TORONTO, March 02, 2026 (GLOBE NEWSWIRE) -- Dr. Talal A. Debs, Founder and Director of Zefiro Methane Corp. (Cboe: ZEFI) ("Zefiro" or the “Company”), is pleased to announce that a preliminary injunction sought by a related party of the Company before the courts in New York was denied on February 27, 2026.
David McGrath, who has worked with the board of directors of the Company (the “Board”) to seek to entrench the incumbent directors, brought a motion for preliminary injunction in New York on December 23, 2025. The motion was heard Tuesday February 24 and continued February 27, 2026. After hearing testimony from Dr. Debs and Mr. McGrath and after considering the arguments of counsel, the Court denied the motion on February 27, 2026. It did so on the grounds that Mr. McGrath has neither proven a likelihood of success on his claims nor irreparable harm. Dr. Debs, X Machina Capital Strategies Fund I GP LLC (“XMC”), and X Machina Capital Strategies LP (“XMST” and, collectively with Dr. Debs and XMC, the “Concerned Shareholders”) have filed a motion to dismiss the case (the “NY Litigation”). The motion to dismiss has been scheduled for March 19, 2026.
It is important to note that the NY Litigation was used by the incumbent directors as a pretext for a frivolous investigation into Dr. Debs which was launched by the incumbent directors at considerable expense to shareholders and was followed by a series of bad faith steps taken by the incumbent directors seeking to entrench themselves. This includes the issuance of 13,214,494 common shares of the Company (the “Debt Settlement Shares”) to the Company’s interim CEO Catherine Flax, David McGrath and Mr. McGrath’s brother-in-law (Michael McGavick) on January 27, 2026, the date immediately prior to the record date for the annual general and special meeting (the “Meeting”) of shareholders of Zefiro currently scheduled to be held on March 20, 2026. The Concerned Shareholders are asking the British Columbia Securities Commission at a hearing to be continued on March 3 and 4, 2026 for remedies against such conduct including rescinding the issuance of the Debt Settlement Shares, or alternatively, preventing them from being voted at the Meeting.
Mr. McGrath commenced the NY Litigation on October 1, 2025, as part of what the Concerned Shareholders believe to be a broader attempt to wrest control of XMC and XMST from Dr. Debs. On October 9, 2025, two days after Dr. Debs announced his intention to nominate an alternative slate of directors for election at the Meeting and more than four months after terminating him as CEO, the Board announced it had resolved to constitute a special committee to investigate his conduct. In the same news release, the Board provided a link to the McGrath complaint, despite knowing it contained unproven and contested allegations.
The special committee retained an external law firm to conduct the investigation. The law firm scrutinized approximately US$30,000 of Mr. Debs’ expenses. At present, only a single expense claim of less than US$600 remains in question. More than four months after announcing the investigation, and despite the review having found no material improprieties and consuming a meaningful amount of the Company’s cash resources, the Board has not provided an update on any findings. In fact, in its management information circular filed less than three weeks ago, the Company made a point of referencing the “ongoing” status of the investigation as a reason not to support the Concerned Shareholders’ nominees for election to the Board.
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 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 the NY Litigation and the hearing before the BCSC. 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
