Vancouver, B.C. August 12, 2016 – GLG Life Tech Corporation (TSX: GLG) (“GLG” or the “Company”), a ghttps://www.glglifetech.com/wp-admin/post-new.phplobal and agricultural leader in the natural zero-calorie sweetener industry, committed to the sustainable development of high-quality zero-calorie natural sweeteners, announces financial results for the three and six months ended June 30, 2016. The complete set of financial statements and management discussion and analysis are available on SEDAR and on the Company’s website at www.glglifetech.com.

FINANCIAL HIGHLIGHTS

International stevia sales rose by 27% in the second quarter of 2016 over the comparable period in 2015. International sales overall continue to make up an increasing proportion of total revenues, at 92% in the second quarter of 2016, compared to 85% in the first quarter of 2015 – a result of both the Company’s continued preference for higher-purity extract sales internationally and a decline in lower-purity extract sales in China.
For the six months ending June 30, 2016, international stevia sales were up by 47% over the same period in 2015, reflecting increasing demand for GLG’s stevia extracts. International sales accounted for 88% of total sales in the first six months of 2016 compared to 83% in the comparable period of 2015.
Total revenue for the quarter was down 46% relative to the second quarter 2015. In addition to the decrease in low-purity stevia sales in China, monk fruit sales decreased due to a shift in the Company’s business model for monk fruit. In 2015, the Company’s sole distribution partner placed the bulk of its orders for delivery in the first six months of the year, whereas in 2016, GLG transitioned from its prior monk fruit distribution partner to ADM as well as direct sales in the dietary supplement sector. This transition resulted in relatively lower volumes sold in the first half of the year; the Company expects the majority of orders for its monk fruit inventories to come in the second half of the year. Naturals+ revenues were also down relative to second quarter 2015, as the 2015 Naturals+ revenues comprised one customer whose product needs have since shifted. Revenue for the six months ended June 30, 2016, was $9.9 million, a decrease of 30% compared to $14.2 million in revenue for the same period last year.

Margins on international sales of high purity stevia and monk fruit in the second quarter each improved over the comparable period in 2015. Margins overall decreased by 11 percentage points (0% in Q2 2016 versus 11% in Q2 2015), as higher idle capacity charges and no margin contribution from Naturals+ sales outweighed the stevia and monk fruit margin increases. For the six months ended June 30, 2016, stevia margins were up over the comparable period in 2015, while monk fruit margins were slightly down; overall margins were down for the period (1% margin in the first six months of 2016 versus 9% for the comparable period in 2015).

Net Loss for the second quarter of 2016 was $4.0 million compared to $3.5 million in the first quarter of 2015, or a 14% increase. The basic loss and diluted loss per share from operations was $0.11 for the three months ended June 30, 2016, compared with a basic and diluted net loss of $0.09 for the same period in 2015.

Net Loss for the six months ended June 30, 2016, was $8.4 million, an increase of $0.1 million or 1% over the comparable period in 2015 ($8.3 million loss). For the six months ended June 30, 2016, the basic loss and diluted loss per share from operations was $0.22, compared with a basic and diluted net loss from operations of $0.22 for the same period in 2015.

CORPORATE / SALES DEVELOPMENTS

ADM, GLG Partner to Bring Low-Calorie Stevia, Monk Fruit Sweeteners to Customers Worldwide

On June 6, 2016, Archer Daniels Midland Company (NYSE: ADM) and GLG Life Tech Corporation
announced a new partnership to manufacture, market, sell and distribute low-calorie stevia and monk fruit sweeteners to customers around the globe.

Under the terms of the agreement, GLG will produce an extensive array of low-calorie sweeteners made from stevia and monk fruit, while ADM will be the exclusive global marketer and distributor of those ingredients to food and beverage companies worldwide.

Representatives of the companies had the following to say:
“More and more consumers are looking for healthier foods that are made with natural ingredients and taste great,” said Rodney Schanefelt, Director, sugar and high intensity sweeteners, for ADM. “ADM is already helping customers meet that growing demand with our comprehensive portfolio of ingredients and flavors. Now, we’re expanding that portfolio even further by offering customers around the world a wide array of great stevia and monk fruit sweeteners. We are pleased to partner with GLG, which has a demonstrated advantage in developing non-GMO stevia varietals and a pipeline of future innovative products.”

“This partnership—combining GLG’s capabilities and reputation as one of the largest, most trusted manufacturers of low-calorie sweeteners with ADM’s global distribution capabilities and existing ingredient portfolio—offers tremendous opportunities for both companies and their customers,” said Brian Meadows, GLG President and CFO. “Consumers are demanding healthy, delicious foods and drinks with clean labels, natural ingredients, and reduced added sugar—together, ADM and GLG will be the goto source for food and beverage companies looking to meet that demand.”

GLG Achieves Major Milestone in Debt Restructuring Plan

On July 26, 2016, GLG announced an important milestone in the Company’s plan to restructure its Chinabased bank loans. Additionally, the Company successfully renewed a RMB 7 million bank loan with the Huishang Bank on July 1, 2016.

As of July 20th, 2016, four of five of the Company’s 100% owned Chinese Wholly-Owned Foreign Enterprises (“WOFEs”) were consolidated into a single entity (Chuzhou Runhai Stevia High Tech Company Limited or “Runhai”) under Chinese law – and, significantly, Runhai is approved to become a Joint Stock Company (“JSC”). This form of corporation, under Chinese law, provides it considerable opportunities to raise capital. For example, Runhai will now be able to add Chinese investors, raise equity capital in China, and convert China-based debt into equity in the JSC. Post consolidation of the four China subsidiaries, the Company retains its 100% ownership of Runhai and all of the consolidated assets of the previous four China subsidiaries.

The three subsidiaries consolidated into Runhai are:
Anhui Bengbu HN Stevia High Tech Development Company Limited
Qingdao Runhao Stevia High Tech Company Limited
Dongtai Runyang Stevia High Tech Company Limited

One of the key outcomes of the conversion of Runhai into a JSC was the underlying agreed valuation of the consolidated Runhai entity. Runhai’s total investment approval by the China Government is USD 120 million and its net assets are valued at USD 42 million. The difference between the asset valuation and net assets value provides Runhai USD 78 million available for debt conversion, additional working capital or equity raises

GLG’s subsidiary Qingdao Runde Biotechnology Co., Ltd. remains a 100% owned WOFE of GLG.

One particular benefit of reforming the Company’s Chinese holdings into a JSC is that the limitations previously foreclosing the Company from access to Chinese debt and capital markets are gone. As a JSC, Runhai will be eligible to have its Chinese-held debt converted into equity shares at the subsidiary level, such that a major portion of that debt could be removed from the Company’s balance sheet. GLG, with the PRC government’s support, is in active discussions with Runhai’s Chinese debt-holders to negotiate terms for a debt-equity swap, and is exploring multiple options for access to valuable working capital. The Company expects to retain a majority controlling interest in Runhai after any expected debt conversion into equity in Runhai. Further, Runhai will have the ability to solicit Chinese capital markets and investors for working and other capital, bolstered by a more attractive balance sheet and a strong appetite in China for growth opportunities.

The process to convert the four WOFEs into a single consolidated Joint Stock Company was unusually complex. To give perspective on this major accomplishment, GLG management had to work through ten different government agencies across three provinces and four cities in order to obtain the relevant approvals necessary to accomplish this important milestone.

With this foundational milestone completed, GLG’s plan is to restructure its China debt by availing itself of one or more options now open to the Company. The Company also expects to gain access to new sources of working capital to facilitate its plans for substantial growth in its stevia, monk fruit, and GLG Naturals+ businesses.

Launch of GoZero™ Solutions

On February 1, 2016, GLG announced the launch of GoZero™ Solutions. This innovative portfolio provides GLG’s customers with unparalleled natural and Non-GMO zero-calorie sweetener options and proprietary formulations tailored to our customers’ specific calorie reduction needs.

The challenges to global food and beverage companies are well documented with respect to the need for reduced amounts of sugar in formulations. The global per capita sugar consumption peaked in the late 1990’s; however, it has been declining ever since due to an increase in health awareness and prevalence of diet-related health conditions, such as diabetes. Moreover, government regulations and guidelines, such as sugar taxes in the US and Mexico, and new dietary guidelines limiting the amount of added sugar in foods have made it challenging for food and beverage manufacturers to continue to use the same amounts of sugar in their formulations as they have used in the past. Added to this challenge, consumers’ willingness to consume artificial sweeteners has been declining due to a general mistrust in synthetic chemical compounds.

In fact, consumers are increasingly looking to incorporate natural, plant-based ingredients in their diets. The movement of the market toward zero-calorie, natural sweeteners has placed immense pressure on marketing, R&D and procurement teams to reformulate to reduce sugar and artificial sweeteners in their products.

However, the transition to stevia as a natural zero calorie sweetener has proved challenging due to its known aftertaste issues such as astringency and bitterness. But things are changing for the better, as GLG introduced its newest product line to global food and beverage companies – GoZero™ Solutions – to address all these challenges with going zero.

GLG’s GoZero™ Solutions offer:

1. Largest portfolio containing the most complete set of zero-calorie, natural sweeteners including
stevia, enzymatically modified stevia, monk fruit and bitter blockers
2. Better tasting stevia and monk fruit with ClearTaste™ natural bitter blocker
3. Custom formulations for customers
4. Fast prototyping of reduced or zero calorie formulations for R&D groups
5. Superior taste and flavor profile tailored to specific food matrices
6. Fast response and support from our experienced support team
7. Cost effective solutions
8. Clean labels
9. Reduction in use of sugar while maintaining taste
10. Removal of artificial sweeteners from the formulation
11. Halal, Kosher, Non-GMO, and natural solutions
12. Organic and conventional format

GoZero™ Solutions is the result of over 15 years’ hard work of more than 60 agricultural scientists, product innovation and food application specialists, and food engineers. This concerted effort enabled GLG to formulate a diverse product portfolio applicable to a wide range of food, beverage, and dietary supplement products that are cost-effective and superior in taste, flavor, and quality.

Major Advances in High-Purity Leaf for Reb M

On February 29, 2016, GLG announced a major agricultural breakthrough in its agricultural R&D program. Through this program, GLG aims to revolutionize the global food and beverage industry by providing companies with the ability to replace sugars and artificial sweeteners with naturally-sourced Rebaudioside M (“Reb M”). The program’s latest accomplishment is a stevia leaf strain with Reb M levels more than ten times higher than conventional stevia leaf.

Reb M, one of several steviol glycosides found in the stevia plant, is highly desired in the industry as a natural, zero-calorie sugar and sweetener replacement, one that very closely resembles sugar. To date, the impediment to utilizing Reb M has been its scarce presence in the stevia leaf, making commercial use cost-prohibitive. Bringing a naturally-sourced Reb M extract to the market on a commercial scale requires a dramatic increase in the presence of Reb M glycosides in the leaf.

A dramatic increase in Reb M is just what GLG achieved. Through development of its Reb M seedling using its non-GMO patented breeding methodology, GLG has now produced more than a 1000% increase in Reb M levels in stevia leaf. Conventional stevia leaf has Reb M concentrations at less than 0.1% of dry leaf weight, and less than 1% of total steviol glycosides (“TSG”). In GLG’s seedling, Reb M constitutes over 1% of dry leaf weight, and over 8% of the TSG’s. Further, TSGs constitute about 13% of dry leaf weight in GLG’s new seedling, which is above the industry average of 10-12% of dry leaf weight.

The 1000% increase in Reb M glycosides in its new variety is the result of two key factors: (1) an expanded Reb M seedling development program that GLG undertook in 2015 and (2) the 25 years’ experience of its chief agronomist. The 2015 program involved evaluating thousands of different stevia strains, requiring an extensive program to identify and promote the most promising strains. GLG’s 2014 breakthrough with its high Rebaudioside C (“Reb C”) seedlings clearly demonstrated the promise of its patented Non-GMO seedling hybridization technology to significantly increase scarce glycosides. And in 2015, GLG announced a stevia leaf strain with significantly enhanced levels of both Rebaudioside D (“Reb D”) and Reb M. This latest achievement, focused specifically on Reb M, further demonstrates GLG’s agricultural prowess.

GLG is in the process of filing for patent protection for its Reb D and Reb M seedlings. And GLG has filed two GRAS applications with the FDA for high-purity Reb D (GRN 548) and Reb M (GRN 512), with purity levels ranging from 80% to 95% to be used as a sweetener.

Partnership with MycoTechnology Corporation for Improved Taste of Stevia

On January 7, 2016, GLG, in conjunction with MycoTechnology Corporation (“MycoTech”), together announced a commercial partnership agreement to incorporate MycoTech’s ClearTaste™ product to improve the taste of stevia and monk fruit. The partnership combines GLG’s strengths in the natural sweetener space with the benefits of MycoTech’s innovative ClearTaste product, a certified USDA organic bitter blocking technology, in order to improve the taste of stevia and monk fruit.

There is a major trend underway in which mass produced, low nutritional quality foods, loaded with added sugar, salt and fat are being replaced with healthy, natural, low and zero-calorie alternatives. The changing consumer landscape has food manufacturers looking for natural high-intensity sweetener alternatives such as stevia and monk fruit. However, food manufacturers have also struggled with stevia’s aftertaste and astringent flavor profile.

MycoTech developed ClearTaste, derived from mushrooms, which as to stevia has the effect of removing its less desirable aftertaste. ClearTaste is a natural, GMO-free and chemical-free ingredient solution that works by harnessing the natural extracts found in gourmet mushrooms. The compounds are unique to fungi and are highly effective at improving the flavor profiles of stevia and monk fruit.

The initial term of the agreement is five years during which GLG will be MycoTech’s preferred vendor of stevia and monk fruit products. GLG further enjoys certain exclusivities in the commercial agreement with MycoTech products and the agreement also allows GLG to work directly with MycoTech to produce new products using both companies’ technology in return for purchase commitments with MycoTech.

Launch of P-Pro Plus

On March 9, 2016, GLG announced, in partnership with MycoTech, the launch of P-Pro Plus, a revolutionary product that complements the many benefits of pea protein with MycoTech’s groundbreaking 100% natural and USDA Organic certified bitter blocker, ClearTaste™, to offer a pea protein without any of the taste profile issues many food, beverage, and dietary supplement manufacturers experience with pea protein by itself.

Pea protein has recently drawn a lot of attention for being highly sustainable, vegan, vegetarian-friendly, hypoallergenic, a good source of amino acids, easy to digest and a good alternative to soy protein products. Pea protein promotes not only its protein content, but also fiber, vitamins and minerals. As a legume, peas return nitrogen to the soil and are considered a highly sustainable food source. Increased demand for more sustainable protein globally and more vegan and allergen-free options is driving development of more plant-based protein sources. Pea protein products can replace a significant percentage of other proteins in many applications and can offer cost savings. Furthermore, pea protein isolate can replace soy isolate on a weight-for-weight basis without a negative organoleptic impact

Adding plant protein sources to food and beverage applications presents some challenges, however, such as change in flavor profile of the finished product. The number one challenge faced by food and beverage formulators introducing or transitioning their products to include plant-based proteins, such as pea protein, remains balancing the benefits of these natural ingredients with a taste profile that appeals to the mainstream palate. The partnership between GLG and MycoTech overcomes this challenge, providing food, beverage and sport supplement companies the ability to produce natural healthful products without the bitter taste profile and off-notes that are traditionally associated with pea protein.

P-Pro Plus offers not only the many benefits of regular pea protein, but also a taste profile that formulators and consumers alike will appreciate. We expect that this improved taste profile will broaden market appeal, reach new product segments and result in deeper market penetration of pea protein. P-Pro Plus is available in both conventional and organic varieties and in various mesh sizes and protein purity levels and can be tailored to your individual product needs.

Annual General Meeting

The Company held its Annual General Meeting on June 28, 2016, in Vancouver, B.C. The shareholders voted in all nominated directors, with favorable votes for each exceeding 99%. Dr. Luke Zhang continues as Chairman of the Board and Chief Executive Officer and Brian Palmieri continues as Vice Chairman of the Board.

SELECTED FINANCIALS

As noted above, the complete set of financial statements and management discussion and analysis for the three months ended June 30, 2016, are available on SEDAR and on the Company’s website at www.glglifetech.com.

RESULTS FROM OPERATIONS

The following results from operations have been derived from and should be read in conjunction with the Company’s annual consolidated financial statements for 2015 and the condensed interim consolidated financial statements for the six-month period ended June 30, 2016.

Revenue

Revenue for the three months ended June 30, 2016, was $4.3 million compared to $8.0 million in revenue for the same period last year, a decrease of 46%. Although revenues decreased, international stevia sales for the quarter increased by 27%, reflecting increasing demand internationally for GLG’s stevia extracts. And international sales ($4.0 million) as a percentage of total sales (92%) were up by seven percentage points over the same period in 2016 ($6.8 million in international sales, or 85% of sales), a result of both the Company’s continued preference for higher-purity extract sales internationally and a decline in lowerpurity extract sales in China (China stevia sales were down 73% relative to second quarter 2015).

Off-setting the increased international stevia sales, both monk fruit sales and GLG Naturals+ sales decreased for the quarter (91% and 100% decreases, respectively). The decrease in monk fruit sales is largely a reflection of the different temporal distribution in orders in 2016 relative to 2015 attributable to a shift in our monk fruit business model. In 2015, our sole distribution partner placed the bulk of its orders for delivery in the first six months of the year. In 2016, we worked to transition from our prior monk fruit distribution partner to ADM as well as direct sales in the dietary supplement sector. This transition resulted in lower volumes sold initially, but GLG expects the majority of orders for its monk fruit inventories to come in the second half of the year. With respect to GLG Naturals+, the 2015 revenues comprised one customer whose product needs have since shifted.

Revenue for the six months ended June 30, 2016, was $9.9 million, a decrease of 30% compared to $14.2 million in revenue for the same period last year. The 30% decrease in revenue was attributable to a 26% decrease in international sales and a 51% decrease in China domestic sales. While overall international sales decreased by 26%, international stevia sales were up by 47% over the same period in 2015, reflecting increasing demand for GLG’s stevia extracts. The increase in international stevia sales was offset by a 58% decrease in monk fruit sales and a 100% decrease in GLG Natural+ sales relative to the first six months of 2015, for the same reasons as described above for the three-month sales comparison. International sales accounted for 88% of total sales in the first six months of 2016 compared to 83% in the comparable period of 2015.

Cost of Sales

For the quarter ended June 30, 2016, the cost of sales was $4.3 million compared to $7.1 million in cost of sales for the same period last year (a decrease of $2.8 million or 39%). Cost of sales as a percentage of revenues was 100% for the first quarter 2016, compared to 89% for the comparable period (an 11% increase).

Cost of sales as a percentage of revenues for the second quarter, relative to the same period in 2015, improved for both stevia and monk fruit. However, these improvements were offset by two factors – no margin contribution from Naturals+ sales and an increase in idle capacity charges.

For the six month ended June 30, 2016, the cost of sales was $9.8 million compared to $13.0 million for the same period of last year (a decrease of $3.2 million or 25%). Cost of sales as a percentage of revenues was 99% for the first six months 2016, compared to 91% in the comparable period in 2015 (an 8% increase).

Cost of sales as a percentage of revenues for the first six months of the year, relative to the same period in 2015, improved for stevia, while the cost of sales for monk fruit as a percentage of revenues was slightly higher than in the same period for 2015. Idle capacity charges were also higher, but the biggest factor for the increase in cost of sales as a percentage of revenues relative to 2015 was no margin contribution from Naturals+ sales.

Capacity charges charged to the cost of sales ordinarily would flow to inventory and are a significant component of the cost of sales. Only two of GLG’s manufacturing facilities were operating during the first six months of 2016, and capacity charges of $1.5 million were charged to cost of sales (representing 16% of cost of sales) compared to $1.5 million charged to cost of sales in same period of 2015 (representing 11% of cost of sales).

1. Capacity utilization of stevia and monk fruit manufacturing plants.
2. The price paid for stevia leaf and monk fruit and their respective quality, which are impacted by crop quality for a particular year/period and the price per kilogram for which the stevia and monk fruit extracts are sold. These are the most important factors impacting the gross profit of GLG’s stevia and monk fruit business.
3. Other factors which also impact stevia and monk fruit cost of sales to a lesser degree include:
   • water and power consumption;
   • manufacturing overhead used in the production of stevia and monk fruit extract, including supplies, power and water;
   • net VAT paid on export sales;
   • exchange rate changes; and
   • depreciation.

GLG’s stevia and monk fruit businesses are affected by seasonality. The harvest of the stevia leaves typically occurs starting at the end of July and continues through the fall of each year. The monk fruit harvest takes place typically from October to December each year. GLG’s operations in China are also impacted by Chinese New Year celebrations, which occur approximately late-January to mid-February each year, and during which many businesses close down operations for approximately two weeks. GLG’s production year runs October 1 through September 30 each year.

Gross Profit

Gross profit for the three months ended June 30, 2016, was nil, compared to $0.9 million for the comparable period in 2015. The gross profit margin was 0% in the second quarter 2016 and 11% for the same period in 2015.

The decrease in gross profit for the second quarter of 2016, relative to the comparable period in 2015, was attributable to: (1) the absence of gross profit contribution from GLG Naturals+ products in the second quarter of 2016, and (2) increased idle capacity charges in the second quarter of 2016 compared to the same quarter of 2015. The decrease in gross profit was partly offset by an increase in gross profit from international stevia products sales in the second quarter of 2016 compared to same quarter in 2015. Margins on international sales of high purity stevia and monk fruit improved over the comparable period in 2015.

Gross profit for the first six months in 2016 was $0.1 million, compared to $1.2 million for the same period in 2015. The gross profit margin was 1% in the first six months of 2016, compared to 9% in the same period in 2015. The decreased gross profit margin in the first six months of 2016 compared to the same period in 2015 was attributable to: (1) a changing mix of international products, comprising (a) an increase in international stevia sales with higher gross profit margins; (b) a decrease in international monk fruit sales with slightly lower gross profit margins; and (c) the absence of gross profit contribution from Naturals+ sales in 2016; and (2) decreased gross profit contribution from China domestic stevia sales.

Net Loss

For the three months ended June 30, 2016, the Company had a net loss of $4.0 million, an increase of $0.5 million or 14% over the comparable period in 2015 ($3.5 million loss). The $0.5 million increase in net loss was driven by (1) a decrease in gross profit ($0.9 million) and (2) an increase in G&A expenses ($0.2 million), which were offset by (3) a decrease in other expenses ($0.6 million).

For the six months ended June 30, 2016, the Company had a net loss of $8.4 million, an increase of $0.1 million or 1% over the comparable period in 2015 ($8.3 million loss). The $0.1 million increase in net loss was attributable to a decrease in gross profit ($1.1 million) and (2) an increase in G&A expenses ($0.8 million), which were offset by (3) a decrease in other expenses ($1.8 million).

Quarterly Basic and Diluted Loss per Share

The basic loss and diluted loss per share from operations was $0.11 for the three months ended June 30, 2016, compared with a basic and diluted net loss of $0.09 for the same period in 2015.

For the six months ended June 30, 2016, the basic loss and diluted loss per share from operations was $0.22, compared with a basic and diluted net loss from operations of $0.22 for the same period in 2015

The Company continues to progress with the following measures to manage cash flow of the Company: paying down short-term loans, reducing accounts payable, negotiating with creditors for extended payment terms, working closely with the banks to restructure its loans, arranging financing with its Directors and other related parties, and reducing operating expenditures including general and administrative expenses and production-related expenses.

Total loans payable (both short-term and long-term) is $94.3 million as of June 30, 2016, a decrease of $6.0 million compared to the total loans payable as at December 31, 2015 ($100.3 million). The decrease in loans was primarily driven by the depreciation of the USD against the Canadian dollar ($8.0 million), which was offset by accrued interest of $2.0 million as of June 30, 2016.

The Company successfully renewed a RMB 7 million bank loan with the Huishang Bank on July 1, 2016.

The Company recently achieved a major milestone in its debt restructuring efforts. As of July 20th, 2016, four of five of the Company’s 100% owned Chinese Wholly-Owned Foreign Enterprises (“WOFEs”) were consolidated into a single entity (Chuzhou Runhai Stevia High Tech Company Limited or “Runhai”) under Chinese law – and, significantly, Runhai is approved to become a Joint Stock Company (“JSC”). This form of corporation, under Chinese law, provides it considerable opportunities to raise capital. For example, Runhai will now be able to add Chinese investors, raise equity capital in China, and convert China-based debt into equity in the JSC. Post consolidation of the four China subsidiaries, the Company retains its 100% ownership of Runhai and all of the consolidated assets of the previous four China subsidiaries.

The three subsidiaries consolidated into Runhai are:
Anhui Bengbu HN Stevia High Tech Development Company Limited
Qingdao Runhao Stevia High Tech Company Limited
Dongtai Runyang Stevia High Tech Company Limited

GLG’s subsidiary Qingdao Runde Biotechnology Co., Ltd. remains a 100% owned WOFE of GLG.

One of the key outcomes of the conversion of Runhai into a JSC was the underlying agreed valuation of the consolidated Runhai entity. Runhai’s total investment approval by the China Government is USD 120 million and its net assets are valued at USD 42 million. The difference between the asset valuation and net assets value provides Runhai USD 78 million available for debt conversion, additional working capital or equity raises.

One particular benefit of reforming the Company’s Chinese holdings into a JSC is that the limitations previously foreclosing the Company from access to Chinese debt and capital markets are gone. As a JSC, Runhai will be eligible to have its Chinese-held debt converted into equity shares at the subsidiary level, such that a major portion of that debt could be removed from the Company’s balance sheet. GLG, with the PRC government’s support, is in active discussions with Runhai’s Chinese debt-holders to negotiate terms for a debt-equity swap, and is exploring multiple options for access to valuable working capital. The Company expects to retain a majority controlling interest in Runhai after any expected debt conversion into equity in Runhai. Further, Runhai will have the ability to solicit Chinese capital markets and investors for working and other capital, bolstered by a more attractive balance sheet and a strong appetite in China for growth opportunities.

With this foundational milestone completed, GLG’s plan is to restructure its China debt by availing itself of one or more options now open to the Company. GLG is in active discussions with debt-holders and other potential investors/financiers as it evaluates options for debt restructuring and capital generation.

NON-GAAP Financial Measures

Gross Profit Before Capacity Charges
This non-GAAP financial measure shows the gross profit (loss) before the impact of idle capacity charges are reflected on the gross profit margin. GLG had only 50% of its production facilities in operation for the first six months of 2016 and idle capacity charges have a material impact on the gross profit (loss) line in the financial statement

Gross profit before capacity charges for the three months ended June 30, 2016, was $0.9 million or 20% of second quarter revenues compared to $1.4 million or 17% of second quarter revenues in 2015. Gross profit before capacity charges as a percentage of revenues increased from the comparable period due to an increase in margins for both stevia and monk fruit product sales in the second quarter of 2016 compared to the comparable period in 2015.

Gross profit before capacity charges for the six months ended June 30, 2016, was $0.8 million or 17% of six-month revenues compared to $2.7 million or 19% of six-month revenues in 2015. Gross profit before capacity charges as a percentage of revenues decreased by 2 percentage points from the comparable period due to (1) a slight decrease in margins for monk fruit sales, (2) no profit contribution from GLG Naturals+ sales in the first six months of 2016, and (3) the effect of first-quarter 2015 Chinese low-purity stevia sales with increased margins due to materially written-down carrying costs for the underlying inventory arising from one-time impairment charges in 2014; these factors were largely offset by (4)
improved international stevia margins.

Earnings Before Interest Taxes and Depreciation (“EBITDA”) and EBITDA Margin

EBITDA for the three months ended June 30, 2016, was negative $0.1 million or negative 3% of revenues, compared to $0.2 million or 3% of revenues for the same period in 2015. The 6 percentage point decrease in EBITDA is primarily attributable to lower gross profit, an increase in sales, general and administrative expenses and foreign exchange gain and loss.
EBITDA for the six months ended June 30, 2016, was negative $1.6 million or negative 16% of revenues, compared to negative $0.3 million or negative 2% of revenues for the same period in 2015. The decrease in EBITDA for the six months is primarily attributable to lower gross profit, an increase in sales, general and administrative expenses, and foreign exchange gain and loss.

Additional Information

Additional information relating to the Company, including our Annual Information Form, is available on SEDAR (www.sedar.com). Additional information relating to the Company is also available on our website (www.glglifetech.com).

For further information, please contact:
Simon Springett, Investor Relations
Phone: +1 (604) 285-2602 ext. 101
Fax: +1 (604) 285-2606
Email: [email protected]

Forward-looking statements: This press release may contain certain information that may constitute “forward-looking statements” and “forward looking information” (collectively, “forward-looking statements”) within the meaning of applicable securities laws. Often, but not always, forward-looking statements can be identified by the use of words 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 words and phrases that state or indicate that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.

While the Company has based these forward-looking statements on its current expectations about future events, the statements are not guarantees of the Company’s future performance and are subject to risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such factors include amongst others the effects of general economic conditions, consumer demand for our products and new orders from our customers and distributors, changing foreign exchange rates and actions by government authorities, uncertainties associated with legal proceedings and negotiations, industry supply levels, competitive pricing pressures and misjudgments in the course of preparing forward-looking statements. Specific reference is made to the risks set forth under the heading “Risk Factors” in the Company’s Annual Information Form for the financial year ended December 31, 2015. In light of these factors, the forwardlooking events discussed in this press release might not occur.

Further, although the Company has attempted to identify factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.