G6 Materials Reports Strong 3Q21 Financial Results

a technology company creating value through the development of innovative graphene-based solutions, is pleased to announce that it has filed its unaudited financial results for the third quarter of the fiscal year ending February 28, 2021, the highlights of which are included in this news release. The full set of Condensed Interim Consolidated Financial Statements and Management Discussion and Analysis can be viewed by visiting G6’s website at www.g6-materials.com or its profile page on SEDAR at www.sedar.com.

Financial Highlights (all amounts expressed in US dollars unless otherwise noted)

• Revenue for the nine-month period ended February 28, 2021 reached $1,938,991, a 276% increase from the $515,930 reported for the same period of the prior year, which was primarily due to consulting services provided to third-party clients, the ongoing sale of the Company’s air purification products and the receipt of a one-time payment as per the terms of a license and option agreement.
• Gross profit for the nine-month period ended February 28, 2021 was $704,944, a 339% increase from the $160,620 reported for the same period of the prior year, due to the same aforementioned reasons, while partially offset by a recent increase in the shipping costs of direct materials from the imports of air purification materials.
• Total expenses for the nine-month period ended February 28, 2021 were $1,308,452, as compared to $913,208 for the same period of the prior year, primarily due to an increase in research and development expenses as per the terms of a license and option agreement associated with the aforementioned one-time cash payment, as well as the $268,579 of share-based compensation related to the issuance of the options on October 14, 2020.
• Comprehensive loss for the nine-month period decreased by 29% to $531,146 for the period ended February 28, 2021, as compared to a comprehensive loss of $750,944 reported for the same period of the prior year, which was primarily due to a combination of the reasons provided above.
• Total assets for the period ended February 28, 2021 increased by 39% to $1,617,187 from $1,165,686 for the year ended May 31, 2020 and a 119% increase from $740,029 reported for the same period of last year.

Management Commentary

“Based on the comparison of this period’s results to our quarterly results at this time last year, as well as the comparison on a year-to-date basis, I and the Board of Directors are pleased with the improved performance of G6 across all key metrics. Consumers have responded positively to our product offering and our employees continue to work hard to achieve our goals,” said Daniel Stolyarov, President & CEO of G6 Materials Corp. “Looking ahead, I am excited about the previously announced acquisition of GX Technologies and deploying the proceeds from our successful equity financing to execute on our current growth projects and add value to the company through our new assets,” added Mr. Stolyarov.

Summary of Key Quarterly Financial Measures (with 3Q20 shown for year-over-year comparison purposes)

Corporate Highlights (all amounts expressed in US dollars unless otherwise noted)

• Closing of $5.4 Million Non-Brokered Equity Financing: On April 12, 2021, the Company announced that it had closed its non-brokered equity financing previously announced on March 15, 2021 (the “Offering”). Pursuant to the Offering, the Company issued 27,071,000 units for gross proceeds of $5,414,200, which was increased due to strong investor demand from an initial target of $5,000,000. Each unit was priced at $0.20 and was comprised of one common share of the Company and one-half of one warrant to purchase a common share of the Company at a price of $0.30 for a period of 2 years from the closing date of the Offering.
  

• Binding LOI to Acquire GX Technologies: On March 15, 2021, the Company announced that it had entered into a letter agreement pursuant to which it intended to acquire all of the issued and outstanding shares of GX Technologies, Inc., in exchange for 25,000,000 common shares of G6 at a deemed price of $0.20 per common share of the Company (the “Transaction”). The Transaction is expected to establish a world-leading research, corporate and project development team focused on the commercialization and industrial-scale production of graphene-enhanced materials and technologies.

• Air Purification Products: As previously announced, the Company’s research team is developing a graphene-based technology for an enhanced air filtration system for which a provisional patent application was filed on May 8, 2020 to protect the intellectual property rights. The company is working with a manufacturer partner overseas to make the air purification equipment to be sold in the US market. The Company is engaged with an independent testing laboratory to perform various tests of the products being developed, including the safety certification, performance testing as well as microbiological testing.
  

• Debt Facility: On September 11, 2020, the Company entered into a loan agreement with an arm’s length third-party company, pursuant to which the Company can draw up to an aggregate principal amount of $1,500,000 dollars on an unsecured basis for 6 months. On December 21, 2020, the Company had drawn $250,000 from the loan. As at December 21, 2020, the Company had drawn $250,000 from the loan.  Subsequently, on April 5, 2021 the Company repaid the $250,000 principal amount of the loan, the commitment fee of $25,000 and accrued interest of $10,618.