GTEC Reports Third Quarter 2019 Results

• Significant revenue growth of 845%, resulting from sales in excess of $1 million
• Gross margin increased by 752% to $639,000, while continuing to achieve favourable margins of 62%
• Operating expenses were reduced by 37%, representing a $1.1 million reduction
• Increased annual production capacity by over 200% to 4,000 kg
• Successfully executed on all Health Canada licensing initiatives for 2019
• A strong cash balance of $4.4 million as of October 8, 2019

Kelowna, BC - October 9, 2019 – GTEC Holdings Ltd. (TSX-V:GTEC) (OTCQB: GGTTF) (FRA: 1BUP) (“GTEC” or the “Company”) announces it has reported its third quarter of fiscal 2019 results. As the Company continues its objective in developing purpose-built indoor operations to produce and distribute ultra-premium cannabis in Canada, it has remained committed to operating in a disciplined and fiscally responsible manner while delivering substantial revenue growth, combined with significant reductions in operating expenses.The Company is pleased to present the following results for the third quarter of fiscal 2019:Key financial highlights of the Third Quarter of Fiscal 2019

• Significant revenue growth of 845%, from the sale of 212 kilograms (“kg”) of cannabis, for total revenue in excess of $1 million (Q3 revenues were solely from the Company’s Alberta Craft Cannabis facility);
• Gross margin increased by 752% to $639,000, while continuing to achieve favourable margins of 62% before fair value adjustments, representing increased production and efficiency that continues to improve as the Company realizes economies of scale;
• Operating expenses were reduced by 37%, representing a $1.1 million reduction, as a result of management’s determination in implementing strict internal finance protocols; and
• Net operating loss of $1.1 million and a net loss of $2.3 million.

"With three operational licensed facilities cultivating our unique and premium genetics, the company is well positioned to continue achieving strong quarterly sales growth," said Norton Singhavon, Founder, Chairman and CEO of GTEC. "Furthermore, we are committed to operating in a fiscally disciplined manner in order to achieve success under dynamic and challenging market conditions."Key operating highlights of the Third Quarter of Fiscal 2019 

• Increased annual production capacity by over 200% to 4,000 kg of indoor flower, with the expectation of reaching full capacity utilization by the end of Q4 2019;
• Successfully executed all of the Company’s licensing initiatives for 2019, which included:
  • ACC receiving a Standard Processing Licence on July 26, 2019 (for sales into the Provincial & Territorial supply chains);
  • ACC receiving a Medical Sales Licence on July 26, 2019 (for direct online sales to medical patients);
  • Grey Bruce receiving a Standard Cultivation Licence on July 5, 2019; and
  • Tumbleweed receiving a Standard Cultivation Licence, Standard Processing Licence and Medical Sales Licence on August 16, 2019;
• Commenced cultivation at Grey Bruce Farms, which commenced its first harvest less than 90 days after receiving its licence;
• Commenced cultivation at Tumbleweed Farms with its first production harvest expected in December 2019;
• Introduced over 30 new premium cultivars (“strains”) into GTEC cultivation facilities. The majority of these cultivars are not currently available from other Licenced Producers and are predominantly a high THC profile;
• Flagship medical brand GreenTec^TM was added to CannaFarms’ (a wholly owned subsidiary of VIVO) online medical e-commerce platform;
• Established relationships with new B2B buyers: Cronos, TerrAscend, VIVO and Indiva;
• Produced 188 kg of cannabis at ACC, with an average production cash cost of $1.85 per gram;
• Implemented infrastructure upgrades at ACC, resulting in an improvement of efficiency, yield and product quality;
• Restructured corporate and operating functions to streamline and minimize the company’s cash burn going forward; and
• Revised the overall corporate strategy to focus on the cultivation and extraction of premium indoor flower.

Key subsequent events of the Third Quarter of Fiscal 2019

• A strong cash balance of $4.4 million (as of October 8, 2019), as a result of the following:
  • Received $4.06 million in debt repayment from Cannabis Cowboy Inc.;
  • Received $250,000 deposit repayment from Canopy Growth Corp. as a result of not proceeding with a Purchase and Sale Agreement related to an acquisition target; and
  • Generated $456,504 in revenue, from the sale of 85 kg of cannabis at an increased average selling price of $5.60 per gram for flower.
• Entered into an agreement to divest its 25% ownership in Cannabis Cowboy for gross proceeds of $1 million in stock and secured notes;
• Entered into an agreement to make an early payment of $800,000 towards its $5 million convertible debenture maturing June 2020, which payment is expected to be made October 15, 2019; and
• Grey Bruce Farms commenced its first harvest, consisting of GTEC’s new cultivars, which are expected to launch into Provincial and Territorial adult-use supply chains in November 2019.

Liquidity and Capital ResourcesAs at the date of this MD&A, the Company had a cash balance of $4.4 million. Based on the current financial resources and fiscal 2020 projected revenues, the Company anticipates that it has sufficient financial resources to continue the construction of its GreenTec BP and 3PL assets, and to fulfil all debt obligations due in the second half of fiscal 2020, without further equity dilution to its shareholders or assuming additional debt obligations.The Company now has three licensed facilities, with production and sales increasing month over month as Grey Bruce and Tumbleweed enter into full production. The Company is expecting a current annualized output of 4,000 kg^(A) from the existing facilities.Note (A): This estimate is consistent with historical output based on an output of 200 to 235 grams per square foot of canopy space on an annualized basis (or approximately two pounds per light each harvest).Over the duration of this quarter, management committed to restructure its corporate overhead and implement disciplined cost controlling measures in order to significantly reduce its cash burn. As a result, these initiatives have strengthened the organization’s financial position, and the operational expenses were reduced by 37% or $1.1 million.The current fiscal year to date had required several one-time expenses related to Health Canada regulatory licencing, legal fees for M&A, consultants, corporate development, financing initiatives, and general development costs. This resulted in the Company incurring greater than normal corporate overhead costs. Management remains committed to operating in a disciplined and fiscally responsible manner, and management believes the Company will be entering into a steady state of operations, where corporate expenditures are expected to be significantly reduced going forward and into the 2020 year.As previously announced, the Company has taken a strategic review of non-core/non-operational assets in order to strengthen its balance sheet and reduce its cash burn in preparation to repay its debt obligations due in Q3 and Q4 2020.  Through these initiatives, the Company received a $4.06 million outstanding loan repayment from Cannabis Cowboy, and concurrently entered into an agreement to divest its 25% equity stake in Cannabis Cowboy for a sum of $1 million. The divestment is expected to close on or before October 15, 2019.The Company will continue to review its non-performing assets and investments and explore strategic opportunities with the objective to utilize its cash flow to re-invest in near term accretive assets within the GTEC group of companies.On October 2, 2019, the Company entered into an agreement to make a payment of $800,000 to its senior secured $5 million convertible debt holder. Upon the completion of the payment, which is expected to occur on or before October 15, 2019, the balance of the loan will be $4.2 million.Outlook and Strategy The Company’s objective to produce, market and distribute ultra-premium quality indoor cannabis is being accomplished through the determination and execution of the GTEC team. The Company commenced with the development of five cultivation facilities across Canada, of which three are now licenced and operational. As a result, the Company is now revenue-generating with production growth to increase significantly throughout the upcoming fiscal quarters.The Company has commenced divesting of non-core/non-operational assets to strengthen its balance sheet, while focusing the organization’s resources on the cultivation and extraction of premium indoor flower and its derivatives, with the mandate to establish long-term brand equity and consumer loyalty by distributing premium quality cannabis products.Management anticipates that the Company will continue to achieve quarter-to-quarter sales growth until all of its production facilities are complete, licenced and fully operational. Upon achieving its full capacity target of approximately 9,000 kg^(B) during the fiscal 2020 year, the Company will re-evaluate additional opportunities for expansion or acquisitions through internal cash flow.Note (B): This estimate is consistent with historical output based on an output of 200 to 235 grams per square foot of canopy space on an annualized basis (or approximately two pounds per light each harvest).The Company continues to build-out and execute its strategic plan, with the following outlook:

• Currently producing premium quality indoor flower, with ultra-premium flower to commence harvesting in Q4 of 2019;
• Transition all existing facilities into the new cultivars, with the objective to increase the Company’s overall average selling price and gross margin;
• Q4 2019 production is now estimated between 320 kg and 370 kg of cannabis. The decreased production estimates from Q2 is due to delays in achieving full production within the newly licensed operations;
• Launch BLK MKT™ and Tenzo™ into the Provincial supply chains for adult-use/recreational sales, which include British Columbia, Alberta and Saskatchewan;
• Build and launch a medical sales business utilizing ACC’s Medical Sales Licence;
• Increase customer base, building on the existing base of B2B clients (Licensed Cannabis Companies);
• Continue the development of its GreenTec BP and 3PL facilities, which are now expected to be completed in 2020 (previously Q4 2019). The Company has deferred the completion timelines to align the capital expenditures with revenue and cash flow;
• Maximize the economic value of harvested plants, by optimizing the ratio of marketable components; such as the sale of flower, popcorn, and trim; as well as, converting its trim to value-add products (i.e. oil or pre-rolls); and
• Management’s objective is to be cash flow positive from operations within the first half of fiscal 2020.

A copy of the Management Discussion & Analysis and Financial Statements for the third quarter of fiscal 2019 can be downloaded from GTEC’s SEDAR profile. About GTECGTEC Holdings is a specialized cannabis company dedicated to cultivating ultra-premium quality cannabis in purpose-built indoor facilities. The company currently holds the following licences issued by Health Canada pursuant to the Cannabis Act and Regulations; three Standard Cultivation licences, two Standard Processing licences (for adult-use sales into the Provincial and Territorial supply chains), two Medical Sales licences (for direct to medical patients), Standard Processing (for extraction), and Analytical Testing.The management team is comprised of diverse experts from senior roles at leading global food & beverage, CPG and premium alcohol companies. GTEC has completed three cultivation facilities and is currently cultivating and selling cannabis. GTEC’s genetic portfolio is comprised of over 30 unique cultivars that have been developed through a comprehensive phenotyping process, which is expected to deliver a sustainable competitive advantage and provide favourable gross margins. GTEC’s ultra-premium indoor flower will be marketed and sold under its flagship trademarked brands; BLK MKT™, Tenzo™, GreenTec™, Cognōscente™ and Treehugger™.GTEC is actively pursuing sales and distribution opportunities across all major business channels: medical, recreational, B2B and export. GTEC is a publicly traded corporation, listed on the TSX Venture Exchange, OTCQB Venture Market and Frankfurt Stock Exchange. The Company is headquartered in Kelowna, British Columbia. To view more about the company or to request our most recent corporate presentation, please visit our website at www.gtec.coOn behalf of the board,Norton SinghavonFounder, Chairman & CEOMichael BladyCo-Founder & Vice PresidentFor additional information, please contact:GTEC Holdings Ltd.1-800-351-6358contact@gtec.co Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals, where applicable and the state of the capital markets. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. For instance and among other things, there can be no assurance that the Company will achieve full production capacity utilization by the end of Q4 2019; Tumbleweed Farms will complete its first harvest in December 2019; the Company will achieve profitability or significant growth each quarter; the Company will be able to settle its outstanding liabilities and debt obligations in the 2020 fiscal year without equity dilution to its shareholders or assuming additional debt obligations; production and sales will increase month over month; Grey Bruce and Tumbleweed will enter into full production; management will be successful in further reducing its cash burn; the Company will be able to reduce expenditures in the 2020 fiscal year and strengthen its balance sheet; the Company will be able to complete construction of its facilities and transition its existing facilities into the new cultivars; the Company will successfully build and launch a medical sales business; the Company will increase its customer base; the Company will successfully maximize economic value of harvested plants by optimizing the ratio of marketable components; the Company will become cash flow positive; production, capacity or efficiency estimates or sales projections will be met; the Company’s selling price and gross margin will increase; unforeseen construction, harvest or delivery delays will not occur; the Company’s combined annual output will be approximately 9,000 kilograms or more; the Company’s genetic portfolio will deliver a sustainable competitive advantage and provide favourable gross margins or that the Company will be able to establish long-term brand equity and consumer loyalty; and there will be continued demand for the Company’s flower. Accordingly, readers should not place undue reliance on forward-looking statements, which speak only as of the date of this news release. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.This news release refers to certain financial performance measures that are not defined by and do not have a standardized meaning under International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. These non-IFRS financial performance measures are defined in the MD&A. Non-IFRS financial measures are used by management to assess the financial and operational performance of the Company. The Company believes that these non-IFRS financial measures, in addition to conventional measures prepared in accordance with IFRS, enable investors to evaluate the Company’s operating results, underlying performance and prospects in a similar manner to the Company’s management. As there are no standardized methods of calculating these non-IFRS measures, the Company’s approaches may differ from those used by others, and accordingly, the use of these measures may not be directly comparable. Accordingly, these non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.