CEAPRO INC.
TSX VENTURE : CZO

CEAPRO INC.

August 15, 2005 09:00 ET

Ceapro announces 2005 second quarter financial results

EDMONTON, Aug. 15 - Ceapro Inc. (TSX VENTURE:CZO) today released its
second quarter financial results for 2005. Revenues for the second quarter of
2005 are Ceapro's best to date. Sales topped $1 million for the first time,
marking a significant milestone. Net income for the quarter was $101,481 and a
year to date a loss of $55,983.



Second Quarter Highlights

- Sales revenues climbed 38% to $1.03 million
- Net income of $101,000 marks a return to profitability in the second
quarter
- Working capital improved to a surplus of $101,000
- Gross margins increased from 50% to 60%, reflecting higher product
sales and improved plant efficiencies
- Introduced new powdered extract to the market
- Delivered four new prototype products to our partners
- Increased investment in the commercialization of CeaProve™


"As a result of strong sales, we are driving the Company forward and
making significant progress in growing our business," said Dr. Mark Redmond,
Ceapro's President and CEO. "We look forward to delivering rewards to all of
Ceapro's investors and partners"

Outlook

The initiatives undertaken last year have resulted in an increase in
sales, and our second quarter was the highest revenue quarter in Ceapro's
history. We generated net income of $101,000, and there was significant
improvement in our working capital. The expansion of sales to existing
customers, and the introduction of new products to new Customers has boosted
sales of active ingredients.

We have made strides in the development of CeaProve™, our diabetes
screening product, identifying new applications in the areas of diabetes
monitoring and drug dosage determination. The signing of new distribution
agreements for veterinary therapeutic products in Asia and Canada, the
development of new veterinary therapeutic products and their addition to the
Japan distribution agreement all pave the way for increased sales later in
2005.

We continue to pursue additional financings to fund ongoing working
capital requirements and to secure the financial resources required to support
the expected increases in the volume of sales of existing products, the
introduction of new products to existing and new markets, and the further
development of new technology. We intend to implement our operating plans in a
measured and responsible manner. We caution that additional investments may be
required to continue to grow the business and product lines and availability
of these additional investments may affect the pace of growth.

About Ceapro Inc.

Ceapro Inc, an innovation-driven biotechnology company, develops and
commercializes organic products for medical, cosmetic, and animal health
industries using proprietary technology and natural, renewable resources.
Based in Edmonton, Alberta, Ceapro is one of Alberta Venture's Fastest Growing
Companies for 2004 and 2005 and is one of Profit Magazine's Next 100
Companies. Ceapro is also the recipient of the ASTech Award for Outstanding
Commercial Achievement for companies with annual sales of less than
$25 million. Ceapro's shares trade on the TSX Venture Exchange under the
symbol CZO. To learn more about Ceapro, log on to our website at
www.ceapro.com. Shares Outstanding: 36,355,950. Recent Close: $0.28.


The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or the accuracy of this news release.

This release may contain forward-looking statements. Various factors
could cause actual results to differ materially from those projected in
forward-looking statements. Although the Company believes that the
forward-looking statements contained herein are reasonable, it can give no
assurance that the Company's expectations are correct. All forward-looking
statements are expressly qualified in their entirety by this cautionary
statement.



CEAPRO INC.
Consolidated Balance Sheets

June 30 December 31
2005 2004
(Unaudited) (Audited)
-------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash $ 110,316 $ 96,266
Accounts receivable 596,691 375,160
Inventories 270,424 345,424
Prepaid expenses and deposits 52,006 66,473
Deferred charges 75,000 50,000
-------------------------------------------------------------------------

1,104,437 933,323

RESTRICTED CASH FOR THE PURCHASE OF
PROPERTY AND EQUIPMENT 14,550 64,430

PROPERTY AND EQUIPMENT (NET OF
ACCUMULATED AMORTIZATION) 704,051 720,067
-------------------------------------------------------------------------

$ 1,823,038 $ 1,717,820
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 690,382 $ 713,201
Deferred revenue - 80,000
Callable debt 102,530 122,296
Current portion of long-term debt 32,073 28,234
Current portion of convertible debentures - 17,510
Current portion of royalties payable 177,958 104,498
-------------------------------------------------------------------------

1,002,943 1,065,739

Long-Term Debt 455,378 471,766

Royalties Payable 92,028 66,249
-------------------------------------------------------------------------

1,550,347 1,603,754
-------------------------------------------------------------------------
SHAREHOLDERS' EQUITY

SHARE CAPITAL 2,209,060 1,995,443
CONTRIBUTED SURPLUS 121,988 121,997
DEFICIT (2,058,357) (2,003,374)
-------------------------------------------------------------------------

272,691 114,066
-------------------------------------------------------------------------

$ 1,823,038 $ 1,717,820
-------------------------------------------------------------------------
-------------------------------------------------------------------------



CEAPRO INC.
Consolidated Statements of Net Income (Loss) and Deficit
Unaudited

Six Months Ended June 30 Quarters Ended June 30
2005 2004 2005 2004
----------------------------------------------- -------------------------

Revenue
Sales $ 1,420,323 $ 1,308,674 $ 1,031,795 $ 747,297
Cost of goods sold 640,152 613,505 415,849 377,278
----------------------------------------------- -------------------------

Gross margin 780,171 695,169 615,946 370,019
Royalties, licenses,
and product
development fees 80,000 227,500 - 227,500
----------------------------------------------- -------------------------

860,171 922,669 615,946 597,519
----------------------------------------------- -------------------------

Expenses
General and
administration 522,166 418,638 319,575 222,556
Royalties 177,122 179,666 125,200 111,795
Sales and marketing 119,586 60,649 67,910 28,355
Amortization 78,820 39,729 39,925 20,525
Interest on long-term
and callable debt 22,526 4,698 12,941 2,761
Interest on
convertible
debentures and other 2,347 4,061 769 1,965
----------------------------------------------- -------------------------

922,567 707,441 566,320 387,957
----------------------------------------------- -------------------------

Income (loss) from
operations (62,396) 215,228 49,626 209,562
----------------------------------------------- -------------------------

Other income (expenses)
Research and product
development (227,226) (111,336) (183,026) (77,710)
Loss on disposal of
property and
equipment - (5,171) - (5,171)
Other income
(expenses) 234,639 (57,379) 234,881 (198,007)
----------------------------------------------- -------------------------

7,413 (173,886) 51,855 (280,888)
----------------------------------------------- -------------------------

Income (loss) before
income taxes (54,983) 41,342 101,481 (71,326)

Income Taxes
Current 76,000 88,825 102,000 16,121
Reduction as a result
of applying non-
capital losses
carried forward
against the current
period's taxable
income (76,000) (88,825) (102,000) (16,121)
----------------------------------------------- -------------------------

NET (LOSS) INCOME FOR
THE PERIOD (54,983) 41,342 101,481 (71,326)

Deficit, beginning
of period (2,003,374) (1,605,637) (2,159,838) (1,492,969)
----------------------------------------------- -------------------------

Deficit, end of
period $(2,058,357) $(1,564,295) $(2,058,357) $(1,564,295)
----------------------------------------------- -------------------------
----------------------------------------------- -------------------------

Net (loss) income
per share:
Basic $ (0.002) $ 0.001 $ 0.003 $ (0.002)
----------------------------------------------- -------------------------
----------------------------------------------- -------------------------
Diluted $ (0.002) $ 0.001 $ 0.003 $ (0.002)
----------------------------------------------- -------------------------



CEAPRO INC.
Consolidated Statements of Cash Flows
Unaudited

Six Months Ended June 30 Quarters Ended June 30
2005 2004 2005 2004
----------------------------------------------- -------------------------

Operating Activities
Net (loss) income
for the period $ (54,983) $ 41,342 $ 101,481 $ (71,326)
Items not affecting
cash
Amortization 78,820 39,729 39,925 20,525
Loss on disposal
of property and
equipment - 5,171 - 5,171
Stock based
compensation 1,798 17,862 572 4,751
----------------------------------------------- -------------------------

25,635 104,104 141,978 (40,879)

Changes in Non-Cash
Working Capital
Items
Accounts receivable (221,531) (302,293) (129,078) (338,864)
Inventories 75,000 (57,406) 42,728 (68,822)
Prepaid expenses
and deposits 14,467 (62,025) 9,338 (14,481)
Deferred charges (25,000) - 50,000 61,982
Accounts payable and
accrued liabilities (22,819) 231,069 (149,170) 358,980
Deferred revenue (80,000) - - -
----------------------------------------------- -------------------------

(234,248) (86,551) (34,204) (40,084)
----------------------------------------------- -------------------------

Investing Activities
Purchase of property
and equipment (62,804) (58,122) (14,483) (41,395)
Restricted cash for
the purchase of
property and equipment 49,880 - 11,252 -
----------------------------------------------- -------------------------

(12,924) (58,122) (3,231) (41,395)
----------------------------------------------- -------------------------

Financing Activities
Repayment of
long-term debt (12,551) (39,423) (7,586) (19,258)
Repayment of
callable debt (19,766) - (9,976) -
Repayment of
convertible
debenture (20,000) - (20,000) -
Proceeds from
issuance of share
capital 204,800 - - -
Proceeds from
exercise of stock
options 9,500 27,050 - 14,550
Increase (decrease)
in royalties
payable 99,239 47,588 47,318 41,997
----------------------------------------------- -------------------------

261,222 35,215 9,756 37,289
----------------------------------------------- -------------------------

Increase (decrease)
in cash 14,050 (109,458) (27,679) (44,190)
Cash at beginning
of period 96,266 248,443 137,995 183,175
----------------------------------------------- -------------------------

Cash at end of period $ 110,316 $ 138,985 $ 110,316 $ 138,985
----------------------------------------------- -------------------------
----------------------------------------------- -------------------------

Supplementary
information
Interest paid $ 28,325 $ 9,929 $ 14,583 $ 5,006

Contact Information

  • Dr. Mark Redmond, President, Ceapro Inc.,
    Telephone: (780) 421-4555