Eshbal Reports First Consolidated Financial Results Following RTO and Provides Corporate Update

Eshbal Functional Food Inc. (TSXV: ESBL) ("Eshbal" or the "Company"), a developer of gluten-free and health-focused food products, today reported its first consolidated financial results following completion of its April 2025 reverse takeover (the "RTO") and provides a corporate update regarding ongoing business activities.

Financial Results Discussion

(The following disclosure does not constitute full disclosure of the Company's financial and operational condition and is qualified by, and should be read in conjunction with, the Company's Management Discussion and Analysis for the period ending June 30, 2025 and corresponding financial statements available at sedarplus.ca)

The second quarter ("Q2") of 2025 represents the Company's first set of consolidated financial statements following completion of the RTO. As such, the Q2 2025 figures include the results of Eshbal Functional Food Inc. (following the RTO) together with its Israeli operating subsidiary, while the comparative period in 2024 reflects only the standalone performance of Eshbal Israel (Agricultural Cooperative) Ltd. ("Eshbal Israel"). Accordingly, year-over-year comparisons should be interpreted with caution.

For the three months ended June 30, 2025, the Company reported revenues of US$2.97 million, an increase of US$413 thousand over US$2.55 million in the corresponding prior-year period. Gross profit improved to US$628 thousand (21.2% of revenues), compared to US$478 thousand (18.7% of revenues) in Q2 2024, reflecting both higher absolute profit and stronger margins.

For the six-month period ended June 30, 2025, revenues totaled US$6.72 million, up from US$5.99 million in the first half of 2024, an increase of US$725 thousand (12%). Gross profit rose to US$1.73 million (25.7% of revenues), compared to US$1.39 million (23.1% of revenues) in the prior year, representing approximately 25% growth.

Operating income for the six-month period ended June 30, 2025 was US$204 thousand, remaining positive despite new public company costs introduced following the RTO. Net results for both Q2 2025 and the six month period ended June 30, 2025 were significantly impacted by a non-recurring US$1.69 million non-cash listing expense directly associated with the RTO transaction. As a result, the Company reported a net loss of US$2.0 million for Q2 2025 and US$1.61 million for the six month period ended June 30, 2025. In addition, the Company notes that the news release, published on July 3, 2025, in which we announced the signing of a letter of intent between the Company and GF Nation did not mature to a final agreement.

Investor Relations Clarification

The Company wishes to provide expanded disclosure to its news release of June 28, 2025. The Company advises that Fairfax Partners Inc. ("Fairfax"), a company located in Vancouver, British Columbia, has not and will not receive any securities of the Company as compensation and that the Company is unrelated and unaffiliated to Fairfax. Neither Farirfax nor any of its principals has an interest, directly or indirectly, in any securities of the Company, or any right or intent to acquire such an interest. Further information about Fairfax can be found at www.fairfax.partners.