Zefiro's preliminary injunction denied by court

Dr. Talal Debs reports ZEFIRO FOUNDER AND FORMER CHAIRMAN REPORTS INITIAL SUCCESS IN NEW YORK LITIGATION A preliminary injunction sought by a related party of Zefiro Methane Corp. before the courts in New York was denied on Feb. 27, 2026. David McGrath, who has worked with the board of directors of the company to seek to entrench the incumbent directors, brought a motion for preliminary injunction in New York on Dec. 23, 2025. The motion was heard Tuesday, Feb. 24, and continued Feb. 27, 2026. After hearing testimony from Dr. Debs and Mr. McGrath and after considering the arguments of counsel, the court denied the motion on Feb. 27, 2026. It did so on the grounds that Mr. McGrath has neither proved a likelihood of success on his claims nor irreparable harm. Dr. Talal A. Debs, founder and director, X Machina Capital Strategies Fund I GP LLC, and X Machina Capital Strategies LP (the concerned shareholders) have filed a motion to dismiss the case. The motion to dismiss has been scheduled for March 19, 2026. It is important to note that the N.Y. litigation was used by the incumbent directors as a pretext for a frivolous investigation into Dr. Debs, which was launched by the incumbent directors at considerable expense to shareholders and was followed by a series of bad faith steps taken by the incumbent directors seeking to entrench themselves. This includes the issuance of 13,214,494 common shares of the company to the company's interim chief executive officer Catherine Flax, Mr. McGrath and Mr. McGrath's brother-in-law (Michael McGavick) on Jan. 27, 2026, the date immediately prior to the record date for the annual general and special meeting of shareholders of Zefiro currently scheduled to be held on March 20, 2026. The concerned shareholders are asking the B.C. Securities Commission at a hearing to be continued on March 3 and March 4, 2026, for remedies against such conduct, including rescinding the issuance of the debt settlement shares or, alternatively, preventing them from being voted at the meeting. Mr. McGrath commenced the N.Y. litigation on Oct. 1, 2025, as part of what the concerned shareholders believe to be a broader attempt to wrest control of XMC and XMST from Dr. Debs. On Oct. 9, 2025, two days after Dr. Debs announced his intention to nominate an alternative slate of directors for election at the meeting and more than four months after terminating him as CEO, the board announced it had resolved to constitute a special committee to investigate his conduct. In the same news release, the board provided a link to Mr. McGrath complaint despite knowing it contained unproven and contested allegations. The special committee retained an external law firm to conduct the investigation. The law firm scrutinized approximately $30,000 (U.S.) of Dr. Debs's expenses. At present, only a single expense claim of less than $600 (U.S.) remains in question. More than four months after announcing the investigation and despite the review having found no material improprieties and consuming a meaningful amount of the company's cash resources, the board has not provided an update on any findings. In fact, in its management information circular filed fewer than three weeks ago, the company made a point of referencing the continuing status of the investigation as a reason not to support the concerned shareholders' nominees for election to the board. Additional information The information contained in this news release does not and is not meant to constitute a solicitation of a proxy within the meaning of applicable securities laws. Shareholders are not being asked at this time to execute a proxy in favour of any resolution that may be considered at the meeting. In connection with the meeting, Dr. Debs may file a dissident information circular in due course in compliance with applicable corporate and securities laws. Notwithstanding the foregoing, Dr. Debs is voluntarily providing the disclosure required under Section 9.2(4) of National Instrument 51-102 (Continuous Disclosure Obligations) in accordance with Canadian securities laws applicable to public broadcast solicitations. The information contained herein and any solicitation made by Dr. Debs in advance of the meeting is, or will be, as applicable, made by Dr. Debs and not by or on behalf of the management of Zefiro. All costs incurred for any solicitation will be borne by XMC provided that, subject to applicable law, XMC may seek reimbursement from Zefiro of its out-of-pocket expenses, including proxy solicitation expenses and legal fees, incurred in connection therewith. Dr. Debs is not soliciting proxies in connection with the meeting at this time. Dr. Debs may engage the services of one or more agents and authorize other persons to assist in soliciting proxies on behalf of Dr. Debs. Any proxies solicited by or on behalf of Dr. Debs may be solicited pursuant to a dissident information circular sent to shareholders, after which solicitations may be made by or on behalf of Dr. Debs, in person, or by mail, telephone, fax, e-mail or other electronic means, as well as by newspaper or other media advertising, or by way of public broadcast, including through press releases, speeches or publications and by any other manner permitted under Canadian securities laws. Dr. Debs is not requesting that shareholders submit a proxy at this time. If and when Dr. Debs commences a formal solicitation of proxies in connection with the meeting, proxies may be revoked by instrument in writing executed by a shareholder or by his or her attorney authorized in writing or, if the shareholder is a body corporate, by an officer or attorney thereof duly authorized or by any other manner permitted by law. As managing partner of XMC, Dr. Debs represents the largest single shareholder of Zefiro, and, together with his personal holdings, has beneficial ownership of, or exercises control or direction over, an aggregate of 20,914,750 common shares, representing 23.12 per cent of the issued and outstanding common shares. In light of a side letter entered into by Mr. Debs, he does not intend to vote 500,000 shares he holds personally. Except as disclosed herein, none of Dr. Debs, XMC or XMST, or any of their associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted on at the meeting other than the election of the directors or the appointment of the auditor. We seek Safe Harbor.