Mr. Talal Debs reports

ZEFIRO SUBSIDIARY SUCCESSFULLY ARRANGES SECURED LOAN TO RESOLVE ITS RECENTLY ANNOUNCED PROMISSORY NOTE MATTER

Zefiro Methane Corp. has obtained a $2.48-million (U.S.) secured loan for the principal purpose of curing a payment-related discrepancy which led to the issuance of a notice of failure to pay as announced in Zefiro's May 14, 2025, press release. The notice was issued in connection with a $2-million (U.S.) promissory note, which was created in conjunction with the May 12, 2023, acquisition of Plants & Goodwin Inc.

In Zefiro's May 14, 2025, press release, the company also announced its consolidated financial results for the fiscal quarter that ended March 31, 2025. Key highlights from these results are summarized below. All figures are in U.S. dollars unless otherwise specified.

• Sequential growth of gross profit by 73.7 per cent from approximately $600,000 in Zefiro's previous fiscal quarter (ended on Dec. 31, 2024, referred to herein as second quarter fiscal 2025) to approximately $1-million of gross profit for third quarter fiscal 2025;
• Revenue of $6.9-million for third quarter fiscal 2025; although revenue for this quarter was 8.7 per cent lower than the $7.5-million in revenue earned during second quarter fiscal 2025, maintaining a comparable level of revenue during third quarter fiscal 2025 (calendar months of January, February and March, 2025) demonstrates Zefiro's resilience during what is historically slow season in the environmental remediation industry; additionally, Zefiro substantially maintained its revenue levels in the midst of wide-scale economic and federal policy volatility that caused slowdowns across multiple sectors for companies of all sizes throughout early 2025;
• It should also be noted that Zefiro achieved 73.7-per-cent gross profit improvement between second quarter fiscal 2025 and third quarter fiscal 2025, despite 8.7-per-cent-lower revenue for third quarter fiscal 2025; this reflects optimization of the company's operations and key reductions to its overhead expenses without impacting performance;
• The first three quarters of Zefiro's 2025 fiscal year had combined revenue of $24.4-million, an increase of approximately 5 per cent over the first three quarters of Zefiro's 2024 fiscal year, which had combined revenue of $23.4-million; this sustained performance exhibits continued growth of Zefiro's core operations.

Please refer to Zefiro's public filings on SEDAR+ for all details from recent earnings reports.

Zefiro founder and chief executive officer Talal Debs commented: "Zefiro's management team is proud to have taken swift action to align the necessary resources for rectifying the discrepancy which led to the notice that was issued last week. As our industry's landscape stabilizes following economic and federal policy volatility, I believe that we are poised to continue with ramping up our performance with an ever growing docket of environmental remediation work from government agencies and private landowners."

Zefiro has issued 14.95 million warrants to the lenders in conjunction with the $2.48-million (U.S.) secured loan, which was advanced by such lenders to Zefiro Methane Holding LLC, a subsidiary of Zefiro. The secured loan will carry a term of 18 months and accrue interest at a rate of 18 per cent per annum, provided that it will be repayable at any time at the option of Zefiro. The loan is secured by a pledge of 100 per cent of Zefiro Methane Holding's holdings of Plants & Goodwin common stock. The principal use of proceeds of such loan will be to repay a $2-million (U.S.) promissory note held by Stephen Plants, which was issued to Mr. Plants in connection with Zefiro's prior acquisition of Plants & Goodwin in 2023. Such warrants have been issued with a strike price of 23 Canadian cents per Zefiro common share, representing the closing price of the Zefiro common shares on May 22, 2025, and carry a three-year term.

Catherine Flax, who is a director of the company, is one of the lenders and subscribed for $800,000 of the principal amount of the loan and 4.82 million of the 23-Canadian-cent warrants. Ms. Flax is a related party of the company within the meaning of Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions). As a result, the subscription by Ms. Flax of such portion of the loan and of such warrants is each considered to be a related-party transaction as such term is defined in MI 61-101. The company relied on exemptions from the formal valuation and minority approval requirements of MI 61-101 (pursuant to subsections 5.5(a) and 5.7(a)) as the fair market value of the portion of the loan and the warrants subscribed by, and the consideration received from, Ms. Flax did not exceed 25 per cent of the company's market capitalization, as determined in accordance with MI 61-101. The transaction was reviewed and approved by the directors of the company (with Ms. Flax abstaining). The company did not file a material change report 21 days before the completion of the transaction as the company needed to complete the transaction on an expedited basis.

About Zefiro Methane Corp.

Zefiro is an environmental service company, specializing in methane abatement. Zefiro strives to be a key commercial force toward active sustainability. Leveraging decades of operational expertise, Zefiro is building a new tool kit to clean up air, land and water sources directly impacted by methane leaks. The company has built a fully integrated ground operation driven by an innovative monetization solution for the emerging methane abatement marketplace. As an originator of high-quality United States-based methane offsets, Zefiro aims to generate long-term economic, environmental and social returns.

We seek Safe Harbor.