Toronto, Ontario--(Newsfile Corp. - August 26, 2026) - Happy Belly Food Group Inc. (CSE: HBFG) (OTCQB: HBFGF) ("Happy Belly" or the "Company"), a leader in acquiring and scaling emerging food brands is pleased to announce its unaudited financial results and corporate update for the fiscal quarter ended June 30th, 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% compared to $16.2 million in the same quarter of fiscal 2025, and an increase of approximately 47% compared to $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% 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% compared to $5.4 million in the same quarter of fiscal 2025, and approximately 42% compared to $6.0 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 twelve 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% compared to $4.6 million in the same quarter of fiscal 2025, and approximately 36% compared to $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% compared to $0.7 million 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: Adjusted EBITDA* was $0.7 million during the second quarter of fiscal 2026, compared to $0.5 million in the same quarter of fiscal 2025.

• The Company maintained a strong liquidity position, with cash and cash equivalents of approximately $12.0 million as of June 30, 2026, compared to approximately $3.0 million at June 30, 2025. The large increase in cash position is reflective primarily of options and warrants exercised in the first 6 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 ongoing operations and working capital requirements.

Management Commentary

"In Q2 we delivered record QSR systemwide 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 1st US-based location in Lubbock, Texas, 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's Discussion and Analysis, available on SEDAR+ at www.sedarplus.ca.

FOOTNOTES:
*Adjusted EBITDA Is a non-IFRS financial measure which does not have a standardized meaning prescribed by IFRS. Adjusted EBITDA and Adjusted EBITDA Margin are used by management as supplemental measures to review and assess operating performance and to provide a more complete understanding of factors and trends impacting the Company's business. Management believes Adjusted EBITDA are useful measures of operating performance and the Company's ability to generate cash-based earnings, as they provide a more relevant position of operating results by excluding the effects of financing and investing activities, which removes the effects of interest, depreciation and amortization expenses as well as other expenses, as described, that are not reflective of the Company's underlying business. This non-IFRS measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Adjusted EBITDA is defined as net comprehensive income or (loss), excluding interest, taxes, depreciation and amortization (EBITDA), adjusted for share-based compensation, gain (loss) on equity investments and sublease, expected credit loss and non-recurring expenses.

Franchising
For franchising inquiries please see www.happybellyfg.com/franchise-with-us/ or contact us at hello@happybellyfg.com.

About Happy Belly Food Group
Happy Belly Food Group Inc. (CSE: HBFG) (OTCQB: HBFGF) ("Happy Belly" or the "Company") is a leader in acquiring and scaling emerging food brands across Canada.

Happy Belly 1

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Sean Black
Co-founder, Chief Executive Officer

Shawn Moniz
Co-founder, President

Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this press release, which has been prepared by management.

Cautionary Note Regarding Forward-Looking Statements

All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to the Company within the meaning of applicable securities laws. Forward-Looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur and include the future performance of Happy Belly and her subsidiaries. Forward-Looking statements are based on the opinions and estimates at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. There are uncertainties inherent in forward-looking information, including factors beyond the Company's control. There are no assurances that the business plans for Happy Belly described in this news release will come into effect on the terms or time frame described herein. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. For a description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company's Management's Discussion and Analysis and other disclosure filings with Canadian securities regulators, which are posted on www.sedarplus.ca.

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