APPLIED GRAPHITE ISSUES SHARES FOR DEBT

On December 17, 2025, Applied Graphite Technologies Corporation ("AGT" or "the Company") announced it will issue 640,962 common shares at a deemed price of C$0.06 per share to settle C$38,458 in outstanding debt owed to Manning Elliott LLP. This share issuance is subject to the approval of the TSX Venture Exchange and the shares will have a four-month hold period.

This news is routine for a cash-strapped junior exploration company but carries a negative undertone. While settling a minor debt of C$38,458 is not material in itself, the method—issuing shares instead of paying cash—is a clear indicator of the company's precarious financial position.

A review of the historical financial statements confirms this. The most recent financials for the period ending September 30, 2025, showed a cash balance of only C$127,238. The company's net cash outflow from operating activities for the first nine months of 2025 was C$510,679, averaging a burn rate of approximately C$57,000 per month. At this rate, the company was on track to exhaust its cash reserves by the end of 2025 or very early 2026.

This debt settlement is a necessary measure to preserve the remaining cash for essential operations at its Queens Mine Complex project. However, it is dilutive to existing shareholders and occurs at a price near the stock's all-time low, which is destructive to shareholder value. The action confirms that the company's immediate priority is survival, and it signals that a more substantial, and likely highly dilutive, financing round is imminent. This is not news that will attract new investors; it is a signal of financial distress.

The company's financing history in 2025 further supports this view. After announcing a convertible note offering in early July, AGT quickly pivoted to a standard equity placement, suggesting the initial attempt failed. They then struggled to fill the amended C$1 million offering, ultimately closing on only C$669,000 in August. This pattern demonstrates weak market appetite for the company's stock, even at depressed prices. This shares-for-debt transaction is another chapter in the same story of financial struggle.

Applied Graphite Technologies is a junior mineral exploration company focused on its flagship Queens Mine Complex (QMC) in Sri Lanka. The project is centered on vein graphite, which is naturally high-grade (purported +95% carbon) and may not require the extensive primary processing typical of flake graphite. The company claims this graphite has performed well in tests for lithium-ion battery anodes with a superior ESG footprint compared to synthetic graphite. The project is at an early exploration stage with no defined mineral resource. AGT holds a 90% interest in the project. The properties are located on private land. The financials do not specify if the properties are royalty-free.