Eshbal Signs Definitive Agreement to Acquire Majority Interest in NYC-Based Dare to Be Different Foods
Eshbal Functional Food Inc. (TSXV: ESBL) ("Eshbal" or the "Company") is pleased to announce that, further to its news release dated July 15, 2025, it has entered into a definitive share purchase agreement (the "Agreement") with Dare to be Different Foods, Inc. ("D2BD"), a U.S.-based company specializing in gluten-free, vegetable-forward food products, and the shareholders of D2BD (the "D2BD Shareholders") pursuant to which Eshbal will acquire a majority interest in D2BD (the "Transaction"). The execution of the Agreement reflects the next step in advancing Eshbal's strategic growth agenda.
D2BD was founded with a mission to create clean, simple and innovative alternatives to traditional comfort foods. It offers a range of gluten-free pizzas, gnocchi and crisps made from gluten-free ingredients, including cauliflower and broccoli. It has built a loyal consumer following thanks to its distinctive ingredient-led approach and focus on flavor and texture. D2BD shares Eshbal's product philosophy and commitment to innovation in the rapidly-growing "better-for-you" category.
D2BD's products are available in over 500 stores, which include Walmart stores in New York State and local stores throughout New York State, New Jersey and Connecticut. Eshbal will work to add its own brands to the catalogue of products that will be available to D2BD's stores.
The Transaction significantly advances Eshbal's stated North American expansion strategy. D2BD will enhance Eshbal's access to synergistic product lines, retail distribution local production facilities, as well as an experienced U.S. management team.
"Dare to Be Different Foods was built on simple, great-tasting ingredients and a fanatical focus on quality. Partnering with Eshbal opens the door to broader distribution, disciplined execution, as well as the resources to scale our most-loved products. We're excited about what this collaboration can unlock for retailers and consumers alike," said Marvin Jemal, Managing Director, Dare to Be Different Foods.
"The USA is the largest gluten-free market in the world, with growth continuing to be more than double that of overall grocery industry. This acquisition strengthens our North American footprint with a like-minded, high-quality brand," said Avi Markus, Chief Commercial Officer of Eshbal.
Eshbal intends to pursue additional transactions to consolidate high-quality, artisanal companies in the highly fragmented, gluten-free and broader "better for you" categories. The Company is seeking to build a "pure play" vehicle for investors to participate in a scaled portfolio of brands in this rapidly-growing category.
Share Purchase Agreement
Pursuant to the Agreement, Eshbal will acquire a 55% equity stake in D2BD by way of the acquisition of a) treasury shares of common stock of D2BD ("D2BD Shares") for an aggregate cash payment of US$248,000, with an initial payment on closing of the Transaction and the remaining payments to be made over a 12-month period, and b) a certain number of outstanding D2BD Shares held by D2BD Shareholders for the aggregate purchase price of US$180,000, to be paid by the issuance of 1,200,000 common shares of Eshbal ("Eshbal Shares") at the issue price of US$0.15 (CAD$0.21) on a pro rata basis, based on the last closing price of the Eshbal Shares on the TSX Venture Exchange immediately prior to the execution of the Agreement. As further consideration, Eshbal may issue additional Eshbal Shares to the D2BD Shareholders subject to the attainment of certain performance milestones of D2BD over a period of two years from the closing of the Transaction.
The Agreement sets out certain terms and conditions pursuant to which the Transaction will be completed. The Transaction remains subject to certain closing conditions, including, without limitation: (a) the entering into of a consulting agreement with a certain key executive of D2BD; (b) the receipt of all required regulatory approvals, including the TSX Venture Exchange; (c) each party's representations and warranties in the Agreement being true and correct in all respects as of the date of closing; and (d) each party completing its covenants and obligations as contained in the Agreement. There can be no guarantees that the Transaction will be completed as contemplated or at all. The Transaction is expected to in early December 2025.
All Eshbal Shares issued pursuant to the Transaction will be issued under prospectus exemptions pursuant to National Instrument 45-106 - Prospectus Exemptions and are subject to an applicable statutory hold period of four months and one day from the date of issuance. D2BD and the D2BD Shareholders are arm's length parties to the Company. No finders' fees shall be payable in connection with the Transaction. The Company shall not be assuming any long-term liabilities of D2BD.
The securities issued pursuant to the Transaction have not, nor will they be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons in the absence of U.S. registration or an applicable exemption from the U.S. registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in the United States or in any other jurisdiction in which such offer, solicitation or sale would be unlawful.
