Mr. Ken Berg reports

DIVERGENT ENERGY SERVICES ANNOUNCES CORPORATE UPDATE AND REVIEW OF STRATEGIC ALTERNATIVES

Divergent Energy Services Corp. has provided a corporate update.

As previously disclosed on Nov. 17, 2023, and Dec. 13, 2023, a customer of the company that accounts for approximately 80 per cent of the company's recent sales continues to experience a material slowdown in its business due to low natural gas prices. The customer, which is undergoing a restructuring and sales process, has informed the company that it continues to prioritize payments to certain critical infrastructure vendors such as power, compression and pipeline companies over Divergent, and as such Divergent has not received any payments during 2024 and has unpaid invoices dating back to July, 2023.

Although the company continued to perform work for its other customers, the revenue generated in 2024 has been insufficient to cover the costs of continuing operations. The resulting uncertainty has caused the resignation of a number of key employees in Divergent's United States operating subsidiary, Extreme Pump Solutions LLC. Extreme has entered into and completed an agreement to sell certain non-core assets for proceeds of $140,000 (U.S.) in order to generate cash flow while the company continues to wait on its key customer to re-engage its services and to review all other strategic alternatives that may be available.

The company's evaluation of strategic alternatives could result in a sale of the company, a sale of a material portion of the company's assets, a merger, business combination or a corporate reorganization, among other alternatives. The company may also seek to obtain value for its tax losses and/or outstanding receivables.

The company does not intend to disclose developments with respect to the strategic review process unless and until the board of directors has approved a definitive transaction or strategic option, unless otherwise required by law or disclosure of which is deemed appropriate. The company cautions that there are no guarantees that the strategic review will result in a transaction or if a transaction is undertaken, as to its terms or timing.

About Divergent Energy Services Corp.

Headquartered in Calgary, Alta., Divergent provides artificial lift products and services for the water, gas and oil industries through its wholly owned subsidiary Extreme Pump Solutions LLC.

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