CEAPRO INC.
TSX VENTURE : CZO

CEAPRO INC.

November 21, 2007 07:30 ET

Ceapro Reports on Third Quarter 2007 Results

EDMONTON, ALBERTA--(Marketwire - Nov. 21, 2007) - Ceapro Inc. (TSX VENTURE:CZO) today announced the results for its third quarter of 2007, showing revenues at $591,000 and $2,671,000 for the first nine months of the year, versus $762,000 and $2,607,000 for the same periods in 2006.

The weak US dollar together with a reduction in Ceapro's sales volumes and an over-heated Alberta economy were the major factors adversely affecting the Company's financial performance in the third quarter. The Company moved quickly to address these issues. Financial and economic concerns will be eased by implementing price changes. Operationally, once the new production facility is commissioned fully, Ceapro will realize the benefits of highly efficient production, greater capacity, and more flexibility in processing raw materials. In this way we anticipate demonstrating robust organic growth and strong financial performance.

"We are also actively seeking and evaluating opportunities to create shareholder value in the area of mergers and acquisitions" stated President and CEO Dr Mark Redmond. "A further positive factor is the completion of the manufacturing process and the acquisition of specific manufacturing equipment for CeaProve®. As a result we will immediately initiate the Canadian CeaProve® marketing campaign focused on clinical test laboratories, the healthcare professionals, the workplace, and the general public."

Highlights for the First Nine Months and Third Quarter of 2007

- Changeover to the new production facility completed within budget.

- Reduced third quarter production and lower sales volumes resulted in decreased gross margins; results are expected to improve significantly as the new production facility becomes fully operational in the fourth quarter.

- Total sales increased by 2% for the nine month period, down 22% for third quarter over the same period in 2006.

- Gross margins of 51% and 34%, versus 58% and 56% for the corresponding periods last year.

- Incurred a loss of $861,000 compared to a loss of $151,000 in 2006 for the nine-month period. The loss was due to increased R&D investment, currency exchange losses, and net cost for a bioenergy feasibility study.

- Increased investment in automation to reduce operating costs.

- Negotiated an increased debt facility at a lower interest rate and subsequently repaid all previous debt.

- Completed two new distribution agreements in the United States for Ceapro's Certified Organic range of active ingredients.

Year to Date Accomplishments

- Commissioned a new plant offering higher efficiency, greater capacity, and enhanced product flexibility.

- Introduced seven new active ingredients. The products include: lupine peptide, oat peptide, and five certified organic plant extracts.

- Devised new processing technologies including a breakthrough new beta glucan technology using "cold extraction and alcohol-free conditions" with immediate applications and markets in nutraceuticals and functional foods.

- Completed CeaProve® manufacturing development in preparation for marketing campaign.

- Formed our own business development team, dedicated to new markets, and merger and acquisition activities.

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® screening technology. Ceapro shares trade on the Canadian TSX Venture Exchange under the symbol CZO. To learn more about Ceapro, visit www.ceapro.com.

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.



Unaudited Consolidated Financial Statements for the
Third Quarter Ended September 30, 2007


CEAPRO INC.
Consolidated Balance Sheets

September 30 December 31
2007 2006
(Unaudited) (Audited)
----------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $1,727,848 $310,926
Accounts receivable 247,872 634,256
Inventories 158,937 160,456
Prepaid expenses and deposits 293,734 178,751
----------------------------------------------------------------------

2,428,391 1,284,389
PROPERTY AND EQUIPMENT (NET OF
ACCUMULATED AMORTIZATION) 1,805,058 610,629
DEPOSITS ON PROPERTY AND EQUIPMENT 219,164 167,828
----------------------------------------------------------------------
$4,452,613 $2,062,846
----------------------------------------------------------------------
----------------------------------------------------------------------

LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities $404,433 $335,616
Current portion of deferred revenue 222,165 105,000
Callable debt - 36,313
Current portion of long-term debt 79,457 36,609
Currrent portion of royalties payable 118,483 130,456
----------------------------------------------------------------------

824,538 643,994

DEFERRED ROYALTY REVENUE 342,964 369,764
EMPLOYEE FUTURE BENEFITS OBLIGATION 268,150 219,340
LONG-TERM DEBT 886,960 400,122
ROYALTIES PAYABLE 83,885 125,827
----------------------------------------------------------------------

2,406,497 1,759,047
----------------------------------------------------------------------

SHAREHOLDERS' EQUITY

SHARE CAPITAL 4,984,877 2,508,059
CONTRIBUTED SURPLUS 254,832 128,478
DEFICIT (3,193,593) (2,332,738)
----------------------------------------------------------------------
2,046,116 303,799
----------------------------------------------------------------------
$4,452,613 $2,062,846
----------------------------------------------------------------------
----------------------------------------------------------------------



CEAPRO INC.
Consolidated Statements of Net Loss and Comprehensive Loss, and Deficit
Unaudited

Nine Months Ended Quarters Ended
September 30 September 30
2007 2006 2007 2006
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Revenue
Sales $2,670,920 $2,606,565 $ 590,709 $762,323
Cost of goods sold 1,300,326 1,103,444 388,862 334,644
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Gross margin 1,370,594 1,503,121 201,847 427,679
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Expenses
General and
administration 933,418 726,511 348,584 214,124
Royalties (net) 252,347 250,864 55,810 72,024
Sales and marketing 301,010 253,668 108,256 99,387
Amortization 98,331 108,892 33,527 36,930
Interest on
long-term debt 28,460 30,589 8,536 10,013
Interest on callable
debt and other 3,000 5,068 871 1,136
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1,616,566 1,375,592 555,584 433,614
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Income (loss) from
operations (245,972) 127,529 (353,737) (5,935)
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Other income (expenses)
Research and product
development (461,097) (259,523) (189,967) (110,789)
Bio-energy feasibility
study (66,765) - (21,095) -
Other income (expenses) (87,021) (18,948) (37,151) 20,496
--------------------------------------------------------------------------

(614,883) (278,471) (248,213) (90,293)
--------------------------------------------------------------------------

Loss before income
taxes (860,855) (150,942) (601,950) (96,228)

Income Taxes
Current - 119,000 (68,500) 35,000
Reduction as a result
of applying non-
capital losses
carried forward
against the current
period's taxable
income - (119,000) 68,500 (35,000)
--------------------------------------------------------------------------

NET LOSS AND
COMPREHENSIVE
LOSS FOR THE PERIOD (860,855) (150,942) (601,950) (96,228)

Deficit, beginning
of period (2,332,738) (2,060,381) (2,591,643) (2,115,095)
--------------------------------------------------------------------------

Deficit, end of
period $(3,193,593) $(2,211,323) $(3,193,593) $(2,211,323)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Net loss per share:
Basic $(0.02) $(0.00) $(0.01) $(0.00)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Diluted $(0.02) $(0.00) $(0.01) $(0.00)
--------------------------------------------------------------------------
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CEAPRO INC.
Consolidated Statements of Cash Flows

Unaudited

Nine Months Ended Quarters Ended
September 30 September 30
2007 2006 2007 2006
--------------------------------------------------------------------------
Operating Activities
Net loss and
comprehensive loss
for the period $(860,855) $(150,942) $(601,950) $(96,228)
Items not affecting
cash
Amortization 98,331 108,892 33,527 36,930
Employee future
benefits obligation 48,810 43,896 17,044 15,498
Recognition of
deferred royalty
revenue (30,513) (29,780) (6,747) (8,710)
Stock based
compensation 60,994 9,113 38,752 -
--------------------------------------------------------------------------

(683,233) (18,821) (519,374) (52,510)

Changes in Non-Cash
Working Capital Items
Accounts receivable 386,384 550,155 710,092 271,425
Inventories 1,519 56,707 55,460 18,201
Prepaid expenses
and deposits (114,983) (156,400) (27,607) (179,059)
Accounts payable
and accrued
liabilities 68,817 (25,545) (483,598) (414,545)
Deferred revenue 120,878 (229,676) 140,044 -
--------------------------------------------------------------------------
(220,618) 176,420 (124,983) (356,488)
--------------------------------------------------------------------------

Investing Activities
Purchase of property
and equipment (1,292,760) (149,914) (616,718) (129,840)
Deposits for the
purchase of
property and
equipment (51,336) - (28,254) -
--------------------------------------------------------------------------

(1,344,096) (149,914) (644,972) (129,840)
--------------------------------------------------------------------------

Financing Activities
Repayment of
long-term debt (27,153) (24,860) (9,251) (8,470)
Repayment of
callable debt (36,313) (33,624) (12,338) (11,424)
Proceeds from long
term debt 556,838 - - -
Proceeds from
issuance of share
capital 2,692,100 - - -
Share capital issue
costs (288,799) - (11,107) -
Proceeds from
exercise of stock
options 138,878 5,625 105,641 -
Increase (decrease)
in royalties
payable (53,915) 2,188 (69,884) (33,332)
--------------------------------------------------------------------------

2,981,636 (50,671) 3,061 (53,226)
--------------------------------------------------------------------------

Increase (decrease)
in cash and cash
equivalents 1,416,922 (24,165) (766,894) (539,554)
Cash and cash
equivalents at
beginning of period 310,926 438,045 2,494,742 953,434
--------------------------------------------------------------------------

Cash and cash
equivalents at end
of period $1,727,848 $413,880 $1,727,848 $413,880
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Supplementary
information
--------------------------------------------------------------------------
Interest paid $31,460 $35,927 $9,407 $11,149
Royalties paid $308,817 $278,458 $132,444 $114,065

Cash and cash
equivalents consist
of:
Cash on deposit
with banks $(70,497) $413,880 $(70,497) $413,880
CAD$ term deposit 1,200,000 - 1,200,000 -
US$ term deposit 598,345 - 598,345 -
--------------------------------------------------------------------------
$1,727,848 $413,880 $1,727,848 $413,880
--------------------------------------------------------------------------
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