Eshbal - Reports Results for the First Quarter of 2025

TSXV: ESBL

VANCOUVER, BC, June 2, 2025 /CNW/ - Eshbal Functional Food Inc. ("Eshbal" or the "Company")(formerly Hakken Capital Corp. "Hakken") (TSXV: ESBL.V), is pleased to announce that on May 30, 2025, the Company reported the financial results for the quarter ending March 31, 2025, of its recently acquired (the "Acquisition") Israeli wholly owned subsidiary, Eshbal Functional Food (Agricultural Cooperative) Ltd. ("Eshbal Israel").

As previously reported (See Press Release dated April 16, 2025), the Acquisition was completed on April 14, 2025, and the first financial statements to incorporate consolidated statements for both the Company and Eshbal Israel will be for the period ended June 30, 2025.

Yuval Levy, Chairman of Eshbal, commented:

The first quarter continued with a steady growth of nearly 10% reflecting the continuous trend in consumption of health-oriented food products, including gluten-free items. Eshbal Israel continues to benefit from this trend as a leading player within the Israeli market.

Although the Company incurred unusually high, non-operating expenses related to the reverse takeover (RTO) transaction with Hakken, Eshbal Israel still delivered improved financial results, demonstrating the strength and resilience of the company's core business.

We are currently in discussions regarding the potential acquisition of a business in Israel, with proprietary know-how and early-stage sales in the health food segment, particularly within the plant-based category. While we believe this opportunity, if completed, could complement our existing capabilities and enhance our product offering as we prepare to enter the North American market.

In line with our growth strategy—focused on both organic expansion and strategic M&A—we are also actively engaged in discussions with several parties in Israel and the U.S. whose operations and products, if successfully integrated or acquired, would broaden the company's portfolio and support a faster, more effective entry into North America.

There is, however, no assurance that the aforementioned discussions will lead to a finalized transaction."

The following are the highlights from Eshbal Israel's financial statements (The following disclosure does not constitute full disclosure of the Company's financial and operational condition and is qualified by, and should be read in conjunction with the Company's condensed interim financial statements and management discussion and analysis for the nine months ended March 31, 2025 and the condensed interim consolidated financial statements for the three months ended March 31, 2025 as well as the standalone financial statements of Eshbal Israel for the period ending March 31, 2025, available at sedarplus.ca:)

Q1 2025 Financial Highlights (all figures in CDN$)

Eshbal Israel delivered strong results for its first quarter, traditionally its strongest period of the year, due to heightened demand for Kosher for Passover and gluten-free products. Even within this seasonal peak, Q1 2025 marked a record-breaking quarter, achieving all-time highs in both revenues and gross profit margins.

• Revenues: Increased from $3.44 million in Q1 2024 compared to $3.75 million in Q1 2025, representing a 9% increase over the period.
• Gross Profit: Increased by 21%, rising from $908K in Q1 2024 to $1.098 million in Q1 2025. This improvement reflects not only higher absolute profit but also an enhancement in profitability relative to sales. Gross profit as a percentage of total sales increased from 26% to 29%, indicating improved cost efficiency and stronger operational performance.
• Operating Profit: Increased from $351 thousand in Q1 2024 compared to $434 thousand in Q1 2025, a 24% increase over the period. with the operating margin improving from 10.2% of total sales in Q1 2024 to 11.5% in Q1 2025
• Working Capital: Increased from $1.28 million as of December 31, 2024 compared to $1.63 million as of March 31, 2025 (this does not include proceeds from the financing, which was completed in April 2025 – See Company's press release dated April 16, 2025).

About Eshbal:
Eshbal Functional Food Ltd. is an Israeli-based food-tech company, originally established in 1940. The company operates a 60,000 sq. ft. state-of-the-art facility in Israel, specializing in the development and manufacturing of advanced "Better For You" food products. Eshbal's product portfolio includes gluten-free, vegan, low-carb, sugar-free, and superfood-based products, as well as a variety of dietary supplements.

Eshbal Israel has earned its reputation as an innovative and reliable player in the local functional food industry, with a strong emphasis on quality, health, and consumer wellness.

As of April 2025, Eshbal Israel became a wholly owned subsidiary of Eshbal Functional Food Inc., a Canadian public company traded on the TSX Venture Exchange. The combined company is committed to expanding its international footprint and strengthening its position as a global leader in the field of novel and functional nutrition.

Eshbal's mission is to improve quality of life through better food choices and accessible functional solutions.

Disclaimer: The TSX Venture Exchange Inc., has in no way passed upon the merits of the Company and has neither approved nor disapproved the contents of this press release. This press release contains "forward-looking statements" within the meaning of the securities laws. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions or variations of such words are intended to identify forward-looking statements. Forward-looking statements are not historical facts, and are based upon management's current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. Such expectations, beliefs and projections are expressed in good faith. However, there can be no assurance that management's expectations, beliefs and projections will be achieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking statements. Forward- looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements. For a more detailed description of the risks and uncertainties affecting the Company, reference is made to the Company's reports filed from time to time at sedarplus.ca. Forward-looking statements speak only as of the date the statements are made. The Company assumes no obligation to update forward- looking statements to reflect actual results, subsequent events or circumstances, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements. References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release. The Company is not responsible for the contents of third-party websites.

This press release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities described herein in the United States or elsewhere. These securities have not been, and will not be, registered in the United States Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States or to U.S. persons unless registered or exempt therefrom.

SOURCE Eshbal Functional Foods Inc

Contact Information - For further information please visit https://eshbalfoods.com or contact: Tomer Bar Meir, CEO, [email protected], [phone]