TORONTO, March 09, 2026 (GLOBE NEWSWIRE) -- Dr. Talal A. Debs, Founder and Director of Zefiro Methane Corp. (Cboe: ZEFI) (“Zefiro” or the “Company”), today provided an update to Zefiro shareholders on some crucial victories in his drive for change. Key outcomes include the following:  

• The British Columbia Securities Commission (“BCSC” or the “Commission”) dismissed a Cross-Application by Controlling Lender David McGrath who sought to set aside X Machina Sustainable Technologies Inc.’s (“XMST”) rights and block Zefiro’s largest shareholder, X Machina Capital Strategies Fund I LP (“XMC”), from voting at the Company’s upcoming annual general and special meeting on March 20, 2026 (the “Meeting”).
• BCSC denied relief we requested as Concerned Shareholders, but the hearing brought to light deeply flawed governance and disclosure record of incumbent Zefiro directors.
• Hearing proceedings also made it clear that the Concerned Shareholders’ shareholder advocacy through the announcement of a proxy contest drove conflicted management and Controlling Lenders to equitize and/or refinance over US$3 million of the Company’s near-term debt maturities.
  

Dr. Debs announced that the application (the “Application”) before the Commission brought by Dr. Debs, XMST and XMC (collectively, the “Concerned Shareholders”) against Zefiro, its Interim CEO, Catherine Flax (“Flax”), David McGrath (“McGrath”) and Michael McGavick (“McGavick” together with Flax and McGrath are referred to as the “Controlling Lenders”) was dismissed. The Commission also dismissed a cross-application made by McGrath to restrain Dr. Debs from voting certain common shares of Zefiro (“Common Shares”) he holds as well as the Common Shares held by XMST and XMC, which cross-application was previously partially stayed by the Commission (the “Cross-Application”). The Commission is not expected to provide reasons for its decision in the near term.

Dr. Debs commented, “In my view the great benefit of public markets is that they provide an avenue for genuine transparency and the ability to hold incumbent management to account. XMC intends to demand this of Zefiro’s Management, Board and related party investors like the Controlling Lender David McGrath, whether this relates to disclosures, decisions on financing or strategic transactions and combinations. We are thankful that the BCSC took the time to hear our application which has led to greater transparency for Zefiro’s shareholders.”

Dr. Debs also announced that XMST intends to enforce its rights under its investor rights agreement with Zefiro, dated June 6, 2023 (the “Investor Rights Agreement”) to acquire 1,386,184 Common Shares and warrants and options to acquire 6,096,481 Common Shares (or approximately 7.63% of the issued and outstanding Common Shares on a partially diluted basis).

Application Brought to Light Zefiro’s Record of Poor Governance and Disclosure

The Application challenged the issuance of 13,214,494 Common Shares (the “Debt Settlement Shares”) to Flax, McGrath and McGrath’s brother-in-law (McGavick) on January 27, 2026, the date immediately prior to the record date for the Meeting, at which a requisition made by the Concerned Shareholders will be dealt with along with normal course annual meeting matters. Although the Application was dismissed, it was beneficial to shareholders in that it unearthed troubling governance and disclosure practices of the incumbent directors:

• Poor Governance Regarding Issuance of Debt Settlement Shares: The transaction related to the Debt Settlement Shares was negotiated on behalf of the Company by its CFO (with minimal oversight from the Chair of the board of directors). In effect the CFO was negotiating against his superior Flax as well as McGrath who had negative control of the Company through the May 2025 US$2,480,000 loan agreement with a subsidiary of the Company (the “May 2025 Loan”). Every director of the Company was in conflict due to the proxy fight against the Concerned Shareholders and yet no independent legal or financial advice was sought by the incumbent directors. As acknowledged by Zefiro, the process “was not best in class” – in fact it was far from that. Shareholders should be wary of the incumbent directors’ assurances that they adhere to good governance practices!

• Failure to Provide Important Disclosure Required by MI 61-101: In connection with the Debt Settlement Shares, the Company filed a material change report that failed to comply with Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The report failed to disclose that McGrath had negative control over the operations of the Company and could therefore be considered a related and conflicted party in connection with the Debt Settlement Shares. The following required disclosure was also omitted: (i) the review and approval process adopted by the board of directors for the transaction, which would have brought to light the poor governance process outlined above and (ii) a discussion of the fact that Dr. Debs opposed the transaction. Further, the Company failed to disclose that the cash proceeds from the transaction would be applied to pay a significant portion of a loan made in the name of the Interim CEO’s spouse.

The Company also filed a material change report with respect to the May 2025 Loan, albeit 4 days late. The report did not disclose that McGrath and McGavick were lenders. Further, it did not disclose that the May 2025 Loan granted a negative control covenant to Mr. McGrath. For his part, Dr. Debs had encouraged the Company to disclose the Controlling Lenders’ identities.

• Failure to File Material Contracts on a Timely Basis: Securities regulations clearly require the filing of material contracts, yet the details of the May 2025 Loan were obscured from public consumption. The loan agreement was not filed to SEDAR+ until February 6, 2026, well after the issuance of the Debt Settlement Shares and over 8 months after the agreement was originally entered into, and following the commencement of the Application.
  

Cross-Application

The Cross-Application appeared to be brought by McGrath to increase the costs of the Concerned Shareholders in seeking to reconstitute the board of Zefiro, and also served to waste the resources of the Company and its shareholders. In a ruling of the Commission on February 23, 2026, the Commission partially stayed the Cross-Application and granted leave to McGrath to allocate a portion of his oral submission to convincing the Panel that the Commission had a broader jurisdiction than noted in its ruling. McGrath was unsuccessful in trying to convince the Commission.

Enforcement of Rights under the Investor Rights Agreement

The Investor Rights Agreement provides XMST and its principals (collectively, the “XMST Group”) with the right to acquire their pro rata share of any securities issued by Zefiro so long as they own, directly or indirectly, at least 10% of the issued and outstanding Common Shares. Two years after signing the agreement and without any prior public disclosure, the Company took the position that the Investor Rights Agreement is void. The chair of the Board, perhaps appreciating the absurdity of doing so, affirmed that this is “simply reserv[ing] Zefiro’s rights”; however, the Company then proceeded to once again claim that the Investor Rights Agreement is invalid.

The XMST Group intends to take all steps necessary to protect its rights under the Investor Rights Agreement and exercise its preemptive rights to acquire 1,386,184 Common Shares and options and warrants to acquire 6,096,481 Common Shares (or approximately 7.63% of the issued and outstanding Common Shares on a partially diluted basis).

Next Steps

Although Dr. Debs is disappointed with the dismissal of the Application, he and the other Concerned Shareholders will continue to fight for the right of Zefiro shareholders to have a leadership team that puts the Company and its shareholders first, not themselves. The Concerned Shareholders will oppose all transactions and steps taken by the incumbent board to seek to entrench themselves or diminish the value of the Common Shares.

We urge you to submit your vote today using the BLUE proxy. Shareholders are encouraged to visit www.zefirotruth.com for more information about our nominees and plan for change.

Shareholder Voting Assistance

If you have any questions or require assistance with voting, please contact:
Carson Proxy Advisors
North American Toll Free Phone: 1-800-530-5189 Local and text: 416-751-2066
Email: info@carsonproxy.com
For up-to-date information and assistance in voting please visit: www.zefirotruth.com.

Cautionary note regarding forward-looking statements

This news release contains “forward-looking information” within the meaning of applicable Canadian securities laws (“forward-looking statements”), concerning the Company and the intentions of the Concerned Shareholders. Forward-looking information in this press release may include, without limitation, statements relating to actions of the Concerned Shareholders in connection with enforcing their rights under the Investor Rights Agreement and fighting for the rights of Zefiro shareholders. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as “plans,” “expects” or “does not expect,” “is expected,” “budget,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates” or “does not anticipate,” “believes,” “projects” or variations of such words and phrases or state that certain actions, events or results “may,” “could,” “would,” “might” or “will be taken,” “occur” or “be achieved.” Forward-looking statements are based on the opinions and estimates of the Concerned Shareholders as of the date such statements are made, and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such forward-looking statements. Although the Concerned Shareholders have attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Concerned Shareholders caution readers not to place undue reliance on forward-looking statements, as forward-looking statements involve significant risks and uncertainties. Forward-looking statements should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. The Concerned Shareholders do not undertake to update any forward-looking statements except in accordance with applicable Canadian securities laws.

For More Information:

Shareholder Inquiries:
Christine Carson
Carson Proxy Advisors
E: christine@carsonproxy.com
C: 416-778-1556

Media Inquiries:
John Vincic
Oakstrom Advisors
E: john@oakstrom.com 
C: 647-402-6375