Vancouver, British Columbia--(Newsfile Corp. - February 5, 2026) - Hillcrest Energy Technologies Ltd. (CSE: HEAT) (OTCQB: HLRTF) (FSE: 7HI) ("Hillcrest" or the "Company") is pleased to announce the execution of a Memorandum of Understanding (MOU) with a leading industrial user to jointly develop customized Zero Voltage Switching (ZVS) inverter solutions for advanced materials processing applications. This industrial development agreement demonstrates the broad applicability of Hillcrest's ZVS technology platform across the Company's target market segments, which collectively represent a combined addressable market exceeding US$180 billion by 2030 (MarketsandMarkets, Battery Energy Storage System Market, 2025).

Industrial Development Agreement

The industrial development agreement represents a significant validation of Hillcrest's ZVS technology versatility beyond grid-scale and automotive power conversion applications. The collaboration will focus on designing, building, testing, and commercializing inverters based on Hillcrest's proprietary ZVS technology, optimized specifically for the partner's advanced materials processing systems.

"This strategic agreement with a major industrial user validates our ZVS technology platform's applicability across diverse demanding applications," said Don Currie, Chief Executive Officer of Hillcrest Energy Technologies. "The partner's advanced processing systems require precise, efficient power conversion with ultra-low electromagnetic interference. Our ZVS technology's superior efficiency exceeding 99%, minimal EMI characteristics, and enhanced power quality make it ideally suited for sensitive industrial applications."

The MOU, effective January 30, 2026, establishes a structured development pathway focused on real-world demonstration and field trials. The collaboration will progress through several defined milestones:

• Application Analysis: Comprehensive identification of all inverter applications within the partner's system design.
• Prototype Development: Progressive design and testing stages from initial prototype through commercial prototype to certified pre-production units.
• Certification Pathway: Clear roadmap to deliver certified, commercial-ready inverter solutions.
• Commercial Production: Establishment of manufacturing capabilities and commercial agreements.

Both parties will contribute technical expertise, resources, and funding to advance the project through its milestones. The industrial partner will provide demonstration and field trial opportunities within their operational systems, enabling real-world validation of performance improvements.

The MOU includes comprehensive provisions protecting each party's background intellectual property while establishing clear ownership of developments arising from the collaboration. Hillcrest retains ownership of ZVS-related improvements, while any jointly developed intellectual property will be jointly owned by both parties.

"The industrial applications for ZVS technology extend far beyond our initial automotive and grid-scale focus," added Currie. "This collaboration demonstrates how our technology can enable innovations across diverse sectors. Each successful deployment creates additional reference applications and validates our technology platform for broader industrial adoption."

ZVS Technology Platform: Market Strategy and Application Focus

The industrial development agreement exemplifies Hillcrest's strategic approach to commercializing its ZVS technology platform across multiple high-value market segments. The Company's current activities focus on applications where ZVS technology delivers measurable performance and cost advantages over conventional power conversion systems.

Hillcrest's 200kW ZVS Grid Power Conversion System prototype (PCS1000) serves as the foundation for the Company's commercialization strategy across seven core application areas. Each application segment benefits from the same fundamental ZVS technology advantages: superior efficiency exceeding 99%, higher power density through smaller and less expensive components, significantly reduced electromagnetic interference, enhanced power quality, and scalable modular architecture.

Seven Core Application Areas

1. Data Centers
The rapid expansion of AI-driven infrastructure is creating unprecedented demand for efficient power conversion systems. Modern AI data centers require up to 200kW per rack. According to MarketsandMarkets' Data Center Power Market report (September 2025), the data center power market is projected to reach US$50 billion by 2030. Hillcrest's 200kW modular building blocks are ideal for megawatt-scale installations with N+1 redundancy requirements, hot-swap capability for zero-downtime maintenance, and scalability to support parallel expansion of up to four units without system redesign.

2. Battery Energy Storage Systems (BESS)
According to MarketsandMarkets' Battery Energy Storage System Market report (2025), the battery energy storage market in the 100kW-1MW range is projected to reach US$106 billion by 2030. Efficient power conversion is critical for maximizing return on investment. The PCS1000 is expected to provide peak inverter efficiency of greater than 99%, significantly reducing energy losses during charging and discharging cycles, while its higher power density could minimize installation footprint and associated costs.

3. Remote Community and Island Microgrids
Remote communities, mining camps, and island microgrids often rely on expensive diesel generation for power. Hillcrest's PCS1000 can enable cost-effective integration of renewable energy sources with battery storage, significantly reducing or eliminating diesel fuel consumption. The PCS1000 is expected to offer superior power quality and reliability, making it particularly suitable for communities where grid connection is prohibitively expensive or technically challenging. Recent utility deployments demonstrate that solar-and-battery microgrids can create significant savings compared to conventional grid extension projects while providing enhanced resilience against natural disasters.

4. Industrial and Commercial Operations
Industrial facilities and commercial buildings represent significant opportunities for deployment of the PCS1000 across multiple applications. Industrial drives and motor controls, process automation systems, precision manufacturing equipment, and facilities infrastructure (lighting, HVAC, security systems) could all benefit from ZVS technology's ultra-low electromagnetic interference and superior power quality. The new industrial development agreement falls within this application category, targeting advanced materials processing systems that require precise power conversion.

Commercial and industrial facilities also face escalating demand charges during peak periods. ZVS-based energy storage systems could enable effective load shaving and peak demand management. The high efficiency of the PCS1000 is expected to maximize usable energy from battery storage during peak demand periods, enabling faster return on investment compared to conventional systems. Enhanced load protection and superior power quality protect sensitive industrial equipment and electronic controls from power quality disturbances.

5. Construction and Infrastructure Projects
According to Allied Market Research's Mobile Power Plant Market report (2024), the portable/mobile power market exceeding 100kW represents more than US$10 billion annually. Construction sites and infrastructure projects increasingly seek alternatives to diesel generators for environmental, operational, and cost reasons. The PCS1000 is expected to offer zero emissions, silent 24/7 operation, and eliminate fuel logistics and costs. Its compact and lightweight design could simplify transportation and deployment across multiple project sites.

6. Emergency Response and Field Operations
Command centers, field hospitals, emergency shelters, and research stations require reliable power in challenging conditions. According to Verified Market Reports' Emergency Power System Market report (2025), the emergency power systems market is projected to reach US$18 billion by 2030, driven by increasing frequency of extreme weather events and natural disasters. The PCS1000 is expected to offer reliability, rapid deployment capability, and ability to operate in harsh environmental conditions, making it well-suited for this fast-growing segment.

7. Military Forward Operating Bases
Military forward operating bases, mobile command centers, and air defense installations face unique power challenges. The PCS1000 can reduce logistical fuel convoys and associated security risks while providing near-zero acoustic signature operation. Its improved system reliability and extended lifespan reduce maintenance requirements and enhance mission readiness.

Development Timeline and Commercial Strategy

Hillcrest is pursuing multiple parallel pathways to revenue generation across industrial, grid-scale, and automotive applications. The industrial development agreement announced today compliments these ongoing commercialization initiatives and the demonstrates the versatility of the Company's ZVS platform technology.

The 200kW ZVS PCS1000 prototype is expected to be ready for demonstration in Q2 2026, and the Company is actively engaging with potential customers and partners across several of these core application areas.

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 Exchange as "7HI". For more information, please visit: https://hillcrestenergy.tech/.

NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATION SERVICES PROVIDER HAS REVIEWED OR ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

FORWARD-LOOKING INFORMATION

Cautionary Statement Regarding "Forward-Looking" Information
Some of the statements contained in this news release are forward-looking statements and information within the meaning of applicable securities laws. Forward-looking statements and information can be identified by the use of words such as "expects," "intends," "is expected," "potential," "suggests" or variations of such words or phrases, or statements that certain actions, events or results "may," "could," "should," "would," "might" or "will" be taken, occur or be achieved. This forward-looking information is provided as of the date of this news release. The forward-looking information reflects our current expectations and assumptions and is subject to a number of known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to be materially different from any anticipated future results, performance or expectations expressed or implied by the forward-looking information. No assurance can be given that these assumptions will prove correct. Forward-looking statements and information are not historical facts and are subject to a number of risks and uncertainties beyond the Company's control. Investors are advised to consider the risk factors under the heading "Risks and Uncertainties" in the Company's MD&A for the year ended Dec. 31, 2024, available at https://www.sedarplus.ca/ for a discussion of the factors that could cause the Company's actual results, performance and achievements to be materially different from any anticipated future results, performance or achievements expressed or implied by the forward-looking information. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, except as may be required by law.

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