Fundraising to raise £1m & Update on results

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.

24 April 2025

Chill Brands Group plc

("Chill Brands" or the "Company")

Underwritten fundraising to raise £1 million

Update on publication of the financial results

Chill Brands, the consumer packaged-goods distribution company, is pleased to announce that it has successfully concluded the terms of an underwritten fundraising to raise £1 million (the "Fundraising"). The Company also provides an update on the expected timing of completion of the Company's audited accounts for the year to 31 March 2024 (the "FY24 Accounts") and its unaudited interim accounts for the six-month period ended 30 September 2024 (the "H1 FY25 Interim Accounts").

Terms of the Fundraising

On 11 March 2025, the Company announced its intention to raise funds through the issue of new Convertible Loan Notes (the "CLNs"). The terms of the Fundraising have now been finalised as follows:

· the aggregate principal amount of the Fundraising is £1.0 million. The Company's largest shareholder, Jonathan Swann, has entered into an agreement, dated 23 April 2025, with the Company to underwrite this amount, thereby guaranteeing that the Company will secure the funding it requires;

· the CLNs shall have conversion price of 1.5 pence per new ordinary share (the "New Ordinary Shares"), being a 30.2% discount to the closing price of the Company's shares on the day prior to the suspension of trading in the Company's shares on 3 June 2024;

· the CLNs shall attract interest at a rate of 10% per annum and shall have a maturity date three years from the date of their issue;

· under the CLNs, the principal, along with the fixed interest, may be converted into new ordinary shares solely at the election of the subscriber and following the suspension of trading in the Company's shares being lifted;

· the minimum investment amount under the Fundraising will be set at £10,000. Investors subscribing for up to £50,000 of CLNs (the "Initial Subscribers") will be required to remit funds to the Company at the time of subscription. For subscriptions in excess of £50,000, drawdown of funds will be at the discretion of the Company and may occur at any time within 12 months from the date of issue of the CLNs; and

· the Company shall also issue to subscribers a warrant to subscribe for one New Ordinary Share per CLN. The exercise price of each warrant shall be equal to 1.25 times the volume-weighted average (the "VWAP") of the Company's Ordinary Shares over the ten (10) trading days immediately preceding the date of the relevant Drawdown Notice. As at the date of this announcement, the Company's Ordinary Shares are suspended from trading. Accordingly, in respect of any Drawdown made prior to the resumption of trading in the Company's Ordinary Shares, the VWAP for the purposes of calculating the exercise price of the associated warrants shall be deemed to be 1.5 pence per New Ordinary Share. Warrants awarded to the Initial Subscribers, as opposed to those resulting from future drawdowns at such time as trading in the Company's shares has resumed, shall be deemed to be issued during the suspension. The exercise price of warrants awarded to the Initial Subscribers shall therefore be calculated in line with a VWAP of 1.5 pence per Ordinary Share.

As set out in the Company's announcement of 11 March 2025, the proceeds of the Fundraising will primarily be used for the following: the ongoing development, launch and distribution of new, compliant rechargeable, reuseable pod-based vaping products; the expansion of marketing campaigns for the chill.com marketplace website to drive brand awareness and customer acquisition; the expansion of the Company's sales and distribution infrastructure to enable it to attract and serve additional brands through enhanced field sales operations; and to support the Company's general working capital requirements, including potentially examining and pursuing synergistic and value generative bolt-on acquisitions.

Interested parties wishing to participate in the Fundraising are invited to contact the Company at [email protected] by no later than 5:00 p.m. (BST) on 8 May 2025. Expressions of interest should include the proposed investment amount and confirmation of eligibility to participate. The Company reserves the right to scale back or reject applications at its complete and sole discretion.

Update on the publication of the financial results

Further to the Company's announcement on 26 March 2025, the Company has continued to progress towards the completion of its audit and the publication of the FY24 Accounts, along with the H1 FY25 Interim Accounts (together, the "Financial Results").

The Company's Board recognises that the completion of this audit and the publication of the Financial Results is significantly overdue. The Company and its Directors are actively working towards finalising the audit, which as stated previously, is subject to secondary, technical and engagement quality reviews by the Company's statutory auditors to ensure compliance with applicable accounting and regulatory standards. The delay in completion has been caused by a number of factors, including difficulties in accessing information and records maintained by the Company's US subsidiary. These issues have now been resolved. In addition, extended efforts to complete the Fundraising and the influence of global macroeconomic conditions on this process have had a consequential impact on the Company's financial modelling and overall financial reporting procedures. With the Fundraising now underwritten, the Company expects to make swift progress towards completing the final stages of the audit.

Based on the current position, the Company expects to complete the audit and publish the FY24 Accounts in mid-May 2025. The Company is working closely with its auditors to finalise the process and will provide further updates as appropriate. Following the publication of the FY24 Accounts, the Company also intends to publish its H1 FY25 Interim Accounts shortly thereafter.

Harry Chathli, the Company's Chairman, commented: "We would like to extend our heartfelt gratitude to our largest shareholder, Jonathan Swann, for his unwavering support and commitment to our Company. His agreement to underwrite the £1.0 million proposed fundraising provides us with the financial stability we need as we navigate the final stages of our audit process and plan for the future. We acknowledge that the completion of this audit and the publication of our financial results are significantly overdue. However, with the identified challenges now resolved and the fundraising underwritten, we are confident that we will quickly progress towards finalising the audit and will then seek to lift the suspension and resume trading in the company's shares."

-ENDS-

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About Chill Brands Group

Chill Brands Group plc (LSE: CHLL, OTCQB: CHBRF) is an international consumer packaged goods company focused on the development, marketing and distribution of wellness and recreational products. The Company's proprietary nicotine-free vapour products cater to the rapidly growing market for tobacco alternatives and are distributed by some of leading retail stores in the US and UK. Chill Brands also operates the chill.com e-commerce website, on which it is building a marketplace of products from third-party brands.

Publication on website

A copy of this announcement is also available on the Group's website at http://www.chillbrandsgroup.com