Mr. Craig Goodwin reports

NATURALLY SPLENDID ANNOUNCES $4,300,000 CDN IN GROSS SALES IN Q2

Naturally Splendid Enterprises Ltd. has had gross sales to date in 2016 of approximately $7.1-million.

Naturally Splendid has recorded approximately $4.3-million in gross sales during the second quarter of 2016, which spans the period from April 1, 2016, to June 30, 2016. The company previously reported gross sales of $1.42-million in the first quarter of 2016, which spanned the period from Jan. 1, 2016, to March 31, 2016. Accumulative gross sales for Q1 and Q2 are approximately $5.6-million.

Additionally, Naturally Splendid announced a purchase order of $1.45-million on June 20, 2016, to be filled in the third quarter of 2016. The sum of Q1 and Q2 sales, plus the June 20 purchase order, gives Naturally Splendid approximately $7.1-million in gross sales to date in 2016.

In comparison, the company recorded audited gross annual sales of $235,000 in 2014 and audited gross sales of $301,705 in 2015. Currently the company has exceeded 2015 gross sales by over 2,350 per cent.

Naturally Splendid is experiencing growth in gross sales in many of its divisions. The most significant growth has been in the export division where South Korean exports have exceeded initial projections by over 400 per cent to date. However, the overall increase in gross sales can be attributed to several factors including Naturally Splendid's retail lines, Natera, Chii and Pawsitive FX, which are showing consistent growth in sales. As reported earlier, the company is pleased to confirm that in Q1 2016 its majority-owned subsidiary, POS/BPC Manufacturing Corp., completed the preparation/training work to begin normal manufacturing status at this facility and has begun manufacturing for multiple clients. The POS/BPC facility will add additional revenue to Naturally Splendid in 2016. The 12,000-square-foot POS/BPC facility -- which is managed for POS/BPC by POS Bio-Sciences -- is positioned to offer commercial-scale custom processing solutions for biological materials, such as functional foods and natural health ingredients to a wide range of clients. POS/BPC came on line March 28, 2016, having spent Q1 completing significant upgrades to the facility. In Q2, the first quarter that POS/BPC has been operational, the facility grossed in excess of $390,000 and is expected to be cash flow positive in 2016. Management expects gross revenue for POS/BPC to increase in Q3 and the fourth quarter.

Naturally Splendid chief executive officer Craig Goodwin stated: "We are off to a good start for Q3. Having already secured a purchase order for $1.45-million for Q3, Naturally Splendid is on pace to equal the sales performance of Q2. Our goal is to exceed our Q2 sales figures through increased export activity, increased retail sales, as well as securing additional clients and optimizing operations at POS/BPC.

"We are definitely pleased with the increase in our gross sales throughout our divisions. More importantly, we believe the company is reaching the stage of being cash flow positive on a consistent basis. This is due in fact to not only the increased gross sales, but also increasing margins as scales of economy begin to show a positive effect on our bottom line. As the company approaches being cash flow positive, we can begin to focus more attention and resources towards the lucrative omega markets globally with HempOmega and also begin to focus attention on the positively evolving cannabinoid opportunities in the United States, specifically focusing on the cannabidiol (CBD) markets."

In regard to HempOmega, Naturally Splendid's proprietary omega ingredient, the company continues to increase the commercial applications and therefore revenue opportunities through continued research and development. The research and development are being conducted at POS Bio-Sciences specifically for functional beverage applications; through the Saskatchewan Agri-Value Initiative (SAVI) under the Canada-Saskatchewan Growing Forward 2 for ingredient application for products such as breads and nutritional bars; as well as product development at the Alberta Agriculture and Rural Development's Food Science and Technology Centre (FSTC) in Brooks, Alta., for application in pet feed. HempOmega was a finalist for NutraIngredients Start-up Ingredient of the Year, which has generated many inquiries from a wide range of potential clients. The company is currently in discussions with several of these potential clients for HempOmega.

In a 2013 Nutraceuticals World article, it was reported omega production is forecast to grow a mammoth 32.8 per cent annually in volume (15.1 per cent in value) by 2018, by which time 3.3 million metric tonnes worth $9.1-billion will be produced. "Plant omega 3 production value is expected to grow twice as fast as marine during the next five years," Mr. Bender predicted. "As a result, by 2018, plant omega 3s will account for 52 per cent of production value compared to 48 per cent for marine. Plant omega 3s will benefit from consumers' desire to get away from animal-based products." Naturally Splendid is positioned to be at the forefront of this opportunity and intends to capitalize on this shift for omega sources.

Mr. Goodwin summarized: "Our success exporting to South Korea is just the beginning. The South Korean opportunity secures Naturally Splendid a foothold in the growing Asian health and wellness market, and we are experiencing increased interest for our products in Asia since attending trade shows as official members of the Canadian trade delegation in Singapore and Seoul, and more recently as official members of the Premier's trade mission to Seoul, Manila and Tokyo, which was lead by British Columbia's Premier, Christy Clark. The success that we have had in South Korea creates the opportunity to increase our exporting sales by expanding to additional countries not only in Asia but globally, as well as adding additional product offerings such as hemp protein, hemp oil and HempOmega. However, we are not limited to just hemp products. We are pursuing numerous opportunities to introduce additional food products outside of hemp into our exporting offerings, utilizing in part the same successful product launch strategy executed with our shelled hemp seed hearts in South Korea."

Naturally Splendid is positioning itself to export healthy foods and value-added natural formulations globally. The global functional, allergen-free, organic and other healthy foods market will push through the $1-trillion (770 million euros) mark for the first time in 2017, as consumer interest in preventing illness via foods snowballs, says Euromonitor International(1).

(1) "Global healthy foods to hit $1-trillion in 2017," report by Shane Starling, Nov. 26, 2012.

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