Mr. Sean Black reports

HAPPY BELLY FOOD GROUP REPORTS RECORD RESULTS OF $28.4M IN Q2 SYSTEM WIDE QSR SALES WITH YEAR OVER YEAR GROWTH OF 75%

Happy Belly Food Group Inc. has released its unaudited financial results and corporate update for the fiscal quarter ended June 30, 2026.

Q2 2026 financial and recent business highlights:

• System-wide sales growth: Happy Belly generated record system-wide sales across its quick service restaurant (QSR) portfolio of $28.4-million in the second quarter of fiscal 2026, representing an increase of approximately 75 per cent compared with $16.2-million in the same quarter of fiscal 2025 and an increase of approximately 47 per cent compared with $19.3-million in the first quarter of fiscal 2026. The continued increase in system-wide sales reflects a combination of organic sales growth across the company's existing restaurant base and the continued expansion of its restaurant network.
• At June 30, 2026, the company had 95 operating restaurants, representing an increase of approximately 53 per cent from 62 operating restaurants in the prior-year period. The growth in both restaurant count and system-wide sales demonstrates the increasing scale of the company's QSR portfolio as new locations continue to open and contribute to overall system performance.
• Revenue growth: Total operating revenues, services, interest income and rebates were a record $8.5-million in the second quarter of fiscal 2026, representing an increase of approximately 57 per cent compared with $5.4-million in the same quarter of fiscal 2025 and approximately 42 per cent compared with $6-million in the first quarter of fiscal 2026. The year-over-year increase reflects continued growth in the company's QSR operations, contributions from businesses acquired during the preceding 12 months, increased revenues generated from a larger restaurant network, and incremental royalties and franchise-related revenues resulting from new restaurant openings.
• The sequential increase from the first quarter further reflects the continued ramp-up of recently opened restaurants and the growing contribution from the company's expanding franchise system.
• Product sales and franchise revenue: Total product sales were a record $6.4-million in the second quarter of fiscal 2026, representing an increase of approximately 39 per cent compared with $4.6-million in the same quarter of fiscal 2025 and approximately 36 per cent compared with $4.7-million in the first quarter of fiscal 2026.
• In addition, royalties and franchise fee revenues increased to a record $1.6-million during the second quarter of fiscal 2026, representing growth of approximately 129 per cent compared with $700,000 in the prior-year period.
• The significant increase in royalties and franchise fees reflects the continued expansion of Happy Belly's franchised restaurant base and the corresponding increase in system-wide sales upon which royalty revenues are generated. The increasing contribution from royalties and franchise fees is consistent with the company's continued execution of its franchise-led, asset-light growth strategy.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): Adjusted EBITDA was $700,000 during the second quarter of fiscal 2026, compared with $500,000 in the same quarter of fiscal 2025.
• The company maintained a strong liquidity position, with cash and cash equivalents of approximately $12-million as of June 30, 2026, compared with approximately $3-million at June 30, 2025. The large increase in cash position is reflective primarily of options and warrants exercised in the first six months of 2026, alongside increased operating revenues, franchise revenues, services, interest income and rebates.
• The strengthened cash position provides Happy Belly with financial flexibility to continue supporting its organic growth initiatives while maintaining sufficient liquidity to support the company's continuing operations and working capital requirements.

Management commentary

"In Q2, we delivered record QSR system-wide sales, announced our largest-ever area development deal and ended the quarter with a record cash balance, all done while making critical investments back into our business. We are continuing our momentum into the back half of 2026 with a full slate of openings including our first U.S.-based location in Lubbock, Tex., across from Texas Tech University that is only weeks away. We are just getting started," said Sean Black, chief executive officer of Happy Belly Food Group.

Full details of the financial reports and operating results for the second quarter of fiscal 2026, are described in the company's consolidated financial statements with accompanying notes and related management discussion and analysis, available on SEDAR+.

Franchising

For franchising inquiries, please see Happy Belly's website or contact the company at hello@happybellyfg.com.

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.