Letter to Shareholders
May 2026
ZENTEK LTD. (TSXV: ZEN | NASDAQ: ZTEK)
To our shareholders,
This long overdue letter has three goals:
To tell you what has changed at Zentek in the six months since December 1.
To tell you how the capital we just raised will be deployed.
To set the standard I expect this company to hold itself to going forward.
When I joined, the picture was three deep-science platforms whose commercial value the market was not pricing, a stalled regulatory file, a strained balance sheet, and a story without focus. On this much, shareholders of every camp agreed: the value of the underlying assets was outrunning what the company was delivering. Fast forward to June 2026; the regulatory file is resolved, the balance sheet is rebuilt, the rest of this letter is the focus.
To those of you who have become new shareholders through the financing: welcome. The simplest way to receive future letters and press releases directly is to subscribe through the contact page on our website. Additionally, you can email, I personally read every message that comes to mjiwan2@zentek.com, and where there is something to add beyond what is already publicly disclosed, I will reply.
What Changed Since December
We cleared the regulatory overhang. The Health Canada classification matter, ongoing since 2024 and stalled when I arrived, is resolved. On May 6, 2026, Health Canada confirmed that ZenGUARD™ Enhanced Air Filters are not subject to the Pest Control Products Act. The product was then added to the Government of Canada’s Pathway to Commercialization source list as an exclusive supplier for three years. A multi-year challenge has now transitioned into a commercial opportunity, and we are now fielding inbound calls from potential distribution and manufacturing partners.
We rebuilt the balance sheet. Last week we closed an $18 million (CAD) financing. That capital fully funds our near-term plan and extends our runway from precarious to multi-year. We also engaged ICP Securities to support market liquidity.
There are three things on the financing worth saying plainly.
Size and timing. When I came in on December 1, the working capital position would not have carried us through the milestones we are pursuing: the upcoming Albany PEA and the engineering work that supports it, and the ZenGUARD™ commercialization rollout in Canada. Sizing the financing to fund that work with a margin of safety was, in my judgment, the right call. The alternative was a smaller raise now followed by another raise inside a few months at a price and global economy none of us can predict.
Warrant structure. The warrants strike above the unit price. They are out-of-the-money at close, and they only convert into share issuance once the share price has moved higher than where the units were issued. When they do convert, they bring fresh capital into the company at that higher price. That makes the warrants a forward financing line we have already negotiated, priced above the units, that activates as the business delivers and pays into the treasury without us having to return to the market to raise it again.
Who is in the deal. The identity of subscribers in a financing of this kind is governed by securities law, not by my preference. Any holder who crosses a reporting threshold under Canadian or United States rules becomes visible through the regulatory channels built for that purpose: early warning reports and insider filings on SEDAR+ and SEDI, and the equivalent United States filings where applicable. Anything that becomes materially disclosable will be disclosed in those channels in the normal course. Anything that does not reach a threshold is not appropriate to share in this letter, and any partial picture I tried to give would mislead more than it would inform
The capital will be deployed against specific milestones in the same disciplined manner we have operated since December, and non-dilutive sources (government programs and client-funded work) remain a core part of how we fund what comes next.
Aligned With Where the Market is Going
There is an elephant in the room that I want to name. A business does not grow by thinking the way it thought ten years ago. The market that valued, or did not value, what this company built in the past is not the same market that exists today, and it will not be the same market five and ten years from now. Graphite is the clearest example. For most of this company’s history, the commercial value of the deposit simply was not there. The end users that mattered did not need what Albany has. That has changed.
What changed is not one thing. The end markets we serve are in the middle of the largest realignment of allied-source supply chains in decades1. Critical minerals supply security is now written policy across Five Eyes nations2. Nuclear is back as a serious component of the energy transition, with small modular reactors moving from concept into procurement3. Defence and aerospace procurement is increasingly conditioned on allied-source materials and supply chain provenance, with qualification scarcity that the commodity market never had4. Each of those end users has different specifications, different qualification cycles, and different price discipline than the bulk commodity market that historically defined graphite. A business that does not adapt its intellectual property to where its customers are going loses, regardless of how good the underlying science is. So, we are adapting and staying deliberately nimble.
Global Spend Pools Where Zentek IP Intersects
Our work is being directed at where qualification scarcity, allied-source requirements, and price discipline are highest right now, which today means defence, national security, and nuclear. Industrial applications run in parallel on the same materials and through the same testing.
The same logic applies to ZenGUARD™. The supply chain partners we are working with are increasingly thinking about resilience and provenance, not only cost.
The business I am building is aligned with where these end users are headed over the next five and ten years. Every capital allocation decision, every partnership, and every milestone is filtered through that lens.
Converting Capital Into Value-Creating Milestones
With the financing closed, the question is no longer whether we have the resources to execute. It is what we will execute. Since December we have produced a steady cadence of substantive milestones, the pace we intend to sustain and accelerate to convert this capital into shareholder value. The capital we have raised is fuel for what I believe will be a highly active and value-defining period for the company, a sustained sequence of business milestones across our portfolio that we believe, taken together, will compound into meaningful value for shareholders.
The majority of this capital will be directed to Albany. Advancing the deposit from the upcoming Preliminary Economic Assessment through to a Final Investment Decision is our most concentrated effort and what we believe is the largest near-term value driver in the portfolio. ZenGUARD™ will also be funded, as an extension of the same R&D platform that produced the technology, with capital directed at the workstreams that most quickly convert regulatory clearance into commercial revenue. Triera is being evaluated separately. The platform continues to advance on its existing footing, and capital will follow the commercial opportunity once that opportunity is defined, not before.
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Albany pathway: from Preliminary Economic Assessment to Final Investment Decision
Albany is progressing through a defined critical-minerals development sequence. The Preliminary Economic Assessment, expected this summer, will be the only compliant graphite study modelling potential nuclear-grade and higher-value end-market pricing in the industry (as far as we know). Subsequent work will build on this foundation. The Pre-Feasibility Study and the Front-End Engineering Design work on graphite purification will then advance in parallel, with the engineering work supporting the technical de-risking that underpins the higher-value pricing assumptions. The Feasibility Study and ultimately the Final Investment Decision are the gates beyond that.
ZenGUARD™ has transitioned from regulatory clearance to commercial buildout. We continue to work with potential partners to deliver the best commercial outcome possible. We are currently exploring three potential pathways to market:
Selling finished ZenGUARD™ Enhanced Air Filters directly into the market;
Selling ZenGUARD™ media to converters or manufacturers who can incorporate it into finished filter products; and
Potentially licensing our technology to established supply-chain partners with the scale and reach to accelerate adoption.
Triera is positioned to operate as an open contract research organization, and we continue to evaluate the right commercial structure to capture the value of the underlying science. We will say more on Triera when the commercial path is clearer. In the meantime, the platform is advancing on its existing footing.
None of this is a promise of a specific outcome or timing. It is what we are working toward and believe the milestones we have achieved over the last six months position us to pursue. We are focused on execution and value creation, and we will communicate with the market selectively, when progress is material. Shareholder capital will continue to be allocated with discipline, with each platform competing for capital based on results.
A Word on the Chart
I am aware that some of you have been on the register since well before the 2021 print, and that the share price over the last several years has been painful. I am not going to pretend it is anything other than what it is.
I will say this plainly; for much of its history, this company produced steady news flow that did not always translate into delivered substance. The standard I am setting is the inverse. We will communicate when there is something material to communicate, and we will measure ourselves by what gets built rather than by how often we say something. Building a sustainable business and announcing milestones that actually move it forward is the work, the news flow, when it comes, will be the byproduct.
Against that standard, here is what has happened in the six months since I joined.
The Health Canada matter that had been open since 2024 is resolved.
ZenGUARD™ Enhanced Air Filters are on the Government of Canada’s Pathway to Commercialization source list as an exclusive supplier for three years.
The United States patent on the underlying graphene-silver chemistry was granted by the USPTO.
The Nasdaq minimum bid compliance extension was secured.
The $18 million financing has closed.
ICP Securities has been engaged to support market liquidity.
The updated Albany Preliminary Economic Assessment is in flight and expected this summer.
The Triera platform continues to advance.
That is the pace I intend to sustain. The work it takes to compound those milestones into a re-rated share price does not happen on a daily or weekly cadence. It happens on a milestone cadence, and the milestones are coming. I am asking for the room to operate at that cadence. The conversation that matters is not the one the price has on any given Tuesday. It is the one the milestones above are starting to have with the market, and the one the next set of milestones will continue.
To the shareholders who have held through a difficult period: thank you. The work is not done, and the gap between Zentek’s value and its recognition has not yet closed. But it is narrowing, and the pace since December is the clearest evidence of how we intend to continue closing it. I welcome your questions, and I am grateful for your continued confidence.
Sincerely,
Moe
Mohammed (Moe) Jiwan
Chief Executive Officer, Zentek Ltd.
mjiwan2@zentek.com | www.zentek.com
