As previously disclosed on November 17, 2023 and December 13, 2023, a customer of Divergent Energy Services Corp. (TSXV:DVG) that accounts for approximately 80% of the Company?s recent sales continues to experience a material slow down in their business due to low natural gas prices. The customer, who is undergoing a restructuring and sales process, has informed the Company that they continue to prioritize payments to certain critical infrastructure vendors such as power, compression, and pipeline companies over Divergent, and as such Divergent has not received any payments during 2024 and has unpaid invoices dating back to July 2023.

Although the Company continued to perform work for its other customers, the revenue generated in 2024 has been insufficient to cover the costs of ongoing operations. The resulting uncertainty has caused the resignation of a number of key employees in Divergent's U.S. operating subsidiary, Extreme Pump Solutions, LLC ("Extreme"). Extreme has entered into and completed an agreement to sell certain non-core assets for proceeds of $140,000 in order to generate cashflow while the Company continues to wait on its key customer to re-engage its services and to review all other strategic alternatives that may be available.

The Company's evaluation of strategic alternatives could result in a sale of the Company, a sale of a material portion of the Company's assets, a merger, business combination or a corporate reorganization, among other alternatives. The Company may also seek to obtain value for its tax losses and/or outstanding receivables. The Company does not intend to disclose developments with respect to the strategic review process unless and until the Board of Directors has approved a definitive transaction or strategic option, unless otherwise required by law or disclosure of which is deemed appropriate.

The Company cautions that there are no guarantees that the strategic review will result in a transaction or if a transaction is undertaken, as to its terms or timing.