Happy Belly closes earnout with Via Cibo

Mr. Sean Black reports HAPPY BELLY FOOD GROUP CLOSES EARN-OUT AGREEMENT OF VIA CIBO RESTAURANT CHAIN Happy Belly Food Group Inc. has closed the earnout agreement regarding the acquisition of the Via Cibo Restaurant Chain. Via Cibo delivers fast-casual Italian street food crafted with the finest traditional ingredients, offering a chef-driven culinary experience for anyone seeking fresh, authentic flavour. "Since the accretive acquisition of Via Cibo in early 2024, the brand has accelerated within our franchising framework. Via Cibo, like all brands that join the Happy Belly family has integrated with our favourable supplier contracts, rebate system integration, ordering and logistical systems, leveraged shared resources encompassing culinary, accounting and marketing staff for increased labour and productivity efficiencies, and much more," said Sean Black, chief executive officer of Happy Belly. The integration has yielded a realized increased EBITDA for the brand while maintaining a customer first approach to serving a great product with great value. We have grown the Via Cibo footprint with a newly opened location in the Barrhaven region in the city of Ottawa. We have signed our second new franchisee since acquisition for the Niagara Falls region of Ontario, and we have added a 15-unit area development agreement in Ontario to our growth plan. It's been a very good year for the Via Cibo brand, and for Happy Belly. "Our asset-light franchise model enables Happy Belly to continue accelerating growth across all our brands. With a strong foundation, strategic leadership and a dedicated franchise support system, we are well positioned to drive sustained success in the Canadian QSR market. This is another step forward in our mission to become a predictable and disciplined growth company, Canada's leading restaurant consolidator. "We look forward to continuing to execute on our franchising model as we accelerate our growth organically and inorganically through accretive M&A. Our team is committed to sourcing and evaluating premium real estate, reviewing franchisee applications, and collaborating closely with area developers to support growth. We currently have 626 contractually committed retail franchise locations from area developers across all emerging brands in the Happy Belly Food Group portfolio including those in development, under construction or already open. We are working to actively expand this pipeline with our disciplined approach to growth. "We are just getting started," said Mr. Black. Earnout details The Via Cibo business entity recognized, on a normalized EBITDA (earnings before interest, taxes, depreciation and amortization) basis for the 2024 earnout year, an increase of $85,805 above the estimated $75,000 of forecasted EBITDA. As per the terms of the agreement the increase in normalized EBITDA is to be paid out at a six times multiple. This yields a $514,830 amount owed to the sellers whom have elected to received the payment in shares of Happy Belly at a record 10-day VWAP (volume-weighted average price) of $1.29 leading up to the signing and finalization of the agreement. The company anticipates this transaction to close in five business days at which time Happy Belly will issue 399,093 common shares to satisfy the close of the agreement. Some of the Via Cibo principals, being Alex Rechichi and Mr. Black, are directors of the company, and therefore the transaction constitutes a related party transaction under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions (MI 61-101). The company is relying on exemptions from the formal valuation and minority approval requirements of MI 61-101 based on a determination that the securities of the company are listed on the Canadian Securities Exchange and that neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction, in so far as it involves interested parties, exceeds 25 per cent of the market capitalization of the company. Pursuant to MI 61-101, the company will file a material change report providing disclosure in relation to each related party transaction on SEDAR+ under the company's issuer profile. The company did not file the material change report more than 21 days before the expected closing date of the transaction as the details of the transaction and the participation therein by each related party of the company were not settled until shortly prior to the closing of the transaction, and the company wished to close thetransaction on an expedited basis for sound business reasons. About Via Cibo Via Cibo, an all-franchised system, is an asset-light entity with established street-front real estate locations in both Ontario and Alberta. Authentic Italian Street food, made with the best traditional ingredients for those looking for fast, fresh food that respects tradition via a chef driven full-service restaurant without the full service. At Via Cibo you can enjoy an authentic Italian meal that does not require hours of your time or a great amount of money. Via Cibo is a fast casual restaurant which offers an experience tailored to your needs. 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.