Mr. Dan Sutton reports

SYNTHOLENE ENERGY CORP. ANNOUNCES COMPLETION OF CONCEPTUAL DESIGN REPORT AND TECHNOECONOMIC ANALYSIS

Syntholene Energy Corp. has completed its conceptual design report and integrated technoeconomic analysis for its planned geothermal-integrated effect test demonstration facility.

The report details the world's first integration of high-enthalpy geothermal heat coupled to solid oxide electrolyzer cells to produce low-cost and low-emission hydrogen, the key feedstock to the company's target synthetic hydrocarbon fuel (eFuel) end products.

"This CDR validates 20 years worth of work on thermally integrated high-temperature electrolysis, aspiring to produce energy-dense, high-purity synthetic fuel," said John Kutsch, chief engineer of Syntholene. "The CDR provides the justification for advancing to the next step in commercializing high-temperature electrolysis at scale: the deployment of an effects test in unforgiving real-world environments, using abundant geothermal steam as a low-cost and scalable industrial heat source."

The effect test is designed to operate sufficiently to validate the physical and operational feasibility of geothermal-to-SOEC thermal coupling under real-world field conditions. Once the effect test is completed, the company plans to combine the data resulting from the effect test with the testing data from over 10,000 hours of historic operations from the company's SOEC vendor, Dynelectro ApS.

The cost of hydrogen remains the single most critical determinant of the commercial viability of synthetic aviation fuel. Current green hydrogen production costs of approximately $4 (U.S.) to $6 (U.S.) per kilogram (Curcio) are likely to render power-to-liquid eSAF pathways economically uncompetitive with fossil-derived jet fuel. Syntholene's conceptual design targets a scalable pathway to hydrogen production below $2 (U.S.) per kilogram, with a long-term objective of achieving below $1 (U.S.) per kg through thermal integration.

Technical differentiation

Conventional low-temperature electrolysis typically consumes approximately 65 kilowatt-hours per kilogram H2, and delivers 60- to 70-per-cent electrical efficiency (Berrada et al.). In contrast, high-temperature steam electrolysis using SOEC technology can reduce energy demand to as low as 37 kWh/kg H2. When externally supplied with process heat, SOEC systems can achieve electrical-to-hydrogen conversion efficiencies of 85 to 90 per cent (Wendt et al.).

The company's effect test is designed to validate:

• Novel direct thermal coupling of heat from a geothermal well to an SOEC module without intermediary boilers;
• Stable hydrogen production under dynamic geothermal temperature and pressure conditions;
• Start-up, shutdown and perturbation response of the integrated system;
• Commercial-grade hydrogen flow rate and outlet purity performance.

Syntholene's provisionally patented thermal coupling system is designed to deliver industrial-grade steam at approximately 150 C, aligned with commercial SOEC inlet requirements. Inputs consist of air, geothermal fluid and locally sourced water.

"This conceptual design report presents the most detailed current design of Syntholene's demonstration plant in Iceland," said Jack Williams, head engineer. "It details the scientific reasoning behind the engineering designs, in addition to summarizing procurement strategy and unit economic analysis. Ultimately, it demonstrates our capability to deliver novel production efficiency through our thermal hybrid production process, which we are excited to demonstrate to the world."

Technoeconomic validation

The integration design has been validated using a digital twin constructed in Aspen Plus, incorporating mass and energy balances, temperature flow pressure sensitivity analysis, and control logic simulation.

The technoeconomic analysis indicates that, if scaled, the thermally integrated configuration could materially reduce hydrogen production costs relative to current market benchmarks, with modelled pathways to below $2 (U.S.) per kg and further optimization and economies of scale toward below $1 (U.S.) per kg. There is no guarantee that the targeted cost optimization will be achieved, and actual results could differ from Syntholene's projections.

Strategic implications

The completion of the conceptual design report marks a key technical milestone in Syntholene's development road map. The effect test is intended to empirically validate a new class of thermally integrated eSAF production facilities, leveraging geothermal heat as a structural cost advantage in hydrogen production.

Further updates will be provided as engineering progresses toward field deployment in 2026.

Construction progress

The company continues to advance progress toward the buildout of a geothermal-integrated effect test demonstration facility in Iceland where the effect test is planned to be carried out in due course. To date, the company has engaged a project management firm, advanced discussions with a general contractor candidate, identified a demonstration facility site in Iceland, commenced lease negotiations, submitted permitting applications, and commenced off-site construction and assembly of component parts for the demonstration facility, including the select heat exchanger system and SOEC modules.

The component parts are under construction and assembly at the company's offices in Harvard, Ill., and at service provider facilities in Copenhagen and Los Angeles. These components are modular and are engineered to be transported to the Icelandic demonstration facility site when ready. The company believes that, once the necessary permits, lease and other requirements are in place at the proposed Icelandic site, the modular components parts which are already under way can be integrated efficiently.

The company is aiming to complete the construction of the proposed effect test demonstration facility in Iceland in fourth quarter 2026, after which time the effect test would be initiated. The company is working with the project manager and other professionals to finalize the demonstration facility construction budget and believes that, based on current estimates, the company has sufficient funds to make significant progress toward assembly of core components and site preparation. The actual project financing requirements and the company's future financial position may vary from the current estimates, and the company may require additional financing to complete the construction of the demonstration facility and operation of the effect test.

Achievement of business milestones and deferred consideration shares

As disclosed in Syntholene's listing statement dated Nov. 30, 2025, pursuant to the terms of the securities exchange agreement dated April 25, 2025, as amended and restated on May 1, 2025, and further amended on June 25, 2025, Syntholene is required to issue up to an aggregate of 10.75 million common shares as deferred consideration shares to the former holders of Syntholene Energy Corp. (Delaware), which was acquired in the reverse takeover transaction, upon the achievement of certain business milestones.

The first business milestone, being completion and delivery of the CDR and the corresponding digital twin for the effect test, has been achieved, and an aggregate of 1,397,500 deferred consideration shares are required to be issued on Dec. 10, 2026.

Upon achievement of the second business milestone, being completion of a 1,000-hour effect test on or before Dec. 10, 2028, Syntholene will be required to issue an aggregate of 5,052,500 deferred consideration shares on the later of Dec. 10, 2026, and the date that is 10 days from achievement of this milestone.

Finally, upon achievement of the third business milestone, being the award of one or more non-dilutive grants for aggregate gross proceeds of not less than $20-million on or before Dec. 10, 2028, Syntholene will be required to issue an aggregate of 4.3 million deferred consideration shares on the later of Dec. 10, 2026, and the date that is 10 days from achievement of this milestone.

The deferred consideration shares will be subject to certain resale and escrow restrictions pursuant to applicable securities laws and stock exchange policies. Please refer to the listing statement and securities exchange agreement, copies of which are available on SEDAR+ under Syntholene's profile, for additional details regarding the deferred consideration shares and business milestones.

About Syntholene Energy Corp.

Syntholene is actively commercializing its novel hybrid thermal production system for low-cost clean fuel synthesis. The target output is ultrapure synthetic jet fuel, manufactured at 70 per cent lower cost than the nearest competing technology today. The company's mission is to deliver the world's first high performance, low-cost and carbon-neutral synthetic fuel at an industrial scale, unlocking the potential to produce clean synthetic fuel at lower cost than fossil fuels.

Syntholene's power-to-liquid strategy harnesses thermal energy to power proprietary integrations of hydrogen production and fuel synthesis. Syntholene has secured 20 megawatts of dedicated energy to support the company's coming demonstration facility and commercial scale-up.

Founded by experienced operators across advanced energy infrastructure, nuclear technology, low-emission steel refining, process engineering and capital markets, Syntholene aims to be the first team to deliver a scalable modular production platform for cost-competitive synthetic fuel.

We seek Safe Harbor.