Ms. Hamutal Yitzhak reports

ELSE NUTRITION ACHIEVES TRANSFORMATIVE OPERATIONAL AND FINANCIAL PROGRESS IN 2025

Two thousand twenty-five has marked a pivotal year defined by meaningful operational progress, disciplined execution and a strengthened financial foundation for Else Nutrition Holdings Inc. The company enters 2026 as a leaner, more efficient and strategically focused organization, positioned for sustainable long-term growth.

A year of transformation and renewed stability

Throughout 2025, Else Nutrition executed a company-wide transformation initiative that reshaped its operating structure and significantly improved its financial resiliency. The company reduced head count and operational costs, streamlined processes, tightened and optimized its supply chain, improved manufacturing efficiency, and prioritized marketing investments around high-impact, consumer-driven product categories. These efforts resulted in a more lean and agile organization capable of stronger execution at a significantly reduced cost.

During 2025, insufficient funds for production caused temporary supply constraints, resulting in revenue losses. Heading into 2026, with more funds and a reduced operating cost, the company expects a more stable inventory, which will facilitate revenue growth while maintaining strong underlying demand across its plant-based, specifically toddler and baby cereals product lines.

Strategic advances in innovation and regulatory progress

In parallel with its operational improvements, Else Nutrition continued advancing scientific and regulatory milestones related to its plant-based infant formula -- its most significant long-term value driver. The evolving U.S. regulatory landscape increasingly supports modernization within the infant nutrition category, aligning with Else's mission to introduce cleaner, dairy-free and more innovative solutions for families.

In November, 2025, Else announced that the U.S. Food and Drug Administration (FDA) had been directed to streamline approval pathways for plant-based infant formulas, positioning Else Nutrition to capitalize on legislative momentum and rising consumer demand through President Trump's signing of a pivotal FDA funding package with a congressional directive streamlining the regulatory pathway for non-dairy, non-soy plant-based infant formula.

The company also continued to attract interest from global nutrition and food companies exploring opportunities across distribution, co-manufacturing and research collaboration. These conversations, while still in early stages, reflect growing recognition of Else's scientific credibility, brand differentiation and potential for global scale.

"Two thousand twenty-five was a year of meaningful transformation for Else Nutrition," said Hamutal Yitzhak, chief executive officer and co-founder. "We took decisive actions to strengthen our operations, streamline our cost structure and reinforce the foundation of our business. We emerge from the year more focused, more disciplined and more aligned with the long-term opportunities ahead. As we enter 2026, we are energized by the momentum we have created and confident in our ability to achieve sustainable growth, advance our innovation pipeline and move toward cash flow break-even. We are building a stronger, more resilient company -- one that is positioned to shape the future of clean, plant-based nutrition for families around the world."

2026 outlook

Looking ahead, Else Nutrition will continue building on the operational discipline achieved in 2025. The company remains focused on manufacturing efficiencies, improved cost structures, and enhanced route-to-market strategies designed to expand margins and support responsible, profitable growth. With a more stable foundation and promising partnership discussions under way, Else maintains confidence in its path toward achieving cash flow break-even between late 2026 and early 2027.

As Else Nutrition approaches 2026, the company does so with renewed stability, strong consumer demand fundamentals, and a more efficient, better-aligned organization. With its strengthened financial and operational position, Else is prepared to accelerate growth, deepen its global footprint, and continue delivering nutrition solutions that reflect the evolving needs and values of modern families.

About Else Nutrition Holdings Inc.

Else Nutrition Holdings Inc. (TSX: BABY) (OTC: 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 formulas are 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.

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