
The Company filed patent applications relating to its antimicrobial coating, and on April 13, 2021, announced the brand name ZenGUARD ("ZenGUARD™") for such coating. On September 27, 2022, the Company announced that its patent application directed to the ZenGUARD™ technology for use on personal protective equipment ("PPE") and heating, ventilation, and air conditioning ("HVAC") had been allowed in Canada including all 54 claims made in the application, and on December 6, 2022, the patent was granted with a term until September 20, 2041.
Pursuant to a License Agreement dated September 22, 2020, between the Company and the University of Guelph, the Company holds the exclusive global rights to intellectual property regarding an electrochemical exfoliation ("ECE") process to produce graphene oxide ("GO").
On October 18, 2021, the TSXV changed the Company's classification from a "mining issuer" to an "industrial, technology, or life sciences issuer", which was approved by the shareholders of the Company on September 27, 2021, in accordance with the rules and policies of the TSXV.
Strategic Transformation (2024-2026) Building on its materials innovation capabilities, Zentek is evolving into a business-to-business specialty materials platform focused on contract research and development. This transformation leverages the Company's graphene coating expertise, pilot-scale manufacturing infrastructure, and strategic ultra-high-purity graphite asset (Albany) to serve partners across defense, energy, aviation, and industrial sectors through IP licensing and knowledge-intensive development services.
On November 29, 2021, the Company was issued a Medical Device Establishment Licence ("MDEL") from Health Canada (licence number 18823). This licence permits the Company, as an establishment, to manufacture and distribute Class I medical devices in Canada, including devices incorporating the ZenGUARD™ coating, subject to compliance with the Medical Devices Regulations.
On May 23, 2023, the Company completed the transfer of the ownership of the Albany Graphite Project to a wholly owned subsidiary of the Company, Albany Graphite Corp. ("AGC") pursuant to a property purchase agreement dated April 24, 2023, as described in more detail under the heading "Albany Graphite Project" below. The Company does not require materials extracted from the Albany Graphite Project for its current business plans, although such materials could hold significant value to the Company in the future.
On June 12, 2023, the Company incorporated a wholly owned subsidiary, Triera Biosciences Ltd., and assigned to it all rights and obligations under the Company's exclusive, worldwide license agreement with McMaster University dated June 11, 2021 (as amended on June 23, 2023). Through this agreement, Triera holds exclusive global licensing rights to the aptamer-based technologies developed under the collaboration with McMaster University and included within the licensed patent portfolio.
Intellectual Property
Portfolio Overview As at March 31, 2026, Zentek's intellectual property (IP) portfolio continues to expand and mature, consistent with the Company's strategic focus on building a defensible technology platform in advanced materials and aptamer-based solutions. The portfolio currently comprises multiple patent families covering antimicrobial graphene-silver and graphene-oxide nanocomposites (including our proprietary ZenGUARD™ technology), advanced anti-corrosion and intumescent coating additives, ice phobic elastomer coatings, and licensed multivalent aptamer constructs developed in collaboration with McMaster University. Furthermore, the Company maintains a global ZenGUARD™ trademark family, with registrations or applications pending across North America, Europe, South America, Africa, and the Asia-Pacific region, supplemented by additional marks such as ZenARMOR™ and TRIERA™ at various stages of protection.
Strategic Significance Management views this portfolio as a core competitive asset that underpins Zentek's primary commercialization verticals, including HVAC and filtration, protective and functional coatings, and future therapeutic and diagnostic applications. The Company aligns the breadth of its patent and trademark jurisdictions with current and anticipated target markets, OEM partners, and licensing opportunities. To maintain cost discipline, the Company employs a strategy of selective national-phase entry and rationalization of lower-priority filings.
Operational Developments The Company, in conjunction with external counsel, intends to conduct a comprehensive review of its IP portfolio to identify and address critical upcoming actions, including issue-fee payments, maintenance fees, national-phase deadlines, and required assignments or declarations. Through this initiative, Management intends to address near-term decisions required in major markets, particularly the United States and Europe, regarding key ZenGUARD™ and advanced coating patent families, as well as ongoing prosecution steps for licensed McMaster aptamer applications. Management anticipates that the timely completion of these actions will enhance the strength and certainty of Zentek's IP position within its priority product areas.
Outlook and Governance Looking forward, the Company's IP strategy prioritizes quality and strategic fit over portfolio size. New patent filings, continuations, and country selections will focus on technologies that directly support commercial products, revenue-adjacent development programs, and high-value partnering opportunities, allowing non-core or outdated concepts to lapse where appropriate.
To support this objective, management is implementing a formal IP governance framework which includes:
• A centralized IP register;
• Clear accountability by business line; and
• Regular cross-functional reviews involving R&D, commercial, and legal teams to assess whether individual assets should be maintained, expanded, licensed, or discontinued.
The Company intends to leverage its IP not only for defensive purposes but also as a platform for value creation. Zentek expects to utilize its patents and trademarks to facilitate strategic collaborations and licensing arrangements, particularly where its graphene-based coatings and aptamer technologies can be integrated into partners' products in regulated or global markets requiring strong IP protection. Management believes that disciplined execution of this strategy will better position Zentek to protect its innovations, support sustainable competitive advantage, and unlock additional monetization paths.
Current Business
Speciality Materials Platform.
Zentek is evolving into a B2B specialty materials coatings company focused on mission-critical applications including ice phobic protection, fire suppression, antimicrobial defense, corrosion inhibition, and thermal management across infrastructure, defense, energy, aviation, and industrial sectors.
Core Objectives:
Safeguard IP Portfolio: Systematically manage, maintain, and protect Zentek's existing intellectual property inventory.
IP Portfolio Optimization: Continuously review prior and current development work to capture, assess, categorize, and prioritize all generated IP for strategic pursuit.
CRO Services: Offer a comprehensive Contract Research Organization (CRO) environment from formulation creation through production scaling and validation for partners seeking protective materials solutions.
Development Platform: Provide a turnkey development ecosystem enabling new B2B customers to rapidly prototype and commercialize graphene-enhanced coatings.
Graphene Core: Leverage graphene and nanomaterials as the foundational platform across all applications.
Revenue Model: Generate value through three complimentary commercialization pathways: (i) IP licensing and technology transfer of proprietary formulations; (ii) supply of finished coated media to supply-chain partners; and (iii) a planned direct-to-consumer channel for finished ZenGUARD™-enhanced products, currently under evaluation. These pathways are complemented by knowledge-intensive CRO services billed on a milestone or time-and-materials basis.
During the reporting period, the Company continued to advance toward commercial production of its ZenGUARD™ coating at industrial scale for application to non-woven, spunbond polypropylene material to be used in surgical mask manufacturing and potentially on other materials and products including HVAC filters.
The Company developed ZenGUARD™ Enhanced Surgical Masks featuring its patented graphene coating. Independent testing by GAP Labs (May 2021) demonstrated increased viral filtration efficiency compared to uncoated masks. The Company received a Medical Device Establishment License from Health Canada (November 2021, license #18823) permitting manufacture and distribution of Class I medical devices including ZenGUARD™ coated products. Manufacturing was performed under contract by Viva Healthcare Packaging (VMedCare), producing approximately 340,000 masks between December 2024 and February 2025. In January 2026, VMedCare notified the Company of its decision to discontinue manufacturing activities effective March 31, 2026. Following the VMedCare decision to discontinue manufacturing, the Company is evaluating alternative manufacturing options to maintain continuity of supply for its ZenGUARD™ product offerings.
The Company maintains distribution agreements with Southmedic Inc. (Canadian hospitals and medical facilities), Henry Schein Inc. (dental practices in Canada, with potential US expansion subject to FDA approval), and Medwell Solutions LLC (United States, pending FDA clearance). The Henry Schein partnership has generated recurring and growing sales over three years. In Year 3 (April 2025 to March 2026), the Company shipped approximately 264,300 units (roughly 22,000 per month), generating gross sales of approximately $54,600, increases of approximately 13% in units and 12% in gross dollars over Year 2, achieved on one fewer order. Average order size grew approximately 32% year-over-year, from 1.1 to 1.5 skid-equivalents, reflecting deeper per-order throughput rather than simply a higher order count.
Growth to Date
| Period | Orders | Skid-Equiv. | Boxes | Masks | Gross $ (incl. tax) |
| Year 1: Apr 2023–Mar 2024 (launch, partial) | 1 | 0.8 | ~500 | ~24,900 | ~$5,200 |
| Year 2: Apr 2024–Mar 2025 | 7 | 7.8 | ~4,700 | ~234,900 | ~$48,600 |
| Year 3: Apr 2025–Mar 2026 | 6 | 8.8 | ~5,300 | ~264,300 | ~$54,600 |
The Company is actively evaluating alternative manufacturing capacity both domestic and international to ensure continuity for existing customers, with current inventory providing uninterrupted supply through this transition while maintaining product quality and regulatory compliance.
On March 22, 2023, the Company announced that further testing had been completed by SGS Standard Technical Services Co. on ZenGUARD™-coated mask material to characterize its performance under laboratory conditions. The testing measured changes in concentrations of E. coli and H1N1 on coated versus uncoated mask fabric over time and reported significant reductions in recoverable organisms on the coated material relative to untreated controls.
ZenGUARD™ Compound - HVAC Filtration
On September 30, 2020, the Company first announced testing on ZenGUARD™ use for HVAC systems. On January 13, 2021, the Company announced that testing by a major Canadian certification company had confirmed that there was very little effect on air flow and pressure drop with a ZenGUARD™ treated filter compared to an untreated filter. The Company spent approximately $60,000 on testing, including preliminary testing of ZenGUARD™ coated HVAC filter media for pressure drop and increased challenge bacterial filtration efficiency on uncoated and coated MERV 8 and MERV 13 HVAC filters.
Further to the press release dated November 30, 2021, the Company announced that it was awarded a research and development test contract through the ISC Testing Stream Call for Proposals to test ZenGUARD™ coated HVAC filters with interest from three different units within the NRC. The goal of the testing, conducted by CREM Co Laboratories with assistance from the Aerospace Research Centre, a department of the NRC was to demonstrate: (i) a net reduction in the airborne viral and bacterial load with ZenGUARD™ coating applied to standard filters; (ii) no modifications required to existing HVAC systems to achieve (i) above; (iii) no reduction in air flow rates, which means air exchange rates in the space will be unchanged; and (iv) no reduction in the air quality as the ZenGUARD™ coating was tested to ensure it does not contribute particles into the air stream.
Phase 1 testing commenced in December 2021 after an extensive design process, calibration, and assessment of the testing rig, and involved the test rig being installed inside an aerobiology chamber to push air through HVAC filter material with test organisms to study how these live airborne organisms were reduced by the ZenGUARD™ coating. Testing used multiple samples with repeated tests so that each filter's performance could be compared. It was determined that all Phase 1 targets were met including sufficient reduction in live airborne test organisms, no significant shedding of the ZenGUARD™ coating and air flow rates that were not impacted by the coating.
On December 15, 2022, the Company announced the successful completion of Phase 2 HVAC filter testing and that the preliminary report from Phase 2 testing had been received. The final report was received in January 2023 and announced on February 6, 2023. The report notes a significant reduction in live airborne test organisms with ZenGUARD™ coating applied to standard HVAC filters without modification to existing HVAC systems, with no reduction in air flow rates or increasing energy use. The testing demonstrated a reduction in live airborne bacteriophage surrogate contamination within a modular classroom environment, simulating a real-world environment. The testing was performed at the NRC's purpose-build bioaerosol testing facility, designed, and built specifically for testing wet aerosolized droplets, which is the primary mechanism for the spread of disease in an indoor setting.
The Company has also consulted and tested with LMS Technologies ("LMS"), a United States-based air media and filter testing company providing testing services and product certification for filter manufacturers LMS' independent testing of ZenGUARD™ enhanced MERV 8 filters demonstrated a significant increase in both bacterial and viral filtration efficiency in line with or better than the results from the NRC. The Company currently intends to continue to work to optimize configurations of HVAC filter materials coated with ZenGUARD™ technology at LMS to optimize its product and complete all testing and documentation required for regulatory submissions in Canada and the United States. The Company has engaged Intertek Group plc to conduct a review of regulatory requirements in other geographies of interest.
On September 6, 2023, the Company announced the results of a study comparing the viral filtration efficiency ("VFE") of ZenGUARD™ enhanced MERV 9 filters with an uncoated MERV 9 filter. The testing was performed by LMS, which specializes in the testing and certification of filter manufacturers across the world referring to the new American Society of Heating, Refrigerating and Air-Conditioning Engineers ("ASHRAE") standards for aerosolized particles and determining the impact of dust loading on VFE and particle filtration efficiency ("PFE") as per ASHRAE 52.2 testing standards. Key findings of the study included: (i) the VFE of ZenGUARD™ Enhanced Air Filters started with a significant advantage over equivalent non-coated filters, from 23.7% to 37.7%, a 59% enhancement or a 14% net gain overall, and, the VFE performance consistently increased faster for the ZenGUARD™ Enhanced Air Filters compared to the uncoated filters (at six months equivalent dust, loading, the VFE of the ZenGUARD™ Enhanced Air Filter was 85.6% compared to 55.2% for the uncoated filter, a 28.4$ net gain); (ii) the pressure drop remained consistent between ZenGUARD™ Enhanced Air Filters and uncoated filters as dust loading increased, indicating that ZenGUARD™ Enhanced Air Filters operated similarly to regular MERV 9 filters when tested for PFE, effectively removing particles across all size ranges.
On September 11, 2023, the Company announced the results of a study conducted by ParticleOne Inc., an RWDL Ventures company. The study evaluated the performance of ZenGUARD™ Enhanced Air Filter technology in comparison to a standard MERV 9 filter. The study was conducted to assess the effectiveness of filters in removing infectious particles from the air and to determine the potential return on investment ("ROI") of enhanced viral filtration from using ZenGUARD™ technology. The ParticleOne model ROI analysis indicated that the ZenGUARD™ enhanced MERV 9 filter resulted in a substantial reduction in annual absenteeism costs ($15,016.95) compared to a regular MERV 9 filter in an office space of 10,000 square feet with 75 occupants.
On December 8, 2023, the Company announced a distribution agreement with 1Click Heating and Cooling Inc. ("1Click"), a private HVAC company focused on the heat pump market, for ZenGUARD™ MERV 9 filters in various sizes and is expected to include other ZenGUARD™ enhanced MERV-rated filters in the future. This agreement will see 1Click utilize ZenGUARD™ filters for its regular customer service maintenance programs, along with making ZenGUARD™ filters available to customers from inventory held in various provinces. The Company's agreement with 1Click has an initial term of 2 years from the date of approval from the Pesticide Management Regulatory Agency and may be extended by mutual agreement of the parties.
On January 22, 2024, the Company announced the completion of a new study highlighting the potential energy emission and cost savings for commercial buildings adopting ZenGUARD™ Enhanced Air Filters. By using ZenGUARD™ Enhanced Air Filters to control infectious aerosols instead of increasing the percentage of outside air to achieve a similar risk reduction, the Company estimates that a typical office space of 10,000 square feet with 75 occupants can reduce HVAC energy consumption by approximately 62%.
On May 7, 2024, the Company announced that it completed a case study based on the City of Toronto highlighting the economic and environmental benefits related to using MERV 9A filters compared to using MERV 13 filters. The study quantifies cost savings and reductions in carbon emission and waste assuming the City of Toronto is currently using MERV 13 filters in all its buildings and switches to MERV 9A filters. The study found potential savings of over $40 million stemming from significantly reduced labour costs due to filters being changed every six months rather than every three months, reduced expenditures on air filters from replacing filters every six months rather than every three months, reduced energy requirements and costs due to improved air flow and lower waste disposal costs from fewer filters being used.
On May 23, 2024, the Company announced that it had entered into a distribution agreement effective March 19, 2024, with DCL Supply Ltd., a private HVAC master product distributor. The initial term of the agreement is for one year, and it automatically renews for subsequent one-year terms unless 90 days' notice is given by either party prior to renewal. The initial product to be distributed will be ZenGUARD™ Enhanced Air Filters for the HVAC market, subject to the assessment by the Health Canada Pesticide Management Regulatory Agency for registration under the Pest Control Products Act, which remains ongoing. Subject to receipt of such registration, this agreement would allow DCL Supply Ltd. to distribute ZenGUARD™ Enhanced Air Filters through its distributor network serving numerous industrial, commercial and institutional clients within and across Canada.
On June 12, 2025, the Company announced new independent test results comparing the viral filtration efficiency ("VFE") of ZenGUARD™ Enhanced Air Filters against the bacteriophage MS2 compared to equivalent Minimum Efficiency Reporting Value ("MERV")-rated filters without ZenGUARD™. The testing was performed by the third-party ISO 17025:2017 certified lab LMS Technologies Inc. ("LMS"), which specializes in the testing and certification of filter Manufacturers across the world in line with American Society of Heating, Refrigerating and Air-Conditioning Engineers ("ASHRAE") standards. The test results showed that the ZenGUARD™ Enhanced Air Filters achieved an average infectious aerosol removal efficiency of MS2 bacteriophage of 42% compared to an untreated filter, which achieved an average of 16%. These strong results align with previous tests performed with bacteriophage Phi6, which is often used as a surrogate for SARS-VoV-2 and other enveloped viruses. This milestone adds to a growing body of third-party validation demonstrating ZenGUARD™ Enhanced Air Filter's unique combination of effectiveness and simplicity. Based on these new test results using MS2 bacteriophage, the Company now has science-based, directly comparable data demonstrating that ZenGUARD™ is highly effective and is fully aligned with ASHRAE Standard 241 testing methodology. These results support the technical performance of the product but do not replace the need for registration or other authorization before marketing ZenGUARD™ Enhanced Air Filters in Canada or the United States.
The Company had previously completed its Innovative Solutions Canada Testing Stream contract to validate ZenGUARD™ Enhanced Air filters as a safe and effective device. As a result, the product is eligible for purchase by the Government of Canada through the Pathway to Commercialization opportunity.
Health Canada (PMRA) and United States EPA
On December 3, 2021, the Health Canada Pest Management Regulatory Agency ("PMRA") issued a preliminary position classifying ZenGUARD™ Enhanced Air Filters as pest control products under the Pest Control Products Act ("PCPA") subsection 2(1). On October 31, 2024, the Company announced that it had withdrawn its submission to PMRA for its ZenGUARD™ Enhanced Air Filters. On November 27, 2024, the Company announced its intention to add ZenGUARD™ Enhanced Air Filters as a Class 1 medical device under its existing MDEL similar to surgical masks.
On March 12, 2025, the Company announced that shelf-life efficacy testing has been completed on aged ZenGUARD™ Enhanced Air Filters, which is required for medical device compliance ZenGUARD™ Enhanced Air Filters were aged for 20 months prior to testing to establish the product's shelf life. Viral filtration efficiency ("VFE") was unchanged after aging demonstrating that the ZenGUARD™ coating has a consistent performance over a duration of 20 months. Notwithstanding these technical results, commercial use of ZenGUARD™ Enhanced Air Filters in Canada remains subject to obtaining appropriate authorization under the PCPA as described above.
On March 24, 2025, the United States Environmental Protection Agency ("EPA") issued a written determination (M009 FIFRA Regulated Determination: Pesticide Determination, EPA File Symbol 103888PA1) that ZenGUARD™ Enhanced Air Filters are a pesticide under the U.S. Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA") and also constitute a pesticidal device. EPA reached this conclusion because the filters are treated with a silver-based coating and are promoted with viral filtration efficiency and other public-health claims. As a result, sale or distribution of ZenGUARD™ Enhanced Air Filters with pesticidal claims in the United States would require compliance with FIFRA, which may include registration of the product and its active ingredient(s) and approval of labelling. The Company is assessing the feasibility, cost and timing of any potential FIFRA registration pathway and has not yet filed a full registration application for ZenGUARD™ Enhanced Air Filters with EPA.
On April 29, 2025, the Company announced that the Forensic Services and Coroner's Complex ("FSCC") in Toronto Ontario, where Dexterra Group Inc. provides integrated facility management services, has issued a purchase order for the procurement of ZenGUARD™ Enhanced Air Filters to be used across its facility.
On June 26, 2025, the Company announced that it had received a letter from Health Canada noting that Health Canada was considering the classification of ZenGUARD™ Enhanced Air Filters and inviting the Company to submit additional information regarding the appropriate regulatory classification.
On March 4, 2026, the Company announced the initiation of a pilot evaluation program with Quality Filters Inc. ("Quality"), a U.S.-based manufacturer of HVAC and industrial air filtration products, to assess the integration of the Company's proprietary air filtration media technology into Quality's commercial product lines.
Over the course of the next several months, the Company corresponded with Health Canada making submissions and providing scientific evidence and positions in order to properly classify ZenGUARD™ Enhanced Air Filters.
On May 6, 2026, the Company announced that it had received a revised classification by Health Canada's Pesticides Regulatory Directorate that ZenGUARD™ Enhanced Air Filters are not subject to regulation under the Pest Control Products Act. The product is exempt under section 3(1)(a) of the Pest Control Products Regulations on the basis that it operates through a mechanical mode of action. Based on the classification by Health Canada, the Company is now accepting commercial orders for ZenGUARD™ Enhanced Air Filters in Canada and is seeking to advance additional commercialization pathways, including licensing and the sale of ZenGUARD™ enhanced air filter media to participants in the HVAC supply chain. ZenGUARD™ is the subject of an issued Canadian patent (granted 2022; term to 2041) covering its application to personal protective equipment and HVAC applications.
On May 13, 2026, the Company announced that ISC had added ZenGUARD™ Enhanced Air Filters to its Pathway to Commercialization source list.
The Company has spent approximately $696,300 on this project.
ZenGUARD™ Enhanced air filters and disposable surgical masks Monetization Framework
The Company's ZenGUARD™ Enhanced Air Filter and mask technology offers three principal commercialization pathways, capitalizing on Zentek's proprietary graphene-oxide dispersion coating process and manufacturing expertise developed at its Guelph, Ontario facility where the Company has invested approximately $5.3 million in property, equipment, R&D, and process validation to establish pilot-scale compounding capabilities.
Pathway 1: Comprehensive IP Licensing and Technology Transfer
Zentek would license its ZenGUARD™ intellectual property, precise dispersion coating formulation molecular synthesis protocols, and operational know-how to a well-capitalized regional partner. The partner would assume full capital expenditure responsibility to construct:
• A commercial-scale dispersion coating facility for continuous filter media treatment; and
• An integrated molecular synthesis and compounding facility to produce the active ZenGUARD™ nanocomposite.
• Partner CapEx requirements mirror Zentek's Guelph benchmark, estimated at $4-8 million depending on targeted production capacity (e.g., 1-5 million filters annually), with license fees, running royalties (typically 5-10% of net sales), and technical milestones generating high-margin, recurring revenue for Zentek post-Health Canada commercial authorization.
Pathway 2: Finished Coated Media Supply
Following Health Canada approval for commercial-scale production (extending beyond current R&D scale), Zentek would supply pre-coated filter media directly to partners for final assembly into finished HVAC filters and or face masks. This model requires minimal partner CapEx (assembly equipment only, ~$0.5-1M) while delivering Zentek scalable, high-margin media sales revenue through validated supply chain and quality assurance protocols.
Zentek's licensing model contemplates partner-led regulatory navigation in target markets; the Company's revenue realization is thus contingent upon local partners' proficiency in securing requisite product registrations and certifications.
Pathway 3: Direct-to-Consumer (planned)
As a planned, forward-looking channel, the Company is evaluating direct-to-consumer sales of finished ZenGUARDTM-enhanced products to end users, including potential online and e-commerce fulfillment. The Company has not operated a direct-to-consumer model to date, and any such channel would be pursued only where supported by regulatory clearance, available manufacturing capacity, and acceptable margins.
The Company views Pathway 1 (IP licensing with technology transfer) as the preferred commercialization route, as it generates high-margin recurring revenue without significant capital requirements from Zentek while enabling rapid geographic expansion through well-capitalized regional partners.
Global Partnership Landscape
The Company has strategically deployed significant management time and travel resources over the past 18 months cultivating Gulf Cooperation Counsel ("GCC") commercialization channels, with new leadership now applying rigorous capital discipline requiring validated revenue paths and partner BD cost-sharing prior to incremental commitments. Below are key initiatives contextualized by required partner CapEx and monetization alignment.
On March 30, 2023, the Company announced that it had signed an agreement with Arka BRENStech Pvt Ltd ("BRENStech"), a company incorporated under the laws of the Republic of India (India), pursuant to which BRENStech will act as a local partner to the Company as it seeks to develop business opportunities in India. BRENStech's primary focus will be to establish sales and distribution opportunities for the Company's masks and HVAC filters and potentially other products as they become available. The Company also expects that BRENStech will connect the Company with university research facilities, assist with the navigation of applicable regulatory regimes, and source potential manufacturing partners for the Company's business opportunities in India and globally. During the period, the Company reviewed its strategy for developing business opportunities in India under the agreement with Arka BRENStech Pvt Ltd ("BRENStech"). While the agreement remains in effect, the Company has elected to prioritize resources toward partnerships with nearer-term revenue potential while maintaining the BRENStech relationship for future opportunities aligned with clearer market access pathways.
ZenGUARD™ HVAC Collaboration - FSCO (Saudi Arabia/GCC) - Pathway 1 Priority. The Company maintains a three-year manufacturing and distribution collaboration with Filtration Solutions Industrial Co. ("FSCO"), a leading Saudi Arabian filtration specialist, to produce and commercialize ZenGUARD™ Enhanced Air Filters across the GCC under revenue-sharing terms with renewal options. FSCO alignment contemplates Pathway 1 execution: partner-funded construction of coating (~$2-4M) and compounding facilities (~$1-2M) in KSA to serve Aramco, regional infrastructure, and offtake demand. Recent milestones include:
• Technical discussions for 30-filter production run targeting local resellers.
• FSCO preparation for Aramco SAP Ariba procurement system integration (prerequisite for POs).
• Inventory positioned for prospective UAE pilot deployment under Company evaluation.
While FSCO has completed initial sampling and customer validation phase and is advancing integration into Aramco's procurement systems, its manufacturing pedigree and Aramco adjacency position it as a cornerstone Pathway 1 partner with demonstrated regional scalability.
Aramco MECC MoU (Saudi Arabia) - Pathway 1 Strategic Priority. The Company formalized collaboration with Aramco via Memorandum of Understanding at the Middle East Corrosion Conference (MECC), targeting graphene-based HVAC filtration aligned with Saudi Vision 2030 IKTVA localization mandates. This flagship initiative maps to Pathway 1: Aramco/local partner consortium funding coating and compounding facilities (~$4-6M total CapEx) to enable Kingdom-first commercialization. Technical dialogues have validated:
• Pilot scope for Saudi facilities targeting operational/energy/emissions savings.
• Local manufacturing requirements integration.
• Follow-on protocols for technical validation and deployment coordination.
While technical validation has progressed, the pace of commercial discussions has been slower than anticipated. Management is actively evaluating all available opportunities to accelerate these dialogues and convert the MoU into definitive agreements. The Company remains focused on architecting a value realization path that ensures prudent capital allocation commensurate with Aramco's strategic stature, while seeking to expedite the transition to the execution phase. Furthermore, Management emphasizes that filtration is not the sole opportunity within this partnership. The Company looks forward to approaching the organization with a full suite of deployable products relevant to their broad industrial and infrastructure use cases. Leveraging its maturing intellectual property portfolio, Zentek intends to introduce its advanced anti-corrosion and intumescent coating additives to demonstrate how the Company's platform technologies can address critical operational challenges beyond HVAC. Management believes that presenting this comprehensive portfolio will better position Zentek to architect a definitive value realization path commensurate with Aramco's strategic stature.
International Sales Platform - RSK Environment Limited (GCC/Global) - Pathway 2 Sales Conduit. The Company engaged RSK Environment Limited, a globally scaled environmental consultancy with extensive GCC infrastructure exposure, as a pure sales and project development conduit for ZenGUARD™ Enhanced Air Filters. Pathway 2 alignment: Zentek retains complete responsibility for manufacturing, coating, and fulfillment, compensating RSK solely through fixed commissions on closed sales requiring zero partner CapEx beyond basic assembly capabilities. This model enables rapid market testing without licensing or facility commitments. Strategic optionality: Should RSK surface substantial demand exceeding Zentek's Guelph capacity, it could catalyze Pathway 1 evolution (licensing IP + know-how to a local manufacturer) or Pathway 2 scaling (supplying coated media to regional fabricators serving RSK-originated orders). Absent CapEx-justified scale, Zentek would ship finished coated filters directly to RSK-sourced end customers. While the core relationship has not yet yielded transformative opportunities, RSK's network has generated ancillary engagements advancing toward a prospective UAE pilot affirming channel viability with negligible incremental Company investment.
Localization Proposal - Ministry of Mining and Industries (KSA/UAE) - Pathway 1 Potential. The Company submitted a formal localization proposal to KSA's Ministry of Mining and Industries advocating ZenGUARD™ manufacturing indigenization, presently under review. Success would mandate Pathway 1 partner CapEx (~$4-8M facilities) potentially subsidized through government incentives, with capital requirements contingent upon adjudicative outcomes within this deliberative continuum.
Initiatives under Strategic Surveillance - CapEx Assessment Pending
The following legacy initiatives-all requiring Pathway 1 partner CapEx ($3-8M facilities) without proximate revenue validation-have been suspended pending BD cost-sharing commitments:
• Levidian Nanosystems Limited ("Levidian") (Middle East Manufacturing): Graphene incompatibility with ZenGUARD™ oxide formulation; paused pending technical reconciliation.
• Al-Ramez / Saudi Excellence MoU: Multi-IP commercialization framework yielded no milestones despite KSA executive immersions; value proposition unclarified.
• Jazeera Paints Company ("Jazeera Paints") (ZenARMOR™ Coatings): Pre-commercial technology absent defined product spec; paused pending partner-funded brand development.
• Gulf Air Filters Factory Company ("GAFCO") (KSA Filter Manufacturing): Filtech discussions deemed temporarily infeasible; relationship maintained on low-touch basis for future reactivation.
These relationships remain under strategic surveillance, with GCC market intelligence gathered cost-effectively and culturally attuned re-engagement protocols refined for opportunistic advancement. This disciplined framework positions Zentek to capture IP value through partner-funded scale while preserving capital for near term commercialization priorities.
Corrosion Coating Collaboration ZenARMOR™ - Jazeera Paints (Saudi Arabia/GCC). Zentek Ltd. has entered into a collaboration with Jazeera Paints (Saudi Arabia/GCC) to evaluate ZenARMOR™ corrosion-prevention nano-pigments in industrial and infrastructure coatings.
Industrial Exposure via MECC / Aramco MoU (Saudi Arabia)
The Company participated in the Middle East Corrosion Conference (MECC) and formalized collaboration with Aramco through a nonbinding MoU focused on graphene-based technologies, prioritizing HVAC air filtration. Discussions confirmed pilot studies in Saudi Arabia, alignment with IKTVA requirements, and intent to work with a local Saudi manufacturer, with follow-up on advancing pilot scope and technical validation. As of recent, Management will focus on ensuring that a strategic value creation path is defined to ensure responsible capital allocation.
GAFCO (KSA/UAE Filter Manufacturer)
The Company engaged GAFCO, a KSA filter manufacturer, in person at the Filtech conference regarding potential contract manufacturing. No agreements were reached as it was not deemed feasible; Management will continue to maintain the relationship on a soft touch basis as a potential partner to develop once capital is available to do so.
Localization of ZenGUARD™ Filters and Manufacturing - Ministry of Mining and Industries (KSA/UAE). The Company submitted a proposal to the Ministry of Mining and Industries-KSA for localization of ZenGUARD™ filter manufacturing, which remains under review. Capital requirements would depend on the outcome.
Looking ahead, management intends to focus commercialization of ZenGUARD™ Enhanced Air Filters through qualified partners in markets where the regulatory pathway, value proposition and route-to-market are clearly defined and capital efficient. The Company is applying lessons learned from its Canadian and U.S. regulatory experience to implement a more disciplined global business development process that prioritizes:
(i) Rigorous qualification of partners and target geographies;
(ii) Alignment on regulatory strategy and cost-sharing; and
(iii) Prioritization of opportunities where independent performance data and energy-savings benefits can be translated into durable, recurring revenue.
By combining a science-based regulatory strategy with a more selective partnering model, Zentek aims to accelerate the commercialization of its underlying intellectual property globally while improving risk-adjusted returns on future ZenGUARD™ deployments.
ZenGUARD™ Industrial Scale Production and Coating Facility
Detailed engineering of equipment for manufacturing the ZenGUARD™ compound began in July 2021. On February 28, 2022, the Company announced that the facility was fully licensed and permitted for ZenGUARD™ production. The Company has installed industrial-scale production equipment to produce the ZenGUARD™ coating formulation at its York Road, Guelph, Ontario location, which location is permitted for industrial use. The Company has also purchased coating equipment so the process of applying the ZenGUARD™ coating formulation to spunbond polypropylene for use in surgical masks, HVAC filter materials, other PPE equipment, and potentially other uses, can be completed by the Company on-site. The Company spent cumulatively approximately $2.8M on this objective with no further additional expenditures required.
The effective construction completion date for the coating line was November 30, 2022. Following completion of installation, a period of training and certification began. The coating line became commercially operational in August 2023. The existing slitter configuration is not appropriate for commercial-scale production of coated HVAC filters, and, if and when the Company is authorized to sell ZenGUARD™-coated filters, it expects to incur additional capital expenditures of at least approximately $10,000 for basic retrofit and scale-up modifications to the coating line in order to provide custom size coated media.
On May 18, 2023, the Company announced that it had been granted the ISO 13485:2016 Quality Management System certification standard by the British Standards Institution. The Company also received Medical Device Single Audit Program ("MDSAP") certificate No. 777967. The ISO and MDSAP are required for Zentek's Quality Management System that is specific to medical devices (i.e. ZenGUARD™ Surgical Masks) and does not include the lab facility at Corporate Court in Guelph, Ontario.
Proposed Construction of Graphene Oxide Production Facility
In addition to the construction of the ZenGUARD™ industrial scale production and coating equipment, as discussed above, the Company intends to construct a plant to produce GO. The Company believes that the ability to produce GO itself, which is the precursor for the ZenGUARD™ compound, rather than relying on third-party suppliers of GO, will be economically favourable to the Company over the long term, as well as reducing supply and shipping risk. The Company believes that there are three primary reasons it would benefit from an ability to produce GO internally: (i) it should eliminate or significantly reduce supply chain risk; (ii) GO is not a homogeneous substance and by producing its own GO the Company could ensure product consistency; and (iii) the Company believes that the demand for GO is increasing and that a domestic production facility could have the potential to generate product for third-party users of the material.
The Company engaged Bantrel Co. to begin engineering work on the proposed GO production plant in January 2021. Potential sites have been investigated. A site has not yet been selected, and the permitting process has not yet begun. As of March 31, 2026, the Company has spent $35,000 in preliminary investigations relating to this project and expects that approximately $7,500,000 will be required to complete construction of a GO production facility.
The Company estimates that fifteen to eighteen months will be required to complete the construction of a GO production plant from the time of commencement, which is a management estimate based on the expectation of securing an agreement for the purchase of technology from an existing GO producer.
Risks include, but are not limited to, the inability to reach an acceptable agreement for the purchase of such technology, the inability to adapt existing technology to Canadian regulatory requirements, scaling-up from known existing production capacities could become a requirement, and delays as a result of ongoing material and equipment supply shortages.
Product & Business in Development
ZenGUARD™ and Other Research and Development Activities
Fire Retardant
The Company announced on March 28, 2022, that it had filed a provisional patent with the United States Patent and Trademark Office for an innovative Graphene Oxide-Metal-Organic Framework ("GO-MOF") compound for use in fire retardant products. The provisional patent application has since been filed as an international (PCT) patent application with the World Intellectual Property Office on March 27, 2023, and entered national phase in the United States on September 25, 2024. Management of the Company considers the manufacturing of the GO-MOF compound as relatively easily scalable and efficient, due to the patent-pending facile synthesis process. The Company believes the fire-retardant GO-MOF additive could potentially be placed in a variety of coating products, such as latex, epoxies or included in polymers. When integrated into a polymer, it could potentially create a fire-resistant plastic that could be used in electric vehicles, providing a fire-resistant non-metal casing for the batteries. Management currently expects that GO-MOF production could be achieved on the existing ZenGUARD™ industrial scale production facility with minimal additional capital expense.
The Company has spent approximately $175,700 on this research and development project, and intends to conduct further testing, which it currently estimates will cost approximately $50,000. In the financial year ended March 31, 2026, optimizations to the formulations were performed at the Company's lab. Testing and optimization work remains ongoing as of March 31, 2026.
On September 3, 2025, the Company announced that it had entered into a binding letter of intent ("LOI") with Altek Advanced Materials Inc. ("Altek"), a Nevada incorporated private company focused on the commercialization of advanced material technologies in the United States, to negotiate one or more non-exclusive licensing agreements relating to Zentek's various technologies, including ZenGUARD™, in order to accelerate Zentek's efforts and opportunities for commercialization in the United States. The LOI provides for an initial licensing term for ZenGUARD™ of five years, with an option to renew the term for an additional five years. Royalties of between 5% and 8% of net sales of ZenGUARD™ or ZenGUARD™ products based on certain net sales thresholds. Altek shall be responsible for manufacturing and commercializing the products in the United States, and Zentek shall retain ownership of all of its intellectual property.
On November 5, 2025, the Company announced the development of a novel Graphite Gel-Based Fire-Retardant ("GBFR") product that combines both rapid gelation and intumescent components to rapidly protect homes from wildfires. Altek was granted conditional, exclusive rights to commercialize the technology in the US, pursuant to a development and collaboration agreement between Zentek and Altek dated November 4, 2025 ("GBFR Agreement"). Pursuant to the GBFR agreement, Zentek granted an exclusive license to Altek to develop, manufacture and commercialize the GBFR in the US, in consideration for Altek funding the development of the GBFR, providing, however, that such license will convert to a non-exclusive license in the event that the annual royalty payments to Zentek are less than $1M annually, following a ramp-up period of 18 months from the date hereof. Zentek shall retain ownership of the GBFR intellectual property, and Altek shall be responsible and liable for all regulatory matters in the US. The term of the GBFR Agreement is five years, with a renewal option for an additional five years.
During the three-month period ended March 31, 2026, the Company substantially completed the defined GBFR development work packages. On March 3, 2026, Altek informed the Company that they were moving forward in another direction and work with Altek ceased.
During the period, the Company initiated discussions with a U.S.-based HVAC filter manufacturer that is evaluating the integration of ZenGUARD™ into its product portfolio. Management is actively engaged in development and commercialization discussions with this partner, with an initial priority on defining and validating the appropriate U.S. regulatory and market access pathway for ZenGUARD™-enhanced air filters from the partner's side, as it also pursues broader applications in Canada or other jurisdictions. This approach reflects Management's view that progressing a clear regulatory strategy with a commercially motivated U.S. partner may provide a more efficient route to market than relying solely on domestic Canadian pathways, which have experienced classification uncertainty and extended timelines in prior filings.
Diesel Fuel Additive
The Company is working to develop a stable graphene-based diesel fuel additive to improve combustion, increase burn rate, reduce greenhouse gas emissions and to improve fuel economy of diesel fuels. Initial testing has shown an increase in the performance of diesel fuel. The Company is working to improve on these early results through optimization work. The Company has filed a provisional patent application for its graphene-based fuel additive technology.
The Company is developing a process to functionalize GO to produce a stable dispersion in diesel fuel. The fuel additive was tested by Conestoga College in a Gunt 159 single-cylinder test engine, which yielded an improvement in fuel economy of over 10% under certain rpm.
The Company completed its work with Dr. Sina Kheirkah at the University of British Columbia-Okanagan Campus ("UBCO") to test GO-doped fuel as part of an NSERC alliance project for $110,500 cash contribution and a total budget of $311,500 over two years to continue doped fuel research. The project focused on measuring the combustion of doped fuel in both droplet and spray combustion. The Company has spent approximately $98,900 on this research and development project.
This project was abandoned due to the unavailability of further funding, and no additional development work is currently planned under this program.
Icephobic Coating ("ZICE01")
The Company is also working to develop a new, patent-pending, carbon-based, nanotechnology-enhanced coating designed to prevent or reduce ice accretion for aviation (including drone) and wind energy applications.
The Company has conducted testing at the National Research Council of Canada's ("NRC") Altitude Icing Wind Tunnel in Ottawa and prepared graphene-enhanced elastomer material and coated coupons for testing.
The Company disclosed on February 28, 2022, that the ZICE01 coatings were undergoing full flight trials on a specially equipped research aircraft under real-world ice-forming weather conditions. On March 14, 2022, the Company announced the results of three rounds of testing of its ZICE01 coating, including laboratory tests, real-world flights and applications related to drone operations in adverse weather. In real-world testing, the Company reported that video footage of its ZICE01coating on test pieces attached to a research aircraft undergoing flight trials targeting adverse weather environments has shown positive results and demonstrated that, under significant icing conditions, the coatings provide an effective de-icing and anti-icing solution. Drone testing showed that propellers coated with the ice ZICE01material can maintain higher thrust, when compared to a non-coated propeller, due to the shedding of ice that forms on the blades that would otherwise degrade the drone's ability to maintain stable flight. Accelerated ageing testing has been completed by exposing samples coated with ice ZICE01 elastomer to UV weathering for 1,000 hours, which approximates two years' worth of sun damage in typical Canadian weather. These samples were then tested in an icing wind tunnel under dynamic conditions and demonstrated significant retention of their icephobicity.
On August 2, 2022, the Company filed a full patent application with the World Intellectual Property Office for Nanomaterial-Enhanced Elastomer for Passive Ice Accretion Prevention. The Company disclosed this on September 19, 2022. The patent application has since been filed by the Company in Canada and Europe.
On September 19, 2022, the Company announced the successful completion of sand erosion testing at the NRC and rain erosion testing at the Anti-icing Materials International Laboratory in Quebec which demonstrated the ZICE01 material's durability in adverse conditions for both wind turbine and drone industries.
On May 4, 2023, the Company announced successful drone testing, where thrust was maintained under calibrated icing conditions of freezing drizzle and freezing rain in an outdoor, real-world environment. The drone with the Company's ZICE01 coating applied to the propeller blades hovered under the outdoor icing rig and, on all tests conducted, maintained flight until the end of the battery life of the drone. The same drone with uncoated propeller blades rapidly lost the ability to maintain flight. These tests are expected to satisfy the Transport Canada requirement for anti-icing equipment. The current regulations for civilian drone operations in Canada as per Transport Canada regulations state that no pilot shall operate a remotely piloted aircraft system when icing conditions are observed, are reported to exist or are likely to be encountered along the route of flight unless the aircraft is equipped with de-icing or anti-icing equipment and equipment designed to detect icing.
The Company is currently consulting with Transport Canada to propose the Company's passive ice accretion technology as a potential means of compliance to satisfy the requirements as well as working to find a collaborator that could provide equipment designed to detect icing.
On May 30, 2023, the Company announced a collaboration with Pattern Energy Group LP to optimize, test and validate the Company's ZICE01 coating for the wind turbine industry. The partnership is being supported financially by both the Natural Sciences and Engineering Research Council of Canada and PRIMA Quebec - Advanced Materials Moving Forward.
The Company continues to consider and seek partners to commercialize this technology, including drone companies and companies specializing in elastomer production. Because the NRC has been testing a variety of coatings, the Company has been able to participate in the NRC testing process thus far at no cost to the Company. However, the Company anticipates additional testing and development to cost approximately $150,000.
The demand for this class of product across industry and consumer facing products suggests that, subject to the availability of appropriate funding and commercial partners, further development of this technology would be warranted.
Battery Technology
The Company has been collaborating with Dr. Michael Pope at the University of Waterloo since 2017, developing battery technology to improve anode performance. One highly studied area for lithium-ion battery development is to improve the anode material. Currently, electric vehicle anodes are composed of graphite, which has a limited theoretical specific capacity of ~372 mAhg-1. Silicon has attracted significant attention as a replacement material, mainly due to its high specific capacity of 4,200 mAhg-1, but also due to its low working potential, low price and availability. However, silicon has an enormous volumetric fluctuation (greater than 300% in all dimensions) when charging and discharging. This feature is the root cause behind the issues of poor cycle lifetime, irreversible capacity loss, and destruction and reformation of the solid electrolyte interface.
Using silicon in the anode material, Dr. Pope has attempted to address these issues and has created a patent-pending graphene-wrapped silicon anode material. On February 18, 2022, the Company announced the filing of a provisional patent with the United States Patent and Trademark Office relating to a graphene-wrapped silicon anode material. Since April, Dr. Pope's team has optimized the anode material, which now has a specific capacity of over 1,000 mAh/g and retains over 80% of its capacity over 320 charge-discharge cycles. The specific capacity of this material is a significant improvement over common graphite anodes; however, the cycle life still requires improvement compared to typical electric vehicle batteries, which lose about 4% capacity over 1,000 charge-discharge cycles. The Company intends to continue to work with Dr. Pope's team to develop this technology with the goal of improving performance to meet industry requirements. The Company filed a patent application under the Patent Cooperation Treaty on May 17, 2022.
On October 28, 2022, the Company announced the commencement of a four-year, $1,600,000 research project in collaboration with Professors Mohini Sain and Ning Yan from the University of Toronto and Ford Powertrain Engineering Research and Development Centre. Funding for the project includes $1,200,000 from the Mitacs Accelerate program. The project seeks to assess novel concepts for the purpose of inventing multifunctional materials to be used in automotive battery components including anode, cathode, electrolyte, and separator. The Company will be working in tandem with University of Toronto researchers providing and testing advanced graphene materials including the Company's patent-pending anode material developed by Dr. Michael Pope.
On August 8, 2024, the Company announced preliminary battery testing results and the commencement of a three-year $441,000 project in collaboration with Professors Mohini Sain and Ning Yan from the University of Toronto. Funding for the project is provided by a NSERC Mission Alliance Grant. The Company announced that promising preliminary results have already been achieved from this research with pouch cell batteries featuring engineered Albany graphite by the University of Toronto with a minimum 17% increase in capacity over batteries using commercial grade anode material. The project seeks to characterize and optimize the Albany graphite by exploring various pathways to purify, increase capacity, enhance cycle life, and engineer the graphite to meet or exceed commercial standards for anode material in the EV market. The results achieved are preliminary and will be verified through further testing or at an independent third-party facility.
Buidling on these results, and as part of the work supporting its updated Preliminary Economic Assessment, the Company is exploring the potential to create a new category of batteries powered by ultra-high-purity (UHP) graphite purified through a fluidized bed reactor (FBR) process. This collaboration with the University of Toronto is ongoing, with a focus on NATO-aligned defence applications, where supply-chain security, material qualification, and performance requirements take priority over commodity-scale cost. The Company believes that pairing engineered Albany graphite with FBR-based purification may support battery components capable of meeting the demanding standards of allied defence end users. This work is exploratory in nature, the results achieved to date are preliminary, and any path to commercialization would be subject to further testing, independent verification, qualification, and the availability of appropriate funding and partners.
Corrosion Protection
On February 8, 2023, the Company announced the development of ZenARMOR™, a novel corrosion protection technology based on functionalized GO, for potential use in naval and marine infrastructure, bridges, buildings, pipelines, and other industries. ZenARMOR™ could be produced in the ZenGUARD™ facility. Third-party testing on ZenARMOR™ yielded excellent corrosion resistance with no blisters or other signs of corrosion after 1,500 hours of ASTM B-117 Salt Spray Test with ZenARMOR™, and ZenARMOR™ qualified for the Innovative Solutions Canada ("ISC") Testing Stream - Military Call for Prototypes. The Company has filed an International Patent Application on this corrosion protection technology, which was filed in Canada and the United States, as well as a trademark for ZenARMOR™.
On October 4, 2023, the Company announced that it had prepared and shipped the first corrosion paint samples to the NRC for the first round of testing as part of the ISC - Testing Stream - Military Call for Proposals. NRC's Aerospace Research Centre's Aerospace Manufacturing Technologies Centre tested the Company's nano pigment in military-grade chromate-free paints for evaluation in its first of three rounds of testing. ZenARMOR™ was evaluated in commercial non-chromate aviation paint systems developed by PPG Industries Inc. and Akzo Nobel N.V. Three rounds of corrosion testing were completed from September 2023 to July 2024. Testing followed ASTM B117 (salt spray) and ASTM D5894 (cyclical corrosion) standards. The Company announced on April 16, 2025, that the tests were successful in demonstrating the effectiveness of ZenARMOR™ nano-pigments in inhibiting corrosion of the aluminum alloy AA2024-T3.
The Company continues to seek the most effective, cost-efficient, and scalable process to produce high-quality GO. The production of GO requires a consistent source (or precursor) material for conversion to graphene, which is then applied to various products for enhancement. The Company believes that it has a potential competitive advantage with its interest in AGC and the large and high-quality supply of source material from the Albany Graphite Project, if and when the Company determines it is cost effective to use such material.
Advanced testing on potential new processes for commercial GO production is underway. The Company also continues to work with universities on different processes that could potentially lead to a more efficient and/or lower-cost process for GO production.
The following table sets out some of the specific research and development projects that the Company is undertaking:
| Initiative | R&D Timing and Stage(1) |
Major Components to be Funded |
Research Site | Funds Spent to Date | |
| ZenGUARD™- Coated Masks | Advanced stage of development (currently in the market) | Coating of ZenGUARD™ compound on PPE masks (polypropylene fabric) for reduced microbial transmission through aerosols. Continued work of optimizing material and characterization of compound. | Internal | Approximately $170,000 has been spent as at March 31, 2026. | |
| ZenGUARD™ HVAC | Advanced stage of development | Coating of ZenGUARD™ compound on HVAC filter systems in buildings, transportation, etc., for deactivation of aerosolized viral particles in enclosed spaces to develop pathogen de-activating HVAC filters. | Internal | Approximately $696,300 has been spent as at March 31, 2026. |
| Initiative | R&D Timing and Stage(1) |
Major Components to be Funded |
Research Site | Funds Spent to Date | |
| Aptamer-based rapid test | Intermediate stage of development | Validation of efficacy of disease detection platform for a broad range of aptamer-based disease detection. |
McMaster University | Approximately $2,686,000 has been spent as at March 31, 2026. | |
| GO based fuel additive | Early stage of development | Development of graphene-based additives to liquid fuels for improved performance metrics, including burn time, burn temperature, droplet size and fuel economy to create a high-efficiency fuel additive. | Internally | Approximately $98,900 has been spent as at March 31, 2026. | |
| 3D Printing/Shielding | Early stage of development | Adding GO and nanomaterials into polymers to improve conductivity and to develop complex shapes for E&M shielding for space and other applications to develop conductive 3D printable filaments. | UBC Okanagan | Approximately $65,600 has been spent as at March 31, 2026. | |
| Icephobic Coatings | Intermediate stage of development | GO and/or polymer composite icephobic coating for application in the wind turbine and drone industries to develop icephobic coating for prop-blades, and wind turbine blades. | Internally and externally | Approximately $19,900 has been spent as at March 31, 2026. |
| Initiative | R&D Timing and Stage(1) |
Major Components to be Funded |
Research Site | Funds Spent to Date | |
| Anode and Battery Technologies | Early stage of development | Development of graphene-enhanced anode material. Mitacs Accelerate project develops new materials for all aspects of an automotive battery including anode, cathode, separator, electrolyte. |
University of Waterloo and University of Toronto | Approximately $302,100 has been spent as at March 31, 2026. | |
| Fire Retardant Intumescent Coatings | Intermediate stage of development | Additives for an intumescent coating to improve the performance of regular formulations. | Internally and externally | Approximately $175,700 has been spent as at March 31, 2026. | |
| Corrosion Protection | Intermediate stage of development | Nano pigment additives to improve the corrosion protection and mechanical performance of organic coatings. | Internally and externally | Approximately $91,200 has been spent as at March 31, 2026. | |
| SARS-CoV-2 prophylactic/therapeutic | Early stage (pre-clinical) | An inhalation, delivered universal, aptamer-based, therapeutic and prophylactic. | Externally | Approximately $92,000 has been spent as at March 31, 2026. | |
| Influenza prophylactic/therapeutic | Early stage | Development of an aptamer-based therapeutic/prophylactic for the treatment of influenza and H5N1 in particular. | Internally and externally | Approximately $94,600 has been spent as at March 31, 2026. |
Notes:
(1) Timing is based on management's reasonable business judgement and subject to certain assumptions and risk factors that may or may not be foreseeable to the Company. See "Forward-Looking Statements" and "Risk Factors". Management currently believes that products that are in the advanced stage of development are no more than one year from being marketable, intermediate stage of development are approximately 1-2 years from being marketable, and products that are in the early stage of development are approximately 3-5 years from being marketable.
Aptamer-Based Technology
Pursuant to a license agreement dated June 11, 2021, as amended June 23, 2023, McMaster University has granted to the Company, for a twenty-year term, a worldwide exclusive royalty-bearing license to use and practice all aptamer and DNAzyme uses, including, but not limited to, diagnostics, therapeutics, and as neutralization agents, including, but not limited to SARS-CoV-2. On October 5, 2023, the Company announced the launch of a wholly owned subsidiary that owns the exclusive, global licensing rights for all aptamer-based technology from the collaboration with McMaster University. The technology was developed by a team of researchers under the guidance of Drs. Yingfu Li, John Brennan and Leyla Soleymani, who have expertise in biosensing technologies and applications as point of care diagnostics. This patent-pending technology was validated with clinical samples from patients recruited under the supervision of two clinicians, Drs. Deborah Yamamura and Bruno Salena, who also work at McMaster University. The project was funded by the Canadian Institutes of Health Research. This technology has shown to be accurate (similar to current PCR tests), is saliva-based, affordable and scalable, and provides results in under 10 minutes. A license fee of $100,000, comprised of $50,000 cash and $50,000 in common shares of the Company (19,157 common shares at $2.61 per share) was paid to McMaster University as consideration. Although this technology was initially being developed specifically for COVID-19, this technology platform is designed to be able to detect other diseases by changing the aptamer to match new diseases.
On May 19, 2022, the Company announced that McMaster received two Natural Sciences and Engineering Research Council ("NSERC") grants related to the aptamer-based rapid detection technology; the Alliance Missions Grant in the amount of $1,000,000, and an Idea to Innovation (I2I) Grant in the amount of $350,000, of which the Company will make a $140,000 contribution. The Company intends to continue working with Dr. Yingfu Li and the research team at McMaster through in-kind contributions, using these grants towards commercializing the rapid diagnostic platform. The grants will be used to advance commercialization efforts by improving the performance of aptamers, optimizing chip synthesis, and initiating tests for additional pathogens that can be incorporated into its pathogen detection platform. The Company currently expects the cost to reach commercialization to be approximately $2,500,000, which includes enhancements and further development of the technology. StarFish Product Engineering Inc. is to conduct product strategy alignment, usability analysis, device and architecture development, proof of concept and prototyping, and program development.
To bring the product to market, the Company will be required to obtain authorization from Health Canada under an interim order, or to obtain a Class IV Medical Device Active License ("MDAL"). The process for obtaining an MDAL involves completing certain testing requirements and demonstrating that the product is (i) safe, (ii) effective, and (iii) fit for purpose. Assuming that process is completed, the Company would then start preparing a product technical file and then seek to complete a Health Canada Class IV application.
On July 27, 2023, the Company announced a new aptamer technology platform with McMaster University that significantly increases the binding affinity of aptamers. The increased binding affinity enhances the limits of detection for aptamer-based diagnostics and could lead to the successful adaptation of these same aptamers for new therapeutic and prophylactic treatments. Provisional patent applications were filed with the United States Patent and Trademark Office which have since resulted in the filing of three international patent applications filed with the World Intellectual Property Office as of December 31, 2025.
On October 10, 2023, the Company announced further pre-clinical testing results of the aptamer-based platform technology by the Dr. Matthew Miller Lab. Further preclinical testing was completed supporting the aptamer as a lead therapeutic target. An in vivo preclinical longevity of protection study was conducted to assess the safety and efficacy of the aptamer-based treatment over a period of 24 hours and demonstrated that the aptamer provided 24 hours of neutralizing protection against SARS-CoV-2. A subsequent study was conducted to determine the minimal effective dose of the aptamer required to protect against a lethal challenge of SARS-CoV-2.
On November 15, 2023, the Company announced the development of a significant upgrade to its aptamer platform improving the binding affinity of the universal COVID-19 aptamer from 300 to over 500 times, compared to the base aptamer. The improved platform also solved key challenges for manufacturing, and these High-Binding Affinity ("HBA") aptamers are now produced with approximately a 95% yield. The Company estimates that an additional $1,000,000 will be required to complete the pre-clinical program for the SARS-CoV-2 therapeutic and enter clinical trials.
On November 29, 2023, the Company announced the successful testing of its COVID-19 HBA aptamer against the Omicron XBB 1.5 variant (Omicron) by the Miller Lab at McMaster University in the latest pre-clinical study. The performance of the COVID-19 HBA aptamer was comparable to the performance of monoclonal antibodies, according to the Miller Lab, as it provided clinical protection against infection with the Omicron XBB 1.5 variant. The Company will now begin to explore partnership opportunities in the pharmaceutical space as its aptamer platform may offer a fast, economical, and novel approach to the development of new therapeutics for clinically relevant biological markers.
On December 13, 2023, the Company announced the launch of Triera Biosciences Ltd. ("Triera") as a wholly owned subsidiary for its aptamer platform technology. Triera now owns the exclusive, global licensing rights for all aptamer-based technologies from the collaboration with McMaster University.
On January 30, 2024, the Company announced the positive therapeutic results achieved by Triera Biosciences for C19HBA aptamer as a potential therapeutic. In the most recent trial completed in January 2024 by the Miller lab at McMaster University, C19HBA was tested for its therapeutic potential. The treatment that featured C19HBA demonstrated improved therapeutic benefit over no treatment of the LMA therapeutic. The full results of this preclinical investigation are pending publication in a peer reviewed journal.
On March 25, 2024, the Company announced that Triera completed testing demonstrating that its C19HBA SARS-CoV-2 universal aptamer built on the proprietary high-binding affinity aptamer platform has shown a promising safety and toxicity profile in preclinical testing.
On May 6, 2024, the Company announced that Triera has prioritized the development of a prophylaxis and therapeutic for highly pathogenic avian influenza. The mechanism of neutralizing the H5N1 virus is comparable to the mechanism used by C19HBA against the SARS-CoV-2 virus. More specifically, the aptamer is believed to bind to and neutralize multiple subtypes of the HA surface protein (e.g., H1, H2, H5, etc.), preventing the virus from entering healthy cells and spreading infection.
On November 6, 2024, the Company announced that Triera had been awarded a $1,100,000 Government of Canada contract to test multivalent aptamer technology for the rapid drug discovery of therapeutics or prophylactics of highly pathogenic avian influenza ("HPAI") A(H5N1). On April 23, 2025, the Company announce that it had completed the first phase of the contract by delivering a lead candidate countermeasure for A(H5N1) and has now moved to the testing phase of the project. The contract began in November 2024 to develop both a prophylactic and therapeutic for A(H5N1) using a multivalent aptamer strategy that previously led to the successful development of a SARS-VoV-2 aptamer. Most activities for the lead countermeasure candidate development were performed through collaboration with the Li Lab at McMaster University.
On September 18, 2025, the Company announced that it had completed the first in vivo tests of the lead candidate countermeasure for seasonal influenza (H1N1) as part of the $1,100,000 Government of Canada contract. Testing of the lead candidate in vivo (mouse model) was facilitated by Nexus Health at McMaster University under the supervision of Dr. Matthew Miller. Animals given the aptamer lead candidate prophylactically had substantially improved clinical scores, 5x greater survival rates, 80% less weight loss 5 days post-infection, and decreased recovery times compared to the control group.
On January 29, 2026, the Company announced the departure of its Chief Science Officer, Colin van der Kuur. The responsibilities of the Chief Science Officer role have been redistributed across the existing technical leadership team.
The testing phase of the project concluded on March 23, 2026, and the Company recognized $156,522 in the financial year 2026 in government grants.
Triera Biosciences continues to advance its multivalent aptamer platform in collaboration with McMaster University, including ongoing preclinical work in the Miller Lab evaluating C19HBA and related candidates as both prophylactic and therapeutic agents. Management looks forward to receiving Dr. Matthew Miller's final data set and reports on this program in the last fiscal quarter, which is expected to further characterize the aptamer platform's potential as an accelerated drug-development engine, with the goal of reducing time and cost from target identification to lead candidate selection.
Albany Graphite Project
Strategic Role in Materials Platform
The Albany Graphite Project represents a strategic asset within Zentek's evolving specialty materials platform. Albany's demonstrated capability to produce ultra-high-purity (5N - 99.9992%) graphite with sub-3ppm boron content via chloride-free processing positions the deposit as a potential secure, Western-hemisphere source of nuclear-grade and advanced battery-grade graphite. The Company is pursuing a phased capital program to de-risk the asset through scale purification validation and pre-feasibility studies, with the objective of positioning Albany for a monetization event (spin-out, strategic partnership, or sale) within 12-18 months while simultaneously integrating UHP graphite into Zentek's materials development pipeline for advanced coating and composites applications.
The Company owns 100% of the issued and outstanding shares of AGC which owns the Albany Graphite Project in Northern Ontario, Canada. The unusual nature of the formation of graphite in the Albany Graphite Project and its potential chemical and economic significance motivated additional exploration drilling from 2011 to 2013. The current claims require a total of $197,200 worth of assessment work per year to keep them in good standing and the Company has a total of approximately $7.1M in available assessment work credits in reserve. On October 18, 2021, the TSXV changed the Company's classification from a "mining issuer" to an "industrial, technology, or life sciences issuer." The change of classification was approved by the shareholders of the Company on September 27, 2021, in accordance with the rules and policies of the TSXV.
On May 19, 2023, the Company transferred to AGC the ownership of the Albany Graphite Project, including the mining claims and all related chattel, drill core, and applicable contracts, in consideration for the issuance by AGC to the Company of 59,999,900 common shares of AGC.
The Company is focused on building a best-in-class relationship with Constance Lake First Nation ("CLFN"), grounded in transparency, respect, and shared decision-making, and on developing sustainable, long-term programming that supports employment, skills development, and enduring economic participation for the Nation.
The Albany Graphite Project is located within the traditional territory of CLFN, with whom the Company has maintained a long-standing relationship under an Exploration Agreement, Memorandum of Understanding and subsequent Implementation Agreement that together outline shared governance, roles and responsibilities for project advancement. Building on this framework, management is working with CLFN leadership to design a broader Indigenous participation and procurement model in which CLFN-affiliated businesses can benefit from federal and provincial Indigenous procurement programs, while Zentek acts as the production, administration and fulfilment provider for certain goods and services. This approach is intended to create scalable, repeatable commercial opportunities tied to both Albany and Zentek's specialty materials portfolio, aligning economic participation for CLFN with the Company's long-term growth strategy.
Zentek deeply values its long-standing relationship with CLFN and recognizes them as a critical partner in the future of the Albany Graphite Project. Building on our existing Exploration and Implementation Agreements, we are working together in a constructive and positive spirit to co-develop the right governance, participation and benefit-sharing framework, with a shared focus on training, employment, business opportunities and long-term environmental stewardship for the community.
On July 26, 2023, the Company published an updated mineral resource estimate for the Albany Graphite Project, prepared by SLR Consulting (Canada) Ltd. ("SLR"). The updated mineral resource estimate is set out in the report entitled "Technical Report on the Albany Graphite Project, Ontario, Canada - Report for NI 43-101" dated July 31, 2023 (effective date of April 30, 2023), prepared by SLR, and filed on SEDAR+ on September 1, 2023.
More recently, AGC is investigating if Albany graphite has the required characteristics and performance to develop an ideal anode material for the electric vehicle market. Test work has initially focused on the purification of Albany flotation concentrate to produce a consistent high-purity (>99.95%) material. On July 17, 2024, the Company announced that AGC has achieved a five nines purity of 99.99915% for a graphite sample from the Albany Graphite Project. A sample of the homogenized bulk flotation concentrate produced by SGS Canada Inc. in the 2017 flotation pilot plant campaign was upgraded from approximately 85% to >99% using a simple hydrometallurgical process. A 100g sample of the >99% feed was subsequently thermally purified in a fixed-bed furnace at a temperature of 2,700C for five minutes in an argon atmosphere. A 10g sample of the purified material was then shipped to Eurofins EAG Laboratories for a full 72 element GDMS analysis. The concentrations of all elements above the detection limits (22 of the 72 total) were summed to yield the total concentration of the detectable impurity elements that remained in the purified sample at 8.48 ppm wt. or 0.00085% wt. The boron concentration in the sample was 0.42 ppm wt.
On January 8, 2025, the Company announced that AGC had achieved a preliminary five-nines purity of 99.9991% directly from a second larger Albany graphite deposit flotation concentrate sample utilizing a fluidized bed reactor ("FBR"). In follow up to the July 17, 2024, testing a second sample of the 2017 homogenized bulk flotation concentrate was upgraded from approximately 85% ("TGC") to over 96% TGC using a small pilot hydrometallurgical process with standard metallurgical equipment. A 100g sample of the >96% TGC feed was then thermally purified in a fixed-bed furnace under the same conditions as before (2,700°C for five minutes in an argon atmosphere). A 10g sample of the purified material was subsequently shipped to Eurofins EAG Laboratories for a full 72 element GDMS analysis. The concentrations of all elements above the detection limits (25 of the 72 total) were summed to yield the total concentration of the detectable impurity elements that remained in the purified sample at 11.61 ppm wt. or 0.00116 % wt. yielding a purity of 99.99884 % wt. The boron concentration in the sample was 1.8 ppm wt.
Subsequently, the Company contracted a highly reputable North American manufacturing company specializing in industrial graphite and carbon to explore the direct purification of Albany flotation concentrate (~85% TGC) using its proprietary continuous processing equipment. The Company supplied a 1kg sample of the homogenized bulk flotation concentrate which was characterized, aggregated into 3-D particles, and then run in a pilot-scale FBR. The feed material was thermally purified utilizing their proprietary process. A platinum crucible LOI analysis conducted at 950°C on a sample of the purified material indicated an ash content of 0.0009 % wt. corresponding to a purity of 99.9991 % wt. Notably, the manufacturing company reported that the Albany material was easily purified to an ultra-high purity level without the use of chlorine gas or any other halogen gases that are commonly used for graphite purification when 5N nuclear purity levels need to be achieved.
On February 14, 2025, the Company reported that as part of the characterization process, an elemental analysis (59 elements) was performed to identify the impurity elements. In its report, the manufacturing company noted that the feed material contained concentrations of rare earth elements ("REE") and other potential elements of value that could be recovered as part of the thermal purification process. Impurity elements, including the REEs, that were removed from the graphite during the purification process were collected and concentrated in a scrubber that handles all the FBR exhaust products. The Company intends to continue to investigate the REE potential of the Albany graphite deposit and send samples of unprocessed mineralization and tailings material for additional elemental analyses to verify their REE content and determine if there is any consistency within the two pipes, which REEs are enriched, and also provide an estimate of their average concentrations.
On September 2, 2025, the Company that AGC was awarded a grant of $500,000 from the Ontario Government's Critical Minerals Innovation Fund ("CMIF") for its Albany Graphite Purification and Anode Material Development Project. AGC will be collaborating with certain North American companies and Natural Resources Canada ("NRCan") in order to aim to produce approximately 5-6 tonnes of flotation concentrate (~85%) while concurrent testwork will involve purification with NRCan's newly developed electrothermal fluidized bed reactor ("FBR") (and suitability testing of previous samples of ultra-high purity Albany graphite for lithium-ion battery (anode and cathode additive) and nuclear applications. AGC will contribute $314,500 to the project, and NRCan will provide $200,000 of in-kind support.
On September 22, 2025, the Company announced that AGC in collaboration with American Energy Technologies Company ("AETC"), had successfully purified a second batch of Albany graphite deposit flotation concentrate to an ultra-high 5N purity level of 99.9992 wt.% C. Subsequent elemental analysis of this material yielded a calculated Equivalent Boron Concentration ("EBC") of 2.60 ppm which is below the 3 ppm specification required by the nuclear industry. The findings indicate that the electrothermal Fluidized Bed Reactor ("FBR") purification process developed by AETC has the potential to produce reproducible results, and that ultra-high purity Albany Graphite could be suitable for use in the nuclear energy industry, a field traditionally dominated by synthetic graphite.
On October 6, 2025, the Company announced that AGC, in collaboration with AETC, had successfully completed additional material characterization tests that confirm nuclear specifications continue to be met. The test confirmed that Albany graphite meets the specified particle size distribution and D50 (median particle diameter) required for nuclear applications. Achieving the proper particle size ensures the graphite can be processed efficiently and maintains consistent performance during manufacturing. This is critical for the reliability and integrity of nuclear-grade graphite components used in reactor environments. Albany graphite demonstrated high compact density and low elastic expansion after compression, which are essential for maintaining the structural integrity and long-term stability of matrix graphite used in nuclear reactors, especially those of pebble bed type. High compact density and minimal expansion ensure components can withstand the extreme conditions present in nuclear operations. The material also exhibited low electrical resistivity, indicating a high degree of graphitization, which enhances thermal and electrical conductivity, and is vital for efficient and safe reactor performance, especially in pebble-bed and other advanced nuclear reactors. This property supports the overall efficiency and safety of nuclear energy systems. Albany graphite also met or exceeded industry standards for frictional performance.
On December 17, 2025, the Company announced that AGC had achieved near theoretical anode performance in independent lithium-ion battery testing using ultrahigh purity Albany graphite. In four-industry standard coin cell tests, carbon coated, spheroidized Albany graphite delivered an average reversible capacity of approximately 367 mAh/g - just 1.3% below the theoretical maximum for graphite - with strong cycling stability and efficient processing. These results indicate that Albany graphite has the potential to serve as a high-performance, natural graphite anode material for lithium-ion batteries, supporting Zentek's strategy to build a value-added position in the North American battery supply chain.
On January 5, 2026, the Company announced that AGC had received final, positive results indicating that is ultra-high purity Albany graphite meets the threshold for applications in a range of high-return markets, including: nuclear energy; defense and national security infrastructure; advanced aerospace and hypersonics; and premium lithium-ion batteries. The latest independent testing of Albany graphite bricks represents the culmination of the current stage of AGC's nuclear suitability program and further validates Albany's broader ultra-high-purity performance.
During the financial year ended March 31, 2026, approximately $699,800 (2025 - $183,214) was spent by AGC on the Albany Graphite Project including professional fees and geologist wages. These costs have been capitalized in accordance with the Company's accounting policy on Exploration and Evaluation Assets. Testing costs incurred under the Critical Minerals Innovation Fund ("CMIF") have been expensed and included in research and development costs. During the financial year ended March 31, 2026, approximately $1,068,000 was spent by AGC on the CMIF program.
On January 29, 2026, the Company issued a shareholder letter outlining a strategic reset and confirming that Albany Graphite is the Company's lead value-creation asset and one of three core platforms, alongside ZenGUARD™ and Triera Biosciences. In that letter, management reiterated its intention to continue de-risking and advancing Albany through additional technical work, pilot-scale purification, and by improving the quality and completeness of the technical and economic information base so that the Company can evaluate strategic options such as partnerships, offtake agreements and other potential monetization events when market conditions are supportive.
On April 9, 2026, the Company announced that AGC has engaged Micon International Limited to complete a new Preliminary Economic Assessment ("PEA") National Instrument 43-101 technical report for the Albany Graphite
Project.
On April 16, 2026, the Company announced that AGC has engaged AppEco Inc., an independent economic research and advisory firm, to complete a comprehensive market research and economic analysis study for the Albany Graphite Project.
On April 21, 2026, the Company announced that AGC has executed an agreement with AETC of Wheeling, Illinois to manufacture certified graphite samples and deliver the process engineering inputs for the PEA on the Albany Graphite Project.
On April 28, 2026, the Company announced that AGC has engaged ERM Consultants Canada Ltd. to execute the 2026 environmental and social baseline scoping program at the Albany Graphite Project. Constance Lake First Nation ("CLFN") members will be integrated into every field campaign planned for the season. The scoping program builds on baseline work initiated in 2019 with the same consultant and advances Albany toward the standard that nuclear, defense, and allied-nation critical mineral buyers are increasingly setting for graphite origin and traceability.
Management believes Albany Graphite is strategically positioned as an ultra-high-purity asset serving multiple high-value markets, including nuclear energy, defense and advanced battery materials. Building on recent testing results and independent validation of its nuclear and anode performance, the Company is focused on systematically de-risking the project and advancing it through the standard criticial-minerals development sequence. The Company’s objective is to build Albany’s value at each stage of that sequence. Strategic partnerships, offtake agreements and other transactions are options the Company may pursue whee they enhance value, rather than a predetermined outcome.
As part of this work, the Company intends to refresh Albany’s technical and economic studies to reflet the higher-value end markets now accessible through advances in graphite purification, and to advance the project toward a future construction and investment decision while preserving strategic flexibility.
Albany Capital Program and Financing Strategy
The Company is pursuing a targeted capital raise
1. De-risking activities: Pilot-scale purification and anode material production, updated Preliminary Economic Assessment (PEA), advancement toward Pre-Feasibility Study (PFS).
2. Environmental and social baseline work: Continued partnership with Constance Lake First Nation, permitting advancement.
3. Operational support: As part of this work, the Company intends to refresh Albany’s technical and economic studies to reflect the higher-value end markets now accessible through advances in graphite purification, and to advance the project toward a future construction and investment decision while preserving strategic flexibility.
4. Integration activities: Development of applications for Albany graphite in specialty coatings and advanced materials.
This capital program is designed to advance Albany through its next development milestones, increasing the project’s value and preserving strategic optionality, while supporting the Company’s corporate operations. The Company received early validation of Albany’s strategic importance through a $500,000 grant from the Canadian government’s Critical Minearls Innovtion Fund (2025).
Overall Performance
During the financial year ended March 31, 2026, the Company advanced its strategic transformation from product-focused operations to an IP licensing and contract research organization (CRO) business model, while simultaneously de-risking the Albany Graphite Project. Operating activities reflected continued investment in R&D, regulatory advancement, and partnership development, offset by non-operating proceeds including the strategic sale of the Corporate Court property ($2.4M) and financing activities ($2.0M convertible debentures, $2.5M equity) that strengthened the Company's capital position. The Company recognized an inventory impairment of $1,936,000. The write-down primarily relates to aged graphene oxide inventory for which management no longer expects to realize amounts substantially in excess of nominal proceeds through sale. Accordingly, the affected inventory was written down to its estimated recoverable amount, which management determined to be nominal. These activities, combined with the $500,000 Critical Minerals Innovation Fund grant for Albany development, positioned the Company to commence its transformation strategy while maintaining operational flexibility. The private placement financing completed in May 2026 for gross proceeds of $18,000,000, will allow the Company to make significant progress in advancing the Albany Graphite Project.
Results of Operations
Net loss
The Company recorded a net loss of $3,526,268 with basic and diluted net loss per share of $0.04 for the three-month period ended March 31, 2026 (2025 - loss of $1,839,671 and $0.02). The loss for the financial year ended March 31, 2026, was $9,767,958 with basic and diluted loss per share of $0.09 (2025 - loss of $10,039,658 and $0.10).
The Company's net loss reflects the transitional nature of operations as revenue generation shifts from direct product sales (historically low-margin, low-volume) toward IP licensing and CRO services (high-margin, scalable). During the financial year ended March 31, 2026, the Company generated its first IP development fee revenue $56,050), representing initial validation of the CRO business model. Operating expenses include a change in the allowance for impairment of inventory for the three-month period ended March 31, 2026 of approximately $1,698,000 ($1,596,000 for the financial year ended March 31, 2026) and ongoing investment in Albany de-risking activities supported by government grants ($500,000 recognized in the financial year ended Mar 31 2026) and R&D infrastructure required to support contracted development partnerships.
Net Sales
Consolidated net sales for the three-month period ended March 31, 2026, was $36,767 (2025 - $813,596). Sales generated from operations for the financial year ended March 31, 2026, was $166,048 (2025 - $872,495). Net sales recognized in the three-month period ended includes the sale of products of $23,217 and IP development fees earned of $13,550. The same period of the prior year includes the sale of products of $21,096 and service revenue of $792,500. Net sales recognized in the financial year ended March 31, 2026, includes the sale of products of $109,998 and IP development fees earned of $56,050. The same period of the prior year includes the sale of products of$79,995 and service revenue of $792,500.
| Financial year ended March 31 |
Intellectual Property Development |
Biotech | Albany Project |
Total | |
| Net Sales | 2026 | $166,048 | $Nil | $Nil | $166,048 |
| 2025 | $79,995 | $792,500 | $Nil | $872,495 |
Cost of Sales
Consolidated cost of sales for the three-month period ended March 31, 2026, was $1,714,957(2025 - $256,226). Cost of sales includes the allowance for impairment of inventory in the amount of ($1,698,000) for the three-month period ended March 31, 2026 (2025 - $(166,890)). Consolidated cost of sales for the financial year ended March 31, 2026, was $1,838,971 (2025 - $644,610). Cost of sales includes the allowance for impairment of inventory in the amount of ($1,596,000) for the financial year ended March 31, 2026 (2025 - $136,447).
| Financial year ended March 31 |
Intellectual Property Development |
Biotech | Albany Project |
Total | |
| Cost of sales | 2026 | $1,838,971 | $Nil | $Nil | $1,838,971 |
| 2025 | $578,419 | $66,191 | $Nil | $644,610 |
Expenses
Accretion expense was $32,442 for the three-month period ended March 31, 2026 (2025 - $Nil) and $117,381 for the financial year ended March 31, 2026 (2025 - $Nil). The carrying value of the debt element of the convertible debentures is accreted to the original face value of the convertible debentures, over their expected term to maturity and is new in April 2025.
Depreciation and amortization expense was $126,856 for the three-month period ended March 31, 2026 (2025 - $139,554) and $526,405 for the financial year ended March 31, 2026 (2025 - $600,322). Amortization is taken on the capitalized cost of the Company's building, computers, equipment, leasehold improvements, and right-of-use assets.
Bad debts were $32,347 for the three-month period and financial year ended March 31, 2026, and represent amounts owing on the Altek GBFR agreement which remain outstanding and unpaid for work performed and billed.
Consulting fees were $23,840 for the three-month period ended March 31, 2026 (2025 - $5,479) and $44,720 for the financial year ended March 31, 2026 (2025 - $127,480). The most significant component of the consulting costs incurred was for consultants working on regulatory and government matters. Less fees were paid to outside consultants as this work was moved internally.
Directors' fees expense was $59,792 for the three-month period ended March 31, 2026 (2025 - $63,125) and $245,416 for the financial year ended March 31, 2026 (2025 - $252,500). This expense relates to compensation paid to the Company's independent Directors.
Insurance expense was $73,997 for the three-month period ended March 31, 2026 (2025 - $76,884) and $307,994 for the financial year ended March 31, 2026 (2025- $354,186). These expenses relate to the costs required to adequately insure the Company's assets, operations and directors and officers. Overall insurance expense has decreased in the three and financial year ended March 31, 2026, compared to the same periods of the prior year even though insurance coverage and programs have remained the same year-over-year as a result of reduced premiums.
Investor relations and promotion expenses were -$33,924 for the three-month period ended March 31, 2026 (2025 - $16,017) and $84,861 for the financial year ended March 31, 2026 (2025 - $94,411). These expenses consist primarily of the costs of consultants, marketing trips and other costs such as attending industry conferences. During the quarter ended March 31, 2026, the Company reclassified $67,848 of expenses to listing and filing fees to properly account for expenses previously reported to investor relations and promotion expenses during the nine-month period ended December 31, 2025.
Listing and filing fees were $91,178 for the three-month period ended March 31, 2026 (2025 - $44,580) and $259,487 for the financial year ended March 31, 2026 (2025 - $222,945). These expenses consist primarily of the costs of maintaining registered status on various stock listing exchanges. During the quarter ended March 31, 2026, the Company reclassified $67,848 of expenses from Investor relations and promotion expenses to Listing and filing fees to properly account for expenses previously reported to investor relations and promotion expenses during the nine-month period ended December 31, 2025. Overall listing and filing fees for the financial year ended March 31, 2026 are up as compared to the same period of the prior year as a result of the additional mailing costs of a supplement to the Company's Notice of Meeting and Management's Information Circular done in September 2025.
Office expenses were $28,372 for the three-month period ended March 31, 2026 (2025 - $25,264) and $97,738 for the financial year ended March 31, 2026 (2025 - $106,698). Expenses have decreased as a result of the reduced head count, year-over-year.
Professional fees were $1,942 for the three-month period ended March 31, 2026 (2025 - $927,795) and $1,095,872 for the financial year ending March 31, 2026 (2025 - $2,288,633). These fees consist primarily of the amounts charged for services provided by the Company's lawyers, auditors, and accountants. The three-month period ended March 31, 2025 included additional legal fees of approximately $300,000 for the trial that was held in the Ontario Superior court of Justice in October 2024, additional professional fees were incurred related to the convertible debenture for valuation and audit services and additional legal and audit fees related to the at-the market offering. The Company is involved in legal proceedings relating to claims involving a former director and officer of the Company. See further discussions under "Legal proceedings and regulatory actions During the three-month period ended March 31, 2026, $175,000 of the legal fees recovered as a result of the Company's employment practice insurance policy related to this claim, was recognized as a reduction in professional fees.
Rent expense was $95,958 for the three-month period ended March 31, 2026 (2025 - $77,100) and $375,218 for the financial year ending March 31, 2026 (2025 - $311,556). Commencing May 15, 2025, the Company entered into a short-term leaseback with the purchaser of the Corporate Court location for $5,610 per month which ended on Jan 31, 2026. The Company entered into a new lease agreement with the University of Guelph for $4,137 per month effective December 1, 2025, for laboratory space
Research and development expenses were $500,067 for the three-month period ended March 31, 2026 (2025 - $203,304) and $1,653,393 for the financial year ended March 31, 2026 (2025 - $465,653). These expenses related to continued research and development activities across all 3 segments of business including the further development of graphene use and development, as well as aptamer research and Albany Project development. Testing costs incurred under the Critical Minerals Innovation Fund for the development of the Albany project are included in this expense. For the three-month period ended March 31, 2026, the related spend was $114,000 (2024 - $61,317) and for the financial year ended March 31, 2026, was $917,483 (2025 - $84,827). During the quarter ended March 31, 2026, approximately $167,000 (2025 - $8,187) and $449,896 for the financial year ended March 31, 2026 (2025 - $324,181) was spent on the continued development of the BioTech segment with continued aptamer development. During the three-month period ended March 31, 2026, $219,116 was spent on the IP Development (2025 - $80,006) and the financial year ended March 31, 2026, $350,809 was spent on continued research on graphene related activities (2025 - $141,472). A request for a refund of a deposit of $225,000 made in December 2021 for a research project that was cancelled in December 2022, was recorded as a reduction in research and development expenses in Q1 2025.
Salaries and benefits expense was $585,855 for the three-month period ended March 31, 2026 (2025 - $674,095) and $2,811,087 or financial year ended March 31, 2026 (2025 - $3,023,656). These expenses relate to staffing costs required to operate the business. At March 31, 2026, there were 10 employees on payroll versus 18 during the same period of the prior year. Salaries and benefits expense for 2026, included severance and retention payments of approximately $506,000.
Share-based compensation costs were $534,687 for the three-month period ended March 31,2026 (2025 - $279,680) and $1,256,134 for the financial year ended March 31, 2026 (2025 - $1,529,934). Share-based compensation was based on the fair value of the options and restricted stock units as described in Note 12(c) and 12(d) of the audited consolidated financial statements. Options were calculated using the Black-Scholes option pricing model and for restricted stock units, fair value was the grant date share value. Share-based compensation is recognized over the vesting period of the underlying options and restricted stock units. Share-based compensation costs increased in the three-month period ended and for the financial year ended March 31, 2026 as a result of the Company issuing for the first time restricted stock units accounting for $400,774 of the share-based compensation expense for the quarter ended March 31, 2026 (2025 - $Nil) and $469,171 for the financial year ended March 31, 2026 (2025 - $Nil).
Supplies and materials expense was $6,092 for the three-month period ended March 31, 2026 (2025 - $11,278) and $19,125 for the financial year ended March 31, 2026 (2025 - $35,400). These expenses mainly related to supplies and materials purchased to continue graphene development.
Travel expense was $3,954 for the three-month period ended March 31, 2026 (2025 - $43,811) and $112,073 for the financial year ended March 31, 2026 (2025 - $165,741). This decrease reflects overall less travel by staff compared to the same period of the prior year.
Other expenses excluding office and travel expenses were $52,183 for the three-month period ended March 31, 2026 (2025 - $70,883) and $266,457 for the financial year ended March 31, 2026 (2025 - $254,183). The following table details the material components of the Company's other expenses for the financial year ended March 31, 2026, and 2025.
| Financial Year Ended March 31, 2026 |
Financial Year Ended March 31, 2025 |
|
| Automotive | 10,361 | 27,149 |
| Bank fees | 32,197 | 4,781 |
| Dues and subscriptions | 24,050 | 37,215 |
| Freight and delivery | 32,014 | 11,038 |
| Meals and entertainment | 21,717 | 33,293 |
| Other expenses | 24,103 | 22,081 |
| Financial Year Ended March 31, 2026 |
Financial Year Ended March 31, 2025 |
|
| Property taxes | 26,393 | 34,030 |
| Repairs and maintenance | 60,460 | 48,158 |
| Telephone | 17,208 | 20,325 |
| Utilities | 17,954 | 16,113 |
| Total | 266,457 | 254,183 |
The decrease in automotive in the financial year ended March 31, 2026, is a result of the completion of a company leased vehicle for the former CEO.
The increase in bank fees in the financial year ended March 31, 2026, are fees charged to utilize the ATM which commenced in September 2025.
The increase in freight and delivery includes freight costs to ship the core samples from storage in Thunder Bay to SGS Canada Inc. in Lakefield, Ontario for $21,640 as part of the CMIF program.
The decrease in meals and entertainment in the financial year ended March 31, 2026, is a result of less travel by staff compared to the same period of the prior year.
The increase in repairs and maintenance in the financial year ended March 31, 2026, are related to moving of the lab facilities in January 2026.
Interest income for the three-month period ended March 31,2026, was $7,073 (2025 - $3,557) and $40,308 for the financial year ended March 31, 2026 (2025 - $101,613). The Company continued to earn interest on cashable guaranteed investment certificates. However, since less funds were held in cashable guaranteed investment certificates; less interest income was generated during the three-month and financial year ended March 31, 2026.
Interest expense for the three-month period ended March 31, 2026, was $32,914 (2025 - $181,419) and $139,657 for the financial year ended March 31, 2026 (2025 - $91,323). The three-month period and financial year ended March 31, 2026, included interest incurred on the convertible debentures which were new in April 2025.
Loss on disposal of property and equipment for the three-month period ended March 31, 2026, was $13,727 (2025 - $14,544) and a gain of $392,124 for financial year ended March 31, 2026 (2025 - loss of $14,544). Approximately $475,000 represents the gain on sale of the Corporate Court building, which was completed on May 15, 2025, offset by losses on disposal of equipment with the move from the Corporate Court location
In January 2025, the Canada Revenue Agency ("CRA") completed its CRA audit of the Company's 2018 and 2019 renunciation of Canadian exploration expenses ("CEE") in favour of subscribers of flow-through share private placements that closed on December 21, 2018, and December 20, 2019 (the "Flow-Through Financings") for aggregate proceeds of $4,210,000.
In February 2025, the Company received a Notice of Reassessment ("NOR") from CRA in respect of its 2018 Flow-Through Financing. This NOR assessed a reduction in amounts previously renounced and resulted in additional Part XII.6 tax of $59,693.
In November 2025, the Company received a Notice of Reassessment ("NOR") from CRA in respect of its 2019 Flow-through Financing. This NOR assessed a reduction in amounts previously renounced and resulted in additional Part XII.6 tax of $22,482.
The Company has estimated its potential Part XII.6 liability as a result of the CRA audit to be $93,000. The reduction in previously provided renunciations may also result in an additional obligation for the Company to indemnify certain flow-through shareholders due to reductions in previously flowed through CEE deductions. Management has estimated this indemnification obligation to be $427,000.
At September 30, 2024, a provision of $520,000 was originally recognized for this liability and included in accounts payable and accrued liabilities. $93,000 of this liability consisted of management's estimate of Part XII.6 tax owing and $427,000 consisted of management's estimate of the Company' indemnification obligation. During the financial year ended March 31, 2026, payments have been made to CRA in respect of the Part XII.6 liability for $82,175 and to subscribers for the Company's indemnification obligations of $22,482.
The Company recognized $393,929 in government grants during the three-month period ended March 31, 2026 (2025-$Nil) and $865,005 during the financial year ended March 31, 2026 (2025 - $Nil). The Company has entered into an agreement with Critical Minerals Innovation Fund under which the Company received assistance and cost recoveries to a maximum of $500,000 for work on Albany Graphite purification and anode material development project. The Company entered into an agreement with Natural Resources Canada's Energy Innovation Program ("NRCan") which supports Canadian clean energy technologies. The Company's researchers along with the University of Waterloo's Si-C lithium-ion battery anode material research team will work together with a goal of producing full pouch cells which demonstrate the material's superior storage and performance characteristics. The project is for the period April 1, 2025 to March 31, 2029 with a total budget cost of approximately $2.1M, with approximately $1.55M being funded by NRCan. The Company received $208,483 from NRCan as government grant in the three-month and financial year ended March 31, 2026.
Cash Flows
During the financial year ended March 31, 2026, cash increased overall by $1,181,257 (2025 - cash decreased overall by $3,399,939). Operating activities resulted in a decrease in cash of $5,069,298 (2025 -$6,282,441) due to continued spending on consulting and professional fees, research and development, salaries and benefits and other expenses. Investing activities resulted in an increase in cash of $1,668,099 (2025 - $358,651) with the completion of the sale of Corporate Court for proceeds on sale of $2,369,961. Financing activities resulted in an increase in cash of $4,582,456 (2025 - $2,523,851) with gross proceeds from the convertible debentures of $1,976,003, a private equity raise of $2,479,226, and proceeds from stock options exercised of $40,795 and the at-the-market offering of $702,838 offset by repayments of long-term debt and the lease liability. The same period of the prior year saw a private equity raise of $3,069,950 offset by long-term debt repayments and the lease liability.
Mineral Exploration and Development
Albany Graphite Project
The claims comprising the Albany Graphite Project are presently held in good standing by AGC and there are sufficient assessment credits available to keep all the 4F claims in good standing for approximately 30 years. There are no environmental liability issues related to any previous exploration work on the claims. Neither the Company nor AGC have received from any government authority any communication or notice concerning any actual or alleged breach of any environmental laws, regulations, policies or permits. The claims are located in the traditional territory of the CLFN. In July 2011, the Company and CLFN signed an exploration agreement (assigned to AGC as part of the property transfer of the Albany Graphite Project) for a mutually beneficial and co-operative relationship regarding exploration and pre-feasibility activities on the Albany Graphite Project. Under this agreement, the Company committed to establishing a joint implementation committee and conveying preferential opportunities for employment and contracting as well as contributing to a social fund for the benefit of CLFN children, youth and elders. In 2018, the parties signed a new Memorandum of Understanding under which a project partnership structure will be created in support of the development of the Albany Graphite Project. Subsequent to 2015, most of the Albany Graphite Project work has been focused on metallurgical process development, environmental baseline studies, market studies, and research and development to determine the most attractive market opportunities for the Albany Graphite Project.
As described above under "Company Overview and Discussion of Operations - Albany Graphite Project", the Company transferred the Albany Graphite Project to AGC with the purpose of moving the Albany Graphite Project forward with a separate corporate entity and management team dedicated exclusively to its development. The Company is not dependent on materials extracted from the Albany Graphite Project for its current business plans.
Administration and Capitalization
On April 9, 2025, the Company announced that it had closed a non-brokered private placement (the "Offering") of 2,000 debenture units (the "Debenture Units") through the issuance of 2,000 Debenture Units for gross proceeds of $2,000,000. Each Debenture Unit consists of (i) $1,000 principal amount of 5% secured convertible debentures of the Company (each a "Convertible Debenture"); and (ii) 454 warrants (the "Warrants") to purchase common shares in the capital of the Company (the "Common Shares"). Each Convertible Debenture will mature on April 9, 2028, (the "Maturity Date") and bears interest at a rate of 5% per annum payable as a balloon payment on the Maturity Date. Each Convertible Debenture is convertible at the option of the holder, in whole or in part, into Common Shares, at any time prior to the Maturity Date at a conversion of the Convertible Debentures into Common Shares at the Conversion Price at any time after the second anniversary of closing and prior to the Maturity Date in the event that the volume weighted average trading price of the Common Shares on the TSX Venture Exchange (the "TSXV") for the preceding 30 business days exceeds $4.40.
The Convertible Debentures are secured by the Company's interest in the 521 mining claims held by the Company's subsidiary Albany Graphite Corp., with a first ranking above all other creditors or loans by the Company.
908,000 Warrants were issued pursuant to the Offering, each entitling the holder to purchase one Common Share at the Conversion Price until the Maturity Date. The Warrants will only vest and be exercisable: (i) in the event, and from the date, that the Company completes a sale or otherwise transfers all of its rights, title and interests in the Secured Assets to a third party; and (ii) in such number equal to the result of dividing the outstanding principal amount of Convertible Debentures held by the holder at the time of exercise by the Conversion Price.
Net proceeds from the Offering will be used for working capital and general corporate purposes.
On April 17, 2025, the Company announced that it had entered into an agreement of purchase and sale dated April 15, 2025, for the sale of its property located at 24 Corporate Court in Guelph, ON (the "Property") which houses the Company's corporate office and laboratory space. On May 15, 2025, the Company announced the completed sale for $2,500,000 and will lease back the property from the purchaser until January 31, 2026.
On April 30, 2025, 250,000 stock options were exercised using a "cashless" exercise method whereby 55,555 fewer shares were issued than options exercised as compensation for the $100,000 in cash that traditionally would have been received by the Company upon exercise.
On May 12, 2025, 100,000 stock options were exercised at $0.40 per option resulting in proceeds of $40,000 to the Company.
On May 28, 2025, 33,334 stock options were exercised using a "cashless" exercise method whereby 10,446 fewer shares were issued than options exercised as compensation for the $22,667 in cash that traditionally would have been received by the Company upon exercise.
On June 9, 2025, 8,750 stock options were exercised using a "cashless" exercise method whereby 6,552 fewer shares were issued than options exercised as compensation for the $13,300 in cash that traditionally would have been received by the Company upon exercise.
On July 11, 2025, the Company announced that the consulting contract for its Chief Executive Officer Greg Fenton would not be extended following its expiry on March 31, 2026, and that the Company had begun a search for a successor. Effective September 3, 2025, Mr. Fenton resigned as a director and officer of the Company.
On August 26, 2025, the Company received a notification from the Nasdaq that the Company is not in compliance with the Nasdaq Listing Rule 5550(a)(2), as the minimum bid price of the Company's common shares has been below US $1.00 per share for 31 consecutive business days. In accordance with the Nasdaq Listing Rule 580(c)(3)(A), the Company has a period of 180 calendar days, or until February 23, 2026, in which to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Company's shares must meet or exceed US $1.00 for at least ten consecutive business days during this 180-calendar day period. On February 25, 2026, the Company announced that it had been granted a 180 calendar day extension from the NASDAQ to regain compliance with the Nasdaq's minimum US$1.00 bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) (the "Rule") for continued listing on NASDAQ (the "Minimum Bid Price Requirement"), following the expiration of the initial 180 calendar day period to regain compliance on February 23, 2026. The Company now has until August 24, 2026, to meet the Minimum Bid Price Requirement set forth in Nasdaq Listing Rule 5550(a)(2). To regain compliance with the Rule, the Company must maintain a closing bid price of at least US$1.00 per share for a minimum of ten (10) consecutive business days on or prior to August 24, 2026. The Company's management intends to actively monitor the bid price for its shares and will consider all available options, including a consolidation, to regain compliance with the NASDAQ Minimum Bid Price Requirement, or delist from the NASDAQ.
On September 3, 2025, the Company announced that Ilse Treurnicht had resigned from the Company's board of directors, and that Lisa Sim had determined not to stand for re-election at the Company's upcoming shareholder meeting.
On September 25, 2025, 250,000 stock options were exercised using a "cashless" exercise method whereby 158,898 fewer shares were issued than options exercised as compensation for the $187,500 in cash that traditionally would have been received by the Company upon exercise.
On October 1, 2025, 1,104,000 stock options were issued to a number of directors, officers and employees of the Company. The stock options have an exercise price of $1.06 per common share. The options granted to the directors and officers will vest one third on the date of grant, one third on the first anniversary of the grant and one third on the second anniversary of the grant. For employees, the options will vest one quarter on the date of grant and one quarter on each anniversary thereafter. The Company also issued 654,000 restricted share units which will vest on October 1, 2026.
On October 22, 2025, the Company completed a non-brokered private placement of units (the "Units") through the issuance of 2,338,893 Units at a price of $1.06 per Unit (the "Offering") for gross proceeds of $2,479,227. Each Unit consisted of (i) one common share in the capital of the Company (each, a "Common Share"); (ii) one-half of one Common Share purchase warrant (each, a "Series A Warrant"); and (iii) one-half of one Common Share purchase warrant (each, a "Series B Warrant"). Each whole Series A Warrant entitles the holder thereof to purchase one Common Share at a price of $1.50 until October 22, 2027 (the "Series A Expiry Date"). If at any time between the date that is four months and one day from the closing date of the Offering and the Series A Expiry Date, the closing price of the Common Shares on the TSX Venture Exchange ("TSXV") is at least $2.00 for a period of 10 consecutive trading days, the Series A Expiry Date can be accelerated to such day that is no less than thirty days from the date notice is given by the Company of such accelerated expiry. Each whole Series B Warrant entitles the holder thereof to purchase one Common Share at a price of $2.00 until October 22, 2028 (the "Series B Expiry Date"). If at any time between the date that is six months from the closing date of the Offering and the Series B Expiry Date, the closing price of the Common Shares on the TSXV is at least $3.00 for a period of 10 consecutive trading days, the Series B Expiry Date can be accelerated to such day that is no less than thirty days from the date notice is given by the Company of such accelerated expiry. In connection with the closing of the Offering, unit issue costs of $84,971 consisted of cash finder fees, finder warrants, entitling the holders thereof to purchase an aggregate of 33,424 Units at a price of $1.06 per Unit until October 22, 2027, and legal fees.
On January 12, 2026, 750 stock options were exercised at $1.06 per option resulting in proceeds of $795 to the Company.
On April 1, 2026, the Company announced that it engaged ICP Securities Inc. ("ICP") to provide automated market-making services, including the use of its proprietary ICP Premium algorithm, in compliance with the policies and guidelines of the TSX Venture Exchange and other applicable legislation.
During the financial year ended March 31, 2026, the Company issued 650,798(2025 - Nil) common shares for gross proceeds of $702,837 (2025 - Nil) through an at-the-market offering.
Subsequent Events
On May 27, 2026, the Company announced the closing of a private placement for gross proceeds of $18,000,000. Pursuant to the offering, the Company sold 18,000,000 units at a price of $1.00 per unit, with Red Cloud Securities Inc. acting as a sole agent and bookrunner. Each Unit consists of one common share and one common share purchase warrant exercisable at a price of $1.50 until May 27, 2029. The Company announced that it intends to use the net proceeds of the offering of the development and derisking of the Albany Graphite Project, including the completion of the new preliminary economic assessment, advancement of subsequent preliminary feasibility study work, and business development activities targeting small modular reactor developers, nation defence end-users, and other high-intensity end-user markets for which Albany ultra-high-purity graphite is suited; the continued commercialization of the Company's ZenGUARDTM platform; payment obligations; and general working capital and corporate purposes. As consideration for its services, Red Cloud received a cash fee of $1,197,360 and was issued 1,197,360 non-transferrable common share purchase warrants, each exercisable into one common share at the offering price until May 27, 2029.
Subsequent to the year ended March 31, 2026, the Company issued 800,033 common shares for gross proceeds of $571,841 through an at-the-market offering.
Selected Annual Information
The following table sets forth selected financial information with respect to the Company as at and for the end of the three most recently completed financial years of the Company. The selected financial information has been derived from the audited consolidated financial statements of the Company for the financial years indicated. The following should be read in conjunction with the said consolidated financial statements related notes thereto.
| Year ended March 31, 2026 |
Year ended March 31, 2025 |
Year ended March 31, 2024 |
|
| Net Sales | $166,048 | $872,495 | $29,816 |
| Total Other Income (expense) | $1,210,673 | $(434,245) | $697,439 |
| Net Loss | ($9,767,958) | $(10,039,658) | $(11,703,990) |
| # Shares Outstanding | 107,792,002 | 104,390,928 | 100,819,577 |
| Net Loss per Share (Basic) | $(0.09) | $(0.10) | $(0.12) |
| Net Loss per Share (Diluted) | $(0.09) | $(0.10) | $(0.12) |
| Total Assets | $15,086,932 | $18,396,185 | $22,585,056 |
| Total non-current liabilities | $1,751,314 | $161,737 | $592,841 |
| Total Equity | $9,802,144 | $14,749,447 | $20,173,211 |
Summary of Quarterly Results
The following table sets out selected quarterly information for the eight most recently completed quarters, for which consolidated financial statements are prepared.
| Mar. 31, 2026 |
Dec. 31, 2025 ($) |
Sept. 30, 2025 ($) |
Jun. 30, 2025 ($) |
Mar. 31, 2025 ($) |
Dec. 31, 2024 ($) |
Sept. 30, 2024 ($) | Jun. 30, 2024 ($) | |
| Net Sales | 36,767 | 65,280 | 6,204 | 57,797 | 813,596 |
37,718 |
15,692 |
5,489 |
| Other income (expense) | 367,560 | 325,706 | 51,909 | 465,498 | 261,808 |
695 |
(711,143) | 14,395 |
| Net Loss | 3,526,268 | 2,488,152 | 2,391,190 | 1,362,348 | 1,839,671 | 2,601,769 | 3,045,029 | 2,553,189 |
| Net Loss per Share (basic and diluted) |
0.04 | 0.02 | 0.02 | 0.01 | 0.02 | 0.02 | 0.03 | 0.03 |
Discussion of Interim Period Results
The Company continued to generate limited revenue during the eight most recently completed quarters with the quarter ended March 31, 2025, being an exception, recognizing $792,500 in sales in its BioTech segment.
The quarterly net loss figure for the quarter ended March 31, 2026, included the change in the allowance for impairment of inventory in the amount of $1,698,000 representing an impairment for excess GO held in long term storage since 2022. The Company is currently discussing the sale of its excess GO at liquidation pricing with potential customers. If unable to sell, the Company's intention is to dispose of the excess inventory in fiscal 2027.
The quarterly net loss figure for the quarter ended December 31, 2025, was a result of the Company's 50% share of costs associated with the Albany Graphite project testing related to the CMIF program of approximately $665,500 and approximately $461,300 of additional share-based compensation expense as a result of 1,579,000 new options and 1,079,000 restricted stock units issued during the quarter. Government grants of $384,838 were recognized in the quarter representing CMIF funding of $332,768 and ISC Challenge of $52,071.
The quarterly net loss figure for the quarter ended September 30, 2025, was more as a direct result of additional salaries expense of approximately $350,000 related to retention and retirement. The Company's 50% share of costs associated with the Albany Graphite Project testing related to the CMIF program of approximately $90,000; additional professional fees of approximately $50,000 for the CEO search and additional mailing fees incurred related to the supplement to the management information circular of approximately $50,000.
The quarterly net loss figure for the quarter ended June 30, 2025, was less as a direct result of the completed sale of Corporate Court. resulting in a gain on sale of property of $488,829.
Government grants are recognized when there is reasonable assurance that the Company will comply with the terms and conditions associated with the grants and the grants will be received. No grant revenue was recognized during the four quarters of fiscal 2025, increasing the loss for these quarters.
The quarter ended September 30, 2024, included some one-time costs for the contingent liability as a result of the Canada Revenue Agency flow-through share audit of $720,000.
Liquidity and Capital Resources
As at March 31, 2026, the Company had working capital deficit of $1,256,222 (March 31, 2025, working capital surplus - $882,892) and cash and cash equivalents of $1,302,738 (March 31, 2025 - $121,481). As at March 31, 2026, the Company has not yet achieved profitable operations and had an accumulated deficit of $91,223,358 as at March 31, 2026.
Going Concern and Capital Strategy: These conditions reflect the Company's ongoing transition from product-sales operations to an IP licensing and CRO business model. Management is executing a multi-faceted capital strategy to support operations and value creation:
1. Albany Capital Program: Pursuing a capital raise 2026 to fund Albany de-risking activities while supporting corporate operations during business model transformation. Subsequent to year-end, the Company announced on May 27, 2026, the closing of a private placement for gross proceeds of $18,000,000 (see Subsequent Events).
2. Government Funding: Successfully secured $500,000 Critical Minerals Innovation Fund grant for Albany development, fully received and recognized in the financial year ended March 31, 2026 ($500,000 recognized in the financial year ended March 31, 2026), with potential for additional government support programs.
3. CRO Revenue Ramp: Generated first IP development fee revenue of $42,500 in Q3 FY2026, with multiple additional partnership discussions underway targeting higher-value, multi-quarter development engagements.
4. Cost Optimization: Reduced quarterly operating cash burn from $1.67M (Q4 FY2025) to $0.498M (Q4 FY2026), with further optimization planned as product-sales operations wind down and CRO model scales. Management believes the planned Albany capital raise, combined with CRO revenue growth and continued cost discipline, will provide sufficient liquidity to execute the Company's transformation strategy. While the proceeds from the May 2026 private placement have significantly strengthened the Company's liquidity position, the Company remains dependent on the successful commercialization of its products and technologies, achieving profitable operations, and/or obtaining additional financing in the future.
Accordingly, the audited consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of operations.
Transactions with Related Parties
The remuneration of key management personnel during the financial year ended March 31 2026 and 2025 were as follows:
a) Directors' fees - $245,416 (2025 - $252,500)
b) Salaries and benefits - $1,121,666 (2025 - $1,010,201)
c) Share-based compensation - $1,107,256 (2025 - $1,191,219)
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any directors (executive and non-executive) of the Company.
On September 3, 2025, the Company's CEO Greg Fenton, resigned his position as CEO and as a member of the Board of Directors effective immediately, to become the full-time CEO of Altek Advanced Materials Inc. ("Altek"), a Nevada incorporated private company focused on the commercialization of advanced material technologies in the United States of which Mr. Fenton owns more than a 50% beneficial equity interest. The Company has entered into a non-arm's length, binding letter of intent with Altek to negotiate one or more non-exclusive licensing agreements relating to the Company's various technologies. On October 6, 2025, the Company's former Chief Science Officer, Colin van der Kuur joined the board of Altek as a director.
Current and Future Changes in Accounting Policy
Statement of Compliance
The audited consolidated financial statements for the year ended March 31, 2026, including comparatives for the financial year ended March 31, 2025, have been prepared, using accounting policies in compliance with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IASB").
New Standards, Interpretations and Amendments not yet Effective
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the Company has decided not to adopt early.
The following amendments are effective for the year beginning April 1, 2026:
Classification and Measurement of Financial Instruments (Amendments to IFRS 7 Financial Instruments: Disclosures and IFRS 9 Financial Instruments)
The following amendments are effective for the year beginning April 1, 2027:
IFRS 18 Presentation and Disclosure in Financial Statements (New)
The Company is currently assessing the impact of these new accounting standards and amendments.
Critical Judgments and estimation uncertainties
The areas which require management to make significant judgments, estimates and assumptions in determining carrying values include, but are not limited to:
Inventory
Judgement is required in determining whether net realizable value should be evaluated on a product-by-product basis or if products cannot be evaluated separately from other products in inventory and should be grouped with similar products.
Expected credit loss allowance and provision
The Company determines an expected credit loss allowance for trade receivables based on the estimated expected lifetime credit loss, considering the actual credit loss in prior years and forward-looking estimates of expected collections. This estimate varies depending on the nature of the trade receivables, the majority of which are associated with the health sciences business; however, also includes receivables from government agencies and related parties. The loss allowance is reviewed on a quarterly basis and any change in estimate is accounted for prospectively.
Impairment (impairment reversal) of exploration and evaluation assets
While assessing whether any indications of impairment or impairment reversal exist for exploration and evaluation assets, consideration is given to both external and internal sources of information. Information the Company considers includes changes in the market, economic and legal environment in which the Company operates that are not within its control that could affect the recoverable amount of exploration and evaluation assets. Internal sources of information include the manner in which exploration and evaluation assets are being used or are expected to be used and indications of expected economic performance of the assets.
Impairment (impairment reversal) of property and equipment
Judgements are required to assess when internal or external indicators of impairment or impairment reversal exist, and impairment testing is required. Management considers internal and external sources of information including forecasted sales, cashflows and expected production volumes. Judgement is required to assess these internal and external factors when determining if the carrying amount of an asset is impaired, or in the case of a previously impaired asset, whether the carrying amount of the asset has been restored.
Share-based payments
Management determines costs for share-based payments using market-based valuation techniques. The fair value of the market-based and performance-based share awards are determined at the date of grant using generally accepted valuation techniques. Assumptions are made and judgment used in applying valuation techniques. These assumptions and judgments include estimating the future volatility of the stock price, expected dividend yield, future employee turnover rates and future employee stock option exercise behaviours and corporate performance. Such judgments and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates.
Contingencies
By their nature, contingencies will only be resolved when one or more future events transpire. The assessment of contingencies inherently involves estimating the outcomes of future events. The Company has disclosed its disputes and was required to exercise judgement in assessing the recorded amounts.
Financial Instruments and Other Instruments
The Company's financial instruments consist of cash and cash equivalents, accounts and other receivables, accounts payable and accrued liabilities, lease liability and long-term debt. Unless otherwise noted, the Company does not expect to be exposed to significant interest, currency or credit risks arising from these financial instruments. The Company estimates that the fair value of these financial instruments approximates carrying values.
As at March 31, 2026 the Company does have financial instruments recorded at fair value that require classification within the fair value hierarchy. On April 9, 2025, the Company completed a non-brokered private placement of debenture units through the issuance of 2,000 Debenture Units for gross proceeds of $2,000,000. Note 11 to the audited consolidated financial statements present the inputs used to fair value the debenture units and their associated components.
Fair value estimates are made at the balance sheet date based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties in significant matters of judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates.
Disclosure of Outstanding Share Data
The Company is authorized to issue an unlimited number of shares, of which 107,792,002 (March 31, 2025 - 104,390,928 shares were issued and outstanding as fully paid and non-assessable as at March 31, 2026.
Refer to Note 12(c) to the audited consolidated financial statements for details regarding stock options issued and exercisable as at March 31, 2026.
As at the date hereof, the Company had 126,619,532 common shares issued and outstanding as fully paid and non-assessable, stock options exercisable for an aggregate of 5,311,750 common shares outstanding and 1,006,000 restricted share units.
Risks and Uncertainties
The operations of the Company are speculative due to the high-risk nature of its business, which includes the development of certain intellectual property and the manufacturing of graphene related products, and which may include the future acquisition, financing, and development of the Albany Graphite Project. These risk factors could materially affect the Company's future operating results and could cause actual events to differ materially from those described in forward-looking information relating to the Company. Accordingly, any investment in securities of the Company is speculative and investors should not invest in securities of the Company unless they can afford to lose their entire investment.
The Company assesses and attempts to minimize the effects of these risks through careful management and planning of its operations and hiring qualified personnel but is subject to a number of limitations in managing risk resulting from its early stage of development. Below is a non-exhaustive summary of the principal risks and related uncertainties that may impact the Company. Such risk factors, as well as additional risks and uncertainties set out elsewhere in the Company's publicly filed documents, and additional risks and uncertainties not presently known to Company or that the Company currently deems immaterial, could have a material adverse effect on the Company's business, financial condition and results of operations or the trading price of the common shares.
Negative Operating Cash Flow
During the financial year ended March 31, 2026, the Company had negative operating cash flow because its revenues did not exceed its operating expenses. In addition, as a result of the Company's business plans for the development of its products, the Company expects cash flow from operations to be negative until revenues improve to offset its operating expenditures. The Company's cash flow from operations may be affected in the future by expenditures incurred by the Company to continue to develop its products. To the extent the Company has negative cash flow in any future period, the Company may be required to allocate funds to fund such negative cash flow from operating activities. In order to stay in business, in the absence of cash flow from operations, the Company will have to raise funding through financing activities. However, there is no certainty the Company will be able to raise funds at all or on terms acceptable to the Company in the event it needs to do so. Furthermore, additional funds raised by the Company through the issuance of equity or convertible debt securities would cause the Company's current shareholders to experience dilution. Such securities also may grant rights, preferences or privileges senior to those of the Company's shareholders. The Company does not have any contractual restrictions on its ability to incur debt and, accordingly, the Company could incur significant amounts of indebtedness to finance its operations. Any such indebtedness could contain restrictive covenants, which likely would restrict the Company's operations.
Uncertainties Relating to the Company's Business Plans
There is no assurance that broad successful commercial applications may be feasible for the Company. The Company is continuing to explore, develop, and test its current products and new products, and there can be no assurance that new uses of existing products or new products will be fully developed for commercial application, that test results will be successful, if completed at all, that any necessary permits or approvals required in order to market such products will be obtained by the Company, or that existing technology or products will become profitable. Furthermore, there is no assurance that the Company will complete any acquisitions or acquire any know-how or trade secrets to carry out certain of its future objectives. Should the Company fail to achieve any of the foregoing, this could have a material adverse impact on the business and planned business of the Company.
The Company's business is in part dependent on patents, trade secret and other intellectual property laws of Canada, and potentially foreign jurisdictions. The Company may be unable to prevent third parties from using its intellectual property without its authorization. Some of the Company's current or future technologies and trade secrets may not be covered by any patent or patent application, and the Company's issued and pending patents may not provide the Company with any competitive advantage and could be challenged by third parties. The Company's inability to secure issuance of pending patent applications may limit its ability to protect the intellectual property rights these pending patent applications were intended to cover. The Company's competitors may attempt to design around its patents to avoid liability for infringement and, if successful, could adversely affect the Company's market share. Furthermore, the expiration of the Company's patents may lead to increased competition.
Additionally, the Company plans to construct facilities for some of its operations and business activities. There can be no assurance that locations will be secured on terms favourable to the Company or at all, that engineering plans will be completed or will be satisfactory for the intended business activities of the Company, that any required permitting will be obtained, that construction of such facilities will be completed, or that such facilities will ever become operational. If such facilities are not constructed, or do not become operational, or do not operate at the capacity required or anticipated, there could be a material adverse effect of the Company's planned business and operations.
Economic and Political Conditions
Worldwide financial and economic cycles or conditions are uncertain, and recovery from a business downturn or recession could be very slow and have a significant impact on the Company's business. The Company's business is sensitive to changes in economic and political conditions, including interest rates, currency issues, energy prices, trade issues including the potential imposition of tariffs by the United States or other nations, international or domestic conflicts or political crises, and epidemics or pandemics.
The credit and financial markets have experienced extreme volatility and disruptions due to the current conflicts in the Middle East and between Ukraine and Russia. The conflicts are expected to have further global economic consequences, including but not limited to the possibility of severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in inflation rates and uncertainty about economic and political stability. In addition, the United States and other countries have imposed sanctions on Russia which increases the risk that Russia, as a retaliatory action, may launch cyberattacks against the United States, its government, infrastructure and businesses. Any of the foregoing consequences, including those we cannot yet predict, may cause our business, financial condition, results of operations and the price of our ordinary shares to be adversely affected.
Revenue from Graphene-related Products Sales; Long and Complex Sales Cycle
To date, the Company has recorded minimal revenue from its graphene enhanced products sales. There can be no assurance that significant losses will not occur in the near future or that the Company will be profitable in the future. The Company's operating expenses, and capital expenditures may increase in subsequent years. The Company expects to continue to incur losses unless and until such time as it enters into long-term and large-volume supply agreements and generates sufficient revenues to fund its continuing operations.
Intellectual Property
The Company relies on the patent, trade secret and other intellectual property laws of Canada, and foreign jurisdictions. The Company may be unable to prevent third parties from using its intellectual property without its authorization. The unauthorized use of the Company'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 Company's intellectual property, litigation to protect and enforce the Company's rights could be costly, and the Company may not prevail.
Some of the Company's current or future technologies and trade secrets may not be covered by any patent or patent application, and the Company's issued and pending patents may not provide the Company with any competitive advantage and could be challenged by third parties. The Company's inability to secure issuance of pending patent applications may limit its ability to protect the intellectual property rights these pending patent applications were intended to cover.
The Company's competitors may attempt to design around its patents to avoid liability for infringement and, if successful, could adversely affect the Company's market share. Furthermore, the expiration of the Company's patents may lead to increased competition.
In addition, effective patent, trade secret and other intellectual property protection may be unavailable or limited in some foreign countries. In some countries, the Company may not apply for patent or other intellectual property protection. The Company also relies on unpatented technological innovation and other trade secrets to develop and maintain its competitive position. Although the Company generally enters into confidentiality agreements with its employees and third parties to protect its intellectual property, these confidentiality 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 Company's trade secrets and manufacturing expertise. In addition, others may obtain knowledge about the Company's trade secrets through independent development or by legal means. The failure to protect the Company'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 Company's ability to make and sell products or use such processes and could potentially result in costly litigation in which the Company might not prevail. The Company 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.
Product Development and Technological Change
There is no assurance that broad successful commercial applications for the Company's products may be feasible. Most, if not all, of the scientific and engineering data related to the Company's products has been generated by the Company's own laboratories or laboratory environments of the Company's partners, such as universities. There can be no assurance that laboratory data translates to or is representative in commercial applications.
Additionally, the industries in which the Company seeks to operate are characterized by rapid technological change and frequent new product introductions. Part of the Company's business strategy is to monitor such changes and take steps to remain technologically current, but there is no assurance that such a strategy will be successful. If the Company is not able to adapt to new advances in materials sciences, or if unforeseen technologies or materials emerge that are not compatible with the Company's or that could replace its products, the Company's revenues and business would likely be adversely affected.
Market Development and Growth
Failure to further develop the Company's key markets and existing geographic markets or to successfully expand its business in the future into new markets could have an adverse impact on sales growth and operating results. The Company's ability to further penetrate its key markets and the existing geographic markets in which it competes and/or aims to compete, and to 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 increase market penetration in the Company's key markets and existing geographic markets will be successful. Failure to achieve these goals may have a material adverse effect on the Company's operating results.
Unpredictable Sales Cycles
The sales cycle for graphene products may range considerably from one to multiple years from the time a customer begins testing the Company's product until the time that they could be used in a commercial product. Timing of product introduction could vary significantly based on the target market.
The Company has demonstrated little track record of success in completing customer development projects, which makes it difficult to evaluate the likelihood of future success. The sales and development cycles for the Company's products are subject to customer budgetary constraints, internal acceptance procedures, competitive product assessments, scientific and development resource allocations, and other factors beyond the Company's control. If the Company is not able to successfully accommodate these factors to achieve commercial success, the Company may be unable to achieve sufficient sales to reach profitability.
Government Regulation and Import/Export Controls
The Company's future operations, including development, and commencement and continuation of commercial production, require licenses, permits or other approvals from various federal, provincial, local and potentially foreign governmental authorities, and such operations are or will be governed by laws and regulations relating to production, exports, taxes, labor standards, occupational health and safety, waste disposal, toxic substances, prospecting, development, mining, land use, water use, environmental protection, land claims of indigenous people and other matters. Furthermore, in certain foreign jurisdictions, these regulatory requirements may be more stringent than those in Canada. Certain export control laws or economic sanctions laws may include restrictions or prohibitions on the sale or supply of certain products and services to embargoed or sanctioned countries, governments, persons and entities. In addition, various countries regulate the import of certain technology, including import and export permitting and licensing requirements, and have enacted or could enact laws that could limit the Company's ability to distribute its products. Changes in the Company's products, or future changes in export and import regulations may prevent any potential international customers from utilizing the Company's products globally or, in some cases, prevent the export or import of the Company's products to certain countries, governments, or persons altogether.
Additionally, the United States government has taken certain actions that could negatively impact trade with the United States, including imposing tariffs on certain imported goods and prohibiting certain imports into the United States. In retaliation, Canada, Mexico and China continue to evaluate imposing tariffs on a wide range of American products. There is also a concern that the imposition of additional tariffs by the United States could result in the adoption of tariffs by other countries as well, potentially leading to a global trade war. Such tariffs and prohibitions, if expanded to other categories, could have a significant impact on the Company's business, particularly on the importation of certain equipment manufactured in other countries and the sale of the Company's products in other countries.
Any change in export or import regulations, economic sanctions, or related legislation, or change in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of the Company's products in the future by, or in the Company's decreased ability to export or sell its products to, potential international customers. Any limitation on the Company's ability to export or sell its products would likely adversely affect the Company's future business, results of operations, and financial results.
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).
Health Canada also regulates certain markets into which the Company intends to supply products or license its intellectual property. There is no assurance that Health Canada or any other body will grant license for sales into markets it regulates. Each foreign jurisdiction for the Company's products is regulated, and no assurance exists that sales of graphene-related products will be permitted. Any inability by the Company to obtain approval from Health Canada and/or international bodies could have a material adverse impact of the business of the Company.
The Company is also subject to consumer protection laws that may impact its sales and marketing efforts. These laws, as well as any changes in these laws, could make it more difficult for the Company to sell and market its products. These laws and regulations are subject to change over time and thus the Company must continue to monitor and dedicate resources to ensure continued compliance. Non-compliance with applicable regulations or requirements could subject the Company to investigations, sanctions, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties, or injunctions. If any governmental sanctions are imposed, or if the Company does not prevail in any possible civil or criminal litigation, its business, operating results, and financial condition could be materially adversely affected.
Additionally, in order for the Company to carry out its activities, any required licenses and permits must be obtained and kept current. There can be no assurance, however, that the Company will obtain on reasonable terms or at all the permits and approvals, and the renewals thereof, which it may require for the conduct of its future operations or that compliance with applicable laws, regulations, permits and approvals will not have an adverse effect on the Company's business plans. Possible future environmental and mineral tax legislation, regulations and actions could cause additional expense, capital expenditures, restrictions and delay on the Company's planned exploration and operations, the extent of which cannot be predicted.
Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations.
Industry Competition
The Company seeks to compete with other graphene and manufacturing companies, in highly competitive markets. Some of the Company's competitors have substantially greater financial, marketing and other resources and higher market share than the Company has in certain products or geographic areas. As the markets for the Company's products expand, additional competition may emerge, and competitors may commit more resources to products which directly compete with the Company's products. There can be no assurance that the Company will be able to compete successfully with existing competitors or be able to develop any market for its products, or that its business will not be adversely affected by increased competition or by new competitors.
There is no assurance that the Company will continue to be able to compete successfully with its competitors in acquiring such properties or prospects and any such inability could have a material adverse effect on the Company's business and financial condition.
Lack of Trading Market for Graphene
Unlike commodity minerals such as copper, gold or silver, industrial minerals such as graphene precursor graphene materials and graphite do not have a metals exchange or an open market upon which to trade and therefore prices are not set in an open market or publicly traded market, and there can be no assurance that certain items can be sold or purchased at any time. As prices are set with private suppliers and private customers, it is difficult to predict what market prices may be at the time of any transaction. There can be no guarantees that the Company will be able to sell its graphene products in a profitable manner, or at all.
Shortages
The Company will be dependent on various supplies, equipment, parts and labour, and the services of contractors to carry out its business objectives. The availability and cost of such supplies, equipment, parts or labour or the services of contractors could have a material adverse effect on the Company's ability to successfully carry out its exploration and development activities.
Liquidity Concerns and Future Financing
The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As of March 31, 2026, the Company had a cash balance of $1,302,738 (March 31, 2025 - $121,481) to settle current liabilities of $3,533,474 (March 31, 2025 - $3,485,001). On October 22, 2025, the Company completed a non-brokered private placement of units through the issuance of 2,338,893 Units at a price of $1.06 per Unit for gross proceeds of $2,479,227. Net proceeds of the Offering will be used for working capital and general corporate purposes. On August 19, 2024, the Company closed a Non-Brokered Private Placement of units (the "Units") through the issuance of 2,361,500 Units at a price of $1.30 per Unit for gross proceeds of $3,069,950. Net proceeds of the Offering will be used for working capital and general corporate purposes. On April 9, 2025, the Company closed a non-brokered private placement of debenture units through the issuance of 2,000 Debenture Units for gross proceeds of $2,000,000. Net proceeds of the Offering will be used for working capital and general corporate purposes. On May 15, 2025, the Company completed the sale of 24 Corporate Court. in Guelph, Ontario for $2,500,000 which currently is the registered head office of the Company. On May 15, 2025, the proceeds from the closing of the sale were used to fully repay and discharge the mortgage. The Company leased back the property from the purchaser until January 31, 2026 and in December 2025 moved its laboratory to a new location within Guelph, Ontario. In May 2026, the Company completed a private placement for gross proceeds of $18 million, which significantly strengthened its liquidity position. As at March 31, 2026, the Company had not yet achieved profitable operations, had an accumulated deficit of $90.8 million, reported a net loss of $9.5 million and cash outflows from operating activities of $5.1 million, and expects to incur further losses in the development and commercialization of its products and technologies. These events and conditions indicate that a material uncertainty exists that may cast substantial doubt on the Company's ability to continue as a going concern. While the proceeds from the May 2026 private placement have significantly strengthened the Company's liquidity position, the Company remains dependent on the successful commercialization of its products and technologies, achieving profitable operations, and/or obtaining additional financing in the future.
Reliance on Key Personnel
The Company's development to date has depended, and in the future, will depend largely on the efforts of key management and other key personnel. Loss of any of these people, particularly to competitors, could have a material adverse effect on the Company's business. Further, with respect to the future development of the Company's projects, it may become necessary to attract both international and local personnel for such development. The marketplace for key skilled personnel is becoming more competitive, which means the cost of hiring, training, and retaining such personnel may increase. Factors outside the Company's control, including competition for human capital and the high-level of technical expertise and experience required to execute this development will affect the Company's ability to employ the specific personnel required. The failure to retain or attract a sufficient number of key skilled personnel could have a material adverse effect on the Company's business, results of operations, and financial condition. The Company has not taken out and does not intend to take out "key man insurance" in respect of any directors, officer, or other employees.
Qualified Employees
Recruiting and retaining qualified personnel is critical to the Company'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 Company 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 Company if it is unable to recruit and retain qualified personnel as and when required.
Cybersecurity Threats
The reliability and security of the Company's information technology ("IT") systems are important to the Company's business and operations. Although the Company has established and continues to enhance security controls intended to protect the Company's IT systems and infrastructure, there is no guarantee that such security measures will be effective in preventing unauthorized physical access or cyberattacks. A significant breach of the Company's IT systems could, among other things, cause disruptions in the Company's manufacturing operations (such as operational delays from production downtime, inability to manage the supply chain or produce products 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 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 impact of changing laws and regulations related to cybersecurity or result in theft of the Company's, its customers' or suppliers' intellectual property or confidential information. If any of the foregoing events (or other events related to cybersecurity) occurs, the Company 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 Company.
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 can be no assurance that fluctuations in the Company's share price will not occur. In particular, the fluctuations may be exaggerated if the trading volume of the Company's common shares is low.
Cost Absorption and Purchase Orders
Especially as it relates to its activities in the transportation industry, and given the current trends in that industry, the Company 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 Company's customers' estimates of their own 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 Company's products. For programs currently under production, the Company is generally unable to request price changes when volumes differ significantly from production 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 Company may not be fully recovered. Similarly, future pricing pressure or volume reductions by the Company's customers may also reduce the amount of amortized costs otherwise recoverable in the piece price of the Company's products. Either of these factors could have an adverse effect on the Company's profitability. While it is generally the case that once the Company 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 Company for a variety of reasons, including the Company's refusal to accept demands for price reductions or other concessions.
Acquisitions
The Company could seek to acquire complementary businesses, assets, technologies, services or products, at competitive prices. The Company could pursue acquisitions in those product areas which were identified as key to the Company's long-term business strategy. However, as a result of intense competition in these strategic areas, the Company may not be able to acquire the targets needed to achieve its strategic objectives. The completion of such transactions poses additional risks to the Company's business.
Acquisitions are subject 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 Company 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 company facilities and/or personnel; or other limitations in the due diligence process. Additionally, the Company 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 Company's operations or profitability. The benefit to the Company of previous and future acquisitions is highly dependent on the Company's ability to integrate the acquired businesses and their technologies, employees and products into the Company, and the Company may incur costs associated with integrating and rationalizing the facilities (some of which may need to be closed in the future).
The Company cannot be certain that it will successfully integrate acquired businesses or that acquisitions will ultimately benefit the Company. Any failure to successfully integrate businesses or failure of the businesses to benefit the Company could have a material adverse effect on its business and results of operations. Such transactions may also result in additional dilution to the Company's shareholders or increased debt. Such transactions may involve partners, and the formula 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 Company 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. The Company'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 Company's facilities and proposed facilities contain complex and sophisticated equipment that is used in its manufacturing processes. The Company 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 Company 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 Company's profitability and operations.
Material and Commodity Prices
Prices for key raw materials and commodities used in the production of graphene-based products, as well as energy prices, have proven to be volatile at certain times. To the extent that the Company 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.
Uninsured Risks
The Company 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 profitability and result in increasing costs and a decline in the value of the common shares of the Company.
Litigation
The Company has entered into legally binding agreements with various third parties, including supply, license, 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 Company may disagree with the position taken by the various other parties resulting in a dispute that could potentially initiate litigation and cause the Company to incur legal costs in the future. Given the speculative and unpredictable nature of litigation, the outcome of any such disputes could have a material adverse effect on the Company's business.
Credit Risk
As at March 31, 2026, the Company's credit risk was primarily attributable to cash, accounts and other receivables. Financial instruments included in accounts and other receivables consisted of trade receivables generated through sales as well as recoverable Harmonized Sale Tax. The Company's cash is held with reputable financial institutions. Management believes that the credit risk with respect to financial instruments included in accounts and other receivables is remote.
Interest Rate Risk
The Company has cash and cash equivalent balances at federally regulated Canadian banks. The Company periodically monitors the investments it makes, the security of such investments and is satisfied with the credit ratings of its banks. The Company closely monitors interest rates to determine the appropriate course of action to be taken by the Company.
Price Risk
The Company is exposed to price risk with respect to commodity prices. The Company closely monitors commodity prices to determine the appropriate course of action to be taken by the Company.
Financial Capability and Additional Financing
The Company has limited financial resources and there is no assurance that sufficient additional funding will be available to enable it to fulfill its business objectives or obligations, on acceptable terms or at all. Unanticipated expenses and other developments could cause existing funds to be depleted sooner than expected. In the event that its existing cash resources are inadequate to fund operational expenses, and in order to fund the planned business objectives of the Company, the Company will be required to raise additional financing from external sources, such as debt financing, equity financing or joint ventures. The Company's ability to raise additional equity financing may be affected by numerous factors beyond the Company's control, including, but not limited to, adverse market conditions, commodity price changes and an economic downturn. Failure to obtain additional funding on a timely basis could result in delay or indefinite postponement of the development of the Company's business and could cause the Company to reduce or terminate its operations. Additional funds raised by the Company from treasury share issuances may result in significant dilution to existing shareholders, a depressive effect on the price of the common shares and/or a change of control.
Permits and Government Regulation
Although the Company believes it has all of the necessary permits to carry out the proposed business programs, the operations of the Company may require licenses and permits from time to time from various governmental authorities to carry out exploration and development at its projects or locations. Obtaining permits can be a complex, time-consuming process. There can be no assurance that the Company will be able to obtain the necessary licenses and permits on acceptable terms, in a timely manner or at all. The costs and delays associated with obtaining permits and complying with these permits and applicable laws and regulations could stop or materially delay or restrict the Company from continuing or proceeding with existing or future operations or projects. Any failure to comply with permits and applicable laws and regulations, even if inadvertent, could result in the interruption or closure of operations or material fines, penalties or other liabilities. In addition, the requirements applicable to sustain existing permits and licenses may change or become more stringent over time and there is no assurance that the Company will have the resources or expertise to meet its obligations under such licenses and permits.
Fluctuating Prices
The profitability of the Company's operations will be dependent upon the market price of the ZenGUARD™ masks and other products, their global acceptance and demand along with their regulatory approvals in other jurisdictions. The level of interest rates, rate of inflation, production costs, healthcare and consumer demand, and stability of exchange rates can all cause significant fluctuations in revenue. Such external economic factors are in turn influenced by changes in international purchasing patterns, COVID-19 pandemic situation, monetary systems and political developments.
Environmental Regulation
AGC's Albany Graphite Project is subject to environmental laws and regulations which may materially and adversely affect its future operations. These laws and regulations control the exploration and development of the Albany Graphite Project and their effects on the environment, including air and water quality, waste handling and disposal, the protection of different species of plant and animal life, and the preservation of lands. These laws and regulations will require AGC to acquire permits and other authorizations for certain activities. There can be no assurance that AGC will be able to acquire such necessary permits or authorizations on a timely basis, if at all.
Further, environmental legislation is evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. There is no assurance that future changes in environmental regulation, if any, will not adversely affect AGC's operations.
AGC is not currently insured against most environmental risks. Without such insurance, and if AGC becomes subject to environmental liabilities, the payment of such liabilities would reduce or eliminate its available funds or could exceed the funds AGC has to pay such liabilities and result in bankruptcy.
Economic Dependence on Supply Agreements
Currently, the Company has entered into a limited number of supply or sales agreements for the sale of its products. Until additional supply agreements are executed by the Company, the Company's revenues will be completely dependent on such agreements. If such agreements are terminated, or if less of the Company's product than anticipated is purchased pursuant to such agreements, this could have a material adverse impact on the Company's business, operations and results.
Legal proceedings and regulatory actions
Other than as set out below, the Company was not subject to any material legal proceedings during its most recently completed financial year, nor is the Company or any of its properties a party to or the subject of any such proceedings, and no such proceedings are known to be contemplated. The Company may be involved in routine, non-material litigation arising in the ordinary course of business, from time to time.
There were no penalties or sanctions imposed against the Company by a court relating to provincial and territorial securities legislation or by a securities regulatory authority during its most recently completed financial year, nor have there been any other penalties or sanctions imposed by a court or regulatory body against the Company, and the Company has not entered into any settlement agreements before a court relating to provincial and territorial securities legislation or with a securities regulatory authority.
The Company is involved in legal proceedings relating to claims involving a former director and officer of the Company. The claim was commenced in the Ontario Superior Court of Justice on September 26, 2018, by Aubrey Eveleigh and Eveleigh Geological Consulting. Mr. Eveleigh seeks damages in excess of $5,000,000 in connection with an employment dispute. The Company is defending the claim, and the proceedings remain ongoing, though the Company believes that the risk of significant loss in respect of the litigation is remote.
The Company subsequently commenced a claim against Mr. Eveleigh and Eveleigh Geological Consulting on March 24, 2020, in the Ontario Superior Court of Justice (Commercial List), in connection with past breaches of Mr. Eveleigh's fiduciary duties. Mr. Eveleigh has defended the claim, and the Company submits that it continues to defend the action and maintains that the allegations as set out in the claim are frivolous and without merit.
On November 28, 2022, following the discovery process, the Company amongst other things, amended its claim to: (i) seek an order that Mr. Eveleigh disgorge any benefits obtained as a result of his misconduct; (ii) seek an order cancelling certain common shares of the Company held by Mr. Eveleigh; (iii) seek an order declaring that Mr. Eveleigh has no entitlement to any royalty payments or success fees in connection with the Albany Graphite Project; and (iv) seek an order that declares a constructive trust in favour of the Company over any and all monies received, directly or indirectly. The trial commenced on October 21, 2024, and closing submissions were held on January 17, 2025. On March 13, 2026, the Company announced that the Ontario Superior Court of Justice (Commercial List) has issued its Reasons for Judgment dated March 12, 2026, in the companion actions Eveleigh et al. v. Zenyatta; Zentek v. Eveleigh et al., 2026 ONSC 1510. The court dismissed substantially all claims advanced by Mr. Eveleigh and his consulting firm, Eveleigh Geological Consulting Inc. At trial, the claims were refined and the Court denied all remaining monetary claims. With respect to the Company's claim for cancellation of 4.5 million founder shares and disgorgement of profits, the Court found that the shares had been properly issued and that there was no basis to set aside the issuance. On March 27, 2026, the Company submitted a cost submission to the Courts for approximately $797,000 for partial indemnity cost and disbursement relief. On June 17, 2026, the Company received a decision that there would be no order as to costs and that the Company's cost submission had been denied.
On January 29, 2021, the Company was served with a statement claim issued by Graphene Composites Ltd. and is in the process of defending the action, which it considers frivolous and without merit.
The Company has considered the allegations as set out in the claim and, in light of the facts, the lack of clarity in the claim, and, based on discussions with the Company's litigation counsel, the assessment of the merits of the claim and the defenses available to the Company, and the Company's conclusion is that the risk of the Company suffering loss in respect of the claim is remote, and therefore the Company determined the claim not to be material or constituting "significant litigation" pursuant to the policies of the TSXV. The Company continues to view this claim as frivolous and will continue to vigorously defend itself against these allegations.
Proposed Transactions
As is typical of rapidly growing companies, the Company is continually reviewing partnerships, potential merger, acquisition, investment and joint venture transactions and opportunities.
Employment Agreements
On November 25, 2025, the Company announced the appointment of Mohammed Jiwan as Chief Executive Officer ("CEO") and a director of the Company, effective December 1, 2025. During the financial year ended March 31, 2026, the base salary for Mr. Jiwan under his employment agreement was set at $400,000 per annum.
The Company has a consulting agreement with its former CEO. On September 3, 2025, the former CEO resigned his position as CEO and as a member of the Board of Directors. The Company agreed that the term of the consulting agreement would come to an end on March 31, 2026. During the financial year ended March 31, 2026, the salary level for the individual pursuant to the consulting agreement was $325,000 annually.
The Company has an employment agreement with its Chief Financial Officer. During the financial year ended March 31, 2026, the salary level for the individual pursuant to the employment agreement is $290,000 annually.
Contingent Liabilities
See "Legal proceedings and regulatory actions".
Material Accounting Policies
A detailed summary of all of the Company's significant accounting policies is included in Note 2 to the March 31, 2026, audited annual consolidated financial statements.
Internal Control over Financial Reporting
Management is responsible for the design of internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements in accordance with IFRS Accounting Standards. Based on regular reviews of its internal control procedures an evaluation of the effectiveness of the Company's internal control over financial reporting was conducted as of March 31, 2026, based on the criterial described in "Internal Control - Integrated Framework (2013)" issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has determined that its internal controls and procedures are effective in providing reasonable assurance that financial information is recorded, processed, summarized and reported in a timely manner.
Changes to Internal Control over Financial Reporting
The Company is required to disclose herein any change in the Company's internal control over financial reporting that occurred during the quarter and year ended March 31, 2026, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. During the quarter and year ended March 31, 2026, there have been no changes to the Company's internal controls over financial reporting that occurred, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Disclosure Controls
Management is also responsible for the design and effectiveness of disclosure controls and procedures to provide reasonable assurance that material information related to the Company is made known to the Company's certifying officers. The Company's Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures were effective as of March 31, 2026.
EXHIBIT 99.4
CERTIFICATION
I, Mohammed Jiwan, Chief Executive Officer of Zentek Ltd., certify that;
| 1. | I have reviewed this Annual Report on Form 40-F of Zentek Ltd.; | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
| 4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and | |
| 5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): | |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and | |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. | |
Date: June 25, 2026
| By: /s/ Mohammed Jiwan | |
| Name: Mohammed Jiwan | |
| Title: Chief Executive Officer |
EXHIBIT 99.5
CERTIFICATION
I, Wendy Ford, Chief Financial Officer of Zentek Ltd., certify that;
| 1. | I have reviewed this Annual Report on Form 40-F of Zentek Ltd.; | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
| 4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and | |
| 5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): | |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and | |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. | |
Date: June 25, 2026
| By: /s/ Wendy Ford | |
| Name: Wendy Ford | |
| Title: Chief Financial Officer |
EXHIBIT 99.6
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Mohammed Jiwan, Chief Executive Officer of Zentek Ltd. (the "Company"), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
| a. | the Annual Report on Form 40-F of the Company for the fiscal year ended March 31, 2026 (the "Annual Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and | |
| b. | the information contained in the Annual Report fairly presents in all material respects the financial condition and results of operations of the Company. |
Date: June 25, 2026
| By: | |
| /s/ Mohammed Jiwan | |
| Name: Mohammed Jiwan | |
| Title: Chief Executive Officer |
EXHIBIT 99.7
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Wendy Ford, Chief Financial Officer of Zentek Ltd. (the "Company"), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
| a. | the Annual Report on Form 40-F of the Company for the fiscal year ended March 31, 2026 (the "Annual Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and | |
| b. | the information contained in the Annual Report fairly presents in all material respects the financial condition and results of operations of the Company. |
Date: June 25, 2026
| By: | |
| /s/ Wendy Ford | |
| Name: Wendy Ford | |
| Title: Chief Financial Officer |
Consent of Independent Registered Public Accounting Firm
We hereby consent to the use of our report dated June 25, 2026 relating to the consolidated financial statements of Zentek Ltd. (the "Company") appearing in this Annual Report on Form 40-F for the year ended March 31, 2026. Our report contains an explanatory paragraph regarding the Company's ability to continue as a going concern.
/s/ BDO Canada LLP
Oakville, Canada
June 25, 2026