Happy Belly Food Group Exercises Right to Acquire Remaining 50% of Heal Wellness QSR

Rhea-AI Summary

Happy Belly Food Group (HBFGF) has exercised its right to acquire the remaining 50% of Heal Wellness, a QSR specializing in smoothie bowls, making it a wholly-owned subsidiary. The acquisition comes three years after initially purchasing 50% of Heal for $250,000 in stock. Under the joint venture, Heal has experienced remarkable growth, expanding from 2 to 20 locations (6 corporate, 14 franchised) with a development pipeline of 130 units across Canada. The company's TTM EBITDA has reached $750,000 CDN, up significantly from the projected $230,000 CDN three years ago. The remaining 50% will be acquired at a 3.75x TTM EBITDA multiple, funded through Happy Belly shares at current market value. Heal co-founder Jesse Davidson will join Happy Belly full-time as Brand Leader. The transaction is expected to close by end of July.

Positive

• Significant growth from 2 to 20 locations in three years, with 130 units in development pipeline
• Strong EBITDA growth to $750,000 CDN TTM from projected $230,000 CDN three years ago
• Acquisition funded through existing shares, requiring no additional cash outlay
• 10x gain on invested share capital from initial investment
• Plans to double both store count and EBITDA within next 12-18 months
• Total portfolio has 531 units under development agreements

Negative

• Transaction closing details and final reconciliations still pending
• Share-based acquisition may lead to dilution for existing shareholders

Toronto, Ontario--(Newsfile Corp. - May 6, 2025) - Happy Belly Food Group Inc. (CSE: HBFG) (OTCQB: HBFGF) ("Happy Belly" or the "Company"), a leader in acquiring and scaling emerging food brands across Canada is pleased to announce that as of May 6^th, 2025, it has exercised its right to acquire the remaining 50% of Heal Wellness ("Heal"), making the brand a 100% wholly owned subsidiary of Happy Belly. Heal is a fresh smoothie bowls, acai bowls, and smoothies quick serve restaurant ("QSR").

"Three years ago to the day, Happy Belly signed a deal with the founding partners of Heal Wellness to enter into a joint venture for the purpose of operationalizing the business, preparing it for growth, and scaling the business. I am very proud of the results that we have achieved so far having successfully grown the business 10x, having grown from 2 locations to 20 locations (6 corporate and 14 franchised), with a significant amount still to open in 2025-2026. Backed by a development pipeline of 130 units across Canada, interest from both franchisees and landlords is rapidly increasing-paving the way for sustained and scalable organic growth coast to coast. This milestone is a clear reflection of what's possible when you have the 3 P's…people, process, and product," said Sean Black, Chief Executive Officer of Happy Belly.

"As a part of this transaction Heal Co-Founder Jesse Davidson will join the Happy Belly team full time and will be promoted to Brand Leader of Heal Wellness. The Heal Wellness concept has hit an inflection point of true hockey stick growth both in net new units (unit count) and in EBITDA in 2025. Which is why we've proactively invested in top-tier talent to support Jesse and the team as they manage the growing demand across Canada. Our franchise network continues to expand at a rapid pace, with new interest and inquiries coming in from across the country each week."

"Acquiring the remaining 50% of Heal Wellness is a significant milestone for Happy Belly and provides shareholders a more detailed view of our joint-venture acquisition strategy. Happy Belly acquired 50% of Heal Wellness three years ago for a non-cash investment of $250,000 in Happy Belly stock (valued at $0.09 per share) into the joint venture. This represented a 2.2x multiple of EBITDA, with a projected forward twelve-month EBITDA of $230,000 CDN. After working together for the past three years using only the cashflow generated from the Heal business (Happy Belly capital not required), the business has transformed both in scale and footprint generating an impressive estimated $750,000.00 CDN in trailing twelve-month EBITDA ("TTM EBITDA"). Happy Belly will acquire the remaining 50% of the business on a debt-free basis at a multiple of 3.75x TTM EBITDA. Happy Belly intends to satisfy the purchase price by transferring its 50% ownership of the JVCo's existing Happy Belly shares to the Heal Vendors. The value of the shares will be recognized at current market values and transferred on the day of close of this transaction. Final transaction details to be announced at the close of the transaction after all reconciliations are completed (estimated to be completed by end of July)."

"The value our management team has created is evident not only in Heal's record EBITDA but also in the increased shareholder value of Happy Belly. By leveraging our share price appreciation to acquire the remaining 50%, we are realizing a 10x gain on invested share capital. With plans to double both our store count and EBITDA within the next 12-18 months, this transaction delivers an exceptional return on invested capital-using existing shares on our cap table to fund the majority of the transaction. We look forward to executing more transactions like this in the future."

"This transaction validates the value Happy Belly creates for our joint venture partners and validates our acquisition strategy based on reduced risk when partnering with founders. Our model paves the way for sustained and predictable M&A growth across our portfolio of emerging brands. By balancing organic expansion in our core markets with a nationwide rollout, we're positioned to deliver long-term value. We're confident our multi-brand platform will drive strong results, attract top-tier franchise partners, and secure prime real-estate opportunities across Canada."

"Our accelerated franchising model-validated by strong organic gains-is tailor-made for scaling emerging brands. Our portfolio has 531 units under development agreements, clearly setting the path forward for several years of predictable organic growth for Happy Belly charting a clear course for sustained expansion. As we roll out additional franchise locations, we anticipate significant contributions to both revenue and profitability for Happy Belly."

We are just getting started.

About Heal Wellness

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

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 Food Group

To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/6625/250963_b2f1c04764e2fbbe_002full.jpg

Sean Black
Chief Executive Officer

Shawn Moniz
Chief Operating Officer

FOR FURTHER INFORMATION, PLEASE VISIT:

www: www.happybellyfg.com or email hello@happybellyfg.com
If you wish to contact us please call: 1-877-589-8805

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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/250963

FAQ

What is the acquisition price for Happy Belly's (HBFGF) remaining 50% stake in Heal Wellness?

The remaining 50% will be acquired at 3.75x TTM EBITDA ($750,000 CDN), to be satisfied through transfer of Happy Belly shares at current market values.

How many Heal Wellness locations are currently operating under Happy Belly (HBFGF)?

Heal Wellness currently operates 20 locations, consisting of 6 corporate-owned and 14 franchised locations.

What was Happy Belly's (HBFGF) initial investment in Heal Wellness?

Happy Belly initially acquired 50% of Heal Wellness three years ago for $250,000 in Happy Belly stock, valued at $0.09 per share.

What is Heal Wellness's current EBITDA under Happy Belly (HBFGF)?

Heal Wellness is generating an estimated $750,000 CDN in trailing twelve-month EBITDA.

How many future Heal Wellness locations are planned under Happy Belly (HBFGF)?

Heal Wellness has a development pipeline of 130 units across Canada.