Mr. Bill Besenhofer reports

THE FRESH FACTORY AWARDED US$765,000 ILLINOIS CAPITAL GRANT

The Fresh Factory B.C. Ltd. has been awarded a capital grant of up to $765,000 (U.S.) under the Illinois Department of Commerce and Economic Opportunity's (DCEO) Business Attraction Prime Sites program, in connection with the company's approved Illinois Economic Development for a Growing Economy (EDGE) agreement, pursuant to a fully executed grant agreement (agreement No. 26-881005).

The grant supports the company's continuing expansion of its Illinois manufacturing operations, including the relocation of its production to a larger facility in Bolingbrook, Ill., and improvements to its Downers Grove operations, together with the associated capital investment and creation of new jobs in the state. The award underscores the strength of the company's Illinois footprint and its long-term commitment to growing its manufacturing base and work force in the region.

The Business Attraction Prime Sites program is designed to assist companies undertaking large-scale capital investment projects that commit to significant job creation for Illinois residents as they expand operations within the state. The grant is non-dilutive and is disbursed as reimbursement of eligible capital expenditures; the company expects to begin receiving reimbursement under the grant in September, 2026. No securities of the company are being issued in connection with the grant.

"This award reflects our continued investment in Illinois manufacturing and jobs as we expand our operations," said Bill Besenhofer, chief executive officer and co-founder of The Fresh Factory. "We are grateful for the state of Illinois' support through the prime sites program, which helps us accelerate our growth, add capacity and create new jobs in the communities we serve."

Credit facility

Separately, the company has entered into an unsecured, subordinated, short-term revolving credit facility of up to $1.0-million (U.S.) with New Frontier Holdings LLC, an entity controlled by Nathan Laurell, a director of the company, for working capital and general corporate purposes. The facility is subordinated in right of payment to the company's senior secured credit facility with Mitsubishi HC Capital America Inc. The company believes the terms of the facility are fair and commercially reasonable given that it is unsecured, subordinated and short term in nature. No securities of the company are being issued in connection with the facility.

The facility constitutes a related party transaction within the meaning of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions as the lender is an entity controlled by a director of the company. The company is relying on exemptions from the formal valuation requirement (Section 5.5(b) of MI 61-101) and the minority shareholder approval requirement (Section 5.7(1)(f) of MI 61-101) applicable to a loan obtained on reasonable commercial terms that are not less advantageous to the company than if obtained from an arm's-length party and that is not convertible, directly or indirectly, into equity or voting securities of the company. The facility was reviewed and approved by the company's board of directors, with the interested director having declared his interest and abstained from voting.

About The Fresh Factory B.C. Ltd.

The Fresh Factory is a vertically integrated company focused on accelerating the growth of the fresh, clean-label, plant-based food and beverage brands of tomorrow. The Fresh Factory owns or partners with emerging brands in the plant-based space to develop, manufacture, and sell products made from fresh produce and recognizable ingredients. It operates from its centrally located manufacturing facility near Chicago, serving customers across the United States. As a public benefits corporation, The Fresh Factory is environmental-, social- and governance-focused, driven to make a lighter, greener impact on the environment and a stronger, positive impact on local communities and the food system as a whole.

We seek Safe Harbor.