Company Announcements

VANCOUVER, BC , March 30, 2026 /PRNewswire/ - ELSE NUTRITION HOLDINGS INC.(TSX: BABY) (OTCQX: BABYF) (FSE: 0YL.F) ("Else" or the "Company"), today reported financial results for the 2025 fiscal year ended December 31, 2025. The financial statements and MD&A are available on SEDAR under the Company's profile.

"2025 was a transformation year for Else Nutrition," commented Hamutal Yitzhak, Chief Executive Officer and Co-Founder of Else Nutrition. "While we faced significant challenges, including funding constraints for production and operations and prolonged out-of-stock periods,  we made substantial progress in improving efficiencies, reducing costs, and strengthening our financial position—laying the groundwork to resume growth in 2026 and beyond."

"We implemented several key operational changes. In Canada, we transitioned from a distribution model to a direct retail model and, in Q1 2026, resumed sales in major retail channels. In the U.S., we replaced both our B2B and B2C third-party logistics providers and streamlined execution. We also reduced headcount and overall expenditures, resulting in a 51% year-over-year reduction in total operating expenses."

"Furthermore, sales and marketing expenses were reduced by more than 60%. Despite this significant reduction, U.S. revenue declined by 18.5%, primarily driven by extended out-of-stock periods for our cereal and kids Ready-to-Drink products. However, underlying demand remains strong, as we continue to sell through all available production, particularly through our online channels. At the same time, our 2025 cost of goods sold (COGS) declined by 38%, including approximately CAD $750,000 in write-offs related mainly to older raw materials and Canadian products. Excluding these one-time items, COGS would have decreased by 46%—nearly double the rate of revenue decline. Importantly, we achieved a return to positive gross profit in 2025, reporting $320 thousand compared to a gross loss of $1.2 million in 2024, reflecting the impact of our cost optimization and operational efficiency initiatives. As performance improved as 2025 progressed, GPM in the second half of the year was higher than the annual average; we expect our performance to continue improving throughout 2026 and reach an annual GPM of 30% and above."

"We are already seeing the impact of these initiatives. We have resumed shipments to Canadian retailers at significantly higher margins, we are gradually closing inventory gaps, and are seeing revenue begin to recover—particularly online. As a result, we are increasingly confident in our ability to achieve profitability within the next 12 months."

"At the same time, we continued to advance our plant-based infant formula program, which represents our most significant long-term growth opportunity. Importantly, the U.S. regulatory environment has begun to shift in a meaningful way. In November 2025, the U.S. federal budget signed into law included a Congressional directive for the Food & Drug Administration to establish clearer and more efficient approval pathways for plant-based, non-dairy, non-soy infant formulas as part of broader efforts under Operation Stork Speed. This directive is expected to accelerate regulatory guidance and create a more defined pathway to market for innovative formula solutions like ours."

"More recently, in March 2026, the U.S. Food and Drug Administration formally announced its intent to finalize an updated Protein Efficiency Ratio (PER) guidance. The FDA added 'Protein Efficiency Ratio (PER) Rat Bioassay Studies to Demonstrate that a New Infant Formula Supports the Quality Factor of Sufficient Biological Quality of Protein: Guidance for Industry' to its official Foods Program Guidance Under Development list. This confirms that the FDA is actively developing a dedicated guidance governing PER study design, evaluation criteria, and methodological expectations. Importantly, this development represents a significant achievement for Else, as PER requirements have long been the key blocker preventing the continuation of our clinical studies. The FDA's action demonstrates clear positive momentum for novel protein sources, including Else's whole-food plant-based proteins-by signaling that PER methodology may be modernized and clarified in alignment with Operation Stork Speed and ongoing federal infant-formula regulatory reforms."

"We believe these developments represent a critical inflection point for the category, as it signals increasing regulatory support for innovation and expands the opportunity to bring inclusive, plant-based nutrition options to families seeking alternatives to traditional dairy- and soy-based formulas. With this momentum, we are in active discussions with the FDA and preparing for the next phase of clinical and commercial development, positioning Else to move more efficiently toward U.S. market entry once official guidance is implemented."

"Looking ahead, we remain focused on executing against our key priorities, including further optimizing our cost structure, advancing manufacturing efficiencies, expanding our commercial footprint, and progressing regulatory milestones. With a stronger foundation in place, we are confident in our path toward achieving cash-flow breakeven between late 2026 and early 2027 and delivering long-term value for our shareholders," concluded Ms. Yitzhak.

2025 Financial Results
All figures are in CAD unless otherwise indicated.

• Revenue was approximately $6.0 million for fiscal year 2025 compared to $8.0 million for fiscal year 2024.
• Operating expenses were $6.7 million for fiscal year 2025 compared to $13.6 million for fiscal year 2024.
• Gross profit was $320 thousand dollars for fiscal year 2025 compared to gross loss of $ 1.2 million dollars for fiscal year 2024.
• Cash balance as of December 31, 2025, was $171 thousand dollars, including restricted cash.

About Else Nutrition Holdings Inc.

Else Nutrition Holdings Inc. (TSX: BABY, OTCQX: BABYF, FSE: 0YL) is a food and nutrition company in the international expansion stage focused on developing innovative, clean, and plant-based food and nutrition products for infants, toddlers, children, and adults. Its revolutionary, plant-based, non-soy formula is a clean-ingredient alternative to dairy-based formulas. Since launching its Plant-Based Complete Nutrition for Toddlers, made of whole foods, almonds, buckwheat, and tapioca, the brand has received thousands of powerful testimonials and reviews from parents, gained national retailer support, and achieved rapid sales growth.

Awards and Recognition:

• "2017 Best Health and Diet Solutions" award at Milan's Global Food Innovation Summit
• #1 Best Seller on Amazon in the Fall of 2020 in the New Baby & Toddler Formula Category
• "Best Dairy Alternative" Award 2021 at World Plant-Based Expo
• Nexty Award Finalist at Expo West 2022 in the Plant-Based lifestyle category
• During September 2022, Else Super Cereal reached the #1 Best Seller in Baby Cereal across all brands on Amazon
• In May 2024Else Nutrition's Ready-to-Drink Kids Vanilla Shake Named Among the Best in Family-Friendly Products by the Prestigious Mom's Choice Awards®

TSX

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Caution Regarding Forward-Looking Statements

This press release contains statements that may constitute "forward-looking statements" within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "will" or similar expressions. Forward-looking statements in this press release include statements with respect to the anticipated dates for filing the company's financial disclosure documents. Such forward-looking statements reflect current estimates, beliefs, and assumptions, which are based on management's perception of current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. No assurance can be given that the foregoing will prove to be correct. Forward-looking statements made in this press release assume, among others, the expectation that there will be no interruptions or supply chain failures as a result of COVID-19 and that the manufacturing, broker, and supply logistic agreement with the company does not terminate. Actual results may differ from the estimates, beliefs, and assumptions expressed or implied in the forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements, which reflect management's expectations only as of the date of this press release. The company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

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SOURCE Else Nutrition Holdings Inc.