Mr. Michael Smith reports

HERCULES ANNOUNCES CLOSING OF SHARES FOR DEBT TRANSACTION

Hercules Resources Corp. has closed the share-for-debt transaction previously announced on Oct. 10, 2025. The company has settled an aggregate of $236,875 in outstanding indebtedness through the issuance of common shares of the company.

Pursuant to the debt settlement, the company has issued a total of 789,583 common shares at a price of 30 cents per share to three creditors. The three creditors include Michael Smith, the company's chief executive officer and a director, Equitas Capital Corp., an arm's-length consultant to the company, and Kingfisher Consulting Ltd., a company controlled by the chief financial officer of the company.

Related party transactions

The debt settlement with Mr. Smith and Kingfisher Consulting constitutes a related party transaction as defined in Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The company is relying on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a), respectively, as the fair market value of the subject matter of the transaction, and the consideration paid, does not exceed 25 per cent of the company's market capitalization.

Equitas Capital Corp. is an arm's-length party, and the company confirms that Equitas Capital is a consultant and the issuance of shares to Equitas Capital Corp. qualifies for use of the consultancy exemption under applicable securities laws.

The company confirms that none of the parties to the debt settlement hold more than 10 per cent of the company's issued and outstanding shares as a result of the debt settlement. The debt settlement is considered a related party transaction for the purposes of Canadian Securities Exchange Policy 6. Independent directors of the company reviewed and approved the debt settlement.

The settlement shares issued to Mr. Smith and Kingfisher Consulting are subject to a hold period under applicable securities laws, including CSE policy.

We seek Safe Harbor.