Vancouver, British Columbia--(Newsfile Corp. - October 9, 2026) - Purebread Brands Inc. (TSXV: BRED) ("Purebread Brands" or the "Company") and Caffè Artigiano today announced they have signed a letter of intent with an arms' length party under which Purebread Brands proposes to acquire Caffè Artigiano's café business, including its corporate and franchise operations in Canada.

The proposed transaction would bring together two established British Columbia bakery and café brands and significantly increase the scale of Purebread Brands' operating platform.

The combined business would include 16 company-operated bakery and café locations together with Caffè Artigiano's 11-location franchise network, representing a combined system of 27 locations. Caffè Artigiano also has 7 additional locations in its development pipeline.

The proposed transaction would bring Caffè Artigiano into the Purebread Brands portfolio, creating a larger platform positioned for continued growth. Led by CEO Christian Bullock, Purebread Brands has built an experienced leadership team across hospitality, culinary innovation, operations, marketing and business development. That leadership will support Artigiano's next stage of growth, while Artigiano's team adds deep specialty coffee expertise to the combined organization.

"Caffè Artigiano is one of the most recognized names in Canadian coffee. For more than 25 years, it has shaped Vancouver's café culture, and under Dean Shillington's leadership, it has continued to set the standard with real care and conviction," said Christian Bullock, Chief Executive Officer of Purebread Brands.

"Artigiano is a natural fit for our family of brands, sharing the same commitment to craft, quality and community that has guided Purebread from day one. Bringing these businesses together gives us immediate scale, a 27-location operating and franchise network and a strong pipeline for continued growth. We believe the combination gives both brands the talent, infrastructure and reach to enter new communities without losing what made people fall in love with them in the first place."

The acquisition positions Purebread Brands for its next stage of growth, uniting two of B.C.'s most recognized bakery and café brands under one organization while maintaining the qualities that define each.

The combination creates opportunities to increase utilization of Purebread's bakery production capabilities across a larger café network, expand distribution of Purebread products and generate efficiencies across purchasing, production, distribution, marketing and administration.

"Caffè Artigiano and Purebread share the same instinct: do the simple things exceptionally well and stay true to the product," said Dean Shillington, President and CEO of Artigiano. "Purebread has built one of the most authentic bakery brands in Western Canada. Together, our brands create a solid foundation for growth and a unique opportunity for our team and guests to become owners in the future success of the business."

Transaction Terms

Pursuant to the proposed transaction (the "Transaction"), Purebread will acquire all of the issued and outstanding shares of Caffe Artigiano Inc., Artigiano Franchise Inc. and certain related companies (collectively, the "Targets") in consideration for the issuance to the vendors (the "Vendors") of such number of common shares of Purebread (the "Consideration Shares") as will represent 49.0% of the issued and outstanding common shares immediately following closing of the Transaction (the "Closing") at a price of $0.125 per Consideration Share. The number of Consideration Shares will be determined immediately prior to Closing and is subject to adjustment. Based on the number of common shares issued and outstanding as of the date hereof, the Company anticipates issuing approximately 61,578,491 Consideration Shares in connection with the Transaction, representing an aggregate transaction value of approximately $7.7 million.

It is anticipated that an intercompany payable of up to $4,000,000 owing by one of the Targets will remain outstanding as an obligation of such Target following closing (the "Intercompany Debt"). The parties anticipate entering into an intellectual property licence, rental and purchase agreement (the "IP Agreement") at Closing, pursuant to which the Vendors will retain certain intellectual property rights and license such rights to Purebread, with payments thereunder satisfying the Intercompany Debt. Upon satisfaction of the Intercompany Debt, Purebread will acquire the licensed intellectual property rights. Additional terms, including interest and repayment terms, will be confirmed by the parties in the definitive transaction agreements.

Existing credit facilities of the Targets with Royal Bank of Canada in the amount of approximately $1,700,000 are expected to remain in place following Closing.

It is further anticipated that the Vendors will complete a pre-closing reorganization, pursuant to which, the Targets will be reorganized such that the Vendors will retain the intellectual property rights subject to the IP Agreement and certain real property interests.

On closing, the Vendors will have the right to nominate one director (the "Vendor Nominee") to Purebread's board of directors and shall retain this right for so long as the Vendors and their affiliates hold at least 10% of the outstanding common shares of Purebread. In addition, it is anticipated that the Vendors, and any designees receiving Consideration Shares, will enter into voting support and standstill agreements, pursuant to which such persons shall agree, for a period of 12 months: (i) to abstain from voting their shares on any resolution to appoint the board of directors of Purebread, other than the Vendor Nominee; and (ii) that they will not, without the approval of Purebread's independent directors, acquire more than a 49.9% interest in the outstanding common shares of Purebread, solicit proxies or otherwise seek to control Purebread, subject to customary exceptions.

The parties have agreed to negotiate exclusively until the earliest of execution of definitive agreements, termination of the letter of intent, and December 15, 2026. Completion of the Transaction is subject to, among other things: completion of satisfactory due diligence by Purebread; negotiation and execution of definitive transaction agreements; TSX Venture Exchange ("TSXV") acceptance; receipt of all required board, shareholder, lender, landlord and other third-party approvals; completion of the pre-closing reorganization; Purebread addressing its existing material liabilities to the Vendors' satisfaction; and other customary closing conditions. Subject to a determination by the TSXV, the parties anticipate that the Transaction will be considered a "Fundamental Acquisition" by Purebread, as such term is defined under TSXV Policy 5.3 - Acquisitions and Dispositions of Non-Cash Assets, by virtue of the Transaction resulting in new insiders of Purebread as a result of the appointment of the Vendor Nominee as well as certain persons receiving Consideration Shares resulting in post-Closing holdings in excess of 10% of the issued and outstanding common shares of the Company. It is further anticipated that the Transaction will result in the creation of a new Control Person (as defined under TSXV policies). Creation of the new Control Person shall be subject to receipt of Purebread shareholder approval.

The parties do not anticipate completing a concurrent financing or, except as disclosed above, any other transactions in connection with the Transaction and no finder's fees are payable in connection with the Transaction. As the proposed Transaction is between arms' length parties, the Transaction is not considered a related party transaction and is not anticipated to require a formal valuation or majority of the minority shareholder approval under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions.

Further details regarding the Transaction will be announced following the execution of the definitive agreements.

About Caffè Artigiano

Founded in 1999, Caffè Artigiano helped shape Vancouver's modern coffee culture and elevate the craft of the barista. From the beginning, its cafés have been designed as neighbourhood gathering places built around quality coffee, food and hospitality.

The Caffè Artigiano business included in the proposed transaction currently comprises 9 company-operated cafés and a 11-location franchise network, with 7 additional locations in its development pipeline.

About Purebread Brands Inc.

Purebread Brands Inc. is the parent company of Purebread, one of Canada's leading premium artisan bakery and café brands, known for handcrafted baked goods, premium ingredients and its signature abundant displays.

Purebread currently operates seven bakery and café locations across British Columbia and has developed centralized bakery production capabilities to support continued retail expansion.

Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable Canadian securities laws. Forward-looking information in this news release includes, but is not limited to, statements regarding: the proposed Transaction and its terms; the anticipated completion and timing of the Transaction; the negotiation and execution of definitive transaction agreements; the number of Consideration Shares to be issued and any adjustment thereto; the Intercompany Debt, the IP Agreement and the anticipated terms thereof; the expected continuation of the Targets' existing credit facilities; the proposed pre-closing reorganization; the Vendor Nominee and the anticipated voting support and standstill agreements; the receipt of TSX Venture Exchange acceptance and all required board, shareholder, lender, landlord and other third-party approvals; the combined business, including the number of company-operated and franchised locations and planned new locations in the development pipeline; and the anticipated growth, synergies, operating efficiencies and other benefits of the Transaction. Forward-looking information is often, but not always, identified by words such as "will", "would", "expects", "anticipates", "proposes", "intends", "believes", "plans", "potential" and similar expressions.

Forward-looking information is based on the opinions, estimates and assumptions of management as of the date of this news release, including assumptions that: the parties will complete satisfactory due diligence and negotiate and execute definitive transaction agreements on the anticipated terms; all required regulatory, stock exchange, shareholder, lender, landlord and other third-party approvals will be obtained in a timely manner; the conditions to Closing will be satisfied; the Company will address its existing material liabilities to the Vendors' satisfaction; the pre-closing reorganization will be completed as anticipated; and the Company will be able to successfully integrate the Targets and realize the anticipated benefits of the Transaction. Although management believes these assumptions are reasonable, they may prove to be incorrect.

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied, including: the risk that the Transaction is not completed on the terms described or at all; the non-binding nature of certain terms and the possibility that definitive agreements are not executed; failure to obtain required approvals or satisfy conditions to Closing; adjustments to the number of Consideration Shares and dilution to existing shareholders; the Company's ability to address its existing liabilities; risks relating to the Intercompany Debt, the IP Agreement and the Targets' credit facilities; difficulties in integrating the businesses and achieving anticipated synergies; the risk that planned locations are delayed or not opened; dependence on key personnel and franchisees; competition; changes in consumer demand, input costs and general economic conditions; and other risks described in the Company's public disclosure documents available on SEDAR+ at www.sedarplus.ca.

Readers are cautioned not to place undue reliance on forward-looking information. The forward-looking information in this news release is made as of the date hereof, and the Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. The forward-looking information contained in this news release is expressly qualified by this cautionary statement.

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