Mr. Keith Morlock reports

ABOUND DECLARES H2SI POWER INCORPORATED IN MATERIAL DEFAULT OF H2SI LICENSE AGREEMENT

Abound Energy Inc. has declared H2Si Power Inc., Amerada R&D Ltd. and Robert McKenzie in material default of the H2Si technology commercialization and licence agreement dated June 27, 2026, and the related support and guarantee agreement. Among other things, the company alleges that H2Si failed to deliver the technical drawings required to build the first commercial unit, and that Mr. McKenzie concealed from the company that he has been marketing, through another company, SiFusion Energy Inc., technology that the company believes is the H2Si technology, for which it holds an exclusive licence.

Background

As announced on May 7, June 30 and July 31, 2026, Abound obtained exclusive commercialization and licensing rights to the H2Si hydrogen technology under the licence agreement, which closed on July 31, 2026. As consideration, the company issued five million common shares to H2Si, of which one million were delivered at closing and four million are held in escrow under a pooling and escrow agreement, to be released only if the FCU meets specified performance criteria. Under the guarantee agreement, Amerada and Mr. McKenzie guaranteed the performance of all of H2Si's obligations under the licence agreement, as to 30 per cent and 70 per cent, respectively, up to an aggregate of $5-million (U.S.), and Amerada agreed not to directly or indirectly support any alternative licence or disposition of the H2Si technology. Mr. McKenzie is the president of H2Si and the sole director of Amerada.

Material default

On Sept. 21, 2026, the company delivered a notice of material default to H2Si, Amerada and Mr. McKenzie. The company alleges, among other things, that:

• Mr. McKenzie, through H2Si, failed to deliver the technical drawings and specifications required under the licence agreement to build the FCU, despite repeated assurances that they existed, and H2Si's counsel has since confirmed that the technical drawings and specifications for the H2Si technology do not exist.
• H2Si, Amerada and Mr. McKenzie concealed from the company that Mr. McKenzie, as president and chief executive officer of SiFusion, has been marketing technology the company believes to be the H2Si technology, or derived from it, through SiFusion and other entities. SiFusion's website describes the technology as held under exclusive licence from the inventor, refers to the same University of Saskatchewan testing previously announced by the company and describes SiFusion as affiliated with the Amerada group of companies. The company alleges that this conduct breaches Amerada's covenant under the guarantee agreement not to support any alternative licence of the H2Si technology.
• H2Si has failed to enforce and protect its intellectual property in the H2Si technology, as required under the licence agreement, by failing to take any action against Mr. McKenzie or SiFusion. Instead, Mr. McKenzie purportedly moved to remove two H2Si directors who were working on behalf of H2Si to cure the defaults. Both directors have since resigned, leaving Mr. McKenzie and Gary Woycenko as the remaining directors of H2Si.
• H2Si and Mr. McKenzie have failed to cooperate with the company to remedy the defaults.

The company has also notified Amerada and Mr. McKenzie that this conduct falls within the obligations they guaranteed under the guarantee agreement and has delivered a cease and desist demand to SiFusion.

Failure to remedy to date

Since closing of the licence agreement, the company received numerous assurances from H2Si counsel that the required technical drawings and specifications would be provided and that a formal response would be forthcoming. Despite these assurances, the latest response the company has received is an unsigned letter from Mr. McKenzie dated Sept. 22, 2026, and received on Sept. 29, 2026, purportedly on behalf of H2Si, Amerada and Mr. McKenzie, which disputed the notice without remedying the defaults or providing the requested information. Furthermore, Mr. McKenzie has refused to meet with the company since Aug. 13, 2026, failed to engage following delivery of the notice, and failed to provide a valid address for formal service. H2Si has demonstrated a persistent failure to remedy or take meaningful steps toward compliance.

Two H2Si directors had been working with the company to cure the defaults and were the company's principal contacts at H2Si. After Mr. McKenzie purportedly moved to remove them, both directors resigned. Their departure removes the channel through which the company had been working toward a resolution and leaves H2Si's counsel and its two remaining directors, Mr. McKenzie and Mr. Woycenko, as the company's only contacts at H2Si. The company has concluded that these matters are unlikely to be resolved co-operatively and is taking further steps to protect its rights. These developments may affect the commercialization of the H2Si technology under the company's exclusive licence, the shares issued to H2Si and the timing of the FCU.

"Abound entered into this transaction in good faith and secured exclusive rights to the H2Si technology for the benefit of our shareholders," said Keith Morlock, chief operating officer. "We have worked patiently to resolve these matters directly, but recent events have made it clear that more is required. We remain committed to building the first commercial unit, and we will take every step necessary to protect our rights."

Next steps

The company remains committed to completing the FCU, and the steps it is taking are directed toward that objective. The company has not terminated the licence agreement, and is evaluating all remedies available to it, including proceedings against H2Si and claims against Amerada and Mr. McKenzie under the guarantee agreement. The escrowed shares will not be released unless the FCU achieves the specified performance criteria, and the company has asked its transfer agent to place a hold on all shares issued to H2Si. The company's allegations have not been tested in any proceeding. The matters described in this news release are not exhaustive. Additional claims may arise as the company continues its review, and nothing in this news release limits or waives any of the company's rights, claims or remedies, all of which are expressly reserved.

About Abound Energy Inc.

Abound is a clean-energy technology commercialization company building a diversified energy solution platform across ZaeroTex advanced air cathodes, H2Si hydrogen technology and Zaeras long-duration energy storage.

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