8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): September 15, 2015

SUNOPTA INC.

(Exact name of registrant as specified in its charter)

Canada	001-34198	Not Applicable
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2838 Bovaird Drive West

Brampton, Ontario, L7A 0H2, Canada

(Address of Principal Executive Offices)

(905) 455-1990

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 8.01. OTHER EVENTS.

As previously announced in the Current Report on Form 8-K filed by SunOpta Inc. (“SunOpta”) with the Securities and Exchange Commission on July 31, 2015, SunOpta entered into a Purchase and Sale Agreement (the “PSA”), dated as of July 30, 2015, with the selling shareholders named therein and Shine Seller Rep, LLC. Pursuant to the PSA, SunOpta agreed to acquire all of the issued and outstanding common shares of Sunrise Holdings (Delaware), Inc. (“Sunrise”). In connection with the pending acquisition and the related financing, the following financial statements are attached as Exhibits 99.1, 99.2 and 99.3, respectively, and are incorporated herein by reference:

• unaudited condensed consolidated balance sheets of Sunrise as of June 30, 2015 and December 31, 2014 and the related unaudited condensed consolidated statements of operations and comprehensive income for the three months ended June 30, 2015 and June 30, 2014 and condensed consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for the six months ended June 30, 2015 and June 30, 2014, together with the notes thereto;

• audited consolidated balance sheets of Sunrise as of December 31, 2014 and December 31, 2013, and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for the year ended December 31, 2014 and for the period from March 19, 2013 to December 31, 2013, together with the notes thereto and the report thereon of Deloitte & Touche LLP, Sunrise’s independent registered public accounting firm, dated September 3, 2015; and

• audited consolidated balance sheet of SGF Produce Holdings, LLC, Sunrise’s predecessor in interest, as of March 18, 2013 and December 31, 2012, and the related consolidated statements of operations, member’s deficit and cash flows for the period from January 1, 2013 to March 18, 2013 and for the year ended December 31, 2012, together with the notes thereto and the report thereon of Grant Thornton LLP, SGF Produce Holdings, LLC’s independent certified public accountants, dated September 11, 2015.

In addition, the following preliminary unaudited pro forma condensed combined financial information of SunOpta is attached as Exhibit 99.4 and incorporated herein by reference:

• unaudited pro forma condensed combined statement of operations for the year ended January 3, 2015;

• unaudited pro forma condensed combined statement of operations for the two quarters ended July 4, 2015;

• unaudited pro forma condensed combined statement of operations for the two quarters ended July 5, 2014; and

• unaudited pro forma condensed combined balance sheet as of July 4, 2015.

The unaudited pro forma condensed combined financial information gives effect to certain events related to the pending acquisition of Sunrise and has been presented for informational purposes only. It does not purport to be the future financial position or operating results of SunOpta.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

The list of exhibits in the exhibit index hereto is incorporated herein by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SUNOPTA INC.
By	/s/ Robert McKeracher
	Robert McKeracher
	Vice President and Chief Financial Officer
Date	September 15, 2015

EXHIBIT INDEX

Exhibit No.	Description
23.1	Consent of Deloitte & Touche LLP
23.2	Consent of Grant Thornton LLP
99.1	Unaudited condensed consolidated financial statements of Sunrise as of June 30, 2015 and December 31, 2014 and for the three and six months ended June 30, 2015 and 2014, together with the notes thereto
99.2	Audited consolidated financial statements as of December 31, 2014 and 2013 and for the year ended December 31, 2014 and for the period from March 19, 2013 to December 31, 2013, together with the notes thereto and the independent accountant’s report thereon
99.3	Audited consolidated financial statements for the period from January 1, 2013 through March 18, 2013 and for the year ended December 31, 2012, together with the notes thereto and the independent accountant’s report thereon
99.4	Unaudited pro forma condensed combined financial information, together with the notes thereto

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in SunOpta, Inc’s Registration Statement Nos. 333-197235 and 333-180647 on Form S-3 and Registration Statement Nos. 333-191777, 333-161662, 333-144827, 333-124911, and 333-176675 on Form S-8 of our report dated September 3, 2015 relating to the financial statements of Sunrise Holdings (Delaware), Inc. as of December 31, 2014 and December 31, 2013, and for the year ended December 31, 2014 and the period from March 19, 2013 to December 31, 2013 appearing in the Form 8-K filed by SunOpta, Inc. on September 15, 2015.

/s/ Deloitte & Touche LLP

Costa Mesa, California

September 14, 2015

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our report dated September 11, 2015 with respect to the consolidated financial statements of SGF Produce Holdings, LLC included in Exhibit 99.3 to this Current Report on Form 8-K for the period from January 1, 2013 to March 18, 2013 and for the year ended December 31, 2012. We consent to the incorporation of said report in the Registration Statements of SunOpta, Inc. on (i) Forms S-8 (File No. 333-19177, File No. 333-161662, File No. 333-144827, File No. 333-124911, and File No. 333-176675) and (ii) Forms S-3 (File No. 333-197235 and File No. 333-180647).

/s/ GRANT THORNTON LLP

Irvine, CA

September 14, 2015

EX-99.1

Exhibit 99.1

Sunrise Holdings

(Delaware), Inc. and

Subsidiaries

Condensed Consolidated Financial Statements as of June 30,

2015 and December 31, 2014 and the three and six

months ended June 30, 2015 and 2014.

SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES

TABLE OF CONTENTS

	Page
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Balance Sheets		1
Condensed Consolidated Statements of Operations Three months ended June 30, 2015 and June 30, 2014		2
Condensed Consolidated Statements of Comprehensive Income Three months ended June 30, 2015 and June 30, 2014		3
Condensed Consolidated Statements of Operations Six months ended June 30, 2015 and June 30, 2014		4
Condensed Consolidated Statements of Comprehensive Income Six months ended June 30, 2015 and June 30, 2014		5
Condensed Consolidated Statements of Stockholders’ Equity		6
Condensed Consolidated Statements of Cash Flows		7
Notes to Condensed Consolidated Financial Statements		8–24

SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	June 30			December 31
	2015			2014
ASSETS
CURRENT ASSETS:
Cash	$	289,000		$	92,000
Accounts receivable — net		30,369,000			20,700,000
Grower loans		624,000			3,052,000
Inventories - net		126,868,000			74,955,000
Deferred income taxes		2,868,000			1,764,000
Loan origination cost - net		1,070,000			1,070,000
Prepaid expenses and other current assets		1,918,000			1,895,000
Total current assets		164,006,000			103,528,000
PLANT AND EQUIPMENT — Net		42,872,000			36,768,000
LOAN ORIGINATION COSTS - Net		2,679,000			3,214,000
INTANGIBLE ASSET - Net		43,029,000			45,986,000
GOODWILL		50,907,000			51,124,000
OTHER LONG-TERM ASSETS		100,000			44,000
TOTAL	$	303,593,000		$	240,664,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	47,080,000		$	13,330,000
Accrued compensation and benefits		3,178,000			2,900,000
Accrued expenses		6,508,000			6,163,000
Current portion of long-term debt		1,634,000			1,859,000
Current portion of capital lease obligations		475,000			456,000
Total current liabilities		58,875,000			24,708,000
DEFERRED TAX LIABILITY		25,214,000			24,327,000
LINE OF CREDIT		31,333,000			17,875,000
LONG-TERM DEBT — Less current portion		131,770,000			122,669,000
CAPITAL LEASE OBLIGATIONS — Less current portion		4,665,000			721,000
COMMITMENTS AND CONTINGENCIES (Note 11)
STOCKHOLDERS’ EQUITY:
Common stock, $.01 par value, authorized 1,000,000 shares, 780,362 shares issued and outstanding at June 30, 2015 and December 31, 2014		8,000			8,000
Additional paid-in capital		44,208,000			43,816,000
Retained earnings		6,010,000			4,814,000
Accumulated other comprehensive (loss)		(676,000	)		(337,000	)
Total Sunrise Holdings (Delaware), Inc. stockholders’ equity		49,550,000			48,301,000
Non-Controlling Interest		2,186,000			2,063,000
Total stockholders’ equity		51,736,000			50,364,000
TOTAL	$	303,593,000		$	240,664,000

See notes to condensed consolidated financial statements.

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SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED (UNAUDITED)

	June 30,		June 30,
	2015		2014
REVENUES:
Product, net	$	73,493,000	$	62,429,000
Service, net		716,000		703,000
Rental		706,000		851,000
Financing		24,000		8,000
Total revenues, net		74,939,000		63,991,000
COST OF REVENUES		64,749,000		52,498,000
GROSS PROFIT		10,190,000		11,493,000
OPERATING EXPENSES:
Selling		936,000		963,000
General and administrative		5,514,000		5,358,000
Transaction and transition costs (Note 6)		202,000		1,000
Total operating expenses		6,652,000		6,322,000
INCOME FROM OPERATIONS		3,538,000		5,171,000
OTHER EXPENSE/(INCOME) - Net		72,000		(401,000	)
INTEREST EXPENSE — Net		2,782,000		2,245,000
INCOME BEFORE INCOME TAX EXPENSE		684,000		3,327,000
INCOME TAX EXPENSE		242,000		1,130,000
NET INCOME	$	442,000	$	2,197,000
NET LOSS ATTRIBUTED TO NON-CONTROLLING INTEREST		38,000
NET INCOME ATTRIBUTED TO SUNRISE HOLDINGS (DELAWARE), INC.	$	480,000	$	2,197,000

See notes to the condensed consolidated financial statements.

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SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED (UNAUDITED)

	June 30,			June 30,
	2015			2014
Net income	$	442,000		$	2,197,000
Other comprehensive loss:
Foreign currency translation		(157,000	)		—
Comprehensive income	$	285,000		$	2,197,000

See notes to the condensed consolidated financial statements.

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SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE SIX MONTHS ENDED (UNAUDITED)

	June 30,			June 30,
	2015			2014
REVENUES:
Product, net	$	139,297,000		$	123,719,000
Service, net		4,553,000			1,740,000
Rental		1,427,000			1,637,000
Financing		66,000			19,000
Total revenues, net		145,343,000			127,115,000
COST OF REVENUES		125,419,000			104,985,000
GROSS PROFIT		19,924,000			22,130,000
OPERATING EXPENSES:
Selling		1,850,000			1,862,000
General and administrative		10,198,000			11,236,000
Transaction and transition costs (Note 6)		215,000			658,000
Total operating expenses		12,263,000			13,756,000
INCOME FROM OPERATIONS		7,661,000			8,374,000
OTHER EXPENSE/(INCOME) - Net		373,000			(4,602,000	)
INTEREST EXPENSE — Net		5,068,000			3,915,000
INCOME BEFORE INCOME TAX EXPENSE		2,220,000			9,061,000
INCOME TAX EXPENSE		786,000			3,078,000
NET INCOME	$	1,434,000		$	5,983,000
NET GAIN ATTRIBUTED TO NON-CONTROLLING INTEREST		(238,000	)
NET INCOME ATTRIBUTED TO SUNRISE HOLDINGS (DELAWARE), INC.	$	1,196,000		$	5,983,000

See notes to the condensed consolidated financial statements.

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SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED (UNAUDITED)

	June 30,			June 30,
	2015			2014
Net income	$	1,434,000		$	5,983,000
Other comprehensive loss:
Foreign currency translation		(339,000	)		—
Comprehensive income	$	1,095,000		$	5,983,000

See notes to the condensed consolidated financial statements.

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SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2015 AND 2014 (UNAUDITED)

					Additional Paid-In Capital			Accumulated Deficit/ Retained Earnings			Accumulated Other Comprehensive Loss			Non- Controlling Interest
	Common Stock																Total
	Shares		Amount
BALANCE — December 31, 2013		780,362	$	8,000	$	83,124,000		$	(4,846,000	)	$	—		$	—		$	78,286,000
Dividend paid						(40,000,000	)											(40,000,000	)
Stock-based compensation expense						342,000												342,000
Net income									5,983,000									5,983,000
BALANCE — June 30, 2014		780,362	$	8,000	$	43,466,000		$	1,137,000		$	—		$	—		$	44,611,000
BALANCE — December 31, 2014		780,362	$	8,000	$	43,816,000		$	4,814,000		$	(337,000	)	$	2,063,000		$	50,364,000
Stock-based compensation expense						392,000												392,000
Net income									1,196,000						238,000			1,434,000
Other comprehensive (loss)												(339,000	)		(115,000	)		(454,000	)
BALANCE — June 30, 2015		780,362	$	8,000	$	44,208,000		$	6,010,000		$	(676,000	)	$	2,186,000		$	51,736,000

See notes to condensed consolidated financial statements.

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SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED (UNAUDITED)

	June 30, 2015			June 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	1,434,000		$	5,983,000
Adjustments to reconcile net income to net cash (used in)/provided by operating activities:
Depreciation		1,969,000			1,811,000
Amortization of loan origination costs		535,000			533,000
Amortization of fair value of inventory (Note 4)					385,000
Amortization of intangibles		2,958,000			3,087,000
Stock-based compensation expense		392,000			342,000
Gain on acquisition					(1,208,000	)
Provision for doubtful accounts & grower loan losses					(44,000	)
Deferred income tax		(182,000	)
Gain on the sale of capital assets		2,000			4,000
Foreign exchange loss
Changes in operating assets and liabilities:
Accounts receivable		(8,099,000	)		(4,466,000	)
Grower loans		2,429,000			1,388,000
Income tax receivable		(1,627,000	)		(635,000	)
Inventories		(51,953,000	)		(11,848,000	)
Prepaid expenses and other current assets		(98,000	)		(367,000	)
Other assets		(61,000	)		(131,000	)
Accounts payable		34,134,000			14,996,000
Accrued expenses and accrued compensation and benefits		663,000			(5,177,000	)
Net cash (used in)/provided by operating activities		(17,504,000	)		4,653,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of plant and equipment					3,000
Cash paid for acquisitions					(10,848,000	)
Additions to plant and equipment		(8,556,000	)		(3,243,000	)
Net cash used in investing activities		(8,556,000	)		(14,088,000	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment on senior revolver credit facility		(36,817,000	)		(5,000,000	)
Borrowing on senior revolving credit facility		50,275,000			5,000,000
Principal payment on long-term debt and capital lease obligations		(1,359,000	)		(2,288,000	)
Proceeds from issuance of debt		10,000,000			45,565,000
Proceeds from capital lease		3,889,000
Distribution to shareholders					(40,000,000	)
Loan origination costs					(1,979,000	)
Net cash provided by financing activities		25,988,000			1,298,000
Effect of exchange rate changes on cash		269,000
NET INCREASE/(DECREASE) IN CASH		197,000			(8,137,000	)
CASH — Beginning of period		92,000			10,553,000
CASH — End of period	$	289,000		$	2,416,000
SUPPLEMENTAL CASH FLOW INFORMATION — Cash paid during the period for:
Interest	$	4,966,000		$	3,399,000
Income taxes	$	2,656,000		$	6,370,000

See notes to condensed consolidated financial statements.

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SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2015 AND 2014 AND THE THREE AND SIX

MONTHS ENDED JUNE 30, 2015 AND 2014

1. ORGANIZATION AND BASIS OF PRESENTATION

Description of Business — Sunrise Holdings (Delaware), Inc. (the “Company”), a Delaware corporation, is the holding company of Sunrise Growers, Inc. and its subsidiaries. The equity of the Company consists of 1,000,000 authorized shares and 780,362 outstanding shares of common stock as of June 30, 2015. The shares of common stock have voting rights of one vote per share.

The Company and its subsidiaries are principally involved in the processing and selling of frozen strawberries, as well as other fruits, from its facilities in California, Kansas and Mexico, to retail, food service, and industrial customers. The Company is subject to USDA regulations and most of its revenues are derived from customers located in the United States.

Sunrise Holdings (Delaware), Inc. and majority owned subsidiaries include Sunrise Growers, Inc., Farm Capital, Inc. (FCI), Pacific Ridge Farms, LLC (PRF), Sunrise Growers Mexico, S. DE R.L. de C.V. and Opus Foods, Mexico S.A. de C.V. (Opus). FCI is a licensed chartered lending institution. FCI originates secured and unsecured loans to third-party growers in California, earning interest income on the borrowings.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation — The consolidated financial statements include the accounts of Sunrise Holdings (Delaware), Inc. and each of its wholly owned and majority owned subsidiaries including Sunrise Growers, Inc., Farm Capital, Inc. (FCI), Pacific Ridge Farms, LLC (PRF), Sunrise Growers Mexico, S. DE R.L. de C.V. and Opus Foods, Mexico S.A. de C.V. (Opus). All intercompany transactions and balances have been eliminated in consolidation.

Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and following the requirements of the Securities and Exchange Commission (“SEC”), for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for a fair statement of the Company’s financial information. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been omitted under the rules and regulations of the SEC.

The Company has evaluated subsequent events through September 5, 2015, the date these consolidated financial statements were available to be issued.

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Cash — The Company maintains its cash accounts with banks located in the United States of America and Mexico. Cash balances In the United States are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per bank. The Company did not have cash balances at June 30, 2015, that exceeded the balance insured by the FDIC.

Allowance for Doubtful Accounts — Management provides a reserve for uncollectible accounts receivable balances based on known customer exposures, historical credit experience, and any known specific issues or disputes, which exist as of the balance sheet date. Fully reserved balances are written-off against the reserve once collection is determined to be remote.

Grower Loans — Loans to growers are collateralized by the contracted crops in the field and are repaid from proceeds of harvested crops. As of June 30, 2015, the Company has only one loan outstanding to a long-time grower and provider of freezer strawberries. The Company charges interest on the loans at a varying rate based on the Company’s borrowing rate and relationship with the grower. The average interest rate charged on the loan outstanding was 5.75%. Interest income on loans to growers is classified as financing revenue in the accompanying consolidated statements of operations.

Inventories — Inventories consist principally of processed frozen strawberries and other fruits. The Company values inventories at the lower of cost or market. Cost is determined using the first-in, first-out method and includes raw fruit, packaging, labor, and overhead costs.

Concentrations — Sales to the Company’s recurring customers are generally made on open account terms. As of June 30, 2015 and December 31, 2014, two customers accounted for 23% and 14%, and 25% and 19% of accounts receivable, respectively. During the six months ended June 30, 2015 and 2014, two customers represented 26% and 20%, and 25% and 20% of total revenues, respectively. For the three month period June 30, 2015 and 2014, two customers represented 26% and 19% and 25% and 19% of total revenues, respectively. Management performs ongoing credit evaluations of its customers and generally does not require collateral on its accounts receivable.

Plant and Equipment — Plant and equipment are recorded at cost. Depreciation is provided for using the straight-line method over the estimated useful lives of the assets as follows:

Buildings	40 years
Machinery and equipment	5–7 years
Office furniture and equipment	3–5 years
Vehicles	3–7 years
Software	3 years

Leasehold improvements are depreciated over the shorter of the useful life of the improvements or the term of the related lease. Maintenance and repairs are charged to operating expense as incurred.

Long-Lived Assets — Management reviews the carrying value of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the carrying amount of the long-lived assets (asset group) is not recoverable and exceeds its estimated fair value. The carrying amount of the long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). Management determined there was no impairment as of June 30, 2015 and 2014.

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Goodwill and Intangible Assets — Intangible assets consist of tradenames, customer relationships, and noncompetition agreements. Intangible assets with definite lives are amortized over their respective estimated useful lives using the straight-line method. The period of amortization is 2 to 10 years (see Note 6).

Intangible assets with indefinite lives are not amortized, but instead are measured for impairment at least annually or when events indicate that impairment exists. The Company calculates impairment as the excess of the carrying value of indefinite-lived intangible assets over their estimated fair value. If the carrying value exceeds the estimate of fair value, a write-down is recorded. The company concluded that there was no impairment to intangible assets at June 30, 2015 and 2014.

Goodwill represents the excess of purchase price over fair value of assets acquired and liabilities assumed in a business combination. The Company does not amortize its goodwill. The Company performs its impairment test annually at its fiscal year-end or more frequently if impairment indicators arise. Such review entails comparing the carrying value to the fair value. If the aggregate carrying value of goodwill exceeds the fair value, the goodwill is impaired to the extent of the difference between the fair value and the aggregate carrying value. No impairment was recorded during the six months ended June, 30, 2015 and 2014.

Loan Origination Costs — Loan origination costs reflect the balance of loan origination fees and certain direct loan origination costs that are deferred and recognized over the life of the related note. The net fees and costs are amortized into interest expense in the accompanying consolidated statements of operations using the effective interest method

Fair Value of Financial Instruments — Management determines fair value using an “exit price” to value an asset or liability, which is the price at which an asset could be sold or a liability could be transferred in an orderly process that is not a forced liquidation or distressed sale at the measurement date. The Company applies a hierarchy of information that prioritizes market inputs used in measuring fair value, as follows:

Level 1 —	Quoted prices in active markets for identical assets or liabilities
Level 2 —	Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly for substantially the full term of the financial instrument
Level 3 —	Unobservable inputs for the asset or liability

The Company uses interest rate swaps to manage the mix of its debt between fixed and variable rate instruments. As of June 30, 2015, the Company had three interest rate swaps with notional amounts of $32,340,000, $20,000,000 and $7,000,000. The same swaps were in place as of December 31, 2014, the notional amounts were $32,587,000, $20,000,000 and $7,000,000. Interest rate swaps were not designated as accounting hedges and expire on May 3, 2016, March 31, 2017 and September 4, 2015, respectively. Changes in the fair value of the swap agreements are recognized in interest expense.

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The following table presents assets and liabilities recorded at fair value on the consolidated balance sheet on a recurring basis.

Fair Values of Derivative Instruments

			As of			As of
	Level 2		June 30, 2015			December 31, 2014
Interest rate swap		Fair Value	$	(115,000	)	$	(20,000	)

Effect of Non-designated Derivative Instruments on Net Loss

	Location of (Gain) or Loss	Six Months Ended		Six Months Ended
	Recognized in Net Loss	June 30, 2015		June 30, 2014
Net periodic cash settlements and accrued interest	Interest expense	$	228,000	$	199,000

At June 30, 2015, management believes that the carrying amount of cash, accounts receivable, grower loans, accounts payable, and accrued expenses approximate fair value due to the short maturity of these financial instruments. Management believes that the carrying amount of debt approximates the fair value and has been calculated based on the borrowing rates available as of June 30, 2015, for debt with similar terms and maturities.

Noncontrolling Interest —On December 3, 2014, the Company acquired a 75% interest in Opus Foods, Mexico S.A. de C.V (“Opus”). Noncontrolling interest at June 30, 2015 and December 31, 2014 is related to the membership interest the Company does not own in Opus.

Stock-Based Compensation — The Company accounts for stock-based compensation based on the fair value of the award on the grant date. Compensation expense is recognized on a straight-line basis over the requisite service period and is adjusted for estimated forfeitures. The requisite service period is the vesting period for stock options.

Revenue Recognition — Sales of frozen fruit are recognized as revenue upon passing of title and risk when a third-party shipper is used, persuasive evidence of an arrangement exists, collectability is reasonably assured, and upon acceptance of delivery by the customer if the Company uses their own trucks. The Company’s product sales consists primarily of frozen product that is packaged and processed in processing plants and sold to customers. The Company records all product sales at the gross sales amount.

Service revenues are derived from blast freezing, cooling and cold storage for third parties. Service revenue is recorded when services are performed.

Promotional Allowances — The Company records the consideration paid to resellers as a reduction of the selling prices of the Company’s products and services. The Company has classified $813,000 and $594,000 as a reduction of revenue for the three month period ended June 30, 2015 and 2014, respectively and $1,576,000 and $1,230,000 for the six month period ended June 30, 2015 and 2014, respectively.

Cost of Revenue — Cost of revenue reflects the inventory cost of the product sold and is recorded simultaneously when revenue of the product is recognized. Product costs include fruit costs, ingredients, packaging, wages to process the fruit, rents and utilities, supplies and depreciation. Cost of revenue also includes cold storage and handling costs.

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Shipping and Handling — The Company records shipping costs in cost of revenues in the accompanying consolidated statements of operations.

Other Expense (Income) — Other expense (income) for the period ended includes:

	Three months ended
	June 2015		June 2014
Insurance claims	$	—	$	(405,000	)
Other		72,000		4,000
	$	72,000	$	(401,000	)
	Six months ended
	June 2015		June 2014
Insurance claims	$	—	$	(3,397,000	)
Gain on acquisition		—		(1,208,000	)
Other		373,000		3,000
	$	373,000	$	(4,602,000	)

In 2013, the Company identified that an employee had been misappropriating cash. In 2014, the Company received insurance recoveries related to the losses sustained.

In June 2014, as a result of the acquisition of Pacific Ridge Farms, LLC, the Company recorded a $1,208,000 gain on acquisition (Note 6).

Income Taxes — Income taxes are recorded using the liability method whereby deferred tax assets and liabilities are recognized to reflect the future tax consequences of events that have been recognized in the Company’s consolidated financial statements or tax returns. Measurement of the deferred tax items is based on enacted tax laws. In the event the future consequences of differences between financial reporting basis and tax basis of the Company’s assets and liabilities result in a deferred tax asset, management evaluates the probability of realizing the future benefits indicated by such asset. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Additionally, the Company accrues for uncertain tax positions. An uncertain tax position is recognized when it is probable that a liability has been incurred as of the date of the consolidated financial statements and the amount of the loss can be reasonably estimated. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount recorded.

Use of Estimates — The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets

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and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Accounts that reflect significant estimates as of June 30, 2015, include the allowance for doubtful accounts, reserve for excess and obsolete inventories, and accrued expenses. Actual results could differ from those estimates.

Recent Accounting Pronouncements — In July 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). This ASU states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except in certain situations. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Early adoption and retrospective application are permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Based on the Company’s evaluation, this ASU did not have a material impact on its consolidated financial statements.

On April 10, 2014, the FASB issued ASU 2014-08, which amends the definition of a discontinued operation and requires entities to provide additional disclosures about discontinued operations as well as disposal transactions that do not meet the discontinued-operations criteria. This ASU will make it more difficult for a disposal transaction to qualify as a discontinued operation. The ASU also expands the scope of ASC 205-20 to disposals of equity method investments and businesses that, upon initial acquisition, qualify as held for sale. In addition, the ASU requires entities to reclassify assets and liabilities of a discontinued operation for all comparative periods presented in the statement of financial position. The ASU is effective prospectively for all disposals (except disposals classified as held for sale before the adoption date) or components initially classified as held for sale in periods beginning on or after December 15, 2014. The Company does not expect the adoption of this ASU will have a material impact on the consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: (Topic 606). This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. In addition, the existing requirements for the recognition of gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles—Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in this ASU, as amended by ASU 2015-14, are effective for annual reporting periods beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 31, 2019. Early adoption is permitted as of an annual period beginning after December 15, 2017. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12, “Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” This ASU requires that a performance target that affects vesting and that could be achieved after the requisite service period, be treated as a performance condition. The performance target should not be reflected in estimating the grant date fair value of the

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award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures, and provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. Until the issuance of this ASU, US GAAP lacked guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or to provide related footnote disclosures. The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company does not expect that the adoption of this amendment will have a material impact on its consolidated financial statements and disclosures.

ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”), was issued in April 2015. ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in an entity’s balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, instead of being presented as a deferred charge in the balance sheet. Significantly, the recognition and measurement guidance for debt issuance costs are not affected by ASU 2015-03. An entity is required to adopt ASU 2015-03 for reporting periods beginning on or after December 15, 2015. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

On July 22, 2015, the FASB issued ASU 2015-11, which requires entities to measure most inventory at the lower of cost and net realizable value, thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market (market in this context is defined as one of three different measures, one of which is net realizable value). The ASU is effective prospectively for annual periods beginning after December 15, 2016, and interim periods thereafter. The Company does not expect the adoption of this ASU will have a material impact on the consolidated financial statements.

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3. ACCOUNTS RECEIVABLE

Accounts receivable, net, consists of the following:

	June 30, 2015			December 31, 2014
Trade	$	26,174,000		$	18,645,000
Other unsecured receivable - non interest bearing		1,831,000			1,318,000
Income tax receivable		2,484,000			857,000
		30,489,000			20,820,000
Less allowance for doubtful accounts		(120,000	)		(120,000	)
	$	30,369,000		$	20,700,000

4. INVENTORIES

Inventories consist of the following:

	June 30, 2015		December 31, 2014
Processed frozen fruit	$	122,108,000	$	71,122,000
Packaging supplies and raw ingredients		4,760,000		3,833,000
	$	126,868,000	$	74,955,000

Inventory is recorded at cost as of June 30, 2015 and December 31, 2014. During the three and six months ended June 30, 2014, the Company recognized $87,000 and $385,000 in cost of revenues as a result of the amortization of the inventory fair value adjustment related to the acquisition of Pacific Ridge Farms. (Note 6). There was zero amortization for three and six months ended June 30, 2015 because the fair value adjustment was fully amortized.

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5. PLANT AND EQUIPMENT

Plant and equipment, net, consist of the following:

	June 30, 2015			December 31, 2014
Machinery and equipment	$	21,254,000		$	20,576,000
Office furniture and equipment		1,165,000			779,000
Land & land improvements		6,385,000			6,059,000
Building		6,267,000			6,393,000
Leasehold improvements		1,674,000			1,674,000
Vehicles		901,000			771,000
Software		317,000			242,000
Construction in progress		12,042,000			5,507,000
		50,005,000			42,001,000
Less accumulated depreciation		(7,133,000	)		(5,233,000	)
	$	42,872,000		$	36,768,000

Depreciation expense for the three month and six month period ended June 30, 2015 and 2014 was $985,000 and $929,000, and $2,002,000 and $1,811,000 respectively.

6. GOODWILL & INTANGIBLE ASSETS

On January 10, 2014, the Company acquired 100% of all issued and outstanding shares of Pacific Ridge Farms, LLC, for a total purchase price of $11,077,000. The purpose of the acquisition was to expand the Company’s production capacity. The Company acquired $229,000 of cash as part of the acquisition. Transaction costs associated with the Pacific Ridge Farms acquisition totaled $679,000, including $1,000 and $658,000 in the three and six month period ended June 2014, respectively, and are recorded in transactions costs on the consolidated statements of operations

The company recorded all assets acquired and liabilities assumed at fair value. The Company acquired certain definite-lived intangible assets, including customer relationships, tradename, and assembled workforce; however they were deemed to have negligible value under the “value in exchange” premise and as such were economically adjusted to a zero value. The company used the in-use premise method to fair value the land and buildings acquired. The sum of the acquired assets and liabilities exceeded the purchase price and as such, the Company recorded a gain on acquisition of $1,208,000 in the other income section of the consolidated statements of operations.

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The final purchase price allocation is as follows:

	Fair Value (Level 3)
Cash	$	229,000
Accounts receivable		1,017,000
Inventories		3,898,000
Prepaid expenses and other current assets		647,000
Property & equipment		8,113,000
Accounts payable		(188,000	)
Accrued liabilities		(660,000	)
Deferred tax liability		(771,000	)
Fair value of assets and liabilities acquired		12,285,000
Gain on acquisition		(1,208,000	)
Total purchase price	$	11,077,000

On December 3, 2014 the Company acquired 75% of the capital stock of Opus for total consideration of $7,308,000. The purpose of the acquisition was to expand the Company’s fruit supply in the Mexican market. The agreement also includes a call option for the remaining 25% of the capital stock. Transaction costs associated with the Opus acquisition totaled $233,000 and were recorded in transaction costs in the consolidated statements of operations in December 2014. The three and six months ended June 30, 2015 include costs for the Opus acquisition transition.

The Company recorded all assets acquired and liabilities assumed at fair value. The Company acquired certain definite-lived intangible assets, including tradename, non-compete agreements, and assembled workforce; however they were deemed to have negligible value. The company used the in-use method to fair value the land and buildings acquired.

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The final purchase price allocation is as follows:

	Fair Value (Level 3)
Accounts receivable	$	1,301,000
Inventories		284,000
Prepaid expenses and other current assets		208,000
Property & equipment		7,965,000
Goodwill		4,017,000
Other long-term assets		34,000
Deferred tax asset		9,000
Accounts payable		(1,421,000	)
Accrued liabilities		(233,000	)
Debt		(806,000	)
Capital lease		(1,088,000	)
Deferred tax liability		(739,000	)
Equity		(2,223,000	)
	$	7,308,000

The following sets forth the goodwill and intangible assets by major asset class:

			June 30, 2015
	Useful Life				Accumulated			Net Book
	(Years)		Gross		Amortization			Value
Intangible Assets
Amortizing:
Customer relationships		10	$	55,500,000	$	(12,543,000	)	$	42,957,000
Tradename		2		1,200,000		(1,200,000	)		0
Non-compete		5		120,000		(48,000	)		72,000
Total intangible assets			$	56,820,000	$	(13,791,000	)	$	43,029,000
			December 31, 2014
	Useful Life				Accumulated			Net Book
	(Years)		Gross		Amortization			Value
Intangible Assets
Amortizing:
Customer relationships		10	$	55,500,000	$	(9,768,000	)	$	45,732,000
Tradename		2		1,200,000		(1,029,000	)		171,000
Non-compete		5		120,000		(37,000	)		83,000
Total intangible assets			$	56,820,000	$	(10,834,000	)	$	45,986,000

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The following sets forth the changes in goodwill from December 31, 2013 through June 30, 2015:

Goodwill as of December 31, 2013	$	47,310,000
Acquisition of Opus		4,017,000
Foreign exchange impact		(203,000	)
Goodwill as of December 31, 2014	$	51,124,000
Foreign exchange impact		(217,000	)
Goodwill as of June 30, 2015	$	50,907,000

7. ACCRUED EXPENSES

Accrued expenses consist of the following:

	June 30, 2015		December 31, 2014
Accrued freight	$	3,417,000	$	2,414,000
Accrued rebates		805,000		1,183,000
Lease impairment		182,000		436,000
Deferred Revenue		251,000		363,000
Other		1,853,000		1,767,000
	$	6,508,000	$	6,163,000

8. DEBT

On March 19, 2013, Sunrise Growers, Inc. entered into a Senior Credit Facility with a bank syndication group. The credit facility permits Sunrise Growers, Inc. to borrow up to $30,000,000 on a revolving line of credit and also borrow $66,000,000 on a term loan. Loan fees of $3,745,000 were incurred related to this debt and were recorded as loan origination costs in the consolidated balance sheet. The credit facility terminates March 19, 2018.

Quarterly principal term loan payments of $165,000 are payable June 30, 2013, through December 31, 2018. The debt is collateralized by substantially all of the Company’s assets and the outstanding principal balance, and all unpaid interest is due on the maturity date.

In conjunction with the acquisition of Packers Food Products, Inc., on June 27, 2013, the Company entered into the First Amendment to the Senior Credit Facility to increase the aggregate principal amount by $14,000,000 to $80,000,000. Principal term loan payments increased to $200,000 per quarter commencing September 30, 2013, through December 31, 2018. Loan fees of $370,000 were incurred for the First Amendment and are recorded as loan origination costs in the consolidated balance sheet as of December 31, 2014.

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On February 28, 2014 the Company entered into the Second Amendment to the Credit Agreement which increased the revolving credit facility $5,000,000 to a maximum borrowing of $35,000,000. The Second Amendment also increased the aggregate principal term amount from $80,000,000 to $125,000,000. The proceeds from the increased term were used to fund a distribution to the Company’s stockholders, to repay a $1,750,000 promissory note dated June 27, 2013 and to pay the fees associated with the Second Amendment. Principal payments increased to $312,500 per quarter commencing March 31, 2014, through December 31, 2018. Arrangement and Loan fees incurred as a result of the transaction totaled $1,979,000 and are recorded as loan origination costs in the consolidated balance sheet.

On April 29, 2015, the Company entered into the Third Amendment to the Credit Agreement which increased the aggregate revolving credit line from $35,000,000 to $45,000,000 to fund working capital requirements needed to support the growth of the business. Fees incurred as a result of the amendment totaled $100,000 and were expensed to general and administrative expense in the three month period ended June 2015.

On June 29, 2015, the Company entered into a Fourth Amendment to the Credit Agreement which increased the aggregate revolving credit line from $45,000,000 to $50,000,000 and increased the term loan by $10,000,000 to further fund working capital and capital expenditures. The Fourth Amendment increased quarterly Principal payments from $312,500 to $334,000. Fees incurred as a result of the amendment totaled $343,000 and were expensed to general and administrative expense in the three month period ended June 2015.

Interest is priced quarterly and is determined by the Company’s average collateral availability for the previous 12-month period. The interest rate on the revolving credit agreement at June 30, 2015 and December 31, 2014, was 6.75%. The balance outstanding under the senior revolving credit facility was $31,333,000 and $17,875,000 at June 30, 2015 and December 31, 2014, respectively. As of June 30, 2015 and December 31, 2014, the outstanding principal balance of the Sunrise Growers, Inc. term loan was $133,104,000 and $123,750,000 and the interest rate was priced using the London InterBank Offered Rate interest option of 5.5%.

The Senior Revolving Credit Facility and Senior Credit Facility are subject to financial covenants adjusting quarterly, including a consolidated fixed charge coverage ratio and a consolidated senior leverage ratio. The Company was in compliance with its covenants at June 30, 2015 and December 31, 2014. The credit agreement also has a provision for an annual excess cash flow principal payment, based upon certain financial criteria, payable upon the issuance of the end of the year audited financial statements. For the year ended December 31, 2014, no additional payment was due.

Long-term debt at June 30, 2015 and December 31, 2014, consists of the following:

	2015			2014
Term loan	$	133,104,000		$	123,750,000
Less current maturities		(1,334,000	)		(1,250,000	)
	$	131,770,000		$	122,500,000

As of June 30, 2015, Opus has approximately $300,000 in a short term promissory notes, with interest paid monthly at a rate of 9.5%. As of December 31, 2014, Opus had approximately $778,000 in promissory notes. The notes had due dates of 2015 and 2016, with interest paid monthly at an approximate average rate of 9.0%. Some of the loans outstanding at year-end were paid off early in the first six months of 2015.

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Promissory notes at June 30, 2015 and December 31, 2014, consists of the following:

	2015			2014
Promissory notes	$	300,000		$	778,000
Less current maturities		(300,000	)		(609,000	)
	$	0		$	169,000

9. CAPITAL LEASE OBLIGATIONS

Sunrise Holdings (Delaware), Inc. leases certain equipment under capital lease agreements. As of December 2014, the balance outstanding for capital leases included $143,000 for domestic operations and approximately $1,000,000 in capital leases for Opus.

In April 2015, the Company entered into a master service agreement which included two seven year capital leases to assist with specific growth and expansion initiatives in the Company’s Santa Maria and Kansas facilities. The capital lease balance as of June 30, 2015 totaled $3,900,000. The capital projects are not completely operational, as such, additional financing maybe added to the balance outstanding.

10. STOCK OPTIONS

In 2013, the Board of Directors approved the 2013 Stock Option Plan (the “Plan”), which is a plan for eligible persons of the Company under which nonqualified stock options may be granted. The option vesting period is determined by the Board of Directors at the time of grant. Options granted include both performance-based options and time-based options. Performance-based options vest in full upon the achievement of a specified stock price. Time-vested options vest 20% on the vesting commencement date, and then 20% on each of the four anniversaries of the vesting commencement date. Both option types expire 10 years from the grant date. The exercise price of the option cannot be less than the fair market value on the date the option is granted.

On February 28, 2014, the Company declared and subsequently paid a pro rata cash dividend to its stockholders totaling $40,000,000 and lowered the exercise price of 79,733 stock options by $54.93 per share. The cash payments totaling $40,000,000 reduced additional paid-in capital by the same amount. The 2013 Stock Option Plan has nondiscretionary antidilution provisions that require the fair value of the option awards to be equalized in the event of an equity restructuring. Consequently, the board of directors of the Company was obligated under the antidilution provisions to approve the reduction of the exercise price on the unvested options. No incremental stock-based compensation expense was recognized for the dividend for the vested options or reduction in exercise price for the unvested options.

On December 3, 2014 in conjunction with the acquisition of Opus Foods, Mexico S.A. de C.V, and by way of unanimous written consent of the Board of Directors, the total number of shares authorized for grant under the 2013 Stock Option Plan was increased to 88,233 and 8,500 options were granted. Options were granted with an exercise price equal to the fair value as of the grant date.

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Stock option activity under the Plan for the six month period end June 30, 2015 and the twelve month period end December 31, 2014, was as follows:

	Shares		Weighted Average Exercise Price		Remaining Contractual Life (Years)
Outstanding options – December 31, 2013 (1)		79,733	$	45.07		9.3
Options granted		8,500		214.4		10.0
Options exercised
Options forfeited/canceled		—		—		—
Outstanding options — December 31, 2014		88,233		61.4		9.4
Options granted
Options exercised
Options forfeited/canceled		—		—		—
Outstanding options — June 30, 2015		88,233		61.4		8.9
Options vested and expected to vest — June 30, 2015		88,233		61.4		8.9
Options exerciseable as of June 30, 2015		19,304

(1) The grant date weighted-average exercise price reflects the reduction of the exercise price by $54.93 per share for the 79,733 stock options that were part of the February 28, 2014 dividend discussed above.

The fair value of stock options granted during 2014 was $94.71 per share for time-based options and was estimated at the grant date using a Black-Scholes option-pricing model. No options were granted in the six months ended June 30, 2015. The fair value of stock options reflects a volatility factor, which was calculated using an average of peer companies’ historical volatility. The expected life was computed using the simplified method because the Company does not have relevant historical data to provide an estimate. The fair value of stock options was determined using the following assumptions:

	December 31, 2014
Expected term (years)		6.5
Risk-free interest rate		1.81	%
Volatility		41.92	%
Dividend yield (1)		—	%

(1) The board of directors paid a dividend to stockholders in February 2014 .The Company’s board of directors does not plan to pay cash dividends in the foreseeable future. Consequently, we used an expected dividend yield of zero.

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The fair value for performance-based options issued in 2014 was $22.77 per share. No performance based options were issued during the six months ended June 30, 2015. The fair value of performance-based options was estimated at the grant date using the Monte-Carlo simulation model based on a number of factors, including a volatility of 30%, an estimated term of 1 year, the estimated price of the Company’s common stock, and the estimated probability of achieving the Company’s performance conditions as of the grant date.

As of June 30, 2015 and December 31, 2014, unrecognized compensation expense related to unvested stock options aggregated to $2,366,000 and $2,758,000 which is expected to be recognized by the end of 2019. The Company’s pretax compensation expense for stock-based employee compensation for the three month period June 2015 and 2014 was $196,000 and $171,000, respectively. The compensation expense for the six month period June 2015 and 2014 was $392,000 and $342,000, respectively. Compensation expense is included in general and administrative expenses in the accompanying consolidated statements of operations.

11. COMMITMENTS AND CONTINGENCIES

Farmland Leases — The Company has several farmland lease commitments that expire on various dates through July 2021. The Company subleases the farmland to several third-party companies, with average monthly rental income of approximately $155,000. Sublease agreements expire on various dates through 2015. Historically, the sublease agreements renew annually however in 2013, management determined that costs for 346 acres of farmland will be incurred without economic benefit to the Company because the value that could be generated from the land (land rents for the next growing season) is not enough to cover the land expense. The land leases expire between 2014 and 2016. The expected loss accrued as of June 30, 2015 is $182,000 and December 31, 2014 is $436,000.

Facility, Corporate Office, and Equipment Lease — The Company has lease commitments for production facilities, corporate office facilities, and certain equipment under operating lease. The lease terms range from two to six years and expire at various dates through 2019. Some leases contain renewal options.

Indemnities and Guarantees — During the normal course of business, the Company has made certain indemnities and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities include certain real estate leases under which the Company may be required to indemnify property owners for environmental and other liabilities. The duration of these indemnities and guarantees varies and, in certain cases, is indefinite. The majority of these indemnities and guarantees do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make significant payments for these obligations and no liabilities have been recorded for these indemnities and guarantees in the accompanying consolidated balance sheet. Management is not aware of any event that might result in a liability at June 30, 2015.

Litigation — From time to time, the Company may be involved in litigation relating to claims arising out of its operations in the normal course of business. The Company is currently party to certain legal proceedings, which management believes, individually and in the aggregate, are not likely to have a material adverse effect on its consolidated financial position, results of operations, or cash flows. As of June 30, 2015, the company has $450,000 accrued to cover the anticipated settlement of one of the incidents currently in litigation.

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12. INCOME TAXES

Sunrise Holdings (Delaware), Inc. estimated effective income tax rate for continuing operations for the fiscal year ending December 31, 2015, exclusive of discrete items, is currently expected to be approximately 35.78%. This estimated rate was used to record income taxes for the June 30, 2015 period. For the June 30, 2014 period, Sunrise Growers used an estimated effective income tax rate for continuing operations of 34%. Sunrise Growers did not recognize any tax expense or benefit for discrete items in the June 2014 or June 2015 periods.

The Company is subject to taxation in the U.S. and various state jurisdictions and Mexico. As of June 30, 2015 the Company’s tax returns for 2011 through 2014 are subject to examination. In 2014, the Internal Revenue Service concluded their examination of the Company’s short-period March 18, 2013, tax year-end. The Internal Revenue Service did not impose any adjustments that materially impacted the financial statements.

13. RELATED-PARTY TRANSACTIONS

The Company has a consulting arrangement with Paine & Partners, LLC, an affiliate and coinvestor of Sunrise Holdings (Delaware), Inc., for financial and strategic consulting advisory service for an ongoing annual fee equal to 2.5% of the projected consolidated earnings before interest, taxes, depreciation, and amortization of the Company, payable in advance on January 2 each year. Advanced consulting payments were recorded as a prepaid asset and expensed ratably. Consulting expenses during the three months ended June 30, 2015 and 2014 totaled $239,000 and $207,000, respectively. Consulting expenses during the six months ended June 30, 2015 and 2014 totaled $478,000 and $414,000, respectively. Additionally, in February 2014, Paine was paid $750,000 for the arrangement of the Second Amendment to the Credit Agreement and $272,000 in January 2014 and $175,000 in December 2014 for their assistance with the PRF and Opus acquisitions. Arrangement and transaction consulting fees were recorded in the accompanying consolidated statements of operations in general and administrative expense.

In conjunction with the acquisition of Packers Food Products, Inc., on June 27, 2013, the Company entered into a $1,750,000 subordinated promissory note with a shareholder of the Company. Principal payments commenced on July 27, 2013, for 60 months with the remaining unpaid principal balance due and payable on July 27, 2018. Interest rate on the note is 0% but for purposes of accounting the applicable federal interest rate of 0.95% is used. The note was repaid in full on February 28, 2014 with proceeds received from the Second Amendment to the Senior Credit Facility.

14. SUBSEQUENT EVENTS

On July 30, 2015, the Company signed a purchase and sale agreement with a strategic company to sell all outstanding shares of Sunrise Holdings (Delaware), Inc. for total consideration of approximately $450,000,000. In conjunction with the sale of the Company, all outstanding senior revolving facility and long term debt will be paid off. The transaction is expected to be completed by October 2015.

* * * * * *

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EX-99.2

Exhibit 99.2

Sunrise Holdings

(Delaware), Inc. and

Subsidiaries

Consolidated Financial Statements as of December 31, 2014 and

2013 and for the year ended December 31, 2014 and for the Period

from March 19, 2013, to December 31, 2013 and Independent

Auditors’ Report

SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES

TABLE OF CONTENTS

	Page
INDEPENDENT AUDITORS’ REPORT		1
CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2014 AND 2013 AND FOR THE YEAR ENDED DECEMBER 31, 2014 AND THE PERIOD FROM MARCH 19, 2013 TO DECEMBER 31, 2013
Balance Sheets		2
Statements of Operations		3
Statements of Comprehensive Income/(Loss)		4
Statements of Stockholders’ Equity		5
Statements of Cash Flows		6
Notes to Consolidated Financial Statements		8-31

  INDEPENDENT AUDITORS’ REPORT   To the Board of Directors and Stockholders Sunrise Holdings (Delaware), Inc. Placentia, California Deloitte & Touche LLP 695 Town Center Drive Suite 1200 Costa Mesa, CA 92626 USA   Tel: +1 714 436 7100 Fax: +1 714 436 7200 www.deloitte.com

We have audited the accompanying consolidated financial statements of Sunrise Holdings (Delaware), Inc. and its subsidiaries (the “Company”), which comprise the consolidated balance sheets as of December 31, 2014 and 2013, and the related consolidated statements operations, comprehensive income, stockholders’ equity, and cash flows for the year ended December 31, 2014 and for the period from March 19, 2013 to December 31, 2013, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Sunrise Holdings (Delaware), Inc. and its subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for the year ended December 31, 2014 and for the period from March 19, 2013 to December 31, 2013 in accordance with accounting principles generally accepted in the United States of America.

September 3, 2015

Member of Deloitte Touche Tohmatsu Limited

- 1 -

SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2014 AND 2013

	2014			2013
ASSETS
CURRENT ASSETS:
Cash	$	92,000		$	10,553,000
Accounts receivable — net		20,700,000			13,055,000
Grower loans		3,052,000			1,297,000
Inventories — net		74,955,000			57,521,000
Deferred income taxes		1,764,000			3,005,000
Loan origination cost — net		1,070,000			740,000
Prepaid expenses and other current assets		1,895,000			856,000
Total current assets		103,528,000			87,027,000
PLANT AND EQUIPMENT — Net		36,768,000			16,572,000
LOAN ORIGINATION COSTS — Net		3,214,000			2,633,000
INTANGIBLE ASSET — Net		45,986,000			52,160,000
GOODWILL		51,124,000			47,310,000
OTHER LONG-TERM ASSETS		44,000
TOTAL	$	240,664,000		$	205,702,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	13,330,000		$	8,063,000
Accrued compensation and benefits		2,900,000			3,280,000
Accrued expenses		6,163,000			6,418,000
Income taxes payable					1,318,000
Current portion of long-term debt		1,859,000			800,000
Current portion of subordinated debt					165,000
Current portion of capital lease obligations		456,000			115,000
Total current liabilities		24,708,000			20,159,000
DEFERRED TAX LIABILITY		24,327,000			27,038,000
LINE OF CREDIT		17,875,000
LONG-TERM DEBT — Less current portion		122,669,000			78,635,000
SUBORDINATED LONG-TERM DEBT — Less current portion					1,441,000
CAPITAL LEASE OBLIGATIONS — Less current portion		721,000			143,000
COMMITMENTS AND CONTINGENCIES (Note 12)
STOCKHOLDERS’ EQUITY:
Common stock, $.01 par value, authorized 1,000,000 shares, 780,362 shares issued and outstanding at December 31, 2014 and 2013		8,000			8,000
Additional paid-in capital		43,816,000			83,124,000
Retained earnings		4,814,000			(4,846,000	)
Accumulated other comprehensive (loss)		(337,000	)
Total Sunrise Holdings (Delaware), Inc. stockholders’ equity		48,301,000			78,286,000
Non-Controlling Interest		2,063,000
Total stockholders’ equity		50,364,000			78,286,000
TOTAL	$	240,664,000		$	205,702,000

See notes to consolidated financial statements.

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SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2014 AND FOR THE PERIOD FROM MARCH 19, 2013 TO DECEMBER 31, 2013

	2014			2013
REVENUES:
Product, net	$	249,358,000		$	162,380,000
Service, net		4,199,000			1,498,000
Rental		3,202,000
Financing		71,000			222,000
Total revenues, net		256,830,000			164,100,000
COST OF REVENUES
Cost of revenues		212,742,000			128,077,000
Amortizaton of inventory fair value adjustment		438,000			7,639,000
Total cost of revenues		213,180,000			135,716,000
GROSS PROFIT		43,650,000			28,384,000
OPERATING EXPENSES:
Selling		3,669,000			3,121,000
General and administrative		21,013,000			17,491,000
Transaction costs (Note 7)		912,000			8,545,000
Total operating expenses		25,594,000			29,157,000
INCOME / (LOSS) FROM OPERATIONS		18,056,000			(773,000	)
OTHER INCOME — Net		(4,603,000	)
INTEREST EXPENSE — Net		8,395,000			4,170,000
INCOME/(LOSS) FROM CONTINUING OPERATIONS BEFORE EXPENSE / (BENEFIT) FROM INCOME TAX		14,264,000			(4,943,000	)
INCOME TAX EXPENSE/ (BENEFIT)		4,652,000			(330,000	)
LOSS FROM DISCONTINUED OPERATIONS, NET					(233,000	)
NET INCOME / (LOSS)	$	9,612,000		$	(4,846,000	)
NET LOSS ATTRIBUTED TO NON-CONTROLLING INTEREST		48,000
NET INCOME/(LOSS) ATTRIBUTED TO SUNRISE HOLDINGS (DELAWARE), INC.	$	9,660,000		$	(4,846,000	)

See notes to consolidated financial statements.

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SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

FOR THE YEAR ENDED DECEMBER 31, 2014 AND FOR THE PERIOD FROM MARCH 19, 2013 TO DECEMBER 31, 2013

	2014			2013
NET INCOME/(LOSS) ATTRIBUTED TO SUNRISE HOLDINGS (DELAWARE), INC.	$	9,612,000		$	(4,846,000	)
Other comprehensive loss:
Foreign currency translation		(337,000	)
Comprehensive income/(Loss)	$	9,275,000		$	(4,846,000	)

See notes to consolidated financial statements.

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SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2014 AND THE PERIOD FROM MARCH 19, 2013 TO DECEMBER 31, 2013

	Common Stock				Additional Paid-In			Accumulated Deficit/ Retained			Accumulated Other Comprehensive			Non- Controlling
	Shares		Amount		Capital			Earnings			Loss			Interest			Total
BALANCE — March 19, 2013		755,362	$	8,000	$	80,155,000					$	—		$	—		$	80,163,000
Issuance of shares		25,000				2,500,000												2,500,000
Stock-based compensation expense						469,000												469,000
Net Loss									(4,846,000	)								(4,846,000	)
BALANCE — December 31, 2013		780,362	$	8,000	$	83,124,000		$	(4,846,000	)	$	—		$	—		$	78,286,000
Dividend paid						(40,000,000	)											(40,000,000	)
Stock-based compensation expense						692,000												692,000
Acqusition of non-controlling interest															2,111,000			2,111,000
Net income									9,660,000						(48,000	)		9,612,000
Other comprehensive (loss)												(337,000	)					(337,000	)
BALANCE — December 31, 2014		780,362	$	8,000	$	43,816,000		$	4,814,000		$	(337,000	)	$	2,063,000		$	50,364,000

See notes to consolidated financial statements.

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SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2014 AND FOR THE PERIOD FROM MARCH 19, 2013 TO DECEMBER 31, 2013

	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income / (loss)	$	9,612,000		$	(4,846,000	)
Adjustments to reconcile net income/(loss) to net cash used in operating activities:
Depreciation		3,235,000			2,032,000
Amortization of loan origination costs		1,068,000			742,000
Amortization of fair value of inventory (Note 5)		438,000			7,639,000
Amortization of intangibles		6,174,000			4,660,000
Stock-based compensation expense		692,000			469,000
Gain on acquisition		(1,208,000	)
Provision for doubtful accounts & grower loan losses		25,000			322,000
Deferred income tax		(2,934,000	)		(5,583,000	)
Gain on the sale of capital assets		(16,000	)		17,000
Foreign exchange loss		46,000
Changes in operating assets and liabilities:
Accounts receivable		(5,516,000	)		5,207,000
Grower loans		(1,656,000	)		5,350,000
Inventories		(13,706,000	)		(16,659,000	)
Inventory of growing crops					2,342,000
Prepaid expenses and other current assets		(207,000	)		247,000
Accounts payable		3,689,000			(3,495,000	)
Income taxes payable					1,318,000
Accrued expenses and accrued compensation and benefits		(2,833,000	)		(3,715,000	)
Net cash used in operating activities		(3,097,000	)		(3,953,000	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of plant and equipment		139,000			54,000
Cash paid for acquisitions		(18,156,000	)		(11,399,000	)
Additions to plant and equipment		(7,838,000	)		(1,871,000	)
Net cash used in investing activities		(25,855,000	)		(13,216,000	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment on senior revolver credit facility		(38,680,000	)		(20,516,000	)
Borrowing on senior revolving credit facility		56,555,000			9,373,000
Principal payment on long-term debt and capital lease obligations		(2,971,000	)		(40,099,000	)
Proceeds from issuance of debt		45,565,000			80,000,000
Distribution to shareholders		(40,000,000	)
Working capital adjustment retained by Frozsun Inc					2,150,000
Loan origination costs		(1,979,000	)		(4,115,000	)
Net cash provided by financing activities		18,490,000			26,793,000
Effect of exchange rate changes on cash		1,000
NET (DECREASE)/INCREASE IN CASH		(10,461,000	)		9,624,000
CASH — Beginning of period		10,553,000			929,000
CASH — End of period	$	92,000		$	10,553,000

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SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES CONT’D

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2014 AND FOR THE PERIOD FROM MARCH 19, 2013 TO DECEMBER 31, 2013

	2014		2013
SUPPLEMENTAL CASH FLOW INFORMATION — Cash paid during the period for:
Interest	$	7,218,000	$	3,231,000
Income taxes	$	9,977,000	$	3,886,000
NON CASH INVESTING AND FINANCING ACTIVITIES
Purchase of land and buildings for Subordinated Promissory Note, net of discount (note 7)			$	1,687,000
Contribution of equity for acquisition (note 7)			$	2,500,000

See notes to consolidated financial statements.

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SUNRISE HOLDINGS (DELAWARE), INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013 AND FOR THE YEAR ENDED DECEMBER 31, 2014 AND FOR THE PERIOD FROM MARCH 19, 2013, TO DECEMBER 31, 2013

1. ORGANIZATION AND BASIS OF PRESENTATION

Description of Business — Sunrise Holdings (Delaware), Inc. (the “Company”), a Delaware corporation is the holding company of Sunrise Growers, Inc., formerly named Frozsun, Inc. (“Frozsun”) and its subsidiaries. In August 2014, Frozsun, Inc. and several subsidiaries, Sunrise Growers Inc., Sunrise Growers, LLC and Packers Food Products, Inc. were merged and the surviving entity Frozsun, Inc. was renamed to Sunrise Growers, Inc. Additionally, the holding company SGF Produce Holdings, LLC was merged into Sunrise Holdings (Delaware), Inc. The equity of the Company consists of 1,000,000 authorized shares and 780,362 outstanding shares of common stock as of December 31, 2014 and 2013. The shares of common stock have voting rights of one vote per share.

Sunrise Holdings (Delaware), Inc.’s wholly owned and majority owned subsidiaries include, Sunrise Growers Inc., Farm Capital, Inc. (FCI), Pacific Ridge Farms, LLC (PRF), Sunrise Growers Mexico, S. DE R.L. de C.V. and Opus Foods, Mexico S.A. de C.V. (Opus). FCI is a licensed chartered lending institution. FCI originates secured and unsecured loans to third-party growers in California, earning interest income on the borrowings.

In March 2013, all outstanding shares of SGF Produce Holdings, LLC, a holding company of Frozsun, were purchased by Sunrise Holdings (Delaware), Inc., an affiliate of Paine & Partners, LLC (the “Acquisition”). The Company has applied push-down accounting and, therefore, the assets and liabilities of Frozsun have been recorded based on their estimated fair market values as of the Acquisition date. As a result, for financial reporting purposes, the accompanying consolidated financial statements include the operations and cash flows of the Company beginning March 19, 2013.

On June 28, 2013, the Company acquired 100% of all issued and outstanding shares of Packers Food Products, Inc. Packers Food Products, Inc., is a manufacturer of private label frozen fruit products. The operations of Packers Food Products, Inc., are included in the accompanying consolidated financial statements beginning June 28, 2013.

On January 10, 2014, the Company expanded its operational capacity in California by acquiring 100% of all issued and outstanding shares of Pacific Ridge Farms, LLC (PRF), a frozen fruit processor and packer of private label frozen fruit products. The operations of PRF are included in the accompanying consolidated financial statements beginning January 10, 2014.

On December 3, 2014, the Company acquired 75% of the capital stock of a Mexican frozen fruit processing Company, Opus Foods, Mexico S.A. de C.V (Opus). The acquisition structure is such that a Sunrise holding company, Sunrise Growers Mexico, S. DE R.L. de C.V., owns 99% of the Opus investment and Pacific Ridge Farms, LLC owns 1%. The acquisition provides alternative fruit sourcing and expansion opportunities for the Company. The operations of Opus are included in the accompanying consolidated financial statements beginning December 4, 2014.

Sunrise Holdings (Delaware), Inc. and its subsidiaries are principally involved in the processing and selling of frozen strawberries, as well as other fruits, from its facilities in California, Kansas and Mexico, to retail, food service, and industrial customers. The Company is subject to USDA regulations and most of its revenues are derived from customers located in the United States.

- 8 -

The Company effectively ceased its fresh produce business operations in the fourth quarter of 2013. The fresh produce business was involved in the wholesale distribution of fresh strawberries, and management made the strategic decision to focus solely on the growing and more profitable processing business. The fresh produce business has been classified as discontinued operations in the Company’s consolidated financial statements for the period from March 19, 2013, to December 31, 2013.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation — The consolidated financial statements include the accounts of Sunrise Holdings (Delaware), Inc. and each of its wholly owned and majority owned subsidiaries including Sunrise Growers, Inc., Farm Capital, Inc. (FCI), Pacific Ridge Farms, LLC (PRF), Sunrise Growers Mexico, S. DE R.L. de C.V. and Opus Foods, Mexico S.A. de C.V. (Opus). All intercompany transactions and balances have been eliminated in consolidation.

Basis of Presentation — The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The Company has evaluated subsequent events through September 3, 2015, the date these consolidated financial statements were available to be issued.

Cash — The Company maintains its cash accounts with banks located in the United States of America and Mexico. Cash balances in the United States are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per bank. Net cash on the balance sheet reflects the total of various cash accounts, including zero balance accounts, that retain negative balances until the account is funded when checks are presented to the bank for payment. Although the net cash balance at December 31, 2014 is below the FDIC threshold, the Company did have cash balances with one bank at December 31, 2014 and 2013 that exceeded the balance insured by the FDIC.

Allowance for Doubtful Accounts — Management provides a reserve for uncollectible accounts receivable balances based on known customer exposures, historical credit experience, and any known specific issues or disputes, which exist as of the balance sheet date. Fully reserved balances are written-off against the reserve once collection is determined to be remote.

Grower Loans — Loans to growers are collateralized by the contracted crops in the field and are repaid from proceeds of harvested crops. The Company charges interest on the loans at a varying rate based on the Company’s borrowing rate and relationship with the grower. The average interest rate charged on the loan outstanding was 5.75% for the year ended December 31, 2014 and 8.0% for the period from March 19, 2013, to December 31, 2013. Interest income on loans to growers is classified as financing revenue in the accompanying consolidated statements of operations.

Inventories — Inventories consist principally of processed frozen strawberries and other fruits. The Company values inventories at the lower of cost or market. Cost is determined using the first-in, first-out method and includes raw fruit, packaging, labor, and overhead costs.

Concentrations — Sales to the Company’s recurring customers are generally made on open account terms. At December 31, 2014 and 2013 two customers accounted for 25% and 19%, and 32% and 16% of accounts receivable, respectively. The Company generated approximately 24% and 18% of its revenues from two customers, respectively, during the year ended December 31, 2014 and 20% and 22% of its revenues, respectively, for the period from March 19, 2013, to December 31, 2013. Management performs ongoing credit evaluations of its customers and generally does not require collateral on its accounts receivable.

- 9 -

Plant and Equipment — Plant and equipment are recorded at cost. Depreciation is provided for using the straight-line method over the estimated useful lives of the assets as follows:

Buildings	40 years
Machinery and equipment	5–7 years
Office furniture and equipment	3–5 years
Vehicles	3–7 years
Software	3 years

Leasehold improvements are depreciated over the shorter of the useful life of the improvements or the term of the related lease. Maintenance and repairs are charged to operating expense as incurred.

Long-Lived Assets — Management reviews the carrying value of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the carrying amount of the long-lived assets (asset group) is not recoverable and exceeds its estimated fair value. The carrying amount of the long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). Management determined there was no impairment as of December 31, 2014 or 2013.

Goodwill and Intangible Assets — Intangible assets consist of tradenames, customer relationships, and noncompetition agreements. Intangible assets with definite lives are amortized over their respective estimated useful lives using the straight-line method. The period of amortization is 2 to 10 years (see Note 7).

Intangible assets with indefinite lives are not amortized, but instead are measured for impairment at least annually or when events indicate that impairment exists. The Company calculates impairment as the excess of the carrying value of indefinite-lived intangible assets over their estimated fair value. If the carrying value exceeds the estimate of fair value, a write-down is recorded. The company concluded that there was no impairment of intangible assets at December 31, 2014 or 2013.

Goodwill represents the excess of purchase price over fair value of assets acquired and liabilities assumed in a business combination. The Company does not amortize its goodwill. The Company performs its impairment test annually at its fiscal year-end or more frequently if impairment indicators arise. Such review entails comparing the carrying value to the fair value. If the aggregate carrying value of goodwill exceeds the fair value, the goodwill is impaired to the extent of the difference between the fair value and the aggregate carrying value. The company concluded that there was no impairment of Goodwill at December 31, 2014 or 2013.

Loan Origination Costs — Loan origination costs reflect the balance of loan origination fees and certain direct loan origination costs that are deferred and recognized over the life of the related note. The net fees and costs are amortized into interest expense in the accompanying consolidated statements of operations using the effective interest method.

- 10 -

Fair Value of Financial Instruments — Management determines fair value using an “exit price” to value an asset or liability, which is the price at which an asset could be sold or a liability could be transferred in an orderly process that is not a forced liquidation or distressed sale at the measurement date. The Company applies a hierarchy of information that prioritizes market inputs used in measuring fair value, as follows:

Level 1 —    Quoted prices in active markets for identical assets or liabilities

Level 2 —    Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly for substantially the full term of the financial instrument

Level 3 —    Unobservable inputs for the asset or liability

The Company uses interest rate swaps to manage the mix of its debt between fixed and variable rate instruments. As of December 31, 2014, the Company had three interest rate swaps with the notional amount of $32,587,000, $20,000,000 and $7,000,000 that were not designated as accounting hedges, which expire on May 3, 2016, March 31, 2017 and September 4, 2015, respectively. As of December 31, 2013, the Company had two swaps with the notional amounts of $32,670,000 and $7,000,000, expiring on May 3, 2016 and September 4, 2015. Changes in the fair value of the swap agreements are recognized in interest expense.

The following table presents assets and liabilities recorded at fair value on the consolidated balance sheet on a recurring basis.

Fair Values of Derivative Instruments

	Balance Sheet Location	Asset Derivatives Fair Value 2014		Liability Derivatives Fair Value 2014
Interest rate swap (Level 2)	Accrued liabilities		—	$	20,000

	Balance Sheet Location	Asset Derivatives Fair Value 2013		Liability Derivatives Fair Value 2013
Interest rate swap (Level 2)	Other current assets and accrued liabilities	$	69,000	$	37,000

Effect of Non-designated Derivative Instruments on Net Loss

	Location of (Gain) or Loss Recognized in Net Loss	Period Ended December 31, 2014
Net periodic cash settlements and accrued interest	Interest expense	$	297,000
	Location of (Gain) or Loss Recognized in Net Loss	Period Ended December 31, 2013
Net periodic cash settlements and accrued interest	Interest expense	$	62,000

- 11 -

At December 31, 2014 and 2013, management believes that the carrying amount of cash, accounts receivable, grower loans, accounts payable, and accrued expenses approximate fair value due to the short maturity of these financial instruments. Management believes that the carrying amount of debt approximates the fair value and has been calculated based on the borrowing rates available as of December 31, 2014 and 2013, for debt with similar terms and maturities.

Noncontrolling Interest — On December 3, 2014, the Company acquired a 75% interest in Opus Foods, Mexico S.A. de C.V (“Opus”). Noncontrolling interest at December 31, 2014 is related to the membership interest the Company does not own in Opus.

Stock-Based Compensation — The Company accounts for stock-based compensation based on the fair value of the award on the grant date. Compensation expense is recognized on a straight-line basis over the requisite service period and is adjusted for estimated forfeitures. The requisite service period is the vesting period for stock options.

Revenue Recognition — Sales of frozen fruit are recognized as revenue upon passing of title and risk when a third-party shipper is used, persuasive evidence of an arrangement exists, collectability is reasonably assured, and upon acceptance of delivery by the customer if the Company uses their own trucks. The Company’s product sales consists primarily of frozen product that is packaged and processed in processing plants and sold to customers. The Company records all product sales at the gross sales amount.

Service revenues are derived from blast freezing, cooling and cold storage for third parties. Service revenue is recorded when services are performed.

Promotional Allowances — The Company records the consideration paid to resellers as a reduction of the selling prices of the Company’s products and services. The Company has classified $2,405,000 and $2,144,000 of customer allowances and rebates as a reduction of revenue for the year ended December 31, 2014 and the period from March 19, 2013, to December 31, 2013 respectively.

Cost of Revenue — Cost of revenue reflects the inventory cost of the product sold and is recorded simultaneously when revenue of the product is recognized. Product costs include fruit costs, ingredients, packaging, wages to process the fruit, rents and utilities, supplies and depreciation. Cost of revenue also includes cold storage and handling costs.

Shipping and Handling — The Company records shipping costs in cost of revenues in the accompanying consolidated statement of operations.

Other Income — Other income for the year ended December 31, 2014 includes:

Insurance claim proceeds	$	3,397,000
Gain on acquisition		1,208,000
Other expense		(2,000	)
	$	4,603,000

Other income was $0 for the period from March 19, 2013 to December 31, 2013.

In 2013, the Company identified that an employee had been misappropriating cash. In 2014, the Company received insurance recoveries of $3,397,000 related to the losses sustained.

- 12 -

In June 2014, as a result of the acquisition of Pacific Ridge Farms, LLC, the Company recorded a $1,208,000 gain on acquisition (Note 7).

Income Taxes — Income taxes are recorded using the liability method whereby deferred tax assets and liabilities are recognized to reflect the future tax consequences of events that have been recognized in the Company’s consolidated financial statements or tax returns. Measurement of the deferred tax items is based on enacted tax laws. In the event the future consequences of differences between financial reporting basis and tax basis of the Company’s assets and liabilities result in a deferred tax asset, management evaluates the probability of realizing the future benefits indicated by such asset. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Additionally, the Company accrues for uncertain tax positions. An uncertain tax position is recognized when it is probable that a liability has been incurred as of the date of the consolidated financial statements and the amount of the loss can be reasonably estimated. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount recognized.

Use of Estimates — The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Accounts that reflect significant estimates as of December 31, 2014, include the allowance for doubtful accounts, reserve for excess and obsolete inventories, and accrued expenses. Actual results could differ from those estimates.

Recent Accounting Pronouncements — In July 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). This ASU states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except in certain situations. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Early adoption and retrospective application are permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Based on the Company’s evaluation, this ASU is not expected to have a material impact on its consolidated financial statements.

On April 10, 2014, the FASB issued ASU 2014-08, which amends the definition of a discontinued operation and requires entities to provide additional disclosures about discontinued operations as well as disposal transactions that do not meet the discontinued operations criteria. This ASU will make it more difficult for a disposal transaction to qualify as a discontinued operation. The ASU also expands the scope of ASC 205-20 to disposals of equity method investments and businesses that, upon initial acquisition, qualify as held for sale. In addition, the ASU requires entities to reclassify assets and liabilities of a discontinued operation for all comparative periods presented in the statement of financial position. The ASU is effective prospectively for all disposals (except disposals classified as held for sale before the adoption date) or components initially classified as held for sale in periods beginning on or after December 15, 2014. The Company does not expect the adoption of this ASU will have a material impact on the consolidated financial statements.

- 13 -

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: (Topic 606). This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. In addition, the existing requirements for the recognition of gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles — Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in this ASU, as amended by ASU 2015-14, are effective for annual reporting periods beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 31, 2019. Early adoption is permitted as of an annual period beginning after December 15, 2017. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12, “Compensation — Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” This ASU requires that a performance target that affects vesting and that could be achieved after the requisite service period, be treated as a performance condition. The performance target should not be reflected in estimating the grant date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures, and provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. Until the issuance of this ASU, US GAAP lacked guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or to provide related footnote disclosures. The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company does not expect that the adoption of this amendment will have a material impact on its consolidated financial statements and disclosures.

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ASU No. 2015-03, Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”), was issued in April 2015. ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in an entity’s balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, instead of being presented as a deferred charge in the balance sheet. Significantly, the recognition and measurement guidance for debt issuance costs are not affected by ASU 2015-03. An entity is required to adopt ASU 2015-03 for reporting periods beginning on or after December 15, 2015. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

On July 22, 2015, the FASB issued ASU 2015-11, which requires entities to measure most inventory at the lower of cost and net realizable value, thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market (market in this context is defined as one of three different measures, one of which is net realizable value). The ASU is effective prospectively for annual periods beginning after December 15, 2016, and interim periods thereafter. The Company does not expect the adoption of this ASU will have a material impact on the consolidated financial statements.

3. ACCOUNTS RECEIVABLE

Accounts receivable, net, consists of the following at December 31, 2014 and 2013:

	2014			2013
Trade	$	18,645,000		$	12,992,000
Other unsecured receivable — non interest bearing		1,115,000			136,000
Income tax receivable		1,060,000
		20,820,000			13,128,000
Less allowance for doubtful accounts		(120,000	)		(73,000	)
	$	20,700,000		$	13,055,000

4. GROWER LOANS

Grower loans consists of the following at December 31, 2014 and 2013:

	2014		2013
Grower Loans	$	3,052,000	$	2,643,000
Less allowance for loan loss				(1,346,000	)
	$	3,052,000	$	1,297,000

At December 31, 2013, all grower loans were subject to an allowance for loan loss due to the discontinuance of the Company’s fresh operations.

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5. INVENTORIES

Inventories consist of the following at December 31, 2014 and 2013:

	2014		2013
Processed frozen fruit	$	71,122,000	$	54,408,000
Packaging supplies and raw ingredients		3,833,000		3,113,000
	$	74,955,000	$	57,521,000

Inventory is recorded at cost as of December 31, 2014 and 2013. During the year ended December 31, 2014, the Company recognized $438,000 in cost of revenues as a result of the amortization of the inventory fair value adjustment related to the acquisition of PRF. During the period from March 19, 2013, to December 31, 2013, the Company recognized $7,116,000 in cost of revenues as a result of the amortization of the inventory fair value adjustment related to the acquisition of Frozsun, and an additional $523,000 was recorded related to the Acquisition of Packers Food Products, Inc. (Note 7).

6. PLANT AND EQUIPMENT

Plant and equipment, net, consist of the following at December 31, 2014 and 2013:

	2014			2013
Machinery and equipment	$	20,576,000		$	12,807,000
Office furniture and equipment		779,000			488,000
Land & land improvements		6,059,000			442,000
Building		6,393,000			1,296,000
Leasehold improvements		1,674,000			1,499,000
Vehicles		771,000			530,000
Software		242,000			247,000
Construction in progress		5,507,000			1,290,000
		42,001,000			18,599,000
Less accumulated depreciation		(5,233,000	)		(2,027,000	)
	$	36,768,000		$	16,572,000

Depreciation expense for the year ended December 31, 2014 and the period from March 19, 2013, to December 31, 2013, was $3,235,000 and $2,032,000, respectively.

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7. GOODWILL & INTANGIBLE ASSETS

The Acquisition by Paine & Partners, LLC occurred in March 2013 for total consideration of $131,423,000. The Company received a refund of $2,150,000 for working capital adjustments, which was not remitted to Paine & Partners LLC, and is shown as a financing cash inflow for the period from March 19, 2013, to December 31, 2013, and was recorded as a receivable in the net assets of the acquired business. The transaction included the payoff of outstanding debt and accrued interest of $51,258,000. Transaction costs totaling $7,634,000 related to the Acquisition are recorded within the consolidated statement of operations. Transaction costs consist of advisory, deal, and legal fees, as well as other costs to complete the transaction.

The Company applied push-down accounting and recorded all assets acquired and liabilities assumed at fair value. The Company acquired certain definite-lived intangible assets, including customer relationships and tradename. The Company recorded the fair values of customer relationships using an income valuation approach. This valuation technique provides an estimate of the fair value of an asset based on the discounted cash flows that the asset can be expected to generate over its remaining useful life, discounted at a rate of return that considers the relative risk of achieving the cash flows and the time value of money. In estimating the fair value of tradenames, a variation of the income approach, the relief from royalty method, was applied. In the relief from royalty method, the fair value of the intangible asset is estimated to be the present value of the royalties saved because the Company owns the intangible asset.

The fair value of net assets and liabilities acquired is as follows:

	Fair Value
	(Level 3)
Cash	$	929,000
Accounts receivable		16,168,000
Grower loans		7,048,000
Inventories		40,267,000
Prepaid expenses and other current assets		3,098,000
Investment in crop		2,342,000
Property & equipment		13,373,000
Other long-term assets		155,000
Intangibles		51,400,000
Goodwill		43,988,000
Accounts payable		(9,252,000	)
Accrued liabilities		(12,091,000	)
Line of credit		(11,143,000	)
Debt		(39,350,000	)
Capital lease		(360,000	)
Deferred tax liability		(26,409,000	)
Push down value of net assets	$	80,163,000

On June 28, 2013, the Company acquired 100% of all issued and outstanding shares of Packers Food Products, Inc., for a total purchase price of $14,523,000, including $12,023,000 in cash and $2,500,000 in stock of SGF Produce Holdings Corp., which was contributed to the Company to effect the transaction. The purpose of the acquisition was to gain access to a strategic customer and establish a Midwest distribution center. The Company acquired $624,000 of cash as part of the acquisition. Additionally, in connection with the business acquisition, the Company purchased the offices and warehouse of Packers’

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Food Products, Inc., for $1,750,000 by executing a subordinated promissory note. The Company recorded a $62,000 discount on the subordinated promissory note. Transaction costs associated with the Packers Food Products, Inc., acquisition totaled $911,000 and are recorded in general and administrative expenses on the consolidated statement of operations.

In allocating the purchase price, the Company recorded all assets acquired and liabilities assumed at fair value. The Company acquired certain definite-lived intangible assets, including customer relationships, tradename, and non-compete agreement. The Company recorded the fair value of non-compete agreement using an income valuation approach by estimating the difference in after-tax cash flows with and without the agreement in place and the difference representing the implied valued. The Company recorded the fair values of customer relationships using an income valuation approach. This valuation technique provides an estimate of the fair value of an asset based on the discounted cash flows that the asset can be expected to generate over its remaining useful life, discounted at a rate of return that considers the relative risk of achieving the cash flows and the time value of money. In estimating the fair value of tradenames, a variation of the income approach, the relief from royalty method, was applied. In the relief from royalty method, the fair value of the intangible asset is estimated to be the present value of the royalties saved because the Company owns the intangible asset.

The final purchase price allocation is as follows:

	Fair Value (Level 3)
Cash	$	624,000
Accounts receivable		2,015,000
Inventories		8,234,000
Property & equipment		3,660,000
Intangibles		5,420,000
Goodwill		3,322,000
Accounts payable		(2,535,000	)
Accrued liabilities		(1,322,000	)
Promissory note		(1,688,000	)
Deferred tax liability		(3,207,000	)
	$	14,523,000

On January 10, 2014, the Company acquired 100% of all issued and outstanding shares of Pacific Ridge Farms, LLC, for a total purchase price of $11,077,000. The purpose of the acquisition was to expand the Company’s production capacity. The Company acquired $229,000 of cash as part of the acquisition. Transaction costs associated with the Pacific Ridge Farms acquisition totaled $679,000 and are recorded in transactions costs on the consolidated statement of operations.

The company recorded all assets acquired and liabilities assumed at fair value. The Company acquired certain definite-lived intangible assets, including customer relationships, tradename, and assembled workforce; however they were deemed to have negligible value under the “value in exchange” premise and as such were economically adjusted to a zero value. The company used the in-use premise method to fair value the land and buildings acquired. The sum of the acquired assets and liabilities exceeded the purchase price and as such, the Company recorded a gain on acquisition of $1,208,000 in the other income section of the consolidated statement of operations.

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The final purchase price allocation is as follows:

	Fair Value (Level 3)
Cash	$	229,000
Accounts receivable		1,017,000
Inventories		3,898,000
Prepaid expenses and other current assets		647,000
Property & equipment		8,113,000
Accounts payable		(188,000	)
Accrued liabilities		(660,000	)
Deferred tax liability		(771,000	)
Fair value of assets and liabilities acquired		12,285,000
Gain on acquisition		(1,208,000	)
Total purchase price	$	11,077,000

On December 3, 2014 the Company acquired 75% of the capital stock of Opus for total consideration of $7,308,000. The purpose of the acquisition was to expand the Company’s fruit supply in the Mexican market. The agreement also includes a call option for the remaining 25% of the capital stock. Transaction costs associated with the Opus acquisition totaled $233,000 and are recorded in transaction costs on the consolidated statement of operations. The Company’s purchase price allocation for Opus is preliminary as the final valuation of certain intangible assets are yet to be completed.

The company recorded all assets acquired and liabilities assumed at fair value. The Company acquired certain definite-lived intangible assets, including tradenames, non-compete agreements, and assembled workforce; however they were deemed to have negligible value. The company used the in-use method to fair value the land and buildings acquired.

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The final purchase price allocation is as follows:

	Fair Value (Level 3)
Accounts receivable	$	1,301,000
Inventories		284,000
Prepaid expenses and other current assets		208,000
Property & equipment		7,965,000
Goodwill		4,017,000
Other long-term assets		34,000
Deferred tax asset		9,000
Accounts payable		(1,421,000	)
Accrued liabilities		(233,000	)
Debt		(806,000	)
Capital lease		(1,088,000	)
Deferred tax liability		(739,000	)
Equity		(2,223,000	)
	$	7,308,000

The following sets forth the intangible assets by major asset class:

			December 31, 2014
	Useful Life (Years)		Gross		Accumulated Amortization			Net Book Value
Intangible Assets
Amortizing:
Customer relationships		10	$	55,500,000	$	(9,768,000	)	$	45,732,000
Tradenames		2		1,200,000		(1,029,000	)		171,000
Non-compete		5		120,000		(37,000	)		83,000
Total intangible assets			$	56,820,000	$	(10,834,000	)	$	45,986,000
			December 31, 2013
	Useful Life (Years)		Gross		Accumulated Amortization			Net Book Value
Intangible Assets
Amortizing:
Customer relationships		10	$	55,500,000	$	(4,218,000	)	$	51,282,000
Tradenames		2		1,200,000		(430,000	)		770,000
Non-compete		5		120,000		(12,000	)		108,000
Total intangible assets			$	56,820,000	$	(4,660,000	)	$	52,160,000

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The changes to goodwill for the year ended December 31, 2014 and the period from March 19, 2013, to December 31, 2013 are as follows

Goodwill as of March 19, 2013	$	43,988,000
Acquisition of Packers Food Products, Inc.		3,322,000
Goodwill as of December 31, 2013		47,310,000
Acquisition of Opus		4,017,000
Foreign exchange impact		(203,000	)
Goodwill as of December 31, 2014	$	51,124,000

Aggregate amortization expense on intangible assets was approximately $6,174,000 for the year ended December 31, 2014 and $4,660,000 for the period from March 19, 2013, to December 31, 2013. Amortization expense related to intangible assets at December 31, 2014, in each of the next five fiscal years and beyond is expected to be incurred as follows:

2015	$	5,745,000
2016		5,574,000
2017		5,574,000
2018		5,562,000
2019		5,550,000
Thereafter		17,981,000

8. ACCRUED EXPENSES

Accrued expenses at December 31, 2014 and 2013, consist of the following:

	2014		2013
Accrued freight	$	2,414,000	$	877,000
Discontinued operations severance				547,000
Accrued rebates		1,183,000		1,128,000
Lease impairment		436,000		571,000
Deferred Revenue		363,000		45,000
Business development				1,600,000
Other		1,767,000		1,650,000
	$	6,163,000	$	6,418,000

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9. DEBT

On March 19, 2013, Sunrise Holdings (Delaware), Inc. entered into a Senior Credit Facility with a bank syndication group. The credit facility permits the Company to borrow up to $30,000,000 on a revolving line of credit and also borrow $66,000,000 on a term loan. Loan fees of $3,745,000 were incurred related to this debt and were recorded as loan origination costs in the consolidated balance sheet. The credit facility terminates March 19, 2018.

The company is required to pay quarterly principal term loan payments of $165,000 from June 30, 2013, through December 31, 2018. The debt is collateralized by substantially all of the Company’s assets and the outstanding principal balance, and all unpaid interest is due on the maturity date.

In conjunction with the acquisition of Packers Food Products, Inc., on June 27, 2013, the Company entered into the First Amendment to the Senior Credit Facility to increase the aggregate principal amount by $14,000,000 to $80,000,000. Principal term loan payments increased to $200,000 per quarter commencing September 30, 2013, through December 31, 2018. Loan fees of $370,000 were incurred for the First Amendment and are recorded as loan origination costs in the consolidated balance sheet as of December 31, 2014.

On February 28, 2014 the Company entered into the Second Amendment to the Credit Agreement which increased the revolving credit facility $5,000,000 to a maximum borrowing of $35,000,000. The Second Amendment also increased the aggregate principal term amount from $80,000,000 to $125,000,000. The proceeds from the increased term were used to fund a distribution to the Company’s stockholders, to repay a $1,750,000 promissory note dated June 27, 2013 and to pay the fees associated with the Second Amendment. Principal payments increased to $312,500 per quarter commencing March 31, 2014, through December 31, 2018. Arrangement and Loan fees incurred as a result of the transaction totaled $1,979,000 and are recorded as loan origination costs in the consolidated balance sheet as of December 31, 2014.

Interest is priced quarterly and is determined by the Company’s average collateral availability for the previous 12-month period. The interest rate on the revolving credit agreement at December 31, 2014, was 6.75%. The balance outstanding under the senior revolving credit facility was $17,875,000 at December 31, 2014. As of December 31, 2014, the outstanding principal balance of the term loan was $123,750,000 and the interest rate was priced using the London InterBank Offered Rate interest option of 5.5%. As of December 31, 2013, $435,000 of the outstanding principal balance was priced using the base rate interest option of 6.25% and $79,000,000 was priced at the London InterBank Offered Rate interest option of 5.0%.

The Senior Revolving Credit Facility and Senior Credit Facility are subject to financial covenants adjusting quarterly, including a consolidated fixed charge coverage ratio and a consolidated senior leverage ratio. The Company was in compliance with its covenants at December 31, 2014. The credit agreement also has a provision for an excess cash flow principal payment, based upon certain financial criteria, payable upon the issuance of the audited financial statements. For the year ended December 31, 2014 and the period from March 19, 2013, to December 31, 2013, no additional payment is due.

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Long-term debt at December 31, 2014 and 2013, consists of the following:

	2014			2013
Term loan	$	123,750,000		$	79,435,000
Less current maturities		(1,250,000	)		(800,000	)
	$	122,500,000		$	78,635,000

As of December 31, 2014, the Company’s Mexican entity Opus has approximately $778,000 in promissory notes. The notes are due at various dates in 2015 and 2016 and interest is paid monthly when due. As of December 31, 2014, the interest rate approximated 9%.

Promissory notes at December 31, 2014, consists of the following:

	2014
Promissory notes	$	778,000
Less current maturities		(609,000	)
	$	169,000

Subordinated Term Promissory Note — In conjunction with the acquisition of Packers Food Products, Inc., on June 27, 2013, the Company entered into a $1,750,000 subordinated promissory note. Principal payments commenced on July 27, 2013, for 60 months with the remaining unpaid principal balance due and payable on July 27, 2018. Interest rate on the note is 0% but for purposes of accounting the applicable federal interest rate of 0.95% is used. On February 28, 2014, the subordinated term promissory note was repaid in full.

Future contractual debt and promissory note payments as of December 31, 2014 are as follows:

2015	$	1,859,000
2016		1,419,000
2017		1,250,000
2018		1,250,000
2019		118,750,000
	$	124,528,000

10. CAPITAL LEASE OBLIGATIONS

Sunrise Holdings (Delaware), Inc. leases certain equipment under capital lease agreements. The cost and accumulated amortization of assets under capital lease, which is included in machinery and equipment, was $642,000 and $88,000, respectively, at December 31, 2014, and $642,000 and $39,000, respectively, at December 31, 2013. Amortization of the capital leased equipment is included within depreciation expense.

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Opus has approximately $1,000,000 in capital leases for equipment and vehicles which is recorded on the consolidated balance sheet in plant and equipment.

Future minimum lease payments under the capital lease agreements as of December 31, 2014 are as follows:

2015	$	489,000
2016		348,000
2017		308,000
2018		93,000
2019		2,000
		1,240,000
Less amount representing interest		(63,000	)
Present value of future minimum lease payments		1,177,000
Less current portion		(456,000	)
	$	721,000

11. STOCK OPTIONS

In 2013, the Board of Directors approved the Sunrise Holdings (Delaware), Inc. 2013 Stock Option Plan (the “Plan”), which is a plan for eligible persons of the Company under which nonqualified stock options may be granted. The option vesting period is determined by the Board of Directors at the time of grant. Options granted include both performance-based options and time-based options. Performance-based options vest in full upon the achievement of a specified stock price. Time-vested options vest 20% on the vesting commencement date, and then 20% on each of the four anniversaries of the vesting commencement date. Both option types expire 10 years from the grant date. The exercise price of the option cannot be less than the fair market value on the date the option is granted.

On February 28, 2014, the Company declared and subsequently paid a pro rata cash dividend to its stockholders totaling $40,000,000 and lowered the exercise price of 79,733 stock options by $54.93 per share. The cash payments totaling $40,000,000 reduced additional paid-in capital by the same amount. The 2013 Stock Option Plan has nondiscretionary antidilution provisions that require the fair value of the option awards to be equalized in the event of an equity restructuring. Consequently, the board of directors of the Company was obligated under the antidilution provisions to approve the reduction of the exercise price on the unvested options. No incremental stock-based compensation expense was recognized for the dividend for the vested options or reduction in exercise price for the unvested options.

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On December 3, 2014 in conjunction with the acquisition of Opus Foods, Mexico S.A. de C.V, and by way of unanimous written consent of the Board of Directors, the total number of shares authorized for grant under the 2013 Stock Option Plan was increased to 88,233 and 8,500 options were granted. Options were granted with an exercise price equal to the fair value as of the grant date.

Stock option activity under the Plan for the year ended December 31, 2014 and the period from March 19 to December 31, 2013, was as follows:

	Shares		Weighted Average Exercise Price		Remaining Contractual Life (Years)
Outstanding options — March 19, 2013		—	$	—		—
Options granted		79,733		45.07
Options exercised
Options forfeited/canceled		—		—		—
Outstanding options — December 31, 2013		79,733		45.07		9.3
Options granted		8,500		214.4		10.0
Options exercised		—		—		—
Options forfeited/canceled		—		—		—
Outstanding options — December 31, 2014		88,233		61.4		9.4
Options vested and expected to vest		88,233		61.4		9.4
Options exerciseable as of December 31, 2014		9,652

(1) The grant date weighted-average exercise price reflects the reduction of the exercise price by $54.93 per share for the 79,733 stock options that were part of the February 28, 2014 dividend discussed above.

The fair value of stock options granted during 2014 and during the period from March 19, 2013, to December 31, 2013 was $94.71 and $49.54 per share for time-based options and was estimated at the grant date using a Black-Scholes option-pricing model. The fair value of stock options reflects a volatility factor, which was calculated using an average of peer companies’ historical volatility. The expected life was computed using the simplified method because the Company does not have relevant historical data to provide an estimate. The fair value of stock options was determined using the following assumptions:

	2014			2013
Expected term (years)		6.5			6.5
Risk-free interest rate		1.81	%		0.93	%
Volatility		41.92	%		50.44	%
Dividend yield (1)		—	%		—	%

(1) The board of directors paid a dividend to stockholders in February 2014 .The Company’s board of directors does not plan to pay cash dividends in the foreseeable future. Consequently, we used an expected dividend yield of zero.

- 25 -

The fair value for performance-based options was $22.77 for 2014. Valuation was determined using the Monte-Carlo simulation model based on a number of factors, including a volatility of 30%, an estimated term of 1 year, the estimated price of the Company’s common stock, and the estimated probability of achieving the Company’s performance conditions as of the grant date. For the period from March 19, 2013, to December 31, 2013, the fair value for performance-based options was $32.66 per share. The fair value of performance-based options was estimated at the grant date using the Monte-Carlo simulation model based on a number of factors, including a volatility of 50%, an estimated term of 5 years, the estimated price of the Company’s common stock, and the estimated probability of achieving the Company’s performance conditions as of the grant date.

As of December 31, 2014, unrecognized compensation expense related to unvested stock options aggregated to $2,758,000 which is expected to be recognized during the next 5 years. The Company’s pretax compensation expense for stock-based employee compensation for the year ended December 31, 2014 was $692,000 and $469,000 for the period from March 19, 2013, to December 31, 2013 and is included in general and administrative expenses in the accompanying consolidated statements of operations.

12. COMMITMENTS AND CONTINGENCIES

Farmland Leases — The Company has several farmland lease commitments that expire on various dates through July 2021. The Company subleases the farmland to several third-party companies, with average monthly rental income of approximately $155,000. Sublease agreements expire on various dates through 2015. Historically, the sublease agreements renew annually; in 2013, management determined that costs for 346 acres of farmland will be incurred without economic benefit to the Company because the value that could be generated from the land (land rents for the next growing season) is not enough to cover the land expense. The estimated loss of $571,000 was recorded in losses from discontinued operations and accrued expense during the period from March 19, 2013, to December 31, 2013. The land leases expire between 2014 and 2016. The accrual loss balance as of December 31, 2014 is $436,000.

Facility, Corporate Office, and Equipment Lease — The Company has lease commitments for production facilities, corporate office facilities, and certain equipment under operating lease. The lease terms range from two to six years and expire at various dates through 2019. Some leases contain renewal options.

- 26 -

Operating Lease Commitments — Future minimum lease payments by fiscal year and in the aggregate under operating leases that have initial or remaining no cancelable lease terms in excess of one year at December 31, 2014, including the farmland and facility leases described above, were as follows:

Year Ending December 31	Minimum Payments		Sublease Income		Net
2015	$	4,359,000	$	2,377,000	$	1,982,000
2016		3,680,000				3,680,000
2017		3,536,000				3,536,000
2018		1,187,000				1,187,000
2019		148,000				148,000
	$	12,910,000	$	2,377,000	$	10,533,000

Total rent expense for continuing operations for the year ended December 31, 2014 and the period from March 31, 2013 to December 31, 2013, was approximately $5,334,000 and $2,509,000, respectively. Sublease income was $3,059,000 and $838,000, respectively, for the same periods.

Indemnities and Guarantees — During the normal course of business, the Company has made certain indemnities and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities include certain real estate leases under which the Company may be required to indemnify property owners for environmental and other liabilities. The duration of these indemnities and guarantees varies and, in certain cases, is indefinite. The majority of these indemnities and guarantees do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make significant payments for these obligations and no liabilities have been recorded for these indemnities and guarantees in the accompanying consolidated balance sheet. Management is not aware of any event that might result in a liability at December 31, 2014 and 2013.

Litigation — From time to time, the Company may be involved in litigation relating to claims arising out of its operations in the normal course of business. The Company is currently party to certain legal proceedings, which management believes, individually and in the aggregate, are not likely to have a material adverse effect on its consolidated financial position, results of operations, or cash flows. As of December 31, 2014, the company accrued $450,000 in general and administrative expenses to cover the anticipated settlement of one of the incidents currently in litigation.

- 27 -

13. INCOME TAXES

The components of the income tax expense (benefit) for the year ended December 31, 2014, and the period from March 19, 2013 to December 31, 2013 are as follows:

	2014			2013
Current:
Federal	$	6,213,000		$	4,592,000
State		1,417,000			938,000
Foreign		7,000			0
		7,637,000			5,530,000
Deferred:
Federal		(2,184,000	)		(4,956,000	)
State		(721,000	)		(904,000	)
Foreign		(80,000	)		0
		(2,985,000	)		(5,860,000	)
	$	4,652,000		$	(330,000	)

The reconciliation of the income tax benefit to the amount of benefit that would result from applying the U.S. federal statutory rate (35%) for the year end December 31, 2014 and the period ended December 31, 2013, is as follows:

	2014						2013
	Amount			Percent			Amount			Percent
Benefit for income taxes at statutory rate		4,992,000			35.00	%		(1,730,000	)		35.00	%
State income taxes — net of federal benefit		655,000			4.59	%		22,000			-0.45	%
Foreign rate differential		(10,000	)		-0.07	%
PRF bagain purchase		(404,000	)		-2.83	%
Change in state rate		(202,000	)		-1.42	%
Section 199 deduction		(478,000	)		-3.35	%		(294,000	)		5.95	%
Nondeductible transaction costs		39,000			0.27	%		1,802,000			-36.46	%
Other		60,000			0.42	%		(130,000	)		2.63	%
		4,652,000			32.61	%		(330,000	)		6.68	%

- 28 -

Significant components of the Company’s net deferred income taxes at December 31, 2014 and 2013, are as follows:

	2014			2013
Deferred tax assets:
Allowance for doubtful accounts	$	51,000		$	616,000
Inventories		956,000			1,455,000
Accrued expenses		489,000			985,000
Accrued compensation		242,000			0
Net operating loss carryforwards		271,000			216,000
Unearned revenue		155,000			19,000
Stock-based compensation		471,000			178,000
State taxes		56,000			89,000
		2,691,000			3,558,000
Deferred tax liabilities:
Amortization identified intangibles		(19,672,000	)		(22,627,000	)
Land		(409,000	)		0
Property, plant, and equipment		(4,909,000	)		(4,760,000	)
Prepaid expense		(178,000	)		(133,000	)
Other		(86,000	)		(71,000	)
	$	(25,254,000	)	$	(27,591,000	)
Net deferred income taxes	$	(22,563,000	)	$	(24,033,000	)

As of December 31, 2014 and 2013, management determined it was more-likely-than-not that the deferred tax assets would be realized and, therefore, has not recorded a valuation allowance against the net deferred tax assets. As of December 31, 2014, the Company had estimated net operating loss carryforwards for state income tax purposes of approximately $2,453,000, which expire at various dates from 2015 to 2016.

The Company has not recognized a liability for uncertain tax positions as of December 31, 2014 or 2013. The Company will record any interest accrued related to uncertain tax positions and penalties as income tax expense.

The Company is subject to taxation in the U.S. and various state jurisdictions and Mexico. As of December 31, 2014, the Company’s tax returns for 2011 through 2014 are subject to examination. Subsequent to year-end, the Internal Revenue Service concluded their examination of the Company’s short-period from March 18, 2013, tax year-end. The Internal Revenue Service did not impose any adjustments that materially impacted the financial statements.

- 29 -

14. BENEFIT PLANS

The Company sponsors a 401(k) profit-sharing plan for all employees who meet the eligibility requirements as defined in the plan. The Company’s matching contribution is 100% for the employee’s first 3% contribution and is 50% for the next 2% contribution. The Company’s contribution is immediately vested. During the year ended December 31, 2014 and the period from March 19, 2013, to December 31, 2013, the Company contributed $203,000 and $178,000, respectively, to the 401(k) profit-sharing plan.

15. RELATED-PARTY TRANSACTIONS

The Company has a consulting arrangement with Paine & Partners, LLC, an affiliate and coinvestor of Sunrise Holdings (Delaware), Inc., for financial and strategic consulting advisory service for an ongoing annual fee equal to 2.5% of the projected consolidated earnings before interest, taxes, depreciation, and amortization of the Company, payable in advance on January 2 each year. Advanced consulting payments were recorded as a prepaid asset and expensed ratably through December 2014 and for the period from March 19, 2013, to December 31, 2013. Consulting expenses were $828,000 and $448,000 during the year ended December 31, 2014 and for the period from March 19, 2013, to December 31, 2013, respectively. Additionally Paine was paid $750,000 for the arrangement of the Second Amendment to the Credit Agreement and $272,000 and $175,000 for their assistance with the PRF and Opus acquisitions during year ended December 31, 2014. In 2013, in conjunction with the acquisition, the Company paid a $1,250,000 transaction fee to a shareholder and board member. Arrangement and transaction consulting fees were recorded in the accompanying consolidated statements of operations in general and administrative expense.

In conjunction with the acquisition of Packers Food Products, Inc., on June 27, 2013, the Company entered into a $1,750,000 subordinated promissory note with a shareholder of the Company. Principal payments commenced on July 27, 2013, for 60 months with the remaining unpaid principal balance due and payable on July 27, 2018. Interest rate on the note is 0% but for purposes of accounting the applicable federal interest rate of 0.95% is used. The note was repaid in full on February 28, 2014 with proceeds received from the Second Amendment to the Senior Credit Facility.

16. DISCONTINUED OPERATIONS

As discussed in Note 1, the Company made the decision to exit the fresh produce business. The fresh produce business has been classified as discontinued operations in the Company’s consolidated financial statements for the period from March 19, 2013, to December 31, 2013. All assets related to the fresh produce business that will not be used in the continuing operations have been written off, which resulted in a loss of $1,000,000, which is included in the loss from discontinued operations in the accompanying consolidated statement of operations.

- 30 -

The fresh produce business incurred the following results of operations for the period from March 19, 2013, to December 31, 2013:

Revenues	$	37,323,000
Loss before tax		(390,000	)
Benefit from income taxes		157,000
Net loss from discontinued operations		(233,000	)

17. SUBSEQUENT EVENTS

On April 23, 2015 the Company entered into a Master Equipment Lease Agreement to finance the purchase of form fill and seal equipment to enhance processing operations. The term of the agreement is seven years with the net present value of the lease payments totaling $4,300,000.

On April 29, 2015, the Company entered into the Third Amendment to the Credit Agreement which increased the aggregate revolving credit line from $35,000,000 to $45,000,000 to fund working capital requirements needed to support the growth of the business. Fees incurred as a result of the amendment totaled $100,000 and were expensed to general and administrative expense in the three month period ended June 2015.

On June 29, 2015, the Company entered into a Fourth Amendment to the Credit Agreement which increased the aggregate revolving credit line from $45,000,000 to $50,000,000 and increased the term loan by $10,000,000 to further fund working capital requirements. The Fourth Amendment increased quarterly Principal payments from $312,500 to $334,000. Fees incurred as a result of the amendment totaled $343,000 and were expensed to general and administrative expense in the three month period ended June 2015.

On July 30, 2015, the Company signed a purchase and sale agreement with a strategic company to sell all outstanding shares of Sunrise Holdings (Delaware), Inc. for total consideration of approximately $450,000,000. In conjunction with the sale of the Company, all outstanding senior revolving facility and long term debt will be paid off. The transaction is expected to be completed by October 2015.

* * * * * *

- 31 -

EX-99.3

Exhibit 99.3

Consolidated Financial Statements and Report of Independent Certified Public Accountants

SGF PRODUCE HOLDINGS, LLC AND SUBSIDIARIES

As of March 18, 2013 and December 31, 2012

Contents

	Page
Report of Independent Certified Public Accountants		1
Consolidated balance sheets		3
Consolidated statements of operations		5
Consolidated statements of member’s deficit		6
Consolidated statements of cash flows		7
Notes to consolidated financial statements		9

Report of Independent Certified Public Accountants	Audit • Tax • Advisory
	Grant Thornton LLP
	18400 Von Karman Avenue, Suite 900
	Irvine, CA 92612-0525
	T 949.553.1600
	F 949.553.0168
Board of Directors and Member	www.GrantThornton.com
SGF Produce Holdings, LLC

We have audited the accompanying consolidated financial statements of SGF Produce Holdings, LLC (a Delaware corporation) and Subsidiaries, which comprise the consolidated balance sheets as of March 18, 2013 and December 31, 2012, and the related consolidated statements of operations, member’s deficit, and cash flows for the period from January 1, 2013 to March 18, 2013 and for the year ended December 31, 2012, and the related notes to the financial statements.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of SGF Produce Holdings, LLC and Subsidiaries as of March 18, 2013 and December 31, 2012, and the results of their operations and their cash flows for the period from January 1, 2013 to March 18, 2013 and for the year ended December 31, 2012 in accordance with accounting principles generally accepted in the United States of America.

Irvine, California

September 11, 2015

Grant Thornton LLP

U.S. member firm of Grant Thornton International Ltd

2

SGF Produce Holdings, LLC and Subsidiaries

CONSOLIDATED BALANCE SHEETS

	March 18, 2013		December 31, 2012
ASSETS
CURRENT ASSETS:
Cash	$	929,000	$	39,000
Accounts receivable — net		16,168,000		10,965,000
Grower loans — net		7,048,000		6,092,000
Inventories — net		33,151,000		45,452,000
Inventory of growing crops		2,342,000		2,363,000
Deferred tax assets		2,504,000		2,411,000
Prepaid expenses and other current assets		1,123,000		1,282,000
Income taxes receivable		177,000		—
Total current assets		63,442,000		68,604,000
PLANT AND EQUIPMENT — net		6,804,000		6,079,000
LOAN ORGINATION COSTS		—		1,798,000
OTHER LONG-TERM ASSETS		5,000		—
	$	70,251,000	$	76,481,000

See accompanying notes to consolidated financial statements.

3

SGF Produce Holdings, LLC and Subsidiaries

CONSOLIDATED BALANCE SHEETS - CONTINUED

	March 18, 2013			December 31, 2012
LIABILITIES AND MEMBER’S DEFICIT
CURRENT LIABILITIES:
Accounts payable	$	9,252,000		$	8,752,000
Accrued compensation and benefits		4,032,000			1,535,000
Accrued expenses		8,419,000			3,166,000
Income taxes payable		—			3,349,000
Current portion of long-term debt		5,112,000			5,112,000
Current portion of capital lease obligations		121,000			154,000
Total current liabilities		26,936,000			22,068,000
LONG-TERM DEBT — less current portion		40,633,000			41,474,000
SENIOR REVOLVER CREDIT FACILITY		11,143,000			19,389,000
CAPITAL LEASE OBLIGATIONS — less current portion		239,000			258,000
DEFERRED TAX LIABILITY		1,151,000			857,000
COMMITMENTS AND CONTINGENCIES
MEMBER’S DEFICIT:
Member’s equity		12,120,000			12,120,000
Accumulated deficit		(21,971,000	)		(19,685,000	)
Total member’s deficit		(9,851,000	)		(7,565,000	)
	$	70,251,000		$	76,481,000

See accompanying notes to consolidated financial statements.

4

SGF Produce Holdings, LLC and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the period from January 1, 2013 to March 18, 2013			For the year ended December 31, 2012
REVENUES:
Product	$	32,858,000		$	141,466,000
Service		224,000			1,923,000
Financing		107,000			341,000
Total revenues		33,189,000			143,730,000
COST OF REVENUES		25,265,000			113,911,000
GROSS PROFIT		7,924,000			29,819,000
OPERATING EXPENSES:
Selling		576,000			3,443,000
General and administrative		2,523,000			10,279,000
Transaction costs		6,445,000			410,000
Total operating expenses		9,544,000			14,132,000
(LOSS)/GAIN FROM OPERATIONS		(1,620,000	)		15,687,000
INTEREST EXPENSE — Net		(3,485,000	)		(5,000,000	)
OTHER INCOME — Net		1,000			15,000
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX (BENEFIT) EXPENSE		(5,104,000	)		10,702,000
INCOME TAX (BENEFIT) EXPENSE		(1,286,000	)		4,051,000
(LOSS) INCOME FROM CONTINUING OPERATIONS		(3,818,000	)		6,651,000
INCOME FROM DISCONTINUED OPERATIONS — Net		346,000			1,497,000
NET (LOSS)/INCOME	$	(3,472,000	)	$	8,148,000

See accompanying notes to consolidated financial statements.

5

SGF Produce Holdings, LLC and Subsidiaries

CONSOLIDATED STATEMENTS OF MEMBER’S DEFICIT

	Common Units		Preferred Units		Member’s Equity		Accumulated Deficit			Total Member’s Deficit
Balance at December 31, 2011		1,000,000		50,000	$	12,120,000	$	(13,084,000	)	$	(964,000	)
Dividend paid		—		—		—		(15,027,000	)		(15,027,000	)
Stock-based compensation expense of subsidiary		—		—		—		278,000			278,000
Net income		—		—		—		8,148,000			8,148,000
Balance at December 31, 2012		1,000,000		50,000		12,120,000		(19,685,000	)		(7,565,000	)
Stock-based compensation expense of subsidiary		—		—		—		104,000			104,000
Income tax benefit from stock options		—		—		—		1,082,000			1,082,000
Net loss		—		—		—		(3,472,000	)		(3,472,000	)
Balance at March 18, 2013		1,000,000		50,000	$	12,120,000	$	(21,971,000	)	$	(9,851,000	)

See accompanying notes to consolidated financial statements.

6

SGF Produce Holdings, LLC and Subsidiaries

CONSOLIDATED STATEMENT OF CASH FLOWS

	For the period from January 1, 2013 to March 18, 2013			For the year ended December 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(3,472,000	)	$	8,148,000
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation		262,000			1,371,000
Amortization of loan origination costs		1,798,000			470,000
Stock-based compensation expense of subsidiary		104,000			278,000
Income tax benefit from stock options		1,082,000			—
Provision for doubtful accounts		15,000			3,000
Provision for grower loan losses		14,000			(137,000	)
Deferred income tax provision		201,000			480,000
Gain on the sale of capital assets		(59,000	)		(35,000	)
Paid in kind interest expense		59,000			368,000
Changes in operating assets and liabilities:		—			—
Accounts receivable		(5,218,000	)		(2,920,000	)
Grower loans		(970,000	)		(899,000	)
Inventories		12,301,000			(6,149,000	)
Inventory of growing crops		21,000			2,698,000
Prepaid expenses and other current assets		159,000			98,000
Income taxes receivable		(177,000	)		—
Other long-term assets		(5,000	)		115,000
Accounts payable		500,000			732,000
Accrued expenses and accrued compensation and benefits		7,750,000			(1,020,000	)
Income taxes payable		(3,349,000	)		(229,000	)
Net cash provided by operating activities		11,016,000			3,372,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of plant and equipment		59,000			47,000
Additions to plant and equipment		(987,000	)		(1,640,000	)
Net cash used in investing activities		(928,000	)		(1,593,000	)

See accompanying notes to consolidated financial statements.

7

SGF Produce Holdings, LLC and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS – CONTINUED

	For the period from January 1, 2013 to March 18, 2013			For the year ended December 31, 2012
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments on senior revolver credit facility	$	(8,246,000	)	$	3,625,000
Principal payments on long-term debt and capital lease obligations		(952,000	)		(8,543,000	)
Proceeds from issuance of debt		—			19,000,000
Loan origination costs		—			(823,000	)
Dividend paid to stockholder		—			(15,027,000	)
Net cash used in financing activities		(9,198,000	)		(1,768,000	)
NET INCREASE IN CASH		890,000			11,000
CASH — Beginning of period		39,000			28,000
CASH — End of period	$	929,000		$	39,000
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for:
Interest	$	1,313,000		$	5,501,000
Income taxes	$	1,168,000		$	4,682,000

See accompanying notes to consolidated financial statements.

8

SGF Produce Holdings, LLC and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 18, 2013 and December 31, 2012

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

Description of Business — Prior to December 28, 2012, SGF Produce Holding Corp. was a wholly owned subsidiary of SGF Produce Intermediate, LLC. SGF Produce Holding Corp. has the following wholly owned subsidiaries: Frozsun, Inc. (“Frozsun”), Sunrise Growers, Inc. (“Sunrise”), Farm Capital, Inc. (“FCI”), and Sunrise Growers, LLC (“Sunrise LLC”). On December 28, 2012, SGF Produce Holdings, LLC was formed and incorporated in the state of Delaware. At the time of formation, SGF Produce Intermediate, LLC contributed all of its 2,500,000 shares of common stock in SGF Produce Holding Corp. to SGF Produce Holdings, LLC. In return, SGF Produce Intermediate, LLC received 1,000,000 common units and 50,000 preferred units of SGF Produce Holdings, LLC.

Management determined that this transaction resulted in a change in reporting entity because it involved a transfer of a business between entities under common control. Accordingly, management has recorded a retrospective adjustment to reflect the combined financial statements using a method similar to the pooling-of-interests method. The comparative financial information included within the accompanying consolidated financial statements has been presented as if the entities had always been combined.

SGF Produce Holdings, LLC and its wholly owned subsidiaries SGF Produce Holding Corp, Frozsun, Sunrise, FCI, and Sunrise LLC are hereinafter referred to collectively as “the Company.”

The following is a description of the Company’s wholly owned subsidiaries:

Frozsun – Frozsun is principally involved in the processing and selling of frozen strawberries, as well as other fruits, from its facilities in California. Frozsun is subject to USDA regulations and most if its revenues are derived from customers located in the United States.

Sunrise — Sunrise is involved in the purchasing and wholesale distribution of fresh produce sourced primarily in California to retail and food service customers located predominately in the United States. In addition, Sunrise sells plants and operating supplies, subleases farmland, and acts as an agent for FCI to distribute and collect on its grower loans.

Sunrise LLC — Sunrise LLC manages the farming activities of the Company. During the period from January 1, 2013 to March 18, 2013, Sunrise LLC participated in strawberry contract farming arrangements whereby a third-party farm manager operated the farm on the Company’s behalf.

FCI — FCI is a licensed chartered lending institution. FCI originates secured and unsecured loans to third-party growers in California, earning interest income on the borrowings.

During the fourth quarter of 2013, the Company ceased its fresh produce business which consists of Sunrise Growers, Inc. and Sunrise Growers, LLC. The fresh produce business was involved in the wholesale distribution of fresh strawberries, and management made the strategic decision to focus solely on the frozen fruit processing and packaging business. The fresh produce business has been classified as discontinued operations in the Company’s accompanying consolidated statements of operations. The assets and liabilities of the discontinued operations are not material and have not been separately presented in the accompanying consolidated balance sheets.

9

SGF Produce Holdings, LLC and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

March 18, 2013 and December 31, 2012

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation — The consolidated financial statements include the accounts of SGF Produce Holdings, LLC and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

Basis of Presentation — The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. We have evaluated subsequent events through September 11, 2015, the date these financial statements were available to be issued.

Cash — The Company maintains its cash accounts with banks located in the United States of America. Cash balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per bank. At March 18, 2013, the Company had $679,000 of cash in excess of FDIC insurance limits. The Company did not have cash balances that exceeded the balance insured by the FDIC at December 31, 2012.

Allowance for Doubtful Accounts — Management provides a reserve for uncollectible accounts receivable balances based on known customer exposures, historical credit experience and any known specific issues or disputes which exist as of the balance sheet date. Fully reserved balances are written-off against the reserve once collection is determined to be remote.

Grower Loans — Loans to growers are collateralized by the contracted crops in the fields and, in certain instances, equipment and other collateral, and are repaid from proceeds of harvested crops. In the event a loan is carried forward beyond the crop season, the excess is repaid from subsequent years’ crop proceeds. Grower loans that carry over from the previous year are generally fully reserved through the provision for loan loss. Fully reserved balances are written-off against the reserve once collection is determined to be remote. The Company charges interest on the receivables at a varying rate based on the Company’s borrowing rate with the bank. The average rate charged to the growers for both the period from January 1, 2013 to March 18, 2013 and for the year ended December 31, 2012 was 8%. Interest income on loans to growers is classified as financing revenue in the accompanying consolidated statements of operations.

Inventories — Inventories consist principally of processed frozen strawberries and other fruits. The Company values inventories at the lower of cost or market. Cost is determined using the first-in, first-out method and includes raw fruit, packaging, labor and overhead costs. Management estimates a reserve for excess and obsolete inventory based on several factors, including age of the inventory and expected future sales orders.

Inventory of Growing Crops — Pre-harvest costs include all direct and indirect costs, such as occupancy, equipment use, fertilizer and utilities to prepare the crops for harvest and are capitalized during the growth cycle. The Company charges these costs to cost of revenues when crops are harvested, based on expected crop yields for each property. The crops generally have a growing cycle of less than one year with the harvest cycle running from March through August.

10

SGF Produce Holdings, LLC and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

March 18, 2013 and December 31, 2012

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Concentrations — Sales to the Company’s recurring customers are generally made on open account terms. At March 18, 2013 and December 31, 2012, one customer accounted for 37% and 45% of accounts receivable, respectively. The Company generated approximately 34% and 26% of its revenues from one customer during the period from January 1 to March 18, 2013 and the year ended December 31, 2012. Management performs ongoing credit evaluations of its customers and generally does not require collateral on its accounts receivable.

Plant and Equipment — Plant and equipment are recorded at cost. Depreciation is provided for using the straight-line method over the estimated useful lives of the assets as follows:

Machinery and equipment	5-7 years
Office furniture and equipment	3-5 years
Vehicles	3-7 years
Software	3 years

Leasehold improvements are depreciated over the shorter of the useful life of the improvements or the term of the related lease. Maintenance and repairs are charged to operating expense as incurred.

Long-Lived Assets — Management reviews the carrying value of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the carrying amount of the long-lived assets (asset group) is not recoverable and exceeds its estimated fair value. The carrying amount of the long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). Management determined there was no impairment as of March 18, 2013 and December 31, 2012.

Loan Origination Costs — Loan origination costs reflect the balance of loan origination fees and certain direct loan origination costs that are deferred and recognized over the life of the related note. The net fees and costs are amortized into interest expense in the accompanying consolidated statements of operations using the straight-line method.

Fair Value of Financial Instruments — Management determines fair value using an “exit price” to value an asset or liability, which is the price at which an asset could be sold or a liability could be transferred in an orderly process that is not a forced liquidation or distressed sale at the measurement date. The Company applies a hierarchy of information that prioritizes market inputs used in measuring fair value, as follows:

Level 1	Quoted prices in active markets for identical assets or liabilities
Level 2	Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly for substantially the full term of the financial instrument.
Level 3	Unobservable inputs for the asset or liability

The Company has not elected the fair value option for any financial assets or liabilities. Accordingly, there are no fair value measurements prepared on a recurring basis using the fair value hierarchy.

11

SGF Produce Holdings, LLC and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

March 18, 2013 and December 31, 2012

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Fair Value of Financial Instruments (continued) —

At March 18, 2013 and December 31, 2012, management believes that the carrying amount of cash, accounts receivable, grower loans, accounts payable, and accrued expenses approximate fair value due to the short maturity of these financial instruments. Management believes that the carrying amount of subordinated term promissory note approximates the fair value as the interest rate charged adjusts based on current market conditions.

Stock-Based Compensation — The Company accounts for stock-based compensation using the fair value of the award on the grant date. Compensation expense is recognized on a straight-line basis over the requisite service period and is adjusted for estimated forfeitures. The requisite service period is the vesting period for stock options.

Revenue Recognition — Sales of produce are recognized as revenue upon passing of title at shipping point when a third-party shipper is used, persuasive evidence of an arrangement exists, collectability is reasonably assured, and upon acceptance of delivery by the customer if the Company uses their own trucks. The Company’s product sales consist of two main types: (1) frozen product that is processed and packaged at the Company’s plants and sold to customers, and (2) fresh produce sold to customers. The Company records all product sales at the gross sales amount.

Service revenues are derived from services related to fresh produce sales including freight, cooling, and sales commissions, as well as blast freezing and cold storage for third parties. Service revenue is recorded when services are performed. Revenue from subleased farm land is recognized on a straight-line basis over the related term of the leases.

Shipping and Handling — The Company records shipping costs in cost of revenues in the accompanying consolidated statements of operations.

Income Taxes — As a limited liability company, the Company is generally exempt from federal and state income taxes. However, the Company conducts its operations primarily through its wholly owned subsidiaries which are C-corporations for tax purposes. Income taxes are recorded using the liability method whereby deferred tax assets and liabilities are recognized to reflect the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Measurement of the deferred tax items is based on enacted tax laws. In the event the future consequences of differences between financial reporting basis and tax basis of the Company’s assets and liabilities result in a deferred tax asset, management evaluates the probability of realizing the future benefits indicated by such asset. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

12

SGF Produce Holdings, LLC and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

March 18, 2013 and December 31, 2012

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Income Taxes (continued) —

Additionally, the Company accrues for uncertain tax positions. An uncertain tax position is recognized when it is probable that a liability has been incurred as of the date of the consolidated financial statements and the amount of the loss can be reasonably estimated. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount recognized.

Promotional Allowances — The Company records the consideration paid to resellers and rebates paid to growers as a reduction of the selling prices of the Company’s products and services. The Company has classified $245,000 and $2,827,000 of customer allowances and rebates as a reduction of revenue for the period from January 1, 2013 to March 18, 2013 and for the year ended December 31, 2012.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Accounts that reflect significant estimates as of March 18, 2013 and December 31, 2012 include the allowance for doubtful accounts, allowance for loan loss, reserve for excess and obsolete inventories, and accrued expenses. Actual results could differ from those estimates.

NOTE 3 - ACCOUNTS RECEIVABLE

Accounts receivable consists of the following:

	March 18, 2013			December 31, 2012
Trade accounts	$	16,098,000		$	10,831,000
Other unsecured receivables — noninterest bearing		212,000			261,000
		16,310,000			11,092,000
Less allowance for doubtful accounts		(142,000	)		(127,000	)
	$	16,168,000		$	10,965,0000

13

SGF Produce Holdings, LLC and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

March 18, 2013 and December 31, 2012

NOTE 4 - GROWER LOANS

Grower loans consist of the following:

	March 18, 2013			December 31, 2012
Grower loans	$	8,024,000		$	6,942,000
Less allowance for loan losses		(976,000	)		(850,000	)
	$	7,048,000		$	6,092,000

Grower loans bear interest at various interest rates (8% at March 18, 2013 and December 31, 2012), and are generally collateralized by growing crops. At March 18, 2013 and December 31, 2012, substantially all grower loans were subject to an allowance for loan loss.

NOTE 5 - INVENTORIES

Inventories consist of the following:

	March 18, 2013			December 31, 2012
Processed frozen fruit	$	32,477,000		$	44,816,000
Packaging supplies and raw ingredients		2,044,000			1,996,000
		34,521,000			46,812,000
Less reserve for excess and obsolete inventories		(1,370,000	)		(1,360,000	)
	$	33,151,000		$	45,452,000

14

SGF Produce Holdings, LLC and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

March 18, 2013 and December 31, 2012

NOTE 6 - PLANT AND EQUIPMENT

Plant and equipment consist of the following:

	March 18, 2013			December 31, 2012
Machinery and equipment	$	7,367,000		$	7,361,000
Office furniture and equipment		523,000			500,000
Leasehold improvements		1,004,000			696,000
Vehicles		532,000			532,000
Software		275,000			316,000
		9,701,000			9,405,000
Less accumulated depreciation		(4,288,000	)		(4,118,000	)
Construction in progress		1,391,000			792,000
	$	6,804,000		$	6,079,000

Depreciation expense for the period from January 1, 2013 to March 18, 2013 and for the year ended December 31, 2012 was $262,000 and $1,371,000, respectively.

NOTE 7 - ACCRUED EXPENSES

Accrued expenses consist of the following:

	March 18, 2013		December 31, 2012
Deferred land lease revenue	$	1,486,000	$	492,000
Accrued freight		615,000		321,000
Accrued interest		761,000		448,000
Deferred rent		183,000		185,000
Accrued rebates		320,000		263,000
Accrued brokerage and commission		153,000		140,000
Land lease impairment		183,000		263,000
Transaction costs		3,809,000		—
Reserve for future captive insurance claims		—		100,000
Other		909,000		954,000
	$	8,419,000	$	3,166,000

15

SGF Produce Holdings, LLC and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

March 18, 2013 and December 31, 2012

NOTE 8 - SENIOR REVOLVER CREDIT FACILITY

The Company has a senior revolving credit facility with a bank that permits the Company to borrow up to $45,000,000 subject to a borrowing base composed of inventories, accounts receivable and grower loans. The credit facility terminates February 26, 2016. The credit facility was subsequently amended on April 27, 2012, and again on November 20, 2012, to allow for additional long-term debt for the distribution of funds to the Company’s member and to amend the financial covenants. Interest is priced quarterly and is determined by the Company’s average collateral availability for the previous 12 month period. The interest rate at both March 18, 2013 and December 31, 2012 was 4%. The balance outstanding under the senior revolving credit facility was $ 11,143,000 and $19,389,000 at March 18, 2013 and December 31, 2012, respectively. On March 19, 2013, in conjunction with the sale transaction, the Company paid the outstanding principal and all unpaid interest (see Note 17).

NOTE 9 - LONG-TERM DEBT

Subordinated Term Promissory Note — On June 2, 2011, the Company entered into a $25,000,000 subordinated term promissory note collateralized by substantially all of its assets. The subordinated term promissory note was subsequently amended on April 27, 2012 and November 20, 2012 to increase the aggregate principal balance of the note to $44,000,000. Interest is paid monthly in arrears. At March 18, 2013 and December 31, 2012, the balance under the term note was $39,350,000 and $40,250,000, respectively.

The interest rate at both March 18, 2013 and December 31, 2012 was 11%. The loan and associated interest was paid off in full on March 19, 2013 in connection with the sale transaction. All remaining loan origination costs of $1,653,000 were expensed as of March 18, 2013 in anticipation of the debt pay off (see Note 17).

The senior revolver credit facility and subordinated term promissory note are subject to four financial covenants adjusting quarterly: fixed charge coverage ratio, minimum EBITDA, consolidated average leverage ratio and consolidated leverage ratio. The Company was in compliance with its covenants at March 18, 2013 and December 31, 2012.

Promissory Grid Note Due to Affiliate — On June 23, 2008, the Company entered into a $9,000,000 promissory grid note with an affiliate of Sun Capital Partners. Interest accrues daily at the rate of 4.39% and may be paid in cash or in kind. Interest was paid in kind and added to the loan’s principal amount outstanding. On September 23, 2008, the promissory note agreement was amended and restated, transferring the note ownership to a different affiliate of Sun Capital Partners, SGF Produce Intermediate, LLC. On April 27, 2012, $4,552,000 of the accumulated principal and interest was paid. The promissory grid note and accumulated interest outstanding as of March 18, 2013 and December 31, 2012 was $6,395,000 and $6,336,000, respectively. The promissory grid note and accumulated interest outstanding was paid off in full on March 19, 2013 in connection with the sale transaction (see Note 17).

16

SGF Produce Holdings, LLC and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

March 18, 2013 and December 31, 2012

NOTE 9 - LONG-TERM DEBT - Continued

Long-term debt consists of the following:

	March 18, 2013			December 31, 2012
Subordinated term promissory note	$	39,350,000		$	40,250,0000
Promissory grid note due to affiliate		6,119,000			6,119,000
Accrued paid in kind interest		276,000			217,000
Less current maturities (based on contractual repayment terms)		(5,112,000	)		(5,112 ,000	)
	$	40,633,000		$	41,474,000

NOTE 10 - CAPITAL LEASE OBLIGATIONS

The Company leases certain equipment under capital lease agreements. The cost and accumulated amortization of assets under capital leases, which are included in machinery and equipment, were $1,021,000 and $428,000 at March 18, 2013 and $1,021,000 and $397,000 at December 31, 2012, respectively. Amortization of the capital leased equipment is included within depreciation expense.

Future minimum lease payments under the capital lease agreements as of March 18, 2013 are as follows:

Year Ending December 31,
2013 – remaining months	$	119,000
2014		127,000
2015		127,000
2016		21,000
		394,000
Less amount representing interest		(34,000	)
Present value of future minimum lease payments		360,000
Less current portion		(121,000	)
	$	239,000

17

SGF Produce Holdings, LLC and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

March 18, 2013 and December 31, 2012

NOTE 11 - STOCK OPTIONS

In 2008, the Board of Directors approved the 2008 Stock Option Plan (the “Plan”), which is a plan for eligible persons of the Company under which nonqualified stock options may be granted by certain wholly owned subsidiaries of the Company. The option vesting period is determined by the Board of Directors at the time of grant. Options granted in 2009 vest over approximately 4 years and expire in ten years. According to the Plan, the exercise price at the date of grant will be at the discretion of the Board of Directors. The total number of shares authorized for grant under the Plan is 100,000 shares of common stock. An amendment to the Plan in 2009 increased the number of shares authorized for grant to 250,000.

Stock option activity under the Plan for the period from January 1, 2013 to March 18, 2013 and for the year ended December 31, 2012 was as follows:

	Shares		Weighted Average Exercise Price		Remaining Contractual Life (years)
Outstanding options at December 31, 2011		187,500	$	5.20		7.4
Options granted		—		—		—
Options exercised		—		—		—
Options forfeited/canceled		—		—		—
Outstanding options at December 31, 2012		187,500		5.20		6.4
Options granted		—		—		—
Options exercised		—		—		—
Options forfeited/canceled		—		—		—
Outstanding options at March 18, 2013		187,500	$	5.20		6.4

A summary of the unvested options for the period from January 1, 2013 to March 18, 2013 and for the year ended December 31, 2012 are set forth in the following table.

	Shares			Weighted Grant Date Fair Value
Unvested Options at December 31, 2011		75,000		$	5.93
Granted		—			—
Vested		(37,500	)		5.93
Forfeited/canceled		—			—
Unvested Options at December 31, 2012		37,500		$	5.93
Granted		—			—
Vested		37,500			5.93
Forfeited/canceled		—			—
Unvested Options at March 18, 2013		—		$	—

18

SGF Produce Holdings, LLC and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

March 18, 2013 and December 31, 2012

NOTE 11 - STOCK OPTIONS - Continued

Vested stock options can be exercised on the earliest of: 1) May 15, 2019, 2) a change in control of the Company or 3) the termination of employment dependent on certain conditions. All stock options became exercisable in conjunction with the sale transaction (see Note 17).

As of March 18, 2013, all previously unvested options became fully vested in conjunction with the sale transaction and the Company recognized the remaining unamortized compensation expense related to unvested stock options. Stock-based employee compensation was $104,000 and $278,000 for the period from January 1, 2013 to March 18, 2013 and for the year ended December 31, 2012, respectively, and is included in general and administrative expenses in the accompanying consolidated statement of operations.

NOTE 12 - COMMITMENTS AND CONTINGENCIES

Bonus Arrangements — On July 11, 2011, SGF Produce Holdings Corp entered into bonus agreements, which superseded and replaced all prior bonus agreements and allowed for selected executives to obtain a cash bonus to be paid over vesting tranches of June 2011, June 2012 and June 2013. The expense for these cash bonuses is recognized over the respective vesting period for each tranche. The bonuses are triggered when dividends are paid to shareholders. In addition, these agreements provide that selected executives will receive an additional cash bonus upon the future sale of the Company. The cash bonus that is payable after a change in control and subject to the Company’s value on the date of the sale is $975,000. As a result of the certainty of the sale of the Company, the total unamortized cash bonus expense was accelerated and recognized, along with the cash bonus payable resulting from the change in control, in the accompanying consolidated statement of operations during the period from January 1, 2013 to March 18, 2013. In connection with the sale of the Company, another bonus was triggered. The bonus totaled $911,000 and was determined based on the return on investment to the shareholder. Total cash bonus expense recognized during the period from January 1, 2013 to March 18, 2013 was $2,230,000.

Farmland Leases — The Company has several farmland lease commitments that expire on various dates through July 2016. The Company subleases the farmland to several third-party companies, with average monthly rental income of approximately $247,000. Sublease agreements expire on various dates through 2013. Historically, the sublease agreements renew annually and the lessees are obligated to offer their crops to the Company for sale.

In 2012, management determined that costs for 245 acres of land in Santa Maria, 137 acres of land in Oxnard, and 41 acres in Watsonville will be incurred without economic benefit to the Company because the value that could be generated from the land (land rents for the next growing season) is not enough to cover the land expense. The land leases expire between 2013 and 2016. The expected loss to be incurred totaled $263,000 at December 31, 2012 of which $183,000 remained accrued as of March 18, 2013, and is included in accrued expenses in the accompanying consolidated balance sheets.

19

SGF Produce Holdings, LLC and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

March 18, 2013 and December 31, 2012

NOTE 12 - COMMITMENTS AND CONTINGENCIES - Continued

Operating Lease Commitments — Future minimum lease payments by fiscal year and in the aggregate under operating leases that have initial or remaining noncancelable lease terms in excess of one year at March 18, 2013, were as follows:

Year Ending December 31,	Minimum Payments		Sublease Income		Net
2013 – remaining months	$	4,054,000	$	227,000	$	3,827,000
2014		3,808,000		—		3,808,000
2015		2,633,000		—		2,633,000
2016		2,050,000		—		2,050,000
2017		1,740,000		—		1,740,000
	$	14,285,000	$	227,000	$	14,058,000

Total rent expense for the period from January 1, 2013 to March 18, 2013 and for the year ended December 31, 2012 was approximately $1,325,000 and $7,467,000, respectively. Sublease income was $638,000 and $2,962,000 for the period from January 1, 2013 to March 18, 2013 and for the year ended December 31, 2012.

Indemnities and Guarantees — During the normal course of business, the Company has made certain indemnities and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities include certain real estate leases under which the Company may be required to indemnify property owners for environmental and other liabilities. The duration of these indemnities and guarantees varies and, in certain cases, is indefinite. The majority of these indemnities and guarantees do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make significant payments for these obligations and no liabilities have been recorded for these indemnities and guarantees in the accompanying consolidated balance sheets. Management is not aware of any event that might result in a liability at March 18, 2013 or at December 31, 2012.

Litigation — From time to time, the Company may be involved in litigation relating to claims arising out of its operations in the normal course of business. The Company is currently party to certain legal proceedings which management believes, individually and in the aggregate, are not likely to have a material adverse effect on its consolidated financial position, results of operations or cash flows.

20

SGF Produce Holdings, LLC and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

March 18, 2013 and December 31, 2012

NOTE 13 - INCOME TAXES

The components of the income tax (benefit) expense for continuing operations are as follows:

	For the period from January 1, 2013 to March 18, 2013			For the year ended December 31, 2012
Current:
Federal	$	(2,595,000	)	$	2,850,000
State		(304,000	)		762,000
		(2,899,000	)		3,612,000
Deferred:
Federal		1,628,000			245,000
State		(15,000	)		194,000
		1,613,000			439,000
	$	(1,286,000	)	$	4,051,000

The reconciliation of the income tax (benefit) expense to the amount of (benefit) expense that would result from applying the U.S. federal statutory rate (35%) to (loss) income from continuing operations is as follows:

	For the period from January 1, 2013 to March 18, 2013						For the year ended December 31, 2012
	Amount			Percent			Amount			Percent
Income tax (benefit) expense at statutory rate	$	(1,786,000	)		35.0	%	$	3,746,000			35.0	%
State income taxes — net of federal benefit		(207,000	)		4.1	%		621,000			5.8	%
Section 199 deduction		210,000			(4.1	%)		(245,000	)		(2.3	%)
Nondeductible transaction costs		510,000			(10.0	%)		(19,000	)		(0.2	%)
Other		(13,000	)		0.3	%		(52,000	)		(0.5	%)
	$	(1,286,000	)		25.2	%	$	4,051,000			37.8	%

21

SGF Produce Holdings, LLC and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

March 18, 2013 and December 31, 2012

NOTE 13 - INCOME TAXES - Continued

Significant components of the Company’s net deferred income taxes are as follows:

	March 18, 2013			December 31, 2012
Deferred tax assets:
Allowance for doubtful accounts	$	489,000		$	427,000
Inventories		1,104,000			1,065,000
Accrued expenses		588,000			659,000
Net operating loss carryforwards		382,000			238,000
Unearned revenue		651,000			216,000
Non-qualified stock options		—			442,000
Other		—			190,000
		3,214,000			3,237,000
Deferred tax liabilities:
Property, plant, and equipment		(1,414,000	)		(1,450,000	)
State income taxes		(287,000	)		(233,000	)
Other		(160,000	)		—
		(1,861,000	)		(1,683,000	)
Net deferred income taxes	$	1,353,000		$	1,554,000

As of March 18, 2013 and December 31, 2012, management determined it was more-likely-than-not that the deferred tax assets would be realized and, therefore, has not recorded a valuation allowance against the net deferred tax assets. As of March 18, 2013, the Company had estimated net operating loss carryforwards for state income tax purposes of approximately $4,324,000, which expire at various dates from 2015 to 2016.

The Company has not recognized a liability for uncertain tax positions as of March 18, 2013 and December 31, 2012. The Company will record any interest accrued related to uncertain tax positions and penalties as income tax expense.

The Company is subject to taxation in the US and various state jurisdictions. As of March 18, 2013, the Company’s state tax returns for 2007 through 2012 are subject to examination. The Company’s federal tax returns through 2009 have been examined with no significant change in the tax liability.

22

SGF Produce Holdings, LLC and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

March 18, 2013 and December 31, 2012

NOTE 14 - BENEFIT PLANS

The Company sponsors a 401(k) profit-sharing plan for all employees who meet the eligibility requirements as defined in the plan. The Company’s matching contribution is 100% for the employee’s first 3% contribution and is 50% for the next 2% contribution. The Company’s contribution is immediately vested. During the period from January 1, 2013 to March 18, 2013 and for the year ended December 31, 2012, the Company contributed $55,000 and $248,000, respectively, to the 401(k) profit-sharing plan.

NOTE 15 - RELATED PARTY TRANSACTIONS

The Company has a consulting arrangement with an affiliate of Sun Capital Partners and as such, pays an annual consulting fee equal to the greater of (1) $600,000 or (2) 8% of EBITDA, in addition to other out of pocket expenses. Consulting expenses incurred and paid during the period ended March 18, 2013 and December 31, 2012, totaled $553,000 and $1,175,000.

NOTE 16 – DISCONTINUED OPERATIONS

As discussed in Note 1, the Company made the decision to exit the fresh produce business. The fresh produce business has been classified as discontinued operations in the Company’s consolidated financial statements for the period from January 1, 2013 to March 18, 2013 and for the year ended December 31, 2012.

The fresh produce business generated the following results of operations:

	For the period from January 1, 2013 to March 18, 2013			For the year ended December 31, 2012
Revenues	$	10,053,000		$	81,477,000
Income before taxes	$	572,000		$	2,212,000
Income tax expense		(226,000	)		(715,000	)
Net income from discontinued operations	$	346,000		$	1,497,000

23

SGF Produce Holdings, LLC and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

March 18, 2013 and December 31, 2012

NOTE 17 - SUBSEQUENT EVENTS

On March 18, 2013, all outstanding shares of SGF Produce Holdings, LLC were purchased for total consideration of $130,000,000 by Sunrise Holdings (Delaware), Inc., an affiliate of Paine & Partners, LLC.

In conjunction with the transactions, the outstanding senior revolving facility of $11,143,000 and long-term debt of $45,745,000 were paid off, together with unpaid interest of $761,000. The Company was capitalized through an equity contribution and a new credit agreement with a bank syndication group.

The sale transaction resulted in a change in control and as such, accelerated the vesting of the Company’s stock options such that all outstanding options were immediately vested. The shares underlying the outstanding options were acquired for net proceeds paid to the option holders of approximately $3,968,000.

24

EX-99.4

Exhibit 99.4

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The unaudited pro forma condensed combined statements of operations for the year ended January 3, 2015, and for the two quarters ended July 4, 2015 and July 5, 2014, combine the historical consolidated statements of operations of SunOpta Inc. (“SunOpta”) and Sunrise Holdings (Delaware), Inc. (“Sunrise”), giving effect to the acquisition of Sunrise as if it had occurred on December 29, 2013. The unaudited pro forma condensed combined balance sheet as of July 4, 2015 combines the historical consolidated balance sheets of SunOpta and Sunrise, giving effect to the acquisition as if it had occurred on July 4, 2015. The historical consolidated financial information has been adjusted to give effect to pro forma events that are (i) directly attributable to the acquisition of Sunrise and the financing of such acquisition; (ii) factually supportable; and (iii) with respect to the statements of operations, expected to have a continuing impact on the combined results. In particular, the unaudited pro forma condensed combined financial statements reflect the following adjustments:

• the sale of common shares by SunOpta at an assumed offering price per common share of $7.82 (the last reported sale price of SunOpta’s common shares on the NASDAQ Global Select Market on September 11, 2015) for total estimated gross proceeds of $100.0 million (the “Equity Offering”);

• the consummation of senior secured financing by SunOpta Foods Inc. consisting of senior secured second lien notes due 2022 (the “Notes”) for total estimated gross proceeds of $330.0 million (the “Notes Offering”);

• borrowings of approximately $65.5 million under SunOpta’s existing North American credit facilities;

• the consummation of SunOpta’s acquisition of all of the issued and outstanding common shares of Sunrise (the “Sunrise Acquisition”); and

• payment of acquisition-related and financing-related transaction costs in connection with the foregoing.

The unaudited pro forma condensed combined financial information should be read in conjunction with the accompanying notes to the unaudited pro forma condensed combined financial statements. In addition, the unaudited pro forma condensed combined financial information was derived from and should be read in conjunction with the:

• audited consolidated financial statements of SunOpta as of and for the year ended January 3, 2015 and the related notes included in SunOpta’s Annual Report on Form 10-K for the year ended January 3, 2015;

• audited consolidated financial statements of Sunrise as of and for the year ended December 31, 2014 and the related notes included in SunOpta’s Current Report on Form 8-K filed on September 15, 2015;

• unaudited interim consolidated financial statements of SunOpta as of and for the two quarters ended July 4, 2015 and July 5, 2014, and the related notes included in SunOpta’s Quarterly Report on Form 10-Q for the quarter ended July 4, 2015; and

• unaudited interim consolidated financial statements of Sunrise as of and for the two quarters ended June 30, 2015 and June 30, 2014, and the related notes included in SunOpta’s Current Report on Form 8-K filed on September 15, 2015.

The unaudited pro forma condensed combined financial information has been presented for informational purposes only. The pro forma information is not necessarily indicative of what the combined company’s financial position or results of operations actually would have been had the Sunrise Acquisition been completed as of the dates indicated. In addition, the unaudited pro forma condensed combined financial information does not purport to project the future financial position or operating results of the combined company.

The unaudited pro forma condensed combined financial information is based upon certain assumptions with respect to SunOpta’s financing of the Sunrise Acquisition. Whether the assumed financing sources are available, and, if available, the terms of SunOpta’s future financings, will be subject to market conditions. The actual sources of financing and the terms on which it is obtained may not be as favorable as those reflected in the unaudited pro forma condensed combined financial information. Differences between preliminary estimates in the unaudited pro forma condensed combined financial information and the final acquisition accounting, as well as between the assumed and actual financing sources and terms, will occur and could have a material impact on the unaudited pro forma condensed combined financial information and the combined company’s financial position and future results of operations.

The unaudited pro forma condensed combined financial information has been prepared using the acquisition method of accounting under U.S. generally accepted accounting principles (“U.S. GAAP”). The acquisition accounting is dependent upon certain valuations and other studies or events that have yet to progress to a stage where there is sufficient information for a definitive measurement. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited pro forma condensed combined financial information. Differences between these preliminary estimates and the final acquisition accounting will occur, and these differences could have a material impact on the accompanying unaudited pro forma condensed combined financial statements and the combined company’s future results of operations and financial position.

The unaudited pro forma condensed combined financial information does not reflect any cost savings, operating synergies or revenue enhancements that the combined company may achieve as a result of the Sunrise Acquisition; costs necessary to achieve these cost savings, operating synergies and revenue enhancements; or costs to integrate the operations of Sunrise.

- 2 -

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED JANUARY 3, 2015

(Expressed in thousands of U.S. dollars, except share and per share amounts)

	SunOpta			Sunrise			Re- classification Adjustments (note 6)			Pro Forma Adjustments (note 7)			Pro Forma Combined
Revenues	$	1,242,600		$	256,830		$	—		$	(2,807	)(a)	$	1,496,623
Cost of goods sold		1,099,306			213,180			—			(2,257	)(a)(b)		1,310,229
Gross profit		143,294			43,650			—			(550	)		186,394
Selling, general and administrative expenses		94,609			—			18,508	(a)(b)		—			113,117
Selling expenses		—			3,669			(3,669	)(a)		—			—
General and administrative expenses		—			21,013			(21,013	)(b)(c)		—			—
Intangible asset amortization		4,254			—			6,174	(c)		1,426	(c)		11,854
Other expense (income), net		2,494			—			(3,691	)(d)(e)		—			(1,197	)
Transaction costs		—			912			(912	)(d)		—			—
Goodwill impairment		10,975			—			—			—			10,975
Foreign exchange gain		(777	)		—			—			—			(777	)
Earnings from continuing operations before the following		31,739			18,056			4,603			(1,976	)		52,422
Interest expense, net		7,764			8,395			—			20,487	(e)		36,646
Other income		—			(4,603	)		4,603	(e)		—			—
Impairment loss on investment		8,441			—			—			—			8,441
Earnings from continuing operations before income taxes		15,534			14,264			—			(22,463	)		7,335
Provision for income taxes		8,903			4,652			—			(8,873	)(f)		4,682
Earnings from continuing operations		6,631			9,612			—			(13,590	)		2,653
Loss attributable to non-controlling interests		(4,716	)		(48	)		—			—			(4,764	)
Earnings from continuing operations attributable to controlling interests (note 8)	$	11,347		$	9,660		$	—		$	(13,590	)	$	7,417
Earnings per share from continuing operations (note 8)
Basic	$	0.17											$	0.09
Diluted	$	0.17											$	0.09
Weighted-average number of shares outstanding (000s)
Basic		66,835									12,788	(g)		79,623
Diluted		68,371									12,788	(g)		81,159

See the accompanying notes to the unaudited pro forma condensed combined financial statements, which are an integral part of these statements. The reclassification adjustments are explained in note 6. Reclassification Adjustments, and the pro forma adjustments are explained in note 7. Pro Forma Adjustments.

- 3 -

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE TWO QUARTERS ENDED JULY 4, 2015

(Expressed in thousands of U.S. dollars, except share and per share amounts)

						Re-
						classification			Pro Forma
						Adjustments			Adjustments			Pro Forma
	SunOpta			Sunrise		(note 6)			(note 7)			Combined
Revenues	$	610,674		$	145,343	$	—		$	(1,121	)(a)	$	754,896
Cost of goods sold		544,072			125,419		—			(846	)(a)(b)		668,645
Gross profit		66,602			19,924		—			(275	)		86,251
Selling, general and administrative expenses		46,126			—		9,090	(a)(b)		—			55,216
Selling expenses		—			1,850		(1,850	)(a)		—			—
General and administrative expenses		—			10,198		(10,198	)(b)(c)		—			—
Intangible asset amortization		2,326			—		2,958	(c)		842	(c)		6,126
Other expense, net		2,132			—		588	(d)(e)		(300	)(d)		2,420
Transaction and transition costs		—			215		(215	)(d)		—			—
Foreign exchange loss (gain)		(1,001	)		—		—			—			(1,001	)
Earnings from continuing operations before the following		17,019			7,661		(373	)		(817	)		23,490
Interest expense, net		4,916			5,068		—			9,636	(e)		19,620
Other expense		—			373		(373	)(e)		—			—
Earnings from continuing operations before income taxes		12,103			2,220		—			(10,453	)		3,870
Provision for income taxes		6,380			786		—			(4,129	)(f)		3,037
Earnings from continuing operations		5,723			1,434		—			(6,324	)		833
Earnings (loss) attributable to non-controlling interests		(1,694	)		238		—			—			(1,456	)
Earnings from continuing operations attributable to controlling interests (note 8)	$	7,417		$	1,196	$	—		$	(6,324	)	$	2,289
Earnings per share from continuing operations (note 8)
Basic	$	0.11										$	0.03
Diluted	$	0.11										$	0.03
Weighted-average number of shares outstanding (000s)
Basic		67,726								12,788	(g)		80,514
Diluted		68,047								12,788	(g)		80,835

See the accompanying notes to the unaudited pro forma condensed combined financial statements, which are an integral part of these statements. The reclassification adjustments are explained in note 6. Reclassification Adjustments, and the pro forma adjustments are explained in note 7. Pro Forma Adjustments.

- 4 -

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE TWO QUARTERS ENDED JULY 5, 2014

(Expressed in thousands of U.S. dollars, except share and per share amounts)

							Re-
							classification			Pro Forma
							Adjustments			Adjustments			Pro Forma
	SunOpta			Sunrise			(note 6)			(note 7)			Combined
Revenues	$	649,954		$	127,115		$	—		$	(1,706	)(a)	$	775,363
Cost of goods sold		570,914			104,985			—			(1,431	)(a)(b)		674,468
Gross profit		79,040			22,130			—			(275	)		100,895
Selling, general and administrative expenses		47,876			—			10,011	(a)(b)		—			57,887
Selling expenses		—			1,862			(1,862	)(a)		—			—
General and administrative expenses		—			11,236			(11,236	)(b)(c)		—			—
Intangible asset amortization		2,211			—			3,087	(c)		713	(c)		6,011
Other income, net		(1,004	)		—			(3,944	)(d)(e)		—			(4,948	)
Transaction costs		—			658			(658	)(d)		—			—
Foreign exchange loss		223			—			—			—			223
Earnings from continuing operations before the following		29,734			8,374			4,602			(988	)		41,722
Interest expense, net		4,158			3,915			—			10,687	(e)		18,760
Other income		—			(4,602	)		4,602	(e)		—			—
Earnings from continuing operations before income taxes		25,576			9,061			—			(11,675	)		22,962
Provision for income taxes		10,023			3,078			—			(4,612	)(f)		8,489
Earnings from continuing operations		15,553			5,983			—			(7,063	)		14,473
Earnings attributable to non-controlling interests		269			—			—			—			269
Earnings from continuing operations attributable to controlling interests (note 8)	$	15,284		$	5,983		$	—		$	(7,063	)	$	14,204
Earnings per share from continuing operations (note 8)
Basic	$	0.23											$	0.18
Diluted	$	0.22											$	0.18
Weighted-average number of shares outstanding (000s)
Basic		66,667									12,788	(g)		79,455
Diluted		68,058									12,788	(g)		80,846

See the accompanying notes to the unaudited pro forma condensed combined financial statements, which are an integral part of these statements. The reclassification adjustments are explained in note 6. Reclassification Adjustments, and the pro forma adjustments are explained in note 7. Pro Forma Adjustments.

- 5 -

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF JULY 4, 2015

(Expressed in thousands of U.S. dollars)

	SunOpta			Sunrise			Re- classification Adjustments (note 6)			Pro Forma Adjustments (note 7)			Pro Forma Combined
ASSETS
Current assets
Cash and cash equivalents	$	4,386		$	289		$	—		$	—	(y)	$	4,675
Accounts receivable		133,696			30,369			624	(f)		(424	)(h)		164,265
Grower loans		—			624			(624	)(f)		—			—
Inventories		286,331			126,868			—			16,000	(i)		429,199
Prepaid expenses and other current assets		19,750			1,918			1,070	(g)		(1,070	)(j)		21,668
Loan origination costs		—			1,070			(1,070	)(g)		—			—
Current income taxes recoverable		5,134			—			—			—			5,134
Deferred income taxes		5,950			2,868			—			14,000	(k)		22,818
		455,247			164,006			—			28,506			647,759
Property, plant and equipment		141,360			42,872			—			5,500	(l)		189,732
Goodwill		45,646			50,907			—			153,078	(m)		249,631
Intangible assets		50,927			43,029			—			121,971	(n)		215,927
Deferred income taxes		1,791			—			—			—			1,791
Other assets		4,952			100			2,679	(g)		5,821	(o)		13,552
Loan origination costs		—			2,679			(2,679	)(g)		—			—
	$	699,923		$	303,593		$	—		$	314,876		$	1,318,392
LIABILITIES
Current liabilities
Bank indebtedness	$	123,039		$	—		$	31,333	(h)	$	34,154	(p)	$	188,526
Accounts payable and accrued liabilities		133,038			—			56,766	(i)		(424	)(h)(q)		189,380
Accounts payable		—			47,080			(47,080	)(i)		—			—
Accrued compensation and benefits		—			3,178			(3,178	)(i)		—			—
Accrued expenses		—			6,508			(6,508	)(i)		—			—
Customer and other deposits		4,001			—			—			—			4,001
Income taxes payable		2,708			—			—			—			2,708
Other current liabilities		2,229			—			—			—			2,229
Current portion of long-term debt		31,573			1,634			475	(j)		(1,334	)(r)		32,348
Current portion of capital lease obligations		—			475			(475	)(j)		—			—
Current portion of long-term liabilities		4,519			—			—			—			4,519
		301,107			58,875			31,333			32,396			423,711
Line of credit		—			31,333			(31,333	)(h)		—			—
Long-term debt		3,275			131,770			4,665	(j)		198,230	(s)		337,940
Capital lease obligations		—			4,665			(4,665	)(j)		—			—
Long-term liabilities		18,000			—			—			—			18,000
Deferred income taxes		13,822			25,214			—			50,000	(t)		89,036
		336,204			251,857			—			280,626			868,687
EQUITY
Shareholders’ equity
Common shares		201,189			8			—			95,192	(u)		296,389
Additional paid-in capital		20,108			44,208			—			(44,208	)(v)		20,108
Retained earnings		136,592			6,010			—			(17,410	)(w)		125,192
Accumulated other comprehensive loss		(4,971	)		(676	)		—			676	(x)		(4,971	)
		352,918			49,550			—			34,250			436,718
Non-controlling interests		10,801			2,186			—			—			12,987
Total equity		363,719			51,736			—			34,250			449,705
	$	699,923		$	303,593		$	—		$	314,876		$	1,318,392

See the accompanying notes to the unaudited pro forma condensed combined financial statements, which are an integral part of these statements. The reclassification adjustments are explained in note 6. Reclassification Adjustments, and the pro forma adjustments are explained in note 7. Pro Forma Adjustments.

- 6 -

NOTES TO THE UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

(Tabular dollar amounts expressed in thousands of U.S. dollars)

1. Description of Transaction

On July 30, 2015, SunOpta entered into a Purchase and Sale Agreement (the “PSA”) to acquire all of the issued and outstanding common shares of Sunrise. Sunrise, through its subsidiaries, including Sunrise Growers, Inc., is engaged in the business of processing, marketing, distributing and selling conventional and organic frozen fruit. The transaction includes a cash purchase price of $287.2 million, subject to certain adjustments; the repayment of all outstanding obligations under Sunrise’s Credit Agreement dated March 19, 2013 (the “Senior Credit Facility”); and the assumption of certain indebtedness of Sunrise. Closing of the Sunrise Acquisition is expected to occur in the fall of 2015 and is subject to various closing conditions. The PSA provides SunOpta and Sunrise with customary termination rights.

SunOpta intends to finance the Sunrise Acquisition through a combination of new debt and equity financing in an aggregate amount of up to $430.0 million and borrowings under SunOpta’s existing North American credit facilities. The debt and equity financings are expected to occur on or prior to the closing of the Sunrise Acquisition. For purposes of these unaudited pro forma condensed combined financial statements, SunOpta has assumed aggregate gross proceeds of $330.0 million from the Notes Offering and $100.0 million from the Equity Offering, as well as approximately $65.5 million of borrowings under its North American credit facilities.

On July 30, 2015, SunOpta and its subsidiary SunOpta Foods Inc. entered into a commitment letter with certain financial institutions providing for committed bridge financing of up to $430.0 million (the “Commitment”) in support of the Sunrise Acquisition, consisting of $290.0 million of second lien secured credit facilities of SunOpta Foods Inc. (the “Opco Bridge”) and $140.0 million of unsecured senior subordinated credit facilities of SunOpta (the “Holdco Bridge” and, collectively with the Opco Bridge, the “Bridge Facilities”). The Commitment is subject to various conditions, including the consummation of the Sunrise Acquisition and other customary closing conditions.

If SunOpta consummates the Equity Offering for gross proceeds of less than $100.0 million, SunOpta expects to fund the difference between $100.0 million and the gross proceeds of the Equity Offering with the gross proceeds of an issuance of unsecured, senior subordinated pay-in-kind toggle notes (“PIK toggle notes”), which allow for the payment of certain interest payments through the issuance of additional notes rather than in cash, subject to an increased margin rate on any such interest paid in kind, and/or borrowings under the Holdco Bridge. SunOpta may fund up to $140.0 million under the Holdco Bridge.

If SunOpta consummates the Equity Offering and/or an offering of PIK toggle notes for gross proceeds of more than $100.0 million, SunOpta expects to reduce the aggregate principal amount of Notes offered in the Notes Offering accordingly.

To the extent that the Notes Offering yields gross proceeds of less than $330.0 million, or, as the case may be, less than $330.0 million reduced by the amount of additional gross proceeds from the Equity Offering and/or an offering of PIK toggle notes as described above, SunOpta Foods Inc. expects to borrow the difference under the Opco Bridge.

Concurrent with the consummation of the Sunrise Acquisition, SunOpta will repay the aggregate amount of all outstanding obligations under Sunrise’s Senior Credit Facility. As of July 4, 2015, outstanding obligations under the Senior Credit Facility comprised $31.3 million borrowed under a revolving line of credit facility and $133.1 million borrowed under a term loan facility.

Immediately prior to the Sunrise Acquisition, each outstanding Sunrise employee stock option, unexpired and unexercised, will be cancelled and converted into the right to receive a cash payment equal to a per share amount, derived based on the purchase consideration transferred to effect the Sunrise Acquisition, over the exercise price per share.

2. Basis of Presentation

The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting, and was based on the historical financial statements of SunOpta and Sunrise. The acquisition method of accounting is based on the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 805, “Business Combinations,” and uses the fair value concepts defined in ASC 820, “Fair Value Measurements.”

- 7 -

NOTES TO THE UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

(Tabular dollar amounts expressed in thousands of U.S. dollars)

ASC 805 requires, among other things, that most assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. ASC 820 defines the term “fair value” and sets forth the valuation requirements for any asset or liability measured at fair value and specifies a hierarchy of valuation techniques based on the nature of the inputs used to develop the fair value measures. Fair value is defined in ASC 820 as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” This is an exit price concept for the valuation of the asset or liability. In addition, market participants are assumed to be buyers and sellers in the principal (or the most advantageous) market for the asset or liability. Fair value measurements for an asset assume the highest and best use by these market participants. Many of these fair value measurements can be highly subjective and others, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts.

Under the acquisition method of accounting, the assets acquired and liabilities assumed of Sunrise will be recorded as of the completion of the Sunrise Acquisition, primarily at their respective fair values and added to those of SunOpta. The results of operations of Sunrise will be included in the financial statements of the combined company commencing as of the date of the completion of the Sunrise Acquisition.

Under ASC 805, acquisition-related transaction costs (i.e., advisory, legal, valuation, other professional fees) are not included as a component of consideration transferred but are accounted for as expenses in the periods in which the costs are incurred. Total acquisition-related transaction costs expected to be incurred by SunOpta are estimated to be approximately $8.5 million, of which $0.3 million had been incurred in the two quarters ended July 4, 2015. The remaining estimated transaction costs are not reflected in the unaudited pro forma condensed combined statements of operations as they do not have a continuing impact on the combined operating results. Instead such costs are reflected in the unaudited pro forma condensed combined balance sheet as a reduction to cash and cash equivalents and a decrease to retained earnings. The unaudited pro forma condensed combined financial statements do not reflect the cost savings, operating synergies or revenue enhancements that the combined company may achieve as a result of the Sunrise Acquisition or the acquisition-related integration or restructuring charges expected to be incurred to achieve those synergies or enhancements.

3. Accounting Policies

Upon consummation of the Sunrise Acquisition, SunOpta will review Sunrise’s accounting policies in detail. As a result of that review, SunOpta may identify differences between the accounting policies of the two companies that, when conformed, could have a material impact on the consolidated financial statements of the combined company. At this time, SunOpta is not aware of any differences that would have a material impact on the unaudited pro forma condensed combined financial statements, other than the presentation differences described in note 6. The accounting policies used in the preparation of the unaudited pro forma condensed combined financial statements are consistent with those described in the unaudited interim consolidated financial statements of SunOpta for the two quarters ended July 4, 2015 and the audited consolidated financial statements of SunOpta for the year ended January 3, 2015.

4. Estimate of Consideration Expected to be Transferred

The following is a preliminary estimate of the purchase consideration expected to be transferred to effect the Sunrise Acquisition:

Cash purchase price before adjustments	$	287,150
Adjusted for the following items pursuant to the PSA:
Estimated amount to be paid to holders of Sunrise stock options(1)		(23,500	)
Estimated acquisition-related transaction costs to be incurred by Sunrise(2)		(22,000	)
50% of estimated representations and warranties insurance policy premium(3)		(800	)
Estimated tax benefits related to Sunrise’s deductible stock option and acquisition-related transaction costs(4)		15,000
Adjusted cash purchase price		255,850
Estimated repayment of Sunrise’s Senior Credit Facility(5)		164,437
Estimated settlement of Sunrise’s vested stock options(6)		23,500
Total estimated purchase consideration	$	443,787

- 8 -

NOTES TO THE UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

(Tabular dollar amounts expressed in thousands of U.S. dollars)

(1) Pursuant to the PSA, SunOpta is entitled to deduct from the cash purchase price the aggregate amount to be paid by SunOpta to the holders of Sunrise stock options at the closing of the Sunrise Acquisition. All outstanding stock options will vest upon the consummation of the Sunrise Acquisition, pursuant to the terms of Sunrise’s existing stock option agreements, and will be cancelled in exchange for a cash payment equal to a per share amount, derived based on the purchase consideration, over the exercise price per share. The aggregate amount expected to be paid by SunOpta to settle all the outstanding options is estimated to be approximately $23.5 million based on the estimated purchase consideration. The cash payment to settle the stock options may change based on the actual consideration transferred upon consummation of the Sunrise Acquisition.

(2) Pursuant to the PSA, SunOpta is entitled to deduct from the cash purchase price the aggregate amount to be paid by SunOpta for acquisition-related transaction costs incurred by Sunrise in connection with the Sunrise Acquisition. The aggregate amount of these costs is estimated to be approximately $22.0 million. For purposes of these unaudited pro forma condensed combined financial statements, this amount has been recorded as an assumed liability by SunOpta as part of the acquisition accounting.

(3) Pursuant to the PSA, SunOpta is entitled to deduct from the cash purchase price 50% of the representations and warranties insurance policy premium to be paid by SunOpta, which is estimated to be approximately $1.6 million. For purposes of these unaudited pro forma condensed combined financial statements, the amount of the insurance premium has been included in acquisition-related transaction costs expected to be incurred by SunOpta. The representations and warranties insurance policy generally covers losses in excess of $6.8 million (up to a specified limit) to which SunOpta is contractually entitled in respect of a breach of the PSA during a policy period from July 30, 2015 until the date that is three years from the closing date of the Sunrise Acquisition.

(4) Pursuant to the PSA, SunOpta is obligated to pay an amount equal to the estimated tax benefits expected to be realized by Sunrise on the deduction for tax purposes of certain stock option and acquisition-related transaction costs.

(5) The estimated repayment of Sunrise’s Senior Credit Facility has been reflected as part of the purchase consideration as the debt is expected to be repaid concurrently with the consummation of the Sunrise Acquisition and, accordingly, will not be assumed by SunOpta as part of the Sunrise Acquisition.

(6) As all Sunrise stock options will vest upon consummation of the Sunrise Acquisition pursuant to the terms of Sunrise’s existing stock option agreements, the cash consideration expected to be paid to the option holders of approximately $23.5 million has been attributed to services prior to the Sunrise Acquisition and included as a component of the estimated purchase price in accordance with ASC 805. The cash consideration expected to be paid for stock options attributable to services prior to the Sunrise Acquisition is estimated to approximate the fair value of these options, and, accordingly, no portion of the cash consideration expected to be paid to the option holders has been reflected as compensation expense for purposes of these unaudited pro forma condensed combined financial statements.

The estimated purchase consideration reflected in these unaudited pro forma condensed combined financial statements does not purport to represent what the actual consideration transferred may be upon the consummation of the Sunrise Acquisition.

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NOTES TO THE UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

(Tabular dollar amounts expressed in thousands of U.S. dollars)

5. Estimate of Assets to be Acquired and Liabilities to be Assumed

Assuming an acquisition date of July 4, 2015, the table below presents preliminary fair value estimates of the assets to be acquired and the liabilities to be assumed by SunOpta as a result of the Sunrise Acquisition, reconciled to the estimate of total purchase consideration. SunOpta will conduct a detailed valuation of all assets acquired and liabilities assumed as of the acquisition date, at which point the fair value of the assets acquired and liabilities assumed may differ materially from those presented below.

Cash and cash equivalents	$	289
Accounts receivable		30,993
Inventories(1)		142,868
Prepaid expenses and other current assets(2)		1,918
Deferred income tax asset - current(3)		11,868
Property, plant and equipment(4)		48,372
Intangible assets(5)		165,000
Other long-term assets(2)		100
Bank indebtedness(6)		—
Accounts payable and accrued liabilities(7)		(78,766	)
Current portion of long-term debt(6)		(775	)
Long-term debt(6)		(4,665	)
Deferred income tax liability - long-term(3)		(75,214	)
Net identifiable assets acquired		241,988
Goodwill(8)		203,985
Non-controlling interest(9)		(2,186	)
Total estimated purchase consideration	$	443,787

(1) Includes a preliminary adjustment of $16.0 million to record Sunrise’s inventory at its estimated fair value. The assumptions as to the fair value of Sunrise’s inventory may change as SunOpta conducts, with the assistance of a third-party appraiser, a valuation of Sunrise’s inventory as of the consummation of the Sunrise Acquisition. The pro forma fair value adjustment to inventory is based on Sunrise’s inventory as of July 4, 2015, adjusted as follows:

• Finished goods estimated at selling price less cost of sales, holding costs and a reasonable profit allowance;

• Work in process estimated at selling price less cost of sales, outstanding production costs, holding costs and a reasonable profit allowance; and

• Raw materials estimated at cost.

(2) Reflects the elimination of the deferred financing costs related to Sunrise’s Senior Credit Facility, as the facility is expected to be terminated concurrently with the consummation of the Sunrise Acquisition.

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NOTES TO THE UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

(Tabular dollar amounts expressed in thousands of U.S. dollars)

(3) Represents the estimated deferred income tax impact of the Sunrise Acquisition, based on an estimated combined U.S. federal and state statutory tax rate of 39.5%, multiplied by the estimated fair value adjustments for assets to be acquired, excluding goodwill. In addition, the net deferred income tax liability is reduced by the estimated tax benefits expected to be realized from the settlement of the Sunrise stock options and acquisition-related transaction costs. The pro forma adjustments to record the effect of deferred income taxes were computed as follows:

Estimated fair value adjustment for inventory	$	16,000
Estimated fair value adjustment for property, plant and equipment		5,500
Estimated fair value adjustment for intangible assets		121,971
Total estimated fair value adjustments for assets to be acquired		143,471
Deferred income taxes related to the estimated fair value adjustments for assets to be acquired at 39.5% tax rate:
Inventory		(6,000	)
Property, plant and equipment		(2,000	)
Intangible assets		(48,000	)
		(56,000	)
Estimated tax benefits related to Sunrise’s deductible stock option and acquisition-related transaction costs		15,000
Sunrise’s historical deferred income tax asset		2,868
Sunrise’s historical deferred income tax liability		(25,214	)
Estimated deferred income tax liability, net	$	(63,346	)
Consists of:
Deferred income tax asset - current	$	11,868
Deferred income tax liability - long-term		(75,214	)
Estimated deferred income tax liability, net	$	(63,346	)

(4) Includes a preliminary adjustment of $5.5 million to record Sunrise’s property, plant and equipment at an estimated fair value. The preliminary fair value estimate has been derived based on market evidence for real property and recent appraisals completed for personal property, as well as a review of the assets’ remaining useful lives, current replacement costs and disposal costs. The assumptions as to the fair value of Sunrise’s property, plant and equipment may change as SunOpta conducts, with the assistance of a third-party appraiser, a valuation of the assets following the consummation of the Sunrise Acquisition.

(5) A preliminary fair value estimate of $165.0 million has been allocated to intangible assets acquired, primarily consisting of customer relationships. Amortization related to the fair value of the intangible assets, taken over an estimated weighted-average useful life of approximately 23 years, is reflected as pro forma adjustments to the unaudited pro forma condensed combined statements of operations.

Key variables in determining the fair value of customer relationships are the estimated customer attrition rate and the percentage of revenue growth attributable to existing customers. Changes to either or both of these variables could have a significant impact on the customer relationships intangible assets’ values, and changes to the estimated customer attrition rate could have a significant impact on the estimated useful lives of these assets. The expected customer attrition rate assumed in the estimate of fair value for the customer relationships intangible assets was supported by an analysis of historical attrition of Sunrise’s customers and consideration of Sunrise’s amortization policy of previously acquired customer relationships, amortization policies adopted for acquired customer relationships by other companies in similar transactions, and the contractual terms between Sunrise and its customers. The percentage of revenue growth attributable to existing customers assumed in the estimate of fair value for the customer relationships intangible assets was supported by an analysis of Sunrise’s historical and forecasted revenue growth rates by customer. A decrease or increase of 1% in the projected customer attrition rate or a decrease or increase of 10% in the percentage of revenue growth attributable to existing customers may result in a fair value increase or decrease in the customer relationships intangible assets in the range of approximately $15 to $20 million. Such change would increase or decrease the related deferred tax liability by approximately $6 to $8 million, with a resulting decrease or increase to goodwill of approximately $9 to $12 million. The assumptions as to the fair value of Sunrise’s identifiable intangible assets (including assumptions regarding customer attrition and revenue growth attributable to existing customers), the composition of the assets and useful lives assigned to the assets may change as SunOpta completes, with the assistance of a third-party appraiser, the valuation activities in connection with the consummation of the Sunrise Acquisition.

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NOTES TO THE UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

(Tabular dollar amounts expressed in thousands of U.S. dollars)

(6) Sunrise’s Senior Credit Facility is expected to be terminated concurrently with the consummation of the Sunrise Acquisition. Accordingly, borrowings under the line of credit facility of $31.3 million have been excluded from bank indebtedness, and borrowings under the term loan facility of $133.1 million have been excluded from long-term debt (including the current portion thereof).

(7) Includes estimated acquisition-related transaction costs expected to be incurred by Sunrise in connection with the acquisition of $22.0 million, of which no amount was expensed in the two quarters ended July 4, 2015.

(8) Goodwill is calculated as the difference between the preliminary estimate of the purchase consideration expected to be transferred to effect the Sunrise Acquisition and the preliminary values assigned to the assets to be acquired and liabilities to be assumed. Goodwill is not amortized. None of the goodwill is expected to be deductible for tax purposes.

(9) For purposes of these unaudited pro forma condensed combined financial statements, the carrying value of Sunrise’s non-controlling interest in Opus Foods, Mexico S.A. de C.V., its 75%-owned Mexican subsidiary, is assumed to approximate fair value based on Sunrise’s acquisition and appraisal of this subsidiary in December 2014. This assumption may change as SunOpta conducts, with the assistance of a third-party appraiser, a valuation of the net assets of the subsidiary following the consummation of the Sunrise Acquisition.

6. Reclassification Adjustments

Certain reclassifications have been made to the historical financial statements of Sunrise to conform to the financial statement presentation adopted by SunOpta. Reclassification adjustments described below to Sunrise’s historical financial statement presentation are included in the column under the heading “Reclassification Adjustments”.

(a) Reclassification of selling expenses to selling, general and administrative expenses.

(b) Reclassification of general and administrative expenses of $14.8 million for the year ended January 3, 2015 and $7.2 million and $8.1 million for the two quarters ended July 4, 2015 and July 5, 2014, respectively, to selling, general and administrative expenses.

(c) Reclassification of general and administrative expenses of $6.2 million for the year ended January 3, 2015 and $3.0 million and $3.1 million for the two quarters ended July 4, 2015 and July 5, 2014, respectively, to intangible asset amortization expense.

(d) Reclassification of transaction and transition costs to other income/expense, net included in “Earnings from continuing operation before the following.”

(e) Reclassification of other income/expense to other income/expense, net included in “Earnings from continuing operation before the following.”

(f) Reclassification of grower loans to accounts receivable.

(g) Reclassification of loan origination costs to other assets (current and long-term).

(h) Reclassification of Sunrise’s line of credit to bank indebtedness.

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NOTES TO THE UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

(Tabular dollar amounts expressed in thousands of U.S. dollars)

(i) Reclassification of accounts payable, accrued compensation and benefits, and accrued expenses to accounts payable and accrued liabilities.

(j) Reclassification of capital lease obligations to long-term debt (including the current portion thereof).

7. Pro Forma Adjustments

Pro forma adjustments described below are included in the column under the heading “Pro Forma Adjustments.”

(a) To eliminate sales of raw material frozen fruit from Sunrise to SunOpta.

(b) To adjust depreciation expense relating to the property, plant and equipment fair value increment, as follows:

	Year Ended January 3, 2015		Two Quarters Ended
			July 4, 2015		July 5, 2014
Estimated depreciation expense for fair value increment:
Machinery and equipment (estimated to be $5,500 over an estimated useful life of 10 years)	$	550	$	275	$	275
Adjustment	$	550	$	275	$	275

(c) To adjust amortization expense to eliminate Sunrise’s historical intangible asset amortization expense and to record the estimated amortization expense relating to the estimated fair value of Sunrise’s intangible assets, as follows:

	Year Ended January 3, 2015			Two Quarters Ended
				July 4, 2015			July 5, 2014
Eliminate Sunrise’s historical intangible asset amortization expense	$	(6,174	)	$	(2,958	)	$	(3,087	)
Estimated amortization expense of acquired intangible assets (estimated to be $165,000 over an estimated weighted-average useful life of 23 years)		7,600			3,800			3,800
Adjustment	$	1,426		$	842		$	713

(d) To eliminate acquisition-related transaction costs related specifically to the Sunrise Acquisition that were incurred by SunOpta in the two quarters ended July 4, 2015, as these costs do not have a continuing impact on the combined company’s financial results.

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NOTES TO THE UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

(Tabular dollar amounts expressed in thousands of U.S. dollars)

(e) To record the following interest-related adjustments:

	Year Ended January 3, 2015			Two Quarters Ended
				July 4, 2015			July 5, 2014
Eliminate interest expense recorded by Sunrise related to the Senior Credit Facility(1)	$	(7,075	)	$	(4,179	)	$	(3,090	)
Eliminate amortization of deferred financing costs by Sunrise related to the Senior Credit Facility(1)		(1,068	)		(535	)		(533	)
Estimated interest expense related to the Notes(2)		26,400			13,200			13,200
Estimated amortization of deferred financing fees incurred related to the Notes Offering(2)		930			500			460
Estimated interest expense related to estimated borrowings under SunOpta’s North American credit facilities in connection with the Sunrise Acquisition(3)		1,300			650			650
Adjustment	$	20,487		$	9,636		$	10,687

(1) Interest expense, including the amortization of related deferred financing costs, under Sunrise’s Senior Credit Facility will be eliminated as this facility is expected be repaid by SunOpta upon consummation of the Sunrise Acquisition.

(2) For purposes of these unaudited pro forma condensed combined financial statements, the Notes are assumed to bear interest at a rate of 8.0% per annum. An estimated $8.5 million of financing costs are expected to be incurred by SunOpta in connection with the Notes Offering, which will be deferred and amortized over the estimated seven-year term of the Notes using the effective interest method. Giving effect to the amortization of the deferred financing costs, the effective interest rate for the Notes is estimated to be approximately 8.5% per annum. The estimated annual interest expense related to the Notes would increase or decrease by approximately $0.4 million for each 0.125% change in the estimated interest rate.

As described in note 1, in the event that SunOpta consummates the Equity Offering for gross proceeds of less than the assumed $100.0 million, SunOpta will fund the difference by issuing unsecured, senior subordinated PIK toggle notes and/or with borrowings under the Holdco Bridge (up to a combined total of $140.0 million). For each $10 million increase in debt borrowings due to a decrease of equity financing of the same amount, the pro forma interest expense for the year ended January 3, 2015 and the two quarters ended July 4, 2015 and July 5, 2014, could be increased by up to approximately $1.2 million, $0.6 million and $0.6 million, respectively.

(3) The estimated interest rate on incremental borrowings under SunOpta’s North American credit facilities is approximately 2.0% per annum.

(f) To record an estimate of the income tax impacts of the foregoing pro forma adjustments on earnings from continuing operations before income taxes. An estimated combined U.S. federal and state statutory tax rate of 39.5% has been used. The effective tax rate of the combined company could be significantly different from the tax rate assumed for purposes of preparing these unaudited pro forma condensed combined financial statements for a variety of reasons, including available tax credits and deductions. SunOpta and Sunrise have assumed that their remaining net deferred tax assets presented in the unaudited pro forma condensed combined balance sheet as of July 4, 2015 will be utilized based on reversing temporary differences, expected future income and, if necessary, available tax planning strategies.

(g) The unaudited pro forma combined basic and diluted earnings per share for the periods presented are based on the basic and diluted weighted-average number of common shares outstanding of SunOpta after giving effect to the Equity Offering. The number of common shares to be issued pursuant to the Equity Offering is estimated to be 12,788,000 based on assumed gross proceeds from the Equity Offering of $100.0 million and an assumed offering price of $7.82 per common share (based on the closing trading price of SunOpta’s common shares on the NASDAQ Global Select Market on September 11, 2015). As the actual offering price will likely differ from the assumed offering price due to changes in market conditions and other factors, the actual number of common shares to be issued will likely be different from the number assumed in these unaudited pro forma condensed combined financial statements, and the difference may be material. SunOpta believes that price volatility of an estimated 12% in the SunOpta common share price on the closing date of the Equity Offering from the common share price assumed in these unaudited pro forma condensed combined financial statements is reasonably possible based on the volatility in the price of SunOpta’s common shares for the 30-day period preceding September 11, 2015. A change of this magnitude would increase or decrease the estimated number of common shares to be issued pursuant to the Equity Offering by up to approximately 1,800,000 common shares and, consequently, decrease or increase basic and diluted earnings per share by $0.01 or less. Actual price volatility could be greater or lesser than this estimate.

- 14 -

NOTES TO THE UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

(Tabular dollar amounts expressed in thousands of U.S. dollars)

As described in note 1, the gross proceeds from the Equity Offering may differ from the $100.0 million assumed in these unaudited pro forma condensed combined financial statements. A decrease of $10 million in the gross proceeds from the Equity Offering would decrease the number of common shares to be issued by approximately 1,280,000 shares, assuming an offering price of $7.82 per common share. A change of this magnitude would increase basic and diluted earnings per share by $0.01 or less.

(h) To eliminate accounts receivable/accounts payable balances between SunOpta and Sunrise as of July 4, 2015.

(i) To adjust inventory as of July 5, 2014 to an estimate of fair value. The combined company’s cost of goods sold will reflect the increased valuation of Sunrise’s inventory as the inventory acquired in the Sunrise Acquisition is sold, which is expected to occur within the first year post-acquisition. Because there is no continuing impact of the acquired inventory adjustment on the combined operating results, it is not included in the unaudited pro forma condensed combined consolidated statements of operations.

(j) To adjust prepaid expenses and other current assets to eliminate deferred financing costs related to Sunrise’s Senior Credit Facility.

(k) To adjust the deferred income tax asset balance to reflect the impact of the Sunrise Acquisition, as follows:

Estimated tax benefits related to Sunrise’s deductible stock option and acquisition-related transaction costs	$	15,000
Estimated deferred income taxes related to equity and bridge financing costs and acquisition-related transaction costs expected to be incurred by SunOpta		5,000
Estimated deferred income taxes related to the adjustment to record inventory at estimated fair value		(6,000	)
Adjustment	$	14,000

(l) To adjust property, plant and equipment to an estimate of fair value, as follows:

Eliminate Sunrise’s historical property, plant and equipment	$	(42,872	)
Estimated fair value of property, plant and equipment acquired		48,372
Adjustment	$	5,500

(m) To adjust goodwill to an estimate of goodwill following the Sunrise Acquisition, as follows:

Eliminate Sunrise’s historical goodwill	$	(50,907	)
Estimated goodwill following the Sunrise Acquisition		203,985
Adjustment	$	153,078

(n) To adjust intangible assets to an estimate of fair value, as follows:

Eliminate Sunrise’s historical intangible assets	$	(43,029	)
Estimated fair value of intangible assets acquired		165,000
Adjustment	$	121,971

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NOTES TO THE UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

(Tabular dollar amounts expressed in thousands of U.S. dollars)

(o) To adjust other long-term assets, as follows:

Eliminate deferred financing costs related to Sunrise’s Senior Credit Facility	$	(2,679	)
Estimated deferred financing costs related to the Notes Offering		8,500
Adjustment	$	5,821

(p) To record the repayment of outstanding amounts under the revolving line of credit facility under Sunrise’s Senior Credit Facility and to record estimated borrowings under SunOpta’s North American credit facilities in connection with the Sunrise Acquisition, as follows:

Repayment of revolving line of credit facility under Sunrise’s Senior Credit Facility	$	(31,333	)
Estimated borrowings under SunOpta’s North American credit facilities		65,487
Adjustment	$	34,154

(q) To record estimated acquisition-related transaction costs to be incurred by Sunrise and cash settlement of those costs by SunOpta in connection with the Sunrise Acquisition, as follows:

Estimated acquisition-related transaction costs to be incurred by Sunrise	$	22,000
Estimated cash settlement of Sunrise’s acquisition-related transaction costs		(22,000	)
Adjustment	$	—

(r) To record the repayment of the current portion of the term loan facility under Sunrise’s Senior Credit Facility.

(s) To record the repayment of the long-term portion of the term loan facility under Sunrise’s Senior Credit Facility and to record the estimated gross proceeds from the Notes Offering, as follows:

Repayment of term loan facility under Sunrise’s Senior Credit Facility	$	(131,770	)
Estimated gross proceeds from the Notes Offering		330,000
Adjustment	$	198,230

(t) To adjust the deferred income tax liability balance to reflect the impact of the Sunrise Acquisition, as follows:

Estimated deferred income taxes related to the estimated fair value adjustment for property, plant and equipment to be acquired	$	2,000
Estimated deferred income taxes related to the estimated fair value adjustment for intangible assets to be acquired		48,000
Adjustment	$	50,000

(u) To eliminate Sunrise’s common stock, at par value, and to record the estimated gross proceeds from the Equity Offering, net of estimated equity issuance costs, as follows:

Eliminate Sunrise’s common stock	$	(8	)
Estimated gross proceeds from the Equity Offering		100,000
Estimated equity issuance costs related to the Equity Offering, net of tax of $1,200		(4,800	)
Adjustment	$	95,192

(v) To eliminate Sunrise’s historical additional paid-in capital.

- 16 -

NOTES TO THE UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

(Tabular dollar amounts expressed in thousands of U.S. dollars)

(w) To eliminate Sunrise’s historical retained earnings and to record the estimated deferred financing costs related to the Bridge Facilities and acquisition-related transaction costs expected to be incurred by SunOpta, as follows:

Eliminate Sunrise’s historical retained earnings	$	(6,010	)
Estimated deferred financing costs related to the Bridge Facilities, net of tax of $2,000(1)		(5,000	)
Estimated acquisition-related transaction costs to be incurred by SunOpta, net of tax of $1,800(2)		(6,400	)
Adjustment	$	(17,410	)

(1) Financing costs incurred in connection with the Bridge Facilities will be deferred and amortized over the estimated term of the bridge financing. For purposes of these unaudited pro forma condensed combined financial statements, the term of the Bridge Facilities is assumed to expire with the consummation of the Equity Offering and Notes Offering. Because the financing costs incurred in connection with the Bridge Facilities are not expected to have a continuing impact on the combined company’s results, the amount was recorded as a decrease to retained earnings.

(2) Total acquisition-related transaction costs to be incurred by SunOpta are estimated to be approximately $8.5 million, of which $0.3 million was incurred and expensed in the two quarters ended July 4, 2015. Because the acquisition-related transaction costs are not expected to have a continuing impact on the combined company’s results, the amount was recorded as a decrease to retained earnings.

(x) To eliminate Sunrise’s historical accumulated other comprehensive loss.

(y) To record the cash impact of foregoing pro forma adjustments:

Estimated gross proceeds from the Notes Offering	$	330,000
Estimated gross proceeds from the Equity Offering		100,000
Estimated borrowings under SunOpta’s North American credit facilities		65,487
Total estimated purchase consideration to acquire Sunrise (see note 4)		(443,787	)
Estimated deferred financing costs related to the Notes Offering		(8,500	)
Estimated equity issuance costs related to the Equity Offering		(6,000	)
Estimated deferred financing costs related to the Bridge Facilities		(7,000	)
Estimated acquisition-related transaction costs to be incurred by SunOpta		(8,200	)
Estimated cash settlement of Sunrise’s acquisition-related transaction costs		(22,000	)
Adjustment	$	—

- 17 -

NOTES TO THE UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

(Tabular dollar amounts expressed in thousands of U.S. dollars)

8. Results of Discontinued Operations

Pro forma combined earnings from continuing operations attributable to controlling interests and pro forma combined earnings per share from continuing operations presented in the unaudited pro forma condensed combined statements of operations exclude the results of discontinued operations included in SunOpta’s historical financial statements for the year ended January 3, 2015 and the two quarters ended July 4, 2015 and July 5, 2014. The following table presents a reconciliation, in total and on a per share basis, of pro forma combined earnings from continuing operations attributable to controlling interests to pro forma combined earnings attributable to controlling interests including the results of discontinued operations as reported in SunOpta’s historical financial statements for the periods presented.

	Year Ended		Two Quarters Ended
	January 3, 2015		July 4, 2015			July 5, 2014
Pro forma combined earnings from continuing operations attributable to controlling interests	$	7,417	$	2,289		$	14,204
Earnings (loss) from discontinued operations, net of income taxes		1,754		(134	)		64
Pro forma combined earnings attributable to controlling interests	$	9,171	$	2,155		$	14,268
Pro forma combined earnings per share - basic
- from continuing operations	$	0.09	$	0.03		$	0.18
- from discontinued operations		0.02		—			—
	$	0.12	$	0.03		$	0.18
Pro forma combined earnings per share - diluted
- from continuing operations	$	0.09	$	0.03		$	0.18
- from discontinued operations		0.02		—			—
	$	0.11	$	0.03		$	0.18

- 18 -