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Continued Partnership to Bring ELEMENTS鈩� CBD Product Line to U.S. Market

VANCOUVER, BC / / July 2, 2025 / Xebra Brands Ltd. ("Xebra" or the "Company") (CSE:XBRA)(OTCQB:XBRAF)(FSE:9YC0) a leading innovator in the North American cannabis market, announces the termination of its non鈥慴inding Letter of Intent ("LOI") to acquire 100% of the outstanding shares of BSK Holdings Inc. ("BSK"), announced on April 24^th, 2025.

The contemplated transaction was subject to various conditions including satisfactory due diligence and regulatory approvals, and following a thorough review and ongoing discussions, Xebra determined that it is in the Company's best interest to not proceed with the proposed acquisition. "We sincerely appreciate the professionalism and collaboration shown by the BSK team throughout this process," said Rodrigo Gallardo, Interim CEO of Xebra Brands. "While we will not be moving forward with a corporate transaction, we maintain a high regard for BSK's expertise and vision."

Despite the decision to terminate the LOI, Xebra is pleased to confirm that its partnership with BSK remains active and productive. As previously announced on May 14, 2025, Xebra and BSK executed a manufacturing and distribution agreement to launch Xebra's ELEMENTS鈩� CBD product line in the United States. This strategic collaboration will continue independently of the terminated acquisition plan.

"Our focus remains on bringing high鈥憅uality CBD products to U.S. consumers under the ELEMENTS鈩� brand," added Gallardo. "We look forward to building a strong commercial presence in the U.S. market with the support of BSK's operational capabilities."

MCTO
Xebra announces that its audited financial statements, CEO and CFO certifications, and management discussion and analysis (the "Annual Filings") for the year ended February 28, 2025 were not released on or prior to the applicable filing deadline on June 30, 2025. The Company was been late in the preparation of the Annual Filings due to management changes and facing certain liquidity constraints and unforeseen delays in the procurement of necessary financial resources to initiate the audit. As further detailed below, the Company has made arrangements to facilitate the completion of the audit and the Annual Filings and the filing thereof.

As a result of the delay, the Company has voluntarily applied for and was granted a management cease trade order, which prohibits certain current directors, officers and insiders of the Company from trading in securities of the Company for so long as the Annual Filings are not filed. The issuance of such management cease trade order generally does not affect the ability of the general investing public to trade in the securities of the Company. The Company intends to provide updates in accordance with National Policy 12-203 - Management Cease Trade Orders with respect to further developments in respect of this matter promptly following their occurrence.

Loan
Xebra announces that it has entered into a loan agreement with an existing shareholder (the "Lender"), a co-founder of Xebra, pursuant to which the Lender has agreed to provide a loan of up C$110,000 to the Company in such principal amounts to be advanced to the Company by the Lender as agreed from time to time (the "Loan").

The Loan is unsecured, bears interest at 10% per annum and matures one year from the date of issuance of the Loan. The Loan will help fund the Company's working capital and general corporate purposes, including but not limited to the audit of the Annual Filings.

About Xebra Brands Ltd.
Xebra Brands is a Canadian cannabis company with international reach, focused on the development and commercialization of cannabis鈥慸erived wellness products. Xebra is the first company to receive full authorization to import, cultivate, manufacture, and sell cannabis (鈥�1% THC) in Mexico, and is actively expanding its ELEMENTS鈩� product line through strategic partnerships in North America.

On behalf of the Board,

"Rodrigo Gallardo"
Interim CEO

For More Information, Contact:
+52鈥�556鈥�387鈥�2293
[email protected]

Cautionary Note Regarding Forward-Looking Statements:

This news release contains certain "forward-looking information" and "forward-looking statements", as such terms are defined under applicable securities laws (collectively, "forward-looking statements"). Forward-looking statements can be identified by the use of words and phrases such as "plans", "expects" ,"is expected", "budget", "scheduled," "estimates", "forecasts", "intends", "anticipates" or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements herein include, but are not limited to, statements with respect to the MCTO, compliance with National Policy 12-203 - Management Cease Trade Orders and the completion of the Annual Filings, including the timing and cost thereof.

These forward-looking statements are based on current expectations and are subject to known and unknown risks, uncertainties and other factors, many of which are beyond Xebra's ability to predict or control and could cause actual results to differ materially from those contained in the forward-looking statements. Specific reference is made to Xebra's most recent annual management discussion and analysis on file with certain Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying forward-looking statements, which include, without limitation, Such factors include, but are not limited to, the inability to obtain sufficient financing, the inability of current cash on hand to adequately satisfy current accounts payable, the inability of Xebra to retain the authorizations granted by COFEPRIS, the inability to successfully complete financings on terms acceptable to Xebra or at all, the inability to generate sufficient revenues or to raise sufficient funds to carry out its business plan; changes in government legislation, taxation, controls, regulations and political or economic developments in various countries; risks associated with agriculture and cultivation activities generally, including inclement weather, access to supply of seeds, poor crop yields, and spoilage; compliance with import and export laws of various countries; significant fluctuations in cannabis prices and transportation costs; the risk of obtaining necessary licenses and permits; inability to identify, negotiate and complete potential acquisitions, dispositions or joint ventures for any reason; the ability to retain key employees; dependence on third parties for services and supplies; non-performance by contractual counter-parties; general economic conditions; the continued growth in global demand for cannabis products and the continued increase in jurisdictions legalizing cannabis; and the timely receipt of regulatory approvals for license applications on terms satisfactory to Xebra. In addition, there is no assurance Xebra will: be a low-cost producer or exporter; obtain a dominant market position in any jurisdiction; have products that will be unique. The foregoing list is not exhaustive and Xebra undertakes no obligation to update or revise any of the foregoing except as required by law. Many of these uncertainties and contingencies could affect Xebra's actual performance and cause its actual performance to differ materially from what has been expressed or implied in any forward-looking statements made by, or on behalf of, Xebra. Readers are cautioned that forward-looking statements are not guarantees of future performance and readers should not place undue reliance on such forward-looking statements. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those set out in such statements.

This press release includes market, industry and economic data which was obtained from publicly available sources and other sources believed by Xebra to be true. Although Xebra believes the information to be reliable, it has not independently verified any of the data from third party sources referred to in this press release, or analyzed or verified the underlying reports relied upon or referred to by such sources, or ascertained the underlying economic and other assumptions relied upon by such sources. Xebra believes that its market, industry and economic data is accurate and that its estimates and assumptions are reasonable, but there can be no assurance as to the accuracy or completeness thereof.

Neither the Canadian Securities Exchange nor its Market Regulator (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: Xebra Brands Ltd