Mr. Sean Black reports

HAPPY BELLY FOOD GROUP ENTERS INTO DEFINITIVE AGREEMENT IN RESPECT OF CALL OPTION TO PURCHASE REMAINING 50% OF HEAL WELLNESS

Happy Belly Food Group Inc. has entered into a definitive share purchase agreement effective as of Oct. 9, 2025 (the SPA), and currently held in escrow, pursuant to which it will acquire the remaining 50-per-cent ownership interest in Heal Lifestyle Inc. (Heal Wellness), such that upon closing of the acquisition, the company will own 100 per cent of Heal Wellness. Heal Wellness is a quick-service restaurant (QSR) brand specializing in fresh smoothie bowls, acai bowls and smoothies.

As previously announced on May 9, 2022, the company acquired a controlling interest in Heal Wellness by entering into a share exchange agreement on May 5, 2022, with Heal Wellness, the shareholders of the Heal Wellness (vendors) and 1000193142 Ontario Inc. (JVCo). Pursuant to the agreement:

• JVCo acquired all of the issued and outstanding securities in the capital of Heal Wellness from the vendors, in exchange for 200 common shares (the JVCo shares) of JVCo.
• Happy Belly subscribed for 200 JVCo shares in exchange for 2,777,777 common shares in the capital of the Happy Belly, with each Happy Belly share valued at nine cents, representing a subscription value for the 200 JVCo shares of $250,000.
• The vendors, Happy Belly and JVCo entered into a shareholders agreement providing, among other things, a call option granting Happy Belly the right to acquire the other 50 per cent of JVCo from the vendors (the JVCo call option).

"Upon initial acquisition, Heal operated two smoothie bowl and acai locations in Ontario. Over the past three years, Heal has evolved from a promising joint venture into a business that is delivering consistent financial performance, rapid unit expansion and a strong franchise pipeline across Canada and into the United States," said Sean Black, chief executive officer of Happy Belly. "The brand has grown from its initial two locations to 27 operating stores nationwide, while developing a robust pipeline of 168 additional locations under signed agreements.

"Heal has signed area development agreements across all 10 Canadian provinces, ensuring national presence through both corporate and franchise models while international expansion has begun with a 10-unit development agreement in Dallas-Fort Worth, Tex., marking the brand's first entry into the U.S. market. Happy Belly's asset-light franchise program has been central to Heal's rapid scaling, leveraging area developers and multiunit operators to fuel growth while preserving capital.

"Heal Wellness has become a cornerstone of our portfolio, proving that our model of identifying, scaling and franchising emerging restaurant brands works. Today's announcement is not only validation of our growth model, but also another step toward realizing our vision of making Heal Wellness North America's leading smoothie bowl chain, measured both by scale and strong unit economics with international expansion under way. This trajectory reflects not only consumer demand for wellness-forward dining but also our disciplined approach to growth that creates lasting value for our shareholders."

Acquisition details

On May 6, 2025, Happy Belly delivered notice to the vendors that it intended to exercise the JVCo call option. On Oct. 1, 2025, the vendors, Happy Belly and JVCo entered into the SPA, which agreement is effective as of Oct. 9, 2025, and currently held in escrow. Pursuant to the SPA, the company will acquire 200 JVCo shares from the vendors for an aggregate purchase price of $3,896,948, subject to certain adjustments. The purchase price will be settled through (a) the transfer of an aggregate of 2,777,777 previously issued Happy Belly shares held by JVCo to the vendors and (b) the issuance of an aggregate of 613,469 Happy Belly shares from treasury to the vendors. Upon closing of the transaction, both JVCo and the Heal operating entity will be wholly owned subsidiaries of Happy Belly.

The company is at arm's length from the vendors. The acquisition is expected to close on Oct. 9, 2025, and will not constitute a fundamental change for the company and will not result in a change of control of the company (within the meaning of applicable securities laws and the policies of the Canadian Securities Exchange). No finder's fee is payable in connection with the acquisition. The 613,469 Happy Belly shares issued to the vendors shall be subject to restrictions on resale until the date which is four months and one day from the closing date of the acquisition.

About Heal Lifestyle Inc. (known as Heal Wellness)

Heal Wellness was founded with a passion and mission to provide quick, fresh wellness foods that support a busy and active lifestyle. It currently offers a diverse range of smoothie bowls and smoothies. It takes pride in meticulously selecting every superfood ingredient on its menu to fuel the body, including acai smoothie bowls, smoothies and superseed grain bowls. Its smoothie bowls are crafted with real fruit and enriched with superfoods like acai, pitaya, goji berries, chia seeds and more.

About Happy Belly Food Group Inc.

Happy Belly Food Group is a leader in acquiring and scaling emerging food brands across Canada.

We seek Safe Harbor.