Mr. Brian Williamson reports

JERICHO EXPANDS ENERGY PORTFOLIO WITH AGREEMENT FOR THE ACQUISITION OF HYDROGEN TECHNOLOGY

Jericho Oil Corp. has entered into an agreement for the acquisition of all the assets of Hydrogen Technologies Inc. (HTI). HTI holds robust intellectual property for a breakthrough high-temperature dynamic combustion chamber (DCC) boiler that enables zero-emission hydrogen to generate heat, hot water, high-temperature steam, and combined heat and power (CHP) through a closed-loop process. The closing of the acquisition remains subject to the approval of the TSX Venture Exchange and also the approval of the shareholders of HTI.

HTI's patented zero-emission DCC boiler system aims to decarbonize the nearly $30-billion global commercial and industrial heating industry while providing best-in-class energy efficiencies:

• The traditional water heating, steam generation and CHP market has been powered by fossil fuel for over 100 years, producing harmful carbon dioxide (CO2), nitrogen oxide (NOx) and sulfur dioxide (SO2) emissions, which are increasingly being phased out or eliminated through government-led emission-based performance standards worldwide.
• Globally, 85 per cent of all industrial boilers emit harmful greenhouse gas emissions (GHG) with over 35 per cent of the industrial boiler install base still powered by coal.
• Critically, 37 per cent of all fossil fuels utilized in the U.S. industry today are burned to produce steam, with all the major industrial energy users devoting significant proportions of their fossil fuel consumption to steam production: food processing (57 per cent), pulp and paper (81 per cent), chemicals (42 per cent), petroleum refining (23 per cent), and primary metals (10 per cent):
  • Steam is used in 80 per cent of the electrical generation in the United States.

HTI's DCC can be used for a variety of commercial and industrial applications, generating zero-emission electricity when combined with a turbine genset in CHP applications. The patented DCC technology:

• Was awarded the solar-impulse-efficient-solution label in 2019;
• Requires no air permit, with water as the only byproduct;
• Eliminates all NOx, SOx and CO2 emissions through a closed-loop combustion process;
• Produces at a 30-per-cent-greater efficiency than traditional fossil fuel boilers with a 97-per-cent overall boiler thermal efficiency;
• Critically, the total cost of production (dollars per pound steam) is cost competitive to traditional hydrocarbon boiler systems.

There are large commercial and industrial (C&I) markets, which HTI is specifically targeting with its zero-emission DCC hydrogen boiler. According to market research, the C&I market for boilers represents a $30-billion annual market and is estimated to grow between 5 and 7 per cent per year, over the next seven years, with low- and zero-carbon solutions expected to outpace:

• Commercial markets for heat or hot water as an end use: shopping malls, universities and institutions, airports, hotels, stadiums, hospitals, and government buildings;
• Industrial markets for steam generation as an industrial process end use: refining and petrochemical, pulp and paper, chemical and pharmaceutical, food processing, refrigeration, metals, and mining, among others;
• For combined heat and power applications: utility power generation, energy storage, on-site distributed energy and data centres will be critical markets for a zero-emission DCC solution.

As part of the transaction, Jericho will also be acquiring the highly dedicated and robust technical team from HTI, including its founder, Ed Stockton, and its president, Janet Reiser. Adding Mr. Stockton's technical capabilities and expertise related to the hydrogen market will allow for a seamless transition in building up the DCC boiler's commercial success within the low-carbon-energy portfolio. Prior to founding HTI in 2005, he spent most of his career with Florida Power & Light (now NextEra Energy) focused on low-carbon technologies with direct power plant experience, including equipment start-up, maintenance, due diligence, government relations and regulation promulgation. Ms. Reiser with over 35 years of experience in energy management and engineering, most recently ran the governmental Alaska Energy Authority, and will continue to lead HTI's day-to-day operations and sales efforts.

As consideration for the technology acquisition, Jericho will deliver to HTI 6.7 million shares of Jericho common stock. The shares will be restricted pursuant to agreed-upon milestones related to commercial deployment and technological successes. Jericho will pay the out-of-pocket costs associated with the transaction on behalf of HTI and wind up the entity.

Brian Williamson, chief executive officer of Jericho, stated: "We are excited to announce the acquisition of HTI's patented and novel zero-emission hydrogen technology, and welcome their world-class team. The world is increasingly demanding a transition away from traditional energy sources to low-carbon solutions. HTI's hydrogen solution expands our portfolio to include a technology that will transition one of the largest carbon emitters to a zero-emission energy source. We look forward to receiving the exchange's final approval and updating our shareholders accordingly on our go-forward energy portfolio strategy."

Separate from the transaction, Jericho also announces that it has granted incentive stock options, pursuant to its stock option plan, of 700,000 common shares of the company, to certain directors and officers of the company. The options are exercisable at a price of 45 cents for a period of up to five years.

We seek Safe Harbor.