Zentek Ltd. Receives Favorable Judgment in Long-Standing Litigation

Rhea-AI Summary

Zentek (NASDAQ:ZTEK) won a favorable judgment in Ontario Superior Court on March 12, 2026, dismissing substantially all claims in companion litigation tied to the 2018 removal of founder Aubrey Eveleigh.

The Court denied monetary claims originally exceeding $6 million, refused cancellation of 4.5 million founder shares, and found relevant statements factually accurate.

Positive

• Claims denied totaling originally over $6 million
• Court confirmed 4.5M founder shares were properly issued
• No monetary awards against Zentek across specified claims

Negative

• Litigation consumed multi‑year management focus since 2018
• Legal process likely incurred unquantified costs despite denied indemnification

Key Figures

Original claims: Exceeding $6,000,000 Success fee claim: $282,500 Severance claims: $1,350,000 +5 more

8 metrics

Original claims Exceeding $6,000,000 Claims originally filed against Zentek

Success fee claim $282,500 Success fee claim denied by Court

Severance claims $1,350,000 Severance claims under President’s agreements denied

Unpaid wages claim $51,748.82 Unpaid wages claim denied

Defamation damages $75,000 Defamation damages claim denied as statements were accurate

Indemnification claim Approximately $194,000 Indemnification costs and disbursements claim denied

Founder shares 4,500,000 shares Court upheld issuance; no cancellation or disgorgement

Founder removal date May 11, 2018 Shareholder meeting that led to litigation

Market Reality Check

Price: $0.6399 Vol: Volume 55,767 is well bel...

low vol

$0.6399 Last Close

Volume Volume 55,767 is well below the 20-day average of 650,618, indicating limited pre-news participation. low

Technical Shares at 0.6399 are trading below the 200-day MA of 0.87 and about 65% under the 52-week high.

Peers on Argus

ZTEK was down 1.86% with light volume while peers were mixed: PDEX up 3.33%, Zjy...

2 Up

ZTEK was down 1.86% with light volume while peers were mixed: PDEX up 3.33%, Zjyl down 17%, MBOT and KRMD modestly lower. Momentum scanner flagged only upside moves in other names, suggesting a stock-specific setup rather than a coordinated sector move.

Historical Context

5 past events · Latest: Mar 09 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Mar 09	PDAC engagement update	Positive	+0.5%	Update on government and First Nations engagement for Albany Graphite.
Mar 04	Pilot program start	Positive	+0.0%	Launch of pilot evaluation with Quality Filters for air filtration media.
Feb 26	Albany strategy update	Positive	+4.9%	Plans to advance Albany toward new PEA and pre-feasibility study.
Feb 25	Nasdaq compliance extension	Neutral	+1.2%	180-day extension to meet Nasdaq $1.00 minimum bid price rule.
Feb 17	Strategic reset	Negative	-12.6%	Strategic refocus and regulatory update tied to three core platforms.

Pattern Detected

Recent company updates, particularly around Albany Graphite and strategy, have generally seen aligned price reactions, with the lone sharp selloff following the February 17 strategic reset.

Recent Company History

Over the last month, Zentek has focused investor attention on its Albany Graphite project, strategic reset, and commercialization efforts. On Feb 17, a strategy and regulatory update with going‑concern context coincided with a -12.63% move. Subsequent Albany and government engagement news on Feb 26 saw a +4.89% reaction. More recently, a Nasdaq bid-price extension on Feb 25, a pilot program announcement on Mar 4, and PDAC engagement news on Mar 9 drew modestly positive to flat moves, framing today’s litigation resolution against a backdrop of ongoing strategic repositioning.

Market Pulse Summary

This announcement reports a favorable court outcome for Zentek, with dismissal of claims originally ...

Analysis

This announcement reports a favorable court outcome for Zentek, with dismissal of claims originally exceeding $6 million and several specific monetary demands, while confirming that 4.5 million founder shares remain valid. It closes a long-standing dispute tied to leadership changes dating back to May 11, 2018. In context of recent updates on Albany Graphite, ZenGUARD™, and Triera, this judgment primarily reduces legal overhang. Investors may watch how management reallocates attention and resources toward executing its strategic roadmap.

Key Terms

fiduciary duty, indemnification

2 terms

fiduciary duty regulatory

"found to be void and unenforceable as a result of breaches of fiduciary duty;"

Fiduciary duty is the legal and ethical obligation of someone who manages money or makes decisions on behalf of others to act honestly, loyally, and in the best financial interest of those people. Think of it like a trusted guardian managing a household budget who must put the family's needs ahead of their own; for investors, it reduces the risk of conflicts of interest, mismanagement, or self-dealing and helps protect their assets and returns.

indemnification financial

"Indemnification claims of approximately $194,000 in costs and disbursements - denied."

A contractual promise to cover losses, expenses, or legal claims that arise from specified events, such as breaches of representations or third‑party lawsuits. For investors, indemnification matters because it shifts potential financial risk and future cash outflows from one party to another, similar to a friend agreeing to pay your bill if you’re sued, and can affect deal value, expected returns, and contingent liabilities on the balance sheet.

AI-generated analysis. Not financial advice.

Ontario Superior Court Dismisses Claims Originally Exceeding $6 Million Against Zentek

GUELPH, ON / ACCESS Newswire / March 13, 2026 / Zentek Ltd. (TSXV:ZEN)(NASDAQ:ZTEK) ("Zentek" or the "Company") announces that the Ontario Superior Court of Justice (Commercial List) has issued its Reasons for Judgment dated March 12, 2026, in the companion actions Eveleigh et al. v. Zenyatta; Zentek v. Eveleigh et al., 2026 ONSC 1510.

Background

The litigation arose following the removal of Aubrey Eveleigh, the Company's founder and former President and Chief Executive Officer, by shareholders at a special meeting held on May 11, 2018. The two companion actions were tried together before Justice Osborne of the Ontario Superior Court of Justice.

Outcome

The Court dismissed substantially all claims advanced by Mr. Eveleigh and his consulting firm, Eveleigh Geological Consulting Inc. Original claims, as filed, exceeded $6 million. At trial, the claims were refined and the Court denied all remaining monetary claims, specifically:

• A Success Fee claim of $282,500 - denied on the basis that the pre-feasibility study required to trigger the payment obligation was never commenced;

• Severance claims totaling $1,350,000 under the President's Agreement and related Memorandum of Agreement - found to be void and unenforceable as a result of breaches of fiduciary duty;

• Unpaid wages of $51,748.82 - denied;

• Defamation damages of $75,000 - denied, with the Court finding the relevant statements were factually accurate; and

• Indemnification claims of approximately $194,000 in costs and disbursements - denied.

With respect to Zentek's claim for cancellation of 4.5 million founder shares and disgorgement of profits, the Court found that the shares had been properly issued and that there was no basis to set aside the issuance.

CEO Comment

"This judgment closes a chapter that has been part of Zentek's history since before I arrived on December 1," said Moe Jiwan, CEO of Zentek. "The Court's decision speaks for itself. What matters now is execution - on Albany, on ZenGUARD^™, on Triera, and on building the foundation this company deserves. We move forward."

About Zentek

Zentek Ltd. is a Canadian intellectual property development and commercialization company advancing a portfolio of graphene-enabled and advanced material technologies across clean air, next-generation materials, and critical minerals. The Company's core platforms are Albany Graphite, ZenGUARD^™, and Triera.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of applicable Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions and estimates that management considers reasonable at the time they are made, but which may prove to be incorrect. Readers are cautioned not to place undue reliance on forward-looking statements. Zentek undertakes no obligation to update forward-looking statements except as required by applicable law. Additional information about Zentek and its business activities is available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov.

For further information:
Mohammed (Moe) Jiwan
Chief Executive Officer, Zentek Ltd.
T: 416-709-8876
E: mjiwan2@zentek.com
W: www.zentek.com

SOURCE: Zentek Ltd.

View the original press release on ACCESS Newswire

FAQ

What did Zentek (ZTEK) achieve in the March 12, 2026 Ontario court ruling?

Zentek obtained dismissal of substantially all claims, removing major monetary exposure. According to the company, the Court denied monetary claims originally exceeding $6 million and refused to cancel 4.5 million founder shares.

Which specific monetary claims against Zentek (ZTEK) were denied by the court?

The court denied the success fee, severance, unpaid wages, defamation, and indemnification claims. According to the company, those included amounts like $282,500 and $1,350,000 among others.

Did the court order cancellation of Zentek's 4.5 million founder shares (ZTEK)?

No, the court found the 4.5 million founder shares were properly issued and refused cancellation. According to the company, there was no basis to set aside the share issuance.

Does the March 2026 judgment remove financial risk for Zentek (ZTEK) from this litigation?

The judgment eliminates the named monetary claims tied to the case, reducing direct liability risk. According to the company, the Court denied all remaining monetary claims and indemnification requests.

How did Zentek management respond to the Ontario court decision for ZTEK?

Management framed the ruling as closure and a chance to refocus on operations. According to the company, leadership emphasized execution on products like ZenGUARD and projects such as Albany and Triera.