UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~June 2827, 2015

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to _____Commission ~~_____~~File Number: 000-50367

Commission File Number: 000-50367

CRAILAR TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)

British Columbia	98-0359306
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

305-4420 Chatterton Way
Victoria, British Columbia, Canada	V8X 5J2
(Address of principal executive offices)	(Zip Code)

(250) 658-8582
Registrant’s telephone number, including area code

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [ X ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] (Do not check if a smaller reporting company) Smaller reporting company [ X ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [ X ]

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. 66,378,003 shares of common stock as of ~~May~~August 1512, 2015.

CRAILAR TECHNOLOGIES INC.

Quarterly Report On Form 10-Q For The Quarterly Period Ended ~~March~~June 2827, 2015

INDEX

PART I – FINANCIAL INFORMATION		4
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1312
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2223
Item 4.	Controls and Procedures	2223
PART II – OTHER INFORMATION		2223
Item 1.	Legal Proceedings	2223
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	2324

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. Forward-looking statements in this quarterly report include, among others, statements regarding our capital needs, business plans and expectations. Such forward-looking statements include, but are not limited to, statements with respect to the following:

	•	our need for additional financing;
	•	our ability to fully implement our business plan; and
	•	our ability to effectively manage our growth; and

Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined in our annual report on Form 10-K for the year ended December 27, 2014, this quarterly report on Form 10-Q, and, from time to time, in other reports that we file with the Securities and Exchange Commission (the “SEC”). These factors may cause our actual results to differ materially from any forward-looking statement. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The following unaudited interim financial statements of Crailar Technologies Inc. (sometimes referred to as “we”, “us” or the “Company”) are included in this quarterly report on Form 10-Q:

	Page
Consolidated Balance Sheets	5
Consolidated Statements of Operations	6
Consolidated Statements of Cash Flows	7
Notes to Consolidated Financial Statements	8

CRAiLAR ~~TECHNOLOGIES~~Technologies ~~INC~~Inc. ~~CONSOLIDATED~~Consolidated ~~BALANCE~~Balance ~~SHEETS~~ Sheets (~~Expressed~~In in thousands of US Dollars) ~~(Unaudited)~~

			March 28,			December 27,
		June 27, 2015			December 27, 2014
	Notes		2015			2014
		(Unaudited)
ASSETS
Current assets
Current
Cash and cash equivalents	$	$98	~~862~~	$	$1,196	~~1,196~~
Receivable			1,468			3,107
Accounts receivable		1,199			3,107
Inventory	2		618			449
Inventory (Note 2)		421			449
Prepaid expenses and deposits		423	~~533~~		336	~~336~~
			3,481			5,088
		2,141			5,088
Deferred debt issuance costs	5		872			967
Deferred Debt Issuance Costs (Note 5)		774			967
Property and equipment, net	3		9,547			10,013
Property and Equipment, net (Note 3)		9,499			10,013
Intangible assets, net	4		123			129
Intangible Assets, net (Net 4)		120			129
TOTAL ASSETS		$	14,023		$	16,197
	$	12,534		$	16,197
LIABILITIES
Current liabilities
Current
Accounts payable	$	$1,793	~~1,700~~	$	$2,017	~~2,017~~
Accrued liabilities		1,195	~~1,459~~		1,224	~~1,224~~
Unearned revenue		264	~~276~~		264	~~264~~
Current portion of loans payable	5		430			546
Current Portion of loans payable		479			546
Current portion of long term debt			144			161
Current portion of long term debt (Note 5)		148			161
Derivative liabilities		492	~~698~~		872	~~872~~
			4,707			5,084
		4,371			5,084
Non-current liabilities
Loans Payable		272			361
Loans payable			333			361
Long Term Debt (Note 5)		16,996			18,024
Long term debt	5		16,694			18,024
		21,639			23,469
TOTAL LIABILITIES			21,734			23,469
STOCKHOLDERS' DEFICIT
STOCKHOLDERS’ DEFICIT
Capital Stock
Capital stock	6
Authorized: unlimited common shares without par value Issued and outstanding: 66,378,003 common shares (December 27, 2014 – 66,378,003 common shares)		39,665			39,665
Authorized: unlimited common shares without par value Issued and outstanding: 66,378,003 common shares (December 27, 2014 – 66,378,003 common shares)			39,665			39,665
Additional Paid-in Capital		15,615			15,219
Additional paid-in capital			15,603			15,219
Other Comprehensive Income		1,804			1,483
Accumulated other comprehensive income			838			1,483
Deficit		(66,189	)		(63,639	)
Deficit			(63,817	)		(63,639	)
		(9,105	)		(7,272	)
			(7,711	)		(7,272	)
	$	12,534		$	16,197
		$	14,023		$	16,197

~~Nature~~The ~~and~~accompanying ~~continuance~~notes ofare ~~operations~~an ~~(Note~~integral 1)part ~~Commitments~~of these ~~(Note~~consolidated 9)financial statements.

~~The~~5 ~~accompanying notes are an integral part of these consolidated financial statements~~

5CRAiLAR Technologies Inc. Consolidated Statements of Operations (In thousands of US Dollars) (Unaudited)

CRAiLAR TECHNOLOGIES INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Expressed in thousands US Dollars except per share amounts) (Unaudited)

		Thirteen week			Thirteen week			Twenty-six week			Twenty-six week
		period ended			period ended			period ended			period ended
		June 27, 2015			June 28, 2014			June 27, 2015			June 28,2014

Revenues	$	1,804		$	743		$	3,531		$	1,178

Cost of sales
Materials and direct product costs		1,617			685			3,106			1,045
Production facility overhead costs		68			77			137			175
Facility commissioning costs		-			251			-			503
Depreciation		206			132			415			235
		1,891			1,145			3,658			1,958

Gross loss		(87	)		(402	)		(127	)		(780	)

Expenses
Marketing and promotion		57			93			184			176
Amortization and depreciation		19			26			37			50
General and administrative		830			1,179			1,864			2,414
		906			1,298			2,085			2,640

Loss before other items		(993	)		(1,700	)		(2,212	)		(3,420	)

Other income (expense):
Accretion expense		(61	)		(175	)		(120	)		(437	)
Research and development		(72	)		(64	)		(133	)		(117	)
Interest		(439	)		(524	)		(973	)		(1,064	)
Gain on debt settlement		-			234			-			234
Fair value adjustment derivative liabilities		206			264			380			264
Exchange gain (loss)		(1,013	)		-			508			-
		(1,379	)		(265	)		(338	)		(1,120	)

Net Loss		(2,372	)		(1,965	)		(2,550	)		(4,540	)

Other comprehensive income (loss)
Exchange differences on translating to presentation currency		966			(481	)		321			99
Comprehensive loss	$	(1,406	)	$	(2,446	)	$	(2,229	)	$	(4,441	)

Loss per share (basic and diluted)	$	(0.04	)	$	(0.04	)	$	(0.04	)	$	(0.09	)

Weighted average number of common shares outstanding	$	66,378,003		$	50,892,464		$	66,378,003		$	49,540,232

			Period ended
			March 28,			March 29,
	Notes		2015			2014
Revenues		$	1,727		$	435
Cost of Sales
Materials and direct production costs			1,489			360
Fixed overhead			69			98
Facility commissioning costs			-			251
Depreciation			209			104
			1,767			813
Gross loss			(40	)		(378	)
Expenses
Marketing and promotion			127			83
Amortization and depreciation			18			24
General and administrative			1,034			1,235
			(1,179	)		(1,342	)
Loss before other items			(1,219	)		(1,720	)
Other income (expenses):
Accretion expense	5		(59	)		(262	)
Interest			(534	)		(541	)
Research and development			(61	)		(53	)
Fair value adjustment derivative liabilities			174			-
Exchange gain			1,521			-
			1,041			(856	)
Net loss			(178	)		(2,576	)
Other comprehensive (loss) income
Exchange differences on translating to presentation currency			(645	)		580
Comprehensive loss		$	(823	)	$	(1,996	)
Loss per share (basic and diluted)			(0.00	)		(0.05	)
Weighted average number of common shares outstanding			66,378,003			48,188,001

The accompanying notes are an integral part of these consolidated financial statements.

~~The~~6 ~~accompanying notes are an integral part of these consolidated financial statements~~

6CRAiLAR Technologies Inc. Consolidated Statements of Cash Flows (In thousands of US Dollars) (Unaudited)

CRAiLAR TECHNOLOGIES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in thousands US Dollars)

		Twenty-six week			Twenty-six week
		period ended			period ended
		June 27, 2015			June 28, 2014

Cash flows used in operating activities
Net loss for the period	$	(2,550	)	$	(4,540	)
Adjustments to reconcile net loss to net cash from operating activities
Accretion expense		120			437
Amortization and depreciation		452			285
Amortization of deferred debt issuance costs		191			171
Fair value adjustment of derivative		(380	)		(264	)
Rent inducement		(16	)		16
Stock based compensation		396			448
Gain on settlement of debt		-			(234	)
Gain on foreign exchange		(508	)		-

Changes in working capital assets and liabilities
Increase (decrease) in accounts receivable		1,874			(929	)
Decrease (increase) in inventory		5			19
Increase in prepaid expenses		(106	)		(465	)
Increase (decrease) in accounts payable		(307	)		333
Increase (decrease) in accrued liabilities		(36	)		(217	)
Net cash used in operating activities		(865	)		(4,940	)

Cash flows used in investing activities
Purchase of property and equipment		(316	)		(1,091	)
Acquisition of intangible assets		(15	)		(23	)
Net cash flows used in investing activities		(331	)		(1,114	)

Cash flows used in financing activities
Issuance of capital stock and warrants		-			3,148
Payment of loans		(108	)		(661	)
Loans payable		-			(125	)
Proceeds from long term debt		-			2,984
Net cash flows from (used in) financing activities		(108	)		5,346

Effect of exchange rate changes on cash and cash equivalents		206			3

Decrease in cash and cash equivalents		(1,098	)		(705	)

Cash and cash equivalents, beginning		1,196			1,193

Cash and cash equivalents, ending	$	98		$	489

SUPPLEMENTAL CASH FLOW INFORMATION AND
NON-CASH FINANCING AND INVESTING ACTIVITIES:
Cash paid for interest	$	806		$	983
Capital stock issued for share issue costs	$	-		$	221

		Period ended
		March 28,			March 29,
		2015			2014
Cash flows used in operating activities
Net loss	$	(178	)	$	(2,576	)
Adjustments to reconcile net loss to net cash from operating activities
Amortization and depreciation		227			128
Amortization of debt discount		59			262
Amortization of deferred debt issuance costs		95			106
Fair value adjustment of derivative liability		(174	)		-
Rent		(8	)		(8	)
Stock-based compensation		384			71
Gain on foreign exchange		(1,521	)		-
Changes in working capital assets and liabilities
Decrease (increase) in accounts receivable		1,612			(599	)
Increase (decrease) in inventory		(208	)		32
Increase in prepaid expenses		(222	)		(208	)
Increase (decrease) in accounts payable		(419	)		234
Increase in accrued liabilities		215			344
Increase in deferred revenue		12			-
Increase in loan payable		-			6
Net cash used in operating activities		(126	)		(2,208	)
Cash flows used in investing activities
Purchase of property and equipment		(257	)		(554	)
Acquisition of intangible assets		(7	)		(20	)
Net cash flows used in investing activities		(264	)		(574	)
Cash flows provided by (used in) financing activities
Payment of loans		(31	)		-
Loans payable		-			2,136
Proceeds from private placement, net of issue costs		-			3,079
Deferred issuance costs		-			(11	)
Net cash flows provided by (used in) financing activities		(31	)		5,204
Effect of exchange rate changes on cash and cash equivalents		87			252
Change in cash and cash equivalents		(334	)		2,674
Cash and cash equivalents, beginning		1,196			1,193
Cash and cash equivalents, ending	$	862		$	3,867
SUPPLEMENTAL CASH FLOW INFORMATION AND NON-CASH FINANCING ACTIVITIES:
Capital stock issued as share issue costs	$	-		$	132
Cash paid for interest		15			6,261
Cash paid for income taxes		-			-

The accompanying notes are an integral part of these consolidated financial statements.

7

~~The~~CRAiLAR ~~accompanying~~Technologies ~~notes~~Inc. ~~are~~Notes anto ~~integral~~Consolidated Financial ~~part~~Statements ofJune ~~these consolidated~~27, ~~financial~~2015 ~~statements~~(In US Dollars) (Unaudited)

71. Basis of Presentation

~~CRAiLAR~~These ~~TECHNOLOGIES~~interim ~~INC~~unaudited consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial reporting and the rules and regulations of the Securities and Exchange Commission. ~~NOTES~~They TOdo ~~CONSOLIDATED~~not include all information and ~~FINANCIAL~~footnotes ~~STATEMENTS~~required ~~MARCH~~by 28United States generally accepted accounting principles (“U.S. GAAP”) for complete financial statement disclosure. The interim consolidated financial statements have been prepared on a consistent basis with the audited consolidated financial statements for the year ended December 27, 2014, included in the Company’s Form 10-K filed with the U.S. Securities and Exchange Commission. Operating results for the twenty-six week period ended June 27, 2015 ~~(In~~are ~~Thousands~~not USnecessarily ~~Dollars~~indicative ~~except~~of ~~per~~the results that may be expected for ~~share~~the ~~amounts)~~year ending December 26, 2015. These interim unaudited consolidated financial statements should be read in conjunction with the information included in the Company’s Form 10-K filed on April 13, 2015 with the U.S. Securities and Exchange Commission.

1In the opinion of management, the accompanying balance sheets and related statements of operations and cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with U.S. ~~Basis~~GAAP. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of ~~Presentation~~assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions.

~~These~~The ~~interim~~Company’s ~~unaudited~~ consolidated financial statements ofare prepared ~~the~~using ~~Company~~U.S. ~~have~~GAAP ~~been~~applicable ~~prepared~~to ina ~~accordance~~going ~~with~~concern, ~~generally~~which ~~accepted~~contemplates ~~accounting~~the ~~principles~~realization ~~for~~of ~~interim~~assets ~~financial reporting~~ and ~~the~~payment ~~rules~~of ~~and~~liabilities ~~regulations~~in of the ~~Securities~~ ~~and~~normal ~~Exchange~~course ~~Commission~~of business. ~~They~~The doCompany ~~not~~has ~~include~~a ~~all~~working ~~information~~capital ~~and footnotes~~deficiency ~~required~~of by$2,230,226 ~~United~~at ~~States~~June ~~generally~~27, ~~accepted~~2015 ~~accounting~~and ~~principles (“U.S.~~incurred ~~GAAP”)~~losses ~~for~~since ~~complete~~inception ~~financial~~of ~~statement~~$66,189,168 ~~disclosure. The interim~~and ~~consolidated~~further ~~financial~~losses ~~statements~~are ~~have~~anticipated ~~been~~in ~~prepared on a consistent basis with~~ the ~~audited~~development ~~consolidated~~of ~~financial~~its ~~statements~~business. ~~for~~There ~~the~~can ~~year ended December 27,~~be ~~2014,~~no ~~included~~assurance inthat the Company’s ~~Form~~will ~~10-K~~be ~~filed~~able ~~with~~to ~~the~~achieve ~~U.S.~~or ~~Securities~~maintain ~~and~~profitability ~~Exchange~~and ~~Commission.~~future ~~Operating~~operations ~~results for the thirteen-week period ended March 28, 2015~~ are ~~not~~dependent ~~necessarily~~on ~~indicative~~raising ofadditional ~~the~~funding ~~results~~from ~~that~~debt ~~may be expected for~~or ~~the~~equity ~~year ending December 26, 2015~~financings. These ~~interim~~factors ~~unaudited~~raise ~~consolidated financial~~substantial ~~statements~~doubt ~~should~~as beto ~~read in conjunction with~~ the ~~information included in the~~ Company’'s ability ~~Form~~to ~~10-K~~continue ~~filed~~as ona ~~April~~going ~~13, 2015 with the U~~concern.~~S. Securities and Exchange Commission.~~

~~Effective~~The ~~fiscal 2013, the~~ Company ~~began~~evaluated toevents ~~report~~occurring ~~quarterly results~~between on a 4-4-5 basis, with the quarter ending on the Saturday closest to the last day of each third month. In fiscal 2015, the Company's first quarter ended on March 28, 2015, the second quarter will end on June 27, 2015~~, the third~~ ~~quarter will end on September 26, 2015~~ and the ~~fourth~~date ~~quarter~~financial ~~will~~statements ~~end~~were ~~on December 26, 2015~~issued.

In the opinion of management, the accompanying balance sheets and related statements of operations and comprehensive loss and cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with U2.S. GAAP. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions.Inventory

The Company’s consolidated financial statements are prepared using U.S. GAAP applicable to a going concern, which contemplates the realization of assets and payment of liabilities in the normal course of business. The Company has incurred losses since inception of $63,817 and further losses are anticipated in the development of its business. There can be no assurance that the Company will be able to achieve or maintain profitability and future operations are dependent on raising additional funding from debt or equity financings. These factors raise substantial doubt as to the Company's ability to continue as a going concern.

		June 27, 2015		December 27, 2014
CRAiLAR fiber	$	177,546	$	97,309
Decorticated fiber		44,164		258,679
Hemp		10,484		-
Other		188,823		92,581
	$	421,017	$	448,569

~~The~~3. ~~Company~~Property ~~evaluated events occurring between March 28, 2014~~ and ~~the date financial statements were issued.~~Equipment

The Company has elected to early adopt the guidance in FASB Topic 915 and no longer provides the accounting disclosures for development stage companies. Accordingly, the figures for the period from inception to the current period are no longer provided and all references to development stage operations have been removed. Other recent accounting pronouncements with future effective dates are not expected to have an impact on the Company’s financial statements.

		Cost		Accumulated		Net Book Value		Net Book Value
				Depreciation		June 27, 2015		December 27, 2014
Automobiles	$	79,980	$	9,938	$	70,042	$	49,869
Computer Equipment		98,660		68,065		30,595		34,956
Computer Software		10,095		9,292		803		1,749
Equipment		676,521		74,654		601,867		612.079
Equipment held for sale		25,000		-		25,000		37,160
Furniture and fixtures		37,678		30,106		7,572		8,416
Leasehold Improvements		250,885		31,768		219,117		203,705
Production Equipment		6,488,287		1,074,502		5,413,785		5,929,684
Production Equipment in construction		3,124,937		-		3,124,937		3,124,937
Website development costs		129,561		124,131		5,430		10,857
	$	10,921,603	$	1,422,456	$	9,499,148	$	10,013,413

8During the twenty-six week period ended June 27, 2015, the Company recorded depreciation expense $436,163 (2014 - $267,681) of which $415,932 (2014 - $235,359) was classified as cost of sales

~~CRAiLAR~~8 ~~TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 28, 2015 (In Thousands US Dollars except per share amounts)~~

2CRAiLAR Technologies Inc. ~~Inventory~~Notes to Consolidated Financial Statements June 27, 2015(In US Dollars) (Unaudited)

		March 28, 2015		December 27, 2014
CRAiLAR fiber	$	197	$	97
Decorticated fiber		201		259
Hemp		10		-
Other		210		93
	$	618	$	449

4.	Intangible Assets

3. Property and Equipment

				Accumulated		Netbook Value		Net Book Value
		Cost		Amortization		June 27, 2015		December 27, 2014
Patents	$	182,270	$	109,294	$	72,976	$	75,345
Trademarks		110,979		87,805		23,174		24,592
License Fee		59,504		35,925		23,579		28,729
	$	352,753	$	233,024	$	119,729	$	128,666

				Accumulated		Net Book Value		Net Book Value
		Cost		Depreciation		March 28, 2015		December 27, 2014
Automobiles	$	79	$	9	$	70	$	50
Computer Equipment		98		66		32		35
Computer Software		10		9		1		2
Equipment		692		83		609		612
Equipment held for sale		37		-		37		37
Furniture and fixtures		38		30		8		8
Leasehold Improvements		240		20		220		204
Production Equipment		6,293		857		5,436		5,930
Production Equipment in
construction		3,125		-		3,125		3,125
Website development costs		130		121		9		10
	$	10,742	$	1,195	$	9,547	$	10,013

During the twenty-six week period ended June 27, 2015, the Company recorded amortization expense of $16,723 (2014 - $18,104).

45. ~~Intangible~~Long ~~Assets~~Term Debt

					Accumulated			Net book Value		Net Book Value
		June 27, 2015			December 27, 2014
		Cost			Amortization			March 28, 2015		December 27, 2014
Convertible debentures
Patents	$	173		$	100		$	73	$	75
Balance, beginning	$	15,514,592		$	16,674,686
Trademarks		110			86			24		25
Accretion expense		120,038			251,528
License Fee		59			33			26		29
Convertible debentures converted		-			17,786
	$	342		$	219		$	123	$	129
Effect of foreign exchange		(912,702	)		(1,292,836	)
Balance, ending		14,721,928			15,514,592
IKEA Loan
Balance, beginning		2,670,398			-
Loan issued		-			2,999,983
Payments		(27,643	)		-
Effect of foreign exchange		(221,365	)		(329,585	)
Balance, ending		2,421,390			2,670,398
Total long-term debt		17,143,318			18,184,990
Less: current portion		(147,642	)		(161,025	)
Long-term debt – long term portion	$	16,995,676		$	18,023,965

~~During~~Deferred ~~the~~debt ~~thirteen-week~~issuance ~~period~~costs: ~~ended March 28, 2015, the Company recorded amortization and depreciation expense of $227 (2014 - $128) of which $209 (2014 - $104) was classified as cost of sales.~~

		June 27, 2015			December 27, 2014
Balance, beginning	$	967,294		$	1,442,023
Issuance costs – cash		-			52,114
Amortization of issuance costs		(191,278	)		(428,073	)
Effect of foreign exchange		(1,697	)		(98,770	)
	$	774,319		$	967,294

~~CRAiLAR~~9 ~~TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 28, 2015 (In Thousands US Dollars except per share amounts)~~

5CRAiLAR Technologies Inc. ~~Long~~Notes ~~Term~~to ~~Debt~~Consolidated Financial Statements June 27, 2015 (In US Dollars) (Unaudited)

		March 28, 2015			December 27, 2014
Convertible debentures
Balance, beginning	$	15,515		$	16,675
Accretion expense		59			252
Convertible debentures converted		-			(18	)
Effect of foreign exchange		(1,116	)		(1,394	)
Balance, ending		14,458			15,515
IKEA Loan
Balance, beginning		2,670			-
Loan issued		-			3,000
Effect of foreign exchange		(290	)		(330	)
Balance, ending		2,380			2,670
Total long-term debt		16,838			18,185
Less: current portion		(144	)		(161	)
Long-term debt – long term portion	$	16,694		$	18,024

6.	Capital Stock

~~Deferred~~During ~~issuance~~the ~~costs:~~twenty-six week period ended June 27, 2015, the Company did not issue shares.

		March 28, 2015			December 27, 2014
Balance, beginning	$	967		$	1,442
Issuance costs – cash		-			52
Amortization of issuance costs		(95	)		(428	)
Effect of foreign exchange					(99	)
	$	872		$	967

Share purchase warrants outstanding as at June 27, 2015 are:

	Warrants		Weighted-Average Exercise Price
Warrants outstanding, December 27, 2014	22,932,373	$	0.74
Warrants issued	-	$	0.00
Warrants expired	-	$	0.00
Warrants outstanding, June 27, 2015	22,932,373	$	0.74

~~CRAiLAR~~The ~~TECHNOLOGIES~~weighted ~~INC.~~average ~~NOTES~~remaining TOcontractual ~~CONSOLIDATED~~life of outstanding ~~FINANCIAL~~warrants ~~STATEMENTS~~at ~~MARCH~~June 2827, 2015, ~~(In~~is ~~Thousands~~3.38 USyears. ~~Dollars except per share amounts)~~

6.Stock ~~Capital~~options ~~Stock~~outstanding as at June 27, 2015 are:

During the thirteen-week period ended March 28, 2015, the Company did not issue shares.

	Options			Weighted-Average Exercise Price
Options outstanding, December 27, 2014	6,769,294		$	1.79
Options granted	-		$	0.00
Options cancelled/expired	(206,418	)	$	2.10
Options outstanding, June 27, 2015	6,562,876		$	1.78
Options exercisable, June 27, 2015	6,552,876		$	1.75

~~Share~~Stock ~~purchase~~options ~~warrants~~ outstanding as at ~~March~~June 2827, 2015, are: summarized as follows:

Weighted-Average Exercise

Weighted

Warrants

Price

Weighted Average

Average

Warrants outstanding, December 27, 2014 and March 28, 2015

22,932,373

0.74

Range of Exercise

Number

Remaining Contractual

Weighted Average

Number

Exercise

Prices

Outstanding

Life (yr)

Exercise Price

Exercisable

Price

$0.54 - $3.05

6,552,876

1.94

1.78

6,552,876

1.75

~~The~~During ~~weighted~~the ~~average~~twenty-six ~~remaining~~week ~~contractual~~period ~~life~~ended June 27, 2015, options to purchase 418,600 (2014 – 467,393) common shares vested under the Company’s amended 2011 Fixed Share Option Plan. A total expense of ~~outstanding~~$396,122 (2014 - ~~warrants~~$448,407) atwas ~~March~~recorded 28as stock-based compensation, ~~2015~~of which $107,181 is(2014 ~~3.63~~- $13,468) ~~years~~was included in consulting and contract labour expense and $288,941 (2014 - $434,939) was included in salaries and benefits expense.

~~Stock~~10 ~~options outstanding as at March 28, 2015 are:~~

				Weighted-Average Exercise
	Shares			Price
Options outstanding, December 27, 2014	6,769,294		$	1.79
Options cancelled/expired	(170,417	)	$	2.33
Options outstanding, March 28, 2015	6,597,877		$	1.75

CRAiLAR Technologies Inc.
Notes to Consolidated Financial Statements
June 27, 2015
(In US Dollars)
(Unaudited)

~~Stock~~7. ~~options~~Segment ~~outstanding at March 28, 2015, are summarized as follows:~~ Information

Weighted

Weighted Average

Weighted

Average

Range of

Number

Remaining Contractual

Average Exercise

Number

Exercise

Exercise Prices

Outstanding

Life (yr)

Price

Exercisable

Price

$0.54 - $3.05

6,597,877

2.19

1.75

6,570,793

1.75

The Company currently has production facilities in North America and Europe. Operations at the North American facilities are currently suspended until the Company decides to install the necessary additional equipment to improve capacity or moves the equipment elsewhere for production.

During the thirteen-week period ended March 28, 2015, options to purchase 408,708 (2014 – 62,502) common shares vested under the Company’s amended 2011 Fixed Share Option Plan. A total expense of $384 (2014 - $71) was recorded as stock-based compensation, of which $100 (2014 - $nil) was included in consulting and contract labor expense and $284 (2014 - $71) was included in salaries and benefits expense.

For the twenty-six week period ended June 27, 2015 ( $ thousands)		North America			Europe			Total
Sales to external customers	$	13		$	3,518		$	3,531
Depreciation and amortization	$	32		$	420		$	452
Segment net income (loss)		($2,289	)		($261	)		($2,550	)
Total assets	$	7,384		$	5,150		$	12,534

For the twenty-six week period ended June 28, 2014 ( $ thousands)		North America			Europe			Total
Sales to external customers	$	27		$	1,151		$	1,178
Depreciation and amortization	$	49		$	237		$	286
Segment net income (loss)		($3,695	)		($845	)		($4,540	)
Total assets	$	18,869		$	3,949		$	22,818

~~CRAiLAR~~Of ~~TECHNOLOGIES~~the ~~INC.~~Company's ~~NOTES~~sales TOin ~~CONSOLIDATED FINANCIAL~~the ~~STATEMENTS~~period ~~MARCH~~ended 28June 27, 2015, ~~(In~~two ~~Thousands~~customers represent US97% ~~Dollars~~of ~~except~~the ~~per share amounts)~~ total.

78. ~~Segment~~Related ~~Information~~Party Transactions

~~The~~During ~~Company~~the ~~currently~~twenty-six ~~has~~week ~~production~~period ~~facilities~~ended inJune ~~North America~~27, ~~and~~2015, ~~Europe.~~$348,597 (2014 ~~Operations~~- at$534,228) ~~the~~was ~~North~~incurred ~~American~~for ~~facilities~~remuneration ~~are~~and ~~currently suspended~~$233,506 ~~until~~(2014 ~~the~~- ~~Company~~$377,264) was ~~decides~~incurred tofor ~~install~~stock-based ~~the~~compensation ~~necessary additional equipment~~ to ~~improve~~officers ~~capacity~~and ordirectors ~~moves~~of the ~~equipment elsewhere for~~ ~~production~~Company.

For the thirteen-week period
ended March 28, 2015 ( $
thousands)		North America		Europe			Total
Sales to external customers	$	8	$	1,719		$	1,727
Depreciation and amortization	$	16	$	211		$	227
Segment net income (loss)	$	1,627	$	(1,805	)	$	(178	)
Total assets	$	8,731	$	5,292		$	14,023

9.	Commitments

For the thirteen-week period
ended March 27, 2014
($ thousands)		North America			Europe			Total
Sales to external customers	$	14		$	421		$	435
Depreciation and amortization	$	25		$	103		$	128
Segment net loss	$	(2,160	)	$	(416	)	$	(2,576	)
Total assets	$	21,985		$	3,137		$	25,122

The Company is committed to lease payments totaling approximately $1,051,864 for premises under lease. The minimum lease payments over the next five years are as follows:

Of our sales in the period ended March 28, 2015, two customers represent 95% of the total.

2015	$	129,943
2016		239,486
2017		225,600
2018		236,440
2019		220,395
Total	$	1,051,864

8.11 ~~Related Party Transactions~~

~~During~~Item ~~the~~2. ~~thirteen-week~~Management’s ~~period~~Discussion ~~ended~~and ~~March~~Analysis ~~28,~~of ~~2015,~~Financial ~~$174 (2014~~Condition ~~- $217) was incurred for remuneration to officers~~ and ~~directors~~Results of ~~the Company.~~ Operations

9The following discussion and analysis of our results of operations and financial position should be read in conjunction with our consolidated financial statements and the notes thereto included elsewhere in this report. ~~Commitments~~Our consolidated financial statements are prepared in accordance with U.S. GAAP. All references to dollar amounts in this section are in U.S. dollars unless expressly stated otherwise.

~~The~~Overview ~~Company is committed to lease payments totaling approximately $1,120 for premises under lease. The minimum lease payments over the next five years are as follows:~~

2015		192
2016		243
2017		228
2018		237
2019		220
Total	$	1,120

We are focused on bringing sustainable bast fiber-based products to market that are environmentally friendly natural fiber alternatives with equivalent or superior performance characteristics to cotton, wood or fossil-fuel based fibers. Our business operations consist primarily of the production of our natural and proprietary CRAiLAR^®Flax fibers targeted at the natural yarn and textile industries, as well as the deployment of our CRAiLAR^®processing technologies in the cellulose pulp and composites industries. We believe that we offer two key opportunities for development:

12• CRAiLAR® fibers (using flax, hemp or other sustainable bast fiber) for textiles (knit and woven constructions) available in a variety of blends, textures, colors and applications; • CRAiLAR® fibers for non-woven constructions.

~~Item~~Effective 2.in ~~Management’s~~Fiscal ~~Discussion~~2013, ~~and~~we ~~Analysis~~began ofto ~~Financial~~report ~~Condition~~our first, second, third and ~~Results~~fourth quarters on a 4-4-5 basis, with each quarter ending on the Saturday closest to the last day of ~~Operations~~each third month.

~~The~~Acquisition ~~following discussion and analysis~~ of ~~our~~Production ~~results~~Facility of operations and financial position should be read in conjunction with our consolidated financial statements and the notes thereto included elsewhere in this report. Our consolidated financial statements are prepared in accordance with U.S. GAAP. All references to dollar amounts in this section are in U.S. dollars unless expressly stated otherwise.

~~Overview~~We commenced production of the first stage of the CRAiLAR® flax fiber process in the first quarter of Fiscal 2013 out of our decortication facility in Pamplico, South Carolina. Following the decortication process, the fibers were converted into CRAiLAR® Flax fiber at a third party wet processing facility with initial fiber sales beginning in the second quarter of Fiscal 2013. We suspended operations at the South Carolina facility in third quarter of 2013 until improvements have been built and installed to the front end of the production line. In December 2013, we acquired a European fiber dyeing facility with equipment similar to that used to produce CRAiLAR® Flax fiber. The transaction was initiated pursuant to an Asset Purchase Agreement dated November 6, 2013, which was amended and restated on December 13, 2013. The new facility allowed us to accelerate our timeline for establishing a company-controlled CRAiLAR® wet processing capability. Production of CRAiLAR® fibers at this facility commenced in January 2014.

WeCompletion are focused on bringing sustainable bast fiber-based products to market that are environmentally friendly natural fiber alternatives with equivalent or superior performance characteristics to cotton, wood or fossil-fuel based fibers. Our business operations consist primarily of ~~the production~~Public of our natural and proprietary CRAiLAR® Flax fibers targeted at the natural yarn and textile industries, as well as the deployment of our CRAiLAR® processing technologies in the cellulose pulp and composites industries. We believe that we offer two key opportunities for development: Offering

•On ~~CRAiLAR®~~August ~~fibers~~6, ~~(using~~2014, ~~flax~~the Company completed the public offering of 13,000,000 ~~hemp~~units orof ~~other~~the ~~sustainable~~Company ~~bast~~at ~~fiber)~~a price of $0.50 per unit for ~~textiles~~gross ~~(knit~~proceeds of $6,500,000. Each unit is comprised of one common share and ~~woven~~one ~~constructions)~~common ~~available~~share purchase inwarrant aof ~~variety~~the Company. Each warrant entitles the holder to acquire one common share of ~~blends,~~the ~~textures,~~Company ~~colors~~at ~~and~~an ~~applications;~~exercise •price ~~CRAiLAR®~~of ~~fibers~~$0.535 ~~for~~per ~~non-woven~~common ~~constructions~~share at any time prior to August 6, 2019.

~~Effective~~The inCompany ~~Fiscal~~paid ~~2013~~7% of gross proceeds of the offering to the underwriters and granted them an option (the “Over-Allotment Option”), exercisable wein ~~began~~whole or in part at any time up to ~~report~~30 ~~our~~days ~~first~~following the closing of the Offering. The Over-Allotment Option allowed the underwriters to purchase an additional 15% of the Offering solely to cover over-allotments, ~~second~~if any, ~~third~~ and for ~~fourth~~market ~~quarters~~stabilization onpurposes. aThe 4Over-~~4-5~~Allotment ~~basis~~Option entitles the underwriters to purchase a maximum of 1,950,000 ~~with~~units ~~each~~at ~~quarter~~a ~~ending~~price onof $0.50 per unit or 1,950,000 common shares at a price of $0.499 per share and/or 1,950,000 warrants at a price of $0.001 per warrant. Each warrant entitles the holder to ~~Saturday~~acquire ~~closest~~one common share of the Company at an exercise price of $0.535 per common share at any time prior to August 6, 2019. On August 6, 2014 the Over-Allotment ~~last~~Option ~~day~~was partially exercised and the underwriters purchased 1,950,000 warrants at $0.001 per warrant for proceeds of ~~each~~$1,950. ~~third~~On ~~month~~August 15, 2014, the Over –Allotment Option was exercised for the remaining 1,950,000 shares of the Company at a price of $0.499 per share for gross proceeds of $973,050. The Company paid 7% of the gross proceeds of the Over-Allotment Option to the underwriters.

~~Acquisition~~Debentures ~~of Production Facility~~

WeOn ~~commenced~~September ~~production~~20, of2012, ~~the~~we ~~first~~completed ~~stage~~the offering of ~~the~~$10.1 ~~CRAiLAR®~~million ~~flax~~(CAD$10.0 ~~fiber~~million) ~~process~~worth inof convertible debentures (the ~~first~~“September ~~quarter~~2012 Debentures”), which bear interest at a rate of ~~Fiscal~~10% ~~2013~~per ~~out~~year, payable semi-annually on March 31 and September 30 of ~~our~~each ~~decortication~~year ~~facility~~and inmature ~~Pamplico~~on September 30, ~~South Carolina~~2017. ~~Following~~The holders of the ~~decortication~~ ~~process,~~September 2012 Debentures have the ~~fibers~~option ~~were~~to convert ~~converted~~the September 2012 Debentures into ~~CRAiLAR®~~shares ~~Flax fiber~~of our common stock at a ~~third~~price of ~~party~~$2.85 ~~wet~~(CAD$2.90) ~~processing~~per ~~facility~~share ~~with~~at ~~initial~~any ~~fiber~~time ~~sales beginning~~prior into the ~~second~~maturity ~~quarter~~date. ofOn February ~~Fiscal~~25, 2013, we completed another offering of $4.9 Wemillion ~~suspended~~(CAD$5.0 million) ~~operations~~convertible atdebentures (the “February 2013 Debentures”) with ~~South~~essentially ~~Carolina~~the ~~facility~~same interms as the previously mentioned offering. Furthermore, on July 26, 2013, we completed a third ~~quarter~~offering of $3.4 million (CAD$3.5 million) worth of convertible debentures (the “July 2013 ~~until~~Debentures”) ~~improvements~~with ~~have~~an ~~been~~interest ~~built~~rate ~~and~~of ~~installed~~10% topayable ~~the~~semi-annually ~~front~~on ~~end~~March 31 and September 30 of ~~the~~each ~~production~~year, which ~~line~~mature on July 26, 2016. InOriginally, ~~December~~the holders of the July 2013, weDebentures ~~acquired~~had athe ~~European~~option ~~fiber~~to ~~dyeing~~convert ~~facility~~such ~~with~~debentures ~~equipment~~into ~~similar~~shares toof ~~that~~our ~~used~~common tostock ~~produce~~at ~~CRAiLAR®~~a ~~Flax~~price ~~fiber~~of $1.94 ~~The~~(CAD$2.00) ~~acquisition~~per ~~was~~share ~~made~~at ~~pursuant~~any time prior to the maturity andate. ~~Asset~~However, ~~Purchase~~pursuant ~~Agreement~~to the Amended and Restated Convertible Debenture Indenture dated ~~November~~December 623, 2013, ~~which~~the ~~was~~conversion ~~amended~~price ~~and~~for the July 2013 ~~restated~~Debentures onhas ~~December~~been ~~13,~~reduced ~~2013~~to $1.21 (CAD$1.25) per share of common stock. The holders ~~new~~of ~~facility~~the ~~allowed~~July us2013 Debentures also each received warrants to ~~accelerate~~purchase ~~our~~800 ~~timeline~~shares ~~for~~of ~~establishing~~our acommon ~~company-controlled~~stock ~~CRAiLAR®~~at ~~wet processing~~an ~~capability.~~exercise ~~Production~~price of ~~CRAiLAR®~~$1.21 ~~fibers~~(CAD$1.25) atper ~~this facility~~share ~~commenced~~for ineach ~~January~~$904 ~~2014.~~(CAD$1,000) ~~The~~of ~~facility~~principal ~~has~~amount aof ~~maximum~~July ~~capacity~~2013 toDebentures ~~produce~~purchased, ~~approximately~~which ~~280,000~~warrants ~~pounds~~are ofexercisable ~~CRAiLAR®~~at ~~Flax~~any ~~fiber~~time ~~per~~prior ~~week~~to ~~and~~the ~~can be~~maturity ~~expanded.~~date of the debentures.

~~Completion~~12 ~~of Public Offering~~

OnCRITICAL ~~August~~ACCOUNTING 6,POLICIES ~~2014,~~AND ~~the~~ESTIMATES Company completed the public offering of 13,000,000 units of the Company at a price of $0.50 per unit for gross proceeds of $6,500,000. Each unit is comprised of one common share and one common share purchase warrant of the Company. Each warrant entitles the holder to acquire one common share of the Company at an exercise price of $0.535 per common share at any time prior to August 6, 2019.

~~The~~Principles ~~Company paid 7%~~ of ~~gross~~Consolidation proceeds of the offering to the underwriters and granted them an option (the “Over-Allotment Option”), exercisable in whole or in part at any time up to 30 days following the closing of the Offering. The Over-Allotment Option allowed the underwriters to purchase an additional 15% of the Offering solely to cover over-allotments, if any, and for market stabilization purposes. The Over-Allotment Option entitles the underwriters to purchase a maximum of 1,950,000 units at a price of $0.50 per unit or 1,950,000 common shares at a price of $0.499 per share and/or 1,950,000 warrants at a price of $0.001 per warrant. Each warrant entitles the holder to acquire one common share of the Company at an exercise price of $0.535 per common share at any time prior to August 6, 2019. On August 6, 2014 the Over-Allotment Option was partially exercised and the underwriters purchased 1,950,000 warrants at $0.001 per warrant for proceeds of $1,950. On August 15, 2014, the Over –Allotment Option was exercised for the remaining 1,950,000 shares of the Company at a price of $0.499 per share for gross proceeds of $973,050. The Company paid 7% of the gross proceeds of the Over-Allotment Option to the underwriters.

13The consolidated financial statements for the Company’s fiscal year ended December 27, 2014 include the accounts of the Company and its six wholly-owned subsidiaries as of December 27, 2014: Crailar Inc., a Nevada incorporated company; Hemptown USA, Inc., a Nevada incorporated company; 0697872 B.C. Ltd., a British Columbia incorporated company; Crailar Fiber Technologies Inc., a British Columbia incorporated company, HTnaturals Apparel Corp, a British Columbia incorporated company and Crailar Europe NV, a Belgian corporation. All intercompany transactions and account balances have been eliminated upon consolidation.

~~Debentures~~Cash and Cash Equivalents

OnCash ~~September~~equivalents ~~20,~~consist ~~2012, we completed the offering~~ of ~~$10.1 million~~cash ~~(CAD$10.0 million) worth of convertible debentures (the “September 2012 Debentures”), which bear interest at a rate of 10% per year, payable semi-annually~~ on ~~March~~deposit 31 and ~~September~~term ~~30 of each year and mature on September~~deposits ~~30,~~with ~~2017.~~original ~~The~~maturities ~~holders~~ of ~~the~~one ~~September~~year ~~2012~~or ~~Debentures~~less ~~have~~at the ~~option to convert the September 2012 Debentures into shares of our common stock at a price of $2.85 (CAD$2.90) per share at any~~ time ~~prior to the maturity date. On February 25, 2013, we completed another offering~~ of $4issuance.9 ~~million~~As (CAD$5.0 million) convertible debentures (the “February 2013 Debentures”) with essentially the same terms as the previously mentioned offering. Furthermore, on July 26, 2013, we completed a third offering of ~~$3.4 million (CAD$3.5 million)~~June ~~worth of convertible debentures (the “July 2013 Debentures”) with an interest rate of 10% payable semi-annually on March 31 and September 30 of each year~~27, ~~which~~ ~~mature on July 26~~2015, ~~2016. Originally,~~ the ~~holders~~Company ~~of the July 2013 Debentures~~ had ~~the option to convert such debentures into shares of our common stock at a price of~~ $10.941 ~~(CAD$2.00)~~million ~~per~~in ~~share~~cash ~~at any time prior to the maturity date. However, pursuant to the Amended~~ and ~~Restated~~cash ~~Convertible Debenture Indenture dated December 23, 2013, the conversion price for the July 2013 Debentures has been reduced to $1~~equivalents.21 (CAD$1.25) per share of common stock. The holders of the July 2013 Debentures also each received warrants to purchase 800 shares of our common stock at an exercise price of $1.21 (CAD$1.25) per share for each $904 (CAD$1,000) of principal amount of July 2013 Debentures purchased, which warrants are exercisable at any time prior to the maturity date of the debentures.

~~CRITICAL~~Inventory ~~ACCOUNTING POLICIES AND ESTIMATES~~

~~Principles~~The raw flax fiber feedstock, decorticated fiber and CRAiLAR® fiber is valued at the lower of ~~Consolidation~~cost and market. All direct costs are capitalized to raw flax fiber inventory, decorticated fiber inventory and CRAiLAR® fiber. Seed inventory is valued at the lower of average cost and market. Cost represents the cost to purchase seed and/or growing cost plus any related shipping costs. Other inventories, which primarily consist of production consumables, are recorded at the lower of cost and replacement cost, which approximates net realizable value.

~~The~~Use ~~consolidated financial statements for the Company’s fiscal year ended December 27, 2014 include the accounts~~ of ~~the~~Estimates Company and its six wholly-owned subsidiaries as of December 27, 2014: Crailar Inc., a Nevada incorporated company; Hemptown USA, Inc., a Nevada incorporated company; 0697872 B.C. Ltd., a British Columbia incorporated company; Crailar Fiber Technologies Inc., a British Columbia incorporated company, HTnaturals Apparel Corp, a British Columbia incorporated company and Crailar Europe NV, a Belgian corporation. All intercompany transactions and account balances have been eliminated upon consolidation.

~~Cash~~The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and ~~Cash~~assumptions ~~Equivalents~~that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Significant areas requiring management’s estimates and assumptions are inventory costing and net realizable value, the expected future use and other impairment considerations of property and equipment, fair value of warrants, options, derivative liabilities, provision for income taxes, depreciation and financial instruments.

~~Cash~~Property ~~equivalents consist of cash on deposit~~ and ~~term~~Equipment ~~deposits with original maturities of one year or less at the time of issuance. As of March 28, 2015, the Company had $0.9 million in cash and cash equivalents.~~

~~Inventory~~Property and equipment are stated at cost and are depreciated as follows:

The raw flax fiber feedstock, decorticated fiber and CRAiLAR® fiber is valued at the lower of cost and market. All direct costs are capitalized to raw flax fiber inventory, decorticated fiber inventory and CRAiLAR® fiber. Seed inventory is valued at the lower of average cost and market. Cost represents the cost to purchase seed and/or growing cost plus any related shipping costs. Other inventories, which primarily consist of production consumables, are recorded at the lower of cost and replacement cost, which approximates net realizable value.

Automobiles	20% declining balance
Computer equipment	30% declining balance
Computer software	100% declining balance
Equipment	30% declining balance
Furniture and fixtures	20% declining balance
Production Equipment	30% declining balance
Leasehold improvements	Term of lease
Website development	100% declining balance

~~Use~~Depreciation is claimed at one-half of ~~Estimates~~the regular rate in the year of addition. No depreciation is claimed in the year of disposal.

~~The~~13 preparation of financial statements in conformity with U.S. GAAP 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 financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Significant areas requiring management’s estimates and assumptions are inventory costing and net realizable value, the expected future use and other impairment considerations of property and equipment, fair value of warrants, options, derivative liabilities, provision for income taxes, depreciation and financial instruments.

14Intangible Assets

~~Property~~Intangible assets are stated at cost and ~~Equipment~~are amortized as follows:

Property and equipment are stated at cost and are depreciated as follows:

Trademarks	5 year straight - line
License Fee	10 year straight - line
Patent	10 year straight – line

Automobiles	20% declining balance
Computer equipment	30% declining balance
Computer software	100% declining balance
Equipment	30% declining balance
Furniture and fixtures	20% declining balance
Production Equipment	30% declining balance
Leasehold improvements	Term of lease
Website development	100% declining balance

Revenue Recognition

~~Depreciation~~Revenue is ~~claimed~~recognized atwhen ~~one-half~~there is persuasive evidence of ~~the~~a sale ~~regular~~arrangement, ~~rate~~delivery into the ~~year~~ ofcustomer ~~addition.~~has Nooccurred, ~~depreciation~~the fee is ~~claimed~~fixed inand determinable, ~~the~~and ~~year~~collectability ofis ~~disposal.~~considered probable.

~~Intangible~~Foreign ~~Assets~~Currency Translation

~~Intangible~~The ~~assets~~functional ~~are~~currencies ~~stated~~of atthe ~~cost~~Company and its subsidiaries are ~~amortized~~ as follows: Crailar Technologies Inc. – US$; Crailar Inc. - US$; Hemptown USA, Inc. – US$; 0697872 B.C. Ltd. – US$; Crailar Fiber Technologies Inc. – US$; HTNaturals Apparel Corp. – US$, and Crailar Europe NV – Euro.

Trademarks	5 year straight - line
License Fee	10 year straight - line
Patent	10 year straight – line

Effective September 28, 2014 management determined that the functional currency of Crailar Technologies Inc., 0697872 B.C. Ltd. and Crailar Fiber Technologies Inc. changed from the Canadian dollar to the U.S. dollar. As a result, translation adjustments for prior periods were not removed from equity and the translated amounts for nonmonetary assets at the end of the prior period become the accounting basis for those assets in the period of the change and subsequent periods.

~~Revenue~~The ~~Recognition~~Company translates its financial statements with other than US$ functional currencies to U.S. dollars using the following method:

~~Revenue~~All isassets ~~recognized~~and ~~when~~liabilities ~~there~~are istranslated ~~persuasive~~into ~~evidence~~U.S. ofdollars aat ~~sale~~the ~~arrangement,~~exchange ~~delivery~~rate toin effect at the ~~customer~~period-end. ~~has~~Revenues ~~occurred,~~and expenses are translated throughout the ~~fee~~period isat ~~fixed~~the ~~and~~weighted average exchange rate. Exchange ~~determinable~~gains or losses from such translations are included in accumulated comprehensive income (loss), ~~and~~as ~~collectability~~a isseparate ~~considered~~component ~~probable~~of stockholders’ deficit.

Foreign ~~Currency~~currency ~~Translation~~transaction gains and losses are included in the results of operations.

~~The~~Income ~~functional~~Taxes currencies of the Company and its subsidiaries are as follows: Crailar Technologies Inc. – US$; Crailar Inc. - US$; Hemptown USA, Inc. – US$; 0697872 B.C. Ltd. – US$; Crailar Fiber Technologies Inc. – US$; HTNaturals Apparel Corp. – US$, and Crailar Europe NV – Euro.

~~Effective~~The ~~September~~Company ~~28,~~utilizes ~~2014~~the ~~management~~liability ~~determined~~method ~~that~~of ~~the~~accounting for ~~functional~~deferred ~~currency~~income oftaxes. ~~Crailar~~Under ~~Technologies~~the ~~Inc.~~liability method, ~~0697872~~deferred ~~B.C.~~income ~~Ltd.~~taxes ~~and Crailar~~are ~~Fiber~~determined ~~Technologies~~based ~~Inc.~~on ~~changed from~~ the ~~Canadian~~temporary ~~dollar~~differences tobetween the ~~U.S.~~financial ~~dollar. As~~statement aand ~~result,~~tax ~~translation~~bases ~~adjustments~~of ~~for~~assets ~~prior~~and ~~periods~~liabilities ~~were~~using ~~not~~enacted ~~removed~~tax ~~from~~rates. ~~equity~~A valuation ~~and~~allowance ~~the~~is ~~translated~~recorded ~~amounts~~when ~~for~~it ~~nonmonetary~~is ~~assets~~more atlikely ~~the~~than ~~end~~not ofthat potential the ~~prior period~~future ~~become~~tax ~~the accounting basis for those~~ assets inwill ~~the~~not ~~period~~be ~~of the change and subsequent periods~~realized.

~~The~~Comprehensive ~~Company~~Loss ~~translates its financial statements with other than US$ functional currencies to U.S. dollars using the following method:~~

~~All~~Comprehensive ~~assets~~loss ~~and~~is ~~liabilities~~the ~~are~~change ~~translated~~in ~~into~~equity ~~U.S.~~during ~~dollars~~a atperiod ~~the~~resulting ~~exchange~~from ~~rate~~transactions inand ~~effect~~other atevents, ~~the~~other ~~period-end.~~than ~~Revenues~~those ~~and~~changes ~~expenses are~~resulting ~~translated~~from ~~throughout~~transactions ~~the~~with ~~period~~owners atin ~~the~~their ~~weighted~~capacity ~~average~~as ~~exchange rate~~owners. ~~Exchange~~Other comprehensive ~~gains~~income or(loss) ~~losses~~includes ~~from~~items ~~such~~of ~~translations~~income ~~are~~and ~~included~~expense inthat ~~accumulated~~are ~~comprehensive~~not recognized in ~~income~~net (loss), as arequired ~~separate~~or ~~component~~permitted ofby ~~stockholders’~~U.S. ~~deficit~~GAAP.

~~Foreign~~Stock-based ~~currency~~Compensation ~~transaction gains and losses are included in the results of operations.~~

~~Income~~The ~~Taxes~~Company accounts for stock-based payment transactions in which an enterprise receives services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. The Company uses the Black-Scholes option-pricing model to establish the fair-value of stock-based awards.

~~The~~Earnings ~~Company~~(Loss) ~~utilizes~~Per ~~the~~Share liability method of accounting for deferred income taxes. Under the liability method, deferred income taxes are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates. A valuation allowance is recorded when it is more likely than not that potential the future tax assets will not be realized.

~~Comprehensive~~Basic ~~Loss~~and diluted earnings (loss) per share are computed using the weighted average number of shares outstanding during the year. Common stock equivalents from stock options and warrants were excluded from the calculation of net loss per share for the periods ended June 27, 2015 and June 28, 2014 as their effect is anti-dilutive.

~~Comprehensive~~14 loss is the change in equity during a period resulting from transactions and other events, other than those changes resulting from transactions with owners in their capacity as owners. Other comprehensive income (loss) includes items of income and expense that are not recognized in net loss as required or permitted by U.S. GAAP.

15Long-Lived Asset Impairment

~~Stock~~Long-lived assets of the Company are reviewed when changes in circumstances suggest their carrying value has become impaired. Management considers assets to be impaired if the carrying value exceeds the estimated discounted future projected cash flows to result from the use of the asset and its eventual disposition. If impairment is deemed to exist, the assets will be written down to fair value. Fair value is generally determined using a hierarchy of fair value methodologies under U.S. GAAP, primarily based ~~Compensation~~on a discounted cash flow analysis.

~~The~~Risk ~~Company~~Management accounts for stock-based payment transactions in which an enterprise receives services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. The Company uses the Black-Scholes option-pricing model to establish the fair-value of stock-based awards.

~~Earnings~~Currency ~~(Loss)~~risk. ~~Per~~Although ~~Share~~the Company conducts its business principally in Canada, the majority of its purchases are made in Euros while the majority of its sales are in USD. Currently, the majority of the Company’s debt is denominated in CAD currency. A 5% fluctuation in currency rates for the Company’s Euro debt of $158,000. The Company does not currently hedge its foreign currency exposure and accordingly is at risk for foreign currency exchange fluctuations.

~~Basic~~Credit ~~and~~risk. ~~diluted~~Credit ~~earnings~~risk ~~(loss)~~is ~~per~~managed ~~share~~by ~~are~~dealing with ~~computed~~customers ~~using the~~whose ~~weighted~~credit ~~average~~standing ~~number~~meets ofinternally ~~shares~~approved ~~outstanding~~policies, ~~during~~and ~~the~~by ongoing ~~year.~~monitoring ~~Common~~of ~~stock equivalents~~credit ~~from~~risk. ~~stock~~The ~~options~~risk ~~and~~in ~~warrants~~cash ~~were~~accounts ~~excluded~~is ~~from~~managed through the ~~calculation~~ use of ~~net~~a ~~loss~~major ~~per~~financial ~~share~~institution ~~for~~which has high credit quality as determined by the ~~periods~~rating ~~ended~~agencies. ~~March~~As 28of June 27, 2015, ~~and~~$392,000 ~~March~~is ~~29,~~due ~~2014~~from asa ~~their~~single ~~effect~~customer isand ~~anti-dilutive~~therefore 33% of receivables are exposed to concentration of credit risk.

~~Long-Lived~~Interest ~~Asset~~rate ~~Impairment~~risk. Approximately $255,000 of the Company’s debt bears interest at fluctuating rates. Consequentially the Company is exposed to interest rate fluctuations. The Company does not currently hedge its exposure to interest rate risk.

~~Long-lived~~Commodity ~~assets~~price ofrisk. ~~the~~Commodity ~~Company~~price ~~are~~risk ~~reviewed~~is ~~when changes in~~the ~~circumstances~~risk ~~suggest~~that ~~their~~the ~~carrying~~fair value ~~has~~of ~~become~~future ~~impaired.~~cash ~~Management considers~~flows ~~assets~~will tofluctuate bebecause ~~impaired~~of ifchanges in the ~~carrying~~market ~~value~~prices ~~exceeds~~of ~~the~~commodities. ~~estimated discounted~~The ~~future~~Company ~~projected~~is ~~cash~~exposed ~~flows~~ to ~~result~~commodity price risk as it purchases fiber feedstock from the ~~use~~flax ofproducers ~~the~~in ~~asset~~Europe. ~~and~~The ~~its~~Company ~~eventual~~purchases ~~disposition.~~the Ifshort ~~impairment~~fiber iswaste ~~deemed~~product tocalled ~~exist,~~“tow” and the ~~assets~~price fluctuates ~~will~~based ~~be written~~on ~~down~~supply. toThe ~~fair~~Company ~~value.~~has ~~Fair~~relationships ~~value~~with isseveral ~~generally~~short fiber ~~determined~~producers ~~using~~and aanticipates ~~hierarchy of~~little ~~fair~~issue ~~value~~in ~~methodologies~~obtaining ~~under~~sufficient Ufiber for its needs.S. ~~GAAP,~~The ~~primarily~~Company ~~based~~does onnot acurrently ~~discounted~~enter into futures contracts or ~~cash~~otherwise ~~flow~~hedge ~~analysis.~~its exposure to commodity price risk.

~~Risk~~Research ~~Management~~and Development

~~Currency~~Research ~~risk.~~and ~~Although~~development ~~the~~costs ~~Company conducts its business principally in Canada, the majority of its purchases~~ are ~~made~~charged into ~~Euros while~~operations ~~the majority of its sales are in USD. Currently, the majority of the~~as ~~Company’s debt is denominated in CAD currency~~incurred. A 5% fluctuation in currency rates for the Company’s Euro debt of $78,078. The Company does not currently hedge its foreign currency exposure and accordingly is at risk for foreign currency exchange fluctuations.

~~Credit~~Recent ~~risk~~Pronouncements. Credit risk is managed by dealing with customers whose credit standing meets internally approved policies, and by ongoing monitoring of credit risk. The risk in cash accounts is managed through the use of a major financial institution which has high credit quality as determined by the rating agencies. As of March 28, 2015, $984,975 is due from a single customer and therefore 63% of receivables are exposed to concentration of credit risk.

~~Interest~~There ~~rate~~are ~~risk.~~no ~~Approximately~~recent ~~$277,500~~accounting ofpronouncements ~~the Company’s~~that ~~debt bears interest at fluctuating rates. Consequentially the Company~~are isapplicable ~~exposed~~ to ~~interest~~the ~~rate fluctuations. The~~ Company ~~does not currently hedge its exposure to interest rate risk~~.

~~Commodity~~15 price risk. Commodity price risk is the risk that the fair value of future cash flows will fluctuate because of changes in the market prices of commodities. The Company is exposed to commodity price risk as it purchases fiber feedstock from the flax producers in Europe. The Company purchases the short fiber waste product called “tow” and the price fluctuates based on supply. The Company has relationships with several short fiber producers and anticipates little issue in obtaining sufficient fiber for its needs. The Company does not currently enter into futures contracts or otherwise hedge its exposure to commodity price risk.

~~Research~~RESULTS ~~and~~OF ~~Development~~ OPERATIONS

~~Research~~Non-GAAP ~~and~~Financial ~~development~~Measures ~~costs are charged to operations as incurred.~~

~~Recent~~The ~~Pronouncements.~~table below reconciles net loss to Adjusted EBITDA for the periods presented (in thousands):

There are no recent accounting pronouncements that are applicable to the Company.

		Thirteen Weeks Ended						Twenty-six Weeks Ended

		June 27, 2015			June 28, 2014			June 27, 2015			June 28, 2014
Consolidated
Net loss	$	(2,372	)	$	(1,965	)	$	(2,550	)	$	(4,541	)
Interest expense		439			524			973			1,064
Accretion expense		61			175			120			437
Depreciation and amortization		225			158			452			286
EBITDA		(1,647	)		(1,108	)		(1,005	)		(2,754	)
Stock-based compensation		12			378			396			448
Facility commissioning expense		-			251			-			503
Fair value adjustment derivative liabilities		(206	)		(264	)		(380	)		(264	)
Gain on settlement of debt		-			(234	)		-			(234	)
Exchange (gain) loss		1,013			-			(508	)		-
Rent inducement expense		(8	)		-			(16	)		-

Adjusted EBITDA	$	(836	)	$	(977	)	$	(1,513	)	$	(2,301	)

16Regulation G, “Conditions for Use of Non-GAAP Financial Measures,” and other provisions of the Exchange Act define and prescribe the conditions for use of certain non-GAAP financial information. We provide “EBITDA,” which is a non-GAAP financial measure that consists of net income before (a) interest expense; (b) accretion expense; and (c) depreciation and amortization. “Adjusted EBITDA” further adjusts EBITDA with respect to stock-based compensation, facility commissioning expense, fair value adjustment derivative liabilities, gain on settlement of debt, exchange (gain) loss, and rent inducement expense.

~~RESULTS~~We OFbelieve ~~OPERATIONS~~that this non-GAAP financial measure provides important supplemental information to management and investors. This non-GAAP financial measure reflects an additional way of viewing aspects of our operations that, when viewed with the GAAP results and the accompanying reconciliation to corresponding GAAP financial measures, provides a more complete understanding of factors and trends affecting our business and results of operations.

~~Non~~Our management uses Adjusted EBITDA as a measure of our Company’s operating performance because it assists in comparing our operating performance on a consistent basis by removing the impact of items not directly resulting from core operations. Internally, this non-GAAP ~~Financial~~measure ~~Measures~~is also used by management for planning purposes, including the preparation of internal budgets; for allocating resources to enhance financial performance; for evaluating the effectiveness of operational strategies; and for evaluating our capacity to fund capital expenditures and expand our business. We also believe that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of development stage companies. Additionally, we believe that lenders or potential lenders use Adjusted EBITDA to evaluate our ability to repay loans.

~~The~~This ~~table~~non-GAAP ~~below~~financial ~~reconciles~~measure ~~net~~is ~~loss~~used in addition to ~~Adjusted~~and ~~EBITDA~~in conjunction ~~for~~with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management strongly ~~periods~~encourages ~~presented~~investors (to review our consolidated financial statements in ~~thousands):~~their entirety and to not rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. In addition, we expect to continue to incur expenses similar to the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring.

		Thirteen Weeks Ended
		March 28, 2015			March 27, 2014
Consolidated
Net loss	$	(178	)	$	(2,576	)
Interest expense		534			541
Accretion expense		59			-
Depreciation and amortization		227			128
EBITDA		642			(1,907	)
Stock-based compensation		384			71
Facility commissioning expense		-			251
Fair value adjustment derivative liabilities		(175	)		-
Exchange gain		(1,520	)		-
Rent inducement expense		(8	)		(8	)
Adjusted EBITDA	$	(677	)	$	(1,593	)

~~Regulation G, “Conditions for Use of Non~~Thirteen-~~GAAP~~Week ~~Financial Measures,”~~Period ~~and~~Ended ~~other~~June ~~provisions of the Exchange Act define and prescribe the conditions for use of certain non-GAAP financial information. We provide “EBITDA~~27,” ~~which~~2015 isCompared a non-GAAP financial measure that consists of net income before (a) interest expense; (b) accretion expense; and (c) depreciation and amortization. “Adjusted EBITDA” further adjusts EBITDA with respect to ~~stock~~Thirteen-~~based~~Week ~~compensation~~Period ~~expense,~~Ended ~~facility~~June ~~commissioning expense~~28, ~~fair~~2014 ~~value adjustment of derivative liabilities, exchange gain and rent inducement expense.~~

We believe that this non-GAAP financial measure provides important supplemental information to management and investors. This non-GAAP financial measure reflects an additional way of viewing aspects of our operations that, when viewed with the GAAP results and the accompanying reconciliation to corresponding GAAP financial measures, provides a more complete understanding of factors and trends affecting our business and results of operations.

		Thirteen Weeks Ended
		June 27, 2015			June 28, 2014
		(amounts in thousands, except per share data)
Revenues	$	1,804		$	743
Cost of sales
Materials and direct production costs		1,617			685
Facility commissioning costs		-			251
Production facility overhead costs		68			77
Depreciation		206			132
		1,891			1,145
Gross loss		(87	)		(402	)
Expenses:
Marketing and promotion		57			93
Amortization and depreciation		19			26
General and administrative		830			1,179
		906			1,298
Loss before other items		(993	)		(1,700	)
Other income (expense):
Accretion expense		(61	)		(175	)
Interest		(439	)		(524	)
Research and development		(72	)		(64	)
Gain on debt settlement		-			234
Fair value adjustment derivative liabilities		206			264
Exchange gain (loss)		(1,013	)		-
		(1,379	)		(265	)
Net loss		(2,372	)		(1,965	)
Exchange differences on translating to presentation currency		966			(481	)
Total comprehensive loss		(1,406	)		(2,446	)
Loss per share (basic and diluted)	$	(0.04	)	$	(0.04	)

~~Our~~Revenue management uses Adjusted EBITDA as a measure of our Company’s operating performance because it assists in comparing our operating performance on a consistent basis by removing the impact of items not directly resulting from core operations. Internally, this non-GAAP measure is also used by management for planning purposes, including the preparation of internal budgets; for allocating resources to enhance financial performance; for evaluating the effectiveness of operational strategies; and ~~for~~Gross ~~evaluating~~Margins our capacity to fund capital expenditures and expand our business. We also believe that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of development stage companies. Additionally, we believe that lenders or potential lenders use Adjusted EBITDA to evaluate our ability to repay loans.

~~This~~For ~~non-GAAP~~the ~~financial~~thirteen ~~measure~~week isperiod ~~used~~ended inJune ~~addition~~27, to2015 ~~and in~~(“Second ~~conjunction~~Quarter ~~with~~2015”) ~~results~~and ~~presented~~the inthirteen ~~accordance~~week ~~with~~period ~~GAAP~~ended ~~and~~June ~~should~~28, ~~not~~2014 be(“Second Quarter ~~relied~~2014”) ~~upon~~our torevenues ~~the~~were ~~exclusion~~derived offrom ~~GAAP~~sales ~~financial~~of ~~measures.~~CRAiLAR® ~~Management~~fiber ~~strongly~~and ~~encourages~~other ~~investors~~fiber to(non-CRAiLAR) ~~review~~produced ~~our~~mainly ~~consolidated~~at ~~financial~~our ~~statements~~new inEuropean ~~their~~production ~~entirety~~facility. ~~and~~Revenue tofor ~~not~~the ~~rely~~Second onQuarter ~~any~~2015 ~~single~~was ~~financial measure~~$1.8 ~~Because non-GAAP financial measures are not standardized~~million, itan ~~may~~increase ~~not be possible to compare these~~of ~~financial~~$1.1 ~~measures~~million ~~with~~from ~~other~~Q2 ~~companies’~~2014. ~~non-GAAP~~The ~~financial measures having the same or similar names~~$1.1 Inmillion ~~addition,~~increase wein ~~expect~~revenues toin ~~continue~~the ~~to incur expenses~~Second ~~similar~~Quarter to2015 ~~the~~compared ~~non-GAAP~~with ~~adjustments~~2014 ~~described~~was ~~above,~~the ~~and~~result ~~exclusion~~ of ~~these items~~a ~~from~~118% ~~our~~percent ~~non-GAAP~~increase ~~measures~~in ~~should not be construed as an inference that~~the ~~these~~production ~~costs~~of ~~are~~CRAiLAR ~~unusual, infrequent or non-recurring~~fibers.

17Our gross loss for the Second Quarter 2015 was $87 thousand (2014: $0.4 million). Our variable margin was 12% and was impacted negatively by labor inefficiencies and product re-work caused by equipment downtime. Cost of sales is comprised of $1.6 million (2014: $0.7 million) for flax feedstock, utilities, labor, chemicals and water directly related to sales of CRAiLAR Flax fiber and the non-CRAiLAR legacy fiber dyeing business; $0.1 million (2014: $0.1 million) of facility overhead costs and $0.2 million (2014: $0.1 million) for depreciation of production equipment.

~~Thirteen-Week~~Operating ~~Period Ended March 28, 2015 Compared to Thirteen-Week Period Ended March 27, 2014~~ Expenses

		Thirteen Weeks Ended
		March 28, 2015			March 27, 2014
		(amounts in thousands, except per share data)
Revenues	$	1,727		$	435
Cost of sales
Materials and direct production costs		1,489			360
Facility commissioning costs		-			251
Production facility overhead costs		69			98
Depreciation		209			104
		1,767			813
Gross loss		(40	)		(378	)
Expenses:
Marketing and promotion		127			83
Amortization and depreciation		18			24
General and administrative		1,034			1,235
		1,179			1,342
Loss before other items		(1,219	)		(1,720	)
Other income (expense):
Accretion expense		(59	)		(262	)
Interest		(534	)		(541	)
Research and development		(61	)		(53	)
Fair value adjustment derivative liabilities		175			-
Exchange gain		1,520			-
		1,041			(856	)
Net loss		(178	)		(2,576	)
Exchange differences on translating to presentation currency		(645	)		580
Total comprehensive loss		(823	)		(1,996	)
Loss per share (basic and diluted)	$	(0.00	)	$	(0.05	)

During the Second Quarter 2015 we recorded operating expenses of $0.9 million compared to operating expenses of $1.3 million for the Second Quarter 2014, a decrease of $0.3 million or approximately 30%. Causes for the reduction are a decrease in general and administrative expenses of $0.4 million.

~~Revenue~~Marketing and ~~Gross~~promotion ~~Margins~~expenses comprised of marketing salaries and sales development costs were $0.1 million the same for the Second Quarter 2015 and 2014.

~~For~~General ~~the~~and ~~thirteen-week~~administrative ~~period~~expenses ~~ended~~for ~~March~~the ~~28,~~Second ~~2015 (“First~~ Quarter 2015”) decreased ~~and~~to ~~the~~$0.8 ~~thirteen-week period ended March 27~~million, ~~2014~~a ~~(“First~~reduction ~~Quarter 2014”) our revenues were derived from sales~~ of ~~CRAiLAR®~~$0.4 ~~fiber~~million ~~and other~~or ~~fiber~~approximately ~~(non-CRAiLAR)~~30% ~~produced mainly at our new European production~~from ~~facility~~$1.2 ~~Revenue~~million for the ~~First~~Second Quarter ~~2015~~2014. ~~was~~The ~~$1.7~~decrease ~~million,~~was anprimarily ~~increase~~caused ofby a $10.34 million ~~from~~decrease Q1in ~~2014.~~stock ~~The~~based compensation and $10.31 million ~~increase~~decrease in ~~revenues in the First~~ ~~Quarter~~salary ~~2015~~expense; ~~compared~~partially ~~with~~offset ~~2014~~by ~~was the result of~~ a ~~360~~$0.1 ~~percent~~million increase in ~~the~~consulting ~~production and sale of CRAiLAR fibers~~expense.

~~Our~~17 gross loss for the First Quarter 2015 was $40 thousand (2014: $0.4 million). Our variable margin was 14% and was impacted negatively by labor inefficiencies and product re-work caused by equipment downtime. Cost of sales is comprised of $1.5 million (2014: $0.36 million) for flax feedstock, utilities, labor, chemicals and water directly related to sales of CRAiLAR Flax fiber and the non-CRAiLAR legacy fiber dyeing business; $0.1 million (2014: $0.1 million) of facility overhead costs and $0.2 million (2014: $0.1 million) for depreciation of production equipment; and $Nil (2014: $0.2 million) to temporarily outsource the final CRAiLAR process until equipment was installed and training expenses for new employees to add more production shifts.

~~Operating~~Other ~~Expenses~~Items

~~During~~Interest expense was $0.4 million for the ~~First~~Second Quarter 2015 and we$0.5 ~~recorded~~million ~~operating~~for ~~expenses~~the ofSecond Quarter 2014. Interest expense is attributable to the convertible debenture interest, European facility loan interest, IKEA loan interest and the amortization of the deferred debt issuance costs of $0.1 million.2 Accretion expense was $0.1 million ~~compared~~from tothe ~~operating~~amortization ~~expenses~~of bonus shares issued with promissory notes and a reduction of the conversion price for convertible debentures issued July 2013 compared with $10.32 million for the ~~First~~ Second Quarter 2014. For the Second Quarter 2015 and 2014, aresearch ~~decrease~~and development ofcosts were $0.1 million orwhile ~~approximately~~the ~~8%.~~fair ~~Causes~~value ~~for~~adjustment ~~the~~of ~~reduction~~derivative ~~are~~liabilities was a ~~decrease~~gain of $0.2 million compared to $0.3 million in ~~general~~2014 ~~and~~as ~~administrative~~well ~~expenses~~as a loss in foreign exchange of $01.2 0 million compared to $0 in 2014.

~~Marketing~~Net ~~and promotion expenses comprised of marketing salaries and sales development costs were $0.1 million for the First Quarter 2015, the same as in the First Quarter 2014.~~Loss

~~General~~Our ~~and~~net ~~administrative~~loss ~~expenses~~ for the ~~First~~Second Quarter 2015 ~~decreased~~ towas $12.04 million, aor $0.04 ~~reduction~~per ofshare, compared to $0.2.0 million, or ~~approximately 18% from~~ $10.204 ~~million~~per share for the ~~First~~ Second Quarter ended June 28, 2014. The ~~decrease~~increase in loss was primarily ~~caused~~attributable ~~by a~~to a foreign exchange loss of $01.20 million ~~decrease~~while there was a reduction in ~~professional~~gross loss ~~fees;~~of $0.13 million, ~~decrease~~a inreduction ~~salary~~of general and administration expenses of $0.3 million, a reduction of accretion expense; of $0.1 million, ~~decrease~~and ina ~~facility~~reduction of interest expense ~~and~~of $0.1 ~~from~~million ~~exchange~~while ~~rates partially~~in ~~offset~~2014 bythere was a gain on settlement of debt of $0.3 million ~~increase in stock-based compensation~~.

18For the period ended June 27, 2015, the weighted average number of shares outstanding was 66,378,003 compared to 50,892,464 for the period ended June 28, 2014.

~~Other~~Twenty-Six ~~Items~~Week Period Ended June 27, 2015 Compared to Twenty-Six Week Period Ended June 28, 2014

Interest expense was $0.5 million for the First Quarter 2015 and 2014. Interest expense is attributable to the convertible debenture interest, European facility loan interest, IKEA loan interest, early pay discount and the amortization of the deferred debt issuance costs of $0.1 million. Accretion expense was $0.1 million from the amortization of bonus shares issued with promissory notes and a reduction of the conversion price for convertible debentures issued July 2013 compared with $0.3 million for the First Quarter 2014. For First Quarter 2015 and 2014, research and development costs were $0.1 million while the fair value adjustment of derivative liabilities was a gain of $0.2 compared to $0 in 2014 as well as a gain in foreign exchange of $1.5 million compared to $0 in 2014.

		Twenty-Six Weeks Ended
		June 27, 2015			June 28, 2014
		(amounts in thousands, except per share data)
Revenues	$	3,531		$	1,178
Cost of sales
Materials and direct production costs		3,106			1,045
Facility commissioning costs		-			503
Production facility overhead costs		137			175
Depreciation		415			235
		3,658			1,958
Gross loss		(127	)		(780	)
Expenses:
Marketing and promotion		184			176
Amortization and depreciation		37			50
General and administrative		1,864			2,414
		2,085			2,640
Loss before other items		(2,212	)		(3,420	)
Other income (expense):
Accretion expense		(120	)		(437	)
Interest		(973	)		(1,064	)
Research and development		(133	)		(117	)
Gain on debt settlement		-			234
Fair value adjustment derivative liabilities		380			264
Exchange gain		508			-
		(338	)		(1,120	)
Net loss		(2,550	)		(4,540	)
Exchange differences on translating to presentation currency		321			99
Total comprehensive loss		(2,229	)		(4,441	)
Loss per share (basic and diluted)	$	(0.04	)	$	(0.09	)

~~Net~~18 ~~Loss~~

~~Our~~Revenue net loss for the First Quarter 2015 was $0.2 million, or $0.00 per share, compared to $2.6 million, or $0.05 per share for the thirteen-week period ended March 27, 2014. The reduction in loss was primarily attributable to the reduction in gross loss of $0.3 million and aGross ~~reduction~~Margins ~~of general and administration expenses of $0.2 million, a gain in the fair value of derivative liabilities of $0.2 million and a gain in foreign exchange of $1.5 million.~~

For the twenty-six week period ended ~~March~~June 2827, 2015, (“First Half of 2015”) and the ~~weighted~~twenty-six ~~average~~week period ended June 28, 2014 (“First Half of ~~number~~2014”) our revenues were derived from sales of ~~shares~~CRAiLAR® ~~outstanding~~fiber and other fiber (non-CRAiLAR) produced mainly from our European production facility. Revenue for the First Half of 2015 was 66$3.5 million,~~378,003~~ ~~compared~~an toincrease ~~48,188,001~~of ~~for~~$2.3 million from the First Half of 2014. The $2.3 million increase in revenues in the First ~~period~~Half ~~ended~~of ~~March~~2015 ~~27,~~compared with 2014 was the result of a 218% percent increase in the production of CRAiLAR fibers.

~~LIQUIDITY~~Our ~~AND~~gross ~~CAPITAL~~loss ~~RESOURCES~~for the First Half of 2015 was $0.1 million (2014: $0.8 million). Our variable margin was 13% and was impacted negatively by labor inefficiencies and product re-work caused by equipment downtime. Cost of sales is comprised of $3.1 million (2014: $1.0 million) for flax feedstock, utilities, labor, chemicals and water directly related to sales of CRAiLAR Flax fiber and the non-CRAiLAR legacy fiber dyeing business; $0.1 million (2014: $0.2 million) of facility overhead costs and $0.4 million (2014: $0.2 million) for depreciation of production equipment.

~~First~~Operating ~~Quarter 2015 Compared to Fiscal Year Ended December 27, 2014~~ Expenses

		2015			2014
		(in thousands)
Cash and cash equivalents	$	862		$	1,196
Working capital	$	(1,226	)	$	4
Total assets	$	14,023		$	16,197
Total liabilities	$	21,734		$	23,469
Shareholders’ equity (deficit)	$	(7,711	)	$	(7,272	)

During the First Half of 2015 we recorded operating expenses of $2.1 million compared to operating expenses of $2.6 million for the First Half of 2014, a decrease of $0.5 million or approximately 21%. The primary cause for the reduction was a decrease in general and administrative expenses of $0.5 million.

~~The~~Marketing ~~Company has historically relied on equity financings,~~ and ~~more~~ ~~recently~~promotion ~~from~~expenses ~~the~~comprised ~~sale~~ of ~~convertible debentures to fund its operations. On~~marketing ~~August~~salaries ~~15,~~and ~~2014~~sales ~~the~~development ~~Company~~costs ~~completed~~were ~~a “Follow On” equity financing with gross proceeds of~~ $1.0 ~~million~~. ~~On August 6, 2014 the Company completed an equity financing with gross proceeds of $6.5 million. On June~~ 2, ~~2014 the Company completed an equity financing for settlement of $0.9~~ million ~~in debts. On March 20~~, ~~2014,~~ the ~~Company~~same completed an equity financing with gross proceeds of $3.1 million. On December 20, 2013, the Company completed an equity financing with gross proceeds of $1.9 million (CAD$2.0 million). On December 19, 2013, but having an effective date of November 29, 2013, we entered into a loan agreement to borrow up to $2.9 million (€2.2 million, approximately CAD$3.2 million). The Company has drawn on the loan $2.9 million (€2.2 million), which was used for ~~capital~~ ~~expenditures for~~ the ~~European processing facility and general working~~First ~~capital.~~Half ~~In February 2013, the Company completed a convertible debt financing for gross proceeds~~ of ~~$4.9~~2015 million (CAD$5.0 million). In July 2013, the Company completed an additional convertible debt financing for gross proceeds of $3.4 million (CAD$3.5 million). In September 2012, the Company completed a convertible debt financing for gross proceeds of $10.1 million (CAD$10.0 million). The Company expects to fund future operations and expansion from the proceeds of this offering, through bank debt, government loan programs, customer financing, lease programs, additional equity and debt financings, as well as cash generated from operations2014.

~~Net~~General ~~Cash~~and ~~Used~~administrative expenses for the First Half of 2015 decreased to $1.9 million, a reduction of $0.5 million or approximately 21% from $2.4 million for the First Half of 2014. The decrease was primarily caused by a $0.1 million decrease in ~~Operating~~stock ~~Activities~~based compensation a $0.3 million decrease in salary expense and a decrease in professional fees of $0.1 million.

~~Net~~Other ~~cash~~Items flows used in operating activities for the First Quarter of 2015 were $0.1 million compared with $2.2 million for the First Quarter of 2014. Cash flows used in operations for the First Quarter of 2015 consisted primarily of a net loss of $0.2 million offset by the following items: amortization and depreciation of $0.2 million (2014: $0.1 million), primarily related to production equipment in Europe; amortization of debt discount of $0.1 million (2014: $0.3) related to the beneficial conversion feature of the promissory notes and amortization of the bonus shares issued pursuant to the promissory note; amortization of deferred debt issuance costs of $0.1 million (2014: $0.1 million); fair value adjustment of derivative liability gain of $0.2 million (2014: $Nil), the gain in 2015 related to the decrease in the value of the warrant liability; rent of ($0.0 million) (2014: $0.0 million) related to the lease deferral at the South Carolina decortication facility; stock-based compensation of $0.4 million (2014: $0.1 million) was greater as more options vested in 2015 than in 2014; a gain on foreign exchange of $1.5 million (2014: $Nil); decrease in accounts receivable of $1.6 million due to timing of shipments of Crailar sales in Europe, (2014: increase of $0.6 million); a decrease in inventory of $0.2 million (2014: $0.0 million); an increase in prepaid expenses of $0.2 million (2014: $0.2 million) mostly due to the timing of insurance, financing and listing costs; a decrease in accounts payable of $0.4 million (2014: an increase of $0.2 million); an increase in accrued liabilities of $0.2 million (2014: $0.3 million) mostly related to debenture interest.

19Interest expense was $1.0 million for the First Half of 2015 and $1.1 million for the First Half of 2014. Interest expense is attributable to the convertible debenture interest, European facility loan interest, IKEA loan interest and the amortization of the deferred debt issuance costs of $0.2 million. For the First Half of 2015 accretion expense was $0.1 million from the amortization of bonus shares issued with promissory notes and a reduction of the conversion price for convertible debentures issued July 2013 compared with $0.4 million of accretion expense for the First Half of 2014. For the First Half of 2015 and 2014, research and development costs were $0.1 million while the fair value adjustment of derivative liabilities was a gain of $0.4 compared to $0.3 million in 2014 as well as a gain in foreign exchange of $0.5 million compared to $0 in 2014.

Net ~~Cash Used in Investing Activities~~Loss

~~Net~~Our ~~cash~~net ~~flows~~loss ~~used in investing activities~~ for the First ~~Quarter~~ Half of 2015 ~~were~~was $02.36 million, or $0.04 per share, compared to $04.65 million, or $0.09 per share for the First ~~Quarter~~ Half of 2014. ~~Cash~~The ~~flows~~reduction ~~used~~in loss was primarily attributable to the reduction in gross ~~investing~~loss ~~activities~~of ~~consisted~~$0.7 ~~primarily~~million and a reduction of general and administration ~~the~~expenses ~~acquisition~~of $0.5 million, a reduction in accretion expense of ~~equipment~~$0.3 ~~for~~million, an increase in the ~~European~~gain ~~production~~in ~~facility~~the fair value of derivative liabilities of $0.31 million and a gain in foreign exchange of $0.5 million, (while in the First Half of 2014: there $was a gain on debt settlement of $0.62 million) .

~~Net~~For ~~Cash~~the ~~Provided~~period byended ~~Financing~~June ~~Activities~~27, 2015, the weighted average number of shares outstanding was 66,378,003 compared to 49,540,232 for the period ended June 28, 2014.

~~Cash~~19 ~~flows used by financing activities for the First Quarter of 2015 totaled $0.0 million compared to $5.2 million gained for the First Quarter of 2014.~~

~~Effect~~LIQUIDITY ofAND ~~Exchange~~CAPITAL ~~Rate~~RESOURCES

~~The effect of exchange rates on cash resulted in an unrealized gain of $87,000 for the~~ First ~~Quarter~~Half of 2015, asCompared ~~compared~~to ~~with~~Fiscal anYear ~~unrealized gain~~Ended ~~of $252~~December 27,~~000~~ ~~for the First Quarter of~~ 2014.

MATERIAL COMMITMENTS

		June 27, 2015			December 27, 2014
		(in thousands)
Cash and cash equivalents	$	98		$	1,196
Working capital (deficiency)	$	(2,230	)	$	4
Total assets	$	12,534		$	16,197
Total liabilities	$	21,639		$	23,469
Shareholders’ equity (deficit)	$	(9,105	)	$	(7,272	)

~~Debt~~The ~~Offerings~~Company has historically relied on equity financings, and more recently from the sale of convertible debentures to fund its operations. On August 15, 2014 the Company completed a “Follow On” equity financing with gross proceeds of $1.0 million. On August 6, 2014 the Company completed an equity financing with gross proceeds of $6.5 million. On June 2, 2014 the Company completed an equity financing for settlement of $0.9 million in debts. On March 20, 2014, the Company completed an equity financing with gross proceeds of $3.1 million. On December 20, 2013, the Company completed an equity financing with gross proceeds of $1.9 million (CAD$2.0 million). On December 19, 2013, but having an effective date of November 29, 2013, we entered into a loan agreement to borrow up to $2.9 million (€2.2 million, approximately CAD$3.2 million). The Company has drawn on the loan $2.9 million (€2.2 million), which was used for capital expenditures for the European processing facility and general working capital. In February 2013, the Company completed a convertible debt financing for gross proceeds of $4.9 million (CAD$5.0 million). In July 2013, the Company completed an additional convertible debt financing for gross proceeds of $3.4 million (CAD$3.5 million). In September 2012, the Company completed a convertible debt financing for gross proceeds of $10.1 million (CAD$10.0 million). The Company expects to fund future operations and expansion from the proceeds of this offering, through bank debt, government loan programs, customer financing, lease programs, additional equity and debt financings, as well as cash generated from operations.

WeNet ~~completed~~Cash ~~the~~Used ~~following three convertible debt offerings~~ in ~~2012~~ ~~and~~Operating 2013: (i) the September 2012 Debentures with gross proceeds of $10.1 million (CAD$10.0 million) on September 20, 2012; (ii) the February 2013 Debentures with gross proceeds of $4.9 million (CAD$5.0 million) on February 25, 2013; and (iii) the July 2013 Debentures with gross proceeds of $3.4 million (CAD$3.5 million) on July 26, 2013. The September 2012 Debentures mature on September 30, 2017 and bear interest at a rate of 10% per year, payable semi-annually on March 31 and September 30 of each year, starting March 31, 2013. The February 2013 Debentures mature on September 30, 2017 and bear interest at a rate of 10% per year, payable semi-annually on March 31 and September 30 of each year, starting on September 30, 2013. The February 2013 Debentures are ranked subordinate to the September 2012 Debentures. Non-Canadian resident holders of the February 2013 Debentures will receive additional interest equal to the amount of the withholding taxes paid by us for Canadian tax purposes. The July 2013 Debentures mature on July 26, 2016 and bear interest at a rate of 10% per year, payable semi-annually on March 31 and September 30 of each year, commencing on September 30, 2013. The July 2013 Debentures are secured by production equipment and fixtures located at our South Carolina facility that are different from the production equipment and fixtures at the South Carolina facility that were used to secure the September 2012 Debentures and the February 2013 Debentures. In the event we complete one or more equity financings between July 26, 2013 and July 26, 2016 with gross proceeds of at least an aggregate of $19.4 million (CAD$20.0 million), we must, subject to providing no less than 60 days prior notice to each holder of the July 2013 Debentures, redeem the July 2013 Debentures in whole at face value plus all accrued and unpaid interest thereon. The initial conversion rates of each of the September 2012 Debentures, the February 2013 Debentures and the July 2013 Debentures were $2.85 (CAD$2.90), $2.85 (CAD$2.90) and $1.94 (CAD$2.00), respectively, and are subject to anti-dilution provisions. Activities

~~Holders~~Net cash flows used in operating activities for the First Half of 2015 were $0.9 million compared with $4.9 million for the ~~September~~First ~~2012~~Half ~~Debentures~~of ~~and~~2014. Cash flows used in operations for the ~~February~~First ~~2013~~Quarter of 2015 consisted primarily ~~Debentures~~of ~~have~~a net loss of $2.6 million offset by the ~~option~~following toitems: ~~convert~~amortization ~~their~~and depreciation ~~debentures~~of ~~into~~$0.5 ~~common~~million ~~stock~~(2014: at$0.3 amillion), primarily related to ~~price~~production equipment in Europe; accretion expense of $20.851 million (~~CAD~~2014: $20.904) related ~~per~~to ~~share~~the beneficial conversion feature of ~~common~~the ~~stock~~promissory atnotes ~~any~~and amortization ~~time~~of ~~prior~~the bonus shares issued pursuant to ~~their~~the promissory note; ~~respective~~amortization ~~maturity~~of ~~date~~deferred debt issuance costs of $0.2 Wemillion ~~may~~(2014: ~~redeem~~$0.2 million); fair value adjustment of derivative liability gain of ($0.4 million) (2014: ($0.3 million)), related to the ~~September~~decrease ~~2012~~in ~~Debentures~~the ~~and~~value of the warrant ~~February~~liability; ~~2013~~rent ~~Debentures~~of ~~after~~($0.0 ~~September~~million) ~~30,~~(2014: ~~2015~~$0.0 ~~provided~~million) ~~that~~related to the ~~market price~~lease deferral at the ~~time~~South Carolina decortication facility; stock-based compensation of $0.4 million (2014: $0.4 million); a gain on foreign exchange of $0.5 million (2014: $nil); an increase in accounts receivable of $1.9 million due to timing of shipments of Crailar sales in Europe in the ~~redemption~~First ~~notice~~Quarter is2015, ~~not~~(2014: ~~less~~a decrease ~~than~~of ~~125%~~($0.9 million)); an increase in inventory of $0.0 million (2014: $0.0 million); an increase in prepaid expenses of ($0.1 million) (2014: ($0.5 million)) mostly due to the ~~conversion~~timing of insurance, financing and listing costs; a ~~price~~decrease in accounts payable of ($0.3 million) (2014: an increase $0.3 million); a decrease in accrued liabilities of $0.0 million (2014: $0.2 million) mostly related to debenture interest.

InNet ~~accordance~~Cash ~~with~~Used the conditions of the IKEA Loan (defined below), we approached the debenture holders (the “Debentureholders”) of the July 2013 Debentures about releasing their security over certain assets held by our subsidiary, CRAiLAR Inc., having an acquisition cost of $1.3 million, which form a portion of the assets securing the July 2013 Debentures pursuant to the Guaranty and Security Agreement (the “Guaranty”) between CRAiLAR Inc. (the “Guarantor”) and Computershare Trust Company of Canada (the “Trustee”), dated July 26, 2013, as set forth in ~~Schedule~~Investing “A” to the Guaranty, to be used as separate security for the IKEA Loan to us. As consideration for such alteration to the secured assets, the conversion price of the July 2013 Debentures was reduced from $1.94 (CAD$2.00) per share to $1.21 (CAD$1.25) per share. On December 23, 2013, the Trustee and us entered into an Amended and Restated Convertible Debenture Indenture which reflects the modification and alteration of the rights of the Debentureholders and the Trustee against us with respect to (i) the secured assets to now only include those specific assets held by the Guarantor as set forth in Schedule “F” to the Amended and Restated Convertible Debenture Indenture having an acquisition cost of $3.9 million, and (ii) the reduction of the conversion price of the July 2013 Debentures from $1.94 (CAD$2.00) per share to $1.21 (CAD$1.25) per share. In addition, on the same date, the Guarantor and the Trustee entered into an Amended and Restated Guaranty and Security Agreement, which reflects the modification and alteration with respect to the secured assets as discussed above.Activities

20Net cash flows used in investing activities for the First Half of 2015 were $0.3 million, compared to $1.1 million for the First Half of 2014. Cash flows used in investing activities consisted primarily of the acquisition of equipment for the European production facility of $0.3 million (2014: $1.1 million).

~~Debt~~Net Cash Used in or Provided by Financing Activities

OnCash ~~December~~flows 1,used ~~2013,~~in wefinancing ~~purchased~~activities ~~certain~~for ~~assets~~the ofFirst aHalf ~~European~~of ~~fiber~~2015 ~~dyeing~~totaled ~~facility. We acquired these assets by assuming an aggregate of~~ ($10.2 1 million) ofcompared ~~the seller’s debts, which we have agreed~~ to ~~repay on the earlier of their respective due dates and December 1, 2018~~$5.3 Onmillion ~~December~~provided ~~13,~~by ~~2013,~~financing ~~we entered~~activities ~~into an amended asset purchase agreement~~ for ~~such assets, which replaced~~ the ~~initial~~First ~~asset purchase agreement and provides that the title to and economic~~Half ~~risk in respect~~ of ~~the~~2014. ~~environmental~~In ~~permit and~~ the ~~employees~~first ~~passed~~half ~~to us on December 1, 2013, however, the title to the equipment at the facility shall only pass to us upon full payment~~ of ~~the foregoing assumed indebtedness of the seller~~2015, ~~notwithstanding~~ the ~~fact~~Company ~~that~~repaid ~~physical~~loans ~~possession~~$0.1 ~~and~~million ~~economic risk of~~(2014: ~~all assets of the acquired facility passed to us on December 1, 2013~~ $0.8 ~~We have reached an oral agreement with the seller to lease the real property for the facility and are in the process of formalizing that oral agreement~~million).

OnEffect ~~December 19, 2013, but having an effective date~~ of ~~November 29,~~Exchange 2013, we entered into a loan agreement (the “Loan Agreement”) with IKEA Supply AG (“IKEA”), whereby IKEA agreed to loan us $3.0 million (€2.2 million, approximately CAD$3.2 million) (the “IKEA Loan”) having a term until June 25, 2016 and bearing interest at a rate of 1.9% per annum. As security for the IKEA Loan, IKEA required that the IKEA Loan be secured by assets purchased with the proceeds of the IKEA Loan, as well as a portion of the secured assets used to secure the July 2013 Debentures. The proceeds from the IKEA Loan are designated for the installation of equipment to support and expand our European production facility and for working capital to fulfill IKEA orders. During the First Three Quarters of 2014 the Company received $2,906,985 (€2,200,000) pursuant to the loan agreement.Rate

WeThe ~~entered~~effect ~~into~~of ~~the~~exchange ~~following~~rates ~~loan~~on ~~arrangements~~cash ~~with~~resulted ~~each~~in ofan unrealized gain of $0.2 million for the ~~following~~First ~~directors:~~Half ~~Jason~~of ~~Finnis~~2015, ~~Kenneth~~as ~~Barker~~compared ~~and~~with ~~Robert~~an ~~Edmunds:~~unrealized gain of $3 thousand for the First Half of 2014.

• Finnis. Pursuant to a convertible promissory note, dated for reference October 11, 2013, Mr. Finnis granted us a loan in the principal amount of $96,180 (CAD$100,000) bearing interest at a rate of 12% per annum and due on December 11, 2013. On November 7, 2013, we repaid to Mr. Finnis $47,885 (CAD$50,000), such that a principal amount of $47,885 (CAD$50,000) remained due and payable on the loan. Pursuant to a loan extension agreement, dated for reference December 18, 2013, Mr. Finnis and we agreed to extend the term for repayment of the loan and interest thereon until the earlier of (i) December 20, 2014 and (ii) such time as we complete our next public offering of registered securities by way of a registration statement on Form S-1 of not less than $2.8 million (CAD$3.0 million) in gross proceeds to us. We repaid this loan and interest thereon in full in April 2014. • Barker. Pursuant to a convertible promissory note, dated for reference October 11, 2013, Mr. Barker granted us a loan in the principal amount of $50,000 bearing interest at a rate of 12% per annum and due and payable on December 11, 2013. Pursuant to a loan extension agreement, dated for reference December 18, 2013, Mr. Barker and we agreed to extend the term for repayment of the loan and interest thereon until the earlier of (i) December 20, 2014 and (ii) such time as we complete our next public offering of registered securities by way of a registration statement on Form S-1 of not less than $2.8 million (CAD$3.0 million) in gross proceeds to us. We repaid this loan and interest thereon in full in April 2014. • Edmunds. Pursuant to demand convertible promissory notes, dated for reference October 11, 2013 and December 4, 2013, respectively, Mr. Edmunds granted us loans in the aggregate principal amount of $509,624 (CAD$545,000) bearing interest at a rate of 20% per annum. Pursuant to a loan extension agreement, dated for reference December 18, 2013, Mr. Edmunds and we agreed to extend the term for repayment of the loan and interest thereon until the earlier of (i) December 20, 2014 and (ii) such time as we complete our next public offering of registered securities by way of a registration statement on Form S-1 of not less than $2.8 million (CAD$3.0 million) in gross proceeds to us. As consideration for the extension, we issued to Mr. Edmunds 181,666 shares of our common stock at a deemed value of $0.56 (CAD$0.60) per share. We repaid this loan and interest thereon in full in April 2014.

WeMATERIAL ~~are~~COMMITMENTS ~~committed to annual debt and debenture interest payments over the next five years as follows (in thousands):~~

2015	$	1,246
2016		1,502
2017		976
2018		13
2019		12
Total	$	3,749

Debt Offerings

~~Annual~~We ~~Leases~~completed the following three convertible debt offerings in 2012 and 2013: (i) the September 2012 Debentures with gross proceeds of $10.1 million (CAD$10.0 million) on September 20, 2012; (ii) the February 2013 Debentures with gross proceeds of $4.9 million (CAD$5.0 million) on February 25, 2013; and (iii) the July 2013 Debentures with gross proceeds of $3.4 million (CAD$3.5 million) on July 26, 2013. The September 2012 Debentures mature on September 30, 2017 and bear interest at a rate of 10% per year, payable semi-annually on March 31 and September 30 of each year, starting March 31, 2013. The February 2013 Debentures mature on September 30, 2017 and bear interest at a rate of 10% per year, payable semi-annually on March 31 and September 30 of each year, starting on September 30, 2013. The February 2013 Debentures are ranked subordinate to the September 2012 Debentures. Non-Canadian resident holders of the February 2013 Debentures will receive additional interest equal to the amount of the withholding taxes paid by us for Canadian tax purposes. The July 2013 Debentures mature on July 26, 2016 and bear interest at a rate of 10% per year, payable semi-annually on March 31 and September 30 of each year, commencing on September 30, 2013. The July 2013 Debentures are secured by production equipment and fixtures located at our South Carolina facility that are different from the production equipment and fixtures at the South Carolina facility that were used to secure the September 2012 Debentures and the February 2013 Debentures. In the event we complete one or more equity financings between July 26, 2013 and July 26, 2016 with gross proceeds of at least an aggregate of $19.4 million (CAD$20.0 million), we must, subject to providing no less than 60 days prior notice to each holder of the July 2013 Debentures, redeem the July 2013 Debentures in whole at face value plus all accrued and unpaid interest thereon. The initial conversion rates of each of the September 2012 Debentures, the February 2013 Debentures and the July 2013 Debentures were $2.85 (CAD$2.90), $2.85 (CAD$2.90) and $1.94 (CAD$2.00), respectively, and are subject to anti-dilution provisions.

WeHolders ~~are~~of ~~committed~~the September 2012 Debentures and the February 2013 Debentures have the option to ~~current~~convert ~~annual~~their ~~lease~~debentures ~~payments~~into ~~totaling~~common stock at a price of $12.~~1 million~~85 ~~for~~(CAD$2.90) ~~all~~per share of ~~our~~common ~~premises~~stock ~~under~~at ~~lease~~any time prior to their respective maturity date. ~~Approximate~~We ~~minimum~~may ~~lease~~redeem ~~payments~~the September 2012 Debentures and the ~~over~~February 2013 Debentures after September 30, 2015 provided that the ~~next~~market ~~five~~price at ~~years~~the ~~are~~time asof ~~follows~~the ~~(in~~redemption ~~thousands):~~notice is not less than 125% of the conversion price.

2015	$	192
2016		243
2017		228
2018		237
2019		220
Total	$	1,120

In accordance with the conditions of the IKEA Loan (defined below), we approached the debenture holders (the “Debentureholders”) of the July 2013 Debentures about releasing their security over certain assets held by our subsidiary, CRAiLAR Inc., having an acquisition cost of $1.3 million, which form a portion of the assets securing the July 2013 Debentures pursuant to the Guaranty and Security Agreement (the “Guaranty”) between CRAiLAR Inc. (the “Guarantor”) and Computershare Trust Company of Canada (the “Trustee”), dated July 26, 2013, as set forth in Schedule “A” to the Guaranty, to be used as separate security for the IKEA Loan to us. As consideration for such alteration to the secured assets, the conversion price of the July 2013 Debentures was reduced from $1.94 (CAD$2.00) per share to $1.21 (CAD$1.25) per share. On December 23, 2013, the Trustee and us entered into an Amended and Restated Convertible Debenture Indenture which reflects the modification and alteration of the rights of the Debentureholders and the Trustee against us with respect to (i) the secured assets to now only include those specific assets held by the Guarantor as set forth in Schedule “F” to the Amended and Restated Convertible Debenture Indenture having an acquisition cost of $3.9 million, and (ii) the reduction of the conversion price of the July 2013 Debentures from $1.94 (CAD$2.00) per share to $1.21 (CAD$1.25) per share. In addition, on the same date, the Guarantor and the Trustee entered into an Amended and Restated Guaranty and Security Agreement, which reflects the modification and alteration with respect to the secured assets as discussed above.

~~OFF-BALANCE~~Debt ~~SHEET ARRANGEMENTS~~

AsOn ofDecember ~~the~~1, ~~date~~2013, we purchased certain assets of ~~this~~a ~~prospectus,~~European fiber wedyeing dofacility. ~~not~~We ~~have~~acquired ~~any~~these assets by assuming an aggregate of $1.2 ~~off-balance~~million ~~sheet~~of ~~arrangements~~the ~~that~~seller’s ~~have~~debts, orwhich ~~are~~we ~~reasonably~~have ~~likely~~agreed to ~~have,~~repay ~~a current~~on orthe ~~future~~earlier ~~effect~~of their onrespective ~~our~~due ~~financial~~dates ~~condition~~and December 1, ~~changes~~2018. inOn ~~financial condition~~December 13, ~~revenues~~2013, orwe entered ~~expenses,~~into ~~results~~an ofamended ~~operations,~~asset ~~liquidity~~purchase agreement for such assets, ~~capital~~which replaced ~~expenditures~~the orinitial ~~capital~~asset ~~resources~~purchase agreement and provides that ~~are~~the ~~material~~title to ~~investors.~~and ~~The term~~economic ~~“off-balance~~risk ~~sheet~~in ~~arrangement”~~respect ~~generally~~of ~~means~~the ~~any~~environmental ~~transaction,~~permit ~~agreement~~and ~~or other~~the ~~contractual~~employees ~~arrangement~~passed to ~~which~~us anon December ~~entity~~1, ~~unconsolidated~~2013, ~~with~~however, usthe istitle ato the equipment at the facility shall only ~~party,~~pass ~~under~~to ~~which~~us weupon ~~have~~full ~~any~~payment ~~obligation~~of ~~arising~~the ~~under~~foregoing aassumed ~~guarantee~~indebtedness ~~contract,~~of the ~~derivative~~seller, ~~instrument~~notwithstanding orthe ~~variable~~fact ~~interest;~~that orphysical apossession ~~retained~~and oreconomic ~~contingent~~risk ~~interest~~of inall assets ~~transferred~~of tothe ~~such~~acquired ~~entity~~facility orpassed ~~similar~~to ~~arrangement~~us ~~that~~on ~~serves~~December ~~as credit~~1, ~~liquidity~~2013. orWe ~~market~~have reached ~~risk~~an ~~support~~oral agreement with the seller to lease the real property for ~~such~~the facility ~~assets~~and are in the process of formalizing that oral agreement.

~~Item~~On December 19, 2013, but having an effective date of November 29, 2013, we entered into a loan agreement (the “Loan Agreement”) with IKEA Supply AG (“IKEA”), whereby IKEA agreed to loan us $3.0 ~~Quantitative~~million (€2.2 million, approximately CAD$3.2 million) (the “IKEA Loan”) having a term until June 25, 2016 and ~~Qualitative~~bearing ~~Disclosures~~interest ~~about~~at ~~Market~~a ~~Risk~~rate of 1.9% per annum. As security for the IKEA Loan, IKEA required that the IKEA Loan be secured by assets purchased with the proceeds of the IKEA Loan, as well as a portion of the secured assets used to secure the July 2013 Debentures. The proceeds from the IKEA Loan are designated for the installation of equipment to support and expand our European production facility and for working capital to fulfill IKEA orders. During the First Three Quarters of 2014 the Company received $2,906,985 (€2,200,000) pursuant to the loan agreement.

We21 ~~are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.~~

~~Item~~We 4.entered ~~Controls~~into the following loan arrangements with each of the following directors: Jason Finnis, Kenneth Barker and ~~Procedures~~Robert Edmunds:

~~Disclosure~~• ~~Controls~~Finnis. Pursuant to a convertible promissory note, dated for reference October 11, 2013, Mr. Finnis granted us a loan in the principal amount of $96,180 (CAD$100,000) bearing interest at a rate of 12% per annum and ~~Procedures~~due on December 11, 2013. On November 7, 2013, we repaid to Mr. Finnis $47,885 (CAD$50,000), such that a principal amount of $47,885 (CAD$50,000) remained due and payable on the loan. Pursuant to a loan extension agreement, dated for reference December 18, 2013, Mr. Finnis and we agreed to extend the term for repayment of the loan and interest thereon until the earlier of (i) December 20, 2014 and (ii) such time as we complete our next public offering of registered securities by way of a registration statement on Form S-1 of not less than $2.8 million (CAD$3.0 million) in gross proceeds to us. We repaid this loan and interest thereon in full in April 2014. • Barker. Pursuant to a convertible promissory note, dated for reference October 11, 2013, Mr. Barker granted us a loan in the principal amount of $50,000 bearing interest at a rate of 12% per annum and due and payable on December 11, 2013. Pursuant to a loan extension agreement, dated for reference December 18, 2013, Mr. Barker and we agreed to extend the term for repayment of the loan and interest thereon until the earlier of (i) December 20, 2014 and (ii) such time as we complete our next public offering of registered securities by way of a registration statement on Form S-1 of not less than $2.8 million (CAD$3.0 million) in gross proceeds to us. We repaid this loan and interest thereon in full in April 2014. • Edmunds. Pursuant to demand convertible promissory notes, dated for reference October 11, 2013 and December 4, 2013, respectively, Mr. Edmunds granted us loans in the aggregate principal amount of $509,624 (CAD$545,000) bearing interest at a rate of 20% per annum. Pursuant to a loan extension agreement, dated for reference December 18, 2013, Mr. Edmunds and we agreed to extend the term for repayment of the loan and interest thereon until the earlier of (i) December 20, 2014 and (ii) such time as we complete our next public offering of registered securities by way of a registration statement on Form S-1 of not less than $2.8 million (CAD$3.0 million) in gross proceeds to us. As consideration for the extension, we issued to Mr. Edmunds 181,666 shares of our common stock at a deemed value of $0.56 (CAD$0.60) per share. We repaid this loan and interest thereon in full in April 2014.

~~Lesley~~We ~~Hayes,~~are ~~our~~committed ~~Chief~~to ~~Executive~~annual ~~Officer,~~debt and ~~Theodore Sanders,~~debenture ~~our~~interest ~~Chief~~payments over ~~Financial Officer, have evaluated~~ the ~~effectiveness~~next offive ~~our disclosure~~years ~~controls and procedures (~~as ~~defined~~follows (in ~~Rule 13a-15(e~~thousands): of the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on that evaluation, they concluded that our disclosure controls and procedures were effective as of March 28, 2015.

No Changes in Internal Control over Financial Reporting

2015	$	786
2016		1,417
2017		920
2018		13
2019		12
Total	$	3,148

~~There~~Annual were no changes in our internal control over financial reporting that occurred during our fiscal quarter ended March 28, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Leases

~~PART~~We IIare –committed ~~OTHER~~to ~~INFORMATION~~current annual lease payments totaling $1.1 million for all of our premises under lease. Approximate minimum lease payments over the next five years are as follows (in thousands):

Item 1. Legal Proceedings

2015	$	130
2016		239
2017		227
2018		236
2019		220
Total	$	1,100

~~Management~~OFF-BALANCE isSHEET ~~not~~ARRANGEMENTS aware of any material legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Report, no director, officer or affiliate is a party adverse to us in any legal proceeding, or has an adverse interest to us in any legal proceedings. Management is not aware of any other material legal proceedings pending or that have been threatened against us or our properties.

22As of the date of this prospectus, we do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest; or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

~~Item~~22 ~~1A. Risk Factors~~

WeItem ~~are~~3. aQuantitative ~~smaller reporting company as defined by Rule 12b-2 of the Exchange Act~~ and ~~are~~Qualitative ~~not~~Disclosures ~~required~~about toMarket ~~provide the information required under this item.~~ Risk

~~Item~~We 2.are ~~Unregistered~~a ~~Sales~~smaller reporting company as defined by Rule 12b-2 of the ~~Equity~~Exchange ~~Securities~~Act and ~~Use~~are ofnot ~~Proceeds~~required to provide the information required under this item.

~~During~~Item ~~our fiscal quarter ended March 28, 2015, we did not sell any equity securities that were not registered under the U~~4.S. ~~Securities~~Controls ~~Act~~and ~~of 1933, as amended.~~Procedures

~~Item~~Disclosure 3.Controls ~~Defaults~~and ~~upon~~Procedures ~~Senior Securities~~

~~None~~Lesley Hayes, our Chief Executive Officer, and Theodore Sanders, our Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on that evaluation, they concluded that our disclosure controls and procedures were effective as of June 27, 2015.

~~Item~~No 4.Changes ~~Mine~~in ~~Safety~~Internal ~~Disclosures~~Control over Financial Reporting

~~Not~~There ~~applicable~~were no changes in our internal control over financial reporting that occurred during our fiscal quarter ended June 27, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~Item~~PART 5.II ~~Other~~– ~~Information~~OTHER INFORMATION

~~Not~~Item ~~applicable~~1. Legal Proceedings

~~Item~~Management 6is not aware of any material legal proceedings contemplated by any governmental authority or any other party involving us or our properties. ~~Exhibits~~As of the date of this Report, no director, officer or affiliate is a party adverse to us in any legal proceeding, or has an adverse interest to us in any legal proceedings. Management is not aware of any other material legal proceedings pending or that have been threatened against us or our properties.

Exhibit	Document
No.
3.1	Notice of Articles (23)
3.2	Articles, as amended (23)
4.1	Convertible Debenture Indenture among CRAiLAR Technologies Inc. and Computershare Trust Company of Canada, dated September 20, 2012 (18)
4.2	Convertible Debenture Indenture among CRAiLAR Technologies Inc. and Computershare Trust Company of Canada, dated February 25, 2013 (16)
4.3	Form of Subscription Agreement for Secured Subordinated Convertible Debentures (February 25, 2013) (16)
4.4	Convertible Debenture Indenture among CRAiLAR Technologies Inc. and Computershare Trust Company of Canada, dated July 26, 2013 (19)
4.5	Form of Subscription Agreement for Secured Convertible Debentures (July 26, 2013) (19)
4.6	Form of Warrant (July 26, 2013) (19)
4.7	Amended and Restated Convertible Debenture Indenture among Crailar Technologies Inc. and Computershare Trust Company of Canada, dated December 23, 2013 (21)
4.8	Form of Subscription Agreement for December 20, 2013 private placement (21)
4.9	Form of Warrant for December 20, 2013 private placement (21)
4.10	Form of Warrant for August 6, 2014 offering (26)
10.1	Collaboration Agreement dated effective May 7, 2004 between Hemptown Clothing, Inc., and the National Research Council of Canada (1)
10.2	Renewed Collaboration Agreement dated effective December 7, 2007 between CRAiLAR Fiber Technologies Inc., and the National Research Council of Canada (1)
10.3	Amendment to the Renewed Collaboration Agreement dated effective February 19, 2010 between Naturally Advanced Technologies Inc. and the National Research Council of Canada (1)
10.4	Master Agreement for Technology Development between Alberta Research Council and CRAiLAR Fiber Technologies dated January 1, 2007 (2)
10.5	CEO Executive Services Agreement between Naturally Advanced Technologies Inc. and Meriwether Accelerators LLC dated November 27, 2007 with effective date of August 24, 2007 (3)
10.6	2006 Stock Option Plan (4)
10.7	Letter Agreement dated September 2, 2008 between Naturally Advanced Technologies Inc. and Lipper/Heilshorn & Associates, Inc. (5)
10.8	Renewal of CEO Executive Services Agreement between Naturally Advanced Technologies Inc. and Meriwether Accelerators LLC dated October 14, 2008 (6)
10.9	2008 Fixed Share Stock Option Plan (7)
10.10	CEO Executive Services Agreement between Naturally Advanced Technologies Inc. and Kenneth Barker, dated for reference August 24, 2009 (9)
10.11	Service Agreement between Naturally Advanced Technologies Inc. and OrganicWorks Marketing LLC dated November 25, 2010 (9)

Item 1A. Risk Factors

23We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

10.12	Equipment Lease and Location Sublease dated August 9, 2010 between Naturally Advanced Technologies Inc. and Eastern Flax of South Carolina, LLC (10)
10.13	2010 Fixed Share Option Plan (11)
10.14	Lease Agreement, dated June 30, 2011 between 0702311 BC Ltd. and Naturally Advanced Technologies Inc. (13)
10.15	Office Lease Agreement dated August 8, 2011 between Naturally Advanced Technologies Inc. and MDW Properties, LLC (13)
10.16	Lease Agreement dated July 1, 2011 between Naturally Advanced Technologies Inc. and Jessie Dale McCollough (13)
10.17	2011 Fixed Share Option Plan, as amended (28)
10.18	Lease Agreement dated March 14, 2012 between Colony Square Investment Company, LLC and Naturally Advanced Technologies US Inc. (13)
10.19	Supply Agreement among CRAiLAR Technologies Inc. and Kowa Company Ltd., dated January 10, 2013 (14)
10.20	Development Agreement among CRAiLAR Technologies Inc. and Cotswold Industries Inc., dated February 10, 2013 (15)
10.21	Senior Executive Employment Agreement between the Company and Kenneth Barker, dated April 2, 2012 (18)
10.22	Senior Executive Employment Agreement between the Company and Guy Prevost, dated April 2, 2012 (18)
10.23	Senior Executive Employment Agreement between the Company and Jason Finnis, dated April 2, 2012 (18)
10.24	Senior Executive Employment Agreement between the Company and Larisa Harrison, dated April 2, 2012 (18)
10.25	Senior Executive Employment Agreement between the Company and Jay Nalbach, dated April 24, 2012 (18)
10.26	Senior Executive Employment Agreement between the Company and Tom Robinson dated June 18, 2012 (18)
10.27	Marketing and Development Agreement among CRAiLAR Technologies Inc. and Cone Denim LLC., dated March 11, 2013 (17)
10.28	Demand Convertible Promissory Note from CRAiLAR Technologies Inc. to Robert Edmunds, dated October 11, 2013 (20)
10.29	Asset Purchase Agreement between Schrurs NV, CRAiLAR Technologies Inc. and Mr. Serge Schrurs, dated November 6, 2013 (24) (†)
10.30	Loan Agreement between Crailar Technologies Inc. and IKEA Supply AG, dated November 29, 2013 (24) (†)
10.31	General Supply Agreement between Crailar Technologies Inc. and IKEA Supply AG, dated December 9, 2013 (22) (†)
10.32	Asset Purchase Agreement between Schrurs NV, CRAiLAR Technologies Inc. and Mr. Serge Schrurs, dated December 13, 2013 (22) (†)
10.33	Framework Agreement Development Work between IKEA Supply AG, Crailar Technologies Inc. and Schrurs NV, dated December 13, 2013 (22) (†)
10.34	Tripartite Agreement between National Research Council of Canada, CRAiLAR Technologies Inc. and IKEA Supply AG, dated December 18, 2013 (21)
10.35	Amended and Restated Promissory Note from Crailar Technologies Inc. to Jason Finnis, dated January 21, 2014 (21)
10.36	Amended and Restated Promissory Note from Crailar Technologies Inc. to Kenneth Barker, dated January 21, 2014 (21)
10.37	Amended and Restated Promissory Note from Crailar Technologies Inc. to Robert Edmunds, dated January 21, 2014 (21)
10.38	Senior Executive Employment Agreement between Crailar Technologies Inc. and Ted Sanders, dated April 16, 2014 (25)
10.39	Consulting Services Agreement between Crailar Technologies Inc. and Kenneth C. Barker, dated November 10, 2014 (27)
14.1	Code of Ethics (8)
31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act *
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act *
32.1	Certification of Chief Executive Officer and Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *
101.INS	XBRL Instance Document *
101.SCH	XBRL Taxonomy Extension Schema *
101.CAL	XBRL Taxonomy Extension Calculation Linkbase *
101.DEF	XBRL Taxonomy Extension Definition Linkbase *
101.LAB	XBRL Taxonomy Extension Label Linkbase *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase *

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

24During our fiscal quarter ended June 27, 2015, we did not sell any equity securities that were not registered under the U.S. Securities Act of 1933, as amended.

*	Filed herewith.
(1)	Filed as an exhibit to our Form 8-K as filed with the SEC on March 8, 2010.
(2)	Filed as an exhibit to our Form 8-K as filed with the SEC on June 25, 2007.
(3)	Filed as an exhibit to our Form 8-K as filed with the SEC on December 21, 2007.
(4)	Filed as an exhibit to our Form 10-KSB for fiscal year ended December 31, 2006 as filed with the SEC on March 31, 2007.
(5)	Filed as an exhibit to our Form 8-K as filed with the SEC on September 8, 2008.
(6)	Filed as an exhibit to our Form 8-K as filed with the SEC on October 28, 2008.
(7)	Filed as an exhibit to our Form S-8 as filed with the SEC on October 10, 2008.
(8)	Filed as an exhibit to our Form 10-KSB for fiscal year ended December 31, 2007 as filed with the SEC on April 11, 2008
(9)	Filed as an exhibit to our Form 10-K for the fiscal year ended December 31, 2010, as filed with the SEC on April 13, 2010.
(10)	Filed as an exhibit to our Form 8-K as filed with the SEC on August 12, 2010.
(11)	Filed as an exhibit to our Form 10-Q for the quarter ended September 30, 2010, as filed with the SEC on November 15, 2011.
(12)	Filed as an exhibit to our Form S-8 as filed with the SEC on February 16, 2012.
(13)	Filed as an exhibit to our Form 10-Q for the quarter ended March 31, 2012, as filed with the SEC on May 11, 2012.
(14)	Filed as an exhibit to our Form 8-K as filed with the SEC on January 16, 2013.
(15)	Filed as an exhibit to our Form 8-K as filed with the SEC on February 14, 2013.
(16)	Filed as an exhibit to our Form 8-K as filed with the SEC on February 26, 2013.
(17)	Filed as an exhibit to our Form 8-K as filed with the SEC on March 14, 2013.
(18)	Filed as an exhibit to our Form 10-K as filed with the SEC on March 18, 2013.
(19)	Filed as an exhibit to our Form 8-K as filed with the SEC on July 31, 2013.
(20)	Filed as an exhibit to our Form 10-Q as filed with the SEC on November 7, 2013.
(21)	Filed as an exhibit to our Form 8-K as filed with the SEC on February 5, 2014.
(22)	Filed as an exhibit to our Form 8-K/A as filed with the SEC on February 21, 2014.
(23)	Filed as an exhibit to our Form 10-K for the fiscal year ended December 28, 2013, as filed with the SEC on March 28, 2014.
(24)	Filed as an exhibit to our Form 8-K/A as filed with the SEC on May 6, 2014.
(25)	Filed as an exhibit to our Form 10-Q for the quarter ended March 29, 2014, as filed with the SEC on May 19, 2014.
(26)	Filed as an exhibit to our Registration Statement on Form S-1 (Amendment No. 2), as filed with the SEC on July 31, 2014.
(27)	Field as an exhibit to our Form 8-K filed with the SEC on November 17, 2014.
(28)	Filed as an exhibit to our Form 10-K for fiscal year ended December 31, 2014 , as filed with the SEC on April 13, 2015.
(†)	Portions of this exhibit have been omitted pursuant to a request for confidential treatment.

Item 3. Defaults upon Senior Securities

25None.

~~SIGNATURES~~Item 4. Mine Safety Disclosures

~~Pursuant~~Not ~~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, thereunto duly authorized~~applicable.

CRAILAR TECHNOLOGIES INC.
By:	/s/ Lesley Hayes
	Lesley Hayes
	Chief Executive Officer and a director
	Date: May 18, 2015
By:	/s/ Theodore Sanders
	Theodore Sanders
	Chief Financial Officer
	Date: May 18, 2015

Item 5. Other Information

Not applicable

Item 6. Exhibits

Exhibit	Document
No.
3.1	Notice of Articles (23)
3.2	Articles, as amended (23)
4.1	Convertible Debenture Indenture among CRAiLAR Technologies Inc. and Computershare Trust Company of Canada, dated September 20, 2012 (18)
4.2	Convertible Debenture Indenture among CRAiLAR Technologies Inc. and Computershare Trust Company of Canada, dated February 25, 2013 (16)
4.3	Form of Subscription Agreement for Secured Subordinated Convertible Debentures (February 25, 2013) (16)
4.4	Convertible Debenture Indenture among CRAiLAR Technologies Inc. and Computershare Trust Company of Canada, dated July 26, 2013 (19)
4.5	Form of Subscription Agreement for Secured Convertible Debentures (July 26, 2013) (19)
4.6	Form of Warrant (July 26, 2013) (19)
4.7	Amended and Restated Convertible Debenture Indenture among Crailar Technologies Inc. and Computershare Trust Company of Canada, dated December 23, 2013 (21)
4.8	Form of Subscription Agreement for December 20, 2013 private placement (21)
4.9	Form of Warrant for December 20, 2013 private placement (21)
4.10	Form of Warrant for August 6, 2014 offering (26)
10.1	Collaboration Agreement dated effective May 7, 2004 between Hemptown Clothing, Inc., and the National Research Council of Canada (1)
10.2	Renewed Collaboration Agreement dated effective December 7, 2007 between CRAiLAR Fiber Technologies Inc., and the National Research Council of Canada (1)
10.3	Amendment to the Renewed Collaboration Agreement dated effective February 19, 2010 between Naturally Advanced Technologies Inc. and the National Research Council of Canada (1)
10.4	Master Agreement for Technology Development between Alberta Research Council and CRAiLAR Fiber Technologies dated January 1, 2007 (2)
10.5	CEO Executive Services Agreement between Naturally Advanced Technologies Inc. and Meriwether Accelerators LLC dated November 27, 2007 with effective date of August 24, 2007 (3)
10.6	2006 Stock Option Plan (4)
10.7	Letter Agreement dated September 2, 2008 between Naturally Advanced Technologies Inc. and Lipper/Heilshorn & Associates, Inc. (5)
10.8	Renewal of CEO Executive Services Agreement between Naturally Advanced Technologies Inc. and Meriwether Accelerators LLC dated October 14, 2008 (6)
10.9	2008 Fixed Share Stock Option Plan (7)
10.10	CEO Executive Services Agreement between Naturally Advanced Technologies Inc. and Kenneth Barker, dated for reference August 24, 2009 (9)
10.11	Service Agreement between Naturally Advanced Technologies Inc. and OrganicWorks Marketing LLC dated November 25, 2010 (9)
10.12	Equipment Lease and Location Sublease dated August 9, 2010 between Naturally Advanced Technologies Inc. and Eastern Flax of South Carolina, LLC (10)
10.13	2010 Fixed Share Option Plan (11)
10.14	Lease Agreement, dated June 30, 2011 between 0702311 BC Ltd. and Naturally Advanced Technologies Inc. (13)
10.15	Office Lease Agreement dated August 8, 2011 between Naturally Advanced Technologies Inc. and MDW Properties, LLC (13)
10.16	Lease Agreement dated July 1, 2011 between Naturally Advanced Technologies Inc. and Jessie Dale McCollough (13)
10.17	2011 Fixed Share Option Plan, as amended (28)
10.18	Lease Agreement dated March 14, 2012 between Colony Square Investment Company, LLC and Naturally Advanced Technologies US Inc. (13)
10.19	Supply Agreement among CRAiLAR Technologies Inc. and Kowa Company Ltd., dated January 10, 2013 (14)
10.20	Development Agreement among CRAiLAR Technologies Inc. and Cotswold Industries Inc., dated February 10, 2013 (15)
10.21	Senior Executive Employment Agreement between the Company and Kenneth Barker, dated April 2, 2012 (18)
10.22	Senior Executive Employment Agreement between the Company and Guy Prevost, dated April 2, 2012 (18)
10.23	Senior Executive Employment Agreement between the Company and Jason Finnis, dated April 2, 2012 (18)
10.24	Senior Executive Employment Agreement between the Company and Larisa Harrison, dated April 2, 2012 (18)
10.25	Senior Executive Employment Agreement between the Company and Jay Nalbach, dated April 24, 2012 (18)
10.26	Senior Executive Employment Agreement between the Company and Tom Robinson dated June 18, 2012 (18)

10.27	Marketing and Development Agreement among CRAiLAR Technologies Inc. and Cone Denim LLC., dated March 11, 2013 (17)
10.28	Demand Convertible Promissory Note from CRAiLAR Technologies Inc. to Robert Edmunds, dated October 11, 2013 (20)
10.29	Asset Purchase Agreement between Schrurs NV, CRAiLAR Technologies Inc. and Mr. Serge Schrurs, dated November 6, 2013 (24) (†)
10.30	Loan Agreement between Crailar Technologies Inc. and IKEA Supply AG, dated November 29, 2013 (24) (†)
10.31	General Supply Agreement between Crailar Technologies Inc. and IKEA Supply AG, dated December 9, 2013 (22) (†)
10.32	Asset Purchase Agreement between Schrurs NV, CRAiLAR Technologies Inc. and Mr. Serge Schrurs, dated December 13, 2013 (22) (†)
10.33	Framework Agreement Development Work between IKEA Supply AG, Crailar Technologies Inc. and Schrurs NV, dated December 13, 2013 (22) (†)
10.34	Tripartite Agreement between National Research Council of Canada, CRAiLAR Technologies Inc. and IKEA Supply AG, dated December 18, 2013 (21)
10.35	Amended and Restated Promissory Note from Crailar Technologies Inc. to Jason Finnis, dated January 21, 2014 (21)
10.36	Amended and Restated Promissory Note from Crailar Technologies Inc. to Kenneth Barker, dated January 21, 2014 (21)
10.37	Amended and Restated Promissory Note from Crailar Technologies Inc. to Robert Edmunds, dated January 21, 2014 (21)
10.38	Senior Executive Employment Agreement between Crailar Technologies Inc. and Ted Sanders, dated April 16, 2014 (25)
10.39	Consulting Services Agreement between Crailar Technologies Inc. and Kenneth C. Barker, dated November 10, 2014 (27)
14.1	Code of Ethics (8)
31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act *
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act *
32.1	Certification of Chief Executive Officer and Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *
101.INS	XBRL Instance Document *
101.SCH	XBRL Taxonomy Extension Schema *
101.CAL	XBRL Taxonomy Extension Calculation Linkbase *
101.DEF	XBRL Taxonomy Extension Definition Linkbase *
101.LAB	XBRL Taxonomy Extension Label Linkbase *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase *

*	Filed herewith.
(1)	Filed as an exhibit to our Form 8-K as filed with the SEC on March 8, 2010.
(2)	Filed as an exhibit to our Form 8-K as filed with the SEC on June 25, 2007.
(3)	Filed as an exhibit to our Form 8-K as filed with the SEC on December 21, 2007.
(4)	Filed as an exhibit to our Form 10-KSB for fiscal year ended December 31, 2006 as filed with the SEC on March 31, 2007.
(5)	Filed as an exhibit to our Form 8-K as filed with the SEC on September 8, 2008.
(6)	Filed as an exhibit to our Form 8-K as filed with the SEC on October 28, 2008.
(7)	Filed as an exhibit to our Form S-8 as filed with the SEC on October 10, 2008.
(8)	Filed as an exhibit to our Form 10-KSB for fiscal year ended December 31, 2007 as filed with the SEC on April 11, 2008
(9)	Filed as an exhibit to our Form 10-K for the fiscal year ended December 31, 2010, as filed with the SEC on April 13, 2010.
(10)	Filed as an exhibit to our Form 8-K as filed with the SEC on August 12, 2010.
(11)	Filed as an exhibit to our Form 10-Q for the quarter ended September 30, 2010, as filed with the SEC on November 15, 2011.
(12)	Filed as an exhibit to our Form S-8 as filed with the SEC on February 16, 2012.
(13)	Filed as an exhibit to our Form 10-Q for the quarter ended March 31, 2012, as filed with the SEC on May 11, 2012.
(14)	Filed as an exhibit to our Form 8-K as filed with the SEC on January 16, 2013.
(15)	Filed as an exhibit to our Form 8-K as filed with the SEC on February 14, 2013.
(16)	Filed as an exhibit to our Form 8-K as filed with the SEC on February 26, 2013.
(17)	Filed as an exhibit to our Form 8-K as filed with the SEC on March 14, 2013.
(18)	Filed as an exhibit to our Form 10-K as filed with the SEC on March 18, 2013.
(19)	Filed as an exhibit to our Form 8-K as filed with the SEC on July 31, 2013.
(20)	Filed as an exhibit to our Form 10-Q as filed with the SEC on November 7, 2013.
(21)	Filed as an exhibit to our Form 8-K as filed with the SEC on February 5, 2014.
(22)	Filed as an exhibit to our Form 8-K/A as filed with the SEC on February 21, 2014.
(23)	Filed as an exhibit to our Form 10-K for the fiscal year ended December 28, 2013, as filed with the SEC on March 28, 2014.
(24)	Filed as an exhibit to our Form 8-K/A as filed with the SEC on May 6, 2014.
(25)	Filed as an exhibit to our Form 10-Q for the quarter ended March 29, 2014, as filed with the SEC on May 19, 2014.
(26)	Filed as an exhibit to our Registration Statement on Form S-1 (Amendment No. 2), as filed with the SEC on July 31, 2014.

(27)	Field as an exhibit to our Form 8-K filed with the SEC on November 17, 2014.
(28)	Filed as an exhibit to our Form 10-K for fiscal year ended December 31, 2014, as filed with the SEC on April 13, 2015.
(†)	Portions of this exhibit have been omitted pursuant to a request for confidential treatment.

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, thereunto duly authorized.

CRAILAR TECHNOLOGIES INC.

By:	/s/ Lesley Hayes
	Lesley Hayes
	Chief Executive Officer and a director
	Date: August 17, 2015

By:	/s/ Theodore Sanders
	Theodore Sanders
	Chief Financial Officer
	Date: August 17, 2015

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