Mr. William Long reports

EPICORE BIONETWORKS INC. REPORTS FIRST QUARTER RESULTS FOR FISCAL YEAR 2017

Epicore Bionetworks Inc. had first quarter revenue of $2.5-million and net income of $200,000 or 0.9 cent per share for the period ended Sept. 30, 2016. All amounts are in U.S. dollars.

First quarter revenue was 20 per cent higher than last year's first quarter. Net income was the same as last year. Shrimp diseases such as early mortality syndrome (EMS) and a new microsporidian disease called enterocytozoon hepatopenaei (EHP) affected several Southeast Asian (SEA) producing regions. In SEA, low prices, combined with the risk of disease, have resulted in a curtailment in shrimp stocking. Despite this situation, sales resumed to Vietnam and increased in Indonesia and India. Sales were especially strong to newer sales areas like Australia and Singapore and to Africa.

Results versus prior fiscal year first quarter were as follows:

• Revenue increased by 20 per cent to $2.5-million.
• Gross profit increased by 12 per cent to $1.4-million.
• Operating expenses increased by 5 per cent to $900,000.
• Income before taxes increased 23 per cent to $400,000.
• Net income remained at $200,000.
• EBITDA (earnings before interest, taxes, depreciation and amortization) (1) increased 15 per cent to $500,000.
• The company achieved basic earnings per share of 0.9 cent.
• It increased shareholders' equity to $9.7-million.
• Year-over-year cash increased 35 per cent to $3.7-million.
• Year-to-date cash flow from operations was $300,000.

Gross profit increased 12 per cent in first quarter due to the increase in revenues.

Operating expense increased by 5 per cent.

Higher revenues with relatively higher COGS (cost of goods sold) expenses and a modest increase in operational expense combined to produce earnings on par with first quarter earnings prior year. Taxes were $200,000 compared with prior year's $100,000 because of the lack of equipment tax credits. The attached table summarizes the first quarter results (rounded to thousands of U.S. dollars).

                  FIRST QUARTER RESULTS

                             For the quarter ended Sept. 30,
                                    2016               2015

Revenue                           $2,488             $2,079
Gross profit                      $1,389             $1,235
Operating expenses                  $941               $893
Net income                          $230               $231
Earnings per share                $0.009             $0.009
Shareholders' equity              $9,653             $8,407

Epicore continues to generate positive net income from operating activities. In fiscal 2016, working capital increases and investments in plant and equipment decreased cash balances, but by first quarter, the majority of planned capital spending was completed. Cash at the end of the quarter was $3.7-million versus $3.4-million at the end of fiscal 2016. With these funds, expected sales revenue growth and continued relatively low operating costs, management expects there will be sufficient cash to meet the fiscal year's financial requirements, to finance expansion of aquaculture and environmental remediation marketing efforts, and to pursue new strategies for enhancing shareholder value.

Over the last two years, Epicore has invested materially in a second building and automated packaging equipment. This added space is critical to the company's ability to increase production levels. All automated packaging equipment was in place and operational in first quarter. The board has approved a continuing capital program to enhance efficiencies and ensure redundancies in critical applications of its operations.

The financial statements of the company have been prepared in accordance with international financial reporting standards.

(1) EBITDA is a non-generally accepted accounting principle financial measure. For the company, it is defined as earnings before interest, taxes, depreciation and amortization. Management believes that EBITDA is a better indicator of operational performance than net income because it ignores interest, taxes, depreciation and amortization.

We seek Safe Harbor.