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

31 March 2023

Chill Brands Group plc

("Chill Brands" or the "Company")

Launch of Vapour Products

Chill Brands Group, the international consumer packaged goods company, is pleased to provide an update on the launch of its new range of nicotine-free vapour products.

Further to the announcement on 7 December 2022, an initial purchase order for Chill Brands' disposable nicotine-free vapour products has been received from a new distributor operating in Florida and the surrounding states. The purchase order represents a significant proportion of the Company's existing vapour inventory.

The products, marketed as 'Chill Zero', are under consideration by numerous retail buyers representing some of the largest convenience store chains in the United States. Subject to confirmation of final purchase orders, the Company expects to have placed its entire first production run and is working with manufacturing partners to prepare for a  reorder. Further information regarding the quantum of vapour sales made will be announced as purchase orders are fulfilled and related revenues can be recognised.

Online Vapour Product Sales

The Company is also taking steps to enable online sales of its vapour products via the Chill.com website. The 2019 US Preventing All Cigarette Trafficking (PACT) Act prevents the United States Postal Service (USPS) from shipping vapour products regardless of their nicotine content. Similar restrictions have been implemented by other major carriers, preventing many brands from making online direct-to-consumer sales.

Chill Brands has procured a number of relationships with specialist carriers that will enable the Company to provide compliant home delivery of vapour products sold online via Chill.com. These shipping arrangements will allow the Company to secure what appears to be a sizeable opportunity to target online consumers who may be underserved by the wider vapour industry.

Further announcements regarding the onboarding of the Company's vapour products to Chill.com and other e-commerce sales channels will be made in due course.

Update on Employment Dispute

The Company is pleased to report that it has reached an amicable settlement in its dispute with a former employee as referenced in its announcement of 28 December 2022. The settlement has no material impact on the Company's ongoing operations or its financial position.

-ENDS-

About Chill Zero Vapour Products

Chill Zero vapour products are flavoured, disposable personal diffusers. They offer a similar experience to traditional vaping products but without the addictive effects of tobacco or nicotine. They appeal to a wide range of consumers including those who wish to quit smoking or reduce their nicotine intake, as well as non-smokers who enjoy the flavours, sensation, and social aspect of using vapour products.

Research suggests that the market for vapour products could exceed US $55 billion by 2029, with more than 26 million Americans already using vaping devices both recreationally and as a functional alternative to traditional tobacco products.

Chill Zero vapour products are currently available in three flavour variants: lemon, mint ice, and passionfruit/grapefruit. Each device provides roughly 600 puffs. Chill Brands' intends to complete a UK launch of its devices later in 2023, with planning for range extensions underway.

About Chill Brands Group

Chill Brands Group plc (LSE: CHLL, OTCQB: CHBRF) is concerned with the development, marketing and distribution of wellness and recreational products containing natural, functional ingredients. The Company's proprietary product range is distributed by some of the most recognisable convenience retail outlets in the US and includes nicotine-free disposable vapour products that cater to the rapidly growing market for tobacco alternatives. 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

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