Keranic Industrial Gas Announces $3.6 Million in Strategic Investments, Led by a Multi-National Helium Supplier, and Enters into Definitive Amalgamation Agreement for the Reverse Takeover of Royal Helium Ltd.

Saskatoon, Saskatchewan--(Newsfile Corp. - August 21, 2025) - Keranic Industrial Gas Inc. ("Keranic" or the "Company") is pleased to announce that in connection with its previously announced private placement of subscription receipts of Keranic ("Subscription Receipts") at a price of $0.50 per Subscription Receipt (the "Offering") for up to $3,500,000 in aggregate gross proceeds, it has entered into a subscription agreement with a strategic investor, a multi-national supplier of helium and specialty gases (the "Strategic Investor"), for gross proceeds of $2,000,000 under the Offering. In addition to the Offering for $3,500,000, Keranic will be completing a subsequent private placement for $1,600,000 (the "Subsequent Offering"), led by the Strategic Investor, that is expected to be completed following the completion of the Transaction (defined below), resulting in total gross proceeds of $5,100,000.

In addition, Keranic has entered into a definitive amalgamation agreement (the "Amalgamation Agreement") with Royal Helium Ltd., Royal Helium Exploration Limited, and Imperial Helium Corp. (collectively, "Royal Helium") for a business combination (the "Transaction"), subject to the approval of the Court of King's Bench of Alberta.

The Transaction includes Royal Helium's four core areas with multiple helium discoveries and widespread helium concentrations across a large, ~600,000-acre land position strategically located across Saskatchewan's and Alberta's helium corridors, alongside the recently built Steveville plant facility and pipeline infrastructure capable of processing 15,000 Mcf/day of raw gas. The Steveville plant facility will be restarting production within 12 weeks following the completion of the Transaction, leveraging a helium-focused management team.

Offering and Securities Details

The Offering is being led by Research Capital Corporation ("RCC") as sole agent and sole bookrunner (the "Agent").

Each Subscription Receipt will entitle the holder thereof, without payment of any additional consideration and without further action on the part of the holder, upon the satisfaction of the Escrow Release Conditions (as defined herein) to receive one unit of Keranic (a "Unit"). Each Unit will consist of one common share of Keranic (a "Keranic Share") and one common share purchase warrant ("Keranic Warrant"). Each Keranic Warrant will entitle the holder to purchase one Keranic Share (a "Warrant Share") at an exercise price of $0.65 per Warrant Share until the date that is 36 months following the satisfaction or waiver of the Escrow Release Conditions.

Subsequent Offering

In addition, Keranic announces a Subsequent Offering of Keranic Shares for aggregate gross proceeds of $1,600,000, led by the Strategic Investor, which is expected to be completed following the completion of the Transaction, such that Resulting Issuer Shares (defined below) will be issued to the Strategic Investor in respect of the Subsequent Offering.

Strategic Investment by Multi-National Helium Supplier

The Strategic Investor is an established, multi-national supplier of helium and specialty gases, offering both liquid and gaseous helium to its global customer base in high-growth sectors, including, but not limited to, healthcare, fiber optics, semiconductors and aerospace and defense. Operating from two international facilities, the Strategic Investor's operations are supported by a fleet of ISO containers for liquid helium transportation, that are globally compliant. Supported by modern production facilities and a well-established distribution network, the company has built long-standing supply relationships with industrial clients, underpinned by best-in-class quality assurance and regulatory compliance.

The Strategic Investor has secured numerous long-term partnerships with helium producers, ensuring control of the supply chain and a diverse helium source mix. Leveraging strong, growing demand for essential gases, it has been strategically expanding its footprint to further enhance service capabilities and scale. The management team is comprised of industry experts with extensive experience in the helium and specialty gases markets, underpinned by a proven track record of successes.

Following the completion of the Transaction under the CCAA (as defined herein) proceeds and upon completion of the Subsequent Offering, it is expected that the Strategic Investor shall beneficially own or control a total of 32.9% fully diluted ownership of the Resulting Issuer (defined below). In connection with the Subsequent Offering, the Strategic Investor shall enter into an investor rights agreement (the "Investor Rights Agreement") with the Resulting Issuer. Pursuant to the Investor Rights Agreement, the Strategic Investor shall be granted the right to nominate such number of directors of the Resulting Issuer to have majority board representation, and one of such nominee directors shall be the chair of the board of directors. The Strategic Investor shall also be granted the corporate naming rights of the Resulting Issuer, subject to regulatory and shareholder approval.

In addition, Keranic is pleased to announce that, following the completion of the RTO (as defined herein), the Strategic Investor will be granted the exclusive right to enter into a helium and specialty gases offtake agreement with respect to all helium and all other products produced by the Resulting Issuer.

Core Area #1: Steveville Helium Purification Facility, Alberta

Since commercial production in December 2023, Royal Helium has delivered multiple trailers of high purity helium to its end customer in the aerospace and defence industry. Royal Helium had previously entered into offtake agreements with end customers that purchased all of the helium volumes from this flagship facility.

Keranic is planning to execute a turn key recommissioning plan to restart the Steveville plant facility with the original plant engineering firm that designed the facility. Keranic is targeting recommissioning to restart production within 12-15 weeks following the completion of the Transaction, ramping up its throughput volumes and reaching maximum capacity of 15,000 Mcf/day in a few months thereafter. The processing facility at Steveville will be fed by highly productive Devonian horizons that will provide material cash flow.

The Steveville plant is designed to process 15,000 Mcf/day of raw gas fed by the two 100% owned helium wells at Steveville, Alberta and produce 22,000 Mcf of 99.999% helium per year. The engineered life of the plant is 25 years, it produces enough fuel gas to power the plant itself, and is capable of producing up to 22,000,000 pounds of commercial CO₂.

Core Area #2: 40-Mile Project, Alberta – High Impact New Appraisal Drilling

The 40 Mile project is comprised of one historic well that was drilled, flow tested and assayed. This well flowed at exceptionally high rates during initial testing and returned helium concentrations exceeding anything that Royal Helium has tested or produced to date. Seismic work at 40 Mile was completed in 2023, producing multiple seismically defined drill targets across multiple prospective zones.

Core Area #3: Climax/Cadillac Project, Saskatchewan – Developing in the Existing Helium Fairway

The core of Royal Helium's Saskatchewan lands are located within the prolific Southwestern Saskatchewan Helium fairway that features highly economic helium concentrations coupled with multiple helium purification facilities near its borders. Extensive geological and geophysical subsurface work has been completed in the Climax/Cadillac corridor and, with many new analog wells adjacently offsetting these core lands, the team has identified and selected numerous new drilling targets among these three project areas. The amount of drilling and testing data available in the area has helped verify the subsurface model and increased the understanding of the different Helium play types that are found in Saskatchewan and, more importantly, on Royal Helium leasehold.

Core Area #4: Val Marie Project, Saskatchewan – Testing of an Already Drilled Well

The Val Marie helium project comprises a 21-year lease land package representing approximately 3% of the current helium permit and lease lands across Saskatchewan and Alberta. Val Marie is located immediately north of the Saskatchewan-Montana border sitting atop the Bowdoin Dome, a large geological uplift system that has been a prolific natural gas production area with successful helium production wells recently drilled on the Montana side of the structure. The Val Marie project was drilled in August of 2022 with some of the highest helium showings to date from drill bit gas detection equipment from multiple stacked zones – the Duperow, Souris River and Deadwood formations.

Additional Details on Equity Offering

Keranic has granted the Agent an option to offer up to an additional number of Subscription Receipts for gross proceeds of up to 15% of the gross proceeds of the Offering at any time up to 48 hours prior to closing of the Offering.

The net proceeds of the Offering will be used to partially fund the Transaction, recommission the plant, and restart operations at the Steveville helium processing facility.

The Offering is anticipated to close as soon as commercially possible, or such later date as Keranic and the Agent may agree upon (the "Closing Date"). The closing of the Offering is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and other approvals.

The gross proceeds of the Offering, less the Agents' expenses and 50% of the cash commission will be deposited and held by a licensed Canadian trust company or other escrow agent (the "Escrow Agent") mutually acceptable to RCC and , Keranic in an interest bearing account (the "Escrowed Funds") pursuant to the terms of a subscription receipt agreement to be entered into on the Closing Date among Keranic, RCC, and the Escrow Agent. The Escrowed Funds (less 50% of the remaining cash commission and any remaining costs and expenses of the Agent) will be released from escrow to Keranic, upon satisfaction of the following conditions (collectively, the "Escrow Release Conditions") no later than the 90^th day following the Closing Date, or such other date as may be mutually agreed to in writing between Keranic and RCC (the "Escrow Release Deadline"), including:

(A) the completion, satisfaction or waiver of all conditions precedent to the Transaction and RTO in accordance with the Definitive Agreement, to the satisfaction of RCC;

(B) the completion and funding of a debt financing to fund the Transaction;

(C) the completion of the consolidation of the existing common shares of Royal Helium on an 8:1 basis;

(D) the receipt of all required shareholder and regulatory approvals, including, without limitation, the court approval for the Transaction;

(E) the representations and warranties of the Company contained in the agency agreement to be entered into in connection with the Offering being true and accurate in all material respects, as if made on and as of the escrow release date; and

(F) the Company and RCC having delivered a joint notice and direction to the Escrow Agent, confirming that the conditions set forth in (A) to (E) above have been met or waived.

If (i) the satisfaction of the Escrow Release Conditions does not occur on or prior to the Escrow Release Deadline, or such other date as may be mutually agreed to in writing among Keranic and RCC, or (ii) Keranic has advised RCC or the public that it does not intend to proceed with the Transaction (in each case, the earliest of such times being the "Termination Time"), then all of the issued and outstanding Subscription Receipts shall be cancelled and the Escrowed Funds shall be used to pay holders of Subscription Receipts an amount equal to the issue price of the Subscription Receipts held by them (plus an amount equal to a pro rata share of any interest or other income earned thereon).

This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful, including any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act") or any state securities laws and may not be offered or sold within the United States or to, or for account or benefit of, U.S. Persons (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is available.

Transaction Details

The Transaction involves a reverse vesting structure under the Companies' Creditors Arrangement Act (Canada) (the "CCAA"), pursuant to which certain non-core assets and all the liabilities of Royal Helium and its subsidiaries will be transferred into a residual entity.

In accordance with the Amalgamation Agreement, Keranic will assume control of Royal Helium and will continue development and commercialization of the helium fields in Saskatchewan and Alberta, advancing projects currently owned by Royal Helium.

The Amalgamation Agreement proposes for Keranic to complete a reverse takeover of Royal Helium (the "RTO") in connection with the Sale Investment and Solicitation Process in the CCAA proceedings, with the purchase price to be funded by a combination of debt and equity. Pursuant to the Amalgamation Agreement, among other things, Keranic will amalgamate with a wholly owned subsidiary of Royal Helium and the Keranic Shares and Keranic Warrants will be exchanged for Class A common shares of Royal Helium ("Resulting Issuer Shares") and Class A common share purchase warrants of Royal Helium on economically equivalent terms as the Keranic Warrants. Royal Helium following closing of the Transaction (the "Resulting Issuer") will apply to have the Resulting Issuer Shares listed for trading on the TSX Venture Exchange (the "TSXV"), or such other recognized Canadian stock exchange.

The Transaction will be fully funded by a combination of: (i) a secured term loan, provided by a private lender, and (ii) the equity Offering.

Completion of the Transaction remains subject to, among other things, Court approval of the reverse vesting order and other customary conditions. Listing of the Resulting Issuer Shares is subject to the approval of the TSXV. There is no assurance that the Transaction will be completed as proposed or at all.

Further updates on the Transaction will be provided as material developments occur.

Advisors

Research Capital Corporation acted as financial advisor in connection with the Transaction. Syndicate Lending Corporation is acting as exclusive advisor to the Strategic Investor.

About Keranic Industrial Gas Inc.

Keranic is a Canadian industrial gas company focused on the production, purification, and commercialization of high-purity helium and associated gases. The Company is building a vertically integrated platform to serve strategic sectors such as aerospace, healthcare, and critical manufacturing, with a strong emphasis on carbon efficiency and regulatory alignment.

About Royal Helium Ltd.

Royal Helium is a helium exploration and production company with a strategic portfolio of assets across Western Canada. The company holds significant infrastructure and resource positions in known helium-producing formations.

Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable securities laws, including statements related to the negotiation and completion of a proposed amalgamation transaction, anticipated approvals from the TSX Venture Exchange and the Court of King's Bench of Alberta, the expected structure and outcome of the proposed reverse vesting transaction, the Company's capital raising efforts, and plans to restart operations at the Steveville facility. Forward-looking information is subject to known and unknown risks, uncertainties, and other factors that may cause actual events or results to differ materially from those expressed or implied. These risks include, but are not limited to, the ability to obtain necessary approvals, secure sufficient financing, enter into definitive agreements, and execute the transaction as contemplated. Readers are cautioned not to place undue reliance on forward-looking statements. Except as required by law, the Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/263362

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