CEAPRO INC.
TSX VENTURE : CZO

CEAPRO INC.

May 17, 2007 08:00 ET

Ceapro Building Momentum: Reports Steady Growth in Q1 Sales and Operational Profitability

EDMONTON, May 17 - Ceapro Inc. (TSX VENTURE:CZO) is pleased to
report steady growth in sales during the first quarter of 2007. Revenues
reached $962,000, an increase of 7% or $63,000 over the same period in 2006,
while margins were maintained at 57%. The sales of active ingredients
increased by 34% to $789,000 while veterinary therapeutic sales decreased by
45% due to the timing of orders with shipments moved to the second quarter of
2007.

"We are continuing to build on our momentum of 2006. Our key goal is to
achieve profitability for 2007 and we're on track: increasing production
capacity to meet market demand for our products and developing partnerships
and distribution agreements in the lucrative markets of nutraceuticals,
cosmeceuticals and animal health," said Mark Redmond CEO and President of
Ceapro.



Financial Result Highlights and Outlook

- Increased sales by 7% to a record $962,000 compared with $899,000
over the same period in 2006.
- Grew active ingredient sales by 34% over the same period in 2006.
- Realized operational profitability of $99,000 before R&D expenses.
- Achieved gross margins of 57% up from 51% over the first quarter of
2006.
- Reduced net losses to $22,000, a 43% improvement over the loss of
$51,000 for the first quarter of 2006.
- Geared production capacity expansion by a factor of 2.5 times to be
completed by the end of June.


The complete unaudited quarterly report and financial statements are
available for review on SEDAR at: http://www.sedar.com and on the Company's
website www.ceapro.com.

About Ceapro Inc.

Ceapro Technology Inc., Ceapro Veterinary Products Inc., Ceapro Active
Ingredients Inc. and Ceapro Bioenergy Inc. are wholly owned subsidiaries of
Ceapro Inc., which is a Canadian growth-stage biotechnology company. Our
primary business activities relate to the development and commercialization of
organic products for medical, cosmetic and animal health industries using
proprietary technology and natural, renewable resources. We will be applying
our technology to become an active participant in the bioenergy sector. We
have also introduced health and wellness services employing our CeaProve®
diagnostic technology.

The TSX has neither approved nor disapproved of the information contained herein -

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 Statements of Net (Loss) Income and Deficit
Unaudited

Three Months and Quarter Ended March 31
2007 2006
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Revenue
Sales $ 961,627 $ 899,199
Cost of goods sold 410,136 437,113
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Gross margin 551,491 462,086
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Expenses
General and administration 246,120 235,741
Royalties 90,854 89,553
Sales and marketing 72,771 70,216
Amortization 32,146 35,732
Interest on long-term debt 9,631 10,379
Interest on callable debt and other 625 1,532
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452,147 443,153
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Income from operations 99,344 18,933
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Other income (expenses)
Research and product development (101,962) (71,356)
Bio-energy feasibility study (22,714) -
Other income 3,636 1,137
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(121,040) (70,219)
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NET (LOSS) INCOME FOR THE PERIOD (21,696) (51,286)

Deficit, beginning of period (2,332,738) (2,060,381)
-------------------------------------------------------------------------

Deficit, end of period $(2,354,434) $(2,111,667)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Net (loss) income per share:
Basic $ (0.00) $ (0.00)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Diluted $ (0.00) $ (0.00)
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CEAPRO INC.
Consolidated Balance Sheets

March 31 December 31
2007 2006
(Unaudited) (Audited)
-------------------------------------------------------------------------

ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 180,484 $ 310,926
Accounts receivable 979,732 634,256
Inventories 248,742 160,456
Prepaid expenses and deposits 133,996 178,751
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1,542,954 1,284,389
PROPERTY AND EQUIPMENT (NET OF ACCUMULATED
AMORTIZATION) 594,368 610,629
Deposits on property and equipment 223,613 167,828
-------------------------------------------------------------------------

$ 2,360,935 $ 2,062,846
-------------------------------------------------------------------------
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LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 657,654 $ 335,616
Current portion of deferred revenue 100,500 105,000
Callable debt 24,441 36,313
Current portion of long-term debt 37,422 36,609
Currrent portion of royalties payable 157,765 130,456
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977,782 643,994

DEFERRED ROYALTY REVENUE 352,021 369,764
EMPLOYEE FUTURE BENEFITS OBLIGATION 235,606 219,340
LONG-TERM DEBT 390,457 400,122
ROYALTIES PAYABLE 111,846 125,827
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2,067,712 1,759,047
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SHAREHOLDERS' EQUITY

SHARE CAPITAL 2,508,059 2,508,059
CONTRIBUTED SURPLUS 139,598 128,478
DEFICIT (2,354,434) (2,332,738)
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293,223 303,799
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$ 2,360,935 $ 2,062,846
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CEAPRO INC.
Consolidated Statements of Cash Flows
Unaudited

Three Months and Quarter Ended March 31
2007 2006
-------------------------------------------------------------------------

Operating Activities
Net (loss) income for the period $ (21,696) $ (51,286)
Items not affecting cash
Amortization 32,146 35,732
Employee future benefits obligation 16,266 12,900
Recognition of deferred royalty revenue (10,986) (10,273)
Stock based compensation 11,121 4,556
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26,851 (8,371)

Changes in Non-Cash Working Capital Items
Accounts receivable (345,476) 110,136
Inventories (88,286) 44,580
Prepaid expenses and deposits 44,755 25,108
Accounts payable and accrued liabilities 322,038 187,887
Deferred revenue (11,257) (115,032)
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(51,375) 244,308
-------------------------------------------------------------------------

Investing Activities
Purchase of property and equipment (15,885) (10,449)
Deposits for the purchase of property
and equipment (55,785) -
-------------------------------------------------------------------------

(71,670) (10,449)
-------------------------------------------------------------------------

Financing Activities
Repayment of long-term debt (8,853) (8,106)
Repayment of callable debt (11,872) (10,994)
Proceeds from issuance of share capital - -
Proceeds from exercise of options - 5,625
Increase (decrease) in royalties payable 13,328 99,827
-------------------------------------------------------------------------

(7,397) 86,352
-------------------------------------------------------------------------

Increase (decrease) in cash and cash
equivalents (130,442) 320,211
Cash and cash equivalents at beginning of
period 310,926 438,045
-------------------------------------------------------------------------

Cash and cash equivalents at end of period $ 180,484 $ 758,256
-------------------------------------------------------------------------
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Supplementary information:
Interest paid $ 10,256 $ 11,911
Royalties paid $ - $ -

Cash and cash equivalents consist of:
Cash and deposits with bank $ 65,194 $ 438,045
US $ term deposit 115,290 -
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$ 180,484 $ 438,045
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Contact Information

  • Dr. Mark Redmond, President and CEO, Ceapro
    Inc., Telephone (Edmonton): (780) 421-4555; Nicole Blanchard, B.Sc., B.Comm.,
    Managing Partner, Sun International Communications, Telephone (Montreal):
    (450) 627-6600