Organic Garage Reports Second Quarter Results

Organic Garage Ltd. (“Organic Garage” or the “Company”) (TSXV: OG, OTCQX: OGGFF, FRA: 9CW1), one of Canada’s leading independent organic grocers and a developer of plant-based products, is pleased to announce the Company’s financial results for the quarter ended July 31, 2021 (“Q2”). The Company has a Fiscal Year End of January 31.

Q2 Financial Results (comparison to quarter ended July 31, 2020):

• Working capital of $1.9 million from working capital of $1.0 million at January 31, 2021 and a working capital deficit of $-0.3 million as at July 31, 2020
• Cash balance of $2.5 million from $1.6 million as at January 31, 2021 and $0.9 million as at July 31, 2020
• Gross profit dollars increased from $2.19 million to $2.25 million, representing a 2.5% increase over the same period
• Sales decreased from $8.1 million to $6.8 million as the impact of Covid-19 overstocking subsided
• Adjusted net loss¹ improved from an adjusted net loss of $201,724 to reach adjusted net loss of $70,134
• Store wages and benefits decreased by 17.3% due to improved efficiencies
• Administrative wages and benefits decreased by 22.3% due to improved efficiencies

Net loss: The Company had a net loss of $-383,130 for the quarter ended July 31, 2021, compared to a net loss of $-201,724 for the quarter ended July 31, 2020. The decrease was primarily related to non-cash stock-based compensation offset by improved gross margins, decreases in store wages and benefits, administrative wages and benefits and transportation costs related to the Company’s phase out of warehouse operations.

The Company completed its shift to a decentralized distribution model in April 2021, and successfully entered into an agreement to sub-lease the facility located at 50 Akron Road for the remainder of the lease term. During the three months ended July 31, 2021, the Company’s incremental savings were approximately $238,000, consisting primarily of savings related to wages and benefits, transportation, and rent.

Matt Lurie, CEO of Organic Garage, commented, “We are very pleased with our strong Q2 results which built on our Q1 performance and have put the Company on a promising trajectory for the remainder of the year. Our gross profit improvement is a testament to the focus that management has put into our strategic purchasing process. We have received great feedback on the expansion of our Hand-Picked Partners roster, which now includes Cheese Boutique and Tori’s Bakeshop.

The incremental savings in moving to our decentralized distribution model and phasing out our warehouse continues to provide the Company with improved financial results and economic flexibility. Working capital and cash positions have seen sustained improvement as the Company continues to focus on delivering consistent value for our shareholders and explore other future market opportunities.

Our new partnership for online deliveries that was announced in the summer has shown positive reaction from our customers who can now complete online orders from a significantly larger geographic footprint than what was previously available.

The Future of Cheese operations continue to swiftly develop, and we are focused on the upcoming launch of the first products in the near-term. Management is focused on finalizing product development, building out our strategic relationships, and the growth and recognition of the brand and its products.”

Shareholder Communications and Investor Relations

Organic Garage will be engaging Octagon Media Corp. to provide corporate communication and strategy services for the Company for an initial period of three months. The engagement is anticipated to commence in October 2021 and will provide for the grant of 800,000 stock options at an exercise price that will be the greater of $0.40 and the market price prior to the date of grant, as well as a fee of $47,500 USD.

In addition, Organic Garage will be engaging North Equities to provide consulting and investor engagement services for an initial period of three months. The engagement is anticipated to commence in October 2021 and will provide for a grant of 200,000 stock options at an exercise price that will be the greater of $0.40 and the market price prior to the date of grant, as well as monthly fee of $12,500.

About Organic Garage Ltd.

Organic Garage (TSXV: OG, OTCQX: OGGFF, FRA: 9CW1) is one of Canada’s leading independent organic grocers and is committed to offering its customers a wide selection of healthy and natural products at everyday affordable prices. The Company’s stores are in prime retail locations designed to give customers an inclusive, unique and value-focused grocery shopping experience. Founded in 2005 by a fourth-generation grocer, Organic Garage is headquartered in Toronto. The Company is focused on continuing to expand its retail footprint within the Greater Toronto Area. For more information please visit the Organic Garage website at www.organicgarage.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Non-IFRS Financial Measures

This press release includes references to certain non-IFRS financial measures. These non-IFRS measures do not have any standardized meanings prescribed by International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, they should not be considered in isolation, in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with IFRS.

Cautionary Note Regarding Forward-looking Statements

This news release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words, including negatives thereof, suggesting future outcomes.

Forward looking statements are subject to both known and unknown risks, uncertainties and other factors, many of which are beyond the control of Organic Garage, that may cause the actual results, level of activity, performance or achievements of Organic Garage to be materially different from those expressed or implied by such forward looking statements. Although Organic Garage has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. In this News Release, Organic Garage is making forward-looking statements related to, including but not limited to: the Company’s trajectory for the year; the development activities of Future of Cheese and the launch of initial products; the engagement of Octagon Media Group and the related compensation to be paid and services to be acquired, as well as the timing of the engagement; and the engagement of North Equities and the related compensation to be paid and services to be acquired, as well as the timing of the engagement.

Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties, some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Organic Garage's actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Any forward-looking statements are made as of the date hereof and, except as required by law, Organic Garage assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.

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