Zentek to raise up to $2 million through private placement

GUELPH, Ontario - Zentek Ltd. (NASDAQ:ZTEK) (TSXV:ZEN), a nano-technology company with a market capitalization of $81 million, announced Wednesday its plan to raise up to $2 million through a non-brokered private placement. The intellectual property development company, whose stock has declined nearly 12% over the past week according to InvestingPro data, will issue up to 1,886,792 units priced at $1.06 per unit.

Each unit consists of one common share, one-half of a Series A warrant, and one-half of a Series B warrant. The Series A warrants will be exercisable at $1.50 per share for 24 months, while Series B warrants will be exercisable at $2.00 per share for 36 months. Both warrant series include acceleration clauses if the company’s stock maintains certain price thresholds. InvestingPro analysis shows the company operates with moderate debt levels but remains unprofitable, with negative EBITDA of $6 million in the last twelve months.

Proceeds from the offering will be used for working capital and general corporate purposes, according to the press release statement. The transaction remains subject to regulatory approvals, including from the TSX Venture Exchange.

Additionally, Zentek granted stock options to certain officers, directors, and employees to acquire 979,000 common shares at $1.06 per share, with various vesting schedules over the next three to four years. The company also issued 779,000 restricted share units vesting in October 2026.

Zentek specializes in developing technologies for commercial partners, including its ZenGUARD platform for enhanced viral filtration in surgical masks and HVAC systems. Trading at a price-to-book ratio of 8x, the company operates a production facility in Guelph, Ontario, and holds an exclusive license to an Aptamer-based platform technology from McMaster University. Discover more detailed financial metrics and 6 additional key insights with InvestingPro.

All securities issued in the offering will be subject to a four-month hold period from the date of issuance.

In other recent news, Zentek Ltd. has appointed Wendy Ford as interim CEO following the resignation of Greg Fenton. The company is actively searching for a permanent CEO to guide its next growth phase. Zentek has also reported promising results from initial in vivo testing of a lead candidate countermeasure for seasonal influenza, supported by approximately $1.1 million from the Government of Canada’s Innovative Solutions Canada Testing Stream. Additionally, Zentek has updated its slate of director nominees for its upcoming annual general meeting, introducing two new nominees while three current directors will not seek re-election.

In a strategic move, Greg Fenton has resigned from Zentek to become the full-time CEO of Altek Advanced Materials Inc., and the two companies have entered into a licensing agreement. Furthermore, Zentek has announced that Fenton’s consulting contract will not be renewed beyond March 31, 2026, as the firm shifts its focus from research and development to commercialization. The company is in the process of identifying a successor for Fenton to support this transition. These developments reflect Zentek’s ongoing efforts to adapt and position itself for future growth.

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