Mr. Don Currie reports

HILLCREST ENERGY TECHNOLOGIES PROVIDES SHAREHOLDER UPDATE ON 2026 COMMERCIALIZATION PLANS

Hillcrest Energy Technologies Ltd. has provided shareholders with an update on recent strategic developments and key commercialization milestones expected in 2026.

"As we enter 2026, Hillcrest stands at a pivotal inflection point where years of technology development are translating into tangible commercial opportunities across multiple high-growth sectors," said Don Currie, chief executive officer of Hillcrest Energy Technologies. "Our strategic collaboration with Pasqua First Nation and Apeiron Resources, combined with successful completion of our financing, provides both the resources and market access to accelerate commercialization of our ZVS technology across Canada while we continue to advance opportunities in automotive and data centre sectors globally."

Strategic foundation established

In October, 2025, Hillcrest announced a collaboration with Pasqua First Nation and Apeiron Resources Ltd. to establish an indigenous-majority-owned entity focused on commercializing Hillcrest's zero-voltage switching power conversion technology throughout Canada. The structure contemplates creating a framework to market, distribute, sell and potentially manufacture ZVS products across energy storage systems, artificial intelligence data centres, remote microgrids and critical infrastructure applications.

PFN's investment of $3-million directly into Hillcrest demonstrates confidence in both the technology and the business model. The collaboration is actively pursuing additional operating capital through government grants and qualified investment entities, with the goal of creating non-dilutive financing pathways to support commercialization activities in the Canadian market.

Last week, Hillcrest closed the final tranche of its private placement offering, raising total gross proceeds of approximately $4.4-million through the cash offering and settling approximately $2.8-million in debt. The financing strengthens the company's balance sheet to support further development of ZVS technology, marketing and investor relations activities, retirement of existing accounts payable, and general working capital.

"The strategic investment from Pasqua First Nation reinforces the value of our collaborative approach to commercializing ZVS technology," added Mr. Currie. "Combined with the successful retirement of debt, we're now positioned to accelerate development and deliver on the commitments we've made to our shareholders and partners."

Building on 2025 progress

Throughout 2025, Hillcrest completed extensive validation testing with multiple automotive original equipment manufacturers and Tier 1 suppliers, demonstrating measurable performance advantages in real-world automotive applications. These technical validations have translated into advanced commercial conversations with several global entities, exploring pathways to monetize ZVS technology in the automotive sector.

2026 commercialization focus

With technology validation complete and strategic collaborations in place, 2026 represents a pivotal year for accelerating commercial efforts.

Grid and data centre applications

The ZVS PCS1000, a 200-kilowatt, 1,000-volt power conversion system, is expected to be ready for customer demonstrations in second quarter 2026. The explosive growth of AI is creating unprecedented demand for efficient power conversion, and the ZVS PCS1000 is expected to be a purpose-engineered solution for 800-volt direct current distribution architectures being standardized by the Open Compute Project, the consortium driving data centre innovation for companies like Meta, Microsoft, Intel and Nvidia.

The 200-kilowatt modular design will scale to 1.2 megawatts and beyond with N+1 redundancy and hot-swap capability for zero-downtime maintenance. Ultralow electromagnetic interference is critical for sensitive computing infrastructure, and superior efficiency will translate directly to operational cost savings. An additional 0.5-per-cent efficiency improvement translates to 500 kilowatts of avoided losses in a 100-megawatt facility, representing the potential for substantial energy and cooling infrastructure savings.

Canada's clean energy market is projected to grow from 115 gigawatts to 149 gigawatts by 2030, with energy storage capacity expected to expand from one gigawatt to 12 to 16 gigawatts by 2035, representing over $140-billion in investment opportunities (source: Renewables Association of Canada, Canadian Renewable Energy Market Outlook 2025). The federal government has committed $93-billion in clean economy investment tax credits through 2034, including up-to-30-per-cent refundable credits for clean technology manufacturing (source: Canada Revenue Agency, Clean Economy Investment Tax Credits).

Canadian market expansion

The collaboration with Pasqua First Nation and Apeiron Resources is expected to position Hillcrest to accelerate market penetration across multiple Canadian sectors. PFN brings established relationships in Saskatchewan's industrial, military and resource sectors, while Apeiron's expertise in indigenous business development and government funding programs accelerates access to capital and market opportunities. The Pasqua First Nation group of companies holds opportunities such as PRO Metal, a subsidiary focused on metal fabrication and manufacturing, creating potential synergies for future Canadian manufacturing of ZVS products.

Indigenous-led collaborations have become increasingly central to Canada's clean energy infrastructure expansion, with indigenous communities participating in nearly 20 per cent of the country's clean electricity infrastructure development (source: Environment and Climate Change Canada, 2025). The Seven Stars energy project, in which PFN is a partner alongside Enbridge and five other indigenous partners, will produce emission-free power for over 100,000 Saskatchewan homes when operational in 2027.

Automotive sector advancement

Hillcrest continues to advance multiple pathways to monetize its ZVS technology in the automotive sector. The company is progressing in joint development and licensing opportunities with several established industry players. The company's Automotive Center of Excellence in Germany, operated through its collaboration with Systematec GmbH, continues to support these continuing efforts.

Market opportunity and technology advantages

The data centre power market is projected to reach $50-billion by 2030 (source: MarketsandMarkets, Data Center Power Market by PR Newswire), driven by AI infrastructure expansion requiring up to 200 kilowatts per rack with ultralow EMI and high-reliability requirements. Battery energy storage systems in the 100-kilowatt-to-one-megawatt range represent a market projected at over $100-billion by 2030 (source: Battery Energy Storage System Market Research Reports), requiring dynamic grid response capabilities and superior efficiency. Emergency power systems represent an $18-billion market by 2030 (source: Emergency Power System Market Research Reports), while portable and mobile power applications over 100 kilowatts represent more than $10-billion in annual market opportunity (source: Portable/Mobile Power Market Research Reports) across remote operations, construction, military and emergency response applications.

The company's ZVS technology delivers performance advantages that create competitive differentiation. Superior efficiency exceeding 99 per cent compares favourably with current inverters on the market operating at 96- to 98-per-cent efficiency. Ultralow electromagnetic interference addresses critical requirements in sensitive applications like data centres and reduces filtering and shielding requirements across many applications. Enhanced power quality through higher switching frequencies enables cleaner waveforms with lower total harmonic distortion while advanced power density through the elimination of switching losses enables more compact installations with up-to-50-per-cent capacitor and 60-per-cent filter size reductions.

Path forward

Hillcrest is well positioned with the financial resources to execute on near-term commercialization priorities. The strategic investment from Pasqua First Nation demonstrates confidence in both the technology and the collaboration structure. The pursuit of additional operating capital through government grants and qualified investment entities creates additional funding pathways to support commercialization activities.

Three key factors differentiate the company's position as it enters 2026: first, proven technology backed by extensive validation that delivers measurable performance advantages across multiple applications; second, diverse market access spanning automotive, data centres, renewable energy and industrial applications reducing dependence on any single sector while creating multiple pathways to revenue generation, and third, strategic collaborations from the indigenous-led initiative with Pasqua First Nation and Apeiron Resources to automotive and grid sector relationships globally accelerating the path from technology to revenue.

The global power conversion market is experiencing convergent growth drivers through electrification mandates, AI infrastructure buildout, renewable energy deployment and industrial decarbonization. Hillcrest's ZVS technology sits at the intersection of all four trends, positioning the company to capitalize on multiple market opportunities as these sectors continue their rapid expansion.

"We're not just ready for 2026. We're positioned to lead," concluded Mr. Currie. "Thank you to our shareholders, partners and team members for your continued support and dedication. Together, we're building the power conversion standard for the next generation of clean energy infrastructure."

Other updates

The company also announces the grant of 7,583,333 restricted shares units of the company to several executives of the company. The RSUs are being granted in relation to performance in 2024 and 2025 performance. The RSUs and any underlying common shares in the capital of the company are subject to a four-month hold pursuant to the policies of the Canadian Securities Exchange.

About Hillcrest Energy Technologies Ltd.

Hillcrest Energy Technologies is a Canadian clean 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 Canadian Securities Exchange under the symbol HEAT, on the OTCQB Venture Market as HLRTF and on the Frankfurt exchange as 7HI.

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