Mr. Edward Wang reports

GLG LIFE TECH CORPORATION REPORTS 2021 ANNUAL & FOURTH QUARTER FINANCIAL RESULTS

GLG Life Tech Corp. has released its financial results for the three and 12 months ended Dec. 31, 2021. The complete set of financial statements and management discussion and analysis are available on SEDAR and on the company's website.

Financial summary

The company reported revenues of $3.0-million in the fourth quarter of 2021, a $200,000 increase compared with the fourth quarter of 2020 ($2.8-million). The company reported a gross profit margin of 23 per cent for the fourth quarter 2021, an eight-percentage-point decrease from the fourth quarter of 2020 (31 per cent); this decrease in gross profit margin was primarily attributable to a full-year 2020 depreciation adjustment recorded in the fourth quarter of 2020.

The company reported revenues of $10.9-million for the year 2021, a $4.4-million decrease compared with the year 2020 ($15.3-million). The company reported a gross profit margin of 27 per cent for the year 2021, a four-percentage-point increase from year 2020 (23 per cent).

The company continues to closely manage its SG&A (selling, general and administrative) expenses, resulting in reduced G&A expenses for the full year 2021 relative to 2020.

For the three months ended Dec. 31, 2021, the company had a net loss attributable to the company of $8.4-million, an increase of $2.1-million over the comparable period in 2020 (net loss of $6.4-million). The company reported a net loss per share of 22 cents for the fourth quarter 2021, a five-cent increase relative to the fourth quarter 2020 (loss of 17 cents per share).

For the 12 months ended Dec. 31, 2021, the company had net loss attributable to the company of $23.7-million, an increase of $40.2-million over the comparable period in 2020 (net income of $16.5-million). The company reported net loss per share of 62 cents for the year 2021, a $1.05 decrease relative to the year 2020 (net income of 43 cents per share).

Corporate developments

Company outlook

Over the past several quarters, management has focused on implementing and continuing plans that have helped stem the losses that the company suffered in recent years and to ameliorate the company's financial position. Those efforts have brought some success, as the company's EBITDA (earnings before interest, taxes, depreciation and amortization) has improved, due largely to significant reductions in SG&A expenses. It remains the case, however, that the company lacks the cash necessary to fully finance the business operations and its strategic product initiatives. The company continues to manage its cash flows carefully to mitigate risk of insolvency. Nevertheless, without an infusion of cash in the months ahead, the company may not be able to realize its strategic plans and could eventually cease to be a going concern.

To address that cash need, management negotiated a $1-million revolving loan facility with a related party for working capital purposes in 2020. Also in 2020, management realized the sale of one of its two idle assets: the sale of the Runhao facility resulted in significant debt reduction and better positions the company to be able to access additional lines of working capital. Management also continues to explore options for the sale or repurposing of its idle Runyang primary processing facility in Jiangsu province to further address its cash needs and balance sheet.

Another factor that continues to contribute to the company's financial situation is the competitive price pressure in the stevia market over the last two years that has reduced mainstream Reb A products (such as Reb A 80 and Reb A 97) to the lowest price levels in years. Monk fruit prices have also become increasingly competitive in the marketplace. To maintain margins at sustainable levels, the company has focused on improving its production efficiencies, continues to strive for a mix of products that is weighted more heavily on higher margin, specialty products and has focused more on higher-margin direct sales.

The company continues to explore options to significantly improve its balance sheet and cash flows, whether through restructuring of debt or other opportunities for infusions of cash to address the debt load. The company also continues to explore options that may be complementary to the natural sweetener market, where it could leverage its production expertise and equipment toward an investment that may help grow the company's revenues and improve its financial position.

While the company continues to face substantial risks, management remains optimistic about the future opportunities for the company. Having closed the idle asset sale in 2020 and having successfully implemented right-sizing efforts to manage costs, as well as continuing to optimize production efficiencies, costs and planning, management is proceeding down the best available path to increased financial stability and profitability.

Appointment of chief financial officer

The company announced the appointment of Edward Wang as chief financial officer, effective Nov. 12, 2021. Mr. Wang, who joined the company in October, 2019, had been serving as acting chief financial officer since June of 2020.

In view of Mr. Wang's efforts and results in overseeing the company's financial reporting, cost controls and financial management of both the Chinese and North American operations, the board of directors agreed that Mr. Wang was the right person to continue leading the company's financial operations. Dr. Zhang expressed, "With Edward's performance since joining the company -- Edward has helped deliver significant savings in our SG&A and has managed the company's financial reporting professionally and admirably -- as a result I have full faith in him to continue driving us towards strong results, to execute on our strategy and to help take GLG to the next level."

Mr. Wang, who joined the company in October, 2019, had been serving as acting chief financial officer since June of 2020. He received his bachelor of arts in accounting degree in 1992, master of business administration in 2005 and earned his CPA, CGA, in 2010. Prior to joining GLG, Mr. Wang worked in Kraft Foods (China) for eight years and the mining business in both China and Canada for 10 years.

2021 AGM voting results

The company held its annual general meeting virtually on June 23, 2021. The shareholders voted in all nominated directors, with favourable votes for each exceeding 99 per cent. Dr. Luke Zhang continues as chairman of the board and chief executive officer and Brian Palmieri continues as vice-chairman of the board.

Selected financials

As noted herein, the complete set of financial statements and management discussion and analysis for the year ended Dec. 31, 2021, are available on SEDAR and on the company's website.

Results from operations

The results as shown in the attached table from operations have been derived from and should be read in conjunction with the company's annual consolidated financial statements for 2021 and 2020.

About GLG Life Tech Corp.

GLG Life Tech is a global leader in the supply of high-purity zero-calorie natural sweeteners including stevia and monk fruit extracts used in food and beverages. GLG's vertically integrated operations, which incorporates the company's Fairness to Farmers program and emphasize sustainability throughout, cover each step in the stevia and monk fruit supply chains including non-GMO (genetically modified organism) seed and seedling breeding, natural propagation, growth and harvest, proprietary extraction and refining, marketing, and distribution of the finished products. Additionally, to further meet the varied needs of the food and beverage industry, GLG has launched its Naturals+ product line, enabling it to supply a host of complementary ingredients reliably sourced through its supplier network in China.

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