Mr. Steve Bromley reports

ORGANTO RELEASES FISCAL 2024 SECOND QUARTER FINANCIAL RESULTS

Organto Foods Inc. has released its financial results for the three- and six-month periods ended June 30, 2024. All amounts are expressed in Canadian dollars and in accordance with international financial reporting standards (IFRS), except where specifically noted.

"Our financial results for the second quarter of 2024 reflect a significant improvement over previous quarters as we continue to restructure both our operations and our balance sheet with the goal of repositioning our business for profitable growth, and, more importantly, achieving profitability and long-term stability. We believe we are making good progress in our repositioning, including streamlining our product portfolio to categories where we believe we can win, refocusing our marketing strategies, and reducing our operating costs via internal reorganization and reprioritization. In addition, we continue to focus on the restructuring of our convertible debenture obligations, which is expected to result in reduced debt levels and greater operating flexibility. We believe the impact of these initiatives will continue to be apparent as we report our results in the coming periods," commented Steve Bromley, chair and chief executive officer.

Mr. Bromley commented further: "With the filing of our financial statements and management discussion and analysis for the second quarter of 2024 complete, we believe we have met the key requirements to apply to have the current cease trade order lifted and will immediately begin this process. We are also confident that we will meet the deadline for filing of financial statements for the third quarter of 2024 in accordance with established regulatory timelines. The delays we experienced in filing our financial statements due to personnel and systems changes at the end of 2023 and beginning of 2024 were unfortunate, and we appreciate the work done by all involved in completing these financial statements and bringing our filings up to date. We also appreciate the continued support we have received from our shareholders, debentureholders and key operating partners as we work through this restructuring period. We remain committed to building a world-class foods company focused on serving growing global healthy foods markets with the goal of building long-term shareholder value."

Financial results overview:

• Gain of $2.7-million on the sales of three of Organto's wholly owned Dutch operating subsidiaries (see July 12, 2024, and June 5, 2024, news releases) and gain of $400,000 on the dissolution of a subsidiary;
• As a result of the sales of the three subsidiaries, all revenue and expenses, as well as any gains and losses relating to the operations of the sold subsidiaries, have been eliminated from Organto's continuing operations and instead are shown as a single line item, loss from discontinued operations, for both the current period and any comparative historical periods;
• Year-to-date sales of $9.0-million, versus sales of $7.3-million in the prior year, an increase of 23 per cent;
• Current-quarter sales of $4.4-million, versus sales of $3.5-million in the prior year, an increase of 24 per cent;
• Year-to-date gross profit of $600,000 or 6.2 per cent of sales, versus $600,000 or 8.8 per cent of sales in the prior year. When adjusted for realized gains derived from currency hedging directly related to product purchases, adjusted gross profit (1) was approximately 5.2 per cent of sales, versus 7.9 per cent in the prior year. Gross profit was negatively impacted by unfavourable currency fluctuations and market conditions;
• Current-quarter gross profit of $300,000 or 6.4 per cent of sales, versus $300,000 or 8.0 per cent of sales in the prior year. When adjusted for realized gains derived from currency hedging directly related to product purchases, adjusted gross profit (1) was approximately 5.8 per cent of sales, versus 6.6 per cent in the prior year;
• Cash overhead costs declined to 13 per cent of sales for the current quarter and 12 per cent of sales year to date, versus 15 per cent and 13 per cent in the prior year. The decrease in cash operating costs reflects the impact of efforts to streamline and simplify the business, refocused marketing strategies, and the realignment and refocusing of internal resources and spending;
• Current-quarter income from continuing operations was $2.4-million. Excluding the gains from the dissolution and sales of subsidiaries, the current-quarter loss from continuing operations was $600,000, versus $1.0-million in the prior year;
• Year-to-date income from continuing operations was $2.0-million. Excluding the gains from the dissolution and sales of subsidiaries, the year-to-date loss from continuing operations was $1.1-million, versus $1.6-million in the prior year;
• Current-quarter loss from discontinued operations was $400,000, versus $1.3-million in the prior year;
• Year-to-date loss from discontinued operations was $1.4-million, versus $2.7-million in the prior year;
• Current-quarter net income was $2.1-million, versus a net loss of $2.3-million in the prior year;
• Year-to-date net income was $600,000, versus a net loss of $4.3-million in the prior year.

Interested parties may access the company's filings, including financial statements and accompanying management discussion and analysis, for the period ended June 30, 2024, on SEDAR+ or at the company's website under the investors tab.

(1) The information presented herein refers to the non-IFRS (international financial reporting standards) financial measure of adjusted gross profit. The company hedges currencies for certain product categories where either the supply or sales commitments are fixed in foreign currencies. The gains and losses from these hedging activities are combined with gross profit to determine adjusted gross profit. This measure is not a recognized measure under IFRS and does not have a standardized meaning prescribed by IFRS. Non-IFRS financial measures should not be considered in isolation nor as a substitute for analysis of the company's financial information reported under IFRS and are unlikely to be comparable with similar measures presented by other issuers. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the company's results of operations from management's perspective and thus highlight trends in the company's business that may not otherwise be apparent when relying solely on IFRS measures. The company believes that securities analysts, investors and other interested parties frequently use non-IFRS financial measures in the evaluation of the company. The company's management also uses non-IFRS financial measures to facilitate operating performance comparisons from period to period and to prepare annual operating budgets and forecasts.

About Organto Foods Inc.

Organto is an integrated provider of branded, private-label and distributed organic and non-GMO (genetically modified organism) fruit and vegetable products using a strategic asset-light business model to serve a growing socially responsible and health-conscious consumer around the globe. Organto's business model is rooted in its commitment to sustainable business practices focused on environmental responsibility, and a commitment to the communities where it operates, its people and its shareholders.

We seek Safe Harbor.