Hillcrest Energy closes first tranche of offering

Mr. Don Currie reports HILLCREST ANNOUNCES CLOSING OF FIRST TRANCHE OF UNIT OFFERING Hillcrest Energy Technologies Ltd. has closed the first tranche of its previously announced offering of units of the company for gross proceeds of $2,656,758 at a price of nine cents per unit, comprising: (i) $764,650 in aggregate gross proceeds raised through the issuance of 8,496,112 units on a private placement basis; and (ii) $1,892,108 in proceeds raised through the issuance of 21,023,424 units in consideration for the settlement of $1,892,108 in debt owing to arm's-length creditors of the company. Each unit consists of one common share in the capital of the company and one common share purchase warrant. As a result, the company issued a total of 29,519,536 common shares and 29,519,536 warrants pursuant to the closing of the first tranche. Each warrant entitles the holder thereof to acquire one common share at an exercise price of 12 cents per common share for a period of 24 months from the date of issuance. The warrants are subject to an accelerated expiry upon 30 business days of notice from the company in the event the common shares trade for 10 consecutive trading days any time after four months from the date of issuance at a volume-weighted average price of at least 36 cents on the Canadian Securities Exchange. In addition to the announcement of the cash offering and debt settlement in the company's news release issued on Oct. 14, 2025, the company had also announced it had entered into a memorandum of understanding with Pasqua First Nation (PFN) and a letter agreement with Apeiron Resources Ltd. to establish an entity to commercialize the company's ZVS technology. Separately and independent of the partnership entity, PFN may invest up to $3-million directly into Hillcrest through the purchase of units in the company. This potential investment in Hillcrest is intended to support the further development and commercialization of Hillcrest's ZVS technology and support general operating needs. PFN's potential investment in Hillcrest is contemplated to occur in a second tranche of the offering, which may also include additional investors and debt settlements. The second tranche of the offering is expected to trigger company securityholder approval requirements pursuant to Section (2)(a)(i)(2) of Policy 4 of the CSE's policies, due to the potential issuance of over 100 per cent of the total number of securities currently outstanding of the company as result of the aggregated offering. The company, however, will rely on the financial difficulties exemption under Section (2)(b) of CSE Policy 4, such that it will not be required to seek or obtain company security approval for the offerings. In this regard, the audit committee of the company, which is composed solely of independent directors of the company, had determined that: (i) the offerings are in the best interests of the company; (ii) the offerings are reasonable in the circumstances; and (iii) it is not feasible to obtain company securityholder approval or to complete a rights offering to the company's existing security holders on the same terms as the offerings. In connection with its reliance on the exemption, no related person (as such term is defined under the policies of the CSE) will participate in the offerings, including that outstanding director fees will no longer be settled pursuant to the debt settlement. "This financing strengthens Hillcrest's financial health by retiring debt and providing fresh capital for the company's continued technology development and general operations," said Don Currie, chief executive officer of Hillcrest Energy Technologies. "This puts Hillcrest in a much stronger position to execute on our business objectives and deliver value to our shareholders." It is intended that the proceeds from closing of the first tranche of the cash offering will be used for further development of Hillcrest's ZVS technology, marketing of its products to potential customers, investor relations activities, retirement of existing accounts payable and general working capital. The securities issued in connection with the offering, including any common shares issuable upon the exercise of the warrants, are subject to a statutory four-month-and-one-day hold period, in accordance with the policies of the CSE and applicable Canadian securities laws. About Hillcrest Energy Technologies Ltd. Hillcrest Energy Technologies is an energy technology company focused on providing advanced power conversion technologies and digital control systems for next-generation powertrains and grid-connected renewable energy systems. From concept to commercialization, Hillcrest is investing in the development of energy solutions that will power a more sustainable and electrified future. Hillcrest is publicly traded on the CSE under the symbol HEAT, on the OTCQB Venture Market as HLRTF and on the Frankfurt Stock Exchange as 7HI. We seek Safe Harbor.