Petro-Victory Energy Corp. Announces Closing of Shares for Debt Transactions

The Shares-for-Debt Transactions were undertaken by the Company in order to preserve cash and strengthen its balance sheet. The Common Shares issued pursuant to the Shares-for-Debt Transactions are subject to a four-month hold period, which expires on October 31, 2026 in accordance with applicable securities laws and TSX Venture Exchange ("TSXV") policies. Following the completion of the Shares-for-Debt Transactions, the Company has 32,729,703 Common Shares and 4,333,724 Class B restricted voting shares issued and outstanding. An aggregate of 4,075,950 bonus warrants that were issued in connection with the loans were cancelled concurrent with the completion of the Shares-for-Debt Transactions. Completion of the Shares-for-Debt Transactions remains subject to TSXV final acceptance.

The Company also intends to settle by the issuance of Common Shares an aggregate of $1 million in directors fees currently payable to the directors of the Company and $1 million in deferred compensation to the executives of the Company, that were each validly earned and accrued in respect of services previously rendered to the Company from 2022 until current, but remain unpaid; however, in accordance TSXV policies, the Company must first obtain disinterested shareholder approval for these issuances. The Company intends to seek approval at its next annual general and special meeting of shareholders expected to be held on August 6, 2026.

Related Party Participation

The Shares-for-Debt Transactions included the settlement of the principal amount and unpaid interest of loans from: (i) 579 Max Ltd, a company controlled by T. Lynn Bryant, a director of the Company, in the amount of US$2,349,087 for 4,797,973 Common Shares (representing 12.95% of the outstanding voting shares of the Company); (ii) Richard Gonzalez, the Chairman and Chief Executive Officer of the Company, in the amount of US$230,608 for 471,014 Common Shares (representing 1.27% of the outstanding voting shares of the Company); and (iii) Thomas C. Cooper, a director of the Company, in the amount of US$262,665 for 536,490 Common Shares (representing 1.45% of the outstanding voting shares of the Company).

The Shares-for-Debt Transactions with 579 Max Ltd, Richard Gonzalez and Thomas C. Cooper, each constitute a "related party transaction" ‎under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special ‎Transactions ("MI 61-101") as each is a related party (as defined in MI 61-101) of the ‎Company. The Company relied on the exemption from the formal valuation and minority approval requirements of MI 61-101 contained in Section 5.5(g) and Section 5.7(1)(e) of MI 61-101, respectively, on the basis of the "financial hardship" exemption therein.‎‎ The Company did not file the material change report more than 21 days before the expected closing date of the Shares-for-Debt Transactions as the definitive documentation and the participation by the related parties was not settled until shortly before the closing of the Shares-for-Debt Transactions, and the Company wished to close on an expedited basis for sound business reasons.

The independent directors of the Company (comprised of three directors) determined that the Shares-for-Debt Transactions were reasonable for the Company in the circumstances and approved the Shares-for-Debt Transactions. The independent directors and the board of the Company carefully considered the terms and availability of the various alternatives to improve the financial situation of the Company (e.g., various corporate transactions, M&A transaction with third parties, accessing public or private debt or equity markets) and concluded the Company is in serious financial difficulty and there were no viable alternatives available on commercially reasonable terms that would be more likely to improve the financial situation of the Company compared to the Shares-for-Debt Transactions (and related transactions).

Early Warning Disclosure

The Company settled outstanding indebtedness to 579 Max Ltd, a company controlled by T. Lynn Bryant, a director of the Company, in the amount of US$2,349,087 through the issuance of 4,797,973 Common Shares pursuant to Shares-for-Debt Transactions. Mr. Bryant now owns, directly and indirectly, a total of 7,372,098 Common Shares, 4,274,130 warrants and 141,667 stock options, representing approximately 19.89% of the issued and outstanding voting securities of the Corporation on a non-diluted basis and 24.10% of the issued and outstanding voting securities of the Corporation, assuming the exercise of the warrants and stock options held by Mr. Bryant. The Common Shares were acquired for investment purposes and Mr. Bryant may increase or decrease his beneficial ownership or control depending on market or other conditions.

The Company settled outstanding indebtedness to David Grover, an arm's length party, in the amount of US$1,729,088 through the issuance of 3,531,634 Common Shares pursuant to Shares-for-Debt Transactions. Mr. Grover now owns, directly and indirectly, a total of 4,398,814 Common Shares and no other securities of the Company, representing approximately 13.34% of the issued and outstanding voting securities of the Corporation on a non-diluted basis. The Common Shares were acquired for investment purposes and Mr. Grover may increase or decrease his beneficial ownership or control depending on market or other conditions.

This portion of the news release is issued pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, which requires a report to be filed on SEDAR+ (www.sedarplus.ca) by each of Mr. Bryant and Mr. Grover containing additional information with respect to the foregoing matters. Copies of the early warning reports may be obtained directly from the Company upon request at the telephone number below.

About Petro-Victory Energy Corp.

Petro-Victory Energy Corp. is an oil and gas company engaged in the acquisition, development, and production of crude oil and natural gas in Brazil. The total portfolio under management as of the date of this filing includes 31 concession contracts with 210,583 acres, net to Petro-Victory, plus an additional 4 concessions and 11,413 acres owned jointly with BlueOak in Capixaba Energia. Through disciplined investments in high-impact, low-risk assets, Petro-Victory is focused on delivering sustainable shareholder value. The Company's common shares trade on the TSXV under the ticker symbol VRY.

Cautionary Note

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold within the United States unless an exemption from such registration is available.

Advisory Regarding Forward-Looking Statements

In the interest of providing Petro-Victory's shareholders and potential investors with information regarding Petro-Victory's future plans and operations, certain statements in this press release are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation (collectively, "forward-looking statements"). In some cases, forward-looking statements can be identified by terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "intend," "may," "objective," "ongoing," "outlook," "potential," "project," "plan," "should," "target," "would," "will" or similar words suggesting future outcomes, events or performance. The forward-looking statements contained in this press release speak only as of the date thereof and are expressly qualified by this cautionary statement.

Specifically, this press release contains forward-looking statements relating to, but not limited to, the receipt of final TSXV acceptance for the Shares-for-Debt Transactions, the future settlement of, and seeking shareholder approval for, unpaid director fees and executive bonuses, and the timing of the Company's next annual general and special meeting of shareholders. These forward-looking statements are based on certain key assumptions regarding, among other things, the receipt of TSXV final acceptance for the Shares-for-Debt Transactions. Readers are cautioned that such assumptions, although considered reasonable by Petro-Victory at the time of preparation, may prove to be incorrect. Actual results achieved will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors, including the risk of not receiving TSXV final acceptance. These and other risks are set out in more detail in the Company's Annual Information Form for the year ended December 31, 2025, available on SEDAR+ at sedarplus.ca.

The above summary of assumptions and risks related to forward-looking statements in this press release has been provided in order to provide shareholders and potential investors with a more complete perspective on Petro-Victory's current and future operations and such information may not be appropriate for other purposes. There is no representation by Petro-Victory that actual results achieved will be the same in whole or in part as those referenced in the forward-looking statements and Petro-Victory does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities law.

SOURCE Petro-Victory Energy Corp.