Zefiro Methane Strengthens Balance Sheet by Eliminating USD $1,790,000 in Debt and Securing USD $447,500 in Additional Liquidity

Executive Summary

• Zefiro Methane Corp. entered into Loan Satisfaction Agreements with three creditors, eliminating $1.79 M of outstanding debt and adding approximately $447,500 in cash to the balance sheet.
• The settlement involved the exercise of 10,790,000 warrants, issuance of ~2.42 M common shares at a deemed price of CAD $0.44, and a cash payment of $447,500 from the creditors.
• The transaction reduces Zefiro’s 2026 debt maturities by roughly 64% and provides cash to retire near‑term debt and fund working capital.

Key Details

• Debt Eliminated: $1,790,000 aggregate principal on a secured loan originated May 2025.
• Warrant Exercise: Creditors exercised 10,790,000 common equity warrants; 75% of the exercise price was set‑off against loan principal, 25% (≈$447,500) paid in cash to Zefiro.
• Equitization Shares Issued: 1,409,589 common shares at CAD $0.44 per share issued to settle the remaining 25% of the loan principal.
• Debt Shares Issued: 1,014,904 common shares at CAD $0.44 per share representing accrued interest (18% p.a.) that would have been payable had the loan remained outstanding.
• Total Shares Issued: Approximately 2,424,493 common shares issued as part of the settlement.
• Cash Proceeds Use: $447,500 to retire other near‑term debt and for general working capital purposes.
• Debt Maturity Impact: Reduces 2026 debt maturities by ~64%.
• Remaining Obligations: A fourth creditor still holds a $690,000 principal loan and 4,160,000 warrants outstanding.
• Related Party Transaction: CEO Catherine Flax, also a creditor, settled $800,000 principal and $144,000 future interest via issuance of 1,083,573 Debt Shares; transaction exempted from MI 61‑101 valuation/minority approval thresholds.
• Hold Period: Debt Shares subject to a statutory four‑month plus one‑day hold period under Canadian securities law.

Notable Quotes

“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,” – Catherine Flax, CEO & Director
“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.” – Catherine Flax

All non‑material boilerplate, forward‑looking statements, and company background have been omitted for brevity.