Eshbal Reports Financial Results for Q3 and Provides Corporate Update

TSXV: ESBL

• Gross Profit improved from 22% to 29% over the previous year's corresponding 3-month period. 
• Revenues increased by US$1.4 million or 16.1% over the corresponding previous year 9-month period.
• Gross profit improved from 22.8% to 27% compared with the 9-month period of the prior year.

VANCOUVER, BC, Dec. 1, 2025 /PRNewswire/ - Eshbal Functional Food Inc. (TSXV: ESBL) ("Eshbal" or the "Company"), a developer of gluten-free and health-focused food products, reported its consolidated financial results for the three- and nine-month periods ended September 30, 2025, The financial statements and MD&A  are available on SEDAR under the Company's profile.

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 Management Discussion and Analysis for the period ending Sep 30, 2025 and corresponding financial statements available at sedarplus.ca

2025 Third Quarter Financial Results
All figures are in U.S. Dollars unless otherwise indicated.

Strong revenue growth, significant margin expansion, and continued progress toward North American market entry

Revenue and Gross Margin:

For the third quarter, the three months ended September 30, 2025, the Company reported revenues of US$3.38 million, an increase of US$673 thousand, a 25% increase compared to US$2.7 million in the corresponding prior-year period. Gross profit improved to US$995 thousand (29% of revenues), compared to US$596 thousand (22% of revenues) in Q3, 2024.

For the nine months ended September 30, 2025, the Company reported revenues of US$10.1 million, an increase of US$1.4 million, a 16% increase compared to US$8.7 million in the corresponding prior-year period. Gross profit improved to US$2.7 million (27% of revenues), compared to US$2 million (22.8% of revenues) in the corresponding prior-year period.

For the nine months ended September 30, 2025, the Company reported EBITDA of US$679 thousand.

Operating and Net Profit:

Operating income for the nine-month period ended September 30, 2025 was US$127 thousand, remaining positive despite new public company costs introduced following the RTO, in comparison to the prior period results where Eshbal was a private company. Net results for the nine-month period ended September 30, 2025 were significantly impacted by a non-recurring US$2 million non-cash listing expense directly associated with the RTO transaction that accrued in April 2025. As a result, the Company reported a net loss of US$507 thousand for Q3, 2025 and US$2.1 million for the nine-month period ended September 30, 2025.

Eshbal Israel, the Company's operating subsidiary, remained profitable during the period, demonstrating strong year-over-year improvement across all key lines — with revenues in New Israeli Shekels increasing by approximately 10%, gross margin expanding to 25%, and net profit rising by more than 50% in local-currency terms to approximately  6% of revenue.

Management views the reported net loss during this period as not representative of future results but rather a one-time loss as a result of the accounting impact of the listing Transaction.

Business Update

Eshbal continues to advance its North American expansion strategy. Key developments include:

• Definitive agreement signed to acquire a majority interest in D2BD Foods (New York), providing initial distribution access in key U.S. retail channels upon closing.
• Strengthened commercial presence in North America, supported by the Company's senior commercial leadership and dedicated broker relationships for bringing Eshbal's flagship gluten-free Pita Bread and additional products to market.
• Preparation for local manufacturing, expected to commence in Q1, 2026, to support scale, logistics and cost efficiency for North American operations.

These operational steps reflect the Company's long-term strategy to enter the North American market with a scalable product platform and established demand.

Tomer Bar Meir, CEO of Eshbal, stated:

"Q3 reinforces the strength of our core Israeli operation: Revenue is growing, production is more efficient and margins continue to improve. These results reflect real demand and operational efficiency and discipline.

While consolidated results are influenced by currency fluctuations and listing-related accounting and one-time items, our underlying fundamentals remain strong. We are focused on expanding our North American footprint, enhancing operational efficiency, and executing our M&A-driven growth strategy"

Outlook

The Company is prioritizing continued development of its Israeli operations with an emphasis on scale, margin optimization, and product expansion. In North America, management will focus on advancing manufacturing arrangements, launching initial gluten-free products, and progressing strategic integration initiatives. These efforts are intended to support sustainable long-term growth and strengthen the Company's position in the better-for-you category.

About Eshbal Functional Food

Eshbal Functional Food is an innovative and profitable food-tech company with over 300 SKUs in the gluten-free and "Better for You" categories. Eshbal generated more than USD $11 million in revenue in 2024 and is seeking to consolidate companies in the artisanal, gluten-free market.

Looking ahead, Eshbal continues to advance its strategic efforts in North America, focusing on organic growth initiatives, evaluating M&A opportunities, and expanding its presence in the growing "better-for-you" food category. The Company remains committed to executing its plans efficiently and aligning its operations with long-term growth opportunities in the gluten-free and health-focused food markets.

To learn more, visit: https://EshbalFoods.com

Disclaimers: 

Neither the TSX Venture Exchange Inc., nor its Regulation Servicer provider accepts responsibility for the adequacy or accuracy of this 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