TORONTO, Dec. 16, 2025 (GLOBE NEWSWIRE) -- Dr. Talal A. Debs, Founder and Director of Zefiro Methane Corp. (Cboe: ZEFI) ("Zefiro" or the “Company”), today provided an update to shareholders on recent developments at the Company. (All dollar figures are stated in Canadian dollars unless otherwise noted.)
“The board of directors at Zefiro (the “Board”) has made much of recent positive news, the groundwork for which was largely laid by the former Zefiro leadership team. While I always welcome good news, recent filings detail actions that appear to be an attempt at ‘entrenching’ current management at the expense of Zefiro shareholders. These include enhancing executive compensation (including by providing certain executives with golden parachutes), diluting shareholders with share issuances as a result of debt settlements, and patterns of insider purchases that may be intended to present a broader sense of shareholder approval than is really the case; all of these actions appear intended to improve the Board’s own position in the face of an upcoming proxy contest,” said Dr. Debs. “Meanwhile, the Board has been denying shareholders the opportunity to vote on the future of their own company by failing to hold an annual meeting in 2025 as required by law and delaying the meeting until March 4, 2026 (the “Meeting”). I continue to believe Zefiro shareholders deserve much better.”
In the interest of keeping the Company’s shareholders well informed, Dr. Debs has established a website at www.zefirotruth.com. The website includes details on the highly qualified directors that Dr. Debs intends to nominate for election to the board of directors at the Meeting and will be updated with additional information relating to Zefiro in the coming months.
Insider purchases may have distorted the share price
The Company issued a news release on December 1, 2025 to announce the recent purchase of 723,000 shares by four Board members. It appears these insider purchases played a meaningful role in the recent share price increase. The Company’s stock price increased by $0.02 or 8% on November 17, 2025, the first trading day following the announcement of first quarter 2026 results. The price then increased by a further $0.05 or 19% from November 18 to November 25, 2025, a period during which the four insiders accounted for approximately 42% of combined Canadian and U.S. trading volume of 1,019,836 shares.
On November 25 alone, director Daryl Heald’s purchase of 147,500 shares represented 89% of the total Canadian trading volume on a day when the share price increased by $0.04 or 14%.
Absent these additional details, investors may have assumed the Company’s share price appreciation was driven primarily by the market’s response to its Q1 2026 results, rather than by insider purchases. Dr. Debs cautions investors that the recent share price gains may not be sustainable once these insiders inevitably stop propping up the price with their own purchases with the clear intention of bulking up their holdings in advance of a proxy contest. Indeed, the share price has recently drifted below the level it reached during that period of significant insider purchases.
Dr. Debs also notes that three of the four insiders all had the same idea to purchase shares during the same six-day span, after having purchased zero shares in the open market for the entirety of calendar 2025 up to that point. Based on the lack of recent filings, it also appears those three insiders all stopped purchasing shares once they had issued their celebratory news release to announce stock trades for which disclosure via the SEDI insider reporting platform would have sufficed.
The fourth insider named in the Company’s December 1 news release, director Jonson Sun, has been a more active trader. According to SEDI filings, Mr. Sun purchased 36,000 shares following the end of Q1 2026 on September 30, 2025 and continued purchasing shares right up until the day before the Company announced financial preliminary results on October 14, 2025. Mr. Sun then purchased a further 255,500 shares through to November 4, 2025, 10 days prior to the announcement of full results for the quarter. These 291,500 shares purchased by Mr. Sun are included in the total of 723,000 shares mentioned in the December 1 news release.
New executive compensation arrangements
The Board has ensured that certain executives will be well compensated with shareholders’ capital in the event that the majority of the Board is replaced in the upcoming proxy contest, or if such executives choose to leave Zefiro for “good reason”, which includes stepping aside to find a permanent replacement for their role. According to the Statement of Executive Compensation filed on SEDAR on November 26, 2025, on June 4, 2025, four senior executives entered into employment agreements which include “single-trigger” change of control payments that would take effect under certain circumstances, including a contested election of directors, even if the executives’ employment is not terminated. Each of these executives would be entitled to a full year’s salary, among other benefits, including Interim CEO Catherine Flax and Interim CFO Michael Downs, despite their interim status.
XMC has estimated that if these change of control payments were triggered in the first quarter of 2026, the total payments due to the four named executives during that quarter (which would include salary and benefits earned during that period, change of control payments, and repayment of outstanding debt and interest owing predominantly to Ms. Flax) could be as high as US$3 million in cash, or almost 20% of the market capitalization of the Company.
During Dr. Debs’ tenure as Chair and CEO there were no provisions for change of control payments to be made to executives. Prior to the recent changes to executive compensation, the only impact of a change of control would have been an accelerated vesting of stock options and restricted share units.
Dr. Debs confirms he did not vote in favour of any of these new compensation arrangements and is not in line to receive any payment from the Company as a result of a change of control of the Board. He also notes the Company elected not to issue a news release to announce the new compensation arrangements, unlike the discretionary announcement of insider share purchases.
Debt settlements diluted shareholders unnecessarily
On November 28, 2025, the Company announced that it issued 1,127,273 common shares and granted 400,000 stock options to related parties to settle $407,855.97 of debt. The settlements were completed at a deemed price of $0.275 per share, on a day when the Company’s share price closed at $0.31, having traded between $0.28 and $0.33 that entire week. The unnecessary dilution disadvantages shareholders, while at the same time has placed shares into friendly hands (including a company partly owned by director Jonson Sun) in advance of the upcoming proxy contest.
Settling debt in this manner appears inconsistent with the positive outlook presented by management in its announcement of Q1 2026 financial results. Furthermore, it is not clear how the Board determined it should retire lower-cost debt by issuing common shares and stock options, while leaving in place more expensive debt, including US$1.8 million of debt held by CEO Catherine Flax.
Finally, Dr. Debs has put the Company on notice that failure by the Company to offer Dr. Debs and his investor group the ability to maintain their pro rata interest in the Company on the same terms and conditions as the debt settlements is a breach of the XMC Group’s investor rights agreement entered into with the Company.
First quarter 2026 results only told part of the story
Dr. Debs was pleased to see the Company report solid financial results for Q1 2026 (the Company has a June 30 year end) and notes that the key initiatives that drove the results appear largely to have been put in place by the previous management team under his leadership.
Interim CEO Catherine Flax has touted as one of her administration’s key differentiators, the Company’s “decisive cost-cutting initiatives” and “streamlining.” What investor could object to these important goals? Yet, we see a significant increase in costs associated with executive compensation (as described above) and no apparent awareness of the negative impact certain cuts will have on long-term growth prospects. For example, in a recent Letter to Shareholders Dr. Debs mentioned the decommissioning of the Zefiro Lifecycle Solution (ZLS) (including the Fiùtur investment and CarbonAI partnership), the discontinuation of Zefiro’s proprietary AI-driven mapping tool for leaking oil and gas wells, and the termination of the team leader responsible for delivering Zefiro’s only successful batch of carbon credits.
Dr. Debs is of the view that the current management team is “resting on the laurels” of its predecessors while at the same time diminishing the Company’s future prospects.
Annual meeting being delayed until March 4, 2026
On November 20, 2025, Dr. Debs, together with X Machina Capital Strategies (“XMC”) and X Machina Sustainable Technologies Inc. (“XMST”) submitted a requisition for a shareholder meeting to Zefiro and requested therein that the Company hold its annual meeting by no later than December 31, 2025 in accordance with applicable law. According to the Company’s press release dated December 12, 2025, the Company obtained an exemption from the requirements to hold an annual meeting in 2025 and the Company has called an annual and special meeting for March 4, 2026. The Company did not provide any justification for the delay, which is denying shareholders the opportunity to vote on the Company’s future at a time when its future prospects and governance practices are being questioned.
Dr. Debs speculates that the Board is attempting to buy itself time in an attempt to improve its chances in a shareholder vote through self-serving tactics such as those described above.
Additional Information
The information contained in this news release does not and is not meant to constitute a solicitation of a proxy within the meaning of applicable securities laws. Shareholders are not being asked at this time to execute a proxy in favour of any resolution that may be considered at the Meeting. In connection with the Meeting, Dr. Debs may file a dissident information circular in due course in compliance with applicable corporate and securities laws.
Notwithstanding the foregoing, Dr. Debs is voluntarily providing the disclosure required under section 9.2(4) of National Instrument 51-102 – Continuous Disclosure Obligations ("NI 51-102") in accordance with Canadian securities laws applicable to public broadcast solicitations.
The information contained herein and any solicitation made by Dr. Debs in advance of the Meeting is, or will be, as applicable, made by Dr. Debs and not by or on behalf of the management of Zefiro. All costs incurred for any solicitation will be borne by XMC, provided that, subject to applicable law, XMC may seek reimbursement from Zefiro of its out-of-pocket expenses, including proxy solicitation expenses and legal fees, incurred in connection therewith.
Dr. Debs is not soliciting proxies in connection with the Meeting at this time. Dr. Debs may engage the services of one or more agents and authorize other persons to assist in soliciting proxies on behalf of Dr. Debs. Any proxies solicited by or on behalf of Dr. Debs may be solicited pursuant to a dissident information circular sent to shareholders, after which solicitations may be made by or on behalf of Dr. Debs, in person, or by mail, telephone, fax, email or other electronic means as well as by newspaper or other media advertising, or by way of public broadcast, including through press releases, speeches or publications and by any other manner permitted under Canadian securities laws. Dr. Debs is not requesting that shareholders submit a proxy at this time. If and when Dr. Debs commences a formal solicitation of proxies in connection with the Meeting, proxies may be revoked by instrument in writing executed by a shareholder or by his or her attorney authorized in writing or, if the shareholder is a body corporate, by an officer or attorney thereof duly authorized or by any other manner permitted by law.
As Managing Partner of XMC, Dr. Debs represents the largest single shareholder of Zefiro, and, together with his personal holdings, has beneficial ownership of, or exercises control or direction over, an aggregate of 20,914,750 common shares, representing 27.488% of the issued and outstanding common shares. In light of a side letter entered into by Mr. Debs, he does not intend to vote 500,000 shares he holds personally.
Except as disclosed herein, none of Dr. Debs, XMC or XMST, or any of their associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted on at the Meeting other than the election of the directors or the appointment of the auditors.
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
