Ms. Catherine Flax reports

ZEFIRO METHANE STRENGTHENS BALANCE SHEET BY ELIMINATING USD $1,790,000 IN DEBT AND SECURING USD $447,500 IN ADDITIONAL LIQUIDITY

Zefiro Methane Corp. has entered into loan satisfaction agreements with three creditors to eliminate an aggregate of $1.79-million (U.S.) in outstanding debt pursuant to a secured loan received by a subsidiary of the company from the creditors in May, 2025, and add approximately $447,500 (U.S.) in cash to the balance sheet.

Pursuant to the loan satisfaction agreements, the creditors agreed to exercise an aggregate of 10.79 million common equity warrants previously issued by the company to the creditors in May, 2025. Seventy-five per cent of the aggregate exercise price of the warrants was satisfied through a dollar-for-dollar set-off against principal amounts owing by Zefiro to the creditors under the secured loan, and the remaining 25 per cent of the aggregate exercise price of the warrants (approximately $447,500 (U.S.)) was paid by the creditors to Zefiro in cash.

After giving effect to the application of the set-off amount, the remaining 25 per cent of the aggregate principal amount of the secured loan owing to the creditors was settled through the issuance of an aggregate of 1,409,589 common shares in the capital of Zefiro at a deemed price of 44 cents per share. In addition, Zefiro issued an aggregate of 1,014,904 common shares at a deemed price of 44 cents per share to the creditors, representing the interest (18 per cent per annum) that would otherwise have accrued and been payable to the creditors if their portion of the secured loan had remained outstanding until maturity (such shares, together with the equitization shares, being the debt shares).

The company intends to use the approximately $447,500 (U.S.) raised from the exercise of the warrants to retire other near-term debt and for general working capital purposes.

As a result of this transaction, the company will reduce 2026 debt maturities by approximately 64 per cent.

The $690,000 (U.S.) principal amount of the secured loan provided by a fourth creditor, and 4.16 million common equity warrants of the company issued such creditor, in May, 2025, remain outstanding.

"Given my confidence in the continued growth and success of Zefiro, I am participating alongside other loan holders in funding the exercise of equity warrants and equitizing my remaining debt," said Zefiro chief executive officer Catherine Flax.

She continued: "Today's transaction marks another meaningful step in Zefiro's turnaround. The company remains solely focused on the execution of Zefiro's stated goals -- namely, growing our core operating businesses and continued debt reduction."

The company views the completion of the transactions under the loan satisfaction agreements as a positive step toward strengthening its balance sheet and reducing its overall debt obligations that are due in 2026.

The debt shares issued pursuant to the loan satisfaction agreements will be subject to a statutory four-month-and-one-day hold period in accordance with applicable Canadian securities laws.

Catherine Flax, who is a director and officer of the company, is one of the creditors who participated in the foregoing transactions pursuant to a loan satisfaction agreement, and settled $800,000 (U.S.) in principal amount and $144,000 (U.S.) in future interest under the secured loan, including by way of issuance by the company of 1,083,573 debt shares to Ms. Flax. Ms. Flax is a related party of the company within the meaning of Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions). As a result, the settlement of her portion of the secured loan, including by way of issuance of such debt shares to Ms. Flax, is considered to be a related-party transaction, as such term is defined in MI 61-101. The company relied on exemptions from the formal valuation and minority approval requirements of MI 61-101 (pursuant to subsections 5.5(a) and 5.7(1)(a)) as the fair market value of the portion of the secured loan settled with Ms. Flax, including by way of issuance of such debt shares to Ms. Flax, did not exceed 25 per cent of the company's market capitalization, as determined in accordance with MI 61-101. The transaction was reviewed and approved by the board of directors of the company (with Ms. Flax abstaining from participating in the deliberations relating to, and in the approval of, the transaction). The company did not file a material change report 21 days before the completion of the transaction as the terms of the loan satisfaction agreements and the participation in the transaction by the creditors, including Ms. Flax, were not settled until shortly prior to closing. Upon completion of the transactions provided in her loan satisfaction agreement, Ms. Flax holds 7,132,448 common shares of the company.

About Zefiro Methane Corp.

Zefiro is an environmental service company, specializing in methane abatement. Zefiro strives to be a key commercial force toward active sustainability. Leveraging decades of operational expertise, Zefiro is building a new tool kit to clean up air, land and water sources directly impacted by methane leaks. The company has built a fully integrated ground operation driven by an innovative monetization solution for the emerging methane abatement marketplace. As an originator of high-quality United States-based methane offsets, Zefiro aims to generate long-term economic, environmental and social returns.

We seek Safe Harbor.