CEAPRO INC.
TSX VENTURE : CZO

CEAPRO INC.

April 29, 2008 18:03 ET

Ceapro Reports Results for Fiscal 2007: Outlines Strategy for 2008

EDMONTON, ALBERTA--(Marketwire - April 29, 2008) - Ceapro Inc. (TSX VENTURE:CZO). The Company today released financial and operating results for the fiscal year ended December 31, 2007.

Said Ceapro President and CEO, Dr Mark Redmond, "The year 2007 was driven by significant advancements in the areas of new product development, product launches, the signing of new marketing agreements as well as improvements in the manufacturing plant. Considering a product to market-cycle of one year or more, we expect that these major investments made in 2007 will have set the stage for significant organic growth in 2008. Products developed/introduced in 2007 will be distributed through new alliances with specialist marketers in the organic sector. These alliances will allow stretching beyond cosmetics and cosmeceuticals by opening markets for us in nutraceuticals. Four of these new alliances have already been created with committed partners: Laserson, KAH Speciality Products, Harris & Ford, and East Hill." He continued, "On the corporate side, the recent turn in the Saskatchewan Claim is a cause for concern. However, until we are able to assess the judge's ruling, we will continue business as usual, innovating, creating quality product, and driving sales."

Key Developments for the Year Ended December 31, 2007

CORPORATE EVOLUTION

Mission: the focus of our mission and corporate growth strategy has become developing and commercializing products for health markets with a focus on dermatology and metabolic diseases.

Strategy: Ceapro's corporate strategy has continued to evolve. Our powerful portfolio of technology already adds value to products in the fields of pharmaceuticals and cosmeceuticals, and we are now adding the capacity to service the nutraceutical sector with our active ingredients.

Board: In recognition of the evolving nature of our business, Messrs. Gilles Gagnon and Glenn Rourke joined our Board of Directors during the year. These new members bring additional biotechnology and healthcare specific contacts and skills in the area of corporate strategic planning and business development, finance and marketing.

Legal affairs: with respect to legal matters, the trial associated with the Saskatchewan Claim is completed and we are awaiting the judge's decision, which is expected by June 30. Until all decisions have been rendered, including any appellate rulings, the ultimate impact of the Saskatchewan Claim on Ceapro will remain uncertain.

PRODUCT DEVELOPMENT

New products: in May 2007 we launched our Certified-Organic™ line of active ingredients, establishing Ceapro in the global market for natural and organic cosmetics. This market's 2007 value was $7 billion with a projected increase to $10 billion by 2010.

Pipeline: we continue to fill our product pipeline, licensing new plant varieties as candidates for the application of Ceapro's proprietary extraction technology and the development of new active ingredients.

BUSINESS ALLIANCES

- In November 2007 Ceapro signed with Canada-wide medical laboratory services provider, Gamma-Dynacare Medical Laboratories, for the distribution of CeaProve®, our accessible screening device for Type 2 diabetes.

- At the end of 2007 Ceapro signed a marketing and distribution agreement with the French firm, Laserson, to distribute a range of seven new organic products throughout France.

- In January 2008 we expanded our Certified-Organic™ line by signing two specialist distributors in the United States: KAH Specialty Products to cover the US East Coast states, and Harris & Ford for the Midwest.

- In April 2008 we announced East Hill Corporation of Korea as the Asian distributor of our Certified-Organic™ line.

Financial Results for the Full Year Ended December 31, 2007

- Total sales were $3,448,000 compared to $3,310,000 in 2006. Active ingredient sales rose $138,000 or 5% as a result of increased sales of oat oil and oat powder, the introduction of sales of animal health pre-mixes, offset by lower sales of the first generation colloidal oat extract product. The strong Canadian dollar had a material impact on the revenues of Ceapro over the year.

- Gross margin percentage were at 48% compared to 57%, primarily as a result of the decreased value of the US dollar and the effects of labour shortages, which resulted in a greater reliance on overtime hours worked. Additional factors included the use of internal resources to develop the new plant, start up adjustments from new equipment installed in the last year, and a different product sales mix with higher sales of some lower margin products.

- Net loss increased to $1,389,000 or $0.03 per share, compared with a net loss of $272,000 or $0.01 per share in 2006.

- Ceapro has increased production capacity and expanded manufacturing operations at Leduc, Alberta. The investment in capital equipment should provide returns through reduced costs and higher margins, expanded volumes, and a greater diversity of products in 2008. Total assets rose to $4,588,000 in 2007, compared to $2,063,000 in 2006.

- Ceapro is the plaintiff in legal proceedings, the 'Saskatchewan Claim', claiming that in 1998 the Saskatchewan Government Growth Fund Ltd., Saskatchewan Government Growth Fund Management Corporation, and others gained control improperly of Canamino Inc., a wholly-owned subsidiary of the company. A non-suit application in February 2008 resulted in the release of the other defendants and the striking of the claim of conspiracy against all defendants. The trial has concluded and a ruling is expected before June 30.

- The 2007 financial statements have been prepared on a going concern basis which assumes that the Company will continue in operation for the foreseeable future and accordingly will be able to realize its assets and discharge liabilities in the normal course of operations. Since inception, the Company has accumulated net losses, negative operating cash flow and has not yet achieved consistent profitability. The Company has relied on the proceeds of public and private offerings of equity securities and debentures, debt, and other income offerings to support the Company operations. The Company potentially faces material financial exposures related to litigation issues that are presently uncertain. The Company's ability to continue as a going concern is dependant on obtaining additional financial capital, achieving profitability, and generating positive cash flow to continue as a going concern.

Ceapro in 2008

- The good efforts of introducing products and expanding geographical reach in 2007 will improve the top line in 2008, 2009, and beyond.

- Relocation of our primary manufacturing operations is almost completed. We expect to realize the benefits of operating continuous processes, expanding production shifts, capacity, and flexibility to expand sales and markets.

- We expect partnerships, joint-ventures, and mergers and acquisitions to play a major role in reaching Ceapro's full potential.

- The Board resolved to hold the 2008 Annual Meeting of Shareholders on August 27 in Edmonton.

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

About Ceapro Inc.

Ceapro Inc. is a Canadian growth-stage biotechnology company whose 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 also be applying our technology to become an active participant in the bio-energy sector. We have introduced health and wellness services employing our CeaProve® diagnostic technology. 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.



CEAPRO INC.
Consolidated Balance Sheets

As at December 31
2007 2006
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ASSETS
CURRENT ASSETS
Cash and cash equivalents $1,282,326 $310,926
Accounts receivable 708,165 634,256
Inventories 156,584 160,456
Prepaid expenses and deposits 130,100 178,751
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2,277,175 1,284,389

RESTRICTED CASH 50,000 -
DEPOSITS ON PROPERTY
AND EQUIPMENT - 167,828
PROPERTY AND EQUIPMENT 2,260,418 610,629
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$4,587,593 $2,062,846
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LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued
liabilities $494,413 $335,616
Current portion deferred revenue 107,007 105,000
Callable debt - 36,313
Current portion of long-term debt 112,638 36,609
Current portion of royalties payable 138,185 130,456
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852,243 643,994

DEFERRED ROYALTY REVENUE 328,377 369,764
EMPLOYEE FUTURE BENEFITS OBLIGATION 283,648 219,340
LONG-TERM DEBT 1,499,768 400,122
ROYALTIES PAYABLE 69,905 125,827
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3,033,941 1,759,047
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SHAREHOLDERS' EQUITY

SHARE CAPITAL 5,016,395 2,508,059
CONTRIBUTED SURPLUS 259,329 128,478
DEFICIT (3,722,072) (2,332,738)
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1,553,652 303,799
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$4,587,593 $2,062,846
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CEAPRO INC.
Consolidated Statements of Net Loss and Comprehensive Loss, and
Deficit

Years ended December 31
2007 2006
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Revenue
Sales $3,447,694 $3,310,323
Cost of goods sold 1,793,997 1,413,976
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Gross margin 1,653,697 1,896,347
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Expenses
General and administration 1,258,885 1,020,296
Royalties 325,733 317,355
Sales and marketing 418,816 342,207
Amortization 120,444 146,779
Interest on long-term debt 42,954 45,133
Interest on callable debt and other 875 1,220
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2,167,707 1,872,990
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(Loss) income from operations (514,010) 23,357
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Other income (expenses)
Research and product development (695,661) (365,424)
Bioenergy Feasibility Study (91,121) -
Other (loss) income (88,542) 69,710
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(875,324) (295,714)
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Loss before income taxes (1,389,334) (272,357)
Income taxes
Current - 164,792
Reduction as a result of applying
non-capital losses carried forward
against the current year's taxable
income - (164,792)
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NET LOSS AND COMPREHENSIVE LOSS FOR
THE YEAR (1,389,334) (272,357)
Deficit, beginning of year (2,332,738) (2,060,381)
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Deficit, end of year $(3,722,072) $(2,332,738)
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Net loss per common share:
Basic $(0.03) $(0.01)
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Diluted $(0.03) $(0.01)
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Weighted average number of
common shares outstanding 42,337,607 37,188,901
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CEAPRO INC.
Consolidated Statements of Cash Flows

Years ended December 31
2007 2006
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Operating Activities
Net loss and comprehensive loss
for the year $(1,389,334) $(272,357)
Items not affecting cash and
cash equivalents
Amortization 120,444 146,779
Recognition of deferred
royalty revenue (39,390) (37,820)
Employee future benefits obligation 64,308 59,394
Stock based compensation 70,241 25,592
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(1,173,731) (78,412)
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Changes in Non-Cash Working
Capital Items
Restricted cash (50,000) -
Accounts receivable (73,909) 348,091
Inventories 3,872 67,702
Prepaid expenses and deposits 48,651 (87,990)
Accounts payable and
accrued liabilities 158,797 50,753
Deferred revenue 10 (174,092)
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87,421 204,464
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(1,086,310) 126,052
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Investing Activities
Purchase of property and equipment (1,770,233) (77,785)
Deposits on property and equipment 167,828 (167,828)
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(1,602,405) (245,613)
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Financing Activities
Repayment of long-term debt (436,731) (33,519)
Repayment of callable debt (36,313) (45,271)
Proceeds from long-term debt 1,612,406 -
Proceeds from issuance of
share capital 2,692,100 -
Proceeds from exercise of
stock options 163,876 89,227
Share capital issue costs (287,030) -
Decrease in royalties payable (48,193) (17,995)
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3,660,115 (7,558)
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Increase (decrease) in cash and
cash equivalents 971,400 (127,119)
Cash and cash equivalents at
beginning of year 310,926 438,045
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Cash and cash equivalents
at end of year $1,282,326 $310,926
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Supplementary information
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Interest paid $43,829 $46,353
Royalties paid 375,926 373,170
Cash and cash equivalents consist of:
Cash on deposit with banks $8,047 $165,251
CAD$ term deposit $1,000,000 $-
US$ term deposit $274,279 $145,675
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$1,282,326 $310,926
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