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

11 March 2025

Chill Brands Group plc

("Chill Brands" or the "Company")

Update on Current Business Activity, Audit Process and Proposed Fundraising

Chill Brands, the consumer packaged-goods distribution company, announces its intention to raise funds through a proposed convertible loan note issue to support the Company's strategic objectives during 2025 (the "Fundraising") and provides an update on current business activity as well as for the expected timing of completion of the audit for the year to 31 March 2024.

Proposed Fundraising

The Company intends to issue a convertible loan note. The key terms proposed are as follows:

·    Aggregate principal amount of up to £1 million;

·    Conversion price of 1.75 pence per ordinary share (an 18.6% discount to the closing price on the day prior to the suspension of trading in the Company's shares on 3 June 2024);

·    An interest rate of 10%; and

·    A maturity date three years from the date of issue.

The Company has already received a significant commitment to the Fundraising from its largest shareholder, Jonathan Swann, and continues to engage with various stakeholders in relation to the proposed convertible loan note issue. A further announcement will be made in due course with the final terms of the Fundraising.

Use of Proceeds

The Board believes that the Fundraising will provide the Company with the necessary resources to execute its strategic growth plan during the coming 2025 financial year and deliver value for shareholders. The funds 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.

Update on Current Business Activity

Despite the impact of challenges arising during 2024 and ongoing efforts to finalise its audit process, the Company has continued to make steady progress across its key business divisions.

Vape Products

Chill Brands has continued to sell through its remaining inventory of Chill ZERO products while preparing for the impending ban on the sale of disposable vape devices, due to come into effect on 1 June 2025. As previously announced, the Company has developed a range of short-fill e-liquids for use in refillable devices. Production of these e-liquids is now complete, and pre-sales activities have begun. These products will remain compliant after 1 June 2025 and represent an expansion of the Company's range in preparation for a consumer market that is maturing beyond disposable vapes.

The Company is also working in collaboration with key distribution partners to develop and launch pod-based rechargeable, reusable vape devices that meet the demands of major retailers and end consumers. The Company is tailoring its approach to these products to ensure that there is a market fit from the date of launch and will provide further information regarding its new products and retail sale opportunities in due course.

Chill.com Marketplace

The Company has continued to onboard additional brands to its site with almost 70 unique brands now sold through the UK marketplace.

Going forward, the Company intends to allocate resources to online advertising campaigns to drive additional traffic to the site to improve visibility of its offering and the conversion of site visitors into customers. The Company intends to use resources from the proposed fundraise to commence pay-per-click advertising programmes on Meta and Google, establish an improved loyalty programme, and deliver an improved fulfilment and delivery experience.

Retail Distribution Services

In its announcement of 9 December 2024, Chill Brands stated that it had established a new Retail Distribution Services division that is dedicated to supporting third-party brand partners seeking exposure to retail sales channels in the UK and Europe. This service leverages the Company's existing sales force and retail contacts, providing brand partners with holistic go-to-market support in exchange for monthly retainer fees and commissions.

In the short time since its inception in December 2024, the division has already attracted numerous clients from diverse sectors, including two leading oral nicotine pouch brands, a sugar-free energy drink brand, and a prominent UK vape liquid brand. The Company has also secured distribution rights for a variety of other convenience products, including a range of imported confectionary products that have gained widespread popularity on social media and are attracting significant interest from retailers as a result.

The Company is continuing to build a robust pipeline of new brand partnerships and anticipates associated growth in sales volumes and revenue from this channel throughout 2025.

Status of Audit and Listing

The Company continues to work diligently towards the completion of its statutory audit and the publication of its audited accounts for the financial year ending 31 March 2024. Consistent with previously published projections, the Company remains focused on completing this process during Q1 2025, subject to the timely resolution of all outstanding matters.

Upon publication of the audited financial statements and its interim results for the six-month period ending 30 September 2024, the Company will be in a position to apply to the Financial Conduct Authority to request the lifting of the suspension in trading of its 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