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Pegasus Mercantile Announces Debt Settlement

Vancouver: May 13, 2025 - Pegasus Mercantile Inc. (CSE: LOAN) (OTC: XTCYF) ("the "Company") announces that it has agreed to settle an aggregate of CA$347,631,27 in debt through the issuance of restricted common shares.

The Company has agreed with certain of its creditors to issue an aggregate of 1,738,156 restricted common shares (the "Settlement Shares") to such creditors in exchange for outstanding accounts payable (the "Shares for Debt Transaction") in the aggregate amount of CA$347,631.27 (the "Debt") owing to certain creditors (the "Creditors"). The Settlement Shares are being issued at a deemed price of $0.20, in accordance with the policies of the Canadian Securities Exchange (the "CSE"). The Company is completing the Shares for Debt Transaction to improve its financial position by reducing its existing liabilities.

As part of this debt settlement, Pegasus entered into a Settlement and Release Agreement with a previous advisor to the Company for CA $59,118.82, detailed and filed by the Company in the CSE April Form 7. The Company will issue an aggregate of 98,531 restricted common shares to settle CA$19,706.27, a portion of this outstanding debt. The remaining balance will be paid in equal monthly installments of $2,189.59 over a period of 18 months.

The restricted securities issued in connection with the Debt Settlement will be subject to a statutory hold period of four months plus a day from the date of issuance in accordance with applicable securities legislation.

Pursuant to the policies of the Canadian Securities Exchange, the Debt Settlement will close five business days from the date of this press release. The Shares for Debt Transaction remains subject to CSE acceptance.

About Pegasus Mercantile Inc.:

Pegasus is a prospect generator that provides high growth companies with technology, financial, operational, and management assistance in the fast growing market for global wellness products and novel consumer goods and services.

For information visit website: www.pegasusmercantile.com

Contact Meris Kott, CEO (561) 212-3323 or email to info@pegasusmercantile.com

Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release. Certain statements contained in this release may constitute "forward-looking statements" or "forward-looking information" (collectively "forward-looking information") as those terms are used in the Private Securities Litigation Reform Act of 1995 and similar Canadian laws. These statements relate to future events or future performance. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated", "anticipates" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward- looking information and are based on the Company's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. The forward-looking information contained in this release is made as of the date hereof and the Company is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward- looking information contained herein.