Nutritional Growth : Annual Report to shareholders

Annual Report 31 December 2021 Nutritional Growth Solutions Ltd

Ngsolutions.co

A LETTER FROM OUR CHAIRMAN

Dear Shareholders

On behalf of the Board, it is with pleasure I present Nutritional Growth Solutions' annual report for the financial year ended 31 December 2021 (FY21).

I have joined the NGS Board at an exciting time where NGS' new nutritional, scientifically formulated products are being rolled across new channels and new geographies.

Healthy Heights® is now available in five countries worldwide, with the additions of Italy and China throughout 2021. With the newly manufactured New Zealand products, NGS can now extend its global footprint even further, into of Australia and Southeast Asia.

The Company made significant advancements in the United States, increasing our range of products and investing in marketing to build our profile, and as a result online sales grew strongly. Post reporting period, NGS commenced its retail expansion strategy that will strengthen our position in the US market by providing exposure to buyers and category mangers working for some of the world's leading retail brands including Wholefoods, CVS Pharmacy,

Target and 7-Eleven, through ranging agreements with Walmart.com and Rangeme.com.

To ensure the company is best positioned to increase its market share across current and new markets and deliver on our vision of being a leading household name for child nutrition, NGS hired a new President in North America, and an Australian-based Commercial Director for China.

Nutritional Growth Solutions is in a unique position to successfully enter new markets and become the household name for trusted children's growth support products. We are the leading brand that supports children to grow to their full potential with nutritional formulas created by doctors, backed by science and clinically proven.

On behalf of the Board, thank you for your support. I am confident our unique and growing product suite, along with our continued expansion, has us well positioned for rapid growth with a clear pathway to profitability. As we enter this exciting new phase of our business, we will continue our journey to improve the nutrition and growth of children around the world and deliver strong results for our shareholders.

David Fenlon

Non-Executive Chairman

A LETTER FROM OUR CEO

Dear Shareholders

This year has been a year of significant operational progress for Nutritional Growth Solutions, advancing each of our key growth pillars - new markets, new products, and new sales channels.

This progress has ensured we delivered record results, generating over US$3 million in revenue - an increase of 63% from 2020. Combined with a healthy cash balance of US$4.1 million, we are well placed to deliver on our vision to become the household name for trusted children's growth support products.

2021 was a year of investment for the business, where we strengthened our sales, marketing and product development. These enhanced capabilities set the Company up for growth going forward, and are reflected in the FY21 net loss of $4.8 million.

Throughout the year, we remained focused on progressing the business towards achieving our mission by expanding our international footprint, developing a new range of scientifically backed products and broadening our distribution agreement remit.

Healthy Heights® is now selling in two new territories, China and Italy, with entry into Southeast Asia to occur in 2022. Our 2021 sales in Italy exceeded expectations, surpassing US$500k and we have a healthy distribution network in China, signing distribution agreements with Chemist Warehouse China and Ultrahealth throughout the year. Combined with our Tmall Global flagship store and New Zealand manufactured product that will be available in early 2022, we expect China to be a high growth market for NGS in 2022.

In the United States we prepared to commence our mass retail expansion. Our packaging now incorporates retail friendly canisters and single serve sachets to support the retail rollout, and includes the e-commerce platform of the world's largest retail group, Walmart.com, which was announced post-year end. The Healthy Heights® brand will be exposed to buyers and category mangers working for some of the world's leading retail brands including

Wholefoods, CVS Pharmacy, Target and 7-Eleven who are looking for new and innovative products to expand their ranges through RangeMe.com.

We launched two new innovative Healthy Heights® products, Grow Daily Boys 10+ and Grow Daily 3+ Nutrition Bars. The Healthy Heights® Grow Daily 10+ is a shake formulated with a patented blend of nutrients to support the physical development of young males entering pre-teen and teenage years. The formula received positive clinical trial results showing an increase in growth in healthy, lean, and short pre-adolescent 10 to 14.5-year-old males, and the Grow Daily 3+ Nutrition Bars are formulated with the same nutritional profile as the Grow Daily 3+ shake that is clinically proven to increase growth development in children aged between 3 and 9 years old by 13.8% - 34% in their annual growth.

I am confident that the investments we have made in our brand, our people and our products will ensure the long-term success of NGS. We have trusted, highly nutritional products, that are scientifically proven to help young people reach their optimal height, supported by a healthy pipeline of new territories, distribution agreements and new product development that will place NGS into its next phase of growth.

I would like to take this opportunity to sincerely thank our shareholders, valued partners and the entire Nutritional

Growth Solutions team. Together, we can enrich children's lives by providing them with top-quality nutritional products that are clinically proven to work - giving them the best opportunity to grow into the person they are meant to be.

Lion Fendell

Managing Director & Chief Executive Officer

NUTRITIONAL GROWTH SOLUTIONS LTD.

CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2021