Mr. Francis Dube reports

ZENTEK REPORTS ON ANNUAL FINANCIAL STATEMENTS AND AUDIT COMMITTEE

Zentek Ltd. has filed its audited consolidated financial statements for the financial year and quarter ended March 31, 2023.

Overimpairment of Albany graphite project

As previously announced in its press release of Dec. 23, 2021, the company, in connection with a review by staff of the Ontario Securities Commission, conducted an impairment analysis on its Albany graphite project in Northern Ontario and determined at the time that the recoverable amount and carrying value of the Albany graphite project as at Sept. 30, 2021, were negligible, and accordingly, the value of the asset was impaired to nil. During the preparation of the 2023 annual financial statements, while reviewing the accounting under the international financial reporting standards and the valuation of the Albany graphite project with the auditor at BDO Canada LLP, management determined that the Albany graphite project was overimpaired and had a minimum value of $7-million. Additionally, management determined that the impairment and the results of operations and cash flows related to the Albany graphite project did not qualify to be presented as discontinued operations under international financial reporting standard 5 since the Albany graphite project was not abandoned.

Consequently, the company has restated the comparative consolidated financial statements to account for the additional $7-million minimum value of the Albany graphite project. The restatement had no impact on the opening statement of financial position as at April 1, 2021; however, an additional $7-million has been added to the consolidated statement of financial position as at March 31, 2022, and the consolidated statement of loss and comprehensive loss, changes in shareholders equity, and cash flows for the year ended March 31, 2022, as set out in Note 23 to the 2023 annual financial statements.

Audit committee composition

The company also reports that it has received a deficiency letter from Nasdaq Stock Market LLC dated June 29, 2023, stating that the company no longer complies with Nasdaq's audit committee requirement under listing Rule 5605 that its audit committee be composed of at least three independent directors. Frank Klees, an independent director, resigned from the company's board and audit committee, effective June 1, 2023, and was replaced by Lisa Sim, after her appointment, effective the same day. Ms. Sim does qualify as an independent director under Canadian securities law but does not meet the independence requirements of Nasdaq listing Rule 5605(a)(2) or Rule 10A-3(b)(1) under the Securities Exchange Act of 1934 to act on the audit committee, as she is a partner at a law firm that provides services to the company. However, consistent with listing Rule 5605(c)(4), Nasdaq will provide the company a cure period to regain compliance until the earlier of the company's next annual shareholders meeting or Nov. 28, 2023.

The board has an active search to locate an additional independent director who will be a suitable replacement for Ms. Sim on the company's audit committee. The company intends to submit to Nasdaq documentation, including biographies of any new directors, evidencing compliance with the rules by the company's next annual shareholders meeting.

About Zentek Ltd.

Zentek is an ISO 13485:2016-certified graphene technology company focused on the research, development and commercialization of graphene-based novel products seeking to give the company's commercial partners a competitive advantage by making their products better, safer and greener.

Zentek's patented technology platform, ZenGuard, is shown to have 99-per-cent anti-microbial activity and to significantly increase the bacterial and viral filtration efficiency of both surgical masks and HVAC (heating, ventilation and air conditioning) systems. Zentek's ZenGuard production facility is located in Guelph, Ont. Zentek's patent-pending ZenArmor technology platform is focused on corrosion protection applications.

We seek Safe Harbor.