Mr. Jeffrey Hasham reports

REDISHRED CAPITAL CORP. ("REDISHRED") ANNOUNCES Q2-2016 RESULTS

Redishred Capital Corp. has released its second quarter 2016 results.

Second quarter highlights:

• Total system sales(1) in the Proshred system were a record $7.6-million (U.S.) in the second quarter of 2016, growing 19 per cent over the comparative period in 2015:
  • Scheduled (recurring) system sales for the second quarter reached a record of $3.6-million (U.S.), growing 19 per cent over the second quarter of 2015;
  • Unscheduled system sales for the second quarter reached a record of $2.8-million (U.S.), growing 26 per cent over the second quarter of 2015;
  • Recycling system sales for the second quarter were $1.2-million (U.S.), growing 4 per cent over the second quarter of 2015;
• The Proshred system shred and recycled a record of 10,850 tons of paper during the second quarter of 2016, an increase of 12 per cent over the second quarter of 2015;
• Total operating income for the second quarter of $614,000 was 26 per cent higher than the second quarter of 2015, as a result of increased royalty revenue, franchise fee awards and consistent corporate store performance;
• Franchise and licence revenue for the second quarter of 2016 was $632,000, growing 66 per cent over the second quarter of 2015. This category of revenue is generated by franchisees and licensees of the Proshred system, originally denominated in U.S. dollars;
• Redishred awarded three new franchise locations in the second quarter of 2016; St. Louis, Mo., and Orlando, Fla., commenced operations in the third quarter of 2016, and Jacksonville, Fla., is scheduled to commence operations in late 2016.

Note:

1. System sales are revenues generated from franchisees, licensees and corporate-owned locations. Redishred derives its royalty and service fee revenues based on a percentage of system sales from franchisees and licensees. Redishred derives revenues from corporate location system sales.

Management's comments on the second quarter of 2016

Jeffrey Hasham, the company's chief executive officer, had the following comments: "Proshred continues to see record system sales results. This is proof positive that our unwavering focus for on-site information destruction has resonated with our clients. It is our view that the on-site solution for destroying paper, hard drives and products is the most secure method of destruction. Proshred's mandate is to continue to provide peace of mind for our clients that their information will be shred on site, immediately reducing the risk of information breach." Mr. Hasham further noted: "It is exciting to see our footprint cross over the 30-location mark in the United States, with the addition of St. Louis, Orlando and Jacksonville. We will be deploying the finest on-site shredding equipment to those markets, allowing us to offer the full breadth of on-site destruction services. The company's plan is to continue to invest in new trucks and human resources to further drive results in 2016 and beyond. I would like to thank our franchisees, employees and vendor partners for their tireless efforts and our shareholders for their continued support of our company."

                                              FINANCIAL HIGHLIGHTS

                                                Three months ended June 30,           Six months ended June 30,
                                                     2016             2015              2016              2015

System sales (in U.S. dollars)               $  7,579,784     $  6,391,020      $ 14,445,903      $ 12,140,266
Total revenue                                   2,475,518        1,824,583         4,823,670         3,597,534
Corporate location financial results
Corporate location revenue                      1,842,693        1,443,384         3,734,717         2,817,445
Corporate location operating costs             (1,154,551)        (764,529)       (2,350,061)       (1,563,056)
Corporate location EBITDA                         688,142          678,855         1,384,656         1,254,389
Depreciation -- tangible assets                  (138,883)        (119,418)         (283,040)         (240,196)
Operating income from  corporate
locations                                         549,259          559,437         1,101,616         1,014,193
Franchise and licence sales
Franchise and licence fees                        175,006            2,210           177,642            29,109
Royalties and service fees                        457,819          378,989           911,311           750,980
Franchise-related revenue                         632,825          381,199         1,088,953           780,089
Operating income                                  614,473          486,889         1,086,920           935,256
Net income                                        188,267           35,710           115,685           641,550
Income per share                                     0.01             0.00              0.00              0.02

System sales

Redishred's management team continued to focus its efforts through its franchisees and its corporate locations on: (i) building recurring service revenues; (ii) maximizing route density and logistical efficiencies; and (iii) implementing dedicated hard drive destruction trucks/equipment throughout the system. The strong service system sales results are driven by Redishred's sales and marketing programs, which are aimed at educating clients on the legislative requirements to destroy confidential information using a secure on-site solution. Additionally, an increasing number of clients are requiring their facilities to recycle all paper documents by using on-site shredding services. Clients are assured that documents are securely destroyed and the materials are recycled. Proshred also offers hard drive destruction services in almost all of its locations, and has been deploying high-speed on-site hard drive destruction trucks. Currently, 13 franchised locations have deployed high-speed on-site hard drive destruction trucks. These factors led to 22-per-cent growth in scheduled and unscheduled system sales in the second quarter of 2016 over the same quarter in 2015.

Recycling system sales increased by 4 per cent during the three months ended June 30, 2016, in comparison with the same period in 2015. During the three months ended June 30, 2016, the Proshred system shred and recycled 10,850 tons of paper, equating to approximately 163,000 trees saved.

Corporate operations

During the six months ended June 30, 2016, Redishred directly operated six shredding locations in Syracuse, N.Y., Albany, N.Y., Milwaukee, Wis., New York, N.Y., Charlotte, N.C., and Miami, Fla.

During the three months ended June 30, 2016, the corporate location revenue grew by 28 per cent over the same comparative prior-year period. EBITDA (earnings before interest, taxes, depreciation and amortization) and operating income were flat compared with 2015. Operating costs have increased at a higher rate than sales growth as the company has, in 2016, invested in its local human resource retention program in order to attract and retain strong local managers and client-facing team members with a view to ensuring sustainable profitability and cash flow going forward. The company also invested increased funds into: (i) on-line marketing activities to attract new clients; and (ii) truck repairs and maintenance to ensure optimal truck uptime to service clients. Both of these activities should yield enhanced cash flows in the last half of 2016.

Community and social commitment

The company's locations under the Proshred banner conducted numerous community shredding events in the first half of 2016. These events provide an opportunity for clients, clients' employees, local businesses and local residents to ensure that their personal and confidential materials are securely destroyed. In addition to helping to reduce identity theft, several of these events allow for donations to various not-for-profit organizations. Proshred is also proud that 100 per cent of the shredded material is recycled, as the company's continued goal is to foster the use of fewer trees in the production of all paper products. Future community shredding event locations can be found on the Proshred website.

On June 4, 2016, Proshred held its third annual Shred Cancer event at most of its locations, raising money for the American Institute for Cancer Research (AICR). It is the company's goal to support the AICR in its endeavour to conduct research to prevent and possibly cure this disease. Mr. Hasham commented: "All of us at Proshred are committed to working with AICR on their goal to reduce the instances of cancer by preventing it. The research they do is crucial in the battle against this disease. I want to thank every Proshred owner and all our collective employees for the time and effort put forth to these events." Please visit the Proshred website for more information on this effort.

Financial statements

Redishred's June 30, 2016, financial statements, notes, and management's discussion and analysis will be available on SEDAR and on the company's website.

We seek Safe Harbor.