(Neo:ZEFI),(Neo:ZEFI.NE),
TORONTO, Feb. 17, 2026 (GLOBE NEWSWIRE) — Dr. Talal A. Debs, Founder and Director of Zefiro Methane Corp. (Cboe: ZEFI) (“Zefiro” or the “Company”), today provided details of important matters to be heard by the British Columbia Securities Commission (“BCSC”) at a proceeding tentatively scheduled for February 25, March 3 and 4, 2026 (the “Hearing”). Dr. Debs, along with X Machina Capital Strategies (“XMC”) and X Machina Sustainable Technologies Inc. (“XMST”) (collectively, the “Concerned Shareholders” whose holdings represented 27.5% of the Company's common shares prior to recent dilutions) will be asking the BCSC to intervene to protect the rights of Zefiro shareholders in the face of oppressive and aggressive defensive tactics being deployed by the Company.
Notwithstanding the views expressed by the Company in its recent news release, the Concerned Shareholders believe it is completely appropriate to ask securities regulators to uphold the integrity of the capital markets and to help ensure a fair vote of shareholders. In fact, the Concerned Shareholders have been left with no choice but to seek regulatory relief as the Company has taken a series of steps designed to entrench the board of directors of Zefiro (the “Board”) in a manner fundamentally contrary to the public interest.
In this regard, Dr. Debs stated: “The board of directors expects shareholders to believe it was a coincidence that they decided to put 13.2 million newly issued shares into friendly hands one day before the deadline for participating in the proxy contest. They make accusations of inappropriate behaviour despite consistently showing a willingness to dilute shareholders, failing to adhere to accepted corporate governance standards and spending the Company's limited cash for the purpose of entrenching and enriching themselves. We look forward to presenting the facts to the BCSC.”
Dilution of Shareholders through Debt Settlement Shares
The Company has undertaken various acts of entrenchment which continue. The BCSC is being asked to reverse a transaction that could directly impact the outcome of the annual general and special meeting currently scheduled for March 4, 2026 (the “Meeting”). One day prior to the record date for the Meeting, the Company issued 13,214,494 shares (the “Debt Settlement Shares”) – meaning the holders of the shares would be entitled to vote them at the Meeting. The recipients of the Debt Settlement Shares included Zefiro director and interim CEO Catherine Flax, David McGrath (the counterparty in frivolous litigation targeting Dr. Debs) and Michael McGavick. David McGrath was a Founding Partner of Sherman Financial Group, a national leader in consumer debt purchase and collections. Mike McGavick serves as Co-Chairman of the Operating Board of Directors at Bridgewater Associates, the world's largest hedge fund. Flax, McGrath and McGavick would collectively receive 14.6% of the issued and outstanding shares – enough to potentially decide the proxy vote. The decision to issue the Debt Settlement Shares was completely unnecessary, since the debt was not due for 10 months. Furthermore, a portion of the Debt Settlement Shares were issued to pay for unaccrued interest for the 10-month period, despite there being no obligation to pay interest once the principal has been paid.
The Concerned Shareholders are asking the BCSC for remedies including rescinding the issuance of the Debt Settlement Shares, or alternatively, preventing them from being voted at the Meeting.
Other Entrenchment Tactics
The Concerned Shareholders' application to the BCSC describes other tactics used by the current directors which raise questions regarding their fitness to be directors and appear focused on entrenchment, including the following:
- Removing Dr. Debs from his CEO and Chair roles and launching a protracted and costly investigation against him
- Amending employment agreements to include generous and off-market change of control bonuses to Ms. Flax and other executives
- Issuing 1,127,273 shares and 400,000 options in an earlier debt settlement in November 2025
- Amending the Company's Advance Notice Policy in an unprecedented manner to give the Board discretionary authority to disqualify director nominees
- Repeatedly breaching and eventually declaring as invalid an Investor Rights Agreement held by XMST
- Failing to call the annual general meeting on a timely basis
Dr. Debs was surprised and disappointed that the Board sent out its meeting materials confirming the March 4 Meeting date when they knew they would likely reschedule the Meeting to a later date. We expect that the Company will be required to announce later this week a postponement of the Meeting to address the timing of the Hearing. Dr. Debs is hopeful that the Company will delay the Meeting to March 31, 2026, to enable all shareholders to receive and review the BCSC's decision prior to the Meeting. It would be in the public interest to allow shareholders an opportunity to consider the outcome of the Hearing in advance of the Meeting in order to assess the information and determine how to vote.
Dr. Debs urges shareholders to visit www.zefirotruth.com for ongoing updates relating to the future of Zefiro.
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 23.12% 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.
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. Forward-looking information in this press release may include, without limitation, statements relating to the date of the Meeting, the date of the BCSC proceedings, the relief sought by the Concerned Shareholders from the BCSC, any outcome from the BCSC proceedings and any plans of the Concerned Shareholders for the Company. 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, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including, but not limited to, the impact of general business and economic conditions, uncertainties related to the date of the Meeting and the outcome of the BCSC proceedings. 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
