Mr. Raghu Kilambi of Powertap reports

POWERTAP HYDROGEN ANNOUNCES THAT ITS 49% OWNED SUBSIDIARY, PROGRESSUS CLEAN TECHNOLOGIES HAS EXECUTED A LETTER OF INTENT WITH ALKALINE FUEL CELL POWER CORP. FOR CLEAN HYDROGEN JOINT VENTURE PILOT

Powertap Hydrogen Capital Corp. has provided an update and details on Progressus Clean Technologies Inc. entering into a letter of intent with Alkaline Fuel Cell Power Corp. to complete a joint venture (JV) pilot project that aims to provide a solution for natural gas utilities to directly power both residential and commercial businesses. Alkaline Fuel is a diversified investment platform developing affordable, renewable and reliable energy assets and clean technology. The JV is intended to provide proof of concept for each company's technologies and assess the ability to combine various Progressus technologies with Alkaline Fuel fuel cells to serve residential and small building customers across North America. Powertap owns 49 per cent of Progressus.

"The missions and combined vision of AFCP and Progressus are very complementary to one another. By leveraging the strengths of both organizations, we can more efficiently and effectively solve the growing need for innovative hydrogen solutions. The proposed JV pilot project with AFCP is an active step towards progressing hydrogen innovation and combining the suite of technologies that will ultimately be needed for global hydrogen solutions in the future," said Channce Fuller, chief executive officer of Progressus.

Raghu Kilambi, chief executive officer of Powertap, the 49-per-cent parent company of Progressus, added, "We are very pleased with the development of Progressus's business since our initial investment in Progressus as initially announced on July 27, 2021."

Conceptual description of the pilot project

To reduce CO2 (carbon dioxide) emissions around the world, gas distribution companies and municipalities are setting up projects to inject hydrogen into the local gas distribution grid. This gas mixture generally aims to contain up to 20 per cent hydrogen and its use is targeted for residential and commercial buildings.

Alkaline Fuel and Progressus will work together to execute a JV pilot project utilizing technologies from each company to provide in-field proof of concept, generate operational data that can inform continued development and market opportunities, and establish a platform to support future potential growth and additional partnerships. The exact location of the JV pilot project remains under consideration but, initially, North America will be the focus with secondary priority given to potential future pilots in Europe.

Progressus's technology enables the extraction of dilute hydrogen from gas streams, a critical component as utility companies globally increasingly strive to inject hydrogen into natural gas streams. Progressus represents a solution that can extract the hydrogen at high efficiencies, complementing Alkaline Fuel's low-cost combined heat and power alkaline fuel cell and generator development.

The JV pilot project is designed to use the Progressus hydrogen separation technology to efficiently extract hydrogen at high purities from the existing natural gas grid and then convert the purified hydrogen using either Alkaline Fuel's four-kilowatt Micro-CHP or four-kilowatt generator to produce electricity and potentially heat. This project could be put to immediate use in a residential home or commercial building, providing truly zero-emission power. Alkaline Fuel has already identified interest from natural gas and electric utilities and municipalities to pilot the concept.

Combining the technologies from both companies offers an ideal potential solution to support the generation of low-carbon energy that contributes to the world's clean energy transition.

Macroeconomic backdrop

The energy sector currently accounts for approximately three-quarters of global greenhouse gas emissions and is therefore simultaneously capable of averting the worst effects of climate change. To reduce CO2 emissions, gas distribution companies and municipalities are advancing projects that facilitate the injection of hydrogen into the local gas distribution grid as a cleaner energy source. In the last two years alone, there have been more than two dozen hydrogen injection projects announced in the United States with companies continuing to reinforce additional commitments in early 2022. Furthermore, with the passing of the Inflation Reduction Act (IRA), there is massive momentum building for additional investment in clean hydrogen solutions. Beyond the United States, the largest gas utilities around the globe (SoCalGas, Enbridge, ATCO Gas, Snam SpA, Enagas SA and Open Grid Europe, to name a few) are all actively working on projects to inject hydrogen into their natural gas grids. The proposed pilot project would initially cover one extraction system linked to one four-kilowatt Micro-CHP or generator system, with expansion to a larger scale in future pilots designed to provide clean hydrogen and power for multiple residential users or commercial applications.

Corporate update

Further to the company's new release dated July 30, 2021, the company announces that it will issue an aggregate of 4,576,600 common shares at a deemed price of 10 cents per share pursuant to an agency agreement entered into with Mulberry Capital Inc. on Oct. 18, 2021, and July 28, 2021. Mulberry is the company's exclusive agent with the right to arrange, negotiate and obtain representation for sales in the Middle East. The issuance of shares is being made in lieu of a $350,000 (U.S.) cash payment for the first-year anniversary payment due under the agency agreement. The common shares are subject to a four-month-and-one-day hold period from the date of issuance and are subject to the Neo Exchange's acceptance of final filing documents.

On Aug. 17, 2022, the company issued an aggregate of 361,453 common shares at a deemed price of 29 cents per share pursuant to the racing sponsorship agreement with Steinbrenner Racing LLC and Defrancesco Motorsports Inc. The share issuance represented the final payment due for the 2023 sponsorship year. The securities were issued with a four-month-and-one-day hold period that will expire on Dec. 18, 2022.

The company also announces that, pursuant to its shareholder approved restricted share unit (RSU) plan, it granted an aggregate of 13 million restricted share units to consultants of the company on Sept. 16, 2022. The RSUs vested on issuance. The RSUs shall entitle the eligible parties the ability to acquire one common share of the company underlying each such RSU by delivering a notice of acquisition to the company in accordance with the RSU plan for a period of five years from issuance. In accordance with the RSU plan, the RSUs were priced at 8.5 cents based on the previous day's trading price.

About Powertap Hydrogen Capital Corp.

Powertap Hydrogen Capital, through its wholly owned subsidiary, Powertap Hydrogen Fueling Corp., is focused on installing hydrogen production and dispensing fuelling infrastructure in the United States. Powertap's patented solution has been developed over 20 years. Powertap is now commercializing its third-generation blue hydrogen product that will focus on the refuelling needs of the automotive and long-haul trucking markets that lack hydrogen fuelling infrastructure. There are currently under 100 operational publicly available hydrogen stations in the United States, with most of the existing stations purchasing industrial hydrogen from industrial manufacturers and shipping hydrogen to individual stations through tanker trucks.

We seek Safe Harbor.