Zefiro Methane Improves Balance Sheet with Shares for Debt Settlements

Rhea-AI Summary

Zefiro Methane (OTCQB: ZEFIF) settled $674,846 CAD of debt by issuing 1,533,741 common shares at $0.44 CAD per share on March 27, 2026. The Debt Settlements convert outstanding obligations into equity, reducing cash liabilities and strengthening the balance sheet.

One participant, director/officer Catherine Flax's spouse, settled a promissory note (USD $468,000) and received Debt Shares; this was a related party transaction reviewed by the board with Ms. Flax abstaining. All issued shares are subject to a statutory four-month-and-one-day hold.

Positive

• Eliminated $674,846 CAD of outstanding debt
• Issued 1,533,741 shares to settle obligations
• Converted cash liabilities into equity to improve liquidity

Negative

• Related party transaction involving director/officer spouse
• Issued shares may dilute existing shareholders' ownership
• No 21-day material change report prior to closing

Fort Lauderdale, Florida--(Newsfile Corp. - March 27, 2026) - ZEFIRO METHANE CORP. (Cboe Canada: ZEFI) (FSE: Y6B) (OTCQB: ZEFIF) (the "Company", "Zefiro", or "ZEFI") announced today it has entered into debt settlement agreements (the "Debt Settlements") with two creditors (the "Creditors") to eliminate an aggregate of $674,846 CAD in outstanding debt (the "Debt") at a price of $0.44 CAD per common share.

The Debt Settlements will involve a combination of equity issuances by the Creditors of the amounts owing to them pursuant to the Debt Settlements, the Company will issue an aggregate of 1,533,741 common shares in the capital of the Company (the "Debt Shares").

The Company views these strategic Debt Settlements as a positive step toward strengthening its balance sheet and continuing to reduce overall debt obligations.

All common shares issued in connection with the Debt Settlement will be subject to a statutory four month and one day hold period, in accordance with the policies of the CBOE Canada Exchange ("CBOE") and applicable securities laws.

Catherine Flax, who is a director and officer of the Company, is the spouse of one of the Creditors who participated in the foregoing transactions, and settled USD $468,000 in outstanding debt under a promissory note (the "Promissory Note") dated September 1^st, 2023. 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 ("MI 61-101"). As a result, the settlement of the debt, including by way of issuance of such Debt Shares to Ms. Flax, is 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(1)(a)) as the fair market value of the portion of the debt settled with Ms. Flax, including by way of issuance of such Debt Shares to Ms. Flax, did not exceed 25% of the Company's market capitalization, as determined in accordance with MI 61-101. The transaction was reviewed and approved by the board of directors of the Company (with Ms. Flax abstaining from participating in the deliberations relating to, and approval of, the transaction). The Company did not file a material change report 21 days before the completion of the transaction as the participation in the transaction by the Creditors, including Ms. Flax, were not settled until shortly prior to closing. Upon completion of this transaction, Ms. Flax holds 8,630,325 common shares of the Company.

About Zefiro Methane Corp.

Zefiro is an Environmental Services Company, specializing in methane abatement. Zefiro strives to be a key commercial force towards Active Sustainability. Leveraging decades of operational expertise, Zefiro is building a new toolkit 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 U.S.-based methane offsets, Zefiro aims to generate long-term economic, environmental, and social returns.

For further information, please contact:

Zefiro Investor Relations
1 (800) 274-ZEFI (274-9334)
investor@zefiromethane.com

Forward-Looking Statements

This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information is often, but not always, identified by the use of words such as "seeks", "believes", "plans", "expects", "intends", "estimates", "anticipates" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. In particular, this news release contains forward-looking information including statements regarding: the issuance of Debt Shares and options pursuant to the Debt Settlements. The forward-looking information reflects management's current expectations based on information currently available and are subject to a number of risks and uncertainties that may cause outcomes to differ materially from those discussed in the forward-looking information. Although the Company believes that the assumptions and factors used in preparing the forward-looking information are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed timeframes or at all. Forward-looking information in this news release is based on the opinions and assumptions of management considered reasonable as of the date hereof,. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information. The forward-looking information included in this news release is made as of the date of this news release and the Company expressly disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required by applicable law.

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/290275

FAQ

What did ZEFIF announce on March 27, 2026 about debt settlement?

Zefiro Methane settled $674,846 CAD of debt by issuing 1,533,741 shares at $0.44 CAD. According to the company, creditors accepted equity in lieu of cash, converting liabilities into common shares subject to a statutory four-month-and-one-day hold.

How much debt did Catherine Flax's related party settlement cover for ZEFIF?

The related party promissory note settled was USD $468,000, converted partly into Debt Shares. According to the company, Ms. Flax is related to a participating creditor and abstained from board approval of the related party transaction.

How will the ZEFIF share issuance affect shareholders and dilution?

Zefiro issued 1,533,741 shares, which may dilute existing holders' percentage ownership. According to the company, the issuance converted debt to equity and all shares carry a statutory four-month-and-one-day hold.

Why did ZEFIF rely on MI 61-101 exemptions for the related party deal?

The company relied on MI 61-101 exemptions because the related portion did not exceed 25% of market capitalization. According to the company, this allowed exemption from formal valuation and minority approval requirements.

Were regulatory hold periods applied to the shares issued in ZEFIF's debt settlement?

Yes; all Debt Shares are subject to a statutory four-month-and-one-day hold period. According to the company, this hold complies with Cboe Canada policies and applicable securities laws.