G6 Materials Reports Financial Results for the Second Fiscal Quarter of 2022

a technology company creating value by developing innovative graphene-based solutions, is pleased to announce that it has filed its unaudited financial results for the second quarter of the fiscal year ending November 30, 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 three-month period ended November 30, 2021 reached $320,204, a slight 6% decrease from the $341,134 reported for the previous three-month period, which was primarily due to the delayed delivery of finished goods due to supply chain disruptions.
• Gross profit for the three-month period ended November 30, 2021 was $39,383, a 77% decrease from the $171,482 reported for the previous three-month period, due to a significant increase in the shipping costs of direct materials and customer shipments mainly from the import of air purification materials and wellness products that resulted in increased costs of goods sold.
• Net loss for the three-month period ended November 30, 2021 decreased by 7% to $610,265, as compared to a net loss of $571,194 reported for the previous three-month period, primarily as the result of increases in the cost of goods sold, professional fees, marketing and investor relations expenses and office and administration expenses, which was partially offset by the sale of intellectual property, consulting services, air purification products and hygiene products.
• Total assets for the period ended November 30, 2021 increased by 22% to $7,215,304 from $5,912,649 for the period ended May 31, 2021.

Management Commentary

“Despite the supply chain challenges that affected our second quarter financial results, we have pivoted the Company to better deal with the situation by opening a new base of operations in California, closer to the largest container import terminals on the west coast and near to our major distributors,” said Daniel Stolyarov, President & CEO of G6 Materials Corp. “Our team is excited to have received ISO-9001 Certification for our New York facility late in 2021, which was required in order to secure an exclusive five-year supply agreement. This advancement, along with an exciting research project with the US Army Corps of Engineers, is a great way to begin 2022 and continue the evolution of G6 Materials for the benefit of our shareholders and stakeholders,” added Mr. Stolyarov.

Summary of Key Quarterly Financial Measures

(all amounts expressed in US dollars unless otherwise noted, with 2Q21 shown for year-over-year comparison purposes)

Subsequent Highlighted Events (all amounts expressed in US dollars unless otherwise noted)

• New Base of Operations in California: On December 1, 2021, the Company announced that its wholly owned subsidiary, Graphene Laboratories, Inc., is opening new location in Cerritos, California. The new location is a 3,895 square foot office and warehouse facility located at 16220 Manning Way in Cerritos, California, and will be mainly used as a distribution center for the Company’s products. In addition, the Company has also engaged the services of a California-based third-party logistics company to increase its distribution capacity.

• ISO 9001 Certification and Exclusive 5-Year Supply Agreement with Global Microconnector Company: On December 14, 2021, the Company announced that its wholly owned subsidiary, Graphene Laboratories, Inc., recently received ISO 9001 certification (“ISO 9001”) for its manufacturing facility in Ronkonkoma, New York. Obtaining ISO 9001 was a prerequisite for G6 to enter into an exclusive five-year supply agreement with a global microconnector company headquartered in Europe. Although the terms of the agreement are confidential, the Company’s client is well known in the design, manufacture and sale of flexible printed circuits. Pursuant to the terms and conditions of the agreement, G6 shall supply its products for a variety of smartcard applications.

• Testing Services Agreement with the U.S. Army Engineer Research & Development Center: On January 17, 2022, the Company announced that its wholly owned subsidiary, Graphene Laboratories, Inc., had entered into a Testing Services Agreement with the U.S. Army Engineer Research & Development Center in Vicksburg, Mississippi. The Company will assess the ability of graphene oxide materials to solve environmental challenges through the adsorptive removal of contaminants.