"Despite the recent transition to new management and a slow January due to destabilized business operations in the fourth quarter of 2015, we successfully stabilized the business, implemented systematic internal cost control measures and delivered a solid quarter of recovery and a strong path to profitability to our shareholders," stated Dr. Alex MacGregor, President and Chief Executive Officer. "We were particularly pleased with our improved gross profit, SG&A cost reduction, and significant reduction in the adjusted negative EBITDA compared to the same period last year which signals a path to strong recovery."

"The Company has implemented a number of internal cost control measures aimed at eliminating redundant operational expenses and improving gross margins. The reduction in adjusted negative EBITDA from school operations of 46% in the first quarter of 2016 compared to the same period in the prior year, demonstrates that the Company is on a progressive path to profitability." said Alex MacGregor, President and Chief Executive Officer.

Financial Performance

The following table summarizes and compares the first quarter financial results for 2016 with the same period a year ago.

The Company reported a net loss of $3.63 million for the first quarter of 2016 (or a loss of $0.02 per share), compared to a net loss of $5.94 million (or a loss of $0.038 per share) for the same period in 2015. Adjusted negative EBITDA was negative $2.71 million, or - $0.015 per share for the first quarter of 2016 compared to negative $4.97 million, or -$0.031 per share for the same period in 2015. In the first quarter of 2016, adjusted negative EBITDA reduced 46% over the same period last year in 2015.

Cash flow from operations was negative $2.97 million in the first quarter of 2016. The Company's direct costs was $6.78 million in the first quarter of 2016. Direct costs represented 92% of total revenue, a decrease of 5 percentage points as compared to the first quarter of 2015 due to reduced occupancy costs and improved teacher to student ratios.

Selling, General and Administrative (SG&A) expenses were $3.67 million in the first quarter of 2016, or approximately 50% of total revenue, which was a decrease of 10% over the same period prior year. SG&A was lower this quarter due to the improved integration of common costs across all campuses, systematic reduction of redundant expenses and improved internal cost control measures. The Company expect this ratio to improve further for the remainder of 2016.

Reduction in tuition revenue in first quarter of 2016 of 16% is attributable to the closure of six (6) campuses and the loss of students from the discontinued South Korean student recruitment agencies in 2015. There were two (2) South Korean agencies owned by the Company as at March of 2015. These agencies were sold in the third quarter of 2015. New Management believes that improved relationships with student recruitment agencies coupled with implementation of the new marketing plan that diversifies student recruitment to China, India and Brazil will improve revenues. These initiatives are expected to increase tuition revenues in the subsequent quarters as well as improve profitability due to lower recruitment commission rates in these new markets compared to the previously dominant South Korean market.

About KGIC Inc.

KGIC Inc. is an educational organization that provides premium education services at its private English as a Second Language ("ESL") Schools, High School, Career Colleges and Community Colleges across Canada in Ontario and British Columbia. The Company owns and operates twenty-one (21) campuses in Ontario and British Columbia and enrolls approximately 20,000 students yearly in various English language and career training educational courses.

KGIC Inc. owns and operates private English as a Second Language (ESL) Schools, Career Colleges and Community Colleges in Toronto, Vancouver and Victoria.

Forward-Looking Information and Statements

This news release includes certain forward-looking information and statements within the meaning of Canadian securities laws. Such forward-looking information and statements are not representative of historical facts or information or current condition, but instead represent only the Company's beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company's control. Generally, such forward-looking information or statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken, "will continue", "will occur" or "will be achieved". The forward-looking information contained herein includes information relating to the Company's operating results. By identifying such information and statements in this manner, the Company is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such information and statements.

Any number of important factors could cause actual results to differ materially from these forward-looking statements as well as future results including, but not limited to, risks relating to: the Company's ability to service its outstanding indebtedness and the impact of that indebtedness on the Company's ability to raise additional capital, fund and maintain operations or meet business objectives; the Company's ability to comply with the terms of the amended forbearance agreement with Bank of Montreal and the consequences of any breach or default thereunder; the Company's ability to successfully exit forbearance; the Company's ability to complete any proposed recapitalization or restructuring activities on terms acceptable to the Company or at all and the expected cost savings related thereto; the fact that new management of the Company, including the recently appointed Chief Executive Officer and Interim Chief Financial Officer, have had limited experience with the Company and its operations and have not had sufficient time to fully analyze all facets of the Company's business; the impact of negative or unfavourable rumours in the marketplace on the Company's brands and student enrollment; any of the Company's announced or proposed acquisitions failing to close or becoming delayed before closing; carrying on business and activities in international jurisdiction where Canadian laws do not apply; any loss of certain key personnel; levels of student enrolment; delays in rolling out online education programs; delays to the completion of any planned initiatives or the inability to complete those initiatives; competition in the educational services market; and currency fluctuations. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information and statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. Accordingly, readers should not place undue reliance on any forward-looking information or statements contained in this press release.

The forward-looking information and statements contained in this press release is made as of the date hereof, and the Company does not undertake to update any forward-looking information and/or statement that is contained or referenced herein, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. All subsequent written and oral forward looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice.

Caution Regarding Non-IFRS Financial Measures - The Company references certain measures in this press release, which do not have a standardized meaning as prescribed by International Financial Reporting Standards ("IFRS") and are unlikely to be comparable to similar measures presented by other issuers. These non-IFRS measures have been presented in this press release in order to provide shareholders and potential investors with additional information regarding the Company, but should not be considered in isolation or as a substitute for, or more meaningful than, measures prepared in accordance with IFRS, such as net income (loss) or cash flow from operating activities. Please refer to the Company's Management's Discussion and Analysis as at and for the three and nine months ended September 30, 2015 for a reconciliation of these non-IFRS measure to measures prescribed by IFRS.

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.